The chair of Canada Post鈥檚 board says the organization鈥檚 financial situation is unsustainable.

鈥淭he board and senior management recognize that Canada Post is at a critical juncture,鈥� said Andr茅 Hudon at its annual general meeting on Wednesday.

鈥淪ignificant change is urgently needed to preserve Canada Post鈥檚 delivery network, which is vital because it鈥檚 the only delivery network built to serve all Canadians.鈥�

The surge in online shopping during the COVID-19 pandemic reshaped the parcel delivery market, and Canada Post is competing with 鈥渉igh-tech, low-cost operators who are rapidly and relentlessly evolving,鈥� Hudon said.

He said the organization has already taken some steps to try and address these challenges, including pausing some investments to concentrate on core priorities and reducing costs at all levels.

Hudon said the company has been working hard to deliver new services to help make Canada Post more competitive in parcel delivery as the e-commerce market is projected to double in the next decade.

Letter mail used to be Canada Post鈥檚 primary source of revenue, said president and CEO Doug Ettinger.

But over almost two decades, the organization has gone from delivering 5.5 billion letters a year to about two billion, he said.

More than a decade ago, the company shifted its focus to address growing demand for parcel delivery, he said.

Ettinger said the Crown corporation has seen its parcel delivery market share cut in half since 2019.

鈥淲e are doing our very best to compete in this fast-paced parcel delivery market, but we鈥檙e doing so with an operating and delivery model built for an older era,鈥� he said.

It doesn鈥檛 help that Canada Post is the only competitor in the category that doesn鈥檛 offer weekend delivery, he said.

In order to compete, Ettinger said Canada Post needs more flexibility in its operations and its investments, as well as from a regulatory standpoint.

In August, Canada Post reported a second-quarter profit of $46 million before tax as a one-time sale of subsidiaries helped offset an operational loss of $269 million.

That鈥檚 compared with a loss of $76 million before tax in the first quarter of the year.

In January, Canada Post and Purolator Holdings Inc. announced they were divesting their shares in subsidiaries Sci Group Inc. and Innovapost Inc. The transactions closed earlier this year.