You want—
Evidence of meeting #22 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was debit.
A recording is available from Parliament.
Evidence of meeting #22 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was debit.
A recording is available from Parliament.
4:40 p.m.
Director, Regulatory Affairs, Canadian Wireless Telecommunications Association
You want—
4:40 p.m.
Conservative
4:40 p.m.
Director, Regulatory Affairs, Canadian Wireless Telecommunications Association
Sure. You want the whole thing to build, so more players can get involved and have more opportunity to be first movers here in Canada. I know EnStream was here, and companies like that have an opportunity now to go and provide these managed services and these back-end services in other countries, because they can show they're working here in Canada and working on a mass—
4:40 p.m.
Conservative
Mark Adler Conservative York Centre, ON
So in your information, you would have a regulation at the moment to fit the sort of environment that we have?
4:40 p.m.
Director, Regulatory Affairs, Canadian Wireless Telecommunications Association
Yes.
4:40 p.m.
Conservative
4:40 p.m.
President and Chief Executive Officer, Canadian Payments Association
We have about 140 members.
4:40 p.m.
Conservative
Mark Adler Conservative York Centre, ON
The estimated amount of value that you contribute to the economy is roughly what?
4:40 p.m.
President and Chief Executive Officer, Canadian Payments Association
On an annual basis, there's probably about $45 trillion of value that passes through our systems each year.
4:40 p.m.
Conservative
Mark Adler Conservative York Centre, ON
There's a significant amount of taxation that accrues from that to the Government of Canada, I would say.
4:40 p.m.
President and Chief Executive Officer, Canadian Payments Association
No. It is a cost to the members, and it is a way to ensure that under any condition, including a financial crisis, we can clear and settle safely and risk free.
4:40 p.m.
Conservative
The Chair Conservative James Rajotte
Thank you.
Thank you, Mr. Adler.
We'll go back to Mr. Rankin, please.
4:40 p.m.
NDP
Murray Rankin NDP Victoria, BC
Thanks, Chair.
My first question is for Mr. Maduri. This may have come up, but I wanted to just confirm and give you a chance to plug my favourite technology, BlackBerry. Security and strength, you said, were some of the watchwords of BlackBerry, and you think this technology lets you leverage that very efficiently, if I understood your remarks. Is this technology something that BlackBerry has factored into its business plan as a key contributor going forward?
4:40 p.m.
Senior Director, Product Management, Mobile Payments, BlackBerry
Yes, it definitely is. To put it plainly, we're taking our expertise and ability to manage devices to actually managing, as Kurt mentioned earlier, something called a secure element on devices. That's where you store credit cards. If you've heard of mobile device management, secure element management is an extension of that.
For us, I concur with you in that I think there's a great opportunity. If we can get this working here as a commercial success, I know that other countries will look toward us. We've already had requests to manage back ends in other countries, so we're leveraging our smarts here, and we're hoping that once it's a commercial success, we can showcase it and take it elsewhere.
4:40 p.m.
NDP
Murray Rankin NDP Victoria, BC
I hope so. I hope it works. It's a great idea.
Next I'll go to you, Mr. Gaetz and the Canadian Payments Association. In your opening remarks, you used the expression “risk exposures”. In your written presentation, you made the following statement when you talked about some of the challenges, “Stability and confidence in the overall payments system are paramount. Risk in payment systems must be properly identified and managed to protect the economy and its users.”
Could you elaborate a little on what kinds of risks you're talking about? Are you speaking solely about cyber-risks? If not, what else are you thinking of?
4:40 p.m.
President and Chief Executive Officer, Canadian Payments Association
No, I'm also speaking of settlement and liquidity risks. Given our vantage point from where we sit in the payment ecosystem, I like to say that we sit at the apex. Some people say we're the plumbing, but I would say that it's pretty sophisticated plumbing. Let me stay with the apex analogy.
In order to ensure that there is no risk in any circumstance, including a failure of a financial institution, no risk of knock-on effect through the daily and weekly settlement of these large values that are flowing every single day, we have systems that have built-in risk mitigations, and multiple layers of those risk mitigations, which include pledging of collateral and valuing collateral. On any day, we have to make sure that we're fully risk-proofed from a liquidity and settlement standpoint. That's also what I'm referring to.
4:45 p.m.
President and Chief Executive Officer, Canadian Payments Association
Absolutely.
4:45 p.m.
NDP
Murray Rankin NDP Victoria, BC
Yes.
I guess just for the record, Mr. Chairman, I want a clarification.
In your written remarks, you talk about the exponential growth in the digital payments technology, but then you say, “with 90 percent of consumer spending in Canada done using non-cash payment methods”. Is that 90% of the volume or is it 90% of the transactions that are taking place in the economy?
4:45 p.m.
President and Chief Executive Officer, Canadian Payments Association
Right. These are referring to two different things. When I'm talking about the 90%, I'm talking about the fact that cards are not a new technology, but 90% of the consumer payment value in Canada is—
4:45 p.m.
President and Chief Executive Officer, Canadian Payments Association
Value in Canada—
4:45 p.m.
NDP
Murray Rankin NDP Victoria, BC
Volume of transactions.... I'm thinking of people who go to the store and use their cash to buy something that's under one dollar, two dollars, or three dollars. It's hard for me to believe that if you take the number of transactions in the economy, 90% of them would be cashless.
4:45 p.m.
President and Chief Executive Officer, Canadian Payments Association
Well, if you just stay with cash for a minute, if you look at the volume of cash transactions...and of course you have to estimate it. The way you estimate it is that you go to the great statistics from Interac and you make some assumptions that most of the cash that is taken out of an ATM is spent in a transaction. On a volume basis, cash probably makes up 40% of the transactions, but on a value basis, it's tiny. It's probably 10%.