Business

Telus asks CRTC permission to add 1.5% credit card surcharge to customer bills

Canadians who pay their cellphone bill via credit card could soon see an extra fee every month, if Canada's telecom regulator approves a proposal currently before them.

New surcharge would start in October, if regulator approves proposal

Telus proposes surcharge to customers paying with credit cards

2 months ago
Duration 2:09
Telus is facing pushback over a proposal to add a 1.5 per cent surcharge for customers who pay their bills with a credit card. If approved by Canada’s telecom regulator, the new fee would take effect in October.

Canadians who pay their cellphone bill with a credit card could soon see an extra fee every month, if Canada's telecom regulator approves a proposal currently before them.

Telecom company Telus is asking the Canadian Radio-television and Telecommunications Commission (CRTC) for permission to add a 1.5 per cent surcharge to the bills of customers who pay their bill using a credit card. If approved, it would be in place starting as soon as October.

For a theoretical customer in Alberta whose cellphone bill is $100, the charge would bring their bill to $106.66 — $100 for their basic bill, plus $5 for GST, a $1.58 surcharge for the new fee on top of that, plus another eight cents in GST on the surcharge.

"The company plans to provide advance notices of the fee to its existing customers starting in mid-August," Telus said in its letter to the regulator.

Fee could be in place by October

The company is asking the regulator to decide on the proposal by Sept. 7 and would like to start levying the new charge as of Oct. 17, and while the CRTC must rule on the matter, in a statement to CBC News the telecom company made the plan sound like a done deal.

"Starting in October, Telus mobility and home services customers choosing to make a bill payment with a credit card will be charged a 1.5 per cent credit card processing fee," Telus told CBC News in a statement.

Some wireless customers who pay their bill via a credit card could soon see an extra surcharge every month, if the CRTC approves a proposal by one of Canada's biggest telecom providers. (Carlos Barria/Reuters)

The company also said in the statement that numerous other essential services already charge a fee to pay with credit cards, including the Canada Revenue Agency, the City of Toronto, and electrical and gas providers such as Enbridge, Epcor, B.C. Hydro, FortisBC and Alectra.

"This fee helps us recover a portion of the processing costs we incur to accept credit card payments, and the average cost will be around $2 for most customers," the company said, noting that it can easily be avoided by paying through a bank, via a debit transaction, or other means. 

Although the company did not provide an exact breakdown, Telus says most of its customers currently pay via a method that would not accrue the fee.

Telus's discount flanker brands including Koodo and Public Mobile will not be subject to the fee, nor will customers in Quebec.

WATCH | Why Canadians pay more for telecom services than many other countries: 

Do Canadians pay too much for internet and cellphone service?

3 months ago
Duration 7:34
Consumer advocate and wireless bill expert Mohammed Halabi helps explain why Canadian internet and cellphone bills are so high — and what consumers can do to negotiate lower prices.

Telus' rationale for the move stems from a development this summer, when credit card firms including Visa and MasterCard agreed to a settlement that will see them refund millions of dollars worth of credit card processing fees that merchants have paid them over the years. Crucially, that settlement also gives businesses permission to start charging customers those fees directly starting in October, which is what Telus is trying to do.

Previously, many merchants weren't allowed to charge customers directly for the fees that credit companies charge them for processing sales. Such fees can range from less than one per cent of the sale, to more than three per cent for some premium cards.

Because just about every part of its business is regulated by the CRTC, Telus needs the regulator to start charging fees that consumers can expect to start seeing from a variety of merchants soon.

CBC News reached out to Rogers and Bell to see if they have any similar plans in the works, but representatives of both companies did not reply to that request within one business day.

Some customers aren't happy

Some wireless customers aren't enthused by the idea. Kenneth Hart of Windsor, Ont., a Telus customer for 15 years, calls the plan "a money grab."

Kenneth Hart has been a Telus customer for 15 years and he says the company is making a mistake with this new policy. (Kenneth Hart)

"It's a bad business move," he told CBC News in an interview. "They have some accountants telling them this is good. But then you talk about the PR costs, the reputational cost, and it could create … dissatisfaction for those customers who are already … not satisfied."

"This could be the straw that broke the camel's back."

Telus only filed the application on Monday, and the CRTC has already heard from more than 200 Canadians via its website, many of which are opposed to the plan.

Steve Struthers is one of them. The resident of London, Ont., is not a Telus customer but he took the time to give his two cents to the regulator because of how opposed he is to the plan.

"Consumers are already extremely stressed with unaffordable housing, increased food prices, expensive gasoline prices and wages that are not keeping up with any of this," he told CBC News in an interview.

"I'm quite certain they could afford to absorb a 1.5 per cent credit card fee … It bothers me knowing the cellphone companies aren't happy with the money they're making and they still want more in an environment where people are reaching their limit as to what they can pay."

'The last thing anyone needs is an additional fee'

Rosa Addario, a spokesperson for telecom watchdog OpenMedia, says the plan is just the latest way for the industry to extract more revenue from cash-strapped Canadian consumers.

"All three of our telecom providers … have reported increased profits, increased revenue and increased customers for 2021," she told CBC News in an interview. "They are doing better than ever. This is just another way to raise our bills through shady practices and extra fees and adding things on top so that we are paying even more than we already are."

Suze Morrison, a former Ontario MPP, is urging the CRTC to reject the proposal, noting that it will disproportionately impact people who are already financially vulnerable.

"Working class people, low income people are really struggling to make ends meet right now," she told CBC News in an interview. "The last thing anyone needs is an additional fee just because of how they pay their telephone bill to keep their phone lines connected."

WATCH | Canada has 3 major telecom providers. Could that change?

Could Canada grow beyond the Big 3 telecoms?

3 months ago
Duration 4:18
After a nationwide Rogers outage, John Lawford of the Public Interest Advocacy Centre talks to The National’s Andrew Chang about how Canada ended up with only three major telecoms and if that can ever change.

While credit card surcharges are creeping into many businesses, she says it's different for a telecom utility to charge them because it is a necessity.

"A consumer has a choice to go to a mom and pop restaurant or to cook dinner at home or to go to a restaurant that's not charging fees for credit card swipes," she said.

"But we've allowed so much consolidation in our telecom industry and there's such a monopoly in the sector that it's not like folks can say, 'OK, well, if you're going to charge a fee, I'm going to take my business somewhere else.' I have nowhere else to go."

ABOUT THE AUTHOR

Pete Evans

Senior Business Writer

Pete Evans is the senior business writer for CBCNews.ca. Prior to coming to the CBC, his work has appeared in the Globe & Mail, the Financial Post, the Toronto Star, and Canadian Business Magazine. Twitter: @p_evans Email: pete.evans@cbc.ca

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