The Alberta Federation of Labour (AFL) is pleased to have this opportunity to express its views on the mandate of Canada Post. The AFL directly represents the interests of the 105,000 Alberta affiliated union members and their families.

Moreover, the Federation has historically attempted to defend the interests of all working people in the Province whether organized or not.

This review of the mandate of the Canada Post Corporation comes at a very inauspicious time for those individuals and organizations who support a continued and evolving role for a publicly-owned postal corporation.

There has been a sharp attack on crown corporations over the past decade. The corporate sector continues to demonstrate a vocal hostility toward public enterprise of any kind, and governments, regardless of election promises, have acquiesced to the demands of the business community.

PetroCan and Air Canada have been privatized and the Canadian National Railway is on the block. The CBC has been undermined by continued deep cuts to its budget. Here in Alberta the government telephone and liquor stores have been sold.

Given the current political environment, it is small wonder that the Alberta Federation of Labour approaches this review of Canada Post with trepidation. The fact that this review is being conducted on the behest of business interests directly in competition with Canada Post, the Coalition for Canada Post Accountability, does nothing to allay labour's fears that this is intended to be the first step toward the destruction of another crown corporation.

Nonetheless, the Federation is convinced that a compelling argument can be made in defense of the current mandate of the Canada Post Corporation, and that this review should ultimately recommend continuation and even expansion of the role of the Corporation.

What is the Mandate of Canada Post?

The Government of Canada clearly established its expectations of Canada Post in Bill C-42, where the Corporation was given the following mandate:

Section 5(2)
(2) While maintaining basic customary postal services, the Corporation, in carrying out its objects, shall have regard to:

1. the desirability of improving and extending its products and services in the light of development in the field of communications;
2. the need to conduct its operations on a self-sustaining financial basis while providing a standard of service that will meet the needs of the people of Canada and that is similar with respect to communities of the same size'
3. the need to conduct its operations in such manner as will best provide for the security of mail;
4. the desirability of utilizing the human resources of the Corporation in a manner that will attain both the objects of the Corporation and ensure the dedication of its employees to the attainment of those objects; and
5. the need to maintain a corporate identity program approved by the Governor in Council that reflects the role of the Corporation as an institution of the Government of Canada.

Rather than dealing with this difficult mandate as a whole, it may be more useful to examine it in order under the assumption that order.

1. Maintaining basic customary service

This is the primary mandate of Canada Post; the efficient and timely sorting and delivery of the mail. Canada Post has historically provided a commendable level of efficiency in the basic business of delivering the mail, with 95% of all mail meeting established standards for speed and accuracy of delivery.

The exclusive privilege of Canada Post (Section 14(1), Canada Post Corporation Act) to handle letters to addresses in Canada was granted specifically to guarantee a source of revenue that would allow Canada Post to ensure universality of service.

Removal of this exclusive privilege would, in fact, cripple the Corporation's ability to provide the same quality of service at the same cost to all Canadians. Currently, mail delivered in high volumes between urban centres in effect subsidizes the much more expensive provision of postal services to small rural or isolated destinations (e.g. Inuvik, NWT or Indian Cabins, AB).

The for-profit businesses who wish to "compete" with Canada Post would almost certainly restrict their services to the highest density least expensive mail corridors, undercutting Canada Post's ability to provide universally and equal service. It would also be safe to assume that a 'user pays' philosophy would remain the standard in private sector mail delivery, so that Canadians would inevitably be paying widely fluctuating costs for mail, depending upon volume and geographic location.

The Alberta Federation of Labour strongly recommends that Canada Post continue to have exclusive rights to mail delivery and retain its mandate to provide basic customary service.

There is one place where Canada Post has failed badly in this primary mandate. That is its failure to provide door-to-door delivery to all Canadians. Nearly 2.4 million Canadian businesses and households (24% of all mail delivery points) do not have door-to-door delivery. This basic inequality in service is unfair and unacceptable. In Edmonton, for example, there are neighbourhoods where half get door-to-door delivery and half do not. For many seniors, physically disabled people and single parents, any travel outside the house can be difficult or impossible -- particularly during winter conditions.

The Federal argues that it was to avoid these specific kinds of inequalities that the 'exclusive' right to mail was awarded to Canada Post. There is absolutely no reason why the Corporation should not be required to do so.

2. Improving and extending products and services

This clearly provides the Corporation with a mandate to extend its services in response to new communication technologies.

Although the business sector may object to this open-ended clause, it is difficult to suggest that Canada Post not adopt new technologies. Such an artificial constraint would freeze the Corporation in time and inevitably transform it into a comparatively less and less useful or efficient service.

The business sector argument seems to imply that new communications technologies are the sole preserve of the for-profit sector. Historically, this has not been true. For instance, with the advent of regular air service in Canada, the post office initiated air mail service.

The better question is: why should new technologies be the preserve of the business sector? Communications companies generally pay far less generous wages and benefits than Canada Post. Surely they will be able to compete for a share of the market against what they denigrate as the unproductive public sector.

Then there is the accusation that Canada Post is illegitimately subsidizing its other operations with letter mail revenues. Despite a National Transportation Agency review that explicitly stated that there was no evidence of cross-subsidization, these charges continue to be levied.

Moreover, it may be a case of the pot calling the kettle black. For example, one of the reasons weekly, enforced-circulation newspapers are in the ad mail business is because they already have a door-to-door delivery system in place for their publication.

There are no complaints that weekly newspaper are cross-subsidizing their ad mail business with newspaper revenue. In this case, it is just a natural business advantage being cleverly exploited. Apparently it is only illegitimate for Canada Post to use an existing strength to increase revenues.

3. Conduct operations on self-sustaining financial basis

This is a logical and wholly justifiable requirement. It is likely the prime motivation behind the transformation of Canada Post from a government department to a crown corporation.

When considered with requirements to meet the needs of Canadians and to maintain postal rates as low as possible, this objective directly contradicts accusations of cross-subsidization. Under this mandate, it would be possible to have other operations subsidize letter mail, but clearly impossible to have letter mail subsidize other operations.

The real problem with this portion of the mandate has been the federal government's recent demands for Canada Post to make a return on equity appropriate to similar sized corporations in the private sector.

The federal government is clearly trying to change the mandate of Canada Post from financial self-sufficiency to a set level of return on equity - two completely divergent courses! It also appears that the federal government is attempting to alter the intent of the Canada Post Corporation Act without going through the required amending of the Act itself.

This kind of added financial burden upon the Corporation is unwarranted and counter-productive. The Canadian people would be satisfied if Canada Post was simply self-sufficient and, in fact, not particularly concerned if some of their taxes supported the service so long as it met their needs and expectation.

Such an additional financial constraint cannot help but delay some of the long-needed improvements to delivery and counter services.

Furthermore, it completely ignores the fact that Canada Post cannot and must not be treated the same as a private business concern. First, because it has not been allowed to operate as an independent business - i.e. using its market strength to undercut competitors, buying out competitors or diversifying into unrelated fields. Secondly, because Canada Post's prime directive is and has to be to provide service to Canadians, not, as is the case with private industry, to maximize profits. Consequently, Canada Post is required to provide service even in areas or cases where it is unprofitable. The corporation simply cannot be judged by, or forced to live up to, private sector criteria, because its mandate far exceeds that of the private sector.

4. Provide for security of the mail

Another strong reason to maintain Canada Post as a public enterprise is the area of security. Canadians must be assured that their private correspondence is, in fact, private. A great deal of confidential business and personal information and capital is carried through the mail everyday.

One of the biggest objections people have over the privatized postal outlets in drug stores, dry cleaners, piano stores and other retail outlets is, in fact, the lack of security.

It is not unusual in December to find parcel mail stacked in the aisles of some of these outlets. Nor is it reassuring to deal with poorly-trained, confused and overworked employees in these operations.

The replacing of regular first class parcel service with Canada Post's "expedited" service has, in reality, replaced the delivery of parcels by uniformed, trained postal workers with delivery of parcels by untrained drivers who are delivering other products at the same time. How secure is mail that is bouncing around in an open meat truck?

It is the recommendation of the AFL that, in order to meet its mandate of security of the mail, only direct employees of Canada Post be allowed to handle mail.

5. Model labour relations

Canada Post is required to utilize its human resources in a manner that will ensure that dedication of employees to Corporation objectives.

This may well be the portion of the mandate in which Canada Post has enjoyed the least success.

The employees of Canada Post also have the right to expect certain labour relations standards. As a Crown Corporation, Canada Post ought to be meeting community standards for industrial relations, and in fact, providing a model of good employer practices that exceed those community standards. Postal workers have the right to be treated with dignity and respect on the job, to have a safe and healthy work environment, to have an effective voice in the operations of the Corporation, and to be paid fair wages and benefits based upon the industrial standards established by similar-sized unionized operations.

But, far from being a model employer, or even an acceptable employer, Canada Post has earned the reputation of being one of the worst major employers in the country. It is hard to imagine how an employer could create a greater atmosphere of distrust, fear and naked antagonism than that which exists at Canada Post.

A simple examination of the total costs to the Corporation of the lawyers' and arbitrators' fees arising from work grievances will support this contention.

Moreover, the effects of the Corporations privatization campaign on labour relations needs examination. In general, the net savings in contracting-out or privatizing public services is realized largely through reduced wages, not through improved efficiency. Canada Post is no exception. Having untrained, low-paid retail clerks at private retail outlets actually reduces the efficiency of the postal services. It cuts costs by only part of the difference between the negotiated wages and benefits of postal workers and the far lower (and often inadequate) compensation paid to service sector employees. The other part, of course, goes to the private business in profits.

From the perspective of Canada Post employees, the equation is obvious. Their employer is by-passing their legitimate contract and using untrained badly paid replacements. This represents a direct attack on the workers' wages and employment security, and upon their chosen bargaining unit.

From the workers perspective, then, Canada Post fails badly. It treats its employees as a commodity, begrudging them the benefits of a contract it is a party to, and clearly unconcerned with creating an enlightened or even average work environment.

There are many models of efficieint, cooperative management practice that the Corporation could adopt to improve its labour relations climate. The Corporation should be strongly urged to do so.

6. Maintain a corporate identity that reflects the role of Canada Post as an institution of the Government of Canada.

This mandate seems almost archaic in the current attack on government by the corporate sector and by government itself (like some mythical beast consuming itself).

It seems curious that no one has connected the decline in national unity with the systematic dismantling of national institutions. Commonality of experience is, after all, one of the strongest threads in a national fabric.

Our public institutions, like Air Canada, CBC, Medicare, CN, UIC and Canada Post were a huge part of our national identity. They provided a common base for everyone and differentiated us from our dominant economic neighbour to the south.

Further, our public institutions allowed government to pursue policy objectives that run contrary to the rule of the market place.

The railways, for example, tied a vast geographical area together in an east-west transportation grid when the terrain made north-south corridors more natural and efficient.

From this perspective, the importance of Canada Post should not be trivialized. With the sale, or impending sale of PetroCanada, Air Canada and CN, and the diminishing financial support for the CBC, Medicare, UIC and social assistance, there are few public institutions that provide us with a sense of nationality.

In many small towns and rural areas, the post office is the only presence of the federal government. It is one of the few national symbols that portrays the permanence and pervasiveness of the nation.

That is one reason why the closing of rural and urban post offices should be prohibited, and all closed offices reopened.

There are other, good reasons to do so. Canada Post is mandated to maintain a corporate identity. Providing postal services through private retail firms is like Imperial Oil selling its gasoline at Chevron stations. It doesn't make business sense to reduce your profile in the community.

Furthermore, Canada Post can and should be expanding its services to Canadians at its wicket outlets. There has been strong employee support for expanded wicket services in the consumer and financial areas. Such services could provide a badly-needed resource to many communities.

Summary

The Alberta Federation of Labour strongly endorses maintaining the current mandate for the Canada Post Corporation. If there are failings of Canada Post, it is in those areas where it has not lived up to its mandate.

Canada Post should be strongly encouraged to work harder to fulfil its mandate - specifically in the expansion of services and products, in labour relations, and in corporate image and presence.

We find claims that Canada Post services and operations are unfairly competing with the business sector to be guided by unenlightened self-interest rather than substantive fact.

Finally, the Alberta Federation of Labour is completely opposed to any privatization or share-offering at Canada Post. In no way can the government justify turning over to private ownership all of the equity and human resources built up over the years with public finance and public labour.

To that end, it is imperative that Canada Post not be required to provide a "return on equity", but rather be asked to meet only its enacted obligation of self-sustaining financial operations.

Recommendations

The Alberta Federation of Labour strongly recommends the preservation and expansion of Canada Post as a Crown Corporation, and that the original mandate of the corporation be reaffirmed and enforced.

In particular, the AFL also recommends:

1. The extension of door-to-door delivery to all Canadian households.
2. An end to any closings of rural and urban post offices, and the immediate re-opening of those already closed.
3. An end to the contracting-out or franchising of postal services to the private sector.
4. A clear directive to Canada Post to expand into new service areas.
5. The appointment of representatives of all postal unions to the board of directors so that at least 50% of the Board will be made up of employee representatives in order to begin to solve the Corporation's abysmal labour relations problems.
6. An end to any performance criteria that requires Canada Post to return funds to the federal government.

The above is respectfully submitted by the Alberta Federation of Labour.