Good morning and thank you, committee members, for giving me the opportunity present on behalf of the Canadian Convenience Stores Association. My name is Alex Scholten, and I'm president of the association.
The Canadian Convenience Stores Association is a trade organization that represents over 26,000 convenience stores operating in Canada that employ over 230,000 people from coast to coast to coast. Many of these stores may be small businesses, but together we contribute significantly to Canada's economy and serve at the centre of many communities. To give you an idea of our economic footprint, Canadians purchased over $51 billion in goods and services from members of our industry last year alone. These sales resulted in over $18 billion in taxes collected for both the federal and provincial governments. We're also significant employers to new Canadians, providing newcomer entrepreneurs an opportunity to own and operate their own small business.
When I presented to this committee during the pre-budget period, I highlighted two priority areas for our association that fall under the purview of the Minister of Finance. The first was the impact of excessive merchant credit card fees and the second was the persistence of illegal untaxed tobacco that is sold throughout Canada. These are two very important issues for our retail members.
Lower credit card merchant fees will have a positive impact on small businesses, allowing them to employ more people and make capital improvements in their businesses. It also offers a potential benefit for consumers, as it will allow these businesses to offer more competitive pricing. Conversely, the persistence of illegal tobacco in Canada undermines the work of our law-abiding retailers who sell legal tobacco in a controlled, regulated manner to consumers who are of age. We are government's partner in the controlled and regulated sale of these products.
We're very pleased to see mention of both of these issues in the report tabled by this committee ahead of the budget, and we would like to thank committee members for their attention to our issues during these consultations. Admittedly, we were disappointed that there was no mention of these measures to fight illegal tobacco or cap merchant credit card fees included in the 2016 budget.
As Canada's tobacco landscape continues to change, addressing contraband and counterfeit tobacco products is critically important for our law-abiding retailers, for governments that benefit from the taxes on these products, and for Canadians in general because the contraband and counterfeit markets support organized crime and undermine Canada's tobacco control strategies. In the face of additional proposed changes to tobacco regulation, including flavour restrictions as well as plain packaging, more must be done to address the already robust illegal tobacco industry operating in Canada.
It is very important that members of this committee understand the impact that changes to these regulations will have for our retailers, for government tax revenue, and for the safety and security of Canadians in general. For example, our association is aware of several illegal tobacco outlets operating in Canada that are retailing at least 30 different types of menthol tobacco products that are now restricted in many provinces. These products are sold without required taxes and are non-compliant with Health Canada regulations. The variety available is actually far greater than the amount of legal, taxed menthol tobacco products available for customers in our stores across the country.
As the government considers banning menthol tobacco products in Canada, it is important to draw attention to the lack of resources present to fight Canada's robust illegal tobacco trade. Banning these products for our retailers will not remove them from the store shelves of illegal retailers. This, ultimately, undermines the intention of the ban to begin with. We are hopeful that situations like this will be taken into account in future budgets.
Since the tabling of the budget, there has been productive movement on the issue of credit card merchant fees. It is no secret that merchant credit card fees in Canada are amongst the highest in the world and have risen sharply over the past number of years. As committee members may be aware, there is presently a private member's bill before the House of Commons that proposes to lower or cap merchant credit card fees.
The Small Business Matters Coalition—a group of 24 business trade associations, including the Canadian Convenience Stores Association, which represents in excess of 98,000 small businesses operating in Canada—is supportive of this bill.
We're hopeful that members of this committee will consider lending their support to this bill once it comes up for a vote in the House.
As a final note, I'd like to draw attention to the commitment made to lower the small business tax rate to 9%, which is slated for budget 2017. This is a measure that Canada's convenience stores would greatly benefit from. Having lower business taxes would free up revenue for our stores to invest in improving their business, training employees, and offering the best possible service to customers. We look forward to seeing this change made as part of the next federal budget.
We appreciate the opportunity to present to this committee and look forward to continuing to work with you on behalf of small businesses in Canada.
I'll gladly take any questions from the committee members.
Thank you.