Evidence of meeting #22 for Government Operations and Estimates in the 45th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was plan.
A recording is available from Parliament.
President and Chief Executive Officer, Canada Post Corporation
I've lost my translation again, but I understood your question.
I'll say that the plan on post offices is to be very sensitive and very focused on the local issues and communities. All communities have different needs and different sensitivities. Our plan is to work closely with the local towns and municipalities. We're going to protect, very clearly, rural, remote, northern and indigenous communities.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
You say you're going to protect communities. The committee met with the mayor of Chute‑Saint‑Philippe. According to him, mayors are very worried about their local post office locations. The main post office can be up to a half-hour away.
Here's my question: Are you going to make tough choices? Yes, some locations may be fairly close, but getting to others could pose a transportation challenge. What's going to happen?
President and Chief Executive Officer, Canada Post Corporation
We can't get into what's in the plan right now, because it hasn't been finalized or approved. Again, we'll be very careful to share all the criteria, once we're able to, in terms of how we're going to go about that.
Our first approach will be in areas where we think we're overbuilt or over-serving Canadians. That is mostly in urban areas, where we have a dealer office nearby and some obvious duplication. That will be our first step. We will look at those areas where they have other options nearby. We won't get to the rural areas until after that. That will be our first phase.
Again, with the rural areas, we're going to be very sensitive.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
On September 25, we found out that the corporation would undergo reforms. Then people were left waiting. You submitted your plan a month ago, and you're waiting to hear from the minister. We can keep inviting you back, but you could tell us that everything will be settled on January 15. When will we get those answers?
President and Chief Executive Officer, Canada Post Corporation
We have not been given a date for when we'll get some feedback on the plan. We hope to get that feedback right away, but it's up to the minister and his team. Again, we'll be very thoughtful about this. We'll share all the criteria once we get to that point.
I grew up in rural Canada, and I've lived in rural Canada. I know how important the post office is in these smaller towns and villages. We think we can offer better service, actually. It'll be different in some ways, but we think we can offer better service in many locations. We're going to take a thoughtful approach to that. We'll be sharing all of that once we're able to.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
You talked about reducing your workforce through attrition, but what about layoffs? You don't have to be an economist to understand how this works.
President and Chief Executive Officer, Canada Post Corporation
We've taken some measures at the management level to cut back on management over the last couple of years, reducing both the size and cost of management. I think in the last year and a half, we've reduced management by 11%. I've reduced the executive team by 20%, but we're going to need to be a leaner organization. Canadians are using us very differently from the way they did 40 years ago. We need to adapt to that. We think we can, and we can be more responsive to their needs.
We think the positive thing here is that we have 16,000 people eligible to retire in the next five years, and then another 14,000 in the five years after that. We think that will provide a good way for people to leave the organization, if they so choose. We're going to try to do everything we can to have minimum impact on our employees and to treat them with respect through the process.
Bloc
Marie-Hélène Gaudreau Bloc Laurentides—Labelle, QC
Did you listen to the evidence given by elected official and mayor of Chute‑Saint‑Philippe, Normand Saint‑Amour? He talked about the collateral obligations, as far as community mailboxes and snow clearing are concerned. His blue-collar workers are the ones who will have to take care of it.
You said that 16,000 people would be retiring and that you wanted to ensure mail accessibility. You said you had a good relationship with the people at the Union des municipalités du Québec, but that's not what they say. They're afraid that you'll take a blanket approach, and they really want you to consult them.
What do you say to them?
President and Chief Executive Officer, Canada Post Corporation
They will be consulted. We haven't started that process yet, because we're still waiting for the feedback from the minister's office on the plan. However, the minute we do, we will start our consultations. Whether it's with regard to community mailboxes or post offices, we know that both of those are highly, highly sensitive for people. We're not going to run roughshod over the country. We're going to do it thoughtfully and with some clear criteria that people will be able to look at and understand, and the municipalities, in advance, will understand how we're approaching this.
Conservative
The Chair Conservative Kelly McCauley
Thank you.
We'll go to Mrs. Jansen, but before we start, I'll just mention that we may have to reboot our translation console. It could be any moment, so I'll just interrupt. We'll have to suspend for two or three minutes to do that. This is just a heads-up, everyone.
Please go ahead.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
Thank you, Chair.
Thank you to the witnesses.
Before we get into dollars and deficits, I want to talk about the people who are really impacted by the bumps in the road with regard to Canada Post. In my riding, small businesses obviously rely on those cheques arriving by mail. When those don't show up, it's not just an inconvenience; it's a case of how you are going to pay payroll and suppliers and keep the doors open for the next week.
I've heard a lot from charities, which are in the same boat. Their donations come through the mail. Often, it is $20 from a senior who gives faithfully every year. When deliveries stop, those gifts don't arrive, and the programs that people count on get cut. Even that simple act of sending a thank you note or a Christmas letter becomes very difficult. We know that when Canada Post falters, those groups lose income, lose supporters and lose connection. The cost is enormous, and Canadians notice it immediately.
My questions are surrounding the idea of how we got here. It wasn't sudden. We had a lot of warnings, including the Kaplan report, which made it very clear that Canada Post couldn't remain self-sustaining without real reforms, yet the Liberals went for five years without approving a strategic plan. There were five years of drift, basically, while losses were piling up. I think we're at $5.5 billion now.
Maybe you can't answer this question, but why do you think the government failed to approve a strategic plan since 2019?
President and Chief Executive Officer, Canada Post Corporation
I think that's a question better put to the government, but I'll say that the answer is that we couldn't get aligned, and it's the same answer I gave a year and a half ago. However, I'm pleased that we have alignment at this stage, at least in a strategic sense. Again, we welcome the changes. Those are, in my opinion, exactly what the doctor ordered for us to transform this company, get our house in order and get our finances in order. I wish it had happened 10 years ago. It didn't, but we're going to move forward. We're delighted with those changes, and we hope they are approved.
Also, it is not only that. With the investments that we've made over the years with Albert Jackson and with the ERP program, we can come out of this and rebuild even better than we would have otherwise.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
My next question is this: What impact did that five-year delay have on your ability to modernize, compete and prevent exactly this crisis that we're in right now?
President and Chief Executive Officer, Canada Post Corporation
Certainly, we had to be more careful with our spending. There's no question. In the last few years, we've put in strict budget controls, discretionary spending cuts and unfortunately, as I mentioned earlier, some restructuring of management and so on to get our costs in line with what we can afford. We're in a very competitive category with, again, as I said, some of the best operations in the world, which are very agile. Some of them are gig-based, so it's a different model from ours. To compete, we need to be able to invest in our business, so that we can stay current with them. However, I feel as though, with those changes that were announced and those investments, we have the tools we need now to go forward and transform, and we're ready to do that.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
Had you been able to do this five years ago, what could we have avoided?
President and Chief Executive Officer, Canada Post Corporation
That's hard to predict, but yes, there were certainly some losses that occurred over the years—there's no doubt about it. I'm just very pleased that we're able to look forward and solve the problem. We're ready to solve that problem. We know how to solve that problem. There will be things that we all disagree on—components and so on. However, these are things we need to get at now, and we're ready to do that.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
In the plan that you submitted to the minister, does Canada Post actually become financially sustainable, and on what timetable?
President and Chief Executive Officer, Canada Post Corporation
Yes. It's an ambitious plan, and we've shaped it around the minister's announcement on September 25, as well as our knowledge of the industry and so on. It gets us to break even by 2030, five years from now, and it will be—
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
Have you been paying anything back, or not yet?
President and Chief Executive Officer, Canada Post Corporation
We haven't yet, but these are repayable loans.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
With your 2030 timeline, will anything have been paid back then?
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
I saw some heads shaking, so I'm assuming it's a no.
President and Chief Executive Officer, Canada Post Corporation
We're going to need to invest in the company over the next few years in order to do the things that we need to do to make the changes that are going to reduce our costs to give us a more competitive position in the marketplace vis-à-vis our competitors. There is going to have to be some investment over time.
The minister made it clear that these bailouts or injections have to stop. By the way, I agree 100% that they need to stop as soon as possible, but we—