Such willingness to seek out new learning opportunities is what makes Royal Roads University MBA students such a pleasure to teach, says Dr. Márquez, Dean of the university’s Faculty of Management. And, he adds, it’s why a Royal Roads graduate makes such a terrific addition to the workplace.

Royal Roads left behind its roots as a West Coast military college 15 years ago, reinventing itself as a new kind of university – one that puts real-world work experience on par with academic learning to shape a unique learning environment.

Its MBA program incorporates that ethos into everything it does. It starts by making the most of the wealth of knowledge the students themselves bring from across Canada to the stunning ocean-front university, located in Greater Victoria.

“The average age of an MBA student at Royal Roads is 41,” says Dr. Márquez. “These are people already working in management careers. They’ve got a good list of successes and failures already under their belts. They come to Royal Roads because they really want to learn how to become better managers.”

An MBA program for mid-career adults must be designed to respond to the specific needs of busy professionals. These individuals need studies that not only fit their tight schedules, but build on their own experiences and observations for a more powerful learning outcome.

“These students are eager to learn and highly motivated, but they won’t take theory just as theory,” says Dr. Márquez. “They want to know how that concept is going to change decision-making in the boardroom back at their workplace.”

Much of the learning for Royal Roads’ 18-month MBA program is done online.  The distance learning component allows students to continue to work and maintain family responsibilities while studying. Despite the difficulties that go along with traditional distance learning programs, Royal Roads programs are designed to ensure success through supportive faculty, innovative program delivery and collaborative team work.

Two critical three-week residencies at the beginning and end of the program allow students to meet and build connections with fellow classmates and faculty. The residencies give students time with their classmates to unite as a team.

Royal Roads selects instructors based on their own real-world experiences and teaching skills, and its Advisory Council of business and community leaders work to keep the MBA curriculum current.

Having a Royal Roads MBA graduate on staff benefits employers in a number of ways says Dr. Márquez. Every student compiles a case study on a business problem that is frequently drawn directly from their own workplace.

“Employers get an individual with not only significantly strong business skills, but capable of working with others on problem-solving,” says Dr. Márquez.  “They get someone who has learned how to learn and can apply the new tools they’ve acquired. And they may get a specific problem solved, too.”

Students with an undergraduate degree and seven years of professional experience can be considered for this MBA program.  Royal Roads recognizes that some applicants may not have completed an undergraduate degree, and, instead, may have acquired significant knowledge and experience through work and life experience; these applicants can apply to the program through the university’s flexible admission process.

“People come for the learning and end up on a journey of self-discovery that transforms them and the work they do,” says Dr. Márquez. “The age and maturity of the students, the beauty of this place – it all lends itself to reflection.”

- Jody Paterson

In addition to the fundamental courses found in most business programs, Memorial’s MBA program is distinguished by mandatory courses focusing on business ethics, leadership skills and international business, as well as the ability to focus on real-world applications of business concepts.

Dr. Wilfred Zerbe, Dean of Memorial’s Faculty of Business Administration, says such an approach ensures that the school’s graduates are well suited to handle the specific challenges of the 21st Century business world. “For decades, leaders in business education have called for an emphasis on the importance of ethics and the development of leadership and interpersonal skills, alongside the development of financial and business analysis acumen,” says Dr. Zerbe. “The Faculty of Business Administration at Memorial responded to this call early, and we continue to ensure that our program and courses are relevant to business today.”

Memorial’s emphasis on business ethics is largely due to the pioneering work of Dr. Robert Sexty, who retired after a 35-year career in 2007 and was subsequently named the Faculty of Business Administration’s first professor emeritus.

A longtime advocate for social responsibility, Dr. Sexty’s 1978 course Social Responsibility Management became the first required business ethics course in a Canadian MBA program. Dr. Sexty went on to author and co-author several books and papers on business ethics, including the 2008 textbook Canadian Business and Society: Ethics and Responsibilities.

Staying abreast of both technological and social trends has been part of Memorial’s DNA over the decades, with more recent innovations including courses in social media, management consulting, and the creation of courses that can be completed by distance – enabling students to balance education, work and family.

In addition to the required international business course, Memorial students can also participate in one of 16 international student exchange partnerships. The emphasis on international learning is reflective of both the global business culture and Memorial’s distinct geographic location says Dr. Zerbe. “When we look at what’s relevant and important for organizations and employees in today’s business environment, that international cross-cultural element is critical,” he says. “This is especially true for our students here in Newfoundland and Labrador because we’re an island; our markets are always going to be overseas.”

In its 30-year plus history, Memorial’s MBA program has produced such notable alumni as Brendan Paddick, CEO of Columbus Communications Inc., and Joseph Randell, President and CEO of Air Canada Jazz. “Graduates of our MBA program lead organizations not only in Atlantic Canada, but Canada as a whole,” says Dr. Zerbe. “Our alumni have done extremely well in their careers, particularly in business sectors such as finance.”

In 2002, Memorial became the first school in Atlantic Canada to receive accreditation from the Association to Advance Collegiate Schools of Business (AACSB), and has earned a reputation as one of the country’s most decorated business schools. Memorial MBA students have been particularly successful in the world’s oldest and largest MBA case competition, having the best record at the John Molson MBA International Case Competition.

According to Dr. Zerbe, the success of Memorial students in such competitions, and the career success of Memorial MBA graduates in leadership positions across Canada, is attributable to the university’s high level of engagement with the business community, members of which serve as mentors, judges of practice cases and classroom speakers. “We regularly use a case about RBC Financial group and our MBA students are judged by a long time RBC board member, retired RBC vice presidents, and current RBC executives,” says Dr. Zerbe.

Memorial’s reputation for excellence also extends to its faculty. It is the only business school in the country to have three professors win the National Post’s prestigious Leader in Management Education award.

With such an emphasis on engagement, quality and relevance it is no surprise, then, that Memorial University shines so brightly.

Legendary investor Warren Buffett has an often-repeated quote about the kind of people companies should hire. “In looking for someone to hire, you look for three qualities: integrity, intelligence and energy,” Buffett said.
“But the most important is integrity because if they don’t have that, the other two qualities, intelligence and energy, are going to kill you.”

>>>Read the full Article here!<<<

While Buffett said this many years ago—well before
the current financial meltdown—his words resonate
today. And perhaps more than ever, in part because of
the challenges of the current economy, business schools
across Canada take the responsibility of helping
cultivate and nurture talent very seriously. That is also
due, in part, to the fact that many companies today
continue to turn to MBA schools to help and them
the kind of bright minds equipped to propel business
ideas forward.

Canada has the scientific talent and world-class facilities to become the leader in life sciences research. But it will need to dramatically increase access to new medicines and vaccines to get there.

Canada should have a thriving, robust knowledge-based economy fuelled by the life sciences research sector. After all, its public health care system is the envy of most countries, and boasts world-class talent and infrastructure, from its universities and hospitals to its healthcare centres and research facilities. Yet of the almost $100 billion being invested globally into the discovery of breakthrough new medicines and vaccines each year, Canada’s share is a relatively paltry $1.2 billion.

“If we could double that amount, imagine the exciting research that could potentially improve and save people’s lives,” Russell Williams, president of Canada’s Research-based Pharmaceutical Companies (Rx&D) says in an interview in which he outlines an innovation equation that could help Canada build on its strengths in competing for those global research dollars. “That money would go directly into our universities, teaching hospitals and, in the end, directly into doctors’ offices for patients who need those new medicines.”

Key to economic prosperity

In addition to making discoveries that could improve quality of life, R&D of new medicine is a significant economic saver as well as driver. Studies show that access to medicines can help sustain Canada’s health care system, helping to reduce wait times, hospitalization and surgery and by keeping people healthy and productive in the workforce. “When you look at the country’s demographics, there is a very strong argument to be made that increased access to medicine will be part of the solution in the sustainability of the health care system,” says Williams. “We need to protect the viability of the health care system, which is the cornerstone of some of Canada’s economic development strategies.”

At the same time, R&D into new medicines is an economic driver. Currently, Rx&D represents 15,000 employees working at 50 member companies, is responsible for generating 60,000 jobs across Canada and contributes $5 billion into the Canadian economy annually. If Canada could increase its share of investment dollars made by global, brand name pharmaceutical companies, the effect would be two-fold: the creation of more jobs, which in the sector average more than $100,000 per year, plus a domino effect to other industries connected to pharmaceutical research.

Canada lags

But the competition for those global R&D dollars is fiercer than ever before, as other jurisdictions look to attract those high-paying jobs. “The quality of infrastructure is getting better in other jurisdictions, and the cost of entry has become extremely competitive which is putting Canada at a disadvantage,” says Williams. “Seventy-five percent of the $1.2 billion being invested in Canada is through clinical trials – that is the most flexible money. It can come to us the fastest, but it can also leave the quickest.”

So how can Canada step up and become a global leader in the life sciences sector? While improvements can be made in terms of intellectual property (IP) protection as well as tax reforms, Williams says the last, and most critical part, of the innovation equation is providing increased access to new medicines.

Russell Williams President, Canada’s Research-Based Pharmaceutical Companies

In the Rx&D International Report on Access to Medicines 2009/2010, Canada ranked 26 out of 29 countries, ahead of only Luxembourg, New Zealand and Poland, when it came to reimbursing first-in-class drugs. As well, Canada lags other countries in the public coverage of new drugs in 11 out of 16 therapeutic areas, including cardiovascular, neurology and arthritis. In fact, the Common Drug Review only approves 50% of new drugs, compared to other jurisdictions which approve north of 70%.

“We tend to be slower for the most innovative medicines, which is a concern first and foremost for the patients and healthcare providers but also in terms of encouraging innovation,” says Williams. “What signal are we giving the world when we’re not embracing those kinds of innovations?”

Improve Intellectual Property Protection

Canada can become a world leader in generating jobs and investment in life sciences and the knowledge economy by adopting top of class intellectual property rules, adds Mr. Williams. These include giving innovators an effective right to appeal a patent challenge. This would level the playing field with generic companies who already have the right to appeal an adverse court ruling.

The countries of the European Union also have significantly better rules to protect the data of innovative companies which puts Canada at a competitive disadvantage.

“With only three of 10,000 molecules ending up as an approved new medicine, it costs well over $1 billion in research dollars to discover and bring to market a new drug,” says Williams. “Brand name pharmaceutical companies need proper protection for IP to recoup their investment and re-invest in research and development.”

Canada also needs to adopt a patent term restoration (PTR) mechanism, which helps research-based pharmaceutical companies recoup some of their investment costs by restoring part of the patent term eroded by often lengthy drug reviews and approvals (including from Health Canada, provincial/territorial governments and the Common Drug Review). “This gives a medicine or drug a more active lifespan, but Canada is the only OECD country without it,” says Williams.

Canadians overpay for generic drugs

Innovation in new medicines is also being held back by other factors, including the fact that Canadians pay almost twice as much for generic prescription drugs as Americans, according to a study released late last year by the Fraser Institute.

“To their credit, governments are now looking at reducing generic pricing, and our hope is that those savings are reinvested in innovative medicines that keep the innovative chain going,” says Williams.

He says the industry has also been caught up in excessive levels of bureaucracy, including a multitude of ethical review boards which slow down decision making. “You need an ethical review process, because our industry lives and dies on its ethics,” he says. “But we have a multiplicity of ethical review boards, when in reality we only need one. In a fast-paced world, that can make the difference between a company deciding to invest here or somewhere else.”

Optimism for the future

Williams says there is no magic bullet to the innovation equation. He says it involves all stakeholders, including the public and private sector as well as researchers, to synergistically work together towards a knowledge-based economy. But despite the challenges, he is optimistic Canada can emerge a global leader in the life science’s sector.

“Canada has a real opportunity to build on its strengths, which is our health care system,” says Williams. “We have to help create an environment in which we can grow that $1.2 billion investment, to the benefit of the economy, the healthcare system and, ultimately, the patient.”

www.canadapharma.org

>>>Link to Video!<<<

Geoff Sprang, Director, Corporate Affairs Amgen Canada

“There is increasing concern that Canadians may not be getting access to the best new drugs compared to people living elsewhere in the developed world,” says Geoff Sprang, Amgen’s director of corporate affairs.  “Our current approach for measuring the value of new drugs isn’t living up to its promise. It’s time for all of us engaged in the healthcare community to debate new ideas and new approaches for evaluating healthcare technology to ensure that the best new innovations are made available to Canadians.” It is widely believed that healthcare innovation leads to better patient outcomes and health status improvement, which in turn provides stimuli to overall economic growth and prosperity.

According to Wyatt Health Management’s Rx&D International Report on Access to Medicines, 2009-10, Canada ranked 23rd out of 29 OECD countries when it came to the number of drugs recommended for inclusion in the country’s various public drug plans. As a nation, we rank behind other countries in the proportion of new drugs recommended for coverage in 11 out of 16 disease areas.

The Common Drug Review: Does it reflect the benefits of new treatments?

Since 2003, with the exception of Quebec, provincial and territorial drug plans have relied on a centralized Common Drug Review (CDR) in making their own drug funding decisions.  The CDR is operated by the Canadian Agency for Drugs and Technologies in Health (CADTH), a not-for-profit corporation funded by federal, provincial and territorial governments and charged with making recommendations as to which drugs and medical therapies should be reimbursed by public drug plans.

According to CADTH’s website, one of its primary objectives is to provide advice that considers both the “quality and sustainability” of Canada’s public drug plans by assessing the cost- effectiveness of new drug products. As governments struggle to contain healthcare costs, they naturally have been looking for ways to weigh the cost of new therapies against the anticipated benefit.

Amgen’s Sprang agrees with this goal, but questions whether the current approach is actually able to capture the full value of new therapies. “All of us have an interest in ensuring that healthcare spending is used to maximize benefit,” says Sprang.  “The issue is how we actually define and measure value and ensure Canadian patients can access appropriate therapies and other healthcare innovations.”

Going beyond current measures of value

According to Sprang, one of the central issues with the current approach is its over-reliance on a single measure, known in the health economics field as cost per quality-adjusted life year gained, or $/QALY gained. This measure, which has been used for more than 40 years, looks at the cost of a particular drug therapy versus the expected health outcome and impact on other health system resources.

In more recent years, a debate has emerged as to whether too much emphasis is placed on the $/QALY metric and too little on the other things that patients and broader society also value.

“For example, when evaluating a new medicine that allows someone to return to work sooner or reduces the burden on caregivers in the household, these benefits are not counted in the $/QALY approach because they fall outside the health system,” he says. “Increasingly, people are asking why things like patient convenience, workplace productivity and the burden on family members – which have material and measureable societal and economic benefits – aren’t also included in the assessment.”

Here in Canada, Quebec is the only province that goes one step further by considering societal aspects in their drug evaluations.

PolicyMatters.ca: A forum for discussion and debate

Amgen has been researching alternative models for assessing new healthcare technology that take into account those other factors that society values. As part of its effort to spark a broad public discussion about how Canada can improve upon its model for health technology assessment,  the company is sponsoring an online forum at PolicyMatters.ca which features input from a variety of experts. Amgen is also organizing a panel workshop at the 8^th World Congress of the International Health Economics Association, being held in Toronto in July 2011.

“The fact is, when you look at value simply from a healthcare system perspective, in many cases the assessment of new drugs becomes a budget management exercise,” says Sprang. “By opening up the scope of the evaluation to include a broader basket of benefits,” Sprang continues, “Canadians will be in a better position to determine whether or not to fund a new therapy in relation to the things that actually matter to them.”

Exploring alternative evaluation models

Such an approach does exist elsewhere.  For example, health economists have developed new evaluation models which look beyond traditional $/QALY to incorporate other factors such as the level of innovation, societal benefits, the severity of the disease and unmet needs.  The agency responsible for evaluating health technology in France, for example, uses a five-point scale in determining which drugs should be eligible, while in Sweden, a societal perspective is used that both stimulates and rewards innovation.

“Healthcare decision-making should be based on a larger set of criteria than has historically been the focus. This does not minimize the role of cost-effectiveness as an input into the decision-making process, but rather grounds it more firmly in a broader process as opposed to perceptions that cost-effectiveness is a decision-making ‘rule’,” says Ron Goeree, a professor in the Department of Clinical Epidemiology & Biostatistics at McMaster University. “Using multiple criteria is not a new concept in decision-making and has been used more comprehensively in other fields and in other jurisdictions. An expanded list of criteria is certainly welcome in a climate of transparency since if ‘other factors’ are important considerations, then what these other factors are, and how they are measured and assessed, should be fully disclosed and open for comment and debate.”

These additional considerations, in tandem with traditional methods, would constitute a more comprehensive framework for health technology assessment.  “I think we have the opportunity here in Canada to create a world-leading model for assessing the value of new health technologies,” says Sprang. “We owe Canadian patients a commitment to carry out the most comprehensive evaluation possible when it comes to determining which treatments offer the best value.”

For more insights from Amgen, please go to www.policymatters.ca and click on the video featuring Geoff Sprang.

There’s never been a better time to take a hard look at your investment portfolio.

Maybe you pulled your money out right at the depth of the economic downturn, and have been sitting on the sidelines ever since, scared and unsure of how to get back in. Or perhaps you’ve realized you have too much risk in your portfolio to stomach all the ups and downs – a reality that has seemed to become the new normal for financial markets.

Whatever the case may be, now is as good a time as any to sit down with an independent advisor and take a hard look at your investment portfolio. An independent advisor can help you realize the goals you’ve set for yourself and your family by devising a plan that brings together the right suite of investment products – so that you may buy that cottage outside the city or retire without worrying about running out of money.

Given the market volatility, it is perhaps no surprise Canadians are making new investment choices. According to the 47th quarterly Manulife Investor Sentiment Index, Canadians have shifted away from speculative assets to products that can deliver stable earnings over a longer timeframe. The index shows, for example, that balanced funds ranked third among most-popular investment choices (with 41 percent of Canadians surveyed feeling they are a good or very good place to invest, behind only investing in their own homes and investment real estate).

There has also been increased interest in actively managed mutual funds, in which investment managers use their skills, research and experience to make investments that they believe will outperform a particular index (unlike passively managed funds, which just aim to equal an index). Funds that are actively managed by skilled portfolio managers can offer a number of advantages, not least of which is the fact such funds can help protect investors from deep downturns.

Make no mistake: the volatility and uncertainty of the last two years has created a fundamental shift in how Canadians want to invest. In the following pages, you’ll learn how Manulife Financial – a leading Canadian-based financial services group with a presence in 22 countries and territories worldwide – is helping with that demand through an expanded product and service offering.

Roy Firth, Executive Vice-President, Individual Wealth Management, Manulife Financial, and Paul Lorentz, President of Manulife Investments, share their insights into the volatility of current financial markets and reveal how Manulife provides financial solutions in an unstable economic environment.

Manulife Investments, emphasizing active management, delivers a breadth of products to help advisors and investors move forward with confidence.

Solid economic data indicating both Canada and the U.S. are in recovery mode suggest investors finally have reason for optimism after several very challenging years. Yet investors still have ground to recover and many steps still lie ahead as they take charge of their financial futures. Indeed, in a wide-ranging interview, Roy Firth, Executive Vice-President, Individual Wealth Management for the Canadian division of Manulife Financial, reveals that many investors remain paralyzed by fear and uncertainty, and are unsure how best to adjust their investment portfolio mix following a period of unprecedented market volatility.

“The markets have gotten back on track in a relatively short time, but there will still be some hiccups in the market. Volatility is something that investors today will need to learn how to live with moving forward,” says Firth. “Investors need to accept volatility as a given and learn to effectively manage their financial affairs around it.”

J. Roy Firth

Consulting with an independent advisor is a key first step, Firth says. Because advisors specialize in constructing a diversified investment strategy well-matched to an investor’s individual needs and aspirations, Canadians who opt for this approach are more likely to navigate market fluctuations with confidence, he believes, adding: “A well-designed plan will reduce the emotional stress that volatility can create.” Savvy investors will work with their advisors to ensure that a portion of their wealth remains invested even during highly volatile periods.

Firth contends working with an advisor is particularly critical for baby boomers focused on realizing their plans for retirement as opposed to working well past retirement age.  Indeed, he says, investors without a plan will often end up waiting long after the recovery has begun to move back in, thus missing a good chunk of potential gains. Attempting to “time the market” has not proven to be a successful investment strategy.

“As baby boomers approach retirement age, there is very much a need for financial planning and advice from a professional advisor, and there has been a renewed demand for products to help attain retirement goals,” says Firth. “In the past few years, at Manulife we have introduced a number of innovative new products and planning tools that help advisors help clients through this phase.”

As investors and advisors shift their emphasis from accumulating assets and building wealth, and focus more on capital preservation and guaranteed income, Manulife has led the Canadian marketplace with the launch of the first Guaranteed Minimum Withdrawal Benefit (GMWB) plan, known as IncomePlus. IncomePlus helps protect against market downturns by providing a vehicle that offers sustainable and predictable income. Underlying the product are more than 40 investment funds managed by top Canadian investment managers.

“Pre-retirees and retirees need to protect the wealth they’ve worked so hard to accumulate,” says Firth. “But as Canadians live longer, they also need to plan for some growth, which means incorporating equities into a portfolio.”

For investors nearing or in retirement, advisors can also employ other new tools from Manulife, such as Product Allocation, which helps calculate the optimal combination of investments for both growth and guaranteed income. “For investors in this critical stage of their lives, this is a unique tool that can help advisors and investors construct the most appropriate portfolio,” says Firth.

“One of the strengths that differentiates our company from other financial services providers is that Manulife has been managing money for more than 120 years on behalf of clients” says Paul Lorentz, President of Manulife Investments.  “We employ a disciplined approach to investing and are not distracted by short-term ‘noise.’ This is seen by the consistent long-term records of funds such as the Manulife Monthly High Income Fund.” Manulife Mutual Funds has also introduced a number of new mutual funds designed to meet the needs of investors. “Our philosophy has been making sure we have a broad product shelf as well as the right asset management breadth and depth behind those products.”

“Manulife Mutual Funds adheres to an active management approach, in which investment managers use a combination of experience, judgment and skill to create a mix of investments that aim to outperform their asset class/index. Particularly in a down market, active management can provide a margin of safety,” explains Lorentz. “If you just ride the index, you basically just ride the market. But if you have good active management with managers who have done their due diligence, that can help protect you amid varying market conditions.”

Responding to the current needs of advisors and investors, Manulife Mutual Funds has introduced a number of income-oriented mutual fund products. “With interest rates at historically low levels, investors are concerned about getting a good return,” explains Lorentz. “We have seen a lot of success through products such as the Manulife Yield Opportunities Fund.”

Launched in early 2010, the Manulife Yield Opportunities Fund aims to generate income and long-term capital growth through a diversified portfolio

Paul Lorentz

consisting of yield-oriented Canadian and/or global fixed-income and equity securities. “Today, at Manulife we have more than 100 investment professionals globally who are focused solely on fixed income,” says Lorentz. “They are on the ground in countries around the world, and that has created a lot of benefits for our investors.”

While investors have moved towards a more conservative approach to investments through an emphasis on yield, fixed income and balanced products, Firth cautions that even income-focused investors should not shy away from equities, as those securities may offer great potential for capital growth.

“Understandably, people want to retain their wealth as opposed to looking for that home run,” says Firth. “But there is also the risk that people don’t have enough risk in their portfolios. That is why it is important to have an advisor so that an investor can stay appropriately diversified in the market and can take advantage of equity market upturns.”

There are also significant opportunities in emerging markets. “Everyone is talking about the growth of China, but it is impractical and would be overwhelming for an individual investor to figure out what to invest in,” says Lorentz. “We have a number of strong performing global funds, like the Manulife Strategic Income Fund, Manulife Global Opportunities Balanced Fund, Manulife World Investment Class and Manulife Global Focused Fund which have performed very well and tap into that global growth potential. One of the advantages of our Manulife Strategic Income Fund, for example, is that it is managed 24 hours a day – once the markets close in North America, portfolio management moves on to our teams in Asia, and so on.”

In fact, Manulife’s breadth of investment management teams globally allow advisors and their investors to take advantage of new products that the average retail investor simply doesn’t have access to, says Lorentz. “Manulife has been an established presence in Asia since 1897, so when we talk to our asset management group there, they have a strong understanding of the equities and bonds available in the various countries,” he says.

Ultimately, Firth reiterates that Canadians are best served by working with an advisor to devise a financial plan that takes advantage of the breadth and depth of investment products. That is why Manulife’s web site features the ‘Find an Advisor’ section, which can help match investors with advisors located nearby in their communities who may be best suited to their particular situations.

“An advisor should help guide the client in making investment choices and help manage their overall portfolio,” says Firth. “By working with an advisor who understands their needs, concerns and desires, investors can feel more confident knowing they have the most appropriate products to reach their financial goals.”

Canada has clearly been impacted by the global economy.

After two years of economic upheaval, there are still trouble spots in the European zone and the U.S., but Canada, like Brazil, can be considered a leader on the global stage.

Canada’s economy has become less dependent on the U.S. as it develops trade with developing markets such as China. In fact, over the past 10 years, Canada’s trade with the U.S. has decreased from to 74 to 64 per cent.

Canada’s close ties with the U.S. mean Canada would inevitably be affected if, as the Economist Intelligence Unit (EIU) expects, the U.S. economy slows in 2011. High unemployment, combined with high debt levels, suggests U.S. consumers will enter a prolonged period of financial restraint. The U.S. 2010 unemployment rate of 9.7 per cent – a figure that does not include the underemployed – is expected to stay above 9 per cent for the next two years.

Globally, developed countries, including those in the European Union, face an extensive deleveraging cycle. Emerging economies such as China, however, continue to strengthen but also face structural challenges. Overall, a double-dip recession seems unlikely and many global organizations are feeling more optimistic about the future.

Canada’s economy grew by just 0.3 per cent, quarter over quarter, from July to September 2010, down from 0.6 per cent growth in the preceding three-month period. The economic recovery is taking longer than anticipated and has started to lose momentum even in Canada.  The EIU forecasts that Canadian GDP growth will slow to an average of 2 per cent in 2011.

Canadian consumer debt equals approximately 150 per cent of Canadian consumers’ disposable income, and the necessary deleveraging will clearly impact consumer spending in the coming year. Reducing unemployment and increasing income levels will be even more critical to kick-start spending.

Fortunately, the Bank of Canada will likely keep interest rates low for most of 2011 while it keeps an eye on core inflation and troubles in the U.S. and the European zone. Although consumer confidence rebounded slightly in the last two months of 2010, more than half of consumers still say this is not the time for major purchases such as houses, cars or appliances.

Over the past two years, purchases were based more on need than want, and consumers were more likely to eat at home. As a result, there’s been a paradigm shift in consumer behaviour. Value has become paramount, with increased focus on private label and less focus on discretionary spending. Value and the demand for quality, price and service have become embedded in the consumer psyche, but value should be defined in reference to brand, not merely discounts.

Willy Kruh, Global Chairman, Consumer Markets, KPMG

Advances in technology, and a growing concern for sustainability, will continue to have far-reaching implications. Canadian consumer companies will be challenged by the nature of a changing demographic landscape. Over 70 per cent of Canada’s population growth comes from immigration, and a large number of aging boomers are preparing to retire.

Consumer companies that want to be successful will have to step up and meet the requirements and needs of this new consumer. That doesn’t mean tactics such as free shipping, HST-free days, better packaging and viral ads will not be effective.

Outlook for Canada

Canadian companies have become leaner as a result of these tough economic times. They’ve been forced to better manage inventory and SKUs, become more competitive and more prepared to compete – not just in Canada, but on the global stage. Combining the effectiveness of operations with quality, service and potentially price will be key to future success.

Food and beverage companies weathered the recession better than other sectors because of necessity, home dining and the growth of emerging economies; they are now leading the way with renewed optimism. Retailers and consumer companies will continue to target emerging markets.

Conversations with industry leaders at a recent KPMG–Retail Council of Canada executive roundtable revealed that initiatives such as better training, customer service and enhanced service offerings are imperative for companies that want to capture and compete for the consumer dollar. At the end of the day, quality, price and service are about execution.

Two years of recession have forever changed the Canadian retail and restaurant landscape.

“There’s a greater focus on creating an exceptional and exciting shopping experience that has an element of entertainment,” says Willy Kruh, Global Chairman, Consumer Markets, KPMG. “Retailers are thinking of new ways of ‘wowing’ consumers and trying to exceed their expectations each time they make a purchase.”

Mike Kennedy Partner, Consumer Markets, KPMG Vancouver

Restaurants are also focusing more on the “wow factor,” says Mike Kennedy, Partner, Consumer Markets, KPMG Vancouver. After experiencing multi-year growth before the recession, many quick-service and casual chains were forced to close outlets as consumers switched to home-cooked or prepackaged meals.

That trend is now slowly reversing as discretionary spending picks up and restaurants see an increase in sales. “Restaurants are building their brands and selling the benefits of dining out,” says Kennedy. They’re also renovating existing locations, enhancing the dining experience and opening new locations. More creative menu options include healthier choices and international foods that appeal to both boomers and millennials.

Price still a concern among Canadian consumers

A strong Canadian dollar, combined with global online and cross-border shopping, has created an ultra-competitive retail landscape. Now, foreign-owned retailers such as Victoria’s Secret, Target and J. Crew are entering the Canadian market and are expected to control the majority of sales by 2016.

“After seeing two-and-a-half years of in-store discounts and online price comparisons, consumers have become accustomed to good deals, and price will continue to be a necessary strategy,” says Michael Baratta, Partner and Retail Leader, KPMG Montreal.

Many consumers are now looking to “trade up,” using savings obtained from shopping at discount retailers to buy luxury items. As a result, discount

Michael Baratta Partner and Retail Leader, KPMG Montreal

retailers are flourishing by attracting more middle-income customers seeking deals. At the same time, global luxury sales are on the rise and are expected to grow 10 per cent to U.S.$235 billion.

Multi-channel retail: The key to growth

Online sales grew at a double-digit rate in 2010, and shoppers now want online access to everything. While only about 20 per cent of consumers shop online, and less than 10 per cent of all dollar sales come via online transactions, about 70 per cent of shoppers go online to compare prices and get more product information.

“As the economy rebounds and spending starts to increase, all retailers should have online marketing and sales as part of their business strategies,” says Baratta. “Shoppers want the convenience of online formats, along with the bricks-and-mortar experience.”

The new multi-channel shopper spends about four times more annually than consumers who use only one channel. Companies who get multi-channel retailing right can expect to see larger profit margins and higher annual revenue growth. Meanwhile social networking has the potential to revolutionize the industry.

Yet Kruh believes Canadian retailers are still not moving fast enough to embrace this trend. With new mobile applications enabling consumers to scan for price and product information, Canadian retailers will have to ramp up product barcoding in the near term. They’ll also need to catch up with regions such as Asia, which generated almost half a billion mobile retail transactions in 2009.

By 2015, shoppers around the world will use mobile technologies such as smartphones and tablets to purchase goods and services worth nearly $120 billion, or 8 per cent of the total e-commerce market. Now that’s a changing consumer landscape.