This week a number of Canadian statistics were released; Retail Sales fell in December by 0.5% with 9 of the major 11 sectors registering declines including automobiles. The Canadian consumer price index rose .9%. Inflation now sits at 2.1%. Despite the decline retail sales however posted a 4.5% growth. In a previous post I discussed the growth of a couple of Canadian retailers. Again this is simple math; they are either selling to more people or they are increasing their prices within the existing base! Not too hard to figure out.
The annual inflation rate took its highest jump in the last two years, the leader? Gasoline! The price of which has increased over 20% - the largest increase in six years. How did our friends south of the border do? Well they don't have an issue as their gas prices decreased at the pump over the same period. Oh, and no they didn't see a carbon tax either!
This POST will build on one of my previous posts re all the Canadian expats that are now living in the US. In a July 2013 FP article titled Why Is Canada Failing at Tech it was estimated that 350,000 Canadian technology professionals were living in the San Francisco Bay area. The Reason? "a veritable lost generation lured by good, high-paying tech jobs and access to collaborators and capital." It's not getting any better, in fact most Canadian proffesionals would gladly head south if the opportunity arose
The following are excerpts from the February 16th. George Takach, senior partner at McCarthy Tétrault LLP article Canada's Patent Deficit....
"relative to our key trading partners, and especially the United States, we are not as innovative and have not invested as heavily in information technology and other productivity-enhancing devices, systems and methodologies (such as state-of-the-art e commerce platforms). This gap – this deficit – threatens our future prosperity. For example, roughly 3 per cent of our workforce is made up of people in information and telecommunications jobs. In leading digital countries, that percentage is between 6 and 8 per cent.
How dismal is the state of patent-filing in Canada? Even the North Koreans are outperforming us! We are simply not among the top 20 countries in terms of patents filed per capita. Read the full article here.
Many Canadian companies state that finding qualified engineers and programmers has always been a challenge. It’s only getting harder. Forecasts indicate that in a decade there will be a staggering 1.5 million jobs unfilled in Canada
What is our Federal and Provincial Governments doing to keep our talent in Canada once educated? Oh ya, take 53% of their income in taxes and more.
Global gas prices are on the rise—about 4.4 percent on average in Q4 2016. It’s a big jump, but the burden of filling up is felt differently in every country. Bloomberg ranked 61 countries by three economic measures; The average price of a gallon of gas at the pump, Affordability, the average daily income and Income Spent.
Canada ranks #17 in Price at the pump, a gallon of regular gasoline cost $3.46 US/Gallon or $1.20 CDN/LTR. In Affordability we are #9. It takes 3.07% of a persons daily wage (before tax) to purchase a gallon of gas.
In Income Spent we rank #58. The average Canadian driver will spend 2.75% of their total income on gasoline. Only Greece, Mexico and South Africa rank worse!
Our politicians want to be seen as leaders on global warming by implementing carbon taxes on businesses and consumers that, as of January 1st. will affect these numbers negatively more than likely pushing us past Greece.
It costs about $41.00 a barrel to produce oil in Canada. Our southern neighbours can do it for $36.00 a barrel and in Saudi Arabia it's less than $10.00. Oil is currently selling for Oil sales account for approximately 8.9% of Canadas GDP. It is estimated that Canadian producers looses about $3.00 per barrel combined oil sands/traditional methods.
Canada has the world’s third largest oil reserves, but refineries in Eastern Canada still import around 80 per cent of their oil supply. Canada spends approximately $20 Billion Dollars on foreign oil. Maybe we should focus on an Eastern Canada Pipeline for our own use rather than the Keystone Pipeline that will provide the US with oil at a loss to Canadian producers. Would prices at the pump come down, probably not, but at lease we would be using our own oil.
Today the EU signed off on the Comprehensive and Economic Trade Agreement (CETA). The agreement provides for duty-free trade between Canada and the EU (for 98% of industrial products) and offers agricultural producers additional market access. One of the holdups was that Belgian farmers did not want more competition from Canadian dairy products, you know the ones we pay more for than our American neighbors! The Conference Board research estimates that elimination of EU tariffs will lead to $1.4 billion more in exports in 2023. We currently have trade deficits (2015) with Germany: -$10.7 billion, Italy: -$4.0 billion and France: -$2.9 billion. With Belgium we enjoy a $614.4 million surplus. Most EU Countries have been trading with Canada under the MFN (“Most-Favoured-Nation Tariff”) status and, as such, many goods have, up till now, entered Canada tariff free. http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2016/01-99/01-99-t2016-3-eng.pdf
The EU and Canada have agreed to scrap 100% of tariff’s on industrial and fisheries products. With regards to agricultural products, the EU and Canada will eliminate 93.8% and 91.7% of tariff’s respectively. Some agricultural products seen as “sensitive” (e.g. eggs or chicken and turkey meat) are not covered by CETA, while for some others (e.g. beef ) duty-free access will only be granted for limited quantities. CETA does not prevent the EU and Canada from keeping a number of regulatory and licensing requirements in place it’s comprised of 600,000 pages of rules and exceptions!
According to a Canadian Government presentation; CETA will create jobs, open new markets and unlock new opportunities in Europe for the benefit of Canadian workers and businesses in every region of our country. It is equivalent to creating almost 80,000 new jobs or increasing the average Canadian household’s annual income by $1,000. This will directly benefit hard-working Canadians through more jobs, higher wages and greater long-term prosperity. http://www.international.gc.ca/trade-agreements-accords-commerciaux/assets/pdfs/ceta-aecg/final_sectors_content-eng_v11.pdf
So what will CETA’s impact be on you, the average Canadian consumer?
Will the price of French, German and Italian wine go down at your Provincial outlet? The deal is said that it will chip away at a trade barrier that currently protects Ontario wines and hard liquor, ultimately making European booze less expensive. Don’t hold your breath though, the provinces will probably eat up this advantage through higher alcohol taxes etc.
The agreement will more than double the quota of cheese imported from the European Union to about 30,000 tonnes per year, which could take a bite out of Ontario and Quebec dairies’ market share. However, Ottawa has assured the provinces it will pay compensation to cheese producers, and that it will set up a marketing campaign for local cheese. (Your tax dollars at work again.)
Under CETA, Canada has agreed to adopt EU measures on so-called “patent term restoration.” Drug patents typically last for 20 years but if it takes more than five years between when a patent on a new drug is filed and marketing authorization is granted, the drug maker will now get an extra two years of patent protection as compensation. This could raise Canadian drug prices and cost provincial health plans, but the federal government believes the price hikes will be small and won’t kick in for years. (Have the ever lied to us before?).
For Canadian consumers, the end of a 6.1 per cent tariff on European imports will make German-made BMW’s and other vehicles like Audi, Ferrari, Maserati and Lamborghini more affordable. (Don’t all rush out at once!)
Trump has clearly stated that NAFTA is a "Bad Deal" for the U.S. Well I also think that it is a bad deal for the Canadian Consumer. If we take a look at what some of the points are that Trump wants to renegociate we can see how it will benefit the Canadian consumer...
The U.S. publishes an annual list of complaints about trade practices in other countries.
A marketing board is an organization created by many producers to try to market their product and increase consumption and thus prices. We have 120 marketing boards in this Canada. Prices for most board regulated products have increased excessively in Canada compared to the rest of the world—in fact prices in Canada are almost three times as high as other countries. Interesting to note that a family pays less for three liters of pop/soda than for three liners of milk - sad state of affairs!
Canadians pay some of the highest prices in the free world for alcoholic beverages. The price of a bottle of Budweiser in Ontario (Beer Store) is $1.75. In the U.S. (Safeway) it's $0.56. Smirnoff Vodka Ontario (LCBO) $57.00 U.S. (Safeway) $9.95.
Canadians are not allowed any Duty Free purchases unless they are out of country for more than 24 hours. If more than 24 hours but less than 48 hours $200. CDN but no alcohol. After 48 hours $800. CDN ($608. U.S.) one bottle allowed.
Don't believe this one take a look at your TV, Internet and Phone bills!
I am a concerned Canadian that is fed up seeing companies and people leave Canada due to the high cost of doing business and living.