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Volume 16, Issue 2, January 13, 2016

Inside This Issue:

• Register Now for Canada Night in Chicago
• Improve Your Financial/Investing Knowledge at Complimentary CHHMA Seminar
• Want to Know More About Millennials? Register Now for January 28th Seminar
• Lots to See at the 2016 International Home + Housewares Show
• Lowe’s Canada Announces Newly Appointed Divisional Vice President of Merchandising
• Hudson’s Bay to Buy Online Shopping Retailer Gilt for $250M
• Business Hiring, Spending Plans at Lowest Since 2009: Bank of Canada
• Canadian Housing Starts Fall in December as Condo Construction Plummets
• Value of Canadian Building Permits Plunges on Alberta Weakness
• Canada Adds 23,000 Jobs in December
• Bank of Canada’s Poloz Says Get Use To Weaker Loonie
• Latest U.S. Economic News

Association News

Register Now for Canada Night in Chicago

The 67th Canada Night reception will be held on Sunday, March 6, 2016, 6:00 to 8:00 p.m. at the InterContinental Hotel, Renaissance Ballroom in Chicago.

Canadian vendors, agents and suppliers to the industry in town for the International Home+Housewares Show are invited to purchase tickets to the event while Canadian retailers are invited as complimentary guests of the sponsoring companies.

The intent of the evening is to give everyone an opportunity to mix and mingle with peers and customers in a convivial environment celebrating the common bond of being Canadian while enjoying wine, beer, caesars and appetizers.

New this year will be live jazz and a whiskey tasting bar!

The registration fee is $175 (Cdn) per person (at the door price $225).

For all the details and to register, click here.  

We look forward to seeing you in Chicago!

Improve Your Financial/Investing Knowledge at Complimentary CHHMA Seminar

TD Wealth, Geoff Kidder (Investment Adviser to the CHHMA) and a team of financial experts are thrilled to offer an exclusive and insightful morning of knowledge that you can immediately put into action to start earning better returns on your investments, pay less tax, and ensure you are on the road to achieving financial peace-of-mind.
This wealth management seminar is complimentary to CHHMA members and will be held on Wednesday, February 10, 2016 at the International Centre (Conference Facility) in Mississauga, ON.

Registration and hot breakfast will take place from 8:00 to 9:00 a.m. followed by presentations from 9:00 to 11:30 a.m.

Providing You With Financial Peace-of-Mind: Wealth Management Solutions in a Low interest Rate World

Here's what the seminar will cover:

- The Best Wealth Management Solution in Canada
        Using Corporate Class mutual funds to reduce the taxes you pay on your investment income
- Market Neutral Investing
        Reduce risk when investing in equities without giving up return potential
- Estate Planning
        Reduce taxation when passing your legacy on to your heirs
- Investing in a Low Interest Rate World
        Understanding Principal at Risk and Principal Protected Notes
- Private Banking, Estate and Trust Services
        Understanding Wills & Powers of Attorney
- Business Succession Planning
        The Three Key Things You Must Know Before You Sell Your Business

 For more details and to register, click here

Want to Know More About Millennials? Register Now for January 28th Seminar 2016

The CHHMA is also pleased to offer our members an opportunity to attend an informative seminar on Decoding the Mysteries of Managing Millennials on Thursday, January 28, 2016.

Based on the latest research and practical workplace observations it is clear that managers are frustrated by the perceived neediness of their younger employees.  And at the same time, younger employees are frustrated with the lack of interaction and guidance they receive from their managers.

Whether you are a millennial yourself, or a more seasoned co-worker, manager, parent or grandparent to a millennial you’ll find this session interesting and insightful. Sales and business development staff will satisfy their curiosity on how to modify their approaches to sell and service younger customers and contacts.

Get ready to:

• See the difference between the myths and facts about Millennials
• Learn how to communicate and engage with Millennials
• Sell and service the next generation of customers and contacts to maintain and grow your business
• Use a handful of practical leadership strategies to attract, retain, motivate and engage younger workers
• How to combine the powerful forces of more seasoned experienced team members with the fresh new perspective of younger team members.

The Expert Presenter

Greg Schinkel is a thought leader in the area of front line leadership and management. He has authored or co-authored several books on leadership including Employees Not Doing What You Expect, What Great Supervisors Know, Awakening the Workplace and Fusion or Fizzle: How Leaders Leverage Training to Ignite Results. As a Certified Speaking Professional, Greg is in the top 10% of speakers and trainers globally. His captivating blend of style and substance will make for an insightful and engaging session. Learn more about Greg at

The seminar will take place at the CHSI (Centre for Health & Safety Innovation), 5110 Creekbank Road, Mississauga, ON L4W 0A1 on  Thursday, January 28, 2016.  Registration (coffee & muffins will be served) from 8:30 to 9:00 a.m., followed by the presentation from 9:00 to 11:00 a.m. The cost to attend is $59.99+HST per person.

Click here to register now.

Industry News

Lots to See at the 2016 International Home + Housewares Show

The 2016 International Home + Housewares Show is less than two months away! It sold out in late December, more than 10 weeks before opening day, according to the International Housewares Association, the Show’s owner and operator. The Show begins at 10 a.m. on Saturday, March 5 and closes at 3 p.m. on Tuesday, March 8.

The Show will host more than 2,100 exhibitors from around the world, including 400 new companies exhibiting for the first time.

In addition, the Show will feature new branding focusing on the “It’s smART” theme, which combines smart business decisions directly with the art used to design, create and market products.  Show signage and visuals will reflect the melding of smart thinking and smart design. Also new this year, the Discover Design category has been expanded to an expo and moved to a new location in the North Building.  The Discover Design Expo will feature nearly 200 companies and brands from all Show categories, and Design Debut, which allows 10 new-to-the-Show exhibitors whose product demonstrates high-design and innovation to come and experience the International Home + Housewares Show without having to create an entire display.

Adjacent to Discover Design will be The Aisle of Style featuring high-design focused exhibitors from the Clean + Contain Expo. Within The Aisle of Style will be the Lounge, containing sleek white leather couches, illuminated cylinders featuring high-gloss photos of design products and serving as the front row to Discover Design.

Other Show highlights include the New Exhibitor Preview on Saturday morning before the Show opens; the Hall of Global Innovation featuring the Show’s special exhibits, including Pantone ColorWatch, IHA Global Innovation Awards (gia) and the IHA Student Design Competition; the Innovation Theater with 20 presentations exploring important issues including the Internet of Things, global shoppers and millennials; and the standing-room-only educational seminars led by IHA’s color expert Leatrice Eiseman and lifestyle guru Tom Mirabile. A Power Hour from 5:30-6:30 p.m. on Saturday through Monday offers exhibitors and buyers an opportunity to extend their meetings for an additional hour after the 5:30 Show close. Appointments for Power Hour are encouraged.

For a complete list of education sessions and other events at the 2016 International Home + Housewares Show, visit:

To register for a no-charge Show badge, visit:  To view the entire Show lineup, visit and search Housewares Connect 365 to download a complete list of 2016 exhibitors as well as to view floor plans, product catalogs, new product photos and videos and complete company contact information for each exhibitor.

Lowe’s Canada Announces Newly Appointed Divisional Vice President of Merchandising

Lowe's Canada announced the appointment of Alan Blundell as Divisional Vice President, Merchandising effective January 11, 2016.

Mr. Blundell joins Lowe's Canada with over 18 years of merchandising experience in the retail industry. In this newly created position, he will oversee the merchandising function and be responsible for leading a customer-centric approach to the company's category management strategy. Blundell will report to Igor Halencak, Head of Merchandising and Marketing for Lowe's Canada.

"As we continue to focus on improving our assortment and offering great quality products and services at affordable prices that our Canadian customers expect, the time is right to have a merchandising lead that will solely focus on delivering an omni channel, customer centric category management focus to the organization," said Mr. Halencak. "Alan's experience and customer focused approach will be a great benefit to Lowe's and will allow us to further improve our customer experience."

Prior to Lowe's, Alan was with Walmart Canada for 16 years where he held various senior level merchandising roles, including his most recent leadership position as Vice President of Merchandise Operations.

Alan attended York University and also participated in a program for leadership development at Harvard Business School.

In Canada, Lowe's opened its first stores in December 2007 and now operates 40 stores in Ontario, Alberta, Saskatchewan and British Columbia with more than 6,000 employees. In July 2015, Lowe's announced plans to open 14 new stores in Canada bringing its total store count to 54 locations. Since then, an additional store has also been announced in Cornwall, Ontario. Lowe's opened its 40th store in Saskatoon in August 2015, with its next locations set to open in Ancaster and Mississauga in late January. The company plans to grow to 70 stores by the end of 2017.

Source: Lowe’s Canada   

Hudson’s Bay to Buy Online Shopping Retailer Gilt for $250M

The Hudson's Bay Company announced last Thursday that it has agreed to buy online retailer Gilt Groupe Holdings for $250 million (U.S.) cash in order to advance the company's off-price business through integration with Saks OFF 5TH stores.

Gilt has more than nine million members, including a devoted millennial following, according to HBC.

“Adding Gilt to our rapidly growing digital business is very exciting and we see tremendous potential to enhance our mobile and personalization strategies by leveraging Gilt’s advanced capabilities,” said Jerry Storch, chief executive officer of HBC, in a press release.

Headquartered on New York City's prestigious Park Avenue, Gilt was founded by Kevin Ryan in 2007 as an invitation-only site for women's clothing and accessories. It has since expanded into products for homes, babies and children and men. The company focused on so-called flash sales, in which consumers have a limited amount of time to buy clothes, accessories and furniture sold by the site. But the company has struggled to reach profitability, a planned IPO failed to materialize and the business was scaled back and employees were laid off.

HBC expects to fund the $250 million purchase price plus transaction costs using cash on hand. The acquisition is expected to add about $500 million (U.S.) to HBC's overall revenue this year, according to the Canadian Press.

About half of Gilt's revenue is generated by mobile shoppers.

“HBC and Saks OFF 5TH are the ideal home for Gilt and our members,” said Michelle Peluso, chief executive officer of Gilt.  “HBC understands our proposition and is committed to positioning our business for further success.

“Our members will find having a brick and mortar presence valuable and a positive addition to the Gilt experience. We are excited for our future and confident that we have the right team in place to continue to innovate the shopping experience and grow Gilt.”

Gilt returns will be accepted at Saks Off 5TH stores, increasing customer traffic. Gilt concept stores will be opened in Saks OFF 5TH locations. The move will allow the two companies to streamline shipping costs, increase purchasing power and share inventories, according to the press release.

The first Saks Fifth Avenue and Saks OFF 5TH stores are scheduled to open in Canada this year.

HBC says it expects the transaction to close by Feb. 1, after getting approval from Gilt’s shareholders.

Source: The Toronto Star, The Canadian Press  

Economic News

Business Hiring, Spending Plans at Lowest Since 2009: Bank of Canada

The fallout from the commodities price collapse is now spreading far beyond the oil patch, souring the mood of Canadian businesses and derailing their plans to hire and invest.

The Bank of Canada’s closely watched Quarterly Business Outlook Survey, released Monday, shows hiring and investment plans at their lowest levels since the aftermath of the last recession in 2009.

“The negative effects of the oil price shock are increasingly spreading beyond the energy-producing regions and sectors,” the bank said in the survey.

The bank said weak commodity prices “poses significant challenges for many businesses.”

The report reinforces the gloomy economic environment so far in 2016 marked by depressed oil prices, the weak Canadian dollar, slowing global growth and falling stock markets.

The results mirror the Conference Board of Canada’s monthly index of consumer confidence, also released Monday, which fell to its lowest level in two years in December.

In a speech last week, Bank of Canada Governor Stephen Poloz characterized the commodities price rout as a “seismic shift” that could last up to five years and drain $50-billion a year from the Canadian economy.

Most economists expect the central bank to keep its already-low key interest at 0.5% at its next rate-setting meeting Jan. 20, upping pressure on the federal Liberal government to get on with its plan to stimulate growth with billions of dollars of new infrastructure spending.

Investors are still anticipating another central bank rate cut some time this year.

A roughly equal number of respondents in the central bank’s survey reported higher and lower sales in the past 12 months. A slight majority of companies anticipate higher sales in the year ahead.

The one bright spot in the business outlook comes from exporters who are not connected to the resource sector. These companies, particularly manufacturers, report that they are benefiting from strengthening demand, and expect to do even better as the U.S. economy recovers.

“Exporters not linked to commodity production anticipate significantly stronger sales growth than other firms,” the bank pointed out. “The divergence between foreign and domestic demand was highlighted by firms in most regions.”

Among the positive effects of the cheaper dollar is that Canada’s tourist businesses are doing better. And while most companies are facing higher input prices because of the weak dollar, some companies are coping by switching to Canadian suppliers. A “few firms” are even planning to bring production back to Canada, the bank said.

Plans to hire and invest have also weakened since the last survey in the fall. The balance of opinion on investment is now negative. The balance of opinion on hiring is modestly positive.

On inflation, a majority of respondents reported that the weaker dollar has already increased the price of imported inputs, but most expect less upward price pressure in the year ahead.

A separate survey of senior loan officers, also released Monday by the bank, said business lending conditions “tightened slightly” in the fourth quarter of 2015, but was exclusively concentrated in the oil and gas sector.

The business outlook survey, released four times a year, is based interviews with executives roughly 100 companies, selected to reflect the diversity of the Canadian business sector. The most recent survey was conducted Nov. 12 to Dec. 8.

Source: The Globe and Mail  

Canadian Housing Starts Fall in December as Condo Construction Plummets

Canadian housing starts fell more than expected in December from a month earlier as construction of multiple units, typically condominiums, dropped sharply, the Canada Mortgage and Housing Corporation (CMHC) reported on Monday.

The seasonally adjusted annualized rate (SAAR) of housing starts dropped 18.4% to 172,965 units in December from an upwardly revised 212,028 units in November. Forecasters expected 200,000 starts.

CMHC’s trend measure of housing starts in Canada was 203,502 units in December compared to 208,204 in November. The trend is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

“A decrease in both the multiple and single starts segments drove the December trend lower,” said Bob Dugan, CMHC chief economist.

“Starts increased in 2015 compared to 2014, largely driven by the condominium market in Toronto. Had the Toronto condominium starts remained stable in 2015, national starts would have declined on a year-over-year basis.”

The SAAR of urban starts decreased by 19.1% in December to 159,007 units. Multiple urban starts decreased by 27.0% to 101,264 units in December and the single-detached urban starts held steady at 57,743 units.

In December, the seasonally adjusted annual rate of urban starts decreased in the Prairies, Ontario, and Atlantic Canada, but increased in British Columbia and Québec.

Rural starts were estimated at a seasonally adjusted annual rate of 13,958 units down 10.4% from 15,583 units in November.

For 2015 as a whole, actual housing starts rose 3.3% to 195,536 units from 189,329 units in 2014, with all of the strength coming from construction of multiple-unit dwellings. Single detached housing starts were lower in 2015.

“Although we’re ending the year on a soft note, housing was one area that surprised to the upside in 2015, with the 194,000 average building pace up around 10,000 from the prior year,” CIBC Capital Markets economist Nick Exarhos said in a research note.

“Furthermore, because of the general acceleration in the second half of 2015, residential investment is still likely to provide a modest catalyst to growth in the next few quarters as new projects are seen through to completion.”

Canada’s national housing market defied predictions for a slowdown in 2015 as strong demand in Toronto and Vancouver, the two largest markets, continued to boost sales and prices, offsetting a decline in much of the rest of the country, particularly the energy-dependent west.

With the broader economy suffering from a drop in the price of oil and other commodities, housing is one of the few remaining bright spots in Canada’s outlook, though some analysts remained concerned about an oversupply of condominiums.

Source: CMHC, Reuters     

Value of Canadian Building Permits Plunges on Alberta Weakness

The value of building permits issued by municipalities was down 19.6% from October to $6.2 billion in November, falling below the $7-billion mark for first time since May 2015. The decrease was the result of widespread declines in both residential and non-residential sectors in most provinces, particularly Alberta – which had seen a boom in October, Statistics Canada reported last Friday.

The decline – far greater than the 3.0% drop forecast by analysts in a Reuters poll – was the greatest since the 26.7% retreat seen in August 2014.

Alberta saw record demand in October as contractors rushed to apply for permits ahead of planned changes to the province’s building codes. The frenzy cooled off in November, dragging down the entire Canadian market.

The value of residential building permits fell 17.8% to $4.0 billion in November, the third decline in four months. The decrease stemmed from lower construction intentions for multi-family dwellings in nine provinces, led by Alberta, which had posted strong gains the previous month. British Columbia, Saskatchewan and the Northwest Territories registered advances in residential construction intentions.

The value of building permits for multi-family dwellings fell 33.7% to $1.7 billion in November, the third decline in four months. Decreases were recorded in nine provinces. Much of November's decline came from Alberta, which had posted a record high in October. Notable decreases were also registered in Quebec and Ontario. British Columbia was the lone province to post an increase.

The value of building permits for single-family dwellings, which was fairly stable at around $2.3 billion for the last three months, edged down 0.6% in November. Advances in six provinces failed to offset declines in the other four provinces, with Alberta posting the largest decrease.

Municipalities approved the construction of 15,038 new dwellings in November, down 24.3% from October. The decline was mainly attributable to multi-family dwellings, which fell 33.1% to 9,450 units. The number of single-family dwellings declined 2.5% to 5,588 units.

The high prices associated with the purchase of single-family dwellings in major Canadians cities have contributed to an increasing shift in housing demand toward multiple dwellings. Commencing in 2007, multi-family dwellings have accounted for more than half of new units approved. From January to November 2015, 66.2% of new residential units approved were multi-family dwellings.

In the non-residential sector, the value of permits decreased 22.7% to $2.2 billion in November, following slight gains the two previous months. Declines were posted in seven provinces, led by Alberta, with Saskatchewan a distant second. The largest increase was in Quebec, followed by British Columbia and Ontario.

Following slight gains the previous two months, the value of non-residential building permits declined in all three non-residential components. The decrease was largely the result of institutional and commercial buildings and, to a lesser degree, industrial buildings.

The value of permits for institutional structures fell 32.6% to $688 million in November, following a 36.3% advance in October and a 16.4% gain in September. Lower construction intentions for special care institutions, government buildings and medical facilities largely explained the decline at the national level. Decreases were posted in six provinces, led by Alberta and Saskatchewan. The largest increases were in Quebec and British Columbia.

In the commercial component, the value of building permits was down 20.7% to $1.1 billion in November, a third consecutive monthly decline. Lower construction intentions for office buildings, retail outlets and recreational facilities accounted for the majority of the decrease. Declines were reported in seven provinces, led by Alberta, followed by Manitoba and New Brunswick.  The largest increases in the component were recorded in British Columbia and Ontario.

Industrial building construction intentions were down 6.8% to $418 million in November, the fourth decline in five months.  The decrease at the national level was largely a result of lower intentions for primary industry buildings and manufacturing plants. Declines were posted in five provinces, led by British Columbia and Alberta. Ontario and Quebec recorded the largest increases.

Regionally, the total value of building permits was down in nine provinces in November, with Alberta posting the largest decline. Saskatchewan was a distant second. British Columbia was the lone province to report an increase.

After record high construction intentions in October, largely as a result of contractors filing permits in advance of the changes in the Alberta Building Code, the value of building permits in Alberta fell 56.0% to $953 million in November. The decline was the result of lower intentions for all components, led by multi-family dwellings and, to a lesser extent, institutional structures and commercial buildings.

The value of building permits in Saskatchewan was down 54.3% to $149 million in November. The decline was largely attributable to lower construction intentions for institutional buildings.

In British Columbia, the value of building permits was up 4.2% to $1.1 billion. Gains were posted in every component except industrial buildings.  The advance was largely the result of higher construction intentions for institutional buildings and single-family dwellings.

Source: Statistics Canada, Reuters 

Canada Adds 23,000 Jobs in December

Canada added 23,000 jobs in December, surpassing expectations due to gains in self-employment, health care and education.

December’s gains helped reverse huge election-related job declines in November and capped a tumultuous year for job creation. The country added a total of 158,000 jobs in 2015, an increase of 0.9% over the previous year, despite mass layoffs in the energy sector.

The unemployment rate remained at 7.1% for the second consecutive month, according to Statistics Canada’s data released last Friday.

Analysts polled by Bloomberg had expected the economy to create 8,000 new jobs in December and the unemployment rate to stay at 7.1%.

In December, employment increased by 17,000 in health care and social assistance, 15,000 in educational services and 10,000 in finance, insurance, real estate and leasing.

Conversely, employment declined by 14,000 in accommodation and food services and 7,900 in agriculture.

In December, the number of self-employed increased by 40,000, while the number of private and public sector employees was little changed.

Ontario was the lone province with employment growth in December, up 35,000. This lowered the unemployment rate in the province by 0.2 percentage points to 6.7%.

The deep decline in crude prices has led to a 6.8% decline in employment in the natural resources sector with oil-rich Alberta bearing most of the losses.

The western province lost 20,900 energy, mining and other natural resources positions last year.

Weakness in other commodities like iron ore, metallurgical coal and potash also led to job losses in resource-rich regions like Newfoundland and Labrador and Saskatchewan.

Meanwhile, British Columbia’s employment rose 2.3% and Ontario’s grew 1.2%.

For the year, the construction industry shed 19,000 jobs and accommodation and food services lost 28,000.

On the positive side, the services industry continued to create new jobs, growing 5.2% last year.

The manufacturing sector created 36,000 new jobs and the finance industry added 14,600 jobs.

Among the major demographic groups, only men and women aged 55 and older recorded employment growth in 2015, up 6.3% (+220,000). Over the same period, their population rose by 310,000. The participation rate for this group increased 1.2 percentage points to 37.8%, as growth in labour market participation outpaced population growth over the period. The unemployment rate for this group was little changed at 5.8%.

In the 12 months to December, employment was little changed among people aged 25 to 54, as was their population. However, their unemployment rate increased 0.8 percentage points to 6.3% as more of them searched for work.

Employment among youths aged 15 to 24 fell 1.9% (-48,000), while their population declined by 43,000. Despite the decline in employment, their unemployment rate was little changed at 13.0%, as fewer youths participated in the labour market.

“Canadian job markets were very resilient in the face of the plunge in commodity prices,” Bank of Nova Scotia said in a research note.

“The question mark is whether such gains are sustainable into 2016 and the composition of recent numbers raises serious question marks,” said the note.

Hiring in the private sector was flat compared with the previous year while the public sector added 41,000 new jobs, an increase of 1.1%, and self-employment grew by 92,000 jobs, or 3.4%.

“A nice headline masking a continuing trend for weak hiring by private sector companies in Canada,” said Avery Shenfeld, chief economist with CIBC.

For most of last year, the jobless rate hovered around 7% after briefly dipping as low as 6.6% in January.

The energy patch has forecast further layoffs and deeper spending cuts if oil prices do not recover. Oil is trading close to $30 (U.S.) a barrel, down 70% since mid-2014. The Bank of Canada warned this week that it could take three to five years for Canada to adjust to lower commodity prices.

Source: Statistics Canada, The Globe and Mail       

Bank of Canada’s Poloz Says Get Use To Weaker Loonie

Bank of Canada Governor Stephen Poloz says Canadians should get use to both a cheap dollar and some inflation as the country continues to grapple with the shock of falling commodity prices.

The Canadian dollar, now at less than 71 cents (U.S.), is working to offset billions in lost revenue from exports of oil and other commodities, while making non-energy exports more competitive in world markets.

“Movements in exchange rates are helping economies, including ours, make the adjustments that must take place,” Mr. Poloz said in a speech last Thursday at Ottawa’s city hall.

Speaking to reporters after the speech, Mr. Poloz acknowledged it could take 3-5 years for the Canadian economy to adjust to the new reality of a lower commodity price world.

And for the first time, Mr. Poloz quantified the cost to Canadians of lower commodity prices and higher import prices. He said it’s draining $50-billion (Canadian) a year out of the economy every year – $1,500 for every Canadian. Mr. Poloz said he’s fully prepared to live with a bit more inflation, which he insisted is mainly temporary. “Core inflation is overstating the underlying trend of inflation in the economy,” he said.

Mr. Poloz also played down the implications for Canada of the recent turmoil in Chinese financial markets and dismissed fears of a global race to devalue currencies.

“It’s not a war. It’s a process,” he told reporters.

Mr. Poloz’s vigorous defence of the weaker Canadian dollar comes as the U.S. Federal Reserve has begun to push up its key short-term interest rate. This is putting additional downward pressure on the loonie.

In his speech, Mr. Poloz highlighted the divergence in monetary policy around the world as countries react differently to the commodities price shock. He added that the Bank of Canada is prepared to use unconventional tools, such as negative interest rates and so-called quantitative easing -- even as the Fed moves in the opposite direction by hiking its benchmark interest rate.

The downside of the cheaper dollar – down more than 30% from its peak – is that it makes a wide range of imports pricier, spreading the pain of the oil price shock from the oil patch to the rest of the country, Mr. Poloz pointed out in his speech.

The Bank of Canada doesn’t seem inclined to raise interest rates to quell those inflation pressures. Mr. Poloz said that would cause more damage to the economy.

In the speech, Mr. Poloz said no simple policy response will fix the problem, although some measures can buffer the negative effects of factors such as the steep slide in oil prices.

“The forces that have been set in motion simply must work themselves out,” Poloz said in a prepared text of a speech at Ottawa City Hall.

He noted that Canada’s the dollar has tumbled along to roughly the same levels they stood at over a decade ago.

“It is not a coincidence that the Canadian dollar is about where it was back in 2003 and 2004 — oil prices are also about where they were back then,” said Poloz, who also listed some of the benefits of a lower loonie.

At the time of the speech, the loonie was trading below 71 cents (U.S.), about where it was in mid-2003 as the currency when it was recovering from a historic low of 61.79 cents set in January 2002.

Almost like it was 2002 all over again, Poloz said the complex economic changes have led to higher consumer spending, falling employment and lower investment in the resources sector. Non-resources sectors, meanwhile, have seen rising employment and investment, Poloz added.

Mr. Poloz’s comments left economists scratching their heads about whether the Bank of Canada cut its key interest rate again at its next rate-setting announcement Jan. 20.

“[Mr. Poloz] didn’t signal an imminent rate cut, but didn’t rule one out either,” Bank of Montreal economist Benjamin Reutzes said in a research note.

TD Bank economist Brian DePratto said Mr. Poloz’s speech was generally “neutral” in tone. He said a “prolonged pause” in Canadian rates, until late 2017, is the most likely scenario, he said.

Trying to prop up the Canadian dollar would ultimately mean far more pain for Canadians and delay the adjustment to the reality of low commodity prices, Mr. Poloz pointed out.

“This is exactly why countries choose to have flexible exchange rates,” Mr. Poloz said .

Mr. Poloz did acknowledge that a cheaper currency is not a panacea, and that the full benefits for non-energy exporters could take some time. He said governments may need to use fiscal policy and more flexible labour regimes to bolster the positive effects of the weak dollar.

In Ottawa, the Liberal government has promised to boost infrastructure spending to help spur economic growth.

Speaking to reporters, Mr. Poloz called increased infrastructure an “important ingredient” for growing the economy.

Source: The Globe and Mail, The Canadian Press        

Latest U.S. Economic News

U.S. Jobs Surge in December in Boost to Economic Outlook
U.S. job growth surged in December and employment for the prior two months was revised sharply higher, suggesting that a recent manufacturing-led slowdown in economic growth would be temporary.

Non-farm payrolls increased by 292,000 last month, the Labor Department reported last Friday. The unemployment rate held steady at a 7-1/2-year low of 5% even as more people entered the labour force, a sign of confidence in the job market.

Payrolls for October and November were revised to show 50,000 more jobs created than previously reported, adding to the report’s upbeat tone. The only wrinkle was a one cent drop in average hourly earnings, but that was most likely because of calendar effects which should reverse in the January report.

The robust employment data should soothe fears about the economy’s health and suggests the recent weakness in activity is mostly limited to the manufacturing and export-oriented sectors, which have been hit by a strong dollar and anemic global demand. Efforts by businesses to whittle down an inventory glut and spending cuts by energy companies have also inflicted pain.

“It is one more sign the domestic economy continues to chug along,” said Kate Warne, investment strategist at Edward Jones in St. Louis, Missouri. “It is not a game changer in terms of faster economic growth, but it offsets some of the other indicators that recently have suggested the economy might be slowing down.”

In the wake of soft reports on manufacturing, construction spending and export growth, economists this week slashed their fourth-quarter growth estimates by as much a full percentage point to as low as a 0.4% annual rate. The U.S. economy grew at a 2% rate in the third quarter of last year.

Economists had expected payrolls to increase only 200,000 last month and the unemployment rate to be unchanged at 5%. The U.S. economy added 2.65 million jobs in 2015, compared to 3.1 million in 2014.

While labor market resilience would favour another interest rate hike from the Federal Reserve in March, economists say recent financial market turmoil and concerns among policy makers over low inflation suggest the U.S. central bank may stay on the sidelines a bit longer.

The Fed last month raised overnight interest rates by a quarter percentage point to between 0.25 and 0.50%, the first increase in nearly a decade, and a subsequent move at its next meeting this month was already seen as off the table.

Wage growth will come under scrutiny this year. Despite the drop in average hourly earnings in December, the year-on-year gain in earnings was 2.5% in December compared to 2.3% in November. That was mostly because wages were unusually weak in December 2014.

Wage growth is expected to accelerate by the middle of the year as the labour market settles into full employment.

Also being watched closely this year is the labour force participation rate, or the share of working-age Americans who are employed or at least looking for a job. While the rate increased one-tenth of a percentage point to 62.6% in December, it remains near four-decade lows.

There are concerns that persistently low participation could hamper job growth as the supply pool of workers shrinks, unless a pick-up in earnings entices more Americans to return to the labour force.

The employment-to-population ratio increased to 59.5%, the highest since May 2009, from 59.4% in November.

Employment gains in December were concentrated in the services sector, with mining shedding 8,000 jobs. Employment in the mining sector declined by 129,000 in 2015 and more losses are likely after the price of oil this week tumbled to an 11-year low.

Oilfield services provider Schlumberger last month announced another round of job cuts in addition to 20,000 layoffs already reported in 2015. The company said it expected the slowdown in drilling activity to continue this year.

Manufacturing added 8,000 jobs last month.  Unusually warm weather boosted construction payrolls, which increased by 45,000. There were also gains in the leisure and hospitality sector.

Retail payrolls rose only 4,300 as mild temperatures hurt sales of winter apparel. Temporary help increased 34,400 last month and government payrolls rose 17,000. The average workweek was unchanged at 34.5 hours.

Source: Reuters

Weak U.S. Wholesale Inventories Point to Slower Fourth-Quarter Growth
U.S. wholesale inventories fell more than expected in November amid a push by businesses to reduce a stockpile of unsold goods, the latest indication that economic growth moderated sharply in the fourth quarter.

The Commerce Department said last Friday that wholesale inventories dropped 0.3% as inventories of both durable and non-durable goods fell. October inventories were revised down to show a 0.3% decline instead of the previously reported 0.1% dip.

Inventories are a key component of GDP changes. The component of wholesale inventories that goes into the calculation of GDP – wholesale stocks excluding autos – dropped 0.4% in November.

The report added to weak data on construction spending, export growth and manufacturing that have suggested GDP growth braked sharply in the final three months of 2015.

Fourth-quarter GDP growth estimates, which currently range from as low as a 0.4% annual rate to as high as a 1.1% rate, are likely to be revised further down following the wholesale inventory report.

The U.S. economy grew at a 2.0% pace in the third quarter.

A record inventory accumulation in the first half of 2015, which outpaced demand, left businesses saddled with unsold merchandise and little incentive to order more goods. That has weighed heavily on manufacturing.

A report this week showed factory inventories fell in November for a fifth straight month. Inventories subtracted 0.71 percentage point from GDP growth in the third quarter.

Sales at wholesalers dropped 1.0% in November, the biggest decline since January 2015, after falling 0.2% in October.

At November’s sales pace it would take 1.32 months to clear shelves, up from 1.31 months in October. The high ratio suggests that the inventory liquidation at wholesalers could persist, continuing to put pressure on manufacturing.    

Source:  Reuters  


 Upcoming CHHMA Events 

Seminar: Decoding the Mysteries of Managing Millennials
Thursday, January 28, 2016
CHSI (Centre for Health & Safety Innovation), Mississauga, Ontario

Seminar: Wealth Management Solutions in a Low Interest Rate World
Wednesday, February 10, 2016
International Centre (Conference Facility), Mississauga, Ontario

Canada Night
Held in Conjunction with the International Home+Housewares Show
Sunday, March 6, 2016
InterContinental Hotel, Chicago, Illinois

CHHMA Spring Conference & AGM
Tuesday, April 12, 2016
International Centre (Conference Facility), Mississauga, Ontario

CHHMA Maple Leaf Night
Held in Conjunction with the National Hardware Show
Wednesday, May 4, 2016
The Mirage Hotel & Casino, Las Vegas, Nevada

CHHMA Quebec Golf Classic
Thursday, May 19, 2016
Club de golf Le Fontainebleau, Blainville, Quebec

CHHMA Ontario Golf Tournament
Tuesday, May 31, 2016
Angus Glen Golf Club, Markham, Ontario

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To register for all events visit our website at or call Pam Winter at (416) 282-0022 ext.21.


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