New Democrats call for permanent abolishment of transaction fees for charitable donations

OTTAWA – Following MasterCard Canada’s announcement that it will waive all transaction fees for Haiti relief donations, New Democrats are calling for the permanent abolishment of fees for all charitable donations made by credit card in Canada.

“I am delighted that the credit card companies are waiving the interchange fees to help with the devastating humanitarian crisis in Haiti,” said New Democrat leader Jack Layton. “However, there are hundreds of other worthy causes that don’t qualify for the waived fees, which means that thousands of dollars generous Canadians give to food banks, homeless shelters and youth programs every year are siphoned off by credit card companies.”

As a result of the rising interchange fees being charged by the credit card companies, fewer dollars are going towards the good causes that so desperately need them. In fact, over the last five years, credit card interchange rates for MasterCard and VISA have increased from an average of 1.6% in 2003, to more than 2.1% in 2009.

Owen Charters, Executive Director of CanadaHelps, a charitable foundation that provides a platform for charities to fundraise online, agrees that the ever-increasing fees charged to Canadian charities for donations need to be reduced or eliminated; “We urge MasterCard, VISA, and American Express to take action in supporting all good causes, all of the time.”
In 2009, CanadaHelps processed $40 million in donations to over 6,500 charities across Canada. To date, they have processed over $125 million in donations for charities. At the lower rate, CanadaHelps would have paid about $1.5 million in credit card interchange fees. With the rate increase, they will now have to pay almost $2 million in credit card fees, a difference of $500,000 that will not make it into the bank accounts of the charities they serve.

“I can’t understand why credit card companies need to extract more profits from the goodwill and generosity of Canadians,” said New Democrat Consumer Protection Critic Glenn Thibeault (Sudbury).

“We’re glad they responded to our call for waiving the fees to help the relief efforts in Haiti. They should do the same to help worthy causes here in Canada too.”