October 2015
ICCC Newsletter
Indo-Canada Chamber of Commerce 924 The East Mall, Etobicoke ON M9B 6K1
From the President’s desk SMEs represent 99.8% of all companies and employ 64% of private sector workers. They are the engine of our economy. The Business Development Bank of Canada (BDC) in its earlier avatar as the Federal Business Development Bank launched the small business week in 1979 in British Columbia. Since then, the event has been celebrated every October across Canada. The BDC continues to propel it forward.
Sanjay Makkar
Sanjay Makkar
This year, the theme is ‘Break down the barriers. Dare to grow’. Other organizations have taken up the cause with equal enthusiasm and vigor. In collaboration with the BDC, your chamber is also organizing a talk by Pierre Cléroux, Vice President, Research and Chief Economist, Business Development Bank of Canada, on a vital and interesting topic of Doing Business in Today’s Economy. Please register for the event, if you haven’t already done so. In this regard, I wish to draw your attention to an interesting report that our Chamber’s honorary senior advisor Ambassador Kant Bhargava (Retired) sent to me. The report prepared by Kack Mintz, a world-renowned tax policy expert, and commissioned by the Canadian Council of Chief Executives, states, “eliminating distortions in Canada’s business tax system would encourage small firms to grow, promote job creation and strengthen Canada’s ability to compete in the global economy. It further states that Canada’s current business tax system contains significant imbalances that favour some companies over others and discourage entrepreneurs from pursuing growth. By reforming the corporate tax system to make it more neutral, governments could give themselves room to lower the general business tax rate without reducing total tax revenue. You may download the report from the following link: Tax Reform On another note, as part of its Membership Augmentation Program, the Indo-Canada Chamber of Commerce (ICCC) is holding an Open House and Networking Event on Thursday October 15, 2015 at 5:30 pm – 9:30pm at the ICCC office. The ICCC’s new team of seeks your assistance to make this program a success. Talk to your friends, your business associates, your colleagues, your neighbors. Tell them about ICCC’s benefits, invite them to our Open House, and make them ICCC’s members. See you on October 15 Sanjay Makkar
Insight
RBI monetary stimulus boosts Indian economy and prospects for bonds and equities By Bhim D. Asdhir
In an astute move, Reserve Bank of India (RBI) Governor Raghuram Rajan cut interest rates by an unexpected 50 basis points on September 29, boosting the growth prospects of the Indian economy, which remains the fastest growing among major emerging markets; and providing indirect support the country’s bond and equity markets.
Mr. Bhim Asdhir with Mr. Raghuram Rajan
The cut follows three cuts of 25 basis points each earlier this year to sustain growth in the economy. Rajan, who has his finger on the pulse of the economy, evidently took advantage of the delay by the US Fed in raising interest rates, giving him room to make a higher than
expected cut. Incidentally, fears of a widely anticipated Fed rate cut suddenly abated bringing renewed calm to the market. From an investor standpoint, lower interest rates are positive for both bond prices and equity valuations. While Indian bond yields will fall due to the rate cut, investors will benefit from the appreciation in bond prices. This is due to the inverse relationship between interest rates and bond prices, that is, when interest rate falls, bond prices rises. On the other hand, corporations will benefit from lower carrying costs, leading to higher earnings and more attractive price/earnings ratios – making Indian equities a relatively good investment. In cutting rates, Rajan cited the need for more accommodative policy measures amidst a global economic slowdown. With the autonomy to maintain price stability in the economy, he noted that inflation is under control. The RBI has an inflation target of 4%, within a band of plus or minus two percentage points. Inflation currently stands at 3.66%, below the Central Bank’s target rate. Indian inflation has fallen largely due to lower oil prices and the monetary policies aimed at stimulation of the RBI. As one of the largest net importers of oil, India has benefited
substantially from the record low price of oil which has also contributed to its lower current account deficit. So far this year, investors in Indian currency and bonds have enjoyed relatively healthy returns and are expected to continue to do so. The Indian Rupee has remained relatively stable against a rising US dollar and has been one of the strongest emerging market currencies.
“Going forward, bond investors can expect further gains on the back of falling inflation, declining current amount deficit, sustained fiscal discipline and confidence over the government’s reform pipeline – in an environment of strong incremental demand for bonds by foreign investors. India’s low current account deficit is targeted at less than 1.3% of GDP for the current fiscal year.” Going forward, bond investors can expect further gains on the back of falling inflation, declining current account deficit, sustained fiscal discipline and confidence over the government’s reform pipeline – in an environment of strong incremental demand for bonds by foreign investors. India’s low current account deficit is targeted at less than 1.3% of GDP for the current fiscal year. Incidentally, the bond market is expected to be a major source of funding for development initiatives, especially infrastructure spending, as the country’s growth accelerates. India’s Fiscal 2016 budget projects capital expenditure to increase by 25.5%, comprising primarily of a 52% increase in spending on railways and a 174% increase in roads and bridges. Given the positive bond market environment, the private sector is expected to issue more corporate debt in 2015 to avoid more expensive bank financing. As a result, Indian corporate debt issuance this year is expected to surpass 2013 and 2014 levels. Ironically, last year, foreign investors invested more money in India’s bond market than they did in its equity market, in spite of the fact that the equity market was one of the best performing in the world. Recognizing the importance of bond financing, the RBI has been encouraging the deepening of the corporate bond market by urging large corporations to tap it for their working capital and short term loan needs. As a result, it is anticipated that more diverse
issuers will be approaching the debt capital markets for funding. This move should indirectly lead to the de-risking of the balance sheets of India's banks.
“The recent establishment of a roadmap by the RBI for foreign fixed income investors to increase their ownership of Government Securities, along with setting of limits for investments in State Development Loans, that is, bonds issued by regional governments/states in India will also provide a boost to the Indian bond market. It is expected that both these segments will offer substantial returns from current market levels and will therefore garner interest from investors across the globe.� The recent establishment of a roadmap by the RBI for foreign fixed income investors to increase their ownership of Government Securities, along with setting of limits for investments in State Development Loans, that is, bonds issued by regional governments/states in India will also provide a boost to the Indian bond market. It is expected that both these segments will offer substantial returns from current market levels and will therefore garner interest from investors across the globe. Lower interest rates are also positive for local business growth as well as consumer spending - which is expected to remain strong, supported by low household debt and a growing middle class. Altogether, accommodative monetary policies by the RBI have created a win-win situation for the economy, consumers, businesses, as well as investors.
Economic trends CAPP recommendations for Alberta & new discoveries in NF&L: Two important developments in the last week the oil and gas sector in Alberta and Newfoundland and Labrador are noteworthy. In Alberta, the oil and gas industry wants investment in emissions-busting technology to play a big role in Alberta's climate change strategy, the Calgary Herald reported. The Canadian Association of Petroleum Producers has made its submission that Alberta should set a target for technology investment over the next decade years and invest funds from its soon-to-be-hiked carbon levy to develop and deploy those technologies, the group said. In June, the province’s NDP government announced the carbon price for large industrial emitters that exceed their allotment — now at $15 a tonne — would be rising to $20 a tonne next year and to $30 a tonne in 2017. Between that change, and an increase in the corporate tax rate from 10 per cent to 12 per cent, CAPP has estimated the industry faces $800 million in higher cost over two years. The Atlantic province of Newfoundland and Labrador is likely to emerge as a global energy giant. The province’s premier Paul Davis announced last week that the results of a seismic study of 11 parcels of land up for bids in November show the potential for up to 12 billion barrels of oil, with a market value of up to $600 billion. The data also revealed the potential for 113 trillion cubic feet of gas. Davis described the potential as “enormous” and said the results show that Newfoundland and Labrador is on its way to becoming a global energy giant. Bad weather hits Ontario apple produce: Bad weather including a spring frost has ruined about half of Ontario’s apple crop. A killer May 22-23 frost combined with a cold winter and some untimely weather means it could be difficult for consumers to find Ontario apples in stores during the winter. The crop which will be down about $30 million was especially hard hit by frost in the Niagara region, eastern Ontario and the NorfolkSimcoe area. Charles Stevens, a Newcastle orchard owner who is chairman of the Ontario Apple Growers, said the Essex region was spared of the disaster many orchards elsewhere in Ontario are facing. A combination of dry weather and a frost with temperatures dipping to -3 C caused damage depending on the site and the apple variety and some orchards in Ontario don’t have any apples, he said. Harold Wagner of Wagner Orchards and Estate Winery in Lakeshore hopes to have pick-your-own apples until Thanksgiving. Last weekend, he said he had about 5,000 people so consumers interested in picking their own apples should get to a local orchard soon. In 2012, Ontario apple growers had the largest disaster in recent history when frost killed about 80 per cent of the crop. It’s only a few years after that disaster so it will be tough on the industry to be down half a crop this year. And Stevens hopes consumers do buy Ontario apples in stores this fall to help the 200 commercial growers in the province.
September 2015 Programs & Events September 10, 2015 Let's Talk Money - ICCC members learn about BDC's programs
From L to R: Sameer Sharma, Shivani Sharma Gupta, Nav Saini, Kanwar Dhanjal, Sanjay Makkar, Nina Jain, Arun Srivastava & Sanjay Brahmbhatt
Indo Canada Chamber of Commerce organised an interactive session with the Business Development Bank of Canada (BDC) on 10 Sept 2015 at the ICCC headquarters in Toronto. In a joint presentation Ms. Nav Saini, Senior Account Manager, and Nina Jain, Business Centre Manager, North York Business Centre, informed the participants comprising small entrepreneurs and professionals about the bouquet of BDC’s offerings to small businesses. “Ambitious and innovative entrepreneurs are the engine of our economy and it is our role, as Canada’s development bank, to help them succeed,” the presenters said.
September 16, 2015 Mind Body Soul – Open house
From L to R: Jagdish Bajaj, Shibani Sahney, Ginni Sethi, Sunita Mohan, Reena Sarin, Niharika Tugnait and Sanjay Makkar
The Women Entrepreneurs and Professionals (WEP) committee of the Indo Canada Chamber of Commerce (ICCC) organized an Open House and Networking session on Mind Body Soul at the ICCC headquarters on 16 September 2015. The program adopted a holistic approach to a stress free living by focusing on all the key aspects of nourishment – the mind, the body and the soul.
September 18, 2015 Collaborating on Infrastructure - ICCC's roundtable & reception for FICCI delegation
FICCI delegation with ICCC team and Consul General Akhilesh Mishra
Indo Canada Chamber of Commerce (ICCC) organized a roundtable and a business reception for the visiting Federation of Indian Chambers of Commerce and Industries (FICCI) delegation from India on 18 September 2015 at the Ontario Investment and Trade Centre in downtown Toronto. The ICCC shares with FICCI the objective of creating commercial and business opportunities for Canadian and Indian entrepreneurs, and to foster bilateral trade. To meet these objectives, both ICCC and FICCI periodically engage in trade promotion activities; the most common form being trade delegations that ICCC lead to India and FICCI brings to Canada. Over the last decade, the relations between ICCC and FICCI have intensified and the two Chambers have collaborated on several initiatives, the biggest one being the offshore Pravasi Bharatiya Divas in Toronto in 2011. The latest delegation, focusing on the infrastructure sector, was led by Mr. Prem Singh Meena, the Additional Secretary of Government of India’s Aviation sector, and comprised over 20 delegates from both the private and public sector companies, and members of FICCI. The focus of the visiting delegation was to explore partnerships in infrastructure financing, opportunities in planning design, engineering and consultancy, construction and engineering projects, public-private partnership project management, technical knowhow.
September 24, 2015 Pay It Forward ICCC’s board of directors and members of the chamber attended 3rd annual legal networking event. This event caters to various lawyers from large and small law firms, sole practitioners, politicians and corporations. Over the years, the event has attracted over 130 attendees along with various organizations. September 24, 2015 Drake’s Client Appreciation Event
ICCC’s board members attended the Drake’s Client appreciation event at First Canadian Place, Art Gallery Toronto. Mr. Makkar discussed to strengthen the Drake’s partnership with ICCC and how the chamber can be more helpful in promoting the drake’s HR solutions through intelligent help. September 28, 2015 Meeting with Kate Starkey, Trade Commissioner Mr. Sanjay Makkar, President ICCC had a successful meeting with Ms. Kate Starkey at the ICCC office. Mr. Makkar discussed the India Mission 2016 plans and possible support from the government in arranging the meetings and events for the chamber. Ms. Starkey lauded the ICCC efforts for promoting the Canada India commercial ties
and promised to extend all the possible support to help the ICCC’s India Mission through Canada’s trade offices in India. September 29, 2015 Joint Meeting with the Committees and board of directors.
ICCC President Mr. Makkar addressing the meeting
Indo Canada Chamber of Commerce organized a joint meeting between the board of directors and members of the different committees. The objective of the meeting was to create an inter-committee network to work together for achieving the mandate of the chamber. This is the first-ever such initiative ever undertaken by the ICCC leadership that is aimed at building synergies between the different committees and different directors handling different portfolios. “This meeting was necessary to ensure that we work as a team and not in silos,” President Makkar said.
September 30, 2015 Meeting with Greater Toronto Airport Authority, Pearson International Airport
Indo Canada Chamber of Commerce has a meeting with the Greater Toronto Airport Authority at Toronto Pearson airport. The GTAA’s focus is the continuous development of Toronto Pearson as one of the world’s great international airports. The GTAA leaders discussed the recently released economic impact study, which has a significant
implications and opportunities for the Indo Canadian community. Over 40,000 people come to work each and every day at Toronto Pearson International Airport, with employment incomes totaling $7 billion dollars. This makes Toronto Pearson one of the single largest employers in the GTA Region. They discussed the new strategic direction to make it the best airport in the world, and ensure to grow from 39 million to 60 million passengers by 2030.
Upcoming Events Mix & Mingle - Young Professionals & Entrepreneurs, 07 Oct 2015 e-Commerce: Mantra to succeed in online selling, 08 Oct 2015 ICCC Open House and Networking, 15 Oct 2015 Doing business in today’s economy, 28 Oct 2015 Annual Winter Gala, 27 Nov 2015 For details please see www.iccconline.org ICCC in news For advertisement in the newsletter Please contact Mr. Pawan Chankotra at iccc@iccconline.org, or by calling 416-224-0090 Become a Member Membership is open to any person who is in agreement with the objectives of the IndoCanada Chamber of Commerce. The present membership represents a wide range of industries and professions. The benefits of joining the ICCC include:
Professional and personal development through business and social networking Exposure to business and professional opportunities in Canada, India and around the world Tickets to events at discounted member rates Invitations to selected free business programs An annual magazine Annual membership directory Opportunity to serve on various committees and be elected to the Board of Directors Benefits through the Chamber's Affinity Program
To join ICCC as member please click here Know your Organization Indo-Canada Chamber of Commerce is a 38-year-old organization with twin objectives of fostering bilateral trade between Canada and India and creating entrepreneurial and
professional opportunities for Indo-Canadians. It is run by an elected board with the help of various committees involving member. To know more about your organization, please visit: www.iccconline.org Suggestions Your board is committed to transform ICCC into a member-friendly, open, transparent, and truly a business organization working to achieve its mission and vision. The board is here to steer the august body in the direction provided by articles and bylaws and ensuring that interest of various stakeholders is protected. Board invites your suggestions and opinions regarding future events, newsletter content, and ask you to get engaged more and more and participate in Chamber events. You are the true ambassador of Chamber and your board is working for you in. Please feel free in contacting any board member. Please feel free in sending your suggestions and recommendations at: president@iccconline.org or iccc@iccconline.org. Follow us on social media: Facebook
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