Industry Committee on Nov. 25th, 2024

[Shereen Benzvy Miller]

I think the mortgage guidelines are a success.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

How?

[Shereen Benzvy Miller]

They will help to prevent catastrophic outcomes for people who are going—

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Have they done that so far? Has there been anything in the past that you can point to—

[The Chair, Liberal, Joël Lightbound]

MP Rempel Garner, I'm sorry, but we're running out of time. Thank you.

[Michelle Rempel, Conservative, Calgary Nose Hill, AB]

Thank you.

[The Chair, Liberal, Joël Lightbound]

I'll now turn it over to MP Badawey for six minutes.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Mr. Chair.

I'm going to ask some questions that I just asked the previous witnesses from the Competition Bureau, which they were unable to answer. I'm hoping you can answer some of these questions.

Question one is this: How does the pricing structure of Canada's leading e-transfer providers compare to global benchmarks?

Question two is this: Are fees consistent with the competitive market practices?

I got a partial answer from the Competition Bureau, but I'm hoping to get a more complete answer from you folks. I'm not sure which one of you guys wants to jump in, but feel free.

[Shereen Benzvy Miller]

We do not oversee the fee structure per se. I would say that's something you would have to raise with the Bank of Canada and the Department of Finance.

We do a lot of research to understand the comparative ecosystems, so we engage with the policy-makers and the departments that are doing that work to share our findings with them. Part of our role in the prudential space is to provide information to protect consumers from a consumer perspective. We do a lot of research there, but I'm not actually sure what you're trying to get at.

[Vance Badawey, Liberal, Niagara Centre, ON]

I'm looking for parameters. Essentially, what is out there? What do consumers have available to them?

[Shereen Benzvy Miller]

If I could just give you a specific example, when the ecosystem looks at how different consumers are treated with respect to insufficient funds charges, which is when a check bounces, it was found that Canada's fee structure was not really in alignment, so the government has actually taken steps to ensure that the NSF fees, which is what they're called, are lowered, so that particularly the most vulnerable Canadians, who would be the ones who wouldn't necessarily have the fluidity of their accounts available to them and who might suffer from repeated insufficiency of funds—

[Vance Badawey, Liberal, Niagara Centre, ON]

Do you find that what this government has done has been fair and equitable to consumers?

[Shereen Benzvy Miller]

You know, for somebody who is managing a system like this, do we think it protects consumers more if we align Canada with the norms of other jurisdictions? It does help to know where we sit in that continuum.

[Vance Badawey, Liberal, Niagara Centre, ON]

Do any major financial institutions or service providers that you know of engage in exclusivity agreements that limit consumer choice for e-transfer services?

[Shereen Benzvy Miller]

We manage a code of conduct for federally regulated financial institutions.

By the way, feel free to jump in at any time. On day 12, I just want to make sure my answers are fulsome.

We manage a code of conduct. The code of conduct is something that we regulate and supervise very specifically. As Mr. Lofranco said, we investigate any complaints against the code if institutions are not respecting their obligations under the code. That's when we would, for instance, send a notice of non-compliance, or when we might level a fee against a bank that's not behaving and whose market conduct is out of whack with what the code of conduct expects.

The previous commissioners have levelled various non-compliance statements against different institutions and have also used the monetary penalty options on a number of occasions.

[Vance Badawey, Liberal, Niagara Centre, ON]

I appreciate that.

I guess I'll pivot over to consumer impact. Are Canadian consumers facing higher fees or reduced services as a result of anti-competitive behaviour in the e-transfer market?

[Shereen Benzvy Miller]

That really is a question for the Competition Bureau. It's not within our purview to second-guess the structure of the financial ecosystem. What we really do is regulate the participants to ensure that they are behaving, that their market conduct is appropriate and that it is not prejudicing any merchants or consumers in that environment. We are ensuring that information is shared appropriately, in a timely way and in a way that these merchants and consumers can understand it.

For example, the code requires that merchants be notified of any changes in fees in advance, that it be on their statements, that it be obvious and that it not be in minuscule print at the bottom. What's important is that people have information, because that's power. That allows them to then choose their service providers.

[Vance Badawey, Liberal, Niagara Centre, ON]

On that, in terms of transparency, is Interac transparent about its fee structures for merchants and consumers, in your view?

[Shereen Benzvy Miller]

They are participants in the code of conduct, and we supervise that, if that's what you mean.

[Frank Lofranco]

With respect to fees, when you're speaking about consumers and the fees they incur by way of banking services, such as Interac e-transfers, our role is to ensure compliance with such requirements as disclosure, so that there's full awareness of the fees associated with that service or other services or products. By way of that disclosure, there's also a need to secure express consent in writing so that there's an awareness. Obviously, if there are complaints in relation to this, there's a complaint-handling regime. There are a host of consumer protection measures as they relate to fees that we have a role in with regard to educating consumers and supervising entities on the basis of those obligations and requirements.

With respect to merchants, a disclosure is a feature, but that feature sits in the code. In the case of consumers, those are legislated requirements. In the case of merchants, those are established in the code. Again, disclosure is important.

[Vance Badawey, Liberal, Niagara Centre, ON]

That was a perfect segue to my next line of questioning about merchants, but the chair is telling me that he's going to cut me off.

I do want to thank you for the answers. I appreciate that.

Thank you very much.

[Frank Lofranco]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Badawey.

Mr. Savard‑Tremblay for six minutes.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Chair.

I want to thank all the witnesses.

Ms. Miller, congratulations on your appointment and welcome to our committee meeting.

As a few committee members have already done, I'd like to ask you a question to better understand your supervisory activities.

Does the Financial Consumer Agency of Canada undertake regular analyses of competition in the e‑transfer ecosystem in Canada?

If so, how do you do that?

[Shereen Benzvy Miller]

[Inaudible—Editor] responsibility and to ensure that the participants in the code actually behave in compliance with the code. It's not a competition analysis. We focus on the obligations set out in the code. For example, was the right information provided? Are consumers properly informed? Do they understand their rights and obligations within the financial ecosystem?