Business in Vancouver 2011-08-23 by GLACIER MEDIA DIGITAL LIMITED PARTNERSHIP dba BUSINESS IN VANCOUVER

Local. Business. Intelligence. August 23–29, 2011 • Issue 1139

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More private campsite owners opting for lucrative land development alternatives 5 Insider trading: Who bought what and for how much 9 How to ensure your sales team wins its sprint to the finish line 13

No longer carbon neutral

Victoria’s requirement that B.C.’s public sector be carbon neutral is forcing school districts and other cash-strapped public services to help fund emissions reduction projects of major industrial polluters 4-5

Abbotsford’s business push gets airlift

Spinning new business communities from old shopping centres 15 Beach Club Resort GM Shawna Broekhuizen angling for more affluent Asian tourists – BIV’s Asia Pacific quarterly 19-22 Off to court 23-25 Lamenting the loss of a corporate sustainability visionary 28 Should spending cuts be a top government priority? 29

>B.C.’s biggest city leverages Western Canada’s largest airshow to market its attributes to business >Development aggressively promoted to increase job opportunities for rapidly growing population By Richard Chu

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he city of Abbotsford has turned its signature international airshow into a prime opportunity to invite the world to one of the province’s fastest-growing communities. “Our airshow is such an amazing signature event for the city, and people love airplanes,” said Jay Teichroeb, Abbotsford’s general manager of economic development. “So it’s a way to treat people with something that is uniquely Abbotsford and … show [them] things that are important to their business.” While 100,000 people watched the skies at the 49th annual Abbotsford International Airshow from August 11 to 14, the city hosted roughly 700 business leaders from industries ranging from aerospace and engineering to real estate and finance. Staff showcased city incentives and opportunities to boost investment in Abbotsford. In addition to two days devoted to meetings and seminars on developing the city’s aerospace sector, Abbotsford hosted an inaugural bus tour of the city showcasing the major developments taking place in the largest geographic city in B.C. The tour highlighted parts of the city where developers could benefit from city incentives and business tax exemptions, including: • a reduced property tax for industrial development that lasts five years following completion of a project; and • a tax exemption for projects aimed at revitalizing Abbotsford’s historic downtown core. see Growth, 7

Richard Lam

Jamie Garratt’s expanding marketing agency focuses exclusively on social media and the digital arena 31

Hard-wired in Richmond Tree Island Industries’ new CEO Dale MacLean: his Richmond company is battling a depressed U.S. housing sector and a strong Canadian dollar in its quest to expand into the wider global market for nails, chain link fencing and other wire products see Housing, 3

Daily business news at www.biv.com August 23–29, 2011

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Wine acreages continue to expand across B.C.

Golden Goals 7 Bob Mackin Money’s Worth 8 Kim Inglis High-Tech Office 11 Alan Zisman Sales Calls 13 Rob Malec BizPharmacy 13 Cyri Jones/Ivan Surjanovic Marketing Messages 14 Mary Charleson Real Estate Roundup 17 Peter Mitham Cultural Matters 22 Deepak Gill/Martin Donner Regional Planning 23 Evan Cooke At Large 28 Peter Ladner Head to Head 29 Jim Sinclair/ Niels Veldhuis

Conifex ships vast majority of lumber to China Bloggers probe Pattison’s motives for selling alcohol Canada a global leader in tech M&A: Ernst & Young China is the top export nation for B.C. lumber Squamish tech startup gets international audience

Canfor streamlining shipping to maintain Chinese market East Asia suspends Indonesian exploration Capstone moves on billiondollar Chilean mine plan B.C. exports rise in most sectors: BCStats Canadian venture capital dips amid fundraising concerns

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August 23–29, 2011 Business in Vancouver

Housing slump stunts Tree Island growth Maker of nails and steel wire returns to profitability, but new CEO faces uphill battle to expand market for Richmond company “They were so well led by Ted Leja that I’m sure he will be missed,” said Tricor Pacific Capital Inc. partner Rod Senft, who was once a large TIL shareholder and board member. “I have the utmost respect for him. In a very difficult time, he provided great leadership.”

“They were so well led by Ted Leja that I’m sure he will be missed”

Richard Lam

– Rod Senft, partner, Tricor Pacific Capital

Tree Island Industries CEO Dale MacLean: “the question I always ask myself is, ‘Is the market coming to us or are we going to the market?’” By Glen Korstrom

ersist sluggishness in the U.S. housing market recently pushed the stock price for Richmond nail-maker Tree Island Wire Income Fund (TSX:TIL) to multiyear lows despite a newly profitable balance sheet and a new CEO who has big plans for growth. Dale MacLean assumed the reins of the fund’s 354-employee Tree Island Industries (TIL) from industry legend Ted Leja on July 18 and spent much of his first month meeting employees in Richmond and at the company’s three plants in California as well as suppliers and large customers. “This company is poised for

growth,” said MacLean, who is chairman of the Prince Rupert Port Authority and left a post as executive vice-president at hardware supplier Taymor Industries to take the top job at Tree Island. “I’m confident that we’re trending for improved profitability since the downturn.” MacLean’s confidence stems from his belief that the U.S. economy will pick up and a sense that the company’s two-year-old strategy to streamline where necessary, focus on profitable businesses and offer competitive prices is starting to pay off. The company generated a $29,000 profit on $27.7 million in revenue in the three months that

ended June 30. That compares with a loss of $190,000 on $27.7 million in revenue in the same quarter a year ago. Things would have been even better had the Canadian dollar’s rise not weakened the 57.8% of sales that come from south of the border. The challenge, however, will be to convince investors that the company has a steady hand at the helm after Leja took a second retirement following his return to provide stability during the economic downturn for the company he led between 1994 and 2006. Leja w i l l rema in as v icechairman of the fund’s board of trustees.

Senft sold his stake in the company in 2006, not long before the fund’s units hit a high of more than $8 in the summer of 2007. He no longer follows the company’s share price closely and said, “I’m in shock,” when Business in Vancouver told him that the fund’s stock traded as low as $0.20 earlier this month. The stock had bounced up to $0.25 by press time, giving the company a market capitalization of about $5.7 million. Tree Island restructured about $35.8 million of long-term debt in March, and its August 11 earnings report noted that on June 30, the company had $94.9 million in assets and the same amount in liabilities. MacLean stressed that the company has cash on hand and that there’s no chance that it will go out of business. One of MacLean’s first tasks was to add two new salespeople to his 223-employee team at the company’s 400,000-square-foot nail and wire manufacturing facility in Richmond. “The question I always ask myself is, ‘Is the market coming to us or are we going to the market?’” he

said. “If you don’t have people in the trenches who understand the business, you’re not going to go to the market. The market today doesn’t have the people to come to you.” TIL’s sales have been hurt by U.S. housing starts, which fell 1.5% in July. According to Bloomberg calculations, that puts U.S. housing starts on pace to hit 566,000 in 2011 – the second lowest total on record after 554,000 in 2009. However, only 29.2% of TIL’s business is in the home construction sector. That’s more than the 20.5% of sales to the commercial construction sector, but less than the catchall category that MacLean calls “industrial and original equipment manufacturing.” Just over 37% of TIL’s sales are to companies that make everything from wire shelving units for retailers to bed springs, chain link fencing and paint can handles. The rest of the revenue comes from selling to companies that make hangers and other items. TIL’s sales mix could change drastically if MacLean decides to push further into the Asian market. Several years ago TIL acquired a stake in a partnership with a Chinese wire manufacturer. The deal enables TIL to sell wire products in the world’s most populous nation. Chinese transactions amount to about 14% of TIL’s total sales, but that could rise depending on what growth strategy MacLean drafts once he settles into the job. “As for how much international growth and, specifically, where? I’m in the throes of investigating that now,” he said. “We bring product here from China as well. You always have to look at what are the right options and what is the next economy that’s emerging.” • gkorstrom@biv.com

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Smoke and mirrors By Nelson Bennett

n 2007, Interfor started construction on a new $100 million sawmill at Adams Lake and in 2010, the Surrey school board – one of the poorest in the region – was forced to cut a $500,000 cheque to help pay for it. It will probably have to cut another one this year. The money goes to the Pacific Carbon Trust (PCT), which takes money from school districts and other public-sector organizations – $18 million so far – and gives it to B.C.’s largest emitters of greenhouse gases (GHGs) to help them fund carbon-reduction initiatives. Public-sector entities that can reduce their energy consumption don’t have to pay the PCT penalty. But, because of its rapid growth, the Surrey school district is finding it impossible to meet the B.C. government’s carbon-neutral mandate. With around 300 students per month being added to its school district, Surrey is one of the few B.C. school districts with a growing enrolment. And because the B.C. government isn’t building any new schools in Surrey, more and more of the city’s students are being forced into portable classrooms, which take up a large footprint (the PCT’s formula is based on square footage). Surrey now has 230 portables. “We want to reduce our carbon footprint, but it’s very difficult to do when you’re adding portables every week, and portables are not the most efficient thing to heat and light,” said Surrey school board chairwoman Laurae McNally. “We’re not a rich school district. To take just under half-a-million dollars out of your operating budget – it hurts. That could feed a lot of hungry kids in our district.” But the Surrey school district isn’t the only one feeling the pinch. Last year, B.C. school districts were essentially fined $4.4 million for failing to hit carbon-neutral targets. Health districts paid even more to the PCT: $5.4 million. And they’ll be paying again this year, unless they can reduce their energy consumption. The BC School Trustees Association is calling on the province to reinvest the money school districts pay to the PCT back into energy-efficiency upgrades that might help the districts meet their

targets, rather than dole it out to large companies such as TimberWest, Canfor (TSX:CFX), Encana (TSX:ECA) and Interfor (TSX:IFP.A). The PCT was part of former premier Gordon Campbell ’s climate action plan. To create a carbon offsets bank, the B.C. government required that all public-sector organizations become carbon neutral. Those that can’t hit their carbon-reduction targets must pay a penalty. So far, the PCT has collected $18 million from the public sector. The private sector, by contrast, has been buying less than $250,000 a year in offsets, on a voluntary basis. “Because we made the commitment to be carbon neutral, the biggest customer to buy offsets, of course, was the provincial government,” said Environment Minister Terry Lake. Independent Cariboo-North MLA Bob Simpson estimates Encana will receive $2.1 million for a natural gas extraction project in the Jean Marie Basin in northeastern B.C. that will reduce the need for flaring . But neither the PCT nor Encana would confirm how much the company is getting. That underscores another problem with the way the PCT operates: public accountability. Although public money is being used to fund private-sector carbon-reduction initiatives, information about how much the qualifying projects receive is being withheld from the public. “We feel that in order to

Richard Lam

A growing chorus of critics charges that it’s unethical to force school boards and health authorities to fund private-sector carbon-reduction initiatives when that transfer of tax dollars has provided no measurable drop in greenhouse gas emissions

Surrey school board chairwoman Laurae McNally: because of the 230 energy inefficient portable classrooms it must use to house rising enrolment, the Surrey school district is being penalized for not reducing its carbon footprint

create this market … it’s necessary to keep those prices confidential,” said PCT managing director of business development David Moffat. According to the B.C. government, its climate action efforts are working. This year, the B.C. government claimed that, thanks to PCTfunded initiatives, it

“I don’t buy [that] any of these projects needed carbon trust money to happen. They happened anyway” – Bob Simpson, MLA, Cariboo-North

had achieved carbon neutrality by reducing GHGs by 730,000 tonnes in 2010. But Mark Jaccard, professor of sustainable energy at Simon Fraser University, describes that claim as “bogus.” He said the problem with the PCT – apart from the ethics of taking money from schools and handing it to the province’s largest polluters – is that any reduction of GHG emissions is impossible to verify. Jaccard added that companies now receiving carbon credits might have undertaken their carbon-reduction initiatives anyway, because it often makes economic sense. Interfor’s Adams Lake project and Encana’s Jean Marie Basin natural gas extraction project are two examples. In both cases, the projects were underway before the PCT came into being in March 2008, which Simpson believes is a breach

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full disclosure of the PCT’s own “additionality” requirements. The additionality provision was included as a kind of guarantee that carbon credits would provide an incentive for projects that would not have occurred otherwise. So the fact that both Interfor’s and Encana’s qualifying projects were already underway before the PCT was created makes Simpson wonder if the credits were handed out as “a quid pro quo for the carbon tax.” “I don’t buy [that] any of these projects needed carbon trust money to happen,” Simpson said. “They happened anyway.” In Interfor’s case, the qualifying project – a $22 million fuel conversion that was part of the $100 million Adams Lake project – was approved in March 2006, two years before the PCT was launched. Ric Slaco, vice-president and chief forester for Interfor, said the company included the fuelconversion project knowing that it would likely qualify for carbon offsets under some future program. “Regardless of whether it was the Pacific Carbon Trust or a

Encana’s Jean Marie Basin underbalanced drilling project received Pacific Carbon Trust credits, even though the project was underway before the PCT was formed

voluntary market, we believed, by doing the fuel switching, we would be eligible for a credit,” Slaco said. “The idea of carbon credits had been around long before 2007.” He added t hat projec ts

approved by the PCT are subject to independent verification. Jaccard believes t here are better ways to achieve measureable carbon emissions reductions and says the PCT should be scrapped.

So does BC Conser vative Party Leader John Cummins, although he parts company with Jaccard by arguing that the carbon tax should also be eliminated. “You’re laying off teachers and nursing staff in hospitals and you’re forking the money out to somehow reduce carbon, and we’re not doing it,” Cummins said. “According to the government’s own records, it hasn’t accomplished what they set out to do, which is to reduce carbon output in the province.” While some of the projects that have received PCT credits have reduced GHG emissions, others haven’t. Encana’s Jean Marie Basin project reduced emissions because it eliminated the need to flare gas that contained nitrogen. The company now uses a process that doesn’t require nitrogen in the extraction process. But in other cases, the PCT is using some exotic calculations to arrive at carbon-reduction numbers. Lafarge Canada Inc., for example, received credits for a fuel switch that resulted in a 20% reduction in the amount of coal burned in its cement plant in

Richmond. The company received credits for a 189,000-tonne “retirement” of carbon. But the company concedes that the plant’s carbon emissions have not decreased. The “retirement” credits were based on the use of construction and demolition wood waste instead of coal for about 20% of the fuel burned at the plant. Because Lafarge is burning something that would otherwise have been landfilled, the PCT calculates the fuel switch as though it were reducing the amount GHG going into the atmosphere. It’s just one of a number of fuelswitching projects that has received PCT credits. “We find that offsets – which is driven by the goal of carbon neutrality – are not guaranteed to be causing net reductions in GHG emissions and, indeed, research suggests that in some cases they may have a very low effect,” Jaccard said. “We therefore recommend that governments not adopt carbon neutrality and offsetting as climate policy and instead stick with regulations and emissions pricing.” • nbennett@biv.com

Soggy spring threatens to speed conversion of private campgrounds into more lucrative development uses Drop in the number of private operators and higher campsite fees driving revenue rise for BC Parks By Glen Korstrom

ool spring weather has hurt campsite attendance and revenue, prompting some to speculate that the drop in the number of private campgrounds will accelerate. BC Parks released statistics August 12 that showed revenue from provincial campground fees rose 6.5% to $15.2 million in the year that ended March 31. The increase is largely due to government campground prices being raised by as much as $6 per night to cover higher operating costs and improved services. A ministry spokesman told Business in Vancouver that BC Parks has no plans to raise prices again to cover this year’s revenue hit caused by damp weather. Another factor helping increase campground revenue at BC Parks is that t he number of private campgrounds continues to drop as owners sell to

Doug Turner: opened a campsite near Peachland last year. He now plans to sell his quarter-acre cabin and RV sites individually

developers. In the last few years in the Okanagan: • Happy Valley Campground owners sold their property to developers who have since built the Barona Beach Lakefront Resort down the hill from the Mission Hill Family Estate Winery; • Pa r a d i s e C a mpsite has been converted into

Princess Mobile Home Park; and • the Cove Campground has been developed into the Cove Lakeside Resort Hotel. “Taxes are high on private campsites,” said Karen Thompson, who is executive director at the Westbank & District Chamber of Commerce. “No wonder they’re selling out to developers. These campsites are prime building places. So, unfortunately, they’re getting sold.” Doug Turner recognized opportunity in the scarcity of private campsites and opened a private campground last year. He said the cool weather might prompt some private campground owners to close at the end of the year. He is also already shifting his business model away from simply renting cabins and RV spots. Turner bought 30 acres of unserviced land in Peachland in 2004 and spent $1

million to supply 10 of those acres with water, sewage, electricity and cable TV service. Last year he split those 10 acres into 40 quarter-acre sites, 20 of which have prefabricated cabins; the other 20 are for RVs. Rentals launched last July, and Turner generated tens of thousands of dollars. He said that’s tripled so far this year, despite soggy weather. Still, Turner has shifted his business plan and intends to sell the quarter-acre units individually as soon as he gets provincial approval for such strata sales. “I want to sell a sufficient number of sites to warrant proceeding on paying to service the rest of the 30 acres [with water, sewer and other services],” he said. And while Turner’s posh cabins come with maid service and rent for $99 per night, campers need not shell out that much money

to have a great time in the B.C. wilderness. Thompson said B.C.’s Ministry of Forests, Lands a nd Natura l Resource Operations runs plenty of free campsites, some of which are so basic they don’t even have outhouses.

“Campsites are prime building places. So, unfortunately, they’re getting sold” – Karen Thompson, executive director, Westbank & District Chamber of Commerce

It’s camping at its most r ugged a nd per fect for those scrimping on vacation spending in the wake of recent stock ma rket turmoil. “You can’t book any of those campsites,” Thompson said. “You just land up there.”

One of her favourite free campgrounds is south of CedarCreek Estate Winery, a short hike from a place near the end of that dead-end road. Most campers, however, want at least some of the amenities of home, said Nk’Mip Campground and RV Park general manager Chris Bower. Bower has watched the number of campsites in the Osoyoos area drop from about 1,200 sites in 1997 to approximately 734 today. During that time, however, the Osoyoos Indian Band’s campground, down the hill from its Nk’Mip Cellars winery and Nk’Mip Desert Cultural Centre, has quadrupled to 400 today from 100 campsites in 1997. The band added 74 spots t h is yea r a nd i nvested $70,000 to equip all 400 campsites, which rent for about $48 per night, with wireless Internet access. • gkorstrom@biv.com

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Daily business news at www.biv.com August 23–29, 2011

Resource rumble in the jungle East Asia Minerals pulls back from flagship gold project amid executive-level turmoil By Joel McKay

team of Vancouver executives is scrambling to return value to its shareholders after a series of bungles in the Indonesian jungle. Last week, East Asia Minerals (TSX-V:EAS) quietly suspended exploration at its flagship Miwah gold project, citing a need for the project to be reclassified in order to permit open-pit mining in a forested area of the island nation. The company’s stock tumbled nearly 17% to $1.35 per share after the news was announced. John Ing, a gold analyst at Maison Placements Canada, said the decision to step back from Miwah is the latest evidence of an executive team that has mismanaged a strong exploration play. “I think that they’ve mishandled Miwah, but by jumping ship from the main asset they themselves have condemned it, contaminated it,” Ing told Business in Vancouver. East Asia didn’t respond to requests for an interview, but its downward trend is a peculiar about-face for a company that just eight months ago enjoyed a share value of $8.55. For a time, the company was one of the darlings of the Canadian junior mining scene. It was named to the TSX Venture 50 in 2010 after its share price skyrocketed 2,478% between December 31, 2008, and December 31, 2009. The company’s precious metal prospects even caught the attention of billionaire Canadian investor Eric Sprott, who told Seeking Alpha in 2010 that East Asia was his “highest conviction” stock. But the buzz around the company had more to do with strong drill results at Miwah than how much gold was in the ground. When East Asia published its first resource estimate for the project on May 9 its stock dropped 17%. The problem, said Ing, was that the early drill results the company published caused many investors to

East Asia Minerals Corp. (TSX-V:EAS) $10 $8 $6 $4 $2 $0

Vancouver CEO: Darryl Clark Employees: N/A Market cap: $92m P/E ratio: N/A EPS: ($0.22) Sources: Stockwatch, TSX

hope Miwah contained between five and 10 million ounces of gold, but the resource estimate showed only slightly more than three. However, the downward spiral for shareholders started months earlier when, in February, founding director John Gingerich and colleague Robert Parsons resigned from the board. Weeks later, the company announced a plan to spin out three of

“These fellows have become the gang that can’t shoot straight” –John Ing, gold analyst, Maison Placements Canada

its projects into separate companies to generate new value for investors. “With the continuing development of the large Miwah gold deposit, the significant value of our other assets has not been recognized,” then-president and CEO Michael Hawkins said at the time. “These transactions will allow our other assets … to create their own market.” Then, in early May, just prior to the Miwah resource estimate release,

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BUSINESS TODAY Capstone planning to build $1 billion copper mine in Chile One of Vancouver’s fastest-growing companies has unveiled a $1 billion plan to build a copper mine in Chile just four months after announcing a deal to acquire the property. Capstone Mining (TSX:CS) issued pre-feasibility study (PFS) results for the Santo Domingo iron oxide-copper-gold project, which it acquired from Far West Mining in a $725 million deal announced in April. The project will cost approximately US$1.24 billion to build, and would produce 144 million pounds of copper, 4.1 million tonnes of iron and 15,000 ounces of gold per year. Tuesday, August 16

B.C. exports rise in most sectors: BCStats Gold field: early drill results East Asia Minerals published caused many investors to hope Miwah contained between five and 10 million ounces of gold, but the resource estimate showed only slightly more than three

founding director Darren Pylot jumped ship to “focus on other business objectives.” In July, as East Asia’s shares continued to bleed value, the company announced a near-complete overhaul of its executive team. Two days later, East Asia announced a complete review of its assets “with the aim of providing an update to investors within the next few weeks that will detail the strategy for the company going forward.” Three weeks later, exploration at Miwah was shut down. In addition to management instability, Ing said the company made a number of mistakes along Miwah’s development path. One of them, he said, revolved around permitting issues in the Indonesian jungle, where a law had been enacted in 1999 to prohibit open-pit mining in protected areas. According to its website, East Asia claimed there are “precedents” for allowing open-pit mining in “socalled protected forests.” Ing said the forestry issue could also be a “red herring,” diverting attention away from the more serious issue of problems at the executive level. “These fellows have

become the gang that can’t shoot straight,” said Ing. A recent company report reveals East Asia’s costs increased significantly in the first nine months of fiscal 2011 compared with the same period in 2010. The company’s consulting fees more than doubled to $1.08 million, mostly due to the spinout transactions. Management fees increased 115% to $1.3 million, office and administration expenses were up 141% to $1.3 million and professional fees soared a whopping 805% to $1.2 million. Still, management continued to sink money into the ground, spending $6.9 million at Miwah in the first nine months of 2011 compared with $3.1 million during the same period in 2010. The company also managed to raise $10 million to continue funding operations. Despite the downturn, Ing believes there’s still hope for the company if it can invent a new strategy in Indonesia. “They’re going to need a new direction, and I hope that they do because … there’s a lot of potential, but, as I’ve said, they’ve contaminated the deposit themselves.” At press time, East Asia’s shares were valued at $1.27. • jmckay@biv.com

According to a BCStats report, there was a 13.7% jump in the value of B.C. exports in 2011’s first half compared with the same period in 2010. Metallic mineral exports climbed 13.5% year-to-date. Exports of wood products (12.5%) and pulp and paper (12.9%) also showed strong growth. Tuesday, August 16

Victoria streaming company expanding to Middle East Victoria-based media streaming company NetroMedia is planning an expansion into the Middle East The company plans to open an office in Riyadh, Saudi Arabia, in about a month from now. “We had planned this for a year, and obviously the Arab spring is a concern for us in terms of safety, so we’ve delayed it a bit,” said NetroMedia CEO Che Pinkerton. “But we believe the time is right for that region.” Wednesday, August 17

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News

August 23–29, 2011 Business in Vancouver

Golden Goals

Bob Mackin Telus the front-runner in the new-name-for-BC-Place sweepstakes; refurbished stadium might not be a fit for Major League Baseball

ore signs point to a sign bearing a Telus brand being plastered onto BC Place Stadium. Telus is, for all intents and purposes, the official telecommunications provider to the province. A $1 billion, 10-year contract to service the government, Crown corporations BC Hydro, ICBC, BC Lottery Corp. and WorkSafeBC and six health authorities was announced June 29. Telus is a Canadian Football League, BC Lions and Grey Cup Festival sponsor. The Vancouver Whitecaps refer to their new home sometimes as Bell Pitch Downtown at BC Place Stadium or just Bell Pitch Downtown. The building happens to be next to Rogers Arena, which almost became Telus Place after General Motors decided to drive away early from its deal last year. At the stadium’s July 31 open house, BC Pavilion Corp. (PavCo) chairman

David Podmore said an announcement on the naming rights sponsor is coming in mid-September. “I can’t comment on any Telus deal,” Podmore said. Podmore’s Concert Properties board includes two senior Telus executives (one of which is treasurer Robert Gardner) and two high-ranking members of the Telecommunications Workers Union (including president George Doubt). Telus is planning to build the $750 million Telus Garden office and condo complex, so two Telus-named buildings might be overkill. Why not Optik Place? The Internet TV product is now the focus of the company’s marketing, and it has Shaw Communications nervous. Instead of saying “no” to this columnist’s query in April, Telus spokesman Shawn Hall said: “BC Place is a vibrant cornerstone of our community – a host of two great sports teams, the Terry

Fox memorial, and numerous community events, concerts and trade shows. I’m sure many organizations would be interested in being associated with such an outstanding facility.” Will the announcement and, perhaps, the reopening of the stadium be delayed by labour trouble? Negotiators for the BC Government and Service Employees’ Union local 1703 met August 10 and 11 with mediator Mark Brown. They’re set to reconvene September 7 and 8. The union’s four-year deal expired May 31. PavCo can’t afford a picket line during the final, frenzied three weeks of the $563 million, taxpayer-funded renovations. Keeping score PavCo told us one of the ways for the stadium renovation to pay for itself was through increased event bookings. After the retractable roof, the next most-noticeable

Growth: City hustling for more opportunities

Jay Teichroeb, Abbotsford’s general manager of economic development: city focused on providing enough jobs to avoid long commutes to work from Abbotsford, 1

S a id Di a ne De lve s , president and CEO of Quantum Properties Inc.: “There’s been a shift in focus in City Hall, and the culture there is definitely business friendly. I deal with many municipalities and I can tell you, it’s not a pleasure everywhere.” Among a key area of development is 200 acres of land near the airport that has been taken out of the agricultural land reserve to be used exclusively for industrial development. Rather than waiting for developers to pay for the roads and other utilities, the city is building that infrastructure to encourage development. As one of B.C.’s

fastest-growing regions, the city’s hunger for economic growth and its need to provide jobs for its residents are huge. A Conference Board of Canada report released last week noted that Abbotsford’s unemployment rate has edged above the provincial average in the past year as the economy has slowed. Persistently slow economic growth will force people to find work elsewhere, something the city wants to avoid. “About 65% of Abbotsford residents live and work in the community, which is a very high percentage by Lower Mainland standards,” said Teichroeb. “But we have to be vigilant it remains that way.” The city has maintained a plan to be as self-sufficient as possible given its distance from downtown Vancouver. In addition to the recent completion of a new entertainment and sports centre, its new hospital and cancer centre, the city announced in July plans for an 80,000-square-foot expansion of the Tradex Trade and Exhibition Centre. Vali Marling, Tradex’s director of operations, noted the facility has had to turn away business over the years because it has become fully

booked during the key trade and consumer show season. “In 2009, I turned away 100 events. The expansion would potentially allow us to [double the number of events and] book four events at once.” The $40 million trade cen-

“There’s been a shift in focus in City Hall and the culture there is definitely business friendly” – Diane Delves, president and CEO Quantum Properties

tre expansion is slated for completion by September 2014 and is estimated to increase Tradex’s economic impact by 50% to nearly $128 million. “Tradex was built to fill hotel rooms, increase restaurant meal purchases and flights coming into Abbotsford [airport],” Marling said. “All of that will increase significantly with the expansion, and our employment numbers will also go up.” • rchu@biv.com

feature will be the giant centre-hung, shoebox-style scoreboard. It’s so big that it may mean the Toronto Blue Jays or Seattle Mariners won’t pay a return visit for an exhibition game. “We have asked (Major League Baseball) for a ruling on the scoreboard and required height but as yet

“It can always be fixed if you threw enough money at it, but at the end of the day would it be economically feasible to try to pull it off?” – Andy Dunn, president, Vancouver Canadians

we have not received a position,” PavCo president Warren Buckley said. “I do have some concerns

about compatibility; however once we see it open and operating we’ll have a better feel,” said Vancouver Canadians president Andy Dunn. “Right now my concern would be height of the scoreboard. They’re putting in a seamless turf [for soccer and football]. If you’re putting in a seamless turf, how do you lay warning tracks, how do you lay infield? It can always be fixed if you threw enough money at it, but at the end of the day would it be economically feasible to try to pull it off?” BC Place hosted the first indoor baseball game in Canada on August 12, 1983. Village people Interesting how tycoons from the Middle East are attracted to athletes’ villages. Vancouver’s Olympic Village was developed by Iranian-born brothers Shahram Malekyazdi and Peter Malek. It went into receivership last November over

their company’s $740 million debt to City Hall. Emaar Properties of Dubai, under chairman Mohammed Ali Rashid Ali Abbar, partnered with MGF Development of India to build the Commonwealth Games Village in Delhi. It was among the many reasons why the Games cost $4.1 billion – 16 times more than planned. Just as Britons were cleaning up from this month’s riots came news that Qatari Diar and Delancey Properties would pay the equivalent of $903 million for the London Olympic Village. It cost British taxpayers almost $1.2 billion to build. Qatari ruler Sheikh Hamad bin Khalifa al-Thani toured the Olympic Village last October during a state visit. When it rushed to make the pre-Games bargain deal, London’s Olympic Delivery Authority must have had Vancouver’s post-Games village vexation on its mind. • 2010goldrush@gmail.com

Finance

Daily business news at www.biv.com August 23–29, 2011

BY THE NUMBERS

Losses are shown in brackets. Graph information by Stockwatch.

Finning International Inc. (TSX:FTT)

▲39% $82m Revenue: $1.5b 6 months 2011

Net income 6 months 2011

Cat calls: The Caterpillar equipment dealer posted record earnings per share in the second quarter on net income that increased 129% compared with the same period in 2010. However, Finning’s gross profit margin declined to 29.7% from 31% as its revenue shifted toward new-equipment Earnings per share sales. Meantime, expenses decreased to 21.3% of revenue. 6 months 2011 The company finished the quarter with $96.6m in cash.

$35

$0.48

$30 $25 $20 $15

Sterling Shoes Inc. (TSX:SSI) Low tops: Sterling said a weak retail environment, amplified by high fuel costs and adverse weather conditions, dampened sales in the second quarter. The company closed three underperforming stores during the quarter. On top of that, Sterling’s gross margin improved to 54.8%, and Earnings per share it reduced store and selling expenses by $500k. Sterling 6 months 2011 finished the period with negative cash flow of $8.9m.

▼15% ($811k) ($0.12) Revenue: $24.3m 6 months 2011

Net income 6 months 2011

$2.50 $2.00 $1.50 $1.00 $0.50

Taseko Mines Ltd. (TSX:TKO)

▼14% $7.3m Revenue: $48.3m 6 months 2011

Net income 6 months 2011

$0.04

$8 $6 $4 $2

Money’s Worth

daily online edition

Kim Inglis

BUSINESS TODAY Canada a global leader in tech M&A: Ernst & Young

Venture capital investment takes a dip

Canada ended the second quarter as one of the top 10 countries for tech sector mergers and acquisitions, according to Ernst & Young’s (E&Y) global technology M&A update. The update recorded 30 deals in the second quarter of this year compared with 21 for the same period in 2010.

Canadian venture capital investment dropped in 2011’s second quarter, as fundraising activity stalled amid ongoing market volatility. According to Canada’s Venture Capital & Private Equity Association, investments in early-stage business across Canada was down 2% in the second quarter to $335 million compared with the same period in 2010.

Thursday, August 18

Copper comfort: Higher maintenance and consumable costs, a strengthened Canadian dollar and reduced metal production resulted in higher cash costs per pound of copper in the second quarter for Taseko. Still, the company mined and milled more tonnes of copper and molybdenum in Earnings per share the second quarter than in the same period the year before. 6 months 2011 Taseko finished the period with $259m in cash.

Canaccord forced to show its hand

Tuesday, August 16

Vancouver-based Canaccord Financial Inc. has issued a statement following speculation it plans to acquire a U.K. investment firm. Canaccord said it doesn’t usually comment on market rumours, but confirmed it is “considering making an approach to the Evolution Group PLC.” Cannacord announced two weeks ago it had acquired a 50% equity interest in Australia’s BGF Equities.

Local tech accelerator announces fall cohorts

Wednesday, August 17

Tuesday, August 16

Vancouver startup incubator GrowLab has announced the five companies that will take part in its four-month, mentor-driven accelerator program. Two are Vancouver based: Matygo (a cloud-based learning management system) and Placeling (a web-based platform that allows people to share the places they love to explore).

Full stories and other local business news at www.biv.com/businesstoday Daily business news direct to your inbox! Sign up at www.biv.com/newsletters

Chartered Accountants and Business Advisors

Making the most of the market’s mutual fund opportunities

any investors have mutual funds in their portfolios because they want a simplified approach to investing. However, simple does not mean hands-off. Mutual funds are not all built alike, so thinking must be applied in selection, and monitoring is essential. As with any approach to investing, a critical consideration is the impact of fees. A combination of high fees and an underperforming fund means the investor loses. Roughly 80% of mutual funds either underperform their broad indices or merely track them. Therefore it is important to choose funds that provide measurable value. The first fee to examine is the management expense ratio (MER). All mutual funds have an MER built into the unit price, and they’re charged regardless of fund performance. The longrange difference to a portfolio’s bottom line of even a 1% MER increase compounded is significant. Mutual fund selection

also affects the impact of other fees. Generally there are four ways of buying a mutual fund: back-end, frontend, low-load or no-load. Back-end is also referred to as deferred sales charge (DSC), where no additional fees are charged if the fund is held for a pre-determined length of time – typically six or seven years. If the fund is sold before the redemption date, investors may be assessed up to 6%, depending on where they are in the schedule, regardless of performance. Low-load sales fees are similar to DSCs, except the maturity date is shortened and redemption fees are fewer. Front-end purchases entail an initial commission, but investors can sell the fund at any time without penalty. With no-load funds, investors are not locked in, and the only fees are ongoing MERs. No-load funds are generally for do-it-yourself investors and are often available only directly through the mutual fund companies. The choice in fund fee

• Professionalism • Quality • Integrity

setup depends entirely on the investor’s objectives. Those wishing to buy and hold a fund may opt for DSC or low-load. Those looking for buying and selling flexibility may consider front-end or no-load. The latter are generally more popular in the current investing landscape

Roughly 80% of mutual funds either underperform their broad indices or merely track them because they call for increased portfolio flexibility. Diversification of mutual fund holdings requires monitoring. Investors often wind up with far too many mutual funds when only five or six are needed to achieve adequate diversification. When that number is surpassed, holdings start to overlap and the portfolio becomes too correlated. Consider that the average mutual fund has more than 100 holdings. If an

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investor has several types of Canadian-focused funds, chances are good that all the funds have some of our big six banks and largest Canadian energy companies in their top holdings. The duplication makes it difficult to outperform the markets. The mutual fund’s mandate is another important consideration. Some funds are required to be fully invested at all times. However, if the markets turn negative, portfolio managers faced with such restrictions have no flexibility to raise cash and preserve investors’ capital. Mutual funds are generally best suited to portfolios under $100,000, because they provide a level of diversification that would otherwise be difficult to achieve with individual securities. Once over that threshold, investors should begin expanding their horizons and examine other investment vehicles such as stocks, bonds, exchange-traded funds and alternative investments. • Kim Inglis (www.reynoldsinglis.ca) is an investment adviser with Canaccord Wealth Management, a division of Canaccord Genuity Corp. The views in this column are solely those of the author.

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finance

August 23–29, 2011 Business in Vancouver

Construction action up

Insider Trading

Housing starts climb 4.7% thus far in 2011

▲29.1% ▲9.7% ▼66.4% ▼29.8% Housing Housing Housing starts starts starts to June to June to June (Vancouver) (Abbotsford) (Chilliwack)

Housing starts to June (Victoria)

Some of B.C.’s urban centres, including Vancouver (29.1%, unadjusted), and Abbotsford (9.7%), saw housing starts climb during the first seven months of the year, such that starts in all urban areas were up 4.7% from the same period of 2010. Vancouver alone accounts for nearly 60% of total starts in urban B.C. The overall increase was significantly moderated by slowdowns in other urban centres, including Chilliwack (-66.4%), Victoria (-29.8%) and Kelowna (-26.8%).

B.C. exports continue to climb in June Exports of B.C. products climbed 0.8% (seasonally adjusted) in June, on the heels of a double-digit increase recorded in May (11.7%). Shipments of energy (-1.3%) and agriculture and fish (-3.6%) products were down, partially offsetting increases in the other major commodity groups.

-BC Stats Infoline, Issue 11-32, August 12

B.C. gas sales accelerated fastest in country in 2010 Gross sales of gasoline accelerated 5.8% in B.C. last year, the largest increase in the country. Nationally, gasoline sales climbed 2.1% to 41.9 billion litres in 2010, marking the most substantial increase in fuel consumption since 2007 (2.3%).

-BC Stats Infoline, Issue 11-32, August 12

British Columbians drink less beer but more imports Despite a general decline in beer sales during the 12-month period ending in June (-7.2% from 2009-10), imported beers continue to gain popularity in the B.C. beer market. In 2010-11, the BC Liquor Distribution Branch sold nearly 52 million litres of imported beer.

-BC Stats Infoline, Issue 11-32, August 12

Harry Dent

Larry Berman

John Stephenson

Gavin Graham

David LePoidevin

Benj Gallander

The following is a list of trades made by corporate executives, directors and other company insiders of B.C.’s public companies filed by the week ending August 4. The information comes from a compilation of required reports filed with the BC Securities Commission within five calendar days of a change in an insider’s holdings.

Insider: Bradford Cooke, chairman and CEO Company: Endeavour Silver Corp. (TSX:EDR) Shares owned: 1,277,837 Trade date: August 5, 9 Trade total: $680,200 Trade: Purchase of 80,000 shares at prices ranging from $8.39 to $8.59 per share.

Insider: David Mindell, director Company: A&W Revenue Royalties Income Fund (TSX:AW. UN) Shares owned: 13,000 Trade date: August 8, 9 Trade total: $169,840 Trade: Acquisition of 9,000 units over two days at prices for $18.84 and $18.88 per share.

Insider: Ian Telfer, chairman Company: Goldcorp Inc. (TSX:G) Shares owned: 76,250 Trade date: August 10 Trade total: $7,675,000 Trade: Sale of 250,000 shares for $49.93 per share following the acquisition of 250,000 shares for $19.23 per share through the exercise of options.

Insider: Stanley Olson Company: Goldcorp Inc. (TSX:G) Shares owned: 2,296 Trade date: August 11 Trade total: $583,500 (net) Trade: Sale of 30,000 shares for $50 per share following the acquisition of 30,000 shares at $30.55 per share through the exercise of options.

Insider: Allan Skidmore, director Company: Glentel Inc. (TSX:GLN) Shares owned: 1,097,222 Trade date: August 9 Trade total: $150,000 Trade: Acquisition of 50,000 shares at $3.05 per share through the exercise of options.

Insider: Jim Pattison, director Company: Canfor Corp. (TSX:CFP) Shares owned: 25,676,150 Trade date: August 3, 4, 5 Trade total: $5,392,299 Trade: Purchase of 536,300 shares at prices ranging from $9.92 to $10.12 per share through Great Pacific Capital Corp.

Insider: Douglas Horswill, senior vice-president, sustainability and external affairs Company: Teck Resources Ltd. (TSX:TCK.B) Shares owned: 6,000 Trade date: August 4, 9 Trade total: $252,000 Trade: Purchase of 6,000 shares at prices ranging from $39.32 to $43.34 per share.

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director Company: Intrinsyc Software International Inc. (TSX:ICS) Shares owned: 379,375 Trade date: August 8 Trade total: $90,000 Trade: Purchase of 100,000 shares for $0.90 per share. Insider: Hugh Clarke, vicepresident, corporate communications Company: Endeavour Silver Corp. (TSX:EDR) Shares owned: 0 Trade date: August 8 Trade total: $89,850 (net) Trade: Sale of 15,000 shares at $9.04 per share following the acquisition of 15,000 shares at $3.05 per share through the exercise of options.

Insider: Jeffrey Wilhoit, vicepresident, investor relations Company: Goldcorp Inc. (TSX:G) Shares owned: 1,655 Trade date: August 8 Trade total: $121,175 Trade: Sale of 2,500 shares at prices ranging from $48.47 to $48.48 per share.

Insider: David Deisley, executive vice-president, corporate affairs and general counsel Company: Goldcorp Inc. (TSX:G) Shares owned: 26,666 Trade date: August 10 Trade total: $84,200 Trade: Acquisition of 1,666 shares at $50.54 per share through the exercise of rights.

Insider: George Duguay,

rchu@biv.com

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10 finance

Daily business news at www.biv.com August 23–29, 2011

Paper boss sees profit go up in flames Despite initiatives to get Catalyst’s business plan back on track, mill fires and a strong Canadian dollar ate into its bottom line By Joel McKay

catalyst paper corp.

(TSX:CTL) $0.50 $0.40 $0.30 $0.20 $0.10 $0.00

Catalyst Paper president and CEO Kevin Clarke: “the headwinds we have, we have to find a way to overcome”

$2 million. On top of that, a stronger loonie further cut into profits in the first and second quarter. All told, Catalyst posted a net loss of $70.5 million in 2011’s first six months. “I’m very disappointed,” said Clarke. “Take away the things we can’t control, which are currency [and] price of recycled materials, and look at the operational efficiencies that we left on the table, that I think in the first quarter amounted to $8 million or $9 million, and in the second quarter was … $20plus million.

“So if I told you I was happy to leave $30 million on the table, you should shoot me.” The company’s stock has since retreated to $0.11 per share from a 52-week high of $0.55 on January 26. Mike Richmond, a forest products analyst at Salman Partners in Vancouver, believes the company is facing “huge headwinds.” “It’s a tough business,” said Richmond. “And the problem is they’ve got these big assets that are not running full, so they’ve got high fixed costs, their end markets aren’t great and they’re getting squeezed on the inputs.

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Harmac Pacific president Levi Sampson: “we have prices well over $900 [per tonne] in the first quarter so pulp companies were doing very well”

“I don’t know how you turn it around.” Clarke, meantime, knows better than most the challenges his business faces, which is why he’s spent a lot of time in the last year getting the company’s paper machines up to snuff and increasing market share with key customers. “Our inconsistency in delivery is one of the frustrating things that I am personally working on,” said Clarke. “That’s why all the mill managers are reporting to me directly.” The company has also struck a favourable labour agreement with workers at its Snowflake mill, improved its safety performance and approved a plan to increase pulp capacity by up to 35,000 tonnes. Catalyst is also reviewing alternatives for its US$250 million of 7.375% senior unsecured notes to get its

capital structure back in line. “I think we’ve made great progress, and the headwinds we have, we have to find a way to overcome,” said Clarke.

“The problem is they’ve got these big assets that are not running full, so they’ve got high fixed costs, their end markets aren’t great and they’re getting squeezed on the inputs” – Mike Richmond, forest products analyst, Salman Partners

But Catalyst isn’t the only pulp and paper company facing challenges.

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Richmond CEO: Kevin Clarke Employees: 1,803 Market cap: $38.2m P/E ratio: N/A EPS: ($0.12)

Dominic Schaefer

evin Clarke spent the last year wrenching his Richmond-based paper company from one of the worst downturns in corporate history. The chief executive of Catalyst Paper (TSX:CTL) has done exactly what he said he’d do when took the job last summer: jump-start productivity, eliminate the rumour mill among employees and improve market share. But luck hasn’t been on his side. “Unfortunately, in the second quarter, we had two sizable fires that knocked us out of business for the equivalent of about 31,000 tonnes [of production],” Clarke recently told Business in Vancouver. In April, a fire broke out at the company’s Snowflake mill in Arizona. Aided by 40-mile-anhour winds, the blaze quickly spread across the mill’s storage yard and wiped out 14,000 tonnes of recovered waste paper. Then, in May, “human error” caused a second fire to rip through Catalyst’s Powell River mill, resulting in $1.6 million in losses. Worse yet, the company had to eat the cost of the fires because they fell below an insurance policy deductible of

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R ichmond sa id t he stronger Canadian dollar has limited the ability of pulp producers to cash in on what have been record pulp prices, topping US$1,040 per tonne during the second quarter. For Canfor Pulp Products (TSX :CFX), t he strengthened loonie coupled with higher production costs “combined to offset the record … list pricing seen in Q2”, Richmond wrote in a research note to investors. Still, Levi Sampson, president of Nanaimo’s Harmac Pacific pulp mill, said the recent price spike buoyed profits for his employee-owned mill in the second quarter despite the exchange rate. “Ever y cent t he dollar goes up has a huge impact on the operation,” said Sampson. “But we’re still profitable at these levels, and I would suspect most other pulp companies in B.C. are as well.” • jmckay@biv.com

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Technology

August 23–29, 2011 Business in Vancouver

Good vibrations: Vancouver company aiming to harness the power of thermoacoustics Etalim Inc.’s generator can turn heat from any source into an acoustic vibration and then into electricity By Nelson Bennett

n the fourth floor of a plain, grey office building bordering East Vancouver, former Creo scientists are playing with the guts of a small external heat engine that, when fully assembled, looks a bit like R2D2’s little brother. The size of a basketball, Etalim Inc.’s thermoacoustic electrical generator (TEG) is remarkable, as engines go, in that it has no pistons – no moving parts at all, to speak of, in fact – produces no exhaust and uses heat, rather than creates it, for its fuel source. “It’s fundamentally new and unique,” said Etalim CEO Ron Klopfer. “To our knowledge, this is the only device of its type in the world.” Steven Garrett, professor of acoustics at Penn State University, said there are other scientists making thermoacoustic generators. But none so far have achieved the kind of basic energy efficiency that Etalim is claiming to be achieving: 40%. A second-generation TEG that Etalim is working on would run at 50%. By contrast, a gas engine

Richard Lam

Etalim chief physicist Tom Steiner (right) brought Ron Klopfer on board two years ago to help Etalim commercialize a thermoacoustic engine that turns heat into electricity

has, at best, an energy efficiency of 25% to 30%. Photovoltaic cells are even less efficient. “If what they claim is true, this is important,” Garrett said. “If they’re getting a kilowatt out of a basketball at that kind of efficiency, my hat’s off to them.” T he d i m i nut i ve d ynamo converts heat – any heat source will do – into an acoustic vibration, which is then converted into mechanical energy and, finally, into electricity. Connect it to a hybrid car’s exhaust manifold and you get an auxiliary

source of electricity. Focus the light of the sun onto a TEG with a tracking parabolic mirror and you create electricity much more efficiently than with photovoltaic cells. That’s just a sample of the potential applications, said Klopfer, who puts the TEG in a lineage that includes the steam, internal combustion and turbine engines. Garrett believes the most important application might be in places like rural India, where off-grid villages can burn virtually any kind of fuel to produce heat and electricity using a TEG. Because

the TEG is an external heat engine, it doesn’t matter what fuel is used. Etalim was co-founded by former Creo CEO Amos Michelson and Tom Steiner, the company’s former chief physicist, who also brought other Creo scientists and engineers on board after Kodak bought Creo in 2005. Five years ago, Steiner approached Michelson with the germ of an idea he had for creating a better solar cell – an idea that morphed into something with a much broader application than he had originally intended.

Michelson wrote the first cheque to kick-start the company. The TEG’s potentia l has been validated by Los Alamos National Laboratory, which Garrett said is an important step, because Los Alamos has pioneered thermoacoustics. None of the basic principles used in the TEG are new. Etalim has simply refined them and made them work efficiently and with inexpensive materials. “Generating sound from heat’s been known since the 1800s,” Garrett said. “But harnessing it efficiently in something the size of a basketball that can get 40% or 50% efficiency – that takes a lot of skill.” Again, there are no moving parts in the TEG, unless you count a steel plate that vibrates. It’s therefore low maintenance. Etalim estimates a TEG will run for 40 years or more without any maintenance. “The engine is very elegant and simple,” Klopfer said. “You can make our device in any factory that’s making auto parts today.” Etalim plans to start producing TEGs in 2013 that will

produce one kilowatt of electricity (enough for a European household). That would be followed by a second-generation TEG that would run at higher temperatures to produce three kilowatts with 50% energy efficiency in 2015, which is also when Etalim is projecting it will start turning a profit. For now, Etalim will concentrate on the micro-CHP (combined heat and power) market. In Europe, manufacturers are encouraged

“If what they claim is true, this is important” – Steven Garrett, professor of acoustics, Penn State University

to include micro-CHP in their furnaces and boilers for home heating. Etalim sees a huge market there, based on the fact the TEG engine would be cheaper to produce – and would last longer – than any of the other heat engines currently used. “We’re now gearing up to raise an institutional venture capital of between $5 million and $10 million early next year,” Klopfer said. “That will be to fund the home stretch of the R&D program.” He said Etalim will likely partner with a manufacturer to produce 40,000 units between 2013 and 2015, ramping up to a total of 400,000 units by 2020. • nbennett@biv.com

High-Tech Office

Alan Zisman Internet browser users’ IQ subject of local hoax

n late July, a Vancouver psychological testing firm was reporting that Microsoft Internet Explorer (IE) web-browser users had lower IQs than users of other browsers. AptiQuant Psychometric reported that it had tested more than 100,000 English-speaking adults, correlating their web-browser use with IQ results. Given an average IQ of 100, users of the obsolete version 6 of Internet Explorer averaged just above 80; IE 8 users came in around 95. Users of alternatives to Internet Explorer – Safari, Firefox and Chrome – were all a bit above average, with users of the Opera browser scoring highest. Moreover, the report said, the average IQ of IE users had dropped by 20% since the company’s 2006 survey. A charitable explanation: since

Internet Explorer is the default on computers running Windows, one might speculate that users who seek out an alternative are overall mentally perkier than people who accept whatever is handed to them. Only one problem: as revealed a few days later, it was all a hoax. No study, no AptiQuant. Kudos to the BBC; after initially joining the media frenzy to report the “results,” the news agency followed up on critical comments added to their online news item, and took a moment to read the report posted on AptiQuant’s website – apparently the first media outlet to do so. (Read the report yourself at: www.aptiquant.com/ IQ-Browser-AptiQuant-2011.pdf.) The shor t PDF document should have set off lots of warning bells, starting with the company’s

purported address: 498 Richards Street, in downtown Vancouver. Stroll to the corner of Richards and Pender: no such address. The report states that the Weschler Adult Intelligence Scale (WAIS) test was given to 100,000 test subjects over a four-week period. The WAIS is a standard test used to measure intelligence, but it takes several hours to administer and can’t be given online. Using it to test 100 people (one on one) in four weeks would be arduous, to say nothing of 100,000. It claims that AptiQuant was founded in 2006 and was now “a world leader in the field of online psychometric testing.” Yet the company had (prior to the hoax) no online history, and its web domain had only been registered in July 2011 by Surrey resident Tarandeep Gill. Jump past several pages of charts to the conclusion: two brief paragraphs, the first claiming that people with lower IQs seem to resist changing their browsers, but that more research is needed before making any broad

generalizations. The second reads: “It is common knowledge, that Internet Explorer Versions to 6.0 to 8.0 are highly incompatible with modern web standards. In order to make websites work properly on these browsers, web developers have to spend a lot of unnecessary effort. This results in an extra financial strain on web projects and has over the last decade cost millions of man-hours to IT companies. Now that we have a statistical pattern on

The short PDF document should have set off lots of warning bells, starting with the company’s purported address the continuous usage of incompatible browsers, better steps can be taken to eradicate this nuisance.” Huh? Aptiquant.com now owns up to the hoax, stating that Gill, a web developer/entrepreneur, was aiming “to create awareness about

the incompatibilities of IE6, and not to insult or hurt anyone.” He explains he “got this idea when adding some features to our comparison shopping website, www. atcheap.com, we found out that IE6 was highly incompatible with web standards.” (Note that Microsoft, too, is anxious to move users away from IE6 and older versions of Internet Explorer.) Listing “signs that should have uncovered the hoax in less than five minutes” Gil said that he was “really surprised that it took so long” for people to figure it out. Indeed. (Full disclosure: I, too, didn’t read the study until after it was revealed to be a hoax; when I first heard that the report was credited to a Vancouver company, I emailed asking for an interview. No one got back to me.) • Alan Zisman (www.zisman.ca) is a Vancouver educator and computer specialist. His column appears weekly.

Small business

Daily business news at www.biv.com August 23–29, 2011

New tool to help B.C. businesses export A vendor database that helped companies secure Olympic contracts now provides support for breaking into foreign markets By Jenny Wagler

o bolster B.C. businesses’ exporting activities, the provincial government has transformed a vendor database that helped local companies secure Olympic contracts into a communications tool to help local businesses break into export markets. The one-time 2010 Business Network, credited with helping its members land more than $720 million in Olympic-related contracts, has been re-branded the B.C. Business Network. Ken Veldman, manager of business services and Olympic legacy with the Ministry of Jobs, Tourism and Innovation, expl a i ne d t h at t h e 2 010 Business Network was set up as way to help B.C. businesses find Olympic-related opportunities. “What we were trying to do was make a real madein-B.C. supply chain for the Winter Olympics.” The database allowed local businesses to profile and market their business offerings to the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games (VANOC) and foreign companies in town for the Games. The province, he said, marketed the database to VANOC and Olympicrelated foreign companies such as sponsors and broadcasters. A f t er t he Oly mpic s wrapped up, Veldman said, the government realized it had created an effective communications tool with post-Olympics potential.

Sandra Nicolas, trade services co-ordinator for Small Business BC, says the B.C. Business Network could save businesses time in keeping up to date on export information and developments and inspire them by presenting new export opportunities

“We had 4,500 companies that we could slice and dice, based on the opportunity, and send those it was relevant to the information to say, ‘Hey, here’s an opportunity.’” Veldman said the companies were self-selected, aggressive and bent on grow th. Post-Oly mpics, he said, many were interested in international opportunities. That, he said, aligned well with one of the ministry’s ongoing challenges: getting more B.C. businesses engaged in export markets, whether international or simply out of province. “The stats right now say that something like 1.5% of small businesses in B.C. are exporters, and that’s a really small number.” The result, he said, is the transformation of the database into the B.C. Business Network. Veldman said that

Dungeness-crab startup Medallion Seafood Exports would value more export-related information as it builds its business, according to director Dave Ling

unlike its predecessor platform, the new tool won’t serve principally as a vendor database, but as a way for B.C. businesses to receive targeted information to help them start or expand exporting. By signing up for the free tool, businesses can receive e-mails with: •customized business intelligence specific to their industry and markets, such as the latest deals, statistics, economic news and market trends; •invitations to workshops, information sessions and trade events; and •referrals from the ministry when international clients are seeking products, services and investment opportunities in B.C. Veldman said the tool allows the ministry to target

its communications. “If you’re in, to pick one at random, the clean-technology sector and you’re looking at getting into the Asian market, that’s going to be there as part of your profile, so we’re going to send you information that’s related to clean technology and the markets that you’re interested in and we’re going to invite you to programs that are along those lines,” he said. “It’s going to be about getting the right information to the right people at the right time and making sure that it’s a value-added service for its members and that we can move more companies through that pipeline to become successful exporters.” Veldman said that while the B.C. Business Network

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will still be publicly available online as a vendor database, that will no longer be the tool’s core value to businesses, as the ministry won’t be marketing it to possible customers as it did the Olympic platform.

“We had 4,500 companies that we could slice and dice, based on the opportunity, and send those it was relevant to the information and say, ‘Hey, here’s an opportunity’” – Ken Veldman, manager of business services and Olympic legacy, Ministry of Jobs, Tourism and Innovation

“The issue is in the marketing dollars and because it’s so cross sector and in so many different markets, it would just be so hard to focus [the marketing].” Velman said there are currently 4,900 B.C. businesses registered in the database, and he expects to see some companies leave and others join as the ministry spreads the word about the platform’s new goals and functionality. Sandra Nicolas, trade services co-ordinator for

Small Business BC (SBBC), said that most B.C. businesses are intimidated at the idea of exporting, and she sees far more companies coming to SBBC with importing plans rather than exporting plans. “[Exporting requires] lots of investment and is time-consuming and maybe [requires] hiring someone else who has the skills or the knowledge or even the language.” She assessed that the B.C . Business Net work could help bolster companies’ interest in exporting by: saving businesses Internet search time through directly communicating key export-related information and updates; and by stretching their horizons by presenting them with new opportunities. Dave Ling is a director of Vancouver-based start up Medallion Seafood Exports, which this month is starting up operations with its first trial shipment of live Dungeness crabs to China. He said the company has thus far relied on a packing company to help Medallion clear exporting red tape and broker deals with Chinese buyers. Ling said export-focused communications from the prov i ncia l government would be valuable to Medallion as he looks to grow the company. “Any kind of new information would be useful.” • jwagler@biv.com

Business tool kit

August 23–29, 2011 Business in Vancouver

Sales calls

Rob Malec How to ensure your sales team wins its sprint to the finish line

ven with solid planning, hitting your company’s quarterly sales quota can sometimes be a sprint to the finish. Navigate through these urgent times in a way that not only brings in revenue today, but also paves a smoother road for the future. Bottom-line results rule in sales, but the subtext honoured by the wise is that the journey is as important as the destination. A sprint to the finish taxes the entire organization in unhealthy ways. Sales’ demands of accounting and admin spike as it hurries to push orders through the system. Procurement, production and shipping are stressed to maximize capacity to fulfil those orders, and customer service braces for the aftermath.

Some classic – and bad – strategies to deal with a sales sprint to the finish are: •discounting to provide incentives for immediate purchases. This kills margin and puts your business at risk. Business won on price will ultimately be lost on price •asking good customers to accept “beefed-up” orders. This results in excess inventory to be managed, and credits follow. Not good; and •asking good customers to place regular orders early as a “favour.” See the previous item to learn why this is risky. Also, aren’t we the ones who should be doling out favours, not our buyers? Managing the sprint to the f inish requires foret hought. Healthy ways to handle that sprint

include: •taking the pressure off your team members to produce rosy 30-day sales forecasts. Allow them to get real. Get a true picture of your funnel by asking to see only business with a 90% or greater chance of closing within the month. This one action will identify much of what is working or not in your sales process overall; •measuring sales results against quota as frequently as is prudent. Track transactional sales results daily. Track key account sales weekly. Compare actual results to the 30-day forecast. Linking these will make both better; •sharing the results. Let everyone know how they and their colleagues are doing. Done appropriately this builds a culture of achievement. It also promotes observance of trends, which will supplant waiting for alarms to sound; •acting early. Create strategies to address projected shortfalls by increasing sales velocity where it can

be done. Implement immediately; •meeting often to check on tactical implementation. How is the sales situation unfolding? Poor implementation of good sales plans is a classic pitfall that can easily be avoided; and •setting your marketing calendar

Bottom-line results rule in sales, but the subtext honoured by the wise is that the journey is as important as the destination appropriately. Marketing pushes at quarter-end promote a sprint to the finish. Customers also get trained to curtail buying until the end of the quarter because that’s when the deals hit. Even with great planning and execution you might still be in a sprint to the finish. A good place to look for stray revenue is in your reps’ pending order files. Are there

BizPharmacy

Cyri Jones and Ivan Surjanovic How to find a great file-storage and sharing service for your business Symptom: Technology is supposed to make our lives easier, right? Then why do I wake up with chills wondering whether I’m going to lose some really valuable files or worse still, that I have already lost some critical files to a dysfunctional hard drive or a chaotic desktop? Recommended medications: Ivan: This is a typical case of “file storage upsetus,” and to be honest, this is a condition that I have suffered from as well. As a knowledge worker, I create hundreds of files each week, and keeping track of them all, never mind ensuring they’re properly backed up, is a major challenge. What if suddenly I couldn’t get access to my Gmail or Google docs? That’s a decade of work lost. Cyri: Truth be told, I used to be a card-carrying member of File Chaos Anonymous. I have tried many times to kick the habit of just saving everything to my desktop. After a lot of therapy, I can now say with confidence that I can sleep at night knowing my files are safe. My websites are being properly backed up, my family photos are in multiple locations and I can find my files thanks to some powerful file-storage and sharing medicine: Box.net, DropBox, Google Cloud and Microsoft’s Skydrive. Ivan: My personal journey started with Box.net, one of the pioneering services, and then I moved on to DropBox for its synchronization features.

Medication

Ingredients

Cost

Box.net

Started in 2005, Box.net really helped get personal file storage in the cloud going. You can access, manage, share and view all your files on the web, and you can send and track large files with colleagues. It has branched out to offer project management and online workspace services.

Free for five gigabytes, $15 per user per month for 500 gigabytes

DropBox

DropBox is known mainly for its synching features. Files saved on one computer can be accessed from any of your other computers or phones. Just save your important files to your DropBox folder, and you know they will be there when you access them from your other computers or devices. No more running back and forth between computers with USBs.

Free for two gigabytes, $9.99 per month for 50 gigabytes and $19.99 per month for 100 gigabytes

Microsoft Live Drive and SkyDrive

Live Mesh is Microsoft’s solution for synching files and SkyDrive is for file storage and collaboration.

25 gigabytes free for sharing MS Office docs and photos

Google Cloud and Google docs

With the release of its cloud-based Chrome operating system, Google’s cloud storage and collaboration series are innovative and impressive.

Free for first two gigabytes, $5 per year for five gigabytes, $20 per year for 80 gigabytes

Google Cloud Connect

This tool lets you share, back up and simultaneously edit MS Word, MS PowerPoint and MS Excel documents. When you save a file, a web link is created for the files that you can share with colleagues. Works with mobile devices, too. No more need to email files back and forth and track the latest versions.

Free

Google Take Out

This one is really useful for Googleholics. It enables you to download all Google data, including contacts, profile info and photos from Picasa into one zipped file. Google plans to eventually include its other services like documents, Gmail and groups.

Free

Cyri: I’m more of a Googleholic and use its Google Cloud service, although I must say I’m really impressed with Microsoft’s SkyDrive service. You get 25 gigabytes of free storage space. Ivan: With Internet Explorer 9, you can even pin SkyDrive to

your Windows 7 taskbar. It’s just a single click away from saving and sharing documents. But deep down I’m also addicted to Google. You just get two gigabytes of free storage space, but extra storage is cheap medicine: $5 per year for 20 gigabytes and you can even get a

terabyte of storage for $256 per year if you have a really big file storage habit. Cyri: See accompanying medication chart. Ivan: If you add all the free medication together, that’s a whopping 34 gigabytes.

orders there waiting to get entered? Get them processed. And what about your customers’ pending order files? Call your clients that order online or via phone to ensure they get the on-time service they, and you, require. How about your shipping room? Are there any “on hold” or backorders that can be unstuck and shipped? When all these avenues are exhausted take the remaining revenue shortfall and spread it among all your reps. Give each person a small hill to climb rather than having a few folks scale a mountain. In the short term, leading your team like this will provide a good chance of hitting quota. For the long term, you will identify the root causes of your sprint to the finish cycle and create strategies to avoid it in future. • Rob Malec (rob@robmalec.com), president of Businessworks Consulting, is a sales and revenue-generation expert.

Prognosis: Cyri: One important consideration is to make sure you know where your medicine is stored, especially if it’s customer data that you have to protect under provincial or federal privacy legislation. You also want to make sure you have the right to delete your data and account at any time. Future management of this condition: Cyri: You’re going to see a lot more cloud file-storage and collaboration services, but it’s best not to keep switching your medication. Generic name and alternative medicine: Ivan: The generic name is “cloud storage” or just “file storage,” but that sounds so 1980s. Cool alternatives include: Syncplicity, Egnyte, Amazon’s S3 and the new kid on the block, Apple’s iCloud. Precautions/warnings: Cyri: Because DropBox syncs your files, I find it works best for critical files that don’t take up too much space. Also, DropBox has had some security meltdowns. If you have something really confidential, it’s best to encrypt it. Cyri and Ivan’s medication rating: êêêê Cyri Jones teaches entrepreneurship, project management and information technology at BCIT and Capilano University and is the cofounder of ZedPress.com. He blogs at 24posts.com. Ivan Surjanovic is a marketing faculty at Capilano University and CEO of iPower Lab. He blogs at whereispuck.com and at bizpharmacy.com, where you can also see the links to the tools mentioned in this article.

Marketing

Daily business news at www.biv.comâ&#x20AC;&#x192; August 23â&#x20AC;&#x201C;29, 2011

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hat possible commona l it y cou ld a previously unpublished writer now making over $200,000 per month selling e-books on Amazon share with the makers of a head-shaving helmet and an expensive Super Bowl ad spoof for Groupon? Admittedly a motley crew to lump together, they all have benefited or suffered under economics of the new loyalty loop that the Internet has brought to marketing. In December 2010 Harvard Business Review published an ar ticle ca l led Branding in the Digital Age: Youâ&#x20AC;&#x2122;re Spending Your Money in All the Wrong Places. Since reading the article Iâ&#x20AC;&#x2122;ve found myself constantly re-evaluating how consumer decisions are inf luenced. We have moved from the traditional funnel of consistently narrowing our choices from many to fewer and finally a purchase and are now moving toward the loyalty loop where choices are added and subtracted during an extended consideration and evaluation phase, then once a purchase is made, we openly share, exchange and advocate while fuelling the inf luence of others online. Allow me to elaborate with my three unusual examples to illustrate the power of the loyalty loop. The long tail economics of successf u l indie writers selling e-books online. Twenty-six-yearold Amada Hocking has self-published eight novels online since April 2010 and currently averages monthly sales of 100,000 e-books through Amazon. Top Kindle Indie authors typically sell 2,500 to 100,000 books per month, with many in the 10,000 range. At an average of $3 per book, a nd A mazon taking 30%, the remaining profit looks pretty sweet. Sell books at a low-risk, low price point, to lots of people. This model is only possible with the loyalty loop marketing model. Itâ&#x20AC;&#x2122;s one thing to write and publish an e-book. Itâ&#x20AC;&#x2122;s another to cultivate a following online to generate those kinds of sales numbers.

Hocking tweets and is well connected in the blogging community, where she sends advanced reading copies to inf luential book bloggers. Her urban fantasy and romance appeals to youth. Readers and the connected blog community advocate and feed the loyalty loop, which in turn inf luences more buyers online. Recently her success has garnered TV and magazine stories. She doesnâ&#x20AC;&#x2122;t pay a cent for marketing. Grouponâ&#x20AC;&#x2122;s Super Bowl Ti b e t a d b lu n d e r. O f course, the loyalty loop

Advocacy can turn negative, as it did following Grouponâ&#x20AC;&#x2122;s attempt at selfinflicted humour can work in reverse. Advocacy can turn negative, as it did following Grouponâ&#x20AC;&#x2122;s attempt at self-inf licted humour. In case you missed it, Groupon paid over $1 million for a 30-second spot during the Super Bowl. In it, actor Timothy Hutton appears to make light of the political struggle in Tibet in the name of a great Groupon deal at a Tibetan restaurant. Supposedly the company was ma k ing fun of itself by talking about discounts as a noble cause. Viewers, having seen hu mour in t he pa rody, would then appreciate the philanthropic donation that Groupon had set up for Tibet. Too bad the connecting website never appeared in the ad. And too bad the great unwashed tuned into Super Bowl were more receptive to objectification of women in their advertising than obtuse connections. So how d id t he new loya lt y loop ma rketing model fail them? Arguably much of the value of buying a Super Bowl ad goes beyond the high reach of the TV audience. Chatter before, during and af ter the event online is where the real value is. In Grouponâ&#x20AC;&#x2122;s case, it

didnâ&#x20AC;&#x2122;t frame the spot before to build anticipation and understanding. It then failed to respond quickly afterward. It dropped the ball where the loyalty loop mattered most: online. Talk turned negat ive a nd Groupon never really recovered. H e a d b l a d e â&#x20AC;&#x2122;s c r a z y shav ing-helmet v ideo. So youâ&#x20AC;&#x2122;re a sma l l company that designs and sells razors to a highly targeted segment: people who shave their heads. How do you let the world know your razor is the best? You create a hokey looking homemade video demonstrating a helmet that, when worn, w i l l lat her and shave your head with motorized razors in about 30 seconds. Sound scary? Sound unbelievable? T h i s YouTub e v i r a l v ide o ma rke t i ng c a mpaign was fresh, edgy and, most importantly, sparked conversations about head shaving. It featured one of Headbladeâ&#x20AC;&#x2122;s razors in the helmet and demonstrated how it works. The helmet, later revealed as a hoax, generated countless purchase inquiries for the company. The online chatter grew exponentially, and flooded over to mainstream media. The company experienced record hits to its website, where it featured the real products it sells. In the loyalty loop marketing model, it gained positive traction in a rather obscure category. So the big question to ask is this: is your marketing feeding the marketing funnel or the loyalty loop? Want more insights? Visit www.charleson.ca and hit the newsletter subscribe button top left. Marketing trends and research will be delivered to your inbox regularly. Or follow me on Twitter at twitter. com/marycharleson. â&#x20AC;˘ Mary Charleson (mary@ charleson.ca) is a marketing strategist, speaker and con sultant. Her recently published book Five-Minute Marketing is available through w w w. amazon.com and w w w. Trafford.com. She writes monthly for Business in Vancouver.

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Asia Pacific 21

August 23–29, 2011 Business in Vancouver

Chinese lumber imports keep rising CN strikes deal with China’s largest lumber buyer to boost exports to Asia

China in May became the largest importer of B.C. lumber By Glen Korstrom

lu mb er c ompanies got good news earlier this month when Canadian National Railway (CN) announced that it had struck an agreement with China’s largest lumber buyer, CNBM Forest Products Trading Ltd., to boost lumber exports to China. That came on the heels of trade data released in July that showed that the value of Canadian softwood lumber exported to China surpassed the U.S. for the first time in May. China is now the largest destination for B.C. lumber products – a phenomenon that highlights just how important the Asia Pacific region is for the B.C. economy. Many headlines have drawn attention to B.C. sawmill workers’ fears that local raw log exports to China will increase. CN’s agreement with CNBM, however, is said to be about lumber and not raw logs. Even if some raw logs slip into the mix, it is not a bad thing, according to International Wood Markets Group president Russ Taylor.

CN has owned Surrey’s Thornton Yard for many years and operated it mostly as an intermodal facility. T he ag reement w it h CNMB will require CN to use an initial eight-acre footprint at Thornton Yard that was previously unused. While growing exports to China is desirable, the U.S. and Japanese markets are the most profitable destinations for B.C. wood, Taylor said. “China buys low-priced commodities. It’s the highest-priced market for lowgrade lumber because that’s what they want. So, we’re getting a reasonable return on our low-grade lumber,” Taylor said. B.C. has slowly been increasing the amount of mid-grade lumber to China, and Taylor expects that to increase. “Japan pays the highest price for the highest quality, but there’s only so much of that which we can produce,” he said. Taylor expects B.C. lum-

“If you didn’t export “I’m a believer in log exports,” Taylor told Business in Vancouver. “That’s jobs. It’s not a lack of jobs. No one seems to get it. If you didn’t export logs, those logs would be staying in the forest. There would be no logging jobs, no port jobs, nothing.” Taylor’s consulting company is sponsoring, with the China Timber Distribution Association, a logging and lumber conference in China September 12-16 that will appeal to both owners of sawmills who fear a hike in raw log exports to China as well as North American raw log exporters who are looking for business. Regardless of whether the bump in B.C. wood exports to China is driven by logs or lumber, it will mean new CN jobs at Surrey and Prince George facilities starting this fall. “We’re already hiring,” C N spoke sma n L ou is -

logs, those logs would Antoine Paquin told BIV August 12. He estimated that CN would hire 14 new staff at Surrey’s Thornton Yard, which currently has 453 staff. CN will also hire 25 new employees for its Prince George facility, which currently employs 32 staff. “The number of new hires could increase depending on the volume,” Paquin said. CN’s plan is to transport lumber, most ly by truck, to either Surrey or Prince George. The lumber stored in Surrey will then be loaded on ships at the Port of Vancouver and sent to China. Other lumber will flow first to Prince George and then be sent on rail lines to the Port of Prince Rupert, 720 kilometres west of Prince George.

be staying in the forest. There would be no logging jobs, no port jobs, nothing” – Russ Taylor, president, International Wood Markets Group

ber shipments to Japan to increase next year. Currently, there’s a glut of plywood in Japan because, in the wake of the earthquake and tsunami, there was what Taylor calls “panic buying” for plywood to board up buildings. The enormous rebuilding effort will require lumber in 2012, he added. Wood products, such as lumber as well as cedar sha kes and shingles,

Perpetual cycle: System becomes dependent on bribes from Corruption, 20

of what you can and cannot do when it comes to providing cash or material benefits then you have to have a clear line where you say that is a line that cannot be crossed,” said Tsao. Failure to comply can have far-reaching implications on a company according to Hanlon.

There are organizational implications whereby you can have a strong company in Vancouver, but the local subsidiary or branch functions in a way far removed from the original vision of the company. These significant moral and morale issues can affect the long-term growth of companies.

Also, when businesses are engaged in corruption, they are perpetuating a system that’s dependent on bribes to get simple things done. So a company may demand intellectual property protection in these countries, but the courts are corrupt, so there is a paradox of feeding into a system that won’t in turn protect their brands.

“The risk is greater for larger companies with more exposure, and sma ll to medium-sized enterprises aren’t being as closely scrutinized,” Hanlon said. “At the end of day, though everyone knows corruption is an issue, they are not talking about it, but it impacts every business working there.” • jharrison@biv.com

plywood, veneer and logs have been a real driver for B.C. export growth to China in the past decade. That category’s exports have grown more than 2,300% from $15 million in 2000 to $362 million in 2009. Japan, in contrast, has

more t h a n h a l ve d t he amount of wood products that it imports from B.C. In 2000, Japan imported $2.13 billion worth of B.C. wood products. That shrunk to $763 million in 2009. • gkorstrom@biv.com

daily online edition

BUSINESS TODAY Chinese sawmills could steal B.C. work Executives at Vancouver’s International Wood Markets Group (IWMG) plan to reveal a study later this week that shows Chinese sawmills are six times more cost efficient than those in British Columbia. That could cause future closures in B.C., according to IWMG president Russ Taylor. “They’re outbidding U.S. western mills for logs,” Taylor told Business in Vancouver August 12. “That’s shutting down part of the sawmilling industry. I’d be worried about a low-cost producer that’s buying logs and taking them away and shutting down mills.”

Along with the China Timber Distribution Association, Taylor’s consulting company is cosponsoring a September 12-16 logging and lumber conference in China that will appeal to both owners of sawmills who are watching raw logs go to China, and North American raw log exporters looking for business. China is the top export nation for B.C. lumber. Japan, in contrast, has more than halved the amount of wood products that it imports from B.C. In 2000, Japan imported $2.13 billion worth of B.C. wood products. That shrunk to $763 million in 2009. Monday, August 15

Full stories and other local business news at www.biv.com/businesstoday Daily business news direct to your inbox! Sign up at www.biv.com/newsletters

22 Asia Pacific

Daily business news at www.biv.com August 23–29, 2011

Culture Matters - India

Deepak Gill and Martin Donner Indian business culture calls for curiosity and respect

oldman Sachs has predicted that in fewer than four decades India will be the third-largest economy in the world (behind China and the United States). As a member of the BRIC group (Brazil, Russian, India and China), India is the second-fastest-growing

market in Asia. Businesses around the world increasingly have India on their radar, so much so that booking a room is often difficult in a business-class hotel in major Indian centres like Mumbai, Bengaluru (formerly Bangalore) and New Delhi, even weeks in advance of a planned visit.

To appreciate the volume of international business traffic to India, one need only visit one of these cities. With the world “beating a path” to India’s door, it is important that Canadian businesspeople understand certain fundamental features of Indian business etiquette.

Titles In general, Indian businesspeople are more formal than their North American business counterparts, and we should respect that. It is important to use titles (“doctor,” “professor,” “Mr.,” “Mrs.,” “Miss,” etc.) to address India n counterparts.

Personal relationships/ background research Indian businesspeople place a greater importance on personal relationships than we do. They want to become acquainted before discussing business. It is not uncommon for an Indian businessperson to conduct due diligence on the person and the organization he or she represents prior to first meeting him or her. At the first meeting, it is also not unusual for an Indian businessperson to ask questions that we might perceive as being “too personal” (marital status, age, etc.). Indians are usually curious about a prospective business partner’s educational credentials and his or her ties with influential associations and governmentaffiliated organizations. It will be perceived as a sign of respect if you conduct due diligence on the background of the Indian businessperson prior to your first meeting. Those who do may be surprised at the appreciation that will be shown if early in the meeting one or two of his or her achievements is mentioned. Business cards Unlike the custom of other Asian countries, business cards may be given or received with one hand. However, on receiving a business card, it is important to show interest in it, usually by commenting on some aspect of it. Also, translating the contents of your business card into Hindi on the reverse side will be perceived as a sign of respect for Indian traditions and culture. Social activities Family plays a central role in Indian life, and commitment to family life often leads businesspeople to prefer business lunches to dinners. If a business d inner must be scheduled, it will be appreciated if the guest’s spouse is invited as well. Most Indian businesspeople do not drink alcohol. However, if they do, they usually do so moderately.

Indian business cu lture generally does not include attending nightclubs or lounges for after-dinner drinks. It is also important to sample at least a small portion of any food or drink that is offered during a business meeting. The majority of Indians are vegetarian. Negotiations/agreements It is counterproductive to be, or to be seen to be, too aggressive or “bottom-line” oriented. Respect is paramount during the course of negotiations. “Saving face” is extremely important and visitors should be sensitive to that. Of course, if one deals with counterparts with respect, that will not be an issue.

It will be perceived as a sign of respect if you conduct due diligence on the background of the Indian businessperson prior to your first meeting Resolutions of particularly contentious points should be done in private, out of the view of “junior” persons. In terms of written agreements, Indians are familiar with British-style contracts and will, in respect to larger transactions, retain sophisticated legal counsel. Negotiations of definitive agreements can often stretch over long periods of time as Indian decisionmaking is usually consensual, and the fine points and details will need to be canvassed and settled prior to signing the agreement. Accordingly, patience is the order of the day! • Martin Donner is the national chair of the Asia Pacific team at Borden Ladner Gervais LLP. Deepak Gill is an associate at Borden Ladner Gervais LLP, and a member of its Asia Pacific and India desk teams.

Indian business basics: •Indians want to become acquainted before discussing business so be prepared to answer personal questions; •commitment to family life often leads businesspeople to prefer business lunches to dinners; •on receiving a business card, it is important to show interest in it, usually by commenting on some aspect of it; •most Indian businesspeople do not drink alcohol; •it is counterproductive to be, or to be seen to be, too aggressive or “bottom-line” oriented; and •Indian businesspeople are more formal than their North American business counterparts.

Law

August 23–29, 2011 Business in Vancouver

Regional Planning

Evan Cooke Will the new Metro Vancouver regional growth strategy adversely affect the Canadian economy?

fter several months of negotiations, Metro Vancouver finally obtained the unanimous support of its member municipalities for a new regional growth strategy, which was adopted on July 29, 2011. The objective of the strategy is to promote sustainable growth in the Lower Mainland, but concerns were raised by some member municipalities about the amount of planning control that the strategy ceded to Metro Vancouver. Three of the region’s largest business associations, the Business Council of BC, the Urban Development Institute Pacific Region and the BC Chamber of Commerce, also collectively opposed the strategy, citing concerns that it will, among other things, constrain future expansion of the region’s transportation infrastructure and industrial land base. While the economic concerns raised by the business associations remain, the member municipalities’ concerns have apparently been satisfied, since they have all now thrown their support behind the strategy. The Metro Vancouver 2040 regional growth strategy bylaw passed third reading and has been adopted. The focus will now shift to assessing how implementation of the strategy actually impacts the regional,

provincial and national economies. Metro Vancouver, like B.C.’s 28 other provincially created regional governments, is charged under the Local Government Act RSBC 1996 ch. 323 (formerly the Municipal Act) with drafting and implementing regional growth strategies. Metro Vancouver’s new strategy is supposedly drafted to ensure that future land use is sustainable and environmentally responsible, and it has the following stated goals: •creating compact urban areas; •s up p or t i n g a s u s t a i n a ble economy; •protecting the environment; •developing complete communities; and •supporting sustainable transportation choices. While the strategy aims to achieve its goals in part by creating fixed land-use designations, which are meant to contain sprawl, protect agricultural and conservation areas, and create compact urban centres, the business community characterizes the new strategy as a solution to a problem that doesn’t really exist. In short, it sees the existing protections of agricultural land reserves and the physical layout of the Lower Mainland, which is already constrained by the ocean, rivers,

mountains and the American border, as being sufficient barriers to urban sprawl and encroachment on agricultural and conservation lands. Those Metro Vancouver member municipalities that expressed pre-adoption concerns about the strategy, primarily the City of Coquitlam, focused largely on maintaining their political autonomy and the strategy’s creation of new bureaucracy in local land-use planning processes.

Critics fear that the adoption of the strategy will make it harder for some existing businesses to grow, and warn that those businesses may relocate Since the member municipalities’ support was necessary to adoption, those concerns took priority and have apparently been satisfied. However, the strategy’s impact on the regional, provincial and national economies has arguably been given short shrift, and now that the strategy has been adopted, effecting changes to it will be significantly

harder if the business community’s concerns prove to have been warranted. These concerns may have been partially addressed by the new regional growth strategy “Procedures Bylaw,” which was quickly passed in mid-July, as it contain a high-level mechanism for evaluating, and potentially amending, the strategy as the need arises. However, it remains to be seen whether that mechanism will allow the strategy to evolve smoothly as the future planning needs of the Lower Mainland become clearer. The procedures bylaw aside, industry opponents of the strategy argue that key contributors to B.C.’s economy were ignored during the drafting of the strategy, such as the region’s port network, which is Canada’s largest and busiest. Port Metro Vancouver, as the regional port network is known, is the fourth-largest port network in North America (by tonnage), includes 28 major marine cargo terminals and three class 1 railroads. According to statistics published by Port Metro Vancouver, more than 130 million tonnes of cargo move through its gates each year. Further, Port Metro Vancouver reports generating, directly and indirectly, an annual economic output of $22 billion and supports almost 130,000 Canadian jobs. A huge amount of materials and goods moving between major domestic and Asian markets pass through Metro Vancouver,

including new vehicles, consumer products and mining, agricultural and forestry resources. It is self-evident that the movement of goods between transportation hubs and industrial areas requires an efficient transportation network. Critics of the strategy worry that fixed land-use designations imposed by the strategy will constrain expansion of this transportation infrastructure and the development of the industrial land base, and thus stifle the growth of the regional economy. If the critics are correct, a broader concern should be the impact of the strategy on the national economy. Critics fear that the adoption of the strategy will make it harder for some existing businesses to grow, and warn that those businesses may elect to relocate to the United States. Similarly, there are concerns that foreign businesses will avoid moving into B.C. and will, instead, look to American port cities where they may face fewer obstacles to expansion. While some will argue that the strategy’s critics should have been more involved from the outset, the timing of their criticism should not undermine the substance of their concerns. • Evan Cooke is a lawyer at Borden Ladner Gervais LLP in Vancouver. His areas of specialty include expropriation disputes, municipal law, commercial leasing litigation and general commercial litigation.

Trouble

DISCIPLINE •The British Columbia Securities Commission

The executive director of the British Columbia Securities Commission (BCSC) has issued a notice of hearing alleging that a West Vancouver man breached securities laws when he purchased securities in an Alberta company that was planning to hire a new president and CEO, the regulator announced August 8. The notice alleges that Jerome John Rak had knowledge of Velo Energy Inc.’s plan to hire Arthur Millholland, the former president and CEO of Oilexco Inc., when he purchased 172,000 shares in the company. The notice also alleges that: •in late July or early August 2009, Millholland heard about an opportunity to consider a reverse merger with a shell company; •on August 4, 2009, Millholland attended a meeting in West Vancouver with Rak and others to discuss the possibility of Millholland merging with Velo and becoming its president and CEO;

•on August 5, 2009, Millholland began drafting the news release that would announce he had become the new president and CEO of Velo. On August 6, 2009, Millholland sent the draft news release to Rak; •at the end of the day on Friday, August 7, 2009, Velo issued the news release. Velo’s share price closed that day at $0.20 per share. On August 10, 2009, the next trading day, Velo’s share price rose to a high of $0.495; •between August 4 and August 7, 2009, Rak was in a special relationship with Velo and had knowledge of the plan for Millholland to take over Velo and become its new president and CEO; and •Rak bought 172,000 shares of Velo on August 5, 6 and 7 through a B.C. company called Belmont, a purported energy investment company. These allegations have not been proven. Counsel for the executive director will apply to set dates for a hearing into the allegations before a panel of commissioners on September 19. The executive director of BCSC has issued a notice of

hearing alleging that seven men engaged in market manipulation, and that four of them also made false or misleading statements to commission investigators, the regulator announced August 9. The notice alleges that Malkeet Singh Bains, Mark Aaron McLeary, Timothy John McLeary, Narvinder Singh Patric Virk, Robert Hainey, Jerry Williams and Erik John Benson engaged in an orchestrated campaign to manipulate the share price of Sungro Minerals Inc., a Nevada corporation that originally had its head office in Surrey, B.C. Sungro is quoted on the U.S. over-the-counter bulletin board. Bains, Mark McLeary, Timothy McLeary, Virk, and Benson are all B.C. residents. Both Hainey and Williams reside in the United States. The notice also alleges that Bains, Mark McLeary, Virk and Timothy McLeary made false or misleading statements to commission staff. The notice relates to an earlier notice of hearing and temporary order issued by the executive director on July 29, 2009.

These allegations have not been proven. Counsel for the executive director will apply to set dates for a hearing into the allegations before a panel of commissioners on September 26.

Who’s Getting Sued These corporate writs were

filed with the B.C. Supreme Court registry in Vancouver. Information is derived from notices of civil claim. Civil claims have yet to be proven in court. Defendants: 391043 Alberta Ltd. and Michael Charles Vernon and Cheryl Jane Vernon 2100–777 8 Ave. S.W., Calgary Plaintiff: HSBC Bank Canada 2900–550 Burrard St., Vancouver Claim: $5,340,111 against 391043 for debt; liberty to apply further accounting; $449,389 against Michael Vernon and Cheryl Vernon; liberty to apply further accounting; and $157,107 against 391043 and the Vernons; declarations and orders.

Defendants: Vision Greenhouses Ltd. and William Cheuk 202–2232 W. 41st Ave., Vancouver and address unavailable Plaintiff: David T.K. Ho Enterprises Ltd. 3000–1055 W. Georgia St., Vancouver Claim: $2,050,000 against Vision for debt, or, damages; and $1,147,665 against both defendants, or damages. Defendant: P.T. Pelita Cengkareng Paper aka PT Pelita Cengcareng Paper aka PT. Pelita Cengkareng Paper Co. Box 4649, Jak-Jakarta 11046, Indonesia Plaintiff: BKB Construction Inc. 1600–925 W. Georgia St., Vancouver Claim: US$1,230,243 for labour and materials for the dismantling and packaging of a paper machine at Kitimat Eurocan mill. Defendant: Denarii Resources Inc. Address unavailable Plaintiff: Falco Investments Inc. 205–1544 Marine Dr., West Vancouver Claim: $690,588 for debt

under a management agreement; or damages. Defendants: George Abboud and 0746652 B.C. Ltd. and 0712315 B.C. Ltd. and 615991 B.C. Ltd. 1860 Barclay St., Vancouver and 2300–550 Burrard St., Vancouver Plaintiff: David Hicks 1010–1030 W. Georgia St., Vancouver Claim: $241,000 for debt arising from a startup gym business; damages; an accounting; and an injunction, or, an injunction. Defendants: JNS Trucking Ltd. and Shane Ohman Box 390, 9259 Main St., Chilliwack Plaintiff: Canex Building Supplies Ltd. 15th floor, 1040 W. Georgia St., Vancouver Claim: $161,956 for debt for materials. Defendant: Virdis Energy Inc. 700–401 W. Georgia St., Vancouver Plaintiff: Parhys Investments Ltd. 490–1177 W. Hastings St., Vancouver Claim: $125,000 for a loan. Defendant: Enviro-Klean

24 Law

Daily business news at www.biv.com August 23–29, 2011

Trouble Remediation Group Inc. and Enviro-Klean Oil Recovery Services Inc. 300–31935 South Fraser Way, Abbotsford Plaintiff: NRG Technical Solutions, Inc. 514–675 W. Hastings St., Vancouver Claim: US$119,775 for debt owing under a contract. Defendants: Cert Health Sciences, LLC and Spinamed Sales International Ltd. and Timothy Russell Emsky aka Timothy Russell Ensky 1–1722 South Ogilvie St., Prince George and 614– 1488 4th Ave., Prince George and 568 Peardon Rd., Prince George Plaintiff: Lone Oak Chiropractic PSC 1500–1055 W. Georgia St., Vancouver Claim: US$115,771 for the Commonwealth of Kentucky-McCracken Circuit Court judgment for breach of contract to supply a therapeutic table. Defendants: E.F.P. Industries Inc. and Noni Efremjan and Frank Efremjan 6262 Lougheed Hwy., Agassiz Plaintiff: Royal Bank of Canada Box 5050, Station A, Mississauga, ON Claim: $87,500 for debt; a declaration against E.F.P.

Industries that the security agreement is a security interest charging the collateral specified, within B.C., in priority right to any right, title or interest of any of the defendants. Defendant: Virdis Energy Inc. 700–401 W. Georgia St., Vancouver Plaintiff: Robert Gardner 490–1177 W. Hastings St., Vancouver Claim: $58,089 for remuneration and expenses. Defendant: Springer Creek Forest Products Ltd. Box 10424, 1300–777 Dunsmuir St., Vancouver Plaintiffs: Trustees of the IWA-Forest Industry Pension Plan and Trustees of the IWAForest Industry Ltd. Plan 150–2955 Virtual Way, Vancouver Claim: $41,055 for unpaid pension plan contributions in favour of the trustees of the IWA-Forest Industry Pension Plan; $7,430 in favour of the trustees of the IWA-Forest Industry Ltd. Plan; an order; a declaration that all unpaid contribution plan contributions are held in trust by the defendant for the benefit of members of the pension plan and any other persons entitled to pension benefits or other payments under the

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plan; damages; and an accounting. Defendant: Mumtaz Ladha 1455 Bramwell Rd., West Vancouver Plaintiff: La SRL Africa Edge 1700–666 Burrard St., Vancouver Claim: Euros 38,289 pursuant to a judgment awarded by a Belgian court for debt. Defendants: Entrepreneur Coach Inc. and Thomas Matzen 1400–1500 W. Georgia St., Vancouver and 1001–1710 Bayshore Dr., Vancouver Plaintiff: Wallace Murray & Associates Ltd. 3432 Copeland Ave., Vancouver Claim: $36,000 for debt from a promissory note. Defendants: Cerealicious Eats Inc. and Jonathan Ryan Preuss and Ute Preuss 6345 197th St., Langley and 13960 66th Ave., Surrey Plaintiff: Sovereign Leasing Corp. 1200–805 W. Broadway, Vancouver Claim: $23,538 for debt arising from a lease agreement. Defendants: Cerealicious Eats Inc. and Jonathan Ryan Preuss and Ute Preuss 6345 197th St., Langley and 13960 66th Ave., Surrey Plaintiff: Morgan Crossing Properties Ltd. 3rd floor, 100 Park Royal S., West Vancouver Claim: $22,647 for debt owned under a lease agreement; and damages. Defendant: Almansoor Video Inc. and Mohamed Aslim Malik 6657 Fraser St., Vancouver and 658–55 Ave. E., Vancouver Plaintiff: Roynat Inc. 300–666 Burrard St., Vancouver Claim: $20,011 for debt under a lease agreement; and damages. Defendant: Steven Williams dba Kelowna Consulting 5328 Upper Mission Dr., Kelowna Plaintiff: Raydon Rentals Ltd. 1000–840 Howe St., Vancouver Claim: $19,705 for debt for equipment rentals and merchandise. Defendants: Donato D’Amici and KOA Construction Inc. and Eric Rudolf Kiauka and Mariana D’Amici and Conan Holizki and Steve Kiauka and Marilyn Kiauka and Rudolf Kiauka and Ganbaatar Jambal 405–2088 Beta Ave., Burnaby and 203–2498 W. 41st Ave., Vancouver and 1357 Jones Ave., North Vancouver and 3505 Norwood Ave., North Vancouver and 1003–175 2nd St., North

Vancouver and 8135 Pasco Rd., West Vancouver and 1495 Bramwell Rd., West Vancouver Plaintiff: Alpine Electric Ltd. 201–1364 Pemberton Ave., Squamish Claim: $15,419 for electrical work; and a builders lien for $15,419. Defendant: Mike Plugboer dba Hatch Creek Enterprises Box 112, Topley Plaintiff: Finning International Inc. 1000–840 Howe St., Vancouver Claim: $5,179 for debt for parts and services. Defendant: Laser Era Clinic Inc. 6225 Victoria Dr., Vancouver Plaintiff: Mara Carillo 1100-1333 W. Broadway, Vancouver Claim: Damages for injury related to laser hair removal. Defendants: The City of Vancouver and Vancouver Police Board and Jamie Hilborn and Agnieszka Zaremska Addresses unavailable Plaintiff: Richard Cyr 700–275 Lansdowne St., Kamloops Claim: Damages for abuse of police authority when excessive force was used during an arrest; and income loss, or loss of earning capacity. Defendants: Western Recovery Foundation and Turning Point Recovery Society (1984) and Bartec Fire Safety Systems Ltd. 3100–650 W. Georgia St., Vancouver and 10411 Odlin Rd., Richmond and 300–20689 Fraser Hwy., Langley Plaintiff: Susan Elizabeth Hutchinson aka Lisa Hutchinson 1100–1333 W. Broadway, Vancouver Claim: Damages for injuries sustained when a fire extinguisher fell off a wall onto the plaintiff’s foot. Defendants: Happy Valley Resort Ltd. and Ogopogo Beach Resort Ltd. and 0718698 B.C. Ltd. and 0724455 B.C. Ltd. and Chuck James and Clean Slate Construction and Cleaning Ltd. and ABC Co. Ltd. and XYZ Co. Ltd. 800–1708 Dolphin Ave., Kelowna and 221–3011 Louie Dr., Westbank and 200–270 Hwy 33 W., Kelowna and 1675 Richmond St., Kelowna and 1026 Avondale Pl., Kelowna and addresses unavailable Plaintiff: The Owners, Strata Plan KAS 3267 5025 Pritchard Dr., West Kelowna Claim: Damages for building deficiencies that caused a flood, damaging the units and the gymnasium. Defendants: North Van

Lawsuit of the week

Vancouver psychiatrist sues Ratemds.com for defamation Vancouver psychiatrist Grant M.P. Chernick is suing RateMDs Inc., two company employees and two unnamed comment posters over defamatory comments allegedly posted on Ratemds. com. In a statement of claim filed June 27 in B.C. Supreme Court, plaintiffs Chernick and his company, Dr. Grant M.P. Chernick, Inc., launched an action against Sunnyvale, CA-based RateMDs, its employees John Swapceinski and Joanne Wong, and online comment posters John Doe and Jane Roe. The plaintiffs are seeking general, aggravated, special, punitive or exemplary damages for libelous comments posted on the website. They are also claiming an injunction to restrain the defendants from any further publication of the defamatory expression cited in the claim, and an order that they remove a defamatory posting from their website. None of these allegations have been proven in court. At press time, no statement of defence had been filed.

Gemini Food Services Ltd. and Jorge Koc and Charlene Sapdaro 111–216 E. 6th St., North Vancouver and 201–585 16th St., West Vancouver Plaintiff: Gianni Filangeri 1140 Wendel Pl., North Vancouver Claim: Specific performance of a contract regarding the provision of cafeteria services, arising from the defendants’ failure to pay stipulated payments; damages; and an accounting. Defendants: Suen’s Management & Holdings Ltd. and 561803 B.C. Ltd. and ABC Co. and John Doe 701–601 W. Broadway, Vancouver and addresses unavailable Plaintiff: Vitantonio Spinelli, an infant by his litigation guardian Vito Spinelli 2081 E. 49th Ave., Vancouver Claim: Damages arising from a pan of hot liquid being spilled on the plaintiff; and damages in trust for the care and services provided by the plaintiff’s family. Defendant: Sun Life Assurance Company of Canada 2900–550 Burrard St., Vancouver Plaintiff: Awtar Singh Alamwala 340 Townline Rd., Abbotsford Claim: Under the Class Proceedings Act: damages for misrepresentation of an insurance policy the plaintiff purchased on the belief that premiums would not increase, when in fact they did; an order; and a declaration that the conduct of the defendant constitutes a deceptive practice within the meaning of the Business Practices and Consumer Protection Act. Defendant: Arcon Rock & Waterscapes Inc. 3200–650 W. Georgia St., Vancouver Plaintiff: Shafik Rajani 6789 Heather St., Vancouver

Claim: Damages for a flood. Defendants: Great West Fire & Safety Ltd. and Wolf Appliance, Inc. and Bradlee Distributors Inc. 128 E. 10th Ave., New Westminster and 150 E. Gilman St., Madison, WI and 208–4940 No. 3 Rd., Richmond Plaintiff: The Dirty Apron Cooking School Corp. 2400–200 Granville St., Vancouver Claim: Damages for the overflow of water and chemical fire suppressant from a fire suppression system. Defendants: Budget Brake & Muffler Distributors Ltd. and Lane Vance and Ian Lambert Swanson and J. Robert Duffy and Edward Victor Stacey and Marine Brake & Muffler Ltd. and Kelly Limebeer and Clarence Fehr and Lane Vance and Ian Lambert Swanson and J. Robert Duffy and Edward Victor Stacey in their capacity as Executors of the Estate of Warren Earl Swanson 202–5501 Kingsway, Burnaby and 620–1385 West 8th Ave., Vancouver Plaintiffs: Dan Hoy Gin and King Lui Gin 2700–700 W. Georgia St., Vancouver Claim: A declaration that the property is a contaminated site pursuant to the Environmental Management Act; a declaration that the defendants are responsible persons under the Act; a declaration that plaintiffs incurred costs of remediation for the property and that such costs were reasonably incurred; the reasonablyincurred costs; and damages. Defendants: Three Jay Holdings Ltd. and Scott Moir and Garry Todoruk and George Holmes and Sunny Jaura and Jeremy Wocknitz and Tyler Wocknitz and Paul Uppal and Lorne Pike and Jim Cessford and

Law 25

August 23–29, 2011 Business in Vancouver

Trouble The Corporation of Delta and John Does #1-10 and employees #1-10 Plaintiff: Her Majesty the Queen in right of the Province of British Columbia Claim: Health-care costs arising from assault of Garrett Burnett in a bar. Defendant: McCulloch Ventures Ltd. 4868 Delta St., Delta Plaintiff: Fleck Contracting Ltd. Box 95015, Vancouver Claim: A tracing, arising from misappropriated funds; and an order. Defendants: Dr. Navraj Singh Heran and Navraj Singh Heran M.D., Inc. 218–470 Granville St., Vancouver Plaintiff: Carol Wenman 7101 Levy Pl., Surrey Claim: Damages arising from a bungled surgery; loss of capacity and opportunity to earn income; and health-care costs. Defendants: Canadian Broadcasting Corp. and Kathy Tomlinson and Enza Uda and Chris Doe and Kim Roe and Chris Poe and Kim Yoe and Chris Sloe and Kim Loe 181 Queen St., Ottawa and 700 Hamilton St., Vancouver Plaintiffs: Fernando Casses and Dr. Fernando Casses Inc. 545 Front St., Quesnel and 1700–1075 W. Georgia St., Vancouver Claim: Damages for defamation; an injunction; and an order. Defendants: Loblaws Inc. dba Real Canadian Superstore and Westfair Foods Ltd. and Loblaw Properties West Inc. 1200–200 Burrard St., Vancouver and 3189 Grandview Hwy., Vancouver Plaintiff: Brenda Slay 1500–1055 West Georgia St., Vancouver Claim: Damages for injuries sustained when Slay slipped on a puddle of water and fell to the floor. Defendant: Canada Safeway Ltd. 1600–10095 W. Pender St., Vancouver Plaintiff: Lauren Foster 125–8051 Ryan Rd., Richmond Claim: Damages for injuries sustained when Foster slipped and fell on some liquid on the floor. Defendants: John Does #1-2 and ABC Co. Addresses unavailable Plaintiffs: 0819647 B.C. Ltd. and Husky Energy Inc. Box 48600, 1200–200 Burrard St. Claim: Damages for losses arising from Doe #1 driving a vehicle into a gasoline pump and causing a fire to start. Defendants: Jim Pattison Group Inc. and Jim

Pattison Industries Ltd. and Overwaitea Food Group Ltd. dba Save-OnFoods and Great Pacific Industries Inc. and SaveOn-Foods Ltd. 1800–1067 W. Cordova St., Vancouver Plaintiff: Jasmina Sulic 105–6950 Linden Ave., Burnaby Claim: Damages for injuries suffered when Sulic slipped and fell on a slippery substance on the floor. Defendant: KTL Transport Inc. and 588618 B.C. Ltd. and Supreme Trucking Ltd. 8335 Meadow Ave., Burnaby and 16160 Blundell Rd., Richmond Plaintiff: 1023277 Alberta Ltd. 1400-350 7 Ave. S.W., Calgary Claim: Damages for trespass. Defendant: Rogers Retail, a division of Rogers Communications Inc. 2900–550 Burrard St., Vancouver Plaintiff: Anterra Westbank Towne Centre Ltd. 300–550 Burrard St., Vancouver Claim: A declaration that the lease remains in full force and effect, arising from default; an order; and/or damages. Defendants: Whole Foods Market Inc. 2200–1055 W. Hastings St., Vancouver Plaintiff: Kristina Heath 2008 193 Aquarius Mews, Vancouver Claim: Damages for injuries sustained when Heath tripped and fell on some steel pipes that were secured to the floor in the checkout area. Defendant: Brazauro Resources Corp. 2900–550 Burrard St., Vancouver Plaintiffs: Dennis Moore and Alan Carter Large de Senhora de Alegria #1, Castelo de Vide 7320–187, Alentejo, Portugal and 4638 W. 5th Ave., Vancouver Claim: A declaration that the amending agreement is void upon payment by the plaintiffs of US$50,000 to Brazauro, arising from misrepresentation; or, a declaration that the Eldorado Acquisition constituted a triggering event of the First Brazauro Option and that by reason of Brazauro’s failure to exercise that option within the time limit, the option is terminated; or damages. Defendants: Revelstoke Mountain Resort Limited Partnership and Revelstoke Mountain Resort Inc. 1300–777 Dunsmuir St., Vancouver Plaintiff: Jeffrey Esfeld 7977 S.E. 67th St., Mercer Island, WA Claim: A declaration that the plaintiff has rescinded

the contract of sale and purchase, arising from the defendants’ breach of the Real Estate Development Marketing Act; or, a declaration that the contract isn’t enforceable; an order; or, damages. Defendants: Martin Christopher Sennott and Boughton Law Corp. 1000–595 Burrard St., Vancouver Plaintiff: Century Services Inc. 2900–550 Burrard St., Vancouver Claim: Damages for legal advice related to a financing agreement.

Defendant: Alan Shuster on his own behalf and in his capacity as representative of the former shareholders of Blast Radius Inc. Address unavailable Plaintiff: Blast Radius Inc. 2300–1055 Dunsmuir St., Vancouver Claim: A declaration that post-closing net operating losses carryforward and excluded expenses cannot be used in the calculation of operating profit after taxes related to an agreement to sell shares, or, an order the agreement be rectified to exclude the use of net operating

losses carryforward and excluded expenses in the calculation of operating profit after taxes; a declaration that the profit reflect a bonus accrual of 20%; and an order. Defendants: Hikaru Suzuki and Kikue Suzuki 4262 Cambie St., Vancouver Plaintiff: Polygon Pacific Homes Ltd. 20th floor, 250 Howe St., Vancouver Claim: A declaration the plaintiff accepted the counter offer before the acceptant time related to a property sale, or, the

plaintiff did not accept the counter offer by the acceptance time; a declaration the defendants waived the term in the counter offer that time was of the essence and permitted the plaintiff to accept the counter offer after the acceptance time; a declaration the plaintiff’s acceptance of the counter offer; a declaration the plaintiff’s interest in the property under the terms of the counter offer; and a declaration the plaintiff is entitled to specific performance of the terms of the counter offer. •

Giving Guide

2012

Regional PhilanthRoPic oPPoRtunities

Publication Date October 27, 2011

Promote your corporate giving philosophy and the non-profits you support to B.C.’s business leaders Business In Vancouver Media Group, publishers of Business in Vancouver newspaper, Western Investor and more than a dozen business-related magazines, are delighted to launch an exciting new print and digital publication called Giving Guide – Regional Philanthropic Opportunities. This informative glossy, full-colour magazine will showcase the diverse range of non-profit associations and the organizations that so generously support them here in B.C. Giving Guide provides both sponsors and non-profits with a great opportunity to share their story with the region’s business leaders. Non-profits play a huge role in improving the quality of life of residents throughout the region. This new essential reference tool – with yearlong presence in print and online will showcase a nonprofits compelling mission, progress, governance and many other initiatives and encourage other business leaders to support non-profit associations in our region.

Giving Guide

2012

Regional PhilanthRoPic oPPoRtunities

A guide to British ColumBiA's philAnthropiC Community • Non-profits • Foundations • Cultural organizations

Call today: For more information please contact Katherine Butler at 604-688-2398 or kbutler@biv.com.

For the record

Bertrand Plouvier is vice-president, product development, at Sirona Biochem

Dale Clarke is executive director of the Coquitlam Foundation

People on the Move Email your For the Record

the faculty of education at Simon Fraser University, has been re-elected chair of the 2011-12 Capilano University board of governors. Jane Shackell, a lawyer with Miller Thomson LLP, has been re-elected vice-chair.

Daily business news at www.biv.com August 23–29, 2011

Robin Brayne is re-elected chair of the Capilano University board of governors

•General

Finance •Biotech/Life Sciences • Ja m ie L ew i n ha s b e en

Pau l L a nd r y ha s been appointed vice-president of business development at GroupHEALTH Global Benefits Systems Inc. He is a member of the federal labour minister’s advisory council on labour and workplace affairs and was previously president and CEO of the BC Trucking Association.

•Education

Maurice Paquette has been appointed president and CEO of Coast Wholesale Appliances Inc. He was previously president and CEO of Hardwoods Specialty Products and Hardwoods Distribution Income Fund.

information to: fortherecord@biv.com. Please include a high-resolution, colour headshot where possible.

Bertrand Plouvier has been appointed vice-president, product development, at Sirona Biochem Corp. He was previously a consultant for Verona Pharma plc and associate director at Cardiome Pharma. Robin Brayne, former North Vancouver School District superintendent and director of graduate programs in

appointed interim CFO at Red Star Capital Ventures Inc., replacing A sha Re e ve s , w ho ha s re s i g ne d . L e w i n ow n s Best Fit Consulting, is CFO of Lucky Minerals Inc. and Arris Holdings Inc. and was previously CFO of Grand Peak Capital Corp., QMI Seismic I nc . a nd C L I Re s ou r ces Inc.

ANNOUNCEMENT

McGregor & Thompson Hardware is a leading distributor of doors, frames, hardware, and construction specialty products. We are very pleased to announce the following appointments:

MiKe LonGHi

SHawne Dery

KriSTi ScoTT

Vice President and Sr. General Manager – Mike Longhi, (Diploma of Technology, BCIT) Mike’s return to the McGregor Group in 2009 has added significantly to our ability and capacity to meet our industries complex, evolving and demanding needs. Mike is a truly strategic thinker and planner and his return is wholeheartedly endorsed by the McGregor Team. General Manager – Shawne Dery, AHC Shawne has over 40 years experience with McGregor and has played a major role in our strategic growth and development in Western North America. He is well known and respected by customer and suppliers alike as an exceptional problem solver and an industry icon. General Manager – Kristi Scott, AHC Kristi has successfully led our branch operations in Kelowna and now assumes responsibility for our Alberta division. Kristi is an instructor with the Door & Hardware Institute, contributing to the growth of our business and also the Architectural Hardware Industry as a whole.

All three of the appointments are now members of our corporate Senior Management team. The industry knowledge, business acumen, experience and energy they offer bodes well for them and the McGregor Group alike. We congratulate them all for their successes and achievements.

604.253.8252

mcgregor-thompson.com

•Human Resources

Armin Sahota has joined Angus One Professional Recruitment as a business development consultant. He was previously a sales representative with Homelife Benchmark Realty.

•Manufacturing

John Cherry has become majorit y ow ner a nd president of Canadian Rubber and Steel Ltd., taking over from Hank de Waal. Cherry was previously director of operations, Canadian divisions, at Port Townsend Paper Co. and general manager, Alberta, at Crown Packaging.

•Non-Profit

Da le C la rke ha s b e en appointed executive director at the Coquitlam Foundation, replacing Laurel Lawson, who has resigned. Clarke is a principal with TANCO Business Solutions and was previously an executive assistant at Canada Wide Media Ltd.

•Resources

Steven Craig has been appointed vice-president of exploration at El Tigre Silver Corp. He was previously vice-president of exploration for Gryphon Gold and regional exploration manager at Kennecott Exploration Co. R icha rd Bachma n ha s resigned as president and CEO of Capella Resources Ltd. but will remain as chief geological officer and a director of the board. Gerald Aberle has been appointed president and CEO. Aberle was previously vice-president of operations at Capella.

Armin Sahota joins Angus One Professional Recruitment as a business development consultant

David Poole, senior vice-president, B.C. & Yukon region, Scotiabank; Doreen Lam, fundraising officer, Tapestry Foundation; Michelle Cobb, manager, community engagement, sponsorships and special projects, B.C. & Yukon region, Scotiabank; Ann Corrigan, CEO, Tapestry Foundation; and Rob Wilkins, vice-president, downtown Vancouver and Northern B.C. district, Scotiabank

Mark Bolton, CFO of First Quantum Minerals Ltd., has resigned. Anthony Floyd and James Chapman have been appointed to the board of Expedition Mining Inc. Floyd is a director of Inca Pacific Resources Inc. and Toro Resources Corp. and was previously president of Inca Pacific and a founding member of the Lumina Copper Group. Chapman is a director of Golden Cross Resources. Bev Park has been appointed interim president and CEO of TimberWest Forest Corp., replacing Paul McElligott, who has resigned. Park is president and COO of Couverdon Real Estate and was previously executive vice-president and CFO of TimberWest. Jason Cunliffe and Martin King have been appointed vice-president of exploration and chief geologist, respectively, at Silver Bull Resources Inc. Cunliffe was previously chief geologist at Silver Bull, South American exploration manager for Hochschild Mining plc and Underworld Resources and senior geologist with IAMGOLD. King was previously a consultant at Silver Bull. William Pennstrom, Jr. has been appointed vicepresident, technical services, at Wildcat Silver Corp. He is principal of Pennstrom Consulting Inc. Pamela Lynch has been appointed CFO of Mill Bay Ventures Inc., replacing Lisa Sharp, who has resigned. Ly nc h w a s pre v iou s l y the company’s corporate secretary. Ricardo Duarte has been appointed to the board of Sunward Resources Ltd. He is a partner at Duarte Garcia Abogados and was previously Colombia’s chief trade negotiator and deputy minister for entrepreneurial development at the ministry of trade, industry and tourism. D av i d He y l h a s b e e n appointed vice-president, exploration, at Mexivada Mining Corp. He was previously exploration manager for Southern Peru Copper.

Bryan McPherson, Prostate Cancer Foundation BC; Barb Ruff, Scotiabank; and Peter Groenland, Westcoast Motorcycle Ride to Live

John Zbeetnoff has been appointed CEO of Skyline Gold Corp., replacing Cliff Grandison, who has stepped down and accepted the role of co-chair of the board. Zbeetnoff was previously on the company’s advisory board and was chief geologist at Skyline and Brett Resources. Augusto Baertl has been appointed an adviser to Luna Gold Corp. He is a director of Interbank, chair of the board of Gestora de Negocios and Agricola Chapi S.A. and was previously CEO of Compania Minera Antamina. Anna Ladd has been appointed CFO of Dorato Resources Inc., replacing Michael Kinley, who has stepped down. Ladd is CFO at Trevali Mining Corp. and was previously CFO at Kria Resources Inc., Transition Metals Corp., Ridgemont Iron Ore Corp., Logan Resources Ltd. and Sulliden Gold Corp. Ltd., Crowflight Minerals Inc. and group controller, North American operations, of Kinross Gold Corp. Cr a i g G eier h a s b e e n appointed CFO of Energold Drilling Corp., replacing Richard Younker, who has retired. Geier was previously vice-president of corporate development at the company. Scott Parsons has resigned from the board of Elissa

Resources in order to pursue other interests. Terr y Brow n has been appointed vice-president, ex plorat ion, at Ga lore Resources Inc. He was previously vice-president, exploration, for Duran Gold and Metalline Mining Co. and project manager with Eldorado Gold and Alamos Minerals. Gary Monaghan has been appoi nted CEO of UC Resources Ltd., replacing Jim Voisin, who will remain as president and COO. Monaghan is a director of Encap Investments Inc. and Wind River Energy Corp. and was previously president and founder of MDU Communications Inc. John Ryan, David Carbonaro and Wes Roberts have joined Nevada Exploration Inc. as director; corporate secretary; and adviser, respectively. Ryan is president of Nichange Enterprises Ltd., president and CEO of Spruce Ridge Exploration and interim CFO of Golden Dory Resources Corp. Carbonaro is a partner in the business law group of Heenan Blaikie LLP. Roberts is vice-president of Heenan Blaikie’s mining advisory affiliate and was previously vice-president of corporate development at Breakwater Resources Ltd.

•Telecommunications

Owen Gilbert has been appointed COO at Navigata

for the record 27

August 23–29, 2011 Business in Vancouver

John Evans, president, OPUS Hotels Group, and Martha Spears, director, major donors, legacy giving and signature events at UNICEF Canada

Communications 2009 Inc. He was previously senior vice-president of sales, marketing and customer service at the company.

Hats Off Busi ness i n Va ncouver

welcomes submissions from local small businesses and large corporations alike that demonstrate examples of corporate philanthropy and community involvem e n t i n t h e Va n c o u ver area. High-resolution images are also welcome. The 2011 Scotiabank Vancouver Ha l f Ma r at hon and 5K Charity Challenge helped ra ise $82 ,193.63 for t he Ar thritis Society B.C. & Yukon Division; $65,482.48 for the Ta p e s t r y F o u n d a t i o n for He a lt h C a r e ; a n d $18,745.99 for the Union Gospel Mission. Diamond Delivery donated $56,000 to Surrey Memorial Hospital to purchase a simulation baby that will allow the hospital to train doctors in the specialized care that babies require. Funds were raised through a 56 k m relay. Scotiabank donated $15,000 to the Westcoast Motorcycle Ride to Live in

Johnny Michel, managing director of CBC BC, and Adrienne Bakker, CEO, Royal Columbian Hospital Foundation

Above: Tom Lively, president and CEO, Fraser River Pile and Dredge (FRPD); Mike BevanPritchard, vice-president of major projects and business development, FRPD; and Gordon Stewart, director of leadership giving, Royal Columbian Hospital Foundation

support of prostate cancer research and community outreach. T he OPUS Va nc ouver Hotel donated $10,000 to U NICEF Canada toward the Unite for Children, Unite Against Aids campaign. Fr a ser R iver Pi le a nd Dredge (GP) Inc. donated $5,000 to the Royal Columbian Hospital Foundation as a si lver-level sponsor of its SHINE Gala. The foundation also recognized CBC BC with a plaque for its sponsorship of the gala. •

Bill Mollard and Genesa Greening, Union Gospel Mission (UGM); Michelle Cobb, manager, community engagement, sponsorships and special projects, B.C. & Yukon region, Scotiabank; and Brendan McLellan, top individual fundraiser for the UGM

Legal Assistant The Tsawwassen First Nation has an exciting opportunity for a full time regular Legal Assistant to assist with litigation and solicitor files, prepare documents and other correspondence, filing, arrange meetings and travel or conference attendance, prepare expense reports, access and monitor document data bases and collate documents, maintain “bring-forward” system, and other duties as required. Requirements: Legal Assistant Certificate, 2-3 years experience, working knowledge of Word 7, Excel, Publisher, Summation or Ringtail software, teamwork skills, familiar with “bring-forward” systems, and able to work 8:30 – 4:30 p.m.

Careers

• www.employmentinvancouver.com • E-mail: employpaper@biv.com • Tel: 604-688-8828 • Fax: 604-669-2154

Work With us & groW a career Glacier Media Group is growing. Check our job board regularly for the latest openings: www.glaciermedia.ca/careers

Submit cover letter and resume by August 29, 2011, to: Saira Bradley Human Resource Manager 1926 Tsawwassen Drive Tsawwassen BC, V4M 4G2 Fax: 604-943-9226 E-mail: sbradley@tsawwassenfirstnation.com Short-listed applicants will be contacted for interview.

VP, Corporate Services/CFO BC Safety Authority

All qualified applicants are encouraged to reply, in confidence, by quoting file #14468 to:

search@janetdavid.com We thank and acknowledge all applicants and will proactively contact those selected for interviews.

+ asso ciates in c.

he BC Safety Authority (BCSA) delivers one of the most comprehensive, cost-recovered technical public safety systems in North America. As the Province’s delegated, non-profit authority, the BCSA mandates the safe installation and use of technical equipment. With a commitment to collaboration, fairness, consistency and a risk-managed approach to regulatory oversight, the BCSA promotes safety through research, education, issuance of permits and licenses, development of policies and safety standards, and the monitoring and enforcement of compliance to safety standards across a wide variety of industries and sectors. The BCSA maintains a central office in New Westminster and delivers services from 28 regional and community offices located throughout the province. Recognized as one of the top 100 Employers in Canada, the BCSA employs approximately 300 persons. The BCSA wishes to attract a proven leader to the position of VP, Corporate Services/CFO. Based in New Westminster, this role reports to the CEO and works collaboratively with other members of the executive team, the Board of Directors and a wide array of external stakeholders. The position guides a team of five direct reports. The role is actively involved in formulating and executing corporate strategy and has key accountabilities for risk management, financial forecasting, planning and reporting, asset management, budgets and controls, and information technology. The ideal candidate is a university graduate and strategic financial professional with a recognized accounting designation and at least 10 years of progressive management experience in complex organizations. The candidate must have experience in leading change and in working with Finance and Audit Committees of Boards of Directors. The candidate must have a track record of providing effective and integrative leadership in asset and risk management, finance, management and external reporting, financial controls, asset management and information systems. A flexible thinker with the ability and courage to contribute and to respectfully confront to move issues forward with transparency, the ideal candidate is a decisive team player who enjoys coaching and mentoring others. The BCSA offers competitive compensation and benefits and an engaging culture. For more information about the organization, please visit www.safetyauthority.ca.

Comment

Daily business news at www.biv.com August 23–29, 2011

letters

The book on libraries as a valued and viable public service in B.C. is far from closed Re “Of city security, library futures and rancorous referenda” (Peter Ladner’s At Large column – issue 1137; August 9-15) Peter Ladner’s recent report on the impending death of the library is, as they say, greatly exaggerated. Access to information has never been more important, and ensuring that Vancouverites have reliable and good-quality information is the job of the Vancouver Public Library (VPL). Step inside any of VPL’s 21 branches today and you will see a vibrant, relevant community hub, where on a typical day nearly 21,000 people walk through the doors to gain access to journals, newspapers, databases, electronic materials and, yes, books, in 14 languages. Many also participate in the wide variety of programs offered freely by VPL – learning to use the Internet; learning how to conduct job searches; learning to read to their children. Libraries continue to be an important and efficient community resource. Last year, the VPL invested the collective resources of Vancouverites in purchasing over half-a-million dollars of electronic information and materials. This information is not freely available on the Internet and would not be accessible to a great many residents if not for the library. The library also continues to buy books and other printed materials that are not available in electronic formats. A small sample of the kind of electronic materials the VPL purchases on behalf of Vancouverites includes the College Blue Book, Business Plans Handbook, Consumer Reports, Market Research Reports, the Gold Book Vehicle Value Guides, the Canadian Pharmacists Association Compendium of Pharmaceuticals, the Canadian Parliamentary Guide and Automotive Repair Reference Manuals. Libraries are not going the way of video stores. For as long as people need access to information, learning and culture, libraries have a role to play in every neighbourhood. Catherine Evans, chairwoman, Vancouver Public Library board of trustees

More happy campers tapping into solar power Anyone who has been camping lately will have noticed that many campers are starting to use solar-energy panels. These panels are not cheap, but they are clearly making inroads through a growing awareness and interest in renewable energy, combined with marketplace innovation and ingenuity. Battery storage is also starting to make great strides and prices are likewise coming down, and for the same reasons. Just look at the battery in your cellphone compared with the first cellphone you may have owned. This is good news for people in those parts of the world (even here, in remote B.C. communities) where there is no electricity grid and where the electricity they do have typically comes from diesel generators. Combining a local renewable energy source with battery storage has the potential to greatly improve the lives of these people and eliminate their dependence on diesel power. Obviously, in hot, dry places, solar power makes sense as a renewable energy source and it could be used to pump water for improved irrigation and improved crop yield. Equally obvious, in wet, windy places such as can be found here in B.C., hydro and wind energy make sense. These renewable energy sources could improve living conditions in remote B.C. communities and expand economic opportunity and job possibilities. And all of this is becoming possible through the innovation and ingenuity that thrives in a free-market environment. Properly motivated, the free market is an unrivalled tool for bringing down costs, improving quality and increasing supply. Solar panels for campers and ever-smaller, more-powerful batteries for cellphones are just a small taste of what the free market has in store for us as awareness and interest in renewable energy continues to increase and drive demand in a changing global economy. Yolanda Lora Vilchis, Surrey

What’s your opinion? BIV welcomes readers’ opinions. All letters, including those sent by e-mail, must include the author’s name, address and daytime telephone number. Business in Vancouver, 102 East 4th Avenue, Vancouver, B.C. V5T 1G2. Fax: 604-688‑1963. E-mail: news@biv.com. We reserve the right to edit for brevity, clarity and legality.

Cartoon by Rice

At Large

Peter Ladner Lamenting the loss of a sustainability visionary

orporate sustainability pioneer and conservative southern gentleman Ray Anderson died earlier this month. Such a loss. “There was no one remotely like him, nor will there ever be,” said author Paul Hawken in his eulogy. Hawken’s profound respect was shared by business leaders around the world who took inspiration from Anderson’s transformation of Atlanta-based Interface, Inc., the world’s largest carpet manufacturer, into a company that took full responsibility for its impact on the world. One of his many awards was a Globe Environmental Excellence Award for Corporate Competitiveness presented at Globe 2006 in Vancouver. It was after reading Hawken’s book The Ecology of Commerce that Anderson experienced what he described as a “spear in the chest” epiphany. He suddenly saw himself, by his own reckoning, as “a plunderer of the earth,” and he became determined to change that. “Theft is a crime,” Anderson told a TED conference in 2009. “And the theft of our children’s future will someday be considered a crime.” With the same industrial and systems engineering savvy that he used to found Interface in 1973 as a producer of the first free-lay carpet tiles in America, he set the company on a course to climb what he called Mount Sustainability. “If the CEO doesn’t take the lead, it won’t happen. “In 1994, at age 60 and in my company’s 22nd year, I steered

Interface on a new course – one designed to reduce our environmental footprint while increasing our profits,” Anderson said. “I wanted Interface, a company so oil-intensive you could think of it as an extension of the petrochemical industry, to be the first enterprise in history to become truly sustainable – to shut down the smokestacks, close off its

“If the CEO doesn’t take the lead, it won’t happen” – Ray Anderson, CEO, Interface

effluent pipes, to do no harm to the environment and take nothing not easily renewed by the earth. Believe me when I say the goal is one enormous challenge.” Today Interface is on track to become a completely closed-loop business system, taking no more from the earth than it returns. Anderson says the savings from waste reduction alone have paid for the extensive costs of the company makeover. It has done that while growing financially to a profitable billion-dollar multi-national corporation, and being named by Fortune as one of the “Most Admired Companies in America” and the “100 Best Companies to Work For.” “People called Ray a dreamer,” said Hawken. “To be sure, he was, but he was also an engineer. He had definitely seen the mountain, but

he also dreamed in balance sheets, thermodynamics and resource-flow theory. He dreamed a world yet to come.” To cite just one example, Anderson sent his designers into the forest to learn from nature in the spirit of “biomimicry.” They came up with a design for interchangeable carpet tiles that mimicked the chaotic mix of diversity on the forest floor, where, as Anderson tells it, “you can pick up a rock here and drop it there and you can’t tell you’ve changed a thing.” Called Entropy, that product line became the company’s best-selling product. “Sustainability is now the brand for Interface,” Anderson said in a 2004 interview with www.greenbiz. com. “What’s in a brand? Well, for a company there’s hardly anything more important than its brand. And sustainability is now a brand that’s recognized in the marketplace and there is a pre-disposition on the part of lots and lots of designers that deal with us because of that.” Customers were attracted because of the passion and deep sincerity to his cause that Anderson infused in all his employees. They wanted to be part of it. Said Hawken: “He used business as a means to educate and transform, but his life was not about money or carpets. Ray’s life was about the sacred. His covenant was with God; the marketplace is where he laboured.” • Peter Ladner (pladner@biv.com) is a founder of Business in Vancouver and a former Vancouver city councillor. His book, The Urban Food Revolution: Changing the Way We Feed Cities, will be published by New Society in October 2011.

President and Interim Publisher: Paul Harris; Editor: Timothy Renshaw; News Features Editor: Baila Lazarus; Editorial Proofreader: Noa Glouberman; Online Editor: Nelson Bennett; Staff Writers: Nelson Bennett, Richard Chu, Jennifer Harrison, Glen Korstrom, Joel McKay, Jenny Wagler; Art Director: Randy Pearsall; Photographer: Dominic Schaefer; Production Manager: Don Schuetze; Production: Rob Benac, Carole Readman, Natalie Reynolds, Soraya Romao, Annette Spreeuw; Director Sales and Marketing: Cheryl Carter; Marketing & Events: Azadeh Hollmann, Paige Millar; Display Advertising Sales: Janice Frome, Blair Johnston, Michele MacKenzie, Pia Tomlins, Chris Wilson, BIV Magazines Publisher: Paul Harris; Editor: Naomi Wittes Reichstein; Sales Manager: Joan McGrogan; Advertising Sales: Lori Borden, Corinne Tkachuk; Administrator: Katherine Butler; Senior Researcher: Anna Liczmanska; Research/Verification: Caroline Smith; Director, Audience Development: Todd Babick; Subscription Sales Supervisor: Navreet Gill; Circulation Manager: Veera Irani; Subscription Sales: Gerard Veeneman; System Administrator: Les Valan; Accounting: Denise Moffatt; Credit Manager: Yvonne Posch Business in Vancouver is published by BIV Media Limited Partnership at 102 East 4th Avenue, Vancouver, B.C. V5T 1G2. Telephone 604-688-2398; fax 604-688-1963—For reprints: Veera Irani 604-608-5115 E-mail addresses: subscribe@biv.com, ads@biv.com, news@biv.com, letters@biv.com TWITTER@BIZINVANCOUVER • Www.biv.com • www.bivinteractive.com

comment 29

August 23–29, 2011 Business in Vancouver

◀Head to Head▶

“Should spending cuts and debt reduction be the top priorities for governments in Canada?” Jim Sinclair

Niels Veldhuis

Canada’s economy needs more job creation not more program cuts

he shock-and-awe folks are at it again, but this time the targets are ordinary working families. Whether you live in the United States, Europe or Canada, the last several weeks have seen a remarkable full-court press by fiscal hawks arguing strenuously for governments throughout North America and Europe to make debt and deficit their only priority. This “shock doctrine” approach to economic policy asserts that the economy requires fiscal constraint if growth is to move into high gear. It’s an approach that Stephen Harper is only too willing to embrace. On his return trip from celebrating the great accomplishments of free trade with Colombia and Honduras – two countries that have terrible track records on human rights, a point Harper was careful to ignore in his praise of these two countries – the prime minister was unambiguous about his views on the deficit when he said the “deficit cutting would stimulate economic growth.” And some day pigs will fly, too, but until then, the stark reality for more than one-anda-half-million Canadians is that the economy grows at a snail’s pace and unemployment remains stubbornly high. In this new reality, good family-supporting jobs, especially in the manufacturing sector, are more vulnerable than ever. Making matters worse, the Harper government wants to eliminate even more jobs by imposing balanced budget priorities at a time when it should be supporting the economy through job creation, not sabotaging it with program and spending cuts. Canadians aren’t the only ones being bullied into fiscal restraint. In the United States, for example, we had the spectacle of the farright Tea Party loyalists in the U.S. Congress using the threat of a credit crisis to try to reverse modestly progressive improvements in social programs – particularly health care – made by the Obama administration over the last two years. Decades of tax concessions to the wealthy in that country are not only distorting the distribution of incomes in the U.S. – the top 1% of families in terms of wealth account for 30% of all incomes in the U.S. – they are undermining the ability of the U.S. government to finance a broad range of commitments to provide infrastructure and programs to its citizens. Canada, by comparison, is not in the same fiscal straitjacket as its neighbour to the south, but that hasn’t stopped either the

prime minster or his finance minister from deploying the same Tea Party logic to justify restraint here. Canada does not have a deficit or debt problem. The federal debt as a share of GDP was 29% before the recession, one of the lowest levels among major economies. Despite three years of deficit due to the recession, our federal debt today still stands below the level of 2005-06, and is much lower than in Japan, the U.S. or major European economies. Canada’s federal deficit is low and falling. It topped out at 3.6% of GDP in 2010. It has been falling quite rapidly to a projected 2.5% of GDP in 2011. That trend is expected to continue with the deficit accounting for 1.7% of GDP in 2012. What deficit does exist is there because of

Canada does not have a deficit or debt problem tax cuts, not program spending. Canada’s corporate tax rate is now 16.5%, down from 22% in 2006 and far below the comparable U.S. rate of 35%. In January 2012, the Canadian rate is set to fall again to 15%. Despite the tax cuts, real business investment did not rise as a share of our economy. Continuing corporate tax cuts have been pitched as a way to stimulate investment and job creation, but the reality is that the lion’s share of these cuts are going to banks and resource companies, which are already profitable and have shown no inclination to make major investments in job creation. In fact, take away the corporate tax cuts introduced by Harper in 2006 and there would be no deficit in Canada today. That’s how distorted his policies have become. However, none of these facts are about to change Harper’s well-worn narrative. He wants federal spending cut and with it all the valuable programs and services it provides. He wants to reshape our country and economy in ways that may put a smile or two on the face of bankers, but will do little to deliver real prosperity. Canadians deserve far better than what Harper is serving up, but with his current majority, shock and awe will be on the menu for some time to come. • Jim Sinclair is president of the British Columbia Federation of Labour. He can be reached at exec@bcfed.com. Head to Head runs monthly.

Government must cut spending to stimulate economic growth

ith the United States credit rating recently being downgraded and some European countries teetering on the verge of debt crisis, Canadians can rightly be proud of the country’s AAA credit rating. That said, Canadians should not get too complacent. With growing concerns about a slowing global economy, Canadian politicians should put forth genuine plans to restore balance to the nation’s finances. Consider that the federal government and all provinces (save Saskatchewan and Newfoundland) are currently borrowing to spend. Specifically, the federal government’s deficit will hit nearly $30 billion in 2011-12, while the provinces will collectively borrow another $25 billion. As a result, the federal debt has increased by more than $120 billion since 2008-09 and will reach $611 billion by 2015-16. Likewise, provincial debt has increased by nearly $145 billion since 2008-09 and stands at $487 billion. When combined, total federal and provincial debt is more than $1 trillion. While plenty of empirical evidence shows a negative relationship between government debt levels and economic growth, a close look is warranted at Public Debt and Growth. The recent International Monetary Fund study examined the relationship between public debt and economic growth for a group of advanced and emerging countries over almost four decades. It found that an increase in a country’s debtto-GDP ratio leads to a decrease in per-person income growth. Another important recent study, Growth in a Time of Debt, by University of Maryland professor Carmen Reinhart and Harvard University professor Kenneth Rogoff, found much of the same: persistent deficits propel public debt to levels that impede economic growth. The problem is that while most Canadian governments have plans to balance their budgets, most are still planning deficits for the foreseeable future. For example, it will take B.C. three years to balance its budget, five years for the federal government and seven years for Ontario. Additionally, the budget plans of many Canadian governments do not adequately account for risks that could worsen their position. Take the federal government’s plan to balance its books in five years. To get there,

the Conservative government projected revenue to grow at a robust average rate of 5.6% over the next five years with plans to hold program-spending increases to an average rate of 2%. A plan to balance the budget that relies on strong revenue growth is one with significant downside risk and little to no upside potential. Lower than forecasted revenue growth could result in larger deficits for a much longer time period and significantly more government debt. That’s what happened in the 1980s and early 1990s when successive federal governments failed to balance the budget by trying to slow the growth in spending while hoping for higher revenue. The result was ongoing deficits, mounting debt and, ultimately, a downgrade in Canada’s credit rating in 1994. Unfortunately, history could repeat itself as current governments are facing similar risks with signs of a slowing global economy that would negatively affect government revenue and plans to slay deficits.

An increase in a country’s debtto-GDP ratio leads to a decrease in per-person income growth To reduce the frailty of current fiscal plans, Canadian governments must quickly close their budget deficits. The best deficit-reduction strategy, according to research, is to cut spending. In a recent study entitled Large Changes in Fiscal Policy: Taxes Versus Spending, renowned fiscal policy expert and Harvard professor Alberto Alesina examined data from 21 countries (including Canada) from 1970 to 2007. He found that large reductions in budget deficits that were driven by spending cuts were much more effective than tax hikes for reducing government debt and avoiding economic downturns. If our Canadian politicians want to stimulate economic growth, they should rein in spending, reduce deficits and bring down debt. • Niels Veldhuis (nielsv@fraserinstitute.ca) is vice-president of research at the Fraser Institute. This commentary was co-written by Charles Lammam, the institute’s senior policy analyst.

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Breakfast, Luncheon, Dinner Meetings Vancouver AM Tourism Association Meeting August 26, 2011, 7:00 AM: Speaker: Peter Male, PNE Vice-President of Sales & Marketing. Join us for breakfast plus a private viewing of the 2011 PNE Prize Home. $28 members, $38 non-members, $23 students (+HST). PNE Momiji Gardens - 2901 East Hastings Street. Vancouver. 604-738-5506; office@vancouveram.ca. www. vancouveram.ca. The Honourable Michael de Jong, Minister of Health, Province of British Columbia September 8, 2011, 11:45 AM: The Honourable Michael de Jong, Minister of Health, Province of British Columbia. $79 members and guests/ $110 future-members (+HST). Coast Coal Harbour Vancouver, Coal Harbour Ballroom, 1180 Hastings St West. Vancouver. reservations@boardoftrade.com. www.boardoftrade.com. Economic Outlook by Scotiabankâ&#x20AC;&#x2122;s Chief Economist September 13, 2011, 5:45 PM: Scotiabankâ&#x20AC;&#x2122;s Chief Economist provides an update on his teamâ&#x20AC;&#x2122;s economic forecasts and the current state of the world economy. $30 for first time guests. Coyote Creek Golf Course, 7778 152 Street. Surrey. ldaschuk@telus.net. www.fvepc. com. You and UBC: A Partnership That Can Transform Our World S eptem ber 14 , 2011, 11:45 AM: Professor Stephen Toope, President & Vice-Chancellor University of British Columbia. $69 members and guests/$96 futuremembers(+HST). The Fairmont

Waterfront, Waterfront Ballroom, 900 Canada Place Way. Vancouver, BC. reservations@boardoftrade. com. www.boardoftrade.com. Success Through Motivation: How an Inspired Workforce Helps Your Bottom Line September 20, 2011, 11:45 AM: Tracy Redies, President and CEO, Coast Capital Savings Individual tickets: $69 members and guests/ $96 future members. The Sutton Place Hotel, Versailles Ballroom, 845 Burrard Street . Vancouver, BC. reservations@boardoftrade.com. www.boardoftrade.com. Tough Talk for Tender Causes: Survival Mentality - Whatâ&#x20AC;&#x2122;s Really Essential to Your Organization? September 28, 2011, 3:00 PM: Lisa Martella, Executive Director, A Loving Spoonful (TBC), Jeff Norris, Chief Advancement Officer, Office of Advancement Kwantlen Polytechnic University, Richard Pass, Chief Executive Officer, Ronald McDonald House BC and Yukon. $49 members and future-members +HST. Pan Pacific Vancouver, Crystal Pavilion, 999 Canada Place. Vancouver, BC. reservations@boardoftrade.com. www.boardoftrade.com. Boughton/BCLI Great Debate October 26, 2011, 5:00 PM: The GREAT debate offers a fun, engaging evening of dinner and light-hearted debate. This yearâ&#x20AC;&#x2122;s debate resolution: â&#x20AC;&#x153;Resolved that the torts of champerty and maintenance should be abolished in British Columbia.â&#x20AC;? $145 per person/$1,100 per table of 8. Pan Pacific Waterfront, 300-999 Canada Place. Vancouver. Elizabeth Pinsent - 604.822.0142 / epinsent@bcli.org. http://www.bcli.org/news/events/ great-debate-2011.

Conferences, Conventions, Tradeshows Ozzie Jurock Real Estate OUTLOOK 2012 Saturday, September 10 -Sunday, September 11 2011, 9:00am -3:00pm. Every day Since its inception The Jurock Real Estate Insider REAL ESTATE OUTLOOK conference has established itself as the quintessential real estate

outlook for the serious investor or homeowner. Fine central venue, seasoned presenters and quality exhibitors. Renaissance Vancouver Hotel, Harbourside Ballroom (2nd Floor), 1133 West Hastings St., Vancouver. $97 Contact: Cory Goodine: 604-691-2722, cory. goodine@renaissancehotels.com. www2.jurock.com/outlook2012/ index.html The World MoneyShow Vancouver September 19, 2011, 8:30 AM: Learn how to best position your portfolio for profit in 2011 and beyond. As this new era of investing unfolds, smart investors know itâ&#x20AC;&#x2122;s imperative to stay informed and educated. Free admission. Vancouver Convention Centre, 1055 Canada Place . Vancouver. 800-970-4355. http:// www.moneyshow.com/tradeshow/ vancouver/world_moneyShow/main. asp?scode=023199. 7th ANNUAL Connections to Employment JOB FAIR September 21, 2011, 10:00 AM: Exhibitors include WorkSafeBC, Sears, Staples, Canada Safeway, Home Depot, London Drugs, Dairy Queen/Orange Julius, Coast Plaza Hotel, Edgewater Casino, T & T Supermarket, Natural Factors, UPS Canada, Spectra Energy, JW Research, TD Canada Trust. Admission is free. Vancouver Public Library, Library Square, 350 West Georgia Street. Vancouver. Carol Cordeiro, Marketing Specialist, PICS Vancouver, 604-324-7733, carol.cordeiro@pics.bc.ca. www. pics.bc.ca. Internet Marketing Conference â&#x20AC;&#x201C; IMC Vancouver October 03-04 2011, 7:30am-6:00pm. Every day. Expand your knowledge, improve your skills and become a better manager of digital media, marketing & communications. Connect with an international community of digital marketers. Renaissance Vancouver Hotel: 1133 West Hastings St, Vancouver. 2-day pass $995 until Sept 9th; $1195 after. Contact: Registration Support: regvancouver@risingmedia. com 1-877-883-7345 www. internetmarketingconference.com/ vancouver/event-home

APEGBC Annual Conference & AGM October 13, 2011, 8:00 AM: Join us as we celebrate accomplishments in the professions of engineering and geoscience. As BCâ&#x20AC;&#x2122;s premiere engineering and geoscience event, the Annual Conference and AGM are sure to offer participants valuable opportunities to network with leading professionals in these industries. Price varies. Delta Grand Okanagan Resort and Conference Centre. Kelowna, BC. Shirley Chow: 604.412.4865, ac2011@apeg.bc.ca. http://www.apeg.bc.ca/ac2011/. HR Tech Group: Human Capital Symposium October 26, 2011, 8:00 AM: Tech industry event on best HR practices to grow your business (revenue, talent, leaders). Featuring keynote Don Bell, Co-founder of Westjet Airlines. $275 before Sept 30th; $350 after. Sutton Place Hotel, 845 Burrard St. Vancouver. Allison Rutherford, HR Tech Group: 604-8742653, arutherford@hrtechgroup. com. www.hrtechgroup.com.

Courses, Workshops, Seminars Canadian Securities Course (CSC) September 8, 2011, 8:00 AM: Be qualified to apply for licensing as a mutual funds salesperson. Sign up for the CSC at Ashton College. Contact an Admissions Adviser now. Ashton College. Vancouver. 604899-0803 / info@ashtoncollege. com. www.ashtoncollege.com.

make managers more effective and turn business success into personal wealth. Speakers: Dave Lee and Mark Wardell No Charge. 100 - 1676 Martin Drive. White Rock. dave_lee@scotiamcleod.com. www. dave-lee.ca. CTT+ Train the Trainer Course September 19, 2011, 8:30 AM: Anybody who needs to train groups of people in an effective and efficient manner can benefit from this course. For those looking to show instructional presentation skills for their MCT designation. $995/person. 555 Seymour Street. Vancouver. Bart Simpson: 888480-1629, bart@trab.com. www. trab.com. HR Metrics Benchmarking Service - Demo & Overview September 28, 2011, 9:00 AM: If you are looking to learn more about the HR Metrics Service, sign up for this 1-hour demo, Complimentary. Online. Liz Whalley, Metrics Specialist, lwhalley@bchrma.org. http://www. bchrma.org/content/events/ls/ details.cfm?EventID=035-252. Applications in Sustainable Community Development September 30, 2011, 9:00 AM: Through field trips and presentations by sustainability project champions, you will explore the application of sustainability principles in a variety of programs, projects and business ventures. $600. 515 W. Hastings St. Vancouver. Joshua Randall, 778782-5254. http://www.sfu.ca/city/ course2popup.htm.

www.bivdatebook.com some experience. Topics include Bullet Proof Portfolios, The Bond Markets, The Equity Markets & Market Strategies & Tactics. Complimentary seminars. Suite 700 - 609 Granville St. Vancouver. mevans@dundeewealth.com or 604-895-3478. www.jenniferfabre. com.

Gala Events Big Sisters Gala October 6, 2011, 5:30 PM: Join Big Sisters for an inspiring evening as we raise funds to help match 180 girls on the waitlist with a supportive mentor. The event will feature a champagne reception, auctions, dinner and live entertainment by Paramount. $250. Pan Pacific Hotel (300 - 999 Canada Place). Vancouver. Kelly: 604-873-4525 x302 or kmorrison@bigsisters. bc.ca. www.bigsisters.bc.ca.

Golf Tournaments Business Leaders Golf Tournament August 23, 2011, 12:00 PM: Play golf with the Vancouver business community including senior executives, deal-makers and professionals involved in corporate growth, development, and mergers and acquisitions. A full day event including golf, dinner and great prizes! $175 BIV Subscribers, ACG or TMA members/$200 general public. University Golf Club, 5185 University Blvd. Vancouver. Azadeh Hollmann: 604.608.5197, ahollmann@biv. com. https://www.eplyevents.com/ BusinessLeadersGolfTournament.

Foundation in Sustainable Community Development September 15, 2011, 9:00 AM: This course addresses the confusion surrounding sustainability and presents the certificateâ&#x20AC;&#x2122;s vision of sus t aina b le co m m u nit y development and related principles. $900. 515 W. Hastings St. . Vancouver. Joshua Randall, 778-782-5254. http://www.sfu.ca/ city/course1popup.htm.

Bullet Proof Your Portfolio and Sleep at Night October 5, 2011, 6:45 PM: Jennifer Fabre Investment Advisor DWM Securities Inc presents a Bullet Proof Portfolio for experienced investors. This seminar is ideal for those seeking: preservation of capital, lower volatility, regular income and performance in difficult markets. Complimentary Seminars. Suite 700 - 609 Granville St. Vancouver. mevans@dundeewealth.com or 604-895-3478. www.jenniferfabre. com.

Achieving Growth and Building Value: Strategies for Business Owners September 15, 2011, 6:30 PM: Learn how to operate more efficiently, make better business decisions,

Bullet Proof Investment Seminars October 15, 2011, 9:45 AM: Jennifer Fabre, Investment Advisor, DWM Securities Inc. presents a 4 Part Series suitable for investors with

Vancouver AMâ&#x20AC;&#x2122;s 35th Birthday Celebration September 23, 2011, 5:00 PM: Celebrate Vancouver AMâ&#x20AC;&#x2122;s 35th Birthday! You are invited to Va n c o u v e r A M To u r i s m Associationâ&#x20AC;&#x2122;s Reunion of the Decade. Entertainment by Dal Richardsâ&#x20AC;&#x2122; Trio $50 + HST. Cash Bar. Terminal City Club, 837 West Hastings Street. Vancouver. 604738-5506; office@vancouveram. ca. www.vancouveram.ca.Â â&#x20AC;˘

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Profile

August 23–29, 2011 Business in Vancouver

Jamie Garratt

By Nelson Bennett

Social work

Richard Lam

Jamie Garratt’s Vancouver-based marketing agency champions social media and the digital arena for its rapidly expanding roster of clientele in North America

Idea Rebel president Jamie Garratt:“I kick myself every once in awhile because we didn’t stick with it. We just didn’t realize what the social part of the Internet was going to do”

ith his skateboard and plaid shirt, Jamie Garratt, president of Idea Rebel, looks more like he belongs on stage playing guitar for power-pop band Exit This Side than he does in the boardroom of an up-and-coming digital marketing agency. Wait a minute. Actually, he does play guitar (and sings) in power-pop band Exit This Side, which, incidentally, had a top-40 hit (One Night Stand) in 2009. The band has an eye-catching website, as one might expect. After all, Garratt’s company specializes in web, mobile and social media campaigns. It’s the band’s Myspace site, however, that provides an interesting sidebar to Garratt’s story. In 1998, while still in university, Garratt and his brother, Jason, developed www.expresstunes.com – a social media networking site for musicians. They sold the domain in 2001 and went off to pursue jobs in the high-tech industry. “Two years later, Myspace popped up,” said Garratt, 33. “I kick myself every once in awhile because we didn’t stick with it. We just didn’t realize what the social part of the Internet was going to do.” Now he knows. And he’s making up for that miscalculation by riding the social media wave with a

vengeance. (Yes, he surfs, too.) When Facebook came out with branded pages, Garratt saw an opportunity. Idea Rebel developed a content management system that companies could use to manage their branded Facebook pages, including online contests, and then gave it away to clients. Idea Rebel works like any other advertising or marketing agency, charging clients for coming up with branding and marketing ideas and executing them. Unlike traditional advertising companies, however, Idea Rebel doesn’t do radio, TV or print campaigns. It focuses strictly on web, mobile and social media. With just 15 employees, Idea Rebel is tiny compared with most advertising and marketing agencies. But there’s a key advantage to being so small: it can get things done quickly and for much lower costs. “We delivered our first Facebook integrated campaign within, like, three weeks, where some companies were just beginning to understand what that was,” Garratt said. Born in Toronto, Garratt moved to North Vancouver with his parents when he was 16 and later attended the University of British Columbia, where he started out studying commerce. But he switched to computer science, when he saw what the dot-

com sector was doing. His first job was with Top Producer Systems, which made real estate software. He was later recruited by digital marketing agency Blast Radius. Garratt started in quality and assurance but ended up in business development, where he excelled. “He’s very business savvy,” said David Rossellat, who worked with Garratt at Blast Radius and now works for Electronic Arts (EA) as director of web publishing. “He understands the bottom line. It’s not just coming up with the next cool thing – it’s also understanding how to turn that next cool thing into a profitable venture.” In 2007, Garratt left Blast Radius after the company was bought out by WPP Group plc and in 2008 cofounded Idea Rebel with two other Blast Radius alumni: Aimee Croteau (creative director) and Neil Hayes (vice-president of operations). “I always wanted to start my own little agency,” Garratt said, “and it was perfect timing for it.” They worked out of Garratt’s apartment until the company had enough cash flow to move into its current office in Gastown and start hiring. That approach is fundamental to Garratt’s business philosophy. “We won’t grow beyond the means of what we can provide

Goal: To double the size of his company by the end of 2012 and to seed Idea Rebel branches in creative hubs around the world Assets: A wealth of creative and technological abilities in the web-technology sector Yield: A new business model for digital marketing

[through revenue],” Garratt said. “This business has been profitable since Day 1.” The company is on track to generate revenue of between $1.6 million and $2 million this year. Garratt said it hopes to double that number in 2012. In its first year, the small and agile Idea Rebel launched 25 social media campaigns for clients and has gotten all of its work through word of mouth and the Internet. Idea Rebel landed a major account when EA Sports hired it to come up with Facebook fanpage campaigns for some of its console games, including FIFA, NHL 12 and Madden 12. EA Sports’ Facebook fanpage boasts roughly 13 million fans. More recently, Idea Rebel landed a contract to handle the PGA Tour’s Facebook campaign. It will also soon launch a new app for RE/ MAX that allows smartphone users to scan a house or neighbourhood they like and get instant access to real estate listings and photos of homes for sale in that area. Attracting and keeping young, creative talent is a challenge for some smaller companies, but Garratt said he has had no problem attracting talented young employees. One of the attractions is the work environment. “We have a very cool work environment, ” Garratt said. “It’s very collaborative, very creative. We have sexy clients; we have sexy work.” Idea Rebel’s boardroom is dominated by a ping-pong table, and on Fridays, someone makes a beer run. Garratt is serious about maintaining a small environmental footprint, so none of his employees drive to work – they all ride bikes or take public transit – and the office is entirely paperless. There is no fax machine, photocopier, printer or snail mail. Ga rrat t ’s pla ns to ex pa nd Idea Rebel are also somewhat unorthodox. Because clients like to work with local companies, and because he believes a small, lean operation is best, he plans to seed Idea Rebel in key cities around the world with “pods” of less than 40 employees. The expansion may require venture capital or partnerships, said Garratt, who is busy working on the launch of the first Idea Rebel branch in Santa Monica. • nbennett@biv.com

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Canfor CEO Don Kayne’s game plan for developing new markets for B.C. lumber Issue: August 16

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Check them out at www.biv.com/profiles

Daily business news at www.biv.com Business in Vancouver August 23–29, 2011

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