October 12, 2017
Discounts Not Being Taxed
The Trudeau government insists that employee discounts will not be taxed despite a Canada Revenue Agency document that suggested they will be. Diane Lebouthillier, the national revenue minister, says that Ottawa is not targeting retail sector workers amid worries that changes in the latest version of a CRA document could force some individuals to pay tax on employee discounts. The updated CRA guidance document was only intended to help employers understand their tax-reporting requirements and the decision to change the wording in the document was made by the CRA without the minister's approval. The updated CRA guidance document for employers, known as a tax folio, states that when an employee receives a discount on merchandise because of their employment, "the value of the discount is generally included in the employee's income." It also says the value of the benefit is "equal to the fair-market value of the merchandise purchased, less the amount paid by the employee." However, the folio notes that no amount will be included in the employee's income if the discount is also available to the general public or to specific public groups.
Housing Starts Trend Down In September
The trend in housing starts was 214,821 units in September, compared to 220,573 units in August, says the Canada Mortgage and Housing Corporation (CMHC). This is the first month starts are trending lower after increasing for eight consecutive months. However, CMHC says that despite this decrease, new home construction remains very strong as the seasonally adjusted number of starts was above 200,000 units for four straight months. Starts of single-detached homes in Prince Edward Island were up 93 per cent year-to-date in September, with most of the activity concentrated in the Charlottetown area. In the third quarter of 2017, Quebec annual rate of housing starts reached 43,736 units, up from the level registered for the previous quarter (40,564 units). Homebuilders broke ground on fewer homes in the Toronto Census Metropolitan Area (CMA) during September with total housing starts trending lower by seven per cent. In the Vancouver CMA, housing starts trended downwards as fewer multi-family home projects got underway. The standalone monthly SAAR of housing starts for all areas in Canada was 217,118 units in September, down from 225,918 units in August.
September Index Declines
The Dodge Momentum Index fell in September, moving 8.4 per cent lower to 116.4 from the revised August reading of 127.1. The index is a monthly measure of the first (or initial) report for non-residential building projects in planning in the U.S., which have been shown to lead construction spending for non-residential buildings by a full year. Both components of the index declined in September. The institutional building component fell 11.5 per cent from August, while the commercial building component fell 6.1 per cent. While the overall index has lost ground for four consecutive months, this should not be seen, in and of itself, as a predictor of a turn in building markets. Prior to the previous peak in January 2008, it had suffered similar significant declines, only to rebound and post strong gains in subsequent months in line with overall economic growth. Similarly, the index posted healthy gains from late-2016 through early 2017. Economic growth remains solid and building market fundamentals are supportive of further growth in construction activity.
GEARWRENCH Gets New Branding
GEARWRENCH, a hand tool brand from Apex Tool Group, has created a new logo and brand identity. The branding campaign encompasses every aspect of the GEARWRENCH brand, including its logo, tagline, colour palette, typography, and product design. The logo was designed to reflect the power and personality of the brand, while the ‘Forge Ahead’ tagline connotes the strength and power of the forging process combined with the forward-looking vision that has propelled the growth of the brand. The all-encompassing brand identity program will include product design, social media graphics, advertising, packaging, catalogs, and brochures, trade show displays, vehicle signage, and business forms. Since its introduction in 1996, the GEARWRENCH brand has grown to include not only wrenches, but a wide assortment of automotive and industrial hand tools, including ratchets and sockets, tool storage, torque wrenches, striking and struck tools, screwdrivers and nut drivers, pliers, and impact sockets. By the end of 2017, there will be over 4,100 different products.
Consumers Warming Up To IoT Technologies
More consumers are ready to embrace the automation and convenience delivered by internet of things (IoT) technologies, says a report by Worldplay, a global payments provider. The research shows that the interest and opportunity is there, but there is still work to be done in ensuring consumers see value in new IoT experiences. In the U.S., nearly half of consumers (48 per cent) say they would feel comfortable with a connected device, such as a refrigerator, ordering items on their behalf. However, 62 per cent would want to approve all purchases beforehand and 78 per cent would prefer to be notified before the order is placed. In other areas of IoT, 35 per cent of consumers says they would ‘probably’ or ‘definitely’ consider using a virtual assistant to perform a simple task. However, 48 per cent remain skeptical about a virtual assistant ever being able to conduct a conversation like a real person. Also, while 55 per cent of consumers welcome the convenience of a chatbot or virtual assistant shopping on their behalf, only 37 per cent would allow a virtual assistant to have access to their payment information.
3M Canada Launches Series 2.0 Spray Cup System
3M Canada has introduced the next evolution in its paint application technology – the 3M PPS Series 2.0 Spray Cup System. This system improves the flow of the painting process with an improved spray cup design. It eliminates the need for a separate collar and adds a quarter-turn lid locking system to increase productivity and reduce downtime. These modifications also improve the cleanliness of the painting process and eliminate potential sources of contamination from equipment cleaning or maintenance. The assembly and refilling process improves the efficiency for high-production painters, while the wider adapter allows them to use a larger cup for consistent, efficient batch painting.
Murphy Becomes CEO
Stephen Murphy is chief executive officer of Epicor Software Corporation. Previously, he served as president of OpenText, an enterprise information management company. He succeeds Joe Cowan, who will retire at the end of October.
Fastenal Has Double Digit Sales Increase
Fastenal Company had net sales of $1.13 billion in the third quarter of 2017, a 11.8 per cent increase over net sales of $1.01 billion in the third quarter of 2016. Fastener products represented 35.6 per cent of sales in the quarter. Net earnings were $143.1 million, an increase of 12.7 per cent over net earnings of 126.9 million in 2016. Operating income, as a percentage of net sales, improved to 20.2 per cent in the third quarter from 20 per cent in the third quarter of last year. Gross profit for the quarter was $555.9 million, an 11.2 per cent increase over gross profit of $499.8 million a year ago. As a percentage of sales, gross profit declined 20 basis points to 49.1 per cent from 49.3 per cent in the third quarter of 2016.
October 11, 2017
Sears Canada Wants To Liquidate
Sears Canada Inc. wants to liquidize its remaining assets, as well as the assets of certain of its subsidiaries, and will apply to the Ontario Superior Court of Justice for approval. The retailer wants to commence liquidation sales at retailer locations no earlier than October 19. The company was granted an initial order and protection under the Companies' Creditors Arrangement Act in June. It subsequently received the court's approval of a sale and investment solicitation process to seek out proposals for the acquisition of, or investment in, the Sears Canada Group's business, assets and/or leases, and to implement one or a combination of proposals. It received and implemented going concern transactions for various lines of business, but following exhaustive efforts, no viable transaction for the company to continue as a going concern was received.
Building Permits Slip Again
Canadian municipalities issued $7.5 billion worth of building permits in August, down 5.5 per cent from July. This was the second consecutive monthly decrease. Despite these declines, the year-to-date value of building permits (January to August) is up 8.7 per cent compared with the same period in 2016, reflecting a $3.1 billion increase in multi-family dwellings. Total construction intentions for multi-family dwellings in Canada declined in August, down six per cent from July. However, the sector has been on an upward trend since 2009. This upward trend has gradually closed the gap between the value of multi-family dwellings and single-family dwellings. June was the first month where the value of multi-family dwelling permits for Canada surpassed the value of single-family dwelling permits. Overall, the multi-family component was $294.3 million higher than the single-family component in June and $8.1 million higher in July.
Kyocera Acquiring RYOBI Power Tool Business
Kyocera Corporation plans to acquire the majority of shares of a company to be established from the split of RYOBI Limited’s power tool business. Through the acquisition, Kyocera aims to promote diversification and further expansion of its cutting tool business. It has been focusing its efforts on diversifying and expanding sales of products from its core of indexable tools to solid carbide tools and woodworking tools, as well as power tools for the construction industry. The SENCO Holdings acquisition in August was also part of this mandate. The acquisition is expected to be completed in January.
IKEA Considers Third-party Channels
IKEA will start selling furniture through third-party websites to find new ways to reach customers in the digital age, though the company says no decisions are made regarding what platforms/markets will be in the pilot. The aim is to start a trial in 2018. At this point, IKEA is just looking at broadening its sales base; it will develop the idea over the coming years. The retailer’s main focus remains with its existing channels, including its own websites and stores. More than two billion people globally visited IKEA sites in 2017. The company also has more than 400 stores in 49 countries.
Commercial Market To Dominate Metal Demand
Demand for metal windows and doors is forecast to increase 4.2 per cent per year to $13.5 billion in 2021. Unlike the wood and plastic segments, the commercial market is the dominant sales outlet for metal windows and doors, accounting for over 56 per cent of demand in 2016. Builders and commercial property owners specify metal windows and doors due to their strength, durability, relatively low cost, and minimal maintenance requirements compared to most wood and plastic alternatives. Through 2021, demand for metal commercial windows and doors will be fueled by strong increases in office, retail, and lodging construction activity; increased spending on non-residential improvement and remodeling projects; and growing investment in higher quality windows and doors, including energy efficient products that meet green building codes.
Rayfield Leads CertainTeed
Mark Rayfield is president and chief executive officer of CertainTeed, and region CEO of Saint-Gobain Construction Products for North America. He has been with Saint-Gobain since 1999.
Goodfellow Back In Black
Goodfellow Inc. had net earnings of $1.6 million for the third quarter of 2017. Consolidated sales for the quarter were $143 million. The company says the loosening of inventory restrictions in May of the second quarter generated a favourable sales push which brought it back to monthly profitability. This positive momentum carried over into the third quarter with profitable results. As well, margin levels continued on a positive trend and are approaching profitable historic norms.
October 10, 2017
Proposed Tax Changes Unlikely To Promote Fairness
The federal government's proposed changes to the tax treatment of passive investments in a private corporation will not achieve its goal of promoting tax fairness, says a report by the C.D. Howe Institute. ‘Off Target: Assessing the Fairness of Ottawa's Proposed Tax Reforms for ‘Passive’ Investments in CCPCs’ shows the proposals outlined in the government’s consultation paper risk delivering a blow to the retirement planning of many small business owners. And, that unfavourable impact would be in addition to the potential negative consequences of the proposed changes to entrepreneurship in the small business sector overall. Some of the possible changes involve ending passive investment income tax refundability for private corporations and other tax-assisted saving opportunities. The report argues that the playing field for tax-assisted saving opportunities is unequal in other ways, citing the relative advantage that defined benefit pension plan participants, particularly those in the public sector, have over other Canadians who cannot achieve similar outcomes as do DB plan participants via RRSPs under current rules. One possible reform would involve establishing a lifetime accumulation limit of personal tax-assisted savings to replace the current system of annual limits.
Canac To Open In Modern Quebec Development
Quebec-based hardware and construction materials chain Canac will open a store in the first commercial building of Cité 3000 in Contrecœur, QC. The retailer has purchased a 370,000 square-foot lot on which it will begin construction in 2019 of a $6 million warehouse-store that will consist of 40,000 square feet of retail space and 30,000 square feet of warehouse space. The development is located along the St. Lawrence River, the CN rail line, and the Gaz Métro network. It consists of 2.3 million square feet of land divided into about 15 lots slated for the construction of value-added warehouses and distribution centres capable of handling large volumes. The commercial hub ‒ Cité 3000 ‒ consists of two million square feet of land on which commercial buildings will be erected along with a highway service area.
‘Sand Dune’ Named Owens Corning Shingle Colour
Owens Corning has announced ‘Sand Dune’ as its 2018 shingle colour of the year. The colour was chosen for its versatile medley of hues and for how it complements a broad range of exteriors to create a sense of relaxed, natural grandeur. Beyond aesthetic appeal, as part of the Duration shingle series, ‘Sand Dune’ incorporates the advanced technology and performance of patented SureNail Technology. The company launched the annual roofing colour initiative to highlight the roof as a design element that expresses a homeowner’s personal style and contributes to curb appeal. This is the second year Owens Corning has designated a colour of the year. Last year’s colour was ‘Sedona Canyon.’
CertainTeed Seeks Heroes Of Fort McMurray Rebuild
With an estimated 700+ home builds this year in Fort McMurray, AB, those working in the construction industry are working at full capacity to get their family, friends, and neighbours back into their repaired and rebuilt homes as quickly as possible. To recognize the determination and dedication of those on the front lines of the rebuild, CertainTeed is kicking off a contest to find ‘Fort McMurray's Rebuild Heroes.’ These heroes include contractors, foremen, drywallers, plumbers, and others that are working to build homes and/or complete repairs. Fort McMurray residents are encouraged to visit www.CertainTeed.com/RebuildHero through November 3 to nominate their heroes. While the contest intends to honour all those who are working hard to rebuild the city, five heroes randomly selected from all the submissions will each receive a $2,000 gift card. CertainTeed will also make a $2,000 contribution in each winner's name to a local Fort McMurray charity of his/her choice.
Hastings Hires National Sales Manager
Cary Hergenrother is national sales manager with Hastings Tile & Bath. He returns to the company with 16 years of experience in various sales management positions. Bob Gifford has been promoted to director of business development. He has held several key management positions with the company over the last 19 years.
RPM Has Sales Increase
RPM International Inc. had net sales of $1.35 billion for the first quarter of its 2018 fiscal year, a 7.5 per cent increase over net sales of $1.25 billion for the same period a year ago. Net income for the quarter was $116.4 million, an increase of 3.2 per cent over net income of $112.8 million in 2017. Income before taxes (IBT) was $155.3 million, an increase of 4.6 per cent year over year. Consolidated EBIT for the first quarter was $177.6 million, a 6.1 per cent increase from $167.4 million in the first quarter of 2017. Net sales for the industrial segment increased eight per cent year over year, while net sales for the consumer segment increased 6.8 per cent.
October 6, 2017
Business Owners Need To Start Retirement Planning Sooner
The majority of Canadian small business owners don't have a detailed retirement plan in place despite little interest in expanding their business, says a study by the Canadian Imperial Bank of Commerce (CIBC). In fact, the report shows that 78 per cent of aging business owners haven't prepared any sort of formal plan to prepare for an upcoming retirement or an unexpected emergency. These findings are surprising given that many small business owners are no longer planning to grow their business. Among these owners, 42 per cent say they’re happy with the size the business is now; 36 per cent say they plan to close, sell, or transfer the business; and three per cent say there is not enough cash flow to expand. CIBC says letting go of a business can be made difficult by tax consequences. The biggest mistake owners make is not having these conversations early enough. It’s important to involve a team of experts including lawyers, accountants, and financial advisors to achieve a higher evaluation, maximize retirement income, and reduce the overall tax bill.
Greater Montreal Real Estate Market Still Hot
The real estate market in Greater Montreal in Quebec matched September's heat wave with sales reaching an eight-year high for the month, says the Greater Montreal Real Estate Board (GMREB). It says 2,893 residential sales were completed last month, a six per cent increase from a year ago. Four of the area's five metropolitan areas sustained growth, led by a 17-per-cent jump in sales in Laval, north of Montreal. Condominiums continued to drive sales volume, rising 11 per cent overall, including a 49 per cent jump in Laval. Condo sales have been growing steadily for months while selling times are down; the condo market has returned to a balanced market with 10 months of inventories. The average price of homes grew 2.6 per cent to $364,862, which compares to $775,546 in Greater Toronto in Ontario, also up 2.6 per cent from the prior year.
Merrett Receives PR Award
Drew Merrett, dealer-owner of Merrett Home Hardware Building Centre, was awarded the 16th annual ‘Paul Straus Public Relations Award’ during Home Hardware’s fall shareholders’ meeting. The award recognizes his commitment to public relations and community service in the city of Peterborough, ON. He was recognized for his store’s efforts in fundraising and dedication to social causes. Recently, Merrett was featured on Global News in Peterborough, ON, for saving a local kitten from a tree with the store’s hydraulic lift. The store also supports numerous charitable events including serving food every Wednesday at the Lighthouse Community Centre and participating in the ‘Walk a Mile in Her Shoes’ and ‘Run for Mental Health’ events.
Lowe’s Opens Second New Model Store
Lowe’s Canada has opened its second new model store in Canada in British Columbia. The Langford store was converted from a RONA Home and Garden and offers the “best of what both Lowe’s and RONA banners have to offer to create a new Lowe’s Big Box model,” says Guy Beaumier, interim executive vice-president, Lowe’s Canada Big Box Retail. The store underwent an extensive 16-week physical transformation from the former RONA, which involved construction, departmental sequencing of new racking and re-merchandising, branding, and IT conversion, as well as extensive training for associates focused on new product knowledge and customer service. It will offer a wider selection of seasonal products and new product categories including appliances and Lowe’s private label. It will also offer a broader fashion plumbing selection and an enhanced contractor experience. The first converted store is in Edmonton North, AB.
Hitachi Promotes Two
Joe Leffler has been promoted to senior vice-president of sales, marketing, and general management, with Hitachi Power Tools. He will also oversee Hitachi’s Canadian division. He previously served as vice-president sales and marketing. He joined Hitachi in 1994. Kristopher Miles has been promoted to vice-president of operations. Previously, he served as director of logistics and purchasing. He joined the company in 2016.
Richelieu Sales Increase
Richelieu Hardware Ltd. had consolidated sales of $253.2 million for the third quarter of 2017, an increase of 15 per cent compared to consolidated sales of $220.2 million in the third quarter of 2016. Sales for the quarter in the manufacturers market were $213.2 million compared with $186.8 million last year. Sales to hardware retailers and renovation superstores were $40 million, up by 19.8 per cent over the third quarter of 2016. In Canada, Richelieu recorded sales of $171.7 million, an increase of 17.5 per cent over the year-ago period. Third-quarter net earnings for the company were $18.3 million versus $17.5 million, a 4.9 per cent increase.