The connection between the United States and Canada is undeniably strong and what happens in one country inevitably impacts the other. From the pandemic to politics – 2020 was a year of extraordinary challenges and its effects were felt globally, especially for small to medium sized business owners (SMEs). In September, we commissioned the American Express SME Recovery Survey to discover the pain points and challenges Canadian SMEs faced as a result of the pandemic. Our survey found that Canadian SMEs are weary about the future of Canadian and global economies, with over half (54%) of SMEs feeling pessimistic about the future of the Canadian economy and 60% feeling pessimistic about the global economy[1].
Since the start of the pandemic, SMEs acted quickly and strategically to keep their doors open and will continue to implement these successful tactics in the future. To dig deeper on this topic, we sat down with three Canadian experts to get their take on the relationship between the United States and Canada and how they adapted their business models and strategies during a time of increased uncertainty.
- Chantal Hébert, National Affairs Columnist for the Toronto Star and guest Columnist for L'actualité
- Martin Lussier, Vice President, Finance and Operations at Tremcar Inc. – a manufacturer of tank trailers and tank trucks for the North American market
- Constantino Malatesta, Vice President and Corporate Controller at CAE Inc. – a high-tech company providing training and operational support solutions to make the world safer in the civil aviation, defence and security, and healthcare industries.
Chantal Hebert kicked off the webinar by providing an overview of the relationship between United States and Canada, and the current political climate. Chantal highlighted three topics that have or will dominate the news cycle in Canada including:
1. The relationship between Canada and the United States, the impact of the new administration on NAFTA negotiations, and the fight against climate change
2. The upcoming Canadian federal election and how the pandemic has provided opposing parties with a good opportunity to swoop in and instill new hope for Canadians
3. The upcoming announcement on the Canadian federal budget, including niche items such as infrastructure, health funding, long-term care and more, and how it is expected to be the largest budget yet
Overall, Chantal highlighted how the pandemic has impacted every aspect of Canadians’ lives both at the personal and federal level. Throughout the webinar, she provides valuable insight into how the government will impact Canadian business owners as they seek to grow their businesses and recover from this past year.
After Chantal’s overview, our three experts dug into some of the strategies they employed in 2020 and discussed how they are rethinking their business this year. Each business owner also provided their perspective on the impact of the global and Canadian economy on the Canadian SME community.
Q. How have you managed to get through this crisis and grow?
Constantino Malatesta, Vice President and Corporate Controller at CAE: The aeronautics industry was hit hard by the pandemic, which directly impacted our workers. To support CAE's 10,000 employees, we set up a committee of leaders from around the world that focuses on three things - protecting the health of our employees, strategies for liquidity and reducing expenses, and strategic and tactical decisions centred around coping in a post-Covid environment. The committee also developed a system where employees can enter their questions and ideas digitally about the business. In addition, we have committed to finding $50 million in annual cost savings so that we can continue to move forward.
Q. Martin, in terms of strategic planning, how did you manage in your role as VP of Finance?
Martin Lussier, Vice President, Finance and Operations at Tremcar Inc.: As a manufacturer of trailers and tanks for liquid and dry products, we have many different niche markets. Because of this exposure, we knew that some markets were in danger even before the pandemic hit. This knowledge put our company in a state of reflection, where we began to think about positioning and the actions that would need to be taken during these uncertain times. Our president at Tremcar has experience with crisis management, so we were always looking at our expenses, structures, and growth and non-growth niches.
In recent years, with the changes in the American administration and the setbacks in Canada, leaders have been forced to adapt their plans practically every week. This year there has been the implementation of tariffs, the global pandemic, the shifting and disruption of supply chains and exchange rates – to name a few! In times of crisis, it is especially important to have a leader that can plan, manage, and reassure teams in order to avoid panic, so we set up teams that specifically focus on coaching and leadership. Understanding that there was a lot of uncertainty about the future in March, we focused on listening, maintaining open communication, and actively sharing updates and priorities with our employees.
Q. How have you been able to move forward with innovative projects, bring the team together and manage an organizational culture in a virtual world?
Martin Lussier, Vice President, Finance and Operations at Tremcar Inc.: The most crucial tactic in times of crisis is communication. Working from home generated a lot of unknowns and we wanted to ensure our staff felt supported through this transition. Overall, our priority is to actively communicate and take it one step forward at a time.
Constantino Malatesta, Vice President and Corporate Controller at CAE: For a company to be successful, it is important to be transparent with the employees and communicate at all levels, especially for executives. Taking the time to talk to employees, listen to their questions and concerns, and provide thoughtful responses has helped us build a strong relationship between leadership and employees at our company. We are committed to transparency and open communication to ensure that all employees understand the thought process behind difficult decisions. By showcasing the strategy behind these decisions, employees feel included in the process, helping us emerge from the pandemic even stronger.
Q: Martin, you mentioned the involvement and leadership among the staff, please talk about that model and how it came to life.
Martin Lussier, Vice President, Finance and Operations at Tremcar Inc.: As mentioned earlier, we set up a digital system that welcomed the ideas and questions of our employees. Since the onset of the pandemic, I have also personally assisted in the opening our factory in Iberville every morning. While respecting Covid-19 measures, I meet with workers regularly to chat about ongoing activities and priorities for the day. Within our digital system, we can provide support, supervision, and communication to ensure that everyone receives answers to their questions and employees’ ideas are addressed efficiently. By implementing this system, all levels have been impacted positively, from production managers to supervisors and beyond. By getting more involved with our employees, we have been able to foster a positive work environment that will ultimately lead to our business’ success.
Q. Constantino, how did you get involved at a leadership level?
Constantino Malatesta, Vice President and Corporate Controller at CAE: All levels had to rethink about how we work as we transitioned to a remote work environment, and this is an area I was specifically focused on. We were astonished at the level of productivity and efficiency while working from home and believe this is in large part due to the commitment of our incredible employees. With today’s technology we can do everything remotely, and as we move forward, technology is going to become even more important. Currently, we are thinking about the structure of our offices and how we can provide more flexibility to work from home in the future. While we believe in the importance of social interaction and in-person collaboration for our employees, we also understand the growing demand for flexibility. This hybrid solution will become the new norm for many businesses.
Q: Constantino, tell us about your project with the Canadian Government.
Constantino Malatesta, Vice President and Corporate Controller at CAE: CAE responded to a call from the Government of Canada to support their fight against the Covid-19 crisis. It usually takes time to produce ventilators and introduce new medical products. However, in less than nine months, CAE was able to develop and manufacture ventilators in Canada that would save lives both here and around the world. This project was extremely rewarding because we were able to help in a tangible way, and it allowed us to keep more than 500 of our employees at work during production, while also supporting our suppliers with 3,000 jobs. I am very proud of the team and how we worked together with our partners to complete this important project.
Q: How do you strike a balance between quick tactics and overarching strategy to ensure you are moving in the right direction overall. And, was there a repositioning of the strategy at the start of the pandemic?
Constantino Malatesta, Vice President and Corporate Controller at CAE: I think both tactics and strategies must be executed at the same time. At the beginning of a crisis, implementing tactics quickly is very important for reactive actions like cost management. Once you have a better idea of what is needed, you can look at the overarching strategy and become more proactive. It is important for leaders to ask themselves, what can we expect from this situation? What is our ultimate goal for the future? Is it that we will come out stronger and more effective? Keeping an objective in mind for future success will lead a company through uncertainty.
Currently, we are focused on reviewing activities in airports and at borders as restrictions change almost daily. There is a lot happening in our industry and we continue to keep a close pulse on what our partners and customers are doing so that we can make informed decisions on how to proceed in the future. We’ve had to react quickly and be in constant communication to meet the needs of our clients, but the vaccine promises us a better future, especially in civil aviation.
Martin Lussier, Vice President, Finance and Operations at Tremcar Inc.: I firmly believe that at the beginning of a crisis, you have to focus on tactics instead of the strategy. To get out of a crisis, you need working capital, so the first step is to manage money by looking at accounts receivable, payable, and calling your banking institutions. The next tactic is to get in touch with your suppliers and manage your budgets with them. It is vital to be overly communicative about what you need to stay organized and secure necessary assets. Lastly, you must manage your priorities – this means focusing on necessary tactics first and only addressing the strategy once the initial shock of a crisis has been dealt with.
Chantal Hébert, National Affairs Columnist for the Toronto Star and guest Columnist for L'actualité: In terms of fiscal management, one cannot only analyze the scope of an event. For the government, we are going to see the biggest fiscal break between the conversation before the pandemic and the one that is going to start soon. There was no playbook for managing during a pandemic or exiting a crisis for businesses, Governments, or civilians.
The pandemic is also not an earthquake that hit Canada, so we can't count on other countries to help us. Those who are more resilient will likely have to remain resilient as Governments focus on helping those who have lost everything because of this crisis. So, how will the Canadian parties in power activate all this? That’s a big question mark, but one thing we know for sure is that this is will be an unprecedented period in terms of the economic management of governments.
Conclusion
The instability of both the Canadian and global economy has placed undue stress on SMEs who have had to adapt to deal with temporary closures, physical distancing measures, restrictions on international business and strains on supplier relations. But through it all, SMEs have remained resilient since the start of the pandemic, as they acted quickly and strategically to stay afloat. Many Canadian SMEs took immediate action to adjust their business models for the changing business climate, reducing operating costs, developing cost-savings programs, and implementing modernization processes through technology. Like our three experts, SMEs have been innovative and continue to look for new ways to bring in working capital.
DISCLAIMER:
This article is intended for general informational purposes only and does not constitute legal advice or an opinion on any issue. The views and opinions expressed in this article are solely those of the individuals involved. It should not be regarded as comprehensive or a substitute for professional advice.
[1] Source: American Express Small Business Recovery Research, June 2020