Canada Post

has been instructed by the federal government to ease its delivery standards, including the frequency of door-to-door mail delivery, to “stabilize” the Crown corporation’s financial situation.

The minister of government transformation, public services and procurement, Joël Lightbound, has announced several measures he said will help stabilize Canada Post’s finances by generating “close to half a billion dollars per year.”

“Canada Post is effectively insolvent and it is facing an existential crisis,” he said during a press conference on Thursday, adding that the corporation is currently losing $10 million every day.

In the second quarter this year, Canada Post lost $407 million — marking its worst ever quarterly earnings report.

One of the recommendations that the minister said will be implemented is adjusting weekly mail delivery to two or three days. At present, mail is delivered to every address five days a week.

Lightbound said the change reflects today’s lower mail volumes. The average household receives only two letters per week, yet operations remain designed for far higher volumes.

The change will allow non-urgent mail to be moved by ground instead of air, which will help Canada Post save about $20 million per year, he added.

Lightbound said that while the number of letters has dropped, the number of households has increased in recent years. This means Canada Post is delivering fewer letters to more addresses.

The minister also noted that while letter mail volumes are declining, Canadians have been sending and receiving more packages than ever before. In doing so, however, they are increasingly turning away from

Canada Post toward faster, more cost efficient private competitors.

In 2019, Canada Post delivered 62 per cent of all parcels sent in Canada. Today, the number has dropped to less than 24 per cent and is shrinking fast, Lightbound said.

Another announced change is ending the government’s moratorium on community mailbox conversions.

He said Canada Post will be authorized to convert four million addresses to community mailboxes, resulting in close to $400 million in annual savings.

Three-quarters of Canadians already receive mail through community, apartment or rural mailboxes, while one-quarter has door-to-door mail delivery.

“It’s an expensive service,” said Lightbound. Delivering mail to an individual address costs the corporation $279 a year, while delivering to a community mailbox costs $157 a year.

The government will also lift the moratorium on rural post offices, which has been in place since 1994.

“It has not evolved in 30 years, but Canada has changed,” he said.

Lightbound said areas that used to be rural may now be suburban or even urban, however, under the moratorium, the post offices are still required to operate as rural. The change will allow Canada Post to right-size its network to adapt to today’s demographics, he added.

The minister said Canada Post must return to the government with a plan to modernize and streamline its network.

The government is also reviewing the process for increasing the stamp rate to modernize and shorten it, he said.

On Wednesday,

Canadian Union of Postal Workers

said Lightbound had not given the

union

indication that the announcement was coming.

Last week, the union, which represents approximately 55,000 workers at Canada Post, announced it would stop delivering flyers or neighbourhood mail in an effort to escalate

strike actions

.

Negotiations between CUPW and Canada Post has been ongoing for the last 21 months.

Lightbound skirted questions about potential

layoffs

in relation to the new changes.

“I leave it to the corporation to review its structure, review its operation, to reduce costs,” he said.

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• Email: dpaglinawan@postmedia.com