Canada Post projects it will lose $900 million this year, with losses expected to balloon to $1.7 billion by 2029. What’s a national postal service to do?
Driving the news: Canada Post is asking the federal government for funding as it projects cash reserves will run out within the next few months. This request is seen as a last-resort measure and a sign that Canada Post needs a complete overhaul.
Here’s what that could look like… According to researcher Ian Lee, a smart option is downsizing and shifting its focus from letter delivery to parcel delivery — including groceries and pharmaceuticals — in areas underserved by private couriers.
- Parcels are Canada Post’s biggest source of revenue, but servicing urban areas doesn’t make sense, as they are well-covered by private companies with cheaper operations.
- Lee found that it costs Canada Post $60 to $65 per hour to operate as a parcel courier, compared to $40 to $45 for private couriers, and just $25 for gig contractors.
Zoom out: Others have suggested privatizing Canada Post, as was done with postal services in the U.K. and Germany (though it’s unclear who would buy it). Meanwhile, postal workers have argued for reintroducing postal banking services and adding EV charging stations at underused post offices.—QH