Canadians could soon face another increase in postage rates after the federal government removed a long-standing requirement that cabinet approve Canada Post stamp price hikes.The change gives Canada Post greater authority to raise postage rates without waiting for federal approval, a move the Crown corporation has argued is necessary to address mounting financial losses.Under amendments to the Canada Post Corporation Act, the requirement for regulatory approval of postage rate changes has been eliminated. Parliament approved the change earlier this year through a budget implementation bill.The decision comes after a series of sharp increases in mailing costs. The price of sending a domestic letter has climbed 35% over the past two years, rising from 92 cents to $1.24.Canada Post signalled in its May 29 first-quarter financial report that additional increases are likely.“Our letter mail rates are underpriced in comparison with many other foreign postal administrations and have fallen behind the rate of inflation,” management wrote in the report.The corporation argued that the previous approval process created lengthy delays and prevented postage rates from keeping pace with rising costs.Canada Post is facing significant financial pressure. The Crown corporation reported a record loss of $1.57 billion last year and an additional $205 million loss during the first quarter of this year. The postal service has not posted an annual profit since 2017.Public Works Minister Joel Lightbound has defended the decision to streamline future rate increases, telling MPs that Canada's stamp prices remain low compared to many other countries.“It better reflects the international reality,” Lightbound told the House of Commons government operations committee last October. “All the other countries have increased the price of stamps.”Lightbound said the government wanted to create a faster process that would allow Canada Post to respond more quickly to financial challenges.“We are moving forward with an expedited process that will allow Canada Post to increase the stamp rate,” he said..The minister argued that the previous approval system made it difficult for Canada Post to adjust prices in line with the true cost of delivering mail.“In international comparisons Canada is way down compared to other countries in terms of the price of stamps,” Lightbound testified. “It’s important to grant that flexibility to Canada Post to move quickly.”Canada Post has not yet disclosed the size or timing of its next rate increase.The most recent hike took effect on Jan. 13, 2025, when the cost of mailing a domestic letter increased from 99 cents to $1.24.Even after that increase, Canadian stamp prices remain below those in several countries. A domestic stamp costs the equivalent of $1.10 in the United States, $1.18 in China, $1.56 in Australia and $2.16 in Saudi Arabia, according to figures cited by the federal government.Lightbound described faster rate increases as one of several immediate measures needed to stabilize Canada Post's finances.“These are immediate steps that need to be taken to stabilize the financial situation at Canada Post,” he said. “I am proud to be part of a government that is moving forward.”
