CANADA ECONOMICS

CANADA - US

Global Affairs Cnada. May 10, 2018. Foreign Affairs Minister to hold bilateral meeting with U.S. Secretary of State

The Honourable Chrystia Freeland, Minister of Foreign Affairs, will hold a bilateral meeting with Mike Pompeo, U.S. Secretary of State, on Friday, May 11, 2018, in Washington, D.C.

DoS. May 11, 2018. Remarks. Mike Pompeo, Secretary of State. Treaty Room. Washington, DC

SECRETARY POMPEO: Good afternoon, everyone. Very nice to see you.
FOREIGN MINISTER FREELAND: Great to see you, Mr. Secretary.

SECRETARY POMPEO: Welcome, welcome. We’re looking forward to our visit. Our great partners to the north are always that – great partners, and I am confident that the foreign minister and I will have a great relationship as well.

FOREIGN MINISTER FREELAND: Okay. Well, thank you very much, Mr. Secretary. The Secretary of State and I spoke, I think maybe less than an hour after your confirmation when you were in the plane.

SECRETARY POMPEO: Yes, exactly. I was on my way to Brussels, yes, ma’am.

FOREIGN MINISTER FREELAND: And it’s a pleasure to meet you in person.

(In French.) Thank you.

SECRETARY POMPEO: Thank you. Thank you all.

VIDEO: https://www.state.gov/secretary/remarks/2018/05/282042.htm

G7

Global Affairs Canada. May 11, 2018. 2018. G7 Summit in Charlevoix, Quebec


Ottawa, Ontario – The Government of Canada will host the 2018 G7 Summit in Charlevoix, Quebec from June 8 to 9, 2018.

NAFTA

REUTERS. MAY 11, 2018. Mexico refuses to be rushed into poor NAFTA deal: minister
David Ljunggren

WASHINGTON (Reuters) - Mexico will not be rushed into revamping the North American Free Trade Agreement (NAFTA) just to get a deal, Economy Minister Ildefonso Guajardo said on Friday ahead of trilateral talks with his U.S. and Canadian counterparts.

Guajardo said he would meet at 1 p.m. EDT (1700 GMT) with Canada’s Foreign Minister Chrystia Freeland and U.S. Trade Representative Robert Lighthizer, and that the three are closer to agreeing new rules for autos that are vital for a deal.

However, Guajardo, who is eager to reach an agreement on all the principal aspects of a modernized NAFTA before sealing a new deal, said plenty of other issues were outstanding.

“I have to make very clear (that) the quality of the agreement and the balance of the agreement has to be maintained. So we are not going to sacrifice balance and quality for time,” he told reporters on the doorsteps of Lighthizer’s office.

“We believe there is a way to solve autos. I think we are trying to make a very good effort ... We are looking at the whole set of items we have to solve. So it’s not autos, it’s everything else.”

Guajardo and Freeland have been meeting Lighthizer separately since the start of the week. Friday’s trilateral meeting will be the first held this week.

Drafting new rules of origin governing what percentage of a car needs to be built in the NAFTA region to avoid tariffs has been at the center of the talks to update the 1994 deal. It forms a key plank of the Trump administration’s aim to boost jobs and investment in the United States.

Officials and industry sources say the three sides have been gradually narrowing their differences on autos.

However, several other major issues are still unresolved, including U.S. demands for a five-year sunset clause that would allow NAFTA to expire, and elimination of settlement panels for trade disputes.

U.S. House Speaker Paul Ryan set a May 17 deadline to be notified of a new NAFTA to give the current Congress a chance of passing it. The United States will hold elections in November for a new Congress that will be seated early next year.

Mexico’s top trade official, however, said time was running short to meet such a deadline. Mexico will hold its presidential election on July 1.

Reporting by David Ljunggren; Writing by Anthony Esposito; Editing by Paul Simao

REUTERS. MAY 11, 2018. Trump to sit down with major automakers on Friday on fuel rules
David Shepardson

WASHINGTON (Reuters) - U.S. President Donald Trump will meet 10 major automakers at the White House on Friday to discuss the fate of landmark fuel efficiency standards and a looming confrontation with California and other major states.

A draft proposal circulated by the U.S. Transportation Department would freeze requirements at 2020 levels through 2026, but the administration is not expected to formally unveil the proposal until later this month or in June.

Major automakers reiterated this week they do not support freezing requirements but say they want new flexibilities and rule changes to address lower gasoline prices and the shift in U.S. consumer preferences to bigger, less fuel-efficient vehicles.

Automakers also want the White House and California to reach agreement on maintaining national standards, fearing a prolonged legal battle could leave them facing two different sets of rules and extended uncertainty.

Trump plans to tell automakers he is willing to support a freeze and challenge California but wants the industry to back the effort, a senior administration official said. He also wants to know if they want him to fight on their behalf, the official said.

The chief executives of General Motors Co, Ford Motor Co, Fiat Chrysler Automobiles, along with senior U.S. executives from Toyota Motor Corp, Volkswagen AG (VOWG_p.DE), Hyundai Motor Co, Nissan Motor Co, Honda Motor Co, BMW AG and Daimler AG will meet Trump, along with the chief executives of two auto trade groups.

Trump went to Michigan, a state that helped him win the presidency, in March 2017 and suggested he would soften the fuel rules. “The assault on the American auto industry is over,” he told autoworkers there.

California and 16 other states covering about 40 percent of the U.S. population filed suit last week to block the Trump administration’s efforts to weaken the requirements.

A White House official said Trump would hear from the automakers about the impact of the administration’s forthcoming revisions to Corporate Average Fuel Economy rules and automakers’ efforts to negotiate a national program with California.

‘MARKETPLACE REALITIES’

U.S. Trade Representative Robert Lighthizer, Transportation Secretary Elaine Chao, White House economic adviser Larry Kudlow, Environmental Protection Agency chief Scott Pruitt and White House aide Chris Liddell are among the administration officials scheduled to attend the session, which is expected to last an hour.

Mitch Bainwol, who heads the Alliance of Automobile Manufacturers, told a U.S. House committee on Tuesday the industry supports “standards that increase year over year that also are consistent with marketplace realities.”

Bainwol said the industry remains hopeful that there will be a “negotiation” between the White House, California and the auto industry.

Automakers may also use the Trump meeting to raise proposed controversial changes to the North American Free Trade Agreement, officials said.

Trump is likely to also raise an idea - first reported in early April - about requiring imported automobiles to meet stricter environmental standards, the administration official said.

Automakers plan to argue that Trump should view California as a flawed trade deal and he should help them get a better deal, two auto officials said.

The industry also notes it faces rising fuel efficiency standards around the globe and is spending billions of dollars to introduce new battery electric vehicles in the coming years.

The Transportation Department proposal also asserts that a 1975 federal law preempts states from imposing emissions rules, even though California has received numerous waivers under the Clean Air Act to set emissions rules.

Democrats and environmental advocates plan to aggressively challenge the Trump administration’s plans to weaken the vehicle rules touted by the previous Obama administration as one of its biggest climate actions.

Volkswagen AG
172.3
VOWG_P.DEXETRA
+0.70(+0.41%)
VOWG_p.DE

VOWG_p.DE

The Trump administration plans to argue the weaker rules will lead to cheaper vehicles, boost sales and employment and improve safety by prodding faster turnover of older vehicles.

The Obama rules adopted in 2012 sought to double average fleet-wide vehicle fuel efficiency to about 50 miles (80 km) per gallon by 2025, but included an evaluation due by April 2018 to determine if the rules were appropriate.

Unlike many other Trump meetings with business leaders, Friday’s meeting will be closed to the media.

Reporting by David Shepardson; Editing by Paul Tait

LABOUR MARKET

StatCan. 2018-05-11. Labour Force Survey, April 2018

• Employment — Canada: 18,604,000; April 2018; -0.0% decrease (monthly change)
• Unemployment rate — Canada: 5.8%; April 2018; 0.0 pts (monthly change)
• Source(s): CANSIM table 282-0087: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=2820087&&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=

Employment was essentially unchanged in April and the unemployment rate held steady at 5.8%.

On a year-over-year basis, employment grew by 278,000 (+1.5%). The increase was due to gains in full-time employment (+378,000 or +2.6%), while part-time work declined (-100,000 or -2.8%). In the 12 months to April, total hours worked were up 1.9%.

Chart 1: Employment

Chart 2: Unemployment rate

Highlights

The number of employed core-aged women (25 to 54) increased from March to April. At the same time, employment decreased among youth aged 15 to 24.

Among the provinces, employment rose in Manitoba and Nova Scotia, while it declined in Saskatchewan.

More people worked in professional, scientific and technical services, as well as in accommodation and food services. In contrast, employment declined in wholesale and retail trade and in construction.

The number of public and private sector employees and the number of self-employed workers were little changed in April.

Employment rises for core-aged women, decreases for youth

For the core-age population, employment rose 29,000 in April, driven by an increase among women (+20,000). The employment gains for women in this group were all in full-time work. At the same time, the unemployment rate for the core age group rose 0.1 percentage points to 4.9%. On a year-over-year basis, the unemployment rate was down 0.7 percentage points, and employment increased for both core-aged men (+70,000 or +1.1%) and women (+57,000 or +1.0%).

For youths aged 15 to 24, employment fell by 23,000 in April, due entirely to a drop in part-time work. Despite the decline in employment, the unemployment rate for this age group was little changed at 11.1%, as fewer youths participated in the labour market. In comparison with April 2017, youth employment was virtually unchanged. From May to August, the Labour Force Survey will be collecting labour market data on youths aged 15 to 24 who were attending school full time in March and who intend to return full time in the fall.

Among people aged 55 and over, employment was little changed as a decline in the number of employed men was mostly offset by an increase for women. At the same time, the unemployment rate for this age group remained at 5.3%. On a year-over-year basis, employment for people aged 55 and over grew by 149,000 (+3.9%), outpacing their population growth rate (+2.9%). The employment growth was faster for women (+98,000 or +5.7%) than for men (+51,000 or +2.4%).

Chart 3: Unemployment rate by province, April 2018

Employment little changed in most provinces

In April, 4,100 more people worked in Manitoba, all in full-time employment. The unemployment rate was virtually unchanged at 6.1%. Compared with April 2017, the number of employed people in the province increased by 5,900 (+0.9%).

In Nova Scotia, employment increased by 2,700 in April. The unemployment rate continued on a downward trend, falling by 0.7 percentage points to 6.7%, the lowest rate since comparable data became available in 1976. On a year-over-year basis, employment was up 8,000 (+1.8%), largely due to a strong upward trend in full-time employment that began in the autumn of 2017.

There were 4,900 fewer employed people in Saskatchewan in April, and the unemployment rate rose 0.5 percentage points to 6.3%. Compared with April 2017, employment was little changed in the province.

In Ontario, employment held steady in April and the unemployment rate was little changed at 5.6%. On a year-over-year basis, employment in the province rose by 133,000 or 1.9%, all in full-time work.

In Quebec, both employment and the unemployment rate were little changed in April. Compared with 12 months earlier, the number of people working in the province was up 73,000, largely as a result of growth in the second and fourth quarters of 2017. Over the same period, the unemployment rate declined by 1.0 percentage points to 5.4%.

The number of people working in British Columbia was little changed in April, as growth in full-time work was offset by a decline in part-time employment. At the same time, the unemployment rate increased by 0.3 percentage points to 5.0% as more people looked for work. Employment in the province has been relatively flat since June 2017, while on a year-over-year basis it was up 23,000 (+0.9%).

Industry perspective

Employment in professional, scientific and technical services rose by 21,000 in April, after trending down from November 2017 to February 2018. On a year-over-year basis, employment in the industry rose by 34,000 (+2.3%).

The number of people employed in accommodation and food services increased by 17,000 in April. Year-over-year gains were also recorded in the industry (+44,000 or +3.7%), partly due to employment being at a relatively low point in April 2017.

In wholesale and retail trade, employment fell by 22,000 in April and was little changed year over year. Employment in the industry rose steadily from October 2016 to September 2017, but has been trending down since the start of 2018.

Employment in construction was down by 19,000 in April, offsetting the gain in March. The number of people working in the industry was up 32,000 or 2.3% on a year-over-year basis, largely due to growth in the second half of 2017.

The number of employees in both the public and private sectors was little changed in April. On a year-over-year basis, there were 146,000 (+1.2%) more private sector employees, while the number of employees in the public sector grew by 75,000 (+2.0%).

Self-employment was also little changed in April. Compared with 12 months earlier, the number of self-employed workers was up 58,000 (+2.1%).

Canada-United States comparison

Adjusted to US concepts, the unemployment rate in Canada was 4.9% in April, compared with 3.9% in the United States. On a year-over-year basis, the unemployment rate fell 0.5 percentage points in both countries.

The labour force participation rate in Canada (adjusted to US concepts) was 65.3% in April, compared with 62.8% in the United States. In the 12 months to April, the participation rate declined by 0.2 percentage points in Canada, and 0.1 percentage points in the United States.

On a year-over-year basis, the employment rate in Canada (adjusted to US concepts) and the United States was relatively stable, at 62.1% and 60.3%, respectively.

Table 282-0087 ^1, 11, 13
Labour Force Survey estimates (LFS), by sex and age group, seasonally adjusted and unadjusted
monthly (persons unless otherwise noted)

• Tab 1:Data table
• Tab 2:Add/Remove data
• Tab 3:Manipulate
• Tab 4:Download
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Data table

The data below is a part of CANSIM table  282-0087.  Use the  Add/Remove data  tab to customize your table.

Selected items [Add/Remove data]

Geography ¹⁹ = Canada
Sex = Both sexes
Age group = 15 years and over
Statistics = Estimate

Labour force characteristics	Data type	2017	2018
		December	January	February	March	April
footnotes
Population 2, 14	Seasonally adjusted	30,058.9	30,094.5	30,121.8	30,154.8	30,198.1
Labour force 3	Seasonally adjusted	19,784.2	19,710.5	19,716.8	19,746.9	19,758.7
Employment 4	Seasonally adjusted	18,645.1	18,557.1	18,572.5	18,604.8	18,603.7
	Trend-cycle 15	18,575.3	18,586.6	18,593.1	18,596.7	18,599.0
Full-time employment 5	Seasonally adjusted	15,074.7	15,123.7	15,084.4	15,152.7	15,181.5
Part-time employment 6	Seasonally adjusted	3,570.4	3,433.4	3,488.1	3,452.2	3,422.2
Unemployment 7	Seasonally adjusted	1,139.1	1,153.4	1,144.3	1,142.1	1,155.0
Unemployment rate (percentage) 8	Seasonally adjusted	5.8	5.9	5.8	5.8	5.8
Participation rate (percentage) 9	Seasonally adjusted	65.8	65.5	65.5	65.5	65.4
Employment rate (percentage) 10	Seasonally adjusted	62.0	61.7	61.7	61.7	61.6

Footnotes:

1.

Fluctuations in economic time series are caused by seasonal, cyclical and irregular movements. A seasonally adjusted series is one from which seasonal movements have been eliminated. Seasonal movements are defined as those which are caused by regular annual events such as climate, holidays, vacation periods and cycles related to crops, production and retail sales associated with Christmas and Easter. It should be noted that the seasonally adjusted series contain irregular as well as longer-term cyclical fluctuations. The seasonal adjustment program is a complicated computer program which differentiates between these seasonal, cyclical and irregular movements in a series over a number of years and, on the basis of past movements, estimates appropriate seasonal factors for current data. On an annual basis, the historic series of seasonally adjusted data are revised in light of the most recent information on changes in seasonality.

2.

Number of persons of working age, 15 years and over. Estimates in thousands, rounded to the nearest hundred.

3.

Number of civilian, non-institutionalized persons 15 years of age and over who, during the reference week, were employed or unemployed. Estimates in thousands, rounded to the nearest hundred.

4.

Number of persons who, during the reference week, worked for pay or profit, or performed unpaid family work or had a job but were not at work due to own illness or disability, personal or family responsibilities, labour dispute, vacation, or other reason. Those persons on layoff and persons without work but who had a job to start at a definite date in the future are not considered employed. Estimates in thousands, rounded to the nearest hundred.

5.

Full-time employment consists of persons who usually work 30 hours or more per week at their main or only job. Estimates in thousands, rounded to the nearest hundred.

6.

Part-time employment consists of persons who usually work less than 30 hours per week at their main or only job. Estimates in thousands, rounded to the nearest hundred.

7.

Number of persons who, during the reference week, were without work, had looked for work in the past four weeks, and were available for work. Those persons on layoff or who had a new job to start in four weeks or less are considered unemployed. Estimates in thousands, rounded to the nearest hundred.

8.

The unemployment rate is the number of unemployed persons expressed as a percentage of the labour force. The unemployment rate for a particular group (age, sex, marital status, etc.) is the number unemployed in that group expressed as a percentage of the labour force for that group. Estimates are percentages, rounded to the nearest tenth.

9.

The participation rate is the number of labour force participants expressed as a percentage of the population 15 years of age and over. The participation rate for a particular group (age, sex, marital status, etc.) is the number of labour force participants in that group expressed as a percentage of the population for that group. Estimates are percentages, rounded to the nearest tenth.

10.

The employment rate is the number of persons employed expressed as a percentage of the population 15 years of age and over. The employment rate for a particular group (age, sex, marital status, etc.) is the number employed in that group expressed as a percentage of the population for that group. Estimates are percentages, rounded to the nearest tenth.

11.

The Labour Force Survey collection of tables, starting with number 282-, is large with many possible cross-tabulations for the 10 provinces and other geographic regions. To ensure respondent's confidentiality, detailed data are suppressed. Data for Canada, Quebec, Ontario, Alberta and British Columbia are suppressed if the estimate is below 1,500, for Newfoundland and Labrador, Nova Scotia, New Brunswick, Manitoba and Saskatchewan, if the estimate is below 500, and for Prince Edward Island, under 200. For suppression levels within census metropolitan areas (CMAs) and economic regions (ERs), use the respective provincial suppression levels above. While suppressing to protect respondent confidentiality has the added effect of blocking-out the lowest-quality LFS data, some remaining non-suppressed data in these very large LFS CANSIM tables may be of insufficient quality to allow for accurate interpretation. Please be warned that the more detailed your LFS CANSIM download, the smaller the sample size upon which your LFS estimates will be based, and the greater the risk of downloading poorer quality data.

13.

For more information on seasonal adjustment see Seasonally adjusted data - Frequently asked questions.

14.

From December 2000 to January 2001, there is a slight level shift in the population series. This is due to the 2015 population rebasing, which was revised back to 2001. This level shift is evident for certain age groups and in two provinces (Manitoba and Saskatchewan). These shifts are minor for labour force estimates and rates.

15.

These data represent a smoothed version of the seasonally adjusted time series. They provide information on longer-term movements, including changes in direction underlying the series. For more information, see Trend-cycle estimates: Frequently asked questions.

16.

The standard error (SE) of an estimate is an indicator of the variability associated with this estimate, as the estimate is based on a sample rather than the entire population. The SE can be used to construct confidence intervals and calculate coefficients of variation (CVs). The confidence interval can be built by adding the SE to an estimate in order to determine the upper limit of this interval, and by subtracting the same amount from the estimate to determine the lower limit. The CV can be calculated by dividing the SE by the estimate. See Section 7 of the Guide to the Labour Force Survey for more information. The standard errors presented in this table are the average of the standard errors for 12 previous months, and are updated twice a year, in February and August.

17.

The standard error (SE) for the month-to-month change is an indicator of the variability associated with the estimate of the change between two consecutive months, because each monthly estimate is based on a sample rather than the entire population. To construct confidence intervals, the SE is added to an estimate in order to determine the upper limit of this interval, and then subtracted from the estimate to determine the lower limit. Using this method, the true value will fall within one SE of the estimate approximately 68% of the time, and within two standard errors approximately 95% of the time. For example, if the estimated employment level increases by 20,000 from one month to another and the associated SE is 29,000, the true value of the employment change has a 68% chance of falling between -9,000 and +49,000. Because such a confidence interval includes zero, the 20,000 change would not be considered statistically significant. However, if the increase is 30,000, the confidence interval would be +1,000 to +59,000, and the 30,000 increase would be considered statistically significant. (Note that 30,000 is above the SE of 29,000, and that the confidence interval does not include zero.) Similarly, if the estimated employment declines by 30,000, then the true value of the decline would fall between -59,000 and -1,000. See Section 7 of the Guide to the Labour Force Survey for more information. The standard errors presented in this table are the average of standard errors for 12 previous months. They are updated twice a year, in February and August. Note that the estimate of the month-to-month change is not included in this table. It can be calculated by taking the estimate level for one month and subtracting from it the estimate level of the previous month.

18.

The standard error (SE) for the year-over-year change is an indicator of the variability associated with the estimate of the change between a given month in a given year and the same month of the previous year, because each month's estimate is based on a sample rather than the entire population. The SE can be used to construct confidence intervals: it can be added to an estimate in order to determine the upper limit of this interval, and then subtracted from the same estimate to determine the lower limit. Using this method, the true value will fall within one SE of the estimate, approximately 68% of the time, and within two standard errors, approximately 95% of the time. For example, if the estimated employment level increases by 160,000 over 12 months and the associated SE is 55,000, the true value of the change in employment has approximately a 68% chance of falling between +105,000 and +215,000. This change would be considered statistically significant at the 68% level as the confidence interval excludes zero. However, if the increase is 40,000, the interval would be -15,000 to +95,000, and this increase would not be considered statistically significant since the interval includes zero. See Section 7 of the Guide to the Labour Force Survey for more information. The standard errors presented in this table are the average of standard errors for 12 previous months and are updated twice a year, in February and August. Note that estimates of the year-over-year change are not included in the tables. They can be calculated by taking the estimate level for a given month in a given year and subtracting from it the estimate level of the same month in the previous year.

19.

Excluding the territories.

Source:  Statistics Canada. Table  282-0087 -  Labour Force Survey estimates (LFS), by sex and age group, seasonally adjusted and unadjusted, monthly (persons unless otherwise noted),  CANSIM (database). (accessed: )

FULL DOCUMENT: http://www.statcan.gc.ca/daily-quotidien/180511/dq180511a-eng.pdf

TECHNOLOGY

The Globe and Mail. 11 May 2018. What’s holding Canada’s tech sector back? Many firms face more challenges recruiting in areas such as sales, marketing and human resources than for engineering positions

SCOTT STIRRETT, founder and CEO of Venture for Canada
PARM GILL, managing partner of the Gill Group and chair of Venture for Canada.

According to a Lazaridis Institute survey of Canadian startup ecosystem stakeholders, ‘the primary inhibitor to scaling up is the shortage of experienced management and/or executive talent, as identified by 53 per cent of those interviewed.’

ISTOCK

In television shows such as Silicon Valley, fast-growing technology companies are depicted as employing predominantly software engineers. The reality of most companies is quite different, as these types of firms often have more business than just technical roles.

Consequently, many fastgrowing firms – often referred to as scale-ups – face more significant challenges recruiting for business people in areas such as sales, marketing and human resources than for engineering positions.

Training and developing more business/management talent adept at building scale-ups is paramount to catalyzing Canada’s economic potential.

WHAT ARE SCALE-UPS AND WHY DO THEY MATTER?

According to the Organization for Economic Co-operation and Development (OECD), scale-ups are defined as “all enterprises with average annualized growth greater than 20 per cent per annum, over a three-year period, and with 10 or more employees at the beginning of the observation period.”

These companies account for less than 5 per cent of all Canadian firms, but create more than 50 per cent of all new jobs. Catalyzing more scale-ups is essential to enhancing Canadian prosperity.

While scale-ups produce half of new Canadian jobs, Canada needs to foster more highgrowth firms. According to the Impact Centre at the University of Toronto, Canada “dramatically” underperforms the United States in scaling private companies, although we do perform well when compared with European countries.

If Canada catches up with the United States in producing the same number of scale-ups per capita, there will be significant positive outcomes for Canadian prosperity. Consequently, it is very important for Canada’s future that there is a better understanding of why there are not more Canadian scale-ups.

WHAT ARE THE NATURE OF THE TALENT CHALLENGES FACING CANADIAN SCALE-UPS?

According to a Lazaridis Institute survey of Canadian startup ecosystem stakeholders, “the primary inhibitor to scaling up is the shortage of experienced management and/or executive talent, as identified by 53 per cent of those interviewed.”

The same report found that skills relating to sales/marketing, organizational design and execution, product management, operational finance and internationalization are most in demand. Although there are skills shortages across many different management areas, the authors note how there is a particular dearth of individuals with relevant expertise to scale sales/ marketing functions in Canadian firms.

The Lazaridis Institute’s analysis highlights myriad reasons for why this talent gap exists, including survey respondents’ recommendations for postsecondary institutions to better serve the needs of scale-ups, through offering more tailored and relevant training in fields such as sales.

HOW CAN CANADA DEVELOP MORE INDIVIDUALS WITH MANAGEMENT/BUSINESS SKILLS TO SCALE CANADIAN FIRMS?

Given the importance of scaleups to Canada’s future, we must not just explore why there are not more of these rapidly increasing firms, but how can we create the conditions to foster more high-growth companies.

As the Brookfield Institute for Innovation and Entrepreneurship (BII+E) has found, “the propensity of prospective employees to demonstrate a growth mindset” is incredibly valued by scale-ups. According to Stanford professor Carol Dweck, those who possess a growth mindset “believe that their most basic abilities can be developed through dedication and hard work – brains and talent are just the starting point.” It is worth exploring ways that postsecondary institutions can embed enhanced “human skills” development – such as increased awareness about what is a growth mindset and how to develop it – into more programs.

BII+E has also noted that as much as 70 per cent of the internal training budgets of scaleups go to supporting the development of senior-level talent. More needs to be done to develop scale-ups’ capabilities to train junior employees through workintegrated learning, with the goal that each new scale-up is a vehicle for training hundreds of topperforming employees with managerial/business skills relevant to high-growth firms.

One idea is to incent more scale-ups and postsecondary institutions to collaborate on training programs, with an example being Shopify and Carleton’s unique Dev Degree program, which “combines an accredited university degree with double the experience of a traditional co-op.” While technical skills are important, creating similar programs tailored to developing managerial or business talent will help foster a more significant economic impact.

To address our scale-up deficit, Canada must take bold action to address scale-ups’ pressing talent challenges. Highgrowth firms contribute disproportionately to Canadian economic growth and are in urgent need of the right talent to scale.

Through investing in the development of the country’s most valuable asset – its people – Canada can become the “scale-up nation” of the 21st century.

TRADE PROMOTION

Atlantic Canada Opportunities Agency. May 10, 2018. Helping Totally Raw Pet Food Grow Capacity. Funding supports increased productivity and expansion to meet increasing demand for raw pet food

Dartmouth, NS – Supporting increased productivity in small enterprises is key to generating growth, creating jobs and strengthening Canada’s middle class. That is why the Government of Canada is investing $105,000 in Totally Raw Pet Food to help with the acquisition of new processing equipment that will increase production, develop new product lines and help meet a growing demand for this specialty pet food.

The funding was announced today by Darren Fisher, Member of Parliament for Dartmouth—Cole Harbour, on behalf of the Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development and Minister responsible for the Atlantic Canada Opportunities Agency (ACOA).

Totally Raw Pet Food will use the funds to purchase a patty maker, food dehydrator, and a walk-in freezer. The new processing equipment will enable the company to increase the volume of production and storage capacity in order to meet growing demand. ACOA is providing the repayable assistance through its Business Development Program, which helps small and medium-sized enterprises expand and modernize to improve competitiveness.

Today’s investment builds on commitments made by the Government of Canada and the four Atlantic Provinces to drive economic growth in the region through the Atlantic Growth Strategy. The strategy supports strategic investments in projects that will spur value-added opportunities for resource-based industries such as the fisheries, forestry and agriculture to expand and diversify the economy.

Quotes

“Our government knows that business success in Atlantic Canada requires innovation and increased productivity. Companies like Totally Raw Pet Food are creating well-paying jobs here in Nova Scotia. We want to help firms in Atlantic Canada increase exports, forge global partnerships, attract foreign investment, and create more jobs and greater prosperity for the middle class.”

- The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development and Minister responsible for ACOA

“This expansion project will enable Totally Raw Natural Dog Food to increase its production capacity, explore new product lines and allow the local producer to increase its market share.  We are proud to support this company as it improves productivity and efficiency, creating a product that focuses on nutrition and health.”

- Darren Fisher, Member of Parliament for Dartmouth – Cole Harbour

"I would like to thank ACOA for its ongoing support. ACOA’s participation in our business has resulted in meaningful employment opportunities for Nova Scotians. Our ongoing relationship has helped us stay competitive, grow and innovate." 

     - Karen Campbell, Co-Owner, Totally Raw Pet Food

Quick facts

• Totally Raw is the largest producer and distributor of all natural, unprocessed and filler free pet nutrition products in Atlantic Canada.
• Totally Raw produces a range of natural ​products for dogs and cats, including ground dinners, whole foods, bones, treats and supplements.
• As a result of this investment, the company will hire two full-time production staff and maintain 10 full time employees.

THE GLOBE AND MAIL. REUTERS. MAY 11, 2018. Canada’s labour market stalls in April as economy sheds 1,100 jobs

The Canadian economy unexpectedly shed jobs in April on the back of a drop in part-time positions, bolstering bets that the Bank of Canada will hold interest rates steady when its policy makers meet later this month.

The decline of 1,100 jobs reported by Statistics Canada on Friday was well short of economists’ forecasts for an increase of 17,400. The unemployment rate was unchanged at 5.8 per cent, as expected.

Still, economists said the details of the report were encouraging, with full-time jobs rising and an acceleration in wage growth supporting expectations of another rate increase in July.

“There is nothing about this report that is going to cause the Bank of Canada to rush into a rate hike,” said Andrew Kelvin, senior rates strategist at TD Securities.

“We are still pretty comfortable looking for them to wait until July to lift rates.”

The Canadian dollar pared gains against the greenback immediately after the report.

Markets see a 68 per cent probability the central bank will hike in July, which would make for its fourth rate increase over the course of a year.

While most economists expect the central bank to hold fire on May 30, markets are putting nearly 40 per cent odds on an increase this month, making for a sizable minority view.

Average hourly wages were up 3.3 per cent in April from a year ago, the strongest annual rate since January. The Bank of Canada has been looking for a stronger pickup in wages to confirm the robust job gains Canada saw through 2017.

The bank acknowledged last month that wages have continued to pick up as expected and that it is watching the labor market for signs of remaining slack.

The provinces of Ontario and Alberta have both raised their minimum wages recently.

Nationally, the weakness in job growth last month was driven by a drop of 30,000 in part-time jobs, which offset a gain of 28,800 full-time positions.

By industry, the construction sector lost 18,900 jobs, while the trade sector, which includes retail and wholesale jobs, shed 22,100.

Construction jobs may have been hurt by unusually bad weather in April and could rebound, Andrew Grantham, economist at CIBC wrote in a research note.

The declines were tempered by a 21,300 increase in jobs in professional and scientific services, while the accommodation and food sector added 16,900 jobs.

WORLD ECONOMY

REUTERS. MAY 11, 2018. Take Five: World markets themes for the week ahead

LONDON (Reuters) - Following are five big themes likely to dominate thinking of investors and traders in the coming week and the Reuters stories related to them.

1) HEY, BIG SPENDERS?

The recent U.S. tax changes are estimated to have reduced annual personal taxes by $115.5 billion. That means more money in the pockets of consumers, who drive two-thirds of the economy. Now that the personal income tax season has come and gone, and the bulk of taxpayer refunds has found their way into people’s pockets, did consumers spend more?

In fact, economists polled by Reuters see April retail sales, due on May 15, growing just 0.4 percent, moderating from March’s 0.6 percent rise. But excluding the automobile sector, sales are expected to increase 0.5 percent, after 0.2 percent in March.

Economists reckon the data will help shape the debate over how many times the U.S. Federal Reserve will raise interest rates this year. Bond markets currently are betting on at least two more increases. The combination of extra spending and tax cuts frontloaded the positives, and now we wait to see if it translates into robust economic performance.

Graphic: U.S. retail sales and sales ex-autos - reut.rs/2KciTv5

2) NOISE FROM THE BLACK STUFF

Oil prices are at the highest since 2014 and the surge shows no sign of waning. In fact, $80 a barrel is within sight for Brent crude.

The U.S. decision to pull out of the Iran nuclear deal and re-impose sanctions has pushed Brent 3 percent higher this week, its biggest of five consecutive weekly rises. It is now up 60 percent over the past year.

Iranian oil exports should start falling as the new sanctions take hold. Even if other OPEC countries manage to fill that gap, the global oil market is still pretty finely balanced. Brent could reach $90 per barrel in the second quarter next year, Bank of America Merrill Lynch predicts, adding that $100 cannot be ruled out.

The question is now how this will impact inflation and central bank policy. Inflationary pressures in the developed world remain muted, but economic textbooks suggest not for long.

Graphic: Brent crude oil - reut.rs/2KfF4R7

3) EUROPE’S M&A FIZZ

M&A action has been hotting up in Europe, with April recording the highest value of monthly deals in 10 years, according to Thomson Reuters data.

This week, we’ve had a private equity firm agreeing to buy Zoopla-owner ZPG (ZPG.L), sending its shares to a record high and lifting other online consumer-focused firms such as Auto Trader and RightMove.

Japan’s Takeda (4502.T) is buying Shire (SHP.L) for $62 billion and U.S. cable giant Comcast is seeking approval for its bid to buy British pay-TV group Sky (SKYB.L).

The UK, in particular, is drawing attention from foreign buyers due to the still-depressed levels of the pound and the fact that stocks trade at a discount to their long-run average on a 12-month forward PE basis.

Credit Suisse Wealth Management added UK equities to their most preferred markets, while Bank of America Merrill Lynch say they are rotating from Europe to the UK.

The Euro Stoxx index .STOXXE is close to fully regaining all the ground lost during the February volatility shock, while the UK’s FTSE 100 .FTSE is flat on the year, after being down as much as 10 percent some weeks back. Deal-making activity could provide the lift into positive territory for both benchmarks.

Graphic: European monthly M&A - reut.rs/2rA943p

4) MARRIAGE OF CONVENIENCE?

After weeks of wrangling, Italy may soon get a new government made up of the far-right League and the anti-establishment 5-Star Movement. But for markets, which have so far taken Italian political risks in their stride, a League/5-Star tie-up is the worst-case scenario; both groups are hostile to EU budget restrictions and have made electoral pledges that would cost billions of euros to implement.

No wonder the cost of insuring Italian debt against default have crept up, bond yields IT10YT=RR have hit 7-week highs and shares are set for their biggest weekly fall in seven weeks .FTMIB.

The Italian/German bond yield gap DE10YT=RR, a key indicator of relative risks, has also widened. But it remains below levels seen before the March 4 election; clearly some investors are still willing to look beyond the politics.

After all, a week is a long time in politics and the two parties are yet to agree on who will be prime minister. And a 5-Star member has even hinted the premier may be an independent figure not affiliated to either group.

Graphic: Waking up to Italian political risk - reut.rs/2KcwsdY

5) BACK TO THE 90s

Malaysian markets re-open next week after investors had two days to chew on a shock election result that saw incumbent prime minister Najib Razak lose to 92-year old Mahathir Mohamad, the end of an uninterrupted six-decade run for the ruling coalition.

Offshore markets are uneasy: the ringgit lost 4 percent on the non-deliverable forwards market MYR3MNDFOR= and an overseas Malaysian equity fund (EWM.N) showed a 6 percent drop. The cost of insuring against default on Malaysian debt MYGV5YUSAC=R rose to more than 90 basis points from 78 before the election.

The fear is that Mahathir, who was in power for 22 years until 2003, including during the late-1990s financial crisis, will fulfill pledges to remove the goods and services tax, scrap toll fees, reinstate fuel subsidies and renegotiate Chinese investment deals.

ZPG PLC
490.0
ZPG.LLONDON STOCK EXCHANGE
+114.80(+30.60%)
ZPG.L

ZPG.L4502.TSHP.LSKYB.LEWM.N

That would hit budget revenues. Mahathir has also vowed anti-corruption reform, but whether better governance can be achieved remains to be seen. For now, uncertainty takes center stage. - Veteran Malaysian leader Mahathir scores shock election win- Malaysian markets leery over Najib’s defeat, Mahathir’s return- Mahathir’s shock Malaysian election win raises populist economics spectre- Malaysia central bank holds key rate as election shock spurs economy concerns.

Graphic: Malaysia's election shock - reut.rs/2rx4vGO

Reporting by Daniel Bases in New York; Marius Zaharia in Hong Kong; Jamie McGeever, Dhara Ranasinghe and Kit Rees in London; compiled by Sujata Rao; Editing by Kevin Liffey

COMPETITIVENESS

Competition Bureau Canada. May 10, 2018. Building antitrust with trust. Speech. Remarks by John Pecman, Commissioner of Competition. Canadian Bar Association Spring Conference. Toronto, Ontario

Thank you for that kind introduction.

So I’m feeling sentimental today. Because this is the last time I’ll be talking to you as Commissioner. This day, for me, has me thinking a lot about how we all move through life. One day you’re 21, and your whole career is ahead of you. You blink and 35 years are gone. Just like that.

So much has changed in that time. And yet the Leafs still haven’t brought home the Stanley Cup. Next year, right?

For three decades I’ve had the honour of working at Canada’s Competition Bureau: internationally recognized as a leader in effective competition enforcement.

Back in 1984, when I started as a case handler fresh out of school, I never expected—or planned—to serve as Commissioner. But life is full of surprises. And leading this agency and its staff is an experience that’s given me so much. Both professionally and personally: it has been the high point of a thoroughly rewarding career for me.

I’ve talked a lot about the intersection between competition and innovation. And about emerging issues in the digital economy. A lot of looking ahead. But today, something different.

Let’s look back a little – back to 2012. It’s yet another bad year for the Leafs (they hit the golf course early for the 7th straight season that year). But that’s also the year I got a new job: appointed as Interim Commissioner.

I have to tell you that call was entirely unexpected. And in accepting it, I made it clear I’d no intention of serving as a caretaker. So I charted my own course. And I did it the way that matters deeply to me. By building trust.

Why was that so important?

Because now—like then—declining public trust is a major challenge in our society. We can’t ignore this. Trust is integral to the very survival of institutions and building a better tomorrow for our kids. It’s the key to strong governance, to successful public policy and—in our case—to effective enforcement and advocacy.

My mission in 2012 was to make the Bureau a trusted institution.

Trusted by the legal and business communities. Trusted by Canadian consumers. Trusted by governments and enforcement partners, both domestic and international. I laid the groundwork for that in my very first speech as Commissioner. I talked about trust through collaboration.

Research tells us when we talk about public institutions, a number of key elements of trust-building are at play: transparency, openness, inclusiveness, reliability.

So I set out to make the Competition Bureau open, transparent and collaborative.

I did that based on everything I’d learned over my previous 30 years at the Bureau as an investigator, manager and senior executive. This organization taught me everything I needed to know to do this job. And knowledge is only useful when it’s shared. So, there are three big lessons I learned that I want to share with you now.

• First, that our approach means everything where trust-building is concerned.
• Second, that we’re defined by the challenges and the successes we experience in getting there.
• And finally, I’m going to talk about how we can apply what we’ve learned. So all of you – moving forward and working together – can keep improving the Bureau’s effectiveness as Canada’s competition watchdog.

Approach to trust building

So, my first point: approach is everything.

When I was appointed Commissioner in June of 2013, whether it was merited or not, I saw myself – as coined by my usually loving wife Susan – as a “Black Swan”. I was the first career Bureau staffer and the first non-lawyer to head the organization. So that was different. And on top of that, I had set some pretty lofty goals for the Bureau. So that meant change.

People saw it that way. And they were right. Because I sure did.

Looking at this job, I saw four must-do things to make the transition work:

• Adopt a shared compliance approach;
• Increase our guidance;
• Enhance our domestic and international partnerships; and
• Restructure the organization through an internal realignment.

Let me tell you about each of these.

Shared compliance

First: shared compliance.

Changing the relationship with stakeholders had to happen first. Because it signalled a shift in how we would approach compliance going forward. A more altruistic approach. And so I began talking about shared compliance very early in my tenure, and followed up quickly with implementation.

And people took notice.

As you’ve heard me say many times, knowing the roles we each play in ensuring compliance with the Competition Act and other legislation enforced by the Bureau is critical. It’s a shared responsibility. Not just by the Bureau, but by the legal and business community, too.

With this new approach, we made collaboration the cornerstone. We engaged our counterparts in international and domestic law enforcement. We sought their expertise. And in learning from our experiences, we reached out to our partners in the legal and business communities.

From there, we revised the Corporate Compliance Bulletin and established a Compliance Unit. It now oversees and coordinates all of our compliance-related activities. We published the Competition and Compliance Framework, which provides guidance on how the Bureau promotes compliance through a wide variety of outreach, advocacy and enforcement tools.

I believe now what I did then: that this collaborative approach really works. It’s helped us immeasurably in ensuring compliance with the law. More than what we could do alone.

I know this because I’ve seen the results. Case in point: look at the recent, very public announcement by Loblaws – that it would voluntarily enhance its competition law compliance program and move to an independently audited ISO standard. As you know, this is in response to its role as an immunity applicant in an alleged industry-wide price fixing arrangement involving packaged bread products.

Increased guidance

Next on that list is increased guidance.

Greater clarity, transparency, and certainty for the business and legal communities was integral to improving our accountability and, hence, our relationships with them. It made our work more effective, too. So we worked hard to put in place an Action Plan on Transparency. This laid out how we intended to approach increasing transparency about our work. The goal being a more cost-effective, efficient and responsive agency.

Increased guidance also showed up in how we spoke as an organization. We increasingly used position statements. And we are updating other key enforcement-related guidance documents.

More recently—to provide insight into the impact of Big Data on competition enforcement—we authored an internationally award-winning white paper on this topic.

Since 2013, we’ve published 71 position statements and 70 separate technical guidance documents.

As I mentioned before, our work to increase guidance is far from finished. We’re currently consulting on, or developing, a number of important documents, including:

• revised Abuse of Dominance Guidelines,
• updated Immunity and Leniency Programs,
• new Market Studies Guidelines,
• a practical guide to our approach to analyzing efficiencies,
• a retrospective efficiencies study, and
• a draft 2018-19 Annual Plan, explaining our priorities for next year.

With all of these initiatives, we recognize the importance of clarity for both consumers and the business community and the role that this plays in furthering economic growth, investment and the Bureau’s top priority—increasing compliance.

Enhancing partnerships

Third on that list is to enhance domestic and international partnerships.

The poet John Donne once said that none of us is an island unto ourselves.

That’s true for organizations, too. Strong working relationships are a hallmark of a successful organization. The Bureau’s no exception.

That’s why—over the past five years—we’ve done a lot to improve and expand our relationships with a number of our partners. We focused on organizations with whom we work most closely, including our lead department: Innovation, Science and Economic Development (ISED).

But we didn’t stop there. We signed 65 new or updated agreements that advanced our formal and informal working relationships with domestic and international partners. We also boosted our involvement in collaborative enforcement, in the review of international mergers and cartels, as well as cross-border deceptive marketing practices.

Our domestic collaborations include work with Public Procurement Canada, the CRTC and our law enforcement partners like the RCMP.

Internationally, we signed historic MOUs with India and China. And we engaged in a staff interchange with the Australian Competition and Consumer Commission (ACCC). That continues to this day. We also continue to work collaboratively on building a more constructive relationship with the PPSC.

But I would like to take a moment today to highlight the evolution of the Bureau’s long-standing relationship with the CBA.

We can all agree that, today, the Bureau and the Bar have a strong, positive working relationship. One that has helped compliance and lead to better competition law and policy products. One of fruitful collaboration and dialogue on many subjects. But it wasn’t always this way. Look back to 2006, and you see a broken relationship. One that was long overdue for repair.

So we took steps to fix this. Together.

Starting in 2006, as Assistant Deputy Commissioner, Criminal Matters Branch, I participated in a Task Force on Collaboration between the Bureau and the CBA. Alongside the late Bill Miller, Melanie Aitken and a number of you in this room, we developed recommendations to mend fences and promote collaboration. For guidance, we used the model employed by our friends at the ABA and the US antitrust agencies.

This set the stage for the Bureau and the CBA to work better together. And it worked.

Our work is inherently interconnected. So it was logical to bring people closer together so that our respective actions reflected that interconnectedness. Members of my management team became more involved in the leadership of the various CBA section committees. We improved the depth of dialogue between the CBA executive and our Senior Management Committee each year on the sidelines of the Fall conference. The fact that my office is engaged in your monthly section executive calls is also a testament to our shared values of transparency and collaboration.

In 2009 and 2010, the Bar’s advocacy and support was critical in implementing amendments that modernized our competition law: bringing important parts of it into line with the standards of our most important trading partner – the United States. The CBA’s support and input was also crucial for the Bureau’s guidance to consumers and businesses that flowed from these amendments, such as the Competition Collaboration Guidelines and the revised Merger Enforcement Guidelines.

When the Bureau’s focus shifted towards enforcement, we found ourselves in a more adversarial relationship and collaboration took a back seat. The Bureau was finding its feet under a new legal framework, and the relationship became more transactional. But, even during this rocky period, we came together as friends every year before the CBA Fall Conference at the annual Bill Miller Charity Golf Tournament to knock a few around.

Collaboration is fundamental to achieving shared compliance. It’s the key to trust building. Early on in my mandate, the CBA provided valuable input on our guidance in this area – the Corporate Compliance Bulletin.

Since then, the CBA has been instrumental in helping foster a culture of shared compliance, both directly and indirectly. The CBA’s above-and-beyond contributions to our guidance documents—like the Bulletin on Communication during Inquiries, and the award-winning Intellectual Property Enforcement Guidelines—are proof of this renewed collaboration.

You provided constructive input well beyond written submissions: these products are far better for it. As well, the SIR task force and the working groups that are tackling issues such as merger service standards are building capacity on both sides toward achieving a shared compliance culture in Canada.

In 2016, the CBA made a thoughtful and considered submission on the Government’s Innovation Agenda, highlighting the fact that competitive intensity fosters innovation. And last year, the CBA supported the major principles set out in the Bureau’s Big Data white paper. Both of these contributions helped to advance these priority areas for the Canadian economy.

Our renewed collaborative relationship has also yielded results abroad. I saw this in action in March, when Huy Do—a member of the CBA section executive—accompanied Jonathan Chaplan, Nigel Caesar and I to Vietnam to provide technical assistance to their developing competition law enforcement agency.

The force of our work together also spilled over to the Competition Tribunal / Bar Liaison Committee, where we are working jointly to improve adjudicative processes before the Competition Tribunal. For example, in 2016 this work resulted in the Tribunal practice direction on the use of mediation in matters before the Tribunal. This paved the way to the efficient resolution of several matters. In the coming months, my hope is that the Tribunal will finalize its Practice Direction regarding Scheduling, as well as issue a Fast-Track Practice Direction, both of which will serve to further improve the efficiency of the Tribunal’s processes.  Collaboration among the Tribunal, the private bar and the Bureau though the Bench and Bar Committee has been instrumental in moving these very worthwhile initiatives forward.

I would like to give the CBA a heartfelt thank-you for their teamwork over the past five years. I hope you feel, like I do, that the risk of working together has paid off in building trust and significant improvements in the enforcement of Canada’s competition law.

But there’s still more work to be done. I know that many great initiatives are under way, from the Mergers task force to the exciting new competition law moot. These projects will serve to further strengthen the relationship going forward, and I am looking forward to seeing the results from the “other side” in the not-too-distant future.

Internal realignment

There’s one more critical item on the list: realignment.

I’ve talked a lot about building trust through our external work. But the biggest challenge we’ve tackled in the past five years was internal to the Bureau: reorganizing the way we worked.

We broke down silos that once prevented us from working as efficiently as possible. We became “One Bureau.” That only happened through deliberate work.

We transformed an abstract concept into a mindset from which we operate. And it wasn’t easy. It began with a process we called realignment, which included internal restructuring, a new governance structure, increased delegation, and a three-year strategic plan.

This was a big shift. No more of that insular, unilateral approach that was no longer serving the Bureau or anyone else well. While it was the most drastic change we’ve undertaken in the past five years, it also was essential.

All of our external work wouldn’t matter unless we could build internal trust. Doing that meant following what evidence continues to show is critical for trust-building: increasing collaboration and engagement, recognizing and growing excellence, providing greater latitude to staff and sharing information.

Here’s what we did. We reduced the number of branches. So we could have greater internal collaboration. And so we could create what I like to call the “Crown Jewel” of realignment: the Competition Promotion Branch. This was to be our outward-facing branch, charged with tearing down the proverbial wall surrounding the Competition Bureau.

We established a new governance structure and increased delegation of authority for better decision making on the ground. Finally, we developed a three-year strategic plan that outlined our guiding principles, core values and our commitments for the coming three years in five key areas to: increase compliance, empower Canadians, promote competition, collaborate with partners and champion excellence.

I feel a sense of accomplishment about many things that took place during my tenure. But I’m exceptionally proud of the way Bureau staff pulled together to make restructuring a reality. Specifically, my heartfelt thanks go to the Bureau’s senior management team, without whom none of this would have been possible. Their support empowered our team and made the Bureau more effective.

Challenges and successes

In my introduction, I said there are three big lessons I’ve learned. Here’s the second: we’re defined by the challenges and the successes we experience in getting there.

It’s not just that we accomplished a list of things. We did that. But look at the approach we took. That’s been huge. It’s returned the Bureau to its role as a thought leader, both within Canada and on the international scene.

Here are a few examples.

Enforcement

First, there’s our new approach to enforcement.

Between 2013 and 2017, we saw an estimated $2 billion dollar increase in savings for consumers. That came from ending anti-competitive activities. At the same time, there was a jump of over $18 million in administrative monetary penalties. And we’ve more than doubled the number of investigations we are completing year over year. That’s from 28 in 2013 to 60 in just the first three quarters of 2017.

Looking at our new, shared approach to compliance, we’ve more than doubled our use of consent agreements, signing over 60 since 2013. We’ve employed alternative resolutions in 115 cases. And we’ve delivered over $19 million in restitution to Canadian consumers. This really underscores the success of our new approach.

These are all truly important accomplishments, because each one reduces reliance on the courts and enables us to use resources in the most efficient way possible. It means Canadian consumers get served well. Let me recap a few of the more notable cases.

Our investigation of retail gasoline price fixing has thus far resulted in 33 individuals and seven companies pleading or being found guilty, with fines totalling over $4 million. This was the Bureau’s first fully prosecuted win (Les Pétroles Global) in a cartels case in a number of years. It also resulted in two landmark decisions from the Supreme Court, confirming Crown immunity from testifying in a class action to which it is not a party (Thouin) and clarifying the law of evidence regarding disclosure of Bureau-held evidence in follow-on class actions (Jacques). The prosecution of this case continues, as one individual still awaits trial.

There is also our ongoing investigation into auto parts bid rigging in Canada. There, to date, we’ve had eleven guilty pleas and record-setting fines of over $84 million. The Bureau’s use of comity in resolving its case against Nishikawa Rubber with a US$130 million fine was unprecedented. And both the Bureau and its U.S. Department of Justice counterparts demonstrated that success can be realized through close cooperation.

The value of cases like these cannot be understated. We all know that cartel activity is the most difficult to detect and the most egregious anti-competitive behaviour, depriving consumers of competitive prices, better choice and greater innovation.

Next, there was the Bell/Astral merger. Resolved outside of litigation using a combination of structural and behavioral remedies, it was an early example of the potential for great negotiated results. And, as it was the first transaction to land on my desk – it sent an important signal about my intended approach as Commissioner.

Another notable merger case was the Parkland/Pioneer matter. Here, a number of firsts. The first time in the history of the Tribunal that a consent agreement was negotiated through mediation—sending a powerful signal about our new shared compliance approach. It was the first case of a contested injunction in a merger application. And it was the first time coordinated effects formed part of the Bureau’s theory-of-harm in a merger case brought before the Tribunal.

Digital economy and innovation

The Bureau’s approach to challenges is just as important as how it achieves successes. Look at how we’ve tackled the increase in digital economy and innovation cases.

In the past five years, enforcement in the digital economy has become a growing issue. It’s almost redundant to even use the term digital economy any more. It’s all the economy now.

Building trust in the digital marketplace through strong, principled enforcement is key. Both for consumers and businesses.

That’s why we focused our efforts in this area on building our knowledge base and our enforcement experience. We made it clear early on that the Bureau wasn’t afraid to take on significant players.

Perhaps the most significant of these – particularly in terms of supporting innovation – was our case against the Toronto Real Estate Board. That’s a case we pulled from the ashes in 2013.

The Board was found to have blocked its members from offering innovative brokerage models by restricting access to data. The landmark Tribunal decision in this case, subsequently upheld by the Federal Court of Appeal, underscored the crucial link between innovation and competition and the Bureau’s role in upholding them both. This case, which is now awaiting a decision from the Supreme Court on TREB’s leave application, has been in litigation every day of my tenure as Commissioner. It underscores the Bureau’s dogged commitment to taking on anti-competitive activity that hinders innovation and competition. If implemented, this decision will bring greater choice and innovation to Canadian families making one of the most significant transactions of their lives.

The Bureau’s investigation into e-books also provided important judicial guidance. The Federal Court’s February 2018 decision to reject Kobo’s application to challenge the consent agreement clarified the scope of third party challenges to settlements by way of judicial review. The Court found that these challenges should be heard only in “exceptional cases.” Further, in another of the many e-books proceedings, Justice Gascon suggested that Section 90.1 can apply in respect of economic activities occurring beyond Canadian borders which have an anti-competitive effect in Canada.

We also took on a number of digital economy cases that addressed deceptive marketing practices. They included drip pricing, astroturfing and misleading advertising. Big cases. Ones that boosted consumer confidence in the online marketplace. Cases that proved the Bureau would not shy away from taking on big players or complex issues in the digital space.

One of our early forays into this arena was our negotiated settlement with Bell Canada for its role in encouraging employees to post positive reviews and ratings for certain of its on-line products.

Drip pricing—the addition of significant hidden fees late in the payment process which inflate an advertised price—figured prominently in our recent enforcement work.  This includes our current legal action against Ticketmaster and its parent company, Live Nation. We took action to prevent them from allegedly making deceptive claims to consumers when advertising prices for sports and entertainment tickets.

We also successfully reached consent agreements with Avis, Enterprise, Budget, Hertz and Dollar Thrifty. In each of these cases, the Bureau concluded there was false or misleading advertising of prices and discounts on car rentals via websites, mobile apps and emails.

I know the Bureau will continue to address this long-standing issue for consumers who rightfully expect the price they see is the price they will pay.

I also know that the Bureau will continue to take on large IT giants as we did successfully with Amazon Canada, when our investigation put an end to unsubstantiated savings claims. In resolving this case Amazon not only corrected its pricing practices in Canada but also in other jurisdictions.

Finally, in the vein of collaborating to deliver results for consumers, our participation in a class action settlement with Volkswagen related to false and misleading claims about fuel economy, which was recently approved by the courts, will result in significant compensation to consumers. I’m proud to say that we made history through our collaborative work with plaintiffs and defendants on this file.

Advocating for increased competition

Let me take a moment and talk about advocacy.

As everyone in this room knows, reinvigorating the Bureau’s advocacy work has been a central part of the Bureau’s approach over the past five years.

We did this with the understanding that advocacy is a critical part of the Bureau’s mission and an effective tool for increasing competition in the Canadian economy.

Like our other work, we began first with collaboration, reaching out to Canadians to gain insight about which areas of the economy they felt the Bureau could play a role in advocating for increased competition.

We began incrementally increasing our use of advocacy. First, by providing advice that informed the CRTC’s development of the wireless code of conduct. And then, showing we would not be afraid to tackle complex and challenging issues, we began our work around ride-sharing. That started with a submission to the City of Toronto. Then we wrote a white paper, which guided the development of regulations in municipalities across the country.

Since 2013, we’ve participated in over 100 advocacy initiatives and made representations before regulatory bodies on 12 separate occasions.

Our most recent market study, which examined technology-led innovation in the financial services sector (FinTech), continues to inform the development of policy at the federal and provincial levels. In fact, the 2018 federal Budget incorporated a number of the Bureau’s recommendations.

Building on the success of our advocacy and again tying in to the notion of building trust in the digital economy, we will be moving forward with two new advocacy initiatives in the near future.

I am proud to announce today that we are kicking off a market study that will examine consumer habits in purchasing internet services, with the goal of better understanding the competitive dynamics within the Canadian broadband sector. The study will explore whether there are ways to foster more competition in this sector, which could lead to more choices and lower prices for Canadians.

I know that many members of the Bar will be interested in engaging in this study. I would strongly encourage you to reach out to the Bureau through our market study notice, which is being posted online today.

We will also begin an examination of pricing practices in the digital economy that will help us better understand the potential benefits and risks to consumers and competition stemming from these practices. With Canadians spending more online every year, and with the emergence of new and evolving digital pricing techniques, this study will aim to inform and empower consumers, businesses, policymakers and regulators to build trust in the digital economy. The Bureau’s work will begin with a public consultation in the coming weeks.

I believe that our approach to reinvigorating advocacy has been valuable, effective and successful.  It has returned the Bureau to its role as a thought leader both within Canada and on the international scene. But our work is by no means finished. We can do so much more to battle public restraints to competition and to increase Canada’s competitiveness. I hope that the CBA will continue to actively engage and to work together with the Bureau to advance these goals.

Ongoing improvement

This takes me to the last of my three big lessons learned, and that’s about how we can keep improving.

I cannot emphasize enough that our successes over the past five years have hinged on the talent, dedication and ingenuity of the Bureau staff. That’s going to keep being the case going forward as the Bureau takes on new challenges.

Among them, there’s the rapid pace of change, the increasing digitalization of the global economy, and the complex enforcement issues that arise as a result. There’s also the rise of populism and the risk of divergent approaches to competition law enforcement across the globe.

All these are important changes. And the Bureau has to be ready to meet each one.

As I see it, these changes fall into four categories:

• agency effectiveness;
• legislative reforms;
• process improvements; and
• repairing an inefficient cartel model.

Agency Effectiveness

One of the greatest obstacles to increased agency effectiveness for the Bureau, I believe, is its corporate governance, which chills the Commissioner’s independent voice to promote competition. The restraints in operating a competition agency within an industry department and the challenges this creates for us have been pointed out now by numerous academics, think tanks, past heads of agencies, outside observers and elected officials over the years.
There’s broad international consensus that competition authorities should be independent from the executive branch of government. And that’s matched in support within Canada, too. Our own Competition Policy Review Panel recommended ten years ago the creation of an independent “Canadian Competitiveness Panel”, responsible for the function of competition advocacy.

It stressed this function had no place within federal government bureaucracy, as competition would—and I quote—“become just one of many factors considered” and that the perception of independence (which it considered crucial) would be tainted by housing this within government.

Why is the Bureau’s corporate governance structure and lack of an independent voice important? I’m certainly not suggesting it results in direct political influence on enforcement, but I must say that it does create other stresses. Ones that negatively impact our ability to enforce and advocate. Housed within ISED, the Bureau is one of many priorities; resources are perpetually a challenge, as is our ability to advance policy. Furthermore, we have no direct statutory powers to effectively and freely advocate for competition to governments.

Legislative reforms

Next, there’s legislative reforms. I talked about this in great detail in a speech I gave two weeks ago at The C.D. Howe Institute. There’s considerable and mounting pressure being exerted across the globe for public interest considerations to be injected into competition law enforcement. In my view, this is reactionary and unwise. For any kind of legislative reform to the Competition Act, it’s critical that a modern, economics-based consumer-welfare standard be maintained.

While concerns related to social issues like inequality and unemployment are important and should be debated, antitrust is not the appropriate tool to remedy these. Competition law is most effective when it is predictable, transparent and a-political. Injecting public interest concerns into competition law prevents it from being as effective as possible.

Yes, there are a number of legislative reforms that I feel are critical to ensuring that the Bureau is sufficiently nimble to address the challenges facing an increasingly global and digital economy. You’ve probably heard enough about my concerns with the efficiencies defence. But there is another reform that needs major attention: the addition of formal market study powers.

For the Bureau to be an effective advocate of competition for Canadian consumers, it needs formal powers to conduct market studies. That includes the power to compel information to conduct the studies.

Canada’s lack of formal market study powers falls below international standards. In a recent survey by the OECD, 68% of the competition agencies had specific powers to undertake market studies. In fact, just a couple of weeks ago, New Zealand took the first steps toward providing its competition authority with formal powers to conduct market studies without the need to identify specific anticompetitive conduct. This includes compulsory information-gathering powers.

Having formal market study powers would allow the Bureau to more robustly study and make recommendations regarding issues that currently cause substantial economic harm to Canadian consumers and businesses.

Process improvements

To meet the pace of change in the digital marketplace and to further our goal of building trust in that marketplace, we must speed up Bureau investigations and Tribunal adjudication processes.

This could take a number of forms including, earlier engagement with targets and merging parties to narrow issues and facilitate early resolution.

The implementation of a formal notification process for targets of certain offences could also expedite resolution as would issuing state of play letters during preliminary stages of complex merger reviews and other inquiries. Indeed, all of these efforts would advance the goal of decreasing timelines, transparency and due process considerations.

Repairing an inefficient cartel model

Simply put, the Bureau’s current cartel model is inefficient.

It ties up Bureau resources and leads to poor outcomes. It needs to be examined and repaired, in keeping with the approach adopted by a number of our international counterparts, like the ACCC, who have employed “dual track” approaches to proceeding against hard-core cartels.

Moving forward with a similar approach would provide the Bureau with much needed flexibility and increased enforcement efficiency by allowing the Bureau to proceed civilly in cases where the cartel conduct is less egregious. In that same vein, we should also be increasing the use of alternative dispute settlement mechanisms to get cases out of the courts, to expede resolutions and reduce the backlog in the courts.

Revising PPSC processes, in my view, also requires consideration. This could include: requiring it to issue guidance, modifying due diligence requirements to speed up guilty pleas for leniency applicants; and reducing the time from marker to plea by imposing a firm one-year time limit from receipt of the marker to the time of registering a guilty plea.

Finally, I firmly support establishing a stand-alone “whistleblower” program, similar to the model employed by the Ontario Securities Commission and some of our international counterparts, which would provide financial rewards to whistleblowers who provide information and meet certain eligibility requirements. This would be an extremely effective enforcement tool for addressing the most egregious and most challenging anti-competitive behaviour to detect.

Conclusion

As I close, I want to commend the extraordinary efforts of my Bureau’s team in the achievement of our goals over the past five years. When you lead an organization, your successes are truly never yours alone but rather belong to the staff who are the foundation of every success and achievement. The Bureau is an organization that is teeming with talented, experienced and dedicated people and, in that respect, is well positioned to tackle the challenges that await.

As for building trust, I would like to refer to the wise words of Bill Kovacic, former FTC chair and international competition law legend. Bill writes: “agency reputations can be likened to brands, and having a well-respected brand is an extremely valuable asset. The development of a strong brand is a slow growth that requires sustained contribution by agency leadership over time”. I would like to leave my career at the Competition Bureau believing we are a trusted brand in Canada – an organization that regularly demonstrated ability, goodwill and integrity – the essence of trust.

I am immensely proud of what we have all accomplished together in my thirty five years at the Bureau. Because ultimately, we have worked to maintain and promote trust that private institutions – your clients – will do right by consumers, and trust that public institutions – like the Bureau – will defend competition to the benefit of Canadians.

I sincerely hope that you and the Bureau will keep working together to continue building antitrust with trust.

Thank you.

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LGCJ.: