Industry Committee on June 2nd, 2009

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

When that customer comes into The Country Grocer, is it your experience that the person buys more butter, bread, or Dijon mustard than a regular customer who comes in?

[François Bouchard]

No.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Is it likely that customers would choose to use a high-reward card versus paying cash? I use my Air Miles card whenever I can, versus paying cash, because it doesn't cost me more and I pay off my balance. Is it fair to say they would do that?

[François Bouchard]

Exactly. Most customers do that.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Is there any benefit at all to The Country Grocer when a consumer chooses to use the premium card?

[François Bouchard]

There is absolutely none.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Do you have any choice whatsoever in terms of taking that card versus taking some other form of payment?

[François Bouchard]

We have to accept them. Our competitors do. We have to do the same. In many cases, people had a regular credit card and were switched over to the Infinite card, which raised my fees. It's the same consumer, the same pattern, and the same $100 order every week. My fees have gone up because the customer's card was changed.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Does Visa consult you when they send out more Infinite cards? When they run an ad campaign that has someone using a Visa card at a grocery store and getting 2% extra because of it, do they consult you before they do that?

[François Bouchard]

I find out when I watch TV, the same as we all do.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

How do you feel when you see that card? What crosses your mind? Do you ask the same question I do: who pays that 2%?

[François Bouchard]

I know the answer. I do.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

As we go down the road in terms of action on this issue, because it does seem to be an issue, would it be an advantage to you if Visa, for example, had to clearly brand their card differently so that there wasn't a conflicting Visa brand situation? Whether they decide themselves to do this or it's through regulation, or whatever the case is, you could choose to take one form of Visa card, the lower-interest one, and not necessarily have to take the one that charges 2% more.

[The Co-Chair, Conservative, James Rajotte]

Very briefly, Mr. Bouchard.

[François Bouchard]

I wish that was the reality, but I honestly can't see the day where I'll tell my cashiers, “You can accept this one but not that one”. In their minds, it's a Visa, it's a MasterCard, and it's an acceptable form of payment, unfortunately.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

It's not really a choice.

[The Co-Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Thibeault, please.

[Glenn Thibeault, NDP, Sudbury, ON]

Thank you, Mr. Chair.

Last week we had most of the major banks here talking about what they think of this issue. One of the things I heard loud and clear from them is that they're receiving no complaints.

Although the RCC, the Retail Council of Canada, has 250,000 members who are bringing forward the “Stop Sticking It To Us” campaign, the CFIB has 2.4 million businesses that they support, and f those, 97% percent are under 50 employees, and they're hearing no complaints on the side of business. Again, they say they're hearing no complaints from the side of consumers.

Let's start with you, Mr. Scott or Mr. Bouchard. Is that an accurate statement? Are you not hearing complaints about credit card interest rates on both sides of merchant interchanges?

[John Scott]

That can't be accurate in the experience of our businesses, but don't forget that our businesses will take that to their local bank where they're dealing. The complaint will go through there as opposed to possibly through Visa. That's probably what happens.

But I cannot conceive.... In fact, I guarantee you that you have no idea how much cost this has layered on small business. You have no idea. I mean, we're sitting here comfortably talking about this in very esoteric terms, but for a lot of people, this is the essence. The profitability of their business is at risk here. With businesses surcharging and that kind of stuff, we need some transparency in this country and we need some acceptability. That's what we're doing here--at least, I hope we are.

[François Bouchard]

Too, I think the issue is, where do I go? I need Visa and MasterCard to work with me. Do I go and complain to them? I don't really have a choice. I'm happy that I'm able to come here and speak about my personal experience because I can't go to Visa and MasterCard to complain.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Reed, I see you nodding your head a lot. Maybe you'd like to comment a little bit about that.

[Geneviève Reed]

I will respond in English. In fact, as a cooperative association for family finance in Quebec, we meet with consumers face to face every day. Those consumers face serious budget problems. This is not a direct response answer to your question, but they sometimes have big problems with business, first because of the lack of knowledge of those rates, and second, because of the accessibility of credit cards for some and the lack of accessibility of credit for others.

That is also an interesting point. Some people have too much access to credit and other people do not have access to credit.

As well, you have to bear in mind that if credit cards are used so much by consumers, it's because banks are no longer giving small loans. Consumers are using their credit cards to buy furniture. Before that, they were using loans. This is not the same.

[Glenn Thibeault, NDP, Sudbury, ON]

So things have changed. I can tell you that since I've started asking questions in the House of Commons relating to credit card interest rates, on both sides, I've been getting calls right into my riding of Sudbury from Vancouver and from St. John's, Newfoundland, with people trying to track me down to say that this is an issue they're having.

I think what we need to do is really bring forward to the banks some of these complaints, which I plan on doing. At the same time, I believe Mr. Bernier was talking similarly. We're seeing a lot more credit cards out there. With my credit card, I apparently can surf, go to see these beautiful waterfalls, and attend the Olympics. I think it's Visa that says “go”. I have no idea what that has to do with the credit card.

I think Mr. Conacher was the one who brought it up initially, but the marketing of these credit cards is now something that we're seeing day in and day out. They're trying to entice people to get a card, to use their card and, of course, to continue to increase the profits for the banks and the credit card companies at the expense of consumers and small and medium-sized businesses.

[The Co-Chair, Conservative, James Rajotte]

Just a brief response, please.

[Duff Conacher]

I have just a very small collection here. I get about three a month: get more credit, get more in debt, and get hooked on debt more. This is just a small sample of the pamphlets that are sent out enclosed in bank statement envelopes, all trying to get you to do something else.

All we're asking for is to require them to send out one other pamphlet. If you're not going to require them to send out a pamphlet inviting people to join the consumer watchdog group that consumers would fund and direct, at no cost to the industry and no cost to government, at least require them to send out a pamphlet that educates people about the dangers of debt, as opposed to just trying to entice them to go further into debt.

At least do that as a financial literacy mechanism. If you want to reach people, reach them through the envelopes that the businesses are already sending out.