Canada Post is planning to raise the cost of mailing a letter to 52 cents next January.

Letter rates to the U.S. and international destinations will also increase.

The increase in the basic letter rate is calculated under a formula that limits the increase to two-thirds of the annual change in the Consumer Price Index.

The new rates will take effect Jan. 15, 2007.

Even at the new rate of 52 cents, Canada Post says Canadians will still enjoy one of the lowest domestic basic letter rates among industrialized nations.

The basic rate for a letter or postcard to the U.S. will increase four cents to 93 cents, while the international rate will rise six cents to $1.55. Canada Post says the proposed rates compare favourably to what it costs to send a letter from foreign countries such as Britain or Australia to Canada.

The rate increases are needed to keep pace with inflation, direct operating costs and the need to reinvest in network infrastructure to meet customer demands. Canada Post says its fuel costs have risen 18 per cent since 2005 and a further increase of five per cent is expected in 2007.