We leave 2021 in a different
but similar space to the previous year. The needs of the business community continue to change along with the
challenges put before it.
For the last Voice of Business of the year, we’re taking a look at a few of the issues that
business are facing.
Bruce Springsteen recently sold his recorded music catalog for a reported $500 million. A musical legend, there’s obvious value in holding the rights to much of his life’s work, but how much value?
Many modern businesses are built and thriving on what is termed intangible assets. These are items that aren’t physical,
but hold value. This can include algorithms, intellectual property, copyrights, research and
development, and brand value.
The Chartered Professional
Accountants of Ontario recently release a white paper titled You Can’t Touch This: The Intangible Assets Debate. It’s a must read for businesses
investing in technology and innovation, highlighting the need for accounting to modernize to develop a buffer against the risks of a market with jaw-dropping valuations for start-up and tech stocks and the monetization of assets like cryptocurrency and carbon offsets.
According to the Ontario Chamber of Commerce, seven of the 10 largest companies in the world were built on a
data-first model and it’s
estimated that 70% of the value of companies listed on the TSX consists of intangible assets.
The white paper is available through both the OCC and CPA Ontario websites.
Business Needs for Future Public Health Emergencies
The Canadian Chamber of Commerce is calling on governments of all levels to update their plans for future public health emergencies so unnecessary and damaging economic disruptions can be avoided. This includes:
• Travel protocols
To avoid broad-based shutdowns, there is a need to develop a range of testing protocols to enable safe travel. The Canadian chamber would like to see things like
recognizing vaccinations status, health credentials, and foreign digital health credentials sorted out ahead of the next health crisis.
• Increased harmonization of policies and regulations across provincial boundaries
The confusion with
contradictory messaging and protocols from various levels of government has been costly. A coordinated approach will help avoid the patchwork we’ve seen unfold.
• Future workplace health and safety guidance
Businesses want to implement the appropriate public health measures to protect
employees and customers, but the ever-changing nature of the guidance they have received has made it
overwhelming to follow. A clear, coordinated approach will help businesses navigate not only health rules, but
accessing PPE, handling
vaccinations and the
implications of it, and
protecting digital information from cyber attacks.
• Initiate an independent review of lessons learned
COVID-19 has killed millions of people and devastated economies around the world. A thorough review will help us prepare for the next crisis. It’s key that the review not assign blame, but sort through what did and didn’t work to help us plan for the future.
Fall Economic Statement
The Canadian Chamber of Commerce issued its response to the federal Fall Economic Statement, voicing its concerns that it would have been an ideal time to lay out more of an economic recovery plan rather than waiting for the 2022
budget. The Chamber notes that despite progress,
businesses are facing some
including more than a million job vacancies, one-third of businesses reporting labour shortages, over 40% reporting rising input costs as a
challenge, and the looming threat of a new COVID variant.
The Canadian Chamber of Commerce welcomed
funding for rapid test kits, the introduction of a tax credit for small businesses to support ventilation improvements, and the extension of the home office expense deduction. However, concerns remain about the plan to get back to balanced finances, no thorough plan to address supply chain challenges, a lack of initiatives to address cyber security
challenges, and we’re long overdue for a review of our tax system.
Though we’re facing a lot of challenges and they don’t feel significantly different from last year — we have positive
momentum. Vaccinations are freeing up critical intensive care beds and our health
agencies and pharmaceutical
companies are responding to changes and challenges at a record pace. We’re currently dealing with some setbacks, but we are slowly moving forward.
Supply chain issues have become one of the dominant business news stories, holding back our economic recovery while driving up inflation.
On the simplistic end, it’s a perfect storm of demand greatly outpacing supply. Of course, it’s much more complicated that that.
Like many issues, it’s one that has been building for some time before COVID-19 became the catalyst that drove it to a breaking point. We’ve come more and more to rely on the timely delivery of goods from just-in-time buying for manufacturing and agriculture to home delivery of consumer goods. We’ve not only increased demand, but also the timeliness and personalization of the service.
Globalization has also led to a world-wide diversification of the supply chain. Raw
materials from various countries are sent to manufacturing facilities, who in turn send their products to the assembly plants, before eventually getting products to market. A delay at one part of the chain has impacts all the way down to the consumer.
Though personal spending dropped as people remained cautious, it shifted away from services to buying more goods — which requires more of our supply chain.
We’ve been increasing our dependency on speedy delivery of goods, so when COVID-19 hit, various delays around the world were compounded into an issue that has crippled some sectors and industries.
This perfect storm brought the human factor to the forefront as facilities had to restrict output or shut down all together to manage the impact of the virus, putting more and more pressure on the people still running our supply chain. This has led to burnout, sickness and labour action. This is impacting port workers, truck drivers, and warehouse staff.
Our transportation networks are struggling to keep up, with widely reported backlogs at ports and shortages of trucks and drivers around the world.
Further adding to this have been extreme weather events, including the flooding in British Columbia knocking out rail and highway access to the Port of Vancouver.
Factory shutdowns and an increase or shift in demand have driven up demand for raw materials. Earlier this year it was widely reported that the increase in homebuying as well as reconstruction from catastrophic weather events had contributed to a wide-reaching shortage of foam used in furniture.
While the hindsight view of how we got into this mess is pretty clear, getting out isn’t going to be easy or quick. Current estimates don’t put a return to normal access to goods and materials for another year or two.
Part of the solution involves investment in infrastructure, both by the private and public sector on assets including ports, warehouses, roads, and rail. Another part involves wages, labour conditions, and training programs.
All of this comes at a price — but so do the delays.
Like many things impacted by COVID-19, a return to normal is a moving target. Businesses have turned local wherever possible to supply the goods and materials they need. Lower labour, material and production costs in foreign markets are offset by high transportation costs and lagging delivery times.
Localization is a way to compress the supply chain, managing risks and costs. The term “nearshoring” is coming up as businesses focus more on the resilience of their supply chain, focusing on access to goods and materials closer to their facilities.
This movement should help alleviate some of the strain on the global networks and reduce greenhouse gas
emissions on top of the benefits to local communities receiving increased investment.
The cost of doing business was identified by the Ontario Chamber of Commerce as the single biggest issue facing businesses at the moment, with supply costs being a significant driver of that. Prices aren’t likely to drop soon, but the more we invest locally in sourcing what we buy, the stronger we’ll be positioned as a community, a region, and a province to handle what comes our way.
This week’s Voice of Business looks at a wide range of business issues, including the employment skills gap, rising inflation, climate change, and adding social value to purchasing evaluation criteria.
The gap between vacancies and unemployment
The Canadian Chamber of Commerce is raising concerns over recent job numbers, which highlight a massive employment gap with 1 million job vacancies and 1.2 million unemployed
Canadians. Frustratingly, the two are difficult to connect due to a growing skills gap. It’s estimated that 33% to 55% of businesses are planning to hire in the next few months and expect challenges in filling the positions.
The Canadian Chamber is expecting labour issues to get worse through into early 2022.
According to the Workforce Development Board’s Eye on the Labour Market monthly report, the top 10 job
postings in Peterborough include:
1. Retail salespersons
2. Other customer & information services representatives
3. Home support workers, housekeepers & related occupations
4. Retail sales supervisors
5. Social and community service workers
6. Food counter attendants, kitchen helpers & related support occupations
7. Material handlers
9. Security guards & related security service occupations
10. Sales and account representatives - wholesale trade (non-technical) Inflation
Inflation is at an 18-year high at 4.4%. It is being driven by fuel prices, sky-high housing costs, rising food prices, supply chain challenges and wage growth.
Financial leaders are anticipating the inflation hike will be short term, which is likely to keep interest rates low well into the new year.
The Canadian Chamber of Commerce recently made a statement based on the Canadian Survey on
Business Conditions, which highlights costs remain the biggest obstacle for
businesses right now, with 43% saying its their biggest hurdle to recovery. While costs are going up with
inflation, 89% of private-sector businesses don’t expect their profitability to improve over the next three months and one-third expect it to decline.
Simply put, inflation is driving up both the cost of living and the cost of doing business at an alarming rate and at a critical time in our economic recovery.
Solar Panel Map
The City of Peterborough, in partnership with Fleming College, has launched an interactive solar panel map of all the buildings in Peterborough. The map covers both residential and commercial buildings in the city and provides information including an estimate of the usable roof area for solar panels, potential cost savings, and greenhouse gas emissions avoided by introducing solar panels.
The goal is help property owners who are considering installing solar panels and lowering electricity costs
during peak times.
Installing solar panels to generate electricity or solar thermal to heat water are excellent solutions to help lower your carbon footprint and actively tackle climate change. It’s also an opportunity to save money.
A list of local solar panel installation companies is available at peteboroughchamber.ca.
The City of Peterborough is moving ahead with its plan to include social
procurement in its purchasing for the next three years. The City is partnering with Buy Social Canada to implement the purchasing initiative.
Social procurement will leverage current spending to include social value as part of its evaluation criteria. This will hopefully lead to more value to the community.
Typically, government spending is done in relative isolation. A department needs to buy equipment, materials or services, finds the most cost-effective way to do so, and purchases it. Other
departments and ministries are addressing social,
community and environmental issues with their own budgets. By adding social value into that equation, we can maximize value to address social and environmental issues.
Ideally, social procurement also opens up new opportunities for local businesses to add value to bids on government contracts and enhance their competitiveness.
The flooding in British Columbia and Atlantic Canada is another reminder that climate change is a
There are many reasons why tackling climate change is a business issue. After all, the very survival of our species requires clean air and ample food. Unfortunately, that bigger picture isn’t always that relatable in the moment in our day-to-day lives. It takes the tangible to create the necessary urgency.
It’s not just a series of localized issues. It’s incredibly sad seeing the devastation to communities — people have been displaced as whole neighbourhoods and commercial districts have been washed away or covered in mud and debris. Multi-generational farms have been knocked out of production. Communities will never be the same.
On a national level, damage to highways, bridges and rail lines have crippled already struggling supply networks. The Port of Vancouver, our nation’s busiest port and a key link in the supply chain for both our imports and exports, is backlogged and isolated.
While we won’t know the full extent of the damage for a while yet, estimates on the cost of rebuilding are in the billions. Peterborough has its own history of flooding. Anyone who has tried to traverse the Bethune Street corridor recently knows first-hand that the City is busy trying to mitigate flood risk through a massive infrastructure project.
The Canadian Chamber of Commerce currently has a number of resolutions on the books to advocate that the federal government address climate change issues,
flood management in a resolution titled: Funding For Climate Change Adaptation – Severe Weather Disaster Mitigation through Flood Protection.
Northern communities are adapting to their new normal of increased wildfires. A study from the University of Alberta found that eight of the world’s worst fire seasons happened in the last decade. In BC, it’s worst five were the last five years.
In short, these catastrophic natural events are a pressing economic issue. They have left us with less production capacity for food and other goods and made it incredibly difficult to both get needed supplies and get our goods to market.
While floods, wildfires and other natural disasters have always been part of the human experience, the frequency, severity, and unpredictability of them is undeniably impacted by our rising greenhouse gas
The national Oceanic and Atmospheric Administration estimates catastrophic weather events in the US have cost an average of $128 billion a year for the last 5 years, up from an average of $50 billion annually over the last 40 years. Swiss Re, one of the world’s largest insurance providers, estimates that climate change will reduce global economic output by 11 to 14 percent by 2050, adding up to a cost of
approximately 23 trillion dollars.
Climate change is costing us massive amounts of money. We’re spending billions on risk mitigation infrastructure projects and property loss. Many businesses know first-hand that insurance can be difficult, if not impossible, to attain in some parts of our community.
Options for addressing climate change are complex. The recent COP26 summit highlighted some key solutions, though political follow-through has always been problematic when it comes to meeting climate goals.
We can debate the costs, methods, and programs that will get us to where we need to be in our fight against greenhouse gas emissions, but it’s evident that all
options carry a significant price tag — including the
The Peterborough and the Kawarthas Chamber of Commerce acts as a catalyst to enhance business growth, opportunity, innovation, partnerships and a diverse business community.