That, in the opinion of the House, Canadian consumers face unfair Automated Teller Machine (ATM) fees as a result of an uncompetitive marketplace and that the House call on the government to take action in Budget 2014 to protect consumers by limiting ATM fees.
Mr. Speaker, before I begin, it is important to inform you that I am splitting my time with the fantastic MP from Québec.
I am pleased to rise in the House today to speak to my motion, the NDP-sponsored motion calling on the Minister of Finance to announce action in budget 2014 to protect consumers by limiting ATM fees.
From my great riding of Sudbury to St. John's, from Val-d'Or to Victoria, every Canadian has at some point stood in front of an ATM in stunned silence staring at the screen showing just how much they have been gouged for taking out cash from their very own bank account.
Canadians are angry, and rightly so, that their families are being nickelled and dimed by banks reaping record-breaking profits while they struggle to put food on the table and pay for the other necessities of life.
According to the Financial Consumer Agency of Canada, withdrawal fees can cost consumers as much as $5.90 per transaction at a bank-operated ATM. If we contrast the cost being forced down the throats of Canadian consumers with those being charged to consumers in other developed countries, it makes the cost of using an ATM in Canada even more unsettling.
For instance, in many European Union countries, withdrawals from ATMs are free. In the U.K., 97% of transactions are free of cost. In fact, a report from the British Bankers' Association comparing its banking system to those of ten other developed nations found that Canada had the highest fees for ATM withdrawals from their own bank.
This raises the question of why people in the U.K. and Europe get a break from their banks while ordinary Canadians continue to get gouged. Although estimates range, analysts agree that Canadians pay somewhere in the range of $400 million a year for the privilege of using ATMs, representing nearly 5% of the revenue of the biggest banks in Canada.
Thus, it is not surprising that Canadian banks are reaping record profits, amounting to $29.4 billion in 2013, up 5% from last year despite the weak economy, because they are doing it on the backs of hard-working Canadian families.
How did we enter this cycle of ever-increasing fees? Surcharging on ATM withdrawals have become standard operating procedure for Canada's banks since 1996, when the ban on surcharges was lifted following a ruling by Canada's Competition Bureau. In 2000, many banks began adding a new convenience fee in addition to their Interac fees for those consumers who use an ATM owned by a different institution or operator. This has led to ATM use becoming more and more expensive.
The most shocking part of ATM fees is that on average the real cost of processing a transaction today is estimated to be around 36¢. Where does the rest of the money go? We know that 0.7¢ goes to offsetting the cost of operating Canada's world-leading, not-for-profit Interac network. While there is obviously a cost to operating and maintaining these terminals themselves, the rest is going to pad the profits of the big banks, the big card networks, and independent machine owners.
Currently, there is no limit on what the operator of an ATM can charge a consumer for using their machine. This is unfair, and it is a policy we as parliamentarians must address head on. These fees are rip-offs, plain and simple, and the government has the power to act immediately to drive down the cost of ATM fees.
Some of my colleagues on the other side of the House may think that $2, for example, is not a burdensome cost for Canadians, but here is the unfair thing about it. When the average person going to an ATM machine takes out $20 or $50 to get them through a day or two, that person is charged $2.50 for accessing that money, yet someone else may withdraw $500, and they pay the same $2.50. This means that the financial burden of ATM fees falls disproportionately on low-income Canadians, and that is grossly unfair.
That is why groups such as the Public Interest Advocacy Centre, Option consommateurs, and ACORN support the NDP call to cap ATM fees.
At one point, the Minister of Finance seemed receptive to the idea of limiting these outrageous ATM fees. In 2007, in response to the NDP campaign to ban ATM fees, the minister told the House of Commons finance committee that the government agreed with the NDP that the banks ought to do something for consumers with respect to ATM fees and to try harder. However, in the end, after talking to the banks, the minister climbed down, and no action was taken to protect consumers from these outrageous fees.
Now, because of the minister's lack of action, ATM fees continue to rise for lower-income Canadians such as seniors, students, and persons with disabilities, for whom the minister expressed particular concern.
While the Conservatives talk a big game about the importance of protecting consumers from the most abusive practices of Canada's largest corporations, their failure to crack down on ATM fees and the plethora of other consumer abuses undermines this claim. Here is an opportunity for the Conservatives to prove they are serious and actually do something tangible for consumers. A failure to do so will make the government's priorities clear: Bay Street over Main Street.
The minister's friends at the banks will argue that capping ATM fees would significantly decrease the number of ATMs that banks offer to Canadians. However, according to the World Bank, Canada has the highest number of ATMs per capita in the world, with 204 ATMs for every 100,000 people. The OECD average is 74 ATMs per 100,000 people. However, if we think about the cost that Canadians have to endure every time they use an ATM, it is no wonder the banks have so many of these ATMs out there.
Moreover, the banks claim that the ATM fees must be high enough to cover all chequing account-related costs. That is undermined by the fact that banks also charge many other high consumer fees under the premise of covering those exact same costs. Canada's banks charge consumers scores of other fees for maintaining and accessing funds in their chequing accounts. There are monthly fees, overdraft fees, failed payment fees, fees for failing to maintain a minimum balance, e-transfer fees, and many more.
Given that banks are already recouping their costs through these other fees, the NDP's call for a 50¢ per transaction cap for ATM fees seems entirely reasonable. With a cost of 36¢ per transaction to the bank, this would still give them the ability to recoup their operating costs while maintaining a healthy profit margin. It would also restore a sense of fairness and balance to what is truly an asymmetrical relationship between consumers and their bank.
The Conservatives claim to be on the side of consumers, but time and time again this Conservative government, like the Liberals before them, has sided with the big banks by refusing to crack down on excessive bank fees. New Democrats have put forward a practical solution that would restore a certain amount of fairness to the relationship between consumers, their families, and the banks. By supporting the motion and including a provision to limit ATM fees in the upcoming budget, the government has an opportunity to help hard-working Canadian families who are already overburdened by household debt and are struggling to maintain their way of life.
I conclude that a failure to do so will demonstrate that hard-working Canadians cannot trust the Conservative government to do what is best for them and their families. We need experienced leadership that puts Canadians, not bank profits, first. Canadians deserve better.