Facing an "existential crisis," the federal government is directing Canada Post to modernize to stabilize finances.
Government Transformation Minister Joël Lightbound announced in Ottawa Thursday (Sept. 25) three directives to stabilize Canada Post's finances. Those include letter mail delivery standards, community mailbox conversions and postal network modernization.
Lightbound, the minister responsible for Canada Post, said the Crown corporation is facing an "existential crisis."
He said the Crown corporation is losing about $10 million every day.
Earlier this year, the federal government provided $1 billion to keep the corporation going.
"However, repeated bailouts from the federal government are not the solution."
Since 2018, Canada Post has accumulated more than $5 billion in losses. In 2024 alone, according to the federal government, Canada Post lost more than $1 billion and it's already on track to lose close to $1.5 billion in 2025.
It also posted its worst quarterly results ever, losing $407 million in the second quarter of 2025.
Government directing changes
In May, the Industrial Inquiry Commission publicly released its final report to Canada Post and the Canadian Union of Postal Workers after hearings held earlier this year into the issues facing Canada Post and the union.
The report recommended ending residential door-to-door delivery, but maintaining daily business delivery, among other recommendations.
Lightbound said Thursday the federal government was accepting all of the recommendations from the May report.
The federal government will be lifting the moratorium on community mailbox conversions, meaning Canada Post will now have to convert the remaining four million addresses to community mailboxes. The government promises it will generate close to $400 million in annual savings.
"It's an expensive service ... Delivering mail to an individual address costs the corporation $279 a year, whereas delivering mail to a community mailbox costs $157 a year."
Currently, about three-quarters of Canadians already receive mail through community, apartment or rural mailboxes.
The moratorium on rural post offices will also be lifted. That's been in place since 1994, covering close to 4,000 locations.
"(The moratorium) has not evolved in 30 years, but Canada has changed. This means that areas that used to be rural may now be suburban or even urban," Lightbound said. "It also means that multiple post offices operating near each other including some just a few hundred metres apart are required to stay open because of the moratorium."
Canada Post has also been directed to move non-urgent mail by ground instead of by air for a savings of more than $20 million per year. The release from the federal government said the average household now receives just two letters per week, but operations remain designed for far higher volumes.
May report recommendations
Industrial Inquiry Commissioner William Kaplan was tasked with examining the current collective bargaining dispute and the positions of Canada Post and the union, specifically looking at: the financial situation of Canada Post, the company's need to diversify or alter its delivery models, the union's negotiated commitments to job security and full-time employment and the need to protect the health and safety of employees.
The report notes that Canada Post is facing an existential crisis and is "effectively insolvent, or bankrupt." The union attributed the financial situation to bad business decisions by Canada Post, but Kaplan didn't fully agree.
He said the reasons are easy to identify: a decline in letter mail as more people chose electronic versions; parcel mail now mostly delivered by competitors; collective agreement work rules that restricted Canada Post from exercising basic management rights such as assigning existing employees additional work when they have finished their assigned tasks; and moratoriums on closing rural post offices and ending community mailbox conversions.
Ongoing labour negotiations
The news comes as Canada Post and the Canadian Union of Postal Workers are in the middle of contract negotiations.
In a statement online, the union said it had not been made aware of Thursday's news conference ahead of time, despite meeting with the minister the week prior.
Lightbound, however, said that some of the issues raised in that meeting were addressed in his announcement, specifically around reviewing the management structure.
The latest from the union called for 19 per cent increase to wages over four years, compared to Canada Post's offer of 13 per cent.
Then on Sept. 19, workers stopped delivering flyers as contract negotiations remained at a standstill.
