BUDGET BC Liberals’ balanced budget bulls and bears 2015 upbeat outlook | Christy Clark quick to pump up tires of B.C. budget 2015 9 service plans | Casino high-rollers, liquor futures foggy, PavCo losses 9 opinion | Hits and misses in Finance Minister de Jong’s balanced budget 20 ExclusivE winE offEr to all Biv suBscriBErs High quality wines, at an attractive price – ideal for corporate gifts Call Frank Gigliotti | 604-988-4470 Daily business news K biv.com February 24–March 2, 2015 | Issue 1321 | $4.00 anti-counterfeit fight Climate Change | page 6 B.C. forest firms buying american With B.C.’s Interior forests devastated by pine beetles, the province’s biggest forestry companies have engineered a major marketplace recovery by acquiring U.S. lumber mills tips for building better business Apps and tools to improve corporate productivity | PAge 12 Has anti-spam legislation killed email marketing? | PAge 26 Wine Festival | PAge 25 vintage investment Chung Chow security | How technology that replicates the reflective properties of the blue morpho butterfly can help fight banknote fraud | Page 3 Why Vancouver’s festival has become a key investment for major wine producers reliable. period. .net 7 71114 PM40069240 78312 R8876 6 07 Return undeliverable Canadian addresses to Circulation Department: 303 W 5th aveNUe, Vancouver, B.C. 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LEX-RX030-N-51-R1.indd 1 2015-02-17 5:34 PM news BUSINESSVANCOUVER February 24–March 2, 2015 3 Counterfeiting fight spawns real revenue potential technology | Burnaby company developing unique nanotechnology to battle banknote fraud By TYLER ORTON 470 [email protected] C all it the butterfly effect. While examining ways to make banknotes even more difficult to counterfeit, a Simon Fraser University (SFU) researcher took inspiration from the optical properties in the blue morpho butterfly’s iridescent wings. N a n o te c h S e c u r it y ( T S XV:NTS), an SFU spinoff, has developed technology that creates images on banknotes as natural light hits a grid of tiny – or nanosized – holes on the bills. The effect is similar to how the blue morpho’s wings interact with light – a feature not seen on any bills in circulation. While some global firms are investing in fluorescent dyes and magnetic strips to meet market demand, no other company has gone the route of Nanotech. “It’s very difficult to do; it’s very costly to get in the business,” Nanotech chief development officer Igi LeRoux said. “It’s not very highly competitive, but then the market [for nanotechnology] is not all that huge.” He sa id that’s ex pected to change when the security features “hit the streets” in the coming years. For now, much of Nanotech’s recent growth has been coming from its legacy business. Colour-shifting optical film has been the industry standard for banknote security since the 1990s. Depending on the angle of view, colours change on security features printed on bills in a way that the average person can recognize. Because the nanotechnology has yet to be fully commercialized, the optical film side of the business is growing the most. Purchase orders “in the low seven digits” from three international customers were finalized in February, according to the company. And increased demand for the optical film products prompted 35 Number of fake notes per million detected in Canada in 2004 Number of fake notes per million detected in Canada in 2010 after the Bank of Canada adopted Fortress Optical Features technology Source: Bank of Canada Nanotech scientist Vahit Sametoglu holds up the security feature that replicates the reflective properties of the blue morpho butterfly | chung chow Getting a brand-new security feature that has not been used anywhere before … [banks] are just not willing to take a chance on new things in general when it comes to banknotes  Chad Wasilenkoff CEO, Fortress Paper Nanotech to add a second shift at its Quebec cellulose facility, which was acquired – along with the legacy business – from North Vancouver’s Fortress Paper (TSX:FTP) in August. Fortress Paper CEO Chad Wasilenkoff said when discussions began over the sale of Fortress Optical Features (FOF) he was immediately drawn to Nanotech’s butterfly technology. “Getting a brand-new security feature that has not been used anywhere before … [banks] are just not willing to take a chance on new things in general when it comes to banknotes,” he told Business in Vancouver. “It will take a little while to come to fruition, but we think putting these two entities [Nanotech and FOF] together will definitely fast-track that.” Counterfeiting hit its most recent peak in 2004, when 470 fake notes per million were detected across the country, according to a 2011 Bank of Canada (BoC) study. The BoC developed and used the FOF technology until 2010, when counterfeit notes dropped to 35 per million. Wasilenkoff, whose company operates another banknote security firm in Switzerland, said he was happy with the return on investment after Fortress bought the BoC assets for $750,000 and sold them to Nanotech three years later for $17.5 million. “We were able to find a solution that was really synergistic for both companies,” he said, adding that Fortress will receive preferential treatment on new security features Nanotech develops. Meanwhile, now that FOF is no longer competing with a sister company, LeRoux said there has been “quite a resurgence” in the legacy business’ technology. Although at this stage the nanotechnology and optical film sides of the business are slightly separate, he said there’s “a planned convergence of these [products] very soon.” LeRoux added that acquiring the legacy business was necessary if the nanotechnology was to be taken seriously in an industry that greets upstart companies with skepticism. “We have an established network, we have an established market base, we have an existing product and – most importantly – we have an existing reputation in the industry.” • 4 news BUSINESSVANCOUVER February 24–March 2, 2015 retiring rich | BMO study reveals retirement aspirations of affluent British Columbians 59 Average age at which B.C.’s wealthy expect to retire $2.2 million Average amount survey respondents estimate they’ll need to live out their ideal retirement lifestyle $3,065,889 Average amount survey respondents have in their investment portfolios 23% Percentage of B.C.’s wealthy who hold more than $2 million in their investment portfolios 92% Percentage of wealthy B.C. survey respondents who plan to spend their retirement in Canada Source: “A Glimpse Into an Affluent British Columbian’s Retirement”– BMO Private Banking study of B.C. millionaires’ retirement bottom lines High school student is living lesson in entrepreneurship enterprise | Teen gleans valuable experience opting to start a business rather than work for others By Jen St. Denis This might not be the next Facebook. … But it will give Andrew all the tangible experiences that any employer would like to see [email protected] S pending your evenings and weekends working might be typical behaviour for a 17-year-old trying to save money to travel or for university. Andrew French works a little harder than most teenagers, but he says he’s created a more enjoyable and lucrative job for himself by starting Quarry Clothing. The company prints T-shirts and other items with school or event logos and employs 30 other teens in high schools across North Vancouver, West Vancouver and Vancouver as commissioned salespeople. “I’m very proud and happy at what he has done so far,” said Alex Jacobs-Hajian, a consultant at Accenture and an Ivey Business School alumni who has mentored French. “This might not be the next Facebook you’d sell for X-million dollars. But it will give Andrew all the tangible experiences that any employer would like to see, in a very low-risk environment.” French, who lives in North Vancouver but attends Mulgrave School in West Vancouver, said he was inspired to start Quarry after participating in a business case competition for high school students run by Western University’s  Alex Jacobs-Hajian consultant, Accenture Andrew French is a high school student who was inspired to start his own business. He now employs 30 other people, all under the age of 19 | Rob Kruyt Ivey Business School. French estimates he spends between 15 and 25 hours a week working on the business in addition to his Grade 12 courses and homework, but he says it’s better than his previous job at a store. “I worked in a minimum-wage job, and no teenager really wants to do that,” he said. “It was something I wanted to get out of and experience this.” Inspired by companies like Tom s Sho e s a n d Sta rbuck s (Nasdaq:SBU X), French has committed to donate or invest a quarter of his company’s profits to help other young people start businesses. The youth-driven aspect of the business has also helped him to make agreements with Nike (NYSE:NKE), Oakley and New Balance to carry their products. “I t hou g ht of who c a n we benefit and who can we help,” French said. “The best person I could think of to help was me three months before [starting the business].” Jacobs-Hajian said it’s still relatively rare for someone as young as French to start a business, but he believes that French’s generation is more proactive when it comes to preparing for the future. He noted that while French attends a West Vancouver private school, his parents have modest jobs: his mother works parttime in an administrative job at Capilano University; his father is a sales associate for a drywall company. “Some people argue that [millennials] are an uptight, entitled generation,” Jacobs-Hajian said. “Some people using the same evidence argue that this is a generation that set the bar high. They want to be in charge of their work or their life and their destiny, and I tend to [agree] with the second category.” The Next Big Thing, sponsored by Vancouver technology company Hootsuite, caters to the new generation of entrepreneurs. The program is open to 17- to 22-yearolds who have a plan for a startup. (See “Young entrepreneurs bypassing B.C. business schools”– BIV issue 1318; February 3–9.) Jacobs-Hajian gave French advice while he was starting up the business, and laid out different scenarios involving high-risk or low-risk businesses. French’s business is relatively low-risk and didn’t involve a big outlay of capital to get started. The experience will give French an edge in the job market because he’ll already know basic skills such as networking and how to pitch an idea, Jacobs-Hajian said. He also encouraged French to ask himself what the company’s goal was. “If it’s about helping other people, maybe you don’t need high revenue, but you can get other people to come and work with you and it’s more joyful … which I think ultimately he decided.” • Two Vancouver Shops, plus Richmond, Burnaby and the North Shore http://tinyurl.com/nzpbc4p 604.681.7504 dominionblue.com Flatbed Printing & Cutting Indoor & Outdoor Signage Superwide Latex Printing Procut Fabrication Custom Signage news BUSINESSVANCOUVER February 24–March 2, 2015 5 Startups moving beyond ‘shotgun approach’ to monetization enterprise | Many ditching free service model to target markets they know will pay a premium entice users to spend more time include being able to detect when on the site. another user views a profile or Founded in 2003, POF initially a personal message has been generated money mostly through checked. advertisements. The site has But Walia said the “shotgun since moved on to offering up- approach” – trying to attract as graded memberships that cast a many users as possible by offerwider net for potential matches. ing free services before trying to “What we’re trying to do is convert them to paying users – is understand the value as perceived on its way out. “You’re starting to see some by the users and offer them something that will encourage them to that are just forgoing the free become upgraded users,” Osinska platform and then going, ‘OK. said. Hey, how much are you willing Those membership benefits to pay /forSize: this?’” he said. Client: HRMA Half Junior, 5.8” Business-messaging startup Slack has attracted about 70,000 paying customers since launching in February. Slack specifically targets business clients willing to pay between US$7 and US$100 for its services. The strategy has paid dividends, allowing the San Francisco-based company, whose CEO, Stewart Butterfield, lives and works in Vancouver, to raise an additional US$120 million in venture capital in October and bring its current valuation $1.12 billion. x9.3” / to CMYK / BIV• PlentyOfFish is moving away from relying on ad sales and looking to convince users to upgrade their accounts to further monetize its online dating service By TYLER ORTON [email protected] I f you had pitched Google (Nasdaq:GOOG) or Airbnb to Peter Hudson back in the day, he’s not so sure he would have invested in those ventures. Of course, there were already a number of search engines when G oogle lau nched i n the late 1990s, and who would want to rent out their own room to a complete stranger over the Internet? “By definition, a good startup idea is one most people think is shitty. Unfortunately, that’s also the definition of a bad startup idea,” said the CEO of Vancouverbased BitLit, a service allowing users to buy discounted ebooks if they already own a physical copy. “Monetization is hard, and there is a phenomenal focus to monetize, especially among Canadian angels [investors] and venture capitalists.” Startups – even the ones with great ideas – often struggle to make money when founders with a technical background aren’t willing to make those cold calls or send follow-up emails, according to Hudson, who put his company through the Highline (formerly GrowLabs) business accelerator to assist with its launch. “The way you gain traction there is by hustling. Software, no matter how good it is, will never sell itself,” he said. BitLit signed a partnership deal with HaperCollins in July, bringing its catalogue of ebooks up to about 20,000. Hudson, who called Business in Vancouver from Boston, where he was meeting with publishers, said his company is preparing to announce another major deal in the coming weeks. Similar to Highline, Vancouver’s Launch Academy provides mentoring, office space and networking opportunities to earlystage companies. Launch Academy executive director Ray Walia said the issue of monetization is one that constantly comes up among new “ What we’re trying to do is understand the value as perceived by the users and offer them something that will encourage them to become upgraded users Empowering operational leaders is key to our success. ” Marlene Higgins, MBA, CHRP Global Head and Director of HR Kal Tire  Agata Osinska Product director, PlentyOfFish entrepreneurs he mentors. “Over the last five years we’ve seen so many free products and ‘freemium’ accounts and people realizing, ‘Hey, I’ve got a product out there, we’ve got five million users but we’ve got no way to make any money off of this,’” he said. He’s been pushing entrepreneurs to engage in more “customer validation” exercises by getting out of the office, determining what features their customers like and how much they’d be willing to fork over for those services. D espite a l re ady b ei n g t he world’s largest online dating service, Vancouver’s PlentyOfFish (POF) recruited Agata Osinska as its director of product over the summer to help link potential matches more effectively and Meet an HR professional who is driving global growth. Marlene Higgins oversees HR operations of more than 5,400 Kal Tire employees in over 250 Canadian stores, as well as those who are part of Kal Tire’s Mining Tire Group, in 17 countries. A privately-owned company, Kal Tire is a BC success story. Its global expansion strategy is based on careful acquisitions, which includes Marlene’s assessment of executive and operational team capital. She views her role of integrating existing companies with different languages, cultures and business practices as a unique combination of business anthropologist and HR architect. “Leadership capital isn’t reflected on a balance sheet, yet it’s essential to quantifying the opportunity in new markets,” says Marlene. “When an acquisition becomes part of the Kal Tire family, we provide HR infrastructure so each local company is empowered to grow in their markets, their way.” Learn more about leading human resource professionals at weareHR.ca 6 news BUSINESSVANCOUVER February 24–March 2, 2015 Climate Change Shrinking timber supply sends B.C. companies on U.S. mill buying spree forestry | No B.C. industry has been hit as hard by climate change as forestry, which has lost close to 60% of harvestable timber to the mountain pine beetle infestation Mill migration numbers 60% Percentage of B.C.’s merchantable timber wiped out by the mountain pine beetle infestation 57% Percentage of Interfor’s lumber production capacity that now comes from its U.S. mills 36% Percentage of West Fraser’s lumber shipments that now come from its U.S. mills Workers at Interfor’s Acorn Division mill in Delta Interfor’s Acorn Division sawmill in Delta is one of five mills the company owns in B.C.; it owns nine in the United States In this second instalment in its ongoing climate change series, BIV examines the impact warmer temperatures are having on the province’s vital forestry industry. The first instalment in the series, “Climate change looms as major threat to key B.C. industries,” appeared in issue 1320; February 17–23. By Nelson Bennett [email protected] A t first blush, year-end financials and stock prices for B.C.’s largest forest companies would suggest the province’s forestry sector is well on the road to recovery after a decade-long slump. Interfor Corp. (TSX:IFP), for example, posted record sales of $1.4 billion in 2014 and record production of 2.2 billion board feet. Stock values and market caps of B.C.’s three largest forestry companies – Interfor, Canfor Corp. (TSX:CFP) and West Fraser Timber Co. Ltd. (TSX:WFT) – have soared since the end of 2011. Ca n for’s sha re prices have increased almost 180%, West Fraser’s more than 220% and Interfor’s a whopping 410% since the end of 2011. Based on market cap ($6 billion), West Fraser is now B.C.’s seventh-largest publicly traded company. But that increase in production and stock value is largely attributable to recent acquisitions of sawmills in the U.S., not to a boom in their B.C. operations. In fact, Canfor and Interfor have both closed mills in B.C. in recent years. Warmer winters that led to a massive die-off of pine from the mountain pine beetle infestation are largely to blame. B.C.’s largest forestry company, West Fraser, now owns 15 American sawmills, compared with just seven in B.C. and five in Alberta. About 36% of its shipments of lumber now come from its U.S. mills, said Rodger Hutchinson, West Fraser’s vice-president of investor relations. Interfor owns five sawmills in B.C., nine in the U.S. and will add another four U.S. mills this year. About 43% of Interfor’s current production capacity is in B.C., 57% in the U.S. Canfor owns 12 sawmills in B.C., one in Alberta and 10 in the U.S. It also owns four pulp mills in B.C., one wood bioenergy plant in Alberta and one in B.C. While B.C. companies were buying up mills in the U.S., they were closing or selling mills in B.C. West Fraser’s B.C. head count has dropped from 3,700 in 2009 to 3,100 today, thanks largely to closures of its Houston sawmill and Eurocan paper mill in Kitimat. Last year, Canfor permanently closed its Quesnel sawmill and earlier closed oriented-strand-board and plywood mills in Fort Nelson. The U.S. acquisitions come down largely to log supply. In B.C., it’s shrinking – thanks to a mountain pine beetle infestation that wiped out roughly 60% of B.C.’s merchantable timber, reducing the provincial annual allowable cut by 20% – whereas in the U.S., there is a substantial undercut, thanks to a prolonged recession and a steep drop in new housing starts. “You have contracting supply in B.C.; you have growing supply for logs in the U.S. South,” said Martin Juravsky, Interfor’s senior vice-president of corporate development and strategy. “The cost of log supply in the U.S. South is more attractive than it is in Canada right now.” West Fraser bought its first two Building a bridge over troubled housing waters on the backs of mountain pine beetles Ironically, the mountain pine beetle infestation helped the B.C. forest industry bridge one of the worst downturns in its history. As new housing starts plummeted in the U.S. during the subprime mortgage meltdown and recession, a new market for junk wood was created in China, which bought beetlekill lumber in large volumes, mostly for construction framing. In other words, the B.C. forestry sector managed to build a lifeboat made of beetle-kill wood. But that timber supply has run out, and the industry now faces decades of constrained timber supplies in B.C., which has begun to drive up costs of logs. In addition to a shrinking timber supply, the industry also laments other high operating costs in B.C.: property taxes, the PST and rising electricity costs. “In terms of increasing costs, B.C. has gone from probably the most competitive region in North America to one of the least competitive regions,” said Rodger Hutchinson, West Fraser Timber’s vice-president of investor relations. The one advantage Canadian sawmills have over American mills is the low Canadian dollar. It’s been American mills in 2000; since then it has bought another 13. “We could see back then the challenges that B.C. would have with the mountain pine beetle,” Hutchinson said, “although we never … thought it would be as extensive as what it’s turned out to be in terms of the damage.” However, there are other advantages to owning American particularly beneficial for Canadian pulp mill owners like Canfor. B.C. is still a major player in the pulp and paper industry, said Stewart Muir, executive director for Resource Works. In 2014, B.C. producers shipped $4.3 billion worth of pulp and paper compared with $8.2 billion in wood products (lumber, logs, plywood, etc.). Pulp prices, which fell below US$700 per tonne in October 2012, have been steadily rising and now sit at a 14-year high of US$1,060 per tonne. A 20% difference on the Canadian dollar is a bonus for Canadian pulp producers like Canfor. “For the Canadian side of production, it has the impact of being $1,200 Canadian,” Muir said. “So that’s a significant increase in income and profitability here.” Despite a decade-long slump, and despite the investment B.C. companies have been making in the U.S., forestry products remain B.C.’s top export, generating $15.7 billion in revenue in 2013, according to a January economic impact study of the B.C. forest industry. The sector accounts for 63,000 direct jobs and another 82,800 indirect jobs in B.C. Forestry will remain an important part of the B.C. economy, according to Council of Forest Industries CEO James Gorman, but it will contract as more mills close, due to the shrinking timber supply. sawmills than just access to a good log supply: lower shipping costs, for one, because the lumber is closer to buyers. (The U.S. is still the largest market for B.C. lumber.) Owning American mills could also be a hedge against tariffs that could be levied after the current softwood lumber agreement expires later this year.• AIRFRANCE.CA 8 news BUSINESSVANCOUVER February 24–March 2, 2015 Junior mining investment model on life support Resources | Industry By Nelson Bennett [email protected] T here are interesting para l lels between m i n i ng and the pharmaceutical industry. Both involve high risk and long payback periods for investors, but offer potentially big payoffs. Just as big pharmaceutical companies rely on small biotechs to discover new drug candidates, big mining companies need junior explorers to find new deposits. But just as investors have gone cold on pharmaceutical companies that invest in early-stage drug discovery, so too have they abandoned junior exploration, said David Harquail, CEO of the gold royalty and streaming company Franco-Nevada (TSX:FVN). Investors are no longer playing the long game and have become increasingly focused on shortterm payoffs, he said. “The market now is valuing higher those pharmaceutical companies that don’t do R&D and drug research. The market has figured out that you can make more money in the near term by not doing R&D. I think they made the same assumption on the exploration business and mining sector.” fears too many juniors chasing too few dollars will equal too few new mines Harquail made the comparison during a keynote speech at the Association for Mineral Exploration BC’s (AME BC) annual Mineral Exploration Roundup in the last week of January. Last year, Franco-Nevada invested $900 million in new mining projects. But Harquail said his company does not invest in junior exploration because the market won’t support it. “Franco-Nevada has tried to make exploration a business. We can’t figure out a way right now to make money by investing in grassroots exploration.” And that is worrisome, Harquail said, because as mines are exhausted, shareholders will wake up one day and ask why no one was investing in the next generation of mines. Harquail lays much of the blame at the feet of mining executives and directors who catered too much to investors. Good miners know that commodity cycles come and go, so they time a mine’s development to catch at least a couple of higher price cycles during its expected lifespan. But investors no longer have that kind of patience. Harquail said they’re interested only in the latest upswing, not the next one, and too many mining companies Franco-Nevada CEO David Harquail addressing January’s AME BC Mineral Exploration Roundup: “we can’t figure out a way right now to make money by investing in grassroots exploration” | Nelson Bennett have high-graded their operations and focused on big-budget, highvolume, low-grade deposits. “There’s been too much catering now to the marginal investor, which right now tends to be the traders and hedge funds that only invest for the nanosecond,” Harquail said. Yet even when gold prices hit all-time highs during the last bull run, big mining companies failed to reward investors because their costs had gone up. “The big mining companies have concentrated on big, as opposed to profitable,” Till Capital (TSX-V:TIL) CEO Bill Sheriff told Business in Vancouver. About 35% of Till Capital’s assets are invested in resource companies. “In keeping with the bigger-isbetter [principle], all these exploration companies kept drilling and drilling and getting bigger and bigger [on] lower and lower grade deposits that need a $1 billion or $2 billion capex.” Sheriff said there are too many juniors chasing too few dollars. He expects many will simply disappear. “We say the junior model’s broken,” he said. “We think it’s irreparably broken, and by irreparably, I mean at least 20 years.” Harquail urged mining companies to stop thinking like investors. That, he said, means spending money when investors don’t want them to, buying assets for the next cycle when they are cheap and accumulating cash in the good times instead of handing out dividends. Despite the current slump, some juniors have financed their projects through alternative sources, including private venture capital, said Gavin Dirom, CEO of AME BC. Some have also managed to strike partnerships with large foreign companies. Fjordland Exploration Inc. (TSX-V:FEX), for example, has partnered with Sumac Mines Ltd., a subsidiary of Japan’s Sumitomo Metal Mining Co. Ltd. Ultimately, though, it may fall to the large mining companies to finance the next generation of discoveries, something Dirom said has already started to happen. • Building Long Term Relationships Mr. and Mrs. L were introduced to us 17 years ago by an existing Pacific Spirit client. They owned a professional business which was thriving. We worked with them to create a retirement plan and then managed their investment funds in accordance with the plan, all while coordinating with their accountant. In 2014 the L’s announced that they were retiring. We updated their plan with illustrations of alternative retirement income scenarios. We also provided them with advice on pension income splitting, CPP pension splitting, and other tax planning ideas. The L’s are now thoroughly enjoying their retirement. Dream It, Plan It, Live It. Vancouver’s Premier Wealth Management Team Pacific Spirit | Investment Management Inc. Tel: 604-687-0123 | 1-800-337-1388 | [email protected] 1100 – 800 West Pender Street, Vancouver, BC V6C 2V6 www.pacificspirit.ca NEWS BUSINESSVANCOUVER February 24–March 2, 2015 9 B.C. Budget 2015 High rollers and lax lotteries are changing outlook for BC Lottery Corp. The BC Lottery Corp. (BCLC) says highlimit table games at casinos are booming, but lottery ticket sales are sagging. The Crown gambling corporation sold $1.032 billion in lottery products in 201314 but is projecting a decline to $971 million for the fiscal year ending March 31, according to the Crown agency’s threeyear service plan published on February 17, provincial budget day. Casino and community gaming revenue of $1.685 billion in 2013-14 was forecast to rise to $1.773 billion this fiscal year. “The fastest-growing segment of our revenue – high-limit table games in casinos – is heavily dependent on an international player base and is largely tied to the health of the tourism industry,” said the service plan. “The recent slowdown of international economies and currency restrictions presents risks for the growth of business.” The report doesn’t name China, but that country has become Vancouver’s biggest offshore tourist market and Great Canadian Gaming’s River Rock Casino Resort experienced a 30% jump in table game net revenue during 2014’s Chinese New Year compared with 2013. BCLC recorded $1.175 billion net income in 2013-14 and is forecasting $1.2 billion net income by the March 31 end of the current fiscal year. Meanwhile, the British Columbia Liquor Distribution Branch’s (BCLDB) service plan came with a gallon of uncertainty because of the April 1 launch of a new wholesale pricing system and introduction of alcohol sales in select grocery stores. The service plan for the taxpayer-owned beer, wine and spirits distributor and retail chain did not include any assumptions about the impact of grocery store sales on its bottom line. T he BCLDB is forecasti ng a stable market share and product mix but is expecting net sales to remain flat in 2015-16. The Crown agency’s service plan said a combination of inflation and volume growth will increase annual sales by 2% from 2016-17 onward. The BCLDB posted $877 million in net income on $2.745 billion in 2013-14 sales. It forecast $2.8 billion in sales and $907.6 million net income through March 31 of this year. Its 2015-16 forecast is $880.6 million in net income on $2.842 billion in sales. The BCLDB maintains a percentagebased markup on products, so a reduction in supplier prices would mean less revenue for the branch, if volume stays constant. The service plan said that each percentage point change in the cost of wine, spirits and refreshment beverages has a $9 million impact on its revenue. According to its service plan, BC Pavilion Corp., the Crown corporation that runs the Vancouver Convention Centre and BC Place stadium, is predicting $37.8 million in losses for the next three years. – Bob Mackin Premier lauds new budget, B.C. economy in Surrey Premier Christy Clark trumpeted the provincial government’s budget in Surrey February 18, touting B.C.’s diversified economy as the province’s gross domestic product looks to outpace Ontario’s in 2015, and as Alberta braces for a likely recession as global oil prices remain low. Speaking at a Surrey Board of Trade luncheon at the Sheraton Guildford Hotel, she outlined the financially sound state of the province amidst slumping neighbouring markets. “We have one of the most diverse economies in Canada. If you have one customer, they set the price, and that’s the difference between us and Alberta.” In 2014, Alberta sent 90.2% of its international exports to the United States, while Ontario sent 79.3%. B.C relied on the U.S. for 50.6% of its international exports, with 37% going to Asian countries such as Japan and China. Clark noted B.C. is currently the only province in the country without a budget deficit, except for Saskatchewan, which has yet to release its 2015 financials. – Patrick Blennerhassett K biv.com Go online to read these stories in full, along with much more business news updated daily at biv.com. Corner the market on Corner offiCes. Give your career breakthrough power with classes in these management areas: • Project Management (classes beginning in May & June) • Financial Literacy for the Non-financial Manager (classes beginning in June) • Communications (classes beginning in March & June) • Business Operations Management (classes beginning in March & June) register online at capilanou.ca/execed or call 604.984.4910 BUDGET HIGHLIGHTS •Medical Services Plan premiums will increase by 4% on January 1, 2016. For a family of three or more, that represents an increase of $6 a month to $150. •Health spending will increase by nearly $3 billion over three years. Government will spend an extra $10 million to increase the number of hospice beds. •Total government spending of $45.8 billion in 2015-16 on revenues of $46.3 billion with a projected surplus of $284 million. •K-12 education will get an extra $564 million over three years, largely to cover labour agreements. •The budget surplus for 2014-15 is now forecast at $879 million, nearly double the prediction in December. •The debt will increase to $66 billion in 2014-15 from $63.8 billion. •Government predicts 2.3% economic growth in 2015, rising to 2.4% in 2016. •The cement industry will receive $22 million in incentives over three years to produce its product more cleanly. •The Ministry of Energy and Mines will get an extra $6.3 million to improve permitting and mine oversight. •Community Living BC will get an additional $106 million over three years to serve adults with developmental disabilities. •Families can claim a children’s fitness equipment tax credit worth $12.65 per child annually. •Income assistance programs will receive an additional $20 million in 2016-17. •Government will spend $25 million over three years to modernize B.C.’s water laws, regulate groundwater use and improve water management in the province. – Victoria Times Colonist 10 BUSINESSVANCOUVER February 24–March 2, 2015 NEWS Internet Vancouver Web Fest to help producers seek payoff from online entertainment Whether watching or producing a web series – scripted entertainment released online as opposed to over TV – Suzette Laqua is constantly drawn in by a simple idea. “A web series isn’t governed by the rules of your standard TV channels,” said the creator of the Vancouver-based series Last Chance Casting. “People can come in and they can do it the way they want it without any regulations or without any getting permission from the board, the producers, the directors, that sort of thing. They can go in and do what they see fit and be proud of it.” When the second annual Vancouver Web Fest (VWF) returns to the city March 6 to 8, Laqua will be right on Granville Island celebrating what other web series producers have developed. “It was hard this year. We had 220 submissions from around the world,” V WF founder Laqua told Business in Vancouver. “Expectations, again, are much higher this year.” In addition to web series screenings produced in Asia, Europe and North America, the 2015 VWF is adding workshops and panels throughout the weekend to teach producers everything from sound design to attaining rights and clearances. B.C. productions that made the official selection include the sci-fi series Standard Action and Disrien and the reality series Garage Sale Diaries. Meanwhile, panellists from U.S. entertainment website CollegeHumor, Google Canada and Dailymotion will be on hand to offer advice on how to make a web series successful. Local telecom giant Telus (TSX:T) is offering one of its experts from Optik TV to present a case study on the creative process surrounding web series development. One of the keynote speakers – Bernie Su, co-creator of The Lizzie Bennet Diaries – will be there to discuss what makes a show successful. “Lizzie Bennet Diaries is one of the few web series that has actually made money,” Laqua said, adding that part of the festival’s goal is to prove these projects can be economically viable and more than just a labour of love for artists. The festival is also featuring selections from Hollywood actors such as Judd Hirsch (Taxi, Independence Day) and Tom Skerritt (Alien, Top Gun), who were behind the web series Small Miracles and Stroller Gangs, respectively. “[Last year] exceeded our expectations,” Laqua said. Matthew MacCaull plays Dante on the B.C. web series Disrien economy Technology Employee raises to slow as oil prices fall Optimizing mobile apps should be priority for sellers: study Falling oil prices and overall economic uncertainty have caused a number of companies in British Columbia and across Canada to cut their forecasts for non-union employee raises. T he Conference Board of Canada asked a number of employers last summer how much more they expected to pay for employee compensation in 2015. It asked the same question again in December and early January, and the forecasts had fallen. B.C. employers now anticipate giving raises of 2.3% in 2015 – down 0.2 percentage points from when they were first asked. The same drop was found countrywide, with anticipated salary increases slipping from 2.9% to 2.7%. “Many organizations are waiting to see how the economy fares before finalizing plans,” said Ian Cullwick, the Conference Board’s vice-president, leadership and human resources research. “The next few months will be challenging for employers as they balance the need to retain top talent with affordability,” Cullwick said. He said that in particular companies in Alberta and Saskatchewan may further downgrade their forecasts for raises and may start enforcing pay freezes as energy companies cut back. Countrywide, the biggest forecast downgrade was found in retail and wholesale trade jobs, which fell 0.5 percentage points from 2.8% to 2.3%. The only sector that has increased its forecast was communications and telecommunications, which expects raises of 2.4% – up 0.1 percentage points. Businesses that sell products and services online should increase their focus on optimizing mobile sites, according to a PayPal Canada report released February 18. More and more, Canadians are turning away from their desktops and laptops and picking up their phones and tablets when it comes time to make an online purchase. In 2013, Canadians spent $3.45 billion on mobile commerce alone. By 2016, that number is expected to increase 142% to almost $5 billion. “We are at the dawn of a mobilefirst era,” said Alexander Peh, PayPal Canada head of mobile and market development. “At PayPal, we’ve seen our mobile growth rise from less than 1% of our payment volume in 2010 to more than 20% in 2014.” I n t he pa s t 1 2 months, almost a fifth of all online shoppers report having used their smartphones to make purchases. A further 15% say they used tablets. Shoppers using their mobile devices say they prefer using apps as opposed to mobile browsers. Perhaps not surprisingly, millennials – defined as those between the ages of 18 and 34 – are leading the charge when it comes to smartphone-based purchases. Slightly more than half – 52% – of those in this age range say they’ve used this method of buying online. resources Human resources Goldcorp takes US$2.3 billion writedown on mine More Canadians expect to work past 65 than to be fully retired, study finds Goldcorp Inc. (TSX:G) has reported a US$2.4 billion net loss for 2014’s fourth quarter, attributable almost entirely to a massive impairment charge recorded for its Cerro Negro mine in Argentina. The miner took a US$2.3 billion writedown on the mine due to “the decline in market valuations of future exploration potential and the ongoing challenging fiscal conditions in Argentina.” The loss for the quarter was more than double the US$1.1 billion loss recorded in the same period last year. Loss per share in the most recent quarter was US$2.94 compared with US$1.34 in Q4 2013. Excluding the writedown and other adjustments, adjusted net earnings for the quarter were US$55 million, or $0.07 per share. This fell below analysts’ expectations of US$0.14 per share. Overall results for the year, however, were more favourable than in 2013, with the company reporting a US$2.2 billion loss this year, compared with a loss of US$2.7 billion last year. Loss per share in 2014 was US$2.67, compared with US$3.27 in 2013. Goldcorp said it achieved record gold production of 890,900 ounces in the fourth quarter – up almost 16% compared with the same period last year. Company president and CEO Chuck Jeannes said the company expects increased production in 2015. “Expected production growth of an additional 20% in 2015, coupled with rapidly declining capital expenditures, provides a clear path to achieving significant free cash flow this year,” Jeannes said. “Coupled with our investment-grade balance sheet, Goldcorp possesses the flexibility to pursue growth opportunities that will further support our future success.” – Mining.com Do you plan on retiring by age 65? More and more, Canadians are answering “no” to that question. Sun Life’s seventh annual Unretirement Index study, released February 18, found that, for the first time, more respondents expect to be working at age 66 than to be in full retirement. The survey found almost one-third of all Canadians – 32% – expect to be engaged in full-time employment after age 65. Only 27% say they expect to be fully retired by age 66. “This really is a tale of two retirements,” Sun Life Canada president Kevin Dougherty said. “It is striking that in today’s economic environment, they’ve developed a view of retirement that previous generations of workers would not recognize.” By contrast, in 2008 the study found K biv.com Go online to read these stories in full, along with much more business news updated daily at biv.com. that 51% expected to be fully retired a t a g e 6 6, a n d only 16% thought they would still be working. This gap actually widened further i n 2 0 0 9, w h e n 55% said they’d be fully retired and 16% expected to be working full-time. Coinciding with the recession, by 2010 the gap had narrowed considerably (28% expecting to be retired versus 20% still working). And this trend continued consistently until this year. In the most recent survey, 27% of respondents said they expected to be working part-time and 12% said they weren’t sure. One per cent said they didn’t believe they would still be alive at age 66. 12 news BUSINESSVANCOUVER February 24–March 2, 2015 A selection of apps and tools to boost your productivity in 2015 whenever a blog gets published. Slack (web, iOS, Android) https://slack.com/ Small-Business Builder Cybele Negris W ork smarter, not harder – that’s one of my resolutions for 2015. Here then are some of my favourite tools for working smarter. Productivity/project management IFTTT (web, iOS, Android) https://ifttt.com/ IFTTT (If This Then That) streamlines productivity by automating online tasks. It uses “recipes” that you either create yourself or choose from a collection it provides. Users have to define what will trigger the tasks, then what the details of a task will be. This can range from posting on social media, sending an email or automatically adding a note on a different app. For example, one recipe that a lot of businesses are using is automatically creating a post Founded by Flickr co-founder Stewart Butterfield, Slack is billed as “team communication for the 21st century.” Essentially, you can share all team communication in one place that can be searched at any time from anywhere. Slack allows users to create “channels” such as messages, files, comments, inline images and more. Aside from the chat and collaboration aspect of the app, Slack really shines when you combine it with Asana (see below). Integrating it with Asana can help organizations communicate faster, discuss projects and quickly assign tasks. It also makes file sharing much easier when integrated with Google Drive or Dropbox by eliminating the need to send edited documents. Asana (web, iOS, Android) https://asana.com/ Asana is a project and task management app that reduces internal emails. It allows teams to share, plan, organize and track the progress of each task and project. Once a project has been launched, Asana users can also create sub-tasks and assign them to the appropriate team members or departments. up during the morning to remind users about appointments on their calendar. Microsoft Office https://products.office.com Wunderlist (web, iOS, Android, Windows Phone) https://www.wunderlist.com/ Businesses that rely heavily on Microsoft products can benefit greatly from the MS Office app. With MS Office, you get the complete package, in a mobilefriendly format. Businesses can also use the OneDrive app to sync files automatically, eliminating the need to constantly send over the right versions of documents. Task management Todoist (web, iOS, Android) https://todoist.com A highly effective task and light project management tool for desktop and mobile, with further integration into mail clients such as Outlook and Gmail. Tasks can be categorized, tagged and given due dates, and a karma system helps reward completing tasks on time. Any.do (iOS, Android) http://www.any.do/ A strictly mobile app, Any.do is a to-do list manager that’s similar to most of the top to-do list managers. However, one of its greatest features is its “Any.do Moment”– a message that pops Another to-do list manager, Wunderlist lets users quickly sort and organize important upcoming events, tasks and appointments. Wunderlist shines over its competitors because of its no-frills interface. Google Keep (web, iOS, Android) https://keep.google.com/ Allows users to compile to-do lists and take notes wherever they have access to Google. Simple note-taking with good integration into Google’s ecosystem of apps. of information to provide more value to users. It can sync with Facebook and LinkedIn to create entries on upcoming birthdays, events and meetings, and will tell you the weather, provide directions to your next appointment and even send an email to people invited to a meeting. News and information Yahoo News Digest (iOS, Android) https://ca.mobile.yahoo.com/ newsdigest/ For business owners and professionals who don’t have a lot of time to read the news or catch up on global events, Yahoo News Digest is the perfect app. It displays six headlines when you open the app and makes reading the news easier. Pocket (iOS, Android) http://getpocket.com/ Note-taking Evernote (iOS, Android) https://evernote.com/ Evernote’s success can be attributed to its simplicity. Being able to quickly take notes, store information you find online and create task lists makes it one of the best apps around. Calendar Sunrise (web, iOS, Android) https://calendar.sunrise.am/ Sunrise is a powerful calendar app and incorporates a variety Pocket has been around for some time and is one of the best apps for business owners and professionals who are always busy but want to read interesting articles. With Pocket, users can quickly save copies of important articles on a “read later” list. • Cybele Negris ([email protected] ca) is president, CEO and co-founder of Webnames.ca, Canada’s original .CA registrar. Plenary Speakers RyAN eSTiS ARleNe DiCkiNSON DANiel PiNk BRAD kARSH Shifting HR’s role in today’s business reality. Rethink HR at Western Canada’s top HR conference, April 28-29, 2015 in Vancouver, BC at the Vancouver Convention Centre. This year’s event presents leading business leaders, thinkers, speakers and educators in a dynamic environment designed to challenge, inspire and invigorate. Don’t Miss Out Register Today HRMA.CA/CONF2015 C M Y CLIENT: K 604.988.1407 PSA BFX-15-430 DOCKET: ITEM: SIZE: Poster 15" x 21" BUSINESSVANCOUVER February 24–March 2, 2015 13 Surrey B.C. budget 2015 | Upbeat outlook “We have one of the most diverse economies in Canada. If you have one customer, they set the price, and that’s the difference between us and Alberta” – Premier Christy Clark on B.C.’s comparative resilience to the economic impact of low oil prices Premier Christy Clark touted B.C.’s economic sturdiness during a February 18 speech to the Surrey Board of Trade. See budget stories and analysis: pages 9, 20, 27 Auto dependency on the rise among working poor transit | For many low-income workers moving to city, public transportation is not an option By Patrick Blennerhassett [email protected] W ith the transit plebiscite fast approaching, a new campaign spearheaded by the Surrey Poverty Reduction Coalition (SPRC) is underlining the city’s deep reliance on cars for work-related transportation. Approximately 83% of employees in Surrey use a vehicle to get to work compared with 71% across Metro Vancouver. Only 13% use public transit compared with the regional average of 20%, according to Statistics Canada’s 2011 National Household Survey. “People don’t have access to adequate public transportation in Surrey,” said SPRC co-ordinator Alice Sundberg. “We know that you can save a lot of money by taking public transit. But if you don’t have access to it, or if it takes you two and a half hours to get to work via public transportation, you’re not going to use it.” Even though the tax is regressive, meaning low-income people will be more affected than higherincome taxpayers, Sundberg said her organization is urging a yes vote because good transit can be an important benefit to people Alice Sundberg, co-ordinator of the Surrey Poverty Reduction Coalition, says public transit is not an option for the city’s working poor | rob kruyt who are living in poverty. At $45,462, Surrey’s median income is below the Metro Vancouver average ($50,016), and there are approximately 14,632 households and 20,610 individuals in Surrey relying on income assistance, according to the Ministry of Social Development and Social Innovation. This represents about 23% of the 62,512 income assistance cases across Metro Vancouver. Brent Toderian, former director of city planning for the City of Vancouver, said the issue is part of a North American trend HE WAS CONSIDERED CRAZY WHEN HE SUGGESTED PHOTO BOMBING WOULD ONE DAY BE ALL THE RAGE. in which poor people are being financially pushed out of cities into suburban areas. The migration forces many low-income workers, who previously relied on public transportation, to purchase vehicles. “There’s a saying that the suburbs are no place to be poor,” Toderian said. “If you’re poor and in the inner city, you have options. If you’re poor in the suburbs, you have to own a car.” Toderian noted this trend could be applied to Surrey because the SkyTrain essentially serves only a small portion of the city. Surrey public transportation upgrades are featured in the Mayors’ Council on Regional Transportation’s wish list. “The biggest benefits [of transit] are that it allows households to reduce their car ownership – and the effect is huge,” said Todd Litman, executive director of the Victoria Transport Policy Institute. “The average household in a car-dependent community has one car for every adult, so even low-income households are spending $10,000 a year on owning and operating their car, where that same household in a multimodal community would be spending half as much.” A year’s worth of monthly transit passes in Metro Vancouver would cost an adult commuter $2,040. Toderian added the savings are possible only in suburbs with adequate public transportation as an alternative to commuting by vehicle, which Surrey does not have. “If you happen to live close to the SkyTrain you’re OK, which most don’t,” he said. “The bus systems in Surrey are challenged when it comes to being an attractive alternative to car ownership. And even if you don’t need a car to get to work, if you live near transit and take transit to work you still potentially need a car for all the other trips that you have in your life. ” He noted many North American suburbanites are finding themselves in even deeper levels of poverty now that they’ve added in longer commute times in vehicles. “And it’s not because these people don’t want transit. It’s because in many cases the suburbs have been designed to make transit unappealing.” • –With files from Jen St. Denis THERE’S A TIME TO LISTEN Hear our visionaries speak and learn what’s on the horizon, what’s hot, what’s not, and the key strategies that are taking innovative brands into the future. LOCATION Sheraton Vancouver Wall Centre 1088 Burrard Street, Vancouver DATE April 23, 2015 Full-day event Visit BCAMA.com/vision2015 to learn about our exciting lineup of speakers. REGISTRATION bcama.com/vision2015 Earlybird discount ends March 1, 2015 #BCAMAvision Brought to you in part by... Gold: Silver: Bronze: phillip chin photography 14 BUSINESSVANCOUVER February 24–March 2, 2015 AsiaPacific Malaysia’s teetering state investment fund plagued by scandal multimillion-dollar properties in the United States on behalf of the prime minister’s stepson, film producer Riza Aziz. Much of the significant reporting on the issues around the management of 1MDB has been done by The Edge, Malaysia’s bestselling business newspaper, which is owned by Tong Kooi Ong. Tong is well known in Canada as the owner of Toronto-listed Taiga Building Products Ltd., the largest wholesale distributor of building materials in Canada and California. Tong has filed a suit against Low, who Tong believes was behind a defamatory blog attack after The Edge published details of 1MDB’s troubled internal affairs. The latest reports from Kuala Lumpur are that all employees of 1MDB have been ordered to take their office-issued computers and smartphones to the company’s information technology department to have their hard drives wiped clean. The company says the move is to counter an attempted hacking of the fund’s system. But some observers have noted that when Tong’s legal action gets to examination for discovery, there will be nothing in 1MDB’s records for his lawyers to find. Tong isn’t the only one pushing back against blog attacks associated with criticism of 1MDB. Another is the prime minister’s brother, banker Nazir Razak, who has also launched legal action against Low. Nazir, head of CIMB, Malaysia’s fastest-growing bank, has had a very public falling-out with his brother Najib over the flaunting of excessive wealth by the prime minister and his wife. In January last year Nazir wrote a long article for an online business news site about their father, Malaysia’s second prime minister, Abdul Razak, and his absolute refusal to use public funds for his own and his family’s personal expenses. The 1MDB questions also spark memories of unresolved questions around the 2006 murder of Mongolian model and interpreter Altantuya Shaariibuu – who allegedly was Najib’s ex-mistress – by Najib’s bodyguards. Najib was then the defence minister, and French investigators have found his policy adviser, Abdul Razak Baginda, was paid over $200 million in bribes by the French manufacturers of three submarines Malaysia was buying for $2 billion. • VIETNAM THAILAND CHINA SOUTH KOREA and JAPAN Nuclear deal reached Remittances roll in Coup hasn’t helped economy Agency downgrades France Currency swap deal expires Sri Lanka’s new president, Maithripala Sirisena, has emphasized his move away from the dominant relationship with China under the previous administration by signing a nuclear agreement with India. Tensions between Colombo and New Delhi grew during the previous administration of Mahinda Rajapaksa, who welcomed closer ties with China. Sirisena took over the Sri Lankan administration last month. The agreement with New Delhi will allow Indians to train Sri Lankans in nuclear technology and provide for the shared management of radioactive waste, nuclear disaster mitigation and environmental protection. Several years of encouragement by the Hanoi government for Vietnamese to work abroad are paying off as the country enters the top 10 recipients of remittances. Latest figures from the Western Union company, which handles money transfers worldwide, show the country received about $13 billion in remittances last year, up from about $12 billion in 2013. A big encouragement is that recipients of remittances do not have to pay income tax on the money, nor are they required to convert the transfers into the local currency, the dong. Remittances now account for 8% of Vietnam’s gross domestic product. Last year’s military coup in Thailand, designed to end political and social upheaval dating back to 2006, has so far failed to stimulate the economy. Last year clocked up its slowest growth since 2011. Overall growth was only 0.7% last year, in line with the median estimate of analysts polled in a Bloomberg survey. Coup leader and selfappointed Prime Minister Gen. Prayuth Chan-ocha attempted to kick-start consumption with a $12 billion stimulus package. But the export of both agricultural and manufactured goods fell for the second consecutive year for the first time in over two decades. In a sign of things to come, China’s Dagong Global Credit Rating Co. Ltd. agency has downgraded France’s sovereign credit rating to A from A+. In a report last week Dagong said the debt repayment climate in France remains stable, but the economic outlook is clouded by the failure of the Paris government to pursue structural reforms. “The fiscal deficit and the debt burden ratio have climbed up further, which have weakened the government’s debt repayment capacity.” Dagong was founded about two decades ago and remains far less well known than western credit rating agencies, though it has begun to attract more attention in recent years. Officials in South Korea and Japan are playing down speculation that the ending of a bilateral $10 billion currency swap agreement has more to do with political tensions between Seoul and Tokyo than with economics. The 2001 agreement expired on February 23. The pact allowed each country to use, in an emergency, its own currency to get U.S. dollars from the other at a predetermined rate. Since she came to power two years ago, South Korea’s president, Park Geun-hye, has not had a bilateral meeting with Japanese Prime Minister Shinzo Abe, apparently because of territorial disputes and other disagreements. y meeting a repayment deadline for the first time in months, Malaysia’s troubled sovereign wealth fund, 1Malaysia Development Berhad, seems to have staved off a debt crisis that threatened the country’s entire banking system. Reports in Kuala Lumpur say Malaysian billionaire Ananda Krishnan came up with the $693 million that the fund, known as 1MDB, was due to repay by February 18 to the country’s largest bank, Malayan Banking Bhd, and a smaller financial house, RHB Capital Bhd. While the payment appears to have given 1MDB some breathing space after the fund repeatedly failed to meet debt repayment deadlines, it has done nothing to remove questions about the $14.5 billion in debts the fund has accumulated since its founding in 2009. 1MDB was created as a vehicle for investment of state profits from the country’s oil and gas resources. But it has borrowed heavily from local banks to invest in power plants. 1MDB plans a public offering of shares in these assets some time this year, with the aim of raising around $4 billion. But from the start, 1MDB has been surrounded by questions and scandal. Many of the questions stem from the fact that the fund’s “chief economic adviser” is Malaysia’s prime minister, Najib Razak. Although no direct lines are drawn, media and political criticism of the travails of 1MDB frequently include references to the extraordinary amounts of money being spent on property and luxuries by Najib’s family and close relatives. At the same time, a flamboyant young Malaysian financier, Jho Low, who persuaded Najib to set up 1MDB, has bought SRI LANKA Asian outlook JOnathan Manthorpe B Petronas Twin Towers dominate the skyline in Kuala Lumpur. Malaysia has narrowly averted a financial crisis stemming from a scandal-ridden investment fund | r.nagy/Shutterstock Jonathan Manthorpe (jonathan. [email protected]) has been an international affairs columnist for nearly 40 years. Subscribers: $49 Non-subscribers: $5 March 25, 2015 7:00am - 10:00am Pan Pacific Hotel Estimates show that close to $3 billion is lost by Canadian businesses 999 Canada Place, Vancouver annually through various types of corporate fraud. At BES: Corporate Subscribers: $49 | Non-subscribers: $59 Fraud, experts will discuss common warning signs and how you can protect your business from external and internal threats. For more information visit www.biv.com/corporate-fraud-event Sponsored by: Presented by: BUSINESSVANCOUVER February 24–March 2, 2015 15 realestate Anvil a dead weight on New West office market COMMERCIAL PROPERTY | City’s largest office tower still vacant a year after completion By Frank O’Brien The city’s office vacancy rate is now 16.8%, and more than a quarter of Class A space in the Royal City is dark [email protected] A shiny new – and empt y – of f ic e towe r h a s b e c om e a n a nv i l-l i ke weight around the neck of the New Westminster commercial market. Built on speculation by the City of New Westminster and sold to investors a year ago, the 14-storey tower has failed to attract a single tenant. The 137,000 square feet of vacant space in the Anvil Centre, now owned by CRS Group of Companies and Joseph Segal of Kingswood Capital Corp., has pulled the New Westminster office sector into negative territory for the first time in 10 years and driven the vacancy rate to the second-highest level in Metro Vancouver. The city’s office vacancy rate is now 16.8%, and more than a quarter of Class A space in the Royal City is dark, according to an Avison Young survey. Su k i Sek hon, CEO of CR S Built on speculation by the City of New Westminster, the 14-storey Anvil Centre has failed to attract any tenants Group, confirmed that no office tenants have yet signed, but added, “Interest has been very good.” The biggest office building in New Westminster, Anvil Centre is situated next to a SkyTrain station in the city’s core. Sekhon said the owners have always known it was going to be a one- or two-year run to get most of the building filled with tenants. “This is a long-term vision,” he said. “This is something we want to get leased up with a quality tenant. You don’t want to put in tenants for the sake of putting them in. We prefer to have a good tenant mix there.” A rapid lease-up, in fact, would trigger payments to the City of New Westminster, which sold the tower for $35.5 million. Under the terms of the sale, the purchasers are paying in instalments. After putting down a $5 million non-refundable deposit upon signing the purchase and sale agreement, the purchasers provided an additional $5 million in December 2014, when the sale closed (and held back another $1.5 million until some construction deficiencies are addressed). The remaining money will be paid to the city, with interest, within three years of the December 31, 2014, closing date. If the building reaches substantial leasing levels before the final instalment is due, the city will receive earlier payments on the $25.5 million still owed, explained New Westminster Mayor Jonathan Cote. Sekhon said CRS has also looked at selling rather than leasing office space in the Anvil Centre. “The building has been set up as a strata of two units per floor, but it is our intention to lease the building at this time,” he said. The city was originally working with the Uptown Property Group on the office tower, but after that company pulled out of the project the city decided to build it on its own. The Anvil Centre cost the city $41.5 million to build, but the city retained ownership of the first four floors, which is now a civic community centre. “The city is not looking for more office space,” said Cote, who described the Anvil Centre sale as “a good deal for New Westminster taxpayers.” • REITs reaping rewards of low-cost financing options investment | Interest-rate-sensitive real estate investment trusts outpacing Toronto Stock Exchange By Frank O’Brien [email protected] R eal estate investment trusts (REITs) are poised for a strong year due to lower mortgage rates, and even low oil prices could prove a boon to the traditionally conservative sector, analysts say. Canadian REITs are listed on the Toronto Stock Exchange (TSX) and with a return of 9.5% have out performed the broader S&P/TSX stock index in the BIV DaIly NewS Free. Fresh content straight to your inbox. Sign up at biv.com . past 12 months. The day after the January 21 cut in the Bank of Canada (BoC) overnight lending rate to 0.75% from 1%, volume in REIT trading rose nearly 30%. Since then, the S&P/TSX REIT index has hit its highest level in two years. “The conditions for success that propelled REIT prices higher last year are shaping up similarly for this year,” said Corrado Russo, managing director, investments and global head of securities, at Toronto-based Timbercreek Asset Management. Russo added that there is a “wall of money looking to invest in real estate.” Interest rates represent one of the highest costs for REITs, and it is expected that many will refinance their long-term debt if commercial mortgage rates continue to come down. Robert Palmer, CFO of Calgarybased Northern Properties Real Estate Investment Trust (NPR), said NPR is holding up to 400 mortgages at any time, typically with 10-year terms. NPR’s portfolio includes multi-family properties in Abbotsford, on Vancouver Island and in Fort St. John. Palmer said commercial lending rates have come down since the new BoC rate was set; 10-year term mortgages on its multifamily rental buildings, for example, are now in the 2.4% range. With 25% of NPR’s properties in Alberta, including the oilands centre of Fort McMurray, he said the direction of oil prices is also a concern. “Would we be happier with $100 oil than with $50 oil? Absolutely,” Palmer said, “but no one really knows where the oil price is headed. “We have our plans in place and we are maintaining a conservative balance sheet.” Cheaper oil could help the bottom line of some REITs, according to Russo: “Lower oil prices may lead to lower operating expenses [for commercial property], resulting in higher net operating income and earnings growth.” • FiRst CLAss OFFiCe sPACe FOR LeAse Under $1400 per sq.ft. gross rent up to 77,000 sq.ft. on two floors Fraserwood Place, Richmond CALL NOW ! Cliff Raps: 604-531-1685 ext 223 [email protected] TAURUS Commercial Real Estate Services Ltd tauruscommercial.ca 16 BUSINESSVANCOUVER February 24–March 2, 2015 REalestate greater vancouver | Home prices slip as number of sales climbs On the rise A total of 3,125 homes were sold in January across Greater Vancouver, up 5.7% compared with December 2014 and 8% year-over-year, according to Canadian Real Estate Association data released February 17 Cooled off While sales grew in the region, the average residential sales price dipped in the month. The average home sold for $825,233 in January – down 2.6% compared with $847,661 in December Provincial price tag Across B.C., a total of 7,240 homes were sold for an average sale price of $589,650, which is an increase of 0.3% compared with the previous month. Unit sales in Greater Vancouver accounted for 63% of the provincial total source: Canadian Real Estate Association Aquilini family presses on with Washington state wine venture Real Estate Roundup Peter Mitham Wining combinations When the Aquilini Investment Group successfully trumped other bidders for 670 acres of vineyard land in Washington state in November 2013, there was a lot of speculation about its plans. Buzz about the deal still continues, as a recent visit to properties surrounding the purchase in the rapidly expanding Red Mountain viticultural area highlighted. But the Aquilinis themselves have forged on, tapping local expertise to get the best sense of what to plant and prepping a first batch of wine with local grapes bought for the purpose. Barry Olivier, who as president of Aquilini Brands has been charged with developing the new venture, attended the recent Washington Association of Wine Grape Growers annual meeting to forge links with an industry in which Aquilini, by virtue of its real estate holdings, How to grow your business 1301 20141007 page Category news BUSINESSVANCOUVER February 10–16, 2015 winners | Minerva Foundation co-founder Nancy McKinstry leading the class of 2015 in BIV’s annual influential women in business awards | pages B1–B16 1 ExclusivE winE offEr to all Biv suBscriBErs High quality wines, at an attractive price – ideal for corporate gifts Call Frank Gigliotti | 604-988-4470 Daily business news K biv.com February 10–16, 2015 | Issue 1319 | $4.00 iNside A plan to redevelop an airstrip in Washington state’s Port of Kennewick reflects ideas seen in many mixed-used communities in B.C. | Duany Plater-Zyberk and Co. attending the recent Washington Association of Wine Grape Growers meeting, where (with apologies to Jane Austen) the truth universally acknowledged is that a single blade of grass in possession of its roots must be in want of paving. Indeed, it has been a while since this columnist traipsed over such vast expanses of parking lot merely to reach a mall. But in a nod to contemporary urban planning, the Port of Kennewick hopes to redevelop a local airstrip a short distance from those acres of parking lots into a compact, European-style mixed-use community. Drafted by planning consultants Duany Plater-Zyberk and Co., which also had a hand in the early stages of planning for Vancouver’s East Fraserlands (which Wesgroup is developing as the 130-acre River District), the plan for Kennewick’s airfield calls for a mix of housing types including live-work studios, a market area, a performing arts centre and connections accommodating pedestrians and bicycles as well as motor vehicles. It’s a stark contrast to what currently exists in the area, but, according to local officials, it appears to be “the only alternative that wouldn’t require a property tax increase.” Indeed, early projections suggest that redevelopment of the property could yield up to 3,380 jobs and US$408 million in “new (taxable) buildings – meaning new revenues for police, fire, hospital, libraries, schools, parks and other services.” It’s also familiar to those who Meanwhile, in Idaho … Vancouver developers who think they’ve got approval-time issues with municipalities will empathize with the homebuilder from Idaho whose tale of woe poured out over breakfast at a stop on this columnist’s recent stateside sojourn. Talking shop with colleagues from Oregon, the builder groused about inconsistencies in estimates to receive permits. In his part of Idaho, one planner might tell you permitting will take nine months. But if you continue to discuss the file, you might just find permitting will really wrap up in 60 days. Of course, even nine months is breakneck speed to some developers in the Vancouver area. Polygon Homes Ltd. president Neil Chrystal recently told the Urban Development Institute that approval times of up to 30 months aren’t uncommon in some municipalities, while the six months required at the University of British Columbia is an anomaly. • [email protected] Counterpoint interiors inC. Design | BuilD | Relocate | Facilitate “I asked John Freyvogel and Rob Chasmar at Colliers International who they would recommend to get a ‘Change-of-Use’ for my client. They both said Brian Carroll at Counterpoint. His team went to work and got the change! Amazing performance!” Adding up the economic impact of the Games on the fifth anniversary of B.C. hosting the biggest sporting event in its history | Page 5 years on resources real estate tourism Troubling tailings tale Storing cash flow Upbeat over down dollar Concern raised over other mining projects following Mount Polley tailings pond disaster probe | Page 6 B.C. expertise Washington state’s Tri-Cities is, quipped a B.C. winemaker have watched Metro Vancouver grow in recent years, underscoring both the example the region offers other areas as well as the relatively high quality of life that development delivers locals. Eric Poon, Macdonald Commercial RES 5 2010 Olympic Games legacy will become a significant player. Plans call for high-density plantings this spring on 500 acres on Red Mountain, as well as the development of 300 acres in the adjacent Horse Heaven Hills viticultural area where the company also recently acquired property. “We’re approaching this with humility and trying to learn; we’re trying to do everything right in the service of quality,” Olivier said recently. “We’re a very ambitious company and we want to succeed.” But the family’s expertise in real estate – something local vintners said they’d read about in this and other papers – is also something the Washington wine industry hopes will come in handy. Red Mountain is wrapping up a number of significant infrastructure projects including irrigation and road networks, and a number of new wineries have been built with more planned. But it lacks accommodation to match the growth. Many in the industry hope the Aquilinis will use some of their land to help foster tourism in the area, perhaps by building a hotel or other amenities that give tourists a place to stay. More B.C. real estate investment dollars drawn to rising revenue flow from self-storage units | Page 14 Coast Hotels CEO Robert Pratt among B.C. hoteliers positive about depressed dollar and low oil prices | Page 23 Tenant Improvements turnkey 7 71114 PM40069240 78312 R8876 6 05 RetuRn undeliveRable Canadian addResses to CiRCulation depaRtment: 102 east 4th avenue, vanCouveR, b.C. v5t 1g2. Do you feel loved by your copier provider? Switch to Steelhead and feel the love. copy print scan .net fax sales service 604-473-9100 Interior Design - Construction Management. When you need to be impressed! Brian Carroll, Ken Ly, Taylor Carroll 604-880-2248 [email protected] | www.counterpoints.com Accelerating success. RETAIL 15230 84th Avenue Surrey Freestanding convenience centre. Main floor retail & second floor residential. Mike Grewal Brent Heed $3,100,000 13990 92nd Avenue Surrey Freestanding mixed-use commercial building on a corner lot. Mike Grewal Brent Heed $1,550,000 18438 64th Avenue Surrey Highly visible unit, can be demised into smaller units. 3,308 SF available. Mike Grewal Dylan Sohi From $28.00/SF 3264 152nd Street Morgan Gate Surrey 703 - 4,526 SF of brand new, high profile retail space. From $30.00/SF Dylan Sohi Sheldon Scott* INVESTMENT 14187 - 14199 62nd Avenue Surrey 19970 & 19976 80th Avenue Langley New mixed-use opportunity. Anchored by Pharmasave & medical centre. 4.74 acre mixed-use development in Langley’s Willoughby community. Mike Grewal Brent Heed $5,500,000 Morgan Dyer* Hart Buck $7,500,000 32721 Logan Avenue Hillside Car Wash Mission Includes tunnel, 7-bay self-serve, drivethru, 3-bedroom home and more. Casey Pollard* Oliver Omi $1,900,000 1859 Columbia Valley Highway Aquadel Gardens at Cultus Lake 25.5 Acres - Aquadel has received third reading for 103 residential lots. Sale Hart Buck Marshall MacLeod INDUSTRIAL ed uc 2n 54th Avenue dS tre et e Avenu Surrey 5652 Landmark Way Spire Commerce Centre Surrey Can 25th 19402 54 Avenue 192nd Street t e re St P 19 h 8t ric 18 ed eR Surrey ay 18727 25th Avenue nP acifi cR ailw Richmond adia 23080 Hamilton Road 23,625 SF freestanding facility on 1.58 acres in Richmond. Sale/Lease Craig Kincaid-Smith 13139 80th Avenue Surrey Premier property up to 80,000 SF in prime central Newton location. $7.50/SF Chris Morrison* Industrial lots in Campbell Heights. 1.03 - 4.15 acres. Sale 7930 130th Street Malcolm Earle* Surrey Centrally located 3.19 acre heavy industrial site, cleared and leveled. $3,500,000 9255 194th Street Randy Heed* Malcolm Earle* Surrey Excellent quality and well maintained freestanding building; 17,400 SF total. 90,000 SF first class distribution facility in central Port Kells. Chris Morrison* Vito DeCicco* Chris Morrison*, Chris Brewster $7.75/SF Vito DeCicco* $2,750,000 Vacant and tenanted strata warehouses. 2,111 SF up to 8,471 SF available. Sale Chris Brewster 4937 275th Street Langley Freestanding facility on 2.34 acres in Gloucester. 48,038 SF available. Lease Craig Kincaid-Smith This document/email has been prepared by Colliers International for advertising and general information only. Colliers International makes no guarantees, representations or warranties of any kind, expressed or implied, regarding the information including, but not limited to, warranties of content, accuracy and reliability. Any interested party should undertake their own inquiries as to the accuracy of the information. Colliers International excludes unequivocally all inferred or implied terms, conditions and warranties arising out of this document and excludes all liability for loss and damages arising there from. This publication is the copyrighted property of Colliers International and /or its licensor(s). © 2015 All rights reserved. This communication is not intended to cause or induce breach of an existing listing agreement. Colliers Macaulay Nicolls Brokerage Inc. (Vancouver). *Personal Real Estate Corporation. PO #11900. 200 Granville Street, 19th Floor, Vancouver, BC, V6C 2R6 | +1 604 681 4111 | www.collierscanada.com 18 BUSINESSVANCOUVER February 24–March 2, 2015 finance CRH Medical (TSX:CRH) weekly price gain Population growth varies sharply among B.C. regions Data Points Bryan Yu Large Canadian urban centres typically attract the most international immigrants, and a rebound in the past year, perhaps due to the fading impact of the recession and a higher number of nonpermanent residents, underpinned population growth in Metro Vancouver D etailed 2014 population estimates released this week by Statistics Canada showed significant variation among regional areas. As we already know from previous data releases, B.C.’s population grew 1.1% on a July-to-July basis in 2014. However, on a regional basis it was a mix of high- and lowgrowth performances. Among larger metro areas, growth of 1.3% in Metro Vancouver more than offset a tepid growth rate of 0.3% in Abbotsford-Mission in the Lower Mainland-Southwest. Growth in Kelowna (1.8%) provided the strongest lift in the Thompson Okanagan, while Victoria’s expansion was muted at 0.3%. In comparison to other census metropolitan areas across Canada, population growth in Kelowna was fifth-highest in the country, and Vancouver was ninth. Victoria and Abbotsford-Mission were among the lowest. Excluding large metro areas, B.C.’s population climbed by 0.9%. While population estimates will be revised as more complete information is made available, wide regional variations can be traced to broad economic and migratory trends. Large Canadian urban centres typically attract the most international immigrants, and a rebound in the past year, perhaps due to the fading impact of the recession and a higher number of non-permanent residents, underpinned population growth in Metro Vancouver. Meanwhile, interprovincial inflows buoyed growth in Kelowna. That could reflect an increased flow of Albertans to B.C., which outpaced growth in Alberta-bound B.C. residents. In northern B.C., improvement in economic activity has yet to translate into substantial increases in permanent residents, suggesting labour market demands are in part being met by a mobile workforce. There were exceptions: the northeast gas patch reported significant growth, while Kitimat-Stikine also grew at a modest pace of 1.2%. • D 32% Meadow Bay Gold (TSX:MAY) weekly price gain B.C. workers return from Alberta D 30% Growth is highest in B.C.’s northeastern gas patch and in the province’s Okanagan region B.C. regional population growth The province’s population grew a modest 1.1% between July 2013 and July 2014 B.C. Northeast Thompson Okanagan Lower Mainland/Southwest Nechako Vancouver Island/Coast Kootenay North Coast Cariboo -0.5 0 0.5 1 1.5 2 2.5 Sources: statistics canada, central 1 credit union Bryan Yu is senior economist at Central 1 Credit Union. Tourism Vancouver/Dannielle Hayes NomiNatioNs Now opeN! Business in Vancouver and the Chartered professional accountants of BC have once again partnered to recognize and celebrate the top CFos in British Columbia. winning CFos will be profiled in Business in Vancouver on may 12th and honoured at a gala dinner on June 2 where each winner will share their leadership lessons to an audience of Vancouver’s business community. Visit www.biv.com/events/cfo to submit your nomination online. Nominations deadline is march 27th, 2015. Presented by: gold sPonsors: 3 Per cent, 2014 silver sPonsor: general sPonsors: finance D 27% Dejour Energy (TSX:DEJ) weekly price gain F 24% CounterPath Corp. (TSX:CCV) weekly price drop WesternOne (TSX:WEQ) weekly price drop Manufacturing rises to multi-year high The sector is benefiting from the recovering U.S. economy and low Canadian dollar, although oil’s downturn has hurt companies that service the oil and gas sector chung chow B.C. annual manufacturing shipments In 2014, manufacturing sales climbed 6.6% to $42.8 billion 50,000 20% 15 Per cent 5 30,000 0 20,000 -5 -10 10,000 -15 -20 $(millions) 40,000 10 2001 2003 2005 2007 2009 Year-over-year growth (L) 2011 2013 Sales (R) Sources: statistics canada, central 1 credit union B.C. manufacturing shipments Dollar-volume sales climbed 2.9 per cent in December to a seasonally adjusted $3.72 billion $(millions) 4,000 February 24–March 2, 2015 SouthGobi Resource (TSX:SGQ) weekly price drop 3,000 2007 2008 2009 2010 2011 Seasonally adjusted 2012 2013 2014 Trend Sources: statistics canada, central 1 credit union Subscribe today! In Print or Online Digital Edition Lists Now Available www.biv.com/subscribe 604-688-2398 [email protected] We Don’t Cut Corners ...We Clean Them! Power Sweeping Power Scrubbing Power Washing Cleaning solutions backed by the most trusted name in business since 1994 www.valleypowersweep.com Phone: Main: 1-888-423-8003 • Lower Mainland: 604-221-8003 Fraser Valley: 604-792-8003 email: [email protected] 19 F 18% INSIDERTRADING The following is a list of stock trades made by corporate executives, directors and other company insiders of B.C.’s public companies filed the week ending February 18. The information comes from a compilation of required reports filed with the BC Securities Commission obtained from DisclosureNet.com. Insider Rodney Alexander Cooper, director Company: Klondex Mines Ltd. (TSX:KDX) Shares owned: 115,410 Trade date: February 11, 12, 13 Trade total: $282,500 Trade: Sale of 110,000 shares at prices ranging between $2.53 and $2.58 per share Insider John Conlon, director Company: Golden Reign Resources Ltd. (TSX:GRR) Shares owned: 9,026,557 Trade date: February 11, 17 Trade total: $97, 895 Trade: Acquisition of 1,398,500 shares at a price of $0.07 per share Insider Stan BrackenHorrocks, director Company: Canfor Pulp Products Inc. (TSX:CFX) Shares owned: 1,000 Trade date: February 13 Trade total: $84,300 Trade: Sale of 5,000 shares at a price of $16.86 per share Insider Bruce Barbour, officer Company: Great Canadian Gaming Corp. (TSX:GC) Shares owned: 4,905 Trade date: February 6 Trade total: $68,600 Trade: Sale of 3,500 shares at a price of $19.60 per share Insider Kulwant Malhi, officer Company: Cannabix Technologies Inc. (TSX:WPO) Shares owned: 4,352 Trade date: February 11 Trade total: $55,000 Trade: Sale of 100,000 shares at a price of $0.55 per share 3,500 2,500 F 19% BUSINESSVANCOUVER Insider Geoffrey Andrew Cooke, officer Company: Russell Breweries Inc. (TSX:RB) Shares owned: 932,000 Trade date: February 12 Trade total: $46,600 Trade: Acquisition of 932,000 shares at a price of $0.05 per share Insider Raymond James Saunders, director Company: Search Minerals Inc. (TSX:SMY) Shares owned: 14,399,000 Trade date: February 13, 18 Trade total: $39,680 Trade: Acquisition of 992,000 shares at a price of $0.04 per share Insider Wally Elmer Boguski, director Company: Sierra Iron Ore Corp. (TSX:NAA) Shares owned: 1,602,572 Trade date: February 10, 11, 12, 13, 17 Trade total: $34,900 Trade: Sale of 175,000 shares at prices ranging between $0.19 and $0.21 per share Insider Mark Gerard O’Dea, director Company: True Gold Mining Inc. (TSX:TGM) Shares owned: 10,147,597 Trade date: February 9, 11, 12 Trade total: $32,700 Trade: Acquisition of 150,000 shares at prices ranging between $0.19 and $0.27 per share Insider Paul Pieter Van Eeden, director Company: Kobex Capital Corp. (TSX:KXM) Shares owned: 5,135,000 Trade date: February 11, 17 Trade total: $24,250 Trade: Acquisition of 50,000 shares at prices ranging between $0.48 and $0.49 per share Insider Larry Johnson, director Company: Select Sands Corp. (TSX:SNS) Shares owned: 50,000 Trade date: February 11 Trade total: $21,600 Trade: Sale of 180,000 shares at a price of $0.12 per share • Women’s Symposium Effecting Change, Closing the Gender Gap Everyone is welcome to attend! Speakers Include: Gordon Black, Trusting Your Instincts Presented by Odlum Brown Limited Julian Barling, The Science of Leadership Presented by RBC Global Asset Management/Phillips, Hager & North Investment Management Cameron Phillips, Valuing Men in the Workplace Carol Kinsey Goman, Body Language for Leaders Janet Graham, Lessons Learned by the Babes on Bay Street March 5, 2015 8:30 am - 5:00 pm Fairmont Waterfront Hotel Register at cfavancouver.com 20 BUSINESSVANCOUVER February 24–March 2, 2015 finance Head to head Does the provincial government’s budget address the key economic issues facing B.C. in 2015-16? A responsible budget that does little to move the economy forward Niels Veldhuis The government made no mention of undoing the “provisional” one-percentage-point increase to the general corporate income tax rate introduced in 2013 to help eliminate the deficit A gainst the backdrop of depressed commodity prices, a sluggish economy and fiscal mayhem in many other provinces (think Alberta and Ontario), there are parts of B.C.’s 2015 budget that are worthy of praise. Relatively speaking, there’s little doubt that the province has been much more fiscally prudent than others. While responsible, the budget will do little to propel B.C.’s economy forward. Let’s start with the good news. B.C. now belongs to an exclusive “balanced-budget club” in Canada, which by the end of budget season may consist of only two governments (with Saskatchewan likely being the other). This result is due in large part to program spending constraint shown over the past seven years. Program spending growth has been held to an average rate of 2.5% since 2008-09. What’s more, the government is recommitting to constraining spending over the next three years, keeping average program spending growth well below increases in population growth and inflation. Credit the government for also allowing the temporary increase to the top personal income tax rate to expire at the end of 2015. In 2013, the Liberals introduced a new top personal income tax rate to reduce the deficit. Letting the higher rate expire shows, in part, a recommitment toward a more competitive personal income tax system. Despite the balanced budget, provincial net debt continues to rise (by an expected $3.1 billion over the next three years). B.C. can balance its budget and still accumulate debt because the province separates annual spending (the operating budget) from long-term spending (the capital budget). And while this growing debt could pose serious fiscal challenges in the future, it is a materially different problem than those of other provinces. Take Ontario, where the province’s debt has grown by $117 billion since the 2008-09 recession with 66% directly attributable to borrowing to fund dayto-day expenses – not investments in infrastructure. Unfortunately, there are problematic aspects of the budget to recognize. For starters, the government made no mention of undoing the “provisional” one-percentage-point increase to the general corporate income tax rate introduced in 2013 to help eliminate the deficit. In addition, the budget contained no plan to offset the dramatic increase in business taxes associated with reintroducing the PST. Almost all of B.C.’s competitors have moved to a value-added sales tax like the now-abolished HST, which exempts business inputs and lowers the cost of investment. The government’s own expert panel recommended introducing a refundable investment tax credit equal to the PST paid on machinery and equipment to improve B.C.’s competitiveness and investment climate. Failure to address this problem has negative long-term economic implications. A recent University of Calgary study found that B.C. now has one of the highest overall tax rates on new business investment in the country (27.5%). Without more competitive tax policies, B.C. risks losing investment and jobs that may gravitate elsewhere. Reforming government spending could create more fiscal room needed for tax changes. But the status quo prevailed here, too. Consider health care, which consumes an ever larger portion of program spending (now 44%) and is slated to increase annually at 2.8% over the next three years. While B.C. is getting accolades for containing increases in health-care spending, there is nary a mention of reforming how services are financed and delivered. The goal should be to spend less and improve the quality of health care. To do so, we should look at adopting policies commonly used in other universal health-care systems around the world. Finally, while the increase in education spending is modest at 1.7% on average over the next three years, it ignores the fact that enrolment in B.C. public schools continues to decline. While the Liberals should be commended for B.C.’s exclusive membership in the balanced-budget club, the government missed an opportunity to institute changes that would lead to a better economic future. • Niels Veldhuis ([email protected]) is president of the Fraser Institute. This commentary was co-written by Charles Lammam, the institute’s associate director of fiscal policy. Balanced, but also corrosive to critical services in the province Irene Lanzinger Even more disturbing, total employment for the province is only now reaching the level it was in 2009, a reminder that despite the hype associated with the government’s Jobs Plan of 2012, progress in terms of employment growth still has a long way to go BC ’s 2015 budget is stunning, but not in a good way. Despite Finance Minister Mike de Jong’s talk of prudence and balance, the document he tabled in the legislature will reinforce inequities, undermine critical services and do little to position B.C. for sustainable growth in the years ahead. At a macro level, the finance minister gives only passing mention to the fact that the B.C. economy barely resembles the hype that his government claims as a hallmark of their prudent oversight. Economic growth is forecast to average just a bit over 2% this year and next, a rate that looks more like treading water than moving forward. And despite several trade missions and all the talk in last year’s budget about a proposed royalty regime for liquefied natural gas (LNG) development in the province, this budget holds little prospect that LNG plants will be built any time soon or that the much anticipated prosperity fund will take shape sometime during their current mandate. The same underwhelming picture is there on the jobs front. Employment growth is projected to be weak. Even more disturbing, total employment for the province is only now reaching the level it was in 2009, a reminder that despite the hype associated with the government’s Jobs Plan of 2012, progress in terms of employment growth still has a long way to go. But budgets also detail government priorities, and on that score this budget holds some disconcerting news. For the richest 2% of British Columbians, the budget documents reveal that they will enjoy a tax break, one estimated to be worth $227 million. When the high-income surtax was introduced in 2013, the finance minister said it was done to ensure that affluent British Columbians pay their fair share into the provincial treasury. Had the government opted to keep the surtax, it could have helped finance a broad range of public services, reduce health-care wait times, introduce a poverty reduction plan, make post-secondary education more accessible or ensure the government had the capacity to provide strong stewardship of our land and water resources. Instead, the government has decided that “paying their fair share” was so two years ago, and, as a result, B.C. will reverse course on the only modest steps toward progressive tax reform in over a decade. That theme of reversing course is also evident in the range of user fee increases that are part of this budget. Medical Services Plan premiums are slated to increase, a move that will hit middle-income earners. BC Hydro rates are also slated to increase by as much as 25% over the next few years. The budget documents did have some good news for lower-income families. After much protest and pressure by community groups, the province has finally agreed to end the clawback on child support payments for single parents on welfare. The change will cost the provincial treasury approximately $13 million, which amounts to about 5% of what was given to B.C.’s wealthiest households through the elimination of the high-income surtax. However, cutting $4 million from the family maintenance program will make it more difficult for parents to get the money they’re owed. The finance minister devoted a lot of time to celebrating the fact that the 2015 budget continued to show surpluses. There’s no denying his math on that point. In fact, if you add in his contingencies and forecast allowances, de Jong is sitting on close to $1 billion in fiscal capacity that his government has decided not to deploy. Yet it’s the vast majority of British Columbians who could use some of that capacity to improve conditions in their communities, strengthen the important public services that make B.C. a better place to live and give opportunity to younger citizens to get the skills they need to succeed. Mr. de Jong’s budget is not prepared to make any of those investments. Prudence and balance may sound impressive in a budget speech, but they do little to build the kind of province we want. B.C. deserves better. • Irene Lanzinger ([email protected]) is president of the BC Federation of Labour. Head to Head runs monthly. MORE THAN READY CLIMB THE CORPORATE LADDER Work your way to the C-suite. The BCIT School of Business can help you find a career you’ll love so you can succeed in today’s evolving business world. Apply today. bcit.ca/business BUSINESSVANCOUVER February 24–March 2, 2015 profile 22 Bill Lui | Owner, One Faith Vineyards Richard lam B.C. vintner cultivates Asian market By Peter Mitham [email protected] Mission To produce first-growth B.C. wine Assets 30 years’ business experience in Asia Yield One Faith, Canada’s highest-priced debut wine R einvestment is the catchword of the B.C. wine industry. Twenty-five years ago, after the pullout of vines that accompanied the Canada-U.S. Free Trade Agreement, the sector rebuilt itself from scratch, and a decade later an influx of cash from executives in the financial, oil and tech industries fuelled a second wave of growth. Now, a new tide of investment is rising in the Okanagan. Capital from China is flowing in, brought by new immigrants and formerly expat Canadians who have returned to this country familiar with the opportunities Asia presents. Among the new investors is Bill Lui, who spent two decades in his native Hong Kong manufacturing health-care products for sale at some of the world’s biggest and best-known retailers, including Walmart, Walgreens, Canadian Tire and Shoppers Drug Mart. Selling the manufacturing business in 2005 and returning to Vancouver, he dreamed of producing wines similar to those he had come to know and love during business dinners in Asia. If icewine was Canada’s flagship beverage overseas, Lui knew the industry was capable of more. “The Okanagan is a new wine region that has a lot of potential, to be introduced around the world,” he said over a glass of the debut wine from his latest venture, One Faith Vineyards. “I want to tell people in Asia that Canada can make good wine. … This is my faith, that I can help promote Canadian wine. I believe this wine has the structure, has the quality, has every characteristic that people in Asia will say, ‘Wow, this is good.’” But if Lui’s goals are lofty, so is the image his wine projects. The initial release, in a hefty bottle bearing an elegant label, sold for $495 per three-bottle continued on page 23 profile B.C. Vintner Continued from page 22 case – or about $165 a bottle, the highest price ever asked for a newly released British Columbia wine, let alone a debut release from an untested winery. Harry McWatters garnered headlines for releasing Sumac Ridge Estate Winery’s red blend Pinnacle at a mere $50 in 2003, and more recently LaStella Winery in Osoyoos has been commanding $100 for its Maestoso. Lui, however, positions his wine as “first growth,” a term that traces its origins to the official Bordeaux classification of 1855, an exclusive list of topranked wines that includes just five châteaux: Château Latour, Château Lafite Rothschild, Château Margaux, Château HautBrion and, most recently, Mouton Rothschild. “I want my wine to be first growth,” Lui said. “I need a slogan for myself. When I go market my wine in Asia, I would tell them this is Canadian first growth.” It’s an ambitious claim, especially in the New World; producers in California’s Napa Valley, includ i ng Harlan Estate a nd Screaming Eagle, have achieved the distinction – but a winery claiming the honour for itself is another question. Still, Lui asks, “They have first growth in Napa; why can’t we have first growth in Canada?” This is my faith, that I can help promote Canadian wine  Bill Lui owner, One Faith Vineyards The wine has won a high-profile endorsement, however. Tasting the wine in Florence, Italy, last spring courtesy of Vancouver wine educator James Cluer (a consultant to the project), U.K. wine writer Jancis Robinson was so taken by its presentation and character that she declared, “Easy to see how it has become a cult wine in B.C.” “A very fancy full-colour brochure gave me the impression that it was already firmly established,” she told Business in Vancouver. The affirmation encourages Lui, who believes Asia needs to see – and taste – Canada’s wine at its best. “Our premier is telling us to export. If you don’t have the right product, how do you export?” he asked. The role of vintner is new for Lui, who speaks about his wines from Cluer’s tasting notes. Lui came to Canada in 1968 at the age of 10 and received his bachelor’s degree from Wilfrid Laurier University in Waterloo UPCOMING EVENTS in 1979, majoring in chemistry. He worked for Philips Electronics Ltd., then moved to Taiwan as marketing manager for a computer component manufacturer. He stayed 10 years, married, then moved to Hong Kong and started his own company manufacturing private-label medical devices – everything from thermometers and blood pressure monitors to massage pads. Setting up a factory in Guangdong the year of the protests in Tiananmen Square was an eerie experience. “It was so quiet, nobody was there. I was a little scared,” he said. “But when things are quiet, it’s easier for me to develop business. Because nobody went in, I could go in.” An entrepreneur at heart, Lui says he’s willing to spare no expense in the development of his One Faith brand and the production of premium wines to rival those of the Old World. Harry McWatters’ vineyard on Black Sage Road, tended by veteran viticulturist Richard Cleave, supplied the grapes. Napa winemaker Anne Vawter flew in to oversee production (One Faith doesn’t have its own premises so it secured space at an existing facility). Lui’s own training was acquired at the first-growth châteaux of France and courses at the University of California, Davis. He’s got the technical aspects covered, and the cash to get Register online, boardoftrade.com/events B.C. Tech Forum: Leapfrogging Innovation to Business Revolution Presenting in partnership with: BUSINESSVANCOUVER February 24–March 2, 2015 One Faith’s logo borrows elements from B.C.’s coat of arms | Richard lam things right. But why the Okanagan; why not California or even France? Lui acknowledges it would likely be simpler. “I have the luxury to go anywhere. I could make wine in Bordeaux. … I have the financial backup to do it,” he said. “[But] I don’t want it to be like it was before, where 25 days of my time was in China, or 10 days in Europe and a few days in the States looking for business. I want to stay close to my family [in Vancouver].” Winemaking, he says, has given him a freedom he never had – freedom to golf, volunteer at his daughter’s school and spend time with his family. Meanwhile, he hopes his connections in Asia will advance the reputation of the Okanagan wine industry, alongside the likes of Osoyoos Larose, Painted Rock Estate Winery and others. “I can use my experience, my connections, to make things happen,” he said. “But we need a lot of people like Painted Rock, myself … in order to promote Canadian wine. You cannot just have one guy go.” • 5 Reasons why you should join The Vancouver Board of Trade Canada’s most active networking organization Friday March 20, 2015 | 7 a.m. − 12:10 p.m. Exclusive benefits and savings OPENING REMARKS KEYNOTE The Honourable Amrik Virk Where no Business has Gone Before More than 100 events per year Minister of Technology, Innovation and Citizens’ Services PANEL TOPICS Fast Growth Homegrown Champions Interactive Startup Pitches: Made in B.C. Business Solutions 23 Chris Hadfield Astronaut, First Canadian Commander of the International Space Station (2013) 30+ free receptions each year World class speakers Call 604-640-5476 Community Engagement Partner: *Offer valid until March 1, 2015. Payment based on (Ecomp 1-10, 1) a one-year membership at $855.00 + GST. Enrolment fees will apply. Contact us today for more information on pricing. Minimum one-year agreement Renewals will automatically be made at year-end. boardoftrade.com 24 BIVLIST BUSINESSVANCOUVER February 24–March 2, 2015 Biggest wineries in in B.C. B.C. BiggestVolume wineries of wine produced in litres in 2013 RANKED BY | Ranked BY | Volume Rank '15 1 2 3 4 5 6 6 8 9 10 11 12 13 14 15 16 17 17 19 20 20 of wine produced in litres in 2013 Winery Top local executive(s) Gray Monk Cellars Ltd 1055 Camp Rd, Lake Country V4V 2H4 P: 250-766-3168 F: 250-766-3390 www.graymonk.com Quails' Gate Winery 3303 Boucherie Rd, West Kelowna V1Z 2H3 P: 250-769-4451 F: 250-769-3451 www.quailsgate.com Sumac Ridge Estate Winery 17403 Hwy 97 N, Summerland V0H 1Z0 P: 250-494-0451 F: 250-494-3456 www.sumacridge.com Inniskillin Okanagan 7857 Tucelnuit Dr, Oliver V0H 1T2 P: 250-498-4500 F: NP www.inniskillin.com Chaberton Estate Winery 1064 216 St, Langley V2Z 1R3 P: 604-530-1736 F: 604-533-9687 www.chabertonwinery.com Tinhorn Creek Vineyards 537 Tinhorn Creek Rd, Box 2010, Oliver V0H 1T0 P: 250-498-3743 F: 250-498-3228 www.tinhorn.com Burrowing Owl Estate Winery 500 Burrowing Owl Pl, Oliver V0H 1T1 P: 877-498-0620 F: NP www.bovwine.ca CedarCreek Estate Winery 5445 Lakeshore Rd, Kelowna V1W 4S5 P: 778-738-1020 F: 250-764-2603 www.cedarcreek.bc.ca Lulu Island Winery 16880 Westminster Hwy, Richmond V6V 1A8 P: 604-232-9839 F: 604-232-9836 www.luluislandwinery.com Hester Creek Estate Winery 877 Road 8, Box 1605, Oliver V0H 1T0 P: 866-498-4435 F: 250-498-4461 www.hestercreek.com Blasted Church Vineyards 378 Parsons Rd, Okanagan Falls V0H 1R5 P: 250-497-1125 F: 250-497-1126 www.blastedchurch.com See Ya Later Ranch 2575 Green Lake Rd, Okanagan Falls V0H 1R0 P: 250-497-8267 F: 250-497-8073 www.sylranch.com Mt. Boucherie Estate Winery 829 Douglas Rd, Kelowna V1Z 1N9 P: 250-769-8803 F: 250-769-9330 www.mtboucheriewinery.com Robert Heiss, operations manager Poplar Grove Winery 425 Middle Bench Rd N, Penticton V2A 8S5 P: 250-493-9463 F: 250-492-9439 www.poplargrove.ca Nk'Mip Cellars 1400 Rancher Creek Rd, Osoyoos V0H 1V0 P: 250-495-2985 F: 250-495-2986 www.nkmipcellars.com St Hubertus & Oak Bay Estate Winery Ltd 5205 Lakeshore Rd, Kelowna V1W 4J1 P: 250-764-7888 F: 604-764-0499 www.st-hubertus.bc.ca Winemaker(s) Majority owner(s) Total acreage/ In production Year founded Volume in litres '13/'12 George Heiss Jr., Roger George Heiss Sr., Robert Heiss, Western Canada/ Wong Trudy Heiss, George Heiss Jr. Pinot Gris, Latitude 50 White and Steven Heiss Tony Stewart, CEO and Nikki Callaway Stewart family Across Canada, the Pacific Northwest proprietor and Asia/ Pinot Noir and Chardonnay Jody Levesque, brand Jason James Constellation Brands Canada/ manager Cabernet Merlot, Gewürztraminer, Stellers Jay Brut Derek Kontkanen, winemaker Derek Kontkanen Constellation Brands Western Canada / NP 75/ 75 1982 662,500/ 720,000 215/ 210 1989 600,000/ 550,000 120/ 120 1981 585,000/ 585,000 27/ 27 1994 436,500/ 315,000 Eugene Kwan, proprietor Barbara Hall B.C. only/ Bacchus, Chaberton White, Chaberton Red, Valley Cab 55/ 50 1991 387,335/ 317,000 Kenn Oldfield, chair, Sandra Oldfield, CEO, president, winemaker Jim Wyse, founder and proprietor, Chris Wyse, president Scott Locke, general manager Sandra Oldfield, Korol Bob and Barb Shaunessy, Kuklo Kenn and Sandra Oldfield, Shaun Everest David Saysomsack Wyse family (Jim and Midge Wyse, proprietors) Western Canada1/ NP 150/ 1302 1994 360,000/ 340,000 NP/ NP 185/ 180 1993 360,000/ 300,000 Darryl Brooker VMF Estates B.C. (90%), Alberta/ 110/ Pinot Noir, Merlot, Chardonnay, Pinot Gris 110 1986 342,000/ 411,000 Allison Lu, director John Chang John Chang Asia; export 80%, retail 20%/ NP 80/ NP 2001 330,000/ 270,000 Curt Garland, owner, Mark Sheridan, general manager Robert Summers Curt Garland B.C., Western Canada/ NP 95/ 75 1996 320,000/ 320,000 Tanya Martin, general manager Mark Wendenburg Evelyn and Chris Campbell 70/ 42 2002 258,264/ 228,798 Jody Levesque, brand manager Dave Carson Constellation Brands 100/ 100 1995 238,000/ 238,000 Kal Gidda, proprietor, viticulturalist, farmer, Nirmal Gidda, cellar and business operations manager Tony Holler, president and owner Jim Faulkner Nirmal Gidda and Kal Gidda B.C., Alberta/ Hatfield's Fuse, Big Bang Theory, Pinot Gris, Syrah Western Canada/ SYL Gewürztraminer, SYL Pinot Noir, SYL Rover (Shiraz Viognier ) Canada/ NP 300/ 275 2001 217,000/ 224,400 Stefan Arnason Tony Holler and Ian Sutherland Across Canada, China, Japan, Hong Kong/ The Legacy, Cabernet Franc, Merlot, Pinot Gris Western Canada/ NP 100/ 90 1993 135,000/ 121,500 60/ 60 2000 126,000/ 211,536 B.C., Alberta, Ontario, U.S., Japan, China, Swizterland/ Pinot Blanc, Riesling, Oak Bay Gamay, Oak Bay Foch B.C./ NP 80/ 58 1992 110,000/ 155,500 48/ 40 1996 90,000/ 70,000 B.C, Alberta/ Reserve Pinot Noir, Reserve Chardonnay, Grand Total Reserve, Sauvignon Blanc, Viognier B.C., Western Canada/ NP 40/ 40 1999 90,000/ 90,000 28/ 14 1996 68,000/ 68,000 Anthony Cheng and Eugene Kwan Primary markets/ Bestselling wines in '13 Clarence Louie, chief, Osoyoos Randy Picton Indian Band, Josie Tyabji, general manager Leo Gebert, president and Andrew Lebioda vintner, Andy Gebert, vintner Osoyoos Indian Band and Constellation Brands Black Hills Estate Winery 4318 Black Sage Rd, Oliver V0H 1T1 P: 250-498-0666 F: 250-498-0690 www.blackhillswinery.com La Frenz Estate Winery 1520 Randolph Rd, Penticton V2A 8T5 P: 250-492-6690 F: NP www.lafrenzwinery.com Glenn Fawcett, president Graham Pierce Limited partnership Jeff Martin, production director Jeff Martin, Dom McCosker Niva and Jeff Martin Stag's Hollow Winery and Vineyard Ltd 2237 Sun Valley Way, Okanagan Falls V0H 1R2 P: 250-497-6162 F: 250-497-6152 www.stagshollowwinery.com Township 7 Vineyards and Winery 21152 16 Ave, Langley V2Z 1K3 P: 604-532-1766 F: 604-532-1752 www.township7.com Laughing Stock Vineyards 1548 Naramata Rd, Pentiction V2A 8T7 P: 250-493-8466 F: 250-492-2363 www.laughingstock.ca Larry Gerelus, president, Dwight Sick Linda Pruegger, general manager Mike Raffan, general manager Mary McDermott Linda Pruegger and Larry Gerelus Mike Raffan Mostly B.C, across Canada/ NP 5/ 3 2000 63,000/ 63,000 Cynthia Enns, co-owner David and Cynthia Enns Across Canada/ NP 37/ 26 2003 63,000/ 54,000 David Enns Leo and Andy Gebert Sources: Interviews with wineries and BIV research. Other wineries (Mission Hill, Jackson-Triggs, etc.) may have ranked but did not provide information by deadline. NP Not provided 1 - Occasionally farther east to Manitoba and Ontario 2 - Between 120 and 130 acres Business in Vancouver makes every attempt to publish accurate information in the List, but accuracy cannot be guaranteed. Researched by Carrie Schmidt, [email protected] Next week’s list – Biggest consulting engineering firms in B.C. w 2015 2014 stealth success e B.c. softwar developer saP canada is a -scenes behind-the 22 giant | 20– BCTECH The 100-mil | 33 e Tech dieT cracking code 3-d printing top tech compan | 26 | 36 ies | 40 12 lng fires up 16 machine to 34 y buzz machine burnab industry-focused editorial & profiles | technology directory Bctia technology impact awards | industry associations Space close: April 22 | Contact: Katherine Butter Call: 604-608-5158 | Email: [email protected] EndorsEd by BIVLIST BUSINESSVANCOUVER February 24–March 2, 2015 25 Retail | Wine sales in B.C. topped $1 billion in 2014 Record sales The amount of money spent on wine in British Columbia increased 7.03% to $1.03 billion in 2014 compared with 2013 – the first time sales in B.C. have surpassed $1 billion Outpacing imports Sales of Canadian-made wines in B.C. are increasing at a faster pace than those of imported wine, rising 7.89% to 36.4 million litres in 2014 compared with 2013, while import wine sales increased 3.32% to 32.5 million litres Rising receipts Spending for Canadian-made wine in B.C. rose 8.9% to almost $470 million, while spending for imported wine increased 5.51% to $564.8 million source: British Columbia Liquor Distribution Branch Australia aims to reverse decline of its wine sales in B.C. Imports | Country bets hosting Vancouver International Wine Festival will raise products’ profile 14 $140 12 120 10 100 8 80 6 60 4 40 2 20 Millions of dollars Millions of litres Australian wine sales in B.C. 7 1 2 3 05 0600 08 09010 01 01 01 014 20 20 2 20 20 2 2 2 2 2 Volume (millions of litres) Millions of dollars Source: British Columbia Liquor Distribution Branch Vancouver International Wine Festival director Harry Hertscheg has regularly seen local sales rise for wines from countries designated as the festival’s theme regions | Rob Kruyt By Glen Korstrom [email protected] T he privilege of becoming the theme region at the Vancouver International Wine Festival (VIWF) can cost about $500,000, but countries eagerly pay the bill because they view the extravaganza, which runs until March 1, as a wise investment that will influence wine-buying decisions in the province and beyond. No country needs a sales bump in B.C. more than Australia, which is hosting the festival this year. T he l a nd Dow n Under h a s watched its B.C. sales decrease each year since hitting an alltime high of $131.2 million in 2007, when the country last hosted VIWF. Countries aiming to become theme regions at VIWF tend to be those seeking to boost sales, raise market share and educate buyers about the country’s wineproducing regions and selling points. France achieved those targets last year when it spent an undisclosed amount to host VIWF, which ran for seven days starting February 24 and included a gala dinner before the festival’s official start. Hosting the event helped give French wine sales a strong first quarter that lifted full-year 2014 sales by 7.35% to $59.5 million, and by 4.2% to 2.5 million litres, according to British Columbia Liquor Distribution Bra nch (BCLDB) statistics. The first quarter of 2014 alone gave France a sales jump of 13.4% in dollars and 5.7% in volume compared with the same quarter in 2013. “It was a nice bump,” said Johanna Raynaud, who is public relations director for Sopexa Canada, wh ich orga n i zed France’s involvement at VIWF last year and is responsible for all of France’s wine marketing across Canada. California was the festival’s theme region the previous year; it too was able to watch its wine sales in B.C. jump in both dollars spent and volume purchased in 2013. A u s t ra l i a n w i ne i ndu s t r y insiders are aware of VIWF’s influence and have been keen to get in on the action. British Columbians spent $78.5 million on Australian wine in 2014. That’s 40.2% less than in 2007. The province’s wine buyers also purchased 39.6% less Australian wine by volume in 2014, compared with 2007. “That [sales and volume drop] puts us in a position to rethink ou r messa g i ng a nd how we present ourselves,” said Shelley Hamer-Jackson, who is Wine Australia’s market development and communications manager for North America. “Our goal is to reinvigorate the category by driving consumers back and introducing them to the new face of Australia.” Australia wants to be known for more than being home to big, bold shiraz wines, Hamer-Jackson said. Increasingly, the country is producing quality cool-climate white wines and non-traditional varietal wines. Growers in the Hunter Valley, near Sydney, for example, tout their Sémillon wines as being some of the best in the world. “Existing grape varieties are evolving too,” she said. “Shiraz and Chardonnay have undergone an evolution and now there’s a whole spectru m of styles to choose from.” Wi ne Au st ra l i a w i l l pu mp close to $500,000 directly into hosting VIWF, with $225,000 of that coming from participating wineries. When money spent on travel, wine and other related costs are included, Australia’s hosting commitment will have a nearly $1.5 million effect on the region’s economy, she said. Wine Australia’s spending also includes airfare and accommodation for 22 people who are either in the media or buy large volumes of wine for retail chains, such as California’s BevMo. VIWF’s influence is far-reaching and continues to grow, said Harry Hertscheg, who has been the festival’s director since 2001. “Various major media have said that no other festival comes close in Canada to our influence and few wine fairs anywhere can match our magnitude or joie de vivre,” Hertscheg said. “We use those testimonials to communicate with our partners.” He believes that the better postfestival sales that theme regions enjoy stem partly from the VIWF partnering with the BCLDB, which holds in-store promotions to highlight the host region. Raynaud said the BCLDB gave heightened visibility to French products last year. One initiative included a one-time purchase of pallets of wine from boutique French producers who did not have agents in B.C. and so would not otherwise have been able to get their products on B.C. store shelves. This year, the BCLDB is increasing that one-time buy for boutique Australian wineries. “Some of the wines that the BCLDB is buying are all iconic producers that you just can’t buy here,” Hamer-Jackson said. “Wines will range in price up to $100 or more.” • 26 BUSINESSVANCOUVER February 24–March 2, 2015 askthe experts QUESTION | With Why email marketing still pays off the Canada anti-spam legislation, is email marketing still a viable strategy? STEVE DOTTO | Host and executive producer, Dotto Tech T ANDREW SEIPP | Principal consultant, Telclarity he rumours of its death are greatly exaggerated. In fact, email is a more viable and cost-effective medium for sales, marketing, prospecting and community-building than ever before. Sure, the new spam laws put a damper on some people’s email lists. Many people reacted with great vigour and immediately nuked their existing list – or, in an ironic twist, spammed people with messages asking them to re-enrol in the list. The fact is, more than ever now, we are an email-centric society. The inclusion of email on every smartphone ensures that the single best way to reach a community is through email. For marketing types to ignore that potential, because of a few encumbrances placed upon the management of the system, is pure folly. If you have content that is worth sharing, if you have a community that is interested in receiving this content, there is no better way to communicate with that community than through email. I believe common sense has to raise its head at some point in this conversation. I simply cannot believe that our government would waste its time laying charges against a legitimate business, reaching out through email, to a potential customer base. That, after all, is the fear – that because somebody complains that an email is unsolicited, Stephen Harper’s goon squad will descend upon our place of business and cast us all into a deep, dark dungeon. My best advice is to follow the rules. They are easy enough to follow: 1. Get permission (double opt-in). 2. Have a clear unsubscribe link. 3. Regularly remove subscribers who do not open email or whose accounts bounce or are defunct. E mail marketing is still a very effective strategy. Despite Canada’s Anti-Spam Legislation (CASL) coming into effect, legitimate email marketers have nothing to fear, especially since most email service providers like MailChimp take care of most compliance issues. But email marketing is only effective if done right, and many companies, both big and small, miss the mark. The biggest mistake I see time and time again is a failure to segment subscribers into distinct groups. For example, I routinely receive promotional emails trying to sell me accounting software that I already purchased three months ago. Not only does this annoy users, but it causes them to unsubscribe from future offers that they might otherwise want. This represents a huge loss of potential revenue. Luckily, this can be solved with just a little bit of planning. With proper segmentation you can automate your lead-nurturing strategy and send the right message, to the right person, at the right time. And the results can be stunning. According to Forrester Research, a properly executed email nurturing strategy can result in a 50% increase in sales-ready leads with a 33% reduction in marketing costs. Best of all, it’s very scalable and works day in, day out without calling in sick. Try doing that with a salesperson. Considering how inexpensive most email marketing systems are, I can’t imagine a single item in the marketer’s toolkit that provides a better bang for your buck. Email marketing is alive and well, and as long as you’re following best practices, CASL shouldn’t be a concern for your business. If you haven’t made email a priority, you’re missing out on a huge opportunity. FLAVIO MARQUEZ | Chief strategy officer, Snaptech Marketing C anada’s Anti-Spam Legislation (CASL) has definitely been a speed bump for Canadian businesses; however, email marketing is still a viable strategy for those companies that have adjusted to the new laws. Before I dive into the viability of email marketing, I should mention that the implementation of anti-spam regulations imposed on businesses in Canada has done very little to prevent spam from reaching our inboxes, because most spam comes from hijacked machines and overseas servers. However, I like to focus on the positives that CASL brings to the table, because companies that had previously followed proper email etiquette were minimally affected by the new restrictions. Before CASL, email marketing effectiveness was dropping dramatically year-over-year as Canadians were being forced to sort through more and more irrelevant messages. Because of this, businesses were going as far as buying email lists, which further reduced the effectiveness of email marketing. Now, with anti-spam laws in place, Canadian businesses need explicit or implicit consent before adding someone to their marketing list. While this unfortunately means that non-consenting contacts must be dropped from databases, there’s a silver lining. By including only opt-in contacts in their databases, companies vastly boost the potential effectiveness of email campaigns, which is something all businesses can get on board with. Our agency still uses email marketing with a high success rate. Companies that strategically match content and resources with the appropriate segments in their email campaigns can still achieve great return on investment even with the new anti-spam laws in place. Next week’s question – What should I know before deciding whether remote working is right for both me and my company? Comments curated by BIV news staff | Have a question for the Experts? Email Tyler Orton at [email protected] Endorsed by BOMA BC, Office Space is the Lower Mainland’s definitive information source for commercial building owners, managers and tenants. Space close: March 20 Call: 604-608-5158 Email: [email protected] In partnershIp wIth directories/maps •Greater Vancouver’s only detailed directories – referred to over and over by industry professionals, investors and those looking to satisfy their space requirements. BUSINESSVANCOUVER February 24–March 2, 2015 Editorial President/Publisher | Paul Harris, 604-608-5156 editor-in-chief | Fiona Anderson, 604-608-5183 Managing editor | Timothy Renshaw, 604-608-5131 Deputy Managing editor | Mark Falkenberg, 604-608-5174 Business in Vancouver is owned by Glacier Media Inc., 303 West 5th Avenue, Vancouver, B.C. V5Y 1J6 Applause for Liberals’ balanced attack H e wore the same black dress shoes to deliver this year’s budget speech as he did last year, and Finance Minister Mike de Jong told pretty much the same story for B.C. The good news is that the government is adhering to its fiscal prudence mantra. The bad news: there’s no sign the province’s economy will pick up significant momentum any time soon. The good news: the government is adhering to its fiscal prudence mantra Hitching its trailer to a Canadian winner, de Jong’s speech rolled out Team Canada world junior hockey analogies. It pointed to drive, discipline and effective execution of a game plan as keys to victory. But for B.C.’s economy, there are significant hurdles to long-term victory on many fronts and threats from the “unforeseen.” Not long ago, for example, the Liberals had liquefied natural gas (LNG) 27 last laugh pencilled in for $1 trillion in economic activity and 100,000 new jobs. The jobs outlook remains. Their arrival, however, has been relegated to an opaque “over time” estimate; the $1 trillion, meanwhile, has taken a significant marketplace writedown. Oil’s deep dive might have returned much discretionary spending to B.C. consumers, but it has also seriously eroded LNG’s global price prospects and drained the investment capital pool for LNG export plant proponents. The BC Liberal government deserves applause for assisting on de Jong’s hat trick: a third consecutive balanced budget. Extending its $10 million mining flow-through share tax credit to the end of 2015 and increasing the mines industry budget are also prudent decisions, as are tax credits for digital media, animation and visual effects. But B.C.’s overall debt will continue to rise: to $70.4 billion by 2017-18 from $64.7 billion in 2014-15 when de Jong’s previous budget was delivered. To return to the finance minister’s hockey analogy, the province will have to go extremely hard to the net in the next year and have more breaks like last week’s federal LNG capital cost tax relief announcement go its way in the global arena if it hopes to maintain B.C.’s balanced-budget win streak and the standard of living the province’s citizens have come to expect. Attention, transit-bashers: TransLink is not on referendum ballot At Large Peter Ladner A s an organizer with the Yes coalition on the upcoming transit referendum, I’d be the first to admit that last week (February 16 to 20) was not a good one for gaining support for the proposed Congestion Improvement Tax to finance the Mayors’ Council vision for accommodating the region’s next 1.1 million residents in the best interests of our economic, social and environmental health. The mainstream and social media, as I write, continue to pound on TransLink’s ability to manage itself, the transit system and public money. The latest decision by the appointed board sets up the impossible optics of appearing to pay two CEOs to do the work of one, even though the alternatives – making no executive change or paying out severance – would have raised even more howls. If only someone would just announce that TransLink’s current governance will indeed be getting an overhaul. The mayors muse about it, but it’s not their call. The call has to come from the source of the governing legislation: the provincial government. Between the appointed board, the Mayors’ Council and the Ministry of Transportation, no one seems to be in charge under the current governance. The referendum question deals with this, but TransLink-bashers delight in doubting the very clear wording on the ballot that promises an annual, independent, publicly reported audit of how the new tax money is being spent. If TransLink accountability what’s your opinion? were dealt with, we could then turn that useful public scrutiny onto accountability for other publicly funded regional transportation decisions. We could look at the money – an estimated $3 billion – that has been allocated to a new Massey Bridge with no public accountability and no connection to regional planning priorities. We could look at accountability from the Ministry of Transportation for the financial unwinding at the Port Mann Bridge. Built in spite of steadily declining traffic over the Port Mann Bridge for the past decade, the widest bridge in the world is now facing a $3.6 billion debt financed by invisible provincial taxes. Bridge managers desperate to increase toll revenues are urging people to do exactly the opposite of what every municipal, regional and provincial transportation plan calls for: drive more, create more air pollution and presumably take less transit. We could look at accountability at the Vancouver Airport Authority, home to unknown hundreds of thousands of dollars of public art financed by an invisible airport-improvement tax, recently increased, levied by a board that has no direct accountability to the electorate, overseen by a CEO who makes more than the TransLink CEO. Where’s the outcry from the poodle-statue-haters about spending on all that wonderful public art at the airport? Is part of the double-standard irrational opposition to TransLink coming from car drivers’ sublimated resistance to supporting a transit system they don’t think they’ll ever use? I say “irrational” because the people who have really investigated TransLink’s handling of public money say it’s doing a good job. “They’ve tightened operations over the past few years. I don’t think they’re wasteful,” said independent commissioner Robert Irwin after his 2013 review. Spending is “reasonable” and employee compensation is “reasonable when compared to other organizations of similar size,” concluded an independent 2012 provincial government audit, prompting then-minister of transportation Mary Polack to say, “Everyone agrees that TransLink provides a world-class service that is the envy of many jurisdictions.” Regardless of all this, the referendum is, alas, not about TransLink. Anyone voting no to fix TransLink should be wary of how that vote will be interpreted. The only clear message it will send is that the region doesn’t want to financially support desperately needed transit and transportation upgrades. If that’s supposed to lead to some unspecified Plan B, that’s also not on the ballot. The mayors’ vision is, and almost everyone agrees it’s a good one. Peter Ladner ([email protected]om) is a co-founder of Business in Vancouver. | BIV welcomes readers’ opinions. All letters, including those sent by email, must include the author’s name, address and daytime telephone number. Business in Vancouver, 303 West 5th Avenue, Vancouver, B.C. V5Y 1J6. Email: [email protected] We reserve the right to edit for brevity, clarity and legality. 28 BUSINESSVANCOUVER send your free listing to [email protected] February 24–March 2, 2015 for the record People on the Move Email your For the Record information to: [email protected] Please include a high-resolution, colour headshot where possible. Development/ Construction Dwayne Edwards Dwayne Edwards has joined Division 15 Mechanical Ltd. as executive vicepresident and general manager. Edwards has 29 years of experience in mechanical construction projects in Canada, the U.S. and the U.K., including the Canary Wharf development in London. Edwards began his career as a plumber with Niagara Contractors Ltd. (now Modern Niagara Toronto Inc.), advancing there to vicepresident, operations. Prior to his current appointment, Edwards was mechanical division manager at Black and McDonald in Southern Ontario. EDucation Pedro Márquez Pedro Márquez has been appointed vicepresident, global, marketing and business development, at Royal Roads University (RRU). Prior to this appointment, Márquez was dean of RRU’s faculty of management for seven years, and most recently was acting vice-president at the university. Prior to joining RRU in 2007, Márquez held several positions at Tecnólogico de Monterrey in Mexico City, including dean of the business school, academic director of the CEMEX international management program and department head and professor in the department of management and international business. Legal Gordon A. Buck Jason D. Lattanzio Ingrid M. Tsui Gordon A. Buck, Jason D. Lattanzio and Ingrid M. Tsui have joined the partnership at Alexander Holburn Beaudin + Lang LLP. Buck is a member of the firm’s insurance, commercial litigation, construction and engineering, environmental and insolvency and restructuring practice groups. Lattanzio is a member of the firm’s insurance, maritime, strata property and motor vehicle law practice groups. Tsui leads the immigration practice group, while also focusing on intellectual property, wills, estates and trusts and corporate commercial. Real estate Kevin Ogle Avison Young has acquired Calgarybased real estate management company Peregrin Inc. The acquisition adds approximately one million square feet of property under management to Avison Young’s global portfolio, and 12 employees in Calgary. Peregrin founder, president and CEO Kevin Ogle has been named a principal of Avison Young. Resources Arthur Willms has been appointed a director at NaiKun Wind Energy Group Inc. Willms was previously the president and COO of Westcoast Energy from 1991 until his retirement in 1999. Willms has held several directorships for companies such as the British Columbia Lottery Corp., Pacific Northern Gas Ltd., Union Gas Ltd., Crestar Energy Inc., Gulf Canada Resources Ltd., Pristine Power Inc., Columbia Power Inc. and Angiotech Pharmaceuticals Ltd. Rob Pease has retired from his position as president and CEO of Sabina Gold & Silver Corp. Bruce McLeod has been appointed president and CEO of the company. McLeod has more than 30 years of experience in the mining industry and prior to this appointment was president and CEO of Mercator Minerals Ltd. Prior to that, McLeod was president, CEO and director of Creston Moly Corp. as well as a founder of both Sherwood Copper Corp. and Stornoway Diamond Corp. Alan Edwards has resigned as chair of the board of directors of Oracle Mining Corp. In addition, Ampere Chan, chief financial officer, has resigned; Chan also served on the company’s disclosure committee. Chan has been replaced by Carlos Escribano, who previously served as chief financial officer for the company from February 2011 to April 2013. Peregrine Diamonds Ltd. has formed a new, wholly owned subsidiary, Peregrine Exploration Ltd. As such, there have been several management changes. Eric Friedland has been appointed executive chairman of both Peregrine Diamonds and Peregrine Exploration; he has resigned as CEO of Peregrine Diamonds. Tom Peregoodoff, previously executive vice-president, business development, has been appointed president and CEO of Peregrine Diamonds. Brooke Clements has resigned as president of Peregrine Diamonds and has been appointed president and CEO of Peregrine Exploration. Herman Grutter, currently program manager, Chidliak Exploration, has been appointed vice-president, technical services, at Peregrine Diamonds. Sales/Marketing Jennifer Maloney Jennifer Maloney has joined Rennie Marketing Systems as director of marketing. Prior to this appointment, Maloney was director of marketing at Tourism Richmond for the past three years. Previous Al Cobb, past exalted ruler, Port Coquitlam Elks Lodge No. 49; Sylvia Zylla, director, major gifts and planned giving, Burnaby Hospital Foundation; Reg Seguin, exalted ruler, Burnaby Elks Lodge No. 497; Doreen Peniuk, president, Burnaby Royal Purple Lodge No. 260; and Wally Govett, past president, Burnaby Elks Lodge No. 497, with $6,000 donation cheque to the Burnaby Hospital Foundation to Tourism Richmond, Maloney was senior account director at Rethink Advertising. Kaja Salovsky Kaja Salovsky has been appointed director of sales, global, at Kryton International Inc. and will be leading the company’s international sales team. Salovsky has more than 20 years of senior sales leadership experience; recent roles include executive director of sales at Essilor Canada, regional sales manager at Canwel Hardware and area sales director at DHL Express. Maureen Hughes has been appointed VP, U.S. sales, at Burnaby-based Aquilon Software. Prior to this appointment, Hughes was director, competitive marketing, cloud and enterprise, at Microsoft. Hughes is based out of Aquilon’s Bellevue, Washington, office. Technology Graeme Watson has been appointed to Calyx Bio-Ventures Inc.’s board of directors. Watson was most recently president and CEO of Infosat Communications. Norm Lo, a wireless Internet executive and former BlackBerry vice-president, has joined the advisory board of FusionPipe Software Solutions Inc. Transportation Lincoln Heaney Lincoln Heaney has joined Western Canada Marine Response Corp. (WCMRC) as aboriginal relations adviser. Prior to joining WCMRC, Heaney was director of implementation at B.C.’s Ministry of Aboriginal Relations and Reconciliation. In his new role, Heaney will develop and maintain relationships with aboriginal communities in order to ensure an effective delivery of spill response preparedness. Companies on the move New Address Golder Associates Ltd. has relocated its Burnaby and Vancouver Hastings offices to a new merged location at 200 – 2920 Virtual Way, Vancouver, V5M 0C4. Telephone (604-296-4200) and fax (604-298-5253) numbers remain the same. Hats Off Business in Vancouver welcomes submissions from local small businesses and large corporations alike that demonstrate examples of corporate philanthropy and community involvement in the Vancouver area. Highresolution images are also welcome. The Rotary Club of Langley Central donated $30,000 to Reach Child and Youth Development Society, a nonprofit that serves children with special needs and specializes in children with autism spectrum disorder. The funds were raised through the club’s 25th annual wine tasting festival. Focus Foundation of BC, a non-profit that helps troubled teens, youth with learning disabilities and children who fail to succeed in high school in B.C., also received funds. Telus Vancouver Community Board donated $10,000 to Big Brothers of Greater Vancouver in support of the Big Brothers aboriginal mentoring program. Mr. Lube Canada donated $30,000 to the Zajac Foundation. The funds will go to the Zajac Ranch for Children – a fully accessible western-style ranch and camp experience for children with disabilities and serious and chronic illnesses. National Bank has selected 175 projects across Canada, including nine programs in the Lower Mainland, to receive support through its One for Youth regional committees program. Some 27,000 youths will benefit from financial support awarded by 12 regional committees. Recipients from coast to coast will share in $1 million which will go towards the implementation of youth initiatives. Customers of Vancouver-area Whole Foods Market stores donated $89,188.28 to the Greater Vancouver Food Bank Society. Funds were raised through Whole Foods’ Feed 4 More donation program. The British Columbia Securities Commission (BCSC) recently invited the Greater Vancouver Food Bank Society to lead a lunch-and-learn for BCSC staff. The session was followed by a donation of $3,190 to the society on behalf of commission staff. Elks of Burnaby Lodge No. 497 and Royal Purple Lodge No. 260 donated $6,000 to Burnaby Hospital Foundation. Since 2003, the lodges have donated a total of $40,500 to the foundation. Scotiabank Bright Future donated $15,000 to the Canucks Autism Network. The funds will be used to support the network’s adaptive I CAN Play sports programs. • for the record BUSINESSVANCOUVER February 24–March 2, 2015 29 trouble Lawsuit of the week B.C. government sues over repair costs to Oak Street Bridge The provincial government is suing Wayden Transportation Systems Inc., Roynat Inc. and Lafarge Canada Inc. to recover repair costs to the Oak Street Bridge after a tugboat lost control of a barge and struck one of the span’s supporting protection piers. The government, named as Her Majesty the Queen in right of the Province of British Columbia, filed a notice of civil claim in BC Supreme Court on February 6, claiming repair costs to the bridge totalled $575,087. On February 8, 2013, the Alison Nicole 1 was pulling the James Dale, a tug and barge owned by Wayden, down the Fraser River near Richmond when its John Doe operator lost control and struck the bridge’s south protection pier, according to the claim. The barge was empty at the time, but it carries sand and gravel otherwise, and was being moved at the behest of Lafarge Canada, the lawsuit says. The “allision” caused the bridge’s pilings and pier protection to break off and “were loose in the Fraser River for some time,” the claim states, adding that the cleanup of the debris was completed over the next month. The government seeks a judgment in the amount of the repair costs to the bridge. The allegations have not been proven in court and the defendants had not filed a response by press time. DISCIPLINE Law Society of British Columbia The Law Society of British Columbia (LSBC) announced February 4 that a 100 Mile House lawyer’s suspension will be substituted with a fine. The LSBC’s review board set aside a suspension for lawyer Douglas Dent. In January 2014, a hearing panel ordered Dent suspended for improperly withdrawing trust funds to pay fees and disbursements. Dent had admitted to using $2,000 he was holding in trust to recover legal fees and disbursements from his client. The money was supposed to be forwarded to his client’s spouse in equalization payments under the terms of a separation agreement. The panel found that Dent put his own interests ahead of his client’s by withdrawing the funds from the trust account without consent in order to be compensated for his work. The review board, however, concluded that the 45-day suspension is outside the appropriate range of disciplinary action in this case. The board has instead ordered that Dent pay a $5,000 fine plus the cost of the hearing. British Columbia Securities Commission On February 12, the British Columbia Securities Commission (BCSC) announced that one of its panels has found that Rodney Jack Wharram and three companies for which he is a director and president committed fraud. In its decision, the panel found that Wharram, West Karma Ltd. and the Falls Capital Corp. committed fraud when they took $139,000 from Falls Capital, deposited it with West Karma, and then used it for Wharram’s personal expenses. The panel also found Wharram, West Karma and Deercrest Construction Fund Inc. committed fraud when they took $130,000 from Deercrest, deposited it with West Karma, and then used it for Wharram’s personal expenses. Wharram and Deercrest were found to have committed fraud when they took $265,000 directly from Deercrest’s bank accounts and used it for Wharram’s personal expenses. Writing about the deprivation caused by Wharram and his companies’ misconduct, the panel wrote, “The investors have lost all the money Wharram used for personal purposes. There is no evidence of repayment.” The panel added, “The evidence is clear that Wharram had subjective knowledge of the prohibited acts. He knew that funds were being diverted for personal expenses.” In its decision, the panel also found that Wharram made false statements to commission staff and dismissed other allegations of fraud. No penalty has yet been determined. BUYER’S ALERT Companies listed below, which are not accredited by the Better Business Bureau, have failed to respond, as of February 13, to Better Business Bureau of Mainland BC’s efforts to mediate complaints from February 1 to February 7. In some instances, the company may have taken care of the complaint and considered the matter closed, or may believe the complaint is unjustified; however, if the BBB has not received a response, records cannot reveal either position. Please note that BBB accredited businesses must respond to customer complaints that are brought to their attention. The companies listed are not members of this Better Business Bureau. Source: BBB. ABC Engineering Service, Sun Peaks Auto Depot Ltd., West Vancouver CitiFinancial, Montreal ComCanada Communications Inc., Vancouver Cosmo Motors Ltd., Richmond Destination Vancouver Hyundai, Vancouver Dream2Travel, Vancouver Fairway Glass (2012) Ltd., Burnaby Money Network, Vancouver Pacific West Van Lines, Richmond Regent Construction, Kelowna Sammy’s Carpet & Hardwood Ltd., Vancouver Sears Carpet & Upholstery Cleaners, Burnaby Tastygo Online Inc., Vancouver Tradespluscanada.ca, New Westminster Vision Automotive Repair Ltd., Prince George Whistler Platinum Reservations Ltd., Whistler The following companies have responded to the BBB subsequent to being published: Continental Auto Body, Richmond www.canadausvisas.com Welcoming our new partner - Jennifer Marles Oyen Wiggs Green & Mutala LLP is pleased to welcome Jennifer Marles as a partner of the firm. Jennifer was called to the Bar of British Columbia in 2008. She completed her legal studies at the University of Victoria, where she received numerous awards, including the Law Society of British Columbia Gold Medal for being the top student in her graduating class. As part of her law degree, Jennifer completed an International Intellectual Property Law summer program at the University of Oxford. Prior to articling with the firm, Jennifer completed a clerkship at the British Columbia Supreme Court in Vancouver. As a patent agent, she was awarded the J. Edward Maybee Memorial Prize for earning the highest mark overall on the 2009 patent agent’s qualifying examination. She is the firm’s fourth lawyer to receive this distinction. Jennifer practices in all areas of intellectual property, with a particular emphasis on prosecuting patent applications in the biotechnology, chemical, and medical device fields. Jennifer also assists clients with conducting freedom-to-operate analyses. From 2009 to 2013, Jennifer served on the Intellectual Property Institute of Canada’s Joint Liaison Committee — Trademarks, and she currently serves on the Intellectual Property Institute of Canada’s Joint Liaison Committee — Patents. Jennifer is also an adjunct professor of law at the University of British Columbia where she lectures on copyright law. Oyen Wiggs Green & Mutala LLP is Western Canada’s largest independent intellectual property law firm. Established in 1977, our Vancouver law firm is deeply rooted in British Columbia and the Pacific Northwest, and our wide-reaching network of associates enables us to advance our clients’ interests around the world. Ph: (604) 669-3432 [email protected] www.patentable.com For all your immigration needs PricewaterhouseCoopers LLP (“PwC”) is pleased to announce that PricewaterhouseCoopers Immigration Law LLP, a law firm affiliated with PwC, has opened an office in Vancouver. This immigration law firm joins the global PwC immigration network of over 1,000 immigration lawyers and specialists across a network of 128 countries. The Vancouver immigration office provides clients with strategic guidance, compliant strategies and ongoing support in all aspects of Canadian, U.S. and global immigration. Susan Martyn Barrister and Solicitor Member of the Bar of British Columbia 604 806 7177 [email protected] Specialty: Canadian business immigration law, with a focus on the engineering, construction and natural resource extraction sectors Beth Nanton Senior Attorney-at-Law, and Barrister and Solicitor Member of the Bars of British Columbia, Ontario and New York 604 806 7150 [email protected] Specialty: US business immigration law, with emphasis on the information technology, finance, and natural resources sectors PricewaterhouseCoopers Place 250 Howe Street, Suite 700 Vancouver BC V6C 3S7 © 2015 “PricewaterhouseCoopers Immigration Law LLP” is a law firm affiliated with PricewaterhouseCoopers LLP, an Ontario limited liability partnership. 4117-02 0115 30 BUSINESSVANCOUVER February 24–March 2, 2015 WHO’S GETTING SUED These corporate writs were filed with the BC Supreme Court registry in Vancouver. Information is derived from notices of civil claim. Civil claims have yet to be proven in court. Defendant Keg Restaurants Ltd. Plaintiff Tucson Oro Valley Keg LLC Claim $5,913,301 for debt owing on a judgment from the Superior Court of the State of Arizona for the County of Maricopa. Defendant Southview Sorting Ltd. Plaintiff Clean Harbors Exploration Services Ltd. Claim $400,012 for land clearing and ground mulching services. Defendant Banks Island Gold Ltd. Plaintiff Gladiator Equipment Inc. Claim $322,707 for an equipment lease. Defendants BR Black Rock Drilling & Blasting Inc. and Shane Adams and Terry Adams 2015 for the record Plaintiff Royal Bank of Canada Claim $126,816 for debt. Defendants Avalon Fencing Div. of 1399317 Alberta Ltd. and 1399317 Alberta Ltd. Plaintiff Prolink Supply Ltd. Claim $121,076 for fencing products. Defendant Taneem Enterprise Ltd. Plaintiff Xerox Canada Ltd. Claim $117,514 for defaulting on an equipment lease. Defendants Top Vision Developments Inc. and Carnarvon Garden Development Ltd. and Wan Tao Wang and Jia Guo Sui Plaintiff Lu Tang Architecture Ltd. Claim $83,199 for architecture and development work. Defendant Graceland Construction and Bruce Wheeler and 44280 Yukon Inc. and Michael Birdman Plaintiff Spring Cove Enterprises Ltd. Claim $75,893 for mining equipment. Defendant Banks Island Gold Ltd. Plaintiff Corix Water Products LP Claim $57,595 for water products. Defendant Teliphone Navigata-Westel Communication Inc. Plaintiff Insight Canada Inc. Claim $38,068 for information technology goods. Defendant JRS Engineering Ltd. Plaintiff The Owners Strata Plan VR 1642 Claim Damages for breach of contract after defendant installed defective and dangerous sliding doors in plaintiff’s building. Defendant Smithrite Disposal Ltd. Plaintiffs Lucas Kelsch and Kelsch Holdings Co. Claim Damages for breach of contract arising from defendant’s improper withholding of funds for subcontracted waste disposal work. Defendants Marek W. Bragiel and Worldsource Management Inc. Plaintiffs Iwona Wdowiak and Kinga Wdowiak Claim Damages for breach of contract and breach of fiduciary duty for misrepresentation and investment losses. Defendants W.I. Mortgage Pros Ltd. dba Dominion Lending Centres Mortgage Pros and Margaret Schulz and Kevin Janzen and Jeffrey Arthur Potoroka Plaintiff Armada Mortgage Corp. Claim Damages for professional negligence after plaintiff granted a mortgage on a property based on defendants’ inflated property appraisal. Defendant B & B Heavy Civil Construction Ltd. Plaintiff David Pakozdi Claim Damages for wrongful dismissal after plaintiff was fired as a bid manager one year into a five-year contract. Defendant McKenna’s Warehouse & Distribution Centres Inc. Plaintiff Curtis International Ltd. Join us to celebrate exceptional business women in Bc Business in Vancouver is once again recognizing BC’s most outstanding business women in private or public sector companies. Honourees have risen through the ranks to become senior executives or entrepreneurs. Through corporate board placements they help influence and shape policy at some of Canada’s largest companies. March 4, 2015 The Fairmont Waterfront hotel 900 canada Place | Vancouver, Bc Claim Damages for breach of contract after defendant invoiced plaintiff for services that were improperly performed or not performed at all. Defendants Three Buoys Development Corp. and Three Buoys Management Corp. and 0786679 B.C. Ltd. and Henry Martin Vellner and Robert Todd Millar Plaintiff 1244439 Alberta Ltd. Claim Damages for shareholder oppression. Defendant Banks Island Gold Ltd. Plaintiff Gladiator Equipment Inc. Claim Damages for breach of contract arising from defendant’s failure to pay for equipment rentals and improper use of plaintiff’s equipment. K biv.com To View Lawsuits Online, go to biv.com/WHOS-GETTING-SUED BIV Datebook online For a comprehensive and searchable list of networking events in the Lower Mainland, go to Business in Vancouver’s Datebook at biv.com/events The 2015 winners are: Nancy McKinstry (Lifetime Achievement Award) Director, HSBC Bank Canada Carolyn Cross Chairman and CEO, Ondine Biomedical Inc Debra Hewson President and CEO, Odlum Brown Limited Fiona Macfarlane Managing Partner, Vancouver and Western Canada, Ernst & Young LLP Renee Wasylyk Principal, Troika Development PrIcE Non-Subscriber price: $145 Subscriber price: $115 Corporate tables: $1,750 Susan Yurkovich Executive Vice President, BC Hydro Winners were profiled in the February 10th issue of Business in Vancouver. Check out full event details at biv.com/events/biv/iwib Gold Sponsors: General Sponsors: GO2PRODUCTIONS make it great ® BUSINESSVANCOUVER February 24–March 2, 2015 31 LifeLessons Restaurant profits start with the right real estate Volume Based Prices Rent’s everything. That’s your biggest fixed Print More Save More expense you can’t control. COPY & DIGITAL PRINT SERVICES More Than 25 Chen now owns a total of five restaurants in Vancouver, North Vancouver and Richesmond Chen started mond and employs 130 people. working in the restaurant Chen believes having a good Of Outstanding Service business at the age of 13 understanding of how commercial leasing works can be a in his father’s first restaurant, asset in the restaurant Thai House, on Robson Street. M-F 8 am - 6 pm • Weekends 10As aman- 6older pm •teen, 1950Chen Weststarted Broadway,crucial Vancouver business. In 1999, he bet on Yaletown’s metamorphosis helping to manage his family’s from warehouse district to chic holdings during the Tel: 604-731-7868 property residential and commercial hot day while continuing to work spot; in 2010, Chen opened Pink the restaurant at night. He www.copiesplus.ca in Elephant Thai on Alberni Street opened his first restaurant, at the start of that street’s Urban Thai Bistro, in Yaletown transformation into a high-end in 1999 when he was just 24. retail destination. “From dealing with the floor “Back in 2010 when we opened plans to interior design … it, we noticed Alberni Street to the renos, to making sure was going to be the new Robson everything was on time and COPY & DIGITAL PRINT Street,” he said. “We negotiated onSERVICES budget, it was probably a very reasonable lease at that one of the best experiences I Desmond chen time. With a reasonable rent could have,” Chen said. “No MoreThai Than President, you can do well there.” one could ever learn that in House Ventures That contrasts with Robson university.” By Jen St. Denis [email protected] Years D Rush or Same Day Service Always FREE 25 Colour Architectural & Engineering Line Drawings Everything else you can control: your payroll costs, your food costs  Desmond Chen President, Thai House Ventures Street, he said, which has some of the highest retail rents in the country – as high as $100 to $200 per square foot. Chen’s family sold their Robson Street restaurant several years ago, which was on the second floor and therefore rented for about a third less than a street-level space. “Rent’s everything. That’s your biggest fixed expense you can’t control. Everything else you can control: your payroll costs, your food costs,” Chen said. Chen noted that while Alberni Street is fully leased at the moment, several vacancies on Robson Street are evidence of the churn caused by very high rents on that street. “I don’t know how businesses survive on Robson,” he said. On rent’s relation to profit | “You can be in one of the best locations on Robson Street and be paying prime, or you could be somewhere else, on East Broadway [for instance] and paying literally 25% of that, and your sales would not be as much as Robson Street but you’d be profiting more.” • Years Next Life Lesson: Judy Poole, financial adviser, Raymond James B/W Drawings Prints • Copies • Scans Ofa work Outstanding Service Has or life challenge taught you a key career lesson? 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Except as set out in the contract of purchase and sale, there are no direct or collateral representations or warranties, express or implied, statutory or otherwise, including without limitation arising out of this advertisement or any other marketing material. *Features, facilities, amenities, services, ownership privileges and programs are proposed only and are subject to change or cancellation. This is not an offering for sale as an offering can only be made by disclosure statement, and only in jurisdictions where qualified in accordance with applicable local laws. E.&O.E.