Funding Status Signals Needed
The federal government needs to establish early-warning signals through disclosures of financial ratios relevant to the funding status of the pension plan, comparing the ratio of dollars spent on dividends, and repurchases or executive compensation to any unfunded liability in the pension plan, says Kevin Thomas, executive director at SHARE. While this would not compel any particular course of action, it would draw attention to the issue such that management should seek to improve the ratio before it becomes a reputational liability. The issue was brought to the fore most recently with the Sears Canada insolvency that put the pension savings of more than 16,000 workers at risk – despite the company having made large dividend payouts and share buybacks to reward investors prior to the insolvency, he says. SHARE proposes extending clawback provisions to allow recovery of dividends, executive compensation, and other extraordinary payments made while a company has underfunded its pension obligations. Where a corporate pension deficit is large or persistent, the Canada Business Corporations Act should be amended to restrict or reduce dividend payments, share repurchases, and variable executive and director compensation until such time as the solvency funding ratio surpasses a specified threshold.
Solvency Accounts Get PIAC Support
The Pension Investment Association of Canada (PIAC) supports the use of solvency reserve accounts as a means to overcome the inherent procyclicality of pension funding requirements and to mitigate the asymmetries regarding the potential for trapped surplus in plans. In its comments on the federal government’s ‘Enhancing Retirement Security for Canadians’ consultation document, it says it sees no policy downside in terms of benefit security from appropriately structured SRAs and encourages the federal government to follow the lead of British Columbia, Alberta, and Quebec in terms of making these an eligible funding mechanism for federal plans. It also supports the imposition of criteria or conditions on individual companies seeking pension funding relief as part of a package of changes in an effort to preserve the ongoing viability of the business. The transfer to self-managed accounts as an alternative to a forced immediate annuitization of terminated plans in the context of an insolvency is also supported. Potential options could include transfers to self-managed accounts as proposed, but might also include ongoing participation in a non-guaranteed balanced fund or a re-profiling of the annuity payment for certain classes of retirees. All options would need to be structured to ensure they were value-neutral across different groups of retirees.
Recession Risk Low For Canada
Despite what skittish stock markets suggest, the ‘HSBC Canada Outlook’ maintains that the risk of recession remains low over the next 12 months in Canada and the U.S. Investors are right to assume that the stock market is forward-looking, it says, but that doesn’t mean the direction of stocks definitively tells how the wider economy will perform. The noise caused by volatile returns needs to be kept in perspective and the focus put on fundamentals. It does like a lot of what it sees. Solid corporate balance sheets, low unemployment, broadly supportive interest rates, strong retail sales, and a Canadian economy that continues to grow, albeit slowly, suggest that remaining invested and staying the course is the right approach. Overall, it believes the economy will keep growing, but with periods of stock market volatility through 2019.
Foresters Signs UNPRI
Foresters Asset Management Inc has become a signatory to the United Nations-supported Principles for Responsible Investing (UNPRI). The UNPRI is recognized as the leading global network for investors who have publicly committed to integrating environmental, social, and corporate governance (ESG) considerations into their investment practices and ownership policies. In becoming a signatory, it joins some of the world’s largest investment managers, representing more than US$82 trillion in assets under administration.
‘Flexforce’ To Work As Seniors
Nearly two-thirds (64 per cent) of ‘Flexforce’ Canadians – a group that comprises gig workers, job jumpers, and postponed professionals ‒ anticipate needing to work into their senior years because they won’t have enough saved for retirement, says a TD survey. More specifically, nearly three-quarters of these same Canadians (72 per cent) are finding it difficult to save for retirement, while four in 10 (41 per cent) are not sure when they’ll retire given their employment situation. This leaves a large and growing group of Canadians following unconventional career paths feeling uncertain (47 per cent) and worried (34 per cent) about their future, with only a small number (11 per cent) claiming to feel secure about saving for retirement. When it comes to retirement goals, 55 per cent of Flexforce Canadians say they are not able to save as much as they need to each year to meet their goals, with over three-quarters (76 per cent) wishing they made financial contributions at an earlier age. Canadians report that the top three factors holding them back from contributing to their retirement savings include day-to-day bills and expenses (49 per cent), paying off existing debt (32 per cent), and paying for their lifestyle (27 per cent).
iCBT Approved As Benefit
Morneau Shepell’s internet-based cognitive behavioural therapy (iCBT) program, AbilitiCBT, will now be offered to individuals as an approved paramedical benefit through several insurance companies. This type of service is typically provided by professionals outside the public health system. This launch marks the first time that Morneau Shepell will provide iCBT directly to individuals. The program delivers research-based iCBT through a digital platform that combines therapist guidance with interactive exercises and activities to improve on traditional therapy. The program focuses on changing negative thought patterns, emotional responses, and behaviours to reduce absenteeism and improve engagement, shorten return-to-work timeframes, and reduce the costs of managing employees who are living with mental health conditions.
Harvest Completes ETF Filing
Harvest Portfolios Group Inc. has completed the initial offering of Class A Units of the Harvest Global Gold Giants Index ETF. Filed with the securities regulatory authorities in all of the Canadian provinces and territories, it is now trading on the Toronto Stock Exchange. The ETF seeks to replicate, to the extent reasonably possible and before fees and expenses, the performance of the Solactive Global Gold Giants Index TR. It primarily invests in large gold mining issuers that are listed on a regulated stock exchange in North America, Australia, or in certain European countries. It is a defensive focused ETF that targets advisors and investors who are concerned the economic cycle is in a late stage and that the U.S. dollar may weaken.
VC Funding Reaches Record Level
The final quarter of 2018 saw nearly US$64 billion in VC (venture capital) investment globally, led by a $12.8 billion funding round to U.S.-based e-cigarette manufacturer Juul, says the KPMG Enterprise ‘Venture Pulse’ report. While every region identified in the report ‒ the U.S., Americas, Asia, and Europe ‒ saw a record high level of annual VC investment during 2018, the total number of VC deals globally declined to a six-year low of 15,299 deals during the year, compared to 17,314 in 2017 and a peak high of 20,172 in 2015. The drop in quarterly deal volume was even more stark, with the 3,048 deals seen in the fourth quarter of the year the lowest number in 25 quarters since the third quarter of 2012. It says VC activity in Canada was strong throughout 2018, with the country attracting $2.9 billion in funding over the year to achieve a new annual high.
PSP Invests In Australian Agriculture
B.F.B. Pty Limited (BFB) has sold Proterra Investment Partners’ majority stake to the Public Sector Pension Investment Board. The transaction delivers capital to support the continued strategic development of one of Australia’s most significant and successful agriculture companies. PSP’s bid was considered the most compelling based on its offered price; its low execution risk and creditworthiness to complete the transaction; and PSP’s natural resources group’s strategic fit with BFB. The Natural Resources Group is a global agriculture investor and is already invested in Australia’s agriculture sector through partnerships with local operators in the areas of animal proteins, row crops, fresh produce, and tree nuts.
Vanguard Founder Dies
John Clifton Bogle, founder of the Vanguard Group, passed away Wednesday. He was 89. He had legendary status in the American investment community, largely because of two achievements: He introduced the first index mutual fund for investors and he drove down costs across the mutual fund industry by ceaselessly campaigning in the interests of investors. Vanguard, the company he founded to embody his philosophy, is now one of the largest investment management firms in the world. Founded in 1975, he coined the term “The Vanguard Experiment.” It was an experiment in which mutual funds would operate at cost and independently, with their own directors, officers, and staff ‒ a radical change from the traditional mutual fund corporate structure, whereby an external management company ran a fund’s affairs on a for-profit basis.
Certificate Pension Course Offered
In partnership with the HRPA, the Canadian Pension and Benefits Institute is offering ‘The HRPA Canadian Pension Certificate Program.’ Attendees earn certification and get a comprehensive understanding of the many components of Canadian group benefits and insight into public and private benefits programs and individual benefit types to better formulate plans and strategies. It takes place March 5 to 7 in Toronto, ON. For information, visit Pension Certificate
Jargon Hurts DC Behaviour
While plan participants tend to highly value their employer-sponsored retirement benefits, at the same time there are common points of confusion and sub-optimal behaviour patterns that stem from the serious amount of jargon that pervades the defined contribution plan domain, says a white paper from Invesco. ‘ReDefined Contribution Plans: the defined contribution language study’ shows many participants find their retirement plan to be confusing and wish for clearer language to help them better understand their plan’s design, investment menu, and post-retirement options. At a high level, it recommends advisors and sponsors use “positive, plausible, plain-English and personal” communications. For example, telling potential plan participants that they are leaving ‘free money’ on the table is far more effective at driving behaviour change than talking about ‘projected retirement income shortfalls’ or ‘uninsured longevity risk.’ It says a well-designed and effectively emphasized employer match is one of the strongest motivators towards plan participation, which can also aid in workforce management and retention.
2014 Tipping Point For ESG
Amundi has identified 2014 as a turning point for the positive impact of responsible investing on stock prices. ‘The alpha and beta of ESG investing’ shows between 2010 and 2013, investing along environmental, social, and governance (ESG) lines tended to penalize both passive and active investments. However, it then became a source of outperformance between 2014 and 2017 in Europe and North America. It says ESG does not impact all stocks, but tends to impact best-in-class and worst-in-class assets. Buying the best-in-class (or 20 per cent best-ranked) stocks and selling the worst-in-class (or 20 per cent worst-ranked) stocks would have generated an annualized return of 6.6 per cent in Europe between 2014 and 2017, compared to negative 1.2 per cent in the earlier period. For North America, it would be 3.3 per cent and negative 2.7 per cent, respectively.
Leading Risks Identified
Cybersecurity, BREXIT, geopolitics, and financial market fluctuations are among chief concerns for businesses voiced by some of the UK’s leading risk experts as they look ahead to 2019. The Institute of Risk Management (IRM) says many of these align with risks identified in ‘The Global Risks Report 2019’ by the World Economic Forum. Further areas of risk concern identified by IRM risk experts were the as yet unknown effects of Brexit in the UK and the impact of technology enabled disruptive business models. “The impact of current macro trends and risks, such as cybersecurity, artificial intelligence, and Brexit in the UK will continue to put pressure on, and potentially change, entire business sectors,” says Socrates Coudounaris, IRM’s chairman. “Leaders who think critically about the future and anticipate disruption to their sectors, while building resilience and agility in their models, will be in a better position to tackle a challenging risk environment in 2019 and thrive.”
Patient Engagement Resistance Weakening
Resistance among patients and providers towards the concept of patient engagement is gradually weakening due to the rising ubiquity of smart phones and growing uptake of digital health tools by healthcare providers, says Frost & Sullivan’s ‘ The Future of Patient Engagement 2.0 in Europe, 2018’ says this combination of factors is helping to open up the market among the younger, digitally native, demographics who are more comfortable using interactive technologies. Patient engagement is further gaining currency with digital innovations such as artificial intelligence (AI) and consumer-grade wearables entering the mainstream. As these tools collect large volumes of data, vendors have to develop a strong privacy strategy as well as demonstrate the accuracy of the tools to physicians. As well, vendors need to carefully study regional nuances, challenges, and growth opportunities in the European market to create bespoke products that will encourage its continual use.
Supply Constraints Emerge In Real Estate
Strong performances in 2017 and 2018 have led to supply constraints amid a maturing commercial real estate cycle in Canada, says Avison Young’s ‘2019 North America, Europe and Asia Commercial Real Estate Forecast.’ Bill Argeropoulos, a principal and practice leader, research (Canada), for Avison Young, says activity is expected to remain stable in 2019 with a general supply constraint being the primary brake on property market growth. Meanwhile, occupiers and owners will have to adjust to rapid technological advances during a period of moderating economic growth. Canada’s office sector remained sound in 2018, though softness persisted in Alberta. Competition for office space, especially in downtown markets, continues to underpin the sector’s fundamentals nationwide. Office vacancy declined in almost every market, lowering the Canadian average to 11 per cent near year-end 2018. A similar story is expected in 2019 although vacancy will rise modestly to 11.3 per cent by year-end after construction nearly doubled in 2018. Overall industrial vacancy continued to decline, falling to a new record-low of 2.9 per cent near the end of 2018 and is expected to edge lower in 2019. Toronto, ON, and Vancouver, BC, posted North America’s lowest vacancy rates in 2018 and are projected to rank among the tightest three markets in 2019. Retail properties remain the most unpredictable commercial real estate assets in Canada. Retail vacancy remains in flux as a lingering result of the failures of some prominent chains, while big box chains closed underperforming locations amid the ongoing e-commerce revolution.
KPMG Delivering Bullying Training
KPMG in Canada has joined forces with Respect Group, an organization founded by Sheldon Kennedy, a former NHL hockey player turned victims’ rights crusader, to deliver training to organizations to equip employees with the education and skills needed to prevent bullying, abuse, harassment, and discrimination (BAHD) in the workplace. Together, they will provide companies with a training curriculum that addresses the evolving needs of the #MeToo era. The curriculum begins with foundational, online ‘Respect in the Workplace’ certification for employees before shifting to customized, client-specific, on-site workshops that build awareness and knowledge, followed by ongoing ‘Lunch & Learns’ to provide employees with the skills needed to contribute to a respectful workplace.
Women On Boards Trajectory Slows
The trajectory of global company boards achieving 30 per cent female representation has slowed, says a report by MSCI. ‘Women on Boards’ shows that the index provider’s projection will take longer to reach 30 per cent representation. This will occur in 2029 instead of 2027 as it predicted in 2015. The proportion of women holding directorships at MSCI All-Country World index companies increased to 17.9 per cent as of October 2018, compared with 17.3 per cent a year earlier. Developed market companies had 21.6 per cent female representation at the director level, up from 20.4 per cent a year earlier; while emerging markets index companies saw women hold 11.2 per cent of board of director seats, up from 10.2 per cent in 2017. More than one-fifth of firms had all-male boards and almost all of the companies had majority male boards. The majority of firms with all-male boards were based in Japan, South Korea, Taiwan, Hong Kong, and China.
Recession Still Unexpected
A majority of investors are bearish on the economy, but a few still expect a global recession in 2019, says the Bank of America Merrill Lynch‘s monthly fund manager survey. A net 60 per cent of surveyed investors this month expect global growth to weaken over the next 12 months, up from 53 per cent the previous month. It is the worst outlook on the economy since the July 2008 survey. However, investors are saying they expect secular stagnation over the next two to three quarters rather than an outright global recession, with only 14 per cent of surveyed investors expecting that in 2019, up from nine per cent in December. The current month also has seen a collapse in inflation expectations, with just a net 19 per cent expecting the global consumer price index to rise over the next year. That number is down 18 percentage points from a net 37 per cent in December, which itself was down 33 percentage points from 70 per cent in November. A possible trade war remains the biggest tail risk for managers, with 27 per cent of respondents putting it at the top of a list of concerns, although the number is down from the 37 per cent that cited it as the biggest concern in December.
State Street Focusing On Culture
State Street Global Advisors will focus on corporate culture as a top asset stewardship engagement priority in 2019, says Cyrus Taraporevala, its president and CEO. In a letter to the boards of public companies listed in the major global indices, he says while corporate culture as an “intangible asset” rather than a tangible one is difficult to measure and manage, “we also recognize that at a time of unprecedented business disruptions, whether in the form of technology, climate, or other exogenous shocks, a company’s ability to promote the attitudes and behaviours needed to navigate a much more challenging business terrain will be increasingly important.” Citing a report by Ernst & Young, he says an average of 52 per cent of an organization’s market value can come from intangible assets such as corporate culture. SSGA defines corporate culture as encompassing “a broad range of shared attitudes shaping the behaviours of individuals as a group across an organization,” which allows employees to identify with their employers and differentiate them from competitors.
Compassionate Care Rider Helps Employees
RBC Insurance has launched a family compassionate care rider (FCCR) as an option for select disability plans, Its recent survey found among working Canadians, two in 10 had to take time off work to provide care for a loved one and only one in three said they could comfortably afford the loss of income if they were to take three months off work to act as a caregiver, adding significant burden to an already difficult time. To fill the gap and allow clients time off to support a terminally ill or injured child or spouse, the FCCR pays a monthly benefit and gives the insured the flexibility to take time off work entirely or work reduced hours.
OMERS Opens Silicone Valley Office
OMERS Ventures has expanded to the U.S. through the opening of its Silicon Valley, CA, office. The OMERS Ventures office will complement the existing team headquartered in Toronto, ON. OMERS Ventures is a multi-stage, multi-sector venture capital investment arm of OMERS. The Silicon Valley presence provides a bi-coastal and international foothold for the firm to identify promising investment opportunities in emerging and leading markets. This supports a multi-year global strategy for OMERS, which opened an office in Singapore last year.
‘Today’s Vision’ Theme Of Conference
‘Today’s Vision: Tomorrow’s Reality’ is the theme of the ‘2019 CPBI Saskatchewan Regional Conference.’ Featured sessions include the biggest pitfalls in investing, virtual healthcare, and post traumatic stress disorder. It takes place April 9 to 11 in Saskatoon, SK. For information, visit Today’s Vision
Super-priority Concerns PIAC
The Pension Investment Association of Canada (PIAC) is not supportive of providing a super-priority for unfunded pension liabilities and employee post-retirement benefits in an insolvency situation. In its comments on the federal government’s ‘Enhancing Retirement Security for Canadians’ consultation document, it recognizes that the intention of such a change would be to enhance retirement security for plan beneficiaries. However, it believes that overall impact on the retirement income system would be negative. Most private sector plan sponsors rely on bank and/or capital markets financing to operate their businesses so preferred creditor status for unfunded pension liabilities would impact the cost and availability of credit for companies that sponsor defined benefit plans. Moreover, the impact would be highly pro-cyclical and most acute during periods when lenders are most concerned about pension deficits, which is typically recessionary periods when businesses are already facing more difficult operating conditions. For companies facing severe business challenges, preferred creditor status would likely reduce the availability of new capital to effect a turnaround. It also nots that companies which sponsor DB plans would be disadvantaged in terms of cost of capital relative to competitors that do not sponsor DB plans and this would no doubt lead to a re-assessment of the overall strategic value of the DB plans to those businesses.
EPP Impact Modest
On balance, employer-sponsored pension plan (EPP) coverage in Canada has a positive but modest effect on tax-free savings account (TFSA) performance, says a Statistics Canada study. It estimates that belonging to an EPP at some point in the past leads to a higher average rate of return in TFSAs of approximately 0.5 per cent to 1.25 per cent over the five years since this savings vehicle was introduced. Since the average market value of TFSAs amounted to about $11,600, this implies that belonging to an EPP raises the financial performance of TFSAs by between $60 and $145 over a five-year period. So while belonging to an EPP helps boost individuals’ non-workplace investment performance by a statistically significant amount, the magnitude of this effect is economically modest.
Canadians Have Big Numbers In Mind
Non-retired Canadians have big numbers in mind for the money they’ll need to save to ensure a comfortable financial future – averaging as high as $1.07 million in British Columbia. However, almost half (48 per cent) don’t yet have a financial plan to help them reach that goal, says the ‘2019 RBC Financial Independence in Retirement Poll.’ These poll respondents expressed varying degrees of confidence about their ability to save enough to build their nest egg, with 45 per cent feeling somewhat confident, 16 per cent very confident, and 39 per cent having no confidence they would ever reach their goal. Respondents also have a number of actions they would be willing to take to help them create their nest egg. These include spending less on non-essentials (74 per cent); eating out less (59 per cent); postponing major purchases (45 per cent); and cutting back on travel (34 per cent). They also have a strong motivator to save as 66 per cent want to be debt-free. While the poll found that the percentage of all Canadian adults who have a financial plan has been growing – it reached over half (54 per cent) in 2018 – one-third (32 per cent) of those report their plan is ‘in my head’ and almost half (46 per cent) still have no plan at all.
Fewer Employers Offering Benefits
Despite a tight labour market, fewer U.S. employees report that their employers are offering benefits, says a survey by the Employee Benefit Research Institute (EBRI) and Greenwald & Associates. Health insurance remains the most frequently offered at 78 per cent, followed by dental insurance at 68 per cent and retirement savings plans at 67 per cent. Likewise, fewer workers received benefits from their employers in 2018 compared to 2017.Declines can be observed in eight out of the 10 most popular benefit offerings. The percentage of employees accessing voluntary benefits is only 12 per cent. Of that, 61 per cent say they do so because it is less expensive to buy it through their employer than on their own. More than the 51 per cent cited this reason in 2017. Employees are generally satisfied with their current benefits package. Just over one-half of employees (51 per cent) indicate they are very or extremely satisfied with their benefits; another 30 per cent are somewhat satisfied. The proportion that is not at all satisfied remains relatively low at nine per cent.
Funds Committed To InstarAGF
AGF Management Limited (AGF) has committed $75 million to a closed-end fund managed by InstarAGF Asset Management Inc.’s. InstarAGF, an element of AGF’s growing alternatives business strategy, invests in North American, middle-market infrastructure. Its alternatives business includes investments like its flagship essential infrastructure fund which achieved its final close in June 2017 with $740 million in aggregate equity commitments from institutional and high net worth investors in Canada, Europe, the United Kingdom, and United States.
Hedge Funds In Negative Territory
Hedge fund industry performance wound up in negative territory for 2018 following three straight months of negative returns, says data from Hedge Fund Research Inc. Its weighted composite index returned negative 4.07 per cent in the 12 months ended December 31, while the asset weighted composite index was down 0.84 per cent. December gains and defensive outperformance are likely to not only fundamentally change the context of hedge fund performance in 2018, but attract investor capital under the expectation of these volatile, powerful trends continuing through 2019.
Humans Behind Benefits Examined
‘Humans Behind the Benefits’ will be examined at aCanadian Group Insurance Brokers/Benefits Breakfast Club session. Andrew Lawlor, of Livewire Communications Inc; Bill Zolis, of the Penmore Callery Group; Denise Desrosiers, a human resources consultant; and Dave Patriarche, of the Canadian Group Insurance Brokers; will discuss how human relationships create the real value and connection between advisors, clients, and their employees. They will share how the employee, the advisor, the employer/HR all intersect with the benefit plan. It takes place March 6 in Vaughan, ON. For information, visit Humans Behind Benefits
Strategy Should Include Non-financial Risks
What may cause the next financial crisis could be non-financial risks like extreme weather, natural disasters, and climate change, says Lois Tullo, CRO and CCO at Blockmine Developments Inc. and Smart Contracts Capital. Speaking in a ‘Cryptocurrency Theme Park’ at the University of Toronto’s ‘MMF Symposium,’ she said this means organizations should integrate non-financial risks with their strategy. A strategic assumption might be that Canada would continue to have trade relations with the U.S. and strategies would be built around that. Other assumptions could include that computer systems and data are secure, the rise of sovereign debt, the increase of cyber dependence, and the rise of populism. However, clearly, there is not just one risk or trend going forward. And while risks only offer a downside, trends do have upsides, she said. Often these risks can be overlooked. Prior to the 2008/2009 global financial crisis, the focus was on oil price shocks and Chinese growth. However, the Economist published an article at the time which was overlooked because of greed which speculated about the outcome if the expanding asset backed securities bubble burst. Looking ahead to 2030, she suggested that cyber dependency could be a non-financial assumption businesses should be including in their strategies. This is a major trend which comes with both good and bad, she said. Improvements in elder care and the ability to make smarter decisions are positives. However, this dependence of technology impacts the ability to form relationships which could lead to an increase in depression, she says.
Work Habits Impact Bodies
Many do not realize the impact work habits have on their physical bodies with incorrectly placed or improperly sized equipment causing injuries which can result in time off work, depending on insurance and benefits, and could mean lost wages, says Reed Hanoun, founder and CEO of MyAbilities. It works with employers, service providers, and insurers to keep people safe and healthy in their workplace environment. Its technology uses ergonomic research to conduct self-assessments and provide self-guided training to make sustainable office ergonomic changes. However, injuries can be prevented. Office chairs are adjustable for a reason. The best chairs allow for frequent adjustments, changing posture throughout the day. This promotes healthy blood flow and reduces the effects of muscle fatigue. Those who work primarily on a laptop, tablet, or a cell phone should realize these devices were not developed with a 40-hour work week in mind. Employees should consider getting a full-sized keyboard, a monitor, and mouse to plug in. Finally, employees should rest to destress. When people get stressed, muscles become tense, and back pain and other musculoskeletal discomfort can result. Microbreaks should be taken throughout the day to work on deep breathing and to stretch.
Four Generations Challenge Plans
With four generations of employees sharing office space, employers are challenged to develop ways to communicate with and support all of them, says Joseph De Dominicis, vice-president and Ontario retirement solutions leader for Morneau Shepell. In the article ‘Shifting Demographics, Emerging Opportunities: Designing Programs For The Workforce Of Today And Tomorrow’ at the Benefits and Pensions Monitor website, he says meeting those challenges starts by giving employees the same seamless experience as they have in their daily lives.
AI Added To HR Program
ADP Canada is adding new artificial intelligence based technology on its ADP HR Assist platform. The technology will deliver insights on employment law issues to its suite of services for Canadian small and mid-sized businesses (SMBs). Through a partnership with Blue J Legal, SMBs will get access to Blue J Legal’s HR Foresight tool, designed to help HR professionals gain insights as to how the courts have previously ruled in several challenging areas of employment law. It makes predictions on likely outcomes of employment and workplace scenarios in the areas of employment law such as reasonable notice, managerial exemption to overtime, worker classification, duty to accommodate disabilities, and drug and alcohol testing.
Real Estate Discussed
A panel of Graham Drexel, chief financial officer at Grosvenor Americas; Craig Hennigar, director, market intelligence, Canada, at Colliers International; and Andrea Schmelcher, an investment consultant at Westcoast Actuaries; will discuss the state of the industry at the ‘2019 REALPAC/MSCI Canada Real Estate Investment Forum (Vancouver). Simon Fairchild, MSCI’s executive director will present the 2018 results of the ‘REALPAC/IPD Canada Quarterly Property Index.’ It takes place February 5 in Vancouver, BC. For information, visit Vancouver Real Estate
Risks Could Tip Balance
The global economy entered 2018 in buoyant mood, says Darren Williams, senior vice-president and director of global economic research at AB. In his ‘Global Macro Outlook: Back to Earth’ at the ‘2019 AB Economic Outlook Luncheon,’ he said consensus forecasts were rising and global growth was starting to look more synchronized. This provided a positive backdrop for risk assets with bond yields expected to rise and the dollar to move modestly higher. Instead, growth slowed (outside the U.S.), risk assets did poorly, bond yields moved sideways, and the dollar rose modestly. He said this because 2017 was unusual in the context of the post-crisis period, with global growth receiving a boost from a combination of ultra-supportive financial conditions, a temporary boom in the global trade cycle, and the absence of any adverse political or financial shocks. This led to a cyclical sweet-spot for the global economy. But once these positive cyclical factors started to fade, secular headwinds again started to dominate. Growth in all major economies is expected to slow this year, but this should be viewed primarily as a ‘normalization’ back towards growth rates that are more consistent with the (soft) secular backdrop. This risk that a crystallization of one or more event risks could easily tip the balance towards outright recession. While the belief continues that structural pressure for higher inflation is building, weaker growth and lower oil prices represent significant headwinds to higher inflation in 2019. A more gradual withdrawal of monetary accommodation is expected, but it is doubtful this will be sufficient to fundamentally alter an otherwise challenging backdrop for risk assets with volatility likely to remain high. The outlook for bond markets is less certain as valuations remain stretched in many markets.
U.S. Doesn’t Really Need Global Trade
U.S President Donald Trump has a point about global trade for the U.S., says Peter Zeihan, a geopolitical strategist and author of ‘The Absent Superpower’ and ‘The Accidental Superpower.’ Speaking at the AltaCorp capital and ATB Financial ‘7th Annual Institutional Investor Conference,’ he said the U.S. never based its economy on global trade. In fact, it used its economic status to bribe other countries to side with it during the cold war. However, with the cold war over, it no longer needs its traditional allies. For example, it will soon be energy self-sufficient as a result of American shale and will be able to undercut Arab oil prices. In terms of demographics, with baby boomers now retiring to collect benefits paid for by a shrinking number of younger, working taxpayers, the majority of industrialized nations face financial disaster. However, America faces only inconvenience thanks to immigration and vast numbers of child-friendly single-family houses, Americans remain younger than nearly every major culture. Within 30 years, he predicts, some nations (Greece, Libya, Yemen) will collapse, others (Brazil, India, Canada) will shrink, some (Britain, France, Sweden) will muddle through, and a few (Russia, Germany, Japan, Turkey) will become aggressive. Self-sufficient in food and energy, America will turn inward, reverting to the role it played before World War II: a global power without global interests.
CFOs Jittery About Recession
Even though the stock market seems to have gotten over its jitters about the economy, more than half of chief financial officers (CFOs) expect a recession by next year, says a survey by Deloitte. Of the CFOs in the U.S., Canada, and Mexico, 55 per cent expect an economic downturn by the end of 2020. Among just U.S. CFOs, 53 per cent are expecting a recession.
TD Greystone Relationship Expanded
Menkes Developments Ltd has expanded its relationship with TD Greystone Asset Management (TD Greystone) and acquired an interest in 320 Bay St., a heritage building. The investment reflects its commitment to deliver progressive and innovative workspace in downtown Toronto, ON. This transaction will result in a major restoration of the building, improving the quality and service of the space, while preserving its history and architectural elements.
Lingard Joins CI
Stephen Lingard is senior portfolio manager and head of investment research with the multi-asset management team at CI Investments Inc. He has over 24 years of industry experience, including more than a decade as a senior portfolio manager at another diversified Canadian asset manager, where he managed multi-asset portfolio programs.
Industry Leaders Discuss Changing Landscape
The CFA Victoria and CAIA Canada’s ‘1st Alternative Investment Outlook Forum’ will feature leaders from across the industry who will discuss the changing landscape of alternatives as well as risks, opportunities, and trends. There will be presentations and discussions on the major trends and important considerations in the alternative investment industry such as the impact of environmental, social, and governance (ESG) factors and artificial intelligence (AI) on asset managers and investors. Speakers include Kaitlin Bergan, a vice-president at BlackRock; Jennifer Coulson, vice-president, ESG, at BCI; Dr. Stephen Malinak, chief data and analytics officer at Truvalue Labs; and Dr. Priti Shokeen, vice-president at MSCI. It takes place February 11 in Victoria, BC. For information, visit Alternative Challenges