Government Operations Committee on April 15th, 2024

[The Chair, Conservative, Kelly McCauley]

I should have cut you off halfway through.

[Some hon. members]

Oh, oh!

[The Chair, Conservative, Kelly McCauley]

No, I understand what you're saying. I've allowed a wide latitude on other points of order, I agree, but this one was certainly not a point of order. However, I'm glad you're agreeing with me—

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

It's relevant to this committee, though.

[The Chair, Conservative, Kelly McCauley]

—and Mr. Jowhari that perhaps we do need to bring Mr. Jeglic and PSPC on that report.

If everyone is fine, we'll leave it at that.

We'll now get to our witnesses.

Ms. Simpson, we'll start with you for five minutes for your opening statement.

[Jan Simpson, National President, Canadian Union of Postal Workers]

Good morning, committee members.

First, I would like to acknowledge the Anishinabe Algonquin nation on whose traditional and unceded territory we are gathered today.

On behalf of the more than 55,000 members of the Canadian Union of Postal Workers, I want to thank the committee for the invitation and for the opportunity to share CUPW’s vision and values with you. We represent workers across every region of our country, including many rural and remote areas.

Today, I sit before you to shed light on a crucial yet often overlooked aspect of Canada’s public infrastructure: the postal service and its integral role in our rural and remote communities.

While we often associate the postal service with delivering letters, its significance extends far beyond delivery. In rural and remote areas where traditional infrastructure might be lacking, the postal service plays an invaluable role, connecting communities, fostering equity and inclusion, and driving local economies.

First and foremost, let’s acknowledge that Canada is a vast country with diverse geography encompassing sprawling rural landscapes and isolated remote regions. In these areas, accessing the goods and services that we take for granted in urban areas can be a challenge. However, with a rural network unparalleled in scope, the postal service bridges the gap by providing reliable mail delivery, ensuring that rural residents have access to communication, goods and services no matter where they live. From medication and medical supplies to online purchases, government correspondence and groceries, the postal service ensures that people living in rural and remote communities have equitable access to the resources they need to thrive.

In an era of increasing digital communication, the rural post office service remains as relevant as ever, both economically and socially.

In recent years, we have seen parcel volumes grow faster in rural Canada than they have in urban areas.

With low population density and high delivery costs, much of rural Canada is significantly underserved by Canada Post’s private sector competitors. In fact, its competitors have turned to Canada Post for the last mile of rural delivery. Clearly, without the rural postal service, the private sector is not going to fill the gap.

The loss of postal services in rural and remote communities means the loss of key drivers of local economic development. The postal service employs more than 10,000 rural Canadians, providing them with good-paying unionized jobs that are now far too uncommon. Supporting the rural postal service means good-paying jobs that support postal workers, their families, communities and local businesses.

The rural post office is a community hub. It is not only a place where people pick up the mail. It is also a place where people gather to connect with their neighbours and hear about local news and events. The rural post office is a place to share knowledge and build community. Across so much of this country, no one knows more about their communities than postal workers.

We live in the age of the Internet, but in too much of rural and remote Canada, Internet connections remain spotty, if they exist at all. With its vast network of offices, the rural postal service has the potential to play an even bigger role in connecting communities and helping people stay informed. Post offices could be used to enhance access to the Internet where it is currently lacking.

In many communities, the post office is the only face of the federal government. The post office reinforces a sense of belonging to a wider community, to a shared sense of what it means to be Canadian. When a post office closes, communities lose perhaps their only physical link to their government.

As postal workers, we are proud to provide a public service to all citizens, but we know that rural postal service has the potential to do even more. With a presence in every community, post offices could be used to offer access to government services and banking services. We could bring back the food north program to promote reconciliation with indigenous peoples. Based on the government’s public opinion polling, we know that service expansion is a popular idea.

For all of those reasons and more, CUPW has, for many years, maintained that the moratorium protecting rural post office closures needs to be strengthened. Hundreds of post offices have been closed since the 1994 moratorium.

In conclusion, the postal service is not just a logistical operation; it’s a cornerstone of community resilience and inclusivity. Its presence in Canada’s rural and remote areas ensures that no one is left behind, regardless of where they live.

As we navigate an ever-changing landscape, let us remember the unique role of the postal service in fostering connectivity, supporting economic development and upholding the values of equity and inclusion in our society.

Thank you very much.

[The Chair, Conservative, Kelly McCauley]

Thank you, Ms. Simpson.

Mr. Jones, go ahead, please, for five minutes.

[Dwayne Jones, National President, Canadian Postmasters and Assistants Association]

Good morning.

I want to thank the committee for the opportunity to speak about a subject that is important to me individually, important to CPAA—which I'll call “the association” in my remarks—and important to all people living in rural Canada.

The association represents more than 8,500 employees at Canada Post. I can say with pride that we only represent employees working in the corporation's rural offices. Our members work in nearly 3,000 post offices. Those offices range from small operations in people's homes, to general stores and municipal buildings, to larger operations in larger towns.

Many of the post offices are in extremely remote communities, including fly-in and boat-in locations. A significant number of our members supply the premises for the post office, largely at their own cost, and receive a small leasing allowance for doing so.

CPAA was formed a little over three decades after Confederation, in 1902. At that time, rural post offices were the centre and lifeblood of rural communities. The same is true today. Many Canadians living in urban locations take postal and other delivery services for granted. In rural Canada, the options for sending and receiving necessities of life are much more limited.

At no time was this more clear than during the COVID pandemic. During those most challenging times, the ability to get food, medication and other essentials in thousands of communities was completely dependent on Canada Post's rural offices. Workers went in to CPAA post offices day after day and week after week, understanding that they were putting their health and perhaps their lives in serious jeopardy.

They were doing so because they were considered by the government, by their employer and by their communities to be performing an essential service. It may have taken a pandemic for some Canadians to understand the importance of a post office, but most people outside of big cities already knew the central place that post offices and postal services hold.

Post offices allow businesses to reach out to the world from remote areas. They allow local operations to grow. They prevent migration out of smaller communities by offering residents in rural Canada access to services and goods. Even in the age of the Internet, they allow federal, provincial and municipal governments to communicate with residents in those rural communities.

In rural Canada, Canada Post has the ability to help those communities grow. We have been spearheading initiatives to offer more services and more diverse ones. This includes using those offices as financial service hubs. Postal banking was a service that our post offices offered during much of the last century. Some banks moved in and have recently decided they are not willing to invest in those services or those communities. Canada Post has started offering them again on a small scale. We believe that so much more is possible.

A post office is also an affirmation of our commitment to one another as citizens of Canada. From Old Perlican, Newfoundland, to Bella Coola, British Columbia, and from Kugluktuk, Nunavut, to Bromont, Quebec, the Canadian flag on each post office is a sign that Canada respects and serves all, no matter where they live.

We should also remember Canada's commitment to indigenous communities. Many, if not most, are in rural and remote communities in Canada. The need to ensure access to the complete range of postal services and facilities in those communities is part of Canada's fundamental obligation. Canada Post recognizes this obligation as part of its commitment to an indigenous and northern reconciliation strategy.

I worked in CPAA post offices in Alberta before I took on my responsibilities with the association. There, and in every CPAA office that I have visited, I have seen first-hand the dedication that our members in rural Canada bring to their work. They do so because they understand the importance of what they do. They do it for their neighbours and they do it for their families, for farmers and for small business owners. Through these people and through other people, they do it for all Canadians.

For decades, the association has been resisting the efforts of Canada Post to reduce services to rural Canada. In the nineties, we worked with other organizations to help people understand what was at stake if rural Canadians were stripped of their basic services. We received a promise from the federal government that there would be a moratorium on office closures. Even with the moratorium, Canada Post has closed hundreds of offices over the past 15 years.

We are worried that we are at risk of returning to those difficult times. Our members have had their working hours cut to the barest minimum needed to get the job done or below that.

In the absence of a will to support rural Canada, we worry that post office closures and cuts in service may now be back on the table. We are sure the committee understands the importance of maintaining postal services to all Canadians. The association urges the government and each of the federal parties to ensure rural Canadians can continue to live in security and dignity and receive the levels of postal service that will allow them to continue to participate fully in Canadian society.

I am passionate about these issues, because I understand the need for rural post offices and the services they provide, as well as the importance of those services in the daily lives of hundreds of thousands of Canadians.

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Jones.

Let's start with Mrs. Block for six minutes, please.

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

Thank you, Mr. Chair.

My questions will be for either one of the witnesses to answer.

I represent a very large rural riding in Saskatchewan with many small communities that, as you both have pointed out, appreciate the post offices within their communities.

In my riding I have a community that has been forced to fundraise in order to have their post office and to provide the service level they not only desire, but need. Have you heard of any other communities or post offices that require fundraising in order to operate at the required level for a community?

[Dwayne Jones]

Some of our offices, which are known as a group office—primarily that's a single-person office in smaller communities—have a leasing allowance stipend that they receive on a monthly basis over the course of a year. A lot of times they find that leasing allowance doesn't support the full cost of operating the post office. Communities have banded together once they realize that for anything over and above, they do have an option with Canada Post to request to have that leasing allowance increased, but it's not always guaranteed. We've seen many turned down in areas that don't have other facilities they can operate in. What they end up doing is they speak with the landlord, and sometimes municipalities have banded together to try to reduce costs for those post offices to remain.

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

That's an interesting issue that you raise. I know my colleague, Mr. Bachrach, asked about what Canada Post is willing to pay when it comes to leasing an office in a smaller community.

Have any of your members who work at rural post offices raised these concerns with you about the lack of funding for the role of the post office in their communities and how this impacts their ability to support the community?

I would welcome Ms. Simpson or Ms. Tobin to also answer the question.

[Dwayne Jones]

I can speak from a CPAA perspective.

We're conducting a survey. We've had over 300 surveys that have gone out to group postmasters. To date, we don't have all the responses back, but it's appearing that about a $32,000 a month shortfall is what's coming back from these group postmasters that they're paying out-of-pocket in order to maintain that post office.

Again, this is something that we've had individual postmasters communicate through our national office to request, in accordance with our collective agreement, an increase to that amount, which we take to Canada Post. We present that on their behalf with all the expenses and revenues laid out.

As I said earlier, there's not a big uptake on it from the corporation in agreeing to that. Some are agreed to and some are denied. This is something where we're listening to the members and we're pushing when they are able to supply us with that information.

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

Have the amounts Canada Post is willing to pay to lease a space in a rural community increased over the last couple of decades?

[Dwayne Jones]

I can speak to that. I'll just give you an idea.

We have an appendix in our collective agreement and the leasing allowance for a group 1 postmaster, the rates as of April 1, 2023, to operate a post office yearly would be $1,357. That has come up since April 1, 2019, from $1,229. There's been a small adjustment yearly over, but not substantial amounts in order to offset expenses.

There are more numbers, just depending on the size of the group office.

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

What does that do to the morale of members of your unions when they know that rural post office workers are having to fundraise to support their jobs or aren't being heard when they're asking for these increases?

[Dwayne Jones]

I think the biggest thing is that they feel undervalued, for one, because they're providing.... When I said that they were dedicated and committed, they are very much so, because they're integrated in that community. They're serving family, serving friends and serving neighbours, and the level of service they bring is that they give 110%.

When they don't receive that back where even the basic operating costs are covered, it's not a slap in the face, but you feel undervalued for what you're pouring in. You're feeling like your contribution isn't being equally valued amongst colleagues in other locations.

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

Thank you very much, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Ms. Atwin, please, for six minutes.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you very much, Mr. Chair.

Hello to all the committee members today.

Thank you to our witnesses.

Those were really incredible opening statements. I had a lot of pride for Canada as you were speaking this morning. Thank you so much for that.

I'm going to begin with Mr. Jones.

Considering Canada Post's financial situation, what do you feel are the key priorities to ensuring Canada Post is financially stable and provides quality service to all Canadians regardless of where they live?

[Dwayne Jones]

One of the things I would like to mention is that for the many times when our postmasters are delivering a parcel in rural or remote Canada, the accounting of the revenue that's brought in for delivering that parcel isn't attributed to the office that's delivering that parcel. It's accounted for at the urban centre, where they were able to induct that into the mail stream.

Without the delivery on the receiving end, they would never have made the sale of that parcel or piece of mail they're sending to that recipient. I would like Canada Post to recognize the importance of looking at the end-to-end delivery when they're looking at what revenue is being brought in.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you.

Ms. Simpson, would you have anything to add to that?

[Jan Simpson]

We know that expansion of services is really important at Canada Post. As Dwayne mentioned in his opening, Canada Post offered postal banking up until the late 1960s, and we know we can do it again.

During COVID, many banks left smaller and remote areas, and people are underbanked. The payday lenders that are there now are gouging our young people, as well as those who are underbanked at this time.

Our expansion-of-services campaign is called “Delivering Community Power”. It talks about postal banking and about a community hub. They've opened one in Membertou in the Atlantic region, one in Quebec and one in the prairie region.

It talks about a community hub, where you can meet with your neighbours. We have electric vehicles there to help with the environment, as well as a senior check-in service. We can go door to door and make sure that seniors can live with dignity in their own homes as well.

Also, it's for Canada Post to green and maybe change their vehicles.

For us, expansion of services is a way that Canada Post could ensure that nobody in the remote areas is left behind.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you very much.

I have some very active members of CUPW here in the Fredericton region. I know all about this incredible program, and I very much support it. Thank you so much.

In front of me, I have the “Third Quarter Financial Report”. It mentions that:

Demand for ecommerce parcels [is continuing] to grow; rate shopping is putting pressure on price;... [expenditures] for service performance, delivery speeds and flexible delivery options—including weekend, same-day and next-day delivery—are on the rise. Merchants face pressure to compete on overall experience.

Competitors are [also] using low-cost gig-economy and contracted labour to offer cost-effective delivery solutions, while increasing their delivery speeds.

CUPW has previously stated that Canada Post's “sales software encourages offering [customers] the premium services (like Xpresspost) first, then the regular services”.

Ms. Simpson, could you explain the different levels of service for parcel deliveries and how the cost discrepancies can disproportionately affect rural and remote Canadians?

[Jan Simpson]

Canada Post offers different services.

Xpresspost, depending on what area you live in, could be a next-day or two-day delivery. They also have “Expedited” services, which are offered to small businesses. That is a service that is very similar to the Xpress service. Regular door-to-door parcel delivery might take three to four days, depending on where you are and, as well, if you are in a rural or a suburban area.

I think that for a lot of people the cost of sending a parcel might be a bit higher if they're just doing the regular service and taking day-to-day.... I think Canada Post could help if we could deliver at the door as well. We could have the costs come down, because we could bring the letter mail, your parcel and other services all in one package together. That's one way we can look it as well in helping the remote areas to do the delivery of their parcels.