House of Commons Hansard #221 of the 41st Parliament, 2nd Session. (The original version is on Parliament's site.) The word of the day was consumers.

Topics

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:30 p.m.

NDP

Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, I would like to thank my colleague from Winnipeg North for that example. It is quite a good one and rather interesting.

It is a privilege for me to sit on the House of Commons Standing Committee on Finance. In 2013, we studied income inequality in Canada. It is a reality. In fact, we are steadily sliding down the slope of income inequality. Although the income of a small fraction of the population is rising very quickly, the income of the vast majority is stagnating or even decreasing when the cost of living is taken into account.

These small fees are being charged left, right and centre, and people are being squeezed and losing a lot of their purchasing power. How can they fight back? The fact that we are leaving them at the mercy of this type of arbitrary fee being charged all over the place is scandalous. That is why we want to go one step further. This is very simple and very easy to understand and to support, and it will give all Canadians a little breathing room.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:30 p.m.

NDP

Murray Rankin NDP Victoria, BC

Mr. Speaker, I notice that in the 2013 Speech from the Throne the Conservatives promised to take action to “End “pay to pay” policies, so customers won’t pay extra to receive paper bills”.

They re-pledged to do the same thing in the 2014 budget to “eliminate the practice of pay-to-pay billing”. However, the legislation excluded banks from that prohibition. Instead, the Conservatives have been talking about financial codes of conduct, which fail to cover banking fees and are entirely voluntary.

Therefore, could my colleague comment on whether the Conservatives' voluntary code of conduct will be sufficient?

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:30 p.m.

NDP

Raymond Côté NDP Beauport—Limoilou, QC

Mr. Speaker, I thank my colleague from Victoria for his question. My answer is very simple: it is not sufficient.

The Conservatives now have a well-established reputation for being all talk and no action. Take, for example, the economic action plan and the famous building Canada plan. Every year they promise money. However, we get all kinds of complaints from all over the country, from municipalities and provincial governments, questioning whether the money is actually being spent. These governments are complaining that the federal government is blocking this money but does not provide a reason.

We are in the process of studying the budget implementation bill and one other aspect is outrageous: although the Conservatives committed to stop using the surplus from the EI fund, they used it to balance the budget this year. The Conservatives say one thing and do the opposite. Then they then claim to be good managers. Let us not kid ourselves. That is intellectual fraud. That is the underlying problem.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:30 p.m.

North Vancouver B.C.

Conservative

Andrew Saxton ConservativeParliamentary Secretary to the Minister of Finance

Mr. Speaker, I am pleased to use my time today to endorse the spirit of this motion and to review certain measures by our government that have already taken place to put Canadian consumers first. In my remarks I will also illustrate how this government has often been able to ensure positive commitments from financial institutions without resorting to mandatory measures.

It is quite remarkable to see the NDP members actually put forward any sort of public support for Canadian consumers, especially since they have voted against every pro-consumer measure that our government has introduced. Nonetheless, we will be supporting the motion today because our Conservative government has a strong record on consumer issues, and I am glad the members of the NDP are happy with that announcement. We will continue to put Canadian consumers first. We certainly hope they will too.

In doing so, however, I would like to remind the hon. member that consumer protection measures like the updated code of conduct this government released in April benefits two different groups: the businesses that rely on financial institutions to operate, and the consumers that make those businesses and ultimately our entire economy a success.

It was the Canadian Federation of Independent Business, after all, that noted that the code of conduct for the credit and debit card industry in Canada “has served merchants extremely well....[It] has done an excellent job in ensuring some fair ground rules and maintaining Canada’s low-cost debit system”.

Accordingly, a valid and constructive examination of the motion before us simply must ensure both small business and consumers are priorities. With the NDP refusing to support our measures helping small businesses, on top of all the measures to protect consumers, I question the sincerity of the NDP's motion today.

In the motion, the hon. member has trained his sights on the business-to-consumer space, the B2C space. B2C, on the other hand, describes the relationship between a company and the end user of a service. Without question, these relationships are important. Canadian families work hard to make ends meet and every dollar counts. When Canadians make decisions about how to spend their money, they must be assured of a voice, a choice and fair treatment.

These words once again recall the 2013 Speech from the Throne and the very first strokes of what was to become our consumer first agenda. It is here that hon. members may have first heard the term pay-to-pay, for it was on this occasion that we committed to end pay-to-pay policies in specific industries in Canada, starting with the telecommunications sector. Contrary to the wording of the motion, the pay-to-pay concept goes beyond banks.

For those who are not aware, pay-to-pay billing refers to a new charge on monthly phone bills that previously did not exist. This fee may cost up to $6 each month and is charged to Canadians who choose to receive their monthly phone bill by mail, that is the paper version. Here again, promises made, promises kept.

Last December, legislation prohibiting telecommunications companies from charging Canadians for receiving paper bills received royal assent. This was a very good first step, but it was by no means our last.

One of the most important relationships Canadians have is with their financial institution, and Canada's banks are world-class. The World Economic Forum has recognized Canada's banking sector as the soundest in the world for the seventh straight year. That is something of which we can all be very proud.

Our nation's financial institutions continue to meet global regulator reform thresholds on time and often ahead of schedule. Three of our six major banks count among Bloomberg's list of the world's strongest. More important, Canadians have high regard for their financial institutions: 87% have a favourable impression of banks in Canada, significantly higher than any other service providers; 75% give banks a good rating for being stable and secure; and 79% of Canadians get good value for their service fees.

This is positive news because it shows Canadians recognize that a profitable banking sector benefits communities across the country and the Canadian economy as a whole. Those countries that do not have a sound banking sector, including the ones most impacted by the global financial crisis a few years ago, have come to envy those that do.

In the banking sector, as in the telecommunications sector, our government has been proactive about ensuring that Canadians do not face unfair or undisclosed charges for services rendered. Our efforts in this regard are long standing and cut across many different areas of the banking and financial industry. They are even in collaboration with other levels of government. However, while we have a strong banking sector, we also understand the concerns of Canadians who feel nickel-and-dimed by the big banks. It is why we have introduced tough measures to protect Canadians from predatory banking practices and have continued to look for ways to protect Canadian consumers when dealing with their financial institutions.

Some of our measures leverage public education. For example, in budget 2014, we committed to raising public awareness about the associated costs of payday lending and other lending products with high interest rates. We are also giving provincial governments the space they need to fully regulate payday loans, including a 2007 change to the usury provisions of the Criminal Code.

Many more of our efforts draw on the benefits of clear disclosure to help consumers make good choices. Disclosure rules ensure that service providers, credit card companies, or federal financial institutions that offer mortgages, highlight relevant consumer information about charges and consequences in a manner that is visible and accessible. For example, the prepaid payment products regulations, which came into force last May, require disclosure of fees in a prominent information box on exterior packaging; disclosure of pertinent information on the product's use, including on how to access the full terms and conditions and a toll-free number to make a balance inquiry; prohibit the expiry of funds; and prohibit dormancy fees during the first 12 months following card activation.

To put consumers first, our government has prohibited unfair practices where necessary. That includes, for example, the use of unsolicited credit card cheques, which encourage funds to be withdrawn directly from a credit card. These cheques are considered to be cash advances, which can accrue higher interest rates and fees and do not provide an interest-free grace period.

Another example of our government's consumer commitment is the access to funds regulations, which reduce the maximum cheque-hold period to four days from the previous seven days for cheques of less than $1,500. The regulations also provide consumers with more timely access to the first $100 of a cheque.

These are some of the actions that the government has taken, which in turn have prompted changes within the banking industry.

However, our financial industry has always been a driver of positive change. Financial companies also recognize the value of treating their clients fairly, whether they be consumers or businesses. It is the Canadian way, and our government has repeatedly helped to make that happen.

For example, budget 2014 called on banks to enhance disclosure to consumers of the costs and consequences of collateral charge mortgages relative to conventional mortgages. In response, on September 3, 2014, eight major banks, and the Canadian Bankers Association on behalf of its smaller member banks, committed to providing consumers with general comparative information on residential mortgages. Banks also committed to providing specific information about these same topics to consumers on their individual mortgages at the time of or before entering into a mortgage loan agreement.

The NDP voted against all of these consumer protection measures.

Just over a year ago, Canada's eight largest banks voluntarily committed to enhancing low-cost bank accounts, and to offering no-cost accounts with the same features as low-cost accounts to a wider range of eligible consumers, especially students and seniors.

Industry-initiated change has not been limited to our federally regulated financial institutions either. Last fall, we welcomed voluntary commitments by Visa Canada and MasterCard Canada to cut credit card fees by close to 10%. Visa and MasterCard started to implement the reductions in April 2015. This is a very important commitment for retail business owners in particular.

Canadians have proven to be enthusiastic adopters of new and evolving payments technology. From the early days of automated teller machines, now known as ATMs, to newer tap and go technologies at point of sale, the days of exchanging hard cash for goods and services, for many, seem long ago and far away. I am proud to say that Canada leads in this respect.

Businesses that accept payments must now consider a much larger number of payment options, ranging from cash to debit to credit, and emerging digital technologies as well. That is why, alongside the recent release of our updated code of conduct for the credit and debit card industry in Canada, we have also undertaken a consultation, seeking the views of Canadians on how to ensure that payments innovations are safe and provide adequate consumer protection.

Payment systems are vital to the movement of money in an economy. Given their importance, the government provides oversight of these systems based on the broad policy objectives of safety and soundness, efficiency, and consideration of user interests. It is our strong hope that one of the major conversations that this consultation will spark is related to efficiency and how to ensure that our payments industry remains competitive so that consumers do not face higher costs when using new payment technology. At the same time, businesses can make the right choices about the kinds of payments they will accept.

More important to this debate today, which I am surprised the NDP has already forgotten, is that the banks have already committed to ending pay-to-pay charges. It makes this debate somewhat unnecessary, as the NDP is completely ignoring that the banks have made a commitment to the federal government that they will not charge customers for bills when money is owing.

Our government completely agrees that we should support eliminating the practice of making customers pay fees to see their bills or invoices, which is why, in the spring or summer of 2014, the banks made their commitment to ending this practice for Canadian consumers. Our government fully intends to accept the banks' voluntary commitment.

I am sure the hon. member knows that our government does not regulate the day-to-day operations of banks, but this issue is something we take seriously, which is why we are proud that we are able to work with the industry to help all consumers.

Then, there is the financial code of conduct that the member has raised. Again, I am faced with some confusion. Economic action plan 2015, the extraordinary budget that the Minister of Finance introduced this year, proposes a new financial consumer protection framework for banks. This is the same budget that the opposition has already committed to voting against, which comes as no surprise when members opposite vote against most of our government's measures without even reading them.

Economic action plan 2015 proposes to amend the Bank Act. It will strengthen and modernize Canada's financial consumer protection framework to respond to the diverse needs of Canadians. Not only will it make the consumer protection provisions of the act more transparent and consistent with regard to the banks' dealings with consumers, it will benefit all Canadians, including the most vulnerable consumers. Since it would be enshrined in the Bank Act, the framework would be mandatory.

Again, New Democrats need to read the budget before they propose their motions. Our government's use of voluntary codes of conduct has increased transparency at banks and is considered a model framework around the world. Every Canadian bank has accepted and implemented our voluntary code of conduct. We are taking it one step further to make sure the framework will prohibit certain business practices, improve access to basic banking services, and broaden requirements for clear and simple disclosure of information for banking products and services.

I am sure that the point is clear already, but let me quote from the budget text itself:

The Government of Canada intends that the Bank Act provide the exclusive set of rules governing consumer protection for banks. One comprehensive set of rules will allow banks to officially deliver national products and services and provide consumers with the benefit of knowing they have the same uniform protection when they deal with their bank anywhere across the country.

I am not sure what more the member wants. This is a clear example of our government taking true leadership on this issue and helping all Canadians, by putting these principles in law.

Let me be crystal clear for the NDP. Banning pay-to-pay bank fees is the kind of thing we intend to look at, including in our mandatory financial consumer protection framework that we promised in economic action plan 2015. Our government understands that when Canadians make decisions about how to spend their money, they must be assured that their interests come first and they are given fair treatment.

I could spend a whole day listing the measures we have introduced to help consumers and that the opposition has voted against, but I see that my time is almost up.

Let me comment on one more measure that I believe is extremely important, and that is financial literacy.

Our government has been working to support the financial literacy of Canadians since we came to power. We have created the financial literacy leader position and invested funds to ensure that Canadians have the skills and knowledge to make informed financial decisions. As we have said many times, this will not only result in economic benefits for Canadians, it will also benefit the entire economy.

Protecting consumers and supporting small businesses remain a central focus of our government. We continue to work through our many channels to effect positive change for both groups. From regulations to voluntary industry-driven codes, consumers today enjoy far greater protections than ever before, even as the products and services they enjoy also evolve in step with technology and our increasingly digital world. Canadian consumers and businesses stand to benefit first from these exhaustive efforts, which is only right and fair.

Again, while we support the motion here today, I urge the NDP to stop playing political games and finally support the countless measures that our government has introduced to protect Canadian consumers. It could perhaps start by supporting economic action plan 2015.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:50 p.m.

NDP

Andrew Cash NDP Davenport, ON

Mr. Speaker, I would like to thank my hon. colleague for that speech and support for the motion.

I would like to get some clarification. The motion calls for a mandatory financial code of conduct to protect consumers with regard to pay-to-pay fees at the banks. We would note that when the government had the opportunity to ban pay-to-pay fees in budget 2014, it excluded banks. That is why we are here today.

I would like to ask my hon. colleague to clarify that the intention is to bring in a mandatory code of conduct that would ensure these fees are banned and ask when we would see that.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:50 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Mr. Speaker, I suggest that the member stay tuned. Economic action plan 2015 proposes to amend the Bank Act to strengthen and modernize Canada's financial consumer protection framework to respond to the diverse needs of Canadians.

I should also point out that our government understands the concerns of Canadians who feel nickel-and-dimed by the big banks. That is why we have introduced tough measures to protect Canadians from predatory banking policies. We have taken action to improve low-cost and no-cost banking options for over seven millions Canadians, and we have introduced and strengthened the debit and credit card code of conduct as well.

I encourage the member opposite to stay tuned.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:50 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, I appreciate a number of the comments that the member has put on the record this morning.

One of the frustrations that many consumers have is the ever-increasing number of small businesses that will have fees, for example, for using credit cards or an ATM. A good example would be that if people want to pay for a taxi ride with Visa, they would pay an extra $1.50 just for access. We all know that the actual cost is nowhere near $1.50. It would be substantially less than that, and I would argue likely less than 25¢.

Given that we are more and more moving toward a cashless society, I want to know from the minister whether he or his government are looking at proactive consumer-based legislation to deal with monetary fees that consumers are being obligated to pay if they choose to pay, for example, with a credit card or at an ATM?

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:50 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Mr. Speaker, I remind my colleague opposite that both Visa and MasterCard Canada have agreed to lower their interchange fees to businesses by 10%. They have done that voluntarily, and it is a significant advantage for consumers, because those costs would ultimately be passed on to them, as well.

I would also like to point out that our government is providing Canadians with the information to make informed decisions about their banking needs. There are many low-cost alternatives available to Canadians, but they ultimately decide what is in their best interests and in the best interests of their families.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:55 p.m.

Essex Ontario

Conservative

Jeff Watson ConservativeParliamentary Secretary to the Minister of Transport

Mr. Speaker, I thank my colleague for his intervention today and for laying out the government's agenda with respect to protecting consumers. If I understood him correctly, the incremental approach the government is taking, first by banning pay-to-pay in the telecommunications sector, has allowed for the ability to get these types of voluntary agreements with the banks while allowing the government to proceed with what I heard the member say was a much more comprehensive approach to consumer protection in the financial industry.

I wonder if the member could confirm that this is, in fact, the approach of the government. Could he confirm that it is not just a one-off with respect to pay-to-pay for banking customers but that we are taking a comprehensive look at consumer protection broadly within that sector.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:55 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Mr. Speaker, not only are we reducing fees and making sure that fees are more competitive in the financial industry, but we are doing it in other industries as well.

In the telecommunications industry, for example, we are increasing competition in the telecommunications market by amending the Telecommunications Act to cap wholesale domestic wireless roaming rates. We are putting an end to cross-border price discrimination by cracking down on companies that use their market power to charge higher prices for consumers. We are strengthening Canada's food safety system by investing $390 million in the Canadian Food Inspection Agency's food safety programs. We are removing tariffs on baby clothing and certain sports and athletic equipment to help to reduce the cost of these goods for Canadian families. We are adopting a wireless policy focused on stimulating greater competition, which has helped to reduce wireless rates by 20% since 2008. In addition to that, we require all-inclusive air fare advertising to ensure that consumers can clearly see the total price of an airline ticket.

Members can see that the list of measures we have taken to help consumers goes on and on, well beyond the financial services industry. We just wish that the opposition would get on board and start supporting some of these important measures and stop voting against every single one of them.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:55 p.m.

NDP

Andrew Cash NDP Davenport, ON

Mr. Speaker, it is interesting, listening to my colleague opposite talk about the concern he and his government have for consumer protection. If there was that concern, why did the government not ban pay-to-pay fees for banks in the budget of 2014, when it did that very thing, under pressure from the NDP, and banned them for telecommunications and phone companies?

Additionally, I would just like to clarify that the term “pay-to-pay” was coined by a young volunteer in my office in Toronto when we were building this campaign and working to come up with a name. This young man, who was just in high school, said that it is a fee to pay a bill and that we are paying to pay our bills. That is how this whole issue got rolling.

I would like to ask the member opposite why the government did not ban pay-to-pay fees for banks when it had the opportunity? It could have saved consumers $180 million this year. It could have done that. It could have put that money back into the pockets of hard-working Canadians, but it did not. It allowed the banks to go on their merry way. Why is that?

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

12:55 p.m.

Conservative

Andrew Saxton Conservative North Vancouver, BC

Mr. Speaker, I remind my colleague opposite that, in fact, in the throne speech of 2013, it said:

End “pay to pay” policies, so customers won’t pay extra to receive paper bills;...

It was not exclusive to the financial services industry. We intended to end pay-to-pay practices in all industries. We think this is in consumers' best interests. They should have a choice as to whether they receive their bills in paper form or digital form, and they should not have to pay for that choice.

In addition to that, I want to point out that in economic action plan 2015, we have introduced measures such as delivering a new and exclusive financial consumer framework for federally regulated banks. We are strengthening the financial literacy of Canadians through a national financial literacy strategy. We are continuing the national counterfeit enforcement strategy to ensure that Canadians can have confidence in their currency, and we are supporting the growth and competitiveness of credit unions, which are essential local institutions in many communities across Canada.

Members can see that there are a lot of very good consumer protection measures we have introduced in economic action plan 2015. We certainly hope that the members of the opposition will vote in favour of them and show that they also have a commitment to helping consumers.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, I rise today to speak to the motion from the member for Davenport seeking a ban on pay-to-pay fees charged by Canadian banks.

I want to start by examining the issue of pay to pay and how it relates to existing consumer protection measures in the financial sector. Then I would like to use the rest of my time to discuss a more meaningful way to bring fairness to the middle class and those Canadians working hard to join the middle class.

I believe that the underlying issue of today's motion is one of fairness. The motion before us calls for “a mandatory financial code of conduct to protect consumers”. While the text of the motion does not explicitly lay out an objective, I believe that its main objective really is fairness, which is something any reasonable person in this House can support.

It is an issue that speaks to our founding principles, peace, order and good government, and is a recognition that we need strong consumer protection measures so that Canadians are treated fairly when they make a purchase or enter into an agreement.

There is an inherent imbalance between large institutions and large businesses and individual consumers with respect to information and power. Most individuals need the protection of strong laws and consumer protection measures to help even the scales.

Canadians are justifiably proud of our banks. We have some of the largest and most successful banks in the world. Our resilient banking system did not just happen by accident. It was shaped, largely, by reforms in the 1990s, directed, in fact, by the strong governments of Paul Martin and Jean Chrétien, when globally, the banking systems were being deregulated in Europe, the U.K., and the U.S. Canada did not follow suit at that time and did not follow the global trend of deregulation. Canadians and our banking system are better off for it.

However, every system needs balance. A strong banking system must be complemented by strong consumer protection measures that ensure fairness for Canadians.

In today's economy, access to basic banking services is essential for consumers. We are moving towards a cashless society. It is becoming nearly impossible to carry on today without a bank account. Even the federal government is pushing Canadians towards an increasingly cashless society and electronic transactions. The government is in the midst of phasing out, for instance, its use of printed cheques. As of next April, Canadians will be required to accept all payments from the federal government by direct deposit. This will include tax refunds and federal child benefits as well as CPP, OAS, and EI payments.

The government has said that it will only issue cheques under exceptional circumstances. For example, it will continue to issue cheques to people who live in remote communities where they do not have access to a financial institution. For everyone else, it is clear that the government sees bank accounts as a prerequisite to receiving financial support.

Liberals believe that the government ought to show more compassion, understanding, and flexibility in allowing more Canadians to continue receiving cheques. For instance, we can look at situations with many of the elderly, who may be less disposed to using electronic banking, or low-income Canadians, who may not have ongoing and reliable access to high-speed Internet or who cannot afford those connections on an ongoing basis.

We recognize how essential it has become for Canadians to have access to basic banking services, particularly, as I mentioned, for low-income Canadians, who cannot afford to see their meagre earnings eaten up by large fees. That is why, in 2001, the Liberal government brought in legislation to guarantee access to basic banking services for all Canadians, including low-income Canadians. It is why the Liberal government banned the banks from placing a hold on government cheques valued at $1,500 or less. It is why a Liberal government brought in rules requiring each of the largest banks to offer a standard low-fee bank account. These accounts include between eight and 12 transactions per month as well as a free debit card, free deposits, and free monthly statements.

At the same time, a Liberal government established the Financial Consumer Agency of Canada to monitor the financial services industry, educate consumers, and enforce new, stronger consumer protection measures. These reforms were introduced by a Liberal government. They were an important step forward, but a lot has happened over the last decade. Technology has changed everywhere. Smart phones are now everywhere. More Canadians are doing their shopping and banking online, and a growing number of companies in telecommunications, broadcasting, and the banking sector are pressuring Canadians to pay their bills online as a way to cut costs.

In the past few years, we have seen a proliferation of pay-to-pay fees. Let us be clear about what that term actually means. “Pay to pay” is widely understood to mean the practice of charging customers an additional fee for mailing them a paper invoice or statement, in a lot of cases. It does not mean an end to all transaction fees for payments.

Last year, the Public Interest Advocacy Centre estimated that Canadian consumers were paying between $495 million and $735 million per year to receive paper bills for telco and banking services combined. Of that total, $180 million was for the banking sector. PIAC also conducted a survey that found that a third of Canadians were uncomfortable receiving bills or statements online, for a variety of reasons. I mentioned seniors, particularly, who may be averse to that.

Many Canadians are worried about falling victim to online scams and identity theft. Earlier this year, thousands of employees at the Canada Revenue Agency were unable to identify a fake email phishing scam that was sent to them as part of a test. It is understandable that cautious Canadians would take extra steps to avoid the possibility of being scammed.

Another reason some Canadians insist on paper billing is because they simply do not have a choice. They do not have high-speed Internet at home. This is a significant barrier to low-income Canadians. According to Stats Canada's latest Canadian Internet use survey, only 58% of households in the lowest-income quartile have Internet at home. That compares to an access rate of 98% and 94% in the first and second income quartiles. Not surprisingly, the PIAC survey found that low-income Canadians are more likely to pay their bills in person or by mail rather than online, and they are not alone.

Canadians living in rural and remote communities are less likely to have reliable high-speed Internet at home. Seniors are less likely to use the Internet regularly, making them more likely to end up paying extra fees for paper billing.

It seems unfair to punish Canadians with extra fees because they are poor, they are low-income, or they live in an area where they cannot get high-speed Internet. It seems to me that we are disadvantaging those who are already disadvantaged.

PIAC estimated that Canadians without Internet access spend between $77 million and $102 million per year on paper billing. Pay-to-pay fees were virtually unheard of before 2010, but between 2010 and 2014, a system came into place that forced some of these most vulnerable Canadians to pay extra fees just to find out how much they owed for banking and telco services, which are considered essential in the modern world.

In the last few months, new consumer protection measures have come into place. Bill C-43 introduced measures to end pay-to-pay fees in the broadcasting and telco sectors. It prohibited service providers from charging customers who receive paper bills for wireless, Internet, telephone, and television services. Liberals voted in favour of these measures during clause-by-clause consideration of the bill.

There have also been new measures to limit bank fees. The government has built on the reforms Liberals introduced in 2001 and expanded low-fee and no-fee bank accounts. Students, low-income seniors, and Canadians with disabilities are entitled to basic banking services with no fees. With low-fee and no-fee accounts, many Canadians can avoid pay-to-pay fees at their banks.

However, according to the banks around 15% of Canadians pay fees for mailed bank statements. Apparently, the banks are willing to waive these fees for customers who face economic hardship or who do not have Internet access, but there is more that can be done to avoid pay-to-pay fees across the federally regulated financial sector.

Of course, the devil is in the detail. Closing the door on pay-to-pay fees would not mean a thing if it leads to similar fees popping up elsewhere. The government must be clear in how it defines the term pay-to-pay. Does it refer to invoices for accounts where the customer owes money, such as credit cards and mortgages? Does the government have a broader interpretation that would include statements for all financial accounts at the bank, including investment accounts, or is the government's interpretation even broader still? It seems that a small number of people are trying to morph the term into something far more comprehensive, covering almost any financial transaction fee on any payment. Therefore, we need some level of clarity around that. No one likes bank fees, but banning transaction fees in a modern world of e-commerce has to be done discerningly.

It is really important to recognize that there are many meaningful ways we can bring fairness back to Canadian families who are struggling. Today's motion reflects one way. The Liberal plan for fairness is another way to help struggling middle-class Canadian families and those Canadians working hard to join the middle class.

The Liberals have put forward a plan to stand up for Canadian middle-class families. We recognize that too many Canadian families are struggling just to make ends meet. They are struggling under the crushing weight of record levels of personal debt, $1.66 for every $1.00 of disposable income. Canadians have been taking on more debt as the job quality in Canada has deteriorated. In fact, according to CIBC Economics we have the worst job quality in Canada that we have had in 25 years. We have seen full-time jobs with benefits being replaced by part-time work.

Too many middle-class Canadians have not had a real pay raise in a long time and too many young Canadians have yet to really start their careers. They face a labour market that still has 160,000 fewer jobs for young Canadians today than back in 2008. Young Canadians face a growing pressure to take unpaid work, just for the work experience. We have all heard of recent graduates who are stuck in a cycle going from unpaid internship to unpaid internship, while their parents are struggling to help pay the bills. That is another reason why more and more Canadians are going deeper into debt, the direct financial subsidization of young Canadians who have good educations but cannot find good work to support themselves.

Many middle-class parents are delaying their retirement in order to help adult children who simply have not been able to achieve financial self-sufficiency. It is no longer unusual to hear of young Canadians still living with their parents into their late 20s or beyond. Meanwhile, income inequality has grown, and growing income inequality does not just go against our sense of fairness, it is also bad for economic growth. We have learned that from the IMF, among others.

A Liberal government would make the tax system fairer and cut the middle-class tax rate by 7%. That is a $3-billion tax cut for those who need it the most. We could afford to do this by asking the wealthiest Canadians to pay a little more so the middle class can pay less. We would introduce a new tax bracket for the top 1% on incomes over $200,000.

We would also cancel the Conservatives' $2-billion income splitting scheme that the C.D. Howe Institute has actually told us will only benefit 15% of Canada's richest families. Income splitting provides $2,000 more to those who do not need the help. It does nothing to help single parents or low-income families. In fact, according to the C.D. Howe Institute, 85% of Canadian households, those who need the help the most, will not get a dime from income splitting.

According to the Parliamentary Budget Officer, higher income families are not only more likely to qualify for benefits under income splitting, the average benefit actually rises with family income. The Conservatives are providing the most help to precisely those who need it the least. We do not think it is fair to ask struggling Canadians to pay for a $2,000 tax break for the Prime Minister's family or, in fact, for the family of the leader of the Liberal Party of Canada.

Income splitting is not just unfair, it also needlessly complicates our tax system and is bad for growth. It is complicated that we need to follow an 85-step process just to apply. Even the tax experts within the Department of Finance who wrote the rules got it wrong the first three times it came to Parliament. It is also bad for growth. The PBO has shown that income splitting will actually weaken our economy rather than strengthen it. He estimates that it would cost the equivalent of 7,000 full-time jobs.

The Liberal plan would do more to grow the economy and help families with the high cost of raising kids. A Liberal government would provide one bigger tax-free monthly cheque to Canadian families with children. Under our plan, every family earning less than $150,000 per year would receive more monthly benefits.

With the Liberal plan's new Canada child benefit, a typical two-parent family with two children earning $90,000 per year would get $490 tax-free every month. Under the Conservatives, the same family today only receives $275 after tax.

When we compare the two plans, the Liberal plan would provide an extra $2,500 per year tax free over what Canadians are now getting under the Conservative government. Therefore, that family making $90,000 a year with two children would be $2,500 better off every single year.

With the Liberal plan, a typical single-parent family earning $30,000 a year with one child would get an extra $533 tax free every month. That is significantly more generous than the $440 that family gets under the Conservatives currently.

A Canadian family making $45,000 per year with two children would receive an extra $4,000 per year after taxes under the Liberal plan for fairness than they are receiving right now under the Conservatives.

It boils down to choices, and Canadians have two fundamentally different choices now. The Conservatives are offering tax breaks for the wealthy, and the Liberals are offering a plan to help the Canadian middle class with a middle-class tax cut and a new, fairer, more generous and simpler Liberal Canada child benefit.

Liberals believe in a country that works for everyone. We will put more money in the pockets of Canada's middle-class families and those Canadians who are working hard to join the middle class.

In conclusion, today's motion focuses on small fees that are an irritant to Canadians. It is a step that we expect all parties can support. However, a Liberal government would go further by tackling the bigger issues facing Canadians.

We would provide real, meaningful help to Canadian families who are struggling and a middle-class tax cut that would put more money back in the pockets of the Canadian families who need the help the most. A Liberal Canada child benefit would help vulnerable Canadian families, low- and middle-income families with children who need the help the most.

We can afford to do that and still balance budgets, because we are prepared to make a choice by asking wealthier Canadian families to pay more. It is fair and it is also good for jobs and growth, because when we cut taxes on the middle-income and lower-income Canadians, it is more stimulative to the Canadian economy.

We will be presenting more plans for jobs and growth in the future and fairness for Canadian middle-class families. We are looking forward as a government moving forward to really helping those families after the next election.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:20 p.m.

NDP

Andrew Cash NDP Davenport, ON

Mr. Speaker, I would like to thank the hon. colleague for his comments around these fees. I wanted to clarify that a pay-to-pay fee is a fee one has to pay to pay a bill. That is what a pay-to-pay fee is. It does not matter whether it is a bill that comes in the mail or one that the banks charge. This is what RBC was charging but backed down due to pressure from consumers and the NDP.

The hon. colleague seems to be concerned about ensuring that the banks have the ability to charge fees for things. I wanted to get his opinion about this. Today, RBC announced that it was charging a new $5 fee for its high-interest savings account. Every time customers go over one transaction they will have to pay $5 to put money into their savings account. The member was talking about how important it was for banks to charge transaction fees. Is he in favour of this fee?

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:20 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, although I appreciate the question from the hon. member, one would think that I had said in my remarks that we did not support his motion. We do support his motion, and his gratitude is overwhelming.

In terms of the specific fee that he mentioned, I have not seen information on that. If it is on the service he has described, it seems high and exorbitant. However, I have not reviewed that fee. I am not sure how the hon. member likes to conduct himself, but I like to get the facts on something before I offer an opinion. I have been around long enough to not offer an opinion until I have seen the facts on something like that. Therefore, with no disrespect to the hon. member, I would like to have a little more detail and I would be glad to discuss it with him at any time.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:20 p.m.

Conservative

John Carmichael Conservative Don Valley West, ON

Mr. Speaker, my colleague talked about the fairness of new plans that he and his party are introducing. It was only a week ago that his leader talked about plans not having to be fair. Fairness is what we have delivered with the universal child care benefit program. Clearly, four million families qualify and some seven million adults. That is why our government has consistently introduced consumer-friendly measures, including consumer debit and credit card code of conduct, and increasing access to low- and no-cost banking options, programs that the opposition and the third party have voted against. I wonder if my colleague opposite would maybe comment on fairness and why he did not support these measures, which were geared to consumer fairness.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:20 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, I would direct my colleague in the Conservative Party to his House leader and other members of the Conservative government who are responsible for the omnibus bills that force the House opposition parties to vote on hundreds of items that are totally unrelated to the fiscal situation of the government, which should be budgets. The government is in the habit of putting in massive pieces of legislation that affect a wide range of unrelated areas of government and forces us to sometimes vote against measures that if we were provided with an opportunity to vote on as individual items we could possibly support. Therefore, if he wants to understand why opposition parties, New Democrats, Liberals and independents vote against measures that on the surface sound like they might make sense, then he ought to ask his own government why it put those more sensible measures in with measures that we fundamentally disagree with as part of omnibus legislation. I would direct him back to answer a question with a question. The hon. member ought to be asking his own government why it continues with this counter-democratic practice of omnibus legislation that forces opposition parties to vote against some reasonable measures that we could potentially support if the government did not continue with this ham-handed anti-democratic omnibus approach.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:25 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, my colleague said that the core issue of the motion was fairness. I appreciated many of the comments he made. In a comparison between the Liberal Party's approach to fairness versus to the Conservatives' attempt at fairness and the many deficiencies we have seen in the last budget they presented, I am wondering if the member could expand upon the importance of getting it right. If we get it right, we will have a healthier, stronger middle class, and if we are successful at doing that, we will have a stronger economy. Would the member not agree? Could he provide some comments?

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:25 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, it is an important question, and I thank my colleague from Winnipeg North, who intervenes in this House from time to time and does so with great passion and with an understanding of the issues. I have campaigned with him in his riding, and there is no member who has any more direct relationship with his constituents than the member for Winnipeg North. I have seen that in his riding.

The whole issue of combining a plan for fairness with one for jobs and growth is based on what some economists describe as a marginal propensity to consume or to spend. What that means is that if the same amount of money is provided to low-income or middle-income families and to high-income or wealthier families, the low-income or middle-income families are more likely to spend that money than the high-income or wealthier families. It is actually good for jobs and growth.

Economists, including our colleague from Markham—Unionville, who is a former chief economist of the Royal Bank of Canada, understand the importance of providing a real break to low- and middle-income families. Those are the families that are struggling the most, so it is fair and it is the right thing to do in terms of tackling inequality

Incidentally, inequality is really bad for jobs and growth, and we are getting a lot of reports on that. Measures to address inequality for low- and middle-income families, such as cutting their taxes and increasing their benefits, actually are good for jobs and growth as well.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:25 p.m.

NDP

Christine Moore NDP Abitibi—Témiscamingue, QC

Mr. Speaker, since my colleague spoke about the measure, I want to ensure that he understands the Canadian tax system. If we reduce taxes on an entire bracket in the middle, the people who benefit are those who have higher incomes. They will benefit from the tax cut for this entire bracket. If we compare a single person who has an income of $50,000 a year and a single person who has an income of $150,000 a year, it is obvious that the latter will benefit more from the tax cut.

Does the member agree with what I just said?

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:25 p.m.

Liberal

Scott Brison Liberal Kings—Hants, NS

Mr. Speaker, I would like to thank my colleague for her question. I have a good understanding of our tax system. I agree with my colleague that our tax system is too complicated. Under the Conservative government, it has also become less fair.

That is why the Liberal Party has presented a plan to cut taxes for the middle class. This plan includes a new tax bracket for incomes over $200,000 a year. This will make our tax system fairer and will really help middle-class families. I think that makes sense for our economy and our society.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:30 p.m.

NDP

Randall Garrison NDP Esquimalt—Juan de Fuca, BC

Mr. Speaker, I am very pleased to rise today to speak on the opposition motion. I will be sharing my time with the member for Newton—North Delta.

I think the motion before the House is very important for most ordinary Canadians. It calls on the government to ban all pay-to-pay practices by banks through the enactment of a mandatory financial code of conduct to protect consumers.

Let us take a minute to think about who we are talking about. We have seven nationally chartered banks but only five really big banks. Just so we understand their financial position, let me quickly review that for hon. members.

The Royal Bank of Canada has assets of $655 billion; Toronto-Dominion has $557 billion; Scotiabank has $496 billion; the Bank of Montreal has $236 billion; and CIBC has $336 billion.

In the first two quarters of this year alone, the banks turned a profit of $15 billion. That is only halfway through the year, so these companies are not struggling to make ends meet.

These are companies with enormous assets, built on the deposits of Canadians. If we run through the big banks, we see that the Royal Bank holds nearly $400 billion of our money, the Toronto-Dominion Bank $391 billion, Scotiabank $350 billion, the Bank of Montreal $236 billion, and CIBC $336 billion, so scrambling to extract every last fee out of Canadians is not something they have to do to stay afloat.

They are remarkably stable banks, and I give them credit for the good job they have done in achieving that stability through rough economic times.

I also want to acknowledge that these banks have more than 250,000 employees who provide, by and large, excellent service to consumers and also contribute a lot to their local communities in terms of charitable activities and fundraising for those charities.

In particular I want to acknowledge the employees of the Toronto-Dominion Bank. As the LGBTQ spokesperson of the NDP, I know the Toronto-Dominion Bank has been very generous in supporting Pride activities across the country and encouraging the end of homophobia in the workplace, both as it affects their employees and as it affects their customers, so I am not saying that banks never do anything good. They quite often do. However, what I am saying is what we are saying in this motion: there is no need for the banks to extract $180 million a year in pay-to-pay fees.

We are standing in the House now with the government saying it is in favour of the motion. That is very interesting. If the Conservatives had just put this measure in the budget, Canadians would already be saving $180 million. Did they simply forget, or did they just discover they are in favour?

I say “forget” quite seriously, because in their throne speech in 2013, they promised to end pay-to-pay fees in federal jurisdiction, and they actually did so. However, when they did, they ended the fees only for telecommunications companies, not the banks. The banks were exempted. Either there was some lobbying going on or the Conservatives forgot their promise to end pay-to-pay fees in the public sector.

The Liberals are also saying they are in favour, but I have to remind the Liberals that they are the ones who brought in all the voluntary financial codes of conduct for banks. They were not mandatory codes of conduct, but voluntary ones, and we have seen again and again that voluntary codes of conduct for financial institutions do not work.

I want to cast back to another example, one that is very important to some of my constituents, and that is what happens when we have a dispute with a bank. In 1996, to their credit, the Liberals set up what was called the Ombudsman for Banking Services and Investment. That was way back in 1996. If an individual had a dispute with the bank, that person could go to an independent, non-profit organization and get mediation of that dispute and some help in taking on the big banks.

Over time, the banks began to not like the decisions of the non-profit, neutral, and independent mediator, so in 2008 the Royal Bank of Canada pulled out. Why? It was because the Liberal legislation was not mandatory. It was voluntary. When the Royal Bank pulled out and got away with it, the Toronto-Dominion Bank watched very closely, and in 2011 the Toronto-Dominion Bank pulled out.

There was some question then raised again in the House by the NDP about whether they could actually get out of having this independent mediation service. This issue was clarified by the Conservatives in 2012, but they clarified it this way: they said banks are required to have a third party dispute resolution mechanism, but they did not specify it had to be the independent, non-profit Ombudsman for Banking Services and Investment.

What did the Royal Bank do and what did TD do? They hired companies to provide the independent third party mediation services.

If a client of one of the banks has a dispute, how would that person feel about taking the dispute to someone the bank has hired for an answer? I think most Canadians would see it as lacking the basic independence that would create confidence in decisions of that third party.

In summary, the government had a chance to bring the banks back under the Ombudsman for Banking Services and Investment but did not do so, and the Liberals have been remarkably silent on this issue of dispute resolution with the banks.

Is it just pay-to-pay fees? I heard some people asking why the NDP was picking on such a minor thing. That question does not take into account that it is not a minor thing for most people, and when the totals add up to $180 million taken from Canadians for paying to pay, it is actually a large thing for most consumers.

However, it is not the only area in which the NDP has been active in trying to point out that the voluntary codes of conduct on fees simply do not work. In 2012, we did a campaign to point out the enormous amount of money being collected by the banks on transaction fees. These are fees charged for putting people's money into their own accounts or taking money out of their accounts. It is their money in and their money out, but the banks charge fees to do that. The banks say there is a cost to these transactions, so they have to charge people for them.

Our consumer affairs critic worked very hard to discover the actual cost to banks. We know what they charge: they charge between $1.50 and $3 for every transaction for people to put their money into their own account or to take it out, unless they are under a special plan. Then the banks give a few transactions for free, because otherwise there would be a total consumer revolt.

What is the real cost? It is 36¢ per transaction.

However, when the NDP put forward a motion in the House to cap those bank transaction fees at 50¢, still allowing a nice profit to the banks, neither the Liberals nor the Conservatives supported it. They said that under these voluntary codes of conduct, it is up to the banks to decide if their fees are appropriate or not.

Once again, consumers are left with very little recourse, because when we check and compare bank fees, we find that these fees are almost all the same, so if consumers are unhappy with one the big five and go to one of the others, they find the same conditions.

I want to raise another thing that we have not addressed today in this motion. That is the question of mortgage discharge fees. What we have seen increasingly in Canada is that when people pay off their mortgage and are finally free of the bank and own their own house free and clear, the bank charges them for paying off that mortgage.

Initially what we had in Canada what was called a mortgage discharge fee. I checked today, and in the big five banks, mortgage discharge fees range between $200 and $400. I grant that there are some paperwork costs, but the banks have been making a profit off the mortgage for 25 or 30 years. They are not loaning the money for free. They are charging interest, but when it comes time to pay off that mortgage, people have to pay to pay.

What we have seen in the last five years, however, is a proliferation of fees. Now there is not just the mortgage discharge fee; sometimes we are also charged an e-registration fee. In Ontario, that runs to $70. We pay the bank to pay off the mortgage, and then we pay to register land titles stating that we paid off the mortgage, so we are paying to pay and then we are paying to tell people we paid.

Some people are also charged what is called a reinvestment fee. The banks have decided that if people pay off their mortgage and go somewhere else and the bank has to find a new borrower, we should pay the cost of that. A reinvestment fee of $300 is charged by most of the banks to reinvest the money we just paid them back. Essentially, we have to find them a new client. As well, there is a reassignment fee of $260 if we change banks, and of course all of the banks charge very large fees for prepaying a mortgage.

I have a lot more to say about the practices of banks, but in conclusion I want to say that I am not attacking the employees of banks. For the most part, employees are like the rest of ordinary Canadians. The problem they have is that they face the wrath of consumers at the wicket or in the office when it comes to paying these fees, and I do have some sympathy for them.

What we heard today is that all parties are in favour of ending these pay-to-pay fees. I look forward to this bill perhaps passing unanimously in the House, and when it does, I would also like to see some action. I hope we are not in the situation we saw with removing the tampon tax or with other things the Conservatives have voted in favour of, when they simply did not take the action they could have taken to save consumers money right away.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:40 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, again, I appreciate many of the comments made by the member. It is important we recognize that as time continues to move forward, particularly technology with the Internet, telephone banking, and so forth, and as we go more and more toward a cashless society, consumers are inundated with all types of fees, from credit cards fees, ATM fees and banking fees. Today we are talking about people who want to have a paper bill mailed to them having to pay an extra fee for that. It seems no on in the House agrees with that in principle.

Disposable income of Canadians is of critical importance. That it is what drives our economy. The healthier our middle class, the more we will see a strong economy. Having fees such as we are talking about now takes away from one of the driving engines of our economy. In other words, let our consumers have the money to spend.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:40 p.m.

NDP

Randall Garrison NDP Esquimalt—Juan de Fuca, BC

Mr. Speaker, the member for Winnipeg North raises exactly the point. Consumers, especially in the lower-income groups, have very good uses for that money, much better uses than increasing bank profits.

However, there is one thing we tend to miss when we talk about this transition to a cashless society. I just looked at a study this morning. It showed that this was increasingly true for those in the top third of the income ranks, people who tend to pay everything electronically online. However, for those in the bottom third of income ranks, close to two-thirds of people do not actually pay things electronically. This includes a lot of seniors and other low-income people.

When we talk about a cashless society, we have to be careful that we are not only talking about the privileged sectors of our society, which have the luxury of Internet connections and the ability to do all their banking online.

Opposition Motion—Financial Code of ConductBusiness of SupplyGovernment Orders

1:40 p.m.

NDP

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

Mr. Speaker, it is truly a sad situation.

The people in our riding are telling us that it makes no sense to go to the bank and pay fees to access their own money, which they have so little of. The systems are such that it is mandatory for this money—whether it is old age security, family benefits or their own pay—to be deposited directly into their accounts. Most of these payments are made via direct deposit.

However, they are charged pay-to-pay fees in order to use what belongs to them. They do not have the right to use what they have earned. Thus, they have to spend some of what they earn on a fee that makes banks richer, because they cannot directly access their money.

I would like to hear what the member has to say about that.