Canada Post’s new pricing structure to take effect March 31st 2014

Canada Post’s new tiered pricing structure for domestic and international letters will go into effect on March 31, 2014. Announced in December, many of the changes reflect the use of Permanent, or P, stamps.

Single stamps will be available for $1. Canada Post has found single stamps represent approximately 2 percent of sales. The pricing changes reflect the organization’s need to continue serving different customer segments and funding its operations because it doesn’t receive taxpayer money. The move will help the agency reduce its overall operating costs, especially in the wake of decreased mail volumes. However, Canada Post statistics have found that the average household in the country uses fewer than two stamps a month. This would add less than $5 in consumer costs per year.

The price of P stamps sold in packages will rise to $0.85 on March 31 from $0.63. These stamps can be used on domestic standard letters weighing 30 grams or less. Previously bought P stamps can still be used after the cost adjustment, although other customers will need to purchase $0.22 make-up postage for the current $0.63 standard letter stamps.

Commercial postage changes
In addition to consumer pricing changes, Canada Post is updating some of its commercial rates, which could impact businesses that utilize bulk mail software to keep in touch with customers. Included in the changes are the following:

  • The new commercial rate for businesses that rely on postage meters or indicia will be $0.75 per domestic letter of 30 grams or less.
  • U.S., international and oversized Lettermail prices will also increase, but the costs won’t include differentiated prices for single stamps.
  • Companies that utilize Incentive Lettermail and meet volume and preparation requirements will be able to get lower prices: $0.70 for Machineable Lettermail and $0.69 for Presorted Lettermail, as long as mail pieces are under 30 grams.

The most significant impact of the commercial price structure changes could be in small businesses. Canada Post estimates the average price increase will be less than $55 per year in extra fees. Because of this increase, the organization will permanently lower the minimum volume requirements for some offerings so small businesses and nonprofits can continue to utilize direct mail. This move is expected to support business and charity goals in the long term because the lower postage rates will help these groups distribute marketing materials through the mail.