Canada Post ended the week with more grim financial news, announcing an operating loss of C$221 million for the first three months of the year. This comes on top of an announcement earlier this month that it lost $748 million last year.
The state-owned postal service has now posted losses of more than $3 billion since 2018, and gave a bleak outlook for its 2023 annual report released this month.
“We expect to incur even larger and more unsustainable losses in the coming years,” he wrote, adding that the company would run out of cash early next year unless it borrowed an additional $1 billion and refinanced $500 million in current debt. Yes.
“Canada Post is at a critical time in its history,” the company wrote with uncommon bluntness in its annual reports. “As financial pressures mount, our long-standing role as a vital publicly owned national infrastructure for Canadians and Canadian businesses faces serious threats.”
For decades, the Post Office’s biggest problem has been that people and businesses that were once its main source of income are not sending letters at all. In 2006, Canadian households received an average of seven letters a week. Last year, that number was two.
Online shopping has offered some hope during the pandemic as it has become the only way to purchase many products. Canada Post lost $779 million in 2020, but much of that was due to pandemic-related costs, with package deliveries up 50 per cent year-over-year and demand from carriers exceeding capacity.
These gains proved to be temporary, in part because the growth of the parcel business created new types of competitors. In addition to unionized businesses like UPS Canada with similar cost structures, Canada Post now faces a growing number of small businesses that rely on low-wage temporary workers who don’t receive benefits.
Just before the pandemic, the Post Office delivered 62% of all packages in Canada. Now we only process 29%. The business is under pressure on both ends. In addition to pricing pressure from competitors, parcels cost the Post Office much more to process and deliver than letters and require significant investments in equipment. So profit margins are slim.
Canada Post CEO Doug Ettinger said in a statement that the company needed to revamp its service and was discussing plans with the government.
“Canadians understand that our business model needs to change.” He added: “An operating model designed to deliver approximately 5.5 billion letters in 2006 is unsustainable with the 2.2 billion letters we delivered last year.”
Mr. Ettinger did not say what form those changes would take. When we reached out to Canada Post for more details, he responded, “Discussions regarding delivery or other major changes are still in the early stages.”
The 2016 government-mandated review of Canada Post presented a number of proposals that appeared politically difficult. It called for an end to a moratorium on rural post office closures introduced in 1994 after a public backlash. It proposed switching many households from door-to-door delivery to community mailboxes. It’s a return to the ‘super mailbox’ program, which was so unpopular that Prime Minister Justin Trudeau’s government scrapped it shortly after coming to power in 2015. The recommendation to review wages and pension costs seemed like a formula for an industrial dispute.
Canada Post is not alone in experiencing these challenges. Other postal systems may provide hints as to what could be happening here.
Britain’s Royal Mail, which was privatized in 2013, posted an adjusted operating loss of 419 million pounds (about 729 million Canadian dollars) last year. One regulator recently proposed reducing deliveries from six days a week to three.
(read: Mail three days a week? The idea met resistance in Britain.)
But as soon as the idea was floated, Chancellor Rishi Sunak said he would “absolutely adhere” to the six-day workweek required by law.
(The British Post Office, which operates postal stores and remains government-owned, has been embroiled in a scandal and is under formal investigation after software problems led to hundreds of branch managers being wrongly accused of theft.)
Like Canadians, Britons use the mail much less these days, but the idea of reducing the number of deliveries remains unpopular. That may have influenced this week’s immediate rejection of Mr Sunak’s bid to call a July election, which is likely to throw his party out of power.
Substantive changes at Canada Post will be equally difficult. It is not yet known whether Mr. Trudeau, another leader trailing by double digits in opinion polls, will take on the job with an election expected within the year.
trans canada
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Vjosa Isai has compiled an overview of Canada’s current wildfire season.
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Toronto Blue Jays fan Liz McGuire is featured on a custom trading card. But her image got there through circumstances she probably would not want to repeat.
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After Canada legalized marijuana, a study found that emergency room visits due to cannabis intoxication increased among people aged 65 and older. Cases of poisoning doubled after Canada legalized the sale of cannabis flower, and tripled when Canada legalized the sale of edibles.
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After sending robocalls to more than a million households, Canadian medical researchers now estimate that up to 70 per cent of people suffering from a group of conditions called asthma or chronic obstructive pulmonary disease are undiagnosed.
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In her Watching newsletter, The Times’ television critic Margaret Lyons wrote that “Zarqa,” a short comedy series set in Regina, is “extremely urgent.” It was produced and starred by Zarqa Nawaz, who created the sitcom ‘Little Mosque in the Prairie’. All episodes are available to watch in Canada on CBC Gem.
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Rex Murphy, a Newfoundland-born radio, television and newspaper critic who delighted conservatives with his sharp attacks on environmentalists, liberal politicians and their “woke politics,” died this month at age 77. I did.
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Frugal Traveler columnist Elaine Glusac traveled the Alaska Highway through the Yukon, British Columbia, and Alberta. She wrote that the route “takes motorists through some of the most beautiful scenery in North America.”
A native of Windsor, Ontario, Ian Austen was educated in Toronto, lives in Ottawa, and has reported on Canada for The New York Times for 20 years. Follow him at Bluesky. @ianausten.bsky.social.
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