Government Operations Committee on Oct. 4th, 2016

[Jeffrey Callaghan]

I think maybe a change of direction at the top of Canada Post would be helpful. I think in the past we've been open to working with the management of Canada Post. We ask for consultations on a regular basis, and our collective agreements are full of mandates to consult, but I guess the key words missing from a lot of it are “meaningful” consultation. We raise issues, and a lot of times they don't go anywhere. We spend a lot of time—

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

I have only one minute left. You have an e-post system, and you've been doing some banking, and I just came back from India, which has a huge postal network. Mr. Modi wants inclusion, so he has reached out to communities, reached out to the post office, and said rural networks are going to work. It is not brick and mortar that we're looking for; we're looking for creative solutions.

Would the rural communities be able to access? How many are accessing your e-post system at the moment, the one where you do MoneyGrams, visas, etc.?

[Michael Keefe]

We're not sure how many are accessing e-post, because many rural areas don't have reliable high-speed Internet services, so essentially all you can do there is pay bills. I shouldn't say “all you can do”. You pay bills there, but if you don't have a reliable Internet service, then you can't really access it.

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

If you want postal banking, I guess we'd have to have reliable postal Internet service, plus people with smart phones who can probably bank online.

[Michael Keefe]

Or you could just allow people to go to the brick-and-mortar post office, which is still in most communities, and they can do their banking there.

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

Okay. Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Thank you very much, gentlemen. We've reached the end of our time.

Before I give my very brief closing comments, though, I'd like to get something on the record. It speaks to a comment that Mr. Ayoub made earlier about Canada Post perhaps being considered an essential service as opposed to a business. It revolves around direct subsidies.

Here is my question to you. If all else fails—if the five-point plan doesn't work, if cutting costs is ineffective, and if other options of raising additional revenue to try to better position Canada Post in the future don't seem to be sufficient—would you or would you not agree that the government should directly subsidize Canada Post, much in the same manner it does with, say, the CBC?

Mr. Keefe, I'll start with you.

[Michael Keefe]

I would say yes, they would have to. If they're not willing to expand in the money-making areas and Canadians want their postal service, then yes, it would have to be subsidized.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

[Jeffrey Callaghan]

Yes, I would agree, but I think before we ever get to that, there are examples all around the world of postal administrations facing the same daunting task as Canada Post. They're looking for other innovative solutions, and that's what we need to do here in Canada.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

Finally, Mr. Cavanagh, would you comment?

[Danny Cavanagh]

Thank you.

Yes, we agree with that, and we have lots of studies to say that Canadians don't mind paying higher taxes to get the kinds of public services they want.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Gentlemen, I thank you all for being here today and I thank you for your presentations, particularly Mr. Keefe and Mr. Callaghan. We've heard from several of your colleagues in various parts of Canada, and I'm sure we'll hear more as we continue to go out west and on the rest of our tour this week.

One thing I can assure you is that every time we have CUPW representatives here, you bring a slightly different perspective to the table, so I appreciate that.

Mr. Cavanagh, I appreciate your being here.

Finally, gentlemen, if you have any additional information that you think would be of benefit to our committee as we continue our deliberations, please feel free to submit them directly to our clerk. We'll make sure that those are included in our deliberations and in our final report.

Thank you once again. We are suspended, and I would ask the next panellists to please come to the table as quickly as possible.

[The Chair, Conservative, Tom Lukiwski]

Ladies and gentlemen, and colleagues, I think we'll get started again if we can.

Good morning, ladies and gentlemen, and thank you for being here. I think I saw most of you, if not all of you, in the audience for the first session, so you probably know how things work around here. In the event you weren't, let me reiterate quickly.

We're asking each of you to please make a brief opening statement of five minutes or less. Since there are four panellists, I'm going to have to be strict on the five-minute time limit. If you care to look up during your presentation, I'll try to give you a one-minute advance warning, so you can start wrapping up if you're not quite finished.

Following that, we'll have interventions from all of our committee members, and at the end of that time, hopefully we'll have all of the information that you wish to transfer to our committee.

With that, we'll start immediately. On my list as our first panellist to speak is Mr. Brigley.

Mr. Brigley, you have five minutes.

[Jonethan Brigley, Chair, Dartmouth, ACORN Canada]

Thank you.

I'm a member of ACORN Canada, and our main focus has been on the low- to moderate-income families in Canada.

We are very much supportive of postal banking, but one of the major points we want to focus on is how to compete with, if not get rid of, things like payday loans.

As people know, payday loans in Nova Scotia are $22 for every $100, which actually equals up to a 572% interest rate. We think that postal banking will be able to help low-income families by giving out loans at a low to moderate interest rate to those who need them for emergencies between pays, such as family emergencies, etc.

Right now, if you take a payday loan, you have two weeks to pay it off. That's it. We have records of people who have taken out up to 15 loans, mostly just trying to pay back the prior loan, because some people don't have paycheques and it doesn't line up with when they actually get money, so they have to take out loans just to keep it rolling, while being taxed at that interest rate.

Postal banking could modernize that and actually make a payment plan with low-income families to try to get them to pay it off in a set period of time, instead of slapping a two-week due date on it.

Right now, companies for payday loans are all focused on low-income areas. Sometimes you see two if not three buildings all clumped up together in one area. You don't see them in high society areas or anything like that. These loans are increasing poverty in low-income neighbourhoods and escalating problems such as crime and violence.

The idea of postal banking providing an alternative payday lending product is to provide people with low-cost options in times of crisis. It's true that credit unions are increasingly offering low costs on low-amount loans to their members. However, their reach is very low, which is why postal banking could help fill in these gaps.

A recent study by ACORN shows that people use payday loans because they are being denied credit at the banks. It is often because banks deny people overdraft protection, lines of credit, and credit cards, so people use payday loans. Furthermore, “Canada Post in the Digital Age” quotes the Canadian Bankers Association, “who have indicated that many users of payday loan lenders choose the service because of the relative anonymity it affords.”

First, people use payday loans because they are in need of basic necessities such as food, rent, and car repairs, or for family emergencies, etc. On the profitability of payday loans, Vancity, which is in B.C., offers a product at 20%, which is a much longer payback than what payday loans provide. This is the model we would suggest for postal banking. People need a low-interest, fair-terms, short-term loan product alternative that is available across the country, and this is something we believe postal banking could do.

That's pretty much how ACORN sees it for postal banking.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much. We appreciate your comments.

Next up is Mr. Kozloski, for five minutes, please.

[Dr. Thomas Kozloski, Chair, Board of Directors, Feed Nova Scotia]

Thank you.

My name is Tom Kozloski. I'm a faculty member of the Sobey School of Business at St. Mary's. I've been on the board of Feed Nova Scotia for about four years and I've been chair for one. I'm here on behalf of Nick Jennery, our executive director, and his team, who work so hard to assist Nova Scotians who experience food insecurity. I'd like to thank you very much for the opportunity to offer our comments and suggestions.

To give you just a little bit of background, Feed Nova Scotia is not a food bank per se. We provide food and some other support to a network of 147 food banks, shelters, and meal programs all across the province. To give you some idea of scale, we deliver approximately two million kilograms of food per year to about 44,000 Nova Scotians who are registered with the various food banks and meal programs. One-third of these are children under the age of 18. The food that we deliver across the province has a value in excess of $10 million. We've noticed, especially in the recent fiscal year, a significant increase in demand for our services.

In addition to regular ongoing food support during the year, we have a Christmas program that provides Christmas meals and hampers to children and families across Nova Scotia who otherwise would not have a Christmas celebration. We don't receive any financial assistance from the government. We rely entirely on public support for our operating budget, which is about $3.5 million. That revenue comes from a variety of sources, including the reason I'm here today: direct mail campaigns.

We have a very heavy reliance on Canada Post. While there is an uptick in electronic forms of communication and digital and social media, there is still a very significant part of our business that relies on the conventional postal system. For instance, in our last three major appeals, we sent out about 120,000 individual mailings. They accounted for about $650,000 in revenue alone. That's not even counting the impact of getting our message out to people who might donate, for instance, in the future.

Most of our revenue comes via Canada Post through cheques, money orders, and bank drafts, and about 25% of our credit card donations come through there too, so fully two-thirds of our revenue comes to our organization through Canada Post. We go back and forth with our supporters and clients with highly personalized communications—income tax receipts, for example, and thank-you letters, and these are essential to our operations.

The move to the neighbourhood community mailboxes is a little bit of a cause of concern for us. As mentioned before, a large portion of our operating funds come through direct mail appeals in addition to the other sources, which are sponsorships, public events, corporate sponsorships, things like that. If community boxes result in a slower and lower response rate, which some have suggested they do, this would definitely harm us significantly and impact our ability to feed hungry Nova Scotians across the province.

As a registered charitable organization, we're required to provide official tax receipts. Electronic receipting is certainly an option, but it suffers from the same issues of whether or not electronic means are widespread and whether people have access to them. Many people do not have the ability to access the Internet on a regular or even irregular basis, so it's very important to have an efficient and effective Canada Post for all of those reasons that I just mentioned.

In summary, we understand that Canada Post faces very significant operational and financial challenges. We don't necessarily have solutions to those challenges. My purpose here today is to let you know how much we depend on Canada Post in order to run our operation and to provide services to needy, hungry people. We have no one to pass cost increases to. Again, we really need the services of an efficient and effective Canada Post.

We would encourage you to talk with our accrediting agency, Imagine Canada, and possibly make some accommodations for a pricing structure that will assist charities like ours in the delivery of services to needy Canadians across the country.

Thank you very much for the opportunity to offer our comments. We look forward to your questions.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Next up we have Ms. Corbin.

You have five minutes, please.

[Anne Corbin, Executive Director, Community Links Association]

First of all, thank you for the opportunity to speak to this committee.

Community Links is a provincial organization of senior and senior-serving organizations. We work to promote age-friendly communities across Nova Scotia. I'm here on behalf of the older population, both urban and rural, who are members of our association.

The termination of door-to-door delivery is in direct opposition to the need to maintain healthy, safe communities and to allow seniors to age in place. Indeed, aging in place is one of the favourite themes of all levels of government. One of the rationales behind the aging in place philosophy is that the longer people can live independently in their homes and communities, the less the financial and social burden will be in trying to increase nursing home beds and other levels of care.

In order for people to age in place, however, services must be available in both urban and rural communities. Home delivery of mail is just such a highly valued service. Mail delivery provides communication, access, and injury prevention to those facing mobility challenges.

Consider the unpredictable winter weather in Atlantic Canada and elsewhere, when flash freezing has left sidewalks, roads, and driveways thick with ice, rendering them impassable for many people with any mobility challenge. Add to this the significant number of seniors who no longer possess a driver's licence and community mailboxes that are situated in excess of two kilometres from a residence in some parts of rural Nova Scotia. This places an additional hardship on seniors trying to receive their mail.

I'm reminded of a recent story of an older adult in Mineville, Nova Scotia, who in spite of using a wheelchair has remained independent and is able to drive their adapted car. However, the lockbox—or community mailbox, in your terms—is located down a slope, which presents a challenge to the wheelchair user both in approaching the mailbox and returning to her car. You can imagine what this struggle would look like on an icy day in February.

The community mailbox sites pose added challenges for the older population, including staying safe in inclement weather and dealing with frozen locks and ice underfoot. There are also reports of community mailboxes being the target of vandalism, arson, and theft, translating to an increase in the number of victims should these mail stations become the norm.

The positive impact of letter carriers on senior and community safety stretches far beyond the winter months. Home delivery allows letter carriers to identify homes where mail is piling up, which may signal that the homeowner has been hurt or has become seriously ill.

Letter carriers have close and regular access to individual homes that allow them to act as the eyes and ears of a community. Should letter carrier services cease, the inconvenience or impossibility of walking to a community mailbox will inevitably result in many seniors depending on others to pick up and deliver their mail. Not only will this put seniors at greater risk of victimization—for example, through mail fraud and theft—but it will increase seniors' dependency and isolation.

I'd like to highlight two or three items reported in a discussion paper on Canada Post and the digital age. First of all, 92% of Canadians surveyed—and this is in the discussion paper—say that door-to-door delivery is essential for people with mobility and health problems, including some elderly. I would add that with our aging population, there are many older adults who are going to find it difficult to travel to community boxes.

Second, another statistic from the discussion paper suggests that reducing delivery to every other day was the most popular cost reduction strategy supported by Canadians. Nobody really now needs their mail to be delivered every day.

In the executive summary to the recent discussion paper, it is stated that while Canada Post operates as a commercial corporation, it differs from for profit-making private sector corporations in that its primary mandate is one of public service. We want to emphasize that: that this is an essential public service, and the profit motive should not be near the top of the list of reasons for making changes.

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Our final panellist will be Mr. LaRusic.

[Bernie LaRusic, Past President, Senior Citizens and Pensioners of Nova Scotia]

Thank you very much. My presentation will be within limits.

Good morning, and thank you for the invitation. It's nice to see a lot of people here going across Canada to get all the information.

The Federation of Senior Citizens and Pensioners of Nova Scotia represents seniors through clubs and councils in rural and urban areas of the province. The seniors in all of these communities do not want another lifeline moved or removed.

The concept in the health community is home care. The present concept being put forward by Canada Post Corporation does not appear to support the view of maintaining seniors in their homes as long as possible, given such additions as the community boxes.

We are not the generation that sits with a device in our hands sending vast quantities of information on what appears to be a continuous basis. We enjoy family, friends, reading, watching our favourite TV programs, visiting, going to church, volunteering, and getting our mail at the door.

A letter carrier is a friend who also has a good understanding of the senior population and has proven to be a good friend and a neighbour in times of need.

Retention of home delivery is the question. The answer could be yes, with no changes, but what will occur? Canada Post Corporation is a business, but it's the government that reviews the running of their arm's-length business. The present method of delivering mail works well, although a senior in Sydney who mails a birthday card to a friend down the street can't believe that it will go to Halifax and back before it's delivered.

Canada Post Corporation's plans to improve the system seem to speak of the time-honoured money-saved dimension and not of services lost. The financial picture of Canada Post Corporation in recent years has shown an improvement in the bottom line. In 2011 they lost a little bit of money, just about $330 million. In 2012 they did okay, with $77 million. In 2013 it went back down to $169 million. In 2014 it was back up, and in 2015 it was back up. In fact, in 2016, it's looking good too.

However, in 2011 a Supreme Court decision cost Canada Post $250 million for pay equity from 1983 to 2002. The impact of the lockout by Canada Post in 2011 was somewhere between $50 million and $70 million. There was also a one-time cost relating to pension benefits of $63 million during this period as a result of new improvements. When put together, this would be a more telling picture of the 2011 financial statement.

Urban and rural mail delivery is being rerouted to the numbers reflected in a financial projections and statements report developed at the request of Canada Post Corporation. I have had only a few projects on which I was completely in charge. One was buying my van and the other was making sure the architect drawing the plans for our retirement home 20 years ago followed the directions and code. I would suggest that Canada Post give some direction to those who would forward the report to reflect their guidelines.

A very interesting point is that the Canada Post management do not fully support the view of the corporation. Those who understand and manage the operation of the corporation have done a good job in maintaining the home delivery system and have suggested other improvements that are not being considered. The suggestion of alternate-day delivery of mail may be acceptable, but delivery of parcels on such a schedule would not be acceptable.

Mary Traversy, a senior vice-president, has publicly acknowledged that many businesses, particularly small and medium-size businesses, rely upon regular delivery. The current president stressed the importance of daily mail delivery for the cash flow of businesses.

The Federation of Senior Citizens and Pensioners of Nova Scotia, unlike many organizations, does not possess any staff to assist in developing a presentation, let alone one with lots of graphs. Our strength is talking with seniors. We were notified on September 21 of an invitation; on September 22, you said we had to confirm to attend. With such short notice, it would be impossible for others to meet such deadlines. Of course there is the Internet, which the majority of seniors do not possess or operate.

As a youngster—a while ago—home delivery was to our parents' home, and more than likely by a veteran. Now, as a senior and as a seniors' representative, daily home delivery is still regarded as a service to be enjoyed and continued.

Our 43rd annual convention will be held in 2017, and the topic of home delivery, no matter what happens, will be on the agenda.

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Thank you all for adhering to the timeline.

Our first seven-minute intervention will go to Mr. Whalen.

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

Thank you, Mr. Chair, and thank you all for coming today. It's great to hear such a diversity of views among the seniors organizations, people representing low-income housing, and from charities who are users of the service.

As I said in my introductory remarks earlier today, which you might not have heard, during the election last year we made a commitment to put a moratorium on the implementation of community mailboxes and to hold nationwide consultations to learn from Canadians what they see as the future of their postal services. For the first part of that consultation, Minister Foote put out a task force that provided an interesting report examining the financial self-sustainability of Canada Post. The task force determined that CPC was not financially self-sustainable. There is some question as to the nature of the report, but that was their finding. We don't feel constrained by that and we're happy to hear your perspective so that we can entertain all possible views.

One of the interesting things, Mr. Kozloski, that you talked about was your use of Canada Post as the primary driver for the fundraising campaign for your organization. When you talk about door-to-door delivery, Canada Post refers to five different types of delivery models, and I would like to know what you consider to be door-to-door. Is it in urban areas when it's delivered right to the door, in apartment buildings where it's delivered to a common mail room with boxes, at the end of a driveway in a rural area, at the post office in a rural area, or in these community mailboxes? Is there more than one of those you consider to be door-to-door delivery?

[Dr. Thomas Kozloski]

I would consider direct door to door, at the end of a driveway, in a community box, or inside a building like a condo or an apartment building all to be door-to-door delivery.

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

When we look at the Canada Post report, we see they don't. They try to lump together community mailboxes with the centralized point in a building.

When you do your direct mail campaigns, do you find a difference in uptake in those campaigns between apartment buildings, or what you consider to be door to door, versus what you consider to be community mailboxes?