Hello everyone,
I also received my Canada PR and received a Passport request letter.
I just want to share my experience on this topic.
I went all the comments from members across various forums and also did research on my part trying to contact various courier companies(DHL, UPS, GLS, DPD). It was not possible to get a return prepaid label and arrange a pickup from the Canadian Embassy in Vienna.
The safest option is however through the VAC in Dusseldorf which is expensive(around 50 Euro per passport for Passport transmissions and sending back the passport to you). You also need to consider the cost to send your passports to the VAC either by post, courier or drop in person.
If you leave near Dusseldorf and can collect your passports by yourself, then you can save some cost and it will the cost you around 24 Euro per Passport(Passport transmission to the Embassy,Vienna).
Well I went for the 3rd option, sending the passports via Registered post directly to the Embassy in Vienna. I didn't send any prepaid return envelope(as it was not possible for me to arrange it). The Embassy also sent back the passports also via registered post. The total turnaround time was 5 working days. I sent my passports Thursday morning and got it back by next week Wednesday. Isn't that great

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Regarding the expense. It cost me under 10 Euros for one way registered post. The embassy doesnt charge anything for sending the passports via Registered post which also cost them around 10 Euros.
I read many posts which raised doubts on the registered post option and the Passport request letter also mentioned "The embassy will not be responsible for documents lost in regular mail". This also made me skeptical on this option as I didn't want to risk losing mine and my family's passport.
But then I thought if this was a risky option, why would the embassy even propose this option. They could have directly asked us to go to the VAC.
Then I decided to opt for the registered post which worked fine for me. It costed under 10 euros and took only 5 working days.
I relied the registered post which should be trustworthy in Europe. Registered post is traceable online.
I hope this is helpful.
Thanks