Thank you. I have nothing further.
Evidence of meeting #76 for Finance in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was banks.
A recording is available from Parliament.
Evidence of meeting #76 for Finance in the 39th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was banks.
A recording is available from Parliament.
Conservative
Conservative
Liberal
Robert Thibault Liberal West Nova, NS
Merci. I'll make just a couple of points and then put one question.
One is on the question of the use of fees to attract customers. If I go to a consumer cooperative and buy products and am not a member, I'm going to pay more at the end of the year than somebody who's a member, so I could look at that as a fee. That fee isn't based on their marginal cost of providing me service; it's a method that's used to encourage me to join their cooperative. I think we find that to be generally acceptable. So to say that the fees instituted for servicing somebody who isn't necessarily your customer have to be at the marginal cost of giving the person that service.... I don't know that this should apply; I don't know that it's a logical argument to make.
The question of gouging is important. That question is whether a consumer who doesn't have a choice but to deal with you, and you're gouging them.... That, I think, is good.
As for Mr. Conacher and pointing to the U.S. banking system, I think a lot of consumers of the banking system in the U.S. look to Canada for inspiration. In the service we have in Canada from our banking systems, credit unions, chartered banks, and other services, and our electronic transfer capabilities from coast to coast and internationally, I think we're quite well served in comparison with the United States, and many would agree.
Now I want to get to the fees. I've seen, in my personal experience, getting access for zero per transaction; I've seen paying $1 and $1.50 per transaction. I understand that in restaurants or bars or casinos or late-night activities people have paid $2.50 or $3 per transaction. I've never heard of the $6 charge that Madam Wasylycia-Leis points out.
Is there an example of people, communities, being forced to use Interac machines or ATM machines without competition at that level of charges? Does that exist in our country?
Perhaps I'll ask Mr. O'Connell and Mr. Trigg to respond.
President and Chief Executive Officer, Interac Association
Personally I've never seen them myself, either. I think you're right that it depends on the premises. If you talk to a white label operator, they will say each set of premises has a different business case for the machine. At some machines you have 200 to 300 transactions per month, but those transactions are valued by those consumers who frequent those premises.
So I have not seen that type of fee structure, but I can't comment across the board, because Interac neither deploys nor operates ABMs.
Conservative
The Chair Conservative Brian Pallister
Let me interject for greater clarification. You alluded earlier—or Mr. Trigg, I believe you did—to three levels of charges: an interchange fee, which institutions pay; a service charge, which customers pay; a surcharge as well, which customers pay, on white label machines. Adding those together, do you get anywhere near $6? Is that what this is about?
President, The Exchange Network (FICANEX)
No, I don't believe so. Of course, in the Exchange, we don't surcharge. As a consumer, I can tell you that I've never seen that kind of fee.
What we need to be careful of.... I think the word used in the question was “forced”. It seems unlikely to me that somebody would be forced to pay the $6 fee. If the only reason the ATM is there is that it can only afford to be there at a $6 fee, then I suppose to that extent you're forced. But if the option were paying $6 or not having a machine to use, maybe that's the question. It is just straight economics—
Conservative
The Chair Conservative Brian Pallister
Or taking a cab 25 minutes to a nearby community, or some such thing.
President, The Exchange Network (FICANEX)
Well, that may be your only other option if there's no machine there at all. I'm not suggesting I support $6 fees, because we don't support fees at all in the network.
Conservative
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
Mr. Chair, my point of order is just so you know that the numbers I've been citing have come from the government's own agency, the Financial Consumer Agency of Canada, which has the full range of charges for every type of transaction. The $6.15 is the maximum charge that could be possible for a private operator. It would involve the regular account fee, the Interac fee, the convenience fee—the total transaction fee.
Yes, that's exactly my point.
Conservative
The Chair Conservative Brian Pallister
Thank you for that. That wasn't a point of order, but it was informative.
Mr. Thibault.
Liberal
Robert Thibault Liberal West Nova, NS
That's a possibility that could be, if everything aligned properly. But Mr. O'Connell, do you have knowledge of people paying above $3 per transaction on a regular basis? Is that a common occurrence? Are those fees out there?
President and Chief Executive Officer, Interac Association
On the surcharge fee, no.
I think the relevant point is that what we're talking about here is the element of being “forced”. As I mentioned, consumers are increasingly voting with their feet, and that's indicative of a competitive market. They are going to cash-back—64% of our customer are using cash-back—and they are using Interac direct payment to purchase goods directly without using cash at an increasing amount year over year.
We've processed over 3.6 billion debit transactions, and that's why we have shared cash transactions going from 375 million in 2001 to 285 million last year. Again, it's indicative of a competitive environment monitoring and regulating itself, as it should be.
Conservative
The Chair Conservative Brian Pallister
Merci beaucoup, monsieur.
For the committee members, before we adjourn, Thursday's meeting will go from 11 a.m. until 2 p.m., continuing with the ATM discussion. Next Tuesday we'll deal with the estimates from Finance.
I thank all our witnesses very much for their patience today with the unusual nature of our incoherent hearings. We do appreciate very much the preparation of your reports and your participation.
We're adjourned.