Canada Post maintains its 3% magazine mailing increase is reasonable

Canada Post says that its 3% increase for mailing magazines starting in January 2010 is the lowest in many years and is a reflection of the service's greater costs.

Increases have been kept "to a reasonable level, well below our increasing costs to serve", it said, in a reply to a letter from Magazines Canada released last week which criticized the increase as "completely unjustified". (The CPC letter was made available by Magazines Canada, which said it wanted to achieve balance by releasing the reply as soon as it was received. The full text of the letter is at the magazine association's website.)

"Price increases are necessary to help offset the overall impact of rising network and operational costs. Incremental revenues contribute towards maintaining the profitability of Canada Post, which ensures a national postal network,"

Canada Post said that, contrary to contentions by the association,its margins for Publications Mail have not improved and are lower than other direct marketing services. It also acknowledged that fuel price increases have moderated but are on the rise again and economists are predicting fuel prices will remain high throughout the rest of the year.

In its original letter, Magazines Canada had asked for no increase at all, based on declining fuel costs, CPC's saving of $15 million by no longer contributing to the Publications Assistance Program, and the fact that the corporation had received clearance to exceed regulated rates on letter mail. It cited a recent analysis of Canada Post rates and said the 3% increase is well beyond inflation and "totally out of step" with other products and services to the magazine sector.