OTTAWA — Canada Post is facing what the federal government calls an “existential crisis,” and on Thursday Ottawa announced a series of reforms to keep the struggling Crown corporation afloat.
Public Works and Procurement Minister Joël Lightbound said the postal service is losing about $10 million a day, despite a $1-billion cash injection earlier this year. In the second quarter alone, Canada Post reported a record $407-million pre-tax loss — a sharp reversal from a $46-million profit in the same period last year. Since 2018, the corporation has racked up more than $5 billion in losses.
To stem the bleeding, the government will lift a moratorium on community mailbox conversions, phasing out door-to-door delivery for the four million households that still receive it. Ottawa estimates the move will save nearly $400 million annually. A moratorium on closing rural post offices dating back to 1994 will also end, potentially affecting about 4,000 locations. Officials said many of those outlets are in communities that are no longer considered rural, resulting in duplication.
Other cost-saving measures include shifting non-urgent mail from air to ground transport, expected to save $20 million per year. Lightbound said Canada Post’s delivery standards were built for a bygone era when Canadians received five times as many letters. Today, the average household gets just two per week.
Canada Post has 45 days to present a plan for implementing the reforms. The transition to community mailboxes is expected to take close to a decade, though most households will see changes within three to four years.
The reforms follow recommendations from last year’s inquiry into Canada Post’s finances and labour dispute, which concluded the service was essentially bankrupt. Inquiry head William Kaplan urged an end to daily door-to-door delivery, an expansion of community mailboxes, and new efficiencies. Some recommendations require union agreement, but Ottawa has acted on those within its power.
The announcement comes as Canada Post remains locked in a bitter contract dispute with its 55,000 unionized workers. Last year’s month-long strike during the holiday season disrupted businesses and charities, and the two sides have been unable to reach a deal despite nearly two years of negotiations. Workers rejected the company’s final offer in August, and the union says it was not consulted on the government’s latest reforms.
Lightbound insisted he had met with union leaders and included some of their concerns in the changes, including a review of management structure and the process for raising stamp prices. Still, the reforms set the stage for further confrontation between the government, the corporation, and postal workers as Canada Post attempts to reinvent itself while under enormous financial strain.