Canada Post’s Crisis Runs Deeper Than Declining Mail Volumes and Rising Costs

June 23, 2026 – Canada Post’s financial crisis is about more than declining mail volumes and rising costs. The deeper challenge is a Gordian knot of monopoly protections, universal-service obligations, and outdated governance arrangements that have left the corporation increasingly unable to adapt to a changing postal market, according to a new report from the C.D. Howe Institute.

In “Untying the Gordian Knot: Reforming Canada’s Postal Market,” Erik De Lorenzi examines the structural causes of Canada Post’s financial difficulties and proposes reforms aimed at improving the corporation’s long-term financial sustainability.

“The debate about Canada Post’s troubles often focuses on management decisions, labour disputes, or privatization,” says De Lorenzi. “But the deeper issue is that the rules governing Canada’s postal market were designed for another era and no longer fit today’s realities. Operational changes are necessary, but they won’t be enough without addressing the regulatory framework underlying the corporation’s financial challenges.”

Drawing on economic evidence and interviews with current and former government decisionmakers, industry executives, and former members of Canada Post’s leadership team, the report finds that postal services do not exhibit the characteristics of a natural monopoly and that the existing policy framework no longer reflects the conditions of a competitive postal market.

The paper also finds that Canada’s postal framework combines an increasingly demanding universal-service obligation with a statutory postal monopoly, creating a system ill-suited to a competitive postal market.

Further, De Lorenzi notes that Canada is the only major Western economy without an independent postal regulator. The federal government currently acts as both owner and overseer of Canada Post, creating potential conflicts of interest in setting service standards and financial benchmarks.

To address these challenges, the report recommends commercializing Canada Post by eliminating its letter monopoly, preserving universal service through a competitively neutral subsidy program that ensures service in high-cost regions, and establishing an independent postal regulator to separate ownership from regulation and provide greater accountability and transparency.

 “Modernizing the rules is crucial for improving Canada Post’s long-term financial sustainability,” says De Lorenzi. “A more competitive and commercially oriented system, combined with independent oversight, would create a stronger foundation for preserving universal service and adapting Canada’s postal system to a changing postal market.”

Read the Full Report

For more information, contact: Erik De Lorenzi, Law Clerk, Federal Court of Appeal; Percy Sherwood, Associate Editor and Communications Officer, C.D. Howe Institute, 416-407-4798, psherwood@cdhowe.org.

The C.D. Howe Institute is an independent not-for-profit research institute whose mission is to raise living standards by fostering economically sound public policies. Widely considered to be Canada’s most influential think tank, the Institute is a trusted source of essential policy intelligence, distinguished by research that is nonpartisan, evidence-based and subject to definitive expert review.

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