Local Telecommunications: Where’s the Competition?
Consumer Protection in ECommerce
Moving Foward on Privacy
New Report: Banking in Rural Canada: Ensuring Rural Consumers Have Adequate Service
Proposed Rules for Payday Lenders Present a Dilemma for Consumer Advocates

Local Telecommunications: Where’s the Competition?

If you were one of the many who thought that the CRTC’s decision to allow competition in local phone service, as well as long distance, would quickly eliminate the need for a regulator, think again. Regulatory activity in the telecom area is as intense as ever, just trying to help competition along in an industry still characterized by monopoly. It turns out that competition doesn’t just happen because you allow it; there’s a lot of groundwork that needs to be put in place first.
Inside Wiring
One problem that competitors face, in both the telecom and cableTV fields, is getting access to multi-unit dwellings. In the monopoly era, there was only one company with which landlords had to deal. Now that there are a number of service providers chomping at the bit to get in to these profitable buildings, landlords realize that they have a potential bonanza on their hands. Suddenly, what used to be taken for granted (access to the building) is now a hot item. But if landlords limit access to certain service providers, what happens to consumer choice?
PIAC is working with its consumer group partners to help the CRTC sort out this problem, with a view to maximizing consumer choice while respecting the needs of building owners to maintain the integrity of their properties.
Service Improvements in Rural Areas
A couple of years ago, in the CRTC’s High Cost Area proceeding, PIAC argued strongly for rural/urban equity, in terms of both quality of service and rates. The CRTC subsequently ordered telephone companies across the country to upgrade service in rural areas. But it left open the possibility of further rate increases in order to fund these upgrades. In response to the CRTC, a number of rural telephone companies have now tabled their service improvement plans. While these plans include important extensions and upgrades of service, they rely on local rate increases of up to 50% to fund the improvements. The rubber has hit the road.
PIAC has been representing residential consumer groups in these proceedings, beginning with the Northwestel hearing in Whitehorse, Yukon in June. In that hearing, PIAC, on behalf of CAC/NAPO, argued against the proposed $5/mo. local rate increase (which would have raised basic local rates to over $31/mo.), citing high levels of poverty and unemployment in many outlying communities. We brought in experts on financial matters to show that the company’s request for a 12.25% rate of return on equity was unreasonably high. And we argued for a fair balancing of the cost burden between northerners and southerners. We’re waiting for that decision. We’ve also filed submissions in respect of other rural telco service improvement plans, opposing local rate increases that would require people to pay up to $31/mo. for basic service.
The Price Cap Review
In preparation for next year’s review of the price cap regulatory regime, the CRTC recently asked for input on the agenda of that proceeding. In association with its consumer group partners,.PIAC filed a detailed submission urging the Commission, among other things, to put telco profit levels and quality of service at the top of the agenda. PIAC emphasized the importance of focusing on how consumers have fared in terms of rates and quality of service, in comparison with the pre-price cap regime in Canada.


PIAC is working closely with other consumer groups, industry representatives, and governments to develop appropriate Codes of Practice, Trustmark schemes, and online dispute resolution mechanisms for consumers engaging in electronic commerce. We are also working with our colleagues internationally to ensure adequate protection for consumers in the online environment. Ultimately, we hope to see widely adopted international standards of business practice that will provide consumers with the confidence they need in this new global marketplace.


One of the biggest issues facing consumer groups today is privacy, and in particular, informational privacy. PIAC has been a leading advocate of consumer privacy over the past decade, and continues to play a key role in the development of legislation and policy in this fast-moving area. Over the past few months, we have:

  • been working and speaking on issues in health privacy;
  • appeared before a Senate Committee to address issues of consumer privacy;
  • provided input to the federal government on the design of key regulations under Bill C-6 (re: the protection of publicly available data);
  • provided input on and publicly supported Senator Sheila Finestone’s proposed Privacy Charter; and
  • responded to the Ontario government’s Consultation Paper on a proposed new Ontario Privacy Act.


Bank branches are quite important to rural consumers and businesses, and when the only bank branch closes in a small town, it can be traumatic for the entire community. Unfortunately, many rural communities are facing just this situation. Our survey of sample rural areas found a 45% rate of bank branch closures between 1989 and 1998. In addition, the banks have announced more branch closures in the next year.
PIAC’s new report documents the emerging gap in banking services in rural areas, considers alternatives to bank branches for delivery of financial services and reports on the rural consumers’ opinion on these alternatives based on a public survey commissioned for the study. The report concludes with five key recommendations to the federal government on how to address the problem:

  1. Renew the Commitment to Rural Consumers: The federal government should take a fresh look at the rural banking issue, and revitalize its commitment to ensuring that rural Canadians have access to adequate banking services. The federal government should not stand by while rural consumers’ access to banking service is reduced to white label ATMs and informal banking with local merchants.
  2. Monitoring Access to Banking Services in Rural Areas: As the financial service sector changes, there needs to be monitoring of banking services in rural areas, so that rural consumers’ situation regarding access to financial services can be fully understood. At the moment, it is quite difficult to even track rural branch closures. Also, ATMs are very important to rural consumers, and there is currently no public source of information on rural consumers’ access to ATMs.
  3. Oversight of Branch Closures and Industry Restructuring:To improve banks accountability to consumers, the government should monitor what activities banks have undertaken to maintain service in rural areas. In addition, it should encourage the banking industry, through monitoring and educational activities, to make service commitments to rural Canadians.
  4. Support for Communities Facing Branch Closures: The government should encourage other types of branches to replace bank branches. The main way to do this is to increase the potential of credit unions to expand their operations, which is already underway. It is also very important that communities with no bank branches have access to expertise on alternatives to bank branches and how to establish these alternatives in rural communities. The government should therefore set up a program to assist communities in restoring or establishing banking services.
  5. Strategy on Post Office Banking: The government should immediately review the activities of Canada Post in the banking sector, and develop a federal strategy to ensure that Canada Post’s involvement in the banking sector enhances rural consumers’ access to high-quality financial services, and does not further erode access. There should be a moratorium on the placement of white label ATMs in post offices until there has been a public debate about the role of Canada Post in providing banking services.

Banking in Rural Canada: Ensuring that Rural Consumers Have Adequate Service:
Please call PIAC (613) 562-4002 ext. 60 or fax to (613) 562-0007 Coilbound 90 pages $17.

Proposed Rules for Payday Lenders Present a Dilemma for Consumer Advocates

“Need money before pay day?” asks a Money Mart poster. This is an advertisement for a payday loan, which is a small loan (generally $100 to $300) made on the basis of a cheque post-dated to the customer’s pay day. The cost of a payday loan can range between $15-$25 for $100, which calculated in terms of an annual percentage is between 390% and 650%. While the Criminal Code prohibits charging interest rates of over 60%, no payday lender has been prosecuted, and the industry continues to grow.
Should consumer advocates support rules for payday lenders that will secure their foothold in the financial services sector, or argue for an interest rate cap that would force them out of business? PIAC would lean towards disallowing payday loans, except that several anti-poverty activists have pointed out that many poor people rely on these loans as their only source of credit. It would be better for these people if there were another source of small amounts of credit, but at the moment, there are no other realistic alternatives for people without credit cards or overdraft protection. It is therefore perhaps better to allow payday loans rather than leave many poor people with no source of credit (or only underground ones).
Should consumer advocates participate in the development of rules for payday lenders on the basis that payday loans are a necessary evil? Let us know what you think.