Powering future growth and innovation

Canada Post’s transformation will help build a modern, future-ready postal system that delivers the services Canadians and businesses want and need. We understand that we must innovate our operations and bolster our service offerings so that we can go the extra mile for customers. Elements of the proposed transformation plan are contingent on Canada Post’s tentative agreements with the Canadian Union of Postal Workers (CUPW) being ratified by members in a vote scheduled from April 20 to May 30, 2026.

Our proposed plan will see us strategically invest in growing services that improve the customer experience and support our financial self-sustainability, while leveraging the company’s core network, assets and brand. These measures include growing our parcel business, establishing a sustainable pricing strategy for letter mail, and diversifying our revenue streams.

Parcel growth

Parcel revenue growth is crucial to sustaining the financial viability of the postal network as mail volumes continue to steadily erode. While letter mail remains an important revenue generator, parcel delivery presents the greatest opportunity – with the Canadian ecommerce market projected to double over the next decade.

Canada Post remains a parcel market leader for small and mid-sized merchants, delivery to rural, remote and Indigenous communities, and for ecommerce returns. However, our industry-leading role in many parcel segments has diminished since 2019 due to rapidly rising competition that emerged during the pandemic-driven ecommerce boom.

While our market share has significantly declined, our unrivalled network and processing capacity position us for success in ecommerce. Guided by our proposed transformation plan, we aim to defend and grow our parcel business in several ways:

Offering regular weekend delivery: We plan to initially launch it in select major markets to meet evolving customer expectations. Offering weekend delivery keeps Canada Post services competitive and allows the company to serve and win a larger market to achieve its growth targets.
Improving our offerings to small and mid-sized businesses: We’ll help entrepreneurs launch, grow and operate their business with a fully integrated range of our shipping and marketing services. We want to become a one-stop shop for merchants.
Improving our ecommerce returns services: We will continue to improve our returns solutions by broadening the services offered to merchants and enhancing the consumer experience.
Enhancing local next-day delivery: This is a growing market segment where Canada Post can be competitive and win new business.

Targeted growth segments

Weekend delivery – which is now built into our tentative collective agreements with CUPW – is a critical capability for our future success. Monday-to-Friday, five-day-per-week service is no longer enough to meet Canadians’ ecommerce expectations. Rather, weekend delivery has become table stakes to win volumes.

We hope to launch weekend delivery in Toronto, Montréal and Ottawa in late 2026, and gradually expand it to other viable markets across Canada. Weekend delivery is essential to our broader parcel growth strategy and is designed to meet evolving customer expectations and remain competitive in the parcel delivery market.

Canada Post is focused on market segments that it can serve better and more efficiently than its competitors, while leveraging the company’s competitive advantages. This growth fits within our existing capacity and includes the following:

Weekend delivery for urban and rural-destined parcels;
Parcels originating from small businesses;
Regional and national shipments;
Packets co-delivered with mail to centralized delivery points; and
Returns that leverage our retail locations, street letter boxes and delivery network.

Letter mail pricing

Letter mail has long been the bedrock of the postal system, but it has been steadily declining for two decades. Domestic letter mail volumes have fallen by more than 60 per cent since the peak mail year of 2006, driven by digital alternatives in banking, billing and communications. This ongoing decline is eroding an important source of revenue for Canada Post, at the same time that delivery costs keep increasing – with more than 200,000 new delivery points added annually.

Canada Post’s letter mail pricing initiative included in the proposed transformation plan aims to address this secular decline in letter mail volumes and revenue. Our goal is to establish a sustainable pricing strategy for letter mail, which would help ensure the organization’s financial stability and support reinvestment in infrastructure and service improvements.

Our approach includes a strategic review of pricing models to better align with current market realities and operational costs. Canada’s letter mail rates remain underpriced in comparison with other western postal administrations, many of which have already undergone transformations. Our rates are among the lowest in the OECD (Organisation for Economic Co-operation and Development), even though Canada faces unique cost pressures from vast geography and low population density.

Other postal administrations have modernized their pricing frameworks to reflect these realities and maintain financial sustainability. Canada Post’s current approach leaves it increasingly out of step with global peers and unable to fully meet its legislative mandate to operate on a self-sustaining basis.

Proceeding carefully

Canada Post fully understands that Canadians and businesses have faced rising costs on the goods and services they need. Whenever there is a regulated postage rate increase, we take care to ensure the increases are fair and reasonable and that our prices continue to provide good value for consumers and small businesses.

Our research shows that modest price increases to letter mail currently have minimal impact on volume. This presents an important opportunity to generate additional revenue that can support rising delivery costs without accelerating volume decline, while also minimizing future reliance on taxpayer funding.

Going forward, rate increases would aim to normalize prices to international standards, keep up with inflation and respond to the rising costs of delivery on an ongoing basis.

Updated process for setting postage rates

Proposed amendments to the Canada Post Corporation Act, included in Budget 2025, will create a more flexible process for implementing letter mail price increases in a timely manner.

Currently, it can take up to nine months from the date Canada Post proposes a price increase to the date it takes effect. The proposed updated process will allow Canada Post to more quickly align its postage rates with a changing economic environment. The Corporation will continue to engage with the government on this matter.

Diversification and other income sources

Canada Post is planning to leverage its network, assets and brand to diversify its lines of business and tap into new revenue streams. We plan to expand our service offerings beyond the physical delivery of mail and parcels. We’re examining ways to utilize our size and resources to address the unmet needs of Canadians, businesses and communities we serve. This includes opening up new revenue streams that will support our financial self-sustainability and strengthen the postal service for the future.

We’re exploring and prioritizing several areas for diversification, including financial services, an ecommerce platform called Canada Shops, multi-channel advertising and new adjacent services, among others:

Financial services: Build partnerships with financial service providers to offer selective retail banking services.
Canada Shops: Host an ecommerce platform to connect Canadian consumers with Canadian-owned and operated businesses.
Multi-channel advertising: Offer advertisers multi-channel advertising opportunities that reach physical and digital audiences.
New adjacent services: New potential adjacent services within our existing network include government services, support for peer-to-peer marketplaces, and products and services for small businesses. Additional opportunities will be identified, assessed and pursued where appropriate.

Canada Post is open to new opportunities that require low capital expenditure, carry low and manageable risk, and fit well with its existing network, assets and brand. The company is exploring initiatives that align with its core business and strengths, and are complementary to maintaining universal service for Canadians.

Direct marketing remains important revenue generator for Canada Post

Canada Post’s direct marketing services continue to provide businesses, institutions and charities with an effective way to reach Canadians across the country. In an increasingly complex and competitive advertising environment, direct mail offers a tangible channel that complements digital marketing and helps organizations connect with customers in meaningful ways.

Direct marketing represents one of the Corporation’s largest commercial lines of business, generating hundreds of millions of dollars in annual revenue and contributing significantly to Canada Post’s path toward financial self-sufficiency. Products such as coupons, flyers and brochures place messages directly into households, helping drive traffic to local businesses and online channels.

These services are particularly important for small and mid-sized businesses, charities and public institutions that rely on direct mail to reach local communities at scale. Canada Post’s national delivery network and trusted brand continue to underpin the resilience of this channel.

The Corporation will sustain and evolve its direct marketing services by improving efficiency, enhancing targeting capabilities, and strengthening integration with digital marketing channels, while also exploring opportunities across other complementary media assets, including out of home.

These efforts are intended to attract new customers, support existing ones and maintain the long-term value of this important line of business.