In the News: Outdated Rules and Mounting Losses: Can Anything be Done to fix Canada Post?
May 27, 2024 ·
Contributed by: Christopher Reynolds, The Canadian Press
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Canada Post needs drastic measures to staunch the fiscal bleeding and revamp its operations after a tough decade, experts say.
The Crown corporation lost $748 million before taxes in 2023, its second-worst year on record as Canadians sent fewer letters while competitors gobbled up even more of the parcel market.
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Earlier this month, Canada Post raised the cost of a stamp purchased in a booklet by seven cents to 99 cents. The price hike is expected to add $23.8 million to its gross revenue between this month and April 2025, said spokesman Phil Legault. That amounts to about three per cent of last year’s loss.
“That helps a bit, but it doesn’t solve it all,” said Marvin Ryder, an associate professor at McMaster University’s DeGroote School of Business.
“I am still one of those odd people that mail 50, 60 Christmas cards. But most people don’t. They’ve gone digital.”
Advertising mail has also declined, as environmental groups put pressure on retailers and digital marketing gains a greater foothold amid rising online orders.
“Companies were getting flack for sending out junk mail,” Ryder said.
Parcel delivery marks Canada Post’s one “bright spot,” he said, though even that segment saw roughly three per cent declines last year.
The postal service’s share of the parcel market eroded from 62 per cent prior to the COVID-19 pandemic to 29 per cent last year, as Amazon and other competitors seized on skyrocketing demand for next-day doorstep deliveries.
“The bottom line is, business is under siege,” Ryder said, pointing to the organization’s $3-billion loss over the past five years.
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