Debates of May 7th, 2014

Transport—Main Estimates, 2014–15

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, under the Canada Marine Act, it is noted that the port authorities should have consultation and they should actually be there to ensure they are furthering local needs, taking into consideration marine users as well. Their obligations are to ensure that the port services are there to support the port, but as well they do it in consultation. That is the reason we have port authorities set up, so they can have that direct co-operation with their local communities in consultation.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Chair, let me ask the minister why the Toronto Port Authority is beginning work on runway design and environmental assessment to accommodate jets at the Billy Bishop island airport? Does the minister believe that this is in contravention of the tripartite agreement with the City of Toronto and the federal government?

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, as the hon. member knows, I have experience with the tripartite agreement in Toronto. What I know from that information is that the Toronto Port Authority is responsible for the operation of that facility. It is allowed to undertake the actions for the operation of that facility, as has been recognized in the past.

I will point out to the hon. member that going for a tender in order to perform an environmental assessment is one thing, but the environmental assessment is the basis of consultation with the surrounding community. The consultation has to happen through that process, and frankly, it should happen in that process.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Chair, those responses to the last two questions seem contradictory.

In the first one, the minister said that there should be meaningful consultation. The second one was a reversion to the rights of the port authority to do what it wants. I am not sure how she reconciles those or what exactly the answer is as to why the Toronto Port Authority is proceeding the way it is in Toronto.

Let me ask this. Does the minister believe that the federal government should respect the City of Toronto's right to implement its vision for its waterfront to allow Waterfront Toronto to get under its mandate and get on with its good work, including ways to manage effects such as noise, traffic, and land use impacts?

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, with respect to the tripartite agreement, one fundamental part of the tripartite agreement is that there will not be an extension of the runway. The Toronto Port Authority knows that. It does not have the ability to build that. It does not have the agreement of the other parties, the federal government and the City of Toronto, on that matter. For it to do an environmental assessment is one thing; the ability to build that extension is quite a different one, and that issue has not been decided.

With respect to the Toronto Port Authority and Waterfront Toronto, my former colleague, the former Minister of Finance, was a great champion of Waterfront Toronto. He left a great legacy on our waterfront with respect to ensuring that there were funds available to do the revitalization of that part of the world. I am very proud of the work that Jim Flaherty did down there. I am proud of Sugar Beach. I am very proud of everything that Waterfront Toronto has done, including all of the changes with respect to transportation. He was a driving force in this matter, and no matter what the hon. member says, no one can take that away from him.

[Some hon. members]

Hear, hear!

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Chair, I could not hear the minister's response over the cheering behind her.

The question remains why the federal government would let the Toronto Port Authority run roughshod over the work of Waterfront Toronto that the minister seems to be applauding.

On the issue of port authorities, is the minister aware how many Conservative donors have been given lucrative appointments on the boards of directors of port authorities across this country?

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, having served as corporate secretary for various boards, one in particular being the Toronto Port Authority, what I can tell the House is that the appointments to the port authorities are taken seriously. They are vetted through a process. Indeed, highly qualified people sit on these local port authorities for very little compensation to ensure that the right things are happening in their local communities. We thank them for their service. They do good work.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Chair, I wonder what that vetting process is and how serious it is, because the number of Conservative Party donors sitting on these boards is perhaps too high for the minister to count.

Has the minister herself ever recommended Conservative donors for appointments to Canadian port authorities in her tenure as the transport minister?

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, I can tell the House that the way the appointments work with respect to port authorities is very specific. It is laid out in their letters patent.

They divide themselves into user groups. The user groups then vet the candidates and then present the information to the minister in order to make the recommendation to the Governor in Council for the appointment. There is quite a robust structure to the nominating procedure to ensure that it is advertised in the community. It has to be advertised in the community. That is where the pool of candidates comes from.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Chair, I do not think that was an answer to the question about whether the minister herself has ever appointed a Conservative donor to a Canadian port authority in her tenure.

Let me ask this. How many of the directors on the board of the Toronto Port Authority are Conservative donors? I think the answer is at least three.

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, as the hon. member probably knows, there are rules with respect to directors on port authorities, and they are not allowed to make political donations, even to his party, if they want to.

[Matthew Kellway, NDP, Beaches—East York, ON]

Or Québec solidaire, Mr. Chair.

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, they are not allowed to make donations to political parties, being federal appointments. On that basis, I have no knowledge of what he is speaking about.

[Matthew Kellway, NDP, Beaches—East York, ON]

Let me clarify, Mr. Chair. We are asking how many donated before the appointment, not while they were appointed. We know that there are at least three members of the board of directors of the Toronto Port Authority who had donated to the Conservative Party in advance of their appointments.

How many accidents involving passenger trains colliding with vehicles at level crossings have occurred over the past 10 years, as documented by the Transportation Safety Board?

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, we will get that number and information for the member. Obviously, there is a lot of information here at the table before me. We will find that and provide it for him. I do not have it at my fingertips right now.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Chair, there have been 257 of these accidents in Canada over the last 10 years.

Can the minister explain to us why the accident rate between passenger trains and vehicles has not been reduced under her government?

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, as the hon. member knows, there are a number of reasons accidents happen. It is part of the work of the Transportation Safety Board to determine the factors that are contributing in each particular accident, and we learn from those recommendations, obviously, going forward.

With respect to the number of accidents in 10 years, quite frankly, one is too many, and we all agree with that. That is why we have things like Operation Lifesaver. That is why we do work on grade separation. That is why I have round tables with local communities to talk about the importance of it. That is why we talk to school kids, and that is why we have Rail Safety Week. In everything we do, we are trying to ensure that we have safer railways. We continuously work on it, and the people who work at Transport Canada in that sector do an excellent job.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Chair, if she cannot explain the accident rates, that is cold comfort to Canadians who are worried about rail safety in this country. The minister's response, if I can paraphrase, which is that it is for a whole bunch of reasons, is hardly satisfactory for a minister who places safety, purportedly, as her top priority.

Back to the port authorities. Is it the opinion of the minister that port authorities should follow provincial environmental laws and respect municipal visions and the right to be adequately consulted?

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, as the hon. member knows, this is a federal jurisdiction. These are federal lands, and therefore they have a whole regime that applies to them under the operating regulations and the Canadian environmental regulations that are specific to port authorities in Canada.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Chair, does the minister believe that she has the responsibility to reduce greenhouse gas emissions in Canada's transportation sector? What is her responsibility to encourage public transit to that end?

[Lisa Raitt, Conservative, Halton, ON]

Mr. Chair, in fact, we can see from the main estimates, which I thought we were actually going to be talking about tonight and was prepared for, but nonetheless, one thing we have a fund for is clean air from transportation. There are a number of projects in there that are extremely important to ensure that we do what we can to make sure we have clean air. We have invested significantly in that, and we will continue to do so to make sure that the folks who are doing work in the area will continue to do that work.

Specifically, we are proposing in the main estimates this year that we have access to $38,992,028 in spending authorities for the specific program activity to ensure that the good work these people do continues with respect to ensuring clean air from emissions and shore power technology.

[Matthew Kellway, NDP, Beaches—East York, ON]

Mr. Chair, does the minister agree that Canada needs a national public transit strategy?

[Lisa Raitt, Conservative, Halton, ON]

I wish I had more time to talk about that, Mr. Chair. I will say one thing. I have a long history in transportation, and I can say that what I have learned is that transportation needs in Sydney, Nova Scotia, versus what is needed in Milton, Ontario, versus what is needed in Wascana, Saskatchewan, are very different from one another. Having a single strategy of one-size-fits-all does not necessarily work and is not the best use of taxpayer dollars.

I prefer our economic action plan and our Building Canada fund. Those things are targeted and are there to ensure that when a community says it wants a project, this is the project we do. It is not one-size-fits-all.

[Larry Miller, Conservative, Bruce—Grey—Owen Sound, ON]

Mr. Chair, I would certainly like to wish the minister the best of greetings on a special day and thank her for being here tonight.

In December last year, Canada Post Corporation released a comprehensive five-point action plan entitled “Ready for the Future”. It was designed to realign how it delivers and prices postal services to meet Canadians' emerging and future needs while substantially reducing costs to the taxpayer.

This is a watershed moment for Canada's national postal service. Letter mail volumes have been declining since 2006, when Canada Post delivered 1.2 billion more letters than it did in 2013. That is a big number. The corporation estimates that for every 1% drop in mail volume, it loses $30 million in revenue. This is placing a huge strain on Canada Post's finances, as witnessed by losses of $129 million, before tax, in the postal segment alone in the third quarter of fiscal year 2013. It is quite clear that the services, as currently provided by Canada Post, are no longer sustainable.

Canada Post must now manage its business as a viable commercial enterprise that competes effectively in every product line. Even its traditional direct marketing business is facing digital rivals that use mobile and smart technologies, and the parcel business operates in a highly competitive environment.

The corporation is well aware that to build on recent successes, it must attract customers in an increasingly complex economic environment. The parcel business, unlike letter mail, is highly competitive, and parcel volumes have been rising worldwide. Postal services in many countries have been aggressively using their extensive sorting and delivery infrastructure to expand in this sector. Globalization has more parcels coming into Canada to be processed to the same high standards, and the highly competitive parcel delivery market means that service providers must modify operations in order to win and retain customers with the quality and reliability of their service. In the business of the customer parcel delivery market, that means providing fast, reliable, and convenient delivery, excellent tracking options, and reasonable prices.

The growth in the parcel industry has also intensified local and global competition. FedEx and UPS, for example, have increased their competitive positions in Canada. Customer patterns have also shifted from premium to less urgent products that cost less. The increased competitive landscape has put increased pressure on Canada Post to manage costs, improve product offerings, and provide a superior customer experience.

With approximately 40% of parcel deliveries to Canada originating internationally, Canada Post has negotiated bilateral agreements, notably with the United States and China, to increase its share of this inbound traffic. The corporation has also made extensive investments in new facilities, including a 700,000 square foot plant at Vancouver International Airport. It has increased real-time tracking through portable scanners for employees and has added to its capacity for motorized delivery to handle growing package volumes.

Canada Post also offered on-demand parcel pickup for small businesses in 2011 and 2012. It provided enhanced web services for online retailers, including seamless management of returns.

I wish to emphasize that the government is committed to ensuring transparency in how Canada Post provides quality postal service to all Canadians, rural and urban, individuals and businesses, in a secure and financially self-sustaining manner. That is why the government established the Canadian postal service charter in 2009, which set out its expectations regarding Canada Post service standards and related activities in providing postal services that meet the needs of Canadians.

An important aspect of the postal service charter is its commitment to universal service that ensures that Canadians in both urban and rural areas can send and receive letter mail and parcels within Canada and between Canada and elsewhere. As part of Canada Post's continued commitment to parcel delivery, parcel services to Canadians living in rural and northern communities not currently serviced by competing parcel delivery companies will have significantly wider access to, and the ability to return products from, Canada and around the world.This is crucial for the many rural and northern communities not currently served by private sector courier companies.

Canada Post's five-point action plan embraces the principle of reform without seeking any change to the Canadian Postal Service Charter. This plan is about giving Canadians the postal service they need in the emerging digital economy. Canada Post is quite aware of the changing face of the postal industry and has been preparing for a future with less mail and more parcels for a number of years.

The corporation has implemented measures to expand its parcel volume both through its postal operations and through its Purolator courier service. For example, changes to internal operations first begun in 2010 have made for a more efficient flow of parcels through the network to the customer. Canada Post has launched an aggressive plan to invest in replacing its aging processing infrastructure and delivery processes with more modern and cost-effective approaches driven by technology. The sorting equipment in place today is much faster and more accurate. From a delivery perspective, it has meant a massive shift toward motorization.

Canada Post will continue to leverage these investments. Doing so will further reduce the cost of processing the mail and will allow the company to better serve the growing parcel market and provide the services Canadians will need in the future.

In many urban areas, Canada Post has moved away from letter carriers delivering mail by foot to carriers who leave their depot every morning with a fuel-efficient van containing the mail and parcels for delivery on their route. Putting mail and parcels in one truck for delivery provides a better end-customer experience, especially in the parcel business, at a much lower cost to the corporation. These improvements will allow Canada Post to compete more effectively in the fast-paced and technology-driven global parcel market. All kinds of parcels are now flowing through Canada Post sorting plants, including items that depend on fast and accurate delivery, from health care products and gourmet food to live bees and baby chicks.

Canada Post realizes that the parcel business is highly competitive and it does not have the exclusive privilege to deliver parcels, as it does for letters. Therefore, the corporation has focused on providing a superior customer experience, recognizing the attachment Canadians have to their parcels. Canada Post has indicated a desire to expand en-route pickups and launch a comprehensive returns solution that will benefit e-commerce merchants and shoppers by improving inventory management, returns processes, and automatic billing.

An important component of Canada Post's proposed strategy is its intention to build upon its current strength in parcel delivery, which has demonstrated growth over the past few years thanks in large measure to the fast-growing market of online shoppers.

It is clear that Canadians have become enthusiastic online consumers. Statistics Canada reported in October 2012 that the value of orders placed online by Canadians reached $18.9 billion in 2012, up 24% from 2010 when the survey was last conducted. That is 24% in two years. More than half of Internet users, 56%, ordered goods or services online in 2012. Perhaps even more encouraging, most Internet shoppers, 82%, had placed an order from a company in Canada.

Canada Post's parcels line of business currently offers a range of domestic and international delivery services and is the largest player in the Canadian parcel market, with more than 50% market share. The corporation sees an unprecedented opportunity for additional growth linked to e-commerce as online business activity increases. Customers for parcel services include businesses, consumers of all sizes, governments, international postal administrations, and other delivery companies.

According to a recent report by the Conference Board of Canada, residential and small business customers indicated that their demand for parcel service will continue to rise with the spread of e-commerce.

Parcels are the fastest-growing line of service in the core Canada Post business. The corporation reports that overall growth in parcel volumes experienced a record-breaking holiday season, which runs between November 11 and January 4. Canada Post delivered 30 million parcels during this period, which was five million more than the holiday season last year. The corporation delivered more than one million parcels in a day, on 10 different days. Weekend delivery was also very successful. Canada Post employees delivered a total of 1.1 million parcels over the six weekends of the holiday season, with the highest number of deliveries occurring on the December 21–22 weekend. That is 317,000 deliveries.

The main reason behind this growth is that parcels are the one postal product that has seen growth driven by the digital revolution. Canada Post advises that its top-25 retail customers are making major e-commerce gains. January parcel volumes from these retailers shot up 35% compared to January of last year. This dramatic increase follows a highly successful holiday season in which year-over-year parcel volumes from this top-performing group grew by 50%.

It is very obvious that things and times change. They have certainly changed at Canada Post, and it has tried to adapt.

I have a question for the minister. The opposition is refusing to see that Canada Post is facing a new digital reality. Can the minister please explain why the status quo was not a possible solution to Canada Post's financial situation?