Quote:
Originally Posted by Rerun
Thats a proposal. My wife suspects, along with other front line Passport Canada employees, that the 10 year fee will be higher. Passport Canada is one of the few government agencies that operates totally on revenues obtained through the sale of passports. They are not subsidized by general government revenues. Why would Passport Canada deliberately reduce their revenues, by selling a 10 year (and more expensive passport to produce) for $160, causing them to operate in the red?
|
Well, let's say for example the fixed costs of producing the current passport is $30 and the fixed costs of producing the new passport is $40.
They sell the current 5 year passport for $85, which is a $55 profit per passport, or $11 per year of validity. If they sell the new 10 year passport for $160, it would be a profit of $120 per passport, or $12 per year of validity.
Also, let's say there are 10 million passports in Canada, and 30% choose to keep renewing theirs for 5 years, but the other 70% opt for the 10 year passport.
Right now, they would need to process 2 million passports per year, and would need to have the staff and resources available to do that. If 3 million stay on a 5 year cycle, that's 600,000 per year. With 7 million moving to a 10 year cycle, that's 700,000 per year. Combined, that would reduce the number of passports processed per year to 1.3 million. That would allow them to reduce their staffing requirements and other costs.
Now, I just made these numbers up, but I'm sure that the powers-that-be at Passport Canada have done the calculations with the real numbers.