Business

Industry looks to budget for help on supply chain problems, domestic production

Published

2 years ago

April 1, 2022

OTTAWA — The federal Liberals are being asked to muscle space in next week’s budget to help Canada become more productive, and lay investments to lure new companies as part of a push to simplify pandemic-strained supply chains.

For years, Canadian businesses have under-invested in technology and other measures that could help workers more easily reach the same output they do now.

Coming out of the COVID-19 pandemic, an association of manufacturers and exporters worries the country will fall further behind competitors in peer nations without the right push now.

Thrown into the mix are supply chains that have been gummed up from the reopening of the global economy that has led a drive domestically and in the United States to expand continental manufacturing capacity.

Dennis Darby, president of Canadian Manufacturers and Exporters, said the confluence of circumstances is why his group and others are looking for investments and incentives to spur post-pandemic change and deal with current strains.

He said the country needs to attract the needed capital now and get companies to invest in Canada before they start looking elsewhere, including the United States, to plant their money.

It’s why his sector is looking for tax incentives for companies to purchase new machinery, equipment and technology, and expansion of an existing federal fund that would see it provide $2.5 billion annually to support large-scale capital projects.

Darby pointed to the Liberals’ recent promise of more social programs — and therefore more spending — as part of a political pact with the New Democrats.

“There is always a lot of pressure on budgets, especially this one,” he said. “But we have to make those investments, putting a real stake in the ground and saying, yeah, we’re going to attract the capital that we need to compete.”

The risk to Canada from problems with global supply chains has been on the minds of federal officials since the fall of 2020 when they began to identify pressure points that could cause economic pain domestically if left unchecked.

Senior officials at a July 2021 meeting decided to aim efforts at critical supply chains that faced risks from geopolitical events, and domestic structural issues like labour shortages and just-in-time delivery models.

Officials identified 10 supply chains vulnerable to import problems and the availability of critical goods, although they have all been blacked out in documents obtained by The Canadian Press under the Access to Information Act.

Officials framed the work on supply chains as part of positioning the country “in the economy of the future, ensuring economic prosperity and COVID-19 recovery efforts.”

On Friday, Darby and members of his association met virtually with International Trade Minister Mary Ng. In a tweet, Ng wrote that the group spoke about “creating opportunities for exporters through trade and ensuring the resilience of our supply chains.”

Pandemic-induced delays of deliveries mean companies have been challenged to keep up with consumer demand, which has contributed to three decade-high inflation rates.

The reliance on long supply chains has made the country vulnerable to hiccups in deliveries of goods, Darby said.

He said the budget plan should also provide the sector with help to deal with a labour shortage that amounts to about 80,000 unfilled positions. Darby said companies could fill those spots quickly given demand, but just can’t find available workers — a common refrain in large swaths of the Canadian economy.

Tu Nguyen, an economist with RSM Canada, said managing supply chain pressures now could help prod longer-term growth for trade-reliant sectors, including commodities like oil and gas.

She said the trick is to make sure the economy can absorb that growth without fuelling more demand and further straining supply chains.

“We just have to make sure that our growth is offsetting the difficulties that are coming from high inflation and supply chain disruption.”

This report by The Canadian Press was first published April 1, 2022.

Jordan Press, The Canadian Press

Business

Roots sees room for expansion in activewear, reports $5.2M Q2 loss and sales drop

Published

19 hours ago

September 13, 2024

Anne Joseph

TORONTO – Roots Corp. may have built its brand on all things comfy and cosy, but its CEO says activewear is now “really becoming a core part” of the brand.

The category, which at Roots spans leggings, tracksuits, sports bras and bike shorts, has seen such sustained double-digit growth that Meghan Roach plans to make it a key part of the business’ future.

“It’s an area … you will see us continue to expand upon,” she told analysts on a Friday call.

The Toronto-based retailer’s push into activewear has taken shape over many years and included several turns as the official designer and supplier of Team Canada’s Olympic uniform.

But consumers have had plenty of choice when it comes to workout gear and other apparel suited to their sporting needs. On top of the slew of athletic brands like Nike and Adidas, shoppers have also gravitated toward Lululemon Athletica Inc., Alo and Vuori, ramping up competition in the activewear category.

Roach feels Roots’ toehold in the category stems from the fit, feel and following its merchandise has cultivated.

“Our product really resonates with (shoppers) because you can wear it through multiple different use cases and occasions,” she said.

“We’ve been seeing customers come back again and again for some of these core products in our activewear collection.”

Her remarks came the same day as Roots revealed it lost $5.2 million in its latest quarter compared with a loss of $5.3 million in the same quarter last year.

The company said the second-quarter loss amounted to 13 cents per diluted share for the quarter ended Aug. 3, the same as a year earlier.

In presenting the results, Roach reminded analysts that the first half of the year is usually “seasonally small,” representing just 30 per cent of the company’s annual sales.

Sales for the second quarter totalled $47.7 million, down from $49.4 million in the same quarter last year.

The move lower came as direct-to-consumer sales amounted to $36.4 million, down from $37.1 million a year earlier, as comparable sales edged down 0.2 per cent.

The numbers reflect the fact that Roots continued to grapple with inventory challenges in the company’s Cooper fleece line that first cropped up in its previous quarter.

Roots recently began to use artificial intelligence to assist with daily inventory replenishments and said more tools helping with allocation will go live in the next quarter.

Beyond that time period, the company intends to keep exploring AI and renovate more of its stores.

It will also re-evaluate its design ranks.

Roots announced Friday that chief product officer Karuna Scheinfeld has stepped down.

Rather than fill the role, the company plans to hire senior level design talent with international experience in the outdoor and activewear sectors who will take on tasks previously done by the chief product officer.

This report by The Canadian Press was first published Sept. 13, 2024.

Companies in this story: (TSX:ROOT)

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Business

Talks on today over HandyDART strike affecting vulnerable people in Metro Vancouver

Published

2 days ago

September 12, 2024

Anne Joseph

VANCOUVER – Mediated talks between the union representing HandyDART workers in Metro Vancouver and its employer, Transdev, are set to resume today as a strike that has stopped most services drags into a second week.

No timeline has been set for the length of the negotiations, but Joe McCann, president of the Amalgamated Transit Union Local 1724, says they are willing to stay there as long as it takes, even if talks drag on all night.

About 600 employees of the door-to-door transit service for people unable to navigate the conventional transit system have been on strike since last Tuesday, pausing service for all but essential medical trips.

Hundreds of drivers rallied outside TransLink’s head office earlier this week, calling for the transportation provider to intervene in the dispute with Transdev, which was contracted to oversee HandyDART service.

Transdev said earlier this week that it will provide a reply to the union’s latest proposal on Thursday.

A statement from the company said it “strongly believes” that their employees deserve fair wages, and that a fair contract “must balance the needs of their employees, clients and taxpayers.”

This report by The Canadian Press was first published Sept. 12, 2024.

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Business

Transat AT reports $39.9M Q3 loss compared with $57.3M profit a year earlier

Published

2 days ago

September 12, 2024

Anne Joseph

MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.

The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.

The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.

Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.

On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.

Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.

This report by The Canadian Press was first published Sept. 12, 2024.

Companies in this story: (TSX:TRZ)

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