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Why the Canada Post Wants to Eliminate Up to 8,000 Mailmen

Canada's primary mail delivery service plans to end its door-to-door deliveries in cities, but do not expect the U.S. Postal Service to adopt those changes anytime soon.
The Canada Post's new system will embrace "community mailboxes" for Canadians living in urban areas and raise the prices on stamps, resulting in the elimination of 6,000 to 8,000 jobs, according to the company. Mounting financial losses, which are projected to hit $1 billion by 2020 according to a recent study, spurred the move, the Canada Post wrote in a statement. The change will not impact service in rural areas.
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"Canada Post has a mandate to fund its operations with revenues from the sale of its products and services, rather than become a burden on taxpayers," it added. "With the increasing use of digital communication and the historic decline of letter-mail volumes, the Canada Post has begun to post significant financial losses. If left unchecked, continued losses would soon jeopardize its financial self-sufficiency and become a significant burden on taxpayers and customers."
Centralized mail delivery is not a foreign concept in the United States. The USPS has worked to shift commercial locations such as business parks and malls to centralized delivery, as well as any new residential areas.
"We’ve been working on this effort for a number of years," said Sue Brennan, a spokesperson for the USPS. "All new residential construction is centralized or curbline delivery."
However, a system like the one Canada is moving toward, in which many customers are moved to centralized community mailboxes, is unlikely in the U.S. since legislation proposing such a move has stalled.
Growing deficits and concerns about the reach of the Internet have put the USPS at the center of a debate about the future of mail. Critics of the agency have pointed to a broader implementation of practices, such as those adopted by the Canada Post, as a way to save money. A $1 billion loss is not a model for any organization, particularly a business like the Canada Post, which was privatized in 1981.  
But it pales in comparison to the USPS' $15.9 billion loss in 2012. The result was shocking enough to spur budget watchdogs to call for reform, which produced the Postal Reform Act of 2013 and included many of the same changes that the Canada Post will be implementing. The bill would allow for the USPS to end Saturday delivery — a cutback the organization has asked for.
That bill was significantly scaled back as it moved between the Senate and the House of Representatives. The situation at the USPS has also improved, with the carrier posting an improved $5 billion loss in the fiscal year through the end of September.
Those shortfalls are the subject of some debate. The USPS is required to "pre-fund" its healthcare commitments to its retirees, a requirement that is not asked of any other government groups or private companies, although some businesses to implement this practice. Without this burden,  the USPS is reported to turn a $600 million profit. Advocates use this as proof that the current system works and that mass centralization of the mail is unnecessary and unpopular.
"This is a terrible idea," said Steve Hutkins, a professor at NYU who also runs a blog called Save the Post Office. "In the United States, they've talked about doing this for some time, and the Postal Service management has been very reluctant to convert a large number of people to centralized cluster boxes. They know how horrible the reaction will be from the general public."
The changes to the Canada Post will be implemented over the next few years, giving the company a chance to ease consumers into the change and for drone technology to catch up.
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Image: Getty/Justin Sullivan

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