Canada Post suffered its first financial loss in 2011 after 16 straight years of profitability, according to its annual report.

The labour disruption last year was blamed as a major factor, while the company reports transaction and publication mail volumes including magazines are sliding and the company is focusing its efforts on its "digital delivery network".

The report shows the Crown corporation, not taking into account the performance of its subsidiaries (Purolator, SCI, Innovapost) was $327 million in the hole (before tax) for 2011. It probably won't come to a huge surprise to many, considering the work disruptions last year including rotating strikes and a lockout. Canada Post's president and chief executive officer, Deepak Chopra, addressed that point in his message within the annual report. "Our results show the strains of a continued decline in core mail volumes, the impact of a painful work disruption and the negative impact of a pay-equity decision by the Supreme Court of Canada, leading to our first loss in 17 years," he noted.

The corporation said the labour disputes alone led to an estimated $200 million in losses, while transaction mail volumes (bills, invoices) dropped 4.6 percent last year, at least the fifth straight year of decline in that category.

On the pub mail side, Canada Post handled 431 million pieces in 2011 compared to 445 million pieces in 2010, a drop of 2.9 percent according to the report. That equates to $251 million in revenue for Canada Post in 2011 compared to $254 million in 2010. The drop was driven by a decline in mailed subscriptions, said the corporation.

Meanwhile, the company is busy mobilizing for the future. Canada Post's digital initiatives include epost, a secure electronic mailbox service connecting customers to bill issuers, and Vault, a bank-grade security electronic storage solution for everything from banking information to family photos. "Digital services available through the epost platform will be strengthened to mirror what we deliver physically (bills, statements, magazines, flyers)," reads the report. 

The National Association of Major Mail Users (NAMMU) said it is looking for new ideas to generate mail volume growth, but noted that Canada Post's "removal of operational hold-ups and proposed incentives are not lofty, long term goals — they are here and now ideas, designed to stanch the flow of mail conversion to other media, and marketing enablers that showcase the utility of mail."

"Strategic ideas to promote the use of mail are being readied for proposal and possible investment by Canada Post. NAMMU has taken the initiative to ensure the health of members’ investment in the postal system, and any broader path that includes other media is taken at the pace the customers choose."

To view an overview of the 2011 Annual Report, click here.