Mr. Speaker, I would like to start by saying that the NDP motion is a good initiative. It is good that we in this House are finally agreeing to debate the day-to-day problems people in our ridings are experiencing because of the economic crisis. Our constituents are being hard hit by this economic crisis, especially since they have been grappling with these problems for some time. Since the Conservatives came to power, many people in the manufacturing and forestry industries in Quebec have been laid off, and communities are reeling from those layoffs. People are getting poorer, and unemployment is on the rise. Obviously, this is having an enormous impact on household debt, especially for young couples.
I would like to talk about the NDP motion before I speak about the economic crisis and the solutions proposed by the Bloc Québécois. This is a well-meaning motion, and I would just like to remind this House what it is calling for:
That, in the opinion of the House, the government should take action to protect consumers who are particularly vulnerable in tough economic times; and therefore, this House calls on the government to introduce, within 6 months, comprehensive legislation, similar to the Credit Card Accountability Responsibility and Disclosure Act of 2009 introduced by the Obama Administration in the United States, that would:
Seven paragraphs follow, outlining the proposed measures. I will read the first one, which is important:
(a) protect consumers from “any time, any reason” interest rate increases and account changes;
This paragraph is very interesting, but it is the only one that does not encroach on the jurisdictions of the provinces, especially Quebec. Since 1971, Quebec has had a Consumer Protection Act that governs contractual agreements between credit card issuers and consumers. It is immensely important to respect Quebec's expertise and jurisdiction. As my colleague from Saint-Maurice—Champlain explained so well, Quebec's jurisdiction in this area may have been challenged, but it cannot change.
The other measures proposed in the motion introduced by the NDP member for Sudbury on this opposition day read as follows:
(b) prohibit unfair application of card payments;
(c) protect cardholders who pay on time;
(d) limit abusive fees and penalties;
(e) prohibit issuers from using a consumer's card history with another creditor to raise interest rates—;
(f) prohibit issuers from charging interest on debt that has already been repaid;
(g) ensure that cardholders are informed of the terms of their account;
(h) protect young consumers from aggressive credit card solicitations.
All of this falls under Quebec's jurisdiction.
It is true that debt is a major problem in this country. It is also true that the difference between the Bank of Canada's key lending rate and credit card interest rates has been growing. I will talk more about that later because that gap is widening: 0.25% and 25% is scandalous. It is true that the big banks and financial institutions are the ones benefiting. We are eager to see their quarterly statements. Not all of the items in the motion fall under federal jurisdiction, as I pointed out earlier. However, I would like to see the federal government take action within its jurisdiction in this matter.
For example, item (a) would be a good place to start. The federal government could consider linking credit interest rates to the Bank of Canada's key lending rate with reference to the criminal rate under section 347 of the Criminal Code, thereby doing a better job of synchronizing the cost of credit and the key lending rate. There are several ways to go about doing this.
One way is to determine in advance the difference between the Bank of Canada's key interest rate and what a credit card company can charge and express that difference as a percentage, a multiplier or a number. For example, there could be a maximum difference of 5% or two to three times the base rate. Currently, at 25%, the credit card interest rate is 100 times the Bank of Canada rate of 0.25%, which makes no sense. The current economic crisis is to blame for this situation, and we have to do something about it. In this Parliament, we can correct this situation.
This is a provincial jurisdiction. Quebec's Consumer Protection Act contains strict requirements governing all kinds of credit card contracts. For example, credit card issuers must send consumers an account statement that includes information such as the account balance, the date, the description and value of each transaction, the date and amount of each payment and the credit charges. This extremely precise and detailed information lets consumers make informed decisions.
Section 128 of the Consumer Protection Act states that “Where the merchant has indicated to the consumer the amount up to which variable credit is extended to him, the merchant shall not increase such amount unless the consumer expressly applies therefor.” In addition, consumers must be given 30 days' advance notice of all changes.
Credit cards are very expensive at present, especially when issuers charge between 18% and 29.9% interest. I will not name these companies, because it is easy to find this information on the Internet. A rate of 29.9% is really excessive and outrageous, when the Bank of Canada rate is just 0.25%. This has to change. Of course, the credit card companies say that their rates are so high because their risks are high, but perhaps they should reduce their risks by tightening the requirements for extending credit.
This is not the first time the Bloc Québécois has been highly sensitive to the economic situation and its impact on consumers and citizens. In fact, the Bloc has brought forward a number of measures in that regard. One of the more recent ones was the action plan put forward on November 24. In this time of economic crisis, people really need help. This Parliament must adopt measures to help unemployed workers. In the November 24 action plan, the Bloc Québécois proposed realistic, specific and comprehensive measures.
A few years ago, my hon. colleague from Hochelaga introduced a bill in this House to prohibit banks from discriminating on the basis of social condition. That was another example of action taken by the Bloc Québécois. In addition, two months ago, my hon. colleague from Saint-Maurice—Champlain moved the following motion in committee:
That the Finance Committee conduct a study of the various debit and credit card transaction fees imposed on merchants as well as the standard and transactional practices that justify them and report its observations and recommendations to the House.
Credit card companies are still at issue, because they want to increase to 2% the fees they charge retailers when consumers use their credit cards. This is a terrible hidden fee for consumers. My hon. colleague from Saint-Maurice—Champlain wants the Standing Committee on Finance to take a very serious look at this matter. We hear a great deal of complaints from retailers.
I also moved a motion two years ago and four years ago, and I will move it again in this House. The motion would regulate bank fees.
I hope I have convinced my colleagues across the floor to vote in favour of this motion.