2018 Lookahead: Business trends to watch in Ottawa

Legal experts from Perley-Robertson, Hill & McDougall LLP share their forecasts on what LRT, legal marijuana and the city’s thriving startup scene mean for businesses
Dirk Bouwer, Martin St-Onge, Aaron Rubinoff and Joël Dubois

2017 was a busy year in Ottawa as tourists and residents alike flooded the city to mark Canada’s 150th anniversary.

But a look ahead shows that signs are pointing to 2018 as Ottawa’s big year.

The opening of a new light-rail line will bring true rapid transit to central Ottawa.

The city’s growing tech sector will continue to attract skilled workers and companies from other Canadian cities and beyond, complementing the capital’s stable of home-grown startups.

Other trends, meanwhile, will affect businesses regardless of their location and industry. The looming legalization of marijuana, for example, will force employers to rethink the rules around what activities are acceptable at work.

Several lawyers at PerleyRobertson, Hill & McDougall LLP recently shared their thoughts on the trends and issues to watch in 2018.

New arrivals 

Ottawa – and much of North America – was abuzz this fall at the prospect of landing Amazon’s second headquarters. However, the focus on the global e-commerce giant overshadowed some of the other companies considering Ottawa in their expansion plans.

Dirk Bouwer, a partner at PerleyRobertson, Hill & McDougall LLP and a member of the firm’s business law group, says 2017 saw an uptick of interest in Ottawa from foreign companies. That’s expected to continue into the new year.

“Canada has a good reputation, and Ottawa in particular is a booming city,” he says.

The city’s affordable housing prices, relative to southern Ontario and other markets, are also fuelling inbound migration.

Martin St-Onge, a partner at Perley-Robertson, Hill & McDougall LLP and a member of the firm’s real estate law group, notes that Ottawa may feel the side effects of government efforts to cool the housing market in the Greater Golden Horseshoe Region (GGHR).

This past April, the Ontario government imposed the NonResident Speculation Tax. It requires those who are not residents or citizens of Canada who purchase property in the GGHR to pay a 15-per-cent tax, in addition to the province’s Land Transfer Tax and in the case of Toronto, the Municipal Land Transfer Tax.

St-Onge will be watching to see whether the new tax regulations impact the GTA’s real estate market. If they do, prospective international buyers may look to Ottawa as a more affordable alternative to Toronto and its surrounding cities.

Where will all these new residents live and work?

Ottawa has a diverse range of housing and office space options, to be sure. But the construction of the city’s light-rail line – the first phase of which will stretch from Tunney’s Pasture to Blair Road and open in 2018 – is drawing developers to properties close to stations.

“Time will tell how that plays out, but the kick off is really going to be next year,” says St-Onge.

Cannabis 

The pending legalization of marijuana is creating fresh business opportunities as growers, distributors and investors race to capitalize on the new market for recreational cannabis.

“This will be one of the biggest corporate finance stories of 2018, with increasing interest as the legalization date arrives on Canada Day 2018,” says Bouwer.

However, Perley-Robertson, Hill & McDougall LLP is also watching an impending shift in how employers must treat their employees’ possession and use of the drug.

Joël Dubois, a partner and member of the firm’s litigation law group, says the legalization of marijuana will raise new HR issues.

“Will someone be allowed to go smoke on their lunch break?” he asks. The firm views the impending legalization as more of a minor challenge than anything else. Only time will tell whether the use of marijuana at work will be treated much like having a beer at lunch.

Nonetheless, businesses must be prepared with defensible and reasonable HR policies.

New technologies

Several disruptive innovations are set to have a profound impact on our day-to-day lives. Ottawa firms are racing to become leaders in artificial intelligence, autonomous vehicles and blockchain technologies, to name but a few examples.

However, there’s a legal side effect to such rapid innovation and commercialization of technology.

R. Aaron Rubinoff, co-chair and partner in Perley-Robertson, Hill & McDougall LLP’s litigation group, predicts increased litigation over the ownership of both equity and intellectual property within tech companies in 2018.

An unfortunate consequence of Ottawa’s booming startup culture is the occasional breakdown of companies. Without proper agreements in place, it often leads to hostility down the line between founding members, especially when someone is looking to get out.

“Where there’s confusion, there’s litigation,” says Rubinoff.

He believes the process of drafting such documents – whether shareholder agreements, employment agreements or any other type of contract – is as important as the signing. It forces team members to carefully examine all aspects of the business, better preparing them for any issues down the line.

To learn more about how Perley-Robertson, Hill & McDougall LLP can help you prepare for 2018, visit perlaw.ca.