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Mr. Speaker, first of all, I would like to say that the question of privilege just raised appears to be very worrisome. I am sure that once the Speaker has heard the views of each party, he will make a very enlightened decision.
Today we are debating the 20th report of the Standing Committee on Industry and Technology. It deals with interchange fees, the fees that credit card companies charge businesses. This is a very important issue. As soon as I was elected to the House, businesses in my riding asked me about it. Convenience stores, gas stations and grocery stores say it makes no sense. Their business model relies on a high volume of sales with small profit margins. The share of their costs that goes to credit cards is high, because every time a transaction is paid for with a credit card—whether it is a full tank of gas, some groceries or a chocolate bar—the fee charged is very high. The fee is much higher than elsewhere in the world, in many countries. I will be citing at least one case soon.
This erodes the revenues of merchants. We know that grocers, convenience store owners and small businesses operate in a highly competitive environment, while credit card companies practically form a duopoly or oligopoly. Apart from Visa, Mastercard, and maybe American Express, there are practically no other cards in use. As a result, these credit card companies can band together and charge exorbitant rates.
The Standing Committee on Industry and Technology has started studying the issue. After hearing testimony from certain witnesses, and before even drafting a full report and getting to the bottom of the issue, it decided that the situation was serious enough to immediately send the House a report entitled “Potential anti-competitive behaviour in Canada's e-Transfer ecosystem”. The website of the Standing Committee on Industry and Technology states the following:
Pursuant to Standing Order 108(2), your Committee has considered the matter of Credit Card Practices and Regulations in Canada.
The report simply contains the following sentence, which reads:
Following testimony from banking executives, your committee recommends that the Competition Bureau be encouraged to investigate potential anti-competitive behaviour in Canada’s e-Transfer ecosystem, and if deemed necessary, the broader electronic payments industry in general.
The members of the committee realized how big of a problem this is and determined that the Competition Bureau needed to quickly address it while the committee continued its study. That is what we are debating today.
Obviously, we are strongly in favour of this. I would be surprised if there were any member of this House who is not favour of it because, as I said, as soon as I was elected, many businesses in my riding and across Quebec began asking me about this and continue to do so. I am sure that all members of the House are being asked about the credit card fees being imposed on consumers and the fees that businesses have to pay. This is still happening.
A little after 2015, Liberal member Linda Lapointe introduced a private member's bill. She received a rather choice spot in the order of precedence when her name was picked out of the hat. Ms. Lapointe ran a grocery store in her riding. She thought that this was so important that she used her round to raise the issue. The Liberal government ended up pushing back her turn to speak until it opted to make her a parliamentary secretary, the immediate effect of which was to strip her of her private member's bill. This was the first action the Liberal government took on the question of fees charged to merchants. The party had among its ranks a member who had a grocery store and who chose to use her parliamentary privilege to appeal to the House for changes to be made. I repeat, I do not see who could be against this, since it affects all businesses in our ridings. In the end, the government found a strategy to ensure that the question never came up for debate.
At the same time, in the Bloc Québécois, my colleague from introduced a bill on the same topic, with basically the same effects, but with the election and the minority government, it never came up for debate. It is time that that changed.
In 2022 there was a ray of hope when the indicated in her budget that she was setting the situation right. We thought we had a nice victory to celebrate, and that at last the minister had gotten off her high horse and seen the light.
She said that the matter of interchange fees on Visa and MasterCard transactions would be settled, but as we get more experience we are beginning to understand the way things work. They say all the right things and they say they are going to solve the problem. The fine print at the bottom of the page, however, says that the government will start by asking the credit card companies to fix the problem on their own. If they do not, the government will settle the matter and create a law. Thus, the and the government are fine with the temporary, rather symbolic measures that the credit card companies have taken, which change nothing for grocery stores. In fact, grocers have appealed to us. I will return to this.
There is a link between what the credit card companies are doing, the fees they charge merchants and the price for a basket of groceries. This is highly significant. We have been living with inflation for years now, and for years the government has said it would take action. Last year, shortly before Thanksgiving, the said that he had spoken to grocery store representatives and that turkeys were on sale. The thing is, though, that every year on the eve of Thanksgiving, grocery stores offer a deal on turkeys, since Thanksgiving is right around the corner. The minister said it was thanks to his intervention, but we could see that his intervention did not fix the problem.
There is one specific thing the government can do to solve the problem: address interchange fees and the fees that credit card companies charge grocery stores. This how the government can intervene to bring grocery prices down. What is it actually doing? The Minister of Finance and the government are settling for the voluntary measures Visa and Mastercard chose for themselves. Grocery store owners reached out to us and told us that it is not working. They say credit card companies' voluntary measures are not doing anything for them, so the government needs to step in. I forwarded that letter along with a summary of their demands to the minister more than two months ago. As we can see, nothing has changed.
What is the problem? In Australia, for example, the fees that merchants can be charged are set through regulations and laws. They are capped at 0.5%. Here, the average is 1.4%, three times higher. Why are our fees three times higher? Are credit card fees, transactions and administrative expenses higher in Canada and Quebec than in Australia? I do not think so. I think that Australians had the necessary political will to intervene and pass legislation. They saw an oligopoly, and they knew that the free market only works if there is competition. They saw that companies were using their oligopoly to get more value and decided that that was unacceptable, so they reduced the fees to 0.5%. Here, the fees are 1.4%, three times higher. Some credit card companies even charge merchants up to 4% in fees, while, in Australia, they pay eight times less, or 0.5%.
I studied economics. In economics 101, we are taught how companies react. Companies will do whatever it takes to maximize their profits. If they have an oligopoly, they will use their power to increase fees, get more value and earn more profits. I taught that every semester in the introduction to economics class I used to teach at CEGEP. The government knows this, so it is up to the government to intervene by making regulations or passing laws capping these fees.
The government says that it is doing everything it can to lower the cost of groceries. However, there is one change it could make that it has known about for years. A Liberal member even tabled a bill on the subject. If, for example, fees were set at 0.5% instead of 1.4%, that would be almost a full percentage point lower. Grocery prices would fall by almost one percentage point. The major credit card companies would make normal profits rather than excessive profits. However, the government refuses to make that happen. What did the government do? As I was saying, in the 2022 budget, the said that the government was going to do something, but that the companies would have to tell the government what they wanted to do first.
Here is what these credit card companies did. They crunched the numbers. Keep in mind that, just a few years earlier, we had been talking about the free market, duopolies and oligopolies. The retail sector has some really big players, starting with Walmart. Walmart decided to capitalize on its strong market position. The company was so dominant in its sector that it told the credit card companies that the days of 4% transaction fees on certain cards, or even 1%, 1.5% or 2%, were over. Walmart instructed them to do as it said, meaning that they would have to charge a reasonable rate or Walmart would refuse to accept their cards. Walmart's market position gave it the clout to make such a move. Walmart even refused to accept Visa for a few months, just to show that it was serious. Visa and Mastercard decided to lower the transaction fees they were charging Walmart. Walmart had pushed back hard, and it worked.
Following the minister's request to help out SMEs, the credit card companies crunched the numbers and said they were going to offer the same rate they give Walmart, but only to small businesses with low sales volumes. They crunched the numbers and said they did not want to include grocery stores because that is where they make their money. I do not want to misspeak, but I believe that Mastercard said that if a company's annual sales were lower than $175,000, it would charge it the same rates as Walmart. Visa set its limit at $300,000.
If a company makes $175,000 or $300,000 in sales per year and takes in a 10% profit, that means it clears $17,000 or $30,000 in profit per year. That would not even pay the median wage. Obviously, this measure would only cover very small businesses. Grocery stores, like convenience stores and gas stations, have a low-margin business model. It is something like a 1% to 2% profit margin, but on a huge volume of sales. They are therefore excluded from the voluntary temporary measures Visa and Mastercard put in place at the minister's request. The minister and the government gleefully tooted their own horms, claiming they had won.
They won all right, but only at the rhetoric game. All morning, they have been saying that they are protecting SMEs. However, these are temporary measures. What is more, businesses that rely heavily on credit card payments are excluded.
As I was saying, my colleague from , who was the industry critic at the time, and I received a request late last summer that we immediately forwarded to the minister. It came from the Quebec Food Retailers Association. Founded in 1955, this association represents food retailers who support the development of the food industry. It reiterates exactly what I am saying, that in the 2021-22 federal budget, the government had promised to “[l]ower the average overall cost of interchange fees for merchants” and “[e]nsure that small businesses benefit from pricing that is similar to large businesses”, such as Walmart. This is what the association says:
Unfortunately, the agreement that followed between the government and credit card issuers states that a merchant must have an annual Visa sales volume of $300,000 and an annual Mastercard sales volume of $175,000 to benefit from reduced rates, but this excludes almost every food retailer.
The agreement is therefore useless. It does not reduce the price of groceries, which are a necessity. The association notes that its members have low profit margins, and it gives an example. I mentioned Australia, which has capped fees at 0.5%. Grocery stores there say they pay $155,000 per year on average in interchange fees to credit card companies, while a similar grocery store in Europe only pays $30,000, five times less. This $120,000 per grocery store could help lower the price of groceries, but the credit card duopoly keeps it for itself. Why? It is because these two companies are taking advantage of their dominant position and the government is refusing to act on the root cause, which is obviously unacceptable, hence the committee's report and our interventions.
When my colleague from Lac-Saint-Jean presented his bill, we immediately received calls from the credit card companies saying that we did not know what we were talking about and that we were threatening the economy, the environment and, at the very least, the solar system, if not our galaxy, the Milky Way. Obviously, it is in these companies' interest to hire lobbyists to tell us not to do that. The thought that we could cut their profit margins, their revenues, by a third makes them nervous.
We know that they put a lot of pressure on the government, and we know that the government has given in to their demands. Rather than defending consumers and merchants, it decided to listen to the duopoly, which is highly organized and which told the government that it must not do that. I do not know whether the government believed that it would threaten the galactic balance of the Milky Way, but, in any case, it gave in. It asked the companies to submit a proposal, since it only wanted to save face. This way, everyone saves face, merchants pay, consumers pay, and groceries are more expensive. The government has leverage it could use to intervene, but it will not do it, and that is obviously unacceptable.
I have a few more points to raise. The number of credit card transactions is growing. As we know, the pandemic and the lockdown changed the way we consume. People are buying more online. Even groceries can be bought online now, and more and more people are doing it. The habit stuck, and now more and more purchases are being made online. According to the most recent figures, in 2022, there was a 17.5% increase in Canada, and an even larger increase in Quebec, 18.4%. Clearly, this is a problem that is getting worse. We are therefore joining the Standing Committee on Industry and Technology in asking the government to intervene. We are asking the government to intervene for the sake of grocery stores and retailers like convenience stores and gas stations, but it is not doing anything. My colleages can rest assured that the Bloc will continue to press this issue.
I would like to point out an interesting detail to my colleagues. Quebec has its Consumer Protection Act, but the rest of Canada does not have such a law. In the rest of Canada, when someone goes to the grocery store and pays with their credit card, the merchant can charge the customer, the consumer, the interchange fees. There is a line on the receipt indicating that the credit card fee is $2, for example. That is the way it is. In Quebec, the law prohibits businesses from passing those fees on to the consumer. The cost of these interchange fees is passed on to all consumers, even if the customer pays with cash, a debit card or a cheque. I do not know anyone still uses cheques. It was very common in Europe. People used to go to the grocery store and pay by cheque. In Quebec, the cost of interchange fees is spread out and passed on to all consumers. The government could intervene and do what Australia did. It could also set rates similar to those in the European Union. Even the U.S. Federal Reserve is looking into this right now. At the very least, this would reduce the cost of groceries and convenience store purchases by about one percentage point. In the current situation, that is not insignificant.
I would also like to remind members of the technical details.
Visa and Mastercard are two U.S.-based multinational financial services companies. Originally, they were part of a co-operative of financial institutions. Visa and Mastercard became full-fledged companies in 2008 and 2006 respectively. These companies do not offer credit. They are tech companies that use transaction networks to act as intermediaries between financial institutions, merchants and customers. I could go into a lot more detail on this. I would remind members that these companies make a lot of profit because they are a duopoly, so they are able to make a lot of money on the market. What we are asking and what the committee is asking is for this to be regulated. We do not want rhetoric and mini-measures that will allow the government to save face. We want to see real changes to the situation, particularly when it comes to grocery prices.
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Madam Speaker, I thank my previous colleague for his intervention and for answering questions.
As a New Democrat, my motion got the credit card study going that is in the committee today. Now we have this debate taking place, which I am grateful for because we need more attention put on these fees and outrageous costs to consumers. Yes, the government system can have taxation policies that relate to how people afford certain things and how businesses interact and so forth, but on top of that, regulations are necessary.
Through the Conservatives, the Bloc and even some Liberal members, some really good testimony has come out of the questions that have taken place. I am a bit perplexed, though, because today at committee, the Liberals attacked me when I was questioning issues related to information being shared. They are now opposing this issue, apparently, and attacking us when we talk about fees that are costing Canadians at this very moment way more than the averages across the rest of the globe's industrialized countries.
This should be dealt with right away through regulation. We do not need legislation. It can be done through the . Evidence coming out quite clearly shows that our interchange fees, which have been adjusted a bit by the government, are not in line with those of other countries, such as Australia and countries in the European Union, and other places. In fact, this has exposed the Liberals' poor conduct on this issue, which has become clear as day. They are basically treating Canadians as second-class citizens when it comes to these fees and when it comes to businesses that have to pay them.
I started one of my questions today talking about Interac and the formation of it. Most Canadians probably do not even know that Interac is owned by the banks. It really came about in the 1980s, 1986 being, I believe, the specific date. They got together to look at how they could cash in on financial transfers that would take place electronically.
Thinking about innovation, I come from the auto sector, and in the 1980s, we saw a certain type of automobile. If we had to pay the same amount for that automobile as we pay right now and its innovation was the same, we would laugh, unless we wanted to collect a classic car and go back to a K-car or something like that from the 1980s. Meanwhile, when we look at how much money has gone—
An hon. member: Oh, oh!
Mr. Brian Masse: Madam Speaker, I am sorry, but the parliamentary secretary is heckling me.
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Madam Speaker, I would be happy to answer questions later.
When we look at how much money there was in the system put in place then versus the so-called innovation now, what have we really gotten out of that? We can look at the fees. I am going to read a few of them out, and members will see why regulation is necessary. Sometimes the lack of competition does not even have to be done by collusion. It can be done basically by consent and by not competing.
Here are the general sending fees for up to $100: RBC, one dollar to $1.50 a charge; TD Bank, one dollar to $1.50 a charge; BMO, one dollar to $1.50 a charge; CIBC, one dollar to $1.50 a charge; Scotiabank, one dollar to $1.50 a charge; and the National Bank of Canada, one dollar to $1.50 a charge. Basically, everybody in the sandbox is using the same fee and implementation, and nobody is breaking out of that despite the fact that the technology and the way it works are 40 years old.
On top of that, there is what we did during the pandemic. That is part of what has been taking place at the industry committee with regard to the issues at stake. It is why I believe strongly in regulation, especially of interest rates. Because of the pandemic, of automation and of the use of systems in place for points cards, we are transitioning people into new purchasing habits at different interest rates that are harmful to them. If someone has a mortgage, they have a lower interest rate right now. It is one of the better borrowing practices, generally speaking. Hopefully rates will continue to go down, but the interest rate there is just above or below the Bank of Canada rate depending on the financial institution. If someone wants to get a line of credit, it bubbles a bit higher than that, but it is still in that range. As for students loans, as New Democrats, we believe there should not be interest on student loans, but sadly there is. I paid my student loan at 17% at one point. That policy was horrible back in the 1990s. At any rate, students still have a better rate.
What we have been doing is transitioning people into purchasing the food and basics they need on credit cards that have 20% to 30% interest rates. Some are lower, but someone has to have a decent line of credit beforehand, has to pay for the card with a fee or has to be very affluent. Most people are stuck at around a 20% rate for credit cards. What is happening, as we have heard in testimony, is that charges on basics related to living have grown exponentially since the pandemic. That means people are putting groceries on credit, for example, just to get by, with a potential charge of 20%.
We have also heard there is more of a culture of buy now, pay later, with systems in place. They are notoriously part of the furniture industry, which has that type of philosophy. They upsell, making sure people purchase certain amounts and sometimes more. Then if they do not pay by the end of the year or whenever the contract is up, rates could be up to 30%, even higher sometimes. In the meantime, people may lose their job, a loved one may get sick or they may get sick, and they cannot afford the payments anymore.
This motion brings to light the issue of financial management systems, their wealth, their activity in the Canadian economy and what they are really worth. One of the more interesting aspects that we learned is that banks are not even reporting their profit margins on credit cards, borrowing and lending, how much they are making. That is a policy that has been put in place. From a regulatory standpoint, the could change it today and require reporting.
Coincidentally, as I mentioned, all the different banks have the same policy that they do not report, because if they do not have to do it, they will not do it. At the same time, we do not know how much we are subsidizing their profit margins, even though we know for a fact that despite the costs of running the credit card system, their profits have skyrocketed, especially because we used public policies in this chamber to backstop the banks during the pandemic and before that when the financial system collapsed. We did all those things.
Maybe the Liberals are a bit shy on this because when I was here back in the day, John Manley tried to make our banks like the American banks. I will give the Bloc Québécois credit because the New Democrats and the Bloc were the only ones who fought off the nonsense of wanting to Americanize our banks.
We saw what took place with regard to the institutions in the U.S. I have all the presentation decks from every single year, which said that Canada's banks have to become like the American banks, that they cannot survive here anymore and that they ought to make sure they are different. They said many different things. I still have all the presentations they made to me during all those years. It was John Manley who tried to move the system to Canada, but we defeated them and stopped them.
I want to pay special tribute to Judy Wasylycia-Leis, the former New Democrat from Winnipeg, who fought tooth and nail on the issue constantly to stop Americanization from happening. Thank goodness we had that. It was funny because the banks came back later and said they survived the financial issues of the United States because they were different. They basically took credit for the fact that they lost their fight to become Americanized.
At any rate, let us go back to the particular issue at hand, especially coming from an economy like Windsor's, when we see value out of production. Workers have often said that our production value needs to keep going up and up in order for us to compete. We have to look at our financial measurement matters. Are they really contributing to the Canadian economy or are they a drag on the Canadian economy?
Owners of some of the small businesses like convenience stores, retailers and all those different elements will tell us that the fees they have been paying are significant. On top of that, the reduction of fees, which is still modest compared to what is in Australia and the European Union and elsewhere, may not have been passed on; we have heard that from Stripe.
We have heard specific testimony, and it was really kind of shocking that Stripe basically did not care what Canada did; it was not going to pass on the savings it had. Where are the savings going to go? They are going to go internationally to the people who actually have investment in the systems.
The Liberals do not get credit for what they believe they should get by lowering the fees, because it has been exposed that what they have requested is very modest compared to what is taking place in other parts of the world.
Here we are, deciding what to do next with regard to the issue. I have done a lot of work on frauds, rip-offs and all the different stuff that can take place, especially on our phones. In industry committee, one of the things I was proud of was getting a study on fraud. We have seen, on our phone, how many times we get a text message or something to bait us into losing some of our money.
As I point out all the time, we pay for our phone or device. We also pay for the services and for all the maintenance on it. On top of getting charged for all of that, we get abused as a customer through fraud. It is the same thing with the fees that are being charged. We pay for our phone, for the data and for the system. We do all those things and we do the work, and the banks still get the same amount in fees, or more. We do not see somebody at the counter anymore; there is no job created for that.
We will do more transactions, so we should actually have a reduction in fees. Ironically, when we look at the charts provided by the banks, the only argument economically has always been that when we buy more, we should pay less; however, when it comes to Interac fees and banking fees, the more we transfer means the more we pay.
I do not know what the difference is in terms of the financial cost to an institution specifically related to electronically moving money. What is the difference whether it is one dollar, five dollars, $10, $1,000 or $3,000? I do not know, but apparently it requires more labour, or different labour, for those different amounts, because the fees are reflected basically in that.
I do not understand that, and the institutions have never been able to explain it. It just another way of gouging, in my opinion. Again, when it is expanded exponentially, it is really a cost on the whole economic system. Some of the best fraud cases have been perpetrated by some of the people who work at financial institutions or other places; they nip a couple of cents off purchases or transactions, so nobody really notices.
People should always check their grocery store receipts, and some places are trying to move to a system where customers do not even get a receipt anymore. Some groceries are taxed and some are not; it is dependent upon the type of product and the quantity of the product. For example, with granola bars, if there are five in a box they are taxed, but if there are six in a box they are not taxed. Retailers market and change their practices so they can get further profits out of the system. People should always get their receipts.
The point I was trying to make is that some of the biggest fraud cases involve skimming just a bit so it is not noticed, but the volume is so high that at the end of the day, the wealth is supersignificant. That has happened many times, and it is the same thing with some of the fees with credit cards, Interac and all the different elements.
I will use bank machines as an example. It costs three dollars to use a different bank than one's own, and people put up with that fee in the moment. However, when we start adding up the fees, and let us say we are doing this once a month or however often it might be, it becomes very significant in the Canadian economy. If it is being done collectively across the board, it becomes a drain on the system.
I come from a manufacturing town, and we were told so many times that the future of this country was through getting rid of manufacturing, that globalization was the end of it and that third world countries and others would do the manufacturing. We saw how it worked out in the pandemic, and it was not true. In fact, reshoring is taking place across North America. We have to compete with the U.S. on that, and we are now doing massive subsidization to corporations to bring them back.
New Democrats fought it at that time and said it was wrong, because the promise was that financial institutions and the service industry were going to rescue all employment. It did not happen. There was some growth in the sector that took place, but it was not reflected in the Canadian economy in employment and good jobs. Also, now there is a decline of some of the institutions, through automation and other things that went through, and we are now without the jobs and the services but are still paying some of the highest fees out there. Why is it? How good is that for the economy?
I would rather have small and medium-sized businesses getting a break on fees through regulation, which is something we can control right now, than have some trickle-down economic theory that is supposed to give them maybe a tax reduction that they may not see and that depends upon how much they have coming in through their business model, in terms of profit margins and so forth.
What we can do by regulating the fees lower right now and ensuring that they are passed on is to ensure that they go to consumers right away; that they are taken out of the multinational institutions, many of which pay more taxes across the planet than here in Canada; and that the small and medium-sized businesses get the money they need and deserve. More importantly, we need to ensure that the fees become more reflective of the service and the value of what they should be paying for.
I go back to that because transaction fees are out of whack with the cost of doing transactions. Nobody should be gouged through fraud by a government being neglectful on regulatory powers, just like there should not be fraud through the abuse of someone trying to do a criminal activity against them. We can control that in the House, so I appreciate the committee and the work we have been doing trying to get fees down, even with the cost of groceries, expenses and all the different things affecting Canadians right now.
We do not have to wait for a budget to adjust some of these things, and we do not have to wait for an announcement or a private member's bill; they can be done immediately by the minister, with the regulatory powers the minister has. The break can be passed on right away, which can also filter into the Canadian economy to create more wealth, more activity, more investment and more jobs, and better reflect the value of financial institutions and the contribution they make for productivity in the Canadian ecosystem.
Right now, financial institutions have been protected a number of different times. As I mentioned, before the pandemic, before the financial crisis, significant government revenues went to stabilize the banks and the financial sector, including the provision of loan guarantees and other activities.
During COVID we allowed the financial institutions to continue their practices as we shifted the economy, with lockdowns and other types of restrictions that required the increased use of their systems This was not through competition or by use of the money we had there, but by moving people, with intervention from the government, into a system that allows more abuse and dominance with respect to interest rates, costs and services, not from innovation in the market but by public policy.
That is why it is warranted, as New Democrats argue, that public policy should be used to rein in some fairness for consumers right now. We did our part. Canadians did their part. They put their taxpayer money behind the banks, the loans and the things they had before to stabilize different things. They got moved into having to borrow and pay for certain things with higher interest rates and charges because of the pandemic.
Canadians never got anything back from doing that. In fact costs have gone up, as has inflation. On top of that, new taxation models have been introduced to consumers with respect to tipping, which is coming on taxes and not just on the goods and services.
For those reasons, we support continuing the work of the committee. Again, we implore that we do not need legislation or a private member's bill; we need the Liberals to act where they should have acted before and rein in some fairness for Canadian consumers.
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Mr. Speaker, this is a really important conversation and debate. Our government is committed to addressing the cost of living, helping out small and medium-sized businesses and also protecting consumers. This is something about which the Liberals, residents of my riding, Pierrefonds—Dollard, and, I am sure, all parliamentarians care deeply.
I would like tell the story of a small business owner I visited just two weeks ago in my riding of Pierrefonds—Dollard. Her name is Paola and she works really hard each and every week, six days a week. She owns a small business called Tazza di Mattina, which has coffee, coffee machines and repairs coffee machines.
I had an important conversation with her about a government program that is related to leaning on the credit card industry to ensure the costs that owners of small and medium business have to bear in consumer transactions are reduced. I let her know that Visa and Mastercard fees for small businesses would be reduced as of October 19. We know that a reduction of credit card fees will mean better prices for consumers and that fee increases are not passed on to them. The government's policy to protect and defend small businesses is really impactful.
I grew up in a household that lived, survived and had everything we needed because of a small-business owner, my dad. My dad and mom brought a family of six into this world. Our family lived off a small business, so I personally know the realities of what it means for a family to have everything its needs when things might be tight. That is the reality of many Canadians. I appreciate and empathize with Canadians. In general, they feel squeezed. That is why our government is meeting the moment at each and every step. With respect to the credit cards and small and medium-sized businesses, that is one key thing we are doing.
A second key thing is a code of conduct related to the credit card industry to protect one million businesses. That will also help to meet the moment. We are also leaning on the banking industry so that we ensure individuals have tailored mortgage relief available to them.
I am sharing my time, Madam Speaker, with the member for .
Another key aspect of meeting the moment is expanding low-cost accounts and also no-cost options when Canadians are opening bank accounts. The government is also lowering NSF fees, which is critical. Once in a while, some of us have had a bounced cheque. It used to happen to me as a student. Those fees of $25, or however much they cost today, hit hard, especially if someone has a lean income. Those things matter.
Today, being in the Commons with the governing party, I oftentimes think about my life as a student, a young person, and in my career. I think about what those fees meant and how the measures we are implementing today matter for Canadians and small businesses. We are doing a lot within our government to meet the moment and address the cost of living. Yes, costs did rise during the pandemic. We all went to the grocery stores. We saw the increase in price of fruits and vegetables, and that hit us, without question.
Thankfully, since then, inflation has come under control and the Bank of Canada has reduced interest rates. Things are easier for people who are renewing mortgages and for those who are entering the housing market.
Our government has also had some key accomplishments, such as child care, which is a key win of our government. It allows mothers who choose to work to enter the workforce and to know that their children will receive quality care. I will just share about my own family background again. I was raised by my mother at home, as were my five younger siblings. There was a choice to do that as a household. I know that not all Canadian households can make that choice. Some families need child care in order to survive. That is why our initiative, to make child care affordable and to expand that across the country, is so important.
Dental care is a recent initiative of our government. That is also really important. In our entourage, our families and our friendship circles, we all know seniors, persons with disabilities or young people who have benefited. Soon, all Canadians will be benefiting from this.
If we just think about these programs for a moment, they are meeting the moment. They are helping to address the cost of living and the needs of Canadians.
To that, I will add pharmacare. I had a conversation with a gentleman about three months ago, while driving between Montreal and Ottawa. He told me how important diabetes medication at no cost is to him, how much he relies on that medication, how it had put a big hole his wallet, and how he is really grateful for us, as a government and as a country, for doing that.
As the Parliamentary Secretary to the Minister of Diversity, Inclusion and Persons with Disabilities, I see the disability benefit as novel and super impactful. It will help alleviate the situation in which persons with disabilities of working age with modest income find themselves today. It will not solve everything, but it is a clear and firm step in the right direction. This benefit is being introduced and will be in effect this summer. It is being done in addition to existing provincial benefits that people receive. It is a proud moment for our country. As a member of the governing party, I am really happy that we are doing this.
I go back to the idea of meeting Paola in her small business, and the initiatives that our government has done and continues to do.
At some point in the future, Canadians will be making a choice about who they want to see governing our country. It is really important for Canadians to reflect upon the policies and programs that we as a Liberal government have implemented from child care, dental care, pharmacare and the disability benefit, which will be implemented this summer, with money in people's pockets, to the measures I mentioned with respect to small businesses, where 27% of credit card fees will be reduced for small and medium-sized businesses. Those things are critical.
What I would say is that those programs and initiatives, and that sort of perspective of meeting the moment, will be taken away if it is not our Liberal government here in this House.
That is something I would like to leave with viewers who are watching. I would like Canadians to just hold that idea, and ask whether we want these programs to continue into the future. I am sure we do. Do we want everyone to be uplifted? I am sure that we all agree to that. Let us continue.
:
Madam Speaker, it has been an interesting process over the last number of weeks. For those who are trying to follow what is taking place, allow me to attempt to summarize it. What they are really witnessing is what I would suggest is a multi-million dollar political game that is being led by the because he has determined that it is in his self-interest and the interests of the Conservative Party of Canada to continue playing this silly, expensive game at a substantial cost. As opposed to participating in this filibuster, what we are actually witnessing is an opposition party that, I would ultimately argue, is in contempt, or nearing contempt, of the House of Commons today.
It should not surprise people because the was the parliamentary secretary to former prime minister Stephen Harper, who was held in contempt of Parliament, the first prime minister in the history of the Commonwealth and the only one to this very day to have been held in contempt. It speaks volumes, in terms of the character and the personality of the leader of the Conservative Party today.
Let us look at what the Conservatives are doing, and I do not say it lightly. In fact, I have recommended that every member of the Conservative caucus read the Hill Times story that was published on October 31. It was written by Steven Chaplin. Steven Chaplin is the former senior legal counsel in the Office of the Law Clerk and Parliamentary Counsel. Let me just quote two very important things that should be highlighted because that is why we have the debate that we are having today, and I am going to get into that very shortly. Here is what Steven Chaplin has to say about the multi-million dollar game that the is playing:
It’s time for the House [of Commons] to admit it was wrong, and to move on....
There has now been three weeks of debate on a questionable matter of privilege based on the misuse of the House’ power to order producing documents....
The article goes on, and here is where people really need to understand this point because we get Conservative after Conservative talking, whether about this motion or the matter of privilege that the Conservatives introduced over four weeks ago. The Conservative Party says, “just produce the papers and then the issue will end.” We cannot produce the papers. The Conservatives know that. Here is what Steven Chaplin has to say on the issue, in terms of the game that the Conservatives are playing:
It is time for the House to admit its overreach before the matter inevitably finds it[s] way to the courts which do have the ability to determine and limit the House’s powers, often beyond what the House may like.
This is not me. This is a professional; someone who understands what is taking place in the House of Commons. It is the today who is using his opposition powers to prevent important things from taking place in the House because it is his self-interest and the interests of the Conservative Party and not the interests of Canadians that are being served by this tactic; not to mention the millions of dollars being thrown away.
The , earlier today, talked about legislation. Take a look at what is on the Order Paper and has been on the Order Paper for days now: the Canadian Citizenship Act. Citizenship is important to Canadians. By not passing this legislation, some individuals are being denied their citizenship.
There is Bill , the military court reforms, which would take sexual abuse issues out of military courts and put them into the civil courts. Also, we have Bill , on the rail and marine safety issue, which is talking about economic supply lines. If we want to talk about improving the economy, this is one of the things that we should be discussing. My colleague emphasized Bill , the online harms act. We can think of pictures being posted on the Internet without consent from individuals over 18, as well as the harm that is being caused to children. These are the types of substantial issues that we should be talking about and voting on to see them go to committee, but instead, we are playing this game.
Fast-forward to today, when we have a motion about banking and banking fees. I can assure members that banking fees are a very serious issue. My constituents are concerned about banking fees, whether they are for using an ATM machine or the monthly charges. There is also the interest that is applied in many different ways. There is a litany of issues with banking fees. I would love the opportunity to talk for 20-plus minutes on that issue.
The problem is that this feeds into what the Conservatives are wanting us to do. The Conservatives, and this is coming from the 's office, are not only saying that they want to take control of what is taking place on the floor of the House of Commons, but also wanting to start dipping more and more into instructing standing committees on what they should be doing. They have the Bloc completely fooled on this. It will be interesting to see who votes in favour of it.
Members can think about this: The Conservatives, not once but twice, as Mark Carney was brought up late last week, have brought in an amendment to a concurrence motion to send the report back to committee for it to be further studied while calling for certain witnesses, and they have each had a deadline to get back to the House. However, these standing committees can determine their own agendas and who they want to call before them. They do not have to be instructed by the on what they should be doing. This is a very disturbing pattern, which we have now seen with two concurrence motions that were brought forward by the Conservative Party.
I would argue that, ultimately, the is not only trying to dictate what we can and cannot talk about on the floor of the House of Commons, but also starting to reach into the different standing committees. He could have just advised, and said, “Well, look, send this back to the committee”. We could also do what we usually do, which is to vote concurrence on a report, so it would go on its way, and just allow the standing committee to do what it wants. However, there is an agenda there. It is a very selfish agenda that is being driven by the and the Conservative House leadership team, at a substantial cost. As I said, it is a multi-million dollar game that is being played.
The Conservative leader needs to start putting the interests of Canadians ahead of his own self-serving interests and the interests of the Conservative Party. There is a lot more work that we can be doing on the floor of the House of Commons.
We need to respect that standing committees do have the ability to do what is being proposed here. We need the to stop abusing his authority as the leader of the opposition and reflect on when he was a parliamentary secretary and his prime minister was held in contempt of Parliament.
:
Madam Speaker, what we have here, besides interruptions, is the issue that the Liberals do not want to talk about. That is why they are not doing anything about the oligopolistic economy, which includes the fees that Canadians pay for their banking services and, in particular, the fees around a company called Interac. It is on the back of our cards. Interac is an association, but it is basically owned by the four big banks: RBC, CIBC, Scotiabank and TD. Then there is a fifth one, Desjardins. They own it, and they charge a fee any time we move money around. They do about 19 million transactions a day in Canada, but one issue is moving our own money to somebody else through an e-transfer. I am sure members will be shocked to learn that the two companies that chair the board of Interac, which are RBC and TD, get a preferential rate over all other financial services companies. They only charge themselves six cents; they charge smaller and smaller financial institutions, particularly those that are not part of the Interac board, almost 44¢ to 46¢ per transaction. That is huge.
I understand that there is a $1.50 charge on each end on that. Technically, that is a three-dollar charge. If someone does not keep a minimum balance in their account, they get a three-dollar charge from the banks. RBC, TD and the big guys are only paying six cents for that transaction, so they are making a 98% gross margin. If there is a small credit union that is not part of the government-protected oligopoly of Interac, which basically has a complete monopoly on the movement of money in Canada, then it is out of luck. It must pay 44¢ to 46¢ to the big banks that own Interac for this service.
That is why we are here. It is because we had witnesses in committee who refused to table any of their fee structures, even though they are a protected government business. We also had witnesses who came before the committee in the credit card study on the issue of what is called the “interchange fee”. The government made a big announcement that it is reducing the fees that small businesses have to pay to credit card companies for every transaction. It is usually a per cent, somewhere between 1% and 2.9% of the transaction, if someone pays with their credit card, that a small business has to pay to the big banks and the Visa card companies.
There are companies that are the plumber of the system that do that, and one of them is called Stripe. Another one is called Moneris; some may have heard of it. Moneris agreed to the voluntary fee cut that the government asked for, but Stripe decided that it was not going to. Its representatives said that it is because they are being charged a new GST fee and cannot afford it. It is actually a GST fee that they were paying all along, but it was delayed for 12 months because of a court action. However, Stripe representatives used that as an excuse, either because they are greedy or because they are just not as efficient as the other providers of that service. We will be the judge of which one it is.
An interesting thing is that a person on the board of Stripe, which is one of the biggest companies in the world at doing this, is Mark Carney, the special adviser to the on the economy. He is the boss above the , and he is the next Liberal leader. This is the same fellow who is on the board of a company called Brookfield; the entire company has just decided to move from Toronto to New York to avoid paying Canadian taxes.
Mr. Carney preaches that Canadians should pay more for everything with a carbon tax; carbon tax Carney loves the carbon tax and thinks it should be 61¢ a litre. At the same time, he moves all his business interests to the U.S. and avoids the things that the Department of Finance is trying to do. This is the character of an individual who supposedly aspires to be Prime Minister of Canada. However, he thinks it is better for the companies that he sits on the boards of to dodge Canadian taxes and move to the U.S., where they can pay lower taxes.
I do not know why carbon tax Carney wants to help the newly elected President Trump by moving his head office to New York. Apparently, he admires him more than he admires the current , or he would not be doing this.
As such, why is it that the Liberals continue to filibuster in committee to stop these examinations from happening? The has done nothing but filibuster every time we bring up a motion to bring carbon tax Carney, disclose the financials of Mastercard or disclose the financials of Stripe, which carbon tax Carney is on the board of. The parliamentary secretary does not have the guts to vote against it. He just keeps talking and talking, stopping us from getting to a vote. That is the reason we are in this situation in the House, and we have to use the power of the majority to try to get that study done. It is because the parliamentary secretary is too afraid of having this debate in committee.
It makes me wonder what that individual is trying to cover up for the government by preventing these studies from happening. We had one of the banking executives from RBC, who is co-chair of Interac and sits on their board, before committee. One of our members asked him a number of times if he knew the fees of the company he is on the board of, where he represents his bank. His bank owns this company, which is called Interac. He said he does not know the fees.
I have served on private boards and Crown boards. I always knew what the fees were of the businesses I was on the board of. It defied believability that this senior banking executive in Canada would not even know the fees he charges or gets charged on Interac. This is the kind of obfuscation we see happening on this credit card study, and that has prompted this motion. In fact, all the banking heads were before the committee, and we told them we did not want them to betray their confidential commercial stuff, but they all judge themselves publicly on something called “return on equity”. That is how much profit a year the company makes per share that shareholders own. The companies overall, the banks overall, have anywhere from a 10% to 15% return on equity. This means that, for a $10 share, they make $1 to $1.50 in profit a year.
We asked them to share what their credit card business is as a percentage, not the overall revenue numbers or their expenses, as they do on their overall business. What do they make in their credit card business? They said it is all confidential. Of course it is confidential. Some may know that I used to work for a bank at one time, a long time ago. I had hair then. When I worked for the bank on Bay Street, it had a return on equity of 52%.
Some might call that loansharking, but that is the level of return they get. That is why they do not want to do it. That is why the government does not want to do it. We had finance officials in industry committee this morning. We asked them if they knew those numbers on their credit card business. They said they never asked. We had the senior finance officials in committee this morning and asked if they ever looked at the anti-competitive pricing of Interac and what they do between the owners of RBC, TD, Scotiabank and CIBC, and what they give themselves as a cut rate versus all the other financial institutions. They said they have never looked at it.
I asked if the cares about competitive behaviour in the industry she regulates. They said they do not look at it. That it is somebody else's job; it is the Competition Bureau's job. It is not their job to look at policy and decide whether the industry they regulate is competitive. I asked the same question about these great interchange fees and carbon tax Carney's company, Stripe, which is refusing to abide by the Minister of Finance's order.
I asked if they look at anti-competitive behaviour on the interchange fees. They said it is not their job. They are just the government; there is nothing to see here. They are just the Department of Finance and the ; they are not concerned with competition.
That is the reason we have an oligopolistic economy. We have a Minister of Finance, a Liberal government and a Department of Finance that do not care about the fact that we have an oligopolistic cellphone industry. We have a government that does not care about the fact that we have monopolies in banking, telecommunications and airlines.
The extent to which the government members protect their corporate buddies is incredible.