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

Is this the end of the Commodity Supercycle?

by Admin 26. February 2015 14:06

These are tough times for commodities. Oil is grabbing all the headlines, with prices plunging 50% since June of last year. But agriculture prices are also soft, especially corn, which is down 53%. Metal prices have been weak for a while, particularly iron ore and copper, which are 40% lower than where they were two years ago. So is this the end of the commodity supercycle? And, what does that mean for business? A commodity supercycle is a period of unusually strong industrial and urban development, where demand for natural resources outstrips supply, sustaining decades of high prices. Think of post World War II or the industrialization of the United States. There is strong evidence that we’ve been riding a commodity supercycle. From the late 1990s to 2008, almost all commodities were experiencing real price growth rates exceeding 10% per year. Oil prices rose 1,062%, copper prices soared by 487% and corn prices were up 240%1. The real price of food increased almost 80% to reach the highest levels in history. Commodity prices crashed during the great recession of 2009 but they recovered quickly and kept on climbing. Why the soaring demand for commodities? During this time period, there was an explosion in the size of the middle class. According to the World Bank, the emerging market middle class (people earning between $2 and $13 per day) rose from 894 million in 1992 to 2.06 billion in 2005. It’s an incredible story: more people were lifted out of poverty than at any time in human history. And the first things people want when they join the middle class are pretty simple: better food, a nice home with a refrigerator and maybe even a vehicle. Look at the adjacent graph of car sales in China. Quite amazing, but if we graphed car sales in Indonesia, refrigerators in South Africa or home construction in India, the graphs would all look similar. All this requires enormous natural resources. For decades, producers of energy, metals and agriculture struggled because they could barely keep up with demand. Then in 2013, with record resource production, demand growth suddenly began to slow and commodity prices fell. So is the party over? Emerging markets have slowed, but we have to look at long-term prospects. The IMF is forecasting that emerging Asia will average 6.5% growth through 2020; Latin America and Africa will grow at 3.2% and 6% respectively. The OECD is forecasting that the global middle class will increase from 1.8 billion in 2009 to 3.2 billion in 2020. That’s a lot of new consumers and a lot of commodities needed as people get wealthier. So the commodity supercycle is not over, but when demand depends so much on emerging market strength, we have to anticipate volatility. Prices will recover but not to the lofty heights of 2007. This is good news for Canada because we have some of the most efficient natural resource producers in the world. Visit Powerofcanada.ca for more information.

 

-Hendrick Brakel, CCC 

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Chamber Myths De-bunked

by Admin 20. February 2015 13:13

This week we recognized Chamber week by hosting an event each day of the week to provide you with the opportunity to network, dine and engage to learn what we do for the business community. 


Have you caught yourself wondering what a Chamber of Commerce is and what it does for business? Here are some myth's - debunked.

* Myth #1: The Chamber of Commerce is a Bank. We are not a bank, we are the most broadly-based business organization working on behalf of small to large businesses.

* Myth #2: The Chamber is a private club. We are an accessible, modern, organization supporting local business in their community.

* Myth #3: Chambers are a part of Government. Chambers of Commerce engage with all levels of government as a voice, advocating on behalf of businesses, but are not government.

* Myth #4: All we offer is Group Insurance Benefits. Chambers have a long list of exclusive member benefits to offer businesses, Group Insurance is just one of many.

So if you've been on the fence, now is the time to join your Kelowna Chamber of Commerce and access Canada's largest business network. It's just smart business.

-KCC

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Chamber of Commerce Week

by Admin 13. February 2015 08:27
February 16, 2015, marks the beginning of Chamber of Commerce Week in Kelowna, as officially proclaimed by Mayor Colin Basran, as well as across BC. Chamber week is an opportunity for Chambers of Commerce throughout British Columbia to showcase their work on behalf of business communities across the province.

This year, Chambers are celebrating the theme of "Leadership in Action" - a theme which highlights the leadership Chambers bring to their business communities, working hard to enhance B.C. as a business-friendly jurisdiction with strong opportunities for all British Columbians.

And this leadership delivers results. Following on B.C. Chambers' active advocacy, the federal and provincial governments working in partnership, were able to deliver a significant win for B.C.'s businesses: the launch of the Canada Job Grant in B.C.

Thanks to the hard work of Chambers in B.C., working closely with a responsive government, employers will be able to apply for up $10,000 in training funds. The Canada Job Grant, funded by the Government of Canada and administered by the Province of B.C., is an innovative cost-sharing program that helps employers offset the cost of training for new or current employees. 

And that's just one of many positive changes that the Chamber network has led for B.C. businesses. Among many areas of impact, B.C.'s Chambers have been a key voice:
* encouraging balanced budgets at all levels of government;
* continuing to call for solutions to B.C.'s skills gap; and
* encouraging municipalities to actively support local economic development.

As members of the BC Chamber of Commerce, Chambers throughout the province are part of B.C.'s most extensive business policy development process. This process brings B.C. businesses' innovative ideas and on-the-ground insights to B.C.'s decision makers, and helps shape an ever more business-friendly province. Chamber network policies span from fiscal and tax policy to infrastructure to industry-specific issues.

At the local level, Chambers throughout B.C. are catalysts for change, bringing together business and community leaders to figure out how to take each community forward.
Here in Kelowna, the Kelowna Chamber of Commerce has been working with the Okanagan Water Basin Board. The Chamber developed a policy resolution that was taken successfully to the provincial and federal Chamber levels, calling for support in keeping invasive mussel species out of BC. The Federal Government acted swiftly to propose regulations to protect our fresh water lakes. 

Taxation and equity for business played a role in the Kelowna Chamber of Commerce work relating to the Property Transfer Tax, asking that the Provincial Government increase the 1% PTT threshold from $200,000 to $525,000 with 2% applying to the remainder of the fair market value; and index the 1% PTT threshold of $525,000 using Statistics Canada's New Housing Price, and make adjustments annually. 

Credit unions in the province are being impacted due to changes in the small business tax regulations, bringing the Chamber to recommend that the government extend the small business tax benefit permanently to credit unions to meet their unique needs with regulations and tax regimes that keep them strong and viable.

Another policy, developed collaboratively with the valley Chambers of Commerce relates to the call for the Provincial Government to sign an agreement to negotiate with the Government of Canada to conclude a fair and equitable feasibility process to determine the economic impact of a national park in the South Okanagan-Lower Similkameen.

So as B.C. celebrates Chamber Week, don't miss the opportunity to swing by the Kelowna Chamber for their open house on Monday from 4:30-6 pm, or register for one of the other Chamber Week events, at kelownachamber.org/events & join us in celebrating the leadership, energy and can-do attitude that B.C.'s Chambers bring to our communities.
 
-KCC 

  

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The Cream of the Crop... or the Young at the Top

by Admin 12. February 2015 12:33

Kelowna’s Top Forty Under 40 has officially reached the mid-way mark! With 21 remarkable people across the valley having already been interviewed by the Daily Courier, the pressure is on.

Haven’t submitted your nomination yet? You’re in luck! We will be accepting nominations no later than 12:00pm on March 17th, 2015.

We’re looking for individuals under 40 who have made meaningful contributions to the community both professionally, and on a community level. Not a ‘business person’? That’s okay! We are looking to celebrate all kinds of success and achievement – the only rule is you must be under the age of 40.

To nominate someone, simply send an email to topforty@kelownachamber.org or call 250-469-7357 and tell us why you feel they should be Kelowna’s Top Forty Under 40.

These forty features will end June 17th, culminating in a wrap-up event on June 23rd, 2015, celebrating the success of these remarkable individuals and their accomplishments. For more details, or to hold your ticket, please contact Stephanie at 250-469-7357.

We can’t wait for your nominations! See current nominees here

 

-KCC 

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Interest Rates: How Low for How Long?

by Admin 27. January 2015 09:34

How many times have Canadians been warned that interest rates will increase eventually? What a surprise when the Bank of Canada lowered the rate to 0.75%, a move that no economist had predicted.

 The big question is what does it mean for Canadian business? The first and most immediate effect was to weaken the dollar, which fell 1.5 cents following the Bank’s announcement to $0.81. Going forward, we’ll see even more pressure on the loonie. The market expects the U.S. Federal Reserve to start raising interest rates sometime in the second quarter of 2015. That’s not going to happen in Canada, and in fact, there is a slim chance that our rates could go even lower. As a result, investors will move out of Canadian securities towards the U.S., weakening the loonie even further.

In terms of the actual cost of business loans, we are unlikely to see much change. In normal times, the Bank of Canada’s official overnight rate provides a basis for the private sector banks’ prime rate. But when official rates get really low, this relationship breaks down. Banks have to cover their cost of funds—the amount they pay to borrow plus their administrative costs— which is higher than 0.75%. This means that banks probably won’t lower their prime rate; most will keep it at 3%. In the U.S., the prime rate is 3.25% even though the Fed’s official rate is near zero.

What about longer-term bonds? Those yields edged downwards, but these have been headed lower for a very long time. In fact, they’ve been trending downward for the past 15 years right across the developed world. According to the IMF, this is because emerging markets like China have accumulated huge amounts of reserves and as they keep buying rich country bonds, rates are held down. At the same time, market crises have pushed investors away from riskier assets into sovereign bonds, while uncertainty has depressed global business investment so there is little demand from borrowers competing for funds. The IMF believes that long-term interest rates will eventually return to the 3-4% range but not much higher.

Finally, last week’s rate cut speaks volumes about the Canadian economy. There has been a lot of speculation in the media that maybe lower oil prices could help keep Canada on balance if the negative impact on oil producers is offset by stronger manufacturing in Ontario and Quebec. The Bank clearly disagrees: Governor Poloz called low oil prices “unambiguously bad” for Canada. In fact, a lower loonie is good for some manufacturers, but the beneficial effects could take time to materialize, and consumers may not rush out and spend the money they save on gas.

Nevertheless, we believe oil prices will get back to the $60-$70 range by year-end. An accelerating U.S. economy combined with an 80-cent dollar will eventually boost our exports. Stronger economic growth is ahead, even if 2015 is a rough ride. And eventually, interest rates will rise. When we joke that interest rate warnings are like “the boy who cried wolf,” remember the moral of the story. The wolf eventually does show up (though not until the second quarter of 2016).

 

-Hendrik Brakel, CCC 

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A look ahead at the global economy in 2015

by Admin 15. January 2015 10:57

What an exciting year for business! The Canadian Chamber of Commerce just published its Crystal Ball – Outlook 2015 Report, and big changes are coming to the global economy. Canada performed well last year, but there are vulnerabilities just over the horizon, from highly indebted consumers to worries about our housing market and now weaker oil prices. But, there are also big opportunities as the U.S. economy is accelerating into a booming recovery while the weak loonie is boosting our exports.

Around the world, we’ve been seeing signs of weakness even after last year’s dismal results. Emerging markets, which used to be the engines of global growth, have slowed and are much more vulnerable than in the past. Brazil is struggling with stagnation, Russia is in a deep recession and even mighty China was forced to lower interest rates to prop up its bubbly housing market and reduce financing costs for business.

Across the Atlantic, the euro crisis is back, as disappointing growth combined with mild deflation. The 18 countries of the euro zone will see growth of around 1% in 2015. And, there are risks to even this gloomy scenario as a radical leftist Syriza party is leading the polls in Greece and could form the next government on January 25. European governments may find themselves in a showdown with a Greek prime minister demanding debt relief and an end to austerity. Markets will be troubled by renewed fears of a euro break-up, even though that remains unlikely.

There is really only one major economy that is picking up strength. Fortunately, it’s the world’s largest, the United States of America, with 20% of global GDP. The U.S. economy grew a staggering 5% in the third quarter of 2014 thanks to a resurgent consumer and astonishing strength in the corporate sector. Unemployment in the U.S. is down to just 5.8% and wages are rising.

The big question for 2015 is whether the U.S. economic resurgence can pull other markets along with it, like a huge locomotive dragging the global economy forward. We think it can, and that’s why we’re optimistic that global growth can accelerate to 4.1% in 2015 from 3.3% in 2014. The second big question for 2015: Is Canada ready?

Exports to the U.S. rose 12% last year in spite of weak energy prices. Some of the fastest growing sectors were auto parts, lumber, aircraft, plastics, medicines and machinery. With a rip-roaring U.S. economy and a weaker loonie, the growth could be even better this year. That’s why many Canadian companies may have to scramble to build the capacity, in terms of investment and human capital, to keep growing.

The main challenge for our economy is that, in order to maintain a healthy rate of growth, we have to shift away from domestic consumption, as consumers put their credit cards away, and focus more on exports and business investment. Oil prices are likely to remain weak through 2015, and the Bank of Canada warned that this could subtract 0.3% from GDP growth.

This means Canada’s manufacturing, technology and service sectors will need to shift into high gear. Risks abound, but there are so many opportunities, and 2015 will be an exciting year for Canadian business. Are you ready? 

 

-Henrick Brakel, CCC 

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Is there a woman on this wall?

by Admin 5. January 2015 11:16

What do we, as women, need in order to be successful leaders? Tara Cookson, our latest speaker for the Kelowna Chamber of Commerce Inspire Series [a branch of the Women’s Leadership Network], points out that maybe what we need most, are other strong female leaders to look up to.

Cookson is a PhD researcher at the University of Cambridge, where she is also founding director of the Gates Cambridge Professional Development program.

She is the second recipient of the Bill Gates Sr Prize in recognition of her remarkable research, demonstration of leadership and dedication to improving the lives of others. Needless to say, she fits the image of a strong female leader.

Cookson spoke to her moments of obligation, the times in her life where she knew she had to dive in and do the work. For her, her journey started with her involvement at the Kelowna Women’s Resource Centre.

One thing that really stuck with me was a point that Cookson posed towards the end of her speech, “is there a woman on this wall?” Cookson told the story of an experiment that was done with students giving presentations to a panel of judges with various images on the back wall; one of the images being a strong male leader, one of a strong female leader, and one of a blank space. To summarize: a significant improvement was seen in the female students’ volume, confidence, and overall speech when facing the wall with the image of a strong female leader.

So, this is my question: how do we get more ‘women on the wall?’ If we need more strong female leaders to look up to, we really need to start giving each other that helping hand. We need to encourage, to motivate, and to help on another in our journeys so that we can cultivate more of these leaders.

Another question Tara posed:  if we feel we need more women leaders, why not start with ourselves?

We need to change our mindsets and to recognize not only the potential of those around us, but our own potential as well. We need to help each other through our struggles and we need to create a network of people who can help make things happen and support one another.

If you are a strong female leader, or are inspired to do more, we would love to hear from you. Email stephanie@kelownachamber.org for more information or to find out how you can get involved.

 

- KCC 

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How low can oil go?

by Admin 15. December 2014 09:57
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.

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The State of the Global Economy

by Admin 25. November 2014 12:02

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

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Being CEO of your life – a lesson from Carlos Fox

by Admin 17. November 2014 12:14

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? 

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