Canada Post looks like it's entering its angsty teen phase: confused, broke, and in the middle of a serious identity crisis.
Driving the news: A new federal report warned that Canada Post is effectively bankrupt and recommends that the Crown postal service phase out its daily door-to-door letter mail delivery to homes.
- The report recommends keeping daily delivery for businesses while moving residential addresses to a less frequent delivery schedule.
- The report comes just days before a May 22 contract deadline that could see ~55,000 postal workers walk off the job for the second time in six months.
Big picture: Even if it scraps daily door-to-door letter delivery, Canada Post is still struggling to compete with private couriers on parcel delivery — its biggest source of revenue.
- 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.
Why it matters: Canada Post is on track to lose $900 million this year, with that number expected to grow to $1.7 billion by 2029. The federal government will either need to provide subsidies to make up that shortfall or change the service’s business model.
What’s next: Canada Post’s precarious financial situation could weaken the postal workers’ union's position at the bargaining table this week. If a new deal isn’t reached, a strike could begin as early as Thursday.—LA