Taking action
Canada Post’s core business is delivery. Like postal services around the world that are evolving their delivery approach to respond to changing customer needs, Canada Post must also change. We must evolve to be better equipped to stand on our own, while meeting the dynamic needs and expectations of Canadians.
The Corporation has acted decisively in recent years to confront the challenges of a changing Canada. While the postal service cannot solve everything on its own, it has taken important steps to be more competitive and deliver more for businesses in today’s ecommerce delivery market. We’ve invested in parcel delivery and carefully managed the postal service to ensure it’s here to serve all Canadians – how they want and need to be served – today and into the future.
Responding to the pandemic ecommerce boom
Prior to the COVID-19 pandemic, Canada Post had already shifted its business focus to parcels. We clearly saw that letter mail was continuing its decline and parcel deliveries continued to grow. We were the country’s ecommerce delivery leader, at one point profitably delivering two out of every three packages bought online.
When the pandemic arrived, ecommerce exploded and demand for parcel shipping rapidly accelerated. It was the new norm, and the company pivoted. We began a significant transformation to reposition the company and seize the ecommerce growth opportunity. To handle the significant and sustained growth in online shopping, the company made targeted, strategic investments in new processing capacity and facility upgrades across the network.
Transforming to meet the needs of a changing Canada
Our transformational investments allowed us to compete with global giants and new market entrants for ecommerce deliveries. These strategic investments enhanced service, increased processing capacity and upgraded technology – all while improving employee health and safety.
In the fall of 2023, we officially opened the Albert Jackson Processing Centre in northeastern Toronto. It is our largest, fastest and greenest parcel sorting plant and a critical hub for our entire national network. We also invested in new sorting equipment and upgraded facilities at other locations across the country.
In 2024, these investments helped improve service for Canadians and businesses by producing the best on-time parcel delivery results in the company’s history, while maintaining focus on our highest priority – employee safety.
Shifting focus to urgent priorities
For an organization like Canada Post, with national infrastructure and a large and complex network, a minimum level of investment is required to maintain operations. Canada Post’s strategic investments were crucial to be a player in the ecommerce delivery market, but our legacy models and structures continue to hold us back in a competitive delivery landscape. In 2024, as the company’s financial situation became more critical, many investments were paused or significantly scaled back.
We focused our investments during the year on essential priorities needed to deliver consistent service to Canadians, keep our people safe and avoid further market-share deterioration. We delayed planned investments in our processing network in Vancouver, Ottawa and other regions. We also paused spending on some customer experience projects and social and environmental initiatives, including deferring the purchase of additional electric vehicles and the associated infrastructure.
Preserving cash and managing costs
To help preserve cash and address the deteriorating financial situation, the Corporation has cut costs within its control and focused on operating more prudently. Measures in 2024 and the first quarter of 2025 included:
- Imposing strict limits on external hiring and expenses such as travel, consulting and contracted services.
- Cutting positions at management and executive levels.
- Improving productivity and adjusting staffing to volume wherever possible, by working with our unions and as allowed by our collective bargaining agreements.
- Continuing to focus on increasing revenue wherever possible.
We continue to look for efficiencies without impacting service. Our teams are always seeking new revenue opportunities connected to our core responsibility – delivering for all Canadians.
Postage rate increases
Canada Post has also taken steps to increase regulated postage rates to better align prices with the rising cost of providing letter mail service – but the process is lengthy and cumbersome. The Canada Post Corporation Act restricts Canada Post from increasing stamp prices without Governor-in-Council approval. It can take up to nine months from the date Canada Post proposes a price increase to when it takes effect. Also, under federal government policy, the Corporation cannot increase stamp prices higher than the rate of the consumer price index without Cabinet approval.
Every year, there are fewer letters to deliver to more addresses, which adds significant cost pressures to the Corporation on top of continued inflationary pressures. While rate increases are necessary, Canada Post understands that they mean additional costs for its customers and all users of the postal service. Where possible, the Corporation has worked to minimize the impact of price increases.
In February 2024 and again in September 2024, Canada Post published in the Canada Gazette proposed increases to postage rates that were later approved by the Governor in Council. The approved rates increased postage prices by about 7.5 per cent in May 2024 and about 25 per cent in January 2025. Today, the price is $1.24 per stamp for those purchased in a booklet, coil or pane, which is how most stamps are sold.
These two rate increases provide important additional annual revenue from the Corporation’s regulated and non-regulated postal products, and they will help mitigate the impact of declining Transaction Mail revenue. Despite these increases, Canada Post’s exclusive privilege to deliver letters does not generate enough revenue to cover the increasing cost of providing postal services to all Canadians.
Strategic divestitures
In 2024, as part of its efforts to focus on providing a modern postal service, Canada Post divested 100 per cent of the shares of two subsidiaries and continued to transform its outdated information technology (IT) systems and capabilities.
In March 2024, the Corporation completed the divestiture of SCI Group Inc., a leading Canadian third-party logistics provider. Innovapost Inc., its IT shared-service provider, was divested in April 2024 to a strategic partner that provides IT services to Canada Post. As part of the Innovapost divestiture, the Corporation brought strategic IT capabilities in-house to deliver new digital products and services to customers faster.
These transactions have allowed Canada Post to focus its resources on better serving Canadians and helped position the company for growth in the ecommerce market. While the one-time divestitures were important to provide needed cash and cost savings, they did not come close to offsetting the company’s 2024 financial loss or deteriorating liquidity position.