We have actually been asking the government to reduce these fees to 0.5% for a few years. The European Union has demonstrated in practice that it is possible to do so without automatically destroying the payment system.
It is important to understand that, in Canada, debit card payments use a fixed cost system. The fee charged to the retailer is a single cost, regardless of the quantity purchased or the amount of the bill.
For credit cards, the fee is a percentage. For large transactions, the fee charged to the retailer becomes quite substantial.
For small and medium-sized retailers, who don't really have the leeway to negotiate with the two large credit card providers that we are very familiar with, it's a little difficult to have the negotiating power to reduce those fees.
Large retailers, such as the major U.S. chains, have been able to secure attractive rates over the years. However, this negotiating power is not available to small and medium-sized retailers.
Given that the banking system is federally regulated, there is clearly room to control [technical difficulties] more creatively, and at zero cost to the government. This would still help retailers and purchasers, especially since the fees are imposed on charitable donations.
When a donation is made to any charity in Canada, a percentage of that donation goes into the pockets of credit card providers. In a sense, it is as if a hidden or private tax is attached to the transaction.
Transactions have become much simpler over the years because of the computer and digital systems in place whose costs have probably already been absorbed. So it's hard to understand why we could not have those interchange fees reduced.