MAY 1996 Edition
INFORMATION
Industry Canada has established Canada's largest Internet
business Web site known as "STRATEGIS" which may be
found at http://strategis.ic.gc.ca. A vast, and growing, amount of information
has been collected including: 60,000 reports; 500,000 pages of searchable text;
2 gigabytes of statistical data and hot links to Canadian and international
business information databases. "STRATEGIS" contains six
different information categories: Markets, Trade and Investment; Industrial
Perspectives; Technology and Innovation; Micro-Economic Research and Analysis;
Managing Your Business and Marketplace Services.
TAXATION
Nova Scotia, New Brunswick and Newfoundland have now
signed an agreement with Ottawa to harmonize the Goods and Services Tax (GST)
with their Provincial Sales Tax (PST) as part of the governments promise to do
away with the GST. The new tax will be administered by the Federal Government.
Quebec has already signed an agreement leaving Ontario and B.C. as the major
holdouts but some experts predict that business competitiveness will eventually
force them, and the other provinces, to join harmonization. Retail
organizations have applauded the plan saying that it will eliminate consumer
"sticker shock" and simplify administration which will
save money in the long
run. Total GST\PST revenues are around $40 billion a year.
MORE TAXATION
Humorist Dave Barry says the IRS is making progress in
"its mission to develop a U.S. tax form so scary that just reading it will
cause the ordinary taxpayers's brain to explode." He cites Schedule J,
Form 1118; "Separate Limitation Loss Allocations and Other Adjustments
Necessary to Determine Numerators of Limitation Fractions, Year-End
Recharecterization Balances, and Overall Foreign Loss Account Balances."
LATIN AMERICA
Chile and Canada continue to negotiate an interim
free-trade agreement as a step towards Chile joining the NAFTA which was
stalled when the U.S. administration failed to get "fast track"
negotiating authority from Congress. Chile's economic growth was 8.4 per cent
in 1995. Meanwhile, trade is booming among Brazil, Argentina, Uruguay, Paraguay
and Chile (the MERCOSUR customs union), whose economies have a combined gross
domestic product of US$700 billion and a population of 225 million people.
According to a Royal Bank report, multinational companies engaged in
international trade or with factories inside this group are making huge profits. European and Japanese firms, seeking to
offset weak demand at home, are among the most aggressive in exploring Latin
America's newly opened economies.
MMT
Methylcyclopentadienyl Manganese Tricarbonyl may become
the next trade irritant between Canada and the U.S. MMT is a gasoline additive
which automobile companies claim gums up the latest pollution-control
technology in cars and causes smog. There is now a bill before Parliament to
ban it. The oil companies insist it is a benign, low-cost octane booster that
makes gasoline burn more efficiently. Forcing them to invest in alternatives
would cost about $100 million a year and could drive some refineries out of
business. The bill could also force a ban of imports from the U.S. with this
additive, possibly in violation of the NAFTA. Industry insiders say a struggle
with even higher stakes will be waged over sulphur levels in gasoline.
CUPS RUNNETH OVER
Cupholders seem to be the latest battle ground for the
Big Three North American auto makers in the minivan stakes. GM Canada has taken
the lead with 17 cupholders on the Chevrolet Venture and Pontiac Trans Sport.
This is a ratio of 2.43 cupholders per passenger in the Venture and 2.13 in the
Trans Sport. The previous winner was Chrysler whose minivans sported 14 holders
last year. Nine is the best that Ford can do in their Villager.
BEEF
With Britain's $8 billion beef industry facing
liquidation because of "mad cow" disease, Canada's beef producers
will likely be affected. The European Union has banned British beef, as have
South Africa, Australia Japan and the U.S, among others. The vacuum for beef
will have to be filled by increased imports. Currently, Australia, New Zealand,
Argentina, Brazil and Uruguay export beef products to Europe. Currently, Canadian
and U.S. beef is banned from Europe primarily because of the use of growth
hormones, but Canada may be positioned to export an extra 15,000 tonnes to
Asia. Canada's pure-bred genetics industry might also get a boost from the ban
by assisting to replace British stocks.
DISCOUNT CHAINS
Spurred by aggressive pricing, discount chains overtook
major department stores in sales last year by grabbing $7.4 billion or 53 per
cent of department store sales. Overall consumer spending in department stores
rose 4.7 per cent in 1995 to $13.9 billion. Discount chains saw sales jump 13.4
per cent from the previous year, with record sales increases in every month in
1995 except February. In contrast, sales at department stores; T. Eaton Co.,
Sears Canada and Hudson's Bay Co. dropped for the third year in a row.
JOBS
A study by the President's Council of Economic Advisors
indicates that new jobs being created in the U.S. are high-wage, good-wage
jobs. It found that two thirds of jobs created in 1994 and 1995 paid better
than the median wage, now about $25,000 (US). As well, more than half of the
new jobs were in industries or occupations where wages are in the top 30 per
cent of income brackets. This is an improvement over the early nineties when
jobs created during a period of economic stagnation dragged down the wage
average. The report claims that 8.5 million net new jobs have been created
since January 1993 bringing the unemployment rate down to 5.6 per cent.
MEGASTORES
The battle for the Greater Vancouver sporting-goods
retail market recently heated up again. U.S.-based Sportsmart Inc. has just
opened two new stores with over 50,000 square feet of selling space each, twice
the size of their competitors' biggest stores. The stakes are huge as B.C.
residents currently spend more than $450 million annually in the sporting goods
sector. Biggest revenues come from the sale of hockey, baseball and golf
equipment, while fitness equipment, inline skates and footwear are also big
sellers.
SATELLITES
As Asia plugs in more telephones and televisions, the
satellites that bounce their signals back to earth are heading for gridlock. At
least a dozen satellites are due to be launched into Asian skies this year and
more in 1997 and 1998. There are at least 40 already blinking down on the
region. The closer they get, the more they interfere with each other and
distort each other's signals. The region has now started its own satellite
industry building both satellites and the rockets to launch them.
SECURITY
About five per cent of Iowa's 6,000 sheep ranchers use
llamas to guard their flocks. Llamas bond with sheep, eat the same food and
chase away canines. One rancher has not lost a lamb in the two years since she
acquired llamas, despite a local coyote infestation.
Britain's police are lobbying for civil aviation laws to
be amended to allow the use of unpiloted spy planes to hover at 45,000 feet,
monitoring areas below with high-resolution cameras, radar and thermal-imaging
equipment.
CAFFEINE
First it was natural water, then it was coffee with its
jolt of caffeine. Now a Milwaukee firm has combined the two and is producing
caffeinated water. "Water Joe" went on the market three months ago in
the Midwest and today, 69,210 bottles a week are being shipped for about 89
cents (U.S.) for a half-litre bottle. Competing
against 50 or so different bottled water labels, the company wants to place the
drink closer to coffee items on store shelves. The company is also test
marketing five-gallon water cooler refills for offices.
NET WORTH
Canadians' average net worth last year was $83,600, up
$1,900 from 1994. Net worth is based on the assets you hold minus what you owe
others. Canada's national balance sheet shows that the country's net worth was
$2.5 trillion in 1995. The country's total wealth grew by 3.2 per cent in 1995
to $2.8 trillion, while net foreign debt rose by a more modest 0.5 per cent to
$340 billion.
JAPAN EXPORTS
For the first time ever, Japan exported more goods to its
Asian neighbours in the last business year than to the U.S. and Europe
combined. Exports to Asian countries rose 16.9 per cent in fiscal year 1995-96
to $193 billion compared to the $189 billion of exports to the U.S. and Western
Europe. The figures underline Japan's current shift towards greater involvement
in Asia both as an exporter and investor. A sharp increase in production in
Asia by Japanese electronics and automobile companies has led to a jump in
Japan's exports to the region of components and manufacturing machinery which
are used at local plants there.
SCRAP-IT
British Columbia is the first Canadian province to
experiment with a program aimed at scrapping high-polluting old vehicles.
Motorists who scrap their pre-1983 vehicles, which must have failed the AirCare
emissions test, can get up to $750 towards a new car or a $500 rebate on a 1988
or newer car. Drivers can also elect to pass up the rebates in exchange for a
year's worth of monthly BC Transit passes worth $1,272. In the first year,
SCRAP-IT aims to take 1,100 vehicles off the road, 1,000 in Vancouver and 100
in Victoria.
TRADE
According to a new Statistics Canada study, Canadian
companies which were forced to "export or perish" have made Canada
the strongest exporter and the most trade-dependent of the Group of Seven
countries. Exports of goods and services climbed to 33 per cent of gross
domestic product in 1994, up sharply from 24 per cent in 1991. This trend
continued last year when exports jumped to 37 per cent of Canada's GDP. Imports
have also risen, almost keeping pace with the rapid rise in exports relative to
the GDP. The increasing importance of trade in a country's economy is seen as a
positive sign. Increased exports signal competitive success abroad for Canadian
companies, while increased imports should give Canadian consumers a greater
choice of goods at lower prices.
INVENTIONS
In France, Rank Xerox is developing an ink that cannot be
photocopied, so secret documents can be safeguarded and publishers can thwart
illegal copying. The ink works by incorporating molecules that change shape and
become opaque when exposed to brief flashes of light. This means that the flash
of a copier's scanner would render the ink briefly invisible.
COPYRIGHT
After intense lobbying by the industry, an amendment to
the Copyright Act has been tabled affecting anyone purchasing blank audio
tapes. The Government says this will strengthen Canada's cultural industries,
which employ 670,000 Canadians and add $16 billion to the economy annually. A
royalty fee will be charged on all of the 44 million blank audio tapes sold in
Canada each year, 90 per cent of which the industry claims are used to make
illegal copies of copyrighted music.
THE COST OF CRIME
A Swedish court has ordered a burglar to pay the
equivalent of $500 in damages for shocking a parrot when he broke into a house.
Since the burglary, the parrot has been afraid to stay at home alone and his
master is forced to drive him to relatives when leaving his house. The court
said the thief should pay the transportation costs as well as the damages.
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