Canada announced on Thursday that it had ordered its beleaguered postal service to end door-to-door mail delivery, shut down some rural post offices and consolidate its operations as steep financial losses threaten the mail carrier’s survival.
Canada Post, a government-owned mail service, has lost more than 5 billion Canadian dollars, or $3.6 billion, since 2018, largely because of a drastic drop in the use of mail to send and receive letter correspondence. The postal service has not been able to make up the difference by moving parcels, a highly competitive area of the shipping industry.
“Canada Post is effectively insolvent, and it is facing an existential crisis,” Joël Lightbound, Canada’s minister for public services, said at a news conference on Thursday.
The government said its cost-cutting measures would help stabilize Canada Post’s finances following multiple bailouts. They are also likely to result in significant layoffs among the postal staff’s 68,000 employees.
“Today’s announcement will allow us to make the changes needed to restore Canada’s postal service for all Canadians by evolving to better meet their needs,” Doug Ettinger, Canada Post’s chief executive, said in a statement.
At-home postal delivery had already been a fading tradition across much of Canada with only about 25 percent of Canadians getting mail at their homes. For most Canadians, mail is placed in individual boxes that are part of community mailboxes near their homes or apartments.
Still, the elimination of remaining door-to-door service translates to about four million addresses, the government said.
“The data was screaming at us that Canada Post was desperate to be reorganized and restructured,” said Ian Lee, a business professor at Carleton University in Ottawa who has studied the postal service.
Canada Post had been moving toward ending door-to-door delivery until Justin Trudeau, the former prime minister, made it a prominent issue in his successful 2015 election campaign. One of his first acts after taking office was to order the post office to stop its shift to community mailboxes.
Since then, the volume of letter mail has plunged, particularly during and after the Covid-19 pandemic.
While Canadians are not in favor of fully ending door-to-door delivery, according to a June poll by Angus Reid Institute, a nonprofit polling firm, they are more supportive of changes to Canada Post’s operations and reductions in its service than they were in previous years, given the postal service’s precarious future.
“The political decision is that we can’t, Canadians can’t, be footing an ever-growing bill year after year,” Mr. Lightbound said.
No firm date has been set for the end of at-home mail delivery, but the changes will be gradually implemented, officials said.
Others measures include transporting certain mail by ground rather than by air to save on costs. The government also revoked a ban on closing rural post offices that was introduced in 1994. At that time, those closings were also politically contentious.
The union that represents postal workers and the post office are embroiled in contract negotiations that led to a strike earlier this year. The union was expected to present its latest offer on Friday.
The union did not respond to a request for comment.
Stephanie Ross, a professor of labor studies at McMaster University in Hamilton, Ontario, said another walkout was now likely. “What leverage the union had at the bargaining table has now been significantly undermined,” she said. “I can’t imagine how angry people are.”
Ian Austen contributed reporting from Ottawa.