AUGUST 1995 Economic Digest - Importing and Exporting

AUGUST 1995  Edition

DUMPING

            A study conducted by the U.S. International Trade Commission has concluded that when the U.S government slaps anti-dumping duties on products from trading partners it causes heavy losses in other sectors of the U.S. economy. The anti-dumping duties bring about higher costs in the rest of the economy because other companies which use that protected sectors' products pay higher prices. The study found that these costs outweigh the benefits. If the U.S. had scrapped its anti-dumping tariffs in 1991, the domestic economy would have enjoyed a net gain of $1.59 billion in that year alone.

ARMS SALES

            Canadian exports of military goods--including firearms, vehicles, aircraft, parts and equipment--jumped 48 per cent in 1994 over 1993 and were worth half a billion dollars. The biggest single customer, apart from the United States, was Saudi Arabia which bought $280 million worth of goods. Shipments to the U.S. don't require special permits and are not included in these figures. A quarter of all exports went to NATO countries. Exports improved because of the shifting Canadian dollar and improved economies abroad.

TECHNOPHOBIA

            According to Forbes, the first management conference was called in 1882 by the German post office. The topic, and only chief executives were invited, was how not to be afraid of the telephone. Nobody showed up. Apparently the invitees were insulted believing that the idea that they should use the telephone was unthinkable.

POETRY

            Some of the world's largest companies are turning to verse in their quest for success in the 21st century according to The Sunday Times. David Whyte, a British poet, has been hired by such companies as Boeing, AT&T and Arthur Anderson. Three days a month for a year, for instance, he reads poems to top Boeing executives. Asked to name the manager most affected by his verse, Whyte named one at AT&T. He grew so excited by Whyte's message he realized his existence at AT&T was meaningless. So he left!

HEALTH

            A study of 30,000 Americans aged 65 and over shows that, in the past decade, they have suffered fewer illnesses. According to Duke University research, good health care and habits seem to be bearing fruit. The rate of illness fell by 11 per cent between 1982 and 1989--from 2.5 medical conditions per person to 2.3. Eleven diseases showed a decline; they included arthritis, circulatory disease and emphysema. There was no significant change in rates of cancer, heart attacks or diabetes.  

TRANSFER PRICING

            The Canadian and U.S. governments are investigating more multinational companies for their transfer pricing practices. A study commissioned by Ernst & Young of 200 multinationals in Australia, France, Germany, Britain, the Netherlands, the U.S and including 25 in Canada, found that Ottawa and Washington are stepping up their enforcement power in a bid to prevent erosion of tax revenues. Transfer pricing is the price charged within a multinational corporation for goods and services shipped between the parent company and its affiliates. Of the Canadian respondents, nearly 90 per cent have been questioned about their practices by Revenue Canada; 82 per cent see transfer pricing as a major international tax issue and 48 per cent see the issue as the number one tax issue facing their company.  

ADVERTISING

            In Romania, which has yet to develop a consumer society, the advertising business is unconventional. For instance, advertising companies sometimes remove rivals' billboards or possess their own media outlets. In 1993, a local agency called Rom-KU arranged a deal under which R.J. Reynolds agreed to supply the Bucharest mayor's office with light bulbs for the city's traffic lights for a year. In return, the yellow lights carried the logo of the firm's Camel cigarette brand. The deal has expired but some Camel lights remain.

FORTUNE 500

            Four Japanese companies have knocked General Motors from top spot in Fortune magazine's ranking of companies around the world. The biggest is now Mitsubishi Corp posting $176 billion (US) in annual sales, more than AT & T, du Pont, City Corp and Procter & Gamble combined. Second was Mitsui & Co followed by the Itochu and Sumitomo Corporations. All of them are trading companies built by exporting the goods of industrial postwar Japan. GM, which topped last year's list was fifth despite a 17 per cent increase in revenue. However, Japan fell behind the U.S., ranking second as the home base for the world's biggest companies, with 149 of the 500. The U.S had 151 companies on the list.

BOOKS

            According to Statistics Canada, the big growth for Canadian book publishers in the past five years has been outside the country. Book exports tripled to $115.6 million in 1993-94 from $38.6 million in 1989-90. In comparison, the domestic market was sluggish, with total 1993-94 book sales of $1.29 billion, up only slightly from $1.2 billion four years before. Respondents to Statscan's annual survey attributed the export boom to two factors: publishers working harder abroad to compensate for flat sales at home, and government trade initiatives beginning to pay off. Canadian libraries are buying far fewer books while bookstore chains are buying far more.

CONTENTMENT

            Canadians are among the most satisfied people in the world, a Gallop Poll of 18 countries has found. They are more satisfied about personal health, finances, housing, education and material possessions than those surveyed in the U.S., Britain, Germany, France, China, Chile and Mexico. The least satisfied were in Mexico and Hungary. Canadians like the way their democracy works (62 per cent) and are content with their personal lives (86 per cent). However, 46 per cent believe their world is worse than their parents' and believe their children's world will be even worse.

WINE

            Canadian wines were selected as among the best in the world at the third Vinexpo Bordeaux wine fair, the wine industry's largest trade exhibition, winning 17 of the top awards. Canadian wineries were awarded six gold medals, seven silver and four bronze, more than twice as many awards as Canada won last year. More than 40 countries attended the fair with 2,000 different exhibitors, attracting 50,000 wine professionals. Some 4,000 different wines were judged at the fair. Twenty wine producers from Canada were represented at the show with most from Ontario and four from B.C.

PRESCRIPTIONS

            A busload of seniors from Minnesota recently travelled to Winnipeg, Manitoba, lining up to see a doctor at the Lincoln Walk-In Medical Centre and to buy prescription drugs they say are much cheaper in Canada than in the United States. The seniors' U.S. drug prescriptions were co-signed by the Manitoba doctor and taken to a local pharmacy to be filled, A member of the Minnesota Seniors Federation stated that they were taking matters into their own hands and visiting Canada to find drug prices that are reasonable. The seniors' association, pushing for stricter U.S. control on drug prices, claims that some brand-name medicines are six times cheaper in Canada, Manitoba pharmacists say they have noticed a trickle of American drug shoppers taking advantage of Canada's relatively cheaper dollar and generally lower drug prices. 

CANADA

            The Public Affairs Division and International Business Development Section of the Canadian Embassy in Washington, D.C. have launched an Internet World Wide Web site. Located at http://www.nstn.ca/wshdc, the site makes available information on Canada and the Embassy.  Combining English and French text with photos and colour graphics, the site offers information on Canada-U.S. trade, as well as the many services offered by the Embassy. These include trade and investment promotion, international financial institution support, tourism development, and cultural and academic affairs. Interactivity with the public is possible--users may contact Embassy officials directly by electronic mail. The site can be explored using any of the common World Wide Web browser programs, including Netscape Navigator, Mosaic, and the text-based system Lynx.=20.

UNICEF

            Canada is a major donor to United Nations organizations. As a supplier to these organizations however, Canada is ranked by the UN as one of the "Underutilized Major Donor Countries." UNICEF is now the world's largest humanitarian assistance program and since the UN relocated its procurement program to Copenhagen, Denmark, the Canadian Embassy has been working with Ottawa to increase Canadian participation in UNICEF's global project requirements. Emergency relief represents 25 per cent of UNICEF's total purchasing. To bid on emergency relief tenders, it is essential that procurement officers are aware of the product's suitability and the reliability of the supplier. Vaccines and drugs represent 35 per cent of total procurement: 54 per cent when combined with vehicles, and water and sanitation equipment. More information is available from DFAIT in Ottawa by fax at (613) 943-1100.

ETHNIC FOODS

            Ethnic foods are increasingly popular in Canada and the growth is being driven by the country's changing ethnic mix, a general demand for variety by all consumers, and other factors. People of Chinese, South Asian and Middle European origin were among the five fastest growing ethnic groups from 1986 to 1991. The majority of these consumers live in Toronto, Montreal and Vancouver and their food spending patterns tend to differ from the Canadian average. The total market for Chinese food was estimated in 1993 at $2.8 billion. The other two markets were $228 million and $240 million respectively. Many ethnic foods and beverages are currently being imported but there maybe a potential to manufacture products in Canada for the local market and for export.       

TOURISM

            The tourism ministry has announced a $2 million Vacation BC program aimed at encouraging residents to explore their own province. While some in the international tourism industry now rank B.C. as one of the top 10 destinations in the world, the government feels residents take the province for granted or are not aware of all it has to offer. The domestic market remains the backbone of tourism contributing 54 per cent of overall revenues which were $3.24 billion last year. Research shows that by encouraging residents to take one more trip a year within B.C., spend $5 more per person per day, and stay half a day longer, it could boost revenues by $1 billion a year. Latest figures show that in the first quarter, 700,000 international visitors arrived in B.C. a 14 per cent increase over last year. Residents spend $4.9 billion annually out of the province.

ICED TEA

            Canadians drank $15.9 million worth of iced tea in the year ending April 1995, up 98 per cent from the year before. And in B.C. we got through $3.7 million worth, up 62 per cent over the last twelve months.

DRIVING

            Last month, police in Colebrook, N.H., followed a 1989 Ford Escort when they noticed it was being driven by a seven-year old. They questioned the boy after he parked the car and removed the keys from the ignition. He told the police he was going to be late for school. The boy owned a bicycle.

TRIVIA

            A self-esteem task force in Santa Clara, California, has been disbanded because members were not bothering to show up.

JULY 1995 Economic Digest - Importing and Exporting

JULY 1995 Editon

DUTIES

            From 13 June, allowances for residents returning to Canada were increased as follows:

* $20 exemption, available after a 24 hour absence, is increased to $50.

* $100 exemption for absences of at least 48 hours is doubled to $200.

* Seven-day exemption increases from $300 to $500 and the once a year restriction on the seven-day exemption is eliminated.

            Raising the exemption limits supports the objectives of the Canada-United States Accord on Our Shared Border, which aims to permit travellers to easily cross the Canada-U.S. border while freeing resources to better focus on anti-smuggling initiatives. These and other changes will allow Revenue Canada to focus more on processing commercial importations from the U.S. which have increased by 43 per cent since 1992.

CANADIAN TIRE

            In January we reported that Canadian Tire Corp, was pulling out of the U.S. for the second time and closing its 10 Auto Source stores. Now the company has announced major expansion plans for Canada. It expects to create 2,000 jobs in the next three years and open 240 new stores nationwide. Some "new-format" stores are already open. Though they specialize in home, sport, leisure and auto products, the wide aisles in the new stores are also stocked with tapes, videos, compact discs, footwear and clothing. In some stores, Canadian Tire has plans to introduce greenhouses and doughnut and coffee shops. There will be an additional 75 to 100 employees at each store compared with the regular ones to boost customer service.

ADVERTISING

            A recent survey suggests the best way to disseminate product information remains old-fashioned word of mouth, and it's a lot cheaper. A survey of 2,005 adults found that the majority, 67 per cent, relied most for product purchase information on talking to friends, family and colleagues. The next most popular source of information was newspapers followed by, in order of importance, flyers, magazine ads, TV commercials, radio and junk mail. So-called new media, such as ads on Internet, other on-line services and home shopping influenced only 5 per cent of respondents.

STEVIA

            This metre-high bush is native to Paraguay. Its leaves are 300 times sweeter than table sugar, easy to use and it will not break down during baking. It will last for decades on pantry shelves and is completely free of calories. These qualities and the promise of an all-natural, all-purpose sweetener, have made stevia a hot research-and-development item in Canada. It is now being bred and grown by Agriculture Canada in Southern Ontario. The object is to develop a hybrid stevia that will turn into a high-profit substitute crop for the region's increasingly beleaguered tobacco farmers. If the plant does not take in Ontario, there are places in Nova Scotia and B.C where it can be easily grown and the dried leaves are selling for $5 to $6 a kilogram. Since the 1970s, the Chinese have been cultivating the plant for the growing Japanese market which buys $200 million annually for use in food and drinks.

GAS PUMPS

            A federal document shows that 13 per cent of gasoline pumps tested across Canada last year did not meet government accuracy standards. The most mistake-prone pumps were in Atlantic Canada, where 20 per cent of those tested displayed the wrong volume. Ontario pumps scored best with an error rate of 9 per cent. The error rate was 19 per cent in Quebec, 13 per cent in the Prairies and 11 per cent in the Pacific region.

THE MARINES

            The U.S. Marine Corps' advanced concepts development unit has begun experimenting with Wal-Mart's computerized distribution techniques to enable field commanders to order supplies directly from offshore cargo ships. The military's fascination with the Wal-Mart chain came after military planners noticed that its stores seemed to stay well-stocked without huge "back-room" warehouses.

FERRIES

            Over the last 35 years the B.C. Ferries fleet has grown from two ships to 40, making it one of the largest and most sophisticated  ferry systems in the world. Last year the fleet carried more than 22 million passengers, a 3.9 per cent increase over 1993. 8.4 million vehicles-representing a two-per-cent increase- used the ferries last year. The busiest route was the Swartz Bay-Tsawwassen route with 6.3 million passengers and two million vehicles.

TRANSATLANTIC FREE TRADE

            The United States has promised to study proposals for a transatlantic free-trade agreement and pledged that its long-term goal is to integrate the economies of North America with Europe. The free-trade zone concept, first floated by Canada last year, has been backed by Britain and Germany and is now the subject of a study by the 15-nation European Union. Economic ties between the United States and Europe are already enormous with Europe accounting for almost half of the foreign revenues of American firms.      

MERCHANDISING

            Licensing may have its frivolous moments but it is a serious business. Sales of licensed merchandise in Canada and the United States hit $70 billion (U.S.) last year, up five per cent from 1993. The hit products so far this year include Casper and Batman Forever as well as the 1994 The Lion King. In fact, Pizza Hut sold out of Casper puppets weeks before its promotion was scheduled to end on July 1. And some McDonald's restaurants sold out of Batman drinking glasses just days after a major promotion began. But for every success there is a failure. Amy, the doll from the current movie Congo, was described by experts as being "dead on arrival" when she hit store shelves. And merchandise for Waterworld, the film that has received so much negative publicity about its out-of-control budget, is also being cut back. Retailers also got burned last year with too much Flintstones merchandise.     

CALL CENTRES

            Following the lead of New Brunswick and Manitoba, the Quebec government has announced it will drop the provincial sales tax for telephone call centres to attract companies. Call centres employ people to service telephone lines taking calls on 1-800 numbers in areas such as catalogue sales. Two Montreal-area colleges will offer training courses starting in August to train agents for call centres. About 250,000 call-centre jobs are expected to be created in North America every year for the next five years. The sector currently employs 35,000 in Quebec. Meanwhile, the largest hotel franchise in the U.S. is setting up a trial customer reservation centre in Saint John, N.B. The government is giving $600,000 to Hospitality Franchise Systems Inc to cover startup costs. But the company must refund the money if it doesn't create 100 full-time jobs within two years. The government reckons the money will be recouped in three years just on provincial income tax alone, not counting the sales tax, property tax or the licence for cars etc. The company receives more than 30 million calls annually at its six existing reservation centres in the U.S.

WORKERS' COMPENSATION

            Canada has some of the most generous workers' compensation benefits in the world but its premiums aren't the most expensive. Systems in Canada are less expensive than those in Australia, France, Britain and the Netherlands but more costly than in Japan, Germany, Switzerland and the United States. Workers' compensation costs Canadians an estimated $7.5 billion a year, of which $2.2 billion is spent on health care and rehabilitation and the rest on benefits and pensions to injured workers. Each year, about 1.2 million Canadians are injured at work, though most do not lose time as a result. 75 per cent of injured workers are back on the job within six weeks.

MINING

            British Columbia's mining industry got some relief in 1994 as soaring copper prices and a depressed Canadian dollar helped the industry to its first profitable year since 1989. Total profits from the province's 20 operating mines and single smelter reached $192 million for 1994, up from a loss of $14 million in 1993. Spending on early-stage exploration activity totalled $10 million in 1994, marginally up from 1993. Total exploration and development spending rose 18 per cent to $46 million much of it devoted to advanced projects. The industry rebound was helped by the reopening of three B.C. copper mines, closed because of the weak dollar. Three more small ones are expected to open in 1995

PETS

            Petstuff Inc. a U.S. superstore of Roswell, Georgia which moved into the Toronto area only last fall, is closing all four pet supply superstores and laying off 100 employees. The decision comes on the heels of Petstuff's takeover by another U.S. pet superstore chain, Petsmart of Phoenix, Arizona. Both chains operate large-scale stores that sell an array of pet-related products. Like Toys "R" Us and Home Depot, they are dubbed category killers because they are dominant in one type of product. The poor performance by Petstuff in Toronto has been blamed on the bad selection of locations for their stores. But Petsmart, with 186 stores in 24 states, plans to return to Canada in under a year. One beneficiary is Pet Valu Inc. of Markham, Ontario which operates 215 pet food stores in Ontario and Manitoba.

SPORTS

            Industry experts expect a shakeout in Canada's $3 billion a year sporting goods field as three category killers face off. The giant Sports Chek, operated by the Forzani Group of Calgary, is facing stiff competition from two U.S. giants Sportmart Inc. and Sports Authority Inc. Other Canadian stores are retreating from the sporting goods business. The T. Eaton Co. and Sears Canada have both largely abandoned sporting goods at some new or remodelled outlets which carry only a limited selection of athletic shoes and licensed apparel. Sears, which derives 2 per cent of sales from sports merchandise may pull sporting goods from all 110 outlets across the country. Eatons is also reported as taking a "hard look" at its home audio departments because of the threat from competitors such as Future Shop Ltd. and Adventure Electronics Inc.

TECHNOLOGY

            A woman was taken ill recently with a collapsed lung over India on a flight from Hong Kong to Scotland. To land could have been fatal because of the change in cabin pressure. Two doctors used a British Airways knife and fork to open her chest, a coat hanger to introduce a catheter and a pen top and an empty bottle to drain the air pocket that built up. By the end of the flight she actually ate breakfast. Co-incidently, the same airline has just announced it is developing a "telemedicine satellite link" to monitor passengers taken ill. The system will allow doctors on the ground to monitor vital signs of passengers anywhere in the world via a laptop computer. Sensors are attached to a sick person and the unit plugs into the aircraft's satellite communications system via a socket in the seat's arm rest.

ART

            In a bid to reduce the boredom of living in the Calgary Zoo, some paintbrushes were given to a Sri Lankan elephant named Kamala. She is now gaining international acclaim as an artist and raising much-needed funds for the zoo. Original Kamalas hang across North America and parts of Europe. The mostly 45-by-60 centimetre canvases are priced at $400 to $1,500 and about 60 pieces have been sold so far. Prints are available for those who cannot afford originals. 

CELLULARS

            Last month, a British businessman who drove at 185 kilometres an hour while using a mobile telephone and reading a map on his steering wheel was jailed for three months.

            In almost a thousand schools in 14 U.S. states, high-school driver-education classes include training in the safe use of cellular phones while driving.

JUNE 1995 Economic Digest - Importing and Exporting

JUNE 1995 Edition

TECHNOLOGY

            Last year, Canadian businesses poured more money into their information technology budgets than the year before, the first increase since 1991. Companies increased their spending by 7 per cent in 1994, compared with an 11 per cent cut in 1993 according to a survey of chief information officers. Organizations spent on average $16.3 million in Canada. Most of the money went into networks of computers known as client-server technology. Others spent money on machines in the quest for the paperless office: The most promising technologies are imaging devices that let workers scan documents into computers.

CARS

            April was the fourth consecutive month of disappointing vehicle sales in the U.S. After the last recession, the industry expected sales of cars and light trucks to be 5.5 million for several years to come. Research shows that these sales may not materialize for the following reasons. People want new kitchens rather than new cars. Among the big-ticket items on consumer's wish lists, cars have fallen to No 11 from No 3 in 1984. Remodelling the kitchen, saving to start a business, a home computer, a movie theatre all rate higher than new cars. Other reasons include: there are more and better used cars around now; cars last longer; prices are too high; cars are not the status symbol they once were and women are making more car-buying decisions and their choices differ from men.  

TELEPHONES

            China will see a boom in the telecommunications industry this year, reflected in a rapid increase in the number of users of pagers and telephones. Industry sales will rise by 39 per cent from the 1994 level of $13.5 billion (US). This year, China will have 4.5 million more pager users for a total of 12 million. By the end of the year, about 4.2 per cent of the population will possess telephones. China will have one million long distance telephone lines, 300,000 more than in 1994 and 14 million more switchboards for a total of 62.8 million and a digital data network will link 500 economically advanced cities and counties.

BOEING

            In order to remain competitive, Boeing must lower the cost of producing airplanes and shorten the time it takes to build and deliver an airplane and suppliers need to bear this in mind. Although the number of suppliers continue to decline, there are still opportunities for companies which can offer innovative processes and design, higher quality and lower costs. Much of Boeing's supplier reduction can be attributed to work which has been shifted to the MOP group. Suppliers seeking additional business are encouraged to contact all of Boeing's MOP (Major Outside Production) participants directly, including: Menasco, Northrop-Grumman, Rohr, Heath, Vought-Rockwell, CASA, Bombardier, Shorts and Canadair. Canadian companies seeking advice as to which MOP they should be contacting should call Ron Merrick, Boeing Liaison Officer at the Canadian Consulate-General in Seattle at 206-443-1777, Fax; 206-443-9735.

BANKS

            Doing business with a human in one Chicago bank will soon cost $3 (US) a time. The bank plans to impose the charge hoping it will encourage customers to use less costly automatic teller machines. Consumer groups have criticized the move saying it will hit teen-age, elderly and disabled customers the hardest. Customers can avoid the teller fee by keeping a monthly balance in their accounts which varies depending on the type of account. In Canada, a major bank opted for the "carrot" rather than a "stick" approach when it started paying customers for making deposits using automatic tellers.

SINGLES

            The top 10 foreign destinations for U.S. singles according to the Single Traveller newsletter are: 1) Ireland; 2) England-Wales-Scotland; 3) British Columbia; 4) Costa Rica; 5) Australia; 6) New Zealand; 7) Switzerland; 8) Israel, 9) Alberta; 10) Austria.

FARMING

            Though the second largest country in the world, only 7 per cent of Canada's land mass is used for farming. In 1941, 27 per cent of all Canadians lived on farms. In 1991, despite a doubling of the population, the figure fell to 3 per cent and the number of farms declined from 733,000 to 280,000 but the size of the average farm has grown from 237 acres to 598 acres. Productivity has increased dramatically; a farmer now feeds 32 other Canadians, up from 3 in 1941. Computers have become an important piece of farm equipment: In 1991, 11 per cent of farmers used computers, up from 3 per cent in 1986. (a third of mushroom farmers use computers making them the most computer-literate of all, while maple syrup producers use them the least). 62 per cent of farmers count entirely on their farms for income, while 38 per cent have another job to fall back on and a quarter of farmers are women.

PRODUCTIVITY

            Last year, Canadians sold almost $180 billion worth of goods to Americans, up 70 per cent from $106 billion in 1991 and this year the figure should reach $214 billion. Rapid economic growth in the U.S. is one obvious reason; demand has been growing so swiftly that U.S. producers can't meet the needs of U.S. customers, who then turn to imports. The fall of the Canadian dollar has also had an impact. In 1991, an American needed about 83 U.S. cents to buy a Canadian dollar's worth of goods; last year he paid only 73 cents.

            But there is another reason. Canadian companies, especially manufacturers, have been getting more competitive and more adept at keeping their costs under control. Their competitors in the U.S. have been doing the same, but not as well as Canadian companies. Between 1991 and 1994, Canadian factories raised productivity 10.9 per cent compared with 10.5 in the U.S. This sounds small but in the 1985-91 period, Canadians eked out a mere 2.5 per cent gain compared with 17 per cent in the U.S. Also, labour costs in Canada over the last three years have increased by 7.5 per cent (below the increase in productivity), compared with 10.7 per cent in the U.S.(more than the productivity growth). Again, that's better than the previous six year period when Canadian labour costs rose almost 30 per cent (against the 2.5 per cent productivity gain) and U.S. costs rose less than 28 per cent (against the 17 per cent rise in productivity). But the U.S. economy is now slowing and the Canadian dollar rising giving Canadians an even greater challenge.

RETAIL

            Incredible Universe is a U.S. electronics retailer launched by the Tandy Corp. whose giant entertainment emporiums dwarf even the biggest of the so-called big box stores. It is set to become the latest megastore to invade Canada and is planning to open its futuristic  outlets across Canada beginning with two locations in Toronto. The store prefers to be known as a "show." Customers are called guests, the employees called cast members and the merchandise is referred to as props.

            Among the 50,000 props in a typical "show" are 315 different types of television, 181 refrigerators, 83 washers and dryers and thousands of music and video titles. At 17,000 square feet, the outlets are about 50 per cent bigger than a Home Depot or Price Club warehouse store. The stores feature such customers perks as a disc jockey, video screens, a stage where musicians and jugglers perform, a children's play area and fast-food restaurant.

MEXICAN AUTO INDUSTRY

            The NAFTA agreement helped bring massive investment into Mexico by foreign car makers. The industry became the country's biggest employer, with 225,000 workers and its second largest exporter after oil. Domestic vehicle sales were forecast to top last year's figure of over 600,000 up from 420,000 in 1993 and to rise to 1.2 million by the end of the decade.

            December's currency collapse has changed these hopes as demand has plunged. Vehicle sales for the first two months of the year were down 61.7 per cent compared with a year ago. With a GDP expected to drop 5 per cent and astronomical interest rates, domestic sales may reach only half last year's figure. One industry expert predicts that nearly one third of Mexico's 1,100 dealers will go under before the market recovers. Car makers have cut production and put some workers on short time. One survival strategy has been to divert production to exports which shot up 31.3 per cent in January and February, and could reach 800,000 units this year.

WEALTH

            Canadians were worth an average of $81,000 last year, $1,900 more than in 1993. The tangible wealth of the country, everything but natural resources, totalled $2.7 trillion at the end of 1994. Take away $300 billion to account for the difference between what foreign investors own here and what foreign assets Canadians hold, and Canada's net worth was $2.4 trillion. The gain in wealth reflected an accumulation of tangible assets like cars, factories, computers, houses, household appliances, trucks, highways and developed land. And with virtually zero inflation last year, most of the increase in wealth was real. However, debts also grew six per cent last year to $1.7 trillion.

CEREALS

            A pair of Democratic congressmen want U.S. breakfast food makers investigated for possible pricing collusion. Cereal prices have increased at twice the rate of other foods over the past decade even as production costs have declined. Four companies, Kellogg Co., General Mills, Quaker Oats Co., and Post brand maker Philip Morris, control  85 per cent of the market, selling about 200 varieties. Industry groups have claimed the congressmen's information is flawed.         

VANCOUVER AIRPORT

            The airport improvement fee--the $5 to $15 levy passengers must pay before boarding their flights-- raised $37.3 million last year according to the Vancouver International Airport Authority. VIAA made a 1994 profit of $53.3 million, compared to $36 million in 1993, after paying its landlord, the federal government, $31.9 million. All the money was used to help pay down the debt on the $350 million parallel runway and new international terminal now under construction. Earnings from operations totalled $21.4 million, up 36 per cent from a year ago, and gross revenue increased 10.6 per cent to $91 million reflecting substantial increases in passenger volumes and aircraft movements. Last year the airport handled a record 301,000 flights, 182,000 tonnes of cargo and 10.8 million passengers.

TENDERING

            Free trade is coming to Canadian municipalities. From coffee to copiers, new federal guidelines dictate all Canadian municipalities must tender their need for goods and services nationwide. The move, while breaking down inter-provincial trade barriers will have cost implications according to some municipalities. The object of the agreement is to give Canadian businesses in all parts of Canada increased access to governments contracts. Accessability will be ensured through use of an electronic tendering system or publication in one or more pre-determined daily newspapers.

WINDS OF CHANGE

            Termite flatulence is now being blamed for as much as one-fifth of the world's methane, one of the greenhouse gases causing global warming. There are 3,000 species of termite and they produce about 88 million tonnes of methane a year. In a related story, the methane gas produced by 72 flatulent pigs on an airliner heading to South Africa forced the flight to turn back and make an emergency landing after their methane triggered its fire alarms. Fifteen prize stud pigs being flown out for breeding died of asphyxiation when halon gas was released into the cargo hold as part of the plane's fire-extinguishing equipment.

TRIVIA

            At any given moment, there are about 800,000 people aloft in aircraft.