Evidence of meeting #53 for Government Operations and Estimates in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was post.
A video is available from Parliament.
10:40 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
It's a driver aspect at the end of the day. You guys don't have any cost implications from it, but your revenue would decrease because people would be shipping less, essentially.
10:40 a.m.
Managing Director, eBay Canada Limited
Yes, so what would happen is that somewhere in eBay that sale would happen. It just would be that the Canadian sellers would be less competitive to U.S. sellers, or international sellers. The revenue moves around. eBay Inc. is in the same position; it's just that our Canadian sellers have lost their competitive edge.
10:40 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
That makes sense. When you talk about the de minimis, the counter argument to the de minimis is always that sales in retail, and small and medium enterprises, also use Canada Post to ship their parcels. If you look at it from a macro level, if we increase the de minimis by $20, from $20 to $40, that will be a net positive for online retailers, but it would also be a decrease for regular retailers, or so we've heard. Neither of you have been able to provide a study to say what the economic impact is across the board.
We've heard from the Retail Council of Canada on the finance committee that even raising the de minimis by $20 would really affect small bookstores, small shoe stores, and stuff like that. Do you have any comments on that?
10:40 a.m.
Managing Director, eBay Canada Limited
I think you heard at the finance committee that the retail industry does not speak with one voice on this. We're a member of the Retail Council. The sellers that we're most concerned about are precisely those tiny guys who are penalized in terms of their ability to bring inputs into the country relative to U.S. competition and competition around the world. They have to deal with the exports issue. At the end, this is a threshold that was set in the early eighties, has not been revisited, is a constraint on regional fairness and the ability of Canadians in far-flung places to fill the holes in traditional retail, and is a massive driver of government inefficiency, as the C.D. Howe report pointed out.
10:40 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
This is my last question. How much of eBay's U.S. parcel business is with the U.S. post?
10:40 a.m.
Managing Director, eBay Canada Limited
I don't have the precise number. It is significant. It's in the same ballpark as what we see in Canada.
10:40 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
The second question after that was, after the de minimis was increased, how much did the parcel business increase for the U.S. post?
10:40 a.m.
Managing Director, eBay Canada Limited
I don't know. From the U.S. de minimis increase...?
10:40 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
After the U.S. increased the de minimis range, how much did the U.S. parcel business from eBay go up?
You are advocating for a de minimis—
10:40 a.m.
Managing Director, eBay Canada Limited
It was already at $200, and our average selling price is significantly below that, so—
10:40 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
It's still a telling thing. You are advocating for a de minimis based on the fact that an increase in the de minimis will increase the parcel sales of Canada Post, which, in my humble opinion, isn't a terrible assumption. I'm sure that will happen.
To prove that fact or reasonable assumption—not that everything in Canada and the U.S. is the same—when the U.S. increased the de minimis range, what was the increase to eBay parcels in the U.S. post?
10:40 a.m.
Conservative
The Chair Conservative Tom Lukiwski
Unfortunately, even though the question was posed, you are overtime already, so we'll have to wait to get the answer.
We have a few moments left. Normally, we adjourn about 10 minutes to the hour in order to get the new witnesses to the table, but if there are any one-offs here, a question and an answer for a couple of minutes....
The parliamentary secretary, or Mr. Grewal, did you have a brief question?
We'll take two additional questions. We'll have Mr. Grewal for two minutes, and then Mr. Clarke for two minutes.
10:40 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
I'll keep going. Thank you, Mr. Chair.
Madam Stairs, by no means did I expect you to have that answer here. I just thought it was a good.... To sell your case even further, I think it's a really good study, and I'm sure the number is available.
10:45 a.m.
Managing Director, eBay Canada Limited
We know—and this is just eBay data—that there are literally millions of packages that are bought by Canadian customers and shipped to addresses in the U.S.—
10:45 a.m.
Liberal
10:45 a.m.
Managing Director, eBay Canada Limited
I think that this is almost a more salient data point.
10:45 a.m.
Liberal
Raj Grewal Liberal Brampton East, ON
Is there a potential for your sellers to increase their volume if there were an economy tier of shipping with tracking?
10:45 a.m.
Managing Director, eBay Canada Limited
Absolutely. They want to be able to offer free shipping. They can absorb a certain amount of shipping costs. Free shipping is a massive competitive advantage for them, particularly if they are competing against U.S. sellers, so if they have a slower, less expensive service—where they can still manage buyer expectations and deliver the goods at a certain time with tracking, but do so in a more cost-effective way—then, absolutely, they can expand their businesses.
10:45 a.m.
Conservative
10:45 a.m.
Conservative
Alupa Clarke Conservative Beauport—Limoilou, QC
Thank you.
Ms. Stairs, I want to go back to our discussion on the addition of new government services to Canada Post. You said that doing so would create a distraction and would move away from Canada Post's mandate and core activity.
The suggestions were to have a postal bank, to process passport applications and a whole series of services that now escape me.
In your opinion, which of those new services would create the greatest distraction that would move Canada Post away from its mandate?
10:45 a.m.
Managing Director, eBay Canada Limited
Honestly, I don't know what the laundry list is, but I think that the more intensive the spinning up of a new line of service is, and the more widespread it is across the country, as opposed to a niche, the more concerned we are about the distraction.
It's really about mindshare in terms of.... I read in the report that there are conversations about community hubs in some places, where the post office is the only representation of the federal government. I think that this idea is probably.... We are talking about a handful of places, relatively speaking, so the level of distraction of that, versus spinning up an entire bank, seems to be quite different. I would be much more concerned about the latter than the former.