Questions and Answers: Quebec City Postal Plant Closure, Post Office Closures, Problems, Profits and Dividends

QUEBEC CITY PLANT CLOSURE

Q: When was the decision to close the Quebec City mail processing plant made public?

A: On August 3, 2005, Canada Post announced its intention to close the mail processing plant in Quebec City and transfer mail processing to Montreal.

On July 14th, Canada Post had informed the Canadian Union of Postal Workers (CUPW) that it would be reviewing the national network, including all mechanized mail processing plants, and that the mail processing plant in Quebec City would be first. The corporation did not mention anything about closing the plant in Quebec City.

Q: When will the mail processing plant in Quebec City close?

A: Canada Post will begin on December 2, 2005 and complete the transfer of mail and the closure of the plant by September 10, 2007.

Q: How many people are affected by the closure?

A: The closure of the Quebec City plant will eliminate 302 CUPW jobs in Quebec City. Canada Post says that no regular employee will lose his or her job. But Quebec City will permanently lose 302 jobs and dozens of temporary workers who work at the mail processing plant will be terminated.

Canada Post claims that it will add 125 person years in Montreal by the time all the mail is transferred. If this actually happens, there will be even more people working the graveyard shift in Montreal.

Q: Why is Canada Post closing the mail processing plant in Quebec City?

A: Canada Post claims the plant no longer meets operational needs, in part because mail processing must be performed on several floors. It suggests there are also access problems because the plant is located in a highly congested traffic area.

The Quebec plant processes mail on two floors, like a number of other plants.

If you look at Canada Post's own figures, you will find that Quebec City consistently performs better than most cities when it comes to on-time delivery. It performs better than cities with plants on one floor. It performs better than cities with plants that are in better locations.
CUPW believes that Canada Post decided to close the plant and then tried to find reasons for closing it.

Q: Canada Post says that approximately 70 per cent of mail is already being sent to Montreal after first being sorted in Quebec City. The corporation claims that transferring the mail to Montreal will allow it to improve service for mail destined for Montreal and meet delivery standards in Quebec City. Doesn't this make sense?

A: No. Quebec City mail should stay in Quebec City. It makes no sense, no sense at all, to put Quebec City mail on trucks, drive it to the west end of Montreal, process it, and then put it back on trucks to drive it back to Quebec City.

The corporation's comments about improving service don't make much sense either. Canada Post says that transferring mail to Montreal is going to improve service for the 70 per cent of mail that the corporation claims is being sorted in Quebec City before being shipped to Montreal.
A large portion of the mail destined for Montreal has always been shipped to Montreal directly and has never been sorted in Quebec City. Transferring this mail to Montreal does not change the handling procedure for this mail and will not improve service for this mail.

Sending the mail to Montreal and closing the plant in Quebec City doesn't really have anything to do with improving service. The corporation simply hopes to improve its bottom line by selling the plant in Quebec City and cutting jobs.

Canada Post has decided to maximize profits at the expense of public postal service and jobs.
(For more information, see section on Problems, Profits and Dividends)

Q: Didn't Canada Post do something like this before?

A: Yes. Management wiped out mail processing jobs in smaller centers and consolidated the work a number of years ago, only to reverse its decision later and transfer the work back to the smaller locations.

Canada Post should reverse its plan to wipe out mail processing in Quebec City before it makes another costly mistake.

Q: Canada Post has informed CUPW that it is reviewing the national network, including mechanized mail processing plants. The Quebec plant was just the first facility to be reviewed. What are the Corporations plans for the rest of the network?

A: Canada Post has not revealed its plans. It claims not to have a timetable or order for the network review.

CUPW represents workers at 27 mechanized plants (includes plant in Quebec City) and over 500 retail counters.

Q: Rural post offices are part of the network. Are they being reviewed?

A: Canada Post says its national network review does not include rural post offices. But the corporation systematically reviews rural offices every time a postmaster dies or retires, or a fire occurs, or a lease is up.

(For more information, see section called Post Office Closures)

Q: Canada Post suggests that it decided to close the plant in Quebec City to help the corporation face challenges such as decreasing volumes, increasing points of call and the increased costs associated with salaries, pensions and benefits. Don't you think it makes sense for Canada Post to deal with its challenges?

A: Canada Post has been talking about declining volumes for decades. The fact is that volumes have not yet decreased. In fact, last year volumes increased. Points of call have increased. They have increased every year since there was a post office. Our salaries, pensions and benefits are comparable with unionized workers doing similar work.

The real challenge we face is that Canada Post thinks of itself as a business, not a Crown corporation.

Crown corporations fulfill public policy objectives of government. They do not operate like corporations with strictly commercial objectives. They are supposed to be managed in the best interests of the public. Their performance is supposed to be assessed based on the social and economic benefits they provide, not just the money they make.

(For more information, see section called Problems, Profits and Dividends.)

Q: How much money will Canada Post save by closing the plant in Quebec City?

A: Canada Post has not released this information.

Q: What kind of assessment did Canada Post do in the course of making this decision?

A: Canada Post has not released the assessment they undertook to make this decision.

Q: What effect will this closure have on employees?

A: Canada Post says the high level of retirement anticipated at Canada Post over the next few years will limit the impact of the closure on the workforce.

In fact, there will be a huge impact on workers. Dozens of temporary workers will lose their jobs. Regular and part-time workers will be re-assigned to jobs in other classifications. There will be fewer opportunities for part-time workers who wish to work full-time. Day shift positions will be eliminated. More workers will be forced to work nights. They will have to wait for mail to come back from Montreal.

Q: What are Canada Post's obligations under the collective agreement?

A: Canada Post is obligated under section 29.03 (a) of the Canada Post Urban Operations Collective Agreement to give notice "as far as possible in advance of its intention" to introduce technological change, such as the closure of a mechanized plant. Canada Post is obligated under 29.03 (b) to provide CUPW with at least 120 calendar days before the introduction of technological change. The corporation is also required to give the union "a detailed description of the project it intends to carry out, disclosing all foreseeable effects and repercussions on employees."

Q: Has the Corporation met its obligations under the contract?

A: While the corporation has given the union 120 days notice of the closure, it has not lived up to its obligation to give the notice "as far as possible in advance of its intention" and it has not provided the union with detailed information on what will happen to employees, service, costs, revenues, etc.

When Canada Post President Moya Greene met CUPW representatives for the first time, she assured the union that she wanted the same "no surprises" relationship as her predecessor. CUPW was therefore very surprised that, instead of notice and consultation, Ms. Green handed down a predetermined decision taken without any consultation.

Q: What does the union think about the plant closure?

A: CUPW opposes Canada Post's plans to close the Quebec City postal plant. The union wants the corporation to reverse its decision because of the impact on service, workers and the community of Quebec City.

Q: What is the union doing?

A: CUPW is demanding more information from Canada Post management and the federal government about the rationale and the timing of this decision.

The union is also campaigning to stop the closure of the Quebec City plant and to put an end to post office closures in other locations. We are working with the labour movement, community organizations, activists, political leaders and other groups in Quebec and across Canada. CUPW is circulating a petition to the House of Commons protesting the plant closure and another petition asking the federal government to maintain, expand and improve the public postal network .We are asking members of Parliament to talk to the Minister responsible for Canada Post, John McCallum, about canceling the plant closure and ending post office closures. Other aspects of the union's campaign will be announced at a later date.

Q: What are the addresses of the Quebec City and Montreal mail processing plants?

A: The Quebec City processing plant is located at 300 St-Paul St., Quebec, PQ, G1K 3W0

The Leo Blanchette mail processing plant in Montreal is located at 555 McArthur St., H4T 1T4.


POST OFFICE CLOSURES

Q: Isn't there a moratorium on post office closures?

A: The government says there is. But it is obvious to just about everyone that there is no moratorium on post office closures in rural and small towns anymore. Approximately 50 rural offices have been temporarily or permanently closed. Most of these closures have occurred since 2001. (Source: Canadian Postmasters and Assistants Association, May 2005).

CUPW is worried that many more closures are on the way. Canada Post is reviewing its national network and has announced plans to close the mail processing plant in Quebec City as the very first step in its review.

Q: Didn't John McCallum, the minister responsible for Canada Post, recently reaffirm the government's commitment to the moratorium on post office closures?

A: Yes. To deal with the public's concerns about post office closures, Minister McCallum recently made a statement claiming that the federal government's commitment to the moratorium against rural post office closures "remains unwavering". But his statement also said that some closures may be unavoidable.

Q: Didn't Minister McCallum promise to consult over rural closures and do everything possible?

A: He said that Canada Post will contact him about any closure and his staff will then inform the member of Parliament in the area. There is a vague assurance that Canada Post will work with "local officials" to see if a post office can be reopened. Not the public. Not postal unions. Not major stakeholders. Just local officials.

This is a far cry from the federal government's original commitment. When the Liberal government announced the moratorium, it said:

"As long as this Government is in power, no rural or small town post office will close" (Minister Responsible for Canada Post Corporation, Feb 18, 1994).

It promised not to make any changes to this policy without first undergoing "a full and comprehensive consultation with Postal Service Customer Councils." The government said, "The people will decide."

Postal Services Customer Councils no longer exist. There is no clear process for "full and comprehensive consultation". The people are not deciding what happens to their post offices.

Our public post office needs a uniform and democratic process for making changes to its network of offices, outlets and plants. The public and postal workers need to be part of this process.

Q: What about urban post offices and plants? Weren't they covered by the moratorium?

A: No.

Q: How did we end up with a moratorium?

A: The federal government and postal officials tried to close down thousands of public post offices in the late 80s and early 90s. They were stopped in their tracks by public outrage and an election defeat in 1993, but only after 1,442 rural and 93 urban offices had been closed.

In 1994, the newly elected Liberal government announced a moratorium on post office closures, but only in rural and small towns.


PROBLEMS, PROFITS AND DIVIDENDS

Q: Don't the problems at Canada Post need to be fixed?

A: CUPW has worked hard at being part of the solution to post office problems - through negotiations and through pilot projects. As a result, labour relations have improved. So has service. Our public post office currently has an international reputation for quality service at affordable rates, no small feat in a country the size of Canada.

In other words, there is a considerable amount of evidence to support our view that our public post office is not broke. It is meeting its challenges. It does not need to be fixed or overhauled by making major changes such as closing plants and post offices.

This is not to say that there are no problems at Canada Post and that there are no reasons to be concerned. There are problems and we are concerned. This is why we have developed a five-step plan to improve accountability at Canada Post.

(For more information, see CUPW's Five-Step Plan to Improve Accountability at the Post Office)

Q: How much profit is Canada Post making?

A: Canada Post made $147 million net profit in 2004.

It has made $923 million net profit in the last ten years.

In its last annual report (2004), Canada Post acknowledged that ten consecutive years of profit and service improvement are a reflection of the commitment and dedication of its employees. With the plant and post office closures, the corporation is turning its back on the very workers that are at the heart of its success.

Q: How much has Canada Post paid to the government in dividends?

A: $447 million.

CUPW does not believe Canada Post should be paying dividends to the government. The last public review of Canada Post opposed the payment of dividends as well. The report of the Canada Post Mandate Review (1996) said, "it need not be a priority for the Government to earn a financial return from the provision of what should be regarded as a vital public service. It would make little policy sense in this context for Canada Post to pay dividends to the Government at the inevitable expense of either having postal rates higher than they would otherwise be, or having correspondingly less money to spend on providing Canadians with the best possible postal services."

Q: Don't you think it's unrealistic to suggest that Canada Post shouldn't be making profits?

A: What we're saying is that profits should be re-invested.

We are not alone. When Canada Post became a Crown Corporation in 1981, business groups pushed to have Section 19 (2) included in the Canada Post Corporation Act so that money from postage would be ploughed back into service. Section 19 (2) says that postage rates shall be fair, reasonable and sufficient to defray the costs incurred by the Corporation in the conduct of its operations under this Act.

The report of the Canada Post Mandate Review (1996) also recommended that Canada Post "be mandated to operate on a break-even basis rather than pursue a commercial rate of return on equity...".

Taking money from our public post office just means higher postage, less service or less investment in the workforce.


CUPW RECOMMENDATIONS

Q: What does CUPW want the federal government to do?

A: CUPW wants the federal government to instruct Canada Post:

1. to stop the closure of the mail processing plant in Quebec City and proposed closures in other locations.

2. to consult with the public, postal unions and other major stakeholders to develop a uniform and democratic process for making changes to Canada Post's network.

3. to maintain, expand and improve our public postal network.