The Community Mailbox Financial Fiasco at Canada Post

CanadaPostCommunityMailboxes4

Canada Post announced in 2013 an estimated annual $400 to $500 million in savings by converting door to door to community mailboxes. It was part of their five-point plan to bring Canada Post into an economically stable future.[1]

However, a change in Government in 2015 halted such plans. They were only able to achieve around 20% of this financial goal.

As at the end of October 2015, we have completed community mailbox conversions for approximately 850,000 addresses across Canada. It is expected that these conversions will contribute an estimated $80 million in annual savings to Canada Post. These were the first conversions of households previously receiving mail at the door and were part of a multi-year national initiative that was to involve up to five million addresses. On October 26, 2015, Canada Post announced that it is temporarily suspending future conversions and will work with the Government of Canada to determine the best path forward given the ongoing challenges faced by the Canadian postal system. As a result, all conversions planned for November and December 2015 and those announced for 2016 were placed on hold.[2]

This is a major change in financial plans by Canada Post. If the company was a publicly traded one, business common sense would immediately require the CEO and board to explain to the shareholders how they would adapt. As of late April 2016, there is no indication by the Government nor Canada Post how they are going to alternatively raise the $320 to $420 million lost in anticipated savings.

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Footnotes:

  • [1] Dec. 11, 2013 News Release by Canada Post Corporation. Canada Post unveils Five-point Action Plan. https://www.canadapost.ca/cpo/mc/aboutus/news/pr/2013/2013_action_plan.jsf

  • [2] Canada Post Corporation 2015 Third Quarter Financial Report. For the period ended October 3, 2015. Pg. 2 https://www.canadapost.ca/assets/pdf/aboutus/financialreports/2015_Q3_report_en.pdf See also: Canada Post to halt transition to community mailboxes. Jason Fekete and Robert Sibley. Ottawa Citizen. Oct. 26, 2015. http://ottawacitizen.com/news/national/canada-post-halts-transition-to-community-mailboxes

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