Why experts say Canada Post could go ‘the route of Blockbuster’ soon

Canada Post needs to find a competitive edge against private postal operators in the next few years or it risks collapse, experts say.

The Crown corporation’s president and CEO said Wednesday that the best way for Canada Post to remain competitive against private companies is to expand mail delivery from five to seven days a week.

But experts say it isn’t clear how doing so will help bring Canada Post out of financial turmoil.

“If they don’t become competitive within five or six or seven years, they will go the route of Blockbuster Video. Why? Because those losses are going to get bigger year after year,” said Ian Lee, associate professor at Carleton University’s Sprott School of Business.

Canada Post CEO Doug Ettinger told the House of Commons’ government operations committee that the key to recovering from its current slump is if the federal government changes regulations around how often the postal operator is required to deliver letter mail.

“To be competitive in e-commerce and parcels we have to be there everyday. In fact, the answer to this now … is we need seven-day delivery. That’s what we need,” Ettinger said.

Canada Post reported a $748-million annual loss before taxes for 2023 earlier this month, making it the sixth consecutive year that the postal service has been in the red.

Marvin Ryder, associate professor at McMaster University’s DeGroote School of Business, said he sees the potential for success that a seven-day delivery model could have but it isn’t clear to him how the plan would differentiate Canada Post enough from competitors.

“I get why (Ettinger) would like to move to seven-day-a-week mail delivery. But my question is, that sounds expensive. Where are you going to get the revenue to offset it?” he said.

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