Jack Layton opts for retail politics

Eliminating ATM fees is pointless

CARSON JEREMA STAFF

“The environment will be the single most important issue of 2007,” read the headline to Globe and Mail editor-in-chief Edward Greenspon’s Saturday column. Stéphane Dion has built his image around the environment and his “three pillars” approach. Even the Conservatives are talking like Kyoto ideologues. With the Green Party experiencing rising popularity, anyone who hopes to have a political future appears to be painting themselves all shades of green.

However, unless Canadians can be educated to “feel” the environment, its importance remains suspect. Take the October Winnipeg election as a test case. For all the unveiling of lavish environmental policies, Winnipeggers opted for the status quo. Environmental issues did play a role in St. Boniface, but that is where the Olywest hog processing plant will be built, and residents will “feel” (smell, breathe) the hogs. Unlike doomsday scenarios of a roasted planet sometime in the future, the negative effects are clearly understood.

So in the absence of smelly hog barns to fight over, what gets voters motivated? If you’re Jack Layton, the answer is apparently obvious: ATM fees.

Layton announced last Thursday that, “The NDP will table amendments to the Bank Act that would eliminate fees for using ATMs.” Perhaps it is because Layton is feeling edged out on the environment, an issue his party used to own, or maybe he really just hates banks. More likely the proposal illustrates Layton’s desperate desire to hold the balance of power. In order to justify to his base a possible decision to prop up the government in a confidence motion, Layton needs “results.” The Tories apparently bit, as Finance Minister Jim Flaherty came out demanding to know why banks charge these fees.

Either way the announcement is a clear attempt to tweak Canadians’ ears by addressing an issue that they can easily understand. Who doesn’t despise paying $1.50 to withdraw money? Your own money, no less. The proposal has similar retail value as the Conservative decision to cut the GST.

But, most banks do not charge their own customers to use their ATMs, and instead offer fixed monthly transaction rates. If customers want to use the machine of another bank that they do not pay a monthly fee to, then they have to pay a “convenience fee.” Layton wants banks to effectively provide transaction services at no cost. Banks profit billions each year, why shouldn’t they provide free services?

Moreover, Layton’s proposed amendment to the Bank Act would have absolutely no effect on companies that operate “white label” or “no name” ATMs. Common in convenience stores and bars, store retailers often tack on an additional surcharge for providing white label machines. This is in addition to the fee customers are already charged for using a machine that isn’t provided by their own bank. Each transaction can often cost between $3 and $6.

Under Layton’s proposal there would be less incentive for banks like CIBC to provide ATMs in public places. Already accounting for 70 per cent of all ATMs in Canada no-name machines could very easily be the chief beneficiaries to forcing banks to eliminate machine fees — not “working families,” as Layton claims.

But banks in the United Kingdom don’t charge ATM fees, Layton argues. This ignores the fact that British banks make up the cost elsewhere such as with higher unauthorized overdraft fees. White-label machines have also flourished in Britain in recent years.

A similar argument is often advanced by advocates for fixed election dates — “but Australia does it.” Never mind that the vagaries of parliamentary systems make the policy precarious unless there is a majority or a stable minority coalition in power. In other words, so what if they have fixed election dates down under? And so what if they don’t charge ATM fees across the pond? Canada certainly should look to other countries for policy ideas, but the mere existence of policy elsewhere does not justify it being implemented here.

Besides, if people really don’t like paying the $1.50 fee, they can always go the distance to their own bank. Or they can take out $100 instead of $20 five times. Or, they can switch banks. But people don’t think like that and the NDP leader is banking on voter affection for cheap (free) conveniences. Antipathy for banks would be an added bonus, as would voter stupidity.

At one time, the NDP prided itself on being a party unconcerned with electoral success. They stood for issues, no matter how complex, so long as the party viewed them as important to a just and fair society. But, as politicians of all stripes go after the environment and the left is looking increasingly crowded, the NDP wants to resonate with voters.

It does not matter if policy proposals are pure idiocy. The NDP is opting for retail politics and retail politics is, unfortunately, where votes are won and lost.