The Canada Post Group of companies had an operating loss of $193 million in 2013, with the sale of its Vancouver sorting station and other real estate helping to offset losses on mail delivery.
The postal service reports the volume of mail it delivers has fallen an average of 30 per cent per address since 2007.
It is in the midst of a multi-year restructuring geared toward handling a 50 per cent reduction in what it calls “transaction mail,” a term that covers letters, bills and statements. These items account for half its annual revenue.
Bills and statements are moving online and emails are replacing letters, reducing Canada Post’s revenue, while its costs remain relatively static, according to its annual report.
Its revenue from Canada Post, Purolator, SCI Group and Innovapost, totalled $7.56 billion in 2013, down from on $7.52 billion in 2012. Net loss after tax was $29 million for the year, compared to $83 million the year before.
While the number of letters delivered dropped 4.8 per cent in 2013, the volume of parcels is up 6.9 per cent to seven million annually, a reflection of Canada Post’s efforts to grab the e-commerce market.
Building the parcel business is part of a five point plan released in December in an effort to bring Canada Post’s costs in line and adapt it to the new realities in the marketplace.
Its plans to end door-to-door home delivery and raise the price of stamps have met with public criticism.
If the post office is also successful in addressing its labour costs and streamlining its costs, CEO Deepak Chopra says it will improve its income by between $700 million and $900 million a year, returning the crown corporation to financial viability in five years.
"This comprehensive five-year plan will return Canada Post to solid financial footing and provide a platform for growth fuelled by the changing needs of the people and businesses we serve,” Chopra said in the annual report.
"This is more than a business plan; it’s a framework for protecting the national postal service and preparing it for future generations. For the plan to succeed, it is unavoidable that some Canadians will experience change."
While it attempts to restructure, Canada Post has been granted a four-year delay in special contributions to its pension plan, which has a $6.3 billion deficit. In its 2013 report, the crown corporation says the existing plan achieved investment returns of 16.9 per cent last year, but its going concern deficit is $296 million.