April 06, 2010
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News: Canada's CCSA Calls For Stiffer Rules
Canada's small business owners and convenience stores have been strongly impacted by the credit card crisis and tobacco bootleggers. The Canadian Convenience Stores Association (CCSA) released a report that showed nearly 10 percent of the country's convenience stores went out of business last year. That number totaled over 2300 stores of which nearly two-thirds were located in Quebec and Ontario. The CCSA believes high credit card payment transaction fees contributed to the greatest portion of the problem. Small businesses have been blasting the major credit card networks that set the rate of payment transaction fees and refuse to give merchants access to the negotiation table. Despite the high number of convenience stores that went out of business, overall retail sales were up by 0.6 percent for the year.
The CCSA is asking lawmakers to take action and implement new credit card rules and other laws to protect merchants. Like all countries, the Canadian economy depends on the success of the retail business which totaled over $31.9 billion and employs nearly 165,000 employees. The retail business depends on the ability to offer consumers the option of paying by debit and credit cards. Interchange fees cost Canadian merchants over $200 million annually. Add to that the estimated $260 million of tobacco sales that are lost to bootleggers.
Any way you look at it, the Canadian government seems to be struggling. Michel Gadbois, the Sr. Vice President of CCSA said that in looking at the tobacco bootlegging situation and out of control credit card payment processing fees, the government appears to be doing a poor job. Gadbois noted that the problem was either a lack of enforcement or a situation of looking the other way. Apparently the government has realized the cost to it. The CCSA estimates that 22 percent of the tobacco sold in Canada are lost through illegal sales. Lost tax income from these sales is costing the government over $1.5 million a year.