Q&A: How to Turn Economic Challenges Into Opportunities
Q&A: How to Turn Economic Challenges Into Opportunities
Vice Chair, BMO Financial Group
The Hon. Brian Tobin was named as an Officer of the Order of Canada in 2013 for his contribution to Canadian public policy as a federal and provincial politician, a…
The Hon. Brian Tobin was named as an Officer of the Order of Canada in 2013 for his contribution to Canadian public policy as a federal and provincial politician, a…
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The global economy has faced a barrage of crises in recent years. While the major economies have been able to recover from these events so far, can more be done to increase their resilience? That was the central focus of the “Fostering Economic Resilience” panel at the 2023 International Economic Forum of the Americas (IEFA) Toronto Economic Global Forum, moderated by Brian Tobin, Vice Chair, BMO Financial Group, which featured:
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George Walker, Chairman and CEO, Neuberger Berman
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Euan Munro, CEO, Newton Investment Management
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Deborah Flint, President and CEO, Greater Toronto Airports Authority (GTAA)
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Ben Meng, Executive Vice President, Chairman of Asia Pacific, Head of Global Private Equity and Executive Sponsor of Sustainability, Franklin Templeton
The panel weighed in on a number of topics, including supply chain and the situation in the Middle East. The panel also explored how artificial intelligence (AI) can help improve travel and lower carbon emissions.
Following the panel, Brian Tobin, former premier of Newfoundland and Labrador and a federal cabinet minister under then-Prime Minister Jean Chrétien, shared his thoughts on how to turn economic challenges into opportunities.
Q: What were some of your key takeaways from the panel?
A: We are still in a world of considerable risk, considering what is happening in the Middle East and what continues to occur between Russia and Ukraine. But that being said, I was encouraged and happily surprised by the continuing confidence the panelists expressed about their view of our economic prospects today and into the future. They also offered an assessment that the conflicts, both in Israel and in Ukraine, will not, by themselves, push the world away from a restoration to a growth agenda.
With respect to Deborah Flint, she’s a real breath of fresh air with a big vision for Toronto. This is a leader who drove an $18-billion expansion at LAX [Los Angeles International Airport]. She hasn’t shown her hand yet, but I suspect we will see some significant further development at Pearson. It’s just a question of time before all is revealed.
Q: Is enough being done to build resilience in the global economy?
A: The continuing strong employment around the world – in Canada, the U.S. and Europe – is incredibly important. We are still battling inflation. There have been signals from the U.S. Fed that they believe they have reached the top of what needs to be done. That doesn’t mean there won’t be a change of mind in a month or two, or a week or two, depending on circumstances.
I am personally concerned about de-globalization. Do we need to be far more careful with respect to our supply chains than we have been in the past? Absolutely. You want to make sure you diversify your supply chain. But is it realistic or pragmatic to suggest you’re going to replace everything that you used to supply out of China by building supply chains close to Winnipeg or close to home in California? That may be a dream. Diversifying your supply chains and having more than one source of supply for critical parts is important, but to start thinking in terms of building walls around each nation and supplying ourselves with our own resources, the cost of everything would go up.
Q: What role do businesses and investors have in building a resilient economy?
A: It’s important for businesses to be articulate and express, in a constructive, non-partisan way, our collective concern about a failing congressional process, about governments who think we can tax our way back to prosperity.
The other issue is, where are we going with the energy transition and the huge commitments to decarbonize our collective economies? The U.K.’s Prime Minister Rishi Sunak is backing off forecasted targets and he’s not the only leader to do so. But we’ve heard from business leaders that we are in a critical climate moment and that we must face that moment with concrete action.
Q: What about the value of environmental, social and governance (ESG)?
A: My gut instinct tells me the vast majority of citizens are still concerned about the importance of climate change. There’s a noisy minority pushing back. It is very important for policymakers and politicians not to mistake the noisy voice of a few for the thoughts and opinions of the many. It doesn’t mean the majority should always be listened to, but on this one, I think there is a consensus. If we lose momentum and hit the brakes when we should be keeping a steady foot on the accelerator, we may lose an important opportunity to have a significant impact on global warming and to be a global leader in the energy transition.
Q: What type of investment is still needed to build resiliency into the global economy?
A: You can argue in 10 years whether every penny spent was well spent, but the Inflation and Reduction Act (IRA) is having a profound impact on energy transition in the U.S. Unless we Canadians want to have our problem solved by technologies, players and expertise of the U.S., we need to get in the game more aggressively. I give the Canadian government full credit for stepping up and responding to the IRA when they brought in the budget. But I would suggest, having spent time in the U.S. with players in the sector, maybe we better rethink our level of financial commitment and, to the extent we can, do more.
Toronto Global Forum 2023
PART 2
How the Energy Sector Is Helping Canada Achieve Its Decarbonization Goals
David Jacobson October 16, 2023
The Canadian energy sector is willing to invest more to lower its emissions, but it says the government needs to provide more support if th…
