Mr. Speaker, I am pleased to be able to take a few minutes tonight to comment on Motion No. 574. I would like to read the motion for anyone who happens to be following the discussion:
That, in the opinion of the House, small- and medium-sized business owners are the driving force of job creation in Canada, and Canadian retailers and merchants pay credit card merchant fees that are among the highest in the world, and therefore the government should take immediate steps to make the cost of living more affordable for the middle class by: (a) lowering costs for businesses and consumers by reducing transaction fees charged to merchants; and (b) allowing merchants to disclose to the consumer the transaction costs relating to the payment method chosen at the point of sale.
I also want to speak about the need for measures like this, the need to support more small and medium-sized businesses, and the consumers and the communities who rely on them.
To thousands of Canadians, the need to support small and medium-sized businesses is obvious. I only wish the Conservative government was of the same mind.
Small businesses account for about 30% of Canada's GDP, while medium-sized businesses account for an additional 9%. Combined, small and medium-sized business owners account for 50% of all net job creation. With numbers like these, one is left to wonder why budget 2015/17 is silent on these issues. Budget 2015/17 fails to offer even a glimpse of a plan for job growth and it ignores the fact that unemployment is still higher than it was before the recession began, all of this while remaining oblivious to the government's rhetoric on its so-called red tape reduction. As with all things Conservative, taxpayer-funded ads always trump real action.
In contrast, Liberals know a strong economy ensures that every Canadian has a real and fair chance at success. That means growing incomes and real job opportunities by supporting and promoting the success of small and medium-sized businesses. Protecting and promoting the interests and advancement of small and medium-sized businesses and consumers has long been a cornerstone objective of the Liberal Party of Canada and the Liberal caucus.
While this specific motion is sponsored by an NDP MP, the Liberal caucus has a history of working to lower the fees and interest rates paid by small and medium-sized businesses and their customers, and we are glad to have NDP support as we move toward this goal.
As just one example, in 2009, worries over merchant fees and billing practices prompted members of the Liberal caucus to call for more protection than would be provided by any voluntary or industry-imposed code of conduct. The Liberal caucus sought regulatory and legislative interventions similar, but far more comprehensive and in focus, to Motion No. 574.
Our plan included measures to end double-cycle billing, to allow consumers to opt out of credit card contracts if interest rates are increased by providers, and a full range of measures aimed at helping small and medium-sized businesses provide goods and services to consumers at a fair and reasonable price. However, the Conservatives refused to be swayed.
A voluntary code, authored by the Conservatives, was an inadequate attempt to ease concerns sparked by the entry of Visa and MasterCard into the debit and credit market. The Liberal caucus rightly feared that without enforcement tools, any code of conduct for debit and credit card companies would miss the mark.
The fact is small and medium-sized businesses exist at the bottom of the financial food chain. This means their ability to effectively negotiate terms and arrangements with banks and other lenders is very limited.
I believed then and I believe now that we need balanced but serious measures to deal with these issues on behalf of small and medium-sized businesses, not voluntary measures.
Now, to some, particularly those sitting on the other side of the room, these matters should be sorted out by the markets. Proponents of an unregulated market often suggest that government intervention will ultimately hurt consumers. They often cite Australia's credit card fees, card benefit reductions, and the introduction of surcharging as consequences of interchange fee regulation.
This narrow thinking has long been a cornerstone, of course, of Conservative fiscal philosophy, despite pleas to the contrary as well as evidence to the contrary from the small business community. This hands-off approach to the problems faced by small and medium-sized businesses is plain wrong, and it allows large lenders to run the table on small businesses.
Let us look at real-world evidence. As recently as yesterday, national media reports verified that starting on June 1, Canada's major banks are introducing new or higher fees for a variety of accounts and transactions, including debit purchases, mortgage and loan payments, and children's accounts.
These changes are hitting everyone, from children trying to save for their future education to seniors and small business owners trying to manage their already limited resources. The market is regulating the price of these things, but not to the benefit of small and medium-sized businesses and those who rely on them.
The Financial Consumer Agency of Canada looked into the issue of bank fees and whether the sector has the best interests of consumers in mind. While the report avoided any solid conclusions, it did find that the average monthly fee on chequing accounts increased by 13.6% between 2005 and 2013. More troubling still, during the same period, it was found that there was a 46% increase in so-called variable fees, that is, one-off transactions that are not covered by the regular monthly banking plans. All this happened while the banking sector was enjoying record profits.
Of course, these examples are consumer based, and Motion No. 574 primarily focuses on the business end of the discussion, but there are clearly crossover implications.
My husband and I owned and operated a small business for many years, so I know very well what it is like to worry about making payroll or settling accounts or simply running out of money at the end of the month.
Higher bank fees, whether merchant fees or any other form of variable cost, hit small businesses right in the wallet and hinder their prospects of success. I am tired of throwing small business owners to the whims of the market. It is time to reset the balance and give those who are really driving the economy a chance at success.