Higher costs and mail declines surpassed significant growth in Parcels business
OTTAWA, ON, May 21, 2021 /CNW/ – Canada Post recorded a loss before tax of $77 million in the first quarter of 2021, as higher operating costs and revenue declines in Transaction Mail and Direct Marketing exceeded the significant growth in Parcels revenue.
COVID-19 continued to have a significant impact on the postal service in the first quarter while we provided an essential service and kept employees safe. Canada Post’s operating expenses increased by $287 million in the quarter, compared to 2020, due to higher costs. These costs included special leaves for employees during COVID-19 to enable child and elder care, additional health and safety supplies, increased overtime expenses, wage increases, and additional collection, processing and delivery costs from growing parcel volumes. An additional three paid days during the first quarter of 2021, which ended April 3, also contributed to the higher costs.
Year-over-year comparisons are affected by the fact the Corporation only began to see impacts from COVID-19 to its costs, revenue and volumes toward the end of the first quarter last year. In the first quarter of 2021, revenue for the Canada Post segment increased by $276 million or 12.8 per cent compared to the same period in 2020.
Canada Post’s Parcels business continued to grow strongly in the first quarter of 2021 as Canadians continued to shop more online during the pandemic, part of a…