Statistics Canada reports slight rise in retail activity
Retail sales rose 0.2 percent to $44.3 billion in May according to data released by Statistics Canada.
Higher sales at food and beverage stores and gasoline stations more than offset lower sales at motor vehicle and parts dealers, with sales up in six of 11 subsectors, representing 51 percent of retail trade.
After removing the effects of price changes, retail sales in volume terms edged up 0.1 percent in May.
Higher sales at food and beverage stores
Receipts at food and beverage stores were up 2.1 percent, the fourth increase in five months. Following declines in March and April, sales at beer, wine and liquor stores advanced 6.0 percent in May. Supermarkets and other grocery stores posted a 1.6 percent increase. Sales were down at specialty food stores (-1.0 percent) for the third consecutive month. Sales at convenience stores (-0.8 percent) decreased for the first time in four months.
Following a 6.4 percent advance in April, sales at gasoline stations rose 2.3 percent in May, in part due to higher gasoline prices.
Clothing and clothing accessories stores reported a 2.8 percent increase in May, more than offsetting the decline in April. Higher sales were posted at clothing stores (+3.1 percent) and shoe stores (+3.2 percent), while sales at jewellery, luggage and leather goods stores edged down 0.1 percent.
Sales were down for all store types in the motor vehicle and parts dealers subsector (-2.0 percent) in May. The decline in May was largely due to weaker sales at new car dealers (-2.4 percent).
Following a 5.9 percent gain in April, sales at furniture and home furnishings stores declined 3.5 percent in May, as furniture stores (-5.0 percent) and home furnishings stores (-0.7 percent) posted lower sales.
General merchandise stores (-0.5 percent) posted lower sales for the first time in five months.
Sales up in seven provinces
Quebec (+1.0 percent) reported the largest increase in dollar terms, led by stronger sales at food and beverage stores.
Sales rose for the first time in four months in Manitoba (+0.5 percent), as higher sales were reported at supermarkets and other grocery stores.
Newfoundland and Labrador (+1.0 percent) reported the fourth sales gain in five months.
Sales in British Columbia edged up 0.1 percent on the strength of higher sales at gasoline stations and beer, wine and liquor stores.
Following increases in April, sales in Alberta were down 0.4 percent. The decrease was mainly attributable to lower sales at new car dealers, the main retail store type in Alberta affected by the Fort McMurray wildfire and evacuation.
New Brunswick reported a 1.2 percent decline in retail sales, largely stemming from lower sales at new car dealers.
Fort McMurray wildfire and evacuation
When collecting data for the May reference month, the Monthly Retail Trade Survey added three supplementary questions to a provincial sample of about 770 Alberta businesses to assess the impact of the Fort McMurray wildfire, which started in early May 2016.
Overall, 6.8 percent of the sample, or 52 retailers, reported that their business activities in May had been affected by the wildfire and evacuation in the Fort McMurray area. Of these 52 retailers, approximately 38 percent were able to provide an estimate of the impact on sales. Most retailers reported a decline in their sales, while a few others recorded increases. The remaining 62 percent reported an impact on their sales, but could not quantify the effects of the wildfire.
Overall, the impact of the wildfire and evacuation on May retail sales in Alberta was small, as retail sales in Fort McMurray represent approximately 2.8 percent of total retail sales in the province.
Read the July 2016 issue of Business Review USA & Canada magazine
Six issues at the top of tax and finance leaders’ agenda
New Deloitte research reveals that tax leaders are under increasing pressure to add strategic value as companies accelerate business model transformation, from undergoing digital transformations to rethinking their supply chains or investing in green initiatives.
According to Phil Mills, Deloitte Global Tax & Legal Leader, to “truly deliver value to the business, the tax function needs to rethink its resourcing model and transform its technology infrastructure to create capacity and control costs”.
And the good news, according to Mills, is that tax and business leaders have more options at their disposal to achieve this.
Reflecting the insights of global tax and finance executives at global companies, Deloitte’s Tax Operations in Focus study reveals the six issues at the top of tax and finance leaders’ agenda.
Trend 1: Businesses seek more strategic counsel from tax
Companies are being pushed to develop new digital products and distribution channels and accelerate sustainable transformation and this is taking them into uncharted tax territory. Tax leaders say their teams must have the resources and skills to give deeper advisory support on digital business models (65%), supply chain restructuring (49%) and sustainability (48%) over the next two years. This means redrawing the boundaries of what tax professionals focus on, and accelerating adoption of advanced technologies and lower-cost resourcing models to meet compliance requirements and free up time.
According to Joanne Walker, Group Tax Director, BT Group PLC, "There’s still a heavy compliance load today, but the vision for the future would be that much of that falls away, and tax people become subject matter experts who help program the machine, ensure quality control, and redirect their time to advisory activity.”
Trend 2: Tipping point for resourcing models
Business partnering demands in the tax department are on the rise, but 93% of tax leaders say their department’s budget is remaining flat or falling. To ensure that the tax function can redefine itself as a strategic function at the pace that is required, leaders are choosing to move increasing amounts of compliance and reporting to a combination of shared service centers, finance departments, and outsourcing providers that have invested in best-in-class technology.
Trend 3: Digital tax administration is moving faster than expected
in addition to the rising focus of the corporate tax department partnering with their business counterparts, transformative changes to the way companies share tax information with revenue authorities is also creating an imperative to modernize operations at a faster pace. Nine in 10 (92%) respondents say that shifting revenue authority demands on digital tax administration will have a moderate or high impact on tax operations and resources over the next five years—and several heads of tax said the trend is moving faster than expected.
"It’s really stepped up in the last couple of years," says Anna Elphick, VP Tax, Unilever. "Tax authorities don't just want a faster turnaround for compliance but access into a company’s systems. It's not unreasonable to think that in a much shorter time than we expect, compliance will be about companies reviewing a return that's been drafted by the tax authorities."
Trend 4: Data simplification and lower-cost resourcing are top priorities
Tax leaders said that simplifying data management (53%) and moving to lower-cost resourcing models (51%) must be prioritized if tax is to become more proactive at delivering strategic insights to the business. Many tax teams are ensuring that they have a seat at the table as ERP systems are overhauled, which is paying dividends: 56% of those that have introduced NextGen ERP systems are now highly effective at supporting the business with scenario-modeling insights. Only 35% of those with moderate to low use of NextGen ERP systems said the same.
At Stryker, “we automated the source P&L process for transfer pricing which took a huge burden off of the divisions," says David Furgason, Vice President Tax. "Then we created a transfer price database to deposit and retrieve data so we have limited impact on the divisions. We are moving to a single ERP platform which will help us make take the next step with robotics.”
Trend 5: Skillsets are shifting
Embedding a new data infrastructure and redesigning processes are critical for the future tax vision. Tax leaders are aligned — data skills (45%) and technology process experience (43%) are ‘must have’ skills in a tax department of the future, but more traditional tax specialist knowledge also remains key (40%). The trick to success will be in tax leaders facilitating the way these professionals, with their different backgrounds, can work together collectively to unlock lasting value.
Take Infineon Technologies, which formed a VAT technology and governance group "that has the right knowledge about how to change the system to ensure it generates the right reports", according to Matthias Schubert, Global Head of Tax. "Involving them early was key as we took a greenfield approach, so we could think about what the optimal processes would look like and how more intelligent systems could make an impact
Trend 6: 2020 brought productivity improvements
Improved productivity (50%) and accelerating shifts to remote working (48%) were cited as the biggest operational benefits to emerge from COVID-19-driven disruption. But, as 78% of leaders now plan to embed either hybrid or fully remote models in the tax function long term, 34% say maintaining productivity benefits is a top concern. And, as leaders think about building their talent pipeline and strengthening advisory skill sets, 47% say they must prioritize new approaches to talent recognition and career development over the next two years, while 36% say new processes for involving tax in business strategy decisions must be established.