Colleagues, ladies and gentlemen, welcome to meeting 27 of the Standing Committee on Government Operations and Estimates as we continue our study of Canada Post.
I have a couple of quick housekeeping points first. As all of you know, we were originally scheduled to meet today from 3:30 to 6:30, but because of votes that were unanticipated at the time this meeting was called, votes will be held at 6 p.m. The bells will start ringing at 5:30. Now, normally it is the practice of all committees to adjourn their committee proceedings immediately upon bells. However, since we have a number of organizations who were scheduled to be here for two hours, we'd be shortchanging them by approximately an hour.
I will take the advice of the committee. Since we're only a few steps down from the House of Commons, would the committee agree to wait until 5:45 p.m. to adjourn? I know it's only an extra 15 minutes, but at least it gives our colleagues, who have been here to present in anticipation of a two-hour session, an extra 15 minutes.
Do I have the concurrence of the committee to allow us to adjourn at 5:45 instead of 5:30?
Some hon. members: Agreed.
I'd like to thank the members of the committee for inviting us today. I have with me our chief financial officer, Mr. Wayne Cheeseman, and Madam Susan Margles, our vice-president of government relations and policy.
I have a few remarks, and then we'll open it up for questions.
I want to thank the independent task force for its thoughtful report. The members of the task force clearly understand the significance of this national institution. They based their analysis and options on a solid understanding of the size, scope, and complexities of the postal system and its importance to Canadians. They have provided Canadians and this committee with a report that is comprehensive, well researched, and thoughtful. It is a frank report in its assessment and bold in its analysis. The task force has also provided us with indisputable facts upon which any discussion on the future of the postal system should be based.
First, the report has left no doubt that there is an urgent need to transform the business. With every passing year, there is less mail to deliver and more addresses for us to deliver to. Second, Canadians like their postal service and they want it to remain strong, but not subsidized with their tax dollars. Third, parcels are the future of the company because that's the service that Canadians want and need. Mail will always be important to Canadians, but they are using Canada Post more to deliver the items they buy online. We're growing our parcel business because we're not only delivering more and more products from Canadian and global companies, we are also opening global markets for Canadian businesses. The benefits go far beyond Canada Post.
Fourth, there are no easy solutions. The good news is that Canadians clearly understand that. They understand that the postal system needs to change, and they aren't afraid of what's required to do it. They know that mail isn't coming back, but they don't want the postal system to disappear. In fact, they want to know that this important institution is secure for generations to come.
That makes the work of this committee incredibly important, not just to the future of the postal system, but for the Canadian economy. As chief executive officer of Canada Post, I understand the tremendous responsibility that has been placed on this committee, on the government, as well as on all of us charged with leading this organization. We must get this right. This is about much more than mail and parcels, or even a nostalgic attachment to a 250-year-old institution. It's about people's livelihoods and their dependence on a strong and vibrant national postal system.
There are 50,000 people who work at Canada Post, with families, mortgages, and commitments, who depend on the company they helped to build. They want to see Canada Post evolve and grow as well. On a larger scale are the countless Canadians whose livelihoods depend on a strong and reliable postal system. Canadian small businesses still regularly use the mail to conduct their operations: cheques, invoices, statements, and special customer offers. They send and receive these envelopes every day.
Our direct mail business is also incredibly important to Canadians, which is why it still generates $1.2 billion in revenues. It helps small businesses reach their customers in their local neighbourhoods. Direct mail is used extensively and successfully by charities to raise much-needed funds. It is also widely used at all levels of government to communicate information to their citizens. In our parcel business, the dependence on a postal system is becoming even stronger. Our parcel volumes are growing because the Canadian retail industry is going through a huge, disruptive change as Canadians do more and more of their shopping online.
The Canadian retail industry is a significant contributor to the Canadian economy. According to the Retail Council of Canada, total Canadian retail sales in 2015 were roughly $516 billion.
We're doing everything we can to help Canadian retailers, large and small, in our biggest cities and in our smallest communities, including the north, to evolve, prosper, and grow, but they need a strong and vibrant postal system to do it.
We deliver two out of three parcels that Canadians order online. We are deeply embedded in the new Canadian retail economy.
We work closely with Canadians who have risked it all to start a small business, often out of their garage. Their investors are their friends and relatives, who pitch in because they believe so strongly in what they're doing. We do more than deliver the parcels they pack themselves. We help them to innovate and grow. After all, the more successful they are, the more successful we are.
As they grow, we help them transition beyond the start-up phase so they can focus on hiring more people and expanding. We have helped some owner-operator small start-ups become multi-million dollar enterprises with large staffs and strong futures.
As well, you can name virtually any large retailer in Canada, and chances are we're working with them to help them adapt to the changing face of retail. Many Canadians depend on these large retail companies making a successful transition into e-commerce.
I know first-hand that change isn't easy, but the task force has reaffirmed the path that we were taking was moving us in the right direction. They have also detailed the challenges that are driving the need for change at Canada Post.
Over the past decade, mail volumes have declined by 32%, or 1.6 billion pieces. That's almost a billion dollars in revenues. This is a trend that will continue. We must embrace change and keep going.
The report clearly shows that Canadians support making the changes necessary to secure the future of postal service. They also expect the postal service to evolve, learn, adapt, and improve, not just in the way we serve them, but in the way we implement change. At Canada Post, that is also what we expect of ourselves.
Much has been said about the changes we were making to secure the future of the postal service over the last three years. Less well known is how we were able to learn, adapt, and improve our approach and processes as we progressed. That's why we are pleased to see customer satisfaction numbers in the task force report remaining as high as 91%. The focus on constant improvement will continue at Canada Post.
I would like to conclude by saying to all of the committee members that our challenges are large. The solutions to them must match the enormity of the challenges. There are some people who will tell you that the postal system should never change and should remain in the good old days. That is not an option. There is simply too much at stake.
I would encourage you to move forward knowing what the task force found, which is that many Canadians are counting on all of us to get this right and secure a strong future for Canada's postal system.
Thank you, Mr. Chairman.
I think the mail has changed its shape and size over many decades, from postcards to letters, from parcels to packets, and so on. What we are finding now is that it's going through the same change again, with parcels growing. The challenge is not that parcels are growing. In fact, that's the best thing we have seen for our corporation. The challenge is that we have to transition a mail-centric network that was designed to deliver mail to adapt so that it can deliver mail and parcels.
You raise a very interesting point about parcels being delivered every day. Our expectation, in fact, is not even next day. It's the same day for parcels. For mail, there is this assumption that it's okay to take a couple of days.
From a receiver's perspective, it continues to be the view that Canada Post only delivers mail. That's our heritage. It's a very common myth that what comes in the mail is only letters. Part of our challenge is also to educate Canadians that what's coming in the mail has also changed. With that, we can change the way we deliver, the way we support our retail network, and the way we support our support structure.
We think that if we can address some of the legacy structural issues, which is what you were commenting about—the cost differentials with a competitive sector—through this transformation, we believe we can compete in the parcel sector. We are already competing. It's a $1.6-billion business.
Canada Post has to play to its strengths, and every organization has core competencies, core strengths. I think Canada Post is a logistics and delivery organization. We focused on that. We have demonstrated, by growing our parcels business by over $400 million in less than five years, that those are the areas that are more successful, and we can have a better outcome for the long-term sustainability of Canada Post.
There are financial services that Canada Post already plays in—for example, money transfers. In many communities across the country, Canadians who send money back home find it expensive to transfer money using other sources. Our MoneyGram program is very widely used and is a service that we believe fits into Canada Post's competencies. Over the years our money order program, which goes back over 100 years in the postal community, has evolved to a much more efficient digital money transfer system. Here is a product that is something we already do. We also have prepaid debit cards. We distribute those through our branches, and those Canadians who are not able to have a credit card are able to purchase a prepaid debit card.
There are services that would make sense in the context of where our core competencies and capabilities make sense. Then there are services that are well served. As we saw in the report as well, Canadians are well served by banks and credit unions. It's not an area where...now that an independent panel has had a chance to look at it in depth, not just from five-old data, which is already stale in the digital economy we live in. With FINTRAC and new technologies, and the banks facing new types of regulatory challenges, technology investments, these are large decisions. That is why I mentioned earlier on that we look to this committee to debate, to reflect on the discussion paper, and listen to Canadians. And if that's an option, that better belongs in the committees.
Thank you very, Mr. Chair.
Thank you all for coming.
Clearly, I'd think we'd agree that the brand of Canada Post is strong and it's paramount. It allows it to attract its customers for its delivery and logistics business. Without the trust of Canadians, that business would not exist. People would not trust Canada Post to do the delivery and logistics it does without it.
When we look at what has happened over the course of maybe the last two years, at least from my perspective, there seems to have been a whittling down of that trust in that a five-point plan was put to Canadians, imposed upon them, and it lacked public support. There was certainly a great deal of consternation during the election.
Then again this summer, on both the corporate side and the union side, the disagreements over labour put a lot of mistrust into Canadians' hearts about whether or not they should continue to rely on Canada Post to meet their payroll needs, their banking needs, their chequing needs, and their delivery needs. They moved to alternative sources of delivery or simply decided to transfer more of their business, perhaps prematurely, to electronic methods. There is a certain amount of concern.
I want to focus just a little more on the financials here, to try to get a sense of opportunities that might not have been canvassed by the task force but that might be available. When we look at their report, they say there's $400 million of potential savings, which includes $80 million already achieved, by going to community mailboxes. We have conversion of 80 of the highest-volume corporate post offices to franchises for savings of $177 million. Those two ideas seem to be fairly independent.
Would you agree that both of those things could be implemented independently and those savings would not have so much of an overlap, in terms of the benefits to Canada Post?
Thank you, colleagues, thank you, ladies and gentlemen, and thank you, staff, for getting the tables reset as quickly as you have.
This will be our second set of witnesses. We have five organizations before us. I just had a chance to briefly discuss some of the procedures with some of the witnesses. My apologies again for the truncated version of this; because of the votes, we're down to about 75 minutes rather than the full two hours.
Each of you has an opening statement, and I understand that. Normally you would have a 10-minute opening statement, but because of the truncated version here, if you could keep your opening statement to about five minutes I would appreciate it. I'll give you some latitude, obviously, because you'll have to condense what you were originally going to say, but the longer you speak, the less time there is for questions from the members. I'll let you try to police yourselves there, but I do know that many of our members have questions they would like to pose to you.
My understanding as well is that the speaking order will begin with Madam McAuley.
You have five minutes, please.
Thank you for this opportunity to address the committee.
The issues we are addressing are, by the admission of the president of Canada Post, a lifeline to rural Canada. While we understand the constraints imposed by the business of the House, we will have some difficulty doing justice, in the five minutes that remain, to the needs of rural Canada. We will attempt to do so, but will be happy to address any questions you will certainly have once there are fewer time pressures. Our full submissions have been filed with the committee.
The Canadian Postmasters and Assistants Association has been the voice of rural post office employees since 1902. It is the second-largest bargaining unit at Canada Post, representing members in post offices in towns and villages throughout rural Canada. About 95% of our members are women. We are in touch with over six million rural customers.
We were quite taken aback when one of the options the task force presented was converting 800 of our highest-volume post offices into privatized franchises. This option would be disrespectful of the current government's directives. It's very worrisome for several reasons.
First, the committee's mandate from the Canadian electorate is clear: privatization was not to be considered during the review.
Second, what public company would sell off its largest money-making centres to its competitors? Canada Post has made profits for 19 out of the past 21 years. Just last year it netted almost $100 million in profits. Why would we risk losing this?
Third, our study, “Rural Post Offices and the Communities that rely on them are being abandoned”, conducted by Anderson Consulting, found that there was an over 55% chance a franchise would disappear if that post office were replaced. All that was left for those residents was a collection of boxes at the side of the road. That's hardly vibrant Canadian infrastructure.
Fourth, according to the task force report, Canadians and businesses of all sizes have a positive perception of Canada Post and its services. The vast majority believe mail is highly important, and that Canada will always need postal services owned and operated as a public service.
The current government obtained its mandate while promising opportunities for women in this country. Our membership is 95% women. If Canada Post is weakened in rural Canada, there will be very few meaningful jobs to which women can turn.
In 1994 the Liberal government announced a moratorium on post office closures. Despite the fact that the moratorium is still in place, we have seen over 350 rural post offices close.
If the corporation really wants to keep a post office open, it has the ability to appoint someone by other means, meaning it can choose whoever it wants if there's no available candidate after a competition. The latest example would be in Red Bay, Newfoundland and Labrador. Seven people, including the mayor of the community, failed the interview the corporation had set. The corporation then closed the corporate post office, saying it had completed the staffing process, and couldn't find anyone qualified to work in a post office. It then opened a privatized franchise, and gave it to one of the candidates who failed the interview.
Canada Post wants to give its operations away, and it doesn't care anymore if people realize how inconsistently it is behaving.
Okay. Let me try to wrap it up.
I just want to comment on one thing. It was mentioned that Canadians are served and that they have enough banks. I just wanted to let you know that we did a study. We surveyed 3,260 rural communities, and 1,200 of those communities do not have a bank or a credit union. Of the 615 indigenous communities, only 54 have a bank or a credit union. That is 9%. That is shameful.
In conclusion, we have an opportunity to make the best use of our national public asset. We must ensure we serve the needs of rural, remote, and indigenous communities. We have to recognize both the needs of these communities and the contribution they already make and can continue to make to Canada's economy and its national fabric.
When I started, I referred to Mr. Chopra's comment that Canada Post is a lifeline for rural Canadians. No one who is familiar with the importance of these operations and who cares about rural Canada would disagree. We are imploring the committee not to cut our lifeline.
Thank you to the committee for inviting the Union of Postal Communications Employees here today to have a discussion with you. Mr. West of the Public Service Alliance of Canada will be helping me with some questions you may have, if you have questions.
The UPCE is a component of the Public Service Alliance of Canada. We represent roughly 1,600 members at Canada Post and 150 members at Purolator. Our members perform administrative, technical, professional, and clerical work, including customer support for businesses and consumers. They are often the first point of contact for many Canadians who need advice and assistance on their postal services.
My comments today will focus on several aspects of the discussion paper recently released by the task force for the Canada Post Corporation review.
I don't think it will come as a surprise that our overall reaction is one of disappointment. We had hoped to see that the task force would take the public interest as its primary guiding principle in their review. While Canada Post may be called a corporation, the owners or shareholders are the people of Canada, and its service to Canadians must be first and foremost. As stated in the discussion paper, Canada Post has a universal service obligation and a mandate to meet public policy objectives.
A program not mentioned by the task force, and one that should be restored, is the food mail program. The current nutrition north program has been criticized by Canadians living in the north and by the Auditor General. Food prices for families have increased drastically and have become unsustainable.
In 2015 Canadians voted for change. The task force is just offering more of the same at Canada Post: cut services, cut jobs, raise prices, repeat. The task force doesn't mention the outsourcing taking place. In 2010 call centre jobs began to be outsourced to large multinational corporations based in India. While these jobs are still in Canada, there is no guarantee that these jobs will remain here.
Instead of investing in good-paying jobs, Canada Post would rather pay multinational companies that are usually based outside of Canada. All this does is create jobs that are of lesser value locally, are precarious at best, and now pay a significantly lower wage. Outsourcing not only sends profits offshore, it does so at the expense of the stability and the quality of the jobs.
The task force acknowledges that Canadians living in rural locations have expressed real concerns about the effects the closure of their post offices would have on their communities. Their response to the concerns is to either close all of Canada Post's remaining outlets, including those in urban areas, or to convert them into franchises. To realize at least half of the suggested savings, Canada Post would have to convert the 800 highest-yielding offices—in other words, skim the cream from the public entity.
While promoting franchises, the discussion paper doesn't mention the nature of the jobs at these outlets. They're not unionized jobs, so of course they don't come with the usual union baggage—living wages and decent working conditions. We can't help but wonder if this discussion paper is just the beginning of a road that will lead to the eventual privatization of the corporation.
The task force doesn't talk about Canada Post's management structure and the executive compensation practices. The multiple levels of approval required in the management structure for even a simple decision are inefficient and costly, and have a negative impact on the operations to business.
Despite repeated claims that the corporation is going through difficult times, our understanding is that senior executives continue to receive large personal bonuses while the majority of employees continue to receive minimal salary increases.
When we met with the task force, we also suggested that they review the structure of Innovapost and its relationship to the corporation. The discussion paper only mentions that Innovapost is one of the Canada Post group of companies, 98% owned by the corporation. Positions that were originally in Canada Post were moved to a Innovapost back in 2002 at its creation.
We question the value of such an arrangement. The costs of projects involving Innovapost have acted as a barrier to change and innovation. Meanwhile, Innovapost mirrors Canada Post's expensive top-heavy management model. It alone has 11 vice-presidents.
We wonder why it has duplicated Canada Post's executive structure, and we question its value. We believe it will be more cost-effective to return at least a number of Innovapost positions back to Canada Post.
Finally, the Canada Post pension plan has been in the news. Among the options in the discussion paper is a permanent exemption from the solvency funding payments required in the PBSA.
UPCE has already written or asked the government, through , to provide such an exemption.
We believe the solvency funding rules are unnecessary and counterproductive. They were introduced in the 1980s, partly to respond to insolvencies of private sector employers, and the plan currently is better than fully funded on a going-forward basis.
Before ending, I'd like to re-emphasize that we are concerned about the direction taken by the task force. Canada Post isn't just another business. It has a public responsibility. It also has a role to play in providing stable, middle-class employment now and in the future, offering new opportunities for new generations that are better than precarious jobs.
Thank you for the opportunity to share some of our views and concerns. Mr. West and I will be available to answer any questions you might have.
I thank the committee for this invitation.
The Association of Postal Officials of Canada represents approximately 3,500 members throughout the country. These persons generally supervise the processing and delivery of mail.
We are here today because in 2013, we were told during a conference call that Canada Post had a profitability issue, that we were being given a five-year grace period, and that a solution had to be found. Shortly thereafter, a five-point action plan was released. We deplore the employer's lack of transparency in this process. Since we consider ourselves very close to management because of our oversight role over postal operations, the employer could have shown greater transparency in this matter.
We see that Mr. Deepak Chopra stated earlier today that we were part of the solution. Unfortunately, we think that Canada Post missed a good opportunity at the time of including us in its discussions, of sharing the fact that there was a problem with our pension plan, that we were going to hit the wall, and finally, of letting us take part in the search for solutions.
We received the report of the task force and we hope that the government will make the right decisions. If we really are part of the solution, we expect to be included. There is no doubt that all of the bargaining units at Canada Post do not all share the same vision. We can support certain measures, but needless to say, transparency is an important factor in the corporation's success.
Since the stage has been set, we hope that a recommendation in favour of transparency will allow the four Canada Post bargaining units to sit down with the employer to explore solutions, rather than letting the corporation impose its solutions on us.
Thank you for your attention.
My name is Mike Palecek. I'm a letter carrier from Vancouver, and I'm the national president of the Canadian Union of Postal Workers.
With me is Jan Simpson, our first national vice-president. We also have our entire national executive board seated in the gallery. That's our leadership from across the country. We don't quite have 22 vice-presidents like Canada Post, but we have leaders across the country who are here today.
We represent about 48,000 postal workers at Canada Post in two major bargaining units. We've been actively involved in the very creation of Canada Post as a crown corporation and in fact every review of Canada Post since then. We built Canada Post, and we have a better understanding of the day-to-day operations than anybody.
Like some of the others here today, we're very concerned about the report from the task force. We believe it's a very flawed document. We're concerned that the committee's consultations will be based on this document and therefore tainted. The paper is filled with errors, with misrepresentations, and there are serious omissions as well. The CUPW will be providing to this committee a complete detailed breakdown of that at a later point. For now I'd like to touch on a couple of examples of this.
The paper predicts that Canada Post will lose money this year, even though all signs point to the contrary. They've had a fantastic first two quarters. It also completely omits that in the first two quarters of this year, for the first time, the growth of parcels has eclipsed the decline of letter mail. We expect that trend to continue going forward as parcel delivery grows. As a matter of fact, the German post office announced this week that they expect their parcel volumes to double by the year 2025. We expect to see similar things in post offices around the world.
It also notes that CUPW and Canada Post recently signed two tentative agreements, but fails to mention that one of these agreements includes important changes—changes that Canada Post told us are necessary for the corporation to considerably expand its market share in both parcel delivery and direct mail.
The task force paper says that only 7% of supporters of postal banking would use that service. That is factually incorrect and not what their survey said. The survey they conducted was of the entire public, not just supporters of postal banking. They found that 7% said they would certainly switch to postal banking or use its services. A further 22% said they would probably switch to postal banking. I don't think you could find a bank in this country that would not be happy with 29% market share of banking. And yet from this they tell us they don't think this is the best option moving forward.
We've heard from people across this country—from rural communities, the urban poor, and all sorts of people—that these services are urgently needed. Unfortunately, we don't have time to go into all of the submissions we've put together today. As you can see, they're hefty, and that can't be done in five minutes, but the vast majority of these issues were not addressed in the task force report.
We've prepared submissions on the financial situation of Canada Post Corporation and a pattern of deception and misinformation from Canada Post management. Year after year, Canada Post predicts that their revenues and profits will be substantially less than they are. It appears they've done it again this year. It was by about $100 million last year and about $500 million the year before. We simply have no faith in the predictions and projections they have made.
We've put together submissions around home delivery and the importance of maintaining it, and about how Canada Post can be used to help green the economy and green its own services. These are important issues. This government has made big commitments around climate change, and it needs to use the crown corporations. It needs to use its assets in order to bridge those gaps and make those commitments. Again, we see nothing on these.
I understand time is short, so I'll leave it there. I look forward to your questions.
I want to welcome all of you. A warm welcome also to the people who are with you.
I simply would like to say to you, and it is important to remind everyone of this, that you were the ones responsible for the successes at Canada Post.
I represent a riding that is both rural and urban, and people are satisfied with the service Canada Post provides. I almost never hear complaints at my riding office about Canada Post. People are satisfied with the service they receive. And my riding is quite large.
I realized something when I read the report, and I want to share it with you because I was really surprised. There is a mailbox near my home. For those who live in rural areas, it's at the back of a concession lot. I realized that every Canadian man and woman receives different service from Canada Post, but according to the study, people are satisfied. That's a very positive factor.
I enjoyed one point particularly among all of the comments, one made by Mr. Dubois, perhaps because it was in French and that's easier for me. You said that you did not know, first of all, that there was a problem. You said that it was hard to be part of the solution when you didn't know there was a problem.
In the report, I was struck by one paragraph, on governance. On page 10, there is a passage that reads as follows: “Based on the comprehensive input to the Task Force, this realignment should be undertaken with appropriate consultation and an eventual change of governance.”
I would like to hear your opinion on this, as well as that of any other representative who would like to speak.
With regard to the governance structure, how is the interaction between Canada Post and its workforce?
I'd like to go back to 2013.
It's like the story of the boy who cried wolf. He cried wolf too often, and at a certain point, no one believed him anymore. The wake-up call finally came at five to midnight, and people were told that there was a small problem with the pension plan. During discussions I had with the employer, I said this: “How is it that none of you came to knock on our door—we had four bargaining units—in order to tell us that we needed to talk and that we had a common problem?” This does not only involve the unions. It also affects management, executives and directors. It also affects all Canada Post employees.
I don't know why that didn't happen, and it is deplorable, but I can tell you that in the history of Canada Post, this is the first time that the four bargaining units are forming a common front to reach an objective. That has never been seen in the history of Canada Post. They are going to form a common front to achieve the same objective, which is to save our pension fund. We have reached this pass, because a financial problem was not raised when it should have been. It should have been raised at the time and now people are reacting, at five minutes to midnight, and radical measures have been imposed.
I don't know if I have answered your question, but the fact that the four bargaining units are forming a common front for the first time in the history of Canada Post says a lot about the situation.
There may be a number of things. Consultation is a huge problem. I can name four or five examples in which the law technically makes it mandatory for an employer to consult with its employees or co-develop certain things.
The way we've been consulted in the past was essentially to be told here's the document, here's the plan. We're there to consult, but then they say, well, unfortunately, we can't really move on this, because we've already sent it to the board of directors; it's already approved by the board of directors, so really we're just letting you know what the plan is. That's considered a consultation. The issue with that is that creates labour relations issues, it creates grievances, it creates legal challenges.
The five-point action plan may be the perfect example of this. We were in bargaining, and the corporation's position was that they were offering a deal, which we really didn't want, and they told us essentially that if we didn't bring this to the membership, they would offer a worse deal; so, under threat. Right after we agreed to bring that final offer to our membership for a vote, they suddenly came out with the five-point action plan. They hadn't consulted with anyone prior to that. We filed some unfair labour practice complaints.
That was also part of their rationale to say that they would never get a special deal from the Government of Canada for the pension plan. Sure enough, right after that happened, with the five-point action plan, they released the temporary pension solvency relief. So we were blindsided by the five-point action plan and we were blindsided by the pension relief. I would say we were more than blindsided, actually; we were misled, because we were told that would never happen.
The public message is always that they work with the stakeholders, but my personal experience has been the complete opposite.
As I said, we'll be providing a full list of all of this as we go through it. Simply in the meantime, there's no critique of Canada's banking system, for example, or the banks. There's no analysis of the payday lender problem in this country. In their polling they didn't ask a basic question. They didn't ask people who live in communities without banks, but with post offices, whether they'd use a postal bank.
There's nothing on Canada Post's financial performance in 2016 and the fact that the corporation reported the highest January to June profits since 2010. The task force mentions that Canada Post has an $8.1-billion solvency deficit, but they don't talk about the going concern increase from $1.2 billion to $1.6 billion, and of course that's averaged over five years. The going concern surplus on the pension plan is actually $2.7 billion for last year alone.
Their use of information is very selective. The unnamed experts they quote from throughout the document need to be named. We need to see the analysis of how they actually came up with this stuff. We need to see the opinion of the experts who gave contrary information, because there were some. We know that they had experts they met with who talked about how postal banking could work very well.
They didn't mention the study we gave to them that indicates that the value of ad mail decreases with centralized delivery and decreases in the eyes of the customers. They tend to mention negative information and leave out positive information. We see this throughout the report.
We'll most certainly be providing the committee with these details at a later date. Our members will be engaging with this throughout the country once the committee goes on the road. You'll have an opportunity to hear from postal workers about all of our submissions in detail.
It's something that will be in the written submission later on, but part of the issue I think is the availability of the data as well. When I received a copy of the task force report I sent in a request to the secretariat for the information, essentially for the polling data and the names of the third-party experts who were consulted. I just received a response maybe half an hour ago, so it makes it very difficult for us, for me anyway, to build a real presentation and consult meaningfully with actual data. If we'd had that data, I think we would have been able to consult in a better way.
It's also concerning to me that when I did receive the response from the secretariat, they named the primary partner, but they also say they've dealt with a bunch of other experts and they don't seem to be naming those experts. The question I had specifically addressed, especially for postal banking, was did you seek experts from the banking industry? I would personally see that as some form of conflict of interest, and I think you'd need to disclose that in the discussion paper. I didn't, again, see that. I didn't see any form of disclosure. I also don't understand why you can't name, on the paper itself, the actual experts who you consulted. The polling data can be pretty large, but I don't know why you wouldn't be able to attach that in the paper to name specifically the experts who you consulted.
The paper itself seems to, in a lot of cases, go in one direction essentially to build justification for an expected result, as opposed to providing what I believe to be an objective or empirical review of the facts so that any individual can have a real discussion about the options in front of us.
I thank the witnesses for being here with us today. We appreciate it very much.
At the outset I would like to say that personally I do not see unions as an obstacle to a solution, but as part of the solution.
We're talking a lot about postal banking, and this is what I want to focus on for the rest of the time I have.
I have read your document on postal banking, and I agree; I come from a rural area, and I agree that in some communities, especially in the “t-communities”, as I call them, some banks have left. The only thing left is Canada Post.
One of the comments I've read is that a postal bank can be quickly put in place because it already has the infrastructure—I agree—staffing and products and technology, and Canada could do this transition fairly quickly, offering a wide range of financial services. That's where I'm not sure, and I haven't yet made up my mind on what type of financial services Canada Post could potentially offer.
I noticed in your report you quoted a Scotia Bank executive, a VP of retail distribution. To paraphrase, customers do not go into branches much, but when they do, they ask for advice, and when they start asking for advice, that's where the technicalities come in for training. As you know, as soon as you ask for financial advice you have to be a certified financial planner; there are provincial regulations in place.
How did you plan on that? For me, if Canada Post would have access to its potential pool of employees, who are not trained, versus outside employees, who are already trained, who are either coming out of college with a CFP certification or they already have their mutual fund licences.... I think Algonquin College already offers that. I don't want Canada Post or its employees to shoot themselves in the foot when Canada Post could have access to other employees. How did you envision that?
Thank you very much, Mr. Chair.
I read the report with interest. I discussed the banking system possibility with some representatives. The report reads: “Launching a traditional postal bank today would be [...] an expensive endeavour [...]”. Profit potential would be limited, and investments in infrastructure would be required.
Upon reading the report, this does not seem like an interesting avenue. I would like to hear what you have to say on this, because you are really the mail delivery experts.
If I understand correctly, Canadians would be ready to accept mail delivery once every two days, once every three days, or maybe even less frequently, but for parcels it seems it is important that they be delivered. I think Mr. Chopra used the expression “mail-centric”. In my experience, mail and parcels are delivered at the same time. If we break it down, is it a way to modernize, make savings, and adhere to the needs of the people? I'd like to hear you on that.
Maybe Mr. Palecek could respond.
To follow up on what Mr. Ayoub was saying, how can we deal with the problem if we are not made aware of it?
I'd like to go back to a paragraph on page 63 of the Canada Post in the Digital Age report. It startled me. It reads as follows: “In the absence of major business and operational changes, as well as reduction in pension costs and funding, Canada Post's financial self-sustainability is not achievable in the medium and long terms.”
It certainly is not pleasant to hear the boss or the employer say that you have a problem and are really in hot water. I'd like to hear your point of view on that, Mr. Dubois.
I think that the committee is going to have to recommend improvements. I am thinking again of the governance structure and the best possible potential solutions. In my opinion, the workers should be part of the solution regarding the avenues to be considered, and should be doing so in cooperation with Canada Post management.
Finally, I would like to know how you view attrition in connection with the challenge being faced by Canada Post. I'll start with Mr. Dubois.
Does anyone have final comments?
Okay. Thank you very much.
Colleagues, on your behalf, I would like to thank all of the witnesses here today.
I'll choose my words carefully here. I appreciate the fact that you've given a different perspective from some of the testimony that we've heard earlier. Coming from a family where one of my brothers-in-law is a letter carrier, I know he would appreciate your comments here as well.
As Mr. Whalen said, we will be going on the road starting next week. We will have consultations in eastern Canada, central Canada, and western Canada.
You mentioned, Mr. Palecek, that many of your representatives will be appearing before us. We look forward to that. We look forward to your submissions as well.
This committee is charged with the responsibility of developing a report and presenting it and tabling it in Parliament before the end of this year. We look forward to further dialogue and further discussions with you as we approach that deadline.
Thank you once again.
We are adjourned.