Canada Post lost $748 million last year and warns of a “critical” financial situation

Canada Post said Friday its financial situation is so bleak that it could run out of operating funds in less than a year, after the Crown corporation posted another huge pre-tax loss of $748 million in 2023.

In its annual report Released Friday afternoon, the company predicts “larger and unsustainable losses in the coming years” without major changes to its operating model.

“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 cash reserve requirements by early 2025,” the report says.

Canada Post has been losing money since 2018. Over the past six years, its losses have totaled $3 billion.

The company cites a decline in revenue from mail and package delivery, despite an increase in the volume of packages the company delivers.

Letter sending has been declining since peaking in 2006. Canada Post delivered fewer than 2.2 billion letters in 2023.

The cost of delivering mail and packages is increasing, the company said. Canada Post has struggled to compete post-pandemic with the growing number of new privately owned delivery companies using what it calls a “low-cost labor” business model.

“These competitors grew rapidly, relying on their low-cost labor business models that rely on contract drivers to offer lower prices, plus greater convenience with evening and weekend service,” the report says.

Canada Post attempted to enter the e-commerce market, but its share “quickly eroded” from 62 per cent in 2019 to just 29 per cent, the company said.

“Although we have been reporting our declining financial condition for some years, the current competitive landscape has rapidly exacerbated our challenges, which are reaching a critical point,” the report says.

About 200,000 new addresses are added in Canada each year, increasing delivery costs, the company said.

Earlier this year, the company sold its IT and logistics departments as part of a transformation plan to save the embattled national mail service.

It has also spent heavily on new processing capacity for package delivery, upgraded its facilities and tried to improve customer service.

“Canada Post is committed to leading that change, building on the improvements we’ve made across the organization over the past several years,” company president Doug Ettinger said in a news release.

The Canadian Union of Postal Workers (CUPW), which represents 60,000 employees, did not respond to CBC’s request for comment.