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Atlantic Convenience Stores Association

Atlantic C-Store News – April 2014

June 3, 2014
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Holding the line on tobacco taxes

Fiscal 2014 – 2015 budgets have been tabled in the Atlantic provinces and the ACSA is pleased that three of the four provinces held the line on increasing tobacco taxes.

“There is reliable evidence that increasing tobacco taxes without strengthening penalties for illegally selling tobacco has little effect on reducing smoking and increases black market demand for illegal smokes,” says ACSA president Mike Hammoud. “You’re just shifting demand underground and governments end up losing millions of dollars in tax revenue.”

The ASCA had pre-budget meetings with all four finance ministers in Atlantic Canada and stressed this point.

“Unfortunately we got the sense that a tobacco tax increase in Newfoundland and Labrador was a done deal,” says Hammoud. “We had much better discussions in the Maritimes, and while change comes slowly we feel that we are making progress on getting provincial governments to think seriously about toughening up their anti-contraband legislation.”

 

Retailer due-diligence checklist for the sale of age-restricted products

As convenience retailers we need to be extremely responsible when selling age-restricted products. Recently, a convenience store retailer in Nova Scotia was convicted of selling tobacco to a minor. When delivering his ruling, the judge in the case provided a list of control measures that retailers should follow to show their due-diligence in ensuring that proper age-verification practices are adhered to in their store. The following links below provides a list of the measures, and more, outlined by the judge:

Click Here for English

Click Here for French

Minimum wage rates moving up

Workers on minimum wage in Prince Edward Island will soon see a bump in pay. On June 1, the provincial minimum wage will increase to $10.20 an hour, followed by another increase to $10.35 in October.

“It’s not just minimum wage earners who are affected,” says ACSA president Mike Hammoud. “We all know that the minimum wage is used as a benchmark for all other hourly wages.”

Current minimum wage rates in the other Atlantic provinces are $10 an hour in New Brunswick, $10.40 an hour for experienced workers in Nova Scotia and $10 an hour in Newfoundland and Labrador. The NL rate increases to $10.25 an hour in October.

“Retailers in New Brunswick should start planning now around the impact of an increase in their minimum wage because the gap with the other Atlantic provinces is getting too big and the province will lose labour competitiveness,” says Hammoud.

Critics of the newer minimum wages coming into effect claim that minimum wage earners are still the working poor. Their solution is to increase the minimum wage rates even higher. The ACSA and other business advocates maintain that raising the minimum wage simply puts more money in government coffers since minimum wage earners see larger portions of their pay going to income tax.

“Retailers had to deal with monstrous increases in the minimum wage in a few short years,” says Hammoud. “And governments are now saying that they want to index minimum wages to indicators like the consumer price index.

“But there’s a disconnect between higher wages in low income brackets and the incremental income taxes that these workers pay on those higher earnings,” says Hammoud. “The right income tax policy can be more effective than simply raising the minimum wage.”

 

Gearing up for a New Brunswick provincial election

New Brunswickers will go to the polls later this year in a provincial election. The opposition Liberal party has consistently been leading in public opinion polls, but anything is possible as the outcomes of recent elections in other provinces have shown.

“Our focus for the ACSA will be making a crackdown on illegal tobacco sales more of a political issue,” says Mike Hammoud. “We know there’s a big illegal tobacco market in New Brunswick and the government is losing millions of dollars in tax revenues that could be going towards health, education and other fiscal priorities.”

Just recently, the ringleader of a Québec smuggling syndicate was convicted of selling more than 20-million illegal cigarettes into Nova Scotia over an 18-month period. Those illegal cigarettes represent almost $6-million in lost provincial tax revenues at today’s rates.

“That’s just one smuggler,” says Hammoud. “And there’s no reason to think that a similar situation doesn’t exist in New Brunswick.”

The ACSA is advocating for tougher legislation similar to what was done in Québec.

“In Québec they cracked down on the illegal market with tougher penalties and things like seizing assets obtained through crime,” says Hammoud. “Legislation can go a long way in changing the dynamics of the illegal market to the point where the criminal profits aren’t worth the risk.”

 

ACSA launches first Lobby Day

Lobby Day is a name used by advocacy groups for a special day during the year when an advocacy group arranges meetings with politicians or senior government officials to create awareness and knowledge of important issues relevant to the advocacy group.

The ACSA will launch its first Lobby Day on April 23, targeting MLAs in the Nova Scotia legislature. Approximately 20 retailers will meet with MLAs during the day, followed by a meet-and-greet reception in the evening.

“Lobby days are an effective communication tool and we think they’re a good channel to develop support for our issues,” says ACSA president Mike Hammoud. “Issues that we’ll be discussing include the sale of beverage alcohol in convenience stores, common sense regulation of flavoured tobacco, tougher legislation to fight the sale of illegal tobacco, and a review of Nova Scotia’s regulated retail gasoline to make it more effective.”

Lobby Day success in Nova Scotia will create opportunities for lobby days in the other Atlantic provinces.

 

Upcoming events

June 11
ACSA/ NACDA Maritime Golf tournament – Dieppe, New Brunswick

June 25
ACSA/ NACDA Newfoundland and Labrador Golf tournament – St. John’s, Newfoundland and Labrador

August 27
Convenience Store Day – Various locations across Atlantic Canada

November 5
2014 Industry Report and Retail Convenience Awards – Halifax, Nova Scotia

 

Fighting knee-jerk regulations on flavoured tobacco

Anti-smoking groups across the country are pressuring provincial governments to implement outright bans on all forms of flavoured tobacco products. It’s a scary proposition because favourable political optics can trump common sense regulation.

“Alberta has the legislation in place for a total ban,” says Mike Hammoud, president of the ACSA. “But fortunately there seems to be some sober second thought going on.”

The ACSA fully supports restricting the sale of tobacco products to under-age youth, but maintains that bans are too politically convenient.

“Menthol cigarettes have been in the market since the 1920s and they cater to a niche adult segment,” says Hammoud.

“But menthols and other well-established adult products like wine-flavoured cigars get lumped in with everything else, even with what people are calling the ‘kiddy’ offerings.”
Hammoud also points out that bans simply create black market manufacturing and smuggling opportunities.

“Regulators are naïve if they think that banning flavoured tobacco will remove the products from the marketplace. Any legislation that impacts the sale of legal tobacco must be complemented by planned deterrence and enforcement measures to address the likelihood of increased black market sales.”

The ACSA recently met with Leo Glavine, minister of Health and Wellness in Nova Scotia to discuss the regulation of flavoured tobacco and came away cautiously optimistic.

“Minister Glavine appears to be taking a pragmatic approach to the issue and says that the government will not rush any legislative or regulation changes without a thorough review,” says Hammoud. “Our industry welcomes that kind of approach.”

 

Election watch in Newfoundland and Labrador

The resignation of former Newfoundland and Labrador premier Kathy Dunderdale in January, just two and a half years after winning a majority government, appears to have thrown the provincial government into no-action limbo.

“The province has a well-respected and capable premier in Tom Marshall,” says ACSA president Mike Hammoud. “But he’s a caretaker premier and the PC party is months away from electing a new leader. And then they’ll be facing a provincial election within 12 months of electing a new leader.

“In the meantime, public polling support for the PCs is up since Premier Marshall took the post, but still well behind the opposition Liberals, the government is dealing with its third deficit, major projects like Muskrat Falls are behind schedule and over budget, and the departments we deal with seem to be frozen in terms of making decisions or taking action. It’s very frustrating for both the association and Newfoundland and Labrador convenience retailers.”

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