Veritas Fact-Finding Video Conferences

Episode 122: JUMPing over Math Challenges
Dr. John Mighton, mathematician, playwright, author and founder of Canadian charity JUMP Math

Episode 121: Housing Hot-Button Issues
Scott Aitchison, Member of Parliament for Parry Sound/Muskoka since 2019

Episode 120: The Yield Curve Inversion = A Soft Landing?
Campbell R. Harvey, Distinguished Professor of Finance at the Fuqua School of Business, Duke University in Durham, North Carolina, and  Director of Research at Research Affiliates, LLC, and a Research Associate at the National Bureau of Economic Research in Cambridge, Massachusetts

Episode 119: Corporate Failures & The Audit Profession
Dr. Robert Knechel, Frederick E. Fished Eminent Scholar Chair, Distinguished Professor and Frederick E. Fisher Eminent Scholar, and the Director of the International Accounting and Auditing Center at the Fisher School of Accounting, University of Florida

Episode 118: Practical Advice on Evaluating Corporate Governance
Maureen Jensen, Former Chair Ontario Securities Commission, Board Member, Author

Episode 117: An Appraiser's View of the Housing Market
Brian Harskamp, Managing Partner at Schinkel Appraisals, part of the Ellens & Associates group of companies

Episode 116: How Our Monetary System is Tantamount to a Capital Offence
Paul Musson, Former Group Head at Ivy Funds at Mackenzie Investments, Founder of Paddington Capital Management

October 29, 2024
Episode 122: JUMPing over Math Challenges
Dr. John Mighton, mathematician, playwright, author and founder of Canadian charity JUMP Math

Our 122^nd Fact-Finding guest was Dr. John Mighton, an award-winning mathematician, playwright, and best-selling author who is internationally recognized for his groundbreaking work building children's confidence, skills, and success in math. 
He founded the Canadian charity JUMP Math (Junior Undiscovered Math Prodigies) in 2002 with a mission to empower every child to achieve their potential through accessible math education. JUMP Math's K-8 resources currently support thousands of educators and students in North America and other countries to teach, learn, and love math (which is right up our alley here at Veritas). A recipient of the Order of Canada, you also might remember him as Matt Damon's math tutor in the 1997 movie, Good Will Hunting. 
Right away, John talked about the importance of financial literacy, another issue dear to our hearts at Veritas.
"It was clear from the financial crisis that people really didn't have any idea of how interest rates work. If you're paying 1% interest and it goes up to 2%, that might seem like a very small amount, but you're actually doubling your payment," he said. "I think people were overextended. They had no idea what they were getting into with some of these crazy mortgages. That led to a massive recession around the world. I think our society doesn't understand investment, understand risk or understand numbers and really feels helpless."
Highlights
Introduction and Background
Dr. Mighton shares his background, including his struggles with math and writing in university, and how he eventually founded JUMP Math to help children learn mathematics.
06:00 - The Importance of Financial Literacy and Math Education
John cites studies showing that math achievement in kindergarten is a stronger predictor of school success than reading. He highlights that math is the number one predictor of college graduation and is a significant barrier to careers.
08:08 JUMP Math's Unique Approach to Teaching
JUMP Math's approach involves breaking down complex concepts into smaller, manageable steps and gradually increasing difficulty. John shares a study conducted in a Toronto private school, where students using JUMP Math showed significant improvement, with the lowest mark rising from the 9th percentile to the 95th percentile after one year.
13:01 - Learning Strategies for Adults and Professionals
Effective learning strategies include incremental learning, confidence-building, and proper practice techniques. He discusses effective learning strategies for adults and emphasizes the importance of understanding how the brain works.
26:40 - Entrepreneurship and Business Advice
He offers advice for entrepreneurs and investors, including looking to the science of learning, recognizing that strengths can also be weaknesses, and focusing on high-impact, scalable solutions.

August 20, 2024
Episode 121: Housing Hot-Button Issues
Scott Aitchison, Member of Parliament for Parry Sound/Muskoka since 2019

Scott Aitchison, a Member of Parliament for Parry Sound/Muskoka since 2019, has one of the hottest files in politics. After narrowly losing a bid to lead the Conservative Party in 2022, he was appointed Housing and Diversity and Inclusion critic later that year.
In episode 121 of our Fact Finding series, Anthony and Scott discussed:
• Lack of housing supply: This issue has been brewing for decades, as policies in recent decades have discouraged purpose-built and social housing. Now, with all the different fees and approvals from all levels of government, plus high interest rates and fluctuations in the supply chain, we have the housing supply crisis we have today, Scott said. "The solution to the housing situation in this country is the classically small c, conservative solution. It is less government. It takes way too long to get approvals to build a home in this country. I have a lot of suggestions for how municipalities can improve the process for getting homes built...The average across Canada is about 33% of the cost of every single housing unit is government. Nobody makes more money on housing than governments."
• Incentives: "I don't give a lot of credit to the current government, but I won't be terribly partisan here," he said. "They've made a couple of smart moves, one of which is removing the GST from the construction of purpose-built rentals." CMHC says we need six million more homes to cover the housing shortage, which is about $3 trillion of investment. "It's right for government to incentivize private sector for that investment."
• Other solutions: Making municipal governments more accountable by tying federal grants to hitting housing development targets, freeing up surplus federal buildings and land for housing, and incentivizing modular-built homes. "We got to get a long runway of approved lots and spaces for these units to go. We need to increase the density around those urban transit nodes and do that by incentivizing the private sector to build by reducing the timelines, costs and fees, and making the tax structure right so that you're attracting trillions of dollars of investments from around the world."
• Immigration: Canada's immigration system was the envy of the world until the current government changed it. "They quadrupled the number of people that we can reasonably manage and absorb into our system. It's too much too fast. Canada absolutely needs to grow and needs a robust immigration system to keep attracting people to this country, but if you do it too fast without any planning, not just for housing, but for education, for doctors and all the services that Canadians need, then you're putting a crippling burden on all of those services, not just for those people arriving here, but the people already here. We need to rein that in... What that number is, I don't know, but I know it is dramatically less than one million per year."
They also discussed productivity, housing for First Nations communities, housing densities in city centres and more.

August 7, 2024
Episode 120: The Yield Curve Inversion = A Soft Landing?
Campbell R. Harvey, Distinguished Professor of Finance at the Fuqua School of Business, Duke University in Durham, North Carolina, and  Director of Research at Research Affiliates, LLC, and a Research Associate at the National Bureau of Economic Research in Cambridge, Massachusetts

In one of our most popular Fact Finders to date, we talked to Professor Campbell Harvey, the Canadian who discovered how an inverted yield curve correctly predicts recessions.
Since his Ph.D. thesis in 1986, the yield curve has inverted four more times, correctly predicting the ensuing recessions in each case. The inverted yield curve also predicted the four recessions preceding his Ph.D.
In our 120th Fact-Finding episode, the professor discussed his view on the inverted yield curve today and what it means for the markets if the prediction of a recession holds for the ninth time.
He also took us back to when he started to explore his thesis as an intern at Toronto-based copper miner Falconbridge (he had to take his theory elsewhere as he and his department were laid off during his internship).
Campbell R. Harvey is a Distinguished Professor of Finance at the Fuqua School of Business, Duke University in Durham, North Carolina, as well as Director of Research at Research Affiliates, LLC, and a Research Associate at the National Bureau of Economic Research in Cambridge, Massachusetts. He served as Editor of the Journal of Finance for six years and President of the American Finance Association in 2016. He is also Canadian and a native of Toronto. He also actively posts about his thoughts on the economy on LinkedIn.
He has published over 170 scholarly articles and four books on topics spanning active investing, risk management, emerging markets, behavioural finance, financial econometrics, and computer science. His recent books include Strategic Risk Management: Designing Portfolios and Managing Risk and DeFi and the Future of Finance.
In this episode, Anthony and Professor Harvey discussed:
• Why he stayed in academia: "You're right, I could make more money if I was exclusive at a company maybe on Wall Street. But I guess I operate differently in that I get a lot of personal benefit from exploring ideas. When you're a professor, you're not competing against fellow professors at Duke University. You're competing against everyone in the world. In my field, that includes not just universities, but companies, non-profits and multi-lateral organizations. Everybody is a peer and you're in the competition for the best ideas that have the maximum impact. That's what energizes me."
• Inverted yield curve indicator acceptance: "It was under the radar for so many years and ignored. But it was only after the Global Financial Crisis that people realized that this indicator is seven out of seven of the last 50 years, so we need to take it seriously." If a CEO in 2007 said they had no idea a recession was coming, they could get away with it. Today, shareholders would laugh at them. "To say that you're surprised [by a recession] when you've got an indicator that has been screaming code red for 20 months [since November 2022] and you ignore it and pull the trigger on a bet-the-firm investment, no, that just isn't going to work. That's what I call the risk-management impact of this idea."
• How the indicator has changed as a result: It used to be an economic predictor, but the inverted yield curve today is a causal mechanism because it is so well known. For instance, when the yield curve inverts, a CEO may undertake a 10% layoff in preparation for a recession. That's what firms did in 2023 to make themselves more resilient. Even if the recession doesn't happen, the CEO is able to manage the risk of being forced into a much deeper and shocking layoff in the event of a recession. The indicator may be now helping reduce economic volatility and help us dodge a deep recession.
• Soft landing prediction: All recessions are different. Some are brutal, but we've also had mild recessions. A soft landing is either a mild recession or slower growth, and we often don't know we've been through a recession until many months afterwards. Keep in mind that the inverted yield curve predicts slower growth and some of those might be recessions. There have also been various time frames between when the curve inverts and when a recession happens. The maximum lead time in the previous inversions was 23 months and we're at 20. Even if we get to the 9th example, it may look different than the other eight. Also, keep in mind that the curve has tended to un-invert before a recession takes hold. We're pretty close to uninverting, but for the 10-year minus the three-month, we'll probably have to wait until September to see if it un-inverts. "That's when the Fed is likely to cut 50 basis points, and that might be enough to cause the yield to un-invert."
• The future of the indicator: It's obvious that this indicator is going to fail at some point, especially because it is so well known now that it impacts behaviour and smooths economic booms and busts. "I actually hope that my indicator is wrong this time because nobody in their right mind would want a recession. A recession is bad not just measured in dollars but in human stress that is caused."
They also discussed employment trends, inflation, how the Fed is using stale data in its decisions and needs to undo its mistakes, and his longer-term thoughts on artificial intelligence, decentralized technologies and economic growth.

May 21, 2024
Episode 119: Corporate Failures & The Audit Profession
Dr. Robert Knechel, Frederick E. Fished Eminent Scholar Chair, Distinguished Professor and Frederick E. Fisher Eminent Scholar, and the Director of the International Accounting and Auditing Center at the Fisher School of Accounting, University of Florida

The auditing profession is at a tipping point, and Dr. Robert Knechel is a leading expert to discuss it.
Dr. Knechel is the Frederick E. Fished Eminent Scholar Chair, Distinguished Professor and Frederick E. Fisher Eminent Scholar, and the Director of the International Accounting and Auditing Center at the Fisher School of Accounting, University of Florida.
In episode 119 of our Fact Finders, Anthony and Dr. Knechel discussed:
• The auditing profession is undergoing a transition worldwide: For instance, the crisis in the scarcity of auditors is not a simple one caused by not paying employees enough. The problem is complex as it is caused by cultures, demographics, technology, firm business models, regulations and more. One result is that the Big Four accounting firms in the U.S. are hiring 50% of their people from outside traditional accounting programs, as they need people with data science, valuation and other skills. "I realize that your audience is mainly investors, but clearly, auditing is an important component of the financial reporting supply chain on which you're going to be relying, and if it falls down on the job, as we've seen too many times, then there are knock-on effects that can be extreme."
• Audit failures: Only one out of 10,000 audits is a failure. There is no such thing as a perfect audit, but the problem is that the failures become the focal point. "The problem is that when you combine things falling apart with the incentives to make them fall apart, you tend to get into an environment where the problems get very big." Dr. Knechel doesn't call them audit failures anymore, but system failures. The board, the audit committee, the internal auditors, the internal control system and management all have a job to do. "All these are moving parts within the financial reporting ecosystem. They all have a job to do. We have a traditional assumption that the auditor can compensate for a breakdown in any one of those. With technology now, I would argue that the auditor can't compensate for any one of those."
• Fraud: Financial fraud is usually caused by pressure on management. "Often, people who wouldn't necessarily think about doing these things end up doing things, and they can rationalize it because it is usually very small. Most frauds start as a very small, non-material activity to make sure we can hit our sales targets this year by holding the sales book open for two days. The problem is that it snowballs. What happens this year then gets bigger next year and into the next year, and eventually, it gets out of hand." 
• Technology: Fraud schemes haven't changed, but what has changed is the technology, which can be very complicated. One example would be Brazil's Lojas Americanas, which ran a supply chain financing fraud run by blockchain technology, which is therefore anonymous and can't be verified. "This is the brave new world of auditing. Traditional auditing trails break down. Traditional information sources can no longer be relied on." The schemes are the same, such as hiding debt, but the technology is very complicated. "Part of the problem is that the auditing profession is always playing a bit of catch-up."
• Auditors need to ask themselves the following questions before an audit: 1) Do you understand how the company makes money or plans to make money? "If you don't understand that answer, you are not ready to audit that organization. You won't know which rocks to turn over." Part of the problem with Enron was that it was really a technology company that was audited by an oil & gas auditor. 2) Is it too good to be true? Is it a fad asset with puffery? 3) Is it too complicated to understand? 4) Do you know the people involved? "The auditors actually have the ability to sit across the desk from these people and it's old fashioned to say, but look them in the eye." Zoom calls don't work for that. Auditors don't generally get trained or feel comfortable determining if people are lying, but developing professional skepticism is an important skill. Auditors sit in a very privileged position. "An auditor gets to sit in the middle and have these conversations, theoretically, in an open-ended manner, not just with the executives, but the people in the trenches."

April 25, 2024
Episode 118: Practical Advice on Evaluating Corporate Governance
Maureen Jensen, Former Chair Ontario Securities Commission, Board Member, Author

The last time we talked to Maureen Jensen for our Fact Finders, she had just retired as Chair of the Ontario Securities Commission (see episode 53). In this appearance, she tells us what she has been up to since then, including the launch of her new book with Don Hathaway, Corporate Governance DNA: A Primer for Corporate Directors. 
Anthony starts by asking her to provide context around the book's introduction: 
"While the rules and regulations outline director obligations, they do not address the infinite variety of situations facing corporations as they evolve. The foundation of a director's legal obligations rests on their duty of care, their fiduciary duty, and their obligation to ensure that the corporation is managed for its purpose."
Maureen's response: "Let's start with duty of care. That means that as a director, you need to put in the effort and the due diligence to do your job. It means you have to know the business. You have to know the corporation. You have to understand the environment that it's working in and the changes that are happening. That's your duty of care. It's not just to read the materials. It's really to get in behind and understand what the corporation is actually facing.
Fiduciary duty is really about governance of the corporation in the best interest of the shareholders and the key stakeholders. So it means doing the right thing. It means not having conflicts of interest and not doing deals to the benefit only of the corporation insiders but to the entire shareholder base.
Duty of managing the corporation: The board of directors doesn't do that; it generally hires professional management to do that role. And so, how do you actually oversee that? You make sure that they do what they say they're doing, that they have good strategies in place, that they can be measured, that they understand the risks, and that they monitor where the risks are going."
Other highlights from the discussion:
• How can shareholders evaluate governance? The first question is how many truly independent directors are on the board, including the chair. Then, shareholders can ask if the board has a diversity of backgrounds and points of view (not necessarily from a gender or ethnic background). "Can they see around the corner to the next big risk?" Also, do they have a well-articulated strategy? Can you track progress, and how do they report on ESG issues?
• Compensation metrics: "I would say that the way to go is not to have metrics solely based on share price and revenue but include other things. You have to have something about how the company is performing. Maybe there's a turnover metric if you have a large organization. But it's something that is focused on strategy, culture and the future. That's really important. And they're all hard metrics to do. I mean, that's why compensation consultants have such a big job these days."
• ESG: "Where do you focus on environment? What are the things that you can actually make a difference doing? Because you can't do 45 things and do them well. You'll not do anything. Really focus on what you can actually make a difference in."
• Dual-class shares: "In Canada, we have a special issue: dual-share companies, which are a real particular issue. We've seen this with the issue with Rogers... It's a real problem when only certain shareholders can vote."
• Regulators: It's not just the provincial securities regulators and the lack of a national securities regulator, it is all the other regulators that are also similarly governed in a fractured way. The cost of filing to so many different regulators is astronomical. "Unfortunately, it's all politics now, and that is a real problem. [Consolidating regulators] is not something that you're going to get a gold star for. But if you could do that in every industry and in every oversight regulator, just imagine how much money we would save, and how much time the professions could get back and the businesses could get back. We need to do this, but there's no political will."

March 28, 2024
Episode 117: An Appraiser's View of the Housing Market
Brian Harskamp, Managing Partner at Schinkel Appraisals, part of the Ellens & Associates group of companies

In our Fact Finders and our Annual Great Canadian Real Estate Conference, we talked to housing experts of all kinds over the years, but not an appraiser.
As the Managing Partner at Schinkel Appraisals, part of the Ellens & Associates group of companies, Brian Harskamp has a unique view of the market. Founded in 1959, Schinkel Appraisals is among the most trusted names in residential real estate appraisal in the greater Hamilton area and is relied on by lenders from across the country for a wide range of challenging assignments.
Highlights from the discussion:
• How the appraisal industry works: The Office of the Superintendent of Financial Institutions requires appraisers to be designated, licensed, or certified and meet qualification standards. They also require that they be independent from the mortgage acquisition, loan processing, and loan decision process. "It's kind of like we're the Senate of the real estate industry. We're the chamber of sober second thought." There are two certification bodies that govern the industry and appraisers are expected to have an undergrad degree, a post-graduate program and there is a work experience component. "There's a stinkload of work to become an appraiser. It's not an easy process."
• Pandemic frenzy: Appraisers assess repeatable sales. "So what we saw when everyone's hair was on fire was the stories of: 'We've lost out on 20 bids. We don't care what it takes. We're going to get this property?' And we would often look at these sorts of situations and say, 'You might not be able to recreate the perfect storm.'
• Current market conditions: Our firm operates in and around Hamilton and we deal heavily with private lenders. "First, there is an eternal, undying hope that Canadian real estate will always go up and be a big bet. One of the things that we're seeing is that there is this expectation of multiple bank prime cuts over the course of this year. We started to see some interesting action in the first two months of this year, where people were effectively trying to cheat the Bank, as it were, saying: 'We're going to get in while the interest rates are high, but that rocket fuel hasn't been lit in the real estate market so everything is going to the moon again. While interest rates are still putting pressure on people's capacity to bid up properties, we're going to jump in there.'" The result is that prices are rising, mostly for detached housing, because of the Canadian romance with the house, while condos have not been bid up as much as there are fewer investors.
• Pressure: Although prices are rising, we're seeing people in arrears and hanging on by their fingernails. "A lot of people are kicking the problem down the road. We're seeing second position and third position on a regular basis. And a lot of these are on that one-year renewal, where they're going back and trying to buy themselves more time with the hopes that the market will eventually catch up to a particular point where they might be able to get lower-cost financing." Our firm is doing six to eight times more power of sales, but it is still an inconsequential part of our business. We're also appraising more rooming houses and seeing people bundle a couple of condo mortgages with their single-family homes. "What makes me worried is those rate cuts. As per your comment a few minutes ago, I think they're even further out than everyone wants them to be."

March 13, 2024
Episode 116: How Our Monetary System is Tantamount to a Capital Offence
Paul Musson, Former Group Head at Ivy Funds at Mackenzie Investments, Founder Paddington Capital Management Inc.

Paul Musson spent most of his career in portfolio management with the Ivy Funds at Mackenzie Investments, most recently leading the team. Now semi-retired, he has established his own investment consulting firm: Paddington Capital Management Inc. 
He also started a blog on his website called Paulitical Economy and is working on a book called Capital Offence that he hopes will help people understand how our monetary system extracts capital from them and how a select few benefit tremendously from it. He also has a newsletter you can sign up for on his website.
In our Fact Finding Episode 116, Paul shared what he has learned over his career and why he thinks the monetary policy of the past two to three decades is based on fallacious economic doctrine.
Highlights:
• Career path and advice for young people getting into the profession: "Don't be in such a rush. Don't be afraid to try jobs that are not completely aligned with where you think it is you want to be longer term. It's impossible to know with certainty where you will thrive, what kind of job you will thrive in, and where you will be happy. You have to target something and move towards that. But don't be afraid to shift over every now and then as you go along and discover new jobs or meet new people. You learn by doing and you can't possibly know all the jobs out there."
• His new blog and book: "I've always loved communicating and communicating clearly, helping people to understand what's going on. When you do that, you empower people to make better decisions."
• Monetary policy: Policymakers might have good intentions, but the monetary policy of the last two to three decades has worked against most people. "I just think a lot of policy is based on fallacious economic doctrine. In particular, the wealth effect, which Ben Bernanke was a big proponent of back in the early 2000s after the 2001 recession. They all enjoyed a wealth effect resulting from the dotcom boom and the impact that was having on consumer spending and thus GDP. Then that blew up, so they decided to create another bubble, another wealth effect. But this time with housing and drive housing prices higher. People feel wealthier, they use that as collateral for more money to borrow. They spend more, and GDP rises. Well, yes, it does, but it's all based on debt. When your house is going up in value, there's no net wealth creation for society. When a house price increases, it's just a redistribution of wealth. You're forcing the next generation to pay more for the exact same economic good that you bought. A house is not a productive asset."
• His new book Capital Offence: " I don't believe that [monetary policy] was about just protecting the rich. I do believe that they actually believe that by driving interest rates to zero and driving asset prices through the roof, the benefits over time would trickle down to everybody else. They haven't, and they won't."
• Current views of the markets and the economy: "From an economic perspective, the fundamentals are not good in terms of balance sheets and taxes moving in the wrong direction."

Episode 115: A Study of Housing Booms
David Ley, Professor Emeritus of urban and social geography at the University of British Columbia

Episode 114: Consumer Insolvency Update
Scott Terrio, Manager of Consumer Insolvency at Hoyes Michalos

Episode 113: The Commercial Real Estate Paradigm Shift
Jeremiah Shamess, Senior Vice President of the Private Capital Investment Group at Colliers International

Episode 112: How To Use the New Standards from the International Sustainability Standards Board
Michael Jantzi, Member International Sustainability Standards Board

Episode 111: Where Are House Prices Headed In Vancouver?
Steve Saretsky: Real Estate Specialist at Saretsky Group

Episode 110: The Undetected Fraud Iceberg
Alexander Dyck, Professor of Finance at the University of Toronto's Rotman School of Management

Episode 109: Winners and Losers in the EV Future
Flavio Volpe, President of the Canadian Automotive Parts Manufacturers Association

Episode 108: Madoff - The Untold Story & Lessons Learned
Jim Campbell, Author of Madoff Talks: Uncovering the Untold Story Behind the Most Notorious Ponzi Scheme in History

Episode 107: Maximizing Employee Ownership
Jon Shell, Managing Director & Partner at Social Capital Partners

Episode 106: Toronto Housing Market: Ongoing Pandemic Repercussions
Nasma Ali, Broker and Founder of One Group

Episode 105: Trends in Canadian Philanthropy: Is There a Better Way?
Jon Dellandrea, Author, Scholar, Art Historian, Art Detective, Academic, and Community Volunteer

Episode 104: Discussing the Best Way to Promote Board Diversity 
Fabrice Houdart, Founder and Executive Director of the Association of LGBTQ+ Corporate Directors

Skip to 2022

December 19, 2023
Episode 115: A Study of Housing Booms
David Ley, Professor Emeritus of urban and social geography at the University of British Columbia

In Fact-Finding Series Episode 115, we talked to David Ley, Professor Emeritus of urban and social geography at the University of British Columbia and author of Housing Booms in Gateway Cities, a book about the decoupling of housing and labour markets in the gateway cities of Hong Kong, Singapore, Sydney, Vancouver and London. It emphasizes the causes of housing booms, their consequences, and public policy responses using statistical data.
Guests at our annual real estate housing conference will remember Professor Ley presented in 2016 and warned us about the risks associated with our economic reliance on real estate. 
Highlights of the discussion:
• Why do housing booms occur? Reason number one is cheap money. "We have become so used to low interest rates in the last 25 years, there's a tendency to think this is the norm. It is not the norm, it is abnormal." The second reason is lots of money, meaning government stimulus and quantitative easing. That money needed assets to invest in, including property, and this was facilitated by globalization and the ease with which money could travel internationally. "We tend to lose sight of the immense international activity in the real estate sector [individuals, corporate investors and global developers]." Accommodating policy also accentuates booms, such as the immigration policy in Canada now affecting rental housing.
• What are the consequences of housing booms? We have had a decoupling of housing and labour markets. In other words, incomes no longer qualify workers to purchase housing as house prices are driven by external factors. Booms also create inequalities, as younger people and newcomers to the market are shut out. In Hong Kong, university students are active in protests for civil change. "If you are cut out from the potential of buying your own flat, you really are a nobody in the Hong Kong context, a nobody in the sense of someone who is a university graduate, and who has legitimate expectations to be moving into owning their own flat and into middle-class status." Declining family sizes, growing homelessness and ballooning mortgage debts are other consequences. "We are a nation of debtors."
• Policy responses: "In many ways, government likes a booming housing market. It likes it because it's a sign that the economy is alive and that wealth is being created. Certainly, that was the case in BC, up to about 2017." Of the five cities I studied, every government except London has taken measures to cool the housing market, the most dramatic in Singapore where they have managed to keep housing affordable. About 80% of the housing market in Singapore is publicly owned and leased to individuals, with the remainder owned by wealthy citizens and foreigners. "What they've tried to do is have a managed price growth and they've done this through the most fastidious network of taxation policies."
• Outcomes: With the exception of Singapore, the other four cities I studied continue to have increasingly severe housing affordability problems. Policies are making it worse, such as densification in Vancouver. Property values are so high that any housing that is being built is still priced too high for local incomes. The drive for densification means that older properties, which are the most affordable ones, are being demolished for upgrades. Immigration and the role of the federal government in developing affordable housing are two other policy areas that need rethinking. 
• Outlook: "It does seem as if we're in a bit of a slowdown. I hear a lot about development permit signs which are not, in fact, going to be actualized. Builders are drawing back." Where this will become very serious is in the rental market, as demand will continue to increase due to immigration but there will be a lack of new affordable supply. "I can't see any good news in terms of the rental market in the next 12 to 18 months, partly because, while new rental units are being built, as I said earlier, they are more expensive, and they are being built at the cost of older ones, which are cheaper."

November 21, 2023
Episode 114: Consumer Insolvency Update
Scott Terrio, Manager of Consumer Insolvency at Hoyes Michalos

Scott Terrio, Manager of Consumer Insolvency at Hoyes Michalos, has been a repeat speaker at our Annual Real Estate Conference and Fact Finders. 
In episode 114, Scott provided a colourful update on the activity levels of his consumer insolvency practice, the profile of clients he's seeing, and what lenders are more exposed to insolvencies.
Anthony and Scott covered:
• Where we are today: We've had 12 months of high inflation and rising rates. "There's a lot of people out there who've never known inflation. That's starting to bite. People are living paycheck to paycheck." Banks have switched from lending to aggressively collecting. "The Canada Revenue Agency is on the warpath like I've never seen in my 14 years of involvement with them, and people don't talk about real estate in the same way as they did a year or more ago." People are resorting to credit cards to make ends meet and you can see that as the credit card debt has risen dramatically. Consumer insolvencies are up 20% to 30% YoY but we're not seeing more yet because homeowners in financial difficulty tend to have access to more resources, so it can take them two to three years before they have to file for insolvency. This next insolvency wave is going to play out over five years as mortgages renew. Our meetings with new individuals are up substantially and that will show up in the insolvency and insolvency proposal data in the coming months.
• The outlook: The keys are rates and unemployment. "If we end up with a lot of layoffs, it's very hard to fake your way out of a job loss. Even if you get a severance, when people call me with a job loss, they're screwed. It's too much to take for a household." Another area to watch is home listings. "People are just holding and waiting because they don't want to get out of the market in case there's something coming, whether it's rates dropping, whether it's a magical bailout. Twelve years of free money has made people a little soft."
• Who is more exposed? Young people are dealing with a lot, given the housing boom, housing affordability, the gig economy and education debt. "A lot of them are trying to go entrepreneurial, which makes sense and which is commendable. I just don't know if we have the kind of business or tax culture in this country set up for that." Homeowners with middle incomes coming under pressure are unique to the current slowdown. Normally, renters and lower-income earners are most affected. Also, amateur landlords are starting to suffer with their second properties and some people can't close on their pre-sale condos and homes. "People who thought mortgage fraud was just part of playing the game will find out that you can't fudge cash flow."
• What lenders are you seeing the most exposed to insolvencies and insolvency proposals in the ones you're dealing with? 

November 11, 2023
Episode 113: The Commercial Real Estate Paradigm Shift
Jeremiah Shamess, Senior Vice President of the Private Capital Investment Group at Colliers International

Perhaps no sector has felt the impact of the pandemic and higher rates more than the commercial real estate market.
Jeremiah Shamess, Senior Vice President of the Private Capital Investment Group at Colliers International, believes CRE is going through a paradigm shift.
Jeremiah has experience with a vast array of building sales, redevelopment properties, and land dispositions. Since he founded the team at Colliers, he has closed sales valued at $1.7 billion. Some of their noteworthy clients include Elia Corporation, Canadian Tire, Silver Hotel Group, Marlin Spring Development, One Properties (AIMCO) and Greybrook, among others. Jeremiah was #1 in Downtown Office in 2021 and top 20 in the country.
Highlights:
• CRE market temperature gauge: "We're roughly now 14 months into a correction. When I say correction, I define it as a 20% decrease in dollar volume from the year before." The dollar volume has been consistent in Toronto for about 10 years, but volumes were abnormally high in 2020 and 2021. The correction started in September of 2022, and we're going to be in this correction for "some time." There is still a "ton of liquidity," but asset prices are down 20%-40%, depending on the asset class.
• Office: "We've seen a lot of landlords trim up their assets, more so in B class and C class office where they have higher vacancy. They are looking to sell while there still is liquidity." The number of transactions is trending higher because smaller deals are happening. "There are still some buyers in the market who believe it will come back, but that is becoming fewer and fewer." Dollar volumes are down significantly from 2019, which was the last good year for office sales. As far as lease rates go, rates are very sticky for Triple-A or new offices, while offices just outside the downtown core are still finding a bottom. "There is a flight to quality."
• Receiverships: We have seen some offices go into receivership, as well as land developers who stretched to buy a couple of years ago and now can't afford to get to construction. "These proceedings are starting to be a lot more common, and you're starting to see a lot more of the lenders who are actually losing money." Usually, there is no recourse, except in construction loans. "The majority of the work we're seeing happen right now has been non-bank lenders. You're not seeing a ton of receivership or power of sales from the Big Five Banks or any of the credit unions yet. I suspect they will happen."
• Industrial: "We're 13% off of last year [on dollar volume]. But we're up 92% from 2017. So that gives you an understanding of what the market's doing. It is doing OK. Now, what has changed dramatically is land sales. Industrial land sales have effectively dropped off a cliff." There is almost an insatiable demand for industrial transactions, but industrial leasing space is changing rapidly, which may be a pre-indicator of a recession.
• Multi-residential: This year, dollar volumes are down about 50% and prices are down 20% to 40%, depending on the asset class. "People don't want to sell because they are used to getting prices that are anywhere from 20 to 40% higher, but there is still really good demand for it."
• Retail: There is almost an insatiable demand for neighbourhood-based, small, service-oriented retail. During the pandemic, everyone thought retail was doomed, but since then, we've realized that service-based or grocery-based retail isn't going anywhere. Street-front and big-box retail have been hit the most. Dollar volumes are down 32% this year, but you're still seeing significant demand for the right type of uses.
• Residential land: We are seeing a dramatic decrease in the amount of residential land sales. "It didn't used to matter in residential land sales because you could put up a condo almost anywhere and sell the units. Now, the affordability factor is causing change there." 
• What's next: "We may be in a corrected market for quite some time. But it doesn't mean that we don't have liquidity. It just means that we're not going back to the heyday of, say, 2019 or 2017 for residential land, or for apartment buildings in 2021. We're not going back to those highs." Long-term, Toronto remains a very strong market. "But there's going to be a big refreshing of the market, of pricing, of expectations, of type, of locations, of what buyers want, of what lenders are willing to lend. We're in a paradigm shift here, and this is changing the way that commercial real estate is going to be viewed." 

September 19, 2023
Episode 112: How To Use the New Standards from the International Sustainability Standards Board
Michael Jantzi, Member International Sustainability Standards Board

The International Sustainability Standards Board (ISSB) released its first two official sustainability standards this summer, so we asked one of the leading experts in the world on sustainability analytics and investment research, Michael Jantzi, to be a guest on our Fact Finder series. We discussed the new standards and how investors should use ESG rating services. 
Michael was appointed to the ISSB in June 2022. He has over 30 years of experience in responsible investment and sustainable finance research. He joined the ISSB from Morningstar, where he served as Managing Director of ESG Strategy. He is the founder and former CEO of Sustainalytics, an ESG research and ratings firm that grew to global market prominence under Michael’s leadership and was subsequently acquired by Morningstar in 2020. In 1992, he founded Jantzi Research and led a multiple-company merger that formed Sustainalytics in 2009.
In this episode, Anthony and Michael discussed:
• How sustainability metrics have shifted from "nice-to-have" to "need-to-have" and how the industry has gone from an "alphabet soup" of ratings to the new ISSB standards. "We started consolidating investor-focused disclosure standards that had already been in the market and had a lot of credibility with investors."
• IFRS S1: The core focus is sustainability risks and opportunities that are considered financially material to the reporting issuer. Importantly, the ISSB defines materiality the same way as the IASB - tied to financial reporting metrics - revenue, earnings and assets.
• There are two game changers: (1) The expectation that these standards will become mandatory (dependent, of course, on individual securities regulators), and (2) The expectation that companies must disclose the material sustainability risks and opportunities that will have a financial impact on current and anticipated financial performance metrics.
• IFRS S2: Climate-related Financial Disclosures are embedded into S2. Companies must disclose governance, strategy, risk management, and targets and metrics. There is also an expectation that companies will undertake climate scenario analysis. "Investors, for the first time, will have access to information that is high quality, comparable, and will be audited and assured."
• S1 & S2 are effective for reporting periods ending on or before December 31, 2025. 
• How investors should use ESG Rating services: Traditional sustainability ratings have their place, but they are much like sell-side research. Do you rely on the Buy, Hold or Sell rating, or are you more interested in the way the analyst or that team reached that conclusion? What's important in sustainability ratings is transparency in how that rating is created so that the investors can reach their own conclusions. "That's where the ISSB standards are really going to raise the game here. Because we will see disclosures now and over time as they become regulated and mandated. You will now be able to compare sustainability performance globally across larger portfolios. The information will be comparable in ways that it hasn't before. There will be fewer gaps in the information that we've seen through voluntary or no disclosure. And at the end of the day, investors will know that this data will be assured and it will be audited."
• What's next? The ISSB is in a consultation process to see what else should be included beyond climate, such as human capital and human rights.

September 13, 2023
Episode 111: Where Are House Prices Headed In Vancouver?
Steve Saretsky, Real Estate Specialist at Saretsky Group in Vancouver

Steve Saretsky, Real Estate Specialist at Saretsky Group in Vancouver, has always been one of our favourite panellists at our annual real estate conference, but he can't make it this year, so we did the next best thing, which is to have him as a guest on our Fact Finding Series. Steve and Anthony discussed:
• What has happened over the past year: The rapid rise in interest rates froze the market. "Myself, we'll typically do, on average, about 60 to 70 real estate deals a year. Last September, we did zero, which I don't think I have done since year one of my career. That was the state of the market. We were looking at 20-year lows in home sales for many, many months." Next, what happened is that we had 20-year lows for new listings for the first few months of this year as rates stabilized, which drove prices up. "It's just really, really hard to have prices correct when you literally have nothing for sale." Prices suggest the market is strong, but it's not a healthy market.
• Lack of affordability: "'What I've argued is that the Bank of Canada has actually locked people into their homes." If people want to move today, they have to pass the stress test at 8%. "I would argue that a lot of people in their current home probably won't even qualify for their existing houses, let alone trying to upsize."
• What's coming next? The story so far has been that variable-rate mortgage holders have suffered, but more and more fixed-rate mortgage holders, whether they are homeowners or investors, are having to renew at higher rates. Some people have been waiting for the past year for rates to start heading back down, but rates have gone up further. "If we look at where I think the ball is going, I do worry that you're going to have a mismatch between supply and demand, which is the opposite of what we've seen this year. We've seen more demand than listings coming to market, and I worry now that rates are back up in the sixes, and even if they come down into the mid-fives, I don't think that provides enough relief. I think we need to get it under five." There are more investors selling now than buying, which takes a lot of demand out of the market. "I am incredibly skeptical that you're going to see prices hold. I think we're seeing a softening now. I wouldn't be surprised if we gave up our year-to-date gains."
They also discussed the plight of investors who own rent-controlled units, the grim outlook for building permits and what areas of the market are doing better than others. 

August 23, 2023
Episode 110: The Undetected Fraud Iceberg
Alexander Dyck, Professor of Finance at the University of Toronto’s Rotman School of Management

In this Fact Finder, we learn how much fraud costs investors, why fraud may be more prevalent in Canada than the U.S. and why we may be entering a sweet spot for fraudsters.
Our guest was Alexander Dyck, a professor of finance at the University of Toronto’s Rotman School of Management. In January, he made headlines with his study that estimated about 40% of U.S. companies are committing accounting violations, and 10% are committing securities fraud, costing investors US$830 billion each year.
Professor Dyck and two co-authors used the 2001 collapse of the accounting firm Arthur Andersen as the basis for their study. Andersen had about 20% market share of U.S. public companies, and when it collapsed, its clients had to find new auditors. Companies that used Andersen previously were more likely to reveal fraud later, the study said.
Professor Dyck's study was covered in the New York Times, and its methodology was highly criticized. 
In this Fact Finder, Anthony and the Professor covered:
• How Professor Dyck got started in his career studying fraud and its economic consequences, such as driving up the cost of capital and lowering economic activity.
• How big is the iceberg of undetected fraud? The Professor explained the methodology of his latest fraud study, the inspiration for it, how the study defines fraud and how he calculated what fraud costs shareholders. "I think [the study] forces a rethink of how we should be resourcing and thinking about securities regulation. I think it has implications for investors, and how they take a look at companies, and I think it has implications for directors on how they should be allocating their time and their director duties."
• Why fraud is more prevalent in Canada: Canada has lowered detected fraud cases, but there is no reason to think there is actually less fraud here. Studies have shown that companies most likely to commit fraud are fast-growing firms, ones with deteriorating margins, companies that extensively use discretionary accounting and companies with a big difference between earnings and cash flow. Canada has just as many companies with those characteristics as the U.S., and in the meantime, our regulatory system is weaker.
• What should investors do? (1) Support governance reforms such as improving whistleblowing and securities class actions, (2) Enhance detection and deterrence, such as making sure auditors are attending to the task that investors are entrusting them to do and making sure gatekeeps, such as board members, are incentivized to do the right thing.
• Board members: "Make sure you understand the incentives of all the people that are speaking to you. You need to rely on outside experts. But you have to understand where they're coming from and whether they're going to actually tell you the truth or not." 
• Private equity: "It looks like private equity, for example, is a much smoother asset class with a lot less volatility than what you see in public markets. That's largely an illusion based on accounting." Why fraud in venture capital has gotten worse lately.
• Timing: "The sweet spot if you are a fraudster is just before things are starting to turn because things have been going well, things have been growing up, and the monitoring kind of declines... And the incentives to keep the story going are really strong." 

May 16, 2023
Episode 109: Winners and Losers in the EV Future
Flavio Volpe, President of the Canadian Automotive Parts Manufacturers Association

Our guest for Episode 109 of the Fact-Finding Series is a repeat guest who has his finger on the pulse of the auto manufacturing industry.
Flavio Volpe, President of the Canadian Automotive Parts Manufacturers Association, was one of our first guests when the pandemic hit and his sector had just been fully shut down. He also joined us a year ago to provide an update on the auto sector's recovery(Episode 90: Autos: Staring Into a Disruptive Future) (see also his full bio).
In his third appearance, Flavio and Anthony discussed:
• Canada's Arrow zero-emissions concept car: The working car was made from parts by 58 different Canadian suppliers. "If you choose to make your cars in Canada or source from Canada, we've got options in every single component class."
• Update on the semiconductor shortage: "I think we're going to see something like full capacity back towards the end of this year. But if you had me on last year, I probably would have said the same thing." In the meantime, companies continue to juggle chip shortages to avoid shutdowns. "If you shut down an operation for too long, you risk losing labour that is at an incredible shortage right now. It's an incredible shortage everywhere. We're probably in better shape in Canada than anywhere in North America, and this is the toughest labour market we've ever had." 
• Who is suffering the most from chip shortages? The Japanese are better off than the Americans, the Chinese obviously are better off than the Europeans and the Koreans are somewhere in the middle. 
• Labour shortages: There is a lot of stress on tier-two and tier-three suppliers. "You've got the pressure to hold on to staff even if they're idle. You've got to cover that, and there's a lot of balance sheets that are getting paper thin." The tier-two and tier-threes also have less leverage with material suppliers. It's a good time for tier-one suppliers to be aggressive with acquisitions.
• Electrification of supply chains: "These are all big rethinks on your supply chain and they're all fighting for access to the raw materials." The semiconductor requirements for electric vehicles are much higher too. 
• Government mandates for zero-emissions vehicles: In Canada, there will be a penalty of $20,000 per vehicle if car companies don't get to 20% of total sales by 2026. "What I've said privately to the Feds is, look, you can start handing out the penalties now because they're not going to get there." Consumer demand and battery manufacturing for EVs are lagging behind government targets. "I think the number of 100% by 2035 is a fairy tale wrapped in a fantasy. The number may be 35% or 40%. We certainly are at a tipping point where investment in electric power trains is where the money is going." 
• Investment opportunities in the shift to EVs: Autonomous driving and charging. "I think Linamar is going to be a really good example of aggressively winning OEM business on motor casting and in gear casting and then being the ones that coordinate the restructuring of the supply chain. Linda and Jim and Mark and that team over there have shown a visionary approach to diversifying what vehicles they make and where they spend their money."

April 18, 2023
Episode 108: Madoff - The Untold Story & Lessons Learned
Jim Campbell, Author of Madoff Talks: Uncovering the Untold Story Behind the Most Notorious Ponzi Scheme in History

Episode 108 explored one of the biggest, longest running and most fascinating scandals in the history of modern finance. Jim Campbell is the author of Madoff Talks: Uncovering the Untold Story Behind the Most Notorious Ponzi Scheme in History, which was also the basis for the hit Netflix docuseries: Madoff: The Monster of Wall Street.
Published in 2021, the book is based on hundreds of jailhouse emails and letters with Madoff before he died and other interviews with insiders such as Madoff's wife. Jim is the host of the syndicated radio show: 'Business Talk with Jim Campbell' and his crime show: 'Forensic Talk with Jim Campbell.' See his full bio.
This episode extends 1.25 hours as Jim provides a detailed presentation unpacking the intricacies of the fraud based on his first-person interviews and his own due diligence.
A few highlights from Anthony's talk with Jim:
• Why did they trust you to write the book? Why did Bernie and the family sit with you for hours when they knew they wouldn't see the book before it was published? "I think [Bernie] viewed me as a non-independent custodian of his legacy. He was going to pile on his baloney and lies to me, and I would buy this, and I would go out and clear up these things. One of the things he said to me was, 'Jim, you can clear up all these misperceptions that are out there.' It didn't quite work out the way he expected."
• Inside Madoff's unfathomable brain: He has two businesses on two different floors. "The first logical question is, so Bernie's got this great reputation, and the market-maker business was worth US$3 billion without any Ponzi scheme at its peak. So obviously, something happened, right? He lost some money, and he made the classic gambler's mistake, right? He doubled down. Hoped to get it back. Not ethical, but that is a little bit more logical. What did I find out, and the evidence show? He built both these businesses side by side over the entire time frame, the biggest criminal enterprise in Wall Street history." He was the only one who knew the whole thing, the whole picture. "He was a narcissist. He never would take responsibility.He had a lack of remorse. He would say to me, 'Jim, my lawyers tell me I have to show remorse,' and I would say, 'Bernie, that's not the best way to show remorse, because your lawyers told you to.'"
• How he did it and red flags: "There were an immense number of red flags that were around this whole scheme that should have allowed it to be uncovered regardless of how effective he was." Jim outlines the structure of how the Ponzi scheme worked and lists dozens of "incredibly obvious" ways the scam should have been detected and wasn't for 40 years. For instance, "The auditor was a one-man guy in a strip mall who wasn't qualified to do external audits and was invested with Bernie. And Bernie had his stationary and his tax stamps."
• Conclusion for investors: "The flags, the evidence, the signs are always there, and in retrospect, they look obvious. They don't in the beginning because the guys have credibility, or they're believable. People believe the SEC was on top of this stuff, that if the SEC vetted the guy five times, that's all I need. That's the housekeeping seal of approval. But no, that isn't the right thing." Investors need to do their independent due diligence.

April 11, 2023
Episode 107: Maximizing Employee Ownership
Jon Shell, Managing Director & Partner at Social Capital Partners

Our guest for Episode 107 was Jon Shell, Managing Director & Partner at Social Capital Partners, whose mission it is to encourage employee ownership at North American companies.
To understand how Jon landed in this role, it's important to understand his entrepreneurial background in scaling and then selling veterinary service providers first in Canada and then Australia (see his full bio). In the veterinary industry, the normal path to wealth was for a professional to work for a veterinarian for a number of years and then eventually buy that veterinarian out, perhaps at retirement. The buyouts were largely funded by bank debt, and the banks were comfortable with that because the price made sense (the new owners could pay it back in five to seven years). When private equity got interested in the space, the prices started rising to the point where that employee buyout path broke down. "It caused me to think more about what was happening in terms of the influence of finance on ownership," he said. "I started to look a little bit more deeply into that." When he returned to Canada from Australia in 2016, he joined Social Capital Partners.
Highlights from the discussion:
• The U.S. example: In 1956, the U.S. started a program called the Employee Stock Ownership Plan, which allows owners to sell their companies to employees through a loan to those employees. The owners are paid back from cash flow, and the structure incentivizes the owners by allowing them to pay virtually no capital gains tax, and the companies to pay no corporate tax. The U.S. program has proven to produce companies that perform better coming out of recessions, lay off fewer people, default less and grow faster. It also keeps foreign ownership at bay and distributes wealth. Based on the success in the U.S., the U.K. started a similar program.
• Why the new Canadian federal proposal falls short: After the SCP engaged all three political parties for years to start a program for Canada, The Liberals proposed the Employee Ownership Trust in the recent 2023 budget. "I think we were quite surprised," he said. "It contained largely no incentives at all." Currently, a business owner can already defer capital gains tax over five years to match their proceeds. The only incentive of the new employee ownership proposal is that it allows owners to defer taxes over 10 years instead of five. In addition, the proposal adds new constraints that we haven't seen elsewhere.
• What comes next: "It's a frustrating time, to be honest, Anthony. We are now trying to organize ourselves around a set of recommendations to try to fix this before it becomes law," Jon said. "We believe there was genuine interest on behalf of higher levels of the Liberal Government that truly like this idea, and want it to work. We think that over the course of the last couple of years, it may have gotten a bit lost in the shuffle and ended up stuck in bureaucratic hands." The good thing is there is a groundswell of support for the program, so hopefully, it can get fixed before it is implemented. 

If you're considering selling your business to employees or want to join the cause, you can reach Jon at jon@socialcapitalpartners.ca.

March 29, 2023
Episode 106: Toronto Housing Market: Ongoing Pandemic Repercussions
Nasma Ali, Broker and Founder of One Group

We checked in on the Toronto housing market with Nasma Ali, Broker and Founder of One Group, a brokerage that has traded nearly $400 million of real estate volume in six years. Anthony and Nasma discussed:
• Supply and demand: Sales are down 47% YoY in Toronto, and new listings are down 41% YoY. "There has been an uptick in demand, but there has not been an uptick in new listings."
• Variable rates: Investors tend to take variable-rate mortgages because it gives them the flexibility to liquidate at any time (fixed mortgages tend to carry hefty penalties for breaking the mortgage). Buyers also can get higher approved mortgages with a variable rate, which also gives them an edge in bidding for a property. It means that most real estate investors have variable-rate mortgages and are, therefore, suffering from higher interest rates and are just trying to hold onto their properties right now. "It's like a storm. You're in a boat, and you're trying to hold on for dear life. We have not seen an exodus and a mass selling of properties that a lot of people expected."
• Psychology: "We've had a lot of calls from investors who say, 'I know the markets are not that good. What's my property worth right now?' When I tell them what it's worth, they don't want to sell because, in their mind, they could have gotten last February's price."
• Rentals: The rental market was hot last summer, but has slowed in recent months. "Times are tough. A lot of people are choosing not to move. They're choosing not to upgrade."
• Condos: "Pre-construction is in shambles. It is terrible right now." High occupancy fees are really hurting investors. Historically, Toronto real estate investors have counted on appreciation rather than cash flow to produce returns. If an investor bought a few years ago and expected to break even or lose a little money, now they're really in a hole with higher interest rates, carrying costs etc.
• Outlook: "We probably will start to see more listings eventually because a lot of investors, they say, 'I'll tough it out.' But you can only tough it out for so long."

March 28, 2023
Episode 105: Trends in Canadian Philanthropy: Is There a Better Way?
Author, Scholar, Art Historian, Art Detective, Academic, and Community Volunteer

In episode 105 of our Fact Finding Series, we talked about the state of Canadian charitable giving with Jon Dellandrea. He is a senior fellow at Massey College, chair emeritus of the Art Canada Institute, and a Member of the Order of Canada. He was the CEO of the Sunnybrook Health Sciences Centre Foundation in Toronto from 2012 to 2021 and formerly held the positions of pro-vice-chancellor (development and external affairs) at the University of Oxford, vice president of advancement at the University of Toronto, and chancellor of Nipissing University from 2006 to 2012. Anthony and Jon discussed:
• Why should an individual or organization take part in philanthropy? "I think there's a moral responsibility for people who do well in this country and elsewhere to think about how they give back to that quality of social infrastructure that we sometimes take for granted."
• What specific piece of advice would you have for financial advisors and portfolio managers: "Pick your spot and make a difference.... What are you doing to make a difference?"
• Educating the next generation: "I know a number of people who have had a pretty decent liquidity event and have taken a chunk of that money, put it into a donor-advised fund and given their children responsibility for some percentage of the annual disbursements within those family foundations."
• Trends: Findings from a recent report by the Veritas Foundation about the state of Canadian charitable giving, including how fewer people are making larger contributions, immigration and recognizing women donors. 

March 22, 2023
Episode 104: Discussing the Best Way to Promote Board Diversity 
Fabrice Houdart, Founder and Executive Director of the Association of LGBTQ+ Corporate Directors

Episode 104 with Fabrice Houdart was one of our most meaningful and timely discussions.  Anthony and Fabrice discussed diversity, equity and inclusion as it relates to board membership and provided thoughtful solutions. Fabrice is the Founder and Executive Director of the Association of LGBTQ+ Corporate Directors, helping bring LGBTQ+ diversity to boards of directors. Fabrice teaches at Georgetown University. He is a L'Oreal Global Diversity and Inclusion Advisory Board member and an advisor of the National Association of Corporate Directors Center for Inclusive Governance.
Highlights: 
• How the Association of LGBTQ+ Corporate Directors works: Rather than mandate it, the best way to promote board diversity is to push exceptional talent. We help boards fill positions with strong candidates who also happen to be LGBTQ+. "I'm not in the business of advocacy. I'm not in the business of forcing people onto a board. I'm in the business of giving visibility to exceptional individuals in the LGBTQ+ community."
• Silicon Valley Bank: There have been accusations from right-wing politicians that one of the reasons Silicon Valley Bank failed was because it was too focused on wokeness. Why is that misplaced? "The problem is that everything happens within a political context, so very often the politics will try to make sense of the facts in order to push a specific agenda... I think people can do two things at the same time. They can pay attention to ensuring there is fairness and some level of diversity in the company while paying attention to risk."
• Quotas or transparency: "It's extremely difficult for boards to self-diversify, and the reason is linked to the very specific way in which board members are recruited. Usually, to get a board seat, you have to know another board member, and board members tend to know other people who are in that 'in-group.' Very often, women were outside of this group." That's why the regulator in France stepped in more than ten years ago and forced quotas. Quotas are considered unconstitutional in the U.S., so the best way to diversify in the U.S. is through transparency, although the Nasdaq's diversity disclosure rules are being challenged too.

Episode 103: The Plan To Deal With Ontario's Housing Shortage
Andrew Grunda, Principal at Watson & Associates Economists Ltd.

Episode 102: A Talk with the Incoming Chair of the Canadian Accounting Standards Board
Armand Capisciolto, Incoming chair of the Canadian Accounting Standards Board and current National Accounting Standards Partner at BDO Canada LLP

Episode 101: The Puzzle of the Markets
David LePoidevin, Senior Investment Advisor, and Senior Portfolio Manager, at Canaccord Genuity Wealth Management

Episode 100: When things aren't going right, what do you do?
Joe Mauko, Ultramarathoner, cyber security sales specialist and board member of our affiliated Veritas Foundation

Episode 99: The Future of Work and The Office
Dr. Linda Duxbury, Chancellor's Professor, Management at Sprott School of Business, Carleton University

Episode 98: The Energy Re-Mix: Can Canada Get it Right?
Kirk Morrison, Professional Engineer, Energy & Resource Sector

Episode 97: The Nefarious Underbelly of Canada's Real Estate Market
Sam Cooper, Investigative Journalist

Episode 96: How Investors Can Manage The Next Age of Uncertainty
Stephen Poloz, Former Governor of the Bank of Canada

Episode 95: Mortgages Market Sticker Shock
Albert Collu, President and CEO of Marathon Mortgage Corp.

Episode 94: Perfect Personal Portfolios (free to view)
Steve Foerster, Professor of Finance at the Ivey Business School at Western University

Episode 93: A Cautious Investor Who is Licking His Chops
John Ruffolo, founder and managing partner of Maverix Private Equity

Episode 92: How To Build a Business People Will Fall in Love With
Brian Scudamore, Entrepreneur, Founder 1-800-GOT-JUNK? and Author

Episode 91: Why Bitcoin Isn't Digital Gold
Bob Seeman, Managing Partner CyberCurb, Senior Advisor Endeavor, Author, Attorney, Electrical Engineer & Entrepreneur

Episode 90: Autos: Staring Into a Disruptive Future
Flavio Volpe, President of the Automotive Parts Manufacturers Association

Episode 89: Risk Management: Contrasting Modern Portfolio Theory and Value Investing
Dr. George Athanassakos, Professor of Finance and the Ben Graham Chair in Value Investing at Ivey Business School

Episode 88: Putin's Impact on Investors and Governance
Alissa Kole, Managing Director of Govern 

Episode 87: What it Takes to be a Successful Entrepreneur
Al Guarino, Entrepreneur and Board Member

Episode 86: Building the BCA Franchise
Bashar Al-Rehany, former CEO of BCA Research Inc. and Executive Director of EuroMoney

Episode 85: Fostering Positive Indigenous Relations
Rebekah Wilson, Reconciliation Coordinator at the Nuclear Waste Management Organization 

Episode 84: Building Canada’s Leading Family Office 
Tom McCullough, Co-Founder, Chairman, and CEO of Northwood Family Office

Episode 83: Tapping into the Instincts to be Healthier and Outperform
Dr. Stacy Irvine, Founder and Co-Owner of Totum Life Science

Episode 82: How Investors Need To Think About Risk
Ron Dembo, Risk Management Entrepreneur and Consultant

Skip to 2021

December 13, 2022
Episode 103: The Plan To Deal With Ontario's Housing Shortage
Andrew Grunda, Principal at Watson & Associates Economists Ltd.

Andrew Grunda is a Principal at Watson & Associates Economists Ltd., which is an economist firm that advises municipal governments and school boards. He is involved in studies related to local government finance, financial operations and policy, and long-term infrastructure planning. We brought him in as a guest to help us understand how Ontario's new Bill 23 - More Homes Built Faster Act will work and how it will affect housing supply and affordability.
Anthony and Andrew discussed the following:
• Background on Bill 23: How it aims to address the issues of supply/demand caused by the influx of immigration, Ontario's aging population, house price increases outpacing wage increases, construction labour shortages, development cost increases and higher interest rates. Ontario needs about 1.5 million more new homes in the next ten years, with about one-third of them required now.
• Constraints to building that many homes: Municipalities in Ontario have recently increased how many new home permits they issue annually to about 100,000, but it would still have to increase permits by about 50% more to meet the target. There is already a shortage of experienced professionals who can process those permits. There also is a challenge to designate the land and then build the infrastructure to accommodate more housing.
• Financial implications: New homes have about $100,00 to $120,000 of development costs associated with them to pay for municipal planning, infrastructure and other capital costs, or $80,000 to $100,000 per condo unit. Bill 23 tries to incentivize affordable housing, but it does it by shifting development costs from developers and new home buyers to municipalities. Given that municipalities have limited funding mechanisms, that means shifting the costs to existing homeowners. "When does that present potentially a housing affordability challenge for existing homeowners as opposed to new homeowners."
• Tax increases: Municipalities are already under pressure to fund areas like transportation (with falling post-pandemic ridership) and aging infrastructure. Forcing them now to fund increased levels of affordable housing without development fees means that property taxes and fees will need to rise significantly, or citizens will have to accept lower levels of service or more financial support from the federal and provincial governments.

December 6, 2022
Episode 102: A Talk with Incoming Chair of the Canadian Accounting Standards Board
Armand Capisciolto, Incoming chair of the Canadian Accounting Standards Board and current National Accounting Standards Partner at BDO Canada LLP

• How the Canadian Accounting Standards Board works with the International Accounting Standards Board: "We do have a significant amount of influence before the IASB finalizes their standards."
• Goals as the new chair: To make accounting standards more relevant. For instance, why aren't smaller companies using GAAP? Why do large public companies use non-GAAP metrics? "Is that because they want to tell a different story that maybe we don't agree with, or is the standard not providing investors relevant information? We need to answer these types of questions."
• Non-GAPP metrics: Details of the project that is looking at financial statements, primarily the income statement and, specifically, operating income and management performance measures. Companies will need to reconcile these non-GAAP calculations to the nearest GAAP number, explain why non-GAAP metrics are relevant and they'll be audited.
• Key issues for investors: New accounting issues, such as sustainability and new asset classes (such as crypto).

November 16, 2022
Episode 101: The Puzzle of the Markets
David LePoidevin, Senior Investment Advisor, and Senior Portfolio Manager, at Canaccord Genuity Wealth Management

With 35 years of experience in the industry, David LePoidevin is a top-ranked investment advisor, managing a portfolio of more than $2 billion in assets. As a Senior Investment Advisor, and Senior Portfolio Manager, at Canaccord Genuity Wealth Management, Vancouver, he was ranked #1 in this year's Globe Advisor Canada's Top Wealth Advisors 2022. Highlights:
•  Advisor platforms and advice for advisors: "My advice to young people would be to make sure that it's your business, and make sure that you are acquiring the clients." He also covered topics such as how to talk clients out of panic selling, tips on gathering new clients and why he thinks the future is bright for independent research and advice versus robo-investing.
•  Market cycles: We are coming out of a forty-year bull market for bonds. "We went to zero bonds two years ago." He discussed inflation, money supply, gold, deficits, consequences of pandemic government stimuli, and why he is negative on bonds and companies that aren't cash flow positive.
•  Opportunities in the markets now: "I think we've had three fixed income opportunities in my career of thirty-five years, and I'd say, this is the fourth." Details about preferred share opportunities he sees now.

October 20, 2022
Episode 100: When things aren't going right, what do you do?
Joe Mauko, Ultramarathoner, cyber security sales specialist and board member of our affiliated Veritas Foundation

Joe discussed his personal transformation, from being broken spiritually and financially, followed by a cancer diagnosis, to running ultramarathons across the Atacama Desert (250km self-supported) to advancing his career in cybersecurity sales and raising a family. When things aren't going right, what do you do? Highlights:
•  Stop trying to hit a home run and just get on base: "You've got to take a base hit when you can, and you've got to celebrate success at each milestone. Each success is a success, any way you slice it."
•  Start writing your own headlines: "Think about how you would like the world to view you."
•  Why do I run? "I run because the more I run, the more I sell. When I'm at my fittest, at my optimal health, I perform my best."
•  Preparation: "You gotta prepare for the worst-case scenario." That way when things are going right, you're prepared.
•  Defining yourself in and out of the office: "I don't have a degree in computer science. I have no formal education in this field. I redefined myself as this consummate athlete as a metaphor, as the guy who is always in training."
•  Age 40 in 2011 after a cancer diagnosis and other tragedies at home: "I started gaining weight. I started drinking. I was medicating with food and alcohol. I got up to two hundred and fifty pounds... I cried in desperation. I prayed to God in front of the mirror, and I was looking for answers, and I was like, 'What do I do?' And my wife said, and I remember having this breakdown in front of the mirror, she said, 'Well, why don't you start running?' [I said] I hate running. It's stupid. Who likes to run?'
•  Systemize and Prioritize Health, Mind, Heart and Soul: "I started working on these areas in my life, not just running, but working on my mind-set, my heart-set, and my soul-set as well as my health-set. I saw exponential creativity and maximum output. I started outperforming my peers."

September 28, 2022
Episode 99: The Future of Work and The Office
Dr. Linda Duxbury, Chancellor's Professor, Management at Sprott School of Business, Carleton University

Dr. Linda Duxbury studies balancing work and family in the public, private, and not-for-profit sectors; generational differences in work values; the impact of office technology on employee well-being, work role overload and workforce change. She has also been studying the impact of COVID-19 on employee well-being since March 2020. 
She wrote Something's Got to Give: Balancing Work, Childcare and Eldercare with Christopher Higgins and published a study with several other academics in 2021: Work, Family, Life during the Pandemic (see her full bio).
Anthony and Dr. Duxbury discussed:
•  Quiet quitting (a term she loathes): "Since when is it a horrible thing to have employees who just want to come in and do their job? But that's not enough anymore." Many companies have increased profits in recent years by getting people to do extra jobs.  The pandemic was a watershed event. People were grumpy, cranky, stressed out, and overworked going into the pandemic. A lot of people are not prepared to dedicate their lives to their employers when they don't feel supported.
•  Productivity: "People say they've been more productive at home, but that just comes from working more hours, not productivity gains." Regardless of where people work, 60% of 30,000 people report high job stress and 33% report high levels of burnout. The reality is that employers have too many priorities or don't have enough employees. "Workloads have to be addressed."
•  Solutions at a time of rising salaries and labour shortages: Don't assume that your most productive and critical employees will stay. "What we have to do is stop treating our employees like a cost and recognize that they're your only true assets." Innovation, creativity and customer service are all critical to business success and are all employee driven.

September 13, 2022
Episode 98: The Energy Re-Mix: Can Canada Get it Right?
Kirk Morrison, Professional Engineer, Energy & Resource Sector

Carbon neutrality by 2050 is such a big, talked-about goal that we wanted to speak to an on-the-ground expert in the field who can help us understand if we can get there and what it means for investors. 
Kirk Morrison is a professional engineer with 40 years of experience in the energy and resources, environmental and infrastructure industries. He is currently completing a business case for the energy re-mix in Canada for the Canadian Energy & Climate Nexus, as well as developing (and investing in) a green hydrogen project in SE Alberta (Project Portal, Cariboo LCF), and a 15,000 MWh pump storage project in Northern Ontario (Steep Rock Energy, SC Investments). He just completed a trip across Canada looking at how Canadians are working towards cleaner energy (you can read his posts about it on LinkedIn). See his full bio.
Anthony and Kirk covered:
•  Targets: Kirk has calculated that Canada needs to spend $3.4 trillion to be carbon neutral by 2050. "I think we can get to net zero, but I think 2050 is pretty optimistic. Energy costs will need to increase." 
•  Under-planning: Canada is the seventh largest consumer of renewable energy in the world, but only about one-third of the work required to get to net zero is being done now. "For example, to bring on all the clean generation we've got to bring on three gigawatts a year. We're doing about one gigawatt right now. We need to bring on 15,000 EV charging stations per year. We're doing about 1,000."
•  Investment returns: It takes a lot of time to build infrastructure and regulatory approvals are slow. Some commodity prices don't make sense yet from a return on investment perspective. "There's lots of capital out there. There's lots of equity. There's lots of debt, but the initial development capital is tough to get." The government has a role to provide seed capital.

August 16, 2022
Episode 97: The Nefarious Underbelly of Canada's Real Estate Market
Sam Cooper, Investigative Journalist

Sam Cooper is an award-winning investigative journalist and author of Wilful Blindness: How a Criminal network of narcos, tycoons and Chinese Communist Party agents infiltrated the West. He has presented his findings on corruption, money laundering and transnational crime to law enforcement agencies, legal and financial professionals, and academics, internationally. See his full bio.
In this 45-minute video conference, Anthony and Mr. Cooper discussed:
•  Origins: How a deal was made back in 1982 where the Chinese Communist Party would get business assistance from the Hong Kong tycoon elites to invest internationally and these high-level businessmen with underground financial connections would get assistance and protection from the Chinese Communist Party. "I found this was very influential to investment trends in Canada in banking, real estate and of course, casinos."
•  The Vancouver model and how money gets out of China: How drug money in Canada has been laundered through loans to Chinese "whale" gamblers visiting Vancouver government-run casinos. The gambling loans are then paid back later to triad organized crime in China. "The flow of funds through this underground banking system is off the charts." 
•  How this money laundering flows into real estate: "I was reliably informed that in Vancouver real estate, for every dollar that's spent, 30 cents of that dollar or 30% of Vancouver's real estate market can be ultimately tied to funds from mainland China."
•  Canadian regulator complacency: "I'm talking about a volume of cases and evidence, powerful and sensitive cases that Fintrac has knowledge of, that never make it anywhere near a real police investigation, let alone a judicial prosecution." How Canada's Charter of Rights has become a powerful defence tool.
•  How Canadian Banks receive money transfers from Hong Kong currency exchanges: "It would be prudent for Canadian investors to be curious and skeptical about the integrity of our financial institutions, because I believe there are more bombshells to come out."

June 28, 2022
Episode 96: How Investors Can Manage The Next Age of Uncertainty
Stephen Poloz, Former Governor of the Bank of Canada 

Few have a better view of the Canadian economy than a former Governor of the Bank of Canada. Stephen Poloz was the 9th Governor and before that, he spent 14 years at Export Development Canada as Chief Economist, Head of Lending and finally as President and CEO. He also spent four years at BCA Research, as Managing Editor of the International Bank Credit Analyst. Mr. Poloz is now a Special Advisor at Osler Hoskin & Harcourt and recently wrote the book The Next Age of Uncertainty: How the World Can Adapt to a Riskier Future. See his full bio.
In the 96th episode of our Fact-Finding Series, Anthony and Mr. Poloz discussed:
•  What surprised him most about his time as Governor.
•  New uncertainties causing rising volatility: Demographics, wealth inequalities, job disruption, high debt, global warming and polarization of politics.
•  Canadian demographics and economic growth: "Even if we have a good immigration level, that only can give us 1% economic growth. That's not very much so we've got to work harder to get higher productivity and generate higher growth here in Canada. It means interest rates will stay low too. We're going to have a bump in interest rates, of course. That's a cyclical thing. But once that's over, the trend will be for low, real interest rates."
•  The outlook for investors: "Stagflation is probably the best that we can hope for now. Stagflation without a recession. So investors need to think about what stagflation does to the markets and which stocks are going to do okay in that setting."
•  Inflation and oil, transitory inflation, house prices and more.

June 24, 2022
Episode 95: Mortgages Market Sticker Shock
Albert Collu, President and CEO of Marathon Mortgage Corp.

Albert Collu is the President and CEO of Marathon Mortgage Corp. and a return guest to our Fact-Finder Series. He has served on the Advisory Group for RECO (Real Estate Council of Ontario), as Chair of Independent Mortgage Brokers Association and as a Director for Mortgage Professionals Canada. See his full bio.
In episode 95 of our Fact-Finding video conference series, Albert and Anthony discussed:
•  How the market has changed in the last two to three months: "I'm going to use the word miserable, particularly with the important segment, first-time homebuyers."
•  The sticker shock of mortgage renewals today: "We are seeing situations where people are renewing at triple what they were at five years ago." 
•  What is making him nervous: "The rate of change." Perhaps the Bank of Canada could have started moving rates up gradually in 2021 when they saw home prices hit records.
•  Where are the dangers in the private lending market?
•  His outlook for house prices.

For Albert's other appearances, see April 21, 2021 Episode 60: The White-Hot Cdn. Residential Mortgage Market and April 15, 2020
Episode 2: On the ground in Canada's mortgage industry

June 17, 2022
Episode 94: Perfect Personal Portfolios
Steve Foerster, Professor of Finance at the Ivey Business School at Western University

Steve Foerster is a Professor of Finance at the Ivey Business School at Western University. He received a Ph.D. from the Wharton School, University of Pennsylvania and has obtained the Chartered Financial Analyst designation. He has published over 50 articles in journals, such as the Journal of Financial Economics, the Journal of Finance and Financial Analysts Journal. Professor Foerster’s most recent book is In Pursuit of the Perfect Portfolio: The Stories, Voices, and Key Insights of the Pioneers Who Shaped the Way We Invest (with Andrew Lo, MIT Sloan School). He has also written two textbooks and over 100 case studies and technical notes in the areas of investments and financial management. See his full bio.
In episode 94, Professor Foerster and Anthony discussed:
•  Three P’s of investments: Principles, Process, and Path (you can also follow along on the book's website);
•  The seven Principles for investors to follow and develop the Perfect Portfolio;
•  The Struggles of the 60/40 portfolio: "Sometimes, just when we want the benefits of diversification, they're not always there because we have assets becoming correlated. But I think that's where staying the course really, really helps."
•  Is there one perfect portfolio? "There is a portfolio that is perfect for each of us at a particular point in time. It's not going to be something that is never going to change. Clearly, as we go through different life cycles, then your portfolio should change."

May 26, 2022
Episode 93: A Cautious Investor Who is Licking His Chops
John Ruffolo, founder and managing partner of Maverix Private Equity

John Ruffolo is one of Canada's best-known technology investors and is the founder and managing partner of Maverix Private Equity, which he launched after a traumatic truck accident left him paralyzed. With its inaugural fund of US$500 million, Maverix invests in health and wellness, financial services, transportation and logistics, live, work, play and learn, and retail.
Before Maverix, he was the founder of OMERS Ventures. He is also the Co-Founder and Vice-Chair of the Council of Canadian Innovators (see his full bio). John is a return guest, as he joined us early in the pandemic (before his accident) when he was advising the Canadian government on how to respond to the crisis (Episode 4: The shape of the recovery for the Canadian technology sector and economy).
In this appearance, Anthony and John discussed:
•  Investment cycles and investment entry points;
•  A look back at why 2011 was a great time to start OMERS Ventures.
•  Why the private equity party was already over in 2015: "I started to sniff that it wasn't quite overly funded, but the quality deal flow started to flatten."
•  The impact of the pandemic: "The pandemic did not change a thing. It acted as an accelerant." "2019 was already high valuations. 2020 and 2021, were god, stupid beyond imagination." 
•  Why he sees this downturn as not a blip, but rather a reversion back to the long-term, pre-pandemic mean.
•  What happens next: "What you're going to see is a lot of the private equity firms that were sitting on the sidelines, like we were, are now licking their chops."
•  The potential for further downside, the chances of recession and opportunities;
•  What investments Maverix is making now and what stocks to buy and avoid coming out of a recession.

John Ruffolo also described surviving the traumatic accident, his rehab and his incredible comeback. The CEO of the hospital told him, "I told one of your friends that it was a one in a million chance of getting past the first 48 hours." John is back riding a Peloton and a recumbent bike on the road. 

May 25, 2022
Episode 92: How To Build a Business People Will Fall in Love With
Brian Scudamore, Entrepreneur, Founder 1-800-GOT-JUNK? and Author

At just 19 years old, serial entrepreneur and author Brian Scudamore pioneered the industry of professional junk removal with 1-800-GOT-JUNK?, a company which now has annual revenues of $600 million. He has scaled that success into two more home-service brands, WOW 1 DAY PAINTING and Shack Shine, under the O2E Brands banner. He is also the author of WTF?! (Willing to Fail): How Failure Can Be Your Key to Success, and BYOB: Build Your Own Business, Be Your Own Boss. 
Anthony and Brian discussed:
•  How he started 1-800-GOT-JUNK: "I sat my dad down and it wasn't a great conversation because he said, 'What are you doing? You're leaving school to become a full-time junk man?'" 
•  What's the magic that makes it grow? "We focus on branding. Our trucks are mobile billboards. We keep our trucks clean and shiny. We're in the junk removal business, but you never get a second chance to make a first impression."
•  Why do some entrepreneurs fail? Why did Brian's attempt to build the fourth business in moving fail?
•  Marketing: "We show up in a louder, fun, prouder way and people connect with our brands. People buy brands that they love, that they can connect with."
•  Investment and business opportunities;

May 5, 2022
Episode 91: Why Bitcoin Isn't Digital Gold
Bob Seeman, Managing Partner CyberCurb, Senior Advisor Endeavor, Author, Attorney, Electrical Engineer & Entrepreneur

Bob Seeman is the author of multiple books on exposing Bitcoin (Bitcoin: The Coinmen; Bitcoin: Unlicensed Gambling; Bitcoin: The Mother of all Scams: Lies, manipulation and gambling; Bitcoin: The New Gambling Addiction), as well as another book: Ransomware Risk Mitigation for the Board (see his full bio).
Anthony and Mr. Seeman spoke about Bitcoin and its future, including:
•  The linkage between cybercrimes and Bitcoin;
•  Investment performance: "Bitcoin is gambling. It's not an investment. It's not even an asset. It has no cash flow or utility."
•  Lack of regulation: "Major Bitcoin holders manipulate the market, not just on a daily or hourly basis, but on a microsecond basis. There is no disclosure."
•  Fallacies of Bitcoin: "It doesn't meet any of the criteria of money." 
•  Correlation to the stock market: Is it digital gold?
•  Supply of new Bitcoin into the market;
•  Will any cryptocurrencies become fiat currencies?
•  Financially illiterate retail traders buying on credit;
•  How does this end?

April 26, 2022
Episode 90: Autos: Staring Into a Disruptive Future
Flavio Volpe, President of the Automotive Parts Manufacturers Association

This was Flavio Volpe's second appearance on our Fact Finders, as he was a guest in the early days of the pandemic when the audio industry was shut down for 60 days during lockdowns (Episode 6: Getting Back to Work in a Changed World).
In this 56-minute, Anthony and Mr. Volpe covered:
•  Lost production in 2020 & 2021 & 2022: Where did the semiconductors go? "We're about 25% down from capacity. Not because demand is not there, but because we just can't get enough of those cars made."
•  When will supply chain issues ease? 
•  Cost increases: Spot steel is up 3x from its trough. Logistics and fuel prices are up sharply, but the cost of parts has not risen because of fixed long-term contracts. "We're seeing a thinning of balance sheets." Top-tier suppliers, such as Magna, Linamar and Martinrea, are in better shape because they diversify contract exposure across product lines and geographies.
•  Demand: "If I want a new car, am I willing to pay a new car price for a used car? That's where the prices are."
•  Globalization?: "I think we're going to have 25 years of, 'Are you with the US/EU/Japan sphere (the West) or are you with the Chinese sphere?' The Chinese sphere is a formidable opponent."
•  China's advantage: "They've jumped ahead of everybody in the electrification of the transportation fleet."Electric car challenges: "We're about to enter the most disruptive period ever from a technology point of view." What is a reasonable target for 100% zero-emission new fleet sales? What are the challenges of EVs and what other alternatives are there to reduce emissions?
•  Canada's electric auto industry: "Watch where they're putting the batteries. That's where they will make the cars."
•  Tesla: Will it stay ahead of the industry and become a mass producer, or will Tesla become a Napster? 
•  Project Arrow: How the APMA's all-Canadian concept vehicle is showcasing advanced Canadian technology.

March 24, 2022
Episode 89: Risk Management: Contrasting Modern Portfolio Theory and Value Investing
Dr. George Athanassakos, Professor of Finance and the Ben Graham Chair in Value Investing at Ivey Business School 

Dr. George Athanassakos (see his full bio) recently published the book Value Investing: From Theory To Practice, which views stock picking from an academic and value investing perspective (he gave us a preview of this book in Episode 48: A Firm believer in stock picking). As mentioned in the video, he is also organizing the Ben Graham Centre's 2022 Virtual Value Investing Conference on April 20 and a live seminar, Value Investing and the Search for Value, from May 30 to June 3, 2022. 
In this 68-minute episode, Dr. Athanassakos and Anthony covered:
•  How to evaluate systematic and non-systematic risk.
•  Why value investors reject tenets of modern portfolio theory.
•  Portfolio diversification: "Diversification fails you when you need it most."
•  Measuring risk: "The problem is that risk in real life does not look like a game of roulette. The return distribution curve does not look like a bell curve. Our world is more like a poker game when whatever we observe around us affects the odds."
•  What do value investors want? "For value investors, avoiding losses is the key. They would rather minimize risk than maximize returns."
•  Why so many investors underperform the market: "Portfolio managers underperform not because they lack stock picking ability but rather because institutional factors force them to over diversify."

March 22, 2022
Episode 88: Putin's Impact on Investors and Governance
Alissa Kole, Managing Director of Govern

Alissa Kole, Managing Director of Govern, is an advisor to institutional investors and governments on corporate governance. She was born in Ukraine (she recently wrote about this in The Globe: The day I became Ukrainian), can read Russian, and formerly worked at the Organisation for Economic Co-operation and Development. Her time there included an evaluation of the governance of Russian companies as part of Russia’s request to join the organization (Russia’s request didn’t proceed after Putin invaded Crimea in 2014). Ms. Kole is a return Fact-Finding guest (Episode 15: A new reality for institutional investing) and runs a show on YouTube called Governance Dialogues (see her full bio). Alissa and Anthony covered:
•   Economic sanctions on Russia: What has been done, and how effective are they?
•   Corporations pulling out of Russia and nationalization of their assets: “Will Putin nationalize? Absolutely he will.”
•   Will businesses return to Russia once the war is resolved? “In the long term, I believe that Western investors and brands will go back to make money in Russia as they do in other parts of the world where the human rights record is far from rosy.”
•   Are we losing our way with ESG? “Corporate boards are today carrying responsibilities that are way beyond what corporate boards should carry.”
•   How does the situation in Ukraine get resolved, and what are the consequences economically and globally?

March 8, 2022
Episode 87: What it Takes to be a Successful Entrepreneur
Al Guarino, Entrepreneur and Board Member

Al Guarino is a current owner of multiple private companies, a board member of a public technology company listed on the Venture Exchange, and a member of the Veritas Independent Advisory Board (see his full bio). He is a former Partner at Arthur Andersen LLP who transitioned to being a successful entrepreneur. He has founded or is a partner in several privately held businesses that collectively employ almost 500 people. Anthony and Al covered:
•   What it takes to be a successful entrepreneur: “I believe that if you have entrepreneurial skills, if you have analytical thinking, if you are disciplined, if you are able to manage human resources and get the most out of them, then you can run any business.”
•   What are the key attributes to look for before making an acquisition? What are the clues a business is undermanaged? Why is it so important to evaluate management? “You can have a run on a company very quickly, once the outside market realizes that the founder is gone and there’s turmoil in the company. Things happen, really, really fast.”
•   The factors that make acquirers walk away from a deal: “If the market reputation is down in the dumps, then it takes a lot of time and a lot of investment to grow.”
•   How to lead as an executive and entrepreneur during a time of crisis: Avoid “paralysis by analysis.” If you want to be an entrepreneur, you need to figure out how to be more nimble in your decision-making.”

February 16, 2022
Episode 86: Building the BCA Franchise
Bashar Al-Rehany, former CEO of BCA Research Inc. and Executive Director of EuroMoney

Mr. Al-Rehany was the CEO of Dow Jones Markets Canada Inc. from 1996 to 1998 and Bridge Information Services Canada CEO from 1998 to 2002. He then led BCA Research Inc. from 2003 to 2021 as CEO. He was also an Executive Director, Member of the Board of Directors at EuroMoney. He is now a consultant and member of our Veritas Independent Advisory Board (full bio).
Anthony and Bashar covered:
•   His career after emigrating from Kuwait following the Iraqi invasion;
•   Building the world’s largest independent equity research organization with BCA Research: When he took over BCA Research, he talked to customers for the first 90 days. “The most important thing is talking to your customers.”
•   How hiring the right people is the key to success in capital markets: “The key in our industry is that love of the markets. You respect the financial markets. You love to be in the financial markets and that differentiates you from a regular analyst taking it as a job.”
•   How MiFID II changed the industry: “In my mind, MiFID II was one of the harshest regulations that governments have come up with.” How he restructured BCA in response and made hard decisions.
•   What makes a great analyst, whether it is sell-side or buy-side?
•   The future of the investment research industry. 

February 8, 2022
Episode 85: Fostering Positive Indigenous Relations
Rebekah Wilson, Reconciliation Coordinator at the Nuclear Waste Management Organization 

With a Métis background, Ms. Wilson facilitates communications between organizations, and the Canadian Indigenous peoples (see her full bio). As we learned during her passionate presentation, understanding the difficult truths of our pasts will ensure continued positive steps Canadians and businesses can make to improve our relations. 
Ms. Wilson helped us understand that we all need to play a part. She covered:
•   The history of Indigenous Relations: She recommends watching Doctrine of Discovery: Stolen Lands, Strong Heart by The Anglican Church of Canada. She provided perspectives on The Indian Act (1876), Treaties, the Residential School System, the Sixties Scoop, the Grassy Narrows Mercury Contamination, and Long-Term Boil Water Advisories.
•   Why Indigenous people mistrust industries. “Historically, [industries] have come in and said, ‘We’re going to do this and you don’t get a choice. This is the land we’ve chosen to do this on. You don’t have a choice.’ A great example of this if we’re thinking about nuclear is Bruce Power.” 
•   What we can do as part of the financial services community to facilitate discussions and relations: What are the solutions? “I think one of the things that communities are really struggling with, in most communities in Canada, is housing.” They also struggle with clean water access and health care during the pandemic. “Oftentimes, communities just want to be heard. They just want somebody to hear their plight and understand that they are struggling, that essentially these communities are living in conditions that are very similar to a third-world country.”

February 3, 2022
Episode 84: Building Canada’s Leading Family Office 
Tom McCullough, Co-Founder, Chairman, and CEO of Northwood Family Office

Mr. McCullough is Co-Founder, Chairman, and CEO of Northwood Family Office, one of Canada’s leading family office wealth managers. The award-winning Northwood manages $2.2 billion of investments, and $9 billion of family net worth, and was recently sold to CI Financial Corp. Mr. McCullough is the co-author of two books: Family Wealth Management, and Wealth of Wisdom: The Top 50 Questions Wealthy Families Ask. He is also an adjunct professor in the MBA program at the University of Toronto’s Rotman School of Management, where he teaches The Management of Private Wealth (see his full bio).
Anthony and Mr. McCullough discussed:
•   How he started his career at Dominion Securities and founded Northwood with his partner Scott Hayman;
•   What makes a successful family office? How have family offices evolved? 
•   How has the pandemic affected Northwood? “We’ve been fortunate.” Northwood had 20 staff at the beginning of the pandemic and now has 32, partly to respond to demand and partly to prepare for growth.
•   Why did you sell to CI? Why did CI come to the top of the list? 
•   Growth opportunities: There are 11,000 families in Canada with more than $30 million. “We’re now the leading family office in Canada, and we’ve only got about 80 families out of that 11,000.”
•   Mr. McCullough’s latest book on the top questions that families ask about wealth: “I think the most common questions are ones to do with kids. It’s very interesting. There’s this dichotomy that people work very hard to create wealth to pass on to their children. But then, on the other hand, they’re worried about the effect this money is going to have on their children.” 
Tom then took several questions from the audience, such as what he thinks about the future of financial advice, how he coaches families on risk and others.

January 27, 2022
Episode 83: Tapping into the Instincts to be Healthier and Outperform
Dr. Stacy Irvine, Founder and Co-Owner of Totum Life Science

Dr. Irvine is the Founder and Co-Owner of Totum Life Science, a national leader in sports medicine with five locations in Toronto. Her formal education includes a degree in Kinesiology, a master’s degree in Exercise Physiology and a Doctorate of Chiropractic. She is also the author of Your Better Instincts: Uncover Your Inner Power to Improve Health, Happiness and Performance (see her full bio). 
Anthony and Dr. Irvine discussed:
•  What human instincts do we share that make it difficult to adapt to a pandemic?
•  Why the quality of your relationships is more important than wealth in order to have good health.
•  How to improve your good instincts.
•  What are three things people could do now to improve their health and performance as we come out of the pandemic?

January 13, 2022
Episode 82: How Investors Need To Think About Risk
Ron Dembo, Risk Management Entrepreneur and Consultant

Dr. Ron Dembo is one of the world’s leading authorities on risk management. He is probably best known as the founder and CEO of Algorithmics Inc., which grew to be the world’s largest enterprise risk-management software company. More recently, Dr. Dembo has founded Riskthinking.AI, a company dedicated to the science-based measurement of climate change financial risk. He is also the author of several books, including his latest, Risk Thinking… in an uncertain world (see his full bio).
Anthony and Dr. Dembo discussed:
•   His background: How he transitioned from being a professor at Yale to taking a short-term job at Goldman Sachs and later how he started Algorithmics. What is his best advice in running a business?
•   What the financial industry gets wrong in making forecasts: Dr. Dembo discussed how The Shaw Festival took out pandemic insurance several years ago. “You don’t forecast that Covid is going to happen. You generate scenarios. Could it happen? Yes. If it does happen, what will happen to you?” The Canadian government has made several mistakes in not thinking about pandemic risk. “The trouble is that in many government situations, decisions are made on forecasting [rather than risk thinking].”
•   Why Canada is so vulnerable to climate risk: Many of the country’s primary sources of revenues – fishing, forestry, agriculture and oil – may be impacted. “There is a possibility that we will be violently affected. What would you do if you were running this government? You’d say, ‘We have to hedge that.’” 
•   The challenges of ESG: The weakest part is the E, as it is difficult to measure environmental risk. “It’s a very thing technical thing. It’s not trivial.” ESG scores are all over the map. 
•   How to create ESG scores that are more actionable for investors: “What we need is regulation that makes sure that when you see a score, you know it’s appropriately calculated in that there’s something behind that. Today we don’t have that.” 
•   The pandemic: “Until we vaccinate the world, the odds that we’re going to get another pandemic are very high.”