Industry Committee on Oct. 7th, 2024

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

I also wanted to talk about network assessment fees. Again, these fees are also set by the credit card companies. We know that the network assessment fee is the fee that the credit card company charges the payment processor per transaction to access the credit card network. If this is too high, it can potentially discourage merchants from accepting credit cards. Is this true?

This is for the credit card companies.

[Karl Littler]

There's a concern, and it's not unique to Canada, that as fees are lowered at one end, they're raised on the other. I don't have chapter and verse on this, but merchants will complain that they've seen some savings in some settings from some of the reductions, particularly the ones in 2015 and 2020, but there's been a proliferation of other fees. That's the concern they have.

However, I don't get as much feedback from members, other than perhaps a bit of frustration with respect to network fees.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Do the credit card companies want to talk about the network assessment fees?

[Jay Dorey]

The network fees that are charged and properly assessed to acquiring banks and payment service providers represent a very small part of the transaction. They're also publicly posted, publicly available, and they've been largely stable for more than a decade.

For Visa, that's 0.09% on a transaction, which is significantly below anything you would see, for example, in the fees that are charged to a merchant by their acquirer, which in fact make up the bulk of the cost for any merchant.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Gaheer. You're well over your allotted time.

I'll now turn it over to Mr. Patzer.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Thank you very much.

Mr. Badawey had a very interesting way of closing his line of questioning with Mastercard. Basically, he insinuated that if they had not given you guys that $49 million, you would have built this project somewhere else.

Is that true?

[Balinder Ahluwalia]

I'm sorry. Can you ask that question again?

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Mr. Badawey, in his last question to you, insinuated that if they did not give you the $49 million you possibly could have built this somewhere else. Is that true?

[Balinder Ahluwalia]

We made a strategic decision to pick Canada and Vancouver for its resources and the richness of the talent pool.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay. Did you put this concept or idea out there to other countries? Did other governments offer you similar amounts of money to build in their countries instead?

[Balinder Ahluwalia]

I'm unaware of the details of that.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

You're unaware of those kinds of details. Okay. All right.

In the press release that was tied to this announcement of you guys receiving the $49 million, it also said that there was $420 million of this project that was eligible for funding. Were there more taxpayer dollars given to Mastercard for this project above and beyond the $49 million?

[Balinder Ahluwalia]

No, I believe it's $49 million.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Only $49 million...so there's nothing else. Even though $420 million was eligible, there was not a penny more than $49 million?

[Balinder Ahluwalia]

That's correct.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay. All right. Thank you very much for that.

Given that your revenue from 2020 to 2023 has increased 67%, do you regret taking $50 million from the taxpayer?

[Balinder Ahluwalia]

We're really proud of everything that we've done at our Vancouver cybersecurity centre of excellence. It has generated nearly 90 patents that are made in Canada by Canadian resources, folks who went to school here and grew up here. We only expect that to continue to grow as time goes on.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

For everything else in life, there's the taxpayer. There we go.

Visa, when you see your competitor get a $50-million handout from the government, does that not make you think, where's my $50 million? How come I didn't get $50 million?

[Jay Dorey]

I think it might be fair for me to say no comment to that particular question. Thank you very much.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

That's okay.

Has the government ever approached Visa, though, about accepting grants or contributions to try to get projects built here in Canada?

[Jay Dorey]

That's an excellent question.

I'm just trying to recall through my tenure at Visa if that has occurred. I think the answer is no, but I would need to confirm that and I'm happy to respond to the committee with that detail.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay. Thank you very much.

Mastercard, I'll go back to you guys. In regard to that $50 million, I'm just curious: Did you guys come to the government and request $50 million, or did they come to you? Did they come to you and say, here's $50 million?

[Balinder Ahluwalia]

I'm unsure. It's before my tenure. I'm happy to get back to you and the clerk with any answers.

[Jeremy Patzer, Conservative, Cypress Hills—Grasslands, SK]

Okay.

Lots of times with the strategic innovation fund, they give you the option for repayable loans or some that are non-repayable. Are you considering repaying the taxpayer, given that you had a 67% increase in revenue?

[Balinder Ahluwalia]

We've invested $500 million in the cyber centre in Vancouver. We're proud of everything that we've done there and will continue to do there. It's an integral part of our global network and expected to commercialize good Canadian research outside of Canada, so it's something we can all be proud of.