WOW! Feds BAIL OUT Canada Post after lengthy strike

Canada Post last turned a profit in 2017. Subsequent losses to 2023, the most recent available data, totalled $3 billion.

Taxpayers are bailing out another Crown Corporation amid continued financial struggles. Canada Post, whose 55,000 workers went on strike last year, have gone radio silent following the handout.

Public Services and Procurement Canada says the postal service will receive a $1.034 billion loan over time to cover non-discretionary obligations through the 2025/26 fiscal year. It has not reported a profit since 2017.

“Providing this cash injection will prevent insolvency and ensure the continuity of postal services,” reads a statement from the federal government.

The federal department made clear the bridge financing comes with the expectation that the corporation “be put on a path to viability.”

Canada Post has incurred significant annual losses since 2018 “fuelled by rapid changes in the postal and parcel delivery sectors, high labour costs and legacy regulatory measures.”

It recorded a wider net loss of $210 million for the third fiscal quarter, over the same period one year ago, though it has $500 million in bonds that will mature this July.

The postal service also raised the price per stamp this month to no avail. 

The repayable loan will not solve its ongoing structural issues either, reported the Canadian Press.

The lifeline followed a 32-day strike by frontline workers until Labor Minister Steven MacKinnon intervened to grant reprieve from the contractual dispute. Workers previously rejected a 5% pay increase.

He ordered staff back to work last month under section 107 of the Labour Code, forcing the current collective bargaining agreement to remain in place until May 22.

A similar mail stoppage in 2018 went on for 35 days, prompting the passage of back-to-work legislation. Rotating strikes at the time cost the Crown corporation $110 million. 

Canada Post last turned a profit in 2017, reported Blacklock’s. Subsequent losses to 2023, the most recent available data, totalled $3 billion. 

The cash injection is the latest setback at Canada Post, who like other taxpayer-funded mail carriers, has struggled financially amid stiff competition and alternative delivery methods, including email.

The work stoppage did not help either, delaying deliveries of some 190,000 passports and 1.65 million tax notices from the CRA, Blacklock’s learned.

The mail carrier says it is committed to major structural changes to secure a sustainable financial model, according to a press release.

Without changes to its operating model, Canada Post forecasts larger, more unsustainable losses in future years. It delivered almost 5.5 billion letters in 2006, falling to roughly more than 2.2 billion in 2023.

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Alex Dhaliwal

Calgary Based Journalist

Alex Dhaliwal is a Political Science graduate from the University of Calgary. He has actively written on relevant Canadian issues with several prominent interviews under his belt.

COMMENTS

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  • Bruce Atchison
    commented 2025-01-27 18:36:40 -0500
    It’s time Canada Post operated like a business. It’s not the pre-Internet age anymore. And unions have ruined Canada Post with their tactic of striking for outrageous wages and benefits.