Canada Post reports record $407M loss as labour dispute drags on

Canada Post has posted the largest before-tax quarterly loss in its history, reporting a $407-million shortfall in the second quarter of 2025 as parcel volumes plunged during protracted labour strife with its unionized workforce. The losses come after Ottawa extended more than $1 billion in repayable funding in January to keep the Crown corporation solvent.

With the company still deep in the red despite receiving more than $1 billion in repayable funding from Ottawa in January, its ability to pay back that loan looks increasingly uncertain.

The Crown corporation said the losses, recorded between April and June, were driven largely by a sharp decline in parcel deliveries. Parcel revenue fell by $288 million compared to the same period last year, with 25 million fewer packages handled. The company noted that more than half of its year-to-date losses occurred in June, when “labour uncertainty” was at its peak.

Canada Post attributed the losses to a national overtime ban by the Canadian Union of Postal Workers (CUPW), in place since May 23, and to lingering effects from a month-long strike late last year. The company said customers were “driven to competitors that could offer delivery stability.”

The union rejected that framing, pointing instead to the need for investment and service expansion. “There is no doubt: the report makes clear Canada Post needs to grow its revenues. That’s why CUPW has been campaigning for service expansion projects to build the public post office,” the union said in a release Tuesday.

The losses underline what an Industrial Inquiry Commission described earlier this year as an existential crisis for the postal service. Commissioner William Kaplan’s May report concluded Canada Post was “effectively insolvent,” recommending reforms such as phasing out door-to-door mail delivery for individual households, replacing it with community mailboxes, and introducing more flexibility in parcel operations.

Canada Post recorded an $841-million loss in 2024, its seventh consecutive annual deficit, and has relied on federal support to stay afloat. In early 2025, Ottawa made up to $1.034 billion in repayable funding available; Canada Post also faced a $500 million debt repayment in July.

Negative outlook

(Courtesy of Canada Post)

The corporation’s financial problems have now collided with a stalemated labour dispute. CUPW, representing about 55,000 employees, has been without a contract since November 2023. Workers rejected Canada Post’s “final offer” in a vote earlier this year. The company proposed a 13 percent wage increase over four years, while CUPW is seeking 19 percent, including a nine percent boost in the first year.

The two sides are also divided over weekend parcel delivery. Canada Post has pushed for part-time, flexible employees to handle Saturdays, Sundays and holidays, while the union insists full-time letter carriers should perform the work.

Talks were postponed as the company reviewed CUPW’s latest proposal, then resumed August 27 with federal mediators. Canada Post had earlier said further sessions were scheduled for August 22 and 25, though the latter was cancelled.

The federal government has already intervened once, ordering postal employees back to work during the holiday season last December. In January, Ottawa also made up to $1.034 billion in short-term repayable funding available to keep Canada Post solvent through the 2025-26 fiscal year. The government acknowledged the measure was only a temporary financial bridge and would not fix the corporation’s structural problems. With Canada Post still posting record losses, the prospect of repayment appears increasingly doubtful.