Evidence of meeting #43 for Government Operations and Estimates in the 42nd Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was service.
Conservative
Kelly McCauley Conservative Edmonton West, AB
I'll do a shameless plug; you have a fantastic chamber of commerce.
President and Chief Executive Officer, St. Albert and District Chamber of Commerce
Thank you.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Ms. Mackintosh, welcome. I have to say I don't enjoy receiving your green bills every month, but I do. You mentioned 6.5 million bills, which is amazing, and only 840,000 on epost. What would it take to get epost instead of...? Is it just more understanding from the customers or...?
Manager, Billing Operations, EPCOR Utilities Inc.
In full disclosure, we do have the 840,000 epost customers but we have about an equal amount in a separate electronic billing service that EPCOR developed in-house. For us, it's easier to set up or to encourage a customer to go with the EPCOR e-bill internal version because we can enrol them over the phone.
Conservative
Kelly McCauley Conservative Edmonton West, AB
That is going to grow a lot more than the 6.5 million?
Conservative
Kelly McCauley Conservative Edmonton West, AB
That leads to my second question. The Ernst & Young forecast shows Canada Post in nine years being in a deficit of about $1 billion a year, which has to be made up by higher stamp prices or other efficiencies. Would you be interested in paying higher stamp prices?
Manager, Billing Operations, EPCOR Utilities Inc.
I don't think anyone would.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Thanks very much.
Ms. Schinke, welcome.
One of the things we're hearing from certain proponents of Canada Post postal banking is that they could set up in remote rural areas not served by banks, or they could set up beside a payday loan, offer a lot less expensive loans, take on higher risk loans, serve a different demographic, and still make enough money to offset this $1 billion potential loss down the road.
In your mind, knowing the payday loan system, is it doable that they could make up this ton of money while undercutting payday loan services and taking all this additional risk? Is it feasible?
Former Vice-President, Cash Money Inc.
It's a very complex business, much more so than most people think. Because really the eligibility is simple, one has to have a source of income and a bank account, it does make the risk quite high. You've seen in Canada alone, American players who have come here thinking that they can make a good go in the payday loan industry. Several have come in and moved out right away because they realize that the risk is high.
Although the fees sound quite steep, by the time you cover expenses, it's not quite as profitable as everyone thinks. It would only be profitable in very big volumes and with very specialized not only systems but the ability to hold cash. Of course collections is a big part of it. Most of the payday loan lenders have very large and specialized call centres, so it's not quite as simple as it might sound.
Conservative
Kelly McCauley Conservative Edmonton West, AB
One of the interesting questions posed was if there was postal banking, what would happen the very first time the Government of Canada tried to repossess grandma's car?
Conservative
Kelly McCauley Conservative Edmonton West, AB
The comment came back that we wouldn't, we would never take, we would just give. I'm not sure if that's possible.
On the small rural areas that aren't served by banks, it has been suggested that Canada Post can set up postal banking in a small town that might only have five or 10 people a day visiting. Is that feasible? Could that be profitable even for a payday loan company without the huge...?
Former Vice-President, Cash Money Inc.
Again, there might only be five or 10 people visiting during normal business times, but when it's busy is after work. That's when people do their postal, probably, and then they would do their loans at the same time. Waiting in lineups is not something that the payday loans....
Conservative
Former Vice-President, Cash Money Inc.
I think it could be feasible but keep in mind now that like many other industries, it's shifting online, so that anyone in Canada can be served online.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Ms. Moffat, I'll just bounce back to you very quickly. I just wanted to touch back on the pricing, and Ms. Mackintosh brought it up as well. One of the things we're hearing from various chambers across the country is that they do appreciate Canada Post. It's very important, especially with e-commerce. They want better services but they want someone else to pay.
Do you think your members would be willing to pay higher stamp prices, higher shipping prices, to maintain perhaps the post office downtown or maintain the current service centres we have right now knowing, again, we have projected a $1-billion loss down the road?
President and Chief Executive Officer, St. Albert and District Chamber of Commerce
The timing of that question is very poor, because today we have a very poor economy. We have a provincial government that has some new programs in place that are challenging to businesses, particularly small businesses, and very costly. To add another cost to their ability to create a profit out of their business is pretty scary. If you had asked me that question three years ago, I would have told you that all entrepreneurs are very hard workers and that business they have is their future and their family's future and the community's future, and if there is an additional cost for being able to operate successfully and efficiently—and where Canada Post comes in is on the efficiency part of it—then I believe they would have gladly paid an extra fee. But now, under the circumstances today, it's a very different story.
Conservative
Linda Duncan NDP Edmonton Strathcona, AB
Thanks.
Yes, I'm an interloper here, because I'm an Albertan.
It's great to see three women appearing here and testifying. I appreciate it.
My first question is to Ms. Mackintosh and Ms. Moffat. One of the proposals by Canada Post is to get rid of the uniform rate of postage and let it vary with the cost of delivery, based on distance or speed of delivery. What's your perspective on that?
Manager, Billing Operations, EPCOR Utilities Inc.
I think for EPCOR it's not a bad option. I think we would be open to it. It would create the need for us to alter the way that we forecast our costs, as an example, because right now we don't necessarily differentiate between, say, sending a bill in Edmonton versus elsewhere in the province. I think we'd be open to the idea.
NDP
Linda Duncan NDP Edmonton Strathcona, AB
Your business is essentially just mailing across the province.
Manager, Billing Operations, EPCOR Utilities Inc.
For the majority, yes.
