Canada Post profit evaporates in 2011
Canada Post showed an annual loss of $253 million in 2011, the first time the agency has failed to make a profit in 16 years.
The Crown corporation said in a release Tuesday that a labour disruption, the continued erosion of its core mail delivery business, growing pension obligations and a Supreme Court decision on pay equity were a drag on its financial results.
On an unconsolidated basis, the core mail service lost $327 million last year. But Canada Post's three subsidiaries, Purolator Inc., SCI Group Inc. and Innovapost Inc. were able to mitigate that somewhat.
In June, a 25-day lockout effectively shut down mail service and corresponding revenues across Canada. Canada Post said that caused mail volumes to fall another 4.6 per cent last year from 2010's level. Canada Post now ships 20 per cent less mail than they did five years ago in 2007.
The company put $510 million into its pension fund last year, but still faces a $4.7 billion deficit.
Canada Post is mandated by parliament to be self-sufficient, and is not supported by taxpayer dollars. "Deep and enduring shifts in technology and demand for postal services point to the urgent need to transform the business," the company said in a release.
The company has targeted the growth in e-commerce and e-delivery as central pillars in its turnaround plan.
"It is essential that this transformation also address labour costs through the collective bargaining process," the company said. "Achieving a competitive labour cost structure will be crucial given that home delivery of parcels-a highly competitive business-is becoming a critical part of our future activity."
