It’s no April Fool’s joke (and if it is, it’s an especially elaborate and cruel one): it’s now a heck of a lot more expensive for you to send mail to your customers than it was for you to do it a few days ago.
On March 31, Canada Post increased the price of a standard stamp to 85 cents—up 35% from the 63 cents it had been. (And that’s if you’re organized enough to buy them in packages or coils. The sticker price for a single stamp is now an even $1.)
For the hundreds of thousands of Canadian companies that regularly rely on lettermail for promotions or billing, this represents a potentially huge cost new cost centre.
Perhaps sensing the unrest the change will cause in the business community, Canada Post has made some effort to make the transition a little more palatable. In March, the agency announced some measures to alleviate the burden the rate increase will place on the business community. Firms using postage meters will pay a discounted commercial rate of 75 cents per standard domestic letter. And large-volume mailers who use the agency’s Incentive Lettermail services will pay between 69 and 70 cents per letter. Canada Post estimates that the increase will add $55 per year in costs for the typical SME.
These moves are a nice gesture, says Dan Kelly, president of the Canadian Federation of Independent Business (CFIB)—but they won’t do much to soften the blow for smaller firms. According to the CFIB, 98% of small and mid-sized businesses in Canada send correspondence by post each month. Some 40% send at least 50 pieces per month, and 46% rely on the postal service to receive payment from customers.
“From connecting with customers to invoicing or paying suppliers, the need isn’t going away any time soon,” said Kelly. “In the end, CFIB believes the rate hikes will hasten, rather than slow, the decline in Canada Post usage for small business.
“Rather than focus on raising prices for its customers, Canada Post should be allowed to reduce its costs more aggressively to ensure its relevance for the future.”
Later, Kelly further elaborated on his stance on Twitter, posting: “Only a government monopoly would address declining usage of its services with price hikes and service cuts.”
This story originally appeared in Profit
