August 1997 Edition
BRAINS
In 1975, more than a fifth of the 10 million people in the labour force had no high school education. Today, barely 750,000 of Canada's more than 15 million workers have such little education and their numbers are shrinking. Almost as startling is the increase in workers with university degrees or other postsecondary certificates or diplomas. There were only 2 million in 1975; these people now number 7.3 million, nearly half the labour force.
CONNECTED
Canada's small businesses are quickly embracing the Internet. A new study shows that about a quarter of the country's 2.3 million self-employed workers are using the information highway. The survey of 6,761 members of the Canadian Federation of Independent Business found that the proportion of Internet users among these small and medium-sized business in the first quarter of 1997 was almost double the level from a year earlier. The largest concentration is in B.C. where 43 per cent of small and medium-sized businesses are on-line.
BUSINESS PLANS
A new Internet-based planning tool will take entrepreneurs through the step-by-step preparation of a bank-ready business plan. The Interactive Business Planner (www.sb.gov.bc.ca), is the Canada\British Columbia Business Service Centre's newest Web tool and is designed to make number crunching easier. When the financial data is entered, the IBP automatically generates an income statement, cash-flow statements and balance sheet. The planner is linked to other information sources on the Internet.
WORRIES
In a new survey of 725 Canadian small businesses, with annual sales under $10 million, 35 per cent put higher sales at the top of their list of worries. Only four per cent see lack of skilled labour as a problem. A weak economy was mentioned by 19 per cent; taxes by 18 per cent; controlling costs, 16 per cent and finding equity, 13 per cent. The search for equity was more of a concern for female owners than males.
COUPONS
Canadian consumers redeemed three million more coupons last year than in 1995. This growth reverses the trend in the U.S. where coupon use has dropped. Canadian manufacturers distributed directly to consumers 3.3 billion coupons, eight per cent more than in 1995. Shoppers using cents-off coupons and grocery and personal care products produced savings of $100 million in 1996 which does not include those issued by fast-food chains and other retailers. Canadians also benefited from higher coupon values which rose to a record 70 cents each on average from 68 cents a year earlier.
TENDERIZING
A researcher at the U.S. Department of Agriculture has announced that explosives can be used to tenderize meat. If done right, the meat doesn't fall apart or lose its colour. The technique involves vacuum-packing beef, lamb, pork or poultry in a plastic bag and putting it into a 280-gallon tank of water. An explosion is generated using a small quantity of high explosives in the water at a precise distance from the meat resulting in instant tenderness without exposure to chemical additives. The idea was suggested by a retired nuclear-weapons specialist.
DVD
By the end of the year, the music industry expects to produce the final specification for an audio version of the digital versatile disc (DVD) which could become as popular as cassette tapes and compact discs. A video version of the new disc, which looks like a standard compact disc but has much higher capacity, is already available in North America and Asia. Initial sales of DVD video hardware and software have been strong. Record companies hope DVD audio will revitalize the music market as the launch of CD's did in the 1980s. Global retail sales of recorded music were static in 1996 at US$39.8 billion.
DOCUMENTS
While the percentage of documents stored on paper is shrinking, the total number of documents organizations are generating is increasing at a much faster rate. Paper usage is increasing by 15 per cent a year in the U.S. and Canadian figures are probably comparable. It is estimated that around 15 per cent of a company's revenue is devoted to publishing activity. Companies now spend around 10 per cent of their revenue handling paper documents and office workers spend up to 60 per cent of their time preparing, filing, copying and faxing documents.
QUALITY
A survey by Canadian Foreign Affairs and International Trade of more than 5,000 people in 20 countries attempted to gauge what the rest of the world thinks about Canada. The country is still perceived as a source of natural resource products but there is a growing awareness of the country as a producer of high-quality goods and services. A majority of people from Mexico, Brazil, Chile, Italy, Ukraine, Israel and South Africa say that Canadian products and services are better than those from other developed countries.
WASHING MACHINES
Europeans are fanatical about their washing machines which load from the front claiming they wash better and are far superior to American ones which are traditionally loaded from the top. Front loaders only account for two per cent of the U.S. home market. A key reason is price: European models sell for as much as $3,000 against $500 for the average U.S. top-loader. They cost more to build because their doors must be watertight and need more sensitive suspensions to balance their loads spinning horizontally. Now Maytag is about to introduce European-style front loaders which they say clean better, use less water, detergent and energy, and even slash drying time by whirling more water from a wash load. The price should come in around $1,000 and some California utilities will be offering rebates of $250 to buyers to encourage conservation.
MICROWAVES
Microwaves can be used to fix potholes according to scientists at the Oak Ridge Laboratory in Tennessee. They have developed a technique that heats the area around a pothole and uses the surrounding asphalt to fill the gap. The repairs are seamless and smoother to drive over and are expected to create a stronger patch than the traditional method of compacting hot asphalt into the hole. Repairs can also be made year round.
COPYRIGHT
Corporate Canada could soon face millions of dollars in new copyright fees under a plan by Canada's copyright collective. Cancopy has served notice to the legal and banking industries that it wants them to pay a new license fee for routine photocopying. A similar fee is already being paid by educational institutions and some pharmaceutical, steel and media monitoring companies.
STANDARDS
The European Union has reached deals with Canada and the U.S. on mutual recognition of safety standards covering $45 billion (U.S.) a year in trade. Products tested and approved for sale in Europe will be considered ready for sale in Canada and the U.S. without having to go through certification procedures. Canadian and American products will have the same advantages entering the 15-country EU. The agreement is meant to reduce the time and expense of trade and paves the way for the eventual harmonization of North American and EU standards.It is hoped the treaty will come into effect in January 1998.
TECHNOLOGY
It is reported that Canada Post and the U.S. Postal Service will install wireless technology to measure the flow of mail to and from Europe. The hardware, which fits inside an ordinary letter-size envelope, is used to track how long an international letter spends in a particular country and to divide up the $5.5 billion (U.S.) in annual international stamp revenues. Eighteen European countries already use this technology to measure cross-border mail flows.
CYBERTAX
A high-profile group of business leaders has warned that governments must negotiate global treaties to cover electronic commerce or risk seeing their tax revenues vanish into cyberspace. National laws are no longer adequate to govern transactions made in the electronic ether, where it is difficult to determine where buyer and seller reside or even where the sale took place. They expect merchandising on the Internet to grow from about $500 million (U.S.) today to about $5 billion by 2000. Taxing data transfers, the so-called bit tax, has been rejected as it would slow the growth of electronic commerce and would be difficult to apply.
DUTY-FREE
Duty-free was an Irish invention that began in the late 1940s at Shannon Airport in Ireland where transatlantic flights had to stop for fuel. It is now a global industry worth more than $20 billion (U.S.), half of which takes place in Europe. But the European business will be massively reduced if the European Union goes ahead with plans to end duty-free shopping for people travelling among the 15 member states as of July 1, 1999. The thinking behind the EU decision is that there is no role for duty-free in a single European market, where borders are evaporating and where tax rates are supposed to be harmonized
INSURANCE
World insurance premiums have broken through the $2 trillion (U.S.) mark for the first time according to Swiss Reinsurance Co. of Switzerland. In 1995, premium volume was $2.14 trillion, up 3.7 per cent from the previous year. Life insurance counted for $1.24 trillion of the total, reaching record highs in Japan, South Korea and South Africa.
ISRAEL
The Canada-Israel Free Trade Agreement saw bilateral trade grow by 38 per cent in the first quarter of 1997. Canadian exports to Israel rose nearly 40 per cent with four industries leading the way--processed foods, chemical products, machinery and electronic equipment and paper products. Exports from Israel to Canada increased 36 per cent with plastics, precious stones and metals, and machinery and electrical equipment leading the way.
SHIPPING
July 1, 1998 is the implementation date for the International Safety management code. While the U.S. says non-compliant vessels will be barred from its ports, Canada has yet to make a decision. Global shipowners have been apathetic in adopting the code and it is estimated that less than 10 per cent of the global fleet has achieved compliance so far. The International Maritime Organization has said there will be no deferral of the target date for enforcing compliance. Shipping executives do not expect the code to be met but maintain that the world fleet will continue operating.
EAST ASIA
This area represents 25 per cent of global economic output, about the same as North America. But over the next decade it will account for half to two-thirds of world economic growth. Canadian exports to Hong Kong, Taiwan, South Korea and Singapore have dropped over the past year but increased to China, Malaysia, Thailand and Indonesia. The World Bank predicts East Asian GDP growth rates of 7 per cent through to 2005 with imports growing by 11 per cent annually. It is estimated that over the next decade, the Asian members of APEC will have to spend $1.5 trillion on transportation systems, electricity plants, water distribution and telecommunications.
ROYALTIES
The Prudential Insurance Co. of America paid $69 million for an issue of Bowie Bonds, based on the future royalties of rock star David Bowie.
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
In 1975, more than a fifth of the 10 million people in the labour force had no high school education. Today, barely 750,000 of Canada's more than 15 million workers have such little education and their numbers are shrinking. Almost as startling is the increase in workers with university degrees or other postsecondary certificates or diplomas. There were only 2 million in 1975; these people now number 7.3 million, nearly half the labour force.
CONNECTED
Canada's small businesses are quickly embracing the Internet. A new study shows that about a quarter of the country's 2.3 million self-employed workers are using the information highway. The survey of 6,761 members of the Canadian Federation of Independent Business found that the proportion of Internet users among these small and medium-sized business in the first quarter of 1997 was almost double the level from a year earlier. The largest concentration is in B.C. where 43 per cent of small and medium-sized businesses are on-line.
BUSINESS PLANS
A new Internet-based planning tool will take entrepreneurs through the step-by-step preparation of a bank-ready business plan. The Interactive Business Planner (www.sb.gov.bc.ca), is the Canada\British Columbia Business Service Centre's newest Web tool and is designed to make number crunching easier. When the financial data is entered, the IBP automatically generates an income statement, cash-flow statements and balance sheet. The planner is linked to other information sources on the Internet.
WORRIES
In a new survey of 725 Canadian small businesses, with annual sales under $10 million, 35 per cent put higher sales at the top of their list of worries. Only four per cent see lack of skilled labour as a problem. A weak economy was mentioned by 19 per cent; taxes by 18 per cent; controlling costs, 16 per cent and finding equity, 13 per cent. The search for equity was more of a concern for female owners than males.
COUPONS
Canadian consumers redeemed three million more coupons last year than in 1995. This growth reverses the trend in the U.S. where coupon use has dropped. Canadian manufacturers distributed directly to consumers 3.3 billion coupons, eight per cent more than in 1995. Shoppers using cents-off coupons and grocery and personal care products produced savings of $100 million in 1996 which does not include those issued by fast-food chains and other retailers. Canadians also benefited from higher coupon values which rose to a record 70 cents each on average from 68 cents a year earlier.
TENDERIZING
A researcher at the U.S. Department of Agriculture has announced that explosives can be used to tenderize meat. If done right, the meat doesn't fall apart or lose its colour. The technique involves vacuum-packing beef, lamb, pork or poultry in a plastic bag and putting it into a 280-gallon tank of water. An explosion is generated using a small quantity of high explosives in the water at a precise distance from the meat resulting in instant tenderness without exposure to chemical additives. The idea was suggested by a retired nuclear-weapons specialist.
DVD
By the end of the year, the music industry expects to produce the final specification for an audio version of the digital versatile disc (DVD) which could become as popular as cassette tapes and compact discs. A video version of the new disc, which looks like a standard compact disc but has much higher capacity, is already available in North America and Asia. Initial sales of DVD video hardware and software have been strong. Record companies hope DVD audio will revitalize the music market as the launch of CD's did in the 1980s. Global retail sales of recorded music were static in 1996 at US$39.8 billion.
DOCUMENTS
While the percentage of documents stored on paper is shrinking, the total number of documents organizations are generating is increasing at a much faster rate. Paper usage is increasing by 15 per cent a year in the U.S. and Canadian figures are probably comparable. It is estimated that around 15 per cent of a company's revenue is devoted to publishing activity. Companies now spend around 10 per cent of their revenue handling paper documents and office workers spend up to 60 per cent of their time preparing, filing, copying and faxing documents.
QUALITY
A survey by Canadian Foreign Affairs and International Trade of more than 5,000 people in 20 countries attempted to gauge what the rest of the world thinks about Canada. The country is still perceived as a source of natural resource products but there is a growing awareness of the country as a producer of high-quality goods and services. A majority of people from Mexico, Brazil, Chile, Italy, Ukraine, Israel and South Africa say that Canadian products and services are better than those from other developed countries.
WASHING MACHINES
Europeans are fanatical about their washing machines which load from the front claiming they wash better and are far superior to American ones which are traditionally loaded from the top. Front loaders only account for two per cent of the U.S. home market. A key reason is price: European models sell for as much as $3,000 against $500 for the average U.S. top-loader. They cost more to build because their doors must be watertight and need more sensitive suspensions to balance their loads spinning horizontally. Now Maytag is about to introduce European-style front loaders which they say clean better, use less water, detergent and energy, and even slash drying time by whirling more water from a wash load. The price should come in around $1,000 and some California utilities will be offering rebates of $250 to buyers to encourage conservation.
MICROWAVES
Microwaves can be used to fix potholes according to scientists at the Oak Ridge Laboratory in Tennessee. They have developed a technique that heats the area around a pothole and uses the surrounding asphalt to fill the gap. The repairs are seamless and smoother to drive over and are expected to create a stronger patch than the traditional method of compacting hot asphalt into the hole. Repairs can also be made year round.
COPYRIGHT
Corporate Canada could soon face millions of dollars in new copyright fees under a plan by Canada's copyright collective. Cancopy has served notice to the legal and banking industries that it wants them to pay a new license fee for routine photocopying. A similar fee is already being paid by educational institutions and some pharmaceutical, steel and media monitoring companies.
STANDARDS
The European Union has reached deals with Canada and the U.S. on mutual recognition of safety standards covering $45 billion (U.S.) a year in trade. Products tested and approved for sale in Europe will be considered ready for sale in Canada and the U.S. without having to go through certification procedures. Canadian and American products will have the same advantages entering the 15-country EU. The agreement is meant to reduce the time and expense of trade and paves the way for the eventual harmonization of North American and EU standards.It is hoped the treaty will come into effect in January 1998.
TECHNOLOGY
It is reported that Canada Post and the U.S. Postal Service will install wireless technology to measure the flow of mail to and from Europe. The hardware, which fits inside an ordinary letter-size envelope, is used to track how long an international letter spends in a particular country and to divide up the $5.5 billion (U.S.) in annual international stamp revenues. Eighteen European countries already use this technology to measure cross-border mail flows.
CYBERTAX
A high-profile group of business leaders has warned that governments must negotiate global treaties to cover electronic commerce or risk seeing their tax revenues vanish into cyberspace. National laws are no longer adequate to govern transactions made in the electronic ether, where it is difficult to determine where buyer and seller reside or even where the sale took place. They expect merchandising on the Internet to grow from about $500 million (U.S.) today to about $5 billion by 2000. Taxing data transfers, the so-called bit tax, has been rejected as it would slow the growth of electronic commerce and would be difficult to apply.
DUTY-FREE
Duty-free was an Irish invention that began in the late 1940s at Shannon Airport in Ireland where transatlantic flights had to stop for fuel. It is now a global industry worth more than $20 billion (U.S.), half of which takes place in Europe. But the European business will be massively reduced if the European Union goes ahead with plans to end duty-free shopping for people travelling among the 15 member states as of July 1, 1999. The thinking behind the EU decision is that there is no role for duty-free in a single European market, where borders are evaporating and where tax rates are supposed to be harmonized
INSURANCE
World insurance premiums have broken through the $2 trillion (U.S.) mark for the first time according to Swiss Reinsurance Co. of Switzerland. In 1995, premium volume was $2.14 trillion, up 3.7 per cent from the previous year. Life insurance counted for $1.24 trillion of the total, reaching record highs in Japan, South Korea and South Africa.
ISRAEL
The Canada-Israel Free Trade Agreement saw bilateral trade grow by 38 per cent in the first quarter of 1997. Canadian exports to Israel rose nearly 40 per cent with four industries leading the way--processed foods, chemical products, machinery and electronic equipment and paper products. Exports from Israel to Canada increased 36 per cent with plastics, precious stones and metals, and machinery and electrical equipment leading the way.
SHIPPING
July 1, 1998 is the implementation date for the International Safety management code. While the U.S. says non-compliant vessels will be barred from its ports, Canada has yet to make a decision. Global shipowners have been apathetic in adopting the code and it is estimated that less than 10 per cent of the global fleet has achieved compliance so far. The International Maritime Organization has said there will be no deferral of the target date for enforcing compliance. Shipping executives do not expect the code to be met but maintain that the world fleet will continue operating.
EAST ASIA
This area represents 25 per cent of global economic output, about the same as North America. But over the next decade it will account for half to two-thirds of world economic growth. Canadian exports to Hong Kong, Taiwan, South Korea and Singapore have dropped over the past year but increased to China, Malaysia, Thailand and Indonesia. The World Bank predicts East Asian GDP growth rates of 7 per cent through to 2005 with imports growing by 11 per cent annually. It is estimated that over the next decade, the Asian members of APEC will have to spend $1.5 trillion on transportation systems, electricity plants, water distribution and telecommunications.
ROYALTIES
The Prudential Insurance Co. of America paid $69 million for an issue of Bowie Bonds, based on the future royalties of rock star David Bowie.
Thank you for reading the A & A Economic News Digest. For more information visit our website www.aacb.com or contact A & A Contract Customs Brokers Ltd. at strehler@aacb.com.
Past issues of the A&A Economic News Digest can be found at http://www.aacb.com/publications/ed/index.asp
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