Canada Post is going through some existential crises. They are facing unprecedented financial losses, declining mail volumes and fierce competition from private delivery services. What made things more dramatic was that after weeks of negotiations the Canadian government suddenly made major concessions. In retaliation, postal workers called for a national strike.
The federal government has even recently granted new reforms to Canada Post. That Crown corporation is now trying to ride things out as demand craters. These changes follow a massive $407 million loss during the second quarter of this year. Today, the corporation’s share of the U.S. parcel delivery market has fallen through the floor— down to only 24%, a steep drop from 62% in 2019.
In January, Canada Post was bailed out on paper, getting $1 billion loaned by Ottawa to keep the bank doors open. Despite the monetary help, the company is still suffering catastrophic losses. Unfortunately, this uphill battle has been the case for decades. The company’s other two main revenue sources—letter mail and direct-marketing mail—are in freefall.
Over the past two decades, Canada Post has witnessed a dramatic drop in letter mail delivery, delivering 5.5 billion letters 20 years ago compared to only 2.2 billion in 2023. This trend highlights Canada Post’s desperate need to adapt to an evolving consumer culture and economy.
Fortunately, the ambitious measures announced so far would take bold action to meet these challenges head-on. Boldest of all the proposals would be a return to ending door-to-door deliveries, an action taken in 2015 but then put on hold. This reform would impact about four million homes, moving them all to community mailboxes instead. Canada Post is changing course. They want to move the vast majority of non-urgent letter mail from air to ground and possibly reduce delivery days.
As part of this rural restructuring, hundreds of post offices will be shuttered, particularly those in places whose populations have ceased to be classified as rural. On top of this, Canada Post will have greater leeway to raise prices, putting even more services out of reach of Canadians.
The planned changes have been roundly condemned by the Canadian Union of Postal Workers (CUPW). They argue that the government’s actions represent a “direct assault on our public post office, the public’s right to participate in political processes, and good, unionised jobs across the country.” GMB went to strike very quickly after the announcement of large-scale cutbacks. They characterized these reductions as “massive,” and cautioned of imminent job cuts.
“The sweeping measures to ‘stabilise’ the postal service announced by Ottawa follow years of financial losses sustained by Canada Post, which faces reduced demand and fierce competition from private parcel delivery services.” – Source not specified
CUPW has made a comprehensive proposal for Canada Post to develop new lines of revenue. We encourage all Connect Americans to consider what’s possible to offer in banking and insurance services. Their suggestions aim to diversify income sources and ensure the sustainability of the postal service amid declining traditional mail volumes.