2011.14 | Expanding Retail Business in Canada: Technical Considerations

One of the signs I’ve seen of late of an improving retail sector is expansion.  I’ve had discussions with a few colleagues on clients expanding into Canada from other countries or expanding into other provinces.  Here is a list of the most common considerations for technology when expanding into or around Canada.

Taxes – Like many other jurisdictions in the world, Canada has tax rates and types that vary by province.  Some provinces charge separate Provincial Sales Tax (PST) and Canadian Federal Sales Tax (also known as the Goods and Sales Tax or GST).  Others charge a Harmonized Sales Tax (HST).

Electrical Power – For businesses coming from Europe or Asia, the power in Canada is 120V, 60Hz, and NEMA 5 connectors are used.  Ensure that retail POS and other solutions have the correct power supplies and power cords to connect to power in Canada.  If  UPS devices are used for power protection or backup, be certain to purchase units that operate with Canadian voltages and connectors.  The same power and connector standards are used in the US and Canada.

Price Verification – Requirements for Price Verification vary by jurisdiction in Canada.  In Quebec, having electronic price verifiers in stores is a legal requirement unless there are prices shown on every item in a store.  In the rest of Canada, the Scanner Price Accuracy Voluntary Code is a voluntary pricing code of conduct that retailers who are members of the Retail Council of Canada, Canadian Association of Chain Drug Stores, and Canadian Federation of Independent Grocers adhere with – covering off a very large percentage of Canadian retailers by sales.   I’ve noted in various online forums over the years that consumers across Canada have voiced concerns about store staff’s knowledge of the voluntary code, causing some consternation among consumers, so retailers would do well to be sure store staff are aware of the rules and act on them to ensure strong consumer relations.

Weighable Items –  Weigh scales in grocery need to be certified as legal for trade by Measurements Canada under the Weights and Measures Act via an Authorized Service Provider.   Note that Canada uses the metric system, and the scales must be calibrated in kilograms.  A remote post display is required for use in Canada, even if the weight is displayed on a user screen like those on a Self-Checkout.

Language – Canada is officially a bilingual country, but is increasingly multi-lingual given many years of strong immigration- particularly in the city centres.  Retailers should expect to provide customer facing systems in both French and English, particularly in Quebec, and should have a good understanding of French in Canada.  This means that all consumer facing solutions, such as kiosks, selfcheckout systems, customer facing displays and receipts require multi-language capability.  Under Bill 101 it may also be necessary to provide back end solutions used by staff in store in French.  Some retailers also use French versions of Windows and other operating environments.  Note that not all POS versions of Windows 7 embedded provide for Multi-Language capability so Windows 7 Ultimate or Windows 7 Pro may be required for a French Windows 7 Image.   Recent years have seen increases of requests for other languages on kiosks, ATM’s, and self-checkouts across Canada in my experience – primarily for Asian languages.  Retailers serving urban populations with technology that has the capability to serve multiple languages may find themselves with a competitive advantage.

Electronic Payments – All pinpads to be used in Canada must be certified by Interac, Canada’s electronic payments Association.  All pinpads to be used in Canada should be EMV certified and capable.  As in the US, PCI compliance is also required.  Some of the most common pinpads used in Canada by Tier One retailers in Canada include the Ingenico i3070, Verifone Vx810, and Verifone SC5000, though there are many others in use.  Many Canadian retailers have also enabled NFC payment acceptance on their pinpads over the past few years as part of the effort to move to EMV and PCI compliance.  Canada has a high rate of electronic payment penetration, with many tier one retailers I’ve spoken with indicating that as much as 70-80% of tenders are either debit or credit.  Use of cheques in Canada is very limited.  Less than 1% of tenders are cheques for most retailers I’ve spoken with, and it is 0 for many.

Cash Management – Primary currency in use in Canada is the Canadian Dollar.  The most common denominiations are the $20, $10, and $5 note.  $50 and $100 notes are also available, but used less often, and some smaller retailers refuse to accept them for fear of forgery.   Coinage includes $2 (toonie), $1 (loonie), 25 cent, 10 cent, 5 cent and 1 cent.  50 cent coins exist but are in limited use.  There are various forgery safeguards on Canadian currency to protect against forgery, and Canadian notes are changing to a polymer base in 2011/2012.  Canadian retailers often use a 4 Note , 8 coin slot cash insert for cash drawers, versus the 5 note, 5 coin slot cash insert used in the US.  The use of differing coins and notes also means that cash handling solutions like self-checkouts, cash recycling , and fraud detection systems will differ to accommodate the different notes and coins.  The lack of $1 bills means far less bill usage on cash handling systems than the US.

On a more localized level:

Sales Recording Module for Restaurants – Quebec – Revenu Quebec has implemented requirements for retailers to record all sales transactions through the use of a Sales Recording Module installed between the POS and the printer.

Reusable Bags and Plastic Bag Fees – In the City of Toronto, there is a bylaw which requires a charge of 5 cents for plastic bags and others have followed suit.  Many Canadian retailers have adopted a charge across the country to drive down usage of plastic bags.  Whether as a result of this charge or not, there is a significant use of reusable bags by Canadian shoppers.  For the bag fees, retailers need to be able to add the fee and to both assisted and selfcheckout solutions – a relatively simple matter.  For reusable bags, self-checkout systems need to be enabled, and staff need to be trained to assist customers in understanding the process of using their own bags with self-checkout.

This is by no means an exahaustive list and is provided based on my experiences to date.  It is intended for informational purposes only and ideally is helpful in providing a view to the types of technical hurdles that may exist for those who plan to expand into or across Canada.  If there is any facet of technology that I have overlooked in consumer facing stores, or if I have made an incorrect statement please leave a comment, and I will be glad to adjust the article.

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