Colleagues, I call the meeting to order.
We may be missing one of our panellists, but thank you very much to the panellists who are here. I'll give a few words on how the process will work today.
As you probably know, the minister responsible for Canada Post, the , has initiated a fairly extensive consultation process in two phases. Phase one was the establishment of a task force whose mandate was to examine the financial sustainability and viability of Canada Post. Phase two was a cross-country consultation with Canadians, talking to individuals, organizations, municipalities, in communities both urban and rural, remote communities, first nations communities, asking them their views on the future of Canada Post and, more specifically, trying to get recommendations and suggestions on how Canada Post can improve not only their service but also their financial viability for the future.
That's why both of you are here today. We thank you for your appearance. The process we follow is fairly simple. We will ask each of you to make a very short opening statement, five minutes or less, followed by questions from all of our committee members. Your testimony will help us form part of the final report we will be submitting to Parliament later in November.
With that, we will start with Mr. Leong for five minutes, please.
Hi. My name is Nelson Leong. I'm the COO of Manitobah Mukluks. We are one of the fastest-growing companies in Canada. We've been in Profit 500 over the last couple of years.
We have a very good relationship with Canada Post. We have benefited from Canada Post by having them deliver a superior customer experience to our customers.
I would refer you to some of our recent customer feedback page responses. We get a lot of these responses from our customers. At least 20 give feedback every day. You can see one comment here, which starts off talking about our products: “My first impression of them is very positive.... I just wish you didn't ship through Purolator. It made it difficult to get my boots as compared to if you shipped through Canada Post.”
Our e-commerce business has grown significantly over the last four years. We have been very successful because we have been able to reach out and have our products delivered in the most rural areas where no one else would deliver—not Purolator, not FedEx, and not UPS.
Canada Post has provided us with commendable delivery execution to our customers. This includes 100% coverage of Canadian addresses; a range of delivery options for most budgets; convenient return solutions, no matter where our customer is located; and extensive delivery experience to markets within Canada. We are currently in negotiations with them to continue to serve our Canadian customers, both the indigenous and non-indigenous population.
Not having Canada Post deliver our services would have a huge impact. It would be detrimental to us as a company and to all of our customers who love our products and services.
My name is Maureen Lyons. I have been a toy seller on eBay in Winnipeg since 2012, with a store called McQueen and Mo Mater.
While currently I have 1,000 items available for sale, I consider myself to be a small-time seller on the small and medium-sized business spectrum. However, the income is necessary nonetheless. I'm a mother of four and my partner is self-employed, so every penny counts in our household. I would assume that this is the case for many small sellers on eBay. Regardless of our ages or circumstances, we are supplementing our modest incomes with eBay sales.
To date, my store has shipped about 1,500 orders through Canada Post. Postage is my largest single expense. By the end of this calendar year, I expect that amount to exceed about $20,000. Approximately 90% of postage for my customers is purchased through eBay's arrangement with PayPal shipping to gain a modest discount through their volume customer contract, while the remainder is spent on domestic Lettermail directly at my nearest authorized postal agent.
As I read through the discussion paper, “Canada Post in the Digital Age”, I noted with interest many of the issues that it detailed. I thank you for preparing that report and for allowing me to be here today to speak about my dependence on the healthy operation of our national postal system. Without Canada Post, I lose the ability to conduct business as an online seller.
Believe me, over this past summer, I tried to shake my dependence on Canada Post. Unlike many of my counterparts on eBay, I made a conscious decision not to close my store during the long period that there was uncertainty about the labour situation. I developed a contingency plan and I put it into operation. It was to offer local pickup for regional sales, courier service for domestic orders, and day trips south to utilize the USPS for international sales. Considering that a round trip to the United States to mail a parcel is, for me, a 232-kilometre journey, you must understand that this was a decision I did not lightly make.
Even so, half of my customers are Canadians, and they avoided, as did I, all shopping online during the summer. This has extended into fall. Normally by mid-October to late October my sales are brisk, and with the holiday season approaching, my business is still floundering.
Canadian small businesses need CPC and CUPW to develop a long-term arrangement that will provide consistent, reliable service to all Canadians. The disruption that labour strife caused extended beyond the strife itself. The other half of my customers are international, and nearly equally split between the U.S.A. and overseas. Those customers, for the most part, remained blissfully unaware of our labour strife, which brings me to a sore point: the cost of service by Tracked Packet.
No one believes it costs three times as much to mail something via Tracked Packet as it does by small packet air mail when both deliver at the same speed, generate the same bar codes, and are scanned and entered into CPC's system at the counter. If the issue is one of liability, please instead reduce or eliminate the amount of included insurance with Tracked Packet and leave it up to the individual sellers to purchase at additional cost. Having insurance included is not value added for most sellers, since it's not usually the tracked items that get lost en route to their destinations. We need delivery confirmation more than we need insurance, and we need it to be affordable.
When I asked other eBay sellers what question they wanted me to offer you today, they raised a hue and cry of more affordable tracking and more tracked options. It's difficult, if not impossible, for Canadian eBay sellers to be competitive against our American counterparts. The price of postage puts us at a steep disadvantage. That goes across the board, but is most glaring with the absence of a traced Lettermail category between regular domestic Lettermail and a full-fledged parcel.
We're asking for delivery confirmation for an extra dollar or two, if possible, on oversized Lettermail that still ships in an envelope under two centimetres thick. We can all see that parcels are the way of the future, e-commerce is the way of the future, tracked solutions are the way of the future. Buyers expect tracking, sellers expect tracking, and sales platforms require it for logistical metrics.
I can say with all confidence that all eBay sellers with whom I have discussed the issues facing Canada Post think the same thing: let us grow together and not apart.
Thank you very much, Mr. Chair.
Thank you both for coming. It's great to hear from the true customers of Canada Post, the people who are making their enterprise by sending packages through the service. It's the one area that's clearly growing and represents their primary future revenue source. Quality, logistics, and international rates are all areas where the committee has concerns about the way in which Canada Post might be able to improve its operations.
Ms. Lyons, can you describe for us a little more about your international sales—how Canada Post pricing makes you less competitive versus your U.S. online seller counterparts, how it might make you less competitive against Chinese counterparts—and ways you think the service could be improved?
I don't know, aside from reducing the cost associated with tracked options. I know there are a whole host of reasons why that's not easily done. It really would be beneficial if we could have a domestic, traced Lettermail option for Canadian sellers.
As far as I can see when I discuss this with my counterparts on eBay, the difficulty that Canadian sellers are facing is that when we can offer free shipping, it's really limited to Lettermail because all most of us can really afford to pad into our asking price is about two dollars. If we try to send something by Expedited Parcel, which is available to us through PayPal shipping at a discount, then we need to incorporate up to about $15, on average, into the asking price, just to be safe. If a Canadian buyer is looking at a similar item from an American seller, the international rate of getting it delivered across the border, providing they don't get assessed the import fees, is still similar. They feel that it's maybe not a good value to buy from a Canadian seller because the asking price is higher.
I don't want to assume that all my buyers aren't sophisticated enough to figure out that free shipping means that shipping is included in the price, but the truth of the matter is that not all buyers do realize that. They just think the Canadian sellers are asking too much. They consider the American purchase price to be a better deal, even though they have to pay more for shipping, potentially.
I'll go over it. The question is for Ms. Lyons as well.
The five points are: the conversion from door-to-door delivery to community mailboxes, a new approach to pricing, the set-up of franchise post offices—in pharmacies, for instance—streamlining operations, and addressing labour costs.
We have heard from a lot of witnesses on those various points. Some were in favour and some were opposed.
Could you tell me how you feel about those measures put forward by Canada Post?
If I may, I would like to speak about the community mailboxes first.
Leaving all sense of politics aside, personally I was relieved when the plan to transition completely to community mailboxes was abandoned, because I have a physical disability. For me to have to go to my community mailbox or to go as far as a postal counter to pick up my parcel is just not feasible.
Extrapolating from my own personal experience, I think many of my customers, who I can see are grandparents or parents with very young children, buy from me not because of my great prices or my shiny smiling face, but because it's too hard for them to get out to go search for exactly what they want, and that's a strength of my business. I sell toys that people need because kids want them for their birthdays or for special occasions. The harder it is for my customers to get what they need from me, the more I'm at a disadvantage.
For that reason—and I know that's not a feeling that many eBay sellers share because of their own personal circumstances, so that's sort of a touchy point—but for me personally, I was happy to see that stay as it is because I have door-to-door delivery and I would be very distressed if that were to be eliminated from my neighbourhood.
Again, I know that's not something that all eBay sellers agree on, because I would have to say that most eBay sellers, who live in areas where they don't have door-to-door access themselves, don't see it as necessary. They see it as something completely expendable because they don't use it themselves and they just see it as a giant expense, but for me, it's a big deal.
Regarding the second part, the postal counters, I can understand why rural areas would be very reluctant to see their post offices close because for them...I come from a small town—well, it's not that small and it's not that isolated or far from Winnipeg. It's Beausejour. The post office there is a necessary fixture of the community. If they were to lose it in favour of having a Canada Post outlet opened at one of the drugstores, I know their service probably wouldn't change for the most part, but their sense of community would suffer.
For my mailings, I use my closest postal counter. It's an authorized agent, and I find them to be friendly and relatively well informed, although there have been times when I've been a little frustrated. I tend to try to keep on top of what's happening with Canada Post and postal problems, so I do find it a little bit frustrating when I have to go to the counter and tell the people who work there what they should be telling me.
Did I see that in 2013? No.
I rely on what Canada Post tracking tells me about who is receiving their mail and where. I would have to say, according to tracking, that 90% of my Canadian customers get their parcels delivered to their door. There's a different final message on the tracking item line that shows when it's been delivered to a community mailbox. From that information, I have extrapolated that only 10% of my customers actually use a community mailbox.
I have been told by other eBay sellers that it's naive of me to believe that, because the drivers don't always enter the proper code when they're delivering something, so having that final line say it's been delivered to a mailbox is not necessarily the indicator that it was. This is coming from eBay sellers who are also consumers of Canada Post and who order online, who say they get all their mail delivered to a community mailbox, yet when their tracking shows it's delivered, it doesn't necessarily show it as having been delivered that way.
I have to say absolutely yes. Every aspect of Canada Post is something that I appreciate, both as a consumer and as an online seller. I wouldn't be able to do what I do or live the way that I do in Canada without access to its services.
Any time that I've had something that has caused me frustration with Canada Post, I've called, because I'm not the kind of person who will sit idly by and not let it bother me. A number of times when I felt that the issue was something that was beyond the capabilities of the very friendly people who answer the phone, I was sent on to a supervisor, who did take the time to talk through the problem with me, and I feel that after the fact it probably did have some impact in changing things slightly within the system.
The example I'll give you has to do with small packets.
In the brief period of time between Canada Post eliminating liability insurance on small packets and actually offering tracked packets, I think there were maybe four to six weeks where those two things did not overlap. As a seller, I had—surprise, surprise—a rash of “item not received” claims against me. I found that very frustrating, because it left me holding the bag. I couldn't complain to Canada Post about how my customers hadn't received their parcels, and it was left to me to refund the buyer when I had done everything that I needed to do to get the parcel into the hands of Canada Post for delivery.
Those were international orders, obviously, and I can understand how things become complicated there, because they're being handed off to an entirely different postal system after going through customs, but the supervisor I spoke to within Canada Post seemed to really understand my concern about that lapse in time between there being liability insurance offered and a tracking service offered. As a seller, I felt that by handing over my parcel to Canada Post, the employees, if there were less than honest ones along the way, would know that there was literally no way for anybody to track it if things went missing, because Canada Post, as a corporation, would no longer care. It wasn't responsible. I don't mean literally “would no longer care”, but the potential for that was there.
Credit goes to that supervisor, who actually took the time to talk me through it, because I was feeling pretty heated at that point.
As I say, it wasn't just one time that this happened. There was a spell of them within a short period of a couple of weeks.
Here is the issue. In terms of the corporation itself, if it has corporate stores, the people are very well trained. They're there for a long time. They know customer service. There's the example you gave about the supervisor.
We're not talking about franchised stores being turned into postal banking. In remote communities it's access to cash, the economic divide. The suggestion that has come before us is that those very remote communities with corporate offices, about 1,200 corporate offices, can be turned into rural hubs that you talked about, or can be used for a very unrefined banking type of thing, because people need access to cash. Those are the suggestions that have been made. What do you think about those suggestions if corporate stores, where people are knowledgeable, do those things?
Thank you, Mr. Chair, and thank you to our presenters for your presentations this morning.
I'm very interested in your discussions in regard to some of the remote and rural areas. Having driven six miles, 10 kilometres, to get my mail all my life, from a rural perspective, I'm interested in your comments about alternate-day delivery.
How would that impact your delivery of parcels? Would it impact or change your business purchases or those of the people who are purchasing your products?
Alternate days is one thing. I'll give you an example. As a politician, for 26 weeks of the year I'm in Ottawa. I leave on Sunday night. I get home on Friday night, usually, so I pick up my mail again on Saturday morning in my box in the area where I am. I get it once a week, basically. That's not everybody and you wouldn't want that, probably, for everyone, but what do you see as acceptable mechanisms, acceptable time frames, for delivery and pickup?
I have to concur with my counterpart. I offer same-day handling, which can be a little bit stressful at times because it means I have to get something delivered to my postal franchise office by no later than nine o'clock that night. I do strive to get it there by 5:00 p.m. so that it can make its way into the postal system that day and shave off an extra day from the delivery estimate.
For the items that I ship via Expedited Parcel, which would be 90% of my things, I think my customers would notice a delay if parcel delivery went to alternating days, because honestly one of the my strengths, again, as a Canadian eBay seller, with the toys that I offer and the selection that I offer and my target audience, is that I'm in Canada. I might not be less expensive, because I can't compete on price, but I can definitely get things to my customers faster than my American counterparts ever could dream of doing because their products have to cross a border.
For me, offering same day and then Expedited Parcel, if not Xpresspost, and having my customers able to get that merchandise within three or four days is really important. In the case of domestic Lettermail, something that goes into the mailbox, for me that would be something that ships in an oversize envelope, and I don't think that my customers would really care too much if it were alternating day delivery. I know as a consumer that wouldn't bother me too much. It's the parcels that are very time-sensitive. I know it's all paid merchandise, but if it comes by Lettermail, to me it's a different kind of mental expectation that goes into it.
Thank you. I certainly acknowledge that, and I think there is quite a difference between them.
Parcels don't come to me that way. I get a card and I have to go and pick them up, but 78% of Canadians are within two and a half kilometres of their postal outlet, so there is a big difference between the other 22% and that 78% in the distances they have to go.
The point is they have to go someplace to get it. If Canada Post chose to go to alternate delivery dates or every third day for letters, it probably wouldn't make that much difference to the folks. It does to businesses that still send out bills, but most bills are going by email now. On the parcel side, it certainly does make a difference, I agree. People want them as quickly as they can.
Would there be other competitive routes that you could choose besides Canada Post in those areas? If Canada Post chose to change their delivery, would you still be able to deliver your products in a timely fashion?
I would hate to have to switch to a courier service, because of the price, and also because of the lack of convenience. If you do happen to miss that parcel when it comes to your door, it's really not fun.
I said in my testimony that I didn't do any online shopping. There was one instance this summer when I had to get something for my friend's children. I had to place an order with a large corporate entity, and they shipped via Purolator. They processed it really quickly, and it travelled to Winnipeg really quickly, and once it got to Winnipeg it sat on a truck for three days. I missed the delivery when it finally came. I had to drive to their depot, which is not that far from here, but it's far from my house. Then I stood in line and I waited behind six or seven other people, who all had the same problem. When I gave the poor gentleman at the counter a hard time about why it had sat in Winnipeg for so long, he said it was because they couldn't keep up with the orders that had come flooding in.
I think it was Purolator. I don't know; maybe it was FedEx. It was one of them, but the orders had come flooding in since the labour disruption had hit the news, and people started to avoid Canada Post.
Thank you very much to the presenters this morning. I'm very intrigued by the insights you've given us into your businesses, and really the future of Canada Post, I think, both from a commercial customer point of view and from end-users, because you're able, through Canada Post, to ship to any area in Canada.
Mr. Leong, we heard a little from Ms. Winnicki Lyons about her experiences with tracking and so on. What about you and your customers? How does you company handle tracking the deliveries, and how important is that to your company? It's great if people get their packages within two or three days, but I would think as a company you want to know more than just if it might or might not happen.
To both of our witnesses, thank you very much for taking time out of your obviously very busy days to be here. You've helped us greatly with your testimonies.
I invite you to submit additional information if you feel it would be a benefit to our committee during our deliberations. If you wish to submit additional information, then you can contact our clerk directly. You can get Caroline's coordinates before you leave for the day. We will be filing a final report with Parliament, probably in the latter part of November. If you do have additional information that you think would benefit us, then I would ask you to do so within about the next 10 days or so.
Once again, thank you so much.
We will suspend for a couple of moments while our next panel comes to the table.
Thank you very much, and to our panellists, our witnesses, thank you for being here.
I believe that most of you, perhaps all of you, were in the room for the first session, so you know how the proceedings work here. We will ask each of you to give a brief opening statement of five minutes or less. Following that, we will engage in a series of questions and answers with all of the committee members.
With no further ado, we'll start. Mr. Bennett, I have you first on my list. You have five minutes, please.
Thank you for the time today.
I'm going to start with the decline in letter volumes. In recent years, Canada Post has been in the media telling Canadians that volumes are dropping. This is being done without full explanation, and it leaves customers believing that Canada Post's whole operation is in decline. CUPW cannot dispute that the letters or cards that individuals send to family and friends are on the decline, replaced by email. However, we can point out that all the other product lines are increasing.
Here in Winnipeg, parcel volumes rose by 30% in 2015, and they are projected to rise by 28% in 2016. There has also been an increase in small packets by 6% to 8% annually, as well as moderate increases in Admail and business mail.
That said, Canada Post evaluates its operation regularly and will conduct volume counts and restructures on individual depots within a city. Locally, the last three depot restructures have increased the number of letter carrier routes, which can only indicate that volumes are on the rise.
With regard to lost revenue, Canada Post continues to focus more on profits than on what its real goal is or should be: to continue providing mail delivery to all Canadians from coast to coast. Canada Post has an opportunity to increase profits by looking at its current operation and ensuring that large-volume mailers are paying their fair share. Some of Canada Post's largest customers are allowed to take their mail to another country, such as the Dominican Republic, place that country's postage on their product, and then return that product to Canada and send it through Canada Post. This is referred to as remailing, and it is a huge source of revenue loss for Canada Post.
Canada Post also discounts postage rates for businesses that are high-volume shippers. These businesses get a 40% to 50% reduced rate from what the rest of Canadians pay. Again, this reduces profits.
Canada Post has focused their business on the popularity of online shopping. A lot of this product comes from Asia, and because of the international postage regulations for third world countries, Canada Post receives little to no revenue for this product. Because of this, major plants across Canada stockpile this product for weeks until they have the resources to work it, causing delays in service.
Finally, the federal government is not charged for mail being sent out, nor are Canadians charged for sending mail to any branch of the federal government. Also, MPs are allowed to send out regular Admail for no cost, which letter carriers deliver at a cost to Canada Post of 2.3 cents per piece.
There are several new initiatives that Canada Post could add to their existing operation that would help it financially. It could supply letter carriers with books of stamps, envelopes, and small packets that could easily be sold at the door. It could have shipping specials for products that fit into a specific size requirement. It could have charging stations for electric vehicles. Door-to-door letter carriers could check in on seniors or people with mobility issues. It could deliver locally produced food. It could offer postal banking. These initiatives and others can be found in the document that I've provided you with today.
In conclusion, with an aging population, Canada Post needs to maintain its door-to-door service and reinstate door-to-door service to those areas already converted to community mailboxes. These community mailboxes have had serious problems with seniors slipping and falling, with thefts, with frozen locks, and with placement in dangerous low-light areas, to name a few.
With Canada Post continuing to be profitable, it has an opportunity to improve on its existing operation by adding services that will not only help financially but also allow them to branch out into new areas, increasing the number of customers using the post office.
Canadians rely on Canada Post to deliver on a daily basis and to maintain the service that customers expect. Businesses of all sizes rely on Canada Post to send their products and to receive payments and goods that keep their businesses going.
I want to make the committee aware of something that is referred to by Canada Post as network changes.
Specifically in western Canada, there are six major processing centres. In addition, of course, we have many smaller communities and mid-sized communities. Through the network changes that Canada Post has imposed since approximately 2008, we've seen a deterioration of service in the smaller centres because the practice has been, under the network changes, to ship mail to larger centres, even mail that is destined for that smaller centre.
For example, I know the committee was in Moose Jaw. In Moose Jaw, formerly if you mailed a letter or other items to people within the area of Moose Jaw, it would be sorted in Moose Jaw and most times it would be delivered the next day. Now Canada Post will ship it to Regina. Canada Post has taken that one step further, and now we seen them ship mail over weekends to be processed in places like Winnipeg, for example. Through the network changes, we end up with mail moving across. It makes it more machinable and saves a small amount of money, but it causes a considerable deterioration of service, especially for people and businesses in those mid-sized centres.
Members of the committee, thank you for providing American Income Life with the opportunity to comment on the future of Canada Post.
My name is Daryl Barnett. I am the director of Canadian labour relations for American Income Life Insurance Company.
As a Canadian, I personally recognize Canada Post as a valued service throughout all communities of Canada. Canada's post office was created in 1851, 16 years before Confederation, as documented by the Government of Canada's postal service historical overview. The Canadian postal service is part of our social fibre that binds us together as Canadians.
As background, American Income Life Insurance Company, better known as AIL in Canada, is currently licensed in Canada and the United States of America and is registered to carry on business in New Zealand. We currently have more than 7,000 representatives and employees internationally, which includes representatives in Canada. American Income Life, along with its New York subsidiary, National Income Life, services 10.8 million working families and has more than $50.4 billion of life insurance in force.
Our Canadian headquarters happen to be right here in Winnipeg, Manitoba, our public relations headquarters, and we have public relations and provincial general agent offices throughout Canada.
AIL contributes to the economy and community through the payment of taxes and services and by providing insurance to Canadian working families. We are a community-minded organization and are involved in many national, provincial, and local activities. As a company, we are able to provide career opportunities to local residents of Canada.
Since 2010 the Canada Post Corporation and its employees have processed over five million standard pieces of first class mail from AIL to our customers. The number does not include individual Priority post packages, non-standard and oversized packages, or other pieces of mail associated with AIL's business on a normal day.
In 1981, through legislation, Canada Post became a crown corporation and guaranteed basic services to Canadians. This universality is imperative to the type of work and product that we deliver to our Canadian customers. Canada Post and its employees provide a valuable service to AIL and our business plan in Canada.
We support initiatives to strengthen Canada Post and its service to Canadians. We do not support community mailboxes as an alternate delivery method. In our view, this method carries with it decreased security and an impediment to seniors, the poor, and disabled. Obviously, as discussed earlier, weather conditions create a large concern in terms of frozen locks and access to mail.
We continue to support door-to-door delivery as, in our view, this provides a convenient, safe, and universal method of mail delivery. Door-to-door delivery supports our business plan. As research indicates, door-to-door customers were less likely to throw away mail without reading it as compared to customers with a centralized type of delivery system.
At American Income Life Insurance we also support a strong workforce, and we believe we need to protect workers as well as the long-term economic interests of Canadian businesses. This, in our view, is accomplished by businesses supporting policies that create a robust middle class, spur economic growth, and create shared prosperity.
Employees of Canada Post covered by collective agreements provide a secure, well-trained workforce and have the ability to financially contribute to strong communities. The idea of replacing postal workers with retail workers at lower wages does not, in our view, contribute to a strong economy or a strong community.
That being said, we do not support any regression in negotiated benefits, terms, or conditions of postal workers. We support Canada Post as a viable business. Changing how Canada Post delivers mail should, in our view, include changing how Canada Post operates. We believe that the community could utilize Canada Post facilities differently. Rather than having Canada Post move to retailers, look at creating retail and other services through Canada Post.
I thank you very much for your time.
Indeed, I'm very interested in the input you have for us, Mr. Barnett, about the business side of being a commercial customer of Canada Post. We heard from the earlier panel about the nuts and bolts of delivery and tracking, and we heard earlier testimony this week about the importance of time-stamping on letter delivery, especially for big mailers. I would think in a business such as life insurance you have very time-sensitive mail that goes out to customers, like the renewal of life insurance policies, and you need to know that people have received those notices.
Can you talk to us about your relationship as a commercial customer of Canada Post? What are the experiences of your business and what could be improved?
Certainly there are collective agreements and they're subject to negotiations that come up. I think that this largely comes up, of course, because of what we saw this past summer. From the union's viewpoint, that was a self-inflicted wound by Canada Post. We were very clear, and we've been very clear for a number of years, that when we are in a labour dispute, we want to have a minimum impact in respect to the customers. We have taken extreme measures to ensure that.
If you look back a number of years ago to the last labour dispute that occurred in 2011, at that point we simply had rotating strikes, which slowed down the system but didn't stop it. For us, customer service and being able to keep that mail stream moving is paramount for the Canadian people. If you look back a number of years, that's been our history.
It hasn't been what it was, such as in 1981. That was 35 years ago. It was the last time we had a full-out postal strike. Always it's been rotating strikes, and usually it's only come to a point where there was no postal service as a result of either government intervention or Canada Post locking us out and shutting down the service.
As I said, the most recent one was a self-inflicted wound. We were very clear that we wanted to make sure the Canadian people continued to get mail even though there was a collective agreement being negotiated, and even though under the Canada Labour Code we had the right to strike.
I think I got the question right. I may have lost a bit of it there.
Essentially, in terms of the longevity of Canada Post, the union has promoted expanding Canada Post's services since the early 1980s. We've always seen that in order to have better services, you have to take avenues to make more profits. You have the largest retail network in the whole country. You have access to areas no one else does. Postal banking is just one of the examples. I'm sure this committee has heard numerous other examples of services that could be offered by Canada Post.
The only reason that has been given for not doing those services.... What we've mainly heard from Canada Post about postal banking, for instance—not to give the whole answer but to paraphrase—is that Canadians are already serviced well by the existing banks. That's not a reason, if you want to have services, not to get in and compete. As was raised earlier, Canada Post competes in numerous areas. When you have that retail network and you can be successful, we say as a union that it's fundamental to get into those areas and compete for it.
If businesses want to compete with Canada Post, which they do, that's fine. As an enterprise, in order to provide service—which is the obligation it has—Canada Post should also be able to go into areas where it can make profits and compete with those businesses. That should include banking and other services they may be willing to offer.
I think the big problem now is that there are two visions that are based on two different assumptions. Canada Post management claims that there will be a deficit in 10 years, and that the profitability and the very existence of the corporation are threatened. However, labour unions argue that the profitability and solvency are fine. Personally, I take a neutral position.
Assuming that Canada Post is right, and that a huge deficit builds up within 10 years, do you think it would be laudable and reasonable to ask workers to make efforts? Let’s not really talk about salary cuts, which nobody wants. Would your union be ready to accept a reduction in annual sick leave?
Actually, most Canadians don’t have access to those types of benefits. In your opinion, how much effort should workers put in on their own initiative to improve the situation at Canada Post?
I want to pick up a bit on Mr. Clarke's thesis that there really are two competing visions for Canada Post, and that's part of what this is about. On the one hand, you have a vision that says we're headed for deficit. I think we've heard that those numbers are highly questionable and unfortunately seem to be perpetuating themselves. That's one view, and that view limits itself to asking, “What do we have to lose from Canada Post in order to make it financially viable in the way that it already operates?”
The other vision is that Canada Post and the infrastructure it has is an opportunity to provide good service to Canadians. It's a valuable public asset, so how do we enhance it as an institution whose main purpose is to provide good and needed services to Canadians where they live? What are some of the mechanisms by which we can expand that mandate and also provide the revenue going forward, not just for the new services, but also so that if some of the older valuable services need to be subsidized by other activities of the corporation, there are ways to raise the revenue within the mandate of the organization?
I think it's clear what side of that issue CUPW is on. I wonder if you want to take some time to explain that vision a little better.
I'll start, and then Gord can probably add to it.
Yes, Canada Post has a big commitment here, and that's to deliver the mail right across this country, from coast to coast to coast, as I mentioned. Logistically, we now have that set up, and I don't believe that we're taking advantage of it. We have the opportunity to add postal banking into our operations. Where we see banks pulling out of small communities and northern communities, we have an opportunity, because there's a post office in the community, to move in and set up some sort of banking, whether it's just a small set-up or whatever Canada Post can arrange in an agreement to move into that operation.
There are also a lot of services that have been cut by Canada Post, such as the food to the north program and things like that. We should be using our existing operation to put those services back in and to even expand them.
Gord, I don't know if you....
Yes, for sure. I mean, you have the disadvantage of having the expense of delivering to remote areas, but you can take advantage of that and offer services in those remote areas. Be prepared to do tailor-made services. If you're dealing with a place such as Inuvik or Tuktoyaktuk, where other services aren't offered, you can tailor a post office to offer those services and make a profit from those services. That's going to offset the additional costs you incur as a result of having to deliver there. I think that point is exactly true, just like the example you gave. Canada Post can do that.
It's an interesting situation, because the union sits there and has been saying since primarily 2008—maybe somewhat before that, but really since 2008, which, incidentally, was the year of the last mandate review of Canada Post, as you're aware—that Canada Post can and will make profits. They have made profits, and they do, but Canada Post has always been saying that the sky is falling in, that they're losing money, and they've tried to basically take away services and to take benefits away from the workers. We say that's just the wrong direction for this company to go in.
What we should be doing is talking about every possible service, competing where necessary and offering services where they're not offered. In doing so, they can make tons of profits. It's almost impossible not to if you manage it properly and you operate it properly. In fact, they have, because we know that over the last 20 years there have been $2 billion in profits that have been turned over in dividends and taxes to the federal government. Personally, I think that should have gone more into expanding services for Canadians who paid for it, but the reality is, that's the amount money left at the end of the day once all the operating costs are paid.
Thank you very much, Mr. Chair.
Thank you all for coming. This has been a long series of meetings that we've had across the country. I just want to take the opportunity to discuss a little with the CUPW representatives about some of the things I've heard. I have a couple of questions. It's a bit of a surreal conversation, because I've had this conversation over many meetings over the course of three weeks. I'm always part of it, but it's always a different person on the other side.
I just want to let you know that we have heard a lot of what you've said. We are very concerned about protecting middle-class jobs. We have concerns that with the amount of money that workers earn in the postal system now, it's difficult for them to afford a middle-class lifestyle on those salaries. The benefits are still good, but they're not as good as they were. We recognize that it's posing a very difficult situation for postal workers and their families.
We've talked about a few things, and I've learned a lot. On the Universal Postal Union, my understanding is that the China situation will soon be resolved and that they will be affected by new rates in 2018, largely pushed by the Americans. I'm not sure how that affects international rates from other countries. Certainly the Dominican Republic, for instance, is not going to be considered a developed country.
My first question is for Mr. Bennett.
Would Canada Post and the union be okay with having the Government of Canada consider these lower rates for international mail received from developing countries being officially recognized as official development assistance, and then maybe the Government of Canada could pay some type of subsidy to Canada Post in recognition of the fact that the Government of Canada is really sponsoring and supporting the mail service of a developing country?
Now, that's a tough question. I've got to say that, because I've been a postal worker since 1981. When Canada Post became a crown corporation, there were two unions at that time, and each union was offered, at a different point, a position on the board of directors. This happened originally.
One union, CUPW, said absolutely no, while the LCUC said okay, and their president actually sat on the board of directors of Canada Post.
Now those two unions are together.
It's not a decision we've made as a union, and I, as a union officer—and I think Glenn as well—couldn't speak to that until we have a debate about it. I know that goes to the governorship of Canada Post, which is an issue this committee has. I have to tell you that we have not made that decision. We're a democratic organization. It takes a while to make decisions such as that.
Thanks to the witnesses for being here today and making your presentations.
I just want to go back to the question of my colleague, Mr. Clarke, for a moment in regard to the Ernst & Young studies and your views on those studies. Do you have any more to say regarding the financial position of Canada Post, both now and for the future?
It may involve some of the alternate operations that you were talking about. Would you like to expand on that as well and give just a bit of a vision of where you see it going?
Yes, certainly. I don't disagree that with the decline in Lettermail, profits can be an issue. Canada Post has to find ways, and I think there are two ways that they can increase their profits. We've talked a lot about that, whether it's getting into logistics or whether it's providing other services, such as postal banking. With the retail network they have, they should be looking at every possible opportunity they have to make money to ensure that they can be a viable service.
The other thing we would recommend that Canada Post has to do is make sure that they maintain the service. Where we've seen a decline in service, we think that also.... I think anyone with a business would tell you that when they stop giving the services, there is a general decline of the business over time. We're saying that you shouldn't be doing that. You should be expanding and you should be improving the ability of customers to get items immediately.
We're already seeing signs of that, as a result of the most recent negotiations and the tentative agreements looking at same-day parcel delivery, which I'm sure the committee has heard about, in major centres all across the country, so that you would actually get the evening delivery.
Certainly I could see how some of the presenters from the previous panel would appreciate that in their lines of business and the difficulties that they can encounter getting items to the customer.
I don't know if Glenn wants to follow up with anything.
That's a fundamental question of whether, when Canada Post is already providing a service, Canada Post should compete and maybe offer a service that's even elevated. Where a service isn't offered, especially if it's a profitable service outside of the core undertakings, I don't think there's any doubt that Canada Post should be offering that as a service to the Canadian people, and that makes sense. When you get to the competition, do you offer something that's already being offered?
I would say that if you're going to make Canada Post compete—and it does, except for universal service obligations for first class letter mail—then Canada Post competes with probably 35 carriers in the industry with parcels, packages, and express items. That range includes everything from UPS to Purolator, FedEx, Dynamex, Acme Courier Service, and a couple of hundred courier companies that you see in most major cities. If they're going to be competing in the parcel market, the package market, and the express market, then why don't they have the right, if there are profits available, to go in and compete in other markets where there is a service that's required, even though there is another party in it? I think that applies to postal banking as well, because we know there are banks.
Do you just offer it in remote areas, or do you offer it where you can make a profit? We would say they should offer it where they can make a profit. It has to be both ways. You can't be expected to provide a service and not make any profits from that service, or even lose money on that service, and then it's looked at, and the conclusion is that it's time to get rid of the service. Your competitors are taking money away from you, but you can't compete with them in the open marketplace.
Thank you all for being here, and we appreciate the service that Canada Post and its workers provide.
I need a clarification from you. You were talking about revenue bleeding, and one of the suggestions you made was that you provide free service to MPs. Canada Post receives $22 million from the government on that, which is equal to about $60,000 for the 338 employees, and I think you're well compensated for that.
There's one other area I'd like to capture. Mr. Barnett, you talked about how since 2010 you've been doing $5 million in business with Canada Post. Is that one of your substantial costs, or is it reasonable?
I'll come to postal banking in a minute, so I'll stop you because I have very little time.
In countries across the world where the post office has declining revenues, they have adopted postal banking in different forms, whether it's private or public partnership, etc.
Where would you like to start the pilot project for postal banking, and what other international experience options, other than postal banking, have you ever looked at? Some academics have told us there are tactics from across the globe that you can probably adopt.
I'll answer the first part and leave the second for Glenn.
In terms of postal banking, what I would like to express is that it is viable. It shows that it would probably, even in the task force report, have about a 30% market share right off the bat. That's in the task force response.
If they do pilot projects, as is common, I would like to see them done in a number of different areas, both rural and remote and maybe inner city, and identify a number of places to do pilot projects. I would encourage that they be offices staffed by Canada Post with CUPW members, not the franchises that people earlier have talked about. That would give the most control and would be the best way to assess how profitable they would be and what services they could offer.
To all of our panels, thank you once again.
Just for the information of Mr. Fisher and Mr. Bennett, our committee has been seized with the contradictory arguments that we've been hearing on the financial viability of Canada Post. Your organization, your union, has stated, I think quite correctly, if you take a look at the audited statements, that Canada Post has made a profit in 19 out of the last 20 years, or something like that. The task force and the Conference Board of Canada have been projecting a deficit in 2026.
We will be bringing Ernst & Young to our committee to further examine that, because I think it really comes down to what assumptions we're given to begin with. We need to clarify, in the committee's mind, as to whether or not there is a serious potential deficit facing Canada Post or whether, on a go-forward basis, it's maintaining its profitability. We will be examining that further. I just wanted to give you those assurances.
Furthermore, should you have any additional information that you wish to provide to our committee that you believe may be beneficial to us in our deliberations, please do so. You can direct that to our clerk. We would ask that if you're going to provide any additional information, you try to do so within 10 days or so, because we will be starting to formulate our report to Parliament shortly thereafter.
Once again, thank you all for being here. We appreciate your testimony.
We will suspend for a few moments until our next witnesses approach the table.
I think we'll commence now.
My thanks to our panellists for being here.
I'm not sure if some or all of you have been in the room for previous presentations. I suspect one or two of you may have just arrived, so I'll briefly go over how the proceedings work.
We will ask each of you to make a brief opening statement. We've found in our experience that the majority of information that's transferred to us comes through the question-and-answer process. Following your opening statements, there will be opportunities for each committee member to ask you questions and hopefully elicit some good testimony from all of you, which will help us in our deliberations as we move forward.
I will now open up for a brief presentation by Mr. Sauer.
Thank you very much for pronouncing my name correctly. I appreciate that.
My name is Dave Sauer. I'm the president of the Winnipeg Labour Council. We're a union federation, a small council. We represent about 45,000 workers here in the City of Winnipeg, from 65 affiliated union locals. We've been around since 1894. We have a very long history in this city. A lot of our movement and our membership stems out of the history of North End, Winnipeg. It's a very historical area of Winnipeg. We had a general strike in 1919, and the bulk of the participants in that strike were residents of Winnipeg's North End. It's historically an immigrant community, and now it is largely an indigenous population that occupies the North End.
One of the reasons we have formed, I guess, if you go back to our history in 1894, has to do with alleviating poverty. One of the biggest things that we've always said is that if you want to alleviate poverty in Canada, you need to get a union card in everyone's pocket, because, on average, everybody makes about $5 an hour more. There needs to be a method, however, for having that money stay in their pockets.
In light of that, we are here to speak forcefully, at least as best we can, about convincing people and members of the committee that Canada Post should get into postal banking.
We have a very large poverty issue here in Winnipeg. We find that in the North End especially there is an extensive amount of poverty coming out of the idea that people don't have a proper way to bank. They have to pay 600% interest to payday lenders—predatory lenders, as I like to call them—pawn shops, and so forth. We want Canada Post to get involved in postal banking because we think this can help alleviate poverty in the North End by putting more money in people's pockets.
There are a lot of different examples we can cite from across the globe. In New Zealand, they have the Kiwibank, which generated 81% profits for New Zealand Post, after tax. PostFinance in Switzerland accounts for 48% of Swiss Post's operating profits. In Italy, BancoPosta profits allowed the Italian post office to make 55 million euros in profits, or $86.1 million Canadian. In spite of the losses incurred by its postal business, in France, La Banque Postale had operating profits of 842 million euros. I won't go into that conversion. It's a little complicated, but it seems like it works.
In a country like Canada, where we have more and more banks exiting a lot of areas of the country where they don't find enough profitability, this is where the payday lenders come in. We think Canada Post can play a pivotal role in this country in helping to keep predatory lenders at bay.
There are over 6,000 postal outlets in Canada. If you take a look at those numbers, we have some options here on the table. It can be a dynamic shift in Canada Post's operations. It's something they already did. We had the Canada Post Savings Bank, which unfortunately stopped operations in 1969. It's something we already have experience with. We can enhance it. We can make sure that we don't have to deal with these predatory lenders any longer.
I keep harping on that over and over again because it's something we're very familiar with at the Labour Council. We work very closely with the United Way of Winnipeg, which does a lot of inner city work here. It's unfortunate that you see this happening, that we don't have any kind of system in place to make sure people have a better option than dealing with big banks that don't live or work in their area.
For us, it's all about alleviating poverty. I want to hammer that message home over and over as much as I possibly can to everybody here. Postal banking works in other countries.
There are some options we could do. I heard some of the previous presenters talking about where they'd like to run a few test cases. I have three really good options. As diverse as Canada is, you could do an urban setting, a rural setting, and a northern setting. These are three very good test markets.
In closing, I want to emphasize that postal banking is the future of Canada Post.
I'm Kevin Rebeck, and on behalf of the Manitoba Federation of Labour, Manitoba's central labour body representing over 100,000 unionized workers here in Manitoba, I'm pleased to offer the following remarks to the House of Commons Standing Committee on Government Operations and Estimates in relation to the study on Canada Post.
Protecting the future of our public postal service is vitally important to the way of life of everyday Canadians, for the maintenance of good jobs in our communities, and for a prosperous economy. We urge your committee to listen to public stakeholder feedback, to assess opportunities and challenges, and to make your recommendations with the clear goal of sustaining and expanding our valued national postal service.
Canada Post has generated profit in 19 of the last 21 years. The Harper government's approach of raising fees and cutting services has not served Canadians well, especially the disastrous effort to eliminate home delivery, which has been particularly challenging for seniors and Canadians with mobility challenges. There are many opportunities for Canada Post to innovate, diversify, and grow. We submit it's imperative that home delivery be restored to those who have lost it. It's imperative for fairness, for reliability, for convenience, and for safety. Quite simply, it's the right thing to do, the Canadian thing to do.
Moreover, it's critical that full daily service be maintained for all Canadians. Many families and businesses rely on daily delivery of time-sensitive materials coupled with Canada Post's top-of-the-line service guarantees to carry on their activities and support growing businesses. The Canadian Union of Postal Workers has advanced a series of innovative ideas to green our post offices, and we urge you to consider them. As our national post office is the largest retail chain and logistics company in the country, greening efforts could have huge impacts on climate change and the environment more broadly.
Finally, we're pleased to add our voice to the many calling for the establishment of postal banking, a unique opportunity for Canada to take advantage of the pre-existing nationwide Canada Post infrastructure that's present in so many communities across the country and to enhance the provision of needed financial services, which are currently lacking for far too many Canadians.
We recognize that Canadians are generally sending fewer letters through the mail, but rather than continuing with the tried and failed approach of hiking prices and slashing services that Canadians depend on, we believe Canada Post should work to take advantage of its nationwide presence, including its giant retail network, to expand its services to generate alternative sources of revenue.
Bank branches have been closed in many communities across the country, including many inner-city neighbourhoods in rural and northern communities. Despite Canada's population increasing, the number of bank branches has been declining for more than two decades. A study by Canada Post expert John Anderson has estimated that in some 45% of the 3,326 communities in small-town and rural Canada that have a post office, there is no bank or credit union branch. Bank and credit union branches are especially sparse in first nations communities, but many have existing post office branches. In communities that are chronically underserved by banks, there's a great opportunity and need to establish postal banking to offer affordable and reliable alternative products to predatory, high-cost payday loans.
Establishing a nationwide system of postal banking would make use of the labour and hard infrastructure of more than 6,000 outlets across the country and help fill the need for reliable and affordable financial services.
Postal banking has a proven track record of profitability and good service in countries all over the world from Switzerland to India to Brazil.
Profits from such services as savings and chequing accounts, ATMs, lines of credit, mortgages, and money transfers could all be reinvested in our communities.
Relatedly, there may be opportunities to expand document services beyond passport applications to include identity cards, which when lacking provide additional hurdles to accessing needed financial services.
Thanks for considering our input.
Members of the government operations and estimates committee, I thank you for the opportunity for allowing me to speak today.
My name is Carlos Sosa. I am the former co-chair and current provincial council member of the Manitoba League of Persons with Disabilities. MLPD welcomes the opportunity to speak to this critical public policy issue, which has an impact on persons with disabilities.
The Manitoba League of Persons with Disabilities is the province's cross-disability advocacy voice and has existed since 1974. We are also a member group of the Council of Canadians with Disabilities, for which I serve as the second vice-chair.
In December of 2013, when the original decision was announced to eliminate door-to-door mail delivery and to introduce community mailboxes, the MLPD had very serious concerns over accessibility due to adverse weather conditions in the winter months for persons with disabilities and seniors. We also had concerns over issues of independence, vulnerability, and the potential privatization of the postal service.
One of the suggestions coming out of the 2013 decision was that people affected by this change could simply use the Internet for their daily needs. Unfortunately, this is not the case for persons with disabilities, as a significant proportion of our community lives in poverty and is unable to afford to buy a computer or even to afford access to the Internet.
Persons living in poverty, which includes persons with disabilities, often rely on public services for their day-to-day survival, including access to the postal service. Persons with disabilities rely on the postal service to receive their bills, personal letters, medical information, and monthly benefit cheques. The letter carrier serves as the unofficial eyes and ears to the outside world for some members of our community who lack connection to the supports in the broader community.
A trek to the community mailbox has a lot of barriers, especially for those with physical disabilities. One of the barriers is snow clearing, especially during the cold winter months here in Winnipeg. In winter, snow clearing can be inadequate, and in some cases those who use wheelchairs have to use the street to get around.
When I brought this issue up in front of Susan Margles, I asked her specifically to clarify Canada Post's policy in terms of the inches and centimetres that the corporation is responsible to clear when snow collects around the mailbox. Her response to me was that Canada Post is simply responsible for clearing snow around the box. This is simply not clear enough. In my interpretation, that could mean a very small path would be adequate, when wheelchairs take a lot more room than a very small path to get to the box.
One of the ways in which Canada Post could bring in new revenues is by the introduction of postal banking. Postal banking could provide critical services to underserved and marginalized communities, and the area in which I live could be one of them. I have seen the effects of bank closures in my area, so we would definitely benefit from postal banking there.
Another service Canada Post could provide is transporting food to northern and rural communities at a reasonable price in comparison to the Northern stores, which sell food at outrageous prices in many northern communities. In many northern and rural communities, persons with disabilities are unable to afford the expensive trip to go to an urban centre to buy groceries, so this would be a very welcome move.
A move toward privatization would have a detrimental impact on persons with disabilities, especially since a significant portion of our community lives disproportionately in poverty and relies on accessible good-quality public services for their day-to-day survival.
Thank you for the opportunity to appear today. I'm here as a social scientist with expertise on the public sector.
I put my name forward as a witness because I believe the discussion paper of the task force for the Canada Post Corporation review is fundamentally flawed. Parliament and residents of Canada more broadly are ill served by this discussion paper. The task force missed the opportunity to offer an innovative strategic vision for Canada Post that takes advantage of its existing unique strengths as a crown corporation to orient it for a future in which it would respond creatively to trends in postal service use and make a meaningful contribution to society's necessary transition from relying on fossil fuels to generating energy in ways that do not make the climate change crisis worse.
The Delivering Community Power plan, developed by a number of organizations, offers such a vision. Unfortunately, the task force did not treat its proposals with the seriousness they deserve. Instead, it produced a report that is blatantly slanted in favour of an all-too-predictable approach for Canada Post, one that would see it increasingly operate like a conventional private firm in a way that would facilitate at least its partial privatization in the future.
It appears to me that the reason for this is the composition of the task force. None of its members have expertise in fields relevant to the future of the public sector in an era of worsening climate change. Three of its four members are business figures. As a result, the report is a missed opportunity, and it should not serve as the basis for changes to Canada Post.
I'd like to focus on specifically three of the many specific ways in which the discussion paper is flawed.
First, as part of its rejection of the reintroduction of postal banking, it makes the claim that “most Canadians now prefer to bank online”. What is its support for this claim? It cites “research conducted by Yahoo Canada”, which claims that 68% of Canadians now bank online on a weekly basis. Checking the source cited in the relevant footnote, one finds an infographic reporting on a so-called consumer finance study conducted by Yahoo. It appears that the study was done by surveying the readers of Yahoo Finance.
As social science, this is laughable. In fact, if one of my students handed in something like this, I would fail them. The readers of Yahoo Finance are in no way representative of the population of Canada. The source cited does not in fact provide reliable information about what proportion of Canadians bank online, and it certainly does not tell us what proportion prefer to bank online. Some people may bank online not because they prefer to do so but because they are obliged to, either because they don't have time to get to a branch of their financial institution or because there's no branch near them. This looks to me like using so-called research to bolster a preconception—namely, that postal banking should be rejected.
More broadly, the report's discussion of postal banking reads like a brief from the bank lobby, not an objective assessment of postal banking as an option. The report makes no reference to Canada Post's internal report entitled “Banking: A Proven Diversification Strategy”. Although Canada Post's research on postal banking was stopped under the previous Conservative government and the public was denied access to most of this multi-year study, which was released following an access to information request in a mostly redacted form, we do know that the study states that postal banking would be a “win-win” money-maker. We have to ask why the study, whose existence was made known in 2014, was not consulted.
Third and finally, the report favours the creation of a new regulatory body for Canada Post—or, in its words, the addition of postal regulatory bodies “to an existing regulator”—with a wide range of powers. The tasks suggested for such a body, including changing the universal service obligation and updating the rural moratorium, make it clear that it would be an instrument for changing Canada Post in ways that reduce service to the public and make Canada Post operate even more like a private firm.
The balance between the public interest and competitive market forces, clearly implied by the report, would be tilted heavily in favour of the latter at the expense of services to residents of Canada and the workers who deliver those services. In other words, the proposed regulatory body would be a Trojan Horse for the agenda of remaking Canada Post in a way that would benefit private firms that operate or would like to operate in its sector.
Empowering a regulatory body to make major changes would reduce parliamentary oversight of Canada Post, further weakening the influence of the public interest in how Canada Post operates. The report proposes allowing the regulatory body to amend the Canadian Postal Service Charter instead of requiring the government to do so. This would allow the government to avoid responsibility and accountability for changes to the public postal service. Although that might be convenient for the federal government of the day, it would be anti-democratic to do so.
For these reasons, I believe the task force's proposal for a new regulatory body for Canada Post should be rejected.
Thank you very much, Chair.
Thank you all for being here this morning. We've had a wide range of testimony here this morning in Winnipeg, and it's much appreciated.
I'd like to ask each of you a question concerning the mandate of Canada Post to get some clarification on your views. We know that Canada Post has a universal service obligation for letter mail and not necessarily for parcel, although that is the part of the business that is growing substantially.
My question to each of you is this: do you see Canada Post as a public service first, or a business first?
Another point I've heard from the business sector, commercial customers, and municipalities and users—people who are receiving—is that not one size fits all. When it comes to the issue of door-to-door delivery, community mailboxes, or picking up at a postal counter, it's different strokes for different folks, it seems.
The theme that seems to come out is communication of how delivery is going to be done or changed, and consultation.
Could I have your remarks on that, Mr. Rebeck. What has your experience been?
Thank you very much, Professor.
My question is now open to everyone. Any of you can answer.
If we opt for banking services, Canada Post’s 50,000 employees will have to be trained, so that they can provide that type of service. That surely would cost astronomical amounts. Who do you think should pay for the training of those 50,000 employees?
A very significant amount of money, perhaps around $500 million, would also have to be invested to set up the service. Two weeks ago, one of my colleagues mentioned that figure. In your opinion, where should the money come from to launch the banking service?
We can perhaps start with Mr. Rebeck.
I would have to believe that we're not going to be dumping that many employees.
We're not going to be hiring that many right off the bat, right? There have to be some test case scenarios that we would want to look at first, so I think a gradual approach escalating into that would be probably the most prudent. Then, as was stated by the previous speaker, brother Rebeck, eventually it would pay for itself.
I think you have to start small. I don't think we would want to get out and do it right away. We'd have to do a little bit of investigation first and find out where it would actually work, and then gradually build up to that.
The Delivering Community Power plan that's been developed by a number of organizations and endorsed by people including David Suzuki does look at the question of how Canada Post could assist in a broader process of change that would be necessary to move towards a renewable economy. I think the whole idea of using that as a model is to have a public sector leadership role, for example, by converting the vehicle fleet to low-carbon-emission vehicles and by providing electric charging stations at Canada Post locations in order to promote the diversification of the transportation system.
I think these ideas are quite visionary. It's not that Canada Post can do it all by itself, but it can play kind of a leadership role in that respect.
There is also the idea of being able to expand delivery services through Canada Post. When you actually look at the way it works out, greenhouse gas emissions are lower when they're delivered through this kind of integrated network rather than through other options. There is actually less carbon emission to carry out deliveries that way, and you could expand the range of deliveries that would be available.
The idea of having food delivery from local farmers to local residents through the system that Canada Post has is one that's been floated there. Then, of course, you could consider further expanding other services that would be perhaps a bit more tangential, but would bring in revenue to Canada Post, allowing it to do more. An example referred to earlier that exists in some countries and is just being rolled out now in France is having letter carriers look in on the aged or people with disabilities.
There's a range of creative revenue-generating ideas that could be tried out for a diversification of Canada Post services, and those things are compatible with the overall vision in the Delivering Community Power plan.
Thank you very much, Mr. Chair.
Thank you all for coming.
I have to apologize to the people from the labour group and to the Manitoba League of Persons with Disabilities. We've heard from so many of your representatives across the country, but we haven't had many academics come, so that's where I'm going to focus, and maybe my colleague will get back to your groups.
I had to agree with a lot of what you said when I read the task force report for the first time. I had the sense that rather than it being a discussion paper, it felt a little bit like a sales pitch. I'll point to one thing in the report that stuck out to me, and that was around the notion of expenditure. It was focused on how much everything cost, rather than how much revenue was earned in different ways.
They broke down the cost associated with different types of delivery, saying that door-to-door costs $272 per such and such, and they didn't really focus on the different ways that revenue could be generated.
From an academic perspective on these types of discussion papers, what's your sense of the way they should have avoided a one-sided narrative, and maybe what an alternate narrative might have been had they focused on revenue instead of cost?
An alternate narrative would have maybe started with a different understanding of what they're dealing with as an organization. Of course, it's a crown corporation and that's not the same as a government department, but it is a public sector organization, which has a different social role from a purely private firm. To see that there's a social value, which is not always easily quantifiable in a public sector asset like that, would provide a kind of different dimension to the analysis.
Of course you have to deal with the statistical side of the operation, which is operating in a competitive market, with the exception of door-to-door mail delivery, but in terms of parcels, of course, there are competitors. You have to look at the industry it is operating in.
It's more than just another corporate player. It is also a public institution that has a mandate that is broader than simply a private firm. There's a different approach to dealing with those kinds of questions in the public sector, when you have an organization that has a role and a purpose that's broader than that of simply a corporation.
I will say, though, in defence of the task force, they had a restricted mandate. Their terms of reference were to look at Canada Post from the lens of self-sustainability.
I don't feel that our committee is bound by that same constraint. I think we have the ability...and hence this nation-wide consultation. It would be redundant otherwise to examine other options.
To each of you, do you feel there is enough opportunity for revenue out there for Canada Post to support the type of service that we expect, so it can be profitable and meet its pension obligations, or do you feel that we should accept the fact that it can't be and it should be subsidized? Then what level of subsidy do you feel would be an acceptable amount in the context of potentially an $8 billion shortfall in the pension plan right now?
That's to each of you, so maybe we'll start with Mr. Sosa and work down the table. Is a subsidy okay for Canada Post, and about what amount would be appropriate?
There is always the possibility of subsidy, but I don't think it needs to be on the table. It's not at the top of the list. If you look at the opportunities for expanding revenue and not make any doomsday forecasts about the catastrophic elimination of part of the revenue stream that's there now, or something like that.... I don't see a crisis. I see challenges, but I also see opportunities.
I have this article from Le Figaro in France, looking at the service that has been brought in where La Poste now gives you the option to pay to have someone look in on your relatives two, four, or six times a week. It's charging about 60 euros for two visits a week, about 100 euros for four visits a week, and 140 euros for a visit every day. That's another whole revenue stream that could be considered.
When it comes to the postal banking issue as part of the picture, I really wonder what's in the internal Canada Post study, which has been mostly redacted.
Thank you to our witnesses today for their presentations.
I come from a rural background, so I'll lead off with a couple of those questions. There is so much to do here in five minutes that I won't get it done.
There were comments made about the number of banking facilities we have, and a lot of small towns don't have them anymore. My experience is that, where those banking facilities—the private banks—have taken leave of the community, in many cases credit unions have filled in and done a tremendous job in those areas. Some small community is left, and Canada Post has partnered with a small business in that community to have a place for the services to be delivered. Do you see that as a model that's sustainable?
The one I'm thinking of is the postal service that went into a restaurant. It wasn't that something else went into the postal service in that community. It was shut down. There was delivery via multiple small businesses in that community. Heck, some of them could even be fertilizer dealerships in some of these really small communities. In this case, it was a small restaurant in the community.
Grocery stores are doing it. We've seen Canada Post services in places like Shoppers Drug Mart, gas stations, and other facilities within cities.
Do you see that as an option for Canada Post, to have its services delivered that way? I think we have enough banking services in some of them, but if there is an opportunity to have that banking service expanded, we've heard from the previous panels that it should be done in a profitable manner and that it would be profitable. Otherwise, Canada Post wouldn't be getting into it. Can you elaborate on that?
Thank you to all participants for taking the time out of your very busy days to be with us today. As Madam Ratansi has already stated, if you have additional information you wish to provide to the committee for our benefit and our deliberations, I would suggest you do so through the chair.
On a personal note, Professor Camfield, as chair I was very interested in your comments in your paper about the critique you had of the proposed regulatory body. The first thing that struck me, hearkening back a number of years in Saskatchewan, was the government of the day establishing and creating the health district board concept, ostensibly to give better control to local residents about the health services being delivered in their areas, but the consequences, whether intended or unintended, are that it almost absolves the government of any responsibility for the delivery of health care services. Whether they run deficits or have service delivery problems, the health district boards bear the brunt of the criticism, rather than the government. As we all know, the provincial governments are constitutionally required to deliver health care services.
I would be very much interested in hearing a little more in-depth critique of why the regulatory body as being proposed by the task force may not be in the best interests of Canadians. Obviously it's your choice to do so if you wish, sir.