June 30, 2004
(Letter sent to Nickel Belt News)
Dear Editor:
Your May 17th editorial, "Is the post office a business or a government service?" was brought to my attention and I would like an opportunity to respond.
Canada Post is a commercial Crown Corporation with a mandate to provide universal postal service at a universal price. A monopoly on the delivery of Lettermail in Canada is the only way the universal service could be maintained.
With respect to the sale of greeting cards, our research shows that 45 per cent of greeting cards are mailed to recipients. Further research in a number of communities has revealed that customers appreciate the one-stop shopping convenience of being able to buy, write and mail a greeting card in one convenient location. The small size of many of our outlets will allow sufficient space for only a limited range of all types of cards. In order not to undercut other businesses, only premium cards will be offered.
Competitive services contribute significantly to Canada Post's revenues and make our universal postal services affordable. If Canada Post could not provide competitive services, stamp prices would have to rise significantly, necessitating the government to spend hundreds of millions of tax dollars a year to support the corporation, or abandon the universal postal system.
Canada Post has been operating without taxpayer support since 1988 and pays income tax on the same basis as other Canadian companies. Revenue Canada verifies that the amount of income tax Canada Post pays is fully in line with its status as a "Chapter Three" Crown corporation.
The corporation makes an annual dividend payment equivalent to 25 per cent of the prior year's net income to the federal government. Canada Post has been profitable for nine consecutive years and has generated $779 million in net income and paid $448 million in dividends and other payments to our shareholder, the Government of Canada.
With approximately 70,000 employees, Canada Post Corporation is the seventh largest employer in the country. The corporation spends nearly $3 billion annually on goods and services, creating 30,000 additional jobs in communities across the country.
To answer your question, Canada Post is a business.
Sincerely,
John Caines
Manager, National Media Relations
Ottawa (613) 734-7675
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