Canada Post reports $315 million loss in third quarter as strike continues (2024)

Canada Post reported a before tax loss of $315 million for the third quarter of 2024, widening its deficit by $25 million compared to the same period last year. The decline was attributed to ongoing challenges in its parcels segment, where revenue fell 5.8 per cent as volumes declined by 9.6 per cent. The report cited “a highly competitive and demanding parcel delivery market” as the key factor behind the drop.

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While direct marketing revenue rose nine per cent, buoyed by a 22.1 per cent increase in volume, these gains were insufficient to offset declines in parcels and transaction mail. In the latter, volumes fell by 6.6 per cent — though a regulated postage rate increase helped stabilize revenue.

The corporation noted that the earnings results reflect broader structural challenges. “The loss from operations excludes any dividends or income from the divestitures,” the report stated, highlighting the limitations of short-term financial measures. This marks Canada Post’s seventh consecutive annual loss, underscoring its struggle to adapt to market dynamics and rising operational costs, including higher employee benefits.

The financial losses coincide with an escalating strike by Canada Post workers, who are demanding higher wages, improved job security, and better working conditions. The strike, which has virtually shut down operations across the country, poses a significant risk to the corporation’s already strained parcels business. The report warns that prolonged labour action could further erode market share in the competitive e-commerce delivery sector, where customers may turn to private alternatives.

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Union representatives argue that Canada Post’s financial struggles stem from poor management decisions, while management maintains that modernization efforts — including seven-day parcel delivery — are critical to long-term viability. Negotiations remain at an impasse, despite both sides proclaiming their commitment to resolving the dispute swiftly to minimize operational and financial impacts.

According to the earnings report, growth in e-commerce returns and improved service performance in key markets partially mitigated the revenue and volume decline, but “digital alternatives” and competitive pressures remain significant obstacles.

Canada Post has reported more than $3 billion in losses since 2018, as Canadians sent fewer letters while competitors gobbled up even more of the parcel market.

Households received seven letters a week on average in 2006, but only two per week last year, according to Canada Post’s latest annual report, which dubbed the trend “the Great Mail Decline.”

The last postal work stoppage took place starting in late October 2018, when employees carried out rotating strikes lasting 31 days.

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That strike, as well as one in 2011, ended when the federal government passed legislation sending employees back to work.

—With files from The Canadian Press

• Email: shcampbell@postmedia.com

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