Category: Perspectives

For as long as Camilla Sutton can remember, she has loved the constant pulse of markets as they monitor the restless movement of money around the world.

She recalls that early in her career, while working in the Bank of Montreal’s capital markets division, she was one of the few juniors—and the only woman—who attended the early-morning strategy meetings every day. “I’d sit in the corner with my eyes wide, just listening,” she says. “I was completely mesmerized from the very start.”

Some 25 years later, Sutton was running the global foreign exchange division for Scotiabank. After a corporate reorganization, she decided it was time to step back to broaden her perspective.

As the new head of Women in Capital Markets, an advocacy group that encourages Canadian women to consider careers in the business and brings together those who already work there, Sutton has an opportunity to share her passion. She also has an opportunity to support change at a pivotal time for women.

“The need for diversity is pretty well understood by all organizations, but getting there is still a huge challenge, in large part because it’s cultural. And culture is tough to change,” Sutton says.

Few sectors remain as male-dominated as the deal-driven capital markets sector. Although it is an uncomfortable truth, the “boys’ club” mentality is deeply entrenched, despite the risks that represents in the #metoo era. It’s also something that discourages many women from considering a career on or around a trading floor.

According to Sutton, part of the problem is a “box-ticking mindset” that many organizations still have when it comes to gender diversity.

“The progress really starts with the recognition that women are not one big category to be dealt with in one uniform way. They don’t all want the same thing. They don’t need cookie-cutter policies and practices,” she says. “They need genuine opportunity to succeed in a culture that is respectful and inclusive.”

Although women are under-represented in capital markets more than in other professions, female leadership remains a challenge for corporations in other sectors as well. Despite the introduction of “comply or explain” rules by the Ontario Securities Commission, women hold only 14 per cent of board seats on publicly traded companies, up only slightly from 11 per cent in 2015. When boards do have a vacancy, just 26 per cent of those seats are filled by women.

Still, the issue of whether there should be quotas, which are now legally in place in many European countries—remains touchy. Most people would prefer that merit rather than mandate be the criterion for inclusion.

However, Sutton sees a point in having the discussion.

“I used to be skeptical about quotas for women in governance and leadership positions. But maybe it’s the only way to get the ball rolling,” Sutton says. “After all, merit can be a double-edged sword, just another excuse not to be inclusive.”

However great the challenge ahead, her new role reflects an ongoing passion for capital markets.

“I want capital markets to be a place where the best talent is given the best chance for success for all stakeholders,” Sutton says. For that to happen, unlearning will be as important as learning.

When it comes to social media platforms, angst can eclipse reality

It all sounded so shocking at first. A whistleblower emerged with tales of a conspiracy between shady political actors and Facebook. With words like “personal data,” “privacy,” “Trump” and “mind-reading” tossed into the mix, public outrage and fear ensued.

Was this an overreaction? The activity and impact of social media, after all, remains challenging for even the savviest users to assess.

When we hear that political operatives mined Facebook or used our personal data to learn more about our motivations and intentions in the context of an election, the immediate reaction is to get angry. Anything that involves the use of “personal data” sounds like it must be an invasion of our privacy.

However, before we panic and call for policy changes, we should take a careful look at how we use sites like Facebook and what crumbs we, in fact, voluntarily leave behind.

• We “like” pages that signal our interests.
• We check into restaurants and stores.
• We disclose our relationship status.
• We respond to content in our feed.
• We share photos.
• We share the date of our birthday, or,
• even worse, our actual birth date.
• We talk about our favourite Netflix show.

We choose to disclose all of this information on a public platform. It’s a feature of the platform, not a bug. The decision to hand over this information is ours. In effect, we choose to make ourselves vulnerable.

That said, no amount of data is going to give any platform mind-reading and mind-shaping abilities. U.S. President Donald Trump did not win because he manipulated Americans into voting for him using Cambridge Analytica ad targeting. Anyone making such a claim is grossly exaggerating.

The utility of this particular data has significant limits. It can help advertisers paint a broad picture about a group of people. It can help political operatives target people who fit a certain demographic, geographic or interest profile. But they can do it at the group level only.

Our choices are still ours and we can reject things we don’t agree with. In reality, if we don’t want our data shared, or if we are convinced we could get brainwashed into voting for Trump because an advertiser knows our favourite TV personality, we have a clear choice in the matter: get off the platform.

However, no one wants to hear that. No one wants to look in the mirror. Instead, we expect Facebook to live up to a higher moral code. It’s the nature of becoming a platform billions of people “depend” on.  And when you get too big, and when government gets a whiff that you have lost the moral high ground, it sees an opportunity no government can resist: regulation.

With Congress contemplating whether to regulate Facebook, we have suddenly put social media on the same pedestal as industries of national importance like drugs, health care, agriculture, forestry, fishing, energy and mining. If public opinion tilts in the government’s favour, public scrutiny of Facebook and other social platforms will intensify. An entire industry could change. Facebook is not the only platform tracking user data, and governments around the globe will feel compelled to act.

 

 

Federal approval for the Kinder Morgan pipeline was the beginning, not the end, of a long process. It has strained relations between the governments of Alberta and British Columbia and led to a number of challenges and public protests. Even Bill Nye the Science Guy challenged Prime Minister Justin Trudeau on the environmental impact of the project.

You’re a man in the hot seat. Whether approval for Kinder Morgan goes through or not, the project has the fate of the Alberta government in the balance — and maybe the fate of the federal government too.

We approved the pipeline because we said it was in the national interest and believed it. We made that decision after historic consultation with Canadians, with Indigenous peoples, with environmentalists and with industry leaders. There were literally tens of thousands of Canadians that had an opinion and offered it to us.

After that we made the decision that the project was in Canada’s interest because of the jobs it creates and because of the access to export markets—99 per cent of our exports of oil and gas go to one country, the United States. We want to expand those markets, particularly to Asia, and, while doing so, attract a much better price for Alberta crude.

Consultation aside, there is still powerful opposition to the pipeline, including from B.C. and many Indigenous groups.

That’s true. But there is only one government of Canada. And only one government in Canada that has the jurisdiction of making decisions on a pipeline that crosses provincial boundaries. We will intervene at the National Energy Board when necessary. The National Energy Board agreed with Canada and Kinder Morgan to be a standing panel and make sure there are no unwarranted delays.

What about the protesters and their capacity for disruption?

People are free in this country to demonstrate their unhappiness with the government. It is one of the reasons we’re such a special place. We’re also a country that abides by the rule of law. If people decide they’re going to break the law, we have mechanisms to make sure that the rule of law is respected.

Let’s talk about the economic impact for a moment. How important is this pipeline to the revenues of the government of Canada?

It’s very important. Also, we want to show Canadians and the world that we can approve and build major energy infrastructure projects. It’s very important that investors around the world see that Canada’s regulatory system is respected and that federal jurisdiction in cases such as this is paramount.

If Kinder Morgan goes ahead as you say it will, is this going to be the last pipeline built in Canada?

That’s not up to governments to decide. We do know that there will be increasing demand for fossil fuels, according to the International Energy Agency. At the same time, we have an international obligation to reduce greenhouse gas emissions, and that’s why the Alberta climate plan, which includes a 100-megaton cap on emissions, is a very important part of the bundle of policies and issues that are at stake here.

We are, in Canada, becoming better at extracting fossil fuels more sustainably. The carbon footprint is on the way down and will continue in that direction, in part because of the innovation and entrepreneurship and ingenuity of the industry itself.

At the same time, if you look at investment pattern, there is more and more investment in renewable energy. It only makes sense to us to use the resources we have now, more and more sustainably, move them to export markets and use the revenues in part to help finance the transition to a low-carbon economy.

If the pipeline is delayed or doesn’t get built, are you afraid that the whole environmental part of the program will fall apart too?

We believe it makes a lot of sense to tax pollution and use the revenues to incent the kinds of behaviours that will better position Canada as we move toward the lower-carbon future. We can’t predict how the electorates and provinces will behave, but we can continue to promote the value of a pan-Canadian framework that was signed by all provinces but one.

In terms of shovels in the ground, do you think the twinning of the Kinder Morgan pipeline will begin this year?

It’s happening already. There is already construction. There are permits that are being issued. The rate of construction will depend on Kinder Morgan’s judgment of the security of the entire project moving forward.

 

This interview has been edited for length.

As government-licensed cannabis growers scramble to build brand and market share, provincial retailers across the country are preparing to stock their shelves.

British Columbia

British Columbians are already purchasing cannabis in public-facing storefronts. Unlike Ontario dispensaries, these storefronts are widely ignored by law enforcement and, in many cases, hold municipal business licences.

Premier John Horgan’s NDP government is acting to legalize many of these businesses, with a framework that will include both public and private retailers. B.C. will not cap the number of retail licences but will only issue them with the explicit support of local governments. This approach gives neighbourhood opponents a way to stall the development of legal cannabis markets, presenting a concern for retailers.

Alberta

Alberta’s NDP government presented its private-sector cannabis retail model to voters in 2017. In its first year of legalization, the Alberta Gaming and Liquor Commission is expected to grant licences to 250 retailers while online sales will continue to be operated directly by the government agency. This is more than six times the number of storefronts expected in Ontario, which has approximately three times the population.

Saskatchewan

When former Premier Brad Wall stepped down, several Saskatchewan Party leadership candidates expressed skepticism and even hostility towards legalization. One suggested that the legal cannabis age should be 25.

Premier Scott Moe’s government ultimately moved forward with a retail framework where the private sector would be responsible for both retail and sales distribution—an approach favoured by many other industry leaders. Much to the relief of industry leadership and recreational consumers, the legal age will be 19.

Manitoba

In Manitoba, access to legal cannabis stores will be dictated by postal codes, as individual municipalities were given the ability to prohibit retail sales. As of January 2018, 18 municipalities indicated that they would not accept cannabis retailing, with 22 remaining undecided.

Canopy Growth, Delta 9 Cannabis, National Access Cannabis, Tokyo Smoke and a consortium of other retailers are licensed to sell product to consumers,  while the Manitoba Liquor and Lotteries Corp. will secure and track supply.

Ontario

The Liberal government has approached legalization with an abundance of caution. Former health minister Dr. Eric Hoskins placed a strong emphasis on harm reduction. As a result, Ontarians will only see 40 storefronts, run by the Ontario Cannabis Retail Corporation (OCRC). The stores will provide product information and guidelines via iPad screens as part of a state-of-the-art Shopify system. The legal age for cannabis consumption will be 19.

Quebec

Quebec’s proposed cannabis laws are the most restrictive in Canada, with only 15 government-run dispensaries. Government will also control online sales. This stance is a far cry from the Quebec government’s comparatively  liberal approach to alcohol sales, which are permitted in corner stores.

Quebec’s current legal drinking age of 18 will apply, so expect some young Ontarians to hop the provincial border.

New Brunswick

Premier Brian Gallant’s Liberal government has eagerly embraced cannabis as an economic engine. CannabisNB, a Crown agency, will work with various tenders in the private sector for retail sales. To date, licensed suppliers are Canopy, Zenabis and Nuuvera.

Prince Edward Island

Prince Edward Island is expected to have four stand-alone, government-run cannabis stores. Supply deals have been signed with Organigram, Canopy and Canada’s Island Garden.

Nova Scotia

Nova Scotians will have nine government-run cannabis stores to choose from. Unlike their counterparts across Canada, these stores will be located within provincial liquor stores.

Newfoundland & Labrador

Newfoundland & Labrador will have 41 private-sector stores in the first year of legal cannabis. Ontario-based Canopy Growth has agreed to an 8,000-kilogram supplier deal with the province, and its subsidiary, Tweed Inc., is expected to operate four retail locations.

Cryptocurrencies have been making headlines for a couple of years, but many people remain confused. Navigator asked Don Tapscott, founder of the Blockchain Research Institute (BRI) and best-selling author, with Alex Tapscott, of The Blockchain Revolution, to explain what’s going on and what it all means.

IN APRIL, Navigator became the first public affairs firm to join the Blockchain Research Institute (BRI), an organization conducting ground-breaking research on the impact of blockchain technology on business, government and society. To celebrate this landmark occasion, we sat down with its visionary co-founder Don Tapscott to talk about this emerging industry and how Canada is poised to become a global leader in this space.

In the simplest terms, how would you describe blockchain technology?

Blockchain is the technology behind cryptocurrencies like bitcoin or ether. Whereas the current internet is limited to a network of information, blockchain represents a network for things with value—money, stocks, votes, data, intellectual property and more. Right now, we depend on big intermediaries like banks, governments or big social media companies to verify trust within digital transactions. Blockchain enables us to bypass those intermediaries and transact peer to peer.

It works by incentivizing thousands of different computers to verify transactions on a global, distributed ledger. That ledger is decentralized and public, meaning it can’t be hacked. It’s also far more efficient, allowing us to clear and settle transactions around the world in minutes where it once could take days or even weeks.

How does digital currency differ from traditional currency?

Traditional fiat currencies like the loonie or U.S. dollar are printed by a central bank and their value is backed by a particular government. Digital currencies like bitcoin don’t require a central bank or a government. They are created using blockchain, and the number of coins increases as a reward for those helping verify transactions on the ledger.

Can digital currencies and fiat currencies co-exist in the future?

Absolutely! A number of central banks are already looking at the ways this can happen. The Bank of Canada even released a report recently exploring the possibility of a digital fiat currency.

Right now, the currency we use is really determined by our jurisdiction—where we transact. The digital currencies we use can determine how we transact, what we transact or even with whom we transact. There’s still a role for fiat currencies in that world.

What are some uses for blockchain technology outside digital currencies?

Every industry you can think of will be radically altered by blockchain technology—from shipping to marketing to music. If you can think of a process requiring an intermediary that does not add value beyond establishing trust between parties, you have found a use-case for blockchain.

Why are digital currencies so volatile?

Probably because they’re so new! Regulators are only now beginning to consider how they should approach this new technology, and larger markets have not yet fully engaged in digital currencies. I think that volatility will settle down once the market matures and regulations are put in place.

How would you address concerns about money laundering and criminal activities associated with digital currencies?

Criminals tend to be the first adapters for any disruptive new technology. In the coming years the criminal element will occupy an increasingly small role in the digital currency market, particularly as the technology matures and regulators catch up. Some law enforcement officials are even finding the public, transparent nature of these blockchains quite helpful in tracking the activities of particular criminal organizations.

Do you believe there is a role for the regulator in this emerging space?

Absolutely! I think there’s widespread agreement that some regulation would be welcome in the space to provide guidance and protection for consumers, investors and innovators. That being said, we have to be careful that this regulation doesn’t stifle innovation and growth in this sector. In the modern era, these companies and entrepreneurs will just pick up and go to a friendlier jurisdiction if the regulations are inadequate here.

How do we ensure Canadian blockchain innovators stay here and don’t leave for other blockchain-friendly jurisdictions?

We can start by establishing a more nuanced taxonomy regarding the various digital tokens in circulation right now. Describing them all as “securities” doesn’t accurately reflect the diverse range of applications they might have. We also need to signal that our governments are open to innovation in this field.

We also need to have governments actively engaging in blockchain innovation, which I think we’re seeing. The City of Toronto, the Province of Ontario and the Government of Canada are all founding members of the BRI. There are some fantastic pilot projects using blockchain to improve efficiency and transparency within Canadian government. That creates an attractive market for innovators and shows we’re serious about this technology.

Want to hear more from Don Tapscott and other blockchain experts? Navigator has launched a new podcast, Banking on Blockchain, to mark our membership with the BRI. Each week, we sit down with top experts in the field who will help guide listeners to a deeper understanding of the technology and how it’s changing the way we do business in Canada. Visit www.bankingonblockchain.fm to listen to the latest episodes.