Why have CANEX? (Split fm "Up to 1500 military housing units ...")

[LCIS227]

What core combat or combat support capability does CANEX provide?  Why should the military be in the business of running a third rate chain of retail stores?  Why should money that could buy boots or clothes or fuel or vehicles or ammo be spent so people can pay the same price as Best Buy for a TV?

The question of military housing is the same: if there is no viable local market, providing housing makes sense (and is aligned with policy).  But Kingston, for example, has a population of over 100000.  Why does the military need to own & maintain 497 housing units there?  Certainly, some SQs for courses are a good use of money (cheaper than sticking people in the Holiday Inn), but why should DND/CAF spend time, effort and money to be a third rate landlord?

I can tell you that in Petawawa the Canex grocery store is a godsend. They provide much better quality produce and meats than Moncion did, without the monopoly prices! In small areas the Canex is a must.

 

[PMedMoe]

I can tell you that in Petawawa the Canex grocery store is a godsend. They provide much better quality produce and meats than Moncion did, without the monopoly prices! In small areas the Canex is a must.

I do have to agree with that one.

 

[dapaterson]

I can tell you that in Petawawa the Canex grocery store is a godsend. They provide much better quality produce and meats than Moncion did, without the monopoly prices! In small areas the Canex is a must.

And in Ottawa?  Kingston?  Halifax?  Victoria?  Montreal?  They need CANEX why, exactly? CANEX loses money (their financials don't show it, since they don't pay rent).  Scale back to the minimum requirement in remote locations only.  And perhaps even contract out those operations.  Hey, Loblaws / Giant Tiger / Walmart / anyone else: how much are you willing to pay to deliver retail services to the CAF community?

The CAF has a constant desire to own and control everything it touches.  In many cases it makes more sense to let outside professionals do the job; our focus should be on being a first-rate military, not a third or fourth rate commercial enterprise.

 

[McG]

How much of Canex's ability to support small and/or remote communities comes from it having the buying power of a small retail chain?  Could/would it have the same ability if it were cut to only those locations that need it?

 

[dapaterson]

How much of Canex's ability to support small and/or remote communities comes from it having the buying power of a small retail chain?  Could/would it have the same ability if it were cut to only those locations that need it?

Again, why do we need Canex to deliver that effect?  Canex has the geographical challenges of any Canadian retailer, without the economies of scale.  Would we not be better served by leveraging expertise in the private sector in those places where there is a true need, maintaining only a small group maintaining expertise in deployed operations morale and welfare support?

For 14-15, Canex had gross sales of $125M (down $4.3M from the previous year) and showed a profit of $5M.  If they were paying rent (and a number of other costs paid out of public funds and thus not appearing on their financial statements) that would be a loss. (https://www.cfmws.com/en/AboutUs/Library/PublicationsandPresentations/AnnualReport/AnnualReport2014-15/Documents/2014-15%20NPP%20Annual%20Report%20May15.pdf )

 

[jollyjacktar]

And in Ottawa?  Kingston?  Halifax?  Victoria?  Montreal?  They need CANEX why, exactly? CANEX loses money (their financials don't show it, since they don't pay rent).  Scale back to the minimum requirement in remote locations only.  And perhaps even contract out those operations.  Hey, Loblaws / Giant Tiger / Walmart / anyone else: how much are you willing to pay to deliver retail services to the CAF community?

The CAF has a constant desire to own and control everything it touches.  In many cases it makes more sense to let outside professionals do the job; our focus should be on being a first-rate military, not a third or fourth rate commercial enterprise.

You know what?  If you don't want to be a customer of the CANEX, don't shop there.  I have and do and will continue to do so as the mood takes me.  You don't like it.  Got it, we've heard you loud and clear.  But bear in mind, there are those of us who do like it and use it.

 

[dapaterson]

You know what?  If you don't want to be a customer of the CANEX, don't shop there.  I have and do and will continue to do so as the mood takes me.  You don't like it.  Got it, we've heard you loud and clear.  But bear in mind, there are those of us who do like it and use it.

But why should we spend defence dollars to subsidize CANEX operations?  No rent and other public support represent resources being spent there which could be directed elsewhere.  I'd rather see that money go to MARLANT or MARPAC to pay for fuel for more sea days.  That's a tangible defence output.

 

[PuckChaser]

I have a feeling the losses would be a lot higher if we only had CANEX in isolated locations. CANEX isn't going to magically turn a massive profit because you closed down the one in Halifax and Kingston (which was very busy almost everytime I went in there in the last 12 years).

You also cherry-picked data to fit your argument, Sales down $4.3M, but Income from Operations up $1.9M, and a Net Loss from FY13/14 (minor at $231K) turned into a Net Income of $1.6M.

If you bulldoze the CANEX properties on bases, they're going to sit vacant and generate nothing. DND isn't magically going to have all this money around because you closed a CANEX down.

 

[runormal]

Does anyone know if CANEX actively tries to make a profit? Or is it more focused on providing services? Likewise if it makes a profit where would that money go?

I've only ever shopped at CANEX's on courses or on ex's but every-time it was extremely convenient and had good prices.

 

[captloadie]

I initially was in full agreement with DAP, but then I stepped out of my shoes and into that of my subordinates in the various places I've been posted. I am still surprised by the number of dependants who don't have access to transportation (either single vehicle families or the spouse doesn't drive). The CANEX becomes their lifeline many times. Most CANEXs on the bases I have been at are geographically situated to serve the PMQs, making it easier for the stay at home spouse to access groceries, clothing, gifts, etc. It may not be cheaper, on a per item basis, but compared to insurance and car payments over a year, it probably evens out in the end.

Now does it need to be a CANEX, as opposed to some other outlet? That becomes the question. We already have lots of concession agreements out there, so its not impossible, maybe to convince a Giant Tiger to come in and run a retail outlet, but what happens when they decide its no longer profitable or practicable and goes away (like the McDonalds in Borden). We then leave those same families that the CANEX now serves in a lurch.

 

[Loachman]

Rotten Ronnie's moved up the road to Angus, where it could attract more customers, as a fair number of potential customers would likely have been too shy to venture onto a base, especially after sunset, even if they knew it was there.

 

[Pusser]

Does anyone know if CANEX actively tries to make a profit? Or is it more focused on providing services? Likewise if it makes a profit where would that money go?

I've only ever shopped at CANEX's on courses or on ex's but every-time it was extremely convenient and had good prices.

Depends on how you define profit.  Economics 101 defines profit as that which is left over after all expense are paid (including salaries) so that a profit of $0 is actually a mark of success.  Having said that, although it's not out to make huge amounts of money, Canex does actually try to generate a small profit in order to contribute to Personnel Support Programs (PSP).  Canex pays royalties to both Base Funds and the Canadian Forces Central Fund (CFCF).  Thus Canex profits go toward improved base recreational/sporting facilities/programs, base teams, CFPAF loans/grants, education loans for dependants and the list goes on.  Canex as a retailer is not allowed to undercut local markets, but their lack of overhead costs enables them to be very competitive and turn more money over to base funds and the CFCF. 

One of the things that makes Canex most competitive is their no-interest credit plan.  It is worth noting that even if Canex doesn't have something on the floor or even if they don't normally stock something at all, they can often order it in for you and still give you the interest-free credit plan.  In recent years, this has even been extended to work with other local retailers (e.g. in Ottawa, Canex will give you an interest-free plan to buy tires from certain local tire shops, or mess dress from local tailors).

 

[dapaterson]

One of the things that makes Canex most competitive is their no-interest credit plan./

Is extending easy credit to young military members without financial experience or acumen in the best interests of the individuals or the institution?

 

[Oldgateboatdriver]

I've been watching this  :trainwreck:  for a while now, without commenting but:

Wow! Just Wow! Dataperson, where does this hatred of CANEX come from. Did they wrong you in another life or something.

Why do you have it in for an institution that provides some services and support to the CF members and takes nothing from the CF budget.

I think we all would like to know where you are coming from on this - there has got to be some psychological unresolved problem at issue here. Please enlighten us.

 

[dapaterson]

CANEX does cost public money.  The infrastructure and PILT and other costs are borne by the public - CANEX contributes not one thin dime.

CANEX costs effort and attention of senior leadership.

I would rather defence efforts go to building and maintaining a world class Navy in roles as deirected by government, and the same for the Army and Air Force.  Running a third or fourth rate retail chain does not contribute (other than in a minor indirect way) to meeting those objectives.

First principle of war: Selection and maintenance of the aim.  I do not believe flogging T-shirts, mugs, keychains, chips and TVs is the aim of the CAF.

 

[The Bread Guy]

Lots of good, detailed debate here, so pulling it onto its own from the PMQ thread.  Please, continue ...

Milnet.ca Staff

 

[Strike]

Is extending easy credit to young military members without financial experience or acumen in the best interests of the individuals or the institution?

How about it teaches them how to budget properly every month and that there are ways to buy things that don't include exhorbitant interest rates and credit cards.

And how about people with 20+ years in?  Picked up my washer/dryer set there after my last move.

 

[PuckChaser]

This hate on for CANEX is completely unfounded. You could fire 50% of the GOFOs in the Ottawa tomorrow, and have less impact on operations and budgets than closing every CANEX down in the same timeframe.

Picking on CANEX is low hanging fruit if you're trying to talk about selection and maintenance of aim.

 

[dapaterson]

How about it teaches them how to budget properly every month and that there are ways to buy things that don't include exhorbitant interest rates and credit cards.

And how about people with 20+ years in?  Picked up my washer/dryer set there after my last move.

Other way to buy things: wait until you can afford them.  Or is the CAF in the business of enabling immediate gratification?

As for white goods: Are there no stores in the local area that provide them?  Why is there a military requirement for the CAF to support a store for you to shop for Maytag / Kenmore / Frigidaire / LG?

 

[PuckChaser]

Because a new Pte with his young spouse moving into a PMQ, likely out of an apartment doesn't have 4 grand to dump on appliances from his pay cheque.