Government Operations Committee on Nov. 3rd, 2016

[Françoise Bertrand]

It is not up to us to decide for the government.

We already said in our report that it could be the 2017-2018 fiscal year. We have established a number of hypotheses. A Morneau Shepell document resumed the entire table. The document talks about completely forgetting the issue of solvency in favour of overcapitalization, as we have seen in some regimes, and to move toward other solutions we have brought up.

However, the government will definitely have a decision to make on that. We have talked about all the possibilities.

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

Okay.

We have often discussed the issue of the moratorium on post office closures in rural regions. I think that also applies to suburban post offices. We have also often heard the perception that the end of that moratorium would inevitably lead to the crumbling of Canada Post's pan-Canadian infrastructure.

Do you think the moratorium is essential to the maintenance of Canada Post's pan-Canadian structure? Should that moratorium perhaps be reviewed?

[Françoise Bertrand]

We present that option in our report. The idea is that, in the absence of alternatives in rural and remote areas, the post office remains important for the people living there.

As I mentioned, in densely populated areas—be it in Halifax or in Moncton—people told us in the survey that the advantage of a franchise is that the hours of operation are longer. In addition, people can stop not only for the mail, but also for other things at the same time.

We felt that the idea of a community hub was still very worthwhile. The value of the post office remains high for some regions rather than others.

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

My colleague and I think that post offices in rural regions are very important. By ending the moratorium, we could save rural post offices and close post offices in the suburbs, where there are many franchises. In our opinion, that's really what should be done.

We are somewhat concerned by what we have heard, to the effect that the end of the moratorium would lead to the crumbling of pan-Canadian infrastructure.

[Françoise Bertrand]

The option proposed here is not to put an end to the moratorium, but rather to review it.

Maybe you want to talk about it, Jim, because you know those areas better than I do.

[Jim Hopson]

That's the key. We did not say that the moratoriums should just be abolished and to move on, but rather to revisit the issue. It goes back to 1994. We're talking about two decades or more. There's been a lot of change in Canada. I've lived in rural Saskatchewan for much of that time. I've seen a great transformation. So I think it's time to revisit it. There still need to be some controls in place and so on, but I can tell you from personal experience that the post offices that are in community stores and so on are also meeting places and the flag is there for Canada Post. It's time that we looked at it and came up with a better plan as we go forward.

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

In one study, the Conference Board anticipates a deficit of $1 billion and, three years later, Ernst & Young anticipates a deficit of $700 million. Is that reduction attributable to Canada Post's five-point action plan, to a different context or different accounting? The deficit is less than $300 million. Here is the question I am asking myself. Does this mean that the five-point action plan has worked?

[The Chair, Conservative, Tom Lukiwski]

We are out of time. We will have a few extra minutes left at the end of this last intervention, and I'll allow the committee to answer any other unanswered questions in about five or six minutes.

Our final intervention, formally, comes from Monsieur Ayoub.

Five minutes, please.

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

Thank you, Mr. Chair.

I want to thank the witnesses for joining us today. I am very happy to see them again.

As you said, your appearance gives us an opportunity to further our understanding and to complement the report you have presented to us.

I don't want to come back to all the findings of the report, as there are many of them and they overlap. However, I would like you to tell me how you feel about the situation. A written report often draws conclusions and makes recommendations. However, in a given situation, something emerges that a member of a committee undertaking a study cannot find in a report.

I know that Canada Post is at a crossroads. What would you have wanted to add in the report concerning future labour relations at Canada Post? I have been insisting on this for a long time. What is your take on that? Do we have the same view of things? Do you also see such a gap?

[Françoise Bertrand]

That is a delicate question.

Our committee is independent. We could not cover everything under the sun in four months. So we stayed within our sandbox and did not uncover the Caramilk secret.

In our latest considerations, you can see what we profoundly believe. We were saying that there is no magic formula and that a realignment is needed, but no recommendation you will make could be followed without collaboration from all the parties. Yet that collaboration begins with the following question: do we all recognize that some things need to be improved? It will be impossible to find solutions together if everyone does not agree on what needs to be improved.

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

To work together well, there must be willingness and mutual trust. I have noted that the union, be it local or national, no longer has confidence in the Canada Post management. I have the same feeling when it comes to the senior officials and opportunities to make progress. That does not concern anyone in particular; it's generalized. There is a flagrant lack of trust.

How can we move forward in a context where two groups are questioning the figures and labour relations, don't have the same goals and do not agree on how to do things? Once again, those people are on opposite sides.

[Marena McLaughlin]

As Mrs. Bertrand said, we worked within a framework, but we also echoed the recommendation made by Mr. Campbell in 2008. The recommendation is to take things further, to bring together all those people, not only those from the union and the Canada Post management, but also government representatives, stakeholders, as well as individuals who buy those services or benefit from them.

We can criticize the financial data to within a few dollars or each other's comments, but the fact remains that, today, in the digital era, the use of postal services is dropping off around the world. Canada Post has a monopoly in terms of mail, but that is all. That activity has been dropping off. It is not viable and will not be viable in the future. So unless everyone gets to work, this situation will continue.

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

It is said that Canada Post must be profitable and must not have a deficit. Yet whether the government is providing subsidies or the price of the stamp increases, those situations are impossible. The increase in the price of the stamp would be over 30%, which is huge. Canada Post has a monopoly, at least when it comes to mail. No company from the private sector could increase prices like that without suffering the consequences.

[Françoise Bertrand]

Jim will answer pursuant to our answers.

[Jim Hopson]

Really, what's happening is not much different from what we see in many industries and so on: it's change. In times of change, two things happen. You either pull together and come to common solutions, or you begin to attack and point fingers, and we've seen some of that, of course.

I think the status quo is just not an option. There is going to be change because of digital and because of parcels and so on. We need the stakeholder—the federal government—and the senior management and unions to work together to find solutions that will be good for all.

Canada Post is very important to Canada. It needs to continue to exist and be a strong entity, but existing as it is now is not an option. I would agree with you that we need to come to a point where, instead of saying one or the other is at fault, we find ways to work together. We've seen it happen in the auto industry, when crisis brought about significant change. We now see them sitting down together to hammer out solutions that will work.

It can't be done on the backs of the workers, and it can't be done by saying that management is bad and that they don't have all the solutions. I think that's really the answer.

[The Chair, Conservative, Tom Lukiwski]

As I mentioned earlier, we have a couple of extra minutes, but there are at least two unanswered questions that were posed, one by Madam Ratansi and one by Mr. Clarke. I'll give you five minutes to wrap up if you care to comment on those two questions that you didn't have a chance to answer.

[Françoise Bertrand]

There's the one on Australia.

[Jim Hopson]

I'll take the one on the difference between the $1 billion and the $700 million. I think a lot of it is just the result of the work that was done by Canada Post and by the unions in that five-point plan.

There were some conversions that made a difference. The price increase was very significant in terms of transactional mail. There were some efficiencies. There was work done through the collective bargaining. There has been a reduction in staff numbers, but there has not been a reduction in the cost overall. It has stayed fairly stagnant, but at least it was contained. Also, we've seen the growth of parcels and the revenue generated from that.

That would point to some of the discrepancy, but even with the things that happened, there is still going to be a deficit at the end of the day.

Françoise?

[Marena McLaughlin]

On Australia—and also on Switzerland maybe—there are consortia in Australia that were created maybe over a hundred years ago, but we're talking about entering a market today for postal banking.

There's a reason why Canada and the United States got out of that in 1968-69. It was because nobody was using the service. We're saying that to enter that today, with the legislation in place, with the regulations, with OSFI, and with the international trade.... Plus, the fact is that in Canada, 99% of people have a banking account and only 7% of the population that we interviewed through EKOS surveys said they would change. There's that percentage of the population that says that maybe they would.

We can all ask ourselves the question, would I change tomorrow? Will you change? It means a lot of investment in technology, with risks from money laundering and risks from cyber-attacks, and it means retraining and having the right people in the right place. For all of that, we said that we did not favour that option.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Once again, Madame Bertrand, Mr. Hopson, and Madame McLaughlin, thank you very much for all the work you've put in and the sacrifices you've made for the four months that you spent on this issue. You've identified quite correctly that it is a very important issue to Canadians.

I think the one constant theme that we've heard throughout our travels, and which you've underscored yourselves, is that no one wants to see Canada Post vanish. Everyone wants to see a healthy and prosperous Canada Post. I'm sure your work is going to be able to contribute to that. Once again, thank you very much.

We will suspend for a couple of minutes until our next witnesses approach the table.

[The Chair, Conservative, Tom Lukiwski]

We'll commence.

First I want to thank Minister Brison for once again appearing before our committee on the subject of estimates and the budget and the alignment between the two.

I understand, Minister, that you have a brief opening statement. Yours will be the only statement from our witness table, after which we'll commence with a round of questions from our committee members.

Minister Brison, once again, thank you for being here. The floor is yours.

[Scott Brison, Liberal, President of the Treasury Board]

Mr. Chair, thank you for inviting me to return to your committee to discuss estimates reform.

I'm pleased to have with me today from my department, Yaprak Baltacioglu, the secretary of the Treasury Board; and Brian Pagan, the assistant secretary of the expenditure management sector of Treasury Board. Nick Leswick, the assistant deputy minister of economic and fiscal policy at the Department of Finance; and Siobhan Harty, assistant secretary to the cabinet for parliamentary affairs from the Privy Council Office, have joined us as well.

As I said last time I was here, I know estimates reform is a very important issue for this committee. I value your committee's input as we move forward on it.

I think this is either my 13th or 14th parliamentary committee appearance between the House and the Senate over the last year. I take working with committees very seriously as a parliamentarian. As I mentioned last time, June 2 will be my 20th anniversary, after some seven elections, of having the opportunity to represent the people of Kings–Hants. For sixteen and a half of those years I will have been an opposition member of Parliament, and for three and a half, a member of government.

As such, my views on these issues in terms of parliamentary engagement are shaped by having spent a lot of time as a member of Parliament who recognizes fully the importance of Parliament and the role that parliamentarians play—a fundamental role in terms of holding government to account. The ability to exercise oversight is the most important role that we as parliamentarians can play on behalf of those we represent.

I would like to address some of the key items that were raised by committee members last time and in subsequent meetings, and sometimes in individual discussions and smaller groups.

First is their desire for the important requirement that ministers appear before committee to explain their estimates. On behalf of the government, I want to assure you on the record that our government is committed to ministers appearing before committee when invited to defend their estimates. We firmly believe that parliamentary oversight and accountability are absolutely crucial to our democratic system.

Having ministers before committee, when invited to discuss and defend their estimates, is a key part of holding government to account. You have my personal commitment, but also the commitment of our government, to make sure that is the case. That was laid out also in our mandate letters by the Prime Minister who said that he wanted “meaningful engagement with...Parliamentary Committees”.

We take that very seriously in our government.

Second, I heard the concern about changing the Standing Orders to allow the main estimates to be tabled no later than April 30. There was a concern that this would weaken parliamentary oversight, because it would shorten the number of days parliamentarians and their committees would have to study the main estimates.

To alleviate that concern, I propose April 30 for the first two budgetary and estimates cycles. This is important operationally because we are asking a lot of Treasury Board, Finance, and all departments and agencies who work together. This is a significant, substantial change, and it will take time to operationalize it. We are saying that for the first two budgetary and estimates cycles, the deadline would be April 30. Having an April 30 deadline for the main estimates for the first two years would allow our departments to make the necessary adjustments and give them time to ensure that substantial portions of the budget are reflected in the main estimates, strengthening the importance of the main estimates and their relevance.

This approach will ensure that the main estimates, starting this coming year, will be a more useful and relevant document, because they will reflect this year's budget priorities and prevent the situation we now have, in which the main estimates are effectively debated for several weeks and rendered basically irrelevant when the actual budget is tabled.

In year three, a permanent change would happen, allowing the tabling of main estimates on March 31. I've discussed this with the former parliamentary budget officer, Kevin Page, who believes this is a reasonable approach. He said the following, which he agreed I could share with you:

While I believe Parliament and Canadians should see main estimates before the start of the fiscal year, I support your recommendation that this adjustment may take two years to implement.

He is somebody who has worked as a parliamentary budget officer and also within the public service broadly. He understands that these types of significant changes do take time to put into operation to ensure that we're getting them right.

I understand the concerns I've heard about any potential reduction in the time available for parliamentary study. I assure you that reducing parliamentarians' ability to study the main estimates is something we want to avoid. It's not our intention; it's quite the opposite. We want parliamentarians to be able to study documents that will be substantially more meaningful than those they are provided with today. This is an approach that will provide the best balance between parliamentary study of the mains and making the mains a vastly more useful and pertinent document.

A third concern was raised about committee of the whole. Tabling the main estimates by April 30 would require some form of consequential amendment. Under the current rules, it's up to the opposition to identify the departments whose main estimates will be referred to the committee of the whole. The current Standing Orders give the leader of the opposition until May 1 to identify these departments. That deadline would obviously need to be moved until after that in order to give the opposition time to make an informed decision. We recognize the need to change that deadline to give the opposition time to make that determination. Moving this deadline would have the effect of limiting the government's flexibility in scheduling these appearances before the committee of the whole.

As a fourth concern, the last time I appeared here there were also some concerns that our proposal would somehow reduce the number of supply dates. I want to be crystal clear that is not the case. Adjusting the tabling of the main estimates would have no impact on the number of allotted opposition days or other aspects of the supply cycle, including planned supplementary estimates for the supply periods ending December 20 and March 26. Committees would be able to examine estimates documents and call on officials and ministers throughout the supply cycle.

A fifth concern was around the current Standing Orders requiring committees to report back on the mains by May 31. There was a concern that a month might not be enough time to fully scrutinize the mains. We are open to your ideas on how to address this. This could be a discussion with the House leaders to allow some reasonable extension of this. That's a discussion we ought to have between House leaders, but we recognize the need to address this and the potential to move that forward.

Finally, some members of the committee have expressed the view that the budget date should be fixed. Mr. Chair, as you know, there's currently no requirement to table a budget. It's not part of the Standing Orders, and the timing of the budget falls within the jurisdiction of the ministry or Minister of Finance. The normal practice is to table budgets between mid-February and mid-March. Extreme situations do arise where governments need to avail themselves of more flexible approaches.

I want to say to the committee that we are open to hearing this committee's advice on the subject. We're open to suggestions from the committee, and we will take those suggestions seriously.

Mr. Chair, a lot of what we're doing now is based on the good work of this committee going back to 2012. This is important work in strengthening the accountability of government to Parliament and strengthening the role of Parliament.

We're committed to doing a better job of aligning the budget and estimates processes. I look forward to continuing our active engagement with this committee, but also across Parliament, on this and many other issues. I would be pleased now to answer any questions you or committee members may have. Also, our officials would be pleased to answer any questions.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much, Minister.

Monsieur Drouin, please, for seven minutes.

[Francis Drouin, Liberal, Glengarry—Prescott—Russell, ON]

Thank you, Minister, and thank you everyone for being here to discuss this important topic.

Minister, I'm glad you put it on the record that you have been a member of Parliament for almost two-thirds of my life—

[Scott Brison, Liberal, Kings—Hants, NS]

That's just mean.