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October 6, 2025 52 mins

Trade policies and tariffs can be overwhelming, but they have a real impact on your bottom line. BDC’s Director of Economic Research, Arnaud Franco, breaks down exactly what SMBs (small to medium-sized businesses) need to know to navigate U.S.-Canada trade with confidence.

Arnaud walks us through why tariffs exist, how they impact different industries, and what compliance really looks like. Plus, he shares practical strategies for managing inventory, optimizing supply chains, and running daily operations more smoothly.

Whether you’re running your first small business or looking to refine your operations, this episode of the Secret Life of Inventory is packed with actionable insights to help you make smarter, more informed decisions in today’s economic landscape.

🇨🇦 Resources: 
• How to Tackle Tariffs: https://www.bdc.ca/tariffs
• Consulting: https://www.bdc.ca/en/consulting
• Export Development Canada: https://www.edc.ca/

0:00 - Teaser
0:15 - Intro
1:35 - How did you get into economics?
3:21 - What is the definition of economics?
4:11 - What does economic research look like?
5:37 - Why would governments implement tariffs?
7:59 - What’s the current situation between the U.S. and Canada?
12:49 - What tariff trends should business owners pay attention to?
14:10 - Is the paperwork compliance process difficult?
14:56 - What are the common misconceptions about tariffs or trade policies?
15:53 - How should businesses navigate tariffs?
18:51 - Which industries are impacted the most?
20:34 - What inventory techniques do you recommend?
22:00 -  What professionals should you consult?
23:11 - How is the Canadian economy right now?
26:11 - What is the U.S. strategy?
28:10 - BDC’s Buy 5 High 5 Campaign
30:04 - What is micro vs. macroeconomics?
32:18 - What macroeconomics should business owners be aware of?
37:03 - What microeconomics should business owners look for in their daily operations?
40:32 - What challenges are SMBs facing?
43:46 - Arnaud’s past professional life
45:11 - How should SMBs think about their supply chain differently?
47:35 - What one advice would you give to entrepreneurs?
50:23 - What are some helpful concepts or frameworks business owners should lean into?
52:06 - Outro
52:19 - What’s next for Arnaud and BDC?
53:36 - Connect with us and share!

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Transcript

Episode Transcript

Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
When the good would get to theborder and the client said,

(00:01):
are you aware that your good issubject to a 25% tariff?
And the producerwould say, well, no,
I'm U.S.M.C. compliant,at least I think so.
And it turns out that theyhadn't filled out the paperwork
to become compliant.
So there's been a lot of that.
Yeah.
So this year.

(00:23):
Hello everybody I'm Jared.
Hi, I'm Melinda.
And welcome back toThe Secret Life of Inventory.
This is a show where we divedeep into the hidden mysteries
of inventory management.
And we uncover the hiddenmysteries that help businesses
like yours optimize theirworkflow and succeed.
Today, we're joined by aspecial guest, Arnaud Franco,
who's the director of economicsat the Bank of
Canadian Entrepreneurs,better known as BDC.

(00:46):
He's here to help us explorethe evolving landscape of
tariffs and how they'reimpacting the Canadian business
and the economy.
Yep.
And Arnaud actually brings 20years of analytical experience
as well as15 years of management
and leadership training.
He currently manages ateam of economists that bring
actionable insights to small tomedium sized enterprises, so he
is like the perfect person totalk to when it comes to all

(01:06):
this craziness that's goingon with tariffs.
And this is important becausetariffs aren't
just political headlines.
They have real effects on howinventory moves, what it costs
and how sustainablebusinesses can be.
And it's not just aboutthe businesses, but the people
behind the scenes who are doingtheir best to stay afloat,
manage rising costs and supporttheir teams and families.
So we really appreciate you,Arnaud, for coming on to

(01:28):
the pod, and we can't wait todive into your insights.
Yes.
Thank you so much.
Welcome.
Thank you.
Thank you for having me.
Okay, so Arnaud, before we getinto the tariffs and all the
meat of it, why don't you maybefor our audience, let us,
you know, let them know whoyou are, kind of how you
got into, uh, into economics.
Sure.
Thanks.
So my name is Arnaud Franco.
I'm director of economicresearch at BDC.
So I manage the teamof economists there.
And our mandate is to serve thesmall and medium business

(01:49):
community of Canadaand to encourage
growth and development.
So I've been at the bank forabout a year and a half.
It's been a great journey,a great a great challenge and
a great opportunity.
But before then, I spent 17years working in the
forest products industry.
As of.
17.
Years, 17 years.
So a long, long time.
Looking more in on thecommodity side of things.
And that's actually where I gotquite exposed to supply chain.

(02:12):
But going way back, I economicsis kind of in my blood.
I come from afamily of economists.
Well, my fatherwas an economist.
My older brother is aneconomist as well.
So he.
Runs in the.
Family.
I was I was bornin Washington, D.C.,
in the US, and my familyactually moved to Africa,
to Senegal when I wastwo years old in 1984.
My dad worked for theInternational Monetary Fund,

(02:33):
so he was an economist there,and he got deployed through
various African countries.
So we lived in Senegal,we lived in Zimbabwe, and then
my family lived in BurkinaFaso as well.
And I didan internship there, actually.
A lot of different places.
Yeah.
So I've had that reallywide exposure, which is really
given me the chance to to seethe world and also to to
understand that peopleare very different in

(02:55):
one place depending.
Where you grow up.
Yeah.
Yeah.
And that can really be appliedto businesses as well.
You know, businesses come inall different shapes and sizes.
And nowadays,especially in Canada,
business owners are also fromall different walks of life.
So that global exposure hasreally given me, you know,
a good knowledge of of of thatadaptability and flexibility
that helps with aidingCanadian businesses today.
That's a reallygood perspective, I guess,

(03:15):
having all that.
Yeah, that was great.
So for those who don't know,can you break down what is the
definition of economics and whyis it important?
So economics is the study of ofmoney and markets and how
governments and consumers worktogether in a sense to,
you know, create and producewealth for a country.
So economics will track,you know, a whole bunch of

(03:36):
different ways that that peoplecontribute to the economy.
You know, either throughspending or through job
creation and running businesses.
But it also looks at what allof this means when you put
it all together.
So if you sum up all of theactivity that's going on,
financial activity that's goingon in the country, you get an
idea of what that thevalue of that that country is.

(03:57):
And then you can compare itfrom one country to another.
So I mean, obviously it gets alot more complex than that,
but it's basically the study ofmoney and behavior around.
How money moves.
Very cool.
So when you're working at BDC,what does your day to day
actually look like when you'redoing economic research?
So I'd say our mandate isreally separated into two sides.
So we have the mandate to,of course, keep the bank and

(04:19):
all of its differentdepartments up to date with
macro andmicro economic developments.
So as much on the research sideas on the news and media side,
everything that's going on onthe economics side, we need to
inform all of our differentdepartments so that we're all
on the same page.
We understand what's happening,we understand how,
for example, interest rates aregoing and how that will affect
the operations of the bank.

(04:40):
So there's a reallybig internal, you know,
mandate there.
But then the part thatI really, really enjoy is the
external mandate is interfacingwith not only our customers but
also our non customers,basically the businesses in
Canada and B.C. hasa strong focus on small
and medium businesses.
So me and other members ofmy team, we do a lot
of presentations,a lot of roadshows.

(05:02):
We'll go outand meet with associations,
chambers of commerce, and we'llpresent on the economy, talk to
our clients about the kind ofresearch that we're doing,
the kind of developments on themacroeconomic level that will
affect their businesses.
And as you can, well,expect and the reason that I'm
here today is that tariffs hasbrought a lot for us
to talk about.
This.
Year.
You know, both on the on thegood and on the bad as well.

(05:23):
So we've played a veryimportant role this year in
particular on keeping thecommunity up to date with
what's going on on the tariff.
Awesome.
Well, you can add podcast nowto the roadshow as well.
Yeah.
That's yeah.
That's awesome.
So I mean you justmentioned it, it's kind of the
topic that's on everyone's mindright now is um,
you know tariffs.
So is there like for any forthe uninitiated I'm sure
everyone kind of has gatheredwhat tariffs are.

(05:45):
But for the uninitiated tariffsessentially for TLDR is they
are just, you know,taxes that are like implemented
on imports essentially.
So.
But can you give us moreof an insight on like why a
government would actuallyimplement tariffs and why,
you know,businesses should care?
Sure.
So I'd say first of all,tariffs are a really normal
economic tool that governmentsdeploy across the world.

(06:07):
And this is definitely not thefirst time that Canada has been
in a trade warlike scenario with with
major trading partners.
But what makes things differentthis time is the scope at which
these tariffs arebeing put into place,
because generally speaking,a tariff of 5 to 10% can be
actually a really effectivetool for a government to
basically try to limit theincoming goods from the outside

(06:29):
so that it canprioritize or focus on its
domestic industry.
So often a government willimpose a tariff in order to
slow imports and give a chanceto domestic producers to take a
bigger market share.
And that can be forpolitical reasons, or it can be
for economic reasons as well.
So tariffs are a reallya normal thing.
It's just the tariffsto this scope are a

(06:50):
little bit difficult.
They're more disruptive thanthey are because generally a 5
to 10% tariff willget worked out.
Down the supply chain,you know, the producer of the
good will take alittle bit of a hit.
The buyer will take a littlebit of a hit and like it'll
it'll even out.
But when tariffs are as big asthe numbers that we're hearing
being thrown around now.
Yeah they can actually bevery very disruptive.
Yeah I.
Think 35 to 100% or.

(07:10):
Something like.
135%.
For a.
Certain how does they do theystack like or is it just like a
blanket tariffover everything or.
They can it depends onthe type of tariff okay.
For example, right now Chinais facing, I believe,
a 55% tariff.
All all ink.
And it's three differenttariffs that are added on
onto one another.
There's a a general 10%tariff on China.

(07:31):
There's a 25% tariff because ofof the Fentanyl Act on the
Emergency TariffAct and everything.
And then there's another 20%tariff that's from the Trump
era China tariffs fromhis first term.
Yeah.
So those things do stack.
However, the US administrationhas said that all of their new
tariff announcements recentlyare not supposed to stack,
but it's not entirely clear.

(07:53):
Yeah, unfortunately, it hasn'talways been clear what they
plan on actually implementingversus what they say.
That they're.
Doing.
So what's the current situationlike with the US and Canada now?
I feel likeit's just constantly.
Changing to keep up because.
It's the I think the hardestthing to wrap your mind around
of is, do I really needto believe everything.
That I hear.
In the media?
And the answer is a little bitof yes and a little bit of no.

(08:15):
What I'll say is that, and thisis sort of precautionary,
is when you hear abouta tariff, there's always an
implementation in animplementation date,
unless they sayit's effective immediately.
And more and more this year,that date has been kind of
wielded as a asa negotiation mechanism.
So it's important toread read between the lines,
read the media, be informedabout the tariff announcement.

(08:35):
Is so the current state oftariffs between the US and
Canada is that the US announcedtheir intent to tariff Canada
in January, after theinauguration for a second term
of President Trump, and theyquoted a emergency act due to
all of the fentanyl flowinginto the US to tariff all goods
coming from Mexico and Canadaby 25% or 10% for

(08:59):
potash and energy.
But one important thing thatthey didn't specify when they
made the originalagreement is, is that those
goods produced in Canada andMexico who are compliant to
the Usmca, which is the currentfree trade agreement which
exists between thethree countries, are exempt
from that tariff because theUsmca supersedes that
sort of provision.

(09:20):
So it sounded like they wantedto tariff absolutely everyone.
And there was abig panic because of that.
But the reality is, is thatit's a smaller portion of the
total which iseligible for tariffs.
And we'll talk alittle bit more about that.
That 25%.
Now has the US administrationhas announced that they will
increase that 25% to35% as of August 1st.

(09:40):
So that's thegeneral tariff announcements.
And it's important tounderstand that the majority of
goods that are shipped fromCanada to the US
are Usmca compliant.
In fact, there was analysisthat was done recently or
earlier this year that saidthat about 95, 94 to 95% of
Canada's goods can beUsmca compliant,
but they aren't necessarily.

(10:02):
And that's a paperwork issue.
Okay.
Yeah.
And I think we cantalk about that later on.
We talk about the challengesand what people need to in
businesses need tokeep aware of.
But there is a compliance issuethere that's been developing.
Okay.
That's interesting.
Yeah.
Yeah.
So that's in termsof the the broad tariffs.
But then the USfollowed these tariffs up
with targeted tariffs.
And these are the ones that arehurting Canada's economy more.

(10:23):
So these are tariffs on steeland aluminum which initially in
March were 25% but now havebeen increased to 50%.
And then there's tariffs oncars as well of 25%, which were
also put into effect in March.
That 25% tariff is it excludesthey take away from that 25%.
The US made contentof those Canadian made cars.

(10:44):
So the actual tariff rate thata car manufacturer would be
paying is probably around 12.5.
It's about half of that.
Okay.
And then there's onemore tariff, which as recently
announced as the tariffon copper, which would be put
into place again also onAugust 1st, which would be a
50% tariff, 50%.
So important to understand,the tariffs on steel and
aluminum and copper apply toall countries of the world,

(11:05):
but the tariffs onautos apply just to Canada.
So that's kind of where we sitright now on the tariff scope
from US tariff beingCanadian products, but we also
have tariffs of American goodsthat are coming into Canada.
So initially when tariffs wereput into place by the
US administration, the Canadianadministration said that they
would respond in kind and theykind of matched line for line.

(11:26):
The US announcements.
They initially announced 25%tariffs on about $40 billion of
US goods coming in.
They followed up with 25%tariffs on steel and aluminum
products and a 25%tariffs on cars as well.
However, the impact ofthese tariffs, what we're
calling them, is actuallylarger for the Canadian
population than the US tariffs.

(11:47):
And that's because when webring in goods and
we're tariffs, you know, we paythat money, it increases costs
and it's inflationary.
The final consumer,the Canadian consumer is the
one who's going tohave to pay that extra.
So in light of theimpact that this would have on
our economy, the new governmentin April announced a special
provision that would allowmanufacturers to import
products from the US tarifffree for a certain amount

(12:10):
of time, a six month period,and we're currently in that.
So the new Canadian governmenthas basically taken a step back
and said, we understand thatthis is going to have an impact
on our population, so we needto take a little step
to mitigate this.
So the tariff situation rightnow with the US, it's largely a
one way thing.
It's mostly the US tariff inCanadian goods and not much

(12:31):
tariffs going backthe other way.
And I don't want to downplaythe effect of the tariffs
coming back, because I knowthat there are some businesses
who feel it very acutely.
But on the in the large scaleof things, it's mostly on the
other side that the tariffsare currently okay.
So are there any like I knowthis is probably a hard thing
to answer, but are there anykind of like trends that
businesses should kind of belooking out for as far as the
tariffs?
Yeah.

(12:52):
So I mean, I would say that themost important thing is to
understand your business.
You're good, your customersand your suppliers.
And I think we'll talka good amount about what the
strategies there are.
But it's really,really understanding the
important to understand whatyou are producing and if it's
subject to a tariff.
And what's happened actually isafter the initial imposition of

(13:12):
tariffs and this,this understanding that Usmca
compliant goods would notbe tariffs, there were a lot of
Canadian producers who wereselling to their U.S. clients,
and then they'd get a call whenthe client when the when the
good would get to the borderand the client said, are you
aware that your good is subjectto a 25% tariff?
And the producer would say,well, no, I'm Usmca compliant,
at least I think so.
And it turns outthat they hadn't filled out

(13:33):
the paperwork.
To.
Become compliant.
So there's been a.
Lot of that.
Yeah.
So this year we've had a trendin this increasing Compliance.
So it's really, really good.
We're increasing thecompliance levels, but we're
still below the level that weneed to be at.
So the estimates are in April,roughly 60% of our trade with
the US went under Usmca.
We still have some room.

(13:53):
To.
Go.
So that's one of theirbig trends, is that businesses
are signing up professionals,you know, cross border
professionals in order to say,hey, what kind of paperwork do
I need to fill out?
What do I need to do so that Ican become compliant and then,
you know, get into free tradeand not have to pay
this or that.
My customer doesn't have to pay.
Is it a relatively complexprocess to do that or is it
somewhat similar?
Like simple?

(14:13):
It's somewhat simple.
But let's be honest,business owners are overwhelmed.
Yeah, very, verybusy people, right?
Hard to keep up withwhat you need to do sometimes.
Yeah.
And, you know, it's just simplyfinding out what you need to do
because sometimes take daysor even weeks.
So one of the things that we,we suggest to our small
businesses to do is to build atask force within your within

(14:34):
your company, your, your firm.
Say, okay, let me find a 2or 3 people who I know are in
the news, who are plugged in orgreat at researching, who can
leverage AI, maybe and say,guys, yeah, tell me, tell me
what it is.
You know, let's find out what'sgoing on and then, you know,
ask for help.
Get them to figure out, okay,look, this is what we
need to do.
Become USMC.
Compliance.
That's something that we'reseeing more and

(14:55):
more in companies.
And are there any, like,common misconceptions people
have about tariffs or even justlike trade policies in general?
Yeah.
So I'd say onecommon misconception, I think
I'm really glad that you lookedat the camera and you told them
exactly what tariffs.
Are, because there.
Are certain sources thatsay that, you know, the buyer
doesn't pay the.
Tariff.
Right.
It is absolutely the case thatthe buyer is on the hook

(15:16):
for the tariffs.
So I think that'sreally needs to be clear.
But I would say that withinthat it doesn't mean that the
buyer has to bear the fullburden of the tariff.
In fact, that's often not thecase because there can be some
arrangement between the buyerand the seller of saying, look,
if there's a 25% tariff,how about you absorb some of it
and I absorb another.
So this, this idea that, yeah,that person is going to have to

(15:38):
pay the tariff when they takepossession of the good
at the border.
But there is ways to manipulateyour price in order to make
sure you know that, that thatburden of the tariff is shared
and you know, that can enableyou to continue your, you know,
your businessrelatively uninterrupted.
Okay.
Can you share more advice onhow businesses should navigate
the situation right now?
Are there any resources orstrategies they should be
leveraging more?

(15:58):
Yeah, sure.
I mean, I, I would be remiss ifI didn't mention BDC, but.
Not because.
Not because I have.
To.
But because it's we have really.
Great resources.
So WW for tariffs.
Perfect.
We'll have a link tothat link below.
Like it really.
It's a it'sa tremendous resource.
Yeah I have.
A lot of articles that thatreally cater to supply chain to

(16:20):
managing your finances,to resiliency, how to position
yourself in thissort of situation.
We also have a tool there,which we've developed with the
Canadian government and withExport Development Canada,
called the Tariff Tracker,that can allow you to to type
in your good and figureout my subject.
Oh, that's super useful.
Yeah.
And it works really well.
So there are a lot of, of,of online resources, but the

(16:42):
BDC website really does a goodjob at bringing it all together.
And you can find a lot ofthe articles, and I'll talk
about some of the advice thatwe have in there.
But of course, you know,I can't I can't go as
in-depth in this.
You can.
Look into us and then we'll putit down in the description.
Box.
Yeah.
Okay.
So I'd say.
That.
Probably one of the things I'dreally like to highlight
is this, this idea that theplanning horizon has changed.

(17:03):
So traditionally, you know,in a, in a stable
business landscape, short termis one year medium terms like 2
to 3 years long termis three plus.
But with all ofthese disruptions, and also as
the pace of technologyaccelerates and media attention
and news disclosures accelerate,we're seeing that that planning
horizon is being condensed.

(17:23):
You know, months become weeks,years become months.
So now our experts in supplychain are telling us that short
term is really 30 days.
It's up to 30.
Days, Maybe.
Maybe two months.
Yeah.
Medium term is like threemonths to six months, and then
long term is six months plus.
So in the short term, what youneed to do is, is control

(17:45):
everything that'sat arm's length.
You know, anything that'saround knowing your
customers needs,knowing your suppliers,
understanding where your inputsare coming from and how subject
you might be to tariffs,knowing the customers that
you're selling toif they're worried about
the current situation.
Um, understanding your finances.
So we talk aboutthe L's and the P's.

(18:06):
So talk about liquidity,which is your cash leverage,
which is your debt.
And then on the other side wetalk about productivity,
which is you're controllingyour costs and profits,
which is how tomaximize your revenues.
So those are four things toreally keep an eye out on.
Because right now, even if yourbusiness is not directly
affected by the tariffs becauseyou're not an exporter or

(18:27):
you're not importing a good,there are knock on effects.
There are a lot of people whoare second degree affected
by tariffs, and they might noteven know it until they get a
bill from their new supplierthat says, hey, my, my cost has
gone up by thisamount of percent because I'm
paying a tariff.
They might not even beaware of that.
So understanding, you know,your your exposure throughout
different supply chains isprobably the number one piece

(18:49):
of advice that I'd give you.
Can you give us an example ofmaybe of some kind of company
who's actually been doingreally well navigating these
tariffs?
And I guess on the flip side,maybe a company who's not doing
so well and like, are thereindustries that are more
impacted than others?
Yeah, absolutely.
I mean, in terms ofthose more impacted on the
manufacturing side,that's what we're seeing.
The really big slowdownin the Canadian economy,

(19:09):
especially in Ontario,unfortunately, you know,
it's the engine of theCanadian economy, but there's a
lot of manufacturingthat's concentrated there.
And the tariffs, the targetedtariffs are really targeted
towardsmanufacturing industries.
So steel, aluminum.
And soon to be copper and auto.
So those are the markets thatare feeling it the most,
especially on the steeland aluminum side.
And the reason for this isbecause we produce a lot of the

(19:31):
natural resources in Canada,but we sell those resources to
other countries, and then wegenerally rely on on other
countries for importedintermediate products.
So structures and machines madefrom steel, for example.
And even if there isn't acounter tariff on our imports,
the fact that the steel that wesold to the US was tariff in
the first place, they're goingto take that cost that they

(19:53):
paid extra for that steel andaluminum and then add it to
their own product.
Before they ship.
It back to.
Canada.
Okay.
So even if.
We're tariff exempt to.
Bring it back, you know,that that cost ends up getting
getting included and passed on.
So, you know, we have a fewsmall medium businesses that
are involved in steel or inimporting like aluminum cans,
for example,those sorts of things.
Right.

(20:14):
And they've been hit.
Really, really.
Hard because, you know,contracts with suppliers are
generally for a yearor even more than that.
It's really hard to pivot awaywhen all of a sudden there's a
new cost, right.
That's put into.
Place.
Yeah.
That makes sense.
Yeah.
So that's and especially withthe increase of that tariff to
50% in in early June,that's going to hit those kinds
of businesses really,really hard.
Do you have any like,inventory management techniques

(20:35):
that you would maybe recommendduring this time that
businesses shouldtry to implement?
Yeah.
So I'd say that the fact thatwe're very close to the US is a
really good thing, from thestandpoint that it's it's
easier to pivot quickly, right.
And actually, we saw this in avery big fashion early in the
year because once the tariffswere announced, the exports of
steel and aluminum products andother things from Canada to

(20:56):
the US searched.
They went really, really highin March, in February, March,
actually, January,February and March,
because already tariff talk hadhappened after the the
initial US election.
Right.
So we saw people basicallyfront loading us, customers,
building inventory of thosesteel aluminum products.
Before that,they became tariff imposed.
So that was a good strategy forthem to, to, to, to take on.

(21:18):
And then now that the tariffhas been put into place,
we've seen the exports of thoseproducts drop significantly.
One strategy I'll say isvery interesting, and this
applies to to businesses whohave operations on both sides
of the border is the notion oftransfer pricing is when you
sell a good from your Canadianbranch to the US branch,
you can control theprice at which you sell.

(21:39):
In order to limit your exposureto that tariff, you have to
make sure that everythingis above board.
And for that, I woulddefinitely recommend hiring a
professional to helpyou with that.
But using transfer pricing toyour advantage can be an
absolutely huge tool to limitthe impacts of tariff.
On your business.
Okay.
That's great.
I've actually neverheard of that.
So that's a good that's a goodone for our audience for sure.
What kind of professional wouldyou recommend hiring.

(22:00):
To.
Someone that'sinvolved in trade.
So like customs.
Brokers for.
Example, are there they'reconsultants on that side?
Yeah.
If you're a small business alsoand you're just looking
you have questions.
Contact BDC.
We have advisory services.
We have specialists who canhook you up with consultants
that can then addressyour specific needs.
We also have programs that helpdevelop trade resiliency,

(22:23):
that help customers look atdiversifying their business,
seeking out other markets.
We have a consultantnetwork at BDC that can.
That's definitely one good tool,but I would say also
just talk to your, uh,your friends, associates,
other business owners, ask themwhat they're doing.
You know, one of the thingsthat I can't stress enough,
and I'm very lucky because Iget to spend a lot of time in
the field withbusiness owners, is that that

(22:45):
network is a very valuable.
Resource.
Relying on community.
Absolutely.
And entrepreneurs love givingadvice to other entrepreneurs.
You know, they live and.
Breathe.
The business.
So asking around andfinding out, you know,
what other people are doing isalso a really, really good way
to get ideas.
It might not apply to yourbusiness directly, but you talk
to ten people.
One of those people might have.
A really.
Good solution.

(23:05):
For you.
Perfect.
And so you shouldalways be sharing as well.
As making of a.
Symbiotic relationship.
So since you work with the Bankof Canadian Entrepreneurs,
you have a front row seat tohow Canadian businesses are
doing and the economy.
So can you give us a sense ofwhere things stand right now?
Yeah.
So actually there's light, uh,that's that's emerging in
the Canadian economy.
And I'll say that in the lastcouple of months, I'd say the

(23:28):
outlook for the Canadianeconomy is improving,
and you've seen alot of financial institutions
and banks, BDC included.
We're increasing our forecasts,what we expected for the year.
What I'll start, though,by saying is, is that the thing
that's hurting our economy themost this year is not
necessarily thetariffs themselves, and I don't
want to take away.
You know, I know that they'rebusinesses that are struggling

(23:49):
again because of the tariffs.
But at the macro level,the impact of the tariffs is
actually not that strong,all things considered.
And one of the major reasonsfor that is that tariffs
applied to goods they don'tapply to services and
developing countriesor developed countries.
Sorry.
Are more and moreservice producers right.
So there's a very big portionof our economy which is
basically tariff free or atleast indirect impact.

(24:12):
So that's continuing to go well.
And then if you lookat the last couple of years,
we've undergonean economic slowdown.
Interest rates went really high.
And now and now that they'vecoming down inflation,
which was really high in 2021,2022 has now been tamed and
over the last few years,labour markets actually
did quite well.
Despite the fact that theeconomy was slowing,
labor continued toincrease, improve.

(24:34):
We didn't see a recession,we didn't see mass layoffs.
So because of that, the jobmarket in Canada has been going
well and wages have actuallyincreased faster than inflation
over the last couple of years.
So the financial standing ofCanadian households is
actually pretty good.
So wages have been good andtheir savings levels as well
are actually quite high.
They're higherthan pre-pandemic levels.

(24:54):
So on a personal finance side,Canadian households
are doing alright.
But what's really kicked usthis year has been uncertainty.
So to talk about tariffs,what's going on,
people don't know.
And uncertainty isparalyzing for businesses.
So imagine that you're abusiness owner and you have a
plan in 2025 toexpand your operations.
And all of asudden you hear about tariffs.
You hear about the US possiblygoing into recession,

(25:17):
which it's it's most likely not,at least not as we
currently see it, but all ofthese these things come to you
and you say, wow, this is notthe time for me to be spending
a whole whack load ofmoney to expand my operations.
So a lot of people have beenpressing pause on their
investments this year,and that's economic activity
which could havebeen generated, which is no
longer being generated.
So it slows the economy.

(25:38):
And until people start toregain confidence that,
you know, this thing is notgoing to happen and we're not
going to have a recession,they're not going to start to
go back intothat investing mode.
So that uncertainty,it's pervasive.
It's been tough for theCanadian economy to to to
understand and to grapple with.
But in the last few months,it feels like there's some sort
of crystallizationof this uncertainty.
We're starting to realize thatmaybe things aren't as bad as

(26:01):
what we thought that they would.
And it's also because we've hadso many tariff announcements.
We're also starting tocut through, you know,
that announcement and say,okay, what's what is the US
really trying to do here?
Yeah.
And I'll segue.
Right into that.
That inevitable question.
Is.
What is.
The US strategy?
It's clear that the USadministration is trying to
materially change the USeconomy in a certain way.

(26:24):
They don't want to have 50%tariffs on everything, but they
do want to have some targetedtariffs in order to encourage
their domestic industry.
And that's been veryclear by the US administration.
They want to support the autoproduction in the US.
They want to supportthe steel market.
I can't say aluminum becausethe US doesn't really
make any aluminum.
It mostly comes from Canada,but those sorts of markets.

(26:45):
Those tariffs are going to stay,I think even when the
US and Canada eventually doreach a new trade agreement,
it's very likely that tariffswill be a part
of that agreement.
In fact, the Prime Ministeryesterday said as much to
the media, saying, you know,any any relationship with the
US is probably going to includesome level of tariffs
in the future.
And that's because theywant to change their economy.
But the measures to whichthey're saying or

(27:08):
they're announcing, they're morenegotiation tactics, right.
50% tariff,135% tariff on China.
Nobody wants that tobe the case.
But it's a way for the USadministration to bring people
to the bargaining tablewith haste, and in maybe a
position of disadvantage, to tryto make a hasty trade
agreement thatcould then benefit.
Right.

(27:29):
So it's all just posturing atthe end of the day.
I mean, not all of it.
There is a part that's.
Really.
A desire to structurally bringsome manufacturing back.
But I would say alot of it is posturing.
And we've seen it withthe on again off again.
Let's do this.
And then finally,let's not do that.
Um, you know, sort of ofrhetoric that we've had over
the last, last little while.
So all this to say that,that the Canadian economy,

(27:51):
our consumers doing really well,we've also seen a
really nice boost from theBuy Canada movement.
So unfortunately, because ofthe rhetoric with the 51st
state that that was, you know,inflammatory and negative for,
for a lot of people, um,there's been this blossoming of
Canadian pride of prioritizingCanadian businesses.
And I'm really proud that BDC,we launched a campaign called

(28:11):
B5 High Five.
Which is all over the house.
Which is, uh, you know,by five, uh, Canadian goods.
So that domestic turn towardslocal products is really great
for our economy.
And actually we're starting tosee some of the effects in
the statistics now.
And retail spending is actuallyholding up relatively well.
The job market in Junerebounded really nicely.

(28:32):
So all of this, these positivedevelopments is making us
improve our our outlook forfor Canadian GDP.
So currently we expect anincrease of 1.2% in real GDP
this year, which isstill relatively weak.
But it's not like thoserecessionary doomsday scenarios
that we could have thought.
Like.
What happened when tariffs.
Were first announced.
So we're doing well but couldbe doing better had not been

(28:54):
for the tariffs.
Yeah, there's a lot of there'sa lot of road.
To go down.
Canada islacking strategic investments.
For example you know weneed to continue to develop
our economy.
We need more targeted andfocused investments
in particular sectors.
But the new government seems tobe putting that as
their top priority.
So infrastructure investments,investments also into defense.
That's been a big topic.

(29:14):
Recently.
About how we've been laggingon defense spending.
So the government seems verykeen to do this.
The problem is, is we're alittle bit light on the details
for now because there hasn'tbeen a budget.
So we're waiting for thatfederal budget to come out
to see, okay, what's going tobe the impact of these policies.
And then there's also the ideathat it's great that we want to
spend money, but, you know,we have a debt scenario

(29:35):
situation that's increasing.
It's not nearly as bad as whatwe see in the US, but we have
to be mindful as well thatthat spending, you know,
there's there's two sides tothe decision to spend.
I can imagine the peopleat BBC are just salivating,
waiting for that budgetto come out.
Yeah, yeah.
In order.
To help us to.
Place our.
Priorities.
But honestly, we're.
Already doing it inthe background, like trying
to anticipate, you know,where that's going to be so

(29:56):
that we can be ready to tosupport those, those small and
medium businesses that will beable to, to participate in
those those projects.
All right.
Very cool.
So before we dive any deeper,I know you mentioned that
you're comfortable speaking onmacro development and
microeconomic trends before,but for those who don't have an
economics backgroundlike myself, can you break down?
What do thoseterms actually mean?
Yeah for sure.
So microeconomics is basicallythe study of anything at

(30:19):
the micro level.
And there were basically meanwe mean like
people and businesses.
So anything that looks at how abusiness manages its finances,
how they manage theirsupply chain, logistics, etc.
, that would be micro lookingat market structures like the
difference between an opencompetition versus one where
you have a fairly smallamount of producers.

(30:40):
That's again microeconomics.
If you look at the behaviorof consumers, for example,
again, that's amicroeconomic behavior.
So in terms ofmicroeconomic trends, it's a
lot around productivityunderstanding how businesses
are operatingtheir profitability revenue.
The two P'syou mentioned earlier.
Exactly, exactly.
And then on the themacro side, that's everything
that's from the top.
So the classic macrolook is GDP.

(31:03):
For example.
It's measuring the total valueof an economy by summing up
the different components.
And let's go to econ 101.
If you don't mind.
I think for everybody.
Would find this interesting.
There's a formula for GDP.
It's consumption plusinvestment plus government
spending plusexports minus imports.
So for those who don't knowwhat GDP stands for.

(31:24):
Can you break downwhat does GDP stand for.
Gross domestic.
Product.
And the indicator that you'reconstantly hear about
is real GDP.
So real gross domestic productit takes all of that value and
it removes theeffect of inflation.
So because inflation is pricegrowth and price growth can
change from one yearto the other.
And if prices increase by 2% inone year, the total value of

(31:45):
the of your economy willalso increase by.
Growth.
Of that 2%.
So factoring that out allowsyou to compare from one year
to the other.
And that's why it's the numberone economic indicator
that you hear.
And that's compared.
Through.
Three different countries.
So macroeconomics is really thestudy of all of those pieces
and how they moveand how economies compare to

(32:06):
each other, like throughexchange rates for example,
inflation, interest rates,those sorts of movements are
generally In the themacroeconomic conversation.
So when it comes tomacro economics, like what are
some things that people shouldbe looking out for right now?
Like what are the mostimportant things to watch for?
Is it likeinterest rates, unemployment?
Uh, yeah.
Inflation.
Inflation?

(32:26):
Yeah.
Those are topics that arereally top of mind.
And I think thatthey're all important.
Business owners tend to besometimes singularly focused on
interest rates, because itaffects how expensive loans.
Are and how.
Expensive their credit is.
And I think it's very importantto understand the interest
rate environment, um,especially where it's going.
You know, right now we're in alittle bit of a more stable

(32:47):
position because interest rateshave come down a lot.
So maybe people will startfocusing on other things.
Inflation is anothervery important one.
But again, we're in a situationright now where inflation has
cooled a lot since thebeginning of last year.
However, there's a bit of doubtright now about where inflation
is going because ofthe tariffs, right.
So if you think about thetariffs on on the metals that

(33:07):
exist currently, that's anupward increase across the
world in those commodities,because the US is paying those
tariffs to every country that'ssending metals to the US.
And because of that,the costs get pushed down
to the consumers.
You know, slowly but surely.
And it should as long assomebody's paying the tariff
and the government iscollecting that
tariff revenue, someone needsto pay for it.

(33:29):
So eventually it willshow up in inflation somewhere,
somehow.
So that's the worry right now.
Is even Canada withoutcounter tariffs, if we're
importing products from the USthat they include an implicit
increase in their cost becauseof the tariffs of sending those
goods to those metals to the US,it can generate inflation.
And that's what the governmentand the Bank of Canada in

(33:49):
particular is looking at veryclosely right now.
The latest inflation numbercame in at 1.9%, which was good.
It's within the range of wherethe Bank of Canada wants it.
But when you exclude the effectof of energy in there,
it's more around the 2.7% range.
So we're getting alittle bit higher.
The Bank of Canadawants to keep inflation between
1 and percent.

(34:10):
Okay.
So when you geta little bit higher there,
you start to worry.
And the reason that the Bank ofCanada is very worried about
this is because if they cuttheir interest rate again,
it Spurs spending,its Spurs borrowing which
itself is inflationary.
So it can pushinflation a little bit higher.
So that's why the Bank ofCanada is just taking a
pause right now.
There's going to be aninterest rate announcement.

(34:31):
You know pretty soon.
It's our belief that they'relikely to pause.
If you're watching this episodeafter the announcement,
you know we'll be ableto see if you can.
Place your bets in the comments.
Yeah.
That's great, I thinkI think we'll be right.
Um, but it's really becauseof this, this inflation.
So that's important to keepan eye out.
But then unemployment isalso super important.

(34:51):
And it's a topic that's reallytimely in Canada because over
the last couple of years,in 2023 and 2024,
Canada experienced populationgrowth much, much higher than
the averages ofthe previous years.
It was it was wanted.
It was, you know,a self self-imposed.
In fact, it was the strongestpopulation growth that any
developed country has seen inover 60 years.

(35:13):
60.
Years.
And that's saying something.
And, you know, for better orfor worse, it's a good thing
because developed countrieshave demographic issues.
We have aging populations.
We have more and more people inthe baby boomer cohort who are
leaving the employment market.
We have less and lesspeople coming in.
Our birth rates are lower.
So immigration is a veryimportant tool in order for us
to continue to, to tohave economic prosperity.

(35:35):
Interesting.
Never thought about birth ratestoo and all that,
but it makes sense.
Yeah.
Canada has one of the lowestbirth rates of the
G7 countries, actually.
Oh, wow.
I did not know that.
That's crazy.
So for better or for worse,you know, it's important to
have population growth.
The downside is of course ismore people means more strain
on our services.
So health care and educationand also housing, which is
a really, really bigconversation in
Canada right now.

(35:56):
So after strong populationgrowth in 2023 and 2024,
the Canadian government said,okay, it's a bit too much.
We have to slow this down.
And they imposed caps ontemporary immigrants coming
into Canada for 2025 and 2026,and the initial expectations
were that population couldactually decline this year
in Canada, which wouldbe the first time ever.

(36:16):
Only by small amount.
But it's neverhappened before, though the
reality of it is,while we're tracking population
figures now, it's actually up.
But we'll see slower populationgrowth this year,
more of around 1%.
And why I mention all of thisis because it's important to
understand theemployment rate, or the
unemployment rate is directlyaffected by the new arrivals
into the workforce in Canada.

(36:37):
Right, right.
Sorry.
So we've seen an increase inthe unemployment rate a lot
over the last year or so,but it's more about, you know,
the number of available workersis outpacing the number of jobs
that's being created.
So this year we're likely tosee a little bit of a reversal
in that if the job markets holdup because there are less
people coming into Canada thisyear than have been
in previous years.
So that's a very importantnuance to understand when

(36:59):
you're interpreting what theunemployment rate means.
Okay.
So what about likemicroeconomic trends?
What are some things that kindof like businesses you can look
out for intheir everyday operations.
Yeah.
So productivity is a topicthat's been I'd say it's been
really important for Canada inparticular for the last
few years, I'd saysince Covid, because our
productivity situation hasreally not been good.

(37:21):
And government officials havebeen desperately trying to
refire productivity in Canada.
Now, it's avery complicated issue.
There's no one solution,but that's something that that
a lot of businesses are takinga look at now, especially in
this sort of situation wherethe uncertainty means that you
don't know where to go to growyour business, but it's also an

(37:42):
opportunity to take a step backand look inside your business
and see what can I do better?
How can I, youknow, manage my costs?
One of the big costs that's notoften talked about is waste.
Every business has waste.
Every household has waste, too.
And minimizing waste canactually save you quite a
bit of money.
But it takes that mindset tosay today, you know, or this

(38:03):
month or this year or, you knowwe're going to tackle waste.
Let's try to figureout in our business what's
what's wasteful, you know,how much paper do we consume?
Uh, you know, how do we how dowe manage our orders to make
sure that we're notover ordering, you know,
those sorts of things.
So the productivity and theresearch around productivity
and the tools to help improveproductivity are a really,
really big topic.

(38:24):
And that kind of segues wellinto a topic which I'm sure
that that's inevitable thatwe talk about.
It's artificial intelligence,right?
Every episode we haveto mention it.
I think it's like I think itwas written in the fine print.
Some of you.
Know, but, you know, it's it'swe kind of sound like a broken
record for AI.
You know, we say you haveto be ahead of the curve.
You've got to embrace it.
It's absolutely true.

(38:45):
And in fact, ifyou haven't embraced it,
you're already behind.
But what I'd say what's changeda lot with the discussion
around AI is, is initiallywe're talking about AI is easy.
There are so many freetools out there.
You know, that you can get intoAI without spending a lot,
which is it's still true.
You know, there's a lotof low hanging fruit in
the translation world.

(39:05):
And I'm not saying,you know, it doesn't
replace translators.
Professional translatorsstill very, very important.
But, you know, if I'm writingan email and I need to write it
in French and English, you know,I could throw it into
AI or something like that.
That helps me save a lot oftime for summarizing things.
You know, there's a lot of lowhanging fruit with with AI,
but that's not where the realvalue of AI lies.
That lies in the second stepapproach is when you start

(39:27):
looking at models to tointerpret data, right.
So the use ofdata for better forecasting,
for your revenues, for yourcosts, helping you use
AI to leverage and using yourown data to tell you where you
need to do more marketing,tell you where you need to do
more business developments,where those opportunities lie.
Those are the huge benefitsthat I can bring.

(39:47):
There's one problem, though,is that, well,
there's two problems.
Let's say one of themis that this can be costly
because they're, you know,to develop a custom model, uh,
can, can take a certain amountof time and a certain
amount of money.
And then the second thing isthat to do that, you need
really good data quality, and alot of businesses don't
have that,especially small businesses.
You're again super busy.
You're just trying to to getby to, you know, to, to to to

(40:11):
survive and to give a good lifeto your staff and, you know,
stay afloat, especially in atime like this, it's hard to
also concentrate on making sureyou're getting the best data so
that you can then leverage AI.
But that's definitely somethingthat those who want to invest
into AI need to understand.
Your data quality is absolutelypivotal because if you don't
have good data, you can't get.
Yeah, I can't reallyhelp you, I guess.

(40:31):
Right?
Perfect.
So can you kind of get intosome specific challenges or
maybe even opportunities thatsmall to medium sized
enterprises kind of, you know,are facing right now or
especially in regardsto like, you know,
cross-border sourcing.
Yeah.
So I think that the challengesright now is that, um,
you know, logistics is kind oflike an elastic band.
You know, it's logistics.

(40:54):
And from myprevious experience, you know,
I was exposed a lot to shippingin like on the international
level in commodities andlogistics and shipping.
It's really unique inthe sense that it's extremely
capital intensive, but it's aservice that's offered.
And whenever there's a demand,an increased demand for
something for that service,it seems like a lot of the

(41:16):
attention all of a sudden goesthere in order to
satisfy that demand.
But then when you unwindthat demand, it's hard to then
reorganize and get all thosecontainers back into the places
in the world thatthey need to be in.
Right.
And what tariffs have done ifthey've created immediate
needs for goods.
So like I mentioned earlier,when tariffs were imposed in
March or when they said thattariffs would begin to be

(41:37):
imposed in March, shipments ofthose tariff goods increased
astronomically in the first fewmonths of the year because
people said, I got toget in, build my inventory
before those tariffs.
Yeah, exactly.
So all the logistics supportrushes towards those first
couple ofmonths satisfying demand.
And then all of a suddentariffs are in and demand
declines because people nowhave their inventory.

(41:57):
Then they're notthey're not interested.
So.
Logistics has to.
All of a sudden rush out andthen find the next thing.
And between USA and Canadaagain it's relatively easy.
And I'll say that in quotesbecause we have direct access
to the border along, you know,9000 kilometer border.
But if you consider, like theUS and China and what's
happening there, uh,ocean freight shippers are
having an absolute nightmaretime because the tariff has

(42:19):
been changing a lot.
And, you know, there's acertain lead time in shipping
from one continent to the other.
So as US buyers rush to stockup on Chinese goods ahead of
those tariffs going up,it brings all the containers
to North America.
And as we saw during Covid,when you have a lot of
containers arriving at acertain area, you have

(42:39):
huge delays, huge traffics,increased costs for not only
the shipping companies,but also for
the people importing.
And then when that demand againgets unwind, which is what's
happening now, all thebuildup has happened.
Now you have all thesecontainers in North America
that have to go back to China,and they have to figure out,
okay, what goods am Igoing to carry.
So some of them come to Canadaand pick up natural resources
and go and go there.

(42:59):
But it can make fora lot of uneven, you know,
shipping rates, for example,a lot shipping rates go really
high when there's a big demand,and then all of a
sudden demand becomesvery slack, and then shipping
rates all of asudden become slack.
So navigating that canbe very, very challenging.
So that's why managing yoursupply chain and understanding
as much as possible is really,really important in this

(43:20):
sort of circumstances.
Because these thesetariffs shocks, they really
they can come out of nowhere.
It can be anannouncement all of a sudden.
And then we need demand.
We need demand.
And everything rushes toto one side.
So I'd say that that's a keychallenge for anyone who's on
the supply chain side is tryingto to navigate these,
these peaks and valleys thatthat tariffs are generating.
Yeah that makes sense.

(43:40):
A lot of the mirroringit seems like from the Covid
supply chain disruption.
You know so from yourperspective like how should
small businesses be thinkingabout their supply chain
differently now than they were,say, 5 or 10 years ago?
Yeah, I think the importantpart is, is you have to be
flexible and adaptable.
And of course, youhave to have a certain
amount of clairvoyance.

(44:00):
Not panic when youmake decisions, but still make
good decisions based onon what's coming.
So inventory building isa good example of that.
If tariffs are coming, it's agood time for you to stock
up on inventory.
And we've seen alot of Canadian businesses
do just that.
Some of them with moresuccess than others.
But it's understanding, you knowwhat I need, what I

(44:21):
consume and where it comes from.
It's really, really importantbecause there are a lot of
businesses that, I'll behonest, that I've
spoken to, that that didn'teven know that they would be
tariffs from fromtheir imports, they didn't
build up inventory.
And all of a sudden they'refacing a strong price increase
from their customer.
And they just don't know how tohow to deal with that or the
other way around is also true.
You know, exporters who buy aparticular good to then

(44:43):
transform it and then export,you know, you really need to
understand where those thingsyou're buying come from and
what your risks of exposure tothe current market is.
And it's not only about knowingwhat it is now, but it's also
about trying to anticipate whatis going to happen.
Obviously, that's abig challenge, but in that that
medium term horizon,something we encourage a

(45:03):
lot of, of businesses to do,is plan as much as
possible scenarios,for example, not to to to say
that you should build a bunchof scenarios and then pick one
and align with that.
But building scenarios givesyou a really good understanding
of what could happen.
And often thoseextreme scenarios, the very
good or the very bad,they'll never happen.
But knowing what happens tomy business, should the very

(45:25):
bad scenario develop,is a really good
way of understanding.
Okay, what are the limits of myplaying field here and how am I
potentially exposed to that?
And there's some a waythat you can leverage data and
leverage analytics, you know,and programming in order to try
to build models to say, okay,let's let me set my input costs
and say they're going to go upby 20% by the end of the year,

(45:47):
and my demand isgoing to shrink by 10%.
What happens to my business?
You know, that sort ofunderstanding means, okay,
when costs go up by 10% andyour demand goes down by 5%,
you're like, okay, I know whereit could go, but I'm going to
be a little bit betterthan that, right?
So it helps really orientyourself in the reality that
you're living awesome.
And if you can giveentrepreneurs just one piece of

(46:07):
advice that they can use tokind of take away to help with
their inventory planningand their, you know, just their
operations planning this year,what would it be?
I'd say honestly,stay connected.
Don't be afraid toask for advice.
Don't be afraid to pickup the phone.
Call your banker.
Uh, call your consultants.
The people who you work with.
Call your partners.
Call your competitors.

(46:29):
Um.
Don't be afraid to to get upand go and attend meetings,
association events,things like that.
Stay out there.
Stay informed, because you'llbe you're you'll be amazed to
hear the stories ofentrepreneurs across
the across Canada.
You know, this isa tough situation.
It's led to a lot of difficultyfor some firms, but it's led to
an amazing amount ofopportunities for
others as well.

(46:49):
There are firms out there,businesses who have been able
to capitalize from this market.
And I'll give you just a quicknot a concrete example, but but
why that's the case is that theUS is currently fielding
tariffs from all over the world.
You know, they want to imposetariffs on I mean Japan South
Korea recently but allbasically all countries
of the world.
This could actually putCanadian businesses in an

(47:09):
advantageous position becauseif they're buying things from
those countries which thenbecomes tariffs and you're
producing that good butfree trade, you know under
Usmca you could gothen and take market share.
Yeah.
Right.
Right.
But you're not necessarilygoing to know that's the case
unless you keep your ear to theground and you understand
your market, you understandyour customer and how you know
you can then then then,you know, develop that.

(47:32):
So I'd say stay connected anddon't be afraid to use the
resources that areavailable to you.
So BDC again a great resource.
EDC Export Development Canadaalso Crown Corporation that we
work a lot with.
They do a really great job athelping those who are exposed
to tariffs through exportsnavigate that not only directly
but also indirectly.

(47:53):
So if you're indirectly exposedto to to to tariffs, you're not
even an exporter, but yourclient is an exporter.
EDC can also helpyou mitigate some of that.
And the last one I'll say isthere's a great, I guess,
organism called theTrade Commissioner's office.
And this is a governmentalorganization that exists in
various countries aroundthe world, a lot of countries,

(48:16):
more than a hundred.
And they're basically staffthat are in that country that
help foreign businesses.
So Canadian business, so theyhelp them get in touch
with suppliers, get in touchwith clients, know about
affairs or expos that are goingon in their particular sector.
Their job is is fantastic,really, really good.
And they're free actually.

(48:36):
So they're reallyare in compliment of
Canadian business owners.
So there's a lot of people whodon't know about that.
And I think it's definitelysomething worth leveraged,
especially if you're involved,you know, in exports or if
you're looking todiversify your markets.
It's an absolutely invaluable.
Resource, right.
And that's like a Canadian likean organization that
is working abroad.
It's like a liaison.
Yeah, exactly.
Perfect.

(48:56):
Great.
So we're almost reachingthe end now.
So to wrap it up.
Could you share some simpleconcepts or frameworks for
business owners to help improvetheir daily operations?
Um, yeah, I mean,I would again, I would talk
really about this ideathat your, your decision
horizon is more attracted than,than it was before.
Nowadays, with everythingmoving so quickly and,
and announcements seeminglycoming out of nowhere.

(49:17):
So understanding what you cancontrol in your short
term horizon, which is again,you know, your your profits and
your productivity and then yourcash flow and your and your
costs and your leverage, how youcan control all of that
is very, very important inthe short term.
And then in the medium term,that's when you can kind of
look at, you know,the planning horizon okay.
Are my costs properly set?

(49:37):
Should I be charging morefor my products.
You know what kind ofrisks am I exposed to there?
And that's where the beauty ofof modeling and scenario work
can really come and help youbecause scenarios are really,
really important to help youkind of understand what the the
possible outcomes are.
So, you know, if you build abunch of scenarios and then you
look at the extremes,the extreme good or

(49:57):
extreme bad, it's not likelythat it's going to happen,
but it can let you know what'swhat could happen to my
business if my costs go up Xamount and my revenues go down
a certain amount.
So, you know, when you end upwith a middle of the road sort
of outcome, you're going to bewell positioned to be able to
understand where thingscould have gone.
So that's kind of themedium term exercise.
And then in the longer term,I'd say, you know, look towards

(50:20):
more structural, uh,things that you can do
with your business.
So reduce your costs,address wastes,
increase productivity.
Again, establish a taskforce for productivity.
You know, choose some of youremployees who are who
are driven, motivated, who wantto see productivity growth in
your in your company and seehow you can do that over the
longer term horizon.
Awesome.
And that's a wrapon this episode.

(50:41):
Arnaud, thanks so much forjoining us today.
It's been great getting allthese insights from you.
I know I learned a lot.
I'm sure our audience is goingto take away a lot from
this as well.
Thank you so much.
We learned a lot for sure.
It's my pleasure.
Thank you so much for having me.
It's been.
Fun.
So, Arnaud, we know you'realways traveling around the
world and speakingat different events.
So what's next for you?
Oh, so luckily, the summerbrings a bit of a pause.
Less events during the summer.
It's nice.

(51:01):
I can spend a little bit moretime at home, but things will
refire pretty quickly at theend of the summer and heading
into October, which is, in caseyou didn't know, Small Business
Month in Canada.
It's actually an initiativelaunched by BDC many,
many years ago.
We have a small business week,which is the week of
October 20th, but a lot ofcompanies and organisms have
have picked it up and do a lotof events around that time.

(51:22):
Celebrate small business isgreat for the community.
Exactly.
It's really goodfor the community.
BDC is very active during thatthat week and we're
pan Canada, so we'redoing events, you know,
presentations, Chamber ofcommerce, sort of
things across the country.
I myself will bein Ontario during that
week giving presentations.
So look, look us up, look upany events that could be
happening during that time,hours or otherwise.

(51:43):
Again, get out there.
Stay informed.
Connect with your peers.
Connect with you.
Know your business partners tofind out what's going on and
how to best address thechallenges of our time.
We'll also be rollingout a new study at
the economics Department.
We'll be rolling out a study onthe state of entrepreneurship
in Canada, which is going tohighlight some of the successes
and challenges thatentrepreneurs are
facing this year.

(52:03):
That'll be really exciting.
So stay tuned and we'll be veryhappy to connect with you guys
at any of our events.
That's fantastic.
Awesome.
Definitely go follow BD C andArnaud to stay connected and
updated with theCanadian business landscape.
Yes, go do that.
And if you like this episode ofthe Secret Life Inventory,
please leave us a comment,a like and subscribe.
All those things give usa five star review on Spotify.

(52:25):
And if you know someone who'sstruggling with tariffs,
please share thisepisode with them.
Okay.
And we'll see everyone inthe next one.
Bye bye everybody.
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