As the Next Wave Crests, Where to for Family Enterprises?


Actions and initiatives for entrepreneurial families as they navigate the pandemic economy.

Vaccines are coming. Markets are rallying. And if the pundits are to be believed, a Joe Biden presidency will mean more stability and predictability for Canada.

It won’t happen overnight. There remain conspicuously high levels of uncertainty among family enterprises, here and internationally.

The feast-or-famine effect of lockdowns followed by re-opened economies, followed by more lockdowns – partial or full depending on the behaviour of pandemic-fatigued populaces – has made life nigh impossible for cash-flow planners and supply chain managers.

“The constantly changing norms and regulations make it difficult to build up efficiencies or enact strategies with any consistency,” says McGill University’s Robert Nason1, who expects the arrival of coronavirus medicines to have at best a muted effect on restoring order.

Road to Recovery

Meanwhile, economic growth is sclerotic and will remain so into the new year. The Bank of Canada projects annualized growth of only 1% in the final quarter of 2020 and is reiterating expectations for a drawn-out recovery over the next several quarters.

There is good news. With the US general election over, Canadian enterprises can expect more clarity from their southern neighbour. But a Democrat presidency won’t necessarily mean freer trade. Aluminum and steel sector disputes might settle down, yet the “Buy American” mentality, which amounts to favouring protectionist measures, could harm Canadian business.

President-elect Biden has admitted to being in favour of banning Canadian companies from bidding on US public infrastructure contracts, something they currently can do. If he kills the Keystone XL pipeline, which he has promised to do, then 2,000 construction jobs to Albertans could go up in smoke.

Supply chain woes and fears over rising government debt aside, Sirius Financial Services’ Susan St. Amand2 warns that Canada’s entrepreneurial families are in the grip of uncertainty. “It’s difficult for families that straddle both countries, as many of ours do,” she says. “No one knows how long our borders will be closed.”

In some cases, uncertainty is driving enterprising families together as co-investors in direct investments. This is not new. In the past five years, a rising number of entrepreneurial families exiting private equity and public markets has created larger and larger liquidity pools, so much so that family office capital now competes directly with private equity.

Capital Support

“Families are pitching directly to other families for capital support,” says Deloitte’s Michelle Osry3. Since direct investing fits comfortably with the transgenerational desires of families to transmit their wealth over long-term horizons, eliminate management fees and retain control over their investments, it’s no wonder families seek out like-minded families as co-investors in shared projects.

Digital commerce is no longer a luxury

Yet size matters in the longevity stakes and in the capacity to invest in meaningful projects that create new revenue streams. “Small family firms are still struggling for survival and just trying to stay afloat,” points out Nason.

They may be struggling, but they’re adapting too. PayPal Canada reports accelerating digital commerce capability among small businesses. The number selling online has spiked nearly 400% in the past five years with the pandemic being a major catalyst for merchants going digital. “Digital commerce is no longer a luxury, it’s a necessity to survive,” says Nicole Watts, head of PayPal Canada’s Government Relations.

“Family enterprises are learning new ways of doing business and seizing new opportunities,” says Maria Fonseca4 of the Institute of Enterprising Families. “Digitalization is the name of the game.”

Pivot and Innovate

But what of the family businesses that pivoted into new markets last spring? Many continue to innovate and leverage the pandemic as an opportunity to expand. In some cases, says St. Amand, they’re using government benefits to strengthen business lines and grow new ones. “They’ve pivoted well and are moving their technological changes more rapidly than expected. They’re investing in the new economic models for future.”

South of the border, US family enterprise expert Joe Astrachan5 points out that government handouts have helped companies retain employees – and survive – while giving them breathing space to adapt to issues of diminished travel and structural changes in the global economy.

“Whether these (adaptations) are permanent remains to be seen,” warns Astrachan, stressing that family businesses that are doing well “got an early start on thinking about how to contend with the COVID-19 fallout and made adjustments long before their competitors.”

Of course, government support is finite. And change, as they say, is inevitable. Yet with their trademark flexibility, family enterprises seem better placed to make further turmoil palatable.

For more information on the Family Enterprise Barometer, visit our page.


  1. Robert Nason is an Associate Professor of Management at McGill University’s Desautels Faculty of Management, Canada
  2. Susan St. Amand is the Founder and President of Sirius Financial Services, Canada
  3. Michelle Osry is a Partner, Family Business Advisory, at Deloitte, Canada
  4. María Fonseca Paredes is Director of the Institute of Enterprising Families for Mexico and Latin America, Mexico
  5. Joe Astrachan is Professor Emeritus and past Executive Director of the Cox Family Enterprise Center at the Coles College of Business, Kennesaw State University, USA

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