On behalf of the Canadian Union of Postal Workers, I'm grateful for the opportunity to appear before the Standing Committee on Government Operations and Estimates.
I'd like to use my time today to address a key component of our public postal service, which is universal service at a uniform price. I've taken the liberty of handing out that part of our extensive brief for your reference so that you have it in front of you.
As a crown corporation, Canada Post engages in both public and private activities, but is ultimately designed to serve the public interest, not simply to maximize profit. Universal service at a uniform price is one of the ways the corporation does this. Canada's geography is vast and its density is sparse outside of major urban centres. The post office has played a key role in the development of our vast land. It has linked communities and united regions and territories. It has ensured that all people, regardless of geographic location, have enough access to an affordable means of communication. That is why the core principle of the public post office is that a basic letter can go anywhere from coast to coast for the same price.
An address is an address no matter where in Canada. Despite changes in mail use over the years, support for that principle remains very high today. Although it did not appear to make the list of 37 options, we're very concerned that the task force mentioned the possibility of distance-based pricing for letter mail. A pricing scheme like that undermines the very idea of universality. It's hard to see how it would be in the interest of Canadians or Canada Post as a public service.
Some mail users could be forced to pay a higher price merely because of where they live or do business. We're very concerned that this would discourage the use of the mail system and in turn suppress volumes and revenue. It could also have a disproportionate impact on seniors, low-income and middle-income rural residents, and people in northern and indigenous communities. This situation would be compounded where there's a lack of online connectivity, further marginalizing those who rely on the mail as a vital form of communication to access government and other services not available in their area.
As noted in our submission, and I'll refer you to page 12, distance pricing also conflicts with the findings and recommendations of previous post office reviews. We also included polling data spanning the last 20 years, which shows virtually unwavering support for uniform pricing. As far back as 1996, Angus Reid reported that 91% of respondents were in favour of universal service at uniform rates. Polling by Ipsos Reid in 2008, and Stratcom in 2013, examined the loss of uniform pricing in the event of deregulation. In both cases, opposition to deregulation was very strong at seven out of 10 people. However, many proponents of deregulation—44% in 2008 and 58% in 2013—would change their minds about allowing private companies to deliver the mail if it meant that uniform pricing could be jeopardized.
Given the necessity and popularity of the uniform rate, how should basic letter prices be determined? As required by subsection 19(2) of the Canada Post Corporation Act, postage rates must be fair and reasonable, and when combined with other revenues, be sufficient to defray the costs incurred by the corporation in the conduct of its operations under the act.
On postage pricing, we recommend the committee consider the creation of a comprehensive postage-rate-cap model that accommodates for inflation plus Canada Post's other input costs. I'll refer you to page 10 of the brief.
The 2008 strategic review recommended similar measures. Such a simple and clear measure creates a transparent policy that upholds the requirement of fair and reasonable pricing. It would create some independence from political pressures on postage pricing, and it could also provide the public, non-profits, small businesses, and commercial mailers with the ability to plan for incremental increases.
Finally, it would help avoid the sticker shock of drastic rate hikes that seem to be of general concern to the public and businesses, as we've seen with the 35% to 59% increase that's part of Canada Post's five-point plan.
We would also like to see a narrowing of the gap between commercial and individual pricing, with one exception. We would like the committee to recommend the creation of a special rate for qualified non-profit organizations, similar to that of the United States Postal Service.
I would like to thank you for the time today to present to you. I would also be happy to answer any questions you might have.