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ECONOMIC REVIEW & FORECAST November
2005 |
The U.S. may never have been so widely unpopular as it is right now. Its stock markets have been neglected. On the back of higher interest rates, its currency has only just begun to recover after years of relative weakness. What must never be underestimated, however, is the power of the most amazing economic engine the world has ever seen. What is more, America has often demonstrated the ability to reinvent itself and chart a new course, emerging stronger from crises that, at the time, seemed insurmountable. The Canadian dollar and stock market have remained strong, buoyed by energy prices, which in turn ran to exaggerated levels due to this year's hurricane season. Notwithstanding Canada's recent success, our belief is that the next several quarters will see the U.S. market outperform. As to our dollar, the loonie could ease due to lower energy prices as well as political concerns in the wake of the Gomery report. An election has been promised for early 2006. U.S. interest rates are higher than ours. This makes U.S. bonds more attractive and pushes up the value of the dollars used to purchase them. As to the U.S. market, America has a clearer national policy than we do on the financial services sector and this will likely result in a series of large mergers in this area. A recent addition to our clients' portfolio is Northern Trust Corp. (“NTRS” on NASDAQ). Based in Chicago, Northern Trust is one of America's premier asset management and advisory firms with assets of over $590 billion. It would make a perfect acquisition target for Bank of New York, Bank of America or Citigroup. Also in the financial services area, we continue to work with the New York Stock Exchange (“NYSE”) as it strives to become a public company. Our firm now controls 34 NYSE seats and a summary of our most recent efforts is available. We continue to believe that investors are, for the moment, still able to take advantage of what is already showing itself to be a very profitable opportunity. Interested investors should ask their Advisors about the Caldwell Growth Opportunities Fund which now owns 2 NYSE seats. The other two sectors of the U.S. market that we believe will lead it higher are communications and health-care. Amgen has been one of our strongest performers. We have been very pleased with our relationship with Strategy Asset Managers LLC, the managers of the Caldwell America Fund since February of this year. The loonie's strength has masked, to our Canadian eyes, performance that continues to outperform the S&P 500. A strong U.S. stock market and a less robust Canadian dollar in 2006 could make it plain to everyone what this Fund is capable of in a favourable environment. At home, we will continue to focus on financial services, energy and materials. This is because Canada has been very successful with resource companies, but has been hard pressed to produce industrial companies with sustainable growth trajectories. While energy stocks will continue to be very profitable and generate lots of cash, energy prices have peaked. In contrast, precious and base metals prices have only just begun their upward move. With the impending takeover of Falconbridge by Inco, we sold the former at a considerable gain, because portfolio weightings in Inco would have been too great. We redeployed some of these funds in Teck Cominco Ltd., a more diversified metals company and we will continue to look for opportunities to build our clients' investment in mining and metals. We made switches in the energy sector by exchanging stocks with very small dividends for income trusts that have much greater yields. It remains to be seen how long these high energy prices will last, but we believe that it is prudent to realize as much income for our clients as possible while they remain at these levels. C.I. Fund Management Inc. (“CIX” on the TSX) is a significant equity holding for our clients. We accumulated this position because of our belief that Sun Life, which already owns a 30%+ position in the company, would acquire the rest. For a brief moment, CIX's share price rose sharply on the surprise news that it would become an income trust, only to reverse itself because of the federal government's announcement that effectively suspended the creation of new income trusts. After this setback, CIX's price has continued its climb and we believe that the original plan of a Sun Life takeover is back on the table. However, our markets are likely to continue to be held back by federal indecision on income trusts and bank mergers. As we noted in our July Economic Review & Forecast, the modest bond market decline we have seen this past quarter was expected. Through the summer and into October, we have taken the opportunity this weakness in bonds presented to extend the average term of our clients' bond portfolios. The result should be higher interest rates for a longer term, producing more income for their accounts. We believe that the tightening of monetary policy by central banks here and in the U.S. is drawing to a close. This should provide support for bond prices. Looking ahead to 2006, investors should indeed keep their eyes forward rather than watching the rear view mirror. Just as next year will undoubtedly produce its own set of challenges, the successes of 2006 will also be quite different and, if our current year is used as a guide, unexpected. For Canadians who have largely discounted the U.S. politically and socially, underinvesting in America could result in lost opportunity. TSX Inc. stock has been a wonderful way to participate in everything that has gone right in Canada. While we remain comfortable with the Toronto Stock Exchange's ability to make money, it is a small market in an economy that is narrowly focused. Looking ahead to next year, consider the New York Stock Exchange as a proxy for America. The NYSE could well prove to be the best way to participate in the growth of the most diverse and resilient stock market in the world. Investment Management Committee Tom Caldwell, Chairman, Caldwell Securities Ltd. (416-862-7755) |
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MANAGEMENT
MINUTE by Cy Charney, President, Charney & Associates Inc. |
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Taking Care of Your Mental Health Love cures people – both the ones who give it and the ones who receive it. Wellness is about taking care of yourself. It is an empowered process that recognizes the connection between your mental and physical well-being. Wellness is not a fad. It can require many changes for most of us, but its implementation is a journey requiring one change at a time. As we improve our living habits, we begin to make good habits a way of life rather than a short-term change. 1. Maintain a great attitude. Your outlook will improve if you:
2. Enhance your relationships with others.
Cy Charney, President of Charney & Associates. (905-886-5606, www.askcharney.com), is a leading Canadian management consultant focusing on organizational performance improvement. The above is an excerpt from his book, The Portable Mentor, published by Stoddart.
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FEATURE ARTICLE by Mark Venning |
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If you become so reluctant to have rewarding conversations with people at any age, as to their values and contributions at work, then the cost will be there in lost productivity that is hard to measure at a fast glance. September 28, 2005 How many sound bites have you heard lately on the subjects of aging demographics, retirement, the Baby Boomer's “Top 50 Best Employer lists for 50 Plus Workers” and so on? How long have we been talking about this in the public domain? Does it make a difference? At an HR Forum in Ottawa this June 2005, the CCHRA (Canadian Council of Human Resource Associations) put the aging workforce discussion on the table as one of three top business issues facing organizations over the next decade. As I took part in the conversations at the forum, it would appear that it does make a difference. Managing change around your aging workforce is part of the talent development spectrum. But there are interesting things about this issue that are challenging while at the same time not difficult to deal with and not much more than common sense. What strikes me is that in some cases the HR leadership in organizations has not done a “generational audit” on their workforce. In light of this aging workforce issue as focused by HR professionals, do you know what portion of your workforce is over 54 for example? If it's 10% of a 1000 people, that cohort could be rather significant number in your audit. Have you checked in with these people recently to get a sense of how they are looking at their work situation now, in the later-life phase of their career? Very often the inner motivation and work values are not the same as what a person openly projects. Taking the sample of 100 people, are you to assume that they are all at the same level of thinking? Some people may be sleep walking through their career, a “silent detachment” as it were, while others may be simply looking for another challenge to stay as an active participant in your organization, but in a different way – more of a “creative engagement”. In fact, even though younger generations may express it in another voice, what is valued in work is surprisingly the same. Meaningful work. Better designed work. Honest and speedier feedback. Opportunity to learn and be challenged. Flexible work arrangements. Quality life outside work. Fill in your list from here. These are cross-generational. Are these items on the list that risky for an organization to fulfill? As some employment law specialists might tell you, what is risky is calling a meeting with people to find out about their retirement plans. There is an upcoming conference this November at Osgood Law School in Toronto on “Preparing for the End of Mandatory Retirement” that addresses several legal issues related to the aging workforce as identified in the CCHRA Forum mentioned above. Here's a question. What is the cost of avoidance? If you become so reluctant to have rewarding conversations with people at any age, as to their values and contributions at work, then the cost will be there in lost productivity that is hard to measure at a fast glance. When it comes to that 10% cohort, the conversation doesn't start with retirement. It has become a testy word these days. There will be those who declare that at a certain age they are moving on, but even with that mutual understanding there may be seven years ahead in their organizational career where the “creative engagement” drifts into that “silent detachment”. In a recent discussion on a Talent Management Panel with the Human Capital Institute, I was asked - what should managers do to engage or re-engage employees? Response: • Check in on a regular basis not just at performance review time. • Be clear on expectations, be prompt on feedback. • Don't be afraid of uncomfortable conversations. Uncertainty opens to fear and fear drowns trust. Let people know the score and if you don't have an answer, say so. • Understand the motivators – what makes the individual, what makes the team tick! • Encourage ideas and work them in where you can, don't over promise In this age-conscious world, have we lost that much sight of the basics? While the riggings of the business ship continue to tug and pull on deck, possibilities for people are still often hidden below deck. Creative engagement is what both workers and organizations are looking for. With the changing attitudes of today's workers moving more towards active aging, a person has more choices in how to work longer but “differently” than previous generations had with their version of retirement as a crisp end to work. As you look at the issues on the talent management spectrum over the rest of this decade, remember this. In Canada, as with many countries in Europe (where the shifting demographics of an aging population are creating more analysis for policy makers and business leaders), “career longevity” has a new meaning. What you do about it will make a difference.
Mark Venning is founder and career strategist of Change Rangers, “The Leading Voice on Career Longevity”. ( www.changerangers.com ) He is the International President of the Association of Career Professionals International.
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LEGAL CORNER |
Government Increasing Employment Standards Enforcement On May 27, 2005, the Ontario Ministry of Labour unveiled this year's strategy to improve compliance with the Employment Standards Act. To protect vulnerable workers and ensure that employers have the information they need to comply to their employment standards obligations, the ministry announced that it will continue to enhance enforcement and will conduct 2,500 proactive inspections targeting high risk sectors and employers. In addition, the ministry aims to increase the amount of money it collects for employees and accelerate the resolution of outstanding claims. Substantial progress has already been made on both fronts. The ministry formalized the Centralized Insolvency and Collection Unit, a pilot project that had been set up to improve the level of service and the recovery of monies owed to employees. Since its inception, the unit has collected $3.7 million owed to 1,180 employees. This is in addition to money recovered by the ministry's private collection agency. As for resolving outstanding claims, the average turnaround time for claims filed with the ministry from April 1, 2004 to January 31, 2005 was 81 days, compared an average of 87 days in 2003/2004. Before the government initiated its enforcement strategy, investigations were usually triggered by a complaint from an employee or former employee (or a group of employees) on an approved form. Although employment standards officers could also conduct proactive inspections of payroll and other records, including a review of employment practices, they rarely did so. The number of proactive inspections had plummeted to only 151 in 2003/2004. As of 2004/2005, employers can be either randomly selected for an inspection, or can be selected on the basis of a high volume of ESA complaints. The Employment Standards Officer will either visit the employer without notice, or will request specific information and documents and arrange for a meeting. Officers may notify the employer in writing before the inspection but are not required to do so.The request for information will typically be to determine whether the employer is complying with the ESA. (See the MOL Government Action Protects Vulnerable Workers | Ontario Ministry of Labour ). During an inspection, the Employment Standards Officer will usually focus on specific areas of the ESA, including:
A search for the prescribed ESA poster, posted in a conspicuous place, is also included in the investigation. Upon completing an investigation, the officer can request more information, order a self audit, or issue a compliance order, an order to pay wages, a notice of contravention, a provincial offences ticket, or a Field Visit Report. Employers have the right to apply for a review. If an employer does not make this application within 30 days of the date an order or notice was served, the order or notice is final and binding on the employer. Where the employer has not paid the required amount, the file is sent to a private collection agency. The employer is required to pay the collection agency fees as well as the ministry's administrative fees. Tips for Employers Given the Ministry of Labour's approach to enforcement, you should focus your attention on compliance and ensure that employment agreements, policies or collective agreements comply with, or exceed, the ESA. Both employers and employees are prohibited from waiving or contracting out of the ESA regime insofar as the employment contract and/or agreements or policies would provide for less than the minimum standards provided under that statute. Accordingly, you should review the Employment Standards Act and Regulations and your workplace policies and agreements to identify non-compliance issues and make adjustments where necessary. Compliance Audit First Reference Inc has prepared a General Employment Standards Compliance Checklist that will allow you to determine how well your workplace meets key requirements, responsibilities and duties under the Employment Standards Act. It is especially useful when conducting a workplace inspection, and will help ensure that you comply and fulfil your responsibility to provide a fair and productive workplace. Other Workplace Inspections During increased random workplace inspections, Ontario Ministry of Labour inspectors have been directed to focus on sections of the Occupational Health and Safety Act that oblige employers to give young and new workers the information, instruction and supervision needed to work safely. According to the government, injuries are preventable if workers are well trained and supervised; as such, they are instructing their inspectors to pay special attention to requirements for employers to provide proper training. According to the Ministry of Labour, orientation must be more than a tour of the workplace. It should entail providing new and young workers with emergency procedures, workplace safety rules that everyone must follow in the workplace or worksite, general requirements for personal protective equipment, first aid provisions, information about where the Occupational Health and Safety Act (and policies) are posted, as well as an introduction to all other essential health and safety facts. New and young workers should be made familiar with their health and safety committee members or representative during orientation. By law, every employer must provide information about hazards in the workplace, and how to perform work safely. Ensure that training takes place before any new task is assigned and that all information provided is understood. Cover everything new workers need to know,, regardless of their age and previous experience; and include everything, including the basics. According to the government, the ideal method of training new and young workers is to demonstrate safe performance of a task and then have the trainee perform the task under supervision until they can demonstrate that they have mastered it. If workers need job specific training (depending on the industry or the nature of the job), use safety devices and/or wear personal protective equipment, they will need to be trained to use and wear them properly. If the trainer is not the new worker's supervisor, ensure the trainer is an expert at performing the tasks and is a qualified instructor. Please read the Ministry of Labour press release for additional information: Ministry Of Labour Targets Young Worker And New Worker Health And Safety: Enhanced Enforcement And Better Access To Resources Part Of Plan | Ontario Ministry of Labour . Health and Safety information on young and new workers can be found on the Ministry of Labour website at New and young workers ... Are yours ready? Ready ... Set ... Work! | Ontario Ministry of Labour . Additional resources can be found at: Employing Young Workers: Tips for Employers | Ontario Ministry of Labour Employing Young Workers: Tips for Supervisors | Ontario Ministry of Labour -------------------------------------------------------------------------------- By Yosie Saint-Cyr, Editor at HRinfodesk---Canadian Payroll and Employment Law News and Development HRinfodesk is a service that is published by First Reference which includes employment law news for every jurisdiction in Canada, a Library of Articles, FAQs, a Calendar of Events, Important Dates and an HR Internet Directory for expanded research. Our search tools will help you to quickly find results by jurisdiction, topic, date and keyword. For the latest employment law news and a ten day trial, click here . First Reference is a publisher of Canadian employment law reference manuals that are comprehensive, updated and practical. Publications include The Human Resources Advisor, Human Resources PolicyPro and the HRinfodesk Bulletin and website. For more information or to purchase one of our publications, go to http://www.firstreference.com/ . This article offers general comments on legal developments of concern to businesses. Every effort has been made to ensure the accuracy and timeliness of this information. These publications are written for informational purposes only and should NOT be relied upon as legal advice or opinions. The reader should always obtain legal advice from a qualified lawyer or other qualified professional, which will be responsive to the case or circumstance of the individual. Please note that the content provided in this article or any content contained in or made available through any third party website linked to from this article and/or HRinfodesk, is provided 'as is' without representations or warranties of any kind. All representations and warranties in respect of Content or Third Party Content, express or implied, including, without limitation any representations to warranties or conditions regarding accuracy, timeliness, completeness, non-infringement, merchantability or fitness for any particular purpose are hereby disclaimed. ©1999-2005 First Reference Inc. Yosie Saint-Cyr was called to the Quebec bar in 1988 where she practiced employment and labour among other fields till 1999. She is a researcher, policy analyst, and content provider with an extensive background in employment and labour law across Canada. She also obtained a Certificate in Technical & Professional Writing from York University---Glendon in 2003. She is currently the Editor at HRinfodesk.com a Canadian online information service that provides subscribers with a single access point to find answers and solutions to employment and labour law questions across Canada. |
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Cathy
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