Transport Committee on March 26th, 2007

[Deborah Bourque]

Our concern is basically public postal service. We would prefer that Canada Post not make the profits it has been making and not pay the millions of dollars in dividends it pays to the federal government. We would prefer that the profits and the dividends be put back into improving and expanding public postal service. That's our main concern here, the viability and quality of public postal service and Canada Post's ability to continue to offer what I would describe as a quality public service.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Therefore, you are not suggesting that it would be to the benefit of postal workers that this service be given back to Canada Post. You are simply talking about the business. You are not suggesting that this would result in increased jobs for unionized postal workers.

[Deborah Bourque]

We understand quite clearly that the viability of public postal service protects our jobs, and without a viable public postal service we don't have a lot of job security for the future. We understand the two are linked. Right now our interest is protecting the jobs that we currently have, the members that we currently represent, at the same time as we protect public postal service.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

It seems to me that your arguments do not hold water because the remailers stated that there are several jobs at risk. They have several employees doing this work. Therefore, if all of this work were transferred back to Canada Post, there would certainly be additional jobs created that you are not talking about. That is not your argument. Is that right?

[Deborah Bourque]

I'm not sure I understand the nuance.

I just want to reiterate our concern around the remailers. Part of it is around the money, but most of it is based on the undermining of the exclusive privilege. We see this as the thin edge of the wedge, if you like. If the act can be changed and the definition of “exclusive privilege” can be changed to accommodate this group of businesses, why can't it be chipped away at and undermined to meet the interests of various other groups of businesses?

So that's our primary concern around the remailers. Our interest is not in putting anyone out of business or putting people out of work. Clearly that's not our interest. Our interest is protecting the future of public postal service.

[The Chair, Conservative, Merv Tweed]

Thank you very much. Unfortunately, we have time restrictions. I would like to thank you for attending and for making your presentations today. I'm sure there will be further communications.

We're going to take about a three-minute suspension. Time is money, so I would encourage everyone to stay close to their chairs.

[The Chair, Conservative, Merv Tweed]

Welcome back, everyone.

Joining us at the table now, from Canada Post, we have Moya Greene and Mr. Gordon Feeney. I'm sure you know the process. We'll ask you to make a brief presentation and then we'll do some questions and answers around the table.

Welcome.

[Moya Greene, President and Chief Executive Officer, Canada Post Corporation]

Thank you, Mr. Chairman and honourable members of this committee.

May I say how pleased I am to have an opportunity to talk about Canada Post and the wonderful people who deliver the mail in this country. It's a great opportunity as far as I'm concerned.

Today I also have the pleasure of introducing you to the chairman of the board of directors of Canada Post, Mr. Gordon Feeney. Over the course of the last few months, the management team of Canada Post—and I include myself in that group—has benefited from the advice and experience of our board, under the direction of Mr. Feeney, in order to deal with a certain number of challenges.

Some of these challenges, you around this table know only too well.

Mr. Chairman, as you know, the original request for my appearance was in relation to the remailers issue. Of course I'm happy to answer questions that any of the honourable members of the committee might have on any subject, but I subsequently learned that members of this committee have expressed an interest also in the progress we are making with respect to the delivery of mail in rural Canada. I'm happy to answer questions on that topic as well.

Before we begin, I thank you for giving me an opportunity to just lay out a few points that the committee might want to bear in mind on the subject, particularly the subject of safety and the safety in the delivery process in rural Canada.

As you know, Mr. Tweed and other members of your committee, in delivering mail in rural Canada, in the past two years we've had 34 accidents, and some of these accidents have caused injury to Canada Post employees. In fact, Mr. Chairman, in the past 12 months alone, we've had two fatalities in delivering mail in rural Canada. We have therefore taken certain measures, many measures, to respond to the safety issues, the real safety issues that arise in the delivery of mail in rural Canada, and to try to balance this safety issue with what is also of incredibly great importance for Canada Post, and that's convenience, convenience in delivery for Canadians.

We have nine decisions from Labour Canada safety officers in relation to the delivery of mail in rural Canada. We are appealing all of these decisions, because in our view some of them go too far. But I want to mention these nine decisions by Labour Canada safety officers because I think it reinforces that there is a real safety concern that has to be dealt with.

Just as I do as the CEO of Canada Post, you, as members of this committee, know that all corporations have a proactive responsibility to take whatever measures are necessary to ensure the safety of their employees. This responsibility is now in fact a criminal responsibility that arises for the CEO and members of boards.

We've done a number of things, Mr. Chairman. We have engaged experts to help us. I am not a traffic safety expert. I am not an ergonomic expert. We have two kinds of safety problems in the delivery of mail in rural Canada. One that most people understand quite handily is a traffic safety issue. Many of the roads that were rural country roads forty years ago are no longer rural at all. They are now in built-up areas. We have people delivering mail to the lot lines in Canada in what might reasonably be considered highway conditions. We have people delivering mail in situations where the traffic may not be too heavy, but there are actual signs and laws of provincial authority saying “no stopping allowed”, or where the shoulders of roads have become increasingly narrow. That's one set of issues on which we have had to have expert help.

The other set of issues is not as easily understood, but I'm able today to take questions on it as well. It's ergonomic hazards. I did not understand until I had to look into this with a lot more detail just how much has happened in the past 20 years in that area of science, in ergonomic science.

We now know that repetitive motion may not cause injury right away, but certainly over time it will cause injury. We have developed with our experts a tool that helps us look at each and every lot line box in Canada and assess whether or not that box is a safe box.

I can assure every member of this committee that Canada Post is committed to delivering mail in rural Canada to every safe lot line box. We have given our drivers lights and signs that make them more visible on roads. We have launched a massive training program that will involve as many as 15,000 of our employees and supervisors to help them understand safe working procedures.

For our customers, we have set in motion a very customized approach. Where we are dealing with hardship cases, which we know arise, we have a 24-hour, seven-days-a-week dedicated call centre to answer questions on this topic. We are doing absolutely everything we can to retain, to restore any service that has been interrupted and to maintain lot line delivery.

I thank you, Mr. Tweed, for giving me this opportunity to tell you about some of the circumstances that have arisen in rural Canada and what Canada Post is doing to address the safety issues that are present.

[The Chair, Conservative, Merv Tweed]

Thank you very much, Ms. Greene.

Mr. Volpe.

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Thank you very much, Ms. Greene, and thank you for coming before the committee.

I appreciate the fact that you alluded to the earlier meetings and that we had anticipated your presence. At any rate, Ms. Greene, without much further ado I'd like to return to the question of the testimony that I know you heard earlier on.

I'm not going to focus very much on the safety matters. They're always of concern to me, and I noted that you've stressed the fact that there were two fatalities in this last year. I'm not even going to ask you what prompted them or how they were brought forward. I leave that for others to ask, because I don't think I want to play with the emotions that are associated with that kind of a description.

What I want to do is talk about your business model. I know you're in the middle of some negotiations and that these may impede your answers, so I'm going to go as far as I can.

Just 15% of your business is in rural communities, and you had a profit of $199 million last year. Why do these people who have appeared before this committee pose you any kind of threat?

[Moya Greene]

Are you talking about the remailers, Mr. Volpe?

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Yes.

[Moya Greene]

First, I would like to open by saying that anyone who knows anything about me knows that I do not fear competition. In fact, 45% of Canada Post's current business is fully competitive. The direct marketing business, the parcel business, we are up against some of the most sophisticated logistics companies in the world, and I think with the engagement of our people we're holding our own. So I'm not fearful of competition.

What I would like the committee to perhaps discuss with me is this fact. When foreign postal administrations come into Canada, they do not have the obligations that the honourable members of Parliament have imposed on Canada Post. They do not have the obligation to deliver the mail to all Canadians at a price that is regulated at two-thirds of the inflationary increase and then only if it adds up to one cent. They do not have the obligation to maintain a network of facilities across the country that is much larger than the logistics requirements of any modern post. They do not have the obligation to keep 7,000 retail outlets, which is bigger than Wal-Mart's retail establishment worldwide—

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

Ms. Greene, I hope you will forgive me for appearing to be less than totally courteous; it is not my nature to be so. If you'll forgive me, I've heard this discussion before, but I've also been around when Canada Post closed down all kinds of post offices and postal stations, especially in my riding. But I don't want to be parochial.

I know that what you're describing is a business model that suits the interests of the corporation. I have no objection to that at all. What I'm talking about--since you've raised it--is the responsibility of members of Parliament to the service of the delivery of mail to every Canadian everywhere in the country.

Now, the people who appeared before you said that they're not involved in residential mail, nor are they involved in personal mail. They're just talking about commercial business exclusive of that. Tell me what essential service and essential obligations are being diminished by that competition, which you have just said you do not fear.

[Moya Greene]

Many postal administrations have different ways to make sure that the public obligations can be paid for. In the case of Canada and other postal administrations, governments have chosen to reserve a small segment of the commercial mail market for the postal administration to defray the costs of other services that could not otherwise be provided. So in answer to your question—

[Joe Volpe, Liberal, Eglinton—Lawrence, ON]

The parcel delivery service, Ms. Greene, is probably the most profitable portion of the mail delivery service, and that parcel post and the parcel delivery service is now in the hands of private sector corporations.

I see you shaking your head, Mr. Feeney, but I just happen to have been involved in that business quite some years ago when Canada Post had exclusive monopoly over it and it has lost a good portion of it. I've also received a lot of lobbying from private sector corporations that resent the monopoly or the extra advantage that Canada Post exercises in the marketplace, and none of it has to do with providing essential services or delivery of essential obligations to Canadians everywhere.

[Moya Greene]

This is currently before the courts, as you know, Mr. Volpe, in terms of it being an international trade dispute. There's a very important point on that case, and we perhaps can leave it there.

Canada Post does not cross-subsidize its parcel business. So for UPS, or FedEx, or any of our competitors to say that our parcel business is cross-subsidized by other parts of the Canada Post business is simply false. In fact, as you probably know, Mr. Volpe, we have to have a separate audit of that fact every single year. We will this year, just as we have every other year.

But the question you're asking is not about parcels. You're asking about mail; you're asking about letter mail. In that segment of the business, we do have a reserved market in Canada for Canada Post to deliver mail, letter mail, that is below a certain size and that is not urgent mail. Urgent mail, anybody can carry. We have that reserved market because parliamentarians want us to maintain a delivery system in the country, which is a vast one.

[The Chair, Conservative, Merv Tweed]

Ms. Greene, I'll have to stop you there. Maybe you can finish it later.

Monsieur Lemay.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Good afternoon, madam.

I thank my colleague for giving me a little time. I particularly thank my colleague who is a member of this committee, because we are experiencing a particular problem in my region that I would like to let you know about.

I wrote to you and did not receive any response. I spoke to the minister, who told me to speak to you. As you gave me no reply, my colleague Mr. Mario Laframboise, whom I thank very much, invited you to appear before the committee. Therefore, I requested the opportunity to ask you a question as the member of Parliament for Abitibi-Témiscamingue.

Last week, I tabled a petition with over 5,000 signatures in the House of Commons, asking that the Noranda Post Office in my riding of Abitibi-Témiscamingue be maintained. The Noranda Post Office serves an elderly population in the city of Rouyn-Noranda. When I state that the population is elderly, Madam President and Chief Executive Officer, I am talking about people whose average age is between 55 and 80 years.

The surprising answer that I was given by someone in your office is that these people have postal service within a four-kilometre range and as they would in any case be going out shopping, all they needed to do was find a way to pick up their mail at a postal counter that is 1.8 kilometres further away.

Is Canada Post not obliged to offer services, madam? I am told that it is in their business plan, that it was a business decision. I say that this is a business decision that does not take into account the population to be served. I am not talking about remailing—my colleague will address that, nor about parcel post, I'm talking about ordinary mail.

How is this possible? What has happened to this profitable post office, that made a profit of $250,000 last year? I ask the question. What was the business decision? How can you make such hard-nosed decisions that affect an aging population?

[Moya Greene]

We always want to offer appropriate services to everyone, to elderly people as well as to those who are disabled. We are doing our best. Furthermore, in order for a business to be profitable, it is sometimes necessary to scrutinize the network of services.

In Rouyn-Noranda, there are several corporate offices as well as franchises that offer services for us. In Rouyn-Noranda, there's another standard and the service is working well. I know that all change is difficult, but it is not a situation where there is no other service. In truth, there is another office that is approximately 1.8 kilometres away, as you mentioned. So it is not very far.

On the other hand, there are several franchises in Rouyn-Noranda. In fact, it is essential that we offer good service to everyone in Canada and we are trying to do our best. We also want Canada Post Corporation to be profitable in the future.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

With all due respect, madam, the post office is profitable. If that were not the case, I would not have asked for the floor this afternoon. In fact, I have all the supporting data showing the profitability of this post office. That is what worries me.

The owner of a convenience store that is 1.8 kilometres away was asked to take care of this. The young clerk is completely overwhelmed and she says does not have the time to deal with this. I know that it is profitable for the convenience store, but the post office employees are telling us that the post office is also profitable. I have the data so it must be true.

[Moya Greene]

It may be true, Mr. Lemay, but for a retail service in the corporate world, the cost structure is much higher than it is for a franchise. This is a very important detail in our opinion, because with the investments that we will have to make so that the corporation remains profitable in the future, it is very important that we study the entire network to see if there is a way to continue offering good service while at the same time reducing the cost structure for the Canada Post Corporation, which is much higher than that of administrative structures elsewhere.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

What about the moratorium?

[Moya Greene]

There is a moratorium on the rural regions, which I accept. On the other hand, we are not talking about rural regions, Mr. Lemay, we are discussing services in the urban sector or in the suburbs.

[The Chair, Conservative, Merv Tweed]

Go ahead, Mr. Dewar.