[Recorded by Electronic Apparatus]
Tuesday, June 18, 1996
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[Translation]
The Chair: I call the meeting to order.
Canada Post's greatest asset is its workforce which is comprised of some 63,000 employees. Any discussion on the future of Canada Post is also a discussion on the future of its employees.
As Mr. Crête suggested, we have asked them to be with us today to present their point of view. I would like to welcome you and I will turn the floor over to you.
We have two groups with us here, and I will ask them to introduce themselves.
Mr. Bernard Choquette (Director, Canadian Association of Postmasters and Assistants (Quebec Section)): Thank you. We represent the Quebec section of the CAPA. My name is Bernard Choquette and I am the Director. I'm accompanied by Ms Jacinthe Turcotte, who is vice-president of the same section.
First of all, I would like to thank you, on behalf of the CAPA, for having invited us here, and for allowing us to express our point of view on this issue.
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As you know, our comments today deal with the protection of our postal service, especially in rural communities.
In fact, the Canadian Association of Postmasters and Assistants represents all rural post office employees. Our Quebec section represents 3,000 workers, if we also count the number of casual employees.
More than 86% of them are women. These employees are located throughout Quebec, whether it be in Abitibi, the Gaspé Peninsula, in the Eastern Townships or in the Outaouais Region. They work conscientiously to serve the people of these regions.
The greatest concern that CAPA has had to face was the period of rationalization Canada Post Corporation undertook in 1986. At that time, we lost some 350 members when 235 regional post offices were closed down.
At the time, we denounced the fact that attrition was the sole criteria used by the Corporation to justify the closure of these post offices. We found these methods somewhat offhand. We could not understand why the government would threaten such an important service both in our eyes and in those of many people.
In view of this plan, we noted that municipalities would lose their representation and their contact with the government at the federal level. At the same time, the municipalities were losing a good part of their identity. Not only were we losing members, but we were also in a position to understand what people in these communities were experiencing; we were very troubled by the departure of the postmaster who was at the heart of the service provided to these people.
Following the opposition movements that arose in Quebec, including the one in the municipality of Saint-Clément, we decided to conduct a survey. As far as we knew, the Corporation had never conducted any impact studies on the consequences of these closures. We looked into the socio-economic impact of closing post offices in rural communities.
We asked Mr. Clermont Dugas of the University of Quebec at Rimouski to prepare the study, without guiding him in his approach. No parameters were imposed. We were willing to face the results, regardless of what they revealed.
We were concerned about knowing the real effects of the policy implemented at the time. For us, the results of this study were very conclusive: they confirmed that our concerns were warranted.
The general thrust of the study revealed major disparities in the delivery of basic service which was considered universal and the appearance of concerns and a profound malaise with respect to the quality of public services provided in rural communities.
Several saw this as the result of a contemptuous attitude taken by political authorities in their regard. The rationalization policy created new financial obligations that would have to be borne by several municipalities. Moreover, these obligations were imposed on the municipalities which were the poorest and the most lacking in terms of collective services.
The procedure avoided the rules of democracy. The people concerned were at the mercy of unelected officials who blindly applied a uniform approach, without consideration for the official, democratic protests that met these initiatives.
We would like to point out that a report of the Standing Committee on Government Operations tabled in 1987 reached more or less the same conclusions as Mr. Clermont Dugas did in his study. The results of the committee presided over by Mr. Felix Holtmann showed that the money that the Corporation could potentially save by closing post offices in rural areas was minimal and that the Corporation could not solve its financial problems by closing post offices and changing postal service.
In conclusion, we will quote comments made by Mr. Ouellet, who was the minister responsible for Canada Post Corporation at the time. These comments still hold true today.
- The Postmaster often serves as a resource person for many people in the community. The
federal government is present throughout Canada and the post office remains a familiar place
which gives government a human dimension.
Ms Jacinthe Turcotte (Vice-President, Canadian Association of Postmasters and Assistants (Quebec Section)): I would simply like to emphasize some of the points raised by Mr. Choquette, namely the presence of the government.
Throughout rural regions in Canada, the members of CAPA establish a federal link which is greatly appreciated by the communities.
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Proud of the jobs we do, we often go beyond our mandate of delivering postal services by helping certain clients who have various forms to fill out or providing the same clients with information on government services.
The local post office is often the only federal government service offered in rural municipalities.
Since Canada Post Corporation started to rationalize and privatize its operations, in particular under the Conservative government, CAPA has always wanted to show that closing rural post offices did not make any sense and that Canada Post Corporation would lose out if it continued in this way.
The last few years have shown that in several places where postal franchises were set up, the service provided has deteriorated and even disappeared completely in certain cases.
How many municipalities have seen franchise holders abandon the postal services offered in their stores? How many municipalities have seen their postal franchises change addresses? How many municipalities have had to take responsibility themselves for operating the franchises, for lack of any private takers? How many municipalities have seen postal services completely disappear as a result of privatization? Those are a number of questions that could be answered by dozens of municipalities in Quebec which have to live with this state of affairs.
These municipalities have noted that their citizens, businesses, SMEs and self-employed workers are no longer entitled to services similar to those offered in other municipalities.
All of these people are Canadian citizens, who pay taxes like everyone else; in our view, postal service in Canada must be universal, from sea to sea.
This situation results in grave negative consequences for the economic health of the affected municipalities. Moreover, dozens of resolutions supporting the steps we've taken have been sent in to us by rural municipalities which are served by postal franchises or which simply no longer have a retail postal outlet.
In light of these facts, we applauded the current government when it decided to impose a moratorium on the closure of rural post offices. To a certain extent, this concrete step proved that those of us who had waged a fierce battle to maintain this essential service were right.
We believe that the current service and responsibilities must remain and we are convinced that Canada Post Corporation should pursue new opportunities because the network, the resources and the necessary skills are already in place.
When we say that we're in a position to broaden our horizons, our goal is for Canada Post Corporation to remain self-financing.
To do this, we at CAPA have always supported projects designed to add to the services offered by Canada Post Corporation.
With the wonderful distribution network that CPC has, it is certain that partnerships are an avenue that must be explored. For example, we hope that experiments similar to those tried last year with the National Bank will be proposed.
The National Bank used Canada Post Corporation outlets during its RRSP campaign in 1995. The project proved positive for both parties, and we are convinced that this type of project is viable for all Canada Post Corporation stakeholders.
In conclusion, we are aware that postal service must adjust to technological changes. With the arrival of the electronic highway, the oldest service in the world will adjust, just as it has over the decades.
There will always be an important place for postal service throughout the world.
[English]
The Chair: Merci.
Mr. Clark.
Mr. Dale Clark (National Vice-President, Canadian Union of Postal Workers): Thank you very much. My name is Dale Clark. I'm the national vice-president of the Canadian Union of Postal Workers. Accompanying me is Geoff Bickerton, who is our director of research.
We're pleased to be invited to this committee to talk to you about our views on postal service. We have sent the clerk our presentation that we prepared for the mandate review that is being done by Mr. Radwanski, for your information. We also enclosed an executive summary for you.
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We represent approximately 58,000 employees of Canada Post. We're the largest organization representing workers there. About 41,000 are regular employees, full- and part-time. There are about 9,000 casual workers, most of whom actually work full-time. There are also 8,000 ad mail workers, most of whom work two or three days a week.
Our members have an enormous stake in Canada Post, obviously because it's our livelihood, but also because we believe that we have played a major role in the creation of Canada Post as it now exists. We were very much involved in the creation of the crown corporation in 1981.
As I know you are aware, the act that made Canada Post a crown corporation was adopted by all the parties at the time and was supported by the unions. Since then, we've consistently fought to ensure that the post office management acted to implement the objectives that are in the mandate of Canada Post - section 5(2) of the act. Those three objectives were to improve service, to improve labour relations, and to achieve financial self-sufficiency. Any discussion about Canada Post I think has to look at whether or not it has achieved those mandates set out in 1981.
In terms of service, I think there are mixed results. On-time delivery has improved. However, from our view there has been a denial of basic service to hundreds of thousands of Canadians, due to lack of door-to-door delivery by letter carrier. We've also seen retail service cut back and many communities have lost post offices. That has now been stopped, due to the moratorium put in place by the current government, but many communities did lose their post offices.
In terms of labour relations, the record speaks for itself. Under the Conservatives, the post office was instructed very clearly to try to destroy the unions at Canada Post. Every bargaining unit was forced to strike during 1987 and 1988. Canada Post's own figures show that the post office lost over $190 million in 1987 and over $100 million in 1991 due to their strategy of trying to use strike-breakers and trying to operate a parallel mail system.
However, since then we have negotiated signed collective agreements. They've not contained very good wage settlements for our membership, but we have negotiated some important improvements, such as a special committee that was designed to create jobs and improve service. In terms of our long-term future as workers, and for the post office, we think those are important gains we made.
As for finances, we believe Canada Post is clearly a success story. In 1981, as it approached becoming a crown corporation, it posted losses of $500 million. This year it has about a $28 million profit, and projections of further profit. We think that's a success story. It has achieved those surpluses with the second-lowest postage rates in the world, and we think that's a success story also.
What we have to look at, as Canadian people, is where do we go from here? We are well along the way to making Canada Post into a serious public sector success story, and we think this country needs one. We know that makes some people nervous; they do not wish to see a public service success story. The question we must ask ourselves is what do we do with a crown corporation, as Canadians, when it's doing well? We believe the thing we don't do is to sell it off when it's doing well. That makes no sense from a business point of view. It makes no sense from the point of view of service to the Canadian people. Instead, what we want to do, and what we are urging the government to do, is help the corporation go that extra distance, make it a success so that it will be there to provide better service.
We're doing this because we realize that even though there have been record volumes of regular mail this year, in the future there is going to be more reliance on electronic communications, whether we like it or not. We can't stop the future. We are addressing this in a number of ways. We've been pushing Canada Post to become more involved in electronic communications, and we've been having some results. We're very pleased that we've just recently reached an agreement with Canada Post that in late July, or early August at the latest, Canada Post will begin to offer Internet services, on a trial basis, in Niagara Falls and St. Catharines, Ontario, in the post office. This is the first post office in the world to offer public access to the information highway, and we believe that's very important.
We've also supported the conversion of letter carriers on foot into motorized mail couriers. This enables letter carriers to deliver parcels and letters at the same time, which helps the growing number of small businesses in this country, provides employment for our membership, and allows Canada Post to expand.
We've also been supporting an experiment called the customer contact program, in which these motorized letter carriers talk to small businesses about the services that Canada Post can provide them. This will become increasingly important as more businesses are located in the home.
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Also, for years we have been promoting increased services and hours of services at postal wickets. Again, we have been making some progress here. We are now have experiments going on in Montreal and Quebec City with extended hours.
Finally, we have worked with management to contract in work where it is economical. Under the Conservatives there was a big push to contract out maintenance, delivery and retail services regardless of whether it was cost effective or not. So far we've had three experiments and they've all been in Edmonton. We contracted back the maintenance operations in a big plant and we contracted out the truck shuttles in two locations, one to depots, and also between the airport and the main post office. Each of these has been evaluated by Price Waterhouse and we have the studies with us. We can provide them to the committee if they wish.
In each case the post office was saving money by contracting in the work. The same is true in retail outlets. I think we all remember that the Conservatives said franchising would produce a lot of benefits. That's still being debated. I know it's been debated in the House of Commons, and it's debated by the public using them, but the reality was that even the post office never claimed that they saved any money. That's not been the claim of the post office.
What we saw was a net reduction in retail outlets, even including the franchises. What happened was that many communities lost their post office altogether. Now that Canada Post wants to get into expanding services, including electronic services and government services, it has fewer outlets where it can have regular trained staff to provide that. We don't think that's the way to go.
We are hoping that this committee does recognize the importance of Canada Post as a public sector service. The current five-year plan of Canada Post calls for the post office to pay almost$300 million in dividends to the government. We believe that's a mistake. We believe this surplus should be used to reinvest in services to the public.
The current mandate as it exists under the legislation does not say that it should provide dividends to the government or to anybody. It talks about financial self-sufficiency. It talks about improving service. We believe the place to start is in the expansion of door-to-door delivery.
In the five-year plan that Canada Post has provided, they call for Canada Post to pay $88 million in dividends in the year 2001. That money could be used to pay the entire cost of providing door-to-door delivery to over one million Canadians who currently get community mailboxes. We believe that would result in improved services and jobs being created in every community of 2,000 or more points of call. We believe both are equally important; improving services is important but also creating jobs in this economy is essential - and decent jobs, jobs with some security.
This is also exactly the direction suggested by the postal services review committee that was chaired by Alan Marchment in 1989 and is also in line with the Liberal minority report to the Standing Committee on Consumer and Corporate Affairs at the same time. We'd like to ask you to look at some of the recommendations the Liberal minority report made. They talked about no dividends being paid; that wasn't the direction they wanted the corporation to go. They talked about expansion of retail services and they shared very similar views to us on the expansion of door-to-door delivery. We think those things are just as valid if not more so at this time.
In conclusion, again we'd like to thank you for the opportunity to address you and to hopefully answer any of your questions, but we believe despite the efforts of a previous government that tried to undermine the success of the public sector, Canada Post has come a long way. With the support of this government, Canada Post could become the best post office in the world. Thank you very much for your time.
The Chair: Thank you, Mr. Clark, and with that we'll begin our round of questioning.
[Translation]
Mr. Crête, you have the floor.
Mr. Crête (Kamouraska - Rivière-du-Loup): Thank you for your presentations. It is interesting to hear your points of view, since, as I was saying before the meeting, we are preparing to study the recommendations of the Radwanski report. So it is important for us to hear all points of view.
Both of your presentations lead me to a rather general question which I would like both groups to answer one after the other. At present, there are three potential models for the future of postal service in Canada. The first would be total privatization with full competition; in other words, we would decide to let anyone enter the postal service market and we would let UPS and other firms get involved.
The second model, which was presented last week or the week before, would be what we would call privatization, but with a monopoly; in other words, one private company would be entrusted with responsibility for postal service. Instead of having a Crown Corporation, we would have a private company which would have a monopoly over the program, and, we are told, it would be possible to maintain the same level of service throughout Canada.
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The third model I can see would be that of a very future-oriented Canada Post Corporation which would examine the options available to it in order to face the 21st century.
I would like you to elaborate on the possible consequences of these three options. One group could talk more specifically about rural communities and the other, about postal service in general. Do not hesitate to present your views very generally and to clarify your vision for the future, particularly with respect to a Canada Post Corporation that we would keep and whose mandate we would decide to broaden.
For example, what types of government services could be delivered in post offices? Could the Department of Human Resources Development process claims for unemployment insurance, old age pensions or other such things? In your view, which of these three options would be the best for ensuring quality postal service in Canada?
The Chair: Shall I determine the order in which you respond?
An Hon. Member: Ladies first.
The Chair: Ms Turcotte, would you like to begin?
Ms Turcotte: Yes. I believe I have already touched on the issue of full privatization and stated that some places no longer have post offices. So we can talk about full privatization in those cases.
There is a danger for some municipalities which have a kind of service which is somewhat bizarre compared to that of other municipalities where the post office is still fully operational.
I would like to give you an example of a situation I often encounter in the post office where I work. Private courier companies that leave Montreal to deliver packages in various places stop in our post office, pay the postage and let us continue the delivery.
They are not interested in going to the small municipalities. I do not know if people are aware of this situation which often occurs. They are not interested in going to remote parishes because it is not profitable for them to do so.
I still foresee a danger for rural communities, because our network is already being used. What will happen to the small isolated municipalities if we privatize Canada Post completely? If I owned a business, I would probably be more interested in offering a service between Montreal and Quebec than a service between Montreal and Saint-Wherever or Montreal and Saint-Clément, although I prefer not to specify the names of the municipalities. You see what I mean.
As for privatization with a monopoly, I have trouble imagining what that could lead to. I have no idea. What do you think, Bernard?
Mr. Choquette: I maintain that the post office should be the access point or the door to the federal government throughout the country. Lately, old age pension forms were removed from post offices, but people continue to ask us for them.
Passport applications, unemployment insurance forms and a host of other things have also been removed. For all these things, it would be to the government's advantage to use the facilities which are available and the employees who are in these offices who are very much aware of the needs of people and who would automatically become proud representatives of the government at this level.
In my view, privatization could not ensure to all citizens their right to fair and equal service throughout the country.
I believe that is crystal clear from the start. This is the thrust of our views. We prefer to not even consider the possibility of complete privatization. I think that would be a catastrophe.
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[English]
Mr. Clark: I think we're in a situation of debating what happens with the surplus that's being generated by Canada Post. We're talking about where that surplus goes. Obviously, if it's privatized and it's profitable then that surplus will go into private hands. I think this would be wrong, given that it's been the Canadian people who have paid for the post office.
I think that total privatization will mean that the work that is the easiest to do will be done; in other words, the transfer of mail and products to major cities. I don't think you are going to see a private company wanting to mail things at the same kinds of rates that Canada Post can offer, for example, to northern Manitoba. I don't think that's going to happen.
I also have some concerns about privatization with them still having the monopoly. I think then you're still having to talk about where the profits go. As long as it remains in government's hands we can then talk about where the surplus goes. Again, we believe it should go into providing more and greater service.
We have some of the same fears as our colleagues do from the postmasters association in that we represent our members in rural areas too - a little bit larger centres in most cases. What we've seen and what we heard when we were travelling around with Mr. Radwanski was rural Canadians being very concerned about what would happen if either Canada Post lost the monopoly or if it was privatized.
The same thing that happens in the smaller centres with the private companies even happens in the larger centres. Either they don't go to the smaller centres or they use the post office to go to the smaller centres.
If you go into any post office in the morning, any large postal plant, what you will see is private companies line up mailing things using the advantage of the post office to go to rural areas. If it was totally privatized I don't think you're even going to see that. I think the rural areas would suffer greatly.
I think that if we have the chance to talk about Canada Post remaining in public hands and generating a surplus, which there is every indication it's going to, then we can look at expanding the door-to-door delivery in areas that currently don't have it, communities of 10,000 or more. There are lots of communities of over 10,000 that don't have it now.
We can talk about expanding government services, offering them in a number of different areas where they currently do not have an office that's a representative of the federal government.
We're currently involved with Canada Post in trying to come to an agreement on a project in Grand Falls, New Brunswick. It deals with this issue, of offering government services within a post office.
I think that government agencies or crown corporations can work those kinds of things out a lot better than you are going to be seeing with a large corporation; and it would be a large corporation if it was totally privatized. It would need an incredible amount of capital to do this. I don't know whether they would be as willing to try to work those kinds of things out with the government as would an agency of the government, which a crown corporation is.
So we obviously believe that Canada Post should be maintained in public hands. We do believe it should be allowed to expand in order to ensure that it continues to be able to generate a revenue base so it can provide services in places where it is more difficult to provide them for a profit, such as the north and rural areas.
[Translation]
Mr. Crête: As you know, people often have an outlandish concept of the very difficult working relationships in the postal sector, where record numbers of grievances and things of the sort are filed. I know, however, that during the last negotiations, collective agreements were signed within the required timeframes.
Could you tell us a little bit about some of the initiatives taken by the various groups to contribute to the Corporation's activities and to show the dynamic approaches of your employees, which are currently resulting in an impressive level of satisfaction within Canada Post? The Corporation published a very voluminous survey which indicated that levels of satisfaction among employees were quite high.
Tell us if there are initiatives like this. I for one attended a presentation in Kanata organized by people from the union who were talking about the motorized mail courier system and other such things. If you're aware of any such examples, I would like you to tell us about them.
[English]
Mr. Clark: I think it's likely appropriate that CUPW answers that question first in terms of the labour relations climate in Canada Post. It's no secret to anybody that we have had a number of industrial disputes over the years. But what's happened in the last two rounds of negotiations has been completely different.
We went back after we had been legislated back to work in 1992 and we actually approached the post office and said we wanted to negotiate, because it's not in the interest of our members either to have things decided by a third party or to be involved in some kind of lengthy industrial dispute. I think it hurts our members in the pocketbook more than it hurts anybody else. It does hurt others, I know, but it does hurt our members first and foremost.
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We were able to negotiate a collective agreement. I think it showed there was a recognition by Canada Post at the time that an industrial dispute is not in their interest either.
One of the things that's happened over the years since we've become a crown corporation is that the parties have been forced to resolve their own differences. Both parties, at least up until now and we hope it will continue, have not wanted to have third party involvement. In the long term it's not good for the morale within the post office if third parties are imposing a collective agreement, even if it's the government. It's better if we can resolve it ourselves; then the workers feel they've been part of that agreement.
As I said, we don't believe we have really done well with wages, but we've done well in the last little while with job security, which is important for now and the future. Our membership is very concerned about the future, given electronic mail, the changing mailing patterns going on, and the intense competition to the post office.
Our membership was very happy in the last round of negotiations about the work we did on service expansion. One of the big projects we've been involved in has been the motorized mail courier project. Canada Post approached us and said they wanted to motorize and put more letter carriers in vehicles. They said they wanted to do that because they believed it would cut some of their costs in the long term. The real reason was that they wanted to have an image out there in the community. They felt it would cut their costs because instead of one group delivering parcels and picking up mail from street letter boxes and another delivering on the street, you would have one group doing both. We believe it was important to cooperate and try to come to an agreement with Canada Post on it, because we did see it as the way of the future.
We're hearing from analysts that you're going to see more people having home businesses. We've heard a lot of talk about people working out of their homes and small businesses driving the economy. If that's true, it's important that Canada Post have the infrastructure to provide the service, to be able to go to those small businesses in homes and provide the service in an economical fashion. So we saw that as an opportunity.
I think it's been a real change for both parties to realize that although we may have differences and we work them out in collective bargaining, just as it's done in any other labour relations climate, we do have some things we can work on during the life of collective agreements that will benefit the corporation by expanding its revenue and its presence in the market, while providing long-term job security for us.
It's been quite an educational process within our organization to talk to our membership about that, because it wasn't our standard approach. We've taken on that challenge because we know it's essential for the future and it's to everybody's advantage if the parties can actually resolve things. The more we're talking with each other between negotiations, hopefully the more likely we will be able to come to an agreement as we did last time. For the first time in history we came to an agreement prior to the expiration of the collective agreement, without a strike, which was beneficial to everybody.
We are hoping as we are getting ready to go into negotiations again that the parties will be able to resolve the differences they've got and try to find ways to expand the service that exists. Obviously it is of benefit to our membership, and our membership understands that.
The Chair: Thank you very much.
[Translation]
Mr. Choquette, would you like to add something? Ms Turcotte?
Ms Turcotte: Yes. I would like to clarify, and this is surely not a secret for anyone, that the group we represent has never gone on strike. That must be very clear from the outset.
The only time we were even the least bit unruly was when our post offices were being closed down. There again, this unruliness did not come from us, but from the people who supported us, who truly believed that we should stay in their communities.
Canada Post Corporation provided training courses for postmasters which contributed to making people consider the post office a bit like their own business. They visited commercial businesses to see whether they had the right product and whether it suited their needs. These initiatives are relatively new phenomena.
Several people in our group are setting up stamp collecting workshops in schools on a voluntary basis and it is a pleasure for us to do that. We are taking off our blinders. We are open to all sorts of things. That says it all.
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Mr. Choquette: In conclusion, I might add that since the moratorium was imposed, Canada Post Corporation and CAPA have been working hand in hand with a view to finding ways of making Canada Post Corporation more profitable.
In the end, we all have the same goal.
The Chair: Thank you.
I think it is a goal that we are all trying to reach.
Mr. Gilmour.
[English]
Mr. Gilmour (Comox - Alberni): Thank you. I have a question for both groups.
Bearing in mind that in the business climate - and I see you in the business climate, running a business or being part of it - downsizing is clearly the way most businesses and in fact most government departments are going, how do you see yourself being involved in that arena? Do you see some downsizing taking effect? How do you best see yourselves being a part of the solution? Is Canada Post receptive to your different points of view when you get to the bargaining table?
[Translation]
Mr. Choquette: Earlier on, we mentioned the project with the National Bank during the RRSP campaign. We discussed the project together, which enabled some employees in our offices to work more and the National Bank to get something out of it. Both sides won in the end.
From the CAPA's perspective, some sections in our collective agreements enable the Corporation to a certain extent to downsize by reducing the hours of certain employees or by taking other steps. Downsizing is done gradually and in a humane way, and I think that is a good thing.
[English]
Mr. Clark: When you're looking at downsizing, I don't think you can look at it as a principle, even though it is a general trend. It has to be done for a reason. Is it good or is it bad? In some cases it may be good for business and in some cases it may not be.
What's happening with Canada Post is that the volumes are increasing, and postal volumes always do increase even though the economy's low. Postal volumes increase because the population is constantly growing, and that's the reality we face. It's a little different from some other businesses.
We have seen some reduction in members, but I think you have to look at the ratio of the amount of mail being put through the system and delivered to the number of employees. The ratio is in our brief, as well as in the executive summary. It talks about how productivity has risen. So in one way you could actually look at it as some form of downsizing, given the volumes that are there.
For example, in 1981, when the crown corporation was first put into place, the amount of mail that was processed, pieces per hour paid, was 210 pieces per hour. It's now 334 pieces per hour. I think that's important. It's the same with points of call per hour paid. In 1981 it was 41; in 1993 it was close to 54.
What you have is more productivity. To me that's what downsizing is supposed to be for. It's not the principle of downsizing. I've heard that it's been put forward as a way of increasing productivity. There's been that increase in productivity in the post office.
The corporation has a certain amount of flexibility too. There are 9,000 casual workers on call. They can be moved in and moved out, and that happens all the time. The reality is they're usually moved in, because they're needed by the corporation even though we have not been able to get them regular, indeterminate status.
Mr. Gilmour: To the union, I've got a little bit of insight. My wife was a casual employee for the union on Vancouver Island before I became a member, and she came home with some pretty invigorating comments.
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I go back to the bargaining table. That's my past background. I've been at the bargaining table many times. Are you part of the solution? Are you allowed to get in to be part of the solution, or is it just a head-knocking situation with nobody listening on the other side? Is it a team effort, or is it in fact a confrontation that is going nowhere?
Mr. Clark: I think there are still some hold-overs from the old days with the corporation and they would like not to have us involved. I think there is also a large number in the corporation who want to have us involved. We're trying to work it out. We did have an adversarial relationship for a fairly long time. Various groups would have their own views on why that existed.
We've realized that there is a need to come to agreements. That's what we did with the last collective agreement. We're getting ready for negotiations again, and we're hoping that at this point the corporation will realize that it is in our interests as a union to ensure that the post office has long-term viability, financially and otherwise.
I think we've been able to convince them of that. It goes a long way because there's one thing we've got in common. We may have differences of opinion on wages and job security. We're trying to get the best for our membership, there's no doubt about that, and they're trying to cut costs. We may have disagreements on those, but as you know that's what negotiation is all about.
I think there's more recognition from all the parties that we have one common interest, which is the long-term viability of the corporation. We may also have a disagreement on whether it should be private or public. We haven't heard a lot from senior management about the need for a public post office. We're concerned about that, because we think that will ensure its long-term viability.
Other than those things, I think we'll have the usual things in negotiations: differences on wages, benefits, job security. But on the one thing that is really important we have some common ground. We just have to build on what we've done in the last two rounds.
Mr. Gilmour: I have one last question to both parties. You've obviously both been part of the review that's going on. I'd appreciate your insights on how you feel the review is going, whether it is cosmetic, for want of another word, whether it's real, and whether you in fact see some concrete solutions coming out at the other end.
[Translation]
Ms Turcotte: I apologize, but I seem to be the only one who is not finished listening to the question.
In the end, I wonder if it would not be possible to try to maximize the current system before slashing the network, eliminating what already exists and laying off people who are proud to work for the Corporation. I always come back to that point.
I must say that things are going very, very well with the Corporation. Sometimes we even invite our members to share their ideas on how to improve the network's capacity so that we can pass them on to the Corporation's managers with whom we have a very good working relationships and who are open to this approach.
As I was saying, the network is there. Before demolishing it, let's try to see what we can do to maximize revenues and other aspects. I've always been open to all ideas. If we were to wake up some day and realize that nothing is working, we would be able to admit that we tried and that nothing is working.
But before closing offices and eliminating the rest, we have to give this some serious thought. It's as simple as that. I'm a mother, and I think that is where my perspective on things comes from.
[English]
Mr. Clark: I've been at almost all the hearings, making presentations or listening in. It's been a challenging experience. Mr. Radwanski asked very tough questions. He asked tough questions of the unions, the corporation, the competitors, and the general public too.
We have one concern. The concern is that the review focused on urban areas. I know that some focus groups have gone out to rural areas. We believe there should have been hearings in rural areas. We feel quite strongly about that. We believe that rural people have the most to lose if Canada Post is told to get out of certain profitable markets. We wanted to have that talked about a lot. We've had some concerns about it.
The questions have been insightful. I don't believe it's a cover-up or anything like that. I believe it's a true review.
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We had some concerns. We believe that we and the other organizations representing workers at Canada Post - there are three - sometimes did a better job of arguing for a public postal service with expanded service to Canadians than Canada Post did.
There were stories, as I'm sure you're aware, as some of them came out, in terms of Canada Post's arrogance and attitude towards its competitors and some small businesses. We had some appreciation of that, and we made it very clear to Mr. Radwanski that even though those things may be going on, you can direct the corporation to stop doing them. Don't make changes to the act just because you've got certain managers doing certain things.
All in all, I think it's been a fairly thorough review, with the exception of failure to adequately address the concerns of rural Canadians.
Mr. Gilmour: Thank you, Madam Chair.
The Chair: Thank you, Mr. Clark.
Mr. Harvard.
Mr. Harvard (Winnipeg St. James): Thank you, Madam Chair. And thank you to the two groups for their presentations; I enjoyed it.
First of all, I don't know what it is about postal service, but there's still something thrilling about going to the post office, or going into your post box at your home and finding something there.
A voice: We'll write you.
Mr. Harvard: Mind you, I get a little sick and tired of those letters that say ``John Harvard, you've just won $10 million'' or something, and I know it's not true, so...
A voice: Some of them are charities.
Mr. Harvard: The other thing was, one of you talked about perhaps expanding the services at the post office, whether rural or urban. I think that's a good idea - turning a post office into a kind of Government of Canada centre. Even after it's downsized, government is still very big, and I think a lot of citizens in the country still don't know what the federal government does. They may in some areas have a general overview, but when it comes to details, they're lacking.
For example, just the other day this committee heard a presentation by the Canadian Federation of Independent Business, CFIB, and one of their complaints was about the open bidding service that is provided by the federal government. They were in effect saying that they - their small-business people - don't know enough about this service. It seems to me that if you had a local post office that was really, shall we say, a ``library'' that contains what the federal government is all about and what it's doing, perhaps that would be a very worthwhile service. The reason I suggest that is that a post office draws traffic; it is a public place.
There are some federal offices, let's say an environmental office or some other office, that don't have that nature about it, of drawing people to it. But a post office does, especially in a rural centre. It could become, or probably already is in a rural area, really the centre in town. I think that would be a great idea, turning post offices more into a federal Government of Canada centre, with Canadian flags flying, the whole thing. I would certainly support that kind of thing.
Let me ask you a question, just as an ordinary citizen who owns a home and has door-to-door service. Maybe I'm unique or in a minority, but I never thought of needing a greater postal service, more frequent or whatever, to my door. I'm quite happy the way it is, despite those silly letters about winning $10 million. Why would you consider expanding door-to-door service? Can someone tell me that?
Mr. Clark: We're talking about expansion of door-to-door in areas that currently don't have it. For example, in a lot of communities, because of the Canada Post policy, you will have a small cul-de-sac that doesn't get door-to-door delivery, but everybody else around it does. In some communities any new subdivisions obviously don't get door-to-door.
I think people get used to what they're given. In Europe, it's very common to have delivery twice a day, but we're not arguing for that. It wasn't that long ago that businesses got it, everywhere, twice a day, in this country too. There have been some gradual changes, and I think it's downgrading the system.
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What we're really saying is that the surpluses that are being generated from postal operations could go into expanding it, in places where there are currently what are called ``community mailboxes''.
Geoff, do you want to add something?
Mr. Geoff Bickerton (Director of Research, Canadian Union of Postal Workers): Yes. The difference in cost for Canada Post between having a letter carrier deliver to a superbox and a letter carrier delivering to your home is $63 a year.
Put another way, there are about 600,000 residences in Canada right now that have letter carrier delivery to superboxes, not exactly to their home. The total cost of bringing all those 600,000 residences on line with door-to-door delivery would be about $40 million - roughly half of what Canada Post expects to pay in dividends to the government in the year 2001.
Our position is not that all of these houses should instantly be brought on line. Our position is very much that as Canada Post is making profits, part of those profits should be used to bring more and more Canadians up to the same level of postal service so that we don't have two types of citizens - one who gets door-to-door delivery and the other who has to go outside at 20 below and go down the road to get their mail.
Mr. Harvard: Do you get a lot of complaints from people who have to go a few yards or whatever to a post office box to get their mail?
Mr. Clark: Yes. We got a lot more a few years ago, but I think people end up, as I said, starting somewhat to accept things. They feel that there are some difficulties in making changes. But there have been a number of municipalities - I think Nepean is one, as a city - that actually challenged whether or not Canada Post could put up the community mail boxes.
Where we get a lot of the complaints is from disabled organizations and seniors' organizations, especially in places like from where I'm from, out in the prairies, in the wintertime. The mailboxes are simply not operable, and for some people it is a real hardship to have to go outside and walk any length to get their mail. They'd rather have it delivered to their door.
Mr. Harvard: One of you used the phrase ``to broaden the post office's horizons''. Somebody else talked about the post office having to adapt to new technology - I don't think you used the word ``technology'', but I inferred from that the word ``technology''.
What are you talking about when you're using expressions like that? Are you saying that the post office is going through a great transition and that in a matter of years those of us who belong to the older generations won't recognize the post office? Is the post office going through an enormous change? Is it going to be more electronically oriented? Is it going to be providing services we don't identify with the post office right now? Who wants to answer that?
Mr. Clark: I think we will see massive changes. I've been at the post office since 1979, and I've seen changes both inside the post office and also in terms of the types of mail that are being used, for example volume electronic mail, which is an advertising feature basically, or any kind of large volume mailer uses where the post office actually prints up the mail based on computerized mailing lists and then also sends it out and delivers it. The printing is done right in the post office.
When that happened, we were just amazed that the post office would actually be involved in that. Also, as electronic mail is becoming more and more popular and more and more prevalent, we believe that is going to change the amount of letter mail we see.
We're not exactly sure what that future is going to bring. We do believe there's a place in the post office for it. One of the reasons we're really excited about the project to have Internet access at postal stations is that we know that not every Canadian has a computer and not every Canadian is hooked up to the Internet. That's just a reality. Only a certain element of the population will be able to afford it and will have access to that.
We think that the post office has a role to play in ensuring that there is universal access, and also in ensuring that security is provided, because that is a question that's being raised constantly - the security of electronic mail.
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We're not sure where the future is going. We think the post office, in itself, has mechanized incredibly since the mid-1970s. It's likely one of the most mechanized, highly advanced postal administrations in the world, and that has changed a lot of our day-to-day work. What with the changes in electronic mail and hybrid mail - a combination of electronic mail and hard copy - we're not sure where that's going to go. But we do believe the post office should be investing in it and getting into it if it wants to ensure universal access and security of the mails. Those are our two major concerns.
Mr. Harvard: Just one more. Oh, I'm sorry.
[Translation]
Mr. Choquette: I would like to make a short comment. I do not think that we should change the evolution of things or change the technology in the post offices. It's simply a question of evolving with the population, otherwise the post office will be outdated. If the Corporation cannot evolve in this direction, people who need services other than those the Corporation is in a position to offer will look for them elsewhere.
We have been aware of the costs involved for years, and we are prepared to consider services such as faxes, photocopies and access to the Internet in our post offices. We strongly believe that our mandate involves offering those services.
[English]
Mr. Harvard: I have a final question. I represent an urban riding and this hasn't been brought to my attention by my own constituents, but I've been listening to some members of Parliament who represent rural areas, especially from the prairies, and they've expressed concern about a new way the post office is distributing some mail and sorting, which apparently leaves some postal outlets out in the cold, that there is a threat to some staff, and that there may be some lay-offs as a result of this change in sorting and distribution. Can you tell me what that's all about?
Mr. Clark: I think Canada Post has tried to do this a number of different times, their goal being to try to move all the processing of mail into the large plants. They do it in a number of ways. There is a circle route system, where instead of having the mail sorted in smaller places like southern Manitoba, where the mail has traditionally been sorted for those towns that are all along the line, the mail is all brought into Winnipeg and then goes out, which obviously creates delay. It's cheaper for the corporation, more cost effective, but it does have an impact on jobs, and it also has, I believe, an impact on service.
One of the other ways of doing that is through a twinning of mailboxes program, where basically the customer segregates their mail in terms of where it's going. Again, from our view, that cuts out sortation in those smaller communities, where we especially think those kinds of job losses really have a major impact.
Postal workers, as I said, have not made great wage gains in the last number of years. In a lot of small communities it's a pretty decent job, and to pull one or two jobs that are $34,000 or $35,000 a year out of a community has a major impact on those communities. So we have that concern. Plus, we believe the sortation system does not speed up the mail. It may be more cost effective, but that's not necessarily always a good thing when you're talking about delivery of mail.
The Chair: Thank you.
Mr. Bryden.
[Translation]
Mr. Bryden (Hamilton - Wentworth): I live in a small town. I like my local post office which is the centre of village life.
[English]
I see constantly the workers in my little post office slaving away on direct mail; they get heaps and heaps of it. It appears to exceed the regular mail that comes through.
I'd like to ask both groups this question. Do you feel that Canada Post is getting so heavily involved in the direct mail service that they're taking advantage of an infrastructure and employees that are already in place to provide a service that otherwise would cost more, would be more difficult to provide, outside of Canada Post? This has always been a private enterprise service, and now it seems to be well locked in to Canada Post. I just wonder what your feelings are about it and how appropriate it is, the type of service that Canada Post delivers.
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[Translation]
Mr. Choquette: When you say direct mail, are you talking about flyers or admail?
[English]
Mr. Bryden: Yes, of course. Advertising, basically, and junk mail.
[Translation]
Mr. Choquette: I have been working for the Corporation in a small post office for more than20 years, and that type of service has always been offered. The volume may have increased over the last few years, and the Corporation may have seen it as a means of making its operations more profitable. I feel that that service is the Corporation's domain. It is not an idea the Corporation dreamed up overnight. It already existed; perhaps the Corporation has done more to develop it. That's all.
[English]
Mr. Clark: Canada Post has been in the market for a long time, long before a lot of the companies that have now come in and are complaining that Canada Post should be out of the market - except Canada Post was there before. I think there's nothing wrong with Canada Post using its infrastructure to do things in a more cost-effective way. Canada Post has obligations, obviously, to individual Canadians, but it also does exist to provide services for the business community. I think there's nothing wrong with providing a relatively cheap means for individual companies that may not be able to advertise in other ways to get their mail out.
We know that there have been some concerns raised about direct mail. Canada Post doesn't like us to refer to it as anything other than unaddressed ad mail and they don't like certain words that are used. But I think the other advantage for Canada Post being in it is they can set some standards in terms of the environmental concerns that are constantly being raised. I think it would be easy for them to do, given their infrastructure. They could get into recycling, they could put a lot more stringent regulations in in terms of the type of ink and the type of paper that was being used. So I think they have the ability to address those concerns and to also provide a service to small businesses, which I'm not convinced could be done in terms of a private corporation.
Undoubtedly, there's quite a bit of work involved. The volumes on that are steadily increasing. As I said, there's close to a 9,000-member workforce that strictly delivers ad mail. They're not paid a regular postal worker's rate, but they have some protections and they're getting paid more than the people you see on the streets of some cities delivering stuff for private companies, who I'm not convinced are even making minimum wage or anything close to it.
The Chair: Mr. McTeague.
[Translation]
Mr. McTeague (Ontario): Last week, we heard a representative who had some kind of contract with Canada Post. He indicated he'd noted certain things and that he was of course of favour of privatizing the Corporation.
He mentioned those areas where savings and cutbacks could be made so the Corporation could eventually be very, very profitable. He suggested eliminating delivery in rural areas.
I'll submit both sides of the matter to you because, basically, you're wearing both hats.
[English]
You've mentioned there are some thing you believe you could do better. Are there any things you believe Canada Post and its workers shouldn't be doing that are really a waste of time? I know that John has alluded to junk mail, direct mail, as one of those things that I think we suspect is somewhat cumbersome. But are there areas you believe Canada Post really has no business being in right now?
[Translation]
Ms Turcotte: No, not at all.
Mr. McTeague: Is the answer a simple no?
Mr. Choquette: Some say there are too many but, in our opinion, that is not the case. As we've said since the outset, we're open; the more services there are, the better it will be for us. Our goal is to provide the best possible service and to keep our jobs in rural areas. We said earlier that shutdowns result in lost jobs. As I mentioned in my presentation, 86% of our members are women. We know that often those women are heads of single-parent families.
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I think keeping those jobs is important and there is no point in withdrawing those services. In my opinion, there are no superfluous services; the more we have, the better it is. We'll simply be in a position to give better service, better choice and a broader range.
That is my opinion.
[English]
The Chair: Perhaps I can have a short follow-up question to Mr. McTeague's.
Mr. McTeague: You have my indulgence.
The Chair: Thank you. This is a very enlightened committee, as you can tell.
Actually, Mr. Clark, I believe it was you who talked about contracting out as a source or way of saving money. I believe you referred to a Price Waterhouse study that evaluated this. Could you delineate exactly what kind of volume we're talking about and what kinds of services should be contracted out in order for the post office to be viable?
Mr. Clark: I talked about that generally, but I think it would be useful for my colleague to talk about some of the specifics, because a lot of the contracting out Canada Post did in the past was not designed to save money; it was part of a labour relations strategy and part of an ideological belief, that things should wherever possible be done by private enterprise. I don't think that either way it's a very good way of looking at a business you're trying to run or a government service you're trying to run.
The Chair: But did I misunderstand you when you alluded to the fact that it saved money? This committee is always looking for ways to save money.
Mr. Clark: No. Actually what I was alluding to, and there are some examples in our brief to the mandate review, is that when we contracted work back in we actually found that it saved Canada Post money. This was the maintenance work at the Edmonton parcel plant and the shuttle services. In regard to something that is often talked about in terms of contracting out, the franchising of retail, Canada Post has never argued they did that to save money. And there's been no evidence that it actually has saved money as a specific project.
So we're looking always for ways to... We're involved in this Appendix T committee - we call it that, it's collective agreement language - that was set up two collective agreements ago, where the corporation and the union would jointly look at ways of contracting work in. We ended up with companies like Price Waterhouse doing independent evaluations of it, and those things have been very valuable, I think for both us and the corporation, because it forces people to take a really hard look at it.
Do you have anything to add, Geoff?
Mr. Bickerton: Yes.
Since we signed our last collective agreement, as Dale said, we've been contracting work back in and having Price Waterhouse examine very carefully, totally study, all the different costs and savings. What we found was that for the maintenance work at a large plant in Edmonton that had been contracted out in 1989, the work actually was costing Canada Post 25% more to have it contracted out than it did when we brought it back in-house. Yet the people who were advocating the contracting out at the time were repeatedly saying to us it will improve quality, there will be cheaper costs, etc. This is the same thing we found when we actually brought in the truck services that had been contracted out.
So it really makes you think that during the time when the Conservatives were directing Canada Post to contract out as much as possible of the work, the objective was not to save money. The objective was to provide lucrative contracts, presumably for their friends in the private sector. But it certainly didn't help Canada Post.
I think in general there's a trend today to think that contracting out saves money, and it's very important to get underneath that and take a real look at what the implications are, especially in the long term, because once the public sector gets rid of the trucks and gets rid of the actual materials necessary, you find that those contracts keep going up and up and up because the contractors know that in this case the post office has no alternative.
So we found that contracting in saves money. If you're interested in saving more money, we probably have a lot of ideas for you.
The Chair: You kindly offered to make the Price Waterhouse study available, and I think most committee members would find it interesting reading.
[Translation]
I would like to thank you all.
[English]
Thank you for coming and sharing your insights and your expertise. It's been invaluable. Thank you.
The meeting is adjourned.