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.