Government Operations Committee on Oct. 21st, 2016

[Prof. David Camfield]

There is always the possibility of subsidy, but I don't think it needs to be on the table. It's not at the top of the list. If you look at the opportunities for expanding revenue and not make any doomsday forecasts about the catastrophic elimination of part of the revenue stream that's there now, or something like that.... I don't see a crisis. I see challenges, but I also see opportunities.

I have this article from Le Figaro in France, looking at the service that has been brought in where La Poste now gives you the option to pay to have someone look in on your relatives two, four, or six times a week. It's charging about 60 euros for two visits a week, about 100 euros for four visits a week, and 140 euros for a visit every day. That's another whole revenue stream that could be considered.

When it comes to the postal banking issue as part of the picture, I really wonder what's in the internal Canada Post study, which has been mostly redacted.

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

Thank you.

[Kevin Rebeck]

As Canadians, we own an incredible asset in Canada Post. There are huge opportunities to do things differently and better, become more than self-sustaining, and support governments in other ways. If we need to look at doing things differently, it's an investment, not a subsidy. I think the return on it will be tremendous.

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

I like hearing the optimism.

Mr. Camfield, I'll go back to the business model for these home check-in services.

We look at restoring door-to-door delivery back to whoever has lost it. Maybe that would cost $80 million a year. We look to establish home delivery to all the suburban communities that never had it. That would cost probably at least $400 million a year, just extrapolating from the business.

Do you have any knowledge of the types of revenues the French postal service has from these home check-in services?

[Prof. David Camfield]

It's new. It's far too new for them to have any kind of—

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

It's certainly something to explore.

[Prof. David Camfield]

Yes.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll now go to our final two interventions. They will be five minutes each.

Mr. Maguire, we will start with you.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Thank you, Mr. Chair.

Thank you to our witnesses today for their presentations.

I come from a rural background, so I'll lead off with a couple of those questions. There is so much to do here in five minutes that I won't get it done.

There were comments made about the number of banking facilities we have, and a lot of small towns don't have them anymore. My experience is that, where those banking facilities—the private banks—have taken leave of the community, in many cases credit unions have filled in and done a tremendous job in those areas. Some small community is left, and Canada Post has partnered with a small business in that community to have a place for the services to be delivered. Do you see that as a model that's sustainable?

[Dave Sauer]

Anything right now is worth investigating. If they are already forming partnerships with the postal outlets in those areas, take a look at the model. I think that's the thing. We shouldn't be focusing solely on this being a doomsday scenario and Canada Post going down. Have an optimistic.... Wear some rose-coloured glasses, in terms of the opportunities we have here.

[Larry Maguire, Conservative, Brandon—Souris, MB]

The one I'm thinking of is the postal service that went into a restaurant. It wasn't that something else went into the postal service in that community. It was shut down. There was delivery via multiple small businesses in that community. Heck, some of them could even be fertilizer dealerships in some of these really small communities. In this case, it was a small restaurant in the community.

Grocery stores are doing it. We've seen Canada Post services in places like Shoppers Drug Mart, gas stations, and other facilities within cities.

Do you see that as an option for Canada Post, to have its services delivered that way? I think we have enough banking services in some of them, but if there is an opportunity to have that banking service expanded, we've heard from the previous panels that it should be done in a profitable manner and that it would be profitable. Otherwise, Canada Post wouldn't be getting into it. Can you elaborate on that?

[Dave Sauer]

The preference, absolutely, would be to go through the outlets first, if you have an outlet in the town. If it isn't an option, if the credit unions have already gone in there and taken care of it, then maybe that's not the option we want to look at in that region, but we have 6,000 postal outlets around the country and a lot of the banking....

I am speaking more about an urban setting. I am from a small rural town myself, in Saskatchewan. In the urban setting right now, the only ones coming in and filling in the void of any kind of banking—payday loan companies—have no banking. We are talking about basically ripping people off, with 400% or 600% interest rates. That's the angle I would come at it from. That doesn't seem to be an option that could work in an urban setting.

I'd have to do a bit more investigation to really give you a concrete answer on rural settings.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Mr. Sosa, you look as though you want to....

[Carlos Sosa]

Yes, I'll comment on that.

I also live in an urban setting. Again, payday loan companies have filled that void, but they charge high fees. Those who live in inner-city communities do not have the money to pay the high fees. Postal banking would be an option that could provide an ethical alternative to the payday loan companies that are charging high fees.

[Larry Maguire, Conservative, Brandon—Souris, MB]

As a follow-up to that, do you feel there aren't enough banking services already in Winnipeg?

[Carlos Sosa]

In many inner-city communities there are not enough banking services. We've seen the banks that have closed. They have left our inner cities.

To be quite blunt, those who live in inner-city communities typically are new Canadians, persons with disabilities, seniors, and indigenous populations, as an example. Postal banking could fill a major void in this city and in many underserved communities across the country.

[Larry Maguire, Conservative, Brandon—Souris, MB]

Do you think there should be more rural route deliveries in areas that aren't currently having their daily postal service delivered to them?

[Carlos Sosa]

I'm not in a position to comment on that. What I would say is that it's important for us to have the accessibility of the postal service and that it remain a public service. Obviously, Canada Post needs to look at new revenue diversification streams. I think postal banking is one of those diversification streams.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Our final intervention will come from Madam Ratansi, for five minutes, please.

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

Thank you very much.

Thank you all for being here.

Professor Camfield, your resumé is very impressive, so I have a question for you. You guys all came up with creative ideas. We have the CEO of Canada Post, who is the highest-paid civil servant. You thought outside the box. Why do you think he would not? He's a bright man. Why does he think cut, cut where you think grow, grow?

[Prof. David Camfield]

I'm not impugning his intelligence. I think the question is this: what's the ideology to which he's committed, and how does he see the future of Canada Post? I would just raise the question of the previous government appointing him because he was seen as aligned with their ideological agenda. I think the long-term future that was in mind when he was appointed was one of privatization.

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

That's your impression, and you think the task force, which was given a limited mandate and utilized the figures that were given to it, was not thinking outside the box as well?

[Prof. David Camfield]

No, I think it was extremely blinkered in its approach.

I mean, it does identify a number of options in certain places, but the predominant thrust is pretty clear. It doesn't explore all the range of options. There are certain things it mentions without providing enough attention to them. If you even look at the gap between the range of options that were submitted for consideration and the ones that the task force chose to actually discuss and examine, there's a very big gap.

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

All of you have talked about social cohesion and ensuring that there's economic viability for everyone in Canada. That's the Liberal platform, to ensure that people are economically able to sustain themselves or that we can create a middle class so that everybody enjoys a level of economic stability.

When we talk about postal banking, I think people get a little confused about banks. Corporate banks, or banks in general, need to make a profit, because I the shareholder want the profit. Do you think postal banking, if it's in areas where it does not make money, should be revenue neutral or in its initial stages should make some losses? What would be digestible?

[Kevin Rebeck]

I'll jump in on that first.

I think we need to look at postal banking, where we implement it, as Canada-wide. There may be some branches that don't perform very well. There may be losses in the short term or in some places even in the long term. On aggregate, though, as a whole, postal banking has huge potential to be making profits that can be reinvested in the public good and can subsidize those poor performers.