Friday January 24, 2025 | VICTORIA, BC [Posted at 6:33 pm | Updated 8:17 pm]
Economic analysis by Mary P Brooke | Island Social Trends
Without any political debate or warning, the federal government has informed Canada Post that it intends to make repayable funding available.
The amount will be up to $1.034 billion. The funds will be available to the crown corporation through the 2025-26 fiscal year.
And it has come to this… a short-term loan of $1.034 billion from the federal government to Canada Post in order to keep the crown corporation afloat. Will the corporation make enough structural and operational changes to repay it and also start improving revenues?
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.
Until now, Canada Post was never seen as eligible for direct government funding; Canada Post is not a budget ‘line item’ (i.e. for regular funding as a national service). This sort of loan has not been much before it all all — obviously a political direction no government wanted to travel until now.
With Prime Minister Justin Trudeau on his way out (his last day is March 9) and the House of Commons prorogued (suspended) until March 24 this proactive loan to Canada Post seems to have been politically much simpler than it would be ordinarily.

The recent postal strike probably pushed the corporation to the edge and the government into some moderate action.
Serious point of depletion:
“Without this short-term financing measure, the company would completely deplete its cash reserves by the second quarter of 2025,” said Canada Post in a January 24, 2025 news release.
“This approach will maintain continuity of Canada Post’s operations but will not solve the Corporation’s structural issues,” said Canada Post in a news release today.
“It will, however, provide a temporary financial bridge while Canada Post and the government work together on a plan to secure the long-term viability of a service that millions of Canadians consider essential,” the corporation said.
Losses since 2018:
Canada Post has been losing money year after year since 2018 (as shared in their 2023 Annual Report), a process fuelled by rapid changes in the postal and parcel delivery sectors, high labour costs and legacy regulatory measures that impede the company’s ability to evolve and compete.
“The significant ongoing annual losses have forced the postal service to tap into its cash reserves in recent years to address the rising costs of meeting our universal service obligation, maintaining our network, and preserving our services for Canadians,” says Canada Post.
Postage finally increased as a boost:
Increasing the price of postage by any significant amount only happened this year and the grinding loss of parcel shipping business to private companies has been happening for years.
As of January 13, the price of letter-mail stamps has gone up by 29 cents to $1.44 per stamp (or $1.24 per stamp if purchased in a booklet).
Stamps purchased in a booklet, coil or pane will cost 25 cents more at $1.24 per stamp. The price of a single domestic stamp is now $1.44, up from $1.15.
Canada Post proposed the hike in September, estimating it would generate about $80 million in additional gross revenue in 2025.
It’s still a bargain to mail a letter that could travel hundreds or thousands of miles for a price that is less than a cup of coffee. In that context, Canada Post should not be shy about future increases as they continue to struggle with revenue shortfalls.
Realization to make change:
“Significant change is urgently needed to modernize the operating model and preserve the national postal service to ensure it serves all, while understanding the important role it must continue to play for small businesses, charities and those living in rural and remote communities,” said CAnada Post.
This ‘realization’ seems to come many years behind schedule. It’s like the corporation was watching themselves drown and felt they could do nothing about it.
The postal worker strike that lasted a month from mid-November to mid-December 2024 seems to have produced the final push. The strike highlighted corporate slack. Perhaps they are now ready to save themselves.
“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,” said Canada Post.
Areas within their control:
The Corporation has already focused considerable effort on transforming key areas that it feels are “within its control”. Over the last five years these have included:
- improving service through facilities upgrades,
- new sorting equipment,
- digital platforms, and
- improving safety performance for employees.
Needed for revenue:
Canada Post is a crown corporation but does not receive direct government funding or support.
Revenues for the corporation have been steadily decreasing since 2018, as the impact of digitization in communications (i.e. use of the Internet, online banking, etc) digs deeper.
“Every year, there are fewer letters to deliver to more addresses, which adds significant cost pressures to the Corporation on top of continued inflationary pressures,” reads the Canada Post news release.
This behooves a deeper look at ways to restructure the service obligations of Canada Post to align with what Canadian households and businesses need in the way of postal service.
The postal workers strike that lasted a month (November 15 to December 16, 2024) impacted revenues and eroded small business relationships given the reliance of many small businesses on parcel delivery services by Canada Post.
===== RELATED:
- Jan 13: Canada Post letter mail & parcel prices up (January 14, 2025)
- Canada Post domestic parcel service now fully restored (January 7, 2025)
- Canada Post delivery service restoration still underway (January 4, 2025)
- Canada Post: all backlogged parcels now in the system (December 21, 2024)
- Parcels and mail start rolling Dec 19 with Canada Post (December 18, 2024)
- Canada Post service resumes Dec 17 with workers back on the job (December 17, 2024)
- Canada Post labour dispute is about to end (December 13, 2024)
- Staying warm on CUPW picket line in Langford (December 12, 2024)
- Canada Post worker strike highlights corporate slack (November 30, 2024)
- NEWS SECTIONS: BUSINESS & ECONOMY