Industry Committee on Oct. 7th, 2024

[Jay Dorey]

Thank you for the question. That is absolutely correct—

[Chandra Arya, Liberal, Nepean, ON]

Did you mention that?

[Jay Dorey]

I believe I did, but if not, I'll be happy to clarify.

[Chandra Arya, Liberal, Nepean, ON]

Maybe I missed it. Maybe I'll go through your notes again later.

Mr. Hannah, the words you used were “tangible...rewards”, and Mr. Ahluwalia, you said, “great value”, etc.

Nothing is free...right?

[Darren Hannah]

That is correct.

[Chandra Arya, Liberal, Nepean, ON]

I will come to it. Is it free, that “great value”? Are we not paying for it?

[Balinder Ahluwalia]

I'm sorry, but I don't understand the question.

[Chandra Arya, Liberal, Nepean, ON]

You said there's a great deal of value that is being provided.

[Balinder Ahluwalia]

That's right.

[Chandra Arya, Liberal, Nepean, ON]

I'm asking if it is free. Are we not paying for it?

[Balinder Ahluwalia]

That's a great question for our CBA partners.

[Chandra Arya, Liberal, Nepean, ON]

You did use the words “great value”. I want to know if the great deal of value you mentioned.... It is not free. Is that correct?

[Balinder Ahluwalia]

Somebody's paying for it. That's correct.

[Chandra Arya, Liberal, Nepean, ON]

Absolutely. That's what I meant.

Mr. Hannah, I'd like to come back to you.

Mr. Littler of the Retail Council of Canada gave some numbers. In fact, I was surprised to hear the numbers $60 billion and $643 per family. Do you agree with those numbers?

[Darren Hannah]

Let's contextualize this for a minute, because I think it's important.

First off, rewards cards generate tangible rewards, and they do it across the income spectrum. Eighty-nine per cent of Canadians have a credit card—

[Chandra Arya, Liberal, Nepean, ON]

I know—

[Darren Hannah]

—and 85% of those are rewards cards. As a consequence, the rewards are being utilized and the beneficiaries are across the income spectrum.

[Chandra Arya, Liberal, Nepean, ON]

That was not my question. My question was whether Mr. Littler was misleading us. Were the numbers correct?

[Darren Hannah]

What he's not telling you is that in markets where.... What Mr. Littler is suggesting is that, if value were moved from you, as a credit card holder, in the form of rewards over to a merchant, somehow prices would go down and the merchant would be better off.

We have not seen that in other markets. What we have seen is that rewards have gone down, annual fees have gone up and there has been no discernible reduction in prices. Quite frankly, in the current—

[Chandra Arya, Liberal, Nepean, ON]

I'm sorry to interrupt you, but I have limited time and I have a few more questions.

Say I don't want the rewards points. I'm still paying for them. Is that correct?

[Darren Hannah]

You can choose what kind of card you want. You can choose a rewards-based card or you can choose a card without rewards.

[Chandra Arya, Liberal, Nepean, ON]

Will that interchange rate vary based on the card I use?

[Darren Hannah]

No. The annual fee may vary and the interest rate may vary.

[Chandra Arya, Liberal, Nepean, ON]

I'm talking about the interchange rate. Does it vary based on what card I choose?

[Darren Hannah]

Oh, yes. There's some slight variation, but I'll let the networks tell you more specifically about how interchange works, as that's their area.