Here's what the CEO of a Canadian bank thinks of Windsor's economy
BDC CEO Michael Denham celebrating 55th anniversary of his bank in the city
From the economic crash in 2008, to the resurgence of the auto industry a few years ago and the tumultuous NAFTA negotiations in 2018, the last decade has been an economic roller coaster for businesses in Windsor.
So how is the city doing today?
Michael Denham has his finger on the pulse. The president and CEO of the Business Development Bank of Canada (BDC) was in Windsor Thursday, meeting with clients and celebrating the 55th anniversary of his bank in the city.
Denham spoke to Afternoon Drive host Chris dela Torre about the local economy.
How would you characterize Windsor's economy these days?
I must say, in the past few years, the economic growth's been quite strong in Windsor — and certainly people here are feeling quick optimistic now given the outcomes of the NAFTA negotiations, and the fact that they can have some stability and some certainty on which to plan the growth and investments of their business.
Is [the USMCA] all good news for Windsor's economy?
If you look inside the deal — and I'm just going to play back what we've been told by our clients here — is the provisions around automotive, especially given the fact that tariffs won't be applied, I think that is quite encouraging.
There are some conditions and chapters in the deal that relate to SMEs [small and medium-sized enterprises] — and the BDC, we're the only bank that focuses exclusively on SMEs — so those conditions are quite good because it'll establish more of a dialogue and framework for SME development.
There are also some healthy provisions around labour conditions and labour standards which I think most Canadians will welcome as well.
There's still the uncertainty around steel and aluminum — the tariffs are still there — and I know that our government will work hard in the weeks and months ahead to address those, but there's no question that it continues to impose uncertainty and hardship on companies that are consuming steel and aluminum.
Well, given that uncertainty, and the fact that recent numbers tell us that car sales in general are slowing down in Canada, do you that the Windsor-Essex economy is over-reliant on the auto industry?
Well the numbers that our chief economist has run for this area show a slight diminishing in terms of economic growth, but fairly healthy economic growth for the years ahead.
What I tell our clients when I see them is that it is important to be diversified — that doesn't necessarily mean diversified in terms of international markets that one ships to, but it is important to be diversified in terms of the number of clients you have, the supply chains you're part of [and] the sectors you sell into, because that diversification will give you stability as your client's fortunes ebb and wane, and as sectors evolve.
How does a business in this area diversify? What are some of the other sectors that they should get involved in?
Well, a lot depends on your starting point.
You'd be surprised [to hear] that a lot of companies, a lot of our clients, sell only to maybe one or two customers, so for them the diversification challenge is to broaden their customer count and increase it.
Some of our larger clients are selling, say, just into the automotive sector, so finding ways to get out of automotive to food and beverage and other sectors would be relevant.
And some companies are selling into multiple sectors and for them the challenge is more to change into multiple geographies and rather than sell just Canada/US, look at opportunities in Europe or in China.
This interview has been edited for length and clarity.