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Opinion  

B.C. retail spending continues to rise after December setback

Retail spending rebound

B.C. retail spending rebounded 4.4% in January after a December dip to $8.36 billion, marking its eighth increase in nine months.

Year-over-year sales rose to 15%. In contrast, national sales fell 1.1% from December and rose only 1.3% from a year ago. More stringent physical distancing restrictions in late 2020 directly affected retail activity in several provinces.

B.C. consumer spending picked up speed across store segments.

Sales at motor vehicle and parts dealers rose nearly 5% from December and 30% year-over-year, reflecting demand for private transportation amid the pandemic, low interest rates and high replacement demand.

Meanwhile, sales at electronics and appliance stores (up 43.9% year-over-year) and building material and gardening stores (up 50%) reflects the spillover from strong housing market conditions and renovation spending.

Higher gasoline prices lifted sales at gas stations.

Clothing retailers also saw monthly sales improve, but year-over-year sales activity remained 15% lower as work-from-home, and fewer social options curtailed demand.

The strong upward sales momentum bodes well for 2021 as the economy continues to recover.

Further improvement is expected for clothing retailers as more offices reopen and the pandemic wanes, while a hot housing market will keep demand for ancillary products elevated. That said, expect a rotation in demand and spending back towards retail services such as events and restaurants, while more dollars will leak out of the domestic economy as travel picks up.

B.C.’s housing market remained white hot in February. Multiple Listing Service sales rose 7.2% from January to a seasonally adjusted 12,930 units, marking a record high pace of activity.

Unadjusted February sales were the highest on record at 10,962 units, surging nearly 90% year-over-year and exceeding the 10-year same-month average by 77%.

Robust sales continued across the province, highlighted by strong sales gains in Fraser Valley markets, which rose nearly 15%, and the Interior markets of the Okanagan and surrounding areas (up 13%).

Moreover, sales more than doubled year-ago levels on Vancouver Island, excluding Victoria. •

Bryan Yu is chief economist at Central 1 Credit Union.



Opinion: Independent grocers are a dying breed

Indie grocers are dying

Most of us wouldn’t know if we were in an independently owned and operated grocery store unless a notice is posted somewhere as you enter the store or you ask someone.

Canada regularly loses an independent grocer these days Last week, we learned that Empire (Sobeys) would purchase one of Canada’s top premium independent grocers, Longo Brothers Fruit Markets, located in the greater Toronto area.

The $357-million deal allows Empire to immediately acquire 51 per cent of Longo’s and it will control all of the business in a few years. Longo’s operates 36 beautiful stores in southern Ontario.

Like most independent grocers, Longo’s was truly a family business. Three Longo brothers founded the company in 1956 and more than 25 family members across three generations continue to work in the company.

Canada is home to about 15,500 grocery stores. Less than 34 per cent are independently owned and operated, and that percentage is continuously shrinking. Independent grocers are known to offer something different to customers – products you wouldn’t find elsewhere.

The service is often highly personalized. Some managers know many of their customers on a first-name basis. The experience is often very different and no duplicates exist elsewhere.

Most Canadians wouldn’t know that a lot of the innovation we’ve seen in food retailing in Canada has come from independents.

Longo’s has been in the e-commerce game since 2004, when it acquired Grocery Gateway, at a time when few believed buying food online was even a thing. New products, novel store design – they have brought so much for years.

Farm Boy Markets and Longo’s are just two examples of how independent grocers have a different way of looking at things. It’s refreshing.

Loblaws, Sobeys and Metro are selling almost 75 per cent of all the retailed food in Canada right now, and that percentage has continued to rise. And Costco and Walmart sell a combined $32 billion in food to Canadians, so the pressures on independents are real.

To make matters worse, here’s another pressure point for independents:

Most major grocers are charging more fees to suppliers to finance key strategic initiatives. Just last week, we learned that Walmart plans a $500-million distribution facility to support its e-commerce platform. Some of the funding likely came from suppliers like Kraft Heinz Canada, PepsiCo Canada, Unilever Canada and Lactalis.

Independent grocers are slowly becoming less competitive, since they can’t bully their way through the supply chain as major grocers are doing. They just don’t have enough power and influence.

Empire is the only major grocer in the country to express concerns about extra fees imposed on food manufacturers. It’s affecting our food processing sector’s competitiveness, of course, and it’s affecting how independent grocers keep up with the rest of the field.

This is likely why the Longo family opted to sell. But also given that they had to choose one buyer, it had to be Empire, due to its stance on supply-chain bullying.

The good news is that major grocers are starting to value the uniqueness of some of these retailers.

Years ago, Loblaws destroyed Ontario-based Fortinos and completely changed the in-store experience. And Empire alienated some shoppers in Western Canada when it acquired Safeway in 2013. It scrapped the Safeway loyalty program, and many cherished products were either hard to find or disappeared completely.

All grocers have implemented such drastic changes, and massacred a brand or two in the past. At the time, it was all about consolidation and synergies, at all costs.

But in recent years, the approach appears to have changed. Loblaw’s acquisition of TNT, a unique retailer in Ontario serving the suburban Toronto market, was executed with few hiccups. Most shoppers at Ontario’s Farm Boy, acquired by Sobeys in 2018, have barely seen a difference.

And as in the Farm Boy deal, the Longo executive team will remain at the helm of the company and operate separately from the main company. Longo’s will likely become more profitable by using Sobey’s buying power across the supply chain.

In the meantime, Canadians should be concerned about the fate of our independent grocers. A federal committee is looking into the outrageous fees charged to suppliers by some grocers. For the sake of the independents, let’s hope the committee comes up with some good ideas when it tables its report in July.

Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.



Op-ed: B.C. Health critic and Kelowna MLA calls out province's vaccine rollout

Is this the best we can do?

Is this the COVID-19 vaccine roll-out we imagined?

I’m a dreamer, and I love good endings to movies and stories.

I dream of a health care system that’s accessible for everyone. Of a provincial response to the global pandemic that protects our most vulnerable loved ones, and a bright post-pandemic future where we leverage health sector innovations into the future.

But where are the innovations when it comes to the vaccine roll-out in B.C?

While I stand behind the continued hard work of provincial health officials and the public servants in the Ministry of Health, I still have questions about the COVID-19 vaccine roll-out and the seeming lack of preparation and clarity from John Horgan and the NDP government that has left people frustrated in the last few weeks.

A central point of concern has been the booking system for vaccine appointments, which this government has had a year to plan. We saw overwhelming frustration when phone lines were overwhelmed on the first day of public vaccine booking, with no online option available to the public. Health authorities across the province have an online booking option for staff vaccine registration available, so why wasn’t a universal online system extended to the public right away?

Health authorities across B.C. are using the same system as Fraser Health to offer online bookings for COVID-19 testing and medical lab appointments. They have used call centres and online registration software for years, yet, after a year of planning these systems weren’t implemented province-wide.

Now here we are, each day learning a new detail wasn’t planned in advance.

Where is the plan to empower our province’s highly trained community pharmacists to join the fight? Only in the last few weeks did we hear they had even been contacted, while other jurisdictions made their plans to engage pharmacists public months ago in their official vaccine rollout strategies.

Is this the best we could prepare for?

Now our province is fortunate to add the AstraZeneca vaccine to its inventory; a vaccine that’s more portable and can be stored in the fridges that pharmacists, family doctors, and nurse practitioners have in their clinics. Yet the province failed to quickly create a clear plan for how our essential workers should be prioritized. Then, they released a list that many feel is incomplete.

Again, is this the best we can do?

I can’t imagine the stress and anxiety our province’s essential workers who were excluded must feel right now. We continue to hear from many excluded workers who are wondering why they were left off the list. They deserve clarity and should have been engaged with from the start with a clear vaccination plan. This government should be honest with them.

We actually wrote to the Minister of Health to ask him to provide transportation workers like bus drivers, taxi drivers, short-haul truckers and longshore workers with greater clarity around why they were not prioritized for a vaccine. Why did this government not engage with these workers from the beginning?

So where do we go from here? I dream of a post-pandemic world where visionary, transformational leadership takes our health care system to the next level.

Dr. Bonnie Henry and the Ministry of Health have done a good job of weathering the pandemic through some of its toughest patches. Real leadership from John Horgan and the NDP, however, has been lacking and we are now paying the price. Our health system needs next-level leadership, not political inaction.

Renee Merrifield

Official Opposition Critic for Health

MLA for Kelowna-Mission



Opinion: Meeting Canada’s aggressive green targets a tall order

Targets a tall order

Building back ‘clean’ and ‘green’ means trillion of dollars of investment, and the electrification of many machines and activities that presently rely on fossil fuels – from personal vehicles and freight transportation to industrial processes. It’s not hard to understand the growing interest in electricity.

Globally, almost all jurisdictions that have made meaningful progress in reducing greenhouse gas emissions (GHGs) have done so by expanding and/or changing fuel sources in their electricity sectors.

The key trend is the switch from electricity systems oriented toward coal to ones more dependent on natural gas and renewable sources, such as hydro and wind. The pattern is the same no matter the country or region, including the United States, Germany and Ontario.

But Canada has limited scope to undertake this kind of fuel switching in the electricity sector, except in a couple of provinces that still use coal. Canadian electricity already is generated mostly from non-emitting sources. In 2019, four-fifths of our electricity came from a combination of hydroelectric and nuclear, along with small amounts from variable sources like wind.

Canada has benefited immensely from geography and a long history of investing in hydroelectricity – and, in Ontario, in nuclear. Indeed, Canada is one of only nine countries that gets a clear majority of its electricity from non-GHG-emitting sources.

Let’s say we want to add another 10 per cent of renewable generation to Canada’s existing electric system by 2030 – what would that entail?

It may not seem like much but it means adding more than the quantum of electricity produced in Manitoba. In a country that struggles to advance large projects, that’s a tall order.

Imagine having to permit, build and bring into production about 10 of B.C. Hydro’s Site C projects, or 2.5 of Ontario’s Darlington nuclear facilities, in less than a decade. The math is straightforward and forbidding. Then there’s the land and materials needed to develop renewable electricity projects that supply power on an intermittent basis. These requirements dwarf those for traditional non-emitting electricity projects, such as large hydro.

Why?

Because of less energy density and the lower reliability of variable renewable sources, the latter being very valuable to electricity consumers. Consumers want low-cost, on-demand electricity every minute of the day, not just when the wind blows or the sun shines. Thus, to ensure reliability, a mix of generation sources is necessary.

Now let’s look at the time frame. It’s only nine years to 2030, by which time the federal government has pledged to sharply reduce Canada’s GHG emissions. It takes five to 10 years (or more) to review, approve and construct any moderately-sized electricity project in Canada, not including the requirements imposed by provincial utility commissions mandated to protect consumers from dramatic electricity price increases.

To add 10 per cent of renewable generation to the existing Canadian system by 2030, we would want to have at least 10,000 megawatts of greenfield project proposals in the queue within the next year or two. Assuming private investors are willing to commit to large and risky capital projects, governments would need to streamline and shorten their approval and regulatory processes to expedite new development.

To state the obvious, speed and efficiency are not things that Canada’s lumbering and increasingly dysfunctional regulatory systems are known for.

Significantly expanding renewable power generation also raises complex issues of facility and infrastructure siting. While people want more GHG-free electricity, many would prefer that it be developed elsewhere.

But these kinds of projects must be located not too far from transmission infrastructure and, ideally, in reasonable proximity to large population centres. The land requirements for many renewable energy projects are substantial. It’s fair to say that citizens and policy-makers haven’t seriously considered the compromises and trade-offs associated with a major build-out of electricity production in Canada.

We agree with those who argue Canada must expand electricity from GHG-free sources to help meet the aggressive climate policy goals set by the federal government. But looking at the policy and regulatory landscape across the country in 2021, it’s difficult to see how this can be accomplished within the time frames stipulated by political leaders and legislators.

Jock Finlayson is executive vice-president of the Business Council of British Columbia. Denise Mullen is director of environment and sustainability at the Business Council of B.C
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Opinion: Odds are good that B.C. will benefit from Henry’s vaccination gambit

Odds on Dr. Henry's side

Look, the biggest risk Dr. Bonnie Henry is taking with our lives with her new vaccination plan is that we will be ready but not able to enjoy the rest of the continent as we wish for a while.

The province’s health officer’s intuitive but evidence-based initiative to prolong the interval between the first and second doses to four months to broaden the jab’s first reach is her defining moment in the recovery of our public and economic health.

We could look back with a simple slogan: She kept and made us safer faster.

If it is the wrong approach, it is a course that can be corrected by reducing the doses’ interval. If it works, well, it is inspired. Right now it appears a limited-downside, massive-upside proposition, a possible game-changer to effect important steps to normalcy.

That there are Henry’s doubters elsewhere is not new. They struggled from the outset to recognize the threat as she did, suppress the first wave as she did, provide a level of activity to avert the worst of the physical and mental health consequences as she did and avert a second lockdown as she did.

True, our wisest course of national action would have been a full-scale lockdown for about three months at the start of 2021. But we couldn’t do it – people wouldn’t stand for it, holidaying idiots in authority positions were thumbing their noses at basic boundaries. The next-best proposition was another innovative pandemic pivot.

Various vaccines emerged in recent months in historic record time, but they arrived with the asterisk of limiting the clinical trials’ duration to rush (but not hasten) to market. With lives at stake, there was not time to evaluate longer-term effects of the first dose. Instead, science focused on how soon a second dose could be administered. What researchers could not conclude before gaining approval to administer their discoveries was how long a second dose could wait.

Now we are getting an excellent handle on that a few months into vaccinations worldwide, and Henry has divined from the evidence in other jurisdictions that one dose can suffice in a pinch – and, no fault of hers, the limited vaccine supply in the early going in Canada is exactly that pinch.

Better, she thought, to get more people quite, quite safe than a smaller number fully, fully so. Her judgment was backed last week by the National Advisory Council on Immunization (NACI), which will stir other provinces to follow Henry’s path. Good, because the Canadian public health models of the months to come are not particularly assuring.

The national caseload is edging up and a third wave fuelled by the more virulent variants is more likely than not before we reach the vaccination level sufficient as a country to repel their consequences.

The ultramarathon of the pandemic now features a sprinting interval to jab as many British Columbians as quickly as possible to build the population’s immunity, and Henry has decided to take off the customized Fluevogs and put on the runners to get us across the line.

This judo manoeuvre on the variant could prove an earlier elixir to the economy. What it could do, too, is isolate us as we get into summer, so there would not be full economic restitution. The United States will be enjoying a lot more freedom than us, but our border will likely remain closed to needed tourists. Other Canadian provinces will lag, even if they’re now jumping in.

For our economy, it will mean another summer of hurt for the hospitality sector and others.

It was imprudent of Canada’s chief science advisor, Mona Nemer, to smear Henry’s decision so readily as a “population level experiment.” Those experiments were earlier conducted elsewhere in the United Kingdom, Israel and even in Quebec, which was not similarly chided. For all its slowness, Canada is getting to benefit from the experiences elsewhere, and the more nimble public health officers are converting the knowledge into action, not static deliberation and doubt. I will wager these are words Nemer will eat.

That being said, the variants remain the wild card, even if the U.K. has signalled they have reached peak fury. The longer the interval between doses, the more susceptible we may be to the consequences of their spread. America’s Dr. Anthony Fauci, the only other prominent health officer with the credibility of Henry, suggests there is a risk in that.

On balance, it makes the B.C. initiative feel assertive, courageous, but not reckless. We are used to being out front on issues. What we are likely to find, too, is that the supply of vaccines will grow quickly and that it will be possible to reduce the four-month interval. We may even meet the national September all-done deadline, albeit well behind our neighbours to the south.

For every pandemic threat to our safety now, science is getting stronger as a worthy adversary. We haven’t won the war on COVID-19, but the emerging wisdom is a great weapon. •

Kirk LaPointe is publisher and editor-in-chief of BIV and vice-president, editorial, of Glacier Media.



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