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The 'shop local' message is everywhere, but it's tough resisting deals during a pandemic – CBC.ca

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Are you on board the shop local movement that’s rolling across Canada?

The encouragement to support neighbourhood businesses is coming from all quarters as the economy struggles to emerge from the financial devastation of the COVID-19 pandemic.

Whether it’s provincial and municipal initiatives, chambers of commerce programs, highly publicized incentive campaigns backed by financial giants, or small signs in front of individual businesses, the message is the same: Show your local entrepreneurs some extra love during these difficult times — it’s important for helping the economy recover. 

While recent polls suggest most Canadians support the idea, actually getting people to prioritize shopping locally over scoring the best deal and the convenience of shopping online is a tough sell during a pandemic, some experts say.

Consumers lack confidence

The pandemic has left many people out of work and feeling insecure about their finances, which could make finding the lowest prices more important than supporting local small businesses.

The Bank of Canada’s most recent survey of consumer expectations showed that virtually all indicators have deteriorated due to the impact of the pandemic, including people’s expectations for wages, spending, labour market conditions, inflation and growth in house prices.

“Everybody is trying to find a deal because they don’t know how long their money is going to last,” said economist Armine Yalnizyan.

And maintaining low prices can be a challenge for small enterprises, she said.

“They have a hard time providing deep-cut bargains, especially now.”

A billboard ad from American Express encouraging shoppers to spend locally is on display over Toronto’s Yonge-Dundas Square on Aug. 4. (Evan Mitsui/CBC)

Still, surveys done since the pandemic began suggest there is growing support for small businesses in this country. A key finding from a Leger poll conducted in April was that “Canadians say they are buying local products more often or for the first time.”

American Express Canada said 83 per cent of participants in an online poll in June agreed it was time to support the small business community, while 76 per cent said they were “determined to shop local more than in the past.” The poll wasn’t randomized, but a comparable random poll would have a margin of error of four percentage points, 19 times out of 20.

Who says they don’t support small businesses?

But Wayne Smith, a professor at Ryerson University’s Ted Rogers School of Management who specializes in consumer behaviour, says what people tell researchers can differ from how they actually behave in the real world.

“It’s kind of like asking if people like puppies,” he said. “Everyone’s going to say they like puppies. But how many people go out and get a puppy?”

Smith compares the shop local phenomenon to consumers committing to shop at stores that specialize in environmentally friendly, sustainable products.

“Some do it, but it’s a relatively small proportion of the population,” he said. “Otherwise, Walmart would be out of business.”

People walk and shop in Ottawa’s ByWard Market on June 25. (Hugo Belanger/CBC)

Buying decisions are based on “perceived value,” Smith said. Locally sourced goods or services must be of equal or greater quality than those found elsewhere if consumers are going to follow through on their good intentions, he said.

Julia Gray of Toronto said she and her family are happy to shop locally as much as possible and support small businesses instead of large corporate chains.

However, as an artist, she is also very value conscious, she said.

“My income is always a bit in flux, so, as a family, we’ve learned to be careful about our spending.”

Julia Gray of Toronto shops regularly at her local green grocer. She said she prefers to support small businesses instead of large corporate chains, and the pandemic has made her even more selective about where her money goes. (Submitted by Julia Gray)

Even so, the pandemic inspired her to make a more concerted effort to support her neighbouring businesses, she said.

“Instead of ordering from Pizza Pizza or some other corporate pizza place, let’s order from the local place where their kids go to school with our kids,” she said. “These places won’t survive if we don’t help them.”

Amazon sales booming

Gray says small businesses can also be preferable from a health perspective.

“We have folks in our family who are immunocompromised,” she said. “We don’t want to go where there are big groups and you can be more exposed to the virus. Smaller shops don’t have as many people in them.”

She avoids shopping at Amazon, she said, because it’s one way to express her values.

“You can vote, and you can decide where to spend your money,” she said. “We think about workers — are they treated fairly? Are they protected? And in whose hands does our money end up?”

But Lonnie Delisle, a choir director in Vancouver, is a fan of Amazon.

“It’s so convenient. The price point is good, the selection is good,” he said. “The ease at which you can find things and make the purchases. Amazon is exceedingly user-friendly.”

Packages are sorted to be shipped inside of an Amazon fulfilment centre in Robbinsville, N.J., in this photo from November 2017. It’s difficult for small local businesses to compete with an online behemoth like Amazon. (Lucas Jackson/Reuters)

Delisle said he tries to shop with Canadian companies as much as possible, often checking the Bay or Canadian Tire first.

“But when you need something, and [Amazon has] what’s available, that’s where we go.”

Amazon has thrived during the pandemic, with sales jumping 40 per cent compared to the same time last year. Revenue from international markets such as Canada has also surged due to increased demand.

Big businesses offer incentives for shopping locally

However, even some very big businesses in Canada are trying to get the message out about the importance of small businesses.

The Royal Bank and American Express Canada are both spending big bucks on multimedia advertising campaigns to encourage consumers to shop locally, and offering financial incentives to customers who support small businesses.

RBC’s Canada United campaign offers customers extra points on their RBC Rewards card by shopping locally.

The bank also produced a video about the importance of small businesses and will donate five cents to a special fund every time someone views the video, or likes or shares it on social media. Entrepreneurs will then be able to apply to the fund for grants up to $5,000 to help them cover costs associated with keeping their business afloat through the pandemic. 

American Express Canada’s Shop Small initiative gives cardholders $5 in credits when they spend at least $10 at up to 10 different small businesses, to earn a maximum of $50 in free money. The company has also created a Shop Small Map to direct shoppers to eligible stores.

“It’s good for our economy,” said Kerri-Ann Santaguida, vice-president and general manager of merchant services for American Express Canada. “It’s about the vibrancy of neighbourhoods across the country.”

Economist Armine Yalnizyan says household debt was a huge issue in Canada prior to the pandemic and she worries about what will happen when CERB payments stop. (Christopher Katsarov/The Atkinson Foundation)

Economist Armine Yalnizyan said the strategies of American Express Canada and RBC are similar to that of the federal government, with its rent relief program and small business loans, because they recognize that businesses are the engine that will pull Canada’s economy through the crisis.

We can’t have resilient communities without resilient small businesses,” said Yalnizyan, who holds a fellowship on the future of jobs from the Atkinson Foundation, a Toronto-based charitable organization focused on social and economic justice.

The fact is, she said, big financial institutions such as RBC and American Express Canada depend on a healthy economy.

“They’re trying to keep as many businesses afloat as possible,” she said, “which will minimize the increase in permanent layoffs.”

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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