The Finance Department said the federal government hasn鈥檛 abandoned a Liberal pledge to lower the fees merchants pay every time a shopper pays with a credit card.

The Liberals promised in the spring budget to run a consultation on the proposed changes, which it did over the summer.

Finance Minister Chrystia Freeland was supposed to outline next steps, including any legislative changes needed to regulate fees, in her economic update earlier this month.

But the update didn鈥檛 mention the merchant fees.

Freeland鈥檚 department said it is continuing to talk with all those affected by any change and that any update 鈥渨ill be provided in due course.鈥�

Business associations said they鈥檙e looking for federal action to ease costs on already-strained small and medium-sized businesses, and hoping the plan to lower fees doesn鈥檛 drop down the government鈥檚 agenda.

The Liberals made the promise to lower fees in the 2019 election campaign, but the pandemic appears to have sidetracked plans like so many other federal priorities.

After the Liberals pledged in the budget to get moving on things, Freeland approved a consultation plan heading into the summer that was outlined in a briefing note to her.

That note, obtained by The Canadian Press under the Access to Information Act, went through the history of the issue and how previously the government got Visa and Mastercard to voluntarily reduce their interchange rates, first in 2015 and again last May.

Typically, rates range between about one per cent and just under three per cent of the value of a purchase.

The actual amount is determined by multiple factors, including the merchant鈥檚 industry, whether the purchase was in-store or online, and the type of card used with premium cards charging higher fees. All those fees help credit card issuers like banks cover costs, but also pad the bottom line.

鈥淐redit cards are very profitable and further reductions to interchange rates will likely have a negative impact on issuers鈥� revenues,鈥� officials wrote in a June presentation, attached to the Freeland briefing note.

The costs to merchants has jumped during the pandemic as more people use credit cards for purchases online, and even small, in-store buys that would previously have used cash like a drink and a snack.

Anne Kothawala, president and CEO of the Convenience Industry Council of Canada, said paying fees has become that much more difficult through the pandemic as more customers pay with plastic even while revenues lag.

鈥淲e鈥檝e argued this for a long time that banks shouldn鈥檛 be able to impose their costs on to corner stores and other small businesses,鈥� Kothawala said.

鈥淥ne of the most significant ways that the federal government can help businesses that have been impacted by the pandemic is to meaningfully protect retailers from this total imbalance of power.鈥�

Kothawala also said she thinks fee reductions need to be legislated, fully transparent and uniform in their application so different players in the system don鈥檛 have openings to pass on extra costs to small businesses.

Karl Littler, senior vice-president of public affairs with the Retail Council of Canada, estimated the cost to merchants is approaching $10 billion, up from about $7 billion before the pandemic.

Littler said he still expects the government to act some time in 2022, and suggested part of the delay may be because the Liberals are looking at whether the voluntary model used previously is still fit to be used now.

鈥淚 do believe they鈥檒l reduce it. I don鈥檛 think this will drag for three or four years,鈥� he said.

鈥擩ordan Press, The Canadian Press