Editorial - December 2011
On a fairly predictable schedule, an issue will pop up in the Canadian political cycle that reignites debates around the merits of foreign ownership and competition for Canadian companies. Last year, the debate was sparked by Australian mining company BHP Billiton Ltd.’s hostile takeover bid for Potash Corp. of Saskatchewan Inc., a move that was ultimately quashed by finance minister Jim Flaherty. Currently, the conversation is centred around the telecommunications sector as the Harper government grapples with whether to relax ownership rules for wireless providers and open up the market to more players (and, most likely, more cutthroat price wars for wireless services).
Protectionist arguments in favour of blocking increased foreign ownership and competition are often predicated on an image of Canadian companies as tender darlings that can’t compete on a bigger, or more crowded stage, and need to be sheltered from the wider world. However, the performance of the Canadian economy over the last decade has significantly undermined this argument. While traditional economic powerhouses such as the US and Western Europe continue to grapple with flailing financial institutions, high unemployment and crippling government debt, Canadian large enterprise companies (those with 500 or more employees) have maintained an overall pattern of reliable growth (albeit at a slower pace) since the downturn in 2008.
Perhaps no other segment of the Canadian economy has received more kudos in the last few years than the financial sector. Politicians, the media and especially bankers themselves have delighted in repeating the mantra that no Canadian banks required a bailout while titans were falling in the US. Indeed, Canadian banks continue to expand their global footprint and have increased their presence in the US especially. The evidence of this is plain to anyone who has seen a Boston Bruins game at TD Banknorth Garden or a Hurricanes game at the RBC Center in Raleigh, NC.
Likewise, as Canadian P&C companies continue to consolidate, the biggest and best among them are poised to start positioning themselves as significant international players with the capacity, resources and expertise to support domestic clients competing in the global marketplace. Our cover story on Rowan Saunders and his plans for RSA provide an example of a CEO who is thinking about a lot more than just where his company fits in at home. Turn to page 20 to read our year-end, sit-down interview with him.
Copyright 2011 Rogers Publishing Ltd. This article first appeared in the December 2011 edition of Canadian Insurance Top Broker magazine.