Canada Post makes $54 million in profits in 2007 - Government to review financial targets and much more in 2008

Canada Post’s annual report for 2007 shows stable addressed letter volumes and $54 million in net income from the post office and its companies. It is the post office’s 13^th consecutive year of profit.

 

Annual report highlights

A few highlights from the annual report follow. Canada Post:

• Made $54 million in net (after tax) profit from the post office and its companies. For the first time Purolator provided more than 50 per cent of Canada Post’s profits.
• Made $160 million in income before taxes.
• Paid $102 million in taxes.
• Paid $47 million in dividends.

The Canada Post part of Canada Post’s group of companies had record volumes with 11.6 billion pieces of mail (11.4 billion in 2006). Total addressed volumes remained flat while transaction mail (formerly known as first class mail) declined by 1.6%. Points of delivery increased to 14.5 million (14.3 million in 2006).

It is unlikely that Canada Post will release a five-year corporate plan this year. The government has not yet approved the five-year plan from last year. It would appear that the government has put long term plans for Canada Post on hold while it conducts a strategic review of the corporation.

 

Strategic Review of Canada Post

The government’s recently announced strategic review of Canada Post will attempt to answer some pretty fundamental questions, including “What are appropriate financial and performance targets for Canada Post that will reflect its dual public and commercial objectives, and support its efforts to improve the corporation’s cost structure and efficiency and meet future infrastructure needs?”

At the moment, financial targets are geared to meet commercial objectives.

The government has asked Canada Post to act like a commercial enterprise and provide a commercial rate of return, even though there is no legal requirement that the corporation make business-like profits.

Canada Post President Moya Greene is an enthusiastic supporter of thegovernment’s call for commercial profits. She has repeatedly stated that the corporation is a commercial enterprise with a business mandate. She has focused on major customers and profit-making rather than on postal workers, the public and providing a public service. In spite of this, Canada Post has not met the government’s financial targets for the last two years. This is probably one of the reasons that the government wants to review the corporation.

CUPW wants Canada Post to start acting like the public service it is. While Crown corporations like Canada Post have both public and commercial activities, they are distinct from commercial enterprises in that they are designed to serve the public interest, not maximize profit.

Imagine what Canada Post could do if it focused on public service and postal workers, not just its 200 biggest customers. The corporation could build a better, more accountable, more transparent, more humane postal service - a truly modern post. It could invest profits in keeping post offices open, maintaining rural delivery, expanding door-to-door service and reducing its horrific injury rate - one of the worst in the federal sector.

We'll see what the Stategic Review of Canada Post recommends at the end of this year.