Canada Post says the federal government is providing it with a lifeline to help the Crown corporation continue operating as it “deals with significant financial challenges.”
The corporation said Friday that Ottawa plans to make repayable funding of up to $1.034 billion available for its 2025-26 fiscal year.
Canada Post’s incoming funding comes just two months after it reported steep financial losses in its third quarter, with the national postal service reporting a loss before tax of $315 million amid a decline in parcel revenue and volumes.
That quarter’s revenue from parcels had dipped 5.8 per cent and volumes declined by six million pieces, or 9.6 per cent compared to the previous year.
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According to the news release announcing the funding, the corporation said it would help operations continue but would not help in its structural issues.
“It will, however, provide a temporary financial bridge while Canada Post and the government work together on a plan to secure the long-term viability of a service that millions of Canadians consider essential,” the release reads.
The financing also comes a month after a strike by Canada Post workers came to an end when the Canada Industrial Relations Board (CIRB) ordered workers back on the job after a request by Labour Minister Steven MacKinnon.
Since 2018, the corporation has recorded annual losses that it says are fuelled by the changes in postal and parcel delivery sectors, labour costs and “legacy regulatory measures” that it claims prevents it from evolving and competing with other companies.
It says it has had to tap into cash reserves in recent years to address the rising costs.
It added its 2023 annual report also showed that without the financing measure announced Friday, the company would completely deplete its cash reserves by the second quarter of 2025.
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