Finance Committee on Oct. 19th, 2017

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

That's okay. Congratulations on the success you've had. It's really impressive. As I said, I'm familiar with it also in the schools.

My question is in regard to your second point in terms of the digital programming of your growth. You talked about reaching out to more rural and remote communities. I'm just curious about what your plan would be when it's usually our rural and remote communities that have limited access to broadband and things like that. Is it working with specific schools digitally, or what does that encompass?

[Tovah Barocas]

It can be different depending on the region. We took a trip to Iqaluit last September and did our school programs in all of the schools in that and the Ajax area. While there, we had some really interesting meetings with the local government, and also the Nunavut Teachers' Association, around the fact that cost is a barrier to be able to travel there every year, and also to be able to go to Rankin Inlet and some of the other bases in Nunavut. How can we work with teacher training, visiting teacher conferences, on providing resources through data keys and other opportunities? There's a program that Cisco has where they put screens in schools that you can communicate with from major centres, so we've been speaking with them. There are a number of ways you can go about it.

We also feel that the school programs are really geared toward getting the kids excited. They're educational, but more than that, they're inspirational. The objective is that at the end of the program, when we ask who wants to be an Earth Ranger, every hand goes up, and then they can go home and engage long term with their families. That way, we don't have to travel to every city and community every year, which is cost-prohibitive, and the engagement and learning can continue at home online. Expanding those programs will allow us to have an ongoing relationship with kids all across the country without having to physically be there.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

The overall ask I heard was $6 million over three years. You hope to grow your membership—if I wrote this correctly—to over 300,000 members. What constitutes a member? It's sounding like you're reaching a lot of people, kids in particular. How do you determine that? As I said, $6 million is not an insignificant ask, especially if the goal is to reach 300,000 people, and I'm assuming you're actually reaching more, but what constitutes a member versus how many kids or communities you'll reach out to?

[Tovah Barocas]

A member is defined as a child who has gone on to earthrangers.com, filled out a full contact form, received parental permission, and then actually been sent a membership card with their name on it and a welcome package in the mail. They have then logged into their account numerous times to actually accept missions that are sustainable behaviours and to participate in fundraising campaigns, so they really are defined as an engaged group of people who are acting with the organization on an ongoing basis.

Then we have kind of a sub-level of kids whom we know we've reached and impacted in some way. For example, I was coming home from an Earth Rangers event and stopped at Loblaws on my way home. The girl at the checkout counter saw my shirt and remembered us in her school and the assembly from six or seven years ago. She never joined, but it impacted her in some way.

You're right that the reach is a lot more extensive than 300,000, but the 300,000 is defined as families that have signed up.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Thank you.

Mr. Chera, one of your comments early on in your presentation was somewhat interesting to me. You said that you were repeating something one of your members said about the collection of tax and how you don't even get paid for it. Are you suggesting that your convenience stores and convenience store members don't mark up their products and don't make any profits on any of the goods they're selling?

[Satinder Chera]

No, I was simply making an observation about the fact that they collect $22 billion in taxes for which they don't get paid and that it's important for governments to recognize the important role that convenience stores do play in helping to provide that revenue.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Right. Then when you were responding to my colleague Mr. Albas' question in terms of the technologies and the growth, you said that other countries are doing it. In the U.S. they don't have the chip technology in most places, so they're not even quite at a tap of the card there. Are you saying that Australia has chip and tap technology?

[Satinder Chera]

My comment was that they've invested in technology in other jurisdictions as well. If that's the argument that is being advanced for why they can't do it here, then we would argue that they should show us the evidence of why they can't do it here.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

My question is that you said they're doing that in other places, but if they're not...because part of the technology, to my understanding, is that the technology has to have the security so that if a consumer uses a credit card, it's secure, and we're not dealing with fraud. In a lot of jurisdictions, for example the U.S., that don't have the more secure transactions, they actually are paying more because there's a greater risk.

In response to your question, you talked about jurisdictions that are doing it and offering it cheaper. Do Australia or the other jurisdictions that are cheaper have chip and tap technology?

[Satinder Chera]

I'm not specifically aware of that, no.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Okay. In terms of the marketing, are you also suggesting that legislation moving forward to deal with the marketing of products to children will be handled in the same way as controlled substances to children? Children can't smoke cigarettes. They can't drink alcohol. You're suggesting that the marketing of chocolate bars will be handled in the same way as controlled substances. That's your take on that legislation.

[Satinder Chera]

No. In fact, I'm just making the observation that we don't know what—

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

But you think that realistically that's a reasonable line—controlled substances and marketing to children of chocolate bars or cereal.

[Satinder Chera]

No. We've been very clear that in terms of controlled substances, the rules are very clear, and we support the government's initiatives to ensure that they don't fall into the hands of minors.

With respect to Bill S-228, my observation is this: what impact will it have on retailers? It's an obvious question. We're just making the observation that we don't know to date if there will be any implications for employees. That's the question we've received from our members, and it's one that we've asked the government.

[Jennifer O'Connell, Liberal, Pickering—Uxbridge, ON]

Right, but you think it's a reasonable correlation to say that how minors are able to sell or work in places that have controlled substances to minors.... You think it's a reasonable correlation to suggest that aggressive marketing of products to children is the same thing as controlled substances.

[Satinder Chera]

No. In fact, what I'm saying is that with respect to Bill S-228 and the marketing to kids review, we certainly have not been advised on what impact this would have at the retail location. The legislation is pretty broad, so we're just asking the question: if this is where the government will be going, what implications will it have?

[The Chair, Liberal, Wayne Easter]

We'll have to end it there.

Mr. Kmiec is next.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Mr. Chair, I'm going to continue the line of questioning.

There's just one point I wanted to make. When you're talking about your members collecting taxes on behalf of the government, GST/HST is included, and then your members remit that back to the government. I think that may be what you're referring to.

I want to talk about the credit card fees, because at one point you said “hard cap”. Did you mean to say a hard cap on credit card fees?

[Satinder Chera]

Yes. For example, if you look at Australia or the European Union, they have limits in place, at 0.5% or 0.3%.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

One of the bills before the House is from one of our Liberal member colleagues. Linda Lapointe has proposed one under which the cabinet would basically be able to decide what type of credit card fees would be acceptable. Do you support that? Does your membership support that?

[Satinder Chera]

Ms. Lapointe is someone whom we consider a friend to the convenience channel. She raised an issue that frankly, from our members' perspective, no one was really trying to address. We certainly don't understand why they can have caps in other jurisdictions and not in Canada. Again, if there are legitimate reasons why that can't happen, we would certainly welcome that dialogue. To date, we haven't received any information on it.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Just generally, I'm opposed to giving the government even more control over different areas of the economy. You have 26,000 members. Walmart took on Visa and won eventually. You have 26,000 members. You have an ability to negotiate directly with the companies. The Canadian Chamber of Commerce has done so through First Data. They get preferential rates for their membership as part of the group benefits they provide, Interac payments and cheaper credit card payments. Why isn't your association able to leverage your membership base to negotiate with Visa and Mastercard on behalf of your members to provide a member benefit like the chamber network does?

[Satinder Chera]

We really haven't had much interaction with the credit card companies, period. Through the Small Business Matters coalition, of which we are members, we have reached out to them to get information. We haven't really had much of what I would call a receptive audience. I know there are some organizations out there that have gone and negotiated. We know these fees cost businesses a lot. The Competition Bureau has looked at this issue and put a number of $5 billion on it.

We want to know why the credit card companies can't bring these rates down. In fact, under the code of conduct, they made specific commitments to doing an audit and releasing the results of that audit. We haven't seen any of that evidence. It's natural to ask if they are simply skating around the rules. If they are, then we have to ask what the government can do, because this is definitely a concern.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

I compare Canada a bit to Singapore. I travelled in Hungary and they have a POS system, or point of sale. There is tap in places like Budapest, so I assume it has to be there in many other jurisdictions. It's the machine itself. I've been told the problem isn't always with the rate, but it's the contracts that are signed between the merchants and the credit card companies that don't allow them to say things like, “If you don't use that card but you use Interac instead, I'll give you a better deal” or whatever.

Is that the case? Is that happening in the marketplace?

[Satinder Chera]

Our members have to accept whatever form of payment the customer is providing. If they don't, the customer will just take their business somewhere else.

With credit card fees, they have next to no ability.... They can't understand why rates are so high and why they can't come down. They've certainly heard that the federal government has tried to address this issue. Certainly the code of conduct was a step in the right direction, but since then, there hasn't been much in the way of rates coming down. Certainly that's been the feedback we've received from our members, which is why we've gone on record as saying that if you can't bring those rates down the way they have been lowered in other jurisdictions, explain why. There may be other options that we can take a look at.

Until we have that open conversation, which we haven't had to date, we're left to think that maybe the government should do what they've done in other jurisdictions.