Canada Post gets $1-billion loan from federal government amid financial struggles

Canada Post gets $1B loan

Photo: The Canadian Press

The Canada Post logo is seen on the outside the company's Pacific Processing Centre, in Richmond, B.C., on Thursday June 1, 2017. THE CANADIAN PRESS/Darryl Dyck

The federal government is providing a $1-billion loan to Canada Post to help the Crown corporation continue operating amid "significant financial challenges."

Canada Post says it was notified it will receive the $1.034 billion in repayable funding through the 2025-26 fiscal year.

Canada Post says that while the funding will help it "maintain its solvency and continue operating," the loan will not solve its structural issues. It says it has incurred significant annual losses since 2018 "fuelled by rapid changes in the postal and parcel delivery sectors, high labour costs and legacy regulatory measures."

Public Services and Procurement Canada says the money will be provided on an as-needed basis to pay non-discretionary obligations, noting Canada Post would have fallen short of its necessary operating cash requirements in 2025 despite recently raising the price per stamp.

The department calls it a "needed financial bridge" to ensure Canada Post can continue operating while it works with Ottawa on long-term changes to ensure its viability.

The lifeline comes after a strike by Canada Post workers brought mail delivery to a halt late last year until the federal government stepped in to end the job dispute.