1. Statement from Minister
2. Labour Update, 3rd quarter financials
3. Canada Post Mandate Update
4. Canada Post’s authentic Brand Shines... by Steve Falk
Canada Post Mandate Update
After the 2015 election, the new Government implemented a freeze on the deployment of new Community Mail Boxes to homes that were still receiving to the door delivery. Then in the spring of 2016, it announced a three-part review of Canada Post which included;
Postal Review Taskforce
Government Review and establishing the Canada Post mandate
The Task Force reported out in September of 2016 confirming the financial position but identifying many profit improvement opportunities the majority and most significant of which was cost savings. There is a future for Canada Post if they were permitted to act.
The Parliamentary Committee Report came out in December of 2016. It didn’t accept the financial projections that Canada Post, Anderson Consulting and the Task Force all supported. It called for the continuation on the Elimination of Home Delivery and spoke briefly about some revenue generating opportunities nonce of which were quantified.
The Government has committed to delivering its decision before January 1, 2018. Minister Foote went on personal leave in the spring ultimately resigning over the summer, A new minister Carla was appointed in August. Public Works is a large and complex department with issues such as Phoenix Payroll System, Military Procurement and Canada Post.
Statement from Minister of Public Services and Procurement Carla Qualtrough on new Chair of Canada Post Corporation
Vol. 1 Issue 2 Jan. 2018
Gatineau, Quebec, December 14, 2017 – Canada Post is a valued national institution that has helped connect Canadians for over 250 years, and helped small, medium and large businesses thrive at home and abroad.
As Minister responsible for the Canada Post Corporation, it is my pleasure to announce today the appointment of Jessica L. McDonald for a five-year term as Chair of the Board of Directors. I look forward to working with the new leadership of Canada Post to implement our government’s soon-to-be announced vision for this important Canadian institution.
Ms. McDonald will play a critical role in overseeing the future direction of Canada Post to ensure it provides high-quality services to Canadians. Her appointment is part of a broader renewal of the Board of Directors, incorporating greater diversity and broader perspectives, including labour. Ms. McDonald brings to the position more than 25 years of experience in senior public-sector management. Her experience includes serving as Deputy Minister to the Premier of British Columbia and President and Chief Executive Officer of British Columbia Hydro and Power Authority.
The Government of Canada’s appointment process is based on openness and transparency to ensure highly qualified candidates are appointed who reflect Canada’s diversity, including gender balance.
Media Relations, Public Services and Procurement Canada 819-420-5501 email@example.com
Jessica L. McDonald, Chair, Canada Post Corporation Board of Directors
Ms. Jessica L. McDonald has extensive experience in senior public-sector management, having served in numerous key roles in a career spanning more than 25 years.
Earlier in her career, Ms. McDonald held many positions in the British Columbia government. From 2005 to 2009, she served in the most senior public service position in the provincial government as Deputy Minister to the Premier, Cabinet Secretary and Head of the British Columbia Public Service, responsible for oversight of all aspects of government operations.
From 2014 to 2017, Ms. McDonald served as President and Chief Executive Officer of British Columbia Hydro and Power Authority. During that same period, she was also Chair of the Board of Directors of Powertech Labs, one of the largest testing and research laboratories in North America, and a member of the Board of Directors of Powerex Corp, a key participant in energy trading markets in North America.
Ms. McDonald has served as Vice Chair of the Insurance Corporation of British Columbia, currently serves as a member of the Greater Vancouver Board of Trade and is a member of the British Columbia Arbitrators’ and Mediators’ Institute, the Alternative Dispute Resolution Institute of Canada, and the Institute of Corporate Directors of Canada. She has been named to Canada’s Top 40 Under 40, and Canada’s Top 100 Most Powerful Women Hall of Fame. She is a recipient of the IPAC/Deloitte National Gold Award for Public Sector Leadership.
Ms. McDonald is a Visiting Fellow at Stanford University’s Steyer-Taylor Center for Energy Policy and Finance.
CUPW represents delivery agents and plant workers. The collective agreement with Rural and Suburban Mail Carriers is due to expire on December 31, 2017. The collective agreement for Urban employees expires on January 31, 2018.
Agreements continue to apply once they expire, in accordance with the Canada Labour Code.
On November 14th CUPW filed a Notice to Bargain and on November 16 asked for the appointment of a Mediator, Canada Post concurred. The Honourable Patricia Hajdu, Minister of Employment, Workforce Development has agreed to the appointment of a mediator. The appointment of a mediator at this point in the process does not set any dealings or timetables. There as an initial meeting November 24th of the lead negotiators to set the schedule and framework for negotiations.
These types of negotiations usually take place over several months and perhaps with this round it will stretch out even further. At the time of writing, the Government has not yet announced its decision on the future mandate of Canada Post. As well, Deepak Chopra, CEO has announced his resignation effective March 31, 2018 and Chair of the Board Sian Matthews resigned the day after the Annual Meeting in September. It is unclear when these positions will be filled while the Government is expected to announce its decision before Parliament rises for the Christmas break.
Typically, when going into negotiations with its biggest union, CUPW, the mandate and management of Canada Post are set. While the mandate may be known soon, it is likely negotiations will move slowly until a new CEO is appointed and is able to set the direction of negotiation.
The search for a new CEO may take several more months and then there is a steep learning curve if the individual comes from outside which has been the case for the last two appointment Deepak Chopra and Moya Greene.
Therefore, the timetable for things to come to a head in negotiations will be elongated. It would also seem the Government will not want Canada Post to become a political issue, so one would expect the shareholder will encourage the company to avoid labour disruption.
3rd Quarter Financials
• Summer months is the lowest volume quarter. Volume in 2016 was impacted by the labour uncertainty. • Canada Post segment $62 mm loss (normal to lose money over the summer) vs $60 mm in 2016
• YTD Canada Post segment has net profit of $13 mm versus a $15 mm loss in 2016.
• Transaction Mail volume was flat in the 3rd quarter but decreased by 3.5% YTD, with volume adjustment for labour uncertainty the decline is estimated at 5.6%
• Direct Marketing revenue was up 7.9% for the quarter, but when adjusted for labour it continues to decline. It appears that the major impact is from Financial and Communications sectors.
• Parcels grew by 39% in quarter 22% YTD, no adjustment was estimated for Labour. during the labour uncertainty many customers moved as much volume as they could to other carriers.
• In the last 2 years, Canada Post profits were over $100 mm for the 4th quarter so it appears Canada Post will report a profit close to $125 mm for the year.
• These results provide context in in both Labour Negotiations and the New Mandate. Some will argue that Canada Post is sustainable with the growth of Parcels and no major changes in the business model are required. It could provide coverage for the Government not to address the business model and continue with business as usual. It supports Labour’s post that the model is not broken.
The announced retirement of Deepak Chopra and the removal of Board Chair Sian Matthews doesn’t suggest that the Government is going to come out in support of the 5 Point Plan. Canada Post will be profitable again in 2017, which provides the cover for the Government to “kick the can down the road” and not make any meaningful reform at Canada Post. There will be some window dressing such some form of increased regulatory oversight.
The key question is what does this mean for the industry. In the short term, it will be business as usual. It will become difficult once the postal service starts losing money and that will happen when Lettermail, highest revenue and most profitable product, is declining by more than 5% per year. Its $150 mm hit per year for a company that makes $100 mm. Parcel growth will help but is not large or profitable enough to offset the decline in Lettermail.
Unless the government surprises us, Canada Post will begin losing money in 2018 or 2019, NAMMU must work hard that it doesn’t try to fix on the backs of Business mailers with industry destroying rate increases
Volume 1, Issue 2
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June 21st, 2018
Canada Post’s authentic brand shines across Canada
November 28th, 2017 by Steve Falk, President of Prime Data
Some of the best advice I ever got from my parents was not to hang out with troublemakers because everyone would eventually assume I was a troublemaker as well.
In retrospect that was my first experience with branding.
I might have been the best kid in school (I wasn’t). But people would still judge me by the company I kept.
Fast forward a few decades and that’s still great advice. It’s important in school, but it’s also important in business.
From Pizza to the Post Office
If you order a pizza and it’s delivered by a guy in a beat-up car, wearing a worn-out grubby cap, ripped jeans and sneakers with holes in them, you may wonder about the quality of the pizza you’re getting. But if you order the same pizza, and it’s delivered by a guy in a nice shiny car, wearing a crisp clean shirt, your estimation of the value of the same pizza is high.
The driver’s individual brand directly influences the perception of value of the product he’s delivering.
We can take this even further
If you own a company and you choose to partner with another organization that is perceived to offer high value products or services to its customers, you get a benefit from that association.
Just recently Deepak Chopra, President and CEO at Canada Post announced the following on his LinkedIn profile:
Canada Post is thrilled to be named one of the top 20 Authentic Brands in Canada. Only six Canadian companies made the top 20 list published by Cohn & Wolf, which makes this honour even more special. This is a remarkable tribute to our 60,000 employees who proudly deliver the online world to 16 million addresses in every corner of Canada.
Canada Post’s authenticity resonates with Canadians because people in all corners of this vast country associate it with timely delivery, historical and organizational quality and stability. It’s been here since the first official 3-cent stamp in 1867.
That’s just the kind of great branding you want to rub off on you, no? I mean who would not want a brand that was associated with the great outdoors. Trees, rivers, covered bridges and…a community mailbox.
The logo and its positive associations are everywhere if you drive around Canada. Think about convenience stores, delivery trucks, mailboxes, not to mention newspaper ads and your incoming eCommerce packages.
Here’s the thing: All that goodwill and authenticity rubs off on you when you choose to use the mail too. Whether it’s a birthday card, a wedding invite or timely and responsive paper mail advertising, it will be imbued with the essence of the Canada Post brand, simply by being delivered through their platform.
One more reason to choose the mail as part of a multi-channel approach to marketing