As if home builders weren’t having a hard enough go of it in today’s housing market. With an overstock of supply in many markets, as well as a softening housing market that doesn’t hold near the interest to buyers that it did a year ago, builders and developers have had to scale back on the number of projects they take on. And that’s forced them to hang on to every single penny of profit they make. Now, Canada Post has just made that much harder for them, and they’re fighting back about it.
It was on January 1, 2013, that Canada Post started to place an activation fee of $200 on any and all addresses constructed by the builder. This means that if a condo builder constructs a high-rise with 100 units in it, they’ll have to pay a fee of $20,000 – $200 for each of those 100 units. The cost is high, and it’s to help Canada Post recoup some of the losses they experienced last year. In 2012 Canada Post lost $88 million in just the first three quarters, and a total of $327 million over the entire fiscal year. Something needs to be done obviously, but is this the way to go about it?
Builders don’t think so. They know that even though they’re the ones being billed for it, with such high fees they’ll be forced to pass some of those along to the consumer. Plus, they say, it could be a violation of more than one law.
“I have no idea how they intend to collect this,” says Dennis Peck, government relations manager in the Edmonton region for the Canadian Home Builders’ Association. “The Canada Post Corporation Act says they have to deliver mail. What if we don’t pay? Are they going to stop delivering the mail?”
Not only is Canada Post responsible for delivering the mail, but builders say Canada Post is also responsible for the mailboxes and the maintenance of them. That’s according to an agreement dated 1996 that states community mailboxes will be used in certain locations instead of individual mailboxes, as a way to reduce costs. That agreement does also in fact state that Canada Post will be responsible for the cost of installing and maintaining them.
John Hamilton, a spokesman for Canada Post, says the organization is not trying to deny that this agreement exists, but does say that times have changed. There are 150,000 addresses being added to delivery routes every single year, and that costs Canada post a whopping $30 million that they just don’t have.
“What we are saying,” says Hamilton, “is that we have been paying the cost for many years and that we are at a point where we can’t bear the whole thing. Addresses are being added every year as new developments are started, and we are going to have to recover some of the cost.”
What do you think? Does Canada Post have a right to ask for some of their money back when it comes to installing and maintaining mailboxes? Do you think this cost should be passed onto the builder and ultimately, the home buyer? Or do you see it, as Dennis Peck, as just another way Canada Post is “grabbing money”?
