Ms. Aitken, there's no good reason for that. We'll have to make a point of coming back.
Obviously you know the purpose of your appearance here. As I'm sure you're also undoubtedly aware, the , the minister responsible for Canada Post, has engaged in a very extensive and exhaustive consultation process concerning the future of Canada Post. The first part of that consultation process was for the minister to establish a four-person task force whose mandate was to examine the financial viability and sustainability of Canada Post. They did that, and they submitted their report to our committee. We examined it and we had that task force before us in a format very similar to this.
The second part of the consultation process is why we're here. The minister asked this committee to go across Canada to talk to individuals, organizations, and municipalities that have an interest in Canada Post and are affected and impacted by Canada Post and its future. We want to hear your opinions on what you think should be the future of Canada Post.
The process is pretty simple. We'll ask each one of you to make a short opening statement, hopefully no more than five-minutes. Once that is concluded, we will go into a round of questions during which all my colleagues around the table will have an opportunity to question you about your brief.
I suggest to you that if you have comments you think will exceed five minutes, try to pare them down. It's been our experience that most of the comments you would probably like to make in an opening statement get covered during the question-and-answer period anyway. There will be ample opportunity for all of you to expand upon your thoughts when that occurs.
With that brief introduction, we'll get going right away.
The first panellist I have on my list to make an opening statement is Mr. Andrew Scribilo, president of the Kenora and District Chamber of Commerce.
Andrew—if I call you that, after we've had an introduction—please commence. You have five minutes.
The brief I handed in contains the answers that our business community in Kenora gave to the questions.
As president of the chamber of commerce of Kenora, I also sit on NOACC, the northern Ontario chamber of commerce. We're very active in the whole northwest, not just in this region.
Our feelings and thoughts on Canada Post are that we would like it to stay. There may be alternative methods and modes, as we put it in answering our questions in here, that may satisfy the federal government.
For us in Kenora, we have home delivery, which seems to work very well. We also have rural post boxes as well as remote stations. For example, Keewatin is a post office, post office box, and rural delivery—two boxes—out in the country.
As far as Canada Post goes, in Kenora there's an outlet store at Shoppers Drug Mart. For us, I don't think it's used as heavily as the regular post office, open to Monday to Friday. They provide exceptional service, and you'll see that in the questions we've answered. We're very happy. At the chamber we use the postal service a lot. The company I work for uses the postal service exclusively with Canada Post, with Priority courier and Priority post.
In our particular urban area, Kenora, they have home delivery. That's just within distance of our main station post office. It seems to work very well. They have contractors delivering to the post office boxes external to urban—the non-urban, the rural country, which is a lot of what takes place in our communities. I will say that it works very well.
I've read some of the documents here. They're looking to see how they can cut costs and they are looking at the revenues. We can get into that. We can talk about the alternate-day service or whatever they're looking at. It employs a lot of people in our community. A lot of these communities were devastated when we lost a lot of the paper mills and a lot of the rail. Our communities have really gone downhill. To lose more employees, this time at Canada Post, would just be another nail in the coffin, basically. We intertwine with all the local people and all the local businesses.
That's the feeling from our area on Canada Post. We're happy with the service. We're also happy to see what alternatives are out there to help transform it into something we still want it to be.
I have to let you know that Canada Post has cost me a lot of sleep over the past summer. The reason for that is that my business, Norwest Printing and Publishing Group, relies heavily on Canada Post. When there was talk of a strike and the dates kept being extended, that forced my business to find other means of getting our invoices and our product to our customers. We receive the majority of our revenue through Canada Post in terms of our invoices and cheques and so forth being mailed. We rely heavily on Canada Post because that's one of the only methods we have in Dryden to accurately service our customers.
I don't want to say we're indifferent. What I'm here to say, basically, is that if the union and the corporation cannot resolve their issues within the next year or so, we will find means other than Canada Post. We employ 40 full-time and part-time employees right now, and since we are a new business—we just celebrated our first year—we don't have the same resources as other businesses that are more established. We have to react a lot quicker. I must stress this: we will find means other than Canada Post to service our customers if they are unable to resolve these issues between the union and the corporation.
For example, in terms of the notes I provided to you, right now I own three community newspapers: one in Dryden, one in Red Lake, and one for our first nations within the region. I own a commercial printing company as well as road signage. We do the regional phone book for Kenora, Dryden, Red Lake, and Sioux Lookout, as well as the in-flight magazine for Wasaya. Out of that, 80% to 100% of our invoices come through Canada Post. With regard to the delivery of the newspapers, we spend on average $5,000 a week, and our mail-out for the commercial printing is about $100 to $200 per parcel. We do a lot of business with Canada Post.
I would say that Canada Post has about 90% of my business. It's very important that Canada Post resolve these issues sooner rather than later, because I cannot jeopardize that business. What that means is that if I lose my business, since we employ 40 individuals with my company, that's 40 individuals who are out of work. My colleague here from Kenora has stated that this region does need jobs in the area.
I'm here to basically say, please resolve your issues. People like me are getting caught in this fight, and I don't like being in this position.
Well, David, I'll let you know that we never said we were going on strike. It was Canada Post that said we were going on strike. We have a tentative collective agreement that is good for a very short time period. We wanted to resolve the issues. We wanted to make sure that we were heard. Anyway, that's just to let you know.
Actually, I've known David for a few years, although I'm sure he doesn't remember.
Yes, small businesses need to have daily delivery. How can you operate by getting money every other day and sending your bills out every other day? That doesn't really work, and there is no need to change that. We are making money. We have made money.
The three years that we haven't made money since 1981—and I'm not even sure they've paid it out yet—are connected to a 30-year old grievance on pay equity with PSAC. The other one was on paper, by accounting, because they changed their accounting principles—I'm not sure on exactly what—so they lost money that year. Then they lost money the one year that we went on strike. Again, they caused the strike. They hired the scabs. They hired the helicopters. They hired everything else.
I've been there for 42 years, so I've been through a few strikes and I've seen a lot of things change. Why does Canada Post have 22 vice-presidents who are being paid as much as they are? Why does it have a president who's being paid as much as he is? Why did it build brand new buildings in Winnipeg and Vancouver if mail volumes are dropping? Why did it go with all that brand new equipment? Why did it put a machine into Thunder Bay again? There was one there before, and they didn't have enough volume then—and that's when there was mail to keep it running—but no, Canada Post took one out of Ottawa and put it into Thunder Bay. Then it took all of our mail and delayed our mail going out. Canada Post delayed it by two to 10 business days instead of leaving it to be sorted locally and support jobs.
When I first started at the post office, I was making a dollar an hour more than the guys at the mill. I'm now making less than half of what they're making, but I'm still employed, while 600 of them were put out of jobs. They had to go elsewhere, my brothers included. Why? All for the sake of a dollar, because Canada Post wants to make more money.
Again, it is making money. It made money in the first quarter. Why does it make money? It's because it didn't follow the Canada Post Corporation Act and give customers six months' advance notice that it was going to be increasing the price of stamps. It yanked the stamps off the walls and said that those stamps could not be sold because the price was going to increase overnight.
Why did Canada Post take the publication rate away from the small newspapers? There was nothing wrong with that. That was a subsidy. Maybe that subsidy came through the government—I'm not exactly sure—but it helped the small businesses. It helped the small newspapers. Where are they now? They're paying full price, and that's not right.
I was also really upset when I heard you weren't going to Sandy Lake. That's a shame, because you need to know what it's like in northwestern Ontario. You can't even drive there; you have to fly. There are a whole lot more things going on, and dealing with some place an hour out of Winnipeg, although it's still a drive, is not the same thing.
There's a whole lot more I could say.
I'm sure we'll get to it in the question period.
Before we start that, though, you should know that we wanted to go to Sandy Lake. We had originally scheduled this committee to go there. Unfortunately, they were not able to accommodate us for a variety of reasons, so we had to withdraw. We will be going, however, to another first nation in Manitoba. Our first choice was Sandy Lake, but it was not our decision to pull back on that location.
We'll start now with our seven-minute round of questions. We'll go with Monsieur Ayoub.
You have seven minutes.
You may want to put on your interpretation devices if you are not fluently bilingual.
Thank you for being here.
I am very pleased to be in Dryden for the first time, and I am sure my colleagues feel the same way. We may come back again, Ms. Aitken. As the chair said, we wanted to go to Sandy Lake. We want to go to all corners of Canada to hear what people have to say about Canada Post.
I have done a little research. What was your reaction to the information about potentially ending home delivery? I thought I understood that there had been a survey. How did you learn that?
Mr. Scribilo, you can start.
I think it mirrors that.
I just want to answer the gentleman, Ramez, about social gatherings in the communities. In the remote north, I've lived in Big Trout Lake and throughout remote Ontario, working for my company, other than the chamber of commerce. It is a social place, the post office, because that's where everything comes in. That's where cheques come in, letters come in, mail comes in. It is a social gathering. It's no different from Kenora. They have giftware in there, so there is revenue generated out of each of the post offices.
Reality gets in the way of fun sometimes, or what we would like.
Thanks very much. I appreciate that.
We've heard a lot about the consultation from the communities we've gone to. We didn't hear enough; we want more. It's a narrative that people are trying to build on. Canada Post actually went to a lot more cities than we are going to visit. Unfortunately, we are running into.... There are three, four, five thousand communities across the entire country. There are only so many we can get to. Sandy Lake and Sioux Lookout are going to miss out, and Thunder Bay. There's only so much....
There won't be time now, but we'll ask you to send in information afterwards if you have any ideas about how Canada Post can better consult about these kinds of things. Since we can't get to everyone, we would certainly appreciate it.
Have they contacted you about any move to community mailboxes in your area, or is it all door to door?
Going back to the mid-1980s, they took the machine out of south central, which is Toronto, and put it into Thunder Bay. They wound up taking it out a couple of years later because it was not viable. They didn't have enough volume. Back in the 1980s was when there was mail.
Yes, volumes are dropping, and what they did, I think three years ago, was take the machine out of Ottawa and dump it into Thunder Bay. That took all of our mail. We used to have what was called twin mailboxes, one for in town and one for out of town. The out-of-town mail went to Winnipeg to be sorted and shipped off. That was fine. We kept our local mail here. Now we don't keep any mail here. It all goes to Thunder Bay because they need the volume to put through their machine, and I bet they still don't have enough.
Kenora sends all of its mail to Winnipeg to be sorted there, because it takes too long going to Thunder Bay. The mail can take easily an extra week to 10 days, if not longer, to be sent from Dryden to Dryden, or from Dryden to Sioux Lookout. If you want to send mail up north to Port Severn, which only has a flight once a week, how much more of a delay is that?
We run a 24-hour operation here. We ship the mail to everywhere: Kejick, Whitedog, Fort Severn, Stanley Lake, Weagamow, Cat Lake, Angling Lake, Bearskin Lake, Deer Lake, Wunnummin Lake, Pikangikum, Summer Beaver, Eabamet Lake, Lansdowne, Sioux Narrows, Nestor Falls, Emo, and Rainy River. I know I am missing some, but we sort it all. We're the ones who sort the mail and deliver it all out there.
Another thing they've done is decentralize again. Fort Frances used to get two mail trucks, one from us and one from Thunder Bay. They cut out the one from Thunder Bay, and now everything comes through us down to Fort Frances. Our truck used to meet the Fort Frances truck to give Atikokan their mail. Now Atikokan's mail only goes through Thunder Bay.
You're making it worse instead of better. Let us sort our own mail. Give us the direct routes. There is so much....
Personally, I don't get door-to-door delivery in Keewatin, and I'm fine going to the post office where there are the locked boxes. I know that the people who get door-to-door delivery love it. It's less headache for them than going downtown to pick up their stuff.
It's not that the communities are that big—there are 15,000 people—but it's a service that has come to be expected, so when some of your questions came out, the locals didn't even think they were ever going to lose their door-to-door mail. Living in a community, they expect to have it.
In Keewatin we've always had that. In Kenora, they've always had door-to-door delivery. We have 20 or 25 people hired as letter carriers in Kenora. It's that much more employment for our community, and it is good service, with parcel post and everything.
Thank you all for being here.
As you know, this is our fifth or sixth meeting, and we've heard a lot of complaints about Canada Post—the corporation, the management, its non-consultative nature, and its ability to create crisis without crisis occurring—so we understand. We've heard it over and over again, and we've heard about seniors and people with disabilities needing their door-to-door delivery.
We need to find a road forward. That's why we are asking to hear from you as communities as to what the road forward is.
Mr. Neegan, you say if Canada Post creates this crisis, then you'll look for alternative sources. That's an interesting one, because the crisis is created by the corporation, maybe under a different mandate. Now it's a different mandate. This thing has stopped, and they seem to have created a financial crisis.
As a business, would you create a crisis by saying you're going into insolvency?
Ms. Aitken, do you feel that under the current management, the workers can create a plausible environment in which to work with management so that we can come to a solution? Does it need to be facilitated?
If pensions, for example, were taken out of the equation.... The pension liability is really not a liability. What Canada Post has said is that if it went into insolvency.... Now, that is really bad thinking. If you're an ongoing concern, you can't think of insolvency, so would a change in mindset probably...? What do you think?
I just want to pick up on something that was mentioned earlier with respect to pension liability.
I'm a guest at this committee and I'm here for a week. I was just confirming with Mr. McCauley that generally accepted accounting practices occur. One of them is looking at pension liabilities with respect to the potential of insolvency. That's an accepted practice that occurs all over the world.
One of the narratives we've been hearing regularly is with respect to the potential for a change in management. We were in Windsor yesterday, and Mr. Ken Lewenza, Jr., was there. He talked about the need for management and the union to work together to solve some of the issues with respect to Canada Post. Mr. Neegan, you talked about that, and about how you'd like to see a coming together, because at the end of the day, it's the end customer who's important here.
This question is for all of you. Do you subscribe to the very thing Mr. Lewenza spoke about yesterday, in the way you do business with your employees, in terms of this collaboration? Ultimately there has to be a decision-maker, but employees generally have good ideas. Working with management and coming together is very important. Would you subscribe to that?
I agree with David. We are an essential service. We are the only ones who go everywhere. If you don't think so, come and see. On any day, we have FedEx parcels that have been shipped through Canada Post. Canpar, UPS, Purolator—we take them all. We're the only ones who do go everywhere.
In order for us to go everywhere, we need to be self-sufficient, according to the Canada Post act, but does that mean we have to make a 10% revenue, or should we be making enough money that we can reinvest and make things better for us?
Yes, we do sell things. In fact, if you want, I have a hockey poster signed by Guy Lafleur. It's only $179.95 plus tax. I just got it out yesterday. It's on the wall. Sidney Crosby is $299.95 and Darryl Sittler is $179.95. Those three picture frames are gorgeously done. Unfortunately, I could only get the three. The other three are only through direct shipping. You pay with a credit card and they ship it to your house, so you need door-to-door delivery.
Thank you so much for coming. It's really wonderful. I love to hear about your buying the community newspapers, Mr. Neegan. Organizations like yours that help build communities deserve our support, and I think corporations like Canada Post, which helps preserve and build communities and is part of a national infrastructure, need support.
What we're trying to figure out is what level of support and what type of support people need. Critical to that is what type of future lines of business we should be in. Should we be in a service-contracting phase or a service-expansion phase? What does the market require?
My first question is to you, Mr. Neegan. You're also in a declining market share business. Would you benefit from Canada Post doing more door-to-door delivery or more local sorting, or do you feel that you've already accommodated for the fact that they don't, and therefore it's heads or tails for you as to whether or not the service is now expanded?
Mr. Scribilo, in preparing for the meeting, I was skimming through the Canada Post annual report, and they refer to all Canadians as their customers. I thought about it for a second. I thought, when I'm at work as an MP, I'm a customer of Canada Post, but when I'm home, I'm really the product that they sell. Access to me is the product that Canada Post is selling, so I'm really their product.
You represent business people and the chamber of commerce. Do you feel that your members would benefit from an expanded, quicker service? You say you're satisfied, but do you think that it's time to expand and improve Canada Post service? Do you think it's fine the way it is? Do you think we need to keep scaling it back in order to save money so that it can be financially self-sufficient?
Those are three options on the table.
Could I make a quick comment?
One of the things we're looking to do is expand our business, and Canada Post is an essential part of that plan. I should have emphasized that in my briefing notes. We're looking to go outside the region of northwestern Ontario in terms of our products. There are a number of products we've identified that we want to sell. We have to get those to our customer base very quickly. This is something we'll do in the next couple of years, and it is essential for us to have Canada Post around. It is part of our strategic plan overall to deliver that new service. I can't talk too much about the service exactly, but that is the way we're heading.
What that means for the city of Dryden is more jobs for the community. As I mentioned earlier, in communities such as Dryden, Sioux Lookout, and Red Lake, most of which I have lived in, the population has shrunk and there are fewer and fewer services. We're looking to bring some of that money back into northwestern Ontario. Canada Post is part of that plan.
Thank you, gentlemen, for being here with us.
Mayor Wilson, I know you've just arrived. Mr. Middleton, I'm not sure if you have been in the room listening to the first session we had, but on the assumption you both are here as newcomers, I'll go over a brief couple of procedural notes for you.
This is a part of an exhaustive and ongoing consultation process initiated by the , the minister responsible for Canada Post. Phase one of the consultation process was the establishment of the task force, whose mandate was to examine the financial viability of Canada Post.
That examination has been done. They have produced a report. We have examined the report and questioned the task force members on it, but phase two is why we're here today. It is a cross-Canada consultation with organizations, individuals, municipalities, and others about the future of Canada Post, more specifically the views that people like you may have on what you would like to see in the future for Canada Post.
We're going to ask both of you, when it's your time, to make a brief opening statement, hopefully no more than five minutes. Following that, there will be a series of questions from our committee members, and answers. I always assure people that even if you don't have enough time in five minutes to get all of the information to us, I know that the question-and-answer process will elicit a lot of the information you may have and may want to transfer to our committee.
That said, Mayor Wilson, I have you first on the speakers list if you would care to give an opening statement. Please take five minutes or less.
Sure, I can do it in less, and being a “W”, I'm not actually used to going first.
I'm just going by script, and the following is my own opinion. Time didn't permit for a formal input by council as a whole. I just wanted to state that.
I want to compliment the task force on its comprehensive working paper, “Canada Post in the Digital Age”. It's really well balanced and reflective of the positions of all stakeholders. I thought it was really well done.
My input is based on the belief that, separate from political interference into the strategic planning efforts of the 2,500 executive and management team members employed at Canada Post, this task force is truly committed to a fair and balanced study on the provision of “quality services to meet the needs of Canadians at a reasonable price in a financially self-sustainable manner”. I'm going on that premise, and your financial situation is not lost on me. That's a tough one.
At a high-level view, Canadians recognize that the volume of mail has been decreasing for some time. To a lesser extent, Canadians understand that Canada Post is facing financial pressures that threaten its long-term survival. This is on page 33 under “Recognition of Systemic Pressures”.
Using your conservative 2026 projections of annual losses amounting to $721 million per year from this year's $63 million annual loss, you are really headed in the same direction as the United States Postal Service, which regularly loses about $5 billion a year.
While the hard work of developing and honing the technology and tactical processes used in streamlining the collection, sorting, distribution, and tracking of mail is largely complete in the industry, one thing that hasn't changed is the fact that the post office has to do just one thing, and that is to deliver the mail each day. It is laborious work, I'm sure.
More and more Canadians recognize that the system is not sustainable in its present form, yet we are loath to make changes because we are creatures of habit. Canadian hockey only changed when it was forced to after 1972, for those of you old enough to remember. Do we have the political will to do what's necessary in 2016 to save and stabilize Canadian mail for the long term?
Band-aid solutions solutions have not worked here or in the rest of the world over the past few decades. I'm hoping that you will opt for both/and solutions instead of either/or solutions. For example, one, don't do as the American government does. They provide bailout funds every so often, which only serves to prolong the agony. I did note that Canada Post has deferred $1.4 billion in solvency payments related to pension funding in 2015.
Two, don't be tempted to try adding new public services with such an expensive and non-competitive workforce, as illustrated in your working paper.
Three, move to a community mailbox and a franchise model at high-volume corporate post offices over the next few years.
Four, implement alternate-day delivery and add a day or two to the time it takes for a letter to get to destination as the de facto standard across the country, placing a premium on faster service for those who want it.
Five, adopt other marketing and advertising strategies as laid out in your paper. I'm sure you're not waiting for someone to give you the green light to do what makes sense. Also, promote the strategic advantages of Canada Post over customs brokers for cross-border and international shippers.
Now for small-town Dryden, my primary obligation is to the citizens of Dryden, of course, specifically those who would be negatively impacted by any form of reduced services from the current model. What follows is a suggestion on how to meet the postal needs of all Canadian towns and cities in a financially self-sustainable manner, and it's just two bullets and three subs, so it's really short.
Create a model around the 80% or 90%—I don't know the numbers; you can do a survey or a proper study—of Canadians who can walk or drive to a community mailbox. Those with mobility problems should receive door-to-door mail either for free or at a premium price, depending on the political will of Parliament. If at a premium, pensioners and low-income earners would receive a credit on their income tax. Door-to-door delivery would be on alternate days.
I just want to note that I pick up my mail at a community mailbox. It's an opportunity to socialize if I feel inclined, and my mail is also more secure this way when I'm away for a few days. People can break into anything, if they want to, but it's a lot harder when it's in a locked box.
Fixed costs will stay high for years due to inflexible contracts, meaning that you need to tackle these issues immediately. My suggestions likely won't get you to the break-even point, but will go a long way in making deficits and total debt more manageable.
Thank you for having me here. Chief Bull, welcome, and Andrew.
One of the problems, of course, with following another politician, is that he usually says what you want to say.
Some hon. members: Oh, oh!
Mr. Sandy Middleton: I come from Red Lake, Ontario. It's made up of five small townsites: Red Lake, Balmertown, Madsen, Cochenour, and McKenzie Island. Each is distinctly different from the others.
Madsen has a small post office right in town. It's approximately eight or 10 kilometres from Red Lake. Red Lake is the largest of the five townsites and has a post office on its main street. Balmertown is about 11 kilometres from Red Lake in the opposite direction from Madsen, and it also has a smaller post office on its main street. It serves Cochenour and McKenzie Island with the group mailboxes. They sort the mail in Balmertown and it gets trucked to the mailboxes in Cochenour. Folks from McKenzie Island come across either by private boats or by a a little passenger ferry, which we run, and then walk up to the mailbox and get their mail if they don't have a vehicle on the mainland. In winter, they can drive across an ice road. They have no service, of course, during freeze-up or breakup, which can usually be a couple of weeks in the spring and a couple of weeks in the fall.
We also serve the unincorporated areas around our municipality, which can be up to 30 or 40 kilometres away from the main town. There are a lot of people living out on little lakes and in tourist camps or what have you, who stay there all year. We serve a fairly large area.
I know it's kind of an overused term, but Canada Post is part of the fabric of Canada. I don't think too many people would want to see Canada Post disappear out of the landscape.
I was thinking on the way down here that they are also very close to municipalities in some ways, in that every year you have a budget. Those budgets, of course, are fun times. As a municipality, we're usually left with two or three options: raise taxes, cut service, or a combination of both. I'm pretty sure that we're not going to have 1,000 people come in and build houses in Red Lake anytime soon.
I'm guessing that you folks face the same problems. The problem, of course, is that nobody wants you raising their taxes and cutting their services, so somebody has to be the bad guy. Once you're the bad guy, you're going to be the bad guy for the rest of your life, so you just have to get used to it, bite the bullet, and do what has to be done.
It's obvious that Canada Post, or any large corporation, can't continue as they're going and hope to make money. Changes do have to be made. I'm sure in their heart of hearts most Canadians know that, and most Canadians want to keep Canada Post.
We've had problems in our community getting an individual to deliver the mail from Balmertown to the community mailboxes year round. It's solved now, but I'm sure it will pop up again in the future. As I said, it's fixed now, but when it's not, then the folks on the island and in Cochenour have to drive another eight kilometres into Balmertown to pick up their mail. Sometimes folks in our community aren't really happy with Canada Post, but you know what? They get over it, as they always do. Small-town Canada has very resilient people. They take what you give them and are happy to have it.
I believe at some point in Canada—and Drew or one of the other previous speakers may have alluded to it—we created a two-tier mail system. That will be a problem in the future, because people in Toronto are used to a whole different level of service from what we are. We're happy with what we have. There's certainly room for improvement, but nothing that's going to make anyone jump into the lake, let's say.
Thank you for having us here.
I'll talk a little bit about the community itself. There are 3,400 people on the band registry, of which, I would say, a thousand live on reserve and two-thirds are off reserve and sort of scattered throughout the region.
We get only once-a-week mail service, so that's four times a month that we get mail brought in, usually through a contractor air service. We're semi-remote. Prior to that, HBC ran our post office. Then when we got access to the community back in the eighties, I guess, we had access, and subsequently people would move and get services in town. They would go shopping in town. HBC had the monopoly on grocery shopping and all that prior to that, but a lot of people with road access were able to go to town. They even got mailboxes in town. Hudson is our closest town.
Frenchman's Head is across the lake from Hudson, which has the POV 1X0 box number, and a lot of my business mail comes to Hudson and we pick it up. It's 10 minutes away by vehicle. There are three northern communities—Canoe River, Whitefish Bay, where I live, and Kejick Bay—that get their mail brought in once a week through this contractor.
Now that we have road access, they drive the mail in and it's put into this little office where they put the mail in each little...and you go and pick it up. It's open four times a week. It's open for three hours on Monday, Tuesday, and Thursday; on mail day, it's open for six hours. We get $24,000 annually from Canada Post to manage and run the facility.
There is no cash on the premises. There are no money orders and those kinds of things. We don't do that. We used to, but there was an issue with irregularities and fraud and theft back in the seventies, so that particular convenience was taken away from us. Now a lot of people get CODs and pay them outright, and there's no money kept there.
I did talk to our post office person there this morning, and she would like to see an increase in her wages. She gets $15 an hour multiplied by roughly 15 hours a week times two weeks, so she gets paid for 30 hours every two weeks, which is very minimal. She would like an increase and would like the mail to come in maybe two or three times a week. I think she's kind of opposed to mailboxes also. People would be tampering with them and perhaps people would be losing keys and there would be damage. There is no third party pickup at the post office. If you get a cheque or a pension cheque, you have to pick it up yourself.
I'll leave it at that and stop there for now.
Thank you all for coming. It's interesting to hear different perspectives.
The first table had perspectives different from yours, and it's great to have someone come down from a first nation to let us know what the service levels are like up there. It sounds as though they're quite minimal, but for obvious reasons.
As far as using Canada Post as a way to provide high-quality, middle-class jobs in communities across the country goes, it sounds as though on the reserve that's not a middle-class job at all; it's a very low-paying $225-a-week job. It sounds as though the operating budget for that is very small, perhaps small even compared to other small rural post offices across the country.
Again, I would suspect that when you talk about “half”, you're talking mostly about delivery. That doesn't affect us, because we pick it up at the post office.
We get a little card in our mailbox that says we have a parcel, we talk to the nice lady at the counter, and she gets the parcel for us. As far as delivery goes, I get very little, but I can always tell when my wife hasn't had a good night's sleep, because when I get up in the morning the home shopping channel is on, and usually about four days later I have a parcel in the mail, so actually, to my way of thinking, they're pretty darned quick.
Voices: Oh, oh!
Mr. Sandy Middleton: For businesses, it may be a different situation. They may need something tomorrow, but that's not always possible.
Now, maybe to correct the views of Mr. Wilson, we're not the task force. We're the parliamentary committee that's looking at the task force. The task force had a more constrained view on what they were required to do. They were looking at Canada Post from a self-sustaining manner, but we're open to doing other things.
I just want to confirm that your view is that we should take that road: that we should not increase service levels or taxes and we should find a way to counteract the loss of 190 million pieces of mail every year or whatever it is. Every year we should be cutting $190 million out of mail, and if we have a growth of 90 million in parcels, then that's how much we can grow. Is that right?
It's striking that the more we go around, especially to the rural areas.... You mentioned that the level of service in Toronto versus out here is very different. It's the same in many Alberta rural areas. I don't want to say they put up with less, but they accept less than larger municipalities, and that's very true for health services and a lot of other things. It's more and more apparent that we have to approach this as two different issues that we're going to have to address. There's the rural issue and the downtown one.
I want to follow up on what you were saying. There is only so much money, and we will get to a point.... The report is showing a loss of three-quarters of a billion dollars within nine years, and it's either going to come from higher taxes or from—we're cowards—other areas. I'd like to hear feedback from you all about what you would see as a priority for your community. Is it cuts in other social areas or changing the way we do postal service?
It will come down to three-quarters of a billion dollars a year across Canada, which is a lot of palliative care, health care transfers, roads, or else maintaining a dwindling postal service that we may not have the courage to address. I'd like to hear about what's more important for your communities.
In our community, they recently changed sorting to Thunder Bay, and probably in yours as well. I think all of ours in the northwest went to Thunder Bay because someone bought a fancy new machine, and we had to justify buying a machine.
I had in my brief that it was three days, but when I went back and checked, we were told we would still get local delivery in two days. As a municipality, we sent out four or five different mailings at different times and with different-sized envelopes. We tracked how long it took to get them back. Two days was most certainly not the norm.
I think we got one back in two days. I believe it was three days for around 30% of them, but the others took up to eight or nine days. We used to sort mail locally, and I wouldn't be too surprised if we lost one employee when that sorting went away. When we sorted it locally, we did get it in two days.
For anyone to think you can put mail in a truck at three in the afternoon, drive it down to Thunder Bay—about a seven-hour drive—sort it, and get it back and in the boxes the next day in Red Lake, Ontario, is a bit of a stretch. We didn't have a good experience with it.
I want to return to the whole question of postal banking. This is obviously one of the options that's being considered to revitalize Canada Post. I think the idea behind it is that Canada Post has this network of offices all across the country, and it has a presence even in many smaller communities that have been abandoned by the big banks.
When you look at other countries, you see that they have financial services delivered through the post office. It seems to create a lot of revenue for their postal systems.
I think I know where you're at on this, Mr. Wilson, but I will ask the other two panellists to share any thoughts they might have on whether this is an idea worth pursuing.
There are a couple of things I have highlighted on that. Certain countries have embraced it, including Japan, South Korea, China, France, Italy, U.K., and India.
I thought this was an interesting perspective on it:
||...in November 2015, Japan sold an 11 percent stake in its postal service, which houses the country’s biggest bank by deposits and its largest insurer. The sprawling operations had become a symbol of government inefficiency and cronyism.
The article was trying to be balanced. It went on to say:
||The track record of postal banking suggests a trade-off. Government-run postal banks can be effective in reaching rural and other underserved populations,
—which is what Sandy was saying—
||but can also be used to divert savings to investments whose goals are more political than profitable.
That's probably my biggest concern.
||Opponents of postal banking argue that getting the unwieldy postal bureaucracy involved in financial services can be a disaster that could stifle startups working to adapt mobile technology and new data tools to serve the unbanked.
There are pros and cons, but I can see that the community hubs model, which is maybe what you're suggesting, could work in certain communities.
Chief Bull, Mayors, thank you for being here with us.
As we told you earlier, this is a new approach and new things are being said that are quite different from what we have heard up to now.
I am going to try to get straight to the point. Are you in favour of Canada Post being privatized?
Mr. Mayor, if you want to start, I will give you the floor.
My question was more for the other.
It doesn't affect Canada Post, but at the same time, it affects a portion of the public, as the previous witnesses talked about.
You have to make arrangements to pay your bills even if you do not receive them. If there had been a strike at Canada Post and you had not received your bills, you would have had to pay them as usual. The big corporations want you to do that.
Do you have Internet access everywhere in this region? Do you have high-speed Internet access? I imagine that you have more difficulty getting Internet access, the first nations members, but I do not know.
So it's the same for you guys.
Some concerns have been expressed to this committee about seniors and people with mobility problems.
As we visit the four corners of Canada, we want to know what service Canadians want to get from Canada Post in the future.
In your specific situation, in your region, what would you improve at Canada Post? What is there at present that does not suit you and what would you like Canada Post to improve, in order to get better services?
In addition, has Canada Post consulted you in the past about the changes or service improvements to be made?
Mr. Mayor, you can answer first.
I agree with my colleague. The testimony has been almost 100% different than what we heard in southern Ontario. I'm sensing a general satisfaction with the level of service that Canada Post is providing.
However, I will say, Mr. Middleton, that you did cause some laughter around the table when you said that there's not much that would make people jump into the lake. I thought that was a really local.... Well, actually, that's my question for all three of you. What would make people jump into the lake over the current situation with Canada Post or over lack of improvements going forward?
I'll start with you, Mr. Middleton, and then we'll work our way across the panel.
Your presentation has been a 360° turn, and this is interesting. I have a question that has a yes and no answer.
Canada Post, for the most part, is the fabric of Canada. It's a national symbol connecting communities. In your presentation, you look at it as both a business and a service, so it has to provide a service.
You stated that politics may be involved in the decisions. We have listened to a lot of presentations. Sometimes it may be politics that cause issues where depots are moved from, say, Windsor to Toronto, so that the mail goes from Windsor to Toronto to be sent to Winnipeg. That's nonsense.
Letting Pitney Bowes keep stamp prices at 85¢ while Canada Post charges one dollar—I think you heard the previous presentation there. Comparative advantages are not there, and it's management's decision. Whether management was trying to privatize it or what its mandate was in the previous government, we don't know. We just want to move forward.
You've been listening to the task force, and the task force has made certain recommendations. You also have seniors in your communities who will need special delivery, but some of the premise that you base it on—and I'm going to talk about financial sustainability—is that we were told by many that Canada Post management did not think outside the box. There are tactics that you can adopt from different parts of the world, and they didn't. They focused on financial sustainability. I therefore picked up their financial statements....
You are a mayor. Would you manage your assets and liabilities based on an ongoing concern or on insolvency?
Not quite. I know we don't, and I'm pretty sure Dryden doesn't.
Our workers get paid more than we do, which you know going in. Does that attract good people, for the most part, in municipalities? I believe it does, because they are there because they want to make their municipalities better. I understand that could be a whole different set of parameters in a corporation, but at some point—
I remember talking to my brother-in-law once, whom I previously mentioned, and if he finished his mail route at noon—and he'd walk; he was in a tad better shape than I am—he could then do another route for overtime. I thought that was a funny way of looking at things: it was eight hours of work, but four of it's going to be straight time and four of it's going to be overtime, so he's getting paid for 12 hours here. I'm not sure if it's time and a half or double time for overtime, but it was great for him.
Colleagues, please take your seats. Thank you very much.
Mr. Pareis, you have been listening to the proceedings, so you know how this works. Mr. Parkes, I'm not quite sure if you're aware, so let me just reiterate that we will be asking both of you gentlemen to give some brief opening comments. Give me your perspective on what you would like to see in the future for Canada Post, or what your organization's perspective is on it. Following your opening comments, we will have a series of questions from all of our committee members, and during that question-and-answer process, I hope we'll be able to elicit information that you may not have had a chance to give in your opening comments.
Mr. Parkes, would you care to give it a stab?
Yes, I can start. I apologize for being not prepared, other than the fact that you're going to hear from me.
I'm from a small community. Our population and our municipality is about a thousand people. With the loss of businesses, our municipality is turning into to kind of a retirement home for seniors, and should we as a small community lose our post office, it would be devastating. I think this in itself would hurt our community. We lost our credit union recently, which doesn't help the situation, and that is kind of what it's all about.
As far as the services we get from Canada Post are concerned, I have no complaints whatsoever. I think it's great from a small community standpoint that we have a little post office, and I would like to continue to see it remain here. Of course, if you guys ever decide that it should leave, I've probably got your name and number now, so....
I'm going to be less economical. I have a statement here that I'm going to read.
My names is Brad Pareis. I'm a letter carrier with Canada Post as well as an officer in my local union, the Canadian Union of Postal Workers. In more than 22 years of service with Canada Post, I have worked in five provinces, nine cities, and many depots.
Today I'd like to reflect briefly on the working paper entitled “Canada Post in the Digital Age”. It appears that the model of the study paper is largely built upon reductions for savings as opposed to additions for profits. I believe the public doesn't need a service that mimics FedEx, UPS, or DHL, but rather a post office with a broader scope. What such a post office delivers are things urgently needed by smaller communities across Canada: jobs and services.
Well-paying jobs with pensions return money to small communities during an employee's working years and after retirement. Indeed, the middle class is built upon such jobs. Services help to retain people within these small communities and to strengthen them, reducing out-migration and increasing livability. To attain these goals, Canada Post must be conceptualized in a different way than has been done recently—as a truly public service with the good of the people of Canada at the forefront.
The task force identified some options that it did not quantify, and some of these are worth investigating at length, beginning with Canada Post's governance.
It's a crown corporation, with a mandate to provide affordable, universal public postal service, but it's also a company saddled with a CEO from the private sector and 22 vice-presidents in a top-heavy structure that seeks to reduce the size and compensation of its workforce and service to the public. It's something like a Frankensteinian monster.
The postal service is de facto being run as if it were a for-profit private corporation, and jobs and service are being adversely affected. A radical restructuring of the upper management scheme of the corporation could result in millions of dollars of savings and a new approach to delivering services.
Conversely, labour costs are congruent with a public service that returns money to the Canadian economy and not to foreign ownership à la FedEx, DHL, etc. The supposed pension deficit is, however, a red herring that causes undue panic in uninformed members of the public. Mr. Wilson might be one example. This test is not an indicator of the plan's health, as the surplus in the plan's going-concern column is. The pension plan's long-term viability would be solidified by avoiding a large reduction in the labour force currently employed at CPC. Considering the delivery efficiencies found—there's more on that below—this means more employment at CPC in non-collection and non-delivery functions, such as postal banking.
In CPC's self-commissioned report, postal banking was seen as a win-win, but this same report was subsequently buried. Numerous other postal administrations are able to use successful postal banking businesses to cross-subsidize their delivery services and enable them to provide universal service.
Certainly it fills a social need, especially in the far north and in small communities either abandoned or never served by the big banks. Healthy competition in the banking sector would also result in reduced user fees for the Canadian public, and a postal bank would surely provide paper statements free of charge.
Postal banking ties in with the concept of Canada Post's becoming community hubs, as do other ideas, such as contracting in of streamlined delivery effected by electric or hybrid purpose-designed delivery vehicles optimized for Canadian conditions. Charging stations situated at post offices could serve these vehicles as well as those of the general public. A post office with longer operating hours and Saturday opening no longer needs the backup of a retail postal outlet and thus also sheds hours in preparation and depot transfers between offices. Efficiency is gained through centralization and having all functions under one roof.
For true delivery efficiency, the motorized mail courier concept should be embraced—that is, a motorized delivery agent should perform all the duties of local collection and delivery, including delivery of all parcels, courier items, letter mail, flyers, and street letter box collection. The delivery pattern would remain door to door for this type of service, which is preferred by the vast majority of the public.
Significant investment in the motorization of all delivery personnel would open new possibilities in service delivery. The report mentions the delivery of legalized marijuana. This would add to the pilot project by the LCBO to deliver alcohol to Ontario addresses, although not necessarily to dry reserves. This service could be adopted by other provinces and territories and could be rounded out by services such as last-mile delivery of other courier companies' product and on-demand pickups by delivery agents within a prescribed geographic area.
The embrace of increased job and service possibilities could become the hallmark of Canada Post in the digital age, where the physical delivery of services is still a profitable necessity.
Thank you for bearing with me.
I have to make what I suppose is a bit of an extraneous comment here: I applaud you.
As one who speaks a lot for a living—and many of us around this table are in the same position—sometimes when we have to speak before an organization and they tell us we have five minutes or 10 minutes to speak, we prepare a speech and we go over by two or three minutes. As an old toastmaster who comes come from the Toastmasters service club delivery program, I have to tell you that you were at four minutes and 59 seconds for delivery. That was an excellent job, sir.
In any event, we'll now go into the question-and-answer portion of the meeting.
We'll start with Madam Ratansi. You have seven minutes.
First of all, I would dispute that the financial sustainability of Canada Post is as in danger as management would have people believe. The projections are based on losses they say they're having.
If you look over the past decade, you will see that Canada Post has returned about a billion dollars to the government in taxes and dividends and whatnot. I don't think we're in as much danger of being unsustainable as is being put out there.
However, I think we could do a lot more in terms of what we deliver. I mentioned a couple of those things: legalized marijuana, alcohol. Not only that, there is the last-mile delivery of competitors' products, which we already do, but we could enter into all kinds of different agreements with those competitors because they do not deliver to rural areas.
The time always flies when you're having fun.
Thanks for joining us.
Mr. Pareis, I appreciate your comments. I accept that you're not going to be an expert and it's difficult to answer everything, so if you don't have an answer, please feel free to say so and we'll just move on.
About postal banking, I don't fully expect you're going to have the spreadsheet showing how you're going to make money. It looks as though you've read a lot from the CUPW report. Do you have thoughts on services provided? There's been talk about doing mortgages or doing this, this, and this; we know that's not really practical. Obviously, the idea is to make money. Have you given any thought to which services might be provided?
That was something we heard about from several organizations, the whole idea that billions could be made with postal banking, but hey, you can't make billions, not from that.
Most of those payday loan businesses are in clusters and are put there by banks, whereas most of the opportunity we might have for postal banking is in more rural areas. I don't think a lot of people are hit by predatory payday loan companies out in a strange rural area.
Do you see any other opportunities? Again, it's a huge process, so if you don't have it, I don't want to sit and badger you and ask you where the money is going to come from. There will be another opportunity for us to look at it further.
In your dealings with other people you work with, have you given thought to other items?
I understand there's a solvency issue with the pension. Canada Post is not going to end tomorrow, so we really don't have to worry about that $8 billion. One of the issues brought up, though, is that FedEx, UPS, and other companies have to follow certain rules, so it's unfair to these private industry people that Purolator doesn't have to operate the same way. If Purolator doesn't have to, why do we force private industry to do this?
I realize the current pension is in surplus, but this is so funny it's almost a Möbius strip. The current pension is in surplus only because Canada Post has put in about $2.5 billion in present value to the current pension because of this future liability. All of us need to get past this idea of the $8-billion insolvency, which is not really practical. That said, there really isn't a current surplus. A surplus exists because Canada Post has put in about $2.5 billion in present-value money for these obligations, so the current surplus doesn't really exist either. If you're not going to have one, you can't have the other.
I'll start by offering a view of the pension situation that's slightly different from Mr. McCauley's.
It may well be true that concerns about solvency evaluation motivated Canada Post to contribute money to the pension plan and create this surplus on a going-concern basis. Now that it's happened, though, the money is there, so there really is a surplus on a going-concern basis. I think it goes to your point, Mr. Pareis, that the corporation is actually in much better financial shape than its own management sometimes wants to let on.
I want to pick up on the issue of postal banking. I was struck by the fact, Mr. Parkes, that you said your community had lost its credit union and didn't want to lose its post office. Given that you still have the post office, is this idea of postal banking appealing to you? Would it be a good thing if residents in your community could access some basic banking services through their postal outlet?
It would definitely make a big difference.
It happens that since the credit union moved out, that's the ideal building to set it up in, so when are you going to start?
It's a great idea, because for seniors it's a place to do all their business rather than getting in a vehicle and coming to a larger community. They have to come to Dryden. Unfortunately, with the way that situation is, businesses and everybody else have to bring all their banking to the area.
I hear quite a bit of it from the seniors. We have a monthly meeting. Somebody always bends my ear about when something is going to change. It's pretty hard to say it's going to change. We always wish and we always hope. One of our big concerns also is whoever locked that school.... We have about 80 people in there now, and it's a drawing card for people to move into an area like ours because of the fishing, hunting, etc. We're getting a lot of traffic from Manitoba now, but they don't want to come there because there's no banking. If we ever lost the school, it would devastate our community.
However, I think postal banking would be a great idea if it could be worked out.
In my comments here I stated that my belief is that we should go with what used to be known as the MMC concept, way back when, in Canada Post—motorized mail courier. It motorizes the letter carrier. It combines the functions of people who used to deliver parcels and deliver mail bags, and also the letter carrier.
That carrier is responsible, with the vehicle, for all the oversized parcels, all the letter-carrier-sized parcels, all the courier items, all the letters, all the flyers, and also for clearing street letter boxes. We agreed it would have been very wise, way back when, if they'd renewed the fleet instead of investing in advanced sorting equipment for letters that weren't going to come anymore.
Canada Post really needs to look at a modern fleet. This would enable carriers to provide all those services and on-demand pickups. That is another item they should really get into, because the couriers do it. If every carrier was motorized, performed all these functions, and was centralized out of a single location, especially in small communities, then you'd have those efficiencies, you'd have those extra business lines. I think this is the kind of thing you're looking for. That carrier would also be able to perform door-to-door delivery by parking and looping.
Thank you very much, Mr. Chair.
Thank you both for coming. Mr. Weir and I tend to do the dance about what was or was not promised in last year's election, but as we each got elected here, obviously the people in our ridings understood what we were both saying.
I want to let you know that this is a legitimate exercise. We're not prejudging the outcome. We're here to listen not only to what the task force is proposing but also what Canadians are proposing. This might not necessarily include restoration of door-to-door delivery in the places that lost it. It doesn't necessarily include anything. We're here to listen honestly to Canadians and come home with recommendations.
When we look at the task force report, we do see that there is a legitimate financial concern. You cannot deny that letter mail volumes are dropping and that revenue from parcels is not high enough to counteract all of that. If you look at the work that management has done over the last few years, you see that their annual report says they achieved $350 million of annual savings through the transformations they've already undertaken. That is probably one of the reasons their bottom line has not been as bad as one would expect. They're trying to address the situation, but it's difficult.
Mr. Pareis, you've worked a long time in postal services. You worked in sorting and you worked in different aspects, and I'm wondering if you could shed some light on whether or not there's a way to get further savings out of efficiencies in the system as it exists, whether you feel that any of the changes have made the service worse, and whether, even if some costs have been saved, opportunities to grow revenue within the banking system have been removed. Could you speak to us a little bit about that from your experience?
Our final intervention today, gentlemen, will come from Mr. Ayoub. I believe he will be make his presentation en français
, so if you don't parle français
, you may want to use your translation devices.
Mr. Ayoub, you have five minutes.
Thank you, Mr. Chair.
I'm going to start with Mr. Pareis.
I would like to understand the change concerning parcels a little better.
Since 2013, Post Canada has wanted to focus more on parcel delivery. What is the current situation in Dryden, where Purolator and Canada Post offer parcel delivery services? Has there been an increase, or a decrease?
Gentlemen, I'll extend the same offer to you that I have to all of our other panellists. Should there be additional information that you wish to bring to the attention of this committee, please feel free to do so. You can direct your submissions to our clerk, and you can be assured that all of your suggestions and ideas will be ultimately incorporated into our final report.
I want to thank you both for being here. Both presentations were excellent. Mr. Parkes, you did great. Mr. Pareis, once again, thank you for being so succinct.
The meeting is adjourned.