Debates of Nov. 7th, 2024

Refusal of Witness to Respond to Questions from Standing Committee on Public Safety and National Security

[The Deputy Speaker, Chris d'Entremont]

I thank the member. As I said, the Chair hopes to be able to provide a response to the House as soon as possible. I ask that members provide a response as soon as possible so that the Chair can make a ruling quickly.

The House resumed consideration of the motion and of the amendment.

Industry and Technology

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, first of all, I would like to say that the question of privilege just raised appears to be very worrisome. I am sure that once the Speaker has heard the views of each party, he will make a very enlightened decision.

Today we are debating the 20th report of the Standing Committee on Industry and Technology. It deals with interchange fees, the fees that credit card companies charge businesses. This is a very important issue. As soon as I was elected to the House, businesses in my riding asked me about it. Convenience stores, gas stations and grocery stores say it makes no sense. Their business model relies on a high volume of sales with small profit margins. The share of their costs that goes to credit cards is high, because every time a transaction is paid for with a credit card—whether it is a full tank of gas, some groceries or a chocolate bar—the fee charged is very high. The fee is much higher than elsewhere in the world, in many countries. I will be citing at least one case soon.

This erodes the revenues of merchants. We know that grocers, convenience store owners and small businesses operate in a highly competitive environment, while credit card companies practically form a duopoly or oligopoly. Apart from Visa, Mastercard, and maybe American Express, there are practically no other cards in use. As a result, these credit card companies can band together and charge exorbitant rates.

The Standing Committee on Industry and Technology has started studying the issue. After hearing testimony from certain witnesses, and before even drafting a full report and getting to the bottom of the issue, it decided that the situation was serious enough to immediately send the House a report entitled “Potential anti-competitive behaviour in Canada's e-Transfer ecosystem”. The website of the Standing Committee on Industry and Technology states the following:

Pursuant to Standing Order 108(2), your Committee has considered the matter of Credit Card Practices and Regulations in Canada.

The report simply contains the following sentence, which reads:

Following testimony from banking executives, your committee recommends that the Competition Bureau be encouraged to investigate potential anti-competitive behaviour in Canada’s e-Transfer ecosystem, and if deemed necessary, the broader electronic payments industry in general.

The members of the committee realized how big of a problem this is and determined that the Competition Bureau needed to quickly address it while the committee continued its study. That is what we are debating today.

Obviously, we are strongly in favour of this. I would be surprised if there were any member of this House who is not favour of it because, as I said, as soon as I was elected, many businesses in my riding and across Quebec began asking me about this and continue to do so. I am sure that all members of the House are being asked about the credit card fees being imposed on consumers and the fees that businesses have to pay. This is still happening.

A little after 2015, Liberal member Linda Lapointe introduced a private member's bill. She received a rather choice spot in the order of precedence when her name was picked out of the hat. Ms. Lapointe ran a grocery store in her riding. She thought that this was so important that she used her round to raise the issue. The Liberal government ended up pushing back her turn to speak until it opted to make her a parliamentary secretary, the immediate effect of which was to strip her of her private member's bill. This was the first action the Liberal government took on the question of fees charged to merchants. The party had among its ranks a member who had a grocery store and who chose to use her parliamentary privilege to appeal to the House for changes to be made. I repeat, I do not see who could be against this, since it affects all businesses in our ridings. In the end, the government found a strategy to ensure that the question never came up for debate.

At the same time, in the Bloc Québécois, my colleague from Lac-Saint-Jean introduced a bill on the same topic, with basically the same effects, but with the election and the minority government, it never came up for debate. It is time that that changed.

In 2022 there was a ray of hope when the Minister of Finance indicated in her budget that she was setting the situation right. We thought we had a nice victory to celebrate, and that at last the minister had gotten off her high horse and seen the light.

She said that the matter of interchange fees on Visa and MasterCard transactions would be settled, but as we get more experience we are beginning to understand the way things work. They say all the right things and they say they are going to solve the problem. The fine print at the bottom of the page, however, says that the government will start by asking the credit card companies to fix the problem on their own. If they do not, the government will settle the matter and create a law. Thus, the Minister of Finance and the government are fine with the temporary, rather symbolic measures that the credit card companies have taken, which change nothing for grocery stores. In fact, grocers have appealed to us. I will return to this.

There is a link between what the credit card companies are doing, the fees they charge merchants and the price for a basket of groceries. This is highly significant. We have been living with inflation for years now, and for years the government has said it would take action. Last year, shortly before Thanksgiving, the Minister of Innovation, Science and Industry said that he had spoken to grocery store representatives and that turkeys were on sale. The thing is, though, that every year on the eve of Thanksgiving, grocery stores offer a deal on turkeys, since Thanksgiving is right around the corner. The minister said it was thanks to his intervention, but we could see that his intervention did not fix the problem.

There is one specific thing the government can do to solve the problem: address interchange fees and the fees that credit card companies charge grocery stores. This how the government can intervene to bring grocery prices down. What is it actually doing? The Minister of Finance and the government are settling for the voluntary measures Visa and Mastercard chose for themselves. Grocery store owners reached out to us and told us that it is not working. They say credit card companies' voluntary measures are not doing anything for them, so the government needs to step in. I forwarded that letter along with a summary of their demands to the minister more than two months ago. As we can see, nothing has changed.

What is the problem? In Australia, for example, the fees that merchants can be charged are set through regulations and laws. They are capped at 0.5%. Here, the average is 1.4%, three times higher. Why are our fees three times higher? Are credit card fees, transactions and administrative expenses higher in Canada and Quebec than in Australia? I do not think so. I think that Australians had the necessary political will to intervene and pass legislation. They saw an oligopoly, and they knew that the free market only works if there is competition. They saw that companies were using their oligopoly to get more value and decided that that was unacceptable, so they reduced the fees to 0.5%. Here, the fees are 1.4%, three times higher. Some credit card companies even charge merchants up to 4% in fees, while, in Australia, they pay eight times less, or 0.5%.

I studied economics. In economics 101, we are taught how companies react. Companies will do whatever it takes to maximize their profits. If they have an oligopoly, they will use their power to increase fees, get more value and earn more profits. I taught that every semester in the introduction to economics class I used to teach at CEGEP. The government knows this, so it is up to the government to intervene by making regulations or passing laws capping these fees.

The government says that it is doing everything it can to lower the cost of groceries. However, there is one change it could make that it has known about for years. A Liberal member even tabled a bill on the subject. If, for example, fees were set at 0.5% instead of 1.4%, that would be almost a full percentage point lower. Grocery prices would fall by almost one percentage point. The major credit card companies would make normal profits rather than excessive profits. However, the government refuses to make that happen. What did the government do? As I was saying, in the 2022 budget, the minister said that the government was going to do something, but that the companies would have to tell the government what they wanted to do first.

Here is what these credit card companies did. They crunched the numbers. Keep in mind that, just a few years earlier, we had been talking about the free market, duopolies and oligopolies. The retail sector has some really big players, starting with Walmart. Walmart decided to capitalize on its strong market position. The company was so dominant in its sector that it told the credit card companies that the days of 4% transaction fees on certain cards, or even 1%, 1.5% or 2%, were over. Walmart instructed them to do as it said, meaning that they would have to charge a reasonable rate or Walmart would refuse to accept their cards. Walmart's market position gave it the clout to make such a move. Walmart even refused to accept Visa for a few months, just to show that it was serious. Visa and Mastercard decided to lower the transaction fees they were charging Walmart. Walmart had pushed back hard, and it worked.

Following the minister's request to help out SMEs, the credit card companies crunched the numbers and said they were going to offer the same rate they give Walmart, but only to small businesses with low sales volumes. They crunched the numbers and said they did not want to include grocery stores because that is where they make their money. I do not want to misspeak, but I believe that Mastercard said that if a company's annual sales were lower than $175,000, it would charge it the same rates as Walmart. Visa set its limit at $300,000.

If a company makes $175,000 or $300,000 in sales per year and takes in a 10% profit, that means it clears $17,000 or $30,000 in profit per year. That would not even pay the median wage. Obviously, this measure would only cover very small businesses. Grocery stores, like convenience stores and gas stations, have a low-margin business model. It is something like a 1% to 2% profit margin, but on a huge volume of sales. They are therefore excluded from the voluntary temporary measures Visa and Mastercard put in place at the minister's request. The minister and the government gleefully tooted their own horms, claiming they had won.

They won all right, but only at the rhetoric game. All morning, they have been saying that they are protecting SMEs. However, these are temporary measures. What is more, businesses that rely heavily on credit card payments are excluded.

As I was saying, my colleague from Abitibi—Témiscamingue, who was the industry critic at the time, and I received a request late last summer that we immediately forwarded to the minister. It came from the Quebec Food Retailers Association. Founded in 1955, this association represents food retailers who support the development of the food industry. It reiterates exactly what I am saying, that in the 2021-22 federal budget, the government had promised to “[l]ower the average overall cost of interchange fees for merchants” and “[e]nsure that small businesses benefit from pricing that is similar to large businesses”, such as Walmart. This is what the association says:

Unfortunately, the agreement that followed between the government and credit card issuers states that a merchant must have an annual Visa sales volume of $300,000 and an annual Mastercard sales volume of $175,000 to benefit from reduced rates, but this excludes almost every food retailer.

The agreement is therefore useless. It does not reduce the price of groceries, which are a necessity. The association notes that its members have low profit margins, and it gives an example. I mentioned Australia, which has capped fees at 0.5%. Grocery stores there say they pay $155,000 per year on average in interchange fees to credit card companies, while a similar grocery store in Europe only pays $30,000, five times less. This $120,000 per grocery store could help lower the price of groceries, but the credit card duopoly keeps it for itself. Why? It is because these two companies are taking advantage of their dominant position and the government is refusing to act on the root cause, which is obviously unacceptable, hence the committee's report and our interventions.

When my colleague from Lac-Saint-Jean presented his bill, we immediately received calls from the credit card companies saying that we did not know what we were talking about and that we were threatening the economy, the environment and, at the very least, the solar system, if not our galaxy, the Milky Way. Obviously, it is in these companies' interest to hire lobbyists to tell us not to do that. The thought that we could cut their profit margins, their revenues, by a third makes them nervous.

We know that they put a lot of pressure on the government, and we know that the government has given in to their demands. Rather than defending consumers and merchants, it decided to listen to the duopoly, which is highly organized and which told the government that it must not do that. I do not know whether the government believed that it would threaten the galactic balance of the Milky Way, but, in any case, it gave in. It asked the companies to submit a proposal, since it only wanted to save face. This way, everyone saves face, merchants pay, consumers pay, and groceries are more expensive. The government has leverage it could use to intervene, but it will not do it, and that is obviously unacceptable.

I have a few more points to raise. The number of credit card transactions is growing. As we know, the pandemic and the lockdown changed the way we consume. People are buying more online. Even groceries can be bought online now, and more and more people are doing it. The habit stuck, and now more and more purchases are being made online. According to the most recent figures, in 2022, there was a 17.5% increase in Canada, and an even larger increase in Quebec, 18.4%. Clearly, this is a problem that is getting worse. We are therefore joining the Standing Committee on Industry and Technology in asking the government to intervene. We are asking the government to intervene for the sake of grocery stores and retailers like convenience stores and gas stations, but it is not doing anything. My colleages can rest assured that the Bloc will continue to press this issue.

I would like to point out an interesting detail to my colleagues. Quebec has its Consumer Protection Act, but the rest of Canada does not have such a law. In the rest of Canada, when someone goes to the grocery store and pays with their credit card, the merchant can charge the customer, the consumer, the interchange fees. There is a line on the receipt indicating that the credit card fee is $2, for example. That is the way it is. In Quebec, the law prohibits businesses from passing those fees on to the consumer. The cost of these interchange fees is passed on to all consumers, even if the customer pays with cash, a debit card or a cheque. I do not know anyone still uses cheques. It was very common in Europe. People used to go to the grocery store and pay by cheque. In Quebec, the cost of interchange fees is spread out and passed on to all consumers. The government could intervene and do what Australia did. It could also set rates similar to those in the European Union. Even the U.S. Federal Reserve is looking into this right now. At the very least, this would reduce the cost of groceries and convenience store purchases by about one percentage point. In the current situation, that is not insignificant.

I would also like to remind members of the technical details.

Visa and Mastercard are two U.S.-based multinational financial services companies. Originally, they were part of a co-operative of financial institutions. Visa and Mastercard became full-fledged companies in 2008 and 2006 respectively. These companies do not offer credit. They are tech companies that use transaction networks to act as intermediaries between financial institutions, merchants and customers. I could go into a lot more detail on this. I would remind members that these companies make a lot of profit because they are a duopoly, so they are able to make a lot of money on the market. What we are asking and what the committee is asking is for this to be regulated. We do not want rhetoric and mini-measures that will allow the government to save face. We want to see real changes to the situation, particularly when it comes to grocery prices.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, I want to pick up on the fact that what we are witnessing is very much an expensive multi-million dollar game being spearheaded by the leader of the official opposition to the detriment of the House of Commons' being able to deal with a wide spectrum of issues that are important to Canadians.

The Conservatives have brought forward today a concurrence motion that would have the report go back to the committee with the idea of being able to call specific witnesses they have an interest in.

The question I have for the member is this: Does he appreciate the fact that it would appear that the Conservatives want to send things back to standing committees in order to give more direction as to what the committees should be doing, as opposed to allowing them to set their agendas and do the things they want to do? In this case, the Conservatives are asking for a specific timeline also.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, the subject of the report in question is obviously interchange fees. What we are saying is that, in order to lower grocery prices, the government could take action by regulating the fees the companies are charging merchants.

The gist of my speech is that the government is not taking action. The question that was just asked, which has nothing to do with the subject being debated, reflects this. This is unfortunate.

The parliamentary secretary is talking about the House's operating costs. Those are the costs of democracy. With what we are seeing in western societies today, there would undoubtedly be savings if we ceased being a democracy.

The opposition parties have raised a question of privilege. The government refuses to be accountable to members. That is what created the situation we are in now. The government has the power to fix it.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, my colleague's intervention was about one of the subjects that can affect the pocketbooks of Canadians and small businesses right away; therefore I think the debate is an important one and a very good use of House time. I have been raising consumer issues steadily for over 20 years here, and the subject of banking fees has not received the attention it deserves.

I have a specific question for my colleague. The Interac situation evolved from the banks' coming together in the 1980s, which was 40 years ago. What innovation has really taken place since that time that would justify continuing to have incredible costs that are disproportionate to those in other countries? What innovation has taken place since the system was instituted and put on consumers? There has been no benefit to the consumer under it.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, we can see how it has evolved over time. If we asked the credit card companies that question, they will say all sorts of things. They will say that everything is serious and that nothing must change. However, when we consider how the situation has evolved over time and compare ourselves to other countries, as the member pointed out, there is no rationale for this. The rationale, as we learned in economics 101, is that the credit card companies control the market via a duopoly, an oligopoly, a quasi-duopoly. This allows them to pad their bottom line a lot more.

The government has the power to step in and change that. I would remind the House that former Liberal MP Linda Lapointe introduced a bill on this subject. The government rebuffed her several times before appointing her parliamentary secretary, which meant that her bill could no longer be debated in the House. The government chose to side with the credit card companies over merchants, grocery stores and consumers.

[Andréanne Larouche, Bloc, Shefford, QC]

Madam Speaker, as I said earlier today, my riding is home to many SMEs, businesses and members of the Canadian Federation of Independent Business, or CFIB for short.

I am in regular contact with the folks at CFIB, and they talk to me about fees and input costs for businesses and SMEs. These are some of their biggest concerns for the future, because with costs going up across the board, their input costs are obviously going up too. With inflation, this is placing an enormous strain on these small businesses and their owners, who are the lifeblood of our local economies.

Can my colleague explain what a difference it would make if the government were willing to stand up to the big bank card companies and how much this would help our SMEs, which are a unique Quebec model?

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, I would like to thank my colleague and friend, the member for Shefford, for her question. SMEs and merchants in Shefford, and in the rest of Quebec and Canada, are struggling with these excessive fees made possible by the credit card duopoly. These companies are using their power to rake in more money that does not end up back in merchants' or consumers' pockets.

The government's role is to notice this and take action, like Australia did with a law that caps the fees at 0.5%. Here, the fees are three times higher. If the government were willing to stand up to the duopoly and side with businesses and consumers instead, that would means 1% of sales volume that could produce a profit or help reduce the bill. That would make all the difference for retailers that rely on high sales volumes with very low profit margins.

The government could do something. The minister told us that she would take measures in her 2022 budget. However, she merely outlined some voluntary half measures for the credit card companies to take, and those half measures do not apply to these businesses. That is deplorable. It is clear whose side this government is on. It is on the side of Visa and Mastercard, not on the side of grocery stores and consumers.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, I do not think the member understands that the Conservative Party is manipulating a standing committee, and it is not the first time. The standing committee can choose whatever it wants to talk about, whatever it wants to study, and provide a report. It can determine the individuals it wants to call to committee.

What the Conservatives are doing, and it is not the first time, is bringing forward an amendment to instruct a standing committee, as opposed to allowing the standing committee to have some essence. Periodically, it might be of value for the House of Commons to instruct, but my advice to Bloc members is to realize when they are being conned by the Conservative agenda.

The Conservatives are trying to slip something through to manipulate a standing committee and dictate who should be going to that standing committee, taking away the independence of it. This is not the first time it has happened in the last week. I do not think that is a coincidence.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Madam Speaker, we will take the time to analyze the amendment that was moved. However, today, we are debating the report that the Standing Committee on Industry and Technology prepared following its study of banks and the fees that the credit card companies charge merchants. The banks said that the fees were very high and deeply concerning, and they asked that the Competition Bureau start looking into this right away while we continue our study. That is what we are talking about.

My colleague from Mirabel is working on this file and spoke to me about it. He told me that what is happening is serious. In Canada, the interchange fees that the credit card companies charge merchants are far too high. They are three times higher on average than in Australia and much higher than in the European Union. That needs to change. We are raising the alarm. Furthermore, my colleague from Mirabel and his colleagues on the Standing Committee on Industry and Technology are obviously free to study whatever topics they want. However, I have full confidence that the committee will be able to do something about this.

What we must bear in mind is that the government urgently needs to take action to better protect SMEs, retailers, grocery stores, individuals and consumers from the credit card duopoly. It is the government's role to ensure healthy competition in the economy and to prevent duopolies from using their dominant position to make merchants pay or to grab too much market share. However, the government has chosen not to act. All it is offering are half measures and lip service.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, I thank my previous colleague for his intervention and for answering questions.

As a New Democrat, my motion got the credit card study going that is in the committee today. Now we have this debate taking place, which I am grateful for because we need more attention put on these fees and outrageous costs to consumers. Yes, the government system can have taxation policies that relate to how people afford certain things and how businesses interact and so forth, but on top of that, regulations are necessary.

Through the Conservatives, the Bloc and even some Liberal members, some really good testimony has come out of the questions that have taken place. I am a bit perplexed, though, because today at committee, the Liberals attacked me when I was questioning issues related to information being shared. They are now opposing this issue, apparently, and attacking us when we talk about fees that are costing Canadians at this very moment way more than the averages across the rest of the globe's industrialized countries.

This should be dealt with right away through regulation. We do not need legislation. It can be done through the finance minister. Evidence coming out quite clearly shows that our interchange fees, which have been adjusted a bit by the government, are not in line with those of other countries, such as Australia and countries in the European Union, and other places. In fact, this has exposed the Liberals' poor conduct on this issue, which has become clear as day. They are basically treating Canadians as second-class citizens when it comes to these fees and when it comes to businesses that have to pay them.

I started one of my questions today talking about Interac and the formation of it. Most Canadians probably do not even know that Interac is owned by the banks. It really came about in the 1980s, 1986 being, I believe, the specific date. They got together to look at how they could cash in on financial transfers that would take place electronically.

Thinking about innovation, I come from the auto sector, and in the 1980s, we saw a certain type of automobile. If we had to pay the same amount for that automobile as we pay right now and its innovation was the same, we would laugh, unless we wanted to collect a classic car and go back to a K-car or something like that from the 1980s. Meanwhile, when we look at how much money has gone—

[An hon. member]

Oh, oh!

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, I am sorry, but the parliamentary secretary is heckling me.

[The Assistant Deputy Speaker, Carol Hughes]

I want to remind the parliamentary secretary that it is not time for questions and comments. I know that he is anxious, but there will be 10 minutes for them.

[An hon. member]

Oh, oh!

[The Assistant Deputy Speaker, Carol Hughes]

I see that he is not quite listening to what I am saying at this point, but I want to ask the hon. member to please wait until the appropriate time to speak.

The hon. member for Windsor West.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, I would be happy to answer questions later.

When we look at how much money there was in the system put in place then versus the so-called innovation now, what have we really gotten out of that? We can look at the fees. I am going to read a few of them out, and members will see why regulation is necessary. Sometimes the lack of competition does not even have to be done by collusion. It can be done basically by consent and by not competing.

Here are the general sending fees for up to $100: RBC, one dollar to $1.50 a charge; TD Bank, one dollar to $1.50 a charge; BMO, one dollar to $1.50 a charge; CIBC, one dollar to $1.50 a charge; Scotiabank, one dollar to $1.50 a charge; and the National Bank of Canada, one dollar to $1.50 a charge. Basically, everybody in the sandbox is using the same fee and implementation, and nobody is breaking out of that despite the fact that the technology and the way it works are 40 years old.

On top of that, there is what we did during the pandemic. That is part of what has been taking place at the industry committee with regard to the issues at stake. It is why I believe strongly in regulation, especially of interest rates. Because of the pandemic, of automation and of the use of systems in place for points cards, we are transitioning people into new purchasing habits at different interest rates that are harmful to them. If someone has a mortgage, they have a lower interest rate right now. It is one of the better borrowing practices, generally speaking. Hopefully rates will continue to go down, but the interest rate there is just above or below the Bank of Canada rate depending on the financial institution. If someone wants to get a line of credit, it bubbles a bit higher than that, but it is still in that range. As for students loans, as New Democrats, we believe there should not be interest on student loans, but sadly there is. I paid my student loan at 17% at one point. That policy was horrible back in the 1990s. At any rate, students still have a better rate.

What we have been doing is transitioning people into purchasing the food and basics they need on credit cards that have 20% to 30% interest rates. Some are lower, but someone has to have a decent line of credit beforehand, has to pay for the card with a fee or has to be very affluent. Most people are stuck at around a 20% rate for credit cards. What is happening, as we have heard in testimony, is that charges on basics related to living have grown exponentially since the pandemic. That means people are putting groceries on credit, for example, just to get by, with a potential charge of 20%.

We have also heard there is more of a culture of buy now, pay later, with systems in place. They are notoriously part of the furniture industry, which has that type of philosophy. They upsell, making sure people purchase certain amounts and sometimes more. Then if they do not pay by the end of the year or whenever the contract is up, rates could be up to 30%, even higher sometimes. In the meantime, people may lose their job, a loved one may get sick or they may get sick, and they cannot afford the payments anymore.

This motion brings to light the issue of financial management systems, their wealth, their activity in the Canadian economy and what they are really worth. One of the more interesting aspects that we learned is that banks are not even reporting their profit margins on credit cards, borrowing and lending, how much they are making. That is a policy that has been put in place. From a regulatory standpoint, the minister could change it today and require reporting.

Coincidentally, as I mentioned, all the different banks have the same policy that they do not report, because if they do not have to do it, they will not do it. At the same time, we do not know how much we are subsidizing their profit margins, even though we know for a fact that despite the costs of running the credit card system, their profits have skyrocketed, especially because we used public policies in this chamber to backstop the banks during the pandemic and before that when the financial system collapsed. We did all those things.

Maybe the Liberals are a bit shy on this because when I was here back in the day, John Manley tried to make our banks like the American banks. I will give the Bloc Québécois credit because the New Democrats and the Bloc were the only ones who fought off the nonsense of wanting to Americanize our banks.

We saw what took place with regard to the institutions in the U.S. I have all the presentation decks from every single year, which said that Canada's banks have to become like the American banks, that they cannot survive here anymore and that they ought to make sure they are different. They said many different things. I still have all the presentations they made to me during all those years. It was John Manley who tried to move the system to Canada, but we defeated them and stopped them.

I want to pay special tribute to Judy Wasylycia-Leis, the former New Democrat from Winnipeg, who fought tooth and nail on the issue constantly to stop Americanization from happening. Thank goodness we had that. It was funny because the banks came back later and said they survived the financial issues of the United States because they were different. They basically took credit for the fact that they lost their fight to become Americanized.

At any rate, let us go back to the particular issue at hand, especially coming from an economy like Windsor's, when we see value out of production. Workers have often said that our production value needs to keep going up and up in order for us to compete. We have to look at our financial measurement matters. Are they really contributing to the Canadian economy or are they a drag on the Canadian economy?

Owners of some of the small businesses like convenience stores, retailers and all those different elements will tell us that the fees they have been paying are significant. On top of that, the reduction of fees, which is still modest compared to what is in Australia and the European Union and elsewhere, may not have been passed on; we have heard that from Stripe.

We have heard specific testimony, and it was really kind of shocking that Stripe basically did not care what Canada did; it was not going to pass on the savings it had. Where are the savings going to go? They are going to go internationally to the people who actually have investment in the systems.

The Liberals do not get credit for what they believe they should get by lowering the fees, because it has been exposed that what they have requested is very modest compared to what is taking place in other parts of the world.

Here we are, deciding what to do next with regard to the issue. I have done a lot of work on frauds, rip-offs and all the different stuff that can take place, especially on our phones. In industry committee, one of the things I was proud of was getting a study on fraud. We have seen, on our phone, how many times we get a text message or something to bait us into losing some of our money.

As I point out all the time, we pay for our phone or device. We also pay for the services and for all the maintenance on it. On top of getting charged for all of that, we get abused as a customer through fraud. It is the same thing with the fees that are being charged. We pay for our phone, for the data and for the system. We do all those things and we do the work, and the banks still get the same amount in fees, or more. We do not see somebody at the counter anymore; there is no job created for that.

We will do more transactions, so we should actually have a reduction in fees. Ironically, when we look at the charts provided by the banks, the only argument economically has always been that when we buy more, we should pay less; however, when it comes to Interac fees and banking fees, the more we transfer means the more we pay.

I do not know what the difference is in terms of the financial cost to an institution specifically related to electronically moving money. What is the difference whether it is one dollar, five dollars, $10, $1,000 or $3,000? I do not know, but apparently it requires more labour, or different labour, for those different amounts, because the fees are reflected basically in that.

I do not understand that, and the institutions have never been able to explain it. It just another way of gouging, in my opinion. Again, when it is expanded exponentially, it is really a cost on the whole economic system. Some of the best fraud cases have been perpetrated by some of the people who work at financial institutions or other places; they nip a couple of cents off purchases or transactions, so nobody really notices.

People should always check their grocery store receipts, and some places are trying to move to a system where customers do not even get a receipt anymore. Some groceries are taxed and some are not; it is dependent upon the type of product and the quantity of the product. For example, with granola bars, if there are five in a box they are taxed, but if there are six in a box they are not taxed. Retailers market and change their practices so they can get further profits out of the system. People should always get their receipts.

The point I was trying to make is that some of the biggest fraud cases involve skimming just a bit so it is not noticed, but the volume is so high that at the end of the day, the wealth is supersignificant. That has happened many times, and it is the same thing with some of the fees with credit cards, Interac and all the different elements.

I will use bank machines as an example. It costs three dollars to use a different bank than one's own, and people put up with that fee in the moment. However, when we start adding up the fees, and let us say we are doing this once a month or however often it might be, it becomes very significant in the Canadian economy. If it is being done collectively across the board, it becomes a drain on the system.

I come from a manufacturing town, and we were told so many times that the future of this country was through getting rid of manufacturing, that globalization was the end of it and that third world countries and others would do the manufacturing. We saw how it worked out in the pandemic, and it was not true. In fact, reshoring is taking place across North America. We have to compete with the U.S. on that, and we are now doing massive subsidization to corporations to bring them back.

New Democrats fought it at that time and said it was wrong, because the promise was that financial institutions and the service industry were going to rescue all employment. It did not happen. There was some growth in the sector that took place, but it was not reflected in the Canadian economy in employment and good jobs. Also, now there is a decline of some of the institutions, through automation and other things that went through, and we are now without the jobs and the services but are still paying some of the highest fees out there. Why is it? How good is that for the economy?

I would rather have small and medium-sized businesses getting a break on fees through regulation, which is something we can control right now, than have some trickle-down economic theory that is supposed to give them maybe a tax reduction that they may not see and that depends upon how much they have coming in through their business model, in terms of profit margins and so forth.

What we can do by regulating the fees lower right now and ensuring that they are passed on is to ensure that they go to consumers right away; that they are taken out of the multinational institutions, many of which pay more taxes across the planet than here in Canada; and that the small and medium-sized businesses get the money they need and deserve. More importantly, we need to ensure that the fees become more reflective of the service and the value of what they should be paying for.

I go back to that because transaction fees are out of whack with the cost of doing transactions. Nobody should be gouged through fraud by a government being neglectful on regulatory powers, just like there should not be fraud through the abuse of someone trying to do a criminal activity against them. We can control that in the House, so I appreciate the committee and the work we have been doing trying to get fees down, even with the cost of groceries, expenses and all the different things affecting Canadians right now.

We do not have to wait for a budget to adjust some of these things, and we do not have to wait for an announcement or a private member's bill; they can be done immediately by the minister, with the regulatory powers the minister has. The break can be passed on right away, which can also filter into the Canadian economy to create more wealth, more activity, more investment and more jobs, and better reflect the value of financial institutions and the contribution they make for productivity in the Canadian ecosystem.

Right now, financial institutions have been protected a number of different times. As I mentioned, before the pandemic, before the financial crisis, significant government revenues went to stabilize the banks and the financial sector, including the provision of loan guarantees and other activities.

During COVID we allowed the financial institutions to continue their practices as we shifted the economy, with lockdowns and other types of restrictions that required the increased use of their systems This was not through competition or by use of the money we had there, but by moving people, with intervention from the government, into a system that allows more abuse and dominance with respect to interest rates, costs and services, not from innovation in the market but by public policy.

That is why it is warranted, as New Democrats argue, that public policy should be used to rein in some fairness for consumers right now. We did our part. Canadians did their part. They put their taxpayer money behind the banks, the loans and the things they had before to stabilize different things. They got moved into having to borrow and pay for certain things with higher interest rates and charges because of the pandemic.

Canadians never got anything back from doing that. In fact costs have gone up, as has inflation. On top of that, new taxation models have been introduced to consumers with respect to tipping, which is coming on taxes and not just on the goods and services.

For those reasons, we support continuing the work of the committee. Again, we implore that we do not need legislation or a private member's bill; we need the Liberals to act where they should have acted before and rein in some fairness for Canadian consumers.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Madam Speaker, my apologies for throwing the member off. He made me have a flashback when he made reference to the the K–car and the Caravan, two vehicles that really saved Chrysler.

Having said that, the member brings up a lot of very interesting points. There are some fees within the banking industry with which I believe we should be, as much as possible, aggressive with our financial institutions.

One of the things we do not hear as much about is our credit unions. I have found that the credit unions play a very important role in ensuring that there is at least a bit more competition. I wonder whether my friend could provide his thoughts and comments in regard to credit unions. I personally believe that they play such a vital role in protecting the interests of consumer and in hopefully bringing down actual costs.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, the question from the parliamentary secretary is one that does not get a lot of coverage and has not been talked about as much. Part of the reason is that credit unions are owned by the people in the community who are the users. The profits go back to them, so they can, yes, provide some innovation. Sometimes their margins are very close to those of the banks. One could argue that there could be more competition there.

At the end of the day, the real benefit is the fact that the people who are part of a credit union are also shareholders; that is the difference. Banks have private shareholders who could be based in different places all over the planet, and not everybody can be part of that by buying stock options and so forth, whereas when people join a credit union, they become a member and contribute to their own wealth through the different services.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Madam Speaker, I want to make an observation about the debate in response to something the parliamentary secretary said earlier. He complained about the idea that there would be an amendment that would provide an instruction to the committee. He said that these are games and that we should let the committee make its own decisions.

I had a recollection and did some research on this. Do members know what was the Prime Minister's first act when he was elected to Parliament, in 2008? He drew first for the private members' bill draw, and the motion he put before the House, his very first act as a member of Parliament, was, if members can believe it, an instruction to a committee:

That the Standing Committee on Human Resources, Skills and Social Development and the Status of Persons with Disabilities be instructed to consider the introduction in Canada of a national voluntary service policy....

Does this not suggest that the parliamentary secretary, while he would like to wiggle out of any accountability for how the government has failed consumers and taxpayers in so many ways, is hypocritically trying to say that we cannot instruct a committee? The first act of the Prime Minister in the House was to do precisely that.

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, it failed. The motion never passed in the House of Commons. I really do not know what else to say.

[Andréanne Larouche, Bloc, Shefford, QC]

Madam Speaker, I know that my colleague works hard at the Standing Committee on Industry and Technology to defend small businesses. Is this not another sign of Liberal incompetence?

The government says it took action, but we now learn that there was no agreement and that it was actually just a unilateral, temporary, voluntary decision. All these words confirm that without a stricter law in place, like Australia's, these big companies will not act.

If my colleague truly wants to defend SMEs, would he not agree that this government has run its course?

[Brian Masse, NDP, Windsor West, ON]

Madam Speaker, under the current model, banks do not have to pass on the savings right now. Interestingly enough, in testimony today, I asked about that. One of the officials talked about how our loan systems were going to be reduced, with respect to predatory financing, to 35% maximum. It is at 60% right now. I still could not get a proper answer with regard to what the penalties would be and the different issues that would take place if someone broke that law.

Ironically, the Government of Canada borrows around the Bank of Canada rate, but Canadians have to pay interest rates of up to 35%. With respect to fairness, how does that make sense? The government can borrow at a rate that is very low and is very much structured. Meanwhile rates are up to 35%, and on top of that, we still do not know the penalties and so forth.

The member for South Shore—St. Margarets raised the issue of Stripe not passing on the savings, and we will probably have some more work on that. That is a very important one because it has become rather iconic.

[Heather McPherson, NDP, Edmonton Strathcona, AB]

Mr. Speaker, my colleague, the member for Windsor West, is very knowledgeable about this. He has done so much work to make life more affordable for Canadians.

One of the things he talked about was trickle-down economics. Obviously, we have seen that this is a failed economic strategy. The Liberals' strategy of asking nicely has also failed Canadians. However, what I would like the member to talk about is how the impacts of these fees are felt disproportionately by those who live in poverty, how people who are already struggling have to pay a disproportionate amount when these fees are in place.