OTTAWA, Ont. – Canada Post says it expects to lose money in the 2013 financial year as it grapples with a combination of “rapidly declining mail volumes” and a growing number of new addresses.
The Crown corporation says in the shorter term, it managed to return to a profit of $127 million before taxes last year.
That’s an improvement over the $253 million loss before taxes posted in 2011, which was the first time the postal service had reported a loss in 16 years.
The main Canada Post operations were also profitable in 2012, with net income of $98 million, though it was from $152 million of adjustments related to the recognition of lower future sick leave and health benefits.
Without the new collective agreement, Canada Post would have lost $54 million before taxes, it said, while the entire group of companies would’ve lost $25 million.
Canada Post says it needs to continue reworking its operations to help substitute the decline in mail volumes. Nearly one billion fewer pieces of mail were sent within Canada last year than in 2006, it says.
The post office and CUPW reached a collective agreement late last year after the union launched a series of rotating strikes in 2011, which the corporation countered by locking out its workforce.
The labour disruption was ended when the Harper government introduced back-to-work legislation.
One of Canada Post’s largest financial problems is a solvency deficit in its employee pension plan. The deficit climbed to $5.9 billion in 2012 from $4.7 billion a year earlier. The agency is, by law, responsible for funding shortfalls in the plan.
“This places greater pressure on the financial position of Canada Post Corporation going forward,” the agency said.
“Canada Post must continue to explore and pursue opportunities to reshape its business and adjust its labour costs in order to meet Canadians’ changing needs for postal services.”
The company has been focusing more on a digital initiative that includes an electronic mailbox that helps organize ebills.
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