Under a five-year plan released on Wednesday, the cost of stamps will also rise and as many as 8,000 jobs will be eliminated.
But the agency says it will also open more retail locations across Canada.
The service faces a projected 1bn Canadian dollar ($943m; Â£576m) loss by 2020 without "fundamental changes".
Canada Post lost C$73m in the third quarter of the current fiscal year, CBC News reported.
"Canadians expect Canada Post to continue to remain financially self-sufficient and not look to their hard-earned tax dollars for funding," the postal service said.
At the same time, "the rise in digital communications has dramatically changed the postal needs of Canadians".
Direct to the home delivery will be replaced by community post boxes installed throughout residential areas, Canada Post said in its plan.
The agency said two-thirds of Canadians, mostly in newer suburban neighbourhoods and rural areas, already receive their mail through this method.
The cost of postage stamps purchased in bulk will rise to $0.85 per stamp, up from $0.63 today, among other price rises.
In all, the plan will return the agency to financial sustainability by 2019, Canada Post said in a report, citing annual savings of up to C$900m.
Between 6,000 and 8,000 jobs will be eliminated as part of the plan - 12% of Canada Post's employees, although it says its workforce is ageing and it expects almost 15,000 workers will retire or leave the company in the next five years.
Canada Post delivers close to 10 billion letters and parcels each year but has seen a 24% drop in letters delivered since 2008.

The 24-year-old made four centuries, and Anthony Hamilton two, as the pair completed a record six consecutive tons when they met on Wednesday.
Wilson said he was "way below his best" as he got to the semi-finals in Berlin.
"But playing like that was the perfect antidote," he told BBC Sport.
"It's the best match I've ever played by far, and setting the record is brilliant."
The previous record of five was jointly held by Ronnie O'Sullivan and Stephen Hendry in the 2003 British Open final, and Stephen Maguire and Neil Robertson in the quarter-finals of the 2009 Masters.
World number 20 Wilson came from behind on three occasions to reach the last four at the German Open in Berlin but said having to "do it the hard way" finally caught up with him.
The Kettering man won final-frame thrillers against Rory McLeod, Michael Holt and Ryan Day but lost to Belgium's Luca Brecel 6-3.
"I was absolutely gutted with the way things ended in Berlin," said Wilson. "It will take a while to completely forget that one. I didn't play well and was just scrapping to get through.
"But I wasn't going to mope about. There has to be positives from reaching the semi-finals of a ranking event when you are not playing well. I showed a lot of bottle, but it was probably one match too far in the end. It took a lot out of me.
"I got back on the practice table as soon as I could. There's no way I want that to happen again."
The Kettering potter's response on his return to competitive snooker was emphatic. He hit breaks of 103 and 108 to go 2-1 up in the best-of-nine meeting with Hamilton.
The Nottingham man responded with a 137 and, after Wilson's 125, Hamilton made it 3-3 with a 123.
But Wilson hit a 100 for his fourth ton of an astonishing match, before closing out the win with a 68.
"I was actually gutted that I missed the last red in the final frame when I could have made it seven," he said.
Canada Post will phase out home delivery in urban areas over the next five years as the postal service struggles to rein in persistent losses.
[NEXT_CONCEPT]
Kyren Wilson says his record-breaking feat during the "best match of my career" in the China Open qualifiers was the ideal response to his "gutting" display in the German Open.