Evidence of meeting #41 for Transport, Infrastructure and Communities in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was post.
A recording is available from Parliament.
3:30 p.m.
Conservative
The Chair Conservative Merv Tweed
Welcome, everyone, to the Standing Committee on Transport, Infrastructure and Communities, meeting number 41, pursuant to Standing Order 108(2), a study on Canada Post.
Joining us today for the first hour, we have Deborah Bourque, Gwyneth Howell, Gordon Taschuk, and Evan Zelikovitz. What we normally do is have a brief presentation, and then we ask members to go around the table for questions.
Monsieur Bélanger, on a point of order.
3:30 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
First, I have a question, if I may. Is it your intention to carry on with our witnesses today—including the entire meeting—in any way different from the way we have in past meetings?
3:30 p.m.
Conservative
The Chair Conservative Merv Tweed
I know there was a motion passed, and I suspect we should deal with that. The original motion of the subcommittee was to have a swearing-in process.
3:30 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
Mr. Chairman, I would like to move that today's witnesses not be sworn in, and I would like to speak briefly to that.
3:35 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
I want to make sure our colleagues are familiar with the normal circumstances in terms of witnesses appearing before committees. Our rules are very clear, in that “under normal circumstances”—I'm quoting Marleau and Montpetit here—“witnesses are not sworn in”. Basically, that has become the default position of this committee, because at meetings I've always been at, that's what we've done.
I understand, and so do Marleau and Montpetit, that it is entirely at the discretion of the committee. A verification of past minutes or available minutes of this committee would indicate that there has been no such discussion at public meetings of the committee. That is my second reason, that any such decisions, in my view, should be made in public discussion. Decisions to swear in witnesses should be made in an open meeting.
I believe also, Mr. Chairman, it's not necessary, and here again I'll quote Marleau and Montpetit:
Likewise, the refusal to answer questions or failure to reply truthfully may give rise to a charge of contempt of the House, whether the witness has been sworn in or not.
We are not a court of law, Mr. Chairman, and if we're going to go that route, which is to have people take oaths—because you're then invoking perjury—you'll have an ultimate question that this committee has never dealt with, which perhaps we'll have to, and that is, whether or not we'll be providing counsel to our witnesses. We're entering into another area of the law here. It's no longer contempt of Parliament. We're talking about the Criminal Code.
The normal behaviour is that we trust our witnesses to speak openly and truthfully, unless there's any evidence to the contrary, and in this case and in the case of all our witnesses today, none is known, and moreover, none has been offered. So in the spirit of natural justice and common courtesy, I think to proceed as usual—that is, not to swear in witnesses—would be the appropriate thing for this committee to do.
3:35 p.m.
Conservative
The Chair Conservative Merv Tweed
Can I ask, then, Monsieur Bélanger, if what you're proposing is that we rescind the motion of the subcommittee?
3:35 p.m.
Liberal
Mauril Bélanger Liberal Ottawa—Vanier, ON
I don't believe, Mr. Chairman, that the full committee adopted that in public—
3:35 p.m.
Conservative
3:35 p.m.
Bloc
Mario Laframboise Bloc Argenteuil—Papineau—Mirabel, QC
I do not want us to waste any time. I want us to spend all our time in discussions. I have the feeling that the Liberals want to make some statements or delay today's discussions. I have no intention of unduly delaying our discussions.
3:35 p.m.
Conservative
The Chair Conservative Merv Tweed
All right. Well, then, if it's the agreement of the committee, we'll proceed.
3:35 p.m.
Conservative
3:35 p.m.
Conservative
3:35 p.m.
Liberal
3:35 p.m.
Conservative
The Chair Conservative Merv Tweed
Okay, the motion is that we proceed in the normal fashion.
(Motion agreed to)
3:35 p.m.
Conservative
The Chair Conservative Merv Tweed
Now, going back to our witnesses, thank you for your patience. I don't know if you have an order in which you'd like to start, but you have about a seven-minute presentation and then we'll go to the questioning.
Ms. Howell, go ahead, please.
3:35 p.m.
Gwyneth Howell Executive Director, Canadian International Mail Association
Thank you, Mr. Chairman.
My name is Gwyneth Howell and I'm the executive director of the Canadian International Mail Association, CIMA. I'm joined here today by my colleague and CIMA member Mr. Gordon Taschuk, from British Columbia, and by Mr. Evan Zelikovitz, CIMA's public affairs consultant.
On behalf of CIMA I want to thank the chairman and committee members for inviting us here today to discuss this very urgent and time-sensitive matter. At stake is the imminent collapse and elimination of an industry more than 20 years old, made up of hundreds of small businesses and thousands of jobs from across the country, as a result of Canada Post's efforts to expand--not maintain, but expand--its exclusive privilege to include the delivery of mail to any destination outside of Canada.
CIMA is a coalition of Canadian companies that participates within Canada's international mail services industry in preparing, designing, translating, sorting, printing, and delivering letter mail--mail weighing 500 grams or less--to destinations outside of Canada.
Mr. Chairman, the international mail industry is not well known, but its participants are. This industry significantly contributes to the Canadian economy, resulting in hundreds of millions of dollars in economic activity. Many Canadian businesses are involved in preparing and delivering international mail, businesses such as Mr. Taschuk's firm, Kirk Integrated Marketing, which specializes in mail preparation services. Literally hundreds of other printers, lettershops, mail houses, direct marketers, envelope manufacturers, transportation companies, and international mail delivery companies--and thousands of jobs--are threatened by Canada Post's efforts to shut down this industry.
Mr. Chairman, after more than 20 years of accepting the existence of private international mailers, three years ago Canada Post brought an application before the Ontario Superior Court of Justice seeking a narrow interpretation of the exclusive privilege provisions of the Canada Post Corporation Act, claiming that Canada Post is the only entity that can deliver mail within Canada and to destinations outside of Canada. In legally interpreting the words of the statute, the court ruled in favour of Canada Post and exercised its discretion to ignore all issues relating to public policy and Canada Post's historical behaviour.
Mr. Chairman, while we respect the role of the courts, it's for the members of this committee of the House to rule on what the act intended to do. Respectfully, we find it hard to believe that parliamentarians meant to kill Canadian jobs, the very same jobs that Canada Post allowed and acknowledged for over 20 years. This is really about public policy, competition, and fairness. CIMA and its members have been having this discussion for over a year and a half now with government and industry stakeholders, and we have been overwhelmed by the unequivocal support we have received from the vast majority of your parliamentary colleagues across all parties, including Minister Cannon and the Prime Minister's Office, and from numerous national and regional business groups representing a variety of industries right across the country.
We have had this strong non-partisan support now for several months, yet still await government action to fix this injustice. The market that we have worked so hard to develop and grow in Canada is about to be taken from us, forcing hundreds of Canadian businesses to reduce or shut down their operations, or move their businesses out of Canada completely, to other countries that allow such private competition.
Who will benefit after our industry is shut down? Ironically, it will not be Canada Post. Presently, Canada Post's international rates are, for the most part, simply not competitive for many foreign destinations. I would note that Canada Post has recently been offering some very competitive international rates in certain parts of the country. That's fine with us; it's called competition, and we welcome that.
But, Mr. Chairman, it's not just about rates; our customers come to us because we have an expertise beyond mailing. If our customers lose their conduit to mail their international pieces, most will leave Canada and take their business with them--to a U.S. printer, a British lettershop, or another international mail company. They won't take their business to Canada Post, although some, Mr. Chairman, will be forced to, like the numerous federal government departments who, ironically, have been using our private international mail services for years. As well, in the course of shutting us down, Canada Post will also lose the revenue they presently receive from us; one of our members has indicated that it alone gives approximately $5 million to $10 million in inbound revenues a year to Canada Post, and that's just one company. We all do business with Canada Post.
Mr. Chairman, Canada Post has been well aware of this industry for quite some time. It has for years acknowledged and legitimized our right to operate. In a 1988 internal Canada Post publication entitled Manager, Canada Post specifically stated, and I quote: “Outbound mail is not protected by exclusive privilege.” I don't think this statement could be any clearer. I repeat: “Outbound mail is not protected by exclusive privilege.” It was this type of information that the courts chose to ignore.
Four years later the 1992-93 Canada Post annual report stated: “Some outbound mail business lost to crossborder mailers over time has been regained in many market segments--government, finance, education and others.”
Mr. Chairman, there was no mention of illegality or a contravention of the act, but rather a public recognition that Canada Post was making headway in competing for this business. These examples point to a serious inconsistency in Canada Post's position. Even worse, Canada Post is presently acting in a discriminatory manner, arbitrarily choosing when and upon whom it will enforce its new-found exclusive privilege. These mixed signals are causing confusion and concern to hundreds of small businesses now forced to look over their shoulder for fear of possible reprisal from Canada Post.
Mr. Chairman, Mr. Taschuk's firm is but one of many companies looking over their shoulder. This is not the way any business should be forced to operate. The threat is often quite explicit. In a letter dated August, 7, 2006, from Canada Post to the National Association of Major Mail Users, it states:
As you can see, we have acted only in the most egregious of cases. We have not pursued nor investigated instances where, for example, a printer in Canada prints material for an American customer, transports the product across the US-Canada border, pays US taxes and duties, and deposits the items in the USPS mail stream. Given all the other priorities of Canada Post, it is not conceivable that such an investigation would even take place. Notwithstanding this, we would expect our customers to comply with the law.
Mr. Chairman, CIMA members have no idea what to make of this statement. It gives them no confidence regarding the future of their businesses.
Mr. Chairman, CUPW has recently asserted that millions of rural Canadians will be impacted and CUPW jobs will be lost if this industry is allowed to operate. This industry has not in any way resulted in poor or diminished rural mail service. Just look to the last decade and even beyond and you will see that Canada Post has recorded consistent profits all of the time when this industry was operating and growing. For more than two decades we have been operating in this industry and we have never heard claims of job losses by CUPW. Now, all of a sudden they have stepped forward claiming that we are attempting to erode Canada Post's exclusive privilege. We are doing no such thing. We are fighting to maintain the status quo.
Mr. Chairman, the only job losses that are occurring and will continue to occur are from the small businesses that operate in this industry in Canada, not from CUPW. We are not here asking for something new. We don't want any special treatment. We are asking for the ability to maintain our businesses and protect the livelihoods of our employees and maintain a competitive edge for Canada that brings foreign investment into this country. There is plenty of room in Canada for both private companies and Canada Post to compete in this market, as is the case in most other countries around the world, and which has been the case here for over 20 years.
Mr. Chairman, we have been waiting patiently for a resolution for several months, especially following Minister Cannon's statement in the House on October 26, 2006, that he would be coming forward in a few weeks with substantive steps to deal with this issue with changes that will be supported by an overwhelming majority of parliamentarians from all parties. To this end, we respectfully urge this committee to exercise its authority to prepare a report and bring a motion before the House as quickly as possible recommending the expeditious introduction of changes that will correct this injustice and allow us to go about our business just as we have for over two decades.
Mr. Chairman, let Canadian businesses compete in the international markets and let everyone win by keeping the jobs here in Canada instead of Canada Post chasing them away.
We want to thank you for the opportunity to appear before this committee, and we would be happy to answer any questions that you might have.
3:45 p.m.
Conservative
3:45 p.m.
Deborah Bourque National President, Canadian Union of Postal Workers
Thank you.
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 rural and urban communities from coast to coast to coast. A majority of our members work for Canada Post.
I'd like to begin by saying that I'm very pleased that you've asked me to talk about both international remail and rural mail delivery, because they are connected, although not complementary, concerns. As you know, the federal government has directed Canada Post to maintain and restore rural delivery while respecting all applicable laws, such as the health and safety provisions of the Canada Labour Code. While we have some concerns about implementation, we applaud the basic thrust of this directive, as well as Mr. Lui Temelkovski's motion directing Canada Post to maintain rural delivery and protect public safety, which was passed unanimously by Parliament in October.
The directive on rural mail delivery is a good decision, but one that could be completely undermined by the government's latest decision to review and possibly legislate an end to the problems facing international mailers. First, I'd like to provide you with my understanding of those problems.
International mailers, or remailers, claim that Canada Post is attempting to expand its exclusive privilege and undermine small-business people who handle international mail, even though many remailers are actually very big businesses, and some are working with large postal administrations.
Remailers in Canada collect and ship mail to other countries, usually developing countries, where the mail is processed and remailed at a lower cost. This lower cost is the result of a two-tier international mail system that is designed, in part, to address the differences between developed and developing countries. Remailers collect and ship this mail, but Canada Post has the exclusive privilege of collecting, transmitting, and delivering letters in Canada. So this is the basic problem facing remailers.
After a number of years of trying to find a solution to this problem, Canada Post took legal action against remailers and won. Some remailers were given six months to get out of the business. That's when the Canadian International Mail Association, a coalition of private Canadian and international mail companies, started lobbying members of Parliament. This lobby coincided nicely with the last election period, which the association used to demand a parliamentary review of the exclusive privilege provisions of the Canada Post Corporation Act. It took them about a year, but it looks like the association has convinced the government to review the exclusive privilege.
In December, Minister Lawrence Cannon told Parliament that he would review the problems faced by international mailers and examine legislative options. We believe that the government may undermine Canada Post's ability to provide universal postal service, particularly in rural and remote parts of the country, if it decides to satisfy the concerns of international remailers by removing international letters from Canada Post's exclusive privilege to deliver letters.
As you know, Canada Post was provided with an exclusive privilege to collect, transmit, and deliver letters, including international letters, in order to finance the corporation's universal service obligation. When members of Parliament voted unanimously in 1981 to adopt the Canada Post Corporation Act and include an exclusive privilege that would fund the universal service obligation, they were aware that universal service at a uniform rate represented a financial subsidy from urban cities to rural and isolated communities. At that time, it was estimated that the cost of servicing rural and isolated areas was six to 10 times the existing postage rate for a standard letter.
Providing universal service in a large country with a low basic postage rate, among the lowest in the G-8, is difficult at the best of times. The union is extremely concerned that a reduction in the exclusive privilege would threaten revenues and ultimately threaten public postal service and jobs.
Until recently, the government appeared to agree with this assessment. A letter from Minister Cannon's office, dated July 25, 2006 said, and I quote:
The activities of international remailers cost Canada Post millions of dollars each year and erodes the Corporation's ability to maintain a healthy national postal service and provide universal service to all Canadians.
When we discovered that the government appeared to be changing its views, we immediately wrote to say that we hoped their newly announced review would include an impact study of the options being considered and a public release of this study, as well as a full public debate on any proposals in a parliamentary vote.
I would like to be clear that we are opposed to the government's review and possible changes to the exclusive privilege provisions of the Canada Post Corporation Act. This act, which was the result of extensive consultation between parliamentarians, business groups, and postal unions, has not unhinged. There is no groundswell of opposition to the act. There is simply a small but very powerful campaign being conducted by competitors of Canada Post.
Our position is that Canada Post's exclusive privilege has worked well to date and should not be undermined. The exclusive privilege allows the post office to provide everyone, no matter where they live, with an effective and affordable communication and delivery system. This is no small feat in a huge country, with a population spread far and wide. Unfortunately, the government has already decided to conduct a review and consider legislative changes. Therefore it's also our position that it would be foolhardy to conduct a review that considers the exclusive privilege without a full and public examination of this issue, including its impact on the universal service obligation.
At this point I'll turn my remarks to rural mail delivery and safety. As you may know, some of our rural and suburban members deliver mail in some pretty unsafe circumstances. A number have exercised their right to refuse unsafe work under the provisions of the Canada Labour Code. When workers exercise this right, government health and safety officers investigate and render a decision as to whether the work can be done safely or not. When RSMC's cannot safely deliver mail, Canada Post moves delivery to alternate locations--post offices, green boxes, and community mailboxes. Some of these community boxes expose the public to the very same kind of danger our members have been facing.
Unfortunately, the corporation has not always consulted with box owners or local union representatives to develop solutions that would preserve service and ensure safety. However, Canada Post and CUPW are meeting regularly at the national level with a view to solving both safety and delivery problems. The union is attempting to reach an agreement with Canada Post to conduct a national review of 843,000 rural mailboxes.
We want Canada Post, as part of this review, to agree that it needs to work with local residents and CUPW representatives who have first-hand knowledge of the delivery and safety problems within a community. We believe this is the only way Canada Post can actually restore and maintain delivery. We know that problems will continue to crop up if they don't adopt this approach.
CUPW is committed to doing what it takes to conduct a national review, but we believe that this work needs to begin immediately. We have been hoping that the government's directive would help us come to an agreement with Canada Post on the outstanding issues so that we can get on with the job of restoring and maintaining rural mail delivery while keeping those who deliver the mail safe, but we now have serious concerns about the government's commitment to rural mail delivery.
As I said earlier, we believe the government may undermine Canada Post's ability to provide universal postal service, especially rural service, if it decides to satisfy the concerns of international remailers by undermining the very mechanism that allows it to provide this service--the exclusive privilege. We would like to urge the federal government to follow up on its excellent decision to restore rural mail delivery with the complementary decision to maintain the exclusive privilege that funds this delivery.
Thank you very much for listening.
3:50 p.m.
Liberal
Joe Volpe Liberal Eglinton—Lawrence, ON
Thank you very much to all of you for coming to try to shed some light on this issue for us.
I have a couple of colleague who also want to ask questions on international mailers and remailers and delivery to rural communities.
I'd like to ask Ms. Bourque a question that has been raised by Ms. Howell. If the competition has been in the field for 20 years and didn't bother anybody, why are you concerned that there will be a diminution of service now, 20 years later?
