Government Operations Committee on Sept. 27th, 2016

[John Rae]

We were encouraged by the promises of the Liberal government. Of course, now it's a matter of community people like us holding its feet to the fire. That's sometimes easy and sometimes not.

I would suggest that there's an additional advantage in home delivery for our communities, the elderly and those with disabilities. Sometimes the mail carrier is the first person to discover that there may be trouble. Mail accumulates and the red light goes off in the mind of that mail carrier that maybe there's a problem in that household. Sometimes that mail carrier is indispensable in helping that person to get the assistance that's needed. Not only does the issue revolve around mail delivery and its importance to Canadians, but there are additional spinoff benefits to having it.

[Wanda Morris]

We haven't polled our members on this issue specifically, but I know anecdotally that many of them were up in arms about the community mailboxes. Many of our local chapters took this on as an issue. Certainly, if it is reasonable for us to avoid any future community mailboxes, it is also reasonable for us to rip up the current ones and restore home delivery.

[Erin Weir, NDP, Regina—Lewvan, SK]

Excellent.

Mr. Kirk, I think you brought a very interesting perspective that our committee hasn't heard as much. You've been limited a bit by time. I wonder if there are any further points you wish to make.

[Gary Kirk]

The main point I would make is that e-commerce represents a tremendous opportunity for growth. In countries that have postal infrastructure that allows for it, it's growing much faster than it is in Canada, and it's growing in a more distributed way. We have a postal system that basically allows only people living in a couple of major centres to enter the market. I think that has implications for regional development and, downstream, it has implications for quality of life.

I can take advantage of Amazon's low fulfillment rates by closing my store, laying off my employees, and shipping all of my stuff to one of their warehouses where employees are expected to pick 97 units per hour. If that's the kind of future we want for people, as opposed to people working in their communities, selling their own goods online across the country, and hiring people locally, which I think is a better future....

It's analogous to roads. We have a system right now that says the highways are only available to a few large players and anybody else has to use local roads or pass through fields. We wouldn't accept that for our physical retail. We wouldn't accept that only big corporations can be on streets and everyone else has to sell from their homes. We shouldn't accept a postal infrastructure that is basically the same thing.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. Whalen, I suspect you might have some comments in your seven minutes.

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

Yes, I have a few comments. Just to clarify, as someone who had to go door to door all last summer explaining the Liberal government's position on Canada Post, with many difficult conversations—even with parents of children on my soccer team, who worked for the postal service—we did not promise that we would roll back or reinstate door-to-door delivery. What we promised was that we would do exactly what we are doing here today, which is stopping the transformation initiatives at Canada Post, consulting with Canadians, finding a direction, and implementing that direction.

It faces two major challenges. What direction do we go? We have heard a great variety of views, from virtually privatizing the service to greatly expanding it. Also, then, how can we have a Canada Post that is given recommendations that it's actually capable of implementing? Is Canada Post able to implement the changes we're recommending? The question of what kind of Canada Post we want is a conversation about what kind of Canada we want. I would like to echo some of the comments that Mr. Kirk brought forward.

In terms of what the task force has brought us, it had a limited mandate. It was looking at what it could recommend from a self-sustainability standpoint, and it did a financial analysis. On our side of the table, we do not feel bound only by the recommendations or the options put forward by the task force report. All options are open to us: from reducing services to greatly expanding them. We have environment, rural broadband, access to markets, access to expertise, and Canada Post being the face of government in rural communities.

A simple question for Mr. Dachis would be this. When we talk about reducing labour costs, are you saying that we should only have the type of dystopian jobs that Mr. Kirk rails against, where employees have very few rights, very low wages, and poor working conditions, in order to leverage that type of sweat equity in our distribution system, or should we have a distribution system that allows working parents to raise families?

[Benjamin Dachis]

What I'm recommending is in fact a continuation of Canada Post's existing model. When you go to a Shoppers Drug Mart, the kind of retail outlet that has—

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

Yes, Mr. Dachis, but at Shoppers Drug Mart the people who work behind the counter are not making middle-class wages. They're making minimum wage.

[Benjamin Dachis]

That I can't confirm, but the bottom line is that if we want to address social issues, say, the question then becomes—this is going back to your point about how we want to view Canada—what's the best way of dealing with the specific issue you have in mind? Are the postal rates the best way to deal with these kinds of low-income folks? Or is it through the broader social support network that your government has done very well, through things like changing the child benefit program and other tax policies?

The big question for this panel is the question of low-income support and income inequality. Is the postal service the best way to deal with that? Not at all. What we're talking about is franchising and contracting—

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

[Inaudible—Editor] treating jobs that middle-class Canadians have in the postal services as some type of welfare. These are actual jobs that people do. They provide logistics services to Canadians.

Mr. Kirk, you talked about fulfillment and a gap in fulfillment. If Canada Post is able to meet the rates for all of Canada, and the rates it provides to foreigners in terms of the right structure it has under the universal postal union, would that be an acceptable solution to you? Do you think it should be done by a general increase on everyone's price or by subsidization of the rates that are paid?

[Gary Kirk]

The difficulty of setting a national post rate too high—and I got this from Mr. Chopra himself on the phone once—is that private couriers would undercut that rate on high-volume routes, like Toronto to Montreal. I asked if he thought that some sort of regulation needed to be introduced to stabilize the market and make this functional, then, and he ran as far as he could in the other direction.

Basically, it just needs to be something that's predictable and makes sense. There are various ways you could tweak it. In Australia, I think they actually licensed their bags, and they call them eBay bags. Presumably, they got some funding for it out of eBay.

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

In terms of fulfillment, I know you mentioned that you would not be interested in using an Amazon-like service, but it seems to me that there might be a gap in the Canadian e-commerce market for this type of warehouse fulfillment service. It doesn't seem to be provided.

Canada Post seems like an excellent organization through which to leverage this type of value. It's across the country. It has a network. It has physical space. If you were looking for that type of service, would you be more amenable to going to Canada Post to have your fulfillment done?

[Gary Kirk]

Again, for someone like me, fulfillment out of a warehouse doesn't work, because I'm selling unique items. It's not like I have a box of signed Pierre Trudeau memoirs and they can simply pull one and ship it every time one sells. Actually, I have a couple....

The problem is that there are various coping mechanisms that have developed to try to mitigate the impact of the Canada Post pricing model. In large centres, you have mail bundlers. What they do is collect packages from a bunch of small sellers to access a better volume rate, then they charge a premium on top of that rate for the service. That is the closest I've been able to get to that, but it doesn't help you if you're living in Fergus, Ontario. It doesn't help you if you're living anywhere outside of a large centre.

It's crazy that we've developed an industry just to try to mitigate the impact of our national postal service's pricing model.

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

Thanks, Mr. Kirk.

Dr. Lipsig-Mummé, you said there were four parts to developing an environmental plan. I would like to hear, very quickly, the titles of those so it's in the record.

[Prof. Carla Lipsig-Mummé]

Okay. You eco-audit. You share. You do it collaboratively. You then set up. If you're unionized, you do it through collective bargaining. You can do it with non-union companies. You plan the stages by which you'll reduce the greenhouse gases, now that you know where they are. At that point in time, you set yourself real—

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

Hard targets and milestones.

[Prof. Carla Lipsig-Mummé]

Yes, hard targets. Thank you.

After that, if you're in the private sector, you divide up the profits you've made.

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

Thank you very much.

[The Chair, Conservative, Tom Lukiwski]

Panellists, I want to thank you all for bringing, as I think Mr. Whalen said, such diverse perspectives to this committee. I thought it was a fascinating discussion.

I think Professor Lipsig-Mummé is already going to be sending us additional information. I also encourage you, should you have additional information that you think would benefit this committee in our deliberations, to please do the same.

In particular, Mr. Dachis and Mr. Kirk, you could have spoken for many more minutes—or perhaps hours—if we had given you the opportunity. If you do have additional information, please contact our clerk. Get that information to us. Conversely, should we have any subsequent or follow-up questions we want to ask of you, I hope you'll allow our committee members to contact you directly and get their questions answered.

Thank you once again. I truly appreciate it.

The meeting is adjourned.