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.
4:05 p.m.
Conservative
4:05 p.m.
President and Chief Executive Officer, Canada Post Corporation
I'd have to check the exact date for you; I think “pretty smartly” is how I would put it, but I'd have to check the exact date for you.
4:05 p.m.
Conservative
Candice Bergen Conservative Portage—Lisgar, MB
Right, because if you didn't, and if it took you quite a while to contact Air Canada, I would think there might be some concern on their part, with them wondering if you actually want to negotiate with them and see if you can find some agreement. So that's why I'm--
4:05 p.m.
President and Chief Executive Officer, Canada Post Corporation
No. I will check with my colleagues at Canada Post and get you the exact day, but I think we contacted them pretty smartly.
4:05 p.m.
Conservative
Candice Bergen Conservative Portage—Lisgar, MB
Thank you.
There's another question I'm just wondering about. When the board was meeting and you were looking at the direction you were going to take, were there any concerns? Did you say then that there may be a perception of conflict of interest?
4:05 p.m.
Chairman of the Board, Canada Post Corporation
The first concern was the timeframe in which to move the network.
Do I remember specific discussions on conflict of interest? No, but I remember specific instructions to management to determine who would be able to replicate the Air Canada network. That's why the RFI went out.
I remember specific questions by the board at the second meeting, when a recommendation was made by management that Purolator was the only player that had the lift necessary or could find the lift necessary, that was capable of meeting our needs, and that we were confident of. There was a lot of discussion and there were a lot of questions of Purolator and perhaps relations that Purolator had. There were concerns, but at the end of day, the board believed that we took the right business decision at that time. At the third meeting, I think it was proved out, in that the third meeting discussion took place after the transfer took place, and I would say to you today that based on the facts we have today, I don't think we would have changed the process.
I think management--and I'm not management--on the network side did an outstanding job.
4:10 p.m.
Conservative
Candice Bergen Conservative Portage—Lisgar, MB
So you believe and discussions would prove that due diligence was given to both--
4:10 p.m.
Conservative
Candice Bergen Conservative Portage—Lisgar, MB
--negotiations with Air Canada to try to resolve this and to awarding the contract as it was awarded.
4:10 p.m.
President and Chief Executive Officer, Canada Post Corporation
As well, Ms. Hoeppner, it's important to note with respect to Air Canada that at that time Air Canada was really thinking about whether they wanted to be in the domestic cargo business, because it's very hard for them. They were moving to smaller aircraft. They don't have a lot of space in the belly of their aircraft. They need the space for passengers' luggage. Customers like us, like Canada Post, are pretty demanding customers in the sense that we need to move that mail every day. It's a vast network. It's over 300 different flights a day.
As I was trying to explain to Mr. Bevington, Air Canada's whole approach was quite different. With the reconfiguration of their fleet and their concentration on reserving whatever space they had for passengers' baggage, they were having difficulty accommodating any cargo, especially cargo as demanding as getting the mail out every day.
4:10 p.m.
President and Chief Executive Officer, Canada Post Corporation
I think they feel differently today.
4:10 p.m.
Conservative
Candice Bergen Conservative Portage—Lisgar, MB
Yes, I'm sure they want the business.
But I would be very interested in knowing when you did respond after April 30.
4:10 p.m.
President and Chief Executive Officer, Canada Post Corporation
I will get that for you.
4:10 p.m.
Liberal
Sukh Dhaliwal Liberal Newton—North Delta, BC
Thank you, Mr. Chair.
Again, thank you to the panel members. Welcome.
You said that the CPC and Barry Lapointe did not recuse themselves. In the interests of clarity and for us to understand and have a better sense of the board and its governance practices, could you explain why they didn't do that?
4:10 p.m.
President and Chief Executive Officer, Canada Post Corporation
What I said was that they did recuse themselves. He was not involved in the discussions of that Kelowna Flightcraft contract with Purolator at all, and for that reason--because he is on the board of Purolator.
4:10 p.m.
Liberal
4:10 p.m.
President and Chief Executive Officer, Canada Post Corporation
We certainly were involved.
4:10 p.m.
Liberal
4:10 p.m.
President and Chief Executive Officer, Canada Post Corporation
It's quite normal. Canada Post owns Purolator 90.96%. It's normal that the shareholder would be represented to that extent on the board. That's quite normal.
Also, it's normal that this sort of arrangement of the supply of services would be constructed inside the Canada Post group of companies to the extent possible, obviously making sure that you are being careful to adhere to all the rules and necessary processes that you have to in this situation, which we did.
