Government Operations Committee on June 22nd, 2006

[The Chair, Liberal, Diane Marleau]

Thank you, your time is up.

Mr. Albrecht.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Thank you, Madam Chair.

Thank you, Ms. Greene, for being here today.

I live in a rural area. I've watched rural delivery people sit in the middle of that bench seat, drive with one hand, and reach out with the other hand, or they go to the wrong side of the road to deliver mail. I am concerned about the safety aspect and the aspect of ergonomic injury.

I want to follow up on the question Mr. Temelkovski asked in terms of right-hand driving. What kinds of studies have been done in terms of the cost of right-hand-drive vehicles?

I see that we have a profit of $199 million. You said there are roughly 7,000 postal offices across Canada. I'm assuming that probably 5,000 or more of those are rural.

[Moya Greene]

It's 4,000.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

It's 4,000. That's better.

If my math is correct, at a cost of $50,000 per vehicle, which is probably very generous, it would seem to me that in one year we could actually purchase enough right-hand-drive vehicles to offset two concerns: one is delivery on the wrong side of the road, and the other is repetitive stress from reaching across. I know I'm oversimplifying, but that's the first part.

I'll get my second one in quickly, so that you can hopefully respond to both.

Secondly, as Mr. Bonin mentioned, in an area with houses that are getting door-to-door delivery, people in houses adjacent to them go to green boxes. I'm not talking about homes that cost $3 million. I'm talking about homes that cost $200,000, where the density is very evident.

It would seem to me that, after a certain tipping point, criteria would be in place where door-to-door delivery would be implemented. Could you give to us a set of criteria or a range as to when the decision is made by Canada Post to implement door-to-door delivery, opposed to continuing with green boxes year after year in subdivisions that are very large, and quite a lot larger than other areas where there is already door-to-door delivery?

[Moya Greene]

On right-hand-drive vehicles, first I would like to say yes, we are investigating every single option, and we are trying to better understand the ergonomic issues involved. I agree with you, there are definitely some ergonomic issues involved.

Right-hand-drive vehicles do not exist. They are not manufactured. We have gone to several manufacturers to test out if they might even be interested, and because it would be a single purchase, not very many of them are. They are considerably more than $50,000. We have 15-year-old right-hand-drive vehicles. We have about 1,000 of them that are quite old. They're used for some of the urban system. Our urban network is enormous, so if we were to change all of our vehicles to right-hand-drive.... You can't just say, well, if we have to have a right-hand-drive vehicle in rural Canada, we don't need a right-hand-drive vehicle anywhere else. I ask the committee to share the understanding that this is a huge network. There are thousands and thousands of routes. It's a very big logistical exercise.

I am being told that if right-hand-drive vehicles could be procured, if you could find a manufacturer and you were going full bore, the first ones could not come off any assembly line in less than three years, with all of the regulatory issues you'd have to get through. But as a very preliminary, what I would call class Z estimate, just for the rural areas we know about--and I think Mr. Temelkovski is correct that we will certainly, over the course of time, find out about others--you would be talking about a couple of hundred million dollars of capital cost.

But there's another point I need to mention. Right now a significant portion, about 20%, of rural route salaries is attached to the use of a private vehicle. The amount of money rural route people are paid is on the basis of how long it takes for them to do the stops, so if we were going to provide right-hand-drive vehicles, let's say three or four years down the road--

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

Okay, I think you've convinced me you've done some looking into it. I'm glad you're looking into it.

But I really need an answer to the last part of my question. Are there criteria that you could supply the committee that will give us an expectation as to when a certain community might be able to expect door-to-door delivery as opposed to having to continue going to superboxes for 15 to 20 years?

[Moya Greene]

Superboxes are well liked by the people who have them because they are secure and they are conveniently located. We have done studies of new subdivisions to ask whether the superbox figures at all in the decision to buy the house in the area and it does not.

I guess what I would say is we have been using superboxes as a safe, effective, secure, and efficient way to deliver the mail to every new community that has been built up over the past 20 years. I would have to see a study--which I have never seen--that would tell me that we would change that.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

I guess I would ask why we don't all go to superboxes, then, and cut our costs, have a lot less door-to-door delivery?

[The Chair, Liberal, Diane Marleau]

Thank you, Mr. Albrecht.

Mr. Comuzzi.

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

Thank you.

No, stay with your superboxes; I like the letters delivered to my home.

[Harold Albrecht, Conservative, Kitchener—Conestoga, ON]

So do I.

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

Don't be making those radical changes.

Thank you, Madam Chair, for allowing me to come to your meeting today, and it's nice to see you again, Ms. Greene.

We were very pleased to see that you were appointed to your present position. We've followed you, and you're doing remarkably well in the first year of operation, so I compliment you on that.

[Moya Greene]

Thank you very much.

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

I'm here today on something that has some effect on Canada Post, though not a great deal on the amount of business you do. It has to do with the collection of mail and having it delivered to destinations outside of Canada. You have a special name for that.

[A voice]

Remailers.

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

Yes.

And Madam Chair, I had to go to another meeting at 10 o'clock, so if that's been discussed, I won't belabour it.

[The Chair, Liberal, Diane Marleau]

It has not.

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

Let me try to succinctly put in some background. There was a court decision on February 17. Canada Post had asked for a permanent injunction on the particular business doing these particular cross-country mailings, not only in the United States but in all the European countries and so on, as you well know.

The injunction was granted. I don't know how many of these businesses there are in Canada; there are perhaps 50 or 60, and they employ almost 4,000 people. Part of the injunction--the draconian part, I think, of the court ruling--was that they gave these companies six months to cease operations.

We don't think that's policy of Canada Post, inasmuch as you've mentioned the chairperson's length of stay here in Ottawa; I thought you were going to give a rage, but you just stopped short of that.

We spend an inordinate amount of time in Canada, as you well know, trying to create jobs, spending huge amounts of money on retraining people for jobs and so on and so forth. This decision seems to be counterproductive to what we're really trying to accomplish in a policy network within our country.

You don't have to answer this, but I suspect very much that this is one of the areas you inherited when you took over, and it's gone down to the legal decision. As we all know, common sense doesn't always prevail in a legal decision, and I think this is one of those instances. I know this would be of concern to you when you start thinking about all these businesses and these people who will be displaced.

Have you considered any alternatives to that decision? More importantly, the decision was on February 17. They were given six months. We're talking now; we won't meet again until we come back in the fall. It will be active, and we're causing a lot of unrest. Do you have any options you would like to talk about this morning?

Thank you.

[Moya Greene]

Mr. Comuzzi, it's a very interesting question and issue you raise, as usual.

I welcome all competition in our business. I think it's healthy. It's good for us. It drives innovation to see what others are doing in the market, so I really welcome it.

The law as it stands now, though, puts an enormous responsibility on Canada Post that no other competitor has, and that responsibility is to deliver the mail at a reasonable cost to everyone. That's the obligation we have. That's an expensive obligation, and it gets more so every year, with a quarter of a million new addresses being added.

In this case, this is illegal activity. It is clearly illegal. We have six decisions; these companies are really in partnership with foreign posts in the world that have come into the Canadian market and picked up some of our most profitable mail, that being business mail destined for other countries.

We need the profit from that mail. That's the reason we were given the shrinking, shrinking, so-called exclusive privilege. There's not much exclusivity left to the exclusive privilege. That's the reason we were given the exclusive privilege: so that the portion of the market available only for Canada Post would help defray the huge costs of our service obligation.

I understand, and in some ways I feel exactly as you do. It is not good that a behemoth--the sixth largest employer, with a $1 billion-a-year pension responsibility--should be asking that others exit the market, but that's the arrangement the Government of Canada has put in place. Along with other aspects of our business, that is how we pay for the universal obligation we have.

Until we change that, new entrants into some aspects of our market are going to be watched by Canada Post pretty carefully; otherwise, we will have entrants illegally moving into the most profitable segments of the market without having any of the service obligations we have.

[The Chair, Liberal, Diane Marleau]

Thank you, Madam.

Mr. Warkentin.

[Chris Warkentin, Conservative, Peace River, AB]

Thanks, Ms. Greene, for coming in today. We appreciate it.

I do have a couple of questions, actually several questions, so let's see where we get.

With regard to the library book rate, it has been extended on a temporary basis. How long is that extension, and are there plans to make this a permanent establishment? What are your views on it? In a few sentences, if you could.

[Moya Greene]

On the library book rate, I'm very committed to that program. This is part of the commitment of Canada Post, and the rate has been established until 2007. We negotiate with the library associations, as a very important customer of Canada Post, at the expiration of every agreement.

[Chris Warkentin, Conservative, Peace River, AB]

So it's until 2007. Are you already in negotiations for--

[Moya Greene]

I think they're completed until 2007, so there's a rate guarantee in place until 2007.

[Chris Warkentin, Conservative, Peace River, AB]

So now you'd start the negotiations for beyond then. How long would the next negotiations be extended to?