A Canada Post mailbox is seen near Parliament Hill in Ottawa, Thursday May 5, 2016.Adrian Wyld/The Canadian Press
Canada Post generated what it called a "modest" profit of $99-million in 2015 – down from $198-million in 2014 – as a chronic decline in its letter business and higher benefit costs overwhelmed growth in parcels.
Total revenue was flat at $8-billion, the federal Crown corporation reported Friday.
"Canada Post, which is required by law to be financially self-sufficient, has been struggling to cope with a steady decline in its main line of business – delivering letters. It's staked its future on online shopping and parcels, where volumes grew 9.7 per cent last year.
"For Canada Post, 2016 will be another crucial year in transforming the business from a mail-centric model to a parcel-centric business," the company said in the report.
President Deepak Chopra said that while Canada Post is embracing the digital economy, it still faces "serious challenges."
Canada Post said it expects Canadians to send fewer letters again this year, "but the erosion … is difficult to predict and represents a significant risk to the corporation."
The volume of letters fell 5.2 per cent in 2015, and are now down 32 per cent from their peak in 2006. The company's direct mail business was flat last year.
The cost of providing benefits to its 64,000 employees was also sharply higher last year – up $189-million, or nearly 18 per cent.
A key part of the postal service's transformation was a plan to end high-cost home delivery to the 5.1 million households and businesses that still get. But the new Liberal government halted the shift to community mail boxes just days after taking office last October. Ending delivery was to have saved up to $500-million a year.
On Thursday, the government announced it's launching a review of Canada Post's operations – a third such review in the past decade. Ottawa has appointed a four-member panel that will look at the future of the Crown corporation, including whether the national letter carrier should get back into the banking business and whether to restore or change home delivery.
But Public Services Minister Judy Foote said privatization of the post office is not on the table.