Liberal government frees Canada Post to end home delivery, close some post offices

With Canada Post on track to lose $1.5 billion in 2025 and contract discussions between the union and the corporation stalled, the federal government is embarking on a modernization plan it says will allow Canada Post to stabilize its finances and ensure its survival.

The bottom line is this: Canada Post is effectively insolvent, Government Transformation Minister Joël Lightbound said in a statement on Thursday.

It provides an essential service to Canadians, and in particular to rural, remote and Indigenous communities, and Canadians are rightfully attached to it and want it saved. However, repeated bailouts from the federal government are not the solution.

WATCH | Mininister wants ‘immediate’ action from Canada Post:

Ottawa wants to see ‘immediate steps’ from Canada Post to address finances

Ottawa is recommending major changes for Canada Post in a bid to ‘stabilize’ the organization’s financial situation, including changes around letter mail frequency, residential delivery and rural post offices, says Transformation, Public Works and Procurement Minister Joël Lightbound.

Chief among those changes is allowing Canada Post to end home delivery and convert the remaining four million addresses that still receive it to community mailboxes. Lightbound said the process would take about nine years, with most of it expected to be completed in the first four.

Three-quarters of Canadians already get their mail from community mailboxes, a government official said in a background briefing Thursday, and moving the remaining Canadians to the communal system will save the corporation $400 million annually, a government statement said.

While home deliveries could be phased out, the corporation’s delivery accommodation program, which allows people with mobility issues to arrange for weekly home delivery or other accessibility options, will remain in effect, the government official said.

Lightbound said Canada Post will also now be able to adjust how it delivers mail, so that non-urgent post can can move by ground instead of air at a cost savings of $20 million annually.

The modernization plan also includes lifting the 1994 moratorium on closing rural post offices that covers nearly 4,000 locations — many of which the government says were once rural and have since become urban post offices.

The government official explained that lifting that moratorium is intended to reduce the number of locations in areas that are over-served, while maintaining rural, remote and Indigenous post offices in areas where they are needed.

The federal government is also reviewing the process for how it increases the price of stamps to make it more flexible and quicker.

WATCH | ‘There are limits to our capacity to bail out Canada Post’:

‘There are limits to our capacity to bail out Canada Post year after year,’ minister says

34 minutes agoDuration0:35When asked if this is officially the end of the federal government ‘bailing out’ Canada Post, Joël Lightbound, minister of government transformation, public works and procurement, said there will be instances the organization will need government cash injections — but he added that Canada Post needs to show a path of financial viability.

Lightbound says he has also asked Canada Post to look for other cost-saving measures and slim down its management structure.

As our government reviews its balance sheets so we can spend less and invest more, we are asking Canada Post to do the same, the minister said in a statement.

A government official said Canada Post has 45 days to examine the government’s recommendations and detail how it will proceed.

The Kaplan report

The changes announced Thursday are in line with recommendations made in the May 15, 2025, Industrial Inquiry Commission led by William Kaplan.

Kaplan’s report noted that in 2006, Canada Post delivered 5.5 billion letters a year, but by 2023 that volume had dropped to 2.2 billion, despite the number of addresses in Canada increasing by three million over the same period.

The report said Canada Post’s infrastructure and staff were designed to deliver 5.5 billion letters a year and the corporation cannot be sustained with a volume of less than half that.

This article is republished from RCI.