Government Operations Committee on Oct. 19th, 2016

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Thank you, Mr. McCauley, for ceding some of your time to Mr. Whalen.

Mr. McCauley, you're up now, for six and a half minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks for having us here. It's the first time I've been here, and it's the last part of Canada for me to visit. It's wonderful to be here, especially in a beautiful brand new hotel.

Mr. Lambrecht, I'm sure you've read the task force study. Ernst and Young, a very reputable company, has predicted, I think, $750 million in losses by 2026. The task force did quite extensive polling. Canadian have said very clearly they don't want to pay higher taxes to support that, and they don't want to pay for a higher stamp cost either. What about yourself, do you think the taxpayers or the government should subsidize to cover this loss, should it prove correct?

[Alexander Lambrecht]

That's a loaded question. Should taxpayers ever be responsible for the mismanagement or poor decisions that are made by its elected leaders or public services? Taxpayers ultimately pay those costs.

[Kelly McCauley, Conservative, Edmonton West, AB]

That's not what I asked. If it's $750 million, should taxpayers make it up, should Canada Post find it within, or should it be sustainable and self-sustaining?

[Alexander Lambrecht]

It's such a loaded question. You know what, taxpayers have paid for tons of poor decisions made by governments and public services, so with that I'm...it's not that I refuse to answer it, it's that the context of it is—

[Kelly McCauley, Conservative, Edmonton West, AB]

Okay, I'll move on. Thanks, though.

Mr. O'Reilly, thanks for your representation of the area.

One thing that we've seen from going across the country is that there are very different needs, as Mr. Whelan mentioned, for Canada Post. In the city it's 100% different than what is needed in rural areas. It's very clear we need to support the rural areas more.

One of the items that the task force has brought up is that there are a lot of postboxes that used to be rural and that are now part of the city because the cities have grown so much. Edmonton alone has grown by 200,000 to 300,000 people, and we have post offices surrounded by 100,000 people. One of the suggestions was to switch those over to retail or franchise post offices, and that money saved should be used to support the rural ones, where it's much more needed.

Do you have any thoughts on that? Do you agree that we should focus on saving the rural ones or supporting the rural ones?

[Kevin O'Reilly]

There was a move to do that back about 1975 or 1976 and people didn't want it, for a couple of reasons. They wanted to have a post office in the downtown area that was a hub for the community.

[Kelly McCauley, Conservative, Edmonton West, AB]

That's very much what we're hearing. In rural areas it's a hub. In Edmonton and Calgary, if you ask people where Canada Post is, they say “Yes, it's in my Shoppers Drug Mart across the street.” But we also have three or four post offices as well. Where we really need the support is in the rural areas.

[Kevin O'Reilly]

Even here in Yellowknife, we have the main post office, and there's one almost across the street at a Shoppers Drug Mart, but it's in the back of the store. I've been to both of them. I have a post office box downtown. I prefer to go to the counter and pick up my mail there, and deal with folks who know all of the Canada Post services. I don't find the franchised outlets I've been to are as familiar with Canada Post services.

[Kelly McCauley, Conservative, Edmonton West, AB]

I would like to take you to the postal banking part. Mr. Whelan brought it up as well.

We chatted with, I think it was a previous Money Mart executive about cheque cashing, which we're hearing a lot about. People are saying they need lower-priced cheque cashing. They're saying their default rate is something like 20%. That's a difficult question, but give me your thoughts. If we did have government-controlled postal banking, how would you see going after this 20%? The first time, we would have to repossess someone's car or truck for not paying.

[Kevin O'Reilly]

Look, I'm not a banker, but there are probably ways to put in place the proper checks and balances. We do have cash advance places here in Yellowknife, and they tend to be used by the poorest, most marginalized parts of our community. They charge outrageous rates, and it's just not fair. Many of our communities don't even have access to basic banks, or high-speed Internet service, as I said. Canada Post used to do this, when it was a post office department up until 1969, and I think there's an opportunity for the corporation to move into that area to service rural and remote communities to provide access to the same services most other Canadians enjoy.

[The Chair, Conservative, Tom Lukiwski]

You have one more minute.

[Kelly McCauley, Conservative, Edmonton West, AB]

Actually, Mr. O'Reilly answered the question, I think. But, Ms. Lefrancois, do you have retail outlets here, as well as the Canada Post corporate outlet?

[Lynda Lefrancois]

In Yellowknife there is the corporate outlet and across the street, as Mr. O'Reilly said, is the Shoppers Drug Mart, which is the retail, the franchised outlet.

[Kelly McCauley, Conservative, Edmonton West, AB]

It's common that most people want to use the post office. Do people not kind of vote with their pocketbooks here, where they go if they're seeing there's bad service at the one in the retail outlet?

[Lynda Lefrancois]

They don't have a choice. Canada Post made it that they don't have a choice. As you've probably heard across the country, the parcels are up, so Canada Post has given a contract to Shoppers Drug Mart for the parcel pick-ups, which is a very small place.

[Kelly McCauley, Conservative, Edmonton West, AB]

What other services do they do, then, that aren't done across the street? Is it just the parcel pick-up?

[Lynda Lefrancois]

What do you mean by “other?” I don't understand the question.

[Kelly McCauley, Conservative, Edmonton West, AB]

You have a Canada Post corporate store, and across the street is the Shoppers, and you're saying Canada Post is shifting business over to the Shoppers.

[Lynda Lefrancois]

They're shifting business for the parcel pick-up, that is, having the people go there. While they're there, if they're mailing a parcel, they'll do it there also. They have the contract. That's how they make their profit, it is for the parcel pick-ups. But what happens, through my experience, there are so many times over that 15 years that they don't have the information to give the customer on how to sell things, on how to get a parcel from here to Ethiopia—

[Kelly McCauley, Conservative, Edmonton West, AB]

They can't do the parcel on the other side—

[Lynda Lefrancois]

No, they can do it. But chances are that a percentage of the time they're wrong, the parcel comes back. So when they go to the Shoppers Drug Mart, they say, “Well, we don't know what to do,” and they send them over to us.

[Kelly McCauley, Conservative, Edmonton West, AB]

Okay.

[The Chair, Conservative, Tom Lukiwski]

Mr. Weir, seven minutes, please.

[Erin Weir, NDP, Regina—Lewvan, SK]

I'd like to thank the panel for making a very compelling case for postal banking, particularly in northern communities.

Mr. O'Reilly, you suggested another source of revenue for Canada Post, which is selling commemorative materials, facilitating conventions of stamp collectors. I haven't had a chance to review your written submission, but I wonder if, either in writing or verbally, you could give us a sense of how much revenue might be gained through those channels.