Federal Pre-Budget Submission (Budget 2018)

National Convenience Stores Distributors Association

Federal Pre-Budget Submission (Budget 2018)

Small and mid-sized retailers, and the distributors that serve them, are faced with a unique set of pressures amidst Canada’s evolving retail landscape. It is critical for the Government of Canada to adopt policies that not only improve the competitiveness of small businesses, but provide a regulatory environment which allows an entrepreneurial spirit to thrive.

No sector has learned to adapt to rapidly changing business realities better than Canada’s convenience store sector. It is true that small businesses are vital to Canada’s business landscape, and we believe that convenience stores and their distributors, represent the heart of our economy, right in your neighbourhood.

The convenience store industry in Canada employs over 227,000 hardworking Canadians, and includes distributors at the top of the supply chain all the way down to retailers in thousands of stores from coast to coast to coast. It contributes more than $56 billion annually to the Canadian economy, collecting over $21 billion in taxes on behalf of provincial and federal governments.

While our sector continues to adapt, we remain one of the most heavily regulated industries in the country, stifling our growth. We are pleased that Budget 2018’s focus is on improving productivity and competitiveness for Canadians and businesses, as this is critical for small business retailers and their corresponding supply chains.

Convenience store distributors feel that one of the biggest barriers to productivity in our industry is over-regulation; not just on our operations, but on the products sold in our stores. Eliminating cumbersome regulation is vital to improving the competitiveness of small businesses including convenience stores in Canada, particularly at a time when many retail operations are struggling.

Our pre-budget submission for 2018 provides an overview of some of the challenges facing our distributors, including:

  • Excessive Credit Card Fees
    • Recommendation: Help improve the competitiveness of small businesses by capping credit card fees to reasonable rates in order to bring fairness and transparency to the payments industry in Canada.
  • Over-Regulation of Products Sold in C-Stores
    • Recommendation: Reconsider the implementation of Bill S-5’s components on plain packaging of tobacco products, which will result in an increase of illegal tobacco in Canada.
    • Recommendation: Allocate greater resources to combat Canada’s illegal tobacco industry, which is poised to grow if plain-packaging is introduced.
    • Recommendation: Provide a year-long implementation period for S-5 for retailers and distributors in order to provide an appropriate amount of time to address contraband tobacco.
    • Recommendation: Maintain the existing taxation rate on tobacco products to prevent driving sales to the black market (a consideration that was also made by elected officials surrounding marijuana legalization).
    • Recommendation: Consult with distributors and retailers on the impact Bill S-228 will have on convenience stores (specifically, how it may interrupt the supply chain and interaction between manufacturers and distributors of products).
  • Access to off-brand (grey-market) counterfeit products;
    • Recommendation: Work with retailers and distributors to educate on the dangers of purchasing grey-market confectionary, beverage and ice-cream products, and enable border enforcement officials to prevent the flow of these goods into Canada.