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.
Liberal
Vice-President, Government Relations and Policy, Canada Post Corporation
Our estimates are between $40 and $80 million, so it is around that number, yes.
Liberal
John McCallum Liberal Markham—Unionville, ON
Okay. Let's call it 1%, just to round the number.
I'm not quite sure why that 1% is so important, except perhaps that if once you introduce legal certainty into the picture, it could grow substantially. Is it your view that this has the potential to grow substantially and thereby cut into the revenues of Canada Post much more significantly?
Vice-President, Government Relations and Policy, Canada Post Corporation
No, actually, Mr. McCallum. The way we estimated the $40 to $80 million I just referred to was to look at what we thought would be open to a threat from these competitors if the bill as it's presented today were to pass. That's our total estimate of what we believe...and we don't have a lot of information about the other businesses in this market because it is a competitive market, so you can understand that people keep these things fairly close.
In that $40 million to $80 million, the $80 million is what we estimate would be the top end of what would be at risk if this bill were to pass.
Liberal
John McCallum Liberal Markham—Unionville, ON
So you're making certain assumptions about what the impact of this and the legal uncertainty will be in terms of encouraging people to enter the industry. Based on whatever assumptions you make, that's how you come up with that number. So the upper end is not much more than 1% of your revenues.
Vice-President, Government Relations and Policy, Canada Post Corporation
No, it's not.
Liberal
John McCallum Liberal Markham—Unionville, ON
Okay.
Well, Mr. Yussuff, if that is the case, maybe it's not such a big deal. Or perhaps you dispute the estimate?
Secretary-Treasurer, Canadian Labour Congress
I think the answer you are given is that this is what the potential is. I guess the bigger question would be how much business has already been lost.
More importantly, Canada Post has a mandate to provide service to Canadians from coast to coast. As the revenue share diminishes—whether it's 1% or more, I don't know, but at the end of the day we'll give you some numbers we believe to be approximate—the reality is that it's going to have an impact on the corporation and its ability to deliver its universal service. Its universal service is based on the what its revenue base is and how it's able to provide that service.
Liberal
John McCallum Liberal Markham—Unionville, ON
Let me go back to Ms. Margles just to make sure I understand this.
The $40 million to $80 million is the additional revenues that you might lose as a consequence of this bill.
Vice-President, Government Relations and Policy, Canada Post Corporation
Yes, that's our estimate.
Let me just give a bit of precision around that, Mr. McCallum. What I tried to say in my opening remarks is that we acknowledge that it is a small amount and that we do not believe it will affect our ability to deliver on our universal service obligations.
We have many challenges right now in the postal market. We see letter mail declining and we see huge competitiveness in the other parts of our market. We're working every day to address those challenges.
So yes, it's probably not optimal for part of our reserved service area to go away, but we believe very strongly that we're up to that challenge, that not only can we compete for this part of the market, but we can continue to compete in other parts of the postal market, and, as I say, continue to meet our mandate of delivering universal service to Canadians and be financially self-sufficient.
Liberal
John McCallum Liberal Markham—Unionville, ON
Thank you very much.
Now let's go to the subject of the air travellers security charge.
Mr. McKenna, those were very strong words and numbers at the back of your testimony. This is one illustration of why it's unfortunate that we have this omnibus bill and so little time. It would be better if you were at the transport committee, where the expertise resides, but there's nothing we can do about that today.
On my first question, those numbers you presented are quite dramatic: that the air travellers security charge revenue is $762 million, the House appropriation to CATSA is $428 million, and there's a surplus of $333 million. You say that most countries don't even charge the full amount to the customer, but here we have a huge surplus.
Have you spoken to the government or the Department of Transport about this? Would they accept those figures? Can we rely on those figures in regard to a surplus of $333 million or do they contain certain assumptions that others would dispute?
President and Chief Executive Officer, Air Transport Association of Canada
Well, sir, that is part of the problem. We haven't had an Auditor General's report on this subject since 2004-05, so we can only go...and we can't have access to those numbers. We have asked for them many times, from various sources, and we can't have access to them. We can only speculate.
Our speculation, however, is based on real data: data provided by CATSA and by Statistics Canada.
So of course we could be off by a few million dollars; it's possible. But the principle is that this duty, this charge, is way beyond what it should be. That's our main objection.
Liberal
John McCallum Liberal Markham—Unionville, ON
What about the argument that some of the additional revenues will be used to acquire new and expensive machinery such as those new scanners and things of that nature?
Conservative
Liberal
President and Chief Executive Officer, Air Transport Association of Canada
It doesn't quite add up, sir. Of course, they bought 44 scanners and they need more personnel to operate them, but scanners cost $250,000 apiece. I don't think that quite mounts up to $300 million.
Liberal
John McCallum Liberal Markham—Unionville, ON
I think my time is just about up. I'm not really arguing with you. I'm saying that on the surface your numbers are dramatic, and I think you have a very strong case.
I just think it's regrettable that this bill was set up in such a way that we don't have the time or the expertise to subject this to the attention that it really deserves.
Thank you very much.
Conservative
Bloc
Daniel Paillé Bloc Hochelaga, QC
I have a lot of questions on the code of conduct concerning credit cards and debit cards. I have met with people in my constituency on this matter to talk about Visa's monopoly and that of MasterCard. However, without wanting to offend you, madam, you cited a document that we don't have since it is in English only and your presentation was in English only. Consequently, out of respect for my language, I won't ask you any questions.
The same will be true for the Tourism Industry Association of Canada.
However, I'm interested in asking questions about air transport taxes. Furthermore, Mr. McKenna delivered a text in excellent French and we're going to see from his answers that his mastery of French is equally excellent.
Mr. McKenna, on the first page of your document, you ask what the justification is for a 50% increase in charges and, based on the answers you gave Mr. McCallum, you seem to associate the revenue the charges provide to the federal government with the expenditures of the Air Transport Association of Canada.
Without intending any puns, how do you exclusively associate that revenue with those expenditures?
President and Chief Executive Officer, Air Transport Association of Canada
Thank you for asking that question, sir.
When these charges were introduced, we were assured that all the funds collected would be intended exclusively for airport security and that's why we asked those questions.
President and Chief Executive Officer, Air Transport Association of Canada
It was in December 2001.
Bloc
Daniel Paillé Bloc Hochelaga, QC
In other words, the Liberals assured you, to all intents and purposes, that expenses would equal revenue.
President and Chief Executive Officer, Air Transport Association of Canada
I would say the government made that promise to us.
Bloc
Daniel Paillé Bloc Hochelaga, QC
All right. I appreciate that clarification, particularly coming from you.
However, you aren't unaware that the income from all the charges goes into a consolidated fund and that the government uses air transport for a very specific purpose.
Moreover, I believe you emphasize it very well when you say you have no reason to congratulate the government—I would add “Conservative”—because, ultimately, they're the government—and this is what you're really saying—seems to use air transport so it can say it is reinforcing aviation security.
You're showing us that we have enough money to meet that need. Ultimately, you feel you have been taken hostage by the Conservative government, based on the demonstration you've just made to us.
