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Canadians too anxious about the future to enjoy the vibrant present, say economists – CBC News

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Even as Canada’s central bank was announcing its biggest rate increase in 20 years, headlines in the U.S. were filled with warnings from the Bank of America about an impending “recession shock.”

Certainly, Bank of Canada governor Tiff Macklem told reporters at Wednesday’s news conference that there is plenty to worry about.

“Russia’s unprovoked invasion of Ukraine is causing enormous human suffering,” said Macklem in an opening address. “The war has also introduced a major new source of uncertainty to the global outlook and it is boosting already high inflation in many countries, including Canada.”

U.S. inflation hit 8.5 per cent this week. The COVID-19 pandemic has led to a simultaneous shortage of supply and unsatisfied demand. Shortages of oil and food from Russia and Ukraine are causing new price distortions.

More expensive loans 

In an effort to crush inflationary expectations and force us to spend less, Macklem has launched what he says will be a series of rate hikes that will make all our loans more expensive.

So is now the time to move to the bush and stock up on food?

While some will want to prepare for the worst case, interviews with people who have studied Canada’s economic history — and also lived through a lot of it — suggest we should take a moment to put things in historical context.

“We’re the richest anybody’s been in the history of the universe,” said professor emeritus Jon Cohen with the hyperbole permitted to an 82-year-old economic historian who says he’s seen it all. “That doesn’t mean we necessarily stay that way, but right now, yeah, it’s the best of times.”

Shortly after Macklem’s rate announcement, Canadian banks said they were raising the cost of borrowing money. (Evan Mitsui/CBC)

Cohen, who has “been teaching at the University of Toronto, like, forever,” has been thinking about why Canadians have been so gloomy lately.

“It’s like we’re climbing a wall of worry at this point,” he said on the phone on Wednesday.

And it’s not just a Canadian phenomenon.

“People’s perception of the economy does seem to be way out of line with how bad things really are,” said Nobel Prize-winning economist and columnist Paul Krugman in a podcast Monday.

‘A media failure’

Krugman said he’d seen polls of people in the U.S. convinced the country was losing jobs. Instead, the North American economy is in a time of record-low unemployment.

The U.S. economist called that “a media failure.” He also said that U.S. self-identified conservatives were the ones most convinced the economy is in terrible shape, “worse than it was in 1980 when we had eight per cent unemployment and 14 per cent inflation.”

WATCH | Record-low unemployment gives workers more options:

Canada’s unemployment rate falls to record low as 70,000 jobs added in March

6 days ago
Duration 1:50

New jobs numbers are pointing toward a robust pandemic recovery for the Canadian economy, which saw more than 70,000 jobs added in March as the unemployment rate hit a record low. Economists say companies are under increasing pressure to offer higher wages to attract talent. 1:50

Bad things are often seen as more newsworthy than happy news. So while affordability and the costs of everyday living — housing, in particular — are soaring, it isn’t the whole story.   

In Canada, the unemployment rate last Friday hit 5.3 per cent. That is the lowest rate on record. And while that number is higher than the U.S. rate of 3.6 per cent, a difference in the way the data is collected means those numbers are closer than they appear.

And that low rate of unemployment makes a real difference to those who face challenges getting into the job market, said Tim Lang, president and CEO of Ontario’s Youth Employment Services, a provincially funded group that trains and finds jobs for people between the ages of 15 and 29. 

Work for all who want it

At the height of the pandemic entry-level jobs plunged, Lang said, sending youth unemployment rocketing to 30 per cent. But not any more.

“You could almost say anyone who wants to work can work,” Lang said. That includes what Lang describes “at-risk youth,” people with mental illness or other challenges that, in the past, may have affected their job prospects. The current shortage of workers is showing employers what great employees they can be.

Lang said that for any young person, but especially for those at-risk, getting on the employment ladder is “life changing” in a way that not only helps them but helps their families and the entire economy long into the future.
Workers in personal protective equipment unload groceries from a truck before distributing them to local residents under the COVID-19 lockdown in Shanghai, China, last week. The effects of the pandemic are not over and may still affect the Canadian economy. (Chinatopix/The Associated Press)

Macklem made it very clear that a few rate hikes will by no means strangle the booming job market or the wider economy, as the bank predicts a growth rate of 4.5 per cent this year and 3.5 per cent next — both of which are very healthy rates for a mature developed economy.

The governor and his senior deputy, Carolyn Rogers, cited other economic indicators that are a reason for confidence. Many people have money to spend.

Businesses say they are planning new investment. Exports are good. The reopening of the economy is moving consumer spending away from consumer goods that are in short supply and back toward services. Interest rates, while higher, remain “accommodative” — in other words, borrowing at the new rate is still an exceptionally good deal. 

Not only that, but while the world suffers from a shortage of oil and gas, potash and wheat due to the war in Ukraine, Canada has plenty of all those things to use or to produce and sell. And unlike in previous times of rising resource prices, the loonie is not rising this time — something that in the past has made Canadian non-resource goods harder to export.

Strong fundamentals

Ian Keay, who teaches economic history at Queen’s University in Kingston, Ont., calls himself an empiricist: “I collect data — I’m not a social historian or anything like that.” 

And what Keay sees right now in the Canadian economy is encouraging. 

“The fundamentals are really strong, right? Productivity is pretty good. Resources prices are strong,” said Keay in an interview this week. He said indicators show the structure of the economy is flexible with lots of innovation.

“It’s a pretty positive view, but that doesn’t mean people aren’t scared, that there’s not uncertainty about moving forward.”

From his many years of watching economic ups and downs, Cohen agrees. Battered by bad news, he said it’s not unreasonable to worry that things like the war in Europe or the pandemic could cause more economic trouble. But he said his own long historical view allows him to worry less.

“Things slow a little bit, and then we get going again,” said Cohen.

It may not be as exciting a story as doom and gloom, but barring an unexpected catastrophe, he said, Canadians have every reason to foresee a bright future.

“We’re again in a period of very rapid technological change and innovation, which makes us more productive and actually richer,” said Cohen. “That’s a big deal and that’s one good reason to be optimistic.”

Follow Don on Twitter @don_pittis

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Looking for the next mystery bestseller? This crime bookstore can solve the case

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WINNIPEG – Some 250 coloured tacks pepper a large-scale world map among bookshelves at Whodunit Mystery Bookstore.

Estonia, Finland, Japan and even Fenwick, Ont., have pins representing places outside Winnipeg where someone has ordered a page-turner from the independent bookstore that specializes in mystery and crime fiction novels.

For 30 years, the store has been offering fans of Agatha Christie’s Hercule Poirot or Arthur Conan Doyle’s Sherlock Holmes a place to get lost in whodunits both old and new.

Jack and Wendy Bumsted bought the shop in the Crescentwood neighbourhood in 2007 from another pair of mystery lovers.

The married couple had been longtime customers of the store. Wendy Bumsted grew up reading Perry Mason novels while her husband was a historian with vast knowledge of the crime fiction genre.

At the time, Jack Bumsted was retiring from teaching at the University of Manitoba when he was looking for his next venture.

“The bookstore came up and we bought it, I think, within a week,” Wendy Bumsted said in an interview.

“It never didn’t seem like a good idea.”

In the years since the Bumsteds took ownership, the family has witnessed the decline in mail-order books, the introduction of online retailers, a relocation to a new space next to the original, a pandemic and the death of beloved co-owner Jack Bumsted in 2020.

But with all the changes that come with owning a small business, customers continue to trust their next mystery fix will come from one of the shelves at Whodunit.

Many still request to be called about books from specific authors, or want to be notified if a new book follows their favourite format. Some arrive at the shop like clockwork each week hoping to get suggestions from Wendy Bumsted or her son on the next big hit.

“She has really excellent instincts on what we should be getting and what we should be promoting,” Micheal Bumsted said of his mother.

Wendy Bumsted suggested the store stock “Thursday Murder Club,” the debut novel from British television host Richard Osman, before it became a bestseller. They ordered more copies than other bookstores in Canada knowing it had the potential to be a hit, said Michael Bumsted.

The store houses more than 18,000 new and used novels. That’s not including the boxes of books that sit in Wendy Bumsted’s tiny office, or the packages that take up space on some of the only available seating there, waiting to be added to the inventory.

Just as the genre has evolved, so has the Bumsteds’ willingness to welcome other subjects on their shelves — despite some pushback from loyal customers and initially the Bumsted patriarch.

For years, Jack Bumsted refused to sell anything outside the crime fiction genre, including his own published books. Instead, he would send potential buyers to another store, but would offer to sign the books if they came back with them.

Wendy Bumsted said that eventually changed in his later years.

Now, about 15 per cent of the store’s stock is of other genres, such as romance or children’s books.

The COVID-19 pandemic forced them to look at expanding their selection, as some customers turned to buying books through the store’s website, which is set up to allow purchasers to get anything from the publishers the Bumsteds have contracts with.

In 2019, the store sold fewer than 100 books online. That number jumped to more than 3,000 in 2020, as retailers had to deal with pandemic lockdowns.

After years of running a successful mail-order business, the store was able to quickly adapt when it had to temporarily shut its doors, said Michael Bumsted.

“We were not a store…that had to figure out how to get books to people when they weren’t here.”

He added being a community bookstore with a niche has helped the family stay in business when other retailers have struggled. Part of that has included building lasting relationships.

“Some people have put it in their wills that their books will come to us,” said Wendy Bumsted.

Some of those collections have included tips on traveling through Asia in the early 2000s or the history of Australian cricket.

Micheal Bumsted said they’ve had to learn to be patient with selling some of these more obscure titles, but eventually the time comes for them to find a new home.

“One of the great things about physical books is that they can be there for you when you are ready for them.”

This report by The Canadian Press was first published on Sept. 15, 2024.



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Labour Minister praises Air Canada, pilots union for avoiding disruptive strike

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MONTREAL – Canada’s labour minister is praising both Air Canada and the union representing about 5,200 of its pilots for averting a work stoppage that would have disrupted travel for hundreds of thousands of passengers.

Steven MacKinnon’s comments came in a statement shared to social media shortly after Canada’s largest air carrier announced it had reached a tentative labour deal with the Air Line Pilots Association.

MacKinnon thanked both sides and federal mediators, saying the airline and its pilots approached negotiations with “seriousness and a resolve to get a deal.”

The tentative agreement averts a strike or lockout that could have begun as early as Wednesday for Air Canada and Air Canada Rouge, with flight cancellations expected before then.

The airline now says flights will continue as normal while union members vote on the tentative four-year contract.

Air Canada had called on the federal government to intervene in the dispute, but Prime Minister Justin Trudeau said Friday that would only happen if it became clear no negotiated agreement was possible.

This report from The Canadian Press was first published Sept. 15, 2024.

Companies in this story: (TSX:AC)

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As plant-based milk becomes more popular, brands look for new ways to compete

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When it comes to plant-based alternatives, Canadians have never had so many options — and nowhere is that choice more abundantly clear than in the milk section of the dairy aisle.

To meet growing demand, companies are investing in new products and technology to keep up with consumer tastes and differentiate themselves from all the other players on the shelf.

“The product mix has just expanded so fast,” said Liza Amlani, co-founder of the Retail Strategy Group.

She said younger generations in particular are driving growth in the plant-based market as they are consuming less dairy and meat.

Commercial sales of dairy milk have been weakening for years, according to research firm Mintel, likely in part because of the rise of plant-based alternatives — even though many Canadians still drink dairy.

The No. 1 reason people opt for plant-based milk is because they see it as healthier than dairy, said Joel Gregoire, Mintel’s associate director for food and drink.

“Plant-based milk, the one thing about it — it’s not new. It’s been around for quite some time. It’s pretty established,” said Gregoire.

Because of that, it serves as an “entry point” for many consumers interested in plant-based alternatives to animal products, he said.

Plant-based milk consumption is expected to continue growing in the coming years, according to Mintel research, with more options available than ever and more consumers opting for a diet that includes both dairy and non-dairy milk.

A 2023 report by Ernst & Young for Protein Industries Canada projected that the plant-based dairy market will reach US$51.3 billion in 2035, at a compound annual growth rate of 9.5 per cent.

Because of this growth opportunity, even well-established dairy or plant-based companies are stepping up their game.

It’s been more than three decades since Saint-Hyacinthe, Que.-based Natura first launched a line of soy beverages. Over the years, the company has rolled out new products to meet rising demand, and earlier this year launched a line of oat beverages that it says are the only ones with a stamp of approval from Celiac Canada.

Competition is tough, said owner and founder Nick Feldman — especially from large American brands, which have the money to ensure their products hit shelves across the country.

Natura has kept growing, though, with a focus on using organic ingredients and localized production from raw materials.

“We’re maybe not appealing to the mass market, but we’re appealing to the natural consumer, to the organic consumer,” Feldman said.

Amlani said brands are increasingly advertising the simplicity of their ingredient lists. She’s also noticing more companies offering different kinds of products, such as coffee creamers.

Companies are also looking to stand out through eye-catching packaging and marketing, added Amlani, and by competing on price.

Besides all the companies competing for shelf space, there are many different kinds of plant-based milk consumers can choose from, such as almond, soy, oat, rice, hazelnut, macadamia, pea, coconut and hemp.

However, one alternative in particular has enjoyed a recent, rapid ascendance in popularity.

“I would say oat is the big up-and-coming product,” said Feldman.

Mintel’s report found the share of Canadians who say they buy oat milk has quadrupled between 2019 and 2023 (though almond is still the most popular).

“There seems to be a very nice marriage of coffee and oat milk,” said Feldman. “The flavour combination is excellent, better than any other non-dairy alternative.”

The beverage’s surge in popularity in cafés is a big part of why it’s ascending so quickly, said Gregoire — its texture and ability to froth makes it a good alternative for lattes and cappuccinos.

It’s also a good example of companies making a strong “use case” for yet another new entrant in a competitive market, he said.

Amid the long-standing brands and new entrants, there’s another — perhaps unexpected — group of players that has been increasingly investing in plant-based milk alternatives: dairy companies.

For example, Danone has owned the Silk and So Delicious brands since an acquisition in 2014, and long-standing U.S. dairy company HP Hood LLC launched Planet Oat in 2018.

Lactalis Canada also recently converted its facility in Sudbury, Ont., to manufacture its new plant-based Enjoy! brand, with beverages made from oats, almonds and hazelnuts.

“As an organization, we obviously follow consumer trends, and have seen the amount of interest in plant-based products, particularly fluid beverages,” said Mark Taylor, president and CEO of Lactalis Canada, whose parent company Lactalis is the largest dairy products company in the world.

The facility was a milk processing plant for six decades, until Lactalis Canada began renovating it in 2022. It now manufactures not only the new brand, but also the company’s existing Sensational Soy brand, and is the company’s first dedicated plant-based facility.

“We’re predominantly a dairy company, and we’ll always predominantly be a dairy company, but we see these products as complementary,” said Taylor.

It makes sense that major dairy companies want to get in on plant-based milk, said Gregoire. The dairy business is large — a “cash cow,” if you will — but not really growing, while plant-based products are seeing a boom.

“If I’m looking for avenues of growth, I don’t want to be left behind,” he said.

Gregoire said there’s a potential for consumers to get confused with so many options, which is why it’s so important for brands to find a way to differentiate themselves, whether it’s with taste, health, or how well the drink froths for a latte.

Competition in a more crowded market is challenging, but Taylor believes it results in better products for consumers.

“It keeps you sharp, and it forces you to be really good at what you’re doing. It drives innovation,” he said.

This report by The Canadian Press was first published Sept. 15, 2024.



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