Government Operations Committee on Sept. 26th, 2016

[Andréa Alacchi]

Well, I think the money issue, since you put it that way, is more important for our consumers buying abroad. For sellers, I always put it on my truck and drive it to the U.S. I've been doing so for 15 years. I keep doing it; it's not a problem. As for Europe, we'll set up depots in Europe. We're already planning to send stuff to Amazon FBA, Fulfillment by Amazon. They're all over the place, Europe, the U.S., wherever. We'll build the products in our plant here and we'll ship them there, and then fulfill from there. Whether we lose this nice access to these markets is really quite irrelevant because we're going to set up to avoid that. The Canadian, when he buys, is going to prefer dealing with the foreigner who is getting this cheap entry, especially to remote regions, more than us.

Also, it's a bit of a pity for the poor person who lives in Nunavut or something, where it's very difficult to do e-commerce when they're going to have to ship everything across the U.S. border. It's not going to happen.

E-commerce is a good thing. I can see many Inuit probably wanting to sell their art on websites, and lots of people around the world wanting to buy it.

[Nick Whalen, Liberal, St. John's East, NL]

Thanks, Mr. Alacchi, but are you saying, then, that we should be subsidizing our system the same way the U.S. is subsidizing theirs as an e-commerce infrastructure requirement?

[Andréa Alacchi]

I would say they seem to have been successful with it from the point of view of e-commerce. They're global leaders. If we're going to be their neighbours and we're going to have free trade with them, maybe it's something we should consider.

[Nick Whalen, Liberal, St. John's East, NL]

Let's hear from the rest of the members of the different chambers of commerce and the businessmen's groups.

[Réal Couture]

I'll have a crack at it.

When you say subsidized, from a business point of view it means that you're losing money and you want to do something. When you start doing the math and listening to the comments from our members, especially when they're in the residential mode, people are very well paid. When you are a truck driver for UAP, the average salary in Canada is $22 an hour. That's $44,000 a year. Postmen are probably higher than that. A truck driver for UPS is lower than that.

Let's not kid ourselves. I come from Saint-Michel-des-Saints. That's two hours away from here. The asphalt stops there, and when you send something out there UPS, he'll drop it in the village. He won't go three miles further than that because they won't make their money. They drop it in the village, and that's it. All that to say that, when you subsidize, people have to have the idea that they're subsidizing a good cost structure. I don't know what that means, but it's a good cost structure.

[Nick Whalen, Liberal, St. John's East, NL]

We have a file in French if you want it.

[Michel Limoges]

Can I jump into this discussion?

I would say that it is a matter of being competitive on the world stage. If Canada Post ran a deficit by providing a well-organized national service, I think that companies would develop more and would make more money. If they make more money, they will pay more taxes, which would repay that same deficit. That is probably an avenue to be explored. As Mr. Alacchi said, Canada Post has an infrastructure that must be developed, just like highways and bridges. It is in the financial interests of our industries and of all Canadians to have an efficient system that is competitive internationally.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much for your presence here today. You've added greatly to what we have been doing for the last few weeks. We do appreciate your comments. We do appreciate your observations.

As I said at the outset of this session, should you have any further information you wish to submit to us for the benefit of all of our committee members, please send that directly to our committee clerk. Certainly, if we have more questions of you, and I suspect we might, we'll do the same for you.

We will suspend now for just a few moments, until we get the next set of witnesses to the table.

[The Chair, Conservative, Tom Lukiwski]

We have at the table Steve Ferland, national coordinator of Save Canada Post; Magali Giroux, who is also with Save Canada Post; and Daniel Boyer.

I understand you all have some opening comments. We'll start with Mr. Ferland and Madame Giroux, five minutes, please.

[Steve Ferland, National Coordinator, Save Canada Post, Canadian Union of Postal Workers]

Thank you, Mr. Chair.

First, I would like to extend greetings to the Standing Committee on Government Operations and Estimates.

We must thank the Liberal government for holding a public review of Canada Post so that its future can be discussed and solutions can be found. Instead of useless cutting, deregulation, not to say privatization in disguise, as the task force report seems to favour, we think that it is high time to launch a 21st-century postal service that is prosperous and that meets the needs of Canadians. In order to do this, we are proposing the creation of new sources of revenue such as from banking services and the numerous other avenues we mentioned in the brief we presented last week.

The Save Canada Post campaign represents more than 600 municipalities and regional municipalities that condemn Canada Post's five-point plan. It includes more than a hundred organizations, both Canadian and international, including First Nations, labour federations, retiree associations in various areas, associations of those with reduced mobility, federal and provincial political parties, even chambers of commerce, to name but a few. We have gathered hundreds of thousands of signatures from Canadians on petitions that also condemn the same five-point plan and that have been tabled in the House of Commons on several occasions in the last three years.

In addition, more than 600 municipalities all across the country have adopted another resolution supporting the establishment of a postal bank, as well as the addition of new services for Canadians. Before I give the floor to my colleague Magali Giroux, I would like to take some time to rectify certain information presented in the task force report and which, curiously, Canada Post also mentions.

That information, about the number of Canadians getting home delivery, indicates that 26% get their mail in the lobby of their buildings, 4% get it from a roadside box on their property and 27% get it at home. Those figures total 57%. The figure takes into account the 800,000 households that have been converted to community mailboxes. So more than half the population—not one third, as the task force states—get home delivery of their mail. In our view, receiving one's mail on one's property or in the lobby of one's apartment building is still definitely home delivery.

Thank you. I will now turn the presentation over to Mrs. Giroux.

[Magali Giroux, Coordinator, Save Canada Post, Quebec, Canadian Union of Postal Workers]

Thank you.

As I have very little time, I am going to go right to the point and talk to you about a solution that the task force seems to have discarded, the idea of a postal bank.

Unlike the major banks, a postal bank has a much more social purpose and can reinvest its profits into its communities. The main excuse that the task force used for discarding the idea of a postal bank is that the Canadian banking system is very healthy. It is so healthy that the six major banks made profits of $35 billion last year, in addition to handing over $12 billion in bonuses to their executives.

According to Radio-Canada and Le Devoir, three major Canadian banks—RBC, Scotiabank and CIBC—are widely reported to be among the banks dealing with companies in the Bahamas. Is that what we call a healthy banking system?

The portfolios of the CEOs of the major banks may be very healthy, but the same can unfortunately not be said for the public and the communities. Canadians pay among the highest banking fees on the planet. A million Canadians have no bank accounts, more than two million Canadians have to go to payday lenders like Insta-Chèques, and a number of towns and villages have no banking services. By contrast, post offices are everywhere. There are 6,300 postal counters in the country. By way of comparison, that is twice the number of Tim Hortons.

A postal bank is much more oriented to society and to the community. It could provide a new source of revenue for Canada Post and reinvest part of its profits into communities. In France, the postal bank puts part of its profits back into building social housing. In Italy, the postal bank has chosen to invest in the country's infrastructure and its regions. The postal bank in Canada could support local small businesses, as well as investing in energy-saving transformations through loans or subsidies.

A bank like that could go back to the original mandate of credit unions. Don't forget that credit unions were established to support regional economies, farmers and the working class. Unfortunately, credit unions in Quebec have moved away from their original mandate and we are seeing them disappear from the regions more and more.

Of the $35 billion that the banks made in profits last year, I would like to know how much was reinvested in communities. A societal choice must be made: either we continue to protect the excellent financial health of our major banks and their executives at the expense of Canadians, or we begin to seriously concern ourselves with the financial health of our people and our communities, health that is becoming more and more precarious.

I am asking the parliamentary committee to make public the secret study conducted by Canada Post, in which 700 out of 811 pages were redacted, and have people with no conflict of interest conduct a serious, fully transparent study on the establishment of a postal bank in Canada.

The government asked Ms. Bertrand to study all viable options for Canada Post. Ms. Bertrand is the president of the Fédération des chambres de commerce du Québec, and she sitteth at the right hand of a number of directors and vice-presidents of major banks. The same can be said about Deepak Chopra, the CEO of Canada Post, who is on the board of directors of the Conference Board with the President and CEO of RBC. There is a real conflict of interest there, as I see it. I doubt if any of those people want to talk about a postal bank.

When Canada Post announced the mandate, it said that everything would be studied except privatization. The task force document excludes everything except privatization and deregulation.

A postal bank is only of one a number of services that Canada Post could provide. Post offices could become real focal points, providing services to the community. Canada Post is a public, universal service. That is the perspective from which the crown corporation must be studied, not from the perspective of a private company.

Canada Post is a source of pride for Canadians, and so it must remain.

[The Chair, Conservative, Tom Lukiwski]

Mr. Boyer, the floor is yours. You have five minutes.

[Daniel Boyer, President, Fédération des travailleurs et travailleuses du Québec]

Thank you, Mr. Chair.

Thank you for allowing the Fédération des travailleurs et travailleuses du Québec—the FTQ—to make its case.

The FTQ is the largest trade union in Quebec. We represent 600,000 workers in all economic sectors and regions of Quebec. Its affiliate, the Canadian Union of Postal Workers, represents 10,500 employees at Canada Post. The FTQ supports the efforts of the Canadian Union of Postal Workers to maintain and improve the postal service. We speak for all our members and the people who care about keeping this essential public service.

Although the current government has clearly ruled out the privatization of Canada Post, we find that the options considered and adopted by the working group responsible for reviewing the corporation, taken together would lead to a form of deregulation and privatization of postal services. Unlike the general thrust of the document submitted by the working group, we firmly believe that Canada Post's survival depends on the expansion of its services, as is being done in dozens of other countries.

That is why, overall, we are not satisfied with the working group’s findings, which include: reducing the frequency of mail delivery; replacing home mail delivery with community mailboxes; charging people who want home delivery; charging fees based on the number of kilometres for the letters being sent; changing the moratorium on the closure of post offices; converting post offices into franchises; and reviewing the labour and pension costs. Those are not solutions that we wish to study.

According to a European study, opening up postal administrations to competition has turned out to be a disaster. Proponents of deregulation have dangled the promise of lower prices, better services and new jobs. The reforms have not had the desired effect. Worse still, they have caused job losses, deteriorating working conditions and lower compensation for workers in this sector. Postal deregulation is not in the best interests of either citizens or workers.

We must not forget that, were it not for the one-time events or the lockout in 2011, or the changes to accounting practices in 2013, Canada Post would be in its 22nd year of profitability. So why throw Canada Post in front of uncertain, radical choices?

As for the decrease in the number of letters being sent, the working group suggests ending daily mail delivery. We think this option would weaken public services and make Canada Post less competitive. This would indirectly open the door to privatizing Canada Post. We are therefore asking that the complete and daily delivery be maintained.

In terms of jobs, let me highlight the importance of postal services for employment. All over Canada, there are dozens of thousands of employees working in the postal sector. In its election platform during the last election campaign, the Liberal Party wanted to promote the middle class and quality jobs. Well, middle-class people work for the corporation, and I think they need to be considered. These jobs come with good working conditions and are well paid across Canada.

In Quebec, as I mentioned, 10,500 people are employed at Canada Post. In Canada, there are over 60,000 people. Canada Post's plan was to eliminate positions, but far more cuts seemed to be in sight than announced. In our view, any revision of Canada Post's mandate should not only seek to protect jobs, but also to create more by providing a wider range of services.

Mrs. Giroux mentioned services that could be put forward, such as allowing the Canada Post Corporation to provide banking services. That's the case in 60 countries around the world. We think Canada Post could learn from what is being done elsewhere. It's no secret that rural banking services are shrinking more and more. We believe that Canada Post could play an extremely important role in this area.

As for green economy, the Canadian Union of Postal Workers and a number of other civil society groups have developed a vision of what Canada Post could become in a document entitled “Delivering Community Power: Launching a bold vision for the green transformation of the post office”. The solutions proposed in the document would address the needs of communities, would reduce greenhouse gas emissions and would promote local and regional development. In other words, they are part of truly sustainable development.

The document contains several measures, including expanding home delivery service, which would reduce greenhouse gas emissions; mandating Canada Post with the last portion of parcel delivery, which again would reduce GHG emissions; setting up charging stations where there are post offices; replacing delivery vehicles with electric or hybrid vehicles manufactured in Canada; granting loans to individuals, particularly for activities such as eco-energy retrofits; bringing together consumers—Mrs. Giroux talked about this—and local producers, which would reduce greenhouse gas emissions and stimulate regional economies.

That's what we wanted to share with the members of the committee in the few minutes we had. We hope to be able to share more ideas with you.

We would be pleased to answer any questions you may have.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

On that last point, Mr. Boyer, I will say to you what we've said to all of our witnesses who have come before us. Should you have any additional information that you were not able to impart to this committee, you can certainly make submissions to our clerk, directly, if you feel that there is more information that would be of benefit to all committee members.

Similarly, if committee members have more questions of you, would you permit us to contact you with questions that we may feel were unanswered when you were here?

I'll take those nods as concurrence on that.

We'll now go into our seven-minute round of interventions.

Mr. Ayoub for seven minutes, please.

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

Thank you, Mr. Chair.

My thanks to the witnesses for joining us.

I am a positive person. I think the comments are positive and that we are trying to find solutions. You are in solution mode when you are talking about solutions and a postal bank.

However, I would like to backtrack a little. Canada Post published a five-point action plan, and this is nothing new. Based on all the testimony that we have heard, I have noticed something about the communication, transparency and the way business is conducted between the various entities, be they unions, Canada Post employee representatives or senior management. There is a lack of communication and trust in passing on information about Canada Post's strategic planning.

Has there been any communication since the action plan was published? The Canada Post leaders had a vision in mind, but perhaps not the same as yours.

Mrs. Giroux, what do you think?

[Magali Giroux]

We have been repeatedly hearing that communication is almost non-existent at Canada Post. When we, at the Syndicat des travailleurs et travailleuses des postes, find out something, it is through the media like everyone else.

Some misinformation has circulated since the action plan was announced. One of the major inaccuracies I would like to talk about is the claim that Canada Post is on the verge of financial disaster because of the drop in letter mail. First of all, that's not true. This morning, people clearly presented Canada Post's financial results.

Furthermore, the sending of letters is decreasing not only in Canada but everywhere else. It is important to understand that the Canada Post system is based on the postal carriers' routes, which are constantly changing. For years, letter mail has been gradually dwindling. Postal carriers' routes are regularly reviewed and recalculated based on the drop in letter mail. Over the past years, a number of jobs and routes have been eliminated. Since that issue has been addressed, the problem of letter mail has already been solved. It is as if we wanted to solve this problem a second time.

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

I would like to say something because we've received other information.

You say that positions have been eliminated. Personally, I've heard that Canada Post had a job minimum. When we met with the union last week, we were told that this was part of the Canada-wide collective agreement. So there is no way of restructuring by eliminating jobs.

[Magali Giroux]

Let me explain.

A number of postal carrier positions and routes have been eliminated. This means that people left and have not been replaced. Those are job losses. No one has been fired so far because section 53 of the collective agreement on job security is our safeguard.

However, at the last round of negotiations, Canada Post wanted to first tackle section 53 of the collective agreement. We have maintained the status quo, but for two years only. You can be sure that Canada Post will be at it again.

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

I will continue along the same lines as the start of my question.

We are clearly seeing a transformation at Canada Post. You are saying that letter mail is declining. We have met with people from a chamber of commerce who said that Canada Post could not continue with the same business model. However, that's not what Canada Post is saying.

You are saying that there are money and profits and that the numbers show it. However, we have to remember that the price of stamps has gone up significantly. We are talking about a 25%, 30% increase in the past few years. The business model therefore had to be changed, but apart from the postal bank, which seems to be an option, how do you see the transformation of this corporation, which provides a national service?

[Steve Ferland]

Since profits of $45 million have been recorded for the last two quarters, we don't see why action is urgently needed. Should we talk and find solutions for the next 15 or 20 years? Certainly. That's what we are actually doing right now.

Let's backtrack. The mandate was reviewed in 2008. In 2013, we were preparing to review Canada Post's mandate, but instead, there was a five-point plan with no consultation whatsoever. People from only 46 communities in Canada were invited.

In our view, what we are doing here is proper communication.

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

Absolutely. The purpose of the committee is precisely to establish communication. As the mayor of a municipality that lost its home mail delivery, I had a front-row seat when the five-point plan was implemented. Communication is definitely vital. And it has been missing, prompting heavy criticism.

Mr. Boyer, you have a lot of experience in union negotiations. A round of negotiations has still led to a two-year agreement with Canada Post. I look at all that and think that managing to sign a two-year agreement is rather exceptional under the circumstances. There is a lot of confusion and no trust in the employer.

How are you coping with that?

[Daniel Boyer]

The fact that an agreement was reached is interesting. However, you will agree that we cannot be content with a two-year vision for a crown corporation like Canada Post. Eventually, there will be more collective agreement negotiations. More talks will be needed. I hope that, for Canada Post's mandate, there will be a future beyond two years.

With crown corporations, the focus is always on setting up competition, franchises or privatization, but never on expanding the services. It's always about cutting them. However, the corporation's mandate could be very interesting. Banks and credit unions are indeed disengaged in the regions. In terms of services, we could talk about phone and Internet services.

I think Canada Post could play an even greater role in the local and regional economic development of many fine regions in Quebec and Canada.

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

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Mr. McCauley, for seven minutes, please.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks very much. I appreciate some of the things you were saying.

Getting back to the five-point plan, we had heard from the task force. I realize you are from a different interest group and you'll disagree, but the task force said that the five-point plan was a good start, and it needs to go further.

I know you'll disagree, but do you see any of the items in the five-point plan that can be done, that are necessary, or do you reject them outright? Is there some room to work with them on some of these items?