Bill C-14 (Historical)

An Act to amend the Canada Post Corporation Act

This enactment amends the Canada Post Corporation Act to modify the exclusive privilege of the Canada Post Corporation so as to permit letter exporters to collect letters in Canada for transmittal and delivery outside Canada.

Canada Post Corporation Act

[Lawrence Cannon, Conservative, Minister of Transport]

moved that Bill C-14, An Act to amend the Canada Post Corporation Act, be read the second time and referred to a committee.

[Brian Jean, Conservative, Parliamentary Secretary to the Minister of Transport]

Mr. Speaker, this is a government committed to helping Canadian businesses compete internationally.

In Canada we have businesses involved in what is called remailing. Remailing is a business that most hon. members are probably not aware of. Indeed, remailers collect mail destined for international locations from large, commercial mailers. The remailer, or consolidator, then ships the mail outside of Canada to another country, a country with cheaper postal rates, ideally, a country that has been designated as a developing country by the Universal Postal Union.

The Universal Postal Union is an agency of the United Nations. It has been in existence since the late 1800s. Today, it has close to 200 members and deals with postal issues. It does not get involved in domestic postal matters. Its role is to act as a primary forum for cooperation among postal sector players. It actually sets the rules for international mail exchanges and makes recommendations to its members, “To stimulate growth in postal volumes and to improve the quality of service for customers”.

It was the Universal Postal Union that established a single postal territory for the exchange of international mail, which obviously is very necessary. This means that when we are mailing a letter out of the country, we can buy an international stamp to put on that letter.

Canada Post would keep the revenue from that stamp, but it would be a different postal administration delivering that letter. It is that other postal administration that is incurring the bulk of the cost for the delivery of the letter.

Therefore, under the Universal Postal Union system of international exchange of mail, Canada Post would need to compensate the country of delivery. This compensation is called a terminal due.

The Universal Postal Union has classified its member countries as industrialized or developed versus those that are developing. Obviously different countries fit into different categories. This classification affects the rate of terminal due a country is eligible to receive from another country for mail it has received and the rate it is obliged to pay another country for mail that it sent out.

It is a complicated issue, but remailers do not have to pay terminal dues and are therefore able to offer lower rates than Canada Post. The Universal Postal Union also allows remailing. There are other countries that allow remailing. However, Canada does not.

A few years ago Canada Post took a large number of remailers to court. The courts have rightly ruled, in reading the exclusive privilege of Canada Post, that remailing is an infringement upon Canada Post's exclusive jurisdiction. This exclusive privilege was granted to Canada Post through its legislation. This is legislation that was passed in the House of Commons over 20 years ago when the Canada Post Corporation Act was first enacted.

Since the exclusive privilege is set out in the act, the only way to adjust this exclusive privilege is to amend the act. It is only Parliament that can change provisions of the act, and only after public debate and discussion will that change be made.

The government is pleased to have introduced Bill C-14, An Act to amend the Canada Post Corporation Act, and the purpose of this bill is to remove all outgoing international mail from Canada Post's exclusive privilege. This would actually enable remailers to operate in Canada without infringing on Canada Post's exclusive privilege. They would no longer be breaking Canadian law. They would no longer be at risk of a legal challenge.

Although the bill is proposing something broader than just remail, its net effect on Canada Post is not expected to be any different. Indeed, the business model of remailers is to collect large volumes of mail from commercial companies. It is not interested in collecting mail from you, Mr. Speaker, nor I.

They offer Canadian businesses lower postal rates. This actually reduces the cost of those companies. This reduces the cost of their goods or services to Canadians, to consumers, which is ultimately a good thing for Canadians. This results in lower costs to the ultimate consumer of the goods or service.

In fact, there used to be many federal government departments and agencies that used the services of remailers for their mail going overseas. They had shopped around to find the lowest rates so that they could make effective use of taxpayers money.

The proposed legislation is not intended to allow the mail to come back into Canada and that is very clearly a difference that should be re-explained. The addressee of the letter is to be in a foreign country. We are not touching domestic mail. The addressee is to be outside of Canada. Remailers that attempt to send mail back into Canada will still be in contravention of the exclusive privilege of Canada Post after amended.

We are not proposing to let other postal sector players put stamps on their mail while it is in Canada. Some other countries also allow an Extraterritorial Office of Exchange, which is defined by the Universal Postal Union as:

--an office or facility, operated by or in connection with a postal operator, outside its national territory, on the territory of another country. These are offices established by postal operators for commercial purposes to draw business in markets outside their own national territory.

If a stamp is put on a letter while in Canada, it should have a Canada Post approved stamp. If Canada is to allow these ETOE's, or the Extraterritorial Offices of Exchange, there should be a licensing regime associated with it. We are not going there with this proposal. We are not allowing other countries to operate postal outposts in Canada. We want to help Canadian businesses compete internationally and we are attempting to do that with this legislation.

The government has studied the issue. Canada Post has told us that it estimates it is currently foregoing revenues in the amount of $50 million to $80 million a year. This is an estimate based on what it has seen as a trend in its revenue stream since new rules were put in place by the Universal Postal Union in 2001. Canada Post does not know for sure how much business it has been losing to remailers operating illegally in Canada.

On the other hand, the industry itself has made claims of it being millions of dollars to hundreds of millions of dollars. Because the courts have ruled remailing as unlawful, we cannot get data or information from the industry members that can be validated. These are small businesses often, and some large businesses, and usually located in places such as Vancouver, Toronto and Montreal.

Both estimates from Canada Post and from the industry itself are significant. They are also not very close. Some of the difference can be accounted for given that they are based on different premises and, of course, different expectations.

The Canada Post estimate represents the impact on Canada Post itself and is not a measure of the industry. The industry estimate is more of an estimate of economic impact as it includes supporting businesses such as envelope manufacturers and print shops throughout the country, as I mentioned.

Should this legislation get enacted, Canada Post estimates losing another $45 million to $50 million a year, so there are financial implications. Its employees will worry that this is a first step toward privatization. Let us be clear. This government will not privatize Canada Post and there are no plans to do so.

Canada Post is a very large institution. It is one of the largest employers in Canada. It has one of the largest retail networks in Canada. It provides services to Canadians from coast to coast to coast. Some would argue that it is indeed a Canadian icon.

I would argue that in rural communities in my constituency there is no federal institution that is more important to my constituents than Canada Post. That is why this government is taking positive action for Canadians.

There are many issues and challenges facing this corporation. It would be easy to get sidetracked on any number of these issues. We just need to ask the previous members of the Standing Committee on Transport, Infrastructure and Communities. They had some discussions on remailers, as my friend across the way will confirm.

The members tabled motions and amendments to those motions. At the end, they reported back that they wanted time to study the issue. This government has decided that it has done enough studying. The government has decided it is time to take action and positive action will be taken.

The bill itself is targeted to this specific issue. We do not want to get sidetracked in our goal to address this issue. Indeed, we also do not want changes to Canada Post to be widespread. This government is not interested in destroying Canada Post or privatizing it. We are not opening up our domestic mail services.

This is not the first step in the privatization of Canada Post. I have said that three times. I can assure the House that we are sincere on that.

We are enhancing competition in the outbound international mail business to benefit Canadians, to benefit small businesses across this country, and we are going to continue to support Canadian businesses.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, my question will be simple.

The parliamentary secretary is right, as the issue was raised within the Standing Committee on Transportation, Infrastructure and Communities. That committee is responsible for this bill. The Bloc Québécois understood that everyone had also agreed that a public study would be carried out before the bill was introduced. However, the government decided to force the issue once again and to introduce the bill without any public debate. Clearly we can never accept this.

Canada Post's profits last year totalled $49 million. Canada Post told us that, in order to be able to guarantee service everywhere, in all municipalities and to all mailboxes, to guarantee that every Canadian would receive their mail at home, Canada Post needs to have precisely this exclusive privilege.

If Canada Post were to lose $50 million to $80 million, that would put it in a deficit and this would also create problems for those who receive the mail.

When the Parliamentary Secretary to the Minister of Transport, Infrastructure and Communities said he wanted to make it clear that Canada Post would never be privatized, he also said that all citizens would continue to receive their mail. Yet, once Canada Post has finished its review of all mailboxes, 30% of Canadians will no longer receive their mail at home. But that is the Conservative government for you.

Thus, I would like to ask the parliamentary secretary if his final goal is not to completely reduce all home mail delivery.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Mr. Speaker, absolutely not. Nothing could be further from the truth. This government is the only government in recent history that has stood up for rural Canadians and mail delivery across this country. We will continue to do so.

Let us be clear as well that this is business that currently Canada Post has not been receiving and has not received for approximately 30 years, at least the majority of it. Canada Post actually thought that it did not have the exclusive privilege that covered this. Indeed, until recently Canada Post did not even take any court steps to do this. The impact on Canada Post should be small indeed.

I appreciate the member's input because he works very hard on the committee. Certainly, we will have a full and honest debate at committee. We will deal with this and hear from the public and all members.

The key is that this government will continue to support small businesses. We will continue to do what is in the best interests of consumers and in the best interests of Canadians.

[David Christopherson, NDP, Hamilton Centre, ON]

Mr. Speaker, I would ask the parliamentary secretary if he could comment on a letter that came from minister Cannon's office, dated July 25, 2006?

[The Acting Speaker, Conservative, Royal Galipeau]

The member for Hamilton Centre should know that we do not name other members of the House, but only by their titles, especially from a former deputy speaker.

[David Christopherson, NDP, Hamilton Centre, ON]

Touché and I apologize. You are correct, Mr. Speaker. We will keep a running score.

It is a letter from the Minister of Transport, Infrastructure and Communities, dated July 25, 2006 which said:

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.

My question is simple: What has changed?

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Mr. Speaker, it would be to the member's advantage and certainly to the advantage of Canadians if he would take the opportunity to sit in on some of the standing committee meetings when we will be dealing with this particular piece of legislation.

What the letter was referring to was the lost opportunity that Canada Post did not have because Canada Post has not had this business for years. As a result of that, really there is no loss to it on a direct basis, only on a lost opportunity basis.

We are looking at what is best for Canadians, for Canadian consumers, and what is best for Canadian businesses. That is what this government is going to move forward with, what is best for Canadians.

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

Mr. Speaker, I agree with my two colleagues who asked questions. I am very surprised by the rather twisted logic used by the parliamentary secretary to present this issue.

If I understood correctly, at the beginning he said, “This government will not privatize Canada Post”.

And now he is saying that Canada Post did not have the revenue in the first place, so it is not losing anything.

What interests me and people from my region, my riding and throughout Quebec is the fact that more money would perhaps mean more services.

As is currently the case in rural areas, there are safety restrictions for employees and there is a lack of revenue to keep post office boxes close to people in rural areas.

To meet employee safety needs, post office boxes must be further away, and we are racking our brains to find solutions. I must give credit to the Canada Post workers in my area who are doing their best.

But I would like the parliamentary secretary to tell us why more revenues in this case would not be interesting.

The only interesting thing, as with local telephone service, is to deregulate and maybe one day privatize. But I have some serious doubts about that.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Exactly, Mr. Speaker, and that is why some changes are necessary, but this will not affect domestic mail delivery anywhere in Canada. This will not do so. In fact our Prime Minister and indeed the minister have taken very positive steps toward confirming that rural mail will be delivered to rural addresses right across Canada. Indeed, we want to continue to do that and go back to a place where we were before, to continue to provide great service to Canadians with this Canadian icon.

I am from a rural constituency. I can assure the member that nothing is more important to my rural constituents than Canada Post and the delivery of the mail. We will continue to do that and take positive steps to help Canadians.

[Ed Fast, Conservative, Abbotsford, BC]

Mr. Speaker, I want to thank my colleague from Fort McMurray for his intervention and for explaining what this bill really does. I do not believe the Bloc and the NDP actually understand what the proposed legislation does. It actually involves one small clause which states:

The exclusive privilege referred to in subsection 14(1) does not apply to letters intended for delivery to an addressee outside Canada.

This does not in any way affect home delivery within Canada. I think that is pretty clear.

I would like to ask my colleague from Fort McMurray two questions. First, would he agree with me that the remailers are still doing business in Canada as they have done for the last 20 some years? Second, could he explain the context of this legislation and why it is we got to this point? Why is it that only two years ago suddenly Canada Post decided to take this to the courts to assert what had previously not been deemed an exclusive privilege, but today in accordance with that court ruling is deemed to be an exclusive privilege for Canada Post?

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

That was a great question, Mr. Speaker. The member is right. The NDP member who asked the question earlier has not been at the committee as long as I have been there and certainly is unaware of what is taking place with this particular piece of legislation.

Indeed, the member is correct. It will not affect domestic mail at all.

To be clear, I had in my office not six months ago members from an association of remailers who have been in business for anywhere from 15 to 25 years. They have been doing the same business day in and day out. They asked me what they were going to tell their employees when they went home. What were they going to say to them when they could not feed their families?

There are small businesses and employees across the country who get their livelihood from this particular type of business.

The member is correct. Canada Post did not have an issue with this for over 20 years; it was only recently that it did. Indeed, the government's position is that we are going to take the best steps forward to help Canadians, to help small business and to help the Canadian economy. We are doing that. This is one step toward that.

Let me be clear. This is not in any way going to privatize Canada Post. Indeed, it only affects outgoing mail. It does not affect domestic mail.

[The Acting Speaker, Conservative, Royal Galipeau]

Order. It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Notre-Dame-de-Grâce—Lachine, Government appointments; the hon. member for West Nova, Equalization payments; the hon. member for York West, Automobile industry.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Mr. Speaker, I was beginning to wonder whether we were actually going to get to the bill itself. If members do not mind my repeating what the last questioner asked in the debate, it is about a very small element, section 15 of the Canada Post Corporation Act, to be amended by adding the following after subsection (2):

The exclusive privilege referred to in subsection 14(1) does not apply to letters intended for delivery to an addressee outside Canada.

That is all. That is what the bill is about. We have heard for the last 20 some minutes what the bill does not intend to do, which is fine. I do not think that we in this House should be worried about what it is not intended to do, but rather what it is intended to do. From my perspective, as one of those members referred to by the previous speaker on the committee, this amendment to the Canada Post Corporation Act is really intended to protect the jobs of those small businesses that operate within the parameters of the Canada Post Corporation Act as they were interpreted until two years ago. That is all.

We can either agree that the jobs of people who have been engaged in legitimate business and the businesses that have been engaged in a legitimate environment are worthy of consideration and protection, or they are not. The moment we agree that those men and women have been engaged in activity that has been productive for them and their families and for the Canadian economy, then we must take an objective and positive disposition to this bill. Why do I say that?

In order to get a good comprehension of what we are talking about, we have to think in terms of the dimensions of the discussion. It is good to think in terms of dimensions of discussions in dollars and cents.

Canada Post's annual report for 2006 says that despite a strong economy, the letter mail product was essentially flat in 2006. There was no growth as far as Canada Post is concerned, but it is concerned about the competition from the small businesses and the men and women that they employ.

Let us re-examine that context once again. That same report says that consolidated revenues from operations in Canada Post reached $7.3 billion for an increase of 4.6% over the previous year. This is an environment where the letter mail business is flat, so it has increased by 4.6% its revenues which total $7.3 billion according to its consolidated statement.

Is there another number that fits in with that growth? What does a 4.6% increase mean? Again according to the statements in the annual report, it means $320 million of increased revenue. There is $320 million of additional revenue over the previous year in order to carry out its mandate, in order to guarantee the jobs of the men and women in rural Canada and in urban Canada and to deliver the kinds of service that Canada Post is mandated to deliver.

And when it falls short of its mandate, the Government of Canada, as I read the Canada Post Corporation Act, has always stepped in to ensure that any shortfalls would be guaranteed by the Canadian taxpayer, but that is not the case now. We are not talking about that now. We are talking about an increase of $320 million that has brought to complete revenues of $7.3 billion.

I do not think we ought to focus too much on this. It is a fabulous amount of money. It does not equal anything I have ever dreamed of owning. However, $7.3 billion means that, according to Canada Post, it is now one of the biggest employers in the country. In fact, it is proud to say that it was named as one of the top 100 employers in Canada for 2007 in Maclean's magazine. Things would appear to be going not too badly.

What is the competition for a $7.3 billion company that employs 55,000 people?

We heard the parliamentary secretary say a moment ago that the competition is a group of companies that send letter mail, pick it up and send it abroad, outside of Canada. In other words, they are not interfering with the exclusive privilege of sending mail within the country. In other words, they are not interfering with the mandate of providing that network of communication and jobs around the country. They are not interfering with the mandate to hoist the Canadian flag in communities all around the country so that we can see that our federation works. Those companies and those men and women who have been earning their jobs and their money legitimately, according to the parliamentary secretary who was repeating what Canada Post in its best estimates found to be the case, are a $45 million to $55 million competition.

In committee I pressed some of the remailers. I said that surely it cannot be just $45 million to $55 million. They allowed that maybe they might inch up to $60 million, maybe even $70 million. In any case, according to a very quick calculation on a BlackBerry or any computer we would find that $60 million of gross revenue for these small companies, compared to the $7.3 billion, is about .8 of 1%. That is less than 1%. That is the threat. That is the Trojan Horse that people are now beginning to bring forward. That is why I said that we cannot be talking about what the bill is not going to do; we have to talk about what it is intended to do.

What it is intended to do is to save the jobs of those people who are working for those companies that in their total represent less than $60 million compared to the big giant of $7.3 billion. Seven billion dollars and three hundred million dollars is what Canada Post earns.

If we are trying to save the jobs of those men and women, if we think that their value, their dignity, their right to work is at least as good and legitimate as anybody who works for Canada Post, then we do not have any problem with this bill, because Canada Post does not have any problem with the bill.

In fact, Canada Post, in addition to indicating that it grew its income by $320 million, really did say that the net income for the fiscal period ending December 2006 was $119 million. On revenues of $7.3 billion, it netted roughly $120 million. That $120 million net is at least twice the gross value of all those small companies and their employees who will punch the clock or do what they can to go to work every day to raise their families in an environment that is productive, dignified and meritorious of a Canadian dream.

The bill should be doing that and that is what I thought the government wanted to bring across to everybody. That is why this bill is so brief. It just simply says to let these people work. Where are they working, according to the parliamentary secretary? They are not working all over Canada so they can diminish the mandate of Canada Post to deliver a network of communication for all Canadians and to bring them together and bind this country tighter as one unit. No.

According to the parliamentary secretary and to the best estimates of Canada Post, we are talking about people who are engaged in businesses where this opportunity is practicable. In other words, they cannot compete anywhere else. They can only compete in three areas.

It appears that those three areas might be the greater Toronto area, might be metropolitan Montreal and might be greater Vancouver. Those are not three insignificant markets. They are very large and important but they also have the infrastructure required in order to make some of these very small businesses function.

There is no competition anywhere else. There is no competition for rural mail service in small communities where Canada Post might be a significant if not the most significant employer. There is no competition for a standard bearer for our Canadian presence, the point of contact between citizens and government around the country.

For 20-plus years the business has developed. Obviously it has not been such an overwhelming success as to make great inroads into the revenue stream of Canada Post because the revenue stream totalled $7.3 billion last year in an environment where the letter mail business was flat and these companies were not able to generate much more than $50 million.

I look at this again and ask what we should do as responsible parliamentarians. If we are concerned about the jobs of the men and women who work for these small businesses that operate here in Canada. Members will notice that I did not say they had to necessarily be Canadian owned, but that they receive investment and they do employ Canadians. What happens to the jobs of the people who work for these companies? Will they be absorbed by Canada Post, a company that is trying desperately to be as productive, as efficient and as competitive as any other industrial giant? I do not know. How would it do that?

If this business that Canada Post has just realized exists is labour intensive, and it would be labour intensive in places like Toronto, Montreal and Vancouver and non-existent anywhere else, will Canada Post absorb those jobs and create new ones so that we now can say, as responsible legislators, that we are not taking away the opportunity to earn a livelihood and create a future for oneself and one's family, but that in fact we are transferring the possibility from these small entrepreneurs to a state related organization?

If we could do that, that would be fine but, in a competitive environment, Canada Post will not absorb those jobs. It will ask its union members, which is CUPW, to take on any additional work. Does anyone know why? It is because the work represented by those small companies and their dutiful men and women who work every day to earn money to carry on with their livelihood for their families amounts to less than 0.8 of 1% of Canada Post's gross revenues.

Does anyone think for a moment that Canada Post will absorb all of those jobs and create more new jobs for every one of those people so that it can spend more? It will not do that at all. CUPW members will be asked to take on additional work, but not for more money, presumably, because in an efficiency driven environment it could not do that, but to do it for the same money.

What would be accomplished by driving out of business these companies that provide jobs for people's next door neighbours? It will not hurt people who are not from Toronto, Montreal or British Columbia's lower mainland. It will not hurt the member from Thunder Bay and it probably will not even bother the members from Ottawa. It will have an impact on people from the greater Toronto area, the greater Montreal area and the greater Vancouver area, where people are working diligently to make Canada a success.

What will happen? Will those people now be transferred from a job in one company to a Canada Post position? The answer is no. It will not happen.

As members of the House of Commons, our first obligation is to ensure that no legislation goes through the House that damages the potential available to any Canadian and, concomitant with that, the obligation to nurture an environment that gives Canadians that same opportunity.

If that is what will happen, then this legislation is but a very small step in the direction of a positive initiative that should not be apologized for. That is bad English form. We should not add in a preposition and leave it dangling. We should say that it is something that allows a productive activity to flourish in a legitimate environment. That is what this bill would do.

Mr. Speaker, do not let any member in the House confuse the positive aspects, the intentions of this bill, which came out of a committee that considered, deliberated and debated motions and said that we needed to structure legislation that does something positive, such as save jobs, nurture job creators and ensure that the infrastructure that we already have in place and, with all due respect, that is represented by Canada Post, be maintained. The bill took what the committee said and fashioned it in very simple terms, very brief legislation, and said that this was what we had to do.

I urge everybody to support this legislation.

[Joe Comuzzi, Conservative, Thunder Bay—Superior North, ON]

Mr. Speaker, I compliment my colleague across for being so eloquent, as he usually is, on areas that affect all Canadians. He is in his usual good form. He is very succinct and gets right to the point. I could not help but be amazed, Mr. Speaker, that you were paying such rapt attention to the member, which adds to all of us in the chamber respecting your interest in this matter.

When the member talks about the displacement of people from one area, which is the remailers, and obviously some of them have already left Canada, I was not quite sure where he meant they would end up, in what employ, if in the postal business or some place else. I wonder if he would be kind enough, in his normal succinct way, to answer that question.