Government Operations Committee on Oct. 31st, 2016

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

Ms. Mendès.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

Thank you very much.

First of all, on the question of offering Canadians a cheaper way of tracking either post or parcels, it exists. I don't think Canada Post makes enough of an advertisement of it. It's called registered post. You can keep track of whatever you send and it takes four or five days to get delivered, but you actually do keep tracking it and it's cheaper than sending it express post or by Purolator or whatever. So that is one—

[Stewart Bacon]

I think it's called regular parcels, or something like that.

[Alexandra Mendes, Liberal, Brossard—Saint-Lambert, QC]

I'm talking about registered, because if you register something, you may or may not need a signature, but you are getting a tracking number. You can go online and check the delivery time and that it was received, but it doesn't give any assurance of speed, that it will be delivered in 24 or 48 hours. Canada Post should definitely explore this and make it known to people that they have that option, and to give that to businesses too, that they can offer the alternative to customers. For example, if I go online and shop on Indigo, I can choose registered post. That will cost me less, but it will take a few more days, but I don't care because I don't need those books urgently.

Those are alternatives to consider.

I saw the DHL centre, the new one in Leipzig, Germany, in April. I was absolutely flabbergasted. It's immense. They have half the airport to themselves, and it's huge. I'm sure you know it.

They don't have the geographical challenges that Purolator has in Canada, obviously, but how do you see this kind of investment that they made in Leipzig, compared to what Purolator is doing here in growth of business and eventually even growing bigger in the United States?

[The Chair, Conservative, Tom Lukiwski]

Be very brief as we're out of time now.

[Stewart Bacon]

Purolator is always trying to be creative about solutions we can invest in for better, more economical, more technology-enabled service. It's a requirement.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

Mr. McCauley, you have five minutes.

[Kelly McCauley, Conservative, Edmonton West, AB]

Thanks for joining us. We're at the end of the day, so I'll be brief.

Mr. Bacon, one of the suggestions that's been bandied about to address the pension issue is to sell off Purolator and apply it toward the pension structural deficit. Have you done an evaluation, or is there a publicly available evaluation of the worth of Purolator? Is it possible to disconnect Purolator from Canada Post with all the overlapping admin work?

[Stewart Bacon]

We haven't done any work on that scenario at Purolator. I can't speak for Canada Post.

[Kelly McCauley, Conservative, Edmonton West, AB]

Is it possible to detach from Canada Post to be sold off, or is there too much overlap of administrative services? I understand Canada Post bills Purolator for some work, especially on the administrative side.

[Stewart Bacon]

With the synergies we've built, there certainly are connections, but they're all built on a business-like competitive basis, and I am assuming they could be detached, if that was what was desired.

[Kelly McCauley, Conservative, Edmonton West, AB]

One of the items we read about as well is that Purolator is under pricing pressure. You mentioned that. Is that because of reduced volumes, or is it because of competition with UPS and FedEx?

[Stewart Bacon]

There's no question it's a very competitive marketplace. All the big international players are here, as well as some Canadian-based players, some regional players, so there are always competitive aspects to our business, and we are always looking at ways to reduce costs, improve service, use technology, and provide better service for our customers. It's an ongoing day-to-day thing. Yes, I think everybody in the business is under competitive pricing pressure.

[Kelly McCauley, Conservative, Edmonton West, AB]

What do you see as the biggest risks for Purolator in the coming years? Is it FedEx doing a price war? Is it business disrupters such as a drone-type service or driverless cars?

What keeps you up at night worrying besides committees? Well, these committees put you to sleep.

[Voices]

Oh, oh!

[Stewart Bacon]

I think the risk to Purolator, as it is a risk to anybody competing in this business, is it's a fast-moving business. Dimensions are changing, and I think the risk is to be able to keep on top of all the dimensions: the cost, the volumes, having the right employees, having good labour agreements, and being able to execute the work properly. It's the risk of doing the business.

[Kelly McCauley, Conservative, Edmonton West, AB]

Mr. Mackrell, I only have one minute, so I'll ask you a quick question.

Over the three weeks of travel, we heard some odd claims. One was that there was some insinuation that Pitney Bowes was getting special pricing because of a past relationship with Mr. Chopra. I wonder if you'd take this opportunity to put to rest such silliness.

[Bill Mackrell]

Yes, it's ludicrous. Obviously, Deepak Chopra worked with Pitney Bowes for probably a couple of decades and I know him very well, accordingly. That's a ludicrous statement.

[Kelly McCauley, Conservative, Edmonton West, AB]

I figured as much, but it came up a couple of times, so I wanted to put the facts on the record.

Gentlemen, thanks very much.

[The Chair, Conservative, Tom Lukiwski]

Madam Ratansi will have our final intervention, for five minutes, please.

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

I have a quick question.

Purolator, I know, is 91% owned, so I won't ask if it is in competition with Canada Post. As for Pitney Bowes, are you in competition or in synergy with Canada Post?

[Bill Mackrell]

We're a client, a customer, and they regulate us. It's a very unique scenario we have. It's a trifecta.

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

You are their client, their customer, and they are the regulator.

[Bill Mackrell]

Right.

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

I'll follow up on what Mr. McCauley said.

When I used to use a Pitney Bowes machine it was cheaper for me. Is it still cheaper? Do I still pay 85¢?