Government Operations Committee on Oct. 18th, 2016

[The Chair, Conservative, Tom Lukiwski]

Colleagues, ladies and gentlemen, we'll begin now.

To the panellists, thank you all for being here, and taking time out of your busy schedules. I think you understand the process we're going to follow here. I had an opportunity to speak briefly with you just a few moments ago.

We're going to ask all of you to give an opening statement of five minutes or less. Some of your written comments that I see look like they might be a little longer than five minutes, so I'll be giving you all a one-minute wrap-up signal, if you care to look up during your presentations.

I will have to be firm, unfortunately, on the five minutes, so that we can allow questions from all of our committee members and still have enough time to complete our next panel. Witnesses will be coming immediately behind you. It has been our experience that even if you don't get through all of your presentations, usually the points you want to make will come through during questions and answers.

So with that brief introduction, we'll get going.

Mr. Rosendorff, for five minutes, please, the floor is yours.

[Steven Rosendorff, Vice-President, Business Development, CapieKonsult]

Thank you.

In my experience with not-for-profits, both at the Red Cross and in the town of High River where we made extensive use of mail-outs, we did not find any difference in the success or lack of success of mail-outs that go out to either houses or boxes. For us, there was no difference at all.

Canada Post is very good at alerting us about the strikes that tend to happen from time to time before they happen so that we can make alternate arrangements if we need to—the proverbial Plan B.

In my private capacity, not professionally or workwise, I want to touch on the issue of postboxes versus home delivery. For five years, we lived in a house where we had a postbox. It was an absolutely amazing experience to walk to the postbox and meet other people who lived near you or who you would see driving past. It created a sense of community and camaraderie; people got to know each other; people went for walks, and people got exercise. They would drive home, and then go and fetch the post.

Then we moved to the house we are in currently, where for the first two years we got home delivery. We saw all these new neighbours, and we never met them. Everybody just waved to each other. Then, suddenly, we got postboxes. One or two people complained, but today the whole crescent knows everybody because we make a point of going for a walk around the block to fetch the post. People get exercise; people meet each other; people have become friends, and people have gone into each other's homes.

I think it makes logical sense. People get exercise. People get out into the fresh air. There are occasions when people are away, and we borrow each other's keys. For the elderly, we go and help them, take their post for them, and they get to meet the community as well.

Whereas it was cool to have a postman coming and to see him every day, he never came inside. We never got to know him, and it was just a wave, whereas now, everybody who lives in the same area that's affected by the same box, is getting to know each other. I think it adds to inclusivity and diversity, and all the things that make Canada great. All these people from different places are suddenly now talking to each other. In the past, we could have lived there for 10 years, and just waved at them every day, as a lot of us do.

That's my pitch about Canada Post and boxes versus home delivery. I'm not even going to touch on the cost of having vehicles start and stop all the time, because that's an astronomical cost.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Ms. Beale.

[Anna Beale, Former President, Local 710, Canadian Union of Postal Workers]

Thank you for allowing me to speak with respect to the future of Canada Post. This is going to be a joint presentation, which is why Frank Goldie's name is on here as well.

I'm representing the Canadian Union of Postal Workers. I've been a postal clerk with Canada Post for 39 years.

What would benefit Canada Post is to diversify. When the Conference Board of Canada's report about Canada Post came out, it projected huge losses for the next five years. When a company is projecting dire circumstances like that, they look for other ways to make money, such as diversifying.

Canada Post can do that in ways such as postal banking. I have given you an attachment about different things that Canada Post could get into.

Regarding postal banking, we have post offices in towns where the bank has moved out and left nothing in its place for the citizens to do their banking. Canada Post could fill that void. Money Mart and payday loan companies are ripping off citizens. Postal banking could take their place, providing loans at affordable rates for citizens who find themselves in these dire circumstances.

We gave a postal banking presentation to Canada Post in negotiations this past year, and I was part of the negotiating committee. Canada Post wasn't interested in postal banking and, instead, said it would wait to see what the results of this committee would be.

Postal banking would cover that niche that is not presently covered. Our retail clerks already have financial training, in case anyone was wondering about that. They're trained when new products and services are introduced to them by Canada Post, and this happens regularly.

Logistics is another area. Due to the size of our network, this is an area we should get into. We operate from shore to shore to shore. Canada Post is part of it now, with the company shipping machine parts and so on through the mail, so why not take this one step further? In fact, I can remember, when I was working parcels one night, there were John Deere tractor parts being shipped, along with somebody's teacup.

Many companies don't keep lots of parts on hand—and you know your mechanic is one of them—and, instead, call to have them shipped. One call to Canada Post and the item would be ordered, picked up, and delivered—one call does it all. This could be from Texas to Fort McMurray.

A company with a machine that costs $100,000 that is sitting idle due to a broken part would gladly be on board with this.

Another prospect is that some companies do warehousing for another company. When we would get a call, we could pick, fill, and deliver for a company such as Coles bookstore, for example.

Instead of contracting out, Canada Post should be contracting in. We could pick up from a customer and guarantee their products would be on the next flight.

Another area that Canada Post could get into in the future is 3-D printing. We have the vehicles that could do that.

With regard to retail, our retail network is huge and very underutilized. Our clerks should be selling bus passes, travel insurance, and gift cards. The public could be paying their utility bills there. Many Service Canada offices were closed under the previous Conservative government, and we could be bringing back services, such as assisting people to fill out their forms. We could be selling mortgages. We could have a computer for the public to use to access the Internet in our retail outlets. Not everybody has a computer today, and this would provide that service in the community, for a fee. People could order online and ship through Canada Post. We sell packaging now. We could provide the service of doing the actual packaging for them, for a fee. We know how the system works, and we know how a package should be wrapped, because we work there.

Currently, we sell licences for hunting birds. We could also sell the rest of the hunting licences and fishing licences. We could do passport checks. We could sell event tickets for events happening in the community. We could be the third national cell network.

We are in favour of Canada Post growing. At the negotiation table, Canada Post wanted to be able to deliver larger-sized householders and heavier householders. It told us that was what its customers wanted. We agreed to do that, to have that in the collective agreement.

Canada Post also wanted to expand into evening and weekend parcel delivery, to grow its parcel business. We agreed to do that as well. These things would provide more money for Canada Post and provide more middle-class jobs.

As you probably know, in September, the task force predicted a $63-million loss. It didn't take into account the new sources of revenue we agreed to at negotiations and, instead, Canada Post made a profit instead of the loss it had predicted.

We should be leveraging our network and be competitive. We don't want to be a burden on the Canadian taxpayer in the future.

All of the above will bring in profits to Canada Post, create jobs for no extra cost, and protect the middle class, and it wouldn't have to go to the government, to the public, to be subsidized.

As you know, Canada Post has been financially self-sufficient for years. We pay for ourselves. Instead of Canada Post retail offices contracting out work, for example, to private retail outlets, Canada Post should be contracting in, as shown above, resulting in a stable, experienced workforce, decent-paying, potentially full-time, middle-class jobs, and a viable, relevant post office.

Thank you for your time.

[The Chair, Conservative, Tom Lukiwski]

If we ever need a speed-reading course, we'll make sure to contract you.

[Anna Beale]

Five minutes is not very long.

[The Chair, Conservative, Tom Lukiwski]

It's not very long at all.

Thank you for that.

Mr. Bennett, you're on for five minutes. Go ahead, please.

[David Bennett, As an Individual]

Thank you for this opportunity to appear before the Standing Committee on Government Operations and Estimates.

My presentation will focus on the five basic themes seen in my submission.

In his 1989 book, Home Game, the celebrated goalie Ken Dryden writes eloquently and passionately about the game of hockey and its significance as a cultural icon to Canadians. He is especially astute when he recounts the importance of the local arena to so many towns and cities, large and small, across the country, and especially here in the west.

Hockey has spurred the building of community centres. Sadly, the disappearance of the local arena has often been the final death knell of many struggling communities. Our communities tell us about who we are and help to bind us together in good times and bad.

Canada is a northern country faced with the twin challenges of vast geography and sparse population. When those challenges are combined with a hostile climate, people become acutely aware of their need to co-operate and make decisions for the common good.

Political theory generally acknowledges that the provision of public services is a necessary function of most governments. Canada's unique challenges make the provision of such services even more critically important to the survival of its citizens. With its universal obligations, Canada Post, or what used to be called the post office, is one such critically important public service.

When I visit small towns like High River, Hanna, Yorkton, or Nelson, the presence and visibility of the public post office, with its flag and its familiar signage, reminds me that we are all Canadians with mutual obligations to each other, and that we need a truly national and universal postal service. It is one of the ties that bind and a critical thread in the fabric of all communities. The disappearance of public postal outlets from our communities pulls at that thread, and our communities start to unravel just as surely as when the local arena burns down and community leaders must struggle to maintain the services and programs that citizens expect.

One might suggest that with the availability of the Internet, the need for postal services has been rendered moot. It is quite the contrary. The Internet has promoted personal isolation, and social media has encouraged a deterioration in civil discourse. We need fewer Kim Kardashians and more community leaders. We need greater public access to communications services. The Shaw and Rogers families are rich enough. We need the public postal service to expand and to prosper, for the benefit of all Canadians.

As already alluded to, public services are a critical part of the social fabric of any community. In Alberta, we have seen the effect of government policies that starve public services of the resources they need. For ideological reasons only, our health care and education systems have been starved of the financial resources necessary to allow them to thrive.

In the nineties, we saw large-scale layoffs of nurses and teachers and a move toward privatizing other related services. These actions led to widespread dissatisfaction with the public systems, which found themselves unable to meet public expectations with the diminished resources allowed. This in turn created a significant rise in the demand for private services to replace those that were not being adequately provided by the public systems.

Our post office seems to have suffered a similar fate. Canada Post management has reduced or eliminated services in smaller communities, contracted out many other services, and reduced service standards and pickup and delivery times without consultation with the public it supposedly serves.

This, I would argue, has engendered increasing public dissatisfaction with the public postal service, thus encouraging more private competition. This competition has further eroded the ability of Canada Post to generate the revenues necessary to continue to provide, let alone expand, the public service for which it is obligated.

Moreover, Canada Post management has steadfastly refused to discuss or implement measures that would enable it to generate the revenue that would allow it to improve basic services. Postal banking comes to mind. In fact, I know that the governments of the United Kingdom and Australia have profitable postal banking services.

Before I close, I would like to address what I believe to be one of the strangest examples of pretzel logic I have ever encountered.

Canada Post management has been warning Canadians for years that there has been a sharp reduction in the volume of first-class letter mail processed by Canada Post. Yet I'm given to understand that they have also invested billions of dollars in retrofitting their mail processing facilities with equipment designed to speed up the processing of first-class letter mail.

Where I come from, if a manager invests money to handle a product for which the public has little interest, that manager gets fired. Imagine if Canada Post had invested those billions into expanding their door-to-door services instead. Canadians would enjoy better and more reliable service. In turn, public confidence would be restored, and growth in the demand for the services of the public postal service would be expected. Canada Post revenues and profits would grow.

Canadians would no longer be at the mercy of private couriers to fill in the gap, which Canada Post has too long allowed to exist and to grow. I urge you to recommend to the government that it take whatever measures necessary to restore and further expand the public postal service, which all Canadians deserve.

Thank you for your time.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much to all the panellists.

We'll start now with our interventions.

Madam Ratansi, go ahead for seven minutes, please.

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

Thank you very much.

You guys have given us a challenge too fulfill. Just as a clarification, we saw the large processing plant, or whatever you call it, that Canada Post invested in. We went yesterday. Yes, letter mail has declined, but parcels have increased. They have to have a very cohesive strategy and facilities. I think all of us should go and see those facilities. There are some good and some bad initiatives that have cost them money, but we also need to be mindful that when we make statements, we have seen what they have produced.

I have a question for you, Ms. Beale.

What sorts of relationships do Canada Post employees have with their current management?

[Anna Beale]

Do you mean overall employer-employee relationships?

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

Are they positive, negative, or a work in progress?

[Anna Beale]

It's a work in progress, in a sense.

People go to Canada Post for the money and the benefits. You go there; you do your job; and you go home. In the main, employees on the work floor want to have their jobs; they want to get the job done; and they want to get the mail to whoever it's being delivered to. Issues happen on the work floor, and they're going to happen as soon as you have more than two people in the workplace. There's going to be an issue. You deal with it and you move on.

At any management level, you're going to have people who should be there and people who shouldn't be there. We have that same mix at Canada Post.

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

We had a group of witnesses before you, and they talked about integrated thinking and how you have to think outside the box. Do you believe that Canada Post's current management has been thinking outside of the box, or has it focused only on cuts?

I ask this to you, Mr. Rosendorff, and Mr. Bennett.

[Anna Beale]

I believe they've only focused on cuts. What I didn't have in my presentation but what was in the back of my mind was that if you feel you're going to be losing money, then you should be diversifying instead of raising the prices of the product that you're selling and cutting the services that you're supposed to deliver.

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

Mr. Rosendorff.

[Steven Rosendorff]

I feel that they are looking at running Canada Post like a business, looking at business principles, and determining where they need to improve efficiencies. This may mean doing things differently, thinking outside of the box—excuse the pun—by using boxes, and cutting certain areas to make it a sustainable business model without increasing the price.

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

Have you seen the task force report and the summary of the recommendations?

The recommendations are to change the number of times they deliver, and to convert to community mailboxes, etc. From those, do you feel that operations are going to get more efficient, or do you feel that there are other things that you can think of outside the box, like integrating and getting more revenue?

You're a business person. How would you go about increasing your revenue?

[Steven Rosendorff]

I think it's twofold. You look at the total picture and say, “how do I increase revenue to make more profit, and how do I cut costs to make more profit?” Most of these recommendations are looking at how to cut costs, which may be inefficiencies right now, and which will increase revenue and then increase profit. To increase revenue, I can't answer that. Think outside of the box and do alternative things, which could generate alternative revenue streams, if that is desired. Do not increase the price.

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

Mr. Bennett, I'm sure you are aware that Canada Post was selling a lot of retail products, but then it decided not to sell them or to keep forms for people, etc.

What are your thoughts? Should it be a business or a service, and how can it improve its revenue?

[David Bennett]

I would be inclined to agree that the generation of more revenue is actually one of the keys. I'm a lifelong resident of the city of Calgary. I have lived through four separate boom-and-bust cycles in the oil patch. One of the most devastating aspects, something I believe the oil patch finally learned from in 1982, was that you can cut only so far. When you cut, you lose your talent; you lose your initiative; and you lose your ability to provide your core services.

I'm afraid that's the direction Canada Post is heading in. It seems focused on cut, cut, cut, which eventually eviscerates or completely guts the value and the ability of the post office to do its job. That's why I would tend to focus on the identification and generation of new sources of revenue, such as postal banking.

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

Why do you think it's in that mode of cut, cut, cut and not grow, grow, grow, or thinking outside the box?

[David Bennett]

From a purely political standpoint, I'm inclined to think that Canada Post management hitched its wagon, essentially, to the previous Conservative government, which for ideological reasons wanted to simply reduce the presence of government as a whole in our communities and in our societies.

For instance, the current CEO of Canada Post came from a private business environment, Pitney Bowes, which in fact is one of the competitors of Canada Post. I found it a strange move to actually hire one of the competitor's CEOs in order to actually run your own organization.

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

Just very quickly, how would you bridge the divide between the rural and the urban? You're talking about all urban centres having all the services. The rural areas need those community hubs. They need certain services. How would you help solve that or enhance the capability to mitigate the divide?

[The Chair, Conservative, Tom Lukiwski]

There's almost no time left for the answer, sorry.