Canada Post to Reduce Mail Frequency, Restructure to Address ‘Existential Crisis’: Minister

A Canada Post delivery truck leaves a depot in Montreal on Nov. 4, 2024. THE CANADIAN PRESS/Christinne Muschi

Major changes are on the horizon for Canada Post, which has been deemed “insolvent” and is currently losing approximately $10 million per day, Ottawa says.

The federal government will direct Canada Post to transition from door-to-door delivery to community mailboxes for 4 million additional addresses, Minister of Government Transformation, Public Works and Procurement Joël Lightbound said during a Sept. 25 press conference.

The Crown agency will also being asked to restructure rural deliveries and shift non-urgent mail from air to ground, Lightbound said, which he projects to raise delivery times from three or four days to up to seven days for non-urgent mail.

Lightbound stated that the Crown corporation has 45 days to develop a plan for carrying out the extensive restructuring, which he described as essential for ensuring the survival of Canada Post.

“Canada Post is facing an existential crisis. We need to respond,” he said. “I know that Canadians care about the future of Canada Post.”

The agency is on track to lose $1.5 billion in 2025. It announced a pre-tax loss of $407 million for the second quarter of this year in an August statement.

Canada Post racked up roughly $5 billion in losses between 2018 and 2025, while last year, Canada post operated at a $1.3 billion loss and was given a $1 billion funding injection from Ottawa in January of 2025. The agency said its losses have been driven largely by a sharp decline in parcel revenues.

Canada Post delivered approximately 5.5 billion letters per year in 2005, whereas current rates sit around 2 billion annually, Lightbound said. The postal service delivered 62 percent of all parcels in the country in 2019, but as of this year that share has fallen to less than 24 percent, he said.

Ottawa plans to address the loss by adopting all recommendations issued by the Industrial Inquiry Commission led by William Kaplan in a May 15 report, which reviewed Canada Post’s financial crisis and made recommendations to improve its fiscal situation, Lightbound said.

Along with the switch to community mailboxes for 4 million additional addresses and developing dynamic routes to accommodate daily variations in mail volume, a more straightforward process for increasing stamp rates will be implemented, Lightbound said.

He also announced the government will lift a 1994 moratorium on closing roughly 4,000 post offices that were once located in rural regions but have now transitioned to suburban areas as communities expand. He said that remote and indigenous communities will continue to have access to post offices despite the moratorium being lifted.

Ottawa will also instruct Canada Post to employ part-time workers to meet the demand for weekend and additional weekday deliveries resulting from high volume. These workers will be given with the same pay and benefits proportional to full-time employees.

The changes are expected to generate nearly half a billion dollars in annual savings, helping ensure Canada Post’s long-term survival, the minister said.

“We can’t go on with Canada Post losing $10 million a day and Canadian taxpayers footing the bill,” Lightbound said.

The Canadian Union of Postal Workers (CUPW) has previously said it opposes many of Kaplan’s recommendations.

“Commissioner Kaplan’s report of the Industrial Inquiry Commission skews heavily in favour of Canada Post’s positions and recommendations,” the union wrote in a May 16 statement. “We fundamentally disagree with the bulk of its recommendations and challenge some of the information on which it was based.”

The union said Kaplan’s recommendations “amount to service cuts,” and that Canada Post has no action plan to increase its share of parcel service.

“The report categorically rejected our ideas for service expansion as an immediate solution to Canada Post’s financial issue – despite the proven success at revenue generation for many major post offices around the world,” CUPW said in a May 25 statement.

Canada Post said it supports the changes announced by Lightbound.

“Today’s announcement will allow us to make the changes needed to restore Canada’s postal service for all Canadians by evolving to better meet their needs,” Canada Post president and CEO Doug Ettinger wrote in a Sept. 25 statement provided to The Epoch Times. “We take this responsibility seriously and will work closely with the government and our employees to move with urgency and implement the necessary changes in a thoughtful manner.”

“Our goal is to ensure that a strong, affordable, Canadian-made, Canadian-run delivery provider supports the needs of today’s economy and delivers to every community across the country,” he added.

Meanwhile, labour negotiations between CUPW and Canada Post remain stalled. The union has rejected the government’s offer of a 13 percent wage increase and instead demanded 19 percent. Talks have stalled over issues including weekend delivery, part-time roles, and flyer distribution.

Lightbound said both sides should keep working to resolve any issues possible, starting with smaller disagreements.