Government Operations Committee on Oct. 6th, 2016

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Not at this point.

[Carson Atkinson]

No.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

My next question is going to be about the process, if postal banking was a solution.

By 2026, we expect Canada Post to have a $700-million shortfall accumulated. This committee has heard that 7% of Canadians told them that they would use some type of postal services through Canada Post, and 11% of businesses said they would use it, but it comes with investing a large amount of financing to get Canada Post up to speed. It would require capitalizing the banks, because to take in deposits you need to have a float. In the case of a payment bank in India, they took $500 million to get it started like that.

You require chequing, cash, reconciliation, compliance, training, licensing, money-laundering controls, on-site security, and SAP software to get it started. It's a large investment.

Do you think it would be a wise investment for Canada Post to get it there, or maybe instead use that money through a different government program or institution to attract banks and credit unions to open branches in smaller communities?

[Carson Atkinson]

I think, first of all, that it's too easy for banks, which are making burgeoning profits, if we look at Scotiabank as an example. This is not 2008 when they had perhaps an excuse to rationalize. They have increased their profits substantially year over year, whether it's the National Bank, Scotiabank, or any of the major banks. That's any of the major ones. There are some that have not had that much success.

To answer your question, I think it would be a good investment to invest that kind of money in that kind of structure. We have a community that has a major employer. Basically those services, the basic services, are going to be lost, and most people often drive by the door to go to work. They will not be driving by Scotiabank going through Minto. Access is important.

This mill is increasing in size, and is probably one of the most efficient east of the Rockies. We don't want to see our core business eroded, as is currently happening.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Another option for banking services would be to provide a free space where these banks could put in ATMs or actually bring in staff. Is that something that would be acceptable to your community, providing a building in your community where banks could position their services? Was that ever considered during this process?

[Carson Atkinson]

We marched this process through, in fact, meeting with one bank's executives and its vice-presidents. We took pictures all through the community. We have a site that we would basically give them that was going to be available. They would have to secure it and do the basic infrastructure.

We looked at Monday, Wednesday, Friday banking to provide that kind of basic need, especially to our seniors. They are a very large proportion of our population outside that younger group who works at the mill operations, the Cloud 5 call centre, or Service New Brunswick.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I'll give you an example. I'm from Alberta, and I represent a Calgary area. I have lived in small-town Alberta as well. After Alberta Treasury Branches, a quasi-bank owned by the Government of Alberta, upgraded its software in order to provide better banking services, it cost them $355 million and 76,000 hours of training, and that was only to train 5,000 employees. Canada Post has 50,000 employees who provide some type of service with a great many more branches.

This committee needs to look at the long-term sustainability of Canada Post. The investment required to get it to the point where it could provide a postal banking service would require a lot of financing from the government side.

Do you think we should do this through higher stamp costs or differential costs for letter delivery? Should we do it by raising taxes or direct subsidy, perhaps, from the government to Canada Post to finance this?

[Carson Atkinson]

My first point would be a direct subsidy, initially, because I think there's a payback in postal banking, and there's definitely payback in terms of the security of the people in our communities and the erosion that's happening in our small rural communities, which you mentioned. Do you want all of the small communities in our country hollowed out, so it's all in Vancouver, Toronto, Montreal, and Halifax, that kind of thing? That would be my question for you.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

There's another thing I'm going to ask then. Is there any room to consider whether it would be better.... The financing here is what I'm worried about, the sustainability of Canada Post. I very much don't want to see small communities hollowed out, but at the same time, if banks and what they consider low-volume institutions are closing, would investing all these funds result in Canada Post not making a turnaround despite those large profits that the chartered banks are making? Isn't there room for continued conversation, especially with the credit unions, to invite them in and have half of them stay in to open up shop within Canada Post locations themselves?

[The Chair, Conservative, Tom Lukiwski]

We're out of time, Mr. Kmiec, but I would hope that Mayor Atkinson will have an opportunity to answer your questions, perhaps on the next intervention.

Mr. Duvall, you have seven minutes.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Thank you to our guests for sharing their valuable time with us. We appreciate it.

Ms. Anderson, you mentioned in your statement that you felt that Canada Post should not exist as a crown corporation, and you also said that spending was out of control, and they're making post offices unfriendly. Could you go further with that? Why do you think that is happening?

[Amy Anderson]

I can go back about 15 or 20 years. We met with MPs in Ottawa when rural postal workers were starting to get organized, to unionize, and we met with several MPs who at that time told us that Canada Post should not be a crown corporation. That's where that line came from. They believed it should be privatized and not a crown corporation.

Excuse me, what was the second part of the question?

[Scott Duvall, NDP, Hamilton Mountain, ON]

That's good. I appreciate what you're saying there, but the other thing is, some of the ideas that we've been hearing at this committee from some of your colleagues at Canada Post are ideas to make it profitable. We've heard some good suggestions.

Have the union and Canada Post executive ever sat down together and tried to come up with a plan and ideas that they could work on to make it more profitable, and if so, what came out of those communications?

[Amy Anderson]

As far as I know, a lot of this probably went through...even just with the last round of negotiations. We all kind of know that the last round of negotiations was just two huge lockout threats to put us out on the street.

Canada Post doesn't seem to have any interest in expanding services. They seem to want to cut services more than expand. We're not quite sure why. We're not sure about the whole situation. There's no transparency there with Canada Post at all.

[Scott Duvall, NDP, Hamilton Mountain, ON]

It's more of an ultimatum, I guess, of do this or else; we don't need your services.

[Amy Anderson]

It seems that way.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Okay.

To the mayors, thanks very much for your remarks, especially on postal banking. I completely get that, especially coming from a small town. You need some help in there. You guys do have the offices. One of the things Canada Post did, however, when they announced under the previous government that they were going to stop door-to-door delivery service....

They have responsibilities on how they deliver the mail. Under the current system it's door to door. But now what's happening, from some of the ways they implemented this and the lack of communication, is that those boxes are in spots that don't show good urban planning. There's a cost related to that, which Canada Post has now caused for municipalities, i.e., snow clearing, garbage pickup, graffiti cleanup, and accessibility for people who have mobility issues. As a former city councillor, I was getting many other complaints, that we need lighting, that Canada Post is not answering the phone, and it was taking up a lot of our valuable time.

Do you believe those costs should be borne by the municipality for something that they should be providing a service for?

[Paolo Fongemie]

No, I don't think so. It should be their responsibility. They provide the service and it should be A to Z.

[Scott Duvall, NDP, Hamilton Mountain, ON]

When you had the community mailboxes come into place, was there no consultation, not even an attempt to sit with you to come up with this?

[Paolo Fongemie]

We're all a newly elected council. There's nobody from the past. Having said that, from talking with previous councillors and city management, there seems to have been a lack of communication and collaboration. It's as if we were working in silos.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Okay.

Mr. Atkinson, I'm not sure if you have door-to-door service in any of your areas.

[Carson Atkinson]

No, we have a central post office. In some circumstances they can pick up there, or they have to go to these outlying boxes to pick up. That's throughout the region.

[Scott Duvall, NDP, Hamilton Mountain, ON]

Has it always been that way?

[Carson Atkinson]

It's been that way for a long time.

And yes, there is a cost to us, as the mayor suggested, when we have to do clearing, bush cutting, keeping it open, things like that. They sometimes have someone who does that, but very often not adequately. The village ends up doing it.

[Scott Duvall, NDP, Hamilton Mountain, ON]

I experienced that many times with the City of Hamilton.

The other issue I have is this. You mentioned seniors and people with disabilities. There's an option where Canada Post has now said that if they can't get to the community mailbox, they might get a once-a-week pickup, or they could try to have their family and friends pick up their mail. To have the pickup delivered to them once a week, they'd need some kind of proof about their disability. There's a cost associated with this.

Do you think it's fair that the resident should have to pick up the cost for the change that Canada Post has implemented? Should the cost go to them, or should Canada Post be paying for this?