Mr. Speaker, it is a pleasure to speak in support of the motion brought forward by my colleague from Marc-Aurèle-Fortin, which is very timely. There is a lot of talk these days about standing up for consumers and small and medium-sized businesses. This issue was addressed in the government's throne speech and two most recent budgets. However, the Conservatives are a long way from walking the walk.

The motion addresses an issue that all small and medium-sized businesses in Quebec and Canada really deplore, credit card interchange fees, which are borne by businesses. These fees are extremely high in Canada. They are usually about 1.5%, but they can be as high as 4% in the case of premium credit cards, which allow cardholders to collect points that they can exchange for goods and services. People need to realize that these cards, although beneficial to the cardholder, are largely paid for by merchants themselves and by other consumers. It is basically a brilliant marketing and advertizing strategy thought up by credit card companies. However, at the end of the day, they entail additional fees that are assumed by all consumers and that contribute to price increases.

I say that because in some places outside Canada, whether it be in Australia or even the European Union, a cap has been placed on these fees. In many cases, small businesses have profit margins of 5%, 6% or 7%, which is not very much. When credit card payments eat up between 1.5% and 4% of that profit margin, it becomes very difficult for these small businesses to survive. What other choice do they have? The only other choice is to no longer accept credit cards.

We know full well that in this day and age, refusing to accept credit cards puts businesses at a huge disadvantage because many people use their credit cards for everyday purchases. Refusing to accept credit cards seems to be the only option for these companies, but it is not a realistic one, because obviously, customers who cannot use their credit card and are not in the habit of using a debit card or cash may choose to shop somewhere else.

This motion is very timely because it confirms the official opposition's intention to cap credit card interchange fees. It also confirms our intention to no longer rely solely on the voluntary code that the Conservatives seem so proud of, but to set real restrictions that will benefit all SMEs, merchants and, by extension, consumers.

The government is saying that it has already negotiated with Visa and MasterCard, which are the two major credit card companies, to ensure that they will voluntarily agree to set a limit on interchange fees. However, that is not enough. The Canadian Federation of Independent Business and other businesses and organizations representing small businesses and the business community are still on edge and still do not know when Visa and MasterCard might change their minds and do something to violate this voluntary code.

Instead of a voluntary code, what we really need are federal regulations. We could always discuss how to apply the regulations and their parameters. However, it is clear that the government can play a role in a market such as the credit card market, which is neither free nor competitive, but is a duopoly. Visa and MasterCard control approximately 92% of the market. Even a known quantity like American Express cannot bite into the market share of Visa and Mastercard. When we are faced with a duopoly, there is an imperfect market, a failure of market forces. In that sense, the government is completely justified in intervening to protect the consumer, the industry and business.

We can look to the regulations, such as these, that have been adopted in other countries. Australia is an interesting example. I am not saying that this is what an NDP government would do, but it does deserve to be studied.

In Australia, the decision to cap interchange fees is made by the Reserve Bank of Australia. It is not up to the federal government to make that decision, which is not a bad thing, but up to the body responsible for the country's monetary policy. This is an interesting approach, and it demonstrates that such regulations or such an approach can be successfully implemented. Our interchange fees vary between 1.5% and 4%, but Australia has managed to decrease its fees significantly.

Elsewhere, the European Union has just adopted regulations that will impose a cap of 0.3% on credit card fees paid by merchants and a cap of 0.5% on debit card fees. We clearly see that there is the political will in Europe to tackle a real situation that penalizes small and medium-sized business.

The European Union just limited this rate to 0.3%, and in 2006, Australia reduced it to 0.5%. Of course, Visa, MasterCard and other credit card companies will say that this will destroy them and that they will not be able to provide efficient service if the market is disrupted like this. That is what they said in Australia to try to halt the efforts of the Australian government. They said that if the government got involved, the consequences would be disastrous.

In reality, credit card use continued to increase after 2006. There was no disruption to Australia's credit card system. The companies adapted. They lowered their costs elsewhere and adapted to their decreased revenues as a result of the Australian government's regulations.

It is clear that we need to do something. The merchants I speak to in my riding are happy with voluntary codes of conduct. However, when I speak to them about the interchange fees they have to pay for using credit cards, the reaction is overwhelming. These fees eat into their profit margin, which is often not very high.

When I speak to them about the NDP's proposal, the motion moved by my colleague from Marc-Aurèle-Fortin, they see a real desire to make meaningful changes. That is the best gift we can give our artists and our merchants, who simply want to provide services in their communities and grow their businesses. However, in order to do so they must be able to set aside this profit margin for future investments, in order to have a greater presence on the domestic market within their community.

That is why they wholeheartedly welcome the NDP's proposal, which is well known. Three years ago, I worked alongside the member for Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, who was our tourism and SME critic at the time. We launched a campaign to raise awareness among small business owners and the business community in Quebec and Canada.

At the time, it was the member for Sudbury who was leading the campaign in the rest of the country. The campaign was very popular, both among chambers of commerce and such organizations as the Canadian Federation of Independent Business. That was three years ago already, but we still need to implement this measure. It was already overdue even before that campaign began, which is why we will continue to advocate for stricter regulations.

The motion brought forward by the member for Marc-Aurèle-Fortin is therefore most welcome. It reveals what direction the official opposition plans to take, once we form the new NDP government in October 2015, in order to help small businesses and merchants in Quebec and Canada deal with the various challenges they face by limiting credit card interchange fees.

Guy Caron

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