Canada’s postal service is teetering on oblivion. Losing hundreds of millions per year, Canada Post – if unchanged – will go the way of Hudson’s Bay. The Crown corporation responsible for mail delivery is at a crossroads, and the next months will determine if the service will change and survive or become another relic of an extinct time.
Canada Post is mandated to provide services everywhere in Canada and maintain a set level of service. But the company is broke and continues to lose money. The battle between the union and Crown corporation is about to return to strike action after a six-month pause.
Attempts to modify service by ending individual delivery for community mailboxes saw public opposition and a politically-motivated moratorium. It has contributed to the company’s unsustainable financial situation.
Mail delivery is down, not just in Canada but around the world. Package delivery is up, but every company is losing money – private or publicly-owned. Companies such as Amazon have their own delivery services which undercut the rates of Canada Post, Purolater (also owned by Canada Post), UPS, FedEx and the like.
Hampered by the operational constraints, Canada Post finds itself in a Catch-22 situation: unable to cut costs like private competitors, it needs to cave to union demands for job security and higher wages, which will further exacerbate its financial woes and require a government bailout, or they must undertake restructuring and risk a drawn-out and damaging labour dispute.
Anytime a government provides a service, regardless of what level of government it is, there is always someone in the crowd who will argue that the service must break even. This way, taxpayers are not footing any bills or subsidies to others. This stems from the notion that all services should operate on a zero-sum basis. Having tax money going to pay for things you personally do not benefit from is considered offensive. Our education and health care systems do not operate this way. But mail is more of a utility, like our water and electrical systems. Those are supposed to operate as zero-sum systems, but do not. Municipal and provincial electrical utilities declare profits and dividends most years, and water/wastewater utilities purposely increase rates to build savings and reserves for projects, costing users more. We know a zero-sum postal service already doesn’t work. Does that mean a subsidized service is necessarily bad?
Some critics of Canada’s existing postal system argue that the Crown corporation should be privatized as a way to save it. Western-based think-tank the Fraser Institute argued for this, pointing to a number of European countries which have some form of privatization and deregulation involved with mail delivery. In some countries, this has worked. Those countries have larger populations in proportion to a smaller land area served. Canada does not fit the mould. Germany has a privatized postal service. But that country is one-third the size of British Columbia. Canada has less than half (39.7 million) the population of Germany (83.2 million). Would a privatized post office system work in Canada? Not likely.
Something has to change with our postal system. Privatization won’t work, and the status quo won’t either. A protracted strike will not help any Canadian, and job cuts will not help any of 72,000 employees at Canada Post. The Catch-22.
To fix the system, to make it somewhat viable, and to keep postal service available for all Canadians – there are going to have to be changes. Ending the moratorium on community post boxes should lead that. Many communities do not have door-to-door delivery, and haven’t for many decades. Some job reductions will have to happen, and even the closing of some post offices, or leasing space for smaller facilities in communities – essentially things that are already done by Canada Post.
For workers who lose their jobs, there should be retraining or even opportunities for those skilled workers elsewhere in the government service. Simple layoffs and Employment Insurance are not enough.
In the changes, there are opportunities for growth. However, Post Offices in many communities are hubs for people. In changing the postal system, innovation may lead to growth. Canada ended its postal bank operations in the late 1960s. Bring those back or partner with existing banks to consolidate branches and post offices, and in communities with high shipping volumes, expand shipping services to help customers more. In high-traffic areas, expand retail operations. There are many ways that the postal service can grow, using the money from growth to subsidize actual mail delivery, while keeping a public service operating as close to profitability as possible.
Canada Post is indeed at a crossroads, and the next few months will determine the fate of a 160-year system in Canada. Hopefully all parties involved will help steer the organization into the future, and not to the dustbin of history.
This column was originally published in the May 21, 2025 print edition of The Morrisburg Leader.
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