Canada Post is effectively insolvent, and repeated bailouts are not a long-term solution and transformation is required to ensure its survival, the federal government announced on Thursday.
And after the government announcement that door-to-door mail delivery will end for nearly all Canadian households within the next decade, the Canadian Union of Postal Workers announced it was declaring a countrywide strike.
That means the government is lifting the moratorium on community mailbox conversions. Currently, three-quarters of Canadians already receive mail through community, apartment, or rural mailboxes, while one-quarter still receive door-to-door delivery. Canada Post will be authorized to convert the remaining 4 million addresses to community mailboxes, generating close to $400 million in annual savings.
It said Canada Post will introduce flexibilities to reflect today’s lower volumes. The average household receives just two letters per week, yet operations remain designed for far higher volumes. By adjusting standards so that non-urgent mail can move by ground instead of air, the corporation will save more than $20 million per year.
And it explained that the moratorium on rural post offices, in place since 1994, will also be lifted. The rural moratorium was imposed in 1994 and covers close to 4000 locations. It has not evolved in 30 years, but Canada has changed. This means that areas that used to be rural may now be suburban or even urban, but are still required to operate as rural post offices. Canada Post must return to the government with a plan to modernize and right-size its network.
“Canada Post is a national institution, older than our country itself, that has been serving Canadians for more than 150 years. For generations, postal workers have connected communities in every corner of the country, providing an essential lifeline to hundreds of northern, Indigenous, and rural communities. Canadians continue to rely on it today, and it remains a vital public service,” noted Joël Lightbound, Minister of Government Transformation, Public Works and Procurement.
“At the same time, Canada Post is now facing an existential crisis. Since 2018, the corporation has accumulated more than $5 billion in losses. In 2024 alone, it lost over $1 billion, and in 2025, it is already on track to lose close to $1.5 billion. Earlier this year, the federal government provided a $1-billion injection to keep the corporation operational. In the second quarter of 2025, Canada Post posted its worst quarterly results ever, losing $407 million. Today, the corporation is losing approximately $10 million every day.
“Twenty years ago, Canada Post delivered 5.5 billion letters annually. Today, it delivers only 2 billion, even as the number of households has grown. That means fewer letters are being delivered to more addresses, while fixed costs remain high. At the same time, parcels volumes — which should have been Canada Post’s growth opportunity — have declined. In 2019, Canada Post delivered 62% of parcels in Canada; today, its market share has dropped below 24%, with private competitors taking the lead. Structural challenges, combined with outdated restrictions and stalled negotiations between labour and management, have further limited the corporation’s ability to adapt.”
This situation is unsustainable, it added.
Canada Post President and CEO Doug Ettinger said: “Today’s announcement will allow us to make the changes needed to restore Canada’s postal service for all Canadians by evolving to better meet their needs. We take this responsibility seriously and will work closely with the government and our employees to move with urgency and implement the necessary changes in a thoughtful manner. Our goal is to ensure that a strong, affordable, Canadian-made, Canadian-run delivery provider supports the needs of today’s economy and delivers to every community across the country.”
Dan Kelly, President at the Canadian Federation of Independent Business (CFIB), said: “Every government review has come to the same conclusion: Canada Post needs major reforms. Today’s announcement is long overdue, but it’s a positive step towards making necessary changes that have been recommended for more than a decade.
“While we welcome today’s news, there’s still no deal between Canada Post and the union.
“The union’s most recent job action banning flyers was another blow to small businesses. At this critical time of year, the last thing small businesses can afford is another strike. We urge the government to provide certainty and work proactively to prevent another labour disruption by temporarily making Canada Post an essential service.”
Regarding the postal strike, Kelly said: “As expected, Canada Post workers are back on an immediate, nation-wide strike. The impact on small business will be massive. Last year’s strike alone cost small firms over $1 billion. Doing this in the lead-up to the critical holiday retail shipping season is especially troubling.
“Still, the federal government must push forward with the needed changes ordered today by Minister Lightbound. Now is not the time to turn back.
“The strikes are a direct result of a decade of inaction on the part of the Trudeau government on this file. Every single review over the past ten years pointed to the same conclusion the Minister made today – that the Corporation is broken and needs to be given the flexibility to reduce costs. In fact, most of these measures were set to go into effect at the end of Harper term in office.
“Small firms are still strong users of Canada Post, and a new business model can be quickly implemented if government gives the Corporation the labour market protection it needs to get the job done.
“Canada needs some form of temporary or permanent Essential Services legislation to ensure service continues while the reforms are going into effect. Small firms are counting on government and all political parties to make this happen.”
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