Canada Post reports $490M loss for 2021

Canada Post recorded a pre-tax loss of $490 million in 2021 as higher costs partially offset revenue growth across all lines of business, according to the Crown corporation.

The Canada Post segment’s loss improved from a pre-tax loss of $779 million in 2020, which saw widespread impacts and uncertainty surrounding the pandemic. That year, COVID-19 caused “significant” declines in direct marketing and transaction mail volumes while parcels volumes increased “to an unsustainable level, constrained by available capacity,” according to a statement from Canada Post.

Revenue for the Canada Post segment increased by $407 million (6.31 per cent) in 2021 compared to 2020. Parcels revenue grew as the postal service managed volumes to maximize available capacity and improve service. Transaction mail revenue slightly increased, owing in part to the 2021 federal election and census mailings, while direct marketing revenue and volumes began returning to pre-pandemic levels.

Canada Post’s cost of operations increased by $127 million (two per cent) in 2021 compared to 2020. Cost increases were largely driven by higher labour costs and a rise in non-labour collection, processing and delivery costs, according to the Crown corporation, which also invested in additional operational capacity to support e-commerce growth and modernize its retail network.

“Canada Post has a long-standing mandate to maintain financial self-sustainability while serving all Canadians,” reads a statement from the Crown corporation, whose 2021 annual report can be read in full here. “The pandemic has accelerated online shopping in Canada, rapidly changing the needs of Canadians and the importance they place on their postal service. With sustained and elevated demand for parcel delivery in all parts of the country, the Corporation is responding by investing to expand capacity, improve service and innovate its operations. Financial self-sustainability remains the Corporation’s medium- to long-term goal, while the immediate focus must be on the critical investments and improvements needed to meet the changing needs of Canadians and support businesses of all sizes.”

PARCELS

In 2021, parcels revenue increased by $238 million (7.4 per cent) while volumes fell by 28 million pieces (seven per cent) compared to 2020, when volumes had surged.

“The reopening of stores for in-person shopping also had an impact on domestic parcels volumes in the second half of 2021,” added the Canada Post statement. “While volumes declined from 2020, the Canada Post segment proactively managed available capacity and its mix of commercial customers and products, which positively affected revenue.”

Inbound parcels revenue and volumes declined in part due to limited air transportation capacity and global supply chain issues.

TRANSACTION MAIL

Transaction mail revenue grew by $10 million (0.8 per cent) as volumes fell by 62 million pieces (two per cent) compared to 2020.

“The 2021 revenue growth was atypical partly due to federal election and census mailings in 2021,” added the Canada Post statement. “Transaction Mail continues to erode as consumers and mailers migrate to digital alternatives. Due to COVID-19, the Corporation maintained regulated stamp prices at 2020 levels through 2021.”

DIRECT MARKETING

Direct marketing partially recovered in 2021, following significant declines in personalized mail and neighbourhood mail results in 2020, when customers postponed or cancelled marketing campaigns due to COVID-19.

In 2021, direct marketing revenue grew by $113 million (14.4 per cent) as volumes increased by 595 million pieces (18.4 per cent) compared to 2020. While some retailers experienced global supply chain issues in the second half of 2021, personalized mail and neighbourhood mail revenue and volumes began to recover in 2021 with the gradual return to in-person shopping.

ANNUAL MEETING

Canada Post will also hold its 17th annual public meeting via a live webcast on June 16 starting at 2 p.m. (ET).

The presenters will include:

  • Suromitra Sanatani, the chair of Canada Post’s board of directors;
  • Doug Ettinger, Canada Post’s president and CEO;
  • Jan Faryaszewski, Canada Post’s chief financial officer; and
  • Susan Margles, Canada Post’s chief people and safety officer.

They will provide an overview of the Crown corporation’s performance in 2021, and participants will have an opportunity to ask questions, which may be asked during the webcast or submitted in advance to corporateevents@canadapost.ca.

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