Restaurants Canada welcomes today’s announcement from Finance Minister Bill Morneau, and Mary Ng, Minister of Small Business and Export Promotion, regarding new agreements, effective 2020, with major credit card companies to reduce the fees they charge Canadian businesses.
The voluntary, five-year agreements with Visa, Mastercard and American Express will provide welcomed relief for foodservice operators, who spend billions of dollars each year on credit card interchange and processing fees.
“Today’s announcement is a step in the right direction. Restaurants Canada has a long history lobbying for a reduction of credit card interchange fees, including supporting the work of MP Linda Lapointe to alleviate their burden on small- and medium-size businesses.” said Shanna Munro, Restaurants Canada President & CEO. “Eighty per cent of our members tell us that interchange fees hurt their bottom line. We are pleased to see the government respond to their concerns and we will continue to work towards achieving greater relief. The businesses impacted most are run by middle-class Canadians, and when their businesses thrive, so do their communities.”
Visa and Mastercard have committed to lower the fees they charge businesses to an average annual effective rate of 1.4 per cent — down from 1.5 per cent — for a period of five years and narrow the gap between the highest and lowest rates they collect from retailers.
American Express has promised to provide more fairness and transparency as part of a separate voluntary agreement that recognizes its unique business model.
Merchant fees in Canada are among the highest in the world and have long been a major concern for foodservice operators across the country. Interchange and other fees continues to rise as consumers are enticed by premium reward cards. The rewards are financed not by the card companies or issuers, but by restaurateurs and other small businesses.
“On a typical restaurant meal, the credit card issuer often makes more profit than the restaurateur,” said David Lefebvre, Vice President, Federal & Quebec. “We look forward to continuing our work with government creating a fair and level playing field for all restaurant owners and entrepreneurs.”
As a next step, Restaurants Canada is looking forward to working with the federal government toward a cap on interchange fees and prohibiting credit card issuers from increasing and adding new fees without regulatory oversight. The association is also looking to government to remove interchange fees from the tips and taxes portion of purchases.
About Restaurants Canada
Restaurants Canada (formerly CRFA) is a growing community of more than 30,000 foodservice businesses, including restaurants, bars, caterers, institutions and suppliers. We connect our members from coast to coast, through services, research and advocacy for a strong and vibrant restaurant community. Canada’s restaurant industry is an $85 billion industry, directly employs 1.2 million Canadians, is the number one source of first jobs and serves 22 million customers every day.