Benefiting North American Clients: Roland DGA on its Strong Cross-Border Collaboration

Roland DGA Corporation oversees North and South American sales, marketing, and distribution for its parent company Roland DG Corporation headquartered in Hamamatsu, Japan. Having joined the Council in February 2022, Roland DGA is a relatively new member of MAPLE Business Council.

Since 1995, Roland DGA has operated a Canadian regional office, initially with two employees, and now employing five staffers who are responsible for sales and distribution to approximately 50 resellers throughout Canada.

We recently spoke with Roland DGA’s Canada Sales Manager, Don Ross, about the state of the Canadian sign and graphics market, current cross-border supply chain and fulfillment challenges, and the strategies Roland DGA uses to satisfy Canadian customers and identify new market opportunities.

How would you generally describe the relationship of your Canadian regional office with Roland DGA Corporation in the US, and your Japan-based parent company, Roland DG?

We are responsible for overseeing Canadian sales as well as for providing support for our network of resellers throughout Canada. Product demonstrations and sample printing are conducted in our Barrie, Ontario office, which is about an hour north of Toronto. Marketing activities, customer service and tech support are shared responsibilities between our US headquarters and our regional office. From our office in Canada, we participate in trade shows and dealer open house events as the opportunities present themselves, to maximize interest in our products and cultivate sales opportunities.

We have a very strong working relationship with both our U.S.-based headquarters and our parent company Roland DG in Japan. Roland DGA, the Americas headquarters, is our main conduit for almost all dealings, and Japan keeps Roland DGA and all the other Roland DG business units worldwide abreast of any new product or financial developments that arise.

Ordinarily, I would make annual visits to the Roland DG headquarters, however that activity has been curtailed over the past few years, primarily due to the pandemic. Zoom and Teams meetings have been beneficial in maintaining some semblance of personal contact throughout our global organization. The three-hour time difference between EST and PST can be easily navigated, however the 14-hour time difference to Japan has made such virtual meetings somewhat more difficult.

What are the core markets for Roland DGA and how do you go about identifying and capitalizing on new market opportunities?

We address a multitude of markets in the sign and graphics industry, apart from our dental business which is a different conversation by itself. As far as sign and graphics industries are concerned, our digital inkjet printers and printer/cutters are used by businesses that focus on signage, advertising, packaging, promotional products, apparel, manufacturing, sports, education, labels, vehicle graphics, and many other applications. Our customers range from small one-person and “mom and pop” operations to some of the largest global enterprises. Roland DGA’s market penetration is very similar throughout North America.

When it comes to identifying and developing new markets for our products, the approach we take differs from most of our competitors. Many manufacturers take a product-centric approach to generate new business. That often means they rely upon price and margin reductions to compete. Instead, we like to provide a “total solution” and approach prospective customers with the goal of developing a partnership rather than simply making a sale. Our goal is to create long-lasting relationships with our customers built on trust and provide them with world-class service and support every step of the way to ensure their success. Developing such partnerships may require putting in extra time and effort, but the long-term payback almost always substantiates the initiative.

What is the current state of the sign and graphics market in Canada and what type of Roland DG devices are the top-selling products in your region?

After experiencing surprisingly brisk sales throughout the COVID period, business is rather soft at present due to some macro-economic headwinds. Canadians typically become cautious when downward economic trends present themselves. That said, in general, Canadian customers are early adopters, embracing new technologies very quickly following their introduction into the marketplace. This typically provides a preview for the rest of our Americas territory, to further inform our sales and marketing efforts.

There are some new market segments Roland DGA has been targeting that are currently booming. One such segment is the SOHO (“small office, home office”) space.

Since the start of the pandemic, more and more people are either working from home or have the desire to do so. This trend has created opportunities for Roland DGA and our line of affordable desktop devices, such as the VersaSTUDIO BN-20 series printer/cutters, VersaSTUDIO BT-12 direct-to-garment printer, and VersaUV LEF Series benchtop UV printers. Each of these devices is essentially a “business in a box,” making it easy for those with limited space and resources to start up a lucrative home-based online business. A minimal investment makes it possible for people to change what may have previously been a fun hobby or sideline into a profitable occupation.

From a custom watch manufacturer in Montreal, to a lady in Winnipeg who has developed a business printing custom guitar picks, to a Vancouver-based business decorating jewelry with fingerprint impressions, we are frequently amazed by the inventiveness of Roland DGA end users.

As far as our top-selling product is concerned, it is hands down our VG3-540, a 54” mild-solvent print-and-cut device that prints stunningly colorful, detailed, and durable indoor and outdoor graphics. This printer/cutter combination caters to a wealth of applications and was a valuable asset to many during the Covid crisis.

Graphics were needed in quick response to inform consumers about mask requirements, floor spacing, take-out only options, etc. The usual pre-COVID demand for concert, film industry, and tradeshow graphics, was replaced by the demand for health and safety signs, banners, floor decals, and stickers.

As business is gradually returning to a more normal state, orders for hockey stick graphics and new arena rink boards demonstrate a “welcome back” to regular demand print operations experienced prior to the pandemic.

What was Roland DGA’s total Canadian sales revenue for 2021? Do you anticipate increased sales revenue for 2022? What about looking forward to 2023…what kind of year are you expecting from a sales standpoint?

Roland DGA’s sales revenue in Canada for 2021 was $11.2 million USD – $9.5 million for our digital imaging products plus $1.7 million in dental product sales. It looks like we will show marginal gains this year, and we expect to see a reasonable increase in sales for 2023 as well.

We are anticipating additional products directed towards the SOHO sector, which will help us expand our presence in this market. There are new customers out there for our current products also – we just need to find them.

We recently hired a new sales manager who will be concentrating exclusively on these home-based businesses. She is already having success in building a support community for these types of customers. We thought we were aware of all the relevant industry trade shows in North America: who would have known that there is an Anime Impulse Show at the Orange County Fairgrounds that attracts more than 10,000 attendees!

What are some of the challenges Roland DGA encounters in fulfilling Canadian customer orders through the North American headquarters, Roland DGA, based in California? Are there any cross-border requirements or obstacles you have had to overcome?

Freight costs have escalated over this past year, which has of course led to an increase in the cost of landed goods. For some reason, due diligence has been deteriorating with respect to ensuring that Commercial Invoice paperwork accompanies all shipments. This is a local issue, no doubt, but one that’s noticeably apparent and causing delays.

Supply chain problems have affected businesses all over the world, and based on reseller feedback, it has been estimated that we’ve lost about 15 percent of our overall Canadian sales due to these issues. Roland DGA’s parent company in Japan has been working feverishly to mitigate the problem, however the reality is that component shortages still hamper business.

How is the current jump in inflation impacting business for Roland DGA in Canada? What about supply chain issues?

Inflation is affecting everyone to one degree or another. Like people all over the world, Canadians are feeling the impact at the gas pump, grocery store, and when it comes time to pay the rent or mortgage.

Every month, we circulate a Canadian MSRP Price List reflecting currency, shipping costs, and other important business metrics. We have had to increase these MSRP values twice in recent months. Unfortunately, in a few cases, supply chain issues have led to some of our multi-line dealers promoting competitive brands.

The forecast for supply chain improvements is positive for 2023, however, so we are hoping these positive changes will materialize.

What about customer service/support throughout Canada; how are you able to supply Canadian customers with the kind of world-class service that Roland DGA is known for?

Our Canadian team is very responsive to calls from our dealer network as well as end users, answering calls from 8:00 a.m. to 8:00 p.m. EST on a typical weekly basis. Our Canadian dealers especially find that we are just as readily available, if not more so, than our U.S. counterparts. We do, however, seek assistance from the U.S. from time to time if we are unable to solve certain cases with our own resources – primarily online issues, which can be difficult and time-consuming to navigate. Our cross-border collaboration results in a seamless and timely response to most of our clients’ support needs.

For more information on Roland DGA Corporation, please visit www.rolanddga.com.

Permeable Paving: Stormwater Management For The Future

Authors: Jason Brooks & Mike Coates, Co-CEOs, Ecoraster

With the predicted increase in precipitation and storm events over the coming decades, the issue of how to effectively manage stormwater is becoming more pressing than ever before.

From the water we drink, to the snow that we play in, and the tennis courts we socialize in, all are affected by permeable paving. Groundwater is our source of drinking water, and precipitation can carry harmful chemicals - once those chemicals fall onto the ground and pavement, without a proper filtration system which is included in a permeable solution, those chemicals go back into the environment, including the air and the land. Permeable paving systems help safeguard our health by safely disposing of stormwater runoff.

More and more, we have been “paving paradise” and sealing up areas that were nature’s way of managing stormwater. Permeable paving systems have been developed as a way to “return to nature” and allow stormwater to be managed on-site “where it lands”. Permeable systems are designed not to pave over surfaces, but to become a part of them. The porous surface allows stormwater and water from thawing snow to seep back into the ground rather than running off. By allowing the stormwater to become groundwater, permeable paving becomes a crucial part of water’s natural cycle.

It goes without saying that we’re already seeing the effects of increased stormwater in urban settings. Noticeable uptick in hurricanes across North America and flooding in major cities such as New York, California, Louisiana and Texas, to name a few. Projections of future precipitation in a scenario that scientist’s term “business-as-usual” (i.e., a future where emissions continue at their current rate) project annual rainfall to increase by almost 100 ml over the coming century.

As the earth heats up, the risk of increased storms in precipitation-prone areas is becoming more acute. While it’s a lesser-known effect of the developing climate crisis, stormwater will nonetheless drastically affect life in many places and particularly in cities, where the higher density of paved surfaces means that the consequences of stormwater runoff are exacerbated. The growth in major city centers and the areas surrounding is far surpassing the ability of the existing municipal infrastructure. Not only are the existing sewers and drainage systems unable to manage the increasing volumes of stormwater, but they are also aging and starting to disintegrate.

This has the potential not only to increase flooding, but also to incur costly and more frequent infrastructure maintenance due to debris being carried into and blocking storm drains. It also poses a risk to the water supply, as factory runoff, chemicals from fertilizers, and other pollutants, such as pet waste, get carried by stormwater traveling over pavement, eventually ending up in SWM (stormwater management) ponds or even contaminating rivers and natural waterways. This contamination can result in serious repercussions for wildlife outside of cities and cause ripple effects all the way into regional biodiversity, and throughout the food chain.

These repercussions are certainly the effect of stormwater; however, they are also attributable to the way that municipalities deal with stormwater. While the effects of climate change cannot immediately be reversed, they can be managed through effective planning and infrastructure, including built-in stormwater management. With the exception of parks, trails and some historic districts, a large percentage of spaces in major cities, such as Toronto, are completely paved with asphalt. This impervious substance has been in wide use across the world for over a century, and while it may have been suitable for the conditions of the past hundred years, asphalt is decidedly not a material that can carry us into a sustainable future.

Change can be hard, understandably, but rest assured, permeable paving systems have been successfully used for over three decades across Europe alone. In Europe, landowners are taxed according to the percentage of impermeable surface and homeowners are even forbidden from using solid surfaces such as asphalt for their driveways. The concept that there are incentives and often grants available towards the inclusion of permeable surfaces is something that should be adopted across North America. The realization that when homeowners include permeable surfaces rather than conventional asphalt, municipalities benefit as well, is something that should not be taken lightly. There are even cities which offer additional tax benefits and credits to landowners when they design their facilities to manage additional/overflow stormwater from nearby properties.When individuals are responsible for managing their stormwater on site “where it lands”, both landowner and municipality benefit!

Supporting the individual to make these changes is important, however, the greatest and most effective changes happen when we “lead by example”.

It is imperative that municipalities “practice what they preach” and start including permeable paving surfaces for their facilities as well. All on-ground parking lot surfaces should be permeable, there is no question. All commuter parking lots, all nature pathways, all school parking lots...even sidewalks – And, as an added benefit, many permeable systems are also used as “solutions” for problematic areas. In older city centers especially, there are often underground obstructions such as mature tree roots, pipes and cables that greatly limit the depth of base able to be excavated. Many of these systems can be used as a base reinforcement, allowing you to reduce the required base depth by up to half while ensuring the strength of the base is not compromised. In these situations, permeable systems can also be used as the surfacing material, providing additional benefit to the area with onsite storm water management. Win-win for everyone!

It is easier to “go permeable” than you may think. There are many permeable paving systems that offer a scalable and affordable solution to flooding and stormwater pollution in cities.

Made in Canada of 100% recycled plastic bags, ECORASTER® permeable paving system of interlocking tiles creates a solid, permeable surface with a guaranteed lifespan of more than twenty years. Ecoraster fits into most municipal budgets, requires less maintenance than traditional asphalt paving, and is AODA / ADA compliant. Able to stop stormwater runoff in its tracks, halt the flow of debris into drains and ponds, and withstand up to 800 tonnes of pressure per square meter, Ecoraster permeable paving is designed with the future of our cities in mind.

To find out more about the available range of Ecoraster paving products and their uses, contact ECORASTER®. A trusted group of Ecoraster distributors are ready to assess the needs of each project and help determine the best Ecoraster product to deliver a durable permeable paving solution. Visit https://www.ecorastergrid.com/ to find out more.

Our Interview with Consul General Susan R. Crystal of the U.S. Consulate General Toronto

We are delighted to connect with Consul General Susan Crystal to discuss the work of the U.S. Consulate General in Toronto and the importance of Ontario’s economic and cultural ties with the United States.

Q1. Consul General Crystal, thank you for taking the time to share a window on the work of the U.S. Consulate General in Toronto. To start, would you please share an overview of the scope of work and services that your office undertakes?

My pleasure - and thank you for the opportunity to talk about our work with your members. The U.S. Consulate General in Toronto’s mission is to strengthen and deepen the bilateral relationship between the United States and Canada, with a particular focus on Ontario west of the National Capitol Region. Our activities support the promotion of U.S. foreign policy goals, particularly as we work together with Canada to advance the Roadmap for a Renewed U.S.-Canada Partnership.

At the Consulate, the Political and Economic Section engages local and provincial government representatives, as well as the business community and civil society, in the Greater Toronto Area and in our consular district. The Public Diplomacy Section’s work focuses on informing, engaging, and connecting the people of the United States and the people of Canada.

Our Consular Section provides emergency assistance and passport and citizenship services to U.S. citizens, and processes nonimmigrant visa applications. Our Commercial and Agricultural Service sections assist U.S. businesses and promote U.S. products with the goal of increasing trade between our two countries.

Our law enforcement agencies work with their Canadian counterparts on border and law enforcement issues to keep both our countries safe and secure. We also maintain a large Customs and Border Protection presence at Pearson Airport to facilitate lawful travel to the United States.

Q2. As the head of the Unites States’ presence in the Province of Ontario outside of Canada’s capital city of Ottawa, what are some of your key areas of focus that you’ve established for your term?

My overall goal is to expand engagement with thought leaders and diverse communities in Ontario as my team and I work to advance the Roadmap priorities. Arriving in October 2020, the first part of my three-year assignment in Toronto was consumed by the COVID pandemic. While I wasn’t really able to travel much, I had the opportunity to meet with so many people virtually, from mayors to university students, from NGO leaders to academics, from journalists to entrepreneurs.

In 2022, as things really opened up, my focus has been to expand outreach in the Greater Toronto Area and to travel to other cities and towns. There is really no substitute for meeting with people in person and seeing their environs. Ontario has so much to offer and I can’t wait to see and do more!

Q3. Ontario and the United States share both close economic and cultural ties. Are there examples of each that stand out for you in particular?

Ontario and the United States share highly integrated economies. More than two thirds of all U.S.-Canada land border crossings pass through the province. Ontario alone is the United States’ third-largest trading partner. It is the largest trading partner for 19 states and the second-largest partner of nine other states. For example, in the automotive industry, individual parts might cross the U.S.-Canada border five to eight times before becoming part of a car.

We work closely with partners across Ontario on shared goals, such as advancing inclusive economic growth, and supporting diversity, equity, accessibility, and inclusion efforts across the full spectrum of society. We support our partners through a robust network of resources, which include a public diplomacy grants program, people-to-people exchanges, and cultural and educational outreach across Ontario.

One of the flagship programs we are proud to support is the Fulbright Canada exchange program, which allows U.S. and Canadian participants to study, teach, and conduct academic research in each other’s countries. At the consulate, we also support professional, youth, and private sector exchanges. Most of these participants are from Ontario or are Americans who conduct their exchanges here.

Q4. With respect to the significant trade and investment relationship between Ontario and the U.S., where are you seeing areas of particular momentum right now and/or opportunities for further growth?

Ontario is a large contributor to our bilateral investment relationship. Canada is the second-largest investor in the United States. Canadian companies have invested USD 570 Billion in the United States and employ over 870,000 Americans. Recently, U.S. Ambassador David Cohen led a delegation of 50 Canadians to the SelectUSA Investment Summit in Washington DC to explore new opportunities for Canadian companies to expand their operations into the United States. It’s one of the largest delegations we’ve sent in years, and I think it’s a great sign of the growth that Canadian investors are seeing south of the border.

Among the main areas of particular momentum and opportunities relate to our shared priorities in creating a resilient supply chain and addressing the climate crisis. For instance, opportunities stem from the shift in the automotive sector towards Electric Vehicles (EV), where Ontario already started production in light vehicles and commercial vans and is building battery manufacturing plants for EVs.

In addition, the civil nuclear sector’s adoption of Small Modular Reactors (SMR) creates opportunities, with the first SMR and Micro SMR in Darlington and Chalk River in development. Ontario Power Generation recently selected GE Hitachi Nuclear Energy as its partner for the Darlington New Nuclear Project, which will result in 1,700 highly skilled jobs and export opportunities for Canadians. Opportunities for further growth will come from innovators and small businesses on both sides of the border.


Q5. The Covid pandemic hit Ontario and the United States equally hard. As we jointly pursue a return to ‘life as usual’, are there examples of collaboration that occurred during the pandemic, and perhaps that continue still, that stand out as strong examples of cross-border collaboration?

Under the Roadmap for a Renewed U.S.-Canada Partnership, our two countries continue to make great progress in combating COVID-19, building back better, accelerating climate ambitions, advancing diversity and inclusion, bolstering security and defense, and building global alliances. In 2021, I welcomed the arrival of 1 million doses of COVID-19 vaccine in Toronto from the United States.

Through our Public Diplomacy grants program, we have partnered with several organizations that support women entrepreneurs and women business owners by expanding mentorship and strategic connection opportunities with their counterparts across the border to accelerate their growth.

The Great Lakes region is unique to Ontario and several U.S. states. I am pleased to share that we are supporting an initiative with the Council of the Great Lakes Region that expands academic research and partnership amongst institutions in the region.

It has been a pleasure to work with the Province of Ontario and other partners in Canada on our shared objective of strengthening cross-border relationships.

Q6. With the U.S. Consulate General being located in Toronto, would you give our readers some perspective on the scope of the American business presence in the Greater Toronto Area (GTA)?

Ontario remains the first choice for U.S. companies. The scope of American businesses in the GTA in production, distribution and services covers many sectors from energy, renewable energy, civil nuclear, construction, ITC, to mining, financial services, food and drugs, entertainment, and tourism. This is just an illustration of the wide coverage without being an exhaustive listing.

American tech giants are present in both Waterloo and Toronto. Large U.S. banks and consulting firms have their Canadian headquarters in Toronto and franchises of well-established retailers are spread across major locations of the GTA. The GTA continues to successfully attract foreign businesses, investors, and skilled talent. Due to easy access to America’s financial capital, the GTA will remain one of the primary business destinations for U.S. companies.

Q7. How large is the American diaspora in Ontario and where are there concentrations of American expats?

Conservative estimates of U.S. citizens within our consular district number 600,000 to 1 million. This does not include Americans living in Ottawa and its immediate area. We have found that Americans cross the border for a number of reasons, and for different lengths of time. Some come to Canada to study, some for an employment opportunity, others have pre-existing family ties in Canada, or married a Canadian and moved north. Just as these reasons are varied, we have found that Americans living in Ontario are diffuse, not concentrating in a neighborhood, and seamlessly integrating into Canada’s beautifully diverse society.

Q8. Would you mind sharing with us what exposure you had to Toronto and the Province of Ontario prior to your current post, and what has surprised you most about the region since you began living in Toronto?

My first trip outside of the United States was to Canada in the 1970s when I travelled to Niagara Falls and Toronto with my family. I returned many times over the years on vacation trips. I even spent a few days of my honeymoon in Sudbury, in late January—first time I ever went on a frozen lake!

I had the opportunity to serve at our Embassy in Ottawa about ten years ago, overseeing public diplomacy activities countrywide. It was a wonderful posting. I learned so much about our relationship, both politically, but perhaps even more importantly, at the personal level. There are so many connections between the people of our two countries!

I have been thrilled with my current assignment to Toronto. I had visited Toronto many times previously, particularly during my assignment to Ottawa, so I had a good sense of the city and all it has to offer. Living here has been wonderful. I appreciate the diversity, the festivals, the food. I’ve been impressed by the nature that surrounds us and the terrific ravines and other walking areas. Of course, Lake Ontario is so special and another link between our countries.

Q9. Thank you very much for your time, Consul General Crystal. As a last question, what do you enjoy the most about your work representing the United States as its Consul General in Toronto?

The best part of my work representing the United States in Toronto is the opportunity to pay it forward. I am grateful to those on both sides of the border who have cemented the close relationship that we share. I feel that it is my job to work every day to ensure that future generations share the same relationship. I try to do that by meeting as many people as I can. I listen to what Canadians share about themselves. I work to tell the American story as I look for opportunities to make more connections between our two countries.

For more information on the U.S. Consulate General in Toronto, please visit their website.

More Bloom than Gloom in the North American Economy

Author: Karthik Sankaran, Senior Market Strategist, Corpay Cross-Border

The last two years have thrown one curveball after another at North American business—Covid, supply chain disruption, rising US-China tensions, and the biggest war in Europe since 1945. These events have heightened uncertainty and raised the specter of a return to 1970s stagflation--or worse. But these fears are overblown. While there will be imbalances to work off, both the US and Canada are well-placed to emerge stronger from these trials.

For all the grumbling about America needing a new Paul Volcker, the world has changed too much to make a relentless upward spiral in wages and prices likely. Businesses do face labor shortages and wage increases, but they are mostly negotiating with individuals and not with organized labor. Unionization rates have fallen dramatically over the last 50 years, particularly in the US. According to data from the Congressional Research Service and the Bureau of Labor Statistics, roughly one in four workers in the US belonged to a union in 1970; that rate is now one in ten, and only one in sixteen in the private sector.

Meanwhile, a Federal Reserve caught unawares by the jump in prices earlier this year keeps insisting it will not rest until it pushes inflation back down. These assurances seem to be effective.

The University of Michigan’s Surveys of Consumers show that people believe prices will rise at an annual rate under 3 percent five years from now, hardly an indication that recent history has permanently scarred expectations and behavior.

But beyond intangible credibility, there is one vital difference between now and the heyday of disco and bell-bottoms—the massive increase in North American energy production. Both the 1970s and the early 2000s were marked by relentless selloffs in the dollar as the US import bill soared with rising oil prices. This vicious circle raised concerns about the currency’s viability as a store of international value, exacerbating inflation panic. But the shale revolution has restored the dollar’s cachet as a hard currency, just as the geopolitics of energy are becoming ever more tense. Markets understand that Canada is part of this story too, helping make the loonie more resilient than its peers in the face of a rampant dollar.

If there is little chance of the redux of 1970s malaise, are we headed for a deep recession? Despite two consecutive quarters of negative GDP recorded in the US, the underlying economy seems more robust with unemployment still near record lows. A slowdown – the intended outcome of Fed policy – is certainly likely, but it need not be particularly deep or prolonged. Outside some overhyped precincts of the technology sector, businesses are optimistic enough to talk up capital investment plans in their quarterly calls. While China’s embedded industrial and logistical capabilities make a complete decoupling unlikely, the US government is ramping up incentives for locating new plant in critical industries in North America.

Canada will be a major partner in these initiatives as an integral part of the US’s advanced technology and automotive ecosystems. A public-private push for climate, energy and security resilience will support growth for years on both sides of the 49th parallel.

If the outlook is relatively good for the US and Canada, what about economic contagion from more troubled parts of the world? The European economy has been hit hard by spiking energy prices and worries of a sudden halt in Russian gas exports. An unhealthy energy codependence may prevent a total shutoff for now, though that is not much of a consolation. Even so, Europe’s quest to diversify its energy supply will mean opportunities for producers just across the Atlantic. The silver lining of this crisis lies in fresh efforts in the creation of new fiscal instruments and monetary backstops to support members of the European Union, and the further retreat of calls for Euro exit to the fringes of politics. The last decade has seen EU members (since, and perhaps because of, Brexit) act repeatedly on Benjamin Franklin’s maxim--“We must all hang together, or…we shall all hang separately.”

China has different worries. Official missteps over Covid Zero policies rippled around the world, but authorities in Beijing are finally moving to increase vaccinations among the elderly. Beyond the pandemic, the country also needs a different growth strategy as the costs of debt-funded infrastructure and real estate investment outweigh the benefits. That means cracking elite resistance to broadening the safety net, and raising incomes and consumption. It remains to be seen if the political system can do that.

Nevertheless, China is very different from other developing countries. Its spectacular ascent in global manufacturing gives it a heft that comes from the size of its economy and the extent of its trading links. China’s oversize stock of domestic debt is largely denominated in its currency, and its controls on capital flows make it less likely to succumb to “classic” emerging markets shocks.

Thus the major components of the global economy outside North America have their problems, but in the realm of “muddle-through” rather than catastrophe. By comparison, the US and Canada are growing and more self-sufficient. Will this lead to large capital inflows and excessive dollar and loonie appreciation? Perhaps not. The dollar surge thus far has been driven by strong growth, a Fed racing to catch-up to inflationary pressures, and the limited effects of the energy price shock on the US trade balance. But most of the impetus from those factors could be behind us. The dollar may catch a second wind, but the headlong pace of its appreciation in early 2022 is unlikely to be repeated.

This does not mean all will be all smooth sailing in the US and Canada. Even if we don’t see a return to the 1970s, we don’t know how sharp a slowdown is needed to bring inflation back down to 2 percent. And the easy money of the Covid era has fueled asset price runs that need to be undone. Some of this has already happened relatively painlessly, as the excesses of meme-stock mania are being unwound. Housing markets, particularly in Canada, are another matter, but the short length of the steep ramp in housing prices since Covid began suggests a lower likelihood of broader systemic issues when the air escapes that bubble.

So, for all the ructions in the markets and in commentary about them, there is hope that the coming years will allow us to cast a jaded eye on the asset market cycles of boom, doom, gloom and just watch the real economy bloom.

For more information on Corpay's global payment solutions, please visit their website.

Canadian Companies Love Creating in the LA Region, Now Global LA is Here to Welcome Them

Author: Debbie Adler, CEO, Global LA

I grew up in the suburbs of Washington DC in the 1990s. It was an idyllic upbringing in a sheltered, middle-class neighborhood just 15 minutes from downtown DC. In high school, I participated in any kind of activity that would have me. Somehow, that ended up including the high school choir, which was an essential validation of any meager talent I had since my older brother was an accomplished singer. The best part of being in the choir is that we got to go on an exchange trip to another city - and that year we went to Toronto.

It was my first trip out of the country so I had to get a passport. I had no idea what to expect or picture, but the reality turned out to far exceed my imagination. Toronto felt safe, peaceful, clean (so much cleaner than Georgetown), and lush. I don’t remember anything about the actual choir experience. My most vivid memory is still seared in my brain. We stayed with host families and mine had two sons. The elder brother made me a mix-tape and it changed me. I knew of Barenaked Ladies by this point, but I didn’t know other songs on the album that made them an international hit. More importantly, he introduced me to The Tragically Hip and Crash Test Dummies, among so many other incredible songs and bands. My life completely opened up from that point – I learned that music is the gateway to learning about new places and people. And I wore that tape down to shreds.

Fast forward many years – I’m now a long-time Angeleno (despite my east coast roots, I never quite felt like I fit in there). Music was also my gateway to landing here – my first job in LA was at the radio station KCRW where I got to cross paths with incredible Canadian musicians. Today, my role is much bigger and the perspective much wider.

Global LA launched a few months ago as the first organization dedicated to promoting Los Angeles as a destination for innovative, game-changing businesses across key industries - entertainment, of course, as well as fashion and beauty, sustainability, logistics and transportation, life sciences, aerospace, and more. As the first CEO to expand our international relationships, the connections to Canada are close to my heart.

Canada is our fourth-largest source of Foreign Direct Investment and Foreign Owned Enterprises. Organizations including the Canadian Trade Commissioner Service, LAEDC’s Canada-SoCal desk, the Québec Government Office in Los Angeles, MAPLE Business Council, and the Canadian Consulate General – Los Angeles, are fantastic resources that enable the investment and collaboration between our two regions. But it also helps to know that you’ve got a wide network of businesses already entrenched in the LA ecosystem.

Canadian companies leading the way in Greater LA include Gildan Activewear, Manulife Financial, Lionsgate Entertainment, Royal Bank of Canada, and Thomson Company, with noted Southern California brands American Apparel, John Hancock Life Insurance, Starz, City National Bank, Brookfield, and Thomson Reuters are among the standouts.

In the creative fields - gaming, entertainment, and tech - the links between the LA Region and Canada are deep. Companies like Lionsgate, one of the leading global entertainment companies, have their roots in Canada. The company produces, finances, and distributes motion pictures, television programming, and digital content for markets around the world. In 2016, it was the only Canadian company to make it onto Variety’s list of the world’s 50 most valuable entertainment brands, coming in at #32 with a brand value of $5.73 billion.

Canadian tech companies with a presence in LA include Hootsuite, Shopify, and Wattpad. Hootsuite, a social media management platform, was founded in Vancouver in 2008 and now has over 16 million users in 175 countries. The company has a strong presence in LA, with an office in downtown LA that opened in 2013. Shopify also has an office in LA, which opened in 2013. Wattpad, a social media platform for stories, was founded in Toronto in 2006 and now has over 65 million users and an office in LA, which opened in 2012.

Gaming is a critical sector in both SoCal and Canada with Canadian gaming companies such as Ubisoft, headquartered in Montreal, with a large presence in LA. The company has an office in El Segundo, which opened in 1996.

Beyond entertainment, the LA region and Canada share many values, including a commitment to environmental protection, innovation, and social progress. These shared values make LA an ideal location for Canadian businesses looking to expand their operations. You will find clients, partners, and employees that share your values and are driven to ensure you succeed.

A leader in environmental protection, Los Angeles has a stated commitment to reducing greenhouse gas emissions and promoting sustainable development. L.A.’s Green New Deal will guide our city’s transition to an equitable and abundant economy powered by 100% renewable energy, supporting the creation of thousands of green jobs in all of our communities. LA is working towards this goal through a variety of initiatives, including electric vehicle infrastructure development and promoting the use of renewable energy.

The LA region is also a global center for innovation, with a thriving startup ecosystem and a commitment to supporting new and innovative businesses. For technology and sustainability companies and other startups, we have a number of hubs including the Los Angeles Cleantech Incubator, LA Biostart, Idealab, PortTech Los Angeles, Hub 101, and 27 other incubators. The region also has 73 co-working spaces, 33 accelerators, and 91 VC firms.

As I know from personal experience, exploring the world as a student creates indelible impressions that can expand one's horizons. Canadian students are an important pipeline of talent into our Universities, including the University of Southern California, University of California Los Angeles, Cal Tech, and Pepperdine University. These schools and over 100 others offer a variety of programs that attract students from north of the border, including business, engineering, and media production.

The LA metro area is one of the most diverse regions in the world, with over 200 different ethnicities and languages represented. This diversity is a major strength of the LA economy, as it provides a large and growing workforce and consumer base for businesses of all types. The population is also relatively young and highly educated, making for a skilled and productive workforce, allowing businesses to scale.

Los Angeles hosts the second largest community of Canadian ex-pats in the US, with over 40,000 Canadians living in the metro area. This large community of Canadians provides a great support network for businesses looking to locate in LA.

Whether you are coming here for an education, to scale your start-up, grow your corporation’s footprint, or perform at The Hotel Cafe, LA is a long-time friend and collaborator for so many incredible Canadians.

I never got to see The Tragically Hip play live but I love this quote from Gord Downie: "Music brings people together. So my function in anything I do is to help bring people closer in." I’d like to think I’m also driven to bring people closer in. Every business needs solid relationships and increasing networks of people to help you grow and scale. Global LA can help make that possible in Los Angeles. And then we can go to a show together to see some great music.

Debbie Adler is Global LA’s first President and CEO. She is responsible for leadership, strategy, and membership of GLOBAL LA, working closely with the board and its partners. Previously, Debbie worked for the British government as the North America Sector Director for the Creative, Media, and Sports Economy team with the UK’s Department for International Trade (DIT).

We wish to thank the Consulate General of Canada Los Angeles, the LAEDC, and the MAPLE Business Council for their June 2019 report: Canada & Southern California: United though collaboration, defined by partnership, sustained by friendship that was indispensable in the creation of this column. Please see the full report at https://static1.squarespace.com/static/54c85166e4b03a5492fe6e90/t/5d1b90a47a34da0001b0fc28/1562087607907/LAEDC+Canada+Socal+Report+0701D.pdf

Our New Business Environment Should Accelerate Canada-U.S. Trade

Author: Pierre Cleroux, Chief Economist, Business Development Bank of Canada (BDC)

The COVID pandemic has transformed the global economy and one of the major consequences will likely be a strengthening of the already robust trading relationship between Canada and the United States.

The pandemic has changed the way we work, disrupted global supply chains and accelerated technology adoption, among other effects. The war in Ukraine has given added impetus to many of the changes and injected geopolitical uncertainty into the economy.

The changes mean businesses have to face a new set of challenges on top of the ones that pre-dated the pandemic. These include an aging population that’s led to labour shortages in Canada, the U.S. and elsewhere in the developed world.

Stronger North American trade will help companies trying to navigate the post-pandemic economic landscape and bolster economies on both sides of the Canada-U.S. border.

Supply chain disruptions
One of the biggest impacts of the pandemic has been the disruption of global supply chains. According to a recent BDC survey, 85% of Canadian businesses report experiencing longer delivery times, difficulties in obtaining products and higher transportation costs.

Just-in-time inventory management gained popularity throughout North America thanks to the huge cost and efficiency gains it delivered to companies. However, a reliance on foreign suppliers working on tight delivery schedules left companies, and the economy as a whole, vulnerable when demand exploded as the pandemic progressed.

High demand, combined with the pandemic-related difficulties, produced major supply chain disruptions that continue to this day. Most recently, China responded aggressively to a rise in COVID cases by imposing harsh lockdowns in Shanghai and other cities in the spring of 2022. This exacerbated an already difficult supply situation for many North American companies that source in China.

Russia’s invasion of Ukraine also worsened disruptions in many sectors. Ukraine is a large producer of equipment and parts and the war has created chaos in some supply chains, notably in the automotive industry.

More disruptions ahead?
These developments may appear to be exceptional but are they really?

COVID was the first global pandemic in a century, but many experts believe this type of event will occur more frequently in the future, given the pace at which new viruses are appearing and spreading around the world due to globalization.

Similarly, the war in Ukraine was unexpected, but geopolitical tensions affecting global trade patterns are nothing new. Also, climate change is creating more extreme weather events that have the potential to further disrupt global supply chains.

All of these developments favour the reinforcement of trade within North America. Canada and the United States have among the most stable economies in the world. And while the countries are not immune from trade tensions or extreme events, the strong commercial relationship built between the two over the decades is simply extraordinary.

For these reasons, it appears many businesses will seek to bring production back to North America to avoid, or at least hedge, the risks of using overseas suppliers.

Aging labour force
Another factor that favours North American trade is the aging population and the labour shortages it’s causing.

In the U.S., 17% of the population is over 65 compared to only 12% in 2000. This percentage will rise to 21% by 2030. In Canada, the population is aging even faster. Today, 20% of the population is over 65 and this percentage will hit 25% in 2030.

As the population ages, baby boomers are retiring, causing labour shortages and the situation will not go away. There are no easy solutions for businesses grappling with labour shortages. Immigration will help but will not be enough to compensate for all the baby boomers retiring.

Our research indicates that investing in technology and automation is the best strategy for businesses that are facing this problem.

Those investments will push down labour costs and increase efficiency, making North America production more affordable—an additional driver of trade between Canada and the U.S.

Canadian businesses need to scale-up
While businesses on both sides of the border stand to benefit from a heavier reliance on North American supply chains, it will be critical for Canadian companies to scale up and become more productive if they hope to compete in this new environment.

Canadian businesses are smaller than those in most developed economies and especially the United States. In Canada, 80% of businesses have fewer than 10 employees compared to 74% in the U.S. Canadian companies also badly lag their U.S. counterparts when it comes to the productivity of their operations.

Businesses reap many benefits from growth, including the ability to maximize their use of technology and enter new markets. However, to achieve scale, Canadian companies need to become more productive and export more.

We need more trade
Canada and the U.S. have a long and successful history of trade built on geographic proximity, familiar cultures and successive free trade agreements since 1989. The result is one of the largest two-way trading relationships in the world. And the future looks even brighter.

Locating production in North America is now more appealing than ever as a way to secure supply chains, reduce delays and cut transportation costs. In the new business environment, North America’s stability and the free flow of goods and services between Canada and the U.S. are important assets that should be protected and encouraged.

Tips for expanding into the U.S. market
The U.S. market is among the most vibrant and prosperous in the world and naturally draws the interest of Canadian companies that are seeking growth opportunities. However, many Canadian businesses have discovered just how challenging it can be to expand into the U.S. with its different business culture and highly competitive economy.

BDC’s Advisory Services experts have guided Canadian entrepreneurs for many years on how to successfully expand into the U.S. market, both through exporting and physical expansion. Here are some tips for making it in the United States.

1. Assess your company’s readiness for U.S. expansion
Expanding to the U.S. is a big project that requires careful planning and dedicated resources. It’s critical to closely look at your organization’s current capacities in terms of people, finances and operations to identify and address gaps.

Addressing weaknesses before embarking on a U.S. expansion will help you avoid costly mistakes and becoming overwhelmed. As you examine your company, ask these questions:

• Do we have the scale to meet export demand or open operations in the U.S.?

• Are the owners and senior managers on board? Do we have an executive who can lead the initiative and enough employees to take on the added work?

• Do we have the financial resources to take on a multi-year expansion project, knowing it may be more expensive than forecast?

• What technology systems do we need?

2. Develop a market entry strategy
The U.S. is not one huge market but a collection of distinct local markets, each with its own characteristics, regulations, logistics challenges and consumer tastes. Export Development Canada (EDC), for example, breaks the country down into 11 regions.

This means it usually makes sense for Canadian companies to start with one state or region and build from there. You can first identify two or three high-potential states or regions and then narrow down your selection by conducting market research and attending trade shows or business events to learn more and make contacts.

A typical market entry plan will take six to 18 months to come to fruition. As part of your plan, you should set clear, measurable and achievable objectives for your expansion initiative that include detailed financial projections and budgets. The Government of Canada’s Trade Commissioner Service and EDC as well as U.S. federal, state and local agencies offer a wealth of information and resources to Canadian companies looking to expand south of the border.

3. Get your products to market
Logistics and distribution in the U.S. can be trickier than you expect and have the potential to make or break your expansion project.

Options for reaching customers include using a distributor or agent, opening physical locations or selling through online marketplaces or an e-commerce site. You may decide to combine some of these in a multi-channel blend of direct and indirect approaches.

It’s important to find local partners who can help you understand the market you’re targeting and make recommendations of other resources you can tap. Make sure to do your homework in choosing partners and intermediaries, including by getting references.

There are numerous rules and regulations to follow in exporting to the U.S. or setting up operations there. Here again, trade development agencies can point you in the right direction to ensure you covered all the bases before you start selling to customers.

The bottom line is that prospects look good for a significant acceleration in North American trade in the coming years due to the important changes in the economy.

Entrepreneurs should be looking to see how their company can take advantage of this opportunity and make the necessary investments to make it happen.

For more information on the Business Development Bank of Canada, please visit www.bdc.ca.

LEVERAGING SUPPLIER DIVERSITY FOR ENHANCED DEI

Author: Stephany Lapierre, founder and CEO of TealBook

Over the last several years, businesses of all sizes have made diversity, equity, and inclusion a bigger priority—and with good reason. DEI initiatives allow companies to create a space in which underrepresented or marginalized people have fair access to resources and opportunities and feel welcomed and accepted within that space. Let's consider the internal and external benefits that are motivating so many companies to make progress.

Internally, teams are developing employee resource programs and building relationships with DEI-focused institutions. There is a greater focus on growing a more diverse workforce to leverage the innovation and unique experiences those with varying backgrounds can bring to the table. Organizations across the globe are working to address racial and socioeconomic inequities experienced by underrepresented groups.

While these internal efforts to build a more diverse and inclusive workforce are excellent steps to take, these same organizations are also realizing that there are large impacts to be made from a procurement perspective. By evaluating their supply chains and finding opportunities to onboard more diverse and small suppliers, they can enable enhanced DEI throughout their business processes, with the impact growing over time.

"Supplier diversity is about more than just numbers and meeting board requirements. Increasing diverse supplier spend can also have monumental effects on local communities."

Supplier diversity is about more than just numbers and meeting board requirements. Increasing diverse supplier spend can also have monumental effects on local communities.

The impact of supplier diversity

When developing a supplier diversity program, the initial concern might be how much of a financial impact working with these suppliers can have on the organization's bottom line. After all, for decades, the biggest priority of most procurement teams was to achieve the highest cost savings possible without sacrificing the quality of the company’s service or product.

Now, this is not to say that supplier diversity can’t help improve an organization’s financial health. Research done by McKinsey has shown that diverse teams tend to outperform the less diverse by 36%. Furthermore, diverse suppliers—such as those owned by women or minorities—often carry unique life experiences and have overcome different challenges that can allow them to approach goals or processes in a unique way, driving team efficiency and creative problem-solving.

Having a diverse supply base also allows procurement teams to build contingency plans and reduce the risk of disruptions to their supply chains, expand into new markets, and create competition—all of which can help drive cost savings.

Beyond the financial impact supplier diversity can have within an organization’s procurement processes, working with more small and diverse businesses creates opportunities for underrepresented and underserved communities to gain more equitable access when they previously had difficulty doing so.

Understanding the struggle of minority-owned businesses

Minority-owned business owners often face numerous barriers when it comes to getting a strong foothold in the business space.

The COVID-19 Pandemic
For starters, even before the start of the COVID-19 pandemic, minority-owned businesses were considered the most financially at-risk of all small businesses in America. When the pandemic hit, many of these businesses were hit hard, especially industries with the highest share of minority owners, such as retail and food services. In Canada, Indigenous business owners were also heavily impacted by pandemic-induced casino closure – an industry providing a major stream of revenue for First Nation communities.

Social Factors

Systemic racism faced by Black, Indigenous, and other minority business owners can sometimes prevent owners from earning capital as they begin their business endeavors as well as prevent them from expanding into international markets.

"Research has shown that minority business owners are more likely to be denied business credit and left using personal finances to fund their ventures than the non-diverse. Women business owners are often more educated than their male counterparts but have smaller annual revenues."

Research has shown that minority business owners are more likely to be denied business credit and left using personal finances to fund their ventures than the non-diverse. Women business owners are often more educated than their male counterparts but have smaller annual revenues.

Certification Issues

Lastly, there is also the issue of diverse certification to consider. Earning an official third-party certification is often not a simple task for a small business. These certification processes require a lot of time, money, and effort to apply for and small businesses may not have the resources needed to dedicate to fulfilling these requirements. Plus, while certification can help improve a supplier’s chances of earning more business, it is not a guarantee—making the incentive to go through the entire process a bit weaker.

However, when sourcing diverse suppliers, enterprise organizations typically look only for those businesses that have earned that certification. This excludes suppliers who technically qualify for a specific certification from sourcing events that lead to potential revenue.

When we look at all the struggles small and diverse suppliers face, it’s vital to determine what we can do to ensure that these communities are welcomed and included in procurement processes and supply chains.

"When it comes down to it, supplier diversity has the power to create impactful change within the community surrounding your business. By taking steps toward improving supplier diversity within procurement processes, your organization can grant access to suppliers who previously were unable to get their foot in the door, much less a seat at the table."

How does supplier diversity affect DEI?

When it comes down to it, supplier diversity has the power to create impactful change within the community surrounding your business. By taking steps toward improving supplier diversity within procurement processes, your organization can grant access to suppliers who previously were unable to get their foot in the door, much less a seat at the table.

Support Surrounding Communities

When procurement teams are sourcing materials and services, there is a tendency to source from larger, more well-known companies with a history of delivering a good product. While this process has worked well in the past, imagine if you could get the same product, or better, from a small or diverse business and make a bigger impact on that business owner’s bottom line.

When large firms make a sale, it can often be a drop in the bucket. When a small business does, that sale can make a huge difference in its profits and business functions moving forward. What may seem like another purchase on the buyer side could be a life-changing sale on the supplier side. This could enable that small or diverse business owner to produce more products or services, increase staff, or expand their business to larger or additional locations.

Consider the difference you can have on a small bakery if they began supplying your office breakfasts or a small trucking business if you hired them to make deliveries in your region.

Expand Sourcing Pools

Think about where your procurement team often goes to source goods and materials. If your team is like most, you start with people and companies you know. This isn’t just the case in procurement; in most aspects of life, we tend to look to those in our own circles for advice, help, or services.

"If your sourcing pools are lacking in areas of diversity, how are you supposed to find new diverse businesses to include in sourcing events? Expanding your supplier discovery with technology or through connections with industry professionals is a great start to developing a more diverse supplier base."

If your sourcing pools are lacking in areas of diversity, how are you supposed to find new diverse businesses to include in sourcing events? Expanding your supplier discovery with technology or through connections with industry professionals is a great start to developing a more diverse supplier base.

Not only does this help increase diverse spend on the buyer side, but it gives more diverse suppliers the opportunity to gain new business as they are included in more sourcing events.

Solve the certification issue

With small and diverse businesses not always having the capacity, time, and money to pursue third-party certification, there is an opportunity for enterprise organizations to step in and help solve this problem, creating a more inclusive and equitable space for these suppliers. But how are you, on the buyer side, supposed to address this? Consider potential suppliers who do not yet have certifications.

Take time to research your suppliers and dig into their business functions. Perhaps you see their board is made up of a majority of women, but they don’t have a WBE certification. Maybe their company size makes them small enough to be an SBE, but they aren’t showing a certification for that.

By considering those without third-party certification, you can open your sourcing events to additional suppliers that can meet your organization’s goals, and also create greater opportunities for diverse businesses.

Now, here’s the hot question: how are you supposed to find these suppliers without spending even more time and effort than you already do? Simply put: you rely on better data.

TealBook enables better DEI through supplier diversity features

One of the most difficult challenges procurement teams face when trying to increase diverse spend—therefore creating a more inclusive and equitable business environment for small and diverse suppliers—is finding those suppliers in the first place. Traditional forms of data management leave procurement teams with stale data that doesn’t account for changes in business details or serve their goals.

TealBook uses machine learning and AI to consistently harvest, analyze, and refresh supplier data to provide organizations with the information they need to make strategic procurement decisions. Our Supplier Intelligence Application also hosts a number of capabilities that allow firms to easily and granularly source diverse suppliers, track diverse spend, and enable increased supplier diversity at multiple levels of their supply chains.

Our latest products offerings, in particular, allow firms to drive DEI initiatives and include:

• A new Save & Compare feature to store and analyze diversity reports.

• Simplified outreach to suppliers to self-certify and renew contracts.

• An Economic Impact Assessment to track how your diversity efforts are impacting local economies.

By giving procurement professionals the data and tools they need to enable effective supplier diversity strategies, we can achieve a more equitable and inclusive sourcing process that increases overall supplier diversity.

TealBook enables diversity, equity, and inclusion efforts on a local and global scale by providing our customers with dynamic supplier data. Contact our team to discuss how we can help you achieve your goals to unleash procurement possibilities.

OUR INTERVIEW WITH MARTINE HEBERT - DELEGATE GENERAL OF QUEBEC AT THE QUEBEC GOVERNMENT OFFICE IN NEW YORK

We are delighted to connect with Delegate General Martine Hébert to discuss the work of the Québec Government Office in New York and the importance of New York’s economic ties with Québec. The Québec Government Office in New York joined MAPLE Business Council’s New York Chapter in 2021.

Q1: Madame Hébert, thank you for taking the time to share a window on the Québec Government Office in New York and also for being a valued member of MAPLE New York. To start, would you please share an overview of the scope of work and services that your office undertakes?

A: Thank you, Stephen. Quebec is delighted to be part of the MAPLE community.

Let me start with some background on the Quebec Government Office in New York, which I’ve had the honor to lead since last August.

Opened in 1940 at New York’s Rockefeller Center – where we were among the first tenants - it is the province’s oldest representative office abroad. Eighty-two years ago, Quebecers could see the many benefits of building closer ties with their American neighbors.

"It is also interesting to note that our financial ties to the city go back a long way: in 1879, the province became the first foreign issuer of bonds on Wall Street."

It is also interesting to note that our financial ties to the city go back a long way:  in 1879, the province became the first foreign issuer of bonds on Wall Street.  

Today, we are part of a network of 34 offices in 19 countries - nine in the U.S, by far our biggest trading partner.  The New York team is responsible for promoting Quebec’s interests in the eight states comprising the Mid-Atlantic region.

Our number one mandate is to promote trade and investment. Dedicated business development advisers, representing key sectors - transportation, construction, IT, retail tech, fintech, energy, aerospace, life sciences, fashion, food and beverages - help create prosperity on both sides of the border. We also offer advice and guidance on Québec’s business climate and investment opportunities.  

And at the core of our diplomatic mission is working with government and civil society to promote cooperation and protect and advance our shared interests, whether securing cross-border supply chains, growing and greening our respective economies, or boosting our competitiveness. 

Q2:  Québec is known and appreciated globally in part thanks to the work of cultural ambassadors such as Cirque du Soleil and others.  How important is cultural diplomacy in your work? 

Promoting Québec’s identity and culture is an important part of our mission.  

Artists and creators are our best ambassadors, and our government has always strongly supported their efforts to develop international markets.  Their success goes a long way toward building strong ties and generating goodwill.  

"Culture is at the heart of nation building, embodying our values and communicating to the world who we are. It is what binds us as human beings."

Culture is at the heart of nation building, embodying our values and communicating to the world who we are.  It is what binds us as human beings.  

Our artists and creators shine in New York. To name a few:  Yannick Nézet-Séguin is the third music director in the history of the Metropolitan Opera; Maestro Bernard Labadie and the Orchestra of St. Luke’s are performing this month at the celebrated Bach Festival at Carnegie Hall; Felix Marzell’s public art Big Apple continues to entertain New Yorkers in Hudson Yards; and Cirque Kalabanté will delight its audience at the BRIC Celebrate Brooklyn! Festival on June 25.  The list is long and we are extremely proud of them! 

Q3: As the head of Québec’s presence in the Mid-Atlantic, what are some of the key areas of focus you have established for Québec’s interests in the region, and, with New York state?

A: : Quebec’s leadership on clean energy positions us exceptionally well to become the number one North American partner in decarbonization.  The province is deeply committed to climate actions. And, as you might know, Québec’s utility, Hydro-Québec, is North America’s largest producer of renewable energy, and has been providing electricity to the U.S. for over 100 years. 

"Québec has the lowest greenhouse gas emission per capita in North America. Our electricity is 99.6% sourced from clean hydropower, and we are very pleased with the recent approval of the Champlain Hudson Power Express project that will deliver clean and renewable electricity to New York City. A clear step forward toward regional decarbonization, it shows how Québec can concretely contribute to New York’s ambitious climate goals."

Québec has the lowest greenhouse gas emission per capita in North America. Our electricity is 99.6% sourced from clean hydropower, and we are very pleased with the recent approval of the Champlain Hudson Power Express project that will deliver clean and renewable electricity to New York City. A clear step forward toward regional decarbonization, it shows how Québec can concretely contribute to New York’s ambitious climate goals.

There are many other examples of cross-border trade in the context of integrated supply chains. Earlier this month, the New York State Research and Development Authority selected Québec’s Boralex to carry out five solar energy projects across upstate New York. Another Québec-based company, Marmen, will develop the first offshore wind turbine tower manufacturing facility in North America to advance its partner Equinor's projects off Long Island. And FLO has deployed the first 100 curbside EV charging stations in New York City, in partnership with Con Edison and the New York City Department of Transportation. FLO is a leader in EV charging infrastructure, with one of the largest networks in North America.

Q4: Quebec is home to some of the metals that are crucial for the electrification of transport, such as lithium and nickel. With the pandemic and recent geopolitical events underscoring supply chain vulnerabilities, can Quebec play a role in building a North American battery and electric vehicle supply chain?

A: Québec’s plan for the development of critical and strategic minerals – and its strong push in building a North American battery and electric vehicle supply chain – is part of the province’s integrated approach to electrify the economy and fight climate change.

These minerals play an essential part in our daily lives and, as you mentioned, in the light of recent geopolitical events, securing a North American supply chain and reducing our dependence on other countries is becoming more crucial.

With a strong focus on the inclusion and socio-economic development of local and Indigenous communities, the plan also places environment, social acceptability, and wealth creation at its heart.

Just recently, General Motors, POSCO and BASF announced major investment in Québec to produce and recycle battery materials, recognizing that the province is a world-class hub in the booming EV battery ecosystem, from the mining stage to the production and recycling.

"Some of the reasons mentioned by these business leaders for choosing Québec are the province’s high environmental standards, low-cost clean electricity, integrated logistic chains, and trained workforce."

Some of the reasons mentioned by these business leaders for choosing Québec are the province’s high environmental standards, low-cost clean electricity, integrated logistic chains, and trained workforce.

Since our government is fully committed to investing massively to support this ecosystem of the future, we expect that these partnerships will continue to grow.

Q5: Beyond energy, which sectors do you think offer the greatest opportunities for further economic collaboration in the Mid-Atlantic?

Many of our industries are poised for growth and offer tremendous opportunities.

For instance, buildings in New York City account for about 70% of its greenhouse gases and Mayor Eric Adams recently launched ‘Building Action NYC,’ a citywide campaign to promote steps to make them greener. Our engineering and construction companies have developed innovative solutions such as retrofitting, AI-managed HVAC systems and mass timber buildings that can help building owners lower their emissions and reach their sustainability goals.

Our agri-food industry is also important. Nearly two-thirds of our exports go south of the border, which is good news because it means that you can find many of our excellent and safe products in New York grocery stores. And, hopefully, more of them will be available very soon since many of our best food and beverage companies are taking part in the New York Summer Fancy Food Show this month.

The fashion industry has also been very dynamic recently despite the severe fallout from the COVID-19 pandemic. We were excited to see Québec brands like Kanuk, Moose Knuckles, Pajar and Maguire Shoes open flagship stores in Manhattan.

We also work with numerous retail tech firms from Québec that can help U.S. retailers transform their clients’ shopping experience and make their operations move faster.

Another rapidly growing sector is life sciences. With a growing critical mass of innovative companies representing 56,000 jobs, Québec is a major hub.

Québec also boasts a strong aerospace sector. Home to more than 200 aerospace companies, including industry leaders like Bombardier, Bell Helicopter, CAE, and Pratt & Whitney Canada, the province is responsible for 53% of Canadian aerospace production with more than $15 billion in sales and 36,000 skilled workers.

"That being said, I hope that by working together, sharing best practices, and building on each other’s strengths, we will continue to foster more cross-border opportunities to grow our economies. Our regions have the tools, knowledge, and expertise to become one of the most prosperous and sustainable areas in North America and in the world."

That being said, I hope that by working together, sharing best practices, and building on each other’s strengths, we will continue to foster more cross-border opportunities to grow our economies. Our regions have the tools, knowledge, and expertise to become one of the most prosperous and sustainable areas in North America and in the world.

Merci encore, Madame Hébert. Je voudrais profiter de cette occasion pour vous souhaiter une très bonne Fête Nationale!

June 24 is Quebec’s Fête Nationale, Quebec’s National Day.

For more information, please follow the New York team on LinkedIn, Twitter, Instagram and Facebook.

Launching Our New Cross-Border Insights Website

When Robert Kelle and I founded MAPLE Business Council in 2015, our vision was to bring together executives and stakeholders from across sectors to connect and learn from one another in support of greater bilateral trade, investment and innovation between Canada and the United States.  In the spirit of community, we have created platforms for members and partners to share their expertise, tell their story, and add to our understanding of key sectors and markets. It’s an opportunity to celebrate ideas, missions, and passions. And the breadth and depth of the work of our membership, which now spans 24 sectors in 24 markets, has been exciting for us to showcase. 

It all starts with networking and our initial means of connecting people and ideas was through events each quarter spanning San Diego, Orange County and Los Angeles. Within a couple of  years, we launched MOMENTUM, our monthly e-publication, with articles from two members and partners. This issue is #64.  
 
We captured our early events on video to archive and share the content being presented but videos of PowerPoint presentations weren’t the answer. So, we later introduced Conversations, our video series focused on members discussing their markets and missions, often but not always, cross-border in focus. The 2-minute videos are crisp and  easy to consume primarily through our social media channels and website. To date, we’ve produced 55 episodes with more in the creative pipeline soon to be released. Past episodes have included a special compilation edit with contributions from Canada’s Consul Generals in Los Angeles and New York, and perspectives on Diversity, Equity, and Inclusion. 
 
The most recent articles from MOMENTUM and past episodes of Conversations continue to be archived on our website for ongoing reference. 
 
Shining a Light on Our Members’ Expertise
This week we are excited to launch a new way to access the wonderful content our members have been sharing with us. We have created a sister website to maplecouncil.orgfocused exclusively on member articles and videos. Our new site, MAPLE Insights, provides an easier way to mine our content library to access content on a variety of topics. Content is organized by area of focus including:

• Interviews

• Organization

• Tech

• Finance

• Markets

• Sectors

For each section we’ve organized past videos and articles shared by our members since 2019. Each month, we will add new content from our most recent Conversations episodes and MOMENTUM issues. 
 
We are launching the site with over 100 pieces of content – all shared by members and partners. It will continue to be a living library of cross-border business content available for reference. The scope of materials reflects just a sliver of the breadth of expertise that our members and partners bring to MAPLE. 
 
So as much as this content can inform readers, the site is also a celebration of our membership on the cusp of our 7th anniversary since we founded MAPLE Business Council and the value that their experience and expertise bring to our community. We’re just presenting it in a new way to help connect it to readers.   
 
So we encourage you to check out our new content website at www.maplecouncilinsights.org for yourself and we hope in the future to include your insights too. 

DOING DEALS IN CANADA POST-PANDEMIC - RECENT COURT DECISIONS GIVE IMPORTANT GUIDANCE ON MACs AND ORDINARY COURSE COVENANTS

Authors: Gesta Abols, Co-Leader U.S. Practice and Brad Moore, Partner, Fasken.

The COVID-19 pandemic threw a wrench into a large number of mergers entered into in late 2019 and early 2020. Not surprisingly, some buyers wanted to walk away or renegotiated their deals. Out of those challenges, two important court decisions emerged in Canada that, for the first time, addressed the meaning of a “Material Adverse Change” and what the typical covenant by the target to act in the “ordinary course of business” really means. The courts also addressed whether a target can recover the lost premium the shareholders would have received if a transaction closed.

Material adverse change and material adverse effect clauses (collectively referred to as a “MAC”) and ordinary course of business covenants are found in a wide variety of agreements, most often in the M&A context.

Where the target has suffered a MAC before closing, the buyer can typically walk away from the transaction without penalty or legal exposure. Ordinary course of business covenants are similarly intended to protect a buyer from a major transformation in the seller’sbusiness between signing and closing. These covenants require a seller to continue to conduct its business “in the ordinary course”.

Before the decisions in Fairstone Financial Holdings Inc. v Duo Bank of Canada and Cineplex Inc. v Cineworld Group plc, there was virtually no case law in Canada on what constituted a MAC. Practitioners turned to the United States for guidance, and the Delaware Courts in particular, but it wasn’t clear if those cases would be adopted by courts in Canada.

Fairstone Financial Holdings Inc. v Duo Bank of Canada is Canada’s first MAC decision. Regarding what constitutes a MAC, the court adopted the Delaware definition of a MAC and its three key elements: (1) the occurrence of an unknown event (2) a material threat to overall earnings potential of the target and (3) durational significance.

At “first blush”, the court found there was a MAC as a result of the pandemic. However, the MAC clause in the Agreement contained typical carveouts excluding material effects caused by emergencies (geographical or circumstantial), changes in the market or industry, and missed financial projections, forecasts or estimates. The court concluded that each of these carve-outs were present, the related risks were assumed by the purchaser, and Fairstone was not reasonably expected to be disproportionately affected by the pandemic relative to others in its industry. Therefore, there was no MAC as defined in the Agreement.

The Agreement also contained a covenant that required Fairstone to act in a manner consistent with its past practices between signing and closing. The court rejected Duo’s claim that Fairstone breached this covenant, finding the steps Fairstone put in place after the pandemic was declared were consistent with steps it had put in place during past recessions or that would be expected of similarly situated businesses. This interpretation was seemingly motivated by a reluctance to provide Duo the right to walk away given that it found that Duo assumed the risks associated with COVID-19 in its analysis of the MAC definition.

The decision in Cineplex v Cineworld followed shortly thereafter. In December 2019, Cineworld Group plc (“Cineworld”) entered into an agreement with Cineplex to acquire all its issued and outstanding shares for $2.8 billion.

The Court relied on the definition of a MAC as set out in Fairstone and the Delaware decision in Akorn v Fresenius Kabi, and excluded effects caused by “outbreaks of illness” from the definition. The Court also noted that the ordinary course covenant must be read in the context of systemic risks assumed by the buyer. Interim covenants – such as the ordinary course covenant – address the manner in which the seller is to operate its business during the period between signing and closing. What is in the ordinary course of business is a flexible and contextual concept.

Cineplex sought to recover the value of the consideration that would have been payable to its shareholders had the transaction been completed, less the residual value of the shares on the termination date. The court rejected this measure of damages because Cineplex, as the contracting party, could not recover the losses of the shareholders that are only third-party beneficiaries to the contract in similar fashion to the New York Second Circuit’s decision in Consolidated Edison Inc. v Northeast Utilities.1Instead, the court elected to award damages in the amount of $1.2366 billion based on “loss of synergies”. The court concluded that the lost synergies were Cineplex’s own losses as a result of Cineworld’s termination, and that those synergies would have been realized had the transaction been completed. The award was intended to put Cineplex in the position it would have been in had Cineworld closed the transaction.

Cineworld has since appealed the “loss of synergies” aspect of the decision, which will be watched closely moving forward. In the meantime, practitioners may want to consider negotiating for the lost premium, or the “benefit of the bargain” in public M&A agreements.

Key Takeaways

Canada now has two MAC cases that provide valuable guidance as to how Canadian courts will interpret MAC carveouts and ordinary course covenants. The determination of whether there has been a MAC will always be highly fact-specific, but it would appear that Canadian courts will be fairly reluctant to let buyers walk away from merger agreements. While Canadian courts have adopted the Delaware definition of a MAC, the courts in Fairstone and Cineplex depart from the US law in their interpretation of the ordinary course covenant. In Canada, the ordinary course is interpreted by comparing what the business has done in similar economic circumstances and as compared to similar businesses. In the US, the courts interpret the covenants more narrowly with the focus being on past practices of the company itself.2 Moving forward, practitioners may look to revisit how “ordinary course” is defined in merger agreements.

For more information, please visit Fasken online at www.fasken.com. 

The authors would also like to thank and acknowledge the contributions of Montana Licari in preparing this note. 

1 426 F.3d 524 (2d Cir 2005).

2 AB Stable VIII LCC v MAPS Hotels and Resorts One LLC held that the seller breached the ordinary course covenant and the buyer could not be forced to close. The breach was based on the seller significantly altering its business in response to COVID-19 and acting in an unprecedented manner by closing two of its hotels, limiting the operations of others, and laying off or furloughing 5200 full time employees. The resulting business would have been inoperable and not what the buyer initially bargained for.

MAPLE INTERVIEWS ERIC EIDE - MANAGING DIRECTOR AT THE ALLIANCE FOR SOUTHERN CALIFORNIA INNOVATION

This month we sat down with Eric Eide, the newly appointed Managing Director of the Alliance for Southern California Innovation to discuss the work of his organization and the Southern California innovation landscape.

1. Eric, congratulations on your recent appointment as Managing Director of the Alliance for SoCal Innovation. For our readers who are not familiar with your organization, would you share an overview of your mission and the work or your organization?

Thanks so much Stephen. I really appreciate being part of the MAPLE Business Council and for the opportunity to share a bit about our organization and the impact we are making.

The Alliance for Southern California Innovation (the “Alliance”) is a not for profit formed in 2017 that has successfully brought together Southern California’s top research institutions, local business leaders, and world-class advisors to focus on bridging critical gaps in the SoCal innovation ecosystem. We believe we have the greatest impact by acting as a strategic convener and matchmaker; putting players together who have complementary capabilities and share common objectives. The Alliance cannot do this alone. That is why we engage and align strategic partners to advance and accelerate their innovation agendas by better capitalizing on what the SoCal ecosystem has to offer. We aren’t just a connector but also look to spark powerful new collaborations that produce game-changing innovation initiatives. It is through this highly leveraged approach that we believe a small not-for-profit like the Alliance can indeed move mountains.

2. With your focus on the innovation landscape in Southern California, who are the stakeholders that are defining it and shaping its future contours?

We often say that the Alliance helps weave the rich innovation fabric that defines this amazing region: aligning the vertical threads within key stakeholder groups (academia, corporate, VC and community organizations) and then interconnecting them across these groups in hopes of instigating important collaborations.

This strategy only works once you have assembled critical mass in each stakeholder group; I believe the Alliance is reaching that critical tipping point with more than 75 partnerships/formal collaborators, including MAPLE, where our impact can be felt across a significant population of the innovation ecosystem. Below are the key stakeholder groups and some organizational names that exemplify each stakeholder group:

• 20+ leading corporations including Amgen, Cubic, Disney, Edison, Edwards, Illumnia, Lilly, Petco, Pimco, Mitsubishi Electric, Verizon, Yahoo, etc.

• 30+ not for profit & community organizations with 15 in our SoCal Leadership Council including CLA-OC, BioSciencesLA, Biocom, Octane, Connect, LAEDC, CoMotion, etc.

• 10+ Top Academic Research institutions: all the UC’s, USC, Caltech, Claremont Colleges, ASU & USD.

• 23 VCs/CVC including Upfront, March, M13, Acme, TCG, TenOneTen, Town Hall Ventures, Bonfire, Calibrate, Smash, and others.

3. How do you view the current state of our innovation landscape in Southern California and what have been some noteworthy developments in the past year?

The current state of the SoCal innovation economy is strong! I would have to say that the most noteworthy development this past year was the continued resilience of the SoCal innovation economy through a global pandemic. Rather than slowing down, the innovation economy surged, with a raft of new companies formed and overall startup investment up.

For the Los Angeles Metropolitan area, which also includes northern Orange County, investment more than doubled between 2017 and 2021, rising from $10.3B to $34.3B during that period according to Pitchbook-NVCA’s Venture Monitor Q1 2022 Report. In San Diego, investment rose by nearly 5x from $1.2B in 2017 to a record breaking $5.2B in 2020 based on San Diego-based Connect’s reporting. These investor trends have been buoyed by the dramatic increase of SoCal based investors, which have risen from a couple dozen just ten years ago to over 120 funds today as well as more non-resident capital finding and investing in local SoCal startups.

4. What do you see as some of the key challenges for nurturing and scaling innovation in Southern California?

Despite our progress, capital access continues to be one of the key challenges facing our region. There are simply many more good companies than funding available to fund them. The actual number of SoCal startups that receive investment has been relatively stable over time and most of the dollars that have increased in recent years are channeled into a small number of growth stage companies.

A related challenge is how unevenly capital is deployed across geography, industries, and across demographic groups of founders. For example, startups in Santa Monica have better access to the local capital that clusters there than startups just 70 miles east in Riverside.

Some industry specialties are more attractive to investors, such as Business-to-Business Software as a Service (SaaS), which tends to reach profitability faster and with less investment, than say sustainable technologies, which SoCal is a top producer of, but the important industry tends to suffer from higher capital requirements and longer sales cycles, which may dampen investor interest.

Finally, one of the most important challenges is the systematic exclusion of women and minorities from access to capital. While this is not a problem that is unique to SoCal, it is acutely felt here, especially given the diversity of our population.

5. How competitive is our Southern California innovation ecosystem when we look beyond our state and national borders?

SoCal consistently ranks as a top national and global innovation hub across multiple national and global innovation reports. Our strategic partner, The Boston Consulting Group, ranked SoCal as a top 3 tech innovation ecosystem in their 2018 Stars Aligning: How Southern California Could Be the Next Great Tech Ecosystem ahead of Boston and just behind the San Francisco Bay Area and New York City.

SoCal (or its leading innovation hub cities) are ranked highly in the following reports as well:

• LA #14 & San Diego #15 (globally) in JLL Innovation Geographies 2022 https://www.us.jll.com/content/dam/jll-com/documents/pdf/other/jll-2022-innovation-geographie.pdf

• LA #6 Ecosystem (globally) Startup Genome www.startupgenome.com/report/gser2021

• San Diego #3 & LA #7 Life Science Labs (nationally) JLL Life Sciences Real Estate Report 2021 https://www.us.jll.com/en/trends-and-insights/research/life-sciences-real-estate-outlook

• LA #4 Ecosystem (globally) Startupblink 2021 www.startupblink.com/startupecosystemreport.pdf

• LA & Orange County #9 Tech Talent Pool (N. America) CBRE Tech Talent 2021 www.cbre.com/insights/reports/scoring-tech-talent-in-north-america-2021#top-talent-markets

6. How well represented are women and minorities in the Southern California innovation ecosystem today and what examples can you point to of outreach to increase their participation?

While diversity is high across SoCal, with 67% of the SoCal population categorized as non-white, diverse founders and innovators do not receive equal access, opportunity, or compensation. Region wide data is difficult to find and aggregate, but our partner, PledgeLA, administers an annual survey to over 200 LA-based companies and investors and reported the following findings:

GENDER AND PAY EQUITY

• Gender pay equity remains a persistent concern for LA tech. Regardless of role or experience, women at Pledge LA companies earn $20,000 less than men.

• Women with 20+ years of experience make an alarming $90k less than men of similar tenure.

RACE AND PAY EQUITY

• White employees out-earn Black and Latinx staff considerably, making an average of $90k net of experience and role.

• This compares to just $75k for Black employees, and a paltry $60k for Latinx employees .

VENTURE CAPITAL PORTFOLIO DIVERSITY

• Compared to the national average, PledgeLA venture capital firms have invested in almost twice as many female founders .

• Investments in Black founders are six times the national average.

• Funding to Latinx founders is eight times the national average.

• At the same time, these numbers track well below each identity’s share of the local population.

At the Alliance we value and seek to promote and support an inclusive innovation economy. We formed a DEI committee in April 2021 that meets quarterly and is responsible for ensuring the Alliance is proactively reflecting the rich diversity of our region in our programming, engagement and leadership.

Our intentional focus on external outreach has yielded some modest results. In our SoCal Venture Pipeline Program, for example, the proportion of non-white founders applying to the program has risen to 60% from an average of 53% from our first full year of operation. We’ve seen a similar uptick for female founders.

7. Are there any myths or misperceptions about Southern California as a center of innovation that are standing in our way for future growth and success?

SoCal is best known for Hollywood, but we have so much more to offer than just entertainment. And herein lies the challenge. We excel at many things that others don’t recognize about SoCal. We lead in software and technology, finance, consumer, health, media, real estate, and aerospace. SoCal is less specialized in a single innovation category, while other hubs tend to be more concentrated, such as the Bay Area in software and tech and Boston in health. While tricky to communicate, our diversity is our superpower and creates more opportunities to drive innovation.

Our people and our sectors are more diverse than anywhere else in the world, enabling us to spark collisions and collaborations that no other ecosystem can. As an example, our obsession with healthy living has sparked convergence between bioscience and fitness wearables to create sustainable and fashion-forward products. We’ve brought together tunes and tech and merged agriculture with medical imaging science like no other region has. We have all of the essential ecosystem components and so much more.

8. Why should our members, partners and readers in Canada pay attention to the Southern California innovation scene?

We are BIG. SoCal has over 20 million people, spread over 40,000 square miles, and is a $1.4 trillion dollar economy that would make it the 13th largest economy in the world if it were a country. And we think and dream BIG. From Santa Barbara to San Diego to Orange County and the Inland Empire, we have the most progressive consumers in the country, demanding sustainable and environmentally friendly products, meat alternatives, pet health monitoring, petroleum-free plastics and alternatives to textiles made from animal products. We listen to them, and we act because we care.

The culture—one of a kind. The climate—perfect. The standard of living—high.

Our research, education and incubatory establishments are setting the course for national tech innovation. We’re the gateway to Asia and Latin America, and our two primary seaports (the largest in the Western Hemisphere) are ground zero for energy-efficient logistics. Our trailblazing leaders are setting the most progressive agenda in the nation because, in living in SoCal, they acutely feel the impact of the challenges around them. From the impact of climate change to mobility challenges to health crises and homelessness, they see these problems first hand and are fully motivated to drive the region to find solutions. Also, our unique personality and lust for life enables us to capture the attention of the world.

9. In what ways do you see Southern California’s ties with Canada, as the second largest market for California and one of its top sources of foreign investment, as an opportunity in the future?

SoCal-based investors are increasingly aware of the innovation potential of Canada and I’ve recently learned about angel and institutional investors investing in Canada-based companies. I believe this trend of cross-border investments will continue and accelerate.

At the same time, Canada is a compelling market for SoCal-based companies to expand to given its strong talent, complimentary industries, and our intertwined and coordinated supply chains. SoCal also boasts one of the largest Canadian diaspora populations in the world and with that familiarity and with those cross-border relationships business becomes much easier to initiate and sustain.

10. Lastly, Eric. As a leader at the Alliance for several years, and now its Managing Director, what are some of your priorities for the organization?

The Alliance will continue to focus on connecting and coordinating stakeholders to drive impact. This year, I am very excited to develop our internal capacity to report on innovation trends and metrics for our region and we are in the process of securing the resources to make that reporting a reality.

My primary focus, however, will continue to be on supporting and growing access to capital through leadership of our VC Advisory Council and the SoCal Venture Pipeline program, both launched in 2021. I am particularly proud of our early success through the SoCal Venture Pipeline to create more capital access opportunity across the region.

In February, we expanded the program to startups seeking Seed stage funding ($1M+), we’re seeing remarkable momentum that will enable us to help more founders, especially women and people of color who face added barriers for capital access.

Next year, we expect to help more companies and access funding. We grateful to our lead underwriting partner, Silicon Valley Bank, and the additional support Wilson Sonsoni and KPPB provide to make this program possible.

For more information on the Alliance for Southern California Innovation, please visit www.alliancesocal.org.

CONNECTING WITH PASSION TO BUILD A LINK AMONG THE AMERICAS

Author: Paola Viviana Murillo, Founder & Director, Latincouver and Founder, My Latin Store.

When you are an entrepreneur it doesn't matter where you are or where you are from, you just have an inner burning wish to do something where you can use your talents and launch them to the world.

Born in Colombia, I later lived in Lexington Kentucky for 9 years where I went to school for business and marketing. It is also where I started my first company - PVM IMPORTS - selling US clothes to Colombians and Colombian jewelry to people in the US. Kentucky was definitely home for me, and it was a place where I could find many Latino stores and even some Salvadoran and Mexican restaurants. I had a Univision TV channel to watch my Colombian soap operas. Telemarketers spoke to me in Spanish when they were calling to sell me insurance or any number of other things. My date nights always were at a Mexican restaurant to make a good impression (although I am Colombian), but what I realized was that there was a huge awareness of the Latino community in the US. Today the US represents the second biggest Spanish country in the world with over 55 million people.

In the winter of 2005, I moved to Montreal, the city of lights in Canada, where the streets are full of life and the French style of living attracted my Latino blood. Going to the Jean Talon market reminds me of going grocery shopping with my Dad to the Plaza de Mercado Paloquemao en Bogotá.

From the beginning, I knew I was going to bring something to sell in Canada, so I did my research and decided it was either going to be coffee or women's lingerie. I decided that lingerie was going to be my better option since women in both regions have a lot of similarities. I secured exclusivity from a well-known Colombian woman to sell her women's underwear in Canada. I was excited about this new venture! My fashionable snow jacket from Colombia; however, didn't do the job when it came to dealing with the weather in Montreal. There were days when I had to wait at the bus stop while my tears were frozen half way in my face and I sometimes felt as if my nose was going to fall down. Soon, I realized that I wasn't equipped for this beautiful city.

Weeks later, my brother asked me to move to Vancouver bragging about the beautiful nature and a free soul spirit city that was surrounded by the Pacific Ocean. Vancouver is home to the well known lululemon athletic apparel and it's a city where women are into yoga and hiking. I had to change my plan when I arrived in Vancouver about what kind of venture I was going to have as my colors and accent were very unique. There was more knowledge about noodles and sushi than tacos and Arepas. It was time for me to adapt to seeing signs in Mandarin and Punjabi rather than in French or Spanish.

My first job in Vancouver was in recruitment. I realized that Canada was looking for a lot of talent since companies were desperate to find the right candidates. My second job was working with the federal government preparing for the 2010 Olympic Games.

I will never forget the question that was once asked of our communication team. "In the opening of the games we need to represent all the cultures that we have in BC."

I raised my hand and asked, "Can I help find the Latino community?" The response was “Latino? Do we really have many Latinos in BC?” And I responded that of course we have many Latin American cultures here. This lack of awareness broke my heart but it also inspired me to find a new passion and my next purpose - creating a voice for the Latinos in BC.

I wanted to bring Latinos together so they can help each other while we create an awareness of who we are and what we can offer to our new home.

Latin America and Canada
The mining industry probably is the first and oldest connection between Canada and Latin America when it began in the 20th century and especially since 1989 when Canadian companies increased their involvement dramatically. By 2009, the Canadian larger-company mineral exploration market in the Latin American region was valued at US$1.7 billion and of course British Columbia is also the home of many mining companies. This connection became an opportunity to increase knowledge about Latin America and create a true Latin American Plaza in BC.

One of the best things that happened to me in my journey was meeting the Honorary Consul of Costa Rica, Antonio Arreaga, who was my mentor and who guided me through all my efforts to bring the Latin American community to BC. Organizations like the Hispanic Congress around Expo 1985 and the Canadian Council of the Americas had laid the foundation.

It wasn't easy navigating and understanding a growing Latin community when we couldn't be fully counted within the official Stats Canada numbers. In the 2006 census, according to Stats Canada, of the 31,241,030 million total population of Canada only 362,120 were identified as coming from Hispanic countries.

The Hispanic Congress in Toronto asked to do a special study to better understand our Hispanic population since these numbers weren't reflecting all of our community.

Their study counted people who were born in one of the 22 countries that speak Spanish, whose mother language was Spanish, and were children of two Spanish immigrants in Canada. After this study was completed, a new number for the Hispanic population living in Canada was 741,760 Hispanics with 98,685 in British Columbia. The official numbers; however, still fail to capture the full size of our community as in 2011, the official Hispanic population count was just 35,465.

We wanted to better understand our Latino community in BC, so in 2015 we worked with the Latin American consulates who were a good source of information since they were closely connected with their own communities. Here are some interesting facts. The Salvadorans and Chileans are the first ones from the Latino community to settle in Canada when they were fleeing from internal wars in the late ‘80s. There are now around 17,000 Salvadoreans including the second or third generations in Canada. The Mexican population is around 50,000, Colombian 10,000, and Brazilians around 11,000. We estimated that there were around 150,000 Latin Americans living in BC in 2015. These numbers are based on the same principle from the revised study from Stats Canada with the addition of migrant workers and international students.

“El rebusco”
One of the things that I have found since I started with Latincouver is that we have a very young and active community. Many people are immigrating as permanent residents or with student visas which brings some great qualified skilled workers to Canada.

By nature, Latinos understand the concept of “el rebusco", or "todero” which means you will find something to offer or something to do in order to advance in your life. I found Latinos in BC have a very entrepreneurial spirit and I could easily say that 1 of every 5 people I know already has a business or is ready to launch one.

I know as a cultural group in BC we are still not as well known as in the US, but I am very proud of the work of Latincouver for the last 14 years and of the over 5000 volunteers who have shared our culture through hundreds of events which have fostered many business opportunities. I believe social media and even the pandemic has encouraged entrepreneurs in the Americas to come together.

Today I am able to train with a personal trainer located in Peru, or have a great speaker located in the US, or close a real estate transaction between Vancouver and Mexico. I know Latin Americans and the world are going through some political challenges but there is also an opportunity for the people who are hands-on to put their talents to work and unite forces to make a difference within our community.

My happy ending is that after dedicating 14 years to build bridges between Canada and Latin America with any of my 3 ventures, Latincouver, Mirrai Marketing Group, and MyLatinStore, I feel complete because as a new mom of an 8 month-old baby, I am able to connect my little one with my Colombian roots.

For more information on Latincouver, please visit www.latincouver.ca.

Future-focused Growth: Economic Transformation and Opportunities for Alberta

Author: Rick Christiaanse, CEO, Invest Alberta

Major financial institutions are projecting Alberta will lead Canada in economic growth in 2022. Doubling down on investment attraction throughout the pandemic has led to billions in private investment across agriculture, energy, technology, and financial services to flow into Alberta.

Invest Alberta’s clients were part of this journey, announcing $19 billion in investment and over 5,000 jobs last fiscal. As Alberta continues to grow its pipeline of high-impact, high-value investment, new announcements and growing government steps to keep Alberta competitive are paving the way for emerging sectors and continued investment in technology, fintech, agriculture processing, hydrogen and more.

Budget 2022 and diversification
When the Government of Alberta tabled its 2022 provincial budget in February, it was clear that the future was top-of-mind. New funding for talent development programs, reducing red tape for business and a new Hydrogen Centre of Excellence were announced to help enhance Alberta’s competitive position for investment attraction.

Budget 2022 presented a balanced budget, thanks to spending restraint and dynamic growth in every sector of the economy. The Government of Alberta has committed to keeping Alberta’s net debt below 30 per cent of its gross domestic product (GDP).

Alberta also has one of the lowest net debt-to-GDP ratios in Canada, and government is projecting budget surpluses in each of the next three years.

"Alberta’s tech and innovation sectors continue to see record growth. According to a 2021 AEC Deal Flow Study, as of April 2021, there were over 3,000 tech companies in Alberta, an increase of 149% since 2019."

Alberta is a global tech hub
Alberta’s tech and innovation sectors continue to see record growth. According to a 2021 AEC Deal Flow Study, as of April 2021, there were over 3,000 tech companies in Alberta, an increase of 149% since 2019.

Lower rent costs, tax advantages, and a local and growing tech workforce of about 200,000 have attracted tech heavy hitters like Amazon Web Services —which announced a $4.3 billion investment by 2037 for a new cloud computing operation in Calgary­—and global IT giant Mphasis which is building a quantum computing ecosystem in Alberta that will create up to 1000 jobs.

Robotics, software and app development, AI, cloud computing and more show innovations coming to life in Alberta to solve the world’s biggest problems and create a cluster of expertise here to support bigger companies looking to incorporate these innovations into their operations.

Smaller companies continue to benefit from this symbiotic relationship, and a growing number of incubator programs are designed to accelerate the growth of small and medium tech companies.

The emergence of Alberta fintech
An important offshoot of the tech sector is Alberta’s emerging fintech industry. It’s all about embracing digital transformation and changing the way finance works. As of February 2022, Alberta is home to at least 15 crypto-related firms, ranging from mining to financial services, and the industry is only expected to grow.

The concentration of capital-intensive industries has created strong demand for an innovative financial services sector. Alberta has developed world-class expertise in niche sectors, like cryptocurrency. There are also tailored services to help companies navigate Alberta’s regulatory streams, like the financial concierge services provided by Invest Alberta, for example.

Our announcement in December with Brane Inc. is an example of crypto businesses making Alberta a destination of choice.

Brane Inc. is a leading independent cryptocurrency custody solutions provider that chose Alberta to headquarter its Brane Trust operations, creating up to 100 full-time jobs over five years and building on Alberta’s growing fintech and blockchain ecosystems. The announcement builds on the momentum of similar announcements from companies like Tetra Trust, BitCoin Well, Catalyx and more.

Alberta’s financial services sector has a growth projection of 11% year-over-year, with fintech playing an increasingly bigger role. Alberta is also becoming home to new Centres of Excellence, including the new EY Finance Centre of Excellence that will offer cutting-edge internal finance services for the pressing needs of EY’s business, and create up to 200 new jobs over the next three years. Royal Bank of Canada (RBC) is also investing in a new Innovation Centre in Calgary that will create 300 jobs.

"Calgary has the most corporate head offices per capita in Canada, and major firms with a presence in Alberta include JP Morgan Chase, Goldman Sachs, Morgan Stanley and Barclay’s."

Calgary has the most corporate head offices per capita in Canada, and major firms with a presence in Alberta include JP Morgan Chase, Goldman Sachs, Morgan Stanley and Barclay’s. In Alberta, the world’s largest finance players intermix with exciting fintech startups, all supported and driven by a skilled workforce.

A new leaf
Agriculture continues to be a key driver of Western Canada’s economy, but the future of agriculture is always changing. While traditional farming continues to evolve and feed the world, Alberta’s expertise in agri-tech is attracting innovations like the new 76,000-square-foot vertical farming operation sprouting up in Alberta by GoodLeaf Farms.

GoodLeaf operates proprietary indoor vertical farming systems that use modern technologies to grow varieties of leafy greens year-round without pesticides or herbicides. The indoor vertical farm planned for Southern Alberta will be twice the size of the company’s flagship farm in Guelph, Ontario. They were assisted with a $2.7 million incentive from the Alberta Investment Growth Fund (IGF)—a program that helps companies in the late stages of decision-making if the company can deploy at least $15 million in capital and demonstrate that Alberta and at least one other jurisdiction are actively being considered for investment.

The farm will produce more than one million pounds of local leafy greens each year which will land on grocery store shelves in Western Canada by early 2023. Global connectivity and business friendly policies open up tremendous opportunities for agriculture and agri-tech to establish Alberta as a North America hub.

Clean hydrogen takes off
With a global market estimated to be worth $2.5 trillion a year by 2050, hydrogen could be our next great energy opportunity. When companies like Northern Petrochemical Corporation were searching the globe for a home for its proposed $2.5 billion clean hydrogen complex, they found it in the Northwest Alberta.

Last November, the company signed a historic land purchase agreement in Grande Prairie with the Municipal District of Greenview for a 295-acre parcel to develop a carbon-neutral integrated ammonia and methanol complex. The project is expected to create up to 4000 near-term construction jobs and 400 permanent full-time jobs once operational in the region. It’s an ESG win for Alberta.

The Greenview Industrial Gateway—where Northern Petrochemical’s project is slated to be built—is a world-class, heavy eco-industrial development focused on value-added petrochemical development. The gateway is connected by rail to the Port of Prince Rupert for export to Asian markets, offers low-cost feedstock for the processing and development of petrochemicals, houses pipeline and utility infrastructure, and has a skilled industrial workforce experienced in energy production, manufacturing, and processing.

This “plug and play” scenario is catching the attention of global investors who want to be part of the hydrogen revolution.

Air Products is building the world's largest net-zero hydrogen energy complex in Alberta—a $1.3 billion high-impact investment built with modern technology and design. The energy complex will establish a local supply of liquid hydrogen, enabling the energy transition of the transportation sector, encouraging hydrogen-fuelled transit buses, trucks, and trains with long-term local supply.

"The Government of Alberta’s recently-announced hydrogen roadmap is also a blueprint that positions Alberta as a hydrogen superpower. It contains several policy actions that will be introduced and provides support to the sector as technology and markets develop."

The Government of Alberta’s recently-announced hydrogen roadmap is also a blueprint that positions Alberta as a hydrogen superpower. It contains several policy actions that will be introduced and provides support to the sector as technology and markets develop.

A place that understands the energy sector, Alberta’s carefully planned infrastructure supports net-zero energy developments and a network of services to get energy products to international markets, fast.

What’s next?
Progress is not without its challenges, and as Alberta’s emerging sectors continue to grow exponentially, we can face the same challenges as other jurisdictions, like talent shortages, supply chain issues and competition.

2022 is once again looking promising for Alberta. There are green and blue hydrogen projects in the works, a one-of-a-kind biofuel facility, and value-added agriculture projects sprouting up.

Whatever your investment or business goals are, you can achieve them in Alberta, Canada. Whether it’s leading the world in tech, energy, or developing sustainable food, we can make it happen, together.

Rick Christiaanse is the CEO of Invest Alberta, which works with investors globally to start up or scale up in Alberta, Canada. With offices in Calgary, Edmonton, along with international offices located in key markets around the world, Invest Alberta connects industry, government partners, and economic development organizations to offer seamless services that make it easy for high-impact investment to flow into the province. Learn more at investalberta.ca

Making Purpose a Priority

Author: Ivy Arias, Founder and CMO, Brand LA

We're back to Daylight (Saving) Time, and with the change come fiscal year endings, beginnings, and the inevitable examination of achievements, goals, (un)realistic expectations, strategic planning, and KPIs. Annual reports, meaningful work, tangible impact, making a difference, and all the good words a PR team can think of to demonstrate brand delivery.

One of my top-of-mind questions, though, goes beyond being on-brand — since most companies try to make that a priority: how are we doing with on-purpose efforts?

I've spent more consulting hours than my calendar can show, speaking with professionals in numerous fields of expertise across industries and regions worldwide. Over the years, I've noticed a recurring pattern that points to a common misconception regarding understanding purpose and the meaning we tend to attach to it. When looking back (or ahead), people in leadership roles often feel under pressure if they can't grasp the essence of a why.

What's the purpose of purpose?

Some people conflate an organization's purpose with the purpose of a job, and that one with self-purpose, or with one's purpose in life. Although those could overlap, the processes of purpose identification and purpose-driven actions are not mutually exclusive. It's no wonder we often succumb to work-related stress, workplace-infused disappointment, tiring searches for greener pastures, burnout, social anxiety, and in some well-documented and private cases, depression.

"Purpose has a footprint in our sense of well-being, belonging, overall mental health, and ability to be the best we can be, at whatever we choose to do, no matter who we are. Making purpose a priority can serve us in practical ways if we are intentional about being discerning."

Purpose has a footprint in our sense of well-being, belonging, overall mental health, and ability to be the best we can be, at whatever we choose to do, no matter who we are. Making purpose a priority can serve us in practical ways if we are intentional about being discerning.

Life is not linear, and our place in society is part of it. For that reason, it's often challenging to consolidate the elements that translate into our feeling of purpose. It varies from person to person, as it changes from job to job, business to business. These could create confusion when trying to understand empathy, collective purpose, and how we fit into it.

In today's business arena, particularly in Southern California's innovative, creative, and diverse ecosystem, it's essential to prioritize our understanding of one's purpose and knowledge of other people's endeavors in the context of their ultimate motivations. That makes a huge difference when fostering long-term collaborations, solid partnerships, pursuing new opportunities, and engaging with our communities in meaningful and more equitable ways.

Moreover, in a world where we often encounter polarized views, beliefs, and business goals, it's almost imperative to align the organization we're leading with those that share our sense of purpose and want to serve by creating solutions to challenges from a place of validated integrity.

Now it's not the time to use Diversity, Equity, and Inclusion as a PR tool or token — filling up boards and positions with people who look "different," just for the sake of compliance. That's a costly disservice to the professionals who merit credit where it's due, regardless of ethnicity.

These are times for self-examination, active diligence, and moral leadership. We must be intentional about representation; acknowledge people of color's expertise, abilities, and contributions, valuing diverse ecosystems and what they add to the world.

It all starts with purpose.

To seek much-needed clarity about the all-important word in question, I've put a simple exercise to the test, which keeps me in check when walking the thin line between purposes. That way, I'm able to distinguish whose or what purpose I'm fulfilling and the amount of direct and trackable contributions I can afford to offer at any given time. Most importantly, it allows me to practice self-assessment as a female, Hispanic-minority leader, especially, in the nonprofit space.

"Identify, write down, and read your “Purpose Mandate.” That includes your life's purpose, your role's purpose in your line of work, and your organization's purpose. The more you read, the more you'll find questions to which you need answers and roads that could yield solutions; the more you'll understand your place in life, society, contribution to the world, and ultimately, your legacy."

Identify, write down, and read your “Purpose Mandate.”

That includes your life's purpose, your role's purpose in your line of work, and your organization's purpose. The more you read, the more you'll find questions to which you need answers and roads that could yield solutions; the more you'll understand your place in life, society, contribution to the world, and ultimately, your legacy.

If you prioritize your purpose in life (Self)

These human beings make it a point to express themselves in creative and innovative ways. I often encounter them in our organization's ecosystem. They're generous, and their solution-oriented notions inspire action.

It's worth noting whether your purpose aligns with what you're currently doing for a living. When making business and professional decisions, it's prudent to examine this. You'll feel confident in the fact that you're supporting your choices with a sense of knowing what matters most, as opposed to just what's important (to you) right now.

If you thrive in your role's purpose (Professional)

These people have managed to find and focus on the positive aspects of their work and can attach meaning to what they do (primarily for others), no matter how hard or complex their job might be. I frequently hear from them the words, "What I do is rewarding, I love my job, and I'm happy here." These professionals are founders, small business owners, CBO leaders, educators. Others are great people with whom I don't work directly yet connect regularly. Surround yourself with those who uplift you. Their refreshing views might help you clear the foggy goggles, through which we must navigate to-do lists and unpredictable challenges.

If you're safeguarding or reshaping an organization's purpose (Business)

The pressure is on. You have (significant) added responsibilities. You're in charge of making things happen with a higher level of commitment while being a leader others can count and depend on, even if you're not a founder/owner. When you're in this lane, if your life's purpose differs from what your business stands for, you'll repeatedly struggle with reconciling time spent at work with time away from what you consider more aligned with your calling — regardless of the financial or title perks. It's worth keeping in mind that to serve an organization better, you must, first, know where you stand. Your inputs and contributions can impact sustainability efforts to foster a purpose-driven workforce.

Examine the status quo.

I've asked many executives about the purpose of their respective organizations. You might be surprised to learn how many confidently offer their organization's mission. While the statement serves as a company's equivalent (in a corporate or marketing language) to what most people could interpret as purpose, those are not the same. Not many Chiefs are curious enough to examine the difference either, until they recognize the ethical value of doing so.

"The mission addresses your company's aspirations to land a solid place in business. The purpose lets people know your company's place in the world. It’s the soul of any enterprise, however big or small."

The mission addresses your company's aspirations to land a solid place in business. The purpose lets people know your company's place in the world. It’s the soul of any enterprise, however big or small. For instance, our organization's mission is to increase Marketing literacy, effective communication, and regional collaborations to help underrepresented communities, educate, and support economic growth. Our purpose is to do good by sharing more than most are prepared to give. Knowing our purpose helps us in our humble quest to cultivate transformational ethos. It also informs one's inner trailblazer about the need to nurture mindfulness for success.

You'll operate from peace of mind when you can rely on the integrity of your purpose, as a human being and as a leader. In the bigger picture, projected outcomes are clearer when we do our best, and we can only do our best when we feel we're fulfilling a clear purpose; for ourselves, to make sense of our why, and most importantly, how to be of service to others.

There are various methods to find your purpose — books, articles, blog posts, tweets, videos, podcasts, apps, meditation, journaling, coaching, therapy sessions, or by asking your God. Once you learn how to define purpose(s), perhaps, it will be easier to make decisions about putting in a different kind of work, no matter what job is paying your bills. When you know your purpose, you find ways to make it count, leaning toward spaces and the people who share your selfless vision and ambitions. The making of every great leader I humbly admire started with purpose.

When you rely on your Purpose Mandate as your northern star, you won't lose hours of sleep, no matter how many times our calendars shift, and our clocks move forward. At the end of the day, it's about making the most of light, and sometimes, we could all do with a little bit of that.

Ivy Arias is founder & CMO of Brand LA. Inc. For more information, please visit www.brandla.org.

How the Rise of Blockchain and Crypto Requires Innovative Quality Engineering

Author: Brian Bernknopf, Managing Director, QA Consultants

2022 will bring huge momentum as adoption of blockchain and cryptocurrency become mainstream for the financial, regulatory, and fintech industries as well as B2B and B2C applications. Speed of adoption may vary among sectors, but one thing is for sure, all businesses should be planning for the possibility of modifying their digital platforms and core systems to achieve Crypto readiness.

QA Consultants has already been engaged by public and private sector organizations to implement quality engineering solutions for the roll-out of Crypto platforms and the conversion of existing platforms to integrate Crypto commerce.

In fact, we are doing this ourselves, but more about that in another article. But our experience with our customers has been eye-opening and as such, we are sharing our initial observations of the challenges and considerations that technology and commercial officers need to be thinking about now. We have already seen early adopters like Vast Bank which became the first nationally chartered, FDIC-insured bank to offer crypto banking...allowing customers to transact in virtual currencies through a user interface. [ABA Banking Journal Podcast, Community Banking Technology, September 2021]. Blockchain and Crypto related adoption and transformation for customer experiences impact quality objectives into three areas: 1) Functionality, 2) Performance, and 3) Security.

Functionality - Does it Work?
The amount of innovation and change that affects core systems and digital platforms will require even more sophisticated quality solutions and pragmatic approaches to managing and improving quality continuously.

"Primarily, it will no longer be optional to exclude application quality and security processes from every aspect and stage of the software development lifecycle. We see the focus on user interfaces in a wide range of devices including everything mobile, wearables, and even smart TVs."

Primarily, it will no longer be optional to exclude application quality and security processes from every aspect and stage of the software development lifecycle. We see the focus on user interfaces in a wide range of devices including everything mobile, wearables, and even smart TVs. On the back end, core systems (e.g., banking and retail ERP) will need to be re-staged to accept Crypto transaction units and likely re-tooled for a plethora of new compliance and regulatory reporting requirements.

The compliment of Crypto currency to traditional fiat systems require adoption of and perhaps new physical hardware like ATMs and point of sale equipment to recognize secure working Crypto transaction capability which must be tied to the blockchain-based networks and tokens they support. More API’s and interfaces to be tested and re-tested, and the user experiences leave a lot to be desired for novice consumers

Performance – Does it Scale?
So much is talked about with regards to the transaction speed of the numerous cryptocurrency networks that are out there. Most often, the conversation is about how slow Bitcoin is, why Lighting network was created and similar issues with all the other major cryptocurrencies and their continued design changes to support improved transaction speeds and lower costs. However, there are so many other parts of a complete transaction that can benefit from higher performance or contribute to poor transactional performance and customer experience. Digital wallets and exchange platforms can benefit significantly from even one second and sub-second response time increases.

As the price of crypto currencies continues to be very volatile, these milliseconds matter. We have seen so many decentralized and traditional platforms suffer from significant outages and delays due to overwhelming demand. These outages are preventable and thus, so is the ensuring customer abandonment and lost revenue.

As observed on eCommerce platforms, speed plays a significant role in end-user satisfaction. Slow sites, where a customer wants to continue before the site is "ready," suffer from very high abandonment. With many exchanges available and moderate switching costs, the fastest provider will win the largest customer share.

Vulnerability – Is it Safe and Secure?
While the blockchains and cryptocurrencies themselves are immutable, the systems that are being used to manage digital wallets and exchanges are themselves running on traditional web 2.0 systems with significant vulnerabilities in their architecture. They are run by humans who have, themselves, been shown to be the weakest link in system security, for example the Robinhood voice phishing or “vishing” event in 2021 [Bloomberg, November 2021]. We must be hypervigilant in continuous application vulnerability assessments on these platforms as they are constantly changing and constantly under attack internally and externally.

"Would-be vulnerabilities in point-of-sale systems and Crypto ATMs are of greatest concern. Any physical hardware with embedded software and firmware will be at risk of more and more sophisticated entry points."

Would-be vulnerabilities in point-of-sale systems and Crypto ATMs are of greatest concern. Any physical hardware with embedded software and firmware will be at risk of more and more sophisticated entry points. We are seeing a more robust approach of bad actors and susceptibility to vulnerability and failure of these devices as they are adopted for crypto. Businesses must know all details of all vendors being used for physical connection to their digital networks and thoroughly vet and test these systems for performance, security, and functionality.

Crypto Application Case Examples
QA Consultants has seen demand for our crypto and distributed ledger quality engineering services explode in recent quarters. In fact, we are currently conducting engagements across all three of our core service pillars (Functional, Performance, and Security). In working with these clients, our teams are supporting the latest challenges presented by modern architecture, crypto asset networks, and complicated teams distributed globally.

For a digital wallet application, we successfully tuned a system from supporting less than 10k concurrent users at 2 min response times to one million concurrent users with .002 second response times. For a bitcoin ATM network, we successfully identified major security vulnerabilities at both the hardware and software layers in 1 day that could have led to millions in lost revenue. For a digital bank, we are supporting their migration to a core banking and crypto custody system through robust integration testing. In these engagements, our teams have partnered with development and business counterparts to bring these products to market with higher quality than originally expected was possible.

In summary, technology, operations, compliance, and marketing leaders have already or will soon enter a new learning curve of how crypto currency will reshape their businesses. Everything from core applications, customer digital platforms, hardware and devices and the business processes that support virtually every industry sector will require a transformative eye and a consideration in your strategic planning in order to sustain a competitive position in the Crypto era.

As you think about your systems and platforms and impending change, we recommend aligning your development considerations and planning for … Does it work?... Will it Scale?... and is it Secure?

QA Consultants, through its Emerging Technologies group, provides quality engineering and test automation solutions to enterprise blockchain and crypto programs including building and deploying digital wallets, assessing embedded software quality and security/vulnerability for Crypto currency POS/ATMs, and performance engineering for Crypto eCommerce platforms and monetary exchanges.

An Interview with Chelsea Peet and Aaron Pinto, Consuls & Senior Economic Officers, Ontario Trade & Investment Offices in San Francisco and New York

Chelsea Peet, Consul and Senior Economic Officer, Ontario Trade & Invest San Francisco; Aaron Pinto, Consul and Senior Economic Officer, New York.

We are honoured to sit down this month with Ontario's lead economic representatives for California and New York, Consuls and Senior Economic Officers, Ms. Chelsea Peet and Mr. Aaron Pinto, to take a look back at 2021, and to look ahead at what’s to come for Ontario in 2022.

To refresh our readers, can you provide an overview of Ontario’s size, economic footprint, key sectors and strengths?

Aaron: Ontario is incredibly vast. From a geographical standpoint, we’re Canada’s second largest province, covering more than 415,000 square miles in the heart of North America – to put that into perspective, that’s an area more than seven times larger than New York and nearly triple the size of California.

The sheer size of Ontario complements the province’s business might. Quite simply, we are Canada’s economic powerhouse. We generate nearly 40% of the national GDP – over $630 billion USD – the ninth largest subnational economy in Canada and the U.S. This fundamentally means a prosperous Ontario is a prosperous Canada and in-turn a prosperous United States.

The province is home to a highly-diversified economy, geared towards the future. We’re paving the path forward, from artificial intelligence to quantum, cybersecurity to blockchain, digital health to genomics, cleantech to agtech, and autotech to electric vehicles. The common thread across all these sectors is Ontario’s people.

Ontario is special because it’s where new innovations developed by highly skilled, talented homegrown and transplanted people meet the muscle of our strong manufacturing might and robust industrial economy.

What are Ontario’s economic ties with the United States, and New York and California in particular, and how close are our economies linked?

Chelsea: As the MAPLE community well knows, the Canada-U.S. partnership is tremendously important. We are bound by our shared geography, history, values, common interests, as well as deep people-to-people and economic ties. Quite simply, we do so much together.

"Ontario is a significant partner to more than half of the states in the U.S. As just an example, here in California, we have over 150 Ontario-owned companies operating. In 2021, Ontario-California two-way trade totaled over $27.9 billion USD."

Ontario is a significant partner to more than half of the states in the U.S. As just an example, here in California, we have over 150 Ontario-owned companies operating, including Shopify, BlackBerry, and many others that are well represented in the MAPLE community. In 2021, Ontario-California two-way trade totaled over $27.9 billion USD.

Aaron: The tale is similar on the East Coast. For example, Ontario is New York’s number one customer. We have 500 Ontario-owned companies operating in the Northeast that employ thousands of Americans. We export more to the region than to the UK, China and Mexico combined. In 2021, Ontario exports to Northeastern U.S. states totaled $30 billion USD.

We also like to say that throughout history, it’s clear that the U.S. couldn’t get enough of us – our Southern neighbor actually has at least a dozen places named “Ontario,” including in NY and CA – the highest in the world! We’re flattered!

In brief, how was 2021 for your SF/NY offices? What lies ahead in 2022?

Aaron: Our New York and San Francisco offices were keeping busy in 2021.

In New York, I was thrilled to join our Ontario office, leading our trade and investment team which covers all of the U.S. northeast. Over the last year, we saw more FDI activity pick up, and we engaged with a diverse range of U.S. companies in sectors ranging from sportstech to decentralized finance to computational pathology. We even met a few in-person! Working with partners, we facilitated visits, including bringing an Ontario delegation to the Vermont Chamber of Commerce’s virtual Manufacturing Summit, and flew the Ontario flag at events like TechDay NY’s Founders Summit.

Chelsea: And on the West Coast, our office was similarly engaged – hosting our annual Autotech program, as well as a number of pitch sessions with tech scouts and venture capital firms. We too supported virtual visits, including to the Collision tech conference in Toronto and a visit by officials interested in learning about Ontario’s economic and environment programs. Despite the predominantly virtual nature of work this last year, we’ve continued to be busy connecting with companies in the U.S. and in Ontario.

And we have lots to look forward to in 2022. From our autotech program, to events like BIO and Collision, we’re looking forward to more in-person engagements this year!

Aaron: In New York, we will focus on growing our locally-engaged team, facilitate trade-related initiatives for Ontario tech and life sciences companies, as well as continue to build our local network in the Northeast. We are currently working with local stakeholders to explore programming on medtech, fintech and manufacturing, as well as with angel investors.

The pandemic has dominated the international discourse over the past 24 months, how is Ontario doing?

Aaron: Ontario, like many other jurisdictions in Canada and beyond, was hit hard by COVID-19 . The pandemic resulted in many difficult choices to prevent our healthcare system from being overwhelmed.

Despite hardships, uncertainty and loss, Ontarians – like many - demonstrated incredible determination and spirit. Thanks to collective efforts, 85% of all eligible Ontarians, over five years of age, are fully vaccinated today.

From a government standpoint, Ontario continues to lay the foundation for a strong economic recovery. Ontario has put programs and initiatives in place to help businesses weather the storm. From the Small Business Relief Grant, to targeted tax relief measures, investments in regional development opportunities, and helping businesses diversify through digitizing and job training, the province has ensured that these programs and measures support our economic recovery as we continue to face challenges resulting from COVID-19.

With our reopening underway, we remain hopeful that 2022 will see even greater recovery for our province, and our partners in the U.S.

What are some of Ontario’s key priorities over the next 12-24 months?

Chelsea: From an economic development standpoint, Ontario is forging ahead to support innovation, recovery and growth across a range of sectors.

Let’s look at the auto sector – which is a key priority for our office in California. Ontario just announced Phase 2 of itsDriving Prosperity Strategy in November 2021, which included significant investments like the creation of the Ontario Vehicle Innovation Network (OVIN) and the establishment of the Automotive Battery Office. Our province continues to nurture an ecosystem where companies can thrive – and it’s working. Just in the past year or so, Ontario has seen big investments from major companies like Ford, GM, and BlackBerry QNX – almost $5 billion USD.

"Being Canada’s largest life sciences jurisdiction, the sector is abuzz with activity. In recent months, we’ve seen major investments from heavyweights including Sanofi and Roche. I’m excited by the new partnership between CCRM and McMaster Innovation Park to build a new biomanufacturing campus in Ontario."

Aaron: Ontario is also a titan in life sciences. Being Canada’s largest life sciences jurisdiction, the sector is abuzz with activity. In recent months, we’ve seen major investments from heavyweights including Sanofi and Roche. I’m excited by the new partnership between CCRM and McMaster Innovation Park to build a new biomanufacturing campus in Ontario. To further unlock the sector’s potential, our province is working with partners to develop a Life Sciences Strategy and continues to make targeted investments to grow our ecosystem. There’s lots to look forward to this year!

How is Ontario’s tech/start-up community doing and what is on the horizon for the sector?

Chelsea: Despite challenges brought about by the pandemic, Ontario’s tech and start-up community remain strong heading into 2022. The province boasts over 35,000 high-tech businesses, which employ over 323,000 IT workers. And that’s really just the start.

Aaron: A spirit of innovation runs through the core of Ontario’s start-up community. In 2021, the Conference Board of Canada gave Ontario the only A+ grade for “Entrepreneurial Ambition” in Canada. Ontario was ranked 9th globally for Innovation among 16 selected OECD countries after Switzerland, the U.S., and a handful of European countries.

"This entrepreneurial spirit is evident when you take a look at venture capital investments in Ontario-based companies. Since 2013, 985 companies have received a combined $17.6 billion USD in venture capital. Through Q3 of 2021 alone, Ontario saw 218 deals, with a combined value of $4.8 billion USD."

Chelsea: This entrepreneurial spirit is evident when you take a look at venture capital investments in Ontario-based companies. Since 2013, 985 companies have received a combined $17.6 billion USD in venture capital. Through Q3 of 2021 alone, Ontario saw 218 deals, with a combined value of $4.8 billion USD.

Are there any start-ups our readers should be familiar with?

Aaron: Great question! As we’ve shared, Ontario is home to some phenomenal start-ups. Three that come to mind, that the MAPLE membership may have heard about recently, are 1Password, League, and Anaergia.

1Password, based in Toronto, is a password manager trusted by more than 100,000 businesses. To kickoff 2022 with a bang, 1Password announced that they raised a $620 million USD round, boosting its valuation to $6.8 billion USD. That round represents the largest funding round for a Canadian company.

To close out 2021, League, a Platform-as-a-Service healthcare start-up, became Canada’s newest unicorn after raising a $70 million USD round to push its valuation to $850 million USD.

2021 was a year for exits as well. Burlington-based cleantech company Anaergia completed their VC-backed IPO last summer. In June, Anaergia was listed on the Toronto Stock Exchange (TSX).

Those three really just represent the tip of the iceberg. They’re the one’s making headlines today, but there is a deep bench of Ontario start-ups just behind them looking to make the new headlines of tomorrow.

Which regions/municipalities should our readers keep a close eye on in 2022? Who do you consider the “movers and shakers/up and comers” in the province?

Chelsea: All of them! In all seriousness, Ontario represents such a broad range of opportunity, it really comes down to what a company is looking for.

A tech company looking for talent and R&D partnerships? Check out Ontario’s innovation highway that stretches from Ottawa to Windsor, and includes Toronto and Waterloo. That regional corridor is home to dozens of world-renowned research institutes and represents one of the largest IT clusters in North America.

Food and beverage company looking to expand production capacity? Well, London, in Southwestern Ontario, is considered one of Canada’s best locations for food and beverage processing and is a nationally-recognized test market city. The agri-food sector in London supports 7,000 people across 90+ companies.

Mining operation interested in Canada’s wealth of natural resources? Look no further than Ontario’s north, and communities like Timmins, as just an example. Timmins is known globally as one of the richest mineral producing areas in the world and has an economy largely based on resource extraction. Ontario’s north not only has all of the elements to aid a successful mining venture, the region is also at the heart of the province’s strategy to play a prominent role in the global production of EV batteries.

Chelsea and Aaron, thank you for taking the time to sit down with us, and providing a window into Ontario’s year ahead.

Chelsea: Please consider us a resource – and a free and helpful one! We’re here to help build bridges and make it easier to do business in the province. From confidential services to support companies looking at opening new offices, to promoting great Ontario products, services and expertise, to facilitating international innovation partnerships, we want to hear from you!

Chelsea Peet may be contacted at the Ontario Trade & Investment Office in San Francisco at Chelsea.Peet@international.gc.ca

Aaron Pinto may be contacted at the Ontario Trade & Investment Office in New York at Aaron.Pinto@international.gc.ca

International Business Development at the Consulate General of Canada in New York in 2021

Author: Nigel Neale, Senior Trade Commissioner and Director of Trade & Investment, Consulate General of Canada, New York

Thank you for the opportunity to describe to your readers what the Government of Canada has been doing in support of Canadian businesses during the past year. Despite continuing to address the challenges of COVID-19 during 2021, the International Business Development team at the Canadian Consulate General in New York was able to make considerable progress in advancing Canadian commercial interests in New York, Pennsylvania, New Jersey, Connecticut and Delaware. We brought over 180 high-potential new Canadian business clients to market to connect them with sources of capital for fundraising, investors, mentors, distributors, agents, sales partners and customers. 

We ran four flagship Canadian Technology Accelerator programs in cybersecurity; climate-tech; digital tech and for the first time in retail-tech. We launched two new accelerators in the creative industries (music supervisors, and women in television) delivered in conjunction with our colleagues at the Canadian Consulate General in Los Angeles, and one in ed-tech. Bootcamps were run in cell and gene therapy, women in climate-tech, seed-stage capital raising and AI/ML. We recruited Canadian companies to Finovate and Future of Fintech, DOCNYC (the largest documentary film festival in the US) and A2IM (the American Association of Independent Music) and others.  We brought over 50 VCs, growth stage tech companies and Fortune 500s seeking Canadian solutions for their value chains to participate in Collision 2021 – North America’s fastest-growing tech conference held in Toronto. 

We deepened our involvement as a founding member in the Carbon2Value Initiative to commercialize more decarbonization technologies.  We ran webinars for over 500 participants in Buffalo, Plattsburgh and Rochester to promote the benefits of USMCA – the US-Mexico-Canada Free Trade Agreement - to our border communities, and produced a market guide for Canadian SME businesses on how to penetrate the US market via e-commerce, including promoting Canadian brands at industry events such as theCanadian Flavours Food Festival, Canadian Oyster Fest and New York Fashion Week. 

We are advancing gender equality and increasing the diversity of the Canadian business clients we serve. At the beginning of 2021 we set a minimum target of 50% representation from diversity groups. Over the course of the year, we achieved an average of just under 70% through intentional and deliberate recruitment efforts. 

On investment attraction and expansion, we promoted Canada’s value proposition to Fortune 500 companies and AI-powered tech startups to set up shop and benefit from our exceptional tech talent pool; our Global Skills Strategy – a program to bring in highly skilled workers in as little as two weeks; lower operating costs – often by half; and an unmatched quality of life centred around our policy of multiculturalism. Our participation at the TechDay Founders Summit is one example.  Other examples of traditional firms that benefit from reliable Canadian operations to ensure uninterrupted North American supply chains are GSK, Hershey, Kraft-Heinz, Estee-Lauder, to name a few. NYC tech firms like LiveLike and Fadel are benefitting from Canada’s expertise in fintech and other disruptive technologies and enhancing their profits by locating value-added production and development in Canada.   

In conclusion, it’s a good time to remember our core priority: helping our business clients navigate challenges in order to thrive. 

Do stay in touch with us via our LinkedIn page and our www.canada-ny.com site. 

Economic Snapshots of the Middle Market: Jobless Claims in Canada and the U.S. and Canada's Trade Surplus

The Real Economy

The middle market economy—often overlooked in the wake of large public companies and emerging Wall Street darlings—is the backbone of U.S. economic growth, accounting for the majority of new U.S. jobs and some 40 percent of the nation’s GDP.

#1 - Initial jobless claims tick up but labor market remains tight

By Tuan Nguyen, Ph.D., RSM Economist

New filings for jobless claims rose on a seasonally adjusted basis to 222,000 for the week ending Nov. 27, beating expectations and continuing the overall improvement of the labor market, according to government data released Thursday.

After a sharp drop in the week before Thanksgiving, the new jobless claims—a proxy for layoffs—were only slightly above the 2019 average of 218,000, before the pandemic.

The previous week’s figure was revised down to 194,000—a pandemic low—mostly because of seasonal variations around Thanksgiving week.

Our preferred measure—the 13-week moving average—also dropped, to 291,000 from 301,000, marking the 39th straight week of declines since February.

The significant decline in November points to an improved payroll report from the Bureau of Labor Statistics coming out on Friday.

After a turbulent September because of the impact from the delta variant’s surge and Hurricane Ida, the 13-week moving average has declined at a much faster rate as those headwinds have subsided.

We expect new claims to decline further in the last several weeks of the year as the tightness of the labor market persists. The new omicron variant of the coronavirus, though, is a major risk.

The total number of claims for all programs for the week ending Nov. 13 was 2.3 million, up by 21,564 from the prior week and down from 20.8 million a year ago.

The number of claims for regular state programs led the increase, while claims for pandemic-related programs declined for the same week.

On the state level, largest increases in new claims for the week ending Nov. 20 were in Virginia (up by 12,703) and New Jersey (up by 2,061), while the biggest drops were in California (down by 7,233) and Kentucky (down by 3,910).

The takeaway

Though the emergence of the omicron variant has become a significant wildcard in the economy, we expect filings to remain low in the coming weeks as businesses scramble to find workers and retain those that they have to meet surging demand.

#2 - Canada’s unemployment rate approaches pre-pandemic level

By Dr. Tu Nguyen, Economist and ESG Director, RSM Canada

Canada added 153,700 jobs in November, bringing the unemployment rate down to 6% as it approaches the pre-pandemic level, according to data released by Statistics Canada on Friday.

The report was a sign that Canada’s heated labour market was finally benefiting workers who have been left out of the recovery.

The report was a sign that Canada’s heated labour market was finally benefiting workers who have been left out of the recovery, including those in the goods-producing sector, the long-term unemployed and the underemployed.

In November, the employment rate among core-age women reached 80.7%, the highest ever recorded. The growth occurred mostly in full-time work and occurred across industries.

One reason for the higher participation rate is that greater flexibility for work during the pandemic has enabled more women to be in the workforce as they juggle responsibilities.

This new flexibility comes as the population ages and workers retire, which has only heightened the need for workers. The shift toward working from home and offering employees greater flexibility is most likely here to stay.

Long-term unemployed

The number of Canadians considered long-term unemployed, or those out of work for 27 weeks of more, decreased by 16.2%, the first monthly decline since August. For those unemployed for 52 weeks or more, the decline was even more dramatic, at 23.4%.

Research has shown that the longer a worker stays unemployed, the more difficult it is to find work, so the decrease in long-term unemployment, which has been a major drag in the recovery, is an encouraging sign.

The short-term unemployment rate, which covers those out of work for 26 weeks or fewer, had been steadily declining throughout the year and in November dipped below levels of February 2020, before the pandemic.

The tight labour market is also having an effect on wages. With job vacancies surpassing 1 million, wages are rapidly increasing, a trend that will continue as businesses try to attract and retain talent.

While the labour market has been a bright spot in Canada’s economic recovery, the omicron variant remains a looming threat, threatening to undo the progress made this year.

The takeaway

November’s jobs report is a gift for the Canadian economy as the recovery kicked up a gear. Employment increased across industries, provinces and demographic groups, expanding what had been a concentration in a few sectors like professional services.

Businesses will see increasing shortages in specific skills and a hypercompetitive market for talent, even as the uncertainties regarding the omicron variant remain.

#3 - Canada’s trade surplus grew in October, fueled by autos and energy

By Dr. Tu Nguyen, Economist and ESG Director, RSM Canada

Canada’s merchandise trade surplus widened to CAD $2.1 billion in October—a 10-year high—as exports of motor vehicles and parts as well as energy surged, according to data released by Statistics Canada on Tuesday.

Both exports and imports rose, especially in trading with the United States, primarily because of the automotive industry. October’s figure was an increase from September’s downwardly revised surplus of CAD $1.42 billion.

The automotive industry, which has been affected by supply chain bottlenecks, had a turnaround as exports of motor vehicles and parts rose by 30.8% from September, while imports rose by 5.3%, accounting for most of the growth in total imports.

Although there are signs that the worst of the semiconductor chip shortages might be passing, trade in this sector has fluctuated widely. Exports in October were still much lower than pre-pandemic levels and it will take more time for the industry to fully rebound.

Energy exports reached record highs in October, with crude oil exports rising by 11.6% and coal exports rising by a stunning 62.8%. Strong global energy demand and high energy prices contributed to this trend.

The floods in British Columbia disrupted transportation via ships, rail and highways. Trade in and out of Vancouver, the largest port on Canada’s West Coast, was profoundly affected, particularly with Asian countries.

We expect trade data for November and December to reflect these disruptions across sectors and product categories.

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When and Where to File Patent Applications

Authors: Dan Altman and Vlad Teplitskiy, Partners, Knobbe Martens, Orange County, California

Innovation has driven global society since before the wheel was invented, and is now a critical component of most companies’ success.  The patent system was set up both to incentivize individuals and companies to continue innovation and to reward them for the resulting inventions.  It does so by providing a limited monopoly on the inventive features of what was invented.

North America remains a global center for innovation.  In 2020, out of 388,861 U.S. patent applications filed with the United States Patent and Trademark Office (USPTO), U.S. inventors filed 183,147 and Canadian inventors filed 7914.[1] In other words, roughly half of the patent applications originated in the U.S. or Canada.  However, the USPTO is just one of many patent offices throughout the world.  In general, a patent is only valid in the country (or, in some cases, countries) where the patent office that issued it has responsibility.  With so many patent offices around the world, how does one decide in which offices to file a patent application for any given invention and select the correct timing for the patent filings?

National Security

A good place to start in deciding in which patent office to file is the national security requirements of the country (or countries) where the invention was made or where the inventors are nationals or residents.  The United States requires that a patent application for any invention made in the United States be either filed first in the USPTO or that the subject matter be submitted for a security review and issued a foreign filing license before filing in any other patent office.  Thus, for an invention made entirely in the United States with only U.S. inventors, it becomes relatively straightforward to file first at the USPTO. 

Many times, the national security requirements of several different countries can affect where to file a patent application first.  For example, China has a rule similar to that of the U.S. requiring the first filing to be made in China or that a Chinese foreign filing license be obtained.  India and the United Kingdom have a rule that applies to inventors that reside in the respective country even if they made the invention elsewhere, while other countries apply rules to inventors that are citizens of their country even if they are not resident there.  Since these provisions relate to national security, the consequences of violating them can often be severe.  Thus, a decision of where to first file a patent application involves a careful review of where the invention was made as well as the nationalities and places of residence of the inventors.[2]

Many times the national security provisions of more than one country can come into play.  Consider an invention made by collaborators working in both China and the U.S.  Under this scenario, it is impossible to meet the requirements of both countries by filing first in either of the countries.  Thus, a foreign filing license must first be obtained in one of the countries and then the first filing be made in the other country.  

Many U.S. companies have facilities in Canada and many Canadian companies have facilities in the U.S.  Fortunately, if inventions are made on both sides of the 8893 km border between the two countries, no complications concerning where to file a patent application are caused by the laws in Canada, which lack any provisions requiring a first filing to be made in Canada.  Thus, patent applications for inventions made jointly in the U.S. and Canada can comply with both countries’ laws by filing first at the USPTO.  Nevertheless, it will still be important to note if any inventors are residents or nationals of countries that have provisions pertaining to such inventors, as the provisions of any such countries will also have to be complied with.

Priority

Once a first patent application has been filed, the patent applicant often has to decide in which additional countries to file.  Patent applications are examined for inventiveness over the previous work of others.  Thus, waiting to file patent applications can cause additional work of others to be considered against it.  Fortunately, almost all countries of the world belong to the Paris Convention or have other agreements that allow applicants to claim priority to their first-filed patent application in corresponding applications in other countries.  The claim to priority allows the subsequent applications filed in other countries to be treated as if they were filed on the same date as the first-filed application.

In order to claim priority, the applications filed in other countries must be filed within one year of the earliest patent application that discloses the invention.  A second or subsequent application disclosing the same invention typically cannot serve as the application that starts the one-year clock.[3]  Thus, all applications that claim priority must be filed within one year of the first-filed application.  

As noted above, a patent from any given patent office is only valid in the country or countries where that patent office has responsibility.  Thus, if a patent applicant wished to obtain a patent in every country in the world, that applicant would have to file hundreds of patent applications at an extremely great expense.  As a result, a decision must be made concerning which countries to file any given patent application, and this decision must generally be made within the one-year priority period described above.  

For a Canadian company having a first-filed patent application at Canadian Intellectual Property Office (CIPO), it is generally an easy decision to elect to file an application at the USPTO, as many companies consider U.S. and Canada to be part of a single market, with the U.S. being the far larger component of that market.  U.S. companies also commonly file patent applications at CIPO for the same reason.  Companies in both countries benefit from the synergy obtained by expanding their markets to include both countries.  With the recent adoption of the USMCA to replace NAFTA, filing patent applications in Mexico should also be considered by U.S. and Canadian companies to expand that market even further to include all of the three largest countries of North America.  

Canadian and U.S. companies should also consider filing in other countries outside of North America.  Patents can be valuable not only in countries where there is a market for the products to be sold, but also in countries where the products may be produced or countries where competitors are active.  A balance must be made between the potential value of a patent in each country and the costs for obtaining a patent in the country.  For Canadian and U.S. companies, the patent office outside North America where applications are most-commonly filed would be Europe, which has a single patent office for virtually all the countries of Central and Western Europe.  North American companies also commonly file across the Pacific in Japan, China, South Korea and Taiwan.

Regardless of the countries where the patent application is ultimately filed, all of the applications will be considered as having been filed on the same date due to the ability to claim priority described above.  Despite this, each of the countries has its own patent laws, and the result of examination in each of the countries can be quite different as a result.

Grace Period

One of the main differences in laws between countries is the existence or not of a “grace period” for work of the applicant disclosed to the public prior to the filing date of the first-filed patent application.  For countries that have a grace period, the Applicant’s own work can be excused from counting against the inventiveness of an application if the application is filed within the grace period.  In most countries that have a grace period, the grace period is one year.

Complying with the grace period in each country has different requirements.  Both Canada and the U.S. have grace periods of one year.  In the U.S. as long as a first-filed application is filed anywhere in the world within one year of the disclosure of the inventors’ own work, a patent can still be obtained in the US based on a patent application filed within the priority year from the date of filing of that first-filed application.[4]  Thus, in the U.S. a patent can still be obtained if the inventor discloses an invention to the public on January 15, 2020, files a Canadian application on January 15, 2021 and then files a U.S. application on January 15, 2022.  In contrast, Canada’s law is more restrictive in that a Canadian application must be filed within one year of the date the inventor discloses the invention to the public.[5]  Thus, if an inventor disclosed an invention to the public on January 15, 2020, an application in Canada must be filed by January 15, 2021 in order to obtain a patent.  Such an inventor cannot rely on the priority date of a first-filed application in another country, such as the U.S., for this purpose.  In other words, U.S. companies that wish to claim the grace period in Canada, need to ensure that they actually file in Canada by the end of that grace period while still complying with the national security provisions of the U.S. described above.

The grace period in Canada and U.S. can be automatically applied without formally claiming it.  However, other countries, such as Japan and South Korea, require that a declaration claiming the grace period be made at the time of filing.  

Many countries do not have grace periods of any consequence.  For example, Europe, China and Taiwan are considered “absolute novelty” countries where the grace periods provided by law are so limited that they can almost never be taken advantage of.  

If the only countries in which protection is desired are Canada and the U.S., it can be beneficial to purposely file a first-filed application within the grace period.  However, since patent protection in other countries is often desired and grace periods differ so much from country to country and may not exist at all, it is generally wiser to file a first patent application prior to any disclosure of the invention.  Thus, the main purpose of the grace period is to provide a way forward in those rare instances when a patent application has not been filed when an inventor makes a public disclosure without having considered the need to file a patent application first.

Conclusion

Canadian and U.S. companies have many opportunities to protect their inventions both in North America and elsewhere.  However, careful attention must be paid to national security issues, properly claiming priority and taking advantage of any applicable grace periods.  Good patent counsel is generally required to navigate these complex issues.  Fortunately, such good counsel is available on both sides of the border between the two countries.

For more information on patent strategy and IP law, please visit Knobbe Martens website at www.knobbe.com.

[1] USPTO Patent Technology Monitoring Team, “Patent Counts by Origin and Type, Calendar Year 2020”, available at https://www.uspto.gov/web/offices/ac/ido/oeip/taf/st_co_20.htm (downloaded December 8, 2021).

[2] National security considerations of various countries are summarized at https://www.wipo.int/pct/en/texts/nat_sec.html.

[3] See Paris Convention, Article 4.C.4 (available at https://www.uspto.gov/web/offices/pac/mpep/mpep-9035-appx-p.html).

[4] See 35 U.S.C. § 102(b)(1) (available at https://www.law.cornell.edu/uscode/text/35/102).

[5] See Patent Act (R.S.C., 1985, c. P-4), s. 28.2(1) (available at https://laws-lois.justice.gc.ca/eng/acts/P-4/section-28.2.html).

A Remarkable Year in the Public Markets

The public markets in North America have seen records broken across many metrics this year. In the United States, the number of initial public offerings (IPOs) and financings have hit highs greater than in the last decade. As of mid-October, 434 companies had raised over US$157B through IPOs, compared to 264 IPOs in 2020 that raised a total of US$81B. 

The sector leading the IPO boom was healthcare with 38% of IPOs, followed closely by the tech sector at 31%. 

Probably the biggest story in the U.S. public markets this year has been the significant rise of SPACs. Special Purpose Acquisition Corporations have seen a staggering amount of new SPACs filed, capital raised in these blind pools, and the number of companies that have chosen to go public via a SPAC versus a traditional IPO or even the more recently used Direct Listings. 

What is most relevant to private companies considering going public in the coming year is the number of SPACs still looking for a deal – over 460 SPACs have yet to complete a merger.  

In Canada, records are also being broken on Toronto Stock Exchange (TSX) and its junior market, TSX Venture Exchange (TSXV). YTD September marked the best three quarters across many metrics on TSX especially in the tech sector. 

 KEY HIGHLIGHTS

-       Market cap of TSX and TSXV surpassed C$4 Trillion for the first time

-       Best YTD Sept on TSX & TSXV for capital raised since 2016 at C$43.3B

-       Best YTD Sept in the tech sector at C$11.4B raised; more than any other full year

-       Corporate IPOs were up 533% 

-       IPO Proceeds were up 51% compared to YTD Sept 2020

TSX typically welcomes 20-25 IPOs per year, but as of September 30th, there were already 68 IPOs completed, representing a wide range of sectors and deal sizes. 

One of the highlights of the Canadian market is the number of graduates from TSXV to the senior board, TSX. As of the end of September, 27 companies have graduated to TSX, the same number as the whole year of 2012. Since 2000, over 700 companies that started on TSXV have graduated to TSX. 32% of all current corporate TSX companies are grads and 20% of S&P/TSX Composite Index Constituents are grads.

For U.S. companies listed on TSX/V:

-       Market Cap - U.S. companies listed on TSX & TSXV reached an all-time high combined market cap (C$176B); up 58% in the last 10 years

-       New Listings - 100% year-over-year increase in new U.S. listings; best YTD Sept for number of new listings on TSX/TSXV since 2012

-       Capital Raised - U.S. issuers raised $1.0B in equity capital YTD September; $18.7B in capital raised over the past 10 years

So what does this all mean for U.S. companies looking for growth capital? There is a lot of money waiting to be deployed and a lot of public companies that have raised capital that are now looking for acquisition opportunities. 

TSX and TSXV offer U.S. companies a unique listing and financing option to achieve their long-term growth plans. The Canadian capital markets and “public venture capital” can be used as an alternative to traditional private capital options while taking advantage of the benefits of being a public company. These benefits can include a path to liquidity for investors and employees and acquisition currency to fuel the company’s growth.

Listing on TSX or TSXV and eventually dual listing on a U.S. exchange can be an effective strategy for managed growth, while leveraging the liquidity of both the Canadian and U.S. marketplaces. 

The recently published Guide to Listing for US Companies provides an overview of the opportunity, considerations and requirements to list on Canada’s premier equity markets.  

For more information, contact Delilah Panio, VP, US Capital Formation, at Delilah.panio@tmx.com.

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