Bill C-419 (Historical)

Credit Card Fairness Act

An Act to amend the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act (credit cards)

This enactment amends the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act to implement a number of measures respecting credit card accounts.

Sitting Resumed

[The Deputy Speaker, Conservative, Bruce Stanton]

Before resuming debate, I would like to thank the interpreters and everyone who helped resolve the technical difficulties with the system.

Resuming debate, the hon. Parliamentary Secretary to the Minister of Finance.

[Jennifer O'Connell, Parliamentary Secretary to the Minister of Finance (Youth Economic Opportunity), Lib.]

Mr. Speaker, today's legislation, Bill C-419 proposes a number of amendments to the financial institutions statutes in relation to credit cards. These amendments would modify business practices and disclosure requirements for credit cards issued by federally regulated financial institutions, including the way in which interest rates are calculated and applied to balances.

This bill is well-intended and our government shares its aim of improving financial protection for hard-working Canadians who use credit cards. In budget 2018, the government announced its intention to introduce legislation that would strengthen the tools and mandate of the Financial Consumer Agency of Canada, while advancing consumers' rights and interests in dealing with their financial institutions. With BIA 2, the government did exactly that.

These amendments that have been adopted with the most recent budget implementation act will lead to better outcomes for Canadians when dealing with their banks. Might I point out that, again, this was one of the most significant consumer protection packages since the FCAC's creation. Together, they will help ensure that banks have internal business practices that further strengthen outcomes for consumers, including ensuring consumers' financial needs are assessed when selling them products and services. They will ensure that the Financial Consumer Agency of Canada has the necessary tools to implement supervisory best practices, including directing banks to comply with their legal obligations and ordering restitution when charges have been improperly collected, and that consumers are further empowered and better protected, including ensuring that banks provide timely electronic alerts to consumers when they are at risk of incurring fees.

We are confident that these amendments to the framework will improve outcomes for Canadians because we grounded the legislation in evidence.

The Financial Consumer Agency of Canada, or FCAC, is the federal regulator dedicated to protecting bank consumers. As part of its ongoing work, the agency undertook broad reviews of banks' sales practices and of the best practices for consumer protection in Canada and abroad. Our government's action has also been informed by an important study from the Standing Committee of Finance on consumer protection and bank practices. The consumer protection changes we did respond to issues that were identified as part of these reviews.

In contrast to the member opposite's suggested bill, the amendments we brought forward were developed in consultation with a wide range of stakeholders, including consumer groups, financial institutions and officials from the provinces and territories. As colleagues know, consumer protection is an area in which both provincial and territorial governments and the federal government are active. Several provinces, including Quebec, have comprehensive financial consumer protection rules. As such, consulting provinces and territories is crucial before introducing new measures to avoid conflict and duplication.

Considering that BIA 2 contained a wide range of important amendments, I would like to at least highlight a few of the major changes. To start, our government has proposed a series of measures to improve the way financial institutions handle consumer complaints. Under our proposals, these institutions will be required to keep a record of all complaints and will be required to make this information available to the commissioner of the FCAC to help improve monitoring and oversight. In addition, the commissioner will assess the complaints-handling procedures of banks and ensure banks follow the rules.

We know that when Canadians have disputes with their banks, they deserve to have access to a resolution process that is fair and impartial. That is why bank consumers can take any complaint they cannot resolve with their bank to an independent body, free of charge. With these changes we will require these bodies to publish a summary of each final recommendation regarding a complaint, including the reasons for the recommendations. We will also require these bodies to report annually to the commissioner and to the public on their performance. These new reporting requirements will help the agency in its work and ensure that consumers are better protected.

Beyond complaints resolution, in cases where it has been found that banks have violated their obligations to consumers, we have proposed to increase the maximum penalty that can be imposed. Under our proposals, if the commissioner determines that a bank has breached its legal obligations, the maximum penalty that can be imposed will rise from $500,000 per violation to $10 million per violation. Furthermore, when the commissioner publishes a decision regarding a violation, those notices will include the name of the financial institution. We believe that higher penalties and publicly naming banks would create a stronger incentive for banks to comply.

We also introduced a new requirement for institutions to establish and implement policies and procedures to ensure products and services offered or sold are appropriate for customers' circumstances, including their financial needs; we have introduced a new definition of the term “undue pressure” and an enhanced prohibition on institutions; we have an enhanced requirement to provide cancellation periods for most ongoing products and services; we have enhanced the requirement that an institution may not impose a charge or penalty on a person unless the institution obtained the person's express consent for the provision of the product or service; and there is a new requirement that the maximum liability for an unauthorized credit card transaction be $50, unless the borrower was grossly negligent in safeguarding the credit card or specified information about the credit card.

There are also measures in our recent fall economic statement designed to empower and protect consumers as well.

First, we committed to developing a code of conduct for how banks should deliver their services to better meet the needs of seniors. To ensure that seniors can bank with confidence and to respond to the unique needs of Canada's aging population, the Financial Consumer Agency of Canada, with support from the Minister of Seniors, will work with financial institutions and seniors groups to create a code of conduct for banks to guide their delivery of services to Canadian seniors.

Once the code is developed, the agency will take steps to ensure that banks comply with this code of conduct and that seniors, as well as all Canadians, are aware of the rights and obligations under the code.

In addition, the agency will undertake a review of the way banks handle complaints, including an assessment of how effective the existing external complaint bodies are at resolving consumer complaints. The results of this review will help our government consider whether further changes to the consumer protection framework are needed.

Consumers want to know that financial products and services offered by banks meet the highest standards and that the fees they are paying for products and services are fair. For our part, our government is committed to supporting a financial sector that promotes competition and consumer choice and continues to deliver financial stability and economic growth. BIA 2 helps to fulfill this commitment, and we will continue to work with all stakeholders, including consumer groups, to further refine and improve consumer protection in Canada.

We know that Canadians work hard every day to build a better life for themselves and their families. In return for that hard work, they expect and deserve a stable financial system that safeguards their savings and investments. As a government, we take the protection of financial consumers very seriously, and that is why we are continuing our work to increase fairness and transparency and ensure that all Canadians benefit from strong consumer protection standards.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I am pleased to rise to speak on Bill C-419, an act to amend the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act. This is important for consumers and Canadians. It is long overdue in this chamber.

It is an interesting debate, because we have a bill introduced by the Conservatives that is really about state intervention on the banking system, the financial sector of Canada, and Bay Street in particular, state intervention that is required because of their behaviour. There are many economists who would agree that they need to be reined in.

The Conservatives are advocating for higher regulations in order to have a greater leash on the banking sector, as well as some oversight that is different from what we have now.

I will outline the measures that are found in the bill. They are quite good in many respects and mirror some of the other states around the world that have also intervened on the banking sector.

I applaud the Conservatives for coming to the realization that the free market economy, if left to itself, is not adequate to police itself in many states. I would argue that the banks in particular require this state intervention, because consumer treatment over credit cards is unbelievably bad in this country. I would argue as well that insurance companies also need greater oversight, and there are other issues. However, this one in particular is low-hanging fruit. Other democracies are also saying that a correction to the free market is required and is very important not only for the good of consumers but also for the overall health of our economy and for other businesses, whether they are small or medium-sized businesses or larger institutions. The financial sector itself cannot be trusted to govern itself, which the Liberals are now advocating here, ironically.

Time after time, we have seen this nightmare emerge in the House of Commons. Having been in the House over a number of different election periods, at times I have heard the Liberals get up and criticize Jim Flaherty for bringing in the weak regulatory process that we have at this moment, and now, ironically, they are defending the Conservative position.

Over here, we have the Conservatives, who have come full circle and have realized that the state they had control of and had the reins on did not have our best interests at heart when they basically abandoned all accountability for the financial sector. They have agreed with what we have said many times, which is part of the foundation of democratic socialism: that there needs to be accountability, oversight and justice when it comes to the environment, financial matters and business. We cannot let free capitalism go wandering about, because there will be winners and losers. The vast majority of them will be losers, while a fairly small group, in this case the banking and financial sectors, will be the winners. Therefore, I applaud the Conservatives for coming full circle on this issue.

Unfortunately, what we have seen is the typical dance that we have here in this hall, which is that the Liberals are now on the other side, explaining why they cannot do anything and leaving it to somebody else to try to figure out. In the meantime, we have Canadians that are continually victimized.

Ironically, this was supposed to be an activist government, but it has turned into an apologist government. What we just heard was an apology to Canadians. We are being asked to support a private member's bill that is quite basic in many respects in terms of transparency and accountability and in terms of being good for consumers and small and medium-sized businesses. Why can we not come to grips with that?

In fact, it lets the Liberals off the hook in many respects. The Conservatives are saying that we need to intervene with the levers of government because the financial sector in Canada is not capable of controlling itself. That is what we are after here. The Conservatives are saying we need the minister, the cabinet, the government and eventually the Senate to send as strong a signal as possible to the banks that their time is up, that the free rein they had has expired, and that they need to provide what we have seen with other nations, which is a record of accountability for consumers, because some of the things that they do are quite egregious. It is not only the policies they have put in place for consumers and what is taking place; it is because we are a society that has become quite dependent on some of the services they provide.

I will throw out a couple of things to show how important this is for our economy, our consumer society and other businesses. Right now, there are 75.3 million credit cards in circulation in Canada, and 36.4 million of those credit cards have a balance. Of those, $200 is the average unpaid balance, and people are paying interests rates anywhere from 17% to 40%. Households spent an average of almost $550 in interest charges in 2017 on some of these cards, and 42% of Canadians do not pay their balance off every month.

The United States has acknowledged this and is bringing in new regulations and laws, which ironically we cannot get in Canada. We can harmonize our automobiles, which is very complex, and our computer systems and technology, but we cannot harmonize a piece of plastic for the benefit of consumers. We cannot harmonize the banking regulatory sector, which has been done in the United States. We have faced some of the consequences of a financial sector gone wild, and even though we have this opportunity, the government is taking a pass on it.

I do not understand that, especially because the government has all of the political coverage it needs given that the Conservatives are saying that Bay Street and the financial sector need to be reined in because they are incapable of controlling their greed.

That is what this is about. When we look at the bill from the member for Lethbridge, we can see that it identifies some of the most egregious things in the credit card policies.

One of the things it calls for is a cushioning of the interest rate. A lot of Canadians can probably relate to this. Let us say a person has to pay a credit card balance of $400.35. People who pay $400 can be charged interest on the whole thing. It could be just a simple accident a person makes with the click of a button when paying online or from getting bills mixed up, whatever it might be. Others might be like me, someone who always pays a little bit extra just to avoid that. Banks actually then get a bump in their revenue, when it is all collected up. It is quite a Ponzi scheme in many respects because of all that additional revenue they get for the next month to themselves. When we start to add that up across the board, it is quite significant.

That is one of the things this bill addresses. It would ensure Canadians just pay the interest on what is actually owed. That is a balanced approach.

Again, having to actually bring the levers of government in on this is appropriate at this point in time. I have talked about the fact that so many Canadians are dependent upon using this and are missing out on many interest payments. Life is tough enough with the rising cost of energy, rent, housing and so on. Interest payments from a simple a mistake that a person might make during a busy life are not fair and just, in terms of what banks charge people compared with what their actual bill should be.

The bill calls for transparency, which is really important. I would argue that is not only important as a social justice element, which is nice to see coming from the Conservatives in this place as they have endorsed social justice for consumers. There is also accountability, as credit card companies actually have to report what people paid in interest over a year. They have to put that on people's monthly statements, which is another good idea.

Let us move to interest rates. Credit card companies cannot retroactively raise interest rates. Another part of justice is that the interest rate at the time of a person's purchase becomes what a person actually pays out, so that later on, if there are adjustments on a card, a consumer does not get weaselled a second time around by having to pay more. That is a good and fair idea. This is not a back street, loan shark type of thing in which people show up at a second meeting and all of a sudden their interest rates are higher. This is something that can actually be done, and it should be done because it is a good business practice for everything.

There is also the notification that the bill calls for. This is interesting. The bill calls for another set of legislation to increase awareness and accountability when increasing people's credit card rates so that people do not get into further financial debt.

I want to applaud this. It has every opportunity for the light of day for consumers and a better economy, and it has all the political coverage the Liberals could dream about, because the Conservatives are asking for this and are telling us that Bay Street's and the financial sector's greed has gone wild, and that this needs intervention, needs some assistance and needs self-correction. That is what we should do here. The Liberals have all that cover, so why are they not taking it? I do not understand.

[Leona Alleslev, Conservative, Aurora—Oak Ridges—Richmond Hill, ON]

Mr. Speaker, I am extremely proud to have the opportunity to speak to this bill today, Bill C-419, the credit card fairness act, which would amend the Bank Act, Insurance Companies Act, Cooperative Credit Associations Act and the Trust and Loan Companies Act. I want to thank the member of Parliament for Lethbridge for bringing this private member's bill forward.

Why am I so proud to speak to this today? Ultimately, government has a responsibility in protecting the consumer. Once upon a time, from 1967 to 1995, this House and our federal government had a minister of consumer and corporate affairs. Then, unfortunately, under the government of Jean Chrétien, the Liberal government, that position was eliminated.

What is the role of a minister of consumer and corporate affairs? The role of government, or governing, is to balance the interests of the individual citizen with the interests of corporations and to ensure society is protected and looks after the well-being of not only the citizens of today but of tomorrow.

The government has a responsibility to protect citizens when they are not necessarily able to protect themselves. That is what consumer protection is about. This is why we have a bank act, an insurance act and a co-operative credit act. It is to ensure that financial institutions holding citizens' money, and therefore a significant amount of power and influence, are not able to take advantage of individual citizens.

Unfortunately, we no longer have that voice at the cabinet table. We no longer have a minister whose sole responsibility is to keep tabs on those kinds of things and ensure individual citizens who are not able to go up against these great corporations, or institutions like a bank, have their voices heard. Therefore, because these individuals are not able to defend themselves in this manner, we have a member of Parliament who needs to bring a private member's bill forward simply to address some of the punitive and monopolistic practices of banks around the terms and conditions of credit cards.

This bill is about fairness and transparency, but what exactly is in this bill? This bill has seven key elements. The first would mandate that if a cardholder pays more than 95% of his or her outstanding balance before the payment due date, the bank could not charge interest on the whole amount. This means that I can be charged after the due date, not for the balance that I have not paid after the due date, but for the entire outstanding balance that was on that bill. I can honestly say that I did not know that could actually happen. I thought credit card companies could only charge interest on the balance, the amount I did not pay, not on the amount of the bill and, therefore, the amount I did not pay plus the amount I did pay. This is a critical change because it would mean that the credit card company would only be able to charge interest on the balance that is outstanding after the due date.

The second would ensure that if different rates apply to different amounts owing in a billing cycle, the companies would have to apply the payments to the highest interest rate balances first. Therefore, if I have a number of balances, each of which can be at a different interest rate and I pay off the credit card, right now they do not have to say that it goes against the highest rate first. They can charge me the highest rate on the entire outstanding balance. This would fix that. It would mean that when a balance is paid, it would go against the highest interest rate first. That sounds reasonable and fair.

Number three, it would require credit card companies to disclose, on the monthly statement, how much interest the cardholder has paid in the previous 12 months. That just seems like transparency in labelling. Absolutely, the credit card companies should be required to tell people how much interest they have paid in the last 12 months.

Number four, it would require credit card advertisements and marketing materials to prominently communicate the annual fee, the annual interest rate, the period of time until the introductory rate ended and the interest rate that would apply following that period. It also seems obvious that a credit card company would have to tell people what the interest rate would be when the introductory rate ended and what rate would apply in the following period. I did not know that this was not the case today. Absolutely, that is something that every consumer should have the right to know.

Number five, it would prohibit credit card companies from increasing interest rates retroactively on a cardholder's outstanding balance. Again, I am shocked to say that I did not think it was even legal that I could buy something 12 months ago and carry a balance on that, and the credit company could change the interest rate today and charge me the new interest rate on the balance of the amount I incurred at that time under the terms and conditions at a lower rate. That seems unreasonable and absolutely should immediately be changed.

Number six, it would require credit card companies to provide cardholders with an online mechanism to cancel their credit cards and decrease their credit limit. To communicate with credit card companies, people have no choice but to phone them, yet it is very difficult to get through. They do that, one could assume, on purpose. People pay their bills online. Most of us send emails. Most of us do most of our communication over the Internet, yet to cancel a credit card or decrease a credit limit to manage our finances more effectively, we can only do that in person. This would have it be applicable online. Brilliant.

Number seven, last but not least, the bill would legislate that credit card companies could not automatically increase a cardholder's credit limit. Wow. Again, how are they legally able to without telling cardholders? Clearly this is something we should support.

Why does this matter? There are 73 million credit cards, and 42% of Canadians do not pay off their debt, and many of them have $200 in balance. We have found that many people are within $200 each month of insolvency.

This bill would not jeopardize the free market. It would not have far-sweeping and exclusive principles. It would not completely address all the things that need to be changed in consumer protection. It would just address something critical, finite and long overdue.

My compliments to the member for Lethbridge. A private member's bill is a great deal of work, and often members of Parliament are not given due credit. These are things governments should do. These are things ministers of corporate and consumer affairs should address. However, in the absence of that, this member of Parliament from Lethbridge went above and beyond to do this very important work on things that, in my personal opinion, should already not be legal to stand up not only for the consumers in her riding but for the citizens of this entire nation.

Many of us do not have a choice not to have a credit card, because our society is structured so that many have no choice but to have a credit card. We are held hostage by the banks until such time as federal government legislation protects us.

I call on all the members in this House to support this very important private member's bill. Once again, I thank the member of Parliament for Lethbridge for putting this private member's bill forward on behalf of all of us.

[Linda Lapointe, Liberal, Rivière-des-Mille-Îles, QC]

Mr. Speaker, I am pleased to rise to speak to Bill C-419, an act to amend the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act. My colleagues may not know this, but I have studied the issue of credit cards extensively. Today's subject definitely interests me.

I would like to point out that many of the measures included in the bill before us today already appear in the budget implementation act. However, since this is very serious subject, a lot of consultation with the provinces and territories is needed.

As I said, certain specific measures are already included as part of the consumer protection measures in the Bank Act, as they were introduced as part of the package of measures included in Bill C-86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, which received royal assent on December 13, 2018.

For example, Bill C-419 proposes that a bank must obtain the consumer's consent before increasing the credit limit on a credit card and provide written confirmation if consent is given verbally. That is important. They must not increase the limit on a credit card without the consent of the consumer. The written consent is important, and we have already added this requirement to existing protections.

The bill also proposes to require the disclosure of specific information in credit card advertising, including annual interest rates. This requirement is a duplication of existing requirements, including the obligation to disclose the annual interest rate and other interest expenses in advertising.

I will go back to what my colleague said at the outset. This text amends the Bank Act, the Trust and Loan Companies Act, and all other legislation I mentioned earlier. When Canadians deal with their financial institutions, they want their information to be protected, the goods and services to meet the highest standards and the fees they pay to be fair. First and foremost, people must know what they are getting themselves into with their credit card.

For more than a decade, the previous Conservative government failed to make any significant changes to Canada's consumer protection standards despite the major technological changes that would have made them possible.

In the wake of an extensive review of bank sales practices and broad consultations with the provinces and territories, our government took significant measures to promote Canadians' rights and interests. That is important. We always talk about the middle class. Credit cards are a method of payment and it is important that they be subject to the same rules and that people know how to use them.

Our government's decision to implement a new set of rules to protect Canadians when they use their financial institution represents the most significant change since the creation of the Financial Consumer Agency of Canada in 2001.

Conservative MPs refused to defend Canadian consumers when they formed the government. They have no real plan to defend them now.

The bill that our colleague introduced proposes two sets of amendments to federal legislation regarding financial institutions and credit cards. The first would limit credit card interest rates for consumers by reducing the amount of interest to be paid when a borrower pays 95% of his or her outstanding balance; by applying the lowest interest rate on purchases when interest rates change during a billing cycle; and by requiring lenders to apply all payments to the portion of the balance with the highest interest rate. This is an important part of the proposal. The Banking Act already requires banks to apply payments either to the balance with the highest interest rate or to prorate it to each unpaid balance.

The second set of amendments imposes new disclosure and business practice requirements. The bill would require that lenders disclose the total of all amounts of interest paid by a borrower for the previous 12 billing cycles and that credit card advertisements clearly indicate the interest rate, fees and any applicable discounts. Other amendments would require that cardholders give their consent before their credit limit can be increased. I spoke about that earlier. It is a very important measure. There are also amendments that would require that cardholders have an electronic means to decrease the credit limit on their card if a bank provides online banking.

Our government is working hard to protect consumers. As part of our ongoing efforts to improve the consumer protection framework, our government recently completed an important review and update of the consumer protection framework under the Bank Act and the Financial Consumer Agency of Canada Act. It is important to remember that this had not been done since 2001 and that we have been working on this since we took office.

The measures to be added to the previous Bank Act will be based on the information in two reports prepared by the Financial Consumer Agency of Canada, the FCAC. The first report consisted of an exhaustive review of bank sales practices, and the second reviewed the best practices in financial consumer protection. Our government was also guided by an important study carried out by the Standing Committee on Finance on consumer protection and bank practices.

The Standing Committee on Finance works very hard. Ten parliamentarians meet at least twice a week and work on reports. These people come to an agreement before making recommendations. They meet with many witnesses. When the Standing Committee on Finance, or any House committee, prepares a report, 10 parliamentarians study everything in the report to ensure that the recommendations made to the minister will improve legislation. This is done by mutual agreement.

Consultations are also needed with the provinces and territories to update the consumer protection rules. Bill C-419 introduced by our colleague across the aisle has not been the subject of extensive consultations with stakeholders, including provincial and territorial governments. This is in contrast to what was done to prepare for the most recent measure we put in place. Consultations with the provinces and territories are essential. I cannot stress that enough. These are not things that are easily changed. Consultations, witnesses and experts are needed. It is important to ensure that everything complies with all the previous rules, as well as the laws already in force. Every possible impact of amending legislation as complex as the Bank Act must be considered, as it governs banking institutions.

[The Deputy Speaker, Conservative, Bruce Stanton]

If the hon. member for Rivière-des-Mille-Îles wants, she can have another minute when the House resumes debate on this motion.

The time provided for consideration of private members' business has now expired, and the order is dropped to the bottom of the order of precedence on the Order Paper.

The House resumed from January 29 consideration of the motion that Bill C-419, An Act to amend the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act (credit cards), be read the second time and referred to a committee.

Credit Card Fairness Act

[Robert Aubin, NDP, Trois-Rivières, QC]

Mr. Speaker, it always a pleasure to rise to support a colleague's bill, especially when that colleague is the hon. member for Victoria. I admire the way he manages files and provides pertinent answers to our questions when we are discussing the matter with him. I must admit, he has a talent for getting to the heart of the issue.

One thing that is seriously starting to grate on me after nearly eight years in the House of Commons is having to say that a bill is a step in the right direction. It is as though we are never able to fully resolve an issue and close a file and say that the matter is resolved and we can tackle another problem and find the best solutions.

That is exactly what the member for Victoria has done with this bill, however; he even stated what he sadly cannot do within the confines of a private member's bill. Nevertheless, he still very much hopes that Bill C-415 will get the ball rolling and motivate the government to either add what he was not able to include and pass this bill or, alternatively, overhaul Bill C-93, the counterpart of this bill that, to my mind, is not up to snuff.

After speaking with my colleague from Victoria, I was preparing a theoretical and even intellectual presentation on the merits of expunging records for simple possession of cannabis compared to the suspension of records. However, reality caught up with me in my riding. I will therefore provide an overview of a case I had to deal with in my own riding and which clearly shows, in black and white, that the government's Bill C-93 does not go far enough and that Bill C-415 really does take a step in the right direction. I do not believe you could find a better example.

I got a phone call from one of my constituents who was in a bit of a panic. Actually, it was a complete panic. I will not name names or say anything that would give away this person's identity, but he is a musician. I have a soft spot for those in the music business because I was a musician myself for many years. This particular musician is on an international tour with a band. They have played in England, several European countries, and many cities across Canada. Now the band is set to play 15 or 20 American cities. Things are going well. It is probably the best tour of this musician's career. A musician's life is not necessarily easy and it is not always a very lucrative career either. Artists really have to have a strong conviction that they are making an essential contribution to society.

Everything is going well for this musician. The whole group, both the musicians and the trucks with the equipment, arrive at the American border. They fill out the necessary paperwork and cross the border. Everyone gets through no problem except for this individual, because border officials saw that he had been charged with simple marijuana possession 25 years ago for one gram of cannabis that he forgot was in his pocket. He is barred from entering the U.S. The band is supposed to play 15 to 20 shows in the United States and they have just lost one of their musicians. They either have to find a replacement or cancel that leg of the international tour because this individual was charged for the possession of one gram of marijuana 25 years ago.

Obviously, the conviction happened 25 years ago and it is on his record. It is not difficult to imagine how someone could forget this after 25 years. It is kind of laughable, especially since society has evolved in the meantime.

This musician is therefore unable to do the tour. He called me to ask how this situation could be fixed as quickly as possible so that he could join the band for the rest of the American tour, since this record did not cause problems anywhere else in the world.

There are all kinds of conditions that you have to meet. You cannot request a pardon until at least five years have passed since the conviction. After 20 years, that condition is fairly easy to meet. Then, you must pay $631 to apply. Whether this amount is high or not high enough is a matter of perspective, as it is directly linked to the individual's annual income. For a musician, $631 could easily represent one or two shows where he is working for the Crown and not for his family or himself. In addition, he has to track down certain documents, like police reports and legal documents. This takes time, and deciding whether he can continue the tour is a time-sensitive decision.

To top it all off, you have to wait 24 months for a response. There is your answer for the American part of the tour. This is a real problem, since Parliament decided this was no longer a relevant issue in 2019. We legalized simple possession of marijuana. The whole time that this government was preparing the legislation, it never bothered to consider what would happen the day after this bill passed.

How do we make sure that a crime that is not considered a crime anymore no longer weighs on people who committed it in the past? If society has evolved to the point of recognizing marijuana as legal, there is no reason in the world to make people suffer permanently for doing something that is no longer seen as a crime. However, their records live on.

If we go with the record suspension approach proposed in the government's Bill C-93, it would be too little, too late, because the suspension would not make the criminal record disappear. The name says it all. The record is suspended. I will admit that the government is showing openness by eliminating the fee to apply for a record suspension. In contrast, the process of expungement is very clear. With expungement, all existing files relating to the conviction are erased, and the slate is wiped clean, as if the crime had ever happened. That also enables anyone with such a conviction on their record to answer “no” with perfect confidence and honesty whenever they are asked if they have a criminal record, because the record has basically disappeared and the offence is deemed never to have been committed. That is an important difference proposed in Bill C-415.

My time is almost up. I had so much more to talk about, but the case I mentioned is probably more compelling than anything I could say. I urge all members to make sure they really understand the difference between expungement and suspension and to support the bill introduced by my colleague from Victoria.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Madam Speaker, I am pleased to be rising at this late hour to join the debate on this private member's bill, Bill C-419.

Bill C-419 is an act to amend the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act. The reason it mentions all of those is that the bill would amend every single one of those acts in exactly the same way regarding credit cards, including exactly what type of reporting will happen on the credit cards and what type of information will be required for customers to receive.

My colleague, the member for Lethbridge, has moved this excellent piece of legislation, which I ardently support. It is about time that there be greater fairness for those who use credit cards. There is a Yiddish proverb that says, “Do good and ask not for whom”, which is exactly the spirit of this proposed legislative amendment that my colleague is moving. We are trying to do good here on behalf of all of those who carry a large amount of credit card debt. We are not asking who will receive the benefit. We simply want to provide more fairness for those who have to use credit cards on a daily basis, whether they are students, members of Parliament or just regular Canadians who have expenses and use credit cards on a daily basis to pay for them.

As I mentioned, the same amendments would apply to every act the bill mentions. However, on the Bank Act side, what the legislation proposes to do, under proposed subsection 451.1(1), is that if a person pays at least 95% of an outstanding credit card balance, interest would be charged only on the difference. For example, if there is $1,000 owing and $950 and change is paid, then interest would be charged only on the balance left owing.

What is happening right now is that, with online banking and the apps that banks provide, it is easy to make a typo mistake when trying to pay a bill. What people do not understand is that if the full amount owing is not paid, then interest on the full amount is charged. For example, on a $1,000 credit card bill, if $950 is paid, then the interest charged will be on the $1,000, and that could be at 19.95%, 21.99% or whatever the credit card interest is. The interest is not charged just on the amount outstanding but on the full amount. Therefore, the bill proposes that if 95% is paid, then there would be credit for that amount and interest would not be owing.

The bill is a perfectly reasonable piece of legislation that gets to the point of fairness. It gets to the point for people who are honestly trying to pay off the full amount. Perhaps a person could not pay the full amount in a particular month, or had made an error in the calculation of the amount owing or made a mistake typing on the app when trying to pay the correct amount and clicked next thinking it was perfectly fine. If people make an honest mistake, they would not be charged on the full amount, such as in my example of the $1,000. They would only be charged on the difference left outstanding on the credit card bill.

The bill also proposes that consent be sought for any type of credit limit increase, which is found in proposed subsection 451.3(1) of the bill. Specifically, if a bank chooses to increase a credit limit, it has to obtain the cardholder's approval to do so first. This is an issue for people who have a credit report out there that they are checking and double-checking.

For example, when applying for a loan or a mortgage, if one has a lot of credit cards on his or her credit report, the banks can see the balance and total amount of credit a person can obtain, which will affect whether a bank approves a mortgage, credit card, personal line of credit or home equity line of credit. As well, it can be shocking to get a letter in the mail where the bank is extending extra credit that was not asked for. A person may use a credit card for a specific purpose and only wants $1,500, not $10,000 or $15,000, but the bank could increase the credit without asking permission. I have had this happen to me and have asked the bank to lower it back down.

That is probably a nice problem to have for some, but for those of us who are trying to manage our credit reports and credit rating scores, it is a bother. We have to reach out to the bank and have it changed back to what it used to be. Therefore, this particular provision of the act, which I like, and proposed subsection 451.3(2), “Confirmation in Writing”, which I also like, I think get to some of the problems that could happen if banks and issuers in general could simply just issue credit limits that people do not want.

I have had it happen in the past. My son, who was eight years old at the time, was issued a notice that he was eligible for a credit card for $500. I do not know how the company got the information. It must have drummed it up in its database. I had to call the bank to inform it that my young Maximillian should not be eligible for a $500 credit card because, although he was a student, he was not a university student and the bank probably did not mean to send it to him.

The customer service agent apologized about the error and we had a good laugh about it on the phone, but of course those types of situations should not be happening. Parents should not have to be calling a bank to double-check with it as to how it got the information and why it made such an error.

I think this legislation is timely. As I mentioned, we should be doing good here and not asking for whom. There is no lobby out there asking for these credit limit rules to be imposed. I do not think there is a lobby out there asking for the changes proposed in this piece of legislation. I think the member for Lethbridge is simply going after fairness for the general population. It is a diluted benefit across the entire Canadian population for all those consumers who are using a credit card.

Many consumers in Canada prefer to use debit, and I know why. I sometimes rely on my debit card as well. However, this is for all those who are using a credit card, regardless of who the issuer is, to make sure that if they are trying to get close to paying their total amount—95% in this case, of their outstanding balance owing—they will not be charged interest on the full amount because they did not pay it all off. It is there in the terms of reference.

We are all like this. I will be the first to tell members I have never read my iTunes user agreement. I admit to that. I have never read it. I just click on “Okay” every single time. I trust the member for Kingston and the Islands has read it; I know he has.

I have gone through the Netflix one, just out of sheer curiosity as to what is in there, but many of us simply click on "Okay" and move on. We are all guilty of this.

However, I have read my credit card rules and the little sub-points in them. I did it before I became a member of Parliament, and afterward especially, because I realized very quickly how much of our expenses are run through our offices. I had to ask for five credit card limit increases because so many of our expenses are run through our credit cards. I do not know if other members have had this experience, but many of our expenses are, so I carry a balance month to month.

I am fortunate that I can pay it off every single month. It is a practice my parents instilled in me. For those of us who are unable to do so, for those of us who do make those typing mistakes—I know I have made a few expensive typing mistakes in 2018 that cost me very dearly in interest—and for those of us who are getting closer, the 95% the member for Lethbridge is proposing is a reasonable legislative change that will do good. We are not asking for whom, because all credit card users across Canada will benefit from this legislative change. I hope that it will find support on both sides of the House that will send it to committee for a thorough review of the consequences of making such a legislative change.

I think that in this case, more information and control for credit card holders and fairness on the side of how much interest people are paying when they are trying to pay off the total amount owing on their account balance is a good thing. It is good thing for Canadian credit card users. We would do good and we will not ask for whom, so I am imploring all members of the House to support this important piece of legislation that has been brought forward by my colleague from Lethbridge.

[Joël Lightbound, Liberal, Parliamentary Secretary to the Minister of Finance]

Madam Speaker, thank you for giving me the opportunity to speak to Bill C-419, the credit card fairness act.

I also want to thank the hon. member for Lethbridge for allowing us to talk about fairness, transparency, and financial consumer protection. These files are important to our government. I am pleased to see that the hon. member shares the concerns that have been guiding our work since the beginning of our term in 2015.

Canadians know that it is not always easy to manage their relationship with their bank and other financial institutions. That is why the government ensures that year after year there are rigorous consumer protection standards in place to reassure Canadians when they make transactions and decisions on financial products and services.

Unfortunately, some of the proposals for the credit card products in Bill C-419, as presented, could harm or confuse Canadians.

As I will describe, our government has introduced a number of new consumer protection measures in the Budget Implementation Act, 2018, No. 2, or Bill C-86, to further empower and protect financial consumers of credit card products. In fact, with the new set of rules to protect Canadians when they deal with their banks, our government has put in place the most significant change since the creation of the Financial Consumer Agency of Canada in 2001.

Further, the Financial Consumer Agency Agency of Canada, or FCAC, has a number of tools available to raise awareness of credit and consumer debt issues, and is continually working to improve the financial literacy of Canadians.

However, the bill proposes that cardholders who leave as much as 5% of their balance unpaid in a month would pay reduced interest. This type of measure could encourage Canadians to carry a balance on their credit account and increase credit card indebtedness.

In contrast, existing credit card rules encourage Canadians to use credit cards responsibly. Borrowers who pay off their entire balance monthly benefit from a 21-day interest-free grace period. This incentivizes Canadians to pay their credit card bills in full without incurring interest costs.

Also, some specific measures that protect consumers are already in place in the Bank Act as they have already been introduced as part of the comprehensive package of measures included in our government's most recent Budget Implementation Act, 2018, No. 2, or Bill C-86, which received royal assent on December 13, 2018.

For example, Bill C-419 proposes to require a bank to obtain express consent from the consumer prior to increasing the credit limit on a credit card account and provide written confirmation in cases of oral consent. This requirement is already provided for in the existing protections.

Bill C-419 also proposes to require specific information disclosures in credit card advertisements, including the annual rate of interest. This is largely duplicative of the existing requirements, including the requirement to disclose in advertisements the annual rate of interest and non-interest charges.

On another front, some of the proposals could confuse or harm Canadians. They would go against the spirit of our reforms in last year's BIA to protect consumers when they deal with their banks.

Our government has taken concrete action with Bill C-86 to strengthen the rights of consumers and better address their interests when they deal with their banks.

Our government also introduced measures to improve the ability of the Financial Consumer Agency of Canada to protect consumers. This legislation received royal assent in December 2018, and included 60 new or enhanced measures to protect bank customers.

These measures include requiring banks to have policies in place to ensure that consumers receive products and services that are appropriate to their situation; requiring banks to notify consumers who might incur fees and inform them of steps they can take to avoid those fees; creating a new prohibition against presenting misleading information to consumers; and creating a new prohibition against exerting undue pressure on consumers when selling products or services.

These measures reflect best practices in the provinces and international jurisdictions, and represent the most significant change to financial consumer protection in Canada since the creation of the FCAC in 2001.

Before introducing Bill C-86, the government consulted with stakeholders, including provinces and territories, to develop these measures. I would like to spend some time on this important point.

This bill might not be well received by the provinces and territories, and especially by Quebec. Bill C-419 has not been the subject of much consultation with stakeholders, including the provincial and territorial governments. This is not what happened with Bill C-86, the budget implementation bill, which I was talking about earlier and which was the subject of extensive consultations with the provinces and territories. Consumer protection is an area in which both provincial and territorial governments and the federal government are active.

Several provinces, including Quebec, have comprehensive financial consumer protection rules. Consulting provinces and territories is crucial before introducing new measures to avoid conflict and duplication. The Government of Quebec and the National Assembly have made it very clear that any new federal rules must first be the subject of consultations in order to ensure that they respect provincial jurisdictions and will not have any unintended consequences. This is a lesson that everyone here in the House learned in the early days of this government, including the opposition. I cannot emphasize this point enough. It is very important that there be thorough consultations with the provinces before going ahead with a bill like this. In addition, major stakeholders, such as consumer groups, must be engaged in the process to ensure that there will not be any unintended consequences for consumers.

The list of measures I have described is only one part of what the government is doing to protect Canadians' interests. Let me go into more depth about other measures the government is taking.

The first is the Financial Consumer Agency of Canada's excellent work to raise awareness of credit card and consumer debt issues while also working to improve the financial literacy of Canadians.

The FCAC offers a range of online tools, educational materials and programs intended to help Canadians make informed financial decisions. It also has tools to help consumers understand how credit cards work and how to use them responsibly. For example, the FCAC offers a credit card payment calculator that lets Canadians explore different payment options and see the cost of only making minimum payments.

Beyond credit cards, our government is taking additional action to protect and empower financial consumers. We know that when Canadians have disputes with their banks, they deserve to have access to a resolution process that is fair and impartial. That is why bank consumers can take any complaints they cannot resolve with their banks to an independent body free of charge.

To ensure that the system is meeting Canadians' needs, the Financial Consumer Agency of Canada will conduct a review by June 2019 to assess the banks' complaints handling process and the effectiveness of the external complaints bodies.

In addition, to respond to the unique needs of Canada's aging population, the Financial Consumer Agency of Canada will engage with banks and seniors' groups to create a code of conduct to guide banks in their delivery of services to Canada's seniors. The Minister of Seniors will support this engagement.

Measures the government has taken recently are well-founded and will strengthen financial consumer protection. We are working with our community and industry partners, as well as the provinces and territories.

In conclusion, I would like to reiterate that the Government of Canada is absolutely dedicated to protecting consumers in their dealings with banks and to helping all Canadians achieve and maintain financial well-being by managing money and debt wisely and planning and saving for the future.

Guided by what matters most to Canadians, the government will continue to work to ensure that more Canadians are better off as we grow our economy today and over the long term. Due to the measures already contained in Bill C-86, and the other factors I have mentioned, such as appropriate and informed consultations with the provinces and territories, I recommend that my hon. colleagues oppose Bill C-419.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Madam Speaker, I very much appreciate the opportunity today to rise in this chamber to speak to this private member's bill from my colleague, the member of Parliament for Lethbridge.

I want to reiterate something the hon. member for Calgary Shepard said. I believe that the intention of the member for Lethbridge is to help Canadians get ahead and help Canadians stay ahead. That is something we have not seen the government of the day assist in doing.

I am very proud to stand today to support this piece of legislation.

Unfortunately, not every Canadian has a trust fund, like the Prime Minister. The majority of Canadians, in fact the majority of constituents in Calgary Midnapore, do not have those types of trust funds. As a result, they must rely on their own resources and their own family decision-making to manage their finances, because they simply do not have the resources the Prime Minister has to lean on.

Life is becoming less and less affordable for Canadians. I certainly, as a mother, can say this. When I go grocery shopping, I cannot believe the increase in the cost of groceries I am seeing. Mortgages, of course, are getting more and more difficult to obtain, with the recent stress test, particularly in Calgary, a place where the market is not defined the same way it is in larger cities.

Gas, certainly, has just hit record prices in the last three or four years, as has home heating. I will take this moment to say that I very much support the initiative of our leader in making home heating more affordable for Canadians.

Families like mine sit around the dinner table making difficult decisions. Will they be able to enrol their son or daughter in gymnastics? Will they be able to enrol their son or daughter in hockey? Is there enough money to have meat every day of the week? Probably not. That is because the Liberal government is not helping to make life more affordable for Canadians.

I would also include the carbon tax, the carbon tax that we are seeing many provinces across the country refuting, such as Saskatchewan, of course, where my father is from. Manitoba and Ontario are also refuting the carbon tax.

God willing, I hope that we have a new United Conservative Party government in Alberta on Tuesday, with the previous member for Calgary Midnapore, whose footsteps I am so proud to follow in.

Canadians do not want a life that is more expensive. They want a life that is aspirational and attainable. What they really want is fairness and transparency. Might I add that we are not seeing this at all recently from the government of the day. However, this credit card fairness act would promote these principles. I will review them once again.

Number one, the credit card fairness act would mandate that if a cardholder paid more than 95% of the outstanding balance before the payment due date, the bank could not charge interest on the amount paid on or before the due date. The bank could only charge interest on the amount outstanding after the due date.

Number two, it would ensure that payments made by cardholders were applied to balances with the highest interest rate first, before being applied to balances at a lower interest rate.

Number three, it would require banks to disclose on the monthly statement how much interest the cardholder had paid in the previous 12 months.

Number four, it would require that marketing materials prominently communicate the annual fee, the annual interest rate and the period of time until the introductory rate ended, along with the interest rate that would apply following that period.

Number five, it would prohibit banks from increasing interest rates retroactively on the cardholder's outstanding balance owing.

Number six, it would require banks to provide an online mechanism for consumers to cancel their credit cards and/or decrease their credit limit. As my colleague, the hon. member for Calgary Shepard, mentioned, it is not uncommon to receive a notice in the mail that one's credit limit has been increased.

Number seven, it would legislate that banks must obtain consent before increasing a cardholder's credit limit. As I said, this is something that would promote better financial management by families across Canada.

Families need to have full information when making financial decisions. I need not remind anyone that household debt at present is 170% of disposable income. That means that most Canadians owe $1.70 for every $1 in after-tax earnings, for a total of $1.83 trillion of household debt, which is incredible, or an average of $22,800 per Canadian. I really believe that the member for Lethbridge is making this sincere and humble attempt to help families across Canada as they face difficult decisions in this financial crisis, which as I said is not being assisted by the government of the day, as they make their financial decisions.

Every family in Canada goes through the process of making these decisions, such as home renovations. Many homes in Calgary come with undeveloped basements and this is a significant investment if families decide to renovate their homes. A new car is another significant investment, as well as vacations. These are all difficult decisions that Canadian families have to make relative to their finances. The member of Parliament for Lethbridge is trying to help these families manage their finances.

I will mention what a fan I am of financial literacy for Canadians. I want to recognize a special constituent of mine, Shamez Kassam, who is a financial planner in my riding. He has an annual financial planning summit for women, at which I have twice now been the keynote speaker, and that is another reason I support this piece of legislation. I believe in financial literacy for women because women, wives and mothers, are a major part of running finances within our families. I definitely believe that the member for Lethbridge would help families with this legislation.

We all know that people need a credit card to do anything and everything in this day and age, such as booking a hotel, booking a flight or going on vacation. In fact, today I used my credit card to make a payment for my son's birthday party. We are going to a Roughnecks game. I am really looking forward to that at the end of April. I receive the Calgary Sun newspaper every day on my front porch. I look forward to reading my horoscope and the news. This goes on my credit card. Again I applaud the hon. member for Lethbridge for putting forward this legislation.

My colleague, the member for Aurora—Oak Ridges—Richmond Hill, pointed out that previously the government had the position of a minister of consumer and corporate affairs. Unfortunately, under the Liberal government of Jean Chrétien, that position was eliminated. In the absence of the previous checks and balances we had, we need to give Canadian families the power to have more knowledge and information when making these complicated financial decisions. As I stated, we want to help Canadians get ahead and stay ahead.

As I mentioned previously, the Liberal government is not helping. We had the fourth consecutive deficit budget, adding to the debt. My son, at this point, will be 32 years old when the budget is balanced. That is absolutely terrible. I have said if financial planners need a new product, it should be the RDSP, the registered debt savings plan, so that all youth will have the money to pay off their debt eventually.

I hope the government will do the right thing. We are an aspirational nation. On this side of the House, we are a party that wants Canadians to live their dreams and that happens by having more information and more control over their finances. I urge the government to vote for this bill that would help Canadians get ahead and stay ahead. It is the right thing to do.

[The Assistant Deputy Speaker, NDP, Carol Hughes]

The hon. member for Lethbridge has five minutes for her right of reply.

[Rachael Thomas, Conservative, Lethbridge, AB]

Madam Speaker, I want to correct the record. Earlier, the parliamentary secretary said that this bill may “confuse“ or “harm” Canadians. I find it very interesting that it would confuse Canadians or cause harm to Canadians when it has seven measures within it that would protect them and advocate for the right of fairness and transparency. Only Liberal logic would say that fairness and transparency somehow would confuse or harm Canadians. It is very interesting.

Nevertheless, the bill before the House today is my private members' bill, Bill C-419, which is the credit card fairness act. In the legislation, I propose seven changes that would advocate on behalf of Canadian consumers.

The reason I am proposing this is because people from across the country have told me they are struggling to make ends meet and that one of the things that could be done to assist them would be an increase in the fairness and transparency that surround credit cards so they could make better and more informed decisions with regard to credit card use.

I understand this would not solve all the problems, and it certainly would not. People have to take personal responsibility for their spending habits. However, fairness and transparency are noble principles to which we should hold banks accountable. Government officials advocate on behalf of Canadian consumers.

This is the bill that is being proposed to Parliament, and it is important for a couple of reasons.

First, nearly every person in Canada has a credit card. We use it for Amazon purchases, or Uber rides or to book a plane ticket or a hotel room. It is a necessity to get by in our modern Canadian life.

The other reason this is so important is because consumers deserve transparency and to be treated with fairness. At the end of the day, it is difficult when people are dealing with something as complex as the Bank Act to represent themselves as a consumer or advocate for change. Therefore, consumers rely on government officials, those in the House, to advocate on their behalf when they find themselves in a tight situation where it is difficult for them to create change on their own initiative.

It is right for governments to insist that banks be fair and transparent. It is right because these banks hold people's money and therefore hold a lot of power. Those of us in the House have the responsibility to push back on that and to ensure they abide by the laws.

I will very briefly outline the seven reforms within the legislation.

First, when people make payments on their credit cards, and let us say they do not pay it off quite in full but pay 95% or more, it would mean they would not be expected to pay interest on the entire bill, but only on the amount outstanding. Right now, that is not the case. For example, if a person has a bill for $1,000 and pays off $999, that person would expect to pay interest only on the $1 that is outstanding. That seems quite reasonable. Most Canadians I talk to think that is the way things are, but it is not.

In fact, many people in the House think that is the way things are. It is not. Instead, if a person pays $999 off a credit bill, that person pays interest on the entire original $1,000 and not the $1 that is outstanding. Let us be very clear there, let us make some changes and make it more fair.

Second, if a cardholder has a high-interest debt and a low-interest debt, it would be reasonable for the amount that the cardholder pays on the bill to be applied to the highest interest first. Right now, banks take advantage of that a bit and like to put it toward the lower amount, which helps them collect further money. That is unfair. I want to advocate on behalf of the consumers, so I believe 100% of their payment should go toward the highest interest first.

Third, the bill would also require banks to disclose the amount of interest cardholders pay on their monthly statements.

Fourth, it would require advertisements and marketing materials to properly display all the information in bold print, not fine print.

Fifth, it would also prohibit credit card companies from increasing interest rates retroactively; in other words, on money already spent. That seems fair.

Sixth, it would require credit card companies to provide an online mechanism by which people could cancel their credit cards. This is also fair.

Seventh, the bill would legislate that credit card companies could not automatically increase a cardholder's limit, which is very important for consumer protection.

I would ask for the support of the House to bring fairness and transparency to credit card consumers.

[The Acting Speaker, NDP, Carol Hughes]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

No.