Government Operations Committee on Oct. 31st, 2016

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

I mean that, at Purolator, you focus on the business-to-business model.

[Stewart Bacon]

Yes.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Since the increase in parcel deliveries has had an impact on the business-to-consumer model, you haven't been affected much by the change.

[Stewart Bacon]

I think that, when the tide rises, everyone heads to the wharf.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Everyone's affected. Okay.

[Stewart Bacon]

That said, Canada Post has benefited the most from this phenomenon.

[Alupa Clarke, Conservative, Beauport—Limoilou, QC]

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Mr. Weir, for seven minutes, please.

[Erin Weir, NDP, Regina—Lewvan, SK]

Here we are at the end of the day, and we started the day hearing from eBay Canada Limited a proposal for Canada Post to offer a lower-cost tracking option. I think that connects a little to the point that was made that people are maybe less concerned about speed but still want reliable service with tracking. Do either of you have any thoughts about the feasibility of Canada Post filling that niche?

[Bill Mackrell]

I think they should explore all options. It really comes down to client choice. If clients have an appetite for a different level of service, Canada Post should absolutely explore it.

[Erin Weir, NDP, Regina—Lewvan, SK]

Logistically, do you see any particular reason that Canada Post couldn't offer tracking at a lower price, if we accept that delivery might not be quite as fast?

[Bill Mackrell]

I'll defer to my colleague on that one.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay.

[Stewart Bacon]

I'm not sure what you mean by tracking at a lower price.

[Erin Weir, NDP, Regina—Lewvan, SK]

I guess the argument from eBay was that if you want a service from Canada Post that includes tracking, you have to buy some kind of relatively expensive rapid delivery, like express post, or something like that, whereas they think there's a lot of demand to have the tracking but without the speed, at a lower price. I was trying to ask about the feasibility of that.

Sorry to put you on the spot. We don't have to stay on that, unless you have a further thought on it.

[Stewart Bacon]

I really can't comment on what Canada Post can do for what cost.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay.

Something interesting that we heard in Dryden, Ontario, was a concern about the way Canada Post sorts mail. The perception there was that mail was being trucked from Dryden to Thunder Bay, run through a machine there, and trucked back to Dryden. The concern was that this was inefficient and was being done only because Canada Post had bought this big fancy machine in Thunder Bay and needed to run more mail through it to justify it.

Since I believe, Mr. Mackrell, you might be in the business of supplying that kind of equipment, I wonder if you have an alternative view.

[Bill Mackrell]

The solutions that we provide are generally to the end user, who can sort their mail and deliver it to Canada Post. By doing that, they get postal discounts or incentives for delivering the mail to the sorting facility already sorted.

[Erin Weir, NDP, Regina—Lewvan, SK]

Okay.

[Bill Mackrell]

I think we should do more of that. Using those types of technologies to deliver mail to Canada Post that has advanced through the sorting process is a good way for Canada Post to reduce costs. One of the public-private partnerships that Canada Post could explore further is how the mailers or industry can participate in things like sortation.

[Erin Weir, NDP, Regina—Lewvan, SK]

I suppose if you're doing a mail merge and you have all the postal codes, then it might not be that much more work to have it sorted accordingly—

[Bill Mackrell]

Right.

[Erin Weir, NDP, Regina—Lewvan, SK]

—so good point.

For parcel rates, another concern that we heard, and I think this might relate to some of your testimony, Mr. Mackrell, was that Canada Post currently discriminates in its parcel pricing depending on the location and the size of the market, etc. While those might be relevant variables, it's also the case that Canada Post is obliged by international treaties to offer essentially a flat rate to foreign companies shipping into Canada. Do you have any further thoughts on that?

[Bill Mackrell]

My comments were largely in the letter mail and the marketing mail arena, where price sensitivity comes into play. Increases in that realm would have a dramatic impact on a marketers' ability to continue to use the mail and get the ROI they're looking for. On the transaction mail side, and there's no secret it's in sector decline, we don't want to accelerate that any further. My comments on pricing, and controlling pricing, and making sure it's predictable and affordable really were more on the letter mail and marketing mail side of things. Parcel delivery I see as being obviously more competitive, and the competitive forces govern more there.

[Erin Weir, NDP, Regina—Lewvan, SK]

Your case on ad mail is essentially to maintain five-day delivery and keep the costs reasonable.