Government Operations Committee on Nov. 2nd, 2016

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

It has been three years since the five-year plan was implemented. You have seen the reaction of Canadians in general, as well as that of certain interest groups and political parties.

If you had to redo it today, November 2, 2016, would you create the same five-point plan? Would you remove or add anything?

[Deepak Chopra]

I think in any large-scale change, which is a multi-year, five-year to seven-year project, you start off and you learn, and you improve. It is no different than a large IT deployment, a large infrastructure deployment, or transforming a 253-year-old institution that is literally facing its existential problem with the decline of the sole purpose that it has served for almost 240 of the 253 years, which was to deliver letter mail. I think when you put that in the context of our current phase, every step of the way—even the first six months were harder than the next six months and the following six months—we have learned.

I'll give you the example of when we deployed our community mailboxes in certain communities. Madam Margles led the municipal engagement project, and personally attended numerous municipal committee meetings and public meetings. Where we had collaboration, we found better solutions. We moved almost 25% of the locations based on the input from the communities, from municipalities, where we had collaboration. We learned every step of the way. Our accommodation program got better when we learned new needs of Canadians. Our communication program got better as we understood there is no one-size-fits-all solution. No two streets are the same.

I think we have constantly been learning, and that will continue to be the case. I think any good organization needs to learn and improve, and continue to learn from those lessons. I think we will deploy everything we've learned in future changes.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

Our final intervention will be Monsieur Ayoub.

Mr. Ayoub, you have the floor for five minutes.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Thank you, Mr. Chair.

I would also like to thank our witnesses for being here.

We learned many things on our committee's cross-country tour to discuss Canada Post. I will focus on labour relations or relations between union groups and management. The working relationship must be able to advance a plan.

I don't know if you'll agree with my observation. I found that there was a significant gap in achieving a common goal. The common goal did not seem to be the same. I agree that making a change is never easy. The vision of change that you wanted to make did not seem to be shared at all. No one supported your vision. I didn't find any place in Canada, locally or nationally, that supported your change process.

How did you manage to proceed with a change like that without the union's support?

[Deepak Chopra]

Mr. Ayoub, it is a very important question for an institution where unions are as much part of the solution to our future as management's ideas would be.

Let me start by saying that we both agree—our unions and us—that we have a problem. There is no denying it. I'm sure they will appear before you, following us, and you'll hear from CUPW. We both agree that Canada Post is facing a significant challenge on its pension issues and on its business model. But we do disagree on how to address this monstrous, big challenge.

Now, I'll agree with you that there are two different visions of how we transform the business. There is a view that no element of any cost should be touched in order to transform the business. It is very difficult. It is very difficult for a corporation that was built on serving the needs of the 19th and 20th centuries to serve the needs of the 21st century. We have to change. I can't think of one organization, one business, that has not been disrupted through the Internet. The closest neighbours to our business are the publishing industry, the newspaper industry, the book industry. I don't have to tell you what's going on in those places.

The answer lies in finding common ground on revenues, where we believe we have lots of collaboration. I mentioned weekend deliveries, larger sizes of direct mail, and Delivered Tonight. These are innovations where we worked together with the union.

On the cost side, however, there are two different visions. There are two different views. Pension is a great example. It's an $8-billion solvency deficit. Even on a going-concern basis, if there's a market crash we'll be down 20%. So there are serious differences.

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

The actions and the understanding of the situation differ.

Do you think the obstacle to moving toward a common goal and ensuring that Canada Post continues to offer a quality service is that the union doesn't want to lose any jobs?

Do you think there's resistance to change and that the loss of the overall number of employees is the key part of the change that the union does not accept?

If not, is the problem working conditions and pensions?

What do you think the problem is?

[Deepak Chopra]

I can't speak for the union—you will hear from them directly—but I think it is a view that anything that affects the costs should not be touched. I have often used the extreme example that if we do nothing, the last letter we deliver will cost Canadians $3 billion. As letters keep declining, they are down one third—

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

We aren't there yet.

[Deepak Chopra]

It's a difficult issue. I understand it's a difficult issue. We must acknowledge that technology and changes require all organizations...and not just Canada Post. It includes media companies, manufacturing; virtually any industry you look at is being disrupted by digital technology. We are no different. We must change with the times.

We have been very diligent. That's why I mentioned in my remarks that we have 16,000 employees retiring, and the most respectful way of dealing with this change is through attrition. That is something we have done successfully in the past.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Mr. Chopra, on behalf of the committee, I want to thank you and your management team for appearing before us once again today.

I also want to thank you for your kind comments in your opening remarks about the work this committee is doing. I can assure you that over the last month, this committee has done extraordinary work in consulting with Canadians from coast to coast to coast. I can also assure you, on behalf of this committee, that the final report, whenever it is tabled in Parliament, will be absolutely reflective of what we've heard. I'm quite confident that the recommendations that this committee comes up with will be in the best interests of both consumers and the corporation itself.

[Deepak Chopra]

Mr. Chair, I would like to echo what you just said, in a slightly different way.

The committee's work is so important at this stage in our journey. You've talked to Canadians, and we do share a common goal. Serving Canadians and having an institution survive for another 250 years is as important to this committee and to this country as it is to us. I think we all will do our very best and contribute and serve, and then the next generation will take over. I think we share your pain and your joy as you go through this. We have a common goal, and we'll do anything we can to give support.

[The Chair, Conservative, Tom Lukiwski]

Thank you for that. Well said, sir.

We are suspended until the next group of witnesses comes to the table.

[The Chair, Conservative, Tom Lukiwski]

Ladies and gentlemen, could you all take your seats as quickly as possible?

Thanks for your attentiveness. Thank you, Ms. McAuley. I was hoping we hadn't missed anyone.

[Brenda McAuley, National President, Canadian Postmasters and Assistants Association]

I wasn't too far down.

[The Chair, Conservative, Tom Lukiwski]

To our witnesses, thank you for your appearance here today.

I believe all of you have appeared before us before and are very familiar with how the process works. Normally, we would give five minutes for brief opening statements. You still have that, if you wish. However, that would curtail the amount of time we have for questions, because the bells will start ringing in less than an hour, and we will have to adjourn at that time.

I would ask all of you, if you have an opening statement, to please curtail it perhaps to just new information that you haven't presented before, or, if needed, just a re-emphasis of some of the priority items you wish to present. Otherwise, we'll be running out of time.

With that, we will start with Ms. McAuley.

[Brenda McAuley]

My name is Brenda McAuley. I'm a postmaster. I've worked in a post office for 18 years. With me today is my co-worker, Daniel Maheux, who is presently the vice-president of the Canadian Postmasters and Assistants Association. Daniel is a postmaster, as well. We represent our members who work in 3,260 rural post offices across Canada. Our members consist of 95% women.

Once again, thank you for giving CPAA a second opportunity to express our views. We do value all the effort that your committee has put forward and will continue to put forward.

When we were last here, there were questions that were asked of the panel that, due to time constraints, CPAA did not have a chance to respond to. We would like to take the opportunity to do so now.

One of the questions that Francis Drouin posed was whether our members would need to have certified financial planning training, if we had postal banking. To respond to that, I would say no, and I'll tell you why.

When Canada Post partnered with the Bank of Montreal in 1997, they partnered for a two-year pilot. The pilot was so successful it went on until July 2013. The way that looked for 16 years was that it was so successful, all the community members had bank accounts. They would do the day-to-day transactions in the post office. If anybody wanted a mortgage or any kind of special investment or if there was paperwork that needed to be provided, the clerk at the post office would provide the paperwork. If they wanted a mortgage, the postmaster would let the bank manager know that. The bank manager would come to town once a month and service the needs of the community.

This went on for 16 successful years. The reason, I understand from all the minutes of meetings, Canada Post pulled out was because the banking hours were not supported for the workers. The workers were torn between “Am I a post office or a bank?” Had those banking hours been supported, it would have been very successful and would have continued to be successful.

That said, the Bank of Nova Scotia also partnered in a community in Newfoundland. The two-year pilot was successful and it went on for four years. The Bank of Montreal also partnered in Moose Factory, and the two-year pilot went on for eight years.

The task force report, on page 86, states, “Canada Post piloted partnerships with a couple of banks in the late 1990s did not succeed”. Well, just from what I've explained to you, CPAA has a different perspective.

The task force report states, in essence, that the post office could become the community hub. Another question was on what services could be added.

CPAA believes that the post office is a community hub now and always has been. Having personally worked there for 18 years, I know that when people are looking for information, whether it has to do with taxes, pension forms, passports, directions, assisting seniors with various needs, you name it, the post office is the place to stop for the information.

The task force's suggestion of having a business centre with the availability of Internet would just increase the traffic and potentially generate revenues for Canada Post. It would also continue to drive growth in rural Canada.

Our offices can become the financial engine for social and economic development in rural Canada. They could also be the information reference centre for federal government departments.

For example, information and/or forms on the following services could be made available to improve commercial and customer traffic: post banking and more financial services, social insurance number kits, employment insurance applications, Canada Pension Plan applications, old age security applications, passport forms, specialized income tax forms, and general tax forms. Often, people would come in looking for specialized forms. There are also student loans and the list goes on. We could also partner with the province for motor vehicle registration and renewal of driver's licences; insurance renewal; fishing, hunting, and marriage licences; etc.

In closing, despite the moratorium being in place, we have seen over 350 public post offices close. We have also seen public post offices replaced with privatized franchises. As for point three of the previous government's supported five-point action plan, it appears Canada Post is still promoting franchises.

Since 2010, we have seen a drastic reduction of service to our communities, with 8,000 hours removed from our public post offices. There have been over 500 good-paying jobs with benefits lost. Our members are 95% women, and there are few living wage jobs in rural Canada.

Just recently, we heard Bill Morneau announce the creation of a new infrastructure bank. He stated, “We need to create good-paying jobs.” Our question is, “Why can't we keep the good-paying jobs we already have?” By investing in the infrastructure that is already in place, let's build up this public corporation and not tear it down.

[The Chair, Conservative, Tom Lukiwski]

Mr. Paradis.

[François Paradis, National President, Union of Postal Communications Employees]

To the chair's point, I'll definitely keep it brief.

I believe we articulated our position last time, when we provided an opening statement, as well, as through our written submission. I won't be covering that part. I'm more than happy to answer any questions you may have.

In my opening statement, I would like to thank the committee for a second invitation. I certainly appreciate the opportunity to at least provide our thoughts and concerns regarding the discussion paper or even the Canada Post review process.

There are some concerns with the process. I don't feel like our ideas were necessarily considered by the task force. There are a number of ideas that didn't appear in the paper whatsoever. We also think it would have been beneficial to have an employee representative on the task force. I'm not too sure how the task force representatives were selected or named, but there would have been value to having some form of balance on the task force, to have someone who is coming from labour, and someone who has that history as an employee representative, to provide their perspective on certain issues.

We also feel that throughout the document, it appears that the task force would have had multiple conversations with the corporation. From one perspective, I understand that. From another perspective, when you're trying to build an objective document, it doesn't necessarily look good when you're getting a lot of information from one of the stakeholders, and the other stakeholders, the unions, only get one opportunity to provide their perspective on the issues.

Those were some areas of concern. We talked about privatization, and the way that it is written it's almost like a road map to the eventual privatization of the corporation, just with the amount of outsourcing that would be involved and some of the things that the task force brings forward.

There will be significant job losses, the elimination of many jobs, not just for the current incumbents, but also removing those jobs from the labour market. That will have an impact on the economy, and that will have an impact on future generations. Those jobs are being eliminated completely from the economy.

The other concern that we had, of course, is around the pension plan. As was discussed, the position that the unions took was exactly one that I believe Mr. Cheeseman spoke to briefly. The option that we brought forward, essentially, is seeking permanent solvency exemption. That would require some legislative change. I don't believe it's an option that's discussed in the task force discussion paper, but is certainly one we brought forward to Ms. Foote and to Bill Morneau, and it's something we certainly would want to explore further, or to have the committee at least consider.

If you have any questions, Howie and I are both here to answer any questions you might have.

[The Chair, Conservative, Tom Lukiwski]

I'm sure there will be several questions.

Finally, we have Monsieur Dubois.

[Guy Dubois, National President, Association of Postal Officials of Canada]

Once again, thank you for the invitation to participate in this process. I would like first to introduce my colleague Michael Ling, first vice-president for the association.

Let me start by saying that the association supports some of the five-point action plan from Canada Post. We agree with the corporation and the task force that in some way we need to evolve. We are in 2016, so something needs to happen.

The association is a trade union and sees itself as having a very progressive approach to labour relations. We are a strong advocate of alternative dispute resolution, interest-based negotiation, consultation, and open dialogue. Our unique blend of broad-minded thinking and collaborative problem-solving places us in the distinctive position to assist the corporation in implementing some of the five-point action plan.

In fact, our members have directly participated in a conversion of urban Canadian households receiving door-to-door mail delivery to less costly community mailboxes. The corporation has placed this part of the five-point action plan on pause pending the result of the standing committee, and we are anxious to see the outcome of it.

Beyond this initiative we see a number of opportunities for the future of Canada Post, including leveraging of one of the largest retail network infrastructures. This network has served Canada as well as merging the rural with the urban, as well as the corporation's fleet transportation network, which can be further leveraged to serve Canadians.

The association can state unequivocally that the past success of Canada Post has been a direct by-product of the work and contribution of all its employees. It is the association's impression that any change to the corporation may result in a negative impact on the terms and conditions of employment of those employees. It is the association's belief that in order for the corporation to be successful it must attract a high level of talent. This can only be achieved by providing attractive working conditions and employment which must include good benefits and a strong pension plan for its employees.

We believe that we must be involved in the conversation. By way of example, in late 2013, the honourable Mr. Flaherty spearheaded government legislation that provided a five-year exemption to Canada Post from the requirement to make payment to address the solvency deficit required under the Pension Benefits Standards Act. It appears that the reprieve will come to an end without any further resolution on the horizon.

We unfortunately have not been part of those discussions. The association believes in the collaborative approach to seeking solutions to address the concerns of all employees of Canada Post. This would include consultation on how to assure the provision of a solid and fair retirement. It is the association's view that a successful Canada Post results in a content and thriving employee, which will benefit all Canadians.

The association looks forward to working with the corporation and participating in the mandate review process, particularly in light of the challenge and opportunity facing Canada Post Corporation today, and we believe we have a lot to offer. As long as we keep our focus and our goal to deliver quality and affordable postal service for Canadians and to consult with each other, we believe this can be achieved.

I know my English is not as perfect as some of yours but I think everybody understood. Thank you.

[The Chair, Conservative, Tom Lukiwski]

It was very good.

We'll start with our seven-minute rounds, and we have Madam Shanahan for seven minutes.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much to all the members of the panel for being here.

I heard some interesting key words, and we certainly heard them when we were on the road, “collaboration” being one, and also “flexibility” and “working in partnership“ as well.

I'd like to explore the pilot program with the banks a little further with you, Ms. McAuley.

What was the format? Was it the postal workers themselves who were trained in the banking transaction? How did that work? Did you share space? What did the security look like?

[Brenda McAuley]

Right now, we have security in the post office. What that looks like was they'd have the wicket for the banking on one section, and the wicket for the postal services on the other section. All the postal workers in the post office were trained.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Something that we heard from the credit unions the other day was that they would be interested in exploring that kind of a partnership. They would want to be sure that it would be an open concept, and there was some concern about the post office crowding out the credit union sector business. What I like to hear is that people are open to considering that kind of business. If there's a way to provide that service across the country, in rural and remote areas where it doesn't exist, that's certainly something that's interesting to me.

On the other side, though, is the importance of revenue growth. To ensure revenue growth, we need to have flexibility in the delivery mechanisms. Something that we heard in places like Scanterbury and Yellowknife was that, in one case, the stand-alone post office was only open three hours a day, so that wasn't serving anyone. We actually saw it. It was quite small, and you couldn't fit more than half a dozen people in the post office. They were moving to a grocery store concept. In other words, because they were able to collaborate on this, they were able to find a solution that fit the community.

How open are your members to finding different kinds of solutions to ensuring delivery, both to individual Canadian customers, and also to the businesses, the micro-businesses, that are growing and need extended service hours?

[Brenda McAuley]

As I was mentioning, our hours have been drastically reduced, and that's why you see those post offices that are only open three hours a day. That happened in 2013 under the five-point action plan. There was a flood of hour cuts that went across the country, 25%.

However, with that said, our members would be really excited about that, because right now they're doing basic banking anyway to a certain extent. You know, money orders, MoneyGram, authenticating PINs on credit cards. Our members are good at authenticating people because we know who the people are in the community. Absolutely. There are few good-paying jobs with benefits for women in rural Canada, so they would absolutely be open to that.

As far as the security goes, to my knowledge, in all the minutes I've seen, there was never a break-in in Newfoundland in the 16 years that they had the post office there.