Government Operations Committee on Dec. 11th, 2025

[The Chair, Conservative, Kelly McCauley]

Good afternoon, everyone. I call this meeting to order.

Welcome to meeting number 22 of the House of Commons Standing Committee on Government Operations and Estimates, the Christmas version.

We welcome back, our colleagues and friends from Canada Post, to continue our Canada Post study.

Mr. Ettinger, I understand you have an opening statement. The floor is yours.

Again, welcome back. It's nice to have you with us.

[Doug Ettinger, President and Chief Executive Officer, Canada Post Corporation]

Thank you, Mr. Chair, and good afternoon to the committee members as well.

Thank you for having us.

I'm joined today by my colleagues Alexandre Brisson, our chief operating officer, and Rindala El-Hage, our chief financial officer. We're very pleased to be here. We value this important conversation and discussion.

I'll start with an update on our negotiations. As we announced last month, Canada Post and the Canadian Union of Postal Workers have signed agreements in principle. We are now working hard with the union to finalize the wording of these agreements. Both parties have agreed not to disclose details of what they contain until they're finalized. These agreements come after more than two challenging years at the bargaining table. I know how difficult this period has been on those who rely on Canada Post. Our customers both need and deserve reliable service from us. I look forward to rebuilding our business and restoring their trust as soon as possible.

That brings us to why we are here today. Last month we submitted our proposed transformation plan to Minister Lightbound. It is in line with his direction, which was based on the recommendations from the industrial inquiry commission.

We are proposing a balanced plan to modernize Canada Post.

It focuses on serving the modern postal needs of Canadians while returning us to financial self-sustainability. It also includes revenue growth, largely by growing our e-commerce parcel business. As our plan is still under review by the minister, I can't get into details today, but I'll briefly run through some of the key measures it contains, beginning with community mailboxes.

More than three-quarters of Canadian households already receive their mail through some form of centralized delivery. By converting more households to community mailboxes, we can provide a consistent level of service to Canadians while also achieving significant cost savings.

We offer accommodation measures to customers who need them.

Our delivery accommodation program ensures that people with functional limitations can access their deliveries. It is easy to request. We'll make sure that customers know it's there for them if they need it.

Next, on modernizing our post office network, let me start by saying that we will protect postal services in rural, remote and indigenous communities, period. The minister was clear that this was essential. We share this priority 100%. Modernizing our network will be about matching it to better serve how Canadians use the post office today. To ensure that we get it right, our approach will be highly localized.

This will not be a one-size-fits-all solution.

We know that every community is a little different. We won't force a cookie-cutter approach across the board.

The next measure is updating our service standards for letter mail. This will give us a couple more days to deliver letters across the country. That means we can move mail across Canada using more ground transportation, which amounts to major savings for us and reductions in greenhouse gas emissions.

To be clear, this does not affect parcels or direct mail. It's for letter mail only. We will, of course, continue to offer faster delivery options for urgent letter mail items.

Together, these measures will better align our operations with the current postal needs of the country.

We will proceed thoughtfully.

We will work closely with municipalities and other local stakeholders. We'll also work, of course, with our unions on the changes that affect our people, but we need to be a leaner workforce going forward. We'll be able to reduce our size primarily through attrition, given that we have an aging workforce, but we will still have lots of good jobs with good benefits to offer Canadians.

Our plan is also about generating revenue growth. We'll grow our core business, especially parcels, and expand into new revenue streams. We'll look at a new letter mail pricing strategy. We'll invest in continuous improvement of our operations. We'll fully leverage the investments we've already made to increase our service capacity and enhance our IT capabilities, which is the absolute backbone behind e-commerce and delivery logistics.

In closing, we know that our financial situation is unacceptable and cannot continue, but there are practical measures that we can take to fix it. Our plan will return our organization to its mandate to serve all Canadians in a financially self-sustaining manner, and it ensures that Canada Post will remain a vital infrastructure.

We look forward to sharing the details of the plan as soon as we are able to. In the meantime, I welcome today's discussion and look forward to your questions.

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

We'll start the six-minute round with Mrs. Block.

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

Thank you, Chair.

Welcome, Mr. Ettinger and colleagues. We are also looking forward to this conversation with you. It's taken a while for us to be able to get you here and to be able to complete yet another study on Canada Post.

At your appearance here at committee during our last study, you advised committee members that the government had not approved your strategic plan for a number of years. I think it was five years at the time, between 2019 and 2024. As you noted, this past September the minister made a number of announcements, including a deadline for Canada Post to submit a plan to the department. You referenced that.

Has the minister given you any indication, given that he's had the plan for over a month now, of the deadline for when you can expect his decision on your plan?

[Doug Ettinger]

We submitted the transformation plan, which I guess people refer to as the 45-day plan, back on November 7. It was based on our own planning as well as shaping it around the announcement he made on September 25, which we welcomed. We've been talking about these things publicly for a couple of years, at our annual public meetings or in media releases or in our annual reports.

We appreciate that the government is looking at those options to enable us to transform this company going forward. We're very confident that the basic thrust of that plan is to create a Canada Post that is better than it is today and more focused on where Canadians' needs are today. That has changed a lot. There aren't any big surprises in the plan from what we've been talking about openly and publicly—CMBs, postal refreshment and modernization, pricing strategy and service charter changes around letter mail only.

That is the main thing, but we have not heard back from the minister's office at this point. They are reviewing it. I have not heard any timelines at this point.

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

Thank you for that.

Is there anything in the plan that you submitted that was already in past strategic plans that you'd submitted to the government and that weren't approved?

[Doug Ettinger]

Yes. To that same point that I mentioned, a lot of the solutions are similar to what we've been looking at for some time. That's why I said there aren't really any surprises in this. They're the same things.

As I said earlier, there are practical things we can do to get our house in order to make us more competitive. If you look at letter mail, of course we all know that it's declining at a rapid rate, and our whole system was built around letter mail. Parcels are also very challenging. We're up against the very best companies in the world, who are very agile. The solutions will not surprise you, but there's more detail in there than we've maybe put out there in the past—

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

Okay. Thank you very much. I have really limited time, and I have some other questions that I want to get to.

According to its Q3 report, at the end of this month Canada Post will run out of the $1-billion loan the government provided to you. Last week officials told us they have been in discussions with Canada Post about approving an additional loan. How much funding is being discussed for this additional loan?

[Doug Ettinger]

We're in discussions with the government. We have been frequently over the last year or two.

Our CFO, Rindala, has been heavily involved in those discussions. I'll pass that question over to her to respond.

[Rindala El-Hage, Chief Financial Officer, Canada Post Corporation]

Thank you, Doug.

Thank you for the question. It is important. You're absolutely correct that we ran out of the cash injection this month. We've exhausted that. That was very important in enabling us to maintain operations.

The discussions we're having with the minister's office at this point in time are not yet finalized. We're working through the details to ensure that we have sufficient funding to maintain operations and service to Canadians until the transformation plan is approved and endorsed in due course, which will alleviate, obviously, additional funding around investing in the future of Canada Post.

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

Has the government indicated when a decision might be made on whether they will approve an additional loan?

[Rindala El-Hage]

We are in constant discussion with the minister's office on that. We don't have a timeline yet of when that decision will happen.

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

Thank you.

Given that there was no funding in the supplementary estimates, has the government told you that you will have to wait for the next cycle of estimates in order to receive approved funding?

[Rindala El-Hage]

Those discussions are happening at this point in time. We have at our disposal credit facilities that we were able to secure after the approval of the corporate plan last year. We've reported in our annual report, as well as in our Q3 financial report, that we have close to $595 million of credit facilities that we are hoping we can utilize until that decision is made and the timing is better known.

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

Are you still expected to repay the $1-billion loan you've been given, given that you are seeking additional funding?

[Rindala El-Hage]

At this point in time, the MOU is very clear that the cash injection is repayable. As well, according to the MOU, there is a deadline of December 2026 for when that will be revisited by the Minister of Finance. At that point in time, a determination will be made on whether new terms will be discussed and negotiated.

[The Chair, Conservative, Kelly McCauley]

Thank you.

We'll go to Ms. Sudds, please.

[Jenna Sudds, Liberal, Kanata, ON]

Thank you very much, Chair.

Thank you, all, for being here with us today.

As we heard as we undertook this study, and as Canadians know, Canada Post is certainly in deep financial difficulty. Without real reform, the future of this public service and the jobs that depend on it will be at risk. Postal workers keep our communities connected in many ways, day in and day out. Keeping the corporation strong and sustainable is certainly front and centre as we think about ensuring that they can continue to serve Canadians.

With that in mind, and Canada Post being a Crown corporation with a mandate to serve all Canadians, why do you believe this mandate is still relevant in today's digital economy?

[Doug Ettinger]

Thank you. It is a very good question.

In terms of the e-commerce business around parcels, which is where we're focused for growth, that market will double over the next 10 years. It's a very high-growth market. It is a digital market. We've recently updated our IT infrastructure. When you order something online, to the point that you receive it, it's all digital. We feel very good about our ability to reshape the company, based on the strategies we have—with the ones we've talked about already today—but also with the digital capabilities we now have, which will enable us to make the customer experience even better for Canadians.

You know, we're always looking for ways to make it easier to navigate our websites and our programs. We're very pleased with how that has gone. There's a lot of digital stuff going on behind the scenes that powers this whole company going forward. We're very pleased with where we are on that.

[Jenna Sudds, Liberal, Kanata, ON]

That's great to hear.

In that same vein, we often talk about or think about Canada Post as being vital national infrastructure. How does that context shape your future direction or your transformation plan?

[Doug Ettinger]

Well, we have the foremost network in Canada. We go everywhere, literally every day. Our infrastructure is an advantage for us. We want to be more efficient in that infrastructure, but our commitment is to deliver for all Canadians.

As we go forward, there will be changes along the lines of what we talked about. They will enable us to get our financial situation into better shape, but as we go forward, we fully intend to invest in the kinds of things that will make us even better with our customers. This is all about achieving better service, not less.

I know there have been some comments about cuts, and it's not about cuts, although the company will change; it's about creating a better experience for Canadians. We want to connect Canadians. Especially at this time in our economy and what's going on south of us, what could be better than to have a Canadian-owned company delivering to every community in Canada? A lot of the couriers don't go to all those communities. We're proud of the fact that we do, and we look forward to building on that as we go forward.

[Jenna Sudds, Liberal, Kanata, ON]

I'd like to build on that last point, because I recall conversations in different settings around the importance of Canada Post in sometimes being the lifeline for supplies and life-saving medicine, particularly for rural, remote and indigenous communities.

How do you foresee being able not only to maintain but hopefully even to enhance those services, given the financial difficulties of late?

[Doug Ettinger]

We welcomed those changes in the announcement on September 25. Again, we've been talking about a lot of those changes for some time.

With those changes, along with other recent investments we've made, we feel very good that we now have all the tools that we need. The Albert Jackson processing centre in Scarborough is a leading-edge facility, and our recent update of our ERP system is very strong for us. Again, this whole business is digital behind the scenes.

We'll be able to be more efficient with CMBs and with some of the post office modernization that we're going to do. The investments that we've made and the changes that have been made to these legacy policies and regulations will enable us to compete a lot better.

The parcel business is hyper-competitive, but all of this will contribute towards being a better provider for Canadian businesses, particularly small businesses. We are overdeveloped with small businesses across Canada, and we're happy about it. The labour uncertainty over the last year has been difficult for small businesses. They're half of the GDP in Canada. For every dollar invested with small businesses locally versus international companies, 66 cents stays in Canada, so we want to do much more to support small businesses and work with them and give them the tools and resources they need to grow and thrive.

[The Chair, Conservative, Kelly McCauley]

Thanks.

Madame Gaudreau is next.

[Marie-Hélène Gaudreau, Bloc, Laurentides—Labelle, QC]

Thank you, Mr. Chair.

Mr. Ettinger, thank you for being here.

I have a very simple question: How many Quebec post offices will close as part of your reforms?