Bank of Canada Governor Tiff Macklem is pressing policy makers to focus on fixing productivity and weak business investment. In a speech to the Winnipeg Chamber of Commerce yesterday, he warned low productivity threatens to weigh on Canada’s long-term economic outlook. There are many factors contributing to what he called Canada’s “Achilles heel” in yesterday’s speech, but one surprising trend is complicating the fight: a boom in the boss market. Today, we look at how more managers are making matters worse.
In the news
- Australian company buys Canada’s Fission Uranium for $1.1-billion
- Shopify reveals new AI offerings as it signs deal with Target
- Victoria Gold halts production at Yukon Gold mine after a reported landslide
Auto industry
Canada eyes tariffs on Chinese-made electric vehicles
Electric vehicles made by Chinese automaker BYD are loaded onto a carrier at China's Lianyungang port.China Daily CDIC/Reuters
The Canadian government is sizing up a surtax on imported Chinese-made electric vehicles.
Deputy Prime Minister Chrystia Freeland announced Ottawa will hold 30 days of consultation over the implementation of a tariff, which would be aimed at protecting the country’s auto industry against a flood of Chinese-subsidized EVs.
“Canadian workers and the auto sector are facing unfair competition from China’s intentional state directed policy of overcapacity that is undermining Canada’s EV sector ability to compete in domestic and global markets,” Freeland said. “Chinese producers are quite intentionally generating a global oversupply that undermines EV producers around the world, including here in Canada.”
Freeland’s announcement follows announcements by major trading partners looking to fend off a surge in Chinese EV shipments, Stephen Chase and Mark Rendell report.
- In May, U.S. President Joe Biden quadrupled the U.S. import tariff on Chinese-made EVs to 100 per cent. He also hiked tariffs on a lengthy list of other Chinese products including solar cells, computer chips, medical equipment and lithium ion batteries.
- Chinese brands are not yet a major player in Canada’s EV market. But imports from China have exploded in the last year as Tesla switched from U.S. factories for its Canadian sales to its manufacturing plant in Shanghai.
- The European Union is also planning action with provisional tariffs of up to 38 per cent set to take effect in early July, while an EU investigation continues that could lead to more permanent tariffs in November. The European Commission said it would host technical talks with Chinese officials in Brussels this week.
The federal government’s announcement comes as Canada’s steel suppliers are pressing for a more protectionist approach to the country’s EV supply chain.
The sector is warning that steel fabricators, in particular, are struggling to compete for contracts to supply a wave of battery factories. That’s because overseas rivals – especially from China – offer much lower prices because of looser labour and environmental standards, among others.
As major automakers near procurement decisions for new Canadian battery factories, fabricated steel contracts totalling hundreds of millions of dollars are in play, Adam Radwanski reports. The outcry is indicative of mounting demands from the industry for economic protectionism as part of Canada’s strategy for the global energy transition, he writes.
Spotlight
Behind Canada’s boss boom
All of these people are bosses now.Monkey Business Images/iStockPhoto / Getty Images
Who’s the boss? In Canada, a growing number of people. Reporters Jason Kirby and Matt Lundy looked into how Canada’s job market has endured even in the face of high interest rates. One surprising engine of that growth: Managers are emerging as the fastest growing occupation in the country.
Data compiled by Statistics Canada show a widespread expansion of Canada’s managerial class – one that stretches across multiple industries and sectors.
33
– Percentage increase in management positions created since 2021.
8
– Percentage growth in non-management jobs over the same timeframe.
Who’s making more managers?
Economists and human resources experts point to a number of competing explanations for what’s going on.
Job-title inflation: Companies handing out manager titles as a way to retain younger talent in a competitive market.
Tag-teaming: Employers doubling up management roles as boomers retire.
Titles in tech: A remote working environment that has boosted tech teams – and roles that carry management titles even if they don’t involve oversight of people.
Are more bosses such a horrible thing?
Maybe not for the bosses. But management inflation isn’t making Canada’s fight to boost productivity and skills any easier. Policy makers and economists say weak productivity and low business investment have become an emergency situation that makes it harder to control inflation and that could erode living standards if left unaddressed.
- Boss bloat: The tactic of promoting a retiring boomer’s replacement, for example, is creating overlap: As one person learns the ropes while the other prepares for their next chapter, months go by with two people doing the same job. Now multiply that by several thousand.
- Shattered glass: These developments are exacerbating an already urgent push to safeguard Canada’s economic future. In remarks to a crowd of companies in Halifax this spring, Carolyn Rogers, the Bank of Canada’s senior deputy governor, said it’s “time to break the glass” to fight emergency-level productivity rates.
- Slowing down: In 1984, the Canadian economy was producing 88 per cent of the value generated by the U.S. economy per hour. “That’s not great,” Rogers said. By 2022, Canadian productivity had fallen to 71 per cent of the U.S. According to my calculations, that’s much worse.
- Zooming out: Higher productivity raises profits and lets companies pay better wages without passing cost increases along to customers. If productivity lags, the central bank and economists say, rising labour costs tend to lead to higher prices.
What’s in a name?
“Manager” means something different to Gen Z. Nita Chhinzer, an associate professor of human resources at the University of Guelph and a human resources consultant, said it now reflects someone’s position of influence rather than authority. “It’s a recognition tool for people who are not actually managing people.”
You can find the full story here.
Charted
Alberta regulator forecasts oil, gas growth through 2033
Alberta’s energy regulator says production from the province’s oil and gas industry is likely to grow on the back of higher prices and increased access to markets through the expanded Trans Mountain pipeline system.
In an annual report, the Alberta Energy Regulator forecasts demand for oil will rebound and prices will begin rising in 2025 as the global economy improves growth, Emma Graney reports. The Energy Outlook is an annual report on the state of hydrocarbon reserves, supply and demand for bitumen, crude oil, natural gas, natural gas liquids, coal and emerging resources such as helium and lithium.
On our radar
Today: Statistics Canada releases its latest reading for inflation. More progress could fuel expectations for another rate cut from the Bank of Canada.
Tomorrow: BlackBerry Inc. and chipmaker Micron Technology report quarterly earnings.
A bite: Out of Apple. The iPhone maker is facing mounting pressure to tear down competitive barriers.
Music: Big record companies are suing artificial intelligence song-generators Suno and Udio for copyright infringement.
Markets: Investors are staring down Friday’s U.S. personal consumption expenditures report, the Federal Reserve’s measure of inflation.
Where there’s a will: There’s a way. With changes to the capital-gains tax going into effect tomorrow, new obstacles are emerging in wealth-transfer planning.
ICYMI: Out of options? Increasingly, companies find they have other ways to pay their CEOs.
Morning markets
Global stocks wobbled after a sell-off in chipmaker Nvidia dragged down U.S. tech companies, suggesting some nervousness around the artificial intelligence boom.
On Wall Street, Nasdaq and S&P 500 futures pointed higher, while Dow futures were in the red. TSX futures were down, as Canadian stocks were hurt by a decline in crude prices.
Overseas, the pan-European STOXX 600 was down 0.27 per cent in morning trading. Britain’s FTSE 100 lost 0.25 per cent, Germany’s DAX lagged by 0.94 per cent and France’s CAC 40 was also in the red at 0.69 per cent.
In Asia, Japan’s Nikkei closed up 0.95 per cent at 39,173.15, while Hong Kong’s Hang Seng gained 0.25 per cent, closing at 18,072.90.
The Canadian dollar traded at 73.19 U.S. cents.