Canada Post’s Next Annual Report Will Reveal Its Dire Financial Situation, Executive Tells MPs

Canada Post executives inform MPs of dire financial situation in upcoming annual report

April 9, 2024 TruthUSA

A senior executive from Canada Post recently addressed a parliamentary committee about the upcoming annual report, emphasizing the seriousness of the corporation’s financial challenges. During the session, a Liberal MP raised doubts about the sustainability of Canada Post’s current business model.

Alexandre Brisson, the Vice-President of Canada Post operations, highlighted the growing competition from budget-friendly carriers that have disrupted the parcel delivery sector in a short period. This shift has caused a significant decline in Canada Post’s market share.

In anticipation of the annual report, usually released in early May, Mr. Brisson mentioned that more details about the financial status would be provided. Canada Post’s financial struggles have been mounting, with cumulative losses totaling $2.2 billion since its last pre-tax profit in 2017.

In the most recent available data for 2022, Canada Post incurred pre-tax losses of $548 million. Various factors such as reduced parcel revenue, declining mail volumes, competition from e-commerce delivery services, and the costs associated with universal delivery obligations in Canada contributed to these losses.

The 2022 financial report of the Crown corporation stated, “While immediate attention is required for critical investments and enhancements to meet the evolving needs of Canadians and businesses, achieving financial self-sustainability remains a medium- to long-term objective.” Canada Post is mandated to remain financially sustainable while providing services to all Canadians.

To address some of its financial challenges, Canada Post is planning to raise the price of stamps by seven cents to 99 cents starting in May. The expected impact on the average Canadian household is around 65 cents annually and approximately $12 for small businesses.

Challenges and Questions from MPs

During the committee meeting, Conservative MP Kelly Block questioned Mr. Brisson about the last approved strategic plan by the government for implementation. There was uncertainty about the exact timeline of an approved strategic plan.

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Mr. Brisson acknowledged the need for a transformational plan to adapt to changing expectations. He stressed the importance of evolving from primarily letter mail delivery to competing in the growing parcel market.

In response to a question about selling a profitable business to support core operations, Mr. Brisson mentioned a long-term strategic approach. Earlier this year, Canada Post made headlines for selling the successful subsidiary SCI Group Inc., generating $327 million in revenue, though the exact sale price was undisclosed.

Charles Sousa, a Liberal MP and parliamentary secretary, raised concerns about the sustainability of Canada Post given its financial losses and declining liquidity. He pointed out the challenges posed by private sector competitors utilizing cost-effective gig economy and contract labor models, along with compensation limitations faced by Canada Post.

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