On Monday June 1st, the NDP (the Official Opposition in the federal House of Commons) made a motion for the Government to ban all “pay-to-pay practices” by banks operating in Canada through the enactment of a mandatory financial code of conduct to protect consumers. A “pay-to-pay” fee is described in the motion as a fee a customer is charged just for the right to pay their bill, however, the focus of the motion and the ensuing debate in the House of Commons was on the practice of charging consumers a fee for a paper statement. The (Conservative) Government supported the motion and the motion was passed.
Legislation to prohibit “pay-to-pay” practices by banks has not yet been drafted. Therefore, at this point, we do not know exactly what will be prohibited. We note that legislation was passed in December of 2014 which prohibits telecommunication and broadcasting companies from charging fees to provide paper bills. It is likely that banks will eventually be prohibited from charging fees for paper statements, but it remains to be seen whether any additional restrictions will be imposed on the fees that may be charged by banks.
The NDP has requested the legislation be passed on this topic before the Summer, but so far the Government has not agreed to this request. In the House of Commons debate on Wednesday June 3rd, Finance Minister Joe Oliver noted that the Government had obtained a voluntary agreement from banks not to impose pay-to-pay fees and that this issue may be included in the mandatory consumer protection framework, which was announced in the 2015 budget (see our blog post on that topic here). The mandatory consumer protection framework is expected to be drafted as an amendment to the Bank Act, however, as noted in our blog post of yesterday, the timing of these reforms is in doubt because the House of Commons will soon break for the summer recess and will not resume sitting until after the federal election, which will be held on October 19th.