Nunatsiaq Online
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

BETH BROWN
Cashing a cheque at your community co-op could get cheaper now that Bill 25, An Act to Amend the Consumer Protection Act, has been approved by the legislative assembly with urging from Joe Savikataaq, minister of Community and Government Services. (FILE PHOTO)
Cashing a cheque at your community co-op could get cheaper now that Bill 25, An Act to Amend the Consumer Protection Act, has been approved by the legislative assembly with urging from Joe Savikataaq, minister of Community and Government Services. (FILE PHOTO)

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.

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(15) Comments:

#1. Posted by consumer on June 14, 2017

Its time for direct deposit.
Those who have no bank accounts, next time your in a community that has a bank, open one up. Those that have elderly parents, help them.

#2. Posted by Free on June 14, 2017

The worst is the pay-to-pay fees that the Northern charges when you try to put money on your charge card…  Sure, charge fees to take out money, but charging fees to put in money?  Rip off!

#3. Posted by Jesse lyall on June 14, 2017

Coop and Northern are biggest crooks of the NORTH taking advantage of the people and charging huge fees in cambridge bay, the northern is so guilty of this and they laugh at us as all they want is profit all of them.

#4. Posted by Eskimo Joe on June 14, 2017

Northmart and Northern Stores are abusing this system for so many decades.  I’m really glad to see this article!  Thank you, Joe!!

#5. Posted by eskimo joe on June 14, 2017

not to mention one nunavut retailer raking all the $$ with their own company cc, charges made every time you use it for anything. and they are laughing all the way to the bank. shame, and the staff? they treat their customers like dirt bags. #4, change your handle, you’re encroaching in my space

#6. Posted by Inuk on June 14, 2017

I thought it was the law that there has to be charges on cheques no matter where you are in Canada because they are not banks. Just a thought

#7. Posted by in the know on June 14, 2017

#1 is correct… get direct deposit, this is the best idea
#6 not a law ... and most banks charge fees in some form
I would think that in most cases retailers are taking a large amount of risk by offering cheque cashing at all, and most would probably rather not offer the service regardless of the fees charged.

Besides the increased chance that the customer will spend some of their money in the store, in most cases the wages needed to process and account for the cheques cashing as well as the risk of fraud, cheques bouncing and incurred NSF fees will well outweigh the fees ever being collected.

#8. Posted by Nevada Bob on June 15, 2017

#7 is correct, not to mention the cost of holding all that cash in a small community for the purpose of cashing those cheques, the cost of getting the money there in the first place, the cost of securing that cash, and the cost of handling it.

#9. Posted by Qanuqtuttauq on June 15, 2017

And who has power to make the Northern stop taking all the hard earned money from it’s staff that they force you to put on their cards?  3 bucks each time you use it or check your balance. 

In the mean time we can’t afford fruit and many basic groceries so jacked up pricing. Headquarters must just love him profitting store off hunger.

#10. Posted by NoWorry on June 15, 2017

#7 and 8, you must also know that our store has an unbelievable profit margin including this jack-up on freight.  It covers fees. 

Atm runs out of money all the time but no rush to fill it as they meet their requirement.

#11. Posted by why on June 15, 2017

why only show Co-op fees? Show Northern/Northmart fees too.

#12. Posted by Joe Blow on June 15, 2017

The Government wants to control check cashing and is making it out like Co-op is over charging…..this is a service that we provide to our customers and they take all the risk involved with cashing checks…...maybe the government will start reimbursing Co-op’s for all the NSF checks going forward….Also the Government is focusing on the wrong issue,the answer is simple,the government needs to focus on getting BANKS in each community…..wouldn’t that solve the issue??

#13. Posted by Alethea on June 16, 2017

10% of the cheque’s value?! That’s criminal.

#14. Posted by nobody on June 18, 2017

RBC opens accounts remotely. You don’t have to wait to get to a community with a branch. Call their 1-800 number.

#15. Posted by In the Know on June 19, 2017

#10 Unbelievable Profit Margin? I’m not sure if that is accurate… With the cost of labor, power, rent and freight being as high as they are here I just don’t buy that…

Also as this article is mainly about co-ops, I would point out that all “profits” are kept by the members of the Arctic Coop system including profits from the Iqaluit Coop businesses

I do see people complaining about the prices of goods all the time, of course who doesn’t want their single highest expense to be lower! but what I don’t see are other grocery stores opening here (as one would expect if the current incumbents were really unfairly priced)

Instead we see online business that promise lower priced goods, but at what expense? these businesses are able to offer a lower price to the local consumer because they do not pay for a local store, employ local people, or generally contribute in any real way to the local economy… 

Is this a good trade off?

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