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2023 Trends Report: Public affairs and stakeholder relations

2023 Trends Report: Public affairs and stakeholder relations

More than just a lovely picture, this image in the style of Monet is meant to represent public affairs across the country. You’ll notice the lack of identifying traits for this imaginary parliament. No flag, no crest, but the idea of harmonious relations between stakeholders remains. The artificial intelligence tool we used to create this illustration really understood the assignment.

At NATIONAL, we are committed to supporting business leaders in making the right decisions for their future. Here are the trends our public affairs and stakeholder relations experts see for 2023:

Tough economic choices will have to be made

The prospect of runaway inflation has had politicians walking a fine line in the latter half of 2022. Spend too much to help those hurting the most, and you’ll only add fuel to the fire. Pull back too much, and you’ll appear to be abandoning those in need.

Unfortunately, the conundrum will persist into 2023.

Economists expect a recession, precipitated by rising interest rates. Depending on how fast the economic situation deteriorates—some of the technology sector’s biggest names have already completed a wave of layoffs—we may get a glimpse of the federal government’s thinking in the next budget, this spring.

Inflation combined with severe labour shortages, has governments competing to maintain growth. The shortage of staff in public services—health and education in particular—and within companies is affecting the whole economy. The days when job-creating projects were welcomed with open arms by governments are behind us. Today, automation and, to some extent, labour force reduction are what policymakers support.

Recession or not, the situation is precarious and requires governments to be approached with these important challenges in mind.

Simon Beauchemin, Senior Director, Trade and Investment and Guillaume Fillion, Director, Public Affairs

Intergovernmental challenges between Ottawa and the provinces will continue

Going into 2023, federal and provincial relations will continue to face significant challenges, particularly on the prairies where the fracture is more pronounced. After two consecutive federal elections, Canadians have elected minority governments while voters in Alberta and Saskatchewan have delivered mandates that are at odds with federal policies.

The divide that began over environmental and energy policy is now spilling over into areas like policing, pension plans, and healthcare. Provinces are becoming creative and collaborative in challenging the federal government with most provinces demanding an increase in the Canadian Health Transfer.

Saskatchewan and Alberta have provided themselves with new legislative tools that they believe will protect their economic interests from federal environmental policy. They are also exploring having their own provincial police forces and Alberta aims to opt out of the Canadian Pension Plan.

Organizations will have to adapt their government relations strategies and anticipate areas where business and policy interests take a backseat to provincial-federal “bun fights.” Picking a fight with the federal government is almost as Canadian as maple syrup and poutine.

Blaise Boehmer, Director, Corporate Communications and Public Affairs

More collaboration between public and private sectors on affordable housing

Once an issue reserved mostly for big cities, the housing affordability crisis now stretches from coast to coast as the pandemic-related exodus continues from urban centres.

As interest rates rose, the second quarter of 2022 saw the “worst deterioration” of housing affordability in 41 years according to a report by National Bank, making homeownership increasingly unattainable. Renting is also increasingly out of reach, with the average rent now exceeding $2,000 per month. Meanwhile, supply chain issues continue to delay new projects.

The kicker? There is no silver bullet solution on the horizon.

While recent federal programs have focused on helping Canadians save, future programs will require a focus on increasing participation from the private sector in developing affordable housing.

NATIONAL expects government funding to hinge on advancing the federal government’s climate change goals—for developers, it’s clear that sustainable and adaptive projects will be the government’s preferred way forward.

There is no question that governments, non-profits, and the private sector will need to work together to solve this crisis.

Jason Craik, Director, Digital and Integrated Communications and Siera Draper, Consultant, Public Affairs

Building trust in an increasingly polarized environment

Those who study and measure the concept of “trust” tell us Canadians worry that they are being misled by leaders, including the media and government. Divisive, hyper-partisan politics in the United States has had a spillover effect, giving rise to the voices and actions of those who feel ignored, disconnected, or invisible.

The result is that it’s more difficult for organizations to build consensus. So, how can organizations engage their key audiences around policy, regulatory, or legislative change? Build trust.

Trust is linked directly to reputation, which needs to be constantly managed. Set the foundation for success with a strong corporate narrative that flows from a set of clear values. Be consistent across your organization and be prepared to live your values every day.

We know from experience that organizations that build relationships with stakeholders and look for regular opportunities to engage have a far greater rate of success when they meet with government. They have partners, champions, and the research to prove it. And when consultation is required, they work hard to establish clear guiding principles and embrace transparency.

Trust is built over time. It’s an investment, but a strong reputation will serve you well in this complex stakeholder environment.

Kristan Hines, Senior Vice President, Public Affairs and Adam Langer, Director, Public Affairs

Populism and retail politics are here to stay

Canadians continue to face economic uncertainties heading into 2023, due to rising interest rates, inflation, supply chain constraints, and the high cost of food and fuel. For most, their priority is keeping their pocketbook in check as the cost of living becomes a serious burden. For governments, their job is two-fold—rebuild and reinvigorate their economies, while making life more affordable for everyone.

Ontario has seen elections at all levels of government over the past 12 months, and affordability remains the number one issue. Looking ahead, the winning formula for politicians of all stripes will include the promise of putting money back into the peoples’ pockets as a looming recession nears.

Over the last few years, the world has seen the rise of retail politics on a global scale and in Canada. Often crossing party lines, some view this as “populist” in nature. But whatever the description, Canadians want to know what their governments are going to do just to help make ends meet.

Kevin Macintosh, Senior Vice President; Stephen Adler, Senior Director, Corporate and Public Affairs; Yash Dogra, Director, Corporate and Public Affairs; and Stephanie Gomes, Consultant, Corporate and Public Affairs

Labour shortages, immigration and the decline of the French language

Although not unique to Canada, the phenomenon of labour scarcity is accompanied by intrinsic reflections on immigration, the separation of powers and the French language.

To address this unprecedented crisis, the business community has largely positioned itself in favour of increased immigration.

In 2022, the Statistics Canada census reveals a decline in the French language in Canada, adding to the reflections on the labour shortage and immigration. In Ontario, many see this new reality as an opportunity to build a stronger Francophone community.

Recently, both the federal and Quebec governments introduced bills to modernize official language laws, once again widening the gap between their conflicting positions. At the heart of the debates: the application of the Charter to private companies revives the thorny issue of the division of powers.

These various reflections on the Canada-Quebec agreement that are currently shaping the labour market will certainly have multiple consequences on the future of businesses.

Paul Wilson, Senior Vice-President, Organizations and Stakeholders and Elizabeth Lemay, Consultant, Organizations and Stakeholders