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Canadian Federal Budget Passed Last Week, Industry Reacts

Canada announced its federal budget on April 12, which included highlights for small-business owners. According to the Ottawa Globe and Mail, among them were research tax credits, the extension of a hiring credit and promises to reform processes for immigration and temporary foreign worker programs.

Within the industry, however, the pressure from the economic downturn and government overspending remains significant. "I believe the government still has an obligation to demonstrate restraint in its spending practices," says Carmen King, owner and president of Liberty Promo (asi/253767). "Businesses aren't running into major deficits or they wouldn't be viable. But for some reason our government is not held accountable to the same standards. This is the problem."

Mark Trotzuk, president of Boardroom ECO Apparel (asi/40705) in Vancouver, says any relief helps small businesses, including the extension of the $1,000 credit against increased employment insurance premiums. "Minimum wages have gone up, and it's just too expensive to hire," he says. "We need incentives like this credit, because small businesses in particular can't withstand price increases right now. We're just trying to figure out where we can squeeze out more money."

Catherine Graham, managing director and co-owner of Rightsleeve (asi/308922) in Toronto, says she supports extension of the hiring credit because it helped the company employ people in the past year. In addition, Graham believes that the government's relationship with small businesses has to improve. "They could be doing more to help," she says. "All of the remittance requirements take up a significant amount of time to keep on top of. Finding ways to simplify, including digital options, would help remove the reporting burden."

Meanwhile, Graham is careful about putting any real trust in the government's promises to streamline and expedite. "A lot of programs end up being structured in such a way that the requirements make them not worth the hassle," she says. She cites a recent example in which Rightsleeve applied for a government-guaranteed small-business loan. "However, the covenants and limitations were going to be so onerous that we decided to go with a traditional bank loan instead," she says. "The benefit of the reduced rate was quickly going to be lost with all the additional reporting and paperwork."

Says King: "There is so much red tape and restriction that it actually costs money to save money. A whole new industry was created to police the integrity of the citizens applying for the grants. It's always a back-handed gift with the CDN government. We entrepreneurs have to create our own opportunity; we can't wait around for government incentives."

As for the budget's creation of a $400 million fund to help increase private-sector investment in start-up companies, Trotzuk is cautiously optimistic. "It's often tough right now to think about what I could invest in to best grow my business," he says. "There aren't any real signs that the economy is coming around, which needs to happen for people to invest in companies."

Trotzuk and Graham agree that a more efficient process for immigrants and temporary foreign worker applications would go a long way to decrease Canada's labor shortage. "We're trying to hire an immigrant software developer because we can't find the skill set we need locally," says Graham. "The process of proving to the government that we need to hire this person requires reams of paperwork and months of waiting, which is costing us productivity. It should be as simple as demonstrating that we've had the job posted for three months and have not received any qualified applicants locally."

Trotzuk, meanwhile, is looking for relief anywhere he can find it. "Costs have gone up; minimum wage has gone up. We're uncompetitive as a country," he says. "Companies have shipped jobs elsewhere because it's cheaper, and then they just import everything. We need an equal playing field so that we can compete with other countries. Anything the government can do to help small businesses helps us."

Bank of Canada's Carney Encourages Companies to Look to Emerging Markets

On April 2, in a Chamber of Commerce address, Bank of Canada governor Mark Carney recommended that Canadian businesses look to emerging markets for growth, as reported by Canada Newswire. According to Excel Funds Management Inc., Canada's only mutual fund provider focused exclusively on emerging markets, these fast-growing economies have a rising middle class supported by increasing disposable incomes.

Across the BRIC nations, the population is expected to reach 800 million by 2015. India and China, considered the two largest emerging markets, grow by approximately 70 million people each year and make up a large portion of the global demand for consumer goods.

"Since the recession, these economies have accounted for roughly two-thirds of global economic growth and one-half of the growth in global imports," Carney said. "China and India are housing the equivalent of the entire population of Canada every 18 months."

However, reaction to Carney's urging is mixed among suppliers and distributors in the ad specialty industry. "I have no plans at all for doing business in these markets at this time," says Mark Eckebrecht, president of Advertech Group Ltd. (asi/109575). "I have a close family friend in the business in Mexico City who finds the market very unpredictable, and we both agree that even though Brazil looks tempting, we would both rather stay on the sidelines for now and play it safe."

Meanwhile, Steve Levschuk, president & CEO of Talbot Promo (asi/341500), says his suppliers are probably looking into emerging markets for growth. "I'm sure they have a keen interest in these markets," he says. "As they find new and different products and/or ideas for us to bring to market, I believe the opportunity for growth could be substantial."

Brian Starke, a partner at Bravo Awards, Inc. (asi/41638), sells recognition, which is mainly a North American market. "Recognition doesn't play a role in the corporate world in Europe, and in Asia they sell it domestically, if at all," he says. "We won't sell to markets that don't use recognition in their corporate worlds. We design and manufacture in Canada, but we do play the commodity game with china and crystal from Asia, which makes up 90% of the market."

Starke adds that, because Asian companies manufacture and sell these commodities domestically, it wouldn't make much sense to ship items back to them at a higher price. Instead, Starke sees potential in emerging markets for big companies that deal in natural resources, including oil, gas, lumber and a host of minerals. "Home construction overseas would be a great emerging market endeavor for Canada," he says. "My initial reaction when I heard about Mark Carney's address was, ‘This is great for big businesses, because we're an export country.' His is a completely accurate statement ... for resource industries. But he won't say that; he won't say, ‘This is great for some of you, and for the rest of you, unfortunately, it's not so great.' We source from those emerging markets locations to get a cheaper price, so his recommendation really doesn't apply much to our industry, especially recognition programs."

Eckebrecht is tentative about these markets in part because he is not familiar with their customs and ways of doing business. "You need trusted and informed contacts who understand and are actually working in these markets and are prepared to work on your behalf," he says. "The Canadian government has Trade Missions to many of these countries as well as consulates where businesspeople can get assistance. However, the staffs have been cut back drastically over the past few years, and unless you're ‘connected,' don't expect much help."

Eckebrecht is also concerned about currency instability across the globe. "I have seen the Canadian (and U.S.) dollar rise and fall over two cents in a given trading day numerous times in the past year," he says. "Even the commodities markets make it very difficult to project what next week holds for us, let alone next month or next year."

Overseas Slaying Could Disrupt Apparel Industry

The recent murder of a workers' rights activist in Bangladesh could lead to increased labor violence in the Asian country, potentially upsetting apparel manufacturing in the region, analysts warn. Aminul Islam - known for his work on behalf of mistreated apparel workers - was found dead 60 miles north of Dhaka, his body showing signs of torture.

"We are aware of no recent case of a trade unionist being murdered in Bangladesh," Scott Nova, executive director of the Worker Rights Consortium, told The New York Times. "There have been unionists killed in clashes with the police in the midst of protests, but no recent case of assassination. This represents a deterioration of an already-grim labor rights situation in the country."

Islam, the founder of the Bangladeshi Center for Worker Solidarity, frequently documented labor violations in Bangladesh and campaigned to have the country's minimum wage raised from 3,000 taka a month - about $36 - to 5,000 taka. The movement led by Islam was not well-received by the Bangladeshi government and apparel factory owners. In 2010, Islam claimed he was detained and beaten by the Bangladeshi National Intelligence Service before escaping and going into hiding.

Employing 3.6 million workers, Bangladesh's garment industry is the nation's largest industrial employer. Because of cheap labor costs, the country has become an attractive alternative to China, where apparel industry wages are rising rapidly. Bangladesh exported an estimated $18 billion worth of clothes from its factories last year.

Counselor Hot List Nominations are Now Open

Are you doing something unique, hip, fun or trendy in the industry right now? Do you know somebody who is?

Counselor is looking for nominations of people for its annual Hot List, which will be published in August - our Hot Issue. We're on the lookout for anyone in the industry who is taking an interesting approach to business, shaking up the status quo or simply networking like a maniac at all hours of the night. We're in search of those people who are making the industry a unique marketplace that's fun and energetic.

Send an e-mail by Friday, May 4, to Karen Akers at kakers@asicentral.com explaining why your nominee should be recognized on Counselor's Hot List in August. And, please make sure to include a picture of the person you're nominating. Thanks!

Take the State of the Industry Survey

Counselor is currently polling professionals in the industry - both distributors and suppliers - to see how the market did in 2011 and to get impressions on where the industry is headed in 2012. We need your input. Please take some time to click the appropriate link below and complete the annual State of the Industry survey. Your responses will remain anonymous, and you'll be helping to create Counselor's annual State of the Industry report.

Distributors click here to take the distributor State of the Industry survey.
Suppliers click here to take the supplier State of the Industry survey.

Castelli Names Bourboin-Spraggs as its Canadian VP/Sales

Castelli North America (asi/44305) has announced the appointment of Danielle Bourboin-Spraggs to the position of vice president of sales for Canada.

With Castelli since 1998 as a multi-line representative in Ontario and Quebec, Bourboin-Spraggs will be responsible for the national sales team as well as marketing in Canada. "I could not be happier," she says. "My love of this line is well-known in the industry, and now I can focus all my attention on sharing the features and benefits of this superior-quality Italian line of journals and diaries to every distributor in Canada." Bourboin-Spraggs can be reached at (905) 896-6950 or at dspraggs@castellinorthamerica.com.

Talbot Marketing Promotes Braunstein to VP/Sales & Business Development

Steve Levschuk, president of Talbot Marketing (asi/341500), has announced the appointment of Danny Braunstein to the position of vice president of sales & business development for Western Canada.

No stranger to Talbot Marketing, during his tenure as a Winnipeg, Manitoba-based sales partner, Braunstein ranked first in the country on several occasions and is a PPPC Image Award winner with more than15 years of experience in the Incentive and Promotional Marketing Industry.

"Over the last couple of years, we've made significant investments in our technology for our sales partners and for our clients, and we've also added some exceptional sales talent," said Levschuk. "We have a strong national presence but have tremendous capacity to grow our business, and we are looking to do just that. In Danny Braunstein, we believe we have found the right person to help Talbot accelerate the growth of both our sales team and our business in Western Canada."

During 2011, Talbot Marketing celebrated its 125th anniversary with year-long celebrations that included a new branding and marketing strategy, as well as a new 30,000-sq.-ft. office and distribution facility opening in June 2012, in London, Ontario.

"I cut my teeth in the promotional products industry growing up in a family-owned and -operated business," Braunstein said. "When we joined forces with Talbot Marketing, it really felt like we had just become a member of a bigger family-owned business. I am ecstatic to have the opportunity to join Steve and the Talbot family again. There is no doubt in my mind that Talbot's unique combination of industry-leading technology, unparalleled support and good old-fashioned values will cement its continued growth for another 125 years."

Talbot Marketing is a wholly-owned division of Talbot Marketing Inc. and one of the largest providers of corporate premium and incentive programs, promotional products and apparel in Canada since 1886. The company provides a full spectrum of promotional services, including creative, graphics, manufacture and imprinting, global sourcing, program design and implementation, website creation and maintenance, and complete fulfillment and distribution capabilities. For additional information, e-mail: info@talbot-promo.com.

Brymark Hires Sales Manager & Director of Business Development

Brymark Promotions Inc. (asi/149287), one of Canada's leading promotional merchandise agencies, has a new sales manager to cope with the rapidly growing demand it's currently facing, said company president Warren Gencher.
"We would like to welcome Bruce Hardy to the management team," Gencher said. "Bruce has been in our industry for 12 years, and brings considerable selling and management experience."

Additionally, Brymark Promotions has a new director of business development and community relations. "We would also like to welcome Annette Casselman," Gencher said. "Annette is a results-oriented sales and marketing executive who brings to each client a high level of professionalism and enthusiasm that contributes to her remarkable success. She knows all facets of the world of brand management and promotions, having spent the past 13 years honing her skills as an expert marketer and event planner - she knows the business from the inside out."

For more information, contact Warren Gencher at warren@brymark.com.

Here We Come ...

Don't miss the Advantages Roadshow when it visits Western Canada next month.

Expand your industry knowledge by attending the Advantages Roadshow. Featuring tabletop exhibits, leading suppliers and free distributor education, the Roadshow delivers a productive trade show experience that will keep you on the cutting edge. Click here for the action-packed morning schedule from 8:45 a.m.-3 p.m. The Advantages Roadshow will be in Canada on these dates:

May 23 • Vancouver • Delta Burnaby Hotel & Conference Centre
May 24 • Calgary • Carriage House Inn
May 25 • Edmonton • Radisson Edmonton South

Register today for FREE at www.advantagesroadshow.com. All distributors are invited to attend for FREE.