Recommendation #12: The moratorium on rural post office closures should be replaced with a modern policy approach that continues to protect rural service while:
• using current demographic and census data to accurately define rural areas and allowing for adjustments as demographics change; and
• reflecting the existence of more cost-effective ways to serve and offer greater convenience to Canadians than traditional post offices. These include dealer
models, regional community hubs and self-serve options.
Canada Post understands how important its network of post offices is to Canadians across the country, especially those living in rural and remote regions. However, the moratorium on the closure of rural post offices has challenged its ability to serve their changing needs and is a material root cause for some of the financial challenges facing the organization.
The moratorium was adopted by the federal government in 1994 and incorporated into the Canadian Postal Service Charter in 2009. It prevents Canada Post from closing or franchising nearly 3,600 post offices that were identified as being in rural areas in 1994. The list of applicable post offices was created by the federal government, not Canada Post.
The moratorium prevents the conversion of post offices to franchise outlets. Managed by retail partners such as pharmacies, franchise postal outlets often provide better hours and more convenience for customers.
Canada has changed dramatically since 1994. In that time, the country’s population has increased from 29 million to more than 40 million people. Many areas that were considered rural in 1994 are now part of cities or developed suburbs. For example, the moratorium on the closure of rural post offices applies to post offices that are now clearly in urbanized areas such as Milton, Stittsville and Richmond Hill, in Ontario. In fact, nearly 30 per cent of post offices located in areas deemed rural in 1994 are now in areas classified as urban, according to the most recent Statistics Canada census data. However, the moratorium on the closure of rural post offices has not changed since its inception.
Today, Canada Post has approximately 5,800 corporate and dealer post offices across the country. Of those, approximately 55 per cent are in designated rural areas and 45 are in urban areas. The costs of providing this rural retail network are much greater than the revenues generated from the rural retail network.
The moratorium on the closure of rural post offices means that Canada Post is only able to close a rural post office in situations outside of the Corporation’s control. This can include the departure of a postmaster or changes to a property, such as a fire or the termination of a lease. Even in such situations, closing a post office is always a last resort after all other options are exhausted. Canada Post conducts a comprehensive process to find a way to maintain the post office. It also works closely with the local community to find suitable alternatives.
Between 2019 and 2024, 634 rural post offices were affected by the departure of a postmaster or an issue with the property. In each instance, Canada Post held community consultations and, where a new postmaster was needed, a recruiting process occurred.
Canada Post was able to maintain service at 563 affected post offices while the remaining 71 were closed and service shifted to a neighbouring post office or community mailboxes, as decided with the local community. This means that over the last five years, 98 per cent of the post offices covered by the moratorium on the closure of rural post offices remained open while two per cent were closed for reasons beyond Canada Post’s control.
The cost of providing post office service in rural communities means service hours are limited in these locations. There is also a cost to keeping traditional post offices open in areas that are no longer rural, and where other dealer options are available nearby.
Both the independent Task Force appointed by the government to review Canada Post in 2016 and the Standing Committee on Government Operations and Estimates (OGGO) in 2024 recommended updating the moratorium on the closure of rural post offices to reflect demographic changes and ensure it applies to actual rural communities. However, the government has not changed the moratorium as of yet.
In its report to Parliament, the OGGO noted the moratorium on the closure of rural post offices “might have had unintended consequences: by imposing inflexible parameters on the Corporation, it may have exacerbated the problems it set out to resolve by preventing Canada Post from allocating resources to rural and remote communities that need it the most.” It is therefore time to replace the moratorium on rural post office closures with a modern policy approach that continues to protect rural services.