Evidence of meeting #25 for Transport, Infrastructure and Communities in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was post.
A recording is available from Parliament.
4 p.m.
President and Chief Executive Officer, Canada Post Corporation
Well, we know what the fuel costs were going to be at that time, and certainly everybody was bearing the same fuel cost risk. But on the basis of all of the terms of the increase in the contract, of which there were five, it was a $15 million difference.
4 p.m.
NDP
Dennis Bevington NDP Western Arctic, NT
My colleague mentioned this briefly, but there's been a concern raised about the food mail program and the way the contract was issued for the food mail program. In that case, you were administering a contract for INAC, but wasn't there a court case in which CITT said this wouldn't stand up under normal circumstances?
4 p.m.
President and Chief Executive Officer, Canada Post Corporation
Well, in fact, the CITT decision was quashed by the Federal Court of Appeal. The Federal Court of Appeal found that CITT had no jurisdiction whatsoever in the matter. Air transport matters are not subject to NAFTA or the regulations.
4 p.m.
NDP
Dennis Bevington NDP Western Arctic, NT
Isn't that only because you were fulfilling a contract for INAC? I mean, INAC would normally--
4 p.m.
President and Chief Executive Officer, Canada Post Corporation
No, it's because it's an air--
4 p.m.
President and Chief Executive Officer, Canada Post Corporation
No, Mr. Bevington. With respect, it's not because we were fulfilling a mission on behalf of INAC. It is because air transport is an excluded category of contract under NAFTA, so the CITT has no jurisdiction whatsoever.
4 p.m.
NDP
Dennis Bevington NDP Western Arctic, NT
Okay. So in fact the practices that you started with this, carrying on with Air Canada--
4 p.m.
President and Chief Executive Officer, Canada Post Corporation
I would just like to add something. Cargojet is in fact a client and a supplier to Air Canada. We have...sorry, Canadian North is a supplier to Canada Post. We have relations with Canadian North, but for the contract you are referring to, Canadian North has a tendency to be litigious. If it doesn't win, it certainly exercises its right to complain to the various bodies and organizations to which it can complain, and unfortunately, for this contract we found that the Inuit-owned airline, First Air, had all of the capacity to meet the needs of DIAND.
4:05 p.m.
NDP
Dennis Bevington NDP Western Arctic, NT
Yes, well, of course, the Inuvialuit own Canadian North, as well a significant player in the field, and certainly, I think, should have been given consideration--
4:05 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Thank you, Mr. Chair.
Thank you for your attendance today.
The shareholder of Canada Post is who?
4:05 p.m.
President and Chief Executive Officer, Canada Post Corporation
The Government of Canada.
4:05 p.m.
Conservative
4:05 p.m.
President and Chief Executive Officer, Canada Post Corporation
Canada Post and the employees of Purolator and Kelowna Flightcraft, and Canada Post owns 90.96% of Purolator.
4:05 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
So the people of Canada would be indirect owners--
4:05 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
--of Purolator.
I want to congratulate Canada Post. In fact, as a member of the Purchasing Management Association of Canada in Fort McMurray, which has the largest chapter, I believe, of industrial purchasers, as well as the largest chapter of engineers in the country, I can tell you that Syncrude and Suncor and many of the other large corporations in that area buy on a cost-plus basis. They found that not only is that particular practice very beneficial for both the supplier and the purchaser, but the product and the quality of the service are much better. That's been proven time and time again, for about 20 years as far as I'm aware, so I would like to congratulate you on moving forward on that particular method.
I just see that the real beneficiaries of this are the people of Canada. That is my only comment. I'm going to turn this over to Candice Hoeppner.
4:05 p.m.
Conservative
Candice Bergen Conservative Portage—Lisgar, MB
Thank you very much.
I want to go back to your presentation. You said that on April 30 you received the e-mail from Air Canada in which they outlined the demands and some of the different stipulations they wanted to change in the existing agreement. Were you expecting this? Was the contract up for renewal? What were the timelines?
4:05 p.m.
President and Chief Executive Officer, Canada Post Corporation
No. I'd have to check, but we were about mid-contract. It was not a renewal period. It was basically “give us this or we're going to exercise our right to terminate the contract on 120 days' notice”.
4:05 p.m.
Conservative
Candice Bergen Conservative Portage—Lisgar, MB
So they asked you to please respond, agree, or negotiate by May 16.
4:05 p.m.
President and Chief Executive Officer, Canada Post Corporation
That's correct.
4:05 p.m.
Conservative
Candice Bergen Conservative Portage—Lisgar, MB
Did you contact them at all before May 16 when they sent you a fax?
4:05 p.m.
President and Chief Executive Officer, Canada Post Corporation
Well, as soon as we got the fax, I did not personally, but our people who are responsible for the transportation arrangements of Canada Post absolutely did. Yes, we did. We actually tried to get a delay because we were very worried: “Oh, my goodness, what are we going to do in that timeframe?” Even to get a delay, it would have been very expensive. So yes, we contacted them right away. Obviously, it got our attention.
