February 1998 Edition
AIR MILES
There are newsletters dedicated to collecting points, Internet sites that offer advice and even a company that sells insurance to protect them. When American Airlines started the first of the reward programs in 1981, it attracted 1.8 million participants. It is estimated that 52 million people in North America are now enrolled in points programs, and the number is growing at 11 per cent a year with 6.2 per cent of all flights on the continent taken free. The big rise in the pursuit of points now stems from the fact that consumers can collect points and redeem them without leaving the ground. 40 per cent of points are now earned in transactions through the use of credit cards, the familiar Air Miles card and even through phone companies.
SKILLS
The Conference Board warns that Canada has not produced, attracted or retained enough skilled workers to sustain growth in high technology, one of the biggest and fastest-growing industries. Too many of the nation's skilled technologists are being lured to the U.S. to fill some of the 190,000 high-tech jobs now vacant there. They are attracted by innovative U.S. companies offering the kind of work environments that appeal to young, mobile people. Conversely, the comparatively low value of the dollar and high personal tax rates are additional incentives for Canadians looking south of the border.
TOURISM
A study by the World Tourism Authority estimates that the worldwide tourist industry will expand so fast between now and 2020 that it will not only be the world's biggest industry but it will be the largest by far that the world has ever seen.
SHORTAGES
Anyone thinking about China's 1.2 billion consumer market should think about hair, or scrap metal or leather. Of all the consumer products made and sold in China, these make up the very short list of items that the country's ministry of internal trade says are in short supply. China is a major manufacturer of wigs made from human and synthetic hair. Four types of leather and fur are in short supply, used for making coats and five types of scrap metal, including aluminum and copper.
EUROPE
A Price Waterhouse study suggests that Canadian companies with subsidiaries, debt or private placements within the European Union should prepare a strategy for the arrival of the European Economic and Monetary Union which starts January 1, 1999. It states that Canadian firms have underestimated how the European landscape will change. Debt outstanding at July 1, 2002 will have to be redenominated and companies may need to renegotiate, sign new documentation and establish new payment arrangements. Contracts in European currencies will have to be converted into the new one.
CAREERS
The U.S. occupation with the biggest projected job growth is cashier. The Bureau of Labour Statistics says 530,000 cashier jobs will be created by 2006, a 17 per cent increase from the current 3.1 million. Other growth areas: systems analysts, general managers and registered nurses.
CHEMICALS
Turmoil in the Asian financial markets is hastening a downturn in the chemicals business worldwide as prices tumble. Nearly one-third of U.S. chemicals exports go to the Asia-Pacific region. Chemical companies in the U.S., Japan and Europe are struggling with their heavy investments in Asia, especially in Thailand, Indonesia and South Korea. Many large U.S. companies are curbing production to forestall inventory buildups in the U.S. Some chemicals, such as polypropylene, are selling at half the price of a year ago. Estimates are pegging 1998 as a terrible year, with 1999 and 2000 even worse for the industry.
PHARMACEUTICALS
The European Union is challenging Canada's drug patent legislation before the World Trade Organization, arguing that it reduces protection to 19 1\2 years. This could force Canada to change the way it treats generic drug companies. The Patent Act gives brand-name drug companies a 20-year patent protection. But during those 20 years, generic drug companies are allowed to develop and test copies of the brand-name products and six months before the 20 year patent expiry, actually begin producing and stockpiling generic products ready for the market. About half of Canada's pharmaceutical market is dominated by European firms and sales in Canada are worth over $5 billion annually.
INFORMATION
A generation of "dataholics" is on the rise, with more than half of all business people saying they crave information, especially from computers and the Internet. A Reuters study of 1,000 international business people said 53 per cent admitted to craving information and 54 per cent claimed to get a "high" when they find what they want in an electronic search. At the same time, they often feel overwhelmed by all the information at their disposal and worry that their children are turning into info junkies. 46 per cent of those surveyed said their children already prefer computers to their peers.
WEB SITE
A new site contains tips for female entrepreneurs. The Online Woman's Business Centre (www.onlinewbc.org) covers topics such as marketing, finance, technology and networking. Although the site is sponsored by the U.S. government's Small Business Administration, much of the information is useful to Canadians.
BANKS
According to the Canadian Bankers Association, Canada's seven biggest banks have more than 722,000 small and medium-sized business clients, defined as those with credit authorizations of less than $1 million. The average amount of credit outstanding for this group is $64,000. Since the second quarter of 1996, the number of these customers has increased by 3.2 per cent.
WINE
France spends more on wine than any other country. The French spent $14.1 billion in 1996 equivalent to $242 a head. Although America's wine market, worth $10.5 billion, is the second biggest, this works out at a mere $40 each. Austrians are just behind the French, buying $240 a head. Wine sales in Britain, where beer once ruled, are already the third-highest in the world, and still growing at over 10 per cent a year. Russia and Poland are likely to remain the fastest growing markets as incomes rise and people develop western spending habits. The Japanese spend only $4.50, barely enough for a bottle each.
CARGO
Some German enthusiasts are designing a helium-filled blimp that could revolutionize the global heavy-haulage business. Their CargoLifter 160, a 246 metre long, 61 metre wide blimp would be able to hoist heavy, bulky objects such as 160-ton turbines or an empty Boeing 747, wings and all, 10 times faster and an average 20 per cent less expensively. The CargoLifter's cargo bay would hold 395 cubic metres. An even bigger airship still on the drawing boards would haul as much as 450 tons. Such unprecedented carrying capacity could lead to changes not only in the way that companies deliver things, but in the way they design and build them too. Airships appear to be on a comeback, helped in part by the U.S. governments 1996 decision to sell off its strategic helium reserves.
ASIA
Some Asian governments are sending a stern message to their citizens: Stay home. They are raising passport fees and other international travel costs, and even openly admonishing people not to go abroad, as part of efforts to protect their foreign-currency reserves. Malaysia has more than doubled the cost of passports and there is now a travel freeze for government officials. Thailand is considering raising international airport taxes and imposing an exit tax. In South Korea, the government is essentially shaming citizens into not travelling overseas. Flight attendants were recently shown on television at Kimpo Airport with signs urging people not to travel.
LICENSING
According to Fortune magazine, the National Basketball Association of the 1990s has emerged as a truly global sports league. NBA games are televised from Santiago to Seoul and last year the league and its partners sold almost $500 million (U.S.) worth of licensed products. Even in countries such as Mongolia, Namibia and Kuwait where it does no other business, it licenses TV rights to local broadcasters.
INDIA
The results of the biggest tax amnesty in India were recently announced. Film producers, sports stars and thousands of businessmen hid their faces from the press as they visited their local tax offices to declare illicit gains. They came in limousines, some with bodyguards and suitcases of money, others with sachets of jewels, all hoping for peace in the new tax year. They declared a massive $13 billion in illicit gains, hidden in jewels, gold and silver, bogus land deeds and false bank accounts. The 466,000 Indians that came forward paid a staggering $4 billion in taxes to the government, a windfall that was greater than all foreign aid to India last year.
SHOPPING
With the U.S. dollar worth C$1.40, U.S. shoppers are making a run for the border to hunt for bargains. The 40 per cent exchange rate makes shopping in Canada worthwhile to Americans, even after taxes and tunnel or bridge tolls. Clothing, china and giftware are particularly popular items as well as furs and crystal according to retailers. U.S shoppers also save on sales taxes as most stores ship directly to their U.S. customers and under the NAFTA, customers don't have to pay sales tax on those items.
TAXES
User fees imposed by all levels of government in Canada were estimated to bring in $23 billion last year. This is more than the amounts raised by the goods and services tax or corporate income taxes. User charges cover the costs of such things as food inspection, passports, maintaining camp-sites, ice breaking and providing regulatory advice on merger proposals. At the federal level about 300 user charges raised nearly $4 billion in revenue. The Auditor General of Canada has raised questions about the government's increasing reliance on user fees.
OTHER FEES
Circuit City Stores have imposed a 15 per cent "restocking fee" on non-defective personal computers returned within 14 days. Electronics retailers are getting fed up with students who "borrow" laptops, returning them for a refund after term papers are done.
PRIZES
According to the Chronicle, seeking to boost the reputation of its city, the Houston Image Group spent $500,000 to place an ad in Time featuring scratch-and-win cards that awarded free trips to Houston for up to 33 lucky readers. Only one prize was claimed, and only 900 entries were submitted for a "second chance" drawing. Typically, says an industry observer, a national lottery draws 100,000 to 200,000 second responses.
NAMES
Brad's Drink: The original name of Pepsi Cola, which celebrates its centenary this year.
Ludus pilae mensalis: The Latin phrase for table tennis, according to the Vatican.
WILLS
In 1948, a prairie farmer used his pen knife to scratch a valid will on the fender of his tractor. He was trapped under the vehicle for 10 hours and died two days later in hospital. The farmer wrote: "In case I die in this mess, I leave all to the wife." In 1996, the fender was rescued from a courthouse and donated to the law library at the University of Saskatchewan.
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
There are newsletters dedicated to collecting points, Internet sites that offer advice and even a company that sells insurance to protect them. When American Airlines started the first of the reward programs in 1981, it attracted 1.8 million participants. It is estimated that 52 million people in North America are now enrolled in points programs, and the number is growing at 11 per cent a year with 6.2 per cent of all flights on the continent taken free. The big rise in the pursuit of points now stems from the fact that consumers can collect points and redeem them without leaving the ground. 40 per cent of points are now earned in transactions through the use of credit cards, the familiar Air Miles card and even through phone companies.
SKILLS
The Conference Board warns that Canada has not produced, attracted or retained enough skilled workers to sustain growth in high technology, one of the biggest and fastest-growing industries. Too many of the nation's skilled technologists are being lured to the U.S. to fill some of the 190,000 high-tech jobs now vacant there. They are attracted by innovative U.S. companies offering the kind of work environments that appeal to young, mobile people. Conversely, the comparatively low value of the dollar and high personal tax rates are additional incentives for Canadians looking south of the border.
TOURISM
A study by the World Tourism Authority estimates that the worldwide tourist industry will expand so fast between now and 2020 that it will not only be the world's biggest industry but it will be the largest by far that the world has ever seen.
SHORTAGES
Anyone thinking about China's 1.2 billion consumer market should think about hair, or scrap metal or leather. Of all the consumer products made and sold in China, these make up the very short list of items that the country's ministry of internal trade says are in short supply. China is a major manufacturer of wigs made from human and synthetic hair. Four types of leather and fur are in short supply, used for making coats and five types of scrap metal, including aluminum and copper.
EUROPE
A Price Waterhouse study suggests that Canadian companies with subsidiaries, debt or private placements within the European Union should prepare a strategy for the arrival of the European Economic and Monetary Union which starts January 1, 1999. It states that Canadian firms have underestimated how the European landscape will change. Debt outstanding at July 1, 2002 will have to be redenominated and companies may need to renegotiate, sign new documentation and establish new payment arrangements. Contracts in European currencies will have to be converted into the new one.
CAREERS
The U.S. occupation with the biggest projected job growth is cashier. The Bureau of Labour Statistics says 530,000 cashier jobs will be created by 2006, a 17 per cent increase from the current 3.1 million. Other growth areas: systems analysts, general managers and registered nurses.
CHEMICALS
Turmoil in the Asian financial markets is hastening a downturn in the chemicals business worldwide as prices tumble. Nearly one-third of U.S. chemicals exports go to the Asia-Pacific region. Chemical companies in the U.S., Japan and Europe are struggling with their heavy investments in Asia, especially in Thailand, Indonesia and South Korea. Many large U.S. companies are curbing production to forestall inventory buildups in the U.S. Some chemicals, such as polypropylene, are selling at half the price of a year ago. Estimates are pegging 1998 as a terrible year, with 1999 and 2000 even worse for the industry.
PHARMACEUTICALS
The European Union is challenging Canada's drug patent legislation before the World Trade Organization, arguing that it reduces protection to 19 1\2 years. This could force Canada to change the way it treats generic drug companies. The Patent Act gives brand-name drug companies a 20-year patent protection. But during those 20 years, generic drug companies are allowed to develop and test copies of the brand-name products and six months before the 20 year patent expiry, actually begin producing and stockpiling generic products ready for the market. About half of Canada's pharmaceutical market is dominated by European firms and sales in Canada are worth over $5 billion annually.
INFORMATION
A generation of "dataholics" is on the rise, with more than half of all business people saying they crave information, especially from computers and the Internet. A Reuters study of 1,000 international business people said 53 per cent admitted to craving information and 54 per cent claimed to get a "high" when they find what they want in an electronic search. At the same time, they often feel overwhelmed by all the information at their disposal and worry that their children are turning into info junkies. 46 per cent of those surveyed said their children already prefer computers to their peers.
WEB SITE
A new site contains tips for female entrepreneurs. The Online Woman's Business Centre (www.onlinewbc.org) covers topics such as marketing, finance, technology and networking. Although the site is sponsored by the U.S. government's Small Business Administration, much of the information is useful to Canadians.
BANKS
According to the Canadian Bankers Association, Canada's seven biggest banks have more than 722,000 small and medium-sized business clients, defined as those with credit authorizations of less than $1 million. The average amount of credit outstanding for this group is $64,000. Since the second quarter of 1996, the number of these customers has increased by 3.2 per cent.
WINE
France spends more on wine than any other country. The French spent $14.1 billion in 1996 equivalent to $242 a head. Although America's wine market, worth $10.5 billion, is the second biggest, this works out at a mere $40 each. Austrians are just behind the French, buying $240 a head. Wine sales in Britain, where beer once ruled, are already the third-highest in the world, and still growing at over 10 per cent a year. Russia and Poland are likely to remain the fastest growing markets as incomes rise and people develop western spending habits. The Japanese spend only $4.50, barely enough for a bottle each.
CARGO
Some German enthusiasts are designing a helium-filled blimp that could revolutionize the global heavy-haulage business. Their CargoLifter 160, a 246 metre long, 61 metre wide blimp would be able to hoist heavy, bulky objects such as 160-ton turbines or an empty Boeing 747, wings and all, 10 times faster and an average 20 per cent less expensively. The CargoLifter's cargo bay would hold 395 cubic metres. An even bigger airship still on the drawing boards would haul as much as 450 tons. Such unprecedented carrying capacity could lead to changes not only in the way that companies deliver things, but in the way they design and build them too. Airships appear to be on a comeback, helped in part by the U.S. governments 1996 decision to sell off its strategic helium reserves.
ASIA
Some Asian governments are sending a stern message to their citizens: Stay home. They are raising passport fees and other international travel costs, and even openly admonishing people not to go abroad, as part of efforts to protect their foreign-currency reserves. Malaysia has more than doubled the cost of passports and there is now a travel freeze for government officials. Thailand is considering raising international airport taxes and imposing an exit tax. In South Korea, the government is essentially shaming citizens into not travelling overseas. Flight attendants were recently shown on television at Kimpo Airport with signs urging people not to travel.
LICENSING
According to Fortune magazine, the National Basketball Association of the 1990s has emerged as a truly global sports league. NBA games are televised from Santiago to Seoul and last year the league and its partners sold almost $500 million (U.S.) worth of licensed products. Even in countries such as Mongolia, Namibia and Kuwait where it does no other business, it licenses TV rights to local broadcasters.
INDIA
The results of the biggest tax amnesty in India were recently announced. Film producers, sports stars and thousands of businessmen hid their faces from the press as they visited their local tax offices to declare illicit gains. They came in limousines, some with bodyguards and suitcases of money, others with sachets of jewels, all hoping for peace in the new tax year. They declared a massive $13 billion in illicit gains, hidden in jewels, gold and silver, bogus land deeds and false bank accounts. The 466,000 Indians that came forward paid a staggering $4 billion in taxes to the government, a windfall that was greater than all foreign aid to India last year.
SHOPPING
With the U.S. dollar worth C$1.40, U.S. shoppers are making a run for the border to hunt for bargains. The 40 per cent exchange rate makes shopping in Canada worthwhile to Americans, even after taxes and tunnel or bridge tolls. Clothing, china and giftware are particularly popular items as well as furs and crystal according to retailers. U.S shoppers also save on sales taxes as most stores ship directly to their U.S. customers and under the NAFTA, customers don't have to pay sales tax on those items.
TAXES
User fees imposed by all levels of government in Canada were estimated to bring in $23 billion last year. This is more than the amounts raised by the goods and services tax or corporate income taxes. User charges cover the costs of such things as food inspection, passports, maintaining camp-sites, ice breaking and providing regulatory advice on merger proposals. At the federal level about 300 user charges raised nearly $4 billion in revenue. The Auditor General of Canada has raised questions about the government's increasing reliance on user fees.
OTHER FEES
Circuit City Stores have imposed a 15 per cent "restocking fee" on non-defective personal computers returned within 14 days. Electronics retailers are getting fed up with students who "borrow" laptops, returning them for a refund after term papers are done.
PRIZES
According to the Chronicle, seeking to boost the reputation of its city, the Houston Image Group spent $500,000 to place an ad in Time featuring scratch-and-win cards that awarded free trips to Houston for up to 33 lucky readers. Only one prize was claimed, and only 900 entries were submitted for a "second chance" drawing. Typically, says an industry observer, a national lottery draws 100,000 to 200,000 second responses.
NAMES
Brad's Drink: The original name of Pepsi Cola, which celebrates its centenary this year.
Ludus pilae mensalis: The Latin phrase for table tennis, according to the Vatican.
WILLS
In 1948, a prairie farmer used his pen knife to scratch a valid will on the fender of his tractor. He was trapped under the vehicle for 10 hours and died two days later in hospital. The farmer wrote: "In case I die in this mess, I leave all to the wife." In 1996, the fender was rescued from a courthouse and donated to the law library at the University of Saskatchewan.
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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