Government Operations Committee on Sept. 21st, 2016

[Yves Robillard, Liberal, Marc-Aurèle-Fortin, QC]

We've been there.

Thank you, Mr. Chair.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll go to Mr. Blaney for seven minutes, please.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Thank you, Mr. Chair.

I want to welcome all of you. A warm welcome also to the people who are with you.

I simply would like to say to you, and it is important to remind everyone of this, that you were the ones responsible for the successes at Canada Post.

I represent a riding that is both rural and urban, and people are satisfied with the service Canada Post provides. I almost never hear complaints at my riding office about Canada Post. People are satisfied with the service they receive. And my riding is quite large.

I realized something when I read the report, and I want to share it with you because I was really surprised. There is a mailbox near my home. For those who live in rural areas, it's at the back of a concession lot. I realized that every Canadian man and woman receives different service from Canada Post, but according to the study, people are satisfied. That's a very positive factor.

I enjoyed one point particularly among all of the comments, one made by Mr. Dubois, perhaps because it was in French and that's easier for me. You said that you did not know, first of all, that there was a problem. You said that it was hard to be part of the solution when you didn't know there was a problem.

In the report, I was struck by one paragraph, on governance. On page 10, there is a passage that reads as follows: “Based on the comprehensive input to the Task Force, this realignment should be undertaken with appropriate consultation and an eventual change of governance.”

I would like to hear your opinion on this, as well as that of any other representative who would like to speak.

With regard to the governance structure, how is the interaction between Canada Post and its workforce?

[Guy Dubois]

I'd like to go back to 2013.

It's like the story of the boy who cried wolf. He cried wolf too often, and at a certain point, no one believed him anymore. The wake-up call finally came at five to midnight, and people were told that there was a small problem with the pension plan. During discussions I had with the employer, I said this: “How is it that none of you came to knock on our door—we had four bargaining units—in order to tell us that we needed to talk and that we had a common problem?” This does not only involve the unions. It also affects management, executives and directors. It also affects all Canada Post employees.

I don't know why that didn't happen, and it is deplorable, but I can tell you that in the history of Canada Post, this is the first time that the four bargaining units are forming a common front to reach an objective. That has never been seen in the history of Canada Post. They are going to form a common front to achieve the same objective, which is to save our pension fund. We have reached this pass, because a financial problem was not raised when it should have been. It should have been raised at the time and now people are reacting, at five minutes to midnight, and radical measures have been imposed.

I don't know if I have answered your question, but the fact that the four bargaining units are forming a common front for the first time in the history of Canada Post says a lot about the situation.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Of course.

[Guy Dubois]

I think that this is important to all of us.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Does anyone else want to comment on the challenge with regard to the governance structure and the relationship? When there's an issue, how do we work together?

Monsieur Paradis.

[François Paradis]

There may be a number of things. Consultation is a huge problem. I can name four or five examples in which the law technically makes it mandatory for an employer to consult with its employees or co-develop certain things.

The way we've been consulted in the past was essentially to be told here's the document, here's the plan. We're there to consult, but then they say, well, unfortunately, we can't really move on this, because we've already sent it to the board of directors; it's already approved by the board of directors, so really we're just letting you know what the plan is. That's considered a consultation. The issue with that is that creates labour relations issues, it creates grievances, it creates legal challenges.

The five-point action plan may be the perfect example of this. We were in bargaining, and the corporation's position was that they were offering a deal, which we really didn't want, and they told us essentially that if we didn't bring this to the membership, they would offer a worse deal; so, under threat. Right after we agreed to bring that final offer to our membership for a vote, they suddenly came out with the five-point action plan. They hadn't consulted with anyone prior to that. We filed some unfair labour practice complaints.

That was also part of their rationale to say that they would never get a special deal from the Government of Canada for the pension plan. Sure enough, right after that happened, with the five-point action plan, they released the temporary pension solvency relief. So we were blindsided by the five-point action plan and we were blindsided by the pension relief. I would say we were more than blindsided, actually; we were misled, because we were told that would never happen.

The public message is always that they work with the stakeholders, but my personal experience has been the complete opposite.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Okay.

Mr. Palecek, we still have one minute.

[Mike Palecek]

I would echo some of the concerns of François around the consultation of Canada Post. They're required legally to consult with us on a number of things, and also contractually. As was stated, it's typically done in a meeting where they simply tell us what will happen, and that's not consultation. At the same time, we're often blindsided by announcements. I believe we were given 11 minutes' notice of the announcement of the five-point plan and the elimination of door-to-door delivery. I thought that was rather inconsiderate. It certainly isn't conducive to good labour relations.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

As I think I mentioned to Ms. Simpson, we were happy to know there was an agreement, so that.... I want to say also that there's the trust: we know that when we put a letter in the mailbox, it will get there. I think this a forgotten asset of Canada Post.

Thank you, Mr. Chair.

[The Chair, Conservative, Tom Lukiwski]

Ms. Trudel, you have the floor and you have seven minutes.

[Karine Trudel, NDP, Jonquière, QC]

Thank you, Mr. Chair.

I thank the witnesses for being with us today.

I have a lot of questions to ask but I want to proceed quickly because I want to hear what you have to say.

My first question is for Mr. Palecek. You may speak afterwards, but I would like you to answer my question first.

Earlier you began to speak about the report. I would like you to tell us more about the elements that are inaccurate according to your studies, and according to what you said. I would like to have more details on that. What should be in that report that is not in it at this time?

[Mike Palecek]

As I said, we'll be providing a full list of all of this as we go through it. Simply in the meantime, there's no critique of Canada's banking system, for example, or the banks. There's no analysis of the payday lender problem in this country. In their polling they didn't ask a basic question. They didn't ask people who live in communities without banks, but with post offices, whether they'd use a postal bank.

There's nothing on Canada Post's financial performance in 2016 and the fact that the corporation reported the highest January to June profits since 2010. The task force mentions that Canada Post has an $8.1-billion solvency deficit, but they don't talk about the going concern increase from $1.2 billion to $1.6 billion, and of course that's averaged over five years. The going concern surplus on the pension plan is actually $2.7 billion for last year alone.

Their use of information is very selective. The unnamed experts they quote from throughout the document need to be named. We need to see the analysis of how they actually came up with this stuff. We need to see the opinion of the experts who gave contrary information, because there were some. We know that they had experts they met with who talked about how postal banking could work very well.

They didn't mention the study we gave to them that indicates that the value of ad mail decreases with centralized delivery and decreases in the eyes of the customers. They tend to mention negative information and leave out positive information. We see this throughout the report.

We'll most certainly be providing the committee with these details at a later date. Our members will be engaging with this throughout the country once the committee goes on the road. You'll have an opportunity to hear from postal workers about all of our submissions in detail.

[Karine Trudel, NDP, Jonquière, QC]

Is there anyone who would like to raise some points that are not in the report?

[Brenda McAuley]

I guess my biggest thing was when they said that Canadians were serviced just fine with banking. We know that's not the case. In Newfoundland, 84% of the communities do not have a bank or credit union. They don't talk about what it's like for those rural Canadians to get to those banks. In one community, actually in Newfoundland and Labrador, in the winter they have to go by skidoo, which takes six hours to get to their bank; in the summer it's about a three-hour boat ride, or a $500 plane trip. That wasn't addressed.

Our stats show that 50% of the communities in Canada, 50% in each province, don't have a bank or credit union. That was really problematic and erroneous from our perspective, and a great concern, especially with the indigenous communities not being fully serviced. Well, 9% of the communities are being serviced, but that's it. I feel that should be part and parcel of the universal service obligation. Every Canadian should have a right to a bank account, and that certainly is not the case. We talked to folks who are 60 years of age and have never had a bank account in their lives.

It was unfortunate, I feel, that the task force committee did not look at our study, because our study was very extensive, and our expert was John Anderson from Anderson Consulting.

[François Paradis]

It's something that will be in the written submission later on, but part of the issue I think is the availability of the data as well. When I received a copy of the task force report I sent in a request to the secretariat for the information, essentially for the polling data and the names of the third-party experts who were consulted. I just received a response maybe half an hour ago, so it makes it very difficult for us, for me anyway, to build a real presentation and consult meaningfully with actual data. If we'd had that data, I think we would have been able to consult in a better way.

It's also concerning to me that when I did receive the response from the secretariat, they named the primary partner, but they also say they've dealt with a bunch of other experts and they don't seem to be naming those experts. The question I had specifically addressed, especially for postal banking, was did you seek experts from the banking industry? I would personally see that as some form of conflict of interest, and I think you'd need to disclose that in the discussion paper. I didn't, again, see that. I didn't see any form of disclosure. I also don't understand why you can't name, on the paper itself, the actual experts who you consulted. The polling data can be pretty large, but I don't know why you wouldn't be able to attach that in the paper to name specifically the experts who you consulted.

The paper itself seems to, in a lot of cases, go in one direction essentially to build justification for an expected result, as opposed to providing what I believe to be an objective or empirical review of the facts so that any individual can have a real discussion about the options in front of us.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll go to Monsieur Drouin for seven minutes, please.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Mr. Chair.

I thank the witnesses for being here with us today. We appreciate it very much.

At the outset I would like to say that personally I do not see unions as an obstacle to a solution, but as part of the solution.

We're talking a lot about postal banking, and this is what I want to focus on for the rest of the time I have.

I have read your document on postal banking, and I agree; I come from a rural area, and I agree that in some communities, especially in the “t-communities”, as I call them, some banks have left. The only thing left is Canada Post.

One of the comments I've read is that a postal bank can be quickly put in place because it already has the infrastructure—I agree—staffing and products and technology, and Canada could do this transition fairly quickly, offering a wide range of financial services. That's where I'm not sure, and I haven't yet made up my mind on what type of financial services Canada Post could potentially offer.

I noticed in your report you quoted a Scotia Bank executive, a VP of retail distribution. To paraphrase, customers do not go into branches much, but when they do, they ask for advice, and when they start asking for advice, that's where the technicalities come in for training. As you know, as soon as you ask for financial advice you have to be a certified financial planner; there are provincial regulations in place.

How did you plan on that? For me, if Canada Post would have access to its potential pool of employees, who are not trained, versus outside employees, who are already trained, who are either coming out of college with a CFP certification or they already have their mutual fund licences.... I think Algonquin College already offers that. I don't want Canada Post or its employees to shoot themselves in the foot when Canada Post could have access to other employees. How did you envision that?

[Jan Simpson, First National Vice-President, Canadian Union of Postal Workers]

Currently, many Canada Post employees at the retail counter do verification of passport applications. We attend the government passport training school in Toronto, for example, for a one-week period. We could also attend the banking training sessions that are offered by the banks and other institutions as you mentioned, Algonquin College and so forth.

For any kind of work we do at the retail counter, we are properly trained and we meet the standards that are required by law. So I think we can do outside training, like we do for passport training. We're also FINTRAC-trained, which is the highest level of security training that is offered for Canada.

[Mike Palecek]

I think if you look around the world at where postal banks have been brought in, this has been dealt with. In Morocco, for example, where they brought in their postal bank six years ago, they established a training centre for those retail members.

At the same time, part of our collective agreement allows us to develop these joint projects with management and figure out how that would roll out. What is needed first is the will on both sides to move ahead so we can figure out the next steps. Canada Post has a very highly trained and educated workforce that has passed security screenings and various things, so we know we can do it. I'm sure we can. It's been done around the world with great success, and we can do it here too.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

I see a role, especially in rural Canada, where there's a lack, but again, it goes back to.... In my communities, caisses populaires are often there, but some of them are leaving, because I believe they just don't see a return on investment.

Yesterday I said that my grandmother still needs a place to go, in her t-community, to access banking services and if she wants to take cash out. I see that, but my grandmother is not going to be here in 20 years, so are we talking about a 20-year cycle or do you guys see this as a longer-term investment, a really long 20- to 40-year investment for postal banking?

Right now my generation doesn't go to banks. We rarely step into the banks. Even banks right now are calling themselves fintech companies. They have institutions, but as you reported, they're closing their banks more and more. There is still a market for that and especially for seniors who may not have the necessary skills to go online and they don't trust online banking, so they'd rather meet somebody in person. I do believe there is a role to play in rural Canada. But do you believe there would be a return on investment for 15, 20, or 30 years?

[Mike Palecek]

That plan would have to be developed, but if you look at the postal banking report, which Canada Post still refuses to release, it talks about using a “clicks and mortar” strategy. They would leverage both online banking and also their existing retail outlets. As people's banking habits change, it would be situated to make those changes with them.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Dubois, did you have something to add on this?

[Guy Dubois]

We aren't talking only about financial services; it goes further than that. Canada Post has the biggest retail network in the country. Other services that are not being offered today could be offered to people to rural areas.

Earlier, we were asked if we saw this as a service or as a business that has to make money. We replied that it was both.

In cities, that is obvious, but in rural areas, there is no money to be made, and there is no point hiding that. Packages that cannot be delivered by UPS and the other shippers are delivered by us. The buildings belong to us and the employees are on site. We are able to provide services, other than financial ones, in order to ensure a presence in rural areas.