OTTAWA – Canada Post CEO Deepak Chopra is standing by the organization’s 22 presidents and vice-presidents as the Crown corporation continues to lose money, but he says it will trim its management team in proportion to looming staff reductions.
Chopra is also rejecting any potential conflict of interest for being a director with the Conference Board of Canada, which earlier this year provided a number of restructuring options to Canada Post that were ultimately adopted as part of sweeping changes announced last week.
In an interview Tuesday with Postmedia News, Chopra said Canada Post’s $6.5-billion unfunded pension liability — and the associated financial crunch — is driving many of the changes to its operations, which include ending door-to-door residential mail delivery in urban areas, eliminating thousands of jobs and increasing the cost of sending letter mail.
But as the $7-billion corporation plans to chop hundreds of millions of dollars in spending and eliminate between 6,000 and 8,000 jobs (mostly through attrition), Chopra is unapologetic at the fact that the Crown corporation’s management team has one president and CEO, two “group presidents” and 19 vice-presidents for a group of companies with almost 70,000 employees.
“When you look at our structure … (the management team) reflects the size and complexity of the organization. It goes through intensive scrutiny on an annual basis by the board of directors who review structure and everything that goes with it,” Chopra said.
However, Chopra said he’s committed to reducing the size of the management team as the company starts eliminating positions.
“What I would like to do is, in the same proportion, if you look at the percentages for example, so if you’re looking at X percentage of our workforce getting readjusted, I expect the management ranks to reflect that,” he said.
Chopra is paid between $440,900 and $518,600 a year in salary, the highest range for governor in council cabinet appointments. Canada Post’s 2012 annual report says the board of directors and senior executives received a combined $10 million in total salary, short-term benefits and retirement benefits. Another $2 million was paid out in “termination benefits.” Chopra wouldn’t specify, however, about what his total compensation was in salary and other benefits.
Canada Post is hoping its five-point plan for overhauling operations will save the company between $700 million and $900 million a year, once fully implemented.
In announcing the changes to its operations, Canada Post repeatedly highlighted a Conference Board of Canada report that documented the challenges facing the postal service and provided options for cutting costs. Among the options were eliminating door-to-door service for urban residential households and increasing postal prices — options the Crown corporation has adopted.
Chopra is a member of the board of directors of the Conference Board of Canada, but he insisted there is no conflict in serving as a director in a volunteer, unpaid position with the think-tank, which provided solutions to him on how to streamline operations at Canada Post. When the Crown corporation was looking for someone to review the future of Canada Post, the Conference Board was considered a valuable organization that could provide “meaningful contributions to this process,” he said.
“So my unpaid volunteer work I don’t believe in any way is going to influence a highly celebrated and credible, independent think-tank to do anything that they would not otherwise consider appropriate,” he said.
The Crown corporation’s financial woes are heavily tied to the $6.5-billion pension shortfall. Canada Post was facing solvency payments estimated at $1 billion for 2014 alone before receiving temporary pension relief from the federal government.
Chopra said it’s clear major reforms are needed to the pension plan, including having all new employees move to defined-contribution plans, which are often considered riskier for workers. The corporation will sit down with its unions to study pension models both at home and abroad to find a way to make Canada Post’s pension plan sustainable in the future, he said.
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