Our 2021 financial results | Annual Report 2021

In 2021, the Canada Post segment recorded a loss before tax of $490 million as higher costs partially offset revenue growth across all lines of business. The segment’s loss improved from a loss before tax of $779 million in 2020.

Year-over-year comparisons are affected by COVID-19, which had different impacts on the lines of business in 2020: Direct Marketing and Transaction Mail volumes declined substantially, while Parcels volumes increased significantly to an unsustainable level, constrained by available capacity.

Here are some of the key factors explaining the 2021 financial results:

Revenue for the Canada Post segment increased by $407 million, or 6.3 ^Footnote1 per cent, compared to 2020:
- Parcels revenue grew as the Corporation managed parcel volumes to maximize available capacity and improve service.
- Transaction Mail revenue increased slightly, benefitting from the 2021 federal election and census mailings.
- Direct Marketing revenue and volumes started to recover toward pre-pandemic levels.
Cost of operations increased by $127 million, or 2.0 per cent, in 2021 compared to the prior year. Cost increases were largely driven by higher labour costs and a rise in non-labour collection, processing and delivery costs.
The Corporation also invested in operational capacity to support ecommerce growth and modernize its retail network.

Canada Post has a long-standing mandate to maintain financial self-sustainability, while serving all Canadians. The pandemic has accelerated online shopping in Canada, rapidly changing the needs of Canadians and the importance they place on their postal service. With sustained and elevated demand for parcel delivery in all parts of the country, the Corporation is responding by investing to expand capacity, improve service and innovate operations.

Financial self-sustainability remains the Corporation’s medium- to long-term goal, while the immediate focus must be on the critical investments and improvements needed to meet the changing needs of Canadians and support businesses of all sizes.

Parcels

In 2021, Parcels revenue increased by $238 million, or 7.4 per cent, while volumes fell by 28 million pieces, or 7.0 per cent, compared to the prior year, when volumes surged.
The reopening of stores for in-person shopping also had an impact on Domestic Parcels volumes in the second half of 2021.
While volumes declined from 2020, the Canada Post segment proactively managed available capacity and its mix of commercial customers and products, which positively affected revenue. Inbound Parcels revenue and volumes declined, in part due to limited air transportation capacity and global supply chain issues.

Transaction Mail

Transaction Mail revenue grew by $10 million, or 0.8 per cent, as volumes fell by 62 million pieces, or 2.0 per cent, compared to the previous year. The 2021 revenue growth was atypical partly due to federal election and census mailings in 2021.
Transaction Mail continues to erode as consumers and mailers migrate to digital alternatives.
Due to COVID-19, the Corporation maintained regulated stamp prices at 2020 levels through 2021.

Direct Marketing

Direct Marketing partially recovered in 2021, following significant declines in Canada Post Personalized Mail™ and Canada Post Neighbourhood Mail™ in the prior year, when customers had postponed or cancelled marketing campaigns due to COVID-19.
In 2021, Direct Marketing revenue grew by $113 million, or 14.4 per cent, as volumes increased by 595 million pieces, or 18.4 per cent, compared to the prior year.
While some retailers experienced global supply chain issues in the second half of 2021, Personalized Mail^TM and Neighbourhood Mail^TM revenue and volumes began to recover in 2021 with the gradual return to in-person shopping.

The Canada Post segment would have reported a loss, regardless of COVID-19, due to declining mail volumes as customers shift to digital alternatives, and recurring structural costs.

Footnote1. All percentages were adjusted for differences in business and paid days and calculated on values rounded to the nearest thousand. In 2021, there was one less business day and one less paid day compared to 2020.