Mr. Speaker, I was content to have my colleague finish his remarks, because it is a momentous moment when myself and the parliamentary secretary to the Minister of Public Services and Procurement and Accessibility actually agree on an item, this being one of them.
I am rising today on today's Motion No. 166 to establish a committee to study and propose postal banking. It is not to study it; it is to actually study and propose, putting the cart before the horse. I have a lot of problems with this motion, the largest of which is that I seem to be the party's point person on Canada Post and I would be afraid I would be stuck on such a committee if it actually went ahead.
This motion is well intentioned, but it is proposing an eighties solution to a sixties problem. A lot of this postal banking push, of course, comes from The Leap Manifesto, “delivering community power”. It is quite odd, watching the NDP carry the postal workers' water here, mostly because postal workers basically abandoned the NDP in the last election to support the Liberals and their promise to restore door-to-door delivery. It is also ironic that we are discussing Motion No. 166, postal banking on a day where the postal workers are starting rotating strikes across the country.
How did we get here, with Canada Post? My colleagues across the way promised a return to door-to-door delivery if they got elected. Of course, the Liberals would say that that is not what they promised or that is not what they intended. Actually we heard, during our Canada Post tour, the member of Parliament for Charlottetown testify that that was what the government meant, that the Liberals meant a complete return to door-to-door service. He said that to say otherwise would be lying. Interesting.
What happened? The Liberals did get elected but, oops, they found that Canada Post was in deep trouble, door-to-door delivery was dropping, there was a massively underfunded pension, and the only thing keeping Canada Post marginally in the black was the changes Canada Post made with its five points, including a change to community mailboxes, raising the price of stamps and a few other other issues.
What does the Liberal government do whenever there is a crisis? It proposes a study. The government struck a task force, and the task force came out with a report called “Canada Post in the digital age”. Here is another ironic thing. Minister Foote, when she struck the committee, directed the task force to find a way to justify postal banking in its study. We found this out through discussions, interviews and ATIPs.
The four-person task force ignored the political interference and did its job. What it found with Canada Post was quite worrying. It found, from 2016, projected forward to 2026, that Canada Post would be net $3.4 billion cash in the hole, and would be losing three-quarters of a billion dollars every single year. These are not numbers pulled out of the air by the task force. These are audited numbers from a major, well-respected, international auditing firm. This loss of three-quarters of a billion dollars every year includes about a quarter million dollars to $400 million a year it is saving from the community mailbox conversion.
The big problem is door-to-delivery is dropping and is being replaced by rush from Amazon parcel delivery. The problem with that is the profit on door-to-door delivery is about 70 cents on the dollar. For parcel delivery, it is marginal. It is cutthroat because of competition.
On top of the fact that Canada Post's main profit driver is dropping and the heavy cost of parcel delivery is rising, we have an $8-billion unfunded pension liability. We know about the Sears issue. We know about Nortel. Double that, and it would still not dent the size of the Canada Post pension problem. That is even with Canada Post being on a pension holiday, not having to address this with added money for the last four years, and it is still on that pension holiday.
What did the task force come up with? It basically came up with something the Liberals did not want to hear. It said that the government should stick to the original five-point plan that Canada Post had before, continue with the mailbox conversions, convert corporate stores to franchise stores, not in the rural areas but in the big cities. There is a Canada Post-owned store about 10 minutes from where I live, and between where I live and that 10-minute drive, there are over 30 franchise stores. They are talking about converting those to franchises as well.
What did the report say on postal banking?
The report says:
According to experts and stakeholders, Canada's financial environment is not conducive to the establishment and operation of full-scale postal banking. Postal banking is not likely to succeed in Canada as a result of the existence of a mature and competitive banking environment, as well as the extensive market coverage of...credit unions....Canadians in all economic circumstances in all regions of Canada already have access to one of the best, most inclusive financial systems in the world.
In Canada 99% of its population have bank accounts. Canada in the developed world has the highest number of bank accounts among those who live in the below 40% income percentile. Therefore, we are very well served. We do not get great service, but we are well served by the banking industry.
The report continued, “...postal bank today would be entering a highly competitive market and an expensive endeavour requiring significant investments in infrastructure, IT, security, acquiring new skill sets....”
We are thinking that the same people who came up with Phoenix and Shared Services is going to somehow roll out the banking system from Canada Post. “Postal banking is unlikely to generate a profit.... Furthermore, having a government entity competing in the financial sector would contravene Canada's trade agreements”. Payday loan services “require customers to have bank accounts”. Adding a postal bank is not going to provide any alternative.
In light of the conclusive report from the task force, the Liberals said let us do another study, so they sent the operations committee out on the road and we travelled from Surrey to St. John's learning about Canada Post and postal banking. In case anyone thinks it is lavish travel, we were on a plane so small that for the seven of us that my colleague from St. John's East had to sit on the toilet in the plane, although it did have seatbelts and I am sure he could have used the seat as a life support.
From the experts we heard on the road, payday loans is a dying industry and most are within blocks of a bank anyway, so doing postal banking is not going to do anything with that. Some postal outlets get as few as two visitors a day, so it is not exactly a thriving business we pay to the bank. Also, 99% of Canadians have bank accounts. Bank outlets are growing in the country and one-third are in rural towns already. Credit unions are thriving with 10 million members. We have the highest number of ATMs per capita in the world, so Canadians are well served.
At the meetings with postal workers, CUPW stacked our meetings to give their side of the story and they talked about other countries having postal banking. Every single one except New Zealand that had postal banking had privatized their postal services. We asked if they wanted to privatize it and the answer was of course not. We discussed payday loans and asked how we would do it. Payday loans have predatory high costs. The answer was to do free chequing. How would we make money to support Canada Post with free chequing? They did not know. What would happen the first time we lend money to Johnny Lunchbox and we have to repossess his truck? Oh, we will forget the loan. What happens when grandma does not pay her mortgage? Well, we would just forgive her loan. We mentioned that setting up a bank is going to be very expensive, how would we capitalize the bank? Would we put forward the pension from the postal workers? Well, of course not, taxpayers will do that.
We see we have a situation where Canada Post is in a dire situation financially. We recognize that, but having a postal bank run basically on unicorns and fairy dust is not going to change things. We have a very robust, very competitive banking system that will be near impossible for outside, U.S. competition to establish instead of a bricks-and-mortar banking system in Canada, much less a system by Canada Post, which does not have the expertise. Perhaps as The Leap Manifesto says, we will put charging stations at every post office. I imagine some guy pulls up in his Tesla, plugs in his Tesla, walks into Canada Post, buys some stamps to send a Christmas card to his mom and then takes out a $2-billion derivative trade. It is not going to happen.
What we need to address Canada Post is action from the government, not sticking its head in the sand and hoping the problem goes away until the next election. We need action to address its pension issues. We need action as proposed by a task force, real day action, not actions to address issues from the sixties or issues from perhaps some fantasy land.