Rob Breakenridge: Canada Post is a sinkhole. Why do we keep throwing money down it?

There was a time when mail delivery was an essential federal service. Like, 30 years ago.

By: Rob Breakenridge

It’s a weird and puzzling juxtaposition, to be honest: as Canada Post has become both less relevant and less financially viable, Canadians remain stubbornly attached to it.

There’s undoubtedly some nostalgia and nationalism at play here. The “elbows up” brand of ornery patriotism has made us reflexively defensive when it comes to our national institutions. And this particular institution has been around as long as Canada itself.

How much longer, though, must we prop up a crumbling and increasingly irrelevant institution? We need to come to grips with the cold, hard reality that Canada Post is in a financial shambles and it’s only going to get worse.

In the area where they enjoy a legislated monopoly, there has been a precipitous drop-off. Annual letter volumes have dropped from 5.5 billion two decades ago to only two billion today, despite a significant increase in the number of households.

And in the area where they do compete with the private sector, they’re getting clobbered. Parcel deliveries have increased substantially in Canada with the growth in e-commerce, but Canada Post’s market share has dropped from 62 per cent in 2019, to below 24 per cent.

And, in the meantime, we get less and we pay more — both as consumers and as taxpayers. Sentiment aside, there’s no reason to keep doing this.

The latest stack of money to be metaphorically set ablaze comes in the form of a $1.01-billion “loan” from the federal government to the Crown corporation — one year after a $1.03-billion “loan” was granted. These are ostensibly repayable loans; the scare quotes speak to the fact that Canada Post is — as an industrial inquiry commission concluded last year — “effectively insolvent.”

Canada Post has been losing money now for seven straight years, up to $3.8 billion as of 2024. We don’t yet know the full ugly scope of 2025, but Canada Post’s own annual report warned that “2025 losses are expected to be the most significant of any annual losses in Canada Post’s history.” Not good, to say the least.

The federal government isn’t totally naive about the mess we face. Last week, Public Works Minister Joël Lightbound told a Commons committee that federal support can’t be a long-term solution and that Canada Post needs to undergo reforms to make it viable.

For now, that seems to line up with where the Canadian public is at on this question. A poll last summer from Angus Reid found that almost two-thirds of Canadians see value in Canada Post remaining publicly owned, but there’s also an openness to significant reforms.

For example, 72 per cent support the idea of cutting mail delivery to three days a week, while 52 per cent support the idea of non-union gig workers delivering mail and parcels. There’s even considerable support for the idea of Canada Post branching out into other services, like banking.

Mind you, we don’t lack for banking options in this country and it’s a sad indictment of Canada Post’s business model that we’d need to shoehorn it into another industry altogether just to offset the massive losses stemming from its core business.

As that industrial inquiry commission report noted, that approach is “unrealistic,” and that “given the financial crisis, Canada Post must focus on saving its core business, not on providing new services.”

So we remain stuck in this tug-of-war between those who are oblivious to the current reality and trying to preserve Canada Post as it once was and those who understand that reality and are prepared to accept a hollowed-out relic with costlier and worsening levels of service.

Take the debate over daily, door-to-door delivery. The previous Conservative government began the process of transitioning to community mailboxes (aka “superboxes,”), but the Trudeau Liberals campaigned against that and preserved home delivery for a small minority of Canadian homes.

Finally, that full transition is occurring, but it’s telling that something so simple and obvious became so difficult and controversial.

Most Canadians have had the superboxes for years now and, as noted, most Canadians are fine with fewer days of mail delivery. So why are we hung up on preserving this Crown corporation and its legislated monopoly?

Why shouldn’t Canadians have the option of paying for daily home delivery, if that’s something they want or need? And if a private company can deliver your Amazon order to your house, why must that same company be forbidden from delivering you a letter?

We don’t require Crown corporations and government monopolies to ensure Canadians’ access to groceries, gasoline, internet, or pharmacies. Mail and parcel delivery should be no different.

As for remote communities, it would be easy enough to require some aspect of the universal service obligation to be picked up by entrants into a competitive market. Alternatively, companies could pay a fee which could cover the cost of Canada Post’s obligations or that money could directly subsidize consumers in those communities.

It’s not like any of this is hypothetical, either. It’s been over a decade since Europe ended postal monopolies and mandated competition. Some European countries went a step further and privatized their postal services. If we’re the least bit curious, we can see how this can be done successfully.

There are other national institutions worth fighting for and other ways in which we wrap ourselves in the flag. It is irrational to keep clinging to this broken status quo and obsolete institution.

Rob Breakenridge is a Calgary-based podcaster and writer and host of The Line: Alberta Podcast. He can be found at robbreakenridge.ca and and reached at rob.breakenridge@gmail.com

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