Industry Committee on Nov. 7th, 2024

[Brian Masse, NDP, Windsor West, ON]

If payday loans are exempted, that's a huge exemption.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Masse.

We're running out of time.

I apologize, colleagues. I got too excited with my questions. I skipped the order and I forgot Mr. Patzer, but we did Jean-Denis and Brian earlier. We're going to Mr. Patzer, and then it will be Liberal, Conservative and then Liberal.

Go ahead, Mr. Patzer.

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

Thank you very much, Mr. Chair.

I'm intrigued sometimes about what your policy objectives at the Department of Finance actually are. What are the guardrails that you guys have in place for your department on setting your policy?

When you compare what's going on in the European Union and some other countries like that, you see that they've been very aggressive in setting real rate cuts and levels. They're way down here and we're way up here. Why is that?

[Nicolas Marion]

I take it that you're referring to the interchange rates in this particular case.

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

Yes.

[Nicolas Marion]

For Canada, the latest round of agreements is to secure reductions in interchange rates for small businesses. We're really looking at how can we reduce, meaningfully, the interchange rates paid by small businesses. That's number one.

Number two is to make sure that those reductions aren't accompanying increases for other businesses.

Number three is that we wanted to make sure that Canadian consumers' reward programs were protected, as they value those programs quite significantly.

Those were some of the objectives going into the agreements. Then it's about how to structure this. How best do we deliver on those objectives?

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

We're looking at multiple things that we have heard in this committee so far.

We look at the credit card companies, for example. All of their interest rates are virtually identical. Sure, there are multiple players in the market, but there's no true competition. If there was, there would be aggressive rate reductions happening.

Why is the Government of Canada's policy not seeking to get that competitive nature restored so that we see a rate reduction and consumers and businesses get a better outcome?

[Nicolas Marion]

It's a good question in terms of what we're observing in terms of interest rates, for instance. I can attest that there is quite a significant amount of competition, in terms of—

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

Not really, because they're all exactly the same.

[Nicolas Marion]

I agree that they're all the same, and I'd also mention that the gas prices in my neighbourhood are all the same as well, but they compete fiercely with one another.

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

If they did, their rates would be way lower.

[A voice]

They don't because they've regulated innovation in the market.

[Nicolas Marion]

They do compete, fiercely, on their credit card portfolios.

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

The rewards are exactly the same too. They all offer generally the same thing. In fact, multiple banks offer rewards from the same companies, like Aeroplan, Avion or all these different things.

Anyway, Mr. Chair, I want to take the last couple of minutes here.

I have a motion I would like to move. It's in relation to the study that we are doing, so it's within scope. This is the motion:

That, in relation to the committee's ongoing study of credit card practices, and given that various departments have refused to answer questions and produce documentation related to the committee's ongoing study, the committee therefore order the department to produce:

(a) Hon. Michelle Rempel Garner's request for any briefing notes and summary documents prepared by the department related to the Government of Canada's consultation process on reducing interchange fees, including any and all written submissions received by stakeholders;

(b) MP Jean-Denis Garon's request for all copies of Visa and MasterCard's initial offer to reduce interchange fees, including any and all counter-offers by the department, as well as any and all email exchanges related to these negotiations between Visa, MasterCard and American Express;

(c) MP Brian Masse's request for any advice letters or memorandums provided to the minister on the matter of reducing interchange fees or credit card reductions more broadly;

and that these documents be produced to the committee within 14 days following the adoption of this motion, unredacted, and in both official languages.

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Patzer.

Mr. Garon, you have the floor.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Mr. Chair, from the outset, I consider my request for the offers and counteroffers to be appropriate. I do not think big trade secrets are in there. This negotiation falls under the public interest, especially since it was promised in the 2022 Fall Economic Statement.

Considering the conversations held here today, I understand that the Department of Finance still has trouble understanding the ins and outs of what it describes as agreements for Quebecers’ and Canadians’ pocketbooks. We heard again the fact that 90% of businesses will benefit from the measure, but we don’t know anything about its impact in terms of sales revenue.

I remind you that, in 2022, when the Liberal government announced it was negotiating with Visa and MasterCard, it was in a context of high food inflation. However, we now know full well that these agreements don’t apply to a single convenience store in Quebec and almost no restaurants. Furthermore, these agreements certainly do not apply to grocery stores, whose business model relies on a large volume of transactions, but small margins. They are excluded.

I therefore think Mr. Patzer’s motion is a very good idea. That said, and I know that it’s a very sensitive matter, I am pretty sure my colleagues “Brian Perkins” and “Rick Masse” will agree not to call another colleague “Michelle Garon” in the French version of the motion. If it is possible to correct that, I would be grateful.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. “Jean‑Denis Patzer.”

[Voices]

Oh, oh!

[The Chair, Liberal, Joël Lightbound]

Mr. Turnbull, you have the floor.

[Ryan Turnbull, Liberal, Whitby, ON]

I'm not sure what the rationale is for a motion, but I know that the witnesses, when asked by me for exactly the same information, committed to providing it to the committee. I feel that there's a bit of a breakdown here in terms of what happened at this committee and that maybe members were too busy writing a motion to pay attention to the testimony that was given.

The witnesses here, Ms. Hamel in particular, committed to providing this information, all of which is similar to the motion. I'm not sure why a motion is needed to put this in writing. We've already said that the chair offered to write a letter requesting that information. We also clarified that on the record, and Ms. Hamel clearly committed to providing that information to the committee.

I don't know what the rationale is for using the committee's time for a motion when the witnesses have already committed to providing the information that was requested. It just seems like a bit of a roundabout here. I'm not sure why the witnesses' testimony isn't satisfactory enough for the members and why their commitment to providing documents is not sufficient. Why would that require a motion? I'm struggling to find and to understand the rationale for the need for a motion when witnesses voluntarily said that they would provide the information.

If Mr. Perkins wants to clarify that on the record, that's great, but—

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Sure. It's because this government has a habit of not providing documents. We've been stalled in the House for three months because you refuse to provide documents—

[The Chair, Liberal, Joël Lightbound]

Order. Mr. Perkins, colleagues, order.

I've warned you before. This has happened before. It's not a back-and-forth, even if Mr. Turnbull is asking you a question.

I'll give you the floor, but I have Mr. Badawey first.

Are you done, Mr. Turnbull?

[Ryan Turnbull, Liberal, Whitby, ON]

No, I wasn't quite finished.

There's something I learned in the procedure and House affairs committee called the Simms protocol, which you can invoke, at times, to have these informal exchanges, but I did not give permission to cede the floor to Mr. Perkins. He just jumped in and interrupted me, but that's fine; we're used to that at this committee.

When the witnesses who are public servants, who I think do a great job and work very hard every day to serve in their capacities, commit to providing documents and information that was requested by the committee, I'm not sure that we need to have a motion to compel them to do something they've already voluntarily agreed to. That's my issue with this motion. I'm just not sure what the rationale is, other than the political motivation that might be behind it.

That's all I have to say for the moment, Mr. Chair, but I think I will have more to say on this in just a moment.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Go ahead, Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Chair.

This is not to repeat what Mr. Turnbull alluded to with respect to the expectation of documents being brought forward, which was already confirmed by the witnesses. I want to add that it was also mentioned within the testimony by the witnesses that the ministry is in the process. Ms. Hamel mentioned this earlier.

I can appreciate that you were trying to get as much out as you could, because the process is, to some extent, still under way. You haven't finalized it yet.

With respect to the strategy for meaningful reductions, this government has put forward a mandate to put together a strategy—with respect to your department—for meaningful reductions from the credit card companies.

We've heard a lot of testimony and we've seen a lot of recommendations come out. For example, our government recently negotiated an agreement with credit card companies to provide lower credit card transaction fees for small businesses. Obviously, this will have a benefit for small businesses. We get that. The unfortunate part about it is that not all companies are adhering to what our expectations were.

I look forward to some of that information coming back to us from that strategy, and possibly legislation that will be based on that strategy. Legislation, quite frankly, might be needed to ensure that our expectations are met when we're passing down new negotiations with credit card companies to lower credit card transaction fees for small businesses. The bottom line is that if companies don't adhere to that, we have to find a mechanism so that they do.

I'm hearing today that not all of them are—there's one in particular—and that just simply pisses me off. That can't be, because we have an expectation and a reason for putting that mandate forward. With that said, of course it should be followed.

Once the process is completed, and with respect to transparency and further deliberations with our stakeholders, I can only expect that a lot of the documents that have been asked for at today's meeting will be passed on so that we can continue that discussion and make sure we get it right. With that, the production of documents would be more fluid.

It was actually going to be part of my questions to you, if I had had that opportunity. Obviously, I'm having that opportunity taken away from me now. I'm trying to get it into my comments to you now for further discussion in the future.

This is the last point I want to make. We often see in government that we move forward based on conversations we have with our stakeholders. By the way, our most important stakeholders are Canadians—businesses, yes, but more so Canadians—who are impacted by what businesses and others do that affect their lives.

Unfortunately, we see a lot of the time that Canadians find themselves simply doing what they have to do to get by. They're forced into these situations. Therefore, what we try to do is mitigate their being put in these situations, or when they're put in those situations, we try to mitigate the effects of what they will resort to. Unfortunately, we have companies that take advantage of that. We then react to that, so we're reacting to reacting.

With all of that said, as we're moving forward with this motion, Mr. Turnbull alluded to the fact that you are going to.... Whether it be through the process of the strategy, possibly the process of new legislation or simply getting this done, I can only expect that this information will come down to us, regardless of whether it's through a motion or the process itself.

Ms. Hamel, you referred to this earlier. I can't ask you that question right now and get a yes or a no. I can tell by the looks on your faces that the answer is yes, it is going to happen. However, I can't ask you that right now because we're talking about a motion.

I think it's safe to say that we're going to receive that information. I'm not prepared to waste more time on this motion.