OCTOBER 1996 Edition
TAX BREAKS
The New Brunswick government is offering a sales tax
rebate of up to $250 to residents who buy a home computer by December 31. The
government wants as many people as possible, whether in urban or rural areas,
to have computers stating that access to computer networks can provide
residents with improved education, business, government and entertainment
services and make the province more competitive. The government estimates that
about 32 per cent, or 80,000, households in the province currently have a PC
and hopes the rebate program will add another 10,000.
TRUCKING
U.S. trucking firm J.B. Hunt Transport Service Inc. has
stunned the transport industry by announcing plans for onetime pay increases
averaging 33 per cent to take effect next February. The company said the move
is aimed at solving severe labour shortages. However, analysts are afraid it
may have more sweeping consequences for the U.S. economy such as higher
shipping costs for billions of dollars of consumer goods. Truckload carriers
now employ more than 300,000 drivers yet need 10 to 15 per cent more. Trucking
controls about 79 per cent of the $460 billion U.S. freight bill.
DINING OUT
The average Japanese consumer ate $2,000 (US) worth of
food away from home last year, making them the world's biggest fans of
restaurants and food outlets. Overall, they spent $263 billion on dining out
last year. Japanese diners spent more than twice as much as their nearest
rivals, the Americans, who consumed food worth $950 per capita away from home
while Europeans spent from $435 to $810 per capita eating out.
FORESTRY
An Industry Canada report states that the former Soviet
Union's vast softwood forests threaten the competitiveness of Canada's forest
products industry. Wood products exports from the Baltic States are already
eroding Canadian market share in the European market. In 1995, exports of
Canadian wood and pulp and paper totalled $41.2 billion. As many as 225,000
people work in the forests and mills across Canada and up to 675,000 other jobs
are indirectly supported by the industry. The report said fast-growing forest
plantations in Chile, New Zealand and Australia are also a threat.
GAS STATIONS
Canada's major oil companies are cutting back on
giveaways such as mugs, glassware and books and concentrating on enticing
motorists with diversified gasoline stations which put neighbourhood
convenience stores to shame. Gas stations have been bruised after battling
retail chains which specialize in oil changes, tune-ups and other services.
Industry observers say the new focus on convenience stores and fast food outlets
represents a widespread retreat from automotive service and speculate that a
typical gas station of the future might sell only oil and windshield fluid in
addition to gasoline, with only a few providing car repairs.
LABOUR COSTS
Unit labour costs measure the total cost of labour
required to produce one unit of output. They are driven up by inflation and
downward by gains in labour productivity. In most industrialized countries,
labour costs have been growing slowly over the past five years. The average annual
increase in labour costs in selected countries was lower during the 1990-95
period than during 1985-90. The biggest change was in Sweden where costs rose
at an annual rate of 6.6 per cent while unit costs in
Canada and the U.S. rose
only 0.3 per cent.
U.S. EXPORTERS
A recent Coopers & Lybrand study of 434
fastest-growing U.S. companies showed a 31.2 per cent sales increase for 204
that were exporting, compared with 24.9 per cent for the nonexporters. A
similar survey three years ago revealed a much smaller growth gap: 26.4 per
cent for exporters versus 22.5 per cent for those staying domestic. The
exporters said they expect their sales outside the U.S. to zoom 66 per cent
this year. Not all exporters are manufacturers. Of companies surveyed that planned
to start exporting this year, more than half are service providers. The median
company reported 70 employees and annual sales of $7 million.
TECHNOLOGY
Scientists in Antarctica studying the world's environment
have been looking for a solution on how best to track penguins, a critical part
of their research. They are now using barcodes, similar to the ones used at
supermarket check-outs, glued to the beaks of the penguins. The equipment has
to work in temperatures as low as -73 C and an infrared reader be able to
detect the codes from great distances. While the concept works, biologists are
not finding the penguins very cooperative.
INTERPROVINCIAL TRADE
Trade among the provinces was almost as important to the
national economy as exports in the early 1990s. One in every six private-sector
jobs was linked to the production of goods and services sold across provincial
or territorial boundaries. Interprovincial trade accounted for $141 billion of
economic output, compared to $161 billion in exports abroad. B.C. had the
largest interprovincial trade deficit at $8 billion but was second only to
Alberta in its surplus in international trade.
VANCOUVER
The B.C-initiated International Maritime Centre (IMC) was
set up to take advantage of federal policy which exempts international shipping
companies from Canadian resident-corporation taxes. A recent benefit study
shows that since 1993, 21 companies which control more than 200 ships, have
established offices in Canada, 18 of them in Vancouver (10 of them from Hong
Kong). These offices employ around 350 persons with an approximate annual
payroll of $17 million. Business expenditures in Canada are about $30 million a
year.
SMALLTOWN U.S.A.
Commerce Department figures are showing a surprising
trend. Small, little-known towns are drawing in new factories and shattering
the myth that manufacturing is dying in the hinterlands. From 1989 to 1994,
rural counties gained 167,000 new manufacturing jobs, while urban counties lost
1,172,000 of them. The rural gains are all the more striking, coming as
manufacturers produce more goods with fewer workers. Small communities, where
land is cheaper, are luring manufacturers by offering tax breaks, low wages and
taxes and a reliable work force.
OPEN SKIES
Government is finding that economic growth and creating
jobs can be spurred by changing regulations rather than just writing cheques. A
case in point is the 18 month-old Open Skies air agreement between Canada and
the U.S. This piece of cross-border deregulation has been a jobs bonanza in
places such as Vancouver, Calgary, Ottawa and Montreal. The deal has spawned
more than 100 new scheduled service routes between Canada's largest 10 cities
and U.S. centres. Vancouver Airport is adding 1,000 jobs annually, paying on
average 33 per cent above the provincial industrial wage. Montreal has added
1,000 new jobs to service the 33 new routes across the border. Since 1995,
Calgary has doubled its number of direct connections to the U.S.
MINIATURIZATION
Japan has developed the "micro-car", a replica,
at one one-thousandth the size, of Toyota's first automobile. As tiny as a
grain of rice, the minuscule vehicle has 24 parts, including tires, wheels,
axles, headlights and taillights, and hubcaps that carry the company name in
microscopic letters. The motor, which itself is made of five parts, is only 0.7
millimetres in diameter and can propel the car at speeds of up to five
centimetres a second. Already the world's masters of miniaturization, Japanese
companies, backed by the government, are hoping to make complete machines the
size of insects with parts as small as specks of dust. Miniaturization is one
of the most promising industries of the future with the potential to
revolutionize fields like manufacturing and medicine.
COMPETITION
Massive change is facing drugstores where pharmacists
face competition from a range of rivals, including mail order companies,
supermarkets and department stores. The stakes are high as aging consumers
spend more on medication and heath-care aids as well as demanding more
information on available products. In a bid to counter this, Zellers Inc. of
Montreal, which runs pharmacies across the country, is about to offer
"good-heath clinics" covering such topics as asthma, diabetes,
depression, heart conditions and arthritis. The mobile clinics will tour the
country over the next year. At each site, a pharmacist and a registered nurse
will run the clinic. About 15,000 people visited Zellers stores over the summer
for pilot clinics on cholesterol and allergies.
FUEL EFFICIENCY
For years, auto makers have been looking for an engine
that uses little fuel, has low emissions and develops great horsepower. Now a
new generation of cars with fuel sipping engines but zippy acceleration are
about to hit showrooms. First out is Mitsubishi which introduced two new models
in Japan this summer. They have a clever new engine which borrows ideas from
diesel trucks and traditional lead burning engines. Compared with a
conventional engine of comparable size, Mitsubishi claims its new GDI (gasoline
direct injection) motor uses 35 per cent less fuel, produces 35 per cent less
carbon dioxide and 95 per cent less
nitrogen oxide and yet turns out 10 per cent more power.
ONLINE
U.S. computer users are spending an average of 12 hours a
month online, down from 16 hours last year suggesting that the rhetoric about
cyberspace being the next TV is a little premature.
CANADIAN TRADE
Canada's trade surplus retreated slightly in July but
continued to reflect a booming export sector that is expanding its presence in
two key markets--the United States and Japan. Statistics Canada reports that
exports exceeded imports by $3.07 billion. Canada's surplus with Japan almost
doubled, rising to $633 million and the balance with the U.S. edged up to $3.84
billion. However, Canada's deficit with all other countries grew to $1.4
billion. Much of the gain with the U.S. came from resurgent lumber shipments,
up nearly a third because of higher prices and a stronger U.S. housing market,
and robust exports of auto parts.
TRAVEL
Higher economic growth and lower unemployment should bode
well for the Canadian travel industry in 1997 according to the Conference Board
of Canada. They are forecasting pleasure travel within Canada will increase 3.2
per cent compared to 2.6 per cent for the economy. Domestic business trips
should increase by 3 per cent. It is expected that the number of Canadians
travelling to the U.S. will pick up in 1996 and 1997 after five years of
declining numbers. The outlook for U.S. and overseas travellers to Canada is
optimistic with British Columbia and Alberta the main beneficiaries.
SUPPLY AND DEMAND
In 1995, the number of law-school applicants in the U.S.
was down 16 per cent over 1991. There were about 896,000 attorneys in the
country--one for each 290 people.
EMOTIONS
Last month, at a symposium on the Riemann Hypothesis in
Seattle, mathematicians gave Atle Selberg a standing ovation for his brilliant
lecture on the history of prime-number theory. Such demonstrations of emotion
are rare among mathematicians.
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