Mr. Speaker, in spite of the unfortunate circumstances that led to this debate, I want to tell you how proud I am to be the minister responsible for the Canada Post Corporation.
Canada Post is one of our country's most important institutions. It was among the first departments to be established after Confederation, in 1867. Afterwards, it evolved in harmony with Canada and kept pace with it, while also being a reflection of our nation.
The Canada Post Corporation delivers 11 billion items of mail every year to the 12 million addresses in its register, thus acting as a link between us and between our communities.
Some small communities in our great northern regions are totally dependent on postal services, not only for mail, but also for the delivery of drugs, food and other products essential to their survival.
Canada Post, which became a crown corporation in 1981, is now the fifth largest Canadian business, with sales of $5 billion and more than 54,000 employees. The cost of a stamp to send an ordinary letter is the second lowest in the world, and it is frozen for the next two years.
The service provided by Canada Post is often criticized in our country, but it compares very favourably to that of all other postal administrations in the world. Still, our postal service, like our whole society, is going through a period of intensive changes.
Faced with the massive expansion of new technologies such as fax machines, electronic mail and the Internet, Canada Post must make changes or else it will disappear. What used to be the raison d'être of the postal service, namely mail delivery, now accounts for only 55% of the corporation's activities. Nowadays, 45% of all Canada Post operations are based on modern and competitive products.
It is this approach, this modern vision of our postal services which led to the labour dispute we are dealing with today. Normally, seven months of negotiations and three resourceful mediators and conciliators working on the issue should have produced the agreement we were seeking. This is what happens in more than 95% of all labour disputes in Canada.
What is even more surprising is that the Canada Post Corporation has signed agreements with its three other employee unions. Why is it that things are always so difficult with the postal workers and letter carriers?
After spending months carefully studying of this situation, I must say that the Canadian Union of Postal Workers refuses to recognize some undeniable facts. The best case in point is the possible privatization of the Canada Post Corporation. I said it, I repeated it in all languages and I say it again: Canada Post is not for sale, not today, not tomorrow and not in any foreseeable future. Both former ministers repeated it over and over again. In spite of all that, the union keeps on frightening its members and the public with this threat of possible privatization.
This decision was not made lightly. It was confirmed by the government last April, after a complete review of the terms of reference of the Canada Post Corporation. Public hearings were held in all regions of the country and then a complete report was issued. The conclusion was very clear.
In a country such as Canada, whose landmass is so great and population so widely dispersed, no private system will ever be able to provide a universal service for a reasonable price.
For the last ten years, the Canada Post Corporation has not received any public money and we have to make sure it never again becomes a burden for the Canadian taxpayer.
First, the government decided, last spring, to give the corporation the means to ensure its long term viability.
Last April the government directed Canada Post to offer Canadians universal postal service at a reasonable price, institute more transparent reporting and the highest standards of business practice, achieve financial performance consistent with the private sector regulated monopolies, continuously improve letter mail and retail service especially in rural Canada, respect stamp price freeze for two years and then maintain stamp price increases below inflation, ensure no cross-subsidization from exclusive privileged products, create an ombudsman position, and recognize these principles in labour negotiation.
Canada Post has already moved on many of these items. It has opened its books and published its annual report. It has appointed an ombudsman and it has demonstrated that there is no cross-subsidization between its exclusive products and the competitive ones.
Over the past several months Canada Post has also committed significant resources to transforming and improving postal service in rural Canada. The result will be faster, more reliable and more predictable service in rural Canada.
Beyond these specific initiatives there is an urgent need for the corporation to address service improvement at a more basic level. This is why it has become a key factor in the current negotiations. In its current form the collective agreement is a major barrier to making the service improvements customers are demanding from Canada Post.
In an independent evaluation, Gordon Ritchie, well known as the deputy chief negotiator of the Canada-U.S. Free Trade Agreement, said:
The Canadian Union of Postal Workers has been remarkably successful over the past 23 years in arrogating to its members the lion's share of economic rents from the Canada Post monopoly.
Recent polls show that around 85% of Canadians believe that Canada Post employees generally have good working conditions especially with regard to pay and benefits.
Ritchie came to this conclusion:
The existing Canada Post Corporation collective agreements constitute what is arguably the most uncompetitive and inefficient labour agreement currently in place in any jurisdiction in North America.
He also specified:
Excessive wages are not the main problem.
Pay for time not worked is an even more substantial direct cost burden.
The most costly provisions over the long run are probably those restricting the Canada Post Corporation's ability to terminate, to redeploy or to employ more efficiently its huge workforce.
This is precisely what is at the heart of the present dispute. Canada Post must be able to adjust its work force to its needs. Let me illustrate this point with a concrete example.
Last spring, the corporation started a reassignment process for 47 of its Toronto employees who were surplus by following to the letter the provisions of the collective agreement.
There is a very complex process whereby employees can apply, according to seniority, for vacant positions. After seven months, the corporation had managed to reassign four of the 47 employees.
Still according to the established process, management will be able during the next few months to reassign the others to vacant positions. This staff movement will have, in the end, involved hundreds of personnel. And altogether it will have taken a year.
Moreover, in most cases the reassigned employees need training to perform their new duties, which means their productivity is lower for a long time.
Obviously, the yoke in which the management of Canada Post must work involves operating costs that have a considerable impact on the competitiveness of the corporation.
The current collective agreement that binds Canada Post and the Canadian Union of Postal Workers contains dozens of clauses that are equally inconsistent with the competitive world in which the corporation must operate.
It is only for this reason that the bill before us today requires the mediator-arbitrator to “be guided by the need for terms and conditions of employment that are consistent with those in comparable industries in the private and public sectors and that will provide the necessary degree of flexibility to ensure the short- and long-term economic viability and competitiveness of the Canada Post Corporation”.
We also ask him to take into account that the corporation must, without resorting to undue increases in postal rates, perform financially in a commercially acceptable range, operate efficiently, improve productivity and meet acceptable standards of service.
Employee pay and benefits account for 63% of Canada Post's operating costs. The most surprising thing is that too much of this goes to unproductive employee activities. But this should not in any way be seen as blaming Canada Post's employees.
Indeed, the vast majority of them are devoted and qualified workers. Rather, the flaw comes from an obsolete system that badly needs modernizing.
For example, every day, the 16,000 letter carriers spend an average of 16 minutes on a bus or in a taxi to go back to their depot at lunch time. They do not have the right to eat on the road, even though this would suit them better. Their collective agreement forbids it.
If we only allowed those who use a motor vehicle to eat on the road, the corporation could save $8 million a year. But this is not allowed either by the current collective agreement.
On September 15 of this year, the Post Canada Corporation submitted a comprehensive offer to the union. In exchange for concessions on human resource management issues, Canada Post has offered pay increases of 1.5% for each year in the contract, the creation of 500 full time positions and the preservation of full job security for those who already have it.
A few weeks later, in order to prevent a strike, Canada Post waived some of its demands, improved its pay increase offer and accepted a union demand on overtime carrying a cost of $35 million a year. The union refused again.
As I said earlier, this labour conflict is in a class of its own. As the labour minister has so ably demonstrated, the Government of Canada has done everything it could to create a climate conducive to a negotiated settlement.
Three experienced mediators and conciliation officers have helped the parties with all their skill and expertise. We have given the bargaining process every opportunity, but all to no avail.
In the meantime, hundreds of small businesses have experienced difficulties. Hundreds of men and women have lost their jobs. Dozens of charities have been deprived of their principal means of collecting the donations they need for their activities.
I have received personally over 2,000 messages from postal service users throughout the country begging the government to step in.
This strike has already been the cause of major damage to our economy and our social fabric. That is why we had to resort to back to work legislation. We are not doing it lightheartedly but because we feel this is our responsibility. We acknowledge this is not a perfect solution. This conflict, like previous conflicts, will leave scars. Many customers will not go back to Canada post. In the absence of postal services, they have found alternatives, and often permanent ones. That is what have done for over a million recipients of our various social program benefits who have chosen direct deposit in the last few months. Those postal revenues are lost forever.
To prevent such conflicts in the future, mentalities must definitely be changed and more efficient mechanisms developed to manage labour relations at Canada Post.
That is why, in the next few months, I intend to undertake serious research to find instruments better suited to the realities and imperatives of the Canadian postal system.
Some progress is already obvious. For the first time in history, Canada Post completely suspended its operations and did not use replacement workers. This is a first step in the right direction. Many others will be needed.
In the meantime, I urge all my colleagues to support this legislation for the speedy resumption of postal services, which will greatly help our small businesses, our charities, and all Canadians.
