APRIL 1994 Edition
HIRING
Canadian companies are in more of a hiring mood than
their U.S. counterparts this year according to a joint survey by the Canadian
and U.S. Purchasing Management Associations. About one-fifth of Canadian
companies canvassed said they would add employees this year while two-fifths
said they would continue to trim workers. Only a 10th of the U.S. companies
said they planned to add workers, while three-quarters expected further
downsizing. The survey represented the views of 39 Canadian and 59 U.S.
purchasing executives for companies that buy about $140-billion (U.S.) worth of
goods a year. Executives in both countries listed global competition and
productivity as the top concerns facing their companies, followed by
environmental regulation and training. Asked about the NAFTA, U.S. purchasers
said their companies expect to benefit more from dealing with Mexico than with
Canada. About 45 per cent said they would buy more raw materials and finished
goods from Mexico, but only 15 per cent anticipated higher purchases from
Canada.
WINE
Weeding out poor grapevines has paid off for Okanagan
wineries and growers. Less than five years ago, the end of government subsidies
under new global trade rules forced a huge pullout. Now there are 26 B.C.
wineries instead of 12 and there are projections for 50 by the year 2000. The
Ontario government has signed bilateral
agreements with British Columbia to remove existing inter-provincial barriers
on wine, spirits, spirit coolers and ciders which will give these products
increased market access and allow consumers in both provinces the ability to
choose from a wider selection of products.
CROSS BORDER TRIPS
Same-day trips by Canadians to the U.S. totalled a
seasonally adjusted, 3,441,000 in January, down 10.4 per cent from 3,842,000 in
December, the largest month-to-month decline in such trips in more than a
decade. The January figure was the lowest for any month since April 1989.
Same-day trips reflect the level of cross-border shopping excursions and the
downward trend has mirrored the fall in value of the Canadian dollar. Car trips
of one or more nights also continued to decline in January, dropping 4.9 per
cent.
THE BAY
Despite increased competition in the Canadian retail
market, the Hudson's Bay Co. posted record profits in 1993. With 92 Bay stores
and 290 Zellers stores, Hudson's Bay had sales of $5.15 billion in 1993.
Canada's oldest retailer has now unveiled plans for a new push into China and
other parts of the cash-rich Asian market, which they describe as being the
largest untapped retail distribution opportunity in the world. This may be
accomplished through a joint venture company or by incorporating a new company
in Asia though a number of large, Asian based organizations have expressed
interest in joining the Bay which is recognized throughout Asia where it has
been a buyer since the early 1970s. The company plans to establish hybrids of
its Bay and Zellers stores in downtown areas and its Zellers discount chain in
suburban locations. Store clerks will be indigenous while key positions will be
staffed by Canadians.
MANUFACTURING
Canada came sixth in overall quality when 20,000
consumers in 20 countries were asked to rank the manufactured goods of 12
nations. Japan had the highest ranking with 38.5 per cent of respondents rating
its goods as either "excellent" or "very good." In
comparison, 18.3 per cent rated Canada's goods as top quality. After Japan,
Germany ranked second followed by the U.S., Britain and France. The
manufactured products of Canada were rated highest--"excellent" or
"very good"--by Canada (52 per cent), Hungary (36 per cent), and the
U.S. (33 per cent), and lowest by Taiwan (4 per cent), Italy (5 per cent) and
the Dominican Republic (8 per cent). Canadians gave goods from Japan (47 per
cent), and Germany (42 per cent) the highest ratings after Canadian goods. The
lowest ratings went to products from Russia, Mexico and Spain.
TRUCKING
Moving freight is always a good barometer of how the
economy is doing. One major Ontario company will hire at least 140 drivers this
year and is buying 195 highway tractors and 360 trailers. Seventy-five of the
trucks will be operated by pairs of drivers so they can be used round the clock
on long haul routes. Each truck will be equipped with satellite communications
equipment so the company can reach drivers any time, day or night, and divert
them to new customers. The company is experiencing dramatic growth--33 per cent
in the Canadian operations and 30 per cent in the American--because of booming
Canadian exports and free trade. Business is increasing because the Canadian
economy is picking up and fewer U.S. trucks are coming to Canada because they
are busy at home.
GATT AGRI-FOOD
Exporters looking for information on the General
Agreement on Tariffs and Trade (GATT) and the Canadian agri-food industry can
now turn to a 1-800 number for help. Through the toll-free line, set up by
Agriculture and Agri-Food Canada, callers can have their questions answered and
access fact sheets on GATT and its impact on agriculture. The toll-free line,
1-800-668-1266, is available Monday to Friday from 7am to 8pm (EST).
OTTAWA
The federal government has launched a plan to make it
easier for Canadian companies to gain a toehold in international markets.
Ottawa spends more than $500 million a year on trade development which involves
18 government departments and agencies. By co-ordinating efforts between
different levels of government and making information more accessible and
eliminating duplication, Ottawa hopes more companies will be able to make sales
in markets opened through the completion of the NAFTA and the GATT. The
business plan includes a strategic overview that lists 1,300 international
events, such as trade shows, which support export development activities. In
the past, there have been times when two levels of government were
simultaneously mounting trade shows aimed at the same market. About 60 per cent
of all Canadian exports are made by just 100 firms, and less than 8 per cent of
Canadian businesses are involved in selling outside the country.
CASCADIA
In a recent economic analysis, the B.C. Credit Union has
come out in favour of Cascadia as a trading bloc. Cascadia encompasses Alaska,
British Columbia, Washington and Oregon. For governments, this will mean
on-going and directed co-operation among state and provincial governments and
requires the continued development of the regional infrastructure. According to
the U.S. Department of Commerce and Statistics Canada, Cascadia's Gross
Domestic Product share by member is: Washington, 39 per cent, B.C., 31 per
cent, Oregon, 22 per cent and Alaska, 8 per cent. The population share is:
Washington, 43 per cent,
B.C., 27 per cent, Oregon, 25 per cent and Alaska 5 per cent.
A major Cascadia
advantage lies in its international makeup which gives the region access to the
benefits provided by the strengths and national characteristics of both
countries.
British Columbia and, in particular Vancouver, also
brings a secure and international financial system to Cascadia. Vancouver
already has legislation in place making it an international financial centre.
And NAFTA ensures Canadian access to the soon-to-be-reformed U.S. banking system,
and America's unequalled capital markets. This may give Vancouver the inside
track to become the international banking centre on the West Coast, a
position which by most accounts remains unfilled.
ADVICE
The Toronto-Dominion Bank has announced a plan which will
give small businesses facing financial ruin last ditch advice from an advisory
panel. It will be based on a mediation process aimed at keeping a company
alive. The process, which starts in April, will be open to customers who have
loans under $250,000, who can't meet their payments and who may well be on the
verge of bankruptcy. The mediation panel will have three members, one chosen by
the customer, one by the bank and a third selected jointly from a list of
independent mediators. The panel could decide, for example, that the bank
restructure the company's loan to give it more breathing room, or suggest that
the business cut employees. The recommendations are not binding. More than 90
per cent of the bank's business customers have lines of credit under $250,000.
CALIFORNIA
California has a larger economy and population than
Canada and the San Francisco Bay area is the fourth-largest market in the U.S.
A strategic alliance with a North California firm could be an ideal way to gain
access to this huge market and some of the nation's most advanced technology.
With this in mind, the Investment Division at the Canadian Consulate General,
Los Angeles, in co-operation with the provinces of Quebec, Alberta and British
Columbia recently sponsored the latest in a series of business matchmakers in
Pleasanton (just southeast of Oakland) and Sacremento. The response by local
firms was encouraging resulting in 19 expressions of serious interest in
partnerships with Canadian firms. For further information, contact the Canadian
Consulate Trade office in San Francisco, Tel: (415) 543-2550, ext. 22 or Fax:
(415) 512-7671.
RETAIL
The super-charged supermarket competition in Atlanta is
about to heat up again as Winn-Dixie Stores Inc. gets ready to launch an
on-line computer ordering service this spring. Archrival Kroger Co. which quit
its own on-line service three years ago because of a lack of subscribers is
getting ready to try again. The Winn-Dixie version will enable customers who
are subscribers of the America Online computer network to electronically order
from a list of more than 10,000 products. Deliveries, including prescriptions
will be made Monday through Friday in the afternoon or evening for a $9.95 fee.
The service is being offered to give more supermarket shopping options to
professionals with little time, and housebound customers. And can Canada be far
behind?
TRAVELLING
Canadians spent $7.7 billion more travelling outside
Canada than visitors to Canada brought in according to StatsCan. But total
payments by Canadians travelling in Canada and visitors reached record levels
in 1993--bringing the travel deficit down from a total of $8.2 billion in 1992.
Total payments reached $16.4 billion, up 1.1 per cent from 1992. Spending by
Canadians in the U.S. decreased 3.5 per cent to $10.6 billion, while payments
from trips to all other countries increased 10.8 per cent to a record $5.8
billion. Visitors to Canada spent $8.7 billion--8 per cent more than in 1992.
The biggest increase came from Americans, who spent a record $5 billion, up 9.5
per cent.
AMTRAK
This U.S. rail corporation and the state of Washington
will shortly launch a test run of a luxury rail service in the Pacific
Northwest corridor and hopes to re-establish service between Seattle and
Vancouver by October providing Amtrak can get $560 million from the U.S.
Congress to offset service losses. The Burlington Northern Railroad has
allocated about $3 million to the project and has started to upgrade tracks
north of the border, while the state of Washington has assumed costs of track
work between Seattle and the border. Customs and Immigration details have yet
to be worked out but it is hoped travellers will use the train for one-day
business trips between Seattle and Vancouver. The service will offer
white-tablecloth dining, free newspapers and movies.
TRIVIA
In the U.S., legalized gambling is a $30 billion a year
business, twice as much as movies and TV combined.
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