NEWS: Nunavut June 14, 2017 - 8:00 am

Nunavut plans to regulate cheque-cashing fees by retailers

GN walks fine line to ensure retailers keep offering the service


Cashing a cheque in northern communities without banks might get easier by the end of this year—and, cheaper.

Because there are no bank branches in most Nunavut towns, private retailers such as Arctic Co-op and Northern stores often provide cheque cashing services—for a fee.

“We have heard that there are elders or people that are not well off getting charged huge amounts for cashing cheques,” said Nunavut’s minister of Community and Government Services, Joe Savikataaq, during the consideration of Bill 25—An Act to Amend the Consumer Protection Act—in a committee of the whole meeting June 7 at the Nunavut legislature..

“Right now the average for northern retailers is $3 a cheque or 1.5 per cent of the cheque value,” said Savikataaq, adding that some charge more or less.

Currently the Government of Nunavut has no control over this fee. Savikataaq said federal laws regulate cheque-cashing fees, but these are aimed at banks, not retailers.

Bill 25, which the department says is meant to give Nunavummiut the same consumer protection other Canadians enjoy, allows the minister either to limit or prohibit cheque-cashing fees for government-issued cheques in Nunavut.

Bill amendments also cover relief from unreasonable loan transactions and provide protection from unfair business practices.

The original act, grandfathered to Nunavut from the Northwest Territories, was last amended in 2012.

“The standing committee emphasizes that any regulated cheque-cashing fee must take into account the financial reality and needs of Nunavut residents, specifically the high cost of living that Nunavut residents experience,” said Tom Sammurtok, MLA for Rankin Inlet North-Chesterfield Inlet, who chairs the standing committee.

Sammurtok said the changes have been in the works for some time.

The bill, which received third reading during the legislative sitting, was given assent June 8 by Nunavut Commissioner Nellie Kusugak. 

But before that, the bill received a clause-by-clause examination where discussion largely focused on those cheque charges.

“We are treading a fine line here because, during the consultations, the retailers said that this is a service they provide for Nunavummiut,” Savikataaq said. “They don’t have to cash cheques if they don’t want to and they said that if it becomes too financially burdened or too cumbersome, then they may stop providing the service.”

Any regulations the GN settles on must keep a balanced approach in mind, Savikataaq said.

In general, feedback from northern retailers wasn’t especially positive, said Jodi Durdle-Awa, who is the director of policy for the CGS department.

“They’re not in favour of any sort of limit to what cheque fees can be applied,” she said.

But Durdle-Awa said her department did consult some co-ops—and she shared examples of current cheque-cashing fees. She reminded committee members that retailers are community-led co-operatives and, as such, they do things their own way.

Here is some of the information Durdle-Awa gathered on cheque-cashing in Nunavut from consultations with co-ops:

• six co-ops charge no fees on government cheques;

• one charged a flat fee of $2.50 for non-co-op members;

• six co-ops charged flat fees for all cheque cashing and costs ranged from $2 to $10; two of these would waive the fee if part of the cheque’s value went into a particular co-op service;

• one co-op specified that it has to be 10 per cent of the cheque’s value;

• one co-op would only cash cheques that were deposited at the co-op and would only allow withdrawals of $200 per day;

• two co-ops charged percentage-based fees—one per cent for non-government cheques and 1.5 per cent for government cheques; and,

• two co-ops used a two-tiered fee system ranging in price from $2.50 to a maximum of $15 or two per cent depending on the value of the cheque.

Now that the new legislation is in place, the department is committed to having new regulations in place by the end of the year, Savikataaq said.