The domestic basic letter rate increased by one cent to 47 cents on Jan. 1, 2000.

This is the first time that first class postage has gone up under new government authorized price capping regulations. Under these regulations, Canada Post may increase domestic letter rates annually based on a formula. No other government approval is required.

The following is the formula as published in the Canada Gazette Part I on July 1, 2000.

– (AxB) + C, where:
– (A) is the domestic basic letter rate in effect;
– (B) is the reduced consumer price index factor, that is 2.637 percent (for this year). The reduced consumer price index factor is 66.67 percent of the percentage increase of the Consumer Price Index from the month of May prior to the last domestic basic letter rate increase to May of the current year. (For this year) the factor is therefore 66.67 percent times 3.956 percent equals 2.637 percent, or 1.2 cents; and
– (C) is any fractional rate increase in the calculation of the previous increase to the domestic basic letter rate that has not been applied as a result of rounding down to the nearest whole cent (in this case 0.236 cent.

In other words, Canada Post may automatically increase domestic letter rates by an amount equal to two thirds of the Consumer Price Index. Any amount lost to downward rounding is added to the following year’s formula. None of these increases will be reviewed by parliament in future. All other rates, of course, are already set internally without recourse to parliament.

Rates and rate increases cannot be appealed anywhere. Parliament approved the formula.

The Canada Post Ombudsman is specifically prohibited from dealing with complaints relating to rates and increases.