Economic Digest – April 2017
Equity in Canada’s farm sector reached C$475-billion at the end of 2015, up $26-billion (5.8%) from a year earlier. Equity increased in every province except Newfoundland. The value of total farm assets rose to $561.7-billion mainly as a result of continued gains in the value of farmland (+9.0%) which represented two-thirds of total farm assets. The value of livestock and poultry inventories (including breeding livestock) fell by $2-billion which more than offset a $1-billion rise in the value of crop inventories.
McDonald’s acknowledged recently that it has lost 500-million customer transactions in the US since 2012 and has laid out plans to get more people back into its restaurants, including by letting them order and pay on their mobile phones. It will also market more aggressively items such as coffee and pastries to draw customers. The world’s biggest burger chain said that it lost some of its most loyal fans to other major fast-food chains, rather than to newer, smaller rivals. The chain says it needs to do a better job of making ordering convenient. Mc Donald’s outlined its plans after having recorded its fourth straight year of declining sales.
Norway has proposed changes to its US$900-billion sovereign-wealth funds, including increasing its stock market holdings by about $90-billion. The fund is the world’s largest. China has the most assets under management though, $1.6-trillion between its four funds. Meanwhile Arabia is trying to diversify away from oil and gas-based funds
China is now considering paying couples to have a second baby after the scrapping of rules limiting family sizes failed to produce an expected baby boom. Authorities imposed a “one-child policy” for almost four decades which was enforced with mass sterilizations, coerced abortions and violent intimidation from officials. Beijing relaxed the intrusive regulations after fears there were too few young people to support the growing ranks of the elderly. The financial burden of having a second child has been cited in surveys as the key reason why most couples do not wish to enlarge their families. China is promising to improve support for new mothers and is considering regulations that would establish nurseries at workplaces and extend maternity leave.
As a result of the B.C. government imposing a 15% tax on foreign home buyers in Vancouver, they are now taking a 45 minute ferry trip to Vancouver Island and buying there instead. They have helped push up housing prices to record highs in the B.C. capital. Strong demand and a shrinking number of listings have resulted in bidding wars and sales that frequently go above the asking price and sellers are not anxious to entertain conditional offers.
The Economist reports that taxi drivers overcharge for fares when they know passengers are travelling on expenses. Researchers in Athens who told their drivers someone else was paying were 17% more likely to be charged extra for their trip. They also found that women were overcharged more frequently than men, whether or not the driver knew they were travelling on expenses.
Sweden collected US$4.5-billion in overpaid tax in 2016. This seems to be deliberate. While interest rates since 2015 have been below $0.0% to stave off deflation, the government is applying 0.56% in interest on overpaid tax when returning it to the taxpayer. Smart individuals and companies knew they were better off storing money in the form of overpaid tax rather than watching it shrink in a bank.
Canadians are carrying fewer credit cards and heavier balances. In 2016, Canadians had 800,000 fewer credit cards but the country’s total balances still grew 3.3% to C$94.2-billion. On an individual level, the average credit-card balance grew 2.3% year over year, to $4,094. It is suggested that Canadians are becoming more loyal to the credit cards they have, in part thanks to competition among rewards programmes.
New research from scientists shows that 16% of hydraulically fractured oil and gas wells spill liquid every year in the US. They found there had been 6,600 releases from these fracked wells over a period of ten years in four states. The biggest problems were in North Dakota where 67% of the spills were reported with 4,453 incidents in the state, much higher than Pennsylvania, Colorado and New Mexico. The largest spill recorded involved 100,000 litres of fluid and was mostly related to storing and moving liquids. Equipment failure was the greatest factor.
In wide-ranging raids in China, fake cosmetics worth US$200-million, with products packaged to look like famous brands including Chanel, Christian Dior and Estee Lauder have been seized using barcodes copied from genuine products. Police began hunting the gang behind the fake cosmetics after they were made aware of counterfeit toothpaste being sold online a year ago. China struggles to contain a huge industry of counterfeiting, with tens of thousands of people being held each year for making false goods.
A Canadian government agency is recommending phasing out an insect-killing chemical used on farms to protect crops, saying it also harms aquatic bugs, including midges and mayflies. They say that imidacloprid, used on a variety of crops, should be phased out in three years for uses that do not have alternatives. It has been shown to harm aquatic insects in farm areas that are food for fish and birds. The European Union limited the use of imidacloprid two years ago after research showed it was risky for bees which are crucial for pollinating crops. So far there has been no ban on the chemical anywhere in North America.
Dominican Republic, Cuba and Jamaica were the top destinations for Canadian travelling to the Caribbean in 2016. Normally a robust region for Canadian travellers, it recorded a decrease in visitors last year for the first time since 1994, which was only the second decline since 1992. The 3.3-million arrivals from Canada in 2016 represented a 3.4% drop over 2015. Overall, tourists, including cruise ship passengers, spent US35.5-billion in the Caribbean last year. Canadians accounted for 11.3% of all 2016 arrivals in the Caribbean region while Americans provided about half.
A herd of plains bison have been successfully reintroduced to Canada’s oldest national park, more than 100 years after they were nearly hunted out of existence. The move will restore their role in the park’s ecosystem and has been welcomed by indigenous groups. The animals were once the dominant grazers in Banff National Park. In addition to being spiritually significant to Canada’s aboriginal groups, they supplied them with food, clothing and shelter.
When it is delivered in April 2018, the Royal Caribbean’s newest vessel will be the world’s largest cruise ship. At 1,188-feet long and 215-feet wide, the new 16-deck ship will weigh 230,000 GT (gross tonnage), nearly 3,000 more than the current record holder. It will carry 5,494 guests at double occupancy and will be equipped with 2,775 guest rooms. New features will include a 100-foot drop water slide and a bionic bar where drinks are served by a bionic arm.
When the king of Saudi Arabia made the first visit to Indonesia in more than 50 years, he travelled with an entourage of 1,500 including 25 princes. He also brought 460 tonnes of luggage, two elevators and two limousines for the nine day visit which it is hoped will result in US$25-billion of Saudi investment in Indonesia.
82% of Canadians made financial donations to a charitable organization in 2013 according to Statistics Canada. The total amount donated to charitable or non-profit organizations between 2010 and 2013 was C$12.8-billion, an increase of 14%. $5.2-billion went to religious organizations while $1.7 billion went to health-related organizations and $1.6-billion went to social services. 66% of Canadians ages 15 to 19 did volunteer work while 48% of Canadians aged 35 to 44 did volunteer work.
The UK could be fined over US$2-billion after failing to stop Chinese criminal gangs using the country as a fraud “hub” despite repeated warnings. Clothes and shoes have been imported through the UK at fictitiously low values for years. As a result, the UK budget has lost millions in customs duties. Organised crime groups use fake invoices to undervalue goods being imported from China which are destined for the black market in other parts of the European Union. Currently the UK Customs authorities are handling more than 550 cases relating to potential import fraud.
In 1956, Cessna started building the 172 training plane and more than 60 years on it is still in production. It can seat four passengers and weighs a little under 800kg without fuel or passengers. The maximum speed is 140mph and on a tank full of gas it can travel 800 miles. More than 43,000 Cessna 172s have been built so far. It has become the staple of flight training schools across the world and many consider it to be the world’s favourite aircraft.
Kuwait is to prosecute 38 state employees for taking off work and having their colleagues using silicone fingertips to fake their presence on a biometric attendance system. The system also required employees to have their faces photographed something their colleagues avoided and it was the lack of pictures that triggered the investigation. The government has been trying to reform work in the state sector where ghost employees and absenteeism have been big issues. An official report in 2011 found that only half of all state employees were showing up at work.
Canada is keen to boost its business ties with India and is moving ahead with attempts to seal a trade pact with the South Asian country. Two-way annual trade between the countries stood at C$8.3-billion in 2015 and is set to grow steadily. Trade flow with India has grown 30% from 2014 levels but the size of bilateral trade between the countries is relatively small, about one-tenth the size of Canada’s annual trade with China. Some of Canada’s largest pension funds and investment firms have in recent years put billions of dollars into Indian investments in infrastructure, real estate and even start-ups.
There is an unlikely industry thriving in a village north of Cairo, the making of mannequins. The use of mannequins in Egypt goes back to the early years of the last century, when Jewish-owned department stores imported them to display Western attire sold to expatriates and wealthy Egyptians. The products are exported to neighbouring countries like Sudan and Libya
The world’s top ten container ports by TEU (Twenty-foot equivalent units) are all located in Asian countries. Seven of the top ten ports are Chinese with Shanghai leading the way with 36.54-million TEU in 2015. Singapore was next with 30.92-million units. At number 11 globally, Rotterdam with 12.23-million units just missed cracking the top ten, but is the top European port. Los Angeles with 8.16-million TEU is the top container port in the Americas and 19th in the world.
Supermarkets in the UK are being urged to create a plastic-free aisle in every store to prevent tons of waste packaging ending up in the world’s oceans. Around 300-million tonnes of plastic are produced globally each year, yet just 12 per cent of it is recycled and much of it is washed into the seas where it is toxic to wildlife. The government is considering introducing a US$0.50 charge on all plastic bottles which can be reclaimed when they are recycled.
Lithuania’s tourism chief has been forced to resign after an ad campaign to promote the Baltic country used photos of Finland and Slovakia.