Evidence of meeting #26 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was service.
A video is available from Parliament.
7:25 p.m.
Liberal
Ramez Ayoub Liberal Thérèse-De Blainville, QC
Thank you for that information.
I would like to hear more about the international aspect. Have other countries had similar experiences? The whole world is digital now. I know Canada is different because of its large expanse and its rural communities, but are there other factors that could have been considered?
7:25 p.m.
President, Task Force on Canada Post Corporation
We found that the realities are very different.
Consider Denmark, for example, which has completely dropped this service and has gone fully digital. Its population occupies a small land area. The country was therefore able to make certain changes, but they cannot be implemented in Canada because of our huge land area and small population, except of course for the 80% of the population that is concentrated along the U.S. border.
7:25 p.m.
Liberal
Ramez Ayoub Liberal Thérèse-De Blainville, QC
Do you wish you had had more time to elaborate or dig deeper to find similar approaches around the world?
7:25 p.m.
President, Task Force on Canada Post Corporation
Based on what was provided to us, and I think we explored the subject thoroughly, there was no reason to recommend one avenue over another. None of the approaches could be applied in the same way because each country has its own specific features.
Consider postal banking, for instance. If that had been proposed under other circumstances and our country had not been recognized for the past eight years as having the best banking system in the world, there would have been other things to consider. In short, this difference was clear to us.
7:25 p.m.
Liberal
Ramez Ayoub Liberal Thérèse-De Blainville, QC
We are talking about a universal service that is essential. After having delved into the matter for four months, what is your opinion of the essential service that Canada Post provides?
7:25 p.m.
President, Task Force on Canada Post Corporation
In our opinion, there should still be an essential service.
Let's imagine how things might be in 2020-25. It will not be the same as it is now; there will be differences.
7:25 p.m.
Liberal
Ramez Ayoub Liberal Thérèse-De Blainville, QC
We have spoken very little about the issues for people with reduced mobility. They are often seniors. Can you elaborate on this?
7:25 p.m.
President, Task Force on Canada Post Corporation
In our view, seniors do not have reduced mobility. Canadians have told us they want door-to-door service in order to address mobility issues. That is included in the options we are presenting to you.
7:30 p.m.
Liberal
Ramez Ayoub Liberal Thérèse-De Blainville, QC
You touched on your dealings will all the stakeholders you consulted. How did it work out in general? Did you have their full cooperation or did you sense some reluctance on their part to share the information you need?
7:30 p.m.
President, Task Force on Canada Post Corporation
On the contrary. Overall, the people who came to see us sometimes presented a report and sometimes we just had a conversation. Some brought us their brief later on, but the information we gathered was very relevant.
7:30 p.m.
President, Task Force on Canada Post Corporation
As to Canada Post, I didn't mention it earlier but I should have.
Mr. Chair, I should have mentioned that we had full collaboration, because the context and the institution are complex.
So that was very important to us. We also met with the four unions.
Absolutely, we had their full cooperation.
7:30 p.m.
Liberal
Ramez Ayoub Liberal Thérèse-De Blainville, QC
In your opinion, are Canadians ready to accept a change in services and approaches as regards Canada Post?
7:30 p.m.
President, Task Force on Canada Post Corporation
Actually, no one likes change too much. However, after we explain how and why, and we do it with the appropriate nuances, we are convinced that Canadians can adapt to these changes.
7:30 p.m.
Conservative
The Chair Conservative Tom Lukiwski
The final three-minute intervention will go to Mademoiselle Trudel.
7:30 p.m.
NDP
Karine Trudel NDP Jonquière, QC
Thank you, Mr. Chair.
A lot of comments have been exchanged around this table and I thank the witnesses for their answers.
Could you give me a little clarification about one aspect in your report? You see labour costs as fixed while economists generally see them as variable.
Could you explain that a little more and tell me why you made the decision to consider those costs fixed? Labour costs are fixed, but in some cases, employees have no vacation and no leave. Those with temporary status do not work all the time and it's the same for part-time letter carriers. Clearly, their salaries are lower. Why did you consider this a fixed cost in your report?
7:30 p.m.
President, Task Force on Canada Post Corporation
As in a lot of labour-intensive businesses, reality takes precedence. Despite all the distinctions that there might be in terms of leave or absences, the fact still remains that, in total, labour costs represent a fixed equivalent of about 70% of Canada Post's total expenses.
Ms. McLaughlin, would you like to perhaps clarify that?
7:30 p.m.
NDP
Karine Trudel NDP Jonquière, QC
We are talking about a deficit over five years. In the first six months of 2016, Canada Post made a profit of $45 million.
Could you clarify that? Why are you projecting a deficit when you are actually making a profit? Is it because taxes are such a big factor?
7:30 p.m.
President, Task Force on Canada Post Corporation
It is like the $90 million amount. It's a long-term projection. We are going to have to wait for the other quarters to see how everything is really going to work out. The fact is that the basic equation that makes costs very high in the business, which is essentially in delivering parcels, cannot be sustainable, shall we say. Even though there was a small profit at the end of the year, our eyes are on this current year, and especially on the next 10 years, once again considering our ability to come up with solutions. Will that be in 2017 or 2018 and what solutions will be found? We are proposing several here, of course, but the government will have to make the decision about them.
7:30 p.m.
Member, Task Force on Canada Post Corporation
Canada Post's main revenue comes from mail and related transactions. In the last 10 years, it has dropped by 33%. In the last five years, the drop has been 20%. If you look at the rate at which the number is increasing, it explains the lack of growth. Mail is Canada Post's main source of revenue. Admail is not significant. It uses a lot of the employees, but it brings in very little.
7:30 p.m.
NDP
Karine Trudel NDP Jonquière, QC
But parcel delivery is expanding. We can see that. We have companies that have to invest.
7:30 p.m.
Member, Task Force on Canada Post Corporation
It is expanding, but we are in a competitive world.
7:30 p.m.
Conservative
The Chair Conservative Tom Lukiwski
Thank you so very much. That ends our official round of interventions.
I use this right very sparingly, but I will invoke the right of the chair to have one follow-up question. It was suggested to me by Mr. Whalen, and I think it's a good suggestion.
If there is any organization in Canada that has done a superlative job of branding themselves, it's the Saskatchewan Roughriders. This has a point to it. Mr. Whalen asked whether there were any opportunities for Canada Post, which is one of our truly iconic federal institutions, to use this well-known brand to its financial advantage.