Government Operations Committee on Oct. 4th, 2016

[The Chair, Conservative, Tom Lukiwski]

I call the meeting to order.

Ladies and gentlemen and colleagues, I think we'll get going, even though it is a few minutes before 10. I'd like to get a bit of an early start if we can.

Welcome, everyone, to the 36th meeting of the Standing Committee on Government Operations and Estimates.

To our panellists, I'm sure you're all aware, gentlemen, that the minister responsible for Canada Post, the Honourable Judy Foote, has entered into a fairly extensive consultation process trying to examine the future of Canada Post. Phase one of that consultation process was to establish a task force whose mandate was to examine the financial viability and sustainability of Canada Post. They have completed their work and tabled their report. We've had a chance to examine that report and talk to the task force members.

The second phase, of course, is to go across Canada to communities both large and small, urban and rural, remote and first nations communities, to talk to individuals, organizations, and municipalities to get their views. They want to know what people believe the future of Canada Post should be and what it will hold, and offer suggestions to this committee as to how Canada Post perhaps can operate in the future to ensure its sustainability.

That's why you're all here today.

As I've explained, I'll be asking all panellists to give a brief five-minute opening statement that will be followed by questions and answers by our committee members.

To my colleagues on the committee, as a bit of an explanation, we have two representatives from the Canadian Union of Postal Workers, who will be making opening statements. That's a bit unusual, but the reason is that Mr. Keefe was originally scheduled to be at our 9 a.m. session. Unfortunately, the two other panellists had to cancel at the last minute, so I thought in the essence of fairness it would only be fair to have Mr. Keefe be allowed to give his opening statement as he would have had the other panellists shown up at 9 a.m.

We will start now, if I may, with Mr. Cavanagh, for five minutes or less.

Please, sir, the floor is yours.

[Danny Cavanagh, President, Nova Scotia Federation of Labour]

We welcome this opportunity to provide input on the Canada Post review task force.

The Nova Scotia Federation of Labour represents over 70,000 workers in Nova Scotia, thousands of whom are members of the Canadian Union of Postal Workers. Our understanding is that this task force has been appointed to collect input and information and identify options for the future of Canada Post in order to help the federal government ensure that Canadians receive quality service from Canada Post.

We have participated in all reviews of Canada Post to date and we are very interested in the future of our public postal service. Overall, our focus is on getting home delivery back for everyone, keeping daily delivery, keeping public post offices, greening the post office, creating services that support seniors and people with disabilities, and bringing back postal banking for more inclusive, accessible financial services for everyone.

The Nova Scotia Federation of Labour has always argued for the preservation of home delivery and the creation of new and expanded services, including postal banking. We have also rigorously argued for a Canada Post that operates in the public interest. After all, while crown corporations like Canada Post have both public and commercial activities, they are distinct from commercial enterprises in that they are designed to serve the public interest, not simply maximize profit.

As for the financial status of Canada Post, the $44-million profit from the operations of the Canada Post segment for the first quarter of 2016 was the best first-quarter operating profit result since the first quarter of 2009. It also marked a historic turning point where, for the first time in the absence of a rate increase for transaction mail, the increase in revenues from parcels exceeded the decline in revenues from transaction mail.

In Nova Scotia, we have before us a huge opportunity: our post offices. It makes common sense that we will help build the economy, keep jobs here locally, and help with our carbon footprint. How can we reconfigure that service? Instead of cutting services, let's look at building services. What if our postal service, with its vast physical infrastructure and millions of daily human interactions, could offer us something completely different? What if the post office could play a central role in building our next economy, an economy that is more stable, more equal, and less polluting? What if Canada Post's vast delivery network could deliver the kinds of changes that Canadians really want, environmentally friendly options that support rural and indigenous communities and local businesses?

There are over 6,300 post offices across the country. We own this, and it can be much more than a mail and parcel delivery service; it can be a powerful national logistics network. Imagine small rural post offices providing everyday financial services, such as chequing and savings accounts, loans, and insurance—financial services owned by the people who use them. Banks have simply left many communities in Nova Scotia, and postal banking can change that.

Nova Scotians' economy could really benefit from more decent-paying jobs in our communities, especially rural ones. Why shouldn't we own this? Unlike major banks, which raked in $35 billion in profits last year while cutting jobs and raising already high fees for day-to-day services, we can do it differently, with the will of our federal government to make the right choice. Our community post offices are the country's largest retail and logistics network, and we own it. In fact, Canada Post offered banking services until 1968.

Renewable energy has a huge economic potential for Canada. When the Prime Minister signed the Paris climate agreement, we agreed to radically lower our country's emissions. As of now, we are not on track to meet those commitments. Energy retrofits and a clean power boom can create thousands of stable, well-paying jobs. We can help those who have lost work due to the oil bust and improve the quality of life for people across the country.

Postal services in other countries are prime examples. Norway replaced its diesel postal fleet with new electric vehicles. The United Kingdom, France, New Zealand, Brazil, and Italy all have successful postal banking services. Japan expanded postal worker services to provide assistance to elders, deliver food, and check in on those with limited mobility.

France and Australia use their postal fleets to deliver fresh and frozen food, connecting farmers and local businesses directly to customers.

Post office buildings can have charging stations for electrical vehicles at the post offices and, with a renewable, powered postal fleet, could connect our farms straight to our dinner tables.

On door-to-door delivery, on December 11, 2013, Canada Post Corporation announced a plan to eliminate home delivery in Canada as part of a plan to return to financial sustainability by 2019, which, as the Canadian Union of Postal Workers pointed out in their presentation, is an odd statement to make, given the corporation had reported profits of $94 million in the previous year, 2012.

We recommend that Canada Post end its plan to convert home delivery mail to community mailbox delivery and restore home mail delivery to people who have lost it since the cuts were announced in 2013. If we maintain daily door-to-door mail delivery, carriers can check in on seniors and people with mobility issues each day and deliver locally produced foods, and the other possibilities are endless.

Post offices can be community hubs for social innovation. The Canadian Union of Postal Workers and allies are hoping to transform this imperilled public service, which has nearly twice as many locations as Tim Hortons, into a powerful force creating a low-carbon society. As a community, we should get behind this move and support and expand its service.

Within this framework, moving forward Canada Post must stop its unjust and unacceptable practice of discriminating against rural and suburban mail carriers. There have been many serious problems, and a very significant one remains. For decades they have performed work that is almost identical to the work of letter carriers, but they have not received the same compensation or treatment because of the—

[The Chair, Conservative, Tom Lukiwski]

I'm going to have to ask you if you could try to get to the close, only in the essence of time. We're quite a bit over time.

[Danny Cavanagh]

I only have a few paragraphs to go.

[The Chair, Conservative, Tom Lukiwski]

Go ahead, then.

[Danny Cavanagh]

We also need to have this discussion in an atmosphere free from the consistent crisis that Canada Post keeps creating about the current financial situation. In mostly all public statements, Canada Post claims the major service cutbacks are the only answer. This corporation needs to be honest about its profits and stop the fear-mongering and untruths that can justify its cutbacks.

Canada Post is present in so many communities and is a crown corporation and important employer recognized for its highly skilled workers. Canada Post should be doing more to invest in its people by offering decent jobs with sustainable wages, good working conditions, and stable hours consisting of full-time work with benefits and retirement security.

We thank you for this opportunity and look forward to your final report.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

I would again encourage the other panellists, if you can, to please try to keep it in the five-minute time frame, just so we have enough time in this session to get all questions in from our committee.

It's been our experience that everyone likes to try to pack their opening statements full of information, but we've found that we elicit more information through the question-and-answer process, and you'll certainly have ample opportunity during that process to expand upon any thoughts that you may not have gotten to in your opening statement.

Having said that, Mr. Keefe, you're up for five minutes or less, please.

[Michael Keefe, First Vice-President, Local 096, Canadian Union of Postal Workers]

Good morning. My name is Michael Keefe, and I have been a postal workers since I first started as Christmas help in December 1983. I'm also the first vice-president of the Nova local of the Canadian Union of Postal Workers, which represents 600 members working from Hubbards to Lake Charlotte.

I appreciate being invited to address the committee today.

As you may know, two communities in this municipality, Bedford and Lower Sackville, on October 20, 2014, were among the first wave across Canada to lost their home mail delivery. They were followed by Dartmouth and non-peninsula Halifax, in the summer and fall of 2015 respectively.

How has this affected the municipality, our customers, and the local?

According to Canada Post numbers, 45,574 addresses lost home mail delivery across the Halifax regional municipality. The municipality has lost 78 well-paying full-time jobs. Assuming the annual base salary of a full-time letter carrier without any overtime or additional allowances, that translates into $4.12 million of income that has been taken out of this municipality.

In addition, the installation of community mailboxes, or CMBs, has added traffic congestion to many neighbourhoods. Due in large part to the placement choices of some of the CMBs, there were two accidents within the first two weeks of the October 20 implementation of centralized delivery. A postal vehicle parked in front of a community mailbox site at a bus stop was side-swiped by a passing motorist. A week later, a bus backed into a CMB site located too close to an intersection and caused severe damage.

Our customers now have to face the increased risk of having their mail, their parcels, and their identities stolen. Whether it's in Portland Estates in Dartmouth or Hammonds Plains in Lucasville, thieves have targeted community mailboxes and will continue to do so. By breaking into one community mailbox unit, thieves have the potential to steal the mail from 10 to 16 addresses, which is much safer and easier for them than going to 10 to 16 individual mailboxes at 10 to 16 separate homes.

Our customers also now have to contend with trying to get their mail from a community mailbox that has a frozen lock, or ice on the ground, or snowbanks blocking their access. Senior citizens, the differently abled, and others with mobility issues and physical impairment have a new-found roadblock to their independence, as they are now required to get their mail up to three kilometres away from their homes.

The options that Canada Post has given them are fairly lacklustre: they will give them extra keys for family and friends; they will forward their mail to a nearby post office, family, or friend; and if if they can get a doctor's note, Canada Post will consider having the mail delivered to their homes one day per week.

In our local, due to the loss of 78 letter carrier positions, the centralized letter carrier routes have at least doubled, on average, the daily points of call. In Halifax LCD 1, which has centralized or community mailbox delivery, the points of call average for a full-time route is 1,512, while in LCD 2, which still has home mail delivery, the points of call average for a full-time route is 870.

You have fewer letter carriers delivering to more points of call. The additional workload for letter carriers results in longer days and later finish times. Take that fact, in addition to all postal workers constantly being told there have to be cutbacks in staffing and contractual concessions because Canada Post is losing money—while we continue to be profitable and Deepak Chopra and his senior management team continue to receive generous salaries and bonuses—and you have one very demoralized workforce.

I know I'm nearly at the end of my time, but if you'll indulge me, I have just one more paragraph in order to finish addressing you.

I would urge you to demand that Canada Post give this committee the statistics on mail theft for the three years before October 20, 2014, and compare them with the three years since CMB delivery was implemented to give you a true picture of the security of the mail in community mailboxes. I would also strongly urge this committee to get the full non-redacted report into postal banking from Canada Post before you decide that it wouldn't be a good fit for Canada. Postal banking could be the answer to all of Canada Post's problems and allow us to continue to provide the service that so many Canadians depend on and want.

Thank you. I would be happy to answer any questions.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, Mr. Keefe.

Mr. Callaghan, you're up next.

Looking at your brief, it looks like it might be over five minutes. If there is any information you are duplicating from Mr. Keefe's, I would ask that you perhaps keep that in consideration.

Keep to five minutes if you can, sir.

[Jeffrey Callaghan, National Director, Atlantic Region, Canadian Union of Postal Workers]

Thank you. Good morning.

On behalf of the Canadian Union of Postal Workers, I'm grateful for the opportunity to appear before the Standing Committee on Government Operations and Estimates.

My name is Jeff Callaghan. I'm currently the national director for Atlantic Canada of the Canadian Postal Workers, a position I've held since 2008. I've been employed with Canada Post since 1985.

Although our union's regional office is located here in Halifax, one of eight regional offices across the country, we represent over 3,100 members here in Atlantic Canada: workers, letter carriers, mail service couriers, postal clerks, dispatchers, technicians, rural and suburban carriers, and retail clerks. Our members work in a variety of locations, in hundreds of Atlantic communities, in large urban postal plants and small rural post offices.

During recent years as a national director, I've witnessed first-hand the number of initiatives undertaken by Canada Post which have had largely negative impacts on both the public's ability to access postal services in their communities and the very viability of the crown corporation itself. Despite public opposition, when informed, Canada Post has consistently plowed through with these initiatives without achieving any significant benefits whatsoever.

For instance, beginning in January of 2013—there's a document and hopefully you'll be able to follow—Canada Post began to change the manner in which it processed local mail in communities across Canada, including here in Atlantic Canada.

Previous to these changes, mail was sorted and delivered in the communities where the mail originated. Now mail is collected in those communities and placed on trucks and transported to mechanized facilities for processing and then returned to the original post office for delivery. In Atlantic Canada, this replaced St. John, New Brunswick; Halifax, Nova Scotia; and Saint John's, Newfoundland and Labrador. In 2008, Canada Post invested huge sums in new letter sorting machines, even though first class letter mail volumes had been in decline worldwide for several years.

For customers who rely on Canada Post for the safe delivery of their mail in an expeditious manner, mail which had previously been delivered the next business day is now taking upwards of four to 10 business days to be delivered, depending on weather and road conditions. Although Canada Post has stated it still meets on-time delivery standards, workers and customers alike realize it's simply not true. Customers soon began looking for alternatives.

For example, a letter mailed in Edmundston, New Brunswick, which is destined for an Edmundston address, is now collected at the end of the business day and transported over 400 kilometres to St. John, New Brunswick, for processing and then returned 400 kilometres for delivery. The 800-kilometre round trip adds days to the delivery time, does little to instill customer satisfaction, and increases the corporation's environmental footprint.

Sadly, this initiative has not been a one-off for Canada Post. During the same period of time, Canada Post has embarked on a concerted effort to remove hundreds of street letter boxes from communities across Atlantic Canada. Street letter boxes are red boxes located throughout communities for the public and a great many small and medium-sized businesses to deposit their mail. Without community red boxes to use, customers are left with few options but to travel to a post office to do their mailing, and for small and medium-sized businesses, they're forced to either pay for a pickup or make other costly alternate arrangements.

Canada Post has also made going to a commercial post office less convenient. Despite the moratorium on postal closures, Canada Post continues to close rural post offices and relocate some retail operations in larger urban centres, from convenient downtown business cores to less convenient and much less accessible business parks. Many members of the public, including seniors and disabled residents and downtown businesses, are no longer able to walk or travel to the post office to do their mailing. In communities such as Truro, Nova Scotia, and Corner Brook, Newfoundland and Labrador, the post office was relocated to a business park several kilometres from the downtown core. After the moves, Canada Post then used the excuse of declining revenues at the new post offices to further implement reduction of hours of operation to the public and proceeded to cut staff.

Despite the negative initiatives, and not to mention the quarter of a billion dollars reportedly spent by Canada Post to eliminate home mail delivery to almost a million Canadian households and small businesses, Canada Post continues to be a successful crown corporation. Again, Canada Post reported a $45-million profit in the first six months of 2016.

Atlantic Canadians expect more from their post office than cutbacks and reductions. Instead of making the service less accessible and less relevant to Canadians, our post office should be expanded to deliver more services, particularly in rural Canada.

Postal workers are extremely proud of the service we provide, but we need a government that is just as proud of this important public service and will do everything in its power to enhance, promote, and support our public postal service.

Implementing new and innovative services such as postal banking and community elder care and restoring unpopular and unnecessary cuts such as those made to urban and rural home mail delivery would ensure that Canada Post continues to be in a sound position to fulfill its obligation and commitment to all Canadians.

Thank you very much.

[The Chair, Conservative, Tom Lukiwski]

Thank you. I appreciate your efforts, Mr. Callaghan. You probably didn't think you were entered into a speed-reading contest when you came here this morning, but I do appreciate your efforts to be on time.

I will start now with our first intervenor. That will be Mr. Whalen, for seven minutes, please.

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

Thank you very much, Mr. Chair.

I'd like to thank you all for coming. Of course, this time last year, we were still hot and heavy in a campaign in which the future of Canada Post was an issue. I had a number of difficult conversations with mail carriers in my riding about the somewhat contentious nature of our position that we weren't necessarily going to restore home delivery. We were going to put a moratorium in place on the implementation of the community mailboxes, and then we were going to engage in a broad consultation to see what the future of Canada Post would look like.

Of course, this is what we have done. As part of this process, we've really learned that the Canada Post brand is quite strong. It's a real sense of identity for many Canadians, largely because Canada Post is one of the institutions that helped build our country, so everyone feels there should be a role in the continued growth and building of Canada within Canada Post.

Because we get to hear often from CUPW members, I want to focus my first few questions on Mr. Cavanagh. As a member of the public, but also knowing how your members feel about Canada Post.... When we look at the task force report and also at the Canada Post annual report, we see they refer to five types of delivery. They singled one out as being door to door, which is in the older urban communities—straight to the mailbox on the door—but they also have centralized points in condominiums and retirement and assisted-living residences, rural mailboxes at the end of laneways, group mailboxes, the community mailboxes, and post office boxes.

When you talk about door-to-door delivery, do you include any of those other categories as door-to-door delivery? When you think of door to door, do you think of apartment buildings or the end of driveways as being equivalent, or not?

[Danny Cavanagh]

I guess when we say daily door-to-door delivery, that's exactly what we mean. It's delivering the mail to the door as it used to be years ago. As an example, at my house, where I live, I've lost mine. I live in a rural community. I had a mailbox. Now I have to drive three kilometres one way to pick up my mail.

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

What about a rural person who has mail delivered to the end of the driveway? Is that equivalent or not equivalent to door to door, in your opinion?

[Danny Cavanagh]

What we're saying is to go back to how it used to be out in the rural community. I didn't mind getting my mail in the mailbox. That's what we're talking about.

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

In condominium buildings, when they deliver it inside the condominium building to a centralized point, would you consider that door to door? Is that a sufficient level of service?

[Danny Cavanagh]

I guess. I have never lived in a condominium, so I'm not sure

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

Okay.

[Danny Cavanagh]

If you're talking about going inside the door of what I'm familiar with, an apartment building where everybody's mailbox is in the main hallway, then that is what we would be talking about.

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

Would you consider that to be equivalent to a level of service that you would find comparable to door to door?

[Danny Cavanagh]

Yes.

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

That's great, because when we see these five types, I'd like to know what you feel, as a consumer of mail services, is equivalent to door to door.

In your work with your own unions and the membership of your organization, does joint pension management come up, and is joint pension management something your membership is interested in, approves of, would like to see more of?

[The Chair, Conservative, Tom Lukiwski]

Mr. Whalen, it might be helpful if you direct your questions to one of the individuals.

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

I'm sorry. It's to Mr. Cavanagh.

[Danny Cavanagh]

If your question's on pensions, yes, we stand and we fight for decent pensions for—