June 18, 2019
Homebuying Incentive Launched
The government of Canada has introduced a tool to help middle class Canadians buy their first home. Scheduled to launch in September, the ‘First-time Home Buyer Incentive’ will reduce monthly mortgage payments required for first-time homebuyers without increasing the amount they need to save for a downpayment. The program complements other measures taken in 'Budget 2019' to support first time homebuyers with their downpayment such as an increased RRSP withdrawal limit from $25,000 to $30,000. The government has allocated $1.25 billion over three years for this program. The incentive will be available to first-time homebuyers with qualified annual household incomes up to $120,000. 'Budget 2019' also previewed the ‘Shared Equity Mortgage Provider Fund,’ a five-year, $100-million lending fund to assist providers of shared equity mortgages to help eligible Canadians achieve affordable homeownership. This will support an alternative homeownership model targeted at first-time homebuyers, help attract new providers of shared equity mortgages, and encourage additional housing supply. The fund will be launched July 31 and will be administered by the Canadian Mortgage and Housing Corporation (CMHC).
U.S. Retail Sales Show Consumer Resilience
U.S. retail sales rose 0.5 per cent in May seasonally adjusted from April and up 3.2 per cent unadjusted year-over-year, says the National Retail Federation (NRF). The numbers exclude automobile dealers, gasoline stations, and restaurants. Revisions to April monthly data were significant with retail sales reversing a loss of 0.2 per cent monthly change to a gain of 0.3 per cent. NRF says retail sales data has been unusually choppy given the economic environment in recent months which includes the partial government shutdown, volatile energy prices, and roller coaster equity markets, notwithstanding escalating trade tensions. May’s retail sales increases were broad based, with nearly all categories showing gains, with the only decline coming from food and beverage stores. As of May, the three-month moving average was up 3.3 per cent over the same period a year ago, compared with a gain of 2.9 per cent in April. May’s results build on a revised gain of 0.3 percent month-over-month and a revised 5.9 per cent gain year-over-year in April. Building materials and garden supply stores were down 1.4 per cent year-over-year, but up 0.1 per cent month-over-month seasonally adjusted.
RONA Welcomes Affiliate Stores In Quebec Region
Lowe’s Canada welcomes the Placide Martineau family business into its RONA affiliated dealer network. Founded in 1959 by Placide Martineau, the business is now owned by the founder’s six sons: Christian, François, Irené, Jean-Marc, Mario, and Michel Martineau. In addition to their decision to join RONA, they announced earlier this month the acquisition of a new point of sale in Saint-Apollinaire, QC, which is already affiliated with the RONA banner. This brings to four the total number of stores owned by the family business in the Centre-du-Quebec region. With the acquisition of this new store and the conversion of the three existing stores to the RONA banner, the Placide Martineau company, which is celebrating its 60th anniversary this year, is entering a new phase of development. The stores will offer new product categories as well as a wider assortment of items. Customers can also shop online at the RONA website and take advantage of the Click and Collect service that will be offered in all of the Pacide Martineau stores starting this summer.
Benjamin Moore Red Deer Offers Sansin Wood Finishes
Benjamin Moore Red Deer in Red Deer, AB, now carries Sansin Corporation's line of exterior wood finishes. To showcase the products, Sansin is hosting a product demonstration at the store on June 22, from 10 a.m. to 2 p.m. A wood finish advisor will be on hand to offer tips on how to apply Sansin’s water-borne, penetrating products on decks, furniture, siding, and other exterior wood surfaces. There will also be an opportunity for DIYers and contractors to ask questions about specific projects. Hors d’oeuvres, refreshments, and gift bags will be provided. Owners Rick and Andrew Wiebe, Shelley Mueller, and Marshall Wideman says the product has done well at other locations they own in Lethbridge, Medicine Hat, Wetaskiwin, and Camrose, AB.
West Fraser Plans Permanent Production Reductions
West Fraser plans to permanently close its Chasm lumber mill and eliminate the third shift from its 100 Mile House lumber mill in British Columbia as of the third quarter of 2019. The decision is the result of timber supply constraints owing to BC’s devastating Mountain Pine Beetle infestation, recent record wildfires, price declines in lumber markets, and high saw log costs. As a result of reduced harvesting levels set by the chief forester of BC, there is insufficient timber supply to support the current lumber production capacity of the lumber mills in these locations. Lumber production is anticipated to be permanently reduced by approximately 314 million board feet.
Dörken Launches Four-layer WRB
Dörken Systems Inc. has launched DELTA-STRATUS SA, a self-adhering vapour-permeable air- and water-resistive barrier (WRB) with a fourth layer for added UV protection. The company says exposure to UV light begins to have an impact on building materials from the minute they are installed until the time the building is covered with exterior cladding. The damage happens at the molecular level, so its effects may not be felt until well after the exposure has happened and long after the wall has been completely enclosed. DELTA-STRATUS SA is engineered with two outer layers, made up of high-strength, spun-bonded polypropylene fabric, which are thermally bonded to a highly vapour-permeable, watertight polymeric middle layer. The fourth layer is a UV-resistant acrylic coating.
June 17, 2019
May Home Sales Back Up
Home sales rose by 1.9 per cent in May. Together with monthly gains in March and April, activity in May reached the highest level since January 2018, says the Canadian Real Estate Association (CREA). While sales stood 8.9 per cent above the six-year low reached in February, this latest increase has only just returned levels to their historical average. While May sales were only up in half of all local markets, that list included almost all large markets, led by gains in both the Greater Vancouver, BC, (GVA) and Greater Toronto, ON, (GTA) areas. Actual (not seasonally adjusted) sales activity was up 6.7 per cent compared to May 2018, marking the largest year-over-year gain recorded since the summer of 2016. The increase returned sales in line with the 10-year average for the month of May. While about two-thirds of local markets posted year-over-year gains for the month, the national increase was dominated by improving sales trends in the GTA, which accounted for close to half of the overall increase. The number of newly-listed homes edged back by 1.2 per cent in May. With sales up and new listings down, the national sales-to-new listings ratio tightened to 57.4 per cent in May compared to 55.7 per cent in April. That said, the measure is still within close reach of its long-term average of 53.5 per cent.
AI-powered Solutions Will Provide Growth Opportunities
Home and building technology companies are increasingly embedding artificial intelligence (AI) and machine learning algorithms into products to facilitate self-learning behaviour and stay ahead of the competition, says data from Frost & Sullivan. It’s report, ‘Global Homes and Buildings Outlook, 2019,’ says these technologies are expected to enable building optimization capabilities, which are key differentiators. Additional features that support sustainability and customer-centric solutions will help entrants compete against incumbents and, overall, drive the $1,249.95 billion industry towards $1,301.44 billion in 2019. There are opportunities in key markets for the systems of lighting, energy management, automation, facility management, smart homes, fire safety, and security. Numerous smart home devices will be integrated with voice command control in 2019. Smart home security providers will lay emphasis on the comfort of homeowners in addition to improving home security by offering multi-functional products. To make homes truly connected and energy efficient, homes and buildings companies need to establish partnerships with utilities, energy consultants, and retailers, says the report.
CRAFTSMAN Launches Pro Series Tape Measures
CRAFTSMAN has launched the Pro-13 tape measure. This heavy-duty professional grade tape has 13 feet of standout and features a Mylar blade coating, BladeArmor hook protection, and extensive rubber overmold. It also includes a belt clip, blade lock, and a magnetic end hook. The tape is 1.25-inches wide, 25-feet long, and has 16-inch stud markings.
More B.C. Mill Curtailments Ahead
Canfor Pulp Products Inc. will temporarily curtail operations at its BCTMP mill in Taylor, BC, from June 29 through August 5, due to a combination of weaker market conditions and short-term fibre constraints resulting from industrywide sawmill curtailments in the BC Interior. As well, Norbord Inc. will indefinitely curtail production at its oriented strand board (OSB) mill in 100 Mile House, BC, starting in August. The region in which the mill is located has been under mounting wood supply pressure for the past decade as a result of the mountain pine beetle epidemic. This challenge has been more recently exacerbated by the significant wildfires that the province of British Columbia experienced in the summers of both 2017 and 2018. The resulting wood supply shortage and high wood prices do not support the economic operation of the mill at this time.
People Wish They Took More Baths
Half of North Americans take a bath at least once per week, and over half (53 per cent) wish they took more baths than they currently do, says a study by Bath Fitter. The report says a common complaint is a lack of time in a busy schedule. However, nearly a quarter say a poor bath environment – consisting of the tub being too small, dirty, or poorly grouted – was what curbed the craving for more baths. Bath Fitter, which commissioned the survey for its 35th anniversary, says tub-over-tub installation offers one solution for people who have a poor bath environment.
June 14, 2019
Businesses Concerned How To Fund Pharmacare
While small business owners are open to the idea of a national single-payer pharmacare system in Canada, they strongly oppose funding it through payroll taxes or a GST increase, says the Canadian Federation of Independent Business (CFIB). Overall, 47 per cent of business owners support the introduction of a pharmacare system, while 27 per cent are opposed. Eighty-five per cent of small business owners who support the implementation of a pharmacare plan are opposed to funding it through a GST increase, while 72 per cent oppose funding it through payroll taxes and 72 per cent oppose funding it through increases in personal income taxes. Most (84 per cent) business owners agree that the plan should be funded through cost savings from negotiating lower drug prices (84 per cent) and by reallocating funds by cutting existing spending (72 per cent). The Advisory Council on the Implementation of National Pharmacare estimates that the plan would come at a cost of $15.3 billion by 2027, when fully phased in.
Canadian Businesses Investing In AI
Canadian businesses are focusing on information and technology, with a particularly strong focus on artificial intelligence (AI), says a survey by Gartner. Canada’s average IT budget jumped from 1.3 per cent in 2018 to two per cent in 2019, which was higher growth than the year prior. The global average IT budget experienced about a three per cent increase. The survey says Canada is increasing its spending in business intelligence and data analytics, cybersecurity, and cloud services. However, Canadian businesses are planning to spend much more on AI. In 2018, only two per cent of Canadian businesses planned to increase investment in AI. In 2019, that figure is 24 per cent. The data analytics category has been the perennial top technology on the list of game-changer technologies but, this year, the AI/machine learning (ML) category has superseded it. Data analytics and cloud were tied for second among game-changer technologies in Canadian organizations.
EAB Exchange-A-Blade Joins Well Made Here Program
Power tool accessory manufacturer EAB Exchange-A-Blade has joined the ‘Well Made Here/Bien fait ici’ program, which promotes the purchase of quality building materials and other items manufactured in Canada. “We are very proud of our commitment to sustainable manufacturing and re-manufacturing while focusing on local production, supporting the local economy and creating jobs in Canada,” says Danny Wight, vice-president of sales and marketing. “We are positive that our partnership with the Well Made Here program will help us share our vision while increasing the awareness of Canadian quality products.”
RPM Acquires Joint Sealant Manufacturer
RPM International Inc.’s Tremco business has acquired Schul International Co., LLC, a manufacturer of joint sealants for commercial construction and Willseal LLC, a business that markets and sells Schul products. Schul’s product line primarily consists of pre-compressed, self-expanding foam tapes which are used for sealing vertical and horizontal joints in applications that include window seals, precast concrete, modular construction, and concrete façade restoration. They are sold under the Sealtite and Willseal brands. The brands will be integrated into RPM’s Tremco commercial sealants and waterproofing business, which specializes in the manufacture of sealants and waterproofing products for commercial, residential, industrial, and infrastructure markets.
LP To Curtail Fort St. John OSB Production
Louisiana-Pacific Corporation (LP) will indefinitely curtail production of oriented strand board (OSB) at its Peace Valley facility in Fort St. John, British Columbia, beginning early in the third quarter. "Despite efforts by our Peace Valley team to reduce costs over the past several months, this decision is necessary to support the optimization of our OSB business in challenging market conditions,” says Jason Ringblom, executive vice-president for OSB at LP. “Declining housing starts, high wood costs, and associated cost pressures require us to take this action that aligns with our performance driven strategy. This decision ensures that LP is efficiently balancing our commodity OSB production with our customer demand and improving the overall competitiveness of our OSB business. Going forward, we will leverage our strong manufacturing footprint across Canada and the U.S. to meet the needs of our valued customers.” The Peace Valley OSB mill has a stated annual capacity of 800 million square feet.
Dollarama Sales Strong
Dollarama Inc. had sales of $828 million for the first quarter of its fiscal 2020 year, an increase of 9.5 per cent over sales of $756.1 million in the first quarter of its 2019 year. Comparable store sales grew 5.8 per cent in the quarter, up from growth of 2.6 per cent in the year-ago period. Gross margin was 42.1 per cent of sales compared to 43.8 per cent of sales. Net earnings increased to $103.5 million in the first quarter, compared to $101.5 million last year.
June 13, 2019
Vancouver Home Sales Down
A total of 2,638 residential sales were completed in Metro Vancouver, BC, in May, a 6.9 per cent decrease over sales in May of 2018, says the Real Estate Board of Greater Vancouver (REBGV). While lower than last year, the number of homes sold was up 44.2 per cent over April. There were 5,861 detached, attached, and apartment properties listed for sale in Metro Vancouver in May, an 8.1 per cent decrease compared to May 2018 and 2.1 per cent increase compared to April. Sales of apartment homes increased 12.9 per cent year-over-year, while sales of detached homes decreased 1.4 per cent and attached homes increased 0.6 per cent.
Job Vacancies Rate Sets New Record
Canada's private sector job vacancy rate advanced again in the first quarter of the year, reaching 3.3 per cent, up 0.1 per cent from the previous quarter, says the Canadian Federation of Independent Business (CFIB) ‘Help Wanted’ report. In total, 435,000 jobs sat vacant for at least four months during the first quarter of 2019. “Employers in Quebec, British Columbia, and Ontario are having a harder time finding workers, especially in the smallest businesses,” says Ted Mallett, vice-president and chief economist at CFIB. Construction sector vacancies are substantially higher than average, reaching 4.9 per cent in the quarter and equaling pre-financial crisis levels of 2007. Retail reached 2.8 per cent, fairly flat from 2.7 per cent in the previous quarter. Vacancy rates in wholesale and manufacturing also remained mostly flat at three per cent and 2.9 per cent, respectively.
Voice Commerce Gains Adoption
Almost half of all consumers who regularly use voice assistants like Siri and Alexa have shopped via the medium, says data from digital commerce consulting firm SUMO Heavy. Voice commerce remains a nascent retail channel, but the data suggests voice-assisted shopping will quickly increase as voice assistants gain wider adoption among consumers. While voice assistant adoption is still in its early stages, consumers are becoming more accustomed to the technology as it becomes commonplace in connected devices such as smart speakers, wearables, and in-car entertainment systems. However, 49 per cent of consumers still prefer to interact with voice assistants via their smartphones which offer the lowest barrier to entry. Thirty-five per cent of consumers own a smart speaker and the vast majority of them use voice assistants at least once a week. Yet, most consumers have yet to try voice shopping. Just under one in five consumers have shopped using a voice assistant, but 42 per cent of frequent voice assistant users have shopped via the medium.
Western Forest Products Curtails Production
Western Forest Products Inc. will temporarily curtail production at three of its British Columbia sawmills to align production volumes to match current customer demand. The company will curtail its Duke Point sawmill for two weeks and its Saltair sawmill for one week in June. It will also reduce operating levels from 120 hours per week to 80 hours per week at its Chemainus sawmill. The curtailments have been scheduled due to challenging market conditions and will reduce production by approximately 15 million board feet. Western has an annual lumber capacity in excess of 1.1 billion board feet.
AEP Signs Supply Agreement For Five Facilities
Atlas Engineered Products (AEP) has completed a guaranteed lumber supply agreement for five of its operating facilities. The agreement is expected to result in cost savings of up to 14.7 per cent per facility depending on plant location and potentially result in between $750,000 and $1 million in additional cash flow for the company due to the favourable consignment terms. “This agreement, with an experienced private company with operations across Canada and the western U.S., is part of AEP's strategic plan to capitalize on the efficiencies of consolidating the engineered wood products industry,” says Dirk Maritz, CEO of AEP. “All of our current facilities in British Columbia, Manitoba, and Ontario will benefit from this supply certainty and cost savings.” He says that in addition to the immediate bottom line benefits, the guaranteed lead times, re-order, and delivery elements of the agreement will make a significant impact on client satisfaction and project schedules.
HD Supply Has Strong Sales
Industrial distributor HD Supply Holdings, Inc. had net sales of $1.5 billion for the first quarter of its fiscal 2019, an increase of 7.5 per cent compared to the first quarter of fiscal 2018. Organic sales growth for the quarter was 5.8 per cent. Gross profit increased six per cent to $585 million for the first quarter, up from $552 million in the year-ago period. Gross profit was 39.2 per cent of net sales, down approximately 50 basis points from 39.7 per cent last year. Net income increased 20.2 per cent to $107 million and adjusted EBITDA increased 6.8 per cent to $203 compared to the first quarter of 2018. Net sales for the facilities maintenance segment increased 6.8 per cent year-over-year and net sales for the construction and industrial segment increased 8.3 per cent.
June 12, 2019
Housing Starts Trend Decreases
The trend in housing starts was 201,983 units in May, compared to 205,717 units in April, says the Canada Mortgage and Housing Corporation (CMHC). This trend measure is a six-month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts. The decrease is a result of continuing decline in the trend for single starts as well as a decline in the trend of multi-unit starts that follows gains in this segment in recent months in urban areas. The Vancouver, BC, census metropolitan area (CMA) had a strong increase in housing starts, while Calgary, AB, starts trended lower in May. Edmonton, AB, housing starts also trended lower as did starts in Toronto, ON. Ottawa, ON, and Montreal, QC, housing starts trended higher in May, while starts in Halifax, NS, continue to trend upwards with a strong increase of 48 per cent in May. PEI starts were 60 per cent higher in May. For Canada overall, housing starts were down 13 per cent compared to April.
Cybersecurity Overlapping Retail Loss Prevention Efforts
Theft, fraud, and losses from other retail ‘shrink’ in the U.S. totaled $50.6 billion in 2018, up from $46.8 billion the year before as industry security executives say there is a growing overlap between loss prevention and cybersecurity efforts, says the annual ‘National Retail Security Survey’ by the National Retail Federation (NRF) and the University of Florida. Shrink averaged 1.38 per cent of sales during 2018, up slightly from 1.33 per cent in 2017, but has held steady around 1.4 per cent over the past few years. With the percentage largely unchanged, the increase in the dollar amount is due primarily to growth in retail sales. The largest losses per incident came from robberies, followed by employee theft and shoplifting/organized retail crime. While 43 per cent of retailers say the largest increase in fraud is occurring in stores, 30 per cent say it is happening online and 22 per cent say it is coming in multichannel sales, such as those where the purchase is made online, but the merchandise is picked up in store. Of challenges that have grown in priority for loss prevention teams over the past five years, cyber-related incidents are the top issue, followed by eCommerce crimes and return fraud.
Canada Appeals WTO Ruling
Canada has appealed against a World Trade Organization (WTO) panel ruling in a case it lost in April that would allow the U.S. to use ‘zeroing’ to calculate anti-dumping tariffs on lumber, says Reuters. The WTO ruling approved a long-outlawed U.S. trade policy when a panel said Washington’s use of ‘zeroing’ to calculate anti-dumping tariffs was permissible in the lumber case brought in 2017. Zeroing calculates tariffs based on whether the domestic price of a product exceeds its U.S. import price after it is adjusted for transportation and handling costs. In the past, the WTO condemned the process. The dispute over softwood lumber tariffs has been going on for more than 30 years.
Canfor Significantly Curtailing B.C. Production Capacity
Canfor Corporation will be curtailing operations at all British Columbia sawmills, except WynnWood. The majority of mills will be curtailed for two weeks or the equivalent, with extended curtailments of four weeks at Houston and Plateau and six weeks at Mackenzie. The curtailments are scheduled to run from June 17 through July 26. The curtailments are due to very poor lumber markets and the high cost of fibre, which are making the operating conditions in British Columbia uneconomic. The curtailments will reduce Canfor’s production output by approximately 200 million board feet. Following the previously announced closure of Vavenby in July, Canfor will have 12 sawmills in Canada, with total annual capacity of approximately 3.55 billion board feet.
Royal Completes DaVinci Acquisition
Royal Building Products (USA), Inc. has completed its acquisition of DaVinci Roofscapes, a supplier of composite roofing and siding. DaVinci’s products will continue to be sold under the DaVinci brand. These products complement the existing Royal products including Celect, Zuri, and Cedar Renditions.
EAB Adds Territory Managers
Heather Rodman is territory manager for Sudbury, ON, and northern Ontario with EAB EXCHANGE-A-BLADE. She has over 20 years of experience in outside sales in the consumer goods retail industry. Gerry Deagnon is territory manager for southern Alberta and the Kootenays, BC. He brings 22 years of experience in power tools and power tool accessory sales.