Canada Gazette

Notice is hereby given, pursuant to the Letter Mail Regulations made under the Canada Post Corporation Act, that the domestic basic letter rate will increase by $0.01 to $0.52 (1.96 percent) on January 15, 2007.

This will be the sixth increase authorized by the price-cap formula that is established in the Letter Mail Regulations. The formula applies only to the domestic basic letter rate defined as the standard domestic letter rate generally available to the public for letters weighing up to 30 g.

The one-cent increase is the result determined by the following price-cap formula, rounded down to the nearest whole cent:

B is the reduced consumer price index factor, that is 1.8899 %. The reduced consumer price index factor is 66.67% of the percentage increase in the Consumer Price Index from the month of May prior to the last domestic basic letter rate increase (May 2005) to May of the current year. The factor is therefore 66.67% times 2.83% equals 1.8899%; and

C is any fractional rate increase in the calculation of the previous increase to the domestic basic letter rate that has not been applied as a result of rounding down to the nearest whole cent, that is 0.2596 cent.

Rounding down to the nearest whole cent yields a one-cent (1.96 percent) increase for January 15, 2007.

The last increase of the domestic basic letter rate (2.0 percent) occurred on January 16, 2006.

Any questions regarding this notice should be directed to Mrs. Manon Tardif, General Manager, Regulatory Affairs, Canada Post Corporation, 2701 Riverside Drive, Suite N0940, Ottawa, Ontario K1A 0B1, (613) 734-7364 (telephone), (613) 734-7207 (fax).

Regulations Amending the Letter Mail Regulations

These amendments to the Canada Post Corporation (Canada Post) regulations, effective January 15, 2007, will increase the rates of postage for domestic lettermail items other than the basic domestic letter rate (Lettermail items up to 30 g).

— a $0.04 increase to $0.93 (4.5%) on the Standard domestic Letttermail product of 30 g up to 50 g;

— a $0.05 increase to $1.10 (4.8%) on the Other domestic Letttermail product up to 100 g;

— a $0.08 increase to $1.86 (4.5%) on the Other domestic Letttermail product from 100 g to 200 g; and

— a $0.06 increase to $2.55 (2.4%) on the Other domestic Letttermail product from 200 g to 500 g.

The Letter Mail Regulations identify the location where the postal code must appear on items of standard mail bearing a postage meter impression or a postage-paid-in-cash impression. The current Regulations require the postal code to be located within a 26 mm band on the front of a piece of mail.

The proposed change would allow the postal code to appear in a larger area on an envelope, except for a 19 mm band along the bottom, a 40 mm band at the top and a 15 mm band on either side.

The location of the postal code on an envelope is prescribed in order to enable the pieces of mail to be processed in an efficient and timely manner by the Corporation's mail processing equipment. Recent advances in mail processing technology can now accommodate a larger field in which the postal code can appear.

This is a positive change for the Corporation's customers since the larger allowable space will result in more creative flexibility when designing Lettermail and Addressed Admail items.

The Canada Post Corporation Act requires the Corporation to establish rates of postage that are fair, reasonable and sufficient to defray the costs incurred in the conduct of its operations. With regard to the proposed rate action, rate increases of lesser amounts were considered and rejected on the grounds that such rates would not cover the increased costs incurred by the Corporation in providing postal service. Consideration was also given to rates that are higher than those being proposed here but were also rejected on the basis that the Corporation's Lettermail products exist in a competitive market where viable electronic alternatives are abundant. Because of this competition, the Corporation must be careful to establish rates that can be supported in the marketplace and do not hasten erosion.

Canada Post's exclusive privilege is designed to enable it to provide universal service. However, its economic value has declined significantly in recent years. Driven primarily by electronic substitution such as email, the Internet and electronic bill presentment and payment, traditional mail volumes per capita are declining in Canada and throughout the world at varying rates. Furthermore, the decline in mail volumes is hastened by a growing trend toward the consolidation of invoices by large companies whereby two or more operating divisions combine separate billings into one single invoice.

As for the proposed change related to the postal code location, no other alternatives were considered as this move enables the Corporation's customers to have greater flexibility in the preparation of their mailings.

Canada Post's mandate is to provide universal basic customary postal service. Letters are to be delivered within a two, three or four day service standard for local, regional or national delivery at uniform and affordable rates across the country. The proposed rate increases are designed to ensure that the Corporation is able to continue to provide this service while at the same time meet the objective of the Canada Post Corporation Act to be financially self-sustaining and of the Financial Administration Act to be profitable and pay dividends to the shareholder. In doing so, the Corporation is ensuring that the responsibility of sustaining postal services in Canada continues to be borne by the users of the system and not taxpayers.

Lettermail rates in Canada compare very favourably with those in other industrialized countries, despite the country's vast geography, low population density, harsh climate and other factors that impact significantly on the costs associated with providing Lettermail service.

Despite the plethora of alternatives, Lettermail continues to offer great value to its users. Consider the following:

• Lettermail is a reliable and trusted choice for sending personal or financial information.

• As measured by an independent professional service firm, Canada Post regularly achieves a score of 96% for on-time service performance. In 2005 this score was 96%.

• Lettermail can be delivered to any one of the more than 14 million addresses in Canada.

• Lettermail is secure: Canada Post continues to ensure that the safety, security and confidentiality of the mail is protected at all times.

• Lettermail is convenient: There are thousands of mailboxes for dropping off Lettermail. There are some 23,000 retail points of access including 7,000 locations across the country where customers can purchase all of their postal products.

• Lettermail has an immediate impact. In today's world of information overload and electronic clutter, customers need a superior message differentiator like Lettermail which gets noticed, gets in the door and gets opened.

• Lettermail is personalized: It speaks to customers as individuals and the more personalized the message and the more tailored to meet the interests and needs of the recipient, the more relevant and powerful the impact.

The increased revenue associated with this rate action will help defray the increased costs associated with its delivery. For instance, the number of points of delivery that the Corporation must service annually is increasing by approximately 240,000 each year adding some $20 million to $30 million to the Corporation's annual cost base. At the same time, the volume of mail being delivered to each point of delivery is decreasing. Other major areas where costs are increasing significantly are with employee pension and health related benefits.

The financial objectives of the Corporation are not being met solely through rate actions. Substantial increases in productivity in all areas and components of the business are necessary. To that end, Canada Post is embarking on a series of initiatives with several key objectives. The Corporation is seeking to:

• Create an operating environment that engages employees and encourages best performance;

• Ensure that the physical assets — including the processing facilities and retail network — are appropriate in meeting service commitments and customer requirements while minimizing costs;

• Provide management and employees with the information tools necessary to monitor resource usage and performance;

• Set an appropriate pace of operations through standardization of operating procedures;

• Improve the quality of delivery by enhancing the information systems recently introduced to highlight areas for attention.

It is anticipated that the proposed amendments to the Canada Post Corporation Lettermail Regulations will not have a serious impact on postal users or market share as the average rate increase is slightly above the rate of inflation as measured by the Consumer Price Index. These products continue to provide good value for the Corporation's customers.

There are no additional processing costs for the Corporation while customers benefit from the increased space.

As required by the Canada Post Corporation Act, these amendments are being published in the Canada Gazette, Part I, thereby initiating a formal 60-day period in which interested persons can make representations to the Minister of Transport. All such representations should cite the Canada Gazette, Part I, and the date of publication of this notice.

These Regulations are enforced by Canada Post under the Canada Post Corporation Act. No increase in the cost of enforcement is expected as a result of the proposed changes.

Mrs. Manon Tardif, General Manager, Regulatory Affairs, Canada Post Corporation, 2701 Riverside Drive, Suite N0940, Ottawa, Ontario K1A 0B1, (613) 734-8440 (telephone), manon.tardif@canadapost.ca (email).

Notice is hereby given, pursuant to subsection 20(1) of the Canada Post Corporation Act, that the Canada Post Corporation, pursuant to subsection 19(1) (see footnote a) of that Act, proposes to make the annexed Regulations Amending the Letter Mail Regulations.

Interested persons may make representations with respect to the proposed Regulations within 60 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to the Minister of Transport, House of Commons, Ottawa, Ontario K1A 0A6.

1. Paragraph 11(4)(b) of the Letter Mail Regulations (see footnote 1) is replaced by the following:

2. The portion of paragraph 1(1)(b) of the schedule to the Regulations in column II is replaced by the following:

3. The portion of subitems 2(1) to (3) of the schedule to the Regulations in column II are replaced by the following:

Regulations Amending the International Letter-post Items Regulations

These proposed amendments to the Canada Post Corporation (Canada Post) regulations, effective January 15, 2007, will increase the rates of postage for letter-post items destined to the United States and to other international destinations.

— a $0.04 increase to $0.93 (4.5%) for letters, cards and postcards up to 30 g destined to the United States. Other prices for this destination will also be adjusted, with an overall weighted average increase of 4.5%; and

— a $0.06 increase to $1.55 (4.0%) for letters, cards, and postcards up to 30 g for other foreign destinations. Other prices for these destinations will also be adjusted, with an overall weighted average increase of 4.6%.

Canada Post is facing inflationary pressure from a number of sources. The proposed price adjustments take into consideration increased operating costs, which are expected to be in excess of the Consumer Price Index inflation forecast.

One such source of cost is terminal dues, which is a pricing mechanism that allows the postal administration receiving the mail for delivery to collect for the cost of delivery from the postal administration sending the mail (in this case, Canada Post). It is expected that terminal dues to the United States will increase by a minimum of 3% in 2006 while dues to other international destinations will increase by 5% to 8% depending on the final country of destination.

Additionally, many transportation companies have implemented significant fuel price surcharges based upon price fluctuations. As Canada Post cannot implement a fuel surcharge for regulated letter-post products, it remains exposed to fluctuations in the price of fuel and must recover expected increased costs.

Even with the proposed price increases, Canada Post's U.S. and International basic-letter post rates will continue to be one of the lowest rates among major industrialized nations comparative rates for mail sent to Canada.

The Canada Post Corporation Act requires the Corporation to establish rates of postage that are fair, reasonable and sufficient to defray the costs incurred in the conduct of its operations. With regard to the proposed rate action, rate increases of lesser amounts were considered and rejected on the grounds that such rates would not cover the increased costs incurred by the Corporation in providing postal service. Consideration was also given to rates that are higher than those being proposed here but were also rejected on the basis that the Corporation's Letter-post products exists in a competitive market where viable electronic alternatives are abundant. Because of this competition, the Corporation must be careful to establish rates that can be supported in the marketplace and do not hasten erosion.

It is anticipated that the amendments will not have a serious impact on postal users or market share. The new rates will directly contribute to Canada Post's financial integrity and, consequently, its ability to make future investments to maintain an accessible, affordable and efficient service. Generally, consumers send only a very small number of U.S. and international mail items each year compared to domestic lettermail.

Depending on the products they use, the majority of customers will experience an overall weighted average price increase of 4.5% for U.S.A. Letter-post items and 4.2% for international Letter-post items.

These Regulations are enforced by Canada Post under the Canada Post Corporation Act. No increase in the cost of enforcement is expected as a result of the proposed changes.

Notice is hereby given, pursuant to subsection 20(1) of the Canada Post Corporation Act, that the Canada Post Corporation, pursuant to subsection 19(1) (see footnote b) of that Act, proposes to make the annexed Regulations Amending the International Letter-post Items Regulations.

1. (1) The portion of subparagraph 1(a)(i) of Schedule IV to the International Letter-post Items Regulations (see footnote 2) in column II is replaced by the following:

(2) The portion of subparagraph 1(b)(i) of Schedule IV to the Regulations in column II is replaced by the following:

Regulations Amending the Special Services and Fees Regulations

These proposed amendments to Canada Post Corporation (Canada Post) regulations, effective January 15, 2007, will increase the rate charged for Domestic Registration, an option that provides senders of Lettermail with proof of mailing and the ability to confirm delivery for items delivered in Canada.

Canada Post is facing inflationary cost pressures from a number of sources, and the proposed price adjustment takes into consideration increased operating costs.

It is anticipated that the amendment will not have a serious impact on postal users or market share. The new rate will directly contribute to Canada Post's financial integrity and, consequently, its ability to make future investments to maintain an accessible, affordable and efficient service.

These Regulations are enforced by Canada Post under the Canada Post Corporation Act. No increase in the cost of enforcement is expected as a result of the proposed changes.

Notice is hereby given, pursuant to subsection 20(1) of the Canada Post Corporation Act, that the Canada Post Corporation, pursuant to subsection 19(1) (see footnote c) of that Act, proposes to make the annexed Regulations Amending the Special Services and Fees Regulations.

1. The portion of paragraph 1(1)(a) of Schedule VII to the Special Services and Fees Regulations (see footnote 3) in column II is replaced by the following:

Regulations Amending Certain Regulations Made under the Canada Post Corporation Act (Miscellaneous Program)

These amendments to the Canada Post Corporation Act Regulations are of a technical nature and are to come into force on the day on which they are registered. They do not reflect any substantive changes to the regulations made under the Canada Post Corporation Act.

The following provides information relating to the regulatory proposals for amendments to the Miscellaneous Program:

1. In order to update references to the 2004 Bucharest Convention and the articles of the Final Protocol, the following amendments are made to the Non-mailable Matter Regulations:

(1) Item 1(3) of the Schedule to the Non-mailable Matter Regulations to be replaced with:

Letter-post items or parcels that contain dangerous or perishable items prohibited by article 15 of the Universal Postal Convention (Bucharest, 2004) and by articles VIII and IX of the Final Protocol of that Convention.

(2) Item 2(2) of the Schedule to the Non-mailable Matter Regulations to be replaced with:

Letter-post items or parcels that contain live animals prohibited by article 15 of the Universal Postal Convention (Bucharest, 2004) and by articles VIII and IX of the Final Protocol of that Convention.

(3) Item 3(4) of the Schedule to the Non-mailable Matter Regulations to be replaced with:

Letter-post items and parcels, other than those referred to in subitems 1(3) and 2(2), that contain matter prohibited by article 15 of the Universal Postal Convention (Bucharest, 2004) and articles VIII and IX of the Final Protocol of that Convention.

2. In response to observations made by the Department of Justice and the Standing Joint Committee for the Scrutiny of Regulations, and in order to address concerns regarding removal of references to "rate as established by the corporation", these amendments repeal certain references in the Special Services and Fees Regulations:

(1) Item 1(1)(b) of Schedule VII to the Special Services and Fees Regulations is repealed.

(2) Item 1(2) of Schedule VII to the Special Services and Fees Regulations is repealed.

(3) Item 2(1)(b) of Schedule VII to the Special Services and Fees Regulations is repealed.

(4) Item 2(2) of Schedule VII to the Special Services and Fees Regulations is repealed.

3. In a previous regulatory amendment, reference to "United States or any of its territories and possessions" was removed from section 25 of the Special Services and Fees Regulations. In order to be consistent, subsection 16(1) of the Regulations is amended accordingly and replaced by the following:

Registered mailable matter posted in Canada for delivery in Canada may be accepted for insurance against loss, rifling or damage.

As requested by the Canada Post Corporation Act, these amendments are published for comments in the Canada Gazette, Part I, thereby initiating a formal 60-day period in which interested persons can make representations to the Minister of Transport. All such representations should cite the Canada Gazette, Part I, and the date of publication of this notice.

These Regulations are enforced by Canada Post under the Canada Post Corporation Act. No increase in the cost of enforcement is expected as a result of the proposed changes.

Ms. Manon Tardif, General Manager, Regulatory Affairs, Canada Post Corporation, 2701 Riverside Drive, Suite N0940, Ottawa, Ontario K1A 0B1, (613) 734-8483 (telephone), (613) 734-7207 (fax).

Notice is hereby given, pursuant to subsection 20(1) of the Canada Post Corporation Act, that the Canada Post Corporation, pursuant to subsection 19(1) (see footnote d) of that Act, proposes to make the annexed Regulations Amending Certain Regulations Made under the Canada Post Corporation Act (Miscellaneous Program).

REGULATIONS AMENDING CERTAIN REGULATIONS
MADE UNDER THE CANADA POST CORPORATION
ACT (MISCELLANEOUS PROGRAM)

1. Subsection 16(1) of the Special Services and Fees Regulations (see footnote 4) is replaced by the following:

16. (1) Registered mailable matter posted in Canada for delivery in Canada may be accepted for insurance against loss, rifling or damage.

4. Subitem 1(3) of the schedule to the Non-mailable Matter Regulations (see footnote 5) is replaced by the following:

5. Subitem 2(2) of the schedule to the Regulations is replaced by the following:

6. Subitem 3(4) of the schedule to the Regulations is replaced by the following:

7. These Regulations come into force on the day on which they are registered.

EXTRA Vol. 140, No. 12

Regulations Amending the Letter Mail Regulations

Regulations Amending the International Letter-post Items Regulations

Regulations Amending the Special Services and Fees Regulations

Regulations Amending Certain Regulations Made under the Canada Post Corporation Act (Miscellaneous Program)