Canadians who were born in this country are getting older. But we are increasingly a society of immigrants, and many of them are younger. Businesses must build trust—with either of these groups, or with both of them. It’s as important as the financial data you crunch, or how well you manage your marketing mix. Building trust means mastering the Big Shift.
The most disruptive force in the world today is public opinion. Capitalist democracy is built on opinionated consumers who now rule the roost and call the shots. And just as individuals seek to build trust in their daily relationships with families, friends, and colleagues, companies need to build trust with their consumers. The more a consumer trusts a business, the more likely it is that she will be able to recall its ads and believe its messages. She will be willing to pay a premium for a product or service, and feel good about it, if she trusts the company that sells it. The more a company is trusted, the easier it is for it to make a profit.
So making a profit means building trust. No trust, no sale. Simple, really. But in a country where both the faces and minds of consumers are changing so dramatically and quickly, how is trust built?
This isn’t a get-rich-quick book. But we do have a bit of advice for companies seeking to surf that wave of change. Actually, we have five pieces of advice. We’ll call them rules, because that makes them sound more impressive. Mastering these rules will help you and your company exploit the potential of the Big Shift.
The last time you drew up your business plan, how much time did you spend addressing demographic changes? Statistical data on changing settlement patterns, ethnic origins, and the age of the consumer market are easily available from Statistics Canada and other sources. Do you sell into the Atlantic Canadian market? Did you know that the average age there is several years higher than the national average? Did you know that’s also true in Quebec? Have you taken into account the impact of the Ottawa River Curtain on affluence, needs, and tastes in different parts of the country? There is a growing market segment: older women who suddenly find themselves living alone. Do you know about them?
Does your business sell to every part of Canada except Toronto, which you ignore? Of course it doesn’t. What company would ignore the largest market in the country? But if you aren’t tailoring your products to newly arrived immigrants from third world countries whose first language isn’t English or French, that’s exactly what you’re doing. Let us remind you: at current immigration rates, we are bringing in a new Toronto every 10 years. What market research have you conducted on these new arrivals? What are their income levels? What are their needs? What are their tastes? How do their affluence, needs, and tastes differ from those of the native-born Canadian of European stock? How do their affluence, needs, and tastes differ, depending on their country of origin?
What do you mean, you don’t know? You might as well be saying you don’t sell into Toronto!
In 1996, University of Toronto professor David Foot and his journalist collaborator, Daniel Stoffman, released one of the bestselling non-fiction books in Canadian publishing history. Boom, Bust and Echo: How to Profit from the Coming Demographic Shift is a terrific and insightful book. It takes one simple demographic trend—that the Canadian population is aging—and turns it into 238 pages of useful advice for businesses, governments, and individual Canadians on how to prepare for our inevitable future. As Foot and Stoffman tell it, “Demographics explain about two-thirds of everything. They tell us a great deal about which products will be in demand in five years, and they actually predict school enrollments many years in advance. They allow us to forecast which drugs will be in fashion 10 years down the road, as well as what sorts of crimes will be on the increase. They help us to know when houses will go up in value, and when they will go down.”
But as good and successful a book as Boom, Bust and Echo is, Canada hasn’t quite turned out as it predicted. That’s because the authors placed too much emphasis on a single demographic trend: aging.
Yes, aging is a critical factor in defining our collective future. That’s why Canadian demographers have spent so much time on it. But we don’t believe the old aphorism that “demography is destiny,” especially if it causes us to focus on a single demographic trend. The market—the public, governments, and other actors—can react to a trend and change its trajectory. Newton’s First Law of Motion tells us that the velocity of a body remains constant until it is acted upon by an external force. In this case, the external force that is changing the demographic trend of aging in Canadian society is the immigration policy that the Laurentian elites correctly identified as the best response to the challenges of aging. Immigration policy, then, is a market reaction to a demographic trend that has caused immigrants to choose Canada in a disproportionate number—compared with the number who choose other Western countries—as their new home. Because immigrants to Canada, like all Canadians, have the right to live where they choose, they have blunted the impact of aging on communities where large numbers have chosen to settle. Just as their relative absence east of the Ottawa River Curtain has made those provinces older, their abundance west of it, especially in urban centres, has made those regions younger.
Our point is simply that, while demographic changes hugely affect markets, overly simplistic analysis—say, focusing on only one demographic change, or failing to unpack the implications of that change—can lead us astray.
Let’s stay with this for just a bit longer. “The aging of the population will accelerate between 2011 and 2031, as baby boomers reach the age of 65,” Statistics Canada observed it its analysis of the 2011 census. “In 2026, the first of the baby boomers will reach the age of 80, an age when mortality is high. As a result, the number of deaths will increase significantly.” So maybe this would be a good time to invest in retirement homes.
But you have to be careful. You can’t assume that the population of retirees will increase along with the population of boomers over 65. Even defining retirement is a challenge. For most Canadians today, it means the year in which they quit their full-time jobs. But they may continue working at those jobs part-time, or they may take up other jobs, or pursuits that almost qualify as jobs—improving their golf swing, for example. Combine better health with a fluctuating stock market that is undermining retirement income, and polling data suggest that most Canadian workers now assume they won’t be retiring until around age 67. So companies that manufacture office furniture, for example, need to think about older backs. Delayed retirement also affects corporate health insurance providers and financial service providers who market retirement savings plans. We need to get ready for the older, less predictable Canadian elderly.
Another place in which demography turns out not to be destiny is in the real estate market. Every week some bank, economic think tank, or other group of august experts issues a report warning that Canada’s real estate bubble is about to burst. While a lot of this gloom is driven by world market conditions, the fact that Canada is aging also tends to be factored in. Analysts assume that because Canadians are getting older, they will want to downsize their homes. That is, after all, the economically “rational” way for older couples to offload expenses as they prepare for retirement.
But real estate is aspirational, not rational. You can prove this to yourself: How many empty nesters do you know who decided to buy their dream home once they were no longer supporting the kids? Or who purchased an RV or a time-share? Rational? Perhaps not. Satisfying? Deeply.
In other words, while you need to understand demographic trends, you also need to peer inside those trends.
You need to unpack the assumptions and expectations of a changing consumer base. It’s true of older Canadians, just as it’s true of immigrant Canadians. If you want to win their trust, you have to listen to what they’re saying.
Canadian employers face a growing shortage of the skilled workers that they simply must have if they are to grow. The Canadian Chamber of Commerce describes the shortage of skilled labour as one of the top 10 barriers to increasing Canada’s international competitiveness. It’s not that Canada has an absolute shortage of workers. We just have too many of the wrong kind, and in the wrong places. Along with Canada’s anemic national birth rate, the perverse incentives that keep too many workers happily underemployed in some parts of the country are also depriving Canadian businesses of the workers they need in the places where they’re needed. And our educational institutions aren’t turning out enough of the workers we need. No one, of course, should be forced into training for work they don’t want to perform. And an education in the humanities or social sciences can equip a graduate with skills in critical thinking that ultimately have a market value—or so those of us with such degrees tell each other. The hard fact, though, is that a nuanced appreciation of, say, elite accommodation theory won’t get you hired as a veterinarian—and Canada needs veterinarians.
But that’s all right; we bring in immigrants to make up for the shortfall in skilled native-born workers, right? Actually, no. First of all, the immigration system is inefficient, thanks to decades of governments, Conservative as well as Liberal, that put short-term political interests ahead of long-term economic needs. Federal and provincial governments are starting to fix the problem. But it could take years before Canada starts bringing in the right mix of workers to meet the needs of the economy. Meanwhile, who are you going to hire?
We need to digress very briefly to prove this point, because it’s an important one. Though the Laurentian Consensus was inspired in its decision to grow the population and economy through open immigration, it was indifferent in the actual execution of the policy. To illustrate this point, let’s take two specific years of immigration and compare them. As it happens, in both years, Conservative governments were in charge. The first year is 1986, when Brian Mulroney was prime minister of a Progressive Conservative government. The second year was 2010, when Stephen Harper and his Conservative Party were in power. Mulroney’s PCs were, of course, every bit as Laurentian in their thinking as the Liberals under Jean Chrétien or Pierre Trudeau. In 1986, Canada accepted 99,354 legal immigrants. They were divided into the following categories: Refugees—19,204 (19%); Economic Class—35,840 (36%); Family Class—42,475 (43%);
Others—1,875 (2%). In 2010, Canada welcomed 280,681 legal immigrants: Refugees—24,696 (9%); Economic Class—186,913 (67%); Family Class—60,220 (21%); Others—1,875 (2%).
Despite the caterwauling from some immigration advocates, Canada accepts three times as many immigrants today as it did in the not-so-distant past. And the overall number of immigrants in each category (including Refugees and Family Class) is up. Clearly, it is far easier for all classes of immigrants to get into Canada today than it was a quarter-century ago.
But although more people are arriving in every category, far more Economic Class immigrants are coming today than during the Mulroney years. The percentage in this category has nearly doubled since 1986, at the relative expense of Family Class immigrants and Refugees. The federal government is reinforcing this trend, through recent changes that deter refugee claimants who don’t have a strong case, while reducing the wait for Economic Class immigrants who have job skills in high demand. Provincial governments are also placing an increasing emphasis on targeting nominees who have skills that are in short supply. In other words, immigration policy is abandoning the Laurentian emphasis on compassion and focusing instead on economic advantage.
Even so, there is a skew between immigrant intake and market needs. Too many immigrants, even in the Economic Class, arrive lacking either marketable skills or the certification required to practise them. We could go on about the conspiracy among the professions to limit certification of immigrants in order to protect the privileges and incomes of existing members—it’s all quite medieval—but what matters for business leaders is that there simply aren’t as many people as they need with the skills they need to grow their businesses. Between 2011 and 2020, the federal government estimates that the following occupations will be among those experiencing the most acute labour shortages.
Labour Shortages Expected between 2011 and 2020
| Occupation | Number of jobs not filled |
| Nurse supervisors, registered nurses | 30,942 |
| Health, education, social and community supervisors | 13,914 |
| Physicians, dentists, and veterinarians | 10,097 |
| Mining, oil and gas supervisors | 7,414 |
| Logging and forestry supervisors | 3,989 |
The Canadian Chamber of Commerce says the trucking industry, the steel industry, and the hotel and hospitality sector will also be significantly short of skilled workers.
This shortage is not a challenge just for Canada’s governments, which are trying to meet it by refocusing intake on high-skilled, in-demand workers. It’s an issue for individual businesses as well. Those that are astute enough should be moving heaven and earth to tap into the global market for skilled workers, now that the federal government’s shift in immigration policy is making that market easier to access.
The good news is that Canadian businesses are in a solid position to compete for foreign workers. As previously stated, one in five global workers would consider moving to another country to advance his career. And Canada’s relative economic success, compared with the ongoing struggles of the United States and Western Europe, makes us a solid choice for those skilled workers looking to relocate. The global perception (an entirely accurate one) that Canada offers both an enviable standard of living and an openness to immigrants not found among many of our economic competitors gives us a formidable competitive advantage over other developed countries. And delivering on this perception presents a solid opportunity to build trust with long coattails. Immigrants who come to Canada and experience success will be the best salespeople for the potential future immigrants that we still need to attract. They will also be our best resource for accessing the immigrant market. They have the experience Canadian business owners may lack in understanding the affluence, needs, and tastes of their communities.
These are all compelling reasons why, if a lack of skilled workers is a barrier to the success of an organization, it should look overseas. But where to look? The logical focus is on those countries that have skilled workers who are most likely to move. Here are the results of an Ipsos survey on global worker mobility. The percentages are the proportion of workers who said that they are “very likely” to consider moving to another country: Mexico—34%; Brazil—32%; Russia—31%; Turkey—34%; India—28%.
Within that list, only India serves as a top-tier source of immigrants to Canada today. This means that there is a lot of untapped potential in countries that are underused as sources of immigrants. In addition, another potential source of new, skilled immigrants could be emerging—or, more accurately, re-emerging: Western Europe. On the Continent, only 10 percent of workers say that they’re prepared to move to find work. But that number could soon be escalating by the month. Too many European countries have a deadly combination of labour policies that are unfriendly to youth, coupled with large pools of unassimilated migrant workers from Eastern Europe, who moved to places like Great Britain and France when their countries were given European Union membership. It’s only a matter of time before these people start looking for greener pastures. And many of them are not only well educated and highly skilled, but completely fluent in English, or French, or both.
Two generations ago, Canada took in millions of displaced persons and young workers fleeing a continent ravaged by the worst war in history. Those desperate Europeans became the backbone of the Canadian workforce, making Canada more prosperous and successful even as Canada made them prosperous and successful. Europe may be on the brink of another great exodus. If so, we should be ready to throw open our doors once again.
An important strategy for businesses in search of skilled labour, especially those who need a specific category of worker in quantity, is to establish links with technical schools and other sources of trained workers in other countries, directly recruiting their graduates. In addition, attitudes about how to attract new workers need to change. And recruiters need to understand that the dynamic between source countries and intake countries is being transformed. When it comes to hiring skilled workers in foreign countries, workers over there aren’t competing to win a job with us; we’re competing for them with other companies and other countries. The competition for talent from the developing world will only intensify as labour shortages grow among developed countries and as developing countries themselves become increasingly developed, able to offer their own citizens good jobs at good wages, with Mom and Dad close by.
Here’s what Ipsos’s research reveals about the most important incentives for attracting mobile foreign workers. More than anything else, they’re looking for:
• Regular round trip tickets to visit their home country
• Paid language training
• A 10 percent pay raise (a surprisingly modest amount to induce someone to commit to such a life-altering move)
• A guaranteed option to return to a previous position after two years of service. (This is a particularly important inducement for employers who want to encourage global employees who are already part of their organization to come to Canada.)
Canadian recruiters will need to structure attractive incentive packages to entice to Canada those mobile workers who have a lot of choices about where to settle. The days when we were able to pick and choose from among the world’s downtrodden and disadvantaged are coming to an end. Increasingly, Canada and Canadian business are competing in a seller’s market for skilled workers. Understanding this simple idea is the first step in building trust with your new workforce.
Bringing in 250,000 or more people year after year is profoundly changing the market for consumer goods and services in Canada. Not in all parts of the country, of course. As we’ve mentioned, in Atlantic Canada and Quebec, the old playbook still applies. Business there will still need to adjust to a pool of consumers that will grow steadily older, with more of them female. But west of the Ottawa River Curtain, the challenge is to sell to the new Toronto that immigration is creating every decade.
Canadian businesses have precious little information about how to market to new Canadians, and their gut instincts about how to do so are generally distorted by the old assumptions: that there is a French Canada, an English Canada, and an ethnic Canada; that each market should be treated differently; and that the ethnic market should perhaps be avoided, because it’s incomprehensible.
That mindset isn’t going to work anymore, now that the so-called ethnic market is becoming the dominant market. Does this mean businesses need a different strategy for every Tom, Pao, or Fernando? Actually, no. Multiculturalism today celebrates those things that make Canada unique in the world, while also paying attention to each source culture’s own unique “accent,” or take, on Canadian identity. It’s about selling by celebrating what makes Canada special, with particular attention to details depending on the target audience.
This was recently and powerfully brought home to Darrell Bricker at a parade. Bricker is an honorary colonel of a Canadian Army reserve regiment, which means he fundraises, organizes community events, and attends ceremonial functions. One parade Bricker observed in June 2012 was for the 337 Army Cadet Corps, the oldest and largest of its kind in Toronto. There were about 150 cadets on parade at Varsity Arena, with their proud families and 337 alumni crowding the stands. What a sight it was—the cadets all lined up in their freshly pressed uniforms and mirror-polished boots, senior NCOs with swords drawn, and the Queen’s York Rangers Pipes and Drums providing very martial, and very Scottish, accompaniment. All the symbols of old, Protestant, royalist Toronto were there, in full flourish. Except that about 90 percent of the cadets were non-Caucasian. Most were the children of parents from China, India, or Sri Lanka. The group photo taken at the end of the ceremony, minus the Canadian flags, could have been from a parade in Beijing or Mumbai.
Everything had changed—and nothing. These new Canadians were embracing and commemorating an organization that in just a century had completely altered its demographic composition. Every McKee, Rollins, or Corkery had been replaced by a Wong, a Singh, or a Santos. What hadn’t changed were the traditions and symbols being honoured. The military, the pipes and drums, the tributes and fealty to Canada’s Queen. For Laurentianists, who tried to strip away Canada’s British and military traditions to make newcomers feel less alienated, this makes no sense at all. But as it turns out, new Canadians embrace the 337 Army Cadet Corps, bagpipes and all.
What could be a tougher sell to new Canadians than the Army Cadet Corps? This should tell marketers something. Selling into the “ethnic” market doesn’t mean going ethnic. Yes, each culture has its own dos and don’ts. But all Canadians, including new Canadians, want to be Canadian first and foremost. (This is obviously less so in Quebec, which has an added degree of subtlety, but fewer immigrants to market to.) Immigrants are looking to embrace what it means to belong to their adopted culture. They want to buy in, and will, provided everyone else also buys in to what makes this country special. Bottom line: the idea of Canada is a strong selling point. If you want to sell to new Canadians, sell the Canadianness of your product.
Here’s another way businesses need to rethink the way they sell into the new Canadian market. A recent Ipsos Reid study found that close to 80 percent of Chinese, South Asian, Southeast Asian, and Muslim Canadians planned to be around water during the summertime: a very Canadian approach to combating the heat. But nearly one in five also said that they can’t swim. This is what we mean by selling the Canadian idea but paying attention to the local accent. The same could apply to other outdoor or wilderness activities that are quintessentially Canadian, from hiking and camping to canoeing and kayaking. These activities require a certain amount of personal familiarity with skills many immigrants may lack. So what Canadian sporting goods company or non-profit focusing on safety has launched a campaign to teach new Canadians to swim or handle a canoe? Such a campaign could be good for business and save lives.
In a similar vein, the cottage or cabin or camp (the name changes depending on where you live) market needs to retool for new Canadians. Right now, sitting on your dock with a beer remains a very white, old-Canadian pastime. We know whereof we speak: John Ibbitson grew up in Muskoka, the heart of Ontario’s cottage country, and Darrell Bricker owned a summer home in the district.
Who owns cottages or cabins these days? In many places, only the truly affluent can afford the cost. Rising real estate prices and capital gains taxes have priced the once lowly lakeside cottage out of reach for much of the middle class. Yet for those who bought into the market decades ago, or who inherited the property, the cottage remains the treasured retreat for ordinary folks who have more generous and structured vacations: public servants, firefighters, police officers, and teachers. Eventually, however, they will want to sell, as they get older and the headaches of deciding how the children will share responsibility for the property become too much. Given that all sellers hope to maximize profit, the people who will buy their cottages—often with the intent of demolishing the existing building and constructing something much grander—will be richer than the sellers and their peers. Today’s public servants, teachers, firefighters, and cops often can’t afford the types of vacation properties that their predecessors owned. Unless someone can interest affluent new Canadians in the joys of owning a cottage, the cottage market will eventually suffer. This issue is vitally important for lake associations and local chambers of commerce in communities that are reliant on summer residents for their survival. Again, success depends on selling a Canadian concept but adjusting it to reflect a new Canadian accent.
These two examples—there are many more—show the importance to marketers and sellers of reaching out to new Canadians in markets traditionally dominated by Old Canada and winning their trust. There is another aspect to reaching out to immigrants as well. Research shows that new Canadians, especially Sino-Canadians, are more likely to deal with companies and organizations that are involved within their communities. Helping the poor among them, working with new immigrants on settlement issues, donating to the construction of community facilities, and sponsoring local sporting events, such as cricket matches for South Asian Canadians, can win an organization new friends and potential customers. So now your recreation company has another reason to sponsor swimming lessons and kayak handling for immigrants.
Marketing to new Canadians has its challenges. But with an appropriate calibration of Canadian identity to local accents, along with genuine engagement and trustbuilding within the community, reaching out to the New Canada offers a rich, untapped potential for Canadian businesses.
We know: you hate this rule even before we explain it to you. Politicians levy the taxes that drain away your profits. They enmesh you in the red tape of regulation. And as we’ve just described, their policies are sometimes so perverse that you may have to recruit your next hire from Bangalore or Manila.
But politicians are in the same business you’re in, and they probably do a better job of it than you do. They’re in the business of selling values. After all, you don’t sell chairs; you sell the value of respecting workers’ backs. You don’t sell lumber; you sell the value of having a dock that the customer builds himself, with a little help, so that his family can more fully enjoy the lake. Politicians sell values, too—conservative or progressive, pro-growth or pro-equity. They sell, depending on their political party or individual candidacy, value sets with differing emphases on freedom, fairness, growth, compassion, independence, community, and so on. Politicians have been marketing themselves and their value sets since the middle of the eighteenth century. They’ve gotten very, very good at it.
Politicians probably poll more than your company polls. They probably hold more focus groups than you hold. They tailor their messages to particular markets—older voters, college students, recent immigrants, farmers, entrepreneurs, teachers—more successfully than you do. Even the ones who lose elections do this. Governing parties do all of this and more, because they have all the tools of government at their disposal. Even Apple doesn’t have the resources of Canada’s federal government (for now).
Sometimes politicians do things for reasons that baffle observers, including other politicians and journalists. They commit acts that seem contradictory or self-defeating. Sometimes, that’s because they make mistakes, just as businesses do, by misreading market trends. But sometimes it’s because they have information that others don’t have, and are acting on that information.
Here’s one example. The Harper government, it won’t surprise you to hear, values the votes of immigrants, especially middle-class immigrants living in the suburbs. There isn’t much that matters more to them. And yet the Conservatives pushed through legislation that severely restricts the rights of people claiming refugee status in Canada. Under the new rules, refugees will have their claims assessed more quickly. The immigration minister can decide which countries are “safe,” and new arrivals from those countries will find it virtually impossible to make a successful refugee claim. Refugees who arrive en masse, such as the Tamils who came over on the Ocean Lady in 2009 and the Sun Sea in 2010, are subject to detention and have little chance of seeing their claims accepted. This made no sense to many observers. How could the Conservatives hope to woo immigrant voters by treating refugees so harshly? The answer, in one word, is polls.
First, internal government and party polling showed that legal immigrants are intolerant of illegal immigrants. After all, legal ones filled out the forms and joined the queue. They are the ones least likely to sympathize with those who jump it. Second, polling data showed that overall support for the government’s immigration policies dropped sharply with the arrival of the two ships. Canadians are willing to support open immigration only if they see the system as fair and not subject to abuse. Every news story about the refugee claimant who lives in Canada for years, supported by welfare and public health care, only to disappear from sight once the final appeal is exhausted; every criminal who, it turns out, re-enters Canada illegally after being deported; every claimant from the United States or France or some other first-world democracy where clearly there is no danger of being killed or tortured, damages the overall credibility of the system in the eyes of Canadians. Because the Conservatives now live or die based on the support of immigrants and immigration policy, they moved to correct abuses of the refugee system. They knew there were votes, including immigrant votes, in closing the loopholes.
Business people need to watch politicians because politicians understand the marketplace better than they do. Stephen Harper is prime minister because he and his advisors figured out the Big Shift before other parties did and tailored Conservative messaging and policies accordingly. To the extent that opposing political parties have similar platforms, it’s because their internal research confirms broad support for those policies. You can figure out what politicians know by listening to what they say, the values they defend. You can figure out what they know about regional and even local markets by watching how they tailor their messages to those markets. Of course, you could always do it yourself. Ipsos Reid would be happy to take your money. But why not piggyback on the market research that elected officials are already conducting? After all, you paid for it with your taxes.
Sum it all up and you have a new rulebook for business success in post-Laurentian Canada. Sales representatives, marketers, analysts, and CEOs who are still steeped in Laurentian assumptions about Canada and who don’t internalize what we’re talking about here are in trouble. When they think of somebody in a kayak, they probably still think of somebody young and white. They’ll be going out of business soon. Will you?