Forty per cent of our members send 50 or more pieces of letter mail per month, and these are small companies. In fact, very few of our members—only 1% or 2%—send no letter mail per month. The impact of the rate changes on small and medium-sized firms will be rather significant.
When we ask our members why they use Canada Post, accessibility and convenience are the number one reason, followed by the cost. Low cost was the second most cited reason, at 50% of our members. Reliability was also fairly high. The list goes on from there.
When we asked our members recently about how important Canada Post delivery services are to their business in sending and receiving mail, 61% said that Canada post delivery services were very important to small firms, and 30% said they were somewhat important. As you can see, over 90% of small firms do believe that Canada Post delivery operations are somewhat important or very important to their firm.
But business usage of Canada Post is changing. We've had a fairly large number of our members—42%, in fact—say that over the last three years they have reduced their reliance on Canada Post. Another 42% said that it has remained the same. Only 14% said that it has increased.
This often surprises people, because as consumers, as residents of Canada, I think most people will say that their reliance on Canada Post has dropped significantly, and that they're no longer doing a number of things they used to do through the mail. But with Canada Post specifically and the small business community, reliance is still fairly high.
I want to single out a couple of areas.
One is that we have a large number of business that do payments through the mail. During the most recent postal strike, huge numbers of small businesses were affected, because invoicing and receiving payment through paper cheques is still the dominant form of payment in the business-to-business base. While consumers have moved towards online payments in a big way or to automated payments in another fashion, businesses, because of CRA requirements for paper invoices, still rely very heavily on invoicing and receiving payment through the mail.
Beyond that, letter mail is still an important way of reaching out to one's customers, so that still is ranked fairly high as an issue of concern to our members.
When we asked why they send mail through delivery services other than Canada Post, they say that the speed and reliability of delivery are reasons why they looked at other options.
But we also surveyed them extensively on some of the options for Canada Post to reduce its costs. The option that was rated highest by our members in terms of reducing Canada Post's costs was to freeze wages of Canada Post employees for several years, and also, replacing door-to-door delivery with community mailboxes. Two-thirds of our members, or 66%, said they supported a move towards community mailboxes and away from door-to-door delivery, not because they love the idea, but because they thought that was a reasonable compromise for Canada Post in order to reduce costs without killing service.
Also, closing underutilized postal offices was favoured by a majority of our members.
We had more mixed views on delivering letter mail and ad mail three times a week versus five times a week, but very, very little support for the idea of raising prices significantly. We put out the suggestion that prices would rise by 5% to 10% a year over multiple years for letter mail and parcel mail. Only 21% of our members supported this, and 75% of our members opposed that move.
Now, I should say that we were estimating a 5% to 10% increase in letter-mail prices, and these price hikes that have been announced by Canada Post are much more significant than that. These are huge price hikes that will affect a large number of businesses. I can tell you that one of our members in Saskatoon e-mailed me to tell me that he sends 20,000 pieces of letter mail per year and this cost increase would have a massive impact on his business.
We've looked at some of the cost structures at Canada Post. We do something called “Wage Watch”, whereby we evaluate public sector salaries and benefits versus private sector salaries and benefits.
Overall, wages and benefits at Canada Post were 40% higher than in similar occupations in the private sector; that's wages, benefits, and the working hours advantage combined. On wages alone, it's 17% higher than similar occupations in the private sector. When you include benefits such as pensions, there's another 23% on top of that.
Our members generally support the move to community mailboxes. They support some of the very small steps that have been taken to address unsustainable pension liabilities, but they do feel that Canada Post needs to move faster and to move farther in addressing that particular issue. As for expanding postal franchises, 62% of our members supported that move, and we do support some of the baby steps that Canada Post is taking towards addressing its costs of labour by bringing wages and benefits closer to private sector norms.
The piece we are very concerned about is of course the letter-mail rate hike. We do ask that it be given some reconsideration, or at the very least that it be phased in over a longer period of time. I do think this is ultimately going to lead to a discussion on whether Canada Post's monopoly over domestic letter mail remains appropriate. Our members have mixed views towards privatization though the majority do support privatization of Canada Post. But the question I ask is if anybody would be interested in buying Canada Post given the massive unfunded liabilities and the mess that it finds itself in today.
I do want to make a special note about the $6.5 billion unfunded pension liability. We are now seeing Canada Post—one of the first major agencies of government—turning to price hikes and service reductions as a result of not addressing unfunded pension liabilities. Our advice to you and our urging to you is to think about that for all other government agencies, because there are massive unfunded pension liabilities in many federal government agencies, in the federal government's core civil service, and of course, in the broader civil service at the federal, provincial, and municipal levels. We see the pension crisis as one of the areas that all members of Parliament should be addressing, not just through the small steps that have already been taken and, in fact, far more quickly over time.
Thanks very much.