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BUSINESS
THE ADVOCATE Monday, May 30, 2016
Canadians changing travel plans LOW LOONIE SHIFTING CANADIAN TRAVEL FROM U.S. TO OTHER GLOBAL DESTINATIONS BY THE CANADIAN PRESS MONTREAL — Canadian travel to the United States hit a six-year low this winter as a weak loonie and lower airfares prompted more residents to visit other international destinations. Last year’s decrease of Canadian travellers to the U.S. continued in the first three months of 2016 as 4.38 million Canadian residents went across the border for at least one night, down 13 per cent from the same period in 2015 and matching a low set in 2010, according to data from Statistics Canada. While interest in the U.S. has waned, 3.8 million Canadians travelled to other international destinations, up 6.2 per cent over the previous year and 33 per cent since 2010. The low value of the loonie has also attracted more visitors to Canada. After holding steady for several years, American visits to Canada were up almost 20 per cent between January and March, while the number of visitors from other countries was up 10 per cent over 2015 and 26 per cent from 2010. The strong influx of visitors provided a boon to Canadian hotels, restaurants and car rental companies, said Robert Kokonis, president of airline consulting firm AirTrav Inc. When the Canadian dollar hovered around parity as late as 2013, U.S. travellers were pretty much no-shows in Canada, he said. “So we’ve gotten to the point where
Photo by THE CANADIAN PRESS
Canadian dollar coins, or Loonies, are displayed on a map of North America in this January 9, 2014, file photo in Montreal. Canadian travel to the U.S.A. hit a six-year low this winter as a weak loonie and lower airfares prompted more residents to visit other international destinations. we’re seeing Americans back in Canada, so that’s a nice reciprocal balance to the loss of Canadians not travelling across the border,” he said in an interview. The U.S. tourism sector has responded to the currency softness by offering deals to Canadians, including accepting the loonie at par to the U.S. dollar for some expenses. Border malls are also offering discounts. “When you have a 75-cent Canadian dollar, a lot of Canadians took a pass in 2015,” Kokonis said. The latest results reflected a continuing trend from 2015.
Nearly 21 million Canadian residents took overnight trips into the United States in 2015. That was down 10 per cent from 2014 and was the lowest number since 2010. The results exclude the 23.3 million Canadians who crossed the border by car for same-day trips, down 21.6 per cent from nearly 30 million a year earlier. The Canadian dollar hit its high in 2015 on Jan. 2 at 85.62 cents US, and sunk to 71.41 cents US on Dec. 18. Canadians travelling to other international destinations in 2015 grew
Japan shares G-7 push for inclusive growth with Asia, Africa BY THE ASSOCIATED PRESS NAGOYA, Japan — Japanese Prime Minister Shinzo Abe is sharing a push by the Group of Seven advanced industrial nations to promote inclusive growth across the globe in meetings with leaders of seven developing countries. The bilateral summit meetings with leaders of Bangladesh, Chad, Indonesia, Laos, Papua New Guinea, Sri Lanka and Vietnam in this central Japanese city on Saturday followed a gathering with G-7 leaders after their annual summit, which was held in a nearby seaside resort. Chad’s President Idriss Deby was representing the African Union at the meetings in Japan. At that session, the leaders agreed to promote infrastructure development to help boost growth, Japanese officials said. They also voiced their support for the G-7’s stance on the need for peacefully settling territorial disputes according to law — a reference to frustrations over China’s growing presence in areas of the South China Sea also claimed by its neighbours. Laos, Bangladesh and Papua New Guinea are among the poorest nations in Asia. Vietnam and Indonesia are two of the fastest-growing developing economies. During the summit, Abe expressed strong concern over slowdowns in China and some other emerging economies that have sapped global growth at a time when
about 10 per cent to reach 11.55 million. Meanwhile, 12.5 million Americans visited Canada in 2015, the highest level since 2008. An additional 5.3 million residents of other countries also visited the country. In addition to the impact from currency, Canadian airlines like Air Canada and WestJet, and tour operators like Sunwing, have been boosting their international capacity by adding seats to sun markets, adding additional farflung destinations and offering new service to London Gatwick.
FIVE THINGS TO WATCH Economic pulse-taking A key measure of the health of the Canadian economy is revealed Tuesday when Statistics Canada is out with first-quarter GDP results. On Friday, the federal statistical agency releases Canada’s international merchandise trade figures for April, another gauge of economic vitality.
Paris powwow The OECD Forum kicks off in the French capital on Tuesday. The two-day conference held by the economic thinktank will feature nearly 80 debates, presentations and other events on topics ranging from the future of work to integrating migrants.
eBay overview
Photo by THE ASSOCIATED PRESS
Japanese Prime Minister Shinzo Abe, right, poses with his Vietnamese counterpart Nguyen Xuan Phuc prior to their meeting at Abe’s official residence in Tokyo Saturday, May 28, 2016. The bilateral meeting followed a gathering with G-7 leaders after their annual summit in Shima, central Japan. Japan and European nations are struggling to keep their own recoveries on track. A more than 50 per cent plunge in commodity prices was a key signal of the risks to growth, Abe said. “What we are concerned about the most is contraction of the world economy,” Abe said Japan has pledged to increase its development assistance, help finance
an insurance fund for health emergencies in the developing world and to offer training to thousands of people in the developing world as part of its own contribution to bridging economic disparities. The G-7 meeting also endorsed an effort to help 500 million people in developing countries escape hunger and malnutrition by 2030.
Andrea Stairs, managing director of eBay Canada, will discuss Canada’s e-commerce landscape in Ottawa on Tuesday. eBay announced this month that its Canadian marketplace will no longer list items in U.S. dollars — only in Canadian currency. It had been the e-commerce giant’s only dual-currency marketplace.
HBC, meet the Netherlands Hudson’s Bay Company holds its annual meeting of shareholders on Friday in Toronto. HBC recently announced it will begin opening stores in the Netherlands next summer, with a flagship outlet planned for Amsterdam.
Trudeau on towns Prime Minister Justin Trudeau is scheduled to speak at the annual conference of the Federation of Canadian Municipalities on Friday in Winnipeg. The conference is expected to attract 1,500 municipal leaders.
Student debt can have far reaching consequences TALBOT BOGGS MONEYWISE Many Canadian students who have graduated this year with degrees and diplomas also will leave school with thousands of dollars of debt that may take them years to repay, impacting their adult years and their parents. Higher education is a costly pursuit in Canada that likely will get more expensive in the future. The total cost for an undergraduate university degree currently can exceed $80,000 and is expected to be more than $140,000 by the time a child born now is old enough to enrol. According to recent statistics, students who require a Canada student loan now graduate with an average debt of $28,000. With a youth unemployment rate of 13.4 per cent, many are having trouble finding jobs and either have to move back home with their parents or take on more debt to survive after graduation. The result of these factors is that many students are sinking further into
debt upon graduation and may even have to delay major life events such as buying a home, getting married and starting a family due to their high levels of debt. The impact of high student debt also can affect decisions and the lifestyle of their parents. A study by BMO Wealth Management has found that many parents are postponing their retirement to help support their adult children financially. One third of parents with children aged 18 to 34 would save less for retirement than they planned to support their children while 41 per cent are concerned their adult children have or will have financial problems caused by debt. Parents are willing to retire later than expected, save less for their retirement, have a less comfortable retirement, take on some of their children’s debt and even withdraw money from their retirement savings to help out their indebted offspring. “Many students are going to school to get a good education but they are coming out with debt and often are struggling to find jobs and make money to support themselves,” says Doug Jones, a licensed insolvency trustee with BDO Canada. “A lot of them are
being forced to move back in with their parents. We’re seeing this situation all the time today.” Part of the solution to the growing problem of student debt is good, pre-education financial planning. This could involve knowing how much your child’s chosen education will cost, working and saving for it beforehand and understanding the job prospects are after graduation. “We would encourage people to focus on budgeting sooner rather than later,” says Jones. Budgeting is key.” Parents and students alike also should investigate and take advantage of available government programs. Registered Education Savings Plans (RESPs) allow parents, guardians, grandparents, other relatives and friends to put up to $50,000 in a plan for each child who is enrolled in qualified educational programs. There is no annual contribution limit and the government will add a grant of up to a maximum of $7,200. Income and capital gains can be generated within an RESP through investment in a variety of options such as stocks, bonds, mutual funds, guaranteed investment certificates and grow tax free until the children named in the plan are ready to pay for their
post-secondary education. They only pay income tax on the gains earned by the plan and the grants as they are withdrawn, which usually is low because the income of most post-secondary students is very limited. The federal government also offers a student loan repayment assistance program which may help students manage their loans by reducing their monthly payments. It operates a national student loans service centre where students can go for information and help with their loans. As well, the Financial Consumer Agency of Canada has a lot of great advice and financial information for students and consumers in general. “If you access these resources and options and still are having trouble managing your debt then you may want to seek professional financial advice and help,” says Jones. “The sooner people plan for and manage education costs and borrowing the better.” Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors.