Canada Post’s Financial Situation Reaches ‘Critical Point’ as They Report $748M Loss for 2023
“Despite numerous warnings about our declining financial state over the years, the current competitive environment has aggravated our challenges which have now reached a critical juncture,” the report stated. “With the shift from mail to parcels, the postal system’s foundation is rapidly weakening.”
Canada Post’s financial loss in 2023 was its largest since the onset of the COVID-19 pandemic in 2020, with management attributing the shortfall to a 17-year decline in mail volumes and the loss of market share in parcel deliveries to competitors like Amazon.
“In the past two years, these cost-effective private operators have made significant strides, particularly by catering to global retail giants,” the report explained. “Our market share in parcel delivery has swiftly diminished by more than half.”
While parcel volumes have steadily increased, Canada Post’s share of the market has shrunk from 62 to 29 percent since 2019, according to the report. It noted that the post-pandemic delivery landscape has led to competition intensifying “like never before in the company’s history.”
“To remain pertinent and sustainable, Canada Post must adapt to the substantial changes in how Canadians function and live today,” the report emphasized. “Over the past two decades, the mail received by Canadians has halved while the number of addresses has grown by over three million.”
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“Even with the proposed hike in stamp prices by Canada Post, the Corporation anticipates a shortfall below its required operating and reserve cash thresholds by early 2025 without additional borrowing and refinancing,” the report highlighted.
The annual report echoes a May 2023 memo from the Department of Public Works emphasizing that Canada Post must achieve financial self-sufficiency.
“While the immediate priority is critical investments and enhancements to cater to evolving demands of Canadians and businesses, financial autonomy remains the corporation’s medium to long-term goal,” the memo stated.
“With the transition from mail to parcels, the pressure on expenses persists. The corporation is strategically investing to enhance service and tracking,” the memo continued.
An earlier internal government memo forecasted ongoing losses for Canada Post extending through 2026.
“Canada Post anticipates losses escalating from $100 million to $700 million by 2026,” read a 2017 Department of Finance memo.
The ministers cautioned that the projected $700 million in annual losses were “conservative” and anticipated even “greater losses” for the corporation.
