Crown corporation reports $104 million loss in second quarter
The national mail delivery service is up against a serious financial fiasco, according to its latest report.
Canada Post revealed a $104 million loss during the second quarter on Aug. 27, likely due to a 6.3 per cent drop in mail volumes. The crown corporation chalked that up to a rapid shift toward digital communications. Should the situation progress, Canada Post predicts a financial loss of almost $1 billion by 2020, based on numbers in an independent study, The Future of Postal Service in Canada.
For now, the company said its current business model can’t sustain its operations. One major hurdle remains its mounting pension obligations, which will reportedly set the crown corporation back at least $1.1 billion in 2014, according to the company.
However, the Canadian Union of Postal Workers (CUPW) argued that while the letter mail slump is certainly real, it is often exaggerated.
“Even once we find a solution for the pension fund, we still need to work out how Canada Post's operations can remain self-sustaining in the long run," said Denis Lemelin, national president of the CUPW. "That will take imagination and input from all stakeholders, including the public and postal workers. It's time Canada Post took our suggestions seriously.”
He suggested the solution lies in service expansion, citing an increase in parcel post delivery and banking operations at post offices as examples.
Even Canada Post recognized service changes might help mitigate its impending doom. That includes securing changes to its collective agreements to reduce labour costs, automating mail sorting, having one delivery agent perform numerous roles and revamping online services to meet demands.
Earlier this month, the C.D. Howe Institute published a report suggesting privatization would fix Canada Post’s future of financial loss, delivery decline, and costly services.