April 21, 2004

(Letter sent to the Edmonton Sun, Calgary Sun, Ottawa Sun and London Free Press)

Greg Weston's column is way off base.

The Government of Canada and Canada Post established a multi-year policy framework in 1998. The framework proposed a financial management regime with appropriate targets for key business indicators, such as operating income, return on equity, dividend policy, and capital structure and leverage, while establishing challenging financial performance targets.

The corporation makes an annual dividend payment equivalent to 25 per cent of the prior year's net income to the federal government. This year Canada Post will pay a dividend of $63 million. Canada Post has been profitable for nine consecutive years and has generated $779 million in net income and paid $448 million in dividends and other payments to the Government of Canada.

Mr. Weston is wrong to say Canada Post spends money as it sees fit with no government approvals needed. The Corporation submits and annually updates a five-year business plan to Treasury Board, which approves the proposed spending outlined in the plan.

This year's Annual Report reflects Canada Post's conscious effort to significantly enhance the level of disclosure and transparency in respect of our financial reporting. The document provides a standard of public disclosure that meets or exceeds the practices of Canada's largest publicly traded corporations.

Canada Post is one of the most audited companies in Canada. There is an annual independent audit by external auditors; a five-year independent special examination of business and management practices; an annual independent audit of service performance; and a large internal audit practice conducting on-going audits.

Competitive services contribute significantly to Canada Post's revenues and make our universal postal services affordable. If Canada Post could not provide competitive services, stamp prices would have to rise significantly, necessitating the government to spend hundreds of millions of tax dollars a year to support the corporation, or abandon the universal postal system.

As for the Auditor General "obtaining a special order" to investigate Canada Post, it is the Auditor General's Act that requires her to obtain an Order in Council to audit Canada Post because she is not the official auditor of the corporation.

Sincerely,

John Caines
Manager, National Media Relations
Ottawa (613) 734-7675