OTTAWA — The federal government announced on Thursday that Canada Post will discontinue door-to-door mail delivery and lift the moratorium on closing rural post offices. Procurement Minister Joël Lightbound made the announcement as part of a strategy to address the Crown corporation's financial struggles, which have resulted in billions of dollars in losses.

Lightbound stated, "Canada Post is effectively insolvent, and it is facing an existential crisis." The decision follows recommendations from a report by William Kaplan, who was tasked with assessing the ongoing labor dispute between Canada Post and its union, as well as the corporation's financial health.

The report suggested transitioning to community mailboxes, relaxing delivery standards, and allowing the closure of rural post offices. Lightbound emphasized the urgency of these changes, noting that Canada Post has accumulated over $5 billion in losses since 2018 and is projected to lose $1.5 billion in 2025. He highlighted that the corporation is currently losing approximately $10 million daily.

The volume of letters and parcels delivered by Canada Post has significantly decreased. Lightbound pointed out that the corporation now delivers about 2 billion letters annually, a steep decline from 5.5 billion two decades ago. Despite an increase in the number of households served, only 25% of Canadians currently receive home delivery, with the remainder using community mailboxes.

The Crown corporation's share of the parcel market has also dropped dramatically, falling from 62% in 2019 to just 24% today. Lightbound indicated that closing some of the 4,000 rural post offices could save approximately $400 million, arguing that many of these offices are no longer in rural areas.

"Canada has changed. This means that areas that used to be rural may now be suburban or even urban, but are still required to operate as rural post offices," Lightbound said. He called for Canada Post to present a plan to modernize and adjust its network.

These changes come amid ongoing contract negotiations between Canada Post and the Canadian Union of Postal Workers (CUPW), which have been stalled for over 18 months. The negotiations led to a month-long strike last year. Recently, the union began a ban on delivering flyers and lifted a previous ban on overtime work.

In early August, CUPW members rejected Canada Post's final contract offer, which was overseen by the Canada Industrial Relations Board. The union's president, Jan Simpson, expressed concerns about potential service cutbacks, stating, "For much of the past year, Canada Post has been laying the groundwork for massive service cutbacks. The Corporation has taken every chance it can to play up its financial condition, blaming an ‘outdated’ regulatory framework ‘built for a previous era.'"

The government has given Canada Post 45 days to develop a plan for implementing these significant changes.