Evidence of meeting #7 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was federal.
A video is available from Parliament.
1:50 p.m.
NDP
Murray Rankin NDP Victoria, BC
You talked about a Canadian responsibility, and I salute you for taking that position.
But I just don't see where the federal government is going with this file. If your data are right and there is going to be a drop-off of $1.7 billion—and it gets much worse, as you point out, between 2014 and 2017—where is the recognition of the Canadian responsibility that you talked about? There is something going on here.
1:50 p.m.
First Vice-President, Mayor of the City of Fredericton, Federation of Canadian Municipalities
There has to be a recognition of that responsibility, and that's precisely why the Federation of Canadian Municipalities has put this issue on the front burner.
1:50 p.m.
NDP
Murray Rankin NDP Victoria, BC
I respect as well that you talked about Housing First today and I salute that. The federal government deserves credit for this, because Housing First is where treatment is not demanded as a condition of housing. There have been studies done by the federal government of five places, with 2,000 people involved, and there now seems to be a recognition that this is part of the toolkit. I think you referred to it as something that's critically important as well.
1:55 p.m.
First Vice-President, Mayor of the City of Fredericton, Federation of Canadian Municipalities
It is.
1:55 p.m.
NDP
Murray Rankin NDP Victoria, BC
Okay, great.
Mr. Scholten, I want to give you an opportunity to expand on my colleague Mr. Lapointe's question to you. You talked about excessive credit card fees and about how they are really crippling the convenience stores. You said that the industry lost $254 million and yet that the credit card companies were getting $850 million through these fees. You were disappointed that the Competition Tribunal, I think you said, didn't take up the challenge, and yet we've heard of a kind of advertising or awareness campaign by the federal government, acknowledged in the throne speech. I think you indicated that this didn't seem to be enough for your members.
What do you think has to be done? What are you specifically recommending to deal with this serious problem?
1:55 p.m.
President, Canadian Convenience Stores Association
That's a good question. Thank you.
Our association believes that what is absolutely necessary is to review why credit card fees in Canada are so expensive. This has been done in other countries. Australia is probably the best example. There they studied the issue over a three-year period, determined that the rates being charged by the credit card companies were excessive, and capped those rates, recommending a review I think every four years to make sure that the credit card companies were still making enough to be a viable transaction option.
Not to cloud the issue, credit cards are a very important means of transaction for our industry. They speed up processing times; they are absolutely important for consumers who don't have money with them right then and there. At the same time, we believe that this advantage is not equivalent to the fees that we pay, so I think something has to be done to address these fees.
1:55 p.m.
Conservative
The Chair Conservative James Rajotte
Okay, thank you.
Thank you very much, Mr. Rankin.
Colleagues, I know there are two more government rounds, but we have about five minutes remaining. I have three government members who've indicated they have questions, so be as brief as possible.
Mr. Van Kesteren, go ahead.
1:55 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Thank you, Chair.
I want to make a brief statement.
Mr. Woodside, I agree with you wholeheartedly. I think it's important that we work together, and we have demonstrated that, and that's getting much better.
I have one area of concern—and I don't expect an answer, and possibly we can talk quickly about it afterwards—and that is the rising cost of pensions. Are you addressing that?
You see the “train wreck”, I'm calling it. A city the size of London, for instance, will have an obligation of $41 million for its top 10 wage earners. It's great for the money to come in from the feds and from the province, but that’s an area you really have to address. I hope you are doing so and that we possibly can have a quick discussion.
1:55 p.m.
First Vice-President, Mayor of the City of Fredericton, Federation of Canadian Municipalities
Well, I can tell you that my community is, for sure. I can tell you that our province is, and most jurisdictions across the country are. Pensions are not sustainable as they stand right now, and they have to be dealt with.
1:55 p.m.
Conservative
1:55 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Thank you very much.
I want to let you know about the government in Australia, which I believe brought in a cap on credit card fees. They also brought in a carbon tax, which they just got rid of a couple days ago, so I wouldn't be surprised if the credit-card capping goes with it soon.
Now, I own retail businesses and have for 30 years. My credit card fees are 1.8% because I joined the chamber of commerce in Fort McMurray and they get me a 1.8% rate for Visa and 3.6% for American Express. It's the cost of business.
I understand there is a cost for convenience stores. You have an association. Why don't you go out and negotiate with these credit card companies to get better fees, or encourage them to join organizations such as the chamber?
We're talking 1.8%, in essence. I know that other buying groups charge about 1.2%. The truth is, that's $1 or $1.20 or $1.80 for every $100 purchased. Doesn't that seem like a fairly competitive situation if you have a clearing house, for instance, that is competitive. That is one question on which I would agree with you. Consumers want more and more treats from their credit card companies and somebody has to pay for those. We know that credit card companies are not going to pay for those. So who's going to end up paying? It's the merchants. And that is part of the attraction for them to do so.
Wouldn't you agree with that synopsis?
1:55 p.m.
President, Canadian Convenience Stores Association
Absolutely, I acknowledge the logic in that. The problem is that I don't believe an awareness campaign is going to dissuade consumers from using credit cards. They're hooked on those loyalty programs.
1:55 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
But isn't it true that the consumers are driving the use of credit cards?
1:55 p.m.
President, Canadian Convenience Stores Association
That’s absolutely correct.
1:55 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
How do you control that? All you can do is educate them. The truth is that if you cap the fees, it's going to cost consumers somewhere else for that cap. And I see you’re agreeing with me.
2 p.m.
President, Canadian Convenience Stores Association
Well, I would say right now, with the way credit cards are and the fees that merchants pay, all consumers are paying for those fees.
2 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Ultimately, consumers are always going to pay for those fees because your companies won't pay for them. The consumers who purchase will pay, one way or another.
2 p.m.
President, Canadian Convenience Stores Association
What we and our association members are saying is that if credit card fees are reduced, the price of goods and services in our stores will be reduced.
2 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Absolutely. Ultimately, consumers are paying whether the fees are reduced or increased. It's a competitive market, and consumers are ultimately paying. They're going to make the choice on what the best credit card is, what gives them the best reward, and what—
2 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
—what stores to use it at.
I have just a very slim question, if I may.
2 p.m.
Conservative