Madam Speaker, this is my first opportunity to present a speech to the House since the last election. I would like to take a moment to thank the people of Charleswood—St. James—Assiniboia for re-electing me, the people of Winnipeg for electing several more Conservative colleagues, and the people of Canada for electing a strong, stable majority government.
I would also like to thank the Prime Minister for the opportunity to serve as Minister of State for Transport.
In this role as minister of state, I am responsible for a number of crown corporations. Canada Post is one of them. Therefore, I am pleased to have the opportunity to address the importance of the legislation to resolve the labour dispute that we now see occurring between Canada Post and the Canadian Union of Postal Workers.
Canada Post and the urban component of the Canadian Union of Postal Workers, otherwise known as CUPW, have been negotiating since October 2010. I am sorry to note that despite some eight months of discussions, the parties have made little progress in their negotiations.
Today, I will be focusing my remarks on the impact of the work stoppage on Canadian postal consumers and businesses and on Canada Post, both today and in the future.
The current labour action is damaging to the Canadian economy and to many small businesses and individuals who rely on the postal service. Canada's economy is still in a fragile recovery. In fact, if we look around the world, including at the situation in some European countries and the geopolitical instability in the world, we realize there are many forces that create uncertainty. This is not a pleasant reality but it is reality, and a reality in which Canadians must live.
The work stoppage will only slow our economic recovery if it is allowed to continue. Therefore, the government needs to take action. To mitigate the damage, our government is enacting back to work legislation. The economic downturn of 2008 has had a severe effect on the Canadian economy and on many businesses, including Canada Post.
As a result of the recession and the increasing competition from other channels of communication, such as email and the Internet, Canada Post has experienced declines in its domestic letter volume, as well as in its domestic parcel and ad mail volumes. The decline in letter mail to postal addresses amounts to some 17% over the last five years. That is a significant number.
Also, as the Canadian population grows, the number of addresses and delivery points increases, and so does the cost per piece of delivered mail. In other words, it costs more to send mail due to the increase in the number of addresses.
There are many pension plans in Canada. Canada Post has a pension plan, but it has lost substantial value following the economic downturn. I understand that the loss in value of the plan was more than 19% between 2007 and the end of 2008.
Since 2008, Canada Post has reacted strongly to the threats posed by the economic downturn and the increased competition. Canada Post has been seeking ways to position itself for the future. It is hoping to improve its business sustainability by working with its employees to bring about greater efficiencies and more flexibility in the way work is carried out. It has cut its management ranks by 15% and has reduced other costs in a bid to become more efficient.
Like other competitive postal service providers around the world, Canada Post is trying to become even more efficient and competitive. It has started a major infrastructure renewal project across the country called postal transformation.
In fact, on the boundary of my riding in my home city of Winnipeg, I was fortunate to have the opportunity, with my colleague, the member for Yellowhead and former minister of state, to see the opening of a fantastic facility with state-of-the-art infrastructure. The efficiencies were evident. Canada Post is obviously planning for the future.
It is through this project that Canada Post will replace obsolete and outdated plants, equipment and processes. It will implement technology that other postal administrations around the world are using successfully. It will renovate its plants to ensure safer working conditions for its employees. Canada Post has stated that without subsidies from taxpayers, these measures will not be enough for it to continue to deliver affordable mail to Canadians.
Since the postal business is labour intensive, most of Canada Post's costs are labour related. For example, Canada Post's pension plan has liabilities that are more than twice the company's annual revenue. At the end of 2010, the company had an estimated pension solvency shortfall of more than $3.2 billion. Canada Post is committed to meeting its pension obligations. The money it spends ensuring that its pension plan will remain solvent is money not available to be spent on operations or modernization.
Our government's position on these negotiations is clear. We would prefer a negotiated settlement. We have been encouraging Canada Post and CUPW to come to a negotiated agreement. However, there is a third party in these negotiations that our government cannot ignore. That is why we are here today. Canadians are that third party. They are the shareholders and customers of the important postal services that Canada Post and its employees provide. As a crown corporation, if Canada Post's profitability drops and it cannot fund its pension plans, taxpayers will be left with the bill.
The union's demands during this labour dispute do not reflect many of the economic realities that Canada Post is facing. A drastic increase in costs at Canada Post will only end in taxpayers footing the bill.
There are those who believe that back to work legislation is not needed. They claim that the postal service is no longer an essential one, as it once was. While it is true that Canadians are increasingly using a growing number of other channels of communication, it is not simply a question of replacing one mode of communication with another. Many modes co-exist and the postal service will continue to remain important for the foreseeable future. For example, parcel and small packet delivery by Canada Post is critical to Canadian businesses and consumers and to the economy in general.
Canada Post is working toward building a sustainable future. In developing other services that will complement traditional mail, Canada Post is adapting. An example of this is Canada Post's retail network, one of the largest in the country. It is leveraging its retail network to provide services to Canadians. Canada Post has recently set up a new secure online service for comparison shopping and online advertising to allow consumers to quickly find the best deal on the right product and, of course, to ensure it is delivered at a reasonable price.
Nonetheless, traditional mail remains an important channel of communication for businesses and consumers alike. Many small businesses are dependent on mail for advertising and the delivery of parcels. While it is true that couriers also deliver parcels, at least in urban areas, none can fully compete with Canada Post.
Many businesses are turning to other modes of communication due to this work stoppage, so the longer this work stoppage goes on, the greater the damage is to Canada Post's prospects for the future.
For some firms there are no alternatives to Canada Post. These are small businesses without the ability or technology to conduct their business online. Some small businesses are using other courier companies to deliver their packages but are finding they have to pay more than they had to with Canada Post. This is affecting those small businesses' profitability and competitiveness.
Also, small businesses and charities still rely on Canada Post for billing purposes and fundraising. This work stoppage is drying up their cash flow. The cash flow of charities, small businesses and individuals is what we are really talking about, grassroots Canadians.
In short, mail is an important enabler of Canadian commerce which is now being threatened by this work stoppage. I would like to share a comment from a small business owner in my riding, who said:
The bill must pass immediately. This must end. Our customers are used to receiving hard copy invoices by mail and customers return payment by Canada Post. That is not happening. Couriers are much more expensive. We cannot pass on the cost in today's competitive environment.
We have cheques that were caught by the stoppage. It has cost us $12 to stop payment on those cheques to our suppliers and more to resend them by courier.
This situation must end. It is damaging small business. Canada Post must go back to work as soon as possible.
In referring to Canada Post, I believe the small business owner is talking about the corporate entity and its entire workforce.
I give that as one example from Winnipeg which highlights the impact the stoppage is having not only on Canada Post and its future, but also on the ability of Canadians to do their business.
One of the more remarkable things about the postal system is how firmly entrenched it is in all facets of Canadian society, so much so that we take it for granted or even ignore it, but we notice when for some reason the mail is not delivered.
While it is true the occasional letter or parcel may go astray over the years, Canada Post has consistently averaged on-time delivery 96% of the time, as verified by third parties. That is quite impressive considering that Canada Post processes some 40 million pieces of mail for 50 million residential and business addresses every business day. The stoppage is obviously preventing that from happening.
Let us look at the international picture for a moment. Among other major postal service providers, only the United States Postal Service is marginally cheaper than Canada Post. The United States Postal Service does this with a multi-billion dollar deficit in a country with more than 10 times the population of Canada.
As I stated, our reliance on the mail only becomes fully apparent when it does not get delivered. Although the dispute is between Canada Post and the urban component of CUPW, rural Canadians and businesses across the country are also being hurt. As a result of the work stoppage, rural mail is not being delivered. The vast majority of rural newspapers and magazines rely on Canada Post for delivery. Rural residents rely primarily on Canada Post to deliver items that would otherwise not be available through other distribution channels.
Even competing couriers have arrangements to have their packages delivered by Canada Post in rural and remote areas. As a result of the vastness and impressive network of delivery that Canada Post has across our country, couriers use Canada Post for what is described as the last mile of delivery outside of urban areas. Naturally, that last mile is not being completed at present because Canada Post is not functioning, which leads to the obvious conclusion that back to work legislation is needed.
Certain segments of the population, including seniors and shut-ins, also tend to rely heavily on Canada Post and have limited alternatives during a mail stoppage.
The labour dispute is impacting Canada Post's profitability and its continued ability to modernize without cost to taxpayers in the short and long term. I will give the House some numbers. During the rotating strikes, Canada Post estimated that mail volume had declined by 50% and that it had cost over $100 million by the time the lockout occurred.
I suspect the work stoppage will have permanent effects. Companies and consumers have found alternative options to postal service for bill payments and communication. The fact that this work stoppage has occurred leads people to accelerate their switch from traditional mail to e-billing or e-banking, for example. This loss of volume of work due to the stoppage may never return, as businesses and consumers move permanently to electronic alternatives.
At stake is the future of Canada Post and affordable and efficient mail service for all Canadians. Canada Post must modernize if it is to remain profitable. The impact of the work stoppage on Canada Post's bottom line has impacted all of us. The longer this situation continues, the worse the long-term effects will be.
CUPW and Canada Post have had many months to resolve their differences and negotiate a new collective agreement. They have not succeeded and there is no sign that they will succeed any time soon.
We expect Canada Post to provide quality postal service to Canadians on which Canadians can count. The government has introduced the Canadian postal service charter, and I thank the member for Yellowhead for his leadership in that. Through the service charter, the government has clearly expressed its expectations that Canada Post provide postal service to all Canadians, especially those in rural areas and those who are vulnerable.
This work stoppage could have a permanent impact on the quality of postal service across Canada for a long time. After eight months of failed negotiations, it is time to consider the needs of Canadians and consumers, businesses and taxpayers. It is time for back to work legislation. The time is now.
Canada Post is a critical part of not only the Canadian economy, but the Canadian way of life. By introducing back to work legislation, we are ensuring that the Canadian economy has the ability to recover from an economic downtown. We are ensuring that Canada Post has a future. We are ensuring that Canadians have the best possible postal service today and in the future. Let us get it done so Canadians can get their mail.
