Question Period Note: Canada Post – Renewal

On August 21, 2020, Canada Post reported a $378 million loss before tax for its second quarter. On July 30, 2020, Canada Post announced a new Acting Chair of the Board of Directors.

• Canada Post has a long-standing mandate to serve all Canadians while remaining financially self-sufficient
  • As the country responded to COVID-19, Canadians turned to Canada Post to provide an essential service
  • Like in other areas, Canada Post felt the impact of COVID-19 on its services
  • Increased losses are largely due to the significant impact COVID-19 had on revenue and costs, in addition to costs stemming from the June 2020 arbitrator’s ruling that resulted in new collective agreements with the Canadian Union of Postal Workers
  • Canada Post continues to invest and evolve to meet the changing needs and expectations of Canadians

If pressed on governance:

• Ms. McDonald requested to leave her duties for personal reasons, and I accepted her request
• I want to thank Ms. McDonald for her contributions and for guiding the Corporation through a critical time in its operations
• During her tenure at Canada Post, as Chair and also as the Interim President, she played a vital role in overseeing Canada Post’s early steps toward a renewed vision to provide high-quality services at a reasonable price to Canadians, no matter where they live
• Canada Post is at a pivotal point as the mail and parcel delivery environment is rapidly evolving. Building on progress to date, I look forward to working with the next Chair to continue charting the future path of one of Canada’s most valued service providers

If pressed on the acting chair:

• On July 30, 2020, Canada Post announced that Suromitra Sanatani had been appointed as Acting Chair of the Board of Directors
• Suromitra joined the Board in May of 2018 and has played a key role with Canada Post, serving on the Human Resources and Compensation Committee as well as the Environmental, Social and Governance Committee
• Her experience will continue to guide Canada Post improvements in areas such as safety and environmental performance

Canada Post recorded a loss before tax of $378 million in the second quarter of 2020. This increased loss was largely due to the impact COVID-19 had on revenue and costs and the added costs stemming from the new collective agreements with the Canadian Union of Postal Workers (CUPW).

As the country responded to COVID-19, Canadians turned to Canada Post to provide an essential service. With people at home and businesses closed, the Corporation saw a dramatic shift in what it was asked to deliver. Online shopping drove unprecedented growth in parcels volume and revenue, but because Canadians and businesses mailed and advertised less, the transaction mail and direct marketing volume and revenue decline exceeded the growth in parcels. The estimated total revenue shortfall due to COVID-19 was $46 million while increased costs related to COVID-19 were an estimated $118 million. The total negative financial impact due to COVID-19 was an estimated $164 million.

The arbitrator’s ruling on June 11, 2020 concluded a comprehensive process that followed weeks of rotating strikes in late 2018. The new collective agreements, one for urban employees and another for Rural and Suburban Mail Carriers (RSMCs), added net costs of $114 million in the second quarter. Most of this was related to expanded eligibility for post-employment healthcare benefits for RSMCs.

The segment recorded a loss before tax of $444 million on revenue of $3.3 billion for the first 2 quarters of 2020. That compares to a loss before tax of $27 million, also on revenue of $3.3 billion, for the first 2 quarters of 2019. Although COVID-19 and the new collective agreements with CUPW contributed to the loss, the Canada Post segment would have still incurred a loss without these factors.

Suromitra Sanatani – Acting Chair of the Board of Directors

A seasoned corporate director, Suromitra is a board member of Travel Alberta and a member of the Royal Bank Global Asset Management Independent Review Committee. Previously, she served on various boards, including Edmonton International Airport, Victoria International Airport, Social Sciences Humanities Research Council of Canada, Canadian Blood Services, and as chair of the Royal BC Museum.

Suromitra began her career in litigation before transitioning from the practice of law to senior corporate positions in the non-profit, public and private sectors. In her role as BC and Yukon Vice President of the Canadian Federation of Independent Business, Suromitra represented the interests of small- and medium-sized businesses.

Later, as Vice President, Corporate and Government Relations at Partnerships BC, she played a pivotal role in establishing this Crown Corporation, which specializes in public-private partnerships. Her subsequent consulting practice included leading First Nations consultations across British Columbia, and providing strategic advice to senior executives in the financial, utilities and transportation sectors.

Suromitra is fluent in English, French and German and has a conversational ability in Bengali. She has a Bachelor of Laws from the University of Ottawa and a Bachelor of Arts (French Literature) from the University of Victoria.

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