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Daily News Alerts

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December 7, 2022

HR Needs Enhanced Skill Set

Though HR priorities have remained mostly static year over year, there's a demand for HR to enhance its strategic skill set in 2023, says McLean & Company’s ‘HR Trends Report 2023.’ It says HR will also need to monitor and manage increasing stress and burnout levels among both employees and HR team members while focusing on the top two priorities for organizations in the new year: recruiting and providing a great employee experience. It also says next year is the year for organizations to move from a focus on where work gets done and continue to improve how work gets done. Whether a team is remote, onsite, or hybrid is less important than curating the employee experience beyond the physical boundaries of work. For this shift, an employee value proposition (EVP) that effectively communicates organizational efforts will be more important than ever.

December 7, 2022

Employer Entitled To Surplus, Sometimes

An employer’s ability to receive all or part of pension plan surplus – both while the plan is ongoing or upon wind-up – is a complex process. However, while the rules are restrictive, there are situations where employers are legally entitled to the surplus assets, says Jennifer Agnew, a partner at Brown Mills Klinck Prezioso LLP. In a ‘BMKP SideBar,’ she says in ‘Crosby Canada Inc. v. Ontario (CEO of FSRA),’ the employer requested payment of 100 per cent of its pension plan’s surplus relating to a prior partial wind-up of the plan in 1999. In this case, the plan text clearly provided that Crosby was entitled to the surplus. However, the trust agreements that funded the plan were silent regarding surplus entitlement and some of the agreements did not explicitly state that the plan text was made part of the trust agreement. At issue before the FST was whether the plan text could still be interpreted alongside the trust terms to find that Crosby was entitled to the surplus. The case turned on a relatively narrow issue: under surplus case law where a pension plan is funded pursuant to a trust agreement, the plan text provisions may be used to determine whether the employer is entitled to surplus. However, this applies only if the text is “incorporated by reference” into the trust agreement and the text does not conflict with the trust terms. If there is any inconsistency between the plan text and trust agreement, the trust terms will override the plan text.

December 7, 2022

Markets Reach Détente On Rate Hikes

There is reason to believe that the U.S. Fed and markets are reaching détente on interest rate hikes, says RBC’s Harbour Group. As well, as recent inflation readings have “come off the boil,” it has seen hints from various Federal Reserve policymakers that a change in pace in rate hikes is coming. First was the acknowledgment that higher interest rates impact the economy with a long and variable lag, most of which are yet to be seen. In addition, the minutes of the Fed’s most recent interest rate meeting show it became clear that many participants were looking to slow the pace of rate increases. On the surface, little has changed in the central bank outlook and they intend to keep raising interest rates. However, markets tend to move on changes at the margins and are relentlessly forward looking. The prospect of a slower pace of rate hikes and softening inflation has caused bond yields to fall, led by the longer-term yields that influence mortgage rates south of the border.

December 7, 2022

Bull Market Yet To Start

Investors should remain cautious as a new bull market for risk assets is not yet starting, says Nigel Green, CEO of the deVere Group, even though global stock markets made strong gains over November and the S&P500 is up two consecutive months for the first time this year. Risk asset generally refers to assets that have a significant degree of price volatility, such as equities, commodities, high-yield bonds, real estate, and currencies. However, last week’s lower than expected euro zone inflation figures confirm a global trend: weaker energy and services inflation is pulling down headline CPI inflation rates. And while market analysts are expecting reduced interest rate hikes this month from the Fed, the ECB, and the Bank of England and there is a sense of the beginning of the end of the current interest rate cycle, investors should remain cautious. “Whilst it has cooled, inflation is still way too hot for central banks to step down from their agendas of interest rate hikes just yet,” he says. “We are not at the start of a new bull market for risk assets. What we’ve been seeing over the last few days is a relief rally.”

December 7, 2022

UK Looks At Pensions Dashboard

The UK’s Financial Conduct Authority (FCA) has started a consultation along with the Pensions Dashboards Programme (PDP) on standards for operators of pension dashboards. It wants to set out requirements for providers of non-workplace pensions with the aim to improve engagement. The proposed regulatory framework for pensions dashboard service firms will provide consumers with easier access to information about their pension savings.

December 7, 2022

Amini Joins Benecaid

Wendy Amini (GBA) is a business development manager at Benecaid Health Benefit Solutions Inc. Her background includes positions with Morel Benefits Consulting Services and The Consulting House.

December 7, 2022

Crypto Regulation Discussed

The Rotman School of Management at the University of Toronto will discuss ‘Canadian Crypto Regulation: Right Approach? What's Next?’ Co-hosted by Rotman FinHub and Capital Markets Institute, it features Debra Foubert, director of compliance and registrant regulation at the Ontario Securities Commission; Dan Padro, director of policy, credit unions, insurance prudential and pensions, at the Financial Services Regulatory Authority; Andreas Park, research director at Rotman FinHub and professor of finance, department of management, at the University of Toronto Mississauga and Rotman School of Management; Poonam Puri, a professor at the Osgoode Hall Law School, York University; and Blair Wiley, chief legal officer at Wealthsimple. They will examine the Canadian regulatory approach to crypto assets, considering its benefits and costs, and comparing its approach globally. It takes place December 16 in Toronto, ON. Information is at https://rotman.force.com/events/s/special-event/a1VAm000000S8VeMAK/canadian-crypto-regulation-right-approach-whats-next

December 6, 2022

ESG Comes Under Scrutiny

It has been a tough year for ESG (environment, social, and governance) investing which is coming under a lot of scrutiny, says Nalini Feuilloley, head of responsible investment at BMO Global Asset Management. She told the ‘Human Rights: The Investment Case’ session at its ‘Institutional Investment Summit’ there has been a ton of regulation that's creeping into the space as North American regulators are trying to follow in the footsteps of what’s happening in Europe. “ESG has been a rising area of investment for over a decade now and I think they're finally recognizing that there has to be a little bit more structure around what it looks like in terms of branded products, whether it's an ESG product or sustainability product,” she said. The UN guiding principles on human rights was established in 2011, said Katie Wheatley, head of Canada, Principles for Responsible Investment, “but we've made human rights as the area of focus for our 2021 to 2024 strategy.” It is building a base of common understanding and will then focus on shifting industry accordingly, leading to an expectation of full respect for human rights from signatories and the broader responsible investment community. Seen through the lens of materiality, human rights due diligence has been mainstreamed because of the legal and reputational risks associated with it. “But it's still not focused on consistently from a legislative or regulatory lens,” she said. There are expectations around human rights that are proliferating across many jurisdictions including modern slavery acts in UK and Australia and mandatory corporate due diligence in the EU. However, beyond the legal and compliance lens, there's also recognition that, more broadly, companies without human rights violations or risks are better long-term investments, making human rights respect “very much material to outcomes,” she said.

December 6, 2022

Continued Growth In Healthcare Spending Expected

Continued growth in healthcare spending is expected as care that was deferred during the pandemic returns, says an Eckler ‘GroupNews.’ It cites the report on ‘National Health Expenditure Trends, 2022’ from the Canadian Institute for Health Information (CIHI) which shows health spending in Canada is expected to reach $331 billion for 2022 – growth of just 0.8 per cent following much higher growth in spending during the pandemic of 13 per cent in 2020 and seven per cent in 2021. Prior to the pandemic, growth in healthcare spending averaged four per cent per year. Total average spending on healthcare in 2022 is expected to be $8,563 per person. In 2020 (the latest year for which comparable data is available), Canada ranks fourth among the 38 OECD countries in terms of per person spending on healthcare. Of the total health expenditures for 2020, the government pays for approximately 75 per cent while the private sector accounts for the remaining 25 per cent. In addition, demographic factors such as population aging and growth will continue to contribute to spending growth.

December 6, 2022

Soft Landing Still Possible

A soft landing for the economy can take two forms, says Yung-Yu Ma, chief investment strategist for BMO Global Asset Management. He told the ‘Bracing for Impact: Global Economic Panel’ session at its ‘Institutional Investment Summit’ it could be a mild recession or just barely staying out of a recession. “We're actually tilting now toward a soft landing,” he said. This partly based on the rate hike cycles in 2018, 2009/2010, 1999/2000, and 1985/1986. Recessions took place twice and two times there wasn’t a recession. “The big differentiator is that in the two recessionary times, we had severe imbalances in the economy,” said Ma. “I do think there is a more stable underlying economy today and that's what will keep us out of a recession.” Frederick Demers, a portfolio manager and investment strategist at BMO, said what is also important is that “we've seen momentum in the U.S. reaccelerating. It means people now have to actually start upgrading their 2023 forecast which is “quite a change versus last year where we saw a one-year wave of downgrades. There is now a window where “at least “we can push out the timing of the recession and that will keep people puzzled because the consensus view is for a recession,” he said.

December 6, 2022

PMPRB Guidelines Would Decrease Access To Drugs

Innovative Medicines Canada (IMC) is calling for a suspension of the planned implementation of the Patented Medicine Prices Review Board's (PMPRB) revised draft guidelines public consultation. It says the guidelines, as currently written, will only further decrease access to new medicines, treatments, and clinical trials for Canadians, as well as undermine the success of other government priorities like the National Strategy for Drugs for Rare Diseases and the Biomanufacturing and Life Sciences Strategy. Suspending the current proposed guidelines would allow the charting of a better path forward – one that puts patients at the centre of the healthcare systems and that encourages future investments in Canada.

December 6, 2022

Alternatives A Misnomer

Alternatives is a misnomer, says Jeffrey Shell, head of alternatives, commercial ESG, and innovation at BMO Global Asset Management. Speaking on the ‘New Kid on the Block’ at its ‘Institutional Investment Summit,’ he said that are now a lot more private companies of size than public ones as the number of public companies is shrinking, particularly in mid-sized, traditional companies where capital formation is transitioning to private markets. Alternatives offer several benefits to a portfolio, he said. They can be used to enhance returns or reduce volatility. Specific strategies can be employed to enhance diversification, income, and returns. Manager selection matters, he said, particularly for return enhancing strategies. The alternative space has a “long way to grow” and non-professional investors represent the biggest growth opportunity. He said investors can expect significant growth across market asset classes, but it will be uneven.

December 6, 2022

ETFs Post Best Month

Canadian ETF inflows in November posted their best month since March and their third highest of 2022, says National Bank of Canada’s monthly analysis of the market. It shows that net inflows totaled $4.2 billion, rising from $2.6 billion in October and bringing the year-to-date total to $28 billion. Fixed-income ETFs remain dominant with $2.3 billion created last month with Canadian aggregate bonds back in favour and cash alternative ETFs maintained their popularity with a net $1.2 billion flows. Canadian investors’ preference for longer-duration fixed-income ETFs continued as the U.S. and Canadian yield curves move to deep inversion. Equity ETFs net inflows of $1.6 billion were led by Canadian equity ETFs, up one per cent or $745 million. The only product group to suffer net outflows were crypto ETFs with a 1.3 per cent or $29 million pullback. The cryptocurrency market was rattled in November due to the collapse of the FTX exchange.

December 6, 2022

Online Presence Solutions Providers Acquired

Cinven, an international private equity firm, and the Ontario Teachers’ Pension Plan Board (Ontario Teachers’) will acquire and combine group.ONE and dogado group. The combination will create a pan-European one-stop-shop provider of online presence solutions for small- and medium-sized enterprises and small-office home-offices including domain, web hosting, cloud hosting, business software, and digital marketing services. Headquartered in Sweden, group.ONE operates across a number of European countries and has strong positions in the Nordic and Benelux mass hosting markets. dogado is a provider of online presence solutions in Germany, Austria, and Switzerland.