Over-Regulation

Federal, provincial and municipal governments are under increasing pressure to impose regulations on the sales of many products and services sold in convenience stores – significantly impacting all industry partners: retailers, manufacturers and distributors alike.

Today, convenience stores are not only expected to be the government’s tax collectors, but they are also expected to play a role as de facto national guardians of morality as the primary vendors of so-called “sin” products, such as alcohol, lottery, tobacco, gasoline, and now fast food.

Convenience stores and the products and services they provide are being watched. Heavy regulation and, in many cases, accompanying fines and penalties, are becoming so problematic that they threaten the continued survival of the industry. CCSA research suggests that the cost to comply with regulation of convenience stores in this country is more than $225 million per year. To put that number into perspective, that would represent the equivalent of almost 25% of the collective profit posted by the entire convenience store industry. And that does not take into account fines and penalties for failure to comply. For instance, forgetting to determine whether a 25-year-old-looking person is in fact 18 (or 19 depending on the province) when he or she asks for a lottery ticket can cost a convenience store operator their licence to sell such products which would threaten the success of the business.

Economists know very well that when rules and regulations become too restrictive, people find creative ways around them. This is why contraband tobacco is still a huge issue, costing convenience store owners more than $2.5 billion in lost sales every year. The new threat in this area is contraband gasoline (gasoline sold without full taxation) retailed on reserves in Canada. Meanwhile new regulation is being considered for introduction in the food and beverage sectors which will further impact legitimate industry sales.

The convenience store industry is at a crossroads. Pressure stemming from ever-increasing regulation has been suffocating the industry slowly but surely over the past decade to the point where the convenience store industry can no longer sit idly by and accept the situation.

“For us to be effective in our government relations efforts on over-regulation we needed to have concrete information to provide government,” Alex Scholten, President of the CCSA said. “It’s not good enough to simply state that we’re being over-regulated, we had to do something about it.”

In order to address this, last year the CCSA conducted research on the number of every provincial and federal law that directly impacts the c-store industry. The research revealed that over 513 laws or regulations have a direct impact on our operations. This year, in addition to the federal and provincial tabulation the CCSA will also be reviewing the laws being introduced at the municipal level.
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