It’s the end of the year as we’ve known it and more of us are several yards short of fine. Only after the phrase “dumpster fire” becomes a frequently used descriptor on the national newscasts does one realize they’ve entered a new place, a terra incognito built simultaneously on fear and false equivalency. But that’s where we are and that’s what drives culture and culture is both cause and outcome of business.
If only the only thing to fear was fear itself. That luxury is so last decade. Writing this piece while simultaneously checking social media and listening to the drone of cable news in the other room one might think we’re on the edge of a swirling abyss, surfing the event horizons of several significant disasters at the same time.
So this isn’t really a predictions piece. It is more of a how things look right now piece. The pace of change in society is advancing too rapidly to make any reasonably safe predictions while still sounding sane and reasonable. Who could have predicted we’d be here this time last year? (As it turns out, just about every rational observer did.)
The perspective on where “we” are, and who “we” is, very often frames the debate. Writing this piece from the cool comfort of Toronto, Ontario, “we” appear to be in pretty good shape economically, culturally, legally, and nationally. Yes, there are structural problems with the ways each level of government deal with their budgets and duties but, by and large, we have highly responsible and competent government. That’s a gift compared to what’s happening to our neighbours.
Toronto’s economic engine is roaring strongly, even as the fuel sources that drive it, the manufacturing and industry, change rapidly to personal and financial services both here in the digital world and beyond your mobile device or desktop in the real offline world. Construction is still high, upgraded modern office space is at a premium, the tech industry is booming, and there is a sense that Toronto’s greatest days are almost here, just on the cusp of tomorrow. That’s a pretty good place for a city to be.
Similarly, Canada’s economy is growing at a strong pace. Based on results from the first three quarters of 2017, Canada’s economy grew 3%, a higher rate than all other G7 countries. A particular point of hope for both the Canadian and global economy is Alberta, which has managed to increase its economic output a whopping 6.7%, at a time of stagnant global oil prices and lowered investments in oil sand projects. Ontario, Quebec and British Columbia each grew by 3.2% in 2017. By comparison, the United States grew its GDP by 2.2% and Germany’s by 2.0%. Canada continues to outperform the world.
Canada will remain in a relatively competitive position no matter what happens. That sounds weird doesn’t it? It’s not that weird. Remember, this is business in a time of incredible change. Everything is relative to who and where you are, and what is going on around you. Canada might feel unstable right now, especially by Canadian standards but it’s in the best position it could be, given a set of highly problematic circumstances.
Continental free trade has been the foundation of Canada’s economy for the last three decades. That is about to change. The American government has reopened the North American Free Trade Agreement (NAFTA) and is trying to force Canada and Mexico to accept trade conditions that blatantly benefit Americans only. This stance will likely lead to a failure of the talks and the eventual end of the NAFTA partnership. That leaves Canada with two existing trade deals with the United States. The first is the original Free Trade Agreement and the second is the global General Agreement on Tariffs and Trade (GATT). Ultimately, Canada needs a 21st century trade arrangement with its largest trading partner. It would stand to reason Canada would enter bilateral talks with the United States to develop such a deal. That, however, would leave out Mexico, which has become an essential supplier and trade partner for labour and parts in the massive North American automotive sector. Not including Mexico in what has become such a complex supply-chain would create truly impossible conditions which could drive the costs of consumer goods up considerably while making the arrangements of business much harder.
Canada is a resource based trading nation managed by people who live in condos in the most urbane and intelligent cities Earth can offer. We mine and finance mining in other places. We cut wood and finance lumber operations around the world. We grow grains and beef, and have unfound or untapped reserves of traditional and rare Earth minerals. We are gold and diamonds and uranium and potash and all sorts such stuff and we still have a world’s supply of each for the taking.
Canada also has free trade deals with the European Union, Japan, other Commonwealth nations, and with most South American nations. We are still pursuing the Pan Pacific Trade deal and have at the very least opened Chinese interest in negotiating freer trade. Canada has options it hasn’t needed to develop until now and it is also supported by powerful allies.
In 2017, airplane manufacturer Boeing filed a trade complaint against its much smaller Canadian rival Bombardier. Bombardier had accepted government bailout monies after sluggish sales and slow development of its C-Series jet planes. Those bailouts were characterized as unfair subsidies, which pushed the US government to impose harsh tariffs on Bombardier just before it was to sell 125 C-Series planes to Delta Airlines. The deal was saved by Airbus which moved in to partner with Bombardier on the manufacture of parts of those planes in their American factories.
An important deal for one of Canada’s most important companies was saved by a compromise deal. That’s a Canadian outcome. It’s probably safe to assume we’ll be seeing more compromises in the near term future as Canada tries to ensure access, all the while waiting for the political climate to change.
In the meantime, people are left with the business of doing business. Technology will continue to drive change in what business is and how it is conducted. Right now, one of the greatest active trends is the extraordinary interest in Bitcoins and other crypto-currencies. No matter what happens with the price of any given crypto-currency, the real revolution is found in the ledger used to record and store value, blockchain. The advent of blockchain and other decentralized but unbreakable ledgers will alter our relationship with money and our ideas about the stored values of things. China’s bizarre experiment where it will be rating the social and economic worth of each citizen’s contributions will be dependent on blockchain to record value. So will future contracts, possibly even basic employment contracts.
One of the brightest trends of 2017 has been the sudden realization that people are no longer tied to place. People can travel across oceans overnight and find themselves on the other side of the planet by day-break. Perhaps it’s because a full generation has grown up in a fully wired world or perhaps it’s because there is a generational shift in the meaning of career employment that’s trending towards knowledge based work. As long as both hemispheres of your brain are working, it really doesn’t matter what hemisphere of the planet you’re on. Now that a critical mass of people have de-desked themselves, a living-room form of working space has evolved, the coworking model. Imagine a comfortable playroom in a beautiful setting with excellent WiFi, print and fax services, coffee, tea, or juice, really good places to sprawl out and work in, and a bunch of other cool people doing their things too. That’s a co-working space, new home to the traveling techie, globetrotting consultants, and local self-employeds who want others around them while they work.
Moving around for the next few years might be a good strategy for those who can do it. It’s hard to say how the coming weeks and months will turn out. So much happened in 2017 and a lot of it simply doesn’t make sense. Toronto is in an excellent position, as is Canada, even if the world around appears to be crumbling or just terribly concerning.
Stuff to think about:
- Guaranteed Annual Income
- Home delivery vs. Retail
- Uber, Lyft, AirBnB, and other “sharing” economy examples
- American politics
- The Leafs finally winning the Stanley Cup
(ok, that last one is probably fantasy)