Feds greenlight $673 million to keep Canada Post afloat this year

OTTAWA — The federal government is handing hundreds of millions of dollars to Canada Post to keep the money-bleeding mail service afloat for the current fiscal year.

A cabinet order gives the beleaguered Crown corporation up to $673 million so it can “meet its operating and income” demands through next March.

That amount was carried over from the roughly $1 billion Ottawa authorized in a massive funding top-up earlier this year. It also followed last year’s initial $1.03-billion cash injection, which failed to sustain the postal service past early February 2026.

Despite the reassigned funds, Canada Post will likely need hundreds of millions more to make it through the fiscal year, said Ian Lee, an associate professor at the Sprott School of Business at Carleton University.

“They might be issuing it in two tranches because they understand the optics,” Lee said, framing the funding as “bailouts” that loom less large when doled out in smaller chunks.

“Canada Post is insolvent … which is the inability to meet your obligations as they become due.”

The organization notched an unprecedented $1.57-billion loss before tax in 2025, a 46 per cent jump from the year before. It lost nearly $5.4-billion between 2018 and 2025, according to the latest annual report.

Amid declining letter and parcel demand, the Crown corporation says it must modernize through reforms that include community mailboxes and possible post office closures.

“As Canada Post starts its transformation, it continues to face significant financial challenges, and has been accessing repayable funding from the government of Canada. This short-term financing liability, which is within the regulations of the Canada Post Corporation Act, is designed to ensure the corporation can maintain solvency and continue operating,” said spokeswoman Lisa Liu in an emailed statement Friday.

Canada Post and the union have sparred over wages and structural changes to the mail service for more than two years, with workers taking to the picket line repeatedly.

Some 55,000 union members started voting last month on a five-year contract. The process wraps up May 30.

Both sides have agreed not to engage in any strikes or lockouts while the ratification vote take place, though employees are also casting ballots on whether to authorize a strike mandate, in case they reject the deal.

About 60 per cent of the union board endorsed the proposed collective agreement, saying it ensures job security, but the union’s president has asked members to reject it, arguing it rolls back rights and compensation.

This report by The Canadian Press was first published May 8, 2026.

The Canadian Press