Mr. Speaker, in advance of the budget presented to the House of Commons on January 27, 2009, the earliest in modern history, the government launched unprecedented consultation across Canada. These steps were taken to ensure as many Canadians as possible from members of Parliament, business leaders, economists, industry associations non-profit organizations, public interest groups, community groups, provincial, territorial and municipal governments, and most important, everyday citizens were consulted, such as:
an online consultation open to all Canadians was launched at www.fin.gc.ca;
a series of roundtable discussions was held with business leaders, economists, academics, industry leaders, community and labour organizations in cities across Canada from Saint John to Victoria;
the Minister of Finance held town hall meetings in locations across Canada to hear from Canadians personally;
meetings with finance ministers and first ministers from all provinces and territories;
the establishment of a non-partisan Economic Advisory Council of prominent Canadians from across the political spectrum for advice on the budget and on the economy in the months ahead;
meetings with leading representatives of other political parties, including the official opposition Liberal Party of Canada, to ask for their ideas; and
the Minister of Finance wrote every member of Parliament asking them to consult with the people in their communities and report what they heard back to him.
As members are likely aware, the Minister of Finance released the aforementioned proposed Credit Business Practices Regulations this past May for comment. The relevant news release and backgrounders are available online at http://www.fin.gc.ca/n08/09-048-eng.asp. To summarize, the proposed regulations would:
mandate an effective minimum 21 day, interest-free grace period on all new credit card purchases when a customer pays the outstanding balance in full;
lower interest costs by mandating allocations of payments in favour of the consumer;
allow consumers to keep better track of their personal finances by requiring express consent for credit limit increases;
limit debt collection practices that financial institutions use in contacting a consumer to collect on a debt;
prohibit over-the-limit fees solely arising from holds placed by merchants;
provide clear information in credit contracts and application forms through a summary box that will set out key features, such as interest rates and fees;
assist consumers to manage their credit card obligations by providing information on the time it would take to fully repay the balance, if only the minimum payment is made every month; and
mandate advance disclosure of interest rate increases prior to their taking effect, even if this information had been included in the credit contract.
With respect to the reaction to the proposed regulations, following is a small sampling of analysis by public interest groups or commentators:
Bruce Cran, president of Consumers' Association of Canada, said “All of the things that [the finance minister has] done in there are actually just what we asked for …overall, I’ve got to congratulate [the finance minister]”.
Mel Fruitman, vice president of Consumers' Association of Canada, said, “[They] will solve some of the most egregious practices of the credit card companies … it's a big step in the right direction towards helping us control the amounts we pay on our credit cards. We think it will greatly improve the situation”. A Toronto Star editorial stated, “[the] finance minister … has introduced some welcome regulatory changes that will both introduce more transparency to the [credit card] system and save consumers some money”. A Burnaby Now editorial stated. “[the finance minister’s] new regulations … aim to give consumers more rights when it comes to the credit card industry. One of those regulations … involves forbidding card issuers from increasing credit limits without the written consent of cardholders. We hope this and the other proposed regulations - which include a 21-day interest-free grace period on all new transactions when consumers pay their balance in full by the due date - gain approval in Ottawa”.
Additionally, please note, the aforementioned regulations were published in the Canada Gazette on May 23, 2009 and interested persons were invited to make representations to the Financial Institutions Division of the Department of Finance concerning the proposed regulations within 21 days. The deadline for submissions was June 13, 2009.
Regarding the development of the important budget 2009 measures to help consumers of financial products and the subsequent detailed proposed credit business practices regulations, officials from the Department of Finance, the Department of Justice, and the Financial Consumer Agency of Canada were involved in the development and drafting of these measures.