The dispute between Canada Post and its employees has led to frustration among Canadians, particularly due to the high fees charged by private delivery companies. While Canada Post offers letter delivery for around $2, private services like Purolator can charge over $35. Experts highlight that Canada Post’s status as a state-owned entity allows it to maintain lower prices, while private companies face higher operational costs. With declining letter volumes, the ongoing strike may further impact delivery rates across the sector.
The Ongoing Conflict and Rising Postal Costs
The ongoing dispute between Canada Post and its employees has left many Canadians frustrated, especially regarding the exorbitant costs charged by private delivery companies for sending letters. With some prices reaching up to 50 times higher than the federal service, it raises an important question: why are these private companies charging so much?
Understanding the Price Disparity
For instance, a letter typically costs around $2 when sent through Canada Post. However, as Samuel Simard shared on TikTok, the cost to send a letter with Purolator was a staggering $35.55. He expressed disbelief at the price, noting that he was lucky to receive a holiday discount.
Samuel’s experience reflects a growing sentiment among Canadians since the onset of the Canada Post employees’ strike nearly four weeks ago. Unfortunately, it appears that consumers will have to adapt to these high rates, as the resolution to this conflict seems far off.
Recently, Canada Post dismissed the latest proposals from the Canadian Union of Postal Workers (CUPW), which included demands for salary increases and job security. As a result, the cost of sending a standard letter through Canada Post varies from $1.15 to $5.89, depending on factors like size and weight.
In stark contrast, private delivery services charge exorbitant fees. For a standard letter weighing less than a pound from Montreal to Quebec City, consumers could expect to pay approximately $23 with UPS, between $25 and $30 with Delivro, and around $45 with Purolator. FedEx, on the other hand, demands over $60 for the same service.
Philippe Goulet-Coulombe, an economics professor at UQAM, sheds light on this significant price gap. He notes that Canada Post is a state-owned corporation, which is obligated to offer universal access to its services, both geographically and financially. This unique position allows Canada Post to maintain lower costs, as it possesses a monopoly over letter delivery in Canada.
As Goulet-Coulombe explains, private companies face higher operational costs, especially when delivering to remote areas for just a single letter. “The only way to offer such low prices is to be the only player in the mail market,” he states.
In recent years, the volume of letters delivered has seen a marked decline. Canada Post delivered 5.5 billion letters in 2006, but that number has plummeted to 2.2 billion in 2023. Despite this drop in demand, the Crown corporation continues to serve an increasing number of addresses each year.
In 2006, Canadian households received an average of seven letters per week, while last year, that number dwindled to just two. Determining what constitutes a “fair price” for letter delivery is complex, according to Goulet-Coulombe. He believes the rates offered by Canada Post align more closely with consumer expectations.
He adds, “When we use FedEx, we benefit from premium service. The company is not focused on competing with Canada Post; instead, it targets customers willing to pay for faster delivery and superior tracking.” However, should the strike continue for an extended period, Goulet-Coulombe suggests that other companies might consider lowering their prices for mail delivery services.