President’s Message
Of course, success in business means creating conditions today that also allow future generations to thrive. With 72,500 employees, The Canada Post Group has a presence in virtually every community across Canada. Our size and reach into Canadian households and Canadian companies means that we can help effect real change and influence everyday lives. In recognition of this, we made a commitment in 2007 to integrate sustainable practices companywide.
For many years, Canada Post employees have been actively involved in protecting the environment. Across the company, grassroots initiatives, ranging from composting to tree planting to green commuting challenges, have complemented corporate environmental programs. Our future investments will reflect this philosophy. A shining example will be our new Winnipeg plant that will be built to “green building” standards and equipped with environmentally friendly technologies. In 2007, we chose to address the stigma of mental illness and shine a light on the plight of millions of Canadians who often suffer in silence. With tremendous employee support, Canada Post has officially made mental health our corporate cause of choice. We are committed to raising funds to support awareness, research and local community treatment for this important cause.
We are also producing our first Corporate Social Responsibility Report, set for release in the spring of 2008. This report will not only be a benchmark for the Corporation’s ongoing green initiatives and programs, but will serve as a valuable tool to enable even more positive change in the future.
Looking forward, we will continue to strive to create a successful, sustainable future for our employees, our customers and all Canadians. It is clear, however, that 2008 will be equally as challenging as 2007, if not more so. The threat of a recession in the United States is likely sufficient in itself to cause businesses to curb spending. This reduced spending will put pressure on Canada Post revenues. It is clear that we need to further reduce our cost base if we are to weather the inevitable revenue declines. I am certain that our people, once again, will rise to the challenge. As the needs of Canadian businesses and citizens evolve, Canada Post has positioned itself to become a truly Modern Post. We are ready to build the future together.
Moya Greene
President and Chief Executive Officer
CHALLENGE: FUNDING OUR Transformation
To ensure Canadians continue to enjoy high-quality, cost-effective services, Canada Post needs to invest $1.9 billion of incremental capital and $0.6 billion in related program expenses to bring its aging plants, infrastructure and equipment up to modern standards. Canada Post will face challenges in making this funding available over the next five years. Costs such as fuel prices are increasing while the basic postage rate is restricted by a price-cap formula. An economic slowdown could affect our customers’ bottom lines and, in turn, Canada Post’s revenues.
Funding will also be derived from an employer-contribution holiday to the Canada Post Pension Plan. More than $750 million of supplementary contributions have created a healthy surplus, but financial markets also have an important impact on the valuation of our pension plan and related funding requirements.
To mitigate these risks, Canada Post is reviewing its cost structure and developing contingency plans to ensure our investment plans are prudent and flexible.
