Canada Post Corporation overview: Committee of the Whole—May 19, 2022
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Canada Post Corporation
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Key data points
- Canada Post’s reported financial losses were amplified by COVID-19; while the corporation has reported losses so far in 2021, its financial results have improved compared to 2020
- Through 2021, unconsolidated revenues totalled $7.3 billion
- Through the first 3 quarters of 2021, Canada Post reported a consolidated net loss of $209M, an improvement of $243M (53.8%) from the same period in 2020, when the net loss was $452M
- Revenue for the Canada Post segment increased by $37M, or 0.81%, in the third quarter compared to the same period a year earlier
- Cost of operations increased by $32M, or 1.8%, in the third quarter of 2021 and by $275M, or 3.3%, for the first 3 quarters, compared to the same periods a year earlier
Key results for the Canada Post segment in the third quarter 2021
- In the third quarter, parcels revenue declined by $31M, or 5.3%, as volumes fell by $20M pieces, or 22.1%, compared to the same period a year earlier. For the first 9 months of the year, revenue rose by $307M, or 11.4%, as volumes declined by $2M pieces, or 2.3%, compared to the same period a year earlier
- Transaction mail revenue grew by $21M, or 2.4%, in the third quarter as volumes rose by $8M pieces from the same period in the prior year. For the first 3 quarters of 2021, revenue grew by $54M, or 1.3%, as volumes rose by 4M pieces compared to the same period a year earlier, due in part to the census and federal election mailings
- Direct marketing revenue grew $42M, or 20.3%, in the third quarter as volumes rose by 184M pieces, or 21.1%, compared to the same period in the prior year. For the first 3 quarters of 2021, direct marketing revenue increased by $100M, or 15.9%, as volumes increased by 497M pieces, or 19.8%, compared to the same period a year earlier
$490M recorded loss before taxes
- Revenue for the Canada Post segment increased by $407M, or 6.31%, in 2021 compared to the prior year
- Compared to 2020, parcels revenue grew as the corporation managed parcels volumes to maximize available capacity and improve service. Transaction mail revenue increased slightly, benefitting from the 2021 federal election and census mailings, while direct marketing revenue and volumes started to recover toward pre-pandemic levels
- Year-over-year comparisons are affected by COVID-19, which had different impacts on the lines of business in 2020: direct marketing and transaction sail volumes declined substantially, while parcels volumes increased significantly to an unsustainable level, constrained by available capacity
- Cost of operations increased by $127M, or 2.0%, in 2021 compared to the prior year. Cost increases were largely driven by higher labour costs and a rise in non-labour collection, processing and delivery costs. The corporation also invested in operational capacity to support ecommerce growth and modernize its retail network
Canada Post polling
- The government regularly engages Canadians on their views about important services, such as those provided by Canada Post
- This polling is related to the government’s commitment to review the Canadian postal service charter every 5 years
- The views of Canadians are important to the Government of Canada and COVID-19 has dramatically changed how Canadians use postal services. This research will help to better understand Canadians’, Indigenous peoples and Canadian businesses’ views regarding how Canada Post serves them today and how they wish to be served into the future
Rural delivery
- Canada Post embraces its role in connecting and serving all Canadians. In rural and remote areas, they are increasing parcel capacity, improving service at post offices and fostering reconciliation with Indigenous peoples
- Rural Canada—by the numbers:
- 9M km2 land mass
- 11.1M Canadians (approximately 30% of population)
- approximately 35 people/km2 population density (median by forward sortation area (FSA))
- 5.3M addresses
- 960K Indigenous Canadians
- 600 First Nations communities
- 111M parcelsFootnote 1
- 979M SmartmailFootnote 1
- 931M LettermailFootnote 1
- Canada Post’s unparalleled rural network:
- 12.5K employees (estimate 70% of rural and suburban mail carriers (RSMC), Canadian Postmasters and Assistants Association (CPAA), and Canadian Union of Postal Workers (CUPW)—retail staff)
- 3,295 retail post offices (78% corporate, 22% dealer)
- 8,138 delivery routes (rural and suburban)
- 854 corporate vehicles, and 7,274 employee-owned
- 473,000 kilometres driven per day
- rural addresses served (5.1M residential, 162K businesses, and 86K farms)
- RSMC delivery methods: 75% community mailboxes, 13% rural mailboxes, 11% lock boxes (apartments) and 1% businesses
- parcels delivered on behalf of other couriers, such as FedEx, Purolator and UPS (2.6M pieces per year)
- Canada Post’s volume mix continues to shift from mail to parcels everywhere across Canada. This is even more pronounced in rural and remote areas
- parcels
- ecommerce is driving rapid growth in parcel volumes in rural Canada
- rural areas are not well served by competitors because population density is low and delivery is costly
- parcel volume: (2019 to 2021 actual = +13% urban versus +48% rural); (2021 to 2026 forecast = +24% urban versus +34% rural)
- mail
- mail volumes are eroding quickly in both urban and rural areas
- mail is not going away, and Canada Post foresees a need for mail delivery well beyond the next decade
- parcels
- Canada Post’s rural and retail workforces can be categorized into 3 broad groups:
- rural delivery: Canadian Union of Postal Workers—rural and suburban mail carriers
- CUPW retail / post offices: Canadian Union of Postal Workers—urban
- CPAA retail / post offices: Canadian Postmasters and Assistants Association
- Rural retail network:
- dealer-operated post offices (dealers)
- 735 rural locations; 2,300 total (urban and rural)
- offers same services at the same prices as corporate post offices
- conveniently located within local pharmacies or other retail stores
- generally better hours and parking than corporate post offices
- staffed by employees of host business
- consumer satisfaction scores of 90% are on par with corporate (92%)
- Canada Post-operated post offices (corporates)
- 2,560 rural locations; 3,630 total (urban and rural)
- Canada Post’s commitment to Canadians: service, accessibility, self-sustainability
- new services:
- community hubs aim to improve services and provide more convenient access to underserved Indigenous, northern, and rural communities
- financial services enhance Canada Post’s retail services and include Canada Post MyMoney Loan Service, in partnership with TD Bank
- Canada Post’s long-term aspiration is to offer a broader suite of value-added financial services that could include an array of transactional products, such as credit cards, savings accounts and investment services
- accessibility
- improved Indigenous access to retail is part of Canada Post’s reconciliation strategy. In 2021, Canada Post improved postal services in 8 Indigenous communities
- new retail point of sale rolled out across their network focused on faster transaction times and improved clerk and customer experience
- online customer forms and MoneyGram transactions allow customers to fill in their information ahead of time, simplifying the in store experience
- Canada Post continues to work towards contactless transactions to allow labelled packages to be mailed without interacting with a store clerk. In 2021, Canada Post launched 10 automated parcel lockers and nearly 50 contactless induction boxes
- new services:
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