Government Operations Committee on Oct. 19th, 2016

[Kevin O'Reilly]

I looked at the annual report of Canada Post, and I couldn't figure out how much the philatelic revenues were. I've heard it might be as high as $20 million.

Stamp collectors buy stuff that's not used to pay for a service, essentially, other than the printing cost, and distribution, and stocking, and that sort of thing, so it's a very big margin for the corporation. My impression, without delving into all the economics of it, is that not much of that actually goes back into the hobby to promote Canadian heritage and stamp collecting as a hobby. Those things can help better educate our kids, but also elevate Canada on the international platform in terms of promoting our culture and so on. Stamp shows are an economic driver in themselves. I mentioned the one in New York City, with a quarter of a million people through the doors in eight days.

What I'm hoping is that you can delve into that a little more with your resources and look at those revenues. I'll certainly work with the organizations I'm a member of and try to get them to make a better submission in terms of what they would like to see some of those revenues used for.

[Erin Weir, NDP, Regina—Lewvan, SK]

We can ask Canada Post to provide a number in terms of their current revenues, but certainly any estimates of potential additional revenues would be very interesting and most welcome.

Could you also speak a bit, or perhaps submit later some information, about the economic impact of that convention in New York, and what the potential might be to host another convention in Canada?

[Kevin O'Reilly]

Sure. I would be happy to do that. I did check out the website for the organizers. They haven't completed all of their analysis and so on, and I suspect that will be part of it. I'll be happy to provide that to the committee, or I'll at least endeavour to find out when it's available and provide it to the committee.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thanks very much.

Another point a couple of panellists made was about a food program through Canada Post. It's not something we've heard much about, so I wonder if someone would like to give us a bit of a description of what it is, how it works, and what the potential might be.

[Lynda Lefrancois]

I was working while it was going on out of Yellowknife. I don't quite know the logistics, but basically it's subsidized by the federal government; I've heard $60 million a year is what possibly it is.

Under the previous Harper government, it was changed. He went to nutrition north Canada. From there it went to the business. The business itself got the subsidy for the freight, because the freight does cost a lot for getting stuff north.

Under the food mail program, the subsidy went to the families. It went to the people who ordered the food and got it. What I understand is the subsidy is not being passed on totally to the people of the community, the families, so the cost has gone up for them to feed their family as opposed to what it was before, when they got the subsidy directly through the food mail program.

That's why it's a good idea to put it back to that. Call it something else, whatever you want to call it, but get it back to the food mail program where the subsidy went to the family, not to the business, the retailer.

[Erin Weir, NDP, Regina—Lewvan, SK]

So it's gone from being a direct cash subsidy to consumers to a subsidy to businesses, which may or may not be passed along to consumers.

[Lynda Lefrancois]

Correct.

[Erin Weir, NDP, Regina—Lewvan, SK]

Thanks for clarifying that.

You mentioned freight rates. Something we heard about at our meeting in Toronto was the fact that Canada Post assesses very different parcel rates in different parts of the country whereas internationally it's obligated by treaty to offer a flat rate to foreign companies shipping into Canada.

Could you speak a bit about the challenges in the north of those differential parcel rates that Canadian shippers face?

[Lynda Lefrancois]

From the retail end of it, between every major centre in Canada from Vancouver to St. John's it is a flat rate. There's a consistent rate, just as there is for a standard letter. As you start adding on different legs the price starts going up. Yellowknife to Toronto would have one leg added. The rates will change for us going north. In the Northwest Territories if you can get to it by road it's one rate. If it's air stage, meaning the only way it can get in there is by air, it's a different rate and it goes by kilogram. I can't tell you, maybe it's after every two kilograms or also on size, that the price goes up. Yes, it is expensive, but the profit made down south with all the parcels covers the rate for the north and the remote communities; that's the whole idea of the combined. It's self-sustaining; one part is making the bigger profit. This little area may not, but within the profits it covers this, and they're still making a profit overall. The whole idea is to start generating more so we can provide the services.

[The Chair, Conservative, Tom Lukiwski]

You have 30 seconds, Mr. Weir.

[Erin Weir, NDP, Regina—Lewvan, SK]

If you have any further points to make in 30 seconds, feel free. You mentioned your presentation was a little time constrained.

[Kevin O'Reilly]

Maybe I could speak just very briefly. I had to handle an estate for somebody here in Yellowknife, and the cheapest way for me to get it from here down to Ontario was Canada Post. I checked bus parcel express, air freight, moving companies. I know that Lynda and her staff have handled people moving from Yellowknife down south, and the cheapest way for people to move stuff sometimes is with Canada Post. That's a great service, and I think we need to protect it.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Madam Ratansi, you have seven minutes, please.

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

Thank you very much.

We appreciate the service Canada Post employees provide. I remember that during the Fort McMurray fire the MoneyGram via Canada Post was the best way people could send money. I'll ask you each a question. Would you like Canada Post to be self-sustaining by breaking even, or make a profit? A very quick yes or no answer.

[Alexander Lambrecht]

The number one objective for any public service should be self-sustainability, but if it's able to generate a profit that can then be reinvested into the Canadian economy and into Canadian communities, why not make generating a profit a priority?

[Lynda Lefrancois]

Be self-sustaining, but here has to be a little profit as a buffer for the years.... Past a certain point, that's when you reinvest the profit into generating more revenues.

[Kevin O'Reilly]

I think it's most important that we have a good public service. Self-sustaining is possible, but if it does require some inputs occasionally from taxpayers that's the kind of country that Canada is.

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

We give $1 billion in subsidy to the CBC, and it comes from the tax rolls. Do you think Canadians would be willing to take that? I'm trying to figure it out. You say it's a business, it should make a profit, and it should be run efficiently. If it has to be run efficiently should it be subsidized? If it is subsidized how much subsidy? Should they be given $1 billion in subsidy?

[Lynda Lefrancois]

Canada Post is profitable, no matter what. It has been over a period of time. Whenever they did that five-point review they went to this board and gave them the information. By 2019 we are going to be in debt by x amount of dollars because of the path we are taking. At the end of that year they didn't have that debt, they made more profit. The next year they made more profit.

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

We have to look at the assumptions that were made, and then we will have to do a reality check. What we are really doing is listening to you, listening to your ideas, and saying we have to do debits and credits. This is one side of the equation. The next is checking the assumptions.

If it makes a profit, where would you like to reinvest?

[Lynda Lefrancois]

Services.

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

What sorts of services? We aren't looking at creative ideas. We are looking at qualitative stuff because, you know, for communities in remote areas, we need social cohesion. Otherwise Canada is Canada dismantled. So give us some creative ideas.

[Lynda Lefrancois]

Okay. You mentioned the Fort McMurray fire, how they used MoneyGram. Is MoneyGram owned by Canada Post? No. MoneyGram is not owned by Canada Post. On MoneyGram you can pay your bills and you can send money worldwide. Canada Post—I don't know the actual figures—would be getting a percentage of the service fees, and they're doing it. Obviously they're continuing to do it, so therefore it's got to be profitable for them. But with the structure already set up, why isn't Canada Post doing it themselves with some form of banking? Pay your bills, send your money, and that sort of thing.

It's already set up in the system. It's the same as the identity check. We are doing identity verification at the retail counters for businesses. I think it's called secure check. People have to come in with three pieces of ID. We can use their scanner. The system is set up. You scan three pieces, the picture comes up, and then you send it. But other communities need this sort of thing, and that's the sort of service that we're talking about. Be creative. Think outside buying a stamp, sending a parcel, and paying your bill. Generate more.

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

Going outside the box, and we had—

[Lynda Lefrancois]

To generate their revenues.