You’d better believe that the Canada Post Corporation is in very deep trouble. Here’s how they phrased it in their 2023 annual report:
"Canada Post’s financial situation is unsustainable."
“Unsustainable.” Well that doesn’t sound good. Think they’re just putting on a show to carve out a better negotiating position? Well, besides for the fact that they’re not currently negotiating with anyone, the numbers do bear out the concern:
"For 2023, the Corporation recorded a loss before tax of $748 million, compared to a loss before tax of $548 million in 2022. From 2018 to 2023, Canada Post lost $3 billion before taxes. Without changes and new operating parameters to address our challenges, we forecast larger and increasingly unsustainable losses in future years."
In other words, it’s madly-off-in-all-directions panic time.
Hey! You know I can hear your condescending sniff: “I’m sure this is just a temporary disruption. They’ll figure out how to fix the leak and get themselves back on the road like always. They’re too big to fail.”
Yeah…not this time. The competition from digital communications (i.e., the internet), FedEx, and UPS isn’t going anywhere. Letter delivery nosedived from nearly 5.5 billion pieces in 2006 to just 2.2 billion in 2022. And vague references to “major strategic changes to transform our information technology model” don’t sound much like magic bullets for reversing the decline.
But Canada Post’s labor and pension costs sure are marching bravely forward. In fact, if it wasn’t for Parliamentary relief in the form of Canada Post Corporation Pension Plan Funding Regulations, the Corporation would have had to pay $354 million into the pension plan in 2023 alone. But that $354 million - plus whatever additional amounts show up in 2024 and besides the $998 million in existing general debt - are still liabilities that’ll eventually need paying.
Whoever or whatever is to blame, this party is over. The only question is how to manage the collapse. And the other only question is whether anyone of consequence is currently working on a plan or, instead, it’ll be the usual cash-burning public sector train wreck.
There are two ways this could go.
The Corporation could face devastating waves of defaults on debt repayment, salaries, and pensions until the government “steps in” to “stop the bleeding”. You know exactly how the Transport Minister’s announcement will go:
“This one-time $2 billion
bail outtemporary measure is only needed so the corporation can turn itself around, find its bearings in a changing world, right the ship, regain its feet, and <insert your favorite happy-face metaphor here>.”
Wait a year. Rinse and repeat.
Since this ship will never be righted and the bleeding will never stop, sinking billions of taxpayer dollars into the mess will, at best, push off the inevitable by a few years. There’s no way this will end happily.
Alternatively, if there’s someone - anyone - in Ottawa willing to boldly gaze into the gloomy abyss of the near future and see what’s coming, Canada Post could gradually shut down its operations in an organized way. That might include:
Negotiating the transfer of as many workers as possible to the private sector companies that’ll be picking up the logistical slack.
Selling off capital and IP assets to help with the discharge of unpaid debt - as much as $500 million of which is held by the Government of Canada.
Creating small government-subsidized organizations to provide delivery to rural communities.
Working with current commercial customers to find alternative business resources.
Optimizing planning time and resources for employees to give them the best career transition possible.
It’s 2024. Mail delivery hasn’t been an essential service in a national sense for a very long time. And there are 68,000 Canadian workers who, one way or another, are soon going to face difficult times.
But, for once, why can’t the transition be smart, organized, and effective?
Snail mail should only be delivered one day a week.
I doubt that the private sector would be very keen on absorbing the ex-posties. Having witnessed the speed of the retail counter workers and spoken to a few carriers, I think they would be stunned by having to work in a "real world" environment. And self employment would probably kill them.