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Canada Post Q1 profit before tax $44 million

Staff writer |
Continuing strength in the Parcels line of business contributed to a $44-million profit before tax for the Canada Post segment in the first quarter of 2016.

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This compares to a profit before tax of $24 million in the same period a year ago.

Parcels revenue for the Canada Post segment climbed 12.5 per cent and volumes grew 14.4 per cent1 over the same period a year ago. As an example of the growth, Canada Post delivered one million or more parcels on every Monday in January as Canadians shop online more often.

Transaction Mail continued to decline in the first quarter, ended April 2, 2016. Revenue fell by $40 million as volumes of letters, bills and statements dropped by 83 million pieces, compared to the same period a year ago. Since the beginning of 2015, mail volumes have fallen by nearly one third of a billion pieces.

Though both parcels and direct marketing represent opportunity for Canada Post, their growth will not be enough to offset the decline in the core Lettermail business and pay for the pension, or allow the Corporation to invest in its network and customer service.

Therefore, this growth will not be enough to ensure Canada Post’s long-term financial self-sustainability.

Employee benefit expenses for the Canada Post segment fell by $19 million from a year ago due to a slight increase in discount rates used to calculate benefit plan costs in 2016, as well as positive pension asset returns in 2015.

Employee benefit costs, including pension, continue to be volatile and remain a significant challenge.


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