The Canadian Dairy Commission has approved a rare second milk price increase this year.
The Crown corporation, which oversees Canada’s dairy supply management system, said Tuesday farm gate milk prices will go up about two cents per litre, or 2.5 per cent, on Sept. 1.
The increase comes after milk prices rose six cents per litre, or roughly 8.4 per cent, on Feb. 1.
The commission said when it reviews prices again this fall, the mid-year price increase approved for Sept. 1 will be deducted from any adjustment for next February. Prices are usually reviewed once a year.
The decision follows a request by Dairy Farmers of Canada in May for a mid-year milk price hike due to high inflation.
The industry lobby group said farmers are facing never-before-seen price increases on goods and services they need to produce milk.
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Dairy Farmers of Canada said the commission’s decision to raise prices serves as recognition that farmers have been under pressure as a result of higher input costs.
“Dairy farmers are not the cause of the unprecedented global economic turmoil plaguing all sectors of the economy, but have to adjust to the conditions like everyone else,” the group said in a news release Tuesday.
Price increase at consumer level could be higher
The commission said in a memo that the increase in milk prices will partially offset increased production costs due to inflation.
“Feed, energy, and fertilizer costs have been particularly impacted, with increases of 22 per cent, 55 per cent and 45 per cent respectively since August 2021,” the commission said.
The actual increase in milk prices for consumers could be much more as various players in the supply chain could also tack on additional price increases.
“The impact of these adjustments on retail prices will depend on many factors such as manufacturing, transportation, distribution, and packaging costs throughout the supply chain,” the commission said.
Still, the increase approved by the dairy commission is much less than some industry observers were expecting.
“It could have been worse,” said Sylvain Charlebois, Dalhousie University professor of food distribution and policy.
“Based on the data we were looking at, we were expecting an increase north of five per cent. I was expecting way more.”
The dairy commission has been under pressure in recent weeks by various industry stakeholders to keep prices manageable for Canadian consumers.
“The Canadian Dairy Commission is starting to listen to Canadians and the concerns that people have with food inflation,” Charlebois said. “The CDC tried to strike a balance between what the industry needs and what consumers are feeling.”
Gary Sands, senior vice-president of public policy with the Canadian Federation of Independent Grocers, agreed that the increase was less than anticipated.
Still, consumers can expect to pay much more than 2.5 per cent extra due to companies “piggybacking” their own increases on top of the higher farm gate price for milk, he said.
Meanwhile, in a mandate letter sent to the chairperson of the Canadian Dairy Commission in mid-April, Agriculture Minister Marie-Claude Bibeau outlined the need for greater transparency.
Bibeau said one of the priorities is for the commission to review its approach on milk pricing decisions to ensure clearer and more transparent communication with Canadian consumers and dairy stakeholders.
The commission shared a news release on the increase in farm gate milk prices in addition to informing stakeholders, including processors, retailers and restaurants, of the price adjustment through a memo.
Travel delays: Canadian airlines, airports top global list – CTV News
Canadian airlines and airports claimed top spots in flight delays over the July long weekend, notching more than nearly any other around the world.
Air Canada ranked No. 1 in delays on Saturday and Sunday that affected 700-plus trips in total, or about two-thirds of its flights, according to tracking service FlightAware. It was more than 14 percentage points above the three carriers tied for second place.
Jazz Aviation – a Halifax-based company that provides regional service for Air Canada – and the lower-cost Air Canada Rouge both saw 53 per cent of flights delayed, putting them in the No. 2 spot alongside Greek regional airline Olympic Air.
On Saturday, WestJet and budget subsidiary Swoop placed third and fourth at 55 per cent.
On the airport front, Toronto’s Pearson claimed the No. 2 spot Sunday after 53 per cent of departures were held up, below only Guangzhou’s main airport in China. Pearson beat out Charles de Gaulle airport in Paris and Frankfurt Airport in Germany.
Montreal’s airport placed sixth Sunday at 43 per cent of takeoffs delayed, on par with London’s Heathrow, according to FlightAware figures.
Air Canada said last week it will cut more than 15 per cent of its summer schedule, nearly 10,000 flights in July and August, as the country’s aviation network sags under an overwhelming travel resurgence.
Bookended by statutory holidays in Canada and the U.S., the weekend saw scenes of long lines and luggage labyrinths flood social media as airports across the globe grappled with the start of peak travel season following two years of pent-up demand.
Passenger flow at Canadian airports is already at 2019 levels during peak times, though closer to 80 per cent of pre-pandemic volumes overall, experts say.
“This is going to be with us all summer,” said Helane Becker, an airline analyst for investment firm Cowen.
“Almost every airline encouraged people to retire early or take leaves. And those people that retired early maybe don’t want to come back to work,” she saidof airline employees.
“It’s hard to rebuild off those lows.”
Some pilots have not yet had their licences renewed, while positions with groundcrews and baggage handling remain unfilled – or quickly vacated – due to low wages and stressful work conditions, unions say.
Government agencies have been on a hiring spree for airport security and customs, with 900-plus new security screeners in place since April – though not all have clearance to work the scanners – according to the federal Transport Department.
“The airlines also used the pandemic to eliminate aircraft types from their fleet, and to ground and retire their oldest aircraft. It’s hard to bring these aircraft back once you park them without doing a lot of maintenance,” Becker added.
“As demand continues to surge, we’re basically looking at an inability for the airlines to easily accommodate it. And I think that’s true worldwide.”
This report by The Canadian Press was first published July 4, 2022
High inflation likely to stick around, consumers and businesses tell Bank of Canada in 2 surveys – CBC News
Canadian businesses and consumers think the current era of high inflation will persist for longer than they’d previously hoped, according to two surveys from the Bank of Canada released Monday.
The two reports — known as the Business Outlook Survey and the Canadian Survey of Consumer Expectations — are the result of the central bank’s quarterly polling of Canadian businesses and consumers for their outlook on what’s happening on the ground in Canada’s economy.
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While the findings differed in a few ways, the dominant theme of both was inflation and the impact it is having on buying and selling, hiring and firing.
The main takeaway from the business survey was that most businesses are seeing higher sales than they were seeing earlier in the pandemic, as economic activity is returning to some sort of normal. But demand continues to outstrip supply across almost all types of businesses, which is both a factor of and a contributor to the high inflation currently plaguing the economy.
Nearly two-thirds of businesses told the central bank they are seeing labour shortages. Nearly half — 43 per cent — say they are experiencing bottlenecks in their supply chains, and they’re taking longer to resolve than previously anticipated.
Businesses expect Canada’s inflation rate to still be more than five per cent a year from now, and still more than four per cent two years out. But five years from now, the survey suggests they expect the inflation rate to come back to within the range the central bank targets, between one and three per cent.
It was a similar story on the consumer side. Long-term inflation expectations increased from 3.2 per cent to four per cent, while short-term expectations increased to 6.8 per cent, up from 5.1 per cent last quarter.
“Consumers clearly took notice of the recent [consumer price index] releases and the high prices for food and gasoline,” CIBC economists Andrew Grantham and Karyne Charbonneau said of the data. “Uncertainty around the evolution of inflation has increased.”
Wages set to increase
On the employment front, on average, business owners expect their labour costs to increase by 5.8 per cent this year.
That’s significantly higher than the two per cent wage increases that consumers told the bank they were expecting.
“Workers do not anticipate their wage gains will keep up with inflation,” the bank said, adding that those in the private sector think their wages will increase this year by more than those in the public sector will.
Economist Leslie Preston with TD Bank said the survey shows just how big a concern inflation is in the minds of ordinary consumers.
“This survey suggests consumer spending in real terms is likely to slow in the coming months as wages can’t keep up with inflation, and households are already being forced to economize,” she said, adding that expectations of high inflation to come “is a source of concern for low-income consumers in particular, who are adjusting to high inflation by cutting spending, postponing major purchases, looking for discounts more often, and buying more affordable items.”
Canadian retailers struggle with online shipping costs as fuel surcharges soar – Global News
Canadian retailers are struggling with higher shipping costs as couriers tack hefty fuel surcharges onto shipping rates to recoup record gas prices.
The additional charge is sending the cost of shipping goods within Canada higher, topping 40 per cent for some carriers.
For stores with high online return rates, such as apparel and footwear companies, the increased cost of shipping can be especially challenging.
So far, most companies are trying to absorb the extra domestic shipping charges, Retail Council of Canada spokeswoman Michelle Wasylyshen said.
With inflation squeezing consumers and an ongoing battle for online dollars, she said retailers are reluctant to pass on costs.
“Retail is one of the most competitive industries in Canada, so raising minimum free shipping thresholds or adding surcharges to consumers directly is often done as a last resort,” she said.
“Retailers would prefer to find savings elsewhere.”
Higher domestic shipping costs come as international freight costs finally begin to stabilize.
Retailers have basically traded more reasonable international container freight rates for higher shipping within Canada, experts say.
“The idea of ever being in equilibrium around fuel prices or containers or what’s happening with worldwide supply chains is long gone,” Indigo Books & Music Inc. president Peter Ruis said in an interview.
Indigo, which saw online sales soar during the pandemic, is also avoiding raising prices despite skyrocketing shipping rates.
“We’re absolutely clear that especially at the moment with inflation and how customers are feeling … we will not want to be raising prices,” Ruis said.
Instead, the company is focused on developing the ability to ship from local stores, rather than from a centralized warehouse, to cut down on shipping costs.
“In October we launch our new website which will have a ship from store facility, which means we can use all of our stores as a warehouse for the online consumer,” Ruis said. “If someone’s in Halifax, we could choose to send them product from the Halifax store rather than from the central (distribution centre) in Toronto or Calgary.”
He added: “In a situation where the fuel charges are really difficult, we can mitigate that by sending stock locally.”
Tips to conserve gas
Apparel retailers, which often see the highest return volumes among retailers, also appear determined to avoid passing fuel surcharges on.
Canadian underwear and apparel brand Knix Wear Inc., which does most of its sales online and offers free return shipping on most orders, said it doesn’t plan to change the qualifying threshold for free shipping.
“We know there are several external factors affecting shipping and costs but we do not want our customers to feel those impacts,” company spokeswoman Emily Scarlett said.
Shipping surcharges vary between different courier companies.
A FedEx spokesman said the shipping company manages fluctuations in fuel prices through “dynamic fuel surcharges.”
Fuel surcharges on shipments within Canada are subject to weekly adjustments based on a rounded average of the Canadian diesel retail price per litre, James Anderson said in an email.
For packages outside the country, the company bases its fuel surcharge on a rounded average of the U.S. Gulf Coast spot price for a gallon of kerosene-type jet fuel, he said.
The FedEx Express fuel surcharge is currently 41.50 per cent within Canada, and 26.50 per cent on international shipments.
DHL Express said it applies the fuel surcharge to offset fluctuations in fuel prices, which can impact the cost of transportation services _particularly for the company’s aviation fleet.
The fuel surcharge for international shipments is set at 25 per cent for July 2022, according to the company’s website.
Canada Post’s fuel surcharge on domestic services is currently 37 per cent, while its international parcel service is 21.75 per cent, according to its website.
© 2022 The Canadian Press
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