Douglas magazine December 2014 - January 2015 by Page One Publishing

Global trends impact local businesses

How Do

couples survive

Dec/Jan 2015

inspiring picks for workplace he alth and fitness

in Business? Think Big

Ho Kim, CEO of Camacc, on attitude, gratitude and expansion

The Modern

Gold Rush PM41295544

Medical Marijuana Industry Blossoms on the Island

BMW Victoria

bmwvictoria.ca

The Ultimate Driving Experience®

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The BMW 4 Series Coupé outperforms the competition aesthetically and on the track. Its sleek and athletic exterior commands the eye, while its 335hp engine accelerates from 0 to 100 km/h in an incredible 4.8 seconds.1 The BMW 4 Series Coupé also features Air Curtain technology; its intakes channel air around the front wheels and then out through the Air Breather side vents, reducing drag and fuel consumption. And with the lowest centre of gravity of any current BMW model, it truly is the perfect balance of stunning design and dynamic performance.

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European models shown for illustration purposes only. [1]Performance figures tested with optional M Performance exhaust and M Performance Power Kit on 435i xDrive with 8-speed Sport Automatic Transmission. *From pricing of $47,095 applies the 2014 BMW 4 Series 428i Coupé without xDrive, includes national MSRP ($44,900) and Freight/PDI ($2,195). DOC ($395), air-conditioning levy of $100, PPSA up to $45.48 where applicable, $25.00 fee covering EHF tires, vehicle licence, insurance, registration ($495) and applicable taxes are extra. Dealer may sell for less. ©2014 BMW Canada Inc. “BMW”, the BMW logo, BMW model designations and all other BMW related marks, images and symbols are the exclusive properties and/or trademarks of BMW AG, used under licence. Please visit BMW Victoria for full terms and conditions. DL10135. #31009

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28 The Modern Gold Rush

The medical marijuana industry has hit Canada’s mainstream — and Vancouver Island is preparing to get its Newsvine share of the market. By Keith Norbury

34 How Do Couples Yahoo

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26 MONEY How to avoid the audit

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18 Digital Life The rewards and risks of digital currency

4 Douglas

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From the Editor

BC Ferries in No-Win Scenario

During the past month, I’ve found myself in many conversations about BC Ferries. Most of the people I’ve talked to seem to think it’s caught between the devil and the deep blue sea — or between a government that will neither accept responsibility for it nor cut it loose, and a public that is feeling squeezed to the breaking point by fare increases and service cuts. The situation was never quite as ridiculous as it was in early November when Transportation Minister Todd Stone announced the government would consider BC Ferries proposed plan to close the Departure Bay terminal, eliminate service between Nanaimo and Horseshoe Bay and route that traffic through Tsawwassen. One day later, apparently in response to the public outcry, Stone called the scheme off. Then, even before public relief could fully set in, BC Ferries CEO Mike Corrigan said removing that option might mean fares need to increase. His notion was shot down a couple of days later by Premier Christy Clark who said, “Our number one focus is to make sure we preserve as low a fare environment as we can, to make sure that we don’t let the fares go up any more.” Confused? Join the crowd. Unless I’m mistaken, it appears that BC Ferries can’t cut services, can’t close terminals, can’t raise fares but it still has to cut operating costs, revamp the Horseshoe Bay terminal to the tune of $200 million and build ships for the future. That sounds like a dream job for a CEO, doesn’t it? The entire situation would be hilarious if the consequences weren’t so serious for the people who live on the Island and do business here. Either there’s incompetence at play here or perhaps, as some people have suggested, a kind of bait and switch approach to politics where you propose the worst-case scenario then pull back due to “public input” and say, “Well, if you don’t like that proposal, we have no choice but to raise fares.” It’s a false choice, of course, and it’s time we begin seriously looking at other options. Since the BC government demonstrates little inclination to let BC Ferries run as the independent commercial organization it was set up to be 12 years ago, it should follow the recommendation set forth in a Union of B.C. Municipalities 2014 policy paper and “take action to recognize the coastal ferry system as an extension of the highway system and administer and fund it accordingly.” This suggestion is by no means a new one. It has been suggested many times over the years by the B.C. Chamber of Commerce and a number of coastal and Island chambers as well. What the government should not continue to do is to keep asking Corrigan and crew to make the tough cost-cutting decisions, only to sail in themselves one day later on a politically expedient wave and “rescue” British Columbians from BC Ferries’ unpopular proposals. The current devil and deep blue sea model is unsustainable, economically and politically. It’s time to free BC Ferries from political purgatory, and make it part of the provincial highways system, with fares treated much like tolls and the responsibility for the organization shared throughout the province. B.C.’s coastal region is not an annex; it’s a valuable part of the province that deserves a long-term, workable strategy for our ferries. — Kerry Slavens kslavens@douglasmagazine.com

BC Ferries does not seem set up to succeed. Instead, it seems stuck in political purgatory.

6 Douglas

WhaT yOu nEEd TO knOW WhEn SElEcTing a

mObile POint Of sale system Gone are the days when merchants were tethered to their stationary cash registers. Mobile point of sale (mPOS) allows merchants to capture sales using tablets or smartphones, providing the flexibility to take payments anywhere in store or on the go. Merchants using an mPOS system reap the benefits of the traditional point of sale solution, but are also able to increase profits, boost productivity, and reduce costs. The usage of mPOS is growing, the Canadian Payments Association (CPA) estimated the mPOS transactions amounted to 3.4 billion in 2013 and forecasts growth to $19 billion by the end of 2014 in Canada, a 458.82% increase.

What is mPOs? Not only is mPOS flexible, it has the ability to process any form of payment and gain insightful analytics on buying behaviour. mPOS replaces the traditional POS terminal with a tablet or smart phone and Euro, Mastercard, Visa (EMV) reader. The EMV reader has the ability to accept debit, credit and contactless payments.

Top5

cOnSidEraTiOnS fOr chOOSing ThE righT MPOS SOluTiOn fOr yOu

not all mPOS systems are created equal. Selecting an mPOS system can be daunting and the options in technology seem to be limitless.

align With yOur business PrOcesses and gOals The first step to defining your mPOS needs, is to review your business goals. Do you want to simplify your business processes? Choose an mPOS system that is integrated with your payment processing solution. Using an integrated mPOS payments solution will allow you to easily reconcile purchases and inventory, making reporting hassle free.

minimize risk and liability Of fraud thrOugh chiP and Pin Another consideration when selecting an mPOS system is to reduce the risk of fraud by accepting chip and PIN debit and credit cards. Traditional magnetic-stripe card readers are not capable of processing chip and PIN cards, which puts the merchant at risk for processing fraudulent payments. Payment service providers like Beanstream, a Digital River Company, have come out with new technology that allows merchants

to process chip and PIN transactions without the reliance of non-portable debit and credit card payment processors. Merchants with the ability to capture sales from debit and credit cards are able to broaden their client base and increase revenue.

ensure secure PrOcessing thrOugh tOkenizatiOn Security is another big player in the mPOS decision. It is important to feel comfortable that confidential information is encrypted and securely sent over a wireless network for authentication and authorization. It is important to know the mPOS providerâ&#x20AC;&#x2122;s level of Payment Card Industry (PCI) security compliance. Choosing a provider with a PCI Level 1 compliance with Point-to-Point encryption guarantees the payments being processed are in a secure processing environment through the use of tokenization, which encrypts every piece of confidential data your customer supplies.

To learn more about mPOS or discover how the Beanstreamâ&#x20AC;&#x2122;s EMV mobile point of sale solution, sproutPOS, is right for you:

1-888-472-2072 | Beanstream.com/sprout-pos

extend caPabilities and cOnsumer engagement thrOugh aPP marketPlace A key differentiator between mPOS solutions is the ability to create customer loyalty, manage inventory and reduce customers need to wait in line. This can be done through a robust app marketplace. Best-in-class providers offer an app environment that stimulates customer loyalty through loyalty marketing, gives the ability to check inventory of goods directly from the shop floor, and the flexibility to capture sales anywhere in store to decrease lineups.

realize the Omni-channel PrOmise tO grOW yOur business The ability to provide an omni-channel experience is important to companies that have both an in-store and e-commerce presence. Automatically synchronize customer data, inventory and payment processes to create succinct reporting and analytics to help you grow your business.

Gustavson

See things differently.

www.douglasmagazine.com Volume 9 Number 1

Publishers Lise Gyorkos, Georgina Camilleri Editor-in-chief Kerry Slavens

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(In the Know )

Seaspan’s current involvement with the HMC FELEX program to modernize five of Canada’s West Coast navy frigates could result in foreign ships — and money — coming into the local shipyard. According to Malcolm Barker, Seaspan’s vice president and general manager of Victoria Shipyards, the government of New Zealand was closely tracking Lockheed Martin and Seaspan’s mid-life modernization of Canada’s frigates at the Esquimalt Graving Dock. Currently, as part of a contract through Lockheed Martin for the upgrade of the Royal New Zealand Navy’s two ANZAC-class frigates, Seaspan has contracts to do the design and to take the New Zealand specifications and Canadianize them. “Once we finalize all that work and come up with a fixed and fine price with New Zealand, we’ll be in position to sign the contract with Lockheed Martin to execute the work,” Barker says. “We expect that to happen in May or June of 2015.” While the final numbers aren’t available, Barker expects the contract to be in the “tens of millions of dollars.” He estimates that there are 40 of these MEKO-class ships around the world with other navies. “I’m sure they’re watching attentively about how this [New Zealand] project actually comes to fruition,’ he says. “That’s the opening. That’s where we want to be. Hopefully there will be a big economic benefit, not just to the shipyard, but to Victoria.”

“It’s an extremely big deal. The real issue is for any foreign country to actually bring their fighting ships to Canada and trust them with Canadian industry. It’s a show of faith in Canadian industry that this can be done.” - Malcolm Barker, Seaspan’s vice president and general manager of Victoria Shipyards.

Douglas 9

Jeffrey Bosdet/douglas Magazine

Ship to shore

The HMCS Ottawa, a Royal Canadian Navy Halifax-class frigate, at the Esquimalt Graving Dock.

Why Victoria is Looking to asia

TRADE Asia, particularly China, is on the radar for Victoria firms that are exporting their products and services, according to a recent survey undertaken by the Greater Victoria Development Agency (GVDA). “The U.S. and Europe remain at the top of the list for export markets by Victoria firms, but Asia is quickly catching up as the go-to marketplace,” says Dallas Gislason, economic development officer at the GVDA. “Japan, Singapore and Korea, along with China, all made the list of export destinations firms want to explore. The survey also identified Australia, which is fast being recognized as part of the Asia region, as a priority market in the near future.”

Royal Roads University

Consider this: China is B.C.’s second-largest export market, worth an estimated $6.6 billion in 2013. That’s just one of the facts from the Pacific Northwest Gateway to Asia conference, held by the Canadian International Council’s Victoria branch, which explored the region’s relationship with Asia. This conference, along with recent trade missions to China, Japan and India, highlights the importance of these growing foreign economies to Victoria.

Tourism

EDUCATION

The 2014 year-to-date data from Destination BC shows overnight custom entries to B.C. from Asia have grown 11.7 per cent over 2013, with China entries growing 29.7 per cent alone. Tourism Victoria and partner businesses recently participated in the largest sales mission to date to China. “As a result, Tourism Victoria was able to secure more than 80 new business lead opportunities that will be shared with our members,” says Rob Ringma, director of sales at Tourism Victoria. “There is growing appetite by the Chinese traveller to experience our clean air, wild beauty and safe, urban city.”



India represents the fastest growing student recruitment market for B.C., with a 188 per cent increase in the number of students studying here over three years. During the B.C. government’s recent India Trade Mission, Royal Roads President and Vice-chancellor Allan Cahoon reaffirmed the university’s relationship with Chandigarh University, a progressive South Asian school. “Our internationalization strategy,” says Cahoon, “takes into account the importance of building these strong relationships, not only from an educational perspective, but also for the economic benefit they create locally.”

IT Solutions to Expand Your Potential The right IT approach is critical to the success of your business. An effective strategy can ensure your business stays on track by improving employee productivity, enhancing customer service and supporting informed decision making. That’s where MNP’s Elizabeth Vannan can help. Backed by more than 15 years of experience in both the public and private sectors, Elizabeth can help you use technology to solve business challenges, enhance customer engagement and grow your business. Contact Elizabeth Vannan, Senior Manager, IT Consulting Services at 778.265.8893 or elizabeth.vannan@mnp.ca

10 Douglas

jeffery bosdet/douglasmagazine

PAGE ONE PUBLISHING’S milestone year At Page One Publishing, there’s no such thing as resting on one’s laurels, says Lise Gyorkos, co-owner of the local, independent publishing company that brings you Douglas, YAM and Salt magazines. “We’ve had an outstanding year in terms of the growth of our magazine brands.” With that in mind, Page One has launched three new websites this year — yammagazine.com, saltmagazine.com and pageonepublishing.ca — and the company recently moved into a renovated heritage building that “just says creativity,” says Gyorkos. “We’re an idea company so we wanted to reflect that creative culture in our workspace.” Look for more exciting news in 2015, including the revamp of the Douglas website and an announcement about the popular “10 to Watch Awards,” Page One’s signature event that showcases new businesses. Page One Publishing’s owners Lise Gyorkos and Georgina Camilleri outside their new offices in the heritage building at 580 Ardersier Road.

CHEK’s Big bid

New Book Explores the Little TV Station That Could In 2009, Canwest Global announced plans to shut down CHEK TV, a station with a 53-year history. The move spurred CHEK employees to ante up their savings, woo investors, lobby politicians and the CRTC — and make a gutsy bid to buy their muchloved station and turn it into North America’s first employee-owned TV station. The story of CHEK’s near-demise and rise is captured in CHEK Republic: A Revolution in Local Television, a new book by Victoria journalist Diane Dakers, who describes it as a “David and Goliath story” of employees struggling to keep their station from

being crushed in the iron fist of a giant corporation. The book, which evolved out of Dakers’ 2012 Carleton University grad thesis was published this fall by Heritage House. Dakers, who previously worked part-time for CHEK, says not only did the station give her candid access, so did Leonard Asper, former CanWest Global president and CEO, who shared internal emails detailing what unfolded at the time. Since then, CHEK has experienced ups and downs, including a damaging CRTC decision to cut the local television improvement fund. “It was one thing for the employees

to buy the station; it was another for reality to set in that they would have to run it. They went from being part of a national network to being a small business,” says Dakers. Asked about the future of CHEK, Dakers says, “If you had asked me a year ago, I’d have said I don’t know. They went through tough times, but my feeling and their feeling is very optimistic right now. I think CHEK will survive.”

Your people are unique - your office should be, too Interior Showroom 3335 Oak Street, Victoria

www.monk.ca 250-475-3370

Douglas 11

Nature Goes High Tech

Advising individuals and businesses on Canadian citizenship and immigration.

After more than two years in the planning, Hillside Centre’s OceanWall is the first of its kind in Canada. The massive 12-foot by 7-foot series of screens features countless hours of underwater footage, enabling viewers to experience the wonders of the Pacific Ocean.

740—1070 Douglas St. Victoria, BC V8W 2C4 Canada

250.590.2951

Robert S. Sheffman Law Corporation

immigrationlawbc.com C A N A D I A N I M M I G R AT I O N L AW

One thing is certain in the financial wOrld. The Chartered Financial Analyst® designation is a trusted mark of integrity in today’s ever-changing financial world. With its rigorous focus on investment knowledge, analytical skill, and ethical conduct, no credential is more highly regarded in the financial industry.

As a five-year partnership between Hillside Centre and WildVision Edutainment, the OceanWall is the brainchild of marine activist Christopher Porter, formerly the head whale trainer at the Vancouver Aquarium and founder of WildVision. Much of the interactive and flick technology for the OceanWall is supplied by iBoard, a Victoria-based business that specializes in screen technology, mainly for classrooms. Local organizations and Go Pro users will be able to submit video footage of their ocean experiences, which will then be shared via the OceanWall. Current partners include Ocean Networks Canada, University of Victoria, BC Ferries, Centre of Whale Research, Underwater Encounters and Eagle Wing Tours.

SAVE THE DATE  On Dec. 16, the Greater Victoria Chamber of Commerce will host a 2015 Business Awards Nomination Information Session.

BUSINESS FAST TRACK

Jo-Ann Loro/Douglas Magazine

rsheffman@immigrationlawbc.com

To learn more about the CFA® designation and CFA Society Victoria, visit www.cfasociety.org/victoria

12 Douglas

Victoria’s airport now has a dedicated NEXUS lane, allowing NEXUS cardholders to be fast tracked through security during peak hours.

the big idea The Challenge: To rethink the hiring process so job applicants are not just pushing resumés out to any company but are actually focusing on demonstrating their value to companies they really want to work with. How it Began: Riipen was founded by Gustavson School of Business students Dave Savory, Dylan Chernick and Dana Stephenson who were faced with a grad paradox: “You can’t get a job without experience, but you can’t get experience without a job.” They created Riipen, an online platform to match students seeking experience with employers who had real-world short-term projects that would benefit from the innovation of young minds. How it Evolved: The three presented the idea to Richard Tuck, a Gustavson PhD student, now a professor of entrepreneurship and finance. From his previous experience in HR, Tuck had developed a loathing

Richard Tuck, Dylan Chernick and Dave Savory of Riipen.com are ready to make their pitch to Silicon Valley investors in the coming months.

for the hundreds of useless, non-targeted resumés his firm received for every job posting. “It wasn’t like these people wanted to work for our company,” he says. “They just wanted to work for ‘a’ company.”

The Aha Moment: When Tuck heard about Riipen, he saw a better future for hiring. “By using Riipen,” says Tuck, now the company’s CEO, “employers are able to tap into a pool of potential employees without having to go through a traditional hiring process to weed out lackluster candidates.”

The Next Step: Riipen.com has registered 1,000 students and 101 companies in Victoria and Vancouver.

Their next step is monetization. Their team is following in the footsteps of local firm SendWithUs by temporarily setting up shop in Silicon Valley in search of investment. They are also expanding their model to include branded solutions for schools and organizations who want their own Riipen portals.

The Plea: As for Tuck, he’s on a mission. “What I want people to stop doing is accepting bullshit resumés. The right hiring fit can’t be found in a resumé. We want to take it much deeper than that and create meaningful relationships that result in opportunities for employers and students.”

Douglas 13

Innovation | Design | Business | Style | People

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CEO News

1. Curtis Grad has accepted a contract position to formally launch Skwin’ang’eth Se’las Development Tourism Company (SSD Co.), a federal not-for-profit corporation created to promote economic development opportunities for the Esquimalt Nation and Songhees Nation communities. Grad is former president and CEO of Greater Victoria Harbour Authority (GVHA). He will work on a part-time basis with SSD Co. to set up offices at Fort Tectoria, assess marketing potential, and develop the strategic direction with the SSD Co. board. Rick Crosby takes over from Curtis Grad to become the GVHA’s interim CEO and will serve at the helm of GVHA for the duration of the executive recruitment process for a permanent CEO. Crosby was formerly the chief executive and operating officer of the Provincial Capital Commission (PCC), a role he retired from in May.

IF YOU ARE LOOKING FOR FROU FROU INTERIOR DESIGNERS, THAT’S NOT US. WWW.WESTERNINTERIORDESIGNGROUP.CA ann@westerninteriordesigngroup.ca 250.475.3666

14 Douglas

VIATeC CEO Dan Gunn has been named advisor to the Startup Canada Communities program, a national program that brings together entrepreneurial community builders and local enterprise hubs to provide them with resources to build their communities into ecosystems to grow successful companies.

On the Move 2. Shawn Wysiecki is the new branch manager for BMO Bank of Montreal’s Westshore branch. He was a Colwood city councillor from 2008 to 2011. brandon Williams has founded Wildfire Marketing, a new

Victoria-based marketing firm. Williams was formerly with Abstract Developments and, prior to that, oversaw marketing campaigns for WildPlay Element Parks. Martyn Ward, industrial technical advisor for the National Research Council — Industrial Research Program (IRAP), retires in December after 16 years of helping Victoria technology companies to develop the new technologies they need to drive innovation and growth. Doug Taylor has been named as the Vancouver Island representative for the Canadian Manufacturers and Exporters Association of B.C. Bethany Wilson is Eclipse Creative’s new director, strategic services. Wilson is the former director of marketing and sales at the Victoria Symphony, a position she held for five years. She has managed signature events, including Jingle Mingle, for the BC Cancer Foundation. 3. Lee Anne Davies has been hired as the new director of community investment for the United Way. She is the owner of Agenomics, which raises awareness about aging, wealth and health. James Darnell, MLA, BCSLA, has launched JD Land + Home Design. With 13 years of experience in architecture and landscape firms, Darnell will offer residential, commercial and public design services to clients.

On the Board Gord Macatee has been appointed chair of the Victoria Hospitals Foundation board. He succeeds

architect Alan Lowe, former mayor of Victoria. Macatee is the BC Ferry Commissioner and a former B.C. minister of health. Also appointed to the board are Cathy Whitehead McInyre as vice-chair; Angus Izard as returning treasurer; and John Madden as secretary. Three members have been appointed to the International Advisory Board of the Gustavson School of Business at UVic. They are: 4. Patrick Kelly, a member of the Le’qa:mel First Nation (Sto:lo Nation), who operates a consulting business and mentors Gustavson students; Christian Kittleson, B.C.’s assistant deputy minister of business transformation; and Elizabeth Dutton, VP of digital for Black Press and president of UsedEverywhere.com. 5. Norma Cameron is the Children’s Health Foundation’s new director of development. In 2006, she formed The Narrative Company to help organizations use their stories in strategic ways to raise funds and awareness. Catherine Schissel has joined the foundation as director of community investment. She comes to the foundation from the United Way of Greater Victoria. The 2015 Greater Victoria Chamber of Commerce board executive is: Frank Bourree, chair, Chemistry Consulting; Al Hasham, vice-chair, Maximum Express, Courier, Freight & Logistics and Max Furniture; John Wilson, secretary, Wilson’s Transportation; Sang-Kiet Ly, treasurer, KPMG MSLP; Dan Dagg, member at large, Hot House Marketing; Mark Mawhinney, member at large, Strathcona Investments.

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Douglas 15

Mental Health Mental health problems and illnesses are rated as one of the top three drivers of both short- and long-term disability claims by more than of Canadian employers.

80%

Mental health problems and illnesses account for more than

$6 billion

Take three 

Let’s Get Physical Health research shows that sitting for extended periods increases the risk of heart disease, diabetes, cancer and depression. No wonder a new study has labelled sitting as the “new smoking.” So shake up your sedentary work place with these action-inspiring picks.

in lost productivity costs due to absenteeism and presenteeism. — Statistics Canada

Motivating Movement fuel for thought While it might be a stretch to call it the 100-mile snacking diet, proponents of eating local will be happy to know Victoria companies produce a wealth of healthy snacking options. They include:  The Island Nut Roastery, which roasts more than 30 specialty nut and nut-based products —including Island grown filberts.

Lifespan TR5000-DT5 Treadmill Desk (Aloyd Fitness, $2,299) Scientists recently discovered that exercise causes your muscles to release beneficial chemicals that block the harmful chemicals your body releases in response to frequent stress. Given the percentage of workers who describe their workdays as “stressful,” a treadmill desk might be the perfect solution. Alternately, take your meetings out of the boardroom and do a loop around the neighbourhood.

 The brand new Jusu Bar is an organic juice bar with multiple locations opening around Victoria.

JARGON Sweat-working: holding a meeting or networking while exercising

Wellness in the Workplace 16 Douglas

getting personal Rethink the corporate consultant. Trainers, like those at Core Personal Fitness, can use lunch and learns, group workouts and health evaluations to boost your corporate wellness. corepersonalfitness.ca

Serenity Now Workplace stress accounts for a significant percentage of absenteeism and illness. Using relaxation and meditations app such as Serenity, can help you quiet your mind and better handle stress. Serenity app: taptaptap.com/serenity/

Performance Tracking FitBit Flex (fitbit.com/ca, $100) Many organizations have already added high-tech gadgetry to their employee wellness programs â&#x20AC;&#x201D; and the corporate use of fitness trackers, mobile apps and Web-based dashboards is expected to skyrocket. Tools like the Fitbit allow workers to count calories and steps, monitor their sleep patterns, compete against colleagues and earn prizes.

finding balance

Zenergy Ball Chair (Monk Office Supply, $306) If working on your accounting spreadsheets on a treadmill seems a little extreme, try active sitting. Designed with an exercise ball covered in mesh, the Zenergy chair encourages movement while you sit and supports better posture and balance. It also comes with a pump to inflate the ball to your desired comfort level.

Light Therapy Combat seasonal depression with a SAD lamp. Light therapy mimics natural outdoor light and can change brain chemicals linked to mood. day-lights.com/product/ index.html

No Membership Required The benefits of resistance training go beyond strengthening and toning. Keep an adjustable set of weights at your desk and do some reps between meetings.

Douglas 17

digital life by david Alexander receive Address

Record transactions

Your “wallet” is something like an email address — a unique string of letters and numbers that act as your bitcoin address but isn’t tied to your name or any other personal data. Use this address with anyone who needs to pay you on the Bitcoin network.

To authenticate transactions, the bitcoin network records them in the “block chain,” a shared public ledger that preserves the integrity of the currency.

purchase funds set up Wallet

Using your computer or mobile phone, download a bitcoin “wallet.” This will give you the basic facilities to send, receive and store bitcoins.

To add funds to your wallet, buy bitcoins with a standard offline currency — either from another user or through a dedicated bitcoin exchange.

The Rewards and Risks of Digital Currency It’s a brave new world when it comes to money. A few years ago the idea of using digital currency — a type of currency that is electronically created and stored — to pay for something as mundane as a sandwich would have been laughed at. Times have changed.

18 Douglas

send payments

Use your wallet to send payments to other bitcoin addresses. The smallest unit possible ( a 100,000,000th of a bitcoin) is called a Satoshi after the currency’s inventor.

How to use

oday you can purchase just about anything with an ever-growing list of digital currencies. In Victoria, you can grab a bite to eat at Cabin 12, buy a shirt at Hemp and Company or even support the SPCA using bitcoins, one of the most popular digital currencies. Bitcoin now has a handful of ATMs across Canada, including in Victoria and Nanaimo. Just like paper money, digital currencies can be used to purchase goods or services, but unlike paper money there is nothing tangible — it’s all transferred electronically. To create digital currency, individuals or groups called miners solve a problem or complete a task online and then receive funds in return. These miners can trade their digital currencies for another form of currency or use them to make a purchase, putting the coins in circulation. There are no central banks or financial regulators, but it isn’t necessarily the wild, wild west — there is security in place to ensure transactions go through. For businesses, there are a host of positives in accepting digital currency, which is why digital currencies are becoming more mainstream. All, however, is not rosy. These are early days

and there are enough risks — including some pretty big ones — to leave businesses cautious about adopting digital currency.

The Rewards Transaction Fees: With digital currencies, transaction fees are entirely optional — you might opt for zero fees and wait a bit longer for processing, or pay a higher premium for quicker transactions. The market is all over the place so you do have options. This is in sharp contrast to the traditional fees businesses are forced pay for debit and creditcard processing. Worldwide Markets: Traditionally, shifting money overseas can take a while — upwards of five days — and be costly. Bitcoin does it much quicker, costs far less and you can track the movement of funds throughout every single process. And markets are quickly opening up across the world: in India and Africa where banks don’t have a sterling reputation and it’s less secure to carry cash, digital currency is becoming popular. Minimal Fraud: Once you move money in bitcoin or any of the other digital currencies, that transaction is irreversible. Fraud is almost impossible.

Simple Setup: There are a host of bitcoin payment processors and most of them are deadeasy to set up. They can be accessed via a tablet or a smartphone app, negating the need for a Point of Sale (POS) system and pricey hardware. The big online commerce sites like Shopify have bitcoin integration as part of their service. You just need to sign up.

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The Risks Volatility: Among the big risks is volatility — after all, we’re talking an entirely decentralized set of currencies here. They are not guaranteed Digital by a bank or tied to Currency’s a standard currency, Big Three and they can and have fluctuated wildly. However, many payment exchanges will instantly, upon payment, convert Bitcoin to the currency of your The best known of choice to minimize that the bunch, bitcoin was created in 2009 volatility. Security: Earlier this year, Mt. Gox, one of the biggest bitcoin exchanges, handling 70 per cent of all transactions, went bust. They said they lost 750,000 bitcoins, stolen from their vault. If your credit card is stolen, your bank may cover losses, and if you lose cash, the cops may be able to find it. However, with digital currency, if someone hacks into your system or you lose your coins, this is not covered by deposit insurance. Once they’re gone, they’re gone.

Leaping the Digital Divide Worried about whether your customers are ready for this? Well, they are already used to moving their money around, paying bills online and making purchases via debit and credit cards — so it isn’t a difficult jump to a digital currency that exists only in electronic form. And really, when was the last time you had actual money in your wallet? ■

to put power back into the hands of the people. There are currently 12-millionplus bitcoins in circulation (the cap is 21 million), and due to their scarcity they are valued high.

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Dogecoin

This is a recent player, created in December 2013. Because there are a lot of dogecoins in circulation — a whopping 65 billion — they are valued low. They are named after a Shiba Inu dog named Doge, a bit of an Internet phenomenon.

Litecoin

Launched in 2011, litecoin is nearly identical to bitcoin but uses an opensource design. Litecoin will total 84 million coins.

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sales and Marketing by mike wicks

The Market Goes Boom(er) While so many marketers focus on Gen Y and the Millenials, a massive opportunity might be slipping by to engage with the single largest generational group in history. Remember the baby boomers?

’m a baby boomer so it puzzles me to see how much of the marketing “spend” goes to wooing the young, the vibrant, the sexy and the cool. Look around. Gen X and Y (the millenials) are ubiquitous in advertising. This fascination for targeting a younger consumer market to the exclusion of people in the 49 to 68 boomer segment blows me away, especially as boomers are known to be self-indulgent, eternally optimistic, defiant of aging and in love with media. (Remember we were the first to experience television.) Things, however, are changing. Many global brands have even started using boomer models to promote their products.

70%

Boomers will soon hold

of America’s disposable income and be responsible for buying

almost 50%

of consumer packaged goods. — Nielsen

61%

of baby boomers said that brands were important in their purchasing decisions for groceries, compared to

only 47% for millennials. — alixpartners.com

Let me give you some examples. Seventy-five million people have viewed the YouTube video of actor Jean-Claude Van Damme doing the splits between two moving Volvo trucks — a stunt, incidentally, he did himself in one take. Here we have a 53-year-old boomer dramatically demonstrating the precision of Volvo’s dynamic steering. Here's another: The iconic luxury brand Louis Vuitton is working with another iconic brand, David Bowie, to produce the second TV spot ever aired in the company’s 160-year history. The ad, an installment in Louis Vuitton’s “L’Invitation au Voyage” series, will feature the Thin White Duke in an as-yet-undefined role. Given Bowie’s sense of style and visual storytelling, you can be sure the ad will be memorable — a smart musical pairing that positions the brand as a classic, upscale choice for the affluent Baby Boomer generation.

Boomers in a New Light When given the option to retire earlier but give up current lifestyle and live more modestly, only

25% of boomers would

take that offer.

said they would 57and%rather work longer live better. — CIBC survey

70% of boomers have a Facebook account

40% Actively use it — Statistica Inc.

20 Douglas

So why aren’t more companies marketing to boomers? Perhaps it’s because the marketing industry has traditionally focused on consumers until they reach the magic age of 49 and then ignored them in favour of the next "crop" of potential customers. Or perhaps the advertising and marketing industry is inhabited by millennials who see boomers as a dying breed. Boomers, however, represent the fastest-growing age group in Canada. In 2011, there were 9.6 million boomers in Canada (StatsCan) and a staggering 77 million in the U.S. (U.S. Census Bureau). By any standards, that’s a market too large to ignore — and their spending power is hard to ignore too. The other fallacy is boomers are not big spenders. In the U.S., studies carried out by Nielsen Marketing show boomers will soon hold 70 per cent of the country’s disposable income and be responsible for buying almost 50 per cent of consumer packaged goods. Those statistics are almost certainly mirrored here in Canada. Over the next 24 years, a whole lot of boomers will be in their prime earning (and spending) years prior to retirement, but don’t expect them to retire in the droves previously anticipated. The economic downturn hit many of them hard, forcing them to remain in the workforce longer than their parents did. For many, this will be a blessing as they are not ready to retire, especially now that “65 is the new 55.” This postponement in switching to a fixed-income lifestyle means boomers will continue to be active consumers for the foreseeable future. Not only that, they will be earning at a higher level than younger

people, making them a very attractive consumer group for marketers.

Beyond the Stereotypes So what do you need to know about this valuable sector if you are going to market to it? First, you’ll find most boomers are fitter, healthier and more optimistic than their parents were at the same age. One of the keys is to see them as they see themselves. “Treat me as old and I’ll shun your product,” could be their mantra. If you’re going to feature boomers in your advertising, you’d better be thinking more Pierce Brosnan than Ernest Borgnine because we are not of the same mindset as our parents. We’ll fight aging until our last breath! Boomers are constantly reinventing themselves and how they live; they always have been. They continually look for ways to stay young and experience life at its fullest. Think about people you know in this age group. How many are starting a business, buying a new home, doing volunteer work in a Third World country or going wilderness trekking? When you are marketing to them, treat them as adventurers: active, not sedentary. The point is, they have plans. They are looking for new experiences, hobbies and interests, which makes them winnable as customers. Let’s also put to rest the myth that boomers are not tech savvy, don’t buy online or don’t engage with social media. According to Statista Inc., 70 per cent of boomers have a Facebook account and 40 per cent actively use it. More than three million boomers purchased products online last year and, according to StatsCan, “As Internet-literate baby boomers are about to enter their later years, they represent an important market for new products and platforms, which may be designed to meet their needs.” Another myth is that boomers stick to the brands they’ve always used. I, for one, don’t use Old Spice or wear Levis anymore. I shop in the same stores as my late-20s children and often wear the same brands as they do. We have the same iPhones, the same apps and we text and FaceTime each other almost daily. This leads me to an interesting fact: boomers buy 40 per cent of Apple products.

When getting there matters.

INVESTING IN THE WELL-BEING OF FAMILIES Whether it’s helping people on the street find housing, providing job training or creating financial security, United Way funded programs offer opportunities for people to make better lives for themselves. Unite to Change and build pathways out of poverty for individuals and their families.

The Opportunity Generation So boomers are a massive and under-targeted market — an incredibly valuable market to go after. They offer an amazing opportunity, especially if your competitors are ignoring them in favour of a younger audience. And this market is made up of people who are living longer and longer. In 2013, there were just 7,000 people in Canada 100-years or older. In its latest report, Stats Canada predicts this number will grow to 63,000 by 2063. Now, there’s a market with longevity. ■

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Douglas 21

entrepreneurship by Peter elkins

The Scorecard Method — also called the Bill Payne Method for the angel investor who invented it — is a method of valuing pre-revenue companies, comparing them to other businesses in the same business sector or region.

What’s Your Startup Really Worth?

zero to

30%

What potential investors see when they consider your startup for investment might not reflect your entrepreneurial high hopes. Here’s how they really assign a value to your fledgling company.

o many startup entrepreneurs, often spurred on by out-of-date education or bad advice, tend to overvalue the worth of their companies and ask for the moon from investors. And then they wonder why their requests for investment are turned down. I spend much of my time meeting with entrepreneurs. Our conversation usually starts off with “I want a lot of money for very little of my idea or company.” At this point, I ask myself a very simple question: “Is this person worth investing time into — and are they able to absorb an accelerated education?” In some cases, the answer is yes. However, much of the time I (and most other investors) will try to discourage them from looking for investment until they have better educated themselves and allowed us to help with the learning process, just as someone helped us. I say this because we often hear about entrepreneurs who regret having received investment early on. Over-inflating valuations doesn’t help anyone — sometimes it means they can’t raise money again because they can’t justify their past valuation. Seeking investment is often a trade-off between what you want and what you are 22 Douglas

zero to

25%

zero to

Other Factors (such as Quality of Plan) Strength of Management Team

zero to

Need for Future Funding

zero to

Marketing/ Sales/ Partnerships

10%

The Scorecard Method

Competitive Environment

zero to

10%

Size of Opportunity

zero to

15%

willing to give up. For example, the other day someone mentioned talking to an entrepreneur who wanted "venture capital without giving up any equity.” I sure hope they were kidding!

Assigning a Value So, what is your company's worth? This is a critical dollar value to understand when you’re seeking investment, not only in terms of the investment itself, but also in showing investors just how much business acumen you have. Before you start adding up your personal investment, sweat equity, brand and goodwill, or trying to figure out what you need to retire on, let’s look at some methods investors typically use to create fair valuations. There are pros and cons to every method, so it’s part art and part science. Stephanie Andrew of Espresso Capital Partners says having robust financial forecasting is a great place to start, as

Product/ Service/ Technology

the valuation is only as reliable as the forecast. Mark Grey-Dreaper, chartered business valuator and founder of XPS Group and M&A advisors, points to three commonly used business valuation approaches: earnings-based, assetbased and market-based. The trouble is, these methods don’t work well with pre-revenue companies, so we have to apply more art than science. For startups, we generally look at: entrepreneur credibility, team experience, board and advisor pedigree, scalability, competitive advantage, quality of executable plan, market opportunity and demand, partnership opportunities, comparable companies, products in the pipeline, regulatory risk and the size of the investment round. There are a number of specific valuation methods that investors may rely on for startups. Two commonly used ones are:

The Risk Factor Summation Method is based on the premise that the greater the number of risk factors, the greater the overall risk. Essentially, this method encourages (some would say forces) investors to think about the kinds of risks a startup must manage in order to achieve a lucrative exit. It focuses on 12 areas to assess for risk factors, including management, sales and marketing, competition and the potential lucrative exit. Each risk is assessed and assigned a value from -2 (very negative) to +2 (very positive for growing the company and executing a lucrative exit). The Scorecard Method compares the startup to other typical investor-funded startups and adjusts the average valuation of recently funded companies in the geographic area to establish a pre-money valuation of the target. Of course, there’s far more to these methods than we have space to discuss here, so I encourage you to look for business and startup valuation education in your community and search online for The Risk Summation Method and The Scorecard Method. Two good websites are nacocanada.com and kauffman.org. Try these methods out on your own business or startup ideas and see what your scores reveal.

The Value of Being Realistic The key for any investor (and hopefully for any entrepreneur seeking investment) is to avoid an unrealistic valuation for pre-revenue startups as it may trigger a down-round later on. A down-round is a round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the company by earlier investors resulting in dilution of ownership for existing investors. There is a saying: “The value of a business is only what someone is willing to pay for it.” In other words, your ability to attract investors and negotiate with them is essential, and having a defendable valuation is a good place to begin for any entrepreneur. ■

Why Startups Should Welcome Fair Valuations While valuations can be intimidating, they are important. How many times have you heard entrepreneurs say, “I had everything invested in my business and ended up losing my house”? In my experience, this is usually preventable. When early-stage entrepreneurs understand how valuations work, it can deter them from entering into businesses that aren’t financially sustainable. And that can prevent them from losing their personal net worth when they have to claim bankruptcy or have a fire sale before they even have a fighting chance.

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Douglas 23

In conversation with ho kim President and CEO of Camacc Systems ■ BY Paul Willcocks photo by jeffrey bosdet

Perhaps you’ve never heard of Victoria’s Camacc Systems. But stop to buy gas or shop at a major retailer, and you’re likely under the watchful eyes of one of this company’s video security systems.

he tech company led by CEO Ho Kim has grown in 15 years from a four-person startup to 65 employees and 300 contractors across Canada — and $17 million-plus in revenues. Camacc has also expanded into the U.S. The company, which provides surveillance and access control systems, doesn’t define itself as a security company but as a company that uses technology to get a clear picture of the world to improve safety, security and operational efficiency across sectors. Its ambitious plan is to almost double its revenue by 2017. Camacc’s Saanichton head office is everything you might expect from a tech company. A meeting room with two 80-inch monitors for videoconferences with the company’s six regional offices. A tech-support centre with nine 50-inch monitors displaying 300 live feeds from clients. (“We can identify problems before the client even knows they exist,” says Kim.) Douglas sat down with Kim — recently named Ernst and Young’s Technology Entrepreneur of the Year for the Pacific Region — to learn the secrets of Camacc’s success.

How Camacc went from idea to industry Ho Kim was a 32-year-old hotel manager in 1998 when he got talking with Dennis Law, a friend he’d had since their days at Arbutus Junior High. Law was working in retail surveillance systems — think big, expensive cameras and tape recorders — at his father’s company. “We’d always talked about doing something together,” recalls Kim. “When his dad retired, Dennis approached me and said ‘Ho, this might be a good opportunity.’ [My wife and I] had just had our first child, my wife was pregnant with our second son, and so the timing really wasn’t the greatest. But that’s when you really have to dig deep and say, ‘Hmm, do I go big or do I stay home? We decided to go big.’” In a meeting in Law’s living room, the pair brought in two employees of Law’s and reviewed Kim’s business plan, deciding they could launch if each of the four put up $100,000. “So of course,

24 Douglas

who do we go to? Our parents. My parents had to put a line of credit against their house, basically risking their retirement plan for me. But within two weeks, we quit our jobs, got an office, and we were off and running.”

On landing the big fish Camacc immediately landed London Drugs as a client. Since then, it has won — and kept — a blue-chip list of clients including Esso, Overwaitea, Harry Rosen and Future Shop. “Initially, we supplied the same services and product that all the other security integrators supplied,” says Kim. “In the early 2000s, when the digital recorder came out, we saw that and thought ‘Wow, this is unreal.’” Law saw the potential of using software to manage stored information. Camacc now designs the systems, writes the software, assembles the equipment and installs the entire package. “We’d ask clients, ‘What would really help you and your loss prevention team?’ They’d tell us

and we’d write it for them. The client feels that they have a part in our success. They can look at this feature and say, ‘Wow, they wrote that specifically for me.’” But the key to Camacc’s success is service, says Kim. The tech support department averages 1,000 calls a day, with all but 10 per cent answered immediately. “It doesn’t matter how good your product is if you aren’t able to service that product afterwards. That’s where we really feel we separate ourselves from our competitors.” What the CEO’s job really means The CEO of a small company has to wear every hat, says Kim. “You have to be the CEO, tech support person, service person, installation guy.” But as the company grows, that direct connection naturally diminishes, Kim adds. “When you’re the owners and you start out, your clients know who you are, what you’re about and the culture you believe in, because you’re dealing with them on a oneto-one basis. That changes with more management layers, and it’s up to the CEO to ensure that vision and values remain clear. “A lot of my job is getting out there and letting employees know that they’re part of this team. They’re part of this bigger vision.”

Why work culture matters From the start, Camacc’s philosophy has been “work hard, but work harder at having fun with your family and friends,” Kim says. “Another key philosophy is that we hire for attitude and train for position. I firmly believe you cannot teach somebody to have a good attitude. If they have it, their learning curve is just so much faster.” Camacc’s culture was tested in the 2009 recession, which Kim recalls as “a really bad time.” But a

speech by leadership expert Simon Sinek on keeping company culture vibrant was a turning point. “I came back and said, ‘We’re going to change,’” Kim recalls. “I brought my entire management staff in and we brainstormed ...” As a result, each employee’s company anniversary is recognized with an email from Kim, shared with everyone in the company, triggering a flood of congratulations for the employee. Other examples: the sports-bar-styled coffee room; Kim’s role as fashion model in a catalogue of Camacc apparel, with a portion of sales revenue going to charity. Even the Camacc website has a fresh, slightly irreverent tone that evokes a young startup.

Why the secret is out Camacc wants to increase revenue to $30 million — a 77 per cent jump — by 2017. “It’s only achievable if every single member of the management team does two things,” says Kim. “Recognizes what they’re strong at, but more importantly, recognizes what their weaknesses are, and works on those weaknesses.” On the journey to completeness Kim and his family boat every summer and ski in the winter. “It’s so incredibly important to have that balance between family and work,” he says. And he’s mindful of his own parents’ sacrifices in the years after the family moved to Victoria from South Korea when Kim was a year and a half old. “My parents essentially sacrificed their entire life to pave a better path for ... me and my older brother and sister. I’ve always said, ‘If I can accomplish a quarter of what my parents have been able to accomplish, I’ll just be a complete person as a father, a son, a businessman, a husband and as a friend.’ I’ve still got a long way to go, but I’m getting there.” ■

“We were this secret in Canada for the longest time — our clients knew who we were, but no one else knew who we were,” says Camacc Systems CEO Ho Kim, who plans to double the company’s revenue by 2017, continuing Camacc’s drive to “go big or go home.”

Douglas 25

Top Ten

Money by shannon moneo

e h t d i Avo

Audit Triggers

to Avoid 1 You haven’t filed on time. 2 You've reported losses over consecutive years.

Few things send business owners into a state of panic more than the threat of an audit. But careful planning and knowing which audit triggers to avoid can help you stay off the Canada Revenue Agency’s radar.

f there’s one piece of mail almost everyone dreads receiving, it’s the unexpected brown envelope from the Canada Revenue Agency (CRA). If it’s an audit notice, get prepared for a process where you’re considered guilty until proven innocent. “When clients come in with a CRA letter, they’re in a state of panic,” says James Kungel, CA, and regional tax leader at MNP’s Nanaimo office. “They wonder what they’ve done; they feel picked on.” Before you have a full meltdown, there’s one important distinction to note: The CRA also sends pre-assessments (information requests), where it asks for proof of items that are claimed, like medical expenses, charitable donations or alimony payments. That is not an audit. Since most tax filings are done electronically, receipts aren’t sent. This followup notice is to see the receipts. “Most of the time, they want backup,” says Bill Camden, CA and managing principal at Collins Barrow. As long as submitted receipts are valid, the CRA should be happy. An audit is different. Usually, it’s for a tax return prepared two to three years ago, says Donna Dangerfield, CA, and senior tax manager at KPMG’s Victoria office. “Something triggers the request.” The best response is to respond, pronto. “Don’t ignore them,” Dangerfield recommends. “They won’t go away.”

Why Me? What is red-flagged by the CRA remains, for good reason, a secret, as does how many audits it conducts. “Some audits are random, others, something comes to their attention,” 26 Douglas

Camden says. “… you can’t count on not being audited.” If you’re self-employed or accept cash payments or earn income from commissions, you’re automatically on the CRA’s radar. And if you’ve had previous bad encounters with the CRA, watch out. But if your return and deductions are simple, the chances of an audit diminish. Kungel says one red flag for the CRA would be a significant change in either income or deducted expenses from previous years. According to Dangerfield, the CRA does benchmarking, which examines differences, year-toyear. If you suddenly claim $40,000 in expenses, compared to $20,000 the year before, ka-ching! Or, if your income drops by 30 per cent, be prepared for CRA questions. The CRA does compare what’s reported against the norm for similar businesses — and even what the neighbours are filing. If you’re living in the Uplands and reporting a $30,000 per year income, the CRA may be knocking. The CRA also does “projects,” Camden says, where tax returns from select groups like construction contractors or realtors are eyeballed. And don’t forget enraged ex-spouses or fuming fired employees who call the CRA. One bit of consolation. The CRA doesn’t want to spend time and money doing an audit where the rate of return is low, Camden says. “They have to pick their battles. But the more income you make, the more likely you are to be audited in depth,” he adds.

If you’re selfemployed or accept cash payments or earn income from commissions, you’re automatically on the CRA’s radar.

The Game Plan A good starting point is to share the CRA correspondence with an accountant who can decipher what

3 You have high expense claims relative to your business revenue and compared to the industry standard. 4 Your business looks more like a hobby. (You have to have a reasonable expectation of income.) 5 Your lifestyle doesn’t match your reported income level. 6 You underreported or failed to report income. 7 You’ve made significant charitable donations to nonregistered charities or non-arm’s length parties. 8 You have claimed excessive home office expenses. 9 You claim 100-per-cent business use of a vehicle (and it’s not a taxi or moving van!). 10 You’ve previously been caught being dishonest by the CRA.

they are looking for, Kungel says. If necessary, the CRA will leave no stone, or even a mattress, unturned. When it conducts an audit, it’s done at the business’s premises, or the auditor will borrow company books and records. Willingly hand over the paperwork. “As soon as you start denying information, they’re going to look at everything,” Kungel warns. Which is why the accountants recommend thorough, up-to-date record keeping. “It makes it easier to respond,” Dangerfield says. Deductions need corresponding receipts. If receipts can’t be produced, the deductions don’t qualify. A credit card statement is not adequate. But a shoe box of unmarked receipts means little unless they are carefully described. Was it your spouse or a client you took out for lunch? Was that dry-cleaning really work-related? With home business expenses, claiming more than 10 to 15 per cent could cause problems. And do track the kilometres driven for business, Kungel says. When a business employs a spouse or children, CRA will demand proof of what the family members do at the workplace and if the wages paid are in line with the industry. When it comes to proof of income, a business’s bank statement doesn’t cut it. Auditors will scrutinize all deposit records to trace unreported income, Camden says. If there’s $250,000 in deposits but only $70,000 in reported income, watch out. Still, if you treat CRA auditors with respect, they’re usually reasonable, practical people. First-time honest errors, like claiming something by mistake or not keeping a mileage log, usually mean repayment of the taxes. Dishonest or unsubstantiated returns draw penalties and interest charges. But be on guard. “[The CRA] are looking for people to say things that might trip them up. Don’t tell them, or give them, more than what they’re asking for,” Kungel says.

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Avoiding a Repeat Keep fully itemized receipts and a business travel log for at least the past six years, Dangerfield recommends. Also beneficial are consistent returns, year after year, that mirror income and expenses in your industry. And stay on top of changes to tax law, Dangerfield adds, because rules frequently change. The CRA’s business website is a good starting point. Dangerfield recommends that businesses do a self-review after their tax return is prepared. Ask why expenses changed so much from the previous year or why there have been losses for three consecutive years. If you’ve been audited and the CRA finds “a bunch of stuff,” they’ll be back next year, Kungel says. “But if you’re audited, and found clear, they likely won’t come back.” ■

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The Modern

Gold Rush The Medical Marijuana Industry Blossoms on the Island

Once seen as a secretive crop with a shifty reputation, marijuana — At least of the medical variety — has hit the mainstream on Vancouver Island thanks to massive changes in federal regulations. A number of companies, Island-based and international, are setting up here to tap into this multimillion-dollar industry. By Keith Norbury

to do so under the new Marihuana for Medical Purposes Regulations introduced last year. So far Health Canada has received more than 1,000 applications for production licences, 39 from the Island. At last count countrywide, the agency had approved 22 licences, with 13 active producers listed on the Health Canada website. Aside from Tilray, current and prospective Island producers include Thunderbird Biomedical Inc., Island Harvest Inc., Broken Coast Cannabis Ltd., Wildflower Marijuana Inc., Evergreen Medicinal Supply Inc., and Specialty Medijuana Products Ltd.

Growth Opportunity This modern gold rush began in June 2013 when the federal government’s new rules came into force. The aim was to replace the Marihuana Medical Access Regulations which had been in place since 2001. That program, which allowed individuals to produce medical marijuana in their homes either for their own use or for a designated patient, “was open to serious abuse,” according to Health Canada. While the government is no longer licensing individuals, those licensed as of March 31 have been grandfathered pending the outcome of a court challenge. Tilray

s recently as 2013, Jake Ryan was busting marijuana grow-ops as head of the criminal intelligence unit with the Nanaimo RCMP. Less than a year later, Ryan is overseeing the loading of boxes of legally grown marijuana into a Purolator van at the Duke Point Industrial Park. After 18 years in policing, Ryan now heads up security at Tilray, which is among the first licensed medical marijuana producers in Canada. More than 100 other people are now working at the $20 million facility, which opened this spring. Muscular and tattooed, Ryan admits he looked like a bad guy during his undercover days when he sported shoulder-length hair. When Tilray came to town, his RCMP bosses dispatched him to check it out. “And the reality was I was very impressed with the professionalism of all the people involved with the company,” Ryan says. The work environment also presents a refreshing change from the chaos of policing, where virtually every call would take him to a miserable scene. “But when you work here, everyone is happy to come to work,” Ryan says. “I’m not used to that.” Tilray is just one of several companies that are already legally producing marijuana on Vancouver Island or have filed applications with Health Canada

28 Douglas

Tilray employees prepare medical cannabis for same-day shipping to patients. Tilray has more than 40 medical cannabis strains in cultivation in their 60,000 square foot, $20-million state-of-the-art facility, located in Duke Point.

Douglas 29

Various court decisions — including a 1997 Ontario Court of Appeal ruling that it was unconstitutional to deny a patient access to medical marijuana — forced the federal government to create a legal framework to enable access. In response to a 2003 ruling, the feds even got into growing medical marijuana, but that proved disastrous when patients complained that the weed lacked potency. “The way the medical cannabis program works is obviously it’s driven by the court system,” says Eric Nash, a partner with his wife Wendy Little in Island Harvest Inc. “It’s not something that was voluntarily implemented by the government.”

Island Harvest had been growing certified organic medical marijuana since 2003 under the old program, which restricted each licensed producer to just two clients and each production facility to four licences. When the new rules came in, Island Harvest shut down its modest production and applied to become a commercial grower. The company recently received a “ready to build letter,” which a Health Canada official confirms is a significant milestone. So Nash expects to be able to begin growing by the end of 2014. But other than to say the leased facility

Tilray

Emerging Market Expectations

Tilray CEO Brendan Kennedy and his wife Maria cutting the ribbon at Tilray’s grand opening in Nanaimo in April 2014.

would be a few thousand square feet and somewhere in the Cowichan Valley, he declines to reveal its location, citing security concerns. Tilray, meanwhile operates in plain sight on Nanaimo’s Maughan Road. A sign on the chain-link fence around the 60,000 square foot building even bears the motto, “Exceptional Cannabis Products.” Erasing any doubt about what grows inside, the aroma of marijuana wafts from air vents across the parking lot as a visitor arrives for a tour with Philippe Lucas, Tilray’s vice-president of patient services.

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Trim, spectacled and professorial sounding, Lucas has explored the medicinal properties of marijuana since the mid-1990s when, in his 20s, he learned he had contracted hepatitis C from a tainted blood transfusion when he was 12. Lucas founded the Vancouver Island Compassion Club, which dispensed medical marijuana to patients in what was and still is a legally grey zone in which authorities typically turned a blind eye but also conducted the occasional raid. “I come at this from a patient perspective,

and from my point of view anything that increases options for patients is something that we can celebrate,” says Lucas, a former Victoria city councillor. Now Lucas has joined the emerging world of for-profit commercial medical marijuana production. And he is stoked about it. “There’s really nothing like this facility we’re about to go visit anywhere in North America,” Lucas says. “Not just the level of technology but the level of cleanliness and care being given to the plants.”

Growth Conditions Seattle-based private equity firm Privateer Holdings has so far invested $20 million in getting Tilray off the ground. Privateer cofounders Christian Groh, Brendan Kennedy, and Michael Blue all left successful careers at Silicon Valley Bank after brain-storming what a postmarijuana-prohibition world would like. They chose Canada as their first venture because commercialized medical marijuana had become legal. “One of our charters is [that] we don’t violate any local, state or federal law,” says Groh, Privateer’s chief operating officer. “So we don’t touch it in the U.S.” It took Privateer 18 months to raise an initial $7 million. Since February this year, however, Privateer has raised another $75 million. “We’ll build a second facility and it will be two or three times the size of this one,” Groh says. The first is big enough. Before entering the facility, a visitor puts on a white lab coat and is issued an I.D. card that must be scanned upon entry and exit of each of the secure rooms in the building. Every scan is recorded in electronic logs that Health Canada inspectors have the power to review. Those inspectors also can and do review recordings from the dozens of video cameras scattered in and around the building. At the time of this visit in early September, about two-thirds of the building was either in production or production-ready while construction crews worked on renovating the remaining 20,000 square feet. Already, 20,000 plants were in the various stages of their 12week growth. At full production, those plants will number 40,000, Lucas says. So what’s that worth? Groh wasn’t ready to share those numbers. However, he did reveal that one room of budding plants would likely yield 80 to 100 pounds of dried product. At a sale price of $8 to $13 a gram — do the math — that adds up to around $400,000. When built out, this facility will have 30 production rooms.

No Room for Error Health Canada imposes strict requirements on anyone wishing to get into the business. Those requirements include a bank-style vault for storing the pot, rigorous procedures

for preventing diversion of the product to the black market, and thorough background checks. The latter also involves the designation of responsible persons in charge, or RPICs, who must be present anywhere marijuana is handled. Chief scientific officer Josh Eades, one of those RPICs, worked in the technology transfer office at the University of B.C. before joining Tilray. He also worked previously with Lucas at a business called Compassionate Analytics, which provides kits for measuring levels of tetrahydrocannabinol (THC) and cannabidiol (CBD), two of the main medicinal ingredients of

marijuana. On this day, Eades is supervising half a dozen people in white lab coats, hair nets, and blue nitrile gloves who are dipping clone cuttings into rooting hormones before planting the cuttings in coffee-cup size containers of soil. Among them is Andrea White, who worked in landscaping before joining Tilray in July. “They looked at my experience and also that I was growing it (marijuana) when my grandpa was really sick and in hospital,” White says. As Tilray’s human resources director, Brenda Fearman, points out, this is a workplace where a pot-growing past looks good on a resume. At

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Douglas 31

a job fair in March, she even pressed candidates on their growing techniques. “And they’re going, ‘Really?’ and I said, ‘Yes, I need to know this,’” says Fearman, who previously was an HR director for Great Canadian Gaming Corp.

Bureaucracy Blocks Progress Tilray clearly has a jump on exploiting the lucrative medical marijuana market. That irks Victoria pharmacist Michael Forbes and Sooke businessman Ian Laing, who are partners in Specialty Medijuana Products Ltd., which received zoning approval in September 2014 for a facility in the Sooke Business Park. Forbes, who owns eight pharmacies including five in the Victoria area, questions why Health Canada approved U.S.-financed Tilray while his Canadian-financed venture has been waiting over a year to receive approval of its 600-page application. On the advice of a lawyer, they are going to send letters to the federal ministers of health and agricultural to seek answers to, “Why are we log-jammed when we’ve met all of the criteria given to us?” and, “Why are the Americans red-carpeted through to the finish line?” Forbes says. Asked about that, Health Canada responds that it “processes applications in the order in which they are received.”

Health Canada projects the number of Canadians prescribed medical marijuana will grow from approximately 40,000 in 2013 to 450,000 in 2023.

Forbes says it would have made much more sense for the government to have delegated responsibly for dispensing medical marijuana to the country’s pharmacists. After all, they are already trained in handling controlled medications of all types. “It seems like they’re going about it in a way more complicated way with building bunkers in the middle of nowhere with mail distribution,” Forbes says. Nevertheless, Speciality Medijuana is ready to start renovating a 4,500-square-foot steel

building in the business park — if and when it receives a “ready to build” letter. Laing estimates it’ll cost about $1 million in upgrades. They intend to start small — what Laing compares to a craft brewery — with about 10 employees, estimates Forbes, who says he is getting into the medical marijuana business because he is passionate about helping patients.

Overcoming Hurdles In Victoria, Thunderbird Biomedical Inc. announced on September 30 that it had signed a

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lease agreement for a second medical marijuana facility of up to 43,500 square feet. It had earlier received a licence from Health Canada for a 3,100 square foot facility in suburban Victoria. The company is a subsidiary of T-Bird Pharma Inc., which trades on the TSX Venture Exchange. CEO Robert Gagnon didn’t respond to requests for an interview. However, Kyle Boyko, an associate/partner with Hamza Thindal Capital, a venture capital group, said Thunderbird started in March with $60,000 of private capital, followed by a $3-million injection of public money. Boyko expects production in the original facility, which has five grow rooms, would begin in October. Although he has visited the facility, Boyko couldn’t identify the community where it is situated. Amid pumpkin patches in Central Saanich, on Lochside Drive near Michell’s Farm Market, a chain-link fence encloses a cinder-block building that is home to Evergreen Medicinal Supply Inc. Company CEO Shawn Galbraith didn’t respond to messages. As of September 30, Evergreen wasn’t listed among Health Canada’s licensed producers. But the Evergreen website proclaims, “Our leading edge, Health Canada approved MMPR facility will be opening soon.” Cowichan Valley producer Greenleaf

Medicinals had its licence suspended only about a month after it got started. The company, since renamed as Broken Coast Cannabis Ltd., voluntarily recalled a batch of Purple Kush. Production manager John Moeller says he can’t comment on the nature of the recall, but notes, “It’s not going to make anyone sick — let’s put it that way.” The company, which expects a Health Canada re-inspection in early October, operates out of a 12,000-square-foot facility on the outskirts of Duncan. Moeller asks not to identify the location out of security concerns, although other media have already revealed it. The recall has set the company back about six months and probably cost it some customers, Moeller concedes. “But we feel confident the market is still healthy and that customers are going to want to come back.”

A Big Step Wildflower Marijuana Inc.’s proposal for a facility on 50 hectares of farmland near Nanoose Bay has spawned fierce opposition from neighbours in the nearby River’s Edge subdivision, according to local news reports. “Why wouldn’t I grow on agricultural land? It’s agriculture,” says Wildflower CEO William MacLean, who pledges to address the neighbours’ concerns.

Wildflower is also publicly traded — on the Canadian Securities Exchange, under the symbol SUN. “Our capital investment over the next four to five years is going to be in the ballpark of probably around $40 million to $50 million,” MacLean says. Initially, the plan is to construct a 14,000 square-foot building on the Nanoose farm. Two subsequent phases, depending on demand, would push annual production to 10,000 kilos (22,000 pounds). The company also plans a smaller operation at Yellow Point. Eventually, Wildflower envisions a combined 150,000 square feet of production space at the two facilities with 50 to 60 workers at each one. The company only submitted its 600-pageplus application in August 2014. So MacLean is being patient and sounds generally supportive of the new system, even if the process is tedious. “It’s definitely a big step in the right direction from where it was where people were growing it in the garages and in their basements,” MacLean says. Back at Tilray, ex-cop Jake Ryan would attest to that. “In two years we won’t even be talking about this,” he says. “It will be old news.” And that’s how it generally goes with gold rushes. The excitement is in the anticipation of those first mother lodes. After that, it’s all about the basics of running a good business. ∆

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Douglas 33

How do

Couples Survive in Business?

Douglas talks to five dynamic couples who have succeeded at building top-tier careers and businesses without ever losing sight of their relationships with each other, through good times and challenging times. how do they do it?

by Mike Wicks Photos by Simon Desrochers

here’s something intriguing about couples whose relationships thrive in the rarefied atmosphere of the corporate world — high flyers who effectively balance their business or careers and personal relationships despite long hours, blurred boundaries and sometimes competing interests. To discover how it’s possible for these couples to maintain healthy relationships with each other while living such fast-paced lives, I asked five prominent professional couples to share their success secrets. Notably, four of these couples have been together between 22 and 33 years, despite the pressures of high-profile careers. That’s 34 Douglas

remarkable when one considers the average marriage in Canada lasts approximately 14 years. Being Boundary-Conscious Working in the same company, especially when boundaries are not clear, can cause conflict. Kevin and Shawna Walker, owners of the Oak Bay Beach Hotel, know this well. Throughout their 32-year marriage, they have worked together. One of their keys to success, they explain, is knowing where the lines are. “We went through a season of our lives where boundary building was very, very important to our personal relationship,” says Kevin. “It was

Shawna who took the lead on this, [ensuring] we were going to be a family and have a life outside of our business. There would be a boundary between those two things.” When asked the secret to maintaining high-pressure jobs and a successful long-term relationship, Kevin immediately quips, “We tried killing each other — that was no fun.” On a more serious note, he continues, “… it’s not an easy program, but it’s an extremely rewarding one. So it’s worth the commitment.” Kevin tells of a time when Shawna called him out on crossing a boundary. “We got in the truck to go home one night and Shawna was very quiet. Then she said, ‘I need to talk to my

husband about my boss.’ … She told me about this man who wasn’t very pleasant to work for, and he had said some things that just didn’t seem appropriate to how you treat a colleague at work. I had to quit treating her as ‘special’ because she was my wife. I hope I’ve changed.” Jo-Ann Roberts, host of CBC Radio’s All Points West, and Ken Kelly, president of the Downtown Victoria Business Association, don’t work together, but they often attend various business events together. Sitting together on the sofa in their living room, holding hands, they are the epitome of a connected couple at the top of their careers. “It’s love that’s brought us together; it’s love

that brought us to this city — and from one city to another across this country,” says Ken, noting that they have moved jobs and cities four times in their 33 years of marriage. “We’re very supportive of each other; that’s the key.” They also credit their obvious harmony to the boundaries they have set to deal with potential issues of confidentiality arising from their respective jobs. “We learned early on, we couldn’t be each other’s source,” says Jo-Ann. Changing Roles During the past 14 years, Josée Lalonde and Murray Cuff went from being co-workers to

a couple to business partners in The Housse (no, that’s not a typo), a thriving home-staging resource centre serving the needs of Vancouver Island’s home staging, stylist and design community. It’s meant shifting and relearning roles over the years. In the beginning, Murray was a military periodontist and Josée was his surgical assistant. “We worked knee to knee for 10 years,” says Murray. “So we’re used to working in the presence of each other but each having our own respective jobs to do. It’s still a little bit like that — so we are very comfortable in each other’s company.” Douglas 35

What is the secret to the success of their work/life relationship? “Very few people understand me as well as Josée does,” says Murray. “...I’ve found someone who knows me, appreciates me, loves me and that makes it tick for me.” He pauses, then adds, “For Josée, it’s because I’m very good looking!” “You are very good looking,” says Josée. “And funny,” he laughs. “...she makes me believe I’m still funny, and I think that helps!” Josée is a little more serious. “We developed this relationship and connection,” she says, “...and at one point I was kind of like ‘hold on a second, this person needs to be in my life, however it is.” 36 Douglas

Their skills proved as complementary in business as they did in the dentist office. Joseé taught Murray that style, fashion and home decor is important, and he taught her not to be too open and trusting. Josée works on the creative side and Murray on the business management side. As Josée says, “We definitely have our strengths and weaknesses and that’s why I think we work so well together — because we complement each other.” Staying in synch Like Josée and Murray, Darren Ausmus and Scott Elias work together and live together. They

were teachers before they decided to change their lives and open Luxe Home Interiors. “We deeply value public education,” says Scott, “and we worked passionately throughout our careers towards a stronger and more inclusive education system. When we accomplished all that we could to make a difference, we then decided it was time for a change and to turn our energy in a new direction.” Four years ago they purchased Luxe Home Interiors. “It gave us a new opportunity to create a business that reflects who we are,” says Darren, who has been with Scott for 22 years. They find balancing their home and business

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lives challenging, but rewarding. “It’s about resilience,” says Scott, “facing it together.” Sitting in the Timothy Oulton showroom at Luxe, Darren says, “You are always working on finding the balance that puts the important things first; there are often commitments at work that take precedence. Then there are times when we need to regroup and take time to do something we look forward to, like travel or dinner at home with our son, or whatever. Finding those moments in what can be an incredibly busy week is challenging.” To stay connected, they visit the gym together every day and they walk, cook, have meals together and with their son — and most

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“Support each other’s dreams; acknowledge, respect and honour each other’s strengths and help with their weaknesses. And commit to really hearing each other.”

“Don’t lose sight of your love — and do be grounded in each other. Respect each other’s jobs and all they involve, and enjoy shared interests.”

importantly, “We visit people who make us laugh,” says Darren. “We are fortunate that way,” Scott concurs. “We are so in sync with each other.” Sometimes staying in sync amidst busy lives comes naturally, and sometimes it takes creativity. For 10 of Ken and Jo-Ann’s 33 years of marriage, when Jo-Ann hosted CBC’s early morning show, they almost never went to bed or got up at the same time. This could have been a major strain on their relationship, if not for their novel approach to the challenges. So before either of them went to bed, they would write the other a message in a notebook. Then, upon waking, they would read the previous message and add one of their own. This allowed them to communicate what was happening in their lives, and to stay connected. Today, the dozens of notebooks and the story they contain are used in a marriage prep class the couple teaches for the Association of Catholic Leaders. They are also careful to balance their roles between work and home. “We have jobs where [it’s easy to] become the job,” says Jo-Ann. “Ken is Mr. Downtown, Jo-Ann is All Points West, and we are those people in our respective jobs and it’s very easy to think you are that. But what we remind each other of on a regular basis, and why we’re good for each other, is that our relationship is more important than those jobs. It will be around a lot longer than the roles we play.” And, as Jo-Ann prepares to take an early retirement from CBC, there’s no doubt that while their roles will change again, the foundation is strong.

with offices in Vancouver and Victoria. They have been married for 30 years, and although they work for the same company, they have completely different roles. Mary-Lynn manages Suburbia and is CEO of FunctionFox Systems. She is also a partner in Valentus Clinics. Russ is the senior art director for Suburbia. For them, their business lives are their passion so they don’t feel the need to draw a work/home dividing line. When asked the secret to being a successful professional couple, Mary-Lynn says, “Respect each other professionally, understanding the demands that can come with the work you do.” “It’s about being on the same page,” says Russ. “If I were off golfing all the time and Mary-Lynn was working her ass off, I couldn’t see that working for us.” But Mary-Lynn does remember a time of a little too much togetherness. In 1998, they decided to expand Suburbia by building their own office building off West Saanich Road. Their estimated build time was five months, and as shovels went into the ground, they ramped up their business, taking on new clients and new staff. Of course, the inevitable happened and construction was plagued by delays. They were forced to turn their home into a home office temporarily. “We took over the den, TV room, kitchen and the entire downstairs,” recalls Mary-Lynn. “Aside from the bedrooms, everything [in our home] became office — the fridge was full of people’s lunches and every chair was spoken for, including the piano bench. “... It made for a close knit team – in fact, many of the people that came to work every day for several months to our home are still with us today. I guess we kind of took work/life balance to a whole other level.”

A Supportive Outlook Not all couples place such emphasis on separating business and home life. Mary-Lynn Bellamy-Willms and her husband Russ Willms are owners of Suburbia, a national marketing and communications firm 38 Douglas

The Power of Togetherness Being a dynamic, secure, well-balanced, couple is always easier during good times,

Scott Elias and Darren Ausmus “Find ways to talk about where you are heading, share similar passions and let the other person shine at what they are good at. And demonstrate generosity of spirit — be supportive, keep the relationship safe.”

but it’s surviving tough times together that demonstrates the resilience of a relationship. During the market crash of 2008, Shawna and Kevin Walker experienced a challenge that might have destroyed a less committed couple. They figured their dream for Oak Bay Beach Hotel was lost when their lenders had pulled out. That day, after finding out the news, they gave the development team their final paycheques and got into their truck to head home. They ended up driving around until the

Russ Willms and Mary-Lynn Bellamy-Willms “Make love your foundation, admire each other and be on the same page as parents.”

early hours of the morning, discussing what to do. Things didn’t look good: they were two years and around $12 million into the project. The next morning, however, their entire team turned up with no expectation of being paid. The rest is history, as they say, and this dynamic duo saw their dream survive and thrive. “It’s a privilege to go down to the depths of despair together,” says Kevin, “figure it out together, stay up all night, and in the morning wake up and say to ourselves ‘we didn’t

Murray Cuff and Josée Lalonde “Trust in the other person’s abilities, respect each other’s work ethic — and be supportive.”

accomplish anything, but we’re together.’” Over at Luxe Home Interiors, Darren underlines the profound effect having a secure relationship has on the ability to achieve goals. “What I feel so proud of in our relationship,” he says, “is that we find ways to pick each other up when the other person’s down. It raises our energy towards what we want to do. “Having someone beside you is important,” says Scott. “I can’t imagine doing this with anyone else but Darren.” ■

Protect your staff and your business by developing a health and safety program Find helpful resources on how to maintain a successful health and safety program for your business at worksafebc.com/safetyatwork.

Douglas 39

How Global Trends

impact local businesses The ability to look into the future and see opportunity is vital to the entrepreneurial DNA. Douglas asks innovative thinkers how emerging global trends will influence how we do business on Vancouver Island.

When you ask realtor Tony Joe about 2015 and beyond, he looks to China. “We are seeing a lot more Mainland Chinese purchases on the real estate side. I have a team member who just handles our Mandarin Chinese clients,” he says. “And it has taught me a couple of things. All this time of being a local here, from Victoria, I always had the impression that the Chinese ended up going to Vancouver because Victoria was too small and quiet.” Turns out, it is small and quiet that the Chinese like, along with Victoria’s English-

Canadian cultural environment. “When they are in Vancouver, they are in Richmond, and they may as well be in Shanghai,” says Joe. What Joe is talking about is what futurist Bob Treadway calls “an early indicator.” Treadway, a keynote presenter at the 2014 Vancouver Island Economic Summit, should know. For 27 years, he’s been helping businesses look into the future. “All you have to do is look at what happened to Vancouver real estate prices when the big influx of population from Hong Kong came into

The escalating

trade war

Estimates show

70% of world growth over the next few years will come from emerging markets, with China and India accounting for

between the West and Russia could result in Russia imposing further

import bans

on products such as wheat, barley, commercial jets, energy and farm equipment.

40% of that growth.

China is set to overtake the U.S. as the world’s biggest oil consumer within two decades.

In 2013, total new investment in clean energy sources and technology came to around

$214 Billion USD globally.

40 Douglas

Bilateral merchandise trade and investment between Canada and Brazil has increased by more than

A study by Chinese real estate website Juwai found Canada is the

since 2009.

market for Chinese investors, after the U.S. and Australia.

45%

3rd most attractive

by Carolyn Camilleri the area,” says Treadway. “It was dramatic, and if there is another exodus out of China, I think that is going to be substantial.” But the Chinese are not just buying homes. “Now we’re seeing a lot of people buying businesses here because they want to settle their roots here,” says Joe. “A lot of Island business owners are seeing this as a time to cash out. It is a reminder for businesses that if they are thinking of retiring to get going on their exit strategies now so they have everything in order.”

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Douglas 41

George Hanson, president of the Vancouver Island Economic Alliance (VIEA), has also noted the growing interest from China. “It is evident that in 2015, we will see a continuation and perhaps acceleration of Chinese investment on Vancouver Island,” he says. “Investment spans from large-scale development projects to capital investment to spur business expansion to the purchase and management of small businesses.” This trend shows every sign of continuing, says Ali Dastmalchian, professor and former dean of the University of Victoria’s Gustavson School of Business. He says Chinese interest is shifting away from Richmond. “Southern Vancouver Island will become much more of a favourable place for prosperous Chinese to invest, both in property and in businesses.” Dastmalchian adds that a trend within China is also having an influence on business here. Years ago, China was viewed as a place for Western companies to set up manufacturing; that has all changed with the 2008 economic downturn, when the aggressiveness of many Western businesses disappeared. “China is now looking at understanding how can they set up Chinese businesses in different parts of the world. That trend is going to continue.” Overall, it means the presence of Asian companies in North America is going to grow, and Canada is seen as a safer, more attractive destination with a secure banking system.

Treadway says with the exception business owners who view of the U.S. — Canada’s largest trade their business as an ecosystem partner — no other country has a versus single-purpose vending machines bigger impact on South Island business for money will be able to create than China. He doesn’t expect China substantive change. to take over as Canada’s largest trade — Gregg Meiklejohn, Enrollment Resources partner, but says our trade with China is growing at four times the rate of our trade with the U.S. Who Else is Coming? “As a business person, looking As significant as China’s influence is, it’s not about five years out, I am going to think about the only country eyeing the Island. that and about the potential impact on my Pedro Márquez of Royal Roads University business,” he says. “If the Island is ready, it believes global trade and commerce will could be a huge benefit economically.” continue to expand. “Although we do see some Key areas to watch include ”The Hong Kong signals of nationalism and lack of confidence crackdown” and whether it triggers an exodus, in free trade,” he says, “the truth is that this says Treadway. China’s economy is another process will continue to evolve.” watch point. “If their government can navigate For Dastmalchian, the growth of international a real estate bubble, hold down inflation, business is the fulfilment of the goal of UVic’s and stimulate their economy by encouraging international business program. consumer spending, then it’s good news,” says “Our hope has always been that Canada Treadway. “This move to consumption-driven, becomes less dependent on the U.S. economy upward growth is bound to be spotty and and more internationally oriented. Watching it disruptive. The exposure of Canada’s banking over the past two decades, we see incredible system to economic wobbles in China is changes have happened in this landscape.” unknown but may be significant.” While being less dependent on the U.S. is If the U.S./EU-Russia trade war escalates, a goal, Marquez says it’s critical to remember China may position itself as a “wild card,” how closely we are tied to the U.S. “Even a he adds. “While it’s not in China’s interest slight growth of the U.S. economy will bring to cut back on imports of Canadian potash, shorter-term economic benefits to the region. canola and fish, there may be positioning if The short-term emphasis should continue to be Putin moves to forge a stronger Russia-China alliance.” placed on the U.S. The longer-term vision needs

The Mosaic on Victoria’s Fort St. is an early example of micro-lofting, a trend that has become hugely popular in Canadian urban centres.

Other Influences

E-Commerce “The internet is gnawing at the edges of the retail sector,” says Gregg Meiklejohn of Enrollment Resources. “For retailers to survive, they need to reorganize their business model to adopt e-commerce.” 42 Douglas

He says consumers are getting very comfortable with purchasing online and some retailers fail to realize that their competition is not Walmart, but the “highly functioning, highly successful, hyper-niche players that are maybe in Terrace or Saskatoon or somewhere else and people search that out.”

CLIMATE CHANGE It’s impossible to talk about business and environmental trends without mentioning climate change, which is profoundly affecting our planet. Farmers and forestry companies are seeing the effects of rising temperatures and changing weather patterns on crops and forests; fishery-related

Jo-Ann Loro/Douglas Magazine

Micro-lofting Developments like Victoria’s Janion have proven that there is a market for small square footage and low prices, says realtor Tony Joe. He notes that the Janion is not the first. “In 1999, we had the Mosaic and we had Mermaid Wharf and those were the first of the loft-style condos and they have stood the test of time. This is a new iteration of that.”

businesses are dealing with rising ocean temperatures. Everything is changing and businesses will need to adapt, not only for their own bottom line but also for the common good. Futurist Bob Treadway says businesses can help other businesses and individuals adapt

to the effects of climate change. Examples include vintners planning future plantings and the forestry industry dealing with rainfall changes and insect infestation. Mechanical industries, such as heating and air conditioning, may also become more significant, he says.

to be placed on diversity, foreign or international trade,” he says.

First Nations Sees Opportunities First Nations businesses are also expanding, evidenced by enterprises such as Oyster Bay, Wya Point, Nexus Electrical and the partnership between the Huu-ay-aht First Nations and the Port Alberni Port Authority, along with Salish Seas Industries, a pile-driving and dredging company made up of the Esquimalt and Songhees First Nations and Victoria’s Ralmax Group. Hanson of VIEA expects this trend to gain momentum, especially in property development, hospitality and tourism, energy and small business. “When treaties are resolved, monies are available to First Nations, enabling business and property development not previously possible,” he says. “This not only enables First Nations economic development, it contributes to surrounding economies by First Nations contracting for a broad range of services, goods and materials.”

Expanding Interests Several trends are changing how and where we work. Enrollment Resources, the company Gregg Meiklejohn founded with Shane Sparks in 2003, is a prime example of working locally

I emailed my supplier.

I called my Professional Association.

while doing business globally. “We’re an internet marketing company and we have spun off a software division and we have one client in B.C. — all the rest are back East or in the States,” says Meiklejohn. “We’ve done all our marketing out of here. Many of our clients have never seen us.” Meiklejohn’s company is at the forefront of another movement that is gaining ground: businesses who are adopting eco-conscious business practices. Green Business certification and B-Corp certification are two examples. In essence, B-Corps are to business what FairTrade certification is to coffee. B-Corps must meet rigorous standards of social and environmental performance, accountability, and transparency. Meiklejohn, whose company Enrollment Services is Vancouver Island’s first certified B-Corp, and one of 1,000 certified B-Corps worldwide, says the trend is in having the consciousness to understand that this is going to be important. “That’s the key. A lot of these people are just doing good work. They’re intuitively generous. They’re good corporate citizens,” he says. “It doesn’t have to be B-Corp, but business owners who view their business as an ecosystem versus single-purpose vending machines for money will be able to create substantive change.”

I texted my colleague.

Doing good work attracts like-minded suppliers and customers. “There tends to be a strong degree of mutual loyalty amongst organizations that share similar core values,” Meiklejohn says. “When you connect people around core values, you create really tight and efficient business systems.” And businesses are interested. Meiklejohn says regional meetings typically attract 150 to 200 people. “It’s energy looking for a place to park,” he says.

Get Ready Hanson sees many of these emerging trends as the beginning of big changes for Island business. “With substantial foreign investment, large numbers of new-immigrant small business owners and increasing First Nation participation in the economy, 2015 will herald a budding awareness of dramatic changes to an Island business culture that has not seen such change in recent memory,” he says. At the same time, the growth of B-Corps and the changes in how we do business here demonstrates a strong desire to ensure our Island’s future is sustainable. Change is clearly coming. The question to ask yourself is: what part are you and your business going to play in the Island’s future? ■

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Douglas 43

real estate and development by greg pratt A new two-storey, 5,242-square-foot harbour terminal will replace the existing terminal of converted trailers. Facilities will include a plaza, a public walkway, benches, trees and bicycle racks.

A Safe Harbour for Business

A new seaplane terminal, a yacht marina development and a land swap between the City of Victoria and the Province is changing Victoria’s harbour, fuelling optimism that the harbour is finally getting the facelift it needs.

44 Douglas

Randy Wright, executive vice

ictoria’s harbour is often president of the Harbour Air referred to as the jewel Group, says construction on of the city, but one many the new terminal will start people have long said first thing in the new year. needs major polishing to help it reach its potential. This year, two major the construction of the new terminal (led by project construction developments, along with the Johnson manager Deane Strongitharm of Victoria’s CitySpaces) Street Bridge replacement and the City’s David Foster to be completed in spring 2016. “I don’t think there’s Harbour Pathway, are set to change the face of the anything like it in the world,” says Wright. harbour as we know it.

By Air

By Sea

Harbour Air Seaplanes is constructing a new terminal in the harbour with partners West Coast Air of Vancouver and the U.S. company Kenmore Air at an estimated cost of $4 million. The terminal, at 950 Wharf, will feature a one-and-a-half storey 5,200-square-foot floating terminal, as well as improvements to existing docks. It will accommodate planes from all three companies. “It’s been all positive,” says Randy Wright, executive vice president of the Harbour Air Group, referencing the community reaction to the development, which has had a public hearing. “The bridge will get completed, there’s the Janion [micro-lofts] building, ourselves, the David Foster Pathway … It’s quite exciting for the community.” Phase one of the terminal development, which involved construction of 300 feet of docks for 12 planes, was completed in July of 2013. Phase two involves

Construction is also underway for the $22-million Victoria International Marina along the north shore of the harbour, just east of Spinnakers Brewpub. The yacht marina was given the go-ahead by Victoria City Council in September 2011 (being such a large project, public opinion has been divided) and will have two buildings with a cafe, a restaurant and the marina itself. The project will feature a 900-metre concrete breakwater with slips for 29 yachts (from 65 feet to 150 feet) to park. Victoria International Marina CEO Robert Evans says the marina, slated for completion in December 2015, will most likely bring in lots of business to Victoria. “We expect there will be an increase in the amount of visitor boats for sure,” says Evans. “Plus, there will be non-resident ownership on some slips.”

Low Hammond Rowe Architects

“I think we’re interested observers, much like others, in seeing how that development progresses,” says Curtis Grad, who was still CEO of the Greater Victoria Harbour Authority at the time of this interview. “It’s outside of our direct area of ownership or influence. To some degree, the new marina will be competition for some of the facilities that the Harbour Authority provides in terms of large moorage, but I think competition and capacity are only good things for the market, so we encourage competition and wish them all the success.” Former Victoria Mayor Dean Fortin says these projects are an example of the continuing investment Victoria is seeing, particularly around the harbour. “These multi-million dollar investments reflect a growing confidence in Victoria’s economy ... and job market,” says Fortin. “Projects like the float plane terminal illustrate the role Victoria’s harbour plays as a transportation gateway to the city and Island.”

By Design Meanwhile, Ian Maxwell, president of the Ralmax Group, which owns or leases much of the upper harbour’s industrial and marine-zoned land, says that right now the only developing his company is involved in is still on paper. But the end goal of all his planning will be a new look for some of the industrial harbour properties. “We’d like to demolish some of the old buildings, and we’d like to build a new United Engineering building and a new machine shop. Harjim Industrial is down there, Island Plate and Steel is down there, we’re down there, United [Engineering] is down there; we’re going to combine all of our outlets in one building. Then we’ll finish off the initial phase of Point Hope — finishing off the railway and the spur lines, etc. The next phase that we hope we’ll get to build on my watch is a graving dock, but those other things have to be done first.”

Harmony in the Harbour? In the June/July 2013 issue of Douglas, we explored the lack of a unified vision for Victoria’s harbour and the complicated web of ownership. Since then, one of the owners, the Provincial Capital Commission (PCC), was dissolved. The PCC was a Crown agency with stewardship of many provincially owned properties in the Capital Region. Its dissolution eliminated a main player in the crowded harbour-ownership scene and was one of the two most significant events relating to harbour ownership in the past year. The other was the big land swap involving the Point Hope Shipyards that took place between the City of Victoria, the Province and the Ralmax Group. The swap was, as Grad says, “The single biggest change in the landscape in many, many years.” The City’s ownership of the Point Hope Shipyard lands was traded between the City and the Province for other pieces of provincial land, including part of Ship Point, Crystal Gardens, and three parks. The Province then immediately sold the Point Hope property to Ralmax. “That shipyard’s been there for well over 100 years, and this deal certainly secures its position for many more decades to come,” says Grad. “The two levels of government worked cooperatively to enable us to move forward and generate a whole pile of economic development as they did,” says Maxwell. “We didn’t expect help; they just came and put it together and helped us out. I think they did something quite amazing. I’d like to be part of encouraging them to keep their dialogue open when things like that happen.” “Sometimes,” Maxwell adds, “we have success in spite of ourselves.” And all of that is welcome news for those who have long advocated for Victoria’s harbour to achieve it’s world-class potential. ■

Urban Trails The City of Victoria recently announced that the Trans Canada Trail (TCT) will contribute up to $1.4 million to advance construction of the David Foster Harbour Pathway, a 5-kilometre high-quality, paved portion of Victoria’s section of the TCT. The Trans Canada Trail connects with the David Foster Way on the west side of the Johnson Street Bridge and continues to Ogden Point. The funds will advance four key connections within the pathway, including two pedestrian bridges located at Heron Cove (pictured here) and Raymur Point in James

Work on your business

— not on your books

CALL us ToDAy!

250-590-4771 Bay, the pedestrian connection between the Janion development and the Johnson Street Bridge, as well as construction of trail along Reeson Park to connect with the future Northern Junk development. Public consultation and construction is scheduled to commence in 2015.

#201-388 Harbour Road, Victoria, BC V9A 3S1 Douglas 45

Last Page

Jeffrey Bosdet/douglas Magazine

THE SUDSY BROTHERS. Klaus and Ferdinand, two pitweiler puppies, get their baths at Mucky Mutt Pet Salon on Oak Bay Avenue. Both pups are available for adoption at Broken Promises Rescue, a notfor-profit society that helps find permament homes for homeless animals.

Going to the dogs is a good thing by Kerry slavens

46 Douglas

Canadians love their pets. Just look at the pet salons, pet hotels, gourmet pet treat bakeries and pet fashion boutiques popping up across the country. In fact, according to the Pet Industry Joint Advisory Council of Canada, Canadians spent $6.5 billion on their pets in 2012 and that amount is growing. And it’s not that we are bringing more pets home, we are simply spending more dollars on the pets we have. For Vanessa Petrovic, owner of Mucky Mutt Pet Salon in Oak Bay and

on Burnside, the growth of the pet industry is a sign that people want to care for their pets and increasingly treat them as a part of their families. “I think that says to us that [our pets] are giving us something emotionally,” says Petrovic, who purchased Mucky Mutt Pet Salon two years ago. In a typical week at Mucky Mutt’s Burnside location, 60 to 70 dogs are brought in for grooming, and five to six a day visit the Salon’s U Bath where their owners can wash and dry them. And then there are dozens and dozens

of nail trims done at the salon each week ($1 from every nail trim goes to Broken Promises Rescue). Petrovic says the Mucky Mutt is a business but it is also a labour of love. “I’m very rescue oriented and I want to do what I can to help animals who don’t have homes and families,” she says, emphasizing that she is not alone in providing services to animals in need. “The community in Victoria, everybody, is wonderful about giving and I’m proud to be part of a community that cares so much.”

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