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Economic Digest

Economic Digest – September 2017


This summer the US has experienced some of the most intense heat waves in decades. In parts of southern Arizona the mercury has climbed to a sweltering 48C. This has had an impact on the state’s infrastructure. In July, a single day’s heat wave grounded dozens of planes. As global temperatures climb higher, such incidents are likely to increase and climate change could have a dramatic impact on aviation across the world. Researchers predict that as early as the middle of the century, some 30 per cent of flights departing the hottest parts of the day will not be able to take off at their maximum weight because the hotter, less dense air will not provide enough lift.


Almost 1 in 7 Canadian households (15%) had a barrel or cistern for collecting rainwater in 2015. They were most frequently reported by households in the Prairie Provinces of Saskatchewan (28%), Alberta (25%) and Manitoba (22%). Less than half of Canadian households (43%) that had a lawn reported that they had watered it in 2015. Of those that did water their lawn, 63% used some sort of sprinkler system. Just over 6 in 10 (61%) households reported that they had a garden or an outside area with trees, shrubs, flowers or vegetables.


Guinness beer is brewed in Dublin, and then shipped to Europe and across the Atlantic. But first it is transported north in tankers to be canned and bottled in east Belfast before returning to Dublin for export. These tankers make some 13,000 border crossings each year. The company estimates that as a result of Brexit, even a short delay of 30 minutes to an hour for customs checks would add US$115 to the expense of each trip, costing some $1.5-million each year. Guinness is not alone. The abolition of customs controls years ago in Ireland has led to the creation of an all-island economy with supply chains criss-crossing the border. Bilateral trade between Ireland and the UK is now worth over $1.5-billion a week much of which could be threatened by the Brexit changes.


Every year during the summer solstice, a dog-eating festival takes place in Yulin, a city in the southern Chinese province of Guangxi. This year’s event ended with the usual controversy as photographs of dogs being cooked or treated cruelly went viral. Animal rights activists have demanded that China ban the eating of dogs and cats as Taiwan did earlier in the year. In some areas, villagers claim that between 2007 and 2011 a third of their dogs have been stolen, as hunters have roamed the countryside in vans killing dogs with poison darts and selling them on to middlemen.


35 years ago, Americans had fewer than 100 breweries to choose from. This year they have 5,000 breweries from which to choose. While the number of brands has proliferated, the number of drinkers has not. Sales have been flat for a number of years and 2017 has been especially slow so far. The dip is the result of two problems, one old and one new. First, the consumption of wine and spirits is growing more quickly than beer and has been for more than 20 years. The second is that after years of solid growth, craft beer sales have just stopped growing, possibly having reached its natural limit because there are only so many people who want to buy it.


More than two million live animals are transported by air every year in the US. Those going through John F. Kennedy airport in New York have the best of it, thanks to the Ark, which claims to be America’s first 24-hour privately owned airport terminal for animals. So far, it has hosted dogs, horses, cats, baby goats, parrots and a giant rat. Penguins and other water fowl have a bed-sized water basin and a frozen floor. Italian opera is piped into the Ark’s equine centre where handlers say music has a calming effect on horses as they await departure for racing, dressage, show-jumping and polo events. Meanwhile, humans trudge through security then board planes with narrower seats and less legroom then they had a few years ago.


Scientists believe that ladybirds could be the key to building an umbrella that does not blow inside out on a windy day. The colourful beetle manages to pack its wings away in complex origami-like folds beneath its carapace, before opening them out into a fixed, strong membrane in flight. Until now, the folding mechanism has remained a mystery because nobody could see beneath the outer spotty forewings, known as elytra but the secret has been unlocked using high-speed cameras and CT scans to observe the hind wings folding and unfolding.


Since the financial crisis, banks in the US have closed over 10,000 branches, an average of three a day. In the first half of 2017, a net 869 bricks-and-mortar entities have closed. According to the World Bank, in 2009 the US had 35 branches for every 100,000 adults, twice as many as in Germany. Since then, ultra low interest rates and a thicket of new regulations have squeezed bank profits and they have responded by trimming branches from a peak of about 100,000 to roughly 90,000.


Every day, Emirates airline catering facilities prepare 180,000 meals to service its more than 400 daily flights around the globe. The facility is one of the world’s biggest airline food factories. The scale of in-flight catering is astonishing as is its waste problems. Half-eaten meals, empty beer cans, plastic water bottles, napkins, discarded packaging all mounts up. According to the International Air Transport Association, airlines produced 5.2-million tonnes of waste last year and will produce 10-million tonnes annually by 2030.


Farmers have benefited from NAFTA more than any other industries which is why they are now fighting hard against messing with the treaty. In 1993 America exported corn, soya beans and other farm products worth US$8.9-billion to Canada and Mexico. By 2015, farm exports were worth $39-billion. Some 40 per cent of all American farm trade is with Canada and Mexico. Farm supply chains are surprisingly integrated. In 2014, the US imported 3.9-million eight-to-12 week old piglets that had been born and weaned on Canadian farms, then fattened on farms in Iowa, Minnesota and Illinois with many of the port cutlets being exported back into Canada. The beef industry is similarly integrated with around 300,000 head of cattle a year passing from one country to the other. American beef exports to Mexico reached almost $1-billion last year.


Honolulu has become the first major US city to ban pedestrians from looking at mobile phones, texting or using digital devices while crossing the road. The measure, which will take effect in Hawaii’s largest city in October, is aimed at reducing injuries and deaths from “distracted walking”. First time offenders caught gazing at devices, including laptops and digital cameras face US$35 fines. Repeat offenders face fines up to $99. According to the National Safety Council, incidents involving mobile phones accounted for more than 11,100 injuries in the US between 2000 and 2011.


The price of tomatoes has risen so much in India that armed guards have been deployed to protect shipments. There have been reports across the country of thieves making off with tonnes of tomatoes worth thousands of rupees. Shortages have seen the price for tomatoes double in various parts of the country due to heavy rains that have damaged crops.


China has agreed to allow imports of rice for the first time. The agreement gives US farmers access to the world’s biggest rice consumer, with China importing about 5-million tonnes last year. Though China opened its rice market in 2001, a lack of protocols on pests and plant diseases effectively stopped imports from taking place. According to OECD projections, the average person in China will consume 75kg of rice a year by 2024, compared with an average 13kg in North America and 5kg in Europe China consumes the equivalent of the entire US annual output every two weeks.


The British government is to end an arrangement that allows Irish, Dutch, German and Belgian vessels to fish within six to 12 nautical miles of the UK coastline. The move is to help take back control of fishing access to UK waters. This also means that UK vessels will lose the right to fish in waters six to 12 nautical miles offshore of other countries. Fishing contributed US$800-million to UK GDP in 2015 and employed about 12,000 fishers. In 2016 the fish processing industry supported about 18,000 jobs.


It is one of the simplest shoes on the planet, a piece of plastic, roughly the outline of your foot with a crude strap holding the sole to your toes. But the Brazilian company behind them took the humble flip-flop to new heights selling about 200-million pairs every year. Across Brazil there are whole shops dedicated to them, rows and rows, in all colours and styles. The company was sold recently for US$850-million.


Tens of thousands of Peruvians have been getting online using Project Loon, the ambitious connectivity project from Alphabet, Google’s parent company. The project uses tennis-court sized balloons carrying a small box of equipment to beam internet access to a wide area below. It uses artificial intelligence (AI) to steer the balloons by raising or lowering them to piggy-back weather streams. The connectivity has covered an area of 40,000 square kilometres, roughly the size of Switzerland.


From bumps and bruises to amputations and even death, data suggests that elevators in Canada are proving increasingly dangerous. In the past six years, six people have been killed and 1,225 people have been injured including 66 permanently in elevator mishaps in Ontario, which accounts for about half of Canada’s elevators. Data shows that the number of incidents more than doubled between 2011 and 2016. There are numerous causes for the problems including shoddy maintenance and failure to follow the rules. However, the bulk of incidents (75%) are blamed on “user behaviour.”


Based on growth projections by the International Monetary Fund (IMF), India is on track to knock Britain out of the world’s top five economies. India will overtake Germany in 2022 as the world’s fourth largest economy and push Britain out of the top five. But there will be many challenges for India to get there, including executing a wide-ranging overhaul of its tax system, sorting out distressed assets and reviving lacklustre productivity and substantially increasing employment opportunities.


A major bottler of water in Canada sources water from plants in Hope, BC and Aberfoyle, Ontario. The plastic bottles then travel hundreds, sometimes thousands of kilometres to be sold across the country. Bottles from Hope have been found in stores in Yellowknife, 2,126 kilometres away, while those from Aberfoyle were on sale in St. John’s. The tap water in those places is perfectly drinkable. Critics say that trucking water thousands of kilometres across the country created needless pollution and adds millions of empty plastic bottles to our landfill.


The world’s first full-scale floating wind farm has started to take shape off the north-east coast of Scotland. The revolutionary technology will allow wind power to be harvested in waters too deep for the current conventional bottom-standing turbines used. The Peterhead wind farm is a trial which will bring power to 20,000 homes.


It is reported that Buckingham Palace is hiring a Royal Shoe Breaker-inner: someone to walk around the Palace every time the Queen gets a new pair of shoes in order to prevent royal blisters from forming.

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.