ANNEX I: Proposed Service Charter

Concept Document for Discussion Purposes

Statement of Underlying Principles

1. The Government of Canada (“the Government”) and Canada Post Corporation (“Canada Post”) are committed to providing a high quality and universal postal service to all Canadians wherever they may live in Canada, as outlined in this proposed Service Charter;

 
2. The Government and Canada Post commits to the principle of working together proactively to ensure a mutual understanding of the issues, challenges and opportunities that exist regarding the provision of acceptable postal services to Canadians on a financially self-sustaining basis;

 
3. The Government and Canada Post endorse a consultative process with affected groups to establish processes and/or developments that are designed to improve, change or guarantee delivery of the universal postal service;

 
4. The Government and Canada Post accept that maintaining a high quality and universal postal system for Canadians is dependent on measures to maintain Canada Post’s financial sustainability (see the proposed revised Financial Framework); and

 
5. The Government and Canada Post agree that, to the extent that this is a dynamic agreement, changes will be made by mutual consent and appropriate consultation whenever possible, with each party recognizing and respecting the authority and accountability of the other.

Universal Service Obligation (USO)

1. Canada Post will maintain a universal, effective and economically viable postal service.

 
2. The universal service obligation includes the following basic ingredients:

 
• Any resident of Canada will be able to communicate, transact business, and send or receive letters, parcels or publications (books, magazines, periodicals and newspapers) by mail and from every address in Canada and to and from other countries;
• There will be national collection, delivery and access (retail) networks that allows this in a timely and convenient manner;
• Free mail service will be provided for materials for the blind; and
• The USO will be provided with reasonable service standards and at affordable and reasonable prices, including a single price for basic lettermail.


3. The USO will apply to both individual residents of Canada and to businesses operating in Canada.

 
4. The Government of Canada and Canada Post agree that the provision of postal services to rural regions of the country is an integral part of Canada Post’s universal service obligation.

Reserve Area

5. The Government of Canada grants to Canada Post the exclusive privilege to collect, transmit and deliver letters in Canada as specified in the Canada Post Corporation Act to underpin the financial costs of the universal service obligation. This applies to both domestic and outbound international lettermail unless changed by legislation.

Delivery Standards

6. Canada Post will deliver parcels, lettermail and publications daily (meaning every working day, Monday through Friday, except for holidays).

 
7. Canada Post agrees to deliver:

 
• At least X* per cent of local mail within two working days;
• At least X* per cent of regional mail within three working days; and
• At least X* per cent of national mail within four working days.
 
8. Canada Post agrees to guarantee:

 
• Daily service to at least X* per cent of the Canadian population;
• Service three times per week to at least X* per cent of the Canadian population;
• Weekly service to 100%* of the Canadian population; and
• Canada Post will provide a list to the Government of all communities that do not receive daily service, with an appropriate rationale.
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9. The formula and the list outlined in Article (8) above will be made public and reviewed regularly. Any changes to this list must follow prescribed procedures.

Retail Network

10. Canada Post will provide a network of postal outlets using a variety of forms – corporate offices, private dealer outlets in commercial shops, and so on. The postal outlet used in any community should be appropriate to the circumstance. There shall be no less than X* number of postal outlets in total in Canada.

 
11. Canada Post may consider changes to the network of postal outlets, following prescribed procedures.

 
12. As part of its Annual Report, Canada Post should present an assessment of the cost-effectiveness and financial sustainability of the postal outlet modes and alternatives, so that policy-makers and Canadians can evaluate the ‘value-for-money’ character of each of the delivery instruments.

Rural Postal Network

13. The Government and Canada Post agree to adopt a new definition of “rural” for postal purposes to be established initially “as communities with a population of 10 000 or less.”

 
14. To ensure that rural service needs of rural Canada are met on an ongoing basis and to provide Canada Post with the operating flexibility necessary to meet its ongoing obligations to its shareholder, the following provisions will become effective on the date of this Charter:

 
1. All active postal outlets in place on the date the Charter becomes effective shall continue in service unless decreases in service levels are made in full compliance with this Charter;
2. For clarity, Canada Post will prepare a list reflecting all active postal outlets and the service levels provided by each as of the effective date;
3. For clarity, a change from a corporate post office outlet to a private dealer operated outlet, or vice versa, is not considered to be either a closure or a change in service level;
4. To ensure all rural Canadians continue to receive acceptable levels of service in the future, a proximity-based model **** specifying maximum access distances to postal outlets will be adopted;
5. The proximity-based distance criteria within the model will be as follows:

 
1. 100% of Canadians shall have access generally equivalent to that available to them as of the effective date of the Charter**, unless changes are made in full accordance with the procedures prescribed herein;
2. 98% of Canadians shall have access to a postal service outlet within 15 kilometres of their residence **; and
3. 80% of rural households shall have access to a postal service outlet within 7.5 kilometres of their residence ***;


6. To provide further certainty, Canada Post will be required to maintain a minimum of Z = (Y-20) postal service outlets in rural Canada, where Y equals the number of active postal outlets in service as of the effective date of this Charter. (Note: 20 outlets were selected to provide Canada Post sufficient flexibility to deal with emergent issues and to permit the approach to be adequately tested);
7. The minimum number of active rural postal outlets, Z, may be decreased only through a separate and specific approval process to be prescribed by the Minister and to be considered in conjunction with, but approved separately from, Canada Post’s annual corporate plan;
8. Community consultations *** by Canada Post will be required to be an integral part of any local postal outlet closure or rationalization which may proceed only after due consultation with local authorities;
9. The Ombudsman is designated as the party to whom directly affected communities or parties can direct complaints regarding the process and/or approach used by Canada Post on a community specific basis. The Ombudsman will provide his conclusions and any recommended course of action to the Board Chair for consideration and action; and
10. The Board will be accountable to the Minister responsible for ensuring Canada Post’s compliance with the required parameters noted above. The Board Chair will specifically report on all closures, rationalizations and level of community concern with the outcomes to the Minister as part of the annual meeting between the Minister and the Board or as may be otherwise requested by the Minister.

Delivery Modes

15. Canada Post will deliver mail using a variety of delivery modes – mailbox service at the door, community mailbox, post box in postal outlets, end-of-lane delivery, and so on. The delivery mode used in any community should be appropriate to the circumstance.

 
16. Canada Post may consider changes to the delivery network and submit proposals to the government for consideration as part of the annual corporate planning process.

 
17. As part of its annual report, Canada Post should present an assessment of the cost-effectiveness and financial sustainability of the delivery modes and alternatives, so that policy-makers and Canadians can evaluate the ‘value-for-money’ character of each of the delivery instruments.  

Regulated Prices

18. Domestic and international postage rates for letters under 500 grams will be set in the Lettermail Regulations and the price will be uniform regardless of the distance travelled.

 
19. In addition to the requirements outlined in the Canada Post Corporation Act, Canada Post agrees to publicly advertise proposed changes to the prices of regulated lettermail products in national newspapers and on the corporation’s website, and to actively conduct a consultation process with customers on proposed changes.

Non-Regulated Prices

20. Canada Post commits to providing affected Canadians with readily available and timely information on planned future increases in the prices of unregulated mail to allow sufficient opportunity for comment and feedback on changes proposed and to permit business customers a reasonable time to adjust their business practices and models.

Compliance Assurance

21. If the Minister receives an allegation that Canada Post is failing to comply with the terms of the Service Charter, the Minister may refer the allegation to Canada Post for investigation and follow-up, as the Minister deems appropriate. Upon referral of any such allegation, Canada Post shall consult in a timely manner with the Minister on the accuracy of the allegation, advise of any measures that it had taken to date to resolve the issue, and of any corrective measures that may still be required. The Minister in the final instance shall decide whether the actions taken are acceptable and appropriate.

 
22. This Charter is an agreement between the Government and Canada Post. It is not intended to create any right or obligation with any other party.  

Reviews and Amendments

23. The Government and Canada Post will review developments under the Service Charter annually to:
24. 1. Assess the extent to which the objectives of the Service Charter are currently being met;
    2. Identify and assess factors that could have a material impact on future performance under the Charter; and
    3. Identify potential areas where alterations or revisions might be practical or warranted to address both current and expected future challenges to delivery of the service targets.
    
     
25. Canada Post will include a Service Charter Performance Report in its annual report.

 
26. Amendments to this Charter will follow separately prescribed procedures.

 
27. The Government and Canada Post agree to review, assess and renew the Service Charter every five years.

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* Given Canadians reported general satisfaction with postal services, it is recommended that these numbers/percentages be those actually in place and/or publicly reported by Canada Post (subject to auditable verification) on the effective date of the Charter.
** Canada Post should be required to provide current and verifiable metrics, which would form the “ benchmark” at the time the Charter is put into effect. It is expected that the proximity-based model may require adjustment if the “actuals” vary substantially from the percentages proposed or the need for modifications are otherwise indicated.
*** Canada Post has a proactive community consultation process in place that should form the basis of future community consultations. It is recommended that a review of the general satisfaction of communities recently engaged through this process be undertaken and adjustments made to the process as deemed appropriate as a result.
**** It is recommended that a consultation with representative rural Canadians be undertaken to verify the suitability/acceptability of the proximity model proposed.

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