Proposed increases to Canada Post’s Publication Mail rates could raise the cost of posting a typical community newspaper by as much as 25 per cent over the next three years.
The current base rate for Local Rural service is 18 cents up to 100 grams. That could increase to 22 cents by 2004. The Regional rate would climb to 33 cents from the current 27. National rates would go to 54 cents from the current 45.
The rate hikes are part of a three-year plan to improve the margins earned by Publications Mail, according to officials at Canada Post. Apparently, Publications Mail is the least profitable of Canada Post’s services. CCNA has been told that the proposed increases constitute a one-time adjustment and that future increases will be more moderate.
At time of writing (Dec. 5, 2001) the proposed rates had yet to be approved by the Canada Post Corporation board. This is expected before the year-end although industry opposition to the increases is attempting to delay that decision.
Publishers of consumer and trade magazines are perhaps the most concerned about the rate hike plan. The proposed rate grid creates new weight breaks with higher rates and greatly reduces volume discounts for all but the very largest users. Depending on the weight and level of service, rates for some magazines could increase by as much as 50 per cent over three years, even without calculating the effect of reductions in volume discounts.
For community newspapers the increases generate different concerns. During the last round of increases rates went up an average of five per cent each year over three years. Mailers using Local Rural or Regional service, mostly community newspapers, saw base rates increase by as much as 64 per cent and 42 per cent respectively over the three-year period.
“The impact on rural community papers is massive,” according to CCNA executive director Serge Lavoie. “If these proposed rates are allowed to stand, the cost of mailing a 150 gram newspaper at the Local Rural rate will have gone up by 121 per cent since 1999. The Regional rate will have gone up 76 per cent over the same year. Who can afford those kinds of increases?”
The real concern, according to Lavoie, is the impact these rate increases will have on the Publications Assistance Program (PAP) sponsored by the Department of Canadian Heritage. Officials administering PAP have told the magazine and community newspaper industry that the funding for the program is capped at $46.4 million annually. The proposed increases will send the program into a deficit position, leading to even greater increases. Exactly how great the increases in the PAP rate will be is unknown since Heritage officials had not had sufficient time to run the Publications Mail rates through an economic model. But it’s almost certain that PAP users will face increases greater than the Publications Mail rise.
CCNA has consulted frequently with magazine associations and with officials at the Department of Heritage. It has also written to Andr├® Ouellet, president of Canada Post, as well as to the Hon. Alfonso Gagliano, the minister responsible for Canada Post, and the Hon. Sheila Copps, the minister of Canadian Heritage. The letters urge immediate action to stop the increases and to review the situation in light of the current economic climate. Copies of the letters can be found on the association web site at www.communitynews.ca/postal/letters.pdf.
If approved, rates will increase April 1, 2002 and again in January of 2003 and January of 2004. According to Canada Post, the full rate card will be made available at least 60 days before the April 1, 2002 implementation date.
