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From groceries to booze, payday loans to plane tickets — here’s what the budget means for your wallet

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With inflation still near its highest level in decades, the federal budget unveiled in Ottawa Tuesday offered a lot of talk about making life more affordable for Canadians — but few details about how it’s all going to work.

One of the biggest items leaked prior to the budget’s release is something the government is calling a “grocery rebate” meant to mitigate the cost of grocery prices that are still rising at an annual rate of more than 10 per cent.

It’s an extended version of the existing GST rebate cheque program, which gives cash payouts to refund GST payments incurred by low-income Canadians.

The government says the rejigged program will put an extra $467 into the pockets of the average family with two kids, and $234 for a single person. Government estimates suggest they think roughly 11 million people will qualify for the program, which is to be doled out via a quarterly cheque or direct deposit.

Strictly speaking, the government isn’t requiring that the money be spent on groceries. But the program’s branding suggests Ottawa hopes it will deliver $2.5 billion in relief where many Canadians need it most — in the checkout aisle.

That’s good news for people like Krystle Kisman, a single mother from Burlington, Ont., for whom putting food on the table has been a major source of stress of late.

“I remember I used to spend $200 every two weeks and I would get double what I’m getting now,” she told CBC News this week. “It’s tough. A lot of times I use my child tax credit towards our food for the month.”

The grocery program is targeted at people like Kisman, who have had to face impossible choices between paying rent and paying for food.

There’s very little else in the budget in the way of direct payments to Canadians to blunt the impact of inflation. But the document is also sprinkled with programs and policy ideas aimed at helping consumers keep a little more of the money they already have.

two servers smile and get beer from the tap
The beer industry had lobbied hard against a proposed six per cent increase on the excise tax on alcohol, which the government slashed down to just two per cent. (Michelle Both/CBC)

In recent weeks, the beer and alcohol industry has been sounding the alarm about a looming hike to the federal tax on beer, wine and spirits. The so-called excise tax is pegged to inflation, which means it was on track to increase by more than six per cent this weekend — a jump that would have taken the toll to 73 cents on a litre of wine and more than 37 cents for a litre of beer.

Those excise fees are paid by brewers, wine and spirit makers, but the costs filter down for consumers as they add to the cost of doing business, and pushing up retail prices.

The government announced in the budget that it will slash that increase to two per cent for this year, well below the inflation rate.

The budget also aims to rein in some of the more exorbitant costs that some Canadians pay to borrow money. While rates on conventional personal and business loans from major lenders tend to hover between the low single digits for a mortgage to slightly over 10 per cent for other forms of unsecured debt, that’s not true for all types of loans.

That’s why the budget targets what the government calls “predatory lending” by changing loopholes that currently allow some lenders to charge rates as high as 47 per cent per year.

The government says it’s going to amend the Criminal Code to cap those rates at 35 per cent, in line with existing regulations already on the books in Quebec.

Payday loans are currently exempt from that legislation due to various loopholes. Those loans are typically for small amounts of up to $1,500 and only for terms of up to two months — but despite their short term, their costs are far higher than other loans, as annualized rates can sometimes approach 400 per cent.

The government says it plans to tighten and eliminate some of those loopholes by requiring payday lenders to charge no more than $14 for every $100 borrowed. And says it will consult with the provinces on additional revisions on how to further regulate the payday-lending industry.

Credit card fee reductions

The government also laid out new rules for another source of frustration for small businesses and consumers: credit card fees.

Every time a customer swipes a credit card to pay for a purchase, the vendor pays what’s known as an interchange fee to the credit card company processing the transaction.

In Canada, such fees on some cards can amount to up to three per cent of the purchase price — far higher than they are in jurisdictions where they are capped.

While the budget stops short of imposing such a cap, the government did say it has struck a deal with the major credit companies that will see interchange fees reduced by about 27 per cent for about 90 per cent of the businesses that accept credit cards.

Dan Kelly, president of the Canadian Federation of Independent Business, said the lowering of fees is a good start, but more is needed. “A 27 per cent reduction in small business merchant fees is significant, but more details are needed to determine how many small businesses will benefit from this plan,” he said.

a credit card payment terminal is shown
The goverment says it has struck a deal to reduce credit card interchange fees by an average of 27 per cent. (CBC News)

Government estimates suggest the new fee structure will save small businesses $200 million a year, savings that should theoretically filter down to consumers since a court ruling last fall established that merchants are allowed to pass those fees on to consumers directly now.

Credit card fees aren’t the only hidden fee facing scrutiny. Although it offers few details, the government says it wants to crack down on what it calls “junk fees” that get tacked on to goods and services.

The government says it wants to work with the provinces and various regulators to examine things like cellphone roaming charges, ticket fees and excessive baggage fees — just a few examples of the sort of nickel-and-dime fees that annoy consumers.

Travel fees set to increase

But even as the government talks tough about getting rid of hidden fees, it’s actually increasing one that Canadians pay every time they get on a flight.

The Air Travel Security Charge is one of many fees that flyers pay when they buy a plane ticket. The money goes to funding and improving vital airport services like passenger screening and baggage handling.

First implemented in 2002 after the Sept. 11 attacks, the fees have not increased since 2010, when they jumped up by more than 52 per cent to their current level.

The budget has earmarked an extra $1.8 billion to help fix the travel chaos that Canadians have experienced at airports of late, but it will come at a hefty cost for consumers. The Air Travel Security Charge is set to increase by almost 33 per cent next year.

That will bring the added fee on a one-way ticket within Canada to $9.94, on a flight to the U.S. to $16.89, and on a trip overseas to $34.42.

Nisha photo
Single mother Krystle Kisman says it has been hard lately to put food on the table for her and her son. The government has beefed up its GST rebate program to target consumers like her for help with their grocery bills. (Nisha Patel/CBC)

Economist Armine Yalnizyan said that, coming from a government claiming to be focused on helping Canadians deal with high inflation, the budget offered little of substance.

“Something is better than nothing,” she said of the grocery rebate program, “but affordability got the short shrift in this budget.”

She said tackling junk fees plays well among voters who can afford to do things like go on vacation and buy concert tickets, but they don’t help with the pain of necessities like food, shelter, and gas.

“They are catering to people who are inconvenienced by problems at the airport and the Taylor Swift crowd and saying ‘we are going to deal with Ticketmaster maybe’ but inconvenience is different than going hungry.”

“You don’t want to worry about inconvenience at a time of basic affordability.”

 

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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)

The Canadian Press. All rights reserved.



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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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