NOVEMBER 1996 Edition
TRADE SURPLUS
Canada's exports grew by 2.7% in August, reaching a
record $23.2 billion. The gain reflected healthy vehicle exports and a rebound
in sales of grain and other agricultural products. Shipments to all trading
partners except Japan gained ground, but U.S.‑bound exports were strongest, due
mainly to automotive exports. Imports slackened after two months of steady
growth, dipping 2.7% to $19.1 billion. Weakness was widespread, but machinery, industrial
goods and auto parts played major roles. Imports from the United States and
European trading partners fell the most. Export strength and import slippage
resulted in the largest trade surplus on record ($4.0 billion).
FOOD PROCESSORS
Canadian food processing companies are mired in tough
competition at home and must buy out their rivals and look to foreign markets
to improve flagging profits. A survey by
Deloitte & Touche found that the pretax return on equity for Canadian food
processors fell to 12 per cent last year from 16 per cent in 1994. U.S.
processors, meanwhile, managed to increase their return to a record 36.2 per
cent from 34.2 per cent for the same period. U.S companies produced better
returns in part because of greater population density, which reduced
transportation costs, and less competition from grocers' private-label brands
than in Canada.
RRSP'S
Home buyers have cashed in nearly $4 billion in RRSP's to
take advantage of a federal tax incentive to boost the housing market. A study
from Canada Mortgage and Housing shows that more than 402,000 individuals and
families purchased homes because of the program set up in 1992 which allows
people to take up to $20,000 out of RRSP's tax free, to buy a home, as long as
it is repaid within 15 years. Over $3.8 billion have been removed from RRSP
accounts over the past four years. An estimated 65,000 are expected to use the
program this year. Almost two thirds of the activity occurred in the first two
years until Ottawa decided it would apply only to first-time buyers.
POPULATION
Canada's population reached 30 million late this summer
and should be 35 million by 2010. The population was 10 million in 1929, 20
million in 1966 and 25 million in 1982. Half the country's growth now comes
from immigration. Last year 215,000 immigrants came to Canada. The vast
majority settled in Ontario (55 per cent) or B.C. (21 per cent).
WOMEN
A study involving 6,403 questionnaires by the Foundation
for Future Leadership, found that women do a better job than men in 28 of 31
key management categories, including keeping productivity high and generating
ideas, but do poorly at handling frustration. It found that women have better
intuitive skills than men, and also outperform men in logic-based skills such
as meeting deadlines and problem solving.
MEN
A survey by the Food and Consumer Products Manufacturers
of Canada shows that men are doing far less grocery shopping than six years
ago, despite hints that the women's movement was turning out more male
shoppers. Men make up only 15 per cent of all grocery shoppers now, down from a
high of 21 per cent in 1991 and a little above the 13 per cent level of 1987.
This means that advertisers have not been far off the mark in stereotyping
women as the prime shopper who worries about which products to buy. The study
also found that men spend more on a per person basis when shopping, spending an
average of $45 a week while women spend $37 a week.
AFRICA
Companies need to know what the future high-growth
markets are. United Nations demographers say Africa is the only major region
that will gain a larger share of world population over the next 30 years. Its
portion should explode to nearly 20 per cent by 2025, from the current 13.5 per
cent. The continent is expected to rocket to a staggering 1.6 billion people from
750 million. Some countries and even regions, most of Europe for instance, are
expected to shrink as a result of declining family size and of rising death
rates in an aging population. And as Africa moves towards industrialization, it
will become an enormous market for the right goods and services.
COMPLAINTS
Companies can do more harm than good by soliciting
customer complaints when they have a poor system to handle them. Hepworth &
Co, a consulting firm, surveyed more than 38,000 customers of 25 large Canadian
companies between 1994 and 1996 and found that it can be a dangerous approach
if it isn't accompanied by a good response system. Companies lose more business
by handling complaints badly than by never hearing them at all. The survey also
found that only one in four people who complained were satisfied with the
response they received.
PHONES
Once marketed mainly as a business tool,
cellular phones are now making their way into the average home. While 14.1% of
Canadian households have a cellular phone, the proportion jumps to 20.8% in
Alberta. Canadians love their telephones, whether regular and cellular.
Nationally, almost 4 in 10 households have three or more regular telephones. In
Alberta, 45.5% of households have three or more phones, the highest proportion
in the nation. This drops to 28.4% in New Brunswick, where the proportion is
the lowest.
OPPORTUNITY
The phone is ringing at the town office in Swan Hills,
Alberta, including a call from Sweden. Officials are so desperate for business
they have started to give away land. They plan to disburse 28 fully serviced
lots. The community of 2,300 is 170 kilometres north of Edmonton and is best
known as the home of a hazardous waste treatment centre. The town wishes to
attract more business to diversify its economy.
COSTS
Toronto, Vancouver and Montreal are the most expensive
Canadian cities in which to live. According to Runzheimer Canada, a relocation
company, a family of four in Toronto would have to spend $87,400 annually to
sustain a lifestyle that would cost only $74,000 in Edmonton and Saint John. It
would cost $86,800 in Vancouver and $83,400 in Montreal. (The median cost in
all Canadian cities is $75,000.) The hypothetical lifestyle includes a
2,000-square-foot, eight-room house in a suburban area and two cars, one a 1996
model.
ROBOTICS
Artificial workers are making a comeback. After peaking
at almost 81,000 units in 1990, worldwide sales of industrial robots fell to
just over 56,000 in 1993. Last year however, sales surged by 26 per cent to
75,500 units and are expected to grow by 15 per cent for the rest of the 1990s.
Japan is still the biggest user of industrial robots buying 36,500 last year,
almost half of the world's total. The U.S., Britain, France, Germany and Italy
invested in another 23,000 robots between them.
TAIWAN
An affluent country about the size of Vancouver Island,
but with a population of over 21 million potential consumers with a per capita
income of US$13,500, Taiwan has experienced an 8 per cent economic growth rate
for the past 30 years and is Canada's eighth‑largest export market. It is also
one that offers increasing opportunities, particularly for those committed to
the long term. Two‑way trade in 1995 totalled almost $5 billion. Canadian
exports to Taiwan that year were valued at $2.2 billion, an increase of 40 per
cent over 1994. While some of this trade consisted of traditional Canadian
exports, there has been diversification. In little more than a year, some 20 to
25 new Canadian products have been introduced into Taiwan.
TECHNOLOGY
It used to be that an auction for 13,200 cattle was a
noisy affair. But at the Highwood Auction Company in Alberta where $10 million
worth of cattle recently changed hands, the only sound that could be heard
above the auctioneer's patter was the ring of cell phones. This event was part
of an emerging trend called a satellite cattle auction. The heifers, steers and
calves had been videotaped earlier on their home ranches. The videotape was
then broadcast over the Anik E1 satellite on Channel 20 starting at 6.00pm
sharp and the catalogue sent over the Internet. It is expected that 150,000
cattle will be sold in Canada via satellite this year
FREER TRADE
Leaders of the 12 member states of the Southern Africa
Development Community have agreed to a trade protocol which commits them to
establishing a free-trade area within eight years. This marks the first time
that South Africa has signed a multilateral trade agreement with a number of
countries that were opposed to its former apartheid regime.
BANANAS
For fifteen years the Canadian International Development
Research Centre (IDRC), has been funding research in Honduras into a better
banana. They are hoping to create a variety without the disease problems of the
familiar Cavendish banana sold everywhere which suffers from a black fungus
when growing. Called the Mona Lisa, the IDRC first presented the stubby little
banana to the public in 1994. Trouble was, it was in the developmental stage
and no one was actually marketing it. Test batches have recently been sold in
Ottawa and it is hoped they will be available across Canada next year.
POST-INDUSTRIALIZATION
According to John Kettle, a consulting futurist, it has
been half a century since Canada was an industrialized nation--that is, one
whose economy is driven and dominated by manufacturing, construction and
non-renewable resources. The peak was in 1953 when 40 per cent of our GDP was
derived from industry. The figure is now down to about 28 per cent and
dropping, likely to follow agriculture which now accounts for just 4 per cent
of GDP. We are now in a post-industrial, service-oriented phase, Kettle
suggests, which implies that, at some point, we will import almost all our
goods as other countries are able to manufacture everything better and cheaper.
PARODY
Two Liberal MP's have introduced a private member's bill
in the House of Commons parodying the U.S. Helms-Burton act which allows
foreign businesses to be sued if they are using land confiscated after the 1969
Cuban revolution. The bill would allow Canadians who lost property in the
American Revolution to do the same. The sponsors insist the bill is no joke
citing the descendants of James Osborne, a captain in the British army. Under
the Canadian bill, they would have claim to 500 acres in Washington, including
the land underneath the White House. Private bills rarely pass!
PROFITS
The world's biggest companies fattened their profits by
nearly 15 per cent in 1995, and did it with roughly the same number of workers
as they had in 1994, Fortune magazine reports. The U.S. was home to the largest
number of the 500 biggest companies with 153, followed by Japan with 141,
France with 42, Germany with 40 and Britain with 32. The most profitable
industries included airlines, brokerages enriched by booming markets and paper
companies that commanded premium prices. The collective profits of the 500
totalled $323.3 billion (U.S.), an increase of 14.7 per cent. But the number of
workers the companies employed rose only 1.8 per cent to 35.12 million, with
some companies slashing jobs.
DUMB
The FBI estimates that 45 bank robbers are caught each
year in the U.S. after writing their holdup notes on the back of their
personalized deposit slips.
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