Canada Post at 'critical juncture,' financial situation unsustainable: board chair

"The board and senior management recognize that Canada Post is at a critical juncture," André Houdon said at its annual general meeting on Wednesday.

"Significant changes are urgently needed to preserve Canada Post's delivery network, which is critical because it is the only delivery network built to serve all Canadians," he added.

The rise of online shopping during the Covid-19 pandemic has changed the package delivery market, and Canada Post is competing with "high-tech, low-cost operators that are evolving rapidly and relentlessly," Houdon said.

He said the organization has taken steps to address these challenges, including halting some investments to focus on core priorities and cutting costs at all levels.

Hudon said the company is working hard to introduce new services to make Canada Post more competitive in parcel delivery as the e-commerce market is expected to double in the next decade.

Mail has always been Canada Post's main source of revenue, said Doug Ettinger, president and CEO.

But he said that over nearly two decades, the organization has gone from delivering 5.5 billion letters a year to about two billion.

More than a decade ago, the company shifted its focus to meet the growing demand for package delivery, he said.

The state-owned company's package delivery market share has halved since 2019, Ettinger said.

"We're trying to compete in this fast-paced package delivery market, but we're doing it with an operating and delivery model that's built for an old era," he said.

It doesn't help that Canada Post is the only competitor in the category that doesn't offer weekend delivery, he said.

To compete, Canada Post needs more flexibility in its operations and investments, as well as in terms of regulation, Ettinger said.

In August, Canada Post reported a second-quarter pretax profit of $46 million, as a one-time sale of subsidies helped offset an operating loss of $269 million.

This compares with a pre-tax loss of $76 million in the first quarter of the year.

In January, Canada Post and Purolator Holdings Inc. announced that they will sell their shares in the subsidiaries of Sci Group Inc. and Innovapost Inc. They hand over The deals were closed earlier this year.

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