CANADA POST IS BLEEDING MONEY

Deliveries plunge, as do corporation's financial reserves

• Canada Post is at a tipping point. With letters declining, package delivery going to competitors and the Crown corporation losing $3 billion over the last six years, something will soon have to change about how Canadians get their mail.

In 2006, Canada Post delivered seven letters per week to the average address; it now delivers two. That has reduced overall volumes from 5.5 billion letters in 2006 to 2.2 billion last year.

It lost $748 million before taxes in the last year alone, according to its financial statements released earlier this month.

Today, there are no taxpayer dollars going into Canada Post, the corporation's exclusive monopoly on letter mail has previously allowed it to cover costs and even bank surpluses in previous years, but those surpluses have been eroded and, come early next year, the corporation expects its reserves will fall below requirements.

Canada Post's president and CEO, Doug Ettinger, said in his annual report that something has to change.

“Canada Post is now at a critical juncture — modernize and revitalize to serve a rapidly changing country or fall behind and struggle to keep it all going,” he said.

While letter mail has declined, online shopping has exploded and, initially, Canada Post was successful in pivoting to that market. In 2019, Canada Post handled 62 per cent of parcels delivered in this country, but now that's down to just 23 per cent as new companies enter the market.

Postmedia, which owns National Post, is also in the parcel delivery business.

Jon Hamilton, Canada Post's vice-president of strategic communication, said new competitors have entered the market that have more flexibility to deliver on evenings and weekends, with lower costs.

“Because Canadians have moved to online shopping and there's been tremendous growth, that's obviously attracted a lot of new competitors. And our market share has quickly declined in just the last few years,” he said.

Hamilton said Canada Post is working with the government and with its unions on a path forward. He said they're open to considering any kind of changes that could stabilize their finances.

“We need to look at everything and look at what other countries are doing with their postal systems and understand what's important. What do we need to maintain and what needs to change?”

Canada Post has mandates it is obliged to follow. In addition to providing delivery to Canadians five days a week, it is mandated to deliver letters within set time frames and has to have postal outlets within 15 kilometres of 99 per cent of Canadians.

Canadian Union of Postal Workers president Jan Simpson said the financial problems at Canada Post are a real concern, but she believes the corporation should be considering becoming bigger rather than smaller, moving into postal banking as some other countries' postal agencies have done, or providing check-ins on seniors.

She said Canada's big banks don't serve many rural or remote communities and Canada Post could fill that void.

“We saw that during COVID, many banks have left these communities and for those that are still within communities, the fees are very high. So there's many people who are underbanked throughout this country,” she said.

CUPW is in negotiations with Canada Post over contracts that expired late last year and early 2024. Simpson was also critical of $15 million in bonuses that the corporation awarded to executives.

“You're saying that you're having financial hardship, but you're awarding yourself bonuses. I mean, that's just shocking to me.”

Canada Post's financial report doesn't specifically identify what changes it is considering, but it could mean changes to how mail is delivered, moving to less frequent deliveries or slower delivery times for letter mail. The corporation could also close post offices.

They could also make changes to how parcels are delivered, moving to weekend or evening deliveries as many private firms offer.

Simpson said moving away from regular door to door delivery would be a mistake.

“When under the Harper government, we went to community mailboxes, we took away our competitive advantage; Canada Post is going to every door, every day.”