In the upcoming weeks, Canadians will be making their way to the election polls. While most voters are concerned with common issues like health care, the environment, child care and retirement, there is another matter that deserves attention. Employing 2.2 million, the most Canadians of any sector, the retail industry impacts communities and is a large contributor to the Canadian economy. For businesses, retail workers, or frequent shoppers, October 19th might be a more important date than realized.
The Retail Council of Canada (RCC) has assembled a campaign and action plan of their own to approach political parties about the needs and wants of the retail sector. Among other things, included in the package are surveys, key issues, and ways for individuals to get involved. According to RCC, fundamental topics for retailers today include pension plans, taxes and trade, card acceptance charges, and implementing a retail sector strategy.
As Canada’s population continues to age putting a pension plan in place that does not affect existing company and/or government policies is ideal for retailers. The Ontario Retirement Pension Plan (ORPP) will be effective in two years and requires both employers and employees to contribute on a 50:50 level. Having both the Canadian Pension Plan (CPP) and the ORPP work in tandem is significant to retailers. The elected government needs to be able to smoothly make the transition and provide assistance when needed.
Second on the list of key issues is the matter of tariffs and trade. Annually there is four billion dollars of tax paid for goods. In 2013, Canada’s Economic Action Plan removed the tax applied to infant clothes, and sporting equipment, equaling over $75 million annually in tax relief. However, the motion to reclassify countries in the tariff system was enacted and officially took affect on January 1st, 2015. This means countries commonly outsourced to manufacture goods, are now ranked as a Most Favoured Nation (MFN). Products entering Canada from MFN’s will be given higher tariff rates and is expected to give the government a $333 million increase in annual tariff revenue. With MFN’s now in place retailers’ expenses have increased, and the RCC is asking the government to make another amendment to tariff reduction (similar to clothing and sporting goods). Along with lower prices on store shelves, another tariff reduction would keep Canadians shopping north of the border.
Retailer credit card fees are the third concern. In Europe, when customers pay with plastic retailers are responsible for fees of 0.2% for debit and 0.3% for credit, in comparison to Canada’s fee of almost 1.5% for credit. In this upcoming election, the RCC and Canadian retailers are wanting parties to acknowledge the drastic difference, and commit to changing the high Canadian fees to match European standards.
Having a strategy initiated for the retail sector is also crucial and made number four on the key issue list. As the retail industry changes and grows it is crucial to have a strategy that is adaptable. Based around job growth, reducing tariffs, regulating credit card fees, and promoting age-friendly workplaces for an older population are just some of the key ideas for a strategy framework.
As of 2014 the retail sector accumulated $350 billion in sales. Technology within the retail industry is expanding and will only cause sales to increase. Mobile shopping, e-commerce, big data and beacon technology are all integral to the future success of retail. The Canadian government should be able to accommodate the changing environment and help the industry grow strong and valuable. Although these issues seem irrelevant and unimportant to those not in the retail industry it affects each and everyone of us. On October 19th, make sure your voice is heard.