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Welcome to the Kelowna Chamber of Commerce

The Chamber works to ensure the Okanagan region will become the most economically prosperous region - and the most desirable place to live and work - in Canada. As the area's leading membership driven business organization, we are committed to providing value to our members.
 

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  • How low can oil go?
    Dec 15, 2014
    Oil prices have plummeted by 40% since June and the severity of the decline caught almost everyone by surprise. What suddenly changed about the oil market? How low can oil prices go? And what does it mean for Canada?
    For the past four years, oil prices have remained stuck above $85 per barrel, often much higher, and in spite of dramatic increases in global production. The United States saw a transformative boom in shale oil with energy production growing 80% from five million barrels per day (bpd) to just over nine million bpd since 2008. Canada’s oil sands production has added one million bpd since 2005. And there have been increases in many other important suppliers.
    These high prices were sustained because, until recently, demand for oil had been rising faster than supply, even though consumption in the U.S., Europe and Japan had been flat or dropping since 2006. In fact, the only countries where we have seen significant increases in oil demand were fast-growing emerging markets, particularly China, which accounted for half the world’s demand growth in 2011 and 2012.
    The big shocker in oil markets was the slow-down in emerging markets that caused the International Energy Agency to slash its 2015 demand forecast to a teensy 1.1 million bpd increase. Oil traders were looking at huge production increases in 2015 (an extra 1.2 M bpd from North America alone) that would absolutely swamp the increase in demand.
    That’s why the world turned to OPEC expecting to see a production cut that would offset the falling demand. But the cartel did nothing, and the Saudi oil minister said publicly that he wanted to drive down prices in order to force production cuts in shale and oil sands. This won’t work. In fact, production will continue to rise because most of the long-term investments can tolerate significant variation in revenues over the (often) 30-year lifespan of the project. New projects may be delayed, and indeed some big ones have been cancelled, but prices would have to be really low for a very long time in order to reduce production.
    What does it mean for the economy? The Bank of Canada warned that falling oil prices could subtract 0.25% from GDP growth. Even the grimmest forecasts have Alberta’s GDP growing at 2.5% next year, down from 4% over the past two years. The province would still be among the leaders in Canada, but without the inflationary pressures of breakneck growth.
    Cheaper gas is also a welcome boost for consumers. If prices continue at current levels, a typical U.S. household could save $1,100 and a Canadian family could save $1,300. That’s about $85 billion dropped into the pockets of North American consumers, a welcome stimulus. Globally, lower oil prices could transfer nearly $1 trillion from producers to consumers.
    We are likely to have an oversupply in 2015, which will put further downward pressure on prices, so it's possible that oil could temporarily dip as low as $50 per barrel. Over the longer term, oil prices will depend heavily on a resurgence of demand driven by a healthier global economy. The Canadian Chamber expects it will pick up with the U.S. economy expanding at 3.5% and emerging markets growing 4.8%. This will provide healthy support to oil demand, pushing prices back towards the $70 range. This would put the Canadian dollar somewhere 83-85 cents, providing a nice boost to manufacturing exporters and generating more balanced growth in Canada.
  • The State of the Global Economy
    Nov 25, 2014

    U.S. Economy is Booming

    The U.S. economy is firing on all cylinders as third quarter growth came in at 3.5% last week, following on the heels of spectacular 4.6% growth in the previous quarter. The U.S. economy added 214,000 jobs in October, bringing the total to 2.3 million jobs created so far in 2014. Wi th unemployment down to 5.8%, wages are picking up and headed higher. This is great news for consumers, and retailers are smacking their lips in expectation of a very merry Christmas season. This is also good news for Canada: exports to the U.S. are up 13% so far this year in spite of lower energy and commodity prices. All of the leading indicators point to continued strength in the U.S. economy in the months ahead. Get ready for growth!

    Loonie Headed Lower

    A combination of tumbling commodity prices and weak economic numbers in Canada set against a resurgent U.S. economy pushed the loonie to 88 cents on Tuesday. Wall Street expects that U.S. interest rates could start rising sooner than expected, pushing up investor demand for the greenback while weakness in Canada’s domestic economy means that our rate hikes could be much further away. The Canadian Chamber is forecasting that the Canadia n dollar will average 85 cents in 2015. 

    Canada Slows in August as Retail Sales Edge Down

    The Canadian economy contracted by 0.1% in August after remaining essentially flat in July, the weakest results since last December. The big energy sector declined but this was mainly because of summer maintenance related shut-downs in the oil sands. On the consumer side, Canadians shopped less in August , with retail sales falling an unexpected 0.3 %, the second consecutive month of decline. Softer domestic spending is expected this year and next as highly indebted Canadians put their credit cards away. Exports and business investment will have to be the sources of growth in the years ahead.

    China Intervenes to Prop up Real Estate Market

    China is now in the midst of a serious housing correction with October’s home prices falling for the sixth straight month and sales down 11% from a year earlier. China cut interest rates and down payment levels for the first time since the 2008 global financial crisis in a sig n that the government is worried that further fall in home prices could threaten the economy. This could spell trouble for commodity prices because China is the world’s biggest metal consumer, accounting for almost half of global demand for copper and two - thirds of the world’s iron ore, where prices have fallen 22% and 40% respectively.

    Japan Falls into Recession

    The Japanese economy contracted by 1.6% in the third quarter, after a 7.3% decline in Q2, as the country’s sales tax increase hammered the economy and pushed the country into its fourth recession since 2008. Japanese Prime Minister Shinzo Abe called snap elections in order to postpone an other imminent rise in Japan’s consumption tax. Japan’s economy should return to positive growth in Q4, but more volatility should be expected as the yen continues to decline.



    -Hendrick Brakel, Canadian Chamber of Commerce
  • Being CEO of your life – a lesson from Carlos Fox
    Nov 17, 2014

    It may seem like a pretty straightforward topic, but it’s something that we all seem to struggle with in one form or another: Work-life balance. Spending more time with our kids, regularly going to the gym, having “me time.” These are all things that we are aware we need. Sometimes we make time for them, other times we do not.

    At our last TEC event, speaker Carlos Fox spoke to this point exactly, and though it may only be one man’s opinion, it is the opinion of a man who has spent 7,000+ hours coaching CEO’s. Carlos says, “Those who are the best CEOs of their life also happen to be the best CEOs of their business. You not only have to be good at running your company, but you have to be great at running ‘ME Inc.’ and you have to be intentional about it too.”  

    So how do we get better at this practice? Treating our personal lives with the same level of importance as our careers? Our companies?

    Carlos broke it into a few easy steps:

    1.       Seek Self awareness

    Are you really as good as you think you are? This is the good, the bad, and the ugly. What are your strengths? What do you need to improve on? Be honest with yourself! How do you show up as a leader: do you know your leadership style, your strengths, and your weaknesses?’ It is important to be aware of yourself, your personal brand, to key into your values and the things that you really find important. To understand how you handle stress and the things you need in order to combat it most effectively. You must know your blind spots and how to actively minimize their impacts.

    2.       Adopt the ability to navigate

    Carlos suggests taking a look each month at where you are going, how you are getting there, and if that is realistic or not. There is never enough time, money, or resources in the world – this is where we must become the chief priority officer of our lives. Do you need to spend more time with your family, your kids, on your health, re-connecting with your pillow and sleeping at night? Carlos suggests taking each area of your life and evaluating it using a scale of red, yellow, and green. This gives you an actual idea of what you are doing well, and where you may or may not be lacking. And it really goes back to point #1 – self-awareness.

    3.       Be Intentional

    Work towards these life goals as you would with the goals of your own company. Execute them, evaluate them. Learn and grow from them.

    If we do these three things, and we do them well, we can see several things happen. We will have more time, more energy, less stress, and actually be able to create a balance in our lives – tuning in to that inner ‘Zen’ all these people are talking about. So why not give it a shot? What do you need to do to become CEO of your life? 

  • Is China Slowing Down or Charging Ahead?
    Nov 12, 2014

    In recent weeks, we’ve seen many stories in the media about a major slowdown in China. As Canada’s second largest trading partner with $70 billion per year in bilateral trade, it could have a big impact here at home. Should we be worried or is China charging ahead? Official figures show China growing at around 7.3%, a decline when you consider that for the 20 years up to 2007, the country’s average real GDP was rising by an average of 11% per year. But that’s OK. China’s economy is now US$9 trillion, so that 7.5% increase is on a much larger pie and is a much bigger boost to the global economy. The growth is also more balanced, shifting away from investment and export dependence towards a more broad-based expansion of consumption, thanks to rising wages. Are there vulnerabilities in China? Certainly, China has high debt levels, but the banks are well capitalized and with $4 trillion in foreign exchange reserves, there is more than enough of a safety cushion to weather any downturn. China also has soaring real estate prices and areas that are overbuilt. But don’t forget that two million people per month move from rural areas to the cities. This means that China has to add the equivalent of three New York Cities every year to keep up with the rise in urban dwellers. China’s government has been trying to clamp down on rising home prices by raising mortgage rates and downpayment requirements, although they’ve eased off recently. A consumer revolution is underway. So what does it all mean for business? China’s economy is changing dramatically but growth will remain over 7% for the foreseeable future. More importantly a consumer revolution is underway. Each year, almost 30 million people, a population roughly the size of Canada, join the Chinese middle class. And they love to spend online. In 2013, China surpassed the U.S. as the world’s largest ecommerce market. By 2015, KPMG is forecasting that China’s ecommerce transactions could reach USD 540 billion, roughly 10% of total retail transactions. By 2020, the firm estimates that China’s ecommerce market will be larger than those of the U.S., Britain, Japan, Germany and France combined. Here at the Canadian Chamber of Commerce, we’ve been lobbying hard to establish a renminbi trading hub right here in Canada to make it easier to do business in China’s currency. Last week in Hangzhou, our President, Perrin Beatty, and the Prime Minister of Canada met with Jack Ma, the head of Alibaba, to talk about boosting trade. What is Alibaba? It’s only the world’s largest ecommerce company, roughly twice the size of Amazon. Alibaba’s transactions last year totaled nearly $250 billion, compared with $116 billion for Amazon. Every second, Alibaba handles an average of 500 orders, worth more than $9,000. Ecommerce is the best way to penetrate the Chinese consumer market because it’s more developed and trusted than the traditional bricks and mortar retail networks. Mr. Ma often says that “in the U.S., ecommerce is dessert. But in China, it’s the main course.” It’s time to feast.

    Canadian companies looking to list their products on Alibaba should click here

    Want to Discover China on an all-inclusive trip with the Kelowna Chamber for as low as $2725? Business meetings available... 

     

    -KCC Contributor