Category: Perspectives

In late October 2022, the Bank of Canada announced the worst drop in business outlook since the start of the pandemic. Recent studies have found that most businesses and consumers believe Canada will soon fall into a perilous recession, with inflation continuing to plague our economy for years to come.

The Bank of Canada’s main tool to fight this outcome, namely its ability to raise interest rates, must be recognized for what it is: a Band-Aid on a broken leg. Our economy is facing systemic deficiencies: shortages of energy, commodities and, most importantly, people. In a recent interview with BNN Bloomberg, Mark Wiseman, chair of the Alberta Investment Management Corp. (AIMCo), put it trenchantly when he said rate increases don’t create more human beings ready to contribute to our workforce.

Businesses are facing two existential challenges. The first is the ongoing crisis of inflation and the corresponding threat of a major recession that will continue to drive up the cost of living for workers, increase dissatisfaction and devalue wages.

The second is the severe labour shortage that is expected to intensify rapidly. How should leaders prepare? And, crucially, what can leaders do to fortify their organizations during these challenging times?

It is prudent to examine what not to do.

As storm clouds gather, emerging data suggests many companies, both global and domestic, are contemplating or are already making layoffs to reduce costs and shore up their elasticity in a weakening business environment. Earlier this year, Shopify sent shockwaves across the sector by cutting 10 per cent of its workforce, following in the footsteps of other major technology companies like Netflix and Coinbase, which also announced significant layoffs in 2022. The day Shopify publicized this action in late July, the Canadian company’s shares closed down 14 per cent. That was partly a reflection of CEO Tobi Lutke’s admission, in a memo to staff that was made public, that the company had overestimated the degree to which e-commerce would grow. With a deepening human capital crisis and competition for skilled work escalating, one must wonder whether Shopify will come to regret this decision.

Beyond their individual defects, these examples from the technology sector reveal the cyclical nature of market trends. They make clear that the questions posed and solutions offered today cannot be designed solely to address the obstacles of this quarter or next. Widening the window means not only understanding the pace at which events are unfolding, but also promoting a clear picture of your long-term objectives and holding fast to the investments required to get there. This is particularly true for investments in human capital.

Historically, during economic downturns, businesses cut funding for employee compensation and training. As those same businesses contend with skills deficits, peers that have invested in high-growth areas emerge more competitive and prepared. While certain budget constraints are inevitable, businesses that can articulate long-term priorities are better positioned to secure investor and stakeholder support for workforce expansion. When measuring workforce demands versus budgetary constraints, it’s imperative to remember that turnover has a cost, estimated to be as high as 150 per cent of an employee’s salary. Building strong and committed teams isn’t cheap, but neither is the alternative.

A recession is likely to lead to a decrease in job creation, with some sectors experiencing a hairpin turn: today’s worker shortage will become tomorrow’s job shortage. However, well-resourced businesses should look beyond their immediate needs as they build and scale their workforce. With Canada’s technology sector facing widespread layoffs, banks, financial institutions and other traditional industries are scooping up available talent to build their artificial intelligence capabilities. These businesses can expect to reap the benefits as Canada requires an additional 250,000 technology jobs by 2025.

Not all businesses will be equally fortunate, and many sectors remain handcuffed by our current worker shortage. Corporate Canada cannot solve this issue alone. Urgent government action is needed on immigration, advanced education and infrastructure. But great leaders learn to never let a crisis go to waste. Businesses that respond to the talent war with strategic commitments to employee culture, long-term workforce investments and growth opportunities are best positioned to weather future labour shortages.

Nothing intersects culture, politics and business quite like sports. At their best, sports organizations serve as bastions of the community and espouse a purpose beyond victory at any price. At their worst, they function as vehicles for oppression and exploitation.

Regrettably, recent events demonstrate that professional sports are drifting toward a preoccupation with profit and power at the expense of social value. This was forcefully demonstrated last year when several elite soccer clubs banded together proposing to ring-fence competition at the highest level with a European Super League. The plan faltered after vicious backlash from fans who, with their unwavering loyalty, had built the clubs into powerhouses. Many people thought this saga might spark an industry-wide reckoning, a warning to franchise owners and league executives to curb greed and reward allegiance, but the trend toward enhancing profit at all costs seems only to be growing stronger.

Lately, professional sporting broadcasts have seen a dramatic increase in advertisements for gambling services. The deluge, brought on by developments in the United States and Canada making single-event betting legal, has exposed North American fans to the cutthroat and compulsive world of easily accessible wagering. The United Kingdom, one of the first countries to embrace the sports betting industry, is now contending with a gambling epidemic. In response, the government has banned the use of credit cards for wagering, commissioned studies into its long-term implications, and is expected to ban betting companies from sponsoring soccer jerseys. Conversely, in the U.S., with sports betting legalization steadily expanding state by state, some colleges are actively promoting gambling services to their own students, receiving compensation for every person they help sign up.

Whatever your opinion of gambling, the proliferation of ads selling services where users can place infinite bets with just a few clicks puts fans and vulnerable communities at risk. Sports organizations must do better at regulating and diversifying corporate partnerships. In Canada, government statistics show that disadvantaged people are more susceptible to gambling problems, and that the number of gambling activities available increases the risk of addiction and related issues.

Even more problematic than the rise of gambling seduction is the renaissance of an age-old phenomenon: sportswashing. Adolf Hitler did it in 1936; the Athenians perhaps created it when they splurged on chariots in the 416 BC Olympics to impress the ancient Greek world. Today, sports remain a vessel through which the powerful try to shape external perceptions.

Following the country’s invasion of Ukraine, Formula One decisively exited Russia. Ostensibly a principled decision, the same reasoning did not apply to the recently launched Grand Prix in Saudi Arabia, which continues despite the kingdom’s abhorrent human rights record.

The tacit support of the kingdom reached self-parody at this year’s Montreal Grand Prix when a driver donned a shirt protesting Canadian oilsands while simultaneously wearing a helmet adorned with sponsor Saudi Aramco’s logo, the world’s largest oil producer and most profitable company. Not only does sportswashing obfuscate the crimes of regimes like Saudi Arabia, it also puts meaningful activism at direct odds with corporate interests.

A recent poll by Discover, Navigator’s research arm, found that 64 per cent of respondents agreed that Canadian sports organizations and stakeholders could do much more to raise awareness of known human rights abuses by governments that host major sporting events. Canadian media, therefore, should approach this year’s FIFA World Cup in Qatar with revitalized scrutiny. The tournament will be set against the backdrop of thousands of dead migrant workers who built the stadiums under conditions akin to slave labour. As co-host of the next World Cup, Canada is well-positioned to take a stand.

As the Roman poet Juvenal famously said: “Give them bread and circuses and they will never revolt.” Modern sports have become circuses, tools for despots and a means for the rich to get richer at the expense of the community. Their soulless nature saddens fans who want the teams they love to stand, more than mere machines of profit, as tangible representations of communal identity and spirit. Maybe this year’s World Cup is the perfect venue for a long overdue revolt.

64% agree that Canadian sports organizations and stakeholders could do a lot more to raise awareness of known human rights abuses by governments that host major sporting events.

Not a day seems to go by in 2022 without a report of another catastrophic climate event. From monsoons that left a third of Pakistan underwater, to extreme drought and wildfires in Spain, to hurricanes Fiona and Ian that devastated coastal communities in Canada and the United States, few countries have been spared the effects of climate change. If scientific predictions are accurate, the situation will only worsen in coming years.

As the world works to reduce carbon dioxide emissions to mitigate this threat, one technological change looms large: electrification. All manner of vehicles, from cars to trucks to planes, are being designed to run on electricity. Apart from preserving the planet, this shift presents vast opportunities for business in the form of new technologies, energy savings and cost reductions.

This shift also demands something else: a large and reliable supply of critical minerals. Electric batteries require cobalt, lithium and nickel; the demand for these minerals is growing insatiably. McKinsey & Company projects that the global market for battery cells will grow about 20 per cent every year to $360 billion (U.S.) in 2030. Consequently, the World Bank estimates global demand for critical minerals could expand by 500 per cent within the next

30 years. For lithium and graphite, demand could increase by as much as 4,000 per cent.

Unless the demand for these minerals can be satisfied, the electrification boom will turn to bust. This is where Canada comes in.

With 200 active mines across the country, Canada is already a major producer of critical minerals, including nickel, potash, aluminum, indium, niobium, platinum group metals, titanium concentrate and uranium. Canada has the further potential to supply significant quantities of lithium, cobalt, graphite, copper and rare-earth elements to an energy-hungry world. Spread across multiple jurisdictions, including British Columbia, the Northwest Territories, Québec and Ontario’s so-called “Ring of Fire,” these mineral reserves also represent an important economic development tool, particularly for First Nations communities that stand to benefit from their extraction.

Canada also has another advantage to leverage: its relationship with the United States. In January 2020, Canada and the U.S. announced a joint action plan on critical minerals to advance bilateral interests. The U.S. had begun investing in critical mineral exploration under the Trump administration, but has now gone one step further under Biden, announcing it will fund overseas mining projects to obtain more critical minerals necessary to build renewable technology. Driving this new agenda is geopolitics — specifically, the dominance of political and economic rival China in the critical minerals market.

In June 2022, the U.S. established a Minerals Security Partnership with a host of countries, including Argentina, Brazil, the Congo, Tanzania and Canada. As part of its engagement, the U.S. is open to “providing a loan guarantee or debt financing” to countries with plentiful supplies. Other nations, including Australia, France and the United Kingdom, are also involved as strategic partners. Congress additionally linked half of a consumer electric vehicle tax credit to a requirement that cars be made with minerals that were mined or processed in the U.S., or any nation that signed a U.S. free-trade agreement, placing Canada at the front of the line.

This opportunity is not lost on the Canadian government, which published a critical minerals consultation paper this summer and will be releasing its full strategy this fall. The last federal budget committed up to $3.8 billion to launch this strategy, which includes up to $1.5 billion on supply chain infrastructure, $144 million for technology research and development, and a 30 per cent critical mineral exploration tax credit. These efforts also have the potential to advance Indigenous reconciliation in local communities.

In a world buffeted by the uncertainties of climate and geopolitics, Canada can provide a stable and secure source of the building blocks necessary for a net-zero world. Governments at home and abroad are willing to support industrial development that will benefit not only Canada, but all nations on earth. This represents tremendous opportunities for businesses on both ends and on all links of the supply chain. It’s now up to investors and industry to step up and make Canada into the energy superpower the world needs it to be.

Unusually high employee turnover, reservations about returning to the office and lack of engagement are all familiar pain points for employers and people managers across the country. Any one of these issues can be written off as temporary, but employers should not look away from the alarming reality that millions of Canadian workers are unhappy.

A recent study by Navigator’s Canadian Centre for the Purpose of the Corporation reveals that a full 42 per cent of employees are considering a job change in the next year. This desire for change is in part fuelled by views that their employers are more focused on profits than people, as well as concerns about work-life balance, flexibility and inclusivity. As the pandemic drags on, all of these views revolve around an underlying drop in employee morale that will outlast the latest round of restrictions.

If we accept that talent is the most important asset of a business, then employee morale needs to be elevated as an issue requiring C-suite attention, focused resources, and an empowered team to make tangible improvements. Addressing this challenge head on is central to an organization’s ability to retain talent, improve productivity, and bolster its recruitment.

Mental health has for years been an issue that employers have been reluctant to shake the tree on. Today, they have no choice.

According to the Centre for Addiction and Mental Health, nearly 75 per cent of the population are facing increased mental health and substance challenges. The isolation, anxiety and confusion that so many have felt in the past two years has cast a new light on the diverse and complex mental health needs of Canadians.  No longer just a problem that people are grappling with behind closed doors, this is an occupational safety issue.

A Morneau Shepell (now LifeWorks) survey on mental health found that working Canadians were significantly more distressed than they had been pre-pandemic, citing increased mental stress and strain at work as the top factor that would motivate a job change. According to the Ontario Chamber of Commerce, the cost of mental health to the Canadian economy is over $50 billion annually, or nearly $1,500, per employee.

It may feel crass to discuss mental health in dollars and cents, but the conclusion is unavoidable: inaction has a cost.

Many Canadian employers already take this challenge seriously. We have seen an increase in flexible hours, meeting-free days, and strengthened benefit plans. Experts in the private, public, and not-for-profit sector have all compiled best practices guides for employers looking to improve in these areas.

Yet, for many companies, the problem persists. Like most societal challenges, the mental health crisis has been years in the making. It stands to reason that it will take years of hard work, strategic thinking, and humility for employers to emerge as leading the solution, and even longer for them to reap the cost benefits.

As employers undertaking this journey, it’s important to maintain the basic fundamentals of management and leadership. Having a plan beats no plan. What gets measured gets done. And the best way to build trust is through authentic and frequent communication.

Resilient, creative, businesses will find ways to adapt to the changing needs of their employees. This aspiration starts with an understanding of where their responsibility lies and an acknowledgement that exponential improvements are required to address a problem that has been exacerbated by the pandemic.

If corporate Canada hopes to reverse the massive increase in employee turnover, it must embrace change. Its future, and the future of Canadian workers, depends on it.

If necessity is the mother of invention, it stands to reason that the past two years have been fertile ground for innovative thinkers stepping up to make leaps forward in their communities, organizations or sectors that may have otherwise taken years. Perhaps as importantly, it’s the local, personal, seemingly small changes that are making the biggest impact.

We spoke to a group of “accelerating thinkers” who have done exactly that, to get to the bottom of what has motivated and inspired them, as well as the ingredients that have been key to their continued success. While their stories are diverse, we found a common theme around two basic human needs: collaboration and connectivity.

Accelerators Section

THE GIG PIONEER

Dan Mangan

Current role: Musician and Co-Founder of Side Door

Based in: Vancouver

Canadian startup Side Door was founded in 2017 to connect aspiring musical artists who tour with hosts of small or niche concert venues, such as living rooms, backyards and bookstores.

Of course, the pandemic completely shut down concerts across the world. Dan Mangan and co-founder Laura Simpson acted quickly and pivoted to launch an online community to serve a similar purpose: to foster an environment where artists at any level can get paid and reach their fans and new listeners.

In 2020 Side Door went from being an in-person-only platform to helping facilitate 900 shows online. As a result, the organization’s user base grew to more than 65,000 users, including 5,000 artists and 2,000 available spaces.

The music industry has operated using a somewhat archaic model that was laid bare during the pandemic. Dan is trying to change that. He envisions a world where shows can be booked rapidly (within days) between strangers. His goal is to make live entertainment more democratic, more accessible and more independent, so that a community of 100,000 artists have the potential to earn $100,000 a year through their music, whether or not they are famous.

Having a less centralized music model that matches people — anyone, anywhere — with the music they want creates accessibility and a sense of connectivity.

 

 

THE BALANCE ADVOCATE

Jonathan Metcalfe

Current role: Restaurateur / Managing Partner / Co-Owner Tuck Shop

Based in: Montreal

It’s no secret the pandemic hit the restaurant business among the hardest of all industries. Restaurateurs everywhere were forced to re-evaluate their business models and look to innovate as they welcomed back patrons.

As owner of a neighbourhood eatery and bar, Jonathan Metcalfe had a myriad of challenges to tackle. With a dedicated team of highly skilled individuals passionate about their jobs, maintaining connectivity and creating loyalty became a central task.

Jonathan, who got into exercise following surgery in 2019, proposed that his team begin working out together to keep up their mental and physical health. This routine is now an integral part of the restaurant’s culture, both in and out of the workplace. He says they have grown closer by pushing each other in a non-work environment and have found satisfaction seeing each other make progress over months. Further, staff self-confidence is through the roof, which translates to a better client experience and higher sales.

Jonathan also used the pandemic as a jumping-off point to revisit pay inequality and work-life balance for his staff. That meant addressing tip structures and consolidating operating hours over four days rather than five to ensure staff have time to refresh and spend time with loved ones. Four-day work weeks are being explored by businesses and not-for-profits across Canada and were recently championed by the Ontario Liberal Party as a pilot project worth launching on a larger scale.

With the industry continuing to face labour shortfalls, finding new ways to address the physical and emotional demands of the sector have been essential to Jonathan’s success. It’s an approach restaurateurs across Canada would be wise to watch closely.

 

THE CREATIVE CONNECTOR

Ana Serrano

Current role: President and Vice-Chancellor of OCAD University

Based in: Toronto

Ana Serrano was set to begin her role with OCAD in July 2020, but the pandemic had other demands. Her start date was fast-tracked to help think through how the university would respond to the pandemic, deliver what would be a mostly online educational experience, and position some of the most tactile programs to succeed in a virtual world.

During the pandemic, Ana was also focused on the mental health of the university’s students. She understood that isolation and lack of physical proximity to the OCAD U community would affect them adversely. To facilitate this need for belonging, in September 2020 she led the creation of a 24/7 digital streaming service called OCAD U Live, created for students by students, as a place where they could connect, create and express themselves while augmenting their digitally forward skills as members of the new “creator economy.”

Along with these efforts at building meaningful experiences during an unprecedented time of isolation, Ana was also focused on keeping the university on the path toward financial sustainability. This goal became a shared purpose for all members of the OCAD U community, further creating a sense of connection among this disparate group of stakeholders, from the board to the students.

 

THE HELPING HAND

Anila Lee Yuen

Current role: President and Chief Executive Officer of the Centre for Newcomers

Based in: Calgary

As CEO of a not-for-profit charitable organization that provides Calgary immigrants and economically disadvantaged individuals with a solid foothold in Canada, helping others is par for the course for Anila Lee Yuen.

When Calgary, particularly Northeast Calgary, was hit hard by COVID-19, she led the organization to work collaboratively with the government and partner organizations — through the Calgary East Zone Newcomers Collaborative — to not only help the most vulnerable Calgarians get through the pandemic but also to lower the COVID infection rates in the city.

As part of these efforts, Anila, with Calgary Local Immigration Partnership (CLIP), led the setup of a multilingual crisis phone line to ensure everyone could receive the care and support they needed in the language they prefer. This meant anything from sourcing laptops for people so they could safely work from home or providing food hampers to help families avoid going to grocery stores during the lockdown.

From December to June 2020, they were able to help 20,000 Calgarians with COVID-related crisis needs. Jurisdictions like Edmonton, Red Deer, Alta., and Toronto have explored similar models.

 

THE TALENT INCUBATOR

Matthew Lombardi

Current role: Managing Director of OneEleven

Based in: Toronto

After closing at the beginning of the pandemic in spring 2020, OneEleven, a Canadian technology startup, brought on Matthew Lombardi to help rebuild the Toronto incubator.

Its 55,000-square-foot facility was a key part of its business model and was meant to be used as a venue for events and for open-concept seating and private offices as workspaces for growing technology companies.

With physical meetings out of the question, Matthew found a new way to help OneEleven’s community of fast-growing companies in the sector. He saw a gap in talent at these companies that hired a swath of individual contributors who, after rapid growth of their teams, had to become people managers with little leadership training. OneEleven’s online upskilling program is targeted directly at those emerging leaders.

Matthew sees Toronto as growing tech companies differently and believes we will see a tech-driven recovery in Canada post-pandemic. Looking ahead, OneEleven will combine both models, its new programming offerings and its collision spaces, to best support this rapidly scaling community of organizations.

It’s clear that businesses need to be thinking about ways to connect with their customers and also with their future leaders, both physically and virtually.

 

THE SME CHAMPION

Tabatha Bull

Current role: President and Chief Executive Officer of the Canadian Council for Aboriginal Business

Based in: Toronto

Tabatha Bull’s first day as CEO was on March 13, 2020, mere days before the country moved to working from home. Not only did Tabatha have to grapple with a new role but the strategic plan she had laid out had to change completely.

The CCAB acted quickly to survey its Indigenous business owner members to see what they needed to survive the pandemic. Working with government and banks, they began recovery programs and launched emergency business services.

The pivot was a success; their membership grew from just over 950 members in 2020 to 1,650 members in 2021, along with new interest from the tech sector.

Using this momentum, Bull focused her efforts to promote, strengthen, and enhance a prosperous Indigenous economy through the fostering of business relationships, opportunities, training, advocacy, and awareness.

Tabatha noted the remarkable way that distressed Indigenous businesses still focused on trying to help their communities, exemplifying the potential for Canadians to rally around common goals and think bigger beyond the pandemic.