Canada Post will be allowed to end door-to-door mail delivery to individual addresses and close or convert some post offices in a bid to stabilize its operations and restore its financial footing, the federal government announced Thursday.
The government will also allow Canada Post to adjust its delivery standards for non-urgent letter mail, allowing it to be moved by ground instead of air to “reflect today’s lower volumes.”
Joël Lightbound, the minister responsible for Canada Post, said the changes are necessary to ensure the survival of the beleaguered national mail carrier and Crown corporation.
“This situation is not sustainable,” he said. “Canada Post is effectively insolvent, and repeated bailouts are not a long-term solution.”
The government has had a moratorium in place on converting home delivery to community mailboxes since 2015.
With that barrier lifted, the remaining one-quarter of Canadians still receiving daily mail delivery — about four million addresses — will now be served by community, apartment or rural mailboxes instead.
Lightbound said those conversions will happen over the next nine years, “the bulk of which” will be in the next three to four years.
The government says lifting the community mailbox moratorium alone will save Canada Post $400 million annually, with another $20 million saved by relaxing delivery standards.
A government official said Thursday that the two-to-four-day delivery standard for regular mail will be relaxed to between three and seven business days.
The official could not immediately say if businesses will see similar delays in their mail or if they could also be served by community mailboxes going forward.
They noted that Canada Post has a program in place for people with mobility issues and other needs to register for home delivery in areas served by community mailboxes.
Lightbound said lifting the rural post office moratorium — which has been in place since the 1990s — reflects the fact that many areas once considered rural have grown to become suburban or urban in the decades since. The moratorium had ensured post offices operating as close as 400 metres from each other in those areas were forced to stay open unnecessarily.
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Lightbound insisted the change will not mean rural communities lose access to their mail.
“I want to be clear: Canada Post has an obligation to serve all Canadians in every community in Canada, and that will not change,” he said.
Lightbound said Ottawa will also be reviewing how to “modernize and shorten” the process for increasing stamp rates, a key revenue line for Canada Post.
Canada Post will be tasked with delivering an action plan within 45 days on how it plans to put the changes into place, including their impact on workers and customers, as well as a plan on how to protect rural and Indigenous mail service.
The minister said he’s also asking Canada Post to take “immediate steps to address its financial challenges” including finding efficiencies, reducing costs and overhead, and reviewing and “lightening” its management structure.”
“Canada Post is facing an existential crisis. It’s an institution that is worth saving and we’re beginning the work today,” he said.
The moves announced Thursday were among the government recommendations included in a report by the Industrial Inquiry Commission released in May, which found Canada Post is essentially “bankrupt” and needed sweeping reforms to its business to stay afloat.
The company posted its worst-ever quarterly results last month with a $407-million loss in the second quarter of 2025, and says it has lost over $5 billion since 2018.
Ottawa provided a $1-billion financial lifeline in January to keep the company operational.
Over the past 20 years, Canada Post has gone from delivering 5.5 billion letters annually to two billion, the company says, despite a growing population and number of households.
Parcel deliveries have also declined thanks to what Lightbound said was customers turning to “faster and more efficient” private competitors like UPS, Purolator and Amazon. As a result, Canada Post’s market share of those deliveries is now below 24 per cent, compared to 62 per cent in 2019.
The Canadian Union of Postal Workers, which has been seeking a new contract for over a year in an increasingly bitter labour dispute, began warning about the potential impact of cuts to the postal service last week, when news of a potential review of the government’s Canada Post mandate began circulating.
The company has frequently cited its dire financial situation for why it cannot meet many of the union’s demands, particularly on wage increases and stopping contract work.
Pressure has been building on the government for years, and particularly after postal workers went on strike for over a month last winter, to step in and allow Canada Post to make necessary changes to its operations.
Canada Post said last week it plans to present new global offers to the union that will “allow the parties to return to the table next week” for negotiations.
“The timing of the announcement coupled with new global offers could reveal a lot about Canada Post’s plans for bargaining, our jobs and the future of the public post office,” CUPW national president Jan Simpson said in a statement Thursday ahead of Lightbound’s announcement.
The union met with Lightbound last week but a follow-up meeting scheduled for this week was postponed.
Lightbound said last week’s meeting was “productive” and that it informed his request to the company to take a “cold hard look” at its management structure, as well as modernizing the stamp rate process.
“(CUPW workers) play an essential role in Canada Post’s future and I know that — just as much as I do, just as much as Canadians do — they care very much about the future of Canada Post and its financial viability.”
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