Does Canada Post require a radical rethink? asks Maclean's story

Maclean's magazine has run a story (not yet available online) exploring whether Canada Post policy needs a radical rethink. Although the story was sparked by the increase in first class postage rates this week, it also goes into some detail about the controversial decision to introduce distance-related pricing (DRP) for publications mail and pull its $15 million contribution to the Publications Assistance Program, or postal subsidy.

DRP may amount to punishing some Canadians for making their home in rural or remote places. “Are you going to charge somebody a different price to mail a letter based on where they live?” asks Deborah Morrison, publisher of the history magazine The Beaver. It’s based in Winnipeg, but 50 per cent of its readers live in Ontario and the rest are scattered around the country – a reality shared by other magazines.

Canada Post says DRP -- charging more to deliver an Ontario-based magazine to Yellowknife than to Toronto -- is a fair way to operate in a competitive environment.

“The reality is, the farther an item has to move across Canada, the more times we have to handle it,” says Steve Johnson, director of pricing strategy for Canada Post. “This is a much fairer representation of how customers consume resources.”

However, Magazines Canada, the trade association for the industry says DRP is a "revenue grab".

He also says that, for magazines that can’t hack the change, “that’s part of their business model to manage through”.

DRP comes at an inauspicious time. As of March 31, Canada Post will also withdraw its $15 million in annual funding for the Publications Assistance Program. Since before Confederation, the postal subsidy program, administered with Heritage Canada, has helped mitigate the expense of delivering nearly 200 million copies of Canadian magazines and non-daily newspapers a year. “By offsetting the cost of reaching readers,” explains Heritage Canada “Canadians can overcome geographic distances and communicate their ideas, opinions and art through print.”

Canada Post maintains that the PAP contribution is a social policy program, something that's more properly the government's responsiblity.

“This is a unique nation with respect to its postal requirements,” said Mark Jamison, CEO of Magazines Canada. “We have to view our postal delivery system as part of the cultural and social mechanism that helps keep us together. Its as important as building the railroad was.”

Magazines may be forced to shut down, reduce their frequency or pass the increase on to readers via subscription fees, he says. Others may simply drop delivery to locations where they have fewer readers.

“For Canada Post to suggest it has no cultural mandate is something Canadians need to pay attention to,” said Morrison. She argues mail delivery is an “essential service”, comparable to universal health care in a country that has equalization programs to ensure programs benefit everyone.