COVID19

November 30, 2020  by

MEDIA: Are COVID19 Rent Subsidy Caps Unfair? (Global National News)

Pleased to chat with Global National News about the latest coronavirus rent assistance program, the Canada Emergency Rent Subsidy (CERS), and challenges around the caps, in terms of the maximum amount that a business can receive.  In particular, there has been criticism of the $300,000 cap for businesses and other eligible organizations with more than one location.

This is a difficult issue, as it might seem to some as being unfair for larger companies; perhaps, analogous to “penalizing success”.  The reality is that COVID19 has been difficult for everyone, including smaller businesses with limited resources.  There are at least three sides to this challenging issue.

Larger businesses with multiple locations certainly feel the stress of steering a larger ship, with many employees and financial obligations, such as rent.  With more jobs at stake, it is understandable that not being able to make ends meet could have an adverse employment impact on a greater number of people.  The other side of this situation is that larger companies tend to have access to a wider range of financial resources, including established cash reserves, existing financial partners, and, perhaps, potential investors.  There are also other programs available, including those that support wages.

Smaller, standalone businesses that collectively represent the backbone of the Canadian economy can find themselves with fewer resources in financially challenging times, and attracting support from financial institutions is not easy (many, if not most, small business owners know just how difficult this is).  This category of businesses also knows what it is like to be overlooked, as the early days of COVID19 support programs left out various types of small operators (much of which has since been rectified).

The third side of this situation is the taxpayer (in this case, represented by government).  COVID19 has been extremely challenging for so many, be it on an individual, family, employee, business, or wellness level.  It is not feasible to simply open public funding in an unlimited manner; rather, balance is required.  With the objective of keeping as many businesses as possible on some form of “life support” as the pandemic unfolds and begins to move into a more hopeful phase in early to mid-2021 (fingers crossed), balance is important, in order to get to the other side.

The other thing that many companies with multiple locations will be considering is just how many are needed going forward.  COVID19 has changed a lot of behaviors, routines, and workplaces.  Although the situation will not be the same for everyone or every community, locations that built their business based on office traffic or proximity to large workspaces might have to rethink the way forward.  This is an area that requires thoughtful analysis, to make tough decisions and understand the impact on the road ahead.

Thank you for including me in your TV and print stories, Global National News!

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November 9, 2020  by

MEDIA: CBC News Network Weekend Business Panel (November, 2020)

What a historic day to join the CBC News Network Weekend Business Panel, within a mere hour of Joe Biden and Kamala Harris being projected to win the Presidency and Vice Presidency of the United States.  As someone who has closely followed US politics for decades, it’s a pleasure to have this opportunity.

Our discussion, including Elmer Kim, Mark Warner, and John Northcott, focused on what had become Election Week in the US, with a handful of remaining states continuing to count the final ballots to determine who would win the Presidency.  With all eyes on Pennsylvania, it proved to be the defining factor, at 11:24 AM ET, on November 7, 2020.

What could a Biden Administration mean to Canadian companies?  With the US as our largest trading partner by far, Canada has faced uncertainty over the last four years, from an administration that imposed tariffs on Canadian steel and aluminum imports, bluster around the negotiation of NAFTA 2.0 (both have been Business Panel topics), as well as limited attention overall, focusing instead on countries outside of traditional US allies.  The US response to COVID19 has been devastating, with the highest number of cases and deaths globally, resulting in significant job losses, companies closing, and many households in peril.  What could the future look like?

Once the proverbial dust settles in areas such as election related legal disputes and the transition of power (which might not be particularly easy, depending on whether the current administration decides to continue to fight or, instead, brush off the White House as not being particularly important and move on to something else), it’s a reasonable expectation that a Biden Administration would quickly move to combat and manage the coronavirus in a manner that has not been seen in the US thus far, as well as reconnect with traditional allies who have been of limited focus over the last four years.  Joe Biden is well suited to this type of conversation, recalling childhood advice to “keep the faith”, but to also spread it around.

Canada and its business community should expect to see a better level of stability with its neighbour and a more collaborative, productive relationship.  It’s difficult to predict the impact on the longstanding Keystone XL pipeline, however, politicians have a way of keeping their options open, especially when times are tough.  Infrastructure and similar projects have the potential to create a significant number of jobs, which is especially relevant, given the massive number of job losses in 2020 due to COVID19.  Also, expect an increased focus on “kitchen table” issues, including employment and wages, as we know that these are areas that are very close to Joe Biden’s heart, as the stories of job losses in his own family have been told many times.

It has been said that changes in leadership have the potential to bring a level of uncertainty that is counterproductive and risky.  In this case, the circumstances may be different, as what has been a tumultuous last four years fades into the past; but, we are not quite there yet.  The US remains as a country that is highly divided, bringing to mind an important reality that experienced business leaders know: deals often get done “in the middle”, when parties are able to arrive at solutions that allow both sides to win.  In the absence of the necessary skills and experience to arrive at this point, little is achieved, with potential and lost opportunity being left on the table.  Think about the practical implications of what is lost in this type of situation, including in terms of new paths forward and dollars and cents.  In the meantime, all eyes will be on what will unfold up until Inauguration Day in January.

Finally, in advance of Remembrance Day on November 11th, we honour the service and sacrifice of those who have given so much, allowing us to be True North, Strong and Free, every single day.  We will remember them.

 

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October 26, 2020  by

MEDIA: CBC News Network Weekend Business Panel (October 24, 2020)

Pleased to be joining the CBC News Network Weekend Business Panel from my home studio, alongside Sherena Hussain, Dennis Mitchell, and Natasha Fatah, talking airline refund spats, small business week, and the woes of another Canadian retailer, Le Chateau.

Many Canadians have been waiting for months to receive refunds for flights they had booked and subsequently cancelled by the airline due to COVID19.  Westjet recently announced its decision to issue refunds for flights it had cancelled, drawing attention from its rival, Air Canada.  Without going into the details around how the refund process will work, it seems to me that the focus should be on the customers who have been out of pocket what could be a significant amount of money for months.  It’s true that the airline and travel industries have been met with massive declines in business; a cause for concern in terms of future viability.  Regardless, it doesn’t seem right that customers be the ones to effectively finance this problem by not receiving a refund for something that they could not ultimately realize, through no fault of their own.

Small Business Week is generally a good time to reflect on the importance of the backbone of the Canadian economy; doing so has taken a different slant in 2020.  Small businesses have had to work extra hard to combat the impact of COVID19, be it in terms of financial challenges, keeping staff and customers safe, and finding new ways to deliver products and services.  Times of challenge can bring opportunity, such as better utilization of technology, an improved online presence, and the potential to access new markets.  Critical to this is the role of qualified advisors, who bring valuable perspective and an objective viewpoint, to help business leaders avoid pitfalls that they might not recognize until it’s too late.  Remember that business leaders have a depth of knowledge, as experts of their own companies, while advisors bring a breadth of knowledge, the experience of many situations; these perspectives are related, but they are not the same.

And finally, this week saw the demise of another Canadian retailer; this time, Le Chateau.  Seeking creditor protection and advisory assistance, we will have to stay tuned to see if this brand will find a way to continue into the future in some manner.  Regardless, I remember the years when Le Chateau was a “go to” stop on any trip to the mall, with lots of interest in the party and event section; another reminder of how much COVID19 has changed our lives.  The reality is, we don’t go very far these days, do we?  This makes life a challenge for retailers, airlines, travel, and hospitality companies; at least we have technology to stay connected.

Thanks for watching and for reaching out with your comments on these stories; it is a privilege to bring the business news to you.  See you again soon.

 

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October 5, 2020  by

MEDIA: CBC News Network Weekend Business Panel (October, 2020)

A hectic news cycle is a great time to join the CBC News Network Weekend Business Panel from my home studio, alongside Elmer Kim and Asha Tomlinson.

Here’s an overview of the topics we discussed:

Businesses face increasingly strict COVID-19 measures.  As cases rise, various regions across Canada are facing tighter restrictions; can companies survive?

Federal aid and the Canada Infrastructure Bank.  As we move into the Fall with COVID-19, businesses are going to need help to get through these challenging days; how could the latest round of support help?

Market turmoil, as Trump is hospitalized.  With the recent announcement of Donald Trump’s COVID-19 diagnosis, what could the future hold for the stock market?  Is there an impact for Canada?

As the weather becomes cooler and Canadians move inside, we’ve started to see increases in COVID-19 cases, with some areas being hit worse than others.  There is no doubt that an already weary business sector is concerned about the latest round of government restrictions, targeted to decrease the virus’ spread, but as the global pandemic marches on, there isn’t much choice in the matter.  In addition to keeping an eye on cashflow, business leaders can benefit from connecting with peers and business associations and remembering that advisors can help to bring perspective and creative solutions in challenging times.  Also, don’t assume that government fully understands your circumstances; it’s important to speak up if you think your company, business category, or industry is being overlooked.

Infrastructure has taken on a new meaning these days, including much more than roads and bridges.  The Canada Infrastructure Bank attracts and co-invests with private sector and institutional investors in new, revenue generating projects that are in the public interest.  Areas of focus include green infrastructure, clean power, public transit, trade and transportation, and enhanced broadband infrastructure.  Quality internet service is much more than just a “nice to have” perk; this has been clearly demonstrated during times of COVID-19, as many neighborhoods in Canada do not have sufficient service, especially in rural areas.  Another initiative of current interest is in the area of agriculture irrigation projects to strengthen food security; something that is helpful in terms of reducing reliance on other countries.  The Bank represents an opportunity to create a significant number of jobs, an important consideration, given that a number of Canadian companies undoubtedly will not survive the impact of COVID-19.

Finally, with just 30 days to the US election, President Donald Trump is currently in the Walter Reed National Military Medical Center with COVID-19.  There are a lot of questions as to how and when he contracted the virus, his current state of health, and what the outcome might be.  Markets do not like uncertainty and this situation is something that we can expect to continue for a while.

There is a lesson in this crisis for business leaders: do not find yourself in a situation that is similar to that of this White House.  Currently, there are numerous senior officials, in both the White House and the US government, that have contracted the virus or are at serious risk of doing so.  This type of situation is terrible for the continuity of leadership.  In a business context, it is important to ensure that a company can continue to operate over the long term; think about what this means, in terms of knowledge, ability, and safety (hint: a global pandemic is not the time to have a senior team meet together in an enclosed space or for unnecessary in-person interactions).  Think carefully about your actions in the days ahead; your company, employees, and customers are counting on your good judgement.

It won’t be too long until we will have better insight as to how the US election will unfold, although it might take a while to get all of the details.  In the meantime, thanks for watching and see you again soon, CBC!

 

 

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September 28, 2020  by

MEDIA: When the Stores Come to You (Winnipeg Free Press)

There’s no doubt that COVID19 has impacted the way that we live, be it what we do (less), where we go (not far), and perhaps, most apparent, how we do things (differently).  Although there’s been a shift in how consumers procure goods and services that has been evolving for some time, the days of COVID19 have left many looking for solutions, some of which are not entirely new.

Consider shopping.  The rise of companies like Amazon and improved online shopping and delivery services from a range of retailers have changed how consumers interact with the retail experience.  We’ve come a long way from the nostalgic home delivery services of mid-last century, evolving through a time where mobility was all the rage (think malls, super malls, and the ultimate retail lifestyle experience) to arrive at a period when convenience is perhaps the most important consumer driver, closely followed by selection.  Online and mobile technologies have made a lot of this possible, but improvements in the area of logistics might be an even more important piece, something that is still very much in progress.

Fast forward to a range of upstart companies seeking their space in this lucrative market; fueled by the gig economy of those who have capacity to sell, as we’ve seen in areas such as ride sharing and short term home rentals.  I discussed one of these shopping/errand companies in a recent interview, where consumers can receive groceries and other items from various stores in their area, delivered in one convenient order

Although these services might bring important convenience in times of COVID19, will they last?  The impact of demographics might allow at least some of these companies to survive into the future, with evident trends including aging Baby Boomers, older seniors living in their homes for longer, and some geographic areas where the availability of younger family members to help is limited.

Market opportunity, however, is only one side of the equation; consider the following keys to success:

  • Capacity.  Delivery companies are only in business if they can attract and retain a sufficient number of drivers/contractors to provide services.  In a competitive world with a limited pool of potential “gig” contractors, which companies will be in the best position to attract them?  As a side note, beware of the potential for these workers to be deemed as employees for income tax and other purposes, which could represent a costly impact and need for business model revision.
  • Know the market/area where success is possible.  As this type of service offering is local, the geographic area must be sufficient to draw contractors, customers, and be competitive.  Those who do the math will realize that this isn’t so easy, especially on a sustainable basis.
  • Implementation.  Some might say that the devil is in the details; those who have been business operators know that the devil is in implementation.  Young companies can plan their service offering, but success is only realized by way of strong implementation on a sustainable basis, and with this type of logistical, “transaction heavy” business that utilizes a casual workforce, lots can go wrong.
  • Keeping up with the future.  Recognize that these companies will have to evolve in order to be sustainable, in areas such as enhanced logistics (think autonomous vehicles) and providing a competitive offering, where customers see value over the service cost.  This includes understanding costs, down to the last detail, as well managed and better capitalized companies will be in a stronger position to compete over the long term.

There’s no doubt that we will continue to see changes in how we live, including over what is expected to be another challenging season of COVID19 into the Fall and Winter.  Companies considering their next steps would benefit from the advice of those who have experience in building and managing businesses; it’s an advantage to have strength in your corner.

 

 

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September 8, 2020  by

MEDIA: CBC News Network Weekend Business Panel (September, 2020)

The Labour Day Long Weekend is a great time to be in my home studio for the CBC News Network Weekend Business Panel, alongside Elmer Kim and Jennifer Hall, talking consumer debt levels, Walmart taking on Amazon, and flying cars (yes, you read that right!).

Here are some quick thoughts on our discussion.

As Canadians combat the challenges of a global pandemic, we’ve seen consumer debt levels increase, mostly due to mortgages: payment deferrals, refinancings, and rising house prices can all play into this.  Of note, there’s been a fair amount of renovation activity taking place over the “pandemic months”, which could contribute to higher housing prices, and perhaps, some enthusiasm to say yes to a new home.  Conversely, decreased mobility means less spending in areas such as travel, dining, and retail, offset by what was evidently a fair amount of online shopping.  Let’s see what the trends show over the Fall months.

Walmart is a familiar retailer in many communities, with millions of people living within a short drive of their local store.  The launch of Walmart Plus (occurring on September 15th in the US) could represent interesting competition for Amazon Prime.  Although slightly more expensive and with a free shipping threshold of over $35 dollars, Walmart Plus will include some perks of its own, such as in-store item scanning via the Walmart app and gas discounts.  This program should be part of a larger strategic plan to attract customers, with the potential Tik Tok acquisition providing a connection point to an important demographic.  On a personal note, the Walmart store in my area has provided a good quality shopping experience during times of COVID19 and the mask mandate has made safety considerations less of an issue.  We will have to stay tuned to see when this program will launch in Canada.

And finally, the successful launch of a flying car could bring some interesting applications to transportation and logistics (I have wanted a flying car, Jetsons’ style, since elementary school!).  Commercialization details will be important, including reliability, price, training, and applications, but in the meantime, let’s enjoy the fun of this story, as it’s been a while since we’ve been able to consider technology for the sheer accomplishment of what is possible (doing so almost seems like a return to normal).

Thanks for sharing your Long Weekend with us, and see you again soon!

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August 31, 2020  by

MEDIA: As the Canadian Emergency Business Account is Extended, What About the Rent?

Pleased to chat with the Canadian Press about today’s news of some of Canada’s COVID-19 business benefits programs being extended.  Although the Canadian Emergency Business Account (CEBA) loan program has been extended until October 31, 2020, the lack of movement on the Canada Emergency Commercial Rent Assistance (CECRA) program may have many small businesses wondering how they will meet their obligations of September 1st and beyond.

It shouldn’t be surprising that expenses pertaining to a company’s premises are among the most significant, with, perhaps, only payroll representing a larger monthly obligation.  COVID-19 has been a difficult period for companies of all sizes, and when CECRA was announced, the initial response was one of relief.  Part of the challenge with this program is that landlords must apply to participate, leaving tenants in difficult circumstances if this did not occur.  As at the end of July, 2020, just over $600 million in rent support had been provided, which is regarded as being well below the estimated program budget, expected to be in the billions of dollars.  It is a reasonable expectation that many in the small business community are working overtime, in terms of considering their future and just what steps should be taken.

As Summer, 2020 comes to a close, Canada is facing a lot of unknowns, as it relates to COVID-19.  With schools re-opening and the weather cooling, resulting in a movement indoors, a second, or even third wave of COVID-19 could occur.  Many communities across Canada have recently experienced an increase in COVID-19 rates, even after periods of relative calm.  How will small businesses chart this challenging territory in the months ahead?

We have already seen companies closing, unable to reach viability, or perhaps, simply not being up for operating in the new world of COVID-19.  As leases end, companies may choose not to renew, and large businesses will undoubtedly be reconsidering their future office needs, as a remote workforce may become the new reality in many cases.  Remember also that traffic at businesses such as retailers, restaurants, fitness centres, and personal services (spas, hairstylists, massage therapy, etc.) correlates with the level of consumer confidence: if people do not feel safe, they will stay home.  As we approach what could be the brink of a significant increase in commercial vacancies, will governments and the business community be left to wonder if enough was done in this regard, to help companies remain viable during the unprecedented days of 2020?  Stay tuned.

In the meantime, remember that advisors can help, not only through challenging times, but also to develop important strategies for your company’s future.

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July 6, 2020  by

MEDIA: CBC News Network Weekend Business Panel (July, 2020)

Back in the home studio for the CBC News Network Weekend Business Panel, talking NAFTA 2.0, the Atlantic travel bubble, and Facebook advertisers, all hitting the streets in their own way.

Here’s a few thoughts on our discussion.

In a long overdue move, a number of large corporations are boycotting advertising on Facebook for the month of July, in protest of a lack of action against inaccurate, racist, and hateful content; Canada’s banks have joined this initiative.  Facebook appears to be defending its position, however, many are of the view that the Company hasn’t done enough to address longstanding content problems.  Dismissing concerns raised by citizens, corporations, and other groups may well land Facebook in a greater regulatory environment, and it’s fair to say that reasonable people can tell the difference between free speech and hate.  As the US election nears and the temperature continues to rise on a number of diversity issues, there is an opportunity to ask ourselves: what kind of world do we want to live in?  Let’s hope that this boycott is the beginning of a move towards much needed change.

In the category of “what a difference a year makes”, NAFTA 2.0 (or 2.1, depending how you look at it) quietly came into force on July 1st, reminding us that this was a high profile topic in 2019.  While companies continue to focus on COVID-19, industries that will be significantly impacted by new NAFTA provisions should have been actively planning for months, if not longer.  With just four months to the US election, it will be interesting to see what actions Donald Trump might take in an attempt to strengthen his position, given that his voters tend to respond well to a tone of putting other countries in their place.  Might we see tariffs or similar actions on the horizon?

And finally, the launch of the Atlantic travel bubble was met with long lineups and who can blame them?  In what is one of Canada’s most beautiful regions, this approach provides an opportunity for some much needed relief for local travel and tourism industries.  I am fortunate to spend time in Nova Scotia on a regular basis and can attest to the many things to see and do in Atlantic Canada; I hope that I will be able to travel to the Coast again soon!  In the meantime, I hope that local residents have a chance to visit friends and relatives or a place that they’ve been wanting to see or revisit for years.  These are the days to do just that; let’s make them good!

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Thanks for watching and see you again soon, CBC!

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July 3, 2020  by

MEDIA: So Many Questions, As the COVID-19 Commercial Rent Program is Extended

Pleased to chat with the Ottawa Bureau of The Canadian Press about the extension of the Canada Emergency Commercial Rent Assistance (CECRA) program.  Next to payroll, the most significant item for a company to fund is often its premises, be it by way of rent or a mortgage.  Whatever the structure, both of these represent cash outlays for a business.

COVID-19 has resulted in significant revenue declines for many, if not most companies; some have lost a relatively moderate percentage of income (say, 25%), while others have faced declines of 50% to 100%, in some cases.  Although wage subsidy programs have helped to retain staff, fixed expenses (including rent) represent a steep funding challenge for many small businesses.

CECRA’s structure requires landlords to apply, leaving many tenants in a tenuous and uncertain situation.  In the event that their landlord does not apply, for whatever reason, tenants may be left with some very difficult decisions to make about the future feasibility of their company.

An important question to consider is this: Who benefits when businesses are forced to close, simply because they are unable to cover all of their expenses due to the impact of a global pandemic?  Recognize that these unusual days will not last forever, and in the context of a company’s existence, may represent a short period of time.

When businesses fail, jobs and economic wealth are lost and their leased premises are left empty; this leaves landlords with rental spaces to fill, at the worst of times.  Financial partners who hold a mortgage on these properties might find their borrowers in a weakened financial position or in default, at which point, another important question comes to mind: Now what?

This is why the structure of these programs, in practical terms, is so important.  With what seems to be relatively low uptake of the CECRA program thus far, did the Federal government get it right?  Are landlords thinking carefully about the implications of not applying to the Program?  And where will the future of Canada’s small business community, the backbone of our economy, be left in all of this?

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June 29, 2020  by

MEDIA: CBC News Network Weekend Business Panel (June, 2020)

How fortunate am I to enjoy another Saturday morning, live, on the CBC News Network Weekend Business Panel; this time, alongside Elmer Kim, Dennis Mitchell, and John Northcott.

On a busy news week, as we approach the mid-point of 2020, here’s some of what we discussed:

  • Travel bubbles and opening up the economy.  As Atlantic Canada launches its new travel bubble and provinces take their next steps to open up their economies, what can we expect to see and experience?  Will tourism and hospitality finally catch a much needed break (as in, some good news)?
  • Airlines bring back the middle seat.  It’s no secret that airlines have been highly impacted by COVID19, with travel down almost 100% in some cases.  As Canada’s airlines seek to increase capacity, will travelers be on board?
  • A new fund promoting diversity.  A group of Black executives is launching a new fund to invest in Black-led companies.  As we take a first look, how can this approach impact diversity going forward?

Canadians are certainly feeling restless, with much of our communities and local economies having been locked down for months.  As COVID19 rates stabilize, an opportunity exists to re-open parts of Canada; a new example being the travel bubble in Atlantic Canada (count me in!).  As tourism and hospitality have suffered immensely, locales with well managed COVID19 rates represent an opportunity to bring much needed traffic to these industries, in a manner in which travelers feel comfortable; this is key.  I will be watching this coastal bubble very closely, with fingers crossed for good news and results, in terms of both business recovery and COVID19 rates that stay under control.

Speaking of travel, Westjet and Air Canada recently announced that they will be ending the middle seat moratorium in order to increase capacity on flights (I’m sure that a lot of travelers were hoping that these seats would be permanently removed, but that’s another discussion).  Part of the rationale relates to travelers being subject to temperature checks and masks, as well as the enhanced aircraft cleaning and reduced food service on board.  Everything I have seen or read in recent months indicates that air travel levels are down by as much as 98%, year over year, with current activity remaining slow.  I can’t help but wonder why this move is desirable for all flights, as an absence of consumer confidence will not fill airplanes.  Couple this with the nostalgia of Summer road trips, RV’s, and drive ins, suggesting that Canadians have an interest in trying something new (old, actually) over the next couple of months; it’s back to the future, for some of us!

Diversity has made news on a global level in recent months, particularly in terms of the stories coming out of the United States involving racism against members of the Black community.  The launch of the Black Opportunity Fund, investing in Black-led companies, is an important development for Canada and has the potential to help grow a sector of the economy that has been relatively overlooked.  Diversity is an issue of importance across many groups, and we all have a role to play in combating systemic bias; are you doing your part?

It’s a privilege to bring the week in business news to our audience across Canada and streaming globally.  Thanks for watching and see you again, soon, CBC!

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