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.
Managing Director, eBay Canada Limited
It's simply Canada Post. It doesn't include Purolator.
NDP
Erin Weir NDP Regina—Lewvan, SK
Okay, thanks very much.
I'm going to almost repeat a question that Mr. Drouin asked, because I think it's a very important one. It seems that your key concern here is about the pricing of tracking and wanting to have maybe a slower and less expensive option. I just wonder what Canada Post has said in response to that concern.
Managing Director, eBay Canada Limited
I raised it at a very high level just in passing, and I got the response that it was interesting and something they would take back. I don't know, where our organizations are more closely linked, what the response has been.
It isn't where they have been going. They've been going to faster delivery to compete with couriers, which I think is appropriate. They should be offering those services. I think this is more an idea of extending the spectrum and adding a complementary service.
NDP
Erin Weir NDP Regina—Lewvan, SK
Okay. It sounds as though it's a big priority for your organization, so I wonder what engagement you've had with Canada Post on it.
Managing Director, eBay Canada Limited
Yes, we've brought it up. I haven't gotten anything definitive from them.
NDP
Erin Weir NDP Regina—Lewvan, SK
Fair enough. I guess we can try maybe to help put that question to the corporation directly and get an answer to it, because it seems to be an interesting and important point.
You've talked a lot about the situation where a Canadian and an American supplier might be competing for an American customer, and I take the point that it's probably a common situation. I want to ask about the situation where a Canadian seller and a foreign seller are competing for a Canadian customer, because we've heard in other meetings that there's a real problem with differential rates for parcel shipping within Canada. Canada Post is able to discriminate based on the size of the different markets and those sorts of variables, whereas international postal treaties oblige Canada Post to provide flat-rate shipping to foreign sellers coming into the Canadian market. Is that an issue that eBay Canada also has?
Managing Director, eBay Canada Limited
Honestly, that is not an issue that I'm up to speed on. I think that our small and medium-sized businesses, while they are very much focused on international markets, are seeing significant growth in the domestic market, and increasingly they will be concerned about their competitive niche in Canada relative to foreign retailers and small businesses. Again, I couldn't comment beyond that.
NDP
Erin Weir NDP Regina—Lewvan, SK
It is something we've heard quite strongly from small shippers that they're not really able to offer flat or guaranteed shipping rates within Canada, because Canada Post will charge them different amounts, depending on where they're shipping, whereas their foreign competitors have this right to almost a flat rate within the country. It seems like that's something that has been a relatively big deal to other small shippers.
Managing Director, eBay Canada Limited
I think the problem has gotten better. We used to do a survey, and we found that it was less expensive for a Canadian seller to drive something across the border, put it in the mail in the U.S., and then have it sent back into Canada. In 2013, USPS increased its rates significantly on international shipments, and that problem seems to be less of a problem now.
When you heard from Maureen, she wasn't driving her Canadian inventory across the border to induct it into USPS in order to send it back into Canada. I would say that was probably less of an issue, particularly relative to the U.S., than it had been previously. But on the specifics right now, again, I don't have that information.
NDP
Erin Weir NDP Regina—Lewvan, SK
Overall, would you say that Canada Post's services are critically important to your business?
NDP
Erin Weir NDP Regina—Lewvan, SK
You're happy with the quality of the service. It seems to be improving, and the main questions are about pricing and the availability of low-cost tracking. Would those really be your concerns?
Managing Director, eBay Canada Limited
I think more broadly, yes, absolutely. As we talk about innovation, Canada Post does not get brought up in the innovation conversation as enabling infrastructure for Canadian innovation, but when we talk about the productivity gains and the long tale of Canadian SMBs, having Canada Post be an effective partner is critical to that, particularly as we talk about e-commerce and using the Internet to tap into customers around the world. Having a strong Canada Post is critical.
NDP
Erin Weir NDP Regina—Lewvan, SK
Okay. Are there any other specific changes you'd like to see to their services or to their operations to facilitate that support of e-commerce?
Managing Director, eBay Canada Limited
We would very much encourage Canada Post to focus on its core lines of business and not enter into new lines of business that could be distracting to management. They need to continue to focus on their shift from a letter-centric business to a parcel-centric business, and we would be supportive of that.
NDP
Erin Weir NDP Regina—Lewvan, SK
I guess one of the challenges Canada Post faces is that there's also a lot of competition in the parcel business, and that just expanding in that area alone might not be enough to compensate for the decline in letter mail. That's where our committee has had some interest in exploring other lines of business. If those other lines of business help to sustain Canada Post and help to allow it to continue offering the services that you rely on, then might that not be reasonable?
Managing Director, eBay Canada Limited
I think that the competition in the parcel business.... Certainly, there is competition there, but Canada Post has a 90% share on eBay and that is an indication of orders of magnitude.
We see that the private couriers are cherry-picking the most lucrative weights and dimensions services, but there is a vast set of other businesses and services that need to be serviced. When we talk to our sellers, couriers are often not an option for them. Their economics would not permit them to have that service level.
Yes, there's competition, but I think we need to not lose track of the huge numbers that Canada Post services and that there are very high switching costs for small businesses in moving off Canada Post.
Conservative
The Chair Conservative Tom Lukiwski
Thank you very much.
Mr. Ayoub, the floor is yours for seven minutes.
October 31st, 2016 / 10:25 a.m.
Liberal
Ramez Ayoub Liberal Thérèse-De Blainville, QC
Thank you, Mr. Chair.
Thank you for being with us, Ms. Stairs.
I am going to continue along the same lines. You are saying that Canada Post has to stick with its main activity. What is your idea behind that? What are you afraid of? I sense that you do not want Canada Post to open other lines of business because you are afraid of something.
Can you explain your recommendation to me a little more?
Managing Director, eBay Canada Limited
I think it comes from two places. One is that in running a business you know that when you open a new line of business you have to allocate resources and executive mindshare to that new business in order to build it. The other thing is in reading the report it seems like there's a fairly definitive statement that banking, for example, is unlikely to be profitable in Canada.
As someone who has read the report, that's where I come out on that. I think that distracting—
Liberal
Ramez Ayoub Liberal Thérèse-De Blainville, QC
Does that recommendation for Canada Post come from a discussion with your board of directors or is it your personal view?
Managing Director, eBay Canada Limited
No, I think that eBay is very much supportive of Canada Post staying with its core services.
Liberal
Ramez Ayoub Liberal Thérèse-De Blainville, QC
Okay.
In the last few years, with the five-point action plan in place, what communication have you had with Canada Post and its senior management? How have your business and your area of activity been treated? Was your company consulted? Was information shared?
Managing Director, eBay Canada Limited
In terms of moving to the community mailboxes and...?
Liberal
Ramez Ayoub Liberal Thérèse-De Blainville, QC
I am talking in general terms about e-commerce, which is your business' main activity. Have you had discussions with Canada Post about the projections for you area of activity? What are your concerns in terms of Canada Post's service and the new direction it intends to go in? Residential service is one thing. But business service is what you are all about. Was your company consulted? Have you been able to get into Canada Post to discuss it?