Government Operations Committee on May 29th, 2024

[The Chair, Conservative, Kelly McCauley]

Thank you very much. That is our time, I'm afraid. Perhaps we can get to it in the next round.

We have Mrs. Kusie, please.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Mr. Chair.

Thank you very much, Mr. Ettinger, to you and your team for being here today.

In Canada, the theft of mail is an indictable offence under section 356 of the Criminal Code and carries a maximum penalty of 10 years in jail or a $5,000 fine. I'm sure, as you well know, it's certainly not an offence to be taken lightly.

I have been a victim of mail theft before, so I have a significant appreciation for how deeply this can affect a Canadian. I had portraits that I was waiting for taken from my mailbox at one point in time.

This is not a small crime, nor is it taken lightly under the Criminal Code. Therefore, do you think that $500 is a significant enough penalty for a member of Parliament who has admitted to stealing mail from Canadians?

[Doug Ettinger]

Let me just say this: The sanctity and the security of the mail is critical to us. In fact, we have a whole department of security that reports to Manon Fortin, which is engaged on a 24-7 basis. We have a control centre here in Ottawa. We have eyes on all of our facilities across Canada. Mail theft and stealing community mailboxes and others continue to be a problem. We're very concerned about that. We're watching and dealing with that closely.

Whether $500 is appropriate, I think, is up to politicians to really decide. It's not my decision. However, the way we look at the mail is just that—it's critical. We do everything we can to protect it from being stolen, but there are cases where that happens.

We work closely also with the RCMP and other law enforcement agencies, and we have good contacts with them. We're integrated, really, with them when things are happening. They help us, we help them, and so on.

However, in terms of the $500, I won't comment on that. I don't think it's my purview.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I'm very glad to hear of the security measures that you are taking in an effort to ensure that this doesn't happen again, but we do have another election coming up within 18 months. Are you concerned that this might occur again, given that it has occurred in the most recent election? Does that concern you? Do you think it might be a possibility?

[Doug Ettinger]

Well, of course, anything's possible, but while I'm extremely focused, and our security team is focused on this to ensure that it doesn't become a problem, I believe we have it under control. We do have issues. I get a nightly report on what security issues have occurred the night before across the country. There are issues there.

I don't think it's at a level that will threaten.... It won't threaten an election. There is no issue in that regard, from my standpoint and from everything I'm seeing. It's never been an issue that, internally, has been raised to us as an extreme situation. It's under control. We have a good team. A lot of the team are ex-RCMP or ex-military, and that's one of the reasons why we have such good communications with those law enforcement groups.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Excellent. Thank you for that.

Of course, as Conservatives, we're always very concerned about the good use of taxpayers' dollars and are always interested as to where their money goes. I'm seeing in a response, from the appearance of your last colleague, that there are 408 employees currently at Canada Post who are classified as executives.

Could you please share with the committee who earned bonuses this last year out of the total number of executives, the 408?

[Doug Ettinger]

Let me just say this. Let me put it in context first and foremost. Our payroll, annually, is $4 billion. That's just salary and wages. We also have another billion—I'm rounding here—in benefits, for a total of $5 billion, so it's $10 million a day. It is huge, and we do have a bonus program. It's called CTI, and it was developed back in 2010 or 2011, I think. It's for all employees, and it's never paid out a dime in its history because our financials prevented that.

[The Chair, Conservative, Kelly McCauley]

Thanks. That is our time.

Mr. Sousa, please.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Thank you, Mr. Chair, and thank you, Mr. Ettinger, for being here today.

You spoke, earlier, about the excitement of going to an unveiling of a stamp. In 2003, I did attend one of the unveilings of a stamp of your very first mail carrier for Canada, Pedro Da Silva. In 1693, he was the first in New France to deliver mail from Quebec City to Montreal. He was celebrated. He's actually on a plaque outside your office in Montreal. It was unveiled on the 50th anniversary of when the Portuguese first came to Canada through an arranged agreement with Canada and Portugal in 1953 at Pier 21 in Halifax. My dad was on that very first boat. The community was very excited about this anniversary stamp, as well as acknowledging this individual as having been a Portuguese immigrant back in 1693 to deliver mail. Thank you for that, and thank you for the acknowledgement for the community.

An official from PSPC came to this committee back on April 8, 2024, and talked about the similarities of the challenges Canada is facing to Australia's. The response was that we needed to be more creative. You spoke about the five recommendations you've made. One of them is to refresh the regulatory approval systems. I would be interested in knowing more specifically about what regulatory changes you would propose. Can you discuss the Australian model and how it's affected their services in rural communities?

[Doug Ettinger]

Thank you for that question. I appreciate that.

I happen to know the Australia Post CEO very well. In fact, he came in by Zoom to our latest board strategy session in Montreal to share some of his learnings with us.

I'll just say that in their country, they've been able to get a little more flexibility around their operating model—their delivery model. I'd say if there's one key word that I want to leave you all with today, it's “flexibility”.

Let me just say this: Our operating model was built back in the day—really in the last century. That sounds a little dramatic, but it was built for a paper-based economy—almost pre-Internet—and that is holding us back. I would say right now—and forgive me for this terrible analogy—we are driving a 1967 Chevy in a Formula One race. That's where we are right now. We're tenacious and we have lots of new parts in the car, but it's a tough one.

We need more flexibility to compete. We need more flexibility in how we deliver, like weekend deliveries, evenings or next day. We need flexibility in our regulatory structure to be able to respond faster. Flexibility in pricing can help us with some of the financing issues we've had. We also need flexibility to invest and improve service—to invest more in our people and invest more in safety.

We have to continue to modernize Canada Post. It's a wonderful organization that is a platform for change across Canada. People care about it. We know that.

We're in a fight—a dogfight—for every parcel out there right now and we're up against some of the best competitors in the world. I don't have to name them, but they're global icons, in terms of both shippers and e-commerce.

The flexibility we need is along those lines. It's basically modernizing Canada Post. I believe we can do it. I think we have the talent, the tenacity and the people to do it.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Can you explain the “rural” definition for the moratorium? Should it be updated?

Obviously that's the biggest challenge that's being faced. In the urban centres, we're okay. I mean, we have a lot of competition, but there is a large concentrated population to make it worth your while.

Explain to me what it is and how do we stay true, in essence, to the intended purpose of the rural definition for the moratorium? What are we going to do to make it better?

[Doug Ettinger]

That's great question and a really important question.

The moratorium, as you know, has been in place for 30 years—since 1994. A lot has changed in Canada, as I mentioned earlier, so I won't repeat that.

The list was created by the government at the time, not Canada Post. Many of the post offices in that moratorium were rural at the time, but are now very much in urban areas. I'll just pick a couple. Stittsville, outside of Ottawa, was very rural and is very suburban now. There's also Richmond Hill and Milton. These areas were rural at the time. They're sure not rural any more.

The moratorium is protecting those post offices, which typically have a franchise service nearby—within a couple of kilometres. There are quite a few of those in Canada now.

My concern around that is it may be stopping us from getting the right resources out to the rural areas where we need it even more. You're well served in the urban areas and, unfortunately, well served by our competition, which is essentially cherry-picking the top seven cities in Canada. They basically stay in that lane, within 200 miles from the U.S. border, and don't really....

We actually deliver some of their product north. We go north. We go everywhere every day, so we're getting cherry-picked to death.

[The Chair, Conservative, Kelly McCauley]

I'm sorry, Mr. Ettinger. We're past our time. I have to cut you off.

It was an interesting answer and, Mr. Sousa, I appreciate your opening comment. It was interesting to hear.

It's Mrs. Vignola next, but before we start, colleagues, could you just watch the clock and try to get your questions out in an appropriate time for Mr. Ettinger to answer?

Thanks very much.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you, Mr. Chair. I'll make sure I stick to my time.

Earlier, my colleague mentioned Australia, a country that's essentially a continent in and of itself and that has its own challenges in terms of rural and isolated communities.

When I talked about examples from other countries earlier, I was thinking of what Australia and the United Kingdom are doing with drone deliveries.

What can be learned from that? How does the Australian experience compare to ours? How can we apply their best practices, and how can we learn from their mistakes?

[Doug Ettinger]

To Mr. Sousa's question—I didn't fully answer it—I'm talking to the CEO of Australia continuously. In fact, I'm going to be seeing him in a few weeks. We joke that we're very similar countries. We have snow, they have sand, but otherwise we have a lot of similarities. We have a lot of empty space too. Again, the population density in Australia is actually lower than Canada. We're two of the lowest in the world for population density. They're three people per kilometre, we're four per square kilometre, so we have the same challenges. If you look at most of the G7 countries—and again, I meet with them continuously—they're all struggling with the very same issues. We compare notes. We're talking about all these things.

One thing is that, in Australia, they're able to use electric vehicles quite well in that marketplace. They're able to develop a pricing structure, with their government, that works quite well to generate funding so that they can have the funding to turn around the company. That's worked well.

I was on the phone, honestly, last night with Australia about IT because IT is really behind the scenes, a really big factor on e-commerce. We're connected to every retailer in Canada, so if that isn't right, the shipment doesn't happen and there are problems with the customers. It's the behind-the-scenes hero in all of this. They were asking us for our learnings on some of the changes we've made to bring IT in-house, to get world-class IT right in close with our business units to make sure we're working together, so we're helping each other all the time.

[The Chair, Conservative, Kelly McCauley]

Thank you very much, sir.

Mr. Bachrach, go ahead.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Mr. Ettinger, you mentioned...I believe you called them “multinational e-commerce giants” that are eating Canada Post's lunch in the big urban areas, and that you deliver their stuff to the north, to rural and to remote communities.

What's happening in the communities I represent is that people are trying to order things online because there are very limited retail opportunities in communities of 100 people, and they are getting gouged for shipping costs to rural places, so these global multinational e-commerce giants are getting a deal. You're giving them a bulk deal because they ship so much stuff with you, and then they're marking the products up to the point where the shipping can cost more than the product. People on Haida Gwaii have to spend $150 to get a small order from an office supply company. This is absolutely wrong.

I'm not suggesting that this is the doing of Canada Post, but these companies are using your postal codes to determine which communities to gouge. How do we stop this? What's the role of the federal government in stepping in and saying it's absolutely unacceptable that these companies are forcing rural residents, residents in remote communities and in Canada's north, to pay through the nose for a service that our government is providing via a Crown corporation funded by taxpayer dollars? How do we address this?

[Doug Ettinger]

That's an excellent question. I'll just say, again, from our standpoint that the focus is on service. Recently, just as one example, we're working with indigenous communities as well. We upgraded something like 45 post offices in the last year or so. We built four new community hubs on first nation land—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

[Inaudible—Editor]

[Doug Ettinger]

I'll come to it—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Okay. We have just 2.5 minutes.

[Doug Ettinger]

I'm sorry. I'll be quick.

We opened a brand new post office in Iqaluit—the number two post office. It's all about service—

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

However, none of that addresses the problem I just mentioned.

[Doug Ettinger]

Right, and so I think that's the purview of the government to figure out what the.... I'd certainly be happy to provide input on that. Our job is to serve the north and remote, to serve it the best way we can and, as I said earlier, to charter flights at our cost, which we should be doing, to the north to make sure they have these products. They don't have a lot of choice, and that's concerning to me. It's high cost, but that's outside of my bailiwick, in my opinion. I think government should look at that.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mr. Genuis, please go ahead, sir.