Navigating the U.S.’s unusually difficult political environment

If Dax Dasilva can positively engage with a country of more than 70 million Trumpists, then any of us can.

The founder and chief executive of Montrealbased Lightspeed POS Inc., a fast-growing developer of point-of-sale software for restaurants and other smaller businesses, is of Goan heritage, gay and a committed environmentalist. He writes in his book, Age of Union, that Lightspeed focuses on “culture as much as code.”

That culture is based on inclusion, diversity and respect. Lightspeed, which has a market capitalization of about $5 billion on the Toronto Stock Exchange and is on something of a buying spree, won’t look at acquiring a company that doesn’t match its values, no matter how many customers it could add.

President Donald Trump has spent four years assaulting Dasilva’s values, yet he captured roughly 48 per cent of the vote in one of the largest turnouts in American election history. The depth of Trump’s support, despite the election being called in favour of Democrat challenger Joe Biden on Saturday, surprised pollsters and everyone who thought his win in 2016 was a fluke. The latter group would include a large number of Canadians.

Before the election, David Wilkins, a former U.S. ambassador to Canada, told the Canadian Chamber of Commerce’s annual meeting that the two countries’ relationship was defined by bonds between individuals and businesses, not politicians.

Yet those bonds were formed by people who thought they generally saw the world the same way and adhered to similar values. That’s no longer true. Some 65 per cent of Canadian voters supported liberals, social democrats and greens in the last election, a rough proxy for the extent to which Canada and the U.S. are out of tune. That has to matter to some extent. If it didn’t, we’d do more business in places that make us uncomfortable.

Nevertheless, Dasilva made a big bet on the U.S. last week without worrying too much about who will be in charge in the years ahead.

Lightspeed said Thursday it planned to purchase ShopKeep Inc., a New York-based rival, for US$440 million, its biggest acquisition to date and its most significant push into the U.S., which already represents about half of its sales.

Lightspeed also reported that it earned US$45.5 million in the second quarter, more than it expected. The company’s Toronto shares were up about 20 per cent from the start of month. It was a good week.

Still, there was no hiding from the event that cast a shadow over everything.

Eric Miller, a Washington, D.C.-based political risk consultant, said it was difficult not to wonder whether the U.S. could fully recover from the damage that politics has inflicted on its institutions and its reputation over the past four years. The political polarization guarantees an extended period of instability that will weigh on confidence. Rules could change with the election cycle, and any company that offends a certain world view is asking for a boycott — or worse.

“It’s been a dangerous and corrosive period,” said Miller, founder and president of Rideau Potomac Strategy Group. “The level of trust Canadians had in the U.S. isn’t going to be easily rebuilt.”

Dasilva acknowledged that Lightspeed’s tendency to “stick our necks out a bit” on political issues comes with risks, but he was confident he could stay out of trouble by focusing his advocacy on issues, not individual politicians. He also noted that both candidates for president were keen on helping smaller businesses.

Trump has not yet conceded the presidency to Biden and is vowing to fight the election results. Even though political uncertainty still hovers over everything in the U.S., Dasilva was feeling fairly confident that those conditions could end up strengthening the segment of the economy in which Lightspeed operates.

“We’re bullish on the U.S. economy and the innovation we see in businesses there,” said Dasilva, one of the few chief executives who agreed to speak to someone from the Financial Post this week, despite more than a dozen attempts to get CEOs on the phone to talk about the one event that can compete with COVID-19 this year in terms of importance.

“No matter who leads the country, we think (the U.S.) is going to continue to be a leader in innovating in the small-business space. There is this belief in supporting local, shopping local, and that’s very congruent with the customer base that we serve.”

Away from the election, perhaps the most surprising Canadian business news this week was word that General Motors Co. intends to restart vehicle assembly at its plant in Oshawa, Ont., next year.