Cost to mail a letter soars 35%

The cost of mailing a first-class letter withinCanada went up to 85 cents today a 35 per cent jump from the 63 cents it cost yesterday.

But the 85-cent rate is only available if stamps are purchased in a pack. If you want to buy just onestamp, it will cost $1.

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Permanent stamps, which are marked with a "p" instead of a specific price, can still be used even though they were bought at the lowerprice.

Canada Post gave notice of the big price hike in December as part of a plan to reduce ongoing and deepening losses.

At the same time, it also revealed plans to phase out door-to-door mail delivery over a five-year period to the millions of urbanCanadian homes that still getit.

By switching to a system where mail receivers will go to community mailboxes (CMBs) to retrieve their letters, the mail service hopes to save hundreds of millions of dollars per year.

"With the increasing use of digital communication and the historic decline of letter mail volumes, Canada Post has begun to post significant financial losses," the corporation said in a December news release.

"If left unchecked, continued losses would soon jeopardize its financial self-sufficiency and become a significant burden on taxpayers and customers."

A Conference Board of Canada study last year predicted that if nothing were done to rein in costs, Canada Postwould be posting losses of $1 billion annually by 2020.

Small business not happy

But the Crown corporation's plan to eliminate its red ink by dramatically hiking stamp costs has angered many users, including the Canadian Federation of Independent Business (CFIB), which represents more than 100,000small- and medium-sized businesses.

A survey the CFIB carried out last Octoberfound that almost 40 per cent of its members send at least 50 pieces of letter mail a month.

Two weeks ago, Canada Post announced steps to temporarily reduce the costs of higher postal rates on businesses and charities.

From nowuntil the end of the year, it will give a five per cent discount on stamps toVentureOne cardholders who purchase a minimum of quantity of stamps. Meter customers will also get a five per cent discount.

"While we acknowledge that Canada Post has taken measures to reduce the pressure on business owners who rely onlettermail, these changes don't outweigh the added costs," saidCFIBpresident Dan Kelly.

Canada Post says the typical Canadian household buys fewer than two stamps amonth, meaning that today's price hike willcost "less than $5 per year."