Calgary Chamber of Commerce

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THE BUSINESS OF NATION BUILDING:

the future of our energy sector

ATCO chair & CEO Nancy Southern talks opportunity, technology and enterprise transformation

For Nancy Southern, Chair & CEO of both ATCO and Canadian Utilities Limited, the collapse in energy prices, followed by a global pandemic and the movement toward cleaner forms of energy has catalyzed dramatic change for the company. Southern says the ability to respond to the changing environment has become part of ATCO’s DNA throughout its 75-year history. ATCO was started in 1947 by R.D. Southern, 17 at the time, and his father S.D. Southern, who each invested $2,000 to start Alberta Trailer Hire - providing relocatable accommodations to workers in Canada’s first oil boom. Through the ensuing decades, the company expanded internationally, working in more than 100 countries around the world. Along the way, it also diversified its operations – adding operational support services, natural gas and electric utilities, energy storage, power generation and ports and transportation to its base businesses. More recently, the company is eyeing low-carbon hydrogen as a catalyst for future growth and a potential game-changer for the Canadian energy industry and economy. “Some businesses see our current economic and social environment as the perfect storm,” Southern says. “We flip that narrative on its head to examine how it’s the perfect opportunity. With the technology, skills, expertise and infrastructure at the ready, we have the key tools to act on new ideas.”

SEEDS OF CHANGE

For ATCO, the latest seed of transformation was planted half a world away – in Australia. In 2011, the company acquired WA Gas Networks, the largest natural gas distribution utility in Western Australia. The acquisition would become an important stepping-stone in ATCO’s clean energy journey. The country, similar in many ways to Canada, has been an important proving ground for introducing hydrogen to natural gas distribution systems. In 2019, with Australia’s National Hydrogen Strategy as its guide and start-up funding from the country’s renewable energy agency, ATCO was able to build and test a closed system that integrated natural gas, solar, battery storage and electrolysis to power a modular home.

ATCO’s Clean Energy Innovation Hub was developed to test new ways of using clean energy sources.

The knowledge ATCO gained in Australia is now being applied in its work with Suncor. In May, 2021, the companies announced their collaboration on a potential world-scale hydrogen project near Fort Saskatchewan, which would produce more than 300,000 tonnes of clean hydrogen annually. Once operational, the project would have the capacity to reduce CO2 emissions by more than two million tons per year, the equivalent of taking 450,000 cars off the road annually.

BACK TO BASICS

It’s possible the seeds of change were sown even before Australia, well before the company’s partnership with Suncor. Southern speaks of the energy sector downturn and how strong economic headwinds in Alberta, particularly in 2015 and 2016, were challenging for the company. “Through our previous success and a very favourable economic environment, we had become order takers instead of business creators,” says Southern. “It wasn’t our success that forced us to find efficiencies and spur innovation. It was the downturn that pushed us to work harder to activate the imaginations of our people.” As if to reinforce the point, she refers to ASHCOR Technologies as “our little start-up company.” ASHCOR uses proprietary technology to reclaim fly ash from ash ponds and landfills. Traditionally a by-product of coal-fired power generation, fly ash is used in a variety of applications, from concrete to soil stabilization.

The accelerated retirement of coal-fired power stations across North America, paired with growing fly ash demand and ASHCOR’s proprietary technology, has ATCO setting its sights on expansion throughout North America. The use of recycled fly ash instead of manufactured cement presents the opportunity to reduce the carbon footprint of concrete production – an industry that contributes about eight per cent of global CO2 emissions.

EXPLORING THE POSSIBLE

Exploring the boundaries of possibility is again becoming standard practice for ATCO. In true form, when discussing the merits of hydrogen, Southern thinks big: “Hydrogen can be a nation builder,” she says. “From coast to coast this is something that can be done to bring great prosperity to our country. To meet the world’s energy needs and decarbonize at the same time.”

Pragmatically, she doesn’t shy away from acknowledging the challenges. “The principles of business are still very important.” She refers to investor expectations around risk, returns and delivering on projects. Southern discusses the need to standardize accounting for ESG metrics to bring consistency to how capital investment in clean tech is valued. Technical expertise in the trades and modernization of learning curriculums are also areas of growing need. Southern points to a world in transition, referencing the lengthy time horizon to shift capital stock (e.g. trucks, trains, ships and planes) of supply chains to alternative energy sources. She discusses implications of the carbon tax to the cost of goods and availability of alternative power sources and links the issues to both existing and potential pressure points for consumers, businesses and governments alike. Southern believes the challenges can be navigated, attributing her optimism to the success of ATCO’s transformation. “It’s all possible,” she says. “We just need to figure out how to get out of each other’s way, instead of focusing solely on the things that could hold us back.”

BRIGHT HORIZONS BREED OPTIMISM

Would the Chair & CEO of ATCO ever have imagined she’d be touting hydrogen as a nation builder? Simply stated, “no”. She brings it back to imagination and creativity that propelled ATCO from a $4,000 Alberta start-up in 1947 to the $22-billion multinational enterprise it is today. A culture of transformation has served ATCO well. ATCO is a prominent example of resilience, determination and creativity – a distinctive Alberta brand that the province’s businesses and entrepreneurs have become known for. For early-stage companies and a tech sector that is gaining momentum right here in Alberta, ATCO exemplifies what it means to innovate and reinvent while never losing sight of the foundations that propelled the company’s success from the start. And when it comes to future prospects for ATCO, Southern smiles with confidence, “we’re just getting started”.

ABOUT NANCY SOUTHERN

Nancy Southern is chair and chief executive officer of ATCO Ltd., and chair and chief executive officer of Canadian Utilities Limited, an ATCO company. She also serves as executive vice president of Spruce Meadows Ltd. and is a founding Nancy Southern director of AKITA Drilling Ltd., a director of Sentgraf Enterprises Limited, an honorary director of BMO Financial Group and serves on the Rideau Hall Foundation board of directors. Ms. Southern has long played a prominent role in advocating on social issues of global importance— most notably, the rights of Indigenous peoples and the role of women in business. She is an Honorary Chief of the Kainai (Blood Tribe of Alberta) who bestowed the name Aksistoowa’paakii, or Brave Woman, upon her in 2012.

In 2020 she was awarded the British Empire Medal for services to British equestrian, military, and commercial interests in Alberta. In 2018, she received the Canadian Business Leader Award from the University of Alberta and was named a Distinguished Policy Fellow by the University of Calgary’s School of Public Policy in recognition of her lifetime commitment to Canadian public policy. She was inducted as a Companion into the Canadian Business Hall of Fame in 2017.

BUILDING A FUTURE-READY WORKFORCE

Attracting great people and keeping them engaged and connected with the workplace is not a new source of competitive advantage for businesses. But as the global competition for talent heats up, it is where resilient and future-ready businesses are being built – and challenged, like never before.

There are several key trends shaping the supply and demand of labour. The response to such trends among employers will define the degree and pace with which we move from economic recovery to growth.

Let’s review five key trends shaping our labour landscape:

1. DEMOGRAPHICS

By 2030, it’s estimated one in four Canadians will be seniors. There are now more seniors in Canada than children. Canadians are living longer and are healthier in their later years. With declining fertility rates, families are also smaller on average which aligns with an expected decline in the proportion of Canadian youth.

2. DIVERSITY

Canada is seeing an increase in cultural diversity. Noteworthy is Calgary’s position as one of the country’s most diverse cities with 28 per cent of citizens born outside of Canada and more than 120 languages spoken. Increasing diversity is expected to continue with much of Canada’s population growth driven by immigration in the coming decades.

3. TECHNOLOGY

Research indicates over ten per cent of Canadian workers face a high likelihood that their jobs will be disrupted by automation and artificial intelligence. Tools and technology that facilitate virtual learning, remote work and team connection are also transforming how and where we work.

4. PLACE

At the beginning of 2021, 32 per cent of Canadian employees aged 15 to 69 worked most of their hours from home, compared with only four per cent in 2016. With the rise of the gig economy and workspace sharing options like TradeSpace, the importance of bricks and mortar of the workplace is declining as demand for virtual and remote-working options rises.

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5. VALUES

As our population ages and is more likely to live – and work – into their later years, the workplace will increasingly include employees across generations. Important to note is the prevalence of varying values among generations, with Gen Y generally favouring worklife balance and Gen Z gravitating towards independence and entrepreneurial opportunity. Baby boomers, on the other hand, are known to value financial security, loyalty and a strong work ethic.

With these trends in mind, employers can cultivate workplaces that meet the changing and diverse needs of an evolving workforce. While there are countless ways to respond to emerging trends, here are three key areas employers can focus on:

OFFERING FLEXIBILITY IN ALL FORMS

Workplace flexibility often focuses on policies that promote balance between the demands of work and personal life. While work-life balance is known to be highly valued among Gen Y employees, employers must consider how their flexibility offerings meet the needs of a broader age demographic. For older adults, this may mean offering part-time work, the opportunity to work remotely from anywhere, or flexible skillbuilding and upskilling training to ensure skills remain relevant and applicable to the current workplace. For Gen Y, who may be in a stage of life with greater demands on their personal time, flexible offerings may be about supporting that balance with alternative work arrangements, flexible work hours or remote working options.

For Gen Z, a population of workers known to value independence and entrepreneurial endeavors, flexible job descriptions that allow opportunity for input into roles and responsibilities may be important.

Creating a culture of flexibility will be a key input into an overall value proposition that will appeal to a broad array of workers – no matter their age or generational label.

FOSTERING DIVERSITY AND INCLUSION

Companies in the top-quartile for ethnic and cultural diversity on executive teams were 33 per cent more likely to exhibit industry-leading profitability. Similarly, addressing gender inequality in the workforce is anticipated to boost economic growth in Canada by $150 billion by 2026. With diversity expected to increase in the coming years, employers have an opportunity to set the stage to attract and engage a diverse workforce that will feel valued and be wellpositioned to contribute to business success and profitability. Establishing diversity targets can be a first step and initiatives like the 50-30 Challenge may accelerate meaningful action. The challenge is simple: adopt gender parity (at least 50 per cent women and/or non-binary people) and 30 per cent representation of other equity-deserving groups on Canadian boards and among senior management.

For employers looking to move ahead on specific action, they may choose to conduct a gap analysis of practices and policies. While not all organizations are equipped with the internal capacity or knowledge to do so, organizations like the Canadian Centre for Diversity and Inclusion offer services to help employers examine blind spots and incorporate best practices into the workplace. Overall, action on diversity and inclusion in the workplace serves as an important indicator to prospective employees of their value and importance in shaping the success of the business. The desire to be welcome, engaged and valued isn’t a unique need of any one group and is an area employers must pay attention to if they want to build and maintain a healthy, resilient and future-ready workforce.

DELIVERING THE VALUE PROPOSITION

Leading employers have an innate ability to communicate, and then deliver on, employment promises. While a great value proposition may get employees through the door, the door will begin revolving if employers don’t deliver. Policies, recruitment practices, leadership appointments and opportunity must deliver the promised benefits. The alternative is the dreaded “retention problem” – where an employer is so focused on slowing the revolving door, they become trapped in a cycle of selling the value proposition instead of delivering on it.

THE WORKFORCE OF THE FUTURE AWAITS

When it comes to attracting a great workforce, Calgary has a strong foundation to start from. A young and educated population, strong post-secondary institutions, high quality life, affordability and consistent ranking as one of the world’s most liveable cities. Add to this, burgeoning opportunities across increasingly diverse sectors and a culture that embodies entrepreneurialism, creativity and collaboration and many boxes are already ticked by a current and emerging workforce. Employers can build on these advantages by responding and adapting to salient trends. Offering a flexible and inclusive workplace that reflects the needs of a population diverse in age, ethnicity, values and needs will require time and attention from employers. But in the global competition for talent, it is also what will be required to establish and maintain a resilient and future-ready workforce positioned to propel your business forward.