Mr. Speaker, this is a Government committed to helping Canadian businesses compete internationally.

In Canada, we have businesses involved in what is called remailing.  Remailing is a business that most of you are probably not aware of. Remailers collect mail destined for international locations from large commercial mailers.  The remailer or consolidator then ships the mail outside of Canada to another country.  A country with cheaper postal rates. Ideally a country that has been designated as a developing country by the Universal Postal Union. 

The Universal Postal Union is an agency of the United Nations.  It has been in existence since the late 1800s.  Today it has close to 200 member countries and deals with postal issues.  It does not get involved in domestic postal matters.  Its role is to act as the primary forum for cooperation among postal-sector players. 

It sets the rules for international mail exchanges and makes recommendations to its members “to stimulate growth in postal volumes and to improve the quality of service for customers”.

It is the Universal Postal Union that established a single postal territory for the exchange of international mail.  This means that when you are mailing a letter out of the country, you can buy an “international” stamp to put on your letter. 

Canada Post would keep the revenue from that stamp but it would be a different postal administration delivering that letter.  It is that other postal administration that is incurring the bulk of the cost for the delivery of the letter. 

Therefore, under the Universal Postal Union’s system of international exchange of mail, Canada Post would need to compensate the country of delivery.  This compensation is called a “terminal due”. 

The Universal Postal Union has classified its member countries as industrialized or developed versus those that are developing.  This classification affects the rate of terminal due a country is eligible to receive from another country for mail it has received and the rate it is obligated to pay another country for mail that it sent out.

Remailers do not have to pay terminal dues and are therefore able to offer lower rates than can Canada Post. 

The Universal Postal Union allows remailing.  There are other countries that allow remailing.  However, Canada does not. 

A few years ago, Canada Post took a number of the larger remailers to court.  The courts have rightly ruled that remailing is an infringement on Canada Post’s exclusive privilege. 

This exclusive privilege was granted to Canada Post through its legislation. 

This is legislation that was passed in this House over 20 years ago when the Canada Post Corporation Act was first enacted.  Since the exclusive privilege is set in the Act, the only way to adjust the exclusive privilege is to amend the Act. 

There have been suggestions that the Government should simply change a regulation or issue a directive to Canada Post.  These suggestions would show contempt of this House.  It is Parliament that approved the Act.  It is only Parliament that can change the provisions of the Act.  Only after public debate and discussion, will the change be made.

The Government is pleased to have introduced Bill C-14, an act to amend the Canada Post Corporation Act.  The purpose of this Bill is to remove all outbound international mail from Canada Post’s exclusive privilege. 

This would enable remailers to operate in Canada without infringing on Canada Post’s exclusive privilege. 
They would no longer be breaking Canadian law.

They would no longer be at risk of a legal challenge. 

Although this Bill is proposing something broader than just remail, its net effect on Canada Post is not expected to be any different.  The business model of remailers is to collect large volumes of mail from commercial companies.  It is not interested in collecting mail from you or me. 

They offer Canadian businesses lower postal rates.  This reduces the costs of those companies.  This reduces the costs of their goods or service to Canadians.  This results in lower costs to the ultimate consumer of the goods or service. 

In fact, there used to be many federal government departments and agencies that used the services of remailers for their mail going overseas.  They had shopped around to find the lowest rates so that they could make effective use of taxpayer money. 

But when it became known that remailing was illegal, these departments stopped using remailers.

The proposed legislation is not intended to allow the mail to come back into Canada.  The addressee of the letter is to be in a foreign country.  We are not touching domestic mail. 

The addressee is to be outside of Canada.  Remailers that attempt to send mail back into Canada will still be in contravention of the exclusive privilege after amended.

We are not proposing to let other postal-sector players to put their stamps on mail while it is in Canada.  Some other countries also allow Extra-Territorial Offices of Exchange or ETOE.  It is defined by the Universal Postal Union as "an office or facility operated by or in connection with a postal operator outside its national territory, on the territory of another country, and that these offices are established by postal operators for commercial purposes to draw business in markets outside their own national territory". 

If a stamp is put on a letter while in Canada, it should have a Canada Post approved stamp.  If Canada is to allow ETOE there should be a licensing regime associated with it.  We are not going there with this proposal.  We are not allowing other countries to operate postal outposts in Canada.  We want to help Canadian businesses compete internationally.

The Government has studied the issue.  I must admit that we have not been able to determine the size, scope or economic impact of the remail industry.  We have got estimates.  Estimates that we can neither substantiate nor discount.

Canada Post has told us that it estimates it is currently foregoing revenues in the $50 to 80 million a year range.  This is an estimate based on what it has seen as a trend in its revenue stream since new rules were put in place by the Universal Postal Union in 2001. 
It does not know for sure how much business it has been losing to remailers operating illegally in Canada. 

On the other hand, the industry itself has made claims of it being millions of dollars to hundreds of millions of dollars.  Because the courts have ruled remailing as illegal, we cannot get data or information from the industry members that can be validated. 

Both estimates are significant.  They are also not very close.  Some of the difference can be accounted for given that they are based on different premises.  The Canada Post estimate represents the impact on Canada Post itself and is not a measure of the industry.  The industry estimate is more of an estimate of economic impact as it includes supporting businesses such as envelope manufacturers and print shops.

Should this legislation get enacted, Canada Post estimates losing another $45 to 50 million a year.  There are financial implications. 
Its employees will worry that this is the first step towards privatization.  It is not.  This Government will not privatize Canada Post. 

This proposal will put pressure on the Corporation.  This proposal was not its idea.  That being said, if it is the will of Parliament, the Corporation will do its utmost to compete against those that enter this new business sector. 

Canada Post is a very large institution.  It is one of the largest employers in Canada.  It has one of the largest retail networks in Canada.  It provides services to Canadians from coast to coast to coast.  Some would argue that it is a Canadian icon. 

There are many issues and challenges facing this Corporation.  It would be easy to get side-tracked on any number of these.  Just ask the previous members of the Standing Committee on Transport, Infrastructure and Communities.  They had some discussions on remailers. 

The members tabled motions and amendments to those motions.  At the end, it reported back that they wanted time to study the issue. 

This Government has decided that it has done enough studying.  This Government has decided that it is time to take action. 

The Bill itself is very targeted to this specific issue.  We do not want to get side-tracked in our goal to address this issue.  We also do not want changes to Canada Post to be widespread. This Government is not interested in destroying Canada Post.

Mr. Speaker, we are not opening up our domestic mail services. 

This is not the first step in the privatization of Canada Post.

We are enhancing competition in the outbound international mail business. 

We are supporting Canadian businesses.

Thank you, Mr. Speaker.