Government Operations Committee on Oct. 3rd, 2016

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

That was very clear. Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We're now going to two five-minute interventions.

Go ahead, Mr. Kmiec.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, gentlemen, for coming in.

This committee heard in prior testimony that Canada Post is facing an uncertain financial future. The Ernst & Young report provides numbers of $700 million in annual losses from this time till 2026. It noted, “The current business model of the corporation does not generate sufficient income and cash to finance the realignment needed to continue its journey from a letter-centric to parcel-centric business...”.

I specifically want to focus on getting to new services and this idea of returning to a banking service. We know from prior testimony that 7% of Canadians and 11% of businesses said they may or would like to use it. Are we talking about an ATM machine or something more than an ATM machine, or are we talking about full-service banking?

Your Worship, if you want to start, is that what you want to see?

[Gary Gosine]

Well, in my community, we have an ATM machine, but unlike downtown on Water Street.... If you want to use the bank on Water Street, you can go in and put a cheque into the bank and into the machine and take money out. In my community, you can only take the money out. You can't put anything in. I live in a community that you have to travel to by ferry. In other words, for someone to put something in.... Also, there are a lot of seniors, and they don't know how to do telephone banking. They can't do it. They have to get to the nearest bank—

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I'm sorry to interrupt you, but I only have five minutes. Do you mean to say that you want to see full banking services provided through Canada Post?

[Gary Gosine]

Definitely.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Do you, Mr. Dyer?

[Craig Dyer]

Of course I support that, and to put it into perspective, the five major banks last year made $36 billion—

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Okay. I have to interrupt you there, because that's what I want to get at now.

To stand up a bank, what you're talking about every single day is cheque-and-and cash reconciliation at the location, compliance, quite a bit of training for the people who are involved, and licensing, because there are different federal and provincial licences that you have to obtain to sell different financial products.

You're talking also about having money-laundering controls and procedures in place to prevent money-laundering operations from abusing a service like that. You need on-site security, and you need to adopt SAP software in order to be compliant and to be able to communicate with other banks.

This seems to me like a huge cost increase for the 7% of Canadians or the 11% of businesses who may use this. In unique situations like Bell Island, I could see that there's a—

[Gary Gosine]

For you to say that, you can't be from a rural town.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I live in and I represent Calgary. I've lived in small-town Alberta where there are no banks, maybe just credit unions that we had to use. I've happily used credit unions when I could. In Alberta there's a lot of animosity towards the big banks, because they basically abandoned Alberta in the 1980s, so I know what that feels like and I've heard it from people.

Canada Post would have to do all of these things. It would have to train all of its people on the ground and retrain some of them. It just seems like a large cost increase to provide a service that may not work out and may not ensure the financial sustainability of Canada Post.

Is this the best service, or is there something else they should be looking at instead, considering all of these factors?

[Gary Gosine]

In my community, if we had anything other than just taking out money, it would be great. Anyone who has a problem with it in my community, 24-7, they're calling me. I have to call a number based out of Halifax to see why the armoured truck wasn't on the ferry. Today, I know it wasn't on the ferry because there was no boat from 11 until six o'clock tonight.

Yes, there's going to be an initial cost, but the initial cost is going to override that when there's room at our post office for two or three employees who are there anyway. They're there from nine in the morning until five in the evening. I'm sure that any kind of increased service—and not even full service—is better than what we have in our rural town right now.

[Craig Dyer]

Just to speak to that, we do have a highly trained staff at Canada Post in our retail section. Right now they also do MoneyGrams and money orders, so they do provide some kind of financial services. We don't just sell stamps or deliver parcels; we do a full range of things. We did student loans here locally, so there is an opportunity.

Whether it's full-fledged banking I can't say, but I know Mr. Gosine's community, and they have nothing. Would you be putting one downtown on Water Street when there are three banks down the road? Probably not, but there's an opportunity there to investigate, do your homework, put the service in place, and generate revenues.

The studies have shown that these other countries have generated revenues through postal banking, yet Canada Post management will not share the report they did that said it was a win-win. Why would they not show it if there's an opportunity to generate revenues and provide a service to many communities—and we are a service, not a business—from coast to coast to coast? We have more offices than Tim Hortons has franchises, so we're out there. Why wouldn't the government take on the opportunity to enhance these communities by providing postal banking, Internet services, and hubs?

Yes, there would be a big change, but that's what the union is willing to work for. The union is willing to work for change. We're not saying that this is going to mean carrying mail every day. Things have to change. Why wouldn't we change to generate revenues when it's been proven in so many other countries, and the skill is there?

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Our final intervention will come from Madam Ratansi. You have five minutes.

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

Thank you both for being here.

You talked about Canada Post being a service, but it's both a business and a service. As a business, it has to be financially sustainable. I know that the restraints that were put on the way the task force was working, or perhaps on the way Canada Post was working, were within the financial model.

You've come up with some creative ideas. Canada Post has to operate within these constraints because of its charter. The Canada Post charter says that it has to be sustainable, and it can't go out for subsidies unless we change the charter.

In terms of postal banking, you've given us ideas about Japan. The Japan Post Bank is wholly owned by the Government of Japan. You talked about Canada Post not being able to manage itself at the moment as a corporation. Would it be able to manage the bank? Would you want the government to manage the bank?

[Craig Dyer]

I hope my point is taken. We need a different style of management at Canada Post, from the top down.

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

Fair enough.

[Craig Dyer]

That is a huge burden for postal workers, because we have to work together, and that's not happening. When we come forth with a solution to generate revenues, eliminate a footprint by removing a vehicle from the road, and create a full-time job, only to be told “no” because that's not in their plans, it's very discouraging.

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

You keep on blaming Canada Post as if there were a directive coming down from the CEO. Is it possible that there is something going on between the management here and the workers that is causing so much animosity? Do you think it stems from the top? There may be personality issues or whatever.

[Craig Dyer]

I have a fantastic personality.

[Voices]

Oh, oh!

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

I don't mean you.

[Craig Dyer]

I'll qualify that. I've been there 27 years. I've gone through seven plant managers. There is definitely a personality clash between workers and management in St. John's, simply because we believe that we do have rights. We do want to be respected, and we do come forward with good ideas to save the corporation money, only to be told “no”, so where is the encouragement to continue?

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

With regard to the task force, Canada Post said that it did a consultation of 46 communities before it came up with its five-point plan. We have taken note that you said you were not consulted.

Mayor Gosine, were you consulted by Canada Post when they put in the community mailboxes? Do you remember?

[Gary Gosine]

I'm trying to remember. Yes, we were consulted. We were contacted by a couple of union members who brought it to our attention. I think it was Louise Ade, maybe.