Transport Committee on June 11th, 2009

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

But you have six of your members on the Purolator board. They had already made the determination that the carrier was going to be Kelowna Flightcraft, and in your statement just a moment or two ago you said that what you wanted to do was update your market intelligence, so you really didn't have any interest at all in seeking out any other provider. You were just trying to update your market intelligence. Is that it?

[Moya Greene]

We had a service commitment, Mr. Volpe, that we had to meet. In response to the situation that was given to us by Air Canada, we had a service commitment that we had to meet, and that was uppermost in our minds.

We know the market. We are in the business. We have been in this business for many decades. Our people at Canada Post, the people who operate in the transportation section of our company, know who's out there and who can provide the necessary level of service.

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

Well, then, why issue a request for--

[Moya Greene]

It was because we needed to update. We wanted to update our intelligence.

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

Ms. Greene, I go back to the two words “accountability” and “transparency”.

The other board on which you sit, Purolator, also applied the same practices that Air Canada applied. In fact, in their annual report they talk about increasing their fuel surcharge by 34%.

[Moya Greene]

It's not 100%.

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

You're giving us a range from 25% to 100%, and I agree with you. You make a good, solid business position, but my understanding of the contract that Purolator then issued with Kelowna Flightcraft is that it was cost-plus, so it's not at just 100% now; it's any number--any number--over 100.

[The Chair, Conservative, Merv Tweed]

I'm going to ask--

[Moya Greene]

Mr. Volpe, I'm not going to get into the commercial details of contracts, either with Canada Post or with Purolator. There is a commercial sensitivity here. I have to be careful, and if you want to talk to Purolator about their contracts, of course you are always free to do so, but I do want to--

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

You're on that board. I'm talking to Purolator right now, Ms. Greene--

[Moya Greene]

If I may just finish, Mr. Volpe, I do want to assure you and this committee that the processes that are followed for contracting inside Canada Post are fair and impartial. They are subject to audits. They are reviewed by our board.

In the case of the contract with Purolator, all of the laws, procedures, and processes inside our company and inside Purolator were followed. It delivered great service to Canadians in a very demanding situation, a situation in which we had 120 days to recreate an entire air transport network. It delivers better service today, and it was completely open and above board--

[The Chair, Conservative, Merv Tweed]

I'm going to go to Mr. Laframboise now--

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

We're not talking about your performance; we're talking about accountability and transparency--

[The Chair, Conservative, Merv Tweed]

Order--

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

--and you didn't address that.

[The Chair, Conservative, Merv Tweed]

Order, please. Order.

Go ahead, Monsieur Laframboise.

[Roger Gaudet, Bloc, Montcalm, QC]

Hold on. Only one person can speak at a time, otherwise the interpreters cannot understand what is being said.

[The Chair, Conservative, Merv Tweed]

That's what I'm trying to do. Thank you, Mr. Gaudet, and I would ask members to respect the chair. When I ask for order, I would expect that all voices would become silent.

Go ahead, Monsieur Laframboise.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Ms. Greene, you have your opinion on transparency. But let us have ours. True, you are a shareholder in Purolator, but the owner of Kelowna Flightcraft is also a Purolator shareholder. That is the reality.

You said that you had dealt with four suppliers in the industry: Cargojet.... I am referring to an article by Mr. Leblanc published in the Globe and Mail on May 30. The head of Cargojet said that he was not given a chance to tender a bid. He was told that arrangements had been made with Purolator and Kelowna Flightcraft. You talk about transparency, but people in the industry are questioning how this all came about.

[Marc Courtois]

If I may, I would like to go back to what Ms. Greene said.

First, Air Canada gave us 120 days' notice of termination of the contract. So we began by devising a strategy. I am talking about Canada Post, not the Canada Post Group. The first thing to do was to study the market. We asked four companies for references, including Purolator and Cargojet. Based on the information received, we determined that Purolator was the only one capable of giving us what we needed by September 13, 2008.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

But the owner of Cargojet disagrees with you on that.

[Moya Greene]

Yes, but that happens all the time, Mr. Laframboise. There will always be....

[The Chair, Conservative, Merv Tweed]

Order, please.

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Ms. Greene, please let me speak. You will have a chance to respond.

It does happen, yes, but the fact remains that in Purolator's case, your joint shareholder is the owner of Kelowna Flightcraft Air Charter Ltd. According to what I have been told, the contract that Purolator awarded to Kelowna Flightcraft is a cost plus contract. Is that correct?

[Moya Greene]

I can assure you that the contract complies with industry standards. Based on standard contracts of this nature, an analysis is always conducted to forecast costs and the rate of profit.

As for transparency, Mr. Laframboise, I can also assure you that everything was totally above board. Mr. Lapointe and Kelowna Flightcraft were not at all involved in the group's deliberations, as far as both Purolator and the Canada Post Corporation were concerned.

In English, we would say for these contract matters he had to recuse himself. He was not involved at all.