May 11, 2021

Unsubsidized: How We Managed Through 2020

To say the pandemic created uncertainty for business owners – especially in the earliest days – is a big understatement. Restaurants, hotels, airlines, barber shops, auto repair garages and so many other providers of goods and services across Canada all hung up Closed signs and stayed home. In response, the federal government stepped in repeatedly with a variety of programs to support landlords, renters, the unemployed, and business owners. 

One of those programs, the “Canada Emergency Wage Subsidy” (CEWS) was featured in a Globe and Mail article this week that was critical of members of our industry – asset management – for applying for and receiving CEWS funds. 

We thought clients may have questions about Leith Wheeler’s potential role in this story, so today’s note is meant to clarify that Leith Wheeler did not apply for CEWS funds, nor have we applied for any other government funding program since the pandemic began. 

We understand the motivation to shore up finances in the midst of the downturn, which temporarily erased over a third of the value from Canadian and US stock markets in February and March 2020. Asset managers earn fees on the market value of their clients’ investments, so declines like these can represent large decreases in expected revenue. 

At Leith Wheeler, we take a long-term view with both our clients’ investments and the management of our business. Being owned by a wide breadth of our employees gives us the ability to make decisions with this in mind, even during times of crisis. As such, we opted against applying for government funding support, decreased our own compensation, and committed to protecting the jobs of our team. We are pleased we succeeded in maintaining full employment for our staff and delivering respectable gains for our clients in 2020, after both groups displayed such admirable commitment during the onset of the COVID crisis. 

Even if market weakness had persisted, we feel confident our decision was aligned with our firm’s values of integrity, investment discipline, and independence as COVID put them to their most recent real test.

Jim Gilliland

Managing Principal, President & CEO