Government Operations Committee on Sept. 21st, 2016

[Kelly McCauley, Conservative, Edmonton West, AB]

So you will deliver still once a week.

[Susan Margles]

Exactly. Even seasonally, if it's the winter, and it's ice and snow that's a challenge, we will do that for all Canadians.

[Kelly McCauley, Conservative, Edmonton West, AB]

It sounds to me that you just need to communicate it a bit stronger.

[Susan Margles]

Yes, probably earlier and stronger. I think we focused on the people who were being converted, so other Canadians, who cared about those people, didn't necessarily know about it, but that's one of the lessons we learned.

[Kelly McCauley, Conservative, Edmonton West, AB]

It's good to hear, because it came up as a very serious concern from everyone. It's nice that you have a plan. It just sounds like we need to engage people and communicate more clearly that it's available.

Thank you.

[Susan Margles]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Colleagues, this will be our last intervention, a five-minute intervention. I will then excuse our witnesses and reset the table with our new witnesses before us.

I'm not sure exactly who from the government side will be taking this five-minute round.

Monsieur Ayoub, please go ahead.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

I thank you, Mr. Chopra for being here with us again today.

At the outset, I want to clear things up with my colleague across the way.

We are inheriting a problem. You are with us because there is a crisis. We are attempting to solve some issues involving confidence and communication. That has in fact been my impression from the beginning. Everyone has good intentions and shows good will in wanting to maintain Canada Post in the best possible conditions. However, the information was not communicated in the best possible way; we finally received it through the independent report released this summer. That information is very revealing. I think that there is a lot of work to be done to improve communications.

What internal communication efforts were made by Canada Post to explain the problems in the five-point action plan you put in place?

[Deepak Chopra]

Let me start by addressing the question that was raised earlier, by Mr. Whalen, that there is an issue of trust. When you look at the satisfaction numbers that the task force saw in their polling, with over 90% very satisfied or highly satisfied Canadians, I think we take that to heart in more than one way. While there were difficult changes that had to be implemented, and while we had to communicate with Canadians as well as with our employees—and I'll come back to your specific question on employees—we are a learning organization. In the first wave of that change, we learned from our mistakes. In the second wave, we got better. In the third wave, we got better. We would not have gotten the satisfaction numbers from Canadians, regardless of mode of delivery, including those that were converted in the last year, in over 86%. I think this is a data point. It is not the be-all and end-all, but it's an important data point that illustrates that the work we are doing is connecting with Canadians. We are meeting their expectations.

With regard to your question on communicating with our own employees, we had a dedicated team, that both Madam Margles and other senior executives led, making sure our employees understood. We knocked on 45,000 doors of people who were going to be impacted because the community mailbox might be on their—

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Your employees, Mr. Chopra; what kind of discussion did you have with them to inform them of the situation that you needed to implement the five-point plan? I think it was kind of urgent to have that plan in place. The faster the plan was in place, maybe you could have saved a bit more money. You could have been efficient, and still kept some kinds of delivery and efficiency of Canada Post.

[Deepak Chopra]

I think our employees are always part of the suggestions on improving efficiencies and ideas. In fact one of our rural carriers invented a device that has saved us a significant amount of money in rural delivery. We have employees who are constantly giving us ideas.

I think employees are always part of our communication, not just that we have a challenge and we need to change, but also on an ongoing basis with suggestions on efficiencies. They are very much part of that journey and we have regular communication through our publications. Our employees have a very high level of engagement in what we do every day.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

I don't have any doubt about that.

[Deepak Chopra]

They deliver the parcels. They connect with Canadians. They understand that.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

I'm going to hand over the last minute to my colleague Yves.

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

Thank you, Mr. Ayoub.

I thank all of you for being here with us today.

My question is for Mr. Chopra.

You are the chief executive officer of the Canada Post Corporation. May I tell you that many of the citizens I represent here in Ottawa have told me about safety issues with community mailboxes. They discussed these with me during public consultations, and many other comments about this were sent directly to my riding office.

Aside from budget cuts and the reorganization of costs related to the community mailboxes, I would like to know what safety assessment is done regarding the designated locations for these mailboxes, and whether citizens are sufficiently consulted in this process.

[Deepak Chopra]

This was the central foundation for our community mailbox rollout program, because if we don't locate them in the safest location.... We have guidelines that have been in place for over 30 years—distance from intersections, sidewalks, lighting. We've had all these criteria, which were developed in consultation with the municipalities, for over the last three decades. Security and safety of mail, and also mail users, has always been an important part. But we also have a very rigorous customer service process. If there's a concern, Canadians can call our 1-800 number, which is always on the box. Our security department is always looking at the enhancements they can do.

We have been doing this mode of delivery now for well over 30 years. Criminals who will do other criminal things, they look at this no differently. But we always look at the criteria that have been well established, well used. If there are any constituents in your area who have a concern, they can call us directly and we can address those concerns.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, Mr. Chopra.

We will adjourn this portion of the meeting for now.

Mr. Chopra, on behalf of the committee, thank you and your colleagues for being here.

[Deepak Chopra]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

As you stated earlier in your comments, sir, there are 50,000 employees at Canada Post. We're counting on you and your officials to do whatever you can to keep Canada Post as viable as we have known it for the last 100-plus years.

Thank you. You're excused.

We will ask our staff to please reset the table and ask all of those in the audience who are coming forward to the table as witnesses to please do so as quickly as possible and we'll get you started as quickly as possible

Thank you again.

[The Chair, Conservative, Tom Lukiwski]

Thank you, colleagues, thank you, ladies and gentlemen, and thank you, staff, for getting the tables reset as quickly as you have.

This will be our second set of witnesses. We have five organizations before us. I just had a chance to briefly discuss some of the procedures with some of the witnesses. My apologies again for the truncated version of this; because of the votes, we're down to about 75 minutes rather than the full two hours.

Each of you has an opening statement, and I understand that. Normally you would have a 10-minute opening statement, but because of the truncated version here, if you could keep your opening statement to about five minutes I would appreciate it. I'll give you some latitude, obviously, because you'll have to condense what you were originally going to say, but the longer you speak, the less time there is for questions from the members. I'll let you try to police yourselves there, but I do know that many of our members have questions they would like to pose to you.

My understanding as well is that the speaking order will begin with Madam McAuley.

You have five minutes, please.

[Brenda McAuley, National President, Canadian Postmasters and Assistants Association]

Thank you for this opportunity to address the committee.

The issues we are addressing are, by the admission of the president of Canada Post, a lifeline to rural Canada. While we understand the constraints imposed by the business of the House, we will have some difficulty doing justice, in the five minutes that remain, to the needs of rural Canada. We will attempt to do so, but will be happy to address any questions you will certainly have once there are fewer time pressures. Our full submissions have been filed with the committee.

The Canadian Postmasters and Assistants Association has been the voice of rural post office employees since 1902. It is the second-largest bargaining unit at Canada Post, representing members in post offices in towns and villages throughout rural Canada. About 95% of our members are women. We are in touch with over six million rural customers.

We were quite taken aback when one of the options the task force presented was converting 800 of our highest-volume post offices into privatized franchises. This option would be disrespectful of the current government's directives. It's very worrisome for several reasons.

First, the committee's mandate from the Canadian electorate is clear: privatization was not to be considered during the review.

Second, what public company would sell off its largest money-making centres to its competitors? Canada Post has made profits for 19 out of the past 21 years. Just last year it netted almost $100 million in profits. Why would we risk losing this?

Third, our study, “Rural Post Offices and the Communities that rely on them are being abandoned”, conducted by Anderson Consulting, found that there was an over 55% chance a franchise would disappear if that post office were replaced. All that was left for those residents was a collection of boxes at the side of the road. That's hardly vibrant Canadian infrastructure.

Fourth, according to the task force report, Canadians and businesses of all sizes have a positive perception of Canada Post and its services. The vast majority believe mail is highly important, and that Canada will always need postal services owned and operated as a public service.

The current government obtained its mandate while promising opportunities for women in this country. Our membership is 95% women. If Canada Post is weakened in rural Canada, there will be very few meaningful jobs to which women can turn.

In 1994 the Liberal government announced a moratorium on post office closures. Despite the fact that the moratorium is still in place, we have seen over 350 rural post offices close.

If the corporation really wants to keep a post office open, it has the ability to appoint someone by other means, meaning it can choose whoever it wants if there's no available candidate after a competition. The latest example would be in Red Bay, Newfoundland and Labrador. Seven people, including the mayor of the community, failed the interview the corporation had set. The corporation then closed the corporate post office, saying it had completed the staffing process, and couldn't find anyone qualified to work in a post office. It then opened a privatized franchise, and gave it to one of the candidates who failed the interview.

Canada Post wants to give its operations away, and it doesn't care anymore if people realize how inconsistently it is behaving.

[The Chair, Conservative, Tom Lukiwski]

Madam McAuley, you're at five minutes now.

[Brenda McAuley]

Okay. Let me try to wrap it up.

I just want to comment on one thing. It was mentioned that Canadians are served and that they have enough banks. I just wanted to let you know that we did a study. We surveyed 3,260 rural communities, and 1,200 of those communities do not have a bank or a credit union. Of the 615 indigenous communities, only 54 have a bank or a credit union. That is 9%. That is shameful.

In conclusion, we have an opportunity to make the best use of our national public asset. We must ensure we serve the needs of rural, remote, and indigenous communities. We have to recognize both the needs of these communities and the contribution they already make and can continue to make to Canada's economy and its national fabric.

When I started, I referred to Mr. Chopra's comment that Canada Post is a lifeline for rural Canadians. No one who is familiar with the importance of these operations and who cares about rural Canada would disagree. We are imploring the committee not to cut our lifeline.

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Just for the rest of our intervenors, that intervention was about six and a half minutes long. I would encourage you to try to keep it to five minutes, but to be fair, if you go six and a half, what is good for one should be good for all.

Next on my list, I believe, is Monsieur Paradis.

[François Paradis, National President, Union of Postal Communications Employees]

Thank you to the committee for inviting the Union of Postal Communications Employees here today to have a discussion with you. Mr. West of the Public Service Alliance of Canada will be helping me with some questions you may have, if you have questions.

The UPCE is a component of the Public Service Alliance of Canada. We represent roughly 1,600 members at Canada Post and 150 members at Purolator. Our members perform administrative, technical, professional, and clerical work, including customer support for businesses and consumers. They are often the first point of contact for many Canadians who need advice and assistance on their postal services.

My comments today will focus on several aspects of the discussion paper recently released by the task force for the Canada Post Corporation review.

I don't think it will come as a surprise that our overall reaction is one of disappointment. We had hoped to see that the task force would take the public interest as its primary guiding principle in their review. While Canada Post may be called a corporation, the owners or shareholders are the people of Canada, and its service to Canadians must be first and foremost. As stated in the discussion paper, Canada Post has a universal service obligation and a mandate to meet public policy objectives.

A program not mentioned by the task force, and one that should be restored, is the food mail program. The current nutrition north program has been criticized by Canadians living in the north and by the Auditor General. Food prices for families have increased drastically and have become unsustainable.

In 2015 Canadians voted for change. The task force is just offering more of the same at Canada Post: cut services, cut jobs, raise prices, repeat. The task force doesn't mention the outsourcing taking place. In 2010 call centre jobs began to be outsourced to large multinational corporations based in India. While these jobs are still in Canada, there is no guarantee that these jobs will remain here.

Instead of investing in good-paying jobs, Canada Post would rather pay multinational companies that are usually based outside of Canada. All this does is create jobs that are of lesser value locally, are precarious at best, and now pay a significantly lower wage. Outsourcing not only sends profits offshore, it does so at the expense of the stability and the quality of the jobs.

The task force acknowledges that Canadians living in rural locations have expressed real concerns about the effects the closure of their post offices would have on their communities. Their response to the concerns is to either close all of Canada Post's remaining outlets, including those in urban areas, or to convert them into franchises. To realize at least half of the suggested savings, Canada Post would have to convert the 800 highest-yielding offices—in other words, skim the cream from the public entity.

While promoting franchises, the discussion paper doesn't mention the nature of the jobs at these outlets. They're not unionized jobs, so of course they don't come with the usual union baggage—living wages and decent working conditions. We can't help but wonder if this discussion paper is just the beginning of a road that will lead to the eventual privatization of the corporation.

The task force doesn't talk about Canada Post's management structure and the executive compensation practices. The multiple levels of approval required in the management structure for even a simple decision are inefficient and costly, and have a negative impact on the operations to business.

Despite repeated claims that the corporation is going through difficult times, our understanding is that senior executives continue to receive large personal bonuses while the majority of employees continue to receive minimal salary increases.

When we met with the task force, we also suggested that they review the structure of Innovapost and its relationship to the corporation. The discussion paper only mentions that Innovapost is one of the Canada Post group of companies, 98% owned by the corporation. Positions that were originally in Canada Post were moved to a Innovapost back in 2002 at its creation.

We question the value of such an arrangement. The costs of projects involving Innovapost have acted as a barrier to change and innovation. Meanwhile, Innovapost mirrors Canada Post's expensive top-heavy management model. It alone has 11 vice-presidents.

We wonder why it has duplicated Canada Post's executive structure, and we question its value. We believe it will be more cost-effective to return at least a number of Innovapost positions back to Canada Post.

Finally, the Canada Post pension plan has been in the news. Among the options in the discussion paper is a permanent exemption from the solvency funding payments required in the PBSA.

UPCE has already written or asked the government, through Minister Foote, to provide such an exemption.

We believe the solvency funding rules are unnecessary and counterproductive. They were introduced in the 1980s, partly to respond to insolvencies of private sector employers, and the plan currently is better than fully funded on a going-forward basis.

Before ending, I'd like to re-emphasize that we are concerned about the direction taken by the task force. Canada Post isn't just another business. It has a public responsibility. It also has a role to play in providing stable, middle-class employment now and in the future, offering new opportunities for new generations that are better than precarious jobs.

Thank you for the opportunity to share some of our views and concerns. Mr. West and I will be available to answer any questions you might have.