January 14, 1954

PC

William McLean Hamilton

Progressive Conservative

Mr. Hamilton:

Mr. Chairman, listening to

the explanations just given by the minister this afternoon I could not help going back to a remark made by a colleague of mine who said that the minister was such a charming man that the explanations he gave always convinced him that he was right until he could get away to think about them, at which time he came back to his original opinion.

This is an important matter we are dealing with. Our whole social organization has come to depend to a large degree upon the mail. Business in all its branches, the whole nervous system of the modern state, depends upon the quick transmission of information and ideas. We could not have arrived where we are today if it had not been for a reasonably effective international postal system. But this means that the indirect effect of any change in our postal system, even though it be small, is sometimes quite extensive or almost completely incalculable.

The Post Office Department is our largest civil government department, and this has been so throughout most of our history. The minister seems to feel that there are some

50,000 employees in the department, but I think the figure is just under 44,000. In the light of other things I have seen in this house, I am not surprised at the possibility of there being another 6,000 employees in the Post Office Department which the minister knows nothing about.

Of necessity our postal service must be a government monopoly. I do not think anyone could see anything wrong in that since the logic of the facts demands that that be so. But there is one thing we must remember. We should be as cautious with a government monopoly as with any other kind of monopoly. We must examine its actions very carefully in this house because we can be quite sure that there is no combines investigation legislation to look into the actions of the Post Office Department. I hope to show later on in my remarks this afternoon what can happen when you have two government monopolies working together, one in the field of transporting the mail and the other in the field of charging for the handling of the mail. It makes a very interesting and sorrowful picture from the viewpoint of the taxpayers of Canada.

The history of this department is a proud and interesting one. As you go back you find that the first carriage of letters in Canada occurred shortly after the British capture of Quebec. Interestingly enough, we 83276-71*

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find that at that time a letter posted in Montreal on Monday evening arrived in Quebec on Wednesday morning. From various indications I have seen, we have not made a great deal of progress since, at least on that particular route. However, at that time there was another service which was definitely inferior to anything we have today because it took almost thirty days to get a letter from Quebec to Halifax. I congratulate the Postmaster General on having improved that service.

Even as early as 1800 the subject of post office surpluses was a subject for debate, primarily on the question of whether they arose from one class of mail or another, and since I will be dealing with these surpluses in detail in my remarks it is interesting to note that the history of this contentious subject goes back as far as that.

There is another little item of history of direct interest to us today and that is the fact that the early post offices before confederation were operated under the direction of the Postmaster General in London, and he instructed his deputies in Canada to operate only those routes which were economically profitable. The result was that the various provinces, in order to give what they considered adequate service, were driven to making grants-in-aid so that certain other routes could be operated. It is interesting to note that an authority on the subject, Mr. A. D. Smith, in his book "The Development of Rates of Postage", states, on this question of grants-in-aid:

This development is noteworthy. It has always been found in Canada that for a large part of the country the circumstances are such a postal service adequate to the necessities of the inhabitants cannot be self-supporting, but the legislature has never hesitated to make grants from general taxation in order to provide means of communication.

If the minister has read this book I want to forestall him. I admit immediately it was published just before 1920, but the history of the department, as I shall show in a moment, bears out the statement made by this authority.

The question of the amount of the increase in rates is interesting. Instead of examining it from the viewpoint of the present rate to the proposed rate, let us look at it between 1942 and the date of the proposed rate. In 1942 our local rate was 2 cents for the first ounce. It is now proposed to make it 4 cents-an increase in the past twelve years of 100 per cent on local mail. In 1942 the long distance rate was 3 cents. It is proposed to make it 5 cents, an increase of 665 per cent.

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It seems to me, Mr. Chairman, that this increase far outstrips the increase over that period in the cost of living, and the increase we have seen in almost any other field of endeavour, or the increases which business has seen fit to put into practice. These increases are tremendous.

Even as late as 1951 we had a 100 per cent increase in our third-class mail-the second-class mail situation is hardly susceptible to debate here in so far as rate increases are concerned because of its complexity.

Now, let us turn for a moment and look at the fascinating financial history of the Post Office Department. We find that from 1869 to 1901 the department had a clear record -a deficit every year. From 1902 to 1932 it had twenty-two surpluses totalling $30,970,000, and nine deficits totalling $21,480,000. In other words, in this intermediate period in the second thirty years of its operation it was coming somewhere near breaking even.

From 1934 to 1953, the last twenty years, the department has had eighteen surpluses, totalling $94,658,000 and it has had two tiny deficits totalling $1,495,000. I will have occasion to refer to this later on, but I cannot emphasize this point too much, that the post office has turned from a department which was on a break-even basis-it was offering services to the public of Canada on an even keel-to a department which year after year after year has piled up surpluses and it has amassed money which it is putting into the treasury of Canada.

I also want to put on the record, Mr. Chairman, the figures for the past five years. In 1953 there was a surplus of $6,470,000-I am giving round figures-in 1952 the surplus was $6,649,000; in 1951 somebody made a mistake and there was a deficit of $1,327,000; and in 1950 there was a surplus of $1,889,000; and in 1949 a surplus of $2,976,000.

Let us examine the effect of an increase which happened in the past in the Post Office Department so that we can evaluate the possible effect of this proposed increase.

In 1943 the rate for both local and out-oftown first-class mail was raised to the present rate although other rates remained the same as is proposed under the new procedure. The gross revenue of the department, which had been going up slowly but steadily, and which had increased $3,698,000 the previous year, jumped $13,829,000 the first year of this increase, and the surplus, which had been $4,127,000 the previous year, was $12,586,000 the next year.

If you want to see it even more clearly, the surplus for the five years preceding the rate increase averaged $2,028,000, and for the five years following the rate increase the surplus averaged $10,707,000. There was five times as great a surplus arising out of this tiny one-cent increase in the letter rate.

Now, to get to just one or two other figures on which I will subsequently draw, we have the fascinating case of the carriage of air mail by Trans-Canada Air Lines, the government's private airways. Every month the post office pays the Trans-Canada Air Lines $487,000 for air mail carriage in Canada and the United States. I am dealing only with domestic air mail and not overseas. Just to get the figures on the record, let us see what happens to T.C.A. as a result of these payments. In 1952 T.C.A. received a total revenue of $44,012,000 of which $5,844,000 was for air mail. Their profit was $1,625,000. In other words, if the revenue from the air mail was deducted-I will develop this subsequently to show just how much larger this revenue to T.C.A. is than it should be-T.C.A.'s revenue would consistently show an operating loss, because in the past five years-I do not want to take time to put the figures on the record -the revenue from the carriage of air mail has been from three to five times the amount of profit T.C.A. has made.

For those of us who want to do a job of evaluating the post office system it is difficult to study it adequately because it is not completely operated and accounted for in the way that would be adopted with regard to an ordinary business. For example, certain costs of the department are not charged to them. The most outstanding example is the cost of its buildings. It gets them free from the Department of Public Works. On the other hand, the department is burdened with the perfectly legitimate costs of other departments, to the tune of over $4 million a year through the use of franking. In the third place, when you come to discuss individual types of mail carriage, you find that you cannot differentiate very successfully between first and third-class, air mail, local and longdistance, since stamps of the same denomination or a combination thereof might be used for any type of carriage.

Another factor is that 32 per cent of our long-distance mail is now carried by air, of which 7 per cent is paid for at air-mail rates and 25 per cent is paid for at regular rates but is carried by air. Then, to increase these complications, we have the business of the excise tax, a tax which apparently comes off before an election in one department and in one field and goes on following an election in

another field and in another way. In my short tenure in this house or in the study I have made of the matter, I have never before seen anything which was more closely related than is this business of taking a tax off before an election and putting it back on immediately following an election. I certainly was glad to see the tax come off. I agree that the excise tax should be off cheques. But when, previously, has a minister of the government had the audacity to stand up in the house and say, regarding a measure of the government introduced immediately preceding an election and which had cost the government revenue, that that revenue was going to be recaptured by introducing another tax at the first session of the house following the election? I do not think that has ever been done before in our history. I do not think anybody has ever had the audacity to do it.

Despite the complications, we certainly know that the rate structure of the post office is designed to charge more for one type of letter than for another. The book to which I referred earlier says this:

The penny rate for the ordinary letter, though so moderate, is considerably in excess of the average cost even of long-distance letters. Its maintenance, therefore, depends not on economic, but on general political and financial considerations. The question is, what general considerations shall be allowed to govern the rate? Shall it be fixed on the simple basis of cost and revenue or shall it be fixed at such a level as to yield a surplus revenue?

We can see this in the case of newspaper rates, or the second-class rates, because in those cases the post office has a deficit. I quote here from the evidence of the deputy postmaster general given before a committee of this house last year:

The newspapers, even after an increase was put into effect in 1951 for handling them, still pay next to nothing for the service they get. This handling brings about a deficit of about ?13J million annually.

There is nothing wrong with the fact that there should be a deficit for the handling of newspapers through our post office. It is right that the government of Canada, at the expense of the taxpayers, should do everything possible to see that information is disseminated as widely as possible and is carried from one end of this country to the other. We must keep our people informed. We must distribute these newspapers and magazines because of their cultural interest. We must do it because we have, with public funds, brought into being a great radio and television system which we are subsidizing, and this system is certainly in competition with the newspapers and the magazines. There is every reason in the world why this $13J million should be spent for what it is being

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spent for, but there is absolutely no reason why it should be charged to other users of the post office services. We should not load one class of mail with the costs of another class but we should rather bring out into the open and pay from general government revenues any special costs of this kind in the operation of a department.

Certainly the Post Office Department is trying to stay within its revenues. That fact can be seen very clearly. I refer again to the evidence of the deputy postmaster general when he appeared before that committee on rural routes last year and when he said:

We have followed the policy of trying to stay within revenues. You can never do so exactly. Sometimes we get a profit and sometimes a loss, but by and large the policy is to try and have services paid for by users rather than impose it as a tax through income tax or other devices.

A policy of trying to stay within revenues! Mr. Chairman, if a policy of trying to stay within revenues is one that results, over a twenty-year period, in a total surplus of some $90 million, either the policy is wrong or the interpretation of it is wrong. I do not know which it is, but I certainly know that when you make $90 million over a period of twenty years, and when you make $6 million and sometimes $12 million a year through the operation of your department, you are going far beyond the principle which has been set out by the minister this afternoon and by others of his associates in information such as this which we have set out before us. I admit that the deputy minister is quite right when he says he can never stay within revenues exactly, but I think $90 million is much too far away from being exact.

As to air mail, this resolution proposes to eliminate all air mail postage special rates and to carry all forward letters by air where delivery can be speeded. This is a commendable idea but it is not as significant as it may seem. In the first place a great deal of the mail can be handled more expeditiously by train or by surface transportation than by air. I need only mention all the mail between Montreal and Toronto or within 300 miles of any central point, where it is loaded onto the train at night, is sorted while it is travelling and is delivered more quickly the next day.

We have already noted that almost one-third-32 per cent-of our mail is now going by air and that only 7 per cent of our air mail is actually prepaid as air mail. So do not let us think by any manner of means that this is a useful gesture or one which means a great deal. Let us not think that the Messiah has come down from on high and

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is now taking off the seven cent tax on air mail, something which will benefit every one of the citizens of Canada. It may be presented in such a way but it certainly is not so. In fact, I think that in the light of the things I have set forth it is highly unlikely that any really sound improvement or advantage is going to come from the proposed reduction in the air mail rate. Let us examine the weaknesses of the agreement with Trans-Canada Air Lines. It costs the Post Office Department at the present time approximately $1.20 a ton mile to ship mail by T.C.A. T.C.A. will carry freight at approximately 30 cents a ton mile, so the Post Office Department is paying four times as much for exactly the same type of cargo as commercial business or the man who is shipping freight by air. What does this show us in the over-all operation of this air line? How does the Post Office Department become implicated in it? It becomes implicated in it because in 1952, 59 per cent of the freight and express paid only 36 per cent of the air line's revenue from freight express and mail. Everything else was loaded on the post office.

Not only is this inequitable, not only is it most unfair, not only is this one of the major reasons why the department is in the position it is today, but it is an example of what happens when two nice little government monopolies get together. The government-operated air line needs some revenue at this point so it can make a good showing and not have a loss. Therefore the minister concerned comes along and presumably makes a private deal, certainly not one in the eyes of the public, with the minister responsible for the Post Office Department. They probably spend fifteen or twenty minutes over the thing. They work out their mutual problems, and we end up with the taxpayers being loaded with this burden which is transferred down through the Post Office Department.

As far as I can see, there has been absolutely no public discussion of this agreement, and this is in such marked contrast to what has taken place south of the border that I think it should be brought out into the open. I do not think any of us on this side of the house like these little private government deals by which two departments work out something so that they can put the best face on things as far as the public is concerned and so that they can bail themselves out when they get into difficulty. Here is a book of 400 pages entitled "Air Mail Payment and the Government" which is concerned solely with the practice in the United States. I should like to quote a few words from page 102 as to their rate-making technique with

respect to the charges which are made to the post office for the carrying of mail. The extract reads as follows:

The examiner studied the record of the hearing with a view to making a "proposed report''. Fortunately for the examiners the record was usually short in comparison with the records of long drawn out rate cases in other utilities. The longest record contained 1,975 pages, the shortest about twenty-five, and the average case only about 250.

I would love to know the length of the record by virtue of which the agreement between T.C.A. and the Post Office Department was made and how much examination was given to the facts of the case. I do not think that is the sort of thing that can be brought out publicly and laid before this house. I do not think anyone would dare because I do not see how it is possible for them to defend a case in which post office mail is carried at four times the rate for exactly similar commodities being airlifted for private firms or other organizations.

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

Mervyn Arthur Hardie

Liberal

Mr. Hardie:

Will the hon. member permit a question? He quoted a T.C.A. rate of 30 cents a ton mile. Is that the air cargo rate or is that the express rate?

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:

That is the air freight rate. The other is an estimate made from the Post Office Department report and the T.C.A. report.

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

Mervyn Arthur Hardie

Liberal

Mr. Hardie:

I presume that air cargo is carried at that rate when space is available, but the rate paid by the Post Office Department is paid by it so that mail will be given immediate consideration on all aircraft. Is that not true?

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:

As I understand it, air mail is carried on Trans-Canada Air Lines in two ways. If it is prepaid, in other words, at the seven-cent rate, it automatically goes by air. If it is not prepaid it is treated on the same basis as air cargo, and since only 7 per cent of air mail is prepaid whereas another 25 per cent is carried at normal postal rates I would assume that the situation with respect to air cargo and air mail is very similar. However, I have no doubt that the Postmaster General will be good enough to explain that to us as time goes on.

I should like to say just a word, because I did cover the matter previously in an earlier speech, on the question of deliveries of mail. What a miserable situation it is that great areas of our country, major portions of our cities, important business communities, important sections of important business communities, should be denied adequate mail delivery, and should be told that they have to get by with one delivery a day.

Streets where you have store after store after store and business after business after business adjacent to each other are, in many cases, denied twice daily delivery. They have to work out other methods. They have to supplement the work of the Post Office Department with the work of their own staffs in order to be able to get their mail on time and deal with it adequately.

This and many other things are a reflection of what seems to be a general decline in the standards of the post office service in the last number of years. I do not think that it is necessarily a decline due to the members of the staff at the lower level, because most of them have been in their positions for many years. But the decline is taking place and we must search for the cause somewhere. Since the only place where there seems to be some change is in the top people in the department, and particularly the minister, perhaps we should examine the minister. However, I would suggest that if the minister feels so inclined he might be brave enough to let us have access to the Woods-Gordon report to which he has referred. As I understand it, that was a study of certain aspects of the operation of the post office, and I believe it has never been tabled in the house.

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 was a managerial report. We only have a few copies, but if my hon. friend will come to my office I will be glad to let him see it.

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:

I think we might get a great deal of interesting information from it and I shall be delighted to see it. Thank you for the offer.

Summarizing what I have tried to set before the house today, may I say that, first, the government has used the post office to pile up huge surpluses in the past twenty years in direct contradiction of the policy of the Post Office Department in previous years; second, the government, for reasons best known to itself, has forced the post office to subsidize the operation of Trans-Canada Air Lines in order that Trans-Canada Air Lines might show a profit; third, the government, through excessive use of the franking privilege by its various departments, is burdening the post office with costs of other departments; fourth, that the users of first-class mail are being forced to pay more than the cost of their service in order to subsidize losses on other classes of mail which are quite legitimate, but which should be properly charged to the general revenue of the government; fifth, that this government is not giving adequate or sufficient postal service at the present time; and, sixth, that

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the government and the Postmaster General seem to have made no demonstrated case at the present time that the proposed increases are required.

For these reasons I am opposed most definitely to the legislation now before the House of Commons.

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:

Mr. Chairman, I rise at this moment only on a question of privilege. I wish to make it clear that I do not raise this point of privilege in any feeling of anger- perhaps it is more one of sorrow than of anger. But I do think the record should be kept straight.

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

Edward Turney Applewhaite (Deputy Chair of Committees of the Whole)

Liberal

The Deputy Chairman:

Order. Before the hon. member states his point of privilege, is it not a fact that a question of privilege should be raised when the house is sitting and Mr. Speaker is in the chair?

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

An hon. Member:

Quite right.

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:

I draw to your attention the fact that this point of privilege which I wish to raise has to do with an incorrect statement concerning this afternoon's vote; in other words it has to do with the very matter we are discussing right now. And, from the laughter on the other side of the house, I should think that most members know what I have in mind.

The afternoon issue of the Ottawa Journal states that it was the P.C.'s who forced the vote which we had a while ago on the question of increasing the postal rates. We are fully aware of the fact that the Conservatives are just as much opposed to this increase as we are, and have expressed strong views against it. But let the Journal keep the record straight. Surely they know that it was the C.C.F. which forced the vote against this measure.

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

Joseph William Noseworthy

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

Mr. Noseworthy:

Mr. Chairman, I am sure every member in the house agrees with the minister that probably more revenue is needed by the Post Office Department by reason of the introduction of the forty-hour week and the increased remuneration for postal employees. We have no quarrel with him on that point.

Our quarrel is with the principle he laid down that the Post Office Department should be a paying concern, that everyone agrees with that principle, and with the ideas in that connection he expressed. We disagree with him in what he describes as the equitable waj of bearing the cost of the Post Office Department. He says the most equitable way is for the users of a service to pay for that service. We know that in the session

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of 1951, when the Postmaster General came before the house and pointed out that there was a deficit of something more than $20 million in the service rendered by his department to the newspapers and periodicals by way of second-class material, and at that time proposed to raise the postal rates, everyone in the house agreed that those who were using the service-that is, the newspapers and periodical publishers-should not be required, by way of increased postal rates, to make up on newspapers and periodicals the deficit then existing.

We recognized that there was a service to the community at large. The question is: should the users of first-class mail be saddled with that deficit? In 1950 and 1951 the reports given by the Post Office Department set out graphically a breakdown of the postal dollar received and spent. That information is omitted from the 1953 report, and I am going to ask the minister to give us similar information for that year. We see that in 1951, out of every postal dollar received, 53 cents came in from ordinary first-class letters. Only 35 cents of the postal dollar was spent in connection with servicing that first-class mail. Here was a surplus of 18 cents on every postal dollar, or roughly $36 million surplus in that year. The users of the first-class mail service paid into the Post Office Department approximately $36 million more than the first-class mail service cost the Post Office Department. In that same year there was a deficit from the service given in respect of newspapers and periodicals amounting to about $28 million.

I do not know what change has taken place. We raised the rates slightly for newspapers and periodicals; but in recognition of the fact that it was in the best interests of our society that we should subsidize that particular service, the government modified its original bill and raised the rates less than it had intended originally. This was by way of a concession to the principle that we were justified in subsidizing that particular post office service.

Is there anything equitable in asking the users of first-class mail to bear the brunt of that subsidy? In that same year of 1951 we see that two and one-half cents out of every postal dollar was spent on franking, making a total of something over $4 million. There, again, are we justified in asking those who are using the ordinary mail service and who are sending first-class mail to bear the cost of the franking privileges exercised by the government? Are we justified in asking those people to pay an extra $4 million for the government franking service and about $20 million by way of a subsidy to the newspapers and periodicals?

If we are to accept the principle that those who use the postal service should pay for it, then we would certainly have to increase drastically the rates paid by, for instance, Life magazine, to mention only one. But that principle has never been recognized. As I have said, I feel there is no call at this time to add another $14 million to the amount to be paid by the users of the first-class mail privileges in order to pay the subsidy which the Post Office Department is paying to the newspapers and periodicals, by the franking privilege and in other ways.

Will the minister tell us what the revenue from ordinary letter mail was in 1953; what the expenditure on ordinary mail was; what the revenue from newspapers and periodicals was and what the cost to the post office of that service was, so that we may get that picture straight for 1953 as it was given for 1950 and 1951?

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

Wilbert Ross Thatcher

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

Mr. Thatcher:

Very briefly 1 should like to join with hon. members who have this afternoon protested against the increase in postage rates. In my opinion the Postmaster General did an excellent job of presenting the arguments for a very weak case.

What does this legislation ask for? Specifically, it asks parliament to increase the general postage rates by one cent. Actually the legislation is much more significant than it appears to be on the surface. Apparently for the first time since the last election, the government is going to embark on a new program of heavier taxation. Today the government is asking parliament to approve legislation, which in effect will force the hard-pressed Canadian taxpayer to dig down in his pockets for another $14 million.

What is the reason that the minister gives us for bringing in this legislation? He argues that the post office must be kept self-sustaining. He says that if it is to be self-sustaining, he must have another $14 million. Personally, I cannot accept that point of view without qualification.

Of course everybody would like to see the post office balance its books; but it seems to me that the main function of the post office is to provide essential public service, and not be a revenue producer. I believe that when this tax bill or any other tax bill comes before parliament we as members should look to the over-all financial picture, and not just to the revenue and expenditure position of one specific department. If today we look at the over-all picture, what do we find? Does this government need an extra $14 million in revenue? The answer is a very emphatic "no".

I remind the committee that tor the past seven years the government has had very heavy and very substantial surpluses. These surpluses have reached the approximate total of $2-5 billion. I also remind the committee that these surpluses have been achieved, despite the fact that at the end of each fiscal year the minister has been able to bury a few hundred million dollars in such funds as the "civil service superannuation fund", "the reserve for possible loss on the ultimate realization of active assets" and others. There is every indication that these annual surpluses are continuing.

If any hon. member will look over the accounts it will be obvious to him that we shall have another large surplus this year. According to the reports from the Department of Finance, in the first seven months of this fiscal year, Canada had a surplus of $266 million. In other words, up to the end of October the minister took $266 million more from the taxpayers than he needed. Yet despite that fantastic surplus the government today has the audacity to come to parliament and say: "We need another $14 million". I say that this postage increase is unwarranted; it is unnecessary and in my opinion would be harmful to the best interests of the country. It should be rejected by this parliament. If the minister needs more revenue for the post office, let him take it from the huge surplus which the over-all revenue accounts are bound to have at the end of the fiscal year.

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

Jean-François Pouliot

Liberal

Mr. Pouliot:

Before this resolution carries I have a few remarks to make. At first sight it must be unpopular on account of the fact that taxes are always unpopular. It is very easy to deliver a speech saying that there is great taxation and that there should be less. But last year there was less taxation in the Post Office Department, because stamps were removed from cheques, drafts, notes, and so forth. It is true that it was a measure that was initiated by the Department of National Revenue, and that we were supposed to affix national excise stamps to negotiable instruments; but most people used postage stamps for that purpose. If the abolition of that tax did not affect the post office apparently, it did materially; and since the tax that represented the postage stamps on negotiable instruments no longer exists it means that last year there was a reduction of taxation in the Post Office Department. That is the first point.

The second point is this. How many people will be affected by this measure? A very small number. It is true that the new tax will have to be paid by those who write 83276-72

Post Office Act

letters; but how many people have an extensive correspondence? How many people write more than one or a few letters daily? In each constituency there is a large number of people who think a lot before writing a letter. They put their hand ceremoniously on the pen handle and they dip it in the inkstand and write the letter, and they also affix the stamp ceremoniously on the letter. They do not write many letters. I know that sometimes I have to wait a long time to receive an answer to my letters, although they are sent by Her Majesty's mail from the House of Commons. It happens so often that frequently I have to supply a stamped envelope to get an early answer. It is not because people are neglectful; it is because they have not the time to write. How often do we apologize, sir, in answering a letter, for the delay. Sometimes we meet friends and then we are quite embarrassed. We say to them: "You sent me quite a nice letter. I apologize for being so long in answering you, and I hope you will pardon me." Everybody knows that that is so. It happens to everybody. To be honest, sir, how many of your constituents and mine have an extensive correspondence, a correspondence that can be compared with that of any hon. member in the House of Commons? There are very few. Therefore the tax will not be a heavy imposition on a large number of Canadians. That is the second point.

The third point is that those who have heavy mail will have the opportunity to charge the cost of the stamps against their income tax returns. Any company or individual spending $1,000, $2,000, $5,000 or more for the purchase of postage stamps can deduct that amount, along with other office expenses, from income for income tax purposes. This expenditure will not affect revenue or profit; it will not be deducted from revenue but from income for income tax purposes.

My fourth point is that no serious complaint has been made of the administration of the Post Office Department. I am satisfied that the letters that I send reach their destination and that the letters sent to me come to me. It is easy to complain that the service is not satisfactory because it takes so long for a letter to go from one point or another. The fault may lie with the people writing the letters waiting until after the mail carrier has gone before mailing their letters.

In the larger communities the number of deliveries per day has been reduced from two to one. That may create some inconvenience, but the mail is delivered as early as possible. Large corporations, companies

Post Office Act

and many individuals engaged in business have post office boxes from which they can get the*jr mail any hour of the day as it comes off the isains. This is most convenient.

Because of the requests of the unions the work week is not as long as it was before. As a result the department requires more men. I have written many times to the Postmaster General asking him to adjust the payments made to the mail carriers, and I suppose all hon. members have done the same thing. All this costs money. I regret that I did not receive a favourable answer early enough and as a result have had to write quite often and thus my file dealing with the adjustment of mail contracts has grown fatter and fatter.

These people need to be well paid. When the minister was faced with a decrease of revenue in his department he sponsored legislation to adjust mail carrier contracts. That move was supported by all parties in the house. There was no objection to it, but now we have to pay for it. We cannot eat our cake and have it too.

I do not think anything serious has been said this afternoon against the proposal except the fiery speech of the hon. member from Montreal who tried to create the impression that it was the Progressive Conservative party rather than the C.C.F. which had initiated the vote this afternoon.

I listened to the remarks of the hon. and gracious member for Hamilton West. My knowledge of the English language is rather limited, but I think I understood her to indicate that she was not supporting the minister's resolution. Her remarks were quite technical in nature and I could not possibly memorize them and therefore I am not in a position to answer her.

To conclude, as it is about time to do so, I wonder if there is any other country where a letter carrying an ordinary stamp goes air mail. I was struck with the statement of the minister that he hopes in future to have all letters carried by air. As I say, I wonder if that is done by any other country. If not, then Canada is in advance of all countries in the postal union.

This is most important because of the great distances between our coasts, between Newfoundland, Nova Scotia and British Columbia. We should be able to keep in touch with each other in the easiest manner and shortest time. This has been done and I congratulate the minister upon his accomplishments. I believe that in spite of what has been said, much of which I have not understood, everybody is satisfied.

At six o'clock the committee took recess.

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

AFTER RECESS The committee resumed at eight o'clock.


CCF

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

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

Mr. Knowles:

Mr. Chairman, I believe that those of us on this side of the house would like to express to the Postmaster General our sympathy for him in having to present this resolution to the house, and having the task of piloting it through. After all, it did so happen that the announcement that there would be this increase in the postage rates was made by the Minister of Finance on December 8, 1953, when the Postmaster General was not even here. He was down in New York at the United Nations representing Canada. Then, two days later, on December 10, another colleague of his, the Minister of Citizenship and Immigration, moved the resolution at its first stage, that stage when the approval of the Governor General was announced, and that put the resolution on the order paper to be dealt with later. Now, when it is dealt with, it is the Postmaster General who has the unpopular task of trying to sell the house this proposal for an increase in the postage rates.

During the attempt the Postmaster General made this afternoon to defend this increase he referred a number of times to the fact that there had been a loss in post office revenue because of the removal of the tax on cheques, which was effected in the budget of last year. When the Postmaster General was pressed as to what that loss was he said, subject to correction, that it was around $7 million or perhaps $7J million. Later I understood him to suggest that the figure might be $10 million altogether and I take it when he was quoting that figure he had in mind the loss in the purchase of postage stamps for use on cheques as about $7J million and the rest of that loss as due to the discontinuance of the little blue excise stamps, which I take it came from another department.

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

Alcide Côté (Postmaster General)

Liberal

Mr. Cote:

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:

The minister and I have said exactly the same thing. In so far as the Postmaster General's department is concerned the loss in revenue from the cancellation of that tax was of the order of $7

million, and the additional loss arises from the tact that the blue excise stamps are no longer being purchased.

But may I draw to the attention of the Postmaster General and to other members of the house the fact that there has not yet been a full year's experience without the stamps on cheques. As a matter of fact, when the Minister of Finance presented his budget last year, on February 19, he gave an estimate as to what would be the loss in revenue for a full twelve-month period from the cancellation of that tax on cheques. That estimate of the Minister of Finance can be found at page 2134 of Hansard, dated February 19, 1953, and the figure given by the minister was $12 million. I realize there is a difference between $12 and $14, but these figures are awfully close together. Here we have the Minister of Finance telling us last February, just before an election, that he was prepared to cancel the stamp tax on cheques at a loss of $12 million. As soon as the election is over the same Minister of Finance announces he will recoup that loss by asking the Postmaster General to collect an additional $14 million a year by an increase in the postal rates.

I suggest, Mr. Chairman, that we on this side of the house who are drawing attention to this fact are pointing to something that is very real, namely, the way in which this government juggles with figures and juggles with these taxes, particularly at election time. Actually what we have here is the removal of a tax just before an election and putting it on again just after. To put it on under precisely the same name would be a little too raw even for this government, so the name is changed.

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

Some hon. Members:

Oh, oh.

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

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

Liberal

The Chairman:

I wonder if the hon. member would direct his attention to the imposition of this tax and not to the removal of another.

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

January 14, 1954