Canada Post isn’t broken, but the rules are

Outdated regulations and unfair competition are holding back a service Canadians still depend on every day

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News headlines tell Canadians that Canada Post is unsustainable, bleeding money and in need of deep cuts to survive. Those cuts include eliminating door-to-door delivery and closing selected post offices. But this ignores the fact that real solutions exist to strengthen this essential national service.

The economic challenges are real. Canadians are sending fewer letters than they did in 1981, when Canada Post became a Crown corporation and took on its universal service obligation to deliver mail, at no charge, to every household in Canada, no matter where they live.

Canada Post’s revenue model was built on that mandate. It included an exclusive privilege over mail delivery and the right to issue stamps. Until letter volumes began to decline about 20 years ago, this monopoly generated enough income to subsidize delivery to all addresses, including remote communities. But with parcel volumes now outpacing letters, that model is no longer sustainable. The result: persistent losses.

If parcel delivery is growing, why can’t Canada Post just compete? Because, unlike letter mail, parcel delivery is completely unregulated. Canada Post must serve every address, while private courier firms tend to prioritize the most profitable routes—mainly in urban and suburban areas. That’s not a level playing field. The public service is effectively cross-subsidizing rural delivery, while its private competitors operate under no such obligation.

Still, Canada Post can offer essential services and good jobs in an e-commerce era if it’s allowed to evolve and if the rules governing the sector are updated. Three key steps are needed to make this happen.

First, Canada Post must be permitted to expand its range of services to include banking, insurance and cellphone service, as many other national postal agencies already do. In France, the national postal system operates La Banque Postale, a fully functional public bank that serves millions. Italy’s post office has become a major mobile phone provider. These examples show what’s possible when postal systems are allowed to modernize.

Given Canada’s highly concentrated banking and telecommunications sectors, an affordable public option would give Canadians more choice and improve access, particularly in underserved or remote areas where large banks and telecom firms have scaled back.

Second, governments must modernize labour regulations in the delivery sector. Some courier firms classify delivery workers as independent contractors, a model that can limit access to job protections. Independent contractors typically do not receive job security, minimum wage guarantees or other protections available to employees. Although these arrangements have faced legal challenges across Canada, they continue to be widely used.

Labour standards should be enforced consistently across the industry to ensure that all workers, whether public or private, are treated fairly and compensated appropriately.

Third, private courier companies should be required to help fund Canada Post’s universal service obligation. This kind of shared responsibility already exists. Telecom providers are required to support rural broadband through the CRTC’s Universal Service Fund. A similar framework could apply to courier companies, ensuring they help cover the costs of reaching Canadians in areas they themselves do not serve.

Without shared responsibility, the burden falls entirely on the public system. Canada Post continues to deliver mail and parcels in places where private carriers simply won’t go because Canadians are entitled to equal service. That principle is at the heart of our postal system; we shouldn’t let it fade because of market pressure or lack of oversight.

Rather than pushing Canada Post to join a race of shrinking wages and service cuts, it’s time to provide the tools and policy support it needs to succeed. Without reform, we risk further service erosion, rising costs for rural Canadians and the decline of a national service millions still depend on. With the right policy choices, Canada Post can be sustainable, fair and competitive for decades to come.

Simon Enoch is a senior researcher with the Canadian Centre for Policy Alternatives in Saskatchewan.