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Canada’s Labour Shortage, The Opioid Crisis, and Trends for to Watch for 2023: Timely Topics – February 2023

Timely Topics with McCarthy Tétrault curates the latest market trends on a monthly basis to help you stay informed of developments that can affect your business. This content is current as of February 1st, but please connect with us if you have any questions on any of the topics below.

Here are this month’s trending topics:

1) Tackling Canada’s Labour Shortage with Immigration Policy

Policymakers and business leaders continue to struggle with Canada’s enduring labour shortage. Despite a potential recession looming on the horizon, the record low unemployment rate of 2022 is projected to continue into 2023 as the Canadian labour market grapples with the lingering effects of the COVID-19 Pandemic. In particular, demand for workers in skilled trades and healthcare continues to far outstrip available supply.  

Federal and provincial legislators are actively combatting this persistent labour crunch. Most notably, Canada’s Minister of Immigration, Refugees and Citizenship announced in November 2022 that the Federal government would move to significantly raise annual immigration targets. Various measures aiming to expand access to certain work permit categories and facilitate the hiring of foreign nationals were also put in place in 2022.  

As outlined in the 2022 Annual Report to Parliament on Immigration, the Government of Canada intends to welcome 465,000 permanent residents in 2023, 485,000 in 2024 and 500,000 in 2025. The policy has a clear focus on economic growth and economic immigration, with the stated goal of having 60% of admissions be in the economic class by 2025.

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If your organization is feeling the effects of the labour shortage and you’d like to discuss an immigration strategy, please connect with a member of our MT>iPlus team.

2) Competition/Antitrust & Foreign Investment: What to Expect in 2023 and Beyond

Following substantial reform enacted to Canada’s competition regime in 2022, which we have summarized here, we are now looking ahead – what  trends can be expected in 2023 and how can it affect your market activity and business objectives? Here’s a high level overview of what is to come, but please check out our recently published Competition/Antitrust & Foreign Investment Outlook 2023 for a deeper dive into these and other insights.

  • Competition Act merger review: More contentious and intensive reviews
  • Investment Canada Act: Geopolitical trends increase national security risks
  • Unilateral conduct: A new era for digital enforcement or repurposing the same toolkit?
  • Cartel activity: Beware buy-side agreements
  • Off-Market: Canada takes a firmer stance against deceptive marketing
  • Competition class actions: Canadian courts dig deep into the Competition Act

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To discuss how these trends impact your business, please connect with a member of our Competition/Antitrust & Foreign Investment Group.

3) Canada’s Trade and Technology Transfer Policies: Changes to Guide to Canada’s Export Control List

The Government of Canada continues to take steps to better align Canada’s trade policies with the evolving global economy. 

On December 21, 2022, a new version of “A Guide to Canada’s Export Control List” (the “Guide”) came into effect. It identifies what specific goods, services and technologies are controlled for export or transfer from Canada to other countries. This includes transfers through physical export as well as intangible cross-border transfers through e-mail, server upload and download, workshare platforms and videoconference and phone.

The Guide is frequently updated to ensure Canada meets its multilateral commitments under various multilateral export control and non-proliferation regimes. The new Guide introduces several new controls affecting a variety of exported goods, services and technology, including those relating to electronics, aerospace products, special materials and equipment, software and chemical substances.

Further information on the new amendments are detailed in our recent Terms of Trade blog post and summarized on the Government of Canada’s Export and Import Controls website.

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McCarthy Tétrault is committed to keeping its domestic and international clients apprised of relevant developments in international trade. For further information on how the new Guide to Canada’s Export Control List might impact your organization, please contact a member of our International Trade & Investment Team.

4) North American Leaders’ Summit: A Focus on Trade, Competitiveness and Supply Chains

January’s North American Leaders' Summit saw Prime Minister Justin Trudeau, U.S. President Joe Biden and Mexican President Andres Manuel Lopez Obrador meet with the backdrop of tensions with China and the Russia-Ukraine war. We have seen this important context accelerate the formation of political and economic blocs, creating the evolving urgency for North America to reset its cooperation agreements. The Summit covered a number of interesting areas for Canada’s future, including:

  1. Supply Chains: The leaders emphasized how supply chains impact economic resilience. However, it seems particular tensions around supply-managed dairy in Canada, a favouring of domestic energy suppliers in Mexico, and America’s automotive supply chain regulations continue. “We can likely expect to hear more about re-shoring, friend-shoring and moving basic manufacturing from China to Mexico in the near future,” Former Quebec Premier and current partner at our firm, Jean Charest, predicts.
  2. Semiconductor Sector: The importance of the semiconductor sector cannot be understated – chips are an essential part of modern life, and Asia has historically dominated the industry in terms of production. Globally, we are seeing efforts to increase production, especially from Europe and North America. At the same time, the U.S. is leading the charge in expanding export controls and other measures intended to limit China’s ability to access advanced semiconductors and related procurement equipment and technology. During the Summit, Trudeau stated his vision to have Canada play a vital role in North America becoming a reliable supplier of semiconductors globally.
  3. Trade: Trudeau emphasized the benefits of the free flow of commerce between Canada and the United States, specifically raising Buy America, softwood lumber, and steel and aluminum, which has caused tension between the two countries in recent years. Just after the conclusion of the Summit, a dispute settlement panel under the USMCA released its decision agreeing with Canada’s and Mexico’s challenge to an overly restrictive U.S. interpretation of the rules of origin for duty free access for automotive products. We expect these topics will be on the agenda for President Biden’s visit to Canada in March.
  4. NEXUS Backlog: Canadian Nexus enrolment centres will reopen in the spring alongside a new program allowing U.S.-led interviews to be conducted at Canadian airports. This move is meant to continue the close collaboration between countries and facilitate travel across the border, which will generate billions in economic activity.
  5. Haiti: While the U.S.’s preference is for Canada and other allies to lead an international mission to Haiti to tackle the ongoing humanitarian and security crisis, Trudeau expressed that Canada will focus on sanctions and aid for local police.

The leaders also addressed global and regional stability issues such as Iran, China, and Russia’s invasion of Ukraine.

Canada’s economic goal was to ensure the U.S. and Mexico see Canada as a true partner and collaborator. We will know more when President Biden has his first official visit to Canada, a rare opportunity for Canada to advance its national interests with not just its neighbour, but a global superpower.

5) Private Equity in 2023: A Changing Landscape

The Canadian private equity market saw several significant developments in 2022 that influenced deal activity across sectors. What are the key trends to look out for in 2023? The hardening market, changing credit conditions, guidance from the Canada Revenue Agency, evolving disclosure regulations, increased regulatory enforcement and other important developments will certainly shape 2023’s private equity landscape. For a deeper dive into these and other trends, please check out our Private Equity Outlook 2023 

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To discuss these developments and their impact to your business, please connect with a member of our Private Equity Group.

6) Opioid Crisis: New Requirements for Certain Ontario Employers

Canadian legislators are increasingly taking steps to battle Canada’s worsening opioid crisis. Recent amendments to Ontario’s Occupational Health and Safety Act (“OHSA”) will mandate some employers in Canada’s largest province to provide naloxone kits in the workplace.

Beginning June 1, 2023, the new section 25.2 of the OHSA will require certain Ontario employers to provide naloxone kits in the workplace.  Those employers must also ensure the kits are in the charge of a worker trained to recognize an opioid overdose and administer naloxone.

The Government of Ontario has published a guidance document to help employers determine whether the new requirement applies to their workplaces. There are many ways an employer may become aware that there is a risk of one of their workers having an opioid overdoes in the workplace, including voluntary disclosure by a worker, a previous history of opioid use or overdoses in the workplace, observing discarded drug paraphernalia or if the Joint Health and Safety Committee or a worker safety representative advises the employer.  Further information can be found in our recent McCarthy Tétrault Employer Advisory blog post.

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For any questions about the new requirement and its impact on your business, please contact a member of our Labour & Employment Group.

This newsletter is designed to provide general information only. This newsletter does not provide legal advice on specific issues. You are encouraged to consult with legal counsel should you require assistance in addressing a particular issue or concern.

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