Canada Post's financial situation unsustainable, at 'critical juncture' says chair
'Significant change is urgently needed to preserve Canada Post's delivery network, which is vital because it's the only delivery network built to serve all Canadians,' said Andre Hudon.
The chair of Canada Post’s board said during a meeting on Wednesday that the organization’s financial situation is unsustainable and that the service is at a “critical juncture.”
"Significant change is urgently needed to preserve Canada Post's delivery network, which is vital because it's the only delivery network built to serve all Canadians,” said Andre Hudon.
Hudon said that the increase in online shopping during Covid reshaped parcel deliveries, and that Canada Post is competing with "high-tech, low-cost operators who are rapidly and relentlessly evolving.”
He said the organization has taken some steps to address these issues, including pausing some investments to concentrate on core priorities and reducing costs.
CEO Doug Ettinger said that while letter mail used to be the primary source of revenue, over the last two decades the organization has gone down from sending 5.5 billion letters a year to about two billion.
For over a decade, the company shifted its focus to address the demand for parcel delivery.
"We are doing our very best to compete in this fast-paced parcel delivery market, but we're doing so with an operating and delivery model built for an older era," he said, reports the Canadian Press.
Canada Post is the only major player in its category that does not provide weekend delivery, which hinders its ability to compete, an executive has noted. To stay competitive, Canada Post requires greater flexibility in its operations and investments, along with more leeway from a regulatory perspective, said Ettinger.
In August, Canada Post reported a second-quarter pre-tax profit of $46 million, primarily due to a one-time sale of subsidiaries that helped offset an operational loss of $269 million. This marked a significant change from the $76 million loss before tax reported in the first quarter of the year.
Earlier this year, Canada Post and Purolator Holdings Inc. announced the sale of their stakes in Sci Group Inc. and Innovapost Inc., which closed earlier this year.
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