Government Operations Committee on April 8th, 2024

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

To be very clear, has the minister ever, in the letter of expectation, expressed to Canada Post any concern about the closure of rural post offices—this loss of 600 post offices—and said, “As minister, I want Canada Post to do things differently to reverse this trend of losing post offices”?

You mentioned the letter of expectation, but what you read back to us from the letter of expectation was boilerplate. It was to continue to fulfill the service mandate and blah, blah, blah.

Has the minister ever expressed concern that the moratorium is not being heeded by the Crown corporation?

[Lorenzo Ieraci]

In the brief time that I have, the letter of expectation sets the expectations in terms of the board, so obviously it typically tends to have language that is fairly strategic or policy-oriented in nature.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mrs. Kusie, go ahead, please, for five minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Mr. Chair, and thank you to our witnesses for being here today.

For the previous hour, we were able to obtain the presence of executives from Canada Post. Unfortunately, we did not have the CEO of Canada Post today. We look forward to their testimony at a later date.

In this first hour, I questioned the vice-president of operations relative to a May 2023 report on the invasion of privacy of Canadians and the privacy of Canadians not being respected. In this May 2023 report, the Privacy Commissioner indicated that information from mail was being harvested from Canadians and then rented to third party organizations for the profit of Canada Post.

Canada Post, in its initial response, indicated that it did not view its engagement in these activities as being in any way contrary to the public interest. In fact, it said that “research indicates that consumers enjoy receiving [this information] by mail.”

I do not believe that Canadians appreciate having their privacy rights taken away from them.

Essentially, Canada Post refused and rejected this report and recommendation of the Privacy Commissioner. Today the vice-president of operations indicated that there were some remedial measures being taken, like evaluation of postal codes, etc.

First of all, I'd like to know this: Do you condone the privacy of Canadians being compromised in this fashion?

Second, are you aware of these mitigatory steps that the vice-president of operations of Canada Post says have been taken?

Third, do you think those steps are satisfactory to respect and protect the privacy of Canadians?

[Lorenzo Ieraci]

In terms of the issue of privacy, obviously the Privacy Commissioner has issued a report to Canada Post that highlighted concerns and recommendations. As was indicated today, Canada Post has undertaken activities and steps to be able to address the recommendations of the Privacy Commissioner.

In terms of whether or not those are satisfactory, it would be for the Privacy Commissioner to determine whether the recommendations and the steps that have been taken by Canada Post will address the concerns that were raised in that report.

[Eugene Gourevitch]

I just want to add that in the annual letter of expectation issued to Canada Post, the expectation to meet the recommendations from the Privacy Commissioner is also included.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

You're saying that you do respect the decisions made by independent officers of Parliament.

[Eugene Gourevitch]

Absolutely.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Excellent.

Another issue that we have seen this committee seized with is the issue of bait and switch in the ArriveCAN scandal, or arrive scam, as it's now commonly known.

In this process, what happens is a contractor or a vendor enters with a certain proposal using certain subcontractors—certain other partner vendors—and then when the contract is awarded, it switches out the vendors and the agreements on which the contract was awarded.

What analysis has your department done to avoid the bait and switch?

[Lorenzo Ieraci]

Do you mean in terms of work with Canada Post on issues of their contracting activities?

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I mean across government.

[Lorenzo Ieraci]

Unfortunately, I was prepared to speak about Canada Post today. While I know the department has undertaken a number of activities in the area of procurement, I don't know that I would be well positioned to be able to provide an informed response.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

In your role at the public works department, would you say that there is a culture of non-compliance with contractors and subcontractors because of the overly relaxed attitude of the department toward accepting bait and switch?

I think that falls within the realm of what we're talking about today. It's the general culture of the department relative to not only Canada Post but to your department itself.

[Lorenzo Ieraci]

With regard to my role as the assistant deputy minister for policy, planning and communications, I would say that what I've observed since being with the department since 2018 is a department that is aware that there are a number of obligations and requirements, not just in procurement but in a number of other areas. We've talked about privacy and other aspects. The department undertakes, to the best of its abilities, the work in a way that is compliant with all of those rules, directives and regulations.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you for your testimony today.

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mrs. Kusie.

Mr. Bains, please go ahead, sir.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Thank you, Mr. Chair.

Thank you to our departmental officials for joining us today.

Mr. Ieraci, considering that you're in planning and communications and that we've spoken about the annual letter that's shared with PSPC, do you think that's sufficient, considering the rapid changes in letter mail and how mail is delivered? Is the annual letter sufficient, or is there any more periodic communication happening between Canada Post and PSPC?

[Lorenzo Ieraci]

I'll give a response in two parts.

First, recognizing that Canada Post is one of the largest organizations in Canada, with nearly 70,000 employees across 5,600 locations from coast to coast to coast, we do have regular touchpoints and meetings with them on a biweekly basis, or sometimes even on a weekly basis, to discuss the numerous issues and opportunities that Canada Post is facing.

Second, to your first question, you talked about the letter of expectation. As I mentioned before, that is one of the tools that is used by ministers to be able to identify expectations of Crown corporations. That's not unique to Canada Post; it is across all Crown corporations. There are other mechanisms that are also used.

The last thing I will say, if you'll permit me, is that we noted very briefly earlier that when we look at a number of other jurisdictions, we see that they are facing challenges similar to what Canada Post is facing, whether it's in the United States, Australia, England, France or elsewhere. There is a decline in letter mail that's happening across the board, and basically all postal services around the world are facing similar challenges with decreasing letter mail, which results in decreasing revenues and an increasing number of points where they have to be able to deliver, which raises some fundamental concerns.

Many other jurisdictions have taken the route of providing financial assistance to their postal services or postal carriers. Some of the other jurisdictions are doing a few things that are a little different. For members, as part of the study, you might be interested in what the Australians are doing with their postal system.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Considering that you're aware of the recent trends in letter mail and that you're looking at other jurisdictions, what are you learning from them? Apart from understanding that they are having similar challenges, what are you learning, and what's a good model? You just mentioned Australia. What are they doing? It's comparable. It's a pretty vast region and it's hard to get to certain areas, which is similar to what we have here.

[Lorenzo Ieraci]

I'll say two things, and then I'll turn to my colleague Eugene.

When we take a look at the Australian model, as you indicated, we see a lot of comparables between Australia and Canada in terms of geography and some of the challenges and opportunities that arise. What we're finding is that it's a fairly complex issue that often brings a lot of different factors into consideration. There are things like universality, which is making sure that everybody in the country is treated the same in terms of service delivery, and that has implications in terms of cost. Also, some places simply might be a little easier to deliver to, which usually means that it's less costly.

What I would say is that as the committee looks at this subject, it will see that there's a fair amount of complexity in some of these issues that I think we're learning about.

Go ahead, Eugene.

[Eugene Gourevitch]

I will add that posts across the world were provided an exclusive privilege, a monopoly, to deliver letter mail. As letter mail continues to decline, that source of funding will be insufficient to maintain the universal service that exists today. As postal services transition from a message-based delivery system to one that's focused on goods, on logistics, on parcels, we need to ask ourselves as a government what universal service means today.

Many other countries are moving to things like alternate day delivery of letter mail, while others, as Lorenzo mentioned, have decided to subsidize their national post. Out of the roughly 192 member countries of the Universal Postal Union, which is the UN technical agency for the post, more than half today provide subsidies to their posts in one way or another to ensure that they can maintain universal service.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

I know this was mentioned earlier. I am fortunate to live in Richmond, British Columbia, a gateway city. There is a lot of access, a lot of logistics there. We have a community hub model there for parcel delivery, with the Canada Post office located inside Canadian Tire. Commonly, people are lined up and using it. It seems to be working pretty well.

Is that community hub model working?

[The Chair, Conservative, Kelly McCauley]

I'm afraid that we don't have time for a response. Maybe you can put that in writing. I think Ms. Atwin broached that point as well.

Next we have Mrs. Vignola, please, for two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Ieraci, you said in your opening remarks that Public Services and Procurement Canada, or PSPC, provided guidance and oversight.

Is any of the guidance geared towards contracting out work? In other words, do you advise Canada Post to use contractors? Does your guidance extend to that level?

[Lorenzo Ieraci]

The Crown corporation is responsible for managing its day-to-day operations, of course.

Furthermore, Canada Post is not subject to most of the Treasury Board's policies on procurement, since Crown corporations are treated differently under the law. That means Canada Post has independence when it comes to procurement, and we have no involvement at all in that aspect.