Debates of Feb. 3rd, 2014

Opposition Motion—ATM Fees

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I want to solicit some clarification.

The member made reference, I believe he said, to banks’ being able to charge consumers a 50¢ cap. My question is again related to the independent machine operators, a store that purchases a machine and wants to attach its own fee, whatever fee that might be. My understanding, based on what the member has said, is that would not apply. Therefore, any independent machines that are not administered through one of our national banks would, in fact, be excluded from his comments.

Is that a fair comment?

[The Acting Speaker, Conservative, Barry Devolin]

Once again, I would request all hon. members to direct their comments to the Chair rather than their colleagues.

The hon. member for Sudbury.

[Glenn Thibeault, NDP, Sudbury, ON]

I will address my answer through you, Mr. Speaker, and hopefully we can set an example moving forward.

The question relates again to the specific ATMs that are owned by John Smith or Mary Smith who has a convenience store. That is provincial regulation. I am hoping that what we can do today, to answer through you, Mr. Speaker, my hon. member's question, is to lead by example. We have an opportunity to ensure that our banks do not continue to gouge Canadians. When there are record profits of $29.4 billion going to the banks, it is being done on the backs of hard-working Canadian families.

The one thing we are saying very clearly is that we understand that the banks need to make a profit, that the banks need to recoup their costs, that the banks need to make money to service this network. That is being addressed by folks in the United States. Senator Durbin in the U.S. prepared a great report, 36¢ per transaction. We should talk to stakeholders here in Canada. If we are similar, we should be able to have it capped at 50¢ per transaction, which would still allow the banks to do what they need to do and keep more money in the pockets of Canadian consumers so they can invest in their families and communities.

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, as the deputy critic for consumer protection, I feel it is important that I speak to this worthwhile motion moved by the hon. member for Sudbury. I must say that he does an outstanding job, especially when it comes to protecting consumers.

This motion calls on the government to take action in the 2014 budget, which will be tabled very soon, to protect consumers by limiting ATM fees.

Banks have been allowed to charge withdrawal fees at ATMs since 1996. However, ATM fees are not currently regulated in Canada, and Canadians have been seeing a steady increase in those fees over the past 18 years.

ATMs are everywhere. There are nearly 20,000 private ATMs in Canada now. They are expensive to use, and an increasing number of businesses only accept cash as a method of payment. If customers do not have any cash, they have to make a withdrawal from the nearby ATM.

Let me explain that it is unfortunately not just the retailers' fault if they do not accept payment by credit card. The credit card transaction fees charged to the retailer are just as outrageous. That is another thing this Conservative government will have to act swiftly on.

Most consumers do not realize that the fees indicated on the screen are not the only ones they will be charged. The ATM screens indicate that the fees are in addition to the regular banking fees. Most people think that refers to the usual fees of 50¢ per transaction, for which it is possible to negotiate a monthly rate. However that is not the case.

These bank fees also include the $1.50 fee for the Interac network, and that amount only appears on the bank statement. One could conceivably pay up to $6 in total just to withdraw $20. That is 30% in fees. It is unbelievable. That is a significant tax that the Conservatives are imposing on us by refusing to take action. It is totally unacceptable. Canadian consumers are paying up to $6 to get access to their own money.

Many banks have started charging new convenience fees, in addition to the Interac fees, to clients who use an ATM that belongs to another institution or a private operator. That is why the costs of using ATMs keep increasing. Banks are now charging all those who are not their clients the same fees charged at privately-owned ATMs, such as convenience fees of $1.25 or $1.50 in addition to Interac fees, which are generally $1.50, and transaction fees. Fees, fees and more fees.

The show La Facture, on the French network of the CBC, managed to get a comment from the Mouvement Desjardins spokesperson, André Cajolais:

...why would Desjardins members using another bank's ATM pay convenience fees, and a banking client using a Desjardins ATM not pay the same fees?

That is an intriguing position that confirms the importance of the NDP's proposal to regulate ATM fees in order to have a single fee. The Desjardins spokesperson went on to say:

If convenience fees disappeared from the entire industry tomorrow morning, Desjardins would stop charging them.

That is the crux of the problem. The Canadian banking sector is a difficult market to penetrate and is dominated by a few large banks. It is anything but a free market. In more competitive banking markets, such as the market in the United Kingdom, ATM fees are very low or even non-existent. However, in the less competitive Canadian market, consumers can be charged as much as $3 or $4 to simply access their own money. These fees can sometimes be $6, as I mentioned.

This situation is completely unacceptable, especially since the banks made a record $29.4 billion last year. There is no reason to let them continue to exploit consumers through ATM fees. It is uncalled for.

The NDP is suggesting a cap on ATM fees, so that Canadian financial institutions can no longer charge more than 50¢ per transaction. Unfortunately, Industry Canada's Office of Consumer Affairs stopped publishing an important annual report on the costs of Canadian banking services, and there is very little information on ATM fees. According to the last report published in 2002, there was a significant increase in transaction fees, so we can only imagine what the situation is now.

Furthermore, according to a study carried out by the Federal Reserve System Board of Governors in the United States, based on the best data available, the cost of processing an ATM transaction rarely surpasses 36¢. In light of these studies, the NDP believes that a 50¢ limit per transaction is reasonable for consumers and also for banks, which will continue to earn a profit—although perhaps not one as astronomical as they do now.

All too often we hear both the Liberals and the Conservatives—six of one and half a dozen of the other— talk about the middle class and consumer protection. This is finally an opportunity for them to show that they mean it. In 2007, the Minister of Finance told the banks that he was not satisfied with their explanation of ATM fees and that they had a responsibility to provide answers to consumers.

However, in the end, the Conservative government did not introduce any measures. ATM fees continue to increase even though there is no reason why Canadians should pay such high fees when banks are making enormous profits and these charges are lower or non-existent in comparable countries. The banks maintain that capping ATM fees will lead to a significant reduction in the number of machines available to Canadians. However, the truth is that Canada already has the largest number of ATM machines per person in the world.

As household debt reaches a record high of 166% of disposable income, there is every indication that consumers have reached the breaking point. The NDP is currently conducting a major campaign to make life more affordable and we intend to stand up for consumers every step of the way.

I heard some Conservative and Liberal MPs asking how the 50¢ transaction fee would be applied. Obviously, when you turn a blind eye to the problem you cannot solve it.

That is why we need an NDP government that cares about people and consumers and that can relate to what they are going through. People pay exorbitant ATM fees. That is theft. People want to have access to their own money. The situation makes no sense. Based on the number of interviews I have given about this subject, I know that people are passionate about it. They have had enough. This government has to take a stand and include this measure in the next budget.

I am warning the Conservatives: if they do not get going and finally bring forward real measures for consumers, the NDP will propose other motions. It will not give up until 2015, when it will assume power and, finally, people will get their money's worth.

[Gary Goodyear, Conservative, Minister of State (Federal Economic Development Agency for Southern Ontario)]

Mr. Speaker, I am not really sure why the member is so angry about this. I can sense her passion and I appreciate the comments that she made.

I wonder if she is aware of these prepaid credit cards that have a huge fee up front and so many other fees every month. In fact, it is becoming more common for parents to buy these for their children at university and college. A $50 prepaid credit card sometimes has a $5 initiation fee and then a further couple of bucks every month.

I agree that those are excessive charges. I wonder if the member could answer why they are not in this particular bill.

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, I would like to begin by thanking the hon. member opposite because I can see that he, too, is concerned about these issues. I am pleased to see that the members on the other side of the House are finally thinking about consumers. They understand that this is likely the issue of the 21st century.

A budget will be tabled soon, and we are hoping it will contain tangible measures. We do not want to hear a throne speech in which the government says it wants to take certain measures and then come to realize, months later, that nothing has been done. That gets us nowhere.

Prepaid cards are a problem, but today we are discussing the motion regarding ATM fees. I would like to hear what the Conservatives have to say about this. Really, there is no reason to oppose this motion.

[Marc-André Morin, NDP, Laurentides—Labelle, QC]

Mr. Speaker, there is an important aspect to this issue.

There are 46 municipalities in my riding of Laurentides—Labelle. The majority of them are small municipalities that are far from major highways. There are often no financial institutions in those areas. The banks have centralized their operations where it is the most cost-effective to consolidate services. There is not even an ATM in Mont-Saint-Michel, where I am from. The owner of the corner store helps people out and allows them to make a withdrawal with a debit card. People often live an hour away from their financial institution. When they have access to an ATM, it is most likely not their bank's ATM.

Could my colleague explain some of the problems that can cause?

[Annick Papillon, NDP, Québec, QC]

Mr. Speaker, I appreciate my colleague's comments.

I think it is also important to talk about the need for local services. I would like to quote John Lawford of the Canadian Consumer Initiative, who appeared before the House of Commons Standing Committee on Finance on April 17, 2007. He said:

We've noticed that something odd has been happening over the last decade [so, for over 15 years now] with automated banking machines and fees. While there are more ABMs and more competition, prices have increased and service has decreased. Canadian consumers are calling on elected representatives [including Liberal, Conservative, Bloc and Green Party members] to help them out of this obviously dysfunctional market.

The solution could be the one proposed here today. Clearly, the market is dysfunctional and must improve.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I am thankful for the opportunity to rise to speak to this motion today.

I guess it will not be totally surprising to indicate that I will not be supporting this motion, and I do not believe that most of my colleagues will either. It is not necessarily because of the arguments put forward by the member for Sudbury, but because I think that separating the banks from everything else is not realistic. We have to look at our ATM and ABM network as an integrated network of not only banks but also the private providers that we often see out there.

On that basis, there are a couple of things at stake, such as convenience and the competition issues. However, I think there would be unintended consequences of merely trying to throw a fixed fee on this network.

I would also say that I believe our government is going about this correctly in regulating in a smart way via the information that is out there for our consumers to make wise and informed financial decisions. Number one is the regulatory approach that we are taking, but I also want to talk for a few minutes about our comprehensive financial consumer code, which we are out consulting about right now.

Over the past number of years it has been interesting to watch the proliferation of technologies. Banking has changed significantly. I remember not so many years ago, a few decades ago, that some of our farmers and other people would leave their house in the morning with a pocket full of cash and then come back at the end of the day and check the amount in the other pocket. They would know whether they had made a profit that day if there were more money in that pocket. Also, back in the days when my father was in the provincial legislature in New Brunswick, I remember that he always carried cash and hardly ever did anything on a credit card or anything of that nature. He always had cash.

To me, when we look at the proliferation of technologies, I think we have definitely made things much more convenient as time has gone by. We can see that with the number of transactions and the data from the Canadian Bankers Association on those transactions. When we look at cash withdrawals from 2005 to 2012, they have gone down, and so have deposits and bill payments. As we go to electronic commerce and online banking, we are starting to see those changes.

I agree with some of the points made earlier in that there are some cases where a business only takes cash, and in those cases we certainly need it. However, when we look at these types of things, we can look at being a futurist as well.

It seems to me that at some point in time we will live in an era where we might have a chip, perhaps in our rear end or somewhere else, potentially. As we go through a store, it would be scanned and the money would be transferred. If there would be a charge for that, then the NDP would be really bummed, I can imagine.

That is just speculation, but I would love to be a bit of a futurist to know where this will go. From the strides we have made in the past number of decades, we can certainly anticipate that we will very much be a non-cash society, and probably very quickly.

When we look at the economics of the ATM, regulating a fixed fee such as this is misguided, because we forget about the convenience aspect of ATMs. Here, one of the points made by my hon. colleague across the way was about his store not having an ATM and there being no bank ATM in his community. In my community there is no bank ATM either. I live on the outskirts of Fredericton where there is no bank ATM. However, there is an ATM at my local convenience store and the surcharge is $2.25 to use it. I asked how much the ATM was used, and the answer was “significantly”. It is used a lot, which is somewhat surprising, but in some ways it is not.

As I said before, what people fail to take into account is the cost. In each of these cases, there is a cost to purchasing the machine, and this particular person is sharing in that cost. There are a lot of private white label ATMs. Space in a store costs money, as does the communications and encryption that goes along with these types of transactions. There is a cost to the physical security required, although there may be a bit of control when the machine is located inside as opposed to outside a store. Signage, advertising, fraud and upgrades also cost money. In most cases vendors in convenience stores, at least in this person's case, actually guarantee the float for the ATM as well, so there is an opportunity cost with respect to the vendor's own money being used to ensure that the machine is stocked with cash.

From that standpoint, if there were no surcharge in place, there would be no ATM at that location. Would the bank put in an ATM at that location? Around the outskirts of towns in my riding, some Irving convenience stores have a bank ATM because there is volume and when a store gets volume, transaction costs can be kept down.

I would argue that capping would affect the integration of these ATMs. If banks eventually cannot service some of these lower volume areas, they are going to get out of that business. They would sell those ATMs, which would go to a private operator, and the resulting surcharges could be anything, even extensive.

We should be a bit careful when we say that we want to have a fixed fee like this because there could be dire consequences. It was not too many years ago that the only choice that people had in some small rural communities and other places was to physically go to a bank. That bank would be open probably from 9 to 4, not some of the business hours banks have today. They would actually have to go and wait in line and take out who knows how much cash. However, that being said, there is an opportunity cost for those people from convenience stations. They can go to a place very close by and not burn gas to go maybe 30 or 40 miles at $1.25 or $1.30 a litre. They are better off than they would have been had they gone to a bank in the community.

Therefore, let us be careful and ensure that we do not do something with unintended consequences, which I believe would mean that we would maybe have fewer ATMs.

In the late 1990s, the U.S. had a big debate about this. It was proven that as surcharges went up, the ATM network actually expanded. More ATMs went into places like convenience stores, and private operators were doing that. This is one of the items they ran into.

Without an adequate return, these surcharges would discourage the deployment of ATMs to our rural areas as an example, and that would mean less choice. That would mean there will be slower growth, a limited number of the access points, and in effect, maybe some of the ATMs will be sold to non-owners.

The second point I would like to make is about regulating in a smart way and doing it from an information standpoint. The point was made that if people want to take out their own money, then it should be free. If a person takes cash out of an ATM in a convenience store and it is not a bank ATM, that person must realize that the money is coming out of his or her account but is not his or her cash. As I previously pointed out, the cash belongs to the vendor who loaded up the machine, so there is a cost to that transaction. It is not as simple as saying that is double-dipping.

With respect to the regulatory side, we have had some success over the past little while on this. I would like to comment on a couple of things that have happened in the dialogue with the banks. We have actively engaged the banking industry on the issue of ATM fees and have stressed the importance of consumer choice. One of the comments made before was about seniors, the disabled, and students. The banks have reacted to that and have responded by expanding some of their ATM networks near colleges and universities to help students avoid fees. The banks have also started unveiling low-fee accounts for seniors and students and are improving access for the disabled.

That is not all. The Financial Consumer Agency of Canada has provided consumers with information on banking costs, such as ATM fees. The more information that is out there, the more informative it will be for the actual consumer, because there are cases when consumers actually back away because they are provided that transaction fee. When they actually see it and are asked if they want to go ahead with the transaction, many people decide not to.

From a regulatory standpoint, that is why we have taken those numerous steps. For instance, recently the Minister of Finance announced new prepaid products regulations. A comment was made earlier about prepaid cards.

I would also like to comment on the work actually being done, as we announced in economic action 2013, on the comprehensive financial consumer code. The main goals are to better protect consumers of financial products and to ensure that they have the necessary tools to make proper financial decisions. The tools must be adaptable to suit the needs of consumers today.

As I pointed out, there has been light years of change since even a few decades ago. I remember when people taking a trip would actually go to the bank and get travellers' cheques and sign all the cheques and take them with them. I am not as young as I look. We would take all these travellers' cheques or take out big wads of cash. At the end of the day, these debit cards have provided us with a much more secure environment, so there is an opportunity cost as well.

However, we also want to provide an exclusive and comprehensive consumer protection regime. That is why this consultation we are doing with the public will be important as we develop similar products and services to replace a fairly wide and broad mix of legislation and regulations. The consultation process is on the way. That will be a better way for us to address some of the impacts we might run into.

It is important that we look at these ATMs and ABMs not just on the bank side but as a network. As I pointed out, the integration of these services is very much in play. In our rural areas, there is an impact from these private producers.

In conclusion, I would point out a couple of things. One is the regulatory side. The government is tackling this with the right approach. We are trying to keep taxes down for families so that they have more money in their pockets. That is a responsible approach.

I also think it is important for us to ensure that when we regulate, we regulate in a smart manner and not in a way that will hurt competition. Maybe we need to look at ways to provide more competition in the market and more ATMs as opposed to putting a cap on fees, which could lead to unintended consequences for consumers.

I will close on that, and I am open to questions from the opposition.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, that was very interesting. We went from the days of travellers' cheques to speculation that in the future, we are going to pay through a chip in our rear end. I am not going to go there. I am more concerned about what else consumers are getting in their rear ends right now.

I heard a lot of talk about convenience. When I talk to senior citizens, this is not an issue of convenience. The banks are not interested in serving their communities, so the only way they can get their money out is through ATMs, and there is a $2.50 charge. My colleague says that it is great for competition.

I was just over in the U.K. I saw ATMs everywhere, where I was not being gouged. There I was, an international traveller. Yet I am looking at the fees people are being asked to pay. We pay a regular account fee of maybe $1. On top of that is an access fee, which could be another $1.90. There is a convenience fee. My friend was talking about convenience. The convenience fee is another $5, so we could be paying $7.90 to one of these private operators. The member said that the banks need something to make it worth their while.

Is there any fee that would bother the current government? I am not surprised that it is not standing up for consumers. I am not surprised that it is defending the big banks. However, when I have senior citizens who have to pay for their groceries so they take $40 out and pay $7.90 for that, I think that is outrageous. My constituents think that is outrageous.

Is there any fee the member would think is a problem, or should we just allow the banks to gouge people whenever they want?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I would have to disagree with the previous speaker from Sudbury. As I pointed out earlier, data from the Canadian Bankers Association says that 75% of these transactions are taking place at people's home banks where, in many cases, there are no transaction fees. That is what people are doing.

However, at the end of the day, there is convenience, and for that convenience to be out there, someone has to be willing to make that investment. If the investment is not made, guess what? There is not going to be any ATM in that location at all. I am not sure how seniors are going to feel then if they have to drive 30 or 40 miles to go to a bank because of the hollowing out of the ATM market in rural areas.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, one of the things we have had in Winnipeg North in relatively recent years is banks actually closing. As a result of those banks closing, it is a lot more difficult to get banking services. Fortunately, a number of credit unions have taken an interest and have replaced the banks.

Does the current government feel that it has any role to play in terms of protecting consumers?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, the short answer to that is, yes. I think there is a role for the government to play in the regulatory environment. I talked about the financial code and the consultations we are having. We have actually seen some very good information from these cross-country consultations, which could very well lead to some very good ideas and suggestions about how some of this could be regulated.

However, I also believe that in many cases, from my point of view, having that information out there makes me an informed consumer. When I am an informed consumer, I make better decisions. I know the product I am purchasing. In fact, a number of consumers, as I pointed out before, have actually backed away from some of these ATM machines because of the information that has been provided. I think those are good things. That is a good start, and there is probably more to do.

[Michelle Rempel, Conservative, Minister of State (Western Economic Diversification)]

Mr. Speaker, earlier this morning I heard an answer in which it was clarified that the substance of this debate was on ATMs specifically run by federally regulated institutions.

I wonder if my colleague would clarify. Has there been any modelling that shows what the tipping point is between profit margin and service provision in low-volume areas? What would the impact be of these unregulated ATMs going into that space should they be vacated by federally run regulators, if the profit margin is not there? What would the modelling be in terms of the actual cost to consumers?

I guess the last thing I would ask him is a more esoteric question. What is the cost of the convenience, from an opportunity-cost perspective, of having access to cash 24 hours a day versus the cost of federally regulated banks running banking hours and allowing people to only have cash access through there?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, there are two issues. I will tackle the second one first on opportunity cost. I think there is a huge opportunity cost in not having these, especially in some of our communities. I can point to some of the rural communities in my area. There would be a significant drive for people to actually go to get money, because the closest place could be 30 to 40 miles away. In many cases, we have a significant number of seniors in our rural areas. In some of these rural areas there has never been a bank. It is beginning to be harder for some of these seniors and folks to actually get out and travel. From that standpoint, it has actually been made better.

With respect to the points on the charges, I am hopeful that these consultations we are having will be helpful in that regard.

I would suggest that there would be a minimum of a couple of dollars added to charges once these ATMs are handed over to a private operator as opposed to the banks. That will happen more and more, because the low-volume areas will just dry up without the higher cost.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I approach this motion with a sense of disbelief that we are spending an entire day on this issue.

I know that a lot of people are upset with the banks. I am looking at the banks' profits. The five big banks in Canada in 2013 had a $2 billion increase over their profits of 2012. They are now up to $29.5 billion a year. I would like to talk about some kind of sensible corporate taxes on these kinds of profits. I think we are starting at the wrong end of the debate by talking about ATM fees.

That said, I would like to ask my hon. colleague across the way if he does not agree with the point that with the record profits of the Canadian commercial banks, it is time to look at reasonable taxation rates.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I talked about the ATMs and their being linked. We cannot separate the issue. It is a service.

With respect to banks profits, raising taxes is not going to happen. We are certainly not looking at a high-tax environment. I can tell the NDP members that in addition to not supporting this motion, I suspect that they should not wait for us to have a carbon tax in the budget. They should not wait for us to raise CPP taxes. They had better not wait for us to raise corporate taxes, because we will not do that.

At the end of the day, we should also look at these corporations, which pay significant dividends to pension funds and others. Those are accruing to seniors and are benefiting our communities.

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, on the one hand, the member wants to lower taxes, but on the other, he refuses to legislate to set limits on the fees that banks can charge. This means it would simply be a transfer of money. People will have a little more money in their pockets because they will pay less in taxes, but at the same time, they will have less money because the Conservatives refuse to legislate on the ATM fees people are being charged. Basically, is that not a covert way of raising taxes?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, as I pointed out before, consumers can look online and see the different rates and different charges for different accounts. It is easy to see that information.

I think the member is clouding the issue of bank fees and ATM fees, because 75% of these transactions take place at people's own banking institutions.Therefore, in many cases, people are actually not paying a transaction fee. I think we are muddying the waters on those two fees.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, I am pleased to have an opportunity to join the debate that has been put forward by the official opposition today.

I think a more useful debate that we could have had today is around the issue of the security breach and what exactly has been going on in our country. That would have been much more in keeping with our role here. As much as I support focusing on the consumer agenda, I do believe that our role as federal legislators is to focus on the bigger issues that affect all of Canada, like the security breach, which I am sure we will be hearing more about later today.

I am pleased to speak to the motion put forward by the member for Sudbury, calling on the government to include measures in the 2014 budget that would reduce ATM fees. The wording of the motion before the House is more nebulous than the party's position, which is to bring in a cap on ATM fees of 50¢ per transaction. That position is a change from his party's previous position, which was to outlaw bank ATM fees altogether.

I find it interesting that my colleague from Sudbury put forward a motion that is less precise than his party's position. Quite possibly he will want to speak to that to clarify the difference between the two positions. It is this lack of precision in the motion that leaves a lot to interpretation.

I will conclude my remarks today with an argument for a narrow interpretation of this motion.

First, I want to talk about prevalence and the cost of ATM services in Canada. I would also like to discuss the government's agreement with the banks for low-cost bank accounts and how these agreements relate to this motion we are dealing with today.

The market for ATMs in Canada is a big market. Prior to 1996, there was a clear lack of competition in Canada's marketplace for ATMs. In the early 1990s, the Competition Bureau investigated members of the Interac Association for anti-competitive behaviour. This investigation led to the Competition Tribunal issuing a consent order in 1996, which opened up the market for white label ATMs. That consent order also required Interac to permit surcharging for the use of its network.

Today, Canada has the second-highest number of ATMs per capita in the world, after South Korea. In 2012, there were more than 60,000 ATMs across Canada, and a third of those ATMs were owned by chartered banks.

While the number of bank-owned ATMs has risen steadily in the past 10 years, the use of ATMs is actually declining, as Canadians are clearly moving toward a cashless society. The number of deposits and withdrawals at ATMs has dropped almost 20% since 2005. Meanwhile, some ATM fees have gone up considerably. The Financial Consumer Agency of Canada monitors ATM fees in Canada, and according to the numbers provided by the agency, these fees can vary widely, depending on which ATM is being used.

For example, if someone uses an ATM that belongs to the financial institution where one has an account, using that ATM can cost anywhere from between $1, $2, or nothing at all. However, if someone uses an ATM that belongs to a financial institution where one is not a customer, then that transaction can cost anywhere between $1 and $6. If someone uses a white label ATM, which is an ATM owned by a private operator, one can pay up to $8 for that transaction.

Many Canadians, when they first started using those machines, did not realize the difference between Toronto Dominion Bank's machines and the Bank of Nova Scotia's machines. Then when the white label ATM was introduced, people had no idea of what they were being charged until they had made a few transaction. It was significant.

As Liberals, we recognize that affordable access to basic banking services is essential for all Canadians. We believe that the government has a legitimate role to play in establishing rules—and we did just that previously—that ensure Canadians can access a reasonable level of financial services at a reasonable cost. That is why, under the previous Liberal government, then finance minister Paul Martin introduced a framework to reform Canada's financial services sector.

As part of the many reforms that were made at the time, legislation was also passed that guaranteed access to basic banking services for all Canadians, including low-income Canadians. The reforms also established rules prohibiting banks from placing a hold on government cheques of $1,500 or less. They required signed agreements with banks to provide consumers with low-cost bank accounts at a cost of less than $4 per month, the affordable banking accounts. We also established the Financial Consumer Agency of Canada to monitor the banking sector, enforce these agreements, and help protect consumers.

Under the federal government's agreements with banks, the low-cost accounts include a free debit card, a free monthly statement, free deposits, and between 8 to 12 transactions each month, including ATM transactions, at no extra charge. That was the last time that significant reforms were seriously looked at, and those changes were brought in to protect consumers, especially low-income seniors. All of this was done at a cost of no more than $4 or less a month. These agreements are monitored and enforced by the Financial Consumer Agency of Canada and have the exact same effect as regulations. If the banks were to fail to live up to these agreements, the federal government could easily turn these agreements into binding regulations because of the legislation passed by our previous Liberal government.

As I said, under these agreements, most Canadians can avoid high ATM fees by using low-cost bank accounts. In fact, I know many Canadians who do not pay any ATM fees whatsoever, thanks to the work done by the previous Liberal government. Instead of paying high fees, they plan ahead; only use ATMs that belong to their financial institutions; use the cash-back service at participating retailers, of which there are many; and stay within the monthly limit of transactions that are covered by their low-cost accounts. I understand that the banks are committed to expanding the number of transactions included in low-cost accounts, and those discussions are ongoing. That is something that I believe all of us would support.

Poor implementation of this motion, though, could put these low-cost accounts at serious risk, or it could result in the imposition of higher fees on services that are not directly covered by legislation. A limit on ATM fees that effectively acts as both a price ceiling and a price floor could also mean that Canadians who do not pay any ATM fees now would then have to pay 50¢ per transaction. If this were to happen, there are Canadians who would be worse off.

A limit on ATM fees could also result in closing down ATM operators who provide a legitimate service to Canadians. After all, there are Canadians who are willing to pay a premium for this convenience. Some people prefer to use the white label ATMs in their buildings rather than go across the street or down the block to a bank-owned ATM. There is a white label ATM in this building, and there are times, where for convenience or time, I am sure many of my colleagues have used that ATM, even if they dislike the $6.50 or $4.50 they are charged. However, because of convenience and time, they end up using it. They are willing to spend a few dollars per transaction for that convenience.

Where Canadians have a choice of which ATM to use and avoid ATM fees altogether, is it appropriate for the government to get further involved, to reduce consumer choice and legislate ATMs out of business? Does the NDP also believe that government should outlaw convenience stores that charge more for milk than the grocery store down the road? At what point do we decide that we are interfering too much? I cannot believe that New Democrats would want that, of course, and I am sure they would not, but to do so would be a ridiculous infringement in the marketplace.

Canadians should have the choice to pay a premium for convenience. That said, there are some Canadians who live in communities, especially rural communities, without bank-owned ATMs. Not everyone has the option of planning ahead to avoid ATM fees. Instead, some Canadians only have access to higher-cost white label ATMs. These Canadians can face unfair ATM fees as a result of an uncompetitive marketplace. In rural communities where they do not have the option, the question should be, should it not be required that the major banks ensure there is a proper ATM machine, or that they look at what is being charged at white label ATM machines?

While some Canadians do face high ATM fees, I would urge the government to be careful in how it would go about limiting these fees. The government should be careful to avoid unintended consequences, such as raising the price for Canadians who currently do not pay ATM fees, eliminating a legitimate business model that provides Canadians with a convenient service, or reducing access to ATMs in communities that are already underserviced.

Let us go back to the wording of the motion. It states:

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.

If we ask ourselves whether all Canadian consumers face unfair ATM fees as a result of an uncompetitive marketplace, the answer clearly has to be no. Canada has the second most ATMs per capita in the world. In Canadian cities, there is no shortage of ATMs to choose from. As I said earlier, if a person lives in a community with bank-owned ATMs, one can plan ahead and avoid the ATM fees altogether.

However, if a person lives in a rural community that only has high-cost white label ATMs, there is an argument to be made that the marketplace in that community is not competitive. If the only ATM a person has access to charges $8 per transaction, he or she is clearly facing unfair ATM fees, which is what I believe my colleague was trying to profile today.

To make it clear: there are cases where I believe this motion should apply and cases where it should not. For example, if people are at a bar or an adult establishment that has a high-cost white label ATM and they do not want to walk across the street or down the block to their bank's ATM, then I do not believe this motion should apply to them. I do not believe that in such cases the government should step in and act as a nanny state to save people from themselves. They should be free to spend their own money how they see fit. However, if they are in a rural or remote community and their only option is an ATM charging $8 per transaction, there is room for the government to step in and take some action.

Because of the nebulous wording of this motion, I believe the government should take a very narrow interpretation of it. The government should not regulate ATMs out of business. It should not reduce consumer choice and eliminate options of convenience. However, in cases where Canadians have no other option but to pay excessive fees at white label ATMs in order to withdraw cash from their accounts, there is room for the government to take action.

Clearly, the intent of this motion is to give people who require white label ATMs a better option than being hit with fees of $8 per transaction. The very people who are getting hit the most with these $8 transactions are the very people who can least pay them. I believe the intent of the motion is to make sure we are putting options out for people who are not able to pay $8 every time they need to withdraw $50 from their bank account.

There should be a better option. If we were to look very carefully in to regulating this, it might be the way to go.

[Libby Davies, NDP, Vancouver East, BC]

Mr. Speaker, I was surprised to hear the member say that she thinks Canadians have a choice to pay a premium charge. The reality is that most Canadians, especially in smaller and rural communities, or where banks have left their communities, have no choice but to use ATMs. The motion being debated today is about how people are being ripped off.

I would point out to the member that we are talking about federally regulated ATMs. It does not cover the ones she was speaking about, in grocery stores, convenience stores, or gas stations. We are talking about federal regulation. The motion has been very clear on that, and the debate today has been very clear on that.

I would like the member to explain, because it was not clear from her remarks, whether or not she and other members of her party support the motion today, on the basis that we do need to protect consumers.

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, quite clearly, the intent here is to get some sort of control over the unwarranted gouging of consumers. That gouging clearly occurs on these white label ATM machines, when people are charged $8 or more for using that machine. Often, people do not find that out until after they have used it, or they have no choice.

We are supporting the motion going forward, to have a look at ATM fees in that particular area. We would be supportive of seeing some sort of cap put on it, but very carefully, because we do not want to discourage another successful business in our country. However, at the same time, Canadians have to be well aware that when they use those machines they are going to have to pay a higher fee. The secondary issue is to make sure that there is more access in these rural communities and that they are better protected from the $8 to $10 fees they are sometimes charged.

[Michelle Rempel, Conservative, Minister of State (Western Economic Diversification)]

Mr. Speaker, following on my colleague's last question, whenever we are debating economic principles it is not just a matter of if we do this then this will happen. Oftentimes it is, if we do this this might happen and then five other things that we have not modelled the assumptions around.

I would like my colleague who just gave her speech to expand on a couple of things. First, we talked about how this motion may well not be subject just to the federally regulated banks, that it does not in theory include the private ATMs. If the federally regulated ATMs were pulled out of a market because of profit margin losses and replaced by private sector ones, would that not affect, or could it not affect, a certain demographic that uses those machines disproportionately? What would the impact of that be on Canadians?

Second, because I love to debate economics in this place, I wonder if she could expound on the appropriateness of the government to legislate informed choice in this matter. Do consumers not have the choice when they put their card in and the fee is listed to say yes or no as to whether they will accept that fee?

[Judy Sgro, Liberal, York West, ON]

Mr. Speaker, a big part of all of this is about educating consumers and making sure that they are fully aware when they use any banking machines.

I recently had to open a new bank account. I was told verbally and in writing about all the different banking fees, quite clearly and in really good consumer language. It is much better than it used to be earlier. It is about educating the consumer to be fully aware. It is not about putting competitive businesses out of business, because we need competition in the marketplace. We are talking very specifically in today's motion about the white label ATMs that are charging unfair amounts to the very consumers we are concerned about.

[Scott Brison, Liberal, Kings—Hants, NS]

Mr. Speaker, I want to commend my colleague, the Liberal critic for industry, for her remarks here today.

The motion itself is quite vague. It does not specifically refer to federally regulated ATMs. It simply says “by limiting ATM fees”. It is helpful that the NDP member who presented this motion has clarified that it is only intended to apply to federally regulated financial institutions.

I represent a riding in rural and small-town Nova Scotia. When I stop at Douglas Sanford's corner store on the way to Cheverie on a Friday evening, one of these machines is there. Sometimes I will use it as a matter of convenience, but it has a higher fee.

We have to think about the people for whom that ATM represents their only access to cash and to target an approach in such a way that would help them attain the cash they need without paying extra for it. It may be the only place they can get to. I am thinking of a senior, or someone with a disability or with limited transportation. I think that is what the hon. member is getting at.

Does the hon. member agree that it is not only in rural and small-town Canada but also in some inner-city communities where the same situation may exist?