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Economic Digest

Business Without Borders ®

Economic Digest – November 2015


Canadians have been calling the macaroni-and-cheese dish KD for years. It is a staple of many Canadian childhoods, and dorm rooms, and the company is trying to capitalize on that mealtime nostalgia with a new name. Kraft Dinner has officially changed its name in Canada to what it has been known as in households for years. KD.  Kraft is rebranding its classic product to help its former customers recall those positive childhood memories and to reach for the macaroni-and-cheese boxes at the grocery store once again. KD will make the name change on all its Canadian packaging as well as its website and social media accounts. They will also remove synthetic colours and artificial preservatives from the product by the end of 2016.


In 2014, the world drank 249-billion litres of alcoholic drinks, a modest increase of one billion over the previous year. When measured by intake per head of the drinking-age population, consumption is down a little from a peak of 56.6 litres in 2012 to 55.4 litres in 2014. People in rich countries are the ones imbibing less, a moderation that has not yet been matched by emerging markets. India, for instance is the ninth-largest alcohol market, yet consumption per head is low. This is why drink companies see an enormous market waiting to be tapped. 


A new breed of tech-savvy farmer is emerging throughout Kenya. Sometimes called “telephone farmers”, they are making use of a growing number of technologies and platforms to help them choose and manage their crops more efficiently. And mobile devices are giving a growing number of them the ability to do this while continuing to live and work in the city. Sensors strategically placed around a farm monitor water tank levels, the amount of water in the soil as well as the performance of irrigation equipment. Also, infrared cameras can measure rates of photosynthesis, which can indicate whether crops are being watered too much or too little.


The Canadian federal government is developing regulations to ban the use of plastic microbeads in personal care products. Microbeads are small particles that are used in a range of personal care products such as body scrubs and toothpaste. Scientific papers have revealed that the presence of microbeads in the environment may have long-term effects on biological diversity and ecosystems. When products using microbeads are used and rinsed down the drain, the tiny plastic beads are too small to be caught by wastewater treatment facilities and go directly into lakes, rivers and streams.


A new UN study of population trends predicts that India will overtake China to become the world’s most populous nation by 2022, six years earlier than previously predicted. The report also says that Nigeria will replace the US as the world’s third most populous country by around 2050. Africa is expected to account for more than half the world’s population growth over the next 35 years.  The current world population of 7.3-billion will reach 9.7-billion in 2050 and 11.2-billion in 2100.


More companies have started up in Vancouver, BC, to meet an ever-growing demand for car sharing.  In 2007, there were 160 car-share vehicles in the city, today there are more than 2,100 vehicles. The newest car-sharing company is owned by the British Colombia Automobile Association (BCAA) and has 250 vehicles. Vancouver has presently 141 dedicated on-street parking spaces for car-share companies.


For the first time, a supercomputer from the Middle East has entered the top-ten list of the most powerful computers on the planet.  It is based at King Abdullah University of Science and Technology in Saudi Arabia and is rated the seventh most powerful in the world. The machine uses 200,000 processers arranged in more than 6,000 nodes, has 17.6 petabytes of storage and 790 terabytes of main memory. The US President recently signed an executive order calling for the US to build the world’s fastest computer by 2025. It would be 20 times quicker than the current leading machine, which is in China.


Ancient, highly valuable forests are being lost at an unprecedented rate from protected forest lands in Cambodia. Large corporations are using legitimate development permits to illegally clear land, losing about 2,000 sq. km. of forests every year. Under the guise of creating rubber plantations for instance, the trees are cleared and exported and in many occasions, the plantations never materialize. 


In contrast to most other commodities, cocoa prices are rising, by nearly a quarter earlier in the year. Consumption is forecast to be 30 per cent higher by 2020, as rising incomes, particularly in Asia, enable more people to enjoy chocolate.  Production, mostly by small-scale farmers in West Africa, will struggle to keep pace, because of insufficient use of fertilizers and meagre investment in new trees.  Coffee prices, in contrast, have fallen. Output has recovered in Brazil after a drought there, and is at a 20-year high in Colombia after replantings.


The film, television and video production industry in Canada generated C$4.2-billion in total operating revenue in 2013. The industry had total operating expenses of $4-billion resulting in an operating profit margin of 6.4 per cent.  Firms in three provinces accounted for the vast majority of operating revenue for this industry. Ontario led with 50 per cent of total operating revenues, followed by Quebec at 26.1 per cent and British Columbia with 17 per cent. The film, television and video post production industry earned $784-million with a profit margin of 9.9 per cent. Combined, visual effects and animation services at 38.4 per cent were the main source of this industry’s total sales.


The Federal government is giving C$630,000 to the University of BC Okanagan campus to support the region’s growing wine industry. UBCO will provide impartial guidance and expertise to the BC wine industry to clarify and promote BC’s unique identity as a wine region. The university will gather intelligence from international trade shows, workshops, symposiums and town hall meetings. The information will be developed into online tools to strengthen collaboration between key industry players.  BC currently has nearly 270 wineries and 900 vineyards on approximately 10,000 acres of land and the sector contributes two billion dollars annually to the provinces economy


The number of single-use plastic bags handed out by UK supermarkets has increased for the fifth year, rising to 8.5-billion, up by 200-million in 2013. A reduction to the number of plastic bags handed out was found in Scotland and Northern Ireland, where levies have been introduced.  Starting last month, large shops in England have to charge for plastic bags. Countries with a charge have seen a dramatic fall in the number of plastic bags taken from supermarkets.


After decades of worsening diets and a sharp increase in obesity, Americans’ eating habits have been changing for the better. Calories consumed daily by the typical American adult, which peaked around 2003, are in the midst of their first sustained decline since federal statistics began to track the subject, more than 40 years ago. The number of calories that the average American child takes in daily has fallen even more, by at least 9 per cent. The declines cut across most major demographic groups, including higher- and lower-income families, and blacks and whites. In the most striking shift, the amount of full-calorie soda drunk by the average American has dropped 25 per cent since the late 1990s.


Uncollected corporate taxes and penalties surged by over 25 per cent in Alberta last year. The mounting tab now totals more than C$1.1-billion, an amount roughly equal to one fifth the total amount collected from corporations over the last 12 months. The Finance Department reports that fully 38 per cent of what’s outstanding, or $431-million, will likely have to be written off. A scathing  report by the auditor general last Fall said the  department needed to update its tax collection policies, better train staff to pursue overdue accounts and establish more aggressive targets and effective strategies to get corporations to pay more of what they owe sooner.


Russia has submitted its bid for vast territories in the Arctic to the United Nations. Russia is claiming 1.2-million square kilometres of Arctic sea shelf extending more than 350 nautical miles, about 650 kilometres from the shore. Russia, the US, Canada, Denmark and Norway have all been trying to assert jurisdiction over parts of the Arctic, which is believed to hold up to a quarter of the planet’s undiscovered oil and gas. Rivalry for Arctic resources has intensified as shrinking polar ice is opening new opportunities for exploration. Canada has not yet finalised its claim to areas of the Arctic Ocean. It is rumoured that Ottawa’s submission will include 1.7-million square kilometres of ocean, including the North Pole.


A new study suggests that cheerleading in Canada has become a risky business, with hospital-treated injuries among participants tripling over the last 20 years. The trend is linked to the growing popularity of competitive cheerleading where teams perform acrobatic routines that involve holding and tossing young women high in the air. Sprains and strains accounted for most of the cases, followed by soft-tissue injuries, fractures, superficial wounds and concussions. The majority resulted from falls, usually from pyramids, stunts or tosses.


After years of robust e-book market growth, sales in Canada have flattened out in the past two years, while sales of traditional books seem to be stabilizing. Sales of print books, at 79 per cent of the market, still outstrip that of e-books at 18 per cent. E-book growth in the early years happened rapidly in part because all the big vendors, including Amazon, Kobo and Apple, entered the Canadian market around the same time. In 2008, Canadian e-book sales accounted for less than one per cent of the market.


A researcher at the University of New Brunswick says the number of seniors getting into the commercial driving industry is rising and policy makers need to be ready for the implications.  Seniors currently represent about 14 per cent of New Brunswick’s general driving population and within the next couple of decades it will increase to a full one –quarter. An analysis of seniors driving tractor trailers found that drivers over the age of 70 were involved in accidents at a rate of 6.3 times more than middle-aged drivers. New Brunswick recently did away with the mandatory retirement age of 65 for school bus drivers resulting in a wave of seniors taking up the job.


The infrastructure in Brazil is scant and shabby and according to the World Economic Forum it is ranked at 120th out of 144 countries for overall quality. Roads and airports are especially ramshackle. The rail network is barely one eighth as big as that of the US, a country of comparable size. Abroad, Brazil is offering concessions to upgrade and run important bits of infrastructure, including airports, ports, railways and roads and hopes to attract US$69-billion.  Foreign direct investment is badly needed but it was down from US$39.3-billion in the first five months of 2014 to $25.5-bilion this year.


The annual cost of prescription drugs in Canada hit nearly C$29-billion last year. Drug expenditure per capita in Canada was US$761 against an OECD average of $517. Canada was ranked number two among 31 OECD countries. The top drug therapy classes by total spending were: inflammatory conditions, high blood pressure, depression, diabetes and asthma. 

Bottles of champagne salvaged from a 170-year-old wreck have been tested in a lab by scientists seeking clues about historic winemaking methods. Among the results were very high levels of sugar, higher than most modern dessert wines, and traces of arsenic About 168 bottles were found 50 metres below the Baltic Sea in 2010, several of them unusually well-preserved due to the stable, cold and dark conditions.


After his trip to the Moon, Buzz Aldrin submitted an expense report from Houston to the Moon and a claim for US$33.31, an amount that would be $216.15 in today’s money. He also submitted a customs form for the moon dust that returned with him. 

NOTE: All details pertaining to CARM R2 processes are based on the current information available at the time of writing. As this is subject to change, it’s recommended you periodically check in with the CBSA or your customs broker.