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Atlantic Convenience Stores Association

Atlantic C-Store News March 2017

March 28, 2017
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Nova Scotia commits to further red tape reduction

In support of the provincial government’s red tape reduction efforts, Service Nova Scotia has created three new Business Navigator positions. These new staff will assist both new and existing businesses in navigating what the government admits can be “a daunting and complex regulatory environment.”

 

Atlantic premiers commit to additional regional regulatory efficiency initiatives

In late February, Atlantic Canada’s four premiers committed to “additional and substantial initiatives for regional regulatory efficiency in areas identified in research completed by the Atlantic Provinces Economic Council.” The new commitments include

 

–  A phased-in approach to move from four separate provincial licenses to one regional license for activities and occupations in technical safety.

–  An aligned application process and common duration of temporary permits for insurance adjusters to improve response time to severe weather events and other emergencies across the region.

–  Broadening shared training of transportation enforcement officials across the region.

–  Mutual recognition across the Atlantic region in the areas of: head and foot protection, first aid training; and Occupational Health and Safety committee training.

 

“The pan-Atlantic regulatory streamlining is peripherally impacting the convenience industry at the present time,” says ACSA president Mike Hammoud. “But we appreciate the commitment that the four provincial governments have made and the work that is being done to identify more areas for efficiency improvement.”

 

Nova Scotia political parties organizing for provincial election

With the McNeil Liberals 3-½ years into their current mandate, Premier Stephen McNeil is almost certain to call a provincial election in 2017. The constitution says there can be no more than five years between elections and McNeil could wait as long as October, 2018. But with a majority government and a 56% approval rating, it would be highly unusual for McNeil to wait more than four years.

So, place your bets…spring or summer?

 

ACSA pre-budget meetings

ACSA president Mike Hammoud completed a round of pre-budget meetings with the ministers of Finance for Nova Scotia, Prince Edward Island and Newfoundland and Labrador. High on the list was the issue of carbon tax and the impact on motive fuels.

 

According to Nova Scotia Finance minister Randy Delorey, the provincial government has already been active in carbon tax offsets and “there should not be any material increase in gas taxes.” Over in Prince Edward Island, Finance minister Allen Roach indicated that a carbon tax could add 2- to 3-cents to the price of gasoline, possibly as early as December, 2017. NL Finance minister Cathy Bennett says that a carbon tax plan has not been finalized, but Newfoundland and Labrador’s Minister of Environment has said that one option is to continue, at least in part, what was supposed to be the temporary 16.5 cent a litre tax on gasoline, that was introduced in the April, 2016 budget.

Overall, it is anticipated that consumption taxes impacting the convenience channel will largely be left alone in the upcoming budgets. New Brunswick did increase the cigarette tax at the beginning of February, but that was an increase announced in the previous budget.

Nova Scotia is interested in potentially broadening the retail channel for beverage alcohol, possibly through the c-stores, and a follow-up meeting is being arranged with Finance. PEI is focused on the potential expansion of its agency network, but has not closed the door on the possibility of broader retail channel expansion.

 

 New Brunswick retail gas margin adjustment pending

The New Brunswick Energy and Utility Board concluded a retail gas margin adjustment public hearing at the end of January. Stakeholders are now waiting for the Board to file its decision.

“We felt that we made a persuasive argument for an upward adjustment,” says Mike Hammoud, president of the ACSA. “And our retailers have certainly been telling us that costs always keep going up. Folks like the Public Intervener work hard to fight against an increase, so we’ll just have to wait for the Board’s decision.”

 

NB gov. signs new tax revenue sharing agreement with Maliseet First Nations

After endless delays, the New Brunswick government announced in February the signing of new tax revenue sharing agreements with the Maliseet First Nations. Agreements must still be signed with the Mi’kmaq First Nations.

First Nation communities will continue to keep 95% of provincial taxes collected on sales of gasoline and tobacco to non-natives at retail outlets on First Nations reserves. That’s estimated to be worth upwards of $42-million in the government’s current fiscal year. The First Nations’ share will drop to 70% on yearly revenues over $8-million, while First Nation retailers with large card lock operations will have 25% of motive fuel volumes sold excluded.

First Nation retailers will also be required to maintain motive fuel and tobacco prices no lower than the lowest non-native price in the markets where they compete.

The tax revenue sharing agreements have been a thorn in the side of non-native retailers for several years as some First Nations communities used their huge profit advantage to gain an unfair competitive advantage over non-native retailers, which was in contravention of the agreements.

“Hopefully the unfair pricing practices will be eliminated,” says ACSA president Mike Hammoud. “But there’s still a huge incentive here for First Nations to expand their retail footprint in New Brunswick. The ACSA has always maintained that it’s unfair to non-native retailers in New Brunswick to fund First Nations economic development, education and social initiatives through these agreements.”

 

NL beer margins still an issue

The ACSA continues to advocate for higher beer margins for c-store retailers with the Newfoundland and Labrador provincial government. The point has been, and continues to be, the low contribution per square foot given increasing overall costs and the costs that are specific to handling beer products.

ACSA president Mike Hammoud made another pitch to Finance Minister Cathy Bennett in March. The minister won’t respond until after the government tables its budget in early April, but Mike is hopeful that at least some increase will be considered as a starting point.

 

Federal government marches forward on more tobacco control updates

The federal government continues to move on revamping the Tobacco Act into the Tobacco and Vaping Products Act. The proposed Act amends the Tobacco Act to regulate vaping products as a separate class of products. The new Act would also support the federal government’s intent to implement plain packaging for tobacco products.

“The federal government claims that plain packaging measures help make tobacco products less attractive and therefore less appealing, particularly to youth,” says ACSA president Mike Hammoud. “But the only country with any track record in plain packaging is Australia, and the impact there has been nothing short of underwhelming.”

And it doesn’t stop there. The federal government is also considering several potential additional measures:

– raising the minimum age of access for tobacco nationally to 21 years;

– developing regulatory options for reducing the addictiveness of tobacco products; and

– crack down on contraband by tightening controls around the supply and movement of materials needed to manufacture tobacco products as well as the actual sales of illicit tobacco.

Health Canada is running an online survey about future tobacco controls until April 13. The survey can be accessed at https://www.canada.ca/en/health-canada/programs/future-tobacco-control.html

 

NB Liquor expands grocery store wine sales

Starting with a pilot program in five grocery stores in 2014, NB Liquor announced in late February that it would expand its grocery store retail network from 18 to 44 locations.

“There’s a big convenience factor retailing wine through grocery stores,” says ACSA president Mike Hammoud. “And we definitely know that there are certain adult demographic segments who are reluctant to shop in government retail outlets.”

NB Liquor estimates that upwards of 30% of the grocery store sales are incremental and Hammoud thinks that there’s strong potential in expanding retailing through the c-store channel.

“We’ve had discussions with NB Liquor and one of their concerns has been that expansion through the c-store channel would cannibalize government store sales. We think that we can provide a convenient, welcoming shopping environment similar to grocery stores and that can only be a bonus overall for government beverage alcohol sales.”

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