Canada Post said Friday its financial situation is so grim it could run out of operating funds in less than a year, after the Crown corporation posted another whopping pre-tax loss of $748 million in 2023.
In its annual report released late Friday afternoon, the company predicts “larger, unsustainable losses in future 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 reserve cash requirements by early 2025,” the report says.
Canada Post has been losing money since 2018. In the last six years, its losses have totalled $3 billion.
The corporation cites declining revenue from delivery of letter mail and parcels, despite an increase in the volume of packages the company is delivering.
Letter mail has been declining since it peaked in 2006. Canada Post delivered less than 2.2 billion letters in 2023.
The cost of delivering mail and parcels is increasing, the company said. Canada Post has struggled to compete post-pandemic with the rising number of new, privately owned delivery companies that use what it calls a “low-cost labour” business model.
“These competitors grew rapidly, leaning on their low-cost-labour business models that rely on contracted drivers to provide lower prices, plus greater convenience with evening and weekend service,” the report said.
Canada Post attempted to break into the e-commerce market but its share “quickly eroded” from 62 per cent in 2019 to just 29 per cent, the company said.
“While we’ve reported on our declining financial situation for a few years, the current competitive landscape has quickly compounded our challenges, which are reaching a critical point,” the report says.
About 200,000 new addresses are added in Canada every year, adding to the costs of delivery, the company said.
Earlier this year, the company sold off its IT and logistics departments as part of a transformation plan to save the beleaguered national mail service.
It also has 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 last few years,” the company’s 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.