Business in Vancouver - Issue 1297

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September 9–15 , 2014 | Issue 1297 | $4.00

Aviation action heats up in B.C. transportation | Page 3

B.C.’s northern resources boom and a revitalized provincewide tourism industry are driving increased opportunities and competition in the province’s airline industry

Profile | Page 19 WestJet CEO Gregg Saretsky

The chief architect of Alaska Airlines expansion is aiming to do the same for Canada’s second-largest airline

inside | Vancouver still in shallow end of top talent pool | page 5

B.C. school shutdown: winners and losers

Tech takeout take-up

Boom for B.C.’s tutoring business generated by the public school labour dispute could turn out to be a bust for the province’s multibillion-dollar international student education program

Local tech companies turn their attention to the restaurant sector as more fast-food chains adopt options that allow customers to order via Internet and pay with mobile devices

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technology | Page 8

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BUSINESSVANCOUVER September 9–15, 2014

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inside

contactus publisher President/Publisher |

Paul Harris

Surrey Unlocking India City could hold key to increasing trade with the subcontinent

Editor-in-chief | Fiona Anderson managing Editor |

7

Peter Mitham on housing developments at UBC Okanagan

The typical homeowner in the city spends 81.8% of pre-tax income on housing

Exports up, imports down in July

Mark Falkenberg

Bank of Canada overnight rate holds steady

Hobbled dragon

Jonathan Manthorpe on stalled economic growth in China

onlineevents Business Excellence Series: Money and Finance Join us October 2 for this moderator-led panel discussion and breakfast

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Finance Better times ahead Bryan Yu on B.C. small-business owners’ continued optimism

Emma Crawford Hampel, Glen Korstrom, Tyler Orton, Jen St. Denis 604-688-2398 editorial data researchers | Carrie Schmidt, Anna Liczmanska Vice-President, Sales |

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Sidetracked dream Peter Ladner on light rail and the future of the Arbutus corridor

Michele MacKenzie, Rob Macquisten, Pia Tomlins

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Biggest financial planning firms in Metro Vancouver BIV’s exclusive list, ranked by number of accredited local financial planners

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12 28 How I Did It

index Tech 8 Ask the Experts 18 Profile 19-20 Family business 21-24

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Display Sales | Janice Frome, Blair Johnston,

opinion

The country’s central bank is maintaining its overnight rate target at 1%

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Staff Writers | Nelson Bennett,

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Asia Pacific

Merchandise exports from Canada grew 1.4% to $45 billion in July

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ADVERTISING SALES

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Housing in Vancouver remains far from affordable

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EDITORIAL

26-27 for the record Editorial/opinion 28-29 datebook 30 life lessons 31

FusionPipe CEO David Snell on how he helped create a promising mobile security startup

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BUSINESSVANCOUVER September 9–15, 2014

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B.C. airlines flying high on resource boom, tourism upturn transportation | New

By Glen Korstrom gkorstrom@biv.com

R

esource development in northern B.C and a growing tourism sector provincewide is helping to fuel a rise in charter flights and the addition of new scheduled routes for small airlines.

However, with opportunity also comes competition. “Business is steady, not booming, because as soon as other companies heard about the opportunity, everybody jumped into the market,� Central Mountain Air co-owner Douglas McRae told Business in Vancouver. “We’ve got our fair share of the business, but there are a pile of airplanes flying around northern B.C.�

He pointed to increased competition from airlines such as Kelowna-based charter airline Flair Air, Calgary-based Canadian North, Fort St. John-based North Cariboo Air and Sunwest Aviation, which has several hubs across Western Canada.

Bigger players have similarly sought northern B.C. aviation business.

Air Canada (TSX:AC.B), for example, has added capacity to Fort St. John to compete with WestJet Airlines (TSX:WJA), which last year launched new direct flights between Fort St. John and both

players grab opportunities; existing operators ramp up charter business

Vancouver and Calgary.

Much of Centra l Mou nta in Air’s business comes out of Vancouver International Airport, where the 16-plane airline has increased its outbound seats 17.5% to 91,113 in the year that ended June 30.

McRae and partner Lindsay Clougher also own the fourplane Hawk Air and the sevenplane Northern Thunderbird Air. “Resou rce development i n northern B.C. has definitely shifted our business mix between our scheduled operations and our charter operations,� said Hawk Air’s director of corporate services, Jocelyn Lebell.

She estimated that a couple of years ago about 90% of her airline’s business would have been scheduled. That percentage has dropped to about 70% in the past year as charter flight demand has surged.

Hawk Air’s charter business is fuelled by more than northern B.C. resource development.

The most recent PKF Consulting Inc. data shows that hotel occupancy across B.C. is up an average of about 3.3 percentage points to 60.6% in the first half of 2014. “At this time of year there’s fishing charters to lodges,� said Kevin Boothroyd, vice-president of operations at Pacific Coastal Airlines (PCA). “Much of that is

Pacific Coastal Airlines vice-president of operations Kevin Boothroyd said his airline has added two new routes in the past year: CranbrookKelowna and Campbell River-Bella Bella  |  Richard Lam

Business is steady, not booming, because as soon as other companies heard about the opportunity, everybody jumped into the market

[] Douglas McRae co-owner, central mountain air

out of our seaplane base out of Port Hardy.�

Booth royd sa id h is a i rl i ne has had substantial growth in chartered flights as well as in the overall number of passengers in the past few months.

That increase, however, follows a slump in 2013.

Vancouver International Airport Authority statistics show that PCA had a 10.2% drop in outbound seats out of Vancouver International Airport (YVR) in the year that ended June 30, compared with the previous year.

Some of that drop came because the airline was using more appropriately sized planes while sometimes operating fewer but fuller flights. “Outbound seats is not the sa me a s pa ssen ger t ravel ,�

Boothroyd stressed. “This year we’ve done a better job at managing our capacity and rightsizing our capacity in the market.�

Former Bella Coola truck logger Daryl Smith founded PCA four decades ago and has built the company to be the sixth-largest carrier out of YVR in terms of outbound seats and the thirdlargest carrier ranked by takeoffs and landings.

New scheduled routes that the company has added in the past year include one between Cranbrook and Kelowna and another between Campbell River and Bella Bella.

The company’s wheel-based division is based at YVR’s south terminal and has routes to 14 other airports. Its other main division is seaplanes, based in Port Hardy.

Float plane competitors, such as Harbour Air, are also coasting on rising tourism and general increase in demand. Harbour Air recently launched a 35-minute flight between Pitt Meadows Regional Airport and downtown Victoria that operates twice daily, seven days each week. •

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BUSINESSVANCOUVER September 9–15, 2014

Strike stokes tutors, threatens international program Education | Parents

turn to tutoring companies to fill gap created by school labour dispute

By Janet Steffenhagen news@biv.com

P

icket lines around British Columbia public schools have created whirlwind growth in the tutoring business.

Parents were scrambling this week to find tutors for their children, and tutoring companies were hunting for teachers in an effort to accommodate unprecedented demand. Plenty of striking teachers, who have already lost thousands of dollars in pay, were offering their services.

“It’s been crazy,” said Susan Cumberland, owner of School Is Easy Tutoring, adding that her business has increased fourfold because of the prolonged labour dispute between teachers and government that has postponed indefinitely the start of the new school year.

With a flood of new clients, Cumberland said she intended to hire 25 additional B.C.-certified teachers and had dozens of interviews lined up for several days running.

“We are getting four times more applications from teachers and four times more registrations from students than what we would normally get,” she said. “The teachers that are applying to tutor say that

Jamileth Partovi (right), a tutor at School Is Easy Tutoring, works with pupil Raianne Leung | Richard Lam

[International student programs are] a very, very competitive market

[] Patti Bacchus chairwoman, Vancouver Board of Education

they would like to continue tutoring all year to make up for the loss of salary.”

Before the strike, School Is Easy Tutoring provided in-home lessons to more than 1,000 students a year, at a cost of $40 to $45 an hour, and had a database of 500 tutors. But if this week is any indication, those totals are about to mushroom.

Similarly busy was the Teachers’ Tutoring Service, a non-profit

that also offers services to Metro Vancouver students in their homes. Co-ordinator Ann Thorpe said parents usually wait until after the first report card before seeking a tutor, but not this year.

Some are in panic mode because no one knows how long this strike might last, she said.

The tutoring business has grown steadily for a decade or so, but its expansion has been exceptional during the past couple of years, Thorpe said. In addition to the spread of large franchises, such as Sylvan and Kumon, there’s been a boom in smaller, after-school academies.

Added to that now are numerous striking teachers who are advertising their services online.

“Are you worried about your child falling behind in reading because of the prolonged teacher strike?” asks one Kijiji advertisement. “I can help!”

Parents of children under 13 are eligible for a government subsidy of $40 a day, which would generally cover tutoring costs.

But significant interest is also coming from older students, especially those in grades 11 and 12 who are worried about completing courses in time to apply for postsecondary studies, Thorpe said.

While the tutoring industry

flourishes, another economic driver in education could be in trouble. Many worry that the strike is damaging the reputation of B.C. schools abroad and may prompt fee-paying international students to look elsewhere for education next year.

“It’s a very, very competitive market,” said Patti Bacchus, chairwoman of the Vancouver Board of Education, which operates one of the most successful international student programs in the K-12 sector. “Students have a lot of choices. They shop around.”

Although B.C.’s education brand is strong, damage to the province’s reputation could take a long time to repair, she added.

The government recently boasted that the number of international students attending B.C. public and private elementary, secondary and post-secondary schools had jumped to 112,800 last year from 94,000 three years earlier.

International students spend $2.3 billion on tuition, accommodations and living expenses, supporting about 25,000 jobs, the government said, noting it was on target to increase the number of international students coming to B.C. by 50% by 2016.

Without a quick end to the strike, that goal may be out of reach. •

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BUSINESSVANCOUVER September 9–15, 2014

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Bottom line: B.C. retains satellite status for top talent HR | Locals hire executives based in other cities as Vancouver struggles to find qualified personnel

BY TYLER ORTON TORTON@BIV.COM

W

hen Vancouver’s Avigilon (TSX:AVO) needed a new chief operating officer earlier this year, the tech company did not limit its scope to the West Coast talent pool.

The high-definition surveillance video manufacturer promoted a six-year veteran of the company who was working in the global sales office in Dallas, Texas.

And the company kept him there.

T here was no need for t he second-in-command at one of Canada’s fastest-growing companies to leave the Lone Star State, according to Avigilon founder and CEO Alexander Fernandes.

“We’re on the same computer network, we’re hooked up through our video conferencing, we meet up on a regular basis at various trade shows, so we’re adept at running essentially a virtual organization,” he said.

Fernandes said the solution was born out of necessity due, in part, to Vancouver’s corporate identity, or lack thereof.

“At the entry level and the middle-management level, there is actually a sizable talent pool [in Vancouver],” he said. “But where

Avigilon CEO Alexander Fernandes says his Vancouver company has become adept at running a “virtual organization” after hiring a COO based in Dallas | Biv archives

the talent pool gets thin is at the more senior level.”

B.C. was home to 11.3% of the corporate headquarters and 7.4% of head office employees in Canada in 2012, according to Statistics Canada.

In contrast, energy-rich Alberta had 14.2% of Canada’s headquarters and accounted for 17.9% of the country’s head office employees. Ontario led the way with 40% of the country’s corporate headquarters and 41.9% of head

office employees. Meanwhile, a 2011 report from the Fraser Institute calculated Vancouver had two corporate headquarters per 100,000 people as of 2010. That’s a drop from 1990, when there were 2.8 corporate headquarters per 100,000 people.

Calgary, however, had six head offices per 100,000 people and Toronto had three.

Fernandes said the lack of big companies headquartered in Vancouver means there are fewer

top-level executives with global experience to pick from.

Coming up with creative ways to get around that problem becomes necessary when the most qualified person doesn’t necessarily wish to leave a bustling metropolis like Toronto for a smaller city like Vancouver.

It’s a trend that has also proven popular for smaller tech companies trying to hire some of the world’s top talent.

Hootsuite recruited its new chief technology officer from Groupon’s office in Seattle – one of North America’s biggest technology hubs.

Ajai Sehgal still lives in the suburbs of Seattle but he travels up to Vancouver for a few days at a time and telecommutes the remainder of the week. And when Telus (TSX:T) replaced outgoing CEO Darren Entwistle with Joe Natale in the spring, the Vancouverbased company allowed Natale to remain based in Toronto.

But the passing of the torch at Telus included creating the new position of executive chairman for Entwistle. The ex-CEO is involved in overseeing the company’s operations as well as guiding its strategy.

Telus chief corporate officer Josh Blair said the transition has

gone “very well” and the two top executives have worked closely since Natale assumed the role of CEO in May. “With an executive team spread across the country that’s very deep … it really is an important part of our success,” he said.

But in terms of developing more corporate headquarters on the West Coast to deepen the pool of executive talent, Fernandes said it’s an uphill battle for Vancouver.

“In other parts of the world where there is more of a business culture, people are simply willing to make more sacrifices in order to be successful,” he said.

Furthermore, the founders of local firms like PNI Digital, Paperny Entertainment a nd Coastal. com have all sold off their businesses over the past six months.

The Vancouver offices are still operating but now function as subsidiaries.

“I get offers all the time for people to buy the business, but it’s simply not that interesting to me because I’m not interested in just kicking back and retiring,” Fernandes said.

“When the founders [of startups] here make enough money that they can basically kick back, buy a sailboat and go golfing, that’s what a lot of them do.” •

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6

NEWS

BUSINESSVANCOUVER September 9–15, 2014

Transportation

TransLink bonuses boosted executive pay amid vows of salary freeze All seven of TransLink’s senior executives enjoyed increases to their pay packages in 2013, despite a public pledge to freeze salaries.

The executive compensation table, on the last page of the corporation’s 74-page Statement of Financial Information, shows CEO Ian Jarvis’ total compensation, including pension and benefits, for 2013 was $468,015. That was up from the $438,700 package in 2012. Jarvis’ base 2013 salary was $319,244.

CFO Cathy McLay received the biggest raise of the seven top executives. Her pay packet last year was $383,905, up from $330,753.

Doug Kelsey, moved from COO to general manager of SkyTrain and West Coast Express in August,

saw only a marginal bump in his total pay, from $377,054 in 2012 to $377,702 in 2013. His base salary was $298,924.

At TransLink’s annual general meeting in May, chair Marcela Szel said incentive programs were eliminated and salaries were frozen at 2012 levels. In a September 2 news release, TransLink claimed take-home pay would decrease in 2014 for those directly reporting to Jarvis and the presidents of the company’s two operating subsidiaries. Jarvis received a $40,300 bonus under an annual incentive program and a $43,400 first instalment of a contractually mandated long-term bonus program.

“The CEO’s performance was assessed at the end of the threeyear period, and per the contract,

the three payments would be staggered over three years, starting in 2013,” said the TransLink statement.

TransLink and its subsidiaries paid $100,000 or more to 434 people in 2013, up from 393 in 2012. Fifty-six of the 154 Transit Police officers were paid $100,000 or more.

Meanwhile, the $61.59 million paid to Golden Crossing General Partnership was the largest

amount paid for a private supplier of goods and services in 2013. The company is the Bilfinger Berger BOT Inc.-led operator of the Golden Ears Bridge.

That was more than double the $27.6 million paid to Cubic Transportation Systems Inc., the lead contractor in the Compass Card and fare gates installation, which is a year late and is now expected to cost $194 million, up from its original $171.3 million price tag.

Other major payments in 2013 were to Graham Construction and Engineering ($13.68 million) and Magil Construction Pacific ($10.8 million).

The TransLink financial report was published August 29, the Friday before the Labour Day weekend, though it had been signed by Szel and Jarvis on June 30.

In June, the TransLink’s Mayors’ Council unveiled a $7.5 billion, 30-year omnibus plan to improve transit infrastructure, including new rapid transit lines in Vancouver and Surrey. Transport Minister Todd Stone immediately ruled out reallocating the carbon tax to TransLink. The date of a transit funding referendum promised by the BC Liberals during the 2013 election has not been announced.

mining

online retail

Coal stakeholders mull recovery prospects at Vancouver conference

Canada Post hopes Richmond plant will increase e-commerce

When coal industry leaders converge in Vancouver this week for the annual Coal Association of Canada conference, the No. 1 question on most minds promises to be: How long will it take for the steelmaking coal market to recover?

Metallurgical (“met”) coal used in making steel is B.C.’s single largest bulk export, but the industry in B.C. took a major hit earlier this year, when a global glut forced major producers in B.C. to either idle coal mines or postpone

planned restarts.

The state of the global met coal market will be top of the agenda at this year’s conference, which takes place September 10 through 12 at the Westin Bayshore Vancouver.

“Our conference couldn’t be timelier as we’ll hear from international coal experts on what the future holds for Canada’s coal industry from a domestic and global perspective,” said coal association president Ann Marie Hann.

Canada Post of f icia l ly opened its 700,000-square-foot processing plant in Richmond on September 4.

The struggling Crown corporation said the new facility will help it increase its parcel and e-commerce business.

Canada Post is attempting to expand parcel delivery in response to sharply declining letter mail.

While Canada currently lags behind other countries in online shopping, ecommerce is growing in this country.

“As it relates to our parcel and package business, we’re currently seeing

K biv.com Go online to read these stories in full, along with much more business news updated daily at biv.com.

17% growth in e-commerce,” Rod Hart, Canada Post’s general manager of domestic parcel delivery, told Business in Vancouver.

The new facility on Sea Island replaces two plants that are now closed. One was located in Richmond, while the other was Canada Post’s landmark downtown Vancouver location on Georgia Street.

Canada Post sold that building in 2013 to a pension fund investment firm.

The new plant employs between 250 and 300 workers. More people will work there during particularly busy times.

BUSINESSVANCOUVER September 9–15, 2014

7

Surrey Surrey could be the key to unlocking trade with India global economy | City’s

South Asian population is uniquely positioned to leverage overseas ties

By Patrick Blennerhassett news@biv.com

A

t the end of 2013, Canada was exporting more than $20.4 billion worth of goods to China. But Canada’s trade with the other country that boasts over a billion people – 1.23 billion to be exact – is nowhere near the same.

Only $2.8 billion worth of Canadian exports were sent to India in 2013. While the South Asian country is second in global population, it’s not even on Canada’s top-10 list in terms of exports.

When it comes to goods coming the other way, India’s $2.9 billion worth of exports to Canada in 2013 doesn’t even place the country among the top 15 nations exporting to Canada, and is only a small fraction of the more than $52 billion worth of exports sent our way from China that year.

“I think the imagination of I nd ia has not yet crept i nto Canada,” said Satwinder Bains, director of the Centre for IndoCanadian Studies at the University of the Fraser Valley. “I feel it hasn’t really matured. This idea of trade with India has not yet become fully sophisticated; businesses haven’t come forward and said they want into this.”

So is Canada missing a subcontinent-sized opportunity?

Bains said that while the short answer is yes, it’s a complicated issue with many factors in play.

She noted the highly bureaucratic business culture and concentration of power in India has hampered growth.

“There are only a handful of conglomerates who control the larger business sectors, and they have over time built tremendous relationships all over the world

Satwinder Bains, director for the Centre for Indo-Canadian Studies at the University of the Fraser Valley, said India has yet to capture the imagination of the Canadian business world, despite its vast potential | Richard Lam

India is the world’s largest democracy and is expected to become the world’s most populous nation …

And that is why India has been designated a priority country in the Global Markets Action Plan

[] ed fast federal international trade minister

as well as in India. So infiltrating that is difficult. And small and medium-sized businesses, they’re much more difficult in I nd ia because … the ma rket is very split. There’s the very wealthy, there’s the very poor, there’s in between – there’s a burgeoning middle class that’s becoming more and more sophisticated. So I think it’s quite complicated in terms of access to Indian business and bilateral trade.”

Bains noted that while China is a largely industrialized nation, India is still developing as a world power, with its enormous workforce as its main asset.

Yet the key to unlocking this

potential with India may lie very close to home, says Surrey Coun.

Tom Gill. Surrey’s robust South Asian population – more than 30%, according to the latest Statistics Canada numbers – creates a unique opportunity, Gill said.

“I think one of the things that is going to materialize, and given the South Asian population in Surrey and mentality, is that many South Asians are entrepreneurs and self-employed. And they have significant connections to home. And particularly I’m referring to that first-generation immigrant that’s come over to Canada and been successful and really wanting to be able to invest back in India.”

Gill said many of those firstgeneration immigrants are now approaching retirement and are looking for a place to invest their hard-earned cash. Both Bains and Gill note that India’s economy is largely relationship based, meaning a high percentage of small and medium-sized businesses are passed down through generations.

The devaluation of the rupee, which has been steadily dropping since 2010, provides unique opportunities for Surrey business owners with direct ties to India, Gill added.

“It just makes it that much more valuable for an individual wanting to capitalize on that particular market – wanting to use the rupee as a leveraging pin to be able to look at other global opportunities for products and manufacturing.”

When it comes to strengthening trade ties with India, Bains said part of the burden should fall on the federal government to do more.

During a speech at a July Surrey Board of Trade event, International Trade Minister Ed Fast

stressed the importance of fostering trade with India, especially in light of the recent election of Prime Minister Narendra Modi, who many believe is more probusiness than his predecessor, Manmohan Singh.

“India is of course the world’s largest democracy and of course is expected to become the world’s most populous nation, passing even China,” Fast said. “And it is imperative that your federal government take a special interest in India. And that is why India has been designated a priority country in the Global Markets Action Plan.”

One sector where closer ties have already paid dividends in Surrey is higher education. In January Simon Fraser University joined with Ryerson University to develop an “incubator” in collaboration with the Bombay Stock Exchange Institute. The program aims to help entrepreneurs fast-track their startups in both Canada and India. In 2006, the University of the Fraser Valley set up the Centre for Indo-Canadian Studies, which looks to capitalize on India’s middle-class youth hoping to study abroad. Right now, half of India’s population is under 25.

That statistic is similar to the situation in Surrey, where one in three is under the age of 19.

Bains said many of those Indian students are looking not only to study abroad, but also to eventually live and work abroad.

“I nd ia is u nder st ress a nd struggling to be able to provide good, viable jobs for their graduates and their people who are educated,” she added. “That is still a dilemma, because it has always been such an entrepreneurial country and because it is so diverse, and such a stratified economic base.” •

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8

BUSINESSVANCOUVER September 9–15, 2014

technology Food industry’s high-tech services appetite grows hospitality | Venture

capitalists investing hundreds of millions in innovative mobile app startups

BY TYLER ORTON TORTON@BIV.COM

C

utting ahead in line at a fast-food restaurant is rude, but Jason Strashek can’t help but be delighted after witnessing that apparent social faux pas recently at a few Subway sandwich outlets running a pilot program.

Vancouver’s Avanti Commerce Inc., of which Strashek is CEO, has developed a mobile app and desktop service allowing people to select their sandwich over the Internet before bypassing the line to pick it up at a Subway restaurant a few moments later.

“You’ll have people scratching their head in line when they see customers walk by them [to pick up ready-made orders],” he told Business in Vancouver.

“Behind the front counter, the merchant benefit is ultimately they don’t have to bother with writing up the sale, capturing the payment, having a customer kind of hemming and hawing, ‘Maybe I want this kind of cheese.’”

The company slated official deployment of the new service for September 8. It’s gradually rolling it out market by market before the service hits all 27,000 North American Subway outlets.

“We know there’s a massive opportunity here,” Strashek said. “There are 300,000 [restaurant] locations in the U.S. and Canada that can use what we’re offering.”

And a healthy appetite among investors is also supporting the demand for food tech startups like Avanti.

Grocer y del iver y a nd food startups raised $486 million in funding across the globe between 2013’s second quarter and 2014’s first quarter, according to venture capital database CB Insights.

Connie Sze, Web designer at Avanti Commerce Inc., shows off the mobile app the company created for the Subway restaurant franchise that allows customers to pre-order food online | Richard Lam

We know there’s a massive opportunity here. There are 300,000 [restaurant] locations in the U.S. and Canada that can use what we’re offering

[] Jason Strashek CEO, Avanti Commerce Inc.

That’s a 51% year-over-year jump.

Me a nwh i le, t he 109 d e a l s struck during that period represent a 55% year-over-year increase, as well.

In 2012, Food.ee raised about $1 million in venture capital from angel investors that included Vancouver’s Ryan Holmes, founder of Hootsuite.

But instead of trying to make fast-food service even faster, the West Coast startup is taking the opposite route, focusing on providing “slow food” options to workers.

Food.ee has partnered with Vancouver eating establishments such as Calabash and Irish

Heather to deliver lunches to offices across the city. Instead of maintaining its own fleet, the company keeps costs low by hiring couriers to drop off the meals.

“The problem with corporate caterers is it’s overpriced, it’s not very good and it’s been that way for a long time,” Food.ee CEO Ryan Spong said.

“The alternative, which is typically just takeout, is less reliable and it’s worse usually because it’s greasy Chinese, pizza and so forth.”

The combination of technology and demand for better food helped Food.ee rea l i ze 20% month-to-month growth so far

this year, according to Spong.

He admitted an incumbent food delivery service such as GrubHub (N YSE:GRUB), which posted record revenue of $60 million in 2014’s second quarter, could pose a challenge in this emerging market.

“Part [of] what’s changed now is that everybody has access to [information technology] in their pockets, basically, wherever they are,” Spong said.

But he pointed out it’s mostly regional players populating the corporate catering world, which leaves room for food startups to wedge their way into the market.

Food.ee is expanding to Toronto in October, and Spong expects the company to have a footprint in other Canadian cities such as Calgary and Ottawa by spring 2015.

As for Avanti, Strashek said he’s confident the company will stick around because it has already had three years to work out the kinks in its system.

“Many other companies have tried with various sexy apps,” he said. “The problem is most of those start to fall apart, mostly as a function of the fast-food businesses or the coffee shops just being ill-prepared to handle [implementation].”

But Avanti originally partnered with Subway in 2011 to develop the sandwich franchise’s online catering service before jumping into the fray with the mobile app for individual orders.

He said the company has its sights set on completing a deal with Taco Del Mar next.

“We have templates already pre-built for coffee chains, noodle chains, burger chains, sandwich chains,” Strashek said. “But if we don’t get all of the big fish, then certainly there’s tons of the smaller players.” •

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BUSINESSVANCOUVER September 9–15, 2014

9

realestate Rising demand draws developers to student housing; Rize awaits final approval for Mount Pleasant rezoning

real estate roundup Peter Mitham

OK demand With enrolment this fall of 8,182 students, the University of British Columbia (UBC) Okanagan is operating at capacity.

But a glance at student housing numbers suggests that there’s room to boost residential developments on and around campus.

This year marks the 10th anniversary of the campus, which opened in September 2005. A multimillion-dollar building program followed, and the campus now offers students 1,676 beds.

Because approximately 30% of students are from the local area, those beds serve roughly 30% of the remainder. But that leaves about half the student population looking for accommodation – something that’s tough to find in a city where the most recent Canada Mortgage and Housing Corp. numbers indicate purpose-built rental vacancies stand at just 1.5%.

UBC Okanagan director of university relations Bud Mortenson said close to 1,000 students live at the nearby Quail Ridge development at the Okanagan Golf Club property adjacent to campus, and other private developers are now following suit.

“The private sector sees an opportunity for developing near

the university to be able to provide accommodation for rental units,” Mortenson said.

Academy Hill, just south of campus, has been “a great success,” Mortenson said, while Kelowna’s Mission Group Homes LP is positioning U-One – a project to the south, with 66 units set to complete next year – as an “investment opportunity.”

The high hopes are buoyed by the prospect of hundreds more students coming to Kelowna, with the encouragement of the province. While local enrolments aren’t set to rise, Mortenson said B.C. post-secondary schools have been directed to increase international enrolments.

“We’re pretty much at our ceiling of the number of students we can accommodate here, but we will see a slight increase in the number of international students,” he said. “It’s not going to be dramatic – we’re talking in the scale of hundreds, not thousands.”

Rental boost While the start of the fall academic term typically marks a tightening in demand for rental housing across the country each year, and an opportunity for landlords to reconsider rental rates, the latest figures from the Residential Tenancy Office indicate landlords have a chance to raise rents on annual lease agreements by 2.5% for 2015.

The figure – calculated by adding two percentage points to the annual inflation rate – remains remarkably low thanks to tame inflation rates. While tight vacancies ensure rising rents remain a certainty in Vancouver, landlords won’t be

School’s in: Kelowna’s Mission Group is inviting investors to purchase units in U-One for renting to students at UBC Okanagan

taking in much more from longterm tenants this year. That’s good news for tenants but less so for landlords who face rising utility costs and other operating expenses.

Straight up Of the many claims the Residents Association Mount Pleasant (RAMP) has made in its critique of the city’s handling of the rezoning of 180 Kingsway and 228-246 East Broadway is that the project hasn’t received rezoning.

Supporters and opponents of the project who attended the several nights of public hearings regarding rezoning of the site in 2012 might wonder what it was all for, but there’s a simple answer.

While the developer, Rize

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have $6.25 million in community amenity contributions ready for the city, as required under the rezoning agreement, to give effect to the rezoning.

In the interim, RAMP has asked the BC Supreme Court to quash staff approval of the development permit and a declaration that the tower be limited to 19 storeys with 241 residential units rather than the 21 storeys with 258 units that was recently approved – even though the tower’s height is unchanged at 215 feet.

Between the petition and the November elections, the latest guess from city staff as to when final approval, rezoning and actual development might happen is “early next year.” •

Counterpoint interiors inC.

BIV

DaIly NewS

Alliance Properties Ltd., is building an elaborate presentation centre and more than 800 potential buyers have registered for a chance to buy a unit, rezoning isn’t a done deal.

The approval won for the rezoning in 2012 was simply approval in principle. Its enactment is contingent on the city approving the design of what the developer plans for the site.

Simply put, the rezoning gave the developer enough certainty to draft detailed development plans, but the city wants to be sure those plans are acceptable before making a change as significant as a rezoning.

Staff approved Rize’s development permit application in July, but now councillors must review and approve the work of staff. Rize must also

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10

BUSINESSVANCOUVER September 9–15, 2014

AsiaPacific ‘Middle-income trap’ drags down China’s economy

Asian outlook JOnathan Manthorpe

China’s rot set in in 2009 when Beijing launched a massive stimulus package, dumping cheap credit into the economy in order to try to stave off unemployment.

But much of this money went into already unproductive and inefficient state-owned enterprises

C

hina’s productivity is in negative territory, says a new study, and there are serious political barriers to it following a sustainable development course.

The study, by the New Yorkbased Conference Board China Center for Economics and Business, says China is sliding into “the middle-income trap,” a common pitfall for developing countries when rising wages and other costs undermine productivity. Although Beijing understands the threats it faces, it lacks experience in pushing through the necessary structural reforms and appears unwilling to confront vested interests or the social consequences of creative destruction, says Harry Wu, the China center’s senior adviser and economics professor at Japan’s Hitotsubashi University.

Other recent studies have

China’s productivity is on a downward slide and will continue to slip without serious economic reforms, many analysts say | K. Miri Photography, Shutterstock

Oversupply puts damper on China’s housing market China’s housing prices fell in August for the fourth straight month as the country continued to struggle with the oversupply flowing from an over-exuberant building boom.

According to figures released last week by the China Real Estate Index System, the average price of a new home fell by 0.6% in August over the previous month, a slight improvement over the 0.8% decline in July over June.

Of the 100 cities in the survey, the report found home prices dropped in 74, also a slight improvement over July when price declines were reported in 76 cities.

The findings correspond with those published by China’s National Bureau of Statistics (NBS) and come at a time when cities are trying to revive the market by loosening home purchase restrictions and making mortgages more easily available.

The recent NBS report for July found that among 70 major Chinese cities, 64 recorded month-onmonth declines in the prices of new homes, up from 55 cities in June.

Only two cities – Xiamen in Fujian province and Dali in Yunnan province – showed marginal increases in property prices. The worst results came from Hangzhou, the capital of Zhejiang province, where prices were down 2.5% in July over June.

Beijing has struggled to control the real estate development industry for several years. The booming business has not only fuelled rapidly rising housing costs, it has spawned massive social upheaval and corruption as local officials requisition peasants’ land to sell to developers.

But the central government and municipal authorities are now beginning to ease some of the restrictions put in place to curb speculation and rising prices, such as limiting multiple-home purchases and limiting access to mortgages. The reports say that the demand for housing in China’s fast-growing cities remains huge, but only at affordable prices.

come to the same conclusion – that China’s economy has been subsisting on investment since the global economic crisis of 2008 and that without structural reform its real level of productivity will continue on a downward slide.

In another study, Zhu Haibin, an economist with J.P. Morgan in Hong Kong, used the concept of “total factor productivity” (TFP), which measures an economy’s overall technical dynamism rather than just inputs of labour and investment.

He concluded that by the TFP measure, China’s economy grew by only 1.1% in 2013, down from 3.2% expansion in 2008.

But economic figures published by China are notoriously unreliable. The old adage still applies that official numbers in China are largely fictitious because “numbers make cadres and cadres make numbers” to boost their career prospects.

The Conference Board’s Wu calculates that while China’s TFP growth was 3.3% from 2001 to 2007, from then to 2012 it was in negative territory at an average of -0.9%. He says there are no signs of the situation improving since then.

Wu argues that the only period when China showed any genuinely dynamic economic advance was after it joined the World Trade Organization in 2001 until the end of 2007 and the onset of the global economic crisis. But even then, its average 1% TFP growth did not match that of neighbouring economies in their periods of transitional growth when Japan hit 4%, Taiwan achieved 3% and South Korea 2%.

China’s rot set in in 2009 when Beijing launched a massive stimulus package, dumping cheap credit into the economy in order to try to stave

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AsiaPacific

BUSINESSVANCOUVER September 9–15, 2014

11

off unemployment. But much of this money went into already unproductive and inefficient state-owned enterprises. This has not only created huge industrial overcapacity, but has also bred a culture of reliance on credit that pays little or no attention to productivity or market demands, many economists say.

At the same time, wages in

China have risen substantially to an average of $495 a month in 2011. This is now higher than wages in increasingly important competitor manufacturing nations such as India, Indonesia, Vietnam and the Philippines.

This is still significantly lower than in western manufacturing nations and other Asian competitors such as Taiwan, Japan and South Korea. But

this Chinese advantage is being offset by the rising costs of other industrial inputs such as natural resources and especially energy.

China’s president, Xi Jinping, and the country’s parliament, the National People’s Congress, last year tabled plans for a new economic revolution to try to take the country beyond the middle-income trap. But

it envisages a tentative approach, experimenting with deregulation and allowing more ambitious private ventures in hermetically sealed zones before allowing them in the wider market.

However, not only is Xi a vigorous defender of the oneparty state and suspicious of any centres of economic power rivalling state enterprises, he is

in the midst of a power struggle with the Communist Party’s royal families. Many of these have grabbed control of sectors of China’s economy and will not cede their power without a fight. •

CHINA

INDONESIA

MALAYSIA

JAPAN

PAKISTAN

Execs’ benefits cut

Widodo targets fuel subsidies

Airline jettisons jobs

English spoken here

Camps spawn baby boom

China’s Communist Party has approved plans to cut the salaries and benefits given to executives of the country’s thousands of stateowned enterprises (SOE). Government figures show that senior executives in China’s SOEs earn between $105,000 and $120,000 a year, but they also have large “invisible incomes” from benefits and access to the proceeds of corruption. Beijing’s official Xinhua news agency says that “unchecked spending and corruption have become a source of public complaints.”

Ceilings are to be put on executives’ expense accounts and limits applied to their use of benefits such as official vehicles and business trips.

Indonesia’s new president, Joko “Jokowi” Widodo, says he’s prepared to sacrifice some of the popularity that produced his recent convincing election victory in order to cut the country’s unsustainable fuel subsidies. Jakarta now spends $22.8 billion a year subsidizing gasoline and diesel prices. Next year the subsidies will consume 21% of central government spending. Indonesians now pay about 60 cents a litre at the pumps for gasoline or diesel, and Jokowi said last week if reduction of subsidies allowed that price to rise by only 30 cents a litre it could save the government the equivalent of close to $50 billion a year.

Malaysia Airlines is to slash 6,000 jobs in an effort to stave off looming bankruptcy accelerated by two air disasters. The airline was already having difficulties before it suffered the twin disasters of the disappearance of flight MH370 over the Indian Ocean and the shooting down of flight MH17 over Ukraine, killing nearly 550 people.

The airline plans to cut nearly a third of its 20,000-member workforce, drop unprofitable routes and focus its service on regional destinations. Malaysia’s state investment fund, Khazanah Nasional, says it intends to invest nearly $2 billion in the restructuring.

In preparation for Japan’s hosting of the Olympic Games in Tokyo in 2020, it is being suggested the country establish “special English zones.”

In these zones English would be designated an official language to be used by local people in return for tax reductions. The suggestion comes from a committee that has proposed expansion of the “Cool Japan” tourism initiative. The broadening of local facility in English, says the committee, would help to give visitors a better understanding of Japanese culture and industries, and strengthen Japan’s ability to take full advantage of the opportunities presented by the Tokyo Olympics.

Over 30,000 Afghan refugees returned to their country from United Nations camps in Pakistan last year. But the number of Afghan refugees in Pakistan continues to grow because of the high birth rate among people in the camps. Over 50,000 babies were born to the refugees last year, and the UN says 150,000 children have been born in the camps over the past five years.

There are about 1.6 million registered Afghan refugees in Pakistan, and there may be another two million unregistered haven-seekers. In 2012 a total of 83,423 of these people returned to Afghanistan, but only 31,224 took the same route last year.

C

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Jonathan Manthorpe (jonathan. manthorpe@gmail.com) has been an international affairs columnist for nearly 40 years.

12

BUSINESSVANCOUVER September 9–15, 2014

finance

D 45%

Western Lithium (TSX:WLC) weekly price gain

D 21%

CaNickel Mining (TSX:CML) weekly price gain

datapoints

Data Points Bryan Yu

I

t was a slow news week for the provincial data flow, but the latest Business Barometer Index (BBI) survey released by the Canadian Federation of Independent Business suggests higher levels of optimism among the province’s small to medium-sized businesses were generally maintained into August.

While the BBI for British Columbia eased for a third month, B.C. remained above the national average and most other provinces, with an index value of 70.2. A value above 50 means the number of business owners expecting a stronger business performance over the next year is higher than the number expecting a weaker one.

Despite some recent moderation, confidence has trended at a solid pace since late 2013, with the BBI up more than four points from a year ago.

The positive outlook has likely reflected a lift in domestic demand – a key driver for smaller businesses – as resale housing demand, retail

activity, restaurant sales and tourism indicators are all comfortably ahead of last year’s pace. In addition, we can’t discount the news flow, which, despite some uncertainties related to a couple of liquefied natural gas projects, has been dotted by news of growth in the creative and tech-oriented sectors. A solid rebound in the U.S. economy during the second quarter has also allayed some of the fears related to the broader economic recovery.

Higher confidence lays the foundation for stronger provincial employment growth following a mild start to the year.

While short-term hiring intentions eased in the survey, which partly reflects seasonal patterns related to the end of summer hiring, levels remained elevated compared with past survey results.

Modest hiring intentions have yet to translate into many job gains, given that overall provincial hiring is up about 0.5% from a year ago. Nonetheless, the intentions are there, and as the economy expands we should see accelerated job gains.

Employment growth is forecast to accelerate slightly in the second half but average a mild 0.8% for the year as a whole, following a year of no gain in 2013. • Bryan Yu is an economist at Central 1 Credit Union.

CONFIDENCE Business confidence in B.C.

Confidence has fallen in B.C. over the past three months but remains higher than the national average 75

70.2

70

65.5

65

60

55

J

J

J

J

2011

2012

2013

2014

B.C.

Canada Source: Canadian federation of independent business

Provincial comparison

B.C. business owners were the third most confident in the country 80 70 60

Index value

Business confidence slips in August but remains high

50 40 30 20 10

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Source: Canadian federation of independent business

finance

D 19%

Ten Peaks Coffee (TSX:TPK) weekly price gain

F 24%

Oracle Mining (TSX:OMN) weekly price drop

Yellowhead Mining (TSX:YMI) weekly price drop

A comprehensive snapshot of B.C.’s economy that includes forecasts and key indicators to provide business decision-makers with more tools to help them understand the economy’s strengths, weaknesses and direction. Compiled by Jen St. Denis

WAGES B.C. weekly wages

B.C.’s average weekly wage crept closer to, but remained below, the Canadian average in July $899.74 $889.29

A

J

O

2011

J

A J

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A

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2013

B.C.

A

B.C. wages by sector

Workers in accommodation jobs made the least, while those in utilities jobs made the most $1,600 1,400 1,200 1,000 800 600 400 200 l e e e e n n s s g ie ce vic na tio in ion ion nce ar al ur tio ilit our ser ssio ruc ctur rtat cat ina th c oles cult da t t U es lic e o du F eal wh gri mo a of ns uf sp R ub E A m H il/ Pr Co an ran a P co M T et Ac R July 2014

J

2014 Canada

Source: bc stats

Source: bc stats

Provincial comparison

B.C. wages by industry

$1,100 1,050 1,000 950 900 850 800 750

$1,150 1,100 1,050 1,000 950 900 850 800 750

B.C. continued to lag behind several provinces as well as the Canadian average in weekly wages

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After falling throughout the spring, goods-producing weekly wages remained flat, as did service job wages

$1,060.70

$848.08 J

A J

O J

2011

A J

O J

2012

A J

2013

Goods industries

O

J A

J

2014

Service industries Source: bc stats

Source: bc stats

OIL & GAS Wells drilled in B.C.

Year-to-date oil and gas activity is the highest since 2010

B.C. drilling licences

Drilling licences declined slightly after rising throughout May and June 160 120

Licences

Wells drilled

1,200 800

80 40

400

03 004 005 006 0 2 2 2 2

07

20

September 9–15, 2014

Canarc Resources (TSX:CCM) weekly price drop

13

F 18%

INSIDERTRADING

dashBoard

$900 890 880 870 860 850 840 830 820 J

F 23%

BUSINESSVANCOUVER

3 2 08 009 010 011 01 01 014 2 2 2 2 2 2

20

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YTD to July

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Source: daily oil bulletin

Source: daily oil bulletin

17th Year!

er er er st er gu mb tob mb mb u e e e c A pt v c O No De Se 2013 2014

The following is a list of stock trades made by corporate executives, directors and other company insiders of B.C.’s public companies filed the week ending September 3. The information comes from a compilation of required reports filed with the BC Securities Commission obtained from DisclosureNet.com.

Company: Great Canadian Gaming Corp. (TSX:GC) Shares owned: 119,900 Trade date: August 26, 28 Trade total: $100,240 Trade: Sale of 5,100 shares at prices ranging between $19.65 and $19.90 per share

Insider Samuel Wright Ketcham, director Company: West Fraser Timber Co. Ltd. (TSX:WFT) Shares owned: 1,257,897 Trade date: August 26 Trade total: $2,515,000 Trade: Sale of 50,000 shares at a price of $50.30 per share

Insider Stephen Roebuck, officer Company: Scorpio Gold Corp.

(TSX:SGN) Shares owned: 15,000 Trade date: August 26 Trade total: $97,500 Trade: Acquisition of 5,000 shares at a price of $19.50 per share

Insider Peter St. George, director Company: First Quantum Minerals Ltd. (TSX:FM) Shares owned: 471,660 Trade date: August 26 Trade total: $1,775,831 Trade: Sale of 70,000 shares at prices ranging between $25.14 and $25.44 per share

Insider Lorne Allan Woods, director Company: Sunset Cove Mining Inc. (TSX:SSM) Shares owned: 624,775 Trade date: August 22 Trade total: $59,411 Trade: Sale of 1,188,225 shares at a price of $0.05 per share

Insider G. Clive Newall, director Company: First Quantum Minerals Ltd. (TSX:FM) Shares owned: 2,679,266 Trade date: August 28 Trade total: $1,217,706 Trade: Sale of 50,000 shares at prices ranging between $24.26 and $24.49 per share

Insider Sheldon Inwentash, 10% owner Company: Newport Exploration Ltd. (TSX:NWX) Shares owned: 6,347,000 Trade date: August 29 Trade total: $57,230 Trade: Acquisition of 97,000 shares at a price of $0.59 per share

Insider Charles E. Levine, director Company: Sierra Wireless Inc. (TSX:SW) Shares owned: 25,958 Trade date: August 28 Trade total: $268,600 Trade: Sale of 10,000 shares at a price of $26.86 per share

Insider Philippe Frederic Joel Rene Guillemette, officer Company: Sierra Wireless Inc. (TSX:SW) Shares owned: 3,300 Trade date: August 27 Trade total: $56,000 Trade: Sale of 2,000 shares at a price of $28 per share

Insider Jean Gail Sexsmith, officer Company: Finning International Inc. (TSX:FTT) Shares owned: 9,724 Trade date: August 29 Trade total: $107,217 Trade: Sale of 3,168 shares at prices ranging between $33.84 and $33.85 per share

Insider Jonathan Charles Timothy Awde, 10% owner Company: Consolidated Westview Resource Corp.

(TSX:CWS) Shares owned: 835,893 Trade date: August 21, 22, 25, 26, 27 Trade total: $50,410 Trade: Sale of 200,500 shares at prices ranging between $0.24 and $0.32 per share •

Insider Walter Soo, officer

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BIVLIST

BUSINESSVANCOUVER September 9–15, 2014

Biggest financial financial planning planning firms firms in in Metro Metro Vancouver Vancouver Biggest Number of accredited local financial planners RANKED BY | Ranked BY | Number Rank '14

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 18 20

of accredited local financial planners

Company

Principal(s)

Financial services offered

Fee-based, commission or combination

Year founded locally

No. of accredited financial planners '14/'13

Freedom 55 Financial 1111 Georgia St W Suite 1200, Vancouver V6E 4M3 P: 604-685-6521 F: 604-685-9666 www.freedom55financial.com RBC Royal Bank of Canada 1055 Georgia St W, Vancouver V6E 3S5 P: 800-769-2511 F: 604-665-6985 www.rbcroyalbank.com CIBC 400 Burrard St Suite 430, Vancouver V6C 3A6 P: 604-665-1645 F: 604-665-1114 www.cibc.com

Reid McGruer, regional director

Financial planning, benefits consulting and estate planning

Commissionbased

1874

316 305

Graham MacLachlan, regional president, B.C.

Financial planning, investment advice, credit, banking, estate planning, retirement planning and education

Combination

1864

276 2831

Linda Bowyer, vice-president, Vancouver Lower Mainland, Mike Stevenson, SVP, retail markets, Western Canada Mike Flanagan, regional VP, Western Canada

Full range of financial services

Combination

1867

1802 1802

Financial planning, including retirement, spousal and child education planning, in-trust Combination account investments, estate, tax and business succession planning, charitable giving and a minimum annual strategies update

2001

115 108

Karl Krokosinski, president, Ian MacLean, VP, compliance

Estate and succession planning, financial planning, life insurance

Combination

1976

112 116

Sharon Moskalyk, vice-president

Wealth management: investment, retirement, estate and tax planning, mortgages, insurance, cash management, estate planning and brokerage services

Commissionbased

1926

102 108

Mike Bonner, senior VP, personal and commercial banking, B.C. and Yukon, BMO Bank of Montreal Tamara Vrooman, president and CEO

Financial services

Combination

18873

99 62

Full-service financial institution

Combination

1946

78 87

Scott Masters, regional vice-president, Integrated wealth management solutions, investment strategies, financial planning, Combination Western Canada risk management and insurance, tax and estate planning, cash and credit management

1995

682 681

Manulife Securities Inc4 925 Georgia St W Suite 1310, Vancouver V6C 3L2 P: 800-991-2121 F: NP www.manulife.ca Investment Planning Counsel 2680 Skymark Ave Suite 700, Mississauga L4W 5L6 P: 877-212-9799, 604-299-8683 F: 905-212-9798 www.partnersinplanning.com ScotiaMcLeod 650 Georgia St W Suite 1945, Vancouver V6B 4N7 P: 604-661-7400 F: NP www.scotiamcleod.com Coast Capital Savings Credit Union 15117 101st Ave, Surrey V3R 8P7 P: 604-517-7400 F: 604-517-7405 www.coastcapitalsavings.com BlueShore Financial 1112 Lonsdale Ave, North Vancouver V7M 2H2 P: 604-983-4500 F: 604-985-6810 www.blueshorefinancial.com National Bank Financial 666 Burrard St Suite 3300, Vancouver V6C 2X8 P: 604-623-6777 F: 604-682-1026 www.nbfwm.ca

NP

Mutual funds, brokerage facilities, RRSPs, private accounts, insurance, annuities and money products

Combination

NP

48 33

NP

Mutual funds, estate planning, group benefits plans, financial planning, RRSPs, RRIFs and RESPs

Commissionbased

1986

45 NP

Todd Ferguson, western regional manager, managing director

Financial planning, estate planning, retirement planning, educational planning, multigenerational planning, insurance and investment advice

Combination

1921

40 40

Don Coulter, interim president and CEO Full-service financial institution

Salary

2000

34 28

Chris Catliff, president and CEO, Fred Cook, CIO

Full-service financial institution

Combination

1941

32 27

Ronald Walchuk, vice-president, regional manager

Combination

19795

29 NP

Nicola Wealth Management 1508 Broadway W Suite 500, Vancouver V6J 1W8 P: 604-739-6450 F: 604-739-6451 www.nicolawealth.com First West Credit Union 6470 201 St, Langley V2Y 2X4 P: 604-501-4260 F: NP www.firstwestcu.ca Prospera Credit Union 32071 South Fraser Way Suite 500, Abbotsford V2T 1W3 P: 888-440-4480 F: 604-864-6690 www.prospera.ca Rogers Group Financial 1770 7th Ave W Suite 500, Vancouver V6J 4Y6 P: 604-732-6551 F: 604-732-6553 www.rogersgroup.com

David Sung, president, John Nicola, chair and CEO

Complete wealth management: comprehensive financial and retirement planning, risk planning, estate and investment planning including discretionary portfolio management; partners with National Bank of Canada and offers full-service private, personal and commercial banking Financial planning and investment advice, discretionary portfolio management, specialized tax planning and estate planning

Combination

1994

28 29

Launi Skinner, CEO

Full-service co-operative financial institution

Combination

1946

21 201

Bruce Howell, president and CEO

Banking and wealth management services; full-service financial institution

Combination

1942

19 19

Brett Simpson, chairman, Clay Gillespie, managing director, Barbara Simpson, COO and CFO Garry Zlotnik, president

Comprehensive financial, estate and investment planning; discretionary portfolio management services also offered

Combination

1973

19 18

Insurance and retirement planning, employee benefits, structured settlements and private investment management

Combination

1980

15 14

TD Wealth Financial Planning 700 Georgia St W 11th floor, Vancouver V7Y 1A2 P: 604-482-2442 F: 604-482-2432 financialplanners.tdwaterhouse.ca Customplan Financial Advisors Inc 1500 Georgia St W Suite 1900, Vancouver V6G 2Z6 P: 604-687-7773 F: 604-687-7763 www.customplanfinancial.com Investors Group Financial Services 666 Burrard St Suite 770, Vancouver V6C 2X8 P: 604-682-5431 F: 604-681-3207 www.investorsgroup.com BMO Financial Group 595 Burrard St, Vancouver V7X 1L7 P: 877-225-5266 F: 604-665-2610 www.bmo.com Vancouver City Savings Credit Union (Vancity) 183 Terminal Ave, Vancouver V6A 4G2 P: 604-877-7000 F: 604-877-8292 www.vancity.com Assante Wealth Management 2 Queen St E, Toronto M5C 3G7 P: 1-800-268-3200 F: 1-866-645-4447 www.assante.com

ZLC Financial Group6 666 Burrard St Suite 1200, Vancouver V6C 2X8 P: 604-688-7208 F: 604-688-7268 www.zlc.net

Sources: Interviews with above firms and BIV research. Other firms may have ranked but did not provide information by deadline. NP Not provided 1 - 2012 figure 2 - BIV estimate 3 - Founded 1817 in Canada 4 Manulife Financial Corp is acquiring the Canadian operations of Britain's Standard Life PLC, subject to regulatory and Competition Bureau approval 5 - Company founded in 1859 6 - Formerly Zlotnik, Lamb & Co

Next week’s list – Top 100 fastest-growing companies in B.C.

Business in Vancouver makes every attempt to publish accurate information in the List, but accuracy cannot be guaranteed. Researched by Carrie Schmidt, lists@biv.com.

BIVLIST Tax rules for Canadian ‘U.S. persons’ are complex and potentially costly

Kim Inglis Money’s Worth

T

D Economics reports that more than 500,000 Canadians spend significant periods of time in the United States. These individuals may be unaware that a Canadian can be deemed a U.S. person and subject to U.S. tax filing requirements if holding certain investment vehicles.

The definition of a U.S. person is quite broad. It generally includes U.S. citizens and residents, U.S. green card holders, anyone with a substantial connection to the U.S. and certain entities organized in the U.S. The Internal Revenue Service (IRS) says anyone deemed to be a U.S. person holding certain investment vehicles is subject to passive foreign investment company (PFIC) rules.

A PFIC is a non-U.S. corporation that has either 75% or more of its gross income consisting of passive income or 50% or more of the fair market value of its assets consisting of assets that produce passive income.

According to an IRS directive, this means the majority of Canadian mutual funds and

exchange-traded funds (ETFs) are PFICs. In some instances, certain public companies such as real estate investment trusts are considered to be PFICs. PwC notes that PFIC rules are designed to prevent taxpayers from deferring tax on passive income earned through foreign corporations or converting this income into capital gains taxed at preferential rates. There is much debate as to whether Canadian funds belong in that category.

The Investment Funds Institute of Canada argues there is sufficient similarity between the tax treatment of mutual funds in Canada and that in the U.S. to support the exclusion of Canadian mutual funds from the PFIC rules. It has made a submission to the U.S. Congress to exclude Canadian mutual funds from PFIC rules; however, there is yet to be any change.

U.S. persons who hold PFICs have three options regarding taxation. The default taxation method (excess distribution) is the most onerous. Generally speaking, gains and distributions are fully taxed as income.

Also, amounts allocated to the previous three years are subject to U.S. tax at the highest marginal rate and subject to deemed interest charges.

However, there are two alternative choices that U.S. persons can make. One is the mark-to-market election,

which requires investors to report all distributions as ordinary income and recognize all increases/decreases to the value of the investment as a gain/loss on their holdings, even if they were not disposed of.

The preferred election for most investors is the qualified electing fund (QEF), which requires investors to report their pro-rata share of the fund’s earned income and capital gains for U.S. tax purposes. This means that distributions or gains from sale would be taxed in a similar fashion to how mutual funds in the U.S. are normally taxed.

Some mutual fund companies are supplying tax reporting information to help U.S. persons make the QEF election, and investors should ask their fund companies for the necessary data. For example, Fidelity Investments provides a PFIC annual information statement. On the ETF front, Purpose Investments is also helping investors comply with PFIC rules.

PFIC filing rules are exceedingly complex, and noncompliance can bring costly consequences. Investors should seek advice from a qualified U.S. tax expert. •

September 9–15, 2014

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When selecting a professional to manage your investments, look for the CFA designation.

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One thing is certain in the financial wOrld.

Kim Inglis (www.reynoldsinglis.ca) is an investment adviser and portfolio manager 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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BUSINESSVANCOUVER September 9–15, 2014

askthe experts

Set ground rules before your spouse becomes your business partner

QUESTION | My

spouse and I have the opportunity to work together.

What should we be aware of before we start such an arrangement?

DAVID ENNS | Co-owner, Laughing Stock Vineyards

F

ocus on strengths and know your weaknesses: We each bring certain skills and strengths to our winery business. My wife, Cynthia, is the spreadsheet queen and can manage a lot of detail like calculating costs and planning, while I focus on the bigger picture of winemaking decisions and the practical part of keeping all the parts moving in this manufacturing business. However, when it’s just the two of you, it’s really important to respect when you need to step up or step back to get the job done.

Communicate: Just because you are married, don’t assume that you can read each other’s mind. We have found it’s critical to check in with each other on our priorities for that day or that week. The year we built the winery building and were still running our first investment consulting business, we would have a morning powwow in front of a whiteboard, mapping out that day’s priorities and figuring out who was doing what.

Set out rules of engagement: While we may be sharing our lives as a married couple, we had not worked together operating a winery and thus needed to set down some rules of engagement, particularly in the first year. These rules included making a conscious effort to be respectful and considerate with each other, as if we were work colleagues, not spouses. It helped to use the mental filter, “Would you say that in that tone to your co-worker?” before we opened our mouths.

Define work/play boundaries: Working together can quickly permeate all aspects of our daily routine. Therefore it became important to us to set boundaries of when we would talk about work and when work-related topics were off limits. Dinnertime with family, for example, was a no-go zone for work conversations. However, we’ll still enjoy a glass of wine together at dinner, even though “wine” is “work.”

BRIAN SOREGAROLI | Co-founder, Transformation Catalyst Corp.

H

aving worked together for the past decade-plus, we advise a number of things when couples ask us about working together. Here are the most important things to consider.

Conflict resolution strategies: The No. 1 thing to be aware of is that whatever you are experiencing now in your relationship – especially the good and the bad – you can expect to experience more of it. Everything is amplified; there are higher highs and lower lows. Be prepared to celebrate the wins and weather the trials that are sure to come.

The wins are the easy part. They will serve to enhance your relationship. And, after all, that is probably a driving reason you’re even considering this in the first place.

However, before embarking on a venture together you’d best set some ground rules about how you will deal with the inevitable friction you will encounter.

The usual separation between personal and work life becomes blurred, and you need strategies to defuse conflicts so they don’t fester and erode the foundation of your relationship.

Be prepared to disagree with each other: Practice your conflict resolution strategies on the minor issues so you both know what to expect from each other when the big stuff surfaces.

Be prepared to have different styles of working and interacting with clients, and talk it through so you can meet both your expectations of each other and present a united brand in terms of your clients’ experience in working with you.

The upside is that once you figure out those strategies, they will work in all aspects of your relationship.

MICHELE SOREGAROLI | Co-founder, Transformation Catalyst Corp.

S

hared values: You probably already have a good sense of where your values and those of your spouse are congruent and where they diverge. Decisions based on shared values will reinforce harmony within your relationship. However, conflict will arise when you and your partner make decisions drawing on differing values. Creating a decision hierarchy based on your shared values will help to keep you on common ground so you can each make decisions independently that the other spouse is likely to support. And with luck and practice you won’t have to rely on your conflict resolution strategies quite so often.

Mutual respect: Mutual respect is the foundation of any healthy relationship, whether it be with a co-worker, friend or family member – and especially your spouse.

Hold this respect dear when working together as it will make you proud when your partner gets a big win, and it will help you to keep focused on the situation, not on your spouse, when things get tough.

Problems are going to arise no matter how well you anticipate and plan your business. And when things really take a turn for the worse, a strong mutual respect for each other will go a long way toward staying focused on the specifics of the circumstances. You won’t find yourself questioning your partner’s intentions or being distracted by other issues that won’t resolve the problem.

Yell at each other – in front of your children: Well, not exactly “yell at each other,” but heated discussions are an important part of working together, solving problems and finding common ground. If you work together, your children will witness some of these exchanges. And that’s a good thing. Because they will learn that it is safe to disagree with each other, that disagreements get resolved and that you still love and support each other even through the rough patches.

Next week’s question – How do I keep a tightly knit workforce as my business grows rapidly?

Comments curated by BIV news staff | Have a question for the Experts? Email: news@biv.com

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BUSINESSVANCOUVER September 9–15, 2014

profile | Gregg Saretsky

19

Expanding horizons WestJet CEO Gregg Saretsky championed Alaska Airlines’ initiative to double its fleet; now he’s pushing major expansion plans at Canada’s second-largest airline

WestJet CEO Gregg Saretsky oversaw a significant shift in the airline’s business model, moving its focus to multiple fleet types |

Mission Expand WestJet’s regional and international presence

Assets

Nearly three decades in the airline industry; became WestJet CEO in less than a year

Yield

The first WestJet CEO to introduce a second fleet type to the airline; helped double Alaska Airlines’ fleet

BY Tyler Orton torton@biv.com

A

s vice-president of marketing and planning for Alaska Airlines (Nasdaq:ALK), Gregg Saretsky had long championed the expansion of the small carrier’s fleet into parts unknown.

After joining the Seattle-based airline in the late 1990s, the Canadian executive finally persuaded the leadership team and the board to seize upon newly open slots at Ronald Reagan Washington National Airport in Washington, D.C. “The very first week of our service to Washington, D.C., coincided with 9/11,” recalled Saretsky, now CEO of WestJet (TSX:WJA).

“So when the skies shut down for those three

days, I thought, ‘Now what?’ And eventually the skies reopened and they kept the Washington National Airport closed [due to security concerns].”

Saretsky, who is scheduled to speak at the Vancouver Board of Trade September 16, admitted he wasn’t the only one at Alaska to fall into “now what?” mode. The airline would have to spend the next year operating at Dulles International Airport in nearby Virginia.

But the carrier managed to double its fleet from about 60 to 120 planes as Saretsky pushed his vision of expansion throughout his decade-long tenure at Alaska.

What was once a regional player on the West Coast started flying to the Eastern Seaboard, Hawaii and Canada. Today it’s the seventhlargest airline in the U.S.

WestJet

“We proved to ourselves that we could actually fly beyond our comfort zone, outside of the region we’re known for,” said Saretsky, who was born in Quebec and grew up in B.C. His confidence in launching services in unfamiliar territories did not wane after leaving Alaska Airlines in 2008.

He returned to Canada in 2009 to serve as vice-president of WestJet Vacations. He was CEO by 2010. And by 2013, the company was in the midst of launching a regional airline, WestJet Encore, in Canadian territories it had never serviced before.

“I was joining not for the opportunity that they were hiring me for, but for the potential for something bigger down the road,” Saretsky said. continued on page 20

20

BUSINESSVANCOUVER September 9–15, 2014

profile

Expanding Horizons

[Saretsky has] been at the helm a relatively short period of time and yet the amount of change that has come through is amazing

Continued from page 19

“I was not prepared for nor had I anticipated I’d be CEO in less than 12 months.”

Saretsky had spent the previous two decades working his way up the ranks at Canadian Airlines and Alaska and had even worked summers as a flight attendant during university.

“Here’s a new leader like me, untested really, in WestJet’s world,” he said.

“It’s always much tougher coming in at the top.”

And his plan to shake up the airline’s longtime business model – flying just one type of aircraft to help keep costs low – with the introduction of WestJet Encore was met with some skepticism among employees.

“So the executive team and I decided if we’re going to go to war and take on the competition in these regional markets, you better have all of your army lined up behind you,” Saretsky said.

That meant conducting town hall meetings and going to flight decks a nd ga l leys to ta l k to employees, all of whom own a stake in the company, about why starting a new airline would pay dividends.

By February 2012, employees voted 91% in favour of launching WestJet Encore.

In 2008, before Saretsky had joined WestJet, the airline’s

[] Richard Bartrem vice-president of community relations, WestJet

In 2008, before Saretsky had joined WestJet, the airline’s revenue was $2.55 billion while profit was at $178 million; by 2013, its annual revenue had jumped 35.7% to $3.66 billion and profit reached $269 million

revenue was $2.55 billion while profit was at $178 million.

By 2013, its annual revenue had jumped 43.5% to $3.66 billion and profits had reached $269 million. “[Saretsky has] been at the helm a relatively short period of time and yet the amount of change that has come through is amazing,” said Richard Bartrem, WestJet’s vice-president of community relations, who has worked with the

CEO since his 2008 hiring.

Bartrem specifically pointed to his boss’ ability to stickhandle a major strategic shift in WestJet’s business model by convincing both the board and employees to add the second fleet type to its roster. He said that wouldn’t have been possible without Saretsky’s deep knowledge of the aviation industry.

“He wants to understand – do

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“This is a tremendously complex and volatile industry, and I think the reassurance … for WestJetters is you have somebody at the helm that brings a tremendous level of knowledge to

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the business and does so in a way that is still true to the WestJet culture.”

WestJet’s ex pa nsion pla ns haven’t cooled. Ea rl ier th is summer, the low-cost carrier began offering flights to Dublin, Ireland.

And it announced in July it would introduce wide-body aircraft into its fleet beginning in the fall of 2015 in a bid to expand its international presence even further.

“Who would’ve imagined in 1986, or even in 2006, that WestJet would ever fly to Europe? It just wasn’t in the cards,” Saretsky said.

“The boundaries of our business, we’ve completely erased those.” •

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BUSINESSVANCOUVER September 9–15, 2014

21

Family Business

Good advisory boards make your business better

22

Family businesses can grow faster and improve financial results by establishing the right company advisory board

How you can use multiple wills to reduce probate fees in B.C.

24

Too many private company owners overlook an estate planning opportunity that can yield significant savings

Peter, Chris and Mike Mahony (left to right) joined brothers Paddy and Gerard when the clan opened its first Mahony and Sons pub at the University of British Columbia in 2006

Using family ties to secure advantages in B.C.’s competitive pub business hospitality | Close-knit

company management goes hand in hand with upbeat homespun atmosphere that benefits traditional pub operations

By Glen Korstrom gkorstrom@biv.com

A

pub’s success relies on bedrock elements such as its service and food, but an intangible and immensely valuable asset is its ability to make customers feel at home, as though they are with family.

Sean Heather understood this in the early 1990s when he opened his first of what are now six eateries: the Irish Heather.

Heather’s sister, Roisin, worked at the pub, as did his wife, Erin, whom he first met when she was a customer. Together, the trio

fostered a homespun family atmosphere that has helped the pub thrive to this day.

Family can also help when operating a pub because there is often an implicit trust and it is possible for a second generation to learn the business at a very young age.

Jeff Donnelly, who is perhaps Vancouver’s most successful pub operator with 17 venues in his Donnelly Group, had that advantage. His father, Peter Donnelly, owned a series of hotels and bars in Vancouver, Victoria and later Seattle.

Chris Mahony, who operates three Mahony and Sons pubs with four brothers, similarly told Business in Vancouver that

he also was able to learn from his father, Peter Mahony.

The elder Mahony formerly owned the Woods Hotel in Coquitlam, the Wheelhouse Pub in Surrey and the Fort Pub in Langley.

The Mahony family still owns North Delta’s Delta Lion Pub, which Chris’ brother Greg operates.

“I grew up in a large family of 11 kids so I’ve got eight brothers and two sisters,” Chris said. “At any given dinner there could be 30 to 40 people if everyone had a couple people over or there were relatives visiting. continued on page 23

22

Family Business

BUSINESSVANCOUVER September 9–15, 2014

Good advisory boards improve company business outcomes

Podium Pat Parker

I

ndividual- and familyowned businesses are a vital engine for growth in our economy. So finding ways to add to their success makes good sense.

One of the significant areas of interest today for family companies and small to medium-sized enterprises (SME) in general is corporate governance. The claim has always been that businesses that operate with advisory boards outperform those without advisory boards.

In March 2014 a study on the use of advisory boards undertaken by the Business Development Bank of Canada demonstrated that SMEs that use advisory boards have superior growth and better

financial results. While there is strong interest in advisory boards, only 6% of Canadian SMEs have them.

What is an advisory board?

An advisory board is a grouping of independent directors who have no ties to a company other than as a director.

Usually there are three or more independent directors depending on the size and complexity of a business, and where appropriate there may also be committees formed to attend to matters such

Every Day is an Opportunity Every business transaction you make has tax implications.

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as the audit and executive compensation. Independent directors have no fudiciary responsibility or voting rights; their purpose is to help the CEO and the leadership team perform better by giving support and objective oversight and ensuring accountability. An advisory board brings a higher level of rigour and discipline into business practices and policies. It can remove complacency if it exists and address any blind spots of the leadership team, giving the firm a critical edge to compete. Advisory boards can add value in many areas, including: •Corporate strategy: Often the CEOs of family businesses or SMEs get caught up in dayto-day operations with little time to develop strategy. The board promotes the strategic process and brings experience and insights into the competitive landscape, growth opportunities, human resources and best practices.

•Succession planning: While a long-term plan for succession of key leaders in a company should be the goal, situations can develop in which illness or death creates a need for immediate action.

Independent directors may also serve to advise and/or mentor family members who seek to be a growing part of the leadership of the firm.

•Risk management: Independent experienced and disciplined perspectives on risk management.

•Contacts and resources: Directors can leverage their experiences and contacts in assisting the company as challenges and opportunities arise.

•Ownership transition/exit strategies: As a company evolves and prepares to hand over control to the next generation or considers exist strategies such as a sale, merger or going public, experienced independent advice can be helpful.

Who should be on your advisory board?

This is the most important question in creating an effective advisory board. It’s critical to identify the competencies, experience and character of potential candidates to meet your company’s needs. Your company might need consulting help in this area to provide an objective assessment of your needs and the suitability of potential candidates, but here are a few guidelines.

Aim for independent directors who are not part of your inner circle of friends or your current professional service providers such as lawyers and accountants.

While you will have to pay market rates for independent directors, remind yourself that these directors could probably make more money elsewhere.

Most good advisory boards are populated with people who see the meetings as a labour of love. They enjoy the camaraderie and like to operate in an informal atmosphere. The character of candidates and the chemistry among all of the board will be important.

Do not expect to operate a “show board.” By that I mean you are unlikely to attract good candidates if they are not treated with respect or do not see a meaningful role for them with regular meetings that follow a strong agenda and have good interaction. This does not require excessive formalization of meetings and content, and directors do not expect to be involved in day-to-day operations.

Think about ways to involve your independent directors with appropriate orientation and exposure to your calendar of activities, so they gain more insight into the organization and therefore make better contributions. • Pat Parker (parkerandassocs.com) is president of Parker & Associates. He assists in the creation of advisory boards and is an active director.

Family Business Family ties Continued from page 21

That’s where we learned the hospitality part of the business.”

He credits his father, however, for instilling in him the importance of having a great menu.

“From the mid-1980s, my father always saw the future of the business being in the food side of the operations – developing great menus and building great kitchens to execute the menus,” Chris said.

When he and brothers Peter Jr., Mike, Gerard and Paddy opened their first Mahony and Sons pub at the University of British Columbia (UBC) across from the War Memorial Gym in 2006, they put that insight into practice.

“There is a trust that comes with being family,” Chris said.

“When we grew up we all got along, and there hasn’t been any conflict working together in the family business.”

Each brother also knows his role.

Chris, who at 43 is the eldest sibling, has an overarching role.

He handles business development, marketing and financial arrangements with banks. Mike, 40, is general manager of the UBC pub while Peter, 38, is general manager of the brothers’ newest pub on Stamps Landing, which opened in August.

The two youngest of the five Mahony and Sons principals,

When we grew up we all got along, and there hasn’t been any conflict working together in the family business

[] Chris Mahony principal, Mahony and Sons

33-year-old Gerard and 34-yearold Paddy, run the Mahony and Sons pub outside the Vancouver Convention Centre.

“Irish pubs are traditionally homey and cozy and comfortable,” Chris said. “Our spaces are that, but there are layers of detail that we have in the design.”

One small detail that shows how the brothers revere their pubowning ancestors is that they took a handwriting sample from their great-grandfather Finbar’s wedding certificate and used that scrawl as the script used in the core of the company’s name.

They added the words “and Sons” in the same handwriting.

Finbar was chosen because he ran the Good Woman Pub in Australia in the 1870s. •

BUSINESSVANCOUVER September 9–15, 2014

23

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Planning for Success Means Planning for Succession You, and the business you’ve worked so hard to build, can both thrive long after parting ways. Our succession planning team works closely with you to develop an ExitSMART™ plan to take care of your family, employees and stakeholders while protecting your legacy.

To ExitSMART™, contact: Craig Donnelly, CPA, CA T: 1.877.688.8408 (Vancouver) E: craig.donnelly@mnp.ca

Eben Louw, CPA, CA T: 1.877.853.9471 (Abbotsford) E: eben.louw@mnp.ca

24

family Business

BUSINESSVANCOUVER September 9–15, 2014

More wills and ways to help business owners reduce probate fees

Podium Carmen Thériault

M

any businesses are owned through privately held companies. Yet people who own shares of private companies often overlook an estate planning opportunity that can achieve significant savings for their estates on their death.

That opportunity is the use of multiple wills to reduce probate fees. Until recently, there was a question as to whether multiple wills could be used in British Columbia for that purpose. But in March, the Wills, Estates and Succession Act (WESA) came into effect, making it clearer that the use of multiple wills is indeed a viable estate planning strategy in this province.

Probate fees are paid when an individual dies and an application is made to the court to probate his or her will.

A grant of probate has the effect of confirming that the will

is valid and that the executor appointed by the will has authority to deal with the assets of the deceased.

As a practical matter, it is often impossible for an executor to deal with assets of an estate without a probated will if those assets have significant value.

Also, some assets, such as land, generally cannot legally be transferred after an owner’s death without a grant of probate if there is a will or without a grant of administration if there is no will.

Before issuing a grant of probate, the court requires that a fee be paid based on the value of the estate. B.C. has the second-highest probate rate in Canada, calculated at approximately 1.4% of the value of all assets owned by the deceased in the province.

And if the deceased was ordinarily resident in B.C. immediately before death, the fee is also based on the value of intangible personal property (such as bank accounts, stocks and bonds), wherever located.

There is no maximum cap and no deduction for debt owed by the deceased other than debt secured by a charge on one or more of the deceased’s assets, such as a mortgage on real property.

UPCOMING EVENTS

By comparison, Ontario has the highest probate fee rate in Canada, at approximately 1.5%, whereas the maximum payable under Alberta law is $400.

The use of multiple wills to avoid probate fees has been accepted in some provinces, including Ontario, for many years.

But until WESA came into effect, there was a question as to whether the strategy could be used in B.C. because of the previous governing legislation’s wording.

That question seems to have been resolved, so while the courts have yet to confirm that this interpretation of the legislation is correct, it should now

Register online, boardoftrade.com/energy2014

Energy Forum 2014: Keeping pace with global change Wednesday, October 8, 2014 7:15 a.m. − 4:15 p.m. | Vancouver Convention Centre West Speakers include:

Session topics will include:

From left to right Honourable Greg Rickford, Minister of Natural Resources and Minister for the Federal Economic Development Initiative for Northern Ontario, Government of Canada Honourable Rich Coleman, Minister of Natural Gas Development and Minister Responsible for Housing and Deputy Premier, The Province of British Columbia Renata King, Director, Business Development, Northern Development Initiative Trust

British Columbia's Energy Economy: The impacts of B.C.'s energy and resource industry on our economy British Columbia's Energy Opportunity: Discussion on active projects across the province Global Energy Markets: Remaining competitive amidst changing global dynamics Energy Innovation: New technologies and emerging trends Procurement Workshop: Real-time information on accessing opportunites

Brian A. Jackson, Shutterstock

be possible to use one will that governs assets that can be dealt with without a grant of probate – typically private company shares and shareholder loans – and a second will that deals with all other assets.

On the death of the individual, only the second will is probated, and probate fees are paid only on the value of the assets listed in it.

The savings for some estates can be significant. For example, if the value of private company shares is $10 million, the probate fee reduction would be $140,000.

But as with most estate planning strategies, there are complexities to address and pitfalls

to avoid when using multiple wills.

For example, because of the wording of the applicable provision in WESA, the executors appointed by each of the wills should be different, with no overlap.

For some people, that presents a problem because they have a short list of people they trust to play this role and because they want consistency in the administration of their assets. Putting in place wills that appoint different executors may give rise to conflicting decisions. Also, a will normally includes a clause revoking all previous wills.

That kind of clause must be drafted carefully to ensure that multiple wills do not inadvertently revoke one another.

Other clauses must also be drafted with care so that intended assets and beneficiaries bear the burden of any debts, and so that legacies are not duplicated.

There are ways to address all of these concerns, and therefore, given the potential savings, using multiple wills to minimize probate fees is an option well worth considering. • Carmen S. Thériault is a partner at Bull, Housser & Tupper LLP leading the firm’s wealth preservation group.

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boardoftrade.com

BUSINESSVANCOUVER September 9–15, 2014

HOw

Meeting the challenge of modern mobile security

I did it David Snell | CEO

25

helped software startup’s founder turn a good idea into a promising product delivering the iPad, we really started the march to replace laptops and PCs. Peter knew enough about technology – he was at CIBC Security for some years in Toronto, as well as Nortel.

“He saw … bring-your-owndevice was going to become more common; BlackBerry was very secure but unfortunately being replaced by consumer Android and iOS devices; passwords were becoming very complex; and security breaches, he knew, were going to start happening in mobile because mobile was just not as mature as the Internet.

“He started to look at how you could build a separate container [for work-related data] that would be separate from personal that would encrypt data … and also look at a way that a mobile workforce could authenticate themselves without having to

Business in Vancouver’s “How I did it” feature asks business leaders to explain in their own words how they achieved a business goal in the face of significant entrepreneurial challenges. In this week’s issue, David Snell talks about how Vancouver startup FusionPipe is getting a toehold in the competitive mobile security market.

P

“

eter Luong founded the company in 2010. He had a vision for mobile security and password-less authentication then, and he spent the next four years using his own money, about $500,000, and government grants. … And then really he got to the point where he had to make a decision: ‘Do I abandon this, because I’ve put enough money in?’

“When Steve Jobs told us in 2007 what we wanted, which is smartphones, and then in 2010 announced and started

use passwords and do it in a secure manner.

“In September 2013, he was getting ready to look at launching the products in 2014.

“He was getting married on a beach in Hawaii, saying, ‘OK, what do I do now? I put a lot of money in and my wife’s kind of questioning my sanity. Do I get a job, or do I follow the dream?’

“So he followed the dream. He persevered and went out looking for a CEO, which is where he found me. I’ve been advising Peter since October 2012.

“What he wanted to do was find a CEO to grow the company, hire the staff and bring in the first seed round of the company.

“We’ve now gone from an oversubscribed seed round to a late seed round that’s already full, and we’re in due dilegence [proceedings] for Series A [financing] in 2015.

Q&A

“One of the things Peter was very smart about – and not all entrepreneurs are smart about doing this – he hired Gowlings [law firm Gowling Lafleur Henderson LLP] and did a very, very complex patent. It cost a lot of money for a startup, but we’ve just got an opinion letter from the Canadian Intellectual Property Office saying that 85% of our patent is unique and patentable, and it’s useful technology.

“That builds a whole bunch of things for the future. … It protects your intellectual property from other folks coming in and gives a bunch of credibility to the intellectual property itself when you’re talking to investors.

“We have just been approved for the Apple Store for both our [products].

“We could never have gotten there if we hadn’t gotten a team on board to strategize and execute on this plan.” •

Q : What government funding sources were you able to access in the early days of the company?

A : NSERC (Natural Sciences and Engineering Research Council of Canada) and Mitacs were the first ones. We’ve been able to get SRED (Scientific Research and Experimental Development) funds every year. This year was the first time we got an IRAP (Industrial Research Assistance Program) grant.

Q : What is your biggest challenge right now?

A : We’re in a very tight [talent] market here in Vancouver. The very good folks have their choices.

April ’14

FusionPipe’s patent is accepted

Snell comes on board as CEO and increases staff to 14

Sept. ’14

David Snell starts advising Luong

Luong applies to patent FusionPipe’s technology

Jan. ’14

March ’13

Peter Luong founds FusionPipe with one employee: himself

2012

2010

K FUsionPipe dream comes true

FusionPipe’s first commercial products go on sale in the Apple Store

Next week’s How I Did It – David Pasin, owner, TBF Environmental Technology

How did you do it? Do you or does someone you know have a story to share? Contact Nelson Bennett at nbennett@biv.com

Seeking BC’S Top ExporTErs The BC Export Awards recognize the innovative approaches and unique contributions of British Columbia export companies across all sectors and in all regions of the province, as well as the individuals who contribute to their success.

Applications can be submitted in the following nine sector award categories plus two individual awards: the Leadership Award and the international Business Studies Award. Further, an exporter of the Year Award is presented to one of the sector award winners.

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new exporter ■ Sustainability ■ Professional Services ■ Manufactured Products ■ natural Resources ■ Consumer Products ■ Advancing Technology & innovation ■ Digital Media & entertainment ■ Minister’s Award for export Job Creation

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Visit www.canadaexportawards.com for more info.

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26

BUSINESSVANCOUVER

send your free listing to fortherecord@biv.com

September 9–15, 2014

for the record People on the Move Email your For the Record information to: fortherecord@biv.com.

Please include a high-resolution, colour headshot where possible.

Development/ Construction Paul Klimczak Paul Klimczak has joined ZGF Cotter Architects as a senior project architect.

Klimczak brings experience in all phases of building design, with a specific focus on health care and institutional work. Klimczak’s experience in the health-care sector includes serving as an editor and evaluator of RFP submittals advising public health authority clients and P3 procurements.

Education Chantal Gionet Chantal Gionet has joined York House School as head of school. Gionet’s previous positions include assistant head of school at Pickering College and, prior to that, head of upper school at Havergal College. Gionet’s focus is on developing the whole student and preparing students to be courageous leaders and active global citizens.

Karen Keilty Karen Keilty has been appointed to the board of Quest University Canada; the new appointment expands the board to eight members. Keilty brings more than 30 years of experience in audit and advisory services; she spent 30 years at Deloitte, including 20 years as a partner. Keilty serves as a commissioner for the BC Utilities Commission and as a corporate director; she is a past president and a council member of the Institute of Chartered Accountants of British Columbia, a past director of the BC Paraplegic Foundation, past chair of the Vancouver Enterprise Forum, past board founding member of the Forum for Women Entrepreneurs, and past director of the BC Chamber of Commerce.

Finance Dan Blue has been appointed chief financial officer at Central 1 Credit Union. Blue has been interim CFO since June 9, following the departure of previous CFO and SVP, strategy, Helen Blackburn. Blue also served as interim CFO from August 2013 to January 2014 while Blackburn was in the role of interim president and CEO. Blue joined Central 1 in 1999 and has been VP, finance, since 2012. Prior to joining Central 1, Blue was an audit manager with Grant Thornton LLP and managed audit engagements for a wide range of clients, including

both public companies and financial institutions.

Health/Medical Bob Rai and Punit Dhillon have joined Venturi Ventures Inc.’s board of directors. Rai is an entrepreneur with 18 years of experience in operating a string of Medicine Shoppe Pharmacy outlets in Vancouver – the first in Canada to launch two new pilot programs: point-of-care HIV tests and screening for chronic kidney disease. Rai is also chairman and CEO of Canadian Pacific Global Pharmaceuticals and chairman of its subsidiary, PharmaCanada Inc. Dhillon is co-founder and CEO of OncoSec Medical Inc., a San Diego-based biopharmaceutical company developing advancedstage immunotherapy to treat solid tumours. Punit previously served as vice-president of finance and operations at Inovio Pharmaceuticals Inc. David Raffa, Ron Palfery and Kirk Exner have resigned as directors of Venturi.

Non-Profit Carey Price Carey Price, goaltender for the Montreal Canadiens, has been appointed Breakfast Club of Canada’s First Nation ambassador. Price recently celebrated the launch of two school breakfast programs in his hometown of Anahim Lake.

siGnaTure evenTs OCTOBer 3 - 13, 2014

The 34th annual

Fall OkanaGan

Wine FesTival October 1, 7:00pm – 9:00pm BriTish COlumBia Wine aWards and reCepTiOn The laurel packinghouse, kelowna. price: $50 (all incl).

October 3 & 4, 7:00pm – 9:30pm The WesTJeT Wine TasTinGs rotary Centre for the arts, kelowna. price $70 (all incl) or $120 (all incl) for both nights.

October 8, 7:00pm – 9:00pm The Blind Wine & Cheese sOiree By valley FirsT The laurel packinghouse, kelowna. price: $50 (all incl).

October 9, 6:30pm – 9:00pm alexis de pOrTneuF presenTs “The yOunG CheFs” “The atrium” Centre for learning Okanagan College, kelowna. price: $60 (all incl).

October 9, 7:00 – 9:00pm OrGaniC Cheese and Wine - a naTural pairinG manteo resort, kelowna. price: $47 (all incl).

TiCkeTs FOr all aBOve evenTs: www.selectyourtickets.com or 250.717.5304 October 10 & 11, 6:00pm – 9:00pm valley FirsT Grand Finale COnsumer TasTinGs penticton Trade and Convention Centre. price: $65 (all incl) or $110 (all incl) for both nights.

TiCkeTs: www.valleyfirsttix.com or 877.763.2849

CreaTe yOur OWn Wine sTOry All Signature Events are Get Home Safe Events.

For more information visit our website, www.thewinefestivals.com

For more information or to Get Tickets visit www.thewinefestivals.com or call 250 861 6654

Real estate Dave Harlos Dave Harlos has joined The Value Property Group, a privately held commercial real estate holding group, as director of finance. Harlos is a senior finance leader with significant experience in corporate structuring, amalgamations, tax planning and financial reporting in the real estate industry.

Resources Tim Livesey and Tim Fletcher have been appointed COO and VP, exploration, respectively, at Reservoir Minerals Inc. Livesey will be responsible for managing Reservoir’s advanced projects including the Timok joint venture project with Freeport-McMoRan Exploration Corp. and general operational activities. Livesey is a geologist and has been involved in the international exploration and mining industry for more than 25 years, including a three-year tenure as CEO of Tethyan Copper, where he is currently a director. Fletcher will be responsible for managing Reservoir’s portfolio of exploration projects throughout Europe and providing broad technical and management expertise to Reservoir’s team. Fletcher has more than 30 years of experience in international exploration with emphasis on exploration for porphyry and epithermal coppergold deposits. Fletcher recently focused on the Tethyan belt for Barrick Gold and prior to that worked in South America with Magma Copper, Homestake Mining and Mount Isa Mines.

Technology Lewis J. “Lew” Shuster has been appointed chairman of Response Biomedical Corp.’s board of directors. Peter A. Thompson, outgoing chairman, will remain on the board. Shuster joined the board as director and chairman of the audit committee in 2011; he is currently CEO of Shuster Capital.

From 2003 to 2007 he served as CEO of Kemia Inc., a drug discovery and development company, and has previously held executive positions with Invitrogen Corp., Pharmacopeia Inc., Human Genome Sciences and Microbiological Associates. Shuster currently serves as a board member and audit committee chairman for Cleave Biosciences Inc. as well as HTG Molecular Diagnostics Inc. and serves as a board member of TissueNetix Inc., Active Motif Inc. and Mast Therapeutics Inc.

Companies on the move Name change Kobex Minerals Inc. has changed its name to Kobex Capital Corp. and continues as a Tier 1 company on the TSX Venture Exchange under the symbol KXM. Kobex’s new ISIN is CA49989D1033 and its CUSIP number is 49989D103.

The Human Resources Management Association (HRMA) in British Columbia has dropped “BC” from its name and launched its new look, including its logo and colour palette, which can be viewed at www.hrma.ca.

New in town Aburi Restaurants Canada has opened a new Japanese restaurant in downtown Vancouver. The modern teppan-style Gyoza Bar + Ramen is located at 622 West Pender. For more information, visit gyozabar.ca.

Hats Off Business in Vancouver welcomes submissions from local small businesses and large corporations alike that demonstrate examples of corporate philanthropy and community involvement in the Vancouver area.

High-resolution images are also welcome.

St. Michael’s Centre Auxiliary in Burnaby donated $12,000 from sales in its gift shop to Tapestry Foundation for Health Care, in support of St. Michael’s Centre residents. The gift is the largest donation by the auxiliary since it was first established in 1980 and will help support the purchase of a new combination oven for the site and fund resident activities.

Coast Capital Savings donated $10,000 to Big Brothers of Greater Vancouver in support of the agency’s teen mentoring programs across the Lower Mainland.

Steve Curtis, CEO of ZAG Global, and 33 other employees of the ZAG team had a front-end loader of ice water dumped on them as a part of the ALS (amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease) ice bucket challenge. Curtis donated $1,000, and for every staff member who participated, the company’s new charitable program, ZAG Heartbeats, donated $100.

Including individual donations

by ZAG staff members, the total contribution was more than $5,300.

The City of Vancouver’s cultural infrastructure grant program donated $150,000 and the Department of Canadian Heritage’s cultural spaces fund donated $314,970, for a total of $464,970, to the Vancouver Opera for the installation of a new elevator. The addition of the elevator makes the O’Brian Centre for Vancouver Opera fully accessible.

Pan Pacific Whistler sponsored the recent annual Whistler Animal Shelter (WAG) Doggy Wash Day and donated $2,545 to the shelter. WAG volunteers, along with Shampooch, washed dozens of dogs and sold hamburgers, raising a total of $3,816.80 for the shelter. Each time a pet stays in Pan Pacific Whistler Village Centre, $5 is donated to WAG. Four-legged visitors to the hotel receive an amenity package that includes food and water bowls, a blanket, a pet card to hang outside the door for notification, dog treats and biodegradable poop bags. •

for the record

BUSINESSVANCOUVER September 9–15, 2014

27

trouble DISCIPLINE Real Estate Council of British Columbia The Real Estate Council of British Columbia (RECBC) announced August 27 that it has suspended the licence of 8th Avenue Elite Realty Ltd., which does business as 8th Avenue Elite Realty (“Elite”) in Surrey, and has frozen its bank accounts.

The RECBC says it suspended Elite’s licence in the public interest, as a result of the failure of the firm to account for trust monies held on behalf of clients.

D. Manning & Associates Inc. was appointed receiver on August 27 by order of the Supreme Court of British Columbia.

BUYER’S ALERT Companies listed below, which are not accredited by the Better Business Bureau, have failed to respond, as of August 29, to Better Business Bureau of Mainland BC’s efforts to mediate complaints from August 17 to August 23. In some instances, the company may have taken care of the complaint and considered the matter closed, or may believe the complaint is unjustified; however, if the BBB has not received a response, records cannot reveal either position. Please note that BBB

accredited businesses must respond to customer complaints that are brought to their attention. The companies listed are not members of this Better Business Bureau. Source: BBB. Ancient Mariner Exteriors Inc., Vancouver Atlantis Spas, Kelowna Breakaway Services Ltd., North Vancouver Canadian Van Lines, Langley Choice Furniture Ltd., Surrey City Nails and Spa Inc., Richmond Enterprise Rent A Car, Vancouver Erbe Feed, Dawson Creek Express Pardons Inc., Vancouver Factory Direct Furniture, Prince George FS The Flooring Store, Squamish Green Field Spa, Richmond Jardin Beauty Lounge, North Vancouver Municipal Parking Services Inc., Vancouver Plentyoffish Media Inc., Vancouver Pristine Cleaning Systems, Vernon Rejuvalash, Vancouver School Wizard Inc., Surrey Seiko Motors, Burnaby Tastygo Online Inc., Vancouver Times Telecom Inc., Richmond

WHO’S GETTING SUED These corporate writs were filed with the BC Supreme Court registry in Vancouver. Information is derived from

notices of civil claim. Civil claims have yet to be proven in court.

Defendant Lignol Energy Corp.

2900 – 550 Burrard St., Vancouver Plaintiff Difference Capital Financial Inc. fka Difference Capital Funding Inc. 1600 Cathedral Pl., 925 W. Georgia St., Vancouver Claim $13,089,650 for debt.

Defendant Petaquilla Minerals Ltd. 700 – 1199 W. Hastings St., Vancouver Plaintiff Benntag Panama S.A. Calle 15, Rio Abajo via Espana, Panama City, Panama Claim $2,258,301 for chemical products and related services.

Defendants Oqulus Food Company Ltd. and Kevin Takaki and Megumi Endo 225 – 20316 56th Ave., Langley, and 95 – 20449 66th Ave., Langley Plaintiff Royal Bank of Canada 2nd floor, Tower 2, 6880 Financial Dr., Transit 06114, Mississauga, Ont. Claim $135,885 for debt.

Claim $70,000 for debt.

Defendants Sol Sunbelt Eatery Inc. and Gord Martin and Abdel Motalib Elatouabi 300 – 5900 No. 3 Rd., Richmond, and 909 – 1500 Hornby St., Vancouver, and 402 – 1265 Barclay St., Vancouver, and 1279 W. Hastings St., Vancouver Plaintiff Mengfa International Resources Inc. 200 – 550 Denman St., Vancouver Claim $133,165 for breach of lease.

Defendants Denis Louis Cook dba The Law Office of Denis L. Cook and Denis L. Cook 208 – 2695 Granville St., Vancouver Plaintiff Toronto-Dominion Bank 3rd floor, 700 W. Georgia St., Vancouver Claim $47,846 for debt.

Defendants Foster Gunning Media Group Inc. and Broderick Adam Gunning aka Brodie Gunning and Bennan Reid Mulcahy and Frederick Bradley Foster aka Brad Foster 703 – 938 Howe St., Vancouver, and 101 – 20408 Douglas Cres., Langley, and 16 Ingleview Dr., Caledon, Ont., and 9755 206th St., Langley Plaintiff Business Development Bank of Canada 1100 – 505 Burrard St., Vancouver Claim $96,070 for debt.

Defendants Cameron Land Surveying Ltd. and Kenneth William Schuurman and Debench Sand and Gravel Ltd. 206 – 16055 Fraser Hwy., Surrey, and 15660 112th Ave., Surrey, and Robson Court, 1000 – 840 Howe St., Vancouver Plaintiff Mission Ridge Aggregates (1997) Ltd. 211 – 1015 Austin Ave., Coquitlam Claim Damages for breach of confidentiality after defendants publicly disclosed plaintiff’s confidential information in affidavits filed in court. •

Defendants Pacific Rim Aviation Academy Inc. and Man Chi Wong aka Simon Wong Addresses unavailable.

Plaintiff Philip Yan-Kwan Hui Address unavailable.

K biv.com

for more lawsuits, go to biv.com/people/sued

Our litigatiOn team is even strOnger edwards, Kenny & Bray llP is pleased to announce our litigation partners and lawyers joining the firm in 2014.

D. rodney urquhart Partner

matthew g. schissel Associate

sean B. Donovan Associate Counsel

angela l. Folino Partner

sarah e. Orr Associate

Daniel g. Fetterly Associate Counsel

laura C. morrison Associate

Superior Results. Exceptional Value.

1900 – 1040 West georgia st., vancouver, BC V6E 4H3 Telephone: 604-689-1811 | Fax: 604- 689-5177

28

BUSINESSVANCOUVER September 9–15, 2014

Editorial

President/Publisher | Paul Harris, 604-608-5156 editor-in-chief | Fiona Anderson, 604-608-5183 Managing editor | Timothy Renshaw, 604-608-5131 Deputy Managing editor | Mark Falkenberg, 604-608-5174 Business in Vancouver is owned by Glacier Media Inc., 102 East Fourth Avenue, Vancouver, B.C. V5T 1G2

Ready or not, time to fix school system

S

ummer school labour relations lesson for 2014: B.C.’s system of negotiating teacher wages and benefits is broken. No secret there.

An Angus Reid Global survey released at the end of August underscored public resignation over the inevitability that no resolution to the latest public school contract dispute would be reached in time to start the new school year on schedule,

B.C.’s system of negotiating teacher wages and benefits is broken even though two weeks of the previous school year had already been lost and summer holidays had come and gone with no progress made. So while it would have been disappointing to anyone interested in quality education in B.C. to learn over the Labour Day weekend that the two sides in the decades-long wrangle were still too far apart even for veteran mediator Vince Ready to see light on the horizon, it would have surprised no one.

Since the BC Public School Employers’ Association and BC Teachers’

last laugh

Federation took over as the official bargaining agents for their members in 1994, they have managed to negotiate only one contract. All others have required government intervention.

This time around the government, with its eye on reaching a long-term deal, appears to be steadfastly opposed to intervention.

But the odds are stacked against it.

Reaching a lasting marketplace labour management agreement between government and any public sector monopoly is difficult, let alone one weighed down with the political baggage involved here.

The two sides need a new framework built on specified dates upon which negotiations are begun and completed. As recommended in Don Wright’s 2004 report into improving the collective bargaining system for teacher contracts in B.C., failure to reach an agreement during that period would trigger mediation from an appointed commissioner, who would choose a final offer as a default contract.

And schools would remain open during the process – no more interruptions to education in B.C. during the school year, whether they be from the proliferation of professional development days or labour squabbles.

The reliability and integrity of the province’s public education system at home and abroad has already suffered too much.

Trams on Arbutus still a fantasy, but one worth planning for

At Large Peter Ladner

The Arbutus rail line is the perfect route in the wrong location

[] Pat Jacobsen former TransLink CEO

I

n my last column I talked about a 2007 plan to keep the Arbutus rail corridor intact.

It also promoted development along the 11-kilometre line. The beauty of that plan, led by respected planner Mark Holland, is that it was endorsed by every neighbourhood association along the line. The curse of that plan

was that even though Holland says he was given complete independence, it was initiated and financed by Canadian Pacific Railway and required joint development with city lands. With the bad blood boiling at Vancouver city hall over who gets the uplift value from development along the line, even if CP had descended from the heavens with the Holy Grail, the city would have told the company to go away. So the plan, as they say, got sidetracked.

Meanwhile, there’s a long-held assumption in that plan, and in all the best-laid plans about Vancouver’s transportation future, that rail along the Arbutus corridor will one day be needed.

I bounced this notion off former TransLink CEO Pat Jacobsen, who was at the helm during the highly charged debate over where the Canada Line should go.

Her bottom line: “The Arbutus rail line is the perfect route in the wrong location.”

That’s because a rail line along Arbutus would only displace bus

what’s your opinion?

ridership, not add to it. There are no major commuter destinations along the Arbutus route to compare with, say, the Oakridge shopping centre or Langara College along Cambie. So building light rail along Arbutus would be a large capital cost for no gain in transit ridership, which is why Vancouver’s long-held dream of a streetcar line north along Arbutus, past south False Creek to a downtown foot-of-Denman terminus never gets traction from regional decision-makers.

But a few things have happened since Jacobsen’s stormy days winning approval for the Cambie Canada Line route over the ready-made Arbutus alternative. One is that she was right: the Canada Line is so successful (and small-scale) its peak capacity with current trains and stations is now in sight. (TransLink says with more frequent trains, a third, smaller car per train and slightly larger stations it could take three times the current peak loads.) Second is that the first of 15,000 projected new homes

in River District (East Fraser Lands) on the east end of the line are going up and highrises have come out of the ground at Marine Gateway at the foot of Cambie and at Granville and 70th in Marpole. The Marine Gateway project alone is projected to add 5,000 riders a day to the system. In other words, who knows where the next node of unplanned density will pop up along the route south of Broadway?

And the third is that the proposed demolition of the Georgia Street viaducts envisions a streetcar line north of Science World to help move people around in a neighbourhood with fewer cars. Knock out the Starbucks blocking the tracks at Granville Island and a route opens up between Strathcona, the Main Street station and the proposed Arbutus/Broadway terminus of the Millennium Line.

With the Mayors’ Council’s 30-year plan limiting West Broadway rapid transit only to

Arbutus, not all the way to the University of British Columbia (UBC), Arbutus and Broadway then becomes a natural light rail hub for trams going west to UBC and potentially north and south.

It’s starting to fit.

The timing of streetcars on the Arbutus corridor is admittedly hard to picture. If the city cut a deal to buy the corridor from CP and immediately started implementing Holland’s plan to integrate housing, commercial, parks and bike lanes tomorrow, that would leave an unused, protected track right-of-way cutting a swath through everything for at least 30 years – ugly and frustrating.

Even with the funding for the Broadway subway still a fantasy and the business case for a Downtown-False Creek-Arbutus streetcar still nowhere to be seen, saving the Arbutus corridor for future light rail in a growing city is the prudent thing to do. • Peter Ladner (pladner@biv.com) is a co-founder of Business in Vancouver.

| BIV welcomes readers’ opinions. All letters, including those sent by email, must include the author’s name, address and daytime telephone number. Business in Vancouver, 102 East 4th Avenue, Vancouver, B.C. V5T 1G2. Email: news@biv.com. We reserve the right to edit for brevity, clarity and legality.

BUSINESSVANCOUVER September 9–15, 2014

29

Opinion Pros and cons of a separate Scotland

None of My Business Trevor Lautens

The last person Scots who support the No campaign want to have as their representative is a Tory toff from the Home Counties, even one with a fine haircut

[] Ian Davidson Glasgow MP

S

yria. Iraq. Ukraine. Somalia. And more. Racked by nationalist violence. In contrast, Scotland’s referendum September 18 to separate from the United Kingdom is marked by almost a caricature of traditional British politeness and sporting civility.

In the Commons, Glasgow MP Ian Davidson wittily baited Prime Minister David Cameron (who had bestowed an MBE on his barber): “Without seeking to give offence, can I tell you that the last person Scots who support the No campaign want to have as their representative is a Tory toff from the Home Counties, even one with a fine haircut?”

Well played, sir, well played.

Cameron and his Conservative colleagues joined in the laughter. The PM “humbly” agreed, then lobbed back a hard-core political message.

The referendum question

is starkly simple: “Should Scotland be an independent country?” (Scottish separatists visited Canada to study Quebec referendums but wisely didn’t copy our convoluted questions.)

The Yes side is led by Scottish First Minister Alex Salmond of the Scottish National Party (SNP). Point man for the No side, the Better Together campaign, is Alistair Darling, a former Labour Party chancellor.

The No side has consistently led in the polls, but the gap narrowed in recent weeks.

Oddly, the more things changed, the more some things would stay the same – or is the SNP cynically wooing the nervous undecided, planning differently if Yes wins? A separate Scotland would keep the Queen.

(Scottish blood.) Keep the pound sterling. (Never, Cameron insists.) Keep open borders. Apply for European Union membership. (Not painlessly.)

Everything – sharing the debt, defence, social programs – would be up in the air.

So, bluntly, what’s it to us?

Business axiomatically hates uncertainty. (No response, predictably, from a couple of B.C. companies possibly affected.)

A man named Jock announces his bias, you’d think, but Jock Finlayson, Business Council of BC executive vice-president and chief policy officer, offers a thoughtfully nuanced opinion: “Despite my Scottish heritage, I don’t feel I have much skin in this particular game. My parents and their siblings were Canada-born, as was I. I have visited Scotland once and did feel a residual tug at the heartstrings, but I have little knowledge of the country’s politics.

“That said … I must confess to skepticism about the case for separation as articulated by the SNP. Scotland is a substantial

net beneficiary of fiscal transfers from the U.K. central government. The large financial institutions that have their head offices in Edinburgh are tightly woven into the City of London finance cluster and would dread any risk to their connections to it [and to the Treasury and the Bank of England].

“I understand that most Scottish voters lean markedly to the left, so their dislike of the Cameron government may be a key factor leading some to support independence. But dislike of an incumbent government is a poor reason to fracture a successful polity.”

That polity was forged in 1707, “one of the world’s most successful unions,” declares English-born Roger Dawson, vice-president of the Royal Society of St. George, B.C. branch, and a predictable No supporter.

New Westminster-born Dan Brown, former society president, whose views merit filling this space, counterintuitively supports Scotland separating – “the Scots would do us a great favour if they would” – on the ingenious premise that it would allow long-deferential English nationalism to bloom.

My own in-depth research consists of staying 60 years ago at 1 Drummond Place, Edinburgh, where the landlady, the kind but fierce (a Scottish invention) Mrs. Fox, snapped: “You can’t trust a Sasanach,” almost a Scottish four-letter word for the English.

The excitement, the adrenalin flush of nationalism, invites Robert Louis Stevenson’s warning to tourists, expandable to hot idealists on a mission: “It is better to travel hopefully than to arrive.” And a Scot, he was. • Trevor Lautens writes every second Tuesday in Business in Vancouver.

LETTERS B.C. needs to tap its geothermal energy potential Canada is the only major country located along the Pacific Rim’s Ring of Fire that is not producing geothermal power. This is despite the fact that Canada borders the world’s top producer of geothermal power, the U.S., and shares a continent with Mexico, the fourth-largest producer. Both nations’ resources are concentrated in their western states. In North America, geothermal power production starts in Alaska, pauses in Canada, and resumes at the American border and then proceeds into Mexico.

Two recent Business in Vancouver articles have downplayed the potential for geothermal development in B.C. While both did an excellent job of highlighting some of the barriers the industry faces, each failed to answer why, unlike Canada, other countries have successfully developed their geothermal resources. Instead, the logic outlined in the articles boils down to: because geothermal hasn’t taken off in the past it is unlikely to do so in the future. I submit that this premise deserves a second look.

According to BC Hydro’s 2013 Integrated Resource Plan, “the tenure process [in B.C.] requires applicants to request a parcel of land be put up for tenure and must win the rights through a sealed bid auction. The uncertainty related to the auction process is a disincentive for some geothermal developers to invest efforts to investigate new potential sites.”

This is one indication that the geothermal tenure system in B.C. is broken.

A 2014 report from the U.S. National Renewable Energy Laboratory (NREL) acknowledges that most programs aimed at promoting renewables include geothermal, and then it notes that the incentives “may not adequately address the more nuanced support required to advance geothermal technologies.” This is equally true in Canada. NREL goes on to highlight five policy options used around the world that have helped spur on geothermal development: loan guarantees, drilling failure insurance, lending support mechanisms, grants and government-led exploration.

A key question is: In what ways will the future be different than the past?

Even if Site C is built, it will likely be the last major hydroelectric project in B.C., as suitable sites are now scarce. Unless geothermal power production is taken seriously, this limits B.C.’s future options for firm baseload power to the burning of fossil fuels.

Technological advance is another important factor. Exploration and drilling costs are also major obstacles impeding geothermal development. One of the mentioned articles (“Geothermal generating little heat in energy sector – BIV issue 1291; July 29–August 4) insightfully indicates that Borealis GeoPower Inc. has plans to use a proprietary exploration approach that would reduce unnecessary drilling. This example should not be considered in isolation. Berkeley Lab’s Earth Sciences Division is working on a computer program known as Geo T, which will help analyze dissolved minerals in fluid samples obtained at the surface, as a means to determine the temperature characteristics of deep geothermal reservoirs.

To alter the trajectory of B.C.’s geothermal industry, our approach to the industry must also change. Identified problems need to be addressed, such as the state of the geothermal tenure system. Additionally, tailored geothermal policy needs to be introduced, which acknowledges that a onesize-fits-all renewables policy does not work.

We must recognize that the landscape of our energy future is rapidly changing, and we must adjust our approach toward power production.

Grant Van, senior policy adviser, Canadian Geothermal Energy Association

Nominations now open!

Each year, Deloitte, Business in Vancouver and MacKay CEO Forums partner to recognize GO2PRODUCTIONS and honour the top CEOs in British Columbia. An esteemed judging panel selects honourees based make it great on the criteria of Vision, Strategy and Leadership; Financial Performance; People Development; Innovation and Social Responsibility and Sustainability. Winning CEOs will be profiled in Business in Vancouver on November 4th and awarded at a dinner event on November 18, 2014.

Nomination deadline: September 12th, 2014.

Visit www.biv.com/events/biv/ceo for more information or to submit your nomination.

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We reserve the right to edit for brevity and clarity. Please go to www.biv.com/ events/calendar to post your listing.

Questions may be directed to Carrie Schmidt at 604-688-2398, ext. 108.

Conferences Zero Waste Conference 2014

September 16 7:30 AM Metro Vancouver invites you to its fourth annual Zero Waste Conference.

SUnday, September 14 Autumn Shift Festival

Enjoy festivities and a BBQ cookoff at this annual event, taking place from noon to 6 p.m. on Main Street between East Broadway and East 7th Avenue

Monday, September 22 B2Gold BIg Brothers Golf Classic

Raise money for Big Brothers of Greater Vancouver at the Shaughnessy Golf and Country Club

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Businesses, governments and communities are stepping up and learning how to thrive in a rapidly changing, resource-constrained world. Featuring keynote speakers Jeremy Rifkin, Tim Brooks (senior director, environmental sustainability, Lego) and Markus Laubscher (program manager, circular economy, Philips).

For details, visit www.metrovancouver. org/zwc. Vancouver Convention Centre. 999 Canada Place. Vancouver.

Metro Vancouver. 604-423-6200. icentre@metrovancouver.org.

36th Angel Forum for Startups & Angel Investors

A night when we come together to raise funds for mentoring and build a more solid foundation for at-risk girls.

Tuesday, September 23, 2014 - 5:30pm ~ Fairmont Waterfront Hotel ORDER YOUR TICKETS TODAY! 604.873.4525 ext.321 or bigsisters.bc.ca PRESENTING SPONSOR

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September 30 8 AM For highgrowth startups: apply by September 30 and be approved to present to more than 60 angel investors. Angel investors will hear, meet and see demos by 18 pre-selected emerging growth companies in one day. The Angel Forum is the oldest and largest angel group in Canada; visit bit.ly/ angelforum for more information.

Must pre-register. 505 West Hastings Street. Vancouver. Bob ChaworthMusters. bob@angelforum.org.

Courses, Workshops, Seminars Ethical Behaviour: Best Practices for Management Consultants

September 15 9 AM This oneday course covers best practices to improve your knowledge and ability to make the best ethical decisions as a management consultant. Learn how to resolve ethical dilemmas frequently faced by management consultants.

Course earns professional development credits toward the CMC (certified management consultant) accreditation. YWCA Hotel (opposite BC Place). 733 Beatty Street.

Vancouver. Sheila Carruthers. 403225-9733. sheila@csrstrategies.ca.

Moving From a Proprietorship to Incorporation – Tax Concerns September 22 9 AM At what financial point in your business is it a good idea to incorporate? How can a

registered corporation help separate you from your business or partners while optimizing tax benefits? Find out this and more at this seminar.

Discuss the advantages of moving your proprietorship or partnership to a corporation, learn about the tax advantages of being a registered corporation and understand the benefits of using a holding company, deferred income, hiring family members, medical trusts and how to utilize the small business capital gains exemption. Presented by Gabrielle Loren of Loren, Nancke & Co. Small Business BC. Suite 54. 601 West Cordova Street. Vancouver.

Sales Success

October 2 9 AM Create explosive sales growth with techniques you’ll learn from the dynamite combination of Jeffrey Gitomer and Dale Carnegie Training. This neverbefore-seen combination will give you the attitude, confidence and systems needed to become the award-winner you know you can be. You will learn to build a positive sales attitude, gain the customers’ perspective, build a tool kit that will attract customers, deliver powerful sales presentations, overcome buyer objections with confidence and much more. Metrotower II. 4710 Kingsway.

Suite 428. Burnaby. Paul Sinkevich.

604-299-5115. paul.sinkevich@ dalecarnegie.com.

Festivals Autumn Shift Festival

September 14 NOON The Mount Pleasant Business Improvement Area will host the fifth annual Autumn Shift Festival and smoking sausage BBQ cook-off. This festival celebrates a shift in seasons, and a shift towards urban gardening, sustainability and eating and shopping locally. Festivities will run from noon to 6 p.m. on Main Street between East Broadway and East 7th Avenue while the BBQ cookoff will take place from 2 p.m. to 5 p.m.

All proceeds from the BBQ cook-off go to the Greater Vancouver Food Bank. More information can be found at www.mainstreetbia.com/category/ events/autumn-shift-festival.

Golf Tournaments Kin Klassic

September 18 11 AM Second annual Kin Klassic golf tournament, raising funds for people with disabilities. Mayfair Lakes Golf Club.

No. 6 Road. Richmond. Jim Watson.

604-644-2771. jimwatsonontrack@ gmail.com.

B2Gold Big Brothers Golf Classic

September 22 10:30 AM Revel in first-class golf at Vancouver’s finest private golf course, Shaughnessy Golf and Country Club. Enjoy a beautiful day on the greens, tantalizing food, specialty cocktails, unique on-course activities, enticing auctions and more.

You won’t want to miss one of B.C.’s premier charity golf tournaments, benefiting Big Brothers of Greater Vancouver. Registration is now open.

Shaughnessy Golf and Country Club.

4300 SW Marine Drive. Vancouver. Big Brothers of Greater Vancouver. 604876-2447, ext. 305. golf@bbgvf.com.

Trade shows SOHO SME Business Expo

October 30 8 AM Join thousands of business owners, entrepreneurs and marketing executives who will inspire, motivate and drive your business success. There will be keynote speakers, panel sessions, interactive exhibits and displays, a free coach’s corner, business skills competitions, live demos, Startup Alley great networking, prizes and more. Don’t miss the featured keynote, Meredith Powell, co-founder of The Next Big Thing foundation, and other amazing game-changing entrepreneurs.

Register now or become an exhibitor at www.vancouversme.soho.ca. Enter promo code “BIV” and get free all-day access, plus save $20 to attend the SOHO SME after-party. This event is not to be missed. Sheraton Wall Centre. North Tower. Pavilion Ballroom.

1088 Burrard Street. Vancouver. •

BUSINESSVANCOUVER September 9–15, 2014

31

LifeLessons Focus on what you do best

By Jen St. Denis jstdenis@biv.com

D

anny Hogg owns fashion design and distribution business Family Business Distribution with his wife, Carla Hogg. The company has two clothing labels: Gentle Fawn, which has existed since 2003, and Left on Houston, a line of sweaters the pair started in 2008. The company has 13 staff and sells its products in 600 stores across North America.

The Hoggs have always been focused on building strong, consistent brands in the competitive world of women’s Danny COPYHogg & DIGITAL PRINT SERVICES fashion. But in 2007, when they Owner, Family were looking to expand their Business Distribution business, they decided to try More Than

bringing in some clothing lines from the United States and distributing them in Canada.

It was a profitable experiment, but the Hoggs realized it was distracting them from what they do best and what they wanted to focus on.

“What we really excel at as a business is brand development and our own brands: creating something, bringing it to the market and really getting behind it and just living it,” Hogg said.

The decision to stop distributing other brands wasn’t entirely painless: the company experienced a “sharp, uncomfortable decline in revenue” and had to come up with a new revenue stream to replace the business they were giving up.

Volume Based Prices Print More Save More

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What we really excel at as a business is ... creating something, bringing it to the market and really getting behind it and just living it

[] Danny Hogg Owner, Family Business Distribution

That pressure, it turns out, yielded creative results.

“That’s when we started to brainstorm the development of the Left on Houston label,” Hogg said.

“The lesson for us was we were trying to diversify and seize these opportunities, and in the

end you’ve just got to follow your gut.”

Carla and Danny Hogg launched Left on Houston in 2008. They are working on a new collection, which they plan to debut later this year.

On getting distracted | “It was a lot of effort, being reliant on other companies for making sure their organizations were organized and on track. We found that if they weren’t on point with where we needed to be, it became frustrating internally for us to work with people who weren’t allied with our [company culture]. …

Our company is an organization nation, and if you’re not organized, that’s an issue.” •

Years Christopher Burcsik, CEO, Minisis Inc. Next LIfe Lesson: Rush or Same Day Service Always FREE

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