Transport Committee on June 8th, 2010

[William Henderson]

We're familiar with the framework.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Are you familiar with sole sourcing when a government department or agency is permitted to go to a sole-source provider? Are you familiar with the provisions?

[William Henderson]

I am in general.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Let me just refresh the committee's memory:

...the product or service is required immediately due to pressing emergency and there isn't enough time to issue a competitive tender;

The estimated expenditure is less than

$25,000...or [up to] $100,000 [in other circumstances where]

there's only one qualified company, such as a business that has developed a patented or copyrighted...; or

[if] it's not in the public interest to hold a competition....

I also wanted to ask you the value of the contract that was awarded to you.

[William Henderson]

Because of the commercial sensitivity of those terms and the highly competitive nature of the express industry we compete in, I can't divulge the size of the revenue of the contract. I can tell you that the margin percentage is 15%. That's an accepted transfer margin between Canada Post and Purolator.

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

A point of order, Mr. Chairman.

[The Chair, Conservative, Merv Tweed]

Mr. Volpe, on a point of order.

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

I think it would be in the committee's best interest just to remind the witnesses that we're already dealing with facts and figures that were part of the public record. To talk about a margin of 15% today and to talk about commercial sensitivities is well beyond attesting to the credibility or the credulity of members around the table.

I think we already had some specific figures. I'm going to throw the number out that Moya Greene, the former president of Canada Post, gave to us, and that was a minimum of $100 million, $20 million per annum. Perhaps the witness could give an indication that this range is consistent with the figures already on the table or whether he's going to provide brand new ones.

[The Chair, Conservative, Merv Tweed]

Mr. Jean, on the same point of order.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

To call a point of order on your own member, which is not a point of order but simply another line of questioning, is not appropriate, Mr. Chair. If he wants the time, let him ask for it from his member.

[The Chair, Conservative, Merv Tweed]

Mr. Watson, on the same point of order.

[Jeff Watson, Conservative, Essex, ON]

Yes, Mr. Chair. It's along the same lines. I actually think the time should be deducted from their questioning. That was actually an additional question. She has the complete right to bring up the testimony with Moya Greene and ask whether or not that's consistent. But that's not a point of order at all, and that time should be deducted from Ms. Crombie's time.

[The Chair, Conservative, Merv Tweed]

Thank you.

It's not a point of order, agreed.

Ms. Crombie, please continue.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Thank you.

Perhaps we could have a response as to whether the $100 million is within the general realm of the size of the contract.

[William Henderson]

It's in the general range of the contract.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

I'm trying to establish why there wasn't a more fulsome search conducted, and why Canada Post didn't go into a full RFP, why they awarded you a contract without having investigated all the other options as to who was able to provide the type of service that was necessary to fulfill the terms of the contract, why they went to one single provider.

[Stewart Bacon]

I think that's more a question for Canada Post than for Purolator, in the sense that Purolator was on the receiving end of a request for information.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

Maybe you could describe for me the interlocking relationship of the board of directors of the three companies that are involved: Canada Post, yourselves, and Kelowna Air.

[Stewart Bacon]

All right. The Purolator and Canada Post boards are very separate--

[Roger Gaudet, Bloc, Montcalm, QC]

The right microphone has not been turned on.

[Stewart Bacon]

I apologize. Am I supposed to do something to use the microphone?

[Roger Gaudet, Bloc, Montcalm, QC]

I do not know.

[The Chair, Conservative, Merv Tweed]

Because of technical difficulties, I'd ask you to turn your mike on by pushing the button; they will shut it off when you're done. Thanks.

[Stewart Bacon]

Yes, all three of the boards you referenced are quite independent of each other.

[Bonnie Crombie, Liberal, Mississauga—Streetsville, ON]

There does seem to be some overlapping membership.