Canada must end ‘branch-plant mindset,’ Lacavera

Canadian industries could be giant killers.

“Let’s build our own homegrown winners, our own category killers – our own Amazons,” says Welland native Anthony Lacavera.

Reaching that point, however, will require a change in the attitude Canadians have of their country.

“We have a colonial branch-plant mindset that goes back to the founding of the country,” Lacavera adds.

“We have to shed that colonial mindset that has evolved into a branch-plant economy. We were serving the British Empire in the early days of our country, now we’re serving the new global empire – the United States.”

The chairman of Globalive Capital – a company Lacavera founded two decades ago when he was 23 – says Canadians should focus their attention on creating industries large enough to go toe-to-toe with multinational giants. Instead, he says the old branch-plant mindset seems to be perpetuating.

For instance, municipal and provincial governments across the country have recently been falling over one another in the hope of becoming home to a second headquarters for Amazon.com, after the Seattlebased e-commerce giant issued a request for proposals from municipalities hoping to be selected for the company’s US$5-billion investment that could create up to 50,000 high paying jobs.

“I’m very unhappy about the Amazon effort that’s happening,” Lacavera says. “I don’t think that’s a good move for us at all. Again, it’s perpetuating this branch-plant situation.”

He says U.S. technology giants like Amazon, Google and Microsoft are coming to Canada because it’s good for business – not because they want to benefit the Canadian economy.

“They get to pick off our best talent and all the intellectual property that our great engineering talent comes up with,” he says “All of that now is accruing to the Google shareholders, which are 99 per cent foreign owned.”

Lacavera wasn’t surprised to hear that Niagara too scrambled to put together a proposal for the Amazon investment, prior to Thursday’s deadline.

“It’s such a large number of net new jobs, any politician that has their head screwed on straight is going to go after it,” he says.

Despite his opposition to efforts to lure Amazon to this side of the border, Lacavera says Niagara’s gambit could have an edge over other Canadian communities because of plans to team up with communities in Western New York on the bid.

“I think a cross-border strategy, hearing you describe it, I think that makes a lot of sense. It seems something that Amazon could actually practically do,” he says. “I don’t believe that Amazon could actually locate their headquarters in Canada, given the Trump administration and given the fact that Jeff Bezos (Amazon CEO) and (U.S. President Donald Trump) have already been in a Twitter war, essentially. I don’t believe that Jeff Bezos would want to risk the U.S. administration creating all sorts of other grief for him if he moves 50,000 jobs out of the United States.”

Lacavera — who drew national attention about a decade ago as his company worked to establish Wind Mobile — hasn’t slowed down for an instant since the sale of that cellphone company to Shaw Communications Inc. for $1.6-billion in December, 2015.

Much of his time during the 18 months since the sale of Wind was spent putting pen to paper, recording his experience and perspectives about Canadian industry in a new book published two weeks ago by Random House Canada called How We Can Win: And what happens to us and our country if we don’t, coauthored by journalist and best-selling author Kate Fillion.

“Using all of my experience starting, building and operating companies here in Canada, I learned a lot about the Canadian market both from a government perspective, as you’ll recall with all the interaction I had with the federal government surrounding Wind, and then of course all the experience I’ve had trying to finance companies and operate companies here, I decided that I needed to put it all together in one place to talk about really where Canada is falling short, and my belief that Canada can have a world-leading economy and a world-leading way-of-life long term, if we start to focus on fixing some of our shortcomings.”

The book, which took considerable research to put together, including more than 100 interviews with industry leaders, also shares several “great Canadian entrepreneurial stories to try to celebrate some of our successes,” he says.

“It’s a positive look at where we can go with Canada and how our way of life can be really long term, very successful and sustainable.”

Lacavera said the book, which can be found on the best-seller wall at popular bookstores, explores several themes such as the need for more competition within Canadian business, as well as recognizing that we do have the ability to be world-leaders in things that Canadians do well.

“If we look at energy or automotive, or in Niagara, the agriculture and wine industries. Wherever you look in Canada we have some really exciting smaller and larger market presence, and we just have to start to celebrate that a little more and stop trying to service just multinationals.”

Still, he fears recent a influx of U.S. technology companies into Canada is only perpetuating the same mindset that has held the country back for generations.

“In the automotive industry for example, we have a situation where we’re consistently assembling vehicles for Ford, GM, Chrysler and so on, but we’re not making a Canadian car,” he says.

“Now we have the Trump administration saying we want to repatriate automotive jobs, and suddenly everyone in southern Ontario is panicked. If we had our own Canadian car, it would be a different story. We’d be exporting. We’d have more leverage.”

Making a truly Canadian car a reality is something Lacavera has considered doing himself, and in his book he lays out some of the steps it would require.

He included “a pretty prescriptive formula and series of structural changes” that would be needed to create a Canadian car manufacturer.

“There’s some policy stuff in there ... but it’s pretty straightforward what I think needs to be done.”

Lacavera, the son of retired judge Alphonse Lacavera, grew up in Welland playing junior B hockey in Welland and Thorold and attending classes at Notre Dame College School.

He used a hockey analogy to get his point across.

“In hockey, we expect to win gold. We could be playing against the United States, but we don’t worry that they have got 10 times our population. We expect to beat them and we’re unhappy when we don’t beat them,” he says. “We could have that same approach in business where we pick an industry, the ones we’re already strong in, and go up directly against the United States and win.”

Meanwhile, Lacavera continues to put his ideas about the Canadian economy into practice through his venture capital firm.

“I’ve been really active in the early stage technology ecosystem, investing in artificial intelligence-enabled start ups. That’s been a really fun experience, and I have a number of investments on the way.”

Despite warnings from people like El on Musk and Stephen Hawking who “think it’s Armageddon,” Lacavera isn’t concerned that humanity will be enslaved by its computerized creations.

“I’m not in that camp. I mean look, it’s going to be transformational there’s no question about that. But whether the machines play out as in James Cameron’s Terminator ...,” he said.