Evidence of meeting #19 for Finance in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was business.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

John McKenna  President and Chief Executive Officer, Air Transport Association of Canada
Diane Brisebois  President and Chief Executive Officer, Retail Council of Canada
Terrance Oakey  Vice-President, Federal Government Relations, Retail Council of Canada
David Goldstein  President and Chief Executive Officer, Tourism Industry Association of Canada
Susan Margles  Vice-President, Government Relations and Policy, Canada Post Corporation
Hassan Yussuff  Secretary-Treasurer, Canadian Labour Congress
Bob Elliott  President, Canadian Printing Industries Association
Barry Sikora  General Manager, Classic Impressions Inc., Canadian Printing Industries Association

3:30 p.m.


The Chair Conservative James Rajotte

I call this meeting to order. This is the nineteenth meeting of the Standing Committee on Finance.

I want to thank all our witnesses for being here with us this afternoon. We are continuing our study of Bill C-9, An Act to implement certain provisions of the budget tabled in Parliament on March 4, 2010, pursuant to the order of reference of Monday, April 19, 2010.

We have two hours for this panel. We have six organizations with us here this afternoon: the Air Transport Association of Canada; the Retail Council of Canada; the Tourism Industry Association of Canada; Canada Post Corporation; the Canadian Labour Congress; and the Canadian Printing Industries Association.

Thanks to all of you for coming out today. You each have five minutes for an opening statement. We will proceed in the order listed in terms of organizations, and then we will go to questions from members. We will start with Mr. McKenna.

Are you presenting on behalf of your organization?

3:30 p.m.

John McKenna President and Chief Executive Officer, Air Transport Association of Canada

Yes, I am, sir.

3:30 p.m.


The Chair Conservative James Rajotte

You have five minutes for an opening statement.

3:30 p.m.

President and Chief Executive Officer, Air Transport Association of Canada

John McKenna

Good afternoon, ladies and gentlemen.

My name is John McKenna. I'm president and CEO of the Air Transport Association of Canada. I'm accompanied today by Mike Skrobica, vice-president, industry monetary affairs.

ATAC has represented Canada's commercial air transport industry for over 75 years. We have over 185 members engaged in commercial aviation in Canada, operating in every region, and providing service to a large majority of the more than 700 airports in the country.

We greatly appreciate the opportunity to speak to you today on an important aspect of aviation security, that being its financing through the Air Travellers Security Charge, the ATSC. We have many questions on this issue of security.

Why are Canada's security charges so high compared to those of other countries?

Where is the accountability between the ATSC revenues and CATSA funding?

Why do revenues collected through the ATSC far exceed the amount being spent on security?

What is the justification for a 50% increase in the ATSC? Is the minister simply going to increase CATSA's budget and the ATSC every time a new security loophole is discovered?

Where is the public review of CATSA and its finances that was announced by the Minister of Transport in February?

Canada's security charge was very high even before the latest increase. In 2008, ATAC conducted a survey to rank the 175 security fees charged by governments and airports worldwide. At that time, Canada's security charge was the second highest in the world, second only to the Netherlands.

After the increase announced in February, the Canadian security charge will be the highest in the world, we believe, with the international fee having increased 52%, from $17 to $25.91. In the U.S., the international security charge is $5.

So we ask, why are Canada's security charges so high compared to those of other countries? We do not applaud the government for striving to be number one by increasing a tax that was already yielding a surplus.

We are very concerned by the lack of accountability between the ATSC revenue and CATSA funding. How much money is collected through the ATSC? What percentage of it actually goes to CATSA? Does any of it end up in the general account?

The last report by the Auditor General on the ATSC dates back to 2005-06. Without audited information, we can only speculate as to the revenues generated versus the parliamentary appropriation to CATSA, which we have done. We looked at numbers supplied by CATSA and by Statistics Canada.

Our estimates are based on the 48 million passengers screened by CATSA in 89 Canadian airports during fiscal year 2008-09. The numbers put forth by CATSA concur with Statistics Canada reports of 108 million passengers emplaned or deplaned during calendar year 2008, with some 54 million departing passengers, CATSA's clientele. Statistics Canada indicates that 62.9% of these passengers were on domestic flights, 19.5% on transborder flights, and 17.6% on international flights.

Based on these numbers, it becomes a simple exercise to estimate the revenues generated by the ATSC. The spreadsheet that we handed out suggests that revenues generated by the ATSC well exceed the CATSA appropriation, even before the increase. Based on these calculations, more than $70 million was retained as general revenue by the Government of Canada, and not used to fund CATSA.

Once the increases in the ATSC have been factored in, and considering the budget allocation for CATSA of $1.5 billion over the next five years, the revenues generated by the ATSC will produce an annual surplus of over $330 million.

The ATSC should be used to fund CATSA and CATSA only. It is not an additional source of general revenue for the government, for which it does not have to account. CATSA's budget is entirely financed by the ATSC, whereas in the U.S., air travellers finance only 30% of the Transportation Security Administration's budget.

We fail to understand why a 50% increase in the ATSC is necessary.

Is the appropriation system appropriate for a crown corporation that does not have a stable funding requirement? How can the government establish a five-year appropriation for CATSA when it is so obviously prone to precipitate responses to incidents that lead to additional security measures?

We don't need more layers of security. What we need is more effective and better security.

Is the minister going to simply increase CATSA's budget and the ATSC every time a new security loophole is discovered?

How much security is enough security? How much security can we afford?

Increasing the ATSC is not the answer.

CATSA simply implements additional measures without doing any threat assessment whatsoever. That is done either by the RCMP or by CSIS. How much of the ATSC-generated revenues go to Transport Canada? How much go to the RCMP and to CSIS?

Has the government determined where there's a real security threat to Canada? Are we prepared for it? Is our equipment efficient, sufficient, or outdated?

Are security measures going to continue to accumulate or are the authorities going to dedicate themselves to developing and implementing a more efficient single-step screening process aimed at improving security and reducing the number of screening agents and the time and personnel required to process passengers? Industry sees the current airport security lines as inefficient and a real opportunity for terrorism.

Finally, is Canada able to come up with a way to measure security that reflects our own needs in light of the security threat in Canada?

Our other concern is CATSA's performance.

Has the government determined that CATSA's performance is comparable from an economic point of view to that of other screening agencies worldwide? If so, how did they arrive at this conclusion? Where is the evidence to support this and what parameters were used?

Where's the public review of CATSA and its finances, as announced by the Minister of Transport in February? The customers of our members are footing the security bill and they're entitled to receive this information.

Finally, why did the Minister of Transport announce a tax measure one week in advance of the budget? Does the government really think that the aviation community and travelling public are so gullible that they would not see the obvious ploy to protect the budget's claim of no tax increases?

In closing, let me reiterate that the commercial air transport industry believes in good and efficient security, but not in security at all costs.

Thank you.

3:35 p.m.


The Chair Conservative James Rajotte

Thank you for your presentation.

We'll now go to the Retail Council of Canada.

3:35 p.m.

Diane Brisebois President and Chief Executive Officer, Retail Council of Canada

Thank you, Mr. Chair. It's a privilege to appear before this committee today.

My name is Diane Brisebois. I'm president and CEO of the Retail Council of Canada.

3:35 p.m.

A voice

You have the right to speak in French.

3:35 p.m.

President and Chief Executive Officer, Retail Council of Canada

Diane Brisebois

Yes, I'm going to speak in French and English. Thank you.

I am the president and CEO of the Retail Council of Canada.

I also serve as co-chair of the Payments Accountability Council, which represents over 250,000 merchants across the country.

I'm joined today by my colleague, Terrance Oakey.

He is our vice-president of federal government relations.

Last year, RCC appeared before this committee, calling for some of the very measures that are now included in Bill C-9, the budget implementation act.

I want to begin my remarks by thanking this committee for the leadership you continue to show on this issue. Merchants across Canada are following this issue closely. They commend the minister and the Government of Canada for establishing a card payment regulatory framework, and for equipping the Financial Consumer Agency of Canada with the tools it needs to monitor and enforce compliance with the code of conduct changes, changes that are both contained in Bill C-9.

As you may recall, the Retail Council was criticized in some quarters for calling for a regulatory framework, while other witnesses argued that a voluntary code alone would address this issue of skyrocketing fees.

3:35 p.m.

Terrance Oakey Vice-President, Federal Government Relations, Retail Council of Canada

As retailers, we live every day in an atmosphere of intense competition, and our natural affinity is for less regulation, rather than more.

So why did we call for regulatory authority and for an oversight body on behalf of our merchant community? In short, because the card payment system has not been functioning properly, with the credit card duopoly dictating prices at will to merchants, and with a very clear risk that the same path would be taken with debit cards.

True competition brings lower prices, not higher ones. It is that kind of market that is in the interests of merchants and consumers alike. The government has recognized this in its commitment to regulate the conduct of credit card companies, banks, and processors if they do not adhere to the voluntary code.

3:35 p.m.

President and Chief Executive Officer, Retail Council of Canada

Diane Brisebois

Will we be out of the woods with the passage of Bill C-9? If only it were that straightforward....

I stood at Minister Flaherty's side when he announced the code of conduct, because our members believe the code will go a long way towards providing greater cost certainty. I did so in the full expectation that the code is but the first step and that ultimately regulation will be required.

Retailers have long experience with card company practices, both here and abroad. Already we're seeing some disquieting signs. Some players have been signalling that they intend to delay their acceptance of the code, while others have been pushing merchants to lock in the new contracts before the code takes effect.

More troubling still is that while the government has taken steps to level the playing field and create downward pressure on fees in the debit world, fees in the credit world continue to rise for our members.

One example is the emergence of a new so-called super premium card, which carries fees as high as 3%. With low single-digit profit margins, a 3% fee can take a devastating bite out of merchants' profitability. What we are seeing is a concerted drive by some players to undermine the intent of the code by switching the emphasis over to credit and away from debit.

This was brought home to me recently at the atrium at Toronto's Eaton Centre, in exactly the spot where the Minister of Finance made his announcement less than four weeks ago. Two weeks later, the atrium was taken over by half a dozen peppy salespeople for one of the major banks, along with a dozen instant sign-up screens, all pushing the use of their 2% cashback card.

As you will see from the page we will be circulating later, the pitch is to get people to put daily purchases on their credit cards, items bought at drug stores, grocery stores, and gas stations, all things that people would typically pay for with debit or cash. What is clear is that if the code's new rules on debit cards won't give issuers and card networks the high fees they were hoping for, these actors will steer consumers to use credit cards instead, and they will introduce even more expensive credit products.

From the merchant perspective, the voluntary code will be successful if--and only if--all the players in the card payment system accept the code's underlying principles and do not attempt to sidestep them by other means. We are encouraged by the minister's clear statement that non-compliance will be met with regulation. It would suggest that one very important measure of compliance must be that those who had hoped to drive up fees on debit transactions do not compensate by extracting ever higher amounts from credit transactions.

3:40 p.m.

Vice-President, Federal Government Relations, Retail Council of Canada

Terrance Oakey

We at the Retail Council of Canada also welcome the opportunity to participate in the independent task force to engage in a comprehensive review of the payment system, which the minister announced in budget 2010.

Thank you, Mr. Chair, for the opportunity to address this committee. We're happy to answer any questions you may have.

3:40 p.m.


The Chair Conservative James Rajotte

Thank you for your presentation.

We'll now go to the Tourism Industry Association of Canada.

May 12th, 2010 / 3:40 p.m.

David Goldstein President and Chief Executive Officer, Tourism Industry Association of Canada

Thank you, Mr. Chair, members of the committee, and committee staff.

Again, for the record, I'm David Goldstein, president and CEO of the Tourism Industry Association of Canada. I'm joined this afternoon by Chris Jones, our vice-president of public affairs.

TIAC was formed over 70 years ago and stands today as the only national organization that represents the entire cross-section of the tourism and travel industry, which includes tour operators, accommodations, convention facilities, airport authorities, airlines, and passenger rail.

It is indeed a pleasure for me to be here with you today to examine the provisions of Bill C-9 that relate to the tourism sector, as this is my first standing committee appearance in my new role.

In our brief time today, we want to situate the proposed increase in the air travellers security charge as being incongruent with the federal tourism strategy announced by the Prime Minister on June 4, 2009.

Time does not permit us today to go through the fulsome framework outlined by the Prime Minister. However, this holistic approach was well received by our industry, and we hope that the continued work and consultations done by Minister Moore and his officials will provide important benchmarks over the following months.

Of the four pillars outlined by the Prime Minister, the one key to today's discussion is this: “Facilitating ease of access and movement for travellers, while ensuring the safety and integrity of Canada's borders”. This objective, as read in the context of increasing security fees, correctly implies that Canada's government will do two things: ensure the security of our aviation system, and facilitate ease of access for travellers.

Ensuring security and safety for travel and the general public goes without question. But we respectfully submit that the method chosen to finance our prospective security initiatives is inconsistent with other like jurisdictions. And it is contributing to the erosion of our competitiveness as a nation in the area of tourism, one of the fastest-growing sectors in the global economy.

The vitality of our sector and the ability to compete for a share of international business and leisure arrivals have already been significantly impacted by the plethora of taxes, fees, rents, and user charges the federal government levies on our sector. Last year, the federal government extracted $386 million in ATSC charges alone from travellers using our airports. With increases to our aviation security resulting from the planned introduction of body scanners and other screening technologies, this burden is set to increase.

By way of direct example, the impact of these proposals would increase the fees for a family of four from outside Canada by over $100. In an era of choice, we worry that they will choose to go elsewhere. In an environment of heightened price sensitivity and increased competition, Canada should not be increasing structural barriers. Inbound visitation to many of our key target markets is falling or flat, and our aviation sector is struggling with reduced load factors, lower yields, volatile fuel prices, and higher debt-servicing charges.

In our view, security is akin to policing. We don't levy policing costs solely on an individual shop owner, and in the same way, we shouldn't tax individual travellers. Aviation security is a public good that benefits all Canadians, and its costs should be borne by the national treasury.

Take the United States as a comparison, where a full 63% of the operating costs of the Transportation Security Administration are covered by a direct appropriation from the federal government. In Canada, the passenger fee-based system we rely on exclusively has become a deterrent to travel and visitation in this country. It prevents our sector from growing and making its full potential contribution to the Canadian economy.

In our view, the proposed security fee methodology will work at cross-purposes with the federal tourism strategy, which is built on a solid foundation and specifically stresses the need to look at issues in a holistic way.

Like many of my colleagues who have appeared before you, we believe that aviation security and safety are a critical public good, but which, if we are not careful, could choke off the supply of domestic and foreign travellers that are the lifeblood of the Canadian tourism sector. This is a sector that represents $71 billion to the Canadian economy, over 1.6 million direct and indirect jobs, and tens of thousands of small and medium-sized businesses from coast to coast to coast.

We need, in our view, a new security model that reflects shared collective benefits, that is sustainable in the long term, and that is better aligned with the approach of the TSA.

We thank you for this opportunity to appear. We look forward to your questions.

3:45 p.m.


The Chair Conservative James Rajotte

Thank you very much.

We'll now go to the Canada Post Corporation.

3:45 p.m.

Susan Margles Vice-President, Government Relations and Policy, Canada Post Corporation

Thank you.

Good afternoon. Thank you for the opportunity to address this committee today.

My name is Susan Margles and I am vice-president of government relations and policy at Canada Post. It is my job and the job of my team to ensure that parliamentarians are fully informed about Canada Post and that we maintain a productive relationship.

As the postal administration for this country, Canada Post has a statutory mandate to provide universal postal service to all Canadians, regardless of where they live, and to do so while remaining financially self-sufficient.

Despite considerable challenges, our corporation generated $7.3 billion of revenue in 2009 and has remained profitable for 15 consecutive years. In the past 10 years, Canada Post has paid the Government of Canada almost $400 million in income taxes and another $350 million in dividends.

Last September, the Government of Canada introduced the Canadian Postal Service Charter, which outlines the services Canadians can expect to receive from Canada Post. Canada Post continues to meet our published service standards and provide Canadians with postal service that is reliable and secure.

Traditionally, postal administrations have covered the cost of their service obligations through revenues generated from the reserved service area for letters, as well as revenues derived from competitive services such as parcels and direct marketing.

Section 14 of the Canada Post Corporation Act gives us the sole and exclusive privilege of collecting, transmitting, and delivering letters. Part 15 of Bill C-9 amends this section of the Canada Post Corporation Act and permits others to collect letters in Canada and then send them for delivery outside of this country.

International remailers are countries usually associated with foreign postal administrations. They take large volumes of mail produced and collected from Canadian businesses and ship it abroad to be inducted into foreign postal systems.

Remailers have been increasing their presence in Canada over the last 20 years. In the past, Canada Post has taken the position that international remailers contravene the exclusive privilege given to Canada Post. We have taken legal action against some international remailers and succeeded in court. Injunctions were awarded against two international remailers that would have prevented them from operating in this country.

In 2007 the government introduced legislation that would permit letter exporters or remailers to legally collect letters in Canada and send them for delivery outside of this country. Following the introduction of this legislation, the injunctions we had were stayed until the intentions of Parliament were known. The current injunctions expire in December 2010.

Canada Post's position in terms of part 15 is that, as our shareholder, it is up to the Government of Canada to determine what areas of the postal market to keep reserved for Canada Post or to open up to competition. As our president and CEO, Moya Greene, said recently at the Senate finance committee, if the letter market is open to competitors, Canada Post:

...will vigorously compete for that business. Just because a market is competitive does not mean that Canada Post is out of the game.

In order to remain competitive and deliver on our service commitment, Canada Post is modernizing its infrastructure equipment and technology.

As part of our Postal Transformation Strategy, we will invest more than $2 billion to purchase new equipment and upgrade systems and facilities across the country. Next month, we will open a new state-of-the-art mail processing plant in Winnipeg. This is our first new mail plant in Canada in more than 20 years. We are changing the way we deliver in order to ensure that we can continue to deliver in the future.

These investments and others will ensure that Canada Post is able to maintain its service commitments, compete successfully in the marketplace, and remain financially self-sufficient.

Thank you. I'd be pleased to answer any questions.

3:50 p.m.


The Chair Conservative James Rajotte

Thank you very much for your presentation.

Now we'll hear from the Canadian Labour Congress, please.

3:50 p.m.

Hassan Yussuff Secretary-Treasurer, Canadian Labour Congress

Thank you, Mr. Chair.

On behalf of the Canadian Labour Congress and its 3.2 million members, we want to thank you for giving us the opportunity to appear before the committee on the important public interest issues that are raised in part 15 of Bill C-9.

The CLC represents workers in every province and territory, and in communities big and small. Included in that numbers are the people who work for Canada Post, the members of the Canadian Union of Postal Workers, the Canadian Postmasters and Assistants Association, and the Public Service Alliance's Union of Postal Communications Employees.

We want to state from the outset that we are unequivocally opposed to any legislation that will weaken Canada Post's ability to provide universal, affordable services to Canadians, wherever they live. We believe that maintaining and improving public postal services is what provides the most benefit to the population and to all sectors overall.

Part 15 of Bill C-9 represents an attempt to partially deregulate Canada Post. If it becomes law, it will send a significant signal to the corporate sector that the door has been opened to further postal deregulation, especially given the current government's stand favouring deregulation and privatization of public services.

When Canada Post was granted exclusive privilege to deliver international and domestic mail in 1981, it was because our legislators understood that market forces alone cannot guarantee a reasonable level of service at affordable prices to all Canadians, regardless of where they live or what their economic status is.

The exclusive privilege is a reflection of the principles of equality and common commitment that our society values highly. We believe that all Canadians, no matter where they live in this vast land mass of ours, must be guaranteed access to public services. These principles are why we built an extensive transportation system and created universal public services such as health care, education, and, of course, postal services.

The exclusive privilege is the means by which the post office is able to fund its universal service obligation to serve and link Canadians from coast to coast,to coast. If passed, part 15 of Bill C-9 will have a detrimental impact on Canada's postal services. Canada Post already forgoes revenue to illegally operating international remailers. If the exclusive privilege is eroded, it is very likely that the remailing business will grow and Canada Post will lose more of its international letter business.

Without the revenues that flow from having the exclusive privilege, Canada Post's ability to carry out its universal service obligations will be weakened. Changes will not happen overnight, which is why those in favour of the bill will accuse those of us who oppose it of being alarmist. But the fact is, the causes and conditions will be set in motion for revenue losses leading to service cuts, particularly for those living in rural or isolated communities, and there will be higher postal rates, as well as eventual further deregulation of the post office.

The government and the international remailers say that the bill will change nothing because private companies have been breaking the law and handling international mail for many years. They say the loss in revenue to Canada Post has been in the vicinity of $70 million annually and, compared to Canada Post's overall revenues, this represents a pittance.

These arguments are not very persuasive. To say the least, it is strange for a government to change a law that will have a negative impact on Canadians just because those who are breaking it don't like it and are eager to siphon off even more profits. Don't we count on our governments to enforce our laws?

It is even stranger that the government is attempting to push the legislation through without a thorough review. What's the rush when there's so much at stake?

We do not believe that Canadians want to see the destruction of their postal service. They want a sustainable public post office and reliable, affordable mail delivery. There is no reason to jeopardize a good service that provides good value to Canadians, just because of a desire to satisfy the powerful lobbyists.

We are urging the government to immediately withdraw or sever part 15 of Bill C-9 and reaffirm its support for the exclusive privilege and public ownership of Canada Post.

In closing, I point out that the post office has played an important role in our nation by uniting our vast but sparsely populated territories and regions. From Confederation until recently, the postal service linked together virtually every community in the country. Canada Post's role as an instrument of national unity should not be overlooked or undervalued, especially now, in a globalized world.

The postal service makes important and positive contributions in the enhancement of the cultural, social, and economic life of Canadians. The postal service serves as a lifeline for the charities, service clubs, and non-governmental organizations that add so much to the quality of life of Canadians. Furthermore, the postal service helps to transport the multitude of specialized publications, such as magazines, to help preserve the many cultural identities that comprise our nation.

The postal service also plays a significant economic role.

In a country in which small businesses compete against large multinationals and small communities compete against large urban areas, the postal service acts to equalize communications costs and reduce the disadvantages faced by those working in smaller businesses and in smaller communities.

Also, as an employer, the postal service offers many job opportunities, many of which are in rural areas and are occupied by women. Canada Post is often one of the few potential employers for women in rural communities.

Our public postal service provides universal and affordable services to all Canadians, no matter where they live. As the second largest land mass in the world with one of the smallest population densities, access to a universal and affordable postal service is an important piece of public policy required to maintain a healthy social and economic network within Canada.

It is our role as Canadians to preserve this capacity and to prevent the erosion of service provided to all Canadians, no matter where they live, where they work or do business, or where they communicate and exchange services and goods between themselves.

I want to thank the committee for this opportunity. I look forward to any questions you may have.

3:55 p.m.


The Chair Conservative James Rajotte

Thank you very much for your presentation.

Our final presenter is the Canadian Printing Industries Association.

3:55 p.m.

Bob Elliott President, Canadian Printing Industries Association

Thank you, Mr. Chairman.

Good afternoon. Thank you for inviting us here today.

My name is Bob Elliott. I'm the president of the Canadian Printing Industries Association. I'm here today with Mr. Barry Sikora, general manager of Classic Impressions Inc., a small businessman and member of our British Columbia association who has been involved in the international mail industry for over 30 years.

We've heard the testimony here yesterday and today and wish to respond in part here with our comments.

Mr. Chairman and members of the finance committee, our comments are specific to part 15 of Bill C-9 as well and deal with the one-sentence amendment to the Canada Post Corporation Act that will enable a competitive and long-standing industry made up predominantly of small and medium-sized Canadian businesses, to continue doing what they have been doing for more than 25 years.

This is not about some new industry attempting to just enter the Canadian market. This is not about diminishing Canada Post's domestic exclusive privilege, or its ability to provide universal postal service. This small one-sentence amendment does absolutely nothing more than maintain the status quo of the past 20-plus years.

The Canadian Printing Industries Association represents over 7,200 printing establishments that employ some 65,500 Canadians. Not all printing establishments in Canada participate within the international mail industry in Canada, but a significant number of printing companies are involved in this industry.

The need for this amendment has significant implications for Canadian printers and allied industries that produce a wide variety of products such as advertising material and envelopes and more for Canadian and international customers, and then bulk-ship this material, predominantly to the U.S., or to some other foreign destination.

Canadian printers and remail companies have already seen a significant decrease in business given this industry's uncertainty over the past few years. Without this amendment, these companies stand to lose even more business as their customers will simply take their business to another country. The economic contribution to Canada will be lost. Canada Post will not reap the benefit of that. No one is going to win: not Canada Post, not our small businesses, and not the Canadian economy.

In short, Mr. Chairman, the Canadian printing industry is in full support of part 15 of Bill C-9.

I thank you. I'd like to turn it over to Mr. Sikora.

4 p.m.

Barry Sikora General Manager, Classic Impressions Inc., Canadian Printing Industries Association

Well, it's my first time in Ottawa...no, actually, it's my fourth time here in Ottawa, just about this bill. I had to put on my Sunday-best suit to come and see how you guys are spending our Canadian tax dollars. I'll tell all of them in British Columbia that you're doing fine, because I'm going to give you the truth.

Mr. Chairman and committee members, my company, Classic Impressions, is a small, independent, Canadian-owned and -operated printing and packing company operating in British Columbia. A significant part of our business is the printing of envelopes and letters for letter shops that then prepare these materials for delivery outside Canada.

Before problems began with Canada Post approximately five years ago, my company employed 31 people. We're not a huge corporation; we're an average business in the printing industry. Now, because of this situation, we're down to 17 employees.

Many of our customers have left us, and they have not gone to Canada Post for their foreign mail delivery needs; they have taken their business to another country. They have forced our industry to lay off long-time employees, and that's not a pleasant thing to do.

Along with the lost revenue has come lost economic activity for Canada. The international mail industry in Canada consists of hundreds of small to medium-sized letter shops, mail houses, printers, direct marketers, graphic designers, envelope manufacturers, transport companies, and international mailers that employ thousands of hard-working Canadians and contribute significantly to the Canadian economy.

Contrary to what you heard yesterday from CUPW, this is not just about five or six companies or a few hundred employees. We've been competing openly with Canada Post for more than 25 years. Even Canada Post acknowledged and accepted this industry more than 20 years ago, by stating specifically in 1988: “Outbound mail is not protected by exclusive privilege, which leaves this lucrative business open to a new threat—aggressive competition from international remail companies.” I believe the committee members have been provided with copies of the Canada Post publication. This simply cannot be ignored.

Mr. Chairman, the legitimacy of this industry was also confirmed by the independent CPC strategic review advisory panel's report, which was presented to the government and made public in April 2009. Following extensive public consultation and review, the advisory panel recommended neither a general deregulation of the postal market nor a reduction of the existing level of Canada Post's exclusive privilege.

Yet it still recommended the maintaining of the private international mail market in Canada as the lone exception. Outbound international mail was the only market specifically identified in this manner. Recommendation 10 of the panel's report stated: “The Advisory Panel recommends that outbound international mail be open to competition, as has been the practice (if not the law)...” in Canada.

4 p.m.


The Chair Conservative James Rajotte

You have one minute left.

4 p.m.

General Manager, Classic Impressions Inc., Canadian Printing Industries Association

Barry Sikora

It is important for the committee to understand that during the past 25 years while this industry has operated in Canada, Canada Post has continuously and successfully provided universal postal service. There was no crisis. Our industry has not stopped this important mandate from happening.

Moreover, Canada Post experienced significant profits for 12 consecutive years in the early 1990s and throughout most of the 2000s. While the industry was operating in Canada, and until this matter with Canada Post became public in 2006, this industry did not receive one communication or complaint from CUPE relating to our operations.

Mr. Chairman, how could it have been the intent of Parliament, when it established the Canada Post Corporation Act, to allow small businesses like mine to start up in Canada, employ thousands of Canadians, and invest in the economy with the full knowledge and acceptance of Canada Post, only to have Canada Post come along and tell me, “Thanks, Barry, for building up your business, but you no longer are in business”, hoping to drive all the business to them, which has not happened and will not happen....

This is why the government introduced Bill C-14 in 2007 and then, again, Bill C-44 in June 2009. And now it's part of Bill C-9.

Mr. Chairman, this is really about common sense and fairness. This has nothing to do with the diminishing of an exclusive privilege or the ability to provide universal postal or rural mail services in Canada. It hasn't been about any of these issues in the past two decades while we have been operating, so why, all of a sudden, is this one sentence going to completely disrupt and dismantle our entire postal industry and postal authority?

The reality is that it will not. We welcome the opportunity to continue to compete and operate against the much larger Canada Post. I welcome your questions.

4 p.m.


The Chair Conservative James Rajotte

Thank you very much for your opening statement. We'll go to members' questions.

Mr. McCallum, please.

4 p.m.


John McCallum Liberal Markham—Unionville, ON

Thank you, Mr. Chair.

Thank you to all of our witnesses for being with us this afternoon.

I think I will start with Canada Post.

Ms. Margles, what is the approximate total revenue of Canada Post?

4:05 p.m.

Vice-President, Government Relations and Policy, Canada Post Corporation

Susan Margles

It was $7.3 billion in 2009.