Government Operations Committee on June 6th, 2006

[The Chair, Liberal, Diane Marleau]

Seeing a quorum, I'm calling the meeting to order.

Mr. Alghabra.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Thank you, Madam Chair.

I have a motion for the committee. Learning from history, I was just wondering if the committee would mind looking over it now before we start our day's business.

[The Chair, Liberal, Diane Marleau]

I'm here to serve the committee.

Mrs. Thibault.

[Louise Thibault, Bloc, Rimouski-Neigette—Témiscouata—Les Basques, QC]

I want to tell Mr. Alghabra that I understand his concern. However, I would do the opposite. Since we don't want to waste the time of our witnesses, I suggest we could stop everything at 10:45 a.m. Then, you would have time to thank the witnesses and we would have 15 minutes to dispose of the motion. That would be a nice compromise.

[The Chair, Liberal, Diane Marleau]

That's a good idea. Everybody agrees?

[Mike Wallace, Conservative, Burlington, ON]

Why don't we just defeat the motion right now?

[An hon. member]

I guess we could.

[The Chair, Liberal, Diane Marleau]

I am here to serve the committee. If it's the committee's wish that we wait until the end to debate it, then we will.

[Chris Warkentin, Conservative, Peace River, AB]

If this will be short, then we'll do it now.

[An hon. member]

I'll move the motion. I'll move Omar's motion.

[The Chair, Liberal, Diane Marleau]

He can't. He has to move it.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Chris said we should wait. Madame Thibault said we should wait.

[Mike Wallace, Conservative, Burlington, ON]

That's better than mine.

[The Chair, Liberal, Diane Marleau]

Anyway, I'll make the decision. We'll go with the witnesses.

We have with us today members from the Canadian Union of Postal Workers.

Normally what we do is we give you 10 minutes, if you wish, to introduce yourselves and make a presentation. Then we go to the members for questions.

Please proceed.

[Deborah Bourque, National President, Canadian Union of Postal Workers]

Thank you very much.

My name is Deborah Bourque. I'm the national president of the Canadian Union of Postal Workers. With me is Geoff Bickerton, our director of research.

On behalf of the Canadian Union of Postal Workers, I want to thank you very much for the opportunity to appear before this committee.

CUPW represents 54,000 workers in large and small communities from coast to coast to coast. The vast majority of our members work for Canada Post. I think it's fair to say that this union knows better than most what it takes to make Canada Post work. CUPW has a well-developed, real-world understanding of this public institution. We know its history, its strengths, and its weaknesses.

I'll start with its strengths and then talk about some of the weaknesses we see in the system and some of the concerns we have for the future based on our experience and our history.

We truly believe that Canada Post's strengths lie in its mandate. The corporation is mandated by law to provide basic customary postal service while improving service, operating on a financially self-sustaining basis, and balancing its objectives with the needs of its employees, most of them CUPW members.

The act outlining this mandate, the Canada Post Corporation Act, was unanimously adopted by Parliament in 1981. This legislation was the product of more than two years of extensive consultation among parliamentarians, business groups, and postal unions. It was an agreement that was very carefully crafted to balance diverse needs, and it is an agreement that we believe still works for the public, our communities, and businesses both large and small.

There is no groundswell of opposition to the current mandate. Nevertheless, we've seen signs that Canada Post has unilaterally decided or has been instructed by the government--we don't know--to ignore its legislative mandate to provide public postal service, to break even, and to improve labour relations.

Before proceeding, I'd like to say that I don't intend to single out Ms. Greene in my remarks to come as being solely responsible for ignoring Canada Post's legal mandate. She is, however, the public face of the corporation and the corporation's spokesperson. I think it goes without saying that the government is primarily responsible for ensuring that Canada Post lives up to its legislative mandate to provide public postal service, to break even, and to improve labour relations.

To be frank, labour relations seem to have taken a back seat at Canada Post after a long period of decent labour management relations, at least at the national level. We've had almost a decade of labour peace. We've worked hard at developing solutions to problems through negotiations and pilot projects. But lately the corporation seems to be much more confrontational and a lot less interested in working with the union to develop solutions to problems at our public post office.

Canada Post President Moya Greene has called CUPW a special interest group. The corporation has publicly accused us of featherbedding and fear mongering--all this because we've raised concerns about post office and plant closures. We've not heard this kind of language from Canada Post since the mid eighties, when former President Don Lander tried to savagely cut jobs and service at Canada Post, including thousands of post offices.

The corporation is not interested in operating the post office on a financially self-sustaining basis either. Ms. Greene doesn't think the corporation makes enough money, even though it has had 11 consecutive years of profit. It made $199 million this year alone. The president of Canada Post actually told one parliamentary committee that she thinks the corporation is “withering”. Last year we delivered record volumes of mail to a record number of householders and made $199 million in profit. We don't think that's an indication of a corporation that's withering.

Last but not least, Ms. Greene seems to think public postal service is a thing of the past and not something that she has to pay attention to. She's fond of saying that Canada Post is a commercial enterprise and that she has a business mandate. But Canada Post is not a commercial enterprise; it's a crown corporation.

Crown corporations like Canada Post have both public and commercial activities, but they are distinct from commercial enterprises in that they are designed to serve the public interest, not simply maximize profit.

Crown corporations like Canada Post do not have business mandates, but this is exactly what Moya Greene says she has, and it is this steadfast adherence to a business mandate that threatens to undermine our public postal system.

For example, Moya Greene has justified closing the Quebec City mail processing plant on the grounds that it's a good business decision, and she says workers will not be harmed and service will not suffer. No one really believes this. The people of Quebec City don't believe it. Businesses in Quebec, municipalities from coast to coast, and many members of Parliament have expressed their concerns about this closure and others, but Ms. Greene does not see why she should have to take these views into consideration.

I would argue that the government--or shareholder, if you prefer--needs to develop a democratic and uniform process for making these kinds of decisions in consultation with the public, postal workers, and major stakeholders. We understand that the government is only responsible for providing broad policy direction to crown corporations and that it is not to become involved in day-to-day operations, but we think the responsibility to provide broad policy direction obliges the government to deal with fundamental issues such as the integrity of our public postal network.

This network is at risk. In July 2005, Canada Post announced it would be reviewing the national postal network, including all mechanized processing plants, and that the Quebec City mail processing plant would be the first facility to be reviewed. The corporation announced its plans to close the plant three weeks later.

Canada Post has refused to release information relating to this review. It claims that it does not have a plan and that it simply looks at facilities on a case-by-case basis. No matter what the corporation does, we need a better process for making changes to the network--a process that involves the public, the people who built and paid for our public post office.

We need a better process for the moratorium on closures as well. First, let me say I was happy to hear Minister Lawrence Cannon say, at the transport committee last week, that his government is taking a status quo approach to the moratorium. This is good news, although we'd like the minister to extend the moratorium to include urban closures as well, and to work with us and others on a better process for making changes to the network.

The current process is not working. Canada Post is closing rural post offices in spite of the moratorium and in spite of opposition to the closures. Publicly, the corporation says it consults with local officials to see what can be done to avoid a closure--not postal workers, not the public, not municipalities, just local officials. This leaves way too many people out of the discussion.

Public institutions need public input. CUPW believes that this fundamental flaw needs to be fixed. We hope it will be fixed, perhaps as part of the review the government is conducting in connection with the financial and policy framework it uses for Canada Post.

To date, this policy framework review has been conducted in secret. The previous federal government started the review. It's our understanding that there is a report, and that the Conservative government will decide whether or not to alter the current financial and policy framework.

This framework provides the basis for raising the price of a standard stamp. It sets targets for service standards, return on equity, and dividend policy, and it includes the moratorium on closures. Changes to the policy framework could undermine universal public postal service as we know it--or it could improve it. We know from highly censored documents we recently received through access to information that Canada Post and the government are discussing what is and what is not considered to be part of the post office's universal service obligation, and that the government may conduct a mandate review.

This sets off some alarm bells for us. The last mandate review questioned the very nature of our universal public postal system, as well as the post office's right to engage in commercial activities. For example, it asked if services should be modified, added to, or relinquished; if the corporation should generate a commercial return on equity; if it should aim to operate on a break-even basis; and if the exclusive privilege of the corporation should be adjusted or discontinued.

We're especially concerned because the last mandate review was announced just a few months after a coalition of Canada Post competitors called for a review to look at whether the post office should be allowed to compete with the private sector. We have a similar situation brewing at the moment.

Earlier this year, the Canadian International Mail Association called for a parliamentary review of the exclusive privilege, and just last month, John McKay, Liberal member of Parliament for Scarborough--Guildwood, attacked the exclusive privilege in the House of Commons on behalf of re-mailers, who are unhappy that the exclusive privilege includes international mail. Minister Lawrence Cannon has promised to look into this issue and advise the House as to what the government intends to do in the coming days.

We're concerned that Minister Cannon is investigating this issue and conducting a policy framework review without our input, and he may even be looking at conducting a mandate review without our input. We want more information on what's going on and we want input. There needs to be much more transparency and accountability at Canada Post, and we think it needs to come from both the corporation and from the government.

Thanks for listening. We'd be happy to answer any of your questions.

[The Chair, Liberal, Diane Marleau]

Thank you very much. That was right on.

We'll go with the first questioner, for seven minutes. It is Mr. Alghabra.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Thank you, Madam Chair.

Good morning to both of you. Thank you for coming here.

Obviously our intention as a committee is to hear from the union, which we feel is a big part of Canada Post, and hear from management later on. We hope that we don't become a tool of negotiation between management and union, but we want to understand what's going on and hopefully be able to participate in improving the services and the future of Canada Post.

I'd like to step back and hear your point of view on how you see Canada Post as an enterprise. What are the key success factors for it? What are the competitive forces, and what do you think needs to be done to ensure continuing success of the enterprise?

[Deborah Bourque]

I would say, first of all, that we don't think Canada Post is broken. We don't think it needs to be fixed.

We know that Canada Post is a public sector success story. Canada Post has an international reputation in terms of providing quality universal public postal service. Canada Post has one of the lowest postage rates in the G-7 and, I would argue, is one of the best postal services in the world. Having said that, I think lots can be done to improve it, and that success story is definitely at risk right now.

The competitive situation with Canada Post is very difficult right now. As you may know, many of Canada Post's competitors are increasingly aggressive and increasingly predatory--folks like United Parcel Service, who have challenged the Canadian government under the North American Free Trade Agreement, suggesting that Canada Post's public network of post offices and mailboxes is somehow unfair competition. We think there are lots of challenges in terms of Canada Post's ability to compete.

We also think it's very important that Canada Post continue to be able to compete with the private sector, because the revenues Canada Post earns from competitive services are used to finance the universal service obligation Canada Post has to provide basic customary service to all communities, regardless of size, at a universal price.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Okay, but in an ideal world, in a perfect world, what kinds of services and what quality of services do you envision Canada Post doing? I would like to hear your vision of Canada Post.

[Deborah Bourque]

Our vision of Canada Post for the future is a post office that, first and foremost, remains public and acts in the public interest. We believe that Canada Post definitely has to respond to the changes in the communications field, changes in technology. There are lots of alternatives to basic letter mail these days, and we think Canada Post has to meet those challenges.

We think the wrong way to meet those challenges is by downsizing and focusing solely on the financial bottom line. We think Canada Post has to be vibrant; it has to grow, it has to expand services, and it has to continue to meet the needs of the communities it services in this vast country.

In order to continue to meet the needs of those communities, there has to be a public debate about the future of public postal service. We would argue that Canada Post has to consult with the communities and find a democratic way of making changes. We're not suggesting Canada Post should never change, or the way service is provided should never change, or the network of post offices should never change. We just think change has to be for a good reason, not just to make profits by dumping real estate or to improve the financial bottom line by cutting back service. We think any changes to service have to be designed to improve and expand service.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Do I have more time?

[The Chair, Liberal, Diane Marleau]

Yes.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Obviously, in any type of corporation I think the dynamic between union and management is a healthy dynamic; I think the outcome usually benefits everybody. I understand the natural dynamic, but what do you think are the root causes of some of the fundamental grievances, in your opinion? What are they? Could you just summarize them for us from your perspective?

[Deborah Bourque]

From our perspective, we're very worried about labour relations right now at Canada Post. We're very worried about the relationship the union has with Canada Post at the national level, because we've worked really hard to improve labour relations, and I think we were a definite part of the solution and a definite contribution to the fact that there have been 10 years of labour peace.

[Omar Alghabra, Liberal, Mississauga—Erindale, ON]

Can you just tell me exactly what you mean? What concerns you about the relationship that's going on right now?