Evidence of meeting #22 for Transport, Infrastructure and Communities in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was purolator.
A recording is available from Parliament.
9:45 a.m.
Liberal
Sukh Dhaliwal Liberal Newton—North Delta, BC
Are there any other firms that are able to meet all those requirements that you're mentioning?
9:45 a.m.
President and Chief Executive Officer, Purolator Courier Ltd.
I've been with Purolator for 21 years. I can speak in great detail about Purolator's capabilities.
Our competitors are fine companies. I can't speak about their capabilities.
9:45 a.m.
Liberal
Joe Volpe Liberal Eglinton—Lawrence, ON
Thank you, Mr. Henderson.
I'm a little troubled by a couple of things, and I'm wondering whether we can begin on some of them. I don't have much time right now, but perhaps you could explain to me why you would come to this committee knowing that the soon to be former president of Canada Post said she can't answer any of the questions regarding this contract, that we'll have to ask Purolator, and then you give us exactly the same refrain. You can't answer any of the questions regarding the contract; we'd have to ask Canada Post.
Canada Post has six directors on your board, it owns 92.6% of your company, and your company was the beneficiary of a contract that was previously handled by Air Canada. Not only that, the specifics that are available in the public domain tell us that the contract you got that was initially resident with Air Canada was a cost-plus contract. The reason you got that contract--I think you said 15% margin--is that Air Canada asked Canada Post to make up the difference in the surcharges that everybody was imposing on jet fuel because of the aberrant cost of fuel at that time.
When you got the contract, it was for cost plus, which meant that the fuel cost could have gone through the stratosphere and you would have got every penny that Canada Post didn't want to give Air Canada.
I just wonder how it is that your company was the beneficiary of a transfer of that contract, limitless in its cost, and then immediately transferred it to the company of one of its board of directors. Who is going to answer the question? Canada Post won't; you won't. I guess maybe Kelowna might.
9:45 a.m.
President and Chief Executive Officer, Purolator Courier Ltd.
Sir, I will answer the question. First of all, we were invited to come and share views with this committee, and we're very pleased to do so.
In terms of Air Canada's relationship and dealings with Canada Post, I can't comment on that. I represent Purolator. I can tell you anything about Purolator.
On the RFI, we responded to a public RFI that was issued in the industry. It was not a transfer of contract. That contract could have been awarded to any other carrier. Based on the merits of Purolator's capability and the proposal we put forward, it was a public RFI that we were very pleased to be awarded--based on the merits of that RFI.
9:50 a.m.
Liberal
Joe Volpe Liberal Eglinton—Lawrence, ON
It's just an RFI; it wasn't an RFP. So you were awarded something on the basis of the fact that you had a very special relationship with Canada Post, but if you were so--
9:50 a.m.
President and Chief Executive Officer, Purolator Courier Ltd.
Sir, if I can correct you, it was a special capability we were awarded. It was the equipment, Purolator's capability, which outstretched anybody else, with the exception of Air Canada.
9:50 a.m.
Liberal
Joe Volpe Liberal Eglinton—Lawrence, ON
You didn't have the DC-10s you're talking about. Kelowna did, or Kelowna was in the process of acquiring them, not Purolator. So you didn't have the capability.
9:50 a.m.
President and Chief Executive Officer, Purolator Courier Ltd.
Kelowna Flightcraft.... I think for the benefit of the committee I should share what Purolator does and what Kelowna does, and that may help.
Purolator establishes the relationship with our customers. We provide the pickup, delivery, the scheduling, and the loading of our pickup and delivery vehicles. We scan all those packages, provide the invoicing, the support, and all the training to our people for the handling of goods, whether it's dangerous goods, safety compliance, security, to make sure we provide a safe, secure environment for our customers' packages. As far as the ground transportation--and I'll cover that--Purolator moves over 1,400 trucks, tractor trailers, every day right across the country. About 600 of those tractor trailers are outsourced every day to other Canadian firms to expand Purolator's capability. But the customers are dealing with Purolator; they're not dealing with the individual 600 trucks that are operating under Purolator's requirements.
Kelowna Flightcraft, as we said, has been providing airlift services for Purolator for a significant period of time. In 2007 we did go out with a public RFP to make sure we were competitive; that was translating to a competitive opportunity for our customers to keep Purolator in business. Obviously, with the companies we compete with, we're the only Canadian carrier. The rest of the competitors we compete with are foreign multinationals, so it's incumbent upon Purolator to keep that number one leadership position that we've worked very hard to maintain for 48 years.
We use Kelowna Flightcraft to provide our airlift services and complete that. So when we are talking about Kelowna...Purolator's capability resides in the trucking firms we employ and in the aircraft aviation companies. Cargojet and Perimeter Aviation are among those aviation companies we use to make sure we provide that service to Canadians.
9:50 a.m.
Bloc
9:50 a.m.
Chairman of the Board, Purolator Courier Ltd.
Purolator has revenues of $1.4 billion.
9:50 a.m.
Bloc
Roger Gaudet Bloc Montcalm, QC
I have only a few brief questions.
Since when has Mr. Lapointe been a member of Purolator's board?
9:50 a.m.
Chairman of the Board, Purolator Courier Ltd.
For quite some time, I believe. He has been with Purolator for at least 15 years, perhaps more.
9:50 a.m.
Bloc
Roger Gaudet Bloc Montcalm, QC
Thank you.
How many of Purolator's board members sit on Canada Post's board?
9:50 a.m.
Chairman of the Board, Purolator Courier Ltd.
How many of Purolator's board members?
9:50 a.m.
Chairman of the Board, Purolator Courier Ltd.
President Greene is the only one to sit on both boards.
9:50 a.m.
Chairman of the Board, Purolator Courier Ltd.
Oh, I apologize, I believe I did not quite understand your question.
9:50 a.m.
Bloc
9:50 a.m.
Chairman of the Board, Purolator Courier Ltd.
There is but one, and that is Ms. Chicoyne. She sits on both Canada Post's and Purolator's boards.
