Canada abandons door-to-door mail delivery

A postal worker rides his bike past a Canada Post van in Toronto. Photo / AP

Canada's postal service says it will phase out door-to-door mail delivery and cut staff in response to falling volumes and big financial losses.

Canadians will instead have to collect their mail from community mailboxes that are to be set up in neighbourhoods nationwide, Canada Post says.

The new boxes will be installed over five years, starting in the second half of 2014.

Two-thirds of Canadian households - those in newer suburbs, towns or rural parts - already receive mail delivery through community mailboxes or roadside kiosks.

The announcement impacts the remaining third of households, mostly those in older city neighbourhoods.

Canada Post also announced a near doubling of the price of sending letters to $CAN1 (NZ$1.15) per stamp, effective March 31.

Canada Post delivers close to 10 billion letters and parcels each year to more than 15.3 million addresses across the country.

In its last annual report, it noted a 23.6 per cent drop in lettermail from 2008 as Canadians increasingly turned to email and paying household bills online.

This resulted in Canada Post losing $CAN73 million in the last quarter.

And it is now projecting a $CAN1 billion financial loss by 2020 unless it makes "fundamental changes to its business," it said in a statement on Wednesday.

These changes will include cutting between 6000 and 8000 staff, or up to 12 per cent of its workforce. The average age of its employees is 48 and the company said it expects nearly 15,000 will retire or leave the company in the coming years.

"The implementation of this plan means Canada Post can return to financial sustainability by 2019," it said, citing annual savings of up to $CAN900 million.

The figure does not include expected savings in labour costs and pension restructuring, which will be addressed through collective bargaining, it said.

- AFP