Protectionist Mood Due To Anger And Fear

Much of what is being witnessed in the U.S. today is due to fear and anger that the government is dysfunctional and world trade is tilted against it. This is what is making the protectionist sentiments in that country grow, says Brian Mulroney, prime minister of Canada from 1984 to 1993 and architect of the original free trade agreement with the U.S. in 1992. Speaking at the Franklin Templeton ‘2019 Global Market Outlook,’ he said, however, protectionism is not the solution as it is destructive. More international trade is the better approach. He did say the U.S. has to ensure its economy cannot fail if it is going to be a world leader to ensure peace and security. However, he recalled the naysayers when NAFTA (North American Free Trade Agreement) was first proposed and even after it was ratified. Everyone was against his government when it tried to bring in free trade. He said he was told Canada could not compete with a country 10 times its size. His response was if the country could not compete in North America, it could not compete for world trade. However, since the agreement was put in place 25 years ago, trade volumes in Canada have tripled and the North American region with seven per cent of the global population generates 28 per cent of global wealth. This time around, the U.S. had a precise agenda for free trade negotiations with Canada and Mexico, but with the lowest unemployment in world, it could not argue that free trade with Canada was hurting it. Besides, it was time NAFTA was modernized, he said, as when it was first negotiated, cell phones, for example, were non-existent.

Healthcare At Fingertips Wanted

Canadian employees are demanding healthcare at their fingertips ‒ apps that let individuals connect directly and instantly with nurse practitioners, physicians, and other health professionals through secure text and video chat, anytime and anywhere, says a study commissioned by Medisys Health Group. “Average smart phone usage has increased by 60 per cent over the past three years. This, coupled with ongoing access barriers and supply and demand challenges within our healthcare system, makes it clear why Canadians are looking to supplement traditional doctor’s office visits with virtual consults,” says Dr. Vivien Brown, vice-president, medical affairs, at Medisys Corporate Health. The survey shows two in three Canadians would use virtual care if it was provided in their employee benefit plan and 71 per cent are willing to trade off current benefits for improved access to healthcare professionals and technology-supported services like virtual care. Virtual care is most appealing to parents and caregivers (69 per cent), those dealing with chronic health conditions (70 per cent), and Millennials (67 per cent). Participants says the biggest benefits of virtual care are access to care during late hours and weekends (67 per cent), convenience (66 per cent), avoiding increasing wait times at urgent care during late hours for minor health problems (62 per cent), less time missed at work (47 per cent), more regular visits with a healthcare professional (45 per cent), and less stress (29 per cent). However, only nine per cent of employee benefit plans currently include virtual care coverage.

Marijuana User Termination Lacked Cause

Not seeing an employee smoking marijuana in the workplace or sharing anything with a co-worker meant, despite other observations, the termination of an employee for doing so was without cause, says Bonny Mak, a partner at Fasken. In ‘Year in Review: The Best, The Worst, The Unbelievable’ at the Fasken Institute, she said in Bombardier Transportation v. Unifor Local 1075, the employee was terminated on the grounds he had violated a company policy prohibiting the smoking of marijuana in the workplace after a supervisor saw him in a secluded area of the parking lot where hand-fashioned pipes, made with material from the employer’s company, could be seen on the ground. On closer observation, the supervisor smelled the strong odour of marijuana on the employee and even saw some smoke exhaled. He also saw the employee drop something which smoldered when it hit the ground. In a resulting meeting with the HR department, the supervisor contended the employee seemed jittery. The employee admitted to smoking marijuana, but claimed it was for a medical condition. The termination was grieved to a labour arbitrator who, even though he found the employee not credible as he could not produce any evidence of needing medical marijuana, ruled there was no justification for the termination since the employee was not seen actually smoking any marijuana. Mak said because it is the very early, early days of legal recreational marijuana use in Canada, the law in this area is still very uncertain.

Sears Lawsuit Gets Green Light

The Ontario Superior Court has given the green light to two lawsuits targeting U.S. billionaire businessman Eddie Lampert and his hedge fund, ESL Investments, in connection with $509 million in dividends paid to Sears Canada shareholders in 2013.The lawsuits ‒ each initiated on behalf of Sears creditors including pensioners ‒ both claim the payout was detrimental to the company and orchestrated by Sears Canada’s largest shareholders ‒ Lampert and ESL ‒ for their own benefit. The goal of the lawsuits is to recoup money for Sears Canada creditors including 18,000 retirees who had their pensions cut by 20 per cent after the retailer folded and left behind an underfunded pension plan. Retirees claim Sears owes them nearly $730 million which includes $260 million for the pension fund shortfall and $421 million for lost retiree health benefits. The plaintiffs also allege that Sears Canada’s board of directors at the time failed to do their “due diligence” before authorizing the dividend payment, which “crippled the retailer’s ability to remain in business.” At the time of the dividend payment, Sears had an operating loss of $187.8 million and the pension fund was short $133 million, according to court documents. As a result of a tentative agreement in October, pensioners stand to collect about $48 million of what they’re owed. Lampert is chair and CEO of ESL as well as chair of Sears Holdings in the U.S. which filed for bankruptcy protection last month with plans to restructure.

Environment Good For Risk Assets

While there may be more volatility going forward, the environment is good for risk assets, says William Yun, executive vice-president for Franklin Templeton multi-asset solutions. He told its ‘2019 Global Market Outlook’ that its expected returns range from 2.3 per cent for government of Canada bonds to 7.2 per cent for emerging markets equities. The restart of normalization in interest rate policy could result in rising volatility following a calm period since 2009. This has prompted a rise in passive investment. Emerging markets will provide better returns because these countries are growing faster than the rest of the world. Their share of global GDP has grown from just 40 per cent in 1990 to around 60 per cent in 2017 and it will go higher. Consumption in emerging markets is also growing. In 2015, it was just over $6 trillion and by 2030 it will grow to near $30 trillion. Debt issuance in these economies is stronger with more dependence on local currencies and less on the U.S. dollar, And, their debt to GDP is running at around 60 per cent, half of that in the developed world where debt to GDP is at 120 per cent. Finally, they are less reliant on trade with slower growing developed markets. Trade with the U.S. is now being replaced by trade with China. In contrast, the outlook for Canada is not as bright, said Ian Riach, a senior vice-president and portfolio manager at Franklin Templeton multi-asset solutions. He said the country faces a number of short-term challenges due in part to trade uncertainty, shrinking manufacturing, and a weaker Canadian dollar. Unlike emerging markets, consumer debt is an issue which will result in less consumption and declining retail sales ‒ important contributors to the economy ‒ lasting until the debt issue is resolved. This means in the short term, investors need to be cautious about investing in Canada, he said.

Control Over Hours Increases Satisfaction

Workers whose jobs give them some control over their hours of work report higher levels of job satisfaction, says a study based on the Longitudinal and International Study of Adults (LISA). Canadian workers reported various degrees of job flexibility. For example, 37 per cent of men and 33 per cent of women reported a high or a very high degree of control over how their work is done. Furthermore, about two in 10 men and women reported that they had a high or a very high degree of control over their hours of work. Of all aspects of job flexibility examined in the study, control over hours of work was most strongly associated with job satisfaction. Specifically, 61 per cent of men who reported a ‘high’ or ‘very high’ extent of control over their work hours were satisfied with their job, compared with 46 per cent among those who had less control over their work hours. Among women, 60 per cent of those who had a ‘high’ or ‘very high’ control over their work hours reported being satisfied with their job, while just under half of those with less control reported employment satisfaction. The relationship between control over hours of work and job satisfaction remained even after accounting for other factors that are also associated with job satisfaction, such as personal characteristics and job quality indicators (that is, wages, work hours, training, union status, pension plan, or responsibilities at work).

Terminating Benefits Ruled Unconstitutional

The Human Rights Tribunal of Ontario (HRTO) still has to decide if terminating benefits for people who work past age 65 is discriminatory. In the meantime, its interim decision in Talos v Grand Erie School Board has found the section of the Human Rights Code of Ontario which permits this is unconstitutional and discriminatory, says Alyssa LeBlanc, an associate at Fasken. Speaking at the Fasken Institute on the ‘Year in Review: The Best, The Worst, The Unbelievable,’ she said the case involves a teacher who continued to work past age 65. His extended health, dental, and life insurance was terminated at age 65. At the time, this was allowed under Section 252 (2.1) of the code. The applicant submitted that this section was unconstitutional. The tribunal decision said this, in combination with the employment standards act, created a distinction between over 65s and under 65s doing the same work. It also put a burden on the employee that a 64-year-old would not face, especially since the employee was depending on the benefits to cover the healthcare costs of an ailing wife who had no benefit plan. An employee under age 65 would not have this burden. Nor could it find any financial or actuarial evidence that providing these benefits would add to the costs of the school board’s benefit plan. In fact, some benefit plans do not terminate benefits for employees even as old as 73. She said the decision was not based on merit, it only determined if the school board could use the section as a defence for its action.

Great-West Life Expands Virtual Care

Great-West Life has expanded its Dialogue Technologies Inc. virtual healthcare service in Canada into every province and the Yukon, with around the clock access. Great-West has been offering Dialogue’s services to select employers based in Ontario and Quebec. After increased demand and positive feedback from those who had adopted the service, it decided to roll out the service to its 10,000 employees and expand the offering to employers from coast to coast. Brad Fedorchuk, executive vice-president, group customer, at Great-West Life says, “With faster access to healthcare and treatment options, patients are better able to manage their health and the health of their families which, in turn, can lead to increased productivity and reduced absenteeism. It’s a win-win for employers, their employees and their employees’ families.”

Second Opinion Expanded To Mental Health

Novus Health is expanding its Canadian medical second opinion program by developing extended support for mental health diagnoses. The program empowers individuals with the information they need to make informed decisions about their health. With mental illness a leading cause of disability in Canada and access to mental health services challenging in some parts of the country, particularly in isolated areas, individuals often need the input of multiple experienced mental health professionals to help get them on the right treatment plan. Through the program, individuals diagnosed with a critical or life-threatening illness or a mental health condition receive the information and resources they need to make informed decisions about their care.

Pavilion Acquisition Completed

Mercer has completed its acquisition of the investment consulting, alternatives consulting, and wealth management operations of Pavilion Financial Corporation. The Pavilion alternatives platform will feature a customized consulting offering of a full-spectrum alternatives boutique, and the implementation and research capabilities of a global firm. Wealth management clients will have expanded advice and access to tools and products, including Mercer’s bundled retirement savings investment products.

Stake In Fibre Acquired

An OMERS Infrastructure majority-led consortium, including Allianz Capital Partners and AXA IM ‒ Real Assets, has entered into an agreement with Altice France to acquire a 49.99 per cent stake in SFR FttH, a company to be formed by Altice France which will hold and further develop its existing fibre to home business in France. SFR FttH is a newly incorporated company comprising five million fibre to homes in medium and low density areas. With approximately one million homes covered and an additional four million homes to be rolled out in the medium term, it is the largest alternative fibre to home infrastructure wholesale operator in France.

Miller Joins Sun Life

Colin Miller (CFA) is managing director and head of client relationships at Sun Life Institutional Investments (Canada) Inc. He has over 15 years of industry experience, with a focus on institutional investing, and was most recently vice-president, national accounts, at Canoe Financial. Prior to that, he was director, client relationships, defined benefit solutions, at Sun Life Financial.

Indigenous Economy Investing Examined

‘Investing in Reconciliation and the Indigenous Economy: The Role for Institutional Investors’ is designed for investors interested in better aligning their investment practices with the principles of reconciliation. The event is sponsored by SHARE and NATOA. It takes place February 21, 2019, in Ottawa, ON. For information, visit Indigenous Economy