Canada Put up stated Friday its monetary state of affairs is so grim it may run out of working funds in lower than a yr, after the Crown company posted one other whopping pre-tax lack of $748 million in 2023.
In its annual report launched late Friday afternoon, the corporate predicts “bigger, unsustainable losses in future years” with out main modifications to its working mannequin.
“Even with Canada Put up’s not too long ago proposed stamp worth improve, the Company tasks that, with out extra borrowing and refinancing, it should fall beneath its required working and reserve money necessities by early 2025,” the report says.
Canada Put up has been shedding cash since 2018. Within the final six years, its losses have totalled $3 billion.
The company cites declining income from supply of letter mail and parcels, regardless of a rise within the quantity of packages the corporate is delivering.
Letter mail has been declining because it peaked in 2006. Canada Put up delivered lower than 2.2 billion letters in 2023.
The price of delivering mail and parcels is growing, the corporate stated. Canada Put up has struggled to compete post-pandemic with the rising variety of new, privately owned supply firms that use what it calls a “low-cost labour” enterprise mannequin.
“These rivals grew quickly, leaning on their low-cost-labour enterprise fashions that depend on contracted drivers to offer decrease costs, plus better comfort with night and weekend service,” the report stated.
Canada Put up tried to interrupt into the e-commerce market however its share “shortly eroded” from 62 per cent in 2019 to only 29 per cent, the corporate stated.
“Whereas we have reported on our declining monetary state of affairs for a number of years, the present aggressive panorama has shortly compounded our challenges, that are reaching a crucial level,” the report says.
About 200,000 new addresses are added in Canada yearly, including to the prices of supply, the corporate stated.
Earlier this yr, the corporate bought off its IT and logistics departments as a part of a change plan to save lots of the beleaguered nationwide mail service.
It additionally has spent closely on new processing capability for bundle supply, upgraded its services and tried to enhance customer support.
“Canada Put up is dedicated to main that change, constructing on the enhancements we have made throughout the group over the previous couple of years,” the corporate’s president Doug Ettinger stated in a information launch.
The Canadian Union of Postal Employees (CUPW), which represents 60,000 workers, didn’t reply to CBC’s request for remark.
