Why Ontario’s $20 Million a year Red Tape reduction could mean savings in store - Retail Council of Canada

Why Ontario’s $20 Million a year Red Tape reduction could mean savings in store

For a few years now, RCC has been pushing the Ontario Government to repeal substantial portions of the Upholstered and Stuffed Articles Regulation (USA). As members will know, RCC participated in in-person consultations with the Ministry of Government and Consumer Services (MGCS) over the years, have studied the impact through research by KPMG, and have directly lobbied the Minister responsible for the file.

On December 6, 2019, the Ontario Government will repeal the USA in its entirety. This means several things for retailers operating in Ontario:

  1. Registration

Businesses (some local and some based overseas) will no longer need to register under the USA Program, potentially saving $20-$400 annually. Based on the 2017 TSSA Annual Report, that will translate to an annual savings for business of just over $4 million each year.

  1. Labelling

Manufacturers will no longer need to customize and allocate products for the Ontario market, saving on labelling, inventorying, and segregating Ontario-bound products from the rest of the North America-bound merchandise. Ontario’s decision to repeal the USA will mean that product destined for sale in Ontario will no longer require the “New Material Only” label. Based on StatCan Data, as well as a report by KPMG on the USA, RCC estimates this will translate to an annual savings well over $16 million a year.

  1. Compliance

Local retailers will benefit from lower internal compliance costs, due to not having to undergo inspections and product labelling adjustments. Based on a KPMG report on the USA, there were annually about 1300 inspections, with just over 19,000 inspection orders issued each year. With the removal of this regulation, TSSA inspections related to USA will no longer occur.

  1. Product Listings

As a result of the repeal of the USA, there will no longer be product listing requirements for business. This clears up a long-held concern by retailers that product categories are vague and that they are not always clear whether or where a product falls under the product list.

  1. General

RCC has long argued that the additional regulatory burden caused by the USA created an unequal landscape between “brick and mortar” and pure online retailers. The repeal of the USA would equalize that landscape, as both would be subjected to identical enforcement requirements (or lack thereof in this case).

Now that we’ve seen movement on Ontario’s USA, RCC will turn its attention to Manitoba. There are only two jurisdictions in Canada that have an equivalent to the USA still on the books (Québec and Manitoba). RCC has already had some fruitful conversations with Manitoba’s consumer protection branch. It is RCC’s belief that they are likely to follow Ontario’s lead on the issue, during their anticipated 2019 review of the Bedding and Other Upholstered or Stuffed Articles Regulation.

In conclusion, RCC applauds the repeal of the Upholstery and Stuffed Articles Regulation. Ontario made a commitment that it is Open for Business – this decision demonstrates this Government’s commitment to removing regulatory burden from Ontario businesses.

RCC estimates that by repealing this regulatory red tape, the Ontario Government will save businesses over $20 million dollars a year. That’s money that previously was either absorbed by business or passed along to customers.

Please feel free to contact Karl Littler, Senior Vice President, Public Affairs at (416) 467-3783 or by email at: klittler@retailcouncil.org if you’d like more information related to this or on any related matter.