Ottawa has given more than $1 billion to Canada Post to help the company stay afloat while it deals with financial struggles.
The money, a total of $1.034 billion through the 2025–26 fiscal year, is to be paid back, according to Canada Post.
“This short-term financing liability, which is within the regulations of the Canada Post Corporation Act, is designed to ensure the Corporation can maintain its solvency and continue operating as it deals with significant financial challenges,” Canada Post said in a press release.
The money will be provided on an as-needed basis, according to Public Services and Procurement Canada. It said funds will be made available for non-discretionary obligations.
However, Canada Post said the money would not “solve the Corporation’s structural issues” but would provide a “temporary financial bridge” while it works with Ottawa on a plan for the long term.
“Canada Post is committed to working with the government to bring about the major changes needed to serve the changing delivery needs of the country and return to financial self-sustainability,” the corporation said.
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The corporation has lost a total of $3 billion since 2018, including $490 million in the first half of 2024.
Canada Post says changes in delivery sector, as well as regulatory measures, are some of the reasons it has not been able to become more competitive.
In its 2023 annual report, Canada Post said that without “additional borrowing and refinancing” it will run out of money by the second quarter of 2025.
It also notes that in 2006, nearly 5.5 billion letters were delivered. That number dropped to 2.2 billion in 2023.
Canada Post delivered to 17.4 million addresses in 2023, about three million more than in 2006, according to the report.
The Crown corporation recently increased stamp prices by 25 percent. The move is expected to bring in an additional gross revenue of $80 million this year.
Canada Post had to cease operations late last year as a labour strike occurred right before Christmas. The Canadian Industrial Relations Board ordered 55,000 workers back to work following a month-long strike.
The government has appointed an industrial inquiry commission to come up with recommendations by May 15. The goal is to find ways to develop a new agreement between the corporation and employees.
The existing contracts have been extended to May 22.
However, the strike saw the corporation lose business to other shipping companies. Some experts have said that the customers who left Canada Post may never return.
The Canadian Press and Jennifer Cowan contributed to this report.
