Thank you. Good morning, everyone.
On behalf of the Canadian Union of Postal Workers, I want to thank you all for the opportunity to appear and to raise the union's concern about the trans-Pacific partnership agreement.
CUPW represents about 50,000 public and private sector workers in large and small communities from coast to coast to coast. I think it's no surprise to you that a majority of our members work for Canada Post. We believe the TPP could negatively impact Canada Post and, by extension, our members.
I'm accompanied here today by Louis Century from the legal firm Goldblatt Partners. Louis helped draft the legal opinion on the TPP and postal services that we submitted to you earlier this year. My comments will be based on this opinion.
I'd like to begin by pointing out that Canada did not take any reservations for postal services. It did not take an annex I reservation or a stronger annex II reservation. Other countries did. For example, Japan and Singapore both took annex II reservations. Notably, Canada's approach to the TPP contrasts with its approach to CETA for which it at least took an annex I reservation.
Unfortunately, Canada's failure to take reservations exposes our public post office to the restrictive rules of the TPP and may give rise to state-to-state and investor-state challenges.
In terms of broad strokes, as you may know, NAFTA and the GATS already impose broad constraints on the authority of Canadian governments at all levels to exercise their legislative and regulatory prerogatives. Unfortunately, the TPP expands the scopes of these constraints in several areas.
There are consequences to the new TPP rules. For example, the TPP includes an annex on express delivery services, which could impose far more explicit constraints on government authority concerning postal services and the activities of Canada Post. I would like to point out that the express delivery annex is a unique feature for a trade agreement, and that it was inserted in response to lobbying from the U.S. private courier industry.
This industry put substantial effort into influencing TPP negotiations, and it was very successful.
The TPP's express delivery annex reflects industry's objective, which is to reduce or eliminate competition from public sector service providers such as Canada Post, particularly in the express delivery market.
First of all, new TPP rules would not only limit the ability of Canada Post to expand current services such as Xpresspost and those provided by its subsidiary Purolator but would also threaten Canada Post's ability to maintain its current business model of integrated express delivery and letter mail services.
Second, the annex prohibits parties to the agreement from, one, requiring an express delivery service of another party to supply universal postal service as a condition of authorization or licensing, and two, setting fees or other charges on an express delivery service for the purpose of funding the supply of another delivery service.
The first prohibition is pretty clear. We believe the second prohibition means that Canada could not require private courier companies to contribute to a compensation fund in order to help fund universal delivery.
Third, the TPP rules concerning state-owned enterprises, or SOEs, and monopolies expand on similar constraints in NAFTA and the GATS and make these constraints more direct. In addition, the TPP expands the scope for investor-state disputes and raises the spectre of another UPS versus Canada case, which is strengthened by the TPP provisions on state-owned enterprise monopolies and the express delivery annex.
That said, chapter 10, “Cross-Border Trade in Services”, which includes the express delivery annex, is expressly exempt from investor state but is still subject to state-to-state challenges.
There's no direct threat, but in the minutes I have remaining, I would like to summarize by quoting from the legal opinion we submitted to you: “While TPP rules present no direct threat to the letter mail mandate of Canada Post, they impose significant constraints on its ability to maintain a business model that depends upon the integration of express package, courier and letter mail services.” The opinion also concludes that there are “no benefits to be gained by Canada in respect to commitments pertaining to postal and courier services.” It raises concerns that TPP rules could limit Canada Post options for responding to new marketplace opportunities. We don't think it would make sense to adopt provisions that could limit opportunities at the same time as this government is conducting a review of Canada Post in which it is looking at new opportunities.
The recommendations from CUPW are simple. CUPW believes the TPP needs to be either radically reformed in many areas or rejected. On postal matters, the union recommends that, first, the federal government eliminate investor-state dispute settlement provisions, and second, it take an annex II reservation for postal services and a reservation from chapter 17 under annex IV.
That concludes our presentation. I'll remain open to questions.