Evidence of meeting #38 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was business.

On the agenda

MPs speaking

Also speaking

Penny Walsh McGuire  Executive Director, Greater Charlottetown Area Chamber of Commerce
Katharine MacDonald  Owner, Milk & Amber
John Barrett  Director of Sales, Marketing and Development, Vesey's Seeds Ltd.
Scott Gaudet  Vice-President, Local 129, Canadian Union of Postal Workers
Marcia Carroll  Executive Director, The PEI Council of People with Disabilities

10:45 a.m.

Liberal

Yasmin Ratansi Liberal Don Valley East, ON

People have been pooh-poohing postal banking and saying that you would have to invest a billion dollars. That's nonsense, because Japan, Italy, and France all had the same problems as Canada Post and they turned it around. Japan now has $196 trillion yen in assets in its postal bank.

I'm just asking you, if you don't have it here but you want to give us answers, please do, because we have to think outside the box. If the status quo is not appreciated, let's move forward and say “What is it? What would you do with that?”

10:50 a.m.

Executive Director, Greater Charlottetown Area Chamber of Commerce

Penny Walsh McGuire

I'm kind of building on what Katharine was saying. There is huge infrastructure across Canada in very rural areas, and there are also small and medium-sized businesses perhaps looking for space. Is there a private-public partnership that could take place so that the infrastructure is not held at a loss and heavy cost to a public service that we hold dear? Is there another way to identify revenues through leasing or other options?

10:50 a.m.

Liberal

Yasmin Ratansi Liberal Don Valley East, ON

Also, if you are going to populate the remote areas of Canada, you need something, because we are all along the U.S. border. What are we going to do? We need population. How are we going to think to send population to remote areas? What sorts of services do you think Canada Post's current infrastructure could help?

10:50 a.m.

Executive Director, Greater Charlottetown Area Chamber of Commerce

Penny Walsh McGuire

I'd probably want to think a little bit about that in terms of the members that we represent and what kinds of services they could provide. I'm sure there are underserved areas of Canada, from a public service perspective, that could partner up with Canada Post.

10:50 a.m.

Liberal

Yasmin Ratansi Liberal Don Valley East, ON

If you have more thoughts, we would welcome them.

10:50 a.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you, both, for your presentations. They've been very helpful. We have enjoyed your perspective.

There's one thing I will suggest to you in particular, Ms. McGuire. You said you might have to talk to your members on some of the issues that were raised here today. Should you at any time have any additional information that you wish to give to our committee for the benefit of our deliberations, please contact our clerk directly. You can make submissions, and we will be tabling the report in Parliament probably before the end of the year. I would suggest that if sometime in the next couple of weeks you have additional information you want to submit, that you could do it in that timeframe, and that would be very much appreciated.

10:50 a.m.

Executive Director, Greater Charlottetown Area Chamber of Commerce

Penny Walsh McGuire

Is there a time frame around phase II beyond the report? Does the committee have a time frame in terms of implementing change?

10:50 a.m.

Conservative

The Chair Conservative Tom Lukiwski

I can't speak on behalf of the government, but certainly I don't believe the government is planning to make any changes right now. They want to see the report that we submit, and take some time to analyze that, so you would have additional time, I'm sure, but I'm just suggesting that if you want some of the information contained in the report that we're going to table in Parliament, if you could get it to us in the next couple of weeks, that would be helpful.

10:50 a.m.

Executive Director, Greater Charlottetown Area Chamber of Commerce

10:50 a.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you both.

We will suspend while the next panellists come to the table.

Thank you.

10:50 a.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you very much.

I believe that both of you gentlemen have been in the room and have observed the first session and know how the process works here. I won't have to go into that. I'll just remind you that we'll ask each of you to give a very brief opening statement, hopefully five minutes or less, which will be followed by questions by our committee members. We hope to elicit information on your perspective on the future of Canada Post.

Mr. Barrett, I have you first on my list. You have the floor. Go ahead for five minutes, please.

10:50 a.m.

John Barrett Director of Sales, Marketing and Development, Vesey's Seeds Ltd.

Thank you.

Welcome to Prince Edward Island. I hope you grasped the significance of the room that we're in today on the verge of the 150th birthday of Canada. This is Memorial Hall, the tribute to the Fathers of Confederation. I hope you have an enjoyable time when you're here.

Since 1939, Canada Post has played an integral role in the operations and success of our business, Vesey's Seeds Ltd. Currently, through address ad mail and letter mail services, Vesey's distributes approximately two million catalogues and various sales materials each year. As well, our firm ships well over 90% of its parcel volume through the Canada Post expedited parcel service. While our firm has choices when it comes to parcel delivery, our catalogue and sales literature distribution is solely dependent on the existing Canada Post letter mail service.

When mail delivery is threatened in the media due to a potential strike or a walk-out, our business suffers in two ways. Firstly, we have no choice but to find alternative means by which to ship our parcel business. In the vast majority of instances, this becomes more expensive than our current rates with Canada Post, as alternative carriers increase their pricing due to higher demand, therefore taking advantage of Canada-Post-dependent customers like us. As Vesey's customers have already paid their shipping and handling fee, any increases in delivery costs are an added expense to Vesey's Seeds.

Secondly, when the public perceives that there will likely be a disruption in mail service, sales volume drops. Many of our customers are rural and older, and as such, they still use the mail to send in their orders. As well, customers fear that they will not receive their order in a timely manner if there is a postal disruption. This problem is intensified for a company such as ours that ships living products, since the perception is that during a strike, the bulbs or the plants will sit at some Canada Post facility rotting. It would be my opinion that our firm has an excellent working relationship with both management and the union members of Canada Post. The president himself has visited our facility and we've spent a considerable amount of time over the years discussing the future of Canada Post with him and several other senior management people in the corporation.

I have no doubt that Canada Post is fully aware of the financial pressures under which they operate and that they've attempted to take the necessary steps to return the corporation to a profitable entity. However, I do believe that political interference and the strategies of Canada Post have hurt the image of the corporation and the profitability of their customers, and such interference has stood in the way of modernization and efficiency. Two such examples I'll highlight for you.

Regarding rural post offices and community mailboxes, I was asked a couple of years ago to meet with a senior management team at Canada Post to share any thoughts we might have on how the corporation might meet their goals of reducing expenditures. At that time, I cited the example of a rural post office I knew of that had a small number of mailboxes and employed two individuals. In this instance, I explained that a few decades ago, this location would have been considered rural, but now it services customers who regularly, if not daily, frequent an urban environment where there is a range of locations where parcels could be retrieved. When I explained how ludicrous it seemed that such a facility was still maintained by Canada Post, they were in complete agreement and explained that there were hundreds of similar situations across the country that were costing them millions of dollars a year to maintain. When asked why they weren't closed, the simple answer was that as soon as there's a hint that such a facility might close, the local MP will kick up a stink about losing possibly the two highest paid jobs in that rural community. If this is, in fact, the case, which I have no doubt it is, this form of political interference needs to stop and individual MPs need to take a big-picture view of Canada Post's mail delivery service.

Community mailboxes ended up being a political football during the most recent federal election. Various media outlets combed the woods for little old ladies and disgruntled postal workers to add fuel to the fire when it came to the planned switchover. In the case of Charlottetown, which already had a very large part of the urban centre served by community mailboxes, another crown corporation, the CBC, made it sound as if the world was coming to an end and that this was the first time anyone had ever seen or heard of the community mailbox. While, yes, there were some isolated instances of access problems, the implementation was blown way out of proportion. Again, we have another example of interference from an outside source.

I guess you're trying to get me to wind up here, but I do have a suggestion for you.

As a major mail order company in Canada—in fact, I think we've been told by Canada Post that we're their largest private sector client in Atlantic Canada—whether we like it or not, our firm's existence and profitability are tied to the continuation and the affordability of Canada Post's services. As such, we naturally have concerns when it comes to their efficiency, their pricing structure, and their uninterrupted service. It would be our hope that the threat of future labour interruptions be eliminated and that necessary steps be taken well in advance of contract deadlines to reach an equitable settlement for all parties concerned, especially their customers.

Canada Post's volume decreases dramatically during these times of uncertainty, and all customers do not return when that threat of disruption is removed. Obviously this has long-term ramifications for the corporation. My understanding of the current tentative agreement is that it will expire in a very short period of time, and we would urge government to take whatever action is required to eliminate the threat of potential service disruptions in the future.

11 a.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you.

Mr. Barrett, I was encouraging you to wrap it up, but it has been our experience that even though you may have other things in your brief you didn't get to say in your opening address, these will probably come out in the question period. We're trying to get to questions from our members as quickly as possible.

Mr. Gaudet, you're up for five minutes, please.

October 5th, 2016 / 11 a.m.

Scott Gaudet Vice-President, Local 129, Canadian Union of Postal Workers

Thank you.

Before I begin, I'd like to recognize that this meeting is taking place on the lands of the Mi'kmaq first nation.

Ladies and gentlemen of the committee, I'd like to thank you for giving me the opportunity to speak from a postal worker's point of view during this stage of your review. I have been working for the post office since 2001. In the last 15-plus years at the post office, I've seen many changes to services and a huge change in the actions of management.

For my presentation today, I wish to touch on two of the most concerning points of the current situation at the post office, namely, the effects of service changes on seniors, and the centralization of mail sorting and how this affects postal service on P.E.I.

In 2013 Deepak Chopra announced to Canadians that he would be changing the way Canadians receive their mail, and introduced draconian measures with the help of his Harper-government counterparts.

The implementation of community mailboxes began without any meaningful consultation with the public or the union. How could this happen? What would this mean for me and my co-workers? The post office isn't funded by taxpayers' dollars. It is a self-sustaining crown corporation. How could this guy lie to Canadians on CBC, telling us that he had talked to seniors and that they wanted this service? He implied that they looked forward to blizzards in January to go outside to get their mail, if only they could get into their boxes.

Not one senior I know agreed with Deepak. The percentage of the population aged 65 and over in my home community of Summerside was 18.2% in 2011, compared with the national average of 14.8%.

I have come to know many seniors and their daily habits through my personal interactions. Seniors are vulnerable to many dangers in my community during the winter season. I've had to help blind ladies on two occasions who were disoriented outside. I entered a seniors' apartment building only to smell spoke, and then alerted the residents. Their neighbours had left the stove on and a small fire had started. We contacted the residents in time to avert disaster. These are only a couple of examples of the above-and-beyond service letter carriers going door to door provide a community. Many examples happen every day across Canada. Just ask any postal worker.

In the 1980s, a pilot program was started by the Letter Carriers Union of Canada—now CUPW—the Canadian Labour Congress, and the United Way of Canada, called the letter carrier alert program. A similar program has been adopted by many countries in the world. This program works as a first step, or in a supporting role, to provide information for specialized service givers to react to the needs of seniors. I've provided more details about this system in the supporting documents for the committee.

With today's technology, the post office should be looking at expanding services, not cutting services and increasing rates. I could be going door to door, checking in on your aging parents, and immediately being in contact with you, your family, or health care providers about their needs. If the post office were properly managed we would still have postal banking, and I could provide services to seniors at the door, such as paying bills, doing money transfers, and so on. Many of the G-20 countries have postal banking. Why not Canada?

Pharmaceutical companies are some of the wealthiest companies in the world. Why not collaborate with them to create a pharmacare program that delivers medication to seniors at their door? A lot of postal outlets are located at Lawtons Drugs or Shoppers Drug Mart.

From 2008 to 2011 the post office invested $2.5 billion in capital investments to modernize the postal system. This money was used to purchase multi-line optical readers, mechanized machinery.

Here on P.E.I. every community with a post office has seen a dramatic cut in hours of service and a reduction in paid hours. In 2013, the post office implemented a centralized sorting machine in Halifax, Nova Scotia, exactly 300 kilometres or a three-hour car ride from my hometown of Summerside. All the mail is now trucked to Halifax from the island and then returned to P.E.I. for delivery. It now takes three to five days to deliver mail that once took one day.

The carbon footprint of trucking the mail back and forth from P.E.I. to Halifax is outrageous. We need to be moving toward a greener environment. In my depot, this has eliminated two full-time positions.

Local businesses have suffered from these changes. The post office has an obligation to its owners—the public. This is a crown corporation, not a non-government organization, as Deepak and his buddies wish it were.

Thank you for giving me the opportunity to speak at this session. I welcome any questions you may have.

11:05 a.m.

Conservative

The Chair Conservative Tom Lukiwski

Thank you both very much.

We'll start our questions right now.

Our first intervenor will be Mr. Whalen, for seven minutes.

11:05 a.m.

Liberal

Nick Whalen Liberal St. John's East, NL

Thank you to both of you for coming here today.

As we go across the country, we see a lot of similar themes develop, but there's no cookie-cutter solution to the problems that face Canada Post. Also, the types of services people want to see and how they're affected by Canada Post are slightly different everywhere.

Mr. Barrett, I want to start with you. We've heard a bit across the country from different types of businesses that the moving of sorting out of their local communities harmed the service level they could provide to their local customers. Have you seen that as a problem in your business in selling to people on the island?

11:05 a.m.

Director of Sales, Marketing and Development, Vesey's Seeds Ltd.

11:05 a.m.

Liberal

Nick Whalen Liberal St. John's East, NL

Another thing we heard from people was that because the U.S. Postal Service has better rates, and because of the Universal Postal Union standards that are applied when Americans use the postal services that go into Canada, Canadian businesses feel undercut. Do you see that as an issue that has affected your ability to sell into the U.S. versus Americans selling into Canada? How may that have affected you? Are you aware of the issue?

11:10 a.m.

Director of Sales, Marketing and Development, Vesey's Seeds Ltd.

John Barrett

Oh, I'm aware of the issue. We do business in the U.S. We have a U.S. company that I just returned from last night in Hartford, Michigan, where we ship tens of thousands of parcels through.

To directly answer your question, no, I've not seen that as a problem, in part because of the nature of our business. It's not like we're selling apparel or computer equipment. There are a lot more issues to ship the type of product that we sell from the U.S. into Canada than there would be with most mainstream catalogues, and for that reason, even if there were a difference between delivery costs, that would not be something that affects us.

There is a service we utilize in our U.S. operation, which I have suggested in the past would be great for us and, I'm sure, other people as well. It's called the FedEx SmartPost system. This is the most efficient and affordable system we have been able to find in the U.S., and it enables us to send small parcel shipments across the United States. Simply put, the service is a combination of efforts between Federal Express and the USPS. When each address is scanned in the system, the system determines how far the parcel will travel with FedEx and at what point it will handed off to the USPS for eventual home delivery. FedEx does the pickup and the invoicing, and somehow their system calculates the revenue share between the two companies.

Given the connection with Purolator, our country is far behind the U.S. in developing and promoting such a service offering. If a private company like FedEx can align itself with the USPS, one would think that Canada Post and its sister company Purolator could easily do the same. Should a system like that be offered by Canada Post, then we would change the manner in which we ship to the wide variety of business that we do.

In one particular case, we had a large fundraising program across the country wherein we shipped everything a school or a group might have sold. We shipped it in bulk on pallets by transport companies to that organization. In the U.S. we're able to offer the service that eliminates that hassle for the organization, and we're able to ship every one of their customers their product directly to their homes. Currently in Canada, however, we're unable to do that because it's cost prohibitive. The FedEx SmartPost system makes it affordable. We would love to see this—

11:10 a.m.

Liberal

Nick Whalen Liberal St. John's East, NL

That's interesting.

When we look at some of the things that have been proposed by the task force, they talked about further streamlining of processing operations and further synergies with Purolator, with those two combined items providing up to $82 million in annual savings. It must be on their radar because you've spoken with them about it.

When it comes to franchise outlets—and maybe this is more a question to you as a consumer—when you think of going to Canada Post, is it important to your business whether or not you're walking into a Canada Post that is associated with another corporation like Shoppers Drug Mart or that you're walking into a corporate store? Do you feel you're getting better service at one versus the other? How has past franchising of operations affected your business, and has it been significant or not?

11:10 a.m.

Director of Sales, Marketing and Development, Vesey's Seeds Ltd.

John Barrett

We have a large sampling. We're in every nook and cranny in this country. We don't have any complaints with the service. The delivery service standard is well within what we think is acceptable. We have an active customer base of 250,000 Canadians, and if there's an issue or if things are slow, then we hear from them because they are charged the shipping and handling rate, but it's not an issue for us. Only very rarely will something go missing. It will usually show up eventually.

11:10 a.m.

Liberal

Nick Whalen Liberal St. John's East, NL

Have you seen any differential between franchise operations versus corporate operations when those errors arise?

11:10 a.m.

Director of Sales, Marketing and Development, Vesey's Seeds Ltd.

John Barrett

No, and I'm not sure we would know what the end delivery point was anyway.

11:10 a.m.

Liberal

Nick Whalen Liberal St. John's East, NL

Okay.

Mr. Gaudet, on the issue of franchising, when the jobs are moved from corporate stores to a Shoppers Drug Mart or other franchise partners, how has that affected your membership? How does it affect pay levels? Do you represent the workers who are in the Shoppers Drug Mart and who work for Canada Post? How does it all play out from a labour-management perspective?

11:15 a.m.

Vice-President, Local 129, Canadian Union of Postal Workers

Scott Gaudet

Once a franchise is created, it is up to that franchisee to staff it. The Canadian Union of Postal Workers loses a member and then they go into the private sector. If they are a non-unionized worker who works in a franchise, their pay scale is quite a bit lower.

I know that in Summerside at the Murphy's Pharmacy, which is independent but similar to companies like Lawton's Drugs, the worker in there gets about $17 an hour compared to about $26 an hour, which is what a corporate retail worker would get. Obviously, that affects our membership as far as numbers go, but it also creates this divide since that person is doing the same work that CUPW workers are doing, but they're getting paid far less. Their benefits package would also be quite a bit less. It has a great effect on our membership.