Thank you, Chair. Thank you to the committee for having me.
My name is Jessica Oliver. I'm head of government relations at Wealthsimple, a financial services company headquartered in Toronto and serving more than three million Canadians. One in five Canadians 18 to 40 years of age are Wealthsimple clients.
We believe Canadians deserve better and simpler financial services. Our products range from investing and trading to free or “pay what you want” tax filing and, more recently, a no-fee chequing account, which offers 4% interest on cash balances, accrued daily, with no strings attached.
A remote-first company, I'm one of about 1,000 employees spread across nine provinces from coast to coast to coast. We're reaching clients in new ways and in underserved segments. Wealthsimple's low-fee group retirement savings plan serves small and medium-sized businesses, 96% of which did not offer any workplace retirement savings before working with us. Since launching our first home savings account in August, we've opened an average of 1,000 FHSAs each day.
Innovation will get you only so far, though, when the infrastructure underpinning financial transactions in Canada is out of date. Access to it is so unequal as to prevent true competition. It's a problem for companies like ours, but it's a much bigger problem for Canadians, who pay some of the world's highest banking fees for outdated and inadequate service.
Last week you heard from Fintechs Canada on open banking, and we fully support their comments on its benefits.
Our submission focuses on a second enabling project, the real-time rail, or RTR. Canada is [Technical difficulty—Editor] country without a true RTR. More than 70 countries worldwide are reaping the benefits of real-time payments. The Centre for Economics and Business Research estimates that by 2026, the world's five largest RTR markets will generate an additional $150 billion in GDP as a result of real-time payments.
Our recommendations call for the implementation of Canada's RTR as soon as possible, and for three features critical to its success. The first is the 24/7/365 settlement, which is an end to the Monday to Friday nine-to-five restrictions.
The second is fair and transparent pricing, where all qualified participants pay the same rate per transaction, regardless of size.
The third is leadership to ensure provincial and municipal governments are prepared to use the RTR and realize savings from day one, including savings identified by Public Services and Procurement Canada on the opportunity to phase out physical cheques, particularly related to distributing emergency relief funds.
Though certain payments in Canada might feel instant, settlement delays behind the scenes make it impossible for Canadians, businesses and governments to manage their finances efficiently.
Consider a student beginning their studies at the Université du Québec. Their first tuition installment is due on the same day as payday. Every Canadian university's website states clearly that payments received after the deadline may be subject to late payment fees. Students have to anticipate a delay of two to five working days before the payment is received.
This common, ubiquitous warning to plan for two to five days for settlement is a solid indication that questions and concerns around settlement timing and the corresponding fees have been raised a few times.
When a student initiates a payment to a university, it disappears from their account immediately, into the ether, until it settles at some unknown point. The student could risk a late-payment fee or may have to access a payday loan to bridge the gap. There are countless examples affecting small businesses, particularly those with just-in-time supply chains, households, non-profits, governments and government agencies.
Last week, RBC's financial well-being survey found that 48% of Canadians and 63% of millennials said that stressing about money is impacting their mental health. These are real problems affecting real Canadians that the RTR would meaningfully address.
The federal government has supported the development of the RTR since 2015 and given Payments Canada a mandate to build an RTR that promotes fair and open access, enables competition and innovation, fosters fair and transparent pricing, implements appropriate risk controls and considers end-user interests. These are the right policy objectives and must not be compromised. On this, the government has our full support.
I have one final clarification. The stability of Canada's banking system is, appropriately, a great source of pride. However, the absence of modern payment infrastructure that is treated as a public utility and economic enabler, akin to a highway or broadband Internet, has nothing to do with the liquidity or integrity of our banks.
To the best of my knowledge, the RTR has support across all party lines. My hope today is to find advocates across all party lines as well.
Thank you.