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Ottawa extends another $1-billion loan to Canada Post as reform continues
Summary
The federal government announced a $1.01-billion contingency loan facility for Canada Post to help maintain solvency; it tops up a previous $1-billion credit line that was exhausted in December. Ottawa is reviewing a submitted transformation plan while a tentative labour agreement awaits ratification.
Content
Ottawa has made a new $1.01-billion loan facility available to Canada Post on an as-needed basis, saying the funds are to maintain solvency and keep services running. The facility is a top-up to a January 2025 $1-billion loan that Canada Post exhausted by December after large losses and labour disruptions. The federal government, which is the carrier's sole shareholder, has said the organization's current business model is unsustainable and is asking for a transformation plan. Canada Post has submitted a plan and officials say they are reviewing it.
Reported details:
- Public Services and Procurement Canada announced the additional $1.01-billion loan facility; the funds must be repaid and are described as a contingency for cash shortfalls.
- The new facility supplements a January 2025 $1-billion loan that Canada Post used up by December amid record losses and a labour strike.
- Canada Post and the Canadian Union of Postal Workers reached a tentative agreement in December; that deal has not yet been ratified and both sides agreed to refrain from strikes or lockouts until voting concludes.
- The federal government is reviewing Canada Post's transformation plan and officials have said they will provide more information "very soon."
Summary:
The government framed the loan as a temporary contingency while Canada Post implements a multi-year transformation to address declining letter volumes, lost market share in parcels and sustained losses. The immediate status is financial support available as needed, a tentative labour deal pending ratification, and a government review of the submitted transformation plan; further announcements were reported as expected soon.