Okay.
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.
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.
2:05 p.m.
Senior Chief, Payments and Pensions, Financial Sector Policy Branch, Department of Finance
If you want more detailed information to compare how it performed vis-à-vis other crown corporations federally, we can provide the committee with that information.
2:05 p.m.
Conservative
The Chair Conservative Tom Lukiwski
If you could, that would be helpful. Thank you very much.
Mr. McCauley for five minutes, please.
2:05 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Thanks for joining us today, it's very good information.
Ms. Hemmings, you mentioned...Ms. Hemmings?
2:05 p.m.
Senior Chief, Payments and Pensions, Financial Sector Policy Branch, Department of Finance
Oh, sorry.
October 31st, 2016 / 2:05 p.m.
Some hon. members
Oh, oh!
2:05 p.m.
Conservative
2:05 p.m.
Senior Chief, Payments and Pensions, Financial Sector Policy Branch, Department of Finance
It's the earpiece actually.
2:05 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
You said there are 19 crown corporations. How many of them compete directly with the private sector, like Canada Post does with some of their—?
2:05 p.m.
Senior Chief, Payments and Pensions, Financial Sector Policy Branch, Department of Finance
There's the Business Development Bank, the Export Development Corporation, and the CPPIB is competing in some respects. Also, CBC is. There are several.
2:05 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Okay.
Have any of them ever received the exemption, like a permanent exemption, that you recall?
2:05 p.m.
Senior Chief, Payments and Pensions, Financial Sector Policy Branch, Department of Finance
No one has ever received a permanent exemption; however, some of the crown corporations have opted to take a solvency reduction on occasion. Just as Canada Post did from 2011 to 2013, there are some other crowns that have opted to do the same thing.
2:05 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Okay.
Mr. Skinner, I've asked the question before, but if Canada Post was exempted, so to speak, from the solvency, how much of a competitive advantage would it give them over companies like FedEx and UPS? Would it be just marginal, insignificant, or would it be actually...?
2:05 p.m.
Actuary, Mercer (Canada) Limited
It's difficult for me to say. I don't have any detailed information on what those competitors' benefit plans are like and what kind of cost structure they have, so it's difficult to be precise about that.
I do know that, to the extent that they have DB pension plans, they would be required to fund them on a solvency basis.
2:05 p.m.
Actuary, Mercer (Canada) Limited
They may not have DB pension plans, though. I'm not sure what their compensation structure is like and how that might compare to what Canada Post is offering.
2:05 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
You mentioned that some of the Canada Post people have gone over to a defined contribution. We've heard that a very large cohort, something like 35% to 45%, of Canada Post employees will be retiring in the next five years. For the sake of argument, if they retired and a new cohort were brought in on a defined contribution, would that have any effect on the pension issue? Would it be significant?
2:05 p.m.
Actuary, Mercer (Canada) Limited
I would say that most new groups of employees who are hired at Canada Post would enter the defined contribution, the DC component. A major exception to that would be the CUPW, the Canadian Union of Postal Workers, and they make up about three-quarters of the active membership—
2:05 p.m.
Actuary, Mercer (Canada) Limited
So, for the most part, the replacement of people who retire will likely still be going into the defined benefit component.
To the extent that we shift from DB to DC, though, it slows the growth of the defined benefit component. We're not adding more cars to the back of the train.
2:10 p.m.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Ernest & Young mentioned as well that the liability for the pension is very large compared to the revenues. To your knowledge, is anyone else in a similar position? We have this huge outstanding pension liability, but our revenues have been—
2:10 p.m.
Conservative