Government Operations Committee on Oct. 7th, 2016

[The Chair, Conservative, Tom Lukiwski]

Please give a very brief answer.

[David Mourinet]

Yes, exactly. That's what we are seeing.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. Kmiec, you have seven minutes.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Mr. Chair.

Thank you all for coming here today to give us your suggestions for the committee’s final report.

As I said to other witnesses this morning, according to the forecasts, the deficit will be at least $700 million by 2026. So this is about Canada Post’s viability.

I am going to start with you, Mr. Quesnel, because you are from a chamber of commerce and I also worked for a chamber of commerce in Calgary.

I would like to know what proposals to increase Canada Post’s revenue your members would be ready to accept. Would you be prepared to accept mail delivery with variable costs? It might cost more, for example, to send a letter from Lévis to Calgary than from Lévis to Saint-Romuald, or somewhere in Beauce.

[Maurice Quesnel]

Yes. That is much the same as when you send something overseas. The costs are higher. It’s a bit like the user-pay principle. I think business people are very aware of that. They know the difference. It’s what they do themselves with their customers. Construction costs will be different depending on whether something is done in Gaspé or in Quebec City. It’s the same for the postal service.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Okay.

I am now going to turn to Mr. Brun and Mr. Mourinet.

I am going to continue along the same lines as Mr. Ayoub and talk about the postal bank. Union people and business people have talked to us about it a lot. I don’t want to accuse you of being bankers because that would cause a credibility crisis like the one we have as politicians.

My question is rather about the way you run your credit unions. What leads you to open or close a branch in a region?

[Bernard Brun]

It is not a decision made by the group but by the location. The credit union makes the decision as a function of the use of its services. As I mentioned just now, when counter services fall to 3% and the vast majority of transactions are done electronically, it is simply not possible to maintain services in another way. That is in the purview of a credit union, given that ours is a centralized, federated system where people come together to make decisions.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I see the term “fintech”, financial technology, in a lot of articles. You are in an economic sector that is extremely competitive. There are banks and quasi-banks like Tangerine that put all their offices in shipping containers for a month to move them somewhere else. The sector is so competitive that banks cannot buy a building or lease one for very long.

You also mentioned reducing the number of letters you send by 30%. Is the goal of the Caisse to no longer send letters at all one day? Do you want to move to mobile banking services?

[David Mourinet]

We do indeed. The goal is to limit our mailings as much as possible and to have the vast majority of our customers do their transactions electronically. Some of the clientele will still need some specific services. Each credit union will then have to define its needs and decide if it wants to continue to serve those customers. Given the aging population, in the next 10 or 15 years, people will naturally want to do things digitally.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

In your sector, are your members and customers telling you that they want to have access to mobile banking services where, when, and how they want, without the need to go to a branch?

Do you also provide mobile services, for example, using advisors who go to the regions to provide services? Is it really your members dictating your choices or is it also a little bit of what you think?

[Bernard Brun]

There is a mix of the two, but our members ultimately decide.

With a 98% increase in services on the Internet or on technology platforms like AccèsD, the use of our physical services is in free-fall. So the members decide how they will use our services.

Of course, there are other solutions. For example, you referred to some banks that have mobile branches. We are studying that option and other similar prototypes.

It is now a matter of seeing how we are going to evolve with the public, and their needs and demands, in order to respond to them in the best way possible. We are presently seeing a major increase in anything to do with electronic services.

Last August, for the first time at Desjardins, there were more transactions by smart phone than by all our other methods combined. That gives you a bit of an idea of the trends.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

How much time do I still have left, Mr. Chair?

[The Chair, Conservative, Tom Lukiwski]

You still have one minute left.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Since I have one minute, I have another question. The important part for Desjardins is still profitability and how to provide the best service to members.

If one of your branches was in an area where Canada Post provided postal banking, would you be competing with Canada Post? Another witness, Ms. McLaughlin, thought Canada Post would become another competitor for the Caisses Desjardins.

Earlier, you mentioned that you do not see the postal banking service as competition. Would it be possible to establish a partnership with Canada Post?

[Bernard Brun]

Anything is possible with Canada Post. Canada Post has never approached us to that end.

Setting up a financial institution is extremely cumbersome in terms of regulations, costs, and everything else. I'm not sure whether this is a solution for Canada Post. Canada Post should carry out the analysis. Anything is possible after that.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Ms. Trudel, you have seven minutes.

[Karine Trudel, NDP, Jonquière, QC]

Thank you, Mr. Chair.

My thanks to the witnesses for their presentations.

Mr. Harvey, I know you didn’t have time to finish your presentation. I will give you my seven minutes so that you can finish.

A number of people representing seniors told us that seniors do not use the Internet to a large extent. The population is aging as well. Earlier, you mentioned some statistics that worry me because we will all be getting older.

I will therefore let you continue your presentation, which is very interesting, so that you can present your arguments.

[Dany Harvey]

Thank you very much.

Earlier, I mentioned a survey conducted in 2015, which showed that 85% of people have a very good opinion of letter carriers and they trust them. Letter carriers are Canada Post’s resources. Why not use them? Letter carriers are an asset, not a liability. We must not forget that Canada Post has a brand. When we think of Canada Post, the image of a letter carrier is the first that comes to mind, not that of a mailbox.

In addition, letter carriers have a calming presence in communities, for the elderly, but also for everyone, regardless of social class or age. Because letter carriers follow the same route every day in neighbourhoods, everyone knows them.

It is not uncommon to hear on the news—possibly three or four times a year—about cases of citizen action in which letter carriers lend a helping hand. Those can include fires, missing persons, 911 calls or seniors in difficulty. Letter carriers go to residences once a day; they know the faces and the habits of the occupants. If they deliver mail to someone who is usually always in the house and, after three days, the mailbox has not been emptied, they might think that something is wrong. Very often, letter carriers are in the best position—sometimes in an even better position than the neighbours—to realize something is wrong.

Credibility was also discussed. As I skimmed through the document that was presented, I noticed that the possibility of using Canada Post for deliveries is mentioned if marijuana is legalized. This shows that we have confidence in our letter carriers and that we believe they could take on this responsibility.

This means that they do good work, and especially that they are credible in the public eye. I think that is fundamental. We are talking about supporting the people, and I can give an example of what was done in the past. In 1982 or 1984, programs were established in various locations across Canada to provide basic support, such as home support in collaboration with local community service centres, or CLSCs. In the Montreal area in particular, it might be useful to implement a program like that for the aging population. I am talking about maintaining basic contact with the people.

Programs already exist. Are they new? No. We have already tried them. Many other countries, such as France, Belgium, Japan and Germany, have similar initiatives. Letter carriers do the visits.

Clearly, we are talking about an idea. We could determine whether it can be applied on a case-by-case basis. If necessary, I would be happy to come back to work on it with you.

Letter carriers can do some very simple checks. The people from Desjardins told us that we are in the era of technology with BlackBerrys and iPhones. Letter carriers can also use those devices to gather information. For example, they can use forms to ask health questions. The answers will just be yes or no. France uses systems like that. Japan has a system of visits for keeping watch. Say, someone is observed to be in poor health. If the respondent states that they are not doing well, then they can be referred to the appropriate medical authorities or CLSCs. In some cases, the program could include families.

To me, this is a vision, a dream, that seems appealing. I’m an outsider, not a letter carrier, to be clear. In past years, ads used to present Canada Post as an employer of choice. That has not been the case for some time.

If there is a key element, the letter carriers are it. Let's start using the positive contribution they can bring and build on that. These are suggestions. In Finland, there is a company called PostNorden, I think—I'm not sure, perhaps someone could confirm it—that provides a dynamic delivery service. Dynamic delivery may include the delivery of hot meals or laundry services. That’s quite significant, and I honestly don't think we are there yet. However, it seems interesting and may be worth exploring.

We have a skilled workforce, mobile and familiar with its routes. Why not give them an additional purpose, especially for the aging population? I am not in favour of keeping the elderly in cages. I love them. I am often in contact with them. If they want to stay in their homes, let's give them the tools to make that possible, at least let's give them the opportunity to discuss it.

That's why I'm pleased to be here. This kind of project is not one that we can wrap up in one or two years; it would take 15 years or so. As soon as we have discussions, we can set up pilot projects. Others countries have done so. It's something to think about.

We have competent people, so let's use put them to good use.

That's all.

Thank you very much.

[Karine Trudel, NDP, Jonquière, QC]

I have one minute left.

[Dany Harvey]

Go ahead.

[Karine Trudel, NDP, Jonquière, QC]

In the presentations just now, the Internet came up a lot. You are around aging people and you have that type of experience. I don't really want to get into specific statistics, but do you know how much those people are using the Internet? Do they use it to pay their bills or for mail?

[Dany Harvey]

It's a special situation. I'm quite tech savvy. I will often help fix bugs in billing and so on. Say what you will, but our memory is not longer the same as we age. You need to remember codes and so on. When you receive paper documents, you have them in your hands.

People sometimes say that we used to receive a lot of direct-mail advertising and that our mailboxes were full of junk, particularly pizza ads. That's also the case for our email inboxes; it's called spam. People are not used to or equipped for that.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. Lightbound, the floor is yours for seven minutes, please.

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

Thank you, Mr. Chair.

Many thanks to the four witnesses for being here with us today.

My first question is for the representatives from the Desjardins Group.

First of all, I want to thank you. In politics, we see that the Desjardins Group is very active in communities. I am pleased to be here in Lévis to meet with you.

You mentioned the decrease in your need for Canada Post's services. Right now, in the short and medium term, if mail were delivered every two days, what impact would that have on your use of Canada Post's services?

[David Mourinet]

If the mail were delivered every two days, we would have the opposite problem. We deal with some legal documents that require us to meet given deadlines. We could have a problem If we received those documents in two-day intervals.

The other issue is the people waiting for their cheques. We saw what happens when there's a hold-up just for one or three hours in a day. If people received their cheques two days later, they would be affected. Although people have the option of direct deposits, some expect to receive certain documents quickly, and they are literally waiting by their mailboxes.

So that would not be a solution for us right now. There may be less mail, but the fact remains that people want to receive their mail at the same rate, and it's important for us to receive some documents quickly.