Mr. Speaker, I appreciate this opportunity to discuss Motion No. 574, a motion which focuses on lower costs for businesses and consumers by reducing transaction fees.

Let me reassure the hon. member that under the leadership of the Prime Minister, our government is standing up for consumers and saving Canadians money.

We know that Canadian families work hard to make ends meet and every dollar certainly does count. While companies will look out for their bottom line, our government is looking out for all Canadians. When Canadians make decisions about how to spend their money, they must be assured of a voice, a choice and fair treatment.

In the October 2013 Speech from the Throne, our government committed to take additional action to protect Canadian consumers. We understand that Canadians are tired of hidden fees. That is why we have secured voluntary commitments from Canada's eight major banks to enhance low-cost bank accounts and offer no-cost accounts. Banks also committed to provide free monthly printed credit card statements. We have also worked with the provinces to maintain the integrity of the framework for payday lending-type products and to support provincial efforts to regulate appropriately all payday lending-type high interest rate products.

However, our initiatives go beyond lawmaking and regulation, and 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 all Canadians. This initiative will allow our government to broaden its efforts to help Canadians make more informed choices for themselves and for their families.

Accordingly, our government believes that the best consumer protection framework is one in which there is competition, fees are disclosed and consumers can exercise choice.

For example, we have introduced regulations relating to credit agreements, including lines of credit and credit cards, which came into force in 2010. These regulations limit business practices that are not beneficial to consumers. They require the provision of clear and timely information to Canadians about credit products with a particular emphasis on credit cards. Specifically, our government has taken steps to update the existing financial consumer protection framework with several key measures. These include, for example, mandating an effective minimum 21-day interest-free grace period on all new credit card purchases when a customer pays the outstanding balance in full, and introducing a fee summary box.

In November 2014, the Minister of Finance welcomed proposals submitted by Visa and MasterCard to reduce their credit card fees for merchants, which should ultimately result in lower prices for consumers.

Specifically, the proposals from Visa and MasterCard will: voluntarily reduce their respective credit card fees for consumer cards to an average effective rate of 1.5% for a period of five years; ensure that all merchants receive a reduction in credit card fees; provide a greater reduction for small and medium-size enterprises and charities which have the least amount of bargaining power; and require annual verification by an independent third party to ensure compliance.

Last month, our government announced the enhanced code of conduct for the debit and credit card industry. 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.

The revised code contains several enhancements to address unfair business practices and improve transparency for merchants and consumers, including: extending the application of the code to mobile payments, including new consumer protections for mobile payment users; measures to facilitate the pass-through of credit card fee reductions to merchants; a new complaints handling process available to merchants with code-related complaints; enhanced disclosure requirements that will require plain language disclosure of key contract terms and conditions and merchant fees in information summary boxes on merchant contracts; providing greater flexibility for merchants to exit their contracts without penalty and limiting the automatic renewal of contracts; new branding requirements for premium credit cards to make these cards more easily identifiable to merchants at the point-of-sale; and new disclosure requirements for credit card issuers to inform consumers that apply for premium credit cards that use of these cards may result in higher merchant fees.

Most elements of the code will come into force within nine months of the date on which the networks adopt the code. Some elements, such as the measures to facilitate the passthrough of interchange rate reductions to merchants and the new rights for merchants regarding acceptance of contactless payments, took effect in April.

There will be a slightly longer implementation period for the new enhanced disclosure requirements on account of the significant systems changes that acquirers will need to make.

Let me assure the hon. member that the updates to the code were developed in close consultation with a broad range of stakeholders, including members representing the credit and debit card networks, small business retailers and consumers. Bilateral consultations were also conducted with acquirers and small merchant associations. In fact, the Canadian Federation of Independent Business said at the time that the code “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.”

Consumers will also benefit from a new requirement that credit card issuers disclose to consumers who apply for premium credit cards that use of these cards will result 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 credit card.

This of course is not 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.

As we announced in economic action plan 2013, we are working to develop a comprehensive financial consumer code to better protect consumers of financial products and ensure that they have the necessary tools to make responsible financial decisions. Such measures empower and protect Canadian consumers and they increase their financial literacy by providing them with the right information at the right time so they can make financial decisions that best suit their needs.

As our actions have clearly demonstrated, our government clearly understands the importance of monitoring the credit card and debit card industry in Canada. In this regard, the motion's recommendations are well intentioned, but not required.

I therefore urge hon. members to vote against the motion and instead support our government's ongoing measures to protect businesses and consumers in a competitive marketplace.

Mark Adler

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