Katy Langlais
Manager | CRHA, MBA | Human resources consulting

Workforce shortages are a challenge and keeping your employees engaged with the company is more important than ever.

It’s important to remember that your employees are your organization’s most important asset, and one that can contribute the most to its development.

Numerous surveys reveal that employees who are strongly committed towards an organization contribute to its growth up to two and half times more than do other employees. It was observed that organizations that neglect employee mobilization risk losing their trained and experienced employees as well as the financial investment that goes along with training, recruiting and hiring new employees.

The highest performance is found in organizations that promote an organizational culture based on motivation and surpassing oneself, and that use this to attract qualified resources and retain motivated employees.

Ten tips for creating commitment

Here are ten tips that employers should keep in mind when managing daily activities in order to increase their employees’ level of commitment towards the organization:

  1. Provide a clear vision of the organization’s goals, expectations and objectives;
  2. Provide a detailed description of employee tasks;
  3. Ensure that employees understand their tasks and how they can contribute to the organization’s objectives;
  4. Provide clear feedback on the organization’s results;
  5. Recognize the efforts of committed and efficient employees;
  6. Offer competitive compensation;
  7. Provide career advancement opportunities;
  8. Offer professional development;
  9. Involve employees in decision-making;
  10. Make financial participation in the organization available.

Employees, A Key to Success

It’s generally believed that employees who feel satisfied with their professional environment work better, serve clients better, work better with their business partners and thus, have a more positive impact on an organization’s productivity. While all of this may be true, there’s more; employees would also like to:

  • Have a relationship of trust with management;
  • Contribute to the organization’s culture and values;
  • Maintain a good work-life balance;
  • Have a working environment with good team spirit and pleasant inter-professional relationships;
  • Get involved in causes that they hold dear and receive support from their employer.

Having a clear vision and an employee performance management structure based on the above are instrumental in creating an environment that is conducive to development and increasing employee commitment. Remember that employees are at the center of an organization’s success… and its challenges.

However, over and above the various initiatives that can be implemented to promote employee commitment, strong leadership is likely one of the best ways to motivate and mobilize employees.

28 Sep 2021  |  Written by :

Katy Langlais is a recruiting and human resources consulting at Raymond Chabot Grant Thornton.

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Sustainability and climate change are becoming increasingly important for organisations of all shapes and sizes.

From the perspective of the organisations’ impact on its environment, but also risks of the changing climate for the organisation. Think of:

  • extreme weather disrupting production;
  • changes in laws and regulations;
  • changing consumer awareness;
  • purchasing behaviour.

Yet, in a report published by the World Economic Forum this year, we see that in the top-five of most likely risks and in the top-five of risks with the most impact, three of the five risks are climate related. This highlights the urgency for including these climate-related risks and opportunities going forward.

Where there are risks, there are also opportunities. Opportunities around:

  • effciency,
  • positioning,
  • raising capital,
  • new business models.

How can you capitalise on these opportunities and prepare your company for the future?

What are the risks?
What are the opportunities?
What are the financial implications?
Questions you must answer?
Step-by-step plan for organisations

What are the risks?

The exact risks your organisation faces, depends on context, products, services and the business model. Generally speaking however, several types of risk may apply to your organisation. Climate-related risks can be split into two main groups, transition risks and physical risks.

TRANSITION

Transition risks are those risks related to the transition towards a cleaner, more climate positive economy. This includes the following risk categories.

Policies, laws and jurisprudence

Organisations are increasingly confronted with policies and laws related to climate. These can be aimed at accelerating the transition to a cleaner economy and, for example, stimulate organisations to emit less, to use cleaner energy or to process waste in a smarter way. A concrete example is the upcoming CO2 tax.

Recent years have seen a substantial increase in climate-related court cases against organisations, e.g. the current climate case against Shell. Cases have been made for not (timely) preventing an organisation’s negative impact on the climate, not anticipating (damages and loss through) climate change (think of extreme weather such as draught and floods) and insuffcient transparency about financial risks (e.g. to shareholders) following climate-related events.

Technological risks

Technological innovations related to the transition towards a cleaner economy, can also provide both opportunities and risks for operations. Think, for example, of renewable energy, storage of CO2 and hydrogen as fuel. When an organisation depends for a large part on ‘old’, polluting technology or fuel, for example in production or distribution, these new technologies can prove disruptive to operations.

Market risks

Changes in supply and demand can pose risks for organisations. What are your supply-side dependencies? You may face problems as a result of a reduction in the raw materials available or the failure of harvests due to extreme weather. On the demand side, there’s a reduced demand for products and services with a negative impact when it comes to sustainability. We see this both in B2B and in B2C business models.

Reputational risks

Social awareness around climate change, and the responsibility companies have to reduce their impact, is growing. If an organisation does not cater to this, they may face reputational risks. This could be through reduced demand, because consumers increasingly choose organisations that have a (more) positive impact on humans and on nature, or, for example because they find it diffcult to recruit and retain staff.

PHYSICAL

Physical risks are directly related to the weather and linked to climate change. These risks can be either incident-driven (acute in nature), or chronic (as a result of permanent, long-term changes in weather patterns).

Acute risks

Risks related to specific incidents, such as extreme weather conditions. Flooding or cyclones, for example.

Chronic risks

Risks that are related to changes in climate patterns, such as heat waves, drier seasons and higher sea levels.

Like with transition risks, physical risks often lead to financial implications for an organisation, such as damage to possessions or disruption in the availability of goods or raw materials, loss of quality or safety of employees.Colloque Fiscalite internationale

What are the opportunities?

Where there are risks, there are also opportunities. Here too, specific opportunities for your organisation will depend on context and on the business model, but on the whole, opportunities arise in the following areas.

Efficiency and cost-saving

Innovations in the field of sustainability can lead to improved efficiency in, for example, production or distribution processes, but also within the organisation internally, through more efficient buildings, a better use of resources through recycling, or through the use of circular models. With potential cost savings as a result. The subsidies around sustainability also provide plenty of opportunities for organisations.

Positioning and reputation

Changing customer awareness is leading to changing demand. More and more organisations are acting on this by taking a position when it comes to climate change and improving the sustainability of their products, services and business models. This also helps them to become more attractive employers.

Market

Sustainable positioning creates market opportunities. By developing new business models, opening up new markets (think of governments who increasingly offer contracts to sustainable partners), and in raising new capital for organisations. These days, investors prefer to do business with an organisation that has a sustainable strategy.

Continuity

Ultimately, by adjusting business models to incorporate climate change, sustainability and impact, you will create opportunities for the healthy continuity of the organisation. There where others fail. Making your organisation future-proof ensures that you remain relevant in the market and for your clients, and that you are able to positively answer the question: ‘Will my organisation exist in 10 years’ time?’

What are the financial implications?

Management information often makes a distinction between financial information and non-financial information. Non-financial information relates to the key performance indicators (KPIs) related to people and planet, e.g. an organisation’s CO2 emissions, waste flows, HR and diversity policy. Such non-financial information is crucial for charting and anticipating climate-related risks and opportunities.

When it comes to organisational strategy, however, this distinction between financial and non-financial information does not make much sense: increasingly, climate-related risks and opportunities can have large impact on an organisation’s financial performance.

Questions you must answer?

What role will climate and sustainability play for your organisation and where should you start in order to include this in your organisational strategy? Relevant questions to answer in this regard are:

  • Which climate-related dependencies and risks does my organisation face, in which timeframe, and to what extent?
  • What are the opportunities, e.g. in the field of product development, positioning or financing?
  • What are the financial implications when these risks and opportunities materialise? How will this affect the business case?
  • What could and should I anticipate in order to ensure my organisation’s continuation? What are the costs involved?
  • How can I embed steering and managing of these types of opportunities and risks in company processes?

Step-by-step plan for organisations

1. Analysis of dependencies, risks and opportunities

  • Which climate-related matters does the organisation depend on (raw materials, land, supply chains, technology, people, possessions, etc.)?
  • What climate-related impact (negative and positive) does the organisation create in its production cycle, operations, products and services (emissions, water, waste, biodiversity, ecosystems, materials, people)?
  • Which material risks does the organisation face (transition risks and physical risks)?
  • Which opportunities are there in the field of climate and sustainability for the organisation (positioning, efficiency, cost-saving, future-proofing)?
  • What are the potential financial implications of risk and opportunities (based on scenario analyses and forecasts)?

2. Sustainability strategy

  • How can the organisation anticipate risks and opportunities?
  • What is needed (materials, capital, stakeholders, positioning), and in which timeframe?

3. Monitoring and reporting

Monitoring KPIs and non-financial information to check on environmental performance and on progress of the strategy. This enables timely adjustments and allows you to quickly spot new risks and opportunities.

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Emilio B. Imbriglio
President and Chief Executive Officer | FCPA, FCA, MBA, CFE, ICD.D.

With the federal election campaign in full swing, Canada’s political parties are presenting their campaign promises on what they’ll do if elected.

While public finance isn’t a hot-button election issue, it’s nonetheless crucial to the country’s financial health.

To protect future generations, we must have a plan to balance the federal budget in a short horizon and reduce public debt. Tackling these issues is in everyone’s best interest. Passing on a heavy financial burden to our children would hinder their ability to make choices down the road. We’d be mortgaging their future and, in a sense, their well-being.

Establishing “two budgets” for a clear and predictable budget plan

Given the size of the pandemic debt, Raymond Chabot Grant Thornton believes the government should introduce special budgetary measures aimed specifically at reducing the deficit generated by pandemic-related assistance programs. These special measures should be presented separately from regular budgetary measures. The next federal government must present fiscal measures that are part of a clear and predictable budget plan. To this end, the firm believes that such measures—including some that may be bold, ambitious and in some cases offered on a temporary basis—should serve to give the economy a quick boost and to reduce the deficit and debt resulting from recent government aid programs.

This is why the firm believes new measures should be defined under two fiscal frameworks. More concretely, the next budget plan should be split into two parts that are considered separate “budgets.” An exceptional situation called for exceptional measures with equally exceptional budgets. The first fiscal framework would address the extraordinary deficit and pandemic-specific debt generated since March 2020 and the various measures that will generate the wealth necessary to reduce this deficit over time, while the second fiscal framework would address the regular service needs of taxpayers, including businesses, that would be typical in normal circumstances, as it was prior to the pandemic.

Even before the pandemic, when the conditions were right for generating surpluses—particularly with full employment—the government’s coffers posted a $14 billion deficit at March 31, 2019, and a $39.4 billion deficit at March 31, 2020.

Following historic annual deficits of $334.7 billion (projected at March 31, 2021) and $138.2 billion or greater the following fiscal year, the Office of the Parliamentary Budget Officer projects the deficit to reach $24.6 billion by March 2026. The total federal debt already stood at $721.4 billion for fiscal 2019–20. It’s expected to hit $1.19 trillion by the end of the current fiscal year and $1.32 trillion in March 2026. Considering the magnitude of these numbers, we must act quickly and get our fiscal house in order with a long-term plan. The devil is in the details!

Without a doubt, aggressive economic intervention was—and still is—necessary to help us get through the pandemic. The crisis would have been far more devastating if nothing had been done. Canada’s next government must continue to support the country’s economic recovery by providing assistance to the most vulnerable populations and to businesses in the industries hit hardest by the pandemic. Going forward, we need more sector-specific measures.

For example, the environment is a critical issue in this election. Environmental protection is important to people of all ages, as well as organizations and a wide range of actors. It’s even more important for the future of our planet and the well-being of upcoming generations. Public finance should be considered a similar priority, as it creates the financial means to implement concrete environmental protection measures.

Reducing the pandemic debt without raising taxes: a smart solution

Given the state of our public finances, we need to help businesses grow and broaden the tax base through job creation, particularly while we face a labour shortage. For the next generation, the solution to this problem is well-orchestrated immigration and integration.

Canadian taxpayers are already overtaxed. The federal government shouldn’t pursue this avenue as a means of bringing in more money. Quebec’s tax burden is already very high, ranking 1st in Canada and 11th out of 38 when included with OECD member countries. Therefore, tax increases would neither be desirable nor sustainable. This is particularly true for businesses that still need liquidities to recover, create jobs and increase productivity.

The next federal government should consider introducing temporary tax measures to accelerate the collection of capital gains tax, which would be collected later anyway. Raymond Chabot Grant Thornton recommended this and other measures in its 2021 federal prebudget proposal.

For a period of 24 months:

  • Allow taxpayers to withdraw funds from their RRSPs at a combined federal and provincial tax rate of 15%, payable immediately, by establishing a structured mechanism to ensure the sound management of the retirement fund;
  • Allow taxpayers to pay capital gains tax on assets (shares, revenue properties, etc.) also at a combined federal and provincial tax rate of 15%;
  • Allow Canadian taxpayers to withdraw funds from their holding corporations and pay a combined federal and provincial tax rate of 20% on dividends;
  • Allow corporations to increase their capital dividend account to 30% of expenses incurred on initiatives that benefit the health of their employees. This private-sector investment will lead to better lifestyle habits and lower healthcare spending in the future. Corporations could therefore pay their shareholders tax-free dividends amounting to 30% of these eligible expenses.

Increase the tax base by reopening the federal immigrant investor program

We also believe this is a good time to reopen immigrant investor programs, federally and in Quebec, as this would increase foreign investment in the country and contribute to our economic recovery. Canada stopped recruiting these newcomers in 2012 and officially ended its immigrant investor program in 2014. Now that economic recovery is a priority, a program of this nature would be particularly helpful as it would drive considerable economic benefits. It’s worth noting that between 2015 and 2020, the United States recruited more than 55,000 investors through their Immigrant Investor Program (EB-5). The program requires applicants to make a US$500,000 investment, which is then used to bolster the country’s economy. In Europe, foreign investors injected nearly €22 billion in the various jurisdictions between 2015 and 2019 through this type of immigration program.

Bold tax measures like these could be implemented quickly, as could the reactivation of the federal immigrant investor program. Intergenerational equity and the stability of public spending are at stake. There are ways for the federal and provincial governments to increase their revenues without increasing the tax burden on taxpayers. This would allow us to bring down the pandemic-related debt, balance the budget more quickly and reduce the burden on future generations.

14 Sep 2021  |  Written by :

Mr. Imbriglio is partner and the President & CEO of Raymond Chabot Grant Thornton. He is in charge...

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The auditor’s response to the risks of material misstatement arising from estimates made in applying IFRS 17 Insurance Contracts.

We are pleased to share “The auditor’s response to the risks of material misstatement arising from estimates made in applying IFRS 17 Insurance Contracts” which has been issued by the Global Public Policy Committee (GPPC).

The GPPC comprises representatives of the six largest accounting networks being BDO, Deloitte, EY, Grant Thornton, KPMG and PwC.

IFRS 17 heralds a new era of accounting for insurance contracts because it sets out principles-based requirements that aim to improve the comparability of the measurement and presentation of insurance contracts across entities reporting in jurisdictions applying International Financial Reporting Standards (IFRS). The impact of IFRS 17 will be felt by many stakeholders including, but not limited to, preparers of financial statements, those charged with the governance of entities that issue insurance contracts, investors, regulators, analysts and auditors.

With IFRS 17’s anticipated mandatory effective date of January 1, 2023 moving ever closer, all types of businesses, not just registered insurance businesses, need to start evaluating the impact of the Standard now. In particular, audit committees should be considering the quality of the financial reporting of IFRS 17.

With this in mind, the GPPC has issued another paper which builds on the paper issued in 2020 “Implementation of IFRS 17 Insurance Contracts – Consideration for those charged with governance.” This additional paper focusses on the auditor’s approach to auditing estimates and associated judgments made in the application of IFRS 17.

The publication mentioned above follows this IFRS Adviser Alert.