Government Operations Committee on Oct. 4th, 2016

[The Chair, Conservative, Tom Lukiwski]

I call the meeting to order.

Ladies, gentlemen and colleagues, I think we'll get started if we can. Welcome to our presenters and welcome to those of you who may be in the audience observing how these meetings work.

Let me start off by giving a few comments. As you undoubtedly are aware, the minister responsible for Canada Post, the Honourable Judy Foote, has engaged in a very aggressive, I believe, consultation process discussing and trying to determine the future of Canada Post.

The first phase of the consultation process was to establish a task force whose mandate was to determine or examine, at least to the best of their ability, the financial viability and sustainability of Canada Post. The task force has completed their work. They have submitted their report. We've had a chance to take a look at it, and this committee has had a chance to talk with the task force members.

Phase two is what we're in right now. We are in the midst of a cross-country tour, speaking with individuals, organizations, municipalities, and communities and asking them for their views on Canada Post and what they believe Canada Post should be doing to ensure its long-term viability. We're asking for suggestions and recommendations. That's why we're here tonight.

I'm going to ask all of you to keep your comments to five minutes or less. Following those opening comments, we will have a series of questions from all of our committee members. At the end of that time, all of your comments and questions, suggestions, recommendations will help us form part of our report, which will be tabled in Parliament no later than the end of this year.

After that brief introduction, I think we'll start now. Mr. White, I have you first on my list representing the Sydney and Area Chamber of Commerce. If you could make some opening comments in five minutes or less, sir, the floor is yours.

[Adrian White, Chief Executive Officer, Sydney and Area Chamber of Commerce]

Thank you.

The Sydney and Area Chamber of Commerce represents the business community as the voice of the private sector here in the Cape Breton Regional Municipality. We have a wide variation in the types of businesses and in the size of businesses in our community. Some of the businesses that we have are very technologically advanced, and I might say even further advanced than Canada Post is, but some of our businesses are not. Some of the businesses are run by very young individuals, while some of them are an older demographic as well.

My only reason for making that statement is that I understand that technology is evolving and so is the post office with it. I believe that's good commerce for the entire country, but there is a concern over the pace at which some of the technology is evolving not to put at a disadvantage some of the older business communities that might not be as comfortable with it or as familiar with it as one would hope they would be. Eventually, in time, I'm sure they will be, but I and my membership are concerned about the pace of transition that will be taking place over time.

That is just the opener for me. I don't think there's much more I can say at this point in time. I'd be happy to take your questions later in the program.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, and I thank you for your economy of words.

I now have two presenters from the Canadian Union of Postal Workers. Ms. MacEachern, I think we'll start with you, representing the Save Canada Post Campaign. You have five minutes or less, please.

[Kristen MacEachern, Coordinator, Save Canada Post Campaign, Canadian Union of Postal Workers]

Thank you. Good evening. My name is Kristen, obviously.

First off, I would like to say thank you to the committee for allowing me to speak regarding the future of Canada Post.

I'm not an expert and I'm not a CEO, but I am a postal worker and, more specifically, I'm a rural carrier, an RSMC. I do the job and I know the effects locally.

As a postal worker, a concerned citizen, and an owner of this tried and trusted public service, I'll say it's vital that we be given space to voice our concerns, and until this moment, we've been given very little opportunity to do so, so we appreciate the fact that we're being chosen to speak.

I want you all to know that I'm a proud postal worker and very proud of the job I do. Any postal workers I know feel exactly the same way. Having said that, I would like to make it perfectly clear that I'm not proud of the fact that our employer continuously forces us and the public to fight tooth and nail to do our jobs the best we can to provide the service that the Canadian public both deserves and is accustomed to.

Manufacturing crisis after crisis, which are unproven at all ends, and scaring the public has done what? To me it looks like self-sabotage. Canada Post continuously underestimates its performance. In every single year since 2009, its financial performance has been vastly superior to its projected losses. Look at 2014. They predicted a financial loss of $256 million, which included the impact of a price increase. The reality of 2014 was a $299 million profit. That's a difference of $555 million.

Part of this problem, I believe, is their attempt to show a decline in services that is just not there. Locally, in Antigonish, where I'm from, we had a thriving main street post office. There was ample parking and it was conveniently located in the downtown core.

Canada Post franchised out to the Shoppers Drug Mart that was next door and used some of the same parking lot. When this franchise opened, I knew what would happen. It would be the same thing that has been happening in offices all over Canada. It would not be long before we were moved, moved to a less convenient place further in distance from the downtown core and in a less visible location. It was just over one year later that they moved us to the Antigonish Mall, on the outskirts, far from downtown.

They decided to send customers to our retail outlet, in this case Shoppers Drug Mart, to pick up cards or parcels, again taking customers away from our office and giving that business to a franchise.

When you're not as accessible to the public and not in the line of sight daily, it affects the number of customers who will frequent your building. The numbers split between the corporate and retail outlet. Our corporate number is falling, which gave them further fodder for further cuts in this office, even though the numbers are not a true indicator of customer usage.

This brings me to another equally important issue: our rural offices. Our rural offices are covered by a moratorium that was announced by the Liberal government in 1994. The actual number of offices that were covered was 4,000, but we're down to 3,598 because the other 350-plus offices were shut down. The question is, why? I see rural offices thriving. I see them being a necessity in the communities that they belong to. I see postmasters' hours being cut and those workers being forced out of decent jobs, and in a lot of these communities, those decent jobs are few and far between.

I see vital hours, the 4:00 to 5:00 and before 10 a.m., being cut. They're the same hours the majority of the working public would use to access these offices. I see a huge lack of relief for these workers, and they have to close offices for lunch breaks because of it.

Creating a service that is not accessible is a great way to show a misrepresented decline and use. CUPW has offered many alternatives to the cuts and the raising of prices. Postal banking is one of them. Through my own research, I found that out of the roughly 136 communities in Nova Scotia, 103 of those communities do not have a bank, and it's desperately needed in these small communities, first nations reservations, etc.

Through diversification of the products we offer now, such as prepaid credit cards, and with broadband Internet, etc., and using infrastructure that is already existing, I can't understand why Canada Post has no ability to think outside the box that they've been living in for the last however many years.

The amount of money that Canada Post has spent on postal transformation and on the community mailbox conversion project could have been used as a test flight for some of these products and services, but instead they've spent it on projects that fail. They've spent it on projects that further alienate their customers and the workforce.

Canadians need this public service in one way or another, as do small businesses, seniors, online shoppers, and companies wishing to advertise.

We all deserve the best public service that can be offered. Speaking as one of the postal workers providing that service, I intend to continue delivering that service for a long time to come, even if I have to fight to do so.

Thank you for this opportunity.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. MacDonald, go ahead for five minutes or less, please.

[Gordon MacDonald, President, Local 117, Canadian Union of Postal Workers]

My name is Gordon MacDonald, and I want to thank you for the opportunity to appear before the standing committee to speak about our public post office.

Canada Post is a public service, one of the few public services we now have left in Canada, and Canada Post is a very profitable corporation, having had profits in 20 of the last 22 years.

I've worked for Canada Post for 31 years, and I've never seen such an outright attack of its own business as I have seen in the last four and a half years.

Here in Cape Breton we no longer prepare and sort our mail for the island. Canada Post now ships it to Halifax to be sorted and machined. Where it always took a one-day turnaround for local delivery, it now takes three to four days to get the same mail back to our customers locally.

We lost two and a half well-paying jobs here in small-town Cape Breton so that Canada Post could justify paying over $2 billion for letter-sorting machines when they knew Lettermail was falling off. It seems nobody wants to address this poor management.

Let's talk about Lettermail. Lettermail is mail like our power bills, cable bills, birthday cards, etc. CUPW is very aware that this specific revenue has been decreasing. I must stress that this is the only product that we have seen a decrease in, and our parcel sector is making Canada Post busier than it has ever been, with profits we have never seen before. Normally, we were a seasonal profit-driven corporation, but with revenue profits now coming in the second and third quarters, this is a great sign that Canada Post is on stable ground.

Canada Post is trying to eliminate our letter carrier delivery and have everyone go to community mailboxes down the street to get their mail. When I first started 31 years ago, security of the mail was paramount, and we were instructed at all costs to protect the mail. Today, in 2016, I've never seen such a disregard for the security of our mail. A community mailbox is made of aluminum door panels, and any would-be thief could pop those open with a screwdriver.

I can tell you for certain that our mail and the products you and I ship through Canada Post are of great value. People still mail rings, heirlooms, family pictures, art, important documents, and human remains, and the list goes on. If you can imagine it, Canada Post delivers it. Having door-to-door mail delivery is the only way to protect what we ship through Canada Post. It must also be noted that Canada Post handles not just Canadian mail but mail from all over the world, a world that believes we still protect its mail, which really isn't true today.

CUPW has been talking about expanding our services for decades, and management of Canada Post seems to want the exact opposite. Canada Post is set up to be able to deliver so much more to Canadians as a public service, but it seems only to want to destroy what is the only service in our country that can deliver to the last mile. We should be proud, but it's very difficult to be proud of this poorly run public service.

Can you imagine getting ready for your job in the morning, knowing your day consists of 25-plus kilometres of walking, carrying up to 35 pounds of mail on your back, having more than 1,000 customers to deliver to, and getting to do this every day? You also might not get home until 8 p.m. and miss your family mealtimes or your children's homework. Canada Post may force you out on overtime as well. If you can't physically get your work done, because it's impossible, you're now open to disciplinary procedures to add to your already miserable existence at Canada Post as their employee.

Canada Post in small-town Canada is the cornerstone of these places. People still gather at small community post offices to mingle, get the daily information, pick up their mail, and do their own mailing business. However, our new Canada Post will be in the drugstore or pharmacy where you go to pick up your mail products, as we see with the many postal outlets Canada Post is opening across the country. I go to a pharmacy for my medications, not a post office, and the same should be said for our mail.

We now have mail, usually parcels, that comes back to post offices because it can't be delivered for one reason or another, and customers cannot pick that mail up at the post office. They need to wait until a postal clerk scans it from the post office to the postal outlet, and then a truck comes and picks up the mail that is at the post office and takes it over to the postal outlet across the street, where now the customers can come pick it up. It makes no business sense whatsoever.

Thanks for listening.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, all of you.

We'll start with our seven-minute rounds of questions. Our first intervenor is Mr. Whalen.

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

Thank you very much, Mr. Chair.

Thank you all for coming here tonight.

As you know, this time last year we were in the midst of an election campaign. One of the promises made by our party during the campaign was that we would put a moratorium in place on the installation of community mailboxes and examine, through a consultation process—this process—what the future of Canada Post should look like: have it self-sustaining, provide it as a service, or in some other fashion continue its nation-building exercise that we've all come to know and to expect.

As part of this process, the task force prepared a report. The task force focused primarily on the financial aspects of Canada Post. As we review it, we're faced with some pretty stark realities—10 years out, we're looking at $700 million in annual losses at Canada Post. We have to find some way to address these.

My first question is to Mr. White.

Would the business community in the Cape Breton area be open to the idea of subsidizing Canada Post on an annual basis if the various types of transformations being proposed don't generate enough revenue to cover the cost of operations and to fund venture plans?

[Adrian White]

Do you mean paying for additional service beyond what you're currently...?

For instance, everyone buys a stamp to mail a letter. Everyone buys postage to mail a parcel. How would this subsidy be charged, or how would business find out how much subsidy—

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

Well, this is the question.

Various different options have been put on the table by the task force, from franchising to moving from door-to-door delivery in urban areas to community mailboxes. There are various things. Alternate-day delivery was one of the options that was proposed. There were various types of options proposed by the task force to save money for the corporation.

Even if all of those are implemented, they're still projecting some losses within the corporation. My question is to you as the representative of the business community in this area. To what extent would you be open to providing government subsidies to support the provision of the services?

[The Chair, Conservative, Tom Lukiwski]

Perhaps I could suggest, Mr. White, that it might be in the same fashion as the government subsidizes the CBC, to the tune of about a billion dollars a year.

[Adrian White]

I think they're a little different, the CBC and the post office.

In the business community, it's all about survival. In order to be a survivor, you have to be a competitor. If I'm subsidizing a service that my competitor is getting cheaper somewhere else, then I'm at a disadvantage.

Right from the start line on that one, I would say the answer is likely that we would resist a subsidy. We would really make a wide effort to seek alternatives to get the job done for us, whether that be a courier system that is less expensive than Canada Post, when you add the subsidy.... I think those other alternatives are yet to come out of the woods, if you put the price up or increase the cost of using this service beyond what is competitively reasonable.

Not only are we competing with business in this country, but we're also competing globally. That would definitely be a big concern, I believe, of our business community.

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

Mr. MacDonald, you talked about the locations of rural post offices where people can go to get their mail and also about the maintenance of door-to-door service. Can you describe for us a little bit the different types of delivery mechanisms that exist in the Cape Breton area, the area you represent?

[Gordon MacDonald]

The way we deliver mail here in Cape Breton is by foot routes, through letter carriers on foot. Our rural communities are done by our rural and suburban mail couriers, exactly the same as a mobile courier working in the urban operations would deliver the mail in the city—in Halifax, let's say. The RSMC people would deliver that same kind of mail in the same fashion.

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

Do you have community mailboxes in this area already?

[Gordon MacDonald]

There are community mailboxes in the rural communities, or outside the “iron ring”, as it's called in Canada Post—

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

Okay.

[Gordon MacDonald]

—but there was no conversion of foot walks during that disaster over the last four years.

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

With the existing community mailboxes outside the grandfathered regions, is there a large history of accidents, theft, or tampering with the mail?

[Gordon MacDonald]

You can imagine somewhere out in Balls Creek, where I know there's actually a community mailbox set up around a corner in by an isolated little lake. I think there are probably 40 or 50 customers who come to that box. That box has been vandalized, stolen from, tipped over. It's in an isolated area. It's secluded. It's unsafe for anybody to go to when it's dark, because there's no lighting. In all parts of rural Cape Breton you find those kinds of products in those kinds of areas and in those kinds of circumstances.

Then you can imagine that in the clearing of the roads and streets that has to be done, when the plow comes around, it knocks those things over. Seniors and people with disabilities are trying to get out to get to those places. These are all kinds of factors with those CMBs.

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

How many of these CMBs have been knocked down or vandalized, and how often does it affect mail delivery in Cape Breton? I mean actual—not imagined, but actual—disruption.

[Gordon MacDonald]

I would say that just last winter alone there were CMBs not delivered to over the course of eight to 10 days. In my opinion, that's a lot, because I've always been told “rain, snow, sleet, and hail...” and we lived by that during my years. That's not the case anymore; they'll stop mail delivery whenever they feel like it.

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

About how many small rural post offices are on the island of Cape Breton?

[Gordon MacDonald]

On the whole island...gosh, I have 35 in my local, and there are probably—

[Kristen MacEachern]

Just over 50 of them.