Government Operations Committee on Sept. 26th, 2016

[Magali Giroux]

I would say that the impact is major, especially in small, remote villages. The post office is often more than just a place where people go to buy stamps or mail a letter.

Today, we often rely on the fact that everyone is doing business on the Internet and that everything is done through the Internet.

About two weeks ago, I was in Coaticook at a public consultation organized by MP and Minister Marie-Claude Bibeau. Some people said they don't have Internet in their village. It is not that they don't have high speed Internet, they have no Internet service at all in that area.

For those people, the post office becomes a vital necessity. It is a means of communication that is important and that must stay. People identify themselves with the post office. That is why we stress the importance not only of protecting post offices, but also of providing more services.

Among the 6,300 outlets in the country, there are unused spaces, both inside and outside. In small communities, why couldn't post offices become focal points? Why couldn't local merchants and artisans set up shop there to sell their products? At the same time, that could stimulate the local economy. I think it is important to keep the moratorium on post offices. There is a need.

Over the past few years, Canada Post has gone ahead with privatization. The post office is being shut down; Canada Post makes sure that it is shut down so the people no longer use it—we see this in large urban centres—and franchises are opened in pharmacies across the street. Slowly, the post office's hours of operation are reduced, it is deemed to be no longer needed and it is shut down. We all know that having postal services in pharmacies is privatization. The employees are not trained or unionized and they are paid minimum wage.

[Karine Trudel, NDP, Jonquière, QC]

Thank you for those explanations.

You talked about training. My understanding is that, in post offices, employees were trained, whereas in pharmacies, the services are available, but the employees are not properly trained.

Is that correct?

[Steve Ferland]

That's sort of the case. The turnover rate in pharmacies is significant. These are precarious jobs at minimum wage. Of course, people want better salaries. They want to earn more than the minimum wage. These people are trained on the run. They are not really familiar with Canada Post's products and services that are available to the public.

[Karine Trudel, NDP, Jonquière, QC]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Ms. Ratansi, seven minutes.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you very much, all of you.

It's an interesting conversation we've had in Montreal and now here. When I look at myself as an accountant or as an operational consultant, the moment I hear “cost savings”, “effectiveness”, and “streamlining”, I know what that means, and you know what that means. We've had those conversations with Canada Post. We've had them with the task force.

Madame Giroux, you've brought in a very different perspective. You brought in a perspective of human capital and you brought in, I would say, a social justice agenda, which I think we have missed out when we were doing it because we were looking at profit from a P and L statement rather than the human impact. Again, the corporation and the task force have left that element out. So we are now, in this study, trying to bring that element back in.

I looked at what the postal union and some people have given us as to the road forward. You've come up with interesting ideas. I wonder where those conversations went.

Did the union ever have those conversations with the corporations? You talked about banking. I'm wondering why the task force even said banking was not feasible. You talked about $35 billion that the banks make.

Are the banks afraid that you'll be competition like a caisse populaire, or a credit union, or things like that?

[Magali Giroux]

Clearly, the banking lobby is very strong in Canada, and I think everyone knows it.

Why was it pushed aside? I was not at all surprised. As I said, I think there are conflicts of interest. Some people have their hands tied. It is definitely difficult. As for Deepak Chopra, we have been asking for the expansion of services for a long time during our collective agreement negotiations. However, Canada Post has always turned a deaf ear. This proposal has always been a non-starter. There has never been an openness.

Is it a coincidence that Deepak Chopra sits on the Conference Board of Canada next to the CEO of the RBC? The fact that Ms. Bertrand had a position—which I no longer think is the case—on the Fédération des chambres de commerce du Québec next to the vice-presidents and CEOs of the big banks did not help either.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

You've tried to have the conversations in terms of expansion of the service. If you look at the logistical network that Canada Post has.... The people who were before you said UPS would not go any further than the tar road and Canada Post will deliver past the tar road because it is part of its mandate to provide service.

Our concept of whether Canada Post is a business, or a service, or both.... Yes, it has to remain profitable and, yes, there are two sides to the equation. I think a question was asked of you whether you would look at anything within that five-point plan. For example, Canada Post tells us that labour cost is 70% of its operational cost and, therefore, that is their biggest problem, and so are the negotiations that they have to do.

Anybody can answer this. What is your response to that?

[Daniel Boyer]

We can have some fun and do an accounting exercise if you wish, but Canada Post is still a public service. We are saying that we have to expand its services. We must not leave everything that costs the most, but it is still a public service. As you mentioned, the UPS stops the service where the road ends and Canada Post covers the rest.

In terms of the percentage of the costs for Canada Post's workforce, we are talking about a service company. As a result, it is clear that, as in the health and education networks, a large percentage of the costs goes to the workforce that we need to provide those services. So a large percentage of the budget is earmarked for the wages and benefits of Canada Post's employees.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

That's an interesting one, because we're looking at the task force. We're not the task force; we're the consultation group. We're looking at the current operations and the future operations. In the current operations, some of the irritants really have to do with its profitability and whether it provides service.

I'm led to believe that Canada Post doesn't seem to think outside the box. Maybe it doesn't, because there was the concept of the hub—the elderly care, the financing of communities, and the delivery of grocery service. Somebody mentioned that for 14 years everything was going well, and then in five years you've had problems. You alluded to the fact that it's probably management that wants to think of privatization, but hopefully that's never going to happen.

How do you then balance the needs of the corporation to be profitable and the needs of the workers to ensure that this is a service model that blends properly? How do we do that?

[Steve Ferland]

The Canadian Union of Postal Workers has always been open to the idea of expanding services and of finding solutions that will make it possible to better serve Canadians. As Mr. Boyer said, if it had not been for the 2011 events and the change in accounting methods, Canada Post would have made a profit for 22 years in a row. Of course, we have to look to the future and find solutions, but we insist that this can be accomplished only by creating new services, not by cutting services.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

We'll have our last two interventions of five minutes each.

Mr. Gourde, the floor is yours for five minutes.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

Thank you, Mr. Chair.

When you are talking about adding services such as financial and insurance services, do you think Canada Post has what it takes to meet its responsibilities? To provide financial and insurance services, there needs to be a reserve fund. The logistics to consider are significant. Have you done a study on that?

[Steve Ferland]

There was a study on financial services conducted by Canada Post. I strongly encourage you to request that study done between 2009 and 2013. Why is Canada Post hiding it? We don't know why, but you should really take a look. The unredacted passages of the study show that the addition of financial services would be a winning strategy across the board. You really must read the study.

[Magali Giroux]

A number of other studies have been done, including the one by John Anderson from the Canadian Centre for Policy Alternatives. I don't have that study with me, but it explains why Canada needs postal bank services. The infrastructure for that service is already in place. This has been done and is being done around the world. I don't think we are dumber in Canada than elsewhere.

The other point is that Canada Post had the means to invest over $2 billion in the transformation of the postal service, basically for mail delivery. If Canada Post was able to invest a little over $2 billion to deliver letters while it's claiming that the sector is declining, Canada Post should be able to make good choices.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

The basic financial services that you want to provide are the same as the ones that banks and credit unions no longer want to deliver under the excuse that they are not profitable for them. How will you make a profit from those services?

[Magali Giroux]

First, they are banks in the private sector. I don't think that $35 billion in profits per year for six major banks is an indication that they are not making a profit.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

I was talking about the services—

[Magali Giroux]

It is not profitable for banks in the sense that they are always wanting more. So they are cutting the infrastructure and employees that cost too much. Canada Post, which has the infrastructure in place, does not need to reinvest to pay for a building.

I'm not sure whether I've answered your question.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

You need to issue loans to sell financial services. There won't be just instant tellers. These days, banks are removing instant tellers because it's difficult for them to be profitable when there aren't enough transactions.

[Magali Giroux]

That's why the committee needs to seriously consider the feasibility of a project like this and how to do it. I'm not the one who can tell you now how to do it.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

But you think it's possible, right?

[Magali Giroux]

Absolutely. Not only do I think it, but I'm convinced of it, too.

[Daniel Boyer]

I'd like to add that the financial logic of major Canadian banks and major world banks isn't to say that it isn't profitable, but that it isn't profitable enough. That's the only difference. There's certainly money to be made in this area. People suggest solutions like this because they think there's money in it. People think the Canada Post Corporation is able to provide these services.

Although people say there's money to be made, there may not be enough for the financial institutions because they can make more money in another way. I think it's unfortunate, especially for Desjardins, which has created financial institutions proper to each regions—credit unions, in other words—that are withdrawing little by little. I think the Canada Post Corporation has quite a role to play in this area.

[Jacques Gourde, Conservative, Lévis—Lotbinière, QC]

So we should come back with a solution that is partly digital and partly inspired by the recommendations in the Ouimet report that would be more developed than the existing networks.