Canada Post’s Next Annual Report Will Reveal Its Dire Financial Situation, Executive Tells MPs

A Canada Post truck is parked at a sorting centre in Montreal on July 8, 2016. (The Canadian Press/Ryan Remiorz)

A Canada Post executive has told a parliamentary committee the Crown corporation’s next annual report will spell out “the gravity” of its financial situation, while one Liberal MP questioned whether the post office’s business model is unsustainable.

“We are now facing intensifying competition from low-cost operators who have disrupted the parcel delivery market in just a few short years,” Alexandre Brisson, vice-President of Canada Post operations, testified at the Commons government operations committee on April 8. “As a result, our market share has significantly dropped.”

Mr. Brisson said the Crown corporation’s annual report, typically tabled in the first week of May, would provide more detail on its financial situation, as first covered by Blacklock’s Reporter. Canada Post last reported a pre-tax profit in 2017, and subsequent losses since then have come to a combined total of $2.2 billion.

In 2022, the most recent year with available data, Canada Post had pre-tax losses of $548 million. The Crown corporation attributed the losses to declining parcel revenue, lower mail volumes, competition from e-commerce delivery, and increased costs due to its mandate to deliver to all addresses in Canada.

“While the immediate focus must be on critical investments and improvements to meet the changing needs of Canadians and Canadian businesses, financial self-sustainability remains the Corporation’s medium- to long-term goal,” the corporation said in its 2022 financial report. “Canada Post has a long-standing mandate to be financially self-sustainable while serving all Canadians.”

Canada Post is set to increase the price of stamps by seven cents, to 99 cents, beginning in May. The change is estimated to cost 65 cents per year for the average Canadian household, and a little over $12 for the average small business.

MPs Question Operations

Conservative MP Kelly Block asked Mr. Brisson when Canada Post last submitted a strategic plan that was approved by the government and allowed to be implemented. Mr. Brisson replied that it was a “good question” but he did not know the exact number of years.

“We talk about a transformation plan because expectations have changed,” said Mr. Brisson. “We are a machine designed for letter mail delivery. We are now in the middle of a big parcel market and we have got to change.”

When Ms. Block asked why Canada Post had sold a profitable business that could be used to subsidize its core operations, Mr. Brisson replied that the company has a long-term strategy. In January, managers announced they were selling the wholesale shipping subsidiary SCI Group Inc., which reported $327 million in year revenues in its last financial statements, at an undisclosed price.

Liberal MP and parliamentary secretary for the Department of Public Works, Charles Sousa, questioned if Canada Post has become “unsustainable.”

“Obviously Canada Post’s recurring financial losses are concerning in the sense it is almost unsustainable given the net liquidity position is depleting,” said Mr. Sousa.

Mr. Sousa added that Canada Post’s private sector competitors were “using low-cost gig economy and contract labour and certainly compensation restrictions pose conflicts for Canada Post.”