Evidence of meeting #12 for Government Operations and Estimates in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was service.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
Thank you, Madam Chair.
Good morning, Ms. Greene. Thank you so much for coming here.
I will start by asking you, since you have held your job for just over a year, has your perspective changed? If it has, what has changed from what you thought the job would entail, and what is it now?
President and Chief Executive Officer, Canada Post Corporation
It has changed a little bit, because I've had the advantage of seeing it far more closely. For the first six months I didn't actually spend much time in the head office. Not coming from the operation, I decided I'd better get out there and talk to as many of our people as I possibly could, on the night shifts and on the evening shifts of our plants, see as many of our letter carriers as possible in our 1,500 letter carrier depots across the land, look at as many of our retail outlets as I possibly could, and hear from our supervisors, the 2,800 men and women who, 24/7, are there making sure the mail gets out to everybody in Canada every day. That was a great educational experience, to see the company from the ground up. I think that's how you get the real feel for what a logistical piece of work it is. That's number one.
The second thing I've realized more now than when I first began, from my discussions with customers, many of our customers...I'm very pleased to say that Canada Post has probably some of the bluest chip customers in the business list of any company in Canada. Getting out and actually talking to our customers, finding out how they see our services and what alternatives they have, what the competitive alternatives are that we must meet every week, every month in this country, to keep those businesses as our customers, meant that I learned a lot from those conversations.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
Ms. Greene, if you were to choose two or three items that have changed your mind, or you had a vision of something and then after the experience you have had over this year it has become something else, as a product of that new perspective...?
President and Chief Executive Officer, Canada Post Corporation
I don't think I realized how competitive the market is now and how many alternatives there are, how many alternatives can come into the space and pick off very important parts of the value stream in any process and probably leave us, at Canada Post, with a part of the value stream that would be harder for us to pay for. I think I have a new appreciation that the competition is there and it is vigorous. That's number one.
Number two, I learned that engaging every single one of our employees in the future success of the company is probably one of the biggest growth opportunities that this company, like other companies, has.
Those are the two things that really come to mind from those early conversations.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
I think we would all agree that being a crown corporation is different from being a private corporation.
Liberal
Omar Alghabra Liberal Mississauga—Erindale, ON
I'd like you to tell me what you think the major differences are between running a crown corporation and a private corporation.
President and Chief Executive Officer, Canada Post Corporation
Well, I think that depends on whether the crown corporation is a fully commercial crown corporation, first, because I think there are differences between commercial crown corporations and non-commercial ones. In our case, let me start with the commercial crown corporation, because that's the one I'm most familiar with.
The differences between a private sector company and a crown corporation have to do with the dual mandate of the crown corporation. The crown corporation must be commercial and business-like, but it also must keep in mind that there may be some policy reasons for its existence, and there may be things that the crown corporation has to do as a matter of public service and not, strictly speaking, as a matter of business. I don't think that dual mandate is as much a consideration for a strictly private sector company.
I would say, though, in a crown corporation that is fully commercial like this one, that it's perhaps a surprise to some members of the committee to know that I believe that the governance arrangements now in place for commercial crown corporations mean there are virtually no differences. The shareholder, in the case of the commercial crown corporation, is, of course, the Government of Canada, as represented by the government of the day, unlike the shareholder of the private sector company.
In terms of how a commercial crown corporation now operates under the new guidelines and accountability regime for crown corporations, it is very similar. We have a very good business-like board. My appointment probably marks a very important departure. I was recruited under a professional recruitment exercise that was led by the board, as you know. Of course, the appointment was still formally made as a Governor-in-Council appointment, but it was not a Governor-in-Council appointment that was made in the manner that they had previously been made. So I would say, from the governance point of view, we're seeing far more similarity in the cases of commercial crown corporations and private sector corporations.
Matters of operations and matters of business are left to the board and to the management of the crown corporation to run. I think that's a difference that has developed over the years for companies like Canada Post, which are fully commercial.
I think the third difference, though, is this. When the government is the shareholder, you do have to be mindful of the public service dimensions of the mandate. When the government is the shareholder, even if the government has made a decision, as they have in this case to treat that shareholding as a business, there's always a greater danger, I suspect, that matters become politicized very quickly in the case of crown corporations. It's easy for things that are in the nature of operations and the business of the company to wind up on your desk.
So those would be some of the differences and some of the similarities that I would see.
Bloc
Louise Thibault Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
Thank you, Madam Chair. Thank you for being with us this morning, Ms. Greene.
You won't be surprised to hear that my colleague and I are going to focus most of our questions on the mail sortation centre and rural service.
I was very pleased to review Canada Post's annual report. It talks about how you remain competitive and clearly explains that 90 per cent of your business is with other businesses.
If I should address my question to Mr. Feeney, please say so right away.
In this report, six major corporations were selected to describe the organization, if you will, and make it easier for people reading it to understand what you're all about. The result is an extremely user-friendly report. Now, I'm not questioning the motives of yours or any other organization, but it seems to me that these six corporations are receiving some extraordinary publicity from the fact that they are cited in this very important document.
I have to admit I haven't read previous reports. Is this a common practice? Have you always done this? Or is it new? Does this not create certain advantages for some corporations? Are you not creating a showcase for corporations like McDonald's, Best Buy, and so on? Is that common practice at Canada Post?
President and Chief Executive Officer, Canada Post Corporation
Yes, it is perfectly normal for us to pay tribute to our clients.
Bloc
Louise Thibault Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
But why? And how do you choose them?
President and Chief Executive Officer, Canada Post Corporation
In my opinion, it's very important for people reading the annual report to know who Canada Post's clients are.
Bloc
Louise Thibault Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
Since I only have seven minutes, I would ask you to be very brief; I am trying to be equally brief. How did you choose these six corporations? Do you base it on the business you do with them?
President and Chief Executive Officer, Canada Post Corporation
No, not exactly. We wanted to include small, medium-sized and large corporations to emphasize the fact that in order to do business in Canada, you must be able to rely on the services provided by Canada Post.
Bloc
Louise Thibault Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
In the same report, Ms. Greene, there is one section that deals with the pension plan. We had an opportunity to discuss this when we met previously. Companies are realizing--and this applies to all companies--that the more advantageous pension plans are, the more of a burden they represent--even though it is a necessary burden--for the company concerned. People live much longer now; as a result, the burden is far more substantial. This is discussed at the end of the section dealing with the pension plan, and I quote:
Canada Post's long term capacity to make these payments depends on its ability to maintain cost-efficient operations and generate revenues from these operations.
The explanation is relatively user-friendly. But I want to draw a parallel to the closures. In order to meet those goals, do you have a rationalization plan or a strategic plan? You are the Chief Executive Officer and you're facing substantial pension benefit pay-outs. Have you thought that you should be rationalizing your operations or shutting things down? When you decided to shut down the mail sortation centre in Quebec City, you had a plan.
Indeed, since you're still facing the same commitments, is it your intention to close other mail sortation centres? I'm not talking about small offices; I'm talking about large ones where you could realize significant savings. That my first question.
President and Chief Executive Officer, Canada Post Corporation
No, we have no such plan. Such decisions are made naturally, as the situation evolves. We've been making similar decisions for the last 15 years. For example, we consolidated two mail sortation centres in Montreal into a single centre. In Toronto, we consolidated five mail sortation centres and ended up with two. We closed the mail sortation centre in Barrie and the one in St. Catharines, and merged the two mail sortation centres in Edmonton into a single centre. That sort of thing will continue, because our requirements in terms of mail sortation centres 40 years ago were not the same as what they'll be in another 15 years from now, because of changes relating to logistics and transportation. There is no plan in place, but we will make such changes when they are possible, and when we have an opportunity to do so, because of the number of people retiring, for example. Can I rationalize our system without penalizing any employee? If the answer to that question is yes--and that was the case in Quebec City...
Bloc
Louise Thibault Bloc Rimouski-Neigette—Témiscouata—Les Basques, QC
Ms. Green, I believe that you clearly explained that when you appeared before the Standing Committee on Transport. At the time, you addressed three specific points. I believe all my colleagues are aware of your rationale.
You said a little earlier that there would be no job losses. To me, that means that there will be no job losses because you are not dismissing anyone or giving advance notice that any particular employee category is about to disappear. However, let's look at the Quebec City example. When these people retire, I'm sure you agree that there will far fewer jobs in the Quebec City area.
President and Chief Executive Officer, Canada Post Corporation
There will 1,100 employees in the Quebec City region and we will be spending $90 million a year.
Bloc
President and Chief Executive Officer, Canada Post Corporation
In Quebec City, we will also be investing $4 million in the parcel hub. I believe that there will always be very significant investments made in that area. At the same time, some rationalization is in order. We're talking about 300 jobs that will not be lost. People will be paid. At Canada Post, when we give someone a job, it's for life. Also, these employees' pension plan will be indexed for life. I, personally, am proud of that.
These 300 jobs constitute change. That change will occur very slowly, since it will be spread over two and a half years. I don't think that is a highly significant statistic for Quebec City's economy.
Conservative
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
I want to just touch for the first round of questioning on a couple of areas. One is the potential association and/or level of cooperation with Service Canada, something we might look at. Another area I want to touch on--and maybe I'll start with this--is the rural mail delivery.
