Canada Post is facing the deepest financial crisis in its history, reporting losses of $541 million before taxes in the third quarter, marking what the Crown corporation has called an “unprecedented” quarterly deficit. The staggering loss represents the worst quarterly performance in the organization’s history and signals mounting challenges for the national postal service.

Historic Financial Deterioration

The losses ballooned from $315 million in the same quarter a year earlier, demonstrating a dramatic acceleration in the corporation’s financial decline. Chief financial officer Rindala El-Hage described the corporation as “effectively insolvent”, painting a dire picture of the organization’s fiscal health.

For the first nine months of the year, Canada Post lost $989 million versus $345 million a year earlier, nearly tripling its losses compared to the previous year. El-Hage indicated the company is tracking for its steepest annual loss yet in 2025, suggesting the situation may worsen before it improves.

The financial hemorrhaging is not new. Canada Post accumulated losses before tax of $3.8 billion between 2018 and 2024, reflecting years of structural challenges that have left the postal service struggling to maintain viability.

Declining Parcel Revenue and Competition

A significant driver of the losses has been the dramatic decline in Canada Post’s parcel business. Parcels revenue fell by 40 per cent in the third quarter to $450 million amid a volume decline of 27 million pieces as customers flocked to competitors. This represents a substantial erosion of what was once considered a growth area for the postal service.

The corporation faces intense competition in the parcel delivery market from private carriers and logistics companies. The shift away from Canada Post reflects both competitive pressures and customer concerns about service reliability, particularly amid ongoing labor disputes.

Labor Uncertainty Takes Its Toll

Canada Post claims the bulk of losses in the second and third quarters reflect the impact of labour uncertainty on the business amid ongoing rotating strikes by its union. The relationship between Canada Post and the Canadian Union of Postal Workers (CUPW) has been strained for years.

A bargaining saga with the CUPW, which represents some 55,000 mail carriers at Canada Post, has now stretched past the two-year mark. Negotiations for a new contract began in November 2023, but the parties have been unable to reach an agreement.

The labor dispute reached a critical point in November 2024, when workers launched a nationwide strike that lasted until mid-December, when the federal government intervened. The strike disrupted mail and parcel deliveries during the crucial holiday season, further damaging the corporation’s reputation and business relationships.

Since returning to work, tensions have remained high. Workers launched another strike in September 2025 following government-proposed service cuts, though this was later converted to rotating strikes to minimize disruption while maintaining pressure on management and government.

Workforce Reduction Plans

Facing the financial crisis, CEO Doug Ettinger announced that the company expects to lose up to 30,000 employees to retirement or voluntary departure over the next decade as it seeks to shrink its workforce and reduce costs. The company expects to shed 16,000 employees through retirement or voluntary departures by 2030, with an additional 14,000 leaving by 2035.

Ettinger stated the company will need to be “a leaner organization” and will use “attrition first” to downsize from the roughly 62,000 people employed at the end of last year. This approach aims to minimize the impact on workers while addressing the corporation’s financial reality.

Structural Challenges

Ettinger explained that Canada Post’s business model is deteriorating, with fewer letters being sent every year. The decline in traditional mail volumes has been a long-term trend, accelerated by digital communication and online billing.

The corporation is caught in a difficult position: it faces a universal service obligation to deliver mail across Canada’s vast geography, including remote and rural areas, while revenues continue to decline. The cost structure built for a high-volume mail business is increasingly unsustainable in the digital age.

Looking Ahead

The path forward for Canada Post remains uncertain. With ongoing labor disputes, mounting losses, and fundamental questions about its business model, the Crown corporation faces difficult decisions about its future. The government has proposed reforms including potential service cuts, but these have been met with resistance from both workers and the public.

As the corporation heads toward what may be its worst financial year on record, stakeholders including employees, customers, businesses, and the federal government will need to grapple with fundamental questions about the role and sustainability of Canada’s postal service in the 21st century.

The third quarter results underscore the urgency of finding solutions to what has become an intractable crisis for one of Canada’s most essential public services.