[Recorded by Electronic Apparatus]
Tuesday, October 22, 1996
.1108 
[English]
The Chairman: I'd like to bring the meeting to order. Pursuant to Standing Order 108(2), we are considering the report of the Canada Post Mandate Review. We have with us this morningMr. George Radwanski, chair.
I guess, Mr. Radwanski, you'll be presenting us with opening comments, a brief of some sort.
Mr. George Radwanski (Chair, Canada Post Mandate Review): I have a very brief opening comment.
The Chairman: Then we'll go to questions from the members. Mr. Radwanski, please.
Mr. Radwanski: First of all, thank you for the invitation to be here this morning. It has been certainly a very interesting period of nine months, during which we - I and the members of my team - examined all the issues pertaining to the mandate and activities at Canada Post.
I must say that I've been quite gratified by the initial reaction to the report. I'm sure you'll have questions and comments. I assume you've read it so I won't take your time trying to walk you through it.
As a general statement, somebody remarked - and I think it's probably a fair characterization of the policy thrusts of the report - that what the review has recommended is redefining the parameters of postal service. It has been a triangular kind of view, where you've got the post office, the major users, and the unions as the key players at the table.
.1110
The report in effect says that the triangle should be at least a pentagon in terms of bringing to the table two more players: (a) the general public, the public interest; and (b) small businesses. It should not only be the post office itself, the unions, and the major users, but also ordinary Canadians across the country - whose interests should in fact be paramount - small businesses, and other players that are either dependent on the corporation or affected by its behaviours. They should get at least as much weight as the first three.
That's the philosophical thrust of the report. You're aware of the recommendations. I'll say generally that I'm quite gratified by the response to the report from Minister Marleau and the Government of Canada. From this point on, I guess the process unfolds.
I'll be happy to answer any questions you may have.
The Chairman: Thank you, Mr. Radwanski. We'll go to the opposition. Mr. Fillion will have ten minutes on the first round, then the Reform Party, and then the government.
Mr. Fillion.
[Translation]
Mr. Fillion (Chicoutimi): Mr. Radwanski, I am pleased to be able to put a face to your report now.
As you said in your introduction, you invested an enormous amount of time in reviewing the whole problem of Canada Post. You also told us, although briefly, that you found this work to be very enriching. You recommended that we now broaden the discussion, not in your triangle as you call it, but in a pentagon shape, by including the public interest in general and small and medium-sized businesses. You closed your statement by saying the minister's reaction in your view was significant and you indicated that you were ready to respond to our questions.
The most important element that comes out of your document, the very logic of this report, and this to me is a very important point, is that all the recommendations are part of a whole. These 31 recommendations should form a whole, however we see that so far the minister has implemented only a few of these recommendations whereas she has gone against others. Does this behaviour lead you to believe that the government is repudiating your report, bit by bit, as soon as it is published?
Mr. Radwanski: You will excuse me for answering you in English, but I would like to provide you with further information.
Mr. Fillion: Certainly, that's no problem.
[English]
Mr. Radwanski: No, the answer to your question is.... As I said, I'm very encouraged by the government's response, by Minister Marleau's response. I do say in the report that overall the 31 recommendations should ideally be viewed as an integrated whole in terms of being a vision for the corporation. That doesn't mean it would be logical or reasonable to expect that all of them would be implemented the day after the report is announced or made public or examined.
I think it is very normal, and very appropriate, when the government is presented with recommendations of this scope, both the changes envisaged and the financial implications, that it would exercise a form of due diligence, which is to say to take the time to examine very carefully the implications of the various key recommendations and to decide what to do.
That is certainly my understanding of what the government has done, and probably any other course would be less than prudent.
[Translation]
Mr. Fillion: In addition, the government has retained the services of financial advisors to examine each one of your recommendations. As soon as your report was made public, a few of your recommendations were implemented whereas others were rejected. Therefore financial advisors are currently proceeding with a new assessment of your recommendations.
.1115
In the course of your work which you found so interesting, you met with many people and received many briefs. You probably also met with financial experts who guided you in your recommendations. Given the time that this new evaluation of each of your recommendations required by the government and the fact that the minister has not set a deadline, I think that the recommendations will once again be called into question. These financial advisors could present their own conclusions in a year or two. Aren't you afraid that at the end of that period, your report will end up gathering dust along with so many others?
[English]
Mr. Radwanski: I can only repeat what I've already said to you. I am very comfortable with the government's response. I'm not here as a spokesperson for the government. I think questions about the government's process are more appropriately put to the government. You, of course, being in opposition will have a certain view of it, which might be different from the government's. That's the parliamentary process.
All I can tell is, as I've said, I'm entirely comfortable with the way the government is handling the report. I prefer frankly to answer any questions you have about the issues and recommendations than repeat ad nauseam that I'm comfortable with the government's approach. It's not for me to go beyond that and comment on where it goes from here, but I'd be happy to clarify the work that my team and I have done over the past months.
[Translation]
Mr. Fillion: Yes, there is no doubt that we could put our questions to others, but this is only one part. It seems to me that given the fact you are the person who drafted the report, conducted an analysis and proposed recommendations, we must wonder whether the people who will implement these recommendations support them.
In a more general way, your overall report establishes that in order to give Canadians a universal service that is affordable, the Corporation must make its operations profitable. It is your recommendations as a whole that will allow the Corporation to become profitable.
Right now as we speak, are we on the right track to make this Corporation profitable so that Canadians do not have to subsidize certain new services, such as lettermail? Are we on the right track?
[English]
Mr. Radwanski: The recommendations in the report are very carefully designed to ensure that there will be no burden to the treasury from Canada Post. On the contrary, the set of recommendations involving, on the one hand, getting them out of competitive activities and, on the other, addressing the revenue side through the measures the review has recommended - a stamp price increase and a contribution from the courier industry - are designed to absolutely ensure that there's no long-term revenue loss and that there will be funds to offset revenue impacts and to improve service while ensuring the corporation remains on a solid financial footing. I took great pains to ensure that the recommendations would be fiscally prudent.
[Translation]
Mr. Fillion: I understand the logic that guided you. In examining the actions that are taken right now, I realize that all your recommendations which were designed to make the Corporation profitable, have been set aside. Thus a postage rate increase has been rejected and private industry is given the delivery of economy unaddressed ad mail, thus leading to the loss of 18,000 jobs and so forth.
.1120
Are we really on the right track, the one you advocated through your 31 recommendations?
[English]
Mr. Radwanski: What I would say to that is, as I said, the government is taking the time to examine the implications of this report. So it's out there in the marketplace of ideas. If you and your party are in agreement, as I understand you to be from your remarks, that the postage rate increase the report has recommended and the contribution from the courier industry the report has recommended are remedies that are appropriate and that the government should move on, I am sure in the nature of the parliamentary process you will contribute to the debate by making those views known in due course in the House of Commons. That's the nature of a process that happens after a report.
To the degree you are supportive of these findings, I would add that to the encouraging developments I have found. I hope perhaps you will be helpful in conditioning public opinion to agree that these are appropriate remedies. That's your role as an elected member, not mine as the chairman of a review that has completed its work.
The Chairman: Thank you, Monsieur Fillion. Mr. Harper.
Mr. Stephen Harper (Calgary West): Thank you very much, Mr. Chairman.
Mr. Radwanski, I'd like to follow up a little on the questions Mr. Fillion asked you.
Although you say you're encouraged by the government's response thus far, you did say in your report on page 121, when you spoke of your package of recommendations, ``It is hoped that they...'' - these are the recommendations - ``may be viewed as an organic whole, because cherry-picking among the recommended courses of action would be considerably less likely to produce the desired results.''
Now, in light of your report, the government has implemented, I believe, these three recommendations: continuing the moratorium on closure of rural post offices, not approving an increase in postal rates, and withdrawing from the delivery of economy unaddressed mail. In light of what you said in your report, in your opinion what will the impact of these recommendations be, particularly the moratorium on stamp price increases? What will the impact of these be in isolation from the other recommendations you've made, particularly on the profitability of Canada Post?
Mr. Radwanski: I'm going to come back to saying that I don't see it as my appropriate role as chairman of a review that has completed its work to comment on the government's responses to the report or on future policy actions of the government. I would, I guess, repeat the point I made to the previous hon. member, and I guess it applies to the remarks you're making too.
If you and your party are of the view, as you cited from the report, that these are an integrated whole and should be ideally taken as such, and are of the view that the measures recommended, including the fiscal measures, are the appropriate ones, I'm sure that if there were to be all-party support for those recommendations and your party were to make that known, at a guess, as a student of the political process, I'd say that would certainly be a factor the minister and the government would take into account. So I would say that's in your ballpark. If you agree these are the things to do, perhaps you would like to take that position. It's not for me to argue on where it goes from here but simply to explain the findings to which I have come.
Mr. Harper: I would have expected that kind of answer more from a departmental official than from someone who was chairman of an independent inquiry. Let me say first of all it was your suggestion that these things be taken as an organic whole, not mine or my party's. You said also it would be less likely to produce the desired results if these reports were adopted in isolation.
Now, I want to ask you as the expert - that's why we have you here - what the impact of adopting those particular recommendations will be on the profitability of Canada Post.
Mr. Radwanski: I would certainly say that of the recommendations that have been adopted so far, I don't think there will be a significant negative impact on Canada Post's revenues at all. If you look at the broad thrust of the recommendations, the overall report, of course I stand by every word of what is in that report, including that to achieve the results I recommend all the measures recommended should be implemented.
.1125
It's not for me to say whether that will be done or not. Obviously, to the extent that a more piecemeal approach is taken, the results would be less predictable. That's a fact of life.
For instance, if one were to get Canada Post out of competitive activities but not address offsetting revenues, obviously the revenue picture would be different. That's a truism. By the same token, if Canada Post remains in competitive activities, then the concerns the review identified in terms of the impact on corporate culture and some of the inherent unfairness will not be fully addressed.
The extent to which that view prevails is really up to the government. I guess perhaps where we're having.... You say you're surprised by my answer. I have a long-held view that it's not the role of someone entrusted with chairing this kind of arm's length or independent process to turn around the day after the work is completed and become an advocate or a gadfly for whatever point of view or conclusions the report reached.
At least my personal style is that that's not my role. I didn't do that in the case of previous studies I did for the Government of Ontario either. My role is to explain it and to answer any questions people have about how I came to the conclusions or why I concluded the things I did. It is in the arena, in the marketplace of ideas, both political and among the public.
I'm sure you have views. I'm sure you'll be among those who'll express them.
Mr. Harper: Let me move on to the issue of the courier business and some of the things you've said there. Given your expertise, how financially dependent in your view is Canada Post on Purolator Courier? Obviously you feel it can divest Purolator Courier and maintain its financial viability. What will be the impact of the divesting of ad mail and Purolator Courier in combination with the moratorium on stamp price increases?
Mr. Radwanski: Let's go back a step. When you ask about Purolator itself, one problem this review has had is that in the way Canada Post has operated until now, with its rather secretive approach on grounds of sensitive business information, as they call it, they were only prepared to provide the review with detailed financial information, which took some effort to get anyway, on the condition it would be kept confidential and not made public in anything other than a very aggregated form.
Certainly the numbers that are in the report on the total financial impact of getting out of competitive activities are quite clear. But I would not be in a position to say in a public forum what the shortfall would be simply from getting out of Purolator, for instance, because in the view of Canada Post that would be divulging competitive information on the revenue levels of Purolator.
Suffice it to say that obviously if they were to get out of all competitive activities, which I concluded is essential, the revenue would have to be made up.
The measures the review found are appropriate to do that include a 5¢ postal increase, bearing in mind that we have the second lowest postal rate in the world, and at the same time our standards of postal service are much less rigid and much less rigorous than countries with comparable geography, such as the United States or Australia, and for an extra nickel a letter Canadians would be buying into improved service.
The report recommends a tightened delivery standard, tightening it by a day. There might be instances where there'd be less recourse with the more expensive options such as courier service if you could count on getting a letter delivered in the same city the next day rather than two days hence. There might be a net saving for a lot of users of the mail.
Also in terms of improving rural service and so on, the view of the review was that this would be a very reasonable cost to pay. Certainly the independent research we had commissioned by Decima Research found a great majority of Canadians would find a 5¢ increase, tied to improved service, a reasonable price to pay.
On the courier side, the recommendation for requiring the courier industry to affix to all courier shipments a basic postage stamp, which would be 45¢ now and 50¢ if the other recommendations were accepted, struck me and strikes me as a fair tradeoff or contribution from that industry in exchange for having Canada Post vacate an area where they feel they are being severely affected by competition from the corporation.
.1130
It's probably important to point out, relative to an editorial in The Globe and Mail, and a passing reference in The Toronto Star editorial as well, to this being a dedicated tax, that it is not. I did not and would not recommend a dedicated tax, nor is it recommended that the public bear this.
The recommendation is first of all that this be absorbed by the courier industry, and secondly, it is not a tax, dedicated or otherwise. It is simply an extension of the exclusive privilege that already applies.
Couriers operate under an exception to the exclusive privilege, and this would simply say that the exclusive privilege applies to courier shipments as well and is respected by affixing a stamp, so as to protect Canada Post's revenue bases if they're not in this field themselves.
The Chairman: Thank you, Mr. Harper.
Mr. Harvard please, 10 minutes.
Mr. Harvard (Winnipeg St. James): Thanks, Mr. Chairman. Welcome to the committee,Mr. Radwanski.
Mr. Radwanski: Thank you.
Mr. Harvard: I have one question with respect to your recommendation for some compensation to Canada Post for getting out of the courier business. Did you see the compensation as something in the short term? I can't see how compensation of that kind could be sustainable over a long period of, say, 10 or 20 years; it would somehow, in my opinion, lose its meaning. Were you thinking of it in the short term?
Mr. Radwanski: Certainly the recommendation is for the immediate term. There certainly is a transitional period during which there is a need to offset the revenue loss that would result and to invest in improving service.
I think for the rest...obviously it's an open process. One would see how the situation played out in a year, two years, whatever. I'm sure the courier industry would be making representations to the government in due course, saying, look, the corporation is fully profitable, there's no need for this, or the government would be reaching its own conclusions.
Certainly it is not a recommendation necessarily in perpetuity, but it's essential and only fair in the short term. The thrust of the report, as I say in the report itself, is that ideally everyone's legitimate concerns are met as far as possible, but everybody has to bring something to the table as well, make some contribution back. That's the spirit in which that recommendation is framed.
Mr. Harvard: Recommendations 3 and 4 in your report speak to the exclusive privilege given to Canada Post. Recommendation 4 goes as far as to say that the corporation should ``vigorously defend the exclusive privilege by recourse to appropriate legal avenues''. Why did you feel it necessary to say it that way, or that explicitly?
Mr. Radwanski: Because as the review was doing its work, there were several instances of municipalities in particular deciding to violate unilaterally, if you will, the exclusive privilege and try to make their own arrangements for delivering bills or whatever. Canada Post, to my surprise, was in the position of trying to negotiate compromises with them rather than enforcing the exclusive privilege. Quite frankly, as I say in the report, the exclusive privilege is the price we pay for having a coherent national postal service.
Mr. Harvard: So it's something worth defending.
Mr. Radwanski: Exactly, and either we have it or we don't. Frankly, for the corporation itself to be pussyfooting about defending that exclusive privilege, for whatever reason, to me is not the way to go. It's necessary and it should be sacrosanct.
Mr. Harvard: Why do you think Canada Post executives would be shy and diffident about defending exclusive privilege? It seems to me that would be the tool they have.
Mr. Radwanski: I honestly don't think it would be appropriate for me or fruitful for me to try to read the minds of Canada Post executives. I will confine myself to what I said.
Mr. Harvard: Okay.
In recommendation 5, you reject third-party regulation of Canada Post. I assume you have kind of the CRTC approach in mind. Am I right?
Mr. Radwanski: I looked at a whole variety of possible models and the conclusion was uniformly that it simply won't work well. Frankly, previous attempts at regulation.... The Marchment attempt, for example, was to a large extent undermined by the corporation itself, which was hostile to it, with the experience in the United States where the regulatory approach to postal services is mixed at best. Other regulatory agencies, such as the CRTC, are finding that virtually every recommendation they make ends up being appealed these days to cabinet.
.1135
So it didn't strike me as a solution that would provide good results.
Mr. Harvard: On the question of rural postal service, you're saying there has been some deterioration in the quality of service to rural Canada, and you're saying that service should be improved. What were you thinking of? Give me an example of where the service has deteriorated and give me an example of how it can be improved.
Mr. Radwanski: The first thing I should say is that they are reviewed at great pains to make sure we got maximum input from rural areas as well as the urban centres. This includes holding town hall meetings in small areas, written submissions, focus groups and opinion polling. Certainly there's a strong concern in rural areas that service has deteriorated and that it's not up to scratch.
For example, there's some concern about a narrowing of hours of operation at post offices. The government imposed a moratorium on closures, but the actual service within those post offices...or at least the perception among people in rural areas is that the hours are now shorter than they were, and staffing levels are lower, that type of thing.
Perhaps even more importantly - and this struck me as a fundamental anomaly - there is no service standard at all in rural areas. The service standard, in the opinion of the review, is far too lax even in the cities, where we have a two-day standard in the same city compared with a next-day standard in the United States and Australia and a three-day standard between cities compared with two-day in those other countries with comparable geography. But in rural areas there is no delivery standard at all.
Mr. Harvard: Nothing. Zero.
Mr. Radwanski: You get your mail when you get it. There isn't even a stated standard or target of when it is legitimate to expect you will get mail relative to when it was posted.
For a service that is supposed to be universal and national, and in fact is uniform in price, the price equation is relevant to what you get for the money you pay. The opinion of the review is that there needs to be a significant improvement in rural service and generally in service. The role of the postal service, when push comes to shove, is to provide the best possible service to all Canadians. I think that is in the core area of activity, and a principle that needs to be vigorously reasserted in examining the mandate.
Mr. Harvard: You say there's no standard of service to go by in the rural areas, but is there not what you might call a ``culture'' within the service, which would in effect say to all who work there that the mail should be delivered as quickly as possible?
Mr. Radwanski: That certainly isn't the culture the review found. The culture the review found - and as I said, it's distorted by the competitive emphasis - is that there are hierarchies of importance. Certainly, within mail delivery the most lucrative tier-one users get the priority attention. That's the big business corporate users from a revenue point of view. In some aspects of a hierarchy of importance, competitive activities, even unaddressed ad mail, for instance, get priority over basic service activities such as delivering community newspapers in the mail.
So the culture, as I noted in the report, has become distorted by the attempt to be both a vital public service, which is the core role of Canada Post, and a competitive commercial enterprise.
Mr. Harvard: On the question of ad mail, the government has already agreed to get out of so-called economy ad mail. The question remains about what the government will do on the so-called premium ad mail.
The reaction from the union people and the workers, those providing the economy ad service, is of course rather negative. There seems to be an assumption from some of the workers that with Canada Post getting out of the service, the service would disappear, or at least the jobs would disappear.
.1140
Is that true? If that service is a valuable service, something worth paying for, and if Canada Post doesn't provide that economy service any more, does it not just move over to the private sector, and don't the jobs go with the service going to the private sector? Or is there some other dynamic at play?
Mr. Radwanski: That's certainly a reasonable expectation, broadly speaking. I'm sure there would continue to be a flyer delivery sector in virtually every market. Some of the activity might revert to community newspapers, which in fact have been the greatest victims of the shift to Canada Post's universal access being used to provide ad mail. That has other employment benefits, of course, in terms of, in some instances, preventing the shutdown of a newspaper and all the implications there. It's a fairly complicated equation.
It's also important to note that those ad mail jobs we're talking about in many instances are part-time jobs at a rather low rate of pay. One also has to note, ultimately, that while it's natural for the postal unions to be concerned about maximizing the employment of their members, the core raison d'être of Canada Post is to provide postal services, not to be an employment machine without regard to the impacts of the employment provided. If the impact is to be putting other Canadians out of work or to be putting businesses out of business - community newspapers, for example, or career companies or anybody else - and people are encountering the Government of Canada through one of its entities competing not only aggressively but in some instances unfairly, to me and to the review this is a wrong that has to be righted. To the extent that Canada Post is, across Canada, the face of the Government of Canada, that face has to be a benign face, a benevolent face.
The Chairman: Thank you, Mr. Harvard.
We move to the five-minute segment of the questioning.
Monsieur Lefebvre, please.
[Translation]
Mr. Lefebvre (Champlain): Mr. Radwanski, I'm happy to have you here today. In Montreal, I presented a brief dealing mainly with the rural issue.
I have some concerns regarding your recommendation 18, where you talk about the indefinite extension of the moratorium on rural post office closings. I fear that after an election, the government may change your recommendation somewhat, thus going against the maintenance of rural post offices. Could you elucidate what this indefinite moratorium you are proposing means?
We also discussed article 19 and the mail services that are deteriorating right now. I come from a rural area, where the business hours of post offices have been reduced. Mail is often late. I think that we're seeing a deterioration in customer service in rural areas.
[English]
Mr. Radwanski: I agree with you. The report says the moratorium on closing post offices in rural areas should be indefinite - i.e., permanent, subject to, of course, what happens to the demand for mail and so forth five and ten years down the road. So one can't say permanent for perpetuity but indefinite, for the reasons I've stated in the report. Postal service is particularly vital in rural areas in the country and should be maintained. As well - and I'm sure you'll appreciate this - Canada Post is a vital presence of the national government across the country and it is important to maintain that presence in every community.
So, yes, I'm in agreement that, as I've said, rural post offices should remain open. To the extent that people studying the report, your party included, agree with the recommendations and there is all-party support for all the recommendations of this report, I'm sure it would certainly make the government's task a great deal easier.
In terms of active services, yes, I've said there should be an improvement in services, and rural areas are particularly dependent on the post.
.1145
I don't know that I can add to that, but I think the concerns that you and your party articulated and that you articulated on behalf of people in rural parts of the country have been heard across the country. That's really all I can say on that subject.
[Translation]
Mr. Fillion: I will continue to discuss rural areas, even though I would have liked to get back to my original questions.
You've certainly received the opinions of advisors to arrive at recommendation 9. Let me make a quick assessment of it. By relinquishing this Canada Post service to private enterprise, the cost would triple or would be equivalent to 300% of the current costs. Do you agree that if this recommendation were adopted and if Canada Post were to give up this service, the costs would increase for users in rural areas?
[English]
Mr. Radwanski: If what you're saying is that Canada Post prices unaddressed ad mail at a level below market rates, that it prices at a level that nobody else could sustain, and that it's therefore competing unfairly both with the private sector and with other advertising vehicles such as community newspapers, I agree with you.
[Translation]
Mr. Fillion: Mr. Chairman, my question is very simple.
[English]
The Chairman: You have had five minutes here, and you're pretty well done. We need to go to the Reform Party and then back to the government side. We can come around again on the next round.
Mr. Harper.
Mr. Harper: Recommendations 14 and 15 of your report suggest that the government direct Canada Post to bring its labour cost under its collective agreements into line with the realities of the contemporary Canadian workplace. You suggest good faith bargaining in the 1997 contract negotiations. If this fails, you suggest bringing about the necessary adjustments through appropriate actions.
What I'm wondering in the case of recommendation 15 is how you would propose the government or Canada Post proceed. What steps would be taken to ensure the union makes the appropriate changes?
Mr. Radwanski: Again, I don't think it's appropriate for me to go too far down that avenue, because the intent is to identify needs without needlessly being provocative in a pre-bargaining period. It's not for me to get deeply into the details.
Certainly there's no question that in the event of a disruption of postal services, the government has the mechanisms at its disposal to end that disruption by legislation. There are a number of ways in which the government could proceed to do that, which include, were it to choose to do so, imposing the terms of a settlement rather than leaving it to arbitration or any other mechanism.
I certainly don't need to tell the government that this is an option it would have. All I really need to say is that clearly the compensation levels, particularly with regard to pay for time not worked, particularly with regard to some lapse of flexibility and so forth, need to be addressed because they are out of sync with the realities encountered by virtually all other Canadians in the workplace.
The best way to do that is through the collective bargaining process. Were this to fail, obviously the Government of Canada cannot be weak in upholding the broad public interest.
Mr. Harper: You noted several times that you've been gratified, generally speaking, by the reaction to the report. I assume that probably doesn't include the editorial in The Globe and Mail, which you also made some passing reference to.
I'm going to read a section from that editorial, which ends in a question. It's a question I'd like you to address. It says:
- There are two possible reasons for keeping Canada Post as is. The first is the idea that people in
rural and isolated areas have some sort of right to subsidized communications. But where, other
than in first-class mail, is this the case? The price of an airline ticket is based on cost:
Montreal-Toronto flights are cheaper and more frequent than Montreal-Yellowknife. Nobody
considers this to be an issue.
- Nor would anyone question the fact that Montreal-Toronto long-distance telephone rates are
cheaper than a long distance call from, say, Halifax, to the far North. It makes economic sense
(depending on the mode of transmission). The uniform postal rate may be a long-standing
practice, but it is also an anomaly: If it did not already exist, would we want to pass a law
inventing it?
This is the question.
Mr. Radwanski: I probably would, to tell you the truth. Let me back up one notch first.
I have a problem with analyses like those of The Globe and Mail. The problem with the small-c conservative or right-wing analysis of this kind of issue is that too seldom do I see a clear reference of how ordinary people will be better off were that course of action that this analysis advocates to be implemented. Certainly, there is nothing in the Globe editorial, or in similar columns, that would clarify how ordinary Canadians would benefit.
I would argue that Canadians, particularly in the rural areas, have taken a big hit from some other changes in deregulation with regard to the railroads, to the airlines, etc. Frankly, the sources of thinking, as that of The Globe and Mail, advocate it with great enthusiasm.
In my view, there are some attributes of being together in a country that should reflect a shared will, a shared attempt to overcome some of the disadvantages of geography, particularly in as far-flung a country as Canada. Certainly, the mail is a vital life sign for people in rural areas, particularly given increased costs for actual physical transportation, increased costs for telecommunications in more remote areas - all that fine deregulatory stuff The Globe and Mail is happy with.
The least we can do in this country is say that wherever you live in Canada, you will have your basic mail service at the same price as Canadians in other parts of the country. You will have a reasonable approximation of the same kind of quality of service and attention to your needs, wherever you live in this country. At a certain point, it comes back to why we are a country, why we stay together as a society. My answer is to provide together some common services we all need.
If it were up to me, I would indeed recommend such a thing if it did not exist. I would probably recommend a great many other things that proponents of the point of view reflected by The Globe and Mail and some others would think are unnecessary. I think they are very important to the fabric of this nation and the kind of society we want to be.
The Chairman: Thank you, Mr. Harper.
Mr. Bellemare, you have five minutes.
[Translation]
Mr. Bellemare (Carleton - Gloucester): Mr. Radwanski, I would like to congratulate you on a study that is both detailed and well thought out.
Mr. Radwanski: Thank you.
Mr. Bellemare: The objective was to improve postal services in Canada. I think that you're on the right track.
[English]
I'd like to address some of the findings. In finding number one, for example, you state that the Canada Post Corporation is in no immediate financial danger. The added word ``immediate'' rings a bell. Then you continue by saying that consequently the current course imperils Canada Post's longer-term financial viability. You're ringing the bell. You're telling us on the long haul that there are financial risks associated with the course Canada Post is now following.
Subsequent to that comment, with its withdrawal from all commercial services, as you recommend in your report, how will Canada Post compensate for lost revenues and continue to become financially responsible?
Mr. Radwanski: Thank you for those questions.
The answer to the first one is yes, of course, there are long-term risks, and I detailed them in the report. The fact of the matter is they've lost money in most of their years of operation. The losses have been substantial. The review was unable to find any persuasive evidence that the continuation of the kind of approach they've used until now will necessarily produce better results in the future. Because what they're doing leaves no scope for building up any financial reserves, they're as likely to have a loss next year as a gain, and so forth. At some point they could end up in very critical financial trouble. So there is a real financial danger.
.1155
As to how they would make up the revenues, there's a whole section of the report, as you know, devoted to that, and I would refer you to page 100 of the report, where I have a table showing what the revenue impacts of getting out of competitive activities would be, as well as what the revenue gains from the 5¢ increase and from the courier industry would be, setting aside even additional revenue impacts from changes in the collective agreement and additional revenue impacts possibly from a tax, if the government wanted to impose it on flyers delivered by the private sector.
The net finding is that getting out of competitive activities and concentrating on core postal services, but with these measures to solidify the revenue base, would get rid of the anomalies that currently exist in terms of unregulated public sector monopoly, in vigorous, aggressive, and often unfair competition with the private sector; provide a basis for financial stability, because there would be a stronger financial basis; and provide money to reinvest in improved services. In fact, it's a kind of analysis we see a great deal of in the private sector these days. A business will function better if it concentrates on its core areas of competence rather than the conglomerate mentality of trying to do a bit of everything and investing a lot of resources and effort in things it doesn't need to be doing.
Mr. Bellemare: Your recommendation of hiking the price of a stamp from 45¢ to 50¢ seems very facile in my mind, and I don't think in these economic times that it would be appropriate to have a 5¢ raise. My concern is that even if Canada Post did get that 5¢ raise, there is a phenomenon, which any child could tell us, that mail today is referred as snail mail. The technology is e-mail. You get instant correspondence by using your computer, and every child in high school and elementary school is using computers, and lot of them are on the Internet.
There appears to be, to anyone who stops and thinks for a minute, a corrosion in the mail system as we know it. People are paying their accounts through banking. It's done automatically now. Anything that's monetary can be done at
[Translation]
some window in the bank or outside,
[English]
or you can make arrangements to have collection done automatically from your personal bank account. This segment of Canada Post is being eroded, and it's leaving.
Another example is a grandmother writing her grandchild a letter. That day is becoming more and more passé. If we watch TV, we know that Ma Bell is after grandma to phone, and it will cost her less than 10¢ to call every night. Competitors say that it can cost less; some will say 9¢, others 8¢, and they keep doing it. There'll come a time when very few people will write a letter in the traditional way.
With that erosion going on, where is Canada Post going now, and how can it survive financially? Where is it going financially in 25 years from now, or even in 5 years? You concern me when you say they are not building up reserves in case of....
Mr. Radwanski: Well, I don't know how much time remains for me to answer your concerns.
The Chairman: There's very little time, actually, so please give a succinct answer, because we do have a list of people that we need and want to get to. We'll be able to come back to that, I'm sure.
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Mr. Radwanski: Let me try to answer as briefly as I can. First of all, the fact is that despite the kind of intuitive evidence you cite of the decline of letter mail, the objective fact - and we did have the opportunity to take nine months to stop and reflect on it - is that letter mail volumes are not declining. They're flat and growing perhaps slightly, but they're not declining. We have not seen an absolute decline.
At the moment letter mail is co-existing with the other new modes of communication, and if anything, they're perhaps reinforcing each other. That's point one.
Point two is that the best research and expertise I was able to access, both in Canada and the United States, indicates that at least for the next five to ten years letter mail will remain very strong and a vital component of the communications mix. Beyond that, who knows? But that's the timeframe of this report, in any event.
Third, very briefly, the report states explicitly that letter mail in the long run either is a sunset industry or is not. If it is not, then obviously the important thing is to concentrate on excellence in mail delivery. Frankly, there are not many things you can get these days for 50¢, never mind for 45¢, in our society. So I don't that's an unreasonable increase. If it is a sunset industry, the thing to do is not to have it spread out into other parts of the economy taking on activities for which there's no policy reason to be in.
If Canada Post confines itself to that service for which there's a policy need and if that need fades, the role of the post office would fade. We don't need to invent a new role for it other than keeping that physical presence and perhaps using it as a contact point and so on. Either way, I think the logic of the report commends itself.
[Translation]
Mr. Fillion: What lead you to formulate recommendation 28, which seems to show that unbeknownst to the general public, the board of directors of Canada Post is made up of all kinds of people?
[English]
Mr. Radwanski: I think it's fair to say that in interviewing members of the board, which I and members of the review team did, one of our findings was that they certainly felt they were not playing the kind of role you would expect the board to play. They had very great difficulty in accessing information. They were not regarded by senior management of the corporation as having the kind of role one would expect a board of directors representing the shareholder, the Government of Canada, to have.
This recommendation says that it is essential to have people with the right expertise in that position, of course, and it is essential that the corporation understand that the board of directors, on behalf of the shareholder, the Government of Canada, is not an ornament or a rubber stamp but has a very crucial role to play. That requires, as do many things with regard to Canada Post, some significant attitude adjustment.
[Translation]
Mr. Fillion: I thank you for that very clear answer, contrary to the one I got concerning recommendation 9, which I will now get back to. My question is a simple one. Should recommendation 9 lead us to conclude that the services that people in rural areas will get will be more costly for them? Did you make that observation?
Mr. Radwanski: The service...
Mr. Fillion: I don't want to know whether Canada Post is in conflict of interest or if it receives subsidies. If, as the minister announced, this recommendation were implemented, in your opinion, would it be more expensive for people who live in rural areas to obtain this mail?
[English]
Mr. Radwanski: This isn't mail. First of all, let's be clear. We're not talking about mail. We are talking about advertising material. There are various means of distributing that. One might be through a private sector force. If the price is a reasonable one that reflects costs and a reasonable profit margin, the private sector will be able to provide it for the same kind of price.
If in fact that service is only being provided by unfair competitive practices by Canada Post, in effect by cross-subsidy, which is destroying community newspapers - in Quebec, as elsewhere, we heard very strong representations from community newspapers on this point - then obviously then obviously the broader price being paid in society for that kind of unfair activity far offsets the question of whether an advertiser might have to pay several cents more.
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[Translation]
Mr. Fillion: As a last question, I'm asking you if you still feel that your 31 recommendations remain an organic whole and if this is all divided up, will the results be different and more restricted.
[English]
Mr. Radwanski: I think I can only repeat what I said in the report, which is that obviously when you have an organic vision of a set of changes one is likeliest to achieve the recommended results if all the measures are implemented. One can't go far beyond that in the sense...it depends, there might be one or two or three or four recommendations that are at the margin in terms of overall impact, while others might be very central.
The real world being what it is, all I can tell you is what I said before. If you feel it is important that all 31 recommendations be implemented, I am sure you and your party and all the other participants will make that known, and if there were to be all-party agreement, or certainly opposition agreement, in the normal events of politics that would certainly make it much easier for any government to implement this sort of report. That's for you to judge.
The Chairman: Thank you, M. Fillion.
Mr. Harper.
Mr. Harper: I'm not sure, Mr. Chairman, that I really have any additional questions. The witness has said that he doesn't understand market-based or conservative solutions to economic problems.
Mr. Radwanski: No, please let me clarify. I do understand them, I just don't necessarily agree with them.
Mr. Harper: I don't know if you do, but what I would say as a general comment - and Mr. Gilmour may have more thoughts on this - is it's very possible that in treating Canada Post as a declining industry, as the report suggests, the best we can do is try to contain its costs as it declines, which may be a better solution than to have it half compete in cross-subsidized services.
The Chairman: Thank you, Mr. Harper.
Mr. Bryden.
Mr. Bryden (Hamilton - Wentworth): Thank you, Mr. Chairman.
Mr. Radwanski, my understanding, and I presume it's yours, is that when it comes to moving on the courier services and premium ad mail, the government wishes to examine the financial impact of discontinuing these two enterprises. Is that your understanding?
Mr. Radwanski: That is my understanding. That is in fact what the minister has said publicly.
Mr. Bryden: I notice in your report you say that ``Canada Post...does not have accounting systems that identify the actual costs and revenues...with satisfactory precision''. And you further say that the cost-accounting processes of Canada Post ``are neither...transparent, reliable nor...confidence-inspiring''.
If the minister is going to determine whether she's going to go ahead or if she's going to analyse the financial impact on premium ad mail and courier services, how can she rely on this type of data Canada Post has, which you say is unreliable?
Mr. Radwanski: That is certainly a question you might well put to the minister. I can't presume to speak for her or her analysis. I can tell you that certainly, based on the information we were able to access and our analysis overall of it - and I have some very expert people, including a senior auditor from the Auditor General's department, as part of my team and also a senior investigator from the Competition Bureau - I am satisfied that our analysis with regard to the numbers, to the extent that it is possible to make conclusions on fairly broad data, not as specific as one would wish, is sound and will stand up to scrutiny. If another set of experts accesses the same numbers, assuming there is no moving target and that they are presented with the same numbers, I would think they'll come to the same conclusions.
Can they do better? I don't know. Obviously the minister and the government feel there is value added at the very least in going over our sums, I suppose, to make sure we reach the right conclusions from the data. I certainly never have any problem with anyone double-checking my work or my findings.
Mr. Bryden: I'm not worried about your work. Your finding is that the data is unreliable. My difficulty there is that it raises the question of whether the minister is then going to have to make a subjective judgment on retaining courier services and premium ad mail based on unreliable data. In other words, it's not objective, it's subjective.
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Mr. Radwanski: The data is unreliable to the extent that it's very difficult, for instance, to answer very detailed questions of cross-subsidy or how much are they getting from this or that activity. It is certainly directionally reliable. Certainly I had no sense that I was shooting in the dark in reaching the conclusions I did.
It's unreliable in the sense that you would not be able to satisfy a community newspaper or a courier company or anybody in terms of being able to say, look, this is what's happening, these are their costs. These are their revenues in this particular activity because of the way they keep the books and the way they aggregate stuff. But I certainly have no sense that our conclusions are based on unreliable data. I think the directional data are clear enough whereby I'm quite comfortable with it.
Mr. Bryden: I'm pretty good at reading - at least I like to think so - financial statements myself. Why can I not see this same information? Am I to understand from you that I cannot see it?
Mr. Radwanski: That is correct. The reason is that Canada Post has long taken the view that because it is involved in competitive activities, information of that type is commercially sensitive. To me, and to the review, particularly given that they are an entity of the Government of Canada competing with the private sector, this is intolerable.
If the only way, apart from any other considerations, to achieve transparency in the operations of an entity of the Government of Canada is to get them out of the competitive activities they say require them to operate in a secretive way, so be it.
Mr. Bryden: In view of Mr. Radwanski's remarks, Mr. Chairman, as a shareholder of Canada Post representing all my constituents, I'd like to move a motion, if I may, which will be seconded by Mr. Murray beside me. That motion, Mr. Chairman, is that this committee summon officials of Canada Post to appear before it to disclose in camera the cost, revenue and profit financial details pertaining to premium ad mail and the operation of courier services.
The Chairman: It's a debatable motion. I should also mention to the member that in a prior meeting and prior to the request going out to Mr. Radwanski, in fact, the Canada Post people were requested to come before the committee as a follow-up to Mr. Radwanski's actual testimony today. So in fact the clerk is in the process of making that recommendation.
I have no problem with the motion. I see no objection to the motion. I don't have any problem with it at all given that the committee is already doing this in the context of the timetable before us. Thank you for the motion.
Monsieur Lefebvre and then Mr. Jackson.
[Translation]
Mr. Lefebvre: Mr. Radwanski, you mentioned earlier that businesses or industries that had some chance of success were those that dealt in a rather specific product.
The Chairman: Excuse me, Mr. Lefebvre.
[English]
I'm sorry, the motion's on the table.
Mr. Jackson, would you like to speak to the motion.
Mr. Jackson (Bruce - Grey): Mr. Chairman, I hate to pour cold water on this motion, but if a company is a private entity, which I guess Canada Post is not.... This is the difficulty with Canada Post. One of Mr. Radwanski's recommendations is that they can't be both. You can't be in the private sector and in the public sector and compete unfairly with people who sell post cards or what have you. I think he's made that point quite well.
The problem I have right now with this motion coming out of the blue is whether or not it's appropriate for people to show you their books in private or in public. I don't agree to in camera meetings. In camera meetings are only as secure as the people you have in them.
I'd just as well have the meetings open. I would like to table it until I find out whether or not it's really appropriate that the corporation divulges their financial status, puts their stuff in public.
The Chairman: Mr. Bellemare.
Mr. Bellemare: I totally disagree with my colleague who just spoke. I agree with the mover. We have a responsibility to the taxpayers of Canada. Organizations we run need to be transparent and accountable, and I think the mover was very wise in stating that just in case there are things that could be, I suppose, embarrassing or that we need to look further into, perhaps it is best we see them or look at them or talk about them in camera.
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As far as anyone running away from this meeting and giving away people's secrets is concerned, they would have to have a phenomenal memory, because I am sure the downside of that meeting is going to be that we are going to be downloaded with a phenomenal amount of material and figures to the point of being discouraged.
So I would vote in favour of the motion.
The Chairman: So you're supportive of the motion.
Mr. Harper.
Mr. Harper: Mr. Chairman, we haven't had many answers today, and this is one area where I wanted to ask some more questions, which Mr. Radwanski had valid reasons for not answering. I think the motion of Mr. Bryden is entirely appropriate. It would allow us to get this information. I'd also concur with the thought that in fact it is our responsibility to find out some of this information.
The Chairman: Mr. Fillion.
[Translation]
Mr. Fillion: I also support this motion provided it does not restrict the subjects that we will broach concerning Canada Post's money.
[English]
Motion agreed to
[Translation]
Mr. Lefebvre.
Mr. Lefebvre: You mentioned earlier that industries and businesses that had the greatest chance of success were those that concentrated on a very specific product. We could discuss this at length, but I would tend to believe in a greater diversification of products.
In the case of Canada Post, I am categorically opposed to the sale of Purolator. To my mind, that would be equivalent to cutting off one's arm. Right now, that is one of the most profitable elements of Canada Post and we must keep it.
Should we really be concerned with Canada Post being in competition with private enterprise, when this is one of its most profitable activities and allows the corporation to provide services at reduced costs?
[English]
Mr. Radwanski: I think the answer to your question is, yes, it is a very important concern because to the extent Canada Post, whether through Purolator or its other commercial activities, is competing with the private sector, it is not a fair or a balanced competition.
There are degrees to which Canada Post's market position, some of its economies of scale, some of the opportunities for direct or particularly indirect cross-subsidy or even leveraging in areas including Purolator, consolidation of shipments and so on, give it an advantage no private sector enterprise has. I think it is a fundamental principle that government should not be in unfair competition with the private sector. So I think this is a very fundamental point.
Beyond that, the question of diversification may make sense in some respects for private sector enterprises provided the diversification is successful and competent. Canada Post, as we have been discussing today and as I've noted, has lost money far more years than it has made money with this policy of diversification. It has not worked well. Point number one.
Point number two is that diversification is appropriate in the private sector. But when you have an entity in the public sector with a monopoly position and an unregulated role, it exists for a policy reason, to provide a certain service the private sector cannot or will not provide. If one goes too far afield saying, well, over and above that it's legitimate for it to do whatever will make a buck, it's very hard to know first of all how you draw the line.
We've heard complaints that they were getting into everything, including selling greeting cards and competing with small community stores, for example. By that logic they could end up in the used car business one day because it's profitable. There has to be some framework that says this is an appropriate role for an entity of the government, and that framework has to be tied to what the private sector cannot or will not do that is in the public interest. Certainly that argument can't be made with regard to Purolator or any of the courier activities of Canada Post where there is an active private sector.
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Perhaps I might digress just for a moment to offer a caveat or observation on this question of Canada Post being invited to open its books. If it were that simple that Canada Post could come to a meeting and open its books and all would be clear, frankly, the review would have concluded its work in a lot less than nine months.
I would simply make the observation that with a senior auditor from the Auditor General's department and a senior investigator from the Competition Bureau, it took us nine months to make sense of the data the way it is presented and to be able to reach certain conclusions, which is simply to say that the issues are very complex and sophisticated and the way the data are presented they are not necessarily as transparent as one might wish. It's simply a word of caution.
The Chairman: Thank you.
Mr. Jackson.
Mr. Jackson: Mr. Chairman, thank you very much. I have a number of observations. I'll be short, as I usually am. I'll go to the point and my colleagues can have as much time as they require.
For the record, coming from a rural riding, I think it's important that Canada Post's presence be there and I commend the minister for keeping it.
Recommendation 7 I completely agree with, that the government direct Canada Post Corporation to withdraw from all competition with the private sector in areas of activity outside the scope of public policy responsibilities for providing postal services. I have had a lot of complaints from people from the riding of Bruce - Grey with regard to the sale of greeting cards, etc.
Recommendation 17 I also strongly agree with, that Canada Post has a responsibility and therefore it should break even and we shouldn't have this double private sector and public sector image.
The culture of making a profit is that you can't do that when you're being protected. If you want to be the heavyweight champion of Ottawa, I think you have to fight everybody else. You don't just do it in Ottawa, not be on the same playing field as other competitors.
I also liked recommendation 17. I think recommendation 17 is very important. We are a very large country and it's very important that the presence of some of the work the Government of Canada does is impressed on the local population. There's not been a lot of that within the last number of years by many members of Parliament. There's a real divisiveness to break up this country and I disagree profoundly with that.
The question I have, Mr. Radwanski, and you answered parts of it earlier on, is why Canada Post should be operated by the government and not completely privatized. There's a mouthful.
Mr. Radwanski: To try to give it to you in fairly condensed form, first of all, I believe, and the review found, that mail is still a vital public service throughout the country, particularly in rural areas. That's point number one.
Number two, if you're going to privatize, you either privatize with the exclusive privilege or without the exclusive privilege. If you privatize with the exclusive privilege, then all the problems this report found with regard to Canada Post operations now are further magnified. What you would then have is an unregulated private sector monopoly competing with the rest of the private sector and carrying out that competition on the basis of a market size and strength it built up with a grant of public funds and a monopoly. It'll be a nightmare.
A private sector monopoly with absolutely no restraints, no regulatory framework, no nothing - regulatory frameworks we've already discussed. Plus, if it's in the private sector, what's to stop it from saying it's not profitable to provide certain key services or to serve rural areas or what have you? The government would then be in a position probably of having to subsidize out of general revenues some of those activities. So it's a step backward from independence, not forward.
If you were to privatize it, as some including a Globe editorial seem to suggest, but without the exclusive privilege, you have two problems. One, you have a private sector entity instead of something that is concerned with public policy and with providing uniformity of service and uniformity of price and universality of service. Two, you have a fragmentation of system.
There'd be lots of enthusiasm for providing service in lucrative urban areas, much less enthusiasm for providing it, certainly at an affordable price, in more remote areas, rural areas, thinner population areas, and so forth. Again, you end up basically with a dog's breakfast of fragmentation. You still end up needing some kind of super-body, some kind of regulatory mechanism or something to ensure everybody even gets mail service, because the market might not provide it everywhere.
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On top of that, you would probably end up having to subsidize one way or another services in those areas where the profit motive alone isn't enough to provide the service. At the end of the day, the question is who would benefit.
I believe I said in the report this is a solution in search of a problem. Virtually every country in the world has a public sector postal system. Even Britain, at the height of the Thatcher privatization wave, stopped short of privatizing the postal service. Margaret Thatcher, of all people, said that she understood why the British people would not want their postal service in private hands. She was the godmother of privatization.
If someone wants to argue for privatizing the postal services or for doing away with exclusive privilege, I think the question they have to answer is how the ordinary Canadian, not only in Toronto but also in Moose Jaw, Yellowknife, Iqaluit, or Bay Bulls, Newfoundland, would be better off as a result.
Neither the Fraser Institute, in calling for this kind of thing, nor other advocates of it, when I put the questions to them, directly were able to answer that. I saw nothing in the position taken by The Globe and Mail or by writers who've written columns on the subject that for a minute addressed the public interest, which should be the core concern of public policy.
The Chairman: Thank you, Mr. Jackson.
Next is Mr. Murray, who's been waiting so patiently, and then Mr. Bellemare.
Mr. Murray (Lanark - Carleton): Thank you, Mr. Chairman.
Mr. Radwanski, I'd like to return to recommendation 12. I did not see the editorials in either The Globe and Mail or The Toronto Star, but I'm interested in the philosophy that underlies recommendation 12. In view of your recommendation 8 that the corporation divest itself of Purolator for a market value, I assume by that you mean they never should have bought Purolator.
That may not be a fair statement, but looking at the logic of this, if the government were to direct Canada Post to divest itself of Purolator and the courier companies were forced to have a stamp - what I see as a tax - imposed on every shipment, Canada Post stands to gain big time from its one-time ownership of Purolator. I imagine that we're looking at tens, if not hundreds, of millions of dollars a year in revenues according to Canada Post as a result of the stamps being applied to the millions of pieces of courier mail that, I assume, criss-cross the country every day.
It strikes me as a windfall for Canada Post, which has nothing to do with the job of delivering the courier shipments. I'm interested in the philosophy behind that, in why the courier companies or their customers, more correctly, should have to pick up the tab.
Mr. Radwanski: No. First of all, we emphasize the courier companies, not the customers. I think you ask a very important and very serious question, and I appreciate the opportunity to clarify it. Forgive me if I take a few moments to go over the argument.
The rationale behind Canada Post being in competitive activities - and they did this with the approval of the government of the day; they didn't do it willy-nilly by itself - was that with stamp prices as they were, the corporation was unable to break even, let alone build up any reserves purely from delivering the mail. Therefore, there was a line of reasoning that said it should get into all these unrelated or tenuously related activities simply to make a profit.
Purolator was the furthest extension of that, but Canada Post was already in the courier business through priority post. That activity as well is included in the recommendation that they get out of the courier business, so it's not just Purolator. That's one side of the equation, and it's revenue driven to begin with.
The other side of the equation is that, as you know, Canada Post has an exclusive privilege, a monopoly, over the delivery of mail. Courier companies in the private sector operate by virtue of an exception to that exclusive privilege, which nominally is tied to urgency. The test of urgency is that you're willing to pay at least three times the normal price to send a package by courier rather than by Canada Post.
The courier companies argue that Canada Post competes unfairly - I found some evidence that it does - and that they are suffering heavy losses as a result, that they can't expand, they can't do this, they can't do that, that Canada Post is being an unfair market price leader and so forth.
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First, there's a legitimate concern on the part of the courier companies; second, there's Canada Post's need - not for itself, but to provide the service we want it to provide - to have an adequate revenue base; and third, there's Canada Post's exclusive privilege. It has a right, in a sense, to be doing all the things it's doing; it's just wrong for it to be doing it as a matter of public policy.
The solution is to give the couriers and the public interest what is appropriate by saying there's no reason for Canada Post to be in the courier business. There's an active and vibrant sector that can do the job, there's no policy reason for it to be done by Canada Post, and it's not fair competition, for the various reasons I cite in the report, when they do do it. Fine.
On the other hand, Canada Post needs revenues, and if the couriers are getting something they want but to which they have no inherent right because it is a matter of operating by sufferance in an area of monopoly, let's solve all those problems in one shot by saying Canada Post gets out of it, but for the couriers, as an industry, in exchange for an end to a situation that they say is painful for them and adverse in a business sense and to keep the situation consistent with the public interest, let them make a contribution too. Let them stick on a stamp. It's not a tax, it's simply a further application, slight extension of the exclusive privilege that already exists. I should add that it's not a very exotic remedy. It already exists in the U.S. postal code. It just isn't often used.
One of the ways in which you can send stuff by private means in the U.S., in violation of the monopoly, is simply by affixing a stamp. Then you can do what you want. In the U.S. that exists side by side with this urgency provision - I believe it's also three times the face value - and it's the urgency provision that has predominated. Here we're recommending that you tie it in with the urgency provision, that you don't make it either/or. The logic is that you solve a problem by protecting the revenue base and the public interest.
Mr. Murray: I wanted to ask a quick question about community newspapers. I know they appeared before you collectively as well as individually, and I don't see any recommendations that expressly relate to - unless I've missed them.
Mr. Radwanski: Oh, they do. They do. The key concern of community newspapers was unaddressed ad mail. The problem there is simply that Canada Post, by competing in unaddressed ad mail, is siphoning off insert revenues from community newspapers -
Mr. Murray: Wasn't there a questioning of timing as well, though, of the newspaper being held back?
Mr. Radwanski: That problem would be resolved if Canada Post was not in the business of unaddressed ad mail. Canada Post would no longer have a conflict of interest that gives it an incentive not to be particularly good as a provider of services to newspapers.
The Chairman: Thank you, Mr. Murray.
Mr. Bellemare and then Mr. Bryden.
Mr. Bellemare: Mr. Chairman, Mr. Radwanski made a comment to one of the members regarding Mr. Bryden's resolution or motion to have Canada Post come in and discuss their books. His comment was something to the effect that it took nine months of what appears to be frustration to get to understanding what was happening in the books. That, with the help of one of the senior auditors of the Auditor General's office....
I think it would be most important - most important, I insist - that the meeting we have with Canada Post be divided into two parts. For the first part, this senior auditor from the Auditor General's office and Mr. Radwanski can be present to brief us on that topic and their concerns. For the second part, Canada Post can be present to assist us in a question and answer period.
Mr. Chairman, if the committee agrees, I think this is the process we should follow. I would beg my colleague Mr. Bryden to comment on my suggestion.
The Chairman: Mr. Bellemare, are you making a motion to this effect, requesting -
Mr. Bellemare: It's a request. I don't think we need to make a motion, unless there's a disagreement. Then I will make a motion and we will bring it to a vote.
The Chairman: Okay.
Mr. Bellemare: I think there could be consensus here.
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The Chairman: Prior to moving to a consensus, Mr. Bryden, would you like to add to the comments made?
Mr. Bryden: Well, I'll say what I have to say, as I would have done had I followedMr. Bellemare. It pertains to his remark.
I certainly support bringing an expert in to participate in these figures, but may I make the observation, Mr. Chairman, with due respect to Mr. Radwanski, that the information I request by my motion is the type of information I would expect to be received by the board of directors...by Canada Post. Any organization or corporation that couldn't supply this information within the space of one hour to its board of directors should not be in business, Mr. Chairman.
I would expect this to be an entirely reasonable motion, with the assistance of the expert of the Auditor General. I would like to have that, because he has already reviewed these figures and he will certainly tell us whether Canada Post is delivering information in an expeditious fashion. I would just stress, Mr. Chairman, I just can't imagine a corporation not being able to supply this information and being still in business.
The Chairman: So along with the request for the Canada Post officials to come, we will also request an individual from the Auditor General.
Mr. Bellemare: Yes, at that same meeting. That's very important. We do have to schedule the meeting. I think the witnesses we're going to be listing on different subjects should be pushed down the line and we should accelerate this by having this topic dealt with, if not at our next meeting then at the meeting after that. Otherwise, we'll be talking about it after the election.
The Chairman: Okay, Mr. Bellemare. I will refer it to the steering committee, of which you are a member. You can bring it forward. We can decide on it in the steering committee.
Mr. Bellemare: Thanks a lot.
The Chairman: Okay. Are there any further questions? Mr. Bellemare, do you have a question?
Mr. Bellemare: Well, I have a question for the committee on the topic of today. My comments or suggestions or motion regarding Mr. Bryden's...that's finished now. I want to pass on to a very short question.
The Chairman: For Mr. Radwanski?
Mr. Bellemare: Yes.
Mr. Radwanski, which of the report's recommendations that have been rejected by the government gives you the most concern and why?
Mr. Radwanski: Well, I hope you'll forgive me for answering the way I'm about to answer. As I said before, I'm quite comfortable with the position the government has taken; therefore, by definition, if I'm comfortable I am not concerned. If I'm not concerned, I can't be more concerned about one thing than I am about another. I know you'll forgive me, but that's the best answer I'm going to give you.
Mr. Bellemare: You are an awful skater, let me tell you.
Mr. Radwanski: I thought I was a rather good one.
Mr. Bellemare: You have just finished nine months, at great cost to the tax community, of making recommendations and you don't have concerns about some of your recommendations being put aside.
Mr. Radwanski: Sir, it is not for me to be concerned or unconcerned. My role was to do the best, most open, most accessible, even-handed review of the mandate of Canada Post possible. This I am comfortable that I, with the assistance of an excellent and superbly dedicated team, have done. At this point the ball or the torch or whatever metaphor you want to use passes to other hands. It is certainly not my role to be a commentator either on subsequent steps taken by the government or on positions taken by any other parties.
I don't believe, as I said before, that the proper role for the author of this kind of independent report is to become any kind of an advocate or gadfly. It's just not how I see that kind of task; therefore, I won't be drawn into a detailed comment on this or that aspect of the response, other than to tell you, in all candour, that overall I'm comfortable.
Mr. Bellemare: I find your answer overly cautious. Thank you.
The Chairman: Thank you, Mr. Bellemare.
Thank you, Mr. Radwanski, for coming to the committee today and discussing your report. I'm sure we will be reviewing that report in further detail when we have the Canada Post officials before us.
This meeting is adjourned.