OTTAWA - Canada Post says it will struggle to make a profit in coming years despite booming parcel delivery because of a continuing decline in letter mail, higher employee costs and billions in capital spending.

In a corporate forecast quietly tabled in Parliament, the Crown corporation says it is expecting to achieve "modest" profits of between $10 million and $125 million from 2019 through to 2023 but those will be driven primarily by its Purolator subsidiary, while the base Canada Post segment will post losses.

The five-year plan estimates Canada Post will need to invest $3.6 billion to keep up with the growth of e-commerce shipping while modernizing to meet shipper and customer expectations and stay ahead of competitors.

Meanwhile, employee costs are rising, in part due to a rural pay equity ruling last fall identified as the main cause of an estimated $264 million loss in 2018, and which is expected to add $140 million in annual costs going forward.

Canada Post says it expects to have to borrow about $500 million more by 2023 to cover capital needs and to make special employee pension plan solvency payments, expected to start at over $500 million in 2020 and total over $1.8 billion by 2023.

It forecasts a post office sector loss of $22 million for 2019 as total revenue grows 3.5 per cent or $234 million to $7 billion -- driven by a 13 per cent increase in domestic parcel volume offset by a drop in letter mail activity of about five per cent.