Don’t Use Backcountry in Your Name

Backcountry Sledder design trademark with 5 mountain peaks

There too many businesses using the word “Backcountry” in their name or as a trademark. Between the very agressive eCommerce business called Backcountry Corp and Cabela’s LLC and many Canadian businesses, there just isn’t enough room for another Backcountry business.

In the US, Backcountry.com LLC has sued at least 5 small businesses in federal district court for trademark infringement. You never know when they might start doing that in Canada.

What is the Backcountry?

The backcountry is a geographical area that is remote, undeveloped, isolated, or difficult to access. Eg. Most of western Canada, northern Ontario, and northern Quebec.

Image result for Backcountry

How Long Can A Backcountry Business Name Be?

Okay, this isn’t the wild west, but you have to be practical. Backcountry is already 11 letters long. If you add a second portion to make it either more descriptive or more distinctive, your domain name will exceed 15 letters. Longer domain names are more prone to typo errors. Imagine your matching email address is 25+ letters long, including your name. Eg. name@reallylongdomainname .ca – This gets to be a hassle for both you and your customers/clients.

A business name should be one or two words plus a legal ending if it’s a corporation. If that’s not available, pick another name. Your marking department will appreciate your forward thinking.

30+ Backcountry Trade Names

There are probably more than 30 businesses that have registered a name that includes the word Backcountry and it’s getting crowded.

Showing 1 to 30 of 30 entries (Note: this isn’t a complete list.)
Name(s)
Rank Name Jurisdiction and number Creation date (YYYY-MM-DD) Status Business activity
1 BACKCOUNTRY TM-1922995 2018-10-01 Active 8 , 9
2 BACKCOUNTRY TM-1895186 2018-04-23 Active 8 , 9 , 11 , 12 , 18 , 20 , 21 , 22 , 24 , 25 , 28 , 35
3 BACKCOUNTRY TM-1719464 2015-03-16 Active 12
4 Backcountry TM-1247859 2005-02-18 Inactive 25 , 35 , 39 , 42
5 BACKCOUNTRY TM-1640804 2013-08-23 Active 24 , 25
6 BACKCOUNTRY TM-1772271 2016-03-14 Active 31
7 BACKCOUNTRY TM-1810440 2016-11-21 Active 20
8 BACKCOUNTRY LANDSCAPES AB-TN14679195 2009-05-07 Active
9 BACKCOUNTRY CONTRACTING AB-TN15208309 2010-02-26 Active
10 BACKCOUNTRY REALTY AB-TN18602714 2014-11-13 Active
11 BACKCOUNTRY OUTLET AB-TN20148888 2017-01-04 Active
12 BACKCOUNTRY ADVENTURE AB-TN5628938 1993-04-23 Active
13 AMAZING BACKCOUNTRY AB-PT17271750 2013-01-30 Active
14 BACKCOUNTRY BRANDING ON-280762055 2018-07-13 Active
15 BACKCOUNTRY MECHANICS MB-7198206 2015-10-05 Inactive Other Specialty Trade Contractors
16 Backcountry Women MB-10031310 2019-01-07 Active Other Personal Services
17 BACKCOUNTRY OUTFITTERS NB-342491 1997-08-07 Inactive
18 BACKCOUNTRY ADVENTURES NB-325374 1990-12-27 Inactive
19 BACKCOUNTRY BURGER BC-FM0772744 2019-04-01 Active
20 BACKCOUNTRY ARTISTRY BC-FM0447513 2007-04-02 Active
21 BACKCOUNTRY CONTRACTING BC-FM0556941 2011-05-12 Active
22 BACKCOUNTRY EXPEDITING YT-224268 2012-07-24 Inactive
23 BACKCOUNTRY – BUS YT-313583 2013-06-10 Inactive
24 BACKCOUNTRY BAGELS BC-FM0772475 2019-03-28 Active
25 BACKCOUNTRY BLOOMS BC-FM0680174 2016-02-03 Active
26 BACKCOUNTRY BEAUTY BC-FM0722297 2017-06-24 Active
27 BACKCOUNTRY ENTERPRISES AB-PT6560486 1995-05-26 Active
28 BACK-COUNTRY TM-1285153 2006-01-06 Active 12 , 16 , 35
29 BACKCOUNTRY BREWING TM-1844477 2017-06-27 Active 39 , 40 , 43
30 Backcountry Cigars TM-1950037 2019-03-07 Active 16 , 34

19 Backcountry Trademarks

There were 19 Backcountry trademarks as of November 11, 2019:

Application numberRegNo.TrademarkType(s)CIPO StatusNice classOwner
1810440 TMA1021708 BACKCOUNTRYWordREGISTERED20 Exxel Outdoors, LLC
1844477 TMA993159 BACKCOUNTRY BREWINGWordREGISTERED39, 40, 43 1037112 B.C LTD
1790966 TMA993158 BACKCOUNTRY BREWINGWordREGISTERED7, 11, 16, 21, 28,  1037112 B.C Ltd
1719464 TMA985520 BACKCOUNTRYWordREGISTERED12 FCA US LLC
1640804 TMA963342 BACKCOUNTRYWordREGISTERED24, 25 Cabela’s LLC
1772271 TMA962843 BACKCOUNTRYWordREGISTERED31 Société des Produits Nestlé
1459261 TMA800966 BACKCOUNTRY TRUCKIN’WordREGISTERED37, 39, 40 TRANS CARRIER LTD.
1247859BackcountryWordABANDONED SECTION 3625, 35, 39, 42 2059676 Ontario Inc.
1895186BACKCOUNTRYWordSEARCHED8, 9, 11, 12, 18,  Backcountry.com LLC
1922995BACKCOUNTRYWordSEARCHED8, 9 Backcountry.com, LLC
1950037Backcountry CigarsWordFORMALIZED16, 34Island Lifestyle Importers, LLC
1937884Backcountry SledderWordFORMALIZED16, 25Ghislain Duguay
1986087Backcountry WokStandard CharactersFORMALIZED29Backcountry Wok Inc
1653267 TMA940425 BCA BACKCOUNTRY ACCESSWordREGISTERED5, 8, 9, 18, 21, Backcountry Access, Inc.
1990531MUSKOL BACKCOUNTRYStandard CharactersFORMALIZED3, 5, 41, 44Canadian Tire Corporation
1926546Backcountry Coffee CompanyWordFORMALIZED30Kyle Morgan
1882868Backcountry Hunters & AnglersWordSEARCHED35Backcountry Hunters Anglers
1937896Dessin de montagnes et Backcountry SledderDesignFORMALIZED16, 25Ghislain Duguay
0886814 TMA530134 URBAN TERRAIN DESIGNDesignEXPUNGED25LOBLAWS INC.

Updated November 11, 2019

Northface

Northface is a popular trade name in Canada.

Trade Name search for Northface

A Nuans pre-search on October 26, 2019, shows 17 entries for Northface

RankNameJurisdiction and numberCreation date (YYYY-MM-DD)StatusBusiness activity
1NORTHFACE CONSTRUCTIONON-2400233582014-01-09Active
2NORTHFACE OPERATINGBC-FM02554721999-03-11Active
3NORTHFACE RALLYON-2500457882015-01-14Active
4NORTHFACE PAINTINGBC-FM02161281997-03-14Active
5NORTHFACE CAPITAL LTD.ON-12932551998-04-27Active
6NORTHFACE CONSULTING INC.ON-26476252018-07-26Active
7NORTHFACE MECHANICAL LTD.AB-20151473052010-01-28Active
8NORTHFACE VENTURES LTD.BC-08719512010-01-22Active
9NORTHFACE CARPENTRY LTD.ON-7805971988-09-26Inactive
10NORTHFACE CAPITAL CORPORATIONON-5982651984-12-03Inactive
11NORTHFACE CAPITAL MANAGEMENT LTD.ON-12932561998-04-27Active
12NORTHFACE INFRASTRUCTURE MANAGEMENT LTD.ON-22350042010-02-24Active
13NORTHFACE COUNTRY HOMES INC.ON-8293141989-04-03Active
14NORTHFACE LANDSCAPING & MAINTENANCEBC-FM05773602012-02-27Active
15NORTHFACE OPERATING LTD.BC-07167622005-02-17Active
16SUSSEX GROUP – NORTHFACE REALTYBC-FM01600831994-05-10Active
17NORTHFACE EMPLOYEE EQUITY PLAN LTD.AB-20200112802016-10-26Active

However, Northface and North Face should both be searched when trying to clear the name in a Nuans pre-search.

The following results are probably incomplete as the quick check name database is limited to 30 results and it is showing 30 results. A Nuans pre-search would show up to 200 results.

30 Trade Name and Trademark Entries for North Face (2019)

RankNameJurisdiction and numberCreation date (YYYY-MM-DD)StatusBusiness activity
1NORTH FACEAB-TN64659001995-03-16Inactive
2NORTH FACENB-3357761995-03-14Inactive
3NORTH FACESK-00001925191995-03-15Inactive
4NORTH FACEYT-2104301995-03-14Inactive
5NORTH FACEPE-1246681995-03-22Inactive
6NORTH FACENU-3001011995-04-18Active
7NORTH FACENT-3001011995-04-18Inactive
8NORTH FACE ARCHITECTURALON-2511776552015-12-08Active
9NORTH FACE CONSULTANCY INC.ON-23117542012-01-03Active
10NORTH FACE INVESTMENTSAB-TN136669612007-12-03Active
11NORTH FACE LOGGINGAB-PT82079201999-03-02Active
12THE NORTH FACEAB-TN185448742014-10-16Active
13FACE NORTH FRAMING LTD.AB-20109783082004-03-19Inactive
14NORTH FACE PIZZA LTD.AB-2073649101997-04-30Inactive
15THE NORTH FACENB-6167482005-01-24Active
16NORTH FACE, THENT-3050472005-02-09Inactive
17THE NORTH FACEPE-1353152005-01-21Active
18THE NORTH FACEBC-FM01786191995-04-28Active
19NORTH FACE REFORESTATION LTD.BC-05624961998-04-03Active
20NORTH FACE CONSTRUCTION INC.BC-06854522004-01-16Active
21NORTH FACETM-03694861973-11-01Inactive20 , 24 , 25
22THE NORTH FACE MASTERSTM-17393562015-07-28Active41
23THE NORTH FACE & DESIGNTM-14464212009-07-29Active35
24THE NORTH FACE MASTERSTM-14464742009-07-29Inactive41
25THE NORTH FACETM-10957972001-03-13Active6 , 9 , 20
26THE NORTH FACE RENEWEDTM-19342232018-12-05Active18 , 25 , 37 , 40
27NORTH FACE GOLF CLUBTM-11791932003-05-27Inactive16 , 18 , 25 , 28 , 41
28THE NORTH FACETM-04231781978-04-06Active18 , 20 , 25 , 28
29THE NORTH FACE XTM-18470142017-07-12Active35
30THE NORTH FACETM-14464202009-07-29Active35

The above results show multiple active trademarks for The North Face fore a variety of goods and for retail services. That indicates that you should also order a CIPO trademarks database with a Nuans trademark search.

The following results are an exact keyword match for North Face trademarks listed on the CIPO trademarks database. There may also be other similar trademarks that might be found with in a Nuans trademark search report.

19 entries for North Face (2019)

Application numberIR NumberTrademarkType(s)CIPO StatusNice classRepresentation(s)
0369486NORTH FACEWordEXPUNGED20, 24, 25
1446420THE NORTH FACEWordREGISTERED35
1446421THE NORTH FACE & DESIGNDesignREGISTERED35
1095797THE NORTH FACEWordREGISTERED6, 9, 20
0423178THE NORTH FACEWordREGISTERED18, 20, 25, 28
1844407THE NORTH FACE BLACK SERIESWordREGISTERED18, 25
1739346THE NORTH FACE MASTERS & DESIGNDesignREGISTERED41
1739356THE NORTH FACE MASTERSWordREGISTERED41
1634640THE NORTH FACE ENDURANCE CHALLENGEWordREGISTERED41
1934223THE NORTH FACE RENEWEDWordFORMALIZED18, 25, 37, 40
1847014THE NORTH FACE XWordALLOWED35
1354225THE NORTH FACE ENDURANCE CHALLENGEWordABANDONED SECTION 40(3)41
1179193NORTH FACE GOLF CLUBWordWITHDRAWN BY OWNER16, 18, 25, 28, 41
1446474THE NORTH FACE MASTERSWordABANDONED SECTION 40(3)41
1354226THE NORTH FACE NEVER STOP EXPLORING SPEAKER SERIESWordREGISTERED41
1446473THE NORTH FACE MASTERS & DESIGNDesignABANDONED SECTION 40(3)41
1715747JERKFACE 9000 & DesignDesignREGISTERED32
0172917ATLAS & DESIGNDesignEXPUNGED6
1906153Xiao Heng Dumplings & Chinese characters & DesignDesignFORMALIZED30, 43

1

What does The North Face mean?

Originally developed in California the North Face and it’s logo are based on the north face of the Half Dome in Yosemite. This was based on the generalisation that “ The north face of a mountain in the northern hemisphere is generally the coldest, iciest and most formidable route to climb”.

Employee Stock Options

Employee stock options are a great way to align an employee’s interests with their employer’s interests. Stock options are also an economical way to increase overall compensation without the associated big taxes penalties.

What’s The Difference Between a Company and a Corporation?

Corporations are structured with one or more classes of shares. The shares in each class are also called stocks. In Canada, companies are called corporations. There’s no legal difference between corporations using one of the six legal endings (Inc., Corp., Ltd., Incorporated, Corporation, Limited, and Professional Corporation).

How do stock options work for an employee?

Employee stock option plans offer employees the right to buy a specific number of shares at a specified grant price. The employee stock options tax benefit only applies to employees, not contractors or shareholders.

Employees usually must buy the stocks at the grant price, also called the exercise price or strike price, within a specified number of years. There are tax benefits in Canada if the employee holds the stock for at least one year.

Before considering issuing stock options, a corporation should ensure that it has

What are the tax implications of employee stock option plans on a Private business?

Tax implications of Employee Stock Options, KPMG 2019

What are the tax implications of shareholder agreements for a Private business?

Shareholder Agreements – What are the tax implications for a Private business? – KPMG 2019

Tax Implications of Employee Stock Options after January 1, 2020

The tax treatment of employee stock options granted by corporations and mutual fund trusts on or after January 1, 2020 will change. While the tax treatment of options granted before 2020 is unaffected.

Generally, for employee stock options granted after 2019,

  • in the case of options granted by employers that are Canadian-controlled private corporations (CCPCs) or other non-CCPC corporations that are “start-ups, emerging or scale-up companies” (which will be defined by regulation after a stakeholder consultation period ending September 16, 2019), the options will be subject to the current tax regime (we refer to them as “qualified options”) – employees will be entitled to deductions in respect of the option benefits (equal to one-half of the tax benefits realized on the exercise of certain stock options);
  • in the case of options granted by other corporations and mutual fund trusts, the options will be subject to the current tax regime (that is, they will be “qualified options”) unless they exceed the $200,000 annual cap (described below) or the employer designates them, at the time of the grant, as being options that are subject to the new tax regime (we refer to them as “non-qualified options”) – employees will not be entitled to deductions in respect of the option benefits; and
  • an employer deduction may be available for the option benefits realized by employees but only in respect of non-qualified options, subject to certain conditions being met (described below).

Background

Under the Income Tax Act (Canada), when an employee exercises an employee stock option and acquires shares, the employee realizes a taxable employment benefit equal to the excess of the value of the shares at the time of acquisition over the exercise price paid for the shares. If the exercise price of the option is fixed at an amount that is not less than the fair market value of the share at the time the option was granted, and provided certain other conditions are met, the employee may be entitled to claim a deduction equal to one-half of the taxable benefit (the Employee Deduction). It is this deduction that allows stock option benefits to be taxed at the same tax rate applicable to capital gains.

Budget 2019 proposed an annual cap of $200,000 on stock option grants that would be eligible for the Employee Deduction. This proposal targeted stock options issued by “large, long-established, mature firms” while stock options issued by “start-ups and rapidly growing Canadian businesses” were excluded. The government also suggested, without any details, that the employer may be allowed a deduction for the option benefit on non-eligible options. Additional detail can be found in our earlier Osler Update.

The proposed amendments

In general terms, the proposed amendments create two types of employee stock options:

  • One type (which we refer to as the “qualified options”) will be subject to the current tax regime.
  • The other type (which we refer to as the “non-qualified options”) will be subject to a new tax regime.

Qualified options

Qualified options will be subject to the current tax regime. That is, the employee may be entitled to the Employee Deduction, and the employer is not entitled to any tax deduction for the option benefits realized by the employee.

Options granted by CCPCs and “start-ups, emerging or scale-up companies”

All employee stock options granted by employers that are Canadian-controlled private corporations (CCPCs) or other non-CCPC corporations that are “start-ups, emerging or scale-up companies” will be qualified options. The characteristics of “start-ups, emerging or scale-up companies” will be defined by regulation after a stakeholder consultation period ending September 16, 2019.

These proposed amendments recognize the importance of employee stock options as a form of tax-preferred compensation for “younger and growing Canadian businesses” in attracting and retaining employees.

Options granted by other corporations and mutual fund trusts

Employee stock options granted by other corporations and mutual fund trusts may also be qualified options, but only if they are within a $200,000 annual cap and the employer does not designate them as being “non-qualified options” (described below).

This cap reflects the government’s view that executives of large, mature companies should not be compensated using this form of tax-preferred compensation.

Non-qualified options

Non-qualified options will be subject to a new tax regime. That is, the employee will not be entitled to the Employee Deduction but, subject to certain conditions, the employer may be entitled to a tax deduction for the option benefits realized by the employee (the Employer Deduction).

Employee stock options granted by mutual fund trusts and by corporations that are neither CCPCs nor “start-ups, emerging or scale-up companies” will be non-qualified options if the options are not qualified options only because the options are not within the $200,000 annual cap.

However, such employers may choose to designate, at the time of the grant, employee stock options that would otherwise be qualified options as being “non-qualified options” – that is, options that will be subject to the new tax regime. This is similar to the rules under the United States Internal Revenue Code, which permit an employer to designate options as being non-qualified stock options if they would otherwise qualify for the preferential tax treatment afforded to incentive stock options.

Employers who are CCPCs or “start-ups, emerging or scale-up companies” will not be able to designate options that would otherwise be qualified options as being “non-qualified options.” Accordingly, such employers will not have the ability to claim an Employer Deduction (described below).

Other options and share-settled employment compensation

The proposed amendments do not affect the taxation of options granted before 2020.

Nor do they affect the taxation of options and other share-settled employment compensation (such as restricted share units, performance share units, deferred share units, share appreciation rights and restricted share awards) that are not eligible under the current tax regime for the Employee Deduction.

The $200,000 annual cap

The cap will not apply in respect of qualified options granted by employers that are CCPCs or other non-CCPC corporations that are “start-ups, emerging or scale-up companies.”

The cap will apply to qualified options issued by other corporations and mutual fund trusts that become vested in the same calendar year to the extent that the fair market value of the optioned shares under those options at the time of their grant is more than $200,000. This is similar to the $100,000 annual cap that applies to incentive stock options under the United States Internal Revenue Code.

The cap will apply separately for qualified options granted by employers that deal at arm’s length with each other.

Example

  • The first example included in the Backgrounder accompanying the proposed amendments involves an executive that is granted options in 2020 to acquire 200,000 shares at a price of $50 per share (the fair market value of a share on the date the options are granted), with ¼ vesting in each of 2021, 2022, 2023 and 2024. In each vesting year, the value of the tranche of options that is expected to vest is measured to determine whether the $200,000 annual cap in that year is exceeded. In this example, 50,000 options are expected to vest in each of 2021 to 2024. Based on the fair market value at the time of grant of $50, the annual cap is exceeded in each of 2021 to 2024. As a result, the preferential treatment is only available to 4,000 of the options vesting each year ($200,000 ÷ $50) and the remaining 46,000 options per year would not be eligible for the Employee Deduction.

Ordering and other supporting rules

Ordering rules provide that, if an employee holds both qualified options and non-qualified options that are otherwise identical, the qualified options will be deemed to have been exercised first.

Options granted at different times will “fill” the $200,000 annual cap for the calendar year of vesting in the order in which they were granted. That is, options that vest in the same calendar year as qualified options previously granted will be non-qualified options if the previously granted options have “filled” the $200,000 annual cap for that calendar year.

The proposed amendments provide that, if the option grant agreement specifies the calendar year when an option becomes exercisable, then the option will be regarded as becoming vested in the year specified even if the option could become vested prior to the year specified as a consequence of an event that is not reasonably foreseeable at the time of the grant. In any other case, the option will be treated as becoming vested in the first calendar year in which the option can reasonably be expected to be exercised. This definition could create considerable uncertainty for options that have performance-based vesting conditions (such as achieving specified performance or rate of return metrics or completing a liquidity event).

Employer Deduction

The Income Tax Act (Canada) includes a longstanding prohibition on an employer deduction for the option benefit realized by an employee. However, Budget 2019 indicated that this might change if option benefits are fully taxable and the Employee Deduction is not available.

The proposed Employer Deduction represents a significant change in tax policy but is narrower than we had hoped it would be. The proposed amendments provide for an Employer Deduction in the year an employee realizes the option benefit on options that are non-qualified options because the employer has designated the options as being non-qualified options or because the options are not within the $200,000 annual cap.

The Employer Deduction is equal to the option benefit realized by the employee. The deduction is subject to certain conditions, including:

  • the employee would have been entitled to the Employee Deduction if the options were not non-qualified options;
  • the employer has notified the Minister of National Revenue, in prescribed form in its tax return for the taxation year in which the options are granted, that the options are non-qualified options; and
  • the employer has given written notice to the employee at the time the options were granted that the options are non-qualified options.

As now proposed, the Employer Deduction would not be available where – as is very often the case – the non-qualified options are granted by a parent corporation to employees of a subsidiary. It is unclear whether that was intended.

If the Employer Deduction results in a loss to the employer, the loss would be treated as a non-capital loss to the employer. This provides certainty that the Employer Deduction is not subject to a further determination as to whether the expenditure was incurred on income or capital account – a welcome clarification given the uncertainty arising from several court cases dealing with the tax treatment of option cancellation payments made by employers.

Employer reporting and designation requirements

Employers, other than CCPCs and “start-ups, emerging or scale-up companies,” will be required to notify the employees in writing at the time of grant of options that would otherwise be qualified options if the options are non-qualified options because the employer has designated the options as being non-qualified options or because the options are not within the $200,000 annual cap.

The employer will also be required to notify the Minister of National Revenue, in prescribed form in the employer’s tax return for the taxation year in which the options are granted, that the options are non-qualified options.

It may be difficult to comply with the notice obligations in the case of options which vest otherwise than in specified calendar years.

Delayed implementation until 2020

The proposed amendments will only apply to options granted on or after January 1, 2020 (after the next federal election). Delaying the implementation of the proposed amendments allows the government additional time to respond to the feedback received through the consultation before finalizing the amendments.

References:

Canadian government introduces tax legislation applying to employee stock options granted on or after January 1, 2020, published June 21, 2019:

https://www.osler.com/en/resources/regulations/2019/canadian-government-introduces-tax-legislation-applying-to-employee-stock-options-granted-on-or-afte

2018 Economic Outlook for Canada

2018 Economic Outlook for Canada

The 2018 economic outlook for Canada, according to Pierre Cléroux @PierreCleroux VP, Research and Chief Economist, BDC, is strong. The Canadian dollar will hover around $0.80 USD.

2018 Economic Outlook Video by Pierre Cléroux

Hello everyone.

Regarding the 2017 Economic Performance

  • Canada had an impressive economy growth of 3.1 percent in 2017.
  • Our economy weathered the oil price shock and is now on solid footing.
  • Export and business investments are up.
  • And the job market is thriving.

2018 Economic Outlook

What should we expect for 2018?
  • The world economy is improving as commodity prices are increasing.
  • The US economy our main trade partner is also gaining momentum.
  • All this is having a positive impact on Canada as demand for our products and services will be stronger.
  • We expect to have solid growth of over 2%.
  • In 2018 next year all Canadian provinces will have positive growth.
  • Provinces with the strong manufacturing base such as Ontario, Quebec, BC, and Manitoba will continue to benefit from our low [Canadian] dollar and the strong demand from the US.
  • On the other hand, oil producing provinces Alberta, Saskatchewan in Newfoundland Labrador will benefit from a stronger oil price.
However in all this positive outlook, there are some things to watch for.
First as the economy improves, we should see an increase in interest rates, both in Canada and the US. This will not be significant but nevertheless will increase the borrowing costs for business owners.
Second there are uncertainties related to the renegotiation of the NAFTA free trade agreement. We don’t know yet what would be the end of the NAFTA negotiation, but we believe that the US will remain an important and an interesting market for Canadian businesses.
Finally the Canadian dollar will remain around 80 cents in 2018.

What are the implications for Canadian entrepreneurs? 

  • As the world economy is growing this offers incredible opportunities for business owners.
  • There are few headwinds, but a lower dollar would continue to be an advantage for exporters.
  • Also let’s not forget that CETA, the new trade agreement we have signed with the European Union, will facilitate access to our market of half a billion people.
  • With interest rates still low, now is the right time for Canadian entrepreneurs to make the necessary investment to grow become more productive and more competitive.

Stephen Poloz: Bank of Canada governor on Canada’s economic future in 2018

00:45
that keep its governor Stephen poloz up
00:47
at night I had the chance to speak with
00:49
governor polos in an exclusive
00:51
one-on-one interview earlier today
00:53
here’s the first part of our
00:54
conversation governor welcome back to
00:58
the show
00:59
delighted nice to see everyone else has
01:01
begun this year or ended this year begin
01:03
to set us up for next year with the
01:05
economy’s doing great the markets are
01:07
going like gangbusters jobs are being
01:09
added and you come in to throw cold
01:11
water on the whole thing you you found
01:14
stuff that keeps you up at night even as
01:16
the economy is doing so well so that’s a
01:18
bit unfair as I did talked about you
01:20
talked about how well is doing we’ve had
01:22
a great year and you know since I became
01:25
governor it’s really the first really
01:26
good year and all the rest we’ve been
01:29
just playing defense right you know so
01:31
it’s been great to see things coming
01:33
together and our confidence is
01:36
increasing there are still some left
01:38
over things to do you know so we don’t
01:40
want people to forget those things and
01:42
just assume everything’s perfect cuz
01:44
it’s not how important is that part of
01:46
your job though to go and look for where
01:49
the risk is because I think we could be
01:50
blinded by it with everything that is
01:52
going so well right now well I think
01:53
it’s it’s it’s really all I think of
01:55
monetary policy it’s most people think
01:58
of it it’s kind of like an engineering
01:59
exercise when you know what the economy
02:01
is doing you just tweak like this and
02:03
everything’s perfect but in reality we
02:05
don’t know enough to be able to do that
02:07
and if you take that uncertainty into
02:10
your policymaking instead of just
02:12
assuming it
02:13
which is what the previous example does
02:15
then you start thinking about more as a
02:17
risk management exercise right so which
02:20
risk is worst that I face and how do I
02:22
protect against that which risk would
02:24
actually be good and in which case I’ll
02:26
let that go if it happens as you said
02:29
this is the first good year you’ve had
02:30
since since your tenure began has the
02:33
role changed as the economy has started
02:35
to climb back out again were you then
02:38
looking for sort of signs of good in the
02:40
economy to sort of tell us this and it’s
02:42
gonna get better in a couple quarters
02:43
down the road and now it’s shifted a
02:45
little bit you know we we went through a
02:47
phase when I first came which we ended
02:49
up calling serial disappointment Breck
02:51
as we had one step forward and then
02:53
another step back and nothing seemed to
02:55
go in a nice trend and then the oil
02:57
shock hit and of course this was at that
03:01
time we were actually getting quite
03:02
encouraged and men boom aw Christ shock
03:05
meant a two-year delay in that process
03:07
of getting back to where we belong and
03:09
so when I look at it like there’s never
03:12
really been a period that I could call
03:13
typical well you know every every period
03:15
has been unique we’re in a we’re in a
03:18
phase in history which is unique we hope
03:22
it stays unique because it’s a post
03:24
crisis economy where we still have
03:26
legacies legacy effects throughout our
03:29
economy and much even bigger ones in
03:32
other economies so nothing is as what
03:35
usually is is done you said in the
03:38
speech the economy is operating near its
03:40
capacity growth is forecast to run above
03:42
potential and yet at the same time to
03:44
remain slack in the labor market and
03:46
that that poses a downside risk to risk
03:48
inflation is that like having two
03:50
opposing thoughts in your head at the
03:51
same time and is that a big part of it
03:54
is trying to balance out where the good
03:55
is and where the bad well this is what I
03:57
mean by risk management so for us we say
04:00
you know by conventional measures the
04:02
economy is running basically at folk
04:03
full steam but we can see in the labor
04:06
market there is there’s excess capacity
04:09
there this is the sort of divergence
04:12
that happens when you have slow cycles
04:14
like we’ve had normally those things
04:16
would be perfectly correlated with each
04:17
other right and so right now they are so
04:19
what we want is the economy to grow
04:21
hotter for a while so that it uses up
04:24
that access
04:25
see that’s still in the labor market and
04:27
the way that will happen is companies
04:29
won’t invest more create new capacity
04:31
with more people and raise our level GDP
04:35
throughout okay so that’s the process
04:37
what I call a sweet spot that we’re
04:39
watching unfold now and it could last a
04:41
year or something in the US economy
04:44
well last 18 months or so always been in
04:46
that same place and I mean you mentioned
04:48
your three concerns where cyber threats
04:52
what was the other one house and and
04:54
housing prices and indebtedness and then
04:57
of course job concerns for the job
04:59
market for young people do all of those
05:01
sort of rotate around those the you know
05:03
business investment and exports and how
05:05
we as an economy are dealing with those
05:07
two core things well yeah some what some
05:10
do a cyber I think it was an independent
05:12
thing which is not really dependent on
05:15
the cycle or anything like that and but
05:18
the other two are actually longer-term
05:20
issues so they’re you know what we hope
05:22
is that those folks who are young who
05:24
have dropped out of the workforce so
05:26
they’re not counted at unemployment rate
05:28
today will return you know as the
05:31
conditions continue to improve in only
05:32
the last month we saw some signs of that
05:34
so sure so we’re encouraged by that and
05:36
you know there are like four percent of
05:38
them that were in the workforce before
05:40
and aren’t there now in terms of the
05:42
household debt thing a governor can’t
05:45
give a speech without talking about that
05:47
because that’s our number-one concern
05:48
and the fact is we’ve accumulated all
05:52
that in the post-crisis period it was a
05:55
byproduct of the monetary policy we
05:57
followed we understand all that and so
05:59
what we want to do is make sure that we
06:01
don’t do something abroad or in someone
06:03
to put a put our our future outlook in
06:05
danger
06:06
by under estimating how important that
06:08
is it’s important in two ways if
06:10
interest rates are higher today has a
06:12
different effect because of the level of
06:13
debt but secondly the the vulnerability
06:16
is there so that if there were a shock
06:18
like we had in 2008 today the effects
06:21
would be much larger on the economy
06:23
that’s a magnifying effect and so that
06:25
vulnerability becomes an actual risk if
06:27
some some some shock hits and so what we
06:30
want is the economy become more
06:32
resilient more sustainable through time
06:34
hence the changes to the mortgage rules
06:36
etc
06:36
and really quickly on on just sort of
06:38
the direction of things you’re sounding
06:40
a cautionary tone the us pushing ahead
06:42
really quickly and plans to have a
06:44
number of hikes over the next year’s I
06:46
think we’re they’re gonna be up three
06:47
point one percent at three point one
06:49
percent by 2020 can we afford to take
06:51
that cautionary stance as we see a
06:54
divergence in interest rates in the US
06:55
well it’s very important that we have an
06:57
independent monetary policy our
06:59
inflation targets are our inflation
07:00
targets missile witness that back in
07:03
2015 when the oil price shock was really
07:05
having its effecting the economy we cut
07:07
rates twice a year while the Fed raised
07:09
rates so that’s proof that we can have
07:11
an independent policy because that all
07:13
shock were a year or two behind the u.s.
07:15
in the cycle and so we have some more
07:18
time in front of us and so I think we
07:21
can have our independent policy while

07:22
the Fed goes about its business the