Government Operations Committee on Oct. 18th, 2016

[Nick Whalen, Liberal, St. John's East, NL]

Ms. Beale, you spoke about it having worked in the direction that was perhaps suggested to it by the previous administration. If it was given clear direction from us, do you think it would achieve a mission to expand instead of contract?

[Anna Beale]

I've always been hopeful. I guess that's why I'm still here. However, I can't see that. It was a fight at negotiations. I don't know how much power you have to do that, but I'm hoping you have a hammer—not a real one—to tell it that they it has to do that, that it has to look at different areas to be able to expand and grow.

[Nick Whalen, Liberal, St. John's East, NL]

Mr. Rosendorff, you haven't been really as intrinsically involved with Canada Post, but you've used its services. Do you see a role for Canada Post in selling services in competition with existing providers in the banking sphere, in the insurance sphere, and in the mortgage sphere?

You can contrast it; there's no one-area-fits-all solution, but maybe just contrast urban, rural, and suburban areas and where it might have a role.

[Steven Rosendorff]

I think it's an ideologically good idea, but practically it's not. Those are very technical products. Sure, to increase revenue you should have different revenue streams, but first, you cannot go and sell mortgages and insurance and things such as that if you're not trained and qualified; and secondly, you would then be taking away business from the private sector.

In answer to your question, sure, diversify and look for other income streams, but not at the expense of the private sector.

[Nick Whalen, Liberal, St. John's East, NL]

What about in areas of the country where the private sector has withdrawn? We have seen the Caisse de dépôt and credit unions and banks withdraw from rural areas. When we look at the number of households in rural, suburban, and urban areas, we see that about 15% of households are in rural and far rural areas. Is there a niche role for Canada Post to play in nation building, in providing Internet banking and registration services to that underserved community?

[Steven Rosendorff]

I would answer that question in two ways. First, it's a very good idea. Second, I don't think it's a good idea, because you would have a town nearby. This morning I was in a place where only 1,300 people live. The closest town is 25 kilometres away. They know they have to drive 25 kilometres. I drive more than 25 kilometres to get into downtown Calgary. There will always be such places.

If you live in a rural area, you are living there for a reason or you're stuck there. Typically, people live there for a reason. They want a rural lifestyle and they put up with driving to the nearest Costco, which is 100 kilometres away, or whatever it is, and the same is true for service providers, banks, insurance, medical, and so on.

[Nick Whalen, Liberal, St. John's East, NL]

That's interesting.

I would rephrase this in the context of the service charter. There are two elements of the service charter that you might not be as familiar with, Mr. Rosendorff, as Ms. Beale and Mr. Bennett would be. Section 10 of the service charter talks about how close postal outlets need to be to individuals; 98% of individuals need to live within 15 kilometres of a post office. It doesn't go to the last 2% of individuals. It also says that as of a cut-off point back in the nineties, there will be no more closing of rural post offices. There are still some closures of rural post offices when they can no longer staff them and local communities agree that it would be okay because they would be served by a nearby community.

Is that a standard that we should adhere to? Should we reset the baseline for rural community service based on the service standards? Should we put in an extra category for within 25 kilometres? Should we move the goalposts and then impose a new moratorium? Is this something that we should consider as a cost-saving measure? Should we maybe provide more expanded services in one community that serves as a hub rather than trying to be all things to all people in all places, which might not be a capital investment we want to make?

I open it to each of the three of you to speak.

Mr. Bennett.

[The Chair, Conservative, Tom Lukiwski]

You will have to offer your commentary during the answers to our next intervenor, who will be Mr. Clarke.

Mr. Clarke, you have the floor for five minutes.

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

Thank you, Mr. Chair.

Mr. Bennett, are you a member of Prime Minister Bennett's family?

[David Bennett]

Uh, no.

[Some hon. members]

Oh, oh!

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

You have already answered my first question. Thank you.

You said that Canada Post was a very important national symbol of federal unity. I loved your presentation. I come from a university background, and your socio-historical and political presentation delighted me, even though I don't agree with everything you have said. However, it was music to my ears.

Without fear of getting to the bottom of your comments, you say that Canada Post's precarious financial situation stems from ideological preferences rather than from a reality based on a given context. Is that indeed what you said?

[David Bennett]

That's not it entirely, but yes.

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

Okay.

Based on your premise, how do you explain that the task force created by the Liberal government is still coming to conclusions that are similar to what the Canada Post management is proposing? Does that mean that Prime Minister Trudeau and that task force are following the ideological perspective you are referring to?

[David Bennett]

I wouldn't presume to assume what the Prime Minister is doing or thinking. What I do know is that a great many of the statistics upon which Canada Post has relied to justify its actions are either misleading or out-and-out false. The task force, I believe, relied on certain figures indicating that Canada Post projected a significant loss in the neighbourhood of $200 million, when, I think, it was in 2014 that Canada Post produced a profit of $94 million.

I'm not sure where the numbers come from, and we can cherry-pick numbers all we like, but I do suspect that the figures Canada Post and the task force are using have more to do with strategically positioning themselves according to a particular ideological position, as opposed to representing the common interests of the Canadian public.

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

As a result, you are saying that the deficit is not necessarily real.

[David Bennett]

That would be my understanding. I know that at least part of one of the major writedowns in the last few years at Canada Post had to do with the fact that Canada Post was ordered to repay a certain pay equity figure in the neighbourhood of $200 million in order to satisfy, I believe, a ruling by the Federal Court. Canada Post took a one-year writedown on that figure, I believe, and as a result it declared a loss. My understanding is that it then projected those losses to continue, as opposed to realistically projecting what its financial performance was going to be.

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

As I still have a bit of time left, my next question will be for Ms. Beale.

I think it's very good that we are trying to think outside the box, but I have been noticing since yesterday—I have been sitting on this committee for a short time—that those ideas always look outward, as in the case of postal banking and passports, but they rarely look inward. For example, perhaps Canada Post could reduce the social benefits and wages of workers who are, after all, part of a privileged elite in Canada.

I would like to hear your thoughts on that.

[Anna Beale]

Okay. You're going to kick me out when I say this, but I take offence at the “privileged elite” comment. We have working-class wages. We are the working class. We work for a living. To me, the elite are the ones who have no idea about what working for a living is, so that comment I take offence at. I think at this point I've forgotten what you said.

[The Chair, Conservative, Tom Lukiwski]

We'll leave it at that, then.

[An hon. member]

It was about lowering wages.

[Anna Beale]

Oh, yes, that was it. No. That, to me, is very narrow thinking. A company is in business. If it's one employer and two employees, and it's having a hard time, and if it can't find other things to make money from, such as changing its product, changing the service, or whatever, and its idea is to cut the wages of its employees, then maybe it should cut its own wages.

How many vice-presidents do we have—22? Oh, it's 21. I think it got rid of one last year, and it hasn't filled that spot.

We have a board of directors about this long.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much. Our final intervention will come from Ms. Shanahan, for five minutes, please.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Chair.

I think we just need to get it on the record that the task force had a very specific mandate, and that was to look at the business model as it is now, which is to provide services in a business context on a sustainable level.

Our committee is trying to think outside the box. We've heard some great testimony, and will continue to do so.

Thank you very much for what you've had to say here today, because, as we know, the world is not standing still. Things are changing very rapidly. Certainly technical innovations are impacting services and demand as we speak. Yet, we do have an obligation to serve all Canadians on an equitable basis as much as possible.

I would like to go back to questions that both my colleagues put to the panel on the urban and rural service considerations and this idea that Canada Post represents something tangible to Canadians, and what that means with regard to—and this may be thinking outside the box—other services we can be providing to continue a tremendously important organization.

I'd like to start with Mr. Bennett.

[David Bennett]

As you've indicated, Canada Post does need to start thinking outside the box in terms of the kinds of services it can provide. Growing up in an urban centre, I got used to having those postal services available. I worry about people in small communities who can't drive anymore, who won't be able to have access to those things.

I'm thinking in terms of the value of the rural postal worker keeping in touch with his or her customers, and understanding their needs and their concerns.