Mr. Speaker, it is my pleasure today to discuss how our government continues to lower costs for businesses and consumers, and in the process update this House on all that this government has done on the subject in recent years.
Our government understands that Canadians are tired of hidden fees, and that is why we introduced a code of conduct for the credit and debit card industry in Canada. The code was launched in 2010 to promote fair business practices and ensure that merchants and consumers understand the costs and benefits associated with credit and debit cards.
At the same time, Canadian banks understand that they operate in a highly competitive environment and that they must be prepared to respond to the specific and often changing needs of Canadian consumers. Accordingly, the government believes that a strong consumer protection framework is one in which there is vibrant competition, fees are disclosed, and consumers can exercise choice.
On this front, we have introduced regulations relating to credit agreements, which came into force in 2010. These regulations accomplish a number of pro-consumer goals, including the following: strengthening consumer protection and limiting business practices that are not beneficial to consumers; requiring the provision of clear and timely information to Canadians about credit products, with a particular emphasis on credit cards; mandating a minimum 21-day, interest-free grace period on all new credit card purchases when a customer pays the outstanding balance in full; and requiring express consent for credit limit increases.
We continue to make progress in this regard. Last November, in fact, the government welcomed individual commitments by Visa and MasterCard to reduce their credit card fees for merchants, which should ultimately result in lower prices for consumers.
Specifically, Visa and MasterCard are voluntarily reducing their respective credit card fees for consumers to an average effective rate of 1.5% for a period of five years. These proposals include specific commitments that all merchants receive a reduction in credit card fees, while providing a greater reduction for small and medium-sized enterprises and charities, which have the least amount of bargaining power.
Canadians work hard for their money, and our government believes Canadians deserve to keep more of that money in their pockets. That is why we have taken action to improve low-cost accounts and expand access to no-cost banking services to protect consumers and save even more money for Canadians. In this spirit, in May 2014, the government secured voluntary commitments from Canada's eight largest banks to enhance low-cost bank accounts, and to offer no-cost accounts with the same features as low-cost accounts, to a wider range of eligible consumers. As a result, no-cost accounts are available to youth, students, seniors qualifying for the guaranteed income supplement, and registered disability savings plan beneficiaries.
This action fulfills a 2013 Speech from the Throne commitment to expand no-cost basic banking services, as well as an economic action plan 2014 commitment to enhance access to basic banking services. Moreover, just this past April, the government released an update to the code of conduct for the credit and debit card industry in Canada, delivering on a commitment made in 2014 to help make life more affordable for Canadians and entrepreneurs.
These new changes will make the code even stronger, by addressing unfair business practices and improving transparency for merchants and consumers, including new provisions that apply specifically to mobile payments.
Consumers will also benefit from a new requirement that credit card issuers disclose to consumers who apply for premium credit cards that the use of these cards results in higher merchant fees. This will help to empower consumers in selecting their payment method by disclosing the actual cost to merchants of accepting payments with a premium card.
When it comes to helping businesses with their payment costs, members should not just take my word for it. The Canadian Federation of Independent Business has said 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”. They have also said that “...the Code played a big role in saving low-cost debit in Canada and it gave merchants some degree of power in dealing with the payments industry”.
Therefore, despite the opposition's call for more support to empower consumers, we can see that our government has already taken considerable action in this regard.
We are supporting consumers and merchants by working collaboratively with financial institutions. We will not change course. I urge my opposition colleagues to support our efforts in this regard by voting in favour of our budget bill, which is a bill that contains many low-tax and pro-consumer measures.
Our initiatives go beyond law-making and regulation. They also include public outreach and education.
In April 2014, we announced the appointment of Jane Rooney as Canada's first-ever Financial Literacy Leader. Her mandate is to collaborate and coordinate activities with stakeholders to contribute to and support initiatives that strengthen the financial literacy of Canadians. This initiative will allow the government to broaden its efforts and help Canadians make more informed choices for themselves and their families.
This is nothing new. Throughout our time in office, our government has been focused on helping Canadian consumers identify and take advantage of the best possible financial products and services for their needs. We are not done yet.
In economic action plan 2015, we proposed to amend the Bank Act to strengthen and modernize Canada's financial consumer protection framework to respond to the diverse needs of Canadians. For example, the financial consumer protection framework will provide improved access to basic banking services by allowing a broader range of personal identification, cooling-off periods for a greater range of products, and a new requirement that advertising be clear and accurate.
Unfortunately, the opposition, the NDP and Liberals, have committed to voting against our budget.
I should note that we have already accepted promises from the banks to end pay-to-pay practices as well. Hopefully, the next time the opposition will do their research before putting forward a motion like the one we are debating today.
As our actions have clearly demonstrated, the Government of Canada understands the importance of these costs that affect all Canadians, but we will continue to allow Canadians to keep more of their own money with lower taxes and increased benefits. The measures I have described today will benefit all Canadians, including the most vulnerable consumers. Moreover, they will help to provide all Canadians with the protections and tools necessary to make informed decisions on their financial futures.