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ANDREW WILLIS, ERIC REGULY, CHRISTINE DOBBY, JEFFREY JONES, JEFF LEWIS, ERIC ATKINS, BRENT JANG, DAVID EBNER, ANDREW WILLIS, SEAN SILCOFF, JACQUELINE NELSON, ALEXANDRA POSADZKI, CHRISTINA PELLEGRINI, JAMES BRADSHAW

Tuesday, December 26, 2017

As we say farewell to 2017, we're taking the Wayne Gretzky approach to business: We're writing about where the puck is going in the coming year. These are 18 corporate and political leaders expected to make headlines in 2018.

Some make this list in anticipation of wheeling and dealing in the coming year, against a backdrop of low but rising interest rates and strong economic growth.

Others must cope with the hangover from some of the biggest news developments of the past 12 months: The Ontario Securities Commission's Maureen Jensen faces the task of regulating cyrptocurrencies such as bitcoin; Minister of Foreign Affairs Chrystia Freeland must handle calls from the Trump White House as trade negotiations grind on.

1. Chrystia Freeland, Canada's Minister of Foreign Affairs If the typical CEO botches a takeover, their company's stock drops a few bucks. If Ms. Freeland drops the ball on NAFTA talks, triggering a breakdown in U.S.-Canada relations, her country faces a possible recession. So it's no great leap of logic to predict Canada's 49-year-old Foreign Affairs Minister will be making headlines. Early in 2018, trade talks between Canada, the United States and Mexico are expected hit a deal-or-no-deal moment. Ms. Freeland, Albertaborn and Harvard-educated, has been preparing for this showdown since U.S. President Donald Trump took office.

Supported by the Prime Minster and the diplomatic corps, she spent last year quietly building support for the North American free-trade agreement in U..S. political and business circles. In coming months, we'll find out if all that lobbying worked. For Ms. Freeland, a former Globe and Mail journalist, staying out of the headlines may qualify as the best possible outcome: Trade talks that quietly drag on, with the United States remaining at the negotiating table, would be a positive step for Canada. In contrast, a high-profile break with the Trump administration puts a $600-billion trade relationship at risk. So it's worth hoping we are wrong about this prediction, and that Ms. Freeland has a low profile in the coming year.

2. Brian Kingston, CEO of Brookfield Property Partners Betting against bricks-and-mortar stores and malls as they came under pressure from e-tailers such as Amazon was probably the greatest short-selling strategy of 2017. Retailers' shares fell 30 per cent or more. Some collapsed altogether: witness the bankruptcy and liquidation of Sears Canada. Brian Kingston, the 44-year-old CEO of Brookfield Property Partners LP (BPP), is gambling that the retail apocalypse has run its course. The head of the global real estate portfolio at Brookfield Asset Management Inc. is making an enormous contrarian bet. BPP offered $14.8-billion (U.S.) in cash and shares for the 66 per cent of GGP Inc., the second biggest U.S. mall operator, that it does not already own. Shares are trading slightly above the $23 offer, suggesting investors think BPP will eventually improve the price. Mr. Kingston agrees that hundreds of malls in the United States are doomed, but many hundreds more destination malls can thrive as they reinvent themselves, adding entertainment, restaurants and housing to the retail mix to attract day trippers and condo buyers. "It's an exaggeration to say all malls are dead," he said in a recent interview. He may be right, or not - retailers remain among the most shorted shares on the market on both sides of the Atlantic.

3. Joe Natale, CEO of Rogers Communications Inc.

Joe Natale became the fourth CEO of Rogers Communications Inc. in April, taking over six months after the sudden departure of attention-seeking British telecom executive Guy Laurence. Mr. Natale's start date was delayed by the terms of a noncompete agreement he had with former employer Telus Corp. That drama now behind him, he is focused on guiding the Toronto-based telecom giant through an important year. Rogers is getting ready to launch a new television product - it is licensing the internet-based technology from Comcast Corp. - and is making big investments in its wireless network to catch up with rivals BCE Inc. and Telus Corp. But Mr. Natale might get more attention in 2018 if he decides to sell the Toronto Blue Jays (or perhaps spins off the baseball team to keep sluggers' salaries off the Rogers income statement).

Ask anyone and they won't say a bad word about Mr. Natale, but as the CEO looks for ways to "surface value" from the team, baseball fans might soon disagree.

4. Alex Pourbaix, CEO of Cenovus Energy Inc.

Cenovus Energy Inc.'s $17.7-billion takeover of ConocoPhillips's oil sands and natural-gas assets was the most talked about deal of 2017, and not in a good way.

Alex Pourbaix's entrance as CEO in early November is one result of investor scorn over the megadeal, which was greeted with complaints that Cenovus overpaid.

Another result is a stock price that remains 35 per cent below the level before the deal was uncorked in late March. The former pipeline executive replaced Brian Ferguson, who retired in a surprise move not long after announcing the acquisition. Mr. Pourbaix quickly showed he aims to do more than just mind the store.

In December, the company said three prominent members of the old management team were leaving, along with 15 per cent of the rank and file. The new boss will have to be a taskmaster on meeting targets, especially on cutting operating costs, as Cenovus struggles with a widening discount in the price paid for its oil sands crude because of tight pipeline capacity. It has among the highest exposure to that risk because its U.S. refining partnership with Phillips 66 secures a home for only half of its newly doubled-up production. Meanwhile, the company faces another tough road after its stumble - regaining currency with global investors whose attentions have shifted away from Canada's oil sands.

5. Dawn Farrell, CEO of TransAlta Corp.

The dark clouds over TransAlta Corp. are starting to part. For nearly three years, chief executive officer Dawn Farrell has been navigating an existential struggle as the power generator scrambles to meet a 14-year deadline imposed by Alberta's NDP government to ditch coal-fired electricity. Investors have punished the company's shares, driving them down by a third. Yet there is fresh momentum behind Ms. Farrell's planned overhaul, placing the company at the centre of Alberta's efforts to green its electrical grid. TransAlta, which secured $524-million in compensation for mothballing coal plants years ahead of schedule, is accelerating plans to switch some of them to run on natural gas. It also expects to generate $50-million to $60-million in annual carbon credits under toughened provincial rules, benefiting from its existing stable of renewable power assets. Ms. Farrell is also weighing the potential for a $2.5-billion hydroelectric storage project, showing there's more to Alberta than oil.

6. James Foote, CEO of CSX Corp.

The death of railroader Hunter Harrison pushed James Foote into one of the toughest roles in business - completing the work of a legend. He took charge of Florida-based CSX Corp., owner of the largest rail network east of the Mississippi River, in December after health troubles forced Mr. Harrison from his job.

Mr. Harrison died two days later, on Dec. 16. The pair worked together at Canadian National Railway Ltd. in the 2000s, so Mr.

Foote knows well the precision railroading model his boss used to rejuvenate industry laggards.

But Mr. Harrison had only just begun rebuilding CSX, becoming CEO in March and then watching several experienced executives depart. That means Mr. Foote, with a background in sales - not operations - is in charge of the third-largest U.S. rail carrier in the middle of a revamp that has angered some customers and drawn the scrutiny of the U.S. regulator. CSX's board on Dec. 22 dropped "acting" from Mr.

Foote's CEO title, a bet the new guy is the best one to clean up Mr. Harrison's unfinished business.

7. Ted Seraphim, CEO of West Fraser Timber Co. Ltd.

Ted Seraphim is glad to play the waiting game as Canada and the United States remain deadlocked in the trade fight over softwood-lumber shipments south of the border. The West Fraser Timber Co. Ltd. chief executive officer watched lumber prices surge in 2017, as the Vancouver-based producer and other Canadian softwood suppliers passed along most of the U.S. punitive duties to buyers. He reckons that the crossborder math works in West Fraser's favour as long as the lumber market stays buoyant. Mr. Seraphim, trained as a chartered accountant, will be plenty busy in 2018 and won't be paying much heed to long-running rumours of a potential merger between West Fraser and Canfor Corp., another Vancouver-based forestry firm. B.C. billionaire Jim Pattison has a stake slightly above 10 per cent in West Fraser, which is Canada's largest lumber producer. Mr. Pattison also holds just under 50 per cent of Canfor.

8. John Horgan, Premier of British Columbia Premier John Horgan remains an unknown outside his home province after narrowly winning office in 2017. His minority government was made possible by a deal that sees the Green Party effectively guarantee it will not bring down Mr. Horgan. The NDP's opposition to the Kinder Morgan oil pipeline is likely to trigger a nasty showdown with both federal Liberals and the NDP government in neighbouring Alberta, both of whom back the project. Mr. Horgan is also going to be in the headlines at home for supporting large industrial projects such as the Site C hydro dam and also would back an LNG plant - if Royal Dutch Shell PLC and partners finally make a move in 2018.

And, oh yeah, there's the softwood-lumber trade dispute with the Americans. Meanwhile, economists at National Bank Financial predict B.C. will lead Canadian provinces in 2018 with GDP growth of 3 per cent.

9. Steven Hudson, CEO of ECN Capital Corp.

For Steven Hudson, founder and CEO of ECN Capital Corp., the coming year marks a pivot point for his finance company. Mr. Hudson spent 2017 getting out of businesses that tied up significant amounts of capital, raising $3.1-billion (U.S.) by selling divisions that financed trucks, trailers, rail cars and aircraft. As the year ended, he began plowing that cash back into what the 58year-old entrepreneur calls "asset light" businesses, where ECN Capital is paid to originate and service loans and leases in obscure but lucrative markets, such as home improvements and manufactured housing. It then packages these contracts and sells them to dozens of banks and credit unions, which pay Mr. Hudson's team a fee to ensure clients are creditworthy and collect monthly payments.

Mr. Hudson, who previously built and sold a number of businesses including Newcourt Credit Group, begins 2018 with $600-million (Canadian) of cash, an existing business that oversees more than $5-billion of assets and a pipeline of potential acquisitions. With one more strategic acquisition in his sights in the new year, the veteran dealmaker says: "ECN's pivot from a balance-sheet-heavy commercial finance business to a balance-sheet-light consumer finance business, will be complete in the first half of 2018." 10. Michelle Zatlyn, COO of Cloudflare Inc.

One of the most successful Canadians in tech capital San Francisco is set to achieve a significant milestone in 2018 if the company she co-founded, cybersecurity startup Cloudflare Inc., goes public as expected.

The eight-year-old startup, labelled a "unicorn" for achieving a private market valuation of $1 billion (U.S.), helps keep the internet fast, safe and reliable, encrypting seven million internet properties that handle 10 per cent of online traffic, including corporate websites, political pages and personal blogs to protect them from cyberattacks.

Born in Prince Albert, Sask., Ms. Zatlyn, Cloudflare's chief operating officer, studied chemistry at McGill University and met her two co-founders while attending Harvard Business School in the late 2000s. Interesting fact: Cloudflare uses images of lava lamps, a "chaotic pendulum" and radioactivity to generate random cryptographic "keys" used to protect its customers.

11. Roy Gori, CEO of Manulife Financial Corp.

Australian-born Mr. Gori may be settling into his first Canadian winter, but the country's staid insurance giant isn't in hibernation mode. Mr. Gori has pledged to shake up Manulife's culture and embrace technology. But the move to watch in 2018 will be the insurer's efforts to reshape the company by selling or hiving off some legacy U.S. assets, such as closed annuity books and long-term care insurance that aren't generating returns up to his standards. A couple of other insurers in the U.S. have been trying similar tactics to sell less-profitable businesses, with mixed results. For Mr. Gori, meeting his ambitious goals will require bold action. As the CEO put it earlier this year, he's trying to turn a big ship. But in 2018, he will have some fresh crew to help him along, including a new chief financial officer and board chair. The heads of the company's major divisions, including in Canada, the United States and Asia, have also been reassigned within the last few months.

12. Janice Fukakusa, chair of the Canada Infrastructure Bank The Canada Infrastructure Bank (CIB) is closing out the year with a stacked new board of directors in preparation for its official launch. But 2018 will be the true test of the CIB's momentum, as Ms. Fukakusa appoints a permanent CEO for the Crown corporation, which will be able to draw on up to $35-billion for investments alongside institutional investors to help close the country's multibillion-dollar infrastructure gap. The CIB has earmarked money for public transit, trade corridors, water treatment systems and renewable power projects; Ms. Fukakusa is charged with helping to figure out where that capital gets spent. While many of the country's largest investors have expressed tempered enthusiasm for the project, there's uncertainty around how the organization will actually work. The CIB took a step forward in mid-December when board member Bruno Guilmette agreed to step in as interim chief investment officer to ready the bank for its first investments. It's up to Ms. Fukakusa to make this Liberal government dream an operational reality.

13. Maureen Jensen, chair of Ontario Securities Commission As the chair and CEO of the country's largest securities regulator, Maureen Jensen plays a vital role in maintaining the integrity of capital markets and ensuring that Ontario investors are protected. The Ontario Securities Commission head is also likely to be the one left mopping up the mess when the bubble in the cryptocurrency space inevitably bursts. In 2017, the price of bitcoin surged more than 1,500 per cent while the market for new virtual currencies exploded. The mania in initial coin offerings - a new method of fundraising where companies sell digital tokens or coins to finance a venture - caused Canada's securities regulators to step in. In an industry release published in August, the Canadian Securities Administrators, a national umbrella organization, cautioned that some coin offerings may qualify as securities and could be running afoul of securities laws.

Regulators are still playing hot potato with bitcoin and cryptocurrencies - it's not entirely clear who is responsible for keeping an eye on the space - but the OSC is closely monitoring the sector and it's expected that 2018 could see enforcement actions.

14. Paul Lem, CEO of Spartan Bioscience The Ottawa doctor-turned-entrepreneur hopes his breakthrough technology, a handheld DNA testing machine that yields results in 45 minutes, could have the most significant impact on human health of any Canadian invention since the discovery of insulin. His firm, Spartan Bioscience, is awaiting results from a federal government study in early 2018 to see if his technology is shown to be more effective at identifying the bacteria that causes Legionnaire's disease - which is spawned in building cooling towers and affects tens of thousands of Americans alone annually - than conventional methods, allowing building managers to prevent outbreaks of the deadly respiratory ailment. Backed by Asian consumer electronics giants Canon Inc. and manufacturing partner Wistron Corp., Spartan is preparing to scale up in 2018 and build devices for property managers globally who have expressed interest, and has hired CIBC to raise tens of millions of dollars to fuel its growth.

15. Bruce Linton, CEO of Canopy Growth Corp.

No other public company has grown up to represent the medical cannabis industry quite like Mr. Linton's Canopy. The firm, based in Smiths Falls, Ont., has Bay Street cred, a market capitalization worth $4.4-billion and a client base of more than 63,000 patients. With Canada on the verge of allowing cannabis for everyday recreational use in mere months, demand for legal bud is about to explode. And Mr. Linton is setting up Canopy to be the largest supplier in the market by building another 2.4 million square feet of growing space. He scored a major partner when alcohol giant Constellation Brands acquired a 10-percent stake in Canopy last month for $245-million. The deal could see the two companies cook up some recipes for weed-infused booze - and sell bottle after bottle once it becomes legal.

16. Laura DottoriAttanasio, senior executive VP and chief risk officer of CIBC When Canadian credit gets this frothy, the banks' risk managers start feeling the heat. And at CIBC, chief risk officer Laura Dottori-Attanasio occupies a particularly hot seat. She has already proven her cool, managing the bank's energy exposure through a plunge in oil prices in 2016. Outwardly, she comes across as understated and matter of fact. But Canada's fifthlargest lender has heavier exposure to residential mortgages and home-equity credit lines than its peers - a combined 63 per cent of its gross loans. And concerns about the prospect of a correction in housing are simmering, as household debt hits record highs. At a recent investor day, Ms. Dottori-Attanasio stressed that CIBC's business leaders "really own the risk" in their portfolios. But when risks become reality, she's still the chief.

17. Andrew MacLeod, president and COO of Postmedia It's an unenviable job, but Andrew MacLeod seems to want it badly. Three years after decamping from a long tenure at BlackBerry, he is the heir apparent to the chief executive's chair at Postmedia - Canada's largest newspaper publisher and, arguably, its most troubled. For years, the company has been cutting staff and closing papers to stay afloat, weighed down by heavy debts. Mr. MacLeod climbed the company ranks quickly since arriving in 2014 as chief commercial officer, building his influence and leapfrogging rivals to become chief operating officer. More recently, he added the president's title that formerly belonged to CEO Paul Godfrey - who calls Mr. MacLeod his "designated survivor." Mr. MacLeod's daunting challenge is to craft a digital strategy that helps Postmedia compete with companies he calls the "apex predators" of advertising - chiefly Google Inc. and Facebook Inc. - in time to rescue its dwindling revenue.

18. Galen G. Weston, CEO of Loblaw Cos. Ltd.

The year ahead could be a challenging one for the grocery industry, and all eyes will be on Galen G. Weston to see how the country's largest grocery chain navigates the headwinds. Earlier this year, Loblaw Cos. Ltd. disclosed to investors that it could see $190-million in additional labour costs in 2018 as a result of minimum-wage hikes in Ontario and Alberta. The sector is also bracing itself for a new competitive threat from online retail giant Amazon, which made inroads into the supermarket industry in 2017 with its acquisition of Whole Foods Market Inc.

Recently, Loblaw found itself at the centre of a 14-year scheme to fix the prices of packaged bread.

To make amends, the grocer promised to provide affected customers with $25 gift cards - a gesture that could eat into the company's profits to the tune of $150-million.

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JEFF MCINTOSH/THE CANADIAN PRESS

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