Canada Post gets $1B lifeline as it deals with ‘significant financial challenges’

Canada Post will get a $1 billion infusion of funding from the federal government as it deals with what it calls “significant financial challenges.”

Canada Post says significant change is “urgently needed” to modernize its operating model and preserve the national postal service for all including small businesses, charities and those living in rural and remote communities. It says without this short-term financing measure, the company would completely deplete its cash reserves by the second quarter of 2025.

“This approach will maintain the continuity of Canada Post’s operations but will not solve the Corporation’s structural issues. It will, however, provide a temporary financial bridge while Canada Post and the government work together on a plan to secure the long-term viability of a service that millions of Canadians consider essential,” Canada Post said in a statement.

Canada Post says it has lost $3.3 billion since 2018 citing a decline in letter mail and increased competition in the parcel delivery market.

A month-long strike by 55,000 postal workers last December highlighted the issues plaguing the 157-year-old institution and ended without a contract resolution after the Canada Industrial Relations Board ordered workers back to work.

The federal government appointed an industrial inquiry commission to assess the structure and business model of the 157-year-old institution. Those recommendations are due by May 15.

The money-losing Crown corporation has pitched the expansion of weekend delivery as a way to boost revenue and compete with other carriers, arguing that a mix of part-time and full-time shifts will create flexibility while keeping costs down. However, the union has characterized this as an attack on full-time work.