Industry Committee on Dec. 12th, 2024

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

Well, he's in all the newspapers here. If you missed it, at the beginning of the summer, there were stories from senior officials and the Prime Minister's Office about how disappointed they were with the current finance minister, Minister Freeland, and how she's a terrible communicator. They weren't getting their message out, so they were trying to actively recruit Mark Carney to run in a by-election and get into cabinet. You must have been aware of that. Then, over the summer, when they were unsuccessful, the Liberals made him a special adviser to the party and really inserted him, essentially, as a de facto finance minister above Minister Freeland.

Well, he still serves on your board. Yet, in the fall, Minister Freeland made this great to-do about massively reducing the merchant fees for small businesses in Canada with this thing you are calling minuscule and $10. During all of that discussion and the lead-up to that announcement, the current finance minister—not the next finance minister—claims they had discussions.

Did Stripe have discussions directly with Finance officials in the lead-up to that announcement? Was the future finance minister Mark Carney involved in those discussions?

[Patrick Collison]

I don't know of all the discussions that may have happened between different officials at the finance department and Stripe and any consultations that might have occurred, but I can say that Mark Carney was not involved.

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

On the determination of your company to defy the government's requests to pass on these savings, which your competitors have complied with—and which is obviously an embarrassment to the current finance minister that she can't get you to comply with it—you said it's de minimis, that it doesn't amount to much.

In fact, in your press release, you said it's because of the goods and services tax changes, but really, you only had a one-year holiday on the goods and services tax, and you earlier said that a basis point is a minor amount of money. Your press release says that this is an impact of 0.036% and, therefore, you couldn't pass it along. It seems, in your own words, to be “minuscule”. Despite the fact your business in Canada has improved by 50% in two years, as you claimed in your opening statement, you can't afford to pass on a minuscule change and will defy this Liberal Minister of Finance when you have the next minister of finance on your board.

[Patrick Collison]

Is there a question?

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

Is it de minimis or not? You said it was de minimis, but it's clearly significant to you, because you've said that you're not going to pass it along.

[Patrick Collison]

[Inaudible—Editor]

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

If it were irrelevant, you'd pass it along. You'd say, okay, I can pass on that $10 or that $7. It must be significant to you.

[Patrick Collison]

The businesses that pay us for payments as a kind of a dedicated payments product, as we've been discussing...we pass all that along. I think the issue at hand is really whether businesses like Stripe—

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

Your press release says that you're not passing it along. Is your press release wrong?

[Patrick Collison]

I think the press release is referring to what I was about to get to next.

I think the issue at hand is whether businesses like Stripe should be able to have a simple, single, stable price that's predictable for businesses and that doesn't change through time and—

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

Yes. It's predictable. You can make something predictable by making it an excessively high flat rate. That's predictable, but you're the only player that....

Are you that inefficient? Mark Carney sits on the board of a company that is less efficient than your competitors in that you can't find a way to pass on this minuscule thing? Are you really that poor in your technology relative to your competitors, who can do this? Or is it that Mark Carney is trying to undercut the current finance minister?

[Patrick Collison]

Mark Carney has not been involved in any of these discussions.

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

When your company decided to defy the Canadian government, your board of directors never had a discussion? You've never had a discussion about defying the Canadian government on this initiative?

[Patrick Collison]

Our Canadian pricing has never been discussed at the board level. Our revenue in Canada is less than 10% of Stripe's global revenue, and the issues we're discussing here are—

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

It shouldn't cost you much to pass it along, so why would you defy the request of the current finance minister? Wouldn't you be expected to say with the perceived conflict of interest—not just the real ones, but the perceived one—that your board member has in being the inserted finance minister between the Prime Minister and the current finance minister, “You know what? Maybe we should be careful since the Canadian part of our business is small and this is a minuscule amount of that business and we should comply.”

Or is it that you're just too greedy to screw Canadian small businesses that you'll take every dollar out of them? As you are an American-based company, you don't really care about the Canadian market, and neither does your board member. You would have thought your board member, Mark Carney, would have said: “Hey, guys, this does matter. You shouldn't do this reputational harm to the company.” Is he that detached as a board member that he doesn't actually care about what's going on in his own country?

[Patrick Collison]

I actually have the opposite point of view where, rather than making any of these pricing decisions on the basis of political exigencies or perceived allegiances or anything like that, we try to ignore the politics and just do what we think is best—

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

You put Mark Carney on your board. You ignored the politics? Come on.

I've sat on boards. It's unbelievable that you would make a decision against a Canadian government order with a future finance minister and the personal adviser to the Prime Minister of Canada on economic policy...that you would make a decision to defy that government with the senior economic adviser to the Prime Minister on the board. It's just not believable.

Either that is misleading or the current board member really is so indifferent—maybe he is indifferent, since he's moving Brookfield to New York to avoid Canadian taxes—to the Canadian market that he doesn't even stick his nose into that. At least he could read the newspapers and would have probably seen this issue that he, carbon tax Carney, has caused for himself and you.

Why is it that a board member that you think is effective doesn't even have the sense to say at board meetings or directly to the CEO, “Why are you defying the Canadian government?” I can't imagine how irresponsible that is for a board member.

[The Chair, Liberal, Joël Lightbound]

Mr. Perkins, you're way over time.

I'll let the witness answer, but I'll just remind you, as I've done in the past, that this is not the floor of the House of Commons where you get rewarded for using gimmicks and calling people “carbon tax Carney”. I appreciate more decorum here.

I'll leave it at that, Mr. Perkins.

Mr. Collison, the floor is yours.

[Patrick Collison]

I can't speak for Mark and his actions.

I will very briefly say, on the small business point, that the revenue we make from businesses in Canada on a per-business basis has declined over the past year. Any of these small-business interchange changes are more than outweighed by the tax increase, so we decided we would just accept that. We think it's better for businesses. Even though our margins have gone down slightly, we believe in offering a stable, predictable price. That hasn't changed, even though it's actually slightly less profitable for us than it was a year ago.

[The Chair, Liberal, Joël Lightbound]

Thank you.

Mr. Badawey, the floor is yours.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you.

Mr. Chairman, to be clear, I'm not going to resort to parliamentary theatrics. I am going to stick to the business at hand.

That business is our expectation that payment processors, which include Stripe, are disciplined and pass savings on to the businesses. As you may know, the federal government is closely monitoring the implementation of credit card fees and the reduction of those fees, with the strong expectation that all payment processors like Stripe will pass those savings on to small businesses, period.

If you hadn't heard that, you just did. I'm sure you will take this with a great deal of respect and discipline, and do what the government expects you to.

I may be repetitive in some of the questions I have, but the analysts are taking this information down and, in turn, providing the committee with a report, establishing recommendations for the department and the minister. I may be repetitive to try to solidify a lot of those statements.

You stated publicly that Stripe would pass all network costs and fees, including the recent reduction in interchange fees, through to eligible businesses on your interchange plus pricing.

I would like you to elaborate. Do you have different pricing schemes for businesses, therefore creating different tiers in your treatment of businesses? This is something Mr. Van Bynen was trying to drill down on earlier. I want to drill down on it a bit more, in order to be very clear on that.

[Patrick Collison]

Yes, we have different pricing models for different categories of business.

[Vance Badawey, Liberal, Niagara Centre, ON]

With that, what percentage of your revenue comes from your standard pricing, and what percentage comes from the interchange plus pricing model?

[Patrick Collison]

I don't have those percentages at hand, but the majority of our transactions are covered by this interchange-based pricing model.

[Vance Badawey, Liberal, Niagara Centre, ON]

Could you provide that to the committee in writing at a later date so we can include it with the testimony you're providing to the analysts? That would be much appreciated.

To the same question, what is covered under your standard pricing, and what benefits exist within the interchange plus pricing model?