Ontario’s new cannabis market has retailers buzzing


It’s official: following through on a campaign promise, Ontario’s new Progressive Conservative government will be allowing private retailers to sell cannabis throughout the province. The rollout will see the government-run Ontario Cannabis Store (OCS) sell cannabis online only immediately after federal legalization on October 17, followed by hundreds of private brick-and-mortar stores that will be opening in spring of 2019.

The new framework is a radical shift in policy from the previous Liberal government, who planned to only sell cannabis in government-run OCS stores under the umbrella of the Liquor Control Board of Ontario. The new private retail system could see up to 500 retail licenses by next spring, a far larger number than the 40 government-run stores Wynne had promised and what critics called inadequate.

Making the announcement after the markets closed on Monday, Attorney General Caroline Mulroney stressed that public safety is the province’s priority as it rolls out its new policy."We will be ready to put in place a safe, legal system for cannabis retail that will protect consumers," said the AG, "We will also be ready to undermine the illegal market and protect Ontario's roads.  Most importantly of all, we will be ready to protect our kids."

These new licensed retailers will operate under strict rules and guidelines, and will face stiff fines if they are found to violate any terms of the agreement. To help consumers know they are purchasing from a licensed retailer, the government will be issuing an Official Ontario Cannabis Retailer Seal. For those concerned about cannabis stores in their neighbourhood, there will be a retail “opt-out” clause available to municipalities which will prevent physical stores from opening within their boundaries. Queen’s Park will also be providing up to $40 million to local governments to help keep their communities safe.

Vic Fideli, Ontario’s Finance Minister, made it clear the government has no intention of getting involved in running brick and mortar stores. "Instead, we will work with private sector businesses to build a safe, reliable retail system that will divert sales away from the illegal market," he said.

You can bet Bay Street will be thrilled with the news, as a significant amount of investment is waiting to be untapped in the new private market system. It will be interesting to see how the markets react in the short and long term future as recreational cannabis becomes more mainstream overtime. Our expectation would be that as was the case with producers, the initial wave of retailers will be consolidated over time until only several large and dominant players (and perhaps a few boutiques) remain.

Provident will continue to follow developments in this sector and will provide our insights which you can now subscribe to and not miss out on any of our analysis.

This is the biggest risk missing from your crisis PR plan


When brands plan for an unforeseen PR disaster, they typically prepare a list of potential scenarios that could impact their business – anything from a data breach to a natural disaster – along with standby statements so that they can respond with speed, if necessary.

Often, these plans contemplate how the brand would respond if its CEO or another senior executive officer was accused of sexual harassment or got into a car accident while drunk. These things happen, so preparation is important.

However, many companies still leave themselves vulnerable to serious reputation risk by failing to consider a massive and unpredictable blind spot: their rank-and-file employees, behaving badly outside of work hours.

Before Facebook and Twitter gave the average person the ability to reach almost any brand, companies could at least claim that an employee’s inappropriate or offensive behaviour on their own time was exactly that: their own, outside the company’s control.

Now, with the public just a few keystrokes away from expressing outrage publicly and in real time, the game has changed. Brands have to be prepared to act quickly and decisively when the actions of a single worker threaten their very valuable brands.

Companies are starting to recognize this reality.

Hydro One fired an employee in 2015 after he shouted an obscenity at a TV reporter during a live report at a Toronto FC game. The incident garnered immediate and widespread outrage on social media, and support for the TV reporter, which included a comment about sexual harassment from then-Premier Kathleen Wynne. (Hydro One eventually re-hired the employee, after an arbitrator found he had made “extensive efforts” to make amends). Then, a year later, there was the famous Blue Jays game beer toss, which cost a Postmedia employee his job, and left him facing criminal charges. The incident again caused a wave of condemnation on social media.

These two examples show how the public, equipped with digital pitchforks and torches, can force the hand of even the largest brands. Could companies simply issue a condemning statement in an instance like this? Absolutely, but with a caveat. While PR teams need to be prepared to swiftly respond with a strong and unequivocal statement, management and HR teams must also be ready to go further if necessary.

That means crisis plans have to consider if the company is ready to fire an employee if the case is egregious enough, pay severance as appropriate and then potentially have to argue its case in front of a court if the employee sues the company.

The stakes can be really high, as the world saw in May, when Roseanne Barr, the star of a successful reboot of her original Roseanne sitcom, posted a racist tweet. Just hours after the post and resulting online anger, TV network ABC strongly condemned Barr’s comments and cancelled the wildly popular (and financially lucrative) show.

At the same time, responding quickly – or too strongly – can be fraught with legal risk. For example, what if a brand condemns or fires an employee for a criminal offence before that person is proven guilty?

Scotiabank is facing such a case right now, after one of its employees in Toronto was charged with child luring, sexual assault and other offences earlier this month. These are gravely serious allegations, the bank’s name has appeared in many headlines related to this case, and its brand is being damaged with every new article. However, these are also charges that haven’t yet been tested in court. The bank took a balanced and appropriate course of action by refusing to comment given the ongoing investigation, and not answering questions about the worker’s employment status.

It’s clear companies have nowhere to hide when it comes to the reputation damage an off-duty employee can cause to a brand. PR and management teams would be wise to address this reality head-on, rather than reactively trying to fix things in the moment. By then, it could already be too late.

Why ‘no comment’ is never an option when your company’s values are on the line


Giant companies with tens of thousands of employees aren’t typically known for their speed and agility when it comes to making decisions. Corporate bureaucracy can often bog down a company’s ability react quickly to an impending issue that needs immediate attention. And when that issue that has the potential to erupt into a full-blown crisis, speed is of the utmost importance.

That’s exactly what happened after an employee of Sonoco, the U.S.-based packaging company, was accused of racially profiling a black woman at a private community pool. A man approached the woman and asked for her ID, before calling the police. The incident was filmed by the woman, and the video was uploaded to YouTube and has amassed millions of views. It also quickly drew widespread condemnation and sparked calls for Sonoco to intervene after the man, Adam Bloom, was outed as an employee. Given how news travels at breakneck speed, Sonoco recognized that the actions of a single employee could have major negative repercussions for the company’s brand.

Realizing there was very little time to act to mitigate the damage this could have on its brand and reputation, Sonoco enacted their crisis management plan, which all companies must have in place in order to respond quickly. Had Sonoco not had a plan in place, you can imagine just how long a response might have taken.

Shortly after learning of the incident, Sonoco put out a well-written open letter from its CEO that touched on three key points that all company’s should do if faced with a similar situation:

  • Show decisive action has been taken, such as termination of employment;

  • Draw attention to the company’s values; and

  • Issue an apology on behalf of the company.

It’s of course important to note that even though the incident occurred outside work, the company’s values were at stake -- after all, a refusal to act or acknowledge the incident would have set a vastly different tone than the open letter from the CEO. Sonoco’s response clearly underscores the reality of today’s business world: companies must be ready to be held accountable for their employees’ actions both inside and outside work.

The manner in which Sonoco managed this particular issue is a lesson to firms big and small -- when a company’s values are breached, action must be swift and direct. ABC and Disney make for another example in their decision to cancel Roseanne Barr’s show because of her racist tweets. What not to do? A slow, plodding internal review or a refusal to comment are almost guaranteed to cause further reputational damage. Being open, transparent and willing to put actions behind corporate values is what the public expects, and what all companies must deliver.

Change officially comes to Queen's Park

 Photo: Benson Kua

Photo: Benson Kua

Change officially comes to Queen’s Park today, with Doug Ford sworn in as the 26th Premier of Canada’s largest province. After a bitter election that saw the incumbent Liberals sink to third-party status and the NDP surging to the opposition benches, Ontario now has a Progressive Conservative government for the first time in fifteen years.

Braving truly sweltering heat, Ford was sworn in outside in public (not seen since former Liberal Premier David Peterson did the same in 1985), on the front steps of Queen’s Park in front of hundreds of supporters in a nod to his campaign promise that his government will be for the people.

In what could be considered a sort of mini throne speech, the newly minted Premier listed off his government’s key priorities that his cabinet will tackle as soon a possible. This included pushing back against the federal government’s cap-and-trade program, vowing to create more jobs and prosperity and stand shoulder-to-shoulder with his provincial counterparts in defence of Nafta. Most importantly, he pledged to conducting a full audit of government spending, saying the PCs will review everything “line item, by line item” to back up his promise to find $6 billion in efficiencies.

Despite Ford’s twelve-minute speech, his plan still lacks specifics. The Tories have yet to release a fully-costed platform, causing uncertainty for a lot of industries across the province who fear their funding could get axed. They have good reason to worry, and Ford is moving fast, having already announced a government-wide spending and hiring freeze.

Ford’s cabinet is a mix of political heavyweights and newcomers, including his party leadership rivals. First-time MPP and Harvard educated lawyer Caroline Mulroney has been tapped as Attorney- General and Minister Responsible for Francophone Affairs. Party stalwart Christine Elliott is Deputy Premier and Minister of Health and Long-Term Care. Here are the rest of his cabinet appointments:

  • Ford himself will also serve as Minister of Intergovernmental Affairs

  • Peter Bethlenfalvy, President of the Treasury Board

  • Raymond Cho, Minister of Seniors and Accessibility

  • Steve Clark, Minister of Municipal Affairs and Housing

  • Vic Fedeli, Minister of Finance and Chair of Cabinet

  • Merrilee Fullerton, Minister of Training, Colleges and Universities

  • Ernie Hardeman, Minister of Agriculture, Food and Rural Affairs

  • Sylvia Jones, Minister of Tourism, Culture and Sport

  • Lisa MacLeod, Minister of Children, Community and Social Services and Minister Responsible for Women’s Issues

  • Monte McNaughton, Minister of Infrastructure

  • Rod Phillips, Minister of the Environment, Conservation and Parks

  • Greg Rickford, Minister of Energy, Northern Development and Mines, and Minister of Indigenous Affairs

  • Laurie Scott, Minister of Labour

  • Todd Smith, Minister of Government and Consumer Services, and Government House Leader

  • Lisa Thompson, Minister of Education

  • Michael Tibollo, Minister of Community, Safety and Correctional Services

  • Jim Wilson, Minister of Economic Development, Job Creation and Trade

  • John Yakabuski, Minister of Transportation

  • Jeff Yurek, Minister of Natural Resources and Forestry

The new government isn’t wasting any time either. They are holding their first cabinet meeting today, and will be recalling the legislature for a rare summer session on July 9 to tackle a number of issues such as high gas prices and Ottawa’s plan to force provinces to adopt their cap-and-trade carbon tax policy which Ford has vowed to fight.

So what does this all mean for Ontarians? One thing for sure is that we are going to see a lot of belt-tightening and that programs the government doesn't view as integral to the health and security of the province should be on notice to see their funding levels reduced or cut altogether. Provident will be monitoring the events at Queen’s Park and is ready to assist your organization navigate the complexities that a new government brings and how it will impact your mandate.

Bay Street breathes sigh of relief as Progressive Conservatives sweep Ontario


A sea of blue swept electoral ridings across the province last night at the Progressive Conservatives secured a commanding majority government, ending 15 years of Liberal rule. This seismic shift saw Premier Kathleen Wynne’s Liberals reduced to non-official party status with only 7 seats, while the New Democrats rode an orange wave into the official opposition benches.

As we’ve noted before, this was Premier-designate Doug Ford’s election to lose. Despite the Tories holding a commanding lead in the early days of the campaign, a series of strong debate performances by NDP Leader Andrea Horwath saw her party leapfrog the Liberals in the polls and came within striking distance of the Conservatives. While polls showed the PCs and NDP running neck-and-neck in the final days before the vote, the first-past-the-post electoral system allowed Ford's party to win a substantial more number seats than the NDP, 76 to 40, even though the popular vote was much closer at 40 per cent to 33 per cent.

As for the Liberals, it couldn’t have gone much worse. It was no surprise that they would lose the election. In a rare move, Wynne conceded defeat last week, saying she knew she was not going to be leading Canada’s largest province for another term. Despite barely holding onto her Toronto-area riding, Wynne resigned as party leader. Whether or not she will stay on as an MPP is yet to be determined. But one this is certain is the Liberals will now have to select an interim-leader.  

So what does this mean for the province going forward, and, in particular, the business community? For starters, there was a sigh of relief on Bay Street this morning. There was concern surrounding the NDP’s plan to raise corporate tax rates at a time when the United States is aggressively slashing their own, potentially impacting competitiveness and making it harder for Ontario to attract foreign investment. Despite the PCs’ promise to make Ontario more competitive, there is little substance to their plan. The Tories failed to release a full costed platform during the election which leaves a lot of lingering questions about their fiscal policy despite Mr. Ford pro-free market stance.

Ontario hasn’t had a new premier in recent history who has never held elected office at Queen’s Park. While critics were quick to point out Doug Ford’s lack of provincial politics experience, he is surrounded by many political veterans and newcomers with senior private sector experience who will likely be appointed to cabinet. Here’s a look at who could potentially head up some major portfolios:

  • Finance minister: Vic Fedeli, former interim PC Party leader, Rod Phillips, former CEO of OLG and Peter Bethlenfalvy, who hails from senior positions at TD, Manulife and others. 

  • Health minister: Christine Elliott, who most recently was patient ombudsman. Prior to that, she was shadow health minister under PC opposition leader Tim Hudak.

  • Energy minister: Todd Smith, who has been the PC’s point man on hydro prices as energy critic.

  • Education minister: Lisa MacLeod, the long-time Tory legislator has been the party’s education critic in the past.

  • Attorney general: Caroline Mulroney, the Harvard educated lawyer who was also a leadership contestant against Ford.

Ford also has a handful of political heavyweights such former deputy leader Steve Clark and others to draw from to fill his front bench. While the dust is still settling from last night’s vote, we should expect the new government to announce its cabinet in the coming weeks.

With the Tories now in power for the first time since 2003, it will be interesting to see how this party will govern. Armed with a majority, you can expect the PCs to move fast on issues such as repealing the carbon tax, moving ahead with the Ring of Fire, and taking action to reduce hydro prices. How exactly they plan to do it, we’ll just have to wait and see. We at Provident will be closely monitoring all developments at Queen’s Park and are ready to assist your organization with navigating the complexities that comes with a new government.

Will this election leave Ontario’s cannabis laws up in smoke?


As Ontarians prepare to vote in what has been one of the most raucous provincial elections in recent memory, one issue that has not received a lot of attention is how this province plans to manage cannabis once it becomes legal. With recreational use of cannabis expected to come into effect on Canada Day, there still remains a cloud of uncertainty about whether the federal government will in fact meet that deadline. It’s also far from clear how Ontario plans to regulate and distribute the product. Under the proposed legislation, which is currently facing delays in the Senate, each province has the ability to set its own distribution methods. While many provincial governments have indicated how they plan to move forward, Ontario’s too-close-to-call election is causing a lot of anxiety for those looking to operate in this booming industry. Let’s break down where each party’s stands on this contentious issue and what it means for consumers.

The incumbent Liberals have announced that they intend to legally distribute cannabis through the Ontario Cannabis Store, a subsidiary of the government-run Liquor Control Board of Ontario. Should the Liberals win re-election, Premier Kathleen Wynne’s plan would see 40 of these stores rolled out across the province in 2018, and that number would double by July 2019. The Liberals believe that government-controlled distribution is the best course of action, and in a bid to crack down on the black market, the government will set up a special task force to shut down illegal storefronts that have popped up across the province since Prime Minister Trudeau announced that legalization was coming.

The Progressive Conservatives under Doug Ford have signaled they are open to a free-market approach that would allow private retailers to legally sell cannabis. While Wynne called Ford’s plan reckless, Ford has since walked back his comments saying that he’s open to seeing how the Ontario Cannabis Store performs before allowing private retailers to enter the marketplace. Ford’s free-market approach could be a big hit with non-traditional conservative voters. According to a Nanos poll, over half of Ontarians would rather see regulated private retailers of cannabis than just the government-run stores.

The New Democratic Party has been visibly quiet on this issue. It’s worth noting that cannabis is not mentioned at all in their election platform. The party, under Andrea Horwath, has long supported the legalization of cannabis, but has so far offered little in terms of policy specifics on regulation and distribution. On the campaign trail, Horwath has been critical of Wynne’s plan to only roll out 40 stores over the first year, saying this small number of vendors will only turn people to the black market, given the province’s geographic size and population.

With recent polls showing the PCs and NDP running practically neck-and-neck, the cannabis industry is no doubt feeling rather restless waiting to see who comes to power, and for good reason. Billions of dollars are at stake, and as Canada prepares to become the first G7 nation to legalize cannabis, it’s safe to say that the whole world is watching.  

Provident Communications will be offering our weekly insights throughout the election. Led by me, Vice-President, Public Affairs, our team is ready to assist you with any opportunities or challenges that present themselves over the next week and beyond. For more information, please don’t hesitate to contact me at michelle@providentcomms.com.

Roseanne's quick cancellation offers a case study in high-stakes crisis management

 Image courtesy Adam Rose / ABC 

Image courtesy Adam Rose / ABC 

With just a few keystrokes, controversial sitcom superstar Roseanne Barr unwittingly put the wheels in motion that would cost everyone involved with her show their jobs, and the show’s network, ABC, millions of dollars. As in many instances before this, what happened is a cautionary tale about the power of social media. However, it also provides a great case study on how a top brand moved - boldly, if perhaps imperfectly - to contain a crisis and uphold its values.

Before we dive into the rapidly developing events of Tuesday morning, we need to take a step back and understand how Roseanne was a TV show of strategic importance. For starters, its lead actor who the show is named after is a well known Trump supporter, an oddity in liberal Hollywood. Recognizing her appeal with the American heartland, ABC took a gamble on reviving the show that would put her politics on full blast. Turns out that gamble paid off, and Roseanne became a smash hit. Many Americans who subscribe to the ‘Make America Great Again’ motto believe the entertainment industry doesn’t value them. This show offered them inclusion, so much so that their ratings obsessed President even tweeted his support for his newfound Hollywood surrogate in Ms. Barr.  

While politics was a major driving force in the show’s appeal, it’s not what caused it’s sudden cancellation as many of Roseanne’s supporters will try to argue. This is not some liberal, mainstream media conspiracy. More plainly, it was about racism. Ms. Barr’s bizzare, racist tweets were the point of no return for the TV network. Yes, ABC had been criticized in the past for holding its nose at her tweets, but this latest digital outburst from Ms. Barr went much too far, and they had to act fast.

In a time of crisis, time is always of the essence. The public, stakeholders and internal audiences expect a response, and they expect it immediately, with force. Case and point: As Twitter began to erupt with backlash against Ms. Barr’s tweets, there was radio silence from the ABC brass. We are talking hours here, not days, and it goes to show how fast companies are now expected to respond.

The network knew what was at stake if it didn't act fast. We’ve seen how quick the public can mobilize against networks, which is often followed by advertisers pulling out and boycotts of shows that ultimately hurt a network’s bottom line. Recognizing this, ABC Entertainment president Channing Dungey issued a brief statement, saying “Roseanne's Twitter statement is abhorrent, repugnant and inconsistent with our values, and we have decided to cancel her show.” By drawing attention to its corporate values, ABC made it clear that racism has no place its its value structure, and that no matter how profitable a show is, doing the right thing is always the right choice.

Now, ABC could have issued a statement condemning Ms. Barr’s comments. Then it could have waited and eventually caved to pressure that inevitably would follow to either fire Ms. Barr or take the show off the air. It didn’t, and instead, it acted in bold, unequivocal fashion that put their values before profits -- and, perhaps, ahead of the show’s employees.

Some have pointed out that many actors, crew, writers, production staff and others on the show will lose their jobs alongside Ms. Barr as a result of her actions. It’s a vaid critique of what ABC did, and some will call it heavy handed. While we can’t be sure, we would guess that ABC and Disney did this arithmetic, and will likely offer financial restitution to those impacted in this relatively rare instance. There was a reputational calculus here, as well - ABC believed that the entirety of the blame for the job losses would also fall on Ms. Barr. And it appears they were right.

In a world where news travels at breakneck speed, corporations must be ready to respond accordingly. The failure to act and say nothing almost invariably causes more harm than good, and there is no excuse for not being prepared.

Ottawa’s Pipeline Gamble Poses Major Political Risk


The federal government is investing more than just political capital - and taking on significant risk - as Finance Minister Bill Morneau announced that Ottawa will be putting billions of dollars of public money towards building the Trans Mountain Pipeline. The news comes just days before Kinder Morgan’s self-imposed deadline to pull out if it didn’t receive assurances the project wouldn’t be obstructed.

Tuesday’s announcement also comes after months of political wrangling that saw the governments of British Columbia and Alberta squared off in bitter public battle over the pipeline’s construction. Alberta’s Premier Rachel Notley has long been a champion of the pipeline that would move Alberta crude and refined oil to the BC coast for international export. BC Premier John Horgan, a fellow New Democrat, stalled the pipeline’s approval citing environmental concerns. Given Horgan’s minority government is propped up by the Green Party, the first-term Premier had virtually no political room to maneuver. Despite intervention from Prime Minister Justin Trudeau, who tried to broker a deal between the two western provinces, no agreement could be reached, putting the project in jeopardy.

Ottawa’s decision to take over the pipeline project is unprecedented in Canadian history, and is likely the result of failure to reach political consensus between Victoria and Edmonton. For the federal Liberals, who face re-election next year, getting construction underway was absolutely critical. If the project had died under their watch, it would have been a major embarrassment for the Prime Minister who has long championed its development, despite coming at odds with many in his supporters who were against it. While polls indicate that the majority of Canadians support the project, many didn’t want to see their tax dollars paying for it, which could become a ballot box question in the next election. The Liberals are taking a big gamble on this project and are assuming significant political risk.

The total bill of the project is expected to be $4.5 billion, which the government says it will recoup once it sells its stake at a later date, stressing Ottawa has no intention to be the long-term owner of the pipeline. Many in oil sector were pleased with the announcement, including Kinder Morgan, who saw its stock jump slightly this morning. However, there are still questions as to whether or not the federal government will be able to find a suitable buyer given the high level of risk associated with the controversial project.

Provident will be following this project closely and will be offering our insights. Our team has extensive experience in the energy sector, along capital markets, particularly M&A transactions, which will be a key component of this pipeline’s success.

Could an Orange Wave Crash Doug Ford's Party?


In what many predicted to be a two-way race between the incumbent Liberals and the Progressive Conservatives, the NDP now finds itself polling in second place. Following two strong debate performances, NDP Leader Andrea Horwath’s message appears to be resonating with voters. According to a recent report, the Ontario NDP could be on the verge of riding an orange wave into official opposition status, just like Jack Layton did in the 2011 federal election.

The latest seat projections from Barry Kay at the Laurier Institute for the Study of Public Opinion and Policy show the Tories winning 72 seats, the NDP securing 30, and the Liberals falling to 22. While this still puts the Doug Ford PCs well within majority territory (they need 63 seats to achieve that), the likelihood of the NDP as the official opposition is becoming more of a reality. With these rising fortunes, the NDP finds itself having to fend off more attacks, and even questions about the possibility of a coalition government.

The notion of a coalition government was quickly put to bed by Horwath, who said there was no way she’d partner with the Wynne Liberals, have struggled to make any real progress in the campaign thus far. There’s also the fact that the Liberals remain deeply unpopular in the province, so a coalition wouldn’t be helpful to the NDP’s brand.

On the other side of the spectrum, it's not only the PC Party that is taking notice of the NDP’s recent boost in popularity. Ontario Proud, a right-leaning Facebook page which boasts over 350,000 followers, is now training their sights on the NDP. From a communications perspective, this is a boon: the PCs are in a unique position this election to have such a large and vocal third-party activist -- something the Liberals and NDP can’t currently muster.

While it is far too early to predict the final outcome of the vote, it will be interesting to watch how much the NDP can eat into the Tories’ lead. Will it be enough to reduce their victory to a minority government? That will depend on Ford being able to stay on message and avoid any major gaffes, and for Horwath to continue to grow her popularity (she has benefited from significant increase in net favourability over the last three months) while at the same time making inroads in new ridings across the province - as she works to position the NDP as the "anyone but Ford" option. This could be difficult for the NDP as they have a small base and will need to work hard to win over and retain converts. The NDP surge could be short-lived if the Liberals manage to turn things around, but if they don’t, they could find themselves reduced to third party status -- a remarkable change of scenery for the party which has been in power for the past decade and a half.

The third and final leaders debate will be held on May 27. Watch this space for our insights and analysis as the three parties make their final push ahead of the June 7th vote.


Provident Communications will be offering our weekly insights throughout the election. Led by me, Vice-President, Public Affairs, our team is ready to assist you with any opportunities or challenges that present themselves over the next month and beyond. For more information, please don’t hesitate to contact me at michelle@providentcomms.com.