Saturday, December 22, 2007

PM Announces Canada’s New Food and Consumer Safety Action Plan

Prime Minister Stephen Harper last week announced the Food and Consumer Safety Action Plan, a comprehensive set of proposed new measures that will make Canadians safer by legislating tougher federal government regulation of food, health, and consumer products.

Speaking at the Salvation Army Christmas Toy Depot in Ottawa, Prime Minister Harper noted that there has been a sharp rise in the number of product recalls involving unsafe toys, food and drugs in recent years. “Canadians rightly expect their federal government to police the safety of the products they bring into their homes,” the Prime Minister said. “Today, I’m pleased to announce a plan that will significantly enhance our ability to do just that.”

The proposed legislation, to be introduced in the New Year, will transform the government’s approach to regulating product safety. For the first time in Canada, instead of merely reacting to problems, the regulations will be designed to prevent them. New measures will include:

• Mandatory product recalls when companies fail to act on legitimate safety concerns.

• Making importers responsible for the safety of goods they bring into Canada.

• Increasing maximum fines under the Food and Drug Act from $5,000 up to current international standards.

• Better safety information for consumers and guidance to industries on building safety throughout their supply chains.

“The Food and Product Safety Action Plan delivers on our Government’s commitment to building a stronger, safer, better Canada,” said Prime Minister Harper. “This plan will benefit all Canadians: it will improve our safety and health, reward responsible industry players, and enhance Canada’s reputation abroad as a country whose product safety standards are second to none.”

The Government will begin engaging consumer and industry stakeholders on how best to proceed with the Food and Consumer Safety Action Plan in the New Year.

Surprise of the Year: Deflation Dissipation

(Stephen Poloz — Export Development Canada)

Each year, just before the holidays, we take a look back and recall the surprises that took place in the previous 12 months. 2007 was loaded with candidates.

Start with the world economy. We began the year with the world in decent shape, but concerned that the U.S. housing sector could surprise on the downside. Downside surprise indeed! Despite repeated reassurances from policymakers, the U.S. housing sector went into a meltdown and there is no evidence to suggest that it is over. The erosion of consumer confidence is affecting the rest of the economy, and economists are now open to the possibility of a U.S. recession.

As the year unfolded, many predicted that the rest of the world would decouple from the U.S. economy. Surprise again! The decline in the U.S. dollar over the year boosted U.S. exports and reduced U.S. imports, thereby directly spreading the U.S. slowdown to the rest of the world. Plus, the credit crunch that emerged in August – spawned by the U.S. housing meltdown, but surprising in its severity – immediately went international, and its effects are still growing today.

Slower economic growth generally leads to lower inflation. Besides, in recent years the world has been cushioned from inflation pressures by deflation in goods exported from China. Surprise again! Inflation is back on the policy radar screen. Oil is above $90 per barrel, wheat at $10 per bushel. The quality of some of China’s exports has come into question, leading many consumers to begin a switch to higher-priced alternatives. Plus, the growing awareness of global warming, supported by Al Gore’s receipt of the Nobel Peace Prize, will gradually embed environmental costs into consumer prices – thereby potentially creating a modest uptrend in global inflation.

It is tempting to blame political risk for high oil prices, which boosted the demand for bio-fuels, thereby pushing up food prices. Yet, factor in the surprising U.S. intelligence flip-flop Iran’s nuclear program, plus the apparent political shift in Venezuela, and the prices of commodities really do look surprisingly high. Although higher prices like these do not constitute inflation per se, consumers can’t tell the difference. Nor do they care whether the Canadian dollar shot above the U.S. dollar because of high commodity prices or pure speculation – the only unsurprising part of the dollar story was the brevity of its surge. In the end, it averaged about 93 cents in 2007.

And then, attentive readers will recall our surprise of the year in 2005 – the $39 DVD player – which then fell to $28 in 2006, prompting us to boldly forecast that DVD players could be free by Christmas 2009. Even this story, however, supports the deflation dissipation theme – a visit to our local rock-bottom retailer this Christmas found, surprisingly, the same $28 price point as last year.

The bottom line? These surprises underscore the massive contrasting tensions – between slowing economic growth and awakening inflation potential – being balanced by global financial markets today. 2007 was financially volatile, but don’t be surprised if 2008 is even more so.

Thursday, December 20, 2007

U.S. Legislators Renew Push to Delay Passports at Canadian Border

American legislators are renewing their push to delay requiring passports at the Canada-U.S. border until June 2009 by slipping the measure into a critical spending bill.

But the Homeland Security Department says it's determined to move forward with the new security requirement next summer as planned, regardless of how Congress votes. The U.S. House of Representatives approved the $516-billion measure funding 14 cabinet agencies and troops in Afghanistan, setting the stage for a year-end budget deal with the White House.

President George W. Bush has signaled he'll ultimately sign the measure – assuming up to $40 billion more is provided by the Senate for the Iraq war – despite opposition from Republican conservatives. In an unusual two-step, legislators first voted 253-154 to approve the omnibus spending bill; they then voted 206-201 to add $31 billion for troops in Afghanistan to the measure. The combined $516-billion spending package is set for Senate debate on Tuesday. Canada has long supported a delay in the passport requirement to ensure the security system is properly in place, avoiding nightmarish traffic lineups and long wait times for passports.

The extra time was written into the House bill by New York Democrat Louise Slaughter. She included a provision for withholding $75 million to implement the plan until officials report on the status of new identification cards and high-technology driver's licenses that are being developed as alternatives to passports.

“The traffic across our northern border is critical to our economy and we must never sacrifice our relationship with Canada with an ill-conceived attempt to increase border security,” said Slaughter. “Economic security and physical security are not mutually exclusive. We can, and must, have both.”

But Homeland Security spokesman Russ Knocke said he doesn't believe the stalling measure will impede plans to implement the so-called Western Hemisphere and Travel Initiative at land and sea crossing starting next summer. “A delay in WHTI implementation would create the very type of chaos at the border that Congress has repeatedly urged our department to avoid,” Knocke said.

Canadian Embassy officials called the latest move on passports “a very positive step.” Ambassador Michael Wilson has been lobbying for more time for more than a year. “On the present timetable, Canadians and Americans do not have time to get the documents they will need,” Wilson said in an editorial published last week in the Seattle Post-Intelligencer.

“Neither country can afford the kind of backlog that both passport agencies experienced last winter when the new ... requirements were implemented for air travellers.Many more travellers cross by land and there needs to be a realistic and transparent plan to ensure that legitimate tourism and trade can continue."

Wait times for passports were up to 12 weeks, from four to six weeks, in the United States before air passengers were required to use the documents in January.

The land and sea portion of the rule has already been delayed once to give U.S. officials more time to develop a passcard dubbed “passport lite” that will be cheaper to get. Several states and some provinces are interested in developing enhanced driver's licences that will contain proof of citizenship like passports. Last week, Homeland Secretary Michael Chertoff called the high-technology licences a “win-win for security and convenience.”

Starting Jan. 31, the United States will require all Canadians to provide some proof of citizenship, like a birth certificate. Adults will also need a government-issued photo ID. Customs agents will no longer be allowed to simply ask people where they were born.

Tuesday, December 18, 2007

Labour Shortages Are Global

(Stephen Poloz, Export Development Canada)

We hear about labour shortages a lot – there are not enough doctors, carpenters, plumbers, or skilled workers in general (except, perhaps, economists). This is becoming a global problem.

Economists will tell you that labour shortages are not supposed to happen. When something is in short supply, excess demand pushes the price up. This reduces demand and increases supply. When it comes to skilled labour, the supply response is by necessity gradual, and may be very difficult, since it requires education and, perhaps re-education of transitioning workers.

Perhaps the bigger problem is that global population growth is on the decline. Population growth averaged 2% per year in the 1960s and 1970s and has been easing ever since. Growth was 1.2% for the past five years, and this is projected to fall to as little as 0.4% by the 2040s. Some countries are already experiencing population declines, such as Japan, for example.

This slowdown in labour supply has contributed to declines in unemployment rates to near historical lows in many countries. This has made the workers available in emerging markets look even more attractive. In a country where population growth is very low, then, the choice is clear: either allow more immigration to fuel domestic growth, or grow the economy offshore.

An interesting case study is the Czech Republic, where the population has been in decline since the mid-1990s. The share of the population that is over 65 is now 20%, and it is expected to rise to over 30% by 2020. This is much worse than the world situation, where old-age dependency is presently around 10%, and will only rise to about 14% by 2020.

As a consequence, Czech companies no longer talk about the shortage of skilled people, they talk instead about the shortage of people, period. They are willing to do all necessary training themselves. They have gone on recruiting missions to such places as Vietnam or Belarus but are finding that channel of growth to be very costly and difficult to plan.

The solution? Grow the company without labour force growth. That means increasing automation in domestic plants, relying on only the most skilled workers, and expanding the business in other countries. A global production structure, facilitated by international trade, is the quickest route to higher productivity growth, as experience in the U.S. illustrates. That’s why global cross-border investment has been growing by some 30% per year in the last 3-4 years, and why a country like the Czech Republic can see inbound investment growing by 42% per year. Outbound investment is growing even more rapidly, albeit from a lower starting point. And policymakers are catching on: CzechInvest, the government agency traditionally tasked with attracting investment to the Czech Republic, is now in the business of helping Czech companies invest abroad as well.

The bottom line? Population trends are yet one more force fuelling globalization. Even countries with a positive mix of population growth and immigration are likely to see steady upgrading of domestic skills and the increasing use of offshore structures to cope with labour shortages.

Small Firms Fail to See Benefits of Joining C-TPAT

(American Shipper via CSCB)

Many small and medium-size importers fail to see the value of joining the U.S. government’s Customs-Trade Partnership Against Terrorism (C-TPAT) program.

According to a recent survey by Trade Bridge International, an industry association for small to medium-size companies, about 55 percent of firms with less than 500 employees could not determine the benefits of participating in C-TPAT.

Trade Bridge sent its 10-question survey to about 8,000 individual e-mails and received back more than 100 responses for a “snapshot” of how SMEs feel about C-TPAT, said the organization’s secretary general Leslie L. August to attendees of a World Customs Organization meeting in Brussels Tuesday.

The survey also found that 37 percent of companies cited either lack of time or money, or both, to devote to applying for C-TPAT status. More than 50 percent of those firms surveyed said they were either never invited by CBP or their customs brokers to become C-TPAT participants.

CBP has published a C-TPAT cost-benefit analysis on its Web site, but the Trade Bridge survey found that more than 80 percent of SMEs have not read it.

August said that to increase small importer participation in C-TPAT, CBP and the brokers must do a better job with communication and outreach about the program.

Mike Laden, president of customs and trade consultancy of the Trusted Trade Alliance, said a setback for C-TPAT, which now includes an enrollment of more than 7,800 importers, carriers, terminal operators, customs brokers and freight forwarder/consolidators, has been CBP’s failure to establish a “bright line” between the C-TPAT members and those who do not participate. Laden said that his firm’s research found no appreciable increase in cargo inspections for non-C-TPAT members versus those firms in the program.

“There should be a 50 percent increase in the exam rate” for non-C-TPAT firms, he said. CBP should take a “harder line” with the program to separate the “known from the unknown” in the supply chain, Laden added.

Monday, December 17, 2007

What’s the Buzz about International Trade Data System?

(U.S. Customs and Border Protection)

Recent legislation and growing interest from within the government has created a buzz about the International Trade Data System (ITDS), resulting in greater visibility throughout the government and increased participation by federal agencies. ITDS is the mechanism for coordinating intergovernmental participation in U.S. Customs and Border Protection’s new Automated Commercial Environment trade processing system, known as ACE. In recent months, ITDS has become a key initiative in ongoing efforts to ensure the safety of imported goods and streamline the collection and use of import/export data across all government agencies that share responsibility for import safety.

Momentum began building in 2006 with the passage of the Security and Accountability for Every Port Act, which mandated participation in ITDS by all federal agencies requiring documentation for clearing or licensing the importation or exportation of cargo. With this mandate, nine additional agencies joined ITDS. By requiring use of ITDS, the SAFE port act recognized the ITDS purpose and potential to eliminate redundant information requirements, efficiently regulate the flow of commerce and effectively enforce international laws and regulations by establishing a single web portal for the electronic collection and distribution of standard electronic import and export data required by all federal agencies.

Providing further impetus for ITDS efforts, in July the president issued an executive order establishing an interagency working group on import safety, chaired by the secretary of the Department of Health and Human Services and comprised of senior officials from 12 federal departments and agencies, each with unique and critical import safety responsibilities. Based on the working group’s findings, the Office of Management and Budget reinforced the mandate set forth in the SAFE Port Act on Sept. 28 by requiring use of ITDS when collecting information to clear or license the import or export of cargo. OMB further established an interagency team led by the Department of the Treasury, working with the Department of Homeland Security, to coordinate how each agency will participate in ITDS.

The OMB directive not only reinforced the SAFE Port Act mandate to use ITDS, but also issued a deadline by which agencies must use ITDS. OMB instructed the agencies to develop plans outlining the steps needed to complete each stage of the agencies’ interface with ITDS, including any necessary rulemaking or acquisitions needed to support the interface, by Nov. 12. The OMB directive further stated that by 2009 all agencies are expected to fully utilize ITDS.

Currently, ITDS participating government agencies are moving forward with the steps laid out in their plan and working to complete the interface with ITDS. A total of 40 government agencies are currently participating in the ACE/ITDS initiative. Once fully utilized, ITDS will provide unprecedented interagency coordination and information sharing, ultimately making ACE the “single window” for the collection and dissemination of trade data. The ITDS main page is at

Trade Barriers Estimated to Cost Canada $3B a Year

(Toronto Star via CSCB)

Finance Minister Jim Flaherty said today the provinces should knock down trade barriers between them, which a Senate committee later heard is costing Canada’s economy roughly $3 billion each year.

To do that, Flaherty told reporters outside the House of Commons that Ottawa must help curtail the provincial trade regulations that some argue restrict business and labour and make it harder to compete in global markets.

“There’s certainly a significant role for the national government, the federal government of Canada to play in trying to get rid of these trade barriers,” he said.

Flaherty’s remarks came shortly before a senior Finance Department official told a Senate committee that interprovincial trade rules cost the country about one quarter of one per cent of its gross domestic product.

But Denis Gauthier, the assistant deputy minister of economic development and corporate finance, conceded the department has not recently done any economic modelling to determine the precise cost of the internal trade barriers.

“There’s been so many studies done, and the numbers you’ve heard, you know, between a quarter to three quarters of one per cent of GDP is in the ballpark,” Gauthier said.

“All of the studies point in the same direction,” Flaherty added.

When pressed by Liberal Senator Wilfred Moore, however, Gauthier said the loss stemming from the provincial trade barriers costs the Canadian economy about $3 billion each year.

The provinces have a patchwork quilt of regulations, and companies – some already hard-hit by the loonie’s quick rise to 110.3 cents US last month and gradual decline since – say the different rules make it burdensome to operate in more than one part of the country….

Alberta Premier Ed Stelmach has estimated interprovincial trade issues cost the Canadian economy about $14 billion a year. Alberta is one of a handful of provinces that has signed, or is negotiating, trade deals with its counterparts.

Alberta and British Columbia have a Trade, Investment and Labour Mobility Agreement – also known as TILMA – aimed at removing interprovincial trade barriers. Saskatchewan flirted for months with the idea of joining TILMA, but opted not to in August.

Quebec and Ontario are also looking a similar agreement at would bring into lockstep regulations that govern everything from the weight of trucks to health care, which could boost what’s now about $70 billion a year in interprovincial trade by making it easier for companies to operate in both provinces.

Sunday, December 16, 2007

Back to the 70s: That Was Then, This Is Now

(Stephen Poloz, Export Development Canada)

Those of us with grey hair have noticed that there are a lot of parallels between our current economic situation and that of the 1970s. But there are differences, too, and these are important enough to suggest that things will be different this time.

The similarities with the 1970s are obvious. High prices for oil, gold, base metals, food and fertilizer. A weak U.S. dollar. War, then in Viet Nam, now in Iraq and Afghanistan. Concerns about inflation, combined with worries about recession - the stagflation recipe. Not to mention a fast-growing economy changing the global landscape - then it was Japan, now it is China.

And some of the differences? Start with oil. In the early 1970s, the world used 1.3 barrels of oil per $1,000 of GDP, whereas today it uses 0.8, 40% less. The U.S. has more than halved its oil intensity, from 1.5 barrels to 0.7. And China, forecast by many to exhaust the world’s supply of oil, has seen intensity fall from 4 barrels to 1.3. China is very likely to reduce its oil intensity at least to global levels during the next 10 years, and may go further, as Japan has done. Accordingly, it is folly to extrapolate China’s demand growth as if nothing else is going on, just as it was wrong to extrapolate Japan’s oil demand in 1980.

Same thing for copper. Copper sold for U.S. $6800 per tonne in 1974, and the book “The Limits to Growth” published by the Club of Rome predicted that the world would run out of copper by 1999. Instead, the price had fallen to under $2,000 by 1999, as new supplies and substitutes emerged. Prices are back at 1970s levels again today, and another decline in prices is in store.

The world economy has changed in other important ways, too. Populations of the major economies are a lot older, so they react differently to shocks today, behaving more as investors than as consumers. Economies are more integrated internationally, as trade now represents 60% of global GDP, as opposed to 30-35% in the early 1970s. Economic and financial synchronization is the new paradigm, not decoupling. Even economic theory has changed. Economists’ understanding of inflation and central banking have been advanced dramatically, due in no small part to the experience of the 1970s. Indeed, the 1970s were arguably just as important to economic thinking as the 1930s.

And then there are the usual concerns about war, fiscal deficits and the consequent forecast demise of the U.S. dollar. U.S. defense spending was running at 8% of GDP in the early 1970s, and it was to fall to a low of 3% in 2000. It has risen since then, but only to 4%. But one parallel that is likely to hold up is that today’s calls for the U.S. dollar’s demise are just as premature as those of the 1970s proved to be. The dollar cycles inversely to global business and commodity cycles, and always will.

The bottom line? It’s true, there are a lot of similarities with the 1970s. But that was then, this is now. The 1970s ended in tears, and there is much less reason for this decade to do likewise.

Monday, December 3, 2007

Border Shipping Fees Spark Complaints

(Dana Flavelle — Toronto Star)

Sam Patterson thought he got a good deal when he ordered an MP3 player on the Internet for $160 (U.S.). But when the parcel arrived on his doorstep, the courier company said he owed another $80 (Canadian) in duties, taxes and customs brokerage fees.

“That’s half of what I paid for this thing. That’s ridiculous,” the 50-year-old Toronto film production employee says.

He refused to pay the charges and told the courier company to send the item back to the United States.

Like Patterson, more Canadians are cross-border shopping online now that the Canadian dollar is at par with the U.S. greenback, and a weak U.S. economy is driving retailers to offer big bargains south of the border.

But while some Canadian online shoppers say they’ve scored amazing deals, others say the experience left them cold.

Most of the complaints revolve around unexpected shipping charges for duties, taxes and customs brokerage fees, or wait times for delivery, a growing issue as Christmas Day approaches.

Duties can range from zero to more than 18 per cent, depending on the product and where it’s made, according to the Canada Border Services Agency, the federal agency responsible for assessing duties.

There’s no easy way for the average consumer to figure it out in advance, says Patterson, and few online retailers provide the information for you. “Most websites don’t say on the order page that there could be additional charges.”

The list of import duties listed on Industry Canada’s website is hundreds of pages long. The section governing just shoes, a popular online purchase, and other footwear is 15 pages long.

The federal goods and services tax, at 6 per cent, and provincial sales tax, in Ontario 8 per cent, and any excise tax is added on top of whatever duty is charged.

Then there’s the problem of clearing customs.

Do you pay a private courier service, like UPS Canada, a customs brokerage fee, which can run between $20 and $70, to expedite it for your? Or do you ship through the postal service, which charges a flat $5 fee, but may take longer to deliver? Or do you avoid the fees altogether by making a trip to the customs office in Mississauga?

Two of the biggest complaints about cross-border shipping involve unexpected costs and delivery delays, a growing concern with Christmas deadlines looming.

So many consumers have complained about UPS Canada’s brokerage fees that they have sparked several class-action lawsuits.

In a statement of claim filed by Siskinds LLP in the Ontario Superior Court of Justice last February, the plaintiffs say they weren’t warned in advance there would be extra fees and that the fees charged are excessive.

UPS Canada says it is defending itself against the claim. Its brokerage fees cover the cost of expediting the parcels through Canada Customs, the courier service explains.

“Importing goods into Canada requires the payment of duties and taxes. These fees include PST, GST, duties and other taxes on goods (e.g. excise tax),” UPS Canada said in an email. “UPS Customs Brokerage rates and provides payment to Canada Customs for these fees to expedite clearance at the border on behalf of its importers,” UPS says. “UPS provides a charge for this service.”

The rates for those services are based on the value of the parcels and are outlined on its website, the company also says. They range from a low of zero for parcels worth less than $20 to a high of $69 for items worth more than $1,600.

The Canada Border Services Agency, which is responsible for enforcing the Customs Act, says customs brokerage fees are unregulated and have nothing to do with how the government levies it charges.

Agency spokesperson Patrizia Giolti agrees the fees private courier services charge can vary widely.

“It’s best to shop around.” On the other hand, shipping through the postal system can mean longer waits, she says.

The Consumers Association of Canada says it continues to receive complaints from customers who say their parcels are taking four to six weeks to be delivered.

The problem began as the Canadian dollar reached par with its U.S. counterpart, the association says.

Canada Post spokesperson François Legault says it has worked closely with the border services agency to process additional volumes. Asked about Christmas delivery deadlines, he recommends ordering as soon as possible.

Saturday, December 1, 2007

Transportation Security Programs Need to Refocus on Risk Management, CTA Tells Senate Committee

(Canadian Trucking Alliance)

In an appearance yesterday at a meeting of the Senate Committee on Transport and Communications, representatives of the Canadian Trucking Alliance (CTA) cautioned that land transportation security programs, particularly at the Canada-US border, continue to result in duplication, overlap and ever-increasing costs.

“Like the exporters whose goods we carry, the trucking industry is unsettled by the fact that the cost of moving goods continues to be driven up by security measures that are rolled out and evaluated in isolation from one another. The big picture – an appropriate balance between security and trade efficiency – seems to have been lost,” CTA Senior Vice President Graham Cooper told the committee.

He noted that the trucking industry fully understands how the Canada-US trade picture has changed since September 2001, and has in fact played a key role in trying to maintain the balance between efficient trade and enhanced security: “Hundreds of Canadian carriers – more than any other part of the supply chain, by a wide margin – have signed up for Canada’s Partners in Protection program, as well as the US Customs-Trade Partnership Against Terrorism. The number of Canadian truck drivers who have been security screened under the Free and Secure Trade program now exceeds 70,000. Thousands of carriers are now supplying advance cargo, crew and conveyance data to US Customs and Border Protection on export loads.”

The trucking alliance’s view is that six years after 9/11, it is becoming apparent that Canada and the US have created an array of programs that don’t always dovetail with one another, and the situation seems to be getting worse. As Cooper told the committee, “the reality is that the trucking industry today faces a range of mode-specific requirements, facility-specific requirements, and even commodity-specific requirements coming at us from departments and agencies on both sides of the border. The situation is not sustainable. We can’t go on forever, layering one new program on top of another, further driving up the cost of transportation and harming Canadian competitiveness.”

CTA acknowledged that there is of course no silver bullet to address these problems, but government agencies on both sides of the border must remember that the appropriate balance between efficient trade flow and enhanced security can be achieved only if risks are properly assessed. Cooper told the committee that, “the focus on risk is absolutely fundamental. Our view is that a proper assessment of risk creates a win-win scenario for the trucking industry and government: for us, in ensuring that inspections and programs are targeted to where they are really needed; and for government, in ensuring that scarce resources are applied where they will do most good.”

Wednesday, November 28, 2007

Canada and the U.S. Sign Detroit-Windsor Memorandum of Cooperation

(Transport Canada)

Speaking in Washington, D.C., the Honourable Lawrence Cannon, Minister of Transport, Infrastructure and Communities, and United States Secretary of Transportation, Mary E. Peters, announced that the two countries have signed a Memorandum of Cooperation (MOC) to maintain a high priority on the development of enhanced capacity of the border-crossing infrastructure in the Detroit-Windsor region.

The MOC follows the direction given at the North American Leaders’ Summit on August 21, 2007, in Montebello, Quebec, Canada by the Prime Minister of Canada and the President of the United States.

“Canada is experiencing the second-largest period of economic expansion in Canadian history. That is why the Government of Canada is committed to developing additional border capacity along the Windsor-Detroit corridor,” said Minister Cannon. “It is a crucial support to the continued growth of the economies of Canada and the United States.”

Complete press release, including a backgrounder on the Detroit River International Crossing project available here.

The Government of Canada Announces New Measures to Enhance Canada’s Food and Product Safety

(Health Canada)

The Honourable Tony Clement, Minister of Health, made two announcements yesterday during a visit to China that will help to enhance the safety of Canada’s food and products.

“Canadians have told us they are concerned about the safety of the food and products they buy and use, and our Government shares these concerns,” said Minister Clement. “By announcing these measures today in cooperation with one of our trading partners, we are taking an important step to protect the health and safety of Canadian families.”

Minister Clement joined China’s Minister of Health to launch a new Canada-China Joint Committee on Health. The Joint Committee will consist of representatives from a number of Canadian and Chinese departments involved in health matters to share information, establish goals, and address emerging issues. Areas to be discussed include food, drug and product regulations, emerging infectious diseases, and the promotion of scientific exchange.

The Committee may also invite academics, researchers, and representatives from non-governmental organizations to attend meetings.

Minister Clement also signed a Memorandum of Understanding (MOU) with China’s Minister of the Chinese General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) to enhance cooperation on issues related to consumer product safety. The MOU will:

– Establish technical working groups that will share information on regulatory requirements and laboratory testing procedures for specific consumer products of common concern, such as toys and children’s jewellery;

– Set up training workshops for Chinese manufacturers in order to ensure their full understanding and compliance with Canadian safety requirements; and

– Establish ongoing information-sharing mechanisms and approaches between the two governments, including an urgent consultation mechanism which would be used when critical product safety issues arise.

“This announcement is an important next step in health cooperation between both countries, a priority agreed upon at the G8 Meeting in July by President Hu and the Prime Minister of Canada, Stephen Harper,” said the Honourable Dr. Chen Zhu, China’s Minister of Health. “Many of the world’s health issues are truly global in scope, and demand the high level of collaboration this committee signals.”

During the visit to Beijing, Minister Clement also spoke at the International High-Level Food Safety Forum, which was organized by the Chinese government and the World Health Organization, on the importance of international cooperation on issues related to food safety.

“Food safety is a global issue and we must work together for the health of all of our citizens,” said Minister Clement. “Canada has one of the safest and most effective food supply systems in the world, and we are working co-operatively to keep it that way”.

Monday, November 26, 2007

McGuinty, Doer Work to Ease Border Crossings

(Globe & Mail — Nov. 26/2007)

The Ontario and Manitoba governments are working to make it easier for travellers to visit the United States without a passport, but Canadians shouldn't get the wrong message and consider it an invitation to shop more in border cities, Ontario Premier Dalton McGuinty says.

Mr. McGuinty met yesterday with Manitoba Premier Gary Doer to discuss new high-tech driver's licences the provinces are working on, which will contain citizenship data and could be used in place of passports at the border.

Streamlining the process to cross into the United States might tempt more people into shopping stateside, but Mr. McGuinty said shoppers should ignore the lure of irresistible deals and support their local economy….

The talk of easier border crossings follows a Statistics Canada report last week that found day trips to the United States hit a six-year high in September, due in no small part to Canadians taking advantage of a strong dollar and lower prices at U.S. retailers….

Mr. McGuinty said there is no exact timeline on when the new licences will be brought in, and the premiers are waiting on the U.S. government to reveal what specifications they need to satisfy their security concerns.

The provinces will then work with Ottawa to integrate citizenship information into the new ID card, said Mr. Doer, who added he is confident that the new standard will also encourage Americans to visit Canada and bolster tourism.

Saturday, November 24, 2007

Some Firms Like the Strong Canadian Dollar


Canadian manufacturers and exporters have loudly complained about the strong Canadian dollar, but not all businesses want the currency to retreat.

The small- and medium-sized businesses that want a weaker currency only modestly outnumber those who say they benefit from a strong Canadian dollar, the Canadian Federation of Independent Business said on Wednesday.

The CFIB, which represents 105,000 businesses, said 27 percent would like a lower Canadian dollar while 21 percent would like it higher, chief economist Ted Mallett told the House of Commons Finance Committee.

The Canadian dollar has risen rapidly in recent months and reached parity with the U.S. dollar in September, for the first time in 31 years. It climbed to a modern-day high of US$1.1039 on Nov, 7, then eased to close on Wednesday at US$1.0125, valuing each U.S. dollar at 98.77 Canadian cents.

Mallett said those in the agriculture and manufacturing sectors mostly wanted a lower currency but in transport, the 50 percent that have an opinion are exactly split on the issue.

“There is real hurt in the manufacturing sector. There is real benefit in other areas of the economy,” Mallett said.

A firm that benefits from a stronger currency could be one that buys its inputs from the United States or elsewhere and sells its finished products in a stable market in Canada, he said.

In contrast, Perrin Beatty, president of the larger Canadian Chamber of Commerce, warned of “unprecedented challenges” that many of his members face.

“Fierce competition from emerging economies like China and India, weaker demand south of the border where 77 percent of Canada’s merchandise exports go, and the stunning appreciation in the Canadian dollar since 2002 have created the perfect storm for export-oriented businesses and companies facing competitors here at home,” Beatty said.

He called for lighter regulation, lower trade barriers between provinces, competitive taxes and better use of skilled immigrants.

Mallett echoed some of these calls but also said that the reduction of inflationary concerns in Canada gave room to the Bank of Canada to reduce interest rates.

Friday, November 23, 2007

Media Myths About Free Trade Cause Many to Forget Benefits

(CNN Money)

Free trade is becoming a dirty word as the [U.S.] election heats up and heartland states like Iowa become a battleground for votes.

At a recent debate, John Edwards trashed the North American Free Trade Agreement and Sen. Hillary Clinton called for a “timeout” on any new pacts.

Three U.S. free trade pacts with South Korea, Panama and Colombia are languishing in Congress after years of talks. This despite congressional input, a final accord approved in two countries, and even post-deal amendments tacked on to toughen labor and environmental standards.

Maybe all the effort has been wasted. Protectionist sentiment is growing among Democrats and even some Republicans.

A Wall Street Journal-NBC News poll this month found that 60% of all voters believe “foreign trade has been bad for the U.S. economy.”

Why is this? Well, the economically ignorant mainstream media have done their part to blame any negative economic event on free trade. They confuse general trends, such as the U.S. giving normal trade ties to China, with free trade deals that require both countries to sign.

Meanwhile, ideological think tanks in Washington and pundits have all helped to poison the well against free trade.

Most significantly, Big Labor, led by the Service Employees International Union and the Teamsters, opposes the pacts. They’ve cynically told visiting Colombians pleading for free trade that it’s nothing personal against Colombia – they just want to show they still have political clout.

All this is happening on the fertile soil of misinformation and confusion about what free trade is.

For one thing, free trade is often confused with any foreign trade, so it’s easy to blame it for outsourcing, the decline of the U.S. manufacturing base and other economic ills.

The less-visible reality: Free trade pacts have advanced America’s economy unlike any other foreign policy move.

In 13 years of free trade since the completion of the Uruguay round of trade talks and NAFTA, America’s economy has added 26.2 million new jobs, and gross domestic product has doubled to more than $13 trillion, a sharp upturn from the pre-free-trade years. The International Trade Administration estimates that NAFTA and the Uruguay round of trade talks have added $1,400-$2,000 to the average family’s income. Indeed, free trade is one benefit virtually all economists agree on.

But not everyone’s an economist. Six myths about free trade stand out – and should be debunked. ...Complete article here.

Wednesday, November 21, 2007

Canadians Expected to Flow to U.S. Border in Search of ‘Black Friday’ Bargains

(Canadian Press)

The lure of Black Friday, America's epic once-a-year buffet of deep discounts and doorcrasher sales, is expected to attract a swarm of Canadian bargain hunters to border crossings this weekend, hungry to spend their pumped-up loonies.

They'll rush to the pivotal U.S. Thanksgiving weekend holiday sales despite countless warnings that the journey could be more of a hassle than an adventure.

But with some careful preparation, inexperienced cross-border shoppers can dodge an otherwise disastrous trip and emerge with a few good deals, according to shopping veterans and border security representatives.

Solid estimates on the number of Canadians expected to visit the U.S. on the weekend aren't available but cross-border trips have been surging in recent months.

A report from Statistics Canada showed that same-day car trips by Canadians to the United States in the month of September rose to their highest level in six years, surpassing two million, or about 70,000 per day.

Cross-border trips have increased this year by 15 per cent, said Wendy Evans, head of retail consultancy Evans and Co. Consultants Inc., and U.S. stores could see 20 to 25 per cent more Black Friday visitors from Canada this year than last.

"It's going to be pretty incredible," said Evans.

The pandemonium generally starts on Black Friday, the day widely regarded as an unofficial kickoff to the holiday shopping season. It's an ironic take on Black Tuesday - the wildly hectic start of the 1929 stock market crash, when panicked stock markets spiralled into the red.

Unlike the crash that started the Great Depression, Black Friday's pandemonium is a boon to company earnings, helping retailers boost profit and get "in the black."

Several stores are scheduled to open at midnight on Friday morning while nearly all major retail outlets will open before sunrise.

With the loonie perched above parity for the first time since 1976, border points are likely to be chaotic, particularly in populous Ontario, threatening to turn jolly jaunt to the mall into wretched holiday disaster.

"Border service is trying to supplement some of the shortfalls by calling in staff on overtime but how much of that is going to have an actual effect all hinges on volume," said Rob Moran, president of the Canadian Customs Excise Union.

"The volumes have become impossible to predict and the staffing levels were already what could be defined as bare bones before the dollar started doing what it was doing."

The cheapest ways to travel stateside for a weekend of shopping are by car or chartered bus. Some avid shoppers prefer the latter to avoid the sometimes stressful driving experience.

Many Canadian bus operators will make scheduled stops at popular malls and outlets hand picked by the passengers in advance. Whichever method travellers choose, they run the risk of getting stuck in inevitable holdups at the border.

In recent weeks, stories have emerged about massive slowdowns that have left chartered buses and even emergency vehicles waiting while customs officers flip through documents and receipts.

"We've had two consecutive weekends with bad situations all on the Niagara part of the border," said Lorna Hundt, managing director of Great Canadian Holidays & Coaches, which offers both bus rentals and guided shopping trips.

But "we've had coaches going over Gananoque, Ont., Sarnia, Ont., and Detroit (border crossings) that have been absolutely fine, no delays at all."

Hundt said that two recent trips left buses idling at the Niagara border for up to five and a half hours as customs agents kept the passengers waiting.

Some delays appear intentional, perhaps to deter Canadians from shopping in the United States, said Hundt.

"We believe there was some kind of a statement, if you will, with them causing extraordinarily long delays, which were very unnecessary," she said.

Moran insists customs officers are simply trying to do their jobs.

"There have been some very considerable seizures that have been conducted on those buses," he said.

"We're talking about important quantities of drugs and handguns. I guess some people are figuring that this is a good time to take advantage of the fact that there's a lot of volume and it's a good way to enter the country inconspicuously."

So far, border slowdowns haven't softened demand.

This weekend, Great Canadian Holidays has 23 buses scheduled to pull into key shopping hubs located in various U.S. states south of Ontario. Numerous other Canadian charter bus companies are sending out portions of their fleets as well.

One bus driver at a competing charter company said that he has noticed a surge in groups of middle-aged women who organize trips to the United States for shopping sprees and are willing to gamble on slow border processing.

Reports of the slowdowns concern Cynthia Legaspi, a resident of Scarborough, Ont. who crosses the border every few weeks to visit relatives and squeeze in a little shopping.

This weekend she will make an overnight trip to Pennsylvania with her family, solely to scour retail outlets. The state is one of the most popular destinations for Canadian shoppers because it doesn't charge tax on clothing.

"We pass by the prime outlets just along the freeway," Legaspi said. "Most of the goods that you buy there are not sold here. Even if the brands are the same, some of the items are not."

Canadian border regulations say that shoppers on an overnight trip are only exempt from taxes on total purchases below $50. But Legaspi said she usually hasn't had to pay any extra tax, though she's shown border guards receipts that are clearly over the limit.

"We're showing them the receipts because they ask us what we do there," she said. "But they don't look at it because the line is so long already."

With an unusually large number of Canadians expected to be returning laden with big purchases and having spent over the limit, customs officials are likely to be paying closer attention.

For a day trip of less than 24 hours Canadians are technically not exempt from any amount of goods. It's only after a day that the $50 limit kicks in. Then, limits increase to $200 for a 48-hour stay and $750 for a week.

Ontario border crossings tend to be the busiest, with a few in Quebec coming close, said Moran.

"During peak periods, like this upcoming weekend, Fort Erie, Niagara Falls, Windsor and (Saint Bernard de) Lacolle would be certainly on the list of ports you should expect to have longer delays than the rest of the country," he said.

"The way the geography's laid out in Ontario, with the Great Lakes and everything, it's not like there's a lot of options."

Moran also suggested that shoppers prepare their receipts before reaching the border to help speed up the administrative process. He also suggests avoiding a return to Canada around the end of the afternoon, because wait times are always longer when everyone rushes home at the same time.

Self-proclaimed shopaholic Monique Creary scours Internet message boards for the latest news on cross-border shopping and monitors websites that log the latest deals. But for the first time, the Toronto-area resident will brave Black Friday's massive lineups in hopes of cashing in on the best bargains.

Here are some tips Creary says Canadian shoppers should remember when visiting the United States:

-Scan the Sales: Several websites have prepared a database of deals ahead of Black Friday. Creary uses because it offers a detailed list of items, right down to specific DVD titles at specific stores.

-Create a Plan: The most successful shoppers treat the adventure like a well-mapped out mission. Jot down the approximate cost of items at home then compare them to the same items in the U.S.

-Respect the Border: While the border might've been lax 10 years ago, the climate has changed since post-Sept. 11 security was beefed up and the higher loonie sent Canadians rushing to the border.

"Be as honest as possible. Custom officers aren't stupid. If you say that you spent $50 on a day trip, but really spent $300, have several shopping bags with you and are wearing brand new clothes and shoes, chances are that they're going to see right through you."

-Recognize the Penalties: It you choose to lie about your declarations, be aware you could be slapped with fines and have your name flagged in the system, which could mean harder questioning at the border in the future.

"It's not worth the hassle of being blacklisted - records of infractions are kept for six years - or stopped on future visits just because you wanted to avoid paying the $42 tax on $300 worth of U.S. goods."

Canadians Bought 25,000 Cars in U.S. in October

(Canadian Press)

A soaring loonie pushed the number of cars Canadians purchased south of the border in October to nearly 25,000 – an increase of more than 100 per cent over the same month last year.

"We have been seeing a steady increase throughout 2007 and it really reflects the fact that the Canadian dollar has been appreciating against the U.S. greenback, making it more attractive for Canadians to go down into the U.S. and pick up a vehicle," said Carlos Gomes, senior economist with Scotia Economics.

According to Transport Canada, 24,873 cars were imported from the United States in October, more than double the number of cars – 12,289 – imported in the same month last year.

Simultaneously, the number of new car sales in Canada has declined from 158,394 in August to 121,000 in October.

Some experts say the number of Canadians who are holding off making purchases hoping to see lower vehicle prices here in Canada has added to that decline, which has prompted warnings that a steady rise of the loonie is hurting the economy.

However, that argument does not seem to stop tens of thousands of Canadians who cross the U.S. border every week looking for bargains.

And savings can be nowhere more significant than when purchasing a car. Many motorists who have purchased a car south of the border say they've saved in some cases up to $20,000.

But not all car bargain hunters have been able to take their newly bought wheels for a drive.

A new regulation by Transport Canada that requires that all vehicles be equipped with an electronic immobilization system means about a thousand cars without the anti-theft device purchased by Canadians in the U.S. may never be licensed.

While Transport Canada says the new regulation is here to stay, it admits some of those cars may have been purchased between Sept. 1, when the new regulation came into effect, and the time when the agency posted it on its website.

"There was a delay before the website was updated," Patrick Charette, a spokesman for Transport Canada admitted in an interview with The Canadian Press.

"I know that people clicked on the website and the car wasn't listed as not admissible. They bought the car and by the time they came back they said `Oops, now it's listed as not admissible."

The confusion arises from the fact that not all cars and models can be equipped with the anti-theft device.

To avoid having those cars held at the border, Transport Canada has authorized Canada Border Service Agency agents to allow owners to drive their cars home with a form clearly marked "not admissible."

"There's no guarantee that this car will ever be admissible and will ever be allowed to stay in Canada with plate and license," said Charette.

However, he said authorities were working to find a temporary solution.

"We want to make sure that we can get a balance between our safety approach and the situation obviously consumers are facing," Charette said.

But experts are looking for a long-term solution, which would be same vehicle standards in the U.S. and Canada.

"Most of the cars that we produce here in Canada are sent to the United States, so it would make sense that we would have a uniform standard . . . so that when you are assembling a vehicle you don't have to be putting in certain technical requirements for the Canadian markets as opposed to the U.S.," said Gomes.

"You would be able to produce the same vehicle for both markets."

Selling Chinese Goods to the U.S. via Canada – Not for Amateurs

(Blakes Bulletin on International Trade)

Canadian business are well positioned to take advantage of their close proximity to the U.S. market and can, where sales are properly structured, sell competitively to U.S.-based customers.

This is especially the case where Chinese-origin goods are shut out of the U.S. market due to antidumping duty or countervailing duty orders. This article (PDF format) addresses both the benefits and costs of selling Chinese goods to the U.S. through Canada, and, in particular, the importance of taking care to properly structure these types of transactions.

Tuesday, November 20, 2007

Exporting Under the USDA Final Rule on BSE Risk

(Canadian Food Inspection Agency)

The coming into effect of the U.S. Department of Agriculture’s Final Rule rule on Bovine Spongiform Encephalopathy (BSE) risk will open up new opportunities for Canadian exporters, primarily by allowing imports of a broader range of cattle and meat and other products derived from them.

The final rule opens the U.S. border to the following:

• live cattle and other bovines (e.g. bison) for any use, including breeding, born on or after, March 1, 1999 (under the previous rule only cattle under 30 months of age and destined for immediate slaughter or restricted feedlots were eligible);

• meat and meat products from animals of any age;

• blood and blood products derived from bovines, collected under certain conditions; and

• casings and part of the small intestine derived from bovines. In preparation for the changes, the Canadian Food Inspection Agency (CFIA) has worked with the Canadian cattle industry and animal health practitioners, and the U.S. Department of Agriculture to address the associated technical requirements.

The CFIA is re-accrediting private veterinarians across the country to certify that Canadian exports are in compliance with the new requirements. Export certificates have been revised to address these requirements.

The CFIA encourages Canadian animal producers and processors to consult with an accredited vet or visit the CFIA web site at the address below to familiarize themselves with the export requirements.

For additional information, please contact a CFIA district office. They are listed in the blue pages of the telephone book but are also available on the CFIA website. For Questions and Answers, please visit the CFIA website.

Friday, November 16, 2007

U.S. Confirms High-Tech Driver’s Licences Will Be Allowed at Border

(Canadian Press)

Homeland Security Secretary Michael Chertoff confirmed Thursday that enhanced driver’s licences will be accepted as passport alternatives at the Canada-U.S. border.

Canada has been pushing hard to give travellers a choice, saying passports are expensive, harder to get and most people need licences anyway.Homeland officials have become increasingly comfortable over the last several months with high-technology driver’s licences that will contain proof of citizenship like passports do.

The final rule on the so-called Western Hemisphere Travel Initiative, due soon, was expected to endorse them.

But Chertoff left no doubt in a speech to a trade symposium hosted by the U.S. Customs and
Border Protection agency.

“Next year, we’ll be implementing a rule in stages that will require . . . either a passport, a passcard, Nexus card or enhanced driver’s licence to cross the land border,” he said.

The new security program is supposed to go into effect as early as next summer. Air travellers entering the U.S. already need passports.

“Inevitably there’s going to be inconvenience as we make the transition,” said Chertoff.

But border agents who now have to go into their computers to pull up information will now be able to swipe cards and access information more quickly, he said.

“It’s an efficient but more secure way of checking at the border.”

The passcards Chertoff referred to will have special ID chips and are only being developed in the U.S., where they’re referred to as passport-lite. Canada has no plans to follow suit and has concentrated solely on licences.

Chertoff’s remarks came as business leaders in both countries worry about waiting times that have increased to two and three hours, the longest delays since the 2001 terrorist attacks.
Extra security checks, not enough infrastructure, inadequate staffing and faulty computer systems are to blame, they say.

The U.S. is moving toward a system of checking everyone, said Chertoff, who maintained it will be faster with only a handful of acceptable documents rather than the 8,000 that exist in the U.S. now.

A project using high-tech licences at border points between British Columbia and Washington state is expected to start early next year.

“I think it’s great that Chertoff is confirming it this early on,” said John van Dongen, B.C. intergovernmental relations minister.

“Both federal governments now see the efficiency of it. We can improve flow and security. It’s a win-win.”

The U.S. department has struck deals with other states, including New York, Arizona and Vermont.

Several provinces, including Ontario, Quebec and Alberta are keen to develop the required licences.

Now the provinces can step up discussions with Ottawa about licences, said Ontario Transportation Minister Jim Bradley.

“I’m certainly very happy to see it finallly happening.”

Perrin Beatty, president of the Canadian Chamber of Commerce, complained last month that Americans still aren’t collaborating properly with Canada on the technology they’ll be using so the licences in both countries are compatible.

But Ken Oplinger, president of the Bellingham-Whatcom Chamber of Commerce in Washington state, said the U.S. is waiting for Ottawa to get moving and officially endorse them.

Canada still wants the Bush administration to delay implementing the new security measure until 2009, saying no one will be ready and it will cause even more havoc at the border.

U.S. CBP Announces Completion of Nationwide Truck Manifest Automation

(U.S. Customs & Border Protection)

U.S. Customs and Border Protection finished installation of Automated Commercial Environment electronic truck processing capabilities Nov. 7 at the Piegan, Mont., port of entry. Now all 99 land border ports are capable of processing e-manifests.

The ACE e-manifest capability consolidates previously separate cargo release systems into a single, integrated computer interface for CBP officers and allows truck carriers to prepare and submit electronic truck manifests prior to arrival at a land border port of entry. With advance access to truck cargo information, CBP officers are able to pre-screen trucks and shipments, dedicating more time to inspecting suspicious cargo without delaying the border crossings of legitimate carriers.

E-manifests are also more efficient with an average processing time 33 seconds faster than a traditional paper manifest.

“Equipping every United States land border port of entry with the capability to process e-manifests is a significant milestone that advances the CBP mission of ensuring border security while simultaneously facilitating legitimate trade,” said Louis Samenfink, executive director for the CBP cargo systems program office.

On average, CBP officers process more than 30,000 trucks per day using ACE. Ninety-nine percent of manifests are now filed electronically at all ports. Currently, filing is mandatory at all land border ports in Arizona, California, Idaho, Maine, Michigan, Minnesota, Montana, New Hampshire, New Mexico, New York, North Dakota, Texas, Vermont and Washington. CBP eventually will mandate the e-manifest policy to include every land border port.

Thursday, November 15, 2007

U.S. Customs, Border Workforce Plagued with Retention, Morale Problems


U.S. Customs and Border Protection (CBP) faces substantial challenges in recruiting, retaining and training new officers, maintaining high morale and keeping up with increasing cross-border traffic, a union president, Government Accountability Office researcher and a CBP official told senators at a hearing on Thursday.

The panelists disagreed, however, on which of those is the most critical issue.

Paul Morris, executive director for admissibility and passenger programs at CBP's Office of Field Operations, said the primary problem was the state of CBP facilities. Full story here.

Related: Hearing on U.S. Border Officer Training May Focus on Staffing Issues

Manitoba Export Growth to Be Among Best in 2007 and 2008, Says EDC

(Export Development Canada)

Manitoba’s export growth of 15.1 per cent will be one of the country’s best in 2007 according to a provincial export outlook by Export Development Canada (EDC). The province’s total exports are expected to increase by a more moderate 7 per cent in 2008, second only to Saskatchewan.

“Gains in primary industries led the way to Manitoba’s strong ranking in 2007,” said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. “Manitoba’s outlook for 2008 is still positive, but the impact of waning U.S. consumer demand and the strengthening of the Canadian dollar will take its toll.”

Exports to non-U.S. destinations continue to be strong in 2007, led by shipments of metals with major increases in sales to Japan, Taiwan and Hong Kong.

Bio-fuel demand has greatly bolstered the price of Manitoba’s leading crops. In 2007 export earnings of coarse grains, wheat and oilseed have registered extremely impressive year-to-date gains of 41 per cent, 45 per cent and 59 per cent respectively. The continued expansion of U.S. ethanol capacity will apply upward pressure on coarse grains prices and volumes through the balance of the year. Overall, major grain prices are poised to remain strong with Manitoba exporters gaining from tight global supplies and firm demand. Agri-food exports overall are expected to increase by 20 per cent, with growth of 13 per cent forecast for 2008.

The lifting of U.S. border restrictions should serve as a boon to the province’s cattle producers, but concerns remain over the strength of the hog industry. Relatively weak prices for hogs and pork products in early 2007 led to fragile growth in the industry while higher feed costs heavily impacted producers. There appears to be an excess supply of hogs within the North American market. The recent rejection of Canadian and U.S. pork shipments by China has dashed hopes that market would pick-up on volumes, leaving producers with a pork tonnage that overruns demand, in turn depressing prices.

Nationally, Canadian economic growth is forecast to remain stable at 2.3 per cent in 2007, and 2.6 per cent in 2008. Key price gains in commodities have put Canadian exports on track to increase by 3.7 per cent in 2007, but the impact of weaker U.S. and global demand will have the export growth rate more than halved to 1.5 per cent in 2008. Internationally, EDC is forecasting a 4.9 per cent growth rate in 2007, and 4.5 per cent in 2008. EDC’s Global Export Forecast is available at

Summary of New FSIS Import Measures for Canadian Products

(Canadian Food Inspection Agency)

New on the CFIA website are tables summarizing the recently announced measures from U.S. Food Safety and Inspection Service (FSIS) regarding importation of meat, poultry and egg products from Canada, and how these will be applied.

Wednesday, November 14, 2007

Canada Braces for Backlog with New U.S. Meat Tests


Canadian meat exporters braced for delays in shipments to their biggest export market after the U.S. Agriculture Department said it would begin on Friday to double its testing of shipments crossing the border.

Late on Thursday, the Canadian Food Inspection Agency and Canadian beef processors said they still did not have all the details on how the new testing program would work.

“There's a lot of questions that perhaps might not be answered until we hit the ground running,” said Robert Meijer, spokesman for Cargill Ltd, Canada's top beef processor.

Until more details are available, Cargill will not export meat destined to become ground beef, Meijer said. Cargill has not cut Canadian production ahead of the new measures, but the company may have to consider that if the testing process causes major snarls at the border, he said.

The USDA first announced last Saturday that it would test Canadian beef, pork and poultry for bacteria that cause food poisoning, and hold shipments at the border pending results.

On Thursday, the USDA clarified what types of meat it would test, the rate of testing, and how it would recall contaminated shipments. It also said that it would consider alternatives to holding product at the border.

In 2006, Canada shipped 303,000 tons of beef, worth C$1.1 billion ($1.2 billion), and 363,000 tons of pork, worth C$1.032 billion, to the United States.

Canadian meat is already tested and inspected at processing plants. But U.S. officials ordered an added level of inspection and testing to be done at the U.S. border after a recent U.S. outbreak of E. coli food poisoning was traced to Rancher's Beef Ltd of Balzac, Alberta.

Canadian and U.S. officials continue to investigate that plant, which has since closed for unrelated reasons.

Earlier this year, a routine audit of some Canadian plants turned up sanitation and other problems. U.S. inspectors are revisiting the plants to ensure the issues were addressed.

Most new testing measures will stay in place until U.S. officials review test and audit results.
But added tests for imported beef used to make hamburger will become permanent for Canadian and all other foreign suppliers, starting at the beginning of 2008, the USDA said.

Canadian inspection officials said the measures were unnecessary because Canada's meat is safe, and is already tested and inspected to a level equivalent to U.S. standards.

“We are working with (the USDA) very closely to investigate the E. coli case and we are reaffirming to them that Canada has internationally respected inspection and safety procedures,” said Frederique Moulin, manager of international meat programs with the Canadian Food Inspection Agency.

Moulin said she expects the USDA will reconsider the new tests after the investigation and audit are complete.

“The problems uncovered at Rancher's Beef Ltd are not an indication of a failure in the Canadian meat inspection system,” she said.

The new measures come as the Canadian beef industry struggles with losses caused by the sharp rise in the Canadian dollar, labor shortages at major packing plants, sky-high grain prices, and other costs not faced by U.S. competitors.

“We don't need any more negative market shocks, and this unknown risk is very much of a challenge to the industry,” said Ted Haney of the Canada Beef Export Federation.

Saturday, November 10, 2007

A Roadblock at the Border

(Greg Keenan — Globe & Mail)

Ian Patterson was all set to fork out more than $70,000 (U.S.) to a Chevrolet dealer in Atlantic City, N.J., for a new, sparkling red Corvette, but he had a problem. He’s not allowed to bring the car into Canada.

The same ban applies to all other General Motors Corp. 2008 vehicles built after Sept. 1 and bought in the United States, most 2008 Honda Motor Co. Ltd. models and 13 Toyota Motor Corp. vehicles, including four of the most popular.

The problem is a Transport Canada regulation that requires 2008 vehicles to have a device that deters car thieves, something known as a theft immobilizer.

Vehicles sold in the United States are not required to have the component.

In the case of the Corvette, Canada also has a more stringent standard for bumpers than the United States and Corvettes sold there don’t meet it.

“I was going to pay cash,” said Mr. Patterson, a software developer for Research In Motion Ltd. “I had some money stashed away for a rainy day.”

He was also going to save more than $30,000. That’s based on a price of $72,290 after a $5,500 rebate in Atlantic City, compared with $102,130 (Canadian) - including options - he figured on paying for the high-end Z06 model in Canada.

Mr. Patterson’s story is another twist in the saga of Canada’s high-flying currency and how much Canadians are able to benefit from its rise either through lower prices here or by shopping abroad.

The Canadian anti-theft requirement, meanwhile, has auto makers seeing red because they have been pushing Ottawa for years to harmonize our regulations with those south of the border and not introduce standards that apply only in this country.

Some auto makers are not installing the devices in cars built for the U.S. market, are putting them only on selected vehicles, or installing systems that don’t meet the Transport Canada standards. (Auto makers say there is no after-market kit for installing the devices that will meet the Canadian regulation.)

Vehicles without the immobilizer systems are banned from importation into Canada by the Registrar of Imported Vehicles, the Transport Canada department that decides which cars and trucks are allowed in.

In one way Mr. Patterson lucked out, because he was set to make the deal, but stopped when he discovered that Corvettes are inadmissible.

Honda Canada Inc. senior vice-president Jim Miller said his company is aware of two Canadians who actually bought Honda vehicles in the United States, but aren’t allowed to drive them in Canada because they don’t have theft immobilizers. Mr. Miller said he believes one of the buyers was able to get his car into Canada before it was identified as a banned vehicle on the Registrar of Imported Vehicles website, while the other buyer was turned back at the border.

Mr. Patterson, who owns a black 2001 Corvette Z06 and is an instructor at high-performance driving schools, said he would prefer to buy the car in Canada. “But I’m not going to spend an extra $30,000 on a car.”

Ottawa first notified auto makers four years ago that the theft immobilizer had to be in place for the 2008 model year.

So while the timing of the change in regulations accidentally coincides with the rise in the value of the Canadian dollar, it’s a strong deterrent to buying a vehicle in the United States.

Several companies have introduced special incentives to reduce the gap in prices between vehicles in the two countries, including a new General Motors of Canada Ltd. program announced yesterday that offers $5,000 (Canadian) on the 2008 Corvette.

Any notion that car companies are using the issue to bolster their battle to keep Canadians buying here is misguided, spokesmen for several auto makers say.

“There are conspiracy theorists everywhere,” said Stephen Beatty, managing director of Toyota Canada Inc., which installs theft immobilizers on all but one of its Lexus line of luxury vehicles in the U.S. “But I’m not so wise as to have figured this out five years ago. It’s happenstance.”

GM Canada is simply complying with the Canadian regulation, said spokesman Stew Low.

“The other question is why Transport Canada has chosen to continue a path of unique Canadian standards and not worked to harmonize standards across North America,” Mr. Low said.

Transport Canada tried to persuade the auto makers to agree voluntarily to a Canadian standard but was unable to do so, spokeswoman Jessie Chauhan said.

A Nation of Loonie Losers?

(Madeline Drohan — Globe & Mail)

As the loonie traded at record levels against the U.S. dollar this week, the prophets of doom went into overdrive. “Fear mounts alongside soaring dollar,” declared the headline in my morning paper. “Soaring loonie fans fears of economic slowdown,” warned another. “Strong loonie raising alarms,” said a third, while a fourth bluntly stated, “High dollar hammers profits.”

The problem with all these headlines is that they tell only one side of the story. Yes, the loonie’s rapid ascent in the last five years has created losers. But it has created many winners, too. Too much focus on the first group will lead to a lot of bad decisions by consumers, companies and governments. We need to see the whole picture.

Let’s look at the losers for a moment, because even there the story is not as bleak as often portrayed. It is frequently stated that the Canadian economy is dependent on exports, especially exports to the United States, and that the higher dollar has made these goods uncompetitive south of the border.

So why isn’t the economy in a tailspin?

The importance of exports to the economy is overstated. The figure used for total exports includes the value of all those bits and pieces that are imported to Canada and used to produce a finished product, such as a car that is then exported. If you subtract the value of all those imported bits, the importance of exports to the overall economy drops, too.

We are not as dependent on the U.S. market as we used to be. Five years ago, the U.S. absorbed 84 per cent of Canadian exports. Now, it accounts for about 76 per cent, and even that number may be overstated because some Canadian goods enter the U.S. only to be shipped onwards to other countries.

The higher dollar has raised the price of Canadian goods in the U.S., but it has also reduced the price of U.S. imports to Canada. This represents a cost savings for companies on anything they import, whether it is a new computer system for the office, heavy machinery for mining, or components that are fitted into a manufactured good and then shipped southward again. These savings may not outweigh exporters’ losses, but they certainly cushion the blow.

Some lucky exporters have seen global prices and demand rise so high that the value of the Canadian dollar has not affected sales. They are making money, just not as much as they might have made had the dollar stayed low. Oil and gas falls into this category, as do a host of metals and minerals that China is consuming at a record rate.

Even a company like Research In Motion, which as a manufacturer based in Ontario would seem to be a certain loser according to conventional wisdom, has found a way to mitigate the damage of a rising dollar with currency hedging. Its financial strategy seems to be working. This week RIM shares soared so high that it became the largest company in Canada in market capitalization.

The point of all this is that even those fingered as surefire losers – exporters and manufacturers – do get some benefit from the loonie’s rise.
And then there are the winners to consider. Most Canadians buying U.S. goods these days are getting a better deal. This is not confined to cross-border shoppers (a phenomenon that has been exaggerated, both in numbers and in actual savings), but also includes Internet shoppers and even those whose travel takes them only as far as the local shopping mall, where retailers have begun reducing prices on products from the U.S.

Anyone who puts gas in the car or turns on the furnace for heat now that autumn has arrived is feeling the benefit of the strong loonie indirectly, because the rise in the value of the dollar has meant that fuel prices have not risen as high as they would have otherwise.

Companies catering to U.S.-bound travellers, such as airlines and travel agents, are seeing a nice boost to their bottom line. Companies thinking of making acquisitions south of the border, such as the banks, are finding it suddenly much more affordable. And governments and companies that have debt denominated in U.S. dollars have seen their debt payments decrease.

The benefits of a stronger currency are so widespread they are not easy to tot up and compare with the disadvantages. But they exist.

So the next time you read an alarmist headline about the dire effects of a strong Canadian dollar, take a deep breath. Yes, there are losers, but there are winners, too. Let’s keep that in perspective.

Wednesday, November 7, 2007

Canada's Border Gaps

(Toronto Star)

Since 9/11 Canada has poured a lot of resources into hardening our borders against unwelcome visitors, crime, contraband and terror.

Currently the Canada Border Services Agency spends $1.5 billion and has a staff of nearly 13,000 to process the 96 million travellers who enter this country every year and cargo valued at $400 billion.

But as Auditor-General Sheila Fraser reported last week, the border remains too porous for comfort. While alert officials red-flagged at least 192,000 air travellers and hundreds of containers last year as potentially “high risk,” based on intelligence and other information, far too many travellers, and too much cargo, got into the country without the second, stern check that those red flags warranted.

How big a problem this poses is anyone’s guess. But the mere fact that we are left guessing is not reassuring.

Looking at red-flag cases earlier this year, the “National Risk Assessment Centre found that an average of 13 per cent of its customs lookouts and 21 per cent of its immigration lookouts from January to March of 2007 were not referred for further examination,” Fraser noted in her annual report. That cannot be good.

Fraser also faulted the border agency for not carrying out more random “spot” inspections to deter wrongdoers.

Despite these concerns, Public Safety Minister Stockwell Day claims, “we’ve seen great improvement” in the past year. Maybe so, but however improved, Canada’s tracking system falls short of the mark. Numbers like these will be bandied about by Canada-bashers in the United States who still think, wrongly, that the 9/11 terrorists slipped into the U.S. from here across an overly porous border, and who want it walled off. More to the point, Canadians deserve more assurance that our border controls are keeping this country as safe as possible.

In Fraser’s carefully measured judgment, Canada's border agency is “still in the early stages of developing an integrated risk management framework.” It has not shifted available resources into high-risk areas. At the same time, the agency has made “little progress” monitoring to see what works and what doesn’t.

Six years after 9/11, this is not good enough. It is not even close, for a Conservative government that insists it is making public safety a top priority. Day and his department have much work to do.

Confusion Reigns Over US Plans to Test Canadian Meat at Border

(The Canadian Press)

Canada dispatched one of its top food inspection officials to Washington Monday as confusion reigned over new “additional import requirements” for Canadian meat and poultry exports heading across the U.S. border.

Bill Anderson, meat program director at the Canadian Food Inspection Agency, will attempt to negotiate with the Americans on new rules announced by the U.S. Department of Agriculture over the weekend to track three pathogens in Canadian chicken, beef and pork.

Although the increased testing for salmonella, listeria monocytogenes and E. coli 0157:H7 had not started Monday, the lack of clarity quickly caused confusion and frustration in the multibillion-dollar meat processing industry.

“The government is disappointed with the USDA decision to take these actions,” said Frederique Moulin, who works with Anderson at the CFIA in Ottawa as national manager of international programs.

The crackdown comes after U.S. regulators pointed the finger at a now-bankrupt Alberta meat packer for being the “likely source” of bacteria-contaminated meat that made at least 40 people sick earlier this year in eight states.

Rancher’s Beef Ltd. of Balzac, Alta., was linked to the outbreak of a particularly dangerous strain of E. coli that led to the second largest beef recall in U.S. history in September that forced Topps Meat Co. of New Jersey out of business.

Although Rancher’s had stopped operating in August after owing creditors at least $44 million, a September report by the bankruptcy trustee said inventory was still being sold.

Calls to company officials were not returned Monday.

A joint investigation with Canadian and U.S. officials matched the DNA fingerprint of E. coil 0157:H7 bacteria isolated from beef trim found in storage at Rancher’s and packages of Topps frozen hamburgers.

The CFIA also continues to study a possible link between the contaminated Rancher’s meat and a E. coli outbreak across Canada during the past summer that affected 45 people – putting 11 in hospital and killing one elderly person.

“We continue our investigation and collaboration with the U.S. and expect the interim measures will be reconsidered,” Moulin said Monday.

Last Saturday, USDA Under Secretary for Food Safety Richard Raymond announced that all shipments of meat coming from Canada would be held until testing is complete.

“In addition, Canadian meat and poultry products will receive increased levels of re-inspection ... to confirm they are eligible to enter commerce when presented at the U.S. border.”

Moulin said the U.S. is suggesting that the extra testing willstart this week.

“It’s going to create disruption for sure, but we hope the disruption will be at a minimum,” she said.

U.S. officials are also expected to arrive in Canada later this week to begin an audit of the Canadian food safety system, with a focus on Rancher’s but also to include other meat processing plants.

The Ottawa-based Canadian Meat Council said Monday that many unknowns remained over the heightened Canadian requirements in an industry that requires a high level of planning and scheduling.

Executive director Jim Laws said some meat processors sent shipments over the weekend but held the trucks back on Monday awaiting clarification on what the new rules will mean.

“We don’t exactly know what their intentions are because they’ve mentioned `test and hold,’ well what does that mean? Where are they going to do it? And how can we actually do that because there’s a lot of trucks that go across every day.”

Canada’s meat export business relies on the U.S. as its main customer and remains hopeful that an American audit of the Canadian food safety system can avoid much more stringent testing requirements.
“It’s all very nice for them to say they’re going to do this, but what’s this going to mean in terms of details? How are you going to test? Where are you going to hold? Are you going to allow us to ship the product through to the final destination? Then what?”

“It’s also going to raise a lot of worry from the U.S. buyers as well.”

Rob McNabb of the Canadian Cattlemen’s said the USDA announcement was “to be kind, somewhat premature without some of the details at either the U.S. end or our end being worked out.”

McNabb said the new testing will initially force Canada to higher standards than all other countries importing meat into the U.S. But he hopes the extra testing will be removed following the safety audit.

“When an authority or agency responsible for food safety experiences some significant political pressure, these things will tend to happen.”

Tuesday, November 6, 2007

U.S. to Boost Testing of Imported Canada Meat


Meat and poultry products being imported from Canada will be subjected to increased testing and inspection after an outbreak of E. coli in several U.S. states traced to beef from a Canadian company, the U.S. Agriculture Department said on Saturday.

The USDA’s Food Safety and Inspection Service said it would increase testing for salmonella, listeria monocytogenes and E. coli O157:H7. The agency said it would require the products be held until testing shows they do not contain any of those pathogens.

The bacteria can cause abdominal pains, diarrhea and dehydration.

Canadian meat and poultry products will also receive increased levels of reinspection by FSIS officials to confirm they are eligible to enter the U.S. market. Those requirements will begin next week.

The FSIS said it would also conduct an audit of Canada’s food safety system. The audit will focus on plants that export beef to the United States.

“The audit and stepped-up actions at the border are being conducted because of concerns about testing practices at Ranchers Beef, Ltd that were discovered as part of the ongoing investigation,” said U.S. Agriculture Undersecretary Richard Raymond.

Alberta-based Ranchers Beef, which has ceased operations, is believed to be the source of the multi-state outbreak of E. coli infections linked to the U.S.-based Topps Meat Co in September, the FSIS said. The agency delisted Ranchers Beef as an importer on October 20.

The recall of 21.7 million pounds (9.8 million kg) of ground beef was the fifth-largest meat or poultry recall in U.S. history and led to nearly 100 illnesses in the two countries. Topps Meat has since gone out of business.

The preliminary findings from the audit by the FSIS will determine whether the additional testing and inspection rules remain in place.

“These measures are being taken to further ensure the equivalency of the system already in place,” said Raymond. “We continue to work together with our food safety partners both domestically and internationally to ensure imported meat and poultry products are produced ... at least equivalent to those in the United States.”

Minister Decries Food Fees

(The Globe and Mail)

Industry Minister Jim Prentice is lobbying key members of the U.S. Congress to head off steep new user fees on imported foods that could sideswipe Canadian exports worth billions of dollars.

Mr. Prentice met yesterday in Washington with Michigan Senator John Dingell, who is aggressively pushing a bill that would slap fees on all imports to pay for a food-inspection crackdown.

Food manufacturers have complained that the levies, inspired by concerns about tainted food from China, would unfairly hit Canadian and U.S. companies operating on both sides of the border.

“Canadian products are not the issue,” Mr. Prentice told reporters before meeting Mr. Dingell, the powerful chairman of the House energy and commerce committee.

“We want to make sure that Canadian and American products are not swept up in unintended consequences.”

Canada is the single largest exporter of food and agricultural products to the United States, shipping more than $16-billion worth last year.

Mr. Prentice, who also raised the issue in a meeting with U.S. Commerce Secretary Carlos Gutierrez, suggested the fees are unwarranted because Canada and the United States have a similar interest in managing the risk of tainted food.

“Canadian products ... are not products for which there are concerns about safety,” he added. “Canada and the U.S. have similar concerns.”

A top executive of Campbell Soup Co., which operates plants in Ontario and the United States, complained that Canadian companies would wind up paying 10 times more in fees than China and twice as much as all European countries combined.

Not only is this because of the sheer volume of exports, but some grocery products may contain as many as 20 ingredients and cross the border multiple times before being shipped to stores. Each time an item crosses the border, it would be hit with a fee.

“This is not a good, risk-based approach,” Kelly Johnston, Campbell Soup’s vice-president of government affairs, said yesterday at a conference on Canada-U.S. border issues at the U.S. Chamber of Commerce.

Mr. Dingell’s bill, which has the support of key Democratic leaders in the Senate, would also restrict the entry of food imports to just 13 U.S. border stations, down from the current 300. Mr. Dingell wants to pass his bill before the end of the year.

The exact level of the fees hasn’t been set yet.

The food industry has predicted the bill would cause chaos at the border and unfairly punish companies that have plants on both sides.

Critics have also warned that the measure could run afoul of World Trade Organization rules because the proposed fees unfairly discriminate against imports.

In a speech to the Chamber of Commerce conference, Mr. Prentice warned that border delays are already costing U.S. and Canadian companies billions of dollars a year.

Mr. Prentice said he would work with Mr. Gutierrez to ease border delays and other trade problems through the so-called Security and Prosperity Partnership – a Canadian, U.S. and Mexican initiative to enhance security and boost trade between the three countries.

At a recent summit in Montebello, Que., the leaders of the three countries made “food and product safety” one of five priorities for the partnership.

Complaints about the proposed food-inspection fees were just one of a long list of irritants highlighted by business people attending the Chamber of Commerce event.

Microsoft lobbyist Marland Buckner complained about an “exceptionally challenging trade and immigration environment” in Washington.

He said the software maker, based in Redmond, Wash., recently added jobs at its new research lab in Vancouver, instead of at its U.S. facilities in part because of its inability to get U.S. visas for skilled foreign workers.

Other speakers at the conference complained about a surge in delays at Canada-U.S. land borders this past summer, caused by a host of factors, including inadequate staffing on the U.S. side, computer glitches and stricter screening of trucks and drivers.

Exporter Situation to Worsen Before Improving

(Export Development Canada)

The strong Canadian dollar and slower consumer spending in the U.S. and globally will make conditions even more challenging for many Canadian exporters in 2008, according to the quarterly Global Export Forecast released today by Export Development Canada (EDC).

“2008 will be the third year in a row of essentially flat export shipments,” said Stephen Poloz, Senior Vice-President of Corporate Affairs and Chief Economist. “But even that misses an important story, which is that many Canadian exporters have been trying to maintain export sales even as the rising dollar has squeezed their profit margins.”

The value of total export sales is forecast to grow by 1.5 per cent in 2008, after price-induced growth of 3.7 per cent in 2007. World economic growth will slow further to 4.5 per cent after 4.9 per cent in 2007 and 5.4 per cent in 2006, as U.S. weakness spills over into both major and emerging markets.

U.S. consumers are coming under increased stress as the housing recession spreads to the broader economy. The financial market turbulence of mid-2007, itself a symptom of weakness in the U.S. housing sector, is combining with the lower U.S. dollar to slow consumer spending in Europe and Japan.

Despite their significant growth in recent years, emerging markets remain highly dependent on exports of consumer goods to the major economies. While the impact of slower world demand will not be immediate, it will become increasingly evident through 2008. Global market turbulence will be felt to some degree in all emerging markets, but the riskiest markets will be more acutely affected as creditors recalibrate risks and adjust their exposures.

Canadian economic numbers have remained strong thus far and strong global demand for commodities, resource-based intermediate goods and agri-food products has boosted prices and the value of Canadian exports in 2007. As the world economy loses momentum, commodity prices will retreat, and this will lead to a softening of the Canadian dollar through 2008.

Although the outlook for oil prices, and therefore the Canadian dollar, remains highly uncertain, it is expected that lower oil prices and rising global risks will cause a general strengthening of the U.S. dollar, and a decline of the Canadian dollar to less than 90 cents by the end of 2008.

The outlook remains good for some of Canada’s export sectors. Export growth will hold up well in such sectors as agri-food, fertilizers, energy, aerospace and machinery in 2008. In contrast, sectors such as consumer goods, ores, metals, chemicals, plastics, rail equipment, telecom equipment and automotive products are forecast to be weak. Growing geographic diversification in Canadian exports is expected to continue throughout the forecast period. Exports to the developed world are forecast to rise by less than 1 per cent in 2008. Export growth in emerging markets is projected to reach 11 per cent, down from 24 per cent in 2007.

In 2007 there has been significant variation in export growth among the provinces. Those provinces with a large share of energy, mining or agri-food in their export mix are performing well above the national average. Those provinces relying more heavily on manufactured goods, particularly autos, telecom equipment and consumer goods, have experienced much slower export growth over the past year.

Provincial export growth will again vary widely in 2008. Saskatchewan will lead the way, with a 12 per cent increase. Decent growth rates of 7 per cent are projected in Manitoba, 6 per cent in New Brunswick, and 5 per cent in Newfoundland and Labrador and Prince Edward Island. An increase of 4 per cent is expected in Alberta and 3 per cent in Nova Scotia. British Columbia will grow by a modest 1.7 per cent. Ontario’s exports are expected to decline by 1 per cent, and a 1.4 per cent decline is forecast for Quebec.

“Preparing for slowdown, and predicting its duration is never easy,” continued Mr. Poloz. “But there are good fundamental reasons to believe that the global economy will avoid recession. On balance, the world enjoys a far sounder structural platform than in the past, putting it in a much stronger position to rebound from a weak period and then revive in 2009. The big unknown is whether the U.S. consumer will stabilize. If not, Canadian exporters could face noticeably weaker conditions than we are forecasting.”

EDC’s semi-annual Global Export Forecast addresses the latest global export conditions including perspectives on interest rates, exchange rates as well as export strategies to help Canadian companies minimize risk. It also analyzes a range of downside risks for which exporters should be prepared. The Forecast is available on EDC’s website.

EDC is Canada’s export credit agency, offering innovative commercial solutions to help Canadian exporters and investors expand their international business. EDC’s knowledge and partnerships are used by 6,400 Canadian companies and their global customers in up to 200 markets worldwide each year. EDC is financially self-sustaining and is a recognized leader in financial reporting, economic analysis and has been named one of Canada’s Top 100 Employers for seven consecutive years.

Sunday, October 21, 2007

Work at Canadian Border Crossing to Begin Nov. 5

(Seattle Post-Intelligencer)

Major construction at the Peace Arch Canadian border crossing will begin Nov. 5 -- and bring major delays.

Officials said Thursday that the $70 million-plus project – to be completed by January 2010 – will completely rebuild the border station, increasing border security and expanding traffic capacity.

Work on southbound lanes will cut the number of inspection booths for people entering the United States by about 50 percent – with four remaining. Work on northbound lanes into Canada will be in January.

Vancouver is hosting the 2010 Winter Olympics Feb. 12-28.

The Blaine border crossings between Washington and British Columbia see the third-highest volume of passenger traffic and the fourth-highest volume of commercial trucks along the entire U.S.-Canadian border, according to the Washington Department of Transportation, which calculates that commercial traffic has increased 85 percent over the past 10 years.