Canada Post softens Publications Mail increases

While confirmed rates are some weeks away, Canada Post has modified its proposals for rate increases to Publications Mail.

Proposed rates shared with CCNA in early January show that increases over three years will range from 13 to 18 percent depending on weight and class of service. Previous proposals had rates increasing by 20-29 percent over the same three year period.

Unknown at this time is the impact these increases will have on the Publications Assistance Program (PAP) administered by the federal Department of Canadian Heritage. The PAP subsidy is fixed at $46.4 million per year. If postal increases go too high, participants in the program, which includes magazines and community newspapers, may face increases even higher than those put forward by Canada Post.

Government officials are currently studying the impact of the newly proposed rates. At present, Canada Post Corporation and the government have yet to sign an agreement for the PAP program beyond March 31 of this year. It is thought that the government may opt for a one year agreement rather than the tradition multi-year contracts signed in the past. The PAP program is currently under review for changes. One option under consideration is to remove the requirement that the subsidy is tied to the use of Canada Post as the exclusive distribution service.

According to CCNA executive director Serge Lavoie, the new proposals are an improvement but they donÔÇÖt meet the associationÔÇÖs basic position.

ÔÇ£Anything beyond the basic Consumer Price Index is unacceptable to community newspapers,ÔÇØ according to Lavoie. ÔÇ£Newspapers are coping with rising prices and a soft economic climate. ThereÔÇÖs simply no justification for increases beyond the basic CPI. Companies everywhere are adjusting costs to maintain their margins. Canada Post should be doing the same. They should be part of the solution, not part of the problem.ÔÇØ

Canada Post officials have argued that the increases are necessary in order to bring profit margins for Publications Mail in line with other services they offer. In arguing against these increases, representatives from the magazine and newspaper sectors have stated that Canada Post should be improving its margins through cost cutting and internal efficiencies rather than rate increases.

A final announcement on the rates is expected near the end of January, giving clients the required 60 day notice period before an April 1, 2002 implementation. Canada Post intends to publish its rates for a three year period, giving advance notice of rate increases scheduled for Jan. 1, 2003 and Jan. 1, 2004.