The Canada Post Group reported a $104-million loss Tuesday in its latest quarter as efforts made to cut costs and streamline operations were not enough to balance out lower mail volumes.

The federal Crown corporation says the loss, before taxes, comes in the midst of a "historic shift" to digital communications that has eroded mail volumes at an "accelerated pace."

As a result, it is in consultations to decide how the company can change with the times, as fewer people continue to send mail and use post offices.

Canada Post said this "multi-pronged transformation" is part of an overall effort to "avoid becoming a financial drain on taxpayers."

In the same quarter a year earlier, the corporation lost $102 million.

Letter mail down but parcels up

Transaction mail, which includes letters, bills and statements and accounts for half of Canada Post's revenue, was down by 51 million pieces, or 6.3 per cent, in the quarter, compared with a year earlier.

However, Canada Post said its parcel delivery business grew because of the popularity of online shopping. In Canada, volumes in the second quarter were up by 5.1 per cent, compared with a year ago.

Canada Post said it continues to cut costs by making changes to collective agreements with its workers, who are members of the Canadian Union of Postal Workers. The changes include reduced wages for new hires, the elimination of banked sick days and a one-year-wage wage freeze for new hires beginning 2015.

It is also shortening hours at its less-in-demand retail postal outlets, and consolidating mail processing.

The company said the second-quarter loss it on track to record a substantial loss in 2013.

Canada Post has been grappling with a persistent drop in many forms of mail as a result of newer technologies such as electronic mail and online banking.

Besides Canada Post, the group includes the Purolator courier service and other subsidiaries.