Canada Post is on track for its worst fiscal year as it reports significant financial losses and anticipates needing another bailout by early 2026. The Crown corporation, which began the year with a $1 billion federal loan, announced on Friday that it expects to exhaust these funds by December 31 due to ongoing cash flow issues.

In its latest quarterly report, Canada Post revealed a record loss of $541 million before taxes for the third quarter. This figure marks a staggering 72% increase from the $315 million loss reported during the same period last year. The organization attributed its financial struggles to fierce competition in the parcel delivery market and disruptions caused by a prolonged labor dispute involving its 55,000 mail carriers.

The initial loan of $1.03 billion from the federal government was intended to support the corporation through the fiscal year ending March 31, 2026. However, Canada Post now states that it will need to seek short-term financing or other measures to maintain operations over the next year. "The corporation will need to access short-term financing facilities or other measures to maintain solvency and support operations over the next 12 months," the report indicated.

Revenue from parcel deliveries, which was the corporation's most profitable segment last year, plummeted by 40% to $450 million. This decline was accompanied by a drop in volume of 27 million pieces, leading to parcel sales falling below those of traditional mail delivery. The mail delivery segment has faced a continuous decline in letter volume for nearly two decades.

"The company is facing the most severe and challenging financial situation in its history," Canada Post stated. Since 2018, the organization has accumulated losses exceeding $5.5 billion, raising critical questions about its business model and future viability.

The ongoing negotiations with the Canadian Union of Postal Workers have now extended beyond two years, coinciding with the busy holiday season. CEO Doug Ettinger noted at a recent annual meeting that the company anticipates losing up to 30,000 employees over the next decade due to retirements and voluntary departures as it seeks to control costs.

In September, Federal Procurement Minister Joël Lightbound announced a series of changes aimed at helping Canada Post adapt its business model. These changes include the ability to modify mail delivery standards, close some rural post offices, and expand community mailbox services to more locations. Canada Post has submitted a plan to the federal government to implement these changes, although details remain confidential while under review.

For the first nine months of the year, Canada Post reported a loss of $989 million, compared to $345 million during the same period last year. The majority of these losses occurred in the second and third quarters, reflecting the impact of labor disruptions on the business. The organization continues to face significant challenges as it navigates this financial crisis.