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The financially-strapped Canada Post is phasing out home mail delivery over the next five years, replacing the door-to-door service with community mail boxes in central locations.
Canada Post will also cut 6,000 to 8,000 jobs in the postal industry, and raise the price of the postage stamp by 22 cents.
Here & Now’s Jeremy Hobson speaks with CBC reporter Rosemary Barton about the shift in Canada, and then talks with Washington Post reporter Ed O’Keefe about what the U.S. can learn from its northern neighbor.
JEREMY HOBSON, HOST:
This is HERE AND NOW.
Canadians are coming to terms with an issue that, so far, Americans have avoided: What to do with a postal service that is financially strapped? Canada Post announced last week it is ending home mail delivery. It will replace door-to-door service with community mailboxes over the next five years. It will also raise the price of a stamp by 30 percent.
For more, we're joined from Ottawa by CBC national reporter Rosemary Barton. Rosemary, welcome.
ROSEMARY BARTON: Hi.
HOBSON: Well, what's pushing Canada to do this, first of all, not just end home delivery, but increase the cost of postage so dramatically?
BARTON: It's because Canada Post has a money problem, quite simply. It was headed toward an annual $1 billion operating loss by 2020. People aren't using mail as much. And it needed to come up with a solution to save itself. So the thing that is going to make the most savings is stopping this door-to-door delivery.
Most people will transition now to those big super mailboxes that you have at the end of a few streets, and they are also going to, as you've said, raise the price of stamps. So they - if you want to buy a single stamp in Canada now, it's going to cost you a whole dollar.
HOBSON: And how are people reacting to that idea, to actually have to go in to a communal area and get your mail instead of having it delivered to the door?
BARTON: First of all, this is actually the way lots of Canadians already get their mail. This is how two-thirds of Canadians get their mail. Only five million Canadian households are still getting their mail door-to-door. I'm one of them.
BARTON: And there is a lot of nostalgia - even on my part, as well - about what will happen when you don't have a letter carrier coming to your door and putting mail in your little mailbox, your mail slot anymore. A lot of people are feeling sort of sad about that, and wondering why Canada Post couldn't come up with some sort of other solution.
But, honestly, the other solutions that were on the table were much more drastic: cutting back on mail radically, delivering two or three times a week only. This way, they think that they're helping people. You can still get your mail every day. You just won't get it at your door.
HOBSON: Well, you say nostalgia, but there are some people who actually can't get to these centers: the elderly and the disabled, for example. What are they saying? And how are they dealing with it if there are already Canadians who don't get their mail delivered to the door?
BARTON: Well, Canada Post says, listen, most people already do this. And so people that have disabilities already have this worked out. So we are looking at more people that are going to have to find solutions. They do have to do certain things to help people. So those community mailboxes have to be in secure locations. They have to be well-lit. They have to be accessible for everybody.
And if there are particular issues - like, for instance, you're visually impaired - Canada Post can make exceptions to you. But, ultimately, they're saying: We have a serious money problem. And most of it comes from labor, right? So that's why they're trying to make this move. If they can stop delivering door-to-door, it means that they can also get rid of between six to 8,000 jobs.
HOBSON: Although they won't be laying anybody off right now, right? It's going to be sort of attrition over the - over time, people will leave.
BARTON: Yeah. That's right. They've got 15,000 workers set to retire in the next five years. Most of them - the average age at Canada Post is 48. So that's how they're going to get rid of these things. But they are extremely well-paid jobs with big, fat pensions attached. And so the union is already up in arms, because they'd like to keep the positions, obviously, and they say that people should stand up and fight to keep their mail coming to their doors.
HOBSON: Rosemary, there are probably Americans listening to this right now, saying don't you dare even think about doing that to us here in the U.S. Of course, the U.S. Postal Service is in a lot of trouble, financially. But Canada Post is framing this as innovative.
BARTON: Well, they're saying we have to adapt, right? And there is a reality. Between 2006 and 2012, Canada Post delivered one billion fewer pieces of mail. And, in fact, the head of Canada Post the other day said the biggest decline coincided almost exactly with the arrival of the iPad. So if you're not using mail, Canada Post says: Why should we provide that service to the same extent?
Where they do see an increase is in packages. People are shopping online a lot more with those same iPads and tablets. So they can boost their services in terms of getting packages to people's doors. But if we're not using mail, this is really about supply and demand, and they need to change the way they do business in order to make sense.
HOBSON: Well - and soon, they may be competing with Amazon drones for the package delivery, as well.
BARTON: Yeah. That's right. I don't think we can afford those in Canada.
HOBSON: Rosemary Barton, national reporter for the CBC, joining us from Ottawa. Thanks so much.
BARTON: Thanks, Jeremy.
HOBSON: So, would something like the Canada plan work in the U.S.? For more on that, we're joined from Washington by Washington Post congressional reporter Ed O'Keefe. Ed, do you think it would work?
ED O'KEEFE: Well, it might someday. And certainly, some of those proposals are under consideration. Things in Canada sound a lot better than they do in the United States for the postal service here, which, of course, just had another $5 billion in losses during its fiscal 2013 year because of continuing declines in first-class mail and other things, but seems to have been shored up a bit in recent years by an increase in package delivery. That can be thanks to online retailers like Amazon.com and others who are driving a lot of online sales. And, of course, those things have to be delivered.
HOBSON: Well, and explain, because the Postal Service is a little bit different than Canada Post. It's got a mandate to fulfill a public service, but it's also supposed to be a self-sustaining business, right?
O'KEEFE: That's right. Changes that were made in the 1970s basically require it to act like a business, but sort of remain under the purview of the U.S. government, because it's in the U.S. Constitution that Congress has to mandate the delivery of mail. So they continue to do that. The Postal Service would like to have, let's say, fewer than 400 - or, sorry, 535 members of its board of directors, as some people like to say - all the members of Congress - meddling in their affairs. But they continue to face congressional scrutiny, and for years, have been waiting for some changes that so far, at least, haven't been enacted.
HOBSON: One of them being ending Saturday delivery, and implementing that has been delayed by the 435 people in Congress, as you say. Why is that? Why is Congress so opposed to making changes to shore up the Postal Service?
O'KEEFE: Well, you know, there's polling that suggested a majority of Americans are OK with ending Saturday mail delivery. But Congress hasn't been able to do it, not so much because of that, but because there are all sorts of other things tied to fixing the Postal Service in the United States, the biggest one being that there are concerns about how the Postal Service basically pays for the retirement accounts, if you will, of its workers, of its current and its former workers. There's a very complicated formula that's used that basically requires the Postal Service to prefund the future retirement costs of its current workers. They're paying well in advance.
But the problem is, with all of their declining revenue and their inability really to continue delivering the mail right now, they're sort of strangled by that requirement. And so they've been pushing to get that changed, or at least reformulate it, and, at the same time, get some more flexibility, be able to raise prices beyond the rate of inflation, potentially end Saturday mail delivery, and maybe one day, like Canada, cut back even a few weekdays. And, yes, put some more of cluster boxes, as they're called, in newer communities, new residential communities that would require people to come to one central location to pick up their mail. That does happen in some communities of the United States, but much less frequently as is going on up in Canada.
HOBSON: Ed O'Keefe, congressional reporter for The Washington Post, thanks so much for joining us.
O'KEEFE: Great to be with you.
HOBSON: And if you've got thoughts on this, you can go to our website, hereandnow.org. Or if you want to send us an old-fashioned letter, you can do so. We are at HERE AND NOW, 890 Commonwealth Avenue, Boston, Massachusetts 02215. You're going to have to spend your own 46 cents on the stamp. This is HERE AND NOW. Transcript provided by NPR, Copyright NPR.