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CHHMA NEWS

CHHMA - EYE ON OUR INDUSTRY
Volume 17, Issue 27, July 12, 2017

Inside This Issue:

• Last Call for this Year’s CHHMA Scholarship Program Applications
• Plan to Attend Seminar on September 20: Critical Strategies for Winning in E-commerce and Real Time Retail
• Retailers Miscalculating GST/HST When Taking Early Payment Discounts
• Amazon Prime Day Breaks Record; Event Grew by More than 60%
• Sears Canada Seeks Court Approval for Restructuring; To Suspend Some Payments
• Sears Holdings to Close 43 More U.S. Stores to Cut Costs
• Home Depot Agrees to Purchase Compact Power Equipment
• Bank of Canada Raises Interest Rates for First Time in 7 Years
• Housing Starts Pick Up in June
• Canada Adds More than 45,000 Jobs in June as Unemployment Rate Drops to 6.5%
• Building Permits Up 8.9% in May Led by Residential Building Intentions in Ontario
• Canadian Dollar to Stop its Climb by Autumn if Rates, Oil Prices Weaken: Poll
• Greater Toronto Area Home Sales Plunge 37.3% in June Despite a Jump in Listings
• Montreal’s Hot Condo Market Drives 10% Rise in Home Sales in June
• Latest U.S. Economic News

Note: There will be no CHHMA Newsletter next week.  Eye On Our Industry will return on July 26.


Association News

Last Call for this Year’s CHHMA Scholarship Program Applications

We would like to remind members that the deadline for applications for the CHHMA Scholarship Program is the end of this week (by Monday, July 17 is OK).

The CHHMA is once again pleased to be able to offer the opportunity for children of employees of our member companies to apply for a scholarship to help offset the cost of post-secondary education.

The Association recognizes the importance of education and therefore encourages children of our member companies to attend University or College. Successful candidates receive $1,000 CDN per year for the first two years of study leading to a diploma or degree from an accredited community college or university.

The scholarship program is available to the dependents of any current full-time employees of the CHHMA or member companies. The program is only offered to Canadian companies or divisions of companies based in Canada which are members of the CHHMA.  Read More >>



Plan to Attend Seminar on September 20: Critical Strategies for Winning in E-commerce and Real Time Retail  

The global retail landscape is changing quickly and in order to prepare for this new future, it is critical to understand the drivers of change leading to this new environment and the key strategic initiatives retailers & brands will need to undertake in order to win. Many of these shifts are leading to heightened operational complexity, with new requirements for future success.

The CHHMA is pleased to offer our members an opportunity to attend a joint-seminar with COPA on Wednesday, September 20 from 1:00 p.m. to 3:00 p.m. at the Centre for Health & Safety Innovation (CHSI), 5110 Creekbank Rd, Mississauga, ON L4W 0A1.

The seminar will be presented by Hannah Donoghue of RetailNet Group (RNG) who will detail the company’s forecasts and future view on the retail landscape, addressing three critical topics ....  Read More >>



Industry News

Retailers Miscalculating GST/HST When Taking Early Payment Discounts


It has come to the attention of the CHHMA that some retailers are applying early-payment discounts incorrectly on invoices from vendors.

In accordance with the Canada Revenue Agency (CRA)’s RC4022 General Information for GST/HST Registrants guidelines, page 17, see the below copy or the following link: http://www.cra-arc.gc.ca/E/pub/gp/rc4022/rc4022-e.html#H3_306 on how early-payment discounts should be handled:

Early-payment discounts

If you offer an early-payment discount on credit sales, charge the GST/HST on the full invoice amount even if your customer takes the discount.

Example
You operate a business in Manitoba. You issue an invoice that shows the price of goods as $100, plus the GST. The credit terms of the invoice give the customer a 2% discount if the customer pays within 10 days. Your customer pays within 10 days. You calculate the amount owed as follows:

Purchase price:            $100
Plus GST ($100 × 5%):      5
Less the discount:           (2)
Customer pays:           $103

Therefore, the GST/HST amount should not be included in the calculation of the early payment discount itself. The 2% discount is applied to $100 not $105 in the above example.

If you would like a copy of the full RC4022 document, see the below links for PDF or HTML versions:

http://www.cra-arc.gc.ca/E/pub/gp/rc4022/rc4022-17e.pdf

http://www.cra-arc.gc.ca/E/pub/gp/rc4022/rc4022-e.html

For further information on the handling of GST/HST, you can also contact CRA’s GST/HST Technical Services office at 1-800-959-8287.

Source: Canada Revenue Agency



Amazon Prime Day Breaks Record; Event Grew by More than 60%

Amazon’s third annual Prime Day ended with a bang. On Wednesday morning, Amazon announced its Prime Day sales this year surpassed Black Friday and Cyber  Monday altogether, with the event growing by more than 60% from 2016.

Prime members' most popular purchase on Prime Day was the Echo Dot, Amazon said, and "tens of millions of Prime members" rung up purchases over the 30-hour period, more than 50% higher than a year ago.

Amazon's stock jumped $9 higher Wednesday morning following the announcement, breaking the $1,000 mark.

Amazon said Prime Day this year was the biggest sales event ever for Amazon devices in the U.S. and around the world, with the event bringing in record sales for the Echo, Fire tablets and Kindle devices.  Read More >> 



Sears Canada Seeks Court Approval for Restructuring; To Suspend Some Payments

Sears Canada will go to court this Thursday to seek approval to suspend benefits for its retired employees as well as special payments to its defined benefit pension plan, three weeks after the Canadian retailer filed for creditor protection.

The ailing retailer says it will also ask the Ontario Superior Court on July 13 to extend court protection from creditors to Oct. 4, giving it time to seek out potential investors and buyers and consult with its landlords, employees, suppliers and creditors. Sears Canada had indicated in its initial court filings on June 22 that it planned to suspend life insurance, health and dental benefits to certain employees during the restructuring.

Meanwhile, two groups of major U.S. shareholders in Sears Canada have hired legal counsel to explore possible deals with the struggling retailer as it undergoes the court-supervised restructuring. ESL Partners LP and entities affiliated with its principal shareholder, Edward S. Lampert, announced Monday that it is working with Fairholme Capital Management on potential proposals to make to Sears Canada.  Read More >>    



Sears Holdings to Close 43 More U.S. Stores to Cut Costs

Sears Holdings Corp. is closing eight of its namesake department stores and 35 Kmart locations as part of its effort to cut costs and square footage to return to profitability, Chief Executive Officer Eddie Lampert said last Friday.

The store closings are in addition to 150 that the company announced in January. Once the largest U.S. retailer, Sears has struggled with years of losses and declining sales as shoppers shift online. The company said in February it would cut costs this year by at least $1-billion.

Sears expects to open more smaller-format stores while shrinking its large, less-competitive ones, Lampert wrote in a blog post.

“We reached the point in the past 12 months where some of our vendors have reduced their support, thereby placing additional pressure on our business,” Lampert said.  Read More >>



Home Depot Agrees to Purchase Compact Power Equipment

Home Depot bulked up its tool rental offerings with the acquisition of Compact Power Equipment. The company chain said last Thursday that it would pay $265 million for the equipment rental and maintenance services company.

The deal bolsters Home Depot's position in the market for equipment rental to both professional and do-it-yourself customers. Compact Power Equipment has had ties to Home Depot since 2009 and currently rents equipment through more than 1,000 locations across the U.S. and Canada.  The company also maintains equipment for many customers, including Home Depot.  Read More >>   



Economic News

Bank of Canada Raises Interest Rates for First Time in 7 Years

The Bank of Canada is hiking its key interest rate for the first time in seven years, joining the U.S. Federal Reserve in starting the process of undoing nearly a decade of easy money. The bank raised its overnight lending rate to 0.75% from 0.5% Wednesday, citing “bolstered” confidence that the Canadian economy has finally turned the corner after years of sputtering growth.

“Growth is broadening across industries and regions and therefore becoming more sustainable,” the bank said in a statement.

Meanwhile, the bank dismissed the recent fall in inflation as mainly temporary, dragged down by lower gasoline prices, electricity rebates in Ontario, intense food price competition and unexpectedly weak car prices.

Bank of Canada Governor Stephen Poloz and his central bank colleagues aren’t yet ready to pull the trigger on a second rate hike this year. The bank insisted that any future rate hikes would be guided by the effect of “incoming data” on inflation, according to the statement.

In addition, the bank’s latest projection of where the economy is headed is little changed from its April forecast. It now expects the economy to grow 2.7% this year, compared to its earlier estimate of 2.5%. But its forecast for GDP growth in 2018 and 2019 remains virtually unchanged.  Read More >>



Housing Starts Pick Up in June

Canada Mortgage and Housing Corporation (CMHC) said the annual pace of housing starts in Canada picked up in June. The agency reported on Tuesday that the seasonally adjusted annual rate (SAAR) of housing starts in June came in at 212,695 units, up 9.1% from 194,955 units in May. Economists had expected the annual rate to come in at 200,000, according to Thomson Reuters.

The overall increase came as the pace of urban starts increased by 9.6% to 194,773 units. Multi-unit urban starts increased by 9.4% to 127,944, while single-detached urban starts increased by 10.1% to 66,829.  Read More >>   



Canada Adds More than 45,000 Jobs in June as Unemployment Rate Drops to 6.5%

Canada’s unemployment rate is down to 6.5% after the economy churned out a better-than-expected 45,000 jobs in June Statistics Canada reported last Friday.

A consensus of economists had expected an increase of 10,000 jobs in June and for the unemployment rate to stay at 6.6%, according to Thomson Reuters. Most of those gains, however, were in part-time positions.

Still, over the course of 12 months, Canada has created 351,000 jobs (+1.9%), most of them full-time. And notably, employment gains in the second quarter, of 103,000, mark the strongest quarterly showing since 2010.  Read More >>   



Building Permits Up 8.9% in May Led by Residential Building Intentions in Ontario

The value of Canadian building permits issued in May jumped 8.9% from April on plans for more construction of residential buildings, particularly in the red-hot market of Ontario, Statistics Canada reported last Thursday. The amount of $7.7 billion was the third highest value on record.

Analysts in a Reuters poll had expected a 2.6% increase. Statscan also revised April's data to show a 0.5% advance, compared with an initially reported fall of 0.2%.

The value of residential building permits issued by Canadian municipalities increased 10.8% from April to $5.0 billion in May. Six provinces registered gains in the month, with Ontario reporting the largest increase, followed distantly by Alberta and British Columbia.  Read More >> 



Canadian Dollar to Stop its Climb by Autumn if Rates, Oil Prices Weaken: Poll

The Canadian dollar is expected to weaken over the coming months, a Reuters poll of 47 foreign exchange strategists showed last Thursday, as a rally driven by expectations for higher interest rates runs out of steam and lower oil prices weigh.

The median forecast is for the currency to retreat in three months to C$1.32 to the U.S. dollar, or US76¢, before recovering some ground to C$1.31 in about a year. It was trading last Wednesday at C$1.2960, nearly its strongest in 10 months.

The loonie has soared more than 6% since early May, boosted by a strengthening domestic economy and rising expectations the Bank of Canada will hike interest rates this week.  Read More >>


 
Greater Toronto Area Home Sales Plunge 37.3% in June Despite a Jump in Listings

The average price of a home sold in the Greater Toronto Area was $793,915 in June, an 8% decline from a month earlier, according to data released last Thursday from the Toronto Real Estate Board (TREB).

On a year over year basis, June average prices were still up 6.3% from a year ago. Using the board MLS HPI Composite Index prices were 25.3% on a year over year basis despite a 1.3% decline between May and June. The index showed that condos, however, still rose 1% in price.

“We are in a period of flux that often follows major government policy announcements pointed at the housing market,” said Tim Syrianos, president of the board in a statement, referencing the province’s 16-point housing plan to cool the market in the Greater Golden Horseshoe (GGH). Among key measures were a 15% non-resident speculation tax for the GGH and a rent control for the entire province.

Syrianos said survey results commissioned by the board show many households are very interested in purchasing a home in the near future but some are sitting on the sidelines waiting to see the real impact of the Ontario Fair Housing Plan.  Read More >>  



Montreal’s Hot Condo Market Drives 10% Rise in Home Sales in June

The Greater Montreal Real Estate Board says area home sales increased by 10% in June, driven by a hot condo market. There were 3,952 properties sold last month, the highest level for June in eight years.

The data comes amid concerns that a 15% foreign buyers’ tax in the Greater Toronto Area could have a spillover effect on Canada’s second-largest city.

Quebec’s finance minister has said he has no plans in the near term to introduce such a tax since foreigners accounted for only about 1.5% of all Montreal-area sales in the first nine months of 2016, according to the Canada Mortgage Housing Corp. Housing sales in June were aided by a 17% increase in sales on the Island of Montreal. Read More >>  



Latest U.S. Economic News

U.S. consumers expect to boost spending in the months ahead and voiced confidence they are more likely to find a job and less likely to lose one in a strong labour market, the New York Federal Reserve reported Monday in its latest monthly survey of consumer expectations.

U.S. job growth surged more than expected in June and employers increased hours for workers, signs of labour market strength that could keep the Federal Reserve on course for a third interest rate increase this year despite benign inflation. Nonfarm payrolls jumped by 222,000 jobs last month, the Labor Department reported last Friday, beating economists’ expectations for a 179,000 gain. Data for April and May was revised show 47,000 jobs created than previously reported.  Read More >>                       
 
  

 Upcoming CHHMA Events 

CHHMA/COPA Seminar: Critical Strategies for Winning in E-commerce and Real Time Retail
Presenter: Hannah Douglas, RetailNet Group (RNG)
Wednesday, September 20, 2017
Centre for Health & Safety Innovation (CHSI), Mississauga, Ontario

CHHMA Industry Memorial Golf Classic

Wednesday, October 4, 2017
Blue Springs Golf Club, Acton, Ontario


CHHMA Industry Calendar

To register for all events visit our website at www.chhma.ca or call Pam Winter at (416) 282-0022 ext. 121.


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"Eye On Our Industry" is published by the CHHMA as an information resource for our members. Member input regarding content and format is welcomed. Please contact Michael Jorgenson by email: mjorgenson@chhma.ca, or call at (416) 282-0022, ext. 134. CHHMA is located at 1335 Morningside Ave., Suite 101, Scarborough, ON, M1B 5M4 www.chhma.ca

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Canadian Hardware & Housewares Manufacturers Association | 1335 Morningside Ave., Suite 101, Scarborough, ON M1B 5M4
Telephone: (416) 282-0022   Email: pwinter@chhma.ca