I call the meeting to order.
Ladies and gentlemen and colleagues, I think we'll get going, even though it is a few minutes before 10. I'd like to get a bit of an early start if we can.
Welcome, everyone, to the 36th meeting of the Standing Committee on Government Operations and Estimates.
To our panellists, I'm sure you're all aware, gentlemen, that the minister responsible for Canada Post, the Honourable Judy Foote, has entered into a fairly extensive consultation process trying to examine the future of Canada Post. Phase one of that consultation process was to establish a task force whose mandate was to examine the financial viability and sustainability of Canada Post. They have completed their work and tabled their report. We've had a chance to examine that report and talk to the task force members.
The second phase, of course, is to go across Canada to communities both large and small, urban and rural, remote and first nations communities, to talk to individuals, organizations, and municipalities to get their views. They want to know what people believe the future of Canada Post should be and what it will hold, and offer suggestions to this committee as to how Canada Post perhaps can operate in the future to ensure its sustainability.
That's why you're all here today.
As I've explained, I'll be asking all panellists to give a brief five-minute opening statement that will be followed by questions and answers by our committee members.
To my colleagues on the committee, as a bit of an explanation, we have two representatives from the Canadian Union of Postal Workers, who will be making opening statements. That's a bit unusual, but the reason is that Mr. Keefe was originally scheduled to be at our 9 a.m. session. Unfortunately, the two other panellists had to cancel at the last minute, so I thought in the essence of fairness it would only be fair to have Mr. Keefe be allowed to give his opening statement as he would have had the other panellists shown up at 9 a.m.
We will start now, if I may, with Mr. Cavanagh, for five minutes or less.
Please, sir, the floor is yours.
We welcome this opportunity to provide input on the Canada Post review task force.
The Nova Scotia Federation of Labour represents over 70,000 workers in Nova Scotia, thousands of whom are members of the Canadian Union of Postal Workers. Our understanding is that this task force has been appointed to collect input and information and identify options for the future of Canada Post in order to help the federal government ensure that Canadians receive quality service from Canada Post.
We have participated in all reviews of Canada Post to date and we are very interested in the future of our public postal service. Overall, our focus is on getting home delivery back for everyone, keeping daily delivery, keeping public post offices, greening the post office, creating services that support seniors and people with disabilities, and bringing back postal banking for more inclusive, accessible financial services for everyone.
The Nova Scotia Federation of Labour has always argued for the preservation of home delivery and the creation of new and expanded services, including postal banking. We have also rigorously argued for a Canada Post that operates in the public interest. After all, while crown corporations like Canada Post have both public and commercial activities, they are distinct from commercial enterprises in that they are designed to serve the public interest, not simply maximize profit.
As for the financial status of Canada Post, the $44-million profit from the operations of the Canada Post segment for the first quarter of 2016 was the best first-quarter operating profit result since the first quarter of 2009. It also marked a historic turning point where, for the first time in the absence of a rate increase for transaction mail, the increase in revenues from parcels exceeded the decline in revenues from transaction mail.
In Nova Scotia, we have before us a huge opportunity: our post offices. It makes common sense that we will help build the economy, keep jobs here locally, and help with our carbon footprint. How can we reconfigure that service? Instead of cutting services, let's look at building services. What if our postal service, with its vast physical infrastructure and millions of daily human interactions, could offer us something completely different? What if the post office could play a central role in building our next economy, an economy that is more stable, more equal, and less polluting? What if Canada Post's vast delivery network could deliver the kinds of changes that Canadians really want, environmentally friendly options that support rural and indigenous communities and local businesses?
There are over 6,300 post offices across the country. We own this, and it can be much more than a mail and parcel delivery service; it can be a powerful national logistics network. Imagine small rural post offices providing everyday financial services, such as chequing and savings accounts, loans, and insurance—financial services owned by the people who use them. Banks have simply left many communities in Nova Scotia, and postal banking can change that.
Nova Scotians' economy could really benefit from more decent-paying jobs in our communities, especially rural ones. Why shouldn't we own this? Unlike major banks, which raked in $35 billion in profits last year while cutting jobs and raising already high fees for day-to-day services, we can do it differently, with the will of our federal government to make the right choice. Our community post offices are the country's largest retail and logistics network, and we own it. In fact, Canada Post offered banking services until 1968.
Renewable energy has a huge economic potential for Canada. When the signed the Paris climate agreement, we agreed to radically lower our country's emissions. As of now, we are not on track to meet those commitments. Energy retrofits and a clean power boom can create thousands of stable, well-paying jobs. We can help those who have lost work due to the oil bust and improve the quality of life for people across the country.
Postal services in other countries are prime examples. Norway replaced its diesel postal fleet with new electric vehicles. The United Kingdom, France, New Zealand, Brazil, and Italy all have successful postal banking services. Japan expanded postal worker services to provide assistance to elders, deliver food, and check in on those with limited mobility.
France and Australia use their postal fleets to deliver fresh and frozen food, connecting farmers and local businesses directly to customers.
Post office buildings can have charging stations for electrical vehicles at the post offices and, with a renewable, powered postal fleet, could connect our farms straight to our dinner tables.
On door-to-door delivery, on December 11, 2013, Canada Post Corporation announced a plan to eliminate home delivery in Canada as part of a plan to return to financial sustainability by 2019, which, as the Canadian Union of Postal Workers pointed out in their presentation, is an odd statement to make, given the corporation had reported profits of $94 million in the previous year, 2012.
We recommend that Canada Post end its plan to convert home delivery mail to community mailbox delivery and restore home mail delivery to people who have lost it since the cuts were announced in 2013. If we maintain daily door-to-door mail delivery, carriers can check in on seniors and people with mobility issues each day and deliver locally produced foods, and the other possibilities are endless.
Post offices can be community hubs for social innovation. The Canadian Union of Postal Workers and allies are hoping to transform this imperilled public service, which has nearly twice as many locations as Tim Hortons, into a powerful force creating a low-carbon society. As a community, we should get behind this move and support and expand its service.
Within this framework, moving forward Canada Post must stop its unjust and unacceptable practice of discriminating against rural and suburban mail carriers. There have been many serious problems, and a very significant one remains. For decades they have performed work that is almost identical to the work of letter carriers, but they have not received the same compensation or treatment because of the—
Good morning. My name is Michael Keefe, and I have been a postal worker since I first started as Christmas help in December 1983. I'm also the first vice-president of the Nova local of the Canadian Union of Postal Workers, which represents 600 members working from Hubbards to Lake Charlotte.
I appreciate being invited to address the committee today.
As you may know, two communities in this municipality, Bedford and Lower Sackville, on October 20, 2014, were among the first wave across Canada to lost their home mail delivery. They were followed by Dartmouth and non-peninsula Halifax, in the summer and fall of 2015 respectively.
How has this affected the municipality, our customers, and the local?
According to Canada Post numbers, 45,574 addresses lost home mail delivery across the Halifax regional municipality. The municipality has lost 78 well-paying full-time jobs. Assuming the annual base salary of a full-time letter carrier without any overtime or additional allowances, that translates into $4.12 million of income that has been taken out of this municipality.
In addition, the installation of community mailboxes, or CMBs, has added traffic congestion to many neighbourhoods. Due in large part to the placement choices of some of the CMBs, there were two accidents within the first two weeks of the October 20 implementation of centralized delivery. A postal vehicle parked in front of a community mailbox site at a bus stop was side-swiped by a passing motorist. A week later, a bus backed into a CMB site located too close to an intersection and caused severe damage.
Our customers now have to face the increased risk of having their mail, their parcels, and their identities stolen. Whether it's in Portland Estates in Dartmouth or Hammonds Plains in Lucasville, thieves have targeted community mailboxes and will continue to do so. By breaking into one community mailbox unit, thieves have the potential to steal the mail from 10 to 16 addresses, which is much safer and easier for them than going to 10 to 16 individual mailboxes at 10 to 16 separate homes.
Our customers also now have to contend with trying to get their mail from a community mailbox that has a frozen lock, or ice on the ground, or snowbanks blocking their access. Senior citizens, the differently abled, and others with mobility issues and physical impairment have a new-found roadblock to their independence, as they are now required to get their mail up to three kilometres away from their homes.
The options that Canada Post has given them are fairly lacklustre: they will give them extra keys for family and friends; they will forward their mail to a nearby post office, family, or friend; and if if they can get a doctor's note, Canada Post will consider having the mail delivered to their homes one day per week.
In our local, due to the loss of 78 letter carrier positions, the centralized letter carrier routes have at least doubled, on average, the daily points of call. In Halifax LCD 1, which has centralized or community mailbox delivery, the points of call average for a full-time route is 1,512, while in LCD 2, which still has home mail delivery, the points of call average for a full-time route is 870.
You have fewer letter carriers delivering to more points of call. The additional workload for letter carriers results in longer days and later finish times. Take that fact, in addition to all postal workers constantly being told there have to be cutbacks in staffing and contractual concessions because Canada Post is losing money—while we continue to be profitable and Deepak Chopra and his senior management team continue to receive generous salaries and bonuses—and you have one very demoralized workforce.
I know I'm nearly at the end of my time, but if you'll indulge me, I have just one more paragraph in order to finish addressing you.
I would urge you to demand that Canada Post give this committee the statistics on mail theft for the three years before October 20, 2014, and compare them with the three years since CMB delivery was implemented to give you a true picture of the security of the mail in community mailboxes. I would also strongly urge this committee to get the full non-redacted report into postal banking from Canada Post before you decide that it wouldn't be a good fit for Canada. Postal banking could be the answer to all of Canada Post's problems and allow us to continue to provide the service that so many Canadians depend on and want.
Thank you. I would be happy to answer any questions.
Thank you. Good morning.
On behalf of the Canadian Union of Postal Workers, I'm grateful for the opportunity to appear before the Standing Committee on Government Operations and Estimates.
My name is Jeff Callaghan. I'm currently the national director for Atlantic Canada of the Canadian Postal Workers, a position I've held since 2008. I've been employed with Canada Post since 1985.
Although our union's regional office is located here in Halifax, one of eight regional offices across the country, we represent over 3,100 members here in Atlantic Canada: workers, letter carriers, mail service couriers, postal clerks, dispatchers, technicians, rural and suburban carriers, and retail clerks. Our members work in a variety of locations, in hundreds of Atlantic communities, in large urban postal plants and small rural post offices.
During recent years as a national director, I've witnessed first-hand the number of initiatives undertaken by Canada Post which have had largely negative impacts on both the public's ability to access postal services in their communities and the very viability of the crown corporation itself. Despite public opposition, when informed, Canada Post has consistently plowed through with these initiatives without achieving any significant benefits whatsoever.
For instance, beginning in January of 2013—there's a document and hopefully you'll be able to follow—Canada Post began to change the manner in which it processed local mail in communities across Canada, including here in Atlantic Canada.
Previous to these changes, mail was sorted and delivered in the communities where the mail originated. Now mail is collected in those communities and placed on trucks and transported to mechanized facilities for processing and then returned to the original post office for delivery. In Atlantic Canada, this replaced St. John, New Brunswick; Halifax, Nova Scotia; and Saint John's, Newfoundland and Labrador. In 2008, Canada Post invested huge sums in new letter sorting machines, even though first class letter mail volumes had been in decline worldwide for several years.
For customers who rely on Canada Post for the safe delivery of their mail in an expeditious manner, mail which had previously been delivered the next business day is now taking upwards of four to 10 business days to be delivered, depending on weather and road conditions. Although Canada Post has stated it still meets on-time delivery standards, workers and customers alike realize it's simply not true. Customers soon began looking for alternatives.
For example, a letter mailed in Edmundston, New Brunswick, which is destined for an Edmundston address, is now collected at the end of the business day and transported over 400 kilometres to St. John, New Brunswick, for processing and then returned 400 kilometres for delivery. The 800-kilometre round trip adds days to the delivery time, does little to instill customer satisfaction, and increases the corporation's environmental footprint.
Sadly, this initiative has not been a one-off for Canada Post. During the same period of time, Canada Post has embarked on a concerted effort to remove hundreds of street letter boxes from communities across Atlantic Canada. Street letter boxes are red boxes located throughout communities for the public and a great many small and medium-sized businesses to deposit their mail. Without community red boxes to use, customers are left with few options but to travel to a post office to do their mailing, and for small and medium-sized businesses, they're forced to either pay for a pickup or make other costly alternate arrangements.
Canada Post has also made going to a commercial post office less convenient. Despite the moratorium on postal closures, Canada Post continues to close rural post offices and relocate some retail operations in larger urban centres, from convenient downtown business cores to less convenient and much less accessible business parks. Many members of the public, including seniors and disabled residents and downtown businesses, are no longer able to walk or travel to the post office to do their mailing. In communities such as Truro, Nova Scotia, and Corner Brook, Newfoundland and Labrador, the post office was relocated to a business park several kilometres from the downtown core. After the moves, Canada Post then used the excuse of declining revenues at the new post offices to further implement reduction of hours of operation to the public and proceeded to cut staff.
Despite the negative initiatives, and not to mention the quarter of a billion dollars reportedly spent by Canada Post to eliminate home mail delivery to almost a million Canadian households and small businesses, Canada Post continues to be a successful crown corporation. Again, Canada Post reported a $45-million profit in the first six months of 2016.
Atlantic Canadians expect more from their post office than cutbacks and reductions. Instead of making the service less accessible and less relevant to Canadians, our post office should be expanded to deliver more services, particularly in rural Canada.
Postal workers are extremely proud of the service we provide, but we need a government that is just as proud of this important public service and will do everything in its power to enhance, promote, and support our public postal service.
Implementing new and innovative services such as postal banking and community elder care and restoring unpopular and unnecessary cuts such as those made to urban and rural home mail delivery would ensure that Canada Post continues to be in a sound position to fulfill its obligation and commitment to all Canadians.
Thank you very much.
Thank you very much, Mr. Chair.
I'd like to thank you all for coming. Of course, this time last year, we were still hot and heavy in a campaign in which the future of Canada Post was an issue. I had a number of difficult conversations with mail carriers in my riding about the somewhat contentious nature of our position that we weren't necessarily going to restore home delivery. We were going to put a moratorium in place on the implementation of the community mailboxes, and then we were going to engage in a broad consultation to see what the future of Canada Post would look like.
Of course, this is what we have done. As part of this process, we've really learned that the Canada Post brand is quite strong. It's a real sense of identity for many Canadians, largely because Canada Post is one of the institutions that helped build our country, so everyone feels there should be a role in the continued growth and building of Canada within Canada Post.
Because we get to hear often from CUPW members, I want to focus my first few questions on Mr. Cavanagh. As a member of the public, but also knowing how your members feel about Canada Post.... When we look at the task force report and also at the Canada Post annual report, we see they refer to five types of delivery. They singled one out as being door to door, which is in the older urban communities—straight to the mailbox on the door—but they also have centralized points in condominiums and retirement and assisted-living residences, rural mailboxes at the end of laneways, group mailboxes, the community mailboxes, and post office boxes.
When you talk about door-to-door delivery, do you include any of those other categories as door-to-door delivery? When you think of door to door, do you think of apartment buildings or the end of driveways as being equivalent, or not?
Can I just stop you right there?
Banks offer mortgages. They offer personal lines of credit, home equity lines of credit, which require an underwriter to do all of that. That's why I'm asking. I'm trying to figure out what the training dollars involved are. The reason is that when ATB Financial, the Alberta Treasury Branches in Alberta, rolled out a new piece of software to update itself to be able to compete with the chartered banks, it cost them $355 million, and there were 76,000 hours of training for their staff of 5,000 employees at hundreds of main branches. It was well over 100% over budget when completed. It hurt the brand, the image of ATB, because it was such a poor rollout. Management suffered because of it.
When we look at past transcripts from this committee, persons who have come in told us 77% of Canadians would consider using banking services through Canada Post and 11% of businesses said they would use it, but it requires a lot of investment into Canada Post to get it started. Then we have to close the $700 million shortfall by 2026. We're talking about cheque and cash reconciliation, compliance, training, and licencing. We need to have controls for money-laundering operations that you can stop, on-site security, and SAP software. Then you also need call centres, online banking, and telephone banking components that are all working seamlessly together, because customers expect that seamless service wherever they are.
I'm just worried about this huge investment in resources that could maybe be better used in something else. The core business of Canada Post, what you're all really good at, is moving things around the country, so is this a wise investment, considering all of these new things that would need to be done? There are the training hours required to bring your members up to speed on what chartered banks and credit unions do.
Sorry, no, I don't, but my colleagues might be able to answer that question.
I want to add a bit to the conversation beforehand.
In Nova Scotia in particular, a lot of small rural communities have lost their banks. There is no bank there at all. What I believe we need to do is.... You have the report. It's been redacted to some extent. It talked about being a win-win.
I think what we really need to do is talk more about the human aspects of things. If it's a profitable business, let's figure out how we can kick doors open, not kick doors closed, and make things better for people in many of those rural communities.
I think it's a sad aspect when we just talk about the dollars and cents of it and we have arguments negative or positive. In most of the reports, the human side of things is virtually left out. In this province in particular, there are many communities that don't have any banking services whatsoever, and there are a lot of seniors in those communities.
Thank you, gentlemen, for joining us today. Since the beginning of our cross-country tour, we've seen how valuable and important it is to hear from people at every stop along the way. Of course, that applies to Halifax.
Mr. Cavanaugh, our examination of Canada Post has to take two different philosophies into account. On the one hand, we're dealing with a corporation that's trying to turn a profit. On the other hand, even though we support its profitability, if that doesn't happen, the organization could potentially be subsidized since it is a crown corporation.
The five-point plan addresses attrition and the elimination of home mail delivery. You aren't the only ones to tell us that Canada Post is still profitable. A number of local and national unions have told us the same thing. The elimination of home mail delivery resulted in job losses and cost savings. The price of stamps also went up.
Do you have any figures, documentation, or statistics to show that the corporation would have continued to be profitable had it not implemented the first phase of its five-point plan?
It would be worthwhile to see more figures on that. The independent task force appointed just prior to the summer put out a report, as did Ernst & Young.
Those studies estimate that Canada Post will incur net losses of $700 million by 2025-26. That brings us back to our initial dilemma. Do we subsidize a corporation providing what is considered a national service, or do we want the corporation to be profitable?
I have another question about the community mailboxes. Thirty percent of people still have home mail delivery, but no one else. Community mailboxes are located all over the country. Now we are hearing about mail being stolen. It's an important issue, one that really bothers me. Mail theft is something we've been hearing about in relation to newly installed community mailboxes, but was it ever a concern with the old community mailboxes? It's something I'd never heard of prior to the new mailboxes, and now we are hearing about it more. However, individual home mailboxes aren't locked either; anyone can access them. But, yes, it does take 78 home mailboxes to make up a single community mailbox.
To what extent was theft an issue before? Are you familiar with that?
I'll go on to some of the surveys we've been doing.
If we could have our choice, yes, all Canadians would like to have door-to-door delivery, but that's not the reality, and it won't be the reality. They're saying very clearly that they don't want to pay more for stamps and they don't want to pay higher taxes either. Canadians do not want to subsidize Canada Post.
Where do you see it going? Postal banking might be off the table. I'm not sure that's a feasible thing, especially when you look at the small communities where it might happen. There's not a lot of revenue that's going to generate a profit. What do you see, going forward, for Canada Post, when Canadians are saying no to higher taxes to subsidize them and no to higher stamp prices?
Thank you very much, gentlemen. We've reached the end of our time.
Before I give my very brief closing comments, though, I'd like to get something on the record. It speaks to a comment that Mr. Ayoub made earlier about Canada Post perhaps being considered an essential service as opposed to a business. It revolves around direct subsidies.
Here is my question to you. If all else fails—if the five-point plan doesn't work, if cutting costs is ineffective, and if other options of raising additional revenue to try to better position Canada Post in the future don't seem to be sufficient—would you or would you not agree that the government should directly subsidize Canada Post, much in the same manner it does with, say, the CBC?
Mr. Keefe, I'll start with you.
Gentlemen, I thank you all for being here today and I thank you for your presentations, particularly Mr. Keefe and Mr. Callaghan. We've heard from several of your colleagues in various parts of Canada, and I'm sure we'll hear more as we continue to go out west and on the rest of our tour this week.
One thing I can assure you is that every time we have CUPW representatives here, you bring a slightly different perspective to the table, so I appreciate that.
Mr. Cavanagh, I appreciate your being here.
Finally, gentlemen, if you have any additional information that you think would be of benefit to our committee as we continue our deliberations, please feel free to submit them directly to our clerk. We'll make sure that those are included in our deliberations and in our final report.
Thank you once again. We are suspended, and I would ask the next panellists to please come to the table as quickly as possible.
Ladies and gentlemen, and colleagues, I think we'll get started again if we can.
Good morning, ladies and gentlemen, and thank you for being here. I think I saw most of you, if not all of you, in the audience for the first session, so you probably know how things work around here. In the event you weren't, let me reiterate quickly.
We're asking each of you to please make a brief opening statement of five minutes or less. Since there are four panellists, I'm going to have to be strict on the five-minute time limit. If you care to look up during your presentation, I'll try to give you a one-minute advance warning, so you can start wrapping up if you're not quite finished.
Following that, we'll have interventions from all of our committee members, and at the end of that time, hopefully we'll have all of the information that you wish to transfer to our committee.
With that, we'll start immediately. On my list as our first panellist to speak is Mr. Brigley.
Mr. Brigley, you have five minutes.
I'm a member of ACORN Canada, and our main focus has been on the low- to moderate-income families in Canada.
We are very much supportive of postal banking, but one of the major points we want to focus on is how to compete with, if not get rid of, things like payday loans.
As people know, payday loans in Nova Scotia are $22 for every $100, which actually equals up to a 572% interest rate. We think that postal banking will be able to help low-income families by giving out loans at a low to moderate interest rate to those who need them for emergencies between pays, such as family emergencies, etc.
Right now, if you take a payday loan, you have two weeks to pay it off. That's it. We have records of people who have taken out up to 15 loans, mostly just trying to pay back the prior loan, because some people don't have paycheques and it doesn't line up with when they actually get money, so they have to take out loans just to keep it rolling, while being taxed at that interest rate.
Postal banking could modernize that and actually make a payment plan with low-income families to try to get them to pay it off in a set period of time, instead of slapping a two-week due date on it.
Right now, companies for payday loans are all focused on low-income areas. Sometimes you see two if not three buildings all clumped up together in one area. You don't see them in high society areas or anything like that. These loans are increasing poverty in low-income neighbourhoods and escalating problems such as crime and violence.
The idea of postal banking providing an alternative payday lending product is to provide people with low-cost options in times of crisis. It's true that credit unions are increasingly offering low costs on low-amount loans to their members. However, their reach is very low, which is why postal banking could help fill in these gaps.
A recent study by ACORN shows that people use payday loans because they are being denied credit at the banks. It is often because banks deny people overdraft protection, lines of credit, and credit cards, so people use payday loans. Furthermore, “Canada Post in the Digital Age” quotes the Canadian Bankers Association, “who have indicated that many users of payday loan lenders choose the service because of the relative anonymity it affords.”
First, people use payday loans because they are in need of basic necessities such as food, rent, and car repairs, or for family emergencies, etc. On the profitability of payday loans, Vancity, which is in B.C., offers a product at 20%, which is a much longer payback than what payday loans provide. This is the model we would suggest for postal banking. People need a low-interest, fair-terms, short-term loan product alternative that is available across the country, and this is something we believe postal banking could do.
That's pretty much how ACORN sees it for postal banking.
My name is Tom Kozloski. I'm a faculty member of the Sobey School of Business at St. Mary's. I've been on the board of Feed Nova Scotia for about four years and I've been chair for one. I'm here on behalf of Nick Jennery, our executive director, and his team, who work so hard to assist Nova Scotians who experience food insecurity. I'd like to thank you very much for the opportunity to offer our comments and suggestions.
To give you just a little bit of background, Feed Nova Scotia is not a food bank per se. We provide food and some other support to a network of 147 food banks, shelters, and meal programs all across the province. To give you some idea of scale, we deliver approximately two million kilograms of food per year to about 44,000 Nova Scotians who are registered with the various food banks and meal programs. One-third of these are children under the age of 18. The food that we deliver across the province has a value in excess of $10 million. We've noticed, especially in the recent fiscal year, a significant increase in demand for our services.
In addition to regular ongoing food support during the year, we have a Christmas program that provides Christmas meals and hampers to children and families across Nova Scotia who otherwise would not have a Christmas celebration. We don't receive any financial assistance from the government. We rely entirely on public support for our operating budget, which is about $3.5 million. That revenue comes from a variety of sources, including the reason I'm here today: direct mail campaigns.
We have a very heavy reliance on Canada Post. While there is an uptick in electronic forms of communication and digital and social media, there is still a very significant part of our business that relies on the conventional postal system. For instance, in our last three major appeals, we sent out about 120,000 individual mailings. They accounted for about $650,000 in revenue alone. That's not even counting the impact of getting our message out to people who might donate, for instance, in the future.
Most of our revenue comes via Canada Post through cheques, money orders, and bank drafts, and about 25% of our credit card donations come through there too, so fully two-thirds of our revenue comes to our organization through Canada Post. We go back and forth with our supporters and clients with highly personalized communications—income tax receipts, for example, and thank-you letters, and these are essential to our operations.
The move to the neighbourhood community mailboxes is a little bit of a cause of concern for us. As mentioned before, a large portion of our operating funds come through direct mail appeals in addition to the other sources, which are sponsorships, public events, corporate sponsorships, things like that. If community boxes result in a slower and lower response rate, which some have suggested they do, this would definitely harm us significantly and impact our ability to feed hungry Nova Scotians across the province.
As a registered charitable organization, we're required to provide official tax receipts. Electronic receipting is certainly an option, but it suffers from the same issues of whether or not electronic means are widespread and whether people have access to them. Many people do not have the ability to access the Internet on a regular or even irregular basis, so it's very important to have an efficient and effective Canada Post for all of those reasons that I just mentioned.
In summary, we understand that Canada Post faces very significant operational and financial challenges. We don't necessarily have solutions to those challenges. My purpose here today is to let you know how much we depend on Canada Post in order to run our operation and to provide services to needy, hungry people. We have no one to pass cost increases to. Again, we really need the services of an efficient and effective Canada Post.
We would encourage you to talk with our accrediting agency, Imagine Canada, and possibly make some accommodations for a pricing structure that will assist charities like ours in the delivery of services to needy Canadians across the country.
Thank you very much for the opportunity to offer our comments. We look forward to your questions.
First of all, thank you for the opportunity to speak to this committee.
Community Links is a provincial organization of senior and senior-serving organizations. We work to promote age-friendly communities across Nova Scotia. I'm here on behalf of the older population, both urban and rural, who are members of our association.
The termination of door-to-door delivery is in direct opposition to the need to maintain healthy, safe communities and to allow seniors to age in place. Indeed, aging in place is one of the favourite themes of all levels of government. One of the rationales behind the aging in place philosophy is that the longer people can live independently in their homes and communities, the less the financial and social burden will be in trying to increase nursing home beds and other levels of care.
In order for people to age in place, however, services must be available in both urban and rural communities. Home delivery of mail is just such a highly valued service. Mail delivery provides communication, access, and injury prevention to those facing mobility challenges.
Consider the unpredictable winter weather in Atlantic Canada and elsewhere, when flash freezing has left sidewalks, roads, and driveways thick with ice, rendering them impassable for many people with any mobility challenge. Add to this the significant number of seniors who no longer possess a driver's licence and community mailboxes that are situated in excess of two kilometres from a residence in some parts of rural Nova Scotia. This places an additional hardship on seniors trying to receive their mail.
I'm reminded of a recent story of an older adult in Mineville, Nova Scotia, who in spite of using a wheelchair has remained independent and is able to drive their adapted car. However, the lockbox—or community mailbox, in your terms—is located down a slope, which presents a challenge to the wheelchair user both in approaching the mailbox and returning to her car. You can imagine what this struggle would look like on an icy day in February.
The community mailbox sites pose added challenges for the older population, including staying safe in inclement weather and dealing with frozen locks and ice underfoot. There are also reports of community mailboxes being the target of vandalism, arson, and theft, translating to an increase in the number of victims should these mail stations become the norm.
The positive impact of letter carriers on senior and community safety stretches far beyond the winter months. Home delivery allows letter carriers to identify homes where mail is piling up, which may signal that the homeowner has been hurt or has become seriously ill.
Letter carriers have close and regular access to individual homes that allow them to act as the eyes and ears of a community. Should letter carrier services cease, the inconvenience or impossibility of walking to a community mailbox will inevitably result in many seniors depending on others to pick up and deliver their mail. Not only will this put seniors at greater risk of victimization—for example, through mail fraud and theft—but it will increase seniors' dependency and isolation.
I'd like to highlight two or three items reported in a discussion paper on Canada Post and the digital age. First of all, 92% of Canadians surveyed—and this is in the discussion paper—say that door-to-door delivery is essential for people with mobility and health problems, including some elderly. I would add that with our aging population, there are many older adults who are going to find it difficult to travel to community boxes.
Second, another statistic from the discussion paper suggests that reducing delivery to every other day was the most popular cost reduction strategy supported by Canadians. Nobody really now needs their mail to be delivered every day.
In the executive summary to the recent discussion paper, it is stated that while Canada Post operates as a commercial corporation, it differs from for profit-making private sector corporations in that its primary mandate is one of public service. We want to emphasize that: that this is an essential public service, and the profit motive should not be near the top of the list of reasons for making changes.
Thank you very much. My presentation will be within limits.
Good morning, and thank you for the invitation. It's nice to see a lot of people here going across Canada to get all the information.
The Federation of Senior Citizens and Pensioners of Nova Scotia represents seniors through clubs and councils in rural and urban areas of the province. The seniors in all of these communities do not want another lifeline moved or removed.
The concept in the health community is home care. The present concept being put forward by Canada Post Corporation does not appear to support the view of maintaining seniors in their homes as long as possible, given such additions as the community boxes.
We are not the generation that sits with a device in our hands sending vast quantities of information on what appears to be a continuous basis. We enjoy family, friends, reading, watching our favourite TV programs, visiting, going to church, volunteering, and getting our mail at the door.
A letter carrier is a friend who also has a good understanding of the senior population and has proven to be a good friend and a neighbour in times of need.
Retention of home delivery is the question. The answer could be yes, with no changes, but what will occur? Canada Post Corporation is a business, but it's the government that reviews the running of their arm's-length business. The present method of delivering mail works well, although a senior in Sydney who mails a birthday card to a friend down the street can't believe that it will go to Halifax and back before it's delivered.
Canada Post Corporation's plans to improve the system seem to speak of the time-honoured money-saved dimension and not of services lost. The financial picture of Canada Post Corporation in recent years has shown an improvement in the bottom line. In 2011 they lost a little bit of money, just about $330 million. In 2012 they did okay, with $77 million. In 2013 it went back down to $169 million. In 2014 it was back up, and in 2015 it was back up. In fact, in 2016, it's looking good too.
However, in 2011 a Supreme Court decision cost Canada Post $250 million for pay equity from 1983 to 2002. The impact of the lockout by Canada Post in 2011 was somewhere between $50 million and $70 million. There was also a one-time cost relating to pension benefits of $63 million during this period as a result of new improvements. When put together, this would be a more telling picture of the 2011 financial statement.
Urban and rural mail delivery is being rerouted to the numbers reflected in a financial projections and statements report developed at the request of Canada Post Corporation. I have had only a few projects on which I was completely in charge. One was buying my van and the other was making sure the architect drawing the plans for our retirement home 20 years ago followed the directions and code. I would suggest that Canada Post give some direction to those who would forward the report to reflect their guidelines.
A very interesting point is that the Canada Post management do not fully support the view of the corporation. Those who understand and manage the operation of the corporation have done a good job in maintaining the home delivery system and have suggested other improvements that are not being considered. The suggestion of alternate-day delivery of mail may be acceptable, but delivery of parcels on such a schedule would not be acceptable.
Mary Traversy, a senior vice-president, has publicly acknowledged that many businesses, particularly small and medium-size businesses, rely upon regular delivery. The current president stressed the importance of daily mail delivery for the cash flow of businesses.
The Federation of Senior Citizens and Pensioners of Nova Scotia, unlike many organizations, does not possess any staff to assist in developing a presentation, let alone one with lots of graphs. Our strength is talking with seniors. We were notified on September 21 of an invitation; on September 22, you said we had to confirm to attend. With such short notice, it would be impossible for others to meet such deadlines. Of course there is the Internet, which the majority of seniors do not possess or operate.
As a youngster—a while ago—home delivery was to our parents' home, and more than likely by a veteran. Now, as a senior and as a seniors' representative, daily home delivery is still regarded as a service to be enjoyed and continued.
Our 43rd annual convention will be held in 2017, and the topic of home delivery, no matter what happens, will be on the agenda.
Thank you, Mr. Chair, and thank you all for coming today. It's great to hear such a diversity of views among the seniors organizations, people representing low-income housing, and from charities who are users of the service.
As I said in my introductory remarks earlier today, which you might not have heard, during the election last year we made a commitment to put a moratorium on the implementation of community mailboxes and to hold nationwide consultations to learn from Canadians what they see as the future of their postal services. For the first part of that consultation, Minister Foote put out a task force that provided an interesting report examining the financial self-sustainability of Canada Post. The task force determined that CPC was not financially self-sustainable. There is some question as to the nature of the report, but that was their finding. We don't feel constrained by that and we're happy to hear your perspective so that we can entertain all possible views.
One of the interesting things, Mr. Kozloski, that you talked about was your use of Canada Post as the primary driver for the fundraising campaign for your organization. When you talk about door-to-door delivery, Canada Post refers to five different types of delivery models, and I would like to know what you consider to be door-to-door. Is it in urban areas when it's delivered right to the door, in apartment buildings where it's delivered to a common mail room with boxes, at the end of a driveway in a rural area, at the post office in a rural area, or in these community mailboxes? Is there more than one of those you consider to be door-to-door delivery?
Ms. Corbin, maybe one of the few elements of testimony that the union and the corporation have agreed upon is that they don't view alternate-day delivery as an appropriate model, because they've already determined, within the organizational structure and the operational infrastructure on how the mail is delivered, that they only want mail delivered to your home when you have mail, and slightly fewer than one-half the homes would actually receive mail on any given day. The ability to deliver every day is important for other lines of business, such as the direct-mail marketing campaigns, the charities, and parcel delivery. As users, they might only see alternate-day delivery as the end effect, but the ability to deliver every day is important. That's been some of our testimony.
Knowing that, would that change your view on whether you feel that alternate-day delivery is important, or do you feel that adding an extra day on to the cost of mail to save $74 million is an appropriate stance?
It's called downloading. As a senior, we're lucky we can stand up with the downloading that's coming towards us. When we talk about pensions, my pension doesn't go up, but everything else is going up. That's maybe the scheme of things, but I don't know about that.
If I'm planning on something, then Bernie pays for it. If you plan for something, you pay for it. If the government plans for something, they should pay for it and get it up. We all know it comes out of taxes. If you redesign the postal system and I have to go out there and wheel my wheelchair up there, you damn well better make it accessible to me so that I can get up there without any difficulty.
And make sure those locks work. I don't want to be up there with my arthritis trying to open a key and get it in there, only to find that I can't get it in there, or it's up too high. These are things that should have been thought of more in depth than they have been.
It's very, very annoying. That's a nice word. I'm a Cape Bretoner and I don't use too many nice words like that to describe the situation I see coming to the people that I represent across this province. It's disgraceful.
I'd like to start by thanking all of you for being with us today. It's wonderful to listen to you speak, since you clearly care about those you represent and your fellow community members. You have a job to do, but, much to your credit, you also volunteer many hours of your time. As a former city councillor and mayor, I fully understand the attachment you form with your fellow community members.
My first question has to do with consultation. I'd like you to confirm this, but my sense is that, a few years ago, you weren't at all consulted on the changes that were eventually made to Canada Post's services. If that is indeed the case and you weren't consulted, is this the first time you have been consulted since then, or have you taken part in other forms of consultation?
Perhaps Mr. Brigley could go first.
Thank you all for coming today.
I only have five minutes and I'm going to try to ask you to please keep your responses short. I have a bunch of questions I've been mulling over here.
I'll start by saying that I'm glad to hear that at least half of you and your organizations were able to participate in the previous Canada Post consultations and were informed on how their business processes were going.
Maybe what I'll start with mentioning is something that Ms. Ratansi mentioned before on postal banking. I'll start with Mr. Brigley.
Using the Indian example to capitalize the bank, it took half a billion dollars put in by the Government of India just to capitalize the bank. What we're trying to do here, or what we're supposed to look at, is the long-term sustainability of Canada Post, and we have a shortfall of $700 million by 2026. How will we resolve that? To capitalize the bank in order for it to be able to take deposits and make out loans, they need a float. How would we make that work, on top of all that I mentioned before to the previous intervenors who came here, with the problem of training, setting up the logistics, and setting up the software systems? We're trying to ensure long-term sustainability, but it sounds as though this would be a large investment into Canada Post that may not bear the return that we need.
I'm sorry to interrupt you, but I want to ask Mr. Kozloski a question.
Direct mail business is really tough to do. I used to sit on the board of the Kidney Foundation of Canada, southern Alberta chapter, so I get your business line, It's really hard to be in there. Obviously you're very price conscious, price sensitive, to any changes to stamp costs, and we're hearing from seniors' organizations that they want door-to-door delivery as well, so where can we find savings?
One thing I'm looking at here from previous transcripts is the potential for amending the moratorium. Right now there's a 20-year-old moratorium on the closure of franchising rural post offices. What used to be “rural”now includes places like Brampton, Saskatoon, and Halifax. Would that be a place, in keeping these corporate offices, to potentially franchise them? They would move to a Shoppers Drug Mart or a Sobeys. There would be some cost savings that could be achieved.
Would that be an acceptable solution? The service you receive is pretty much the same, but how Canada Post delivers it to you, to business, would be a little bit different. Would that be acceptable?