Government Operations Committee on Oct. 7th, 2016

[Hervé Esch]

There is absolutely no service in a small municipality such as mine. As I was saying, we do not even have a post office. The nearest one is seven kilometers away, and the one that serves us is 15 kilometers away.

A little earlier I was talking about municipalities near my own that are located just off Highway 132, on a road that leads only to the farthest municipality. It stops there. The region is called Les Plateaux. On those plateaux, there are three municipalities. There was a central post office. Last year or the year before, the Caisse Desjardins decided to close—

[Joël Lightbound, Liberal, Louis-Hébert, QC]

You are talking about the Caisse.

[Hervé Esch]

The surrounding municipalities have all adopted a resolution requesting that the Caisse Desjardins reverse its decision. That has not been done.

Earlier we talked about the aging populations of those municipalities. That is all the more important since these services are provided near those people. It is harder for them to travel. They are already outside the major centres. The Canada Post office is really the only place where all kinds of services could be brought together.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

For example, if a banking service was offered at a Canada Post office near those three municipalities, they would have services. They would at least have access to a banking service.

[Hervé Esch]

That is correct.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

It is 25 kilometers away at the moment, is it not?

[Hervé Esch]

Yes, it is 25 kilometers from the most remote municipality.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

Mr. Anderson, I very much enjoyed your presentation. I must tell you I am very much in favour of the idea of a banking service being offered by Canada Post. The profits that have been generated in Switzerland, New Zealand, France, Italy, and the UK are quite impressive. If it works everywhere else, why should it fail here?

I would like you to tell me about the most promising model in this area. If you have looked at what is being done internationally, what would be the best example for Canada to follow?

[John Anderson]

That is a tough question. However, I think Canada Post should open a bank. It is not hard to do. Walmart, Canadian Tire, and Rogers Communications have done it. A company like Canada Post can open a bank.

The federal government already has expertise in that area. The Business Development Bank of Canada, BDC, Export Development Canada, EDC, and Farm Credit Canada are already in existence.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

BDC is highly profitable.

[John Anderson]

Those three institutions within the federal government have banking expertise. Certain people who work there can therefore be called upon to assist Canada Post.

Partnerships must also be established to offer certain services. Consider Switzerland, for example. PostFinance is the Swiss bank for many services. However, if you want a mortgage, it will be provided by a private bank. If you want to invest in the stock market, that is also done through a private institution. Partnerships can therefore be established with other institutions for certain services.

It is preferable to start out cautiously. We can begin with certain services. We can conduct trials by offering a few services in certain regions. If that works, then the range of services can be expanded.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

In Switzerland, for example, in the case of mortgages, the postal service is becoming an intermediary between the private institution and—

[John Anderson]

That is correct. You do not need to open a bank tomorrow and offer all services across Canada. You can do it gradually.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

I will stop you right there because I do not have much time left and I have one final question for you.

You piqued my curiosity when you mentioned reserves. You said only 56 out of more than 600 reserves in Canada had banking services.

[John Anderson]

That is correct. There are some in municipalities such as Saskatoon. That is the case of the First Nations Bank of Canada.

[Joël Lightbound, Liberal, Louis-Hébert, QC]

How many of them have access to postal services?

[John Anderson]

The majority.

[The Chair, Conservative, Tom Lukiwski]

Mr. Lightbound, you're out of time.

We have two interventions left. Both will be five minutes.

First up is Mr. McCauley, please.

[Kelly McCauley, Conservative, Edmonton West, AB]

Good morning, gentlemen. Thank you for having us here in your beautiful area. It's so nice to be back in Quebec City.

Mr. Thériault, over the last couple of weeks, we've seen members from CUPW disputing every day here the numbers in your report. We know that Ernst & Young have confirmed the financial assessment that you've put forward. Where do you think CUPW is getting different numbers, drastically different numbers, from what you've presented?

[Louis Thériault]

The short answer is that there were some changes implemented by Canada Post, so that what we anticipated for 2020 wouldn't be the outcome. There was a postal transformation process with incremental changes—the community mailbox, for example. Some of the scenarios, in fact, that were put forward, in terms of the analysis we did in 2013, have been put in place. That explains why the....

It was a scenario back then, just to illustrate that there was some pressure building.

[Kelly McCauley, Conservative, Edmonton West, AB]

Is it fair to say last year's positive results in the first two quarters of this year reflect some of the changes of the five-point plan, the CMBs, and the stamp increase as well?

[Louis Thériault]

Exactly. The price increase, labour, service, community mailbox—all those things were measured as part of the scenario.

[Kelly McCauley, Conservative, Edmonton West, AB]

Not that we have a moratorium on those savings issues for Canada Post—I know it's difficult to put it together—but let's say we freeze those and don't do anything else. Do you think the 2026 numbers that Ernst & Young put together in the report would still be valid at a loss of about $750 million?

[Louis Thériault]

Yes, and I think the big elephant in the room is the pension issue, something that we had put aside assuming that it could be solved somehow, but it's going to have to be dealt with.

[Kelly McCauley, Conservative, Edmonton West, AB]

When we chatted with the task force, they supported the five-point plan, but they said it actually did not go far enough.

What would you do if, for instance, they said it wasn't going far enough to address these potential losses in the future?