Mr. Speaker, this is a government committed to helping Canadian businesses compete internationally.
In Canada we have businesses involved in what is called remailing. Remailing is a business that most hon. members are probably not aware of. Indeed, remailers collect mail destined for international locations from large, commercial mailers. The remailer, or consolidator, then ships the mail outside of Canada to another country, a country with cheaper postal rates, ideally, a country that has been designated as a developing country by the Universal Postal Union.
The Universal Postal Union is an agency of the United Nations. It has been in existence since the late 1800s. Today, it has close to 200 members and deals with postal issues. It does not get involved in domestic postal matters. Its role is to act as a primary forum for cooperation among postal sector players. It actually sets the rules for international mail exchanges and makes recommendations to its members, “To stimulate growth in postal volumes and to improve the quality of service for customers”.
It was the Universal Postal Union that established a single postal territory for the exchange of international mail, which obviously is very necessary. This means that when we are mailing a letter out of the country, we can buy an international stamp to put on that letter.
Canada Post would keep the revenue from that stamp, but it would be a different postal administration delivering that letter. It is that other postal administration that is incurring the bulk of the cost for the delivery of the letter.
Therefore, under the Universal Postal Union system of international exchange of mail, Canada Post would need to compensate the country of delivery. This compensation is called a terminal due.
The Universal Postal Union has classified its member countries as industrialized or developed versus those that are developing. Obviously different countries fit into different categories. This classification affects the rate of terminal due a country is eligible to receive from another country for mail it has received and the rate it is obliged to pay another country for mail that it sent out.
It is a complicated issue, but remailers do not have to pay terminal dues and are therefore able to offer lower rates than Canada Post. The Universal Postal Union also allows remailing. There are other countries that allow remailing. However, Canada does not.
A few years ago Canada Post took a large number of remailers to court. The courts have rightly ruled, in reading the exclusive privilege of Canada Post, that remailing is an infringement upon Canada Post's exclusive jurisdiction. This exclusive privilege was granted to Canada Post through its legislation. This is legislation that was passed in the House of Commons over 20 years ago when the Canada Post Corporation Act was first enacted.
Since the exclusive privilege is set out in the act, the only way to adjust this exclusive privilege is to amend the act. It is only Parliament that can change provisions of the act, and only after public debate and discussion will that change be made.
The government is pleased to have introduced Bill C-14, An Act to amend the Canada Post Corporation Act, and the purpose of this bill is to remove all outgoing international mail from Canada Post's exclusive privilege. This would actually enable remailers to operate in Canada without infringing on Canada Post's exclusive privilege. They would no longer be breaking Canadian law. They would no longer be at risk of a legal challenge.
Although the bill is proposing something broader than just remail, its net effect on Canada Post is not expected to be any different. Indeed, the business model of remailers is to collect large volumes of mail from commercial companies. It is not interested in collecting mail from you, Mr. Speaker, nor I.
They offer Canadian businesses lower postal rates. This actually reduces the cost of those companies. This reduces the cost of their goods or services to Canadians, to consumers, which is ultimately a good thing for Canadians. This results in lower costs to the ultimate consumer of the goods or service.
In fact, there used to be many federal government departments and agencies that used the services of remailers for their mail going overseas. They had shopped around to find the lowest rates so that they could make effective use of taxpayers money.
The proposed legislation is not intended to allow the mail to come back into Canada and that is very clearly a difference that should be re-explained. The addressee of the letter is to be in a foreign country. We are not touching domestic mail. The addressee is to be outside of Canada. Remailers that attempt to send mail back into Canada will still be in contravention of the exclusive privilege of Canada Post after amended.
We are not proposing to let other postal sector players put stamps on their mail while it is in Canada. Some other countries also allow an Extraterritorial Office of Exchange, which is defined by the Universal Postal Union as:
--an office or facility, operated by or in connection with a postal operator, outside its national territory, on the territory of another country. These are offices established by postal operators for commercial purposes to draw business in markets outside their own national territory.
If a stamp is put on a letter while in Canada, it should have a Canada Post approved stamp. If Canada is to allow these ETOE's, or the Extraterritorial Offices of Exchange, there should be a licensing regime associated with it. We are not going there with this proposal. We are not allowing other countries to operate postal outposts in Canada. We want to help Canadian businesses compete internationally and we are attempting to do that with this legislation.
The government has studied the issue. Canada Post has told us that it estimates it is currently foregoing revenues in the amount of $50 million to $80 million a year. This is an estimate based on what it has seen as a trend in its revenue stream since new rules were put in place by the Universal Postal Union in 2001. Canada Post does not know for sure how much business it has been losing to remailers operating illegally in Canada.
On the other hand, the industry itself has made claims of it being millions of dollars to hundreds of millions of dollars. Because the courts have ruled remailing as unlawful, we cannot get data or information from the industry members that can be validated. These are small businesses often, and some large businesses, and usually located in places such as Vancouver, Toronto and Montreal.
Both estimates from Canada Post and from the industry itself are significant. They are also not very close. Some of the difference can be accounted for given that they are based on different premises and, of course, different expectations.
The Canada Post estimate represents the impact on Canada Post itself and is not a measure of the industry. The industry estimate is more of an estimate of economic impact as it includes supporting businesses such as envelope manufacturers and print shops throughout the country, as I mentioned.
Should this legislation get enacted, Canada Post estimates losing another $45 million to $50 million a year, so there are financial implications. Its employees will worry that this is a first step toward privatization. Let us be clear. This government will not privatize Canada Post and there are no plans to do so.
Canada Post is a very large institution. It is one of the largest employers in Canada. It has one of the largest retail networks in Canada. It provides services to Canadians from coast to coast to coast. Some would argue that it is indeed a Canadian icon.
I would argue that in rural communities in my constituency there is no federal institution that is more important to my constituents than Canada Post. That is why this government is taking positive action for Canadians.
There are many issues and challenges facing this corporation. It would be easy to get sidetracked on any number of these issues. We just need to ask the previous members of the Standing Committee on Transport, Infrastructure and Communities. They had some discussions on remailers, as my friend across the way will confirm.
The members tabled motions and amendments to those motions. At the end, they reported back that they wanted time to study the issue. This government has decided that it has done enough studying. The government has decided it is time to take action and positive action will be taken.
The bill itself is targeted to this specific issue. We do not want to get sidetracked in our goal to address this issue. Indeed, we also do not want changes to Canada Post to be widespread. This government is not interested in destroying Canada Post or privatizing it. We are not opening up our domestic mail services.
This is not the first step in the privatization of Canada Post. I have said that three times. I can assure the House that we are sincere on that.
We are enhancing competition in the outbound international mail business to benefit Canadians, to benefit small businesses across this country, and we are going to continue to support Canadian businesses.