Release of the Canada Post Mandate Review Report

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National Press Theatre October 8, 1996 10:30 a.m.

Good morning, ladies and gentlemen.
Today the government is releasing the results of the independent review of the mandate of the Canada Post Corporation. This Review was launched on November 6th of last year to examine financial and policy issues related to the future of Canada Post, so that the government could ensure that Canadians receive the most efficient and cost-effective postal service possible.

I want to thank the person who chaired the review, Mr. George Radwanski, for his work. In preparing his report, Mr. Radwanski consulted Canadians from coast to coast, and the report makes a significant contribution to understanding how Canadians view their Post Office, and what they expect from it in the way of services and behaviors. Importantly, the report indicates that 76 percent of Canadians are generally satisfied with the service they receive from Canada Post.

But the report also identifies many issues where change is essential. This government takes these issues, and the report, very seriously.

Given the major changes being proposed, I am compelled to provide some context and indicate areas where the government is prepared to act immediately.

The government recognizes that the Canada Post Corporation is a large and complex organization, which touches all Canadians. It is also a major force in Canada's economy, and one of the country's largest employers, with more than 63,000 full and part-time employees. Canadians have invested over $1.4 billion in Canada Post since it was made a Crown Corporation in 1981. This is over and above the initial resources that were transferred to the Corporation. It is a valuable asset for Canadians which the government has an obligation to protect.

Decisions on its future cannot be made lightly, and the government needs to carefully analyze the recommendations in the report before providing a complete response. In addition, Canada Post — after many years and millions of dollars of subsidies — is no longer dependent on taxpayer support. The report I am releasing today makes dramatic recommendations for altering Canada Post's financial basis. Before the government proceeds further, we must be certain that this approach is feasible, and that we understand fully how it will impact Canadians.

I want to emphasize that the government regards Canada Post as a significant federal institution, and that it sees Canada Post continuing to carry out a public policy role based on the provision of mail to all Canadians, no matter where they live. Therefore, this service must continue to be accessible and available at a uniform rate for all Canadians, whether they are mailing a letter within downtown Montreal or from Yellowknife to Halifax. Canada Post will continue to operate as a Crown Corporation as long as it carries out this role, and will continue, for the foreseeable future, to have the exclusive right to deliver letters.

Whether Canada Post should continue to offer services beyond this role is a legitimate debate, and Mr. Radwanski in his report has offered the government some views. According to Mr. Radwanski, Canada Post, in the pursuit of financial stability, has lost its focus on mail delivery and service to the public. To the extent this is correct, this must change. On October 2nd, I met with the Chair of the Canada Post Corporation, Mr. André Ouellet, and asked that cost-effective plans for improving service to Canadians be developed forthwith. I have reiterated this in a letter to Mr. Ouellet and in a conference call with the Board of Directors of the Corporation earlier this morning.

On a related issue, of interest to many who live in rural areas, the government has decided that the moratorium on the closure of rural post offices will continue.

The report I am releasing today identifies for the government some public unease with how Canada Post operates. I would like to comment on the criticisms of the Corporation, in submissions and during public meetings, concerning unfair competition. The report notes a number of disturbing incidents which influenced some of its recommendations.

My response is this: The federal government is expected to embody certain values and principles in how it carries out its affairs, in particular: fairness, transparency, openness and accountability. Canada Post is part of the federal government and must live up to these standards. As Minister Responsible for Canada Post, I expect immediate corrective action wherever these values and principles have been compromised. To this end, I have asked Mr. Ouellet, as Chair of Canada Post Corporation, to develop an action plan for improving the transparency of Canada Post's activities, and addressing these issues.

Many of these incidents, that I will call "corporate aggressiveness", appear to have occurred in the delivery of commercial services. The remedy proposed in the report of the Mandate Review is for Canada Post to withdraw from these services. As I noted earlier, the Corporation must continue to be financially independent and we must safeguard this financial stability.

The approach recommended by this report for improving services and replacing revenues from the delivery of commercial services is to increase stamp prices and to impose a levy on courier services and admail. As I noted earlier, the government must assess the financial implications of the report as a whole. Therefore, I am not prepared to accept the recommendations for an increase in the price of first-class postage, or to impose levies on couriers or admail. This government has no desire to add to the financial burden for Canadian taxpayers or businesses through increased costs for postal services.

Canadians deserve better postal service, but it should not be dependent upon higher prices. Small business, and individuals – especially those outside urban areas – would bear the brunt of these increases and the government cannot accept these recommendations without knowing how these groups would be affected, and the implications from a job creation perspective.

As I have noted, Canada Post is a valuable asset for Canadians. For this reason, the government needs to study the full ramifications of the recommendations in the Mandate Review report before it decides how to respond. The government has retained financial advisors to assess the impact of the recommendations in the report on Canada Post's ability to remain financially self-sustaining. After a competitive process, the firm of TD Securities Inc. has been selected to carry out this analysis. I expect their report to provide me with expert financial advice.

Although the withdrawal from all commercial services by Canada Post, as recommended in the report, is an issue which requires further study, there is one area where the government will move quickly. Unaddressed admail, or junk mail as it is commonly called, is an irritant across the country and Canadians simply do not understand why it is delivered by their Post Office. I am announcing today that Canada Post will withdraw from the delivery of economy unaddressed admail, where alternate capability exists. I have also asked the Chair of the Canada Post Corporation to examine the feasibility and potential impact of withdrawing from the delivery of premium unaddressed admail. I am sympathetic to the fact that Canada Post employs a large number of Canadians in its economy unaddressed admail service, and I have therefore asked the Corporation to implement its exit in a manner that minimizes the disruptions for these employees, as well as customers and suppliers.

Also in the area of commercial services, the government is not prepared, at this time, to accept the recommendation for withdrawal from courier services. Accordingly, Purolator Courier is not for sale. However, as long as Canada Post remains in this line of business, it must compete on a level playing field. As I noted earlier, Canada Post's operations must be conducted under the tenets of fairness, transparency, openness and accountability.

The government will consider the rest of the recommendations of the report of the Mandate Review, recognizing that there are certain basic principles which must guide our deliberations:

Affordable, universal postal service is essential for Canadians.
Canada Post is a valuable federal institution. Canadians have invested in it, and the government must protect this value.
Canada Post will remain a Crown corporation and not be privatized, as long as it continues to fulfill a public policy role.
Canadians should not be asked to return to an environment in which the government must subsidize lettermail.
These principles provide the backdrop for dealing with the recommendations of the Mandate Review, and, in the case of certain recommendations, make the government's direction clear.

In closing, I would note that this report is the result of a great deal of work, not only by the Mandate Review Chair and staff, but by the hundreds of Canadians who took the time to prepare submissions. It deserves serious consideration and the government will examine it carefully. I think it is important to underline that these issues are complex, and that interests legitimately diverge. Perspectives honestly differ. I want to make sure that, in shaping the government's policy, I hear Canadians' reactions to the role for Canada Post that Mr. Radwanski envisions. To this end, I will be meeting with a number of key stakeholders before making recommendations to Cabinet.

I trust these remarks have helped to put the report in context for you, and give you some understanding of the government's intentions for addressing the concerns raised in the report. I would be pleased to answer your questions; however, I am sure most of your questions will be best put to Mr. Radwanski.


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