House of Commons Hansard #157 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was benefit.

Topics

Financial InstitutionsAdjournment Proceedings

7:30 p.m.

NDP

Glenn Thibeault NDP Sudbury, ON

Mr. Speaker, it is great to once again rise and have the opportunity to debate with my hon. colleague from Saint Boniface on this subject. I want to pass along my thoughts and prayers in relation to what happened in Saint Boniface yesterday with that large fire. Let us hope that everyone who was involved is okay.

Now I will turn to the subject matter that we are talking about this evening. Far too many small businesses in Canada are struggling due to the burden of credit card fees. With all the financial uncertainty that small businesses face in the current economic climate, the extra burden of some of the highest merchant fees in the world is an unwanted and unneeded encumbrance.

It is estimated that Canadian businesses pay $5 billion a year to process credit card payments. These costs in turn are pushed on to the consumer as all prices are hiked to cover the cost of processing credit cards, regardless of the type of payment a consumer uses. Credit card users get some of these costs offset by rewards, such as air miles or cash back, but cash and debit users are the ones footing the bill for these perks. Essentially, everyone pays for Canada's artificially inflated credit card merchant fees.

The NDP has raised this issue time and time again, but the government's response has been slow and shortsighted. The government introduced a voluntary code of conduct, which it claimed would protect merchants. However, the code is riddled with holes. For example, the code states that merchants must have a 30-day grace period to cancel agreements when rates rise. However, some payment processing companies are now forcing merchants to sign lease agreements for credit card terminals that do not have this grace period and that have sky-high cancellation costs, effectively forcing merchants to stick with the processor even when the rates jump.

The biggest concern that I have heard about the code of conduct is its voluntary nature. Although the minister likes to argue that the code is only voluntary until it is broken, this makes little to no sense. If the minister believes the code is mandatory then it should be enshrined in legislation. That way everyone knows exactly where they stand. That would remove the risk that further down the road government would simply disregard the code without parliamentary approval. We have seen this with the Ombudsman for Banking Services and Investments. It is far too easy for a voluntary agreement, especially with the industry and the government, to be tossed aside.

The government had the perfect opportunity to fix the system with the publication of the final report of the payments task force earlier this year. The report painted a dark picture of the state of the payment system in Canada with a number of useful suggestions for moving forward. However, the Conservatives have still refused to act on these recommendations. A bill to rectify these problems would provide the perfect opportunity to codify rules to protect merchants from high payment processing and costs, and kickstart the economy.

I know my time is wrapping up. I would love to talk a lot more on this subject. I am sure we will be back again another day soon, but on that, if we do not act soon, merchants and consumers will risk being left behind.

Financial InstitutionsAdjournment Proceedings

7:35 p.m.

Saint Boniface Manitoba

Conservative

Shelly Glover ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, I also want to take a moment to thank my colleague across the way, whose kind words about the fire that took place in St. Boniface are touching. I know his concern is genuine.

Back to the matter at hand, I find it somewhat ironic that the New Democrats would talk about the credit card companies as those that would fill their coffers with the money of hard-working Canadians with hidden fees and hidden costs. That is exactly what the NDP is trying to do with its massive carbon tax scheme, which is hidden in plain sight in its 2011 election platform.

This scheme clearly states that the New Democrats would have a $21 billion cost to taxpayers in the form of higher taxes. However, they claim that Canadians would not have to pay this tax. I am quite confused when I try to think about the fact that taxes are paid by Canadians, yet they want to raise revenues of $21 billion with its carbon scheme and they say that Canadians will not pay it. I would like to reassure Canadians about this and give my learned colleague an opportunity to explain that.

Back to other forms of payments that Canadians make, this government has taken their concerns as consumers very seriously. We have done that by ensuring that we have put in place some measures that protect them as consumers.

Let us look at the facts behind some of the things that have been done by this government. Look at the new rules, which we consider to be strong, pro-consumer rules that help protect Canadians. We see things that we have put in place, for example, the summary boxes on contracts and applications to ensure Canadians know exactly what their applications say, and the clearer information on implications of minimum payments. Those are things we were asked for. Also, the timely advance disclosure of interest rate changes is something we were asked for.

Moreover, we believe Canadians should not need to have a magnifying glass or dictionary to read their credit card agreement or application and they should not have to be a lawyer or an economist to understand it. That is why we are forcing greater clarity and more timely disclosure from credit card issuers when dealing with consumers.

In addition, the new rules will limit other business practices that are not beneficial to consumers, including requiring a minimum 21-day grace period on all new purchases, express consent for credit limit increases and limits on debt collection practices.

What is most disconcerting is that a number of these pro-consumer measures were put forward and we sought the collaboration of the New Democrats and their votes to promote and stand behind our Canadian consumers. Unfortunately, the NDP, time and time again, voted against these measures to protect consumers.

The Canadian Consumers' Association agreed with this government's position on these measures when it said, “All of the things that the [finance minister has] done...are actually just what we asked for” and “overall, "I've got to congratulate [him]”. Therefore, why does the NDP vote against Canadian consumers and the Canadian Consumers' Association?

Financial InstitutionsAdjournment Proceedings

7:35 p.m.

NDP

Glenn Thibeault NDP Sudbury, ON

Mr. Speaker, obviously there are quite a few things I would disagree with in my hon. colleague's speech, one of those being that the voluntary code does not go far enough. The voluntary code is toothless. I have expressed some examples that merchants are bringing forward saying that there are loopholes in here that these companies are going around and they are still being affected. There are $5 billion in costs going onto our small businesses. These small businesses then have to raise their prices, which affects every consumer.

Therefore, rather than talk about the voluntary code, which is toothless, let us talk about ways that the government can actually fix this and enshrine it in legislation to ensure we can close the loopholes. Otherwise, at the end of the day, it is consumers and small businesses that will continue to be hurt, and right now we need to fix this because they are our largest employers right across our great country.

Financial InstitutionsAdjournment Proceedings

7:40 p.m.

Conservative

Shelly Glover Conservative Saint Boniface, MB

Mr. Speaker, once again I will side with the consumers on this issue. I will side with the small businesses on this issue that actually agree with this government's measures to protect their interests. When we talk about things like our government's measure to ban unsolicited credit card checks, they agree with this side. When we talk about banning the negative option billing for financial products, Canadian consumers and small businesses agree with this government. Yet the NDP voted against both of those measures.

Why did NDP members also oppose requiring greater disclosure on mortgage prepayment charges? Why did they oppose improving consumer protection by more than doubling the maximum fine on financial institutions that violate consumer provisions? These are among a number of negative votes by the NDP against some measures to protect consumers.

I would invite my learned friend to join with us the next time we put forward measures to protect consumers and to vote with us so their interests are much better protected on all sides of the House.

Financial InstitutionsAdjournment Proceedings

7:40 p.m.

Conservative

The Acting Speaker Conservative Bruce Stanton

The motion to adjourn the House is now deemed to have been adopted. Accordingly the House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 24(1).

(The House adjourned at 7:42 p.m.)