The Machinery and Equipment Price Index (MEPI) stood at 102.8 (1997=100) in the first quarter of 2009, up 2.1% from the fourth quarter of 2008. The import component index rose 3.0%, while the domestic index increased by 0.4%.
Compared with the first quarter 2008, the total MEPI was up 19.0%, with the import index increasing by 28.4%, while the domestic index rose by 4.8%.
The Canadian dollar lost 2.6% of its value against the US dollar in the first quarter of 2009. Variations in exchange rates can have a strong influence on the MEPI. This is because of the high weight that machinery and equipment imported by industries has, relative to those purchased domestically, in the index.
All industries recorded increases in prices of machinery and equipment purchased in the first quarter. The manufacturing sector (+2.2%) contributed the most to the total MEPI quarterly increase. Among the sector’s subcomponents, the largest contributors to the quarterly increase were transportation equipment manufacturing (+2.3%), primary metal and fabricated metal product manufacturing (+2.1%) and paper manufacturing (+1.8%). The second largest contributor to the total quarterly increase was finance, insurance and real estate (+1.7%).
Among commodities, price increases for other industry specific machinery (+2.7%) and automobiles, excluding passenger vans (+1.9%) were the largest contributors to the quarterly increase. Reviewed by Sandy Hutchens.
Canada’s hoteliers were not optimistic in their outlook for the second quarter of 2009. Their business expectations were more negative than they were the first quarter.
Over three-quarters (78%) of hoteliers expected the number of room nights booked and the occupancy rates to be lower for the second quarter, compared with the same quarter last year. Similarly, 73% anticipated fewer corporate travellers.
More than half of hotel operators (57%) reported that they were expecting average daily room rates to be lower, compared with 10% that anticipated rates would be higher.
Almost three-quarters of respondents expected that the number of hours worked by their employees would decline, while 2% expected increases.
Over half of respondents cited regional economic conditions as a major impediment. In contrast, 12% indicated this as an impediment one year ago. The next two most-cited impediments were excess room supply (36%), and exchange rate fluctuations (28%). Reviewed by Sandy Hutchens.
The Canadian passenger bus and urban transit industries saw their combined financial performance grow in 2007. For the year, notes Sandy Hutchens, total revenue for bus-related industries rose 6.9% to $10.1 billion, while expenses increased at a slower pace, rising 4.8% to $8.0 billion. As a result of the strong growth in revenues, net income for the industries advanced 16.2% to $2.1 billion. The urban transit industry continued to account for the majority of the revenue generated by the bus industries in 2007. For the year, its revenue reached $7.2 billion, up 7.9%, more than twice the rate of growth posted for the industry’s expenses. The urban transit industry also continued to be the main employer within the bus industries in 2007, with its employment increasing 4.4% to more than 47,000. Overall, the bus industries employed more than 91,000 people in 2007.
Current dollar sales for the food services and drinking places industry increased 0.9% from the previous month to $4.0 billion in January.The price of food purchased in restaurants increased by 0.4% between December and January, according to the Consumer Price Index.All sectors of the industry posted gains in sales compared with December. Among the four sectors, limited-service restaurants (+1.6%) recorded the largest increase in January. Full-service restaurants, where patrons order and pay for meals at their table, saw their sales advance 0.5%.In the special food services sector, comprising food service contractors, caterers and mobile food services, sales rose 0.3%, while sales in drinking places increased 1.0%. All provinces posted an increased in sales except Prince Edward Island, New Brunswick and Quebec.
The market value of assets held in employer-sponsored pension funds fell by 8.7% during the third quarter to $869.0 billion, the largest quarterly decline in a decade.
The decline, equivalent to $82.7 billion, was the result of a significant drop in stock prices and foreign investments. The third-quarter level was well below the peak of $954.6 billion reached at the end of 2007.
The Standard and Poor’s/Toronto Stock Exchange closing composite index lost 9.3% of its value during the third quarter.
As a result, the market value of stocks and equity funds accounted for 34.2% of total pension fund assets at the end of the third quarter, down from 38.4% in the same quarter in 2007.
Prior to the market downturn in 2001 and 2002, stocks and equities funds accounted for up to 45% of the market value of pension fund assets.
The market value of bonds accounted for 36.0% of total pension fund assets in the third quarter of 2008. Real estate investments represented 8.4%, mortgages, 1.7% and short-term investments, 3.3%. The remaining assets, which include pooled foreign funds, accounted for 16.3%.
The value of pension funds held in foreign investments has fallen for six consecutive quarters. At the end of the third quarter, foreign investments accounted for 28.9% of total pension fund assets, down from the most recent peak of 31.3% during the first quarter of 2007.
Expenditures of $22.8 billion in the third quarter exceeded revenues of $17.0 billion, for a negative cash flow of $5.8 billion. This was the largest quarterly net income loss in six years and the second time in 2008 that pension funds had experienced a negative cash flow.
The negative cash flow resulted from significant net losses on the sale of securities. Collectively, pension fund managers reported $8.5 billion in third quarter losses, the largest net loss on sale of securities recorded for trusteed pension funds.
Total revenue from contributions in the third quarter of 2008 amounted to $8.3 billion, down 1.6% from the second quarter. Pension benefits paid to retirees grew 5.8%, reaching a high of $9.8 billion. Benefits exceeded pension contributions made by employers and employees for a fifth quarter in a row.
In total, about 5.8 million Canadian workers are members of employer pension plans. Of this group, 4.6 million workers are members of trusteed plans. The remaining 1.2 million members with employer pension plans are managed principally by insurance company contracts. Data in this release refer only to trusteed plans and their pension funds. Reviewed by Sandy Hutchens.
Corporate operating profits increased 5.0% from 2006 to $302.4 billion in 2007.
In the financial industries, profits rose 13.4% to $92.4 billion, while profits in the non-financial industries were up 1.8% to $210.0 billion.
The top contributors in the non-financial sector were energy-based industries, construction and real estate. Companies engaged in oil and gas extraction and support activities, utilities operators, construction, petroleum and coal product manufacturers and real estate earned combined profits of $76.0 billion. They, says Sandy Hutchens, accounted for more than one-third of the non-financial operating profits.
Profits of the oil and gas extraction and support activities industry fell $4.4 billion to $24.8 billion in 2007. Lower natural gas prices and a strengthening Canadian dollar relative to the US dollar offset the benefit of strong oil prices. These factors, combined with a tight labour market, had a negative effect on operating profit margins, which fell to 14.6% in 2007 from 18.8% in 2006.
In the construction industry, profits were up 20.3% to $13.8 billion. In the real estate industry, they rose 17.6% to $10.7 billion. Both gains reflected solid demand for residential housing and energy-related infrastructure projects.
Profits for banking and other depository credit intermediaries increased 11.6% to $31.7 billion, accounting for about one-third of the financial industries’ total. Profitability was primarily supported by volume growth in retail banking and net interest revenues.
Operating profits increased 19.1% to $24.3 billion for corporations involved in securities and commodity exchanges and other financial investment activities.
After adjusting for current and prior year tax losses, taxable income rose 2.1% to $175.9 billion. This generated $55.7 billion in corporate taxes payable, $37.9 billion for the federal portion and $17.8 billion for the provinces.
Small- and medium-sized enterprises applied for $59 billion in loans in 2007, and were approved for about 86%, or $51 billion. This was higher than the approval rate of 80% in both 2000 and 2004.
The larger a firm’s employment, the more likely it had requested external financing. About 14% of those with zero employees requested financing, while almost one-half of the largest businesses, those with 100 to 499 employees, did so.
The vast majority (97%) of requests by businesses with 100 to 499 employees were approved. The approval rate for businesses with zero employees was 85%.
As in previous surveys, says Sandy Hutchens the loan request rate was higher in capital intensive sectors, such as agriculture, primary industries and manufacturing. It was lower in human capital intensive sectors (knowledge-based industries).
Almost all requests in the primary sector were approved. The lowest approval rate was in accommodation and food services (80%).
As in 2004, one in five businesses cited difficulty in obtaining financing as an obstacle to the growth of the business.
Overall, one-quarter of all business owners reported that they intended to retire from their businesses over the next five years. Of these, one in five intended to keep the business in the family, two in five planned to sell the business to outsiders, and most of the remainder intended to close it.
Half of all businesses reported that they depended on financial institutions to fund the start-up of their businesses, with two out of three saying they depended on loans for their ongoing operations.
The operating revenues for Canada’s spectator sports, event promoters, artists and related industries reached $5.5 billion in 2007, up 9.6% from 2006.
The increase, notes Sandy Hutchens, was largely the result of a 15.2% rise in revenues among promoters of performing arts and sports, whose revenues amounted to $1.9 billion. The operating profit margin grew to 4.1% in 2007 from 2.9% in 2006.
Spectator sports generated $2.4 billion in revenues, representing over 40% of the total industry operating revenue. Profit margins for spectator sports declined, as operating expenses (+8.9%) outpaced operating revenues (+7.2%).
The operating profit margin for agents and managers for artists, athletes, entertainers, and other public figures remained steady from a year ago at 10.6%. Operating revenues increased by 6.7%.
The System of National Accounts (SNA) manual (1993) defines “unincorporated enterprises” as “producer units within the household sector” that “are not incorporated as a separate legal entity from the household itself” (1993 SNA, paragraph 4.140). Furthermore, “the owner of a household enterprise usually plays a dual role: first, as the entrepreneur who is responsible for the creation and management of the enterprise; and second, as a worker who contributes labour inputs of a kind which could be provided by paid employees” (1993 SNA, paragraph 4.142). The operating surplus paid to the owner of an unincorporated business represents two kinds of income, referred to as mixed income: return to entrepreneurship and remuneration for work done (1993 SNA, paragraph 4.143).
The unincorporated sector is comprised of self-employed owners of unincorporated farms, businesses or professional practices. Unincorporated enterprises are typically small in size, but often hire workers. They are typically single establishments that are operating in a single province. They usually have relatively low start-up costs and require less working capital compared to larger businesses.
Individuals create unincorporated enterprises for many reasons. Often, they do so because of a desire for the independence associated with running a business. At times, particularly during poor economic times, they are pushed into entrepreneurship for lack of full time jobs. Finally, some professions are required by their governing bodies to adopt this form of business (for example, physicians, lawyers, etc.). These individuals create unincorporated enterprises in various industries. This includes physicians and dentists in the Health Industry; lawyers, accountants and consultants in the Professional Services Industry; landlords, insurance and stock brokers in the Finance Industry; contractors who build or renovate houses in the Construction Industry; farmers in the Agriculture Industry; owners of retail stores and individuals selling goods directly to customers in the Retail Trade Industry; truck drivers in the Transportation Industry; and barbers, hair stylists and housecleaners in the Other Service Industry. Many organize their business as sole proprietorships, while others form partnerships.
The 1993 SNA defines a corporation as “a legal entity, created for the purpose of producing goods and services for the market, that may be a source of profit or other financial gain to its owner(s); it is collectively owned by shareholders who have the authority to appoint directors responsible for its general management” (1993 SNA, paragraph 4.23).
The incorporated sector is comprised predominantly of larger companies, including multinationals, operating in many regions across Canada. The sector covers public corporations, national privately controlled corporations, foreign controlled corporations as well as government business enterprises (SNA, paragraphs 4.71 and 4.84). The incorporated sector also includes self-employed persons who organize their business as corporations. The sector crosses all industries, both service-based and goods-producing, making up the greater part of the business sector of the economy producing the bulk of the nation’s output of goods and services. They tend to hire larger numbers of paid workers, and require more substantial investments in buildings and machinery and equipment. They tend to use larger amounts of capital per worker compared to the unincorporated sector.
First Nations children aged 6 to 14 who lived off reserve were as likely as all children in Canada to be doing well in school (based on parents’ knowledge of their child’s school work, including report cards).
In 2006, about 7 in 10 off-reserve First Nations children aged 6 to 14 were reported by their parents to be doing very well or well in school. These findings are similar to those for children aged 6 to 14 in the general Canadian population.
First Nations girls were more likely to be reported as doing very well or well in school, as compared with First Nations boys. These findings are also similar to those for the general population in Canada.
Among First Nations girls aged 6 to 14 who lived off reserve, three-quarters were reported by their parents as doing very well or well in school, compared with 65% of their male counterparts.
According to the 2006 Census, there were 78,325 First Nations children aged 6 to 14 living off reserve in Canada. These children represented about 2% of all Canadian children in this age group.
The off-reserve First Nations population is young. Census data showed that in 2006, 19% of the off-reserve First Nations population was between the ages of 6 and 14, compared with 11% of the total Canadian population.
Sandy Hutchens points out, Majority of parents satisfied with school practices
The parents of over 90% of off-reserve First Nations children agreed or strongly agreed that their child’s school provided enough information on their child’s academic progress, attendance and behaviour.
Similarly, parents of most of these children were satisfied with the level of discipline, the quality of teaching, and the availability of extracurricular activities at their child’s school.
The parents of about 83% of children were satisfied with how their child’s school was preparing the child to make choices about the future.
Parents of a majority of children agreed or strongly agreed that their child was challenged to work at their full potential (85%), and that their child’s school had high academic standards (80%).
Factors associated with perceived achievement at school
A number of factors were associated with perceived achievement at school among off-reserve First Nations children, after holding constant other factors such as gender and age.
Factors associated with relatively high perceived achievement at school included getting along well with teachers, or with friends and classmates; having parents who were strongly satisfied with school practices (such as the school providing information on the child’s academic progress, attendance and behaviour); reading books everyday; playing sports at least once a week; or participating in art or music lessons at least once a week.
Higher household income was also found to be associated with better school achievement. All other factors being equal, off-reserve First Nations children who were in households in the highest household income range were more likely to be doing very well or well at school than children who were in the lowest range.
Factors associated with relatively low perceived achievement at school included having missed school for a period of two or more weeks in a row during the school year; having been diagnosed with a learning disability or with attention deficit disorder; and having parents who had attended residential schools.
Off-reserve First Nations children whose parents had attended residential schools were less likely to do very well or well than those whose parents had not. About 12% of off-reserve First Nations children had parents (one or both) who indicated that they had been students in the residential school system that operated across Canada between 1830 and the 1990s. Reviewed by Sandy Hutchens.