Government Operations Committee on April 8th, 2024

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

You must be reading my mind, because as I was taking notes, something occurred to me. It would be worth examining Australia's or the United Kingdom's postal system, taking into account the difference between England's and Scotland's systems. In one case, it took two weeks for a parcel to arrive, and in the case of England, it took four months. With respect to Denmark and Sweden, I received what I shipped from those countries in less than two weeks, which is great. You don't even see that in Quebec, I assure you. When I send something to my sister in Fermont, it can take more than two weeks for her to get it. That would definitely be an area worth looking into.

Does PSPC also carry out in-depth studies, in co‑operation with Canada Post?

We're told that everyone is dealing with the same thing. Okay, that's fine, but I'm getting the feeling that it's being used as an excuse not to make progress, and that's appalling. At a certain point, the problem has to be recognized and solutions have to be found. Perhaps they'll be more expensive, but from an actuarial standpoint, it would be a beneficial undertaking. I'm talking about an approach that focuses less on the accounting side and more on the actuarial side.

Does the government look at things through that lens?

[Lorenzo Ieraci]

I can tell you that we do what our resources permit. It's important to understand something: Canada Post is an organization of nearly 70,000 employees, as I said, whereas my team has fewer than 12 people. We perform our duties for all the agencies and Crown corporations that fall under our department's mandate. Canada Post is one of those organizations, but it's not the only one. We do everything within our means to identify ideas and solutions.

[The Chair, Conservative, Kelly McCauley]

Thank you.

Go ahead, Mr. Bachrach, please.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

I'd like to pick up where I left off with the loss of rural post offices and this trend that we're seeing of post offices going from Canada Post post offices to a contracted-out service to a mailbox at the side of the road.

I was talking to Carmen McPhee. She's the chief councillor of the Tahltan Band, one of the bands of the Tahltan Nation up in northern B.C. Some years ago, Canada Post contracted out the post office in Dease Lake to the Tahltan Band, which has been running it as a service to the community. It's not working out, because the amount that Canada Post is willing to pay through that contract is not enough to cover the cost of operating the post office, so the band is losing tens of thousands of dollars per year. When I talked to Chief McPhee, her desire was for Canada Post to take it back and re-establish a proper Canada Post post office in that community.

Now, based on your knowledge, when we look across Canada and see the loss of all these post offices, are we seeing any examples of contracted-out services, these retail franchises, going back to the Canada Post post office model, with a unionized postmaster and the costs covered by Canada Post? Is that something we're seeing? Is there a mechanism to return full services to communities where the contracted-out model isn't working, or is this a one-way trip to a community mailbox on the side of the road at -40° in two feet of snow and no way to buy stamps? What's your message for Chief McPhee?

[Lorenzo Ieraci]

There are two things.

First, with regard to your direct question of whether we're seeing the flow go the other way from the contracted-out model, I don't have the answer to that question. As I indicated, Canada Post, as an independent Crown corporation, manages its own operations.

I would say that in a lot of instances, there are.... Recognizing that the situation you described in Dease Lake is going to be very different from a lot of other franchise locations in other instances, there are times where Canada Post will set up a franchise location—somebody mentioned a Walmart or a Shoppers Drug Mart—at one of those retail locations. Again, we have to recognize that in some communities that will not work for obvious reasons, but in a number of others, that does tend to work. Canadians have indicated through public opinion research that whether it's a corporate location or a franchise location, they just want to be able to have access to the service—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

There's no Walmart. There's no Shoppers Drug Mart.

[Lorenzo Ieraci]

—which is why I said—

[The Chair, Conservative, Kelly McCauley]

Thanks. That is our time.

Mrs. Block is next.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

I want to revisit the Canada Post Corporation Act.

The second provision, the provision of postal services to rural regions of the country, is an integral part of Canada Post's universal service. If it's an integral part of Canada Post's universal service and it is actually identified in the act as being so, I want to go back to this conversation that we've had around the moratorium.

Earlier in this meeting, we heard from Mr. Yee, who stated that if a post office is on the list, it won't be closed. You yourself, Mr. Gourevitch, stated that the moratorium has remained unchanged, and I have to believe that what you meant was the language of the moratorium, not necessarily the fact that we continue to see closures in rural Canada.

My question to you is this: With regard to the moratorium and, as my colleague has pointed out, whether Canada Post is unable to find a retail space to host a post office or whether a postmaster passes away or leaves that post and you are unable to find a replacement, it would appear that the closing of post offices by attrition is a way for the Government of Canada to subvert the moratorium.

Are any actions being taken by your department to ensure that this gap within the moratorium is closed?

[Lorenzo Ieraci]

Again, as we indicated, we do work with Canada Post and we do flag to it every time we become aware of a situation of a rural post office or location being at risk, keeping in mind that the Crown corporation is independent and is responsible for managing its operations and that the board of directors ultimately undertakes the review and ensures compliance with all of these obligations of Canada Post management. We do flag those. However, obviously, given the numbers we mentioned today—the decrease of 600 locations over the course of 30 years—there are instances in which locations are closing, unfortunately.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

My observation would be that the Government of Canada and the Department of Public Services and Procurement, which function under the Canada Post Corporation Act and are responsible for overseeing that act, really need to take a look at the act and the fact that we've identified that the provision of these postal services in rural Canada is an integral part of a universal service.

I'm a member of Parliament in a large rural community, as I think I've stated. I have a community that is operating a Canada Post office out of a community hall, and they are fundraising in order to cover the costs of that service in their community. I think that's reprehensible when we're talking about a service that is supposed to be universally accessible. I will leave that one there.

The Minister of Public Services and Procurement is expected to provide Canada Post with guidance and oversight to ensure that the overall direction and performance of the corporation aligns with the government's policies and objectives. I know that this is normally communicated via a letter of expectation, and I think we've spoken about that as well.

Did the minister provide Canada Post with this annual letter this year?

[Lorenzo Ieraci]

Yes, the minister did.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

You've already answered that the privacy of Canadians was addressed in that letter. What other major issues were identified in the letter by the minister?

[Lorenzo Ieraci]

As I indicated, there are a number of areas that have been identified, including guidance that we received from the Privy Council Office.

[Eugene Gourevitch]

There were some announcements in budget 2023 dealing with spending reductions that are expected to be also reflected in Crown corporations, and there was language around the need to meet the service charter.

I'll add that in addition to the rural moratorium, the service charter does include expectations that 98% of Canadians will be within 15 kilometres of a post office, 88% of Canadians will be within five kilometres of a post office, and 78% of Canadians will be within two and a half kilometres of a post office. The rules are not just simply the moratorium on the closures, but there is also the need to ensure that there's community access.

As MP Bachrach mentioned, there is certainly an opportunity to look at the confines of what exists currently in the rural moratorium and examine potential changes as part of the government service charter review that needs to occur. We need to look at ways to ensure that services are protected in rural communities by looking at things as simple as—

[The Chair, Conservative, Kelly McCauley]

Thank you very much. That is our time.

Mr. Kusmierczyk, go ahead, please, sir.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Mr. Chair.

Before I begin my questions, I want to ask you something, Mr. Chair.

When the premiers appeared before the OGGO committee, we asked them to share with the committee the correspondence that they had with the committee prior to their appearance. I would like to get an update on whether that correspondence has been shared.

[The Chair, Conservative, Kelly McCauley]

Has anything come in—

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Maybe we could send a reminder for that information to be sent to the committee.

[The Chair, Conservative, Kelly McCauley]

Sure.

We'll also check with Mr. Bigelow, as I mentioned, as we have a substitute in that chair today.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

That's perfect. Great. Thank you.

Thank you very much, gentlemen, for appearing at this committee and thank you so much for the information that you're providing.

Last year, in Nanaimo, as I understand it, Canada Post unveiled its first all-electric fleet. There were 14 100% electric delivery vans that were unveiled as part of our greening government strategy to electrify 14,000 of the Canada Post fleet.

Has there been any analysis on the potential cost savings to Canada Post of transitioning from combustion engines, fossil fuel engines, to electric vehicle fleets? Do you anticipate any cost savings, as it's 14,000 vehicles?

We know that electric vehicles cost less to maintain and we know that fuel costs are less as well. Do we expect savings for Canada Post as a result of this transition to electric vehicles? I believe we've committed over $1 billion just for Canada Post for that transition, if I'm not mistaken.

Can you speak to that a little bit?

[Lorenzo Ieraci]

I know that Canada Post is exploring and doing an analysis of potentially electrifying its fleet. Again, recognizing that Canada Post has locations across Canada, in certain instances or locations, electrification of its vehicle fleet may be a bit easier and may result in cost savings there, compared to others where it might be a little more difficult or challenging from an infrastructure perspective.

I do know that this is one of things that Canada Post is looking at as part of its ongoing assessment of its ongoing cost and where there may be opportunities to reduce some of those costs, recognizing that the electrification of a fleet would obviously happen as the current fleet reaches the end of its useful life cycle, which for every vehicle would obviously be slightly different.

I don't have a specific answer in terms of cost savings, but I know that Canada Post is exploring that transition at this point in time.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

If you have that information and you're able to subsequently share it with the committee, that would be terrific. I'd love to be able to see if there's a cost analysis for the potential cost savings of going to electric vehicles.

Right now, the rollout of EVs will be taking place in urban areas where there is infrastructure—charging stations and whatnot—and communities are in close proximity.

Do you foresee challenges specific to rural delivery for going to electric vehicles?

[Lorenzo Ieraci]

Recognizing that I'm venturing into an area that I'm really not that familiar with, I'm going to be fairly cautious because this is, again, an operational question for Canada Post.

I think one of the challenges it has faced.... I'm not an EV expert, so I hope Canadians won't get upset with me if I get some of this wrong—

[The Chair, Conservative, Kelly McCauley]

Mr. Kusmierczyk will be upset with you.