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

3:55 p.m.

President and Chief Executive Officer, Retail Council of Canada

Diane Brisebois

I think the first thing I should do is make sure that each member of the committee receives a copy of the Industry Canada study on the state of retail in 2010. It's fairly recent. It speaks to the productivity of the retail sector in Canada, which has surpassed every other sector in information technology investment and supply chain investment. That includes, obviously, e-commerce, which we talk about in the research.

Our retailers in Canada, both international players and local players, specifically mid-size and large retailers, have been investing more than their U.S. counterparts in the last five years. Many of them, I'm sure you'll hear from other witnesses, are investing in or doing a lot of tests in mobile technology, which includes not only mobile payments but mobile marketing. The large retailers are investing in social media, interaction with customers, and customer management information.

We also saw a substantial increase in web business enabling technology. That means not just websites that provide product knowledge but websites that allow customers to interact with a company and purchase goods online. There's been an increase of 30% in the number of those sites within the medium and large retail market in Canada. There's been quite a bit of activity. I think often we don't realize that, because we tend to compare Canada with the U.S.

4 p.m.

Conservative

The Chair David Sweet

Thank you, Madame Brisebois.

I have to be a little bit disciplined, because I want to try to give everybody at least one round before we go.

4 p.m.

President and Chief Executive Officer, Retail Council of Canada

Diane Brisebois

I'm trying to jump in before I'm put on a plane again.

4 p.m.

Voices

Oh, oh!

4 p.m.

Conservative

The Chair David Sweet

I understand.

We'll have Mr. Thibeault, for five minutes.

4 p.m.

NDP

Glenn Thibeault Sudbury, ON

Thank you, Chair.

I guess, Ms. Brisebois, I'll start right off with you, then, before you have to get right back on that plane.

We've been hearing some great testimony since we've been studying e-commerce and mobile payments over the last little while. One of the things we've been trying to identify are the concerns of the merchants on the other side of this who are having to accept the mobile payments and the e-commerce transactions.

We can go back a year and a half or two years, when we had the stop-sticking-it-to-us campaign against the merchants fees, and all the stuff we did on that file. Now, again, the warning flags are coming up with respect to how mobile payments and e-commerce are going to affect the merchants. It's great that we have all this innovation. And no one is trying to stifle the innovation. But how is that going to affect the small and medium-sized retailers?

I guess maybe you can give me your comments on that to start off.

4 p.m.

President and Chief Executive Officer, Retail Council of Canada

Diane Brisebois

Thank you for the question, Monsieur Thibeault.

I think that small and mid-size retailers will be back here in short order to talk about the costs associated with accepting mobile payments. The challenge is that they have very little leverage.

As I mentioned earlier with regard to the code of conduct, because VISA, MasterCard, and their issuing banks were unable to circulate those cards at the point of sale, merchants said, “No, it's too expensive. We want Interac debit. We'll take your credit card. We like it, but we can't afford anything else.”

Our concern is that the code does not protect the online world and the mobile world. They're kind of ignoring the bricks and mortar and are moving their VISA and MasterCard debit, with the different issuers, into the other world. As you know, the costs are substantially higher for merchants to accept VISA debit versus Interac debit.

What's interesting, in closing, Mr. Chairman, is that they always talk about more competition, that Interac has a monopoly. It's funny that a monopoly is cheaper than the competition. It's odd how that's working. Until such time as they can really bring a competitive product to the market and there's an association between the cost we pay and the service provided, I think the code needs to continue to be refreshed so that we can ensure that they are transparent and competitive.

4 p.m.

NDP

Glenn Thibeault Sudbury, ON

We all have our technologies with us--BlackBerrys, iPads, iPhones, whatever it is. There are new developers coming out daily, almost, with a new app to process a payment. Many of them are for small and medium-sized businesses. That's where I think the fear is.

Mr. Campbell, we had VISA and MasterCard here. MasterCard is saying that there's going to be no cost for some of their applications. VISA can't give us an answer; they say that they have to make sure this is coming out.

We know that the merchant fee is a concern. Are the banks looking at putting another percentage point on some of these transactions? What can we see from the banking industry in relation to mobile and e-commerce?

4 p.m.

President and Chief Executive Officer, Canadian Bankers Association

Terry Campbell

First of all, I should say I'm deeply sympathetic to Diane. Lightning strikes twice for you, but there we go.

4 p.m.

President and Chief Executive Officer, Retail Council of Canada

Diane Brisebois

I'm sure you're very sympathetic.

4 p.m.

President and Chief Executive Officer, Canadian Bankers Association

Terry Campbell

I am sympathetic. Diane and I actually have a lot of good conversations on things.

Let me say a couple of things. First of all, on the code--Diane mentioned the code, because it relates to a lot of these issues--we think the government did a very good job on the code. We thought it was balanced. We thought it was, quite frankly, an elegant solution. It has only been in place for just over a year and our argument is to give it time to work. We think it actually is working and we think to the extent that there are disputes it gives a good basis for being able to resolve them, and that has happened.

We hear a lot of discussion about the costs. I emphasized in my opening remarks that that's focusing on one thing. You really do need to look at the benefits and at the positive revenue implications with the payments card system we have. If you look at mobile payments, it's not here yet, but there are a couple of things to bear in mind. Canada has the number one penetration in the world. You won't get this in the United States. We have the number one penetration in the world for contactless, the payWave and the PayPass. The mobile system is going to build on that. It's not as if you need to introduce a whole new set of technology. It's way too early for me to talk about whether there would be costs or fees, but just bear in mind that it's going to build on an existing technology.

4:05 p.m.

Conservative

The Chair David Sweet

Thank you, Mr. Campbell.

I'm sorry, Mr. Thibeault.

4:05 p.m.

NDP

Glenn Thibeault Sudbury, ON

We should have gone with seven minutes.

4:05 p.m.

Conservative

The Chair David Sweet

On to Mr. Richardson for five minutes....

November 16th, 2011 / 4:05 p.m.

Conservative

Lee Richardson Calgary Centre, AB

I'm with you, Glenn.

I'd like you to continue, but we're kind of getting to that point where.... Maybe two minutes, and then, Diane, I'd like you to reply.