Government Operations Committee on Oct. 18th, 2016

[Karen Kennedy]

I would agree with that, but I don't think you can run it in a business model entirely. It's a service for taxpayers, and it provides a service that no one else can provide. The way that people look at Canada Post cannot be purchased by another company. The security they feel with the mail delivery and the confidence they have in that is not something that can be purchased. Don't lose that.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

In your opinion, it should break even rather than make a profit. Is that how you see it, because if I am providing service and if you look at the task force report, and look at Ernst & Young's projection...?

I am sure we will have Ernst & Young before us, because we need to see what their assumptions were. Their assumptions may have been misaligned. Their assumption is that we're going to go into a $700-million deficit in 2026. If that's the assumption they've made, we need to revisit their assumptions as to what their revenue projections were. Everybody tells us that Canada Post is making revenue, and that they had made $45 million.

Is it break even or profit mode?

[Mike Nickel]

I'll give you an example.

We talked about front yards in bloom, and I'm not here on behalf of city council, but I'm the person who runs front yards in bloom in association with Canada Post postal workers.

I'll be quite frank. It was all run by the city, and then what I did is I took it off the tax roll. It's a civic beautification program recognizing people's front yards and the work that they do. I got corporate sponsorships and took it off the tax roll. I have one city worker on it now, and with the participation of postal workers and other people out there, we value-added that program so it's no longer on the tax roll.

I don't believe that Canada Post, with all the assets under it, cannot reach revenue neutrality over time.

On Ernst & Young, I could give you my opinion on accountants another day.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I'm an accountant.

[Mike Nickel]

Some I like but some I don't like. It's kind of like lawyers.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Okay. I have a very short time, so, Ms. Kennedy, is it break even or profit motivation?

[Karen Kennedy]

I don't think it necessarily has to be one or the other. I think that the expansion of services could create a situation where you're increasing your profit. I would be hesitant to say that I accept everything that would be in the report you referred to.

We have city streets that don't make money, but they're a public service that we have to provide. I think that the Canada—

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Would you like to subsidize it if it doesn't make money? It's the tax roll that you have. No service is free. What would you like to do?

[Karen Kennedy]

I don't believe that it's not making money.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Okay, fair enough.

[Mike Nickel]

There's a problem with the accounting side. As you know, there's a difference between public accounting and what we do in the private sector. That needs to be straightened out first before we can get a real picture.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Fair enough. We will do that. When we look at Canada Post, I guess their mandate over time has changed, and perhaps they have franchised a lot, with 40% franchised and 60% corporate owned. It has been a devolution of service, or cut, cut, cut, and you guys are saying, grow, grow, grow. Give us some ideas of how they can leverage their assets and the distribution network to grow.

[Mike Nickel]

Do you want to go first, or shall I?

[Yasmin Ratansi, Liberal, Don Valley East, ON]

You can always give us a paper if you don't finish.

[Mike Nickel]

We have to take a playbook out of other areas. If you go to the micro-loan industry, and you look at India, and you look in third world countries, there is a gap between what the banks are serving right now and the payday loans folks, for example, who were here previously. I think Canada Post can act as the societal hub. For example, the argument is very simple. If you can't get a bank account from a traditional bank, how am I supposed to get you your cheque from the government all the way through? There has to be a stopgap measure someplace in here so that we're not suffering inefficiencies with regard to the transactional costs of some of these other companies. I think Canada Post can be that hub, and certainly in those deep urban centres with those individuals of no fixed address, for example, who need a bank account.

The other argument is on the micro-loans side, also as a societal hub. We're not talking about tens of thousands of dollars. If you want to have great community impact, then sometimes it only take a hundred or a thousand dollars for these entrepreneurs really to start moving forward. We've learned those cases, and those cases are in other countries. There are those opportunities as well.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Ms. Kennedy.

[Karen Kennedy]

I think you should be prepared to subsidize it. I think that the public service, the communication network, and the way that makes Canadians feel has a value, as well, on a balance sheet. There are lots of innovative ideas that have been tried. I worked at the first new direction outlet they had at the West Edmonton Mall, for example, when we went storefront. There are lots of things that have been folded up and then they come back 10 years later in a different form. Right now, in Edmonton, we have a drive-through postal outlet in the west end that they are trying out. There are various things going on.

Another example would be the money order form. I have friends who work at the main post office who are constantly intervening with people who have been scammed because somebody has talked them into sending money to some other part of the world and it's fraud. There are lots of things that are going on that we're not aware of. It's about the way we interact in the community that's important, and that has a value.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. Clarke, you have seven minutes.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

I'll start with Mr. Nickel.

Mr. Nickel, you say you're not here as a city councillor, but all my questions will focus on this role or rather on the knowledge you've acquired in your work.

For the citizens of Edmonton, is the Canada Post Corporation a national symbol that contributes to the country's unity?

[Mike Nickel]

I think you have to recognize the generation gap between the millennials and who we are today, which is my demographic. What I understood about Canada Post.... When I was a child, all I saw were postal strikes. That's what I remember as a child around Christmas, but that's not the Canada Post today. It's a very different organization. From a branding exercise, Canada Post is not the same, and I don't see that attachment. I would also say the same thing for the railways and CBC. Their brands are not the same as we understood them 20 years ago.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

That's a good answer. Thank you.

For your citizens, what does home delivery look like? Is it a door-to-door, an end of the driveway or a community mailbox service?

[Mike Nickel]

I come from a ward that is mixed. I have door to door in my mature neighbourhoods and on the southern end of my jurisdiction, I have super mailboxes; I get both. The door-to-door aspect of it, certainly in my mature neighbourhoods, is not only about mail. It's about contact. It's about seeing somebody on the street and having eyes on the street, and they see inherent value in that. My argument is that I think a lot of those citizens would like their door-to-door delivery back, but, back to the subsidy question, once we have the accounting straightened out, I think we need to value-add to the point where we can reduce that subsidy as much as possible.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Did Canada Post representatives consult you or the mayor of Edmonton before installing community mailboxes, if that's the case?

[Mike Nickel]

When I hear about a super mailbox going in, usually it's a complaint. Period.