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Mark Machin’s memo to staff following his resignation as the head of the Canada Pension Plan Investment Board suggests there may have been an unspoken justification for his actions, some observers say.

The abrupt resignation of the head of the Canada Pension Plan Investment Board after it was revealed the 54-year-old was vaccinated against COVID-19 in Dubai has sparked a new round of debate over vaccine queue jumping and non-essential travel by business leaders and government officials during the pandemic.

Mark Machin, who piloted the nearly $476-billion CPP pension fund to an annualized five-year return of 9.7 per cent since taking over the fund in 2016 — most recently through the thick of the pandemic — tendered his resignation, which was accepted by the CPPIB’s board of directors, late Thursday.

“We are very disappointed by this troubling situation and we support the swift action taken by the board,” Katherine Cuplinskas, a spokeswoman for Finance minister Chrystia Freeland, said in an emailed statement.

CPPIB operates at arms-length from government, but its board is appointed by the federal finance minister. Freeland spoke to the pension board’s chair, Heather Munroe-Blum, on Friday and “made clear that Canadians place their trust in CPPIB and expect it to be held to a higher standard,” Cuplinskas said.

A doctor by training and investment banker by career, Machin told staff in a memo Thursday night that the trip was deeply personal, and that he was still in the UAE with his partner, according to The Canadian Press.

A former pension official said Machin has two daughters, who remained in Asia when the London-born executive’s duties pulled him to CPPIB’s headquarters in Toronto.

Machin’s memo to staff suggests there may have been an unspoken justification for his actions, said two veteran corporate directors, who spoke on condition that they would not be identified.

One director said it could be as simple as not being a full-time Canadian resident, adding that he doesn’t think “shaming people” for getting vaccinated reflects well on Canada or its politicians. This is particularly the case, he said, when there are thousands of Canadians spending the winter in the United States “including a number of CEOs and most have been vaccinated.”

The other longtime director, who has served on the board of both public and private organizations, said he didn’t think Machin’s behaviour was a firing offence, and praised his performance at CPPIB after taking over as CEO on relatively short notice when Mark Wiseman left in 2016.

But Richard Leblanc, professor of governance, law and ethics at York University, said he could not think of a reason that would justify the decision to “jump the line” in Canada where there is no private market and the vaccine is being delivered as a “public good.”

”If there were exceptional circumstances for a particular CEO, then there should be permission from stakeholders, including any regulator or governmental entity for a Crown or quasi-Crown company,” Leblanc said.

“This issue is largely moral leadership, and leading by example.”

A senior government official said the finance minister was not aware of Machin’s trip ahead of time and would not expect to be apprised because of the arms-length relationship.

Canada is just beginning to vaccinate the public at large, beginning with those over 80. The country’s inoculation program began in long-term care and retirement homes, and hospitals.

A handful of government and corporate officials have been censured for either jumping the queue to get a COVID-19 vaccine, or for engaging in non-essential travel, which has been discouraged by the federal government during the pandemic.

Rod Baker, the 55-year-old chief executive of Great Canadian Gaming, resigned last month after to was revealed that he had chartered a private plane to a remote Yukon community to get vaccinated along with his wife.

Ontario’s then-finance minister Rod Phillips, meanwhile, lost his cabinet seat after it was revealed that he had travelled to St. Barts in the Caribbean in December.

And Dr. Tom Stewart, CEO of St. Joseph’s Health System and Niagara Health, resigned from Ontario’s COVID-19 advisory board after leaving the country over the Christmas holidays for a trip to the Dominican Republic.  

Leblanc said a business leader or politician leader might argue that the travel is for personal reasons, not on behalf of the company or the country, but an organization’s brand is always associated with its CEO.

“The CPPIB board did the right thing. It acted decisively,” he said, adding that the pension organization’s decision to name a new CEO right away would “mitigate reputation risk, and (avoid) disruption and a CEO search.”

John Graham was named Friday as Machin’s successor, becoming the third CEO at the investment arm of Canada’s largest pension in less than nine years.

Machin had emerged as a bit of a surprise to observers when he got the job in 2016, having only joined the pension manager four years earlier as president of CPPIB’s operations in Asia, based in Hong Kong.

He quickly rose through the ranks to lead all CPPIB’s international investment activities, and his appointment as CEO made him the first non-Canadian to run the investment organization responsible for the retirement savings of Canadians.

Before joining CPPIB, he worked at Goldman Sachs for more than 20 years, helping establish a capital markets office in Hong Kong office and rising to the position of vice-chairman for Asia (outside Japan), based in Beijing.

Accepting his offer of resignation this week, the CPPIB board issued a statement that lauded Machin’s performance, international perspective, and “outstanding leadership” as CEO.

2/26/2021 5:41:25 PM

The mental health of the working population is a threat that employers and shareholders must confront.

If you (re)read The Plague earlier in the pandemic, then you were ready for what we’re going through now.

“Rieux and his friends now discovered how tired they were,” Albert Camus said of his protagonist after the quarantine had dragged on longer than anyone had ever imagined. “Dr. Rieux noticed it when he observed the steady growth of a strange indifference in himself and in his friends,” he continued. “Men who up to now had shown such a lively interest in any news about the plague, no longer bothered with it.”

We’re well into what the late psychiatrist Beverley Raphael would have called the “disillusionment” phase of the COVID-19 disaster. The “heroic” stage, when we were all in this together, is a distant memory, while the “honeymoon” phase — that blissfully naive summer of 2020 when a V-shaped recovery briefly looked possible — feels like a fever dream.

The final destination on Raphael’s psychological mapping of the human response to disasters is “reconstruction,” which tends to begin around the first anniversary of the moment when everything changed. And, sure enough, if you squint, as Bank of Canada governor Tiff Macklem did this week, you can see better days on the horizon.

“We expect a solid rebound in the immediate months ahead,” he said in a speech on Feb. 23. “With vaccinations expected to ramp up, we can be more confident in sustained strong growth through the second half of the year and into next year.”

Still, the governor conceded, the virus and its variants could yet wreck his optimistic forecast. For now, uncertainty reigns, meaning frustration and anxiety do, too. That’s a societal problem, first and foremost, but one that also threatens the economic recovery. Yet our fragile mental health is rarely discussed in economic terms.

“There’s a lot of consensus that we are living through a low-grade trauma,” said Amanda Matejicek, a Mississauga, Ont.-based coach who has a PhD in organizational psychology.

Think about what that means. About 20 per cent of Canadians have been diagnosed with depression, according to a poll that Mental Health Research Canada commissioned in December — the highest level the group has recorded.

The reconstruction phase of disaster recovery is no picnic. It describes the period when the human brain comes to grips with what has happened and begins processing the grief. Things will start to feel better, but there also will be setbacks.

“The impact of trauma doesn’t recede once the traumatic event recedes,” said Tatijana Busic, a Toronto-based psychologist. “In fact, once a traumatic event stops, you see people develop PTSD months, even years, later. We haven’t seen that yet, because we still are in survival mode.”

 A pedestrian walks past a City of Toronto poster advertisement stating “Life on pause sucks. Agreed. Keep fighting and we’ll get through this.”

Many of us who avoid depression will continue to grind, like Camus’ heroes. To be sure, there is something romantic about the thought of the 5.4 million Canadians working from home in January pushing through the final stage of the pandemic together. But it won’t be especially productive if we’re all doing it in a fog. We’ll be an unhappier society. We’ll also be a poorer one.

Some 500,000 Canadians were already unable to work on any given day in 2019, according to Bryan Benjamin and Charles Boyer at the Conference Board of Canada . The cost of treating depression and anxiety had risen to about $50 billion a year, while the opportunity cost of lost productivity was about $30 billion annually.

The situation now is, no doubt, worse.

“We’re seeing the exhaustion,” Matejicek said. “We’re seeing the burnout. We’re seeing people trying to keep going even though they are starting to experience the impacts of the stress, the pressure.”

It’s broadly understood that there’s a problem. The issue is whether we’re sufficiently equipped to deal with it.

The men and women who have their hands on the levers of power are accustomed to responding to more concrete threats.

If all the stimulus in the system ends up stoking too much inflation, the Bank of Canada knows what to do: raise interest rates, which will cool things down. It would be painful, but it would be a solution.

If the central bank’s money creation and Finance Minister Chrystia Freeland’s deficits spark runaway inflation, then Macklem will simply jack up interest rates until order is restored. It would be painful, but it would work.

But if a critical mass of the country’s workforce is coping with low-grade post-traumatic stress disorder, there aren’t any simple levers that policy-makers can pull.

“It’s an important concern, and in some ways, one that might get lost in everything else that is going on around COVID-19,” Gordon McKenzie, chief executive of Saskatoon-based potash exporter Canpotex Ltd., said in an interview.

“We’re getting COVID fatigue from a long year of working remotely or working from home. A lot of people suspected COVID would be over within 2020. It’s not over. The mental-health side of that is even more important now than it was a few months ago.”

 A pedestrian in Toronto in February.

The House of Commons Finance Committee earlier this month made 145 recommendations to add to the next budget. The first was to “develop and implement a long-term mental health COVID-19 recovery plan to ensure all Canadians — especially the most vulnerable — can access the care they need, no matter where they live.”

The federal government last year said it would spend $10.2 million on research related to how COVID-19 might be affecting mental health and substance abuse.

I’m not anti-government, but we’re in trouble if Canada’s business leaders leave this issue to the politicians, as many of them are wont to do when faced with sensitive matters.

The public sector is having a hard enough time getting us vaccinated. The mental health of the working population is a threat that employers and shareholders must confront.

There is reason to worry that Corporate Canada may not be up for it. Only about third of Canadian companies have mental-health strategies, according to a study by Deloitte. There’s also plenty of anecdotal evidence that the business elite just don’t get it.

For example,  dozens of big companies took money from the federal government’s emergency wage subsidy while they continued to pay dividends and, in some cases, repurchased shares. Those companies said they were entitled to do so, and that they had a responsibility to take care of their shareholders.

But that was never the point. People are angry because wealthy executives and shareholders refused to sacrifice along with everyone else. Studies show that feelings of inequity are among those that erode our mental well-being.

Such callousness on the part of management might be unconscious. Many corporate boards are made up of semi-retired, rich and powerful people who may not have learned much about the intricacies of mental health on their way to the top.

“We don’t teach agile emotion regulation and we don’t teach agile relationship dynamics,” Matejicek said on a Zoom call from her garage, where she and Busic had decided to meet so they could make plans for their counselling and coaching startup, People in Business Inc., at a safe distance.

They think business schools have left today’s leaders ill-prepared to deal with the mental well-being of their organizations, if only because psychology has advanced so much since Boomers and Generation Xers got their MBAs.

“Our business leaders don’t have the tools they need to effectively engage the humans they have,” Matejicek said. “They know the processes. They know the reward systems. The bonus systems. The ways of creating engagement. They don’t know how to manage the human dynamics.”

The situation isn’t hopeless.

Sonja Volpe, who leads Paris-based BNP Paribas SA’s Canadian unit, started adding new programs related to mental health in May. She expanded the benefits program to include a tele-health service that provides access to therapists, makes a point of holding weekly meetings with smaller staffing groups where the point is simply to talk, and hands out extra vacation days.

One overarching goal is to make sure BNP employees learn to create space. “You have to have lunch,” Volpe said.

McKenzie did similar things at Canpotex. Like Volpe, McKenzie said he’s made a point of hosting regular virtual townhalls to keep staff in Asia, Brazil and Canada connected. He also put an emphasis on results, as opposed to time served at their desk, in hopes of encouraging people to power off their computers, and he tripled the amount of money that employees can claim on psychologists.

These are small things, but if enough leaders do likewise, it could make a difference.

“You don’t have to be Shakespeare,” Busic said. “Just stop and say hello to people. The value of that is tremendous.”

Financial Post

• Email: kcarmichael@postmedia.com | Twitter:

2/26/2021 4:29:35 PM

A cyclist rides past a Retail For Lease location on Queen Street East in Toronto during the COVID-19 pandemic.

Retail Council of Canada President and CEO Diane Brisebois speaks with Financial Post’s Larysa Harapyn about what’s next for retail, post-pandemic.

2/26/2021 9:58:26 AM

Chika Onwuekwe, vice-president and general counsel of Trican Well Service Ltd., and volunteer co-chair of the mentorship and sponsorship committee at BlackNorth Initiative.

Somewhere out there is a soft-spoken woman of average height, name unknown, possibly living in Saskatoon, possibly elsewhere, who on Sept. 1, 2000, sat in a late-model vehicle at the airport waiting for an inbound flight from Lagos, Nigeria, that had been delayed by several hours.

Aboard that flight was Chika Onwuekwe, a young international tax lawyer, who had left behind a good job at KPMG and a comfortable life in Lagos to pursue a masters of law at the University of Saskatchewan. He would later receive a doctorate from the school as well, but on that September day he was just another weary traveller touching down in the Prairies for the first time, one who was overjoyed to be met by a smiling stranger.

“I have been looking for this lady forever, because I have wanted to thank her forever,” he said. “I arrived that day, but my luggage didn’t, and so she went back to the airport the next day and delivered my bags to my hotel.”

The woman was a volunteer, and she was white, as was the guy who came around the hotel the following day in a pickup truck to take the jet-lagged newcomer apartment hunting.

Onwuekwe relates the story of his Canadian introduction not to paint his adopted home as a place without imperfection — he has witnessed his share of white people here retreat to the furthest corner of an elevator and tighten their grip on their bags upon seeing him step inside — but to make the point that there are plenty of strangers who want to help.

It is something the vice-president and general counsel of Trican Well Service Ltd., a Calgary-based international oil services company, takes seriously, as a math and English tutor to new immigrants in years past and, importantly in the present, as a mentor to young Black, white and every-colour–in-between professionals seeking career guidance and help in building their networks.

“At the end of the day, you’ve got to be qualified to get in, but it is who you know — you know, you know — and that’s still how it works,” he said.

Onwuekwe is a good person to know. An undeniable extrovert, he loves soccer and can talk hockey. He plays a mean game of tennis, likes to hunt and possesses a disarming sense of humour. He also believes that engagement is the most effective battering ram to bash through anti-Black systemic racism.

That is: encouraging people to get to know one another in order to see one another for who they truly are: colleague, confidante, young up-and-comer with an abundance of smarts who just needs a break, or a Black person in an elevator, wearing a nice suit, heading to a big office on the 29th floor with framed diplomas on the wall.

“We still have a long way to go in Canada,” he said.

To help push things along, Onwuekwe has signed on as a volunteer co-chair of the mentorship and sponsorship committee at BlackNorth Initiative (BNI), which has issued a challenge to corporate Canada to open its doors, boardrooms, corner offices and junior positions to employees who are Black, Indigenous and other people of colour (BIPOC).

Mentorship is among the gateways to change, and Onwuekwe and others are resolved to build out a roster of committed mentors, up to 500 by year’s end, across all sectors of the economy to create a “pipeline” to help talented Black Canadians crack into those executive jobs where they remain woefully underrepresented.

The statistics are stark: for example, 7.5 per cent of Toronto’s residents are Black, but just 0.3 per cent of corporate board positions are held by Black people, according to a recent study by Ryerson University.

Studies show that women and minorities are more likely to take advantage of mentorship opportunities when offered, and that mentees gain career advancement, increased self-confidence, wider professional networks, higher salaries and more.

On the company side of the ledger, mentorship programs can boost employee retention rates, while exposing senior management to different points of views.

In sum, mentorship is a win for all its players, and Onwuekwe, and BNI, hope to ensure that BIPOC employees are more than just in the game.

“Success isn’t just about me in this office,” he said one early February morning. “It’s about: how many people are you bringing with you?”

Onwuekwe moved to Alberta after wrapping up his studies in Saskatoon and was hired in 2006 by law firm MacPherson, Leslie & Tyerman LLP. The 100-year-old firm was a major player in Western Canada and the Nigerian expat was the first Black lawyer to work there.

Jim Kerby, the managing partner in Calgary, gave Onwuekwe his shot, and would refer to him as “the professor.” They had offices next to one another, put in long hours, joked around and developed a friendship.

“Jim saw something in me and thought I could go far,” he said.

Kerby gave advice and Onwuekwe took it — not personally, but as professionally prudent to follow. Among the most insightful tips: he needed to write like a Canadian.

“Nigerians write like English people,” Onwuekwe said. “Canadians send an email and it is short, simple and sweet, and you can tell things by the email. The English are so formal and rigid, and that’s how I wrote, and Jim showed me that, and it was good advice and politely given.”

In the years since, Onwuekwe has played the adviser role, giving newer immigrants, and even a few Nigerian lawyers, a hand in figuring out how to navigate Canadian office culture.

Nigerians are taught that children are to be seen and not heard, and to respect their elders. That lesson often accompanies them into North American meeting rooms, where they will bite down on their tongue instead of speaking up to offer insightful comments if the person giving the presentation has grey hair.

Going out for coffee is another potential minefield. To an immigrant, grabbing coffee can seem like a colossal waste of time and productivity, Onwuekwe said, but it is often crucial to building workplace relationships and discovering common points of interest with, say, the guy three cubicles over, who just so happens to love soccer as much as you do.

“I mingle with people in the rural areas, and we share our thoughts, and they will say, ‘Chika, you are different,'” he said . “But I am not different.”

Instead, he said, it is just a matter of exposure, opportunity, getting to know one another and understanding that the default image of the senior executive doesn’t always need to be rendered in white.

Twenty-plus years ago, BNI’s mentorship co-chair was a weary new student from a faraway place getting off a flight in Saskatoon to be greeted by a smiling young woman. It is a gesture he has never forgotten, and there is a lesson in it.

“The story I want to tell is of the people who have welcomed me,” Onwuekwe said. “I have been lucky.”

He is not the only one.

Financial Post

• Email: joconnor@nationalpost.com | Twitter: oconnorwrites

2/26/2021 8:25:45 AM

A person looks out the window of a quarantine hotel in Toronto.

The hospitality industry continues to struggle as pandemic-mandated restrictions on travel and assembly hurt the bottom line and livelihoods of both businesses and workers alike.

International travel to Canada is down by more than 90 per cent and while some travellers are still trickling in, the Canadian government requires them to quarantine at designated hotels for about three days at a potential cost of up to $2,000.

The enforced quarantining might help a small number of hotels near the airports in select cities, but it will not provide any relief for most of the 8,000 hotels of varying sizes and quality across Canada.

Room occupancy rates dropped precipitously to 33.7 per cent in 2020, from 66.5 per cent in 2019, and the decline forced the hotel industry to lower room rates. The average daily rate in Canada, which had been steadily rising since 2010, declined to $124 in 2020, from $162 in 2019. The revenue per available room correspondingly declined to $43 in 2020, from $109 a year earlier.

A look at recent travel trends helps explain why the hotel industry’s key performance indicators have collapsed by so much, because nowhere has the impact of COVID-19 been more evident than in the international tourism and travel sector.

The number of travellers from the United States and overseas in December 2020 was down by 93 per cent compared to December 2019, according to Statistics Canada data released earlier in February. Even the number of Canadian residents returning from abroad was down by 91.3 per cent during the same period.

A year-over-year comparison reveals that the number of international trips to and from Canada dropped to 25.9 million, an annual decline of 73 per cent. Excluding Canadian residents, only 5.1 million travellers arrived in 2020, a decline of more than 84 per cent from 2019. The number of Canadian residents returning from abroad was down by 74 per cent to 14.6 million.

Returning residents and new immigrants impact housing markets more than hotels, while business travellers and tourists generate the demand in the hospitality sector. A sizable segment of the demand for overnight hotel stays, restaurant meals, and art gallery, aquarium, museum and zoo visits is generated by international and domestic tourists whose numbers have considerably declined.

Even trips by U.S. residents to Canada in December 2020 were down by 93.3 per cent from the year before. Not all U.S.-based trips are overnight trips, of course, but those visitors still enjoy meals at restaurants and buy goods at stores.

The declines are a far cry from the glowing forecasts that greeted the hotel industry as recently as 2019. “Our hotels are full, and we are in good shape to continue to grow top and bottom lines in 2019,” said an annual review of Canadian hotel industry by CBRE Group Inc., a commercial real estate services and investment firm.

CBRE further noted that “the only factors that cause significant shifts in the hotel market are either geopolitical events — such as 9/11 and the global financial crisis — or the delivery of new hotel supply.”

With the benefit of hindsight, we can add pandemics to the list of factors that can drastically affect the hotel industry’s bottom line.

The long-term forecasts for the hotel industry do not solely depend on lifting international and domestic travel restrictions. For one thing, web-conferencing technologies have displaced some demand for intercity and international travel. Virtual meetings, conferences and even birthdays and weddings emerged in response to the restrictions that prevented face-to-face meetings.

Traditionally large gatherings for birthdays and weddings are likely to return once the pandemic is over. However, one could expect a relative decline in business travel, given that businesses are now armed with cost-cutting tech-enabled tools.

The resulting effect could be more pronounced in downtown employment hubs in large urban centres, where near-empty office towers could struggle to attract employees who have proven to be equally productive working from home. With employees teleworking, what’s the point of flying to a different city to visit business associates?

The hotel industry is likely to do better in 2021 and beyond than it did in 2020. Still, the industry should be prepared for a future of sustained lower demand. This might require some hotels to change their offerings, such as providing longer-term stays, and being part of the solution for challenges such as housing affordability that many cities continue to face.

Murtaza Haider is a professor at Ryerson University. Stephen Moranis is a real estate industry veteran. They can be reached at the Haider-Moranis Bulletin website hmbulletin.com.

2/26/2021 7:38:48 AM

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