NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, February 17, 1998

• 1531

[English]

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): Colleagues, I'm pleased to open today's meeting of the Standing Committee on Natural Resources and Government Operations. We're pleased to have with us today the Minister of Public Works and Government Services Canada, who is the minister responsible for Canada Post, and with him, Georges Clermont, president and CEO of Canada Post.

Gentlemen, thank you for appearing today.

We invite you, Mr. Minister, to make an opening address and then we'll open the floor to questions by members. Thank you, sir.

[Translation]

The Hon. Alfonso Gagliano (Minister of Public Works and Government Services, Lib.): Thank you, Mr. Chairman.

Dear colleagues, thank you for your invitation to appear before this committee to discuss issues related to Canada Post Corporation.

As you did, Mr. Chairman, I would like to start by introducing the president of Canada Post Corporation, Mr. Georges Clermont, who will join me in answering the questions you might have.

As this is my first opportunity to address this standing committee, let me say how proud and honoured I feel to have been given responsibility for Canada Post Corporation.

Canada Post is one of our country's most important institutions. It was among the first departments to be established after Confederation, in 1867. Since then, it has evolved as Canada, adapting to the changing needs of our people. It is a reflection of our nation.

[English]

Canada Post is a vital link between our communities. Every year it delivers 11 billion pieces of mail to 12 million addresses across our country. Canada Post plays a vital role in maintaining strong communication and social links among Canadians from coast to coast. Indeed, some small communities in our northern regions are totally dependent on postal service, not only for mail, but also for the delivery of medication and food and for other essential services.

Canada Post also serves as a partner to thousands of businesses, large and small, throughout the country and around the world. Today Canada Post is one of the largest Canadian corporations. It has an annual revenue of $5 billion and more than 54,000 employees.

Maintaining a relevant, responsive, universal, and affordable postal service is our vision of the future of Canada Post. It's a modern vision, fitting well with both the expectations of Canadians and the government's commitment to fiscal responsibility.

[Translation]

Our postal service, like our whole society, is going through a period of intensive changes. Faced with the rapid growth of new technologies such as fax machines, electronic mail and Internet, Canada Post must make important changes. If it does not, it will disappear.

What used to be the raison d'être of the postal service, namely mail delivery, now accounts for only 55% of the corporation's activities. Nowadays, 45% of all Canada Post operations are based on modern and competitive products.

Before I go any further, let me state very clearly once more that Canada Post is not for sale; not today, not tomorrow, and not in any foreseeable future. This decision was not made lightly. In a country such as Canada, whose landmass is so great and population so widely dispersed, no private system will ever be able to provide universal service for a reasonable price.

For the last 10 years, Canada Post Corporation has not received any public money. We have to make sure it never again becomes a burden for the Canadian taxpayer. And, just to make things easier for Mr. Clermont, the cost of a stamp to send a regular letter within Canada—already the lowest in the world—is frozen until January 1999.

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[English]

Last year the government thoroughly reviewed the mandate of Canada Post and then directed the corporation to implement the following decisions: offer Canadians universal postal service at a reasonable price; institute more transparent reporting and the highest standards of business practice; achieve financial performance consistent with private sector regulated monopolies; continuously improve letter-mail and retail service, especially in rural Canada; respect the stamp price freeze for two years and then maintain stamp price increases below inflation; ensure no cross-subsidization from exclusive privilege products; create an ombudsman position; and recognize these principles in labour negotiations.

Canada Post has already moved on many of these items. It has opened up its books and published its annual report. It has appointed an ombudsman and has demonstrated there is no cross-subsidization between its exclusive products and the competitive ones.

Over the past several months, Canada Post has also committed significant resources to transforming and improving postal service in rural Canada. The result will be a faster, more reliable, and more predictable service in rural Canada.

But beyond these specific initiatives, there is an urgent need for the corporation to address service improvement on a more basic level. This is what Canada Post wanted to negotiate with its biggest union, CUPW, in the last round of negotiations, but could not achieve.

[Translation]

The constraints under which the management of Canada Post must work involve operating costs that have a considerable impact on the competitiveness of the corporation. The current collective agreement contains dozens of clauses that are also inconsistent with the competitive world in which the corporation must operate.

After refusing the last offer made by Canada Post, the union ordered a general strike on November 19. Canada Post decided not to hire replacement workers. It immediately suspended its operations.

My colleague, the Minister of Labour, after trying everything to move the negotiations forward, was forced to introduce back-to- work legislation on December 1st. Three days later, Canada Post resumed its activities. However, hundreds of small and medium-size businesses, as well as charities and thousands of workers, were badly hurt by the strike.

Many customers have left Canada Post. This includes almost a million recipients of various social programs who switched to direct deposit. They will never come back to Canada Post.

Recent Statistics Canada data demonstrate that Canada's gross domestic product dropped by 0.3% in November. The agency estimates that 40% of this decrease is due to the postal strike. It is therefore clear that we were right to introduce back-to-work legislation. It wasn't a pleasant thing to do, but it was the responsible thing to do.

The arbitrator appointed by the Minister of Labour is currently working with the two parties involved. According to the schedule, he should be completing his work toward the end of April. But the issue is a complex one, and solutions are elusive since they must ensure a balance between the needs of both groups.

To avoid similar conflicts in the future, attitudes will have to change and a more effective way of managing labour relations at Canada Post will have to be found.

I have already committed myself to undertaking a serious study of options that would be better adapted to the realities and needs of the Canadian postal system.

There has already been tangible progress. During the last round of negotiations, Canada Post signed agreements with its three other unions. For the first time ever during a work stoppage, the corporation suspended its operations instead of hiring replacement workers. This is the first step in the right direction. There will have to be many more.

I am pleased to mention that the corporation also had successes in other areas of its relationship with its employees. Indeed, in 1997, Canada Post was the only employer under federal jurisdiction to receive a perfect score in the four areas of employment equity review. None of this could have been achieved without hard work.

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We expect a lot of Canada Post. I'm the first to admit it. However, when I travel abroad or when I meet with foreign delegations, I realize that we have a right to be so demanding because our postal service is recognized everywhere for its effectiveness and its efficiency. We are the envy of the world.

In fact, in recent years, 37 countries have called on Canada Post to lead 80 projects designed to improve their postal systems. and I can tell you that there are several more in negotiation even as we speak.

On that positive note, I will now take your questions. Thank you for your attention.

[English]

The Chairman: Thank you, Mr. Minister. There's no question that Canada Post is extremely important to Canadians and Canada.

With that, we will ask Mr. Gouk, on behalf of Reform, to lead the questions.

Mr. Jim Gouk (West Kootenay—Okanagan, Ref.): Thank you, Mr. Chairman. I do have a good list of questions for the minister.

I'd like to start with one comment he made, where he expressed that he was right to introduce back-to-work legislation because of all the damage it was doing. I would suggest that by his very evidence of all the damage it did, he was wrong to introduce back-to-work legislation. He should have introduced legislation that prevented the strike in the first place, given that there was a strike in 1987 that ended in legislation, a strike in 1991 that ended in legislation, and now a strike in 1997 that ended in legislation, and by the minister's own mouth, it's done a tremendous amount of damage. So my first question is: what is he going to do to prevent a strike in the year 2000?

Mr. Alfonso Gagliano: First of all, let me say that we are waiting impatiently, and hopefully by the end of April the mediator will terminate his work. I don't want to start before that ends, because I want to give the mediator every chance, so I will not interfere. But once that operation is terminated, once there is a contract in place, I intend to, yes, go down to where the people work in Canada Post and even take some walks with mail persons to really find out why the management-labour relations are so agitated.

I agree with the member that it's not the first time, but let's not forget that people have a right to strike, and we shouldn't take that right away so easily. We waited as long as we could, and when we saw that there was no hope of having a settlement.... We believe in a negotiated settlement in the collective labour system we have, so we did the best we could, and after a while....

Also, during the ice storm, I had the opportunity of visiting several postal outlets. I want to take this opportunity to congratulate not only the management for offering me that service, but also the workers who went out of their way when they didn't have to. They did things they didn't have to, that the actual collective agreement didn't ask them to do. They served the people. I realize how important postal service is still to Canadians.

So hopefully in late spring or summer I can, with the president and other officials of Canada Post and the union, really work it out in a way so that in the future we won't have to leave it the way we left it in the fall and early winter of 1997.

Mr. Jim Gouk: Mr. Minister, you've suggested that you can't understand why there are such bad relations with and tension on the part of CUPW, and you want to find a way to make this better. Then I would ask why, in your legislation in 1997 to put them back to work, you forced upon them a wage settlement that was lower than what Canada Post, their employer, had already put on the table—not much; just enough to insult them. I would like to know why you did this, if you're really interested in improving labour relations between management and the union.

Mr. Alfonso Gagliano: When we had the debate in the House, and even in the Senate, we made it very clear why. First of all, the last offer Canada Post made was an offer by Mr. Clermont that was very clearly to avoid a strike. It was even before they went to strike; it was really to avoid a strike. And the union rejected it.

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Once it was off the table, in preparing the legislation we had therefore to take into consideration, first of all, the industrial index and that all the other sectors had been having wage freezes when Canada Post employees had a wage increase just a couple of months before.

When you take all that into consideration, I think our wage offer in the legislation was fair. Also, as a government we have a responsibility; we want to make sure inflation doesn't kick up again. Therefore we made that decision, and we stand by it, Mr. Chairman.

Mr. Jim Gouk: In 1995, the Dobson report criticized Canada Post for over-inflating its projected revenues; in 1995, the Radwanski report criticized Canada Post for over-inflating its projected revenues; in 1997, Toronto Dominion Securities. These are all studies undertaken by the government, criticizing Canada Post for over-inflating its projected revenues. Every report the government used taxpayers dollars to fund in order to find out what is happening says they're over-inflating their revenues and they're unrealistic.

What is the excuse for this? Why is this continuing to go on with nothing being done? What is going to be done about it so we get a realistic picture of the real projected revenues of Canada Post Corporation?

Mr. Alfonso Gagliano: Mr. Chairman, in 1995 the government decided to have the Radwanski report, which went across the country, heard everybody, and filed a report making recommendations. The government took some of those recommendations and rejected others, and in the spring of 1997 we gave a very clear mandate to Canada Post as to how to operate and what the government expects.

In my presentation I stated those objectives, which are: universal postal services; a freeze on Canada stamp prices until 1999, and after that make sure there is a mechanism so that they are increased below inflation; operate commercially; naturally, have better management-labour relations; and have an ombudsman to which Canadians can address their complaints to be answered.

I think Canada Post has answered that government mandate. We are in the last chapter, the last stretch, to solve our labour-management relations, and I'm confident Canada Post will meet its obligations.

The member said that every year there were overstated figures. As I said in my presentation, in the past ten years Canada Post has never used public funds. They have been self-financed. I think if you look at past records, from the beginning, it's a good achievement.

When I go abroad and speak about the achievements of Canada Post, everybody is amazed. We've come a long way, Mr. Chairman, from 1981 and a system that had a $500-million deficit and was having a strike every year.

Mr. Jim Gouk: You mentioned that Canada Post doesn't cost us—the taxpayers, if you would—any money. Yet by their 1996-97 report, they lost $619 million.

Where did the $619 million come from? Is this sort of floating debt, unpaid bills, or did they actually acquire $619 million somewhere to pay this shortfall on their revenues versus their expenses? Where is that debt, and who's holding it?

Mr. Alfonso Gagliano: Maybe the member can be more specific.

Mr. Georges Clermont (President and Chief Executive Officer, Canada Post Corporation): In what year, Mr. Gouk?

Mr. Jim Gouk: According to your report, it says you had revenues of $4.325 billion and costs of operation of $4.944 billion. To me, that says a $619-million deficit.

Mr. Georges Clermont: In the last year?

Mr. Jim Gouk: Yes.

Mr. Georges Clermont: In the last year, the net income, net profit, was $118 million, sir. I don't know where you get $600 million.

Mr. Jim Gouk: I didn't write the pages down.

Mr. Jerry Pickard (Kent—Essex, Lib.): Could you refer to the page, Mr. Gouk, so that they can check the page numbers?

Mr. Jim Gouk: I don't have it at this time, but I will certainly be looking it up as we go around.

Mr. Georges Clermont: The net profits of the corporation are reported in the annual report, and the net income, unconsolidated, is at $112,000,500.23.

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Mr. Jim Gouk: Do I have time for one other thing?

The Chairman: Okay.

Mr. Jim Gouk: One of the things I have a concern about—in order to keep to something short at this point—is private sector competition, competing against the private sector. There are private sector companies, some of the courier companies, for example, that would like to compete against Canada Post, but they're told they can't because Canada Post has absolute protection on the delivery of letter mail; yet we let Canada Post compete against these private businesses.

How can we justify going to the private sector and saying they can't compete against Canada Post if we turn around and say Canada Post can go ahead and compete against them? Where's the fairness here? Could you respond to businesses that express this concern?

Mr. Alfonso Gagliano: I think where the private sector is saying that they wouldn't like the exclusive privilege of the letter mail system that they have...that system doesn't subsidize other activities that are in competition with the private sector, and the government agrees with that statement. There was also a very clear statement in the Radwanski report, and that's why I'm giving the new mandate to Canada Post. We've made it very clear that we don't want any cross-subsidization. In the annual report and through the auditor's report we were told that there was no cross-subsidization any more in Canada Post.

I think we answered the concern of the private sector. Also, the annual report is open to everybody, which the competitors of Canada Post don't do; they don't open their books to the public, as Canada Post does.

The Chairman: Are you okay for now, Jim?

Mr. Jim Gouk: Yes, that's fine.

The Chairman: Thank you, Mr. Gouk.

Mr. Jackson, please.

Mr. Ovid Jackson (Bruce—Grey, Lib.): Mr. Chairman, I'll open on Jim's question. The government has completed its review of Canada Post, and a number of courier companies are still expressing their concern about cross-subsidization at Canada Post. Some of these companies are questioning the relationship between Purolator and Canada Post, and they're also claiming that the corporation is subsidizing priority post with its letter mail revenue. They believe that Canada Post and the economy as a whole would be better served if Canada Post were to exit the courier services.

Is Canada Post really cross-subsidizing, and has the government taken the necessary steps to ensure that the corporation is fair, open, and transparent?

Mr. Alfonso Gagliano: Mr. Speaker, as I said before, we have it from the auditor, we have it in the annual report, the crown corporation says so, and the auditor is saying so: there isn't any cross-subsidization. The government position, which was also made very clear to Canada Post, was that we don't want any cross-subsidization. We also want to make sure that Canada Post's books are open, fair, and transparent so that the people of Canada can see how their postal service is being managed.

Mr. Ovid Jackson: As for these courier services, Mr. Chairman—to the minister or Mr. Clermont—why is it that we were using courier services? Is the government competing with something that could be used by the private industry?

Mr. Georges Clermont: Could you repeat the last part of your question?

Mr. Ovid Jackson: You know that one of the things we try to do is to get government right, and by getting government right we mean that those things that can be done by the private sector should be done by it. What's your mandate for having a courier service?

Mr. Georges Clermont: Sir, the accusations of cross-subsidization go back 10 years, all driven mostly by multinational companies operating from the United States and trying to import into Canada an American system, a regulatory forum, for the postal rates.

Last year we were the first company to disaggregate the costs by product line in our annual report.

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The annual report, audited by Deloitte & Touche and recertified—which is unusual—by KPMG on the issue of annual cost study and cross-subsidization, has two statements therein from reputable firms saying that every product line has the contribution described in the disaggregated costs that are given in the annual report. I don't know what more we can do to satisfy that there is no cross-subsidization. It's the tactic that has been used in the United States, and to a great extent has been successful in past years, but it is no longer successful in that the postal service in the United States is given more leeway than it was.

We have a system that allows for it, and there was no cross-subsidization.

There's also a statement by the auditors that any transactions between Canada Post and Purolator are at arm's length and the prices charged therefore are at market value. I don't know what more we can say.

The Chairman: Thank you, Mr. Jackson.

We'll move to Madame Girard-Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): Good afternoon, Mr. Minister. Thank you for your presentation, which I appreciated enormously. Your vision of Canada Post Corporation is a vision of the future. But before we think about the future, I would like to know a little more about the present.

At Canada Post, an arbitrator has been appointed to settle outstanding issues so that we can go forward. I would like to know how outstanding issues will be dealt with before we reach an agreement with Canada Post. Then we can talk about the future. Right now, I am interested in the present.

If I understand correctly, your representative before the arbitrator is Mr. Rolland Forget.

Mr. Georges Clermont: No, Mr. Forget is a lawyer who works for... Our representative in the arbitration process is Mr. Raymond Poirier.

Ms. Jocelyne Girard-Bujold: Some people consider that Canada Post has very little credibility, and do not believe the corporation can do what needs to be done for issues to be settled under arbitration.

Is everyone negotiating with a genuine intention of settling outstanding issues, or do they just want to give the impression of working in good faith until some kind of bill is tabled, as has been done before?

The Hon. Alphonse Gagliano: First, before the back-to-work legislation was passed, I think negotiations were on the verge of some kind of settlement, if I understood correctly the chief union negotiator. You will remember that I said so in the House. Unfortunately, negotiations were broken off suddenly, and...

[Editor's note: Inaudible].

Throughout the process, the government and Canada Post always had the intention of reaching a negotiated settlement. It just didn't work.

An arbitrator has now been appointed, and his job is to try to bring both parties together at the bargaining table to find a solution and reach an agreement on all issues that are still outstanding.

I have confidence in the process. You will understand that, as a minister, it is inappropriate for me to interfere in the process. Then, everyone would accuse me of interference.

I believe in a negotiated settlement, and I will let the arbitrator, Mr. Richard, get on with his work. I will let the Chairman here speak for himself. For my part, as a minister, I can assure you that I am interested in the parties' reaching a negotiated settlement. I hope we shall have such an agreement. Then, we can talk about the future.

Ms. Jocelyne Girard-Bujold: In that case, I will put my question to Mr. Clermont.

Mr. Clermont, the reason negotiations were broken off and we ended up with back-to-work legislation is that letter carrier routes were reorganized. That was the major sticking point that prevented negotiations from being successful.

But you are aware that, one month later, Canada Post started evaluating letter carrier routes. The corporation evaluated routes in the regions, and as of this week, a new route evaluation system was implemented. Some letter carriers will be assigned 80 additional addresses. Their workload will be increased.

• 1600

Was this issue settled through the arbitrator, or did you decide unilaterally to implement the new system?

Mr. Georges Clermont: The issue has not been settled. When the time comes, we will be putting our case before the arbitrator, Mr. Richard, while the union will be putting forward its own case.

In the meantime, we are doing something that we do regularly: reevaluating the letter carrier route measurement system. However, any route may be evaluated at any time, since the volume of mail delivered by letter carriers on every route changes each year, increasing or decreasing. When it increases beyond a given percentage, we reevaluate the route. We evaluate the volume of mail to be delivered, and reassign routes. Some letter carriers are assigned additional addresses, while some find themselves with fewer.

What we try to achieve is a workload that gives letter carriers eight hours' work for eight hours' pay.

Ms. Jocelyne Girard-Bujold: Mr. Minister, when you appeared before the Senate to seek approval for your bill, there was a matter relating to 35(10)—a cost-of-living issue. The union can no longer ensure protection against inflation.

This is different from your position as presented in the Senate. You said that employees would be protected against cost-of- living increases. But at present, this issue has not been negotiated and is not covered in the agreement. There is nothing about it in the bill.

Mr. Georges Clermont: That is because the indexed cost-of- living premium is in the collective agreement. That has not changed.

Ms. Jocelyne Girard-Bujold: I did not see it in the bill.

Mr. Georges Clermont: No, but it is one of the non-monetary clauses that the arbitrator will have to consider. All clauses are not in the bill.

Ms. Jocelyne Girard-Bujold: So this is being negotiated right now.

Mr. Georges Clermont: Yes.

Ms. Jocelyne Girard-Bujold: Fine. Thank you.

The Chairman: Thank you, Ms. Girard-Bujold.

[English]

Mr. Bélair, please.

[Translation]

Mr. Réginald Bélair (Timmins—Baie-James, Lib.): Since I come from a rural area, my question will obviously focus on Canada Post's services in such areas.

In 1994, our government imposed a five-year moratorium which I believe will come to an end next year. After the moratorium ends, will the government still keep small post offices open across Canada?

The Hon. Alphonse Gagliano: The moratorium is no longer an issue, unless I am mistaken. Once the review of...

[Editor's note: Inaudible], the government announced that it would no longer be closing post offices in rural areas.

Mr. Réginald Bélair: Indefinitely?

The Hon. Alfonso Gagliano: Indefinitely.

Mr. Réginald Bélair: Indefinitely. Thank you.

My second question is on a pilot project carried out somewhere in a rural area of Quebec. It involved providing services other than those traditionally offered by Canada Post, in partnership with the provinces, banks, or even credit unions. I am not very clear on the details, but I think that the credit unions, or caisses populaires, as they are known in Québec, were involved, as well as a number of post offices.

First of all, I would like to know whether the project was a success.

Mr. Georges Clermont: I think you must be talking about the RRSP program implemented with the caisses populaires two years ago. Yes, the program was indeed successful. I think it is still in place, in partnership with the caisses populaires.

Mr. Réginald Bélair: I see. Could the same sort of program be set up for drivers' licences, say with the Quebec Department of Transport, for example?

Mr. Georges Clermont: We are not there yet.

Mr. Réginald Bélair: You are not there yet?

Mr. Georges Clermont: No.

Mr. Réginald Bélair: Do you plan to continue with, or even broaden, the pilot project?

Mr. Georges Clermont: At present, we are talking to a number of federal departments and provincial governments in order to provide government services through local post offices. The services would include such things as hunting licences, drivers' licences, and so on.

Mr. Réginald Bélair: That's what I'm talking about.

Mr. Georges Clermont: But we do not have concrete results yet.

We now have a pilot project going with Passport Canada in two cities, one of which is Cornwall. We are trying to get passports issued and back to the client in 36 or 48 hours, I believe.

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Mr. Réginald Bélair: Thirty six hours! I must admit that this is a lot better than what an MP's office can do.

My last question is on rural Canada and Canada Post: do you have any plans to improve services? I'm not talking about just keeping small post offices open, but improving the services Canada Post can deliver?

The Hon. Alfonso Gagliano: I believe a pilot project has been implemented in the Saguenay—Lac-Saint-Jean area. Recently, it was announced that the service provided through the pilot project would become permanent. Mail slated for delivery in the same area in which it is mailed will be processed in that area. It will not be sent away to centres like Jonquière, Quebec City or Montreal for processing, and then sent back to where it came from for delivery. I don't have any details, however; I believe the program was announced only a short time ago.

The system is being implemented in several municipalities. Every time it is implemented in a given riding, I write to that riding's MP to tell him or her about it.

Mr. Réginald Bélair: I see.

The Hon. Alfonso Gagliano: We are starting to implement the pilot project as a service in a number of areas. Perhaps Mr. Clermont could provide some details.

Mr. Réginald Bélair: All I want to know is whether you have a timetable for extending these services across Canada.

Mr. Georges Clermont: The pilot project that the minister mentioned is working well, so we are now planning to extend it. We will divide the country into a number of rural regions. Everything should be up and running within two years.

Mr. Réginald Bélair: Thank you, Mr. Chairman.

[English]

The Chairman: Thank you, Mr. Bélair.

We will work down the opposition side. We will start with Jim and go all the way down. Jim, if you just took a few minutes now we can always come back later on. We're going to get to you.

Mr. Jim Gouk: Okay.

One of the things the minister said was that he agrees that Canada Post shouldn't be cross-subsidizing the courier business. He said he has taken—

Mr. Benoît Serré (Timiskaming—Cochrane, Lib.): I have a point of order, Mr. Chairman. I don't think the procedure is right here. I think everybody should have a say before we go back to the same speaker. Some members of the other parties have not had a chance to speak and—

The Chairman: Thank you, Mr. Serré. We agreed at the very beginning of our committee to try to balance the time in accordance with the seats in the House. So if you would allow, that's exactly what will happen. We're going to work down this side. Everybody will get their time with the minister and Mr. Clermont in accordance with their representation in Parliament.

I have Mr. Gouk, then back to you, and then we'll work our way down.

Mr. Benoît Serré: I agree that's what we agreed to, but he had ten minutes and these people have two.

The Chairman: He's only going to take a couple of minutes right now. If he has more, he'll come at the end.

Mr. Gouk.

Mr. Jim Gouk: Thank you, Mr. Chairman. If the honourable member has a complaint, he should have made it when more than one Liberal spoke before he started worrying about two Reformers speaking.

The minister said a statement that no cross-subsidization takes place is proof that isn't there. I would suggest that's pretty weak. A statement alone coming from Canada Post auditors is a long way from proof that there is no cross-subsidization.

A study of the 1996-97 Canada Post annual report indicates that out of revenue from operations of over $4 billion and a cost of operations in the same range, over 48% of those costs of operations were not allocated to a specific expenditure or revenue. So if you take even a small portion of the almost 50% of their costs and apply it to their courier business, the courier business goes from a $17 million profit, I believe it was, to a rather substantial loss.

The private sector courier companies that Canada Post has seen fit to compete against have taken a rather enlightened position that if Canada Post wants to own a courier company, run it like a commercial business, and use it to cross-subsidize the price of a stamp, they have no problem with that, but there has to be some genuine accountability as to the actual operating costs of that courier business. The only way we're going to get this, as all the other reports and studies the minister's office has paid for have recommended, is if there is to be a more open, accountable method, and the obvious one would be the auditor general.

• 1610

So is the minister prepared to make a commitment to make Canada Post's books open to the auditor general, and most specifically with a direction to ensure that no cross-subsidization between Canada Post and its courier business exists by allocating that incredible 50% of costs to specific operations within the company?

Mr. Alfonso Gagliano: First of all, let me say it's not only Canada Post saying there is no cross-subsidization but their auditors. KPMG are the auditors. Page 32 of their annual report says very clearly, “In our opinion”—there are two opinions—

(a) the Annual Cost Study Contribution Analysis presents fairly, in all material respects, the contribution of services by market and the contribution by exclusive privilege, competitive and concessionary services for the year ended March 29, 1997, in accordance with the cost methodology described in the notes to the Annual Cost Study Contribution Analysis; and

(b) using the cost methodology described in the notes, Canada Post did not cross-subsidize its competitive services group or any market grouping of competitive services, using revenues protected by the exclusive privilege for the year ended March 29, 1997.

That's the auditor of crown corporations. It's not Canada Post. It's the auditor.

The auditor general at any time can decide to audit any books of any department or agency. I have no problem with the auditor general.... Even if I had a problem, I could not stop the auditor general. He is free. Really, I don't think the auditor general needs to be told what audits he should do, but if he wants to audit Canada Post Corp. he is welcome.

By the Financial Administration Act we have.... As a matter of fact, we have two auditors. Deloitte & Touche.... There are those national firms.

For me it's clear. We'll take their statements seriously unless the member has information to the contrary.

The Chairman: Mr. Lefebvre.

[Translation]

Mr. Réjean Lefebvre (Champlain, BQ): Thank you, Mr. Chairman. How much time do I have?

The Chairman: Five minutes.

Mr. Réjean Lefebvre: Thank you. I had the opportunity to visit Canada Post Corporation. I was dazzled by the high technology. You say there are 80 projects to improve the postal systems in 37 countries. But what do we get out of it? What is the return for Canada Post? I will have two more questions after this.

The Hon. Alfonso Gagliano: I have had the opportunity to take part in an international meeting where all North and South American countries were represented, as well as Spain and Portugal. Our relations with them all are excellent. Many projects are underway, and we are helping these countries establish their own postal systems.

Last week, we also signed a contract with the Italian postal service to implement a technology that we developed and that was of interest to them. As for the financial details, I will let Mr. Clermont tell you about them.

Mr. Georges Clermont: All those services are provided on a commercial basis. We collect fees, just as a consultant firm would. Our prices are competitive and the contracts are a source of revenue.

The Hon. Alphonso Gagliano: I would like to add that we compete on the global market. There is, of course, a bidding system. We compete with France, Ireland, England, and the private sector. Sometimes another country gets the contract, sometimes it is us. It depends on our proposal.

Mr. Réjean Lefebvre: Could the Minister tell us why the TD Dredner, Kleinwort, Benson report on securities should be released? Could the Minister at least let committee members review the study?

The Hon. Alphonso Gagliano: My predecessors and I have already said that you must bear in mind that we operate in a very competitive market. We therefore have commercial information that Canada Post's competitors could use to their advantage.

• 1615

Because of the commercial interests at stake, I will let Mr. Clermont answer that question.

Mr. Georges Clermont: Obviously, Canada Post wants to protect its competitive interests. As I said earlier, we must compete with huge multinational firms that would certainly like to get their hands on all the details, on the costs. I don't really know what they would try to demonstrate.

Mr. Lefebvre, if you look again at the annual report, on page 25 of both the English and French versions, you will find the highlights, namely communication, which includes laser mail, advertising, physical distribution, except for parcels, other services, as well as a statement of revenues and costs. It gives you the positive contribution that each of those services makes to Canada Post.

Of course, you will find a lot more detail in studies like the one you referred to, which would be very useful to our competitors.

Mr. Réjean Lefebvre: In closing, I would just like to make a brief comment.

I come from a rural area and I agree that the sorting should be done in every post office. Take La Tuque, for example, which is an outlying area. In the past, mail had to be sent to Trois- Rivières, then sent back to La Tuque, and this took four to five days. By the way, the letter was addressed to a resident of La Tuque. I would encourage Canada Post to keep doing the sorting in all its post offices and to go even further in that regard.

[English]

The Chairman: If you have more, we can come back.

Mr. Serré.

[Translation]

Mr. Benoît Serré: Mr. Minister and Mr. Clermont, welcome.

The part of your presentation that like the most is the following: "Canada Post is not for sale; not today, not tomorrow and not in any foreseeable future."

I am very proud as well that our government has decided to extend indefinitely the moratorium on the closure of rural post offices. There are 72 communities in my riding and Canada Post is often the only visible federal government presence. It is a meeting point. It is more than a mail delivery service. It is a meeting point where people chat, see their neighbours, etc.

I remember in 1993, just before the election, a small post office at Thornloe, a town of about 300 people, was closed. We held a meeting on the closure and about 280 people attended. Everyone attended. It is very important for rural Canada.

[English]

I would also like to thank the minister and Canada Post for issuing a special edition of a stamp recognizing the importance of mining. I believe the official launch is going to be May 4. I have been trying to get that for quite some time. With the help of the Canadian Institute of Mining, mining will finally be recognized next spring.

I will come back to you in the very near future, because I'd like to do the same thing for the forestry industry. It seems that we had a stamp for just about every bird or tree in this country, but we didn't have anything for mining and forestry, which are the two main economic tools for this whole country.

My question relates to the two reports. The Radwanski report states that Canada Post should operate on a break-even rather than a commercial rate of return. Toronto Dominion Securities says it should be operated on a return on equity of 11.5%, which I believe is quite high by any standard. I would tend to agree with the Radwanski report. I don't think a government should be in the business of making money; it should be there to serve the people it represents. Which one is it going to be?

Mr. Alfonso Gagliano: That's a good question. First of all, as I've said from the beginning, for the past ten years Canada Post has not been subsidized by the public and we definitely want to make sure that continues. If we want to have that assurance, we have to make sure Canada Post has some surplus, because you never know, we might have some bad years.

• 1620

Secondly, Canada Post has a tremendous amount of capital investment that needs to be renewed. Technologies are changing so fast. Everybody is concerned about what is going to happen in the year 2000. I'm sure that as the president of one of the leading corporations of the country, Mr. Clermont is as nervous as I am about making sure we can communicate in the year 2000. There is a lot invested.

The government gave instructions to Canada Post that they should not only balance the books but also pay some dividends. We're waiting for some reports. Naturally, because of the 1997 labour-management problems, there is an evaluation that needs to be made to see if the projections that were made before can be realized.

The Canadian taxpayer invested more than $1.1 billion in Canada Post.

I've heard from a lot of members that we're competing. Canada Post is not only addressing that privileged mail sector it has; it's also competing with the private sector. We'll have to be fair to the private sector, to have fair competition.

Let's be realistic and not forget that if Canada Post makes dividends, it will help improve the balance sheet of the Government of Canada and provide other social benefits to the rest of the country.

Mr. Benoît Serré: Thank you.

My next question would be to the minister again. It seems that every government department is trying to become more cost-effective. We went through a review, and I agree with all that. By the same token, by doing that we may be at cross-purposes or cross-objectives with Canada Post. For instance, Human Resources is encouraging all clients to go to direct deposit.

I guess my question concerns the fact that one arm of the government is doing something to become cost-efficient, but by the same token it's hurting another department and another crown corporation.

Has there been any kind of meeting of the minds between the different departments and Canada Post to try to solve that?

Mr. Alfonso Gagliano: I thank you for the question. I have nightmares. Besides being the minister responsible for Canada Post, I'm also the Receiver General, the one who signs and sends all the social benefit cheques. Naturally on one hand my departments encourage me to promote direct deposit; on the other hand, I have Mr. Clermont saying his corporation is losing business.

We cannot really go against technology. Direct deposit is a service Canadians chose because they have their cheques deposited into their bank accounts. Yes, I think Canada Post lost some revenue because of that. I remember when I started in this place 15 years ago, fax machines came out and everybody thought Canada Post would disappear and its service would be irrelevant.

We get annual reports and we see all the figures, and I can assure you that I saw this with my own eyes and I was impressed. I visited all the rural post outlets we have, temporary and permanent, and after a few days of the ice storm, whether it was in St. Bruno, St. Hyacinthe, or Drummondville, the people were there in line-ups to get their mail. The great majority of Canadians still rely on the post office. Despite all the technology, it's valuable and it's appreciated.

• 1625

Yes, direct deposit loses some revenue, but that's why Canada Post has to have the means to replace some of its revenues with others. That's why they add another type of service every year, and every day, I think, they look at how to improve service, give better service, and create revenue, to be able to deliver the mail at the same cost no matter where we live.

That is the universal service we want. We have to protect that. In order to protect that, we have to allow Canada Post to be a commercially viable operation.

[Translation]

The Chairman: Ms. Vautour, please.

Ms. Angela Vautour (Beauséjour—Petitcodiac, NDP): I would like you to expand a little. On page 3 of your brief, you say:

Over the past several months, Canada Post has also committed significant resources to transforming and improving postal service in rural Canada. The result will be a faster, more reliable and more predictable service in rural Canada.

Since I represent several rural communities, I would like to know what you mean by better postal service in rural areas compared to what we had in the past.

The Hon. Alfonso Gagliano: We have just said that in the past, we worked as follows: the mail was picked up in rural areas, was sent to a major urban centre where it was sorted and then sent back to the point of origin to be delivered.

We did a pilot project that enabled us to see that this process did not translate into good service. Now, if a letter is posted one day or one evening in a small town in a rural area, it can be delivered the next day or two days later. It is much simpler than sending it to Montreal, for instance, which is what used to happen. It could take five days for the letter to be delivered.

We worked hard because every time there are changes, we first do pilot projects to make sure the desired improvement is indeed viable. That is what we do.

Now I do not think that we are much further ahead because we have just started. Perhaps Mr. Clermont could tell us exactly what the objectives are and when the rest of the country will have the new system whereby local mail addressed to a neighbouring town does not have to be sent 2,000 kilometres away only to be returned a few days later.

Mr. Georges Clermont: Ms. Vautour, in urban centres, the service standards are two days in the same centre, three days to send a letter to another major centre and four days from one end of the country to the other. These standards did not apply to rural areas.

As the Minister explained, we have implemented five or six pilot projects enabling us to establish an operating radius around a town such as La Tuque or Chicoutimi and to define a zone where the mail from that town and the neighbouring region would be handled.

Since the implementation of these pilot projects, we have been able to ascertain that we could indeed have the same standards of service in those regions as in major cities, which is to deliver the mail in two days 97 or 98% of the time if it is within the regional area, and within three days if the mail is sent outside the regional area.

We now know that to ensure delivery of 97% of the mail within two days, statistically, approximately 75% of the mail must be delivered the next day. The experiment was conclusive. We have therefore started implementing this method throughout the country. We subdivided the country into 90 regions, except for major centres, which will all eventually be using the same process.

Ms. Angela Vautour: When you talk about client service in rural areas, it is obvious that right now, it is much worse than anywhere else. In fact, other factors come to my mind. In the past, in areas that I know, people had letter boxes at the entrance to their home, where they received the mail.

• 1630

Now, older people have to go out and clean the snow off their letter boxes to get their mail. People who had access to a postal box in the post office, in Sackville, for instance, must now pay for outside community mail boxes and the actual post office building is being put up for sale. This is only happening in Sackville, and yet it has a population of 5,000. They still do not know what will happen to a post office in their own region.

I therefore not see how customer service will be improved with respect to those factors.

Mr. Georges Clermont: In places where there have been rural mail boxes at the end of a road leading to a farm, things have not changed. When a region becomes more densely populated and farms disappear because of real estate development, those individual mail boxes are replaced by community mail boxes.

Ms. Angela Vautour: No. I am saying that some streets have lost their household mail delivery. Moreover, owing to contracts that have not worked out because the bids were much too low, people have sometimes been without postal service for a week or more at a time. Mail delivery is no longer done by permanent employees, as used to be the case. Every year or every two years, the contract holder has to submit an offer of services to keep the contract.

For that reason, entire streets in New Brunswick have been equipped with community mail boxes, which means that people have to leave their homes to get their mail.

Mr. Georges Clermont: In New Brunswick, I see. Fine. Is this really a reduction in services?

Ms. Angela Vautour: This is happening in New Brunswick and in the rest of the country.

Mr. Georges Clermont: It is because in New Brunswick, the government has established addresses everywhere. After the 911 emergency service was put in place, the New Brunswick government gave everyone an address.

Soon, there will be no more rural routes in New Brunswick; everyone has an address. This must be done over 10 years, I believe, and we took part in that ourselves. Delivery modes have thus changed.

Ms. Angela Vautour: I think that we must admit that service has gone down a lot. Can we also conclude that when certain services are taken away, it is for the best? For example, in the case of the post office that is being put up for sale in a region of 5,000 residents to be replaced by community mail boxes, is the plan to completely close any post office?

Mr. Georges Clermont: No. Not at all.

Ms. Angela Vautour: Not at all.

Mr. Georges Clermont: No. The advantage of community mail boxes outside the post office is to enable people to have access to them at anytime of the day or night, whereas in the post office...

Ms. Angela Vautour: We should also keep in mind that people have to pay for these community mail boxes, whereas in large centres it is free. This is another disadvantage for rural communities.

Mr. Georges Clermont: People do not pay for those mail boxes unless they are a second delivery mode.

All Canadians, regardless of their address, have a right to free mail delivery. If you want to have a post office box and you live on a rural route, as is my case, there is a cost because the employees have to sort the mail, not only for the home mail box but also for the post office box. That is the choice I make. But everyone is entitled to free mail delivery.

Ms. Angela Vautour: May I ask one last question?

[English]

The Chairman: If we have time we'll come back, Madame Vautour.

Mr. St-Julien.

[Translation]

Mr. Guy Saint-Julien (Abitibi, Lib.): My first question is for Mr. Gagliano.

During the strike, there were no strike breakers. That is important to note. We are told in our region that this was thanks to your leadership. However, if there is another strike later, in a year or two, will you maintain the same position and say that there will not be any strike breakers?

The Hon. Alfonso Gagliano: I hope that there will not be anymore strikes. From now on, as soon as the mediator has finished negotiating, I will, as Minister responsible for Canada Post, meet with the unions and go to all regions of the country to get an idea of the problems and of the solutions that can be implemented. There is more involved than just relations between the union leaders and the management at Canada Post. The problem exists at all levels. And so this will have to be looked into.

• 1635

However, it is clear to me, as you have said, that people have the right to strike. When they have that right, they can exercise it. In the past, when Canada Post tried to hire replacement workers, the result was violence on the picket lines. I said clearly to everyone from the outset that they had the right to go on strike, and that if they wanted to call a strike, they would be on strike. I think that it is something that is permitted in a democratic and civilized society.

I would also like to point out to you that, for the first time, an agreement was concluded before the strike, and I must congratulate Mr. Clermont and Mr. Tingley for that. That agreement enabled cheques to be delivered to the elderly and to those on social assistance. That was new as well.

Perhaps it might serve as an example, so that it could be possible to ensure certain essential minimum services while preserving the right to strike. But those are issues that I want to bring up with all stakeholders in the postal system. I also hope to have the support of this committee for those basic structural elements.

Mr. Guy Saint-Julien: Thank you, Minister.

I would like to ask another question. Mr. Clermont, there is talk of establishing an air stage service in Nunavik, in the James Bay region. You know that the Abitibi federal riding, which covers 802,000 square kilometres, more than half the province of Quebec, with a population of 93,000, has an air stage service. This service includes the transport of perishable and non-perishable food.

I know that Canada Post has an agreement with the Department of Indian Affairs regarding postage, which we call franking. Will Canada Post monitor that situation closely to ensure that everything is done according to the rules? I know that the results are good, and yet once the mail arrives in Nunavik, it often takes a few days to arrive at its destination. Do you have a team on the ground?

Mr. Georges Clermont: Yes, we do have a team there. Of course, it is not always easy to get there. It depends entirely on the weather. Sometimes we are not able to go there. But we are monitoring the situation there closely. I would invite you to come any time to visit the control centre in Ottawa. You will see that all regions of the country are covered, from the largest to the smallest villages, and, from there, we can monitor any airplane or truck running late.

Mr. Guy Saint-Julien: My last question is for the Minister and concerns the closing of post offices.

When the Conservatives were in office, and I was a member of that party then, post offices were being closed every week. Today, Minister—and I'm not afraid to say it—I appreciate your decision to not close any post offices in rural areas. That is very important for the taxpayers.

It is also important to keep tabs on the problems that exist at present. I am very pleased and take some credit for the speed with which Canada Post has resolved problems in my region. I've had problems since I became a member of the Liberal Party, which I am proud to be, and I would like to thank you for your co-operation.

Some Hon. members: Hear! Hear!

Mr. Guy Saint-Julien: That is the truth.

The Hon. Alphonso Gagliano: Mr. Chairman, what my colleague has just said is very important. Not only do we want to keep post offices open in rural areas, but we want to provide more services and become true rural service centres. I am working with management, with the chairman of the board, to convince all my other Cabinet colleagues of this. We are also working, of course, with the provincial governments.

We are realizing that, often, in small villages, the only thing that exists is the post office. It is very important for those people to have a service centre. There is talk of a service to issue passports, for example. I hope that other departments will also use the post offices. That would keep the post offices active. The main goal would be to serve the public. I thank Mr. Saint- Julien for having provided me with this opportunity to speak about this.

With respect to resolving specific problems, I would invite you to contact my office. I know, of course, that Canada Post does an exceptional job every time problems arise and I thank them for that. However, if a very specific situation arises, my office could try to look into it. I cannot guarantee you will get the answer you want, but I can guarantee you a quick response.

• 1640

The Chairman: Thank you, Mr. Saint-Julien. Mr. Bernier, please.

[English]

Mr. Gilles Bernier (Tobique—Mactaquac, PC): Thank you, Mr. Chairman.

My question is for Mr. Gagliano. In reference to the postal strike during the debate in the House on Bill C-24, you stated:

To prevent such conflicts in the future...more efficient mechanisms [must be] developed to manage labour relations at Canada Post.

That is why in the next few months, I intend to undertake serious research to find instruments better suited to the realities...of the Canadian postal service.

Can you give us an update on your review of alternatives in the current methods of solving labour disputes? What is the process you are following? Also, do you see any role for this committee in assisting you in that process?

Mr. Alfonso Gagliano: First of all, I said, and I repeated it, I think, in my opening statement, I intend to follow through on that. I decided to do that when the service went back to normal, since there are 90 days and the parties agreed to take more time. I think it's appropriate and fair that I let the mediator and the two parties sit down at the table and solve the outstanding issues through negotiations.

Once that is done, I intend to start discussions by starting consultation across the country. I definitely believe this committee has a role to play. Hopefully, you will give me the opportuntiy at the appropriate time, when the process is in place, to come before you and discuss my plan with you.

But at this stage, I made the decision to wait until the mediator finishes his work, because I probably would have been accused of interfering in a process, of taking over. I've been accused in the past of other things, so I prefer to wait.

This next contract will last three years, so it's important that this part terminates, I hope, in a good, negotiated settlement. Then, with your help, we can start the process of really building up the confidence of our workers and our management.

Let me make this clear here, because I don't want to be misquoted or misinterpreted. I don't intend to start any Radwanski report again. That is gone. I'm really looking for ways that management and labour can have a continuing dialogue, where the concerns of the workers are taken into account, as are the concerns of modern management.

I believe Canada Post shouldn't be privatized. I believe it's an essential service. Therefore, I think together we can achieve that objective of improved service and, yes, create jobs. But we have to work together. Management and union work against each other, and I have to say—I visit them—I know there are still some wounds out there. But we'll have to stop thinking we are enemies.

All of us together—including myself as minister—have the responsibility of keeping this corporation and giving universal service to Canadians. I cannot do it alone. Neither can Mr. Clermont. I hope I can bring everybody together and create that spirit of belonging. Canada Post belongs to all of us, employees and management and taxpayers. So yes, this committee has a very important role.

But at this time, again, I'm not ready to really present to you how I'm going to do it. I would like to let this finish, and then I intend to keep my commitment.

Mr. Gilles Bernier: Section 5 of the Canada Post Corporation Act lists the objectives of the corporation. Among other things, Canada Post is asked to seek out ways of improving and extending its product and services in the light of developments in the field of communications. Yet in the light of changes that have taken place in the last decade in electronic communications, the post office has taken only small, tentative steps in this area. For example, fax, direct deposit, e-mail, the Internet, have all encroached into the communications market Canada Post has always served, but instead of moving into these high-growth, high-profit areas, Canada Post has decided to retrench.

• 1645

Three small questions again. Why is Canada Post only now venturing into e-mail? Why is no Canada Post e-mail software available on the market? Why has Canada Post not jumped into the lucrative and rapidly expanding e-mail ad mail market?

Mr. Alfonso Gagliano: It's a very detailed question. I believe we have a service or department within the corporation that looks at all those products. Product review is going on all the time. Maybe Mr. Clermont can give more detail.

Mr. Georges Clermont: Mr. Bernier, we had e-mail before the word was invented. Canada Post, the post office department, introduced a form of electronic mail in the mid-1970s. Of course it's outdated by now.

As the minister indicated earlier, we have done research. We continue to invest in new technology. Four or five years ago we invested in a project in Quebec called UBI, which was then, five years ago, the most state-of-the-art technology. Today it's finished because its technology is obsolete. The effects of the Internet today could not be forecast or foreseen five years ago.

We have a service called volume electronic mail, which is overtaxed these days, as we speak, because we have more volume than we can process. That's a form of electronic mail where the messages received electronically turn into physical mail at the spot near the delivery point and then are delivered physically.

We have partnerships with a number of companies. We are developing private-public key infrastructure. We are developing forms of e-mail; electronic postal boxes.

A number of systems have been tried. We have tried several. But the technology evolves very quickly, and that's exactly why we spend money. We have not retrenched from anything.

But the fact is, as the minister mentioned earlier, faxes and the Internet have not reduced mail volumes to this point. Today we deliver twice the volume of mail we delivered 10 years ago; and the fax is more than 10 years old.

The Chairman: Jim.

Mr. Jim Gouk: I have one short question, but also a couple of short comments.

First, the minister stated that he hopes employee relations will improve. I find it difficult to accept they are going to, in light of the forced settlement he put upon them. The fact that he had to have security guards at his office door while the whole process was going on doesn't hold out for much hope.

About my previous question, dealing with the lack of transparency about the potential for cross-subsidization between Canada Post and the courier business, the minister relied on the auditor's statement for a defence of this, yet the auditor's statement says financial information is the responsibility of corporation management, and a separate section on measurement uncertainty states that management makes certain estimates and assumptions. Given that almost 50% of the entire cost of the Canada Post combined operation is unaccounted, I would suggest this does not give us transparency at all. That needs to be followed up further.

Some time ago we asked through Access to Information for a copy of a report referred to as the Dobson report. It was denied to us as a cabinet document as in “cabinet secrecy”. I have a copy of the Dobson report now, and I would like to know why we were denied, through the usual channels, this report paid for with taxpayers money. Unfortunately, because of a lack of time, we won't be able to get into the content, but I can assure the minister that will be coming later. Why were we denied access to this taxpayer-paid report?

• 1650

Mr. Alfonso Gagliano: Frankly, I don't know which report it is. I haven't seen it.

Mr. Jim Gouk: It was commissioned to study Canada Post. It's the business plan review for 1995.

Mr. Alfonso Gagliano: You have stated yourself the reason why Access to Information didn't want you to read it. I see that you have it, though, so—

Mr. Jim Gouk: Well, we sure didn't get it from you. We were specifically told it was protected as a cabinet document.

Mr. Alfonso Gagliano: Definitely, if it is a cabinet document, but I don't manage cabinet documents. If it was, that's why. If it was classified as a cabinet document, it's a cabinet document. Unfortunately, the law on cabinet documents says those documents will only be made public after twenty years. It's not under my authority to release a cabinet document. That's the only answer I can give you.

I just want to clarify something on the request for security during the strike. It's normal for people to sometimes get excited and to make threats and so on, so it was decided I was to have some security around me. I can assure you, though, that my life was never in danger. Some people decided after just a couple of days that I was, but I was not. I never really felt I was in any danger.

Mr. Jim Gouk: With regard to this Dobson report, it is a rather scathing attack on Canada Post management for their inability to do accurate forecasting, and also for the failure of Canada Post Corporation to provide information as to contributions by region or by product. Is the minister aware of this study? If so, what is he doing about it? If he's not aware of it, why did we pay out all this money for a study of the Canada Post Corporation business plan without his awareness of it?

Mr. Alfonso Gagliano: I'm not aware of it. This is the first time I've heard of it. I will enquire and ask if I can get a copy of it.

Mr. Jim Gouk: If the cabinet won't give you a copy, I'd be happy to provide you with one.

Mr. Alfonso Gagliano: As a cabinet minister, I think they should give me a copy. If you want to send me a copy, though, I'll save the taxpayers money that would be spent in going to get a copy from the archives.

The Chairman: There was a point of order.

[Translation]

Mr. Guy Saint-Julien: Is it possible for each member of the committee to have a copy immediately?

[English]

The Chairman: We'll ask Mr. Gouk if he could provide copies for the committee.

Mr. Alfonso Gagliano: Could you read me the title?

Mr. Jim Gouk: Mr. Chairman, if I might, I would suggest that seeing as how this was a document done for the Liberal government, the Liberal members should go to their own minister for a copy instead of relying on the ingenuity of the Reform Party to help them out.

The Chairman: We'll check that out.

We have a short question from Madame Vautour, and then one from Jocelyne.

Mr. Alfonso Gagliano: Mr. Chairman, just to understand which report it is, could we get the exact title of the report so that we know what we're talking about?

Mr. Jim Gouk: It's called The Canada Post Corporation Business Plan Review with the Secretary of State for Finance, by Robert Dobson and Associates, June 20, 1995.

The Chairman: So noted.

Mr. Alfonso Gagliano: We'll check, but it's the first time I've heard of it.

Mr. Jerry Pickard: Just so all of us are dealing with that reasonably, would Mr. Gouk be kind enough to table the report so that we could have copies of it as well?

Mr. Jim Gouk: According to the minister, I might not be able to because this is a secret document. I might be breaking some regulation.

Mr. Jerry Pickard: I think there are a lot of cabinet documents. I have no question that there are. They're not necessarily secret.

Mr. Jim Gouk: Well, we were told that this one was.

Mr. Jerry Pickard: They are documents that cabinet uses in order to look at various issues. A cabinet document on certain issues might be in the finance department or it might be in another department altogether. From what you're telling me, I believe you're referring to something that was not in this department, but in the finance department end of the spectrum. To be fair to the committee members, I think it should be tabled.

• 1655

Mr. Jim Gouk: Just so we're clear, it's not just a general cabinet document. This is a document that we applied for through Access to Information and were told we could not have because it was under the secrecy of the cabinet's act, which has 20-year protection. It is not just a general document, according to the government, your government.

Mr. Jerry Pickard: From what you describe, though, it sounds like a finance department document. But irrelevant to that, why don't you just let the document be tabled? We can get copies of it for the next meeting and look at it.

Mr. Jim Gouk: I'll certainly take that under advisement, as ministers often say.

The Chairman: I'll bet he wants to check whether he gets into trouble if he gets us copies.

We have only a few minutes left.

Mr. Jerry Pickard: Am I being told, Mr.Chairman, that it's not allowed to be circulated because it's in the hands of the Reform Party?

The Chairman: Try an Access to Information request to Jim's office.

We have only a few minutes left. Ms. Vautour and then Jocelyne.

Ms. Angela Vautour: I have a quick question and a comment. I would like to know if Canada Post is looking at changing their logo. If yes, how much money are we looking at, or has it been done?

Mr. Alfonso Gagliano: Yes, Canada Post decided to go back to its original logo and the name everybody refers to: Canada Post. Everybody you ask says Canada Post, Postes Canada, en français. It won't be a very expensive change because it will be done in the four- or five-year normal period of changing the inventory.

In other words, when they change the uniforms the new logo will appear on the new uniforms. Whenever we have to repaint or change the box and so on.... Therefore, the cost will be the minimum and Canadians will be fair to the name.

I was in Vancouver in the month of January and I was surprised. As a matter of fact I thought they were really fast at Canada Post, because I saw a building in downtown Vancouver with the name Canada Post-Poste Canada. But then they pointed out to me that it was what had existed before and it hadn't been changed. So really we're just establishing things the way they were and to how Canadians refer to their postal system.

Ms. Angela Vautour: So there are no figures.

With due respect to your statement that you do not want to interfere with the negotiations, which are basically going on, I sincerely believe that back-to-work legislation is a major interference. I think it certainly takes negotiating power away from one party.

Being an employer myself, I think if there was such legislation where my employees could never win, I would probably never give them anything, because I'd know there would be a third party jumping in at my rescue.

I don't think it's a good time to say you don't want to interfere, because I think it's been done and I think that's why these things drag on for so long. Negotiation power is really taken away and the two parties cannot sit down and really negotiate.

I'll leave at that point, or if you want to make your comments, go right ahead.

Mr. Alfonso Gagliano: The comment I want to make, and I always make, is that definitely I think we said from the beginning that they had the right to strike. I believe there were over 12 days of strike. But a vital public service like the postal service...and we saw the figures not long ago from Statistics Canada of the impact it had on the economy and on the different sectors of society. So in the end the government had to take.... We tried; the Minister of Labour tried every option he had to come to a settlement.

Again, once the mediator finishes his work we'll have to look and see if there are ways.... I look to anybody who has any suggestions to arrive at this.... How are we going to balance the rights of the workers—they have the right to service—and at the same time the rights of citizens to receive universal service from the post office? That's where the dilemma is, and that's what we have to deal with in this current negotiation. I hope we can establish good management-labour relations. Maybe we don't have to leave it any more. That's what I'm trying. I'll put all my goodwill into it and I hope everybody puts their goodwill into it. We might achieve something.

• 1700

The Chairman: Thank you, Mr. Minister. Thank you, Madame Vautour.

A short question to Madam Girard-Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold: Minister, in the past, management at Canada Post too often had their heads in the sand. I want to believe when you say that you are going to go across the country to see what is going on. I will be watching you closely because there are big problems at Canada Post.

Despite all the nice things that have been said today, I am fed up with it. I see the reality in our area and I know that the workers are not happy at Canada Post. What they want is to work and meet the expectations of residents who want to receive services. I have heard some great lines today. In any case, I will be watching you closely.

I would like to ask Mr. Clermont a question about priority post. I don't know whether this has been talked about. There have been rumours that this service would be privatized. Is that true? If not, what changes do you intend to make in these service standards?

I would also like to talk about Canada Post's plans regarding Mailboxes, etc. I would like to know a little more about that.

I would have had a number of other questions, but there is not much time left.

Mr. Georges Clermont: With respect to your first comment, a distinction should be made between labour relations and relations with employees. I personally meet, each year, with thousands of employees who are not unhappy at all, who do not want to be caught between two sides. The fact remains that, despite calls by the union not to come back to work until noon in Quebec, everyone came in at 6:00 a.m., as required by the back-to-work legislation. They were very happy to be back at work and they ignored the calls from their union. I think that that is significant.

With respect to privatization, the Minister mentioned in his opening remarks that there was no question of privatizing Canada Post.

As far as priority post goes, we are not privatizing one service rather than another. We are continually reviewing all our services, including priority post, to ensure that they meet market needs. We will soon be announcing changes to the priority post service, which will correspond to what our customers are asking for.

Any business in the service sector does the same thing. These days, anyone offering services reviews them constantly in order to meet demand, which is always changing. The Internet is there today.

The Chairman: Thank you, Ms. Girard-Bujold.

[English]

If I may, on behalf of all members, I'll thank the minister and Mr. Clermont for their time this afternoon. Clearly, running Canada Post is a major responsibility. We thank you for your efforts on behalf of all Canadians.

Did you want to do something before I adjourn?

Mr. Jim Gouk: Yes, on a point of order. I don't need the minutes.

The Chairman: We'll excuse our witnesses. Mr. Gouk has a point of order.

Mr. Jim Gouk: I was asked whether I would table a copy of this Dobson report. I said I would give it due consideration, and I have. I think it is inappropriate for Liberal members to ask the Reform Party to provide a Liberal cabinet document to them when they have direct access to their own cabinet.

So I would suggest, with all due respect, that if they want a copy of a Liberal document, they should apply through the Liberal Party.

The Chairman: Okay.

Mr. Jerry Pickard: Mr. Chairman, may I respond to that?

The Chairman: On a point of order.

Mr. Jerry Picard: Those comments floor me. I suggest that any committee member who brings up an issue here, in the House, or elsewhere, and refers to documentation and arguments to which no one has access...I believe it's incumbent upon the member of this committee, or any other House committee, to supply that material to the committee. All I'm saying is that, as a member of the committee, I see suggestions being made. I have a document here. I'm questioning whether committee members with documents and information shouldn't share them with committee members. It has nothing to do with who it belongs to. If it's a committee report from Timbuctoo then I believe that if it's being referred to in the committee, people should share that with committee members. That's all.

• 1705

The Chairman: Do you have a point of order, Mr. St-Julien?

[Translation]

Mr. Guy Saint-Julien: If he does not table today the material he's talking about, if he does not want to table it in the House of Commons, in my opinion, he is a perfect liar. He should not establish a relationship between a Liberal Party member and a Reform Party member. He is a perfect liar then.

[English]

The Chairman: I will check the legalities on behalf of the committee.

Do you have a point of order?

Mr. Jim Gouk: Now that they have made their point and have gone, just for the record, if I had a secret document that was obtained from an outside source that the government wasn't aware of and I started quoting it...the honourable member is absolutely correct. However, I would point out to him that I am quoting a document from his own party. This is not a document that shouldn't be available to them. It's a Liberal government document that was not available to me, not to him.

I had my methods of obtaining a copy. I would suggest to him that if he wants a copy of a Liberal government document, he had better go to the Liberal government.

The Chairman: If I may interrupt—

Mr. Jerry Pickard: If you provide me with the title and author of the report, I'll get the document. I believe it's not a Canada Post document, and it's certainly not a document that has to do with this department.

Mr. Jim Gouk: It is totally and wholly about Canada Post.

The Chairman: Colleagues, the nature of the question is beyond my ability to answer. The full title of the document is on record, and should a request for the document come to me, as chair, I will check into the legalities of getting a copy.

With that, we're adjourned. Thank you for your good questions.