Episode 15: Payroll in Canada

Luisa Rollenhagen (00:07):

Hello, and welcome to another episode of Payroll Around the World! I’m your host, Luisa Rollenhagen.

Payroll Around the World is your all-inclusive guide to understanding how payroll operates across different countries. Each episode spotlights a specific country and features interviews with ADP experts on the ground, as well as locals who share their perspectives on work and pay in their homeland.
After all, payroll can’t truly be global if it isn’t local as well.

Today, we’re heading to Canada. The North American nation is often seen as a business-friendly, politically stable, and economically strong country, with some unique complexities. With 10 provinces and 3 territories, it’s a country where payroll isn’t just federal; it’s highly regional. 

Elvira Ciambella (01:02):

In Canada, the interesting complexity that we have is how the federal and provincial regulations are intertwined together from a payroll perspective.

Luisa Rollenhagen (01:14):

Canada’s history of immigration has also shaped its labor force. According to the 2021 Canadian Census, 23% of Canada’s population is foreign-born. This is the biggest percentage among G7 countries, and one of Canada’s strongest economic assets.

Jim Lord (01:32):

The diversity of the talent pool and the multicultural essence of what is Canada is super impressive.
Luisa Rollenhagen (01:40): In a country as geographically vast and culturally varied as Canada, moving between provinces for work is very common. And just as the inter-provincial payroll regulations can get quite complicated, so can the cultural and logistical changes that occur for employees who move to Quebec for work, especially when it comes to things like taxes.

Luisa Rollenhagen (01:40):

In a country as geographically vast and culturally varied as Canada, moving between provinces for work is very common. And just as the inter-provincial payroll regulations can get quite complicated, so can the cultural and logistical changes that occur for employees who move to Quebec for work, especially when it comes to things like taxes.  

Keven (02:00): 

In my case, one thing that I wished I had known is that you need to pay the Quebec tax rate on your income for the entire year, regardless of when you established your residency in Quebec. 

Luisa Rollenhagen (02:15):

Canada offers many opportunities for multinational companies looking to tap into the country’s educated workforce, but the payroll and regulatory challenges should not be underestimated. In order to help us understand how to navigate this landscape, we’ve invited ADP experts Elvira and Jim to break it down for us. 

Elvira Ciambella (02:15): 

Hi, I’m Elvira Ciambella, Vice President of Business Innovation Transformation and Shared Services here at ADP. And I’ve been here for over 30 years. And interesting fact, I live and work out of our Quebec office. Not only are we one of the largest payroll providers in Quebec, we’re also a very large employer with 600 associates in our Quebec office. 

Jim Lord (02:59): 

I’m Jim Lord, I am the president of ADP Canada. I’ve been with the company, I’ve been with ADP for, I’m in my 30th year. I moved to Toronto from the United States about 18 months ago and have very much enjoyed being a part of this large organization. We have about 3000 employees across Canada from coast to coast, servicing more than 50,000 clients across the Canadian landscape, paying just about one in five employed Canadians across the country. And proud to say we’ve actually been in Canada for about 46 years, actually starting in Montreal where Elvira works. 

Luisa Rollenhagen (03:32):

Thank you so much for joining us today. I’d like to start us off by taking a look at Canada’s economy and labor market. What can you tell me about that? 

Jim Lord (03:41): 

I would say in one sentence it’s strong and resilient, but certainly evolving. We’ve got a strong foundation with the geopolitical alliances, the G7 countries across the world. Terrific natural resources here in Canada. Obviously, very close proximity to the United States, and frankly, we’ve got a really highly educated workforce. About 57% of adults between 25 and 64 have a university degree. But while the economy is certainly strong, it does need to evolve specifically in a couple of areas. We’ve got productivity challenges in Canada, innovation and competition challenges, and then there’s some interprovincial collaboration that we’re starting to make some headway on. I think all three are linked, but if I zone in on one, I would pick on productivity. And for example, about 40 years ago we were roughly, Canada was about 88% of the US’s productivity measured by output per hour worked per employee. 

And if you fast forward to today, we’re roughly at only about 77%. So there’s really some opportunity, I think, for Canada to really change that, getting more out of our highly educated workforce by really giving them the tools and some of the technologies that they need to be more successful. And thankfully, I think that’s really starting to happen.

Elvira Ciambella (04:52): 

What I would like to add is around the payroll landscape in Canada, especially if we compare it to the US. In Canada, the interesting complexity that we have is how the federal and provincial regulations are intertwined together from a payroll perspective.  

So from a federal perspective, you have the employment insurance and the Canada pension plan that are the same in every province, with the exception of Quebec. And then you have the provincial requirements that will determine employment laws; things like minimum wage differ from one province to another. Overtime, vacational earnings, those are all under the provincial jurisdiction. So from a payroll perspective, you have to take both into account when you’re managing payroll in Canada. 

Luisa Rollenhagen (05:44):

I can imagine that juggling federal and provincial laws can get complex pretty quickly. That’s something we’ll explore further in just a bit, but I want to stay on the topic of Canada’s workforce for now.  

Is there a big union presence in Canada? 

Jim Lord (05:58): 

About 30% of the workforce is unionized here in Canada. So as you can imagine, we definitely run into this one quite often, where employers are often challenged by the complex negotiations and obligations of the collective bargaining agreements. 

There was a client telling me they have over a hundred collective bargaining agreements that they’re challenged with each year, and they’re an ADP client. And it was just amazing, the complexity of what that must mean for those kinds of particular businesses. So ADP definitely helps by making sure that the time and the payroll are established and tested for accuracy. As those collective bargaining agreements change, we partner with our clients to test the updates that we make to our systems to make sure the integrity and the accuracy are there, so that they don’t run into issues. 

Luisa Rollenhagen (06:43):

Over one hundred collective bargaining agreements? That sounds very difficult and tricky to navigate. 

Elvira Ciambella (06:50): 

And managing those collective bargaining agreements and bringing them to life within the payroll is very complicated for employers. Not only the calculation of the wages and the hourly rates and the different hours spent in different employee classes, it starts at the point of hiring, recruiting for the right level of skill, especially in trades that require a minimum number of hours to be worked, et cetera. And then it follows through from hiring to the payroll accuracy, whether it’s the wages and the number of hours that are worked, and the calculation of the union dues and the remittance of the union dues. There are some industries in Canada that, if the union dues are not paid, the unions can shut down work sites. I’m sure it’s similar to other provinces or other states. In Quebec, the construction industry is highly unionized, and it does happen where errors on payroll in a construction company could cause an entire work site to be shut down. So it is definitely complex, and it trickles down to employee benefits and retirement pension. So it’s a very, very complex, but also impacts every single aspect of the employee’s life from the point of hire to the point of retire. 

Luisa Rollenhagen (08:25):

Okay, that’s really good to know. So, Jim, you mentioned that you moved to Canada from the US a little while ago. What are some aspects of working life in Canada that perhaps surprised you? 

Jim Lord (08:37): 

I don’t know if it’s a surprise more than impressed. I think if you think about Canada and what I observed when I moved here, very strong and very diverse talent pool, right? 

And so the diversity of the talent pool and the multicultural essence of what is Canada is super impressive. I believe I read a stat that just in Toronto, there are over 180 languages that could be spoken at any given time. Just to give you an idea of the breadth of what the diversity looks like. We haven’t talked about it, but the costs are generally about 30% less than what you would see in other parts of North America, right? 

So as an employer, super advantageous, you want to build a tech hub. I’ve seen this where in Toronto, a multinational company that may be headquartered somewhere else in the world chooses Canada because you can get really, really strong talent for 30% less than you might be able to get that talent somewhere else. So I think there’s a lot of benefits there. Obviously close proximity to the US. So in terms of whether it’s travel or trade, the political stability that I think Canada is known for. So there is a lot of stability in the political landscape across Canada, which I think is really attractive for big customers or for big businesses. By the way, across North America, Canada is the second-largest financial services industry. I think we’re the third largest tech sector industry and the second largest in food and beverage across North America. So it’s not small in terms of market size and opportunity if you’re a business looking to expand into Canada. 

Elvira Ciambella (10:02): 

I’ll add something that’s a little bit closer to home, which is Quebec. I think we’re very, anybody that has visited this province will make a direct link to the most European city in North America. And I think that also is reflected in the social programs that exist here and the certain joie de vivre. So in a province like Quebec, there’s a lot of emphasis on employee benefits and the work-life balance and things like vacation. So it’s one of those differences that exists in Canada that I’m sure there are other pockets of the country that are similar, but that’s a little something special for Quebec. 

Luisa Rollenhagen (10:46):

So we’ve been hearing Quebec come up quite a bit so far. What makes Quebec so unique among the Canadian provinces? 

Jim Lord (10:53): 

I think one of the big ones that I hear, and certainly having come up from the United States for this opportunity, is the language. And so Elvira could take a deeper dive on this, but in Quebec, there is a law that requires French first, but Quebec makes up about 20% of the Canadian economy. And so we think about it in relative terms, this would be like the state of California in the United States makes up about 20% of the US economy, so it’s significant. And so I think doing business in Canada and doing it well or doing it correctly, you really want to make sure that you’re accommodating your clients, your employees, whatever you may have as you’re crossing provincial borders and doing work in Quebec, not unlike we see automobiles in the United States that are all California emissions compliant because that is where the strictest automobile emissions regulations are of the 50 states in the United States. 

Luisa Rollenhagen (11:40):

I can imagine that the language certainly presents challenges for multinationals who may be expecting English but simultaneously want to explore one of Canada’s most economically promising provinces.  

Elvira Ciambella (11:51): 

So the French is really of course an element of distinction. There are also different privacy laws, and we lovingly refer to it as PIPEDA. It’s protecting the employee’s personal data, and that was something that employers in Canada had to adjust very quickly to when it was passed. And luckily, systems, especially systems like ADP that contain the payroll, DHR, the benefits, information for employees, are compliant and they enable our customers to adhere to the privacy laws in Canada.  

Not only do we provide systems that are compliant to our clients, but as an employer we are compliant vis-a-vis our associates. So doing things in French and doing them properly is top of mind and is definitely one of our values in Quebec. 

Luisa Rollenhagen (12:51):

And since we’re on the topic: What makes Quebec stand out from other provinces, apart from the language? 

Elvira Ciambella (12:57): 

So the payroll deductions are different. So for example, employer paid health benefits are a taxable benefit in Quebec. They’re not a taxable benefit anywhere else in Canada. So that is one example of how the gross to net calculation is different in Quebec. Then you’ve got the two different levels of government for which you have to complete an income tax return. So in Quebec, you have two different income tax returns that you complete at the end of the year, the federal that you attach your T4 to, and then you have the provincial income tax return with your one. So it adds complexity not just for the employee but also the employer. And then of course there’s the French language. So if you live and work in Quebec, it is very common to be using both languages in one sentence. Other than that, we also have a different legislation that protect the use of the French language Bill 96 is probably the most famous piece of legislation that requires specific interactions between employees and employers to be completed in French. Things like job posting, offer letters, any meetings or training documentation that’s provided to employees, these all need to be in French. So those are some of the complexities of doing business in Quebec. 

Jim Lord (14:31): 

If I could layer on though, I would say at a broad 30,000 foot level, it doesn’t matter if you’re in the US or if you’re in Canada or anywhere else in the world for that matter, I would say it doesn’t matter if you’re a small, medium or large or enterprise level business, the regulatory environment is constantly changing. So Elvira and I have both been with ADP for 30 plus years, like we mentioned, and I’ve never seen a year where it’s been easy for businesses to get their work done anywhere. And so I think it’s a place where you’re always going to want to make sure you’ve got a trusted advisor, whether that’s your CPA tax attorney, a payroll vendor, and partner like ADP, because there’s always something. 

And so while Quebec stands out in Canada, I would just say this I think is a natural phenomenon we see in the payroll industry really kind of worldwide. 

Elvira Ciambella (15:15): 

And the one interesting approach that we take here is if it can work in Quebec, it certainly will work for the rest of the country. So it’s that level of complexity as we embed new products and new processes within ADP, that is our benchmark. 

Luisa Rollenhagen (15:31):

Interesting, so because of its complexity, Quebec often serves as the benchmark for the compliance standards multinational companies adopt across Canada. 

And how common is it for companies to have employees spread out across multiple provinces? 

Elvira Ciambella (15:47): 

Especially in the multinational space, that is a very common occurrence. And the interesting part is not only do we have a presence in many provinces in Canada, ADP also has the systems to be able to support the different provinces and the mobility of the employees from one province to another. And it does create complexity for employers where if say, for example, you have an employee who is moving from Ontario to Quebec, and part of the year was in Ontario, the other part was in Quebec, there are specific tax requirements. There are CPP/QPP, Canada Pension Plan, and Quebec Pension Plan requirements. And fun fact, you have to restart repaying your pension plan despite what you’ve paid elsewhere in the same year. That would be a perfect example. If I were a multinational organization opening in Canada, I would definitely provide taxation support for my employees at least in their first year of operation because it tends to be quite complex when you have movement of employees from one province to another. 

Luisa Rollenhagen (17:09):

So the pension plan doesn’t roll over, or there’s no way to merge the Canadian Pension Plan with the Quebec Pension Plan? 

Elvira Ciambella (17:16): 

Exactly. So you start paying from scratch. So, regardless of what you’ve paid that calendar year, you will start paying the Quebec Pension Plan. And even if you’ve exceeded the maximum, there is an annual maximum. If you’ve exceeded it, you continue to pay until you’ve reached the maximum for Quebec. Now, there will be an adjustment when the employee completes an income tax return, but it is not, it’s not clear-cut where you just stop paying once you’ve reached the maximum on your pay stub in the Canada Pension Plan. 

Luisa Rollenhagen (17:51):

Quebec isn’t just unique in its complexity, though. It’s also an economic powerhouse and invests significantly in research and development and post-secondary education, with world-class universities like McGill and Université de Montréal. As such, it’s no wonder that many people across Canada move to Quebec for work opportunities. But employees who take on this cross-province move must contend with some bureaucratic complexities we’ve just heard Elvira and Jim talk about. 

In this series, we also highlight the voices of local employees on the ground in order to hear their perspectives on work and pay. That’s why we reached out to Keven, a computer science consultant for a software developer who recently moved to Montréal from Mississauga, Ontario. We wanted to know what motivated his move and what challenges he encountered when he relocated to Canada’s second-most populous province. 

Keven (18:47): 

My name is Keven. I am originally from Mississauga, Ontario. I work in software and I’m currently located in Montreal, Quebec. 

I went to Wilfrid Laurier University and had a lot of friends from high school who ended up in universities in Quebec, some at McGill, some at Universite de Montreal, some in other places. I went to a French high school in Ontario as well. So the jump wasn’t too crazy. And during my time in university, I really enjoyed visiting my friends out here who decided to pursue their post-secondary education here. So really it was just a matter of the opportunity presenting itself and me just kind of going, applying out there and finding a role that suited me and making the move. 

Luisa Rollenhagen (19:32):

Keven was particularly attracted to the social, easy-going way of life that he witnessed in Montreal. 

Keven (19:38): 

Whenever I would visit, a lot of my friends were involved in a lot of different sports groups, different book clubs, different things. At all times. I felt that there was a very closer knit sense of community than the GTA or Toronto proper. And it was just easier to find those smaller groups. I think also there was a bit of a slower pace of life, so I would come out and visit, granted visiting is not living, but I would be here for maybe a couple of weeks at a time and got a sense of at least a little window into how people lived and really enjoyed seeing that sense of community. 

Luisa Rollenhagen (20:15):

Keven noticed this kind of joie de vivre, which Elvira had mentioned earlier, in professional settings as well. 

Keven (20:21): 

In terms of day-to-day interaction on how companies sort of operate or what the culture is like in Toronto based companies versus Montreal, the biggest thing I noticed personally is just the sort of after work culture. 

So there is a lot more, I think here personally from what I’ve experienced, just kind of like after work sort of culture where we can all turn off, hang out, go to a bar, go to a park, there’s just a bit more of a post-work hangout culture here is what I’m noticing. 

Luisa Rollenhagen (20:56):

It also didn’t hurt that the cost of living was significantly lower in Montreal than it was in Mississauga, which is in the Greater Toronto Area. 

Keven (21:04): 

So I would say that the biggest difference cost of living wise or if we’re going to compare both for somebody who’s considering making the move between Ontario and Quebec, the biggest one is rent or just housing in general. Whether you’re looking to enter the market as a buyer or you’re looking to rent, it is a lot cheaper on average.  

Luisa Rollenhagen (21:27):

Despite knowing some French, Keven points out that the language barrier is definitely one of the biggest differentiators between Quebec and other provinces, particularly in a professional setting. 

Keven (21:38) 

One of the biggest differences actually in the first couple of months, now that I think on it a little bit more, is just the culture of speaking French in the workplace. Internal communications happening in French. Obviously I’m coming from Ontario and most of your internal communications are in English. 

But here, there is a culture of French first. So even if I’m dealing with a client who, for example, there is one person who’s speaking in English, if that person is in the meeting automatically we will switch over. But for the most part, when it comes to internal communications, when it comes to office life, greeting people first thing in the morning, it’s French first always. 

Luisa Rollenhagen (22:18):

He does point out that Montreal is a very cosmopolitan city where English speakers can also get by, but that the situation can sometimes be a little different in the rest of Quebec. 

Keven (22:28): 

Something that I want to preface that’s really cool about Quebec is, or Montreal, at least from my opinion, is that even for people in my surroundings who maybe aren’t professionally proficient in French or really not great in French, it is a liveable city. It is somewhere where you’re going to feel welcome no matter what. It’s somewhere where you can switch between the two very easily and you really won’t get a side eye in Montreal.  

But once you go into places like Quebec City or more rural regions of Quebec, at the end of the day, the official provincial language here is French and most people exclusively speak French. So just in terms of your day-to-day activity, it will become more difficult to encounter people who can understand you as well. And in terms of professional capacity, it will factor into the opportunities you’re presented because they are looking to whatever industry serve and cater to people that speak that language. 

Luisa Rollenhagen (23:31):

However, one of the biggest challenges for Keven was adjusting to Quebec’s separate taxation and social security system. 

Keven (23:39): 

I was prepared for this sort of higher provincial tax rate that is in Quebec versus Ontario. And I was kind of prepared as well for the local purchase sort of tax rate, which totals to about 15% versus 13% in Ontario if I’m not mistaken. 

But one thing that sort of caught me off guard was as soon as I filed for the first time in Quebec, so tax season comes around, it’s around March-ish and you’re filing for the previous year one, you have to file with two different agencies. So I was used to filing with CRA, which would handle both my federal filing and my provincial, sorry, CRA being Canada Revenue Agency, the federal agency. And so I would file my taxes with CRA as a full-time salaried employee and everything was simple, file a T4, all good provincially and federally. But when I came to Quebec, they have, they follow CRA, so it is a federal agency, so you do have to file with Canada Revenue Agency, but you also have to file with Revenue Quebec, which is their provincial revenue agency. 

Luisa Rollenhagen (24:56):

His advice to anyone making the move to Quebec? Be prepared for the higher tax rates of Revenue Quebec, including the fact that you’ll need to pay for the entire year you moved.  

Keven (24:56): 

If you’re making a similar move to me, moving to Quebec and having to file your taxes that first year, number one thing to keep in mind is to either put a little bit of money aside for that tax return. Depending on your bracket, you might owe a little bit more than you thought you would for revenue Quebec, or try to reduce your income via RRSP or I think FHSA now is also something that can be claimed on your tax return to help reduce your income and reduce the amount owing to either the provincial or federal entities. So in my case, one thing that I wished I had known is that you need to pay the Quebec tax rate on your income for the entire year, regardless of when you established your residency in Quebec. 

So in my case, I moved in September, I had worked about four months in Ontario prior to this. I moved here and found out that on the income that I had earned in Ontario, I had to pay on top of what I had already paid and was deducted automatically for my salary in Ontario. I had to turn around and give some money to revenue Quebec because I owed them for that income. 

Luisa Rollenhagen (26:14):

I wanted to know more about how Quebec’s uniqueness affected processes like social security contributions, so I went back to Elvira and Jim to learn more. 

Elvira Ciambella (26:23): 

So from a federal perspective, obviously, there’s the income tax, there’s employment insurance that is job loss. It will help sustain a certain period of time of revenue. And then there’s the Canada Pension Plan. So both employment insurance and the Canada Pension Plan have an employee and an employer contribution in Quebec. The Canada pension plan was replaced by the Quebec pension plan, so generally it’s the same concept. The exception is that it’s managed by the province of Quebec, and some of the rates are different. In addition to that, there are provincial contributions that the employer needs to cover things like employer health tax, so this is, it’s a payroll health tax. It’s deducted within the payroll, and we have different interprovincial education taxes that are covered within the employer health tax, as well as healthcare and post-secondary education. So portions of the employer health tax are diverted into healthcare and post-secondary education. 

Jim Lord (27:38): 

A company like us, like ADP, we’ve got a really large agency relations team that pay attention to all of these inner workings of labor laws and taxation rules across the country. And we’re also blessed to have local attorneys, so not just here in Toronto where I sit, but also in Quebec. And so we’ve got, I think the right people in the right place that help pay attention because like we mentioned earlier, this is really an ever-changing landscape where there’s constantly puts and takes that are happening from a regulatory environment and then being able to stay on top of those is one of the ways that ADP continues to really provide value for our customers. 

Luisa Rollenhagen (28:15):

That’s good to know.  

Jim, at the beginning of the episode, you briefly alluded to some inter-provincial cooperations that were being pushed forward. I believe you were referring to attempts to remove some inter-provincial trade barriers. These are longstanding issues in Canada, which may come as a surprise in a country that’s often seen as a single, unified market. 

So how do these barriers create complexity, and what’s the focus on removing them? 

Jim Lord (28:42): 

I learned back in December that you could actually get a bottle of California wine cheaper in Ontario than you could get a bottle of wine from Nova Scotia because the provinces had intra-province tariffs that they were charging each other.  

You start to kind of look in the mirror first instead of looking externally and say, Hey, what can we do to become more competitive across the world stage? Removing some of those barriers was obviously top of mind. 

It’s pretty exciting to see Canadian leaders from a government perspective and also on the business side looking for ways to tear down some of those intra-Canada, I’ll just say, roadblocks or friction that they were creating so that Canada can come together more united and be more competitive on the world stage. 

And by the way, it’s not just tariffs. There’s also, if you think of Department of Transportation laws, there were tractor-trailer trucks leaving one province and driving into another. The tire pressure had to be one thing in one province and one thing in another. There was complexity across all different aspects of business that I think the businesses in Canada have been challenged with for a very long time, that we’re starting to see unwind so that businesses can become more competitive, obviously in Canada first and then on the world stage. So I think there’s still work to do for sure. 

Elvira Ciambella (29:56): 

I’d love to double-click on that from an industry perspective, in the payroll industry in Canada. So I’m a member, I’m a board member for the National Payroll Institute, and this discussion around interprovincial tariffs has also caused the industry to look at, what are the different payroll requirements across the provinces that can be streamlined. And there’s a lot of work being done currently in the individual provinces as well as a think tank that is being spun up by the National Payroll Institute to reduce the administrative burden on employers in Canada. I think it’s a downstream impact of opening up the interprovincial tariffs. Now we’re starting to look at, what are the different provinces asking employers in Canada to do and does it make sense to streamline that? 

Luisa Rollenhagen (30:49):

That’s really interesting, and thank you for also bringing a payroll perspective into this. Removing those kinds of barriers is beneficial on so many levels. 

Going back to varying regulations among provinces, I remember reading that employer reporting requirements can vary widely as well. British Columbia, for example, has pay transparency laws that directly affect payroll, right? 

Elvira Ciambella (31:11): 

British Columbia was the first to enact the paid transparency laws in Canada. I know there are some states in the United States that have very similar laws as well. So for British Columbia, there are different elements of the law that will impact payroll. So disclosing of the salary in the job postings is one. Now, you don’t have to disclose the exact salary, but you do need to disclose the range. There’s a prohibition in asking about pay history. So if you’re interviewing a candidate, you cannot go into the what are you earning currently at your employer question. And then there’s non-retaliation clauses if employees are discussing their salaries with other employees, which is an interesting one, especially for leaders. And then there’s paid transparency reports that are required by the employers. So BC, British Columbia, was the first province, and now we’re hearing Ontario is going to shortly enact similar laws, and Quebec as well has indicated that they are exploring pay transparency in that province as well. 

Jim Lord (32:29): 

These are the places where ADP tries to make sure we’re a bit ahead of the curve anticipating and seeing around corners to be able to build those reports or using the insights that we have in our systems to provide the right benchmarking that our clients need to make sure that they’re remaining compliant as those new laws are regulations are deployed. 

Elvira Ciambella (32:49): 

That’s really interesting, Jim, because currently we have in British Columbia, the pay transparency reporting is required for employers that have over a thousand employees. That is subject to change, and there’s discussions going on in different provinces that those requirements should actually be all the way to our small business clients. So that will be an interesting dilemma for the smaller businesses as they comply to the Pay Transparency Act. Today, they do not have that requirement, but if it does trickle to the smaller businesses, it will become an added complexity. 

Luisa Rollenhagen (33:31):

Absolutely.  

Let’s talk about additional benefits that employees may negotiate for. We’ve heard Keven mention RRSPs. Is this something that employers offer their employees? 

Elvira Ciambella (33:42): 

In terms of the other benefits that employers would elevate their compensation packages with, are things like RRSPs, registered retirement savings plans. These are typically savings that the employee can deduct off of their pay checks and employers typically will contribute to that retirement plan for the employee as well. And they are different forms of retirement plans that should the employee stop working for that employer, they can take the funds and invest them elsewhere. They’re not tied to that employer. And then you’ve got other benefits like health spending accounts where employees get a sum of money to spend on health benefits and they choose which ones they prefer, is actually a very, very popular compensation element in Canada. And tuition reimbursement plans is another one where employers will pay for specific tuition for employees. And then there’s different financial wellness plans where different companies will provide savings accounts for employees so that they can save for a rainy day. 

Luisa Rollenhagen (35:00):

Financial wellness is one of those terms we keep hearing again and again when it comes to the future of work, isn’t it? 

Jim Lord (35:07): 

I think employers have realized, and we saw it with COVID, with the mental wellness of employees, but I think the financial wellness of employees too, I think employers are connecting the dots and realizing that when an employee is doing well in all of those other facets, whether financially, obviously mentally, it does well for the company, they become better employees. And so it it’s incumbent upon the employers and the businesses that we partner with to look for these opportunities on how can they make it easier for employees to save the way Elvira kind of articulated or have other available options to them that maybe wouldn’t have been considered kind of payroll or HR related in the past are becoming more and more, I think part of the fabric because it’s helping employers maintain a healthier, more productive workforce. 

Luisa Rollenhagen (35:53):

Yes, it’s about a more holistic approach to your workforce. 

I want to talk really briefly about the regulatory standards that ADP has to comply with in Canada. Given how much sensitive data payroll systems handle, Canada has upped its standards for payroll providers to the point where they’re now held to the same compliance levels as banks. What can you tell me about that? 

Jim Lord (36:15): 

We keep coming back to the topic of the regulatory compliance and how it’s an ever-changing thing that we’re all facing. So yeah, in Canada there’s a regulatory body called FINRA, and FINRA generally had held banks to a very high standard. When you think of AML and KYC, so anti-money laundering and know your client standards, that we’re all kind of familiar with. When you go to open a bank account and you have to show your ID and they may run a background check and all of the things they do to make sure you are who you say you are, a lot of those standards have now been brought to payroll service providers. So companies like ADP are now in a situation where we have to make sure that our clients pass these significantly higher standards from an AML and a KYC perspective, requiring us to gather additional identity and other documentation from our clients to make sure they are who they say they are before we can start to process payroll and move money on their behalf. So again, just in the spirit of it’s an ever-changing landscape, this is part of what we do and how we evolve to make sure that we continue to meet all of those regulatory situations so that our clients can feel comfortable that they’re with the right provider. 

And by the way, obviously, if anyone knows anything about ADP, we take ethics and integrity are two of our core values, and it’s something that I think has always been in the DNA of us for the last 76 years. I think this is the Canadian government’s way of now just embracing that at a more holistic level, enforcing all apparel service providers across the country to kind of meet the same standards across the board. 

Luisa Rollenhagen (37:47):

Of course. This is another guarantee for clients, after all. They know that ADP is operating at the highest compliance level in Canada. 

We’re nearing the end of the episode, but before we let you go, I’d like to ask you one of my favorite questions: What do you personally love about working in payroll in Canada? 

Elvira Ciambella (38:08): 

My favorite part is seeing payroll’s role become that strategic partner at the table. And for many years it was the back office transactional. You only heard from your clients when something went wrong. And now with the level of education in the payroll world in Canada, and that’s thanks to industry leaders, it’s thanks to industry associations, there’s designation, there is annual certification that’s required. So that desire to educate the payroll practitioner gets me so excited about the future of this profession. And if I compare to 30 years ago when I started, the training was minimal, and as the landscape and the complexity increased, so did the training offerings. So that gets me really excited because we talk about things like AI and some payroll practitioners are worried about what that’s going to do to their role, and perhaps it will remove the transactional tasks that are being done today, but it will never remove that strategic thinking and that value add that brings everything together that the payroll practitioner can do. So I think the future is really bright for the payroll practitioner and especially in Canada where we have so much focus on continued education. 

Jim Lord (39:42): 

I think what you were talking about there, Elvira, is something we talk about all the time, which is the human element that’s in this human capital management space that we operate in. So having been here, so like I said for 30 years, one of the things I’ve come to appreciate more and more as my career has continued to kind of move on is we do something pretty noble in the payroll space, right? It’s like we’re not saving lives, we’re not first responders, bless all of them who have those jobs, but we are providing a tremendous service to businesses, and we are removing complexity, meeting regulatory requirements. We’re moving more tax money, generally speaking to most of the tax agencies than any other company in the world. And so when you think about the bridges and the hospitals and the schools that are being funded, all of that is money that has been earned by employees that’s then paid through taxes and moved by companies like ADP to all of the right agencies that depend on those funds in order to do all of the things that I just mentioned. 

And you’re helping people put food on the table, and you’re helping employees have access to the benefits and all of the things that Vera was speaking about earlier. And so I’ve learned that the culture at ADP kind of cultivates that ownership mentality, where I think our employees feel a little bit more connected to the work that they’re doing that does provide for a service experience. That’s kind of second to none when you know you’re working with highly trained specialized, Elvira mentioned in a lot of ways, often certified payroll specialists that also have that deeper human element, connective tissue to the tools or the software that they’re building or the services that we’re providing to our customers. 

Luisa Rollenhagen (41:21):

That’s a wonderful answer from both of you. 

We’ve reached the end of the episode, so I want to thank both of you for joining us today and sharing your expertise and your passion for payroll in Canada.  

I loved learning about Canada’s diverse workforce and the ways in which payroll works across different provinces. 

I hope you got a bit more insight into the intricacies of payroll and the labor landscape in Canada today. If this episode has piqued your interest or your company is considering expanding into Canada, please visit adp.ca. 

And don’t forget to subscribe to learn more about payroll around the world with each new episode.  

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