Letter on Open Skies etc. March 29, 2010 I was heartened to see that Air Canada CEO Calin Rovinescu discovered Vancouver this week, dropping down from on high to speak to the Board of Trade. What did Mr. Rovinescu focus on? More routes? New employment? Lower fares? A passenger bill of rights? Hardly. He set those issues aside to launch a blistering attack on airline competition. Consumers, and most certainly governments, should be extremely skeptical when the dominant provider of any service in any market launches a vociferous plea for even greater protection than it already enjoys. What has irked Mr. Rovinescu? It seems a proposal from Emirates Airline to fly once daily to Toronto, Vancouver and Calgary is too much competition for Air Canada to bear, even though Air Canada offers hundreds of international flights every day. Mr. Rovinescu claims that Emirates wants to fly people through a hub in Dubai to transit onwards to other destinations in the Middle East, Asia or Africa. God forbid Air Canada face competition on its model of forcing consumers who want to travel to those destinations to go through Frankfurt and fly onwards with its Star Alliance partner Lufthansa. As Canada’s leading association representing consumers, we have been heartened by the Prime Minister’s consistent defence of open markets and his condemnation of protectionism. We are troubled, therefore, that the Prime Minister’s lead is not being followed by Transport Canada, which seems to believe that protecting Air Canada and the Star Alliance is its top job. Transport Canada has repeatedly blocked efforts by Emirates and other major airlines from gaining access to the Canadian market – even on routes that Canadian carriers do not fly. In explaining its position for denying Emirates’ request for greater access, Transport Canada recently stated: “There is no shortage of seats to meet the demand.” Air Canada echoed those sentiments in its speech to the Board of Trade. We believe that consumers, not Transport Canada or Air Canada, should determine which airline Canadians should fly to an international destination. The market will decide the winners and losers. We have written Transport Minister John Baird regarding our concerns, most recently on June 12, 2009, and have yet to receive a response. Air Canada does not fly to Dubai or any points in the Middle East, Africa or India, to name a few – but Canadians are being told by Transport Canada that they are obliged to fly Air Canada through Frankfurt or London regardless of the price, service or connection time. What is the policy rationale? Why is it in the interests of the Canadian economy and Canadian consumers to protect these airlines from competition? When industry interests like Mr. Rovinescu demand protectionist barriers it is ultimately Canadian consumers who are the victims. They are forced onto flights no matter how inconvenient or costly when they are travelling to destinations Air Canada chooses not to serve directly. It is time for a change of thinking at Transport Canada. Consider that Transport Canada has never consulted the Consumers Association to ask for our views on air liberalization. As a representative of the travelling public, our views ought to be at least as important as those of airlines, airports or any other stakeholder. The Prime Minister’s position on free trade and the dangers of protectionism stems from his clear belief that open markets are best for the economy, which in turn is best for consumers. It is now passed time to extend this policy to air travel and open skies, allowing Canadians to choose where they want to fly, with which carrier, and at what price. Air Canada and Mr. Rovinescu will bully and threaten and bluster, as they do on every issue, but allowing more competition is the right thing to do. Consumers deserve the lower fares and better travel options that will follow. Bruce Cran President Consumers Association of Canada LIBERAL SENATORS DAY OF INFAMY December 17, 2009 "The Liberal members of the Senate have payed more attention to the bleatings of special interest groups than they have to the protection, health and well-being of our children" says Bruce Cran, president of the Consumers' Association of Canada. "In proposing amendments to water down Bill C-6, the new Consumer Protection Act, they have shown total disregard for the safety of our kids. In the past few days alone we have dealt with products capable of suffocating, strangling and maiming our children." adds v-p Mel Fruitman. Cran wonders "Where is Mr. Ignatieff, the leader of the Liberal party, stands on this crucial issue? He supported the act in the House, as did all other parties. Why is he allowing the senators to run roughshod over his and the Commons wishes?" "For 50 years Canadians have been inadequately protected from products that can cause them harm. Finally we are catching up and the Liberal senators have torpedoed the process. What is the matter with them and their leadership?" --30-- For further information contact: Bruce Cran 604 418 8359 Mel Fruitman 905 832 9969 SENATORS FIDDLE WHILE CANADIAN CONSUMERS AT RISK The Senate Industry Committee is ignoring the needs of Canadian Consumers and thwarting the will of our elected representatives by holding up passage of the long overdue Consumer Protection Act (Bill C-6). "Ancient Existing legislation, is 50 years old, and completely inadequate to protect our children from being maimed in unsafe baby carriages or from suffocating in faulty cribs" says Bruce Cran, President of the Consumers’ Association of Canada. "The updated legislation received all party support in the House of Commons and was thoroughly scrutinized by the House Committee, so why is it stuck in the Senate". "The Senators are paying too much attention to special interest groups who fear that their free-wheeling ways will be inhibited by this urgently required legislation" adds V-P Mel Fruitman. "Under existing legislation, even if a death- threatening hazard is identified, the only option available to the Canadian government is to go to the supplier, cap in hand, and ask them to please do something about it. The new act will allow the government to take immediate appropriate action" notes Cran. "We ask the Senators, to cast aside their differences, consider the well-being of their fellow Canadians and allow the bill to be passed as it was presented before we face a really serious tragedy. ---30--- For further info: Bruce Cran 604 418 8359 Mel Fruitman 905 832 9969 Director of the CAC National Board Bruce Cran congratulates Ed Hendricks on his election to a third term as a Director of the CAC National Board at the AGM held on November 14th at The Sheraton Four Points Hotel in Richmond BC Credit and Debit Card Report November 28, 2009 click here for pdf version Consumers Association of Canada - Credit Card Surcharge Survey November 16, 2009 click here for pdf version page 1 page 2 page 3 page 4 Ontario’s Electrical Safety Framework - A Consumer's Perspective November 3, 2009 click here Mel Fruitman Vice President Consumers’ Association of Canada				Letter to Finance Minister December 21, 2009 The Honourable Jim Flaherty, P.C., M.P. Minister of Finance 140 O’Connor Street Ottawa, Ontario K1A 0G5 Dear Minister: It has recently come to my attention that the views of the Consumers’ Association of Canada with regard to specific elements of the proposed Code of Conduct for the Credit and Debit Card Industry in Canada may be being misrepresented by some stakeholders involved in these discussions. Therefore, please let me reiterate our position, as first outlined in our letter to you on September 14. That position has not changed and we will be posting this letter to our website to ensure further confusion or misrepresentation by others is put to a rest. First, the CAC strongly supports recommendation #8 contained in the code. We do not believe that credit and debit functions should reside on the same payment card. We recently commissioned a paper, Demystifying Credit and Debit Cards in Canada, which looked at this issue. The paper recommended that should this policy ever change, consumers must retain the right to choose which type of payment is used at the point of sale; i.e. credit or debit. The merchant should have no say in that. However, this leads to the second area I would like to clarify, since our views on the above are being misconstrued to suggest we have changed our position on debit routing. We still support recommendation #6 that allows merchant routing in the case of co-badged debit cards. It is still our position that the consumer experience would be significantly more cumbersome if they were forced to "choose" over which network their debit transaction would be processed. Such a mandate would require a massive education effort by the banks and retailers and would significantly slow down the purchasing process for consumers, which is already being slowed by the move to chip technology. The CAC opposes further measures that would unnecessarily delay transaction times for consumers and feels a "consumer routing" would do just that. Thank you again for the opportunity to discuss these issues. Sincerely, Bruce Cran President Consumers' Association of Canada Code of Conduct Draft Code of Conduct for the Credit and Debit Card Industry in Canada November 27, 2009 Purpose The purpose of the Code is to demonstrate the industry's commitment to: Ensuring that merchants are fully aware of the costs associated with accepting credit and debit card payments thereby allowing merchants to reasonably forecast their monthly costs related to accepting such payments. Providing merchants with increased pricing flexibility to encourage consumers to choose the lowest-cost payment option. Allowing merchants to freely choose which payment options they will accept. Scope The Code applies to credit and debit card networks, (referred to herein as payment card networks), and their participants (e.g. card issuers and acquirers). The payment card networks that choose to adopt the Code will abide by the policies outlined below and ensure compliance by their participants. The following policies will be incorporated into the payment card networks' contracts, governing rules and regulations. Some elements of the Code will apply immediately.For other elements, a transition period will be provided in order to facilitate operational and contractual changes. As such, the Code will be implemented within a period to be determined after the payment card networks sign onto the Code. Stakeholders are invited to provide comments with respect to implementation timelines for different measures (e.g. elements of the code requiring changes to existing points of sale terminals) and whether grandfathering should be considered. Recommended Policy Elements Increased Transparency and Disclosure by Debit and Credit Card Networks and Acquirers to Merchants The payment card networks and their participants will work with merchants, either directly or through merchant associations, to ensure that merchant – acquirer agreements and monthly statements include a sufficient level of detail and are easy to understand. Payment card networks will make all applicable interchange rates easily available on their websites. In addition, payment card networks will post any upcoming changes to these fees once they have been provided to acquirers. Stakeholders are invited to provide input on specific improvements regarding transparency and disclosure in order to ensure that the information is clear and meaningful (e.g. fees disclosed on merchant statements will use wording consistent with the payment card networks' interchange rate schedule, if applicable, and will include the effective merchant discount rate, the number and volume of transactions and the total amount of fees according to each rate). Such information will be taken into consideration when developing more specific criteria for improving transparency and disclosure. Stakeholders are also invited to provide input as to whether this provision should only apply to small and medium-sized merchants, and, if so, how such merchants would be defined (e.g. with payment card transactions value of $5 million annually or less). Merchants will receive a minimum of 90 days notice of any fee changes related to any credit or debit card transactions. Payment card networks will provide acquirers with sufficient notice of any changes to their interchange rates and structure, as well as any other fees. Acquirers will provide merchants with at least 90 days notice of changes to merchant fees. Stakeholders are invited to provide input on minimum amount of prior notice that payment card networks should give to acquirers of any changes in rates and fees. Following notification of a fee change, merchants will be allowed to cancel their contracts without penalty. By signing a contract with an acquirer, a merchant will have the right to cost certainty over the course of their contract. As a result, in the event of a fee change, merchants will be allowed to opt out of their contracts, without facing any form of penalty within 90 days following notification. Merchants who accept credit card payments will not be obligated to accept debit card payments from the same payment network, and vice versa. Payment card networks will not require merchants to accept both credit and debit payments from their payment network. A merchant can choose to accept only credit or debit payments from a network without having to accept both. Merchants will be allowed to provide discounts for different methods of payment (e.g. cash, debit card, credit card). Merchants will also be allowed to provide differential discounts among different brands. Discounts will be allowed for any payment method. As well, differential discounting will be permitted between payment methods and brands. The advertised price must be available for all payment methods. Any discounts must be clearly marked at the point-of-sale. Stakeholders are invited to provide input on how to enable differential discounting on co-badged debit cards.* 1 Merchants can decide whether they will accept multiple forms of debit card payment. In such a case, merchants can choose the lowest-cost option on transactions involving co-badged debit cards. When a consumer uses a co-badged debit card with a merchant who accepts both debit products on the card, the merchant will decide which debit payment option is used for the transaction. Stakeholders are invited to provide input on the amount of time required to implement this proposal. Co-badged debit cards shall be fairly branded. Issuers of co-badged debit cards should clearly indicate which payment options are available on that card and not give preferential branding to one network over another. Stakeholders are invited to provide input on what would constitute fair branding. Debit and credit card functions shall not co-reside on the same payment card. Debit and credit cards have very distinct characteristics, such as providing access to a deposit account or a credit card account. These accounts have specific provisions and fees attached to them. Given the specific features associated with debit and credit cards, and their corresponding accounts, such cards shall be issued as separate payment cards. Premium credit cards may only be given to consumers who apply for or consent to such cards. In addition, premium cards shall only be given to a well-defined group of cardholders. Premium cards were created with the intention of appealing to a specific clientele who meet specific spending and income thresholds. This intention shall be fulfilled by the credit card issuers. *1 - Co-badged debit cards are debit cards that can have access to multiple debit card networks (e.g. Interac and Visa Debit on one debit card). Note that Visa Debit and Maestro are not allowed to co-exist on the same card, as per Visa and MasterCard rules. However, both Visa and Maestro are allowed to co-exist with Interac on a debit card. Presentation to House of Commons Standing Committee on Transport, Infrastructure and Communities Re: Bill C-310, An Act to Provide Certain Rights to Air Passengers November 18, 2009 click here For more information call: Bruce Cran 604 418 8359 Tim Clark, President, Emirates Airline Speech to the European Aviation Club November 12, 2009 click here