Government Operations Committee on Nov. 3rd, 2016

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

Okay, but when the five-point plan was released, did your side release another route, another avenue to take? Have you officially released a document with a plan? It could have been a good thing.

[Mike Palecek]

Yes, we released a seven-point plan in response to Canada Post's plan, but that's going back to early 2014. Since then, we've certainly put forward a number of documents advocating directions in which Canada Post could go and options it can take.

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

How was this plan received by the management?

[Mike Palecek]

I don't believe they ever commented on it.

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

Finally, sir, I would like you to share with us all the different efforts that were put forward by your group, your members, in the last few years. What exactly have your members been ready to do, or to change, to help Canada Post in the 21st century, with all the different aspects of the new world in terms of delivery and everything?

[Mike Palecek]

I think we put forward very comprehensive documents to the task force itself and submitted them to this committee a few months ago, explaining the various avenues in which we think Canada Post can go. Of course, we've also had our members participating in the Save Canada Post campaign, discussing with communities, and pushing for options such as postal banking, which has now been supported by over 600 municipalities across this country. We've spent the last two and a half years really reaching out to the public that we serve and talking about the services that they'd like to receive from their public post office.

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

What actual changes were made to your working conditions in the past few years?

[Mike Palecek]

As you know, we've just ratified a new collective agreement. Prior to that, as a result of the 2011 back-to-work legislation, we saw a major reduction in the starting wage for new hires at Canada Post. We saw the elimination of our sick leave plan in favour of a short-term disability plan. There were hundreds of millions of dollars in labour cost savings that came from our members.

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

I often get the sense that your union fails to recognize the financial trouble Canada Post has been in for a few years now. You have, however, agreed to new collective agreements in recent years, and those agreements do somewhat attest to your recognition of the precarious situation Canada Post is in.

How do you explain that, on the one hand, you disagree that Canada Post is in financial trouble and that, on the other hand, you accepted changes to your collective agreement? Was that forced on you? I'm not sure whether you get my meaning.

[Mike Palecek]

With the 2011 contract, we would certainly say that was imposed on us. We did come to a negotiated agreement in the end, but it was very much under the threat of the unconstitutional legislation imposed by the last government.

That said, we recognize Canada Post is in a situation where it's changing. It's a changing industry. We reject the idea that it's in a crisis. We think their own numbers and their consistent profitability outside of a couple of one-time events demonstrate that.

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

Thank you.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Ms. Trudel, you may go ahead for seven minutes.

[Karine Trudel, NDP, Jonquière, QC]

Thank you, Mr. Chair. I'm pleased to see the witnesses again this morning.

Yesterday, the committee had a chance to hear from Mr. Chopra. I know you attended the meeting and heard what he had to say.

Is there anything you would add to his remarks? Is there any new information, or any information that you heard, that conflicts with your claims?

[Mike Palecek]

I thought a number of things mentioned by Mr. Chopra yesterday were surprising. I'm going from memory.

I remember his saying that they lost $300 million in revenue in 2009 and talking about what a bad situation Canada Post was in in 2009. He neglected to mention that in 2009, they actually reported their largest profit in corporate history. I thought that was a little funny.

I thought it was strange that he would talk about the role of management and CUPW in innovation, and frankly, he was heaping a lot of praise on us that we've never heard before outside of a room like this.

Again, he completely neglected to mention that we have our appendix “T” committee, and our urban collective agreement, which is the service expansion in innovation and change committee. This is actually a joint committee with two management representatives and two union representatives.

He also failed to mention that they spent the last year demanding that this be cut out of our collective agreement. It was actually one of the last issues left on the table before we were able to settle.

I think we met a very different Deepak Chopra yesterday than we are used to, to be honest.

[Karine Trudel, NDP, Jonquière, QC]

Thank you.

We have heard from many stakeholders, including Mr. Chopra.

Do you see the Canada Post Corporation as a public service provider that has a duty, first and foremost, to serve the public, or conversely, do you think that it should be run more like a private company?

[Mike Palecek]

I think Canada Post is mandated by legislation. The aim of it is to provide a public service and to be self-sufficient in doing so. We don't see a reason to change that.

The one point that our union has historically differed from is that we don't believe that the profits of Canada Post should be going back to the government, but actually should be reinvested in Canada Post.

[Karine Trudel, NDP, Jonquière, QC]

Can you give us any examples of reinvestments that Canada Post could make?

[Mike Palecek]

Certainly over the last decades Canada Post has made billions of dollars in profit that have been returned to the public purse in the form of taxes, dividends, and other things.

We think it would make a lot more sense to reinvest that into the service. That could be something like expanding services into postal banking, but it could also easily be expanding the services that it provides to Canadians. Even expanding door-to-door delivery is in the cards when it's as profitable as it has been.

[Karine Trudel, NDP, Jonquière, QC]

Earlier, further to a question from my colleague, the discussion focused on common goals. I'd like you to elaborate on that.

What might pave the way to agreement between the Canadian Union of Postal Workers and Canada Post on a common goal, in order to make some headway and foster a positive working relationship? What common goals might you suggest?

[Mike Palecek]

I would suggest the common ground we should be looking for is actually how to expand services and how to serve the public.

We've consistently been putting this forward with the employer. We haven't found a lot of willingness to be receptive around that. Certainly, I know it's been mentioned that the unions at Canada Post have felt quite disrespected by not being consulted on these things, by being given only minutes' notice of announcements of major changes.

I don't think that is conducive to any co-operative relationship.

[Karine Trudel, NDP, Jonquière, QC]

Since I still have a bit of time left, I'm going to use it.

In your report, you compare Canada Post's wages with those of private sector competitors, and much of the focus is placed on the workers' wages. Yesterday, I asked about payroll as it relates to Canada Post's administration and management.

My sense is that the corporation's payroll is being blamed for the financial losses, but I wonder whether any measures can be taken on the administration side. Do you feel Canada Post is willing to consider a reorganization as far as its administration, governance structure, and vice-presidents go?

[Mike Palecek]

Sometimes I think, why don't you just let us run the post office? We'd do a better job of it.

In all seriousness, I don't think Canada Post needs nearly the governance and management structure it has. It's very top heavy—you're right. Most of the burden has been placed onto the workforce in order to make cuts.

Although one point I would maybe disagree on is that you said that losses have been placed on the workers to combat losses. In fact, there haven't been losses. Canada Post hasn't taken a penny of taxpayers' money in decades and, frankly, doesn't need to. The couple of losses we have seen have been from one-time events, as we've explained previously, and we fully expect them to make a profit again this year.

[The Chair, Conservative, Tom Lukiwski]

Madam Shanahan.

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

Thank you very much for being here this morning, panel.

I'm interested in reflecting back to you some of the things we've heard on the road because we've heard management—in their case, yesterday—and from the unions, and Canadians, your customers across the country.

There are really two types of customers, are there not? There are the individual Canadians receiving delivery, who are concerned about how that happens and the services they get at the post office. And there are the commercial customers. That's where the business is growing, in parcel delivery. I'm intrigued by what we heard from small sellers, from the e-commerce people, from people working through eBay and Shopify, and so on. That's where it's happening.

We also heard there's a need for flexibility in delivery options, whatever they be, because the sellers need to be sure their customers are receiving the goods. There needs to be a flexibility in the services that are provided through the post office. With that, comes a need for flexibility in making sure that Canada Post is able to provide a competitive offer.

That's why I would first like to ask you some questions about the financial performance. When we talk about the difference in the labour costs, why do you think there is such a wide discrepancy between management's calculations and yours?

[Mike Palecek]

To start with, I don't think there is a discrepancy. We're relying on management's numbers when we talk about labour costs.

In the table we presented in our critique, those are Canada Post's numbers. They are not ours. We didn't come up with them. I believe the 41% and 45% numbers that have been thrown around came from Ernst & Young. I'm not sure why their numbers would be so different from Canada Post's.