Evidence of meeting #22 for Government Operations and Estimates in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was post.
A recording is available from Parliament.
General Manager, Financial Controller, Canada Post Corporation
Do we provide them to whom?
Conservative
Kelly McCauley Conservative Edmonton West, AB
I mean forward guidance to either the government or the public or parliamentarians.
General Manager, Financial Controller, Canada Post Corporation
No, we do not provide that information to the public. Some of that is included in the corporate plan that we disclose. We've submitted it to our shareholder and we're working with our shareholder, but it is not something that we would provide publicly at this point in time.
I believe that once we have an approved corporate plan, it will be published.
Conservative
Kelly McCauley Conservative Edmonton West, AB
Right, but we're not getting the corporate plan approved.
Do you have a forecast for this year that you can share with us?
General Manager, Financial Controller, Canada Post Corporation
What I can tell you for this year is we have seen the Q1 losses. What we are expecting for the remainder of the year is a very consistent story.
As we get out of the pandemic, we are really interested to see how consumers' behaviour changes and where we're going to land. There are also macroeconomic challenges, such as inflation and the unfortunate war happening between Russia and Ukraine. They also have an impact on the economy overall. We also want to see—
Conservative
Kelly McCauley Conservative Edmonton West, AB
The inflation was before the war, so I don't know if that's a valid excuse.
Can you walk me through this? Transactional mail, I understand from doing the Canada Post study five or six years ago, has a very high profit margin. I think it was 69%, and then, of course, the parcel profit level margin was very low.
What are the forecasts of volume for the transactional mail for this year, and what are they compared to parcels? Are we seeing, now that we're coming out of COVID, that one is picking up more than the other, or is it still continuing the trajectory of the last several years?
I have a follow-up question to that. “Canada Post in the Digital Age”, the report that was done by the independent panel in 2016, I think, through Ernst and Young, forecast losses of a quarter of a billion dollars a year by 2026.
Can you respond to that and how we are looking right now? That's four years out. Are we on track for that, or are we on track to getting to net zero for losses?
General Manager, Financial Controller, Canada Post Corporation
That's a great question.
Let me start by looking at parcel. As we disclosed in our Q1 of 2022, we are seeing softness in our parcel volume, really driven by the high base that we had in 2021, because things were still under lockdown. We are keenly watching how this is going to unfold in the next few months, as economies open up. Hopefully, we'll have the pandemic out of the way, and we'll see how consumers are going to adapt to that.
We realize that right now, after the pandemic, Canadians are looking for life experiences, travel and to go to restaurants. That could be a reason for some of the softness we're seeing in the parcel volume but, again, it remains to be seen.
What we know, in terms of the market as a whole, is that the market share for online sales is going to increase, and we expect it to top $100 billion in 2025.
In terms of transactional—
Conservative
Kelly McCauley Conservative Edmonton West, AB
I'm sorry. Let me interrupt quickly, because I'm down to the last minute. I'll forget the other questions.
What is the parcel delivery market share? Is it increasing compared to your competitors, or is Canada Post losing market share?
General Manager, Financial Controller, Canada Post Corporation
What I can say right now.... I can't compare us to our competitors, but I know that—
Conservative
Kelly McCauley Conservative Edmonton West, AB
Why not? That's a standard business metric, comparing market share.
General Manager, Financial Controller, Canada Post Corporation
What we know is that we are facing significant and increasing competition. We know with the—
Conservative
Kelly McCauley Conservative Edmonton West, AB
I'm sorry. If I can interrupt you, do you have those numbers that you can provide to the committee, or do you not track market share?
General Manager, Financial Controller, Canada Post Corporation
I can come back with that. I'm sure we have some of that information.
We are aware that our market share is decreasing. I can tell you that much. In terms of specific numbers, I'd be happy to get back to you, but we are realizing that we have an increasingly competitive market with many fierce competitors from the gig economy coming up.
We have to do better and improve our service and our capacity to be able to compete and regain that market share, as well as become a leader in the online parcel business.
Conservative
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Thank you, Mr. Chair, and thank you to our witnesses for being here today.
My question is around the MyMoney Loan delivered with TD Bank. Can you please give us an update on the Canada Post initiative in these community hubs called MyMoney Loan delivered with TD Bank?
General Manager, Financial Controller, Canada Post Corporation
As I said before, MyMoney Loan is a strategic partnership with TD. We launched a pilot in 2021. So far, there have been successful market tests in 2021 and in Q1 of 2022.
We are planning a national launch of the MyMoney Loan products over the next several months, with a full launch by the fall of 2022. We realize it is an important service that has been very well accepted by the underserved communities that need such products. Again, those are smaller loans that really help Canadians and fulfill that need in the market. Canadians are expecting us to be there for them. We're very encouraged by the preliminary results we're seeing and looking forward to a full launch later this year.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
How is the new community hub post office model helping local businesses and indigenous communities?
General Manager, Financial Controller, Canada Post Corporation
The new community hub in High Prairie, Alberta and the one we recently launched in Membertou, Nova Scotia are increasing the services we are providing to those communities, giving access and helping local small businesses connect with customers.
Again, we work with the communities and unions to determine the needs of the communities. For example, in Membertou, meeting rooms and printing facilities are for sale. These are ongoing efforts to meet the changing needs. When we look into a community, we try to adapt to the needs of that particular community.
We also improved services in five indigenous communities in 2021. We're very proud of that. We know we have a lot more work to do, but we are slowly getting there. The community hub is one way to reach those communities, provide that service, and be there for those underserved communities. They deserve as much service as some of the bigger centres.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Canada Post has set a target of purchasing 5% of goods and services from indigenous-owned suppliers or subcontractors by the end of 2025.
Can you give us an idea of how that's coming along?
General Manager, Financial Controller, Canada Post Corporation
I believe that, for the end of 2025—I want to quote you the right number—we absolutely have a target of 5% and that, at the end of 2021, we were at 2.1%, I want to say. I want to make sure I'm telling you the right information, but it is our constant work to ensure we're meeting those needs. We are very confident we will meet that procurement strategy for indigenous procurements of 5%. We are very confident we'll meet it.
Liberal
General Manager, Financial Controller, Canada Post Corporation
By working with our indigenous-owned suppliers and subcontractors. That target is by the end of 2025. We will continue to work with those indigenous-owned suppliers and subcontractors to come up with opportunities for us to go from the 2.1% we reported at the end of 2021 to our 5% target by 2025.
Liberal
Parm Bains Liberal Steveston—Richmond East, BC
Thank you.
In the last 30 seconds, is the hub model you talked about meant only for smaller communities? Can that be introduced in other areas, as well—urban areas?
General Manager, Financial Controller, Canada Post Corporation
At this point, we are really focusing on underserved communities and increasing access points to small and medium-sized businesses. At this point, we are not looking into larger communities. It's part of our plan to increase service to underserved Canadians in those smaller communities, as well as in indigenous communities.
