The Government of Canada has announced that it will give Canada Post repayable funding of up to C$1.034bn (US$718m) for the 2025-2026 fiscal year to help the postal operator maintain its solvency and continue operating as it deals with significant financial challenges.
According to Canada Post, significant change is urgently needed to modernize its operating model and preserve the national postal service. The temporary financial bridge is expected to help while Canada Post and the government work together on a plan to secure the long-term viability of the service.
Canada Post has recorded significant annual losses since 2018, fueled by rapid changes in the postal and parcel delivery sectors, high labor costs and legacy regulatory measures. According to the post, its significant ongoing annual losses – C$3bn (US$2.08bn) between 2018 and 2023 – have forced it to tap into its cash reserves in recent years to address the rising costs of meeting the universal service obligation, maintaining its network and preserving its services for Canadians.
As the Corporation shared in its 2023 Annual Report, without this short-term financing measure, the company would completely deplete its cash reserves by the second quarter of 2025.
In a statement on its website, Canada Post said it 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.
It is already transforming in key areas within its control, including improving service through facilities upgrades, new sorting equipment, digital platforms and more, while improving safety performance for employees over the last five years.