Mr. Speaker, I am pleased to speak to Bill C-238 put forward by the member for Winnipeg Centre. This bill would delete section 13(5) from the Canada Post Corporation Act and require the Post Office to hire on as full time salaried employees all of the mail contractors whom it now does business with.
Let me first congratulate the NDP member for bringing attention to this issue. As I understand it he is primarily concerned with the rural mail contractors and the treatment they receive in their relationships with Canada Post, although the measure he has proposed would have effect going far beyond just the rural mail couriers. Even though we differ in our prescription for the problems faced by rural mail contractors, we can certainly agree that rural couriers have been subject to some of the most unprofessional business practices at the hands of the government owned monopoly. This needs to stop.
We have been dealing with this issue as a party since before the last election. My colleague the member for Tobique—Mactaquac has discussed this issue with representatives of the Canadian Union of Postal Workers, the Organization of Rural Route Mail Couriers and Canada Post Corporation. Many of my colleagues have also met with the rural route mail couriers in the past year.
As we know, Canada Post became a crown corporation in 1981 by means of the Canada Post Corporation Act. As such its labour practices were no longer governed by the Public Service Staff Relations Act but by the Canada Labour Code, which allows dependent contractors to unionize, something not provided for by the Public Service Staff Relations Act.
Section 13(5) of the Canada Post Corporation Act provided an exemption to section 3(1) of the Canada Labour Code which deems all of the Canada Post mail contractors, including rural route mail couriers, not to be dependent contractors. In 1981 under the guidance of our former postmaster and at that time Progressive Conservative postal critic John Fraser, our caucus voted to support section 13(5) for a number of reasons.
First of all, this provision continued the historical relationship that Canada Post has always had with its mail contractors. Our national mail service has contracted for rural route delivery since before confederation.
Second, it was felt that changing that relationship could potentially increase the operating costs of the corporation substantially with no corresponding improvement in service levels to the public.
According to the Organization of Rural Route Mail Couriers, there are presently 7,000 rural mail contractors in Canada. If we compare the value of the average contract with the cost of a salaried unionized Canada Post letter carrier, there is a difference of between $15,000 to $20,000. That means to convert all 7,000 mail contractors to full time unionized post office employees would cost up to $140 million. Where would the money come from to make this change?
The Post Office could raise stamp prices and the prices for other postal services and the customers would have to pay. But Canada Post is limited to increasing stamp prices at less than the rate of inflation so most of the money would have to come from elsewhere. That elsewhere of course would be the taxpayer. Canada Post would be pushed back into a deficit position and the difference would have to be made up by taxpayers.
What would Canadians get in exchange for shelling out more money for their postal service? Better service? Better or more frequent delivery? No. In exchange for the $140 million, Canadians would see no improvement in postal service. This is not a change my party is prepared to support.
Third, the nature of this change would have removed some of the flexibility for both parties to negotiate an arrangement particularly suited for each individual contractor. For example, under the current arrangement contractors have the ability to subcontract while employees do not.
Finally, this arrangement kept Canada Post on a level footing with many private sector companies which also use private contractors for deliveries.
For all of these reasons our party continues to support section 13(5) of the Canada Post Corporation Act. That is why we cannot support this bill.
Let me however set our opposition to the specific measure proposed by the hon. member. Anyone who has ever done business can tell us that more often than not, Canada Post is big, bureaucratic and bullying. Its guiding principle seems to be squeezing out as much as it can from customers, suppliers and partners.
Two examples come to mind: postal rental retail franchisees and the ad mail program for large volume customers. In both instances, Canada Post arbitrarily introduced large changes that were poorly communicated and very costly to the people with whom it did business. In both cases business partners were not consulted on changes but were instructed that they had to purchase new, expensive and confusing systems if they wanted to continue to do business with Canada Post. In the former case commissions were simultaneously slashed, while in the latter case costs were unilaterally raised.
This sounds a lot like how Canada Post treated rural mail contractors. In many conversations with individual contractors, with representatives from the Organization of Rural Route Mail Couriers, CUPE and some Canada Post employees, we have heard many horror stories about the contracting practices of the post office.
For example, at one point it was common practice that when a delivery contract was up for renewal, a Canada Post employee would phone up a contractor saying that it had received a bid from another source which was thousands of dollars less than what the contractor was currently being paid. Because Canada Post operates a closed bidding system, there was no way for the contractor to verify the claim of the postal representative. The contractor would be faced with the difficult decision to undercut his or her own price by several thousands of dollars or lose the contract. These and other bad faith practices by the post office have led my party into discussions with Canada Post.
As a result of complaints from contractors and others acting on their behalf, the post office has introduced a series of new measures that I hope will alleviate a great number of the difficulties contractors have had in the past. These include the following. Rural routes will be contracted individually. Contractors that in turn subcontract out their routes at a reduced price will be ineligible for renewal. Rural contracts will be issued for five years with a five year renewal option based on satisfactory performance and tendering after 10 years. A negotiated adjustment will be included for the five year renewal option to ensure that market conditions such as inflation are considered. A performance component will be included in the contract renewal and awarding process to recognize the past performance of incumbent contractors. The evaluation of tenders will be based on criteria such as experience, performance, reliability, image and cost.
In addition, when contracts are up for bid, Canada Post will make contractors aware of the specifications of the routes they will be performing, such as the number of points of call, daily kilometres, number of stops for personal contact items and the amount of ad mail they can expect to deliver. These numbers will be updated annually or more frequently if a significant change occurs. Contractors will be compensated for these changes.
The post office has also prepared a handbook to provide assistance and guidance with a reference and a phone directory of key individuals at Canada Post to call when a problem arises. In addition, local supervisors and postmasters will be provided with an operator's handbook and supporting training material to assist them in working with contractors.
Canada Post is currently in discussion with representatives of rural route mail couriers in order to finalize this new package. I am hopeful that both sides will be able to improve on the relationship they have had in the past and will be able to agree on a set of business practices they both can live with. In the meantime we will continue to work with and listen to rural mail couriers to ensure that they are treated fairly and that Canada Post deals with problems that arise in a timely and equitable fashion.