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October 26, 2021

Your CFA Update on COVID-19

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New federal Cabinet sworn in today in Ottawa

By Don Moors and Joshua Matthewman, Temple Scott Associates

The new Federal Cabinet was appointed this morning. The Prime Minister took one of the longest time periods ever after an election to appoint a Cabinet, telegraphing major changes. In the end, there was a significant reorganization of Ministers and their portfolios. Nine new Ministers are entering Cabinet and 21 returning Ministers have been assigned some kind of changed portfolio. The new Ministers are predominantly from Atlantic Canada, the Greater Toronto Area, and Quebec, reflecting the importance of those regions to Liberal election victories, and one of the Liberal Alberta MPs is in Cabinet as well. Cabinet is one person larger after today, now comprised of 38 Ministers, plus the Prime Minister, and the Ministers are once again gender balanced.

Getting beyond the raw numbers and regional considerations, there are several interesting areas of change and continuity in the new Cabinet. With the exception of the major economic portfolios, the Cabinet shuffle saw new Ministers assigned to almost every traditionally significant Department and to the policy areas that the Liberal Party has signalled it will prioritize during this term of government. Those Ministers, discussed in the following section of this note, will have major impacts on Federal policy while in their posts.

Finance and the Economy

As the Prime Minister announced several weeks ago, Chrystia Freeland (University-Rosedale) will continue in her joint role of Minister of Finance and Deputy Prime Minister. Meanwhile, Mona Fortier (Ottawa-Vanier) was promoted to Treasury Board President, meaning that she and Minister Freeland will continue to work closely on fiscal policy, as they did during the last term of government.

In fact, the major financial and economic portfolios are the only case of significant continuity after the Cabinet shuffle, with François-Philippe Champagne (Saint-Maurice—Champlain) remaining as Minister of Innovation, Science and Industry; Mary Ng (Markham-Thornhill) continuing as Minister of International Trade, Export Promotion, Small Business and Economic Development, and Omar Alghabra (Mississauga Centre) retaining his role as Minister of Transport. The Prime Minister will rely on those familiar and experienced voices to help the Liberal government navigate the recovery from the fiscal and economic impacts of the COVID-19 pandemic.

In addition, Randy Boissonnault (Edmonton Centre), returning to Parliament after losing in Election 2019, was given the new portfolio of Minister of Tourism and Associate Minister of Finance. The Government is sending a clear signal of intent by giving the tourism sector, which was decimated by the COVID-19 pandemic and has little chance of a deep and sustained recovery until 2022, a dedicated Minister. Watch for Minister Boissonnault to oversee targeted programs for the recovery of that sector.

Finally, a minor but notable change to the economic portfolios is that there are now dedicated Ministers for the various regional economic development agencies. That has traditionally been the case, but not under Prime Minister Trudeau. Those Ministers will also be key stakeholders for regional economic recovery strategies from the pandemic.

Health and the COVID-19 Pandemic

Other than the economic portfolios, almost every Department that deals with issues pertaining to COVID-19 was assigned a new Minister, with the exception of Carla Qualtrough (Delta) as Minister of Employment, Workforce Development and Disability Inclusion. That major change reflects a belief that, after leading the Federal response to the pandemic for twenty months, the team managing the crisis needed to be refreshed.

Most notably, Jean-Yves Duclos (Quebec) is the new Minister of Health, having previously served as Treasury Board President.  A new portfolio was created for Carolyn Bennett (Toronto-St. Paul’s), who becomes Minister of Mental Health and Addictions and Associate Minister of Health.  Finally, Filomena Tassi (Hamilton West-Ancaster-Dundas) is the new Minister of Public Services and Procurement, which has been responsible the procurement of vaccines and other pandemic medical supplies.

The creation of a dedicated Ministerial portfolio for Mental Health and Addictions should not go unnoticed at a time when several Canadian municipalities – including Toronto and Vancouver – are exploring decriminalizing opioids as a way to combat the addictions crises in their communities. In the coming years, this portfolio could be important to transformative changes to public health and law enforcement in Canada.

Finally, Minister Duclos will soon need to embark on major Federal-Provincial negotiations to renew the Canada Health Transfer. The results of those negotiations will shape Federal spending and healthcare services across Canada for years to come. The Prime Minister has promised to increase healthcare funding through the Transfer, but only with conditions on how Provinces spend that money, which is always a trigger for Federal-Provincial tussling.

Climate and Environment

Perhaps the biggest “splash” of the Cabinet shuffle was the appointment of Steven Guilbeault (Laurier—Sainte-Marie) as Minister of Environment and Climate Change (ECCC). With his appointment, the Liberals likely hope to communicate to left-leaning voters that the climate file continues to be a high priority for the Government and to ensure that the Quebec media covers more of the Federal policies in this area (due to the Minister’s roots in that Province’s environmental movement and the fact that climate is a particularly impactful issue in Quebec politics). On the other hand, the appointment will be divisive, because Guilbeault is strongly disliked by many Conservatives due to his history of criticizing the Alberta oil and gas sector.

Minister Guilbeault must immediately get briefed and prepared to lead the Canadian delegation to COP26 in Glasgow. It will be interesting to monitor if he can make an international impression at COP and leverage his past experience with the Summit to make progress on climate issues, having attended and founded Équiterre at the first COP in Rio de Janeiro in 1993.

Meanwhile, outgoing ECCC Minister Jonathan Wilkinson (North Vancouver) has been shifted to the Natural Resources portfolio. Wilkinson spent much of his career as an executive in the low-carbon energy and clean tech sectors. Expect his mandate at Natural Resources (NRCan) to focus on aligning departmental programs and policies more closely with the Federal climate plan. Past governments – and especially Conservative ones – have viewed the NRCan portfolio as an economic one, but this government increasingly thinks the Department must have a strong environmental focus in order for Federal climate targets to be achieved.

Other Notable Appointments

·         Anita Anand (Oakville) who lead the COVID-19 vaccine procurement is the new Minister of National Defence charged with reforming the handling of sexual assault and harassment allegations within the Armed Forces.

·         Mélanie Joly (Ahuntsic-Cartierville) was appointed as Minister of Foreign Affairs – a post that traditionally goes to a Minister viewed as more senior and seasoned. Joly’s flawless bilingualism and strong communication skills were likely the major factors in her appointment – four of the five Foreign Affairs Ministers under Prime Minister Trudeau have been Quebecers.

New Faces

·         Sean Fraser (Central Nova), previously Parliamentary Secretary to the Minister of Finance, becomes Minister of Immigration, Refugees and Citizenship.

·         Gudie Hutchings (Long Range Mountains) becomes Minister of Rural Economic Development.

·         Marci Ien (Toronto Centre) is the new Minister of Women and Gender Equality and Youth, Kamal Khera (Brampton West) is the new Minister of Seniors,

·         Helena Jaczek (Markham-Stouffville) was chosen as the Minister Responsible for the Federal Economic Development Agency for Southern Ontario

·         Mark Holland (Ajax) was promoted to Cabinet in the role of Government House Leader.

·         Pascale St-Onge (Brome- Missisquoi) is Minister of Sport and Minister Responsible for the Economic Development Agency of Canada for the Regions of Quebec.    

Departures

·         Jim Carr, who was the Prime Minister’s Special Representative for the Prairies;

·         Bardish Chagger, who was Government House Leader and Minister of Diversity and Inclusion and Youth;

·         Marc Garneau, who was Minister of Foreign Affairs.

The full membership and roles of Cabinet can be found here.

What happens next

Parliament will return on November 22 with the election of a Speaker and a Speech from the Throne. Parliament is scheduled to sit for four weeks before recessing for Christmas and returning in late-January for the winter session.

A Fall Economic Statement may also be introduced before the Christmas recess. 

Mandate letters will be sent to Ministers, outlining the priorities for each Department, sometime during the next month or so.

With the appointment of a new Cabinet, corresponding changes to the staff teams of each Minister and at PMO will begin in earnest. We expect several Chiefs of Staff to leave government and there has already been some churn of other senior staff. For example, the PMO appointed two Deputy Chiefs of Staff (Brian Clow and Marjorie Michel) to augment the management ranks of the Prime Minister’s team.

The Federal Cabinet Committees webpage has been updated with a notice that new Committee memberships will be published soon. The Committee memberships will indicate which Ministers hold the most influential roles in Cabinet. Watch in particular for the memberships of the Committees for Finance, Climate, and Health.

The Conservative and NDP Shadow Cabinets will be appointed in the coming weeks.

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Ontario capacity limits changing: Ontario Releases Plan to Reopen Ontario

The Ontario government has released A Plan to Safely Reopen Ontario and Manage COVID-19 for the Long-Term, which outlines the province’s plan to all remaining public health and workplace safety measures, including the provincial requirement for proof of vaccination and wearing of face coverings in indoor public settings by March 2022.

Public health and workplace safety measures will be lifted based on the proposed following milestones:

October 25, 2021: Lift capacity limits, including physical distancing requirements, in the vast majority of settings where proof of vaccination are required, such as restaurants, bars and other food or drink establishments; indoor areas of sports and recreational facilities such as gyms and where personal physical fitness trainers provide instruction; casinos, bingo halls and other gaming establishments; and indoor meeting and event spaces. Limits will also be lifted in certain outdoor settings.

November 15, 2021: Lift capacity limits in the remaining higher-risk settings where proof of vaccination is required, including food or drink establishments with dance facilities (e.g., night clubs, wedding receptions in meeting/event spaces where there is dancing); strip clubs, bathhouses and sex clubs.

January 17, 2022: Gradually lifting capacity limits in settings where proof of vaccination is not required. Proof of vaccination requirements may also begin to be gradually lifted at this time, including for restaurants, bars and other food and drink establishments, facilities used for sports and recreational facilities and casinos, bingo halls and other gaming establishments.

February 7, 2022: The government intends to lift proof of vaccination requirements in high-risk settings, including night clubs, strip clubs, and bathhouses and sex clubs.

March 28, 2022: All the remaining public health and workplace safety measures will be lifted, including wearing face coverings in indoor public settings

Click here to read more about the changes.

Alberta bill aims to speed up certifications for more than 100 professions

The Alberta government introduced legislation (Bill 49, the Labour Mobility Act) that will require organizations that regulate physicians, lawyers and about 100 other professions to approve the credentials of workers from other provinces within 20 working days.

The government says applications submitted by professionals can sometimes be delayed which hurts Alberta businesses. Premier Jason Kenney says the bill sends a message to regulatory bodies in the province. 

Labour and Immigration Minister Tyler Shandro said the legislation will smooth the path for professionals from other provinces to work in Alberta. "The act will make Alberta the first and the only jurisdiction in Canada to legislate timelines for registration decisions," Shandro told a news conference. "Regulatory authorities will be required to look at applicants and give registration decisions within 20 [working] days. "And that means that if someone is certified as a professional and they submit the necessary documents and they meet all of the requirements, they can expect to get to work within one month, upon applying."

Under the bill, a regulator would need to let an applicant know their request was received within 10 days and the decision must be made within 20 working days. The regulator has another 10 days to let the applicant know the decision. 

Regulators would also be required to publish information on fees and what documentation is required in Alberta on their websites. They would also need to set up a timely review process and keep a record of decisions for three years. 

The bill also applies to government departments that regulate occupations like driver examiners and home inspectors. The bill proposes maximum fines of $25,000 for individuals and $50,000 for organizations that fail to meet the new deadline.

Header: Growth & Exit

Thursday October 28, 2021 | Virtual Event | 12pm to 3pm EST

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This annual event will update franchisors, multi-unit franchisees and their owners on the state of the market and educate them on the right things they can do now and, in the future, to ensure that they are in the best position to maximize the value of their business and take advantage of the opportunities presented by one or more of these growth and exit strategies.  It is also designed to create a space to connect directly with Canadian and American potential investors and buyers, and for them to connect to the franchise community.

Growth & Exit: John DeHart

Right-to-disconnect policies included in new labour legislation being introduced by Ontario government

The Ontario government is introducing new legislation that would require large employers to put in "right to disconnect" policies and bar non-compete clauses. 

The legislation would require employers with 25 or more employees to develop disconnecting-from-work policies, which could include expectations about response time for emails and encouraging employees to turn on out-of-office notifications when they are not working.

Click here to read more

Quebec could put off Nov. 15 health network vaccination deadline: Legault

Quebec Premier François Legault opened the door Monday to further postponing a Nov. 15 deadline for health workers to be fully vaccinated.

In a series of radio interviews, Legault said staff shortages could necessitate putting off the deadline again after an initial Oct. 15 date was pushed back by a month for the same reason.

The province had said workers not fully vaccinated by the October date would face suspension without pay, but Health Minister Christian Dubé backed down a few days before the deadline.

He said the health system was facing the loss of about unvaccinated 22,000 workers, which would have put too much strain on an already taxed system.

The latest update suggests 19,634 workers in the health sector are still not fully vaccinated and 13,714 haven't received a first dose.

Bank of Canada on cusp of capping stimulus

The Bank of Canada will continue pulling back its support for the economy at a policy decision this week, paving the way for the start of interest rate increases next year amid inflation worries.

Governor Tiff Macklem is expected to reduce weekly government bond purchases by one half on Wednesday to $1 billion (US$809 million). That will mark the fourth time over the past 12 months the central bank has rolled back a program that has poured hundreds of billions into the financial system since the start of the COVID-19 pandemic. 

Policy makers may even go as far as to formally announce they’ll stop growing bond holdings altogether, ending their quantitative easing program and effectively capping stimulus at current levels.

The sooner the central bank stops adding support to the economy, the faster they are expected to pivot to a tightening cycle. Investors are anticipating the Bank of Canada will start raising interest rates within the next six months, with markets pricing in four rate hikes next year.

Inflation is more powerful than policymakers believed a few months ago,” Doug Porter, chief economist at Bank of Montreal, said by phone. “The world has changed and I think policy has changed.

The Bank of Canada has been using two major tools to keep borrowing costs low: maintaining its policy interest rate near zero and buying up hundreds of billions of government bonds from investors to keep longer-term borrowing costs in check. Officials have said they will only start raising interest rates once their purchase program plateaus.

The central bank has already increased its bond holdings by about $350 billion since the start of the pandemic. It started buying $5 billion a week initially in the secondary market but has

Click here to read more.

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COVID-19's impact on the world is creating waves across all sectors and industries.

Every member of the CFA community is dealing with an issue that is affecting the world, our industries, our communities, our businesses, and our people.

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