Canada Post blames pay equity for $242-million second-quarter loss

Estimated costs related to pay equity for RSMC employees ‘a major factor in results,’ Crown corporation says

Canada Post recorded a loss before tax of $242 million for the second quarter of 2018, “mainly in recognition of estimated costs associated with adjusting how delivery employees in suburban and rural Canada (RSMC) are paid,” claimed the Crown corporation in a statement issued this week.

In 2016, Canada Post and the Canadian Union of Postal Workers put before an arbitrator the system by which RSMC employees are paid.

A ruling issued on May 31 gave the parties helpful guidance on several aspects and 90 days to reach an agreement. A mediation process is under way to reach a negotiated settlement. Once the process is completed, the Crown corporation will be in a position to disclose the financial impact of the settlement, which “may differ significantly from the estimates recognized in this quarter,” reads the Canada Post statement.

The Canada Post segment’s $242-million loss compares to a $27-million profit before tax in the second quarter of 2017.

For the first two quarters of 2018, Canada Post is reporting a loss before tax of $172 million, compared to a profit before tax of $77 million for the same period last year.

PARCELS RESULTS

In the second quarter, Canada Post remained the country’s leading parcel delivery company and has grown its parcels revenue year over year in 24 of the last 25 quarters.

Parcels revenue increased by $106 million or 19.6 per cent in the second quarter compared to the same period last year, and volumes increased by 13 million pieces or 24.1 per cent. Revenue in domestic parcels—the largest product category—also continued to grow, increasing by $81 million or 20.5 per cent. In the first two quarters of 2018, parcels revenue increased by $216 million or 22.1 per cent and volumes rose by 30 million pieces or 28.5 per cent, compared to the same period in 2017. Revenue for domestic parcels in that period increased by $157 million or 22 per cent and volumes by 12 million pieces or 15.9 per cent, compared to the first two quarters of 2017.

TRANSACTION MAIL RESULTS

Volumes of transaction mail, which is mostly letters, bills and statements, fell by 34 million pieces or 5.9 per cent in the second quarter and revenue fell by $33 million or six per cent, compared to the second quarter of 2017. In the first two quarters of 2018, transaction mail volumes decreased by 84 million pieces or five per cent and revenue by $79 million or 5.1 per cent, compared to the same period in 2017.

“The ongoing decline in mail volumes, due to the use of digital alternatives, remains a significant challenge for the Corporation,” reads Canada Post’s statement.

For more information about Canada Post’s second-quarter financial report, click here.

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