Canada Post to End Home Delivery in Financial Overhaul
The Canadian federal government is implementing a modernization plan for Canada Post, which is projected to lose $1.5 billion by 2025. Key changes include allowing Canada Post to end home delivery, potentially saving $400 million annually, and reviewing the moratorium on rural post office closures. Government Transformation Minister Joël Lightbound announced the measures on Thursday, stating that "Canada Post is effectively insolvent."
Modernization Plan Details
A central component of the plan involves transitioning the remaining four million addresses that still receive home delivery to community mailboxes. This transition is projected to take about nine years, with a majority of the changes occurring within the first four years. While home delivery will be phased out, the delivery accommodation program will continue to provide accessibility options for individuals with mobility issues.
In addition to changes in delivery methods, Canada Post will also adjust its delivery practices by using ground transportation instead of air for non-urgent mail. This is expected to save the corporation $20 million each year. The government will also review its stamp pricing process to streamline increases.
Rural Post Office Closures and Financial Review
The plan includes lifting the 1994 moratorium on closing rural post offices. The government intends to reduce the number of locations in over-served areas, while preserving rural, remote, and Indigenous post offices in needed areas. Lightbound has requested that Canada Post explore additional cost-saving measures and reduce its management structure as the government seeks efficiencies across all departments.
The Kaplan Report and Declining Mail Volume
These changes align with the recommendations from the May 15, 2025, Industrial Inquiry Commission led by William Kaplan. The Kaplan report highlighted the significant decline in letter mail volume, dropping from 5.5 billion letters in 2006 to 2.2 billion in 2023, despite an increase in the number of addresses. According to the report, Canada Post’s infrastructure is unsustainable with such a drastic decline in volume.
"There is every reason to believe — and no reason not to — that the letter mail decline will continue and that this trend is irreversible: not a levelling off, but almost certain and eventual extinction," stated the Kaplan report.
Ongoing Labour Dispute
The announcement comes amid a prolonged labour dispute with the Canadian Union of Postal Workers (CUPW). Negotiations for a new collective agreement have been ongoing for over a year and a half. The union rejected the government’s offer of a 13% pay increase, demanding 19%. CUPW has initiated job action, including refusing to deliver flyers, in an effort to bring Canada Post back to the negotiating table.
Canada Post has asked the union to deliver flyers ahead of further talks and claims that this ban is affecting businesses, newspapers and charities. Pressure is mounting to reach a deal as the holiday season approaches. Canada Post has 45 days to examine the government's recommendations.
