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CHHMA NEWS


 
   
 

     Volume 11, Issue 20, June 01, 2011

                         
                               
                                     Government & Legislative News

  Get Up to Date on the New Canadian Consumer Product Safety Act 

As previously advised, Health Canada is conducting a number of free half-day information sessions across the country between May 25 and June 16 on the new Canada Consumer Product Safety Act (CCPSA), which is coming into force on June 20, 2011. Click here for further info. 

A number of these sessions are already full. However, you can send an email to CPS-SPC@hc-sc.gc.ca in order to be added to a waiting list for future Health Canada information sessions. Health Canada is also planning webinars for those who are unable to attend the current information sessions. Click here to subscribe for email updates on the Canada Consumer Product Safety Act and on future information sessions.

Here are some other helpful links regarding this new legislation:

Frequently Asked Questions on the Canada Consumer Product Safety Act

Canada Consumer Product Safety Act Quick Reference Guide

The CHHMA continues to work through the Canadian Consumer Product Safety Coalition with Health Canada on clarifying some of the fine points of the new regulations and procedures surrounding this new legislation, particularly in regards to incident reporting. Look for further updates in future CHHMA newsletters and Government Watch reports. 
  

                             Industry News


Target Identifies First Wave of Canadian Store Locations 
On May 26, Target Corp. named the first 105 Zellers locations it hopes to convert to Target stores after the company secures the necessary construction approval for the extensive renovations required. The sites are located in all ten provinces and the retailer’s goal is to open as many Target stores as possible, with the first wave of openings happening in early 2013.

Target plans to spend up to $10 million renovating each location, which requires closing the stores six to nine months ahead of the opening. Each store needs 150 to 200 employees and the company will engage Zellers associates to make it easy for them to apply for jobs at Target.

“We are thrilled to share these first details about our planned entry into Canada,” said Tony Fisher, president, Target Canada. “We are excited that these initial store sites ensure Target will be represented throughout the country. We look forward to completing our selection process during the next several months, moving us one step closer to delivering the Target brand shopping experience to our Canadian guests.”

The initial selected sites by province:

British Columbia (15): Abbotsford Power Centre, Abbotsford; Metropolis at Metrotown, Burnaby; Discovery Harbour Shopping Centre, Campbell River; Cottonwood Mall, Chilliwack; Coquitlam Centre, Coquitlam; Driftwood Mall, Courtenay; Tamarack Mall, Cranbrook; Scottsdale Mall, Delta; Willowbrook Shopping Centre, Langley; Haney Place Mall, Maple Ridge; Nanaimo North Town Centre, Nanaimo; Pine Centre, Prince George; Oakridge Shopping Centre, Vancouver; Village Green Mall, Vernon; Tillicum Mall, Victoria

Alberta (13): Chinook Centre, Calgary; Forest Lawn Shopping Centre, Calgary; Market Mall, Calgary; Shoppes at Shawnessy, Calgary; Signal Hill Centre, Calgary; Sunridge Mall, Calgary; Bonnie Doon, Edmonton; Kingsway Garden Mall, Edmonton; Mill Woods Town Centre, Edmonton; Prairie Mall, Grande Prairie; Bower Place, Red Deer; St. Albert Centre, St. Albert; Sherwood Park Mall, Sherwood Park

Saskatchewan (2): Northgate Mall, Regina; The Centre, Saskatoon

Manitoba (5): Shoppers Mall, Brandon; Grant Park, Winnipeg; Kildonan Place Shopping Centre, Winnipeg; Polo Park Shopping Centre, Winnipeg; Southdale Centre, Winnipeg

Ontario (45): Durham Centre, Ajax; Aurora Shopping Centre, Aurora; Bramalea City Centre, Brampton; Shoppers World Brampton, Brampton; Trinity Common, Brampton; Burlington Mall, Burlington; Millcroft Centre, Burlington; Cambridge Centre, Cambridge; Woodbine Centre, Etobicoke; Gates of Fergus, Fergus; 175 Stone Road W., Guelph; Centre Mall, Hamilton; South Hamilton Square, Hamilton; Hazeldean Mall, Kanata; Cataraqui Town Centre, Kingston; Lindsay Square Mall, Lindsay; Masonville Place, London; Westmount Shopping Centre, London; Milton Mall Shopping Centre, Milton;Erin Mills Town Centre, Mississauga; Square One, Mississauga; Meadowlands Shopping Centre, Nepean; Upper Canada Mall, Newmarket; 1899 Algonquin Ave., North Bay; Centerpoint Mall, North York; Orillia Square Mall, Orillia; Place D,Orleans, Orleans; Five Points Mall, Oshawa; Bayshore Shopping Centre, Ottawa; Billings Bridge Plaza, Ottawa; RioCan St. Laurent, Ottawa; Hillcrest Mall, Richmond Hill; Bridlewood Mall, Scarborough; County Fair Mall, Smiths Falls; Niagara Pen Centre, St. Catharines; Stratford Mall, Stratford; Sudbury Supermall, Sudbury; Intercity Shopping Centre, Thunder Bay; Cloverdale Mall, Toronto; Shoppers World Danforth, Toronto; East York Town Centre, Toronto; Flamborough Power Centre, Waterdown; Conestoga Mall, Waterloo; Taunton Gardens Power Centre, Whitby; Devonshire Mall, Windsor

Quebec (19): Galeries d,Anjou, Anjou; Faubourg Boisbriand, Boisbriand; Carrefour Angrignon, Lasalle; Mega Centre Notre-Dame, Laval; Galeries Chagnon , Levis; Place Longueuil, Longueuil; Place Alexis Nihon, Montreal; Place Vertu, Montreal; Terrarium Shopping Centre, Pointe Claire; Les Galeries De La Capitale, Quebec City; Place Fleur De Lys, Quebec City;Place Laurier, Quebec; Le Carrefour Rimouski, Rimouski; Promenades Saint-Bruno, Saint-Bruno-de-Montarville; Carrefour Saint-Georges, Saint-Georges; Carrefour Richelieu, Saint- Jean sur-Richelieu; Carrefour du Nord, Saint Jerome; Carrefour de L’Estrie, Sherbrooke; Les Rivieres Shopping Centre, Trois Rivieres

New Brunswick (1): McAllister Place, Saint John

Nova Scotia (2): Bedford Place, Bedford; Mic Mac Mall, Dartmouth

Newfoundland and Labrador (2): Corner Brook; Cabot Square, St. John’s

Prince Edward Island (1): Charlottetown Mall, Charlottetown

In September, Target will announce a second wave of store sites, Mr. Fisher said.

Target also announced that, pending approval by its Board of Directors next month, it has selected the location of its Canadian headquarters in an 180,000 square foot building at 5570 Explorer Dr. in Mississauga, Ontario. After some work to the facility, the majority of Target’s Canadian headquarter team should begin occupying the space in early 2012.
  
Hudson’s Bay Co. Considering IPO
According to the Globe & Mail, Hudson’s Bay Co. is considering going public again. Representatives of U.S. owner Richard Baker began talking to Canadian bankers about an initial public offering of 20% of the parent company which includes the Bay, Home Outfitters and U.S. department store chain Lord & Taylors. Mr. Baker is looking at taking HBC public on the TSE with the possibility of a U.S. listing as well. The IPO, which would likely take place in the fall, would attempt to raise about $500 million industry observers have suggested.

The Bay has begun to see signs of a turnaround recently under a new strategy of stocking hipper fashions and home goods at a range of prices, many of them higher than previous ones, to draw a younger and more style-conscious customer. The Bay saw sales rise 4% last year at stores open more than a year, its first increase in a decade.

However, HBC still has a lot of work to do as it continues to revamp its 92 Bay stores and will feel the pressure of Target and other foreign retailers possibly entering the Canadian marketplace in the next few years.

The move to sell off its Zellers stores is likely to be seen as a positive move with potential investors. 
   


2012 International Home+Housewares Show Adds Half Day on Saturday  
The International Housewares Association (IHA) recently announced that the 2012 International Home+Housewares Show will add an extra half day on Saturday, from 12:30 p.m. to 5:30 p.m. IHA’s Board of Directors approved the additional time in response to “ever-intensifying requests from multiple show stakeholders.” Mindful of increasing costs to exhibitors, the Board also approved a freeze on booth fee costs at 2011 rates.

“This additional show time will allow exhibitors to schedule ample time for appointments with key retailer partners in a more relaxed and unhurried atmosphere,” said Phil Brandl, IHA president. “It will offer all buyer attendees additional time to seek out new suppliers partners while also giving time for meetings with current suppliers.”

In the past, many retailers have been scheduling meetings on Saturday before the show with key suppliers but expressed a preference to hold these meetings in suppliers’ show booths.

Along with buyer attendees, manufacturers’ representatives and news media attendees will be allowed on the exhibit floor on Saturday. Trade guests, however, will not be allowed on the show floor that day.

The 2012 International Home+Housewares Show will be held at McCormick Place in Chicago on the following hours:

Saturday, March 10 12:30 p.m. – 5:30 p.m.
Sunday, March 11 8:30 a.m. – 5:30 p.m.
Monday, March 12 8:30 a.m. – 5:30 p.m.
Tuesday, March 13 8:30 a.m. – 5:00 p.m.

For more information, visit http://www.housewares.org.   


Home Depot Canada Management Changes 
Correction: CHHMA News would like to clarify that the content on the reorganization of the category teams at The Home Depot Canada that appeared in the May 19, 2011 “Eye On Our Industry” newsletter (“Home Depot Sales Lower in First Quarter” article) should have been attributed to “Hardlines” (May 16, 2011 edition) as the source for this information.
                               
                          Association News

CHHMA Night at the Races - June 15th 
The 15th Annual CHHMA Night at the Races is set for Wednesday, June 15th at the Woodbine Racetrack in Toronto. This year’s event will be held in the Favourites Dining Room, which offers a great view of the track and an excellent buffet dinner. The traditional CHHMA betting challenge presents the chance to win some prizes too.

The event is an ideal opportunity to invite some customers or bring a group of your colleagues (spouses etc. are welcome too) out for an evening of fun and camaraderie.

So click here to register while spots are still available. 
         

                                      
CHHMA Golf Tournament Recaps
The 36th Annual CHHMA Quebec Golf Classic took place on Tuesday, May 17, at the Club de golf Le Fontainebleau in Blainville, Quebec. Although, the weather was a bit cool, the rain held off and over 140 CHHMA members, industry colleagues and customers enjoyed a fun day on this first rate course followed by an evening of dinner and prizes. Big thanks go out to all the sponsors and the Quebec committee for their work in organizing this event.


Click here to view further photos from the day. 

Meanwhile, the 42nd Annual CHHMA Ontario Golf Tournament teed off last Wednesday, May 25 at the Angus Glen Golf Club in Markham, Ontario. The weather was nice as 200 plus CHHMA members and invited customers spent an enjoyable day on the links followed by an excellent lunch and prize presentations. Money raised from the tournament went towards the Ontario Special Olympics and we thank everyone who purchased event passports and to all the companies that sponsored hole contests and provided product giveaways.


Click here to see a full recap of all the winners plus further photos.  

If you would like to receive a high resolution version of any of the photos from these two events, please email: mjorgenson@chhma.ca.                               


                                       
Economic News


  Bank of Canada Holds Rate, For Now  


The Bank of Canada kept its benchmark interest rate unchanged at 1% yesterday but for the first time since the downturn, said it would eventually have to lift borrowing costs if economic growth continues.

“To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be eventually withdrawn, consistent with achieving the 2 per cent inflation target,” the central bank said. “Such reduction would need to be carefully considered.”

In its release on Tuesday, the Bank indicated that the global economic recovery is proceeding broadly as expected, that the U.S. economy continues to grow at a modest pace and that growth in Europe is maintaining momentum although risks related to peripheral economies have increased. It further added that the disasters that struck Japan in March are severely affecting its economy and have caused temporary supply chain disruptions in advanced economies. Although commodity prices have declined recently, the bank expects prices to remain at elevated levels, supported by tight global supply and very strong demand from emerging markets.

In Canada, the central bank also sees the economy proceeding largely as expected. The economy grew at an annual rate of 3.9% in the first quarter, reflecting continued strong business investment, smaller contributions from household and government spending, and a modest drag from net exports. Although temporary supply chain disruptions are expected to restrain growth sharply in the current quarter, this is expected to be unwound in subsequent quarters, and growth should continue in the 2% to 3% range.

While underlying inflation is relatively subdued, the Bank expects that high energy prices and changes in provincial indirect taxes will keep total CPI inflation above 3% in the short term. “Total CPI inflation is expected to converge with core inflation at 2 per cent by the middle of 2012 as excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers and inflation expectations remain well-anchored,” it noted.

The Bank also said it sees the possibility of higher household borrowing and spending in Canada as upward risks to inflation, although in the first quarter, consumers restrained from spending. On the other hand, the persistent strength of the Canadian dollar could place downward pressure on inflation through weaker-than-expected net exports and larger declines in import prices.

There is no consensus among economists on when the Bank of Canada will resume increasing rates but July has recently been ruled out by most as a possibility. Three of Canada’s largest banks have pushed back their rate hike expectations to September from July over the past two weeks.

The next scheduled date for the Bank of Canada to announce its decision on its key overnight rate is July 19, 2011.
  



  Housing Starts To Slow in 2011 

According to Canada Mortgage and Housing Corp. (CMHC)’s Second Quarter Housing Market Outlook released on Monday, the pace of housing construction is expected to slow in 2011, with housing starts this year to be down from last year’s level.

The government agency sees housing starts moving back in line with demographic fundamentals in 2011 and 2012, after peaking in the second quarter of 2010. Since then, starts have steadily slowed including in the first quarter of 2011. Housing starts are now forecast to be in the range of 166,600 to 192,200 units in 2011 (point forecast of 179,500 units), down from 189,930 units in 2010. In 2012, housing starts are expected to increase based on stronger employment and net migration and are forecasted in the range of 163,200 to 207,500 units (point forecast of 185,300 units).

Housing starts are forecast to be down in all areas of Canada in 2011, although B.C. and Ontario will experience very modest declines. In 2012, housing starts are expected to increase “markedly” in B.C. and Alberta, while Manitoba, Ontario and Saskatchewan will experience modest growth.

“Modest economic growth, in conjunction with relatively low mortgage rates, will continue to support demand for new homes in 2011 and 2012. Nonetheless, we are expecting new and existing housing markets to fall in line with demographic fundamentals, as changes to mortgage rules take hold,” said Bob Dugan, chief economist for CMHC.

Meanwhile, after moderating in the first half of 2010, sales of existing homes through the Multiple Listing Service (MLS) have rebounded and made further gains in the first quarter of 2011. CMHC sees existing home sales increasing moderately in 2011 and 2012. MLS sales are forecasted to be in the range of 429,500 to 480,000 units in 2011 (point forecast of 452,100 units). In 2012, MLS sales are expected to increase to a range of 410,000 to 511,900 units (point forecast of 461,300 units). However, since new listings have not kept pace with existing home sales, the resale market has moved from balanced to sellers’ market conditions. As a result, the average MLS price increased in the first quarter of 2011 to $365,648 from $342,441 in the fourth quarter of 2010.

Although the increase in the average MLS price in the first quarter was stronger than expected, the average MLS price is expected to moderate throughout the remainder of the year. For 2011, the average MLS price is forecast to be $361,100 while 2012 will see a modest increase to $364,200. The recent increase in the average MLS price has also reflected strong sales in Vancouver’s property resale market.

Single-detached housing starts peaked in the first quarter of 2010 and have moderated progressively since then. Single starts are expected to reach 82,700 units in 2011, down from 92,554 units in 2010. For 2012, single starts will increase to 86, 800 units. Single starts are expected to decrease in all provinces in 2011. The outlook is more positive for 2012 with only PEI, Newfoundland & Labrador and New Brunswick experiencing declines in single starts.

Multi-family housing starts (row, semi-detached and apartment units) are expected to edge down in 2011, following some strong growth from mid-2009 to mid-2010. The projection is for 96,800 multiple-family starts in 2011 and 98,500 units in 2012. Most provinces will see a decrease in 2011, the exceptions being Ontario and B.C. which should see solid gains. In 2012, multiple starts will also increase in Alberta and Manitoba. 



  Canadian Economy Grows at 4% Pace in First Quarter 

The Canadian economy grew at the fastest pace in a year in the first quarter as increases in manufacturing and business investment offset flat consumer spending. However, economists expect growth will soften in the second quarter closer to 2%.

Statistics Canada reported on Monday that Canada’s real GDP expanded 1% or 3.9% annualized in the first quarter, up from 3.1% in the fourth quarter of 2010 (the fourth quarter was revised down from an originally reported 3.3%). By comparison, U.S. growth was 1.8% in the first quarter. On a monthly basis, the Canadian economy grew 0.3% in March led by factory growth, following a 0.1% contraction in February.

Wide-spread gains fuelled the growth in the first quarter, led by the goods-producing side of the economy which grew 1.8% while the services side increased 0.7%. All major industrial sectors, except for retail trade and arts, entertainment & recreation, increased their output in the first quarter. Construction, transportation and wholesale trade were particularly strong, while consumer spending was virtually unchanged in the first quarter, after increasing 1.1% the previous quarter. Business investment rose 3.2%, the fifth straight quarterly increase, suggesting companies are taking advantage of the strong Canadian dollar by investing in productivity-enhancing machinery and equipment. Machinery and equipment investment rose 3.7%. Investment in housing rose 2.2% in the quarter. Renovation activity increased 3.3% after three consecutive quarters of decline. Spending on furniture, furnishings and household equipment and maintenance declined 0.6%, the third decline in four quarters.

Exports were a slight drag on growth during the first quarter as import growth (+2.2%) outpaced that of exports (+1.6%).

The overall goods trade surplus widened by $1.3 billion (CDN) from the previous quarter, and the goods surplus with the U.S. rose to its highest level since the third quarter of 2008 as the U.S. bought record volumes of Canadian oil. 
    

  Retail Sales Flat in March 

Retail sales held steady at $37.3 billion in March from February but fell 0.8% in volume terms according to Statistics Canada data released May 20.
 
Only four of 11 sectors had higher sales, the largest dollar increase being recorded at gasoline stations (+1.4%) where prices were higher for the eighth month out of the past nine. Since March 2009, the consumer price index for gasoline has risen by nearly 40%. After three consecutive monthly declines, sales at motor vehicle and parts dealers were up 0.3% on the strength of new car sales. Excluding the auto sector, retail trade declined 0.1% in March.

Higher prices contributed to a 0.8% rise in sales at general merchandise stores in March from February (+2.5% vs March 2010). Sales at electronic and appliance stores increased 2.1% month over month and were +2.7% from a year ago. Sales at this store type have yet to return to pre-recession levels. Furniture and home furnishings stores registered the largest decline in March, falling 2.2% and are down 2.6% from March of last year. This reflects a 4.4% decrease at furniture stores, where sales have been trending down since early 2010. Building material and garden equipment and supplies dealers’ sales were down 0.8% from February and down 10.1% from March 2010. Sales at food and beverage stores edged down 0.1%, largely as a result of lower sales at beer, wine and liquor stores (-1.6%). Sales at supermarkets and grocery stores rose 0.3%, reflecting rising food prices.



  April Inflation Rate Holds at 3.3%
 
High gasoline prices kept Canada’s inflation rate in April above the Bank of Canada’s target level for a second straight month. Statistics Canada reported on May 20 that its consumer price index rose 3.3% in April, matching the increase in March. On a seasonally adjusted monthly basis, consumer prices rose 0.3% in April, down from March’s 1.1% increase.

Gasoline prices jumped 6.4% in April and were 26.4% higher than a year ago, bringing them within 5% of their record high. Overall, energy prices were 17.1% higher in April than a year ago, with fuel oil rising 32.4% and electricity 7%. Conversely, the price of natural gas was 4.8% lower than in April of last year. Bank of Canada governor Mark Carney said in a speech on May 16, that volatility in energy prices would likely keep the annual inflation rate above the central bank’s 1%-3% range for a few months. But he also remarked that he believed prices would soon begin to moderate. The core index, which excludes volatile items such as gas and fresh vegetables, actually edged down one-tenth of a point to 1.6%, right within the bank’s target range.

Prices increased in seven of the eight major components of the CPI in April. The only exception was clothing and footwear which fell 1.1% from a year earlier. Overall food prices rose 3.3%. Alcohol and tobacco prices rose 2.4%. Shelter costs rose 2.3%, but mortgage interest costs fell by 2.1%. The cost of transportation increased 8.3%. The household operations, furnishings and equipment index declined 0.7%.

Consumer prices increased in every province in the 12 months to April, including large increases in gasoline prices.



RBC: Household Affordability Declines in First Quarter 
On May 20, the Royal Bank of Canada released its latest Housing Affordability Survey report which showed that affordability slipped in the first quarter of the year across Canada, as higher house prices in most markets meant that Canadians had to dedicate a larger share of their household budgets to housing costs. In addition, interest rate increases are likely to place further pressures on home owners.

The problem is especially pronounced in Vancouver, where RBC estimated families must now dedicate 72% of their household income (up 3.4 points from last quarter) to pay the mortgage, property taxes and utilities on a bungalow. In Toronto it would take 47.5% (up 0.8), Ottawa 39.0% (up 0.4), Calgary 35.9% (up 0.9), Edmonton 31.5% (up 0.5) and Montreal 43.1% (up 2.0). For the country as a whole, it was 40.5% (up 0.7 of a percentage point from the last quarter). The two other housing types tracked in the survey also became less affordable. A two storey home increased by 0.2 points to 46.2% and a condo gained 0.2 points to 27.2% across Canada.

“Interest rates will likely soon start to rise again, leading to a period of steady increases in home ownership costs. This, in turn, will contribute to a flattening in Canadian housing demand going forward,” said Robert Hogue, senior economist at RBC, in a statement. “We could experience some turbulence this spring and summer, given that new tighter mortgage lending rules in March and April likely shifted home buying activity to earlier in the year.”

The cost of carrying a home surged in Vancouver and is now “testing the boundaries of rationality” due to significant gains in property values, while Quebec also saw a notable rise in the price of ownership and even Atlantic Canada’s typical advantage when it comes to the cost of owning a home diminished, the report said.



U.S. Housing Market Still Sluggish
The Commerce Department said on May 24 that U.S. new home sales rose 7.3% in April to a seasonally adjusted annual rate of 323,000, still well below the more normal pace of 700,000 new home sales. There is less incentive for Americans to buy a new home right now when prices are 30% higher than the median price of a resale home which is twice the normal mark up. Last year, was the lowest sales year for new homes in the U.S. on record.

Further, in the latest Standard & Poor’s/Case-Shiller 20-city index released yesterday, home prices in the U.S. have reached their lowest points since the housing bubble burst in 2006. Prices fell from February to March in 18 of the metro areas tracked by the index, and prices in 12 of those cities, have hit their lowest level since the housing crisis began. The only cities where prices rose in March were Seattle and Washington, D.C.

A record number of foreclosures, a large supply of unsold houses, and the reluctance or inability of many to buy is forcing prices down, and the price declines are expected to continue throughout the year.

Upcoming CHHMA Events For 2011

Night at the Races
Wednesday, June 15
Woodbine Racetrack, Toronto, Ontario

Soirée Karting/Go Karting Night
Thursday, September 1
Circuit ICAR, Mirabel, Quebec

Industry Memorial Golf Classic
Tuesday, September 27
Blue Springs Golf Club, Acton, Ontario

Industry Cocktail
Tuesday, November 29
Location TBA, Montreal, Quebec

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

CHHMA Cost Savings Links
(Click on logos to see how your company can save money)

 


"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 (416) 282-0022, ext. 34.

 

 

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