International Remailers’ Attempt to Undermine Canada Post's Exclusive Privilege

Background on Canada Post's dispute with international remailers

Canada Post states that 'For the last 10 to 15 years, several companies, some of which are surrogates of postal administrations abroad, have been collecting lettermail in Canada and bringing it to other countries where it is processed and remailed to other countries. ... Canada Post has the exclusive privilege of collecting, transmitting and delivering letters in Canada.

Canada Post initiated court action against several of these remailers. Through actions and appeals, the matter was put before several courts. In all instances, the courts confirmed Canada Post’s interpretation of the Act.

For several years, Canada Post tried to resolve this issue diplomatically via the Universal Postal Union, of which most postal administrations are members, as well as through direct negotiations with violating remailers. When this did not effect compliance with the law, Canada Post reluctantly resorted to litigation. '

Source: Canada Post Corporation, Key messages: Remailers, January 25, 2007,
http://extranet.canadapost.ca/html/intr@post/communications/key_messages/English/KM-Remailers-E.pdf

 

Chronology of legal battle and political campaign plus the response of others to date

August 12, 2004 - Justice James D. Carnwath of the Ontario Superior Court of Justice granted Canada Post's motion seeking a determination of a question of law. He found that 'a proper interpretation of s.14 of the Canada Post Corporation Act, in the English and French versions, is that any one or more of the activities of 'collecting, transmitting and delivering' letters is the exclusive privilege of Canada Post in Canada, including letters addressed to foreign destinations.'

Justice Carnwath said that he agreed 'that s.14 should be interpreted so as to accomplish the statutory purpose of the Act, that is, the provision to Canadians of a universal postal service at reasonable cost.'

He agreed with 'the submission that where the meaning of a statutory expression is ambiguous in one language, but clear and unambiguous in the other language, this court should find the clear and unambiguous meaning as the one common to both languages.' He also said 'the placement of the conjunction 'et' ('and') between the words 'relevage' 'transmission' and 'distribution' makes clear the intention of Parliament to grant an exclusive privilege to Canada Post within Canada ('au Canada') for each of the activities.

As well, he found that 'any delay in bringing this motion is not fatal to the determination of the question.'
Citation: 2004 CanLII 32378 (ON S.C.) 
Ontario Superior Court of Justice, Canada Post Corporation v. G3 Worldwide (Canada) Inc., August 12, 2004  

(See Section 14 and 15 of the Canada Post Corporation Act in Appendix A)

 

September 2, 2005 - Key Mail Canada and Key Mail International, supported by the Intervenors, Spring Canada and Citicourier International appealed the Ontario Superior Court of Justice decision rendered by Justice Carnwath.  The Court of Appeal for Ontario dismissed this appeal. The court agreed with Justice Carnwath's interpretation of s.14 of the Canada Post Corporation Act.  The Court said  'Whether Canada Post did or did not choose to assert an exclusive privilege with respect to the delivery of letters to international destinations in the past cannot bear on the meaning to be attributed to the statutory language giving rise to that exclusive privilege.'

Citation :  2005 CanLII 30837 (ON C.A.)
Court of Appeal for Ontario, Canada Post Corp. v. Key Mail Canada Inc., September 2, 2005  

 

October 31, 2005 - Justice James M. Farley of the Ontario Superior Court of Justice dismissed the motion of G3 Worldwide Canada Inc. (Spring). Farley said the Canada Post Corporation Act 'does not preclude CanPost from attempting to obtain 'a civil injunction, declaration and a reference on the issue of damages' and that its pursuit thereof is not an attempt to enforce the criminal law by way of civil proceedings.'

Citation :  2005 CanLII 46078 (ON S.C.)
Ontario Superior Court of Justice, Canada Post Corporation v. G3 Worldwide (Canada) Inc., October 31, 2005

 

December 22, 2005 - The Supreme Court denied Key Mail Canada's application for leave to appeal the decision of the Court of Appeal of Ontario (See September 2, 2005).

 

January 16, 2006 - The International Mail Association, a coalition of private Canadian and international mail companies, issued a media release that accused Canada Post of trying to 'expand its monopoly over international mail' and claimed that the corporation's action would destroy 'thousands of jobs linked to Canada's thriving $100-million outbound mail industry.'  The Association said 'We've been in business since 1988 yet it wasn't until 2002 that Canada Post went after some of us.' They called on the next federal government to conduct a parliamentary review of the exclusive privilege provisions of the Canada Post Corporation Act.

The release noted that the Association represents the interests of a number of private mail companies such as Key Mail Canada and Spring Global Mail, smaller letter shops operating all across the country, as well as some of Canada's biggest printing companies.

Source: CNW group, January 16, 2006 http://www.newswire.ca/en/releases/archive/January2006/16/c2627.html ,

 

April 27, 2006 - In the House of Commons, John McKay, Liberal postal critic and member of Parliament for Scarborough-Guildwood, asked Lawrence Cannon, Minister of Transport, Infrastructure and Communities, if he would use his authority under Financial Administration Act, to instruct Canada Post to put a halt to injunctions against international remailers.  In response, Minister Cannon said 'We are looking at that issue now and we will be taking note not only of that issue, but we will be advising the House as to what we want to do in the coming days.'

 

May 16, 2006 - In the House of Commons, McKay accused Canada Post of abusing its exclusive privilege and undermining “small business people” who deliver international mail. In response, Brian Jean, Parliamentary Secretary to the Minister of Transport, Infrastructure and Communities, said that the government would be “taking some time to make an appropriate decision which will be in the best interests of Canadians, having regard to the universal postal service that all Canadians have come to love and enjoy.” He noted that “many Canadians do not know this, that these international remailers are actually subsidiaries or associated with large foreign postal services. Indeed, these remailers employ Canadians, but Canada Post, of course, as everybody in the House knows, is the sixth largest employer of Canadians in Canada. These remailers actually collect the mail in bulk, ship it out of the country and then mail it locally at cheaper rates because there are cheaper rates available to them through foreign post offices.”

 

May 17, 2006 - CUPW staff contacted McKay's office to ask if McKay's comments in Parliament represented his position or the position of the Liberal Party of Canada. The union was not able to get an answer to its question and subsequently pursued a meeting with McKay.

 

May 23, 2006 - CUPW wrote a letter to Minister Cannon on a variety of postal issues, including the international remail issue. The union asked Cannon 'What kind of investigation has the government conducted into this issue? Will there be an opportunity for the public and postal workers to make their views known on this issue?' The union also reiterated its request to meet (its first request was made February 9, 2006).

 

May 24, 2006 - CUPW wrote to Bill Graham, Interim Leader of the Liberal Party, to ask about McKay's comments regarding remailers and Canada Post's exclusive privilege. CUPW asked Graham if Mr. McKay was speaking for himself on this issue or the Liberal Party of Canada. CUPW said that if Mckay was speaking on behalf of the Liberal Party, the union would also like to know when the Liberal Party developed this position, why it developed this position and why the party did not assert this position while in government.

 

May 24, 2006 - Justice G.B. Morawetz of the Ontario Superior Court of Justice ruled on Canada Post's application pursuant to the Rules of Civil Procedure for a permanent injunction to restrain G3 Worldwide Canada Inc. (Spring) from conducting postal activities that violate the exclusive privilege granted to Canada Post in section 14(1) of the Canada Post Corporation Act. Morawetz said that Canada Post had established its case and 'is entitled to the declaration that the operations of Spring violate the exclusive privilege granted to Canada Post in s.14 (1) of the Act' and that 'Canada Post is also entitled to a permanent injunction restraining Spring and its servants, agents and employees from carrying on, directly or indirectly, such operations within Canada...'. He said that 'in view of the fact that Canada Post did not see fit to take action for a number of years... there should be a stay prior to the injunction coming into force. Accordingly, the injunction shall not take effect until six months from this date.' A trial was ordered to determine the quantum of damages.

Citation :  2006 CanLII 16833 (ON S.C.)
OntarioSuperior Court of Justice, Canada Post Corporation v. Key Mail Canada Inc., May 24, 2006

 

July 5, 2006 - Justice Master Jane Egan of the Ontario Superior Court of Justice rendered a decision on a motion by defendants Key Mail Canada Inc. and Key Mail International Inc. for leave to amend their statement of defence. Most of the amendments were rejected.

Egan noted that the decisions by Morawetz and Farley were under appeal.

Citation :  2006 CanLII 22930 (ON S.C.)
Ontario, Superior Court of Justice, Canada Post Corp. v. Key Mail Canada Inc., July 5, 2006

 

July 25, 2006 - A letter from the office of Minister Cannon dated July 25, 2006 indicated that the government understood the problems that would be created by removing international letters from the exclusive privilege. The letter stated, “The activities of international remailers cost Canada Post millions of dollars each year and erodes the Corporation's ability to maintain a healthy national postal service and provide universal service to all Canadians.'

 

October 19, 2006 - Graham responded to CUPW's letter dated May 24, 2006. He said that McKay had 'noted the reactions of some, to the actions taken by Canada Post with regard to international remailers.' Graham also stated that “While the Liberal Caucus has taken no position on this issue, we will continue to challenge the minority Conservative government and propose other options in all areas of policy.'

 

October 26, 2006 - Minister Cannon told Parliament that “ the government will be coming forward in a few weeks with substantive steps to deal with the issue regarding international remailers.”

 

November 8, 2006 - CUPW met with McKay. He said that Graham's letter to CUPW is correct. He said he was voicing concerns that had been raised.

 

November 10, 2006 - Paul Dewar, New Democratic member of Parliament and Crown corporation critic, wrote to Minister Cannon to register his 'party's deep concern that the Minister is considering fundamental changes to the exclusive privilege of Canada Post without any public consultation, and without bringing this issue first to Parliament for robust debate and a vote.' Dewar told the Minister he 'would like to request that before taking any substantive action, you consider the implications such actions might have, and allow Parliamentary scrutiny of proposed changes.'

 

November 17, 2006 - CUPW wrote to Prime Minister Stephen Harper about postal issues of importance to rural and remote residents, including the international remailer issue and its possible impact on Canada Post's exclusive privilege to deliver letters. The union asked the Prime Minister to encourage Minister Cannon to meet with CUPW before taking any steps that might undermine the exclusive privilege. The union noted that the federal government should not consider such a fundamental change without a public debate and a parliamentary vote.

 

December 5, 2006 - CUPW received a response to its letter to the Prime Minister. The letter said that the union's comments had been carefully noted and a copy of the union's letter had been forwarded to Minister Cannon.

 

December 7, 2006 - Mario Laframboise, Bloc Quebecois member of Parliament and postal critic, gave 'notice of motion' at the House of Commons Standing Committee on Transport, Infrastructure and Communities,  to hear from a representative of an international remailing business, the CUPW, Canada Post President Moya Green and Deputy Minister of Transport, Louis Ranger.

 

December 13, 2006 - Minister Cannon told Parliament that “...in terms of the international remailers, I will review the span and the scope of the problem, and we will examine options, legislative options--'

 

December 20, 2006 - CUPW wrote to Minister Cannon to request additional information about the review of the alleged problem facing international mailers, and the legislative options he is considering. The union said it hoped that any review would include 'an impact study of the options you are considering, a public release of this study, as well as a full public debate on any proposals and a parliamentary vote.' The union requested, for the fifth time, a meeting to discuss this and other issues and asked if the Minister’s office had met with international remailers.

 

Note: The chronology does not contain all court decisions involving Canada Post and international mailers, but it does contain the major decisions that are normally cited by both parties. Legal documents may be obtained through the website of the Canadian Legal Information Institute, http://www.canlii.org/

 

APPENDIX A	ANNEXE A
Exclusive privilege 14.   (1) Subject to section 15, the Corporation has the sole and exclusive privilege of collecting, transmitting and delivering letters to the addressee thereof within Canada.	Privilège exclusif 14.   (1) Sous réserve de l’article 15, la Société a, au Canada, le privilège exclusif du relevage et de la transmission des lettres et de leur distribution aux destinataires.
Other mail  (2) Nothing in this Act shall be construed as requiring any person to transmit by post any newspaper, magazine, book, catalogue or goods. 1980-81-82-83, c. 54, s. 14.	Autres envois  (2) La présente loi n’a pas pour effet d’imposer à quiconque la transmission postale de journaux, revues, livres, catalogues ou marchandises. 1980-81-82-83, ch. 54, art. 14.
Exception 15.   (1) The exclusive privilege referred to in subsection 14(1) does not apply to:	Exceptions 15.   (1) Le privilège exclusif octroyé au paragraphe 14(1) ne s’applique pas aux documents suivants :
(a) letters carried incidentally and delivered to the addressee thereof by a friend of the sender or addressee;	a) les lettres qu’un ami de l’expéditeur ou du destinataire transporte à titre occasionnel et livre à celui-ci;
(b) commissions, affidavits, writs, processes or proceedings issued by a court of justice;	b) les décisions judiciaires et les actes, affidavits ou commissions rattachés à la procédure judiciaire;
(c) letters lawfully brought into Canada and forthwith posted thereafter;	c) les lettres licitement apportées au Canada et aussitôt postées;
(d) letters concerning goods for delivery therewith, carried by a common carrier without pay, reward, advantage or profit for so doing;	d) les lettres à livrer avec les marchandises auxquelles elles ont trait et acheminées à titre gracieux par un transporteur public;
(e) letters of an urgent nature that are transmitted by a messenger for a fee at least equal to an amount that is three times the regular rate of postage payable for delivery in Canada of similarly addressed letters weighing fifty grams;	e) les lettres urgentes transmises par porteur moyennant une rétribution au moins égale à trois fois le port exigible pour la distribution au Canada de lettres de destination comparable pesant cinquante grammes;
(f) letters of any merchant or owner of a cargo vessel or the cargo therein that are carried by such vessel or by any employee of such merchant or owner and delivered to the addressee thereof without pay, reward, advantage or profit for so doing;	f) les lettres envoyées par un négociant ou le propriétaire d’un navire marchand ou de sa cargaison, transportées à bord du navire ou confiées à un employé du négociant ou du propriétaire et acheminées à titre gracieux jusqu’à leur destinataire;
(g) letters concerning the affairs of an organization that are transmitted between offices of that organization by an employee thereof;	g) les lettres concernant les activités d’un organisme et transmises entre ses bureaux par un de ses employés;
(h) letters in the course of transmission by any electronic or optical means; and	h) les lettres en cours de transmission par des moyens électroniques ou optiques;
(i) letters transmitted by any naval, army or air forces of any foreign country that are in Canada with the consent of the Government of Canada.	i) les lettres transmises par les forces terrestres, navales ou aériennes d’un pays étranger présentes au Canada avec le consentement du gouvernement canadien
Collection (2) Nothing in subsection (1) shall be construed as authorizing any person to collect or receive any letters for the purpose of transmitting or delivering them as described in that subsection. 1980-81-82-83, c. 54, s. 15.	Restriction (2) Le paragraphe (1) n’a pas pour effet d’autoriser quiconque à recueillir des lettres en vue d’en assurer la transmission ou la livraison dans les conditions prévues à ce paragraphe. 1980-81-82-83, ch. 54, art. 15.