November 2008
The Official Voice of Painting, Decorating and Coating in Ontario
Inside This Edition A good relationship with a surety company can help your business grow Information about trust and lien rights
PM40787580
Paramount Painting & Decorating (London) Limited Built on good people, fair play and a team effort
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RESOLUTION Good Relationships Determine How Well Any Job Gets Done.
This is why the Painters and Allied Trades LMCI is committed to enhancing the relationship between the contractor and union, to help reinforce the common agenda you both share. We’ve devised strategies and seminars to make the collective bargaining experience a positive exchange of goals. By stressing the value of minimizing differences and emphasizing how both sides can achieve their goals, contractors can better serve their workforce and their customers. The Painters and Allied Trades Labor Management Cooperation Initiative programs are the result of a partnership with the Finishing Contractors Association and the International Union of Painters & Allied Trades. The tools you need to succeed can be found at www.LMCIonline.org or by phone toll-free at (888) 934-6474 or (202) 637-0798. Supervisor Training • Safety Training • Mutual Gains Bargaining • International Networking • Online Resources
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You can tell it’s the best paint even with your eyes closed. Feel its hand-rubbed finish. Notice the low odour. And finally, see its beautiful rich colour. Come discover your Aura® today.
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©2008 Benjamin Moore & Co., Limited. Aura, Benjamin Moore and the triangle “M” symbol are registered trademarks, licensed to Benjamin Moore & Co., Limited.
Another reason why we’re the pro’s choice.
With one of the industry’s most comprehensive product lines, we have you covered. No matter what the project. No matter what the color. No matter what performance, quality or price point level. Our exterior paints, wood stains and clears deliver beauty, protection and trusted performance to showcase your craftsmanship. All backed with a 100-year tradition of using the best technologies to manufacture the best products. All good reasons to choose Pittsburgh® Paints.
For more information: www.pittsburghpaints.com • www.voiceofcolor.com • 1.800.441.9695 TOP COAT NOVEMBER 2008
CONTENTS
6 EXECUTIVE
16 MEMBER PROFILE Paramount Painting & Decorating (London) Limited
DIRECTOR’S MESSAGE
19 Painting in Today’s Greener Environment The coating industry reacts to environmental concerns
7 PRESIDENT’S MESSAGE 8 NEW PRODUCTS 12 AFFILIATE REPORT 18 TRAINING MATTERS 20 PAINTING MATTERS 22 ECONOMIC OUTLOOK
cover
London, Ont.; Paramount Painting & Decorating (London) Limited; New office building for Lerners LLP Barristers & Solicitors; D. Grant & Sons, contractor
November 2008
The Official Voice of Painting, Decorating and Coating in Ontario
Publisher: Robert Thompson Editor: Jeanne Fronda Sales Manager: Sharon Komoski Production Team Leader: Adrienne N. Wilson Graphic Design Specialist: Jorge Gérardin Advertising Account Executives: Nolan Ackman, Nancy Kantor, Ashley Privé & Bernice Spencer
Published by:
5255 Yonge Street, Suite 1000, Toronto, Ontario M2N 6P4 Toll Free: (866) 216-0860 ext. 229 robertt@mediaedge.ca 1 Wesley Avenue, Suite 301, Winnipeg, Manitoba R3C 4C6 Toll Free: (866) 201-3096 Fax: (204) 480-4420 www.mediaedgepublishing.com
President: Kevin Brown Senior Vice-President: Robert Thompson Branch Manager: Nancie Privé All Rights Reserved. The content of this publication may not be reproduced in whole or in part without the prior written consent of the Association.
Return Undeliverables to: Ontario Painting Contractors Association (OPCA) 211 Consumers Road, Suite 305, Toronto, Ontario M2J 4G8 PUBLICATION MAIL AGREEMENT #40787580
24 MONEY MATTERS 25 LEGAL MATTERS 26 OPCA NEWS 28 ASSURANCE MATTERS 29 MARKETING MATTERS 30 ADVERTISERS’ Index NOVEMBER 2008 TOP COAT
EXECUTIVE DIRECTOR’S MESSAGE
More Learning = More Earning How to adapt to changing legislation and market trends Education and Advice. Satisfaction and Loyalty BY ANDREW SEFTON
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I recently returned from a sustainability training seminar at the central hub of painter trade training in North America, the Finishing Trades Institute, in Maryland, USA. The training seminar was a first among many firsts: • The first training session as a result of a relationship forged with the Green Building Council of both the United States and Canada • The first training session on the subject of sustainability and Leadership in Energy and Environmental Design (LEED) • The first training session being offered by the FTI directed towards contractors to ensure a competitive advantage in the marketplace, increased product knowledge and improved understanding of new processes and equipment For two days, I enjoyed the company of signatory contractors who took time out of their busy schedules to increase their understanding of how best to adapt to changing legislation, regulations and market trends that are changing the way in which the finishing trades operate. I also learned more about the strong leadership role being played by the manufacturers and producers of products and materials utilized by the finishing trades as they exceed sustainability guidelines. Aside from the lessons on the role of the finishing trades in sustainable construction, I learnt, through observation, that a large amount of our finishing contractors are demanding information and professional development opportunities as a means to keep improving their market position.
Representatives from Purdy generously directed me to two individual studies by J.D. Power and Associates with highly relevant information for paint and decorating retailers, manufacturers and applicators. According to one of those studies, the 2008 Home Improvement Retail Satisfaction SurveySM, “…not only does providing great customer service benefit [applicators] in terms of more satisfied, loyal customers, but it also results in increased sales.” Both studies (the second one is the 2008 Interior Paint Satisfaction StudySM) clearly identify an important link between customer education and customer satisfaction. The research found that proper education about paint selection, equipment, surface preparation and application technique greatly enhanced the customer’s experience. According to Jim Howland, senior director of the real estate and construction practice at J.D. Power and Associates, “Customer satisfaction with interior paint hinges not only on formulation but also on advice and education.” In fact, customer satisfaction scores were much higher from customers who received painting advice compared with those who did not. Interestingly, more than half of the respondents, 54 per cent, reported that they did not receive any advice. This means it’s likely more than half of all customers are not properly informed or equipped as they tackle their painting projects. How unfortunate! On the other hand, there is a tremendous opportunity for OPCA members to stand out in their local marketplace by going the extra mile to educate and inform their staff and customers on best practices!
Isn’t it remarkable how interrelated these attributes are? Understanding the increasing demand for knowledge from both the contractors and the customers and the overwhelming payback from such a mutually beneficial process, it is unusual that spending on technology per person is lower in construction than in any other industry. Productivity in the architectural-engineeringconstruction (AEC) industry has dropped 10 per cent over the last 40 years, while all other nonfarm industries increased over 100 per cent. The lack of automation/technology in the building industry is because of the inherently fragmented nature of the industry, which has limited the value of automation and technology.
“In a Highly Competitive Industry, Providing Painting Advice and Education is a Key Differentiator” J.D. Powers’ 2008 Interior Paint Satisfaction Study With consumers under increasing financial pressure due to rising prices for fuel and necessities, it’s reasonable to assume that discretionary spending may decrease in the near future. Applicators and manufacturers who are competing for that shrinking source of revenue can differentiate themselves by focusing on providing superior levels of customer service and assisting in the provision of information that will lead to substantial cost reductions across the entire life cycle of the building. By sharing production and application tips with your staff and your employees in turn providing customer feedback and insights with a number of vendors, our industry can collectively improve customer satisfaction by better equipping painters with the right tools and know-how to get the job done right the first time.
Why Sustainability is Important • Buildings are responsible for almost half (48%) of all greenhouse-gas emissions annually.* • 76% of all electricity generated by power plants goes to supply the building sector.** • Buildings often contribute to health problems, such as asthma and allergies due to poor indoor environmental quality.
• 40% of energy and CO2 is from buildings. • 65% of landfill waste is from buildings. • More money on spent on counting, measuring and disseminating plans than on architects’ fees. • 30% of a project’s costs are from errors and waste.
Sources: National Institute of Building Sciences, *U.S. Energy Information Administration, and **www.architecture2030.org
TOP COAT NOVEMBER 2008
PRESIDENT’S MESSAGE
2008 - 2010 OFFICERS Gilbert Satov Magil Painting Limited President Dan Orrett Harrison-Muir Inc. Vice-President Thomas Corbett ECL Engineered Coatings Limited Vice-President
gilbert sATov, president
Brian O’Farrell Dynamic Painting & Coatings Limited Secretary / Treasurer Ian Stone Paramount Painting & Decorating (London) Limited Past President
DIRECTORS Vito Amato Mainline Painting & Design Inc. Gerry Bechard Peerless Finishing Contractors Limited Jeff Butcher Dayson Industrial Services Incorporated Vittorio Centis Centor Painting Company Limited Adrian Day Rescom Coatings Scott Saunders Harkness Waters (2005) Limited Tom Sumi Vision Painting & Decorating Limited Morris Viscount Roy & Huebert Limited
NOVEMBER 2008 TOP COAT
new products
industry goods Information about the latest product offerings
Exterior Stain Collection in Natural Colour Palette The new Benjamin Moore® Exterior Stain Collection features an array of premium exterior stains that come in a selection of finishes, varying in opacity from clear to solid, and highlight a diverse natural and organic colour palette. From siding and decks to furniture, the technologically advanced Exterior Stain Collection combines high-quality, low-VOC ingredients to create a product that will preserve, protect and complement outdoor wood, regardless of its age or condition. Website www.benjaminmoore.com has more information.
Professional-grade Brush for Marine Applications The Bestt Liebco® First Mate stain and sealer brush, crafted with soft, supple 100 per cent White China bristle in a blend of varying lengths and stiffness, provides a precise, smooth and even release. The long-life, solvent-resistant resin handle features a comfortable beavertail design. Use this professional-grade tool with any oil-based stain, varnish, shellac, lacquer, polyurethane or paint. Get more information at www.besttcorp.com.
Extension Pole and Cageless Roller Frame to Enhance Productivity The new professional-grade Purdy® QuickFit™ extension pole and ultra-lightweight 9” cageless roller frame were designed to boost a painter’s productivity, enhance precision and minimize fatigue. The product’s one-touch, JiffyLoc™ release system allows users to swiftly swap roller-cover frames, reducing delays when multiple coatings are to be applied or a variety of substrates are involved in a project. The cageless frame features a six-pin ferrule that securely snaps into a matching receptacle on the extension pole. This design provides an ultra-secure connection for superior control. Precision is also enhanced with the tool’s rigid, telescoping, anodized-aluminum construction. Painters can easily change the pole length, which adjusts and locks in six-inch increments. Painter fatigue is minimized with the product’s lightweight fibreglass shell and a rubberized handgrip. The cageless frame, with its industry-standard acme thread, can be used with other extension poles, and an acme-threaded adaptor is included with the extension pole so that almost any frame can be coupled to the pole. Go to www.purdycorp.com for more information on these products.
Colormix™ ’09 Forecast Showcases Design Trends Sherwin-Williams has released its colour-trend forecast for 2009. The 24 hues are organized by colour families into four groups: Techno-Color, Conscious Luxury, Local Momentum and Global Tapestry. Techno-Color is inspired, in part, by new materials and manufacturing ideas; Conscious Luxury by the boom in consumer upscale purchasing that reflects growing environmental awareness; Local Momentum by the colours in neighbourhood landscapes and architecture; and Global Tapestry by international influences.
TOP COAT NOVEMBER 2008
New Products
Guide Specification for Coil and Extrusion Coatings PPG Industries has published a new guide specification for its liquid and powder coil and extrusion coatings. This guide, formatted to the Construction Specifier Institute’s (CSI) Masterformat 2004, is designed to make selection and specification of factory-applied architectural coatings easier. The IdeaScapes Guide Specification covers protocols for shop- and factory-applied metal coatings. The first of three sections details industry-specific testing and performance guidelines for metal coatings, as specified by the American Architectural Manufacturers Association (AAMA), American Society for Testing and Materials (ASTM) International, ENERGY STAR and LEED (Leadership in Energy and Environmental Design), among others. A second section shows test data applicable to individual PPG coil and extrusion coatings, such as Duranar, Coraflon and Acrynar coatings. The final section covers installation requirements for shop-applied coatings. To download a copy of the guide specification, visit http://corporateportal.ppg.com:80/NA/IdeaScapes/specs/Product_Specification_Guide.htm.
18” Roller Cover Helps Painters Profit Purdy® introduces the high-capacity, 18”-wide Colossus™ roller cover, made of a polyamide fabric that holds and releases more paint than any other Purdy cover and delivers a 30 per cent productivity advantage over traditional lambskin covers. Double the length of a typical roller cover, at 9”, the 18” Colossus cover enables painters to more quickly finish their projects to maximize profitability. Colossus roller covers are designed for long life; painters can backroll more than 10,000 sq. ft. with one cover. The 18” roller cover can be mounted on industry-standard 18” roller-cover frames, and can be used with latex and oil-based paints. Visit www.purdycorp.com/colossus for more information.
UV Lamp for Fast Curing Spectronics Corp. has introduced the Spectroline MAXIMA ML-3500C UV lamp for curing adhesives, coatings, inks, epoxies, resins, printed circuit boards, plastics and other materials. The lamp produces a nominal steady-state UV-A intensity of 90,000 µW/cm2 at 6 in. (15 cm) for high-speed curing and increased production. The ML-3500C uses the latest micro discharge light (MDL) technology. A unique filter and bulb/reflector assembly enables the lamp’s 35-watt bulb to deliver up to 10 times more UV-A energy than conventional 100-watt curing lamps, says the company. It features instant-on operation that further reduces curing time. The lamp’s bulb/reflector assembly is a single, integral unit with no exposed circuitry. The ML-3500C produces virtually no hazardous UV-B light. The bulb can be replaced in seconds, without tools or fear of shock. A battery-operated model, the MAXIMA ML-3500CM includes a 12-volt, 7-amp/hr rechargeable battery that powers the lamp for two hours. For more information, visit www.spectroline.com.
High-performance Coatings for High-traffic Areas Sherwin-Williams recently expanded its Pro Industrial products line of high-performance coatings for health-care, hospitality, educational, commercial and industrial applications, and anywhere high traffic is prevalent. The Pro Industrial line comprises a variety of primers and topcoats, including waterborne acrylics, alkyds and high-performance epoxies. These coatings are low-VOC, easy to apply and offer the durability required to meet the aesthetic and maintenance needs of commercial and industrial buildings, says the company. Pro-Cryl Universal Primer is designed for areas prone to rust and corrosion. The self cross-linking alkyd primer protects bare steel, aluminum and galvanized substrates, and can be used under most water- and solvent-based topcoats. The low-VOC, low-odour primer dries quickly and can be applied in temperatures as low as 40 degrees Fahrenheit. Pro Industrial 0 VOC Acrylic delivers a durable finish while meeting all environmental standards. The zero-VOC coating can be applied in occupied spaces without the concern of disruptive odours within the space. Industrial Enamel 100 provides excellent coverage per gallon; it is engineered to be abrasion-, chip- and flake-resistant, making it ideal for interior and exterior use on commercial buildings and industrial sites. Go to www.sherwin-williams.com to find out more. NOVEMBER 2008 TOP COAT
new products
Cordless Electrostatic Gun with Improved Ergonomics The Vector Solo is ITW Ransburg’s latest Vector electrostatic gun. According to the company, it offers some distinct competitive advantages over both corded and other cordless guns, including ideal balance and ergonomics, significantly dampened vibrations and easier trigger pull. The new gun also exhibits superior transfer efficiencies for great-quality results and minimized wasted material, says the company. More information can be found at www.itwransburg.com.
Compact Powder-spray Booth/ Recovery System for Smaller Parts The Nordson Econo-Coat 1001 powder-spray booth system is a downsized version of its other batch booths. According to the company, the 1001 is ideal for coating wheels and other automotive parts, test panels for new-colour evaluation, or any other parts that fit within the 3.5-foot high x 2.5-foot wide x 2.5-foot deep work envelope. The booth operates on 110-volt electrical supply for fast installation and has a small footprint for maximum space utilization. It features a cartridge-filter powder-recovery system that does not require expensive ductwork and explosion venting. Air used to contain and recover powder overspray passes through a primary cartridge filter and final filter, and is then exhausted as clean air. Visit www.nordson.com for more information.
Caulk Singles Speed Small, Tight Jobs Momentive Performance Materials has rolled out GE Caulk Singles, single-use disposables for quick caulking jobs that can be done without tools or mess. Easy, one-handed dispensing provides an even bead, even in tight spaces. Palm-sized Singles save time, waste and cleanup. The 1.25-ounce package is available in white paintable acrylic or white or clear waterproof silicone. One pack should handle a sink or touch-ups; a large window or door may take three packs. For more information, visit www.gecaulksingles.com.
Sepp Leaf Introduces Nine Celestial Shades Professional decorative painters, gilders and artisans now have nine new shades of metal leaf from Sepp Leaf Products to choose from. Nazionale, Italy’s leading manufacturer of metal leaf, has developed the Celestial Shades of Variegated Leaf, which join Sepp Leaf’s spectrum of genuine gold and silver leaf. Daybreak, Moonbeam, Dawn, Sunset, Sunrise, Northern Lights, Sunburst, Twilight and Midnight are dynamic variegated leaves not previously available for metal-leaf gilding. All colours are available as patent and ribbon leaf on special order. Go to www.seppleaf.com to see more about these products.
Homax Aerosols Add New Ceiling Textures Homax Products has added Orange Peel and Knockdown Ceiling Texture to its line of aerosol-spray textures. Suitable for spot repairs or an entire ceiling, the textures can be applied in minutes. Both textures help hide drywall imperfections and taped drywall seams. Unlike ceiling textures that require the user to spray up at an uncomfortable angle, the Homax aerosol texture features a unique vertical spray dispenser. One can of the low-odour, water-based product covers 60 to 80 square feet, depending on the texture. Learn more at www.homaxproducts.com.
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Affiliate Report
By David Surplis, Acting President, COCA
Experience Rating Programs Achieve “Spectacular” Results Ever since the creation of a workers’ compensation system in Ontario (now with the name Workplace Safety & Insurance Board, WSIB), there has been tension between employees’ interest in creating the highest possible benefits and the employers’ interest in paying the lowest possible premiums. This tension boiled over in 2008 because of WSIB’s program of premium rebates and surcharges based on a company’s experience with accidents in the immediately prior year or years. According to employers, experience rating (called CAD7 for construction) has produced a huge reduction in lost-time incidents and has thereby reduced premiums. According to organized labour, experience rating has produced massive fraud and harm to workers. The Ontario Federation of Labour (OFL) and the NDP at Queen’s Park have called for the elimination of experience rating, and WSIB has commissioned a study to determine who is correct. The implementation of experience rating programs at WSIB was based on the notion of reward for excellence: If your company could work accident-free for a year, then you deserved to have a significant rebate of the premiums you paid to begin the year. The rebates were clearly an incentive to perform well. Experience rating programs were the carrot relative to the stick of prosecution for bad behaviour. And the carrot prevailed. Companies soon realized that health and safety could pay dividends and they adopted safer techniques, hired safety consultants and generally became much more safety conscious. The results of experience rating programs like CAD 7 have been spectacular. Lost-time incidents (LTIs) in construction have plummeted in the last 20 years, and Ontario has become one of the world’s safest jurisdictions for working in construction. According to the latest statistics from Construction Safety Association of Ontario (CSAO), lost-time injuries have dropped from 10.92 per 200,000 hours worked in 1985 to 2.15 per 200,000 hours worked in 2006. This is a spectacular result and, while it cannot be ascribed to experience rating per se, it is more than a coincidence that experience rating began in 1986.
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Experience rating is under furious attack. OFL and NDP leaders claim that the system leads to the “hiding” of injuries simply to facilitate the collection of a rebate. They also claim that experience rating induces companies to force workers to return to work before their recuperation is complete. They also decry the fact that a company can receive a rebate of premiums in the year it has a serious accident or death, although rebates are based entirely on previous years’ experience. The chair of WSIB reacted to the OFL claims in a purely political fashion, saying that he would ensure that any company “responsible” for a fatality would not be eligible for any rebate. The “rebate debate” rapidly got out of control but was petering out almost as rapidly when the NDP put forward a motion at Queen’s Park to kill experience rating at WSIB. Experience rating programs such as CAD7 have benefited Ontario workers, their employers, the Ontario economy and the general public for many years. There are certainly places where improvements can be made in those programs and those will surely come to light with a thorough and professional assessment. Proverbially, now is not the time to throw the baby out with the bathwater. Based on construction’s great achievements under experience rating, the whole system deserves a fair examination followed by structural and procedural improvements. COCA will be participating fully in WSIB’s study and will be contributing our own arguments via an independent study being commissioned by Ontario Business Coalition, a huge group of employer associations supported by COCA and chaired by myself. ©
2008 Council of Ontario Construction Associations
New Ministry, New Minister In June, Premier Dalton McGuinty made a small but important cabinet shuffle. After a number of years as “construction’s” Minister of Public Infrastructure Renewal, Hon. David Caplan has been charged with the biggest portfolio in government – Health and Long-Term Care. The former Minister of Health, Hon. George Smitherman, will now oversee a huge new department – the Ministry of Energy and Infrastructure – which is a combination of the two former ministries. COCA had a long and productive association with Minister Caplan and we appreciated his strong interest in the construction industry. He was instrumental in setting up the Construction Advisory Council and took all the industry’s major concerns directly to Cabinet. COCA hopes to have an equally strong association with Minister Smitherman, for he has a strong reputation for “getting things done.” David Zurawel is contacting the Minister so that COCA officials can meet with him and his staff as soon as practicable after his major briefings. ©
2008 Council of Ontario Construction Associations
Affiliate Report
you
your colours
your style Accreditation Pilot Still Needs Some Work
Introducing Para’s NEW colour system. Over 2,000 colours to choose from.
The Ontario Workplace Safety & Insurance Board is actively promoting employer participation in its Accreditation Pilot Program, rolled out to industry this past May and June. The pilot program is to run over the course of the next year as a precursor to a full-fledged Accreditation Program in 2009 as part of the WSIB’s legislated mandate to reduce the occurrence of workplace injuries and diseases. However, what is being tabled after significant consultation is a program that COCA cannot recommend its members support in its present form. Early discussions COCA and its members had with WSIB focused on the creation of a program that would embody a commitment to fostering a cooperative business environment recognizing and rewarding employers committed to the occupational health and safety of their employees while providing motivation for improvement for poorer performers. The program would be a logical follow-on occupational-health-and-safety program for firms graduating from the soon-to-expire Safety Groups program. This philosophy represented the bedrock on which the construction industry rested its support. Unfortunately, this philosophy seems to be missing from the current pilot program. Particularly problematic issues include: y y y y
y
A lack of recognition of the unique characteristics of the construction industry; A reliance upon claims experience – a critical flaw, given recognized problems with current experience rating plans; An overly stringent and inadequate financial-incentive offering for “superior” firms; A “fatality clause” that excludes firms from participating in the program – running counter to the stated philosophy of encouraging firms to improve their occupational-health-andsafety commitment and performance; and A lack of ability for small firms, which make up the majority of construction companies, to participate despite the fact that they pay WSIB premiums.
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To the WSIB’s credit, it has been responsive to construction-industry concerns and is working with COCA and other organizations to set a meeting date at which these concerns and possible amendments to the pilot program can be discussed. COCA is looking forward to being able to reconsider its position coming out of these discussions. COCA and its members are strong supporters of creating a robust workplace-safety culture in Ontario, have always been and remain committed to the continuous improvement of occupational-healthand-safety programs in Ontario’s workplaces. We will provide additional details as they develop. ©
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2008 Council of Ontario Construction Associations
NOVEMBER 2008 TOP COAT
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Affiliate Report
Provinces Agree to Move on Labour Mobility Labour mobility was on the agenda at the recent Council of the Federation meeting held in Quebec City as premiers agreed that “full labour market participation and unimpeded mobility of labour is vital to Canada’s economic growth.” As a result it was agreed that the national Agreement on Internal Trade (AIT) would be amended by January 1, 2009 to facilitate this end. The proposed changes to the agreement will provide that: y Any worker certified for an occupation by a regulatory authority of one province or territory shall be recognized as qualified to practise that occupation by all other provinces and territories; and y Any exceptions to full labour market mobility will have to be clearly identified and justified as necessary to meet a legislative objective, such as the protection of public health or safety.
the highest monthly value for ICI permits since October 2007. According to Statistics Canada, Ontario’s 3.1% permit growth represents the single largest dollar-value increase, at $2.5 billion or 26.4% of all permits, driven by the value of construction intentions for non-residential buildings. This is the non-residential sector’s fourth-highest value since January 1989. As recessions are defined as two consecutive quarters of economic contraction, Ontarians will not know until figures are released in October whether they will have been able to stave off the psychological harbinger of a weakening economy. However, no matter the outcome, the immediate reality remains that ICI construction will be a prime contributor to provincial prosperity for the foreseeable future. ©
2008 Council of Ontario Construction Associations
The finer details impacting existing policies and standards are expected to be resolved (permitting for the full mutual recognition of occupational credentials between all provinces and territories) in time for the 2009 Council of the Federation meeting in Saskatchewan. A new and enhanced government-to-government dispute-resolution system will also be put in place, including monetary penalties to a maximum of $5 million. Recognition of professional/occupational and safety standards appears to be the issue requiring the greatest time and effort to harmonize by the January 1, 2009 deadline. While the elimination of barriers to labour mobility is an encouraging concept, satisfying existing mandatory worker and workplace safety regimes across jurisdictions will prove to be a daunting task. ©
2008 Council of Ontario Construction Associations
ICI Construction Driving Provincial Economy While Ontario’s economy appears to be skirting a recession, having contracted 0.3% from January to March at the cost of thousands of manufacturing-sector jobs, the ICI construction sector is flexing its muscles. The total value of building permits increased for the second consecutive month in May. The residential sector is continuing a significant downward trend, which began in late summer 2007. Nationally, the month of May saw contractors take out permits valued at $6.6 billion, 1.1% more than in April. This reflects
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Reprinted from FCA’s Contractor Talk – August 2008, with permission
Green Academy From August 6 to 8, 2008, employers and Labor met to focus their energy on green, during the LMCI’s first Green Academy Class. The Sustainability Training and Green Construction seminar was the first of its kind for FCA members. This class, which took place at the IUPAT Training Center in Hanover, MD, was geared to be one of the first steps when preparing for the LEED Accredited Professional exam. During this class, participants learned the basics of sustainability, prepared for the LEED (AP) exam, discussed bid interpretations and bid specs containing LEED specification at length, learned LEED financials and LEED best practices. While the class was not an all-encompassing session for those wishing to take the LEED AP exam, it is a good place to start. The LMCI plans to hold future Green Academy classes in local areas. ©
2008 Finishing Contractors Association
CLEAN UP WITH PURDY
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Z-coat Technology Our chemists have developed Z-coat technology, an innovative paint that dramatically reduces the odour associated with painting. This technologically advanced, environmentally friendly paint releases no volatile organic compounds, so we can all breathe easier.
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where quality and innovation merge General Paint continues to grow in Ontario with a manufacturing plant in Rexdale and 12 strategically located contractor centers for industrial, commercial and residential construction. For information contact: Jon Cardinall, District Manager 172 Belfield Rd., Rexdale (416) 243-7578, Fax: (416) 243-1886 or visit our website: www.generalpaint.com
NOVEMBER 2008 TOP COAT
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Member Profile
Time is
money for us and our customers Company President Ian Stone says his unique approach to business has made Paramount Painting & Decorating (London) Limited successful Normally, general managers have a variety of prices coming in from different contractors. What we do is try to make their lives easier. If we’re bidding on, say, a commercial job but it has some sandblasting components, we’ll quote the blasting along with the vinyl fabrics, the coatings and the painting. We offer one all-inclusive price. If it’s something we don’t do but we can sub it — scaffolding, for example — we’ll fold it in. Ian Stone: Company name: Paramount
Jurisdiction: Established: Specialty:
Painting & Decorating (London) Limited London 1963 Painting, decorating, coatings, sandblasting and maintenance services for the commercial, institutional and industrial sectors.
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Ian Stone spoke with Top Coat about what sets Paramount Painting & Decorating (London) Limited apart from its competitors in a changing, high-pressure market. At the heart of his company’s success is a belief in the familiar proverb, “time is money” – but with a twist. Ian keeps his sights on the profitability of his clients’ operations as closely as he does his own. That requires some unusual approaches to inventory, staff management and advocating for quality. Ian believes in having the versatility to offer “one-stop shopping” to the client
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In a time-is-money market, making customers wait is unacceptable. Ian stocks equipment and supplies with a view to minimizing wait time IS: If you’re going to provide a no-wait service to clients, you do have to invest in some basic
equipment. We own our scissor lifts and booms. We always have them ready, and we don’t have to worry about damage. We also carry a lot of inventory in paint: the primers, the basic finish coats, latexes, alkyds and white bases. We can tint them here in our shop. “Time is money” works both ways. If our crew is waiting for paint, they’re not producing. Our men will pick up the equipment and supplies they need in the morning, or the superintendent will run them out to the site. At Paramount, quality isn’t left to chance IS: We do the job right the first time, because we’re not getting paid to do it twice. General managers and owners have no aggravations with us. We’re the last trade in, so if we don’t do it right, we’re the one they see. Often we can make a poor builder look good, because we’re covering up his errors. Our superintendent visits every site every day. That gives us an opportunity to deal with obstacles as they emerge, and catch any quality or specification issues before they get too far down the road. Sometimes a commitment to high quality means saying, “No.” IS: As the business evolves, we’re becoming more selective in our bidding. The big jobs are going for nothing these days, on both the union and non-union side. Some of them just aren’t worth bidding. What we’ve done instead is diversify into maintenance. We’re working in
“What’s different about us is that we make sure everybody gets their fair share of the full-rate work...” — Ian Stone, President, Paramount Painting & Decorating (London) Limited
Member Profile
factories, plants, office buildings, and they call us back all the time. …And it means knowing when to push back or ask for a signature IS: My dad owned the business before me. He knew this trade inside out. He was a painter, he was street-smart, and he knew how to read people. I’ve been in the business since I was 19 years old, and what hasn’t changed is the need to be street-smart. There are more pressures today than 20 years ago. Customers, particularly in the commercial sector, want the cheapest price and are always trying to push you over. You have to know when to push back. You can’t, for example, paint when dust is flying in the air. On occasion, we find ourselves educating our clients about what it takes to get the work done on time and done right. Another thing: you used to do things on a handshake – not anymore. These days, you need more protection. The new code for me is that if you’re good enough to ask for it, you’re good enough to write it down. Our foremen use extra-work authorization books on the job. If we’re asked for over and above, we say, “Sure. Sign here.” Ian believes in a level playing field, where quality assurance is built into a universal inspection system IS: Time pressures sometimes mean that even the drawings aren’t right. Architects are missing a lot of things then they have trouble with people in our trade. The work isn’t getting done right or on time. So I’ve been talking to local architects about the OPCA inspection system and how it levels the playing field. I have a couple involved in the program now.
materials are specified and applied properly. Clients have to deal with the additional cost factor, but ultimately it makes their job easier. It comes back to doing it right the first time.
It’s all about relationships. I get calls from architects asking about workmanship on their jobs, and I tell them the inspection program would take (the entire) onus off them. They pay a fee and we put the fee in the quotation and so does everyone else. The job is guaranteed for 30 months rather than a year, and a qualified inspector makes sure the
Paramount is built on good people, fair play and a team effort to win work IS: We have a great team of guys and they rarely lose a day’s work. My guys – they’re lifers. We’re like a family here and that includes everybody helping to look for more work. They all have business cards. They visit the site trailers of all the other mechanical contractors or whoever else is on site, introduce themselves and ask if we can be of service. And we get calls. Part of what appeals to my crew is being exposed to all kinds of different job sites. We’re also enabled [the provision contained within the Collective Bargaining Agreement that allows unionized painting contractors to be price competitive in an effort to increase market share in targeted areas]; it’s a good vehicle to get work. What’s different about us is that we make sure everybody gets their fair share of the full-rate work and, in turn, the crew is fair about giving some of [its] time to the enabled work. Sharing it in this way makes it more digestible. It also exposes them to the reality that there are a lot of people working who aren’t as good tradesmen as they are.
For more information about Paramount Painting & Decorating (London) Limited, contact Ian Stone by email at ian.stone@paramountpaintinglondon.com or stoners@comcast.net, or by phone at 519-433-8181, ext. 22.
- PRESIDENT Paramount Painting & Decorating (London) LIMITED Ian Stone
Paramount Painting & Decorating (London) Limited 44 Paddington Ave., London, ON N6J 2S6 Fax: 519-679-0268
NOVEMBER 2008 TOP COAT
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Training Matters lasting a hundred years. I’ve been part of a crew that has painted two bridges in the past. In New York, they continuously paint the Brooklyn Bridge all year long to keep it from breaking down. We drive over those things.” George’s commitment to safety is one of the reasons he chose to work inside the union.
Andrew Sefton, OPCA; $1,500 Malcolm Satov recipient George Kostopoulos; $500 Malcolm Satov recipient David Gillis; $750 Malcolm Satov recipient Joshua Gordanier; and Bill Nicholls, IUPAT
From left to right:
George Kostopoulos Wins Malcolm Satov Award Winner takes pride in his work and attributes job satisfaction to the union environment By Heidi Croot
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A client’s smile of satisfaction. A fresh outlook. A clean environment. These, and the many other rewards of the painting trade, are what enticed George Kostopoulos to retire his career in the restaurant industry and take up the brush again. “Painting is something I have enjoyed doing since I was a teenager and my father hired a crew to paint our house,” says George, the 2008 Malcolm Satov Award winner. “I was shown a couple of things by friends along the way and got the hang of it.” Kostopoulos, who specializes in refined corporate finishes, was presented with the Malcolm Satov Memorial Award by OPCA executive director Andrew Sefton on Feb. 26, 2008, at the Ontario Industrial and Finishing Skills Centre.
Training for craftsmanship Now that he’s completed both his apprenticeship hours and his training at the Ontario Industrial and Finishing Skills Centre in Toronto, with just the Certificate of
Qualification left to go, George is well down the road to putting his skills to work. “I get to work with unique products,” he says about a recent job involving the transformation of an office-building lobby. “I gave a shabby elevator door a pristine, almost-automotive finish – it was like glass. The craftsmanship applied to the lobby was beautiful, and I felt part of it when I put that finish on the elevator door.”
Choosing pride in work over “slap it up and go” George launched his painting career seven years ago by redoing apartments. He hated it. “I couldn’t take pride in the work,” he says. “It was nothing more than non-union ‘slap-it-upand-go.’ There was no finesse. It was just about getting the colour on the wall.” To gain skills that would open up better opportunities, he enrolled at the Skills Centre, where he learned about the fine points of his trade: the chemistry of paint, product compatibilities, and how to apply it properly. It’s a skill and a source of job satisfaction that will, as he says, last a lifetime.
Valuing the union’s focus on safety Another attribute of the unionized painting trade that appeals to George is its focus on safety.
George with his wife, Michelle
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TOP COAT NOVEMBER 2008
“Painting is about health,” he observes. “Take bridges, for example. Painters use special methods and products to keep bridges safe and
“Safety is one of the best things the union can and has provided for workers – period,” he says. “In general, non-union workers will cut corners; I know that because I’ve seen it. Where I work, I know someone’s going to stand at the bottom of my ladder and hold it for me. It eases your mind, knowing that at the end of the day, you’re going to come home again.”
Pointing apprentices toward a collaborative workplace environment What would George want to tell aspiring journeymen? “You need to be a people person,” he says. “You deal with people all day. You need to understand what your clients want, and you need to work well with your crew.” Second, he’d tell them that good craftsmen always keep learning, including when school is out. “In the union, you’ll always get a helping hand,” he says. “Your fellow workers aren’t afraid to say, ‘Hey, maybe handle the brush a little differently, or tap it in a different way; it’ll make your job easier and better.’ You won’t find a cut-throat attitude in the union.” And third: “Take the step,” says George. “I’m dyslexic, which takes some effort to overcome, but the school helped by giving me more time, and my instructor was there to answer any questions I had. There’s no goal that’s too high, and you have nothing to lose.” The Malcolm Satov Memorial Awards are given each year in memory of painting contractor Malcolm Satov (1942-1999), a dedicated OPCA volunteer who, throughout his career, was a passionate advocate for continuous learning through apprenticeship training and journeyman upgrading. The 2008 Malcolm Satov Memorial Awards were awarded to third-year apprentices in February 2008. The award recognizes skill and accomplishments of advanced-class participants. Funding of the awards is provided by generous contributions from the contractor and supplier members of OPCA, the International Union of Painters and Allied Trades and the Training Centre Trust Fund (TCTF), of which Malcolm Satov was a trustee.
Environment
Painting in Today’s Greener Environment The coating industry reacts to environmental concerns by examining paint formulation, estimator tools and product choice
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Estimator Tools – Minimize Waste
Formulating for Low VOC
Reducing VOCs will impact air quality, however other steps should also be taken to reduce the impact of paints on the environment. Three simple steps go a long way to minimizing the environmental footprint:
“Green” and “sustainability” are two words widely used across many industries today. And, no surprise, these terms are becoming commonplace in coatings. Here we’ll discuss how the coating industry is responding to these trends.
Low-VOC formulating has been mandated by regulations for over a decade. Today, we see many flat paints at less than 100 g/litre of VOC. When you consider the performance expectation of flat paints, along with the relative amounts of binder and pigment in a flat formulation, it is easy to imagine that the VOC targets for flat paints can be met.
• plan the job; • buy the right level of paint; and • use the best method to dispose of extra
But even the more-demanding, non-flat formulations are routinely offered at less than 100 g/litre of VOCs. Achieving excellent performance at low VOC is primarily the result of improvements in binder design and innovations in the additive package.
Second, measure the area to be painted and use the manufacturers’ recommended spread rate to estimate the amount of paint to complete the job. Remember that the quantity of paint needed will change depending on the roughness and porosity of the surface, along with the number of coats needed to provide adequate coverage.
paint and paint waste. In the first case, consideration must be given to the type and condition of the substrate being painted.
Third, note that each municipality has different recommendations for handling paint waste. Although it may be somewhat invisible to you, it costs municipalities real dollars to dispose of waste paint. So be wise – use it up, dry it up or pass it on!
Choose a Durable Product Optimized for the Right Substrate and the Right Environment What is a reasonable expectation for how long a paint job should last? Whether you are painting for aesthetic reasons or for protection, our studies have shown that, over time, higher-quality and moredurable products require less maintenance, and thereby deliver much better value. This value proposition holds even as more environmentally friendly paints are
introduced. A safe bet is to use high-quality 100 per cent acrylic paints. Demand for green buildings is growing and so, too, is the number of contractors preparing for green marketing. Ask yourself these questions before starting a project:
• Are you using quality products that have maximum durability?
• Are you offering to collect any extra paint at job sites?
• Are you using best practices to dispose of waste paint and paint materials? © Painting Contractor Newsletter, July 2008, Paint Quality Institute. Reprinted with permission.
NOVEMBER 2008 TOP COAT
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Painting Matters
Breathing Easy with
Green
Paint Eco-friendly paints increase market value of
projects, decrease job time and also contain low VOCs and odour By Steve Revnew
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Today, selecting paint for a commercial project goes beyond just aesthetics. Green initiatives and products are being mandated on national and local levels for corporations, retailers and commercial builders alike. As the building momentum trends toward a greener world, building owners and facility managers must be competent in the standards, specifications and technology influencing the industry.
Not only can green products increase the market value of projects and earn thirdparty validations for achievements, but using them is also just the right thing to do for the environment. Of course, one of the major components of environmentally responsible building is selecting the appropriate paint for each project, be it an office complex, retail centre, school or other public facility. Air quality in these spaces is a leading concern, and paints that reduce the emission of volatile organic compounds (VOCs) and are low in odour contribute to better indoor air quality. Although there are misconceptions about the prohibitive costs of green coating options, leading manufacturers offer paint that is low-VOC with better hiding, which translates to fewer coats needed and offers durability, thus minimizing the frequency of costly repaints and callbacks. Specifying environmentally responsible building materials, across the board, has a positive effect on the users of these facilities. Some of the benefits include reduced operating costs, improved energy efficiency and diminished exposure to pollutants. In fact, a recent study by the U.S. Green Building Council — the premier group of building-industry leaders promoting earth-friendly construction practices — claims that children in sustainable schools have 20 per cent better test scores, and hospitals using environmentally sound technologies discharge patients twoand-half days earlier than traditional hospitals. And, on the retail side, the study reports that consumers linger longer and spend more money in green buildings. Choosing sustainable materials, including paint, is easier than ever.
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Painting Matters
Advances in technology have brought a new generation of green paints to the market that have low or no VOCs, are silica-free and are low in odour yet still offer the performance characteristics expected in a high-quality coating. y
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Better resistance to dirt: Paints with quality ingredients will be more resistant to dirt and require less washing. Better resistance to scrubbing: Quality paints can withstand repeated washings and will retain colour longer.
Manufacturers across the board in every sector of the building industry — manufacturers who make everything from appliances to cabinetry and furniture and, of course, paints — are revising their product offerings to meet green building needs, and many public spaces are already enjoying the fruits of these efforts. For instance, Chicago’s Merchandise Mart – an interior-design mecca of products – recently received LEED silver certification for its dedication to using sustainable materials, while the Hearst Corporation set the tone for green building in Manhattan. Daylight sensors, low-emission glass and zeroVOC paint were all specified in Hearst’s new headquarters. To that end, choosing zero- or low-VOC paints won’t compromise indoor air quality or the public – and planet’s – health. In addition to being the responsible selection, such paint is a benefit to contractors because its limited amount of airborne volatile compounds makes it possible for construction crews to work alongside painting crews, thus reducing job time. What’s more, high-quality, environmentally responsible paints may also contain antimicrobial properties that resist mildew, bacteria and other microbes while maintaining durability and a fresh appearance longer; spaces covered with these coatings require infrequent repaints. Steve Revnew, director of marketing, product development for Sherwin-Williams, understands paint from the inside out. A chemist by training and education, Steve practised his profession in SherwinWilliams research and development labs before venturing into the world of marketing and sales. During his two-decade tenure with North America’s largest paint manufacturer and retailer, Steve has served as a sales representative, sales manager and district manager, meaning that not only can he solve complex chemical puzzles, he can resolve critical customer concerns, as well.
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Better resistance to burnishing: You will notice fewer “shiny” burnish spots from rubbing and cleaning, which means fewer repaints.
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Better resistance to mould: These coatings may also contain antimicrobial properties, which resist mildew, bacteria and other microbes.
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Better hiding: Better ingredients allow the paint to cover better with less work. In the end, you’ll need to apply fewer coats, which will save you time and money and result in better indoor air quality.
Need help with health and safety? Construction Safety Association of Ontario
The Construction Safety Association of Ontario (CSAO) offers a variety of products and services to help you keep your jobsites and your workers safe.
� � � � � �
Training programs Books, CDs, videos Tip sheets, posters Latest research Email updates Consultation
Most of our products and services are available at no additional charge to members. You’ve already paid for them through your WSIB premiums. Contact CSAO today to find out what we can do for you. Tel: 1-800-781-2726 Fax: 416-674-8866
info@csao.org www.csao.org
NOVEMBER 2008 TOP COAT
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Economic Outlook
By Adam Cywinski, OCS
Ontario Construction Secretariat Ontario Regional Permits, First Half 2008 Construction Activity Update Northern Ontario ICI building permits were estimated at $237 million for the first half of 2008, down almost 14% compared with last year. It is important to note that small market areas, such as Northern Ontario, are subject to volatile swings in the overall value of building permits. After a record $280 million in institutional building permits in 2007, institutional permits totalled just over $88 million in the first half of 2008, 48% lower than in the same period last year. Although there are far fewer large hospital projects planned for 2008, compared with the bonanza in 2007, hospital projects continued to drive institutional permits in Northern Ontario. A 67% increase in the value of commercial building permits over the first half of 2008 helped to offset the decrease in planned institutional activity. Commercial building intentions, clustered primarily in the Sudbury region, totalled a record $118 million in the first half of 2008. The robust economic growth in Sudbury has contributed to increased building activity in the city’s hospitality, retail and recreation building segments. The total value of ICI permits in Eastern Ontario was estimated at $602 million for the first six months of 2008, down
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9.3% compared with 2007. Building intentions increased only in the institutional sector, at $237 million, an increase of 32% over 2007 levels. The increase is driven primarily by a 75% increase in the value of institutional permits in the Kingston area. In Ottawa, institutional building intentions were down 7% compared with the first half of 2007. In the commercial sector, the permit values totalled $318 million for the Eastern region, down 17% compared with the same period in 2007. A decrease in the value of building intentions for large office projects in the Ottawa region pulled down Ottawa commercial permit values by 24% compared with the first half of 2008. Industrial permits made up the smallest component of ICI building intentions over the first half of 2008, totalling only $48 million, a 54% decrease compared with the same period in 2008. The value of ICI permits in the GTA continued to grow, but at a decelerating pace. Compared with the first half of 2007, the value of ICI building permits increased 5.8%, to $2.7 billion at the midyear mark. Much of the strength came from a 15% increase in the value of commercial permits, especially in the first quarter of the year. Hotel and condominium building intentions continue to be the main driver of growth. However, with many condo and office-tower projects underway across the GTA, it is unlikely that the market can continue in 2008 the pace witnessed in 2007. Institutional building intentions, valued at $667 million in the first half of 2008, are up 5% compared with 2007.
The value of industrial permits totalled $447 million in the first half of 2008, down 17% compared with the same period in the previous year, during which major work was being initiated at the GM plant in Oshawa. However, the start of work on the Halton Hills gas-fired power-plant project supported GTA industrial permits to some extent. Central Ontario was the only region to record increases in the value of permits across all three sectors. Double-digit gains in the industrial, institutional and commercial sectors pushed up the overall value of ICI building permits to almost $1.3 billion for the first six months of the year, up 25% over the same period in 2007. The Central Ontario region covers a large area stretching from west of Kingston, across to Kitchener and down to Niagara Falls (excluding the GTA). Because the area spans such a broad and diverse area, sector growth tends to vary significantly across the region. Institutional permit values across the entire Central region totalled $419 million, up 34%, compared with last year. However, over half of the values of the region’s total institutional permits were concentrated in the Hamilton-Niagara peninsula, where the value of institutional permits increased some 76%. Hospital projects, such as the Hamilton Health Sciences Building and the Henderson General Hospital, were two of the main contributors to the increase. Commercial permit values in Central Ontario totalled $573 million in the first
Economic Outlook
half of this year, a 20% increase over the same period in 2007. Kitchener, Waterloo, and Barrie accounted for most of the increase, registering a 40% increase in the value of commercial permits over the previous year. Large retail condo/retail developments in Barrie, as well as large retail projects in Kitchener, were the primary drivers behind the increase. Although industrial permit values in Central Ontario totalled over $291 million in the first half of 2008, up 22% over the same period last year, the Kitchener–Waterloo–Barrie area of Central Ontario was the only area in which industrial permit values increased. Water-treatment projects and continued strength in industrial building intentions around the Kitchener-Waterloo region contributed to a robust 40% increase in the value of industrial permits over the first half of 2007. In South-Western Ontario, total ICI permit values were estimated at $609 million for the first half of the year, down 24% compared with 2007. The institutional sector was the only sector within ICI to record growth in building intentions over 2007. Industrial permit values, although still strong at $952 million, were down almost 28%. The decrease was primarily due to the effect of the Toyota Woodstock plant, which caused a large spike in the value of industrial building permits at the beginning of last year. South-Western Ontario’s institutional permit values increased 93% in the first half of this year, compared with 2007. Key markets were hospital projects in the London and Bruce regions, including the London Health Sciences Building and Stratford General, as well as a number of retirement residences in the region. These projects helped push total institutional permit values to $316 million in the first half of 2008. Commercial permit values were down across all of South-Western Ontario, with the largest decrease in London, where commercial building intentions decreased by 53% compared with the first half of 2007. Overall commercial permit values for the entire region totalled $158 million for the first two quarters of the year, down 33% compared with 2007.
Reprinted from OCS Eye on ICI, August 2008 edition, with permission.
Northern Ontario Sector
Value
Industrial
$31,073
-9.0%
Commercial
$118,047
66.7%
Institutional
$88,080
-48.2%
↓
$237,200
-13.8%
↓
Sector
Value
Change
Industrial
$47,757
-53.6%
↓
Commercial
$317,754
-16.8%
↓
Institutional
$236,937
32.2% ↑
Total ICI
$602,448
-9.3%
Value
Change
$447,019
-16.7%
Total ICI
Change
Eastern Ontario
↓
GTA Ontario Sector Industrial
↓
Commercial
$1,630,783
14.7% ↑
Institutional
$667,463
5.0% ↑
$2,745,265
5.8% ↑
Total ICI
Central Ontario Sector
Value
Change
Industrial
$291,293
22.1% ↑
Commercial
$572,875
20.7% ↑
Institutional
$419,779
33.8% ↑
$1,283,947
25.0% ↑
Total ICI
South-Western Ontario Sector
Value
Change
Industrial
$134,627
-66.4%
↓
Commercial
$158,464
-33.0%
↓
Institutional
$316,014
92.8% ↑
Total ICI
$609,105
-23.9%
↓
Source: Statscan, OCS NOVEMBER 2008 TOP COAT
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Money Matters
Shareholders’ Agreements What they are and why should you have one By Rahul Shastri
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You decide to go into business with a family member, friend or trusted colleague. You set up a corporation and each of you is an equal owner. The business idea is good and you work well with one another. As the years go by, your business flourishes. You are both doing well and are happy with the business’s performance. Then one of the following happens:
• you are no longer able to work together and wish to part ways;
• one of your marriages fails, threatening
• What happens in the event of an offer A well-crafted shareholders’ agreement should cover a number of matters, including the following issues:
• Who can own shares in the business? • To whom may shares be transferred and
the ownership of the business; or
• one of you becomes disabled or dies, leaving the ownership of the business, as well as the obligations of the business, undefined. Without a shareholders’ agreement, you may find yourself in a drawn-out and expensive dispute. The use of a shareholders’ agreement will save you money, time, aggravation and, most importantly, your business.
What is a Shareholders’ Agreement? A shareholders’ agreement is a document signed by all of the shareholders of a business. It spells out the rights, obligations and expectations of the shareholders. It is important to understand that a shareholders’ agreement will have no impact on the rights of a third party in its dealings with the shareholders, as representatives of the business, or the business itself.
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• • • • • • • •
on what terms? Shareholder agreements may be used effectively to permit tax and estate planning. How can a new investor be brought into the business? Who can be appointed or elected as a director, and how? Who can make major and material decisions about the business, and how are they made? Who has control over the business’s bank accounts? How is new money needed by the business to be raised? What are the restrictions on competition and solicitation of the business’s clients and employees? How is ownership determined in the event that one of the shareholders becomes bankrupt or disabled, dies or divorces? How would the shareholders uncouple their interests if they decide that to do so is in their best interests? A buy/sell or “shotgun” clause includes the specific terms by which one shareholder would sell out to the other(s).
from a third party to purchase the business? An arbitration clause should also be included to deal with any remaining matters not specifically contemplated under the agreement. The benefit of arbitration is that a dispute will remain private and will likely be resolved more quickly than it would if pursued through normal court-litigation channels. Sooner or later and, despite the best intentions of its shareholders, a business will change. More importantly, shareholders’ expectations and views will change, to the point that they might diverge. A well-prepared shareholders’ agreement will allow a business and its shareholders to face this outcome with confidence, knowing that such a change will not result in bitter conflict that could have the effect of tearing apart the very business that its principals spent years developing. Instead, a properly structured shareholders’ agreement will permit the ongoing survival and success of that business, in spite of changes. Rahul Shastri is a senior partner at the law firm of Kagan Shastri, located in Toronto. His practice focuses on commercial litigation and transactions. He may be reached via email at rshastri@kzfs.com.
Legal Matters
Getting Information about Trust and Lien Rights Definition of a labour and material bond and an explanation of the lien process By David Debenham
In the two previous editions of Top Coat, an introduction was provided to the obligations, rights and contractual relationships between the parties involved in any construction project, large or small. In this edition, an explanation of a labour and material bond will be provided, along with a description of the lien process.
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Section 39 of the Construction Lien Act (“the Act”) provides tradesmen with the right to ask the mortgagee, owner and contractor on a project to provide an accounting of monies advanced by all the building mortgagees, the monies paid by the owner to the contractor, and by the contractor to his sub-contractor(s). This section also allows the trades to obtain a copy of any labour and material bonds posted for the project and various other forms of information. Section 39 is, therefore, critical to obtaining information that can allow trades to ascertain information about holdback, trust and bond obligations on a relatively quick and inexpensive basis. To comply with the provisions of the Act, trades must make a written demand on the mortgagee, owner, and/or contractor, as the case may be, seeking a mortgagee statement from the building mortgagees and information about any labour and material bonds, the contract price and the monies advanced under the general contract and sub-contracts, from the parties concerned. If the demand is ignored, a court order to produce this information can be obtained at the requestee’s expense. Trades should obtain a copy of a building permit on the job from the owner, consultant or the municipality. The permit often gives the legal description of the property being improved by their labour, services or material. With that information, trades can, by doing a search at the local government real estate registry office, discover who owns the property
and who is financing the project with a building mortgage. With a proper legal or municipal description of the property, most law firms can obtain this information on the E-Registry statement. Proper legal descriptions can sometimes be obtained by calling the local municipal tax office and providing it with the proper municipal address for the improved land. Certificates of Substantial Completion are published in the Daily Commercial News. Certificates can be obtained by calling 905-752-5546, ext. 5513.
Why: Priority of Payment Bankruptcies make it very difficult for tradesmen to recover any money unless they register a claim for lien. While a trust claim may survive bankruptcy, establishing a breach of trust is often a lengthy and expensive process where there is an intervening bankruptcy. Registering a claim for lien, and perfecting that claim when the time comes, makes a trades a secured creditor who has a simple claim against the holdback that is not impeded by the contracting party’s bankruptcy. The holdback obligation leapfrogs the bankrupt contracting party and constitutes a direct claim against their “payer,” which is unaffected by the bankruptcy. Lien claims are important because: 1. they are the only way to preserve a claim to the holdback, which is secured by an interest in the land that is superior to the owner and the building mortgagee’s interests in the land; 2. the claims for holdback are unimpeded by insolvency proceeding, and for many tradesmen are the only quick source of payment; 3. they give the tradesmen the right to appoint a construction lien trustee through court proceedings, which may
result in a project being completed and sold for its true value and thus, allow them to maximize the amount of money owed to them; 4. without this claim, the trades may be left to expensively pursue trust or bond claims without a guarantee of recovery; and 5. owners and others cannot set-off against the holdback. The holdback is a statutorily mandated “‘insurance fund” that must be there to satisfy lien claims. Without a claim for lien, a trades has no readily available fund to satisfy amounts due to him. Relying on others above them in the construction pyramid to lien for the work or materials provided does not preserve the trade’s claim to the holdback. © 2008, Lang Michener LLP. David Debenham is a member of the Commercial Litigation Group in Ottawa. Mr. Debenham’s practice focuses on commercial and construction litigation.
Please note: This information offers general comments on legal developments of concern to business and individuals. This publication is not intended to provide legal opinions and should not be a substitute for professional advice. Readers should, therefore, seek professional legal advice on the particular issues that concern them. Please contact David Debenham by telephone at 613-232-7171, ext. 103, or by email at ddebenham@langmichener.ca.
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OPCA News
2008 OPCA Golf Tournament The 2008 OPCA Golf Tournament was hailed as another success in both attendance and the fostering of camaraderie.
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As the primary venue for fundraising for the Malcolm Satov Memorial Award – the annual award provided to painter trade apprentices who exhibit exemplary academic achievement and exceptional work experience – the 2008 Tournament raised $10,000, an amount far surpassing all prior fundraising events. The OPCA looks forward to exceeding the 2008 record-breaking achievement at the 2009 OPCA Golf Tournament.
The OPCA welcomed Minister of Training, Colleges and Universities, John Milloy, who spoke on the benefits of apprenticeship and his outstanding visit to the Ontario Industrial Finishing and Skills Centre (OIFSC). Investing in the skills and knowledge of Ontarians is a cornerstone of the Ontario government’s plan to strengthen the economy. Together with its partners in education, the
2008 LMCI Sustainability Training
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Andrew Sefton joined many painter, glazier and taper contractors at the Finishing Trades Institute to participate in its first-ever Sustainability Training/Green Construction seminar. Green construction is now present in our industries and is growing daily. Green construction is achieved when design, engineering and building processes minimize
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TOP COAT NOVEMBER 2008
waste and result in an energyefficient building. Many new proposals are going green by design, by intent or by law. Bid specs contain language and specifications that are sometimes intimidating and restrictive and have major financial impact on the proposal. This seminar addressed the concerns, studied the variations of bid specifications that are appearing and provided a
government is working to ensure that students have the support and the tools they need to succeed. New post-secondary and training investments in the 2008 Budget include: • $560 million over three years to expand and improve training and apprenticeship programs across the province; • $465 million over three years to provide more support for
methodology to successfully submit a winning proposal. In response, the Painters and Allied Trades Labour Management Cooperation Initiative (LMCI), along with the Finishing Trades Institute (FTI), met with a leading educator for contractors in green construction. The FTI and Cuyahoga Community College (specifically, The Green Academy of Workforce Development) have entered into a co-operative training program to deliver coursework in sustainability, especially as it applies to the construction industry. The focus of the partnership is to develop and deliver a two-and-a-half day educational seminar on the following topics: • Overview of sustainability • Preparation for the LEED AP accreditation test • Bid interpretation and bid specs containing LEED specifications
students, including $385 million for textbook and technology grants and $27 million for distance grants to help students in remote areas with travel costs; and • $200 million in 2007/08 to maintain and upgrade university facilities.
• Financial analysis of LEED construction • Best practices for the trades in installation of energy-efficient (LEED) construction and other courses under development. Following the success of its 2008 sustainability training program, the LMCI is seeking to release further training opportunities to ensure market success.
OPCA News
2008 Training Director Seminar
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The Finishing Trades Institute (FTI) just completed a successful week of hosting IUPAT training directors at the 2008 Directors of Training Seminar. The seminar was a three-day program exclusively for DC/LU training directors and training co-ordinators to network with their peers, share experiences and discuss industry issues. Held at the FTI’s International Training Center in Hanover, Md., the seminar was a dynamic
blend of presentations and interactive discussions that identified common challenges, needs and best practices for IUPAT apprenticeship and journeyperson training programs. FTI Director Dan Penski welcomed participants to the seminar and was followed by IUPAT General President James Williams, who praised the commitment of the attendees while stressing how important training is to the International
Union of Painters and Allied Trades. Other guest speakers included: IUPAT Executive General Vice-President and FTI Co-Chair Kenneth Rigmaiden; Eureka Glass President and FTI Co-Chair Terry Webb; Executive Assistant to the General Secretary-Treasurer Charles Harris; FTI Legal Counsel Warren Borish; Finishing Contractors Association CEO Stuart Binstock; Labor Management Corporation Initiative Industrial Liaison John Courtien; and Job Corps
National Project Co-ordinator Andrew Larson. The directors participated in break-out sessions on curriculum and instruction, FTI policy and procedures, online curriculum, and FTI recruitment and retention. Participants in the seminar found it to be a great way to network with their peers, and they look forward to having additional seminars in the future.
2008 Labour Day Parade
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Andrew Sefton and his family proudly joined the International Union of Painters and Allied Trades in the annual Labour Day Parade in Toronto that starts at University Avenue and Queen Street and ends at the Canadian National Exhibition. The Labour Day Parade is a great opportunity to show the solidarity of those organizations that represent the interests of the individual workers that comprise Ontario’s construction work force, which is one of Canada’s largest. The annual parade is a reminder to all Ontarians that a fair wage: • supports productivity and innovation in the construction industry; • encourages the use of more skilled and better qualified labour and thereby supports industry and worker investments in skills training and apprenticeship; • curtails underground practices and creates a level playing field for competitive bidding; • protects local employment and thereby increases the benefits to the local economy from construction that is financed by local funds; and • ensures a competitive disadvantage upon those who rely on cheap wages, independent operators and lower safety standards. NOVEMBER 2008 TOP COAT
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Assurance Matters
Contract Surety
Bonding
– Part II
The importance of financial statements and schedules and how to deal with a surety company By John Cook and Charles Quenneville
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Continuing our discussion on bonding: In Part I of this article, in the July issue of Top Coat, we looked at what contract surety bonding is and who typically uses bonds. In addition, we discussed how to prepare your business for the rigorous prequalification stage that is necessary when first establishing a bonding facility with a surety company. Moving forward, we will discuss the importance of having healthy financial statements and a regularly updated workin-progress schedule. We will also review how to approach a surety company, and the obligations involved when signing an indemnity agreement. Financial statements can be prepared on three levels, which include: 1) audit, 2) review engagement and 3) notice to reader. The surety company prefers “audited” financial statements, but in reality, many small to-medium-sized contractors probably do not have their accountants prepare their financials on an audited basis. So, most surety companies will consider accepting financials prepared on a “review engagement” basis, even though this form of preparation is far less comprehensive than an audit. Statements prepared on a “notice to reader” basis will generally not be acceptable
The main difference between surety and insurance is that if a claim payment is made under a surety bond, the contractor has to pay the surety company back
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TOP COAT NOVEMBER 2008
to a surety company, and any contractor planning on applying for a bond facility should start by having his or her accountant review such statements and revise them to a review or audit basis. You will most likely be expected to submit interim statements for the current year. These can be prepared in-house by a bookkeeper or controller, allowing the surety underwriter to monitor the contractors’ financial results over the year. Interims are usually requested quarterly. The last piece of the puzzle that the surety company needs to get a good picture of your business is a schedule of work in progress. Usually requested quarterly, this schedule helps the surety underwriter keep track of the jobs that the contractor is presently undertaking. This report should include: • change orders; • amount billed to date; • cost incurred to date; • revised estimate of the cost to complete; • estimated gross profit; • Anticipated completion date; and • Outstanding bids on new jobs. Once the surety file is complete, your surety broker will submit a copy to the bonding company for consideration. In many cases, the company underwriter may wish to meet with your key people and perhaps even the accountant that prepared the financials. Be prepared to discuss all aspects of your business, from current operations and ongoing projects to future plans for growth and perpetuation. The main difference between surety and insurance is that if a claim payment is made under a surety bond, the contractor has to pay the surety company back! Therefore, you will be asked to sign an indemnity agreement. This agreement will be required of the contractor and the individual owners of the contracting firm and sometimes the owners’ spouses. The agreement obligates you to repay any money paid under the bond to finish a job. Indemnity agreements include all company assets and personal assets of the owners, which are signed
off as collateral. This means that if you default on a bonded project, you must use whatever corporate or personal resources necessary to repay the surety company. Remember, surety bonds are a financial tool much like a bank loan or line of credit, rather than an insurance product. Sometimes, the bonding company will advise you to inject more cash into the operations, or to finish other ongoing work before they will issue more new bonds. When you’re bidding on new jobs, try to give your surety broker as much time as possible to secure the bid bond. Having a bonding facility does cut down on the lead time, but the surety company must still conduct its required underwriting procedures before it can issue the new bond. The relationship between the contractor, the broker and the surety company is very important. When there is very little time to process a new bond request, a good relationship between all parties could make the difference between getting a new bond and missing a deadline. This can also be true for when you are requesting bonds on larger-than-normal jobs. After the bonds are written, the surety company continuously evaluates the overall performance and financial position of your business. Positive results will usually serve as the basis for an increase in the surety capacity, allowing you to bid on larger projects that require bonds. The initial time and effort required to start a new bond facility may seem daunting, but the long-term benefits are evident. A good relationship with your surety company can help you grow through the issuance of larger bonds for larger projects. 2008, John Cook and Charles Quenneville, The CG&B Group. The information contained in this article does not constitute advice or direction and is provided for informational purposes. Please confirm your situation with your assurance advisor, or contact Charles Quenneville by phone at 905-948-2672 or by email at charles.quenneville@cgbgroup.com. ©
Marketing Matters
give you tremendous insight into your customer’s expectations.
• Another factor is the length of time
Keep the
Sale
Strategies to make you stand out from the competition and retain clients By Kelley Robertson
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Does this sound familiar? After dozens of phones calls and emails, as well as several face-to-face meetings, you finally reach an agreement with a prospect who is intent on buying your service, product or solution. “Whew! Another sale done,” you think to yourself. But, wait. Before you start counting your commission, it is critical that you keep the sale. Just because a prospect has agreed to move forward, it does not mean that the sale will move forward, especially if you sell a complex system or solution. Dozens of things can happen to derail your efforts. Your key contact may change companies or positions. The person you are dealing with might get cold feet, lose interest or decide to change vendors. The company may be acquired or sold. A competitor may approach your prospect with a better offer. There is no such thing as a guaranteed sale, even if you are holding a signed contract. That means you need to ensure that you keep the sale. Here are several strategies you can incorporate into your business that will help you achieve this. y1. First, send some form of acknowledgement or thank you. I know
this sounds like an elementary concept, but most salespeople don’t think of doing this. They take the sale and move on to the next prospect. However, if you send a thank-you card immediately after you confirm a sale, you differentiate yourself from your competition. You can also use postcards. The key is to show your new customers that you value their business, and thanking them is just one small gesture that demonstrates this. y2. The next thing to do is regularly update your new customers. Keep them informed about things like delivery or shipment status and installation dates and schedules. If you sell a highly customized product, make sure you advise them on the progress of the development of their product. Frequency of updates will depend on a few factors:
• What do your key decision-makers expect or want? If you’re dealing with a detail-oriented person, he or she will require more frequent updates than someone who is less detail-oriented. The easiest way to determine this is to ask this question, “How often do you want me to send you updates?” A simple question, but one that will
that occurs between the time of your agreement and when your services will be rendered or your product will be delivered. The more time that elapses between these two, the more important it is for you to update your customer. For example, in my particular business, it is not uncommon for a company to book me for a keynote speech or training workshop up to a year in advance. During this time, I try to send the customer some form of update so he or she knows I have not forgotten about the event. y3. Send customers additional information of value. This includes articles, magazine and newspaper clippings or other information that is relevant to their businesses. You could send, for example, an article that mentions a strategic move one of the company’s competitors is about to make or an article on a topic that relates to your key contact’s interests. You may come across a newspaper article about your contact’s company; clip this article and send it your client. It does not matter if he or she has already read the article. Your gesture is meant to show that you are paying attention to his or her business – and most salespeople do not do this. One word of caution – do not send information about your product. This is not about you! It is about giving your new customer a reason to keep the sale with you. y4. Depending on the size of the sale, you could send a book that will help your customer with his or her business. There are a multitude of books on the market today, addressing virtually every business situation. If your client enjoys reading, then it makes good business sense to send him a book that will help improve his results. I have sent books to my clients that focus on communication, leadership, sales and customer service. Attach a brief note explaining why you sent this book.
Just because a prospect has agreed to move forward, it does not mean that the sale will move forward, especially if you sell a complex system or solution NOVEMBER 2008 TOP COAT
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Marketing Matters
y 5. Lastly, reinforce the buying decision. The easiest way to do this is to send the customer testimonials from satisfied customers. An even more effective approach is to ask one of your existing clients to call your new customer. People want reassurances that they have made sound buying decisions, so just imagine the impact if your new customer heard a voicemail message from one of your other clients stating how satisfied he or she was with your product, service or solution. These may sound like simple concepts. However, I know from experience that very few salespeople actually use them. Integrating these strategies into your routine will not only help you differentiate yourself from your competition, it will also help you increase your odds of keeping every sale you make.
Kelley Robertson, author of The Secrets of Power Selling, helps sales professionals and businesses discover new techniques to improve their sales and profits. Receive a free copy of 100 Ways to Increase Your Sales by subscribing to his free newsletter, available at www.kelleyrobertson.com. Kelley conducts workshops and speaks regularly at sales meetings and conferences. For information on his programs, contact him at 905-633-7750 or Kelley@RobertsonTrainingGroup.com.
There is no such thing as a guaranteed sale, even if you are holding a signed contract. That means you need to ensure that you keep the sale
November 2008
The Official Voice of Painting, Decorating and Coating in Ontario
ADVERTISERS’ INDEX
Benjamin Moore & Co. Ltd. www.benjaminmoore.com
1/4v ONT131 O.C.I.U.P.
Construction Safety Association of Ontario www.csao.org
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Exaktime www.exaktime.com
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General Paint Corp. www.generalpaint.com
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ICI Canada Inc. www.ici.com
Ontario Council of the International Union of Painters and Allied Trades www.iupat.on.ca
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OPTA Minerals Inc. www.optaminerals.com
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Para Paint www.para.com
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15
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PPG www.pittsburghpaints.com
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Outside
Back Cover
Purdy Professional Painting Tools www.purdycorp.com
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Workplace Safety & Insurance Board www.wsib.on.ca
Back Cover
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LMCI Inside Front Cover www.lmcionline.org ............................................
OIFSC www.oifsc.com
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TOP COAT NOVEMBER 2008
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Inside
Tough paint. Five Great Reasons to Use Dulux Diamond Exterior! 1. Ceramic Microspheres and 100% Acrylic latex provide an exceptionally durable finish. 2. Semi-Elastomeric acrylic latex resists cracking and peeling. 3. “Easy Flow” modifiers result in excellent flow and leveling. 4. Low Temperature Application allows you to apply when air temperature is above 2°C. 5. Micro particle polymer technology delivers excellent adhesion and stops the penetration of dirt & water.