This crisis is a question that canadasmodernpost has been tracking since 2010. There are five reasons that Canada Post has been in a financial precarious state since 2008.
1. An Ill-Fated Business Decision
The financial consequences of a poorly-planned and implemented postal transformation in 2008 have returned to haunt them. Today’s crisis is a masking of an old wound resurfacing. The crisis began in the boardroom in 2006 under the reign of Moya Greene, the former leader of Canada Post.
It was a time when they had a choice of modernizing or downsizing. Canada Post owned most of its buildings, and the majority of points of call were delivered by foot. Therefore, infrastructure costs were low. They had 18,000 employees retiring in the next 10 years(1) and could easily reduce their workforce through attrition. They were in a perfect position to downsize.
They chose to modernize, which has cost the company billions, and that is where Canada Post’s spiral began.
The transformation model was to improve efficiency and create a bigger footprint in the parcel world.
The business plan did not consider that lettermail volumes decreased 6% yearly. This website, among other entities in 2010 called into question this business plan.(2) The company anticipated continued profits from lettermail to fund the transformation, but the 2008 international economic crisis upended everything and the downturn denied them this anticipated money. They were in a financial crisis, and a state of insolvency had the Government not stepped in and found alternate sources, such as larger lines of credit.(3) Canada Post was also allowed to issue bonds to support its operations and continue its transformation. $500 million dollars worth of bonds purchased during this period are due July 2025.(4) – money they do not have, which forced the Federal Government to recently loan them a billion dollars in 2025.(5) There are more lines of credit and debts(6) that have not been sufficiently researched for inclusion here which may exacerbate the problem even more.
The cost of vehicles, gas, and new buildings and their leases increased their expenses exponentially.
2. The Delivery Algorithm is Killing the Post Office.
Canada Post has lost over a billion dollars because its delivery algorithm over the course of many years. The software that calculates an eight-hour delivery route is unreliable.(7) It can be off by 50% or more. This software calculation has caused some workers to work too little, some too much, injuries on duty, suspensions, wrongful dismissals, and more.
The public minimizes such a problem, but in some circumstances, such as Canada Post, it can cause a large corporation to dwindle. For example, poor software implementation was the reason behind Target stores leaving Canada.
Canada Post sees and operates through the algorithm. No one is allowed to question it. If there is an aberration or problem, it is not considered the software’s fault. It is usually pinned on the employee for failure, or it is the responsibility of the supervisor to make sure all the checks and balances of the algorithm have been fulfilled.
This attitude is a primary cause of tension and mistrust between employees, management, and the Union.
3. Canada Post is Legislated to Lose Money.
Canada Post is legally required to deliver to every point of call in Canada at the same price. The name of this policy is the Universal Service Obligation (USO). In 2013, it was estimated that adhering to this policy would cost Canada Post $375 million(8). In 2025, it will likely be closer to $600 million. Canada Post is legislated to lose money and try to recover the costs in other areas. The USO should be calculated and demonstrated in their financial reports. It is bizarre that it is not included even though it is a central component of the corporation’s existence.
4. The Rise and Dominance of Amazon.
Amazon is a massive enterprise that sells and delivers its products promptly. Last year alone, Amazon’s revenues were C$909.47 Billion, almost double the 2024 Canadian Federal Government’s budget of $449.2 billion(9). This makes Canada Post’s yearly revenue of $10 billion dollars insignificant.(10)
Before Amazon built its own distribution and delivery network in Canada, Canada Post was one of its primary sources for delivery.
After the introduction of Amazon’s internal service, Canada Post’s market share for parcels dropped from 62% to 29%.(11) This is another low point in Canada Post’s revenue history. It is highly doubtful that Canada Post can ever be a significant player in the parcel market or recover from this. Because of Amazon’s dominance, parcel delivery is not a solution to fix Canada Post’s woes.
Canada Post cannot compete with Amazon. Nor can UPS, FedEx or the like. These companies are also facing a similar problem.(12)
5. The Failure of the Union and Canada Post to Work Together
The animosity between the two sides is so great that the defeat of the other is greater than the corporation’s mission. The hatred between management and employees may kill the company just as much as the poor business plan has already done.(13)
These five factors are the reasons why Canada Post is on the brink of a cliff and the need to actively find a new path for self-preservation. Hopefully, it is not too late.
(1) I remember reading this somewhere years ago. I cannot find the citation in my archives but believe this number to be accurate.
(2) “Why is Canada Post spending so much money on new buildings and infrastructure when mail volumes are declining? If Canada Post was publicly traded, would investors infuse 2 billion dollars for a sales base forecasted on declining volumes or would they just want management to “sharpen the saw” with the least capital possible?” https://canadasmodernpost.wordpress.com/2011/02/10/important-questions-on-postal-transformation/
(3) “The modernization plan developed around 2006 had spiralled out of control. By 2008 over $2 billion in debt along with a quickly rising pension solvency problem initially put the company well over the $4 billion mark in monies owing. This is not good news for a company that generates around $6.3 billion every year.” https://canadasmodernpost.wordpress.com/2016/06/27/the-canada-post-pension-plan-the-elephant-in-the-room/ See also Canada Post’s Rising Debt load https://canadasmodernpost.wordpress.com/2011/08/01/canada-posts-rising-debt-load/
(6) https://www.lexpert.ca/big-deals/canada-post-closes-1b-debt-issue-and-400m-credit-facility/347126
(7) https://canadasmodernpost.wordpress.com/2025/05/17/kaplans-oversight-on-the-future-of-canada-post/
(8) There is no real documentation on this and I have previously done hypothetical calculations. The estimate is only a probability, not a hard fact. https://canadasmodernpost.wordpress.com/2013/10/09/canada-post-and-the-universal-service-obligation/
(10) based on the 2022 stats. https://www.statista.com/statistics/727105/total-revenue-of-canada-post/
(11) https://financialpost.com/news/canada-posts-pain-helping-alternative-delivery-services-gain
(13) I am an employee at Canada Post, and have a bias with this point and will leave the reader to fill in the blanks.