Ottawa — Canada Post Corp.'s fuel surcharge on most parcels is expected to nearly double at the end of this weekend, the latest company to pass on the effects of soaring pump prices to consumers.
According to the Crown corporation's website, the mail deliverer expects to raise its fuel surcharge to 4.75 per cent of the delivery charge beginning Monday, up from 2.5 per cent.
The corporation's "estimated surcharge" is expected to remain at that level at least until July 4.
The increase will mean Canada Post's fuel surcharge will as of Monday be more than double the 2.25 per cent it was when first implemented in April, 2003.
Canada Post spokesman John Caines said the company trailed many others in implementing a fuel surcharge and that the value of the change simply reflects pump prices.
A growing number of Canadian companies that rely heavily on fuel, particularly in the transportation sector — from rail giant Canadian Pacific Railway Ltd. to Mullen Transportation Inc. — have implemented fuel surcharges in recent months.
Many market watchers are concerned that the extra fees are here to stay.
André Piché, director of national affairs for the Canadian Federation of Independent Business, said extra costs are hard to get rid of once they've been established, citing the 1.5-cents-a-litre federal fuel surtax on gas.
That tax was brought in to fight the national deficit in 1995, but continues to survive six years after the elimination of the deficit.
Mr. Piché said fuel costs are one of the fastest-rising inputs for many companies and a deterrent for economic growth.
"It's like a hidden tax," he said
The surcharge affects most mail being delivered through Canada Post's Priority Courier, Xpresspost, regular parcel, and most parcels delivered abroad.
© The Globe and Mail
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