The federal government will lend $1 billion to Canada Post for the 2025-26 fiscal year so that it can continue operating while dealing with “significant financial challenges,” the postal service said Friday.
Canada Post says that Ottawa is making the repayable funds available within the regulations of the Canada Post Corporation Act, but that the money — totalling $1.034 billion — offers only a temporary financial boost and will not fix the Crown corporation’s structural issues.
The postal service is working with the government “on a plan to secure the long-term viability of a service that millions of Canadians consider essential,” it said in a news release.
Canada Post has lost $3 billion since 2018, with letter mail in decline and larger competitors eating into its share of the parcels market. The postal service also partly blames “high labour costs and legacy regulatory measures” for its losses.
Public Services and Procurement Canada says the money will be provided on an as-needed basis to pay non-discretionary obligations.
Canada Post warned in its 2023 annual report that, without “additional borrowing and refinancing,” it would run out of money by the second quarter of 2025. It recently raised stamps prices by 25 per cent.
Its operations were temporarily suspended last fall when the Canadian Union of Postal Workers, which represents its postal workers, went on strike until the federal government intervened to end the labour dispute.
