Ottawa, ON — The Canada Post segment lost $62 million before tax in the third quarter, traditionally the postal service’s slowest period of the year, while parcels revenue jumped nearly 40 per cent. Year-to-date, the Canada Post segment is reporting a profit of $13 million before tax heading into the holiday season when millions of Canadians are expected to make an unprecedented number of purchases online.
The Canada Post segment’s $62-million loss before tax in the third quarter, which ended September 30, 2017, compares to a loss before tax of $60 million for the third quarter of 2016. For the first three quarters of 2017, Canada Post reports a profit before tax of $13 million, compared to a loss before tax of $15 million for the same period in 2016.
The sustained growth in parcels was made possible by Canada Post’s strategic decision in 2011 to become a leader in e-commerce. However, structural challenges—such as Lettermail decline and the pension funding obligation—remain significant long-term threats to financial self-sustainability.
Parcels revenue increased by $129 million or 38.9 per cent in the third quarter, while volumes increased by 16 million pieces or 43.5 per cent compared to the same period in 2016. Domestic Parcels, the largest product category, continued to grow, as revenue increased by $101 million or 43.1 per cent and volumes grew by 11 million pieces or 41.4 per cent in the third quarter. In the first three quarters of 2017, Parcels revenue increased by $257 million or 22.5 per cent, and volumes increased by 32 million pieces or 25.3 per cent when compared to the same period in 2016. For Domestic Parcels, revenue increased by $199 million or 24.3 per cent and volumes increased by 22 million pieces or 22.7 per cent in the first three quarters of 2017, compared to the same period in 2016.1 The increases in revenue and volumes were partially a result of increased business from major commercial customers and solid delivery performance, as well as the continued growth in e-commerce as consumers continue to order more products online. The increases are compared to the third quarter of 2016, when volumes and revenue were affected as customers made alternative delivery arrangements due to labour uncertainty.