Speaker 1 [00:00:03] Hey, it’s Theresa. Have you tried to purchase the new or used to be a vehicle lately? I can’t say I have, but my dad just bought a used car and it apparently was not an easy or inexpensive process. The used car market in Canada has been booming since the onset of COVID-19. Prices have gone up. Supply chain issues dampened new vehicle availability. Add to that a shortage of parts and chips around the globe, and you’re looking at a rough ride. If you’re planning to buy a car in the next little while. This is disruptors, The ten minute take where we dive into the latest innovation, tech and economic buzz. This week’s take is on the automotive market in Canada. What does the landscape look like amid these global challenges, and how are tech platforms helping consumers with the buying and selling process? To offer his insights. We’re joined by Cody Green, founder and CEO of Canada Drives dot ca, the country’s largest 100% online car shopping and to your door delivery platform. Cody, welcome to the ten minute take. Speaker 2 [00:01:06] Thanks for having me. Speaker 1 [00:01:07] So we’ve been seeing supply chain woes and chip shortages affect the vehicle market for a while now. But what are the biggest issues that Canadians who are looking to buy or sell? What are they grappling with these days? Speaker 2 [00:01:19] The biggest issue is we’re still just not making as many new vehicles as Canadians want. So recent numbers. May 2022, we had 140,000 new vehicles sold, which sounds like a lot, except when you compare it to 200,000 that we had in 2019. So roughly 70% of the output that we used to have. New vehicle prices are going up. So there’s a few things at play here. There’s a definite rise at the cost of the inputs. Those manufacturing bottlenecks that you referenced and really just this supply and demand imbalance. And when manufacturers have the limited capacity, they’re going to be focusing on those more expensive models, those more expensive trims. So you see that on that new car side. If you’ve walked into a dealership hoping to leave with a new car, you may find that you’re waiting three months, six months or longer. They might just say, you know what? I don’t even know if I’ll be able to get you this model. Good luck next year. And that and that really just sort of flows over to the used vehicles because used vehicles are really a reflection of new vehicle pricing. And so what we saw last year as those new vehicle prices went up, the used vehicle prices sort of rose along with them. At this point, it’s relatively stable. We’re not seeing big swings either way, but there’s just less vehicles out there and so makes it a bit more challenging for shopping. Speaker 1 [00:02:45] Are you seeing any particular types or makes or models of vehicles that are most affected or is it kind of uniform across the board? Speaker 2 [00:02:51] It’s really across the board. I think recently and this has been exasperated by our fuel prices shooting up and staying up. Getting your hands on a new EV or a hybrid vehicle. That’s definitely challenging. And Tesla is a good example. Like those ones, you take a long time, you put in your deposit and then you just sit and wait and hope. Speaker 1 [00:03:13] Let’s actually let’s stay on EVs for a second there, on our show we’re very interested in the transition to a net zero economy, and EVs are a huge part of that. But as you said, you know, prices are going up, wait times are super high. But I read that you mentioned in another interview that monthly searches for EVs on Canada drives have doubled between January and June. Are those searches translating into sales? Speaker 2 [00:03:36] They definitely are. We have to have the vehicle for someone in order to actually purchase it from us. So a big focus for our team is making sure that we’re sourcing quality used vehicles that Canadians wants. And Canadians definitely want electric vehicles right now. And what we’re really seeing is there is this tight correlation on our platform for those searches of electric vehicles. Along with those fuel prices. We see this overall demand just is growing. But when fuel jumps by 30% in a month, we see it almost 1 to 1 with the searches on our platform. Speaker 1 [00:04:13] That’s wild. My partner and I, we got an electric vehicle fall of 2020. So we feel very lucky that we got in just before all this craziness. But let’s talk about your platform for a moment and generally how you think about the customer experience of buying or selling a vehicle. How does Canada drive enable car buyers and sellers in this particular environment, especially in contrast to the dealership model? Speaker 2 [00:04:38] One of the challenges that people have right now is actually understanding what vehicles are available. So that’s one of the things that we kind of answer for customers right off the top. You go on our platform, you can see this vehicle is here today, you can buy it. This vehicle’s coming soon or there’s potentially a sale pending on it so you can get notified of. Someone changes their mind, but you actually have a good understanding. If I want a car, I can buy this car. The experience for the customer. We really try to take the best parts of buying a car and put them online and then take away all the things that people don’t love about shopping for a car. So some of those things are time and convenience. So going into a dealership, spending multiple hours and this is an hour’s really discovering if it’s the right car, it’s a lot of time just waiting, whether it’s waiting to do the test drive, waiting to figure out the price, waiting to figure out the financing. You’re getting a 50 minute test drive. That’s where the actual discovery of the product is on our platform. Everything’s available for you. So no haggle pricing. If you need financing, we’re going to facilitate that. It’s going to be all there. It’s going to be transparent. This is the rate. This is the payment. The control is all the way back to the consumer. So if you don’t like the offer we have for the financing, you don’t like the price of the vehicle, you close your browser, you’re not captive to the shopping experience. The other big part of it, too, is people have gotten used to buying everything online and really vehicles were sort of that next step. Tesla pioneered it with that direct to consumer for the new vehicles. They had to have the single pricing, no negotiation dropped off at your door. People loved it. They didn’t miss that part of the shopping experience. Same thing with Canada drives. When you say, yes, I want to purchase, it’s going to be dropped off at your door. And the biggest thing that people said like, well, if I’m buying a car online, what if I don’t like it because it’s a big purchase and totally empathize people with that? We have a seven day leave it to return it guarantee, drive it for seven days, take it to work, drop your kids off at school. If there’s anything you don’t like about her, maybe it’s just the color you like. I want a different blue. We’re going to come pick that vehicle up. And so we really say that this is superior to the standard 15 minute test drive, and that’s been the sentiment we’ve been hearing from customers to that. Speaker 1 [00:07:00] So while that goes against all of the orthodox of, oh, you know, the moment you buy a car and drive it off the lot, it loses 30% of its value. And here you are like, actually, I can return it after seven days. So that’s a crazy look. Mind shift to. Speaker 2 [00:07:13] Me. Yeah, it’s something people really love and they’re like, Really? They’ll do that. Yeah. Speaker 1 [00:07:17] Yeah. So it’s a great time to sell your vehicle if you’re looking to sell it. Actually, if we want to sell our car today, we could sell it for more than we bought it. And that’s the thing, the same from a lot of folks. But what advice would you have for people who are looking to buy right now and feeling, you know, overwhelmed and frustrated with the high costs and low inventory? Speaker 2 [00:07:35] I don’t think and myself as a driver of cars as well as the seller of cars, I can’t really say there’s a crystal ball like prices aren’t going to fall off. I don’t think that’s what anybody’s saying. So if you need a vehicle, you need to buy a vehicle. If you’re trading in a vehicle, as you said, you’re going to get top dollar for that trade in vehicle as well. And so it’s really about doing your research and making sure that you’re getting a vehicle that fits for your lifestyle. Because the only way that it doesn’t really work out is if you’re having to switch cars every couple months and sort of that friction there, but buy one of the vehicles, see if it works for your life. If it does, awesome, if not, return it. And it’s probably worth touching on too, because on our platform you don’t need to be a buyer of a vehicle to sell us a vehicle. So something that’s been really popular is you can go and can drive, so you can input the information of your current vehicle, the kilometers, the condition you’re going to get an instant online quote. You can say, yeah, I want to accept this and we’re going to come pick up your vehicle and transfer money to your account. And this is awesome, especially for families that said, hey, we needed three cars. Now two’s fine. Or maybe we’re at two, we need one. So it’s just a really good opportunity to have that information. Even if you’re choosing to buy a vehicle from somebody else, you know, hey, can you drives will pay me this for the car. Speaker 1 [00:08:55] Cody As we wrap up, looking at all the flux in the market and projected shortages going into next year, possibly the year after, how do you see business models for car purchasing sales changing for the future? And what’s the role of technology as we move forward. Speaker 2 [00:09:11] The next decade and even the next year or two? I think it’s going to be really exciting for car shoppers. Platforms like ours really force everyone to take notice. If people want to transact this way, well, everyone’s got to say, okay, well, am I going to lose out on those customers? Are we going to make some adjustments? What we really see is technology taking a lot of the friction out of there, bringing transparency, allowing people to trade in their cars more easily, not spend that time. And I think it’s going to be a win for all consumers. Speaker 1 [00:09:40] That’s a really good note to end on. Thanks so much for being on the 10 minute take, Cody. Speaker 2 [00:09:43] Hey, thanks for having me. Theresa. Speaker 1 [00:09:46] So, as we heard from Cody, the vehicle market is going through a transformational phase right now fueled by high demand, high gas prices, and Canadians desire for cleaner transportation and with global shortages, not really showing any signs. Signs of lessening. Canadians can probably expect to wait a little while longer for that new car smell. That’s it for this week’s ten minute take. Join us again next week for another ten minute take on carbon offsets. What are they and what should Canadians know before purchasing them? Until then, I’m Teresa Do. Talk to you soon. Speaker 3 [00:10:20] Disruptors, The ten minute take is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by Jar Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit our RBC dot com, slash disruptors.

Speaker 1 [00:00:01] Hey, it’s Theresa. It’s now the first full week of July, which, for many families across Canada, means time to hit the roads or jump on a plane. In this special encore episode of Disruptors, we revisit a conversation John and I had with Hussain Faisal, CEO of SnapCommerce, just before the March break about his flagship travel e-commerce product, SnapTravel, as well as some of the challenges facing an industry that’s struggling to keep up with exploding demand. Have a listen. Speaker 2 [00:00:35] Hi. It’s John here. And. Speaker 1 [00:00:36] Hello, it’s Theresa. Speaker 2 [00:00:38] Theresa, you know, we’ve had a lot of false starts through this pandemic, but as we tiptoe into the spring of 2022, it really does feel like things are taking off. Just look at airports over the recent March break, people in big crowds heading off to all sorts of destinations. And I’m really intrigued by the rise of it’s almost reverse flight shaming. All my friends who are flying off to destinations far off are kind of mocking people who are stuck back at home. It wasn’t so long ago when they were being shamed for getting onto an airplane. Speaker 1 [00:01:12] I actually love flying. I love getting to the airport early, sitting in the lounge with a glass of wine and a nice book or a magazine and me to start a vacation. But my partner and I, we went to the Caribbean a few months ago, and the requirements just getting into the country were extremely stringent. Multiple documents, validation portals and vendors that you got to go through. It’s stressful, but hopefully opening up soon and starting to fuel up normal again. Speaker 2 [00:01:37] One of the false starts I mentioned last fall, I did get into the air again. I went to London, England to run in a half marathon. Speaker 1 [00:01:45] Awesome. Speaker 2 [00:01:45] And it was the first flight I had been on in ages and found it really unnerving. And of course, it was chaos at the airport to get onto the plane. All sorts of procedures that people were just not ready for. So maybe we’ll all just adjust back to to flying and traveling as quickly as we’ve adjusted to other things. Speaker 1 [00:02:04] Like let’s just setters and we’re not alone either. New data from RBC Economics just released mid-March confirms that travel spending has finally touched pre-COVID levels. In Canada, though, domestic tourism still outpaces international travel, of course, and the changes to Canada’s entry requirements meant an immediate bump in Canadians booking these long delayed trips abroad. And it’s also spurred international travelers to consider Canada once again. But, John, rising prices and geopolitical uncertainty definitely puts some of that momentum at risk. Speaker 2 [00:02:34] Well, I saw right, Theresa? I mean, we are seeing anything but normal in the new normal. We’re seeing inflation that very few predicted. Maybe it will ease through the year, but there’s no indication that it’s going to drop precipitously. The Russian invasion of Ukraine has rattled global markets and disrupted air travel as well in a significant part of the world. The next few months are not only going to be curious to watch, but they’re going to be a real test for the travel industry. There’s no doubt a lot of turbulence ahead and with a lot of innovation. And we’ve got a great conversation coming up about how those tensions may get resolved. This is Disruptors, an RBC podcast. I’m John Stackhouse. Speaker 1 [00:03:25] And I’m tryin to raise the dough. In this episode of Disruptors, we’re looking at the return of Travel post-COVID and exploring how everything from technology to global politics will affect how we travel this year and beyond. To help us on this journey, we’re speaking with somebody with his finger on the pulse of Canadian wanderlust. Hussein Faisal is the CEO of Toronto based SNAP Commerce, its flagship product. Snap Travel is an AI powered half bot half human service that helps customers book hotel rooms, flights and car rentals through their website, as well as through SMS, Messenger and WhatsApp. Husain and his business partner and Rishi have raised more than $100 million over the past five years, including a 2018 investment from basketball superstar Steph Curry. Hussain, welcome to Disruptors. Speaker 3 [00:04:18] Thank you for having me. Speaker 1 [00:04:20] So last year was a good year for snap travel, over $1,000,000,000 in sales, but it’s been too long years of little to no travel for most Canadians coming out of the pandemic. What’s been your biggest learning about how travel is restarting and changing? Has anything surprised you? Speaker 3 [00:04:36] Yeah, so actually a lot of time to have this conversation. The first thing I tell people actually catches them quite a bit by surprise, and it’s that COVID had almost two years ago. There was obviously a huge drop in travel and everyone kind of froze. But just a few months after that, we saw that U.S. domestic travel picked up. So obviously, the international travel has completely changed with all the restrictions. And I’m on being nervous. Even people within the U.S. might say, you know, flying across the country, that was an issue, but people stayed locally and they were traveling. So in Canada, we’re a bit more conservative and we didn’t travel as much. But in the US, domestic travel picks up after just two or three months. That completely surprised me. I mean, we actually saw us getting up to almost pre-pandemic levels just a few months into the pandemic, which is a little bit crazy. Speaker 2 [00:05:24] Saying do you think that’s a fundamental difference with Canadians or are we just kind of a beat or two behind where Americans were and maybe are? Speaker 3 [00:05:32] Well, there’s a couple of things going on. So first of all, I think it’s just Canadians being more conservative than Americans. That’s just the way it works. I think there’s more people in the U.S. who just didn’t believe in the virus, didn’t care about the virus, then let’s stop them. And then secondly, I think just the geography of the U.S. and just a lot of places where Americans can go. So and there’s a lot of cities where you can go to nearby beach towns and nearby vacation spots. And there’s just more of that geography and more of that of that. Hey, I can drive under 100 miles and I can go somewhere and get away. Whereas, you know, we’re a little bit more spread out and maybe don’t have so many destinations to be able to do that. Speaker 1 [00:06:10] Did you notice an impact when the Federal Government announced that there were relaxing COVID testing requirements? Speaker 3 [00:06:17] Yeah. So that was almost instant. So we looked specifically at Canada and you look at international travel. That’s where as soon as those types of announcements come in, you see the changes almost immediately. So you see search volume go up, you see international travel go up versus domestic as a ratio. And then the other thing you also see is how far in advance people are booking. So people used to be pretty nervous and they would say, hey, I’m just going to wait and then maybe book a day before or two days before. But as things start to open up more and more now, people are starting to plan further in advance and they’re saying, I’m going to go plan for the next holiday and the next holiday and start booking way in advance. Speaker 2 [00:06:57] So who’s saying there’s so much we want to talk to you about, but I wonder if we can get a sense of snap travel story. Give us give us a sense of the business model and where you’re going to take it as consumers get back on the road and in the air. Speaker 3 [00:07:10] So the business started about five or six years ago, and when we started the company, we just started to snap travel as we’re talking about today, which is really about helping customers save money on hotels and giving them that great service. Right? So our customer will come in, they’ll have a conversation with us, similar to if you were talking to a travel agent, you can get some great deals. Then we make sure we use messaging to maintain that relationship with the customer, offer them a great service, be there for support and just build that relationship over time. What we have actually been working on and what we’ve expanded into in the past couple of years and as we talk to our customers is they’ve been looking not just to save money on travel, but looking to save money, needing to save money in other areas as well. So we’ve actually sort of expanded into what we call snap commerce now a sort of a parent company. And we’re on the verge of releasing some pretty exciting stuff around shopping and around fintech and helping our customers save money across everything they buy. But the core travel business is one that continues to do well and continues to grow. So you referenced sort of a billion in sales that sort of, you know, cumulative over time. We’ve sort of got to that point with almost half of it just coming last year. And that business continues to grow. And now with the easing of restrictions and with people being with COVID, sort of hopefully the last time, now, you know, going away, we’re seeing that demand pick up. I was kind of looking at that same survey stats earlier. And, you know, 67% of people plan to take a trip in the next four months. So, I mean, there’s three of us here and I’m planning to take a trip for the next four months. And I guess one of you, hopefully one of you are as well to prove the stats that I have. And one in five will plan to take two or more trips in the next four months. So really is an exciting time seeing travel open back up. Speaker 1 [00:08:52] Staying on your platform for a second, I’m really curious why you chose to go down the road of a relationship based travel approach, because it seems to me that we went from a period where we relied on travel agents to help us get these deals booked, but then we shifted to a largely DIY looking at the aggregators like Expedia and building our own itineraries. So why did you choose to go back to that travel agent approach? Speaker 3 [00:09:16] Yeah, so I would I would think of it more as a hybrid, right? So I would say the major misconception that people have when they think about travel over messaging is that we are this like ultimate travel bot that has great natural language processing technology and can read your mind and you can say, Hey, I want to stay at a nice four star boutique hotel in New York and we know exactly what we want and give you a great recommendation. That’s just not how it works, because I don’t know, you do research and when you’re searching for New York, I don’t know exactly what you’re looking for. And even if I knew what you were looking for and I gave you a recommendation, you probably still want to see all the options, right? So I want to see let me see, because I don’t know the tradeoff between price, location and quality. So we use messaging as sort of an entry point. And if you’ve used the service, what you’ll see is very quickly we take you to UI where you can use filters and you can see a map and you can see a list and you can sort of pick the hotel that works for you where messaging is helpful because it allows us to do some very interesting things, right? So after you’ve run your search in New York, we can continue to track deals for you. So if we find something that pops up and we know you’re interested in it, we can send you a message and say, Hey, Teresa, we know you were looking at this hotel. You know, the prices dropped 20 bucks. Go take a look at it. Right. Do you have a specific question? You can just pick up your phone and say, hey, I have a question. You know, during COVID, this is actually a huge benefit for us because there are a lot of people who wanted to travel, but they were nervous and they wanted to know what’s the COVID protocol, what’s the even or even or refund policy is right there. Hey, what’s the refund policy? What happens if I get COVID right? So messaging is great for retargeting. It’s great for continuing the conversation. It’s a great for support, but it’s not necessarily better for the initial search. And in browsing like a user interface is the best way to search and browse and we continue to do that. So messaging is sort of that hybrid approach that we use. Speaker 2 [00:11:00] If you give away the secret in your secret sauce of saying what? What is it? Speaker 3 [00:11:06] I mean, we’re super data driven company. I would say everything we do is around looking at data to help us optimize everything and we then using that approach and just continuously optimizing. So that means optimizing supply. You know, what are people searching for? Let’s go and get the best supply of their optimizing demand. What the best demand channel can we match that optimizing product where people are dropping off in the funnel? All right. And maybe if I sort of go back to that messaging approach that we talked about earlier, that’s an example. Right. So initially it was all messaging. So you can then say, hey, I need a hotel in New York. And then we would say, okay, well, you know what kind of hotel you’re looking for? Do you prefer boutique hotels or chain hotels? But like, okay, what’s your price range? We would ask all these questions to try and give you the perfect recommendation. But when you look at the data, every additional question you ask just results in more drop off. Just show me. Show me why you don’t like don’t keep asking me questions. So so you know, we said okay. Well, why don’t we you know, if someone says, hey, I want a hotel. Only now is really your city and your dates and like, you got to cure all your options. Go take a look. And we’re glad to use messaging to answer any questions or to be able to target or have a conversation or do things like that. But the data driven approach tells us to stay focused on getting the customer a great deal and getting them that deal as fast as possible. Speaker 1 [00:12:16] So something that is really cool with the app is there’s an option to layer in food and nightlife and other different aspects of cities. And the way that it manifests on the platform is through a heat map, which I thought was really interesting. So if I’m looking for a hotel in Chelsea, New York, I want to know, okay, is this hotel going to be close to where I can get all the great foods that I want to eat while I’m in New York? And as you were putting together the platform and as you’re continuing to evolve the how are you taking into account changing consumer preferences for travel? Speaker 3 [00:12:48] Yeah, I mean, that’s a good question. And maybe that goes back to what I said about being data driven. So we’re always, always, always talking to our customers, even when we do have any idea. So like, let’s say the heat map, right? So you would think that the heat map are a great feature and the reality is that it is, but we don’t take anything for granted. So if we want to put on a heat map, we’ll go and AB test mosaic and let’s have the traffic bill, the heat map, half the traffic will run without the heat map. And then we’ll sort of see what happens. We’ll see the conversion rates. Our friends will see their facilities, their friends. We’ll see the repeat rate there for us to be customers come back again. We like the experience. So it’s talking to customers, keeping an eye out for what sort of product innovations out there, but ultimately being data driven and seeing what sticks and what doesn’t. Speaker 2 [00:13:30] Suzanne, tell us a bit about how you see the travel industry model and where you want to position yourself. Something I found always fascinating about travel is in some ways it’s a fixed pie. There’s a certain number of people and only so much we can travel. And therefore, over the decades we see vertical integration or attempts at diversification. Are you looking at vertical integration, looking for different kinds of opportunities in travel, or do you see it’s now travel’s future maybe outside of travel? Speaker 3 [00:14:01] Yeah, I mean, we’re looking outside of travel and not for any other reason. And that’s really what our customers are asking the sport right to our customer just saying, hey, you just got me a great deal in a hotel. But what I could really use is to save money on X and save money on Y, right? And that’s sort of where we’re leaning towards. And moving to other verticals, specifically on your comment about the travel industry and sort of it being a fixed pie, I think that some of that’s sort of true but also changing and that we have customers now, or at least the new generation who are wanting to spend more money on experiences than spending money on things. You’re seeing almost like a shift in percentage of disposable income that gets spent on travel and experiences, which is different with previous generations. It’s like, okay, I’m going to have this much money to spend on trips, are going to go on one trip a year or whatever it is. And now the new generation saying, you know, I’m not going to own a house, I’m not going to own a car, am going to, you know, take the disposable income I have and spend it on trips and experiences. So that’s happening. And then secondly, I think that people are even doing more local trips and I think COVID actually accelerated that. Right. So before when you would say, hey, I’m only going to go to one or two trips a year because you typically be thinking about getting on a plane and going somewhere. And now with COVID, there was this period of time where people were okay traveling, but they didn’t want to get on a plane, so they would start to take more and more local trips. So you started to see this change was like, Hey, I can go on one or two local trips here and I don’t want to international trips here. So we are starting to feel like it is expanding. Speaker 2 [00:15:32] Coming up after the break, more of our conversation with Hussein Feisal. So stay right here. Speaker 1 [00:15:38] Please take your seats. What you’re listening to, Disruptors and RBC Podcast. I’m Theresa Doyle, RBC Economics and Thought Leadership recently published a report called Equal Measures Advancing Canada’s Working Women in a Post-Pandemic Economy. And it will look at the importance of boosting women’s pay and participation in the labor force and tackle some of the possible solutions. Among them establish greater parity between maternity and paternity leave, and reduce the financial burden of taking parental leave. Create more opportunities for upskilling and pathways for women into senior roles, and recruit more women into the skilled trades. To learn more, check out the link in the show notes of this episode and visit RBC Dotcom Thought Leadership and be sure to follow disruptors wherever you get your podcasts. Turn off all electronic devices. Speaker 2 [00:16:31] Welcome back. We’re talking with Hussain Faisal about the return of travel coming out of the pandemic, as well as some of the storm clouds on the horizon that could disrupt the recovery. We can’t talk about travel without recognizing what’s going on in the world and specifically the war in Ukraine and what that is doing, not just to that country and the region, but the disruptions it’s causing globally. Flights are being rerouted. That’s probably the least inconvenience out of this, certainly from a Ukrainian perspective. But oil prices way up. How do you think that’s going to impact travel? Speaker 3 [00:17:07] It’s obviously super sad and super unfortunate to see that happen. I mean, when this started, we actually blocked any hotel bookings in Russia. We blocked anyone from making bookings in the currency. It’s just extremely sad to see that type of unprovoked aggression in our hearts out to the to the people in Ukraine. And again, we’re seeing some increase in gas prices. We’re seeing some changes to inflation. But I think, again, all that stuff normalize over a longer period of time. So I’m not I’m not too concerned about the long term ramifications of that right now for us, or at least the way I think about personally is just obviously, no one wants this war to continue. And we’re sort of our hearts are with the people of Ukraine. And that that’s the most important thing. Speaker 1 [00:17:48] As we are coming out of the pandemic. Very high inflation and high costs or something. This tension between the fact that it is frankly getting much more expensive to travel and yet we all still want to do it because of the pent up demand of the last couple of years. So from your perspective, how sensitive are Canadian travelers to price increases and who is actually doing the traveling this year and next? Like who can afford to? Speaker 3 [00:18:11] Yeah, it’s you know, first of all, I would say it’s not just Canadians. I would say everyone is price sensitive. It has been some very difficult times for people in COVID. And there’s definitely a large segment of the demographics that have had a difficult time during COVID. And now saving money is even more important. And then and then the opposite of that sort of what you mentioned is that we see prices starting to go up because there’s all this pent up demand and people have been waiting. So. So I would say there’s definitely a demographic that has been saving money as that pent up demand and is ready to go. And then, unfortunately, there’s another part of the demographic that is now in some ways somewhat priced out. I mean, I expect we’re going to see things normalize. And I think that over the next 6 to 12 months, we’re probably going to see a lot of people traveling like way more than usual to make up for them. For the past two years. I mean, one of the one of the most interesting stats I have for you is that typically on any given night, about 30 to 40% of hotel rooms across the US go empty. So that means there is excess capacity and obviously it depends where you’re going. There’s some boutique hotels, a fancy Boujee beach that are going to be sold out every single night for an entire year. But if you’re going to Vegas, where there’s tons and tons of hotel rooms or you’re just a lot of places across the States and even across Canada where there’s just a lot of supply, you’re going to have empty hotel rooms. So there are rooms available and eventually the market’s been to normalize. These hotels are going to look to maximize their revenue to fill up those beds. The biggest tip, I would say, in terms of booking is just kind of really being aware of the booking windows and knowing how far in advance to book. So often you’ll get the best deals when you’re booking 2 to 3 weeks in advance when you wait to last minute, could have a chance. But there’s also a risk there that, you know, you end up with hotels that sell out or end up filling up. And when you book too far in advance, you’re probably not leaving yourself the opportunity for a hotel to say, Hey, it looks like we may not be at capacity. I think we’re going to we’re going to do a price drop over here. Right. So. So ideally, you can you can sort of book 2 to 3 weeks in advance of your booking well in advance. You’re doing that with a good refund ability policy. So if you see a price drop, you can go and say, I’m going to catch my booking and rebook. Speaker 2 [00:20:21] Hussain You mentioned Canadians desire to travel internationally. And of course a lot of people, not just Americans, but Europeans and Asians, are going to be traveling again. How do we get them and how do tour operators and hospitality operators get them coming to Canada and spending more time and money in Canada as the world opens up? Speaker 3 [00:20:39] I think that in general, as a country, we probably need to do more. One of the things that I was really excited about, and this is about four or five years ago, MGM was going to come here and they were going to come to Toronto and they were going to build out a complex. They were going to build out a casino. They were going to build a theme park. They were going to build sort of a water park. They were going to build, you know, a mall meeting rooms. They were going to build a train from the airport straight to the MGM property. That’s the type of stuff where you can say, Hey, now. Now there’s a whole other reason to come to Toronto and make this destination. Unfortunately, in order for MGM to do that, they wanted to obviously have a casino in place. And that’s something that the city ended up rejecting, which is very disappointing because, I mean, I understand some of the problems that come with having a casino. And I think there probably would have been some ways to mitigate those problems. But net net, you talk about a major company like that. Again and putting in a major infrastructure project that makes Toronto more of a destination so that at a country level or even a city level, we need to start thinking about doing things like that and building more of this infrastructure. Speaker 1 [00:21:56] One of the great gifts that the pandemic gave us gift circuses, has been just the ability to connect with people across vast distances through a screen. To what extent do you think business travel will come back, and how do you see airlines, airports, hotels changing their business model now where they previously relied on that lucrative business traveler? Speaker 3 [00:22:19] Yeah. So this is this is an interesting question that we talked about. So I can tell you internally how we think about it. So we are now approaching 200 employees. We are about to 60, 70% here in Canada, but 30, 30, 40% in the U.S. and globally. These are just executives who used to travel quite a bit. I used to travel almost once a month to New York, to San Francisco. And obviously in the pandemic, it was almost two years of almost no business travel. I just recently I made a couple of trip to New York and San Francisco. What it feels like is that some business travel’s going to pick up. There’s still no replacement sometimes for having dinner with someone or meeting in person, but I just don’t think that’s going to be at the same scale as before. So I expect that a lot of staff and a lot of meetings can just happen online, but that’s like deep relationship building of those strategic partnerships. That’s the type of stuff that I think is going to happen in person. Speaker 2 [00:23:14] Hussein As we move towards close, I wonder if you could share some parting thoughts on how we as travelers may be changing? Something that fascinates me about travel is that it brings humans together. And we probably all long to be on those crowded streets in Manhattan or even those awkward moments of being squeezed between people getting to their seats on an airline or trying to find a spot on a crowded beach or a seat at a crowded cafe. And yet, after two years of pandemic, all that kind of seems weird now. Is that going to be the normal again any time soon, or are we, as a traveling species, going to be a little different coming out of this? Speaker 3 [00:23:55] I think that’s I think it’s a little back to normal. Some some lifestyle changes have happened. Like there’s been people who move from downtown to the suburbs and people who are, you know, have more space and maybe are working from home cause they’re just not going out as much. But I think the next time you’re going to get into a crowded coffee shop or a crowded beach, you’re not going to think twice about it. Speaker 2 [00:24:12] So if I hear you correctly, what you’re saying is I’m going to have to stand elbow to elbow with people again to appreciate a painting at the at the moment. Speaker 3 [00:24:19] I think so. Speaker 2 [00:24:20] I think all of I’ll look forward to that moment. Hussein, thanks so much for being on RBC Disruptors. Speaker 3 [00:24:26] No problem. Thank you for having me. Speaker 1 [00:24:29] John. That conversation has me itching to plan my next trip, maybe even with an AI powered chat bot. I really love the optimism that Hussein had about where travel is going and the opportunities we might have to travel. Given the changing nature of work, that extra flexibility means that you might be able to do two weeks in a far off city as long as you can check into your computer every day and get your deliverables done. And at the same time you’re in a new place. You can close your laptop and then go out and explore a new city and eat great food. I always comes back to food for me. That’s what I’m really, really jazzed about. How about you? Speaker 2 [00:25:07] Yeah, it makes me want to get on a plane probably 2 to 3 weeks from now. But I also realized how technology really is changing travel. Not in the ways that maybe some of the extreme thinkers thought that we’d all sit in our basement with our VR goggles on and go places without having to leave home. But it’s technology that is optimizing the ability to travel for all of us. It’s not only making it more affordable and accessible, but as Hussein was saying, we’re getting better and better deals. Maybe not as good as we’d like all the time, but with technology getting better, the opportunity to travel will improve with it. Speaker 1 [00:25:48] This has been a special encore episode of Disruptors. We hope you’ve enjoyed it. Next week, join us for the latest tech and innovation buzz with our ten minute tech series. Until then, I’m Theresa Do and this is Disruptors, an RBC podcast. Talk to you soon. Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit RBC.com slash disruptors.

Speaker 1 [00:00:01] Hey, it’s Theresa. You know, one of the major challenges we have in this country is figuring out ways to unlock our full economic potential, while at the same time ensuring that this prosperity is sustainable. Last fall, RBC released a report called The $2 Trillion Transition. It talked about the generational challenge of climate change and how Canada will need to bring together financial firepower, smart infrastructure, and a whole lot of innovation and ingenuity to power the green transition. But to find those new paths to net zero emissions, we need a new map for economic development and how these big investments are made. An indigenous capital is key to getting us there. That’s the focus of a new report just released by RBC Economics and Thought Leadership. It’s called 92 to 0 How Economic Reconciliation Can Power Canada’s Climate Goals. Financing and access to financing has been a huge stumbling block for many indigenous peoples wanting to develop within their territories. We’re going to talk a lot about that with our guests today. But the concept of indigenous capital is about much more than money. It’s about a holistic approach to development and looking at the full wealth of resources that should be involved natural capital, land, water, air as critical, of course, as the development of more green infrastructure depends on consent before accessing indigenous territories. So too is incorporating indigenous values and traditional knowledge in the green transition, and that’s called intellectual or also cultural capital. But none of this is possible without people. Human capital will be the foundational piece, as we need to empower the next generation of indigenous leaders and entrepreneurs to fuel the screen transition. Indigenous youth are the fastest growing youth cohort in this country, and business ownership is increasing at nine times the rate of non-Indigenous ownership. We have a real opportunity to build up Indigenous skills that will be required for major projects. Indigenous communities must have a say and a share in development. Only by truly embracing their leadership and wisdom do we have a fighting chance to find that path to net zero. This is Disruptors and RBC podcast. I’m Trinh Theresa Do. In this episode of Disruptors, we’re looking at the vital role indigenous communities can play in our net zero transition and to help us build a new model for development. After the break, we’ll meet an indigenous leader who is balancing economic prosperity and environmental stewardship. In doing so, she’s creating opportunities not just for her people, but for indigenous communities across Canada. But first, we’re going to dove into the challenges facing indigenous communities that want to control their own economic destiny and do so in a way that encourages sustainable prosperity for all Canadians. The need for a new approach is obvious, and that’s what motivated a group of 25 indigenous organizations to develop its National Indigenous Economic Strategy for Canada, which was released in June. We talked with one of the Indigenous leaders who helped draft the strategy. Speaker 2 [00:03:27] I’m with Bobby Leach and I am the general manager of the Agritech Business Development Corporation, as well as the Chair of the National Indigenous Economic Development Board. One of the things that our National Board worked on was the first ever OECD report on Indigenous economic development. They did the global report and three country reports. One country was Canada. And so in the Canada Country Report, it was released in January 2020. That report recommended that Canada needs a national indigenous economic strategy. We’ve gone through exercises in the past where the governments put together a national indigenous economic strategy. And after many rounds of meetings with our people and practitioners, get a strategy that did not reflect anything that we said. So we said, this time we’re going to hold the pan in developing this strategy, because even to this day, people ask, what is it that you want anyway? What do you what do you want to accomplish? So we decided to put together this road map. And what’s needed to actually achieve economic reconciliation in this country. We felt that it was really important that we develop that we hold a plan that is structured around four strategic pillars of people, lands, infrastructure and finance. So these are the critical areas that involve the collaboration of more than 25 national indigenous organizations for the first time working together on one initiative like this. By developing this strategy, we’re showing other indigenous peoples around the world that they should also take hold of the narrative. They should be the ones coming up with the solutions that will best address their needs. That you can’t have external governments doing this for you. When indigenous people are engaged, the whole country benefits. We know it’s been proven time and again that when indigenous communities prosper, so do the regions around them. Speaker 1 [00:05:30] This new indigenous economic strategy could boost Canada’s economy by $30 billion. It could also reduce poverty among indigenous meeting and Inuit communities, creating more than 100,000 jobs that can generate $7 billion in employment income. And these are important recommendations focused on harnessing the skills of indigenous peoples and tapping into their environmental stewardship. The need for a new approach looking at economic and financial strategies through an indigenous lens is also what motivated that new RBC Economics and thought leadership report we mentioned off the top. And to chat a bit about it, I’d like to welcome my colleague Cynthia Leech, who’s the report’s lead author. Cynthia is an assistant chief economist here at RBC and helps shape the narratives and a research agenda around our team’s economic and policy analyzes. She consulted with indigenous leaders and organizations across the country over the past several months to glean their insights and perspectives. Speaker 2 [00:06:26] For the report. Speaker 1 [00:06:27] Cynthia, welcome to Disruptors. Speaker 2 [00:06:28] Thanks for having me, Theresa. Speaker 1 [00:06:30] Let’s start with a simple question or a seemingly simple question. Why did we create this report now? Why is this focus on capital and a new way of looking at capital so important? Speaker 2 [00:06:42] Well, we’re all talking about what’s needed for the net zero transition. And a lot of those conversations has focused on the money or the $2 trillion in investment Canada needs between now and 2050 for net zero. But that’s really only a narrow slice of what’s needed. We’re also going to need to build a lot of infrastructure so access to natural capital and we’ll need a whole lot of innovation. So access to intellectual and human capital. And when you think about it in that more complete sense, it’s clear that indigenous peoples in Canada are key sources of that capital and so will be essential to shaping our collective journey to net zero. Speaker 1 [00:07:21] I’ve been slowly reading a book reading Sweetgrass over the last several months, and the author, Robin Wall Kimmerer, describes the act of braiding as showing loving care to Mother Earth, as well as kindness and reciprocity between the people doing the breeding. And this is a concept that you include in the report. Can you share why you decided to include it and why breeding is important? When we talk about indigenous capital. Speaker 2 [00:07:45] Absolutely. I’ve come to I’ve come to learn that for indigenous peoples, breeding is a sacred act. It’s bringing together disparate things that together are a lot stronger. And it to me was an incredible metaphor for what we discovered on indigenous capital that to achieve net zero, we need to bring together these strands of indigenous capital and non-Indigenous capital for the transition. So natural capital, financial capital, intellectual capital and human capital. And the way we do that, the way we bind it together is through true and deep partnerships. And that means recognition of Indigenous rights, perspectives, decision making. Speaker 1 [00:08:22] I think that is such a beautiful visual and really accessible. Too far to, as you said, underline the importance of the partnerships among us and a natural capital. As you mentioned, it’s all about land, water, the air that runs through indigenous territories. And getting access to those natural resources will be critical as we make the net zero transition, especially in building out renewable energy infrastructure. But these sorts of developments are complex and not without controversy. So how do we navigate the thorny questions surrounding development on indigenous lands and ensure a meaningful engagement and informed consent? Speaker 2 [00:08:59] Well, first of all, let’s just recognize the way in which our clean energy development will overlap with indigenous rights and territories. We did some analysis and found that at least 56% of the $60 billion in new critical mineral advanced projects would involve indigenous lands. And when we looked at the solar and wind resources needed for Canada’s renewables build out, about 35% of the top solar sites are near Indigenous lands and 44% of the better wind sites. And these are bottom estimates that there’s going to be a lot of other indigenous rights implicated in Canada’s infrastructure development, and so engaging with Indigenous communities is absolutely needed. The challenge has been that over the last couple decades or more, as there’s been increasing legal recognition of indigenous rights and the need to consult Indigenous peoples, that consultation and engagement hasn’t been done in a meaningful enough way. Too often, project proponents and others have essentially sought kind of check box agreement on already planned projects that didn’t integrate indigenous perspectives and priorities from an earlier stage. And that’s absolutely going to have to change. For one, the legal framework is strengthening, and there’s the implementation coming of the United Nations Declaration on the Rights of Indigenous People and other factors that are moving us closer to meeting Indigenous consent. The challenge is consent to the legal concept and we need a practical definition of what that means. In Canada, we know it’s more so a process of meaningful engagement, of incorporating indigenous perspectives and priorities and decision making of Indigenous rights holders. We know it involves early engagement and meaningful incorporation of Indigenous perspectives and decisions of Indigenous rights holders. But we’re still defining what true partnership looks like. Speaker 1 [00:11:01] And a big part of that, too, is access to financing. And of all the types of capital that. Speaker 2 [00:11:06] You. Speaker 1 [00:11:06] Explore in the piece, that has to probably be one of the toughest nuts to crack. So how do we need to think differently about that and project partnerships with indigenous communities? Speaker 2 [00:11:17] So one thing that’s happening in terms of rewriting what partnership and co-development looks like is increasingly indigenous communities are looking for equity ownership and project development, and this is for Indigenous communities who are looking for durable benefits and wealth building opportunities that can outlive the lifespan of the project. And it’s also in the interest, often a project sponsors because it represents a true engagement and partnership reflective of the value that indigenous peoples bring to the table and ultimately de-risk the projects by these communities participation through equity ownership. These structures are becoming increasingly common. What’s been challenging, though, is there’s an equity financing gap for some communities where equity needs to be contributed and communities without resources that they can leverage to get private financing. There’s an equity financing gap and possibility that they missed out on equity ownership. And of course, this relates to long standing challenges for First Nations and other indigenous communities to obtain private financing. Given the challenges under the Indian Act and other vagaries of indigenous rights that have prevented indigenous communities and individuals from accessing capital. And so it’s a challenge that needs to be addressed as we move forward with productive partnership and infrastructure development. Speaker 1 [00:12:42] Those are excellent insights. Cynthia, thank you so much for your time and thanks for joining Disruptors. Coming up after the break, we’ll talk to an indigenous leader who is working to build a new model for major project development in Canada. So stay right there. What you’re listening to Disruptors and RBC Podcast. I’m Theresa Dome. I want to let you know about a new weekly report from RBC Economics. It’s called Proof Point, and it provides original, timely economic insights from RBC Economics and Thought Leadership Team. Find out why demand for cash is at its highest level in 60 years, despite a broad shift. E-commerce. Or learn why Atlantic Canada has become a magnet for new residents. To explore more, visit RBC AECOM Thought Leadership. Welcome back. On today’s show, we’re exploring all the forms of indigenous capital we’ll need to bring sustainable prosperity to Canada. But to fully leverage that capital will also need to challenge some ingrained attitudes about Indigenous communities. As Mark Putt, lastly, director of economic policy at the First Nations Major Project Coalition told us in a recent episode of Disruptors. Speaker 2 [00:14:00] We are from the capital, which is in Central Interior, British Columbia, South Central B.C.. My community has a revenue sharing deal with a mining company in our territory. And when we started to set that up, we did some research to find out how much indigenous capital is there in Canada. And we found just back of the envelope calculations at that time, about $8 billion of assets under management by Indigenous people. And it’s not in one spot. It’s different settlements from either land treaties from negotiations with mining companies or energy companies. We figure now that somewhere between 13 and 18 billion my nation has a fund right now of about 50 million. And we have the ability and the fund to make direct placements into investments that that will grow that fund. Most of these nations do. So the capital is there. The question, though, is that how can indigenous people directly invest in these projects? I think for a lot of the financial sector, they don’t see us as Indigenous investors. The idea of being an indigenous investor seems to be an oxymoron to some of these companies who come into territories and don’t think of Indigenous people in that sense. That has to change. Speaker 1 [00:15:11] Our next guest is intimately familiar with the obstacles faced by Indigenous communities seeking a meaningful stake in Canada’s economic prosperity. Chief Charlene Vale has been an elected councilor of the 811 member Fort Nelson First Nation since 2009, governing a territory in north eastern B.C., roughly the size of Switzerland. She started her career at West Coast Energy, a subsidiary of Enbridge, and brings her unique perspective on how the natural resources sector can work collaboratively with indigenous groups to her role as Chair of the First Nations Major Projects Coalition. Chief Gayle, welcome to Disruptors. Speaker 3 [00:15:48] Hi. It’s a real pleasure to be here on your podcast. Thanks for having me today. Speaker 1 [00:15:52] Thank you. Off the top of the segment, we heard a clip from Mark Hurd. Lastly, a colleague of yours at the First Nations Major Projects Coalition. So, Chief Gayle, the question I have for you is twofold. Do you agree with Mark’s assessment that the industry struggles to see indigenous groups as, quote, investors? And if so, what needs to be done to change those attitudes? Speaker 3 [00:16:12] So in my eyes, there’s still an outdated view on some industry players that view indigenous groups more like a call center on projects, and that we’re still a risk to be mitigated with cash buyouts and other tactics. Sometimes when I look at this, I call it the feeds and blankets approach, and I think there’s a number of people in corporate Canada that are waking up to what I’ve known all along, that indigenous partnerships definitely adds value. Partnering with us increases the long term profitability of a project. It also raises ESG ratings and de-risk investment from unresolved indigenous interests. Another thing that I’ve also noticed is that media has also drawn attention to indigenous conflict on major projects rather than focusing on some of the success stories. Majority of the time. So I know that there are a few media types that are trying to change that. And we’re aware that due to the lack of interaction between the financial sector and indigenous groups on an investment screen basis that media reports are often relied upon and influence the decision making that happens in Canada. I believe that that’s a problem and the First Nation Major Projects Coalition is really trying to solve that. At a recent conference in April, I know that there was a number of industry types that were blown away by how we want to do business by our membership and how our members were more commercially focused. And so we want to get that message out there that our members are interested in partnering on smart development, one that respects their interests and their community interests. And we understand that partnership is also a two way street. I believe the First Asia major project has an important role to play in in hosting this dialog. And I know the more we’re able to do deals that have true indigenous partnership, the more we’re going to change minds from outdated ways of thinking about Indigenous groups as financial partners. Speaker 1[00:18:07] Getting to true partnership also means breaking down some of the systemic barriers to that partnership. And you’ve said in the past about development that, quote, if the bottleneck is access to capital, that the solution is to change the financing system in Canada. Could you share more about what do you mean by that and what exactly do we need to change in our financing system to ensure true partnership? Speaker 3 [00:18:29] Well, there’s currently two things that the Coalition is working on and we’re trying to improve access to competitive capital for Indigenous investment in major projects. And we’re also trying to improve the business readiness to our Member First Nations to take part in opportunities within their territory on improving access to competitive capital. This isn’t just a government problem. It’s a problem that has been borne by all of us. The indigenous communities, the private sector and government all have a role to play for government. I really see this as an opportunity for the federal government to follow the lead of some of the provinces like Ontario, Alberta and Saskatchewan who have established government backed financing support such as the National Indigenous Loan Guarantee Program. Many of our communities don’t have the level of risk capital it takes to get capital markets to provide interest rates at equity style loans. That makes sense. In one case, we experience the internal rate of return of the project was going to be 9% and the cheapest loan we could source was between 12 and 15%. So it just didn’t make sense. And so this caused our members to leave an opportunity at the table that would have provided revenue streams to invest in their in their nations. They could have built homes, they could have paved roads, provide more programs and services that the federal funding that we do receive doesn’t meet the needs of our nations. While we are asking the government to consider loan guarantees, direct financing, support and increase investment in our ability to make informed decision. There’s also a role for the private sector. Indigenous communities offer solid partnership with the private sector. Or I’m doing it in my own community and I see how successful it is just sitting down, having a conversation with my business partner and then bringing the information to the community. I’m learning a lot in my role as chief for my community and chair of the first Asian major projects. And we need to know what to do to start structuring these deals with the private sector and to address this. The coalition created a capital markets 1 to 1 series for our members, and this series is to inform our own lived experiences, negotiating deals as well as providing professional advice. So when we talk about building our own readiness for business and capacity to take on deals at the community level, this is an example of that. Speaker 1[00:20:53] Mm hmm. Yeah, it sounds like it requires a multi-sector approach. I’d like to take the conversation home a little bit and talk about your community. The Fort Nelson First Nation sits in the heart of BC’s oil and gas country. And you’ve talked in the past about how the fracking controversy in the early 2000 was in part what motivated you to get involved in leadership in 2009 and to try to seek a new partnership model with industry and government? Can you talk a little bit about that history in Fort Nelson? Speaker 3 [00:21:21] So I actually started out myself in the oil and gas sector after I graduated high school and I worked at the Fort Nelson gas plant for about 20 years. Oil and gas in our community has, you know, seen many successes in terms of the value of procurement contracts and royalties and open source revenue and equity positions that, you know, we want to make come alive with the new developments that are happening for clean energy projects. We know that this relationship hasn’t always been perfect and the resource boom that happened in 2013, 2014, at least in the state territory, created a lot of land use changes and it impacted on our rights and our way of life. Yes, it brought some jobs and money, but it also brought a lot of racism and division in the communities in the north and it really tax. Starliner members were seeing the vast changes in a short period of time and they were bringing those concerns to our council and to our lands office. And oil and gas also contributed to the industrial activities that harmed our lands and water, and we refer to it as cumulative impacts. And while I believe no one sector was responsible in isolation for all of this, the extensive industrial development that the province of BC approved from oil and gas, forestry, mining, agriculture and other activities altogether over several decades. It has breached treaty and we’ve seen those impacts on the land. It also harmed our ability to exercise our Aboriginal treaty rights and this was confirmed in the High Court case, which some of you may know better as a Blueberry River case. And this has been documented and the judge said we had been ignored. And with this, we’re here as a nation focused on solutions, on a better way forward, as first nations were also diversifying into clean energy development and new energy sources beyond the traditional oil and gas sector. For an example, you know, with Fort Nelson First Nation being the three biggest gas players with the Horn River, the Iliad and the Cordova. It turns out that what makes good gas plays is also really promising for geothermal. And so our community is extremely proud of the two de coeur geothermal project that my nation, the Fort Nelson First Nation, is 100% owner of. And this will be the first fully indigenous owned geothermal project in Canada. We’re looking at it being about a $91 million project with seven megawatts of electricity generation that will provide energy to equivalent of 14,000 homes. And if you come to Fort Nelson, you know, we don’t have 14,000 homes. So there’s a real potential to not only provide power to the city, to the industrial site, the LNG sites, Alberta into the future. And the project is only five kilometers from our reserve. And it’s phenomenal to think that we repurposed an old gas well to supply clean, renewable baseload energy to the B.C. grid. So this is a path forward for oil and gas workers like me to lead the transition and not be left behind if it. I don’t think that we should be scared to get involved in renewable projects. Speaker 1 [00:24:40] I’d like to dig into the geothermal development for just a second. Are there any specific lessons and insights that you’ve learned so far through that process that you can share with other communities? Speaker 3 [00:24:51] So I think it’s really important that people do realize that there’s an energy transition happening. And other than governments and municipalities, indigenous nations are leading this transition. We have a lot of renewable projects, whether that’s solar, geothermal, mining, biomass, you name it. It’s happening in our communities and we’re getting involved more and more. So that makes me really proud. I also think it’s really important that these projects, they don’t happen overnight. I mean, we started this process with the geothermal project back in 2007 and I just the concept talking about it and then the world started changing and we started talking about net zero by 2050. And there was more opportunities coming from, you know, federal and provincial governments in regards to grants where communities could apply for. And that’s what really made this project become a reality, is we received a $40 million grant from the federal government and we were able to start the planning and looking at is this project feasible and really working with our community to identify solutions when we meet challenges. And [00:26:04[15.4s] that we know there is a better path for first nations and Canadians to work together towards these projects. Speaker 1 [00:26:28] Now, there’s a lot of exciting momentum, as you’ve described. And what a possibility for the future. Hoping to ask you a personal question, if you don’t mind, Chief Gayle, what and what inspires you each day as a leader and in your role as does chief? Speaker 3 [00:26:42] So what inspires me is my people and their hope and their vision. And it’s just amazing to see how much we’ve grown over the decades with good leadership and strong vision. Our people are really resilient. You know, I’ve seen them overcome many challenges and anything that we do as a people. Speaker 2 [00:27:04] We. Speaker 3 [00:27:05] Look forward to making decisions for seven generations. We don’t just think of the now, and that’s kind of why I like this geothermal project is for the fact that the Clarke Lake provided for our nation over seven decades and we had a railway going through and all this activity that was happening so fast back in the day. And our people stood up and said, No, not without us. And if they didn’t stand up and say, not without us, we wouldn’t be where we are today with the investments that we have to look after our people. So I’m very proud of that. Speaker 1 [00:27:43] Chief Gayle, you mentioned earlier that there are a lot of lessons that you have that you can share not only with other communities in Canada, but also around the world. And I wanted to dove into that a little bit more. In April, the First Nations Major Projects Coalition, along with your American counterparts, the First Peoples Worldwide, hosted a conference in Vancouver. The focus was on indigenous leadership and opportunities in the net zero transition, with over a thousand delegates in attendance. So what does Canada have to teach the world in finding collaborative approaches to a net zero transition? And perhaps what can we learn from others? Speaker 3 [00:28:18] Well, I think collaboration with indigenous nations across North America and globally is important moving forward towards a net zero future. I envision Indigenous communities working together across the globe to lead this race to net zero. I mentioned earlier we can deploy our knowledge. We have a diversity of values, perspectives to develop real solutions that benefit our communities. Also because we’re not going anywhere. People might pick up theirfamilies and pack up their homes for job opportunities. But our people are going to be living here for thousands of years. And that’s why it’s important. We’re still a part of these projects and we have opportunities living in our territories. So the work of the First Nation Major Projects Coalition is always creating dialog on net zero on indigenous groups in the U.S., in Canada, New Zealand and other places. Some of the challenges that other indigenous communities have in different countries is the same. So I think through these partnerships were able to bring in a number of U.S. tribes, each with tremendous resilience and stories of success, of developing new clean projects and other net zero projects for their communities. And in April, we also hosted the Mallory from New Zealand, who also came to my community because they have 30 years plus experience in geothermal. Are there lessons and their wisdoms and their experiences with my people? All of the people and members of the coalition and it’s clean energy projects like that, like the geothermal that we’re finding ways to meaningfully include indigenous values and investment standards. What an incredible story. And it just gave my people so much hope that we can do this. The Mallory have been doing this for 30 years, sharing best practices of Indigenous leadership and net zero projects across North America or New Zealand or globally. It can help inspire change. Speaker 1 [00:30:08] That’s an incredibly uplifting and hopeful note. And UN chief David, thank you so much for your time and for joining disruptors today. Speaker 3 [00:30:14] Well, thank you for having me. Greatly appreciated. Speaker 1 [00:30:17] Well, there’s so much to think about there. I’m struck by a number of things from my conversation with Chief Gale. Firstly, that capital is not a monolithic thing. It’s not all about dollars and cents. And yes, I know it might be a little bit funny coming from an RBC podcast. But capital requires understanding where we come from and the unique perspectives of our ancestors, or in the case of indigenous people and communities their elders. Indigenous partnership is not a checkmark. It’s not something that is slapped on in the middle or at the end of a project and requires proactive engagement at the start. To be able to tap into millennia of traditional knowledge and ways of living. And we all benefit when this is the case. As Dawn Madahbee Leach said, when indigenous communities prosper, so do the regions around them. Well, that is all for now. Thanks to our guests, Cynthia Leach and Chief Sharlene Gale, as well as Mark Podlasly next week, join us for the latest tech and Innovation Buzz with our ten minute tech series. Until then, I’m Theresa Do and this is Disruptors, an RBC podcast. Talk to you soon. Speaker 2 [00:31:32] Disruptors, an RBC Podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR Audio. For more disruptors content like or subscribe wherever you get your podcasts and visit rbc dot com, slash disruptors.

Speaker 1 [00:00:02] Hi. It’s John here. Speaker 2 [00:00:04] And it’s Theresa. Speaker 1 [00:00:05] Hey, Theresa. I don’t think I can remember a year like this for agriculture. I mean, we all know as food consumers what’s happening with prices out there, but pity the farmer because they also have to deal with sky high fertilizer prices and energy prices and weather conditions that have been just crazy this year in different parts of the country. Speaker 2 [00:00:27] You’re so right, John. Agricultural necessities like diesel, fertilizer, potash, herbicides are up 170%, nearly triple from a year ago. The latest provincial outlook from RBC Economics reported that the impact of droughts on crop production was so severe that Saskatchewan actually saw a decline in real GDP last year. Speaker 1 [00:00:47] The outlook, believe it or not, is luckily a much more positive, strong global demand and prices for commodities are significantly boosting our agriculture prospects. And if the weather cooperates, very provinces stand to report significant production, and technology can make it even better this year and in the decades to come. Speaker 2 [00:01:11] This is disruptors, the ten minute take, where we dive into the latest innovation, tech and economic buzz. This week’s take is on how all of these challenges are affecting the 2022 growing season in Canada and what solutions are available to support Canadian farmers. How can agriculture technology or AGTECH help increase yields? Speaker 1 [00:01:31] To offer some insights, we’re joined by Wade Barnes, founder and former CEO of Farmers Edge, a Manitoba-based Agtech company and a farmer himself. Farmers Edge develops data driven technologies that help farmers run efficient operations while producing more food. Wade, welcome to the ten minute take. Speaker 3 [00:01:49] Hey, I’m happy to be here. Thanks for having me. Speaker 1 [00:01:51] It’s great to have you on the pod, Wade. And I want to start off with what’s happening in the ag sector. You’re a farmer, so you know this firsthand. But as we enter peak planting and growing season, we’re seeing Alberta experiencing drought like conditions, and Saskatchewan has the opposite, with heavy rain delaying planting season by a couple of weeks. I think that’s happened on your family farm as well. What are you seeing this year across the industry that’s most concerning to you? Speaker 3 [00:02:15] Well, to your point, it’s really a mixed bag. There’s certain areas of western Canada that continues to be in a drought situation. And I think you’re getting to a very critical stage. Without some moisture, you’re going to see some farms get really affected around their yields. And then you’ve got these issues, you know, in eastern Saskatchewan, in Manitoba, where we’ve just had so much snow that turn into so much rain, that turn into really cold conditions. And there’s been, you know, really late planting and more rain on the way. And there’s going to be fields that don’t get planted this year. Speaker 2 [00:02:46] And so with all of these mixed conditions and the fact that farmers are facing super high input costs that we mentioned on the other side of the coin are also seeing very high prices for commodities, wheat up 67%, canola, corn. How is the math, the economics working out for farmers bottom lines? Speaker 3 [00:03:03] Well, look, I mean, I’m a farmer and the math still works out pretty well. You know, when you think about even with the cost of fertilizer up, the commodity prices are so strong. Now, that’s really dependent on are you going to get a good crop? And I think that the environment around agriculture, you know, there’s an ability for farmers to be super profitable, but the risk has never been higher. And so when you think about it with a grower as suddenly now your commodity prices are, you know, can almost $23 a bushel. Typically, we count on $10 a bushel. And with these really high fertilizer prices, if I get a decent crop, I’m going to do really well. But the risk now that if I don’t, that’s scary. And I think that farmers need tools to help manage their risk more so now than ever. Speaker 1 [00:03:47] And a lot of this way comes back to the human component of farming. But in a technology driven era and a data driven era, we’ve done a lot of work on this out of our Farmer 4.0 Report a few years ago, and so much has changed since then. Curious how technology is accelerating in the sector given all these constraints, including labor, which everyone’s up against, but farmers particularly are having trouble getting people on the land. Where does technology come into play here? Speaker 3 [00:04:19] Well, I think now you’re going to see farmers start to think about the adoption of technology more than they ever have. And I’ll just give you an example. You know, in these wet areas of Manitoba and Saskatchewan, last fall, we were facing a drought dry as we’ve seen in years and years. And so when you think about farmers and risk management, they have to make a huge decision how much fertilizer am I going to put on? What crops am I going to grow? And with these really huge increase in fertilizer costs, suddenly now technologies like sensors gives farmers a bit of an insight of what their potential yields are going to be. And as more moisture comes in, then suddenly they can get more confidence about how much fertilizer they should put on or what type of crops they should grow. And, you know, and I think back to it, not that long ago, we really didn’t think about managing soil moisture the way we do. We didn’t think about managing our nitrogen. And then you think about how that’s connected to sustainability and what’s happening in the carbon space. I mean, farmers are going to need these ag technology tools to help them make these decisions because gut instinct just doesn’t cut it. And it certainly doesn’t cut it right now with record high fertilizer prices. And the other side that you didn’t touch on is that as the commodity prices go up, you know what farmers do? They want to rent more land and it’s driving the cost of land up as well. And so, again, it’s another huge risk driver. So there’s never been a bigger opportunity to do well farming, but there’s never been a scarier time for a grower to deal with all the risks that he’s dealing with. Super stressful. Speaker 2 [00:05:43] So as you chat with your peers, what’s the advice that you’re giving them? What are some of the immediate, tangible things they can do now to help them out in their operations? Speaker 3 [00:05:51] Well, one thing, you know, when you talk about fertilizer placement and applying fertilizer, generally when commodity prices go up, farmers just put more on. But now with the fertilizer prices so high, you have to be really focused about where you’re spending your inputs. And I kind of consider a field, kind of like a hockey team on a hockey team, not everybody gets paid the same. I’m about, you know, in in areas of a field is very similar where there’s good producing areas and weaker producing areas. And I think the farmers now have to be really focused on utilizing technology to get the most efficiency out of their fertilizer or out of all their crop inputs. And look, with all the things that are coming, there’s lots of rumblings about mandated reductions coming. And so these things that farmers need to do isn’t just going to be focused on how to protect their bottom line. They may have to implement technology just to continue farming. That’s the way they are. So there’s lots of interesting challenges coming. Speaker 1 [00:06:47] You’d think that farmers have enough to cope with between the weather and events like an invasion of Ukraine well out of their control. But that changed the economics suddenly in a matter of weeks. Layered on top of that, you mentioned the word mandate. There’s growing pressure on the agriculture sector to do more to reduce emissions, carbon, methane, nitrous oxide, and not clear how that’s going to be done in a fairly short period of time. Wait, I was in southern Alberta recently with farmers both on the livestock and the on the growing side. And the amount of pressure on them, as you were saying, is extraordinary. And yet there are technologies emerging. I mean, there’s so much going on in Agtech right now that there’s an opportunity for farmers to transform themselves. How do they do that in this kind of environment when they’re coping with a weather crisis, a geopolitical crisis that affects their livelihoods, and then the climate crisis that they’re increasingly expected to and perhaps required to do more to help solve. Speaker 3 [00:07:48] Look, I have been in this business now for well over 20 years, and I’ve worked in many different markets the US, Brazil, Eastern Europe, Australia. And the one thing that I do know is that the Western Canadian farmers are super resilient. And to be honest with you, when times get really tough, that’s when the Western Canadian farmer looks for ways to make money differently, to be more efficient. And so I think that even though it’s super tough and super stressful, this is where they’re going to turn to be innovative and they’re going to look for tools to make their lives easier. Now, on the technology side, we have to keep up our end of the bargain from a technology company because we’re we need to put tools out there that the pharmacy benefit from it and they can utilize that. So I think you’re going to see farmers look to adopt technology needs to make sure we’re putting the right products in front of the farmer so they have got something to use. Speaker 1 [00:08:40] That’s a great point for us to wrap up on, Wade. I mean, it’s extraordinary at this point in time that farmers do have the prices now too. If they get it right, invest in these technologies and maybe some incentives because of the high prices of inputs like fertilizer to do things differently and invest in those technologies, they can reduce their inputs and costs. But boy, it’s a risky time, fascinating for so many to watch, but also fraught for many of those on on the front lines who we rely on to get food to our table. Wade, thanks for being on the ten minute takeaway. Speaker 3 [00:09:13] I appreciate it. It was awesome. Speaker 2 [00:09:16] That was a sobering discussion, John. As we saw with last summer’s droughts, weather challenges are only going to become greater as climate change accelerates. But, you know, as Wade pointed out, farmers are resilient, they’re innovative. Even so, we will need all the solutions available, all hands on deck or maybe all holes in the ground to stave off potential future food shortages. Speaker 1 [00:09:38] And what’s encouraging truth is so much of the technology that is emerging in the farm and ag sector is coming from Canadian centers, Calgary or Winnipeg or elsewhere. So this is this is an area where Canada really can lead the world. Speaker 2 [00:09:53] That’s it for this week’s ten minute take. Join us again next week for a look into indigenous capital in this country and the various elements needed to achieve economic reconciliation. Until then, I’m Theresa Do. Speaker 1 [00:10:04] And I’m John Stackhouse. Talk to you soon. Speaker 4 [00:10:09] Disruptors, The Ten Minute Take is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR audio. For more disruptors content like or subscribe wherever you get your podcasts and visit RBC dot com slash disruptors.

Speaker 1 [00:00:02] Hi. It’s John here. Speaker 2 [00:00:03] And it’s Theresa. Speaker 1 [00:00:05] Hey, Theresa. I’m sure you’ve heard all about the delays and issues at Canada’s major airports lately. I flew west this week and the security lines were crazy. Speaker 2 [00:00:14] Yeah, I have been hearing that from all over the place. Last weekend, Amsterdam’s largest airport asked airlines to cancel flights or divert them to other airports because of staff shortages. Passengers, and I’m sure you’ve experienced this to have to queue for hours. It’s being felt all around the globe as more Canadians are traveling for leisure again, they’re facing challenges between COVID screenings and labor shortages. And questions are being raised about whether airlines, airports and the broader travel industry will be able to keep up. Speaker 1 [00:00:44] Yeah, I mean, let’s admit it. These are largely privileged problems, but they’re causing serious disruptions in the economy. We know travel’s back. We’re all eager to get out and enjoy summer. I flew to Vancouver, then to Calgary and back to Toronto in the last week. Really impressed with the way that staff were keeping up with large crowds and a pretty high variability of crowds. But it’s going to be a real bumpy summer if we don’t iron a few things out. The biggest concern for Canada’s travel industry may very well be supply. A historic labor crunch has left the sector short of 177,000 workers. Speaker 2 [00:01:22] A lot of turbulence, you might say. Speaker 1 [00:01:25] This is disruptors. The ten minute take where we dove into the latest innovation, tech and economic buzz. Speaker 2 [00:01:31] This week’s take is on the travel industry’s post-crisis boost. Can the industry keep up with all of this demand? Speaker 1 [00:01:38] Today, we’re joined by Claire Phan, economist at RBC, who just wrote a fascinating proof point piece called Canadians Are Scratching the Travel Rich Again. But can the industry meet demand? Clare. Welcome to the ten minute take. Speaker 3 [00:01:53] Thanks, John. Speaker 1 [00:01:54] Love your report and wonder if we can start with a bit more insight into Canadians travel spending. We know it’s already well above pre-pandemic levels. What more are you seeing? Speaker 3 [00:02:03] So like you said, obviously demand for travel has been incredibly strong. Funding will travel. Spending typically predates actual travel activities because many of us tend to pay for those trips ahead. So. But just by where things are going, where those spendings are going, we can sort of expect a really robust path for recovery, for travel activities later this summer into next year. Speaker 2 [00:02:25] I’m really surprised by those findings. The robust travel ahead, considering that inflation is at an all time high and cost of living has gone up tremendously. What does the data show in terms of who in Canada can actually spend on travel? Speaker 3 [00:02:38] Well, to your point, inflation has definitely been surging and it was due to, you know, extremely elevated demand for goods at the moment, because a lot of these services, including travel, largely just simply wasn’t available for purchases for many of us. But now, you know, with a lot of these activities resuming back to normal, we’re seeing more price increases in airfares. It’s getting more expensive to dine out and to, you know, spend a night at a hotel. These things are all going to be more expensive. So the implications for travel demand were as to what we’re expecting in the near term. We do expect some level of resilience for travel demand, and that’s because Canadian households overall have accumulated a huge stock of savings over the course of the pandemic, and that amounts to roughly $300 billion. And to put that amount into perspective, that’s basically worth more than three times the tourism spending in 2019. So it’s a huge amount of money. And that, combined with just the pent up desire to really go somewhere, is why we’re expecting, you know, at least in the near term, a lot of Canadian households will probably be spending through higher inflation and rising costs. Speaker 1 [00:03:48] Claire I’m sure a lot of people hearing this understand the challenges, but also see this in pretty much every sector, the great resignation is leaving no sector untouched. How is the travel and tourism industry different than other sectors in terms of how labor shortages are impacting? Speaker 3 [00:04:06] So the broader labor shortage issue really is underpinned by aging demographics, and that’s been a challenge that faced by the Canadian economy and many other economies like for many, many years, and that’s largely been expected. What’s different for travel related industry, and that includes accommodation and food services, travel or accommodation that includes, you know, air transport. It’s like many of these jobs are client facing are high contact. And over the past few years, these were particularly the jobs that faced the most turbulence in terms of rising instability and uncertainties as to where their careers could be going. So a lot of workers within these industries actually have switched careers over to other sectors, and it’s going to be really hard to convince them to come back. Speaker 2 [00:04:50] If I just think about my own travel browsing experience in the last a while and seeing lots of deals on flights and hotels as these industries are trying to recover from losses experienced during the pandemic. And yet, as you’ve just mentioned, as we keep hearing these labor shortages, these cost pressures and all this consumer demand driving up prices. So if you scan across the travel tourism industries, can you tell us specifically which parts or subsegments are getting hit hardest in terms of costs and therefore prices? Speaker 3 [00:05:19] Well, from a consumer’s standpoint, as we all know, car rental prices have been going way up year over year. Just in April, the sort of inflation for car rental was around 20%. And that’s eroding a lot of purchasing and spending power on travel just because with more budgets being allocated to renting a car, you might have left to find out other travel related expenses and sort. So but from a business standpoint, inflation has been widespread across all industries, but more particularly these days for food and energy related items. So that from an industry perspective, means things are getting harder for restaurants and for airlines as well, just because of rising food and energy prices, which accounted for half of inflation actually in April. Speaker 1 [00:06:03] Claire, I wonder if you can cast your eyes a few months or several months down the road. Certainly a lot of talk of recession or slowdown or soft landing out there. And I’m curious how that plays out for the sector, because normally travel is something we all tend to fall back on when times are tight. It’s typically a part of what people see as disposable income. Or discretionary spending. And yet having been locked up for a couple of years, probably most people don’t see it as discretionary. They see it as essential. I got to get out of here and enjoy summer and maybe fall while I can. So with these sometimes contradictory forces of play that probably muck with traditional economic models, I’m wondering how you’re thinking about the travel industry going through summer and into fall and which corners may bounce back more than others and which ones may be slower to recover? Speaker 3 [00:06:58] That’s a loaded question right there. How we’re framing it essentially right now is just given where we are in the economic cycle, which is the peak of the peak. So things are heating up. We’re short of labor. Inflation is rising, and that’s particularly true for the goods sector. And that’s why central banks are acting really, really fast. Right now, Bank of Canada just hike interest rate by another 50 basis point. And the whole purpose of that is to tame consumer demand in order to tame inflation. And what does that mean for the travel sector? Well, demand for travel has just been coming back. So we’re not we have not been seeing the same level of inflation for travel services when we’re comparing to goods inflation. So I really like your point about, you know, how many, many households these days probably see travel to some extent with their savings as a discretionary item. And just anecdotally speaking, a lot of my coworkers, including I’m sure you guys as well, and my friends are all like, it’s all it’s on everyone’s agenda, going somewhere near or far this summer. So at least in the near term, again, going back to the point, just like really strong level of pent up demand, a lot of savings, all of those are expected to support activities. But our further in the longer run, there is the question of whether rising inflation and rising interest rates. With that comes rising debt payment activity, whether that’s servicing costs, rising debt servicing costs. And those are all expected to start to hit lower income households first and work their way through higher income households and less in demand in the longer run. So that’s our take on the whole recession earthquake, which I’m sure will not play out as the way we sort of expected. But then as of currently what we’re seeing right now in terms of weaker spots in the travel. So, you know, activities in North America and Europe are quite strong by parts of Asia, including China, are still seeing some like more stringent quarantine and testing requirements. And China pre-pandemic being the largest source of international departure that’s slowing sort of recovery over there is going to drag on global travel recovery into next year as well. And on top of that, this is related to travel, which anecdotally has been coming back more. But overall to leisure travel is still relatively weaker and we could reasonably expect it takes longer for that to come back as well. Speaker 1 [00:09:25] It’s a fascinating story of economic disruption and one that we’re all playing a role in in different, different ways. Claire, thanks for being on the ten minute take. Speaker 3 [00:09:33] It’s such a huge pleasure. Thank you, guys. Speaker 2 [00:09:37] So, John, I have some travel planned for later the summer. And this conversation with Claire is making me think that I’ll have to cut back on every other spending category to be able to afford it. And I mean, it’s wild to me that demand for travel is as high as it is, given everything that’s going on, interest rates and fuel prices and all of the things that we don’t want to hear anymore. Although that makes me think that it makes sense if people want to escape for a little while to just get away from these maddening conditions in our day to day lives. Speaker 1 [00:10:05] Yeah, one assumes this is temporary, but temporary is a kind of an expandable word. This could go on for many, many months, even as the economy slows down, just because there is that pent up demand we want to get out and what better time to travel than summer? So it’s in general a good problem to have, although in specific cases, especially for the operators, a big challenge. Speaker 2 [00:10:28] Well, that is it for this week’s ten minute take. Join us again next week for another episode. Until then, I’m Teresa Do. Speaker 1 [00:10:35] And I’m John Stackhouse. Talk to you soon. Speaker 4 [00:10:42] Disruptors, The ten minute take is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by Jar Audio. For more disruptors, content like or subscribe wherever you get your podcasts and visit rbc dot com, slash disruptors.

Speaker 1 [00:00:01] Hi. It’s John here. Speaker 2 [00:00:02] And it’s Theresa. Speaker 1 [00:00:04] Hey, Theresa. You know, if we did a word bubble on disrupters, I suspect that the top word would be innovation. It means everything. And some people say it means nothing. Curious what you think of when you hear the word innovation. Speaker 2 [00:00:18] Oh, man, I’ve been thinking a lot about this and I still don’t have a clear answer. But to my mind, I think it’s the systems, the resources processes, the infrastructure that supports novel ideas that improve how we live, how we do business, really everything. It’s about improvement upon existing things. What are your thoughts, John? Speaker 1 [00:00:39] Wow, Teresa, you’re such the tech person. I thought you were going to say Tesla iPhone model off various technologies as being the clichés of innovation. And here you are talking about systems. Yeah, innovations, all of those things and a lot more. I got to serve on the selection committee recently of the Governor General’s Innovation Awards. It was a great half day that I spent with some remarkable Canadians looking at amazing innovators in every sector from every region across the country. It’s the annual celebration of innovations that exemplify excellence and help improve the quality of life in Canada and around the world. And so often we forget that really is the test of innovation. Is it improving the quality of life, whether it’s a phone, a car or the way we run a school or a neighborhood? Speaker 2 [00:01:32] You are so right, John. And even Steve Jobs, you know, going back to that iPhone reference, he’s one of the great tech innovators of our time. He understood that innovation is about more than just the iPhone. And he famously said that it’s what distinguishes between a leader and a follower. The innovator the leader is that bold risk taker who sees a need and risks a new approach. And when that proves successful, it encourages others to follow in that innovator footsteps, opening the door to the possibility of more innovation. And we’ll be exploring and inspiring example of that later on in the show. But the world has changed dramatically in recent years, John, and with it, the need to innovate is changing, too. Speaker 1 [00:02:11] We’re going to need innovation at every turn as we try to come to grips with the fallout from COVID. As we think about the backlash on globalization and how we can continue to make goods in new, more innovative ways that don’t drive up the cost of living for everyone. And we’re going to have to do that in a world of economic and fiscal constraints where perhaps we don’t have the resources that we might have assumed even 12 months ago. And that’s where innovation really proves itself in allowing us all to do more with less and perhaps even leaving less of a footprint on the planet. This is Disruptors. An RBC podcast. I’m John Stackhouse. Speaker 2 [00:03:00] And I’m trying to reset so. In this episode of Disruptors, we’re looking at innovation. What it is, where you find it in the Canadian economy and why it’s so important. After the break, we’ll hear from the two co-founders of a groundbreaking preschool in Nunavut who are bringing innovation to the world of early childhood education. Speaker 1 [00:03:25] But first, our conversation with one of Canada’s leading thinkers on innovation. He’s a professor and author, a former tech entrepreneur and key advisor to the federal government who has some fairly provocative things to say on what this country should be doing to build a more prosperous innovation economy. Dan Breeziness is the Munk Chair of Innovation Studies, Co-Director of the Innovation Policy Lab and Professor of Global Affairs and political science at the University of Toronto. He’s also the Clifford Clark visiting economist at the Department of Finance. And prior to joining U of T in 2013, he co-founded a software startup in his native Israel. In addition to all that, and if all that weren’t enough in March, Dan won the Balsillie Prize for Public Policy from the Writers Trust of Canada for his book Innovation in Real Places Strategies for Prosperity in an Unforgiving World. Dan, welcome to Disruptors. Speaker 3 [00:04:23] Thank you, John. Theresa It’s wonderful to be here. Speaker 1 [00:04:26] It’s great to have you on the podcast and want to jump right into one of the arguments in your book about the difference between innovation and invention. Too many of us confuse or conflate those. I wonder if we can start off with a quick explanation of the difference between innovation and invention and why that’s important. Speaker 3 [00:04:47] Let me move one step even further and then do that. So let’s first ask why innovation is important. And innovation is important because it’s the only way to have sustained economic inhuman wealth for growth, period. That’s it. So if you don’t care about those things, innovation is not important if you’re most human beings. Innovation is critically important. However, innovation is not only invention of new things. So if invention is the act of coming up with a new idea. Innovation is the act of employing those ideas to offer goods, products and services and all across the production stages. So from the coming up with a completely new idea to improving things, to combining them with others, to making them more accessible, all those things. Speaker 2 [00:05:43] When we talk about innovation, often it’s an abstract terms. And so I’m wondering, could you provide an illustration of innovation, why it matters to a company or a country and what’s at stake? Speaker 3 [00:05:54] Let’s start with one example. We are now talking in something that very old technology, which is called Tesla or videoconferencing. If only ten years ago, the three of us would had to do that. We will do everything in our power to make sure in the same room, because otherwise we’ll have to go to special ed rooms, which are unbelievably expensive. And the quality of what we can achieve in those rooms will be horrific. And that’s just ten years ago. And that technology was invented at least 30 years ago. What really happened that completely transformed it right to real innovation is that huge millions of millions of engineering hours in improving processing and improving software algorithm and improving data communication to the fact that when we had COVID, we actually did not need to stop most of what we’re doing, including the education of our kids, because teleconferencing zoom teams, the software we use now was not only good enough, but cheap enough. But we don’t even think about the cost. Speaker 1 [00:07:01] Everything you lay out, Dan has me thinking about the role of government and the fact that government was arguably absent in a lot of that innovation that you just you just specified. Some people feel that innovation actually increases the farther you get away from it from government. And yet here you are in Ottawa at the in the beating heart of government in the Department of Finance. Why did you. Having spent so much of your life trying to understand innovation and being a participant in the innovation economy, want to go into the depths of government to try to tackle it as opposed to doing it from the outside world. Speaker 3 [00:07:42] So, first of all, most people are wrong and in multiple ways. Okay. If you look just at the example that I gave you, we can also talk about things like vaccines and marinade technology on the rest. You will find out that up to 85, probably 90% of the funding and all of our resources, like human beings like me and professor of it, went into developing those technologies. So in the end, somebody can work for two years and make billions on them with government, public money, public people. Not only that, but if you would be in any class on the economics of innovation one on one, one of the first things that they will tell you is that you should expect under free market condition to have less than optimal innovation. And the reason are, I mean, there’s multiple reasons, but to simplify it. Innovation has a huge amount of both risk and uncertainty on. One side and the other without rules. We already mentioned patents. There is no way that if you and I, John, will spend years and all our money to come up with a new innovation, which in the end the just information, unless we state, then make sure that we can make money out of it. Everybody will copy us in a second. So we will have no incentives, no market incentives to actually spend all of time now added to uncertainty. Now add the risk and what you would expect under free market condition, meaning without government is to have very little innovation, if at all. Speaker 2 [00:09:25] That’s strikes me as where we are living in a culture of comfort. Maybe some might use the word complacency. So what do you say to business leaders about how they might be able to move the dial and take on some more of that risk? Speaker 3 [00:09:40] Up until a few years ago, if I was an investor, I would give gold medals to all the Canadian business management because they haven’t managed to give us one of the highest profit margin in the world with one of the lowest risk. The problem is, as a Canadian, it has to our society rather than negative consequences. Median wages, for example, are stuck for 46 years, and the quality of work is much, much, much lower than what they should have. I also think that Canadian managers are first and foremost Canadian. So if they understand what is at stake, if they understand the issue, this is a behavioral problem. And they are also giving other resources. Right, lower risk and lower uncertainty, which the government can do. Until we all figure out how Canadian business can routinized, so innovate all the time, then I think Canadian businesses will actually be very open to that. But when you have a story over 30 years in which you completely disregards what is a main failure, all your recommendation, policy solution, business behavior will take you in the wrong way because you don’t admit what is wrong. Speaker 1 [00:11:00] You mentioned competition and the lack of competition is perhaps one of the inhibitors. And this has been widely discussed and debated over many, many decades in the country. We have regulated industries that have both manufactured and perhaps natural oligopolies. I work for one in the banking sector, but we also have the main airlines transportation, telecommunications at a high variance. I would suggest an innovation between those sectors. How do we ensure we’re getting more innovation in the market structures that we have, which does not have to be directed from government? Does it have to be demanded from consumers or is there some other kind of magic, magic formula? Speaker 3 [00:11:42] So right now we are and what’s, I think technically called a pickle because and you can see it and I know I know you know the statistics for over 20 years, I’ll bear the meaning. Business investment in R&D has gone down and year after year we are now lower than Pilote, which basically means that we are a developing country level. We also look at other things which has a horrible name. TFT Or maybe multi-factor predictive. Basically, apart from telling you how much innovation you have, it tells you how Canadian businesses utilize their human capital. So High TSB is a Toronto Raptors, no matter what kind of players you give them. They excel and they reach a playoff. What most Canadian business look like now is that Toronto Leafs the highest wages in the industry for the lowest results possible. And so first, we need to figure out how we utilize Canadian, because this is now 30 years and businesses are profitable. We should not expect that it will come like manna from the earth. And we definitely do not want, unlike Finland and Israel, to be faced with existential crisis before versus change. So I think there’s two ways public discussion and honest one about what is wrong, which hopefully will also start demands from consumer and then collective action together. And here I would think that public policy has to lead because nobody else will do that. Speaker 2 [00:13:25] To pivot slightly. So you’ve spent many years talking about how Silicon Valley is not necessarily the right model for innovation, and yet a lot of people still look to it. And we can think of Canada’s Supercluster strategy as being very similar in design. You’ve been critical of those high tech hubs for producing unequal levels of prosperity. So how do we build an innovation economy that does benefit the many and not just the few? Speaker 3 [00:13:51] So let’s again go back to, if you remember, invention and innovation, and then let’s at the global system. And I think most people now understand after COVID that what really happened in the last 30 years is the way we, meaning humanity, produce of goods and services have been sliced into different stages. So a way to think about it is that there are at least four stages. We, Silicon Valley, focus on only the first one because it focused on only the first one, which is just R&D. It it’s a model of it does not create jobs for anyone who’s not an R&D engineer and maybe, you know, a venture capitalist and a few celebrity chefs. And when they finish a job, it actually moves to a different place, Korea, Taiwan, China, where they also need to do a huge amount of innovation. But what they do there create a lot of different kinds of jobs. So different skills. If you look about Canada, let’s just assume for a moment where do we really want to be with Silicon Valley, we might have three regions, Greater Toronto and I’m adding Waterloo and Hamilton just for the sake of it, Vancouver and Montreal that might be able to play that game, and it will create unbelievably high inequality. But then there is the rest of Canada. It is not clear to me why the forestry industry of Canada cannot compete with the Finnish one. Pulp and paper also in sophistication. Also in innovating in the equipment. We have a huge country with a huge amount of variance in both the natural goods and skills. Canada, unlike a place like Israel or a small place like Silicon Valley, can actually have different innovation models in different industries in different places. Each one of them focus on a different stage. Speaker 1 [00:15:51] Dan, I wonder if I can ask you about the subtitle in your book, Strategies for Prosperity in an Unforgiving World that was actually from. Only 21. And I think it’s obvious to all of us that the world is even more unforgiving in 2022. How does innovation change in an unforgiving world, and what do Canadians need to really come to grips with to make it work for, for everyone? Speaker 3 [00:16:15] Canadians should start thinking about innovation like hockey. We need to win and easily win and actually create more innovation. We might even help the world. Right? But we need to win. And the other team is very willing to get the few penalties in order to win the Stanley Cup. If we are not willing to inflict a few penalties at the right time, the Stanley Cup will keep on going to Florida. Speaker 1 [00:16:41] That is so painful and so poignant. Spot on. Speaker 2 [00:16:45] I wish I was a hockey fan. Speaker 1 [00:16:47] Elbows off Canada. Speaker 3 [00:16:48] Exactly. Maybe even knees if if we can get it corrected. Speaker 1 [00:16:52] Dan, thanks so much for being on Disruptors. Speaker 3 [00:16:54] You’re very welcome. And I hope to see you in the real world soon. Speaker 1 [00:17:00] Coming up after the break, we’ll talk to the co-founders of an innovative new model for early childhood education. So stay right there. Speaker 2 [00:17:10] What you’re listening to Disruptors an RBC podcast. I’m Theresa Dome, once let you know about a new weekly report from RBC Economics. It’s called Proof Point, and it provides original, timely economic insights from RBC’s economics and thought leadership team. Find out why demand for cash is at its highest level in 60 years, despite a broad shift to e-commerce. Or learn why Atlantic Canada has become a magnet for new residents. To explore more, visit RBC dot com slash thought leadership. Welcome back. On today’s show, we’re exploring all facets of the innovation economy. And as John mentioned, off the top, he was a judge at this year’s governor general’s innovation awards. So, John, what can you tell us about the winners? Speaker 1 [00:17:58] Well, the winners are all on the public record now, so I’m not opening an envelope. And some of them you’ll recognize the first is carbon cure. You may recall CEO Rob Nevin was featured two summers ago on Disrupters, talking about their ambition to be a global leader in carbon capture technology to reduce the concrete industry’s carbon footprint. Speaker 2 [00:18:18] Oh, and I hear there’s another disruptors alarm on the list of recipients as well. Speaker 1 [00:18:22] That would be apply board and CEO Martin Vaziri and his brothers, who are such a great Canadian story. They came from Iran, went to University of Waterloo, and have developed through a high board, the world’s largest online platform for connecting international students with schools. Speaker 2 [00:18:41] There was also a cool eye company I heard about. Speaker 1 [00:18:44] That would be Brain Box A.I. and all of us in buildings right now, which is most Canadians will appreciate what they’re doing, which is applying AI to optimize energy use, especially in commercial buildings, to reduce the carbon footprint of heating and cooling systems. Speaker 2 [00:19:02] And I think there was also a winner that came from our local university system. Speaker 1 [00:19:06] A company called Desired Sensation Level or Dstl, which has produced the world’s first pediatric hearing aid prescription out of Western University in London, Ontario and the National Center for Audiology. Speaker 2 [00:19:19] And as we’re reaching the tail end of the pandemic, can you tell us about the company that helped get us to this point? Speaker 1 [00:19:26] That would be lipid nanoparticles that enables COVID 19, many vaccines. We all know what are now the household names behind many of the COVID fighting vaccines, companies like Pfizer. But they don’t do it on their own. They depend on a kind of supply chain of innovation, and that includes companies like lipid nanoparticles. Speaker 2 [00:19:47] One of the other winners and our next guests are not on the technology side. By contrast, they found an innovative new way to deliver a program that is essential to our society. Karen New Track and Tessa Lockett are longtime educators who launched a preschool in the remote Arctic community upon Inlet, Nunavut. Launched in January 2016. It’s called Perovic, which means a place to grow. In a note to the preschool, combines traditional Inuit knowledge in ways and traditional Inuit child rearing with Montessori methods. In 2019, the PUREVIEW was awarded the $1 million Arctic Inspiration Prize for a project committed to addressing the, quote, causes rather than symptoms of issues facing the north. And this May Perovic was one of six winners of a 2022 Governor General’s Innovation Award. Karen TSO, welcome to Disruptors. Speaker 4 [00:20:40] Thank you for having us. Speaker 2 [00:20:42] I’d love to start with a bit of your backstory. So Karen, I understand you’ve lived in Pine Inlet all your life, but Tesla, you moved to the far north from Ottawa just over a decade ago. And I’m wondering how you ended up in Nunavut and ultimately how did you and Karen decide to launch Cervi? Speaker 4 [00:20:58] I ended up in Nunavut in 2003 for the first time. I was going to Trump University and I took part in a Bush school program that was being run by the University of Manitoba. And this was done with a lot of different disciplines at the university. And I was able to go and join a summer long program in paying her tongue. And I immediately fell in love with the Inuit, and I knew I had to come back. So I got my teacher’s degree. And when my husband and I graduated from university, we were in interview. We wanted to be here more than anything. And so when we got to Pine Inlet, Karen and I met very early on when we arrived in the community, and it was a day meeting where we first met and the day meeting they were talking about how a certain issue that was at the forefront in the community at the time was referred to supporting students adequately at the high school and Pine Inlet and how we can improve supporting Grade nine students. And as children move through the school system, you know, the more and more we were looking at all of these issues, the more and more we were saying, well, we really need to be doing a better job earlier on in education, because even when children sometimes enter the school system, they might not have had access to proper early childhood education programs. And in Pine Inlet at the time, there wasn’t any. So Karen and I shook hands on it after a pretty heated discussion at the local Education Council and said, No, I think we have to do something about that. Speaker 1 [00:22:30] So it felt like we have to do something about that should be sort of engraved in the desk or on the wall of every would be innovator, because that is really what innovation is about. It’s about someone deciding, I’ve got to do something about this, which is starts with identifying a problem. And probably anyone who’s listening who has is connected to education. And we all are recognized as problems everywhere in the education system. It’s a it’s a process of endless improvement. And I’m curious how you went beyond problem identification, because that’s often where innovation stops. People identify the problem. They point fingers, but no one figures out how to get to solutions. How how were you able to get from problem to solution. Speaker 4 [00:23:19] In the preschool? We have a situation where just at the time when a child is entering, sort of being excited to potentially leave home and ready to branch out beyond the family unit. It’s a moment where we felt that it was really important to nourish and make sure that a child might have access to programing that, AH is not typically involved or accessed in in the in a community like Pine Inlet, which is a remote community in the Canadian High Arctic. And so often people say, well, we can’t get that here because of this, that or the other thing. Well, why not? So you get to a point where you just kind of have to know what you have and you just want to go in and do that and experiment. And the success that we’ve had in the community has been really central to parent support when people sort of so seeing what we were trying to do and trying to provide cultural materials, language materials that were really grounded in and what was important and pond and land. We received parent support immediately and that was really crucial to what we were doing and how we were doing it and why we became successful because so many people had input into what we were doing in the preschool. It was developed over a period of two years with the new Newman Arctic College. So at that time it was like a slow build and it had the involvement of so many people from the community. So everyone really had a vested interest and and seeing this program succeed, but also that everyone really had a part of themselves in it, like everything from little sewn materials and the. Preschool. You know, we had the elementary school teachers have input into the actual language development of Inuktitut in the preschool program imagery that was attached to certain silverbacks. And whenever Owen saw, we were just trying to do the best that we could so that we could support children in schools as a good launching pad to be ready for school. Everyone supported us right away. It was like this organic excitement around what we were trying to do and when everyone kind of became involved that it really generated this incredible energy behind it to make sure that it was successful. Speaker 2 [00:25:36] One of the challenges for any innovator is scaling bring that new product or service or program to a broader market, and having a father reaching impact and having started with a classroom of 18 kids in 2016 but have since launched a program where trainers are now touring the North, introducing the program to the rest of Nunavut. How are you scaling and expanding that program? Will also retaining that grass roots approach that has in part made it so successful? Speaker 4 [00:26:05] When we decided to move forward at the suggestion of NTI, we had made this project in Pond Inlet and it was really going well and Pond Inlet and we were contacted by Nunavut Technology Inc. and they said, We really like what you guys are doing in Pond Inlet. How can we support you in doing that? And we said, Well, what do you mean? What do you mean? What do you want us to do? And they said, Well, we have funding that we could support you by maybe making a documentary or in training binders. And and we said, Oh, that’s a great idea. Oh, that’s a great idea. I think we would pick a community that might be interested. And we’d already been contacted by several community programs who wanted to see what we were doing and actually come to the community to see how it was playing out in Parliament. So essentially we’ve reached out to Clyde River, the early Saxony program there, and they had already communicated with us that they’re interested in trying something similar to their preschool program. So we did a pilot project there and it was successful. And everybody contacts Karyn one at the time, you know, to say, hey, how can we how can we do that? How can we get that in our facility? And and it’s all word of mouth. It’s all very organic and how we can continue to expand, but it’s different for every community. And and we try to incorporate their culture because every every region is has different cultures. So for example, like in Panama, there’s a certain style of community sled. So for example, the sled that we might use in the preschool program in Pond Inlet and make a smaller version for it for the children to use in their play, there’s a totally different style of community in Cambridge or Rankin and the different ways of. So we have little clean sealskin cleaning boards and structures with little wooden, you know, is the nice to clean the seal skin. And each region may have different ways to clean their still skin and how we do it in pontoon. Speaker 1 [00:28:23] But that kind of culturally appropriate technology, if I can put it that way, would be wonderful to have more broadly across society. So often we have things kind of presented to us or pushed on us as a one size fits all. And I think that’s one of the many things that makes you an innovator, is finding ways to do things in a culturally appropriate and and inclusive manner. Speaker 4 [00:28:48] And our dialect is different. So we adapt to their dialect, like Cambridge Bay and Rankin and Pontin, but all have different dialects. Speaker 3 [00:28:59] But it’s. Speaker 4 [00:28:59] All right, it’s in it. And we knocked it and we can still understand their language, but we we adapt to their third language. Speaker 2 [00:29:09] I think that that ability to adapt and to build on original ideas is extraordinarily important and terrific has been so successful. Again, you’re exporting the concept to different regions in different parts of the world, but it seems to me that the program is more than just educating young children. It’s also about empowering individuals, whatever their age, to find the solutions, to meet their needs and to create their own past success. Karen Tas I’d love to hear from you about what can future innovators and other communities around the world learn from the approach that you’ve created to inspire their own innovations? Speaker 4 [00:29:45] I think what you’ve touched on there is something that to me is the most moving part of this project is that it’s not only about the development of a child, it is also about the development and fostering and healing of adults that. The training as well. So, for example, we’ve all been taught a certain way, usually in one specific way in our own education, which is top down, and to absorb knowledge and to have the teachings of others imposed upon us. If I may say and then in this project, when you enter a room of the training, when you have, okay, well, you’re here and you’re going to learn from the child, you’re going to sit in the side of the room and you’re going to observe how a child learns and how they move from one activity to another and how they are stimulating themselves by their own interests. That also transcends into the adults as well. Whenever we go and work with the community, we’re not saying, Hey, we have this great program, do what we do. It’s What do you need? How can we support you? This is our experience. But what kinds of things can we provide for you? Speaker 2 [00:30:52] I think that is such an excellent sentiment and one of mutual respect and understanding. Karen and Tessa, thank you so much for joining us today and for being on Disruptors. Really appreciate your. Speaker 4 [00:31:01] Time. Korean me. Speaker 3 [00:31:03] Again. Speaker 1 [00:31:06] What a thought provoking set of conversations and kind of a nice bookend for innovation. We started with Dan presidents who gave a profound overview of the innovation, challenge and imperative in the world that if we are going to improve prosperity, if we’re going to be able to afford all that we take for granted in our society, we are going to need to innovate much more than we are today, and that’s on business to really take forward. And then we heard from Karen and Tessa, who I thought captured really well how innovation is seen and should be seen through the eyes of the user. Too often we have innovation from a central organization. It can be a government, it can be a big company saying Here we’ve got a better mousetrap and we’ve made it accessible for you. But the user experience kind of sucks. And as we know, whether it’s technology or education or health care or other aspects of our lives, the user experience is critical to innovation. Teresa, what stood out for you? Speaker 2 [00:32:11] I loved hearing from Karen and Tessa, John, and especially them talking about how they’ve shifted the locus of power in the classroom. And it’s that turning of conventions on their head that I think is a super key ingredient in making sure that innovation really is able to spread throughout the economy. And exactly as you mentioned, it is the focus on the user, in this case, the student that makes everything they do just so remarkable. I can clearly understand why it is spreading throughout the circumpolar world. It’s quite beautiful. That is all for now. Thanks to our guests, Dan President, Karen Nu, Tarak and Tesla Lockheed. Next week, join us for the latest tech and innovation buzz with our ten minute tech series. Until then, I’m Teresa Doerr. Speaker 1 [00:32:54] And I’m John Stackhouse. This is Disruptors, an RBC podcast. Talk to you soon. Speaker 2 [00:33:01] Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by JAR audio. For more disruptors content like or subscribe wherever you get your podcasts and visit our rbc.com/disruptors.

Speaker 1 [00:00:01] Hi, it’s John. I recently had a chance to spend time in British Columbia talking with a fascinating and eclectic group of people, from energy economists to motorcycle makers, about Canada’s clean energy transition. It’s all part of this special three part series we’re calling The Climate Conversations. In the first episode, I spoke to some of Canada’s leading thinkers on energy and climate issues. And while each came at it from a distinct and sometimes competing perspective, there was a consensus that, yes, both energy and climate security are possible. In the second episode, I took a tour of BC’s Clean Tech Valley and met some of the exciting innovators who are helping shape Canada’s transition to a clean energy economy. These are the entrepreneurs who give me great hope for the future. But we can’t talk about our future or the importance of developing climate and energy security without first acknowledging the failings of our collective past when it comes to Indigenous peoples. Indigenous Canadians are deeply proud of where they come from and who they are. Their traditional territories are vital to their identity, not just to their livelihoods, land, water, sky, shape, indigenous identity. And we need to remind ourselves that energy comes from land, water and sky. So any discussion of an energy transition needs to not only include indigenous people. It needs to incorporate indigenous thinking and indigenous ownership. If we are to truly meet our ambitious climate and energy goals as a country, we need to ensure that all Canadians, but especially indigenous Canadians upon whose lands we live and work, are engaged in this fight for sustainable change. The future of our economy and our country may just depend on it. This is Disruptors. An RBC podcast. I’m your host, John Stackhouse. On today’s episode in the final of our three part series, The Climate Conversations, I’ll be speaking with two remarkable indigenous leaders in British Columbia who are working to transform both our society and economy through innovation, collaboration and an entrepreneurial spirit. After the break, we’ll hear from the elected chief of the Hyslop people centered on Bcc’s northern coast, who’s also chair of the First Nations LNG Alliance. But first, my conversation with a Vancouver based business leader who is helping transform the way indigenous communities conceive and execute projects for a more sustainable future. Mark PUD lastly is Director of Economic Policy and initiatives at the First Nations Major Projects Coalition, which is a national collective of more than 65 indigenous nations seeking ownership of major projects such as pipelines and electric infrastructure. He’s also director of governance at the First Nations Financial Management Board, which is leading the development of an indigenous response to the United Nations Declaration on the Rights of Indigenous Peoples. Mark, welcome to Disruptors. Speaker 2 [00:03:10] Well, thank you. I’m very pleased to be here, John. Speaker 1 [00:03:13] I wonder, Mark, if we can start with some reflections on the impact of climate change, because you’re part of a nation and a community in South Central B.C. that has not only been devastated by climate change, but also captured the world’s attention. Maybe you can share a bit of what you’ve you’ve learned from that experience. Speaker 2 [00:03:34] Well, we are from the into come, which is in central interior, British Columbia, South Central B.C. and we had both of the big climate events of British Columbia hit us within six months. The first was the fire at Lytton. Lytton as one of our communities in our nation where the temperature went to almost 50 degrees Celsius, hottest temperature in Canadian history, and then the place burned to the ground the next day. And then last winter, we had the atmospheric river come through and it hit Merritt, which is also one of our nations communities. And the rivers just washed everything out. There were 38 washouts in both directions up to my community, washed away the reserve where my mother was born. It’s gone completely and Highway eight still isn’t rebuilt. So it’s it’s been a horrific year climate wise for us. Speaker 1 [00:04:17] And people around the world watched in horror and some said this is why we need to get off fossil fuels immediately or as quickly as possible. And yet many of the communities that were devastated by this are also investing in projects that will continue to ensure that oil and gas get to people in Canada and around the world. How do you balance what some see as a contradiction and others just see as a as a challenge between those two points of view? Speaker 2 [00:04:47] I think what’s important to remember is that this is an energy transition. There is a point where we are going to have to stop using a lot of these fossil fuels, but in order for us to do that instantly is going to cause enormous pain. We just don’t have the renewables and in the amount we need to do an instant switch. So I think right now it’s a question of smart decisions about which petroleum based assets we will develop and use. The references you’ve made to a lot of First Nations, particularly in B.C., around LNG, LNG as a cleaner fuel than oil. And that is where a lot of first nations are putting their effort right now. So it’s a transition. It’s not going to be instant. Speaker 1 [00:05:22] What indigenous perspectives do we need to be more mindful of in terms of finding this balance? Speaker 2 [00:05:28] I think to look at this is that Indigenous people right now are very invested. Some Indigenous people are very invested in the petroleum and the energy sector and there’s a lot of interest right now in developing sources of energy that are cleaner. And I think that’s where indigenous people, at least from the Coalition, are willing and happy to proceed. The question we have is we don’t want to be caught off guard in the development of new energy systems like we were in the past, where they are coming from our lands and our resources and we are not benefiting from that. So there’s a lot of hard questions to be asked about what’s our energy mix going to be. And then for Canadian society about what’s the role of indigenous people on whom our lands are are basically tied to these energy, either in clean energy and hydroelectricity or solar or wind or in petroleum and natural gas. There’s some tough questions that have to be worked out. Speaker 1 [00:06:18] And what is the role of indigenous peoples in those decisions? Speaker 2 [00:06:22] We are the owners in many cases of title on these lands and for us to be involved in these projects, it means we have to be involved at the beginning, not at the end. Most industrial development in this country now is done centrally or somewhere. Somebody else decides that indigenous people are consulted at the end. That’s just not going to work in the future, and it’s certainly not going to work under a world of the United Nations Declaration on the Rights of Indigenous People, which calls for free prior informed consent before these projects are developed. Indigenous people have to be informed upfront of what’s being planned or is going to proceed. Indigenous people then will have a say in the planning, the operation, the development and the ownership of many of these projects. What consent comes down to is. Have the Indigenous people been informed ahead of time? Freely given their approval to projects. This doesn’t mean that indigenous people are against all projects. No. The Coalition, for example, we have 85/1 nations across the country who are interested in participating in projects and are interested in smart projects that meet the national goals energy wise and economy and First Nations aspirations towards self-determination. Speaker 1 [00:07:26] Tell us a bit about the the Major Projects Coalition, how it came about and what it’s trying to achieve. Speaker 2 [00:07:31] The Major Projects Coalition started about six or seven years ago when 6/1 nations in northern British Columbia had an opportunity to acquire equity in a pipeline project. They then went out to try and source that equity and found that it was too expensive the cost of capital because First Nations the way were organized under the Indian Act. We don’t own our land, we don’t own our assets. They’re held in trust by the government. And trying to actually raise money on assets that you don’t own is a fruitless exercise. There’s just banks wouldn’t do it. So if we could get capital, it would be at the cost of credit card type rates. And that’s just not economic. So the 16/1 nations said, you know what, this is could happen to us again, so we’re going to be ready the next time. So they formed the coalition as a service organization, 2/1 nations, to improve their technical ability to access capital and technical skills and finding people who could assist them prepare for the next deals that would come around. And it’s happened. You’re starting to see it now from those 16 we have grown to 85. The coalition does not market itself. It is all by word of mouth. And these are first nations who are being approached by proponents of major projects looking for commercial partners. And we provide the service to those communities to ask the right questions about going into those projects. Speaker 1 [00:08:47] What sort of projects are you looking at or communities looking at? Speaker 2 [00:08:51] There are energy projects, a lot of clean energy projects now, either in hydroelectricity or partial ownership of transmission lines. And those include the gambit of geothermal. Hydrogen is now coming up as as more and more communities are being approached. Transmission lines, pipelines have come up in discussion. There’s railway discussions now about everything from via rail project in Ontario and Quebec to other projects here in British Columbia and sometimes mining companies as well. Mining companies looking to access critical minerals for net zero batteries and car manufacturers. Those are all coming up. Speaker 1 [00:09:24] When there is indigenous ownership. What what changes? Speaker 2 [00:09:28] What changes with indigenous ownership? First of all, indigenous people will then be involved at the project from the beginning. So it allows Indigenous people to have more say in how the projects will be built and improved. A lot of times traditional knowledge can be better incorporated into the planning of a land based project. The other side of it is it provides in theory the Indigenous party with a revenue stream which is independent from government for priorities that the First Nation wants to focus on. The other side of this, that changes is it changes the relationship between the proponent and the first nation. Because if a first nation moves into an equity position within a project, they essentially become core proponents. And corporate opponents by nature have given consent. So it’s a win for both sides. Speaker 1 [00:10:12] The climate transition is going to take a lot of capital. Our research at RBC estimates Canadians will need to invest or mobilize $2 trillion over the next 25 to 30 years. That’s roughly $80 billion a year or about four times what we’re investing in transition activities right now. How can we see more indigenous capital mobilize Mark and perhaps do so more quickly? Speaker 2 [00:10:38] Well, I’m glad you noted that there is indigenous capital in this country. My community has a revenue sharing deal with a mining company in our territory and when we started to set that up, we did some research to find out how much indigenous capital is there in Canada. And we found just back of the envelope calculations at that time about $8 billion of assets under management by Indigenous people. And it’s not in one spot. It’s different settlements from either land treaties from negotiations with mining companies or energy companies. We figure now that somewhere between 13 and 18 billion my nation has a fund right now of about 50 million. And we have the ability and the fund to make direct placements into investments that that will grow that fund. Most of these nations do. So that capital is there. The question, though, is that how can indigenous people directly invest in these projects? I think for a lot of the financial sector, they don’t see us as Indigenous investors. The idea of being an indigenous investor seems to be an oxymoron to some of these companies who come into territories and don’t think of Indigenous people in that sense. That has to change. You already pointed out the amount of money that’s going to have to be mobilized for the transition, the energy transition. Where’s that going to come from? It’s going to come from Canadian investors, but also outside the country. Canada at the moment needs to attract that investment, and one way to do it is to reduce the risk of these projects. And one way to do that is ensure that an Indigenous people are co proponents are part of the projects upfront. The Coalition did a conference last year on ESG investment standards and we found in the ESG investment standards there’s practically no Indigenous involvement and there’s no Indigenous risk mitigation of the risks that Indigenous people could pose to projects. We’re proposing that no, you bring us in as investors at the beginning, and we will demonstrate by our involvement that that risk is taken care of, and that should improve the ability of the project to raise capital from outside investors. Speaker 1 [00:12:30] You spent a lot of time, I know, looking at how other countries are progressing with respect to indigenous ownership in in all forms of development. What should we be learning? What can we learn from other countries? Speaker 2 [00:12:41] We have to think about under the United Nations Declaration, the rights of indigenous people as a worldwide thing. It’s not just Canadian. And there’s a rush for capital to attract those trillions of dollars needed to transform economies. Different nations in different parts of the world have different ways of engaging indigenous people. And in our work we engage with some in New Zealand and in the United States. We also did some checking into South America. Every area is different. Canada has an edge on this and that we are more advanced in the concept of self-determination as being a right of indigenous people. Other nations are also pursuing that path. And what we found is that we have a lot to share with Indigenous people in other parts of the world, but it’s a worldwide competition right now to get these capital dollars into transformative economies. And Canada right now. I’m very pleased to say, is doing better than most countries in the world. Speaker 1 [00:13:32] What has shifted that has made Canada seen as more of a leader than laggard? Speaker 2 [00:13:37] I think what it is here is we have a rule of law. We have a very well-developed court system precedents on indigenous issues. Also, there’s a shift in the public attitude where people understand now that a lot of the resources needed to transform our economy are going to come from indigenous lands, the power stations, the geothermal plants, the hydroelectric facilities, the transmission lines, the critical minerals. I have an 18 year old daughter and she knows where the lithium came from in her cell phone and she knows what’s involved in the power generation. When she leaves the lights on, that’s changed here. There’s a massive attitude shift and people’s understanding of what’s involved in driving this economy. I think that’s an edge that Canadians have and we need to mobilize that. Speaker 1 [00:14:23] Mark. We’ve been exploring through this podcast series the incredible challenges that Canada is facing in terms of finding a balance between energy security, ensuring that we have affordable, accessible energy, and that we’re able to support other countries, especially our allies, with that while facing extraordinary inflationary pressures and balance out with climate security and the race. And it really is a race to net zero. How do you think about these challenges and many more from an indigenous perspective, which often suggests more time is needed if we’re to make the right decisions and we need to think generationally and not be in such a rush. How do you balance that need to really get things done in a hurry and not be wasteful in the process? Speaker 2 [00:15:10] I bring us back to the discussion of the atmospheric rivers and the fires in Lytton that happened last summer. You’re right, we have limited time now to save the climate and that affects all of us. It’s not just indigenous people versus the rest of the country or the federal government. By 2030, we’re supposed to have shifted most of our vehicle sales 50% anyway in this country over to electric vehicles. It takes more than eight years to build a mine, never mind power stations. We as indigenous people are in this with everybody else. So there have to be, as you said, smart decisions made. And the only way smart decision is going to be made is that there’s a wholesome, fully engaged discussion from the beginning about what we’re going to do. I think what you’re referring to in the in the sense of Indigenous people having longer timeframes for things is true. But our house is on fire and it’s a mutual house. We’ve got to start moving on this. And this is why at the Coalition we’re calling for an immediate discussion on all these projects upfront with Indigenous people at the beginning. Speaker 1 [00:16:07] Our house is on fire. What’s the one thing you’d like to see happen this year to help us move quicker in the direction we need to move? Speaker 2 [00:16:16] I would like to see some form of cheaper capital access for Indigenous people to make the investments in these projects to be proponents in them. That will be the number one challenge that we face as Indigenous people to get involved in these projects. We have 85 members across the country in the Coalition. All of those nations have joined because they want to be participants in these projects. And the problem we have is finding capital and that doesn’t mean a giveaway. Indigenous people are beyond that. They’re not looking for giveaways from these projects. We’re looking to have a meaningful involvement in the economy, in the projects, in the net zero solutions. Speaker 1 [00:16:49] And Mark, I think we should all be saying challenge accepted. That’s something we can solve. Mark, thank you for being on RBC Disruptors. Speaker 2 [00:16:56] Thanks for having me. I’ve enjoyed this immensely. Speaker 1 [00:17:01] Coming up after the break, I’ll speak with the elected chief of the Hyslop people who is transforming the economic prospects of her 1900 member nation. So stay right there. Speaker 3 [00:17:14] You’re listening to Disruptors and RBC podcast. I’m Teresa Do. The world has rightly been consumed with combating climate change for some time, but something changed this year as Russian troops invaded Ukraine. Policymakers across the world were confronted with a more immediate challenge. Energy security. Tensions between energy security and climate change were simmering for some time, but the war has laid bare the vulnerability of global oil markets and the ability of bad actors to disrupt energy supply chains. It’s its domino effect on other commodities and industries has already knocked out global economic growth. Just released a new RBC Economics and thought leadership report called The New Climate Bargain How Canada Can Manage Energy and Environmental Security. To read it, click the link in the show notes or visit RBC dot com slash thought leadership. Speaker 1 [00:18:10] Welcome back. On today’s episode, we’re speaking about our clean energy transition and how Canada’s indigenous peoples can help lead the way toward greater economic prosperity and sustainable development. And our next guest knows a thing or two about both. Crystal Smith is the elected chief of the Hyslop people, centered on Kitimat Village along BC’s northern coast. In November 2019, she was named chair of the First Nations LNG Alliance, a group committed to encouraging First Nations development of what was then a nascent liquid natural gas industry and providing employment and other sustainable benefits for BC’s Indigenous people. She Smith, welcome to Disruptors. Speaker 3 [00:18:49] Thank you for having me. Speaker 1 [00:18:50] Let’s start with your story and what got you into politics is not the first temptation for many people. What experience inspired you to run to be chief of the Haisla people? Speaker 3 [00:19:00] My stepfather was actually an elected council member when I was in elementary school, and I remember him coming home and talking about a few things that they were working on and that they were focusing on just getting a better understanding of what our chief and council back then did. I grew up admiring him for the accomplishments that he made in his life and didn’t necessarily want to be in politics, but definitely wanted to be a part of the betterment of our people, whether that I worked for the nation or but I always envisioned myself being as an employee or something here with the nation. And then later on, what actually got me into learning about more in-depth was I became the executive assistant to our first female chief councilor, Dolores Pollard, in, I believe it was 2009. And I stayed as the executive assistant until 2013 when Ellis Ross was running for Chief Councilor, and it was actually one of his speeches that he made at the Vancouver Convention Center in his belief of what the work that we were doing with the LNG industry and his vision of what it could do for our people, and immediately told them, I want to become a part of your team. What do you think if I run for council and kind of took the plunge from there? Speaker 1 [00:20:19] What a great story and a good reminder that the next generation is always watching and wondering if you can share a bit of the Haisla story, because it’s not a well understood story, unfortunately, across Canada. Tell us a bit about what the community has built over the last decade. Speaker 3 [00:20:34] One thing that I definitely think that is important for people to understand is that while we’re being a part of a new industry, that our nation isn’t the new industrial development overall. We’ve witnessed methanol plant, aluminum smelter, a pulp and paper mill be developed and built and operated in our territory for 20 to 50 years. And essentially we’ve sat on, on the sidelines, witnessed the destruction of our territory, our environment and our cultural resources to being active partners within a process where we had a seat at the table with LNG, Canada and Coastal Gaslink talking about what was important to us, what it means to be Haisla. Having our seat at the table gave us huge responsibility in terms of being the landlords of all of our resources and giving advice to developers and builders as to how to safely do it with minimal impacts to our environment. One of our elected leaders, Heber Maitland, he was a chief councilor in the eighties, I believe termed the saying that we just wanted a share and a say. We wanted a share of the wealth that was being generated. We wanted a share of the employment opportunities that were available. And we wanted to see as to how they were being built, how it was being developed. And today I can proudly say that we’re there as a part of LNG Canada, coastal gaslink and more so now is owners 51% owners of Cedar LNG with our partners. Speaker 1 [00:22:09] Pembina And in terms of development, what has been done differently because of that share and say. Speaker 3 [00:22:16] For an example one of our very important cultural resources to to our nation is still a camp. And so the spawning time or the, the time that they would come into the rivers is in between February and March. And there’s not too many other levels of government or any other entities that put a value on the election can. But it’s a huge staple of our Haisla identity. So in terms of the B.C. LNG, Canada was doing some dredging and within that process of doing the permit application, we worked out the issues prior to that permit being applied for so that as opposed to the permit going into the regulators and then coming back to us for our questions, it actually went along with our support when being filed. And that involved no dredging during February and March when the oil can could possibly arrive. So there’s many things like that within the process of what we’ve implemented into the discussions and essentially negotiations. Speaker 1 [00:23:24] One of the big ideas we’re trying to explore is this challenge that Canada now faces of needing to produce more resources both for Canadians and for the world, and do that more sustainably. We have very ambitious climate targets, among other environmental goals. And at the same time, to pursue reconciliation in more and more meaningful ways. How do we do that, especially in the short timeframe that many people believe we have to reach goals like net zero? Speaker 3 [00:23:54] Well, for one, for the LNG. Even before ESG became a thing, our team actually sat in in a room in Vancouver for, I want to say, a week to go over proposals for a partner. How much money the nation would make wasn’t a huge priority. The priority was what kind of technology will you use and will you use air cooled or water cooled? We stuck to what we wanted for our environment, and we chose a partner that aligned their visions and their desires with the nation. And actually, I remember throughout that process there was one RFP that came in and that the executives would not leave the topic. And they were very adamant that the project needed to make money. If the project didn’t make as much money as they envisioned, the nation wouldn’t make as much money as we desired. And I had looked at our team and I said, I don’t think this conversation needs to go any further. And the room kind of looked at me stunned. Our team looked stunned. And I said, there’s no compromise. And what we’re saying is that we want minimal impacts. I’m not willing to stand up in front of our community and say we chose money over our environment. And so I looked at the rest of the elected leaders and said, are you willing to do that? And the answer was no when the conversation ended. Speaker 1 [00:25:16] You’ve said that the Coastal Gaslink project, which will transport natural gas from north eastern B.C. to Kitimat, promises, I think you use the word transformational benefits for the Haisla nation. Can you explain what you mean by transformational? Speaker 3 [00:25:30] You know, we think about what we’ve been able to do and being a part of a process where, you know, coastal Gaslink and LNG Canada took the time to understand and get to know who we are and why certain circumstances remain the same. And it was because of our past history with industrial development and having proponents come in and, and learn who you are and what you want to accomplish and align themselves of saying, this is where we can help with that vision. Here is where we can help with that goal and being partners within that process and providing resources that necessarily weren’t provided before. We have the lowest unemployment rate right now. If you want to work, you can work. There’s nobody that that doesn’t have an opportunity. So that’s on one level where I’m saying it’s transformational. Analysts own source revenue or funds being generated by impact benefit agreements. We now have the ability to work on behalf of our people. Our chief and council and our staff have that ability to create programs that actually deliver what is required and what is needed. And we’re able to prioritize what is important. Our culture and language is a huge example. I had a meeting last night at dinner meeting, and I’ve got a twin identical twin sister and I was sharing how my day started yesterday. It’s my first day back after two weeks off of work, and she shared an audio recording of her speaking our language. Sorry. Speaker 1 [00:27:08] No. Take your time. Speaker 3 [00:27:10] We grew up with our grandparents, and when they didn’t want us to know what they were talking about, they would speak our language. And hearing her speak, it gives me hope that my grandchildren will be able to speak our language and will know exactly what it means to be high. So they will learn our culture. They will learn how to harvest food, they will learn our language. And that is so important. Speaker 1 [00:27:41] Thank you for sharing that. It’s inspiring, it’s beautiful. And also, I imagine quite challenging for as it is for any community with strong traditions around the world to preserve culture and tradition with respect to indigenous rights. One of the questions is with the concept of free, prior and informed consent, one of the challenges that many see with consent is who it comes from. And there’s much debate, as you know, about the role of hereditary or traditional leaders versus elected leaders, chiefs and council. How do you balance different forms of governance within the community and ensuring that there is concern, but sometimes consent doesn’t come with unanimity? How do you think through those challenges. Speaker 3 [00:28:35] Regardless of your if you’re a hereditary or elected, you have an obligation to your membership and they are the deciding factors as to who represents them, who speaks on behalf of them and how that looks. You know, some communities are further advanced than others, such as Katla. I absolutely admire their process and how both their elected and hereditary systems essentially work together and how they get to agreements for for their members. Our community said we have the support of our hereditary leaders in regards to the work that the elected leadership is doing right now. Our membership acknowledges that and that the predatory system wants their elected body to represent rights of title. And you know that that process and I honestly reflect back and ask why. And when I listen to our Chiefs speak, it’s essentially to benefit all types of members. They want that ability for for doesn’t matter which family you come from, it doesn’t matter where you live. You deserve a benefit. And essentially, that’s what that that’s their role as well as a predatory leader. It is to look after our land. It is to make decisions that are in the best interests of the land and our people and to share that wealth. Speaker 1 [00:29:59] We’ve covered a lot of ground here. I wonder if I can wrap up with one last question about economic reconciliation and what you think the rest of Canada needs to come to grips with. For communities like yours and leaders like you to navigate this journey. Speaker 3 [00:30:16] It’s a process that but we have to be a part of and that it’s putting a lot of responsibility and expectations on proponents and other levels of government. But this process internally has been long, difficult, huge learning curves in terms of what we’ve been a part of. So essentially give some time because it’s not an overnight process. An entity has its shareholders and its board of directors. Our shareholders are 1900 members, and that’s just specifically Haisla and that’s who essentially gives us our mandate of a yes or a no. And that process takes a lot of time and a lot of effort to accomplish. So give the First Nations communities the time and again. Not all of us are the same. Some of us will be a little bit quicker and have had a lot of practice through that process. But give time, get to know the community, get to know what their goals and what their visions are. Speaker 1 [00:31:14] Time and balance. Those are two key words you’ve stressed today. Christel, thank you so much for being part of RBC Disruptors. Speaker 3 [00:31:22] Thank you for having me. Speaker 1 [00:31:27] What an inspiring set of conversations. And I don’t know about you, but it takes me back in time. Actually, about 20 years ago when I was a newspaper reporter, spending a year crisscrossing Canada, engaging with different indigenous communities from Vancouver Island to Cape Breton to the far north, trying to understand this great quiet divide we have in the country between Indigenous and non-Indigenous peoples. And at the time, many of these communities were actually leading an economic revolution, whether it was through salmon farming or hockey franchises or the hotel industry or nickel mines up in northern Quebec. And it was the rest of Canada that was slow to catch on. We’re still too slow. But as we accelerate through the climate transition, it’s time for Canadians to recognize that indigenous communities and indigenous peoples need to help lead this transition. And they can take all of Canada to an incredible place if we partner with them and if we give them the say and share that we heard about in this conversation, that’s the only way that we’re going to get to energy security, climate security, economic security and the kind of Social Security that Canadians have become a model for to the world in previous decades. It’s the only way we’ll be able to build sustainable prosperity for all and for generations to come. That’s it for this time and this special Climate Conversation series. Thanks again to our guests, Mark Podlasly and Chief Crystal Smith. And let us know what you think. Just email us at disruptors at RBC dot com or follow us on your favorite social channels. Join us next week for the latest Tech and Innovation Buzz with our ten minute take series. Until then, I’m John Stackhouse, and this is Disruptors, an RBC podcast. Talk to you soon. Speaker 3 [00:33:19] Disruptors, an RBC podcast is created by the RBC Thought Leadership Group and does not constitute a recommendation for any organization, product or service. It’s produced and recorded by Jar Audio. For more disruptors content, like or subscribe wherever you get your podcasts and visit our rbc.com social disruptors.