Canada Post has Home Builders Furious

Canada Post has Home builders steamed at the new $200 levy to deliver mail to new housing developments.

The $200 postal box activation fee went into effect on Jan. 1 and is assessed to builders nationwide for each address in new neighbourhoods.

“I have no idea how they intend to collect this,” said Dennis Peck, government relations manager in the Edmonton region for the Canadian Home Builders’ Association. “The (Canada Post Corporation) Act says they have to deliver mail. What if we don’t pay? Are they going to stop delivering the mail?

“The whole thing seems rather ill-conceived, and I am trying to be as generous as possible.”

Jon Hamilton, a spokesman for Canada Post, says th fee  the is similar to other assessments builders pay to be connected to power grids or municipal water and sewer systems.

It is being assessed to cover the cost of setting up banks of community mailboxes in new residential communities, Hamilton said.

“What we are saying is that we have been paying the cost for many years and that we are at a point where we can’t bear the whole thing,” Hamilton said. “Addresses are being added every year as new developments are started, and we are going to have to recover some of the cost.”

150,000 or so addresses are added to delivery routes each year, meaning the fee would net approximately $30 million annually for the cash strapped Canada Post.

Homebuilders argue that the fee contradicts a commitment Canada Post made to developers in 1996 when it introduced community mailboxes as a cost-cutting measure and agreed that it would be responsible for their installation and maintenance.

“We see this as a way of grabbing money,” Peck said. “Will it make a difference to Canada Post’s bottom line, yes? But not that much.”

Canada Post has reported a loss of $88 million over the first three quarters of 2012, and $327 million for the 2011 financial year.

The fee is being charged to builders, but will almost certainly be passed on to consumers, Peck said, in effect subsidizing reduced service to their community.

“At the end of the day, any cost increase filters down to the person who buys the house,” Peck said. “To say anything else is a bit naive.”