Canada Post said Monday that losses deepened in the second quarter as Canadians mailed fewer packages, eroding results across most of its operations.

The company reported a loss of $10-million, or $4-million after taxes, which marks an improvement from a loss $18-million, or $17-million after taxes, a year earlier.

But the Crown corporation says the latest quarter compares favourably largely due to a lockout last summer, which pulled down results in the comparable period last year, making the decline in the latest quarter seem less severe.

Story continues below advertisement

Mail volumes were down 4.4 per cent, or 31 million pieces, it said.

Cost of operations rose 6.1 per cent, or $85-million, to $1.47-billion in the quarter ended June 30.

The company's parcels business showed strength, with higher volumes pushing revenue to $302-million from $245-million a year earlier, particularly due to more shipments from e-commerce retailers.

Canada Post also has a roughly $4.7-billion solvency deficit in its pension plan.

The company noted that 71 per cent of its overall costs are tied to labour, which is why it believes it's important to reach a collective agreement with the union representing its employees.

"It's time for us to have some realistic discussions based on the current realities we now face," said Jon Hamilton, Canada Post's director of communications, in a phone interview.

"The decline of mail is not something that's going to rebound. Canadians are using Canada Post in different ways. Their expectations of what Canada Post can offer are different and we need to adjust for that."

Story continues below advertisement

Mr. Hamilton said that Canada Post gave its most recent offer to the Canadian Union of Postal Workers on July 19.

A representative for the union wasn't immediately available for comment.

The Crown corporation locked out some 50,000 of its employees last summer after a series of rotating strikes.

The dispute ended with federal back-to-work legislation that forced workers to accept wages that amounted to less than Canada Post's last offer.