Will Canada Post end daily mail delivery?

Jordan: The price of a stamp went up this week. You might not have noticed. In fact, you probably didn’t. The number of letters Canadians sent through Canada Post has been declining rapidly and steadily year over year, and the Crown Corporation is losing a ton of money. So much so that Canada Post is now considering its options, including some that would end daily mail delivery in favor of every second or maybe every third day. They haven’t sorted out the details just yet. Now a whole lot of Canadians might shrug at that, but a lot also won’t. The mail is still a huge part of life for many Canadians, especially older ones. We might think of it as letters and postcards, but for seniors who have never switched to e-banking, it’s a financial lifeline. For people who are isolated or lonely. It’s one daily person coming around for small business owners, it’s affordable shipping, and for all of us daily mail delivery is simply a constant of life in this country. So much so that the amount of time that a letter mailed across the country has to arrive in is enshrined into law. It’s three days if you’re wondering, but maybe not for much longer. I’m Jordan Heath-Rawlings. This is The Big Story. Cormac Mac Sweeney is the Parliament Hill reporter for CityNews and for us, he’s the guy that delivers our mail. Hello Cormac.

Cormac Mac Sweeney: How’s it going, Jordan?

Jordan: I’m doing well. We’re going to talk about the mail today. First, tell me about the company that delivers the mail. Broadly speaking, how is Canada Post doing these days?

Cormac Mac Sweeney: Not so well. Actually, they release their annual report on Friday and in that report they recorded a loss in 2023 before tax of around $748 million. It’s a big chunk of change to lose as an organization. They are a Crown corporation of course, so arms length from the government, but this is the sixth straight year of losses for Canada Post. And that doesn’t tell the full picture either because when I started on Parliament Hill many moons ago when just before the Harper government had its first and only majority mandate, Canada Post was struggling back then, I believe back in 2013, they were having some losses. So they’ve been struggling financially for some time now as the world has been changing and our country has been changing, but it’s not just letters in the mail and finances. They’ve seen a lot of drop off when it comes to the amount of mail that’s being delivered. Parcel deliveries as well have dropped significantly recently. And the problem for Canada Post is that they have an obligation as a Crown Corporation to be self-sustaining when it comes to finances. So they have to generate their own revenue by the sale of postal products and services and not taxpayer dollars. So it’s not like the CBC getting a billion dollars to offset a lot of their costs. So they have to try and be self-sustaining with this, and that’s creating some problems with the losses that they’ve been seeing for many years in a row now.

Jordan: I know that they recently increased the price of stamps. I imagine that’s not enough to make up the difference. What else is now on the table here? And I guess this started with a line in the report that nobody really noticed until it kind of blew up on Tuesday, Cormac?

Cormac Mac Sweeney: Yeah, so I mean, look, they put out their annual report and there was a press release that went out Friday to sort of go over the numbers and the head of Canada Post was saying in that news release, we need to adapt, we need to make changes. And in the annual report there was of course a line that said we need to change how and when we deliver the mail to better reflect the behavioral changes that they’ve been noticing across Canada. And of course there are a lot of changes. Sure. Do you send a letter to try and contact a person these days? It’s not like it was in the fifties, sixties, seventies, eighties. People are sending emails, they’re texting, they’re making phone calls. The paper economy is no longer really a thing. We still have a lot of paper elements in our lives, but most stuff has turned to digital and parcel delivery is still a big market, but that’s increased in competition as well. And so that’s put more strain as well on Canada Post. I think they said that their parcel delivery market share eroded from 62% prior to the pandemic to 29% in 2023 because during the pandemic, everyone was ordering stuff online more so than they were before. And so even the parcel delivery aspect of Canada Post’s business model started to face some major challenges because a lot of companies just started popping up or they started making their own deliveries. Anyway, all that to say, there was a line talking about the behavioral changes and how they need to change things. And I think a lot of people in Canada, because of all the news that was breaking on Friday with foreign interference inquiry reports and charges being laid in the death of Hardeep Singh Nijjar, that case in BC that’s connected to the Indian government, so much was going on that this whole Canada post release got lost. And then this morning at a scrum on Parliament Hill on his way into cabinet, a reporter who I don’t even know who it was, asked a question of the public services minister about this saying, well, what are you looking at changing here? Are you looking at changing the delivery of mail so that we don’t get it every weekday? And Jean Delo the minister confirmed yes, that’s something that Canada Post is looking at changing, and it’s one of the many options that they’re discussing right now with the union. And they’re in bargaining talks at the moment as a part of regular bargaining talks with the union. And that’s one option as they look to reform Canada Post to try and modernize it to face the realities that they’re facing today. And so because of that, myself and others have jumped on the story saying, yeah, your mail delivery could be in line for a big change. Costs could be going up. You may not be seeing the mailman at your door every day if this all goes through, but we’ll see what happens with negotiations. But I’m sure we will dive into that a little bit more here in a few minutes.

Jordan: Do we have a sense yet of what that would look like practically beyond simply not daily? Are they looking at every two days, every three days, every week? And would the changes potentially be the same everywhere? Because I imagine that there is an element of ensuring access equal access for all Canadians

Cormac Mac Sweeney: And Canada Post isn’t diving too much into the details on this. I did have an interview with a spokesperson for Canada Post, and he tried to lay out as much as he could, but he was saying, look, we’re still at the negotiating tables and we don’t want to dive too deep into this. We want to try and work out deals with the union so that we’re both moving forward on a plan that we both agree with and that’s fair. But I did pose the question because he was being a little bit vague with one answer around what was going to happen, and I confirmed Canadians might not be going to their mailbox every single day. That’s an option you’re looking at. And he confirmed, yes, that was something that they’re looking at, and that maybe they’re looking at every two or three days or something like that. And he said, yeah, that’s one of the options on the table, but there are many options on the table, so we could see a significant change in the amount of times you have to go visit your mailbox because just the practicalities of it all and the logistics of it all, they’re looking at a huge drop in letter mails. So to give you an example, in 2006, the average was about seven letters per week that every Canadian household received. That’s now down to two.

Jordan: Wow.

Cormac Mac Sweeney: Yeah, but here’s another way to frame the exact same stat. In 2006, which was the peak of mail delivery in Canada, Canada Post delivered 5.5 billion letters in the mail to Canadian households. Last year they delivered 2.2 billion. And so they really have to face that reality of people just are not getting letters in the mail like they used to. Is it worth it having a staff member going door to door every day of the week, nine to five, delivering mail to your mailbox when a lot of it could be junk mail rather than important pieces that you might need. And something that was acknowledged by the spokesperson from Canada Post was that there are important letters that need to be delivered on time and they have to sort of balance that out, and maybe that could come in different forms. We already have certain things like priority mail that could go out, but generally that’s an extra cost to the consumer. So exactly what it is, we just don’t know yet and we’ll have to wait for the result of the negotiations. But these are definitely options and things that are being discussed at this time.

Jordan: Of those 2.2 billion letters, like as you mentioned, some of them are important, most of them are probably not, but there are a lot of older Canadians who never move to online banking, say, or use the mail in order to keep in touch with people because they’ve never moved to email. These things are still lifelines for some people. How are they planning to balance that with obviously the need to find efficiencies in the middle of a dying business?

Cormac Mac Sweeney: We didn’t really dive too much into that, but there was a mention that they needed to make sure that they maintain proper services for things like businesses and rural communities, and there is a changing demographic as well when it comes to urban and rural communities, for example, in terms of operating costs and operations, there are a lot of communities that used to be bedroom communities to major cities that are now practically a part of those major cities or cities in their own right. Over the years things have changed significantly and we’ve seen a lot of urban sprawl and so they’ve had to make some significant changes to staffing to sort of get to that. But more to the point of your question, we didn’t dive too much into the aspect of, as you point out seniors who may need that, but when it comes to, I think it’s sort of hinted at when it comes to the issue of priority mails that they said there would have to be a balance between those sorts of things because obviously if you’re getting an audit notice or something from the Canada Revenue Agency or a bill in the mail, that should be more of a priority then let’s say a letter to your aunt letting them know how you’re doing on your vacation. I’m not sure how this is going to break down. Again, a lot of this will depend on the talks with the union and what requests the Canada Post the Crown Corporation will have for the federal government because there is an element of law that plays into this as well.

Jordan: Yeah, tell me about that. I didn’t know this, but it’s going to be a little bit difficult for Canada Post to make significant changes to how they deliver the mail without getting the feds on side.

Cormac Mac Sweeney: And there are laws that regulate the delivery of mail in Canada and Canada Post has to work within that. I believe it was in the eighties there was the Canada Post Act, and then there’s also been a charter that’s been created. It’s called the Canadian Postal Service Charter that affirms the commitment that Canada Post has to operate in a self-sustaining manner, but also lays out their obligations. And so they’re required to service all Canadians and all Canadian communities, but also to make sure that they follow certain guidelines. So for an example, if you put a letter in the mail in Halifax, Canada Post is required to deliver it to Vancouver within three days, and that’s a huge operating cost as we see less and less mail being delivered these days. So the quantities are down significantly from what they were just 20 years ago or so, and the costs have gone up to operate flights to send mail and parcels abroad or not even abroad within Canada, and so it’s just not sustainable according to Canada Post and something that even their union has confirmed that there is a problem. There’s a sustainability problem with the cost that they have to incur to deliver mail these days as we see parcels and letters shrink in terms of volume, so they have to work within those legal guidelines. Now, one thing that’s interesting about the postal service charter that was brought in in 2009 is that every five years or so it has to be reviewed by the government and that time is up. The last one was 2018, so they have to review this and take a look at it, and it just so coincides with bargaining talks that are happening with the union and I think Canada Post is trying to take advantage of this moment to try and modernize the postal system to reflect the realities that we’re seeing in Canada today. And the federal government could make changes to the law, but again, time is ticking. There are huge operating losses. Legislation doesn’t get passed on a dime if they want to make these significant changes to the law, it would require the government to make some changes to the charter itself and the government’s on board. The minister said this morning when asked about those legislative changes, he said, look, we want to make sure we have long-term sustainability for Canada’s postal system, which is a vital system for our country. And so they would look at any options to try and make sure that this is done, but I got clarification from his office as well. They want to make sure that they know what they’re dealing with and so they’re going to try and wait until the negotiations have really wrapped up between the Union and Canada Post to try and make these changes because they’re negotiations, there’s bargaining happening. What Canada Post wants may not be what they agree to in the end at the bargaining table. So the government’s just sort of waiting and seeing how this goes and we’ll see what happens with that process.

Jordan: What do you think the optics are going to be here now that this story is receiving a little more attention? I mean that’s one of the reasons we wanted to talk to you about it. I think it’s always interesting when kind of a constant of Canadian life appears perhaps likely to shift, and I know it’s the US Postal Services motto I guess, but the mailman is like every day, neither rain nor snow, nor heat, et cetera, et cetera. But now maybe every three days, it’s a big shift in public perception I think, of what the mail delivery is in this country.

Cormac Mac Sweeney: I think that shift has been happening for some time. I mean anecdotally, I remember my parents when I was growing up would buy a Christmas gift for the mailman who would come to our door and he was a nice guy and he was very kind to my parents and they’d pop out and say hello and have a chat for a few minutes. It’s different now. And even my parents have switched to some digital models to connect with family abroad and things like that as opposed to sending letters in the mail anymore and waiting for the mailman to come and I should say male carrier to be gender neutral about it. I was thinking about it a little bit earlier. It’s almost like the milkman again, sorry, the milk delivery person back in the fifties and sixties, it was common to see somebody delivering milk jars to your front door. That’s not a common thing anymore. And so I think we’re sort of seeing a shift to the way things operate. Obviously parcel delivery is going to be a huge thing as more and more people shop online, but the market share is changing for Canada Post. Things need to change there as well to try and address some of the financial issues that they’re facing

Jordan: Aside from actual shifts to the delivery schedule, what else is on the table to make ends meet around here? Are we talking job cuts? You mentioned they’re in negotiation with the union. Are we looking at just paying a whole lot more for stamps or packages?

Cormac Mac Sweeney: I asked both of those questions to Canada Post when I did an interview on the job aspect. They said that’s not what they’re looking for right now. And they say that they have not put job cuts on the table when it comes to negotiations with the union. And of course anytime there are bargaining talks, there’s like a million different issues that are going to be on the table. Job security is going to be one of them, but also you’re going to get pension talk, you’re going to get benefits talk, you’re going to get salary talk. Those are all things that happen at any bargaining table, and that’s what’s going to be on the table for this as well. Canada Post has said on the record to me that they’re not looking at job cuts at the moment, and they say they recognize that they’re a labour intensive business. They need staff to make sure the mail gets to people’s doors on time. When it comes to costs, we could see those go on the rise. That is another thing that they’re looking at. So we just recently had a rise in the price of stamps, but that’s not enough because the rises in the price for stamps have been just a few cents here and there, and in the last 10 years, Canada points out they’ve only had three price increases and yet inflation has been absolutely through the roof, and so it’s not enough to cover the increase in cost to deliver the mail to your door every day. And so they say they want more flexibility, which again comes back to some law changes. They want to make sure that they’re given the ability to have flexibility around making sure that the costs they incur keep up with the rate of inflation so that it can be revenue neutral or cost neutral so that they can not have to post the losses that we’ve been seeing. So expect if everything goes with the way that the options that they’re looking at right now that they’ve printed on their website, we could potentially be seeing less mail in your mailbox, or not necessarily less mail, but less days in which the mail appears in your mailbox, the cost of a stamp going up. It all depends on what those negotiations are, but we’ll see how that goes.

Jordan: What does the union want to do about this? Are they on board with that or do they have their own ideas?

Cormac Mac Sweeney: Well, the union, I tried reaching out to them and at the time that we’re recording this, they hadn’t returned my calls for an interview, however, they did put a statement on their website responding to the annual report. They didn’t specifically mention the issue of the cost of stamps or the delivery schedule for people’s mail. They do highlight the fact that they know this system needs to be reformed and there needs to be innovation, and it’s something that they’ve been preaching for some time for nearly a decade. Cup W-C-U-P-W is the name of the union. They’ve been promoting a number of different solutions, and I’ve covered this in different bargaining negotiations when they went on strike a couple of times. So they want to try and make the postal service more of like a community power, if you will. Those are their terms. They’ve proposed a couple of different solutions such as senior check-ins, which is something that is done in some countries in Japan. They do that where the postal worker, while they’re delivering the mail, can mark down the different homes where they can check in to make sure the senior is doing okay, provide that one-on-one relationship to people who might be feeling lonely or just check in on their health, see if everything’s okay. The other option that they’ve been talking about, which they’ve been talking about for some time, is postal banking. And one thing they point out is if they were given the power to be a smaller financial institution, they could provide services in communities that are underserved right now. So of course in cities you got a lot of banks everywhere, but maybe in some communities it’s harder to get to a bank, especially in rural communities where some really small towns may not have a bank you have to drive to get to a bigger town to do your banking. If they could provide basic banking services such as cashing checks or helping provide loans or something like that, small, small loans, then they might be able to help people in certain underserved communities with their financial needs. And it could also be another avenue for big profits for Canada Post to secure it long-term and offset the losses they may face with parcel delivery.

Jordan: Last question quickly. What’s the timeline on this? You mentioned the legislation isn’t going to happen overnight. When will we know exactly what Canada Post is going to do to try to make budget?

Cormac Mac Sweeney: Well, it may take some time. It’s not going to happen overnight. Negotiations are continuing. That can take some time. I know that there have been talks been happening for months between the two sides, but bargaining is always a very long process. I don’t think the government wants to leave this lingering for too long. They have a review they have to get done, they have to make sure that they move forward on this so that Canada Post is not facing another year of hundreds and hundreds of millions of dollars and losses. They need time to adapt to make sure that they’re financially stable. So I think there’s a push from both Canada Post and the government to get going on this. But then again, the legislative process as well is not going to be that simple. You introduce legislation unless you have all party support, it can take some time. It needs to be studied. So I think there’s a desire from some elements of this to get going as soon as possible, but also not to step on the toes of the bargaining process. From the government’s point of view, they seem to be hoping to wait for a little bit, but Canada Post also mentioned the possibility of some interim measures as they continue the bargaining process. So we’ll see what comes out from both the government side and the bargaining table.

Jordan: Cormac, thank you as always for this.

Cormac Mac Sweeney: Anytime.

Jordan: Cormac Mac Sweeney, Parliament Hill reporter for CityNews. That was The Big Story. For more from us, you can head to TheBigStorypodcast.ca, and if you want to give us feedback, you can email us hello@TheBigStorypodcast.ca or send us a voicemail 416-935-5935 or from this one episode only, you can mail us a letter. You can send it to The Big Story, care of Jordan Heath-Rawlings, 333 Bloor Street East, Second Floor, Toronto, Ontario, M4W1G9. I will be so impressed if one of you sends us a real letter. The Big Story is available in every podcast player, and of course on your smart speaker, just ask it to play The Big Story podcast. Thanks for listening. I’m Jordan Heath-Rawlings. We’ll talk tomorrow.