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CHHMA News


 

 

Volume 10, Issue 37, September 22, 2010   

CHHMA EYE ON OUR INDUSTRY

Inside this issue:

  • In Memoriam – Christof Vanooteghem
  • Stewardship Ontario 2011 Blue Box Fees
  • Economic News

 

In Memoriam – Christof Vanooteghem

 

The industry was saddened to learn of the loss of Christof Vanooteghem who passed away peacefully last Sunday, September 19th, at the age of 43. Christof was Vice President at LM2 Marketing and was managing the Ontario division of the company. Previous to LM2 Marketing, Christof worked at Imperial Manufacturing Group and UAP/NAPA. Christof leaves behind his wife Josie and children Juliana, Adrianna and Stefan. Christof will be missed by his many friends in the hardware and building material trade.

 

Viewing: Wednesday, September 22, 6-9 p.m.

Demarco Funeral Home

8003 Weston Rd.

Woodbridge, ON L4L 1A6

Funeral Mass: Thursday, September 23, 9:30 a.m.

St Margaret Mary Catholic Church

8500 Islington Ave.

Woodbridge, ON L4L 1X4

 

 

 

Stewardship Ontario 2011 Blue Box Fees

 

Last Thursday, September 16, Stewardship Ontario held a briefing/consultation on preliminary blue box steward fees for 2011. Some key highlights from the presentation were as follows:

 

- There are 4,380 registered Blue Box stewards

 

- Over 95% of Ontario households participate in the Blue Box program

 

- Recovery of Blue Box materials in 2009 was approximately 65%, exceeding the target of 60%

 

- Future expectations are high, 70% target

 

- Costs are trending up, performance trending down

 

- Draft fees are set by established/approved formula reflecting costs, recovery rates and expected steward fees

 

- 3-year rolling average is used for commodity revenues

 

- The 2008/09 recession created a “perfect storm” of negative drivers for steward fees: commodity prices down across the board; lower product sales, fewer tonnes to recycle, fewer tonnes against which to allocate costs; fuel costs, changing material mix and largely fixed costs offset any reduction from fewer tonnes; newspaper generation continues to decline.

 

- Material generation dropped in 2009 due to recession and impact of steward efforts to reduce product packaging

 

- Economic recovery suggests higher sales for some materials in 2010 versus 2009

 

- When translating costs into fees, there are some key decisions that need to be made: Are there unusual market conditions that need to be accounted for? What changes to the formula should be considered (aggregating/disaggregating of materials)? Are there major swings that may require special action to mitigate market impacts? Are funds required for market development?

 

Preliminary 2011 Fees (cents/kg) based on current formula:

 

Material

2010

2011

Change

CAN/OCNA Newsprint

0.17

0.28

65.8%

Other Newsprint

0.71

1.12

57.7%

Other Printed Material (magazines, catalogues)

1.97

2.48

25.9%

Cardboard & Boxboard

7.81

7.70

-1.4%

Other Paper Packaging

(gable top containers, aseptic containers, paper laminate)

19.65

23.75

20.9%

PET Bottles

12.98

13.78

6.2%

HDPE Bottles

12.49

13.27

6.2%

Other Plastics

24.65

28.16

14.2%

Steel

5.54

6.26

13.0%

Aluminum Food & Beverage

-2.20

0.52

123.6%

Other Aluminum Packaging

1.39

7.50

439.6%

Clear Glass

3.80

3.69

-2.9%

Coloured Glass

4.10

5.35

30.5%

To see further information on the presentation, click here. Comments on the program should be sent to Stewardship Ontario by September 30th at beyondthebox@stewardshipontario.ca.

 

 

Economic News

July Retail Sales Unexpectedly Fall

Statistics Canada reported earlier today that sales by Canadian retailers declined unexpectedly in July, with home furnishing stores seeing the biggest decline. Retail sales fell 0.1% to $35.9 billion. Economists had expected sales would rise by around 0.6% during the month, following a 0.1% increase in June.

 

Retailers reported lower sales in 5 of 11 sectors. The largest decrease among the sub-sectors was recorded at furniture and home furnishing stores, where sales fell 8.4% after climbing for the past year and a half. Sales at home furnishings stores were mainly responsible for this decline with a drop of 15%. Furniture store sales were down 4.5%. Sales also fell at electronics and appliances stores by 4.9%, completely offsetting a large gain the previous month. Sales in this subsector have been trending up since October 2009. Sales at building material and garden equipment supplies dealers decreased 2.3%, a fourth monthly decline. The largest sales increase was in general merchandise stores, with a 2.4% gain after 3 months of decreases. Sales at motor vehicles and parts grew 1%, led by new car dealers.

 

Excluding vehicle and auto-parts dealers, retail sales were down 0.4% to $28 billion, and in volume terms, they were down 0.2%.

 

July Wholesale Sales Also Fall Unexpectedly

Statistics Canada reported on Monday that wholesale sales edged down 0.1% in July to $43.9 billion, following a 0.3% decline in June. The sales decline was led by the vehicle and auto-part sector which dropped 3.2%. Excluding sales of vehicles and auto-parts, wholesale sales were up 0.6% in July. In volume terms, wholesale sales were down 0.3% in July.

 

The food, beverages and tobacco products subsector recorded the biggest increase in July, rising 2.3% based on the strength of the food products industry, which rose 2.7%. Sales in the building material and supplies subsector were down 0.6% from June but still stand 10.9% higher than a year ago. Sales in the home entertainment equipment and household appliances subsector were down 1.1% in July and 4.4% from a year ago. Sales in the home furnishings subsector were up 2.8% in July from June and are up 13.4% versus July 2009.

 

August Inflation Remains Tame

Inflation was softer than expected in August according to the latest consumer price index report released yesterday by Statistics Canada. The headline inflation rate was 1.7% in August, down 0.1% from July which saw a 0.8% spike due to the introduction of a new harmonized sales tax in three provinces. Meanwhile, the core rate, which strips out the volatile priced items such as food and energy, remained unchanged at 1.6% in the month and well below the Bank of Canada’s 2% target. This has analysts suggesting that the central bank might refrain from raising its benchmark rate again at its next meeting on October 19th.

 

Energy prices rose 5% year-over-year (pushed by a 7.7% hike in electricity rates), following a 7.9% increase during the 12 month period to July. Excluding energy, the headline inflation rate was 1.4% in August. Home purchases rose 5.5%, passenger vehicle insurance premiums were up 5.1% and food from restaurants, which was up 2.5%, also pushed the inflation rate higher. However, consumers paid 2.2% less for clothing and footwear in August than they did a year earlier. As well, home mortgage costs declined 3.8%, fresh vegetables dipped 4.2% and air travel costs fell 2%.

 

The HST is estimated to be adding about 0.7% to the annual inflation rate and even more in the affected provinces of B.C., Nova Scotia and Ontario – and will be exerting an influence for the next year.

 

Canadian Banks Revise Economic Forecasts Lower

Canada’s economy will slow sharply in the second half of 2010 after roaring out of the recession, according to the Toronto Dominion Bank. TD economists say the Canadian economy has been on a good run since last fall, with an average growth rate of 4.3%. But the fast pace has ended and the current third quarter will produce a weaker 1.5% advance. Growth in the fourth quarter won’t be much better at 2%. This year’s second half estimates are also at wide variance with the Bank of Canada’s last estimates of 2.8% and 3.2% for the final two quarters, although Governor Mark Carney has recently admitted he will downgrade these projections next month. The TD has also shaved a half point off next year’s growth forecast, saying the Canadian economy will only grow by 2% in 2011, almost a full point below the Bank of Canada’s prediction. TD economists cite four major reasons for the dampened expectations: the weaker than expected U.S. recovery; the cooling housing market; tapped out consumers; and the winding down of both government fiscal stimulus and the central bank’s monetary policy.

 

Meanwhile, the Royal Bank of Canada has downgraded its latest forecast for the Canadian economy this year and next, blaming concerns about the United States and “nervousness” about the global economy. Canadian GDP will grow 3.3% this year and 3.2% next year, down from the 3.6% and 3.5% growth rates it had expected just three months ago. RBC chief economist Craig Wright said the recovery remains firmly on track. GDP has returned to pre-recession levels and 94% of the jobs have been replaced, he said. The bank also cut its forecast for the U.S. economy to 2.7% this year and 3% in 2011. That’s down from estimates of 3.1% and 3.4% respectively.

 

 

 

 

Upcoming Events For
2010

Memorial Golf Classic

 

Tuesday, September 28
Wooden Sticks G.C.,
Uxbridge, Ontario

Industry Cocktail

 

Tuesday, November 30
Montreal Casino,
Montreal, QC


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


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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. 34. CHHMA is located at 1335 Morningside Ave., Suite 101,
Scarborough, ON, M1B 5M4

 

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