Mr. Speaker, I will be splitting my time with the member for Saint-Bruno—Saint-Hubert.
Obviously, a lot of people are worried about credit card usage fees imposed on consumers. I said “obviously” because right now, two committees, the Standing Committee on Finance and the Standing Committee on Industry, Science and Technology, are considering the matter and will be reviewing these issues very soon.
Also, witnesses are appearing before the Senate to air various points of view on a problem that consumers and merchants have known about for a long time, a problem that has gotten worse lately.
The New Democratic Party's motion talks about consumer protection, but the motion moved in the Standing Committee on Finance also mentions merchants, who are also important players, subject to a rather complex process for credit card usage. In a way, sudden fee increases hurt them too.
If this hurts merchants, in the end, consumers will wind up paying for it. That is why we agree that this motion should call on the federal government to adopt measures to better protect consumers, but we must not forget that merchants are part of the process too.
There is a lot we do not know. People do not know everything, and banks do not tell us everything about the credit card acquisition process and related regulations. It is complicated, and that is why people tend not to read all of the fine print in the contracts they sign.
Under the current system, an individual can acquire a credit card and use it to pay a merchant. The merchant then has to deal with a credit card company, such as VISA, as well as with what is known as an acquirer, which provides a data transaction system. Credit card issuers, often banks, are also involved.
Popular imagery always focuses on the huge profits that the banks have been making for years, but I think it is important to again point out the full context and consider the fact that a great deal of information and education must be provided about the credit card system, in order to fully understand who is making profits, how companies are able to increase them and why they do so.
We in the Bloc Québécois believe that the federal government must act. We therefore support the principle of this motion, so that in committee we may examine more closely the various issues we are dealing with today. However, although we support the principle, the federal government must definitely be extremely careful about respecting provincial jurisdictions and Quebec's jurisdictions if it takes any legislative action.
For example, since 1971, Quebec has had the Consumer Protection Act, which already provides a framework for the contractual agreements between credit card companies and consumers. If this motion passes and the federal government decides to go ahead with legislation, it will be important to respect Quebec's expertise and competence in this area. Furthermore, several incidents since 1971 have helped the Quebec government develop its competence in this area, which has even been recognized in a Supreme Court of Canada decision.
To analyze the overall situation, it must be seen in a very broad context. The current economic and financial crisis clearly shows that debt is a major problem in Quebec and in Canada. This situation is even worse for our neighbours to the south. Credit that was granted with very little background checking is what caused such massive debt and the current global crisis. This is prompting parliamentarians to have a look at the situation and think about what we can do to protect consumers and merchants.
We had some proof of that yesterday when the Bank of Canada once again reduced its key interest rate to 0.25%, which is an unprecedented low. For a long time, the spread between the Bank of Canada's prime rate and the rate financial institutions charge their clients who use credit cards has been far too great. Bank rates hover around 18% or 19%, or even 20%, when we now have a key interest rate of 0.25%. This is a disturbing problem that we must examine carefully.
Why are we allowing banks to continue to rake in such huge profits at a time when consumers are increasingly vulnerable? The marketing techniques used by banks—a Liberal member was just talking about premium credit cards—have once again compounded the problem of the appeal for certain consumers. In fact, many consumers consider the use of a credit card issued by a bank and associated with a given product a way of profiting from their purchases.
However, we know very well, with regard to the matter of credit cards, that banks issue them in the hope that the holders will not pay the full balance of their purchases within one month. That is where the banks make their huge profits. Consumers are not very well educated about that. There is also a lack of knowledge about the fees charged to merchants who, quite often, do not understand what they are being charged and why their fees increase.
Therefore, the Bloc Québécois supports this motion in principle but the government will have to exercise caution before going any further and be truly cognizant of the fact that there are other competent authorities in this matter, such as the provinces.