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December 2, 2020


Toxic Confluence Developing

A toxic confluence is developing of rising indebtedness, technological progress, increasing income inequality, and emerging political populism, says Stephen Poloz, special advisor at Osler, Hoskin & Harcourt LLP and former governor of the Bank of Canada. In the keynote address at Franklin Templeton’s ‘2021 Global Investment Outlook,’ he said the COVID-19 pandemic is accelerating these trends. This confluence of forces could result in a scenario where inflation breaks out as it did in the 1970s. At the same time, a deflationary or depression scenario could also occur where governments lose heart and retreat into austerity. Plus, there’s also a risk of a stagflationary scenario. Stagflation can arise when structural changes in the economy result in rising unemployment, while a combination of other factors see inflation rising at the same time. Demobilization which will raise costs and slow growth everywhere could reduce labor force participation, thereby slowing economic growth, said Poloz. “Investors need to take these seriously.”

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COVID Affects Healthcare Costs

A  report from the Conference Board of Canada suggests that healthcare expenditures that were expected to increase steadily over the next 10 years will be affected by additional costs due to the COVID-19 pandemic, particularly over the short to medium term, says an Eckler ‘GroupNews.’ Projections for long-term healthcare spending prior to the pandemic indicated expenditures were expected to increase at an average annual pace of 5.4 per cent through to 2030-31. Out of that 5.4 per cent average annual growth in healthcare expenditures, 19 per cent of the growth stemmed from population aging and 17 per cent from increases in healthcare access and system improvements. The pandemic has already had a significant impact on Canada’s healthcare sector with additional costs to the government to mitigate the impact of the virus, including increases in virtual healthcare services; the testing, treatment, and recovery of individuals; personal protective equipment (PPE); medical supplies; and pharmaceuticals. COVID-19 will be a significant cost driver for healthcare spending as the system deals with potential new health complications found in recovering COVID-19 patients, as well as complications that have resulted from postponed surgeries and other procedures affected by the pandemic. These projections suggest that the pandemic will greatly add to healthcare spending over the short to medium term, with the potential for an additional $42.7 billion to $63.3 billion in healthcare spending depending on the evolution of the pandemic and the discovery of a vaccine. The impact to plan sponsors could be varied and may include re-evaluating benefits programs to accommodate more frequent absences from employees or the need to consider new or unique healthcare issues that were previously not factors in designing benefit programs. One impact seems certain, increasing healthcare costs will continue to be an issue for plan sponsors in a post-COVID world, says the GroupNews.

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DB Security A Regulator Issue

The Pension Investment Association of Canada (PIAC) believes benefit security and any mandated disclosures of benefit security are a public policy issue for law makers and regulators. While the views of the Canadian Institute of Actuaries’ Actuarial Standards Board (ASB) on this issue are extremely valuable, it says the ASB should not be put in a position where it both mandates what needs to be disclosed and how the mandated disclosure metric need to be calculated. As well, PIAC’s position is that ‘going concern plus’ funding is an appropriate and adequate measure to ensure the long-term funding of defined benefit pension plans and protects the interests of beneficiaries of DB pension plans in Canada. It agrees that the standards should allow the terms of engagement to specify whether plausible adverse scenarios be presented on a going concern or hypothetical wind-up basis or both and agrees that pension actuaries should not be required to assess nor disclose the financial strength of plan sponsors. It also says the trend to reduce solvency funding requirements across Canada does not increase the responsibility of actuaries to stakeholders regarding pension plan funding. The responsibility for funding is the plan sponsor’s in accordance with minimum funding regulations.

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Banks Have Tools To Provide More Liquidity

While central banks have been cutting rates and engaging in quantitative easing by buying securities in the open market, they still have some tools available to provide even more liquidity, said Ian Riach, senior vice-president and portfolio manager at Franklin Templeton Investment Solutions and CIO of Fiduciary Trust Canada at its ‘2021 Global Investment Outlook.’ These include more quantitative easing, moral suasion, yield curve management, and maybe even negative rates. But the marginal efficiency of these additional tools may be limited as they’re not as impactful at the margin as maybe they were earlier on in the downturn, he said. As well, the liquidity focus has moved from monetary policy to fiscal policy stimulus and all levels of government seem committed to stimulating economic growth. Examples of these measures in Canada include the Canada Emergency Rent Subsidy (CERB) and the reduction of utility rates. These combined with efforts of central banks will ensure the liquidity will be abundant and this should lead to increased growth which is supportive of equity prices, he said.

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Limit Put On Stock Options

The federal government’s fall economic statement has proposed changes to employee stock option rules. The changes to employee stock option tax rules include an annual limit of $200,000 that will apply on stock option grants that can qualify for the employee stock option deduction under the Income Tax Act. They apply to employee stock options granted on or after July 1, 2021. However, employee stock options granted by Canadian-controlled private corporations (CCPC) and non-CCPC employers with annual gross revenues of $500 million or less won’t be subject to the new limit.

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Interest Rate Increase Unlikely

U.S and global interest rates are unlikely to increase over the next two years-plus, says William Yun, executive vice-president at Franklin Templeton Investment Solutions. Speaking at its ‘2021 Global Investment Outlook,’ he cited Jerome Powell, chairman of the U.S. Federal Reserve, who recently said they are not even “thinking about thinking about” increasing interest rates. While they do expect global growth to rebound next year with a pick-up in consumer demand as economies recover and jobs come back, a sharp rise in inflation is not expected and it is likely to remain below the Fed’s two per cent target. Over the medium term, big structural forces will remain in place to keep inflation in check. Thinking back to the pre-COVID-19 economy in the U.S., he said inflation remained below two per cent even when the unemployment rate was at 3½ per cent. Today’s unemployment rate in the U.S. is 6.9 per cent, so ‘there’s still a ways to go.’ Even if inflation were to exceed the two per cent point of price stability, the Fed has expressed a flexible approach to inflation and will likely not raise rates immediately if this target level is exceeded.

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Quadrupling Exposure To China Makes Sense

Institutional investors should consider quadrupling exposure to Chinese capital markets over the coming decade under a range of geopolitical and economic scenarios, says a report by Willis Towers Watson. ‘Allocation to China in a new world order’ examines a range of geopolitical outcomes, including a continuation of U.S. dominance, a global order where China displaces the U.S., a multi-polar world, and one where globalization gives way to regional blocs. For most scenarios, an allocation to China of 20 per cent or more, up from roughly five per cent at present, makes sense. For example, in an environment where globalization remains ascendant, whether led by the U.S., China, or more than one economic power, investors can tap into China’s growth by investing in multi-national companies with businesses on the mainland. If, instead, the coming decade sees a globalized economy give way to regionalization ‒ the most likely scenario (with a 45 per cent probability) ‒ “the case for geographic diversification is stronger, not weaker,” it says. Under that scenario, institutional investors should allocate 25 per cent of their portfolios to Chinese assets.

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IIRC And SASB Merger Offers Unified Reporting

A merger between the International Integrated Reporting Council (IIRC) and the Sustainability Accounting Standards Board (SASB) will give investors and companies a unified sustainability reporting framework. It is a response to calls from global investors and corporates to simplify the corporate reporting landscape and provide a clear way to communicate sustainability issues that drive enterprise value. In an era where the impacts of a global pandemic, climate change, and growing inequality are intensifying, intangible value and the need for data-driven sustainability information have grown in importance. “Capital markets demand evidence-based, market-informed, and transparent data in order to deliver long-term value to shareholders while also helping secure the future of our people and our planet. Reporting is an important means to this end,” they say.

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Mackenzie Boosts Environmental Focus

Mackenzie Financial Corporation will acquire Greenchip Financial Corp., a Canadian firm focused exclusively on the environmental economy since 2007. Over the past 13 years, Greenchip’s long-term investment performance is top quartile among environmental thematic mandates and the firm has developed sector expertise that is not easily duplicated. It currently manages an investment strategy with a global energy transition theme and oversees more than $485 million in assets on behalf of foundations, endowments, and Canadian families.

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Manulife Wants To ‘Pay It Forward’

Manulife is giving each of its 35,000 employees around the world the spending equivalent of $50 in their local currency to ‘pay it forward’ and create acts of kindness in their local communities this holiday season. “2020 has been a difficult year for many individuals, families and communities around the world. It’s challenged us to prioritize health and safety and adopt new ways of connecting and supporting each other,” says Roy Gori, its president and chief executive officer. “If we could all demonstrate care and kindness, even if it is a small gesture, we will help make the world a better place.” It will be forgoing end of year company celebration events and gifts to instead encourage employees around the world to donate gifts or make donations to individuals or organizations in their communities.

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PSP Owns Satellite Shares

Loral Space & Communications Inc. has entered into a definitive agreement with the Public Sector Pension Investment Board (PSP Investments) and Telesat Canada to combine into a new Canadian public company ‒ New Telesat.  Upon closing of the transaction, the stockholders in Loral, together with PSP Investments and certain current and former management shareholders of Telesat, will beneficially own all of the equity in New Telesat in approximately the same proportion as their current, indirect ownership in Telesat. New Telesat is now expected to announce who is to build the company’s proposed fleet of low earth orbit satellites.

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Oliver Joins Stifel

Justin Oliver (CPA, CA) is director, investment banking at Stifel Financial Corp. He was formerly director of ETF institutional sales and service at BMO Global Asset Management.

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Adatia Provides Perspectives

Sadiq S. Adatia, chief investment officer for Sun Life Global Investments, will share his perspectives on the global and Canadian economies and summarize the key themes heading into 2021 January 28 at the ‘2021 CPBI Atlantic Economic Forecast.’ Information is at 2021 CPBI Atlantic Economic Forecast (cpbi-icra.ca)

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December 1, 2020


Work-From-Home Tax Approach Streamlined

The federal government fall economic statement has eliminated a burden for payroll professionals and employers, says the Canadian Payroll Association. With more than six million Canadians working from home in 2020 due to government-mandated lockdowns and closures to curb the spread of the COVID-19 pandemic, it says employers were worried that they would be required to complete T2200 forms to enable these new remote workers to claim work-from-home expenses, a task which would have generated countless hours of work and cost employers more than $194 million collectively. Instead, the government announced a streamlined approach for claiming work-from-home expenses for both employees and employers. Employees working from home with “modest expenses” will be able to claim up to $400 in the 2020 tax year without the need to track detailed expenses. And employers will, generally, no longer be required to confirm the status of employees by completing a T2200 form for each remote worker.

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Access To Drugs Questioned With New Rules

Canada is just weeks away from new federal regulations that will see prices drop for patented medicines, yet uncertainty still clouds key aspects of the new rules, says a Telus ‘Health Benefits Hub.’ It says opponents ‒ including pharmaceutical manufacturers who have gone to court twice so far ‒ are raising questions about access to new drugs in the near future. The regulatory pricing framework from the Patented Medicine Prices Review Board (PMPRB) will change in two main ways. Pricing will be benchmarked against countries that PMPRB has determined to be more like Canada economically. Two countries will be dropped from the current basket of seven: the U.S. and Switzerland, where drug prices are among the highest in the world. Six countries will be added: Australia, Belgium, France, Germany, Italy, Japan, the Netherlands, Norway, Spain, Sweden, and the United Kingdom. Manufacturers have until January 1, 2022, to adjust prices on medications already available in Canada based on this basket. As well, new medicines that are expected to exceed a certain annual treatment cost and/or annual market size of $50 million are designated as ‘Category 1’ drugs. They will be subject to an additional maximum rebated price (MRP) ceiling that will take into account therapeutic criteria, pharmacoeconomic value, and market size. Canada will be the first country in the world to incorporate these factors into pricing regulation. These two factors ‒ the MRP and value assessments ‒ have raised the most opposition from patented drug manufacturers and some patient groups, who argue that the complexity alone could delay or stop the launches of new, high-cost medications that could potentially be breakthrough therapies for patients. “Cost savings are a noble goal, but let’s not do that at the price of causing so much uncertainty that I know for a fact it has meant Health Canada filings have been delayed and clinical trials not started,” says Kimberly Robinson, director, pricing and market access, PDCI Market Access. “PMPRB has taken a bludgeon to a problem that needs a scalpel.” Manufacturers are concerned the guidelines will essentially be impossible to implement. The amended Patented Medicines Regulations will take effect on January 1.

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Room For Improvement Exists On Workplace Diversity

Canadians believe their workplaces have room to improve when it comes to issues of diversity and inclusion, says a survey from ADP Canada and Maru/Blue. Specifically, working Canadians who belong to a visible ethnic minority report that, at their current place of work, they have experienced or witnessed more judgment or misconduct based on ethnicity or skin colour, more negative impacts on their career, and greater feelings of discomfort in the workplace. However, there are some positives, as the survey also noted greater awareness of these issues among younger workers, with nearly half (47 per cent) of employed Canadians aged 18 to 34 saying they would be more loyal to their organization if it took a stand, publicly, on diversity and inclusion. As best practices, some employers are prioritizing policies and programs on diversity and inclusion. The survey shows one-in-three working Canadians (32 per cent) believe that diversity and inclusion are priorities for their organization. When asked how diversity and inclusion were integrated into the corporate culture of their organization, they identified composition of the workforce, onboarding and training, and surveys and employee feedback as the primary vehicles. However, 36 per cent felt that while their organization is taking steps in the right direction, diversity and inclusion is still not considered a priority.

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Quebec Faces Pooling Cost Increases

While pooling thresholds per group size in Quebec remained at 2020 levels, there have been significant increases in the annual factors with and without dependents, says an Eckler ‘GroupNews.’ Based on 2019 claiming data and market expectations, annual trends in claims changes could vary from eight per cent at an $8,000 threshold to 30 per cent at $200,000+ threshold. Groups over 249 employees will face the highest increase, which will vary from about 42 per cent to 53 per cent. Groups below 250 employees will see an increase varying from approximately 19 per cent to 32 per cent. Since group insurers typically collect these premiums and then remit them, pooling costs are included in group insurance premiums. Group benefits plan sponsors should expect an increase in pooling costs with respect to plan members residing in Quebec. This increase is typically reflected in the renewal negotiation following the publication of new pooling rates.

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Use Of NOIDs Unnecessary

The proposed Financial Services Regulatory Authority of Ontario (FSRA) ‘Supervisory Approach to Asset Transfers Under the Pension Benefits Act’ guidance document suggests that FSRA may use notices of intended decisions (NOIDs) prior to issuing its consent to an asset transfer from a single employer pension plan (SEPP) to jointly sponsored pension plan (JSPP). However, the Association of Canadian Pension Management (ACPM) says this step is not necessarily required for asset transfers. Furthermore, the use of NOIDs is applied to SEPP to JSPP transfers without a clear rationale as it is not required by legislation either. The consequences of issuing a NOID with a 30-day comment period stem from the opportunity for one member to issue a complaint while the required majority of members have already consented, thereby negatively impacting FSRA’s consent to the merger. Based on existing legislation and regulations, for a merger to proceed, first the majority of the SEPP membership must consent to the pension transfer. Next, FSRA will evaluate the application to transfer the assets and liabilities based on the prescribed requirements in the PBA. If all of the requirements are fulfilled, it is expected that FSRA will issue its consent. At no point does the legislation provide an opportunity for one member to hinder this process. Therefore, it is surprising that FSRA has instituted the process of issuing a NOID on past SEPP to JSPP transfers, it says.

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Turnkey Insurance Platform Introduced

Mercer and Parachute Digital Solutions Inc., a Munich Re company, are introducing Parachute, a turnkey online insurance platform, as the latest addition to the Mercer 365 digital offering. Through a seamless integration with Parachute 2.0, Mercer 365 customers can now purchase simplified issue life, critical illness, and AD&D policies, in less than 10 minutes. The platform will significantly streamline the process of purchasing these types of coverage and will also help employees select the best insurance options for them and for their families.

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Inflows Rise For Active ETFs

Actively managed ETFs and ETPs saw net inflows of US$7.28 billion during October, bringing year-to-date net inflows to a record level US$58.69 billion, says ETFGI. This is significantly more than the US$34.85 billion in net inflows gathered at this point in 2019 as well as significantly more than the US$42.1 billion gathered in all of 2019. Assets invested in actively managed ETFs/ETPs finished the month up to 2.8 per cent, from US$228.41 billion at the end of September to reach a new record high of US$234.86 billion.

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CDPQ Provides Capital For Inigo

Inigo Limited (Inigo), a new insurance group, has successfully completed a capital raise from a consortium of global investors including funds controlled by the Caisse de dépôt et placement du Québec (CDPQ). The funds give it the capital base required to proceed with its plans to open for business in the 2021. It is being founded by Richard Watson, former chief underwriting officer of Hiscox. It believes that current conditions are ideal to launch a new insurance business as demand across a number of classes of insurance and reinsurance is high.

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Barsky Joins RPIA

Zachary Barsky (MBA) is vice-president, client portfolio management, at RPIA. Most recently, he was an associate in the institutional advisory group at CIBC.

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Economists Share Forecasts

The Economic Club of Canada’s ‘Annual Economic Outlook 2021’ will feature a conversation with Wes Hall, executive chairman and founder of Kingsdale Advisors. On January 7, economists from CIBC Capital Markets, BMO Financial Group, the Royal Bank of Canada, the National Bank of Canada, TD Bank, and Scotiabank will share their insights on the coming year. Information is at Economic Club of Canada – Annual Economic Outlook 2021: Digital Event

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November 30, 2020


Provinces Want CPP Increase Paused

Provincial finance ministers have asked Finance Minister Chrystia Freeland to pause planned increases in premiums workers and businesses pay into the Canada Pension Plan because of the COVID-19 pandemic. The planned increase on January 1 is part of a multi-year plan approved by provinces and the federal government four years ago to boost retirement benefits through the public plan by increasing contributions over time. The first premium bump was in 2019, another was earlier this year, and the next is due at the beginning of 2021.

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Employers Rethink Pay And Rewards

Alternative work arrangements are prompting employers to rethink their approach to pay and rewards, says a survey by Willis Towers Watson. Half of employers (49 per cent) say the new work requirements will require a hybrid reward model. As such, two in 10 (18 per cent) a re-setting pay levels by first determining the market value of an employee’s skills and then applying a geographic differential based on where the employee is located. However, six in 10 employers will continue to pay remote employees the same as in-office employees. Additionally, 29 per cent are providing additional benefits to promote workplace flexibility, including backup daycare, subsidies for daycare or virtual learning, and subsidies or reimbursement of costs for working from home.

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Alternatives Set For Continued Growth

The alternative assets industry is set for continued growth in every region over the next five years, despite the challenges posed by market uncertainty. Preqin’s ‘Future of Alternatives 2025’ AuM (assets under management) growth models find that Asian-Pacific countries (APAC) will be the fastest-growing region at 25.2 per cent CAGR (compound annual growth rate) between 2019 and 2025, reaching almost $5 trillion. Europe and North America will experience slower growth, but North America will maintain its position as the largest alternatives market, with AuM rising to $8.6 trillion over the next five years. Overall, it is emerging markets that are expected to come to the fore in the next five years: more than a third of investors surveyed see emerging markets as presenting the best opportunities in 2025.

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REITs Reporting On ESG

The percentage of real estate investment trusts (REITs) that publicly report on ESG (environment, social, and governance) efforts and outcomes has increased significantly in recent years, say findings by FTSE Russell and the National Association of Real Estate Investments Trusts (Nareit). A presentation ‒ ‘Growth of Real Estate in a Technology-driven, New Economy’ at the ‘CAiP 2020 Real Estate & Infrastructure Virtual Forum’ ‒ showed that REITs are increasingly reporting on their carbon emissions, waste management, energy, and water usage. John D. Worth, executive vice president, research and investor outreach, at Nareit, says: “In 2019, 84 of the 100 largest equity REITs, representing 89 per cent of equity market cap, publicly reported on ESG efforts and outcomes. This is a very impressive number and clearly indicates a progression in this area within the REIT community. ESG factors are clearly becoming a much more important factor in determining success in the real estate market.”

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Benecaid Acquired By GSC

Green Shield Benefits Association, a part of the Green Shield Canada (GSC) group of companies, has acquired Benecaid. Combining leading technology solutions and track records of innovation, they will leverage their previously individual strengths to collaboratively provide customers advanced solutions in benefits services and products.

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CPP Investments Finances JSW

The Canada Pension Plan Investment Board (CPP Investments), through its wholly owned subsidiary CPPIB Credit Investments Inc., has committed to a bilateral financing transaction to support a strategic investment in BMM Ispat Ltd. by India-based JSW Projects Ltd. JSW Projects is part of the diversified  JSW Group which has a leading presence in sectors such as steel, energy, infrastructure, cement, and sports in India. BMM is the second largest iron ore pellets producer in southern India and manufactures direct reduced iron, rebars and billets.

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Cooper Joins Maple

Robin Cooper is managing director, strategic partnerships at Maple (getmaple.ca). Previously, she was vice-president, strategic relationships, at Teladoc Health.

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Hirsch Examines Economy

Todd Hirsch, vice-president and chief economist for ATB Financial, is the featured speaker at the CPBI Northern Alberta ‘2020 Economic Update.’ He will examine ‘What if it’s easier than we think? Alberta’s Evolving Economy in a COVID World.’ It takes place December 9. Information is at http://www.cpbi-icra.ca/Events/Details/Northern-Alberta/2020/12-09-2020-Economic-Update-December-2020

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November 27, 2020


RIA Grows Rapidly

The ‘2020 Canadian Responsible Investment Trends Report’ reveals that responsible investment (RI) continues to grow rapidly in Canada. The biennial report shows RI assets grew from $2.1 trillion at the end of 2017 to $3.2 trillion as at December 31, 2019. This represents a 48 per cent increase in RI assets under management (AuM) over two years. These figures reflect assets that fall into seven different RI strategies or categories including ESG integration, shareholder engagement, negative screening, norms-based screening, positive screening, thematic ESG investing, and impact investing. Responsible investing now accounts for 61.8 per cent of Canadian AUM, up from 50.6 per cent two years earlier. This growing market share shows that Canadian investors increasingly view ESG factors as important components of investment decisions, with an overwhelming majority of 97 per cent of respondents expecting moderate to high levels of growth in RI over the next two years. RI represents 61.8 per cent of Canada’s investment industry, up from 50.6 per cent two years ago.

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Flexible Work Arrangements Continue Into Next Year

North American employers expect the uptick in flexible work arrangements to continue at least through the first quarter of next year, says a survey by Willis Towers Watson. As a result, many survey respondents reported that these new arrangements will require hybrid compensation models that for some employers include paying employees based on their geographic home base when they relocate. Currently, 59 per cent of employees are working at home while 25 per cent are working from anywhere, compared with just 14 per cent and six per cent, respectively, last year. Employers expect that just over half of their employees (52 per cent) will work from home in the first quarter while 24 per cent will work from anywhere. Just over a quarter of workers (26 per cent) are expected to use flextime arrangements next year, similar to the 25 per cent currently doing so. Despite the shift to flexible work arrangements, over a third of respondents (37 per cent) don’t yet have a formal policy or set of principles to manage the arrangements, although 60 per cent of those currently without formal policies are planning or considering adopting a formal policy by next year.

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Adoption Of OCIO Rising

Adoption of outsourced chief investment officer (OCIO) services in the U.S. is on the rise as more asset owners seek enhanced portfolio governance at a time of increased market volatility. At the same time, search consultants and asset owners are demanding greater transparency, says Cerulli Associates. Its report ‒ ‘U.S. Outsourced Chief Investment Officer Function 2020: A Growing Demand for Industry Standards’ ‒ shows assets under management (AuM) in the OCIO industry totaled $1.9 trillion as of year-end 2019, growing 16.5 per cent annually since 2015. Both new adoption of the OCIO model by asset owners and overall capital market appreciation have had a positive effect on OCIO asset growth figures. As it nears $2 trillion in U.S. assets, the OCIO industry is getting more attention. Pressure for performance standards continues to grow from asset owners, search consultants, and OCIO providers as concerns over transparency into underlying investments, fees, and the comparability of performance track records remain a top challenge. “Greater consistency and transparency when evaluating investment track records will help investors select the best OCIO to meet their particular needs,” says Laura Levesque, an associate director at Cerulli.

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Zoom In The Workplace

Since the  beginning of the Coronavirus (Covid-19) pandemic on March 11, many employees have been working from home. In fact, Zoom Video Communications reports, this situation led to an explosion from 10 million to over 200 million daily participants within three months.. However, in the Zoom workplace era, managers will need to start rethinking the idea of mental illness as a result of the environment people are now working in, says Ben Aston, an online media entrepreneur and founder of Black + White Zebra, in the article ‘When Zoom Is The Workplace: Facts About Remote Work And Mental Health’ at the Benefits and Pensions Monitor website.

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ESG Formally Integrated Into Analysis

Morningstar is now formally integrating ESG (environment, social, and governance) into its analysis of stocks, funds, and asset managers. It says its equity research team will now capture ESG considerations more formally for all 1,500 stocks that it covers with a new research methodology. As well, the manager research team will assign ESG commitment levels to asset managers and strategies. For asset managers, it will analyze the extent to which strategies and asset managers are incorporating ESG factors, through a new ESG commitment level evaluation following a four-point scale of leader, advanced, basic, and low. The evaluation will consider how clearly firms articulate ESG philosophy and policies and the degree to which it those policies are incorporated through the culture and investment processes.

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Allocations To Renewable Energy Almost Double

Institutional investors plan to almost double their allocations to renewable energy infrastructure in the next five years, says a report by Octopus Group. ‘The Renewables and the recovery: accelerating investment in a post-pandemic world’ report shows that global institutional investors plan to raise the current 4.2 per cent allocation to 8.3 per cent in the next five years. This is expected to increase to 10.8 per cent over 10 years as the global response to climate change gains momentum, it says.

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Employees Working Around Clock

Employees are working around the clock while at home, says a study by Robert Half. More than half (55 per cent) of professionals who transitioned to a remote setup as a result of the pandemic say they work on the weekend. In addition, one-third (34 per cent) of remote employees report regularly putting in more than eight hours a day. The Canadian cities in the survey with the highest percentages of remote employees who work weekends are Calgary, AB; and Toronto and Ottawa, ON. “Despite the significant benefits of working remotely, such as saving time spent commuting and increased flexibility, it can also lead to putting in longer hours,” says David King, Canadian senior district president of Robert Half. “Heavier workloads have become a reality for many professionals during the pandemic, making it more challenging to disconnect while at home. It is critical that employers encourage their teams to take regular breaks and prioritize themselves and their wellbeing.”

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Canadian ETFs Record Inflows

ETFs listed in Canada gathered net inflows of US$1.34 billion during October, says ETFGI. This brings year-to-date net inflows to a record US$25.98 billion which is significantly above the 2019 YTD and full year 2019 inflows of US$14.16 billion and US$20.93 billion respectively. During October, Canadian ETF assets decreased by 1.2 per cent, from US$176.27 billion at the end of September to US$174.12 billion.

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Boralex Acquires CDPQ Wind Farm Stake

Boralex Inc. will acquire the full 49 per cent equity stake held by the Caisse de dépôt et placement du Québec (CDPQ) in three wind farms in Quebec. It already owns the other 51 per cent. CDPQ’s equity stake represents 145 MW net installed capacity and the three wind farms represent a total capacity of 296 MW. Located in the Avignon RCM in Gaspésie and the Appalaches RCM in eastern Quebec, these farms are equipped with Enercon turbines and benefit from long-term power purchase agreements with Hydro-Québec Distribution, expiring between 2032 and 2033.

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March Has New Role

Derrick March is senior vice-president, business development, group customer, at Canada Life. He joined the firm in 2018 as vice-president, business development, group customer sales, from Sun Life Financial.

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Vaccine Implications For Equities Examined

‘Elections, Vaccines and the Implications on Global Equity Markets’ is the topic of a Benefits and Pension’s Monitor webinar. Brent Puff, vice-president and portfolio manager, global growth, and Bernard Chua, vice-president and senior client portfolio manager, global growth, at American Century Investments, will discuss equity valuations, future opportunities, and market trends. It takes place December 9. Information is at https://attendee.gotowebinar.com/register/8957265345359869707

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November 26, 2020


CEOs Join Forces For Sustainable Future

CEOs of Canada’s eight leading pension plan investment managers are joining forces to help shape a future defined by more sustainable and inclusive economic growth. For the first time, the CEOs of AIMCo, BCI, the Caisse de dépôt et placement du Québec, CPP Investments, HOOPP, OMERS, the Ontario Teachers’ Pension Plan, and PSP Investments are jointly calling on companies and investors to provide consistent and complete environmental, social, and governance (ESG) information to strengthen investment decision-making and better assess and manage their collective ESG risk exposures. They further commit to strengthening ESG disclosure within their own organizations and to allocate capital to investments best placed to deliver long-term sustainable value creation. Their joint statement declares, “How companies identify and address issues such as diversity and inclusion, human capital, and climate change can significantly contribute to value creation or erosion. Companies have an obligation to disclose their key business risks and opportunities to financial markets and should provide financially relevant, comparable and decision-useful information.” They recognize that while companies face a myriad of disclosure frameworks and requests, it is vital that they report relevant ESG data in a standardized way to provide clarity and improve data flow. They ask that companies measure and disclose their performance on material, industry-relevant ESG factors by adopting the Sustainability Accounting Standards Board (SASB) standards and the Task Force on Climate-related Financial Disclosures (TCFD) framework.

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Unclaimed Property Proposal Impacts Plans

Proposed rules to govern unclaimed property in New Brunswick will potentially affect wound-up pension plans where entitlements remain with the plan for three years after the wind up report has been approved by the superintendent of pensions, says a Morneau Shepell ‘News & Views.’ The Unclaimed Property Act  requires holders of unclaimed property to give written notice to the apparent owner of the property between October 1 and December 31 of the year the property is presumed “unclaimed.” It will then be required to submit a report along with the property itself to the director of the unclaimed property program within 90 days the end of the year. Under the proposed rule, pension benefits resulting from the wind-up of a pension plan are presumed to be “unclaimed” three years after the approval of the wind-up report, at which point administrators of pension plans that have been wound up would be able to transfer liabilities associated with any missing members to the unclaimed property program. However, administrators of ongoing plans will not be able to transfer these liabilities.

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Mental Health Linked To Financial Well-being

Many Canadians say their mental health and financial well-being have been negatively impacted during the COVID-19 pandemic, says Manulife Bank’s ‘Debt Survey.’ “Debt can negatively impact mental health and leave Canadians feeling like their financial goals are unachievable. The pandemic has made that even more pronounced,” says Rick Lunny, president and CEO, Manulife Bank. One-third (35 per cent) of Canadians admit they were financially unprepared for the pandemic. Nearly three-quarters (74 per cent) acknowledge their financial situation has been impacted as a result of the pandemic and more than two-thirds (69 per cent) within that group say the impact has been overall negative. In fact, of those respondents, 42 per cent think it may take them over a year to recover to pre-COVID-19 levels. Almost half (46 per cent) of indebted Canadians say debt is having a negative effect on their mental health – a 10-point increase from two years ago. In fact, indebted Canadians are far more likely to note that their debt load is causing them stress or keeping them up at night compared to two years ago.

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Doctors Get Pension Solution

Blue Pier has launched  a pension solution for Canadian doctors. Self-employed physicians from coast to coast to coast can now join a pension plan offered by Blue Pier. Physicians practicing in British Columbia, Alberta, and Ontario, with specialties ranging from family and emergency medicine to anesthesiology and radiology, have already joined. Most of Canada’s 90,000 doctors don’t have a pension plan although many products promise retirement income to doctors, says Dr. Stephen Milone, a Blue Pier director. This plan offers flexibility, tax efficiency, and low cost to accommodate the changing needs and circumstances of doctors and their families in ways that RRSPs or IPPs don’t.

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PSP Investments Jointly Funds Building

Aviva Investors, the global asset management business of Aviva plc, and the Public Sector Pension Investment Board (PSP Investments) will jointly fund an office building at 20 Station Road, Cambridge, UK. The 65,000 square foot development has been fully pre-let to a premium flexible workspace provider.

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De Prisco Has New Role

Ben De Prisco is chief risk officer of the Investment Management Corporation of Ontario (IMCO). He oversees its investment risk and enterprise risk management functions, including all risk modelling and management systems, as well as risk related research. Since joining IMCO in March 2019, he has served as senior vice-president, investment risk. Previously, he held senior roles in the banking, pension, and risk management technology sectors including positions with Scotiabank, OMERS and Algorithmics.

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