MAY/JUNE 2019

“There might not be a definitive path forward. But Foresight is helping set the direction.” CPA and Foresight participant WHAT’S Teresa Fortney NEXT The world is evolving faster than ever. Will CPAs react to the change—or drive it? Inside Foresight, the profession’s ambitious effort to define the future.

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Rotman_CPA_Magazine_Ad_May_2019.indd 1 2019-04-02 2:56 PM CONTENTS

04 | From the CEO 07 | Letters 40 FIRST IN 08 | What’s the right way to deal with Huawei?

11 | A catalogue of outlandish cons.

12 | A Newfoundland CPA tries to save his hometown.

14 | Changing the way the world measures value.

16 | The impenetrable com- ON THE plexity of Canada’s tax code. COVER Teresa Fortney, Clearwater COLUMNS Seafoods CFO and a participant 18 | What Canada can in the Foresight roundtables learn about tax reform from PHOTOGRAPH New Zealand. BY RILEY SMITH 19 | The economy needs better data. CPAs can help.

20 | How much money do Canadians think they need?

LAST OUT

46 | A chic Tokyo-style chain tries to shake up the dollar-store industry.

48 | Comedian Shaun Majumder brings glamping to Newfoundland. FEATURES 49 | How Marie Kondo 24 | Future Proof has made decluttering a What will the accounting profession look like in 10 years? huge business.

; BELLRINGER BY CPA Canada’s Foresight project intends to find out. BY LUC RINALDI, BRYAN BORZYKOWSKI, BRENDA BOUW, 51 |

; GUTHRIE BY LEVI MANDEL The business lessons BRIAN FRIEDRICH AND LAURA FRIEDRICH hidden in Game of Thrones.

34 | Toy Story 52 | Robots, coming to a CPA Ben Gadbois salvaged Spin Master. Can he help relaunch the farm near you. brand that almost ruined the company? BY STEVE KUPFERMAN 54 | A cheesy solution to

; WOOD-TWEEL BY RILEY SMITH tax evasion. 40 | What It Takes to Clean Up Dirty Money Four industry experts weigh in on what can be done to curb Canada’s 58 | This CPA has his sights DENIS OGRINC PHOTOGRAPHS: MOTTARD BY BÉNÉDICTE MOTTARD money laundering problem. set on Tokyo 2020.

MAY/JUNE 2019 PIVOT 3

CPA-TOC_EN.indd 3 2019-04-17 2:36 PM FROM THE CEO

which you’ll read about in this issue, for all the passionate, spirited discussions starting on page 24. that took place during this process— We’re only part way through the effort, both in person and through our digital but it’s already been illuminating. Last engagement. fall, as part of Foresight, we convened a But we’re not done yet. Our deep dive series of roundtables with members, last fall into various future scenarios set industry leaders and academics. We us up for the next phase of the Foresight covered a lot of ground, and three process: the examination of what role(s) workshops, held in Vancouver, Montreal CPAs may find themselves playing in and Toronto, stood out. Participants dug the years to come, and how we get there into four scenarios describing how the from here. future might unfold, not just for CPAs We are now well positioned to identify but for Canadian society more broadly. the work streams required to prepare the One theme that clearly emerged was profession to thrive. One will certainly that the explosion of data will create a be around data governance, and we can need for new approaches to data envision a role for standard setters, governance and standards, which regulators and auditors in contributing represent important future opportunities to that. Another is in value creation—how for the profession. As the Foresight Phase we identify, create and measure value. One progress report noted, “Participants We’ll need to develop the right oversight soon realized that these trends mean for these work streams and determine that in the future, accountants will need which experts to call on. DRIVING to count more and different things— As part of this next phase, we will also often things we do not yet know how to be delving into areas like effective count. Presenters and participants alike governance for the profession, the THE CHANGE emphasized that accountants need to be importance of fostering a culture of agility Why accountants can no longer involved in creating the models and and innovation, and updating the skills rest on tradition BY JOY THOMAS processes used to measure and predict and competencies required of accountants value, not just reacting to them.” in the years to come. We’ll need to think In our main feature story on Foresight of new practice areas that will emerge Technological disruption. Competitive in this issue, you’ll read about Teresa and how to prepare for them. CPAs pressures. Political uncertainty. We are Fortney, the CFO of Clearwater Seafoods already do almost everything—they build BISHAST AT HOTEL, TORONTO living in a time of massive, chaotic

change, and there’s hardly a business or IT’S ESSENTIAL THAT OUR PROFESSION SHOT KŌ AT profession that hasn’t been turned on its head in the last decade. PLAYS A LEADING ROLE IN OUR Accounting is no different, as our SOCIETY’S COLLECTIVE RESPONSE TO members working on the front lines well know. The challenges are complex RAPID, EVER-EVOLVING CHANGE and fluid. In the era of Big Data, many CPAs, regulators, institutional investors in Halifax, who found that the process companies large and small, they prepare and issuers are testing technologies prompted her to begin thinking of new financial statements, they audit, they give relating to artificial intelligence, data ways to measure sustainability, and even advice and guidance. There’s no limit to analytics and forecasting software that innovation, in her business. You’ll also the opportunities ahead. could substantially alter the way read a story about open banking, a This transformation requires leadership, accounting is done. In the bigger picture, technological revolution that could upend engagement and creativity. Our profession business models are changing, and the financial services and create huge new serves as a strategic advisor to all sectors way companies create value—and how opportunities for the profession. And of the economy, so it is essential that we that value is measured—is undergoing you’ll read an argument from Brian and play a leading role in our society’s a transformation. Laura Friedrich, on page 32, that there collective response to rapid, ever-evolving Amid all this, CPA Canada is taking will always be a role for professional change. We can’t just rest on tradition. a leadership role in charting the path accountants as the guardians of trust. We’ve got to drive the changes that are forward for the profession. That’s why I’d like to thank all the participants required. Foresight will help assure we

we undertook the Foresight initiative, for their input into Foresight so far, and stay on the leading edge. ◆ PHOTOGRAPH BY MATT BARNES; HAIR AND MAKEUP BY CLAUDINE BALTAZAR/PLUTINO GROUP;

4 PIVOT MAY/JUNE 2019

CPA-PresLetter_EN.indd 4 2019-04-12 5:12 PM Pivot is published six times a year by the Chartered Professional Accountants of Canada in partnership with St. Joseph Media. Opinions expressed are not necessarily endorsed by CPA Canada. Copyright 2019.

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The truths about offices As a retired CPA who was a controller for a Vancouver real estate company, I read “iScrapers” (March/April 2019) with interest. I agree that the real estate industry has been slow to adopt certain technology. Two statements, though, seem to be in conflict. The first, that “start-ups are ditching rows of cubicles in favour of open-concept offices tricked out with tech.” The second, that “numerous studies have found that open offices stifle collaboration, decrease productivity and increase absenteeism.” How can both be true? –James Parkes, CPA West Vancouver, B.C.

An interesting life national and subnational governments Busy signals I am very impressed with the new provide full disclosure of natural In regards to your article about busy Pivot. How refreshing are the articles, resource revenues in their public lives, (“Being busy is the new status the presentation and the overall accounts. CICA (now CPA Canada) symbol,” January/February 2019), approach. I think the article “Right supported these changes, but to my there are certain words in the on the Honey,” (January/February knowledge they were not implemented English language that have lost their 2019) captures why we, as CPAs, are by IPSASB. Countries dependent on meaning, such as “nice,” “fine,” and busy everywhere. When Anne- natural resource revenue can be “closure.” I include “busy” in this Virginie Schmidt said “all of those particularly vulnerable to corruption. list. Whether you have a to-do list departments need procedures, internal These revenue streams, characterized with 10 items or 100, the only ones control, investment, communication by inadequate control systems and that count are those first three or protocols, training,” she noted that her a lack of transparency in accounting four. The rest are at best a reminder background as an auditor is part of and reporting, generate hard and at worst a method to enhance your what that makes that possible. I totally currency that passes through many self-importance. agree. As a CPA for more than 50 layers before landing in national –Allan Goldbach CPA years, I have often annoyed (amazed?) treasuries. Hopefully the International Toronto, Ont my family when we drove past a Federation of Accountants (IFAC), factory and I would say I know how with Ms. Bellringer’s help, can advance they make their product. In volunteer this agenda. Three cheers groups, I know how to structure –Hon. Roy Cullen, CPA I really enjoy the new Pivot magazine. internal controls. I’ve had a very Victoria, B.C. Three articles in the November/ interesting life as a result. December issue that I found –Walter Knott, CPA particularly interesting were “The Wolfe Island, Ont. Phoenix fixer Minister of Everything,” “The Loyalty I’d like to thank you for the article on Dilemma” and “If You Could Read My Phoenix...and me (“You Don’t Want Mind.” The first two were well written, The fight never ends This Guy’s Job,” March/April 2019). informative and entertaining. The Your interview with B.C. Auditor It is well balanced and comprehensive. third was an eye-opener! Well done! General Carol Bellringer (January/ (I read both the French and English –Carol Gevers, CPA February 2019) was an inspiration to versions and found the translation to be Victoria, B.C. those of us combatting global excellent.) I appreciate the testimonies corruption. In 2007, I attended, on of CPA colleagues, some of whom behalf of the Global Organization of pointed out a small mistake: I worked WHAT DO YOU THINK? Parliamentarians Against Corruption, in Moncton, not Halifax, while at the Send your letter to the editor to [email protected] an International Public Sector Atlantic Canada Opportunities Agency. or to 277 Wellington St. W., Accounting Standards Board (IPSASB) –Marc Lemieux, CPA Toronto, ON M5V 3H2. Letters may meeting. I recommended it require Ottawa, Ontario be edited for length and clarity.

MAY/JUNE 2019 PIVOT 7

CPA-Letters_EN.indd 7 2019-04-12 5:14 PM FIRST IN

BURNING ISSUE UNEASY ACCESS Banning China’s Huawei from building 5G infrastructure won’t keep us safe from cyber-espionage BY ADRIENNE TANNER

Canada’s decision on whether to ban China’s Huawei Technologies from building 5G infra- structure here couldn’t come at a more difficult time. Tensions between the two nations are uncom- monly high: In December, Canada arrested Huawei’s CFO, Meng Wanzhou, at the behest of the U.S. government, which wants her extradited for violating U.S. sanctions on Iran; China responded by jailing two Canadians working in China, and accusing them of spying. Still, it’s useful to remember this isn’t the first time we’ve wrestled with this sort of dilemma. Nor is it likely to be the last. Six years ago, Canada allowed a state-owned Chinese oil company to buy Calgary’s Nexen Energy for $15.1 billion, despite concerns it would manage the resource in China’s best interests, not ours. We then tightened our foreign ownership restrictions, prohibiting such deals in the future except under “exceptional circumstances.” Last year, Canada made good on that promise when it blocked a state- controlled Chinese company from buying Aecon Group Inc., a large infrastructure company, citing national security concerns. The Huawei conundrum is somewhat different. For one thing, it’s not a state-owned company, though few doubt that, if pressed, it would do its government’s bidding. (Chinese law, in fact, compels citizens and organizations to assist the government with intelligence work.) And Huawei isn’t looking to buy our natural resources, or a big Canadian company. Instead, it’s looking to supply Canada with technology to power lightning-fast 5G net- But if wireless technology should indeed be works. 5G links traditional cell towers and rooftop considered critical infrastructure, and data the antennas with multitudes of small cells able to most important resource of the information age, transmit huge amounts of data almost instanta- then Canada is on the horns of a familiar dilemma. neously through higher-frequency radio waves. And so the question is, how great is the risk? Some Canadian telecoms already use Huawei radio Huawei has insisted it would not use its access to equipment at the top of cell towers and antennas the Canadian market to spy on our government, but have not yet allowed the Chinese company to our companies or our citizens. But three of Can-

supply equipment for core networks. ada’s Five Eyes intelligence-sharing partners—the HAND, GLOBE, ANTENNA BY ISTOCK

8 PIVOT MAY/JUNE 2019

CPA-BurningIssue_EN.indd 8 2019-04-12 2:16 PM The man bringing routers to the Rock P. 12 The case for integrated reporting P. 14 Dissecting Canada’s 3,227-page tax code P. 16 Big ideas on tax reform and data P. 1 8

U.S., Australia and New Zealand—have already FASTER AND 1.48 blocked Huawei over just such concerns. Earlier FASTER: 5G IS SET BILLION this year, Huawei itself was charged in the U.S. TO DOMINATE with attempting to steal trade secrets from T-Mobile. (Canadian corporations and banks have been Predicted rise of 5G mobile targeted in the past by Chinese hackers, according subscriptions, worldwide 1.03 to authorities in Canada and the U.S.) BILLION At the same time, freezing out Huawei would further anger China at a time when feelings are running hot. And Canadian companies warn that 551 a ban on Chinese technology will carry a great cost, MILLION and will further isolate the global business world into two solitudes—those who do business with 191 China and those who don’t. MILLION There are no easy answers, of course, but there’s something else that’s useful to remember. Cyber- 54 security experts say Canadian companies must MILLION constantly strive to safeguard their data, no matter which way the decision goes. Banning one company 4 is no guarantee. And even the best safeguards won’t MILLION be enough to mitigate all the risks. “I’ve been doing this a long time and I’ve never seen it [like this],” 2019 2020 2021 2022 2023 2024 says Danny Timmins, a partner and national leader for cyber security with MNP. Battle of the titans: Percentage change in Timmins advises clients to identify their “crown revenue, year-over-year (2014–2018) jewels”—their most valuable and sensitive intel- lectual property or data—and concentrate on 40% HUAWEI protecting that first. He also advises crafting instant 30% response plans in the event of a security breach. 20% The sooner an organization finds out it’s been hacked, 10% APPLE the easier it is to limit the damage, he says. 0% Canada is a knowledge-based economy and -10% therefore a natural target, says Robert Masse, national partner in cyber security, part of Deloitte’s Last year, Hauwei overtook Apple to become risk advisory practice: “How do you protect against the world’s second biggest smartphone maker foreign-government-controlled and overseas companies getting into the infrastructure, back- (2017/Q2) 22.9% dooring it, so they can leverage a potential conflict 79.8M market share in 10 or 20 years?” It’s a huge challenge. The U.K. (2018/Q2) 20.9% has said it can contain the risks associated with SAMSUNG 71.5M market share Huawei, but Masse has healthy skepticism about its assessment. Confirming the integrity and 11% security of hardware and software systems is almost 38.5M market share impossible to audit today, he says. 15.8% Masse shares the belief that to do business globally, HUAWEI 54.2M market share all governments and companies must live with some level of risk. Building new walls in a world where 11.8% the internet, cloud storage and telecommunications 41M market share 12.1% have broken them down simply will not work, he APPLE says: “It’s very difficult to do that now.” ◆ 41.3M market share

SOURCES: ERICSSON MOBILITY REPORT 2018, CANALYS, MACROTRENDS, IDC WORLDWIDE QUARTERLY MOBILE PHONE TRACKER MAY/JUNE 2019 PIVOT 9

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FRAUD CBD OIL SHAM, WOW One of the cannabis-related products A collection of recent cons promoted in a newsletter and series of fake blogs that a hacker posted to the U.S.-based CPA Consultants’ Alliance website in February. The organization believes the hacker gained access to the site by guessing a member’s password. $130,296 Restitution that B.C. widower Miroslaw Moscipan VANDALEE INDUSTRIES must pay to the Vancouver General Hospital The name of one of several fictional companies concocted by three Nova because his late wife, a hospital administrator who Scotia sisters and their mother to died of cancer in 2012, defrauded the institution allegedly defraud the CRA of $3.6 million of more than half a million dollars. She allegedly through GST/HST scams. The name stole an additional $677,000 from the University references Vandelay Industries, the fake latex business that Seinfeld character George of British Columbia. Moscipan told the court Costanza infamously invents to con his way he had thought his father-in-law, not fraud, was into receiving unemployment insurance. providing his wife’s suspicious windfalls.

“IT’S AN AWFUL THING TO HAVE TO THINK 78% ABOUT WHEN YOUR 340 KM/H Increase in major fraud LOVED ONE HAS Top speed of the McLaren 12C, cases that appeared JUST PASSED AWAY” one of several sports cars that before U.K. courts in Edmonton Police Service 42-year-old CFO Peter Ramdath 2018, compared to 2017. detective Liam Watson’s bought with the $4 million he statement about scammers allegedly stole from his employer, KPMG’s Fraud Barometer who have recently used R. Litz and Sons Co., a crane team says high-tech personal information company in Winnipeg. He faces scams and internal fraud from obituaries to commit multiple charges (that have not are behind the spike. identity fraud. The been proven in court) for the department recommends alleged con, which reportedly families exclude birthdays, funded his wedding and nights out employment histories in Las Vegas, and eventually forced and addresses from their the business to declare bankruptcy. loved ones’ obituaries.

ETHICAL TRADING AND MARKETING LTD. The name of a phoney philanthropic organization that purported to invest its £599,000 wealthy clients’ money in HIV research and Amount that James Arthur’s tree planting in the Amazon. U.K. courts accountant stole from the British sentenced the company’s two kingpins to pop star, who won The X Factor a total of 14 years in prison when investigators in 2012 and is currently signed to exposed it as a tax-avoidance scheme. Simon Cowell’s record label. PHOTOGRAPHS: LEAF, CAR AND TREE BY ISTOCK; COSTANZA AND ARTHUR BY GETTY

MAY/JUNE 2019 PIVOT 11

CPA-SCAMS_EN.indd 11 2019-04-12 2:18 PM FIRST IN

FIRST PERSON THE HARD CELL Newfoundland and Labrador CPA Colin Corcoran has spent the past decade helping propel his hometown into the 21st century

The earliest memory I have is sitting behind my parents’ house in Riverhead, St. Mary’s Bay, Newfoundland, mending my father’s fishing nets. This was around the time the cod fishery collapsed in ’92; my father would get up at 3 a.m., go fishing with his father, come home and sleep for an hour, then get up and work at the local store. Sometimes he’d wake up and have to ask my mother what job he was going to. After the collapse, he had a smorgasbord of jobs to support the family—at one he was trained as a microcomputer technologist on software that was already outdated by the time the course was done. Both my parents really taught me the value of hard work. I had no intention of becoming an accountant; it was on a whim I took a business course at Memorial University and found accounting came naturally. Though my career has been in St. John’s out of CUSTOMERS AND FRIENDS necessity, home has always been in St. Mary’s Bay. And like most small Newfoundland communities, WERE DYING, AND IT FELT LIKE it’s facing some really hard questions about the THE TOWN WAS DYING WITH THEM. future, and a lot of that has to do with connectivity: there’s no cell tower, and internet access is extremely WE HAD TO DO SOMETHING. slow. I’ve been lucky, as an accountant, to be part of trying to solve those issues—especially during River head to St. John’s to take my accounting exam, a couple of real crises. unshowered and in dirty clothes, since we were in The first was in 2011-12. I was splitting my time a water shortage. I was in such a rush to get back between Riverhead, where I was on town council, I almost forgot to turn the exam in. and St. John’s, where I was a policy analyst with Then in 2015, my wife, Nanci, and I bought the the province, and studying to become a profes- pub in St. Mary’s. That was when the reality of our sional accountant. situation hit me anew. I could see the demographic That year things went downhill very fast: the decline we faced, reflected in my own customers. mayor and town clerk resigned, the deputy mayor I remember a fellow who came to the bar almost passed away and the town was regularly in a state religiously, every Saturday. One night I drove him of emergency due to an aging water system. There home, and found out the next morning he’d passed were two schools of thought: one, repopulate the in the night. That became a theme—customers, town council and sort out the finances; or two, friends, were dying, and it felt like the town was dissolve the town and let the province take over. slowly dying with them. We had to do something. I fought for survival. So how do you rejuvenate a community like this? So we held a town hall, and the community chose We’d fixed the water problem—we needed a whole the first option. I became the interim mayor, and new pump system, and to fix and replace a lot of helped build a new budget, made payment plans lines—but now we had a 21st-century infrastruc- with vendors and reallocated spending. It was a ture challenge. And just as water is necessary for

wild time; I remember driving straight from life, connectivity is a prerequisite for economic PHOTOGRAPH BY NED PRATT

12 PIVOT MAY/JUNE 2019

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In collaboration with:

Jointly developed by: icd.ca/DEP FIRST IN

development. More than 100,000 people drive what’s IN NOVATOR called the Irish Loop every year, from St. John’s around the coast of the Avalon Peninsula, and most drive right through the group of communities that CAPITAL IDEAS make up St. Mary’s Bay—they can’t get service, The IIRC chief on what really drives value make a call, check Google Maps, anything. BY PETER SHAWN TAYLOR I’d seen something called the Smart Cities Chal- lenge, a competition by Infrastructure Canada in which winning communities get money for tech- Richard Howitt has a long history of pushing nology initiatives. So I registered a non-profit called companies to do good. Born in England, he spent St. Mary’s Bay (or SMB) Connect Inc. to apply. nearly two decades as an elected member of the Long story short, we didn’t get the funding, but European Parliament, where he served as special the province had just put out a call for funds for cell rapporteur on corporate social responsibility for coverage in under-served areas. I’d previously 12 years and was a key architect of the EU’s ground- approached Bell Aliant about building a cell tower. breaking 2014 directive on non-financial corporate They said we’d need a clear business case—pretty disclosure. He’s now CEO of the International tough with only 1,000 people in all the communities. Integrated Reporting Council, a London-based But, I thought, ‘Okay, I’m a CPA. That’s my job.’ organization that advocates for improved corporate Ultimately, we made a deal, with the province reports worldwide. Pivot magazine talked to contributing 25 per cent and most of the rest com- Howitt at a CPA Canada event in February. ing from Bell Aliant. But the communities needed to kick in 13 per cent. So we transformed SMB Just briefly, can you explain the principles Connect into a social enterprise, with each com- behind integrated reporting? munity paying a service fee over a 10-year span The nature of corporate information is changing. to cover it—none could possibly pay up front. We We now live in a multi-capital world. We still need submitted a joint proposal to the province, and financial reporting, of course, but there’s also in 2020 we’ll be building a $1.03-million cellular environmental, social, human resource and intel- system in St. Mary’s Bay. lectual capital. These are the true value drivers We’ve also been trying to address internet defi- of the future. So firms need an integrated report ciencies. Again, it’s cost-prohibitive for big telecoms that captures all these, and has as its objective to deliver high-speed service here, but SMB Connect long-term value creation. The IIRC was created is working with business students at Memorial to to transform corporate reporting worldwide look at developing a micro-ISP, taking the one based on these principles. high-speed line we have now and using it to deliver high-speed throughout the communities. “I’M ALWAYS ASKED, ‘IS THIS I still work in St. John’s full-time, as director of ABOUT MORE REPORTING?’ NO. finance and administration for a technology incu- bator called Genesis. It helps support technology IT’S LESS BUT BETTER REPORTING.” start-ups from early stages right to investment, and it’s been growing astronomically. I’m the only CPA And how is that going? at Genesis, too, so I can help clients on all kinds of We are making extraordinary progress, but we’re financial and taxation issues, and I’m available to tempered by the size of the task. Right now we have founders and C-suites—sometimes even jumping 1,700 companies in 72 countries doing integrated into clients’ companies as interim CEO, to get them reporting, and it’s already the leading practice in through a tough spot. Japan and South Africa. We’re also seeing big I believe it’s important work for this province. numbers in Brazil and Europe. In five years it But so is what I do in St. Mary’s Bay. will likely be the norm in China. And we’ve seen Every time I drive back from St. John’s—even big-name adopters in the United States as well, though I’ve driven the route hundreds of times— such as General Electric, Southwest Airlines and there’s just something about coming around the Jones Lang LaSalle. rolling green hills, dodging moose and potholes But keep in mind that financial reporting itself and getting the first glimpse of the lights of River- developed over hundreds of years. Our target is to head in the twilight. It’s home.” ◆ make integrated reporting the global norm for cor- —As told to Matthew Halliday porate reporting by 2025. So that’s a huge challenge.

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CPA_Innovator_EN.indd 14 2019-04-12 5:14 PM How would you assess Canadian progress? and impacts. Only when this new mindset comes Canada is a priority market for us. There is a lower through will we have truly succeeded. I am always level of awareness here when compared to some being questioned: “Is this about more reporting?” other markets, but let’s not underestimate your No. It is less but better reporting. More concise strengths. CPA Canada has been an important force information that is more material to the company. as a leading and active member of the IIRC globally. It’s cutting the clutter. [Canadian Dominic Barton is its current chair.] Is concern about reporting on climate What explains the low level of change spurring action on this front? awareness in Canada? Is part of the Climate is top of mind for many businesses right problem that people feel much of now. And so we can see climate change disclosure this information is already included gaining traction among Canadian firms. It’s a in Management’s Discussion and Analysis stepping stone. But it doesn’t stop there. There’s (MD&A) documents? population change, demographic change, tech- If so, then that’s a good problem to have. Let’s nological change. All these megatrends are as big be honest, Canada is an advanced economy in terms of impact as climate change. And only with a pretty good system of reporting. So you by having a connected—integrated—view can are starting from a high point. And if these companies really know what is material to their ideas are already included in MD&As in long-term value creation. Canada, then we should consider that a success, not a failure. But can we maximize the benefits What role will accountants play in of this process? CPA Canada did an analysis and this transition? found that integrated reporting is compatible The IIRC was set up as a result of the with existing reporting requirements. efforts of the International Fed- So that presents a wonderful oppor- eration of Accountants [IFAC, tunity for companies here to improve of which CPA Canada is a mem- their reporting. And you already ber]. If accountants are going have some outstanding examples of to ensure their reporting integrated reporting in this country. remains relevant in the future, then this work is Such as? absolutely essential. Infor- Vancity [Vancouver City Savings mation is changing. The Credit Union] was right there at difference between the the start of the IIRC. And it pro- old days and now is the duces an outstanding integrated difference between a tap report. Co-operators Insurance and a lake. Before, the also produces a very high-quality tap turned on the report. TransAlta in the energy information once a sector is noteworthy, particularly year, and then turned for showing how its transition off again. Now informa- to renewable energy has been tion is coming from all incentivized by integrated directions. Companies will reporting. So I give three cheers have to decide whether they to the organizations here that want to tell their own story, are already doing it. or if they want to let others do it for them. What will be required to Two years ago, IFAC said inte- achieve full-scale adoption IIRC CEO grated reporting is the future of in this country? Richard Howitt corporate reporting. No hesitation. It’s all about a mindset shift—from No qualification. And pay credit to short-termism to having compa- accounting schools and the big nies look to the long-term and accountancy firms for their thought adopt a holistic view of all their leadership and support. The whole

PHOTOGRAPH BY AARON WYNIA different resources and relationships profession is behind this mission. ◆

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BY THE NUMBERS 79% CPAs in leadership DEATH BY TAXES positions who believe Canada’s tax system requires Taxes used to be simple. In 1918, when Canadians filed their first tax returns, they filled in a mere a comprehensive 23 lines on a form and forked over as little as two per cent of their income. Today, that’s 328 fields and review an average of 23 per cent. And over the past century, the Income Tax Act has ballooned from six pages to more than 3,000 (in the bilingual version). The last major review of Canada’s tax system was completed in 1967. Many, including CPA Canada, believe it’s time for another. —Steve Brearton

Outcomes of tax return objections

N 3 o 4 c . h 8 l % u a % f n s g 3 s . e e 2 c

4

c

u S

l fu ss 3% e 0.6% 22. cc su $6.9BEstimated amount that Canadian taxpayers spend to comply with Increase in Partially personal income tax rules every year tax owing

Days required to complete a CRA audit Offshore and “aggressive tax $1,200,000,000 International planning” Estimated federal benefits for low-income households that go and large unclaimed annually due to excessive tax complexity business objections

Small and medium 53,500,000 enterprises Calls to the CRA regarding taxes or benefits, March 2016 to March 2017

Canadians who filed SHORTEST LONGEST formal objections to their 279 425 213 251 323 541 70,352 tax returns in 2015-16

Ti me it takes a business to prepare, file and pay all taxes, 2018

105 HOURS 131 HOURS 175 HOURS 240.5 HOURS ,958 HOURS 34.5 HOURS 90 HOURS United Kingdom Canada 142 HOURS United States 1 Finland Mexico Hong Kong 63 HOURS China Brazil Switzerland

SOURCES: CANADA REVENUE AGENCY, CPA CANADA, CPA CANADA BUSINESS MONITOR, DELOITTE, THE FRASER INSTITUTE, OFFICE OF THE 16 PIVOT MAY/JUNE 2019 AUDITOR GENERAL OF CANADA, PROSPER CANADA, WORLD BANK

CPA-INFO_EN.indd 16 2019-04-18 4:27 PM COMMON WORDS 2,851 → “Canada” The word “ 1,110 → “rules” 744 → “fiscal” appears ontax ”

this page nine 555 → “death” times. It shows up 10 → “birth” 28,505 times in the full Act.

Frequent notes direct readers to amending acts that are not contained in the text.

The Act contains 19 parts, 11 divisions and 18 subdivisions. This page contains 642 words. The entire Act has 1,029,042.

82,370 The Act contains in The English 120 different Patient by sections titled Michael “Definitions. Ondaatje ”

783,137 in the King 40,000 James Bible in an average native English speaker’s vocabulary 228,132 entries in the Oxford dictionary

The Act concludes with five pages This version of the of amendments” Act is 3,227 pages “not in force. long. When it was introduced in 1917, it was six pages.

PHOTOGRAPHS BY ISTOCK MAY/JUNE 2019 PIVOT 17

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TAX WATCH WITH NEW ZEAL AND INSPIRATION Canadian politicians might want to look south—way south—to learn how to reform the tax system without dividing the nation

Are election campaigns a good time to talk about tax reform? Most Canadian political advisors would say no—it’s too divisive, too complicated. As former prime minister Kim Campbell famously BRUCE mused on the subject of social Finance Minister Bill Morneau BALL on budget day in Ottawa policy during the 1993 election: “This is not the time to get involved in a debate on very, very serious issues.” it would improve fairness and make the national New Zealanders might offer a different answer, revenue system more sustainable in the face of and it’s one Canadians would do well to consider. demographic, workforce and technological change. Over the last 30 years, successive governments The government has put its plan through exten- and academic groups in Wellington have under- sive public consultation prior to the GTPP, which taken comprehensive tax review efforts almost provides for “early consideration of key policy every time power changes hands. And since 1994, elements and trade-offs of proposals, such as their legislation there goes through a “generic tax policy revenue impact, compliance and administrative process” (GTPP) every time they want to change costs, and economic and social objectives.” The the system. It ensures that the tax system remains process builds in mechanisms for external feedback not only calibrated to the political goals of the party at several stages. in power, but also reflects broader changes the A preliminary analysis was done by an 11-member country is going through. working group, chaired by a former Labour finance In Canada, by stark contrast, the federal govern- minister, that included five tax specialists, two of ment hasn’t conducted a proper, principles-based whom are members of the Tax Advisory Group of review of the national tax system in half a century. Chartered Accountants Australia & New Zealand The last time we did, Canadians were celebrating the (CA ANZ). Since it began in late 2017, the process centennial and marvelling at a Toronto Maple Leafs has included opinion polls, written briefs and Stanley Cup win. Various governments since then public hearings. An interim report, released last have mainly added, subtracted and tweaked elements September, recommended various options on of the system, leaving a mishmash of tax measures Canada’s last extending the taxation of capital while, in fact, proper tax that look like a frequently mended overcoat. A recent review was in ruling out a capital gains tax that does not form poll by Nanos Research for CPA Canada found that 1 9 6 7, part of the existing Income Tax Act. The govern- ILLUSTRATION BY KAGAN MCLEOD 81 per cent of Canadians see a comprehensive tax back when the ment intends to take recommendations from a final review as a priority for the federal government, with Leafs last won report and put them to voters in next year’s election. 35 per cent saying it should be a high priority. a Stanley Cup John Cuthbertson, tax leader for CA ANZ, says However, hopes by CPA Canada and other orga- the most salient element of the process is that it’s nizations that Ottawa would announce such a undertaken “holistically,” meaning that specific review in the March budget never materialized. changes to the system must account for their impact New Zealand, meanwhile, is in the home stretch on the entire tax code, including policies governing of its latest review effort. Its Labour coalition gov- charities, retirement savings and the environment. ernment came to power in 2017 on a promise to The government has dubbed the exercise “a national

implement some form of capital gains tax, saying conversation on the future of tax.” PHOTOGRAPHS: MORNEAU AND KEON BY GETTY;

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CPA-Columns_EN.indd 18 2019-04-15 10:58 AM It’s an impressively transparent process and it Regardless of the question, though, at the heart offers some important lessons, quite apart from of every unsolved economic quandary is the issue the fact that New Zealanders don’t wait half a of data. Or rather, our lack of data. Let’s consider century to make big fixes to their system. As CPA an example: designing a GST/HST tax credit for Canada’s recent position papers on the subject point lower- and middle-income households. The idea out, Canada’s system is suffering from a host of behind the credit is that, since sales taxes are regres- shortcomings, including the loss of our corporate sive, some households should get a break by getting tax advantage since the U.S. slashed its rates; some money back. But how much do we give? uncompetitive personal income tax rates and The problem isn’t that there’s no data—obviously, thresholds; an overreliance on income taxes; and since the GST/HST tax credit has been around for administrative complexity. ages. The problem is that our data needs aren’t The federal government’s economic statement static. For years, the government has used its Sur- last fall offered some temporary measures designed vey of Household Spending to collect information to accelerate business investment, but what is needed on how much people spend on a range of goods is a long-term framework constructed on a rational, and services. This data can then be broken down consensus-based enumeration of core principles, by income cohort so we can figure out how much such as simplicity, fairness, efficiency, competitive- lower- and middle-income households spend on ness, transparency and regular review. key necessities in order to design a tax credit that New Zealand’s lawmakers realized this back accurately reflects that spending. in the early 1990s and constructed a neutral space Simple, right? in which tax policy can be routinely reviewed Not so fast. That survey requires households to and improved. That framework has survived 41% accurately track how much they spend on all sorts several governments with sharply different and falling. That’s of goods and services for an entire year. Statistics ideological perspectives and proves there’s a way the response Canada requires monthly collection cycles where of talking about difficult subjects that govern- rate for a key households are asked to fill out questionnaires and StatsCan survey ments would rather avoid. If it can happen there, of household keep literal diaries of their spending. How likely why not here? ◆ spending habits. is it that you’d be willing to do that? Actually, I already know the answer—not likely. Bruce Ball, FCPA, FCA, is the vice-president of In the 2017 survey, the response rate to the ques- taxation at CPA Canada. tionnaire portion was a decent 67 per cent. The response rate for the diary portion was considerably lower at 41 per cent. High response rates are criti- THE ECONOMIST cal because Statistics Canada spends an enormous amount of effort ensuring that their data accurately reflects Canada as a whole. MONEY BLIND Statistics Canada called the decline in the diary How can we design good public policy portion concerning, noting that it had been fall- with bad, or non-existent, data? ing over time. This obviously raises questions about the reliability of the data. How can we be confident in using this data and basing policy Canada is faced with all sorts of decisions around it? difficult economic questions that This is not a good situation, and Statistics Canada we can’t answer. Some are quite knows that. This brings us to last October when it old, and we just can’t seem to solve was revealed that the statistical agency was planning them. Others are newer, but equally to go directly to the banks for “individual-level difficult to crack. Still others are financial transaction data.” It’s difficult to say with FRANCIS FONG somewhere in the middle, where certainty that the move was related to the low we have some evidence for a pos- response rate of the household spending survey, sible answer, but not one that’s clear-cut. How do but it’d be a hell of a coincidence if it wasn’t. we solve chronic homelessness, or how do we Statistics Canada ultimately dropped the idea due prepare Canada’s workforce for a future labour to a widespread public backlash. And that points market where AI and automation are ubiquitous? to exactly the problem we face with data today. How does a reduction in the corporate tax rate Our data needs are getting more complicated as

ILLUSTRATION BY KAGAN MCLEOD affect business investment? the questions we’re asking get more complicated.

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CPA-Columns_EN.indd 19 2019-04-15 10:59 AM FIRST IN

Yet our attitude about data is a constantly moving target—especially today given concerns about how our data is being used. So how do we find that IF I HAD A balance between getting deeper, more granular (1/4) MILLION data than we have in the past and privacy concerns that are paramount in today’s environment? DOLLARS There’s no easy answer. The federal budget this What it takes to feel at financial ease year includes numerous measures aimed at getting BY ADRIENNE TANNER dollars in the hands of Statistics Canada and other agencies for the express purpose of collecting better data. Everything from the real estate sector How much money through school to the health care and energy sectors are getting do you need to make and who have no to feel financially retirement savings much-needed investments in this area, and it is comfortable? whatsoever,” says here that the CPA profession has an important According to the Woolley. In fact, role to play. Canadians polled by in a 2018 survey financial services conducted by CPA firm Edward Jones, Canada, 42 per cent THOUGH IT’S UNDER-APPRECIATED, the magic number of respondents said is—wait for they plan to work ACCOUNTANTS ARE RESPONSIBLE it—$250,000 per past age 65; half of person, per year. that group said they FOR THE SINGLE MOST IMPORTANT After tax, that figure can’t afford to retire. drops significantly (to $155,000 in B.C., STATISTIC USED BY ECONOMISTS for example), but it’s still nearly triple Unbeknownst to most, the accounting profession the $56,000 in is responsible for a cross-section of data that we after-tax income use every day. When Statistics Canada asks firms that the average Canadian makes. for data on expenditures and financial disclosures, The quarter- the data is directly aggregated into what we know million-dollar figure Instead of day- more commonly as GDP, or gross domestic product. is delusional, says dreaming about a The individuals providing that data are typically Hugh Woolley, a six-figure paycheque Vancouver CPA with to fix that, Woolley in the financial reporting areas, which are stacked Lewis & Company. says, it’s best to with accounting professionals. Though it’s under- Very few Canadians get ahead and appreciated work, accountants are largely respon- earn that much—nor start saving early. do they need to. Roughly three- sible for the single most important statistic used Most individuals can quarters of the by economists everywhere. get by fine on nearly respondents in the And it’s not just financial data. All kinds of data $5,000 a month, he CPA Canada survey at the firm level are in the hands of accountants, says. “Unless you already contribute are living like a king, to their savings and that data is going to be looked upon in the near $10,000 a month is every month. future to answer some of those very tough policy enough for even a Beyond that, track questions. That’s a positive thing, because what’s couple to live very, your expenses, put very comfortably, money into RESPs needed now in managing that data is trust—trust assuming you don’t and RRSPs, cut that we are using and managing that data in good have debt,” he says. down on unneces- faith—and the accountancy profession is well- The good news, he sary expenses positioned for that, too. adds, is that “for two like eating out, and people each netting switch from two A recent Gallup poll in the United States noted $56,000, the discon- family cars to one that accountants are consistently rated as one nect”—between if possible. Once of the most honest and ethical professions, what you make and people see where behind only nurses, doctors, pharmacists, school what you think you their money is going, need—“is not as big they’ll realize it’s teachers and police. Accountants have a real as it first seems.” possible to feel opportunity to play a leadership role in the future Still, what explains financially comfort- of how we manage our data. Our economic futures that disconnect? able without a huge Panic, perhaps. payday, even if that depend on it. ◆ “There are a lot of means keeping the people in their 40s Toyota and ditching

Francis Fong is chief economist at CPA Canada. helping their kids go the Benz. ILLUSTRATION BY LEEANDRACIANCI

20 PIVOT MAY/JUNE 2019

CPA-Columns_EN.indd 20 2019-04-15 10:59 AM INNOVATION FOR SUSTAINABILITY Create wealth. Increase productivity. Drive innovation.

KEYNOTES SPEAKERS:

JENNIFER GERVÈS-KEEN CHITRA ANAND ANDREW KEEN

Corporate Executive Coach Intrapreneur Expert Writer, Speaker, and Founder and Former Head Entrepreneur JGK Consulting of Communications Microsoft Canada

Stay tuned for more feature speakers In association with

#CPATHEONE REGISTER NOW: cpacanada.ca/THEONE2019

CPA-Ads-7.875x10.875-Speakers-V3.indd 1 4/5/2019 3:42:10 PM CPA_Keurig_EN.indd 17 I a start-up. “Westart-up. a alot.” to create had like felt almost place the that adding old,” 10 were barely he years says, “Atsystems coffee home, single-serve company. of feel ayoung the had still rapidly, Keurig growing and large was organization the While environment. corporate unusual an in himself going to drive value.” team: “We focus onwhat’s Members ofthefinance Green Mountain Inc., he found found he Inc., Mountain Green of Keurig subsidiary Canadian the Inc., Canada Keurig joined Gratton n 2014, Guillaume when Designed for the Future A t K transactions to driving growth. It’s great for business—and fantastic for recruiting. fantastic It’s for growth. business—and great to driving transactions eurig Dr Pepper Canada, CPAsfromtracking Canada, have Pepper outlook completely shifted Dr their eurig A

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PHOTOGRAPH BY MAXIME JUNEAU | APMJ CPA_Keurig_EN.indd 18

PHOTOGRAPH BY ERICA ALLEN STUDIO and analytics.” analytics.” and on insights to focusing GAAP-focused and transactional purely being from mindset the shifting “It about was functions. other to relationship their to rethink members team his company. growing afast- of even performance the boost CPAs that can team management senior of the members other the on showing focused Gratton resets, cultural similar have attempted that organizations other in happened has As more company generally. the and team afinance CPAsthat play within role the rebooting about all was led he transformation the of story The tasks. to their change real bring to team his with worked closely Gratton laid, had predecessor his says. value,” Gratton to drive “We on what’soperations. focus going and strategy corporate execute and to plan departments other with closely works Today,team finance the growth. at driving aimed orientation ma “the rest of the team can’t know if if can’t know team of the rest “the explains, Gratton to ourselves,” information the keep we “If firm. the side of business to the useful be could insights the so information financial company’s granular the demystifying involved transformation cultural data.” sharing about candid [side] and open business being the and with partnerships about “It’ssays. all past,” he the repeating of just instead revenue] ideas new driving [forto find the business “forces analysis financial customers. other out alienating with account for agiven investment on return how to maximize showing formas pro profit-and-loss generate to findings those use and promotions, of previous performance the to track tools analytics data used team finance the he says, To insights, those deliver accounts. retail on various spend promotional the to optimize teams strategy commercial and marketing sales, Keurig’s with working began For example, Gratton’s group group Gratton’s example, For encouraging was he says, step, A key groundwork some of the Continuing Another crucial aspect of the of the aspect crucial Another forward-looking of kind That ndate to a far more proactive more proactive to afar ndate

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2019-04-15 11:00AM

FORESIGHT FUTURE

PROOFTo thrive in the future, CPAs will need to shape it. Inside Foresight, the project to reimagine the profession.

BY LUC RINALDI

Fifteen minutes north of Halifax, there’s a giant distribution centre downstairs, where every hour lobster on the side of the highway. You can’t miss employees send and receive truckloads of lobsters. it. It’s perched atop a sign that says Clearwater, its It may not look—or smell—like a typical CPA’s crimson antennae and faded claws beckoning to office. Nor does Fortney always employ what some motorists to pull over and pick up some seafood. might consider typical CPA knowledge. “Account- Inside a white-and-blue storefront, customers can ing practices and audit standards are a piece of pluck lobsters from a cross-shaped reservoir or buy my credibility as CPA, but they don’t define who scallops by the pound off beds of ice. Locals who I am or what I do on a day-to-day basis,” she says. regularly make the pilgrimage know that the only “The only person who asks me questions about way to get fresher shellfish is to catch it themselves. accounting standards is my auditor.” What those locals may not know is that, beyond Then again, there is no such thing as a typical the back wall of that shop, the roadside facility is CPA. Fortney saw that firsthand last fall, when she also the HQ of Clearwater Seafoods, an industry was one of about 40 participants—accounting firm Fgiant that did $621 million in gross sales across the execs, entrepreneurs, regulators, academics, gov- globe in 2017. The best place to see the entire opera- ernment representatives, sustainability experts, tion in action is inside the office of its chief financial technology leaders, and professional accountants officer, Teresa Fortney. From her window, the come- working in business and industry—to participate from-away FCPA can watch sailboats cruise through in a series of three roundtables on the future of the the Bedford Basin. From her desk, she monitors accounting profession. The sessions were a central every aspect of the business, including dozens of element of an ambitious CPA Canada project processing facilities and vessels across the world, called Foresight, an ongoing multi-stakeholder sales in 45 countries, as well as the storage and process to reimagine the profession. In person

24 PIVOT MAY/JUNE 2019

CPA-Foresight_EN.indd 24 2019-04-17 2:30 PM Teresa Fortney

and online, the Foresight process asked more But those 39 viewpoints were equally important than 1,200 CPAs and non-CPAs: in a world of to the process. “Teresa brought an important perspec- emerging technologies, changing demographics tive as a CPA working within a business,” says Tashia and new geopolitical pressures, what role should Batstone, FCPA, CPA Canada’s senior vice-president the Canadian accounting profession play? of external relations and business development. Over the three roundtables, Fortney and her “She stressed that we have to think not only about fellow participants debated all the thorny questions reporting and measuring, but about the strategic that dog the future of accounting: will artificial role that CPAs play co-piloting an organization in intelligence replace auditors? Are historical finan- conjunction with the senior management team. cial statements becoming obsolete? How much Finding new ways to unlock and create value in an should CPAs know about Big Data, machine organization is core to what she does as a CFO.” learning and blockchain? Finding ways to create value is also a central theme Those are not easy questions to answer. “At the of the report that emerged from Foresight’s first roundtables, everybody came together with their phase, which hints at a bold, perhaps unfamiliar own experiences, contexts and frames of reference,” vision of accounting. It asks, if the heart of yesterday’s says Fortney. When they thought about what it accounting profession was equating value to tan- meant to be a CPA, they thought about their own gible assets and historical based financial statements, careers. “People were simplifying it into their own what about today and tomorrow? What skills and paradigm. Foresight stretched everybody to think proficiencies should Canadian CPAs have in the about more than their own path and experience. information age, whether they work in a firm, a

PHOTOGRAPH BY RILEY SNITH My perspective as CFO of Clearwater might not be start-up or a seafood business? Where can they the same as the perspectives of the 39 other people.” provide value? Perhaps the Canadian CPAs of

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2030 will be not just auditors and accountants, but guardians of data integrity, ensuring the information that flows in and out of AI applications is accurate “WE CAN’T REST ON and unbiased. Or they may be stewards of the planet, measuring intangibles like sustainability as robustly as they record financial information. TRADITION. WE CAN’T Companies will always need business partners and trusted advisors who can provide professional judgment, but what it means to be that advisor is JUST BE THE KEEPERS changing. Foresight is trying to get ahead of that change and shape it. “We can’t rest on tradition. We can’t just be the keepers of finance,” says Joy Thomas, FCPA, the president and CEO of CPA OF FINANCE. WE HAVE TO Canada. “We have to look at things differently. I know the profession has a future that is valuable and bright and exciting. But to get there, we can’t DRIVE CHANGE.” wait for the change to drive us. We have to be the ones who drive the change.” to best position ourselves as professional accountants, and how we can serve and support business leaders or decades, the accounting profession has while being true business leaders ourselves.” followed a familiar storyline. “Something To do so, CPA Canada hired Catalytic Gover- happens, regulators come in, a change gets nance, an agency that helps organizations strate- made, more rules get put in and we adapt,” gically plot the future. Together, they convened Fsays Thomas. “It’s a very traditional profession, and the three main roundtables, held a series of smaller it hasn’t had a massive shift in a very long time.” consultations and launched SoapBox, an online Since 2015, CPA Canada has been trying to forum where the entire membership and other interrupt that cycle. The organization released the stakeholders could weigh in. Using an AI analytical “Drivers of Change” report, which considered how tool called Lexalytics, CPA Canada summarized economic, environmental, technological, societal the online insights and incorporated them into the and geopolitical forces would transform the world roundtable discussions and final report. in the near future, and how CPAs might employ those At the roundtables, several speakers—including drivers in their organizations’ strategies. The takeaway: McKinsey Global Institute partner Sree Ramaswamy if CPAs don’t actively prepare, they risk confronting and former Xerox chief scientist John Seely Brown— their “Uber moment,” says Batstone. “At CPA Canada, presented on automation, artificial intelligence and we see it as our responsibility to make sure our the rules that will govern Big Data, among other members are prepared to change and adapt and topics. The roundtable participants then developed continue to add value in a dynamic business world.” four “scenarios,” plausible visions of the future of Tim Herrod, a roundtable participant from Sas- the profession and the globe at large: katoon, agrees. “This is not a comfortable process, Slow and Steady: a world in which the interna- but it’s a valuable investment,” says Herrod, CPA, tional community values stability above all else. a senior external advisor with Bain and Company Nations cooperate, but heavy regulation and risk who specialized in procurement transformation. aversion stifle the pace of innovation. Few meaning- “Many other professions sit back and look at the ful steps are taken to combat climate change. world and wonder why things are changing. CPA Phoenix Rising: after a series of economic and Canada is doing something strategic and essential.” climate crises, global powers band together to embrace When CPA Canada launched Foresight, they collaboration and transformative change. Smart looked at what their international counterparts regulation encourages progress without letting it were doing to prepare for the future. “Accounting run wild, achieving major progress in technology, bodies around the world have been talking about sustainability and inequality. the future of the profession in terms of financial Tech Titans: without a concerted effort from reporting and finance,” says Batstone. Notable governments and regulators, global tech firms projects in the U.S. and the U.K. are rethinking dominate the economy and dictate the direction audit altogether. The Foresight team wanted to go of the planet. While mass innovation improves further. “We wanted to understand the future of the world in some ways, it also leads to inequality business—where we’re moving as an economy, how and job insecurity.

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My Way: a future in which the planet embraces hindsight to foresight. Given the need for real-time neither transformative change nor a common global decision-making, the ability to wait for historical purpose. National governments turn inward, leaving based financial statements is no longer a luxury the world more vulnerable to inequality, climate most businesses can afford. They require data to crises and geopolitical friction à la Brexit. support their decisions, and that data must be The scenarios were not meant to definitively available in real time. I don’t think all CPAs need predict the future, but to show four plausible versions to be data scientists. But I do think we need to of it. Once the roundtable participants realized understand the science of data.” what all scenarios had in common, they debated— In many cases, the data won’t be financial at all. often passionately—what skills and services would “If we have all of our eggs in the basket of measur- be most valuable in all four of those possible futures. ing financial value,” says Batstone, “we may be Most importantly, which of those would CPAs be focusing on things that aren’t really relevant to best suited to provide? business users and investors today.” They may be more focused on, say, sustainability. At Clearwater, mar Ahluwalia knows speed can be Fortney’s colleagues work with government and unnerving. His customers told him so. He’s the Marine Stewardship Council, an independent the vice-president of partnerships and non-profit, to measure the sustainability of their capital markets at the online lender OnDeck, fisheries, a renewable resource. But they don’t Aa company that uses more than 2,000 data points measure sustainability directly within their busi- from more than 100 real-time sources to make small- ness. It wasn’t that the topic hadn’t come up. “Being business lending decisions. In fact, the pace of the in the seafood industry, sustainability is top of information was so breakneck that users complained mind for us. We live it every day. We label and it was overwhelming. “We’ve actually had to slow package that way,” she says. “But once you get to our model down so customers don’t find it too fast,” the financial package we prepare at the end of the he told a Foresight roundtable in October. year, none of that is woven in.” That speech led to a vigorous discussion among So, after returning from the Foresight roundtables, the roundtable participants. For starters, what Fortney started looking for ways to weave it in and was all that data, where was help readers truly understand Clearwater’s sustain- More than it coming from and could it ability and innovation story. “These are not easy be trusted? And if OnDeck things to measure or report on,” says Batstone. The was relying on real-time data profession is exploring approaches, such as integrated instead of historical based reporting, to measure and report on other sources financial statements, where of value, such as natural and human capital. However, did that leave accountants there is still inconsistency in the marketplace. Even 1,200 and auditors? if businesses decide to report on their sustainability people were consulted in A cynic might answer: job- or the integrity of their data, their reporting may Foresight’s in-person round- less. But an optimist might not be consistent from company to company, or tables and online forums instead see the opportunity in even necessarily comparable from year to year, OnDeck’s story. Data is messy Batstone explains. “It’s a bit of a Wild West.” and incessant. The flow of data (everything from stock prices to industrial gauge he second phase of Foresight, currently readings to social media posts) has multiplied 45-fold underway, will determine how CPAs can since 2005, according to McKinsey. Those figures become sheriffs in that Wild West. “We, as and tweets might not be important individually, a profession, have a lot of expertise in frame- but data as whole is the fuel that powers artificial Tworks and standards, so there’s a role for us to intelligence, the technology that can teach cars play,” says Thomas. The profession has relationships how to drive themselves and predict the outcome with government, regulators, standard-setters, of a tax-law court case, among other revolutionary private and public companies, international applications across virtually every industry. accounting bodies and more than 217,000 members. On Deck’s platform didn’t need more data, whether “There’s no one stakeholder in our ecosystem from audited statements or real-time stats. It needed that can drive change alone,” says Thomas. But someone to make sense of the information, verify CPA Canada is in the unique position to bring it and know when to question it. “I think there’s all those stakeholders to the same table. a huge role there for the CPA to play in that,” says Foresight Phase Two working groups will research Batstone. “The profession needs to shift from how the profession can work with regulators,

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standard-setters and other stakeholders to better understand the role professional accountants can play in areas such as data standardization and new models of creating, identifying, measuring OPENING GAMBIT and reporting value. They’ll also ask important questions about the skills and competencies that How a fintech revolution could change CPAs will need to succeed in the information age. the accounting world With technologies changing so rapidly, CPAs will need to be adaptable and resilient, and embrace BY BRENDA BOUW change by undertaking a continuous process of learning, unlearning and relearning. Their answers may lead to a very different kind abrielle Loren looks forward to a day when of accountancy, starting with the way CPAs are her accounting team no longer has to cajole trained. “This is going to come down to new CPAs,” clients into handing over myriad financial says Herrod. “If we’re going to have an impact on statements to help properly balance their the profession in 2030, it starts with education: Gbooks. Once open banking becomes available in who are we attracting, why are they deciding to Canada, she says, accountants can get a client’s come to the profession and how are we preparing permission to access financial information directly them for what the market needs?” He argues that from the bank. “It will make our lives a lot less the designation should eschew highly technical complicated in trying to hunt things down,” says training in favour of valuable core competen- Loren, a CPA and partner for business development cies—whether that’s general business acumen or at B.C.-based accounting firm Loren Nancke. enabling skills like negotiation and problem Jeff Cates, until recently the president and CEO solving—on top of which CPAs can develop of Intuit Canada, the company behind TurboTax specialized knowledge. and QuickBooks, is even more enthusiastic. “It’s Still, for every new competency that enters the going to be an accountant’s dream,” he says. Cates certification program—e.g., data analytics, sees accountants using open banking to help their accounting for the sharing economy—something clients make better financial decisions which, in must come out. Herrod, for one, questions whether turn, will add more value to the profession. CPAs need to learn the fine print of audit. “Digital Open banking promises to be the next revolution automation and artificial intelligence could give in the financial services industry, even if many us the ability to complete many audit procedures Canadians aren’t aware of it yet. It allows, with without any humans involved,” he says. “If we want the customer’s permission, to stake our profession on that, we won’t have a the sharing of data directly profession.” Ultimately, the decision comes down between a bank and a third to: what skills will the CPAs of 2030 need? party, such as an accountant Teresa Fortney would like to know—not just for or another financial firm. herself, but for her daughter. While Fortney will Everything from bank trans- leave Clearwater this year to pursue opportunities actions and loans to invest- £7.2b closer to her family in Ontario, her daughter, who ments at various institutions, The “revenue opportunity” is currently pursuing her CPA designation, will and more, could be made open banking is predicted to continue to work in the audit practice of a large available. The third party can create in the U.K. by 2022 firm. Fortney wonders if her daughter’s future job then use that information to even exists yet. “In another five or ten years, I’ll be offer a wide range of products joking with her, ‘So tell me, how does audit connect and services, like loans, mortgages or financial to what you’re doing now?’” advice. Open banking is expected to boost com- Fortney is excited, not scared, to watch it all unfold. petition and innovation in the financial sector “It would be easy to see all the change that’s going and lead to more efficient and effective tax, account- on in the world, the environment and the political ing and audit services. arena and be fearful of it,” she says. But speaking “It’s a big issue unfolding right now that will have to other CPAs and realizing they all want to work an impact on the profession—a great example of together to remain relevant, she’s optimistic. “It what we are looking at with Foresight,” says Tashia becomes less scary. There might not be a definitive Batstone, FCPA, the senior vice-president, External path forward. But Foresight is helping set the direc- Relations and Business Development at CPA Can- tion. It’s starting to get a little bit clearer.” ◆ ada. “A vast amount of data is going to be moving

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around. It will need structure around it. CPAs have see and control all their money from multiple insti- a tremendous amount of value to add, because tutions in one place. Experts see financial manage- providing information, integrity and trust is what ment and credit scoring as big opportunities, as we’ve done since the advent of accounting.” well as integrated lending and accounting platforms The U.K., the European Union and Australia have for small-to-medium enterprises. already passed open banking legislation. In its 2018 Still, any new technological advance comes with budget, the Canadian government promised to risk, and open banking is no exception. Some of study the subject, and last fall Finance Minister the biggest concerns include privacy breaches, data Bill Morneau created a four-member Advisory security, cybercrime and fraud, according to the Committee on Open Banking that included Colleen PwC paper. It cites a 2018 Statistics Canada report Johnston, a CPA and the former CFO of TD Bank. showing that banks were the primary target of The members took submissions until early Feb- cybersecurity incidents, at 47 per cent in 2017. ruary and in the months ahead are expected to “Open banking has the potential to magnify the release a report that Ottawa says will assess “the impact of breach and cybersecurity incidents when potential merits of open banking for Canada, with they happen,” the report states, while calling on the highest regard for consumer privacy, security regulators to figure out what “a good data steward- and financial stability.” The government should ship model looks like.” move fast, says Cates: “If we don’t get in front of Ensuring data is kept private and secure could this, other countries will.” be more challenging and expensive with the Open banking will have “a profound impact on increased flow of information between parties. consumers and the financial ecosystem,” according Industry standards may also need to be developed to a PwC report released earlier this year. In the U.K., to ensure the consistency and control of client data where it came in just over a year ago, PwC sees a handled by accountants. Michael Wong, Principal, “revenue opportunity” of at least £7.2 billion by 2022. Technology, Research, Guidance and Support with So far, a lot of the innovation has been in “account CPA Canada, expects to see some impact on the integration,” open banking apps that let consumers audit side. “One question may be, how will auditors

Open banking could make Bay Street more transparent PHOTOGRAPH BY CP IMAGES

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transition from performing audit procedures on bank statements to data feeds? What controls will be necessary? These are the sorts of things auditors will need to think about.” MAKING NEW Ryan Leopold, a CPA, the national banking and capital markets assurance leader at PwC Canada and a co-author of the report, believes open bank- ing will help drive innovation. Still, “there are challenges to getting this in use and making it VALUE JUDGMENTS widely accepted,” he says. In the U.K., uptake has Jon Lukomnik, a long-time institutional been slower than expected due in part to concerns investor, author and corporate around data privacy and protection, and challenges with implementation. “It will take time to get governance expert, says the accounting people on board and maximize the potential industry faces an “existential crisis.” benefits,” he says. Leopold says there will need to be an industry Pivot spoke to him in March. standard for accountants on how data is gathered and used. “Institutions across the board are asking the right questions about, ‘What are the controls What do you see as the biggest challenge over the data? How do we know that it’s fit for the facing the accounting industry today? purpose?’ There is a role for the CPA profession to Accounting was invented in Florence during the take a look at [those controls].” Renaissance, and it worked pretty well until the Accounting professionals will also have to ramp last quarter of the 20th century. It worked because up their knowledge and use of technology, says we traded things, and wealth was created by things. Abhishek Sinha, a partner in the financial services Now, though, we have a world where, increasingly, advisory practice and the open banking and block- value is in the intangibles. How do you value a chain leader at EY Canada. “Professionals will be company like Uber, where the value is in the a lot more multidimensional than they have been business model? How do you value software code? in the past,” Sinha says. “That’s going to be the How do you value brands? Coca-Cola spends future: when everyone, no matter which part of hundreds of millions of dollars a year, and our the accounting or audit world they’re in, must have accounting systems say that’s an expense with a a basic level of technology awareness and skill.” positive externality, but if Pepsi bought it, then The profession, he adds, will need “to think about it would become an asset on the balance sheet. how to train [people] to be really comfortable with That’s irrational. data and, at the same time, get the insights they need to be able to audit from that data.” What’s the impact of this on capital markets? Gabrielle Loren admits she has “mixed feelings” Look at Amazon. Right now it’s worth around about open banking. While she welcomes the ease US$900 billion, and it’s trading at a 94 times price- and transparency it will bring with audits and other to-earnings ratio, while its price-to-book is 20. accounting services, her firm—which includes four Either we as institutional investors have lost our partners and 23 full-time staff—will also have to collective minds to pay 94 times earnings for a invest time and money into training staff on han- large company like Amazon, or we’re not measur- dling this sensitive data, and ensure their security ing the potential to create future value correctly. system can meet the new demands. But she believes That’s what’s happening. One study found that the investment will be worth it, and that account- intangible assets account for 84 per cent of the ing firms need to move with the times if they want S&P 500’s total value. to continue to attract and retain clients. Open banking might even give accountants more You’ve said that the proliferation of data is peace of mind that their work is accurate, she says. eroding the value that accountants provide. Even though clients are asked to sign a disclaimer What do you mean? saying the information they’ve provided to their Our regulatory system is designed as a one-way accountant is correct, “it isn’t as solid of a backup reporting regime in which audited financial state- as being able to use open banking to see it’s all ments are communicated once a year. That used to there,” Loren says. “It gives accountants the comfort be where everyone started their research from. of saying ‘I’m putting my name on this.’ ” ◆ Nowadays, you can scrape zettabytes of data from

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numerous places in real time, and artificial intel- in the U.S., the SEC, OSC and the International ligence and machine learning can help people use Accounting Standards Board, among others, to say, it to make decisions. A lot of it is lower-quality data, “We don’t know the answer right now, but we know but still, now a financial statement is a proof state- we have a problem.” They then need to get together ment of all the information that’s already gathered. and deal with it. The information that’s not accounted for by profes- sional accountants is exploding. To me, these are Do you think that will that happen? existential issues facing the Well, the only option not worth doing is doing profession. Traditional nothing. I want accounting to thrive. There are a accounting is becoming less lot of smart people in this profession—they need and less relevant, and it will to say, “In three years, we want to know the process be even less relevant when we we will take to solve the problem, and then that end this conversation than process should take no more than five years before when we started it. it starts producing results.” At the very least, the Jon Lukomnik, managing industry could ask the standard- setters to think partner of Sinclair Capital and What can be done? about what criteria should be used to establish which head of IRRC Institute There are a lot of really good intangibles should be addressed first. CPA Canada’s accountants out there who are Foresight initiative is an example of how to put doing a good job, but with an these issues on the table, but this has to be an increasingly narrow slice of information. There are industry-wide effort. It should be viewed as a market leaders in the profession who acknowledge these opportunity. If we can address this, then accounting issues, but there’s also a huge base of accountants and assurance will grow in relevance for investors who are comfortable doing what they’re doing. like me, and it will grow the industry’s revenues. The place to start is to get the profession’s leaders This is for the good of the profession. ◆ and their institutions, such as CPA Canada, AICPA —by Brian Borzykowski

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CPA-Foresight_EN.indd 31 2019-04-15 1:44 PM A deepfake video IBM’s AI platform Project Debater

The machine-learning robot Sophia

TRUST IN THE FUTURE Sure, computers will make more decisions, but people will still want someone they can look in the eye

BY BRIAN FRIEDRICH AND LAURA FRIEDRICH

here are two adages that seem contradic- to make medical diagnoses on par with or better tory, yet manage to be simultaneously true: than practitioners in areas such as skin cancer is Change is the only constant. inspiring. Similarly, IBM’s AI platform Project and Debater recently showcased its ability to effectively TPlus ça change, plus c’est la même chose. (The more debate a human opponent by framing rational things change, the more they stay the same.) arguments in support of a Both of these are highly relevant for CPAs in position, while also under- today’s world. Let’s start with the first. As the standing and rebutting digital revolution amps up uncertainty, CPA counter-arguments. This Canada’s Foresight project has been exploring the sort of progress highlights ways the future might unfold. Will society become the opportunities for tech- more fragmented, with self-interest being the nology to enrich human “Um...” priority, or more cohesive, with a collective focus decision-making. Some AI gadgets interject on social capital and the pursuit of a common But we’re also seeing threats imperfections into their purpose? Will communities resist transformative form. The emergence of speech to seem more human change and turn inward to protect against danger, “deepfakes”—synthesized or embrace innovation and attempt to harness videos showing people saying its vast power? things they never said—warns us that seeing is Society’s reactions are unpredictable, and many no longer believing. Even more disastrous is the of the technological tools that will be available in potential for the militarization of autonomous the next couple of decades are unimaginable today. AI systems. The new frontier will be a magnet for We’re already seeing a mind-boggling array of power and corruption, and society will undoubtedly

advancements. The ability of artificial intelligence face great challenges in this regard. PHOTOGRAPHS BY GETTY

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to machine learning, there are significant concerns around bias being built into algorithms that self- IT’S NOT FAR-FETCHED perpetuate inequities—for example, in hiring decisions and loan approvals. As machines become more relied upon to help make complex predic- THAT AI SYSTEMS WILL ONE tions that drive business strategies, most people will likely still want the reassurance that comes from being able to look a professional in the eye, DAY BE TRUSTED trust in our integrity and know that we’re account- able for our services. Moreover, once a computer has begun learning for itself and revising its own algorithms, we have TO SUGGEST TAX PLANS OR a black-box situation where we don’t know what’s going on inside. Only humans can be held account- able for that; regulators and the broader public will BUSINESS STRATEGIES only have faith in a system if they know that—at a minimum—a trusted professional understands Where will CPAs fit in? Will our role as trusted what goes on inside the box and is duty-bound to advisor remain intact? There are many facets to be open about it. To quote Mr. Weasley of Harry trust. We trust those we believe to be knowledge- Potter fame: “Never trust anything that can think able, and trust is reinforced through positive for itself if you can’t see where it keeps its brain.” interaction. Emerging technologies are being built CPA Canada’s ongoing work seeks to harness the with these factors in mind. Computers are vastly profession’s core strengths, including objectivity, better at data analysis and are now learning to integrity, accountability and transparency, to ensure interpret nuanced human language. Systems are our strong value proposition in the future. Conver- designed to be not only technically impressive, sations continue regarding how to help CPAs hone but to present as human, to take on gender and to the technical and enabling competencies necessary simulate emotion (like Sophia, a machine-learning to thrive. We need to embrace innovation, break robot who was given Saudi citizenship and spoke down silos and build multifaceted teams that can on the importance of family). AI agents even drive technology forward, while establishing checks replicate our imperfections to be more realistic and balances to ensure that the public interest (Google Assistant interjects “um”s and “uh-huh”s remains central to decision-making. into its speech). Given these features, it’s not far- The future has room for many approaches. What fetched that these AI systems will be trusted to the future doesn’t have room for is complacency. suggest the most favourable tax plan or business In the digital world, our clients and employers still strategy in the future. need competent, trustworthy professionals to inform Which leads into the second adage—the more and guide them. It’s up to each of us to evolve to things change, the more they stay the same. CPAs continually meet that need. ◆ will still be called upon to ensure information is reliable and relevant, and to guide decision-making with the best interests of the client, employer and, Brian Friedrich, FCPA, ultimately, the public in mind. and Laura Friedrich, FCPA, are the principals Even if our clients and employers recognize—and of friedrich & friedrich, they may not always—that there are humans which provides a range behind the computer, setting the parameters and of education and consulting services the base criteria from which systems evolve, these for professional still need verification, interpretation and controls and regulatory in order to establish accountability. With respect organizations.

What’s next for the accounting profession? With exponential shifts in technology, globalization, business models, geopolitics, and societal values and norms, the time for transformation is now—or CPAs risk falling behind. Learn more about the key findings from Phase One and how these insights will influence the second phase of the Foresight initiative. Visitcpacanada.ca/en/foresight-initiative to download the Phase One report and find out how you can join the digital conversation.

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CPA-SpinMaster_EN.indd 34 2019-04-17 2:40 PM BY STEVE KUPFERMAN PHOTOGRAPH BY DANIEL EHRENWORTH

CPA Ben Gadbois brought Canada’s biggest toy company back from the brink. Now he’s helping Spin Master take on a daunting challenge: relaunching the brand that almost did it in.

pin Master’s headquarters are everything you’d Just about the only corner of the complex that isn’t imagine a toy company’s offices to be. The seven- completely festooned with toys is the office of chief operating storey suite, in a downtown Toronto office tower, officer Benoit Gadbois, where the decor is spare and modern. is still brand new—Spin Master has only been Gadbois’s personal appearance matches his surroundings. there since June. Floor-to-ceiling illustrations When we met, his tuft of sandy hair was combed neatly atop of the company’s products adorn cerulean walls and there a clean-shaven face that would have looked severe if it weren’t are toys everywhere: perched on the dividers between cubicles, so frequently lightened by laughter. Ssealed in vitrines for public display and strewn about in a When Gadbois, a CPA, joined the company in 2012, Spin special room called the Toy Box, where staff and visitors can Master was in a bind. Five years earlier, the company had cuddle giant Paw Patrol plushes or shake hands with a waist- launched Bakugan, a line of Transformer-like toys that start high Meccanoid robot. T-shirt-clad engineers mingle with as marble-sized plastic spheres and then, when they come preppy marketing pros in a sleek corporate cafeteria where in contact with a magnetic surface, pop open into palm-sized a giant rainbow-coloured mural of the word “play” is made creatures like Dragonoid, a red dragon with a narwhal-esque up of hundreds of thousands of Bunchems, Lego-like building nose horn. The toys, which Spin Master co-developed with toys that look like psychedelic cockleburs. Japan’s Sega Toys, are addictively fidgety, with spring-loaded

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CPA-SpinMaster_EN.indd 35 2019-04-17 2:31 PM limbs and hidden latches that make each one as beguiling its net income has nearly quadrupled, to just over US$161 as a miniature Chinese puzzle. A Bakugan collectible card million in 2017. With Gadbois’s help, Spin Master has game turned the toys into game pieces. An associated anime transformed itself from a company whose fate seemed tied to TV series, which Spin Master co-produced, made the brand one-off hits into a genuine behemoth à la Mattel or Hasbro, into a household name around the world. Bakugan was one with several flagship brands that are poised to deliver rich of the biggest toy fads of 2008 and 2009. By 2010, largely returns for years to come. By adopting a longer-term view and because of the runaway success of Bakugan, Spin Master’s cultivating product lines that can be managed over time— gross product sales were approaching $1 billion—nearly strategies championed by the COO—the company has bought double the company’s 2007 take. itself some relief from the toy industry’s unpredictability. Then the fad began to subside. Aging fans complained about Now what? Considering all that Gadbois and Spin Master the simplicity of the card game, the TV show wrapped its have done to bounce back, their new move seems counterintuitive: fourth season and the plastic figures languished on store they’re relaunching Bakugan, the trendy toy that fizzled out shelves. The effect on Spin Master’s balance sheet was dramatic. and almost took the company down with it. Throughout 2019, By 2012, the company’s sales had slid back to pre-Bakugan kids around the world will be bombarded with new Bakugan levels, but its staffing and global infrastructure hadn’t been toys and a revamped TV show. With Gadbois on its team, can reduced accordingly, and there were no new products in its Spin Master stick the landing this time? development pipeline that seemed poised to match Bakugan’s success. Gadbois’s mission, from day one of his job as COO, oys are a remarkably stable industry. The conventional was to repair the damage and help Spin Master grow again. wisdom among analysts and executives is that toy Now, at age 48, Gadbois has largely achieved that goal. While spending remains resilient even in depressed economic it still trails North American toy industry giants like Mattel conditions. And the growing popularity of video or Hasbro, whose annual net revenues are frequently in excess games—Sony introduced the PlayStation in 1994, the same of US$5 billion, Spin Master is on the rise. In the past seven Tyear Spin Master was founded—hasn’t supplanted toys either. years, the company has redoubled efforts to develop original “I think parents will cut in a lot of other places before they cut intellectual property, allowing it to produce toys tied to mass- back on buying toys for their children, particularly in the key market TV shows to which it controls the licensing rights. The buying seasons,” says Joan Ramsay, an entertainment indus- crowning achievement of this strategy is Paw Patrol, an try analyst at NPD, which pegs the toy industry’s total world- enormously popular animated show about heroic puppies. Spin wide sales at about $40 billion. “Nothing is recession-proof, Master developed the concept in-house, based on a pitch from but toys are a pretty strong bet.” an independent children’s TV creator named Keith Chapman, At a micro level, meanwhile, the toy industry can be wildly then produced the series in partnership with Nickelodeon. unpredictable. Children are fickle (remember when they all As of 2017, Paw Patrol was the number one preschool toy needed fidget spinners, until suddenly they didn’t?), and it’s property in the U.S., as measured by rare for any particular product line to the market research firm NPD. stay successful for more than a few Flush with cash from its 2015 IPO, years before its pint-sized fanbase the company has embarked on an CHILDREN grows out of the trend. expansion spree, opening distribution The industry’s biggest players have hubs in countries like Poland and Russia. ARE FICKLE. evergreen properties that grow and Its new global reach allows it to compete evolve with the changing tastes of for major third-party licensing deals, a REMEMBER young consumers, like Mattel’s Barbie huge source of revenue in the toy and Hot Wheels lines. These toys don’t industry. In 2018, Spin Master managed WHEN THEY ALL require constant reinvention, only an impressive coup: the company brand management: a new career for reached an agreement with Warner NEEDED FIDGET Barbie, say, or a Hot Wheels car with Bros. to produce a number of toys based a fresh look. on DC Comics characters, licences that SPINNERS— But evergreen properties are the were previously held by Mattel. exception, not the norm. Companies Spin Master has even begun UNTIL SUDDENLY that don’t replace tired product lines swallowing parts of other companies. may find themselves flirting with In 2013, it acquired Meccano, which THEY DIDN'T? extinction. The industry’s favourite gave it a beachhead in the perennially cautionary tale is Coleco, the fabled lucrative world of construction toys. Among its more recent maker of Cabbage Patch Kids, one of the most popular toys acquisitions is Gund, the plush-toy brand, which it bought of the early 1980s. In 1988, having failed to plan adequately from the giftware distributor Enesco for a consideration for the end of the Cabbage Patch fad, Coleco filed for bankruptcy. value of US$79.1 million. When Bakugan’s popularity began to wane, Spin Master In 2017, Spin Master’s gross sales were the highest they’ve could have fallen victim to this same boom-and-bust pattern. ever been: US$1.74 billion. In the three years since the IPO, One of the reasons it didn’t was Ben Gadbois.

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CPA-SpinMaster_EN.indd 36 2019-04-17 2:31 PM PAW PATROL This original Spin BAKUGAN Master brand—including a These shape- TV show, touring live show shifters dominated and toys—is currently one the toy market in of the most successful the late 2000s, children’s entertainment nearly doubling franchises in the Spin Master’s world. revenues over a three-year span.

HATCHIMALS The “it” toy of the 2016 holiday season, which hatches into a mystery pet, resold for more than double the list price online when stores everywhere sold out.

Raised in Montreal (he still has a noticeable Québécois Gadbois was considering a move to a CEO position in private accent), Gadbois moved to the Boston area as a teenager when equity. “I was very close to signing a contract, until I got a call his father, a general manager for the paint company Sico, was from Anton Rabie, one of the founders of Spin Master,” Gadbois transferred there. “I didn’t speak any English and I figured recalled. “He was so persistent that I finally flew in.” Gadbois that would be an opportunity to learn it and check out the had breakfast with Ronnen Harary, another Spin Master United States,” Gadbois says. founder and Rabie’s co-CEO. “We just hit it off.” On the advice of his father, who believed knowing financial Gadbois joined the company as COO that August. One of his fundamentals was key to understanding business, Gadbois first tasks was leading a wave of layoffs—never a good look for decided to pursue accounting. He rose quickly through the a new boss. With that done, it was time to find a way to put the corporate world, first as a senior auditor for Arthur Andersen company back on a path to growth. It wasn’t going to be easy. (“They kindly asked me to leave,” Gadbois says. “They thought Spin Master’s leadership structure is uncommon among I was maybe a little too loud”) and then as an internal auditor corporations of its size and reach: the three original for Black and Decker. He earned his accounting designation co-founders—Rabie and Harary, the two co-CEOs, and Ben in 1995. Later, at Newell Rubbermaid, Gadbois took on a Varadi, the company’s executive vice-president and chief creative series of CFO roles before being made president of officer—are still involved in the day-to-day. Rabie had a knack Rubbermaid’s Europe, Middle East, Africa and Asia wing at for strategic leadership and working with people; Harary had just 31 years old. By 2012, he had been promoted to global his hands on the entertainment and licensing side of the business; president of Newell Rubbermaid’s writing and creative and Varadi had a nose for the creative side and new product, expression division, whose flagship brand is Sharpie, a but none of them had ever managed a billion-dollar company. permanent marker so ubiquitous in North America that it Though the founders had hired Gadbois to shake things up, easily dominates its market category. he knew that to implement changes, he would have to win over “He is probably one of the strongest strategic business not only a board of directors, but also the triumvirate who had leaders that I’ve ever worked with,” says Krista DiBerardino, nurtured the company from nothing. “They were always humble COURTESY OF SPIN MASTER who has worked under and with Gadbois at both Newell enough to know what they’re great at and where they need Rubbermaid and Spin Master, where she is the executive help,” Gadbois says. “It took a little bit at the beginning, because vice-president of marketing integration and activation. “His it was somewhat radical, what we needed to do. But I think

PHOTOGRAPHS PHOTOGRAPHS ability to see the vision and then set the operational discipline ultimately they realized that in order for us to scale the company to execute on it is a rare skill.” for the future, we needed to change some things.”

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CPA-SpinMaster_EN.indd 37 2019-04-17 2:32 PM Gadbois aligned Spin Master leadership behind a parents scrambled to put the toys under Christmas trees and restructuring plan that split company operations into a series eBay merchants resold the toys online for double their retail of units, each devoted to a particular aspect of the business price—or more. When that enthusiasm began to fade in 2017, (e.g., robotics, preschool, outdoor). Each unit had its own Spin Master was ready with an array of new Hatchimals team, responsible for its own budget. This new structure products at different price points, including Hatchimals allowed each part of Spin Master’s business some creative Colleggtibles: small, inexpensive figurines that capitalized autonomy, but also made each unit accountable for its own on a recent boom in kiddie collectibles. Now, Hatchimals results, linking freedom with consequences. Functions that isn’t a one-off product anymore; it’s a brand. were needed by all the business units, like marketing and legal, were centralized so that they could be shared across the eep inside Spin Master’s offices is something company, eliminating redundancy. employees refer to as the “Wall of Failures.” It’s a But selling toys isn’t like selling Sharpies. The toy industry’s monument to all that can go wrong in the toy relentless trend cycle means even the most efficient manufacturer business. Encased in frames and wall-mounted can still founder if it fails to bring enough innovative new display cases are a number of specimens left over from Spin products to market to make up for the losses incurred by older DMaster’s greatest product disasters. There’s Aqua Dots, an art product lines as they begin to fade. A toy company is only as toy that sparked an international panic when it was discovered good as its next hit. that some of its plastic dots, when ingested in large quantities, “When you come to Spin Master, you have to pause and could metabolize into GHB, a compound notorious for its use understand how the value gets created at this company,” as a date rape drug. (Spin Master voluntarily recalled Aqua Gadbois says. “The value gets driven with great innovation. Dots and later released an uncontaminated version of the toy If great innovation doesn’t come, nothing else will happen under a different name.) There’s Swypeout, a computer racing in the company. Everything else that we do has to really game that was supposed to stimulate a craze for a series of empower the creative process in the company.” To keep the collectible cards that could be used to unlock in-game rewards, ideas flowing, he instituted a formal product pipeline. The but instead fizzled out in scarcely more than a year. Saddest leader of each business unit is responsible for planning three of all is Legendary Yoda, an amazingly detailed, near-life-sized years ahead. In monthly meetings with Spin Master’s executive animatronic version of the Jedi master. Spin Master tried to leadership, unit heads forecast the rise and fall of product market the toy for a jaw-dropping $240 in 2015, around the lines in an effort to ensure that there’s always something new time of the theatrical release of Star Wars: The Force Awakens— to fill the hole left by a fizzling fad. a movie in which Yoda does not appear. Gadbois’s pipeline approach is evident in the case of The point of the Wall of Failures is to give employees an Hatchimals, Spin Master’s line of self-hatching robotic animal opportunity to reflect on, and learn from, the company’s past toys, which were one of the biggest fads of the 2016 holiday mistakes. But it also makes an eloquent point about the season. During the initial rush of Hatchimals euphoria, unpredictability of marketing to children. They don’t always

FURBY MY LITTLE PONY POLLY POCKET 1998: Tiger Electronics’ 1983: Hasbro begins 1989: Bluebird PLAY IT fluffy animatronics are an selling the first generation Toys, a British instant hit, fetching more of these long-haired company, than double retail plastic ponies, comb debuts the miniature AGAIN price on the secondary included. dolls and their tiny, Bakugan isn’t the market. Hasbro quickly clamshell-style play sets. 1997: A relaunch brings first toy to make a acquires Tiger. the toys back to store 2003: Now owned by comeback (or three) 2005: Hasbro releases shelves, where grown-up Mattel, Polly re-emerges “emoto-tronic” Furbies, ’80s kids buy them for with costumes that click with complex electronics their own children. in place with tiny magnets. and floppy ears. When those magnets 2003: A third-gen reboot start coming loose and 2012: Furby returns after resembles the original being swallowed by a hiatus, this time with toys from ’83. children, Mattel recalls extra-expressive LCD eyes. 2010: The line has its millions of units. 2016: The toy gets yet fourth coming when a 2018: Mattel relaunches another reboot. The new new animated series, My Polly Pocket again, model, known as Furby Little Pony: Friendship is with play sets that have Connect, speaks more Magic, becomes an themes like “cupcake” than 1,000 phrases and is internet obsession. and “flamingo.” Bluetooth compatible.

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CPA-SpinMaster_EN.indd 38 2019-04-17 2:32 PM like what they’re told to like. And sometimes the price is just “The new products in every way have exceeded my expectations,” too high. And sometimes the product is accidentally drugs. he told Pivot. “You can tell that they put effort and heart into Reintroducing an older product line, like Bakugan, mitigates it and they understood the weaknesses they had 10 years ago some of these risks. For one thing, the product is a known and worked very hard to fix those.” success: it had a strong run the first time around, before it It appears Spin Master is applying Gadbois’s lessons about foundered. That brand familiarity may help Spin Master make long-term planning to Bakugan, in the hopes of transforming inroads with buyers at large toy retailers, who sometimes see the brand into something with more longevity. The plan this a revived toy line as being less risky than an entirely new one. time around calls for a slow burn, akin to the relaunches of Even if the new Bakugan product line other action brands, like Takara is able to avoid all the obvious pitfalls, Tomy’s Beyblade, which Hasbro it still has a lot to do: it needs to recapture revived successfully in North America the magic of the original toy, to please “INNOVATION in 2010. The brand remained on shelves holdout fans from a decade ago so that despite declining sales and recently they’ll advocate for Bakugan to others DRIVES VALUE. reinvigorated itself with the launch of who aren’t familiar with the brand. At a new animated series and toy line. the same time, the new line has to appeal EVERYTHING WE “We’re going to manage [Bakugan] to young children, whose devotion and for the long-term,” Harary told analysts parental dollars will be critical to DO HAS TO during a third-quarter 2018 earnings making the relaunch a success. call. “It’s going to be year-by-year, The Bakugan toys have been revamped EMPOWER and every year is going to be new with new designs. There’s a new line of innovation . . . tied to the TV show and “ultra” Bakugan that are larger and THE CREATIVE all the rest of it.” As Bakugan’s creator, more complex than the standard variety. Spin Master holds the toy line’s master Individual figures cost less than $10, PROCESS.” licensing rights. If the brand develops making them relatively wallet-friendly. some longevity, sub-licensing revenue The Bakugan collectible card game, which was originally from third-party merchandisers promises to be a bottomless criticized for being simple to the point of dullness, has been source of additional cash. reinvented with the assistance of Gamer Entertainment, a U.S. For Gadbois, the challenge will be ensuring that Spin game design consultancy, to give it more strategic heft. And Master is able to put enough product on shelves at the right since every kid has a smartphone now, there’s also a Bakugan times, without over-committing to the line and fomenting companion app. a repeat of the Bakugan bust. The company’s increased global A new tie-in TV show, Bakugan: Battle Planet, airing now footprint will give it a tighter rein on distribution this time and made by Spin Master’s entertainment unit along with a around. “When we did Bakugan the first time around, most constellation of production partners in Canada, the U.S. and of our sales internationally were actually through third-party Asia, will be the primary vehicle for introducing children to distributors,” Gadbois said during the same earnings call. the brand and getting them emotionally invested in the “So we’re excited about our ability to control the marketing, backstory: a group of friends battle evildoers with help from to control the investments in these countries around the friendly Bakugan creatures. Seemingly in recognition of the world.” (The Japanese toy company Takara Tomy will be fact that television is no longer paramount for YouTube-addicted handling distribution in parts of Asia.) youngsters, each episode is divided into two completely separate, This time around, Spin Master also has far more sophisticated 11-minute story arcs, mimicking the short-form style of online metrics at its fingertips. The company is able to monitor inventory, video. And the premise of the show has been adjusted. The shipments and sales data in real time, giving it a constantly main character, a doe-eyed preteen named Dan Kouzo, is updated window into the id of Bakugan’s young, male target living 2019’s childhood fantasy: he’s an online influencer, with demographic. When and if the fad peaks, Gadbois will know. a video channel on a fictional website called ViewTube. It’s still too soon to say whether Bakugan’s second coming Spin Master’s early marketing strategy for the relaunch has will be a hit with kids. Spin Master has yet to report on the involved enlisting the help of actual YouTube stars. “They line’s sales, and online buzz about the brand’s resurgence has are a big part of our strategy,” says DiBerardino, the Spin yet to exceed a dull roar. The only place it’s possible to see any Master marketing EVP. “A celebrity that a kid is a fan of evidence of uptake is in the toy aisles of stores. today, it’s not just your traditional celebrity. Children are On a recent evening in the toy section of a Toronto heavily influenced by YouTubers. It’s about how they relate Walmart, a mother and her young son were lounging on to people today online. There’s a social aspect.” display patio chairs. The mother was slumped in her seat, Spin Master flew a handful of YouTube personalities to its tired. The boy was clutching a Bakugan, still in its plastic Los Angeles offices for a Bakugan junket, which most of them packaging. This was the moment that all the marketing, dutifully publicized on their channels. One of them, a 21-year- metrics and global-supply actions had been designed to old from Colorado who goes by the nom-de-Tube Negative bring about. The boy looked at his mother beseechingly. Legend, has been making Bakugan videos for about a year. She said, after a moment, “Okay, fine.” ◆

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CPA-SpinMaster_EN.indd 39 2019-04-22 10:11 AM WHAT IT TAKES TO CLEAN UP

Carol Bellringer, CPA Auditor general of British Columbia, and a past member of the B20 task force on integrity and compliance advising the G20

Geneviève Mottard, CPA Michele Wood-Tweel, CPA Vice-president of President and CEO of the regulatory affairs at CPA Quebec CPA Order, and Canada, and a member chair of CPA Canada’s public of two working groups trust committee, which with Finance Canada’s oversees ethics standards advisory committee and self-regulatory processes on money laundering for the profession and terrorist financing

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CPA-Fraud_EN.indd 40 2019-04-22 10:11 AM “CANADA HAS A REPUTAT ION for being a good place to launder dirty money, and it’s a reputation that often implicates accountants among others. It’s a reputation we need to correct.” That call to action was how Joy Thomas, president and CEO of CPA Canada, kicked off a panel discussion about white-collar crime and anti-money laundering efforts, held this past February in Toronto. The following is an edited excerpt from the panel discussion.

Joy Thomas: Perhaps we can begin by At IFAC, we’ve tried to reverse that having each panellist give some narrative so the profession is seen to opening comments. Russell, could you have a more positive and proactive start off with an international role. And we’ve been successful, at perspective on the problem. least in the draft guidance.

Russell Guthrie: To give some Michele Wood-Tweel: In the 2016 context, the OECD estimates that mutual evaluation report that set out 5 per cent of global GDP, or about the level of effectiveness of Canada’s US$2.6 trillion, is lost to fraud regime and its compliance with FATF and corruption each year. The cost standards, numerous things were is huge and it impacts public trust. identified that Canada needs to work The role of the accounting profession on, including the need for greater in detecting fraud and combatting transparency on beneficial ownership. Russell Guthrie, USCPA corruption is high on the agenda The federal government is working Executive director of external affairs of many international institutions. on these things as we speak, and CPA and CFO at the It’s important to be seen as part Canada has been a part of the International Federation of Accountants (IFAC) of the solution. consultations. I expect the The Financial Action Task Force, requirements for accountants will or FATF, is an intergovernmental grow wider and deeper. body that’s become the de facto standard-setter for anti-money Carol Bellringer: There’s a lot laundering guidelines. Over the past happening in British Columbia. There’s year or so, FATF has revisited their a report by Peter German, a former guidelines as they pertain to the RCMP deputy commissioner, on money profession. What we found in the laundering through casinos—they are FATF’s initial drafts was the portrayal particularly vulnerable to criminal of the accounting profession as infiltration, to the underground gatekeepers and enablers of fraud as economy, and circumventing interna- opposed to detectors and reporters. tional currency controls.

PHOTOGRAPHS: MOTTARD BY BÉNÉDICTE MOTTARD; BELLRINGER BY DENIS OGRINC; WOOD-TWEEL BY RILEY SMITH; GUTHRIE BY LEVI MANDEL MAY/JUNE 2019 PIVOT 41

CPA-Fraud_EN.indd 41 2019-04-18 12:23 PM Geneviève Mottard: We’ve also witnessed the response to money laundering and fraud worldwide through the Non-Compliance with Laws and Regulations pronouncement, or NOCLAR. It’s an international ethics standard and framework for accountants to follow when they see something that might be money laundering or fraud. It advises CPAs first to talk with management, to the board and to the audit committee, and to evaluate the gravity of what they’re potentially witnessing. If nothing happens, NOCLAR says it is then permissible for a professional accountant to consider reporting to the proper external authority. NOCLAR is a fantastic tool but it’s a challenge to implement. In Quebec, we have the constitutional right to professional secrecy—the right Former RCMP Deputy Commissioner Peter German belonging to clients that the information they provide to CPAs is protected. Quebec also brought in Bill 141, meant to reform the financial governance of markets in the province. for example, you’re an Ontario CPA Kingdom, which now has a publicly And it completely ignores CLAR.NO doing some work in Quebec or a CPA accessible registry of beneficial It requires CPAs to go directly to the from Quebec working in a Quebec ownership of all corporate entities. securities regulator with anything and firm’s Winnipeg office. Does Bill 141 That is huge. It applies to companies everything non-compliant that they apply to you? What about the U.S.? that might be very private. It might be see. If they do, they’ll have immunity. We exchange professionals across someone’s holding company, someone’s If they don’t report, they won’t. We are the border. incorporated dental practice. It is all very concerned about that legislation. publicly accessible data now. Thomas: Beneficial ownership has Canada is behind with respect to Guthrie: NOCLAR is, in many ways, a been a central topic in this discussion. beneficial ownership transparency. The great response from the profession. But How could it impact professional federal government is changing that, NOCLAR is just one half of the regime. accountants? starting with the Canada Business We must have the appropriate whistle- Corporation Act, requiring that there blower protections in place. It’s not Wood-Tweel: Beneficial ownership is be a recording of beneficial ownership appropriate to put professional accoun- about who really owns and controls that will need to be kept up to date, tants at risk. And in some jurisdictions corporations and trusts. A corpo- effective June 2019. Provincial finance it can be a matter of life or death. ration may have a nominee lawyer ministers have agreed they’ll introduce who is the person on record associated similar legislation for companies Thomas: What sort of impact will the with et hc orporation. That does not incorporated under provincial statutes. collision between professional secrecy mean that they are the mind and This matters because in many cases, and whistle-blowing have management of the corporation’s CPAs are the people who actually hold on the profession? assets. If you don’t have transparency, the entire picture of what a corporate it’s the perfect tool to hide money or structure—a complicated one—might Mottard: We don’t have the answer assets and to transfer them without look like, including trusts, because Quebec’s constitutional right authorities being able to see them. partnerships and corporate vehicles. to professional secrecy is not exactly Worldwide, there is an increasing Also, if you’re the comptroller or the reproduced across the country. But move to transparency. The most CFO or the corporate secretary in a our profession is very mobile. What if, dramatic example is the United private company, you now are subject PHOTOGRAPH BY CP IMAGES

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CPA-Fraud_EN.indd 42 2019-04-15 1:40 PM to requirements under this legislation. course, they’re competing with a lot Next, the government’s attention of other groups. There’s a C20 for the COMBATTING will turn beyond recording to civil society. There’s a Y20 for youth MONEY reporting. Who will have access to groups, and so it’s a very crowded LAUNDERING beneficial ownership reporting? Will space. And the recommendations are it be accessible only to competent not binding. It’s up to the political will authorities? Or will it be completely of the individual countries to make It may not have made big public, as in the U.K.? any of these policy recommendations headlines, but money laun- travel. So it’s a very indirect route to dering was a focus in this year’s federal budget. Thomas: Carol, as a board member try to get movement. But we do think Among other measures, for IFAC, you worked with the it’s important to be there. Ottawa announced over $90 B20 task force on anti-corruption. million in new funding, over I’m curious about what parts of the Thomas: In terms of money- five years, to aid enforce- ment, improve intelligence international response to white-collar laundering, is it surprising that gathering and create a new crime we can bring back to Canada. Canada is considered safe place multi-agency task force to for such practices? fight money laundering. Carol Bellringer: I sat at the table The federal government has also proposed further when the Transparency International Mottard: Canada has such a top-notch amendments to the Canada report came out that spoke to the reputation worldwide for our Business Corporations Act frameworks for beneficial ownership governance and our regulation.t B u (CBCA) to allow tax authori- ties and law enforcement the and where we ranked. In 2015, I do think it’s because we are a safe ability to see who maintains Canada was one of six countries place—we have safe banking, we beneficial ownership in with a weak framework. In 2017, we largely avoided the financial crisis— federally incorporated retained that standing—we still had a that we sometimes attract people we private companies when they have reasonable grounds to weak framework. just don’t want to attract. suspect that certain offences In 2017, when Germany was leading have been committed. the G20 arrangements, there was a Wood-Tweel: It’s counterintuitive in This proposal comes three months after the CBCA was real emphasis on beneficial ownership. a way. People who are interested in amended to require those Many countries that were making money laundering like safe societies, companies, as of June 13, progress, the U.K. in particular, were and they like strong financial systems. 2019, to record in a company pushing for it. But a number of It’s worth the effort to get money register any individual who has a “significant control” European countries wanted nothing in because they want to be in an over the corporation. to do with it. They argued that if an environment where the money that The provinces are individual is named as an owner, then they’ve earned through selling drugs, expected to have different that would expose that they were or human trafficking, or what have timelines for when they may amend legislation applicable wealthy, and put them at risk. To you, won’t be taken away from them. to provincially-incorporated which some of us said: “They didn’t What they try to do is capitalize on private corporations, which notice the Rolls Royce riding up the gaps within our system. make up the majority of Canadian private companies. hill to the mansion?” That said, we’re about to see a lot In early April, B.C. introduced When Argentina led the G20 process of potential changes coming through. legislation to establish a in 2018, beneficial ownership was not in One change, for example, could public registry of beneficial the first draft of the recommendations. concern white-label banking owners of property in the province and to amend its But Argentina welcomed input from machines—machines that are not Business Corporations Act everybody. IFAC had a strong role in operated by financial institutions but regarding new “transpar- the discussion, pushed for progress on are privately owned. They can be used ency register” requirements and changes respecting beneficial ownership and we got it back to launder money and consideration bearer shares. “Shining light in. It was one of the three recommenda- has been occurring that they may on transparency is one of tions from the B20 in 2018 to the G20. become subject to the legislation. the best things you can do when you talk about money laundering,” said Carole Guthrie: One thing to keep in mind is Bellringer: There’s still no requirement James, the province’s the complexity of the 0B or2 t he G20. for any reporting on a cash transaction. finance minister. In the end, the B20 can only make For example you can pay cash for —Bryan Borzykowski recommendations to the G20 and, of luxury goods—a car or diamonds. And

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CPA-Fraud_EN.indd 43 2019-04-22 10:11 AM OF THE 100 HIGHEST-PRICED REAL ESTATE TRANSACTIONS IN B.C., MORE THAN HALF COULDN’T BE

TRACED BACK TO Money-laundering has been blamed for driving up real THE ACTUAL OWNER estate prices in Vancovuer

a lot of real estate transactions in British of the international code. safety. In a federated model like Columbia are being made both on a Where the rubber’s going to hit the Canada’s, it’s all over the place, and it’s cash basis and without disclosure of road is having separate jurisdictions growing with each piece of legislation beneficial ownership. In 2015, Trans- with their own whistle-blowing that is introduced. parency International looked at the legislation. I can name six or seven 100 highest-priced transactions going different pieces of legislation that Thomas: There’s still much to be through the real estate market, and over have appeared in the last two years done, certainly. CPA Canada has been 50 per cent of them couldn’t be traced in Quebec, whether it’s about abuse very active when it comes to back to the actual owner who was of the elderly, or about a company combatting money-laundering. The transacting. British Columbia has put dealing with the state—in each of federal government asked us to in a speculation tax now to try to curb these instances, legislation has been participate in working groups on some of that. It’s working to a certain put in place, piecemeal, to address beneficial ownership information and degree, but it’s not the full answer. whistle-blowing. That will be a huge regulations, as well as to help educate challenge to harmonize. our members on how to properly Thomas: Given Canada’s federated maintain new corporate registers on model of governance, how can we have Wood-Tweel: It is becoming beneficial ownership information. a common anti-money laundering increasingly complex in Canada for Thank you to all the participants for the framework? CPAs to try to do the right thing if informative and lively discussion. ◆ they don’t know where to report, how Mottard: I chair the CPA profession’s to report and what protection will be public trust committee, which is now available, especially when there are Money laundering costs the looking at adopting the International so many different pieces of legislation global economy an estimated ethics code’s NOCLAR standard—it speaking to the issue of reporting. US$2.6 trillion per year, and it would provide a framework of There needs to be a go-to erodes trust in institutions and in accountants. For more on consistency for anti-money laundering framework—or, in fact, a national what the profession can do, and across the country. In Canada, each whistle-blowing policy. The policy for video commentary from our province has its own code of ethics. would apply to many other areas, rountable participants, go to And, it’s a largely harmonized code, whether it is environmental whistle- cpacanada.ca/dirtymoney but it is not a complete copy-and-paste blowing or occupational health and PHOTOGRAPH BY CP IMAGES

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BDM18393_EN-MSP_Ad_Apr_Pivot.indd 1 3/28/2019 3:40:59 PM LAST OUT

EXTRAORDINARY ITEMS by as much as 50 per cent, according to management consulting firm Kantar. DOLLAR DAZE But it’s highly competitive and Is novelty enough to lure increasingly international. Canada’s shoppers from Canadian largest homegrown dollar store, bargain giants to a stylish new Dollarama, plans to open 60 to 70 Japanese-inspired discount stores per year, to take their count store? BY MATTHEW HAGUE from 1,203 today to 1,700 by 2027. At the same time, China-based Miniso plans to expand its 50 Canadian Oomomo, a Tokyo-style dollar store locations to 500 stores in the coming named after the Japanese word for years, and U.S.-based Dollar Tree is big peach, looks anything but cheap. considering quadrupling its 220 Its most recent outpost, in Toronto’s locations to close to 1,000. Don Mills neighbourhood, is an airy, That makes Oomomo, which wants sun-lit space dotted with blond-wood to expand to 30 stores by 2022, seem display shelves. J-pop beats fill the almost timid. But it’s bucking the bustling store as clusters of students conventional approach of opening as and young families peruse each many shops as possible and using department—crafts, toiletries, snacks, that scale to keep prices low and drive housewares—hunting as much for market share. Instead, it’s carving novelties as for discounts. The wares out a specific niche. It wants to be a themselves—pastel-coloured ceramics destination discount store, appealing (tea sets, decorative bowls), Asian to consumers with its stable of snacks (like Pejoy, which are inverse Japanese items that aren’t available Pocky sticks with chocolate on the anywhere else. inside), and a wide array of crafting That could be its secret weapon. supplies (erasers shaped like sushi)— “Culturally, Canadians are very are a step up from what you’d find at accepting of diverse brands from an ordinary dollar store. around the world,” says Daniel Baer, But “dollar store” is a bit of a an FCPA and partner at EY who misnomer. Oomomo’s average price specializes in retail. “And when a per item is closer to three dollars, retailer can focus in on a specific since 90 per cent of the products are marketplace and specific imported from Japan, where demographics, with specific products, manufacturing is more expensive than it can do very well.” The go-slow in China. Some items cost as much as approach may help, too, he adds: $15. This has retail watchers wondering “It’s always good when a retailer takes whether this Vancouver-based chain, the time to make the best decisions. which launched in the summer of We’ve seen a lot of high-profile 2017 and already has five Canadian entrants and expansions over the outlets—it also has two in Edmonton past few years. But not all of them and two more in B.C.’s Lower have been successful.” Mainland—will survive in Canada’s Because Oomomo is privately owned, increasingly crowded discount market. there are no financials available. There Low-cost shopping is big business. are, however, other indicators that Between 2012 and 2017, sales at stores consumers are buying. When the such as Giant Tiger and A Buck or Toronto store opened in December Two grew at twice the national 2018, there were long lines snaking out average. Through 2022, that growth the door—not something you’d see at will continue to outpace other retailers a typical dollar store opening. ◆

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46-54_BOB_EN.indd 46 2019-04-17 2:33 PM BIG IN JAPAN Here’s what they’re lining up for at Oomomo

It’s hard to make tofu exciting for kids, but the Tofu Decostamp allows young ones to stamp cute faces into their soy protein before it’s tossed into a stir-fry. $3 for four stamps.

Sakura ceramics are painted with delicate cherry blossoms—perfect for serving Japanese green-tea cookies and other little confections. $1 to $5 each.

Oomomo’s line of beauty products includes $1 DIY face masks with aloe, rice or rose extracts, and $5 “hair mascara” wands that give locks streaks of temporary colour.

The snack options are truly special, including matcha- flavouredKit Kats for $2 and Striking Popping candy (50 cents per pack)— mouth-puckeringly sour confections that, like Pop Rocks, sizzle when they touch your tongue.

PHOTOGRAPHS BY KAYLA ROCCA MAY/JUNE 2019 PIVOT 47

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The cozy-chic tents at 'Ome Sweet 'Ome; Majumder and Fenner (opposite)

OUTWARDS on Airbnb meant they could sidestep a good deal of red tape. The original tents THE GREAT INDOORS were replaced by custom-made versions, How solar-powered tents and luxury bedding are changing the way hand-stitched in Newfoundland and in Canadians camp BY COURTNEY SHEA keeping with Majumder’s overall goal of a socially responsible, sustainable business. ’Ome Sweet ’Ome launched Looking back, Shaun Majumder can greenhouse for season one. Its opening officially in the summer of 2016, see how Plan A may have been overly provided the climactic season finale for charging $75 to $100 per night and ambitious: a grand-scale eco-hotel in the show, and an excuse to throw a pulling in $28,000 in the first season Burlington, Newfoundland, a remote party called The Gathering, now an (June to late September). By last year fishing and lumber community with a annual food, music and comedy festival. they were up to $120,000. Somewhere population of 314, six hours from St. “That’s why we first got the tents, along the line Majumder arrived at a John’s. Still, his motivation to share his because we were hosting chefs and realization: “We thought, wait a hometown (’ometown, as the musicians, and there was nowhere to second, maybe these tents aren’t just a Newfoundlanders say) was strong. It’s sleep them,” Majumder says of the white temporary solution—maybe the why the L.A.-based actor and former canvas prospect tents that were placed glamping thing is the main idea.” CBC star bought the plot of land that around the property. In the summer of And a good one at that, given the OME was once the site of his childhood 2014, when he married his long-time growing interest in luxury camping, a schoolhouse. Architects were hired, partner, Shelby Fenner, guests stayed in travel option that offers the wonders of blueprints drawn up, and a TV series the same basic lodgings, decorated with the great outdoors minus the work. OME SWEET ’ (Majumder Manor) was even launched cozy-chic touches like one-of-a-kind Taking inspiration from African safari to chronicle his journey from actor to quilts and turquoise Muskoka chairs. tents, the glamping trend first emerged luxury innkeeper. But when his team A friend suggested the tents could work in California about 10 years ago—the didn’t secure full funding for the resort as a way to demonstrate proof of concept term itself entered the popular lexicon right away, they changed direction to investors while welcoming guests and in 2012, when El Capitan Canyon

and decided to build a community getting the word out. Putting them up resort was featured on an episode of PHOTOGRAPHS COURTESY OF ’

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46-54_BOB_EN.indd 48 2019-04-18 5:26 PM the Real Housewives of Orange County. five-star flourishes like horse-and- LIFESTYLE Majumder and Fenner took a trip to carriage transport and a tasting menu the Santa Barbara destination in 2013 featuring locally foraged ingredients. KONDO BOOM and learned that the tent Gwyneth Paltrow’s Goop website called Japanese home organizer Marie accommodations (rather than the it a “once-in-a-lifetime experience.” Kondo has spurred a burgeoning cabins or main hotel) were always the “What we’re seeing with glamping industry determined to clear our most popular. “People want to have is the evolving definition of luxury,” clutter BY MATTHEW HAGUE this rugged, outdoor, under-the-stars says Canadian travel consultant experience, but they don’t want to set Claire Newell. Particularly with the up the tents, they don’t want to get wet, millennial market, luxury is about Over the last generation, our collective they don’t want to worry about safety,” exceptional experiences. “People want hoarding habits have sparked an says Majumder. At ’Ome Sweet ’Ome, the most unique, the most exclusive, explosion in self-storage units. Now, tents are solar-powered and have the most remote,” says Newell. And instead of paying hundreds a month to propane heaters. Compost toilets are a they want to feel good about the store our junk, we seem to be spending two-minute walk and Wi-Fi is choices they’re making. The trend to money to get rid of it altogether. available only at the house where sustainability has moved into the Marie Kondo might have something guests check in. Initially a hospitality market, says to do with the shift. Her books, led by practical limitation, it’s Bob McMahon, a retail the blockbuster The Life-Changing now seen as a selling and consumer business Magic of Tidying Up, have sold more point. “The whole point is analyst at BDO Canada. than 11 million copies around the that we want people to “Consumers are willing world since 2011. The so-called unplug and take a break to pay more for experi- “KonMari Method” is simple: people from their devices,” he ences that reflect their should take an inventory of everything says—fewer iPhones, core values, and for a lot they own, category by category more eye contact. of people, caring about (clothes, books, papers, “komono,” The luxury camping the future of the planet is which is almost everything else, and market is projected to part of that.” sentimental items) and purge anything reach $1 billion by 2024, A hotel is no longer part that doesn’t “spark joy.” according to the research of Majumder’s plans. On New Year’s Day, the Japanese firm Arizton. Over the last few years, Sometimes, he says, you follow an idea decluttering expert released Tidying high-end tents and variations thereof where it takes you. Down the road he Up, a Netflix series that nearly broke (tree houses, pods, yurts, igloos) have hopes to offer fishing and foraging the internet. Netflix doesn’t release popped up all over the planet—and excursions at ’Ome (current health and viewing data, but a week after the then all over Instagram. Here in the safety regulations mean guests must show premiered, the number of Great White (and green and burnt- bring their own food or visit one of Kondo’s Instagram followers spiked orange) North, our vast supply of two nearby restaurants). For now, by 84,700, bringing the total up to a nature makes us a prime location for though, the focus is on expanding the million. Meanwhile, according to upscale outdoorsiness. At the recently brand all over Newfoundland, then Chartbeat, the trailer and articles launched Blue Bayou Resort in South the East Coast, then possibly the rest about Tidying Up—a wave of think pieces, testimonials and debates about “PEOPLE WANT A RUGGED, OUTDOOR, the virtues of living with less— acquired more than 700,000 engaged UNDER-THE-STARS EXPERIENCE. BUT minutes and 770,000 page views on THEY DON’T WANT TO SET UP TENTS.” January 9 alone. In the years between those major Harbour, Nova Scotia, near the of Canada and beyond. The concept, KonMari moments, new smartphone northern tip of the Cabot Trail, guests he says, is ready-made for the franchise apps, books and social media stars have stay in heated geodesic domes equipped treatment, since the whole idea of been stoking the home organization with washroom facilities, electricity, hot ’Ome is showcasing and celebrating market, which is expected to grow water and charcoal barbecues. The the surrounding environment. In from $16 billion in 2016 in the U.S. to Clayoquot Wilderness Resort in Tofino, Burlington, that means ocean views, $19.5 billion by 2021, according to a B.C., is considerably swankier: 25 tents summer icebergs and whale watching. report by Research and Markets. surrounded by untouched rainforest “We have the best sheets, sure, but At the same time, home organizing and accessible only by plane, helicopter that’s not the point,” he says. “What’s consultants are proliferating, charging or boat. Starting at $4,500 per person great about the tents is that they can upwards of $100 per hour to recreate for a three-night stay, guests experience put you in this magical location.” ◆ the same, ultra-dramatic before-and-

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afters seen on Kondo’s show—think Kondo also offers workshops that Of POC’s 600-plus members, only hoarder’s den turned minimalist art school organizers in her method. The a handful are Kondo-certified. gallery. When Toronto’s Lindsay $2,000 three-day courses regularly fill Some prefer to organize by room as Whisen started a decluttering up within hours of being announced. opposed to category, others focus company called Ease Up five years ago, For Montreal’s Sachiko Kiyooka, the less on purging and more on she was struggling to find a job as a investment has been worth it. She is systematic storing customized to teacher and wondered if she could use a gold-certified KonMari expert, the needs of the client. her innate organizing skills to help meaning that in addition to Chu also notes that Kondo is hardly others live less messy lives. At the completing the workshop two years alone in her quest. Among the most time, she was told by people in the ago, she has also completed more notable organizers are Nashville’s industry not to expect full-time hours. than 200 consulting hours with more Clea Shearer and Joanna Teplin, Ease Up now has a staff of seven than 20 clients (her fees range from who launched their organizing people and is growing fast. Its fees are $80 to $100 per hour). company in 2015 and now have one around $80 an hour and her big selling Of course, Kondo’s method isn’t the million Instagram follows, as well as feature is that her team is quick. “We only approach to decluttering. “Marie a roster of celebrity clients including do the work two or three times faster Kondo is like the Keto diet,” says Linda Mandy Moore and Gwyneth Paltrow. than someone could or would on their Chu, director of marketing at the Their new book, The Home Edit, was own,” she says. “We don’t get bogged Professional Organizers in Canada a bestseller well before its official down in emotional attachments.” (POC), an industry group that offers a release in March, and is popular in Kondo, says Whisen, has “made it $300 program that helps members part because the message is more clear that disorganization is a problem launch their own organizing business. approachable than Kondo’s. Rather for a lot of people and that they want “Her approach is very hot right now. than purging, the magic relies on help with it. Almost every single house But there are other diets out there that better organizing your belongings in I visit, I find that book.” are equally as effective.” aesthetically pleasing, colour-coded bins, primed for social media sharing. And, of course, to meet the needs of TIGHT AND TIDY DIYers, there is also a proliferation of How folding a T-shirt like Marie Kondo can “spark joy” organizing apps. An app called Sortly creates category-by-category or 1 3 room-by-room inventories to let its users know what they have and where they have it. It’s free, though Sortly offers a premium version to business

5 clients that has more sophisticated inventory management tools. Decluttr, on the other hand, helps people get rid of what’s left behind. Like a digital pawn shop, it buys old computers, phones and other valuables then resells them for a 4 6 markup. Since it was started in 2012, it’s been used by more than six million people and bought more

2 than $300 million worth of would-be waste. For a more altruistic take, there’s an app called Buengo, which not only helps people sell things, but donates the proceeds to charity. Since 1 Lay the shirt flat. 3 Fold the right 5 Fold in half, then launching in November 2018, more Imagine it in vertical sleeve back. fold that half into than 12,000 items have been listed, thirds. “Get a feel thirds. “It’s not about for the piece. Stroke it 4 Repeat steps two making it compact. benefiting more than 80 charities. with your hands.” and three for the left It’s about love.” “The whole decluttering movement third. “Communicate has really helped us get attention,” 2 Fold the right third your gratitude for its 6 If you did it right, inward. “Communicate continuous support.” the shirt will stand up. says Buengo founder Fela Hughes. your affection through And it’s reminded us that our own

your palms.” joy isn’t always the point. ◆ MARIE KONDO BY GETTY IMAGES; ILLUSTRATIONS BY LEEANDRACIANCI

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46-54_BOB_EN.indd 50 2019-04-18 12:24 PM BOOK VALUE values at all. Instead of talking to his peers and listening intently, Stark GAME THEORY contemptuously dismisses potential Beheadings and bastard sons make for a spellbinding story—and some allies. That leaves him isolated—and pretty good lessons in business leadership, too BY BRIAN BETHUNE in Westeros, an isolated leader can measure his lifespan in days. Not that Ned Stark’s mistakes are West Point and the Royal Military grotesquely violent a setting as anyone a central topic in Win or Die. Like College aren’t the only places where has ever concocted, a place where the GRMM, Craven is most interested in they teach Sun Tzu’s 2,500-year-old price of failure is fatal. And, given the survivors, those who have a chance classic The Art of War. Instructors at popularity of HBO’s TV adaptation to learn from their mistakes—that business schools have a long history of of the novels, events in Westeros are means primarily the two characters drawing their examples from fields known to millions. Virtually anyone who dominate the story line as it

where the stakes are higher than the who opens Craven’s Win or Die: Lead- draws to a close, Jon Snow and merely financial. But Bruce Craven, ership Secrets From Game of Thrones Daenerys Targaryen. The latter director of Columbia University’s and looks at the title of Chapter One, elicits Craven’s admiration for her Advanced Management Program, has “Don’t Be Ned Stark!” will know what’s “authenticity,” her actual—and ramped up the stakes—and the fun— coming next. (For those who don’t: frequently demonstrated—desire for by illustrating his lessons with the that would be advice on how to avoid a better life for everyone in Westeros,

MEETING BY SHUTTERSHOCK cautionary tales liberally supplied by being beheaded.) not just for her own interests. Game of Thrones. The fictional world Stark’s problem, says Craven, is that Craven contrasts her with the other of Westeros created by George R.R. he thinks anyone who doesn’t rank strong female leader, Queen Cersei, Martin, known as GRRM (pronounced, values as he does, with duty and consumed by her own ambition. PHOTOGRAPHS: JON SNOW COURTESY OF HBO; SWORD BY ISTOCK; fittingly, “grim”), is as amoral and honour at the top, doesn’t share those Cersei is thus a skilled but limited

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“directional” leader, a style that flour- Part of Snow’s blindness comes TECHNOLOGY ishes only “when your followers are from his sense of urgency, but more, low on motivation and low on skill.” in Craven’s summation, comes from AI, AI, O It’s Jon Snow, though, who features in his foolish optimism that all he They can milk a barn full of the most intriguing parallel of the many needs to do is to present the facts. cows, pick a field of berries that Craven draws between Westeros It’s an approach Deloitte’s Salzberg and gather data on a herd with and real-world business history. Snow, would have sympathized with, even incredible speed and precision. Lord Commander of the Night’s Watch though it’s one he wisely avoided. Robots are the farmers of the and in charge of the enormous wall Over a decade ago, Salzberg became future. BY MARYAM SIDDIQI that guards humanity from its enemies, convinced Deloitte had to overhaul has courage and strategic insight. its employee education and make a He realizes, in fact, that the weaponized significant financial investment in On a dairy farm in Iceland, a zombies north of the wall, the White its own training facility. The need laser-guided robot attaches milking cups to a cow’s udder. In Florida and THE WHITE WALKERS ARE A California, robotic harvesters move slowly as their spidery arms carefully GAME CHANGER. “EVERY pluck strawberries from the rows of plants below. And in Saskatchewan, INDUSTRY HAS TO FACE THE an autonomous seeder drives itself up FACT THAT THEY WILL ARRIVE.” and down the fields injecting barley seeds into the ground. Walkers, are a technological game was so obvious to him that he Robots are the future of agriculture. changer. He thus displays the awareness optimistically prepared a presen- A 2018 report from IDTechEx, a all corporate leaders need. “Every tation to the board of directors for U.K.-based market research firm, industry in the 21st century,” writes approval, without first testing the declares “ultra-precision farming Craven, has to face “the fact that waters. At a cocktail party the night and autonomous farming” will blue-eyed wights will arrive.” Snow’s before the meeting, a colleague revolutionize the industry. It predicts situation puts Craven in mind of one warned him the board, whose the market for agricultural robots that once faced Barry Salzberg, CEO of members had not previously been and drones will be worth US$35 Deloitte Touche Tohmatsu, the giant exposed to Salzberg’s reasoning, billion by 2038. professional services network. would reject the proposal. Population growth is part of what’s For all his awareness of what needs Realizing his error, Salzberg and his driving robotic innovation, says to be done, Snow is woeful when it team spent the entire night adjusting Biren Agnihotri, Canadian intelligent comes to how, leading to the most the proposal into a request to board automation leader for EY Canada, nuanced and absorbing discussion in members that “they join him on a and a partner in the firm’s advisory Win or Die. He misses the distinction journey of considering the choice of practice. “By 2050 the world’s between negotiation and persuasion. Deloitte University.” In 2009, the population will increase to an estimated Snow is fine negotiating terms with groundbreaking ceremony was held; 9.6 billion people and that will translate the Wildlings, hostile fellow humans by 2013, Deloitte was the largest into 70 per cent more food than is equally threatened by the undead. accounting firm in the world by required today,” Agnihotri says. He lays out unpalatable facts, lets the revenue, a position it’s held almost According to statistics from EY, a Wildling leader face up to them and every year since. farmer in 1960 was responsible for then agrees to what he must. Snow Win or Die is full of nuggets like feeding 26 people, while today a farmer tries the same with his subordinates, this, all memorably told, thanks to feeds 155. By 2050, that number is when what he really needs to do is the fictional comparisons. In a final expected to jump to 265. That growth persuade them to buy into his irony, Craven points out that the is sparking a digital agricultural vision. It will require each of them HBO series itself was rescued at its revolution and, as a hub of artificial to change the beliefs of a lifetime very beginning by a difficult but intelligence development, Canada is and to trust hereditary enemies. smart leadership decision. The pilot well-positioned to be a leader. Astonished that his officers do not episode was widely panned by In Saskatchewan, development and wrench themselves into accord, Snow industry insiders for its confusing testing is already under way for an shuts down all discussion. story line. HBO and the show runners autonomous power platform called He starts issuing orders, essentially could have packed it in, refusing to Dot. The U-shaped self-driving vehicle abandoning efforts to make believers throw good money after bad. Or they is designed to have implements of his subordinates, and turns followers could spend the money to fix it. They attached to it—a seeder, sprayer or into opponents. opted not to die, and won big. ◆ harvester cart—so that it becomes

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PHOTOGRAPH COURTESY OF HARVEST CROO ROBOTICS seasonal labourers. seasonal particularly fewer staff, with to operate farms allow will robotics Agricultural Edmonton. in MNP consultancy at the agriculture, producers, of primary director national and Person, aCPA Stuart up says costs,” drive can labour, which good-quality for wages higher in results demand increasing with combined supply limited the and farming, farmer.” the of comfort the for built are that amenities other all and seating forneed AC, comfortable the removes “Dot it, puts spokesperson acompany as because, part in alot of tractors, It’s than cheaper even abargain. seem it would US$600,000, up to cost can combine top-of-the-line asingle Given that US$260,000. all-purpose The it to be. needs farmer the whatever of the rural workforce was 55 years or 55 years was workforce rural of the of 2016, as cent per 54 that, calculates crisis. retirement coming Robotics in amajor is issue labour “Finding might also might machine sells for sells machine address a address Agnihotri Agnihotri reaction is quite unique,” says Leah Leah unique,”says quite is reaction “The direction. new agriculture’s with grappling are field the in still andsupply gap.” demand that to fulfill mechanisms for to adopt different us inevitable it make will trends “These says. Agnihotri expertise,” economic and of insight decades them with take will “They decade. next the in industry the leaving be will older and A Harvest CROOrobot inaction In the meantime, human farmers farmers human meantime, the In turning,” says Olson-Friesen. “He Olson-Friesen. says turning,” quickly start wheels of the afarmer, perspective the But from excitement. and bit shock of it’sfield, little a atractor. without like be would farms their what to consider industry the in been who have those for difficult It’s nervous. very, get very it or they aboutTechnology. excited get “They of Dot CEO Olson-Friesen, “When we see the Dot units in the the in Dotunits the we see “When 2019-04-15 11:38AM 46-54_BOB_EN.indd 54 54 about being watched. ◆ watched. being about can’t cows complain humans, unlike And up outputto snuff. is their whether labour, they’re when in they’rewhen ill, herd would— of asmall steward the as animals much their about as know big to herds with farmers allow cameras the by gathered data The Canada. in of farms on ahandful installed farms; on dairy technology this to scale Cargill giant agriculture food-and- with partnered has Cainthus health, bovine and feeding monitor to imaging predictive and cameras day. per Using surveillance animal per points data 864,000 collecting cows, on individual recognition facial performs that technology AI-based testing is Cainthus company but Irish now the milking, mastered may have already machines are. cows their contented how atsprayers atime. monitor up to 10 can GUSS van control a in operator One pesticides. trees stone fruit and walnut almond, pistachio, citrus, spraying orchard rows of an the down up and move autonomously can and software, and by sensors guided is wheels on tank low-set aerodynamic the canopies, tree rows under the as such covered spaces, hasn’t in worked well GPS Because for orchards. especially made is sprayer self-driving The Fresno, California. in based System, Spray Unmanned Global called berries. ripe packs and that picks arm multi-tooled afinal and maturation, about brain AI to its back data feeds and fruit the inspects that another berries, the off leaves to lift arm an arms—there’s robotic multiple it has Harv, Nicknamed humans. of 30 work do the can that machine packer and picker aberry is CROO Robotics, by Harvest developed ofOne them, facing. it’s already shortages labour the to address technologies robotic in investing is Driscoll’s producer things.’ other doing be ” I could cab. ‘I the wouldn’t have in to be or s LAST OUT LAST Technology can even tell farmers farmers tell even Technology can there’sfromcompany a Then GUSS, berry the California, in Down he suddenly starts to think, to think, starts he suddenly PIVOT MAY/JUNE 2019 it’s being being it’s with with Robotic Robotic

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Untitled-2 3 2019-04-16 12:24 PM ALTER EGO

A WALK TO REMEMBER Five years ago, Alberta CPA Mathieu Bilodeau almost retired Race walking is one of the oddest sports in the Olympics: one foot from sport. Then a chance encounter with an Olympian put on the ground at all times, knees him on the path to Rio. BY MATTHEW HALLIDAY straight until they pass your hips. It looks funny. The first month or so, I walked around Calgary at night. Sometimes my wife would I moved to Calgary in 2011 to bike beside me and say, “That guy train as a skier and triathlete. we passed was laughing at you.” When I took a job at an oil com- pany called MEG Energy three years later, I felt overwhelmed— I was working a full-time job and training simultaneously— I’m kind of a star in France, and I thought it might be time where race walking is popular. to retire from sport. People love my Québécois accent, and I think they’re interested that I’m a CPA and an athlete. It’s almost impos- sible in France to combine a career and sport. One night while training, I met a woman with an Olympic ring on her finger: Janice McCaffrey, one of the best race walkers ever—and, by coincidence, the wife of my boss, Bill McCaffrey.I didn’t even know what race walking was. I asked her, “Can you show me?” It was 18 months before the Rio Combining work and Olympics qualifying races. I said, training was tough. I’d “If I’m any good, I’ll try to qualify.” wake up at 4 a.m. to walk 30 kilometres, do a full workday, then get back on the track at night. Sometimes, at lunch, I’d sleep under my desk.

My first race was U.S. nationals. Then I qualified for the World Championships in Beijing. I didn’t know what I was doing, and I was competing against the best in the world. My technique was like a robot. But I was there. And I I’m an auditor at Deloitte now. But decided, “No, I’m not retired!” this year, I took a leave of absence to move to Canmore and train for the 50-kilometre race at the 2020 Olympics in Tokyo. That may be the end of my career as a race walker. After that, I’d like to become a manager or partner with I competed in Rio, but didn’t Deloitte. But 2020 comes first. finish my race due to exhaus- tion. During the closing ceremony, my mom texted me from Quebec City: she could see me on TV! That made me realize people all over the world were watching me. PHOTOGRAPHIMAGES SAMAD/AFP/GETTY BY JEWEL

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