02/03/2014 04:45 EST | Updated 04/05/2014 05:59 EDT

NDP, Tories wrongheaded in battle against ATM, banking fees, says critic

OTTAWA - The NDP is pushing for a cap on automated teller fees, while the governing Conservatives promise more no-fee banking — but not everyone is convinced either measure will help much.

The New Democrats have introduced a motion urging the government to cap the fees charged to consumers who use automated bank machines.

At the same time, the government is all but promising to make good on its throne-speech pledge to provide Canadians with more free options for their everyday banking chores.

But Duff Conacher of the group Democracy Watch says the only way to protect consumers from gouging is to impose limits on big-bank profits.

Conacher says capping ATM fees or providing more free banking options will only push the banks to find other ways to increase the cost to consumers.

The Harper government promised last fall that it would find ways to make banking free of charge for more people.

Under questioning Monday from the opposition benches, junior finance minister Kevin Sorenson repeated that promise.

"Our government will take further action to expand no-cost banking options available to Canadians," Sorenson told the Commons.

The Canadian Bankers Association says 29 per cent of Canadians already pay no service fees on bank accounts, while another 34 per cent pay between $1 and $15 per month.

And it sees ATM fees as a "convenience" charge for people who choose to use bank machines that are privately operated or not affiliated with a consumer's own banking institution.

Sorenson did not elaborate on the government's plans.

The New Democrat motion, meanwhile, is calling for a 50-cent cap on individual transaction fees.

NDP finance critic Peggy Nash said capping fees will help vulnerable Canadians.

"Eight consecutive budgets and no action," Nash told the Commons.

"Even the finance minister knows that this is a legitimate problem and has said so, especially so for seniors, students and persons with disabilities. And yet he chooses to do nothing about it."

But even if fees are capped, banks will find a way to make money elsewhere, said Conacher.

"Capping one fee will not be effective because the banks will just hike other fees, or interest rates, to make up whatever they lose from having one fee capped," he said.

"The effective way to stop gouging is to have independent audits of every division of the banks' operations, and wherever excessive profits are found, fees or interest rates would be required to be reduced."