Canada Post takes $748M loss in 2023; mail delivery drops 5%

In 2023, Canada Post recorded a pre-tax loss of $748 million, attributed to a post-pandemic increase in parcel delivery competition, a continuing decline in transaction mail to Canadian households and businesses,  and the rising costs associated with an increasing number of delivery addresses.

The organization says it has faced unprecedented challenges recently. Notably, its market share in parcel delivery plummeted from 62 per cent before the pandemic to 29 per cent in 2023. At the same time, the Crown corporation said the volume and revenue from transaction mail have steadily declined; Canadian households received an average of seven letters per week in 2006, compared to just two in 2023. These trends, combined with servicing more addresses, have intensified financial pressures on the corporation.

Canada Post said revenues dropped by $240 million, or 3.3 per cent, from the previous year, with losses spanning all business areas—parcels, transaction mail, and direct marketing. The loss before tax in 2023 was $200 million more severe than in 2022. Operational costs in 2023 edged up by $11 million or 0.1 per cent, largely driven by increased labor, investment, and depreciation expenses, although this was partially offset by lower costs in employee benefits due to higher discount rates.

According to the Canada Post Corporation Act, the service is required to be financially self-sustaining through the revenue from its postal products and services, without relying on taxpayer dollars.

Yet, with the changing habits of Canadians, who are living differently and shopping more online, Canada Post said it must adapt to remain relevant and viable. Despite expanding its parcel capacity and enhancing services since 2019, the growth in this sector has not offset the significant declines in mail volume and revenue. Canada Post also noted the heightened competition in parcel delivery presents new and significant challenges that the corporation must address to ensure the sustainability of the national postal service.

Without changes to better align with the current needs of Canadians, Canada Post anticipates facing larger, unsustainable losses in the years ahead.

Doug Ettinger, president and CEO of Canada Post, commented, “Canadians understand our business model must change. They can see it in their mailbox. An operating model designed to deliver nearly 5.5 billion letters in 2006 cannot be sustained on the 2.2 billion letters we delivered last year. This trend is not unique to Canada. Like other businesses, we need to adapt to what Canadians need, where they live, how they shop and use our services. Canada Post is committed to leading that change, building on the improvements we’ve made across the organization over the last few years. Canadians still value the importance of their national postal service, which is why we’re working in partnership with the Government of Canada to put it back on the path to long-term financial sustainability.”

In 2023, revenue from regular mail delivery to Canadian households and businesses dropped by $126 million, a decrease of 5.2 per cent, as the volume of mail fell by 117 million pieces, or five per cent compared to 2022. Canada Post said the decline was primarily due to consumers and mailers increasingly opting for digital alternatives. Throughout 2023, regulated stamp prices were maintained at 2020 levels. In April 2024, Canada Post received approval from the Governor in Council to raise its regulated postage rates, which came into effect on May 6, 2024.

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