January 14, 1954

PC

Ellen Louks Fairclough

Progressive Conservative

Mrs. Fairclough:

My hon. friend says that it is a "guesstimate". It is true that the revenue calculations of the department would be materially altered, whether any actual cash transfer took place or not, if the department were credited with the amount of postage which would normally accrue to it

Post Office Act

from those various departments of government which load the mails with all sorts of material, some of which is necessary and some of which is straight propaganda. From personal experience I know that the mail from government departments which comes to the desks of business people in this country is so voluminous that it cannot even be scanned and, most appropriately, finds its way into the waste paper basket. Some of it, Mr. Chairman, is pure junk.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

Ministers' speeches.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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PC

Ellen Louks Fairclough

Progressive Conservative

Mrs. Fairclough:

Yet it passes through the mails under departmental franks. I suggest that before considering any increase in postal rates these amounts should be calculated accurately by the departments concerned and credited to the revenues of the Post Office Department.

In the report for last year, to which I have just referred, the revenue is shown at almost $130 million and the expenditures at almost $123 million, leaving a profit of about $6,500,000. As a matter of fact the actual amount is $6,471,053.31. Despite the fact that it was expected the department would have much less revenue last year than it had the year before, this was the result. As a matter of fact at one time another "guesstimate" was made that the profit would be reduced from the approximately $6,500,000 of the year before to something like $4 million last year. In spite of that, however, the profit was only about $150,000 less than it had been in the preceding year, and this despite the fact that a great deal of the first class one-ounce mail had gone by air to distant parts of Canada and, as I said before, had thereby given an indirect subsidy to Trans-Canada Air Lines, one which they sorely needed.

What interested me more than anything else in the remarks of the Minister of Finance was the fact that the blame for what the minister described as this necessary increase in the postage rates was based largely upon the intention of the government to inaugurate a five-day forty-hour week among its employees. The Post Office Department is not the first department whose employees have been placed on the five-day basis. I cannot recall that in any other instance a department has been told that it must produce revenue sufficient to pay for this change in the working conditions of its employees. Because the Post Office Department is the only one producing revenue in this way, apparently it is to be saddled with the cost of changing working conditions in that department so they will be in line with other departments of government and with industry generally throughout the country.

Post Office Act

The minister has said that it will cost $5 million to put this plan into effect, and that it will cost another $7 million to increase the wages of the employees in the department. Well, he had a profit last year of $6,500,000. The franking privilege costs almost $5 million. Then it is proposed to drop about $650,000 by reducing the air mail rates from 7 cents to 5 cents. On the basis of the number of pieces, shown in last year's report at 32,808,019, this would amount to $650,000.

These sums add up to $12,250,000. The minister has been talking about having only another half million dollars to play with. I think if there is any playing to be done he might consider that the average taxpayer, the average person who uses the mails, would like to join in the game. Certainly that is true so far as the individual is concerned. We know that the excise tax was taken off cheques, but this did not affect a great many of the people in Canada.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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LIB

Alcide Côté (Postmaster General)

Liberal

Mr. Cote:

We lost seven and a half millions on account of that.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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PC

Ellen Louks Fairclough

Progressive Conservative

Mrs. Fairclough:

Very well; but how many people did it affect? There are many people in this country who do not issue a cheque from the beginning to the end of a year, a great many of them.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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LIB

Alcide Côté (Postmaster General)

Liberal

Mr. Cote:

I presume my hon. friend does not suggest that we should restore the excise tax to that extent?

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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PC

Ellen Louks Fairclough

Progressive Conservative

Mrs. Fairclough:

I am merely trying to give the picture that I have found in the last little while. I am stating the individual did not benefit to any great extent or to any marked degree by the abolition of the stamp tax on cheques. The individual, speaking generally, will not benefit to any marked degree by the reduction of the air mail rate from 7 cents to 5 cents, because the number of letters which the average individual will mail in the course of a year in respect of which air mail service would be helpful would not be very great.

True, air mail speeds up the service for business mail; but most business houses now use air mail anyway, wherever they think it is necessary. It seems ridiculous that a letter can travel across this country and be delivered in Vancouver at the same cost as a letter delivered in the next town-and that it will arrive there probably a full day ahead of the letter sent to the next town. Certainly that has been our experience, in this part of the country at least. It is not at all uncommon to find a letter taking two or three days to move from one address to another in a city. It is not at all unusual to have mail taking three or four days to reach a neighbouring town.

It seems to me I recall some newspaper comment to the effect that if you want your mail to reach its destination in a hurry you had better get into your car and deliver it personally. We have just about reached the point where we are subsidizing mail delivery of those pieces which go to the far corners of the country by increasing the postage rates on the mail delivered within reasonably short distances of the point of mailing.

I do not think this drop in the air mail rate is even going to benefit business to any marked degree because, after all, it is an expense chargeable against the revenue of the company, and of the net profit of that company the proprietors pay a sizeable portion to the income tax department. When the whole thing is calculated the business itself will not be affected very materially. Likewise they will not be affected very materially because the first-class mail rate goes up. They do not have to worry. The common attitude is that it does not matter, Mr. Abbott takes half of it anyway. Therefore it all boils down to the fact that the individual in this country gets caught between the opinion of the government that this department must pay for itself and the nonchalant attitude of business generally on the matter of increased rates.

All of this, or a large part of it, comes about because it has been finally recognized that the salaries paid to the employees of the department were too low, and the conditions under which they worked were not in accord with conditions generally in the country.

I might point out that although the postage rates are being increased in this country, we are shortly to consider some other legislation of another department which has a bearing on these matters also. I drew to the attention of the Postmaster General in 1953, when the estimates were under discussion, the fact that a letter carrier earning $2,850, which at that time was the maximum, was not considered a good financial risk by Central Mortgage and Housing Corporation for a loan on a house in order to put a roof over his, family. I believe the maximum has now been raised to $3,060, but he still will not be able to buy a house under Central Mortgage and Housing Corporation because the requirements are such that his maximum salary falls far short of the minimum which must be made in order to qualify for a loan.

We used to be able to buy many things for a nickel in this country. There are no longer many things you can buy for a nickel. My friend beat me to it-you can now post a letter for a nickel, or you will be able to do so after April 1. If there is one thing that will cost us too much it is nickel postage.

Even the four-cent rate failed to give us the service which the people of this country have a perfect right to expect from a department which is charged with the responsibility of maintaining the lines of communication across this nation and internationally.

It is not so long ago that in an effort, so it was said, to economize within the department the two-a-day delivery was abolished on residential walks in municipalities and urban centres, and one-a-day deliveries took their place. I suppose this one-a-day delivery has a great deal to do with the poor mail service we are now receiving in urban centres, because if the letter is cleared in the post office after the one delivery has gone for that day, then of course it stays there for another 24 hours.

Many peculiar situations arose as a result of that move. It was found that a great many places of business were situated on residential walks. Since that time some of those defects have been rectified. In places where it was found that a great many businesses were on residential walks some adjustment was made and the two-a-day delivery was reinstituted in those instances.

However, during the time these people were receiving one daily mail delivery, with a consequent disruption in their business processes, some of them, in an attempt to correct the situation themselves, tried to obtain post office boxes. To their dismay they could not even obtain post office boxes in the city of Hamilton because the post office was all filled up. Therefore they had no alternative but to sit and wait for 24 or 48 hours for their mail to be delivered to them. In some instances this meant that cheques in the mail, which should reach the banks, were delayed for a matter of 48 hours. And if it should happen that the cheques were received on Saturday, the banks were closed and naturally they had to pay interest charges on the overdraft, if they had one, for the ensuing three days, during which time they should have been able to make their deposit, as the customer intended when he mailed the cheque.

I suppose this does not sound like a terrible increase, when you add one cent to an existing rate; but I should like to point out, Mr. Chairman, that on drop letters the raising of the rate from 3 cents to 4 cents for the first ounce and from 4 cents to 6 cents for the second ounce means an increase of 25 per cent in the former case and 50 per cent in the latter. In the matter of other mail, raising the rate from 4 cents to 5 cents for the first ounce and from 6 cents to 8 cents on the second ounce means 25 per cent in the first instance and 33J per

Post Office Act

cent in the second. It would be a very reckless businessman who would increase his prices to that extent in one jump.

As I said before, we have suffered by reason of the decision of the department to put in the one-a-day delivery in urban centres. We have had less service; we have had higher postage rates; we have had delays, which I mentioned before. It practically boils down to the fact that the only appropriate thing about the proposals which have been made is the date on which they are to take effect, because the people of Canada are certainly going to have a proper April fool.

There is no guarantee of better service. Not so long ago I asked whether the two-a-day delivery would be reinstituted. The minister is quoted as having said that he could not see it in the immediate future. There is no guarantee that the Post Office Department will benefit by the allocation to it of revenues which should normally reach this department; there is no guarantee that Trans-Canada Air Lines will be allowed to flounder along on its own revenue without leaning heavily on the Post Office Department. The only thing we have is just an increase in rates on April fool's day.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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?

Mr. Cole@

I want to give some explanations. I think it would be practical for all of us to study the whole problem. At the end of the year we expect to have a deficit of $1 million. This deficit will be brought about because we have lost $7,500,000 through the removal of the excise tax on notes and cheques. Formerly we received that amount of revenue through the sale of stamps to the general taxpayers. I am giving this explanation so we can understand the deficit we are going to have. We had a surplus last year of $6,500,000 but we are now faced with a revenue loss of around $7,500,000. That is the explanation for the deficit of $1 million which we expect to have at the end of this year.

So we start with a deficit of $1 million. That is why I have given these figures, so hon. members may better understand the situation. We have to face the payment of over $13,500,000.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

Before the minister leaves that point may I ask if we are to understand that one purpose of this increase is to make up for the loss which arose from that preelection move of taking off the stamp tax?

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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LIB

Alcide Côté (Postmaster General)

Liberal

Mr. Cote:

It might be a good political move to put it that way, but let us be realistic about it. We have to pay $7 million for increased salaries to all the employees of the department. We have to pay the increased cost

Post Office Act

brought about by the institution of the five-day week, and that amounts to $5 million. We have to pay $1,500,000 as an increase to the mail carriers. Those three items alone total $13,500,000. Even if we still had the $6,500,000 we would not have enough.

I do not want to take just one item and say we want it for that. We want it to pay the whole amount. This brings me to the answer to the other question put by my hon. friend. She said that I said it was the only way to do it. I did not say that. I said that in my personal view it was the only equitable way to do it. There may be a difference of opinion in that connection, but I cannot see any other equitable way. If the general taxpayer were to be charged with this $14 million or $15 million it would mean that those who were not using the mails would have to pay for those who were using them. It would mean that if my hon. friend sent only one letter a year she would be contributing toward those who buy stamps in great quantities. The ordinary worker would be contributing for the stamps used by big companies like Simpson's, Eaton's and Morgan's. I do not think that would be a fair way to do it, just to take it out of the general taxation fund in order to pay the cost of operating the post office.

That is the way I put it. I say again that I do not say that is the only way. I repeat what was said by the Minister of Finance (Mr. Abbott), that it had been the habit to do this in the past and it is the most equitable way.

I do not contend that the postal service is the best possible; I do not claim that it is perfect in all respects. It is administered by humans, and errors occur for which we are responsible. But every time we find errors we try to correct them. As a matter of fact we invite everyone to point out any errors that may exist, but the fact remains that there are some errors for which we are not responsible.

Let me relate a true story. Recently a man was expecting a cheque, the same thing my hon. friend referred to in connection with other circumstances. When he did not receive that cheque through the mail he called the sender and asked why he had not sent his cheque. The sender said he had sent it, and the other man said he had not received it. The sender then said that he would check the matter, and he called the postmaster. The postmaster asked where he had mailed his letter and he said he had mailed it in the mail box in front of a certain store. The postmaster thought that was strange, because

there was no mail box there, and he suggested that they go to look. They both went to that place, and they found that the sender had mailed this letter enclosing the cheque in the municipal garbage can.

They then asked permission from the mayor to open that garbage can, because it had not been emptied for the past few days. They obtained that permission and took the box to the waterfront, because it was Saturday night, where they opened it. They found the letter in question and they also found 19 other letters which had been posted in that municipal garbage can.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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PC

William McLean Hamilton

Progressive Conservative

Mr. Hamilton:

You had better clean up your mail boxes so they do not look like garbage cans.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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LIB

Alcide Côté (Postmaster General)

Liberal

Mr. Cote:

That was an error for which we were not responsible. We are doing our utmost to give the best possible service under the circumstances. If hon. members will look over the reports for the past 30 years they will find that expenditures have been trebled. During that period we have given the best service within our means. We are receiving every day suggestions for the improvement of the service, but many of these entail the expenditure of money. Today we are not against the principle of spending more money, but we must meet the necessary expenditure. We have to meet those expenditures up to the limit. Sometimes we are prevented from doing something we want to do because we have not sufficient money.

My hon. friend mentioned the second daily delivery. She knows my personal views on that matter. I hope that eventually we will be able to do that, but again that would mean an additional expenditure of between $4 and $5 million. We are giving two deliveries a day to the business centres, and it is only when the percentage of business places on a carrier's walk falls below 25 per cent that we give only one.

My hon. friend says this is not the only department with a five-day week. However, I think it is the only department where so many people are employed. Actually we have about 50,000 employees, without counting some 25,000 extra workers hired to take care of the Christmas rush. The five-day week means a terrific amount of reshuffling, switching of hours, hiring of new employees and instructing them how to do their jobs. That is why we have to spend up to $5 million more on that account.

I give these facts only as explanation. The main point is that we are faced with these expenditures. I do not think any hon. member will say that we should not make these

expenditures. I think all will agree that we should pay the increased salaries as of December 1. I do not believe anyone will deny the necessity of implementing the five-day forty-hour week. I do not think anyone will deny that improvements should have been made in connection with the mail carriers which necessitates an expenditure of $1,500,000.

Those three items alone account for $13,500,000. If we agree that those expenditures should be made, then we have to have the funds to make them. We propose to get those funds by means of this increase, as we think it is the most equitable way to do it. If it were done in any other way we would be asking those who do not use the mail to pay for those who do.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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PC

John George Diefenbaker

Progressive Conservative

Mr. Diefenbaker:

How much revenue was lost by the removal of the tax on cheques?

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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LIB

Alcide Côté (Postmaster General)

Liberal

Mr. Cote:

I stand subject to correction, but I think it was about $7,500,000. This was first imposed as an excise tax. I would like to reserve the right to correct this figure if I am wrong, but I think I am close to the right amount. That whole amount was between $9 and $10 million a year, but this was a holdover from the first world war. This was an excise tax. At the beginning only blue stamps were used, but gradually the public at large began using postal stamps. There was no direction to that effect within the department, but when this tax was taken off we found we were losing $7,500,000.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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PC

Ellen Louks Fairclough

Progressive Conservative

Mrs. Fairclough:

The minister has made quite a protest against the remarks I made, but at no time did I indicate that we were not in favour of protecting the employees in the postal department. As a matter of fact I made it quite clear that their working conditions should be brought into line with conditions existing in other branches of the civil service and in business generally throughout the country. What the minister has undoubtedly overlooked is that I very definitely said I saw no reason why the employees of the Post Office Department should be blamed for the increase in the postal rates when all the other civil servants have enjoyed the forty-hour week and increases in pay and so on, and I do not think it is-

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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LIB

Alcide Côté (Postmaster General)

Liberal

Mr. Cote:

I agree with my hon. friend. I believe she does not v/ant to blame anybody, but I do not want to blame anyone either.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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PC

Ellen Louks Fairclough

Progressive Conservative

Mrs. Fairclough:

But I do not see why the blame should be placed-

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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LIB

Alcide Côté (Postmaster General)

Liberal

Mr. Cote:

This is not to blame. This is a set of facts, and there is no blame attached to anyone.

Post Office Act

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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PC

Ellen Louks Fairclough

Progressive Conservative

Mrs. Fairclough:

You might as well have raised the postal rates when you increased the salaries of the other civil servants. You did not come into the house and say that because other civil servants had received an increase in salary you would have to put up the postal rates.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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LIB

William Alfred Robinson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Order.

Topic:   POST OFFICE ACT
Subtopic:   AMENDMENT TO INCREASE POSTAGE ON LETTERS AFTER APRIL 1, 1954
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January 14, 1954