Canada Post is broken beyond repair

Posted on October 2, 2025 by admin

Canada Post is broken. With billions in losses, declining relevance and taxpayer bailouts keeping it afloat, the time has come for serious reform. Germany faced the same challenge and fixed it. Canada should do the same: break the monopoly, open the market and bring the postal service into the modern era.

The numbers are staggering, and getting worse. In 2024, Canada Post posted an $841-million pre-tax deficit. This year, it’s on track to lose even more. In just the second quarter of 2025, the corporation reported a record $407-million loss—its largest ever. Internal forecasts suggest the 2025 deficit will surpass last year’s and set a new record.

That’s a growing burden on taxpayers’ backs, and all it’s buying is slower service, fewer delivery days and higher stamp prices.

Other countries have faced similar breakdowns, and found better solutions. Germany, for instance, transformed its outdated public monopoly into a competitive, efficient system. Canada could follow the same path.

At the heart of Canada’s problem is a business model stuck in the past. Canada Post holds a legal monopoly over first-class mail, meaning only it can deliver regular letters. But that market has collapsed.

In 2006, Canadians sent a record 5.5 billion letters. Last year, fewer than two billion. Meanwhile, the parcel business is booming; but Canada Post’s market share has plunged from 62 per cent in 2019 to just 24 per cent in 2023.

Germany’s state-run Deutsche Post saw similar declines in relevance and rising inefficiencies in the late 1980s. It tried to cope by hiking stamp prices year after year. Consumers paid more while service continued to deteriorate.

Recognizing the model was broken, Germany acted. The government opened parts of the postal market to competition and gradually privatized Deutsche Post, selling off shares over time. By 2008, its monopoly was gone. Today, the German government holds just 16.99 per cent of the company.

The results are striking. German consumers are served by nearly 400 companies offering full postal services, and more than 11,000 offering partial ones. Deutsche Post still leads in letter mail, but competitors keep it sharp. Adjusted for inflation, sending a letter in Germany now costs 10 per cent less than in 1989. In Canada, it costs nearly 50 per cent more. And Germany consistently ranks among Europe’s best in delivery speed.

There’s no reason Canada couldn’t achieve the same results if we’re willing to follow the same playbook. Ottawa could open up Canada Post to investment, allowing workers and Canadians to become shareholders. Postal employees with a stake in the company would be more motivated to root out inefficiencies, because they’d directly benefit from any savings.

At the same time, the government should eliminate Canada Post’s monopoly over letter mail. Letting new competitors enter would drive innovation, improve service and reduce prices. Consumers and small businesses would benefit most.

The world has changed. Canadians no longer rely on letter mail the way they once did. But they still need reliable, affordable delivery. To meet that need—and stop pouring public money into a failing structure—Canada Post must adapt. Market reform isn’t radical. It’s long overdue.

Gabriel Giguère is a senior policy analyst at the Montreal Economic Institute.

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