BCBUSINESS RSS Feed

BCBUSINESS RSS Feed http://www.bcbusinessonline.ca/rss RSS Feed en-cwm On BP and French Soccer http://www.bcbusinessonline.ca/bcb/business-sense/2010/09/08/bp-and-french-soccer Business leaders and politicians too often fall short on accountability. http://www.bcbusinessonline.ca/bcb/business-sense/2010/09/08/bp-and-french-soccer#comments Business Sense BP Oil spill business leaders Politicians steve burgess world cup soccer Wed, 08 Sep 2010 10:51:00 -0700 Steve Burgess <h2 class="bcb-article-deck">Looking for leadership in all the wrong places.</h2> It was a pretty good summer overall, depending on what you were up to. Camping and cycling were fun, mostly; testifying before the U.S. Congress and coaching the French national football team, less so. At this year’s World Cup in South Africa, the French football squad covered themselves in shame generally. But team coach Raymond Domenech still managed to distinguish himself with a display of churlish ineptitude. It wasn’t just that Domenech sometimes chose his lineup based on their astrological signs; it’s that he was apparently completely unashamed to say so. Players hated him, fans hated him and he refused even to shake hands with the South Africa coach after France’s thoroughly deserved final defeat. Yet somebody hired him to begin with. Meanwhile in Washington, D.C., outgoing BP CEO Tony Hayward was giving testimony, of a sort anyway. Those who wonder what qualities are necessary to run a massive global corporation would have done well to take notes. It isn’t just anybody who can look that clueless. It takes a special kind of talent, located no doubt by an executive search team. Watching Hayward spend hours expressing ignorance of almost every aspect of the company operations that led to the massive Gulf oil disaster was enough to convince you that BP was not a British corporation but instead a revival of the English nobility, where any inbred halfwit could control a great fortune simply by right of birth. Does anybody know what they’re doing? Is the meritocracy a complete illusion? CEOs from Wall Street to Howe Street continue to insist that bloated pay packets are necessary to attract and keep top talent. And yet when those CEOs are called upon to explain their actions and responsibilities in one crisis after another, their collective shrugs leave observers wondering exactly how it is that they earn their money. “I wasn’t part of the decision-making process,” Hayward repeatedly told his congressional inquisitors. “I wasn’t involved in any of the decision-making.” And for that he made close to $6 million per. Perhaps his successor will be given a few more files to work between yacht races. One silver lining to all this: BP was recently forced to sell off its B.C. methane reserves in the Elk Valley. Provincial energy minister Bill Bennett wasn’t worried anyway; he says we have laws against bad drilling behaviour. “So I think it’s covered in B.C.,” he told a reporter in July. I guess that was their mistake in Louisiana: they should have outlawed disasters, like we have. Capitalism is where the rubber is supposed to meet the road. No slackers allowed, unlike those cushy government jobs. But at least politicians face the ballot box. Business leaders, perched high atop complex organizations that they may barely understand, can skate along for years until disaster strikes. Then they face regulators, shrug and repeat, “It wasn’t my job.” It’s common these days to hear people express a complete lack of trust in leadership. Politicians, business leaders – they’re all crooks and scoundrels, the barroom gripe says. It’s unfortunate and simple-minded, a blanket cynicism that is really just the flip side of gullibility. But it explains the hero status accorded to a man such as Captain “Sully” Sullenberger, who guided US Airways Flight 1549 safely into the Hudson River in January 2009. A crisis hit, and he was there. That’s all anyone wants. Going forward, I still have some faith. I do not believe Keith Ballard’s star sign was a factor when he signed with the Canucks. And yet I wonder what disasters might lie in wait for this province, either from BP or some other bunch of screw-ups. In whose lap will responsibility fall? And when real disaster strikes complex systems, can a lone Sullenberger really save the day? 16125 at http://www.bcbusinessonline.ca Cleantech and the B.C. Smart Grid http://www.bcbusinessonline.ca/bcb/business-sense/2010/09/08/cleantech-and-bc-smart-grid The gold rush to upgrade B.C.'s electricity infrastructure is on. http://www.bcbusinessonline.ca/bcb/business-sense/2010/09/08/cleantech-and-bc-smart-grid#comments Business Sense Brent Holliday clean technology electricity consumption electricity generation Wed, 08 Sep 2010 10:50:00 -0700 Brent Holliday <h2 class="bcb-article-deck">The gold rush begins in the quest to upgrade B.C.’s electricity infrastructure. These are the days of the "smart grid."</h2> Investors in clean technology have experienced two distinct peaks in the past 12 years, both of which have affected B.C.’s technology community. The first peak was fuel-cell driven in the late 1990s, and B.C. led the way with Ballard Power Systems. The second peak was in 2007 when Al Gore fuelled a rally cry to stop climate change and billions went into the new category of clean technology. In response, many B.C. companies sprang up in biofuel (Lignol Innovations Ltd.), solar (Day4 Energy Inc.) and electric vehicle companies (Delta-Q Technologies Corp.). As of late, a more sober look at clean technology has investors seeking opportunities where real revenue is being generated and a clear need in the market is being fulfilled. This may lead to a new peak in clean technology fuelled mainly by something called the “smart grid.” The smart grid is a marketing name for the upgrade of the electricity infrastructure around the globe to a two-way network that allows per-kilowatt pricing, selective conservation and adding surplus power to the grid. Europe and North America’s aging electric grids are in need of modernization at the same time as the developing world is building out its electricity delivery. This global convergence of market need has been recognized as the biggest money-making opportunity in a generation. The utilities that build and run the grid know it and giants of the technology industry such as Cisco Systems and IBM have launched aggressive campaigns to secure their share of the infrastructure behind the smart cities of tomorrow. As you sit in your office today and get clean steady power to your computer and the lights never flicker, you might be shocked to learn how variable and inefficient the current grid is. You won’t notice the difference of a fluctuation in voltage at your home or at your desk. But if you are a huge commercial building or a manufacturer, these differences end up as pure waste because your equipment or air conditioning works best at a steady voltage state. Enter Legend Power Systems Inc., a publicly traded Burnaby company that has perfected an electrical harmonizer that adjusts the incoming voltage from the grid. It is selling these systems to big-box retailers, manufacturers and Science World, generating savings through conservation and making the existing grid more efficient. Tantalus Systems Corp. is a well-funded smart-grid meter company from Burnaby that works with utilities to install a wireless meter at your home adjacent to the existing meter. Besides the obvious replacement of the dog-fearing human meter reader, Tantalus systems create a two-way conversation with the utility about what usage is happening in real time, allowing homeowners to manage their consumption and reduce their bills. Tantalus is making hay in the U.S. and in Eastern Canada with thousands of meters installed to date. Having a connection at the meter is game changing for conservation, as is the ability to manage your energy within your home. A startup winning accolades and business in Australia, the U.S. and soon in Europe is Energy Aware Technology Inc. This Vancouver company makes two-way consumption monitoring devices that help conserve energy by telling the homeowner how much electricity is being used at that moment. Connecting this functionality to your smart phone is coming soon, allowing you to turn down air conditioning or turn off lights remotely. All of these companies are attacking a real need right now in the market of clean technology. These aren’t early-stage science projects or partially dependent on government and BC Hydro tariffs for their livelihood. These companies will participate in the next peak of clean technology, which will be based on real earnings from companies that have the side benefit of helping combat climate change. 16122 at http://www.bcbusinessonline.ca The Boom of B.C. Addiction Treatment http://www.bcbusinessonline.ca/bcb/top-stories/2010/08/04/boom-bc-addiction-treatment B.C.'s addiction treatment industry is booming, but does it work? http://www.bcbusinessonline.ca/bcb/top-stories/2010/08/04/boom-bc-addiction-treatment#comments Top Stories addiction treatment centres addictions BC addiction services drugs in b.c. frances bula Wed, 04 Aug 2010 13:45:00 -0700 Frances Bula <h2 class="bcb-article-deck">In a province famous for its drug culture – where marijuana is our top cash crop and where strung-out addicts are part of the modern Vancouver tableau – it should come as no surprise that there are more addiction treatment providers in B.C. than anywhere else in Canada. What is surprising: how little is known about these facilities and whether their treatments actually work.</h2> It could be a spa. Or a corporate retreat that emphasizes mindful reflection once the PowerPoints are done for the day. The reception area at Edgewood is a tasteful blend of leather couches, copper-tinted flagstone flooring and customer-service-sensitive personnel behind the counter. Out front, people stroll along a gently winding covered walkway, paper coffee cups in hand, or pause in the small garden behind for a moment of tranquility, in spite of the faint roar of a highway nearby. <div class="image-header" id="bcb-article-sidebar"> <div class="header-image"><img width="98" height="12" alt="BCB Sidebar - Online Only" src="/files/u102/category_online-only.gif" /></div> <ul> <li>Blog: <a href="http://www.bcbusinessonline.ca/node/15660">Are B.C. addicts simply trading the narcotic high for the treatment high?</a></li> </ul> </div> Inside, the gift shop is a cornucopia of artistic T-shirts and jewelry, stuffed animals and giant muffins. And the buzz of activity in the lobby next to it seems like a familiar morning preliminary from other realms, perhaps to another exciting day of “Achieving Better Sales in Office Supplies” or “Maximizing Infrastructure Projects for Your Region.” Only the luxury pool appears to be missing. Then the picture starts to come into more focus. The doors along the hallways open to rooms with plain single beds, two to a room, not luxury suites with 600-thread-count sheets on pillow-top king beds. The staff are not young kids schlepping suitcases and room-service trays but people in their 40s and 50s with the authoritative look of school principals. The sombre black plaque at the entrance to the building tolls the bell for “those alumni who have lost their lives to chemical dependency,” listing some 100 names, starting with “Bill G., Age 50” and ending at “Jeremy P., Age 31.” And then there’s Andrew Singh (name and some details changed), who talks about his nine weeks here with evangelical fervour. “Now I’m so in touch with my higher power. I know somebody’s looking after me,” says Singh, a Bollywood-handsome 31-year-old whose well-off Prince George family is paying for a stay that is indefinite at this point. “There’s so many things this place has taught me. I used to think about tomorrow. Now I only think about today. I think about not having that hit today. It’s about accepting the things that happened in the past. If I dwell on it, I’m not going to have a chance to grow.” <h3>Addiction Treatment: The Shadow Growth Industry</h3> While it looks like one of the many resorts that dot Vancouver Island, Edgewood – a lodge-like building in a suburban/industrial cul-de-sac near Nanaimo’s Departure Bay ferry terminal – is, in fact, an addiction treatment centre. Andrew Singh is here on his second round of treatment in the past five years because of his problems with alcohol, cocaine and, occasionally, ecstasy. At the urging of both his wife and parents, he has taken indefinite leave from a shoe-store management job and spent two months going to group therapy, talking about what triggers him to use alcohol and drugs, learning that it’s a disease that he’ll always have and abiding by a routine of meetings and chores that’s meant to provide the structure for a new life forevermore. With 80 beds in its main facility, Edgewood provides services to as many as 500 clients a year, making it one of the province’s biggest treatment facilities. But it is just one small part of B.C.’s huge addiction treatment industry, a little-known growth industry that exists in the shadow of its publicity-hogging nasty big brother, the illegal-drug business. The industry defies easy analysis in much the same way as the illegal operations. Their results are, by and large, unverified. Standards and certification are variable. There is no unified approach to treatment. Indeed, there isn’t always agreement on exactly what treatment is.  <div style="padding: 5px; float: left;"><img width="259" height="186" src="/files/crystal-meth_1.jpg" alt="" /></div> THE B.C. MYTHOLOGY IS THAT IT'S HARD to get addiction treatment in this province. The reality is that there are more treatment providers here than anywhere else in Canada. The Canadian Centre on Substance Abuse (CCSA), which lists all known addiction-related agencies, shows 288 treatment facilities in B.C. That’s three times as many as in neighbouring Alberta, and a dozen more than Ontario, where the population is triple B.C.’s. In fact, B.C. is home to more than a quarter of the 1,016 treatment providers in the whole country. Some of that can be explained by the resort effect: it’s more attractive to set up a drug-rehab centre for drying-out executives in Beautiful B.C., next to mountain ranges or the ocean, than amid the oil rigs of Alberta or potash mines of Saskatchewan. But that doesn’t account for all of it. As CCSA policy analyst Rebecca Jesseman notes, Quebec used to rival B.C. in the numbers of private facilities, but that has changed since the Quebec government introduced a certification system. In B.C., which has no provincial certification system, the numbers continue to increase.   That lack of regulation has led to a bewildering array of approaches and training. Some facilities operate with little more qualification than a sincere desire to do well and the fervent testimonials of their clients, a carry-over from the 19th-century roots of addiction treatment as moral missionary work. At the other end, programs run or funded by hospitals operate according to rigorous health-care standards set by Accreditation Canada, the body that oversees hospitals and extended-care facilities in the country. In between there are varying degrees of credentials attached to either the facilities or individual staffers, including the Canadian Society of Addiction Medicine and the American Society of Addiction Medicine. Edgewood, heavily populated by university-trained and ASAM-certified psychiatrists and counsellors, is one of 17 B.C. facilities certified by the U.S.-based Commission on Accreditation of Rehabilitation Facilities. Training and standards are only two of the grey areas; money and effectiveness are the others. No one knows exactly how much governments in this country spend on addiction treatment. A 2002 CCSA cost report estimates the cost of various levels of addiction treatment paid for by the health-care system across the country at just over $2.1 billion. B.C.’s health ministry, when asked for a number, offered up $1.26 billion – but that’s for addictions and mental health together, blended inextricably in this province. If only half the government spending in mental health and addictions is for addictions, that’s $600 million right there covering detox beds, day treatment, clinics, and some or all of the $100-a-day fees that a lower-cost facility typically charges for its minimum six-week residential cycle.   And government spending is only a part of the money that flows to treatment. There are also all the private clients, who pay anywhere from that $100 a day to much more at the upper end. Typically, employee-benefit programs choose the level of treatment they think is appropriate and pay all the costs. Companies with a lot invested in a valued manager, skilled technician or highly paid professional appear to be willing to spend to hang on to those people. Edgewood, a non-profit that charges $325 a day for a residential treatment program that lasts seven to eight weeks (and then somewhat less for the lengthy after-care phase), gets a significant portion of its business from employee-assistance programs. For people who have the personal resources to pay the fees or who have an extremely generous employee program, there are places such as the ultra-posh Sunshine Coast Health Center, which does have that luxury pool for its 16-bed facility. Fees there range from $14,000 for the “accelerated 30-day program” to $26,560 for the extended 90-day program. And what does one get for all that money? Persistent critics of 12-step programs – the famous creed of Alcoholics Anonymous that is used, in some form, at almost all treatment centres – say the real rate of success looked at over the long term is about five per cent, no higher than the rate of spontaneous remission. Other long-term studies show success rates as high as 80 or 90 per cent, among treatment groups such as doctors. But definitive, long-term rates for other groups are hard to find. Most treatment facilities link to stories on their websites from anonymous successful clients. Few provide statistics publicly. At Edgewood, director Lorne Hildebrand, a 53-year-old former business consultant, refers repeatedly to a recent survey done of 181 people who completed the program in 2007, where 92 per cent said they were still sober and two-thirds said they hadn’t even had a relapse. But a notation on the Edgewood website cautions that “internal surveys are subject to bias. Outcome studies conducted at larger facilities by independent firms indicate a typical abstinence rate of 50 per cent after one year.” In Canada the CCSA and other researchers have identified the lack of information as a central problem in evaluating what works and what doesn’t. Benedikt Fischer, the interim director of SFU’s Centre for Applied Research in Mental Health and Addiction, says he is mystified by how the provincial government makes decisions about treatment funding. Fischer is part of Canada’s burgeoning addiction research industry (UBC, the University of Victoria and SFU have each developed addiction research centres in recent years), which is trying to bring some small measure of scientific method to treatment. But that’s happening in the research institutes, not the health ministries or authorities.  <div style="padding: 5px; float: left;"><img width="259" height="186" alt="" src="/files/BC-addiction-treatment-providers-3a(2).jpg" /> The Last Door Recovery Society, managed by Dave Pavlus, is led not by doctors but by people who have been through recovery.</div> “IN B.C. WE'RE NOT TERRIBLY GOOD at measuring the impact of any of the programs,” says Fischer, currently overseeing a study on whether short-term interventions are effective for university students overly dependent on cannabis. “I have no idea how [health ministry bureaucrats] make policy decisions when they have no information.” It’s not just the ministry that is making decisions in the dark. Even addiction doctors and employee-assistance counsellors, who make referrals to programs, can only make educated guesses about which programs are the best, based on personal visits to treatment facilities, checks into staff training and what results they are getting from the people they send to various centres. They have to keep updating that, they say, since facilities can swing up or down over time. Barb Veder, the national clinical director for Shepell FGI, one of Canada’s largest employee-assistance-program providers, says the company has one manager dedicated to keeping tabs on treatment services: “What we commit to is keeping our pulse up, maintaining a relationship and rapport with different providers so we can make successful referrals.” But none of them has comprehensive, long-term data. No facility has the financial capacity on its own to track every one of the hundreds of clients who pass through each year and verify how they are doing five, 10, 20 and 30 years later, not just 12 months later. It’s proven equally difficult for independent researchers and even government agencies to do the long-term tracking that addiction requires. The main form of evidence is anecdotal and highly selective: facility staff members who primarily remember their success stories or people in treatment themselves. And except for those who drop out early, people who go to treatment facilities almost invariably speak in glowing, quasi-religious tones about how wonderful their program is. <h3>The Last Door Recovery Society</h3> Another gruelling, belly-laugh-producing morning. The 25 men gathered for the daily 9:30 meeting in the back room of the Last Door Recovery Society, located in a well-maintained Victorian house near downtown New Westminster, have also stripped emotionally naked. The group has done a partial round robin of confessions about how dumb they used to be, about the high they got from being able to go back to work in Mississauga or take a vacation in New York or fly to Europe without using drugs or alcohol, about reconnecting with their kids or fathers. Throughout, group leader Dave Pavlus prods them, his speech liberally sprinkled with the F-word and “eh” and stories that frequently involve the phrase “laughing our asses off” or “learning to be a stand-up guy.” One well-dressed, young Indo-Canadian man talks about the self-deception you get into when you’re using: “I’m behind this dumpster in the Downtown Eastside and it’s pouring rain and there’s another guy behind another dumpster. And I thought I was better than the other guy because my dumpster had a lid and his didn’t. I thought I’m not doing that fucking bad.” Heads nod, people laugh in recognition. Others tell stories about the positives of their new lives. One man, a big broad-shouldered guy with a grizzled beard and a baseball hat, says his 18-year-old son actually wants to spend time with him now. “I feel like a father today,” he shares in a shaky voice. “And I’m getting calls from his mom – we split up, like, 16 years ago – saying how proud she is of me.” Even more surprising, he says, is that when some driver cut him off recently when he was driving down Kingsway, he didn’t go ballistic. Repeatedly, the guys in the group say they’ve found meaning and gratitude in their lives and, over and over, how the program, this group, saved their lives. But there’s also a note of uneasiness today as the men refer cautiously to Harold. Harold, a nurse, had been at Last Door for almost 60 days and was doing well. Then he’d gotten a disability cheque just the night before and had taken off on a binge. Some of the men had seen him, blasted, at the SkyTrain station nearby. It was an unwelcome reminder of how easy it is to fall. Usually, people who bolt from the program do it in the first week, not after 60 days. There’s no tolerance for relapses when men are in the residential program at Last Door. No one had to tell Harold officially he was kicked out; he was packing his stuff that morning. PAVLUS, TAKING A BREAK in the front office after the high-energy session, admits the sessions are tough. But that’s his whole approach. Tackling an addiction in your life is tough. It can’t be done by checking into a posh place with no drugs, staying clean for 28 days and thinking you’re cured. The 50-year-old former coal miner and road builder went through 28-day treatment programs four times himself and saw what was wrong with them: “After I went to the Nechako Centre in Prince George, I got drunk on the way home. But I did quit cocaine that time.” Pavlus came to Last Door in 1983 as a volunteer at the tail end of his fourth and, it would turn out, final round of treatment. He took over the business in 1984 and has been running it ever since, although it was quickly converted to a non-profit. The centre began with two homes on Carnarvon Street before moving to the Eighth Street address in 1989. It has now expanded to include two walk-up apartments and three other sites in New Westminster. About 300 people go through the facilities’ 85 beds each year, ranging from Alcan employees and oil rig workers to dentists and lawyers to people coming out of Downtown Eastside alleys. Pavlus describes his fees as flexible. Some companies pay as much as $500 a day to place an employee there, others $250. Someone who’s paying the bills privately and who is strapped might be asked only to pay what he can afford. “I do a means test to charge different rates,” says Pavlus. He also has 16 beds that are funded by Fraser Health. Unlike Edgewood, which is heavy on medically trained staff, Last Door is almost completely dominated by people who are ex-addicts themselves, and it follows the therapeutic-community model. Their philosophy: clients don’t learn from experts. Instead, they learn from others like themselves who are further along. The focus is on slowly developing more orderly patterns in their lives – along with new interests, activities and friends. They test out their ability to live new lives during their residency, doing test runs for a few days at a time as they progress with the support of the group. And although Pavlus and his staff have completed courses that qualify them for the International Certified Drug and Alcohol Counsellor accreditation system, Pavlus says Last Door is really run according to his approach: “I train most of my staff.” He unhesitatingly acknowledges that about 25 per cent of people who go through his program relapse. But he adds that half of the relapsers get themselves to a recovery-support program to get back on track. <h3>The Birth of the 12-step Program</h3> Addiction treatment has always been, as author William White noted in his 1998 book Slaying the Dragon, “the synergy of religion, science, social movement and business.” Doctors started trying out treatments for alcoholism in the mid-1700s, ranging from skin blistering to cocaine. As the temperance movement grew, mutual-aid societies sprang up to help people deal with their drinking; Alcoholics Anonymous and the legendary 12-step program emerged from that in 1935. The idea of a 28-day residential program arrived with the alcoholism treatment pioneered by three Minnesota hospitals in the early ’50s. Like tuberculosis, addiction in the so-called Minnesota Model was treated as a disease that had reached an acute stage; when it reached that stage, you were sent off to a kind of sanatorium and then presumed to be well after that. Combinations of 12-step and residential treatment have been with us ever since, along with new strategies: cognitive behavioural therapy, therapeutic communities and more. The addictions world has also undergone a sea change since the days when alcohol was the focus of addictions treatment. “Ten years ago, it was 50 per cent alcohol problems here. Now everybody’s using a bunch of everything,” says Edgewood’s Hildebrand. “We have more single-user marijuana users than single-user alcohol users.” Legal painkillers, often used for people recovering from accidents or surgery, are also claiming a significant number of new addicts. And there are different kinds of people showing up. “Now I’m working with people who never had a problem with drugs in their entire lives, in their 40s to 60s,” says Pavlus. “Half of them get into addiction with legal pharmaceuticals, OxyContin, Percocet, morphine. Anything you ever heard of on the street, there’s a legal version now. And it’s combinations these days.” As the addiction patterns have changed, so have people’s ideas about what addiction is. It’s gone from being seen as a moral failing to something much more complex. Many addiction specialists now view it as a chronic relapsing disease similar to diabetes or hypertension. Recent research has also painted vivid pictures for the public about the way drugs alter brain functioning, bolstering the view of drugs as a malevolent force that overtakes people. But not everyone holds to that view. At the Portland Hotel Society, the Downtown Eastside housing association that runs Insite, the province’s much-debated supervised-injection site, and Onsite, the detox and treatment site now attached to it, staff emphasize working on all the other parts of people’s lives that make them turn to drugs. “Making the drugs absent from a person’s life doesn’t fix all the other problems,” says Portland director Liz Evans. Portland’s holistic approach includes providing art classes, camping trips, medical care and non-judgmental friendship and support to the group they work with: Vancouver’s troubled mix of homeless, mentally ill and addicted. If the person’s drug use declines, that’s good – but if people keep using, they’re not denied access to Portland’s services. Critics say this “harm-reduction” approach allows and even encourages people to stay addicted. Defenders say it keeps users alive and on a path to healthier lives, without the sense of failure that the abstinence-relapse cycle produces.  <div style="padding: 5px; float: left;"><img width="259" height="374" src="/files/BC-addiction-treatment-providers-3b.jpg" alt="" /> Lyle King has gone through five rounds of treatment in a 15-year battle with addiction. </div> THE ONSITE MODEL STANDS IN sharp contrast to the philosophy of places such as Edgewood or Last Door, which hold that success means total abstinence, not just from illegal drugs or alcohol but also from, for example, the heroin substitute methadone. At Last Door, even cigarette smoking is discouraged – one more addiction that needs to be beaten, in their books. That has led to tussles with B.C.’s health ministry, which insists that people on methadone should have access to government-funded residential treatment beds – an insistence that has led people such as Hildebrand and Pavlus to characterize the government as tilted toward harm reduction. Those on-the-ground differences are repeated at the upper levels of the addiction hierarchy. David Marsh, the soft-spoken researcher who was Vancouver Coastal Health’s lead addiction specialist until June (he left to become an associate dean at the Northern Ontario School of Medicine in Sudbury), has been a consistent advocate of harm reduction and is dubious about those who claim anyone can find the path to abstinence. Ray Baker is the pyrotechnical talker who runs a private consulting business in Vancouver, HealthQuest, focused on employer-paid addiction programs; he’s part of the group of B.C. addiction doctors that in 2008 wrote an open letter opposing the City of Vancouver’s harm reduction strategies, arguing that it undermines the health of addicted people in favour of public order. He insists that abstinence is possible for even the most damaged person in the Downtown Eastside. However, those differences, which often dominate the public discussion of drug treatment, disguise agreement among providers and experts such as Baker and Marsh on many other issues. In keeping with the treatment of addiction as a chronic disease, both Marsh and Baker see early intervention as key to heading off acute problems. They also think outpatient treatment can be as effective as residential programs in some cases and that what happens in treatment isn’t nearly as important as what happens after. Overcoming addiction isn’t just about quitting drugs; it’s about fixing all the other things in your life that made the drugs so attractive in the first place. “If I can’t use my drug of choice to comfort myself, what am I going to do to be happy? That’s what long-term treatment is about,” says Baker. Finding new activities and friends is a crucial part of what it takes to be successful. And there has to be ongoing monitoring, with consequences, says Baker. In the programs he consults for, employees with addiction problems are frequently monitored for up to 10 years by employer-paid caseworkers after they’ve been through treatment, monitoring that includes both counselling sessions and urine-testing. <h3>Early intervention and post-treatment support</h3> Employee-assistance programs have adopted those ideas of early intervention and post-treatment support. At Shepell FGI, which is the employee-assistance provider for 200,000 B.C. employees (and last year worked on addiction issues with 300 B.C. employees), there are now several stages in the addiction-treatment strategy. Anyone who calls Shepell to get help for any kind of problem has a counsellor include drug- and alcohol-use questions on the first visit to find out whether a depression, marriage or parenting problem is tangled up with a substance-abuse problem. If that’s the case, those people – along with streams of employees who have come to counsellors because they got hit with a drunk-driving charge, because they passed out in the company bathroom or because their boss has noticed their erratic behaviour – get the soft approach first. How much do you actually use? Have you thought about the long-term consequences? What do you think triggers you to use? How about trying to go for a week without a drink/toke/hit and see how well you do? Sometimes those questions are enough to get people to make immediate changes. If that doesn’t work, there’s a more intensive approach, including residential treatment if necessary. But that’s only the beginning. “We know that supporting someone to treatment is only one-third of what needs to be done,” says Shepell’s Barb Veder. “It’s after that that’s the most important, the relapse prevention.” Caseworkers keep checking back with employees and finding resources for support, if needed. That’s also increasingly the kind of language and strategy two of B.C.’s senior cabinet ministers are using. Health Minister Kevin Falcon and Housing Minister Rich Coleman, whose ministry provides addiction services as part of its increasingly numerous supportive-housing programs, are the two big spenders on addiction treatment in the province. In the past, says Falcon, “we have taken the acute-care approach. We wait until people become very sick and very addicted and then we try to look after them.” Coleman and Falcon, who represent neighbouring ridings in the Fraser Valley and who confer frequently on their joint file, are tackling the information deficit that researchers have identified. They now have their staffs at work analyzing what is actually working, based on long-term tracking through medical records. Those results aren’t public yet, and it’s not clear how far back in time they can track at this point, but their efforts, when finalized, will mark a giant step forward for addiction treatment in the province. Falcon says they’ve been discovering, for one, that early intervention is a powerful tool: “The work that my ministry has done shows the results from that are quite earth-shattering.”  <div style="padding: 5px; float: left;"><img width="259" height="186" alt="" src="/files/kevin-falcon_1.jpg" /> B.C. health minister Kevin Falcon.</div> FALCON IS PREPARING TO RELEASE B.C.'S second-ever 10-year plan on mental health and addiction this fall, which will incorporate changes based on what staff are discovering about effective treatment. Coleman is planning to quietly change funding for some of the addiction treatment his ministry now pays for. That is likely to shake up a part of the treatment world. As Coleman says bluntly, “I’m being told that some of the treatment facilities we fund are pretty ineffective. People are using again within seven days.” Still, he admits that it’s a tough go figuring it all out: “The trouble is trying to track the records. Those numbers are not easy to compute.” Everyone agrees that what has to change is what’s happened to people such as Lyle King for the last two decades: a cycle of addiction and relapse resting on a foundation of a messed-up personal life. King is only 39. Unlike many people who’ve been through what he has, he still looks and acts 39 with his round, unlined face and reflective way of speaking. An Ojibway from Ontario, he had his first beer when he was a toddler on his hard-drinking reserve in Penetanguishene. At 15 he ran away from home to look for his mother in Vancouver. Shortly after, he was supporting himself by selling drugs and working day-labour jobs. By his 20s, he’d married and moved to Kamloops, where he worked in construction but always sold drugs for extra money and, of course, did drugs as part of the scene. In the past 15 years, he’s gone through five rounds of intense residential treatment that took up almost three years of his life. Sitting in a back room at the Onsite facility on East Hastings, King tries to remember all the times and places, a roller-coaster of being sober and then using that’s motion-sickness-inducing. “The first time was in Kamloops. I went to the Phoenix Centre for detox, then the Kiwanis for treatment. I think I mighta lasted a couple of months there,” says King. His next try at treatment was five years ago, when he ended up in the hospital for 10 months after developing a hepatitis C infection and losing a lung, along with not taking care of his diabetes or, in fact, himself. In the hospital, he got on the meth program and then went to the Awakenings Recovery House in Surrey, where he stayed for nine months. Then, at some point, he ended up at the Salvation Army’s Miracle Valley near Mission for six months. Oh, and he went to some kind of treatment after drug court. He was homeless for a while. He was at Onsite for two weeks sometime last year, the detox on the second floor, but never made it to the third floor, the next phase. He went out and used for a while, then cleaned himself up on his own for a few weeks. On Feb. 2, he came back to Onsite, the third floor this time. <h3>Attempting a New Start</h3> Today, as he talks about his life, it sounds like an oasis of calm. In the morning, he starts with acupuncture and a meditation group. Then a 12-step meeting somewhere in the city, lunch and a long walk somewhere for a couple of hours. Another meditation session after dinner, then another 12-step meeting. Tuesdays he goes to an aboriginal drumming group near Commercial and Broadway. For the first time since he left his wife and children eight years ago, he’s reconnected with his kids on Facebook, using one of the computers installed in the third-floor common area. His plan is to go on to Round Lake in July, an aboriginal treatment facility in Armstrong, for six weeks. Then this fall, he’s hoping to get into a housing-support program managed by the Portland Hotel Society as part of their supported independent living program. If he qualifies for the rental support, he’ll live in an apartment in the West End and have regular visits from a support worker, someone who will check to see if things are going off the rails or going well. It’s a more intense kind of post-treatment regimen than someone from Edgewood or Last Door would follow. But it’s often what’s needed for people with a more profound history of hard times such as King. Another important difference: he might slip into using, but that won’t mean he gets kicked out of his housing. Instead, Portland support staff Tanya or Shane will work with him to help him get back to a place where he feels good about himself, to work on helping him transfer his drug-free routines and mindset from the protected setting of a treatment facility to the outside world. That’s the trick, say many addiction specialists. A lot of people do so well in treatment, it’s like they’re addicted to it. But they can’t seem to bring the routines they establish in treatment back to their ordinary lives. “I’m so determined on getting it right this time,” says King with a quiet sureness. “At Miracle I graduated, but I didn’t have no after-plan. I usually go get a job and my own place, ’cause I’m a workaholic, and then I quit phoning my support people. I’m doing a lot of things different this time.” 15310 at http://www.bcbusinessonline.ca Mr. Rogers, Cellphones Wreck Relationships http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/mr-rogers-cellphones-wreck-relationships Rogers customer sues when cellphone bill reveals illicit affair. http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/mr-rogers-cellphones-wreck-relationships#comments Business Sense cellphone bills cellphones Rogers Wireless Wed, 04 Aug 2010 13:45:00 -0700 Steve Burgess <h2 class="bcb-article-deck">Cellphones can do anything these days – including destroy relationships.</h2> Automated answering systems can only do so much. Say you want to call Rogers Wireless about a cellphone issue, and your call is directed to an automated menu. You might be instructed to press “one” for account information, “two” for technical support or “four” to report a lost or stolen phone. But say you’re calling to complain because Rogers switched your billing routine without your permission, consequently allowing your husband to see cellphone bills he wasn’t supposed to see, causing him to discover a series of very long phone calls to a mystery number, leading him to the realization that you, his wife, have probably been making hot monkey love with someone other than him, your lawfully wedded spouse, causing him to initiate divorce proceedings, causing you to call Rogers and complain. Is there a button for “Planning to sue our ass?” Thirty-five-year-old Gabriella Nagy of Toronto recently launched a $677,000 lawsuit against Rogers for invasion of privacy and breach of contract. Nagy says she had asked the company to send her cellphone bill to her home under her name. But without warning, Rogers began bundling her bill with the rest of the couple’s accounts for pay-TV, Internet and home phone, under her husband’s name. Nagy’s husband got suspicious when he saw the frequently called number and called it himself. The man who answered turned out to be a surprisingly honest fellow. He immediately confessed to having had an affair with Mrs. Nagy. Frankly, that’s the kind of service one rarely gets from calling an automated system: a helpful, straightforward individual who instantly provides useful information. If the cuckolded husband had phoned Rogers seeking the same info, he would have been put on hold until his wife left him from sheer boredom. Mrs. Nagy and her husband split in August 2007. In her statement of claim, she says the affair was over by that time and would not have been uncovered had it not been for Rogers’s negligence. It’s an issue for the courts, and the Nagys, to decide. But with new cellphone companies now invading B.C., the timing is interesting. Wind Mobile and Mobilicity have both decided to set up shop in Vancouver, with Wind launching in June and Mobilicity tentatively arriving this fall. Both newcomers are promising to undercut the Big Three – Rogers, Telus and Bell – on price. But what about services? Will Wind phones rat you out to your beloved life partner? When you’re busy hiking the Appalachian Trail in a cheap hotel, will Mobilicity help you keep it on the down low? Cellphones are arguably the most rapidly evolving consumer technology of the day. The increasing sophistication of smart phones has created a trend toward fewer cellphone calls and more data use – a little less conversation, a little more action. Unfortunately, Mrs. Nagy’s action was all there in the billing records. Mrs. Nagy’s problem with Rogers isn’t really about technology; it’s a customer service issue. Also a marital issue. Presumably those fall outside the range of services likely to be offered by new cellphone providers. But who knows? Phones can do a lot of stuff now. Few predicted that cellphones would replace loonies as a means of feeding parking meters or that mobile phones would be used to activate household appliances. It could be that, in the near future, cellphones will astonish us with innovative new ways to juggle an array of sexual partners. Your phone-of-tomorrow will concoct for you a believable alibi, even as it presets the oven for that perfect roast chicken. Far-fetched? It seems more likely than an increased focus on customer service. However many possibilities our little hand-held wonders will provide, the most far-fetched of all would be rapid access to a real human being. 15315 at http://www.bcbusinessonline.ca Ineffective Planning in Metro Vancouver http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/ineffective-planning-metro-vancouver Metro Vancouver's regional planning ignores basic economics. http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/ineffective-planning-metro-vancouver#comments Business Sense Greater Vancouver Regional District Jock Finlayson Metro Vancouver population Wed, 04 Aug 2010 13:44:00 -0700 Jock Finlayson <h2 class="bcb-article-deck">The fragmented nature of Greater Vancouver – 21 municipalities, one electoral area plus a stunted regional authority – raises questions about the region’s ability to prosper in the global economy.</h2> Metro Vancouver’s draft regional growth strategy published last fall, entitled Metro Vancouver 2040: Shaping Our Future, is more a preservationist document than a forward-looking framework for managing a dynamic region. With Greater Vancouver’s population set to climb by more than one million by 2030, it is odd that Metro’s professed strategy is tilted toward protecting the status quo. If the last two decades have taught us anything, it’s that steady population growth, high levels of immigration and changing global markets are sure to have a major impact on Metro Vancouver in ways that cannot be fully anticipated in 2010. Although the document makes passing reference to “a long-term commitment to economic prosperity, community well-being and environmental integrity,” in truth the Metro Vancouver report gives scant attention to the existing industrial structure, nor does it articulate the steps needed to provide for future prosperity. In the vernacular of the Sustainable Region Initiative – the planning framework adopted by Metro Vancouver in 2002 – the economic leg of the vaunted “three-legged stool” of sustainable development is missing in action, resulting in what charitably can be described as a lopsided “growth” strategy. The economic section of the draft plan is preoccupied with agriculture and ignores the many other industries that drive Metro’s economy and support 1.25 million regional jobs. Scarcely a word is devoted to manufacturing, advanced technology, tourism, the port or the film and digital media sectors. Readers could easily be left with the impression that farming is the dominant industry in Greater Vancouver, which is far from the case. Metro Vancouver’s army of planners and their largely disengaged political overseers have a habit of steering clear of issues such as competitiveness, the region’s connections to external markets and the impact of public policies on industry structure, job opportunities, business location and investment decisions. Aligning Metro’s growth strategy with advancing the economic well-being of Metro Vancouver’s 2.2 million residents ought to be a primary concern for policy-makers, especially given the region’s mediocre record in growth of real incomes and wages. With the highest housing costs in the country, Metro Vancouver falls below the Canadian average on employment earnings and household income. Yet nowhere in Metro Vancouver’s voluminous published materials does one find evidence that jobs and incomes are seen as important issues by regional authorities. The fragmented nature of Greater Vancouver – 21 municipalities, one electoral area plus a stunted regional authority – raises questions about the region’s ability to organize itself to compete and prosper in the global economy. There is a basic mismatch between our interdependent regional economy on the one hand – a network of innovative firms, post-secondary institutions, mobile workers and the transportation and other physical assets that ensure connectivity – and, on the other hand, the administrative hodgepodge of often myopic municipal governments. The economic geography of Greater Vancouver is metropolitan in scale, not municipal, and this affects commuting patterns, the movement of goods and services, the labour market, energy demand and the role of universities and colleges. To effectively manage growth and reach its potential as an emerging global city-region, Metro Vancouver should be looking at more streamlined, efficient administrative and service arrangements, as well as a directly elected regional government with a mandate defined in regional terms. There is also a compelling argument for shifting to a smaller number of discrete municipal units in place of the profusion of cities, districts and towns that taxpayers in the region are burdened with today. 15305 at http://www.bcbusinessonline.ca Jason McLean at the Helm of VBOT http://www.bcbusinessonline.ca/bcb/top-stories/2010/08/04/jason-mclean-helm-vbot The new – and youngest ever – chair of the Vancouver Board of Trade. http://www.bcbusinessonline.ca/bcb/top-stories/2010/08/04/jason-mclean-helm-vbot#comments Top Stories Bill Clinton David Jordan Jason McLean Jean Chretien Pope John Paul II The McLean Group UBC Law School Vancouver Board of Trade Wed, 04 Aug 2010 13:44:00 -0700 David Jordan <h2 class="bcb-article-deck">Jason McLean: CEO of a successful conglomerate, chair of the Vancouver Board of Trade, former adviser to Jean Chrétien – and only 36.</h2> When 36-year-old Jason McLean took over as chair of the Vancouver Board of Trade on June 17, he was the youngest person ever to be named to that position. He was also likely the only chair of that august organization to be living with his parents. McLean jokes about his living situation when we meet in his spacious Gastown office overlooking the rail yards and SeaBus terminal. No, he’s not a boomerang kid returning to the parental nest, he explains with a laugh; he and his fiancée are renovating their Point Grey home and decided to camp with Mom and Dad a few blocks away until the dust settles. It’s been a year of milestones for McLean: in April he was named president and CEO of the family-owned McLean Group of Companies, and he and his girlfriend announced their engagement in June, the same month he stepped into the chair’s office at the board of trade. If his life trajectory has shifted into overdrive, McLean shows no signs of strain. He appears relaxed and confident as he describes how he came to oversee a sprawling conglomerate with tentacles in real estate, film production and aviation. The McLean Group began as a side project when Jason McLean’s father, David McLean, a lawyer, began dabbling in real estate off the side of his desk. In 1972 he formed the first of several companies that would eventually fall under the McLean Group banner. Today the family’s most visible holding is the 12-hectare industrial site in East Vancouver that is home to Vancouver Film Studios. The McLean Group got into film in 1997 when Jason’s younger brother, Sacha, thought there might be a future in renting facilities to film companies. Today the firm is no longer just a landlord; it has built 10 sound stages and developed a suite of businesses servicing the industry, including Blackcomb Aviation LP, which started out ferrying crews to filming locations and today is a full-service air charter and maintenance company. Sacha was the first of the two McLean siblings to join the family company, stepping in to oversee operations in 1996, after his father was hospitalized with a heart condition. (The health scare proved less serious than feared; today David McLean keeps a hand in the company as chair, while his wife, Brenda McLean, serves as vice-chair.) At the time, Jason McLean was just entering UBC law school, and a fateful phone call from the prime minister’s office in 2000 would further delay his entry to the family business: Jean Chrétien was looking for someone to do the advance work for his international travels. “So I ran away and joined the circus,” McLean jokes, pointing to a series of framed photographs on the wall of him accompanying Chrétien: waiting to greet Pope John Paul II as the papal helicopter touches down in Toronto, in the still-smoking crater of the World Trade Center in 2001, with Bill Clinton at the former president’s New York office. McLean returned to Vancouver in 2002, mainly because he could no longer resist the call of the family business, but also because he missed the skiing and mountain climbing. His initial contribution to the firm was as in-house counsel. “Being a lawyer was a great way to stick your nose into every aspect of the business,” he explains, since every contract crossed his desk. A family-business program at Harvard University prepared him to take the helm, he says, helping him realize that running a business is about more than numbers and finance; it also depends on people and relationships. That said, overseeing complicated business deals remains one of McLean’s key contributions to the business; he takes credit for closing the deal in 2008 that would see the McLean Group become landlord to Vancouver’s first Wal-Mart. McLean looks back at his days in politics fondly, recalling the thrill of touring the world with a prime minister still at the top of his popularity, in an era of a majority government and budget surpluses. Still, he has no regrets about leaving Ottawa. “I love what I’m doing,” he says simply. A return to politics is not in the cards, he says. “Not at the moment.” 15306 at http://www.bcbusinessonline.ca B.C.'s Link to Arizona Real Estate http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/bc039s-link-arizona-real-estate There's much more than golf and time-shares linking B.C. and Arizona. http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/bc039s-link-arizona-real-estate#comments Business Sense arizona B.C. Golf macdonald development corp. matt o'grady real estate time-shares Wed, 04 Aug 2010 13:44:00 -0700 Matt O'Grady <h2 class="bcb-article-deck">When many British Columbians hear “Arizona,” they think golf and time-shares. But there’s much more than that linking our two jurisdictions.</h2> <author></author>Later this month, Arizona’s two major political parties will nominate their candidate for November’s gubernatorial election. The defining issue in both primaries has been Arizona Bill 1070: a controversial measure, signed into law on April 23 by current governor (and presumed Republican nominee) Jan Brewer, that makes it a crime for an alien to be in Arizona without carrying federal registration documents. Critics call the new law racial profiling in a state where 30 per cent of the population is Hispanic, twice the national average, but the law remains popular at home; even the likely Democratic standard-bearer, Attorney General Terry Goddard, has said he won’t repeal it. In Arizona – with an unemployment rate hovering just below 10 per cent, up from four per cent in 2007; where one in 169 households received a default notice in May, the second-highest foreclosure rate in the U.S. and more than twice the national average; and where the state’s total debt load now tops $10 billion, five times what it was a decade ago – much policy attention and public anger is now being directed southward. Cheap labour from illegal Mexicans and cheap goods from maquiladoras are taking jobs from hard-working Arizonans – or so goes the argument. Mexico has become the whipping boy upon which populist fury can beat unencumbered. And yet as far as the future is concerned – where the requisite products, talent and investment capital, the very building blocks of Arizona’s climb from deep recession, might be found – Arizonans would be well advised to look north, well north, for some answers. That, at least, is the hope expressed by Glenn Williamson when I meet him for breakfast, on a sunny and warm March morning, at the W Hotel in Scottsdale. Williamson, 53, is the founder and CEO of the Canada Arizona Business Council (CABC), a private sector group sanctioned by the Canadian government and the State of Arizona to build trade between the two jurisdictions. Formed in 2004, the CABC – which consists of about 130 by-invite-only members, including Vancouverite Peter Thomas, founder of Century 21 Real Estate Canada Ltd. – helped to increase bilateral trade by just over $1 billion in its first four years of operation (before the recession hit) to $3.2 billion. B.C. represents an estimated $500 million of that total. “Six years ago, I woke up one morning and said, I know Canada has an influence down here and that it’s bigger than most people think. So I went to the Canadian government and asked, Why aren’t you guys here?” explains Williamson. “They finally agreed to create a presence, but it was going to take a year, so I got a bunch of guys together, we ponied up $600,000 of our own money and created this YPO-type organization.” Williamson, born to an establishment Anglo family in Montreal (his grandfather, T.H. Atkinson, was briefly chairman of the Royal Bank of Canada in the early ’60s), spent his formative years in Canada, working across the country in the travel-resort business before coming down to Phoenix in 1987 to become senior vice-president of operations at the Vancouver-listed company International Laser Technology. In 2000 Williamson, in partnership with Jonathan Birks (of Montreal’s jewelry-store family), established Nest Ventures LLC, a private-equity firm that works primarily in the biotech, communications, energy and e-finance sectors. As Williamson explains it, Arizona businesses have a higher interest in Canada these days than in Mexico, and that wasn’t the case six years ago. “The universities here didn’t have any Canadian program; they had Mexican programs. The Department of Commerce had no trade office in Canada; they had three trade offices in Mexico. The governor used to go to Mexico but never went to Canada. We brought the governor up; we brought the mayors up. We managed to create a balance and tap into the fact that Arizona’s growing market wanted to be high-tech. High-tech is Canada, Japan, the U.K.; it’s not Mexico.” While companies such as Vancouver’s Metrobridge Networks International Inc. and InNexus Biotechnology Inc. and Victoria’s Carmanah Technologies Corp. have a significant presence in the Arizona market today, B.C. businesses historically have made their name and fortune here with natural resources and raw materials. And despite the inroads made by tech and biotech companies, that remains true to this day. Twenty-five B.C.-based mining firms have operations in the Copper State, while the single largest export from Canada to Arizona remains building materials, most of that coming from B.C. And with those building materials have come western Canadian developers by the planeload, starting in the 1970s with Peter Thomas and continuing today with builders such as Vancouver’s Avenir Group and Anthem Properties and Langley’s WestStone Properties Ltd., each hoping to capitalize on one of the fastest-growing regions in North America. THE DRAMATIC RISE AND FALL of Arizona real estate created great wealth and also great misery. The mushrooming Greater Phoenix area, home to two-thirds of Arizona’s 6.6 million residents, saw home prices jump more than 101 per cent between 2002 and the 2006 market peak as massive in-migration paired with lax loan regulations drove up the ante. But then the music stopped and prices dropped, 52 per cent from that 2006 peak through the third quarter of 2009, the second-worst decline in the States after Las Vegas. Many homeowners were forced off their properties, and by the fourth quarter of 2009 nearly 62 per cent of single-family home mortgages in Phoenix were underwater, with homeowners owing more on their home loan than the property was worth. <div class="bcb-sidebar text-layout" id="bcb-article-sidebar"> <h3>Scottsdale: The City Above Phoenix</h3> Greater Phoenix, on first glance, is an inseparable amalgam of sprawling low-rise communities. But Scottsdale, a city of 250,000 just northeast of Phoenix’s downtown, has always had a distinct identity all its own. This is where, at the foot of the McDowell Mountains, the renowned architect Frank Lloyd Wright set up shop in the late 1930s, creating Taliesin West, which has been a source of inspiration and education for architects (including Vancouver’s Arthur Erickson, who spent time there in the 1950s) for decades. Today Scottsdale is best known as a premier golf and spa destination, attracting tens of thousands of U.S. and Canadian snowbirds each winter (as well as the unfortunately named Waste Management Phoenix Open golf tournament each February). And befitting a high-end resort community such as this, there’s no shortage of luxe accommodations in Scottsdale, from the regal five-diamond Fairmont Scottsdale in the north to the sleek and modern W Hotel in the south. More info at <a href="http://www.experiencescottsdale.com ">experiencescottsdale.com </a>  </div> What was a disaster for many proved a great opportunity for others. One of the self-described opportunists is developer Rob Macdonald, president and founder of Vancouver-based Macdonald Development Corp. Macdonald first established a presence in the Arizona market in the late 1980s, gobbling up a series of Phoenix apartment buildings (as well as properties in Atlanta, Seattle, San Diego and Sacramento) in the wake of the U.S. savings and loans collapse, when many highly leveraged lenders went belly up and their properties got resold by the U.S. government. “We were buying buildings for a third of replacement costs. So replacement costs at that time were, say, $65 a foot; we were buying for $20,” says the 1980 UBC commerce grad, clearly relishing the story. “Assets were cheap.” Back then Macdonald’s privately held company was primarily in the rental property market, purchasing apartment buildings in a down market, fixing them up, then selling when things rebounded. While that’s still a large component of what Macdonald Development does, the company has also moved in recent years into the new-home market, developing the Hudson condominium project in downtown Vancouver and several single-family tracts in Qualicum Beach, Nanaimo, Parksville, Victoria and Kelowna. When the subprime-mortgage crisis hit, Macdonald once again turned his attention to troubled U.S. markets, pouncing when Century Plaza, a 145-unit luxury condo conversion in midtown Phoenix, went into foreclosure in May 2009. Macdonald bought the project for $16 million, a fraction of its original price, and rebranded it One Lexington. While units that pre-crash were selling for more than $500 a square foot are now going for only $240 a square foot, Macdonald – who occupies one of the units himself – says he expects to sell out by mid-2011 and realize a net profit of about $75 a foot. Macdonald – who is also a major shareholder in David Aisenstat’s Keg Restaurants Ltd., which has four outlets in the Greater Phoenix area – is bullish on Arizona. He says it’s an easy place to do business, because everything is pretty similar in terms of law and business culture. (“It’s way easier to get building permits here,” he notes. “In Vancouver it’s a nightmare.”) Most importantly, he says, the market fundamentals remain strong. “My broad view is that it’s going to come back and it’s going to do well. The city has had pretty regular growth for the past 40 years. It’s a place where people like to live; call it the value of the sun. It’s going to have continued in-migration from across North America. And that’s just not going to stop; it’s going to continue for the rest of time.” About six kilometres to the northeast of One Lexington, tucked into a bland late-’90s industrial park in East Phoenix, lies the Arizona outpost for Foreign Affairs and International Trade Canada. Rick Stephenson is the government’s senior trade commissioner for Arizona and New Mexico. Prior to taking control of the Phoenix office in 2008, the career civil servant was based in Vancouver for almost three decades. “When I was living in Vancouver, we had a condo in Scottsdale, long before I knew I’d ever get to live and work here,” says Stephenson from his bright consular boardroom, with views of Camelback Mountain and the McDowell Sonoran Preserve in the distance. “We did the typical thing: we bought a condo, furnished it, came down and used it at Christmas, then rented it out to snowbirds for the rest of season.” In 2005 the Canadian government decided to open seven new consulates-slash-trade offices across the U.S., and Phoenix was one of them. “We opened these offices five years ago to promote trade, to promote investment and to promote research partnerships between Canada and institutions in this market,” explains Stephenson. “One of the key reasons we opened in Arizona is that there’s a lot of research going on in this market, and part of our job is to identify key areas of research – particularly where they’re close to commercialization of innovation – where there’s an opportunity for Canadian institutions and businesses to partner with that research or leverage research dollars.” A big initiative the consulate has been working on in recent years relates to border security technologies. In 2007 Stephenson and his office helped broker a partnership between UBC, SFU and the University of Arizona to develop a centre of excellence at UA in border security and immigration, with $5 million in new research money directed toward issues relating to the border and commercialization. In terms of new business development, Stephenson points to a major project now underway by Phoenix-based Iridium Communications Inc., which manages a multibillion-dollar satellite system. Over the next five years, the company is due to take down the 66 satellites they have in outer space and replace them with new ones. “That’s a $2- to $3-billion project,” says Stephenson, “and MDA [MacDonald Dettwiler and Associates Ltd. of Richmond] has a good chance of getting a good chunk of that business.” But MDA is a global player with tentacles everywhere. The biggest obstacle right now, admits Stephenson, is getting small to medium-sized Canadian companies to make that first tentative step away from home. “Not to beat up on Canadian companies, but if you want to be a global player you’ve got to get off your ass and pursue the global business. If you’re a Canadian company and you want to grow, you’re going to have to export or invest abroad. We find a lot of Canadian companies who will phone us or email us, but to get them on an airplane and come down here and look for the business? That’s still the thing that challenges us the most.” 15307 at http://www.bcbusinessonline.ca Tourism Threatens Water Security in Okanagan http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/tourism-threatens-water-security-okanagan The Okanagan consumes twice Canada's per-capita's rate of water. http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/tourism-threatens-water-security-okanagan#comments Business Sense okanagan valley Osoyoos Lake pacific agri-food research centre Remy Scalza wine industry wine tourism Wed, 04 Aug 2010 13:44:00 -0700 Remy Scalza <h2 class="bcb-article-deck">Are wine-fuelled tourism and migration threatening water security in the South Okanagan?</h2> <author></author>In the bone-dry southern tip of the Okanagan Valley, just outside the town of Osoyoos, a network of footpaths winds through thickets of sage and antelope brush. Braving the midday sun, a few hardy hikers – red-faced and sweating – push down the trail, leaving faint footprints in the sand and keeping an eye out for the rattlesnakes that make their home here, in Canada’s only desert. What awaits around the final turn in the trail must first seem illusion, a trick played on the eyes by the shimmering South Okanagan heat. Abruptly, brush gives way. Neat rows of vines rise from the desert floor, leaves interlacing into a vast and improbable tapestry of green. Here the path dead ends, sparse foot traffic giving way to the steady pulse of people and cars in the parking lot of Spirit Ridge Vineyard and Resort, one of a wave of new wineries and resorts to open in the South Okanagan in the last five years. In shorts and visors, visitors by the mini-busload spill into the wine shop, restaurant and wellness spa. Out back small children throng an oasis of pools, while duffers hack away on the Technicolor greens of a nine-hole course edged by sand and sagebrush just beyond. Surrounding it all, running right up to the 226 desert suites and vineyard villas at the sprawling resort, are grape vines: Pinot Blanc and Pinot Noir, Chardonnay and Merlot, ripening in the summer sun. These are heady times for the wine industry in the South Okanagan. Over the last decade, vineyard acreage has more than doubled in the region, with some 1,940 hectares of vineyards and more than 30 wineries now stretching from Osoyoos Lake in the south to the imposing bulk of McIntyre Bluff in the north. The South Okanagan now accounts for more than 50 per cent of the wine grapes grown in B.C. and produces some of the country’s very best wines, drawing wine tourists and amenity-driven homebuyers in increasing numbers each year. But all this bounty comes from what is, in fact, the northernmost tip of the transcontinental Great Basin Desert, a region where annual rainfall averages a miserly 25 centimetres a year, less than a quarter of Vancouver’s total. An unusually wet spring has only masked deeper water woes in the region; years of drought and shrinking winter snowpacks on the mountains have left the South Okanagan dangerously dry. And while grape vines are hardly water guzzlers – they consume less water than the orchards they replaced, for instance – the magnetic pull that vineyards exert on travellers, retirees and homebuyers has led to a tourism and recreational real estate boom, putting additional strain on already taxed water resources. With the climate edging ever hotter and the population projected to continue growing, water management and wine tourism in the South Okanagan are proving a difficult pairing. Among the most spectacularly parched spots in the region is the Black Sage Bench, a swath of rocky desert along the valley’s southeastern edge where Tinhorn Creek Vineyards has one of its two properties. “The worst soils in the world make the best grape growing areas,” explains Andrew Moon, Tinhorn’s 37-year-old vineyard manager. A recent émigré from Australia, Moon grew grapes for some of the largest vineyards in his home country, until a seven-year drought that started in 2003 devastated the industry. “The desert climate is ideal for winemaking,” he says. “But you’ve got to have irrigation.” IRRIGATION HAS LONG BEEN the lifeline of the Okanagan Valley. Scant rainfall leaves the region dependent for its water needs on winter snow, which accumulates in the higher elevations, then melts in the spring and is stored in reservoirs. For much of the last 100 years, progressively ingenious irrigation techniques have allowed planners to harness these modest water resources and sustain successive waves of transformation in the valley, first from ranchland to orchards and now to vineyards. Today an ambitious project is underway at Tinhorn to replace overhead sprinklers with more efficient drip systems. Computer-controlled pumps now deliver precise doses of water directly to individual vines on four of the winery’s 53 hectares. The remaining acreage is scheduled to be converted within the next four years. “The scary thing is that once you convert overhead irrigation to drip, you’re looking at 60 to 70 per cent water reduction. It’s absolutely massive,” says Moon. The need for wineries to conserve has never been more acute. On the heels of a drought last year, the South Okanagan is anticipating another dry summer. For the second consecutive year and the sixth time in the last decade, dry conditions have prompted a drought declaration on Osoyoos Lake. Even outside the dry South Okanagan, water woes are evident. In April, before the last snowflakes had fallen in the mountains, the North Okanagan community of Vernon took the unprecedented step of declaring a Stage 3 water restriction, banning the filling of pools and limiting lawn watering to one day a week. Although a wet May and June temporarily eased water worries, the prospect of future shortages has not diminished. “Water is absolutely something we have to be concerned about,” says Denise Neilsen, a research scientist at the Pacific Agri-Food Research Centre in Summerland who studies the relationship between climate change and water demand. “Higher temperatures lead to a longer growing season and a longer period of time for irrigation. We’ve already had several instances of water purveyors getting into trouble because they didn’t have enough water to supply the licensed demand.” Neilsen sits on the stewardship committee at the Okanagan Basin Water Board, the group entrusted with making sure the valley doesn’t run dry. Made up of representatives from the region’s various water districts, as well as stakeholders from First Nations communities and independent experts, the board was responsible for commissioning a $3.2-million water assessment of the region back in 2004. Now, after years of research, results are finally trickling in. And they’re not good: climate change, a growing population and profligate water use have conspired to create a perfect storm in the Okanagan Valley, and the threat to water security in the years ahead is both real and growing. “Because of the potential climate warming, we’ll have more precipitation falling as rain rather than as snow,” says Neilsen. “Less snowpack and earlier melt means we’ll have to begin taking water out of reservoirs earlier.” These predictions are, in fact, already proving accurate: this year snowpacks in the Okanagan were at record lows, on average only 65 to 85 per cent of their normal size. Coupled with this diminishing supply is a rapidly accelerating demand for water. Agriculture is currently the biggest user in the Okanagan, consuming 55 per cent of all water, or a total of 120 billion litres every year (by contrast, Metro Vancouver required about 400 billion litres of water for agricultural, residential and commercial uses combined in 2008). Vineyards soak up roughly 13 per cent of the agricultural water used in the Okanagan. Far more water is lavished on pasture land and orchards. But with vines have come the real sponges: resorts and housing developments. WHILE FARMS IN THE OKANAGAN use around 660 millimetres of water to irrigate a hectare of land, golf courses, parks and domestic landscaping consume an average of 900 millimetres of water per hectare, for a total of 68 billion litres annually. And it is precisely this type of development – large-scale resorts and sprawling subdivisions – that the South Okanagan’s arrival as “Napa North” has encouraged. Prior to the march of vines across the region, the South Okanagan’s primary allure for visitors was its balmy summer weather. “In the ’70s, people went down to the Okanagan for the sun and the sand,” says John Schreiner, a former Financial Post reporter and the author of The Wineries of British Columbia. “Outside of July and August, it was a very sleepy place.” The short tourist season acted as a natural check on development, with lodging limited mostly to RV parks, campgrounds and roadside motels. Then, in 1981, the proprietor of Kelowna’s expansive Mission Hill Winery, Anthony Von Mandl, gave a landmark speech before the chamber of commerce with a different idea for development. “He laid out this vision of vineyards and wineries and bed and breakfasts up and down the valley,” Schreiner says. “I’m sure they must have thought he was smoking something.” Von Mandl’s words proved prophetic. In 1981 the first Okanagan wine festival was held, a two-day event attracting fewer than 1,000 wine lovers. Today there are four separate festivals, one for each season, with some festivals lasting longer than a week and featuring hundreds of separate activities across the valley. Events at the fall festival alone now attract upward of 170,000 visitors. “The prime focus was always about getting bodies in restaurants and hotels,” says wine festival founder and founding chair of the B.C. Wine Institute Harry McWatters. “The idea was to use the wine industry as a vehicle to promote tourism in the shoulder seasons.” With the influx of wine lovers came a corresponding upswing in upscale lodging and dining options. Bed and breakfasts and winery villas multiplied in the once rustic South Okanagan, catering to a demographic both older and wealthier than earlier visitors and less inclined to bed down in the great outdoors. The 1990s saw explosive growth in tourism infrastructure, spurred in part by the burgeoning renown of Okanagan wines and also by a surfeit of Alberta oil money, which brought in well-heeled travellers as well as developers keen to capitalize on the region’s new-found popularity. While figures specifically for the South Okanagan are not available, from 1995 to 2008 room revenues in the entire Thompson Okanagan region more than doubled, from $122 million to $278 million. Much of that growth can be attributed to the transformation of the South Okanagan. Just within the last five years, three major resorts have opened: the 153-suite Watermark luxury resort, the 112-suite Walnut Beach resort and Spirit Ridge, with its 226 rooms and villas. “The wine tourism industry was able to integrate with the cultural, accommodation and culinary industries in a way that previous forms of tourism hadn’t been able to,” says Donna Senese, a professor of geography at UBC Okanagan who studies the unique convergence of wine, tourism and amenity migrants (people who relocate for lifestyle rather than work-related reasons). A transplant from the vineyards of Niagara, Ontario, Senese has spent 16 years in the Okanagan and lives within a kilometre of three wineries. “The thing is that wine, unlike apples, has this romantic cultural appeal,” she says. Indeed, while wine has brought tourists, its unique allure has also encouraged a more permanent migration. “There’s been a huge influx of people for retirement and second-home purchases,” Senese says. “Who doesn’t have the dream of retiring to a vineyard and a winery?” Owing partly to this influx, the population in Osoyoos has increased by 16 per cent since 2001, a growth rate that rivals that of boom town Kelowna (whose population is up 25 per cent over the same period) in the Okanagan. New developments and subdivisions perch on the edge of wineries, promising vineyard views and a wine country lifestyle in their promotional brochures. “If you look at real estate developments, a lot of them are either portraying an image of a winery or locating as close to vineyards as they can,” Senese says. “As long as we have an aging baby boom with money and a dream – and we almost all have the same dream – then the Okanagan is going to continue to develop.” WITH ALL OF THESE NEW HOMES, set along the leafy edges of vineyards and next door to golf courses, comes water usage. And Okanagan residents, eager to maintain green lawns in the brutal desert heat, are generally extravagant with their water. The daily water consumption of an Okanagan home user is a whopping 675 litres – more than twice the Canadian average, in a region that scrapes by on the lowest per-person water supply in Canada. The prospect of simply running out of water in this context isn’t fiction. In fact, it’s already happened. Pacific Agri-Food Research Centre scientist Neilsen recounts what took place in Summerland in the summer of 2003 when forest fires ravaged the region. As Summerland’s upland water reservoir dipped dangerously low, the municipality decided to simply stop sending water down Trout Creek, a key waterway that feeds into Okanagan Lake. The trout that give the creek its name were killed and kokanee were prevented from swimming upstream to spawn. Ultimately, Fisheries and Oceans Canada stepped in, ordering the release of enough water to maintain fish habitats. But the myth of a bottomless well in the Okanagan was shattered. Increasing competition between agricultural and urban water uses means that acute water shortages like this are becoming more commonplace. In recent years, dry conditions have prompted water suppliers to cut back on water allocated to growers by up to 20 per cent, potentially compromising yields of grapes and tree fruits. “So far we’ve been able to avoid crop losses,” Nielsen says. “But the feeling is that we’re on the verge of not having enough water to meet the demand for crops.” Water shortages also directly impact home users: in many municipalities, progressively stringent restrictions have been imposed as reservoir levels dip lower and lower, with outdoor watering limited to alternate days, one day a week or – in extreme instances – banned outright. But the costs extend beyond just brown lawns and dry shrubs. Levels of water in Okanagan Lake and the network of smaller lakes in the valley are maintained by regional water managers within an exceedingly narrow range. Under severe drought conditions, lake levels will drop below normal operating windows, turning lakefront real estate into parched mud flats and leaving piers and boats high and dry – consequences that would directly impact both the tourism and real estate markets. Then there’s the perennial loser in the Okanagan’s water power struggle: the environment. In the face of growing agricultural and domestic demand for water, maintaining flows in the Okanagan’s streams and rivers is – as it has been in the past – a low priority. “Back when water licences were first given out, planners weren’t thinking about whether or not streams would have enough water and be able to support life,” Neilsen says. At the same time, increasing water use has progressively sapped the region’s groundwater supplies and drawn down aquifers. Wells in parts of the South Okanagan have already begun to run dry. All of which does not bode well for the region’s fragile and diverse ecosystems, which range from alpine tundra in the mountains to ponderosa pine and grasslands lower down and, of course, desert at the valley bottom. All told, some 250 species are at risk in the South Okanagan and neighbouring Similkameen valleys, from Western bluebirds and California sheep to pallid bats and spadefoot toads. Their fate is intimately tied to the management of the region’s dwindling water resources. High above the South Okanagan, not far from the bustle of downtown Osoyoos and its lakeside resorts, the Golden Mile hiking trail climbs through wiry grasses and ponderosa pines, working its way along a desolate mountain ridge and past a gold-mining ghost town. At a break in the trees, the valley below comes into view, a patchwork quilt of green vineyards spreading south to the silver glint of Osoyoos Lake. Even in the midst of this idyll, however, are warning signs. Marlowe Sam, a member of the Wenatchi Indian Band who lives on the nearby Penticton Reserve, knows the mountains of the Okanagan well. And he’s concerned. “There have been lots of changes in the mountains, especially when you go up and look at plants,” he says. “The springs have been drying out. It’s just so dry out there.” After working on ranches all his life, Sam decided to go to college at age 51, when a back injury left him hobbled. For the past seven years, he has studied the intimate connections between First Nations peoples and water in the Okanagan and is now nearing completion of his doctorate. “People aren’t going to stop coming to the Okanagan,” he says. “The question is, Where are we going to get the water?” The answer isn’t easy to find. Options being weighed for expanding existing supply include everything from constructing costly new upland reservoirs to diverting water from the neighbouring Fraser and Shuswap watersheds. But for environmental consultant Brian Guy, who managed the Okanagan Basin Water Board’s recent study, a key part of the solution is conservation. “There’s plenty of low-hanging fruit, starting with things like domestic use for lawns and landscaping,” says Guy. The implementation of water-saving by-laws during drought periods, the use of reclaimed waste water on golf courses and the conversion to more efficient drip irrigation are all steps in the right direction. Educating homeowners about lawn alternatives such as xeriscaping, using drought-tolerant native plants, is also crucial, Guy says. But the key may lie in tapping users’ wallets. “One problem is that water is relatively underpriced,” Guy says. “People barely notice what they use.” In the town of Osoyoos, where water usage is unmetered, homeowners pay a flat rate of $267 per year for water. “With a flat rate there is no financial incentive to conserve water,” he says. “It’s like paying $100 in advance and then being allowed to go into the liquor store every day and take whatever you want.” For Marlowe Sam, however – who now sits on a UN working group for indigenous water rights – the solution to the South Okanagan’s water dilemmas goes deeper than dollars and cents. As part of his dissertation, he’s poring over First Nations’ oral narratives to uncover customs and traditional laws surrounding water. His research keeps turning up the same conclusion. “It’s really straightforward. In the oral narratives, water is a sacred gift,” he says, explaining that water needs to be respected and conserved, rather than treated as an expendable commodity. “Everything around us needs water. All life is dependent on water. We have to first of all recognize that.” 15308 at http://www.bcbusinessonline.ca A New Approach to Industrial Taxes in B.C.? http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/new-approach-industrial-taxes-bc The days of homeowner tax breaks paid for by industry may be numbered. http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/new-approach-industrial-taxes-bc#comments Business Sense B.C. castlegar industrial taxes manufacturing taxation Wed, 04 Aug 2010 13:43:00 -0700 Peter Severinson <h2 class="bcb-article-deck">The days of homeowner tax breaks paid for by industry may be numbered.</h2> The City of Castlegar’s 2009 property taxes were due at 4:30 p.m. on July 2. At 2:30 p.m., Mayor Lawrence Chernoff got a call from his chief financial officer, saying he’d just received a letter from Zellstoff Celgar, the pulp mill that brings in roughly 45 per cent of the small city’s revenue. Celgar declared it was suing the city for unjust taxation and refusing to pay the $3.2 million the company owed that year. “You couldn’t get more last-minute than that,” Chernoff says. “It was definitely not a great situation to be in.” Similar scenes were taking place in other B.C. resource towns that summer, including Powell River, Campbell River and Port Alberni, as major industry owners staged a dramatic tax revolt. It was a nightmare for Chernoff and his staff. Castlegar had its own bills to pay, Chernoff says: to the regional district, the province, schools and others. The regional district at one point threatened to shut down all its services – including the rec centre and bus system – if it didn’t get paid, Chernoff says. And yet, despite the tough spot Chernoff found himself in, he has a lot of sympathy for companies such as Celgar. “For many years, these industries have paid a fair hunk of money,” he says. “And finally, as the economy turned, they turned, and they’re saying, ‘This is no longer fair.’” Robert Bish is not surprised by industry’s show of defiance. The professor emeritus of economics and public policy at the University of Victoria first looked into the problem of industrial property taxation in the late ’90s, when forestry companies started getting into trouble. “I was shocked,” he says. “I didn’t realize it had got that far out of line.” In a 2004 report, Bish shows that the median property tax for a major industry in B.C. is about four times higher than for a resident. He compares this to provinces such as Saskatchewan and Manitoba, where the difference is less than two to one, and to U.S. states where industrial taxes are actually lower than those for residents. There’s no single explanation for how B.C. got to this state, Bish says, but rather a series of conditions have compounded the problem over decades. One major difference between B.C. and other regions is that in 1983 the provincial government decided to allow municipalities to set their own tax rates, whereas other regions have legislated limits. B.C. also uses more categories of properties than most (nine, compared to three in Alberta, for instance). This gives municipalities the opportunity to overtax groups with a lot of income (such as industry) and subsidize groups with a lot of votes (such as residents). It’s hard to argue that B.C. residents can’t afford to pay more property tax than they do now, he adds. When he looks at the rest of North America, where cities don’t have such high industrial taxes, “they’re doing just fine,” he says. Of course, the tax discrepancy isn’t a problem when industries are awash in profits, Bish says. But these taxes make capital investments, such as buying new machinery, more expensive, leading to inefficient facilities that will be the first to fall in a tough, competitive market. “It’s a Greek tragedy,” he says. “You sit back and you watch it, you know the results aren’t going to be good but nobody seems to have the ability to do anything about it.” In 2006 the provincially appointed B.C. Competition Council advised the province to put in limits on the taxation powers of cities – a recommendation the government ignored. Dan Miller, the former NDP premier and cabinet minister who co-chaired the council, says there’s a strong culture in B.C. of empowering municipalities, but he’s convinced it’s going to take provincial action to get any real change. “Municipal governments aren’t the same as provincial governments; they’re really administrative,” he says. “They’re not really equipped to change in any dramatic fashion to world economic conditions.” And besides, Miller adds, municipal leaders are elected by residents, and it’s going to be hard for any city councillor to get elected on a platform of raising residential taxes. After almost a full year of tense negotiation, Castlegar eventually got out of its predicament, with the Celgar mill paying its entire tax bill plus late penalties in April. But Lawrence Chernoff isn’t done with tax issues yet. In April he joined the province’s newly formed Major Industrial Property Taxation Steering Committee, which will study the issue and propose possible solutions this summer. But any conclusions the committee arrives at will almost certainly be controversial. “To be competitive in the market, there’s probably not a lot of choices here, and communities are going to have to try and pick that up,” Chernoff says. “But you know how it is with taxation and people: it goes right off the deep end.” <author></author> 15295 at http://www.bcbusinessonline.ca When Retail Pops Up in Vancouver http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/when-retail-pops-vancouver Pop-up retailer the Latest Scoop is here today, gone tomorrow. http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/when-retail-pops-vancouver#comments Business Sense dee hon pop-up retail retail vancouver the latest scoop Wed, 04 Aug 2010 13:43:00 -0700 Dee Hon <h2 class="bcb-article-deck">Vancouver pop-up retailer the Latest Scoop is here today, gone tomorrow.</h2> It’s a sunny Saturday afternoon in Vancouver’s Kitsilano neighbourhood, and a horde is stampeding through the Latest Scoop, hauling clothes and housewares to the till with the frenzy of a going-out-of-business blowout. Indeed, the West Fourth Avenue boutique will have been shuttered by the time you read this, just six weeks after its doors opened on June 2. But this is not a retail disaster. For owners Deb Nichol and Michele Sinclair, the vanishing act is all part of their business plan. The Latest Scoop is a pop-up retail store, part of a hot global trend that sees shops open for limited periods and then disappear. The fad has captured the imagination of retailers ranging from luxury designers Comme des Garçons and Gucci to soccer-mom discounters Target Corp. and J.C. Penney Co. Inc. Other big names include Nike Inc., Gap Inc. and American Eagle Outfitters Inc. Popping up gives retailers a chance to generate buzz around their brands and to test-market new products. Gap dedicated its Los Angeles pop-up last year to promoting its 1969 jeans brand. But Vancouver-based Latest Scoop is unique in that it’s a small operation whose entire business is built around the pop-up. There is no year-round store that the temporary retail locations are meant to lure customers to. Instead, Nichol and Sinclair open shop twice a year for six weeks at a time, sliding into whatever vacant retail space suits them. What’s more, the owners have begun dedicating half their floor space to their pop-up charitable operation, Philanthropy by the Latest Scoop, each time they open a new Scoop. For Philanthropy, Nichol and Sinclair partner with registered charities – this summer’s recipients were Arts Umbrella and the Canucks for Kids Fund – which receive the proceeds from sales of donated goods. Companies such as Sunice, Livingspace and Wear Else, donate surplus goods and get tax receipts from the associated registered charities. The entrepreneurs plan to partner with new local charities each time around. The charitable and the for-profit operations work symbiotically. “Philanthropy wouldn’t have gotten the traffic, originally, if it hadn’t been for Scoop,” says the manically energetic Nichol. Because Nichol has been popping up twice a year since 2004, she’s built a database of 9,000-plus customers ready to pounce on each new opening. When Scoop customers drop by, they invariably check out Philanthropy. Having Philanthropy attached to Scoop attracted the generosity of their most recent landlord, who leased the 3,200-square-foot former Duthie Books space for a mere dollar. Nichol, a longtime retail veteran, says she started her first pop-up because “I didn’t want to do it all the time.” Instead, she decided to open just for the two busiest retail months of the year. Operating only during the early-summer and Christmas peak shopping seasons saves Scoop from paying overhead costs that would bleed cash during the retail doldrums of months like February. Having no year-round warehouse saves costs but also forces the entrepreneurs to source carefully, ensuring that even the store’s shelving is sold by the end of the run. Nichol and Sinclair take regular flights to visit suppliers in Los Angeles, hauling back as much of the latest fashions as the airline luggage restrictions and Canada customs will allow. Many customers shop as if they were picking up fresh produce, returning every few days as they get emails, Facebook updates or tweets that new shipments have arrived. After the doors of this summer’s Latest Scoop close in mid-July, Nichol and Sinclair will have a few months to breathe, catch up on books and scout out new sourcing. Then the cycle will start all over again in November. 15296 at http://www.bcbusinessonline.ca IndieGoGo Brings Vancouver Indie Film to Life http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/indiegogo-brings-vancouver-indie-film-life California-based crowd-funding site IndieGoGo proves handy for indie artists. http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/indiegogo-brings-vancouver-indie-film-life#comments Business Sense crowd-funding matt granger mikey granger The Charlie da Clown Show vancouver independent film Wed, 04 Aug 2010 13:43:00 -0700 Jessica Barrett <h2 class="bcb-article-deck">Online crowd funding site IndieGoGo.com brings Vancouver indie filmmakers’ dreams to life.</h2> So you want to make a film – and why not? Equipment is better and cheaper than ever, decent editing programs are practically free and there’s no shortage of actors willing to exchange personal time for screen time. But still, no matter how much you beg, borrow and steal, at some point you’re going to have to shell out some actual cash. And for that, a growing number of independent filmmakers are turning to the social web. Consider North Vancouver brothers Matt and Mikey Granger. After nearly a decade working on big-name films including X-Men and Good Luck Chuck and winning a short-film contest judged by Quentin Tarantino, the brothers, aged 37 and 29 respectively, figured they’d accrued some good karma that would help them produce their long-planned TV pilot, The Charlie da Clown Show. “We pretty much called in every favour we had,” the older brother says of the project, described by the younger as “a live-action Muppet Show done in the way of South Park.” Their network didn’t let them down. The brothers estimate they wrangled $60,000 to $70,000 worth of talent, equipment and production skills free of charge for their shoot, which as this issue went to press was scheduled for August. Yet the pair still needed another $6,000 in cash to cover location fees and insurance, not to mention to feed all those people willing to work without pay. The solution came via one of their 550 Facebook fans, who suggested they set up an account on San Francisco-based crowd-funding website IndieGoGo.com. Established in 2008, the site allows anyone to make financial contributions to creative projects, such as films, books and live performances, in exchange for perks such as production credit, free DVDs or homemade art. The site takes a nine per cent cut of funds raised if the campaign doesn’t meet its goal and only four per cent if the project does meet its goal. (The Grangers surpassed their goal handily, raising $7,335 by the end of June.) IndieGoGo has also proved handy for Port Coquitlam-based filmmaker Timo Puolitaipale, 37, who raised $1,000, 10 per cent of the budget, for his short film Death Wish through the site. He went back seeking another $5,000 for a second film, Monster, winner of the 2010 Hot Shot Shorts short film contest organized by Vancouver’s Celluloid Social Club. Though crowd funding has paid off for him, it’s not for the lazy, Puolitaipale cautions. “The question isn’t, Why are people doing it? but, Are they doing it right?” he says, noting it takes a lot of hours on Facebook and Twitter and even pounding the pavement to direct traffic toward project accounts – some of which never see a dime. Nor is online crowd-funding ideal for raising very large sums, such as the $250,000 Puolitaipale hopes to garner for his next project, a feature documentary entitled Old Bikes, New Journeys about a humanitarian organization sending bicycles to Namibia. “We can’t expect that kind of money from IndieGoGo,” he says. But that won’t stop him from soliciting at least a few dollars on the site as every little bit helps. As an added plus, with a direct line to a built-in fan base, raising money this way beats filling out grant applications and stalking studio execs any day, says Puolitaipale. “It’s more fun, and everyone’s getting a lot out of it.” <author></author> 15297 at http://www.bcbusinessonline.ca Jason Bedford in Beijing, China http://www.bcbusinessonline.ca/bcb/people/2010/08/04/jason-bedford-beijing-china Accountant Jason Bedford on how to avoid the riot police in Beijing. http://www.bcbusinessonline.ca/bcb/people/2010/08/04/jason-bedford-beijing-china#comments People accounting expat jason bedford kpmg china Wed, 04 Aug 2010 13:43:00 -0700 BCBusiness <h2 class="bcb-article-deck">Name: Jason Bedford Age: 31 Hometown: Vancouver Location: Beijing, China Job: Financial services advisory manager at KPMG China</h2> I moved here because the Canadian embassy in Beijing was kind enough to offer me an interview for a job I didn’t end up getting. I never expected that six years later I would still be here. The first thing I did was spend the first week in bed after losing my voice to a severe throat infection caused by the pollution. Fortunately it’s much cleaner now. The biggest shock was the way people drive. Crossing a road always reminds me of playing Frogger as a kid. There is a total lack of respect for pedestrians here. The best thing about being here is the nightlife. The sheer size of the city means there is always something to do. The biggest challenge has been learning the language. It took three months of intensive study to become conversational. Not knowing Chinese means relying on strangers or friends and getting ripped off by taxi drivers and merchants. The scariest thing that’s happened was accidentally winding up caught in the middle of anti-Japanese riots at the hotel where the Japanese football team was staying after having just beaten the Chinese to win the Asian Cup. I found myself stuck between club-and-shield-wielding Chinese riot police and a mass of angry Chinese people. Fortunately, I don’t look Japanese. The standard of living is very high. The government set out to give Beijing a facelift for the Olympics and did so with remarkable success. The city has transformed from an industrial, grossly polluted city into a world-class metropolis. The food is one thing I’ve never really caught on to. While I love southern Chinese food, I find northern Chinese food to be excessively oily, overspiced and overcooked. 15298 at http://www.bcbusinessonline.ca What Is Your Air Travel Ritual? http://www.bcbusinessonline.ca/bcb/people/2010/08/04/what-your-air-travel-ritual Three local leaders on the routine they act out before hitting the sky. http://www.bcbusinessonline.ca/bcb/people/2010/08/04/what-your-air-travel-ritual#comments People air travel Ian Banks inquiring minds James Moore Kenneth Werker vancouver international airport Wed, 04 Aug 2010 13:43:00 -0700 BCBusiness <h2 class="bcb-article-deck">Three local leaders on the routine they act out before hitting the sky.</h2> IAN BANKS (l), vice-president, global information technology, PMC-Sierra Inc. “I try to arrive early. I’ve missed my fair share of flights and had my stress level extremely high scrambling to get to the airport either in the taxi or driving myself. That’s no fun. I usually hop on the Wi-Fi at the airport and do work most of the time. I’m not good at sleeping on planes, but when I need to sometimes I’ll get a few drinks because it helps me get a couple hours of sleep.” KENNETH WERKER (c), managing partner, Vancouver office, Odgers Berndtson “I just have my checklist so I don’t forget anything – papers I require for the trip, files, my passports. Usually, I go to the Air Canada lounge and wait for my flight. I grab a snack because they don’t really feed you on the airplanes anymore. I read a good book to make the time pass quickly because the files that we deal with are confidential so it’s not really possible to read them on the airplane.” JAMES MOORE, MP for Port Moody-Westwood-Port Coquitlam and minister of Canadian heritage and official languages “I take my dogs for a good long walk before I leave them for the week and then drop them off and head to the airport. Usually, I get a Jugo Juice strawberry-banana and then a chicken wrap thing. I always have a bottle of water before I go on the flight and bring it on with me because I don’t like to be asking all the time for drinks and stuff from the flight attendants.” 15299 at http://www.bcbusinessonline.ca Launi Skinner http://www.bcbusinessonline.ca/bcb/people/2010/08/04/launi-skinner She takes over after 18 months at the helm of trash-haulers 1-800-Got-Junk. http://www.bcbusinessonline.ca/bcb/people/2010/08/04/launi-skinner#comments People 1-800-got-junk b.c. credit unions first west credit union launi skinner starbucks Wed, 04 Aug 2010 13:43:00 -0700 Peter Severinson <h2 class="bcb-article-deck">Launi Skinner takes over as CEO of First West Credit Union after 18 months at the helm of fast-growing trash-haulers 1-800-Got-Junk.</h2> Launi Skinner got to ride one of North America’s most dramatic corporate growth stories, and she’s keen to repeat the experience in B.C. Skinner climbed the ranks at Starbucks Corp. over more than 14 years, becoming president of the giant’s U.S. division before leaving in 2008. She returned to her native B.C. for her next job, CEO of the fast-growing trash haulers 1-800-Got-Junk LLC, although this was only to last 18 months. And now she’s found another challenge: in April she was named CEO of First West Credit Union, which was formed in January 2010 by a merger of Envision Financial and Valley First Credit Union, resulting in B.C.’s third-largest credit union. If the merger was one sign that the organization wanted to grow, hiring Skinner is certainly another. Going from Starbucks to Got-Junk to a credit union definitely looks like an eclectic career path. I completely understand why you’d think that, but there’s a commonality among them all. It wasn’t just about being in the coffee business or the junk business or the banking industry; I specifically went after organizations that really understand that people are your most important asset. All three organizations have that as a founding principle. The other things that are similar are the service component and the strong community-relationship principle. So I see them to be quite similar. When you left Starbucks, you must have had lots of opportunities to choose from. How did you handle that? It didn’t necessarily matter to me how big the organization was; I was looking for companies that had a growth story. That is where my skills have been, particularly working with Starbucks. And one of the reasons I really wanted to stay in Vancouver is because it’s a really close community. I have been very impressed with how gracious and opening other businesspeople have been to welcome, support and help. Vancouver has a very unique culture because of that. I’ve never once had someone not willing to meet me for a cup of coffee, ever. Why did you decide to leave Got-Junk? The founder, Brian Scudamore, decided that he was going to change direction and not be as aggressive with growth, so it just didn’t make sense for me to be a part of that. And when you go into a founder-based business, that’s one of the risks you take. I supported the direction he wanted to go – so I’m good with all of that – but he didn’t need me for the direction he was going. First West is now in its first year. Where is it going from here? What First West is trying to do is, How do we continue to do what’s best in credit unions and also make sure we have a future in the financial industry? How do we bring these local brands together and create an infrastructure of size and scale that can really help create some new and innovative products for our members? How do we take everything that’s great about being big and on the flip side remain local and relevant? I love the model of respecting the culture of credit unions – being local and able to adapt for what’s necessary for one member – while at the same time having size to help. Sound like a tough goal. How do you make sure you don’t become another giant, faceless bank? One of the reasons this model doesn’t exist very often is that it’s not the easiest approach. Often people take the path of least resistance. How we do this is to make sure we’re very clear about what our vision is and stay true to that and create an operating model and strategies to support that. One criticism of Starbucks is that the stores became generic and repetitive compared to more colourful local cafés. Is that something your team struggled with? Starbucks really tried. The model was always a constant battle, but I think that battle is what made it successful. We recognize that there was a time when we were growing at a pace that we became more cookie cutter, so how do we change that? We had those conversations all the time. We hired two or three design managers living in Vancouver, two in Toronto, 10 in Seattle, 20 in Los Angeles. So if it’s an area like Commercial Drive, how do we make it relevant to Commercial Drive? You would go and make a change like redoing our menu board and you’d realize that we have a hundred different versions of menu boards. Then you’d go, “We need to be more simple; let’s have everything the same!” So you’d fight that all the time. It was a constant conversation, but I think it was healthy because you always come back with, What are we trying to accomplish? You starting this job solidifies a very strong trend in B.C. of women leading credit unions. Is it just coincidence, or is there something in the credit union culture that attracts women leaders? I think there is some level of coincidence in the timing of Tamara Vrooman, Tracy Redies and myself. But I also think there’s something about the culture of credit unions, because there’s a co-operative model where people participate together and share and really come at it with a more collaborative style. I think – not to generalize between sexes – but that style typically plays to women’s strengths. 15301 at http://www.bcbusinessonline.ca Howe Sound Brewery's Clever Branding http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/howe-sound-brewery039s-clever-branding Its clever and ever-changing packaging draws as much attention as its beer. http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/howe-sound-brewery039s-clever-branding#comments Business Sense beer Branding howe sound brewery packaging Squamish Wed, 04 Aug 2010 13:43:00 -0700 Tony Wanless <h2 class="bcb-article-deck">Using clever and ever-changing packaging, Squamish beer-maker Howe Sound Brewery turns traditional branding on its ear.</h2> Most packaged-goods producers spend much time, effort and money to establish brands that will deliver a consistent message. But in a speeded-up, rapidly changing world of social media and viral marketing, traditional brand messaging can be problematic for old-world manufacturers. A Squamish beer maker has adapted to the new reality with clever and ever-changing packaging that draws as much attention as its beer. <h3>The Problem</h3> A company has to be nimble if it wants to catch the wave of publicity around a very public event, and the challenge is especially daunting for manufacturers, who have to retool entire production lines and branding strategies. The challenge is compounded when that public event is the Olympics, with strict controls on related marketing. This was the situation faced by Howe Sound Brewing Co. Ltd. earlier this year. <h3>The Solution</h3> In just a few years, Howe Sound had grown from a small brew pub to a 70,000-unit-a-month bottler by promoting its specialty beers with a quirky sense of humour that included interesting names and in-your-face labels. Brother and sister operators David and Leslie Fenn had become well known for producing unique beers with “insider” names tied to events. These included Pothole Filler (to celebrate the new Sea-to-Sky Highway) and Devil’s Elbow (a reference to a favourite Squamish-area kayaking spot). When the Olympics hit Vancouver and Whistler – and therefore Squamish – the Fenns knew they had to recognize it with a new beer. But beer giant Molson Coors Canada was the official sponsor, and VANOC was strict about anyone else using an Olympic theme. Howe Sound used a variation of guerrilla marketing known as “ambush marketing,” in which a company rides some other organization’s coattails to draw attention. Howe Sound beers had previously won gold, silver and bronze medals in North American beer competitions. So CEO Leslie Fenn and her brother decided to combine that fact with something she refers to as “iconically Canadian.” Howe Sound created Three Beavers Imperial Red Ale, with bottle labels featuring three cuddly beavers displaying gold, silver and bronze medals. It didn’t contain one word about the Olympics – but everybody in Squamish and Vancouver got the drift. When the Fenns hired people to wear cheesy beaver costumes and show off the beer at Olympic venues, their product started flying off the shelves as fast as they could produce it. The campaign was voted the most effective 2010 Olympic marketing campaign by the Texas-based online publication Global Language Monitor, which said Howe Sound generated more media and Internet buzz than huge companies such as Procter & Gamble, Visa, Scotiabank and Lululemon. Howe Sound now sells its beers throughout B.C. and in Alberta, and has jumped the border to sell in Oregon. It also recently won six medals at a North American beer competition. Three Beavers beer and its label will be retired soon, but it’s a sure bet the Fenns will dream up some other beer with a clever name to keep their fans happy. <h3>Lessons</h3> • Make the branding the brand. Most beer makers deliver very generic branding messages. Part of Howe Sound’s branding is that each new beer comes with an interesting name and label. Customers are as enthralled with the names as they are the beer. • Be inclusive. A sense of belonging trumps all other kinds of marketing, so the Fenns always try to make people feel like they’re part of a movement. • Move fast. Like online marketers, Howe Sound can change its product and marketing very quickly to capitalize on a new buzz. n 15302 at http://www.bcbusinessonline.ca When Your Startup Gets Bought http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/when-your-startup-gets-bought What do B.C. tech entrepreneurs do after their first big success? http://www.bcbusinessonline.ca/bcb/business-sense/2010/08/04/when-your-startup-gets-bought#comments Business Sense acquiring companies b.c. tech startups ceo decision-making jeff mallett penn wilson stewart butterfield Wed, 04 Aug 2010 13:43:00 -0700 Brent Holliday <h2 class="bcb-article-deck">The dilemma of the successful tech acquiree: Push paper for a year, raise chickens or lead a $1-billion company?</h2> A few months ago, I wrote about the need for serial entrepreneurs in B.C.’s technology scene. While I can hardly blame someone with a few million dollars in their jeans if they decide to farm chickens on Salt Spring Island or open a winery in Oliver, it would be nice to take the experience and recycle it into another success. This got me thinking about other sources of experienced and successful entrepreneurs. What about homegrown individuals who have taken their talent elsewhere and enjoyed huge success? Would they come back and share their experience and/or start something new here in B.C.? Some B.C. expats of note have had huge success in the California technology mecca, Silicon Valley, including Jeff Mallett, ex-Yahoo; Stewart Butterfield, Flickr-Yahoo; and Penny Wilson, ex-Macromedia and ex-Juniper. Butterfield has elected to come back and start his new company, Tiny Speck, and Mallett and Wilson are actively helping startups in B.C. Another candidate who has been on a great ride of late – someone with whom many of you may not be familiar because his success has taken place in the U.K. – is Steve Munford, CEO of security software leader, Sophos. I caught up with Munford recently to talk about his ride to the top of an $830-million company and ask him if a return to B.C. is in his future. Munford was working in senior management at Seanix Technology in Richmond in the late 1990s when I first met him. A few years later, Dick Hardt hired him at ActiveState as COO. ActiveState developed an email spam filter product for corporations and started to ramp up its revenues until it was acquired by Sophos in 2003. I asked Munford where he thought his career path was heading when Sophos acquired ActiveState. Specifically, I wanted to know why he elected to keep working for Sophos rather than start his chicken farm. By way of answering, he outlined four steps for a typical senior manager whose company is being acquired: (1) Drive hard to get the deal done, which demands significant energy. (2) Relax when it’s done – for a few days. (3) Declare victory and celebrate. (4) Honour the commitments of the inevitable lock-in for a year or two. In Step 4, Munford saw that interest often lags for an acquired employee because there is no intense desire to succeed anymore. Lock-in sometimes means you fill space at a desk for a couple of years. Munford made a key decision at this point. He wanted a meaningful role. He wanted to be engaged. So he took over all of the North American operations for Sophos. Shortly thereafter a big change was offered: Sophos kept the office location here in Vancouver but asked Munford to move to the U.K. This was where Munford started to forget about leaving and got very engaged with the direction Sophos was headed. He became COO and joined the board of the company in late 2005, and when the company ran a search for CEO soon after, Munford put his name forward and the company picked him. The chance to have scale and reach in a business backed by a premier private equity firm (TA Associates at the time) had Munford interested in “going long.” Revenue has grown from $135 million to $335 million under his stewardship. An IPO plan was shelved and the company is currently working through an announced transaction with Europe’s largest private equity firm, Apax Partners, reportedly valuing the company at $830 million. Munford is very excited about taking Sophos to a billion in revenue. That would be rarefied air for a B.C. technology CEO. When I asked if he would come back and share all of this experience, he simply said he hoped to someday. Meanwhile, as Sophos continues to grow, so does Munford’s stature as a B.C. technology success story. n Brent Holliday heads the technology practice for Capital West Partners, a Vancouver-based investment bank. 15303 at http://www.bcbusinessonline.ca A Greek Tragedy: Debt Management http://www.bcbusinessonline.ca/bcb/business-sense/2010/07/07/greek-tragedy-debt-management Valuable debt management lessons learned the Greek debt crisis. http://www.bcbusinessonline.ca/bcb/business-sense/2010/07/07/greek-tragedy-debt-management#comments Business Sense B.C. HST complaints department debt management Greek debt crisis Greek tax money management steve burgess Wed, 07 Jul 2010 15:47:44 -0700 Steve Burgess <h2 class="bcb-article-deck">Lessons from the Greek debt crisis: set priorities, watch your money and get yourself a good pair of shoes.</h2> Greece invented the Olympics. So maybe we shouldn’t be surprised about the whole debt crisis. These are the people who turned massive, irrelevant expenditure into a triumph of the human spirit. As the Greek debt crisis roiled the markets, pummelled the Euro and sent protesters to the streets, the rest of the world looked for lessons. Actually, it didn’t look very hard. This wasn’t exactly an Agatha Christie mystery. More like the Mike Tyson Story, in which a sporting legend proves to have the financial sense of an inebriated Marine. I do enjoy Greek food. But not on credit. A spanakopita bought is a spanakopita earned, I always say. Same goes for pizza, sushi and automobiles. Debt has never been to my taste. My approach to financial management has always been pretty hard-core. I’ve never taken out a loan. I’ve never had a mortgage. I didn’t get a Visa card until I was in my 40s. Now that I have one, I pay the full balance every month. Apparently, this makes me something of a circus freak. Personal debt levels have risen steadily in Canada since the mid-’80s, while personal savings rates have dropped like network TV ratings. A new survey from the CGA Association of Canada says the average Canadian has debts of almost $41,740 – 2½ times the level of 1989. As for British Columbians, our savings rate is six per cent lower than the (lousy) national average, while B.C. bankruptcies climbed almost 43 per cent in 2009, the second-highest rise in the country. A lot of personal debt involves student loans, which is hard to argue with. As for the rest of it, well, I suppose your nightly prayers for that new 41-foot executive-class RV with flat-screen TV and colour-co-ordinated patio awning is a private matter between you and your God. If borrowing is the answer to those prayers, so be it. I can only tell you that a budget free from debt charges is a wonderful thing. I’ve never made a lot of money – the only time I’m ever looking at six figures is on reruns of Friends – but I’m capable of doing things not usually associated with my income level. I travel a lot. I wear shoes that belong in a much higher tax bracket. I set priorities and watch my money. It’s a good strategy. But I am not planning any “Be Like Steve” tours of world capitals, admonishing chastened presidents and premiers to follow my fine example. I’m not a government. I don’t even buy people dinner. It may be standard campaign rhetoric that government budgets should balance like household budgets or that running a government is like running a business, but I don’t believe that. Governments have obligations and need budget flexibility. Still, I think at least one legitimate parallel can be drawn from my example. My financial approach can be summed up as realistic. Realism is always useful; desire, on the other hand, tends to mess up budgets. In the European case, Greece wanted into the EU and the EU wanted Greece. So the Europeans turned a blind eye to economic danger signs, and the Greek government fudged the numbers in order to qualify. Everybody wanted it to happen, and so it did. Add that to the unrealistic spending sprees of the Greek government and the whole thing takes on the same air of delusion that precedes many large boat purchases. Otto von Bismarck reportedly said, “Politics is the art of the possible.” Too many politicians take that quote to heart. Before you know it, everything seems possible. Hard choices don’t get made. Then again, when politicians see riot police in the streets of Athens and tax revolt brewing in B.C., realism must seem like a luxury governments cannot afford. Easier to pull out the credit card. 14224 at http://www.bcbusinessonline.ca Tech Toys of Summer http://www.bcbusinessonline.ca/bcb/after-hours/2010/07/07/tech-toys-summer The best tech toys for the beach, the golf course and of course, the patio. http://www.bcbusinessonline.ca/bcb/after-hours/2010/07/07/tech-toys-summer#comments after hours amazon kindle apple ipad bose sounddock Gadgets garmin GPS pentax digital camera sony reader Wed, 07 Jul 2010 15:46:00 -0700 Peg Fong <h2 class="bcb-article-deck">Kindles and cameras and iPads, oh my!</h2> <h3>Bose SoundDock Portable Digital Music System</h3> Look, it’s got a handle! That makes the Bose SoundDock a worthwhile summer gadget, because warm weather is all about spontaneity. Grab some sunscreen, a hat and of course your portable music system with its handy handle and you’re good to go. The docking station fits the iPhone and almost all iPod models and runs on rechargeable batteries or plugs into a wall. But what walls? It’s all about being outside, on the open road, the beach – anywhere but inside. $449.95, <a target="_blank" href="http://bose.ca ">bose.ca </a> <div style="padding: 5px; float: right;"><img width="259" height="186" src="/files/image/BCBusiness/Pentax-HD-Camera.jpg" alt="Pentax Digital Camera" /></div> <h3>Pentax Digital Camera Optio W-90</h3> Dust-proof, shockproof and waterproof. That makes this 11th-generation Pentax digital camera supposedly tough enough to withstand the rigours of summertime use and abuse, including drops off cliffs while hiking in Squamish, swimming at Jericho or burying it in sand at Kitsilano Beach. Rubber corners encase the 12.1-megapixel sensor and wide-angle 5X optical zoom. A large 2.7-inch LCD is also designed for rugged, outdoor use, with a 16:9 wide screen that’s easy to view in sunlight and underwater. $339.99, <a target="_blank" href="http://pentaxcanada.ca ">pentaxcanada.ca </a> <div style="padding: 5px; float: left;">  <img width="125" height="143" alt="" src="/files/image/BCBusiness/Garmin-GPS-1d.jpg" /></div> <h3>Garmin Golf 3.0" Handheld GPS (G5-GPS)</h3> Preloaded with thousands of golf course maps, including Canadian ones, this GPS receiver can measure individual shot distances and show the exact yardage to fairways, hazards and greens. Track stats and info such as your putts per round, greens hit in regulation, fairways hit and the average distance you hit every club. Then download software to help analyze your game to figure out how to improve for the next round. It may not put you on the pro circuit, but every little bit helps. $499.99, <a target="_blank" href="http://bestbuy.ca ">bestbuy.ca </a> <div style="padding: 5px; float: right;"><img width="170" height="167" alt="" src="/files/image/BCBusiness/Amazon-Kindle-2.jpg" /></div> <h3>Sony Reader 6-inch Touch Edition and Amazon Kindle</h3> All those books you wanted to read when life and work slowed down? Get reading. There’s room for 160 books in the Sony Reader and 1,500 books in the Kindle, and because copyright is not an issue for hundreds of classics there are lots to read for free. The best thing about e-books is that in digital space no one can see what you’re reading by looking at the cover, so the trashy summer novel can look as serious as Shakespeare. $299, sonystyle.ca; $259, <a target="_blank" href="http://amazon.ca">amazon.ca</a> <div style="padding: 5px; float: left;"><img width="165" height="175" src="/files/image/BCBusiness/iPad-1b.jpg" alt="" /></div> <h3>Apple iPad</h3> You know you want it. The only question is which one: the 16-gigabyte version or the 64-gigabyte with 3G? All right, there’s really another question. How are you going to justify buying what is basically an iPhone without a phone function? Here’s what you do. Slap hamburgers on the barbecue instead of rib-eyes, crack open an ice-cold glass of tap water instead of beer and tell the kids that the corn mazes in Chilliwack are way more fun than Disneyland. Who needs a vacation when you can gaze lovingly at that Apple logo? $549 (16-gigabyte) to $879 (64-gigabyte), <a target="_blank" href="http://apple.ca">apple.ca</a> 14221 at http://www.bcbusinessonline.ca Gravel Battle in the Fraser River http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/gravel-battle-fraser-river The controversy behind the gravel extraction on the Fraser River. http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/gravel-battle-fraser-river#comments Top Stories DFO Frank Kwak fraser river ecology fraser river gravel mining Fraser River Salmon Society gravel extraction Otto Langer salmon salmon habitats sturgeon Tyee Bridge Wed, 07 Jul 2010 15:45:49 -0700 Tyee Bridge <h2 class="bcb-article-deck">Is the multimillion-dollar gravel extraction program on the Fraser River actually saving lives – preventing a devastating flood, as government officials claim? Or is it just padding the pockets of a lucky few and causing irreparable harm to a fragile ecosystem?</h2> When I meet Frank Kwak, he’s in his backyard planting dahlias, wearing black polyester running pants tucked into a pair of gumboots. Screened on the back of his white T-shirt is a leaping largemouth bass. He’s agreed to take me out to the Fraser River and show me Gill Bar, a kilometre-long gravel bar near Chilliwack that’s become the latest focal point in a decade-long battle over gravel mining in the Fraser. After we get into my car, Kwak pulls out an unpeeled orange and an energy bar. “Sorry about this,” he says. “I haven’t gotten around to breakfast yet.” Kwak, 62, is a busy man. The president of the Fraser Valley Salmon Society, he sits on “well over 20” committees dealing with sport-fishing issues and river habitat. Ten years ago, he took early retirement so he and his wife could move to Chilliwack, where through a local church they worked with refugees from Kosovo and later launched their own Christian ministry to feed the city’s homeless and hungry. A fly fisherman, Kwak soon found that the valley was, if not an angler’s Canaan, at least a decent place for a retiree to enjoy weekends fishing for steelhead trout and salmon. But over the next decade, his attempt at a relaxing hobby led him into the fraught politics of fish and water. His homeless ministry is now a reduced-fee catering company, and these days he makes fewer hot meals than conference calls.  <div class="image-header" id="bcb-article-sidebar"> <div class="header-image"><img width="98" height="12" alt="BCB Sidebar - Online Only" src="/files/u102/category_online-only.gif" /></div> <ul> <li>Video: <a href="http://bcbusinessonline.ca/node/13734" target="_blank">Man vs Nature in the Fraser River</a></li> <li><img width="259" height="186" src="/files/image/BCBusiness/Fraser-Valley-Salmon-Society-3-4.jpg" alt="" /></li> <li>Is irresponsible gravel removal from the Fraser River jeopardizing the fish habitat?</li> </ul> </div> Kwak downplays his knowledge of stream ecology and fish habitat. “I don’t know really very much,” he says. “I’m just a grunt and a willing participant.” Still, Kwak has been known to get his hands in the gravel, which at least once has landed him on the front page. In 2006, while exploring a channel island called Big Bar, he found thousands of exposed, dried-up “redds”: scooped-out nests of fertilized eggs left in the fall by spawning salmon. An access road built to the bar by a local gravel company had cut off the spawning channel and dried it up, killing an estimated two million pink salmon fry. It was one of the largest documented fish kills in recent B.C. history. The pink kill at Big Bar was big news at the time for being a major botch but also because it raised old questions about gravel operations in the Fraser – questions that remain unsettled. Gravel extraction in the Chilliwack area of the river has been going on by private aggregate companies for decades. Since 2004 the operations have increased in size and number, ostensibly to protect $6-billion worth of homes, businesses and public infrastructure in the Fraser Valley from a New Orleans-style flood – like the granddaddy Fraser flood of 1894 or the one that devastated the region in 1948. While private companies are still mining the gravel, their operations are now approved and conducted under the auspices of Emergency Management B.C. (EMBC), part of the provincial Ministry of Public Safety and Solicitor General. But a growing number of biologists, local First Nations and river hydraulics experts – as well as sport fishermen like Kwak – question the official story of flood protection and worry that the program is really a means of subsidizing a local resource industry. By framing gravel mining as an “emergency” public safety work, say critics, the government is quashing public input and ecological review – and using up limited flood-protection funds.  <div style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;" times="" new="" roman=""><img width="259" height="355" alt="" src="/files/image/BCBusiness/Fraser-Valley-Salmon-Society-3-1.jpg" />Thousands of tonnes of gravel are taken from sites such as big bar in Chilliwack each year and sold in the construction market.</div> “I’m pretty well convinced this is a gravel grab that has very little to do with flood protection,” says Kwak as we step out of the car. “It’s done under the guise of flood protection, but the gravel is being removed for profit. Who all is profiting from it I’m not sure.”  Gravel is not sexy. The fortunes of B.C.’s $300-million-a-year aggregate industry – sand, gravel and crushed rock – go undiscussed at cocktail parties, despite our blind dependence on them. Gravel is as basic to modern society as flour is to bread baking; it’s a main ingredient for roads, home foundations, sidewalks, schools, bridges and hospitals. Construction and road maintenance projects require about 54 million tonnes of aggregate a year, an average of 12 tonnes for each person in B.C. The Metro Vancouver market alone is valued at $135 million, consuming about 15 million tonnes of gravel and sand every year – roughly equal to the weight of about 158,000 Boeing 757s – with most of that gravel coming from the Sechelt area on the Sunshine Coast. The Fraser Valley market, on the other hand, is much smaller, with about 800,000 tonnes of sand and gravel (plus another 600,000 tonnes of crushed rock) consumed annually. In a market this size, the exposed gravel bars of the 65-kilometre stretch of the Fraser River between Mission and Hope – known as the “gravel reach” or the Heart of the Fraser – start to look pretty appealing: if costs for building access bridges and roads to the bars are covered, as they often are, by the province under the EMBC flood protection program, gravel is relatively clean and easy to access. The reach is where all the gravel carried by the river is deposited in a braided alluvial fan – gravel that originates from the weathering rock of the Fraser Canyon above Hope or is delivered into the Fraser by mountain streams and landslides. The reach is also prime habitat for 30 species of fish – including steelhead, pikeminnow, shiners and endangered white sturgeon – and the passageway for salmon headed to and from their spawning beds. Droves of pink and chum salmon that were born in its well-washed gravel come here to die: millions of chum and up to 10 million humpbacked pinks in alternate years. Otto Langer is a retired fisheries biologist who spent 32 years with Fisheries and Oceans Canada, colloquially known as the DFO (after its former name, the Department of Fisheries and Oceans). Like many others concerned about fish habitat in the Fraser, he questions the motives for gravel extraction. “The program as it’s presently being sold is misleading, and there’s obviously more than a flood-control agenda being pushed at this time,” says Langer, who has spent a good part of his retirement years compiling a massive file on gravel extraction in the Fraser River. He and Marvin Rosenau (of BCIT’s fish, wildlife and recreation program), along with John Werring of the David Suzuki Foundation, the B.C. Wildlife Federation and other groups, have formed the Fraser River Gravel Stewardship Committee to lobby the government on the impact of gravel mining in the Fraser.  In a review of the DFO’s role in Fraser gravel extraction released last March, Langer notes that gravel mining in B.C.’s rivers has had a long and occasionally smelly history. Over the past century, construction companies and others in the Fraser Valley, writes Langer, “have often extracted the clean gravels from salmon spawning streams as a local source of cheap aggregate for roads and making concrete for construction projects. . . . Mining gravel from the Coquitlam River in the Lower Mainland destroyed much of the river’s habitat and drove a healthy run of pink salmon into extinction. Indeed, some 40 years ago, construction workers in the area complained that concrete made from Coquitlam River gravels gave off a bad rotten salmon smell due to the large numbers of salmon eggs in the concrete.” On the nearby Fraser, extractions continued up until about 1998 when the DFO asked for and “largely got” a moratorium on gravel mining – not completely, as small “experimental” removals continued – pending an overall management plan for salmon and fish habitat in the river.  <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="186" src="/files/image/BCBusiness/Fraser-Valley-Salmon-Society-3-2.jpg" alt="" />Authorities say the gravel mining is necessary for flood protection.</div> But the pressure to reopen it was persistent. A report on aggregate supply for the provincial Ministry of Employment and Industry in 1996 noted a dwindling aggregate supply in the Fraser Valley and thus “increasing demand on Upper Fraser Valley sources, particularly the Fraser River gravel bars possessing high-quality gravel.” In 2002, after a four-year break, the government allowed mining to resume. It’s a sunny day in late April, and as Frank Kwak and I drive over the dike we can see the river shining through the cottonwoods. We park and Kwak leads me back onto the dike, an elevated gravel road set back 150 metres from the river. Five minutes later, he spots the place he’s looking for and we make our way back down. We wade through the knee-high grass to the riverbank and see a seal poke its head out of the water near the shore. “If they say there’s not fish in here, well,” says Kwak, “obviously there is.” The seal looks at us with something like amusement, but Kwak isn’t smiling. The seal is about 80 metres from Gill Bar, which is one of about a dozen bars mined for gravel in the past 10 years and the largest extraction site of 2010. In February K & L Contractors Inc., a local gravel company, was given a “Section 9” permit by the B.C. Ministry of Environment to work “in and about a stream,” allowing the company to mine 185,000 cubic metres of gravel from the bar, about 310,000 tonnes. More than 10,000 truckloads were hauled from the bar on a tight 10-week timeline; K & L had to beat the rising meltwaters that now covered most of the bar.   Rivers are wild; they can be tamed but they remain unpredictable. The big flood of 1948 is still vivid in the memories of Fraser Valley elders, and the stories trouble anyone who lives in the area, especially those who have stood on the dikes during spring thaw and watched the river roar by. Following another flood scare in 2007, the province agreed to add $100 million to a $60-million, 10-year investment by the federal government aimed at improving area dikes and instituting other flood-protection measures. But residents are still nervous and want to believe that authorities are doing everything they can to protect their homes, families and businesses. That is why, Kwak says, EMBC’s gravel extraction program has held such popular appeal. “It’s a pretty positive move on behalf of provincial and federal leaders to tell a community they’re doing everything they can to prevent Chilliwack from flooding in a freak flood. Can it happen? Well, of course,” he says. “And so for Joe Q. Public, if his ministers or MLAs tell him that there is a chance the river will flood someday – and that what we are doing and what we’ll continue to do is protect your property by removing gravel from the river – he’ll be quite happy to hear that. If you own a house in Chilliwack and could care less about fish and there’s a one in a thousand chance of a flood, you’re going to say, ‘Well, let’s do it.’” It’s not only Kwak who has questions about the program and its raison d’être. In early May, in an exchange at the B.C. legislature, Delta South MLA Vicki Huntington asked Environment Minister Barry Penner to provide provincial studies of flood control in the Fraser Valley from EMBC. “A number of months ago . . . I also asked whether the minister or the office of the solicitor general, the emergency measures office, would provide the scientific documents that sustained and showed that gravel extraction was helpful in flood control. I haven’t received those documents,” she said. “I was wondering whether the minister and his staff could see fit to provide me with [that] . . . I see no science that is indicating the gravel removal is anything but of benefit to the extraction companies.”   <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="186" alt="" src="/files/image/BCBusiness/Fraser-Valley-Salmon-Society-3-5.jpg" />In 2006 an access road built to the dig site at Big Bar cut off a spawning channel, killing an estimated two million pink salmon fry.</div> In addition to his position as environment minister, Penner is the MLA for Chilliwack and a key promoter of gravel extraction in the Fraser. (A 2008 article in the Chilliwack Times noted that gravel removal was part of Penner’s political platform in the 2001 and 2005 elections.) Responding to Huntington’s questions, Penner argued that the removals were essential due to gravel building up on the river bottom. “I know that it doesn’t rise equally and it doesn’t rise in every location all the time, but over time we know that as you deposit something in a confined space, that area will start to fill up.” He rejected Huntington’s suggestion that the program’s only real benefit was to extraction companies: “I appreciate that the member thinks there’s some kind of conspiracy, but let me tell you that people living in the Fraser Valley, I think, have every right to expect flood protection.” Dwayne Meredith is acting director of EMBC’s Strategic Mitigation Program, which oversees the gravel mining projects – or “removals” as the agency prefers to call them – in the Fraser gravel reach. When asked about the nature and motive of gravel operations in the reach, and if the way that it is done is explicitly for the protection of the public, Meredith’s answer is unequivocal. “Absolutely,” he says. “As time moves on and more and more gravel is coming into the stretch and not moving through or past the [gravel reach] . . . the gravel is settling on to the riverbed and the riverbed is building up. And because the river is diked, that causes people to begin managing the river, at least slight portions of it, to minimize flood risk and meet other objectives as well.” Which raises the question, How much gravel has actually built up in the Fraser? According to Michael Church, a retired UBC professor of geomorphology and hydrology, an average of 230,000 cubic metres of gravel settles in the riverbed between Hope and Mission every year. If you could spread it evenly throughout the channel, it adds up to about three millimetres a year, or about 15 centimetres since the 1948 flood. But this is an artificial number, as gravel is not deposited evenly throughout the reach. BCIT’s Rosenau points out that due to erosion by the river itself, which carries existing deposits farther downstream when the freshet is running high, there are large sections – a 22-kilometre stretch between the Sumas and Harrison rivers, for instance – that have lost large volumes of gravel over the last 10 years. “Flood protection is very much a specific and local matter of removing gravel from where it is building up,” he says. “Managing flooding in the river to some sort of artificial sediment budget number over the entire reach, as the government is currently doing, is just plain loopy.” Church adds that “the entire program [of gravel extraction] is highly experimental,” and that “in almost every case in the world where gravel has been removed from a river, it has been removed in volumes greatly in excess of input, which is almost never known, and the river has promptly collapsed into a ditch-like form with drastic consequences for the riverine ecosystem.” While removal might still afford a means of flood protection to complement raising dikes, Church believes that “the rational solution” would be to limit the number of homes, businesses and farms on the flood plain, “indeed, to start reassembling sectors of the flood plain for preservation as floodable wetland.” But he acknowledges that homeowners, the business community, farmers and real estate developers are unlikely to find this appealing, to say the least. While his research has been used by EMBC to justify the extraction program, Church is largely critical of the government’s chosen flood-mitigation projects to date, calling the 2006 Big Bar extraction “not an optimal choice” and the 2008 Spring Bar extraction “a very poor choice.” His opinions are based, he says, on the notion that gravel should only be removed from zones where it chronically accumulates, and “only Gill Bar lies in one of those zones.” Quoted in a 2008 article in the Globe and Mail, Church went even further, saying that it was “misleading” for government to say there was a flood risk at Seabird Island because gravel has not been building up at Spring Bar. The reach where Spring Bar lies, he told the reporter, has “on the whole been degrading – that is, it has been losing gravel for several decades now.” Peter Ward of UBC’s civil engineering department, one of Church’s colleagues, concurred. “As a hydrology engineer who has been involved with matters concerning Fraser River flooding for many years, I am surprised about why this project [at Spring Bar] could possibly be justified on the basis of flood control,” he said in a separate written opinion issued around the same time, adding that it “looks as though someone proceeded with the construction work without getting or listening to competent advice.”  <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="186" src="/files/image/BCBusiness/Fraser-Valley-Salmon-Society-3-3.jpg" alt="" />Kwak is convinced this is a gravel grab done under the guide of flood protection.</div> So if gravel removal projects have not been chosen for flood control, then why? Critics of the program point to the money to be made from gravel sales and government grants. Between 2005 and 2009, the province spent $16.6 million on flood protection programs in the Fraser Valley, including dike improvements in Mission, Abbotsford and Chilliwack. Of this, $2.6 million was devoted to “sediment management” – building access roads to gravel bars and providing hydraulic studies and environmental monitoring. As a result, contractors extracted gravel on 14 occasions from nine gravel bars, mining them for approximately 3.3 million tonnes of aggregate – worth, at a minimum retail price for unprocessed gravel, about $13.2 million. The proponents of most extraction operations in the gravel reach are two First Nations bands connected to the Sto:lo Tribal Council (STC): the Seabird Island Band near Agassiz and the Cheam Band near Rosedale. These bands, which claim traditional rights over several gravel bars in the reach, work in partnership with contractors who possess the heavy machinery. In 2008 Spring Bar became the largest and most ambitious gravel-mining project in the Fraser to date. Advocating extraction was the 850-member Seabird band, which awarded the mining contract to Jakes Construction, a Chilliwack company that handles everything from municipal sewer upgrades to subdivision site preparation. Jakes, as it happens, was also the contractor that built the access road to Big Bar in 2006, inadvertently causing the pink salmon kill. Under the EMBC program, every contractor who extracts gravel from the reach is allowed to keep it for resale in lieu of cash payment. In the case of Spring Bar, Jakes was permitted to pull out and keep 570,000 tonnes of gravel – or well over half the amount of sand and gravel sold in the Chilliwack area in a given year. (Larger operators can process gravel and create a value-added product – clean pea gravel or larger-sized drain rock sell for around $26 a tonne – but smaller contractors such as Jakes usually sell Fraser gravel as is, directly from a pile, for about $4 per tonne.) Jakes owner Jake Klaassen would not go on record with his overhead costs, but, according to industry sources, removing gravel from the Fraser reach can cost anywhere from $1 to $3 a tonne. While margins are low, volume is high. At the going rate for unprocessed gravel, the Spring Bar operation resulted in the capture of an asset worth roughly $2.25 million. Turning gravel into cash is a long-term proposition, however; half of the gravel taken out of Spring Bar two years ago is still sitting unsold, according to Klaassen. “There is a market for the gravel, but how can you show up at some vendor’s door with 100,000 tonnes of gravel in one month? They’re just not going to take it. They’re going to say, ‘What do you want me to do with these 10,000 truckloads?’” Selling off the half-million-tonne pile from Spring Bar, he says, will take five years and bring him only a five to seven per cent return on his investment. “Many contractors won’t do gravel extraction because it’s difficult to make it financially viable,” he says. “You’ll find a lot of these extractions won’t happen if there’s not some kind of collective agreement. . . . I always get a little upset when people say you’re taking the gravel out and there’s these big margins in it. I’d love them to know that it’s not that way at all; it’s an expensive cubic metre coming out.”   The collective agreement Klaassen refers to describes a financial arrangement as much as a flood-control plan. The Seabird band receives royalties for gravel removal from Jakes as well as other unspecified payments for additional services, which form part of Klaassen’s overhead costs. Neither Klaassen nor the band’s economic development adviser, Brian Jones, would place a definite value on Seabird’s involvement in the partnership, but in the past the band has charged royalty rates ranging from $0.40 to $2 per tonne. Between 2005 and 2009, the band partnered with Jakes Construction, and possibly other contractors, to mine about 900,000 tonnes of gravel from the reach – which, at a lowball rate of $0.40 a tonne, amounts to $360,000. The band also received $860,000 in provincial funding to build temporary causeways to the Spring and Tranmer bars – two lucrative contracts, both awarded to Jakes. (Jakes also received $200,000 from the City of Chilliwack to build the access road to Big Bar in 2006.) The funding process thus forms a loop: government money is delivered to a band to build a bridge, the band pays a contractor to build it, the contractor removes the gravel – and from the revenue earned by building the bridge and selling the gravel, the contractor pays royalties and fees for “additional services” back to the band. When asked about this arrangement, Jones protests that his band barely makes any money after all the time spent processing red tape and permits. “To quote a royalty amount is not what I would like to see as this doesn’t reflect our overall intent, which is to remove materials from the river to lower the flood profile,” he said in an emailed response. “Any lowering will be a huge benefit for Seabird as we do not have any dike protection at similar heights with others. . . . We are not in this for the money.” Similarly, Klaassen defends the practice of gravel mining as having public safety uppermost in mind and downplays the profit motive. “We firmly believe it does a lot of good for our valley and everything here, so we’re willing to do a long-term investment,” he says. “Everybody has this predetermined view that this is very valuable material. . . . At the end of the day, it’s no different than anything else: it’s done for the emergency, the flood protection, and after that the thought goes into the sales and to the market.” In the same time frame between 2005 and 2009, K & L Contracting – a gravel pit company owned by Chief Lincoln Douglas of the 479-member Cheam band – mined at least four bars in the reach for over 600,000 tonnes of gravel. Like the Seabird band, the Cheam have been vocal proponents of gravel extraction in the Fraser River. Ernie Crey is a Cheam member, former director of STC fisheries programs and currently a senior policy adviser to the STC. In a written statement released in April, Crey insisted that gravel removal in the reach “is an important public safety work and an important component in maintaining viable fish habitat. The fact that science hasn’t caught up to this reality should come as no surprise to anyone. An integral component to understanding the Fraser River and the fish within it is the traditional knowledge of the people who have lived here and been sustained by its bounty for thousands of years.” Yet a 2004 DFO briefing memo regarding relationships with the Cheam suggests that government-sponsored gravel mining projects in the reach may have more to do with economic development, and détente, than flood safety or traditional knowledge. Following years of confrontations between DFO fisheries officers and Cheam band members over fishing rights (one of which, in 2003, resulted in officers pepper spraying the band’s head councillor), local DFO administrators recommended to their deputy minister that as part of an attempt to “develop [a] long-term respectful relationship between DFO and Cheam,” the fisheries agency should “facilitate a 2004 gravel removal opportunity for the community: excellent economic development benefit for the community ($40,000), profit for the band council.” There was, at that time, no mention of fish habitat, flood risks or public safety.  Back at the Gill Road parking lot next to the dike, Kwak and I meet Chief Jack Mussell of the Skwah Band, a Sto:lo band of about 450 members not affiliated with the STC. Mussell has been doing habitat restoration on the Fraser and its tributaries for the past 15 years. A former logger, he’s 68 and remembers being “right in the midst” of the big flood of 1948. He is critical of gravel removal, predicting the possible channelization cited by Michael Church. “I would like to see this river survive so your great-grandkids could see something here, see that we cared enough to save it. Otherwise we’re going to have one big trough from Hope to Vancouver.” When asked if he considers the gravel removal program to be legitimate flood control, he laughs. “I’ve worked on the river all my life, and I’ve spent years doing everything you could think of with fish habitat,” he says. “Let me tell you, these guys are just blowing smoke with all this flood protection stuff. It’s a money grab.” He leans out the window of his white pickup and nods at the river. “Crey and [Chief Lincoln] Douglas have got a conflict of interest when they start talking about the fish and the gravel. If [Crey] was representing us, he would be asking us. He’s not. There’s 6,000 of us! Every one of them, they’re not representing the people. They’re speaking for themselves; that’s all they’re doing.” Gravel extraction in the Fraser River as currently practiced appears not to be a risk-mitigation work performed with provincial funds, like building a dike, but something closer to an economic development project, one housed under an emergency-preparedness program. This explains why Spring Bar, a site given a thumbs-down by leading hydrologists, was mined for a vast quantity of gravel. Sites are being chosen not specifically for any strategic value in reducing flood threat but for easy access to making a buck – and as a way to build better relationships between government agencies and certain native bands. Economic development is no sin, but neither is it flood control. For gravel removal to actually lower the flood risk, says Marvin Rosenau, the provincial government needs to re-evaluate its policy of offering up gravel bars as for-profit mining sites. If gravel removal is justified, it should go forward as a public work, based on strategic science. “The agencies must provide a publicly transparent hydraulic ‘trigger,’ where gravel is only removed if a certain threshold in increased water-surface elevation is met. Otherwise ‘any gravel removal is good gravel removal’ becomes the context of flood protection, which is intellectually, technically and statistically absurd.” He is equally outspoken on the need for investment in the wild habitat values of the gravel reach. “In the context of gravel removal from the Fraser River, ecologically our kids will have lost such an enormous amount before we ever knew what we had,” he says. “This is a large, complex and difficult stream to work on, and it is an extraordinarily ecologically rich stream by both British Columbia and world standards . . . anyone who tells you that the agencies are protecting the resource in the face of these large-scale mining efforts has no idea what they’re talking about.” With the fly fisherman’s reverence for moving water and the things that live in it, Frank Kwak also would like to see the public sector have a voice in the gravel removal program. The B.C. government, he says, needs to accept – and enact – the ecological oversights suggested by independent biologists such as Rosenau, Otto Langer and John Werring, which includes in-depth assessment of the habitat value of gravel bars and surrounding channels before plans are laid to mine them. “That would be a big step forward.” But he also thinks that agencies such as the DFO should begin restoring what the river, and the people who live on it, have already lost. “If we’ve cut off side channels or killed two million young salmon in the Fraser, we should mitigate that by saying, ‘Well, here is some habitat restoration project that we’re going to do, and pay for it’ – to pay for that loss going forward,” he says. “Because what’s happening now, not just in the gravel but in all kinds of other work, is we’re losing them, losing the fish and habitat, stream by stream by stream. And there’s nothing replacing the stuff that’s being taken away.” 14217 at http://www.bcbusinessonline.ca A History of Vancouver's Banks http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/history-vancouver039s-banks A look back at Vancouver's banks, pillars of a monied metropolis. http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/history-vancouver039s-banks#comments Top Stories architecture banks financial Gastown gastown vancouver history Sinead Keane Vancouver Vancouver history Wed, 07 Jul 2010 15:45:39 -0700 Sinead Keane <h2 class="bcb-article-deck">As our transactional economy relocates to the Internet and financial institutions continue to close branches, we remember those banks that once stood as pillars of our community.</h2> The deed to this award-winning building passed between a number of owners before being bestowed to SFU in 1993. Originally marked as a new headquarters for the Union Bank of Canada in 1919, by the time the Somervel-designed project was completed one year later, Union Bank had been acquired by the Bank of Toronto. It went on to become the B.C. head office of the bank in 1955, remaining as such for 29 years before closing its doors in 1984. <div class="image-header" id="bcb-article-sidebar"> <div class="header-image"><img width="98" height="12" alt="BCB Sidebar - Online Only" src="/files/u102/category_online-only.gif" /> Slideshow: <a href="/node/13736">Before and after photos of Vancouver's grandest banks </a></div> </div> In 1987 an architectural charette sought methods of saving the derelict banking hall and, as a result, the building was donated to SFU as an international conference centre. Transforming the crumbling edifice into a first-class centre proved a difficult task for Scott Construction due to the building’s heritage status. While the interior of the property was completely transformed, the exterior limestone, terra-cotta cornice and Edwardian coffered ceilings were preserved. When Russian-born philanthropist Morris Wosk donated $3 million toward the construction, the university acknowledged his contribution by naming the building in his honour. 14216 at http://www.bcbusinessonline.ca Nothing Ventured Nothing Gained http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/nothing-ventured-nothing-gained Conditions in the world of venture capital may not be at their peak, but some investors are looking up http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/nothing-ventured-nothing-gained#comments Top Stories Andrew Findlay angel investors B.C. Angel forum B.C. energy B.C. tax credits BCRCF private equity venture capital venture capital funds Wed, 07 Jul 2010 15:45:27 -0700 Andrew Findlay <h2 class="bcb-article-deck">It’s been a dreadful few years for the venture capital field, a situation made markedly worse by the recession and a growing aversion to risk. Can things be turned around? Or is a new funding model in order for B.C.’s startups?</h2> The venture capital world, while not exactly dead, has clearly seen better days. Last year, according to analysis by Thomson Reuters and Canada’s Venture Capital & Private Equity Association, venture capital (VC) deal activity in Canada fell to its lowest level since the mid-’90s, down to $1 billion from $1.4 billion the year previous. In B.C. – where there are roughly 10 active VC funds with $1.8 billion in assets under management, accounting for 20 per cent of all VC deal flow in Canada – the experience mirrors national trends: in 2005 roughly $225 million of venture capital was invested by these funds; last year saw just $141 million. A lack of market liquidity has resulted in a dearth of initial public offerings (IPOs) and mergers and acquisitions (M&A), leading to poor fund performance. Institutional investors with fiduciary responsibilities have fled VC for safer investments, and once-bedrock local VC funds are struggling. GrowthWorks, for example, is posting three-year returns in the negative seven-to-10 per cent range – what one Vancouver financier politely describes as “nothing to write home about.” In December 2009, the B.C. Discovery Fund ceased redemptions after paying out $5.2 million to investors, and in January managers of the $23-million Pender Growth Fund informed shareholders that they could only meet 55 per cent of share-redemption requests for the time being, blaming “reduced opportunities for near-term liquidity in the fund’s portfolio.” In early May, the B.C. Advantage Fund temporarily suspended redemptions of its two VC funds, also citing a lack of cash. Venture capital belongs to a rather esoteric realm of finance not that well understood by the general public. It thrives on word-of-mouth tips rather than public financial statements, so getting fund managers to discuss strategy candidly is at times like trying to crack military code. (Then there’s the somewhat blurry line between venture capitalists and so-called angel investors, who, rather than entrust their investments to a VC fund manager, prefer to do the investing themselves or pool with other angels. Both offer a combination of equity and business experience to help entrepreneurs bring their prototypes to commercial stage or inject a boost of capital to early-stage companies enabling them to grow to the next level.) If they bet on a winner, venture capitalists can expect to realize a return on investment (in the form of an IPO or an acquisition) within a five-year horizon for IT or within 10 to 15 years for the more capital-intensive clean-tech sector. But, as indicated by the litany of stumbling VC funds, shareholders have had little to cheer about recently. And according to a June 2009 report from the U.S.-based Kauffman Foundation, things could soon get worse: it predicts a monumental rightsizing that could see annual VC investment contracting by 50 per cent in North America in the coming years. Which raises the question, Is venture capital in Vancouver a barely flickering, soon-to-be-extinguished flame of high-risk finance, or does it remain a going concern? BCBusiness talked with a handful of the province’s VC specialists to find out.  <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="186" alt="Steve Hnatiuk" src="/files/image/BCBusiness/NxtGen-Emission-3.jpg" /> A light in the dark: A tax on U.S. investments in Canadian ventures is coming down, and venture capitalists such as Steve Hnatiuk are looking up.</div> Basil Peters believes that if the VC sector is to survive, it must emerge from the current meltdown leaner and more tightly focused, ruled by smaller funds whose managers’ remuneration is more closely tied to the success of their investments. Peters heads Fundamental Technologies II, which he calls an early-stage angel fund specializing in high-tech. As a UBC engineering grad student in 1982, Peters and some associates started Nexus Engineering Corp. Ten years later, it was a leading manufacturer of cablevision infrastructure equipment, with annual sales of more than $30 million. The board decided it was time to sell. When Peters was stickhandling the $20-million sale of Nexus as CEO, he recalls fighting off a hostile takeover from one of the company’s VC investors. These days Peters believes angel investors will play a more prominent role in fostering B.C. startups and growth firms, and statistics from the B.C. government seemingly support this thesis: while VC investment in B.C. fell by almost 40 per cent between 2005 and 2009, angel investment over the same time frame grew by 80 per cent. The stats aren’t surprising to Peters, but what happened to venture capital? The thinking goes that, starting in the 1980s and continuing through the 2000s, venture funds exploded into multi-hundred-million-dollar beasts optimized around staggeringly huge exits, few of which actually materialized. According to one VC critic, 97 per cent of exits happen below $50 million, but the industry was structured around exits of greater than $200 million – one per cent of all VC deals. In addition, these funds were administered by managers who charged fees based on a percentage – often two per cent – of the fund value, so managers were intrinsically motivated to grow the fund into ever-larger financial animals out of touch with market realities. “Fund managers have done well by this model, but the gig is now up,” says Peters, who as one of the founders of the B.C. Advantage Fund had direct experience with this broken model. “I stood up and told a lot of investors that they were going to get their money back in five years. That’s not going to happen. Liquidity is a huge problem.” With his new angel fund, Peters charges no management fee. Management only gets paid if there’s a successful exit – through an IPO or an acquisition involving one of the fund’s portfolio companies. So the fund will either deliver returns to shareholders in a timely manner or be relegated to the trash heap. Rather than focusing on huge investments and equally huge exits, Peters says, new funds need to be attuned to the fact that entrepreneurs are developing IT companies for tens of thousands instead of tens of millions of dollars, and those generally aren’t the kind of investments that excite large VC fund managers. Bob Chaworth-Musters, founder of the B.C. Angel Forum, is another evangelist for the angel approach. Since 1997 he has been gathering as many as 60 investors semi-annually to hear pitches from between 20 and 30 entrepreneurs seeking anywhere from $100,000 to $1 million in equity financing. On May 18, Chaworth-Musters hosted the 27th Angel Forum, the latest in a series that has so far resulted in $28-million worth of investment. He says angel and small-VC investment has been boosted by provisions in B.C.’s Small Business Venture Capital Act, passed into law in 2003. The act allows B.C. residents to claim a 30 per cent tax credit, up to $60,000, on money invested in approved venture capital corporations, usually managed by venture capitalists or angels and formed solely to invest in startup, emerging and expanding small businesses. “The 30 per cent tax credit has helped substantially. It’s a good program and I think equity is a lot easier to come by in B.C. than it is in other jurisdictions because of it,” Chaworth-Musters says, adding that VC fund managers will come to a forum to scout for up-and-comers but are angling for investments that will net 10- or 15-times exits. “A lot of companies in B.C. won’t get big enough to interest VC.” In several ways, B.C. is ahead of the curve with its tax credits and support of VC funds, something Canada’s Venture Capital and Private Equity Association says is crucial for rescuing a VC sector experiencing a “severe” crisis in investor recruitment and shareholder returns. In addition to its venture capital corporation tax credit program, the province in 2008 introduced the $90-million B.C. Renaissance Capital Fund (BCRCF). The fund is seeded with money collected by the feds from economic immigrants, with a percentage of these proceeds handed to the provinces. B.C., through the BCRCF, uses a portion of its share to invest in VC funds to boost local tech startups. Since its inception, the BCRCF has doled out $13 million into various funds. Todd Tessier, executive director of B.C.’s Investment Capital Branch, which is responsible for the BCRCF, says these allocations have translated into $60 million in investment to date – a leverage factor of four to one – in Vancouver firms such as Angstrom Power Inc., Indicee Inc., Cooledge Lighting Inc. and Ostara Nutrient Recovery Technologies Inc.  <div style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: right;" times="" new="" roman=""><img width="259" height="186" src="/files/image/BCBusiness/Electronic-Arts-3.jpg" alt="venture capitalist Paul Lee" /> A tall order: Raising money gets harder as investors get more demanding, says former EA president and current venture capitalist Paul Lee.</div> “I like to think of the venture capital marketplace as an ecosystem. We need sources of private capital, including venture funds, to build our next wave of anchor technology companies,” Tessier says. “Their pools of capital and expertise are needed, and their hard times are often systemic of poor market conditions or other market opportunities of the day such as real estate and commodities.” In 2007, when Richmond’s Cellex Power Products Inc. and TIR Systems of Vancouver Inc. were bought for $75 million and $45 million, respectively – the former by fuel cell maker Plug Power Inc. and the latter by Royal Philips Electronics – they represented successful exits for local VC heavyweight Ventures West Capital Ltd. But it also meant that B.C.-grown technology with multibillion-dollar potential would not get commercialized locally. Examples such as these are why the province jumped into the VC game, according to Tessier: to not only bring innovative goods and services in B.C. to full-scale commercialization but also to lure more institutional investment and prevent homegrown companies from floundering or being snapped up mid-stride by foreign enterprises. While angel proponents such as Basil Peters fear that the province may simply be propping up the tired VC beast, Tessier disagrees. “We believe that our world-class technology opportunities in this province, combined with our local venture capital community, is enough to convince fund managers to invest here,” he says. Over at Yaletown Venture Partners, there are tentative signs of a VC resurgence. Despite market illiquidity (several Yaletown-backed startups such as Vancouver’s NxtGen Emission Controls Inc. remain in fund portfolios awaiting a public offering or acquisition), Yaletown co-founder Steve Hnatiuk and his partners have still managed to attract $162 million to their clean-tech and IT-focused funds, Yaletown Ventures I LP and Yaletown Ventures II LP (the latter was launched in 2008 and includes an injection of equity from the BCRCF). “Our job is to get in early, grow an enterprise and then get out through either an IPO or M&A,” Hnatiuk says. “However, it has been a very difficult environment for venture capital to operate in, and there’s a snowball effect. Reductions in allocations from financial institutions to venture funds mean less money for innovative companies that are significant drivers in the economy.” That said, Hnatiuk’s hopes are buoyed by a recent change to federal tax regulations that he believes will make it much easier to attract American investment to VC funds as well as give a boost to local startup tech companies. The often-maligned Section 116 of the Canadian Income Tax Act required foreign investors to pay a 25 per cent withholding tax on capital gains earned when a Canadian investment was sold. (Alternatively, they could fill out paperwork proving residency to receive an exemption.) For deal makers such as Hnatiuk trying to partner with foreign fund managers, the rule was an onerous administrative burden requiring the disclosure of investors’ personal information, something most are loathe to do in the secretive world of VC financing. In March’s federal budget, Section 116 was stripped down, with non-resident investors now free from both bureaucratic paperwork and the obligation to pay withholding tax (so long as the value of that sale doesn’t come principally from real estate). “The regulation created unnecessary impediments for U.S. venture investors coming into Canada,” says Hnatiuk (who left his management position at Yaletown shortly before this article went to press). “With this final barrier to the free flow of capital falling, investing in Canadian companies will now be no different for American venture funds than investing in U.S. companies.” The full impact of revising Section 116 remains to be seen. While it should lead to more investment in Canadian funds by U.S. investors, it could also lead to more competition for local VC firms. Paul Lee, former president of Electronic Arts Inc. and now a senior partner at Vancouver’s Vanedge Capital, isn’t worried.  “While it will mean more U.S. venture funds coming up to invest in Canada, they will generally look for local co-investment partners,” says Lee. “We believe the additional capital and enhanced contacts will provide more opportunities for Canadian companies to grow internationally, which will enhance the returns from our portfolio companies.” As woeful as returns have been of late, believers say that VC funds remain a critical component in sustaining what is, in Vancouver, one of the largest clean-tech sectors in the world and the largest digital-media workforce in Canada. Still, successful fund managers go where the good investment prospects are, and that doesn’t necessarily always lead to B.C. Paul Lee’s new firm, for instance – with a focus on social media and new media gaming apps for devices such as iPhone, iPad and Android – announced in May that its first fund, Vanedge Capital I LP, closed at $100 million, with expected exit time horizons in the three- to five-year range. Lee says Vanedge is not a regionally focused fund, which is another way of saying it’s not married to investing in B.C.; hence its first play last September was for a stake in Toronto online advertising specialist NeoEdge. Lee, a former co-chair of the Premier’s Technology Council, says his partners at Vanedge bring a wealth of experience in new media, giving the fund a competitive advantage. But he admits that today’s investor remains wary. “Investors are doing much more thorough due diligence and demanding that venture fund managers have proven operating and investment expertise and success in the areas of focus for their funds. That is going to make it much more difficult for a lot of funds and prospective fund managers to raise capital,” he observes. “So I think fundraising – that is, actually making it through the diligence process – is likely to be the biggest challenge. For the investors, that is a good thing.” Wal van Lierop, former vice-president of strategic planning for Westcoast Energy, Inc. is now CEO of Chrysalix Energy Venture Capital. Although he agrees that the old model of huge unsustainable funds is dead, he isn’t tossing in the towel on venture capital. Van Lierop’s Chrysalix Energy LP III fund, which topped US$120 million this spring, boasts one B.C. company, Burnaby’s General Fusion Inc., and four American tech firms in its portfolio. Both General Fusion, which is developing a utility-scale fusion engine, and Primus Power, a California innovator in low-cost energy storage technology, are cogs in the wheel of van Lierop’s utopian vision of a green energy revolution in North America. While van Lierop is excited about the future of green energy in B.C., he believes investors and innovators need to become savvier when it comes to recognizing the province’s strengths. Venture capital will play a key role, he says, simply because the largely commercially unproven clean-tech sector – which in B.C. is a crowded carnival of some 200 different firms – requires huge amounts of risky upfront capital. But VC investors will also require the stomach to endure long return time horizons with energy innovators that, in some cases, can soak up hundreds of millions of dollars before technology goes commercial. According to van Lierop, B.C. can plan for the future by learning lessons from the past, namely the domestic pulp and paper sector. Thanks to an abundance of cheap energy, B.C.’s pulp and paper producers have languished for decades, becoming increasingly antiquated and inefficient by failing to invest in new technologies. The industry went from being a world leader to a moribund second-rate player while other countries that innovated, such as Sweden, stole market share. Lest our energy advantage go the way of pulp and paper, van Lierop says, B.C.’s venture capitalists need to view the clean-tech sector, despite the inherent risks, as a tremendous opportunity for their industry. “However, if we don’t take advantage of our energy position,” he cautions, “there are companies in the U.S. and elsewhere that will fill the void, and we’ll be left behind. Silicon Valley is moving away from IT and into clean tech in a big way.” 14215 at http://www.bcbusinessonline.ca Jacqui Cohen: Army & Navy's Sole Survivor http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/jacqui-cohen-army-amp-navy039s-sole-survivor Jacqui Cohen has big dreams for Vancouver's Downtown Eastside. http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/jacqui-cohen-army-amp-navy039s-sole-survivor#comments Top Stories Army & Navy Bob Rennie Garth Kennedy gentrification Jacqui Cohen Samuel Cohen Timothy Taylor Vancouver Downtown Eastside Vancovuer real estate Wed, 07 Jul 2010 14:07:19 -0700 Timothy Taylor <h2 class="bcb-article-deck">Jacqui Cohen has been on the vanguard of Vancouver’s Downtown Eastside renaissance, investing in the troubled area for over a decade when everybody else told her to walk away. Now, with the planned redevelopment of her flagship Army & Navy store, Cohen has even bigger dreams for the city’s historic core.</h2> There was a story the newspapers used to tell about Army & Navy. It showed up a number of times during the late ’70s and early ’80s. It involved pointing out what was then considered to be a central irony about the company. That is, the fact that the iconic Vancouver discount department store – opened on Hastings Street in 1919 by Samuel Cohen and still owned at that time by his fashionable, sports car driving, glamorously good-looking descendants – was in fact run and controlled by a teetotalling Baptist counting pennies in a dingy converted stockroom in Regina. That old story is easy enough to parse today. The implication was that selling seconded clothing and fishing tackle might make you very rich but that the very rich themselves (certainly two generations later) didn’t have the right mental culture to sustain their wealth by the same method. To actually take care of business, to think strategically about the future, to be engaged with the here and now, they needed to bring in a man with a discount frame of mind. They needed that penny-counting Baptist in his poorly lit Regina stockroom. That man’s name, incidentally, was Garth Kennedy, and he’d worked his way up to president over a 50-year career that started in the warehouse. And as distant as he might be from the company today (he died of a heart attack 12 years ago), he’s on my mind as I stand in the Coal Harbour studio of Shaw Television, watching the current president and CEO of Army & Navy going through her paces. The current president, who came on after Kennedy’s death and who is familiar to many Vancouverites from her high-profile charity work, is Samuel Cohen’s surviving granddaughter, Jacqui Cohen. To think of Garth Kennedy while watching Jacqui Cohen is to hold two very different things in your head simultaneously. Cohen, to state it mildly, doesn’t have a teetotalling Baptist air about her. She is effusive, enthusiastic. She has a hearty laugh and likes to touch the arm of the person she’s talking to when making a point. Just now, in fact, she’s doing something one suspects Kennedy would not have been able to pull off: she’s sitting with Michael Eckford and Fiona Forbes, hosts of Shaw’s Urban Rush, talking about shoes. Enjoying it too, it’s easy to see. From the darkness behind the cameras, I watch the three of them kibitz about which celebrity wears which pair or why exactly Eckford seems unwilling to let go of a leathery studded shoe the straps of which go high up a woman’s calf. “You’ve picked out a sexy one there, I see,” Cohen says to him, deadpan. Then, to Forbes: “You’re freshly pedicured.” So they talk about pedicures for a while. And then, because it’s television, they swirl through several other topics – Cohen’s Face the World Foundation (which gives to a wide range of non-profits in the Vancouver area), the recent involvement of Cohen’s daughter Kasondra in the family business – before landing on the more critical issue of Vancouver’s Downtown Eastside and its restoration.  <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="186" src="/files/image/BCBusiness/Jacqui-Cohen-3-4.jpg" alt="" />Jacqui at the office with her daughter, Kasondra.</div> Here Cohen’s demeanour noticeably shifts. She’s still on television. There’s still an aura of self-awareness about her, that quality in camera-ready people to present a good angle, to shape their words with a listener in mind. But it’s clear that for Cohen this matter is serious: how we might restore what was once the social, cultural and commercial heart of Vancouver, saving it from a destitution and pessimism that many of us saw entrench over the early 2000s. And for a person whose business has been anchored in the neighbourhood for almost a hundred years, it’s also a personal matter. “I fed birds in Pigeon Park with my grandfather when I was a little girl,” the 57-year-old Cohen tells Eckford and Forbes. “And I just want to say that gentrification is not my thing. On Welfare Wednesday, those people come to my store. And I think it’s great, because it’s their neighbourhood too.” Shortly thereafter, the discussion returns to shoes. (Cohen is promoting Army & Navy’s annual shoe sale, after all.) And shortly after that, the show is over and we’re out in the April sunshine driving in Cohen’s black convertible Bentley toward the Army & Navy offices at the corner of West Cordova and Abbott streets. We’re talking about how glam the area around the Shaw studios has become with the green-roofed Convention Centre and the new Fairmont Pacific Rim. But down the Cordova corridor ahead of us, I can already see the newly lit Woodward’s sign spinning and sparkling at the heart of that complicated neighbourhood where the Cohen family has been operating for so long. And Garth Kennedy comes again to mind. I’m thinking that however emblematic he was of Army & Navy in former years, he would not be able to represent the company now. As Vancouver contemplates a new beginning for the Downtown Eastside, the fate of the neighbourhood’s oldest retailer – and the only surviving commercial employer of the area’s heydey – is clearly a live concern. And no matter how good Kennedy ultimately was for the company once, a Regina-based accountant would not be the best choice to navigate the company’s transition today. To take care of that business, to think strategically about that future, to be engaged with this particular here and now, success will depend on someone who is plugged in, who knows the neighbourhood, who is vested. <div id="bcb-article-sidebar" class="bcb-sidebar text-layout"> <h3>The Cohen Clan</h3> <img width="259" height="186" alt="" src="/files/image/BCBusiness/Jacqui-Cohen-3-1.jpg" /> Jacqui (second from left) with her parents and two siblings in the 1970s. <img width="259" height="186" alt="" src="/files/image/BCBusiness/Jacqui-Cohen-3-2.jpg" /> Jacqui with her daughter, Kasondra, and mother, Marlene.</div> Someone, that is, like Jacqui Cohen. You wouldn’t have always guessed that Jacqui Cohen and the Army & Navy brand would grow so strongly identified with each other that Army & Navy’s director of operations Debbie Elliott (a person Cohen describes as her “right hand”) would say to me, “Army & Navy is Jacqui Cohen, yes. But Jacqui Cohen also is Army & Navy.” Cohen may have worked in the children’s clothing department as a girl. She may have fed pigeons with Grandpa Sam. And she may still quote Grandpa Sam in conversation, demonstrating that she learned at the knee of the master. But her route to the presidency was anything but ordained. Cohen’s father Jack might have been the successor after Sam Cohen’s death in 1966, were it not for his limited mobility due to multiple sclerosis. Instead, Sam Cohen had chosen Jack’s son Jeffrey as his next-in-line, bequeathing him 40 per cent of the company to facilitate his control when he reached the right age and maturity. Another 40 per cent – held in trust for Jack in connection with the settlement of some gambling debts – was effectively controlled by non-family members on the Army & Navy board. The remaining 20 per cent of company ownership was split evenly between the sisters, Jacqui and Karen. Jeffrey never did take over from Garth Kennedy, however. He had struggled with drug addiction throughout his early 20s and was relentlessly in the public eye. A staggering 94 articles ran in local papers about the young man from his first adult drug conviction in 1974 until April 1978 when, aged 26, he died after taking heroin in his suite at the Hotel Vancouver. And while one such tragedy would be epic for any family, just four years later Jacqui’s sister Karen also died. It was August 1982, two weeks after her fiancé had been stabbed to death in a Cornwall Avenue apartment by a man who reportedly owed him money, and Karen lost control of her Ferrari on the Stanley Park causeway, driving into oncoming traffic. She was pronounced dead at St. Paul’s Hospital. She was 28.  Jacqui Cohen herself had been living in Los Angeles during these years, going through what she describes now as her “university of life” phase. (Which would involve hanging out with Hugh Hefner and later marrying Chicago businessman Hershel Herrendorf, from whom she separated in 1991.) She doesn’t speak much about the family tragedy of these years, only stressing how it changed her. In her office – pictures of Samuel, Jack, Jeffrey and Karen Cohen hanging high on the wall behind her – she says to me, “Certainly you could say that destiny, which included losing my brother and sister, ended up making me who I am.” <div class="bcb-sidebar text-layout" id="bcb-article-sidebar"> <h3>Friends in All Places</h3> <img width="259" height="198" src="/files/image/BCBusiness/Jacqui-Cohen-3-9.jpg" alt="" /> With Senator Larry Campbell. <img width="259" height="273" src="/files/image/BCBusiness/Jacqui-Cohen-3-6.jpg" alt="" /> With author Jackie Collins. <img width="259" height="292" src="/files/image/BCBusiness/Jacqui-Cohen-3-8.jpg" alt="" /> With former Army & Navy president Garth Kennedy. <img width="259" height="207" src="/files/image/BCBusiness/Jacqui-Cohen-3-7.jpg" alt="" /> With artist Bill Reid.</div> But not immediately, it should be noted. Fortunes at Army & Navy were in a skid during these years. Sales that had topped $100 million in the late ’70s were in freefall during the ’80s as Wal-Mart and Costco took over discount retail. In 1985 Cohen sued to oust Garth Kennedy and return control of the company to her family via a partnership with another retailer. “I was thinking at the time that 50 per cent of something would be better than 100 per cent of nothing,” Cohen says about the dispute. Still, Cohen’s group lost. Kennedy had the power, acting as part of the trust that controlled 90 per cent of the company’s voting shares: the 40 per cent held in trust for Jack as well as Jeffrey’s and Karen’s share, which had been left to their father and gone into the same trust structure after their deaths. When Cohen returned to Vancouver in 1991, the company’s sales base continued to erode, falling as low as $50 million. But there was little Cohen could do about it. “I was involved, but I wasn’t running anything,” she says. Interviewed that same year, just after launching Face the World (which now gives over a million dollars a year to local causes), Cohen’s choice of words was telling when she described herself as having been “looking for something to do.” Something to do, other than charitable work, wouldn’t be long in coming, however. Two seismic shifts were on their way. In 1995 Jack Cohen died. With his death, the holding trust fell away and, as Jack’s beneficiary, Jacqui Cohen suddenly found herself in control of the company. When Garth Kennedy then died in 1998 of a heart attack, the transition from old regime to new was complete. “Kip Woodward told me, ‘It’s grown-up time,’” she remembers, speaking of the longtime friend whose grandfather founded the Woodward’s department store. “And though I didn’t take over as president right away, there came a point where I decided that if somebody was going to make mistakes, it might as well be me.” Were there many detractors when she announced she was assuming direct control? Cohen laughs her trademark laugh at the question, then quips, “I didn’t have any pro-tractors.” Then she corrects herself. She had at least one supporter: Jane Kahzen, who would become Cohen’s operations manager in the early years, wrote Cohen a supportive, encouraging letter that is framed on the wall behind her desk. “That meant a lot,” Cohen says, reading the letter and touching a finger to the good-luck shamrock affixed to the surface. But then, in the next breath, Cohen names old family friends – recognizable Vancouver names, including Woodward, Joe Segal and Sam Belzberg – who told her to sell. Get out of the decaying Downtown Eastside. She didn’t need the headaches. And of course she didn’t, but Cohen had also heard her father’s lament after Jeffrey’s death: “I remember it clearly. He said out loud that it was the end of the Cohen legacy. And that got to me.”  <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="186" src="/files/image/BCBusiness/Jacqui-Cohen-3-5.jpg" alt="" />Jacqui with Premier Gordon Campbell and singer Tom Jones.</div> So it was a family matter, a legacy matter, a matter of pride: to save Army & Navy. And having made her decision to assume the presidency in 1998, Cohen’s impact was immediate. She closed three stores in Saskatchewan. She streamlined staff from 800 to just over 500. She hired new buyers and centralized that function, shifting away from the buying of distress merchandise that had always defined Army & Navy and looking instead to discounted brand-name merchandise. She also undertook a major rebranding exercise in 1999, readopting the logo Grandpa Sam had used and launching an ad campaign embracing the retro-chic irony of a discount store to appeal to younger buyers. “I did a lot of things fast,” she says, remembering the pace of change in those days. “But we had to. We weren’t getting in the kids!” The rebranding was a success. An article published just a few months after the ad campaign was launched noted that Army & Navy bags could now occasionally be spotted even on trendy Fourth Avenue. And at the time of writing this article, I couldn’t help but notice the same thing – young people with Army & Navy bags – in the Gastown area. But perhaps the best indication of Cohen’s approach and impact during these years, and what the future may hold for the company, would be the Langley store, which opened in 2001: a 60,000-square-foot one-level store in the Langley Mall that all the focus groups told her she’d be crazy to open. Wal-Mart and Linens ’n Things were already in the area, they said. Plus, the newer and fancier Willowbrook Mall was less than a kilometre away. Cohen didn’t listen. “Everyone wants bargains!” she exclaims. So she went ahead and bought the mall outright and opened an Army & Navy where a Zellers had been. “And we’ve never looked back,” she says. With good demographics for both discount fashion and fishing gear in the area, it’s now the highest-grossing store in the six-store chain at $13 million in sales, just ahead of downtown. “I love my old ladies,” Cohen says, using her pet name for the aged facilities in downtown Vancouver and New Westminster. “But Langley is my vision for the future.” As in, a redevelopment of her downtown block along the lines of Woodward’s with a new Army & Navy that’s cleaner, more modern but still discount? Cohen smiles coyly. She says, “Where’d you hear about that?” Well, you might say it has become inevitable. Because there’s been at least one other seismic shift in the Cohens’ business landscape. Real estate has always meant something in Vancouver. But when Grandpa Sam bought five hectares in Port Coquitlam 60 years ago, to illustrate, he did it to reserve the space so he could put up an Army & Navy sign. Not very many people would do that anymore. Real estate has become decidedly more important in our era, and by any standard Jacqui Cohen has a lot of it. She owns significant properties in Vancouver, including most of the block of Cordova where Army & Navy is located plus the Dominion Building a few blocks east. She also owns parcels in Edmonton, Calgary, Coquitlam and New Westminster (not Langley, where she sold after negotiating a “very long-term, very favourable” lease). But the Cordova property has become a focal point like never before. There’s the fact of the family’s investment in the area for almost a hundred years, but there’s also the growing sense that there may be no neighbourhood in Vancouver that will see more critical development pressure in the coming years.  <div style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;" times="" new="" roman=""><img width="259" height="192" alt="" src="/files/image/BCBusiness/Army-And-Navy-3.jpg" />In 1995 Cohen became the majority owner of Army & Navy.</div> “The area is the front line for redevelopment in the core of the city,” former co-director of planning for the City of Vancouver Larry Beasley tells me, “because there’s not a lot of redevelopment potential left in other parts of the core.” But planning is needed, Beasley stresses. Not just any development will do. “This is an area to which we hold a very deep and long responsibility to manage carefully,” he says. “The area is historic. But it’s also physically and socially fragile.” The right kind of development, in Beasley’s view, has to honour the heritage of the area, provide for multiple uses and, most importantly, work to preserve the social mix. Bob Rennie agrees. The high-profile real estate marketer and art patron, who recently moved his own headquarters into the Downtown Eastside, explains that his sense of the balance required between different uses and different incomes in the neighbourhood was exactly why the Woodward’s District project was marketed as an “intellectual property.” “It’s because we’re talking about people living there who have a brain and a consciousness to understand that the future lies in a diversified community,” Rennie says. Of course, that doesn’t necessarily mean that Cohen would be well equipped to lead the redevelopment of her own site. She has relatively little real estate experience, after all. But Rennie thinks that personally she has exactly the qualities required. “One thing I know is that Jacqui would develop sensitively, because she’s in the neighbourhood.” Rennie is pointing out that it took unusual commitment to stay in the area given that from the time Cohen took control of Army & Navy in 1998 until at least the beginning of the Woodward’s development, the situation at street level was actually getting worse. <div style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: right;" times="" new="" roman=""><img width="259" height="329" alt="" src="/files/image/BCBusiness/Army-And-Navy-3-2.jpg" /></div> Cohen remembers this period all too well. “Those were the days nobody would come down here,” she says. “Those were the years of the Pickton farm. Women were getting snatched off of Hastings. Anywhere in North America you turned on the news, you were hearing that the worst postal code in North America was, guess where? My neighbourhood.” “Jacqui Cohen has had to do some very difficult work in her life to stay afloat down there,” says former city councillor and longtime Downtown Eastside advocate Jim Green. “But she’s smart, she’s tough and she really does seem to care.” Meaning, she hunkered down and kept the lights on. And she continued to invest in her flagship store: in security, in cleaning, in getting rid of product lines that contributed to crime and drug use such as lighters and razor blades. “She didn’t just keep the faith,” Rennie tells me; “she protected the family asset. She put shutters on the windows. But she stayed. And my hat’s off to her. I have a lot of respect for survivors.”  <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="186" src="/files/image/BCBusiness/Jacqui-Cohen-3-10.jpg" alt="" />The complex Jacqui Cohen suits many stereotypes: privileged heiress, generous philanthropist, community leader, shrewd entrepreneur, and – of course – glamour icon.</div> In the meantime, Cohen is looking at concept drawings for a development on the site of the existing Army & Navy but is tight-lipped about details. At least one concept includes residential towers, but all involve commercial and residential uses combined with market and social housing. Which returns us to the comment Cohen made on Urban Rush about opposing gentrification. Of course she means the kind where high-income people drive out low-income people. And she’s passionate in her resistance to that. “Half my customers are welfare recipients or on fixed income,” Cohen tells me. “And many of those people have real pride of ownership. I totally love the fact that our neighbourhood is mixed. I mean, look at Yaletown. Everybody is gorgeous and thin and young and they all look the same. But excuse me, it just doesn’t have the pulse of the Downtown Eastside. And what makes that pulse is a mix of people. The old-timers that have been around since Grandpa opened the store, combined with young people moving in. That’s what could make this place into a SoHo . . . but we definitely need another name.” She pauses in the rush of words. And then, more slowly, she reminds me and perhaps herself too that “I’m in no rush. I have the luxury of time. I don’t have to make decisions tomorrow.” No rush on the real estate front anyway. Other matters need dealing with just like they need dealing with every day. So I follow Cohen around for a while. I watch her discussing bed linen suppliers with Debbie Elliott and reviewing media plans for the shoe sale. I watch her greeting staff by name in the downtown store. Roger, the security guy who’s been with her 11 years. Anita, who used to run the snack bar and is now assistant store manager. Caleb, the store manager at only 26 years of age who started his Army & Navy career on the ground floor in the grocery department out in Langley (shades of Garth Kennedy). Then we walk downstairs and into the camping and fishing section. Cohen is describing how they’ve opened up the layout, made the aisles wider and tried to keep the inventory very lean, strictly the stuff that’s moving. But I can tell that something has caught her eye. It’s a gas barbecue that isn’t sporting a sign saying how much it would cost at an uptown non-discount store. “Tim?” she calls out to the guy working the section. “Can you post the compare-at price on these barbecues?” Tim scratches his head. He says, “I’m not sure if there is a compare-at price on these units.” Cohen doesn’t need to think about that one. She smiles. She says, “Sure there is. We wouldn’t have bought them if there wasn’t a compare-at price.” And off we go, through the tunnel, under the stuffed tyee salmon that Grandpa Sam caught and into the room where the shoe sale is held – where a camera is waiting. Another television show. Someone else who wants to talk about shoes. I head upstairs and out into the neighbourhood. And the first thing I see leaving Army & Navy is the Woodward’s sign turning. An emblem of history. An emblem of change. And just at that moment, I think of leaving the Shaw studios earlier and seeing the sign from that uptown perspective and how hard it was not to imagine a future when the distance between the two neighbourhoods would be narrowed, when the Downtown Eastside would become a fully integrated part of the city again. Jacqui Cohen might have been reading my mind, because she said, “The Downtown Eastside has been out in the cold for such a long, long time.” Too long. Although if Cohen has a hand in things, perhaps not for much longer. 14200 at http://www.bcbusinessonline.ca Watching Vancouver's Private Investigators http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/watching-vancouver039s-private-investigators With economic crime on the upswing, PIs are making a comeback. http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/watching-vancouver039s-private-investigators#comments Top Stories corporate whistle-blower crime danielle egan investigation privacy private investigators private security firms surveillance infrastructure Wed, 07 Jul 2010 14:03:37 -0700 Danielle Egan <h2 class="bcb-article-deck">With economic crime on the upswing, private investigators are hotter than a Rolex in Times Square. Just don’t call them gumshoes.</h2> 10:27 a.m. “Discretion is the better part of valour,” says Scot Filer, the co-founder of Lions Gate Investigations Group, as he drives past the home of the “target” on a quiet street in a tony Vancouver suburb, turning around only after we’re out of eyesight. The 54-year-old with a trim salt-and-pepper goatee, wearing jeans and black motorcycle boots, parks his rolling office – an unremarkable dark blue Silverado truck that could pass for a rental vehicle – about 18 metres from the target’s house. He reaches into a briefcase for binoculars and a video camera, placing them on the console beside his constantly vibrating BlackBerry. Today’s stakeout, on a warm spring morning, involves an individual engaged in a significant lawsuit against a large corporation. Filer’s duty is to observe the subject and provide video footage that may or may not impact the lawsuit. His client, a lawyer working on the corporation’s behalf, provided limited data about the target: his address and a basic physical description. “Only information that they’re legally allowed to give you,” stresses Filer. “The companies that hire us usually have no tolerance for cowboys that cross the line on privacy laws. Or corporations will call us in as a fixer to plug leaks: employee fraud or security leaks that might make them vulnerable to competitors. They don’t want a lot of noise or a legal battle; they just want the problem to go away.”  <div style="margin: 10px; padding: 10px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;" times="" new="" roman=""><img width="259" height="247" alt="" src="/files/image/BCBusiness/2010/private-investigators-3-1.jpg" /></div> Filer worked as a plainclothes detective in the Major Crimes Unit of the RCMP for the majority of his 30-year career, specializing in behavioural sciences and geographical profiling. He left in 2008 to launch Lions Gate with Fred Pinnock, a fellow Mountie with 29 years of service in undercover operations and forensic evidence collection. “As the manager, I don’t get out into the field as much as I’d like to because we’re so busy these days,” says Filer, taking a swig from his Grande Americano. “It’s good to be out doing surveillance again. I like getting my hands dirty; I like the chase, the creativity, solving problems.” After reaching staff sergeant, he felt he wanted a change and decided to retire from the forces and harness his expertise in the private sector. “In law enforcement, you become a cog in the machine. I needed to re-energize myself, do something new and challenging, and there are so many opportunities to work outside law enforcement now,” he says, pointing to the growing need for private eyes in a world increasingly plagued by fraud and multiple threats to public and corporate security, from the bean-counters skimming company funds to the fired employees turned rogue snipers to the Ponzi schemers who have recently shaken the financial world. In one recent high-profile example, the B.C. Securities Commission imposed a record fine of $26 million and trading bans on four local individuals – Hal McLeod, Kenneth McMordie, Dianne Rosiek and David Vaughan – for operating a Ponzi scheme that allegedly defrauded 800 investors to the tune of $16 million. The case has been under criminal investigation by the RCMP Commercial Crime Unit since late 2007. “Economic crime is an especially low priority for law enforcement,” says Filer. “They set such a high dollar limit on cases they’ll investigate and have few resources and clout to fight it. With so much crime going on these days and law enforcement so tangled up in bureaucracy, private investigators fill a crucial gap.” As the industry has grown and become more professional, private eyes have tried to distance themselves from the stereotype of gumshoe work: stakeouts, installing covert devices in offices and homes, bartering with informants and even “garbology” (dumpster diving for incriminating evidence). But as surveillance operations such as this one indicate, old-fashioned spadework continues to pay the bills.  <div style="margin: 10px; padding: 10px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;" times="" new="" roman=""><img width="259" height="186" alt="" src="/files/image/BCBusiness/2010/private-investigators-3-2.jpg" /></div> “The term gumshoe still has that low-level, sleazy connotation,” says Filer, while we wait for the target to make an appearance. “Back in the day, the clichés were probably justified. But the industry is so much more sophisticated now.” Economic crime, which includes everything from theft of assets to accounting fraud to money laundering, increased 10 per cent in Canada between 2003 and 2009, according to a recent survey by PricewaterhouseCoopers. Fifty-six per cent of the companies surveyed experienced some sort of economic crime, with 24 per cent reporting losses of more than US$500,000. Globally, up to 10 per cent of companies’ annual revenues are lost to fraud, according to a survey by MacIntyre Hudson, while BDO LLP reports corporate fraud increased 76 per cent worldwide in 2009, with $3.8 billion in lost revenues and predictions of a threefold increase by 2013. The U.S. Justice Department has recently cracked down on economic fraud, with corporate fines surging from an average of US$6.4 million between 2004 and 2007 to US$86.4 million in 2009. The Harper government has pledged similar tough action, with proposed national regulations set for 2012. The climate is ripe for private investigators, and the more progressive ones have started rebranding themselves as risk mitigators with full-service shops, offering employee background screening, corporate whistle-blower hotlines, computer and accounting forensic investigations, VIP security and an arsenal of overt and covert surveillance. With the establishment of strict privacy laws, new regulations and the complexities of operating in expanding global markets, private eyes working for corporations and law firms have to sign thick confidentiality agreements and tread carefully in an increasingly litigious world, necessitating information that can stand up in court. The field is now dominated by large global outfits such as New York-based Kroll Inc., which pulled in US$667 million in revenues in 2009, and Stockholm-based Securitas Group, which netted about $8.9 billion in sales last year (and has rapidly been gobbling up other private-eye companies, including the legendary Pinkerton Agency). Yet the majority of PIs operating in B.C. – which includes 233 firms, 563 licensed PIs and another 506 PIs under supervision (trainees who must have 2,400 hours of experience and nine courses completed before graduating to full PI status) – are sole proprietors, with few outfits having more than five full-time investigators on staff.  <div style="margin: 10px; padding: 10px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;" times="" new="" roman=""><img width="259" height="186" alt="" src="/files/image/BCBusiness/2010/private-investigators-3-4.jpg" /></div> Lions Gate – whose board includes the world-renowned expert in psychopathy Robert Hare, co-author of Snakes in Suits: When Psychopaths Go to Work – counts 15 contract employees in addition to its two co-founders, including specialists in financial crime investigations, security threat assessment and covert surveillance. The firm has handled about 200 high-profile cases since opening shop two years ago, ranging from insurance fraud (the bulk of its work) to missing persons investigations to uncovering a counterfeit cigarette ring for a tobacco company. While Filer won’t provide specifics on revenues, he says they’re up 32 per cent in the past year, “exceeding expectations.” After two hours of surveillance, I still feel as inconspicuous as a tarantula on a peach, yet even the hawk-eyed mothers emerging occasionally from neighbourhood homes to ferry the kiddies around don’t seem to notice us. It’s quite thrilling to hide in plain sight. Then a woman exits the target’s house carrying cleaning supplies to a black SUV parked on the driveway. And seconds later, a taupe four-door sedan pulls into the driveway, and a man matching the description of the target gets out. “I think we got him,” says Filer, reaching for his video recorder as the man chats with the woman. Both are seemingly oblivious to our presence as Filer shoots about five minutes of footage. After the target has gone inside his house – all the blinds on the windows drawn tighter than a snare drum – Filer circles around the block to powwow with Jag Gill, his 35-year-old backup private eye, stationed in a brown SUV, and give him a two-way radio. Gill takes over as primary “eye,” and we take a quick “nature break” at a gas station before relocating to a nearby intersection in case the target goes mobile again. Did Filer gauge anything useful from the target’s apparent lack of watchfulness? “No. Unlike criminals, regular people are rarely ever suspicious or vigilant. That doesn’t mean they’re not guilty of something,” says Filer. “We did a background check, mostly through open-source sites like online court databases and Facebook, and there appears to be nothing untoward about this guy. Of course, I’m a cop; I think everybody is guilty.” Once in a blue moon, corporate spying hits the public radar, and many large corporations have been outed for hiring private eyes to shadow employees, lobby groups and environmental organizations. Hewlett Packard’s former chair, Patricia Dunn, was infamously indicted in 2006 for conspiracy, identity theft and violating California privacy laws after she hired private eyes to spy on employees and journalists suspected of leaking business secrets. The charges against Dunn were later dropped, but HP had to pay US$14.5 million in civil suits. Other corporations reported to have hired PIs to engage in corporate espionage include Oracle, Procter & Gamble, Volkswagen and chocolate giants Nestlé and Mars.  <div style="margin: 10px; padding: 10px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;" times="" new="" roman=""><img width="259" height="186" alt="" src="/files/image/BCBusiness/2010/private-investigators-3-3.jpg" /></div> Here in Canada, our juiciest corporate skulduggery case pitted Air Canada against Westjet. After a massive civil suit, a shamefaced Westjet paid a $15.5-million settlement in 2006, admitting its senior execs had accessed passenger-load data from Air Canada via a former Air Canada employee and still had access to its proprietary data. Ironically, the case initially made news after a Westjet executive, who had a screen scraper program created for the Air Canada data, sent photos to the media of the private eyes hired by Air Canada carting away garbage from his Oak Bay home. “We obtained that garbage, including shredded documents that implicated a Westjet executive,” says Kim Marsh, who led that investigation as the head of Phoenix-based IPSA International’s Canadian office. Marsh, a tall, clean-shaven 56-year-old wearing a navy suit (not a fedora or trenchcoat in sight), worked for the RCMP for 25 years, specializing in covert surveillance in drug enforcement and money laundering. He worked with U.S. authorities in L.A., New York and at Miami’s DEA office before starting his own Vancouver-based investigations firm, West Coast Investigations & Consulting, in 1998. Four years later, after a series of plum assignments – including a “deep op” tobacco case that involved “befriending an executive implicated in a smuggling ring in a Caribbean tax haven” – IPSA came knocking with a buyout offer that gave Marsh reign over its new Canadian headquarters. Marsh’s downtown office, overlooking Vancouver’s law courts, has eight full-time staff and 10 contractors juggling approximately 500 cases annually. Clients include the B.C. government, ICBC (which contracts private eyes to investigate 3,700 of its approximately one million annual claims) and various corporations, the majority of which are American owned and can’t be named due to confidentiality agreements. “Most of our investigations are basic and aren’t that challenging,” Marsh admits as we sit in his tidy, large corner suite. “About 10 per cent are exciting. We’re working on two substantial Ponzi scheme investigations. I’m also tracking an entrepreneur in Europe and dealing with an informant, a very mercenary individual with a hefty price tag on his information.”  Marsh concedes there are some drawbacks to what has become an increasingly sophisticated industry. “To do investigations now in the States, you have to have a graduate degree,” he says. “But many of these guys with excellent pedigrees have no clue how to do undercover work, which is sometimes hard and nasty. You have to handle thinking at your target’s level but not let it take over your life. There’s also a lot of bureaucracy and HR issues with the big firms. Today’s PI may look great in the boardroom, but they can’t tell if they’re being lied to. You need the right combination, and the right combination is hard to find.” Yet like every other private eye I’ve spoken with, he thinks the stereotype of the shady gumshoe puts a five o’clock shadow on business, particularly in cities such as Vancouver, which has few corporate headquarters. “The whole investigative industry in Vancouver is about 10 years behind Toronto and the U.S., where lawyers and corporations are very used to working with PI firms,” says Marsh, adding that the local industry was “virtually non-existent” a decade ago. “It has evolved, but the majority of people still see you as a gumshoe. They don’t want to bring you into their confidence. They arrogantly think you chase cheating spouses. But there are enough progressive law firms in town to keep us busy,” he says, noting that his revenues have climbed about 60 per cent since 2008. One key advantage for IPSA in Vancouver, according to Marsh, is that unlike its U.S. and Toronto markets, there isn’t a lot of competition here from big global players. IPSA’s most significant competitor on the local scene is Canpro Global. Canpro is B.C.’s largest private investigation firm with 200 full-time employees, 50 of whom are focused strictly on PI work. The firm’s clients include some of Canada’s largest companies in aerospace, telecom and energy, as well as many U.S.-based Fortune 500 companies. Its services range from corporate pre-employment screening to security and threat assessment for large multinationals to policy development and training for security firms operating in far-flung countries such as Afghanistan, Iraq and the United Arab Emirates. While the burgeoning field of private security has put Canpro on the world map, 30 to 40 per cent of the firm’s revenues (which in 2009 topped $12 million) are still generated by the approximately 500 investigative files it is working on at any given time.  “Today corporations and insurance companies spend millions of dollars on private investigations, and they expect expertise within a large firm of our size,” says Ken Cahoon, the company’s 42-year-old managing partner. Cahoon started out in the business 20 years ago, under the tutelage of his father, Herb Cahoon. Herb worked for the RCMP for 25 years, then ICBC’s special investigations unit for 15 years before joining with Fred Bodnaruk Investigations Group (FBIG) in 1988. In 2002 FBIG merged with another Burnaby-based firm, Canpro Pacific Services Inc., and the two entities rebranded in 2006 as Canpro Global. The company has steadily expanded its services and territories throughout Western Canada, buying other B.C.- and Alberta-based PI firms and security companies and growing revenues by an average of 35 per cent each year since 2003. “We’re dealing with the commodity of information, and in the year 2010 that is one of the biggest commodities,” says Cahoon. “It used to be timber, water, natural resources, but today it’s information. And as proprietors of that information, we have very rigorous operational procedures.” If Canpro’s walls could talk, they’d spin some wild tales, but Cahoon can only provide basic information about his clients. One oil and gas company, for example, was looking to find out whether staff charged with operating heavy and expensive machinery have drug problems or are involved in an organized crime ring that steals expensive equipment. One firm was worried about protesters attempting to sully its brand name. Another major corporation suspected its accountant had sticky fingers. “We worked on one case involving an accountant who expropriated a million in funds over a 16-year period. That’s not uncommon,” says Cahoon. “They generate false invoices, usually a trickle of funds over a long period of time. “We track people on Facebook and LinkedIn, find out what they’re saying about themselves online, looking at their vacation photos. We might follow the suspect after hours and notice they go to a poker night with guys that are making $250,000. Or follow the subject to the bank and discover that they have an offshore account.”  Throughout an investigation, Cahoon points out, it’s critical that all evidence is obtained and maintained fastidiously and does not overstep provincial and federal privacy laws: “If clients think you’re gun happy, they’ll rip you off the vendor list.” PI licensing and oversight falls under the jurisdiction of the B.C. Ministry of Public Safety and Solicitor General, which maintains B.C.’s Security Services Act. The act changed in 2008 to accommodate demand for seasonal security workers and to allow PIs to work for multiple firms, as the field has become more contract-driven. The number of PIs under supervision has nearly tripled since 2003, and, while the ministry contends that there have been no serious complaints lodged, PIs think it creates conflicts. “New private investigators need a boss with expertise to bring them in line and teach them what they can and cannot do,” says Cahoon. “About 50 per cent of the small ma-and-pa outfits work out of their basements and aren’t in business after five years. What happens if they take those sensitive documents and information to the dumpster? There’s a revolving door in our industry because former cops or retired cops dabble in the business. You call them up and it’s ‘Billy Joe Ray Bob’s Barbecue Shop, Private Investigations and Fishing Tackle.’ They might have a 25-year career handing out traffic tickets. A barber does not make a good hairdresser.” Filer agrees that many cops lack the wherewithal for private sector work. “As a PI, you don’t have the luxury of teamwork, resources, access to police databases; you can’t pack a gun,” he acknowledges. “You have to be creative, work relatively unsupervised, make decisions on the fly and market your services and find clients to pay the bills.”  <div style="margin: 10px; padding: 10px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;" times="" new="" roman=""><img width="259" height="186" alt="" src="/files/image/BCBusiness/2010/private-investigators-3-5.jpg" /></div> With regard to his own team at Lions Gate, Filer says that quality control is paramount, especially in a field where $15-an-hour newbies share files with $100-an-hour veterans. Filer notes that while his field operative, Jag Gill, may have started out at age 19 in the private sector doing surveillance, he has been mentored by top PIs over the past 15 years and has worked hard to develop expertise. “Whether our investigators have major crime backgrounds or have honed their skills in other ways, I’m very selective and I choose them based on their ethics and talent,” he says. 4:02 p.m. It’s time for Filer and Gill to punch out. The target hasn’t reappeared, but they’ll be back tomorrow. “This work doesn’t match up to the excitement of working as a police investigator,” admits Filer as drives me back downtown. “But the RCMP has become famous for bureaucracy. More and more, the organization – middle and senior management – has become about appearing to do the right thing. It’s no longer about street-level policing and solving crimes; it’s about playing it safe.” While Filer is proud to have recently received an RCMP Commissioners commendation for leading the RCMP team that rescued an abducted 11-year-old Armstrong girl named Carmen Kados in 2006 and put her captor Paul Robert LePage behind bars, today’s assignment – like the majority of cases in which the prime directive is invisibility – won’t win him any medals of honour. No wonder private eyes often come hard-boiled. “You get thick skin. It’s all part of the package,” says Filer. “But with PI work, there’s a different level of personal satisfaction. There can be tremendous trauma and suffering with these economic crimes. People lose their homes, their businesses. We give them somewhere to turn for help. And my wife says I’m happier now. Easier to live with.” 14197 at http://www.bcbusinessonline.ca Vietnam's MGM Grand Ho Tram Resort http://www.bcbusinessonline.ca/bcb/business-sense/2010/07/07/vietnam039s-mgm-grand-ho-tram-resort The tangled web of intrigue around one Vietnam Resort and Casino. http://www.bcbusinessonline.ca/bcb/business-sense/2010/07/07/vietnam039s-mgm-grand-ho-tram-resort#comments Business Sense Asian Coast Development David Jordan Ho Tram Resort Hospitality July 2010 MGM Mirage Global Gaming Development vietnam resort Wed, 07 Jul 2010 13:00:17 -0700 David Jordan <h2 class="bcb-article-deck">What do Wall Street money men, an ex-MGM hotshot, a former prime minister and an upstart Vancouver developer have in common? A multibillion-dollar Vietnamese resort, of course.</h2> <author></author>Laid-back Vancouverites aren’t known for talking a big game, so when a news report put Vancouver at the centre of a plan involving a New York hedge fund, a Las Vegas executive, former prime minister Jean Chrétien and a $4.2-billion resort development in Vietnam, one can be forgiven for giving one’s head a shake. But sure enough, Vancouver’s Asian Coast Development Ltd. issued a press release in April this year announcing it had hired Lloyd Nathan, former president of MGM Mirage Global Gaming Development, to take its Vietnam mega-resort development to the next level. Asian Coast secured permission from Vietnam in March 2008 to build that country’s first mega-casino, and New York hedge fund Harbinger Capital Partners LP bought in early, taking an ownership stake in Asian Coast for an undisclosed sum. Former prime minister Chrétien – who these days hangs his shingle at law firm Heenan Blaikie LLP as an “international adviser” – was hired to help grease the wheels; he met with Vietnam’s Premier Nguyen Tan Dung on Asian Coast’s behalf first in May 2008 and again in April this year. The ambitious plan calls for a mega-resort 130 kilometres south of Ho Chi Minh City, on an undeveloped beachfront once frequented by U.S. soldiers seeking R&R during the Vietnam War. (Sweeping for mines was the first order of business, according to Asian Coast founder Michael Aymong.) Plans call for the Ho Tram resort to be built in five stages, the first two of which will involve a 1,100-room hotel and casino to be managed by MGM Mirage. Stage 1, budgeted at $400 million and including 550 rooms, is scheduled to open in 2013. The picture painted by the press release of a “world-class” resort featuring “chef-driven restaurants” and an “exclusive VIP area” is certainly impressive, but a number of questions come to mind, not the least of which is, What does this have to do with Vancouver? The answer lies in the person of Michael Aymong, the man who claims to have dreamed up the plan while travelling in Vietnam sometime around 2006. It was then that he happened upon the “unspoilt beachfront waiting to be taken to greater heights,” as he would relate to the National Post two years later. (Aymong declined to be interviewed for this story.) With partner David Subotic, a former vice-president at Haywood Securities Inc. who specializes in financing mineral exploration ventures, Aymong formed Asian Coast Development in 2006. Today the company shares office space with five investment firms in the Park Place office tower in downtown Vancouver. Originally from Toronto, and with an MBA from the University of Western Ontario, Aymong’s Vancouver connection dates back to April 2001, when he was named CEO of Starnet Communications International Inc., a Vancouver company that started out as a “provider of online adult entertainment,” according to its securities filings, and morphed into online gambling. The RCMP raided the Vancouver offices of Starnet in 1999, and Aymong steered the company through a guilty plea to one count of illegal gambling and a subsequent renaming and relocation to London, England.  For two years prior to taking the helm at Starnet, Aymong had been vice-president of sales and marketing of GT Group Telecom, a provider of fibre-optic networks for Canadian businesses. The company reported steadily mounting losses during Aymong’s tenure – $137.9 million in 2000 and $209.1 million in 2001 – before finally applying for creditor protection in 2002, with debts totalling $1.6 billion. (In a case of the weak eating the weaker, it would finally be snapped up in 2003 for $250 million by 360networks Corp. – itself emerging from creditor protection.) Aymong was replaced as chair of Asian Coast in April this year, although he remains a shareholder and an adviser. If Aymong explains how this international development scheme happens to be based in Vancouver, the next mystery is how MGM and Lloyd Nathan came into the picture. MGM Mirage signed on as a partner with Asian Coast in November 2008, agreeing to operate the planned Vietnam hotel and casino under the MGM Grand banner. Within a month, MGM had named Nathan president of its newly formed MGM Global Gaming division, with a mandate of expanding global operations. Nathan moved to Las Vegas from Hong Kong, where he had been managing director of MGM Mirage International. Asia is a focal point of MGM’s global expansion strategy, centred on the MGM Macau, a 50-50 joint venture with Pansy Ho, daughter of Macau gambling kingpin Stanley Ho. That venture gave MGM a foothold in the explosive Asian gambling market. The Macau joint venture also forced MGM to make a difficult decision in March this year. After a four-year investigation into MGM’s Macau partnership, New Jersey’s Division of Gaming Enforcement determined Pansy Ho, nominally MGM’s joint-venture partner in Macau, to be “an unsuitable person . . . based on her dependence upon her father and her association with individuals connected to organized crime.” The commission concluded that it would not allow a company with any ties to Pansy Ho or to her father to operate a casino in its jurisdiction. For MGM it came down to a choice between New Jersey or retaining its partnership with Ho in Macau – a partnership it had pursued after losing out to Las Vegas competitors Wynn Resorts Ltd. and Las Vegas Sands Corp. in its initial proposal to build a casino in Macau when China opened its doors to foreign casino operators in 2002. There was no contest: Macau is the fastest-growing gambling centre in the world, having eclipsed Las Vegas in gambling revenue in 2006. In New Jersey’s Atlantic City, on the other hand, gambling revenue fell 25 per cent between 2006 and 2009. In May of this year, MGM announced it would sell its 50 per cent stake in the Borgata Hotel Casino & Spa in Atlantic City in order to retain its foothold in Macau. That same month, Nathan decided he’d rather focus exclusively on Asia, leaving MGM in order to take charge of Vancouver’s Asian Coast Development and its Ho Tram project in Vietnam. The company has no association with Stanley Ho, Nathan says, although he declined to comment on whether anyone in Ho’s family is involved in the MGM Grand Ho Tram. (Nathan was unavailable for an interview for this story, although his publicist provided Nathan’s responses to submitted questions via email.) By coincidence, Pansy Ho, who holds a Canadian passport, had applied in 1996 to open a casino in Vancouver. At the time, her father had just finished building a $3.1-million private residence at the entrance to Stanley Park, and he had bought Vancouver’s Sutton Place Hotel three years earlier. Pansy Ho withdrew the casino application before a decision was rendered. The details of the application, and of any attendant Gaming Policy and Enforcement Branch background checks, remain confidential because B.C., unlike New Jersey, does not make details of gaming-licence applications available to the public. Almost forgotten in this web of intrigue is perhaps the most important question of all: where’s the money? Nathan remains tight-lipped as to how much capital Asian Coast has raised, saying only that the first phase – the $400-million, 550-room MGM Grand Ho Tram – is on track to open in early 2013. Citing “various securities regulations,” he would not specify how much of the estimated $4.2-billion cost of the entire project the company has raised, saying only that the support of Harbinger Capital, and his own appointment as CEO, “have created an appropriate platform to get our company to where we need to go.” 14192 at http://www.bcbusinessonline.ca Vancouver Interior Designers in Demand http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/vancouver-interior-designers-demand Vancouver's daring interior designers are winning worldwide fame. http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/vancouver-interior-designers-demand#comments Top Stories design Hospitality industry interior design interior designer lucy hyslop style Vancouver designers Wed, 07 Jul 2010 12:42:52 -0700 Lucy Hyslop <h2 class="bcb-article-deck">With its growing popular appeal, interior design has become something that anyone and everyone thinks they can now do, at home or in the office. But take it from Vancouver’s pros: getting it right requires more than just “paint and pillows.”</h2> In the current zeitgeist, interior designers are the new rock stars. They have colour-swatched, clean-lined and pillow-fluffed their way through endless hours of home-decor television shows and achingly chic magazine front covers, even during the recession. Design-renowned Miami has the likes of Barbara Hulanicki, who created the former Biba fashion empire in the ’60s; London’s darling is Anouska Hempel; and in New York it’s Thom Filicia and Julian Schnabel. In B.C. Kelly Deck, Kari Henshaw and Robert Ledingham are household names and part of a local industry that saw its ranks grow from 572 to 793 firms between 2006 and 2008, with revenues rising by almost 22 per cent over the same period. <div class="image-header" id="bcb-article-sidebar"> <div class="header-image"><img width="98" height="12" alt="BCB Sidebar - Online Only" src="/files/u102/category_online-only.gif" /></div> <ul> <li>Photos: <a href="http://www.bcbusinessonline.ca/node/13633">Sleek Commercial Interior Design</a></li> <li>More: <a href="http://www.bcbusinessonline.ca/node/10642">Vancouver Residential Interior Design Candy</a></li> </ul> </div> Perhaps no firm exemplifies the burgeoning role of Vancouver designers on the international stage better than SmartDesign Group. The outfit was co-founded by London native Nick Baker in 2000 when his U.K.-based Baker’s Design Group merged with Vancouver’s Sunderland Innerspace Design Inc. (The latter was established by 35-year design veteran Jon Sunderland, who remained a partner with Baker until his retirement this January.) Baker expects SmartDesign’s revenue to grow between 30 and 40 per cent over the next two years as it works on projects around the world, including its specialty of airports (Doha, London Gatwick, LAX, JFK) as well as Lansdowne Road stadium in Dublin, Ireland, and England’s Brighton Arena. Like many British expats, Baker was lured by the quality of life in B.C. as compared to London. (“Far too many miserable faces and cars on the streets in London,” says the father of four daughters, aged 10 to 17. “And it’s so grey – even when it’s dull here at least you get green.”) Even if barely five per cent of his work is B.C.-based (Whole Foods Market, YVR and Everything Wine are major clients), Baker believes the region helps fuel both the company’s creativity and the sustainability card it often plays.  <div roman="" new="" times="" style="margin: 10px; padding: 10px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="186" src="/files/image/BCBusiness/2010/Vancouver-Interior-Design-3-1.jpg" alt="" /> SmartDesign – Everything Wine, North Vancouver.</div> “When you’re exposed to such a calming environment, that really becomes an edge and it translates into a lot of our work,” says the 46-year-old president and CEO. “It’s a very positive, spiritual part, and we are a very tactile company. Our sustainability comes from here because we see it with regards to the land and the sea, whereas the office in London is at Tower Bridge, which is very concrete and so much harder.” While the data are not available yet, the global recession has undoubtedly forced a makeover of some parts of the profession. SmartDesign, for instance, recently decided to outsource some of the technical requirements (such as construction documents and 3D rendering) as part of a refocused business model. On the residential side, anecdotal evidence throughout the industry suggests that the initial slowing of condominium construction took a bite out of many firms’ bottom lines. On the flip side, however, lower construction costs prompted some homeowners to start major renovations, helping numerous designers to win commissions. Several smaller B.C. outfits revealed that they lost staff during the downturn. Some have joined forces with architects and engineers to form “hybrid” offices, while others face the prospect of being absorbed by one of the larger multi-disciplined organizations with outposts here, such as Kasian Architecture Interior Design and Planning Ltd. and Stantec Inc., both headquartered in Edmonton, or Cannon Design from Buffalo, New York. Whether small or large, the province’s interior design firms are acutely aware of markets beyond our borders, particularly the emerging markets in Asia, which are perceived as both a boon and a challenge. While there are frequent invitations for local firms to outsource services at a cheaper rate to Mumbai, for example, B.C.’s creative talent is also widely admired abroad. “Vancouver has a good reputation over in China and Asia for interior design. There are even sites named after Vancouver and other references to the Canadian West Coast,” says Jim Toy, a 49-year-old Manitoba native and former president of the Interior Designers Institute of B.C. (IDIBC) and principal and founder of Vancouver’s False Creek Design Group Ltd. (notable projects include the Vancouver International Film Centre and Vancity Theatre). However, with experience working on five projects in China over the past decade, Toy concludes, “There is a limited window in China for B.C. firms because [the Chinese] are one of the greatest assimilators in the world. Every time we go over there, the pace of development and the improvements in their knowledge base is frightening.”  <div roman="" new="" times="" style="margin: 10px; padding: 10px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="186" src="/files/image/BCBusiness/2010/False-Creek-Design-3.jpg" alt="" /> Jim Toy, principal and founder, False Creek Design.</div> All of these worldwide challenges to interior designers have heightened the need to professionalize the industry. That’s why the IDIBC is proposing a merger with the Architectural Institute of B.C. (AIBC), and why it’s currently lobbying the provincial government for legislation to grant it legal status as a self-governing profession with the authority to oversee accreditation. If the 200-member-strong IDIBC succeeds with its plan, B.C. would follow Nova Scotia to become the second province in Canada to enact legislation and grant interior designers such authority. Just as the title “registered massage therapist” can only be used by those approved by the College of Massage Therapists of B.C., so “interior designer” would be restricted to those approved by the IDIBC. (A spokesperson for B.C.’s Ministry of Advanced Education and Labour Market Development, Corinna Filion, confirms the discussions with interior designers, although she adds that there are no immediate plans to introduce legislation.) While the proliferation of media attention has brought increased consumer awareness, especially on the residential side of interior design, Toy thinks it has also resulted in a “skewed perception” of the industry. “Much of what we do really involves much more than ‘paint and pillows,’” says Toy from his Homer Street offices where he works with a staff of 12. “As projects grow in size and complexities, so does the demand for properly educated and trained interior design professionals who can address these issues and offer expertise.” Sure, it’s all entertainment, but the magical transformation of a space as depicted on television without collaboration with the client is not accurate and does not serve the industry well, explains Carol Jones, a principal at Kasian’s Vancouver office and past president of both the Chicago-based International Interior Design Association and the Interior Designers of Canada. “It does a disservice to the actual design process and creates a deception that design can be effectively accomplished in the blink of an eye and with almost no money,” she says. As it stands, anyone in B.C. can set up as an interior designer without recognized qualifications, creating confusion in the general public as to the differences between designers and decorators. “Between a designer and decorator, the former also has to have an understanding of structure and building technology as well as professional ethics to be mindful of,” says Toy. A designer must know the material requirements for fire-rated wall construction, say, or the allowable widths for stairs, handrails and doors, while the decorator’s main focus is on esthetics. According to Toy, hiring the wrong person can leave a client open to liability and has often led to False Creek Design being called in to rectify poor jobs. He cites a recent case involving decorative panelling in a public area that did not meet fire code and custom furniture that was too large to fit in the elevator: “In short, a costly remedial exercise for the client, who had previously engaged a drafting service with an ‘in-house designer’ on staff.”  <div roman="" new="" times="" style="margin: 10px; padding: 10px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="298" src="/files/image/BCBusiness/2010/Carol-Jones-3.jpg" alt="" /> Carol Jones, principal, Kasian, Vancouver.</div> Adds Toy, “The recession has accelerated the need to answer the big question: How can we establish – and maintain – our worth?” The lack of regulation in B.C. explains in part the wide range in consultancy fees across the industry. The cost of an interior design commission can range from $80 to $250 an hour, depending on seniority. For corporate office design, fees are often calculated on a square-foot basis, depending on the size and complexity of a project. On average, it costs around $4 to $5 per square foot for 3,000 to 5,000 square feet of generic office design, with clients paying more for more specialized projects, such as a research lab or broadcast facility. Maintaining a competitive edge – without undermining the value of an interior designer – is the biggest concern among designers trying to quote a winning price. “Just as restaurants will charge less for a meal to get you in the door, so I have heard of commercial firms charging far less for their design services,” says Robert Ledingham, a 40-year veteran of Vancouver’s design scene. His 13-person Ledingham Design Consultants, which works in both residential (Intracorp’s Stirling House at UBC) and hospitality (Whistler’s Westin Hotel), may have been relatively unscathed by the worldwide recession, but he is fired up by the current undercutting. “Reducing the cost,” he explains, “does not help to keep up the standards of the value of an interior designer.” Carol Jones, who has spent a similar amount of time in the industry, mainly designing corporate offices, insists that that value is similar to any other consulting business: it’s ultimately about what you know, not what you do. “The challenge for designers has been to establish and promote the value proposition for design,” she says. “Design is not a commodity. It’s not ‘give us the money and here’s your new house.’ The real value is in the consultative process with the client and the knowledge and education that interior designers have which affect the environment.” So anything, such as a legislated practice act, that helps to further legitimize the profession is “helpful.” Putting an actual dollar figure on an interior designer’s worth is often easier in the commercial sector – a stage rarely under the klieg lights of reality television or popular magazines – than it is in residential design.  <div roman="" new="" times="" style="margin: 10px; padding: 10px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="186" src="/files/image/BCBusiness/2010/Todd-Towers-3.jpg" alt="" /> Todd Towers, president, Farmboy Fine Arts.</div> Take SmartDesign’s retail project at Seoul Incheon International Airport in South Korea. The firm’s redesign of Incheon’s duty-free space involved the interior designers re-examining their client’s retail business plan, according to Nick Baker, with the aim of finding ways to boost profits. “We redeveloped hundreds of thousands of square feet on a retail model and strategy that was all about merchandising and knowing how passengers shop,” he tells me in early April, shortly after returning from an industry conference in Brussels where he spoke to 3,500 attendees on enhancing the passenger experience and building brand equity at airports, using Incheon as an example. “Within two years of us implementing this new program, [the Incheon airport] went from generating a billion dollars in duty-free sales to $1.4 billion – a 40 per cent increase. We’re incredibly commercial and understand why our clients want to make money. Many designers cost clients money; we actually generate income for them.” In the hospitality trade, however, the figures are less concrete, according to Todd Towers, president of Gastown’s Farmboy Fine Arts Inc. Farmboy is a major player on the fine art-decor supplies side of the interior design world, with an exhaustive client list that includes hotel chains such as the Wynn (Las Vegas), Sheraton (from Atlanta and Boston to Virginia and Wisconsin) and W (from Korea to the Maldives to Mexico and across the U.S.). The firm has also just outfitted more than 2,000 rooms throughout seven hotels built and financed by the developers Aldar Properties PJSC on Yas Island, Abu Dhabi. In ballpark figures, one or two custom pieces by Farmboy for a lobby or restaurant command a four- to five-figure price tag; a full consulting package, with manufacturing services of the artwork included, can run upward of seven figures. The 37-year-old Towers, originally from Alberta, admits that it’s difficult to gauge the success of a designed environment based on emotional response: “It’s hard for a CEO to write a cheque for 10 million dollars just because someone says, ‘This feels good.’” However, the environment – the art, the lighting, the sound – is clearly designed to encourage people to stay in a particular hotel. “So it’s all consumed,” Tower explains, “and even though the numbers are squishy, they know it all contributes to the bottom line to a certain degree.”  <div roman="" new="" times="" style="margin: 10px; padding: 10px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;"><img width="259" height="253" src="/files/image/BCBusiness/2010/Vancouver-Film-Centre-3.jpg" alt="" /> The International Vancouver Film Centre designed by False Creek Design.</div> Carol Jones sees interior design as continuing to be a growth industry, primarily because of its ability to affect human experience. “There is a growing consciousness of the importance of ‘experience’ in architecture and design – the experience of students, patients, shoppers, office workers, passengers,” she notes. “Interior designers are well positioned, through education and expertise, to optimize these experiences.” Vancouver-based Mitchell Freedland, named designer of the year by Western Living magazine in 2009, is equally optimistic. Compare design firms in Vancouver, he suggests, to similar-sized ones in, say, Cleveland or Pittsburgh, and there’s no buzz about those cities from a design perspective. “Yet there is about Vancouver because we have the whole mix: the architects, the urban planners, the interior designers,” says the 47-year-old founder of Mitchell Freedland Design. Freedland leads a 13-person office near Vancouver’s Olympic Village and has worked in Japan, Europe, Chicago, L.A. and Miami, where the Ontario native has been focusing on private residential work for the past four years. “We’re supposed to be just an outdoorsy, sporty town, but somehow we seem to really get architecture and urban planning, and it trickles in to a good reputation for interior design,” he says. Not that there are necessarily enough good people to be found in “small town” Vancouver, according to Nick Baker. SmartDesign is constantly looking for staff – it currently employs 25 in Vancouver, 20 in London, 18 in Los Angeles and two in Hong Kong – and Baker says he regularly has to recruit globally to fill positions for Vancouver-area projects. He even jokes that he shares staff “half of the time” with Stantec, the firm Baker considers his closest competition. Among all these challenges – and the ongoing IDIBC campaign for a practice act – the opportunities, especially the global ones, appear to be on the rise for B.C.’s interior design industry. International corporations are increasingly tapping into their softer sides via the expertise and flair of B.C. firms, while residential folk worldwide are liaising with this province’s designers to create the best living spaces. The next challenge? To raise the level of design and take more risks, says Baker. “Generally, people are far too careful here,” he says of his adopted home. “There are some great designers in this city, but I wish the clients trusted them a lot more and opened their eyes.” 14196 at http://www.bcbusinessonline.ca B.C.'s Rising Real Estate Stars http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/bc039s-rising-real-estate-stars B.C. celebs putting savings and reputations on the line in risky real estate. http://www.bcbusinessonline.ca/bcb/top-stories/2010/07/07/bc039s-rising-real-estate-stars#comments Top Stories British Columbia golf resorts British Columbia real estate golf resorts hockey jim sutherland land development NHL real estate sports Vancouver golf resorts Wed, 07 Jul 2010 12:42:43 -0700 Jim Sutherland <h2 class="bcb-article-deck">Only in B.C. would a past Playboy model, a former teen heartthrob and scads and scads of ex-NHLers try for a second career in real estate development. As many of them are finding out, it's not as easy as it looks.</h2> As March turned to April, events within Vancouver Island’s land development industry unfolded with quotidian predictability. In Langford ex-NHLer Len Barrie’s Bear Mountain Resort received creditor protection. In Ladysmith a proposed condominium development by former pro Geoff Courtnall and film and TV star Pamela Anderson was put on indefinite hold. In Victoria there was brighter news as a mixed-use development involving former Canuck star Trevor Linden broke ground. And hey! Up in Nanaimo a basement was dug that involved no sport or entertainment celebrity whatsoever. <div class="image-header" id="bcb-article-sidebar"> <div class="header-image"><img width="98" height="12" alt="BCB Sidebar - Online Only" src="/files/u102/category_online-only.gif" /> Slideshow: <a href="/node/13928">When the Spotlight Dims, B.C. Celebrities Get into Real Estate </a></div> </div> Indeed, all over B.C. that’s the kind of year it’s been: some good news, some bad news – but, good or bad, as much star power showing up in the business pages as in sports and entertainment. Let other actors and athletes go into rehab. Ours are more likely to be building the rehab centre, as long as the public-spirited act helps them get the rezoning they need to add 20 more units to the condo tower behind the 14th green. But why? In most other jurisdictions, aging actors and ex-jocks are pitching diets or selling cars, not risking their savings and reputations to remake cities or turn placid mountaintops into suburban dreams. Is it because B.C. is somehow different? Or are the actors and athletes somehow different? Is it because they relish the challenge and rise to it? Or because, with their money and reputations, they are given the chances that others are denied? To find out, we employed a simple methodology: we asked them. Their responses follow, but first a quick look at the astonishing array of development projects our celebrities have got themselves into.  <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 150px; float: left;"><img width="150" height="152" src="/files/image/BCBusiness/2010/Len-Barrie-3(1).jpg" alt="" /></div> <h3>Len barrie: bear mountain</h3> The tack-ready poster project for B.C.’s all-star NHL developer team is Len Barrie’s Bear Mountain Resort, just north of Victoria. It’s a story with more reversals and comebacks than Rocky, even if the ending lacks the same triumphal resolution: Late-round draft pick (Edmonton Oilers, 1988) parlays grit and puck smarts into up-and-down pro career, then retires to a bucolic course-side life in Victoria. The idyll ends abruptly after he cuts down trees on the neighbouring golf club’s property and is banished from the grounds for eternity. One day, riding a bike instead of a golf cart, he is struck by the revelation that the hills he is rolling through would make a great spot for a golf course. Giving 110 per cent to overcome numerous obstacles, crashing and banging through many objections and objectors, he secures the land and necessary permits, recruits 17 investors (including almost a dozen current and former NHLers) and in 2003 launches into one of the most audacious land developments Vancouver Island has ever known, complete with two golf courses and a planned 3,500 residential units. For several years, all goes well – too well. Then like a high-flying rookie oblivious to an impending sophomore slump, the former centre buys the Tampa Bay Lightning in partnership with a Hollywood producer whom he would shortly stop speaking to. That subplot ends with Barrie stripped of the team. Meanwhile, ambitions for Bear Mountain spiral ever higher until it too receives a devastating head shot in the form of the 2008 financial crisis. Yet all is far from lost. Bouncing back from adversity, shaking off post-concussion syndrome, the development enjoys excellent sales in 2009. Yet it still needs help – assistance that is eventually found in the form of a promised cash infusion from a group in Dubai. But mere weeks after the money is found, Dubai proves to have critical cash-flow problems of its own, and the funds evaporate, ultimately leading to courtroom drama. In late March, the partnership is placed under Canada Creditor Arrangement Act protection, and Barrie is ousted as CEO. <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 150px; float: left;"><img width="150" height="180" src="/files/image/BCBusiness/2010/Joel-Savage-3jpg.jpg" alt="" /></div> <h3> Joel Savage: Wildstone</h3> Barrie’s is a compelling story, one that has been told many times. Not nearly as well known is the uncannily similar situation that unfolded in Cranbrook, where Joel Savage, Barrie’s one-time Western Hockey League Victoria Cougars teammate, set about building Bear Mountain’s equally ambitious East Kootenays doppelgänger, Wildstone. Although a first-round draft choice (Buffalo Sabres, 1988), Savage enjoyed even less NHL success than Barrie, playing only three games with the Buffalo Sabres before finishing his career in Europe. But the plans he and his partners in Havaday Developments laid out in 2006 were major league all the way. Like Bear Mountain, Wildstone was to have two golf courses, designed by Gary Player instead of Jack Nicklaus, while peppered across its 360 hectares would be no fewer than 3,000 residences – an extraordinarily ambitious goal given metro Cranbrook’s population of about 25,000. With little of the local opposition that plagued Barrie, Savage and company could do their crashing and banging in the marketplace and initially enjoyed respectable success in doing so. But by November 2008, after the financial crisis hit, bills were no longer being paid and work on the development had ceased. Havaday sold portions of the project in an attempt to remain in operation, but the gambit proved insufficient and the company ended up in receivership. In late 2009, a good chunk of what remained was purchased by Calgary-based Coast to Coast Developments, which hopes to open the first golf course, originally slated for 2008, in 2011.  <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 150px; float: left;"><img width="150" height="184" src="/files/image/BCBusiness/2010/Byron-Dafoe-3.jpg" alt="" /></div> <h3>Byron Dafoe: Trepanier Manor</h3> In the Okanagan, the player-developer mantle belongs to Byron Dafoe, the goaltender who spent 12 years in the NHL with a variety of teams, retiring in 2004. That same year, he purchased 40 hectares of waterfront property north of Naramata, which he has subsequently subdivided as Eagle Mountain Estates. Dafoe also has interests in developments in Mexico, but his highest-profile project locally is Trepanier Manor in Peachland. The project is to include a five-star hotel along with 20 deluxe homes on a 10-hectare property adjacent to Ponderosa, the vintage golf course currently being redeveloped to a Greg Norman design. Dafoe says half the homes have been pre-sold, and construction on the homes and hotel could begin this fall. <h3> <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 150px; float: left;"><img width="150" height="158" src="/files/image/BCBusiness/2010/Trevor-Linden-3.jpg" alt="" /></div> </h3> <h3>Trevor Linden: West</h3> While Barrie, Savage and Dafoe grew up in B.C., none played for the Canucks, a career deficiency that is definitely not shared by Trevor Linden. Even before his retirement in 2008, Linden was partnering on development projects, often with his brother, contractor Jamie Linden, and architect Howard Airey. Trevor Linden and Airey have collaborated on luxury residences on Vancouver’s West Side, a mixed-use residential-commercial complex called West in the Point Grey neighbourhood and, most recently, 601 Herald, a residential-commercial project in downtown Victoria. <div roman="" new="" times="" style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 150px; float: left;"><img width="150" height="191" src="/files/image/BCBusiness/2010/Geoff-Courtnall-3.jpg" alt="" /></div> <h3>Geoff Courtnall: Arcadia</h3> Finally, there is Geoff Courtnall, a Victoria boy and yet another Cougars alumnus, who scored 367 goals in 19 NHL seasons, including five with the exciting early-’90s Canucks. Courtnall’s first foray into large-scale development failed to find the back of the net, however – at least as far as many residents of Egmont on the Sunshine Coast were concerned. In 2002 he and partners purchased 2,400 hectares on a mountainside above the village and announced plans for a golf course and resort subdivision. When the partners ran into difficulties obtaining the necessary permits, they sold the property to a related company, which subsequently logged much of the mountain, causing considerable local clamour. In the years since, Courtnall has purchased and, in some cases, redeveloped several real estate holdings on Vancouver Island and in California, but all were low-key until the Ladysmith project came on. Courtnall and his partner on the project, Ladysmith native Pamela Anderson, have been acquaintances for several years, and he describes Arcadia at Oyster Bay as her attempt to do something she can be proud of on a property formerly owned by her grandparents. Courtnall and Victoria-based Wessex Management obtained rezoning, and the sustainability-oriented 83-unit condomium-townhouse project was ready to proceed until Anderson got cold feet, he says. “I think the market is strong enough, but she wants to wait a little and see how things are going.” The two may be able to relaunch the project in the next year or so, he hopes. If Anderson is able to get the project back on track, she will become something of a rarity: a B.C.-born or -based entertainment figure also involved in land development. IMAX film director Jon Long (Extreme) was the founding co-partner behind Kootenay Lake Estates, another development with sustainability ambitions, near Nelson, but the list of actors and musicians involved in the business is otherwise short, though some, such as actor Jason Priestley, have bought into vineyards and wineries. “Pro sports guys seem to congregate in recreational property development, which could be because they themselves like to golf and ski,” jokes an industry insider. “Celebrities appear to favour vineyard investments – possibly because of their dependencies.”  Jocks do seem to have an affinity for recreational development. Courtnall claims no particular love of golf personally but says a lot of ex-pros are severely smitten. And the list of athletes drawn to golf and skiing is not restricted to hockey players. There is the husband and wife skier team of Nancy Greene and Al Raine, who were major developers at Whistler before moving in the early 1990s to help launch the transformation of Todd Mountain into Sun Peaks with their Cahilty Lodge. Former Canadian ski team member and Olympian Reto Barrington is behind Fernie’s Blackstone, another golf course development that is behind schedule due to soft market conditions. Meanwhile, ex-Tour player Richard Zokol developed Merritt-area Sagebrush Golf and Sporting Club, which will ultimately incorporate a residential component to go with a golf course already rated as one of the country’s best. <h3>But why do they do it?</h3> Zokol spent seven years building Sagebrush, starting in 2003, his last year playing on the Tour. He believes there are a lot of parallels between the sporting life and the developing one. The most important advantage enjoyed by athletes is the character that led to their success in sport, he believes. “It’s not about vision; it’s about belief. If you believe you can, you will. If you believe you can’t, you won’t. And belief is fuelled by never-ending pursuit of the goal.” Architect Howard Airey, who works with Linden, sees another possible confluence between pro sports and the development industry: “the combination of being a team player while recognizing the role of leadership.” The money and reputation that an ex-athlete typically bring to the table are secondary, in Zokol’s opinion. As a journeyman playing in the pre-Tiger era, he didn’t get rich, with less than $2 million in earnings over two decades. “You do have some leverage; you can open doors,” he says. “But you’ve earned that.” In Canada pro hockey players do have advantages, including money to invest, but also carry some baggage. Byron Dafoe calls it a catch-22. “Yes, there is some recognition. But at the same time, people say ‘Here’s a dumb hockey player. What does he know?’” Dafoe, Courtnall and Linden all cite the peripatetic existence of NHLers as a factor that pushed them toward land development. “I lived in seven or eight different cities,” says Dafoe, who became interested in architecture and design as a result. Linden has developed an intense fascination with the design process and promises upcoming projects that will strike many as rather outré. “I like the creative part,” he says. Courtnall says he’s always loved to build things but also has an unusual affection for another highly creative aspect of the business: the process of gaining approvals. Perhaps strangely, the phenomenon of the jock developer appears to be largely restricted to B.C. Lots of pro golfers become designers, says Zokol, but only a few of the very biggest stars develop their own courses, as he did. Elsewhere in Canada and the U.S., there are scattered incidents of pro athletes with contracting companies and the like but very few doing the sophisticated developments that seem almost commonplace here. Maybe it’s the athletes, but probably it has more to do with B.C. and the attributes that have made it a playground for developers. Weight loss isn’t a provincial fixation, and there’s a limit to how many cars can be sold – but building homes for Asians and Albertans, that’s something with enduring potential. Byron Dafoe, goalie turned developer, is not making an ironic commentary about a licence plate slogan when he says the province is “the best place on earth.” <h3> </h3>  <h3>The Starting Lineup</h3> Imagine you’re the general manager of an NHL team in the mid to late ’90s and your roster looks like this. True, you’re desperately short on defence, but you do have two top goalies to trade, and there has to be a couple of kids you can bring up from the minors. Good thing the salary cap hasn’t been invented, because otherwise you’d never be able to sign all these top draft choices who, unbeknownst to you or them, will someday end up spending a good chunk of the money you’re paying them on B.C. land developments. – J.S. <h3>Forwards</h3> <h3>Len Barrie </h3> Founding principal, Bear Mountain Resort Selected Round 6, 124th overall by Edmonton Oilers, 1988 <h3>Joel Savage</h3> Founding Principal, Wildstone Resort Selected Round 1, 13th overall by Buffalo Sabres, 1988 <h3>Trevor Linden </h3> Co-developer, 601 Herald and other projects Selected Round 1, second overall by Vancouver Canucks, 1988 <h3>Geoff Courtnall</h3> Partner, Arcadia at Oyster Bay and other developments Signed as undrafted free agent by Boston Bruins, 1983 <h3>Gary Roberts</h3> Investor, Bear Mountain Resort Selected Round 1, 12th overall by Calgary Flames, 1984 <h3>Joe Nieuwendyk</h3> Investor, Bear Mountain Resort Selected Round 2, 27th overall by Calgary Flames, 1985 <h3>Ray Whitney</h3> Investor, Bear Mountain Resort Selected Round 2, 23rd overall by San Jose Sharks, 1991 <h3>Ryan Smyth</h3> Investor, Bear Mountain Resort Selected Round 1, sixth overall by Edmonton Oilers, 1994 <h3>Rob Niedermayer</h3> Investor, Bear Mountain Resort Selected Round 1, fifth overall by Florida Panthers, 1993 <h3>Scott Mellanby</h3> Investor, Bear Mountain Resort Selected Round 2, 27th overall by Philadelphia Flyers, 1984 <h3>Defence</h3> <h3>Rob Blake</h3> Investor, Bear Mountain Resort Selected Round 4, 70th overall by Los Angeles Kings, 1988 <h3>Goal</h3> <h3>Byron Dafoe</h3> Principal, Trepanier Manor and other developments Selected Round 2, 35th overall by Washington Capitals, 1989 <h3>Trevor Kidd</h3> Investor, Bear Mountain Resort Selected Round 1, 11th overall by Calgary Flames, 1990 <h3>Mike Vernon</h3> Investor, Bear Mountain Resort Selected Round 3, 56th overall by Calgary Flames, 1981 <h3>Sean Burke</h3> Investor, Bear Mountain Resort Selected Round 2, 24th overall by New Jersey Devils, 1985 14195 at http://www.bcbusinessonline.ca More Cuts in B.C. Arts Funding http://www.bcbusinessonline.ca/bcb/business-sense/2010/07/07/more-cuts-bc-arts-funding Arts in B.C. have turned into a game of survival of the fittest. http://www.bcbusinessonline.ca/bcb/business-sense/2010/07/07/more-cuts-bc-arts-funding#comments Business Sense Art on the Edge B.C. arts B.C. arts funding cuts Jackie Wong July 2010 Ministry of Tourism Culture and the Arts Wed, 07 Jul 2010 12:42:33 -0700 Jackie Wong <h2 class="bcb-article-deck">Even minor cuts to provincial funding can be devastating to grassroots groups that are the lifeblood of arts in B.C.</h2> <author></author>In October 2009, Vancouver’s Helen Pitt art gallery was forced to close its doors. After losing its $32,000 gaming grant from the provincial government – nearly 40 per cent of its estimated annual revenue of $87,000 – the 35-year-old artist-run gallery had to give up its Gastown space. “We were no longer able to pay staff and no longer able to bear the cost of our lease,” says Keith Higgins, a visual artist who also serves as the organization’s administrative co-ordinator. Closing the gallery created a domino effect: without a public exhibition space, private and self-generated revenue subsequently dropped. Higgins is now working to drum up as much private fundraising support as he can to keep the gallery afloat and attempt to rebuild, but without provincial government funding, the Helen Pitt faces an uncertain future. Similar stories are playing out across the province: not only are artists losing crucial financial support, but gallery workers and arts organizers are losing their jobs in the wake of provincial funding cuts that started in 2009 and continue to have an impact on arts and culture workers today. B.C.’s arts and culture sector lost $12.1 million in gaming grants from the B.C. Ministry of Housing and Social Development in the past year as the provincial government struggled to rein in a $2.8-billion deficit (for the 2009 fiscal year ending in April). In addition, funding from B.C.’s Ministry of Tourism, Culture and the Arts went down from $37.8 million in fiscal 2008 to $18.4 million in 2009 and now stands at $24.6 million for 2010. Arts and culture community members say the cuts have devastated the sector, resulting in a radical reconsideration of how to make a living in the arts in B.C. Some organizations have been forced to close their doors, others have left the province and still more struggle to reinvent themselves and seek alternate funding at home. The struggle is almost Darwinian: it’s survival of the fittest, the most strategic and, often, the richest. While 2010 arts funding appears to indicate a slight increase from 2009, critics say the provincial budget isn’t as generous as it seems. According to March 2010 calculations by the Alliance for Arts and Culture, the budget includes a new $12-million item for the Royal B.C. Museum that inflates the numbers. A new legacy fund, derived from the 2010 Games and Cultural Olympiad, will contribute $10 million a year for three years to regional events, internships and growth sectors such as digital media, but critics argue the fund does not adequately address the drop in gaming grants.  Word of cuts started to spread in late August 2009, when the Ministry of Housing and Social Development announced that it had lifted its four-month freeze on gaming grants in advance of last September’s interim budget announcement. The ministry had instated the freeze in order to conduct a review of the granting program, and when the freeze was lifted funding priority went to social service organizations, not arts and culture groups. This despite confirmation many of these arts groups had already received that they could count on steady, multi-year gaming grants. Adding to the confusion was the fact that notification of the cuts seemed haphazard; arts administrators received surprise notice of the funding losses through phone calls, emails and media coverage. At the time, Rich Coleman, B.C.’s minister of housing and social development, told media that non-profits – including artists and organizations representing them – are not guaranteed gaming grant money and that whatever funding is allocated is assessed annually on the basis of merit. Concerned that the gaming grant cuts would lead to further losses, members of B.C.’s arts and culture community sprang to action. Protests took place across the province, and arts and culture workers expressed their vocal opposition to the cuts during public consultation prior to the 2010 budget last fall. Based on those sessions, the government’s own Select Standing Committee on Finance recommended in a November 2009 report that arts and culture funding be restored to 2008 levels. The finance committee’s recommendation was not reflected in the 2010 budget, announced two days after the Olympics ended. The opening and closing ceremonies alone had a $40-million budget, only about $6 million less than B.C.’s total arts funding for 2010. “We literally don’t have any money,” Kevin Krueger tells me on the phone from his Victoria office. The MLA for Kamloops-South Thompson – best known these days for his role as B.C. minister of tourism, culture and the arts – is sympathetic to the funding difficulties of arts and culture groups and artists, but the reality, he says, is that times are tough all around. “The fact that we’ve been able to continue to support arts and culture in a very substantial way, you would think, would be held to our credit, rather than being criticized,” Krueger says. “When governments are in pressing times like this, there’s a responsibility to deal with those who are actually the most desperately in need first. . . . We have more people unemployed presently, and we have more people needing social assistance than we’re used to having.” The best answer to poverty is a job, he adds, and the current fiscal plan is helping create new ones for those who need them most. Small arts organizations affected by the budget cuts are often ground zero for the experimentation and creativity that move the medium forward, says Jay Rankin, executive director of Ballet BC. “That’s where the creative stewing pot is: in the trenches,” he says. A case in point is Vancouver choreographer Crystal Pite, renowned for her innovative approach to dance. The former Ballet BC dancer moved her dance company, Kidd Pivot, to Frankfurt, Germany, earlier this year, after Frankfurt’s regional and municipal governments offered Pite two years of funding that exceeded government support she could have received at home. “We’re cutting ourselves off from a lifeblood,” Rankin says of the provincial funding cuts. Government funding “powers the creativity that everybody says we’re so supportive of.”  Pite’s relationship with Ballet BC has endured, and she choreographed one of three dance pieces that comprised Re/Naissance, a three-night production in April this year that marked Ballet BC’s anticipated return from the edge of bankruptcy. Rankin left his spot as managing director of the Toronto Dance Theatre to help rebuild Ballet BC in November 2009 – no easy feat considering the company lost its $50,000 gaming grant that year. Its BC Arts Council grant for the 2009 fiscal year was $236,000, down from $290,000 in 2008. At press time, Rankin said it was too early to tell how the 2010 budget would affect Ballet BC, and the company’s budget for the year had yet to be approved by the board. The estimated company budget for the 2009 fiscal year was $1.35 million, compared to $3.2 million in fiscal 2007. Provincial government support comprises about 17 per cent of Ballet BC’s total budget. Ballet BC currently employs 13 dancers who earn an average of $723 a week, plus an artistic director, a company manager, a rehearsal director and four administrative personnel – a skeleton staff, according to Rankin. While Rankin and his team are up for the challenge of reinventing Ballet BC, he notes the company can’t go far without government support. “That’s why it’s more fun to live in Quebec,” he quips. “It’s important to [Quebec Premier] Jean Charest to make sure that the artists are on side. . . . I would very much like to create a condition, starting with Ballet BC, where people take pride in Ballet BC, and it becomes important to the people and, by extension, it becomes important to the politicians.” If people learn to recognize the arts and culture sector as an economic and social driver, the funding landscape will improve, says Amir Ali Alibhai, a visual artist and executive director of the Alliance for Arts and Culture in Vancouver. Right now artists are treated like complaining children who need to shut up, he says. “I don’t want to be like that,” Alibhai says. “I’d like to move to a place with the government where we’re trying to find solutions together, where we’re actually thinking together.” The Alliance for Arts has cut staff hours and introduced user fees for services it provides – such as posting on its online job board and using its boardroom – to make up for lost provincial funding. The arts advocacy organization lost its $32,000 gaming grant in 2009, which comprised about 12 per cent of its annual operating budget, Alibhai says. That loss meant the Alliance started 2010 with a deficit, and dealing with the effects has left Alibhai with little time to focus on much else during his first year as the organization’s executive director. The Alliance is likely to survive, but, even though he doesn’t mention it in our interview, it’s clear that Alibhai is exhausted. Without government support, artists often work multiple jobs to make ends meet and eventually burn out, says Spencer Chandra Herbert. As a former producer with DanceArts Vancouver and the Vancouver East Cultural Centre, the 28-year-old NDP MLA for Vancouver-West End draws from personal experience in his capacity as opposition critic for tourism, culture and the arts. “There’s a romantic notion of the starving artist in the garret, but you can’t live like that, nor should you,” he says. “B.C. artists are already some of the lowest-paid workers in Canada. Most of the studies show they live below the poverty line. Yes, you love your job, but if you can’t afford to eat or you can’t afford to keep a roof over your head, you’re going to quit.”  Reece Terris has no illusions about making a living as a visual artist. The 41-year-old supports himself and his artistic pursuits through his work as co-owner of a contracting firm with business partner Warren Lightfoot, whose company loaned Terris money to get by during the year he took off work to complete an installation commissioned by the Vancouver Art Gallery. The project, called Ought Apartment, occupied the gallery’s rotunda for five months last year and was Terris’s largest solo exhibition to date. The installation consisted of six full-scale apartments, one on each floor. Each suite was furnished with items representing different decades from the 1950s to present day. “The day job has really helped me create a lot of what I’m doing with my [artistic] practice,” Terris says over an after-work beer at an East Vancouver café. “As an individual artist, I’m not making a living, by any means, by what I do,” he says. While some artists achieve financial self-sufficiency by getting picked up by supportive galleries, Terris says such circumstances are rare: “It’s like winning the lottery. It’s like being in a rock band that makes money.” Terris’s work ethic is commendable, but his ambitious schedule – construction work by day, art by night – isn’t sustainable for everyone, especially artists with children. But mixing business and creative pursuits could be one path toward a more sustainable future for the arts in the wake of funding cuts. In Gastown 14-year-old Biz Books is staffed with local actors. The store focuses on film, television and theatre resources and operates as a community hub. Owner Catherine Lough Haggquist has been a professional actor for more than 20 years, and she views the provincial cuts to arts funding as an occasion for reinvention. “I think this reality is forcing artists to come back to a place where they have to take responsibility for their own commercial well-being,” she says. Funding cuts have necessitated cutbacks on big-budget productions, but, in response, actors are making short films instead of working on big features or performing in found spaces instead of theatres, Haggquist says. This fall Haggquist and three colleagues will mount a local production of ’Night, Mother, a Pulitzer Prize-winning play by American playwright Marsha Norman. While they’ve applied for a Canada Council grant, Haggquist says the group has been careful to plan the production so that government funding will neither make nor break the show. They’ve already launched small fundraising efforts and have started planning the production earlier than usual. Provincial arts funding cuts present obvious challenges, but they won’t wholly decimate the sector, Haggquist says. Besides, artists never lacked the will to go on in the face of adversity. “People are tired of feeling their art is threatened and are trying to find a way to make it happen anyway,” she says. Artists who can think like businesspeople and entrepreneurs will succeed in the new reality, she says. And taking responsibility for one’s own financial success can be a good thing for the arts and culture sector, notorious for labours of love, not money. “All of the safety nets are eroding . . . and that’s not to be negative or doomsday,” Haggquist continues. “I think there’s going to be a shakeup, and there’s going to be new things that synthesize and come out of it.” 14194 at http://www.bcbusinessonline.ca B.C. Elderly Care on the Rise http://www.bcbusinessonline.ca/bcb/business-sense/2010/07/07/bc-elderly-care-rise Do employees caring for elderly relatives get workplace support? http://www.bcbusinessonline.ca/bcb/business-sense/2010/07/07/bc-elderly-care-rise#comments Business Sense baby boomers caring for elderly parents elderly care July 2010 Valerie Mctavish workplace stress Wed, 07 Jul 2010 12:42:00 -0700 Valerie McTavish <h2 class="bcb-article-deck">While workplaces long ago adapted to employees’ child care needs, few are prepared for the coming tsunami of eldercare demands.</h2> <author></author>Belinda Neumann’s co-workers could only watch as she buckled under the pressure. At work she was often distracted, forgetful and confused. Her productivity was shot. She never knew when a phone call would demand she drop everything or (as it did more than once) reduce her to tears right there in her cubicle. Her mother was suffering with multiple sclerosis, and caring for her had become a daily worry for Neumann. If it wasn’t finding the time to drive from Vancouver to Abbotsford to help with a mundane task, it was the long, frustrating phone calls. After a few years of escalating eldercare demands, Neumann’s manager called her to a meeting and suggested she should perhaps step down from her position as a recruitment specialist. She was offered a demotion. For Cora Amador, concern for her bedridden mother turned her from a model sales clerk with WH Smith to an impatient, sometimes rude and unreliable employee. She would regularly call in sick, sometimes as often as twice a week, and if she got a call at work about her mother’s health, she would have to leave. Her mother was constantly on her mind. Her colleagues and manager were sympathetic but ultimately the emotional strain drove Amador to quit. Susan Dunn’s mother suffers from Parkinson’s and dementia. The dementia would routinely cause her to wander the neighbourhood in seasonally inappropriate clothing, spend hours trying to find the keys she’d hidden from imaginary thieves or just forget to eat – yet she refused to accept care outside of her home. The burden fell on Dunn, managing broker with DFH Real Estate in Victoria, to undo all the things the dementia did. She would close up shop to go locate her lost mother or find the mislaid keys or arrange for a meal service. Care became a juggling act, and it wasn’t until a medical emergency moved her mother out of the house and into a geriatric care facility that the pressure lightened a little. There are hundreds of similar stories, each one a little different, which is why eldercare in the workplace is such a complex issue. Dealing with a parent or partner who is no longer able to manage their own care brings on emotional, physical and psychological issues that certainly affect the individual employee but also the company and ultimately the bottom line. The toll is about to get a lot bigger when you consider the fabric of today’s workforce. Canada’s densest demographic, the baby boomers, are working longer but also caring for parents who are enjoying an extended lifespan (now an average of 81.2 years for British Columbians). By the year 2032, approximately 25 per cent of B.C.’s population will be seniors, and as their care needs increase so will the demands on their children. According to a report published by Mount Allison University, 90 per cent of seniors are cared for by family or community care or a combination, but not by institutions. That puts the care of aging boomers squarely on the shoulders of generations X and Y, but the problem is that those generations were born during a birth-rate decline. So while the population of seniors needing care will mushroom in the coming decade, they have relatively few offspring to look after them. It’s not just age that is increasing the demand for care; it’s also the escalating prevalence of the most common diseases affecting elder health: cancer, Alzheimer’s disease and diabetes. The incidence of cancer is estimated to be growing by six to eight per cent per year. According to Health Canada, the number of Canadians needing cancer treatment will have doubled between 2001 and 2020. Earlier this year, the Alzheimer’s Society of Canada reported that in 2008 there were 103,700 new cases of dementia identified and that by 2038 the annual number will increase to 257,800. The society estimates that, at these rates, by 2038 more than 1.1 million Canadians will be suffering with dementia. As for diabetes, the numbers are shocking. In 2000 1.4 million Canadians suffered with diabetes; by 2016 that number will hit 2.4 million.  The approaching eldercare crunch bears some similarity to the crisis that corporations faced in the late ’80s, when child care demands took women out of the workforce. The difference is that eldercare is much less predictable. Unlike raising a family, there is no nine-month planning phase and there isn’t a set timeline. While a newborn will eventually be old enough for daycare, for school and eventually for self-care, an illness has no time frame; it might be a month of recovery or it could be decades of assisted living. The one similarity is that the burden often falls on women. John DeHart, co-founder of Nurse Next Door Professional Home Healthcare Services Inc., a service that provides in-home care, says that 75 per cent of the people who make that initial call for help are the daughters or daughters-in-law. They are the ones trying to figure out how to keep all of the balls in the air. Perhaps the most significant difference between eldercare and child care is its overwhelming emotional toll. DeHart believes most people are caught off guard. “It’s a big impact on your life when something happens to your mom or your dad,” he explains, “and we as a society aren’t quite prepared for it because we’ve sort of stuck our head in the sand.” He knows first-hand how serious that sudden stress can get. Sitting in the open space of the Nurse Next Door offices in Kerrisdale, he remembers a client he had dealt with in the early days of the company. It was the strain in her voice that led him to offer an introduction to another client who was dealing with a similar situation. He recalls, “I got a call back a month later and she said, ‘You know what? I was about to commit suicide because of what I was going through, and the fact that I was able to sit with another person who was going through what I was going through . . . it took me down from the cliff.’ That’s how stressful situations become.” And in that nerve-racking time, getting answers and advice can be one of the biggest challenges, according to Peter Silin, an expert in eldercare and principal of Diamond Geriatrics Inc. As a self-titled “care concierge,” he helps clients navigate through public and private care options. He finds that most people assume the government will look after everything and are surprised to discover there is often a gap in care. He explains, “For assisted living in the public system, you can wait between six months and two years. For complex care (nursing homes) in the public system, you can wait between one and three months.” This reality leaves people searching for alternatives or trying to manage things on their own, both of which lead to a decreased capacity at work. And most of them do it silently. Silin says, “It’s more acceptable or understood about child care than about eldercare. I do find that people hide their issues and just take a sick day.” This all stems from employees being ill prepared for the situation; they don’t know what to expect and they don’t have any answers. They don’t know what they can ask for from their supervisors, so they don’t ask. Erica Pinsky, author of Road to Respect: Path to Profit, says, “If the company is not adopting what I would call a respectful attitude, respecting the whole employee, then in general it’s going to cause those employees to feel that they are not able to speak up about those issues, those needs, and that is going to affect their ability to be focused at work and their connection and loyalty to their employee as well.” She cites examples from her book where employers engage in an “adult-to-adult” relationship with their employees, ensuring they know what is expected of them but giving them the flexibility to get the work done however that fits into their life. That could mean an employer offers telecommuting, shift work, delegation or even a leave of absence. Pinsky believes that when employers approach all outside stresses this way and they empower their employees to be in charge of managing their own work, it pays off. She further explains, “Employees are committed because they feel that responsibility to the company because the company shows them the respect that they feel they want and deserve and, as a result, they give that back. It really does build loyalty. It does build productivity amongst employees.” This is the approach she feels will help companies survive the coming eldercare issues.  Several companies are ahead of the curve in addressing the need for eldercare benefits. KPMG has a back-up eldercare program for its employees that assists them with in-home care. And if those care hours get used up, other employees can gift their unused eldercare hours. Vancity offers family care days to its employees, which can be used for self-care, child care or eldercare. Ernst and Young provides access to 24-hour counselling and has an eldercare fund. Nurse Next Door offers its staff flexible shifts and access to caregivers. But perhaps the biggest benefit available is education. Silin believes that preparing employees for the possibility of eldercare issues, giving them a road map to the various forms of assistance and talking to them about the unexpected expenses of eldercare is one of the best ways to keep employees focused at work. DeHart also advocates for education. He believes that management training is the key, not only in how to handle employees with eldercare issues, but in being able to spot the signs of someone who may be dealing with it in silence. Employees tend to keep their situation to themselves because they initially underestimate the impact. Even DeHart, who is in the business of eldercare, didn’t fully understand it until he had a personal experience. “I got a call out of the blue that my dad had cancer, with two months to live,” he says. “I took off literally for two months and was his caregiver 24-7 and up until that point – even though I ran a business doing it – I didn’t get it. I didn’t get it until I was immersed in the emotional, the physical, the spiritual, just the turmoil that you go into, and the hardship. And I remember that a month into it I burnt out. One month into it. Pretty young, high-energy guy and I burnt out. And being off work too – I wasn’t even working.” The connection between an overwrought employee and a company’s bottom line is a fuzzy one. Currently, there are few gauges measuring the economic impact of eldercare. A recent Watson Wyatt report estimates the cost of lost productivity at $16 billion in Canada. A 1997 study done by the insurance provider Metropolitan Life estimates that eldercare cost American companies around $3,142 per employee each year. These numbers may seem astronomical, but they incorporate loss of employee productivity, administration, staff replacement, health and mental care, as well as absenteeism. Belinda Neumann had worked for Vancity for more than 20 years when her manager called her into a meeting to discuss her job performance. She had mastered many challenges during her career, including balancing work and life while sharing care of her two children with her husband. But it seems the task of caring for her mother was simply too much. Neumann was told that she was an important member of the team and that was why she was being offered a demotion. Initially it was a blow to her ego. Her first instinct was to try harder, to pull up her socks and prove she could do it all. But when she looks back on it now, she says she’s relieved she got the chance to stay on at the company. She took the demotion and never regretted it. Three years later, after the unfortunate loss of her mother, Neumann is in line for a promotion, and she feels her career is back on track. In hindsight, she says, “I believe that my manager at the time just felt that I was overwhelmed and that the demotion would help my situation. In the end, she was correct, and I was able to feel more in control of my work life.” 14193 at http://www.bcbusinessonline.ca A Strong Canadian Dollar http://www.bcbusinessonline.ca/bcb/business-sense/2010/07/07/strong-canadian-dollar "Suck it up, princess": our low-currency advantage is gone forever. http://www.bcbusinessonline.ca/bcb/business-sense/2010/07/07/strong-canadian-dollar#comments Business Sense B.C. businesses B.C. economy Canadian currency Canadian dollar Craig Williams Daniel Mukyka Jock Finlayson loonie US currency US dollar Wed, 07 Jul 2010 12:22:03 -0700 BCBusiness <h2 class="bcb-article-deck">Predicting which way the loonie is going these days is a fool’s game, but one thing seems certain: B.C.’s low-currency advantage is gone forever</h2> The B.C. economy, like that of the rest of Canada, enjoyed a security blanket back when the loonie was worth less than 70 cents U.S. It helped keep export figures high and workers employed. Now, like a hit of cold morning air, our blanket is gone. And looking at B.C.’s economy today reveals something many of us see when we peer into the mirror each morning: we’re not in as good shape as we should be. By giving Canadian companies a price advantage overseas, the low Canadian currency has historically allowed us to grow a bit soft around the sides. Too many of our systems are old-fashioned; too much equipment out of date. The output Canada gets per hour worked trails that of most of the developed world, with B.C. trailing further still. And so a discussion about currency naturally evolves into a far-ranging examination of B.C.’s strengths and weaknesses, be it in our business hardware, our leadership or in our distinctive West Coast culture. Sharing their insight are Daniel Muzyka, dean of UBC’s Sauder School of Business; Jock Finlayson, executive vice-president of policy for the Business Council of B.C.; and Craig Williams, vice-president of B.C. for Canadian Manufacturers & Exporters (CME). We can’t predict exactly what the loonie will do in the future, but how likely is it that being near parity will have a serious effect on businesses in B.C. in the long term? MUZYKA: It is going to have an impact. We lived through a long period in Canada when we were down to 63 cents to the U.S. dollar; it made a very depressed currency. That’s a great way to boost your exports, and it’s a great way to create the illusion of progress in wages and salaries, but over the long term it’s not sustainable. We didn’t need to be as productive, we didn’t need to appear as competitive, and now with this change in the currency – likely a sustained currency change – we find ourselves at an interesting juncture, where we are having to deal more with productivity issues that have been lingering in the economy. And we’ll have to deal with dislocation in the economy in terms of which industries are more viable. FINLAYSON: I’ve been surprised that business has not been as affected as I might have thought. I don’t think very many Canadian companies have business strategies that are going to rely on a lower dollar to survive. I think that’s been beaten out of them by the steady appreciation we’ve seen. I don’t hear as many businesspeople complaining the currency is too high or urging the central bank to do something about it, and I think our companies have realized that this isn’t something we’re going to be able to control and they do need to compete. All of the export-oriented industries will face some kind of a hit certainly, but it’s not as simple as it used to be. The rise of the global supply chain means there’s a lot more import content in what we produce, so you’re getting squeezed on your selling margins but you’re actually benefiting on the cost of your inputs. The impact of the currency on business is a more complicated story than it was 20 years ago.  <div style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;" times="" new="" roman=""><img width="259" height="186" alt="" src="/files/image/BCBusiness/Craig-Williams-3.jpg" />Craig Williams, vice-president of B.C. for Canadian Manufacturers & Exporters</div> Have we really started to kick the habit of relying on a low currency to compete? WILLIAMS: My basic response to CME members these days is, “Suck it up, princess,” because it’s not going to go away. Our membership touches about 10,000 companies across the country, of which 80 per cent are under 500 employees. I was the CEO of a small electronics manufacturing company from the 65-cent dollar to the $1.10 dollar, and 80 per cent of our product went to the U.S. There were two problems we faced as it ran up: one was volatility; you could lose all your margins just on volatility, so we started bringing in hedging. And the next thing we started to do was look at weaning ourselves off just the U.S., which is something I think the whole country is going to face up to nowadays. Those are the strategies the small and medium-sized companies are taking. At least, they better or they’re not going to exist anymore. What are the areas we need to work on? WILLIAMS: There are four areas we need to push on for success. One is weaning ourselves off the U.S. The supply-chain thing is absolutely critical. It’s not just the U.S. anymore; it’s all around the globe. Historically in the forest industry, for two years you make money till the cows come home, two years you hold your own and two years you lose it and wait for the U.S. market to come back. Well, at some point that’s not going to work, and I think we’re at that point.The other thing is productivity. We are not productive in B.C. Unfortunately, we haven’t been investing in the processing machinery or information technology and lean manufacturing – that’s getting rid of waste – like others, and that’s a real failing here. The third thing is innovation, and the fourth thing is worker skills. It’s alarming the level of illiteracy out in the workforce, even with those who have high-school education. We’re doing some programs now with literacy, numeracy, problem-solving and trying to roll it together to help the productivity from the soft side. MUZYKA: Productivity is the giant issue on the table; it’s a 900-kilo gorilla. We have a number of forces in the economy that work against us continuing to evolve skills and adopt new processes that improve output. There’s a natural resistance to investing in capital to replace labour in places where we should. It’s a constant problem; it does drag on us. I’ve been in a number of global meetings, and I spent a number of years working in the Nordic countries where they have very high social demands in terms of how individuals are treated, but they also have a persistence in trying to find new methods, new ways to improve their output per unit of input. They’re also good at balancing inputs flexibly, saying, OK, this has become more expensive so we’ve got to haul back on that and find a different way to produce this product or move our supply chain and find a way to source this somewhere else. And that’s one of the things Jock alluded to where we’re not flexible. WILLIAMS: About 20 years ago, I was engaged by the Canadian government to find out why B.C. (which was a leader in pulp and paper in its heyday of the ’60s and ’70s) was now lagging Sweden, Finland, Germany and the U.S. – and none of those are low-currency countries. One thing we came up with was a strategy in Finland and Sweden where there was a very attractive tax incentive to invest in new technology. I lived in Europe for four years and ran a Swedish business, a Finnish business and a French business and bought one in Belgium, and I could see the results in spades. I would bring my North American colleagues over and we would go to the Finnish plant and they’d say, “Look at the toys these guys got.” Other things we found were high education and continuous improvement; they’re just relentless on that. FINLAYSON: If it’s true that the dollar near parity is going to last for some period of time, firms are going to have to respond to an enduring change in the competitive environment. There will no longer be any slack that can be tolerated through an undervalued exchange rate. I think that is going to drive a relentless search for productivity. Part of our problem in B.C. is that we have an economy that is heavily weighted toward small business, which actually is a negative for productivity. A lot of people don’t realize that. I was just speaking to an unnamed politician earlier today who was surprised to hear that. He bought into the myth that small businesses are the ones that are the most productive and most innovative. False. Larger enterprises can bring in more capital to bear per hour of work, more sophisticated systems, and they have staying power in the marketplace because they have better access to capital and can make the longer-term investment.  <div style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;" times="" new="" roman=""><img width="259" height="186" alt="Daniel Muzyka on B.C. Economy" src="/files/image/BCBusiness/Daniel-Muzyka-3.jpg" />Daniel Muzyka, dean of UBC's Sauder School of Business</div> If B.C. does have more resistance to change than other regions, where does that come from? MUZYKA: I’ve been here 11 years and I don’t have the answer, but I have to argue it’s partly cultural. You’ve got to have a culture where you’re adaptive, where your skill levels are constantly improving, getting people to educate and renew themselves, so you don’t just get out of your apprenticeship and you’re done. You’ve got to have incentives to adopt technology but also the managerial incentives to use it. Some countries put in fiscal incentives but people didn’t use it. FINLAYSON: Canada is a great country to live in, and we have a high standard of living, but one thing that is missing here is business ambition. You’ve got to want to grow and be innovative and be at the leading edge of your industry, and we have a lot of companies in B.C. that are happy to function at the level of productivity that they currently have and not necessarily grow, and growth is where you can get some of your biggest upside for any dynamic capitalist economy. I think there’s something in the environment here in B.C., I don’t know what it is, that seems to impede that a little bit. If I was in government, I’m not sure what I could do about it. I’m not sure if it’s even amenable to a public-policy response. Part of the problem must be with our business leaders then. What help do they need? WILLIAMS: The U.S. has the mentality of Mary Kay: the leader jumps up and gets the pink Cadillac, and everybody applauds him and bows. Whereas in Canada and Australia – I lived in Australia for a while too – as soon as you start being successful the natural mentality is to knock you down. Up in northern Europe it’s much more like here; down in the southern Mediterranean, it’s much more like the States. So if you had an incentive program for the Italians, that would be great. If you had an incentive program for the Scandinavians and the guy got held up as being good, the next month he wouldn’t get any help from his co-workers. Even our SR&ED program [Scientific Research and Experimental Development tax incentive], which should enable us to do the most R&D in the world, stops dead when you want to commercialize it. We develop these good technologies with Canadian taxpayer money, then somebody who’s good at marketing and commercializing and adopting comes along. The Americans do it, the Koreans do it, and it’s problematic. MUZYKA: I’ve spent almost a decade in Europe, and the European Union had several studies conducted about why isn’t there more entrepreneurialism across Europe, and one of the biggest factors it came down to was culture. One of the key issues they focused on was the view toward failure. I know venture capitalists in Silicon Valley who don’t invest in people who haven’t failed. It’s sort of an innate distrust. Well, imagine that conversation here. We don’t tend to forgive, and we don’t tend to forget. FINLAYSON: Let’s just switch gears for a moment. We can spend a lot of time saying Canada’s not good at this or that, but one of the reasons why our currency has gone up is because Canada is viewed as having a successful economy. We’ve gone through the great recession of 2008-09. Everybody’s been hurt, but we’ve come out of it in relatively good shape. Our financial institutions, whatever their failings, didn’t need to be bailed out; our financial systems have been resilient; public institutions have performed really well; our economy has actually been quite adaptable in the face of big changes, including the exchange rate. And one of the reasons the currency is up is the shift of the global centre of economic gravity toward Asia. I spoke to a group of German institutional money managers here in Vancouver for the Olympics who wanted a briefing on Canada, the warts and all. These 17 people were managing I don’t know how many billions of euros of capital and were in the process of reallocating part of their North American investment portfolios away from the U.S. into Canada. I asked them why, and it was because of the macro story. They thought Canada was better positioned. Maybe they’re wrong, but that perception is out there, widespread. MUZYKA: I totally agree that it’s our network connections with Asia that will provide us a big opportunity. Not just their consumption of resources but – this is where we’ve got to get better – their consumption of knowledge: what it is we know that can create the products and services that are going to meet their needs. It’s a huge opportunity for us because of our natural linkage with both India and China. We should be shaking off the storm and saying, OK, that’s great. Where’s our opportunity here and what are we going to do to seize it? And that’s where it gets back to this ambition point.  <div style="margin: 5px; padding: 5px; background: rgb(255, 255, 255) none repeat scroll 0% 0%; -moz-background-clip: -moz-initial; -moz-background-origin: -moz-initial; -moz-background-inline-policy: -moz-initial; width: 259px; float: left;" times="" new="" roman=""><img width="259" height="186" alt="Jock Finlayson on B.C. Economy" src="/files/image/BCBusiness/Jock-Finlayson-3.jpg" />Jock Finlayson, executive vice-president of policy for the Business Council of B.C.</div> We may have these advantages: a stable financial system, more international buying power. But do we have the right skills to exploit these strengths? MUZYKA: We do, but what Jock is saying is this is a critical transition point for us. We need to move from being focused on the resources we have and resources we can control and start asking ourselves constantly, What is the opportunity? Are we capturing the opportunity? This is really a shift toward building a more entrepreneurial economy. FINLAYSON: And an outward-looking economy. MUZYKA: That’s exactly right. It’s not about us. It’s about what’s the opportunity out there. We need to be export oriented. We’ve got to use our innovation, our ability to create new ideas and teach them. We’re not going to win a pure manufacturing game for lots of reasons. Our base labour rate around here and the desired labour rate is high, and we’re going to be at high-value-added sorts of industries to be able to win in the medium- and long-term. So we’re going to be selective. It’s going to be, Where can we use innovation to increase our value-added so we can sustain those labour rates? That’s the name of the game. What can we do, whether it’s the government or the business community, to make the most of these opportunities? WILLIAMS: I think we should encourage training in the workforce, whether it’s through tax incentives or other programs. You don’t want to have to lay off guys in the workforce to get help to train them. If we could have some sort of policy to help, that’ll make those people’s wealth and knowledge more productive in the workplace. On innovation, I think we have a terrific SR&ED program, but I think that could be improved. It could be allowed to go more into commercialization and adoption of new technologies, as opposed to doing R&D that keeps getting scooped by others. So I think we need tweaks, but generally it’s gone the right way at the macro level. Even the feds have done some good work. All the equipment and machinery coming in to the country is tariff free now. FINLAYSON: I think governments in Canada and in B.C. have actually done a pretty good job on a lot of the macro pieces. We’ve had small stable inflation, and we’ve had good fiscal management for a period of time, which has allowed us to withstand this great recession and come out not quite as damaged as some of the other countries. We’ve had a lot of tax changes, mostly in the right direction.But if we’re going to compete with the world-scale businesses, Canadian companies have to grow. In Canada we’ve got a preference for small. We’ve got it in the tax system, where basically you are taxed at one level and then tax goes up dramatically. We’ve got it in the SR&ED program, where tax credits that encourage research are not available to big or foreign-owned companies. I think we should be looking at removing the bias toward big and growth. But again I’d say governments have done a pretty good job. If you look at R&D in Canada, it’s really a failure on the business side. MUZYKA: If innovation’s the key, the question is, How do we get that innovation employed more efficiently than anybody else? Now the good news is that the government has been responsive, but government’s not necessarily going to solve the problem by picking industries. Where countries pick industries, it’s by and large failed. So government needs to be lean, mean and provide a good base of services so individuals and companies can be successful, and they need to watch the tax rates. And we have some good news stories on the tax point in B.C. We’re starting to see more professionals locating here because we’re not oppressively high in taxes. But allow me to turn the cannon, because ambition and culture do get in here. So what BCBusiness does as a publication matters a lot. I think it’s truly critical that we recognize the people who add value in the economy. Let’s make heroes out of these successful entrepreneurs. Do we do that enough? In my mind, probably not. We’ve got to recognize them for the impact they have. They created how many thousand jobs? How many more professionals did they bring into the economy? We have to become, as a culture, much better at recognizing those people for the positive contribution they have. 14190 at http://www.bcbusinessonline.ca Bright Light: Jeanette Jackson http://www.bcbusinessonline.ca/bcb/featured-profile/2010/07/07/bright-light-jeanette-jackson Jeanette Jackson is poised for the big leagues after building a company around her father's invention. http://www.bcbusinessonline.ca/bcb/featured-profile/2010/07/07/bright-light-jeanette-jackson#comments featured profile B.C. small businesses business start-ups David Jordan Jeanette Jackson Light-Based Technologies Inc Wed, 07 Jul 2010 12:21:45 -0700 David Jordan <h2 class="bcb-article-deck">Jeanette Jackson took her father’s invention, built a company (Light-Based Technologies) around it and is now poised to revolutionize the lighting industry. But she isn’t stopping there.</h2> Inside a faceless grey industrial park flanking the power lines along Boundary Road, down a narrow, starkly lit hallway, lies the corporate headquarters of Light-Based Technologies Inc. In the place of a receptionist is a vacant desk, on its surface a random piece of electronic equipment trailing wires from either end. After a couple of minutes, a smartly dressed young woman rushes out from the back, gulping down the last of a mid-morning snack. With a laugh and a bright smile, Jeanette Jackson extends a hand and welcomes me to her company. Jackson is not your typical CEO. With a background that includes time on the sales floor at Future Shop, a stint in the cruise-ship industry, multiple gigs waiting tables and serving drinks and two years as a nanny in Switzerland, she wasn’t exactly charting a course for the corner suite. However, in building a team around commercializing an invention of her father’s, the feisty 31-year-old has exhibited uncanny business smarts that some believe just might push this startup into the big leagues. Light-Based Technologies is building a suite of products around a technology for controlling LED lights, targeting manufacturers that will include its electronic chips in their lighting products. Its competitive advantage, according to Jackson, is that Light-Based Technologies’ products are cheaper and better than what’s being produced by anyone else. At least one industry expert agrees. Richard MacKellar was CEO of Brightside Technologies Inc., a Vancouver company that was developing digital-imaging technology when it was bought by Dolby Laboratories Inc. in 2007. Today he’s managing director of Chrysalix Energy Venture Capital, which has invested between $1 million and $2 million in Light-Based Technologies. “Jeanette has put together a team that has found an area in the solid-state-lighting-control space that is clearly not being done by anybody else yet,” says MacKellar. “That leads to good possibilities for building great intellectual property, and I think it’s also led to some very large players being quite surprised at how effective their solution is.” Ushering me into the company’s spartan conference room, Jackson describes the path that led her to co-founding the company with her father. When she enrolled in SFU’s business program in 2003, her career goals included “something in marketing, human relations, global account management . . . something that involved travelling and teaching people.” If anything, business school taught her that climbing the corporate ladder wasn’t for her, so when she graduated in 2004 Jackson began casting about for something more in the entrepreneurial vein. She hit on the idea of developing an invention her father had come up with while working in the sign business, and Light-Based Technologies was born. The company survived on financing from family and friends until 2008, when Chrysalix stepped in with first-round venture financing. Today the pace is frenetic as Light-Based Technologies moves from research to commercialization, ramping up for its first major product launch. Jackson describes putting in long hours not only leading the team, but growing it. This week she’s interviewing for two positions in intellectual property, which will bring the staff level up to 15. She expects that number to reach 40 by 2013, split evenly between R&D and sales and marketing. Somehow she finds time for an active personal life, which at the moment includes playing tennis, volleyball and baseball and working out at least four times a week. “And I have a three-year-old!” exclaims the single mother. Jackson credits mobile technology as her coping mechanism. “I’m always on,” she says. “Unfortunately, the first thing I look at when I wake up is my BlackBerry, and the last thing I look at before I go to sleep is my BlackBerry. It’s a bit of a bad habit, but it allows me the flexibility to pick my daughter up, go to the gym, then go home and get her situated and then do any final tweaks for the day.” As for long-term goals, Jackson’s aspirations know no bounds: “director of a few companies, hopefully having a handful or less of other companies that maybe I’ve started.” She’s also very passionate about green technology, adding that she wouldn’t mind running a company in that area. And Jackson hasn’t ruled out a career in public service either. “I like politics,” she says. “You never know what the future could be there.” 14188 at http://www.bcbusinessonline.ca