Canada Post Corporation 2020 first quarter report: Committee of the Whole—July 8, 2020
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Context
On May 25, 2020, Canada Post Corporation released its 2020 first quarter (Q1) results and recorded a loss before tax of $66 million.
Suggested response
- Canada Post is a Crown Corporation that operates at arm’s length from the government
- Existing declines in transaction mail and direct marketing contributed to a loss in the first quarter, and these declines were further impacted by the COVID-19 pandemic
- Canada Post continues to provide an essential service while keeping employees safe, and remains the country’s leader in e-commerce delivery
If pressed on the $66 million recorded loss before taxes:
- Canada Post continues to see increased parcel revenue and volumes
- increases in costs were mainly due to higher labour and employee benefits, and increased collection, processing and delivery costs from parcels growth
Background
COVID-19 disruption
With parcel volumes rapidly increasing and transaction mail and direct marketing volumes quickly decreasing, COVID-19 is expected to have a larger impact on the business in the second quarter.
Key results for the Canada Post segment in first quarter 2020 compared to first quarter 2019
- Parcels results:
- volumes increased by 4 million pieces or 6.1% in Q1 2020
- revenue increased by $53 million or 10.4%
- the growth rate for parcels in Q1 was larger than in the same period of 2019, but remained lower than the growth rate in Q1 2018
- Transaction mail results:
- volumes fell by 30 million pieces or 2.2%
- revenue decreased by $16 million or 0.6%
- ongoing erosion accelerated toward the end of Q1 as many businesses began operating on an online-only basis due to COVID-19
- Direct marketing results:
- volumes decreased by 126 million pieces or 10.5%
- revenue decreased by $26 million or 8.6%
- declines in direct marketing revenue and volumes were larger than in the first quarter of 2019 due to COVID-19, as marketing campaigns were delayed or cancelled near the end of the quarter
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