With a seemingly insurmountable deficit, which has made the Crown Corporation essentially insolvent, Canada Post is likely to see some major changes taking place to get costs under control, including the loss of 30,000 of its nearly 62,000 jobs to retirement and voluntary departures by 2035, 16,000 of which will be eliminated by 2030 and the other 14,000 over the following five years.
Chief Financial Officer Rindala El-Hage said that losses in the first nine months of the year topped $1 billion, which is $239 million more than losses posted in the same period last year.
“Going forward, we will need to be a leaner organization and align our operations to the modern needs of the country and our financial reality,” Doug Ettinger told Canada Post’s annual meeting. “It will need some change, but we can do it in a way that minimizes the impact on our people. We’ll need to have a strong labour force going forward and we will continue to provide good jobs with good benefits. But the reality is, with so much new competition for parcel deliveries and the decline of letter mail, we’re clearly overstaffed.”
Canada Post accumulated losses before tax of $3.8 billion between 2018 and 2024, but this year it recorded what was referred to as an “unprecedented” loss before taxes of $541 million in the third quarter alone, which was greater than the previous record for the largest quarterly loss in its history, which was set in the second quarter.
In January, the federal government opened up a $1.034 billion repayable loan to Canada Post, to be used as needed to maintain solvency and support its operations, and $755 million of that has already been used in the third quarter alone, with an additional $200 million drawn outside of the quarter.
Changes to Canada Post’s business model may include adjusted mail delivery standards, the closure of some rural post offices, and the expansion of community mailbox service to more addresses. It must certainly include no longer relying on the government to supplement it through loans, further burdening the taxpayer.
The recently approved federal budget also includes measures that will allow Canada Post to set its own postage rates, which will enable it to adapt more quickly to changing market dynamics.
