Evidence of meeting #77 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.
Executive Vice-President and Head of Domestic Personal Banking, Senior Executive Office - Domestic Personal Banking, Bank of Nova Scotia
They're shown on the screen. They have a choice to make that payment or they can go elsewhere.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
If I had a bank--I don't, I go to a credit union--and I was accessing my bank's ATM, it's not going to tell me that my bank might be charging me $1.50 if I don't have one of those packages. So you aren't fully transparent.
We had a motion before this committee to ask you to disclose all your fees, and the committee defeated it. I'm on my own, and I know that, but I know there are lots of Canadians who support basic knowledge.
Will you disclose the costs of each transaction? Will each of the bank representatives here disclose that? Will you give this committee that information: the cost per transaction, the fees you charge for everything, and your profit margin? Will each of you do that?
Will you do that, Mr. Hudon?
Senior Executive Vice-President, Personal and Commercial Banking Canada, BMO Bank of Montreal
I'd be very happy to make sure that you have what our customers pay, as it is available to them. Absolutely.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
So you're not prepared to give us the cost, and you're not prepared....
Okay, Mr. Hodgson, are you prepared to give us those three things: the fees, the costs, and the profit margin?
Executive Vice-President and Head of Domestic Personal Banking, Senior Executive Office - Domestic Personal Banking, Bank of Nova Scotia
For proprietary reasons, no.
Judy Wasylycia-Leis NDP Winnipeg North, MB
No? Okay.
Mr. Hockey, you're not.
Ms. Sonia Baxendale, are you prepared to give that?
Senior Executive Vice-President, Retail Markets, Canadian Imperial Bank of Commerce
I think we're very transparent on the costs.
NDP
Senior Executive Vice-President, Retail Markets, Canadian Imperial Bank of Commerce
We'll give you parts of the information, but—
Group Head, Canadian Banking, Royal Bank of Canada
I hesitate to ask you to repeat the question.
NDP
Judy Wasylycia-Leis NDP Winnipeg North, MB
That's all right, as long as it doesn't take time off my time.
Conservative
The Chair Conservative Brian Pallister
I'll exercise a bit of discretion here and pose a couple of questions.
First of all, by the law of unintended consequences, which certainly exists here, if we, for lack of a better phrase, nationalize ATMs, what we will do as a consequence is a number of things. We would—
Liberal
Robert Thibault Liberal West Nova, NS
On a point of order, Mr. Chair, respectfully, I recognize your—
Conservative
Liberal
Robert Thibault Liberal West Nova, NS
I have to catch a flight, and I have to leave in 10 minutes. I would like to get my question—
Conservative
The Chair Conservative Brian Pallister
Well, you may.
Now, in respect of the ATM issue, as far as fees are concerned, if we eliminate fees charged for ATM use, as is proposed by Madam Wasylycia-Leis' bill, we would then very likely eliminate, or greatly limit, the use of white label machines in the country. Is that a fair observation?
If there were no fees whatsoever to be charged for the use of bank machines, wouldn't that discourage the use of white label machines? Wouldn't it reduce the profitability to be derived from the presence of white label machines? Wouldn't it result in the loss of service to Canadians in areas such as my riding and others where there is not a plethora of options in rural communities--for example, where a white label machine might be available now, and it might not be available in the future?
Is that a fair observation, Mr. Hodgson?
Executive Vice-President and Head of Domestic Personal Banking, Senior Executive Office - Domestic Personal Banking, Bank of Nova Scotia
Yes, yes, and yes.
Conservative
The Chair Conservative Brian Pallister
Okay. I think that should concern members of the committee who are concerned with access to these services.
Of course when there were no such machines, there were no fees. I think that would be a fair point to make as well. Canadians didn't have the advantage a number of years ago of having ATMs. So any regulation this committee might recommend that would reduce the availability of such machines under the guise of reducing fees should consider that if there were no machines at all, there would be no fees.
However, I am interested in the level of the fees. The substitution effect that other witnesses have testified to, I think, is probably a reality. I want some comment on it. Witnesses have testified to the fact that there is a non-client charge--that the vast majority of users pay no fee, but some do pay a fee. Would the consequence of free access to the network result in an erosive effect on your client base? Is this part of the rationale of maintaining a fee for non-client use?
Mr. Hockey.
Co-Chair, TD Canada Trust, Toronto Dominion Bank
I would say that's exactly one of the considerations we all take when planning our network. When we say “network”, it's not necessarily just the network of ABMs that we provide. Some, as you've heard, have larger ABM networks than others. The key decision in retail banking is what areas you decide to invest in, whether it be ABMs or branches, and how long those branches are open.
So the decision to make it no cost for a non-bank customer to use our proprietary network would absolutely have effects on our bank strategy. It could change very much how we compete against each other.