Getting rid of daily mail delivery is not an option Canada Post is considering, the Crown corporation’s president and CEO told MPs on Wednesday night.
Canada Post has been asking for changes to its governing regulations, including around how often it has to deliver letter mail.
But Doug Ettinger told the House government operations committee that if anything, the Crown corporation needs to expand its operations to compete with private companies in package and parcel delivery.
“Even if we only deliver a letter every second day, we still have to go through the route, because to be competitive in e-commerce and parcels, we have to be there every day,” Ettinger said, adding that the market is now focused on e-commerce.
“The answer to this … is we need seven-day delivery, that’s what we need. We don’t need fewer days.”
A Canada Post spokesperson later told CBC News that the Crown corporation still wants Ottawa to change the legislation that mandates how quickly it delivers mail to make deadlines more flexible.
Crown corp. bleeding money
According to the its latest annual report, Canada Post lost a whopping $748 million pre-tax in 2023.
Ettinger said that is largely due to a widening gap between the cost of delivery and the price of postage. A lack of revenue and subsequent inability to invest in new services is Canada Post’s biggest obstacle to modernizing, the CEO said.
In order for Canada Post to make changes to compete with private delivery companies, regulatory changes need to be made, Ettinger said.
“Our operating model was built … for a paper-based economy — almost pre-internet — and that is holding us back,” Ettinger said.
“We are driving a 1967 Chevy in a Formula 1 race.”
Unlike some other Crown corporations, Canada Post isn’t taxpayer-funded. It needs to sustain itself through profits.
But many of its business practices still need to be approved by the federal government. That includes its corporate plan and the price of postage.
Ettinger pointed to other countries, such as the United Kingdom, United States and Australia, that have been able to work out a scaled pricing approach based on a calculation of rising costs.
The minister who oversees Canada Post, Jean-Yves Duclos, has not explicitly committed to making regulatory changes in the past.
“Whatever we need to support Canada Post in supporting Canadians, it will be envisaged, as we need Canada Post in the future,” Duclos said earlier this month.
Ettinger said Canada Post is working with the government on an updated corporate plan, but stressed that the Crown corporation needs more flexibility in order to compete.
Its annual report indicated that it could run out of money at some point within the next year. When asked how the Crown corporation’s financial situation is sustainable, Ettinger replied, “It’s not.”
“We have to undergo substantial change. The business model … has outlived its useful life,” he said.
“It is a fight. I’m not being dramatic by saying that. Our business model needs to be updated. It’s done — finished — and probably has been for 10 years.”
