Lawrence Toet

[National Defence, February 5th, 2014]

Mr. Speaker, after a decade of darkness from the previous Liberal government, our Conservative government is making unprecedented investments in our Canadian Armed Forces to ensure that our men and women in uniform have the equipment they need to get the job done.

Our government previously committed to leveraging that military spending to benefit Canadian companies while creating high-skilled, high-paying jobs right here at home.

Can the Minister of Public Works and Government Services please inform the House of what our government is doing to meet this commitment?

[Small Business, January 29th, 2014]

Mr. Speaker, as a former small business owner, I remember the stress of complying with burdensome and ineffective government regulations. We know the NDP's position on red tape is that more is better, and the only rules the leader of the third party wants to get rid of are those ones that protect our children from dangerous drugs.

Would the President of the Treasury Board please update the House, Canadians and small business owners on what the government is going to do to reduce the regulatory burden on Canadian businesses?

[Business of Supply, January 28th, 2014]

Mr. Speaker, as a business owner for over 25 years, I did that on an ongoing basis. We are always looking at our business model to see whether areas of it are running in a profitable way and whether we are delivering the services our clients need to the best of our ability. That is an ongoing thing. As a government, it is something we absolutely should be doing and must continue to do in all aspects.

[Business of Supply, January 28th, 2014]

Mr. Speaker, I actually have a piece here in my hand from Canada Post, which is its consultation with Canadians, which it had published. It shows the consultation process it went through.

We knew last summer that Canada Post was going through this process, and as members of Parliament every one of us had the ability to reach out to our constituents. I did reach out to my constituents and asked them to become part of the process. Everyone in the House had that opportunity and should have taken advantage of it.

[Business of Supply, January 28th, 2014]

Mr. Speaker, the member for Thunder Bay—Superior North brings forward the case of privatization, which was actually rejected by Canada Post when it went through its five-point plan, so his conjecture there is completely wrong. It did this through consultation with Canadians. I know for a fact that consultations occurred. In fact, in my riding, I sent out a mailer last summer to every person in my riding requesting that they get involved in the consultation process because I knew, obviously, it would have an effect on people in my riding. Many of them did respond to Canada Post and to me and gave feedback as to what they wanted to see Canada Post do, going forward.

There was great consultation that did occur on this, and I am happy to hear that Canada Post is continuing to talk to people about the various challenges and is working with them toward solutions.

[Business of Supply, January 28th, 2014]

Mr. Speaker, I am pleased to rise today to speak on this motion with respect to Canada Post.

In December 2013, Canada Post announced its five-point action plan to return the corporation to financial self-sustainability by 2019.

The need to transform postal administrations is not unique to Canada. Mail volumes are declining globally, according to the Universal Postal Union, the United Nations body that sets the rules for international mail exchanges, and particularly so in developed economies. This is happening as a result of the growth of electronic communications, such as email and smart phones, including texting and the rise of e-communications.

The vast majority of bills were paid by mail 10 years ago. Now bill payment has moved online and some companies are even charging a supplementary fee to continue bill delivery by mail.

Personal letters are also on the way out, with letter writing become something of the past. Gone are the days when mail was delivered many times per day, as it was in the United Kingdom, for example. Cars have since replaced horses, computers have since replaced mechanical calculators, and email and texting are steadily replacing what many Canadians refer to as snail mail.

Greeting card companies are also experiencing a similar downturn in business as electronic birthday cards are becoming more popular. In the United States, where roughly 40% of the entire world's mail is delivered, the U.S. Government Accountability Office has estimated that total mail volume could fall by 60% by 2020 compared to peak 2006 levels. In a study undertaken by that organization in 2012, it also found that the United States Postal Service had excess processing capacity. This was despite the fact that the U.S. Postal Service has made significant cuts to its sorting plants and operations since 2006. The same study predicts that the U.S. Postal Service will reach $21 billion in net losses by 2016.

In the United Kingdom, until recently the Royal Mail operated at a loss. That was as a result of declining mail volumes and the deregulation of its postal market in 2006. This deregulation opened the door to foreign-based mail companies, which began to compete in the most lucrative, low-cost, urban business mail sector. These companies offered cheaper rates than the Royal Mail, thereby putting additional pressures on the Royal Mail's revenues.

In much of northern Europe, such as in the Netherlands and Scandinavia, where Internet penetration has exceeded 90%, the percent of mail volume decline has hit double digits.

What is the rest of the world doing about declining postal business?

Each country has a unique postal environment, including geography, population density, and climate. Not surprisingly, given national and, to some extent, political differences, each country is pursuing its own approach to the downturn in mail volumes.

In the United States, a bill was introduced in Congress in July 2013. If passed, the postal reform act of 2013 would authorize the United States Postal Service to end door-to-door mail delivery and implement a five-day a week delivery schedule.

According to the U.S. Postal Service, about 30 million Americans, or less than 10% of the population, get their mail directly to their front door at a yearly cost to the postal service of about $353 per household. In comparison, delivery to cluster mailboxes, which are similar to Canada Post's community mailboxes, costs about $160 per address per year. Since few Americans spend more than a fraction of the delivery cost per year on stamps, the goal is to cut the cost of delivery as much as possible, particularly since the U.S. Postal Service has a mandate to break even, something it has not achieved in years.

If passed, the postal reform act of 2013 would also remove the current no lay-off clause from future postal worker collective agreements.

Given that the legislation has not yet passed, the U.S. Postal Service is taking steps within its power to reduce costs. The U.S. Postal Service has now converted more than 6,000 of its post offices to reduced hour operations, which it hopes will save $500 million a year.

In the United Kingdom, the government has decided to privatize the Royal Mail. In 2011, the U.K. government passed the Postal Services Act that set the stage for the privatization of the Royal Mail, albeit the latter will still be required to continue fulfilling the universal postal service. Recognizing that the privatization could not be successfully carried out as long as the company was running at a loss, the United Kingdom increased postage stamp rates in 2012. To increase revenues, rates were increased by 30% for first class mail and 36% for second class mail. This translates into a cost of over a dollar at current exchange rates for first class mail.

The U.K. government also assumed the assets of the Royal Mail's pension regime, representing 28 billion pounds Sterling, or approximately $45 billion Canadian dollars. It also assumed the pension regime liabilities amounting to 8.4 billion pounds, or around $14 billion more than the asset amount. This allowed the Royal Mail to make profits in 2011 and 2012. In 2012, the post offices were spun off into a separate limited company that received almost $2 billion in subsidies from the government.

Canada Post's five-point action plan avoids the heavy subsidies that governments of other countries such as the United Kingdom have provided their postal systems.

Deutsche Post was also privatized, but Germany took a very different approach than Great Britain. The German government gave Deutsche Post the freedom to expand its business while continuing to operate in a protected German postal market. This market protection occurred before Deutsche Post went public in 2000 and for some years thereafter. In 1998, Deutsche Post began acquiring DHL and has since consolidated its leadership in the logistics and freight business through subsequent acquisitions of other companies. The protection afforded to an expanding Deutsche Post led it to becoming the world's largest courier company.

In fact, mail delivery makes up less than 20% of Deutsche Post's DHL business. Recognizing the advent of electronic communications, Deutsche Post was one of the pioneers of hybrid mail. Mail can be sent electronically through email and then delivered in physical form. The reverse scenario is also possible, where physical mail is scanned, sent electronically and then printed off using a handy Deutsche Post printing device. Legal documents are often mailed using this approach.

Other postal services have also diversified their business lines to offset shrinking mail revenues. Australia Post, for example, has diversified its services by selling licenses to post offices, which also sell electronics, travel items, books, phones, et cetera. This diversification has occurred in response to the declining mail revenues. Last year, Australia Post lost a record $187 million Australian dollars on its traditional mail business. Australia Post just conducted a survey to determine whether customers would prefer to have their mail delivered three times a week or pay an annual $30 fee for daily delivery.

Canada is a vast country. In fact, it is the largest of the G7 countries. Although it may only be 100 square kilometres bigger than the United States, it is almost 40 times the size of the United Kingdom. From a population density perspective, the United States has over 10 times the population density of Canada and Japan has over 100 times the population density of Canada, yet Canada's postal service is able to move Canadian mail at competitive prices over vast distances in our country, which at times experiences difficult weather. Other countries do not face these same challenges.

Rather than having Canada Post expand its business activities into areas for which it is not well suited, a more important question that Canada Post has considered is what sort of postal services do Canadians need? Canada Post has responded to the challenge of declining mail volumes. The result is Canada Post's five-point action plan announced in December 2013.

This plan is within the parameters of the Canadian postal service charter announced by the government in 2009. While it is easy to criticize Canada Post for taking steps to ensure the survival of Canada's postal system while meeting the needs of Canada's postal consumers, the alternative is the threat of a failing postal service provider, or a postal service that is no longer economically viable and operates with huge debts that ultimately will have to be borne by Canadian taxpayers.

While it is true that mail volumes are in decline, it is also true that mail will be around for some time. Canada depends on Canada Post to deliver the mail and this government expects Canada Post to continue to provide this service for years to come while ensuring sound fiscal management.

[Situation in Ukraine, January 27th, 2014]

Mr. Speaker, I think we are already seeing it. In my speech, I referred to the fact that we have a small group of farmers who already, with the help they are getting, have had their incomes increased by over 30%. We are just at the beginning stage. This is a program that started just a year ago.

I think there is great opportunity for growth. We want to continue to see that happen. As a government, we will continue to foster those relationships and to foster those groups that are helping there to grow the economy, especially in the agricultural sector.

[Situation in Ukraine, January 27th, 2014]

Mr. Speaker, I remember standing outside with my colleague from Winnipeg North and so many of our friends from the Ukraine on that Friday in Winnipeg. It was a very cold night. That underlined to us how important the show of support was to the people there.

As a government, we will continue to go forward. It is important that whatever we do is done in a very cohesive fashion. It is important that we do not go forward arbitrarily but continue to work with our allies across Europe and the United States to make sure that what we do bring forward is targeted.

We have already seen some of that happen today. We saw that the government of the Ukraine is starting to understand that the world is not only watching but getting ready to act. The government is starting to move back on some of the things it has done. We have some indication of movement. I believe that movement is because it knows the world is prepared to act. As the Canadian government, we are very close to preparing to act.

[Situation in Ukraine, January 27th, 2014]

Mr. Speaker, at this time we would not see that government as one we would want to negotiate with. It is going through a process with the people in its country. That is where our focus would be today. We want to be supportive of the people of the Ukraine. We want to make sure that the people of the Ukraine are not affected. That is why I brought up the economic supports we have been giving to the people of the Ukraine over the years. We want to make sure that the economic growth in the Ukraine continues and that we do not see the people suffering.

We have heard about sanctions from many of the members tonight. We want to make sure that any sanctions brought forward are very targeted and done in a cohesive manner. We do not want a situation where some of the great progress that has been made over the years is set back by having sanctions that would affect the people of Ukraine. That is very important to us as a government.

[Situation in Ukraine, January 27th, 2014]

Mr. Speaker, I truly do appreciate the opportunity to participate in this debate tonight along with many of my colleagues in the House. As so many of them have indicated tonight, I have also been following the situation in Ukraine very closely over the past number of months. I can say that our government is deeply disappointed with the Ukrainian government's decision to suspend signing of the association agreement and the deep and comprehensive free trade area with the European Union. Like hundreds of thousands of Ukrainian citizens, we believe the decision to not sign the association agreement represents a lost opportunity. We stand with all Ukrainians who are fighting for their beliefs in a democratic European Ukraine, and we believe that Ukraine's best hope for democracy and economic prosperity lies in closer alignment with European and North American norms and institutions.

More disturbing is the shady way in which the new laws were passed by the Ukrainian parliament on January 16. If they stand, these new laws will place serious limitations on the human rights and civil liberties of Ukrainians.

In particular, we are very concerned about a new measure that would define Ukrainian non-governmental or civil society organizations as “foreign agents” if they receive money or property from foreign countries and participate in any so-called political activities. The new law would require such foreign agents to register with the government and to provide monthly reports on their activities and income. They would also be subject to different tax treatments on these foreign funds. These changes could be a serious hindrance to the economic prosperity of the Ukrainian people and would have a serious impact on Canada's development assistance work in the Ukraine.

As a way of providing some context for this debate, I would like to take a few moments to tell members about Canada's work to help Ukraine achieve economic prosperity. As members know, the historic ties between our two nations extend back through generations of Ukrainian migration to Canada. For more than 120 years, Ukrainian-born Canadians have contributed to the social, economic and political fabric of Canada. Today, Ukrainians make up almost four per cent of the total Canadian population. I know my riding of Elmwood—Transcona is very reflective of this.

Economically, Canada and Ukraine enjoy positive commercial relationships, with two-way trade that totalled $313.5 million in 2012. Over the years, we have developed a close bilateral relationship, a solid economic partnership, and strong people-to-people ties. In 1991, Canada was the first western nation to recognize Ukraine's independence. Since then, much of our development assistance in Ukraine has focused on increasing economic opportunities for Ukrainians in a strengthened democracy.

Over the years, Canadian development assistance investments in private-sector development and governance in Ukraine have contributed to the country's transition from a centrally planned system toward a free-market democratic model. However, Ukraine was an integral part of the former Soviet Union, and as such its economic transition has been much slower and more difficult. To build resilience and achieve broad-based prosperity, Ukraine must diversify and grow its real economy, especially through developing its small and medium-enterprise sector, which is far smaller than in other European countries. Stimulating the growth of small and medium enterprises will also help to expand and strengthen the middle class. We know from experience that a healthy, civically engaged middle class and small-business sector will help to nurture a well-functioning democracy. Given its rich natural resources, reasonable labour costs and large and well-educated population, Ukraine has excellent economic potential. However, it will face challenges in becoming competitive. If concluded, planned free trade agreements with Europe and Canada will help to provide a road map to greater competitiveness within a predictable rules-based framework.

To increase rates of economic growth in Ukraine, Canada is focusing on three areas of intervention.

The first area is to strengthen the investment climate in a sustainable way by building economic foundations. In practical terms, this means improving the capacity of all levels of government, including local governments, to deliver on the basic needs of citizens and create a supportive framework for local business growth and trade and investment. That means providing security and a level playing field for small and medium enterprises, from fair and transparent regulations, to independent and predictable application of the rule of law.

The second area of focus is growing businesses, especially those that are micro, small, and medium-sized firms, including those in the agricultural sector. Our goal is to help make these businesses more sustainable and competitive. We would do this by helping entrepreneurs access the things we take for granted in Canada, such as business networks, value chains, productivity-enhancing technology, insurance and business financing.

The third area of focus, and one I believe in strongly for a number of reasons, is investing in people, especially women and youth. Our objective is to build a skilled, trained workforce of women and men who can seize opportunities in a rapidly expanding labour market that is fuelled by the needs of local and international employers.

Careful investment of development assistance in these areas will lead to increased employment opportunities and enhanced business productivity and profitability in Ukraine, resulting in rising household incomes and reduced poverty over the long term.

This is also in Canada's interest. As Ukraine's economy continues to grow, so will the economic ties between our two countries. Canada's development program has contributed significantly to advancing Ukraine's sustainable economic growth. Agriculture is a key growth sector for the Ukraine.

Canadian support has helped to increase the competitiveness of smallholder fruit, vegetable, and dairy farmers who have invested in improved technology and are working together to market higher-value, higher-quality products demanded by the marketplace.

With help from Canada and specialized technical assistance from Israel, smallholder horticulture farmers in southern Ukraine have sold more than 12,000 tons of produce, for over $12 million. Most importantly, they have increased their household income by over 30% since the start of this project.

Agricultural insurance is an essential component of a modern agricultural economy. It allows farmers to invest with confidence and for banks to lend to farmers with confidence. With support from Canada, Ukraine has implemented a new agricultural insurance system based on international best practices. At the start of 2013, seven Ukrainian insurance companies were selling the 14 products developed by this project, resulting in more than 1,000 insurance contracts covering a total of 1.929 million hectares of crop. The crop area that is covered expands every day.

Canada is also helping to create partnerships between Canadian and Ukrainian cities to help them modernize their approach to local economic development planning. The Federation of Canadian Municipalities has worked with municipal partners in 12 cities to develop and implement municipal strategic development plans. These plans have helped to operationalize 15 demonstration projects, in tourism development, city branding and marketing, and business centre creation.

As part of the implementation of the cities' strategic plans, an additional 45 local economic development projects were launched. Cities were able to attract $80 million in investments from private and donor sectors, thanks to a training program for city officials on how to promote cities' competitive advantages.

We are working to improve the planning and delivery of services that support economic growth at the municipal level. We have also helped government institutions at the regional level to formulate and implement reform-oriented policies that are in the public interest and adhere to international best practices. We are assisting with the development of a national demand-driven vocational skills training systems across the country.

Each of these initiatives will help to increase broad-based economic growth in Ukraine. We are doing these things because we believe in Ukraine and its people.

As I mentioned earlier, we are very concerned that our partners not be deemed foreign agents. That would subject them to an additional taxation and reporting burden, limiting their ability to achieve meaningful results for the Ukrainian people. It may even force some of them to close their shops.

We have strong historic ties with Ukraine. We have forged strong alliances out of a shared understanding of Ukraine's unique challenges, as well as a common desire to see the country overcome them.

We look forward to continuing with that work and to helping Ukraine and Ukrainians achieve the freedom and prosperity they not only yearn for but that they deserve. We remain hopeful that the current crisis will come to a peaceful settlement and that Ukraine will begin to get its economy back on track.

In summary, Canada is deeply concerned about the deterioration of democracy and rule of law in Ukraine. Canada remains committed to helping Ukraine by working to improve economic opportunities for Ukrainians in a strengthened democracy.

Canadian assistance is also focused on facilitative judicial and civil service reforms. Canada's support for small and medium enterprise growth is helping to develop a middle class in the Ukraine, which is essential for ensuring a sustainable democratic transition. We are monitoring the situation very closely and will continue to deliver assistance as appropriate. Canada will continue to stand by Ukrainians who are expressing their concern with the recent direction their government has undertaken.