CANADA POST CORPORATION

CANADA POST CORPORATION ACT

Notice to interested parties

Notice is hereby given, pursuant to the Letter Mail Regulations made under the Canada Post Corporation Act, that in accordance with section 3 of those Regulations and subject to the information given below the domestic basic letter rate will increase by $0.01 to $0.53 (1.92%) on January 12, 2009.

This will be the seventh increase authorized by the price-cap formula that is established in the Letter Mail Regulations. The last increase of the domestic basic letter rate (1.96%) occurred on January 15, 2007. The formula applies only to the domestic basic letter rate, defined as the standard domestic letter rate generally available to the public for letters weighing up to 30 g.

The one-cent increase is the result determined by the following price-cap formula, rounded down to the nearest whole cent:

(A × B) + C

where

A is the domestic basic letter rate in effect, that is $0.52;

B is the reduced consumer price index factor, that is 2.978 %. The reduced consumer price index factor is 66.67% of the percentage increase in the Consumer Price Index from the month of May prior to the last domestic basic letter rate increase (May 2006) to May of the current year, that is 4.467%. The factor is therefore 66.67% times 4.467%, which equals 2.978%; and

C is any fractional rate increase in the calculation of the previous increase to the domestic basic letter rate that has not been applied as a result of rounding down to the nearest whole cent, that is 0.2234 cents.

The result determined by the formula is therefore

($0.52 × 2.978%) + $0.002234 = $0.01772
or $0.0154856 + $0.002234 = $0.0177196

Rounding down to the nearest whole cent yields a one-cent (1.92%) increase for January 12, 2009.

It is important to note that the above-mentioned rate increase will take place only if the price-cap formula remains in effect on January 12, 2009. Canada Post Corporation is proposing amendments to the Letter Mail Regulations which, if approved, would repeal the price-cap formula and prescribe a new domestic basic letter rate effective on that date. For further information, please refer to the Proposed Regulations section of the June 28, 2008 issue of the Canada Gazette, Part I.

Any questions regarding this notice should be directed to Ms. Michelle Gosselin, General Manager, Regulatory Affairs, Canada Post Corporation, 2701 Riverside Drive, Suite N0940, Ottawa, Ontario K1A 0B1, 613-734-8207 (telephone), 613-734-7207 (fax).

Ottawa, June 28, 2008

GERARD POWER
Vice-president, General Counsel and Corporate Secretary

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