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A tidal wave of business ownership change is coming, and many business owners should be preparing now, urges Carson O’Neill, Managing Principal of Rincroft Inc., a Waterloo Region-based company which facilitates the sale of small and medium-sized businesses.

His firm has completed the sale of more than 50 family-owned businesses, many of them in Waterloo Region.

Carson most recently penned a book for business owners entitled The Road to Enterprise Value.

He confirms that most owners of Canada’s 1.2 million SMEs are now in their 50s and 60s and looking to sell their businesses over the next five years to fund their retirement.

“The owners are capable in running the operation. They’re down to earth, salt of the earth people and smart,” says Carson. “But most have never been down this path before. For many of them, it’s unchartered water with a lot of money on the table.”

Carson adds that the process is complicated and can last six to nine months.

“There are many issues above and beyond agreement on purchase price. Who’s going to pick up the employees? What about the future of the manufacturing facility? What about the leases? What about the intellectual property? It can be complex and multi-dimensional.”

As entrepreneurs, he says business owners often are often inclined do everything themselves which runs the risk of them receiving much less than what their business is worth, in turn resulting in a less comfortable ‘nest egg’ for retirement.

“The buyers are typically aggressive and want to get the price down,” says Carson. “They’re professional buyers, many of whom who’ve bought many businesses before, so they want to work with a business owner who unfamiliar with the process.”

To better understand the process of selling a business and some of the factors that drive business owners to sell, we discussed several questions:

Q. What would you recommend be the first steps a business owner should take when it comes to selling?

Carson: Delay if you possibly can and get the business in good shape. The business owner should step back, assess the state of the operation, and take steps to strengthen it any way possible. They should not be in a hurry to go to market; our company sometimes takes months working with owners to build the business up before the divestiture process even begins. The best defense is a good offense. Don’t go into this defensively, thinking ‘oh, we have to retire now’. You need to make sure the business is fundamentally strong to secure top dollar.

Q. What are some of the misconceptions a business owner may have when it comes to the process of selling?

Carson: Having never been through the process before, many owners think selling a business is like selling a house. The process is far more complicated and takes much longer. The valuation is far more complex, the information package is far more extensive and there are multiple conditions which need to be met before the funds are wired. Is there inherent value in the business? Does the business have unique capabilities so it can be sold? Where is the ‘secret sauce’?

Q. Other than impending retirement, what are some other reasons a business owner may decide to sell?

Carson: There are usually three other reasons: health problems with one of the owners; shareholders issues with at least one shareholder in need of cash; or the business has plateaued and is going south and that is never a good time to sell a business. Other reasons can include major players are entering the market with vast resources to spend to build market share and the owners are justifiably concerned they will have difficulty competing. They may not yet have reached retirement age, but they are concerned that the value of the business may well go down in the years ahead, so they are better off to sell now.

There is also the possibility of a pre-emptive offer. It is not uncommon for a buyer to approach an owner to buy even if the business is not being sold. This happens with very strong businesses. Sometimes millions are put forth, well over the assessed value. Owners may not have ‘planned’ to sell but many will seriously consider if the price is right.

Finally, the next generation has made it clear they have no interest in the family business. The owners may be in their late-40s with the second generation in their early-20s but that serves as a valuable wake-up call that it is inevitable the business will change ownership. With the emergence of the digital economy, at an early age, many in the next generation have absolutely no interest in ever taking ownership of the established family business.

Q. How has the pandemic affected the sale of businesses?

Carson: Not really. In the early months of the virus there was a period of adjustment, but people realized there was very little need to meet to complete the transaction. Our business did not miss a beat; actually, it got stronger. The change in ownership in Canada will continue relatively unaffected by the ebb and flow of the economy.

The reality is many owners have too much money locked in their business – they usually need it for a comfortable retirement. That has remained the primary reason why they sell, whether the pandemic is here or not. Canadian business owners are getting older. You can’t stop ‘Father Time’.

Q. How has the process of selling a business changed?

Carson: It is now more complicated due, in part because due diligence has become much more rigorous. We live in an age of increasing importance of transparency and full disclosure. No stone will be left unturned. Buyers will look at everything.

Did someone slip on the ice outside your business? What insecticides do you use on the grass and plants? Do you have an alleged harassment situation happening? If one is pending, it must be dealt with because the buyer doesn’t want any liabilities and will walk away. Due diligence and purchase agreements alone can now take three months.

Terms like ‘The Great Resignation’, ‘quiet quitting, ‘ghosting’ and ‘grey wave’, have become commonplace to describe trends creating upheaval for employers in their quest to attract and retain workers.

But finding a solution to Ontario’s job shortages will require a multi-pronged approach consisting of unique ideas that take into consideration the diversity of labour needs among various sectors.

In effort to find these potential ideas, the Cambridge Chamber recently brought together a group of business and community leaders – all Members - to discuss their concerns via our MasterMind Series.

“Our MasterMind sessions are a great way to get feedback on particular issues that can assist us in developing policies that we can advocate for change at the provincial and federal levels of government which in turn will benefit businesses,” says Cambridge Chamber of Commerce President and CEO Greg Durocher.

Changes to the immigration system was just one of several areas the group touched upon that would require legislative changes at both the provincial and federal levels. Others included a discussion about the need for potential curriculum changes and the costs surrounding WHMIS training.

This discussion inspired the Chamber to develop several recommendations in a draft policy it will present for approval at the Ontario of Chamber of Commerce’s AGM in April. Additional recommendations with a federal focus may be developed for another policy which the Chamber will present next fall at the Canadian Chamber of Commerce AGM.

If approved, these policies are then included in the advocacy ‘playbooks’ of both organizations as they lobby the government for changes that will benefit businesses.

Labour shortages remain a big concern

While the pandemic is often identified as the catalyst behind Canada’s continued employment issues, many experts believe our labour force growth rate has been trending downward since 2000 and has been exacerbated by the arrival of COVID-19.

In fact, according to Statistics Canada, in 2021 one in five Canadian workers were between the age of 55 to 64 – representing an all-time high of baby boomers (those born between 1946 and 1964). This translates into 1.4 million Canadians between 2016 to 2021 who are 55 or older and looking towards retirement.

Adding to this dilemma of a shrinking workforce, according to StatsCan, recruiting skilled workers was expected to be an obstacle for the first quarter of 2022 for 39.9% (approximately two-fifths) of all businesses.

The effects may be reflected in the results of an annual labour survey conducted in 2022 by the Canadian Manufacturers and Exporters’ (CME) of 563 manufacturers in 17 industries nationwide which outlined the impact labour shortages were having by indicating a nearly $13 billion loss in Canada’s economy over the course of a year.

While a job surge at the end of 2022 which saw the unemployment rate drop to 5% in December compared to 5.1% in November was welcomed news, StatsCan says a hike in illness-rated absences resulted in limited worker output. As well, while StatsCan says Canada’s employment rate increased to 61.8% in December, compared to 61.5% the month before, the projected trend shows a drop to 60.9% in 2024 – with the potential to rebound and hit 62.2% in 2025.

The effect these fluctuations will have as employers continue to seek employees to fill the nearly one million job vacancies in Canada has yet to be determined, considering the results of a recent poll conducted by the recruitment firm Robert Half indicating half of Canadian workers are planning to seek new jobs in 2023 – nearly double the amount from a year ago. That poll, conducted this past fall from among 1,100 workers from multiple sectors, showed that 50% of respondents would be seeking new employment in the next six months (up from 31% six months ago). The top reasons for this shift not only include higher salaries, better benefits, and perks, but greater flexibility to decide when and where they work.

Resources needed to improve immigration system

As current and potential employees weigh their options and re-valuate their priorities and goals when it pertains to employment, Canada continues its concentrated effort to reach its immigration target of 1.4 million in three years to fill these widening labour gaps.

While an influx of immigrants is welcomed news in hopes of easing labour shortages, the need to ensure resources are available to serve this growing population is imperative. Besides an adequate supply of housing, language training is just as important to provide them with a basic tool they need to enter the workforce even faster.

Providing necessary resources to assist newcomers was an issue raised during our MasterMind session, as well as extending the current hourly work limit permanently for international students. As well, it was suggested policy changes are needed when it comes ensuring foreign workers who do not hold management positions could bring their families to Canada more easily.

Recommendations going to OCC

The policy - entitled Opening Job Markets for Employers and Employees and co-sponsored by our colleagues at the Greater Kitchener Waterloo Chamber of Commerce – touches on several areas.

The Chamber has recommended the OCC urge the Ontario Government to:

1. Develop all potential partnerships within local municipalities and community organizations to ensure that language training is made available for new immigrants.
2. Allow those on ODSP (Ontario Disability Support Program) who can work full time to do so without risking loss of their provincially funded benefits (i.e., prescribed medications) if their employer does not provide those services.
3. Investigate a form of remuneration (i.e., tax credit) for employers when it comes to providing provincially regulated training, such as WHMIS, and their associated costs.

It has become an all too familiar scenario for many small businesses: a potential employee doesn’t show up for the interview or a new employee, perhaps after a single day or a few weeks, suddenly disappears, never to be heard from again.

For businesses already struggling with labour shortages, the phenomenon of ‘ghosting’ has grown into a real challenge as our economy continues to rebuild.

“The last time we checked, we had about 30% participation in live interviews,” says Mike Black, owner/operator of Valet Car Wash in Cambridge and eight other locations. “I’m also finding that many people go onto Indeed and apply to dozens of job postings and they have no idea why you are even contacting them because they have so many irons in the fire and are just picking and choosing.”

He’s not alone in this regard. According to a survey conducted by the Canadian Federation of Independent Business (CFIB), 37% of small business owners who responded said they have had potential hires suddenly disappear without explanation, while one out of three who’ve hired someone during the last year either had that employee not show up their first day or had them stop coming in shortly after being hired.

While salary is a clear motivator for many job seekers, Mike also believes there has been a cultural ‘shift’ as opposed to just an economic one in terms of how people currently look for work.

“There almost seems to be a complete lack of courtesy and respect for others,” he says, noting the adage ‘never burn a bridge’ no longer seems to apply.

Janice McVey, Manager Partner at the Dean Group which specializes in employment recruitment, says the fact there are so many jobs available and that accountability no longer seems to be there when it comes to referencing, are a few of the key factors.

“It used to be that having a good job reference was important and not having one used to be a real impediment,” she says. “Now, again with unemployment so low and good people hard to find, companies are lowering the bar. The job candidate understands that lack of investment from the client’s perspective, so it becomes a bit of a two-way street.”

Janice says conducting a short Zoom interview may not necessarily win over a potential employee and make them feel invested enough to sign on.  However, she acknowledges that most companies also no longer have the luxury due to staff shortages to properly acclimate a new employee –spending additional time on training or introducing them to all their co-workers - because they need them to start working immediately.

“As a result of tightening up the interview process, they actually lose that ability to truly engage somebody in the role and therefore they can lose them,” says Janice, noting ‘A list’ companies that offer higher salaries and benefits tend to have fewer ghosting issues. “I think what it boils down to is there are too many options out there and therefore people do not worry about not finding a job when they need one.”

To help combat this, she encourages her clients to really promote why a person should want to work for them.

“You have to make sure what you’ve got to offer is what the candidate is really looking for. You as an employer, have to be clear on why people want to work for your organization,” says Janice. “Because now, they’re interviewing you more than you’re interviewing them.”

And if the candidate accepts the job but there is a concern they could soon be looking elsewhere, she recommends reminding them why they accepted the job in the first place.

“What was their motivation; if money was the reason, you’re never going to keep those people because they’re going to go to the next guy who pays them more,” says Janice. “I think you’ve got to make sure you’re lining up what it is you’ve got to offer with what it is an individual is looking for.”

Mike agrees noting potential employees are paying much closer attention to a company’s core values and how it projects itself, especially online.

“You are definitely selling yourself more today,” he says, adding that communication is vital, especially during the initial interview process and explains how his company keeps in close touch with a potential employee once contact has been made.

“We stay in constant touch with that candidate, reminding them about the interview and confirming the date and time,” says Mike, adding they have had great success with video interviews which can also lead to an in-person meeting depending on the position they’re trying to fill.

Also, he says that close communication continues for the first few months after a new person has been hired.

“You really need to build a relationship that makes them feel welcomed and appreciated, and make sure they have everything they need,” says Mike. “You also have to be aware of how your employees are interacting with your new hires because they can play a major factor on whether they will stay or leave. It only takes a couple of bad apples to taint someone.”

Janice agrees, explaining leveraging your internal network can help an organization retain new employees.

“Your best salespeople as a good organization are your current employees,” she says, adding the pandemic has made the work of HR departments even harder. “I’m afraid the downside is they haven’t been able to do some of things that helped with engagement of candidates like they used to.”

When it comes to recruitment, Mike has purposely entrusted that responsibility to someone else in his organization.

“If it’s not something you’re comfortable with, you really have to delegate it to someone who is,” he says, adding each January his company also does an analysis of its turnover rate during the previous year. “We compare it with previous years to see if we’re getting better or worse. If we’re getting worse, then we really need to look at why and look at solutions as to why that rate when up.”

Employment turnover at a glance:

• More than one-third of Canadian companies (35%) say employee turnover has increased compared to last year, a significant rise from the nearly a quarter (24%) who said the same thing in 2021.
• According to the survey, employee turnover costs companies an average of over $41,000 each year (including the cost to rehire, lost productivity and more). Those costs are even higher for some employers, with more than 1 in 10 hiring managers (16%) reporting $100,000 or more per year in turnover expenses.
• For companies with increased turnover this year, the main causes identified include better pay and/or benefits offered elsewhere (36%), employees resigning (35%), employees feeling overworked (33%), retirements (30%), increased workplace demands (29%) and better perks elsewhere such as summer Fridays and unlimited vacation days (28%).
• Two-thirds of companies agree that employee turnover places a heavy burden on existing employees (64%). This is especially the case with large employers with 100 or more employees (75%) compared to small businesses with fewer than 10 employees (50%). With the added complexity of the current labour shortage, companies are having to lean heavily on their current employees.

•    Info provided by The Harris Poll commissioned by Express Employment Professionals

The living wage in Waterloo Region has increased to $19.95 an hour, according to the latest report from the Ontario Living Wage Network, which represents an increase of $2.75 from 2021.

But what impact this hike has on businesses that are certified living wage employers, or those considering a certification, continues to be weighed.

“It depends on the nature of the business,” says Jason Dean, Assistant Professor of Economics at King’s University College at Western, who also teaches at Wilfrid Laurier University, and notes that maximizing profits is the key focus of any business. “Any economist would tell you that profit is good in the sense it ensures as a society that our scarce resources are used efficiently, so without profit, we would not have that.”

However, Jason says increasing wages can be done in a way that it can boost the bottom line of a business.

“In principle, if you do it right, it can be a benefit to business,” he says.

Sabrina McGregor, Branch Manager, YNCU in Cambridge, agrees.

“By providing a living a wage, we’re helping reduce stress as many have struggled with increased costs,” she says. “Our employees are very important to us; we want to make sure they have the tools to thrive inside and outside of work.”

YNCU is one of about a dozen businesses in Cambridge that are certified with the Ontario Living Wage Network, which charges annually between $100 to $1,000 depending on the size of the private sector business. (Lower rates apply for public sector businesses and non-profits).

“We want all of our workers to feel empowered by their employer so they can flourish in our communities,” says Sabrina, noting taking this step helps improve health and morale within the workplace.

Stephanie Soulis, founder, and CEO of Little Mushroom Catering, which has provided a living wage to employees since 2017, says it’s something that has always fit nicely within her business plan.

“When we started out, we knew we wanted to be a socially responsible business in that paying a living wage makes sense. It fits our culture,” she says, adding she does understand why businesses with many part time workers would find it hard to justify an hourly rate of $19.95. “But I’m also one of those businesses. I have a lot of 18-year-olds who work for me and are living at home with their parents, and they still need to pay car insurance and try to save up money so they can move out.”

Sabrina says the minimum wage is not a living wage and providing one can help companies save on things like vacant positions, training, and recruitment.

“It should be helping with things like retention and talent attraction. We’d like to think it does but there is definitely a labour war going on,” says Stephanie, noting more restaurants and event companies are now paying higher wages. “In the last four or five months we’ve noticed a big shift. But even with the minimum wage being $15.50 and living wage now $19.95, there’s still that middle ground where other restaurants and event companies are going to pay a bit more than minimum wage – say around $17 – so we still have a bit of that leading edge advantage.”

As well as attracting more talent, she says being part of a growing network of businesses has resulted in her company being sought ought by others, both in and outside of the network.

“We have many companies, especially non-profits, who want to work with us because we are a living wage employer. It’s not just for talent attraction, but client attraction as well,” she says, adding that education is key before any business decides to become a certified living wage employer. “It’s about weighing the pros and the cons.”

Breaking it down

What is a living wage?

“There is no universal definition. It is essentially a poverty line with specific characteristics,” says Jason. “Generally, a living wage is the hourly wage that reflects what people would need to earn to cover the actual costs of living in their particular area. A popular definition: A living wage is a socially acceptable level of income that provides adequate coverage for necessities such as food, shelter, child services, and healthcare. The living wage standard allows for no more than 30% to be spent on rent or a mortgage and is sufficiently higher than the poverty level.”

Why are businesses hesitant about offering a living wage?

“Businesses exist solely to make profit. Which can be a good thing as this is good for society as a whole because it ensures our scarce resources (labour, land, natural resources etc.) are used efficiently which is translates into a higher standard of living,” says Jason. “Many business owners do not believe their goal is to alleviate poverty and would suggest that this is the role of the government. Moreover, most businesses that pay a non-living wage (such as the minimum wage) have narrow margins and probably would not be able to pay a living wage even if they wanted to.”

Can increasing the minimum wage to a living wage help alleviate poverty?

“Likely not,” says Jason. “It is also important to point out the following statistics from a Fraser Institute Study: 8.8% of all workers earn the minimum wage; 92.3% of minimum wage earners live in households that are above the LICO (Low Income Cutoff); most minimum wage workers are not primary breadwinners: and 53% of all minimum wage workers are between the ages of 15 and 24.”

What advice can you offer businesses who are considering about taking this step?

“It can be profitable to pay higher wages in an effort to boost productivity and reduce turnover,” says Jason. “Efficiency wages: refer to employers paying higher than the minimum wage to retain skilled workers, increase productivity, or ensure loyalty.”

The weather may be colder, but things are heating up fast when it comes to the winter tourism season in Waterloo Region.

In fact, tourism spending in Canada in general is expected to recover quicker than anticipated according to Destination Canada’s latest tourism outlook which is predicting a return to 2019 levels by 2024, up from 2025 as predicted last spring. As well, the report indicates Canada’s tourism sector could generate more than $142 billion by 2030 which represents a 35% growth over the next decade.

This doesn’t come as a surprise to Explore Waterloo Region CEO Michele Saran, noting that domestic travel has recovered much quicker than international visits.

“When you’re talking about Waterloo Region, keeping in mind we receive 96% of our visitations from the GTA, we expect to be fully recovered here to 2019 levels by 2023,” she says. “In fact, we’re almost there now.”

Michele credits this local rebound not only on a growing pent-up demand for travel opportunities following pandemic lockdowns and restrictions, but the fact the region has so much to offer.

“When you talk about the winter season, in Waterloo Region we always do quite well,” she says. “Interestingly, I’ve never seen a destination that doesn’t take a hit at this time of year except for us, and Christmas really seems to be our ‘thing’.”

Michele credits the numerous holiday festivals and activities for providing a major boost to our local tourism and hospitality sector, including Cambridge’s ‘Winterfest’ which offers numerous events and displays until the end of the month, Kitchener’s recent ‘Christkindl Market’ and KWFamous ‘Holiday Pop-Shoppe’, as well as Bingemans’ ‘Jingle Bell Rock’ and ‘Gift of Lights’ events.

“Everybody (tourism operators) seems very positive about this season,” she says. “And we’ve been doing our Road Trip campaign for the last few months on social media, and we’ve been talking about winter and amplifying all the fabulous things you can do within an easy drive of our target market.”

Besides Christmas activities, Michele says Waterloo Region is loaded with a variety of winter attractions such as Chicopee which should be welcoming skiers and tubers soon, as well Shades Mills Conservation Area in Cambridge for walking and cross-country skiing.

As well, Toyota Motor Manufacturing Canada has once again started its plant tours, which provide an inside look at its Cambridge facility via a motorized tram.

“Also, St. Jacobs and Elmira are always beautiful and magical places to visit in the winter,” she says, adding Explore Waterloo Region has been encouraging people to utilize the Ontario Staycation Tax Credit. 

The credit, which expires at the end of the month, allows Ontario residents to claim 20% of their eligible 2022 accommodation (cottage, hotel, or campground) expenses up to $1,000 as an individual or $2,000 if you spouse, common-law partner, or children, to get back up to $200 as an individual or $400 as a family.

“We’re actually lobbying as an industry to keep the tax credit in place for next year as well,” says Michele. “As you know, we were the first industry hit and the hardest hit and the last to recover, so we would love to keep this value added as part of our marketing arsenal.”

In terms of any potential threat from what has been dubbed as the ‘tripledemic’ (Flu, RSV and COVID-19), she remains optimistic that local tourism operators are prepared.

“I think everyone in the tourism industry is really good at listening to public health recommendations, and because our industry was the first hit, we’ve had to create all different types of scenarios about how to open safely and serve the public,” says Michele. “We’ve become really good at it and have a lot of practice.”

Visit Explore Waterloo Region to learn more.

A few things to check out:

• Cambridge Winterfest – runs until Dec. 31 and features light installations and a variety of events in all three downtown cores.
• Bingemans - Jingle Bell Rock, runs until Jan. 7 and outdoor light displays, surrounding a 40-foot dancing tree illumination. Gift of Lights runs until Dec. 31. Drive through holiday light display featuring over 300 animated and static light displays.
• KWFamous Holiday Pop-Shoppe - Until Dec. 30 featuring more than 80 local makers and creators taking part at shop located across from Kitchener City Hall.
• Jakobstettel – Celebrates 170 Years of St. Jacobs, featuring a series of events until Dec. 18.
• The City of Waterloo hosts  Winterloo on Jan 28, 2023
• Toyota Plant Tour – a 90-minute tour of Toyota Motor Manufacturing Canada’s Cambridge facility. Tours currently run Monday to Wednesday.
• Chicopee 

*  With files from the Toronto Star    

Quiet quitting, thanks to viral posts on social media, has become a term very familiar in workplaces worldwide.

It describes the phenomenon of employees who no longer go above and beyond by doing only what is expected in effort to maintain jobs that may no longer interest or inspire them.

This disengagement from work has grown exponentially since the pandemic. In fact, the 2022 State of the Global Workplace report from Gallup shows only 21% of employees are engaged at work.

“We’ve come through such a crisis over the last couple of years. To some extent, I think we’re over it now, but it has forced people to make different decisions about work, especially if they were burnt out already,” says Frank Newman, CEO of Newman Human Resources Consulting, who will explore quiet quitting at a Cambridge Chamber of Commerce webinar Dec. 1 entitled Is Your Team Quietly Quitting?

He will not only touch on some of the top reasons why employees quietly quit as well as the warning signs but provide insight on how employers can alter their work environment so they can not only attract but, more importantly, retain employees.

“You want to make sure you create the best work environment as possible,” says Frank, acknowledging the existence of an “employees’ market” due to labour shortages.  “That really means taking a very critical look at your work environment. Do you know what people need? Is it benefits? Is it better management? This is the ideal time to do an employee survey or workplace assessment to provide you with some sort of tool you can use to get a fix in terms of what are you going to fix first.”

He says this process may not prove to be a comfortable experience for some workplaces, however, insists this information can go a long way in assisting an organization set benchmarks regarding branding, image or even compensation.

“There are so many changes happening right now and if you don’t understand where you’re going or where you’re at, it’s pretty hard to make any progress,” says Frank.

He also recommends employers conduct exit interviews, formally or informally, to get a sense of why an employee has decided to leave.

“Make sure you understand what people are feeling. Also, spend some time with your newest employees and ask them what attracted them to your organization.”

Frank says in the age of social media, it’s important to encourage people who leave to remain an ambassador for the organization adding that bad reviews tend to get more traction than good ones.

“Organizations need to think about that as they manage those who are quietly quitting and those who suddenly walk out the door,” he says. “I always encourage my clients to search various job boards to see what’s being said about them.”

Frank admits it’s a tough time to be a manager right now, noting that employees have become much more critical on how their companies are managed than they were in the past.

“People looking for work have so many options out there now, and if you’re a hiring manager, it’s putting more pressure on management to get work done with less resources,” he says, noting the difficulty this causes employees who are now required to pick up the slack due to staffing shortages.

However, Frank says he’s optimistic as the economy continues to readjust following the pandemic there will be less quiet quitting.

“As companies get smarter in managing their businesses and people, I think you’ll see less of that," he says.

Work Trends Facts:

• Burnout is a big risk in the workplace, especially amongst younger Gen Z professionals aged in their 20s, research shows. A survey of 30,000 workers by Microsoft showed 54% of Gen Z workers are considering quitting their job.
• In its 2021 Global Risks Report, the World Economic Forum ranks “youth disillusionment” as eighth of 10 immediate risks. Findings include deteriorating mental health since the start of the pandemic, leaving 80% of young people worldwide vulnerable to depression, anxiety, and disappointment.
• Workforce data from organizations including McKinsey & Company suggests 40% of the global workforce are looking to quit their jobs in the next three to six months.

Source: World Economic Forum website

Following a barrage of pandemic lockdowns and closures, restaurants in Canada are still not out of the woods, despite the fact mask mandates have long since been lifted and life has seemingly returned to ‘normal’.

According to a recent report from Restaurants Canada, over the past year restaurant closures have outpaced openings by 43% and inflation-adjusted food service sales will be around 11% below 2019 levels by the end of this year. The report also indicates traffic in full-service outlets is down nine per cent, and approximately down five per cent for quick service ones. However, according to the report sales could still surpass the $100 billion mark, which is encouraging.

But getting to that level could be difficult say restaurant owners, taking into consideration ongoing labour shortages and supply chain issues.

“If I were to sum up state of the industry in one word, it would be ‘tired’, especially for independently owned and operated restaurants like my location,” says David Kroeker, owner of Zoup! on Hespeler Road in Cambridge. “It’s been a struggle and it’s kind of come in waves as well.”

Matt Rolleman, co-owner of Thirteen at the corner of Water and Main streets in Galt, agrees and wonders what the impact COVID-19 will have in the next few months, especially for the Christmas bookings he already has in place.

“In the back of my mind and for a lot of business owners in general is we’re hoping there won’t be another wave like before,” says Matt, noting he’s optimistic vaccines and boosters will lessen the severity of any potential impact. “But it might be a wave of staffing issues with staff getting sick with COVID. I think we’re still in this really precarious situation and are worried about COVID-19, even though people are treating things like it’s all back to normal.”

Staffing levels an issue

When it comes to current staffing levels, restaurants nationwide are finding that retaining staff continues to be a major hurdle. Restaurants Canada estimates the sector has had between 150,000 and 170,000 vacant positions for some time and currently employs 271,000 fewer people prior to when the pandemic hit in 2019. This has resulted in many restaurants to alter the way they operate, perhaps opening fewer days a week or closing earlier.

“Staffing retention is a huge thing right now that all businesses, and especially restaurants, have to look at,” says Matt. “But restaurants are pretty much drawing from a very similar pool of people and there’s all these restaurants vying for the limited staff that’s available.”

David agrees and says even the recent minimum wage hike to $15.50 won’t really help the situation.

“At the end of the day we’re not helping our employees because everyone is jacking up their prices and everything is costing more,” he says. “It’s a vicious circle.”

Supply chain problems

Like most restaurant operators, David says supply chain issues also remain a big concern. As prices on the menu increase with inflation, the number of food choices has decreased in some restaurants resulting in them offering only a few dishes on any given day to provide more predictability for the back-of-house staff.

“The supply chain has essentially fallen apart in my opinion,” says David. “I spend at least five to 10 hours a week just looking for alternative products so we can keep a full menu.”

He says customers service has remained his No. 1 priority and says it can be difficult having to explain to patrons about the challenges he faces if something they order is not available.

“I’m so grateful for our client base because 99% of our customers are absolutely fantastic and they get it,” says David, adding the solution needs to come from all levels of government, especially when it comes to custom issues at the border.

“At our distribution centre there is so much backlog right now they have to make reservations for trucks to show up to receive goods,” he says, noting the Bank of Canada’s decision to increase the prime lending rate to combat rising inflation and the Province of Ontario’s minimum wage increase are working against businesses.

“It’s different levels of government not working together, and they are actually impacting the long-term situation in Ontario,” says David.

Impacted by loans

Like many restaurant operators, both he and Matt utilized the Canada Emergency Business Account during COVID-19 and while that may have assisted during the cycle of lockdowns and re-openings, they worry about the overall financial impact.

“We took on some stuff that we never would have done before,” says Matt, adding business was ‘rolling’ before the pandemic. “I had never planned on taking those extra loans. There’s a lot of businesses that have taken on loans so hopefully when winter hits we don’t see a big recession because it’s going to be hard on a lot of businesses.”

He says having Main Street closed to traffic during the summer was great for his outdoor patio and is optimistic that come next year people will continue to look at staying closer home due to higher costs.

However, Matt expects that people’s dining habits will change.

“Restaurants are a luxury. I’m anticipating that people who dine out once a week may switch to once a month, and those who come once a month might switch to once every two or three months,” he says, adding there is little that restaurant operators can do when it comes to combatting supply chain issues and rising interest rates. “It’s a little daunting for sure.”

•  With files from Troy Media

The cumulative energy of Chambers nationwide took the spotlight at the Canadian Chamber of Commerce’s recent CCEC Conference and AGM in Ottawa.

More than 400 delegates representing Chambers from across Canada gathered Oct. 12-15 in our nation’s capital to brainstorm and attend presentations pertaining to a variety of issues to help these organizations assist businesses. These included everything from generating revenue ideas and the importance of digital transformation, to promoting advocacy and promoting staff growth to create more impact in helping to recruit Chamber Members. As well, the AGM featured several interesting panel discussions and guest speakers, among them U.S. Ambassador to Canada David Cohen who outlined the importance of business relations between the two countries and potential hurdles, as well as John Graham, President and CEO of the Canada Pension Plan Investment Board.

“The calibre of the discussion at the CCEC (Chamber of Commerce Executives of Canada) and AGM is always top-notch and provides the Chamber network with new ideas that can go a long way in helping our Members succeed,” says Chamber of Commerce President & CEO Greg Durocher, who received a special nod of recognition from Canadian Chamber of Commerce President and CEO Perrin Beatty during his opening remarks at the AGM for his work in creating the pilot rapid antigen screening kit program for businesses. To date, Mr. Beatty said the program has resulted in the distribution of more than 10 million kits to businesses nationwide.

During his address, Mr. Beatty touched on current labour and supply chain concerns facing communities nationwide and the importance of the Chamber network in developing growth minded policies to assist the economy to flourish.

“Growth doesn’t just happen spontaneously, it takes planning,” he said, noting the value and strength contained within the Chamber network to implement change. “Nationwide, Canadian Chambers are fighting for Canadian businesses.”

Policies helping businesses

This year, 61 policy resolutions were up for debate in a variety of categories including agriculture, international affairs, human resources, transportation, natural resources and environment, and finance and taxation.

The Cambridge Chamber of Commerce's policy calling for the creation of a more equitable tax distribution plan to assist Canadian municipalities was among 53 approved by delegates. Our policy calls for the review of current funding mechanisms to ensure municipalities can fund their needs, including physical and social infrastructure to set the stage for economic recovery in communities, which in turn is good for local businesses. Besides carrying the lion’s share of Canada’s public infrastructure funding, municipalities have continued to face additional pressures surrounding a myriad of issues including housing, public transit, public safety, the opioid crisis, telecommunications and broadband, to name just a few.

“Our policy calls for all levels of government to sit down at the same table to work out a fairer tax distribution plan to meet the needs of Canadians and formulate local solutions that will help businesses succeed,” says Greg. “Having the backing of the Canadian Chamber network can go a long way to create positive results in the right direction.”

The approved policies now become part of the Canadian Chamber’s policy ‘playbook’ in its efforts to advocate for change.

To learn more about our advocacy and policy work, visit https://bit.ly/3ez63vZ.

The race is on to determine who will represent Cambridge residents for the next term at City Hall.

Although the municipal election will be held Oct. 24, advanced voting begins Oct. 6 providing many of those seeking a seat on City Council a limited amount of time to garner support in their quest to make a difference in how our community remains a great place to live and do business.

“I think every level of government is important to business,” says Cambridge Chamber of Commerce President & CEO Greg Durocher. “There are federal, provincial, and municipal regulations that mitigate the growth of business and business owners need to pay very close attention to every level of government and participate by voting or campaigning, or supporting, or whatever they need to do to stabilize their business within the confines of Canadian democracy.”

In Cambridge, three new councillors will be seated at the table with the potential for several others if the incumbents fail to retain their positions. But whether the prospect of massive change around the council table is enough to sway more residents to vote remains uncertain since traditionally, municipal elections garner a lower voter turnout than provincial or federal races. In the last municipal race in 2018, voter turnout in Cambridge was 32.4% compared to the provincial average of 38.30%. Compare this to the recent provincial election which experienced a voter turnout of about 43.5%, one of the lowest in decades.

“Media tend to focus on national or provincial elections, and of course those are organized by political parties who are able to mobilize an enormous amount of activity and intention because they can spend a great deal of money and voters can easily identify who the political operatives are,” explains Dr. Dennis Pilon, Associate Professor, Faculty of Liberal Arts & Professional Studies – Department of Political Science at York University. “When you look at it from the point of view from the voters, the challenge they face is that it’s very difficult to get informed about what’s really at stake. For voters to work out what each individual (municipal) candidate represents without a party label is somewhat challenging.”

As well, Dr. Pilon is candid when he talks about the legislative controls at the municipal level, noting even their ability to determine land uses can be circumvented by developers through the Ontario Municipal Board process.

“When we look at how the founders of our country and current federal and provincial politicians look at local government, they deliberately made it the weakest level of government,” he says. “It has very little independent power and has almost no fundraising capacity and is completely controlled by the provincial governments.”

Despite that, Greg notes the fact municipal governments are responsible for many elements –waste collection, police, fire service, roads, water and sewer, snow removal – that provide business owners with the ability to operate their businesses.

“They make the community safe and habitable, so the people you need to run your business want to live in your community,” he says. “I think businesses should encourage their employees to get out and vote because local government is the one level of government that truly affects their everyday lives.”

But inspiring people to vote in a municipal election can be difficult.

“It’s not that people don’t care and are not passionate,” says Dr. Pilon. “But often it takes a huge issue to catalyze the public and give them a focus for their concerns.”

For example, he says the proposed construction of the controversial Spadina Expressway in Toronto in the late 1960s and early 1970s, and more recently the amalgamation plans outlined in former Ontario premier Mike Harris’ ‘Common Sense Revolution’ in 1995 mobilized an enormous amount of people.

“You have to have a big issue that’s going to affect the majority of people, and thankfully, we don’t have those big issues,” says Greg, adding even the approval of the LRT didn’t garner as much concern as expected. “When there are those neighbourhood issues, they generally don’t drive people to the polls.”

Dr. Pilon agrees and notes that even the current housing and homelessness issues facing most communities is likely not enough to inspire more people to vote.

“Historically, when we look over the 20th century, the market has had an uneven ability to respond to housing needs again and again. It’s not a new problem and not one that municipalities have the finances to deal with so there you’ve got this mismatch,” he says, adding it’s a difficult issue for local candidates to succeed with at the ballot box. “There will be no accountability on the issue because there’s very little that municipalities can do.”

Dr. Pilon says ‘dramatic events’ that rise above the ‘noise’ are needed to mobilize voters at the local level, which is difficult due in part to media cutbacks.

“A lot of local newspapers have taken a hit over the past decade, so people aren’t receiving as much local council coverage and that makes it difficult for them to find out what’s going on,” he says.

To encourage more voter participation, Dr. Pilon recommends several potential changes including allowing the formation of ‘slate’ parties in Ontario, similar in nature to what is allowed Vancouver, B.C., as well as reforming campaign finance laws to prevent developers from having too much ‘pull’.

“Another reform that would make a big difference is stop reducing the size of councils,” he says, referring to Premier Doug Ford’s reduction of wards in Toronto. “What kind of impact is that going to have on representation?”

In terms of representation, Greg says a party system is not the answer at the municipal level.

“People are there representing their neighbourhoods and community, their friends and family and the businesses they shop in,” he says, adding a party system doesn’t lend itself to this type of scenario and that leaving their own political ‘baggage at the door’ is key for a successful council candidate.

“You’re not looking for someone with a platform of ideas as much as someone who has leadership and communication skills and can deliver on the interest of the neighbourhood. You want an individual who is compassionate and understanding and can also communicate well to upper levels of government to make sure that the community’s broader needs that may relate to provincial or federal issues are understood and addressed as best they possibly can.”

To learn more about the 2022 Municipal Election, visit the City of Cambridge.

The Cambridge Chamber of Commerce and Ontario Chamber of Commerce (OCC) welcomes the return of the Legislature and looks forward to working with Premier Ford, his new cabinet, and all parties to champion the province’s competitiveness, productivity, and growth.

To put its members’ concerns’ front and centre as the Legislature returns, the OCC today released its Blueprint to Bolster Ontario’s Prosperity, which provides a letter to each provincial cabinet minister outlining key policy priorities.

“Businesses across Waterloo Region are looking to the government to develop policies that will spur local and regional economic growth and job creation,” said Cambridge Chamber of Commerce President & CEO Greg Durocher.  “The government must create the right conditions to support business stability, predictability, and confidence. There must be a balance between short-and long-term solutions to address our current and future challenges.”

Some key highlights in the Chamber network's Blueprint to Bolster Ontario’s Prosperity include:

• Addressing Ontario’s labour market challenges by boosting immigration, removing barriers to labour mobility, and introducing workforce development strategies for key sectors such as construction, health care, tourism, and hospitality, and transportation.
• Bolstering our health care system by developing a health human resources strategy, delivering on digital health, and addressing backlogs in routine vaccines, diagnostics, and cancer screenings.
• Continuing to prioritize lowering the administrative burden on business and ensuring that regulation is streamlined and effective.
• Planning for Ontario’s long-term energy needs to ensure businesses and residents continue to have access to reliable, clean, and affordable energy for generations to come.
• Propelling housing affordability through increased supply and regulatory reforms to fuel the industry and help organizations attract and retain talent.
• Advancing regional transportation connectivity and fare integration as well as broadband infrastructure projects in collaboration with the private sector.
• Modernizing public procurement to support small businesses and equity seeking entrepreneurs to diversify the supply chain.
• Seizing Ontario’s opportunity to lead in the global green economy by minimizing uncertainty, supporting cleantech, mobilizing clean energy solutions, and strengthening climate adaptation.

“The past few years have been characterized by tremendous uncertainty: a prolonged pandemic, record-high inflation, supply chain disruptions, labour shortages, and geopolitical turmoil. If we want our economy and people to emerge stronger amid so much uncertainty, Ontario must focus on creating the right conditions to support competitiveness, productivity, and growth,” said Rocco Rossi, President and CEO, Ontario Chamber of Commerce. “We are providing all Ministers with a blueprint for steps that can be taken to ensure we are bolstering Ontario’s prosperity – we look forward to continued collaboration with the Government of Ontario and all parties over the next four years.”

The OCC’s blueprint letters includes both policy asks where immediate action is required to support business and foundational recommendations for long-term prosperity and were informed by OCC’s diverse membership.

READ THE LETTERS.