Evidence of meeting #13 for Industry, Science and Technology in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was card.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

  • Kirkland Morris  Vice-President, Enterprise Strategy, Interac Association
  • Jim Roche  President and Chief Execuive Officer, CANARIE Inc.
  • Diane Brisebois  President and Chief Executive Officer, Retail Council of Canada
  • Terry Campbell  President and Chief Executive Officer, Canadian Bankers Association
  • Harry Sharma  Policy Analyst, CANARIE Inc.
  • David Revell  Senior Vice-President, Business Support and Strategic Initiatives, Canadian Imperial Bank of Commerce, Canadian Bankers Association

5:15 p.m.

NDP

Hélène LeBlanc LaSalle—Émard, QC

Could you elaborate on that? What is the success rate of small and medium-sized businesses as far as adopting new technologies goes?

5:15 p.m.

President and Chief Execuive Officer, CANARIE Inc.

Jim Roche

We implemented a pilot program earlier this year. Currently 25 companies are using this pilot program, and all of those companies are now using cloud computing techniques. They had never used cloud computing techniques before.

It's a small sample size. It's a little bit difficult to extrapolate from that. Our hope is that over the next five years, with the extension of our mandate, we will be able to assist 3,500 ICT companies, and that those companies in turn will deploy technologies into non-ICT companies, increasing the rate of adoption of these technologies.

5:15 p.m.

NDP

Hélène LeBlanc LaSalle—Émard, QC

I am again speaking to the same two witnesses.

How would you advise lawmakers to act? There has been much discussion, there have been reports and so forth. What would you suggest in terms of programs that could help nudge small and medium-sized businesses in the right direction?

5:15 p.m.

Conservative

The Chair David Sweet

There are a couple seconds left. Be very brief.

5:15 p.m.

President and Chief Executive Officer, Retail Council of Canada

Diane Brisebois

Right now, we are studying the U.S. model. There, universities and colleges have these labs where they encourage students enrolled in bachelor's or honours programs in technology to do a work term in a small business. This is done through government grants, and those could be at either the provincial or the federal level. Everyone works together to offer these types of labs. This initiative benefits students, professors and small businesses. It is in place in the U.S., but not yet in Canada.

5:15 p.m.

Conservative

The Chair David Sweet

Thank you, Ms. Brisebois.

Mr. Carmichael, for five minutes.

November 16th, 2011 / 5:15 p.m.

Conservative

John Carmichael Don Valley West, ON

Thank you, Mr. Chair.

Thank you to our witnesses for your patience today.

I've listened to your testimony today, and that of some witnesses last week, particularly those from VISA and Mastercard, and it sounds to me like technology and the cost of technology is a growing issue for retailers. Security, it seems to me, from what I'm hearing, is a given today. I'm getting a lot of nods on the security issues. That was a concern I had early on. It sounds like we've taken care of that.

Early on in this study, cost to the retailers or cost to the users was identified as one of the significant hurdles in growing our economy, in growing the ability to do business on an e-commerce platform. Clearly—and I think Madam Brisebois has articulated this—the retailers bear the cost; it's not borne by the consumers. Consumer products tend to be governed by competition and competition dictates the margins.

Coming from that world, I think that retailers, to accommodate the technology, will absorb the cost. I'm trying to get a better grasp, first of all, on how great this hurdle is. When I hear 12¢ to 3% on the cost, I'm trying to understand why there is that disparity in the margins. I'm wondering if, first of all, you can help me with that.

Then, Madam Brisebois, if there are a couple of minutes left, maybe you could just talk to the cost issue as a hurdle, because I think we really have to get our minds around how to deal with that as a hurdle to the future.

Mr. Morris, I don't know if you can....

5:20 p.m.

Vice-President, Enterprise Strategy, Interac Association

Kirkland Morris

I'm not sure I can speak to the reasons for the 3% side of the 12¢ to 3%. I can certainly talk to the “few pennies to 12¢” side.

Certainly Interac has become a payment method that I think both sides--consumers on the one side and retailers on the other--have come to rely on greatly in their everyday lives. It's a product that we're able to deliver to the market not only I think as the most inexpensive payment option in this market—for a typical large retailer, say, 2¢ or 3¢ per transaction, and for a small retailer probably 10¢ per transaction—but also even on global levels. These are costs that are low by almost any international standard.

I think this has been what Interac has been about. We've heard a lot about costs at this table today. It's what we continue to look to as we talk about advancing into e-commerce, mobile commerce, and so forth. Part of the effort here is to continue to deliver service that is valued by merchants and consumers at cost points that are approachable for consumers and merchants.

5:20 p.m.

Conservative

John Carmichael Don Valley West, ON

Thank you.

Mr. Campbell?

5:20 p.m.

President and Chief Executive Officer, Canadian Bankers Association

Terry Campbell

Well, I guess I'd say a couple of things. First of all, retailers do bear some of the cost, there's no question about that, but a lot of the cost for security and so on is funded by other parts. It's funded by the spread. So the costs are shared all the way around, but I take your point on that.

You talked about the Interac cost versus the cost of cards. Again, numbers are bandied about here. I encourage the committee to go online. There's a real nifty chart on the website of the CFIB, another business representative, that actually charts the costs of card acceptance. It's actually lower than 3%. They've done a very comprehensive...it is lower than that.

But remember: there are different products here. Interac, as was just said, is directly into the account. The money's there and you pull the money out. Credit cards are a credit product: you're extending credit. You're advancing credit to people and the institution is taking a risk. You have to price for that risk. There's a whole bunch of other things that go into that, but to compare the two.... They really are different products and people use them differently.

5:20 p.m.

Conservative

John Carmichael Don Valley West, ON

Okay. Thank you.

5:20 p.m.

President and Chief Executive Officer, Retail Council of Canada

Diane Brisebois

I loved that opening. He just opened the door for me here—

5:20 p.m.

Conservative

The Chair David Sweet

You have 30 seconds.

5:20 p.m.

President and Chief Executive Officer, Retail Council of Canada

Diane Brisebois

It is very difficult, then, to justify why VISA and Mastercard come before this committee--and before finance committees in the past--and say “Our VISA debit is 1% versus 2¢”. MasterCard.... That's the reason why retailers said no. That's why there's a code of conduct. There's no reason. Let's be honest here—it's my 10 seconds—they charge it because they can.

It's as simple as that.

5:20 p.m.

Conservative

John Carmichael Don Valley West, ON

Thank you.