January 1998 Edition
EUROPE
Canadian companies could miss major export opportunities in what is becoming the world's biggest market because they pay too much attention to the U.S. and too little to Europe, according to the Conference Board of Canada. The EU already has a combined population of 376 million people and an economy worth $8.6 trillion (U.S.) a year. The U.S., Canada's largest trading partner, has a population of 263 million people and a $7.3 trillion economy. Last year, Canada ran a $7 billion trade deficit with the EU exporting only $15.7 billion worth of goods which represented six per cent of total Canadian exports.
SELF-EMPLOYMENT
In 1996, more than two-thirds of Canada's self-employed worked in the service sector. Together, trade, business services, and personal and household services accounted for half of all self-employment. In addition, about one-quarter worked in either agriculture or construction. The incidence of self-employment was high in business services. About 30% of workers in computing services were self-employed, while the proportion was 42% in accounting, 32% in legal service, 61% in consulting and 41% in advertising.
SELF-EMPLOYMENT
In 1996, more than two-thirds of Canada's self-employed worked in the service sector. Together, trade, business services, and personal and household services accounted for half of all self-employment. In addition, about one-quarter worked in either agriculture or construction. The incidence of self-employment was high in business services. About 30% of workers in computing services were self-employed, while the proportion was 42% in accounting, 32% in legal service, 61% in consulting and 41% in advertising.
MIR
Last month, two Russian cosmonauts used an Internet link from the Mir space station to go on a shopping spree in Manhattan's Virtual Emporium. They bought gifts including Barbie Dolls, Chicago Bulls sportswear, computers and an exercise machine. Meanwhile, the cash-strapped Russian space agency is considering an offer to put actors on Mir to make a movie. Cosmonauts have already done in-space commercials for Pepsi, Omega watches and Israeli milk.
MARKETS
The world economy will change fundamentally over the next 25 years as Brazil, China, India, Indonesia and Russia assume more central roles in the global market place according to the World Bank. The so-called "Big Five" developing economies, which currently account for less than a 10th of global output and trade, could double their share of the world market and surpass the European Union by 2020. These countries should grow at an average annual rate of between 5 and 6 per cent a year over the next 25 years.
PRODUCTIVITY
While the performance of the whole Canadian business sector has remained quite comparable with its U.S. counterpart since 1961, labour productivity of Canadian manufacturing started to lag behind the U.S. in 1986. However, Canada has performed better than the U.S. in the services sector as well as some goods producing industries (for example, construction and mining), which accounts for 75% of total production in the business sector. From 1961 to 1985, labour productivity in both the Canadian and the U.S. manufacturing sectors grew at much the same rate. Since then, a widening gap has emerged in favour of American manufacturing. Between 1986 and 1996, labour productivity grew on average 1.6% per year in Canada and 2.6% in the U.S.
ROYALTIES
Canadian companies licensing their trademark, copyrights and patents around the world are losing revenue because they are not collecting royalties according to the accounting firm of Price Waterhouse. It claims organizations are losing millions of dollars by not enforcing royalty agreements and suggests companies should make one person with authority responsible for all royalties, do an inventory of all licensing agreements and then set up a system to monitor constantly the flow of royalties.
HEALTH
A new Health Canada report states that losses to the economy due to illness, disability and premature death cost the country more than the direct costs of health care. The study estimates that the total burden of illness to the economy comes to $157 billion a year. The direct cost of care, including money spent on hospitals, physicians, drugs and research came to $72 billion. It is estimated that there were $85 billion in indirect costs in the form of lost productivity because of disability and premature death.
COAL
Western Europe's coal industry, which powered the Industrial Revolution, is dying because of cheaper imports, government spending cuts and alternative sources of fuel, such as natural gas. It is estimated that by 2010 the industry will be finished except for a few mines in England. The unexpected slowdown in Asia's economic growth and excess global supplies of coal are contributing to the problem. Right now, it costs about US$120 a tonne for Germany to produce coal, while imports from outside the EU cost about US$40 a tonne. South Africa mines some of the cheapest coal at US$30 a tonne before freight costs.
SHORTAGES
Modern Purchasing reports that a 20-state inspection by the U.S. government uncovered wide-spread short-filling and short-weighing by the American dairy and fruit juice industries. Out of 1,638 containers inspected at supermarkets, schools, dairies and packaging plants, 666 (41 per cent) were underfilled. Although packages were underfilled by between only one and 6 per cent, the dairy industry sells billions of cartons a year, and even a one per cent shortage represents hundreds of millions of dollars in illegal profits. Almost 46 per cent of milk and 23 per cent of juice containers inspected were underfilled.
INFORMATION
The Canadian government has launched a new on-line information product, Take a World View ... Export Your Services, to assist Canadian service firms in preparing to export to foreign markets. It may be found at http://strategies.ic.ca/twv or http://www.infoexport.gc.ca. It is a joint effort between the private sector, the Department of Foreign Affairs and International Trade, and Industry Canada, and is one of several initiatives of Team Canada Inc., formed specifically to promote the trade of Canadian products and services in the international marketplace. It is aimed at small and medium- sized firms in the knowledge-based service industries, including management consultants, architects, engineers, professional trainers and designers.
LOW-TECH
For a new consumer product, Freeplay doesn't seem to have a lot going for it. It's bulky, heavy and a lot pricier than similar products. It's a radio with batteries that will never go flat and doesn't use one watt of electricity. Freeplay is the first wind-up radio: Just 30 seconds of cranking and it pumps out 40 minutes of AM, FM or shortwave tunes. The size of a lunchbox, weighing 2.7 kilograms it costs $80. Until now, news of the radio spread by word-of-mouth among hikers and environmentalists but it is now being stocked by major stores in England and the U.S.
TOURISM
Last year, the most popular countries for international tourism were: France, 61 million, Spain, 45 million, the United States, 45 million, Italy, 29 million, China, 23 million, Britain, 22 million and Mexico, 19 million.
WASTE
According to the European Union's financial watchdog, the EU wasted about $7 billion in 1996 and another $5.5 billion is unaccounted for. The Luxembourg-based Court of Auditors said more than 5 per cent of the EU's $134 billion budget was paid out in error. Excessive agricultural subsidies accounted for the bulk of the excess spending.
COMPETITION
In an effort to lure film business away from B.C., Washington State has passed legislation giving film companies another break on sales tax. Film and TV producers spent $37 million in Washington in 1996 (down from $76 million in 1994). B.C. film and TV production totaled $537 million in 1996 (up from $400 million in 1994). 1,250 locations were used for filming in and around Vancouver in 1996, a 25 per cent increase over 1995.
SMART ABMs
A Canadian bank has set up eight "smart ABMs" in the Toronto area to test consumer reaction to a more advanced machine that can act as a kind of electronic variety store selling products such as movie and airline tickets. Besides its share of the ticket revenue, the bank makes money from ads carried on the machines. Pitches for soft drinks and hamburgers, among others, pop up as you wait for cash or movie tickets to print. Eventually, these ABMs could act as a personal financial adviser telling users, for example, about mortgage renewal options.
SHIPPING
An ocean-shipping cartel, which controls about 85 per cent of shipping capacity from Asia to the U.S., is going to try and force a 10 per cent rate increase on U.S. imports from Asia, the biggest increase in a decade. This would affect shipping rates on some $200 billion of goods a year. Any rate boost would be bad news for U.S. consumers because transportation costs, which account for about 5 to 10 per cent of the price of most goods, are usually tacked on to a product's price.
NUTRIA
Louisiana has begun a $2 million campaign to encourage people to eat nutria. This South American rodent, which looks like a cross between a beaver and a furry rat with yellow teeth, was brought to the state in the 1930s, in an attempt to establish a fur trade. About 50 animals escaped during a hurricane. There are now an estimated 20 million of these rodents in the wild, each of which contains about three pounds of low-fat meat.
CIDA
It is now easier to prepare proposals for the Canadian International Development Agency (CIDA)'s Industrial Co-operation Program. The agency has introduced its Automated Proposal System (APS). Users of the APS software complete their proposals by responding to the software's structured set of questions about their projects. A handy help feature is available with each question to further define proposal requirements. The resulting proposal is organized in a standard format that contains all the essential information and can be processed automatically. Applicants avoid lengthy paperwork and get speedier responses to their applications.
BEES
By some estimates, 95 per cent of the wild honey bees in the U.S. have been wiped out by parasite mites in the past three years. Many farmers and fruit growers are having to pay commercial beekeepers to bring their insects to pollinate their crops.
GRASS
An ancient grass that has flourished in parts of Europe and Asia for thousands of years may be introduced to the Prairies. Researchers from Agriculture Canada say sainfoin appears to be an improvement over alfalfa, which causes bloat in livestock and is vulnerable to attack by the alfalfa weevil. Sainfoin also grows earlier in the spring than alfalfa, gives good forage yields and can be harvested in late July or early August.
NUMBERS
-More than 40 per cent of radio listeners in the U.S. listen to one of its 2,642 country-music stations.
-There are 191 member countries in FIFA, soccer's governing body, compared with 184 countries in the United Nations.
-Thirty per cent of the Earth's inhabitants have no access to any health care whatsoever; 50 per cent have no toilet to use.
-Around the world, 53,333 people are working for various United Nations offices. Three times as many work for McDonalds
LANGUAGE
The U.S. version of English grows by about 5,000 words a year. The new terms are mostly medical or technical.
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
Canadian companies could miss major export opportunities in what is becoming the world's biggest market because they pay too much attention to the U.S. and too little to Europe, according to the Conference Board of Canada. The EU already has a combined population of 376 million people and an economy worth $8.6 trillion (U.S.) a year. The U.S., Canada's largest trading partner, has a population of 263 million people and a $7.3 trillion economy. Last year, Canada ran a $7 billion trade deficit with the EU exporting only $15.7 billion worth of goods which represented six per cent of total Canadian exports.
SELF-EMPLOYMENT
In 1996, more than two-thirds of Canada's self-employed worked in the service sector. Together, trade, business services, and personal and household services accounted for half of all self-employment. In addition, about one-quarter worked in either agriculture or construction. The incidence of self-employment was high in business services. About 30% of workers in computing services were self-employed, while the proportion was 42% in accounting, 32% in legal service, 61% in consulting and 41% in advertising.
SELF-EMPLOYMENT
In 1996, more than two-thirds of Canada's self-employed worked in the service sector. Together, trade, business services, and personal and household services accounted for half of all self-employment. In addition, about one-quarter worked in either agriculture or construction. The incidence of self-employment was high in business services. About 30% of workers in computing services were self-employed, while the proportion was 42% in accounting, 32% in legal service, 61% in consulting and 41% in advertising.
MIR
Last month, two Russian cosmonauts used an Internet link from the Mir space station to go on a shopping spree in Manhattan's Virtual Emporium. They bought gifts including Barbie Dolls, Chicago Bulls sportswear, computers and an exercise machine. Meanwhile, the cash-strapped Russian space agency is considering an offer to put actors on Mir to make a movie. Cosmonauts have already done in-space commercials for Pepsi, Omega watches and Israeli milk.
MARKETS
The world economy will change fundamentally over the next 25 years as Brazil, China, India, Indonesia and Russia assume more central roles in the global market place according to the World Bank. The so-called "Big Five" developing economies, which currently account for less than a 10th of global output and trade, could double their share of the world market and surpass the European Union by 2020. These countries should grow at an average annual rate of between 5 and 6 per cent a year over the next 25 years.
PRODUCTIVITY
While the performance of the whole Canadian business sector has remained quite comparable with its U.S. counterpart since 1961, labour productivity of Canadian manufacturing started to lag behind the U.S. in 1986. However, Canada has performed better than the U.S. in the services sector as well as some goods producing industries (for example, construction and mining), which accounts for 75% of total production in the business sector. From 1961 to 1985, labour productivity in both the Canadian and the U.S. manufacturing sectors grew at much the same rate. Since then, a widening gap has emerged in favour of American manufacturing. Between 1986 and 1996, labour productivity grew on average 1.6% per year in Canada and 2.6% in the U.S.
ROYALTIES
Canadian companies licensing their trademark, copyrights and patents around the world are losing revenue because they are not collecting royalties according to the accounting firm of Price Waterhouse. It claims organizations are losing millions of dollars by not enforcing royalty agreements and suggests companies should make one person with authority responsible for all royalties, do an inventory of all licensing agreements and then set up a system to monitor constantly the flow of royalties.
HEALTH
A new Health Canada report states that losses to the economy due to illness, disability and premature death cost the country more than the direct costs of health care. The study estimates that the total burden of illness to the economy comes to $157 billion a year. The direct cost of care, including money spent on hospitals, physicians, drugs and research came to $72 billion. It is estimated that there were $85 billion in indirect costs in the form of lost productivity because of disability and premature death.
COAL
Western Europe's coal industry, which powered the Industrial Revolution, is dying because of cheaper imports, government spending cuts and alternative sources of fuel, such as natural gas. It is estimated that by 2010 the industry will be finished except for a few mines in England. The unexpected slowdown in Asia's economic growth and excess global supplies of coal are contributing to the problem. Right now, it costs about US$120 a tonne for Germany to produce coal, while imports from outside the EU cost about US$40 a tonne. South Africa mines some of the cheapest coal at US$30 a tonne before freight costs.
SHORTAGES
Modern Purchasing reports that a 20-state inspection by the U.S. government uncovered wide-spread short-filling and short-weighing by the American dairy and fruit juice industries. Out of 1,638 containers inspected at supermarkets, schools, dairies and packaging plants, 666 (41 per cent) were underfilled. Although packages were underfilled by between only one and 6 per cent, the dairy industry sells billions of cartons a year, and even a one per cent shortage represents hundreds of millions of dollars in illegal profits. Almost 46 per cent of milk and 23 per cent of juice containers inspected were underfilled.
INFORMATION
The Canadian government has launched a new on-line information product, Take a World View ... Export Your Services, to assist Canadian service firms in preparing to export to foreign markets. It may be found at http://strategies.ic.ca/twv or http://www.infoexport.gc.ca. It is a joint effort between the private sector, the Department of Foreign Affairs and International Trade, and Industry Canada, and is one of several initiatives of Team Canada Inc., formed specifically to promote the trade of Canadian products and services in the international marketplace. It is aimed at small and medium- sized firms in the knowledge-based service industries, including management consultants, architects, engineers, professional trainers and designers.
LOW-TECH
For a new consumer product, Freeplay doesn't seem to have a lot going for it. It's bulky, heavy and a lot pricier than similar products. It's a radio with batteries that will never go flat and doesn't use one watt of electricity. Freeplay is the first wind-up radio: Just 30 seconds of cranking and it pumps out 40 minutes of AM, FM or shortwave tunes. The size of a lunchbox, weighing 2.7 kilograms it costs $80. Until now, news of the radio spread by word-of-mouth among hikers and environmentalists but it is now being stocked by major stores in England and the U.S.
TOURISM
Last year, the most popular countries for international tourism were: France, 61 million, Spain, 45 million, the United States, 45 million, Italy, 29 million, China, 23 million, Britain, 22 million and Mexico, 19 million.
WASTE
According to the European Union's financial watchdog, the EU wasted about $7 billion in 1996 and another $5.5 billion is unaccounted for. The Luxembourg-based Court of Auditors said more than 5 per cent of the EU's $134 billion budget was paid out in error. Excessive agricultural subsidies accounted for the bulk of the excess spending.
COMPETITION
In an effort to lure film business away from B.C., Washington State has passed legislation giving film companies another break on sales tax. Film and TV producers spent $37 million in Washington in 1996 (down from $76 million in 1994). B.C. film and TV production totaled $537 million in 1996 (up from $400 million in 1994). 1,250 locations were used for filming in and around Vancouver in 1996, a 25 per cent increase over 1995.
SMART ABMs
A Canadian bank has set up eight "smart ABMs" in the Toronto area to test consumer reaction to a more advanced machine that can act as a kind of electronic variety store selling products such as movie and airline tickets. Besides its share of the ticket revenue, the bank makes money from ads carried on the machines. Pitches for soft drinks and hamburgers, among others, pop up as you wait for cash or movie tickets to print. Eventually, these ABMs could act as a personal financial adviser telling users, for example, about mortgage renewal options.
SHIPPING
An ocean-shipping cartel, which controls about 85 per cent of shipping capacity from Asia to the U.S., is going to try and force a 10 per cent rate increase on U.S. imports from Asia, the biggest increase in a decade. This would affect shipping rates on some $200 billion of goods a year. Any rate boost would be bad news for U.S. consumers because transportation costs, which account for about 5 to 10 per cent of the price of most goods, are usually tacked on to a product's price.
NUTRIA
Louisiana has begun a $2 million campaign to encourage people to eat nutria. This South American rodent, which looks like a cross between a beaver and a furry rat with yellow teeth, was brought to the state in the 1930s, in an attempt to establish a fur trade. About 50 animals escaped during a hurricane. There are now an estimated 20 million of these rodents in the wild, each of which contains about three pounds of low-fat meat.
CIDA
It is now easier to prepare proposals for the Canadian International Development Agency (CIDA)'s Industrial Co-operation Program. The agency has introduced its Automated Proposal System (APS). Users of the APS software complete their proposals by responding to the software's structured set of questions about their projects. A handy help feature is available with each question to further define proposal requirements. The resulting proposal is organized in a standard format that contains all the essential information and can be processed automatically. Applicants avoid lengthy paperwork and get speedier responses to their applications.
BEES
By some estimates, 95 per cent of the wild honey bees in the U.S. have been wiped out by parasite mites in the past three years. Many farmers and fruit growers are having to pay commercial beekeepers to bring their insects to pollinate their crops.
GRASS
An ancient grass that has flourished in parts of Europe and Asia for thousands of years may be introduced to the Prairies. Researchers from Agriculture Canada say sainfoin appears to be an improvement over alfalfa, which causes bloat in livestock and is vulnerable to attack by the alfalfa weevil. Sainfoin also grows earlier in the spring than alfalfa, gives good forage yields and can be harvested in late July or early August.
NUMBERS
-More than 40 per cent of radio listeners in the U.S. listen to one of its 2,642 country-music stations.
-There are 191 member countries in FIFA, soccer's governing body, compared with 184 countries in the United Nations.
-Thirty per cent of the Earth's inhabitants have no access to any health care whatsoever; 50 per cent have no toilet to use.
-Around the world, 53,333 people are working for various United Nations offices. Three times as many work for McDonalds
LANGUAGE
The U.S. version of English grows by about 5,000 words a year. The new terms are mostly medical or technical.
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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