(Ottawa) The chairman of the board of directors of Canada Post maintains that the financial situation of the organization is not sustainable.
“The board of directors and senior management recognize that Canada Post is at a crucial turning point,” said André Hudon at Canada Post’s annual public meeting on Wednesday.
“Significant changes are urgently needed to preserve Canada Post’s delivery network, which is vital because it is the only delivery network designed to serve all Canadians.”
Hudon said the surge in online shopping during the COVID-19 pandemic has reshaped the parcel delivery market and Canada Post now finds itself competing with companies that rely on high technology and are evolving quickly at lower costs.
He stressed that the organization had already taken some steps to try to address these challenges, including suspending investments to focus on core priorities and reducing operating costs across the board.
Mr. Hudon says the company has worked hard to offer new services to make Canada Post more competitive in parcel delivery, as the e-commerce market is expected to double over the next decade.
President and CEO Doug Ettinger said postal mail, once Canada Post’s main source of revenue, is now in steady decline. In nearly 20 years, the number of letters has dropped from 5.5 billion a year to about 2 billion, he said.
More than 10 years ago, Canada Post pivoted to meet growing demand for parcel delivery, Ettinger said. But the Crown corporation has seen its market share halve since 2019.
“We’re doing our best to compete in this ever-changing market, but we’re doing it with an operating and delivery model that’s from another era,” he explained. Not to mention that Canada Post is the only one in this parcel market that doesn’t offer weekend delivery, the director admitted.
To be competitive, Canada Post needs more flexibility in its activities and investments, but also from a regulatory point of view, believes Mr. Ettinger.
Canada Post last week reported a pre-tax profit of $46 million for the second quarter, but dividend income from the sale of two subsidiaries helped offset what was a $269 million operating loss. Canada Post had reported an operating loss of $76 million in the first quarter of 2024.
Last January, Canada Post and Purolator Investments announced that they were divesting their shares in subsidiaries Groupe Sci and Innovapost. These transactions were concluded later this year.