WE'LL BE SQUATTERS ON OUR OWN LAND By Peter Newman It is 2018, and the hollowing out of the Canadian economy is complete. The last surviving outer crust of the country's corporate doughnut has long since been swallowed up by foreign investors. Economically, Canada has been reduced to the Manchuria of the 21st century, supplying raw materials for others to process, while we export jobs and lose our best talent.
The last to go was Nortel, when a vulture fund out of Hoboken, New Jersey, took over its tattered remains. Canada's once proud digital giant had downgraded its revenue projections so often that its main asset was a broken calculator, stuck at a minus sign. Unconfirmed reports point to a harness shop in Red Deer and a cod-fishing-supply depot on Bell Island in Newfoundland's Conception Bay as token examples of the odd, overlooked or perpetually unprofitable enterprises still in domestic hands.
Then, on Dec. 10, 2018, a brief flicker of hope for a domestic industrial renaissance emerges from an unexpected quarter. Conrad Black, who is just completing his American jail sentence, declares that he has been "transmogrified" into a born-again Canadian patriot and announces his intention to repatriate his re-adopted home country's corporate assets-a process he describes as "sequestrating indigenous appurtenances." Black proclaims that foreign-owned subsidiaries are welcome under his corporate umbrella, providing they sign profitable non-compete agreements and don't expose him to security cameras.
Such a scenario is, of course, absurd. But is it any more unlikely than what has already happened? No one could have speculated that this country would voluntarily, even enthusiastically, give up ownership of such basic economic anchors as its entire steel and nickel industries; its only world-class aluminum producer; its two prime luxury hotel chains; the breweries that made the suds that once defined Canada's hip dudes; Bell, its largest communications conglomerate; its biggest winemaker; and, most recently, Cognos, the last major independent maker of business intelligence software-not to mention the abandonment into foreign hands of the Hudson's Bay Co., this country's founding commercial empire. We are precariously close to being squatters on our own land.
When we look back from 2018, we'll realize that when the takeover trend began to accelerate in 2006, it became irreversible. Whether the Americans flex their muscles by dispatching helicopter gunships into Baghdad or sending corporate raiders with bad comb-overs into Canadian boardrooms, it's all part of their determination to fulfill their manifest destiny. In contrast, Canadians coddle no pretensions of destiny-manifest or even municipal. But since we live in North America's attic, damned if we should be relegated to its bargain basement, catering to foreign trophy hunters.
The coming decade will decide Canada's economic destiny. Peter Munk is 80, Jimmy Pattison, 79, Frank Stronach, 75, Paul Desmarais, 80. The first three-and many other CEOs-have yet to designate heirs. If their firms and Canada's Big Five banks (which at the moment are still protected legislatively against foreign ownership) were taken over, only a smattering of family-controlled companies would remain in Canadian hands. That's pathetic for an economy ranked as the world's eighth largest.
Jim Gillies, dean emeritus of Toronto's Schulich School of Business, puts it most bluntly: "We need to assure that firms considered strategic to the development of our economy are not taken over. The markets alone will not provide the optimum solution. If we relied on markets alone to determine our economic destiny, this country would not exist." Happy 2018! Peter C. Newman is the author of 24 books and co-founder of the Committee for an Independent Canada
APPLE WILL OWN MARGARET ATWOOD By Robert J. Sawyer MS GoogleHoo E-mail To: Robert J. Sawyer From: Big Name Author Multimedia Agency Date: February 14, 2018, 9:31 a.m. EST Subject: Going, going...gone! Rob, baby, Happy Valentine's Day! Oh, wait-got that dang wavy purple underline in Word: intellectual-property problem. Let me correct that: Happy FedEx Valentine's Day-when your love absolutely, positively, has to be there overnight, heh heh.
Seriously, speaking of sponsorship, we're closing the bidding in two hours on the beverage product placements in your next novel. Please don't give me a hassle this time, okay, Rob? I don't care if the character is the kind of guy who'd only drink fine wine...if you want to drink anything that isn't rotgut, you'll do it my way!
I'm pretty sure Coke is going to take the Canadian rights, but Pepsi in the U.S. is hot on science fiction right now (what with their billboard on the side of the International Space Station), so I suspect they'll be the high bidder here. And just be happy that Coke and Pepsi haven't merged yet-monopolies mean only one bid!
Anyway, keep that BlackBerry implant of yours turned on, baby! I'll have more news soon.
Your pal in the Big Apple™ (all rights reserved), Jock
Intellectual property has the shelf life of a banana. -Bill Gates
To: Robert J. Sawyer From: Big Name Author Multimedia Agency Date: February 14, 2018, 11:42 a.m. EST Subject: Your book is all wet... Color me surprised! (Or should that be colour? You guys still doing that "u" thing? You do know the NorAm Economic Union is going to standardize spellings soon, right?) Anyway, Ontario Clean Water Inc. outbid Pepsi-for the U.S. rights. All the characters in your next novel are going to be kicking back cool, clear Canadian H2O-the best money can buy, as we New Yorkers well know!
Speaking of Canada, I wish I'd bought Canadian biotech stocks 10 years ago-they're going through the roof! Who'da thunk that the United States would fall so far? But I guess when you stop teaching evolution in school, you end up with no competent life scientists. And when you ban stem-cell research, well, it's no surprise that someone else is picking up the slack.
And, on the topic of Canuck ingenuity, man, I love that lawsuit you guys have taken to the World Court! Seeking a royalty on compasses because the magnetic North Pole is in Canada-that takes Timbits! Still, I guess if it's possible to claim ownership of parts of the human genome, you should be able to do the same with other natural phenomena, no? I suppose I'm not the first to suggest that if you win the case, the royalty will come to be known as the pole tax :)
Your taxing representation, Jock
Software licences are perhaps the only product besides half-eaten food, underwear and toothbrushes which can't be resold. -computer scientist Jordan Pollack
To: Robert J. Sawyer From: Big Name Author Multimedia Agency Date: February 14, 2018, 12:02 p.m. EST Subject: And speaking of taxes... I always forget about taxes when thinking about life up there in the Great Green-Now-in-Lots-of-Places North. I saw that piece on the GlobeSunStar site (hey, remember printed newspapers?) about your tax-freedom day now coming so late in the year that it coincides with your Thanksgiving. Guess that finally gives you guys a real reason to celebrate that holiday, you Pilgrimless plagiarists, you. Hey, maybe we should launch an intellectual property suit over that! I mean, maybe McWendy's should-it's their holiday now.
Yours in literature, Jock
P.S. By the way, did I tell you how much I love the new novel? Man, if it were still possible to get people to actually buy intellectual property, I bet we could have sold a ton. At least you've got the Canada Council, until it gets outlawed as an unfair subsidy, and I know its juries love sci-fi...don't they? Hey, shouldn't I be getting a cut of your grants? No, no, Rob, put that meat cleaver down... :)
If you cannot protect what you own, you don't own anything. -Jack Valenti, head of the (defunct) Motion Picture Association of America
Robert J. Sawyer is an award-winning science-fiction writer.
WOMEN WILL BE THE NEW MEN By Margaret Wente The first signs of the widening wage gap appeared back in 2008. That was the year when young women in big cities like New York and Toronto began out-earning the men-not just women who held the same jobs as men, but all women in all jobs.
Back then, no one foresaw how big the gap would get. No one predicted that women would become vastly better educated than men. Nor did they foresee the rise of an underclass of angry young males who feel they are virtually shut out of large parts of the labour force. "When 75% of university graduates are women, and men make only 60% of what women make, it's obvious that we have widespread systemic discrimination," said Jason Harmer, chair of the Royal Commission on the Status of Men.
What happened? The old "male" jobs mostly disappeared. After GM went under and Ford was swallowed up by the Chinese, what remained of North American manufacturing moved offshore. Apart from the oil sands, there were no more high-paying jobs for unskilled, undereducated males. Today, even most of the engineering and computing jobs are outsourced to Bangalore, Dalian and Ho Chi Minh City, where high-skilled, highly motivated workers compete fiercely for work.
The feminized economy is dominated by the services and non-profit sector. Virtually all the new jobs created in the past 10 years are in health and wellness, education, food services, high tech, recreation and entertainment, and most of the workers in these fields are women.
Women now lead most of our biggest public institutions-hospitals, universities and social services of all kinds. Their management style is perfectly suited to organizations that require strategic, inclusive, pragmatic leadership and a focus on team-building. No wonder today's bestselling business books have titles like How to Succeed by Thinking Like a Woman.
Women have also benefited from technology advances, which have made flexible, home-based employment a reality for more than a third of the work force. The fact that the fertility rate has plummeted to under one child per woman has also put an end to career interruptions, although it has created a looming population crisis. It's too soon to tell whether the government's new Mother Corps (which pays mothers $100,000 for each additional child, plus free daycare, free university education and a generous pension plan) will stop the population slide.
Today, women are the major income earners in two out of every three households. This historic role reversal has other far-reaching effects. Personal-service businesses are a huge growth industry. It's hard to remember a time when you couldn't pick up fresh, healthy, tasty, prepared food on every street corner to take home for dinner. The outsourcing of food prep turned the supermarket business on its head and killed off chains like Loblaws. Busy women have no time to shop in superstores.
No doubt the debate over what's become known as the crisis of masculinity will rage for years as we weigh the impact of men's sharp decline in social and economic status. Of course, not all men are doing worse than women-only about 80% of them are. The aging feminists from the 20th century are right when they argue that the alpha males still rule the world: Men are still the leading politicians and the CEOs of the biggest private enterprises. They are still the biggest entrepreneurs, risk-takers and wealth creators. Wherever ambition, aggression and ruthlessness pay off in personal rewards-money, power and prestige-the world still has a masculine face. It turns out that all those people who believed that gender would one day cease to matter were wrong. Gender matters as much as ever. It just matters in different ways. Margaret Wente is a columnist with The Globe and Mail
THE BIG FIVE WILL BE HUGE By Sinclair Stewart After nearly two decades in charge of Canada's largest bank, Gord Nixon is ready to concede that mergers "don't have a hope in hell" of occurring in his lifetime. And he's willing to shoulder some of the blame.
"The fact is, the Canadian banks have expanded quite successfully on their own," says Nixon. "I see zero political will to change the status quo."
It seems the Big Five are victims of their own success-RBC, the biggest one of all. Last year, it became the first Canadian company to record a profit of over $10 billion. It's now among the top handful of North American financial institutions, with a market value of $120 billion, outstripping foreign rivals like ING Group.
Ten years ago, only the most optimistic investor would have dreamed of numbers like these. But that was before a sub-prime mortgage collapse hammered the U.S. banks and forced the eventual break-up of industry goliath Citigroup, which sold its Mexican operations to Scotiabank.
Canadian banks, traditionally loath to make substantive foreign acquisitions, found bargains amid the carnage. RBC made the biggest foray, buying southeastern U.S. retail bank SunTrust for $30 billion. SunTrust has begun to pay off, and it's a big reason RBC draws 75% of its revenue from outside Canada.
TD Bank, meanwhile, has moved further inland. After TD Ameritrade bought troubled E*Trade in 2008, CEO Ed Clark stunned observers by exiting the discount industry through a sale to Charles Schwab. The bank used the proceeds to fund its $12-billion purchase of Keycorp, giving it a foothold in the Midwest, to go with an established presence in Maine, Massachusetts and New Jersey.
The rapid growth of RBC and TD rekindled suggestions that Ottawa might allow Bank of Montreal and CIBC to combine forces. But that was before CIBC paid $13 billion for money manager Invesco in 2010, adding wealth management to its chain of retail banks in the U.S. Southwest. Likewise, BMO bought Fifth Third Bancorp for $16 billion in 2015, when the Chicago bank ran into lending troubles.
Scotiabank, recently dubbed the "mini-HSBC" because of its international footprint, has continued to favour Latin America-it's now Mexico's No. 2 financial institution.
With this sort of activity, Ottawa has little reason to endorse mergers, acknowledged Nixon. Even if it did want to allow a single deal between BMO and CIBC-both of which have lobbied intensively for a union-there's a glaring problem: RBC could emerge with a sweetened bid, undermining the government's efforts to create more balance in the sector.
"If the feds are going to allow mergers, then they have to give shareholders the opportunity to vote on the best deal," Nixon said. "And we would be competitive in any bidding situation." Sinclair Stewart is the New York bureau chief for The Globe and Mail's Report on Business
CANADA'S OIL CAPITAL WILL GO GREEN By Chris Turner Everyone's got their own theory about what the catalyst was. It's nearly the official municipal sport-almost as popular as speculating about whether Kiprusoff will finally retire if the Flames win their third straight Cup this June. How, after all, did Calgary go from "Capital of the Oil Patch" to "Vanguard of Canada's Green Boom" in one whirlwind decade?
Lots of people point to that fateful summer of 2009, and the drought that all but dried up the Bow and Sheep Rivers and left the Athabasca so shallow that half the tar-sands operations had to shut down for want of water. They talk about the ranchland invasion of that now-infamous fringed sage-the CO2-fed shrub too woody to feed even one steer-that nearly destroyed the cattle industry. More than that, people talk about how the provincial Liberals merged with the Greens to form the Sustainable Centre Party, the big tent that finally unseated the Conservative dynasty. And about how, in particular, the first thing the SCs did was start dumping 50 cents from every dollar in fossil-fuel royalties into the half-dormant Heritage Fund, and then funnelled the interest and a chunk of the principle into a clean-tech R&D program.
Calgarians like to brag about the "Second Career" movement (another SC) that started in early 2010, when oil hit $200 a barrel and the price of a double-wide trailer in Fort McMurray hit half a million. That's when all those bright, stock-optioned professionals poured back into the city to build career number 2 as clean-tech entrepreneurs and "energy evangelists."
Remember how Enmax, heretofore the city's quiet, competent municipal power company, started spinning off renewable-energy start-ups like a Silicon Valley research lab circa 1995? That brought Canada's first decentralized green-power program to the mass market, throwing up 50,000 micro wind turbines and then 100,000 thin-film solar roofs atop big-box warehouses and suburban McMansions alike. Sure, the solar-cell sheets came from California, but it was the whip-smart number-crunchers in Calgary who built the slickest software for managing those dispersed power plants as a single, efficient "energy Internet."
It was a bit like those comparatively carefree days back at the turn of the millennium, when Calgary's municipal government hit and quickly exceeded its paltry Kyoto targets. (Remember those? And how Premier Bronconnier-Mayor Bronco in those days-was afraid to even say "Kyoto"?) The clean-tech revolution had a momentum all its own. Summer of 2012: debut of Canada's first national carbon tax and the oil patch's first industrial-scale carbon sequestration facility. Winter of 2013: Banff's big resorts stayed closed through January for lack of snow, and Calgary's stingiest-in-the-country water conservation program was brought online. Spring of 2014: Gasoline breached $4 a litre, and Calgary set a single-year world record for the laying of LRT track.
Calgarians had always bragged about the city's can-do attitude, but it took the green boom to demonstrate its real potential. The boast has weight behind it now: The whole country's headed in the only sane direction, right at that Sustainable Centre, just as fast as it can-and Calgary is one great prairie-wide stride ahead of the pack. Chris Turner is the author of The Geography of Hope
THESE SEVEN PEOPLE WILL RULE BAY STREET By Derek DeCloet The most intriguing player in Canadian business in 2018 won't be Canadian at all. It will be Oleg Deripaska, the Russian billionaire. Treated roughly by the new anti-Putin regime and denied entry into the U.S., Deripaska-who will still be one of the world's richest men, despite having several companies seized by the Russian government-will follow the path of other fallen oligarchs and move to London. But he'll conduct most of his business activities through Magna International, of which he'll wrest control in 2014 after a nasty court battle with Belinda Stronach, daughter of the late Frank Stronach. (She will jump back into politics and, by 2018, will be a cabinet minister in the Brison government.) Yes, making cars will still matter a lot to the economy, and despite Ford's decision to enter Chapter 11 in 2016, Magna will be thriving under Deripaska.
The big banks will still matter, too, and no banker will have more influence than Bob Kelly, a good ol' Halifax boy who will come home in 2012 after a successful run at the Bank of New York Mellon. Kelly's hiring will finally demolish the stupid idea that, when a Canadian bank picks a new CEO, it must hire from within, no matter how dreary the choices. You guess which bank will persuade him to return, but know this-it won't be his old employer, TD, which will be led by one of its own, a guy with the perfect Canadian name: Tim Hockey. Depressingly, the upper ranks of Bay Street will still be the nearly exclusive preserve of men. But the top cop on the Street will be a woman, Susan Wolburgh Jenah, who in 2018 will be the first director of the new National Securities Authority (finally).
It's tempting, at this point, to talk about the boys from Research In Motion. The BlackBerry is the most important Canadian brand in the world, and it will be much, much larger and more profitable by 2018. But by then, Jim Balsillie will be preoccupied with running the Vancouver Canucks and giving away his $8-billion fortune. Canada has no other new-economy companies like it, so for flexing muscle abroad, how about a dusty old-economy one instead? By 2018, CN Global Transport, as it will be renamed, will be the dominant firm in an oligopoly of three North American railroads-which it will then use to acquire container ships and cargo jets, and transform itself into a $100-billion giant. Who will lead them? Keith Creel, a VP who's rising at astonishing speed at CN. He's virtually unknown now; he won't be a decade from now.
Rogers executive Nadir Mohamed will be the most important man in telecom in 2018. After watching Ted Rogers delay his retirement for the 38th time, Mohamed will return to Telus, replacing Verizon-bound Darren Entwistle, who will stick around Vancouver just long enough to enjoy one helluvan Olympic party. What will really catapult Mohamed to prominence will be his decision to buy Bell Canada in 2012 from its private-equity owners, who will be anxious to cash out after Bell's brush with insolvency the year before.
Four who will lose clout by 2018: the Bombardier clan, Frank Giustra, Leonard Asper, and whoever's running the Toronto Stock Exchange. One who won't: Jimmy Pattison. The wrinkled little elf will turn 90 in 2018, but he'll still be working 6½ days a week, trying to sell you a used car.