Advocates for small businesses say that the government's mention of credit card transaction fees in the economic fall statement issued on Thursday is a positive step, but it will not help businesses cope with rising costs in the short term. The financial update also stated that the government intends to enter into negotiations with payment networks, financial institutions, companies, and other stakeholders to reduce credit card transaction fees for small businesses.

Advocates for micro businesses have long pushed for action on these fees, which they say are increasingly difficult to absorb and have become a bigger issue as customers move away from cash. Likewise, the economic statement said the government is releasing draft legislative amendments to the Payment Card Networks Act, and if the industry cannot reach an agreed solution in the coming months, Ottawa will introduce legislation in the new year to regulate credit card transactions.

Also, Gary Sands, vice president of the Canadian Federation of Independent Grocers, praised the federal government's move. While he believes action could have been taken earlier, he said the threat of legislation could provide a strong incentive for stakeholders to reach an agreement in the coming months, adding: "I think it's a big step forward, it clearly shows that the government is committed to seeing a final solution to this issue." Sands had advocated for action on credit card fees for years, saying the gap between what small retailers pay and what large companies pay is "indefensible".

In the same context, the government announced in a separate statement on Thursday that it will launch a series of consultations on small business costs, economic stability in a digital world, and tax fairness. These consultations also include negotiations on credit card fees. Additionally, the Payment Card Networks Act currently allows the federal government to issue regulations concerning payment card networks, including regulations that define disclosure, notification, and pricing terms. The bill published on Thursday will add provisions including that the government can set regulations to define ranges and maximum fees.

In a written statement on Thursday, the Canadian Federation of Independent Business (CFIB) said the government's financial update included a stronger commitment to reducing credit card processing fees for small businesses. However, CFIB president Dan Kelly said he is concerned that fee reductions may be too slow to help with the current inflationary pressures on small businesses. New rules came into effect in October to allow businesses to add surcharges on credit card transactions, but the CFIB report found that many business owners are unsure whether to do so for fear of losing customers. The rules do not reduce the fees imposed on businesses, many of which have already incorporated fees into their retail prices.

The government launched consultations to reduce credit card fees for businesses in August 2021, saying the pandemic rapidly increased electronic payments and online transactions. At that time, it acknowledged that since small and medium-sized businesses have less bargaining power than large companies, they are therefore subject to transaction fees that are "among the highest fees in the world." However, Littler disagreed, saying the vast majority of businesses pay similar fees, except for some high-profile exceptions.

Other jurisdictions have already moved to reduce fees by imposing limits on the amount of fees that companies can charge, including Australia and the European Union.