Photo courtesy: www.tourismkelowna.com Photographer Brian Sprout - Picture BC Photo courtesy: www.tourismkelowna.com Photographer Brian Sprout - Picture BC Photo courtesy: www.tourismkelowna.com Photographer Brian Sprout - Picture BC Photo courtesy: www.tourismkelowna.com Photographer Brian Sprout - Picture BC Photo courtesy: www.tourismkelowna.com Photographer Brian Sprout - Picture BC Photo courtesy: www.tourismkelowna.com Photographer Brian Sprout - Picture BC Photo courtesy: www.tourismkelowna.com Photographer Brian Sprout - Picture BC Photo courtesy: www.tourismkelowna.com Photographer Brian Sprout - Picture BC

Federal Candidate Business-Focused Q & A

by Admin 31. August 2015 14:05
The Kelowna Chamber of Commerce is keenly interested in all levels of government and the business environments that encourage economic development. In this light, we are hosting a Federal Candidates Forum on September 25th, 7:30am at the Manteo Resort for the Kelowna-Lake Country candidates. We provided a set of 4 questions to each candidate in the Kelowna-Lake Country and Central Okanagan-Similkameen-Nicola area’s that are related to business interests. Here are the responses we've recieved.
 
1. Jobs: Jobs are a key focus of the Canadian Chamber of Commerce platform. Though Kelowna has historically maintained near full employment, a key challenge is attracting higher paying, higher skilled jobs to Kelowna. If elected, how will your party bring better jobs to Kelowna?
 
Dan Albas (Conservative Candidate for Central Okanagan-Similkameen-Nicola): A number of factors are required to create employment– investment is key as is the availability of skilled employees and a cost effective business environment. While these measures require a partnership from all levels of Government, from a Federal perspective our government will not increase taxes as is currently proposed by the other parties and we will maintain our skills training program that creates a relationship between employers, educational institutions and students. Our Budget 2015 Action Plan also supports manufacturing and processing machinery and equipment by providing a ten-year tax incentive in the form of an accelerated capital cost allowance.
 
Norah Bowman (NDP Candidate for Kelowna-Lake Country): Under Harper, Canada has lost 200,000 jobs since the recession. Harper is the first Prime Minister who, when asked about the recession can say “which one?” The NDP will help kick start the local economy by cutting small business taxes from 11% to 9%. This will create jobs, as small businesses create roughly 80% of private sector jobs. The NDP will create an innovation tax credit to help the manufacturing sector, so we can process our resources here in our communities and keep families together with local jobs. The NDP will also invest in research and development and new machinery.
 
Ron Cannan (Conservative Candidate for Kelowna-Lake Country): Helping our business community create well-paying jobs is both a personal priority and an ongoing priority for our Conservative government. We will succeed by maintaining low business taxes, balanced budget, ongoing funding in local sectors including agricultural &hi tech, opening new markets, supporting job training/trades by investing in the Canada Jobs Grant & UBCO/OC to retain/attract the skilled labour our business sector needs.
Strong partnerships between all levels of government, private & social sectors. Enthusiastically support a strong business sector because we know that the economy & well-paying jobs are the priority for Canadians. The business sector is the engine that drives that success.
 
Stephen Fuhr (Liberal Candidate for Kelowna-Lake Country): Kelowna currently enjoys higher paying, higher skilled jobs in the tech sector, healthcare, education, and professional services. To continue to draw more of these jobs into our community, the following variables need to be satisfied: available financial stimulus and access to a skilled workforce that can fill those roles.
Most recently the Liberal party has announced an aggressive and innovative plan to invest in Canadian infrastructure. This plan will have three distinct eligibility areas: public transport, social and green infrastructure. Specifically, funding for projects such as protection against wildfires and core services like water and sanitation will be made available. Under the “social “eligibility area, funding will be made available for affordable housing, senior facilities and early learning and childcare. Investing in infrastructure is not only necessary for improved quality of life, it is deemed to be the best stimulant for skilled job creation.
A Liberal government will also renew our commitment to cooperate with the provinces to provide quality healthcare, and assist provinces in building the capacity to do that—with physical capital, human capital, and all the economic spinoffs that entails.
A Liberal government will also redirect funding from fossil fuels to support investment in the research, development, and manufacture of clean energy technology. This would make new funds available to universities, and I would advocate for those funds to be directed to our institutions.
Based on my personal experience as CEO for a local avionics company, I know how important government programs like IRAP and SRED* are to stimulate enterprise in the tech sector. I would like to see those programs enhanced, as we are uniquely suited to benefit due to our growing tech sector infrastructure.
* IRAP Industrial Research Assistance Program SRED Scientific Research and Experimental Development
 
2. Private investment in business: Kelowna has a strong entrepreneurial spirit, and aims to be one of the best places in the world to start and grow a business. However, all businesses need capital to get off the ground and grow. If elected, how will your party ensure that businesses have access to the capital they need to grow?
 
Dan Albas (Conservative Candidate for Central Okanagan-Similkameen-Nicola): Ultimately it comes down to keeping taxes low. Raising corporate taxes as the NDP proposes takes investment out of the business community and transfers that money to Ottawa. We cannot forget the private sector supports the public sector and our Conservative platform is the only one not proposing tax increases of any kind if elected in 2015. In Alberta we are already starting to see impacts of increased corporate taxes and declining investment. On a different note Budget 2015 also expands services offered through the Business Development Bank of Canada and Export Development Canada to help our business community grow.
 
Norah Bowman (NDP Candidate for Kelowna-Lake Country): Small businesses are the engine of our economy. Many of them are struggling or need capital in order to grow. New Democrats understand this point and will cut small business taxes from 11% to 9%. This will give an immediate tax break to small businesses so that they can help grow the economy. This is a plan that has been supported by the Canadian Federation of Independent Businesses.
 
Ron Cannan (Conservative Candidate for Kelowna-Lake Country): As a former small business owner I understand the importance of having access to capital. Our Conservative government has & will continue to ensure that the Business Development Bank of Canada works closely with entrepreneurs with flexible lending criteria. We also recognize the need for more investment when start-ups need angel investors. As Finance Minister Oliver has noted, “Strong capital markets are at the heart of a strong Canadian economy.” Our government has provided favourable tax policies for investors &
created numerous Venture Capital Action plans providing the early capital investment needed for entrepreneurs, to innovate, successfully bring new ideas to market & encourage more investment.
 
Stephen Fuhr (Liberal Candidate for Kelowna-Lake Country): Ultimately, capital is derived from three sources: private investment, lending institutions, and direct government investment. As a former CEO of a local avionics company, I know how difficult it would have been to launch and grow that business without federal programs like the Industrial Research Assistance Program and the Scientific Research Experimental Development tax incentive. A Liberal government will continue to provide these incentives to facilitate technical business development. A recent announcement by the Liberal party will make billions of dollars of new money available for municipal infrastructure improvement. Additionally, a Liberal government will sponsor innovative methods of alternative financing with the establishment of a Canada Infrastructure Bank (CIB) aiming at providing low-cost financing. This new CIB will work in partnership with all layers of government and the financial community to best leverage Canada’s strong credit rating and lending authority to make it easier and more affordable for municipalities to finance local projects. Alongside the new CIB, Green Bonds will be issued so that green projects will be more attractive to private investors, by offering loan guarantees, reducing financing costs and risk and bundling small initiatives into attractive and rewarding offerings for investors.
 
3. Technology: Kelowna has a growing tech sector and is home to leading educational institutions. However, technology oftentimes fails to realize its potential for positive impact on business and productivity. If elected, how will your party push technology to benefit business and promote productivity?
 
Dan Albas (Conservative Candidate for Central Okanagan-Similkameen-Nicola): I can think of no better local example on this question then my colleague Ron Cannan who was instrumental in securing $3.4 million in federal funding for the Okanagan Centre for Innovation. For those of you unfamiliar with the Centre for Innovation, it is 24,000 sq.ft with numerous technology resources intended to assist local entrepreneurs in the new digital age. This is a very exciting facility for our region and demonstrates that our Government is at the forefront in strategic investment that ensures local business has access to technology in our rapidly changing markets.
 
Norah Bowman (NDP Candidate for Kelowna-Lake Country): The NDP has tabled the Post-Secondary Act in the House of Commons to ensure adequate and stable funding for our educational institutions. This will help make sure that our educational institutions in Kelowna can be at the forefront of researching new technology and grow the technology sector locally. As energy efficiency becomes increasingly important, an NDP government will kickstart our clean energy sector to make Canada a global market leader. Kelowna is well situated for solar energy, for example – Okanagan College has installed solar panels, and this is only one way that technological knowledge should be applied to sustainable local industry.
 
Ron Cannan (Conservative Candidate for Kelowna-Lake Country): For a long time successive governments have heard that we need to do better at getting technology to the marketplace to increase Canada’s productivity. The Jenkins Report made that very clear: http://rdreview.ca/eic/site/033.nsf/eng/h_00287.html
Our conservative government took that advice seriously and has invested heavily in R&D in a number of sectors.
Add to that a competitive tax regime/tax incentives that now directly support business innovation, retention of highly skilled people, opening new markets for export and investing in the physical/digital infrastructure needed to get our products to market. Conditions for success & increased productivity! Locally through Accelerate Okanagan/Okanagan Innovation Centre the future is very exciting!
 
Stephen Fuhr (Liberal Candidate for Kelowna-Lake Country): A Liberal government would help businesses benefit from technology to boost productivity and efficiency with a few important strategies: improve energy efficiency; create incentives for technology adoption; empower decisions with open access to government data; and improve our buying power for technology. Specifically: tax incentives and the consolidation of today’s scattered programs will boost investments in job creation in small, innovative start-up businesses in a number of fields to include aerospace and manufacturing.
Liberals have a long history of supporting innovation in Canada, creating the Canada Foundation for Innovation in 1997 to establish competitive research facilities. These funding projects have led to countless spinoffs in the private sector, retained our best talent, and helped to diversify the Canadian economy.
Ultimately, the government should enable specialized technology incubators and accelerators to find the best solutions and best practices that benefit businesses and promote productivity.
 
4. Markets: Kelowna’s natural beauty and hospitality attracts visitors from all over the world, and its business community benefits from exporting themselves and their products abroad. Simply put, dollars from abroad bring prosperity to our City. If elected, how will your party assist business in reaping opportunities from markets abroad?
 
Dan Albas (Conservative Candidate for Central Okanagan-Similkameen-Nicola): We are extremely fortunate here in the Okanagan to enjoy the success of the Kelowna International Airport that has served as our gateway to the world. Last month our Government extended the lease to the Kelowna Airport for 39 years that provides long term certainty our airport can continue to grow and capitalize on international opportunities that are hugely beneficial for our region. Since 2007 our Government has also concluded trade agreements with 38 countries that now represent more than half of the global economy. This opens up exciting new opportunities and ensures our region has an incredibly bright future.
 
Norah Bowman (NDP Candidate for Kelowna-Lake Country): The NDP knows Tourism is an important sector for Kelowna's economy. Stephen Harper and the Conservatives cut $24 million of funding from Destination Canada. Instead of investing in Canadian tourism, Conservatives spent more than $800 million on government advertising—much of it highly partisan. Tom Mulcair announced $30 million in funding for Destination Canada, particularly the Connecting America campaign to attract American tourists. This will help boost the local economy as Kelowna is a top tourist destination in Canada. Our agriculture industry exports abroad. The NDP will work with local agriculture groups to ensure fair prices for Canadian products internationally.
 
Ron Cannan (Conservative Candidate for Kelowna-Lake Country): In 2006 when I was first elected as MP for Kelowna Lake Country, Canada had free trade agreements with 5 countries; today we have 44. We are opening new markets, reducing & eliminating tariffs & promoting Canadian products like our cherries to the world’s largest markets in Europe/Asia. Our Okanagan business sector is not afraid to compete with the world when we are on a level playing field. "Go Global" workshops will help local businesses learn how to tap into resources/services like our Trade Commissioners to take advantage of these new markets. As well, continuing to break down trade barriers within Canada.
 
Stephen Fuhr (Liberal Candidate for Kelowna-Lake Country): Paths to accessing markets abroad depend on the sector. Generally speaking, we want efficient transport infrastructure by road and by air to reach Kelowna, we want to promote Kelowna as a business and tourism destination.
A Liberal government would seek to re-energize cooperation on reducing impediments to trade and commerce between countries – including by improving border infrastructure, streamlining cargo inspection, and making the movement of people and goods easier.
A Liberal government is committed to working with all levels of government and First Nations communities to improve highways and road infrastructure. We have announced plans to not only directly fund infrastructure projects but also create a Canada Infrastructure Bank to provide low-cost financing for such projects.
I have a lot of experience working with Transport Canada and know we haven’t realized Kelowna’s potential as a regional or national air hub. As Kelowna’s Member of Parliament, I would advocate for our community to expand that capacity.
We also want to promote trade with other nations, not simply negotiate trade agreements. A Liberal government would resume those Team Canada trade missions started by Chretien, and give Canadian businesses opportunities to access foreign markets and investment.
 
-KCC 

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How to Find Time for Social Media

by Admin 26. August 2015 16:35

Small business owners, especially those businesses with under 10 employees, find it extremely difficult to justify the time on social media because it doesn’t lead to predictable, measurable cost savings or revenue.

Social media and content marketing is about becoming an engaging resource for your customers. What’s the yield of a relationship? If you can figure out what a relationship is worth in revenue dollars, you should be blogging about it.

The truth is, we can’t. Not exactly at least. But we know people buy from people they know, like, and trust and that’s why it’s important to invest time in building these connections and affections.

Finding that time is easier said than done. Still here are a couple of suggestions on how to carve out some time to increase your efforts on social media.

Keep Content Handy

The first thing you’ll need is a place to keep content you find. Not all content will be applicable for sharing the moment you come across it. We’ve all seen people on Twitter who post 10 tweets at a time and figure they are done for the day. It is better to deal out your posts at multiple times than all at once. Often you’ll find content that you’ll want to share later so select a system in which you can easily access your content gems in the future.

Upload content to DropBox, use Evernote, or keep a notepad handy (paper or electronic). Doesn’t matter if you keep fortune cookie messages in a shoe box. Never let what you deem to be a valuable piece of content escape. Keep it somewhere handy and build a cache of it.

Find a Scheduler You Like

There are many options to help you pre-schedule posts. Scheduling is important because you can’t spend your whole day posting, nor do you want to be that person who bombards others with a firehose worth of content once a day.

Find a scheduler you’re comfortable with. Many systems allow you to control when you post and often give you the ability to do it several days out. One of the most basic is Buffer. It allows you to schedule across multiple platforms. It offers a free and paid version, but even the paid is only about $10 a month.

The most popular is Hootsuite, and while I use it occasionally because it offers greater capabilities than Buffer, I do prefer Buffer’s minimalist design. Hootsuite’s interface is busy but allows you to monitor in real time. If you’re developing relationships, this is a powerful ability to have.

Multi-task

I’m not telling you to turn off the TV when you get home, but there is no reason if you’re “vegging out” that you can’t use that time to schedule a few posts for the next day. Don’t let mindless tasks, like television watching, steal your productivity.

“Steal” Time

We all have moments where we’re waiting – before doctor’s appointments, before meetings, on the phone, while the kids finish up with practice, you get the idea. Many of us fill this time with other mindless tasks like scanning pictures of our friends’ pets on Facebook. Instead, use this time to be productive by finding content, scheduling it, or responding to people on social media. I am a firm believer in scheduling posts but the interacting cannot be scheduled, so use this stolen time to reach out and connect with people.

Look for Content Everywhere

Content ideas are everywhere – airplane magazines, overheard conversations, commercials, popular TV shows, as well as all over social media. Use the many messages that bombard you daily to find gems you’d like to share. Retweets are only the beginning.

Take Pictures

Along that line, take pictures of everything that moves you and some ordinary things that don’t. Pictures you take can be used in blogs, memes, and image quotes without concern over cost or copyright. Links with pics are more likely to get shared and clicked. Encourage staff to do the same.

You don’t need huge chunks of time to make connections on social media. The key to success in this area is the same in most business- or relationship-building. Give people what they want/find valuable; do so without expectation. Become a resource for them and help them. Be consistent in your efforts so they know they can count on you. This take minutes a day. Schedule good content and steal time for interacting. Then watch your relationships grow as people share your resources with others.

-Christina R. Green 

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Why We Need the TPP (“Trans-Pacific Partnership” or “Trade Is a Pain for Politicians”)

by Admin 19. August 2015 16:22

Wouldn’t it be great to join a free trade agreement with 12 countries in the world’s fastest growing region— one that covers 40% of the world’s GDP and one-third of global trade?

The Peterson Institute for International Economic estimates that by 2025, the Trans-Pacific Partnership (TPP) could boost Canadian incomes by an additional $10 billion per year and raise global incomes by $295 billion per year. Given our challenge with exports and a slowing economy, who wouldn’t want that?

However, the problem is that TPP is very ambitious. It would be the largest regional trade deal ever and would set a new standard for what trade agreements cover.

One of the fundamental challenges of trade agreements is that it’s easy to point to the industries or companies that struggle with new competition because they’re so vocal. We hear a lot less about who will benefit and who will gain new export deals five years into the future. Canada’s trade with the United States has quadrupled since we signed NAFTA, but nobody could have predicted which companies would flourish.

Some benefits are clear: the high import tariffs paid by Canadian exporters of meat, grain, oil seeds, seafood and certain forest products will drop significantly. Over 65% of Canada’s agricultural exports go to TPP countries. The TPP could double beef sales to Japan.

But for other industries, tariffs aren’t a big deal because they’re already low after years of trade liberalization. For them, the big barriers to trade come from a complicated web of regulations and red tape, like inconsistent customs procedures or regulations that don’t let companies send business data back to Canada. Companies are also worried about risks to their investments and intellectual property and about having to compete with companies that have an unfair advantage because of subsidies or weak environmental and labour standards. By tackling these problems, the TPP will significantly improve the business environment for Canadian financial services, manufacturing, natural resources and high-tech companies.

The stakes are even higher because the 12 members of TPP are just the beginning. Everyone hopes the TPP will expand, bringing in countries like the Philippines South Korea, Thailand and, eventually, China. An expanded membership would boost Canadian incomes by $26 billion and global incomes by $1.9 trillion annually. With all these massive traders, the TPP would be the new rulebook for global commerce.

That’s why we were so excited about last week’s meeting in Maui. The TPP could have been the biggest trade agreement sealed anywhere in the world in the past 20 years. But the deal failed to close because of disagreements, notably on dairy, sugar, automobiles and pharmaceuticals.

We shouldn’t point fingers because every country has its sensitive areas. And it’s harder for politicians, particularly now that Canada and the United States are going into election season.

That’s why it’s more important than ever that Canadian business and Canada’s chambers of commerce raise their voices to say that free trade will help us win more deals, make us wealthier and help us create better, higher-paying jobs. Our future depends on it, so let’s keep trying.

 

-Hendrik Brakel, CCC

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August Update @ The Chamber

by Admin 13. August 2015 13:55

Here at the Chamber, we are gearing up for a VERY busy September.

In partnership with our Ambassadors, we are hosting our very first Wedding Expo & Fashion Show. Those in the industry, or soon-to-be married, should not miss this!

Another special event we're hosting in September is a pre-election forum which will be moderated by no-nonsense news veterans Phil Johnson & Gord Vizzuti. We will have a few business-related questions for the candidates, and attendees will also have an opportunity to pose questions! To read what happened at the first leaders debate, click here.

We would also like to remind everyone to conserve water wherever and whenever you can as Okanagan has officially been declared at a Drought level 4, the driest rating. Further declines in stream, lake and aquifer levels could lead to water shortages and affect people, industry such as agriculture, wildlife and fish stocks.

For a list of all of our upcoming events, click here.

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Mark this Date on your Calendar as a Landmark for Canadian Businesses

by Admin 5. August 2015 08:36

When Canadians go to the polls on Monday October 19, some results from this summer’s two major economic earthquakes will be known to us. Or at least, more clear.

Greece: Is it still in the Euro community after the July emergency meetings? Did August see it go back to drachmas and a more local economy? It is currently insolvent with 26 per cent unemployment, and a debt to GDP ratio of 180 per cent, despite the last-hour agreement with the EEC in mid-July.

China: shares have dropped more than 30 per cent since June. US$340 billion has been lent out by brokers for stock purchases, and the downturn is forcing shareholders to sell to cover losses. Share prices would be even lower except the government halted trading in 1,300 companies and directed state-owned financial institutions to buy shares.

The Canadian Chamber of Commerce recognizes that many factors are contributing to uncertainty in the economic landscape, at home and abroad.

BC’s economy continues to be robust compared to many other jurisdictions in Canada. But we need to strengthen both it, and our Canadian economy, and to this end, the Canadian Chamber is calling on all federal candidates to take action with practical solutions in four areas: Access to a powerful workforce, Access to capital, Access to technology and innovation and Access to markets.

Federal parties must make it an essential to invest in transportation infrastructure, strengthen export and international tourism promotion services, tackle internal trade barriers, and streamline regulatory processes around natural resources.

We are committed to competing – and winning. We must invest in our local economy, and invest in our young people. Here at the Kelowna Chamber, we have now spent one full year introducing new, remarkably far-reaching innovative programs to entice, and retain, young people as they emerge from education into their business lives right here in the central Okanagan.

Developing local wealth and opportunities means we can pay for new technologies here at home, and produce income streams to pay for the education, infrastructure, health care and other advantages valued by Canadians.

The upcoming election is a unique opportunity to shape a Canada that is stronger, more economically stable and more competitive. A Canada that wins.

Potential leaders will have to explain how they will make Canada work between now and October 19. We’re helping that process by hosting a Federal Candidates Roundtable Breakfast September 25, which will air on valley radio and be well-attended by our members, who will arrive questions in hand.

We’ll all have questions; it will be an enlightening exercise in democracy to hear the answers. And to know how our candidates are planning to repair the economic cracks that continue to appear world-wide, especially in Greece and China, but most importantly, here at home.

-KCC

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Export Revolution: When Zero Is Actually Pretty Good

by Admin 31. July 2015 08:13

Economic weakness abounds! The country is in recession and exports are “stalled” according to the Bank of Canada. But if you dig into the numbers, something bigger is happening.

The first five months of export data show a huge 31% decline in oil, with natural gas falling 40%, a devastating hit to Canadian exports. The big question is whether the positive effects of a weaker dollar and a stronger U.S. economy can make enough of a difference. Skeptics remain doubtful about whether our exporters have enough capacity for a big increase in production: there are no state-of-the-art Canadian factories waiting for the lights to be turned on.

One of the most optimistic forecasts for 2015 came from our friends at Export Development Canada. Their forecast for 2015 export growth was... zero. A big goose egg.

Actually, this was a cheery forecast because they were essentially saying that Canada’s non-energy exports, such as manufactured goods, technology, services and agriculture, would be strong enough to offset the huge, gaping hole from the decline in energy sales.

So far, it looks like EDC is right. Canada’s export manufacturers have ramped up production and are in overdrive. The strongest contributor to growth is the automotive sector, rising 9% this year thanks to a resurgent U.S. economy. American auto sales hit 17.4 million vehicles, record levels not seen in 15 years, as our members in the auto sector are struggling to keep up with demand.

And it’s not just autos; exports of machinery and equipment are up 9%, electronic equipment up 15%, aircraft up a staggering 33%. Services will gain 5% this year thanks to a new rising star: tourism. So, does this make up for the huge decline in energy?

Not quite. So far in 2015, exports are down 1.3%. But if we see greater strength in the second half, as we expect from a U.S. economy that is firing on all cylinders, then Canada’s exports might even get to modest growth.

This means we are in the midst of a very strange recession. Ontario, Québec, B.C. and Manitoba are all set to grow at a healthy 2% range, with solid export growth across-the-board. Only Alberta and Newfoundland will see GDP contracting this year by around 1% and exports tumbling by 15% or more. Canada overall will see GDP rise by just 1% in 2015.

The big challenge is that growth will get harder from here. With a soft domestic economy, we’re increasingly dependent on exports. Thanks to weak commodity prices, further export gains can only come from rising productivity, world-leading technology and innovation. We need a comprehensive plan to improve competitiveness so that Canadian companies can win.

  

-Hendrik Brakel, CCC 

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The Return of Crisis: What it means for Canada's Economy

by Admin 23. July 2015 11:58

Dark storms are gathering over the global economy. Greece is once again at the precipice, insolvent and in need of another €85 billion to stave off collapse and recapitalize its shattered banks. At the same time, China’s stock market is in a 1929-style meltdown. Either one of these events would be a big shock to the global economy, but to have both at the same time is an economic earthquake.

Poor Stephen Harper. He would dearly love to be talking about how Canada had the strongest growth in the G-7, which it did up until 2012, and to tout his government’s sound management. But the economy isn’t cooperating and, worse, it’s being hammered by international forces that are beyond our control.

Let’s start with Greece, a country that is insolvent with 26% unemployment, collapsing banks and a debt-toGDP ratio of 180%. This is now its third bailout as it already received some €240 billion in support. The problem is the bailouts came with tough conditions: brutal spending cuts and tax increases that pushed the Greek economy from a recession into a downward spiral. The country’s GDP has contracted by 27% since the start of the crisis, more than the U.S. during the Great Depression.

That’s why many believe Greece would be better off if it exited the euro. The government could print drachmas, the former Greek currency, to spend on public works. This currency would plummet in value making Greece competitive in exports and a dream for tourists. But the country would default on its debts, and the financial system would collapse.

The point is either Europe spends limitless sums backing insolvent banks and a bankrupt government in exchange for half-hearted austerity that probably won’t work. Or Greece exits the euro. Both scenarios are bad news for European growth prospects.

The other economic superpower is China, where shares have plummeted more than 30% since June. A staggering US$340 billion has been lent out by brokers for stock purchases, and the downturn is forcing shareholders to sell in order to cover losses. Share prices would be down even further except the government halted trading in 1,300 companies and directed state-owned financial institutions to buy shares. This is likely to have ripple effects, hurting confidence and further slowing China’s economy.

What does it all mean for Canada? The outlook for commodities depends very much on global demand. Collectively, the European Union is the world’s largest economy. The world’s largest consumer of commodities is China. Both are showing signs of weakness, which is why commodities are in retreat and oil prices have dropped back to $52 a barrel.

Canada’s GDP has fallen four months in a row and its exports will decline again in the second quarter. On September 1, Statistics Canada will release the latest quarterly GDP number, which is likely to be negative, meaning Canada will officially be in a recession.

For the federal political parties, this is earth-shaking because it makes the status quo much less acceptable. More importantly, leaders will have to explain what they will do about Canada’s weak economy. Stimulus spending is helpful but short-lived. A much better option would be to make the Canadian economy more competitive so that business can win more sales and create more jobs. The Canadian Chamber of Commerce has a plan to turn Canada into an export and innovation powerhouse. It’s available here.

 

 

-Hendrik Brakel, CCC 

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Canada - Even better than Crest Toothpaste

by Admin 8. July 2015 07:20

This week, we're going to channel Hendrik Brakel’s research on the Canadian “tourism economy” in the first quarter of 2015. Brakel, The Canadian Chamber’s Senior Director, Economic, Financial & Tax Policy, has turned his sharp eye on Canada’s second largest export industry: tourism. His insights are worth noting. What could be more appropriate than talking tourism in the midst of our glorious Okanagan summer?

With a weak national domestic economy, Canadian business increasingly needs to look for opportunities in international markets. Canada’s overall economy shrank by 0.6 per cent in the first quarter. Consumers stopped spending, business investment went into retreat and inventories began piling up. Not totally the case in BC, however, we benefit when Canada grows.

Wouldn’t it be great if we could get foreigners to come spend money here in Canada? That’s why tourism is one of the top priorities of the Canadian Chamber of Commerce. We need it now more than ever. The Governor of the Bank of Canada warned that Canada’s first quarter would be “atrocious” and he was right. Consumers have put their credit cards away and spending barely grew, at just 0.1 per cent. More importantly, the hit from falling oil was severe as business investment fell by 2.5 per cent and support activities for the extraction sector plummeted by 30 per cent.

So, is anyone spending? Yes: first quarter 2015 visits from China to Canada were up 24 per cent, and from Mexico, 38 per cent. Wow. US visits to Canada also rose by 6 per cent. Canada’s tourism industry is larger than agriculture or the auto sector, supporting 170,000 small- and medium-sized businesses across the country. Overnight arrivals to Canada hit 2.32 million in 1Q 2015, a 6.8 per cent increase compared to the same period last year.

Closer to home, Tourism Kelowna’s most recent numbers for 2014 (estimated) tell us that the Kelowna CMA (census metropolitan area) room revenue is $80.6 million, an 8 per cent increase over 2013. Roomrevenue in Kelowna has grown every year for three years. Brakel points out that Canada’s tourismcontribution of $88 billion generates 627,000 jobs. It’s not all wine and Okanagan sunflowers, however; Canada has fallen from #5 (international destinations) to #16 in the last ten years. This is where I explain my toothpaste analogy. Proctor and Gamble spends $275 million on the Crest brand alone every year in the US. What does Canada spend on promoting the Canada brand in the US? Well, less. Much less. Zero, in fact.

Overall the Canadian Tourism Commission’s budget is half what it was in 2009. CTC doesn’t even market in the US, although a new infusion of $10 million was earmarked in May of this year for US marketing. That’s $265 million less than Crest toothpaste. Even the Canadian government spends about $90 million annually to market its own programs to Canada.

Marketing works. When Canada marketed itself last year in other countries, tourism revenue grew anaverage of 13.7 per cent from those countries. That’s triple the growth from countries where Canada doesn’t market.

So what is going on in the Central Okanagan? Is anyone marketing us? The answer is yes. Nancy Cameron, the CEO of Tourism Kelowna tells us their mission is to generate increased overnight visitordemand to create economic benefit for Kelowna and neighbouring communities.

So, is Tourism Kelowna spending? Yes. Wisely and well, it turns out. TK’s annual revenue last year was $2.7 million, primarily from hotel tax. Provincial and federal funding makes up a small 2 per cent of Tourism Kelowna’s budget. So how do they stretch it?

TK has been utilizing a content strategy and digital online ads “Get Outside and Do Some Stuff” in a surprisingly wide range of media: HGTV, epicurious, The Seattle Times, Tripadvisor, the Food Network, and more. Kelowna golf experiences also are featured in Tourism Kelowna’s TV ads on the most-watched sports and news networks. They’re modern, edgy, bright and short. Combined with social media marketing and the garnering of hundreds of travel articles, TK’s total “exposure value” for 2014 – which is a combination of paid advertising, leveraged value and editorial value – totalled a whopping $3.48 million. All this on a paid investment of only $867,800.

An Australian tourism report showed that each $1 of additional marketing was returning $16 ofrevenues from tourists, an extraordinary ROI. And, the US tourism industry is currently booming. April in the US saw the highest occupancy ever – 67 per cent – and the highest room demand (99.4 million) ever. US hotels are struggling to keep up with demand. With Canada’s cheap loonie and our soft economy, this is a great time to let the Americans know that we’re open for business. That’s why the Canadian Chamber is calling for a much larger investment, of around $120 million annually, to market Canada internationally. The CCC ran a “Stand up for Tourism” campaign for a week in May/June – a campaign we are all proud of, and know will help raise the issue of how important tourism spending and income is to all of us.

With thanks to Nancy Cameron and Hendrik Brakel, we’ll sign off now. Off to book a golf game, rather than shopping for toothpaste this afternoon.

-KCC 

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The Top 3 Issues in the Federal Election: Jobs, Jobs, Jobs

by Admin 30. June 2015 07:27

Jobs are always a top issue in a federal election, but with this shaky economy, it’s fast becoming the number one priority. Opposition parties have made much of the recent bad news: in the first quarter, Canada’s GDP shrank by 0.6%, exports tumbled 5.6% and corporate profits fell by 14% as the drop in oil prices slammed the Canadian economy.

And yet the Canadian labour market has held up well, adding an average of 20,000 jobs per month since the beginning of 2015. In fact, Canada added a rip-roaring 59,000 jobs in May. What gives? Where are these jobs coming from in the midst of economic despair?

Our regional differences are as stark as ever. Energyrich provinces once drove job creation while the manufacturing sector of Central Canada lagged behind. Now lower oil prices and a weaker Loonie have flipped the numbers. Still, the outlook is very mixed.

There are now 25,000 fewer jobs in the Alberta oil patch, but there is good reason to believe that the worst is behind us. Firstly, oil prices have stabilized around the $60 range and are headed slightly higher. The market no longer fears a drop to $20 as Citibank had predicted. Secondly, oil sands projects require huge upfront investments, but once those are made, they can go on producing for years with relatively low costs. And they need to keep operating continuously: most can’t be shut down without damaging the equipment. Thirdly, new investments are on-track with 10 new oil sands projects scheduled to start this year and 7 set for 2016 with total capacity over 300,000 barrels per day, according to Oil Sands Review. These are probably safe because once they’re partially paid for, “you don’t stop a project mid-cap-ex”. Some exploration and drilling activity has been scaled back, but job losses should ease.

In manufacturing, the outlook is much improved and the parties have all pledged support for the sector, which is certainly welcome. The challenge is that manufacturers are increasing production by investing in capital and new technologies: they’re becoming more efficient and more competitive. As a result, we’ll see an impressive resurgence in manufacturing and exports, but it may not translate into big job gains.

The political parties are missing the big picture by focusing so much on jobs in manufacturing and natural resources because together they account for just 11% of the labour force. The overwhelming majority (78%) of Canadian employment is in the service sector and recently it’s been the fastest growing part of our economy.

Services are a poorly understood grab bag of different occupations. It’s sometimes perceived as low-paying because it includes retail and restaurants, but there are also scientists, engineers, lawyers and financiers.

Over the past year, Canada’s fastest job growth is in sectors like business and support services (up 4.5% compared to last year), education (up 4.1%), finance and insurance (up 3.5%) and professional, scientific and technical (up 1.7%), while retail has barely budged (0.3%). And the gains in high-end services employment are spread right across the country.

With the election just around the corner, we would love to hear a politician say: “we need highly specialized skills to compete and succeed in the service economy. That’s why we must invest in Canadian education and training to make it the best in the world.”

 

-Hendrik Brakel, CCC 

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Commodity Wildcard: What is happening in China?

by Admin 22. June 2015 14:19

When someone asks where commodity prices are headed, they’re really asking: what’s the outlook for China?

Last year, China consumed more coal than the rest of the world combined and imported 70% of the world’s seaborne iron ore. In 2012, China accounted for half of the global growth in oil demand. It’s a commodity behemoth and the recent slow-down in the Chinese economy is a big reason for weakness in prices for this sector. Should we be worried?

China’s economic growth is definitely slowing, but the real concern is that official estimates of China’s GDP growth are overestimated. Economists are scratching their heads and coming up with widely varying estimates:

 China GDP Growth in Q1 2015    
Source   Estimate
 China’s Official Govt. Statistics Bureau  7.0% 
 Citibank   6.0%  
 Capital Economic  4.9%  
  Conference Board China Centre   4.0%  
 Lombard Street Research   3.8%

Why all this guessing? China’s growth numbers are always suspiciously consistent and always within 0.2% of the government forecast. Moreover, skeptical analysts see hard data, such as industrial production, energy consumption and construction, which are much weaker than GDP, and are using it to create their own estimates of what is going on. But it’s not just the data that is worrying.

The big question is China’s real estate. Property prices in 70 Chinese cities have fallen for more than a year, and 60 million empty apartments await buyers.

The Chinese government is well aware of the risk and has taken action. The Central Bank has lowered interest rates three times and it has twice reduced the amount of reserves that banks must hold, while easing mortgage rules. Still, new construction starts have fallen 16% in the first five months of 2015, a significant hit to the economy.

The challenge is that China is trying to shift the focus of its economy away from exports towards domestic growth, all while gently deflating a housing bubble. China has lots of resources, $4 trillion of reserves and its tight control of the banking sector gives it policy levers that other governments could only dream of. The Chinese government can intervene to stimulate demand, but China’s economy will grow a slower pace.

What does it all mean for commodity prices? The following graph shows China’s demand growth for oil, which has been massively volatile, oscillating from 16% growth to 2%. And that was during times of smooth sailing. We believe commodity prices should improve in 2015, but producers should brace themselves for more volatility as the world’s biggest consumer of natural resources has a bumpy road ahead.

-Hendrik Brakel, CCC

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