In a major announcement on Thursday, Canada revealed its directive to the struggling national postal service: end door-to-door mail delivery. This decision, alongside the closure of some rural post offices and operational consolidation, comes as severe financial losses threaten the very existence of Canada Post.
Canada Post, a Crown corporation, has accumulated more than 5 billion Canadian dollars (approximately $3.6 billion USD) in losses since 2018. This dire financial situation is largely attributed to a sharp decline in traditional letter mail usage, a deficit the service has been unable to offset through its parcel delivery operations, an intensely competitive sector.
“Canada Post is effectively insolvent, and it is facing an existential crisis,” stated Joël Lightbound, Canada’s Minister for Public Services, during a news conference on Thursday.
The government anticipates that these aggressive cost-cutting measures will stabilize Canada Post’s finances after numerous bailouts. However, they are also expected to lead to substantial job reductions among the postal service’s 68,000 employees.
Doug Ettinger, Canada Post’s chief executive, issued a statement saying, “Today’s announcement will allow us to make the changes needed to restore Canada’s postal service for all Canadians by evolving to better meet their needs.”
Door-to-door mail delivery has gradually become less common across Canada, with only about 25 percent of the population still receiving mail directly at their homes. The majority of Canadians already collect their mail from individual boxes located within community mailboxes or apartment complexes.
Despite this trend, the complete elimination of remaining door-to-door service will impact approximately four million addresses, according to government figures.
“The data was screaming at us that Canada Post was desperate to be reorganized and restructured,” commented Ian Lee, a business professor at Carleton University in Ottawa, who has extensively studied the postal service.
The move to end door-to-door delivery was previously underway until Justin Trudeau, then prime minister, halted it as a key promise during his successful 2015 election campaign. One of his initial actions in office was to instruct the post office to cease its transition to community mailboxes.
However, since then, the volume of letter mail has plummeted, a trend significantly accelerated during and after the Covid-19 pandemic.
While a June poll by Angus Reid Institute, a non-profit polling firm, indicated that Canadians generally do not favor completely ending door-to-door delivery, they show greater support for operational changes and service reductions given the postal service’s precarious financial state compared to previous years.
“The political decision is that we can’t, Canadians can’t, be footing an ever-growing bill year after year,” Mr. Lightbound explained.
A precise date for the cessation of at-home mail delivery has not been finalized, but officials confirmed that the changes would be implemented gradually.
Other measures to be introduced include transitioning certain mail transportation from air to ground to reduce costs. Additionally, the government has lifted a ban on closing rural post offices, a policy that was initially enacted in 1994 and was also a source of political contention at the time.
Canada Post is currently engaged in contract negotiations with the union representing its postal workers, negotiations that led to a strike earlier this year. The union was expected to present its latest offer on Friday.
The union has not yet provided a comment regarding these recent developments.
Stephanie Ross, a professor of labor studies at McMaster University in Hamilton, Ontario, suggested that another worker walkout is now probable. “What leverage the union had at the bargaining table has now been significantly undermined,” she stated. “I can’t imagine how angry people are.”