OTTAWA—Even as Canada Post begins to phase out door-to-door mail delivery and hike the price of stamps, the Crown corporation will have an extra billion dollars on hand next year thanks to federal relief on its pension requirements.

The Department of Finance announced Wednesday that it intends to ease solvency requirements for the Canada Post pension plan for four years, meaning the corporation can put off approximately $1 billion in special payments to the fund in 2014 alone.

Coupled with an aggressive restructuring strategy estimated to save between $700 million and $900 million when fully implemented, Canada Post will have a lot more cash to play with as it attempts to modernize the postal service for an increasingly digital age.

“We now have time to work to transform the company and transform the pension plan,” Canada Post spokesman Jon Hamilton said Wednesday.

“We get that this is a change, but it’s a change based on the discussions we’ve had with Canadians about what kind of postal service they’re looking for in the future.”

In exchange for the pension relief, Ottawa has asked Canada Post to restrict the growth in management compensation to match the changes to the growth in union wages. Federal government sign-off will be required for any improvements to pensioners’ benefits — so long as the pension remains in its $6.5 billion solvency deficit.





Union officials were given the heads-up about the pension changes late Tuesday, but were caught off guard by the sweeping changes to Canada Post’s service Wednesday morning. The Canadian Union of Postal Workers has vowed to fight the cutbacks — which could see them lose as many as 8,000 members — and urged like-minded Canadians to do the same.

Online reaction to Canada Post’s announcement

“We have a call to the public to say, ‘OK, you don’t want to lose your door-to-door delivery, so you have to say something,’ ” Denis Lemelin, the national president of CUPW, said Wednesday from the union’s Ottawa headquarters.

“Enough is enough. We’re cutting the public service, we’re cutting the health services, we’re cutting public servants and people are losing their jobs everywhere. Now it’s 6,000 to 8,000 jobs in the postal service.”

New Democrat MP Olivia Chow said Canada Post should be focused on expanding revenue through offering more services, rather than cutting existing ones.

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“This jobs-killing and services-cutting move will isolate seniors, the poor and the disabled living in urban areas,” Chow wrote in an email to the Star Wednesday.

“The backward looking five points plan released by Canada Post focused only on killing jobs and services instead of aggressively seeking more revenue by increasing e-services.”

Chow called the announcement a “sneak attack” from the federal Conservatives, announced the day after the House of Commons adjourned for its winter break.

Lisa Raitt, the federal minister responsible for Canada Post, was not accepting interview requests Wednesday. When asked, her spokeswoman did not give a reason.

Raitt did, however, applaud Canada Post’s plan in a press release on Wednesday.

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