Finance Committee on May 12th, 2010

[Hassan Yussuff]

Well, I guess there's a fundamental question: is Canada Post able to keep its mandate in terms of services across the country and at a reasonable cost where Canadians can continue to have access to them? I don't know how much business they need to lose for us to recognize that. There will have to be some recognition that it will have an impact on the corporation's ability to keep its mandate.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So that's what we should be keeping an eye on? Making sure the service is going to be--

[Hassan Yussuff]

Canada Post has a much broader mandate. We used to have Air Canada having to fly in smaller communities. Once we deregulated, we saw the impact of Air Canada no longer having to provide service to those communities. Those communities are struggling with how they'll get services.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So it's not just about jobs, but about services?

[Hassan Yussuff]

Yes. It's a combination of both.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Thank you.

Thank you, Mr. Chairman.

[The Chair, Conservative, James Rajotte]

Thank you.

Monsieur Généreux, s'il vous plaît.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chairman.

Madam Margles, you seem to be really popular today. It's probably because you're really dynamic, like all the other employees of Canada Post, probably.

I have a question. Has Canada Post's turnover declined over the past four or five years, or has it remained stable?

[Susan Margles]

I didn't understand.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Has the turnover declined over the past five years or has it remained stable?

[Susan Margles]

Our revenues have fallen sharply, particularly last year, as a result of the economic situation.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Have profits followed the same curve?

[Susan Margles]

Yes, they've followed the same curve. If you look at our annual report, you'll see profit of approximately $270 million, but most of that isn't money, but rather an accounting treatment. I can say that revenues declined and that profits declined as well. Canada Post is doing everything in its power to achieve the same profits. We've cut our costs considerably, and we've changed a lot of things in order to be more efficient, and to do so without job losses.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

That's very good. I believe you are very competent and dynamic administrators.

A little earlier, during your presentation, we saw the spark in your eyes when you said you were going to compete with the private sector. You've been doing it now for 25 years, if I understand correctly. Do you have an idea of what Canada Post wants to put in place so that it can retain its market? Do you have an idea of what you are going to do from the moment the act is in force?

[Susan Margles]

First, with regard to costs, I talked about our postal transformation. That will give us various ways to process and deliver mail at lower cost. We'll therefore have a little room to manoeuvre. In addition, we are still studying the various ways in which we can find other revenue, other clients, either by offering them different products through our retail network, or by doing things in the digital field. A lot of people are moving in the communications field.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

During your presentation, you said you weren't afraid of competition. You're going to face it by putting in place the necessary elements you've just spoken about. Will you do that before or after losing $40 million or $80 million?

[Susan Margles]

We're going to do it regardless of what happens to this legislation. We have much bigger challenges than this simple matter of remailing. You always have to have a plan. This isn't just about what we're discussing today. We see changes in our market, like declining letter volumes, strong competition from UPS, FedEx and other companies with which you're familiar.

For a number of years now, we have been preparing plans to ensure we are there, facing the competition and offering our services to Canadians in a self-sufficient manner.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Can we also say that the Internet has become an inevitable competitor?

[Susan Margles]

That's correct.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Dans mon entreprise...for the record, I'm a printer. I'm a businessman. I have 20 employees.

I congratulate you, Mr. Sikora, for being here today and for coming to this committee. I probably wouldn't have done it. I think it's really interesting.

When we look at the competitors that Canada Post must face today, the Internet is one of them. In my business, we now do virtually everything electronically. Consequently, we receive less mail than we used to.

When I met with the Canada Post people to determine how that worked—since there are also certain issues in my constituency—they told me they were going to invest $2 billion in equipment, as you also said a little earlier.

Are you going to take advantage of that equipment or investment to further improve your competitiveness in this specific field?

[Susan Margles]

If you're talking about the electronic field, the answer is yes, absolutely. Part of that investment in equipment and technology will enable us to cut our costs.

[The Chair, Conservative, James Rajotte]

Merci.

We'll now go to Mr. Wallace, please.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chair. I think I'm last.

I appreciate everyone coming today.

Mr. McKenna, just for clarification, can you tell me who your members are?

[John McKenna]

You mean by name?

[Mike Wallace, Conservative, Burlington, ON]

Well, are they in airline cargo? Who are your members? Tell me who your members are.