SEPTEMBER 1994 Edition
IMMIGRANTS
Canadians swarmed into British Columbia last year. For
the ninth consecutive year, most of the movers were from Ontario and Alberta.
In fact, so many Canadians moved to B.C. that had it not been for new
immigrants, seven of the other nine provinces, including Quebec and Ontario,
would have dropped in population. Ontario and Quebec lost 14,000 and 8,500
respectively through interprovincial migration but gained 122,000 and 41,000
new immigrants. 79,000 moved into B.C. from other provinces and 39,000 left the
province for a net gain of 40,000 and 31,000 new immigrants arrived for a total
gain of over 71,000. Newfoundland, New Brunswick, Saskatchewan and Alberta
actually lost residents. B.C. also boasted the three most popular areas for
migrants from other provinces with Greater Vancouver gaining 18,512, the
Victoria area up 3,959 and Central Okanagan up 3,337.
QUEBEC
Quebec has confounded predictions and profited more from
the Canada-U.S. free trade agreement than the country as a whole. It was
anticipated that Quebec would fare worse under free trade because it has a
higher than average proportion in vulnerable economic sectors such as textiles
and fewer industries in high value goods.
A recent study (which does not include the impact of
NAFTA) shows that Quebec exports to the U.S. have surged since free trade came
into effect. Counting all products with lower tariffs under free trade,
Quebec's exports to the U.S. grew 43 per cent between 1988 and 1992 compared
with 36 per cent in the previous four year period. For Canada as a whole,
exports to the U.S. grew by 33 per cent after the agreement and 27 per cent
during the previous four years. In higher value goods alone, Quebec exports to
the U.S. climbed 90 per cent during the four years compared to 49 per cent for
Canada in total. The study also shows that as trade grew between Canada and the
U.S. after the free trade was signed, trade with other countries dropped.
GARDENING
According to Statscan, the garden industry has been
growing fast. Horticulture and nursery sales for 1993 reached $960 million,
nearly double the $491 million sales in 1986. Throughout the country, nearly 10
million square metres of greenhouses were under glass or plastic last year with
88 per cent of operators being in Quebec, Ontario and British Columbia.
Bedding plants brought big business with some 572 million
plants prepared for sale last year as well as 27 million potted geraniums which
are tallied in a different category. Some 75 million cut roses were produced in
Canada last year. The growth in this industry is achieved without government
subsidies or helped by import quotas and strong competition is now coming from
Mexico and South America.
BOEING
Given the number of Canadian companies sub-contracting to
Boeing, their sales figures are always of interest. Sales for the first half of
1994 totalled $11.7 billion with 149 airplanes delivered and 260 expected by
the end of the year. To the end of June, orders were placed for 53 airplanes
valued at about $9.3 billion giving a contractual backlog worth $71.2 billion.
Boeing has announced that it will invest $600 million in a plant in Xian, China
to build tail sections for its 737 jetliners and $100 million in Beijing for a
spare parts centre and training programs for pilots, cabin crew and maintenance
staff. The Canadian Consulate General in Seattle offers very specialized
assistance for Canadian companies seeking advice about Boeing contracts. For
more information, please call Ron Merrick, Boeing Liaison Officer at the
Consulate General at 206-443-1777.
EURO-FRAUD
The cost of fraud in the European Union may exceed $5
billion annually. Some examples: Vast heaps of wheat supposedly sitting in
Italy and Greece have rotted or disappeared, but EU taxpayers have paid $102
million for them in "intervention funds" which subsidize poor
Mediterranean farmers. Austrian milk powder, magically evading customs on its
way to Italy, cost taxpayers another $48 million. By pretending that 90 per
cent of their olive oil was high quality when it was not, Italians pocketed another
$40 million. Polish cattle taken to Italy for slaughter, then sent to Malta,
brought back to Italy then re-exported from the EU cost taxpayers another $24
million. Herding sheep back and forth between Northern Ireland and the Irish
Republic is a well known device for collecting EU subsidy premiums on ewes
twice over. Data processing equipment and training courses, paid for by the EU,
mainly for Portuguese and Italians, have cost $160 million but the courses have
never been taught and the equipment has never been seen. The cost of fraud in
just 30 new or recent cases adds up to $544 million.
WAL-MART IN MEXICO
When the first Wal-Mart store opened in Mexico City nine
months ago, all 72 cash registers rang constantly. On a recent Saturday, the
high point of the shopping week in Mexico, 51 of them were closed. The sales
slump is only one of the many problems besetting Wal-Mart in Mexico. In
addition, prices are so high that some Mexicans still cross the border to shop
in U.S. Wal-Marts.
Some analysts say retail outlets are growing far faster
in Mexico than the buying power of potential customers. Mexico's median annual
per capita income is still only $1,956. When Wal-mart opened a super centre--a
combination grocery and general merchandise store--in Monterray last year, it
had to bar the door to control crowds. The local press soon lambasted the
company for charging 15 to 20 per cent more than the Wal-Mart in Laredo, a
two-hour drive away to the north in Texas.
Wal-Mart say the higher prices in Monterray reflect
transportation costs from the U.S. and that many duties have not yet been
phased out. In many cases, profit margins have been reduced compared to the
U.S. Also, Wal-mart lacks the leverage with Mexican vendors that its size gives
it in the U.S. In addition, distribution systems are very different in Mexico, where thousands of suppliers ship
directly to stores rather than to retailer warehouses. Up north, Wal-Mart's
efficient control of distribution is largely credited for its low prices. Also,
analysts say that as most Mexicans do not own cars, it limits stores'
geographic reach. And most Mexicans, because of their shopping patterns and
limited incomes, own very small refrigerators and so can't easily store a
week's worth of groceries. Experts believe that Wal-Mart will eventually
succeed in Mexico, in the meantime, other U.S. retailers are watching their
problems with interest.
DUTY-FREE
A company has offered to pay $184 million for a six year
contract, starting in 1996, for duty-free space in the new terminal at
Vancouver International Airport, twice the cost of a new runway. The company
expects $500 million in sales over the period. If sales exceed projections, the
company will pay an additional percentage. Vancouver airport is the duty-free capital
of Canada, out-selling Toronto which has triple the air traffic. This is due to
big-spending Japanese tourists who buy expensive items on the West Coast before
returning home, and by increasing numbers of Taiwanese, Korean and Chinese.
International travellers now account for about 2 million out of a total of 9.5
million travellers and it is projected that this will jump to 2.8 million by
2000 and 4.5 million by 2010.
TOURISM
A unit of the Conference Board of Canada said the lower
Canadian dollar, compared with its U.S. counterpart, is keeping Canadians close
to home and drawing more foreigners to the country. U.S. visitors to Canada
increased 5 per cent for the first four months of the year, while travellers
from Japan increased 15 per cent and arrivals from France grew 21 per cent.
Canadians crossing the border dropped nearly 11 per cent in the first four
months. The total travel industry in Canada should grow about 4 per cent this
year.
In 1993, Canadians spent $5.5 billion on leisure travel
to the U.S. compared with the $4.3 billion they spent in Canada. This year
marks the third in a row that fewer Canadians will visit the U.S. which helps
Canada's balance of payments but not the U.S. travel industry. It is estimated
that in July and August alone, Canadians will spend about $200 million less in
the U.S., and for the whole year it could be down by as much as $2 billion.
U.S. EXPORT MARKETS
With the agonizing decision now made concerning granting
most-favoured-nation status to China, the U.S. Commerce Secretary will shortly
lead a high powered trade mission to China taking two dozen top business
executives. The trip will result in a framework agreement between the U.S. and
China and a number of specific agreements involving energy, transportation, finance
and information systems. According to the Commerce Department, there are more
than $1 trillion worth of infrastructure projects likely to be developed in
Asia over the next 10 years, almost one-third of which will be in China and
Hong Kong.
The United States has identified 10 large emerging
markets that will be of importance to its economy (which Canadian companies
would do well to bear in mind). Four are in Asia: China, Indonesia, South Korea
and India. Three are in Latin America: Argentina, Brazil and Mexico. Two in
Central Europe: Turkey and Poland, and South Africa.
GATT
According to a new federal government survey, a Canadian
family of four will see its annual income rise by at least $400 a year thanks
to the new global trading pact which comes into effect next year. The GATT
Agreement should see an extra $3 billion a year pumped into the economy. For
the average Canadian, that means a 0.4 per cent rise in income every year in
perpetuity once all the provisions of the deal are in place. The gains will
show up mainly in cheaper imported goods, better prices for Canadian goods on
world markets and cuts in agricultural subsidies. These projected gains are in
addition to the 2.5 per cent a year boost that free trade with the U.S. has
already given Canada, according to the Finance Department.
EXPORT CHALLENGES
In a recent survey by the Canadian Chamber of Commerce,
the major reason Canadian firms give for having trouble cracking export markets
is lack of contacts. Nearly half the respondents cited this reason. But results
vary with size. More than 60 per cent of firms with fewer than 20 employees
cited foreign contacts compared with only 33 per cent of firms with 500 workers
or more. But 54 per cent of the big companies mentioned adverse trade rules
compared with 17 per cent of small firms. Other reasons given were: Lack of
market knowledge 36%, Financing 33%, Transportation costs 32% and Customs
problems 15 per cent.
FREE TRADE
According to a U.S. Commerce report which released
figures for the pact's first six months, the NAFTA is proving to be an economic
boon to the United States, Mexico and Canada. U.S. exports to Mexico are at
record levels, rising 17 per cent for the first six months compared to the same
period a year ago. About $24.5 billion (U.S.) in U.S. goods were shipped to
Mexico. Exports to Canada hit $55.6 billion by June, up 10 per cent. Even as
U.S. exports increased, Americans were buying more Canadian and Mexican goods.
Imports from Mexico were up 21 per cent to $23.4 billion while exports from
Canada were up 10 per cent to $61.4 billion.
TECHNOLOGY
Nearly 300 small to midsize companies were recently asked to rate the effectiveness
of various technologies in improving customer service through expediting
orders, tracking sales and logging customer comments. The survey was based on
their satisfaction and usage levels. The highest rating, with 87%, went to the
fax\modem for order taking. Bar-coding to track orders and deliveries received
an 80% rating followed by 72% for an on-line computer system for order taking.
Posts
