AUGUST 1994 Edition
ABOUT OURSELVES
With this issue, we start the third year of our Economic
Digest. It began with a modest distribution of 75 and now reaches over 750 monthly. It goes to most Canadian provinces
and every State in the Union. One copy goes to Beijing. Information from it is translated
and published in the Trading Post, a Vancouver Chinese Newspaper with a 15,000
circulation. A shorter version is available downtown courtesy of B.C. Trade.
The Digest earns no revenue, in fact it costs us a
considerable amount over the course of a year. But we hope that we continue to
generate goodwill through this venture as we strive to show that we are
interested in all aspects of the economy, not just the area in which A & A
Contract Customs Brokers is specialist. It is our philosophy that if the
economy is doing well, then we all benefit, whatever our business.
We always have far more information left each month than
we are able to fit in the Digest. In the coming year we hope to expand the
sharing of this information utilizing the new technology. Using Faxback, we
would like to make single-page Digests available monthly on specific sectors
such as Retail, Manufacturing, EDI and USA\NAFTA. If readers have any
suggestions about areas you would like to see us cover, please call us at
538-1042, or Toll Free 1-800-663-4270.
INTERPROVINCIAL TRADE
The recent deal to reduce trade barriers between
provinces is less ambitious than hoped, but makes progress in key areas such as
procurement and investment. Governments will no longer be able to favour
provincial suppliers in tendering for goods worth more than $25,000 and for
services or construction projects over $100,000. The provisions will be
extended to municipalities, municipal organizations, school boards and publicly
funded academic, health and social institutions by June 1996. Governments spend
about $49 billion a year on goods and services.
Provinces will be prevented from using incentives such as
tax breaks, grants or debt guarantees to get businesses from another province
to relocate. Also, qualified workers will find it easier to work in another
province and provinces will recognize licensing and other work standards in
other provinces. Consumer health and safety standards cannot be used to
discriminate against out-of-province suppliers. A work plan is to be completed
by 1996 which will see common provincial standards for the trucking industry
such as truck weights and dimensions, safety rules and bills of cargo.
However, the agreement leaves in place barriers to
agriculture, energy and alcohol. Consumers will still pay too much for
electricity, milk and eggs and have less choice in wine and beer. Disputes will
be handled by a panel of experts. Decisions are not binding but will be made
public and the injured province will have the right to retaliate with measures
of "equivalent effect."
HEALTH CARE
Industry Canada has developed the Canadian Health Care
Services Suppliers (CHCSS) computerized data base in collaboration with Health
Canada. The CHCSS is being launched to enhance the Department's knowledge of
Canadian private sector supply capability and to facilitate the matching of
export opportunities with Canadian supply capability. The information in the
database will also be used to encourage the formation of industry alliances and
other partnerships for the pursuit of export opportunities.
Interested applicants complete a questionnaire and
profile sheet and return them, with company brochures, to Industry Canada.
Search capabilities are extensive and users will be able to search on the basis
of any fields (questions) contained in the questionnaire. To obtain a
questionnaire or more information, call Luc C. Pamerleau at Industry Canada,
Tel: 613-954-2951.
COMMUNICATIONS
Ford Motor Co. will spend $100 million (US) on a system
to link its dealers by satellite for employee training, customer service and
relay of business information. The system will allow instructors at Ford
headquarters to lead live video training sessions in its North American
dealerships. It eventually may give dealers instant access to comprehensive
information on individual customers who bring in their cars for repairs. Ford
will pay for installation of dishes at dealerships and equipment to send and
receive data and the dealers will provide televisions and a personal computer
to tie to the system.
VACATIONS
According to the Conference Board of Canada, fewer
Canadians plan vacation trips this year than in any of the previous seven
years. Only 59 per cent of those surveyed said they would take a trip this
summer, down from 68 per cent last year and 70 per cent in 1990. Despite an
improving economy, Canadians are still holding back on travel spending.
Instead, they are putting their money into cars, appliances and furniture.
THE FUTURE
A study of 2,500 U.S. facilities managers showed what
they expect workers will find in offices in ten years:
* Almost three-quarters
will have on-site fitness centres.
* About 40 per cent will
have day-care.
* 95 per cent will have
increased security.
* More than 76 per cent
will have voice mail.
* 16 per cent will have
individual temperature controls in workspaces.
PERMITS
The United States has recorded imports of 366,700 tonnes
more wheat and barley than Canada has officially exported during the first
eight months of the crop year. It represents about 16 per cent of legal exports
of more than 2.2 million tonnes. Record
sales into the U.S. market this year have touched off a trade feud between the
two countries, with promises of import restrictions unless Canada voluntarily
cuts back. Farmers are required to obtain export permits for any wheat or
barley heading south. The RCMP are looking into a variety of methods that may
have been used to get grain over the border including not stopping at Customs
and altering export permits.
ABSENTEEISM
Sickness-benefit programs in Sweden used to pay workers
100 per cent of their salary for their first 180 days of sickness, resulting in
the highest absentee rate in the Western world. (The average Swede missed 26
days of work per year and the problem was particularly acute on Mondays.) The
government addressed the problem by eliminating pay for the first day of sick
leave. Before this change, car-maker Volvo had to schedule 20 per cent more
workers than it needed to ensure a full production crew. After the change,
Volvo and other firms found absenteeism down by 25 per cent.
CAR BUYERS
On some of Detroit's high profile new car launches,
Canadians are getting much better prices--on a dollar exchange basis--than
American buyers. Canadian auto companies say this is because competition for
sales north of the border is much tougher these days. Canadians have less disposable
income to spend on new vehicles, taxes are higher, and the economic recovery is
slower. For example, a Ford Contour will sell south of the border for $14,655
(U.S.). Ford Canada's domestic price is $16,895 (Can). At the current rate of
exchange, the U.S. price converted to Canadian dollars would be more than
$20,000. Not surprisingly,
some Americans are trying to take advantage of their buying power in Canada but
domestic new car dealers are prohibited from selling to U.S. customers under
franchise agreements. The auto makers say there are other good reasons for
restricting such sales. One is that vehicles made for the U.S. and Canadian
markets are slightly different. Canadian cars, for example, must have daytime
running lights and metric speedometers and other gauges.
WOMEN
According to a survey of 5,000 managers by the British
Institute of Management, many managers believe "female" skills such
as teamworking, consensus management and negotiating will become more valuable
for businesses to succeed in the next century. Male bosses will have to learn
these skills or become obsolete. But surveys show British women are still far
behind in terms of pay and prospects for promotion. Only 9 per cent of managers
and three per cent of senior managers in British companies are women.
U.S. GOVERNMENT
PROCUREMENT
A new information kit is now available to Canadian
businesses and professional services wishing to sell to the $180 billion U.S.
federal government procurement market. "Selling to the U.S. Federal
Government: Non-defense Products and Services" consists of 23 fact sheets
providing a comprehensive introduction on how to do business with the U.S.
federal government. Produced by Foreign Affairs and International Trade in
conjunction with the Canadian Embassy in Washington D.C., it reflects new
opportunities available to Canadian suppliers under the NAFTA. The kit is
available free from International Trade's InfoCentre in Ottawa, Fax
613-996-9709. Quote publication code #159UA.
RETAIL
Another retail giant is planning to move north. Sportmart
Inc, is a fast-growing chain of sports goods superstores based in Illinois and
expects to open in Toronto early in 1995. This retailer was founded in 1971 and
has 45 superstores and 3,800 employees. Typically, each Sportsmart has a broad
and deep selection of name-brand products, with 65,000 items for sale. For
example, 600 types of running shoes, 100 kinds of tennis rackets and 70
varieties of sleeping bags. An average store is around 4,000 square metres and
sells no seconds or irregular merchandise. The company is also scouting for
real estate in Ottawa and Vancouver although it may run into problems in B.C.
where Sport Mart Discount Superstores Inc is an established Kamloops-based
chain with 12 outlets in B.C. and Alberta.
JOBS
Traditionally, B.C. employment growth is led by the
service sector with the goods-producing sector usually trailing. But job
statistics for June show that, year-to year, the goods sector moved to the
forefront in job creation. Over the year, the goods sector added 54,000 jobs
while the service sector produced 26,000. The change is attributed to growth in
wood related manufacturing and construction, both of which belong to the goods
sector. The number of jobs actually fell in some segments of the service
sector. For example, retail sales lost 23,000 jobs, public administration 6,000
and transportation 7,000. Between June 1993 and June 1994, B.C. created 80,000
new jobs, about 40 per cent of the Canadian total.
DEBT
Equity magazine calculates that if every province and
territory put in $442-million per month to retire the existing federal and
provincial debts, at the end of 100 years the debt will not be reduced by even
one cent.
ADVERTISING
Advertising to an international market can be tricky and
translations often have hilarious results. When KFC exported its "Finger
Lickin Good" slogan to China, it emerged as "Eat your Fingers
Off". Similarly, Pepsi didn't have much luck trying to get them to guzzle
their cola. "Come Alive With The Pepsi Generation" ended up as
"Pepsi Will Bring Your Ancestors Back From The Dead". Coors Beer lost
its fizz in Spain when their hip phrase "Turn It Loose" came out as
"Drink Coors and get Diarrhoea". When Otis Engineering took part in a
Moscow exhibition, "completion equipment" was translated as
"equipment for orgasms". And "Body by Fisher" boasted by
General Motors in Belgium came out as "Corpse by Fisher". In Spain,
when GM introduced the Nova they quickly discovered the word no and va mean
"doesn't go".
PAPERWORK
Citing budget constraints, the office of the Montana
governor has refused to issue paperwork proclaiming such events as National
Accordion Awareness Week. So far there has been no public outcry.
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