Mr. Speaker, I would like to start by stating that in 2012, Canada Post delivered one billion fewer letters than it did in 2006. Furthermore, two thirds of Canadians do not currently receive door-to-door mail delivery.
We believe that Canada Post must balance its finances without being a burden on Canadian taxpayers, and that is exactly what we expect it to do.
Due to the sheer size of their respective postal territories, Canada's postal situation is more similar to that of the United States than to other G7 countries. In North America, a minority of addresses still receive door-to-door delivery. It is roughly a third in Canada, as I mentioned, and less than 28% currently in the United States.
Most senior citizens in both countries receive their mail through venues other than door-to-door delivery.
Last July, a bill was introduced in the United States Congress that, if passed, would end door-to-door delivery in that country. Despite being named the most efficient post office in 2012 by Oxford Strategic Consulting, the United States Postal Service lost more than $5 billion last year, and almost $16 billion the previous year. Since ending door-to-door delivery in the United States would save an estimated $4.5 billion a year, this option is, not surprisingly, being considered by American legislators.
Mail delivery in other G7 nations differs from that of North America as a result of much higher population densities that tend to live in multi-residential dwellings, such as apartment buildings, that are grouped much more closely together. The end result is that it is less expensive to deliver in other G7 countries than in Canada and the United States, so ending door-to-door delivery would result in comparatively fewer savings. As a result, other approaches have been implemented.
In the United Kingdom, most of Royal Mail has been privatized, thereby allowing an exit from declining postal business. However, this strategy has been costly.
In April 2012, the U.K. government assumed the responsibility for both the Royal Mail pension plan deficit and the plan's liabilities of over £30 billion, or about $56 billion Canadian at the current exchange rate. Stamp prices were also increased dramatically, and the post offices were spun off into a separate government-owned limited company that received £2 billion in subsidies from the U.K. government. These actions helped shore up Royal Mail to the extent that it was able to show profits over the past two fiscal years after many years of deficits. As a result, shares in Royal Mail became more attractive to investors.
It is clear that in Canada, the traditional postal business model that worked so well in the pre-digital era is increasingly out of step with today's reality. Canadians are choosing to communicate in ways other than sending letters, including, of course, using our BlackBerrys. Due to the lack of demand, mail volumes have dropped almost 25% since 2008 and continue to fall. The Conference Board of Canada projected that Canada Post could lose $1 billion a year by 2020.
Canada Post, as an arm's-length crown corporation, is responsible for its operations, including business and financial decisions.