Canadian Magazine Industry News
29 June 2009,     OTTAWA
Canada Post plans 3% publications mail rate increase for 2010
Mailing rates for magazines will rise by close to 3% in 2010, according to a report from Magazines Canada. Canada Post apparently informed MC of the intended hike during a meeting on May 20 and the association has since responded with a strongly worded letter sent to Rob Merrifield, Minister of State responsible for Canada Post Corporation and James Moore, Minister of Canadian Heritage and Official Languages, as well as Laurene Cihosky, CPC's vice president of direct marketing, advertising and publishing.

Canada Post headquarters in Ottawa.
"We appreciate your comments that CPC is sensitive to the economic downturn and understands the need to attenuate rate increases while the economy recovers," writes Mark Jamison, CEO of Magazines Canada. "However, a weighted rate increase of close to 3% fails to demonstrate any such understanding and is on par with rate increases over the past few years. A 3% increase is well beyond inflation and totally out of step with pricing of other products and services to the magazine sector in the current economy."

Highlighting the many challenges magazines are facing (weak economy, uncertainty about changes to federal funding), Magazines Canada is urging CPC to cancel the hike.
We also want to highlight changes which benefit Canada Post’s financial situation and should allow for a zero percent rate increase in 2010. First, Canada Post no longer has an obligation to finically support the Publications Assistance Program as of April 1, 2009. This represents a $15 million savings annually to Canada Post. Second, Canada Post received special approval to exceed regulated rates for letter mail services in 2009 which will result in higher revenues to the corporation this year. This is an action Magazines Canada formally supported by responding to the Canada Gazette notice on this issue. In previous meetings, senior corporation executives have indicated to us that this regulated limit creates major challenges in generating annual profits and impacts on other, unregulated prices. Third, in 2009 we were advised that a rate increase of approximately 3% would be required because of the very high cost of fuel. Fuel costs have attenuated significantly since 2009 pricing was developed and we would expect this decline to be reflected in 2010 rate action.
CPC increased rates by 3.1% in 2009, the same year distance related pricing was introducted by the crown corporation. Since 2002, postage costs for magazines have increased by 38%, according to recent report by postal expert Michael J. Fox, senior vice president of circulation and development for Rogers Publishing Inc.

Masthead has contacted Canada Post seeking comment and we hope to conduct an interview with a spokesperson there sometime this week.
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