Canada Post recorded a pre-tax loss of $748 million in 2023, according to the latest annual report from the Crown corporation, saying the situation has reached a “critical point.”
“While we’ve reported on our declining financial situation for a few years, the current competitive landscape has quickly compounded our challenges, which are reaching a critical point,” the report says. “As the landscape has shifted from mail to parcels, cracks are rapidly appearing in the foundation of the postal system.”
Canada Post’s financial loss was its steepest since the COVID-19 pandemic struck in 2020, with management blaming the deficit on an ongoing 17-year decline in mail volumes and loss of market share in parcel deliveries due to rivals like Amazon.
“These low-cost private operators have gained significant ground particularly in the last two years by focusing on serving international retail giants,” the report said. “Our estimated market share in parcel delivery has quickly eroded by more than half.”
Despite a steady growth in parcel volumes, Canada Post’s market share of parcels shrunk from 62 to 29 percent since 2019, the report adds. It said the post-pandemic delivery landscape has resulted in competition accelerating “at a pace not seen in the company’s history.”
“Canada Post needs to adapt to the dramatic changes in how Canadians live and work today to remain relevant and viable,” the report says. “Over the last 20 years, the amount of mail Canadians receive has declined by more than 50 percent while the number of addresses has increased by more than three million.”
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The report adds that even with its recent stamp price increase, Canada Post projects it will fall below its required operating and reserve cash requirements by early 2025. Beginning in May 2024, the Crown corporation increased the price of stamps by seven cents, to 99 cents.
“Even with Canada Post’s recently proposed stamp price increase, the Corporation projects that, without additional borrowing and refinancing, it will fall below its required operating and reserve cash requirements by early 2025,” said the report.
The annual report followed a May 2023 memo by the Department of Public Works that said Canada Post must become financially self-sufficient.
“While the immediate focus must be on critical investments and improvements to meet the changing needs of Canadians and Canadian businesses, financial self-sustainability remains the corporation’s medium to longer term goal,” said the memo.
“As the business shifts from mail to parcels, pressure on costs continues.The corporation is making strategic investments to improve service and tracking,” the memo added.
An earlier internal government memo predicted Canada Post losses would continue through 2026.
“Canada Post projects losses increasing from $100 million to $700 million by 2026,” said a 2017 Department of Finance memo.
The ministers added that estimates of $700 million in annual losses were “conservative“ and predicted the corporation would see ”even greater losses.”
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