ACSA – Atlantic C-Store News – March 2021

Political winds…they keep a changin’

Stephen McNeil has left as premier of Nova Scotia and Iain Rankin has been sworn in, to captain the Liberal ship. Rankin has been an MLA since 2013 and his tenure has all been under McNeil’s government where he served as both Minister of Environment and Minster of Lands and Forestry.

An interesting side note is that Rankin worked in a family convenience and gas business. That was readily apparent during a Zoom meeting that Mike Hammoud from the ACSA and Anne Kothawala from the Convenience Industry Council of Canada had with Rankin during his leadership campaign.

Along with Rankin, 16 cabinet ministers were sworn in, including two leadership rivals who were appointed to key cabinet posts. Among these two, Labi Kousoulis is the new finance minister and the minister of the Department of Inclusive and Economic Growth, formerly the Business Department.

“With finance and business, Minister Kousoulis will be an important contact for the convenience industry,” says Mike Hammoud.

Patricia Arab, another important industry contact, stays on as minister of Service Nova Scotia.

As premier, Rankin will lead his governing majority party into the next election. Nova Scotia is the only province without fixed date elections, so will Rankin look to an early trip to the polls or let things settle out for a while?

There is little doubt that the Newfoundland and Labrador provincial election is in a mess and the chaos will almost most certainly lead to court challenges on a variety of issues. Now that all in-person voting has been cancelled with the remainder of the election being conducted through a special ballot/mail-in process, a general election originally scheduled for mid-February will not see results until some time past mid-March.

It’s hard to say at this point how the special election process along with the confusion, angst and anger among the electorate will affect the re-election chances of Premier Andrew Furey and his governing minority government.

The Prince Edward Island legislature re-opened on February 25. In a provincial update given a few days prior, Premier Dennis King indicated that his governing majority government will be focused on mental health and addictions services issues plus a plan to develop a PEI-based clean tech sector consisting of companies developing and marketing clean technology solutions.

At this point, there doesn’t appear to be anything on the government’s radar directly impacting the convenience industry.

Over in New Brunswick, the Higgs governing majority government looks set to re-open the legislature on March 25. The government has been working on changes to vaping legislation and regulations and it is likely that something will be introduced in the upcoming session.

New Brunswick currently has the least restrictive oversight of vaping among the Atlantic provinces and the question is whether they will go heavy-handed like Prince Edward Island and Nova Scotia with numerous bans, or lighter, like Newfoundland and Labrador, which introduced a vape tax last year. 

Mike Hammoud at the ACSA says that New Brunswick has been far more methodical in assessing the situation and have been far more open to discussion and input than what happened in both Prince Edward Island and Nova Scotia: “It’s hard to know which way the wind is blowing. We’ve been doing advocacy work simply to inform policy people and decision makers on options and we appreciate that they have been open to hearing from us.”

Retail gas margin review underway in New Brunswick

A New Brunswick retail gas margin review announced late last year is underway with the final stage, a virtual public hearing, scheduled for March 24.

At present, a Board Consultant is recommending a 0.5 cents per litre increase in the maximum retail margin based on a data sample showing a 7.6 percent increase in retail motor fuel operating costs between 2017 and 2019.

“We’re going to be pushing for a higher adjustment,” says David Knight from the ACSA, who is project lead for the review. “The data continues to under-represent what independent retailers are experiencing, particularly those with lower volume throughput. And no serious consideration has been given to the financial impact of COVID-19 on motor fuel retailers, so that needs to be addressed.”

In a surprise development in a wholesale margin review happening at the same time, the New Brunswick Energy and Utilities Board denied a motion by the Irving Oil wholesale businesses for an immediate interim increase in petroleum wholesale margins. The company has applied to the board to increase the wholesale motor fuel margin by 4.09 cents per litre and was asking for an immediate interim increase of 3.5 cents per litre until a full hearing in April and a board decision after that. 

Minimum wage changes on the way

Prince Edward Island’s minimum wage will increase by 1.2 percent to $13 per hour from $12.85 on April 1. On the same date, New Brunswick’s minimum wage will increase marginally to $11.75 per hour from $11.70.

“All-in-all the increases themselves in PEI and New Brunswick are nominal, especially compared to some of the huge increases we’ve been dealt in the past,” says Mike Hammoud at the ACSA. “Our challenge as convenience retailers is finding and retaining reliable staff and that’s pushing our wage costs well above any increase in the minimum wage.”

Things are different in Nova Scotia where the minimum wage will jump 3.2 percent or 40 cents to $12.95 per hour on April 1. And this follows a $1.00 per hour increase in 2020.

Over in Newfoundland and Labrador, the government will finish implementing minimum wage increases that will result in an increase of 11 percent or $1.25 from $11.40 per hour to $12.65 between April 1, 2020 and October 1, 2021. In 2021, a 25 cent increase goes into effect on April 1, with another 25 cent increase hitting on October 1.

Nova Scotia Utility and Review Board orders retail gas margin increase

Following a retail gas margin review, the Nova Scotia Utility and Review Board issued an order for a 0.3 cents per litre minimum and 0.4 cents per litre maximum increase in the retail gas margin. The decision was based on data showing a 10.1 percent increase in retail motor fuel operating costs between 2014 and 2015.

While the increases represent some $2.5 million in additional annual margin for the industry, some retailers were disappointed with the decision.

“A point-three cents per litre increase in margin doesn’t mean much to a lower volume or even mid-range retailer feeling financial stress, and there are a lot of them out there,” says David Knight who represented the ACSA, the Retail Gasoline Dealers Association of Nova Scotia, the Convenience Industry Council of Canada and the Canadian Independent Petroleum Marketers Association during the review.  

According to Knight there was compelling evidence presented that lower volume motor fuel retailers were seriously unprofitable, which raised questions about continuity of supply, particularly in rural areas. While the board would not act without specific evidence, the board’s Consumer Advocate was concerned enough that he made a specific recommendation that the board launch a review into the operating situation faced by lower volume retailers.

No details have been released yet on the board’s margin increase decision or what the board’s plans are for a lower volume retailer review.

ACSA continuing to push for expanded beer and wine retailing through PE convenience stores

When Prince Edward Island’s Conservative party came to power as a minority government back in April 2019, Premier Dennis King’s mandate letter in September to his newly appointed Finance minister included a directive to “[e]xpand the PEILCC retail program with a focus on local products to allow more consumer choice and implement a program to extend the availability of alcoholic beverages at private retailers.”

Work was being done on assessing options. And then COVID-19 struck, making 2020 a lost year. The directive is still in effect and the ACSA is in the process of re-engaging with PEILCC staff, government policy people and government decision makers to make the case for expanding beer and wine distribution through the Island’s convenience stores.

“This file goes back a long way and we just have to keep on pushing,” says ACSA president, Mike Hammoud. “We have the support of convenience retailers who have beverage alcohol agency licenses and we’ve gone back to see if our distribution model can be optimized any further because the distribution plan to multiple stores across the province seems to be a concern with the planners.”

At present there is no timeline from government on when a decision might be made about broader distribution. Hammoud thinks there might be some action later this year if COVID-19 concerns and restrictions ease.

Welcome 2021 ACSA partner members

Below are the new partner members that have joined the ACSA in 2021. To see a list of all our partners, click on the link below:

https://www.theacsa.ca/partners

Feel free to direct referrals our way and please reach out to connect with these great new member businesses that are now supporting your ACSA.

ADL (Amalgamated Dairies Ltd.)

Old Dutch Foods Ltd.

PepsiCo Foods Canada

Sobeys Wholesale

Spa Springs Mineral Water

For over ninety years, Ricola cough drops have been providing great tasting soothing relief, straight from the Swiss Alps. Not only are more and more Canadians falling in love with the brand, as evidenced by its strong growth of +40% over the last 4 years, but Ricola is also growing the entire shelf – contributing 46% of the category’s growth.* (Nielsen 52 Weeks Ending October 3rd, 2020). Bigger category. Bigger sales. More profit for you. Contact your local wholesaler today to order. If they do not have Ricola listed, please have them reach out to Jan.McCallum@ricola.com

Dates to Plan on

Newfoundland Golf Classic

September 16, 2021

Maritimes Golf Classic

September 23, 2021

Retail Convenience Awards

October 26, 2021

Atlantic Convenience Expo

October 26 – 27, 2021

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