In 2012, the Canada Post Group of Companies had a before-tax profit of $127 million and the Canada Post segment a before-tax profit of $98 million.
This result was created by non-recurring, non-cash adjustments worth approximately $152 million. These adjustments are largely due to reductions in the future costs of sick leave and post-retirement health benefits. The savings are a result of reaching new collective agreements with the Canadian Union of Postal Workers in December 2012.
Without the non-cash adjustments, the Canada Post segment would have incurred a before-tax loss of $54 million in 2012. For the Group of Companies, the before-tax loss would have been $25 million.
Rapidly declining mail volumes combined with the need to serve a growing number of new addresses are a major cause of Canada Post's serious financial challenges. Compared to 2008, Canada Post is now delivering 23.6 per cent less Transaction Mail per address. As a result, Canada Post expects a substantial financial loss in 2013.
Canada Post must continue to explore and pursue opportunities to reshape its business and adjust its labour costs. To remain financially self-sufficient, Canada Post must make more fundamental changes to transform its business.