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.