Peter Oliver

The

Canadian Business Journal NOVEMBER 2012 Volume 5 Issue 11 www.cbj.ca in this issue ► Transformation The Importance of Global Economic at Canada Post SMEs to the Economy Forum of the Americas

Justin Trudeau Liberal Saviour or Celebrity Dud? Th3 M ustacheers O & family Present ... mo’grow November 1 - 30

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Visit us at GovanBrown.com or Movember.com to donate or watch us grow in our journey Construction Managers EDITOR’S Note

Trudeau-mania continues to The next Trudeau may indeed have what it takes, but envelop the Liberal party across has yet to prove it. swaths of the nation, bringing with it a cornucopia The CRTC, under new boss Jean-Pierre Blais, of unbridled enthusiasm from sanguine loyal Grits. has quickly shown an aggressive resolve in baring its Justin Trudeau is seeking to pull the once mighty teeth with the shocking denial of BCE’s planned pur- national party out of a deep, smoldering abyss and chase of Astral Media in a deal valued at $3.4 billion. put the pieces back together. I once met his famous Convergence has been such a regular staple within father at The Toronto Zoo of all places. He was there the broadcasting industry over the past decade that it enjoying time with his then very young daughter was widely assumed Bell would be rubber-stamped to Sarah Elisabeth Coyne. Pierre Trudeau was incognito forge ahead with its agenda unfettered, building upon that day, wearing an old fishing hat covering much of its massively increasing conglomerate of multimedia his face, a summery shirt, shorts and sandals, look- holdings while competitors fall by the wayside. This is ing very unlike a former prime minister – which was a long overdue victory for the frazzled and largely un- the intent. Clearly, he did not want to be recognized appreciated consumer and promotes a competition- and I never let on that I knew. Our brief encounter based business model. consisted of his saying it was a nice day and asking if Meanwhile, Finance Minister Jim Flaherty has I knew where the White Lions were. Then, he and his tightened the clamps of regulation on prepaid credit daughter were on their way, going completely unno- cards, which was sorely overdue. Financial institu- ticed by others in the park. tions were railroading the public with a number of If his son is the new anointed Liberal king, he and abhorrent hidden fees and felt no shame whatsoever his team have a major undertaking on their hands. in doing so. Expiry dates and fees associated with What remains to be seen is whether there’s any steak unused cards have been abolished. to go with all the sizzle. That’s one of the reasons it As promised, we have a feature story on Canada would be advantageous if a robust, seasoned oppo- Post and its transformation process. I’m still not con- nent were in the leadership race if for no other rea- vinced it’s a winning formula, but do remain hopeful. son than to test Trudeau’s political mettle. In this era Otherwise, while not an immediate direct burden to of social media, greater trending emphasis seems to taxpayers – yet – it has definite potential to be just be placed on what shampoo he uses for his oft-talked that, in the event this comprehensive turnaround about freestyle coiffure. The surname gets him goes bust. through the door, but substance will ultimately be the determining factor as to whether or not he remains. Angus Gillespie Valvoline® is proud to have Pro Oil Change as a valued member of Team Valvoline.

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Over 140 Years Under the Hood

Sussex Centre, #805 - 50 Burnhamthorpe Road West George Media Inc. Over 140 Years Under the Hood Mississauga, Ontario | L5B 3C2 CANADA © 2012, Ashland, ™ Trademark, Ashland and its subsidiaries, registered in various countries. Table of Contents NOVEMBER 2012 | VOLUME 5 | ISSUE 11

Progressive collision centers require more than exceptional color match to remain 054 ahead of the competition; they rely on industry-leading training and services.

CBJ FEATURES Roy Green Collision Clinic knows a perfect match when they see it. From color to training to Bullying! Claiming the lives of Canadian Children 018 automotive paint; PPG and AutoChoice provide Collision Clinic with the tools to Smart Cities of the Future International cities making the transition 024 ensure they meet their match.

Canada Post Major Transformation to Save the Crown corporation 034 Congratulations Collision Clinic on your success. Social Media Is it a Waste of Time for Your Business? 044 Border Security Enhancements A Victory for Canadian Business 050

COVER FEATURE Justin Trudeau Liberal Saviour or Celebrity Dud? 054

perfectMatchAd.indd 1 7/13/12 12:12 PM Progressive collision centers require more than exceptional color match to remain ahead of the competition; they rely on industry-leading training and services.

Collision Clinic knows a perfect match when they see it. From color to training to automotive paint; PPG and AutoChoice provide Collision Clinic with the tools to ensure they meet their match.

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perfectMatchAd.indd 1 7/13/12 12:12 PM Table of Contents NOVEMBER 2012 | VOLUME 5 | ISSUE 11

070

120 SMALL BUSINESS Canada-EU Trade Its Benefits to Small Business 070 Small Business Success Stories with Peter Oliver and Rick Segal 078 Entrepreneurial Spirit in Baby Boomers More are Starting their own Businesses 086 Digital Shopper Marketing Agency First of its Kind in Montreal and Toronto 096

CBJ FEATURES CANSIM Put it to Work for You 104 Alex Carrick An Industry Created as if By Magic 114 Mergers & Acquisitions Protection Without Protectionism 120 Funny Business by Michael de Adder Table of Contents NOVEMBER 2012 | VOLUME 5 | ISSUE 11

124

CBJ FEATURES

152 156

CBJ FEATURES Legal Understanding the Residential Agreement of Purchase and Sale 124 Global Economics International Economic Forum of the Americas 132 Rising Benefit Costs Employers Get a Temporary Reprieve 144 Mark Borkowski 10 Common Pricing Mistakes 146 Goderich A Year after a Devastating Tornado, the Small Town Says ‘Thank You’ Canada 152 Clean 15 Series Is Your Company’s Culture Ready to Open Up? 156 Table of Contents NOVEMBER 2012 | VOLUME 5 | ISSUE 11 canadian Business in Action

024 AUTOMOTIVE Aout Electric Service Ltd. Hands on the Wheel 004 Gyro Mazda Keeping it in the Family 014 F ort Garry Fire Trucks 024

COMMUNICATION Bruce Telecom Connecting Your World 034

CONSTRUCTION Ameresco Amalgam of Engineering Excellence 042 DW Builders Welcome to Your New Home 048 Contempora Steel Builders Transforming Clients’ Needs into Efficientesign D 054 Heatherbrae Builders 062 Mainstreet Equity Building Value in Uncharted Real Estate Waters 070

ENE RGY & RESOURCES Jansen Combustion and Boiler Technologies 082 034

062 Table of Contents NOVEMBER 2012 | VOLUME 5 | ISSUE 11

088 FINANCIAL Heritage Education Funds 088 McLean & Partners 094 Rogers Group Financial “Know Thy Client” 102

FOOD & BEVERAGE Allan Candy Company 110 Moca Loca Café Yours to Discover 118 Palma Pasta Premier Italian Food 124 Black Fly Beverage Recipe for Success 128

HEALTHCARE SteriPro Canada Medical Device Sterilization 134

MANUFACTURING Covers Canada Your Choice, Your Style, Your Way 142 172 118

210 124

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f ie br n book. Don’t know how he knew me. It said, if you ifyou said, It me. knew he how know Don’t book. boobs. ur send I will me for a show on put don’t tember YouTube video. In Grade 7, she and some some and she 7, Grade In video. YouTube tember post photos to a camcorder using were friends wrote she as to, dared was Amanda online. Face on msg a got I later year 1 did. I So “flash. The thought of a childso with filledfear The thought commits she or that he and self-loathing is wrenchingly painful.suicide was Such the case after fifteen year old I a Sep on anguish her detailed Amanda cards Todd of British Columbia ended her life. her ended Columbia British of Todd ives of L

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CBJ SAYS NOVEMBER 2012 The Canadian Business Journal 19

Bullying! Claiming the Lives of 018 Canada’s Children

He knew my address, school, relatives, friends, everyone. A few heartlessly poked fun Amanda’s family name.” way. Female suicide to them became “Todding”. The individual followed through with his Questions are asked of families of children threat. A photo of Amanda found its way into cir- who kill themselves. How could they not have culation. A desperate moment for a child. “Cried recognized the danger? every night. Lost all my friends and respect I don’t know Amanda’s parents, but I have people had for me” continued the YouTube flash through my radio program gotten to know Craig card message. Wilson, father of Mitchell of Toronto and Betty A few short weeks later Amanda chose what Wedman Edmonton mother of Alex. Mitchell who she identified as the sole avenue to end her lived with muscular dystrophy and Alex took their personal torment. Grief was global. The teenager own lives. Mitchell it is suspected because he who had displayed one flash card bearing the couldn’t bear facing an alleged tormentor in juve- words “I have nobody. I need someone”, became nile court and Alex perhaps because he wearied everyone’s child, sister and friend. Well, almost completely of physical assaults to which Betty There’s Alex and his father Walter. Alex is par- is Alex Walter. father his and Alex There’s ticularly struggling because not only has he been been he has only not because struggling ticularly because also but bullying, consistent to exposed as school Columbia British same the attended he other each know didn’t they While Todd. Amanda and acquaintances mutual had they personally, Aman- of known he had perhaps, if wonders, Alex reach to able been have might he distress, da’s out to her and help. and prosecuting the bullies. A message repeated repeated A message bullies. the prosecuting and issue. the with familiar parents by regularly

Betty Wedman publicly challenges bullying as as bullying challenges publicly Betty Wedman Craig Wilson is proud of his son. Mitchell Mitchell son. his of proud is Wilson Craig ernet has compounded the bullying problem. Some social networking sites are engaged to taunt, belittle taunt, to engaged are sites networking social Some problem. bullying the has compounded ernet

are insufficiently engaged in protecting the bullied bullied the protecting in engaged insufficiently are and school administrators who Betty maintains Betty who maintains administrators school and an issue, bullies themselves, as well as politicians politicians as well as themselves, bullies issue, an Mitchell was allegedly attacked. attacked. allegedly was Mitchell combat his MD. It was during one of those walks walks those of one during was It MD. his combat maintain a degree of physical fitness required to fitnessrequired physical of a degree maintain difficulty take daily lengthy walks in order to order in walks lengthy daily difficulty take refused to submit to his disability. He would with with would He disability. his to submit to refused says her son was subjected. was son her says

CBJ SAYS

The Int The commit suicide. to people young fragile emotionally already and urge

NOVEMBER 2012 The Canadian Business Journal 21

Walter (a pseudonym) is sufficiently worried her son. Unwilling to accept either admonition or about his son’s safety that he quit a well-paying platitudes she challenges vague policy all the way job in order to be available at the end of the to the premier’s office. school day in the event Alex (also a pseudonym) After one particularly compelling on air ex- might require Dad’s protection. Walter and Alex change I was contacted by the press secretary speak of just such a day. Alex was followed for the Ontario Minister of Education. The Min- from school by a taunting mob and tells of one ister was interested in Lynne MacIntyre’s story. youth initiating a physical confrontation outside The Minister wished to speak with MacIntyre Alex’ family home. When Walter joined the fray, and engage her in some manner in the McGuinty pushing the attacker away from his son, the government’s planned attack on bullying. Accord- crowd’s reaction was initially to taunt. That was ing to MacIntyre the interest from the Ministry was before the criminal assault charge was laid. A short-lived, the commitment similarly temporary. charge dismissed only days before the sched- The Internet has compounded the bullying The Internet has compounded the bullying problem. Some social networking sites are engaged to taunt, belittle and urge already emotionally fragile young people to commit suicide. uled court date. problem. No longer is gratuitous aggression limited Walter insists the school administration as to name calling and push and shove engagements well as the original police officer detailed to pro- boomers would recognize. Today social networking vide support offered little of significance to pro- sites are engaged to taunt, belittle and urge already vide protection for Alex or consequences for the emotionally fragile young people to commit sui- alleged bullies. cide. At a time in life when peer acceptance can be Lynne MacIntyre is the Ontario mother of 15 critical to self-image such repeated assaults may year old Mac. Mac, says Lynne, has never had had eventually bear unwelcome fruit. a friend. Bullying is Mac’s only consistent child- This column would be incomplete without a hood memory. An attempt at arranging a birthday word for bullies. No statistics or mental health party for Mac resulted in not one invitation receiv- professional quotes though. Instead, it’s the expe- ing the courtesy of a reply. Mac was eight at the rience Bradley, a former bully. These are Bradley’s time. MacIntyre is a determined champion for words from a recent email. - One day in the fall while walking home from from home walking while fall the in day One school with my brother I saw my favourite tar favourite my I saw brother my with school hat. boy’s the I stole as watched brother My get. throw to him told and brother I tossed my it to and reluctantly but in joined brother My it back. of kind this like didn’t He stopped. eventually the holding boy, the taunting around I ran game. kept it. He reach couldn’t he where air the in hat and more I felt angry and more and more getting picking of bored grew finally I When powerful. more “I had many targets, but one in in one but targets, many had “I

particular was my favourite. There There favourite. my was particular of ahead grades several a boy was

than me. powerful being able to pick on someone older older someone on pick to able being powerful push and trip him and call him names. I felt so so I felt names. him call and him trip and push ment. I would follow him around the school and and school the around him follow I would ment. extremely easy to bully and I relished every mo- every I relished and bully to easy extremely very small and had a high pitched voice. He was was He voice. pitched a high had and very small me. Because of a physical disability the boy was was boy the disability a physical of Because me. berating they receive at the hands of their tormentors. at the hands of their tormentors. receive berating they CBJ SAYS the constant shreds due to to torn is and fearful; their self esteem isolated Victims of bullying feel NOVEMBER 2012 The Canadian Business Journal 23

on him I threw his hat to the ground and stomped control. To the bullies, I urge you to remember on it. I laughed at him as he collapsed on the grass that toying with the lives of those who are weaker and started crying. is not the way to happiness. Eventually you will The next day the boy didn’t come to school. I push too far and live with regrets about things felt giddy thinking perhaps I had scared him away. you wish had never happened.” A couple of days passed and still he did not return. Bradley, you see, wasn’t always a bully. He Then a week. Then more. Eventually I forgot about had been a bullied child before deciding to turn the boy. I had many more targets to choose from. the tables. Perhaps a month after the incident an an- Bradley is 23 years of age. Amanda Todd nouncement was made that the boy had passed was but 15; Alex Wedman 17 and Mitchell Wil- away. Apparently due to some complication with son 11. The son of the police officer who called his disability his heart had given out. Inside me I to share his child had threatened bullying relat- felt something break. All of this happened the day ed suicide is 8. CB after I had really tormented him. Was I the cause for his death? Roy Green is host of The Roy Green Show, a I admitted what I had done to my parents. national program heard weekends on Corus Radio. They were disappointed in me, but assured me Follow Roy on Twitter @theRoyGreenShow. I had nothing to do with the boy’s death. I didn’t believe them. I don’t know if I do even today. Everything changed for me then. I stopped bullying. To this day I regret my actions, in particular toward that little boy whom I tormented every single day.” For the bullied Bradley has this advice. “It eventually does get better. Don’t make the mistakes I did. Try to feel less helpless and more in 024 Smart Cities of the Future By Tina Kremmidas 024 Smart Cities of the Future By Tina Kremmidas 26 Smart Cities of the Future

Cities are a primary driver of economic growth, innovation and opportunity. They are powerful magnets for highly skilled and educated workers and gateways for new immigrants. They are centres of business, generators and suppliers of financial capital, important trade hubs for both goods and services, and the focal points of global commerce. They house substantial infrastructure assets and major institutions that power regional prosperity and the nation's quality of life.

Despite all their advantages, cities confront significant challenges. The scale and pace of urbanization is straining physical infrastructure, fiscal capacity and natural resources. Mass urbanization is challenging institutions and governance structures that often lack the capacity and flexibility to respond to fast-paced growth. Many cities around the world are incorporating Mass urbanization is challenging institutions and governance structures that often lack the capacity and flexibility to respond to fast-paced growth. “smart” initiatives to ensure sustainable urban development. They are actively deploying information Smart Cities of the Future and communications technology to reduce energy New Songdo City near Seoul, South Korea is consumption and waste, make better use of re- perhaps the most ambitious smart city project newable energy, manage traffic and transportation currently underway. The mostly privately financed systems intelligently, monitor how infrastructure project is being constructed on reclaimed land. performs, deliver services much more efficiently Smart homes are at its heart. Front doors, and enhance citizens' access to government. lighting, air-conditioning, heating, security sys- NOVEMBER 2012 The Canadian Business Journal 27

Mass urbanization is challenging institutions and governance structures that often lack the capacity and flexibility to respond to fast-paced growth.

tems and even blinds and curtains can be con- Fibre optic broadband threaded throughout the trolled by electronic devices such as smartphones, city connects residents and sends a constant data PCs, tablets and touch-screen pads. Residents stream to the computer processors that help oper- have access to teleprescence units for video confer- ate Songdo. Sensors in the roads measure vehicle encing friends and family, businesses, government loads, adjust traffic measures and dim the LED-lit offices, hospitals, schools, shopping centres and streets when no one is around. Radio frequency banks. identification tags on cars send location data to 28 Smart Cities of the Future

The best-known smart city in the world may be Masdar City, a planned development in Abu Dhabi in the United Arab Emirates. The government is organizing the project, but many local and international firms are helping with the plan.

a central hub, identifying black spots and tweak- The entire city is being built on a platform. ing signals to ease congestion. Power companies Below the platform sits the smart infrastructure — monitor the use of electrical appliances to better a Personal Rapid Transit system (driverless pod- understand how residents use energy and set the shaped vehicles powered by solar electricity and grid to adapt. guided by magnetic sensors), a Light Rail Transport Rainwater traps and recycled grey water from system, utility services, waste management and sinks and dishwashers dramatically reduce the recycling facilities, and a fibre optic network for need for fresh water. Refuse is automatically col- communications. lected by a network of vacuum pipes. One of the levels below the city’s platform will The best-known smart city in the world may be accommodate a Freight Rapid Transport system Masdar City, a planned development in Abu Dhabi that will operate on a dedicated magnetic guide- in the United Arab Emirates. While the Abu Dhabi way and will make up to 5,000 trips per day deliv- government is organizing the project, many local ering goods to the city’s businesses and residents. and international firms are helping design and plan There will be no need to dig up city streets to the city. undertake repairs — all infrastructure hardware will NOVEMBER 2012 The Canadian Business Journal 29

be easily maintained via full height access points solar energy and other renewable energy sources under the city’s platform. Electronic sensors will (wind, geothermal and hydrogen power). It will use notify of service problems and faults. 75 per cent less energy than a similar sized city of Eighty per cent of water used in the city will be typical construction. recycled, with grey water used for crop and land- scaping irrigation. Storm water will be collected in Existing Cities are More Challenging pools. Grand designs are possible only when building a Above the platform the city will showcase city from scratch. Retrofitting existing infrastruc- many kinds of green technology — in its energy-ef- ture with smart technologies can be complex, ficient buildings, its production systems, its educa- disruptive and expensive. tional and research institutions, its open spaces Some cities are undertaking smart revitaliza- and recreation areas. The city will rely entirely on tion initiatives, one step at a time.

The Amsterdam Smart City, a public-private joint venture, is held up as the example of how to retrofit a city, step-by-step, to fuel sustainable economic growth and a high quality of life. 30 Smart Cities of the Future

Rio de Janeiro is making use of smart technologies to achieve significant operational efficiencies. In December 2010, it inaugurated its city operations centre, a system that fully integrates data from 30 city agencies, all under a single roof.

The Amsterdam Smart City, a public-private electric cars; solar panels have been installed on joint venture, is held up as the example of how Amsterdam’s historic townhouses; infrastructure to retrofit a city, step-by-step, to fuel sustainable upgrades allow households to sell energy from economic growth and a high quality of life. Busi- small-scale solar panels and wind turbines back nesses, government, research institutions and the to the city’s electricity grid; data on energy con- people of Amsterdam have partnered to develop sumption is sent to consumers via mobile phones; the metropolitan area into a smart city. smart meters have been installed in hundreds of Thirty projects, focusing on energy transition businesses and homes; billboards are powered and open connectivity, have been launched: 300 by solar energy; and sea vessels can hook up to power hook-ups have been installed to recharge shore power stations that allow green energy to NOVEMBER 2012 The Canadian Business Journal 31

and other problems. By leveraging real-time information, they are able to anticipate problems, coor- dinate available resources and respond quickly. In addition to using all the information gath- ered to manage the city, the data is shared with the population on mobile devices and social networks so they can better manage their daily lives. It may come as a surprise that Stratford, a very small city in Southwestern Ontario, tops the global charts in the smart city category. In 2012, for the second year in a row, the Intelligent Community Forum ranked Stratford as one of the top seven cities in the world for creating uniquely powerful innovation ecosystems on a foundation of information and communications technology. With an underground fibre optic grid already in place, in 2010, Stratford completed deployment of a high-performance wireless network to meet energy conservation objectives as well as provide replace noisy, polluting diesel generators. high-speed connectivity to the entire community Rio de Janeiro is making use of smart tech- to increase inclusiveness and stimulate economic nologies to achieve significant operational efficien- growth. The city now has the digital infrastructure cies. In December 2010, it inaugurated its city of a major metropolitan area. operations centre, a system that fully integrates Its smart metering initiative is helping the city data from 30 city agencies, all under a single roof. and its customers reduce both electricity con- City employees work quietly in front of a giant wall sumption and utility bills. Energy consumption of screens monitoring video that streams in from data is collected and transmitted to end-users subway stations and major intersections. A map wirelessly in real time. Customers can adjust their signals locations of car accidents, power failures schedules to take advantage of off-peak, lower 32 Smart Cities of the Future

It may come as a surprise that Stratford, a very small city in southwestern Ontario, tops the global charts in the smart city category. Pictured is City Hall. Photo by Wikimedia Commons

rate periods during the day and night. It also helps service providers who deliver the services to the to reduce the potential of brownouts during peak Stratford community. This also provides the city usage hours. with an additional revenue stream. The network is publicly-owned and managed Technology companies—both domestic and in- by the city’s data infrastructure company (Rhyzome ternational—are using Stratford’s high-speed wire- Networks) and its electrical utility (Festival Hydro). less network and underlying fibre optic grid to pilot Both are wholly owned by the City of Stratford. technology. Mayor Dan Mathieson said that “these Rhyzome rents fiber and wireless broadband ca- companies have discovered in Stratford a forward- pacity on the network to local carriers and internet thinking populace, creative business culture, and NOVEMBER 2012 The Canadian Business Journal 33

leading edge infrastructure offering manageable dishes, where creative types and entrepreneurs size, with enough critical mass to yield meaningful rub up against each other, combining and recom- results, yet scalable for global markets.” bining to spark new ideas, new inventions, new The University of Waterloo recently opened businesses and new industries.” a satellite campus in Stratford with a focus on When it comes to building the smart cities of digital media. The Waterloo Stratford Campus is the future, partnerships are the key to success. one of the anchor hubs in the Canadian Digital The private sector can be a source of funding, Media Network, a national Centre of Excellence ideas and innovation. It can work with local gov- for Commercialization and Research. Stratford is ernments to deploy and integrate advanced infor- now the centre of a four-hospital regional partner- mation and communications technology that will ship. Some of Canada’s largest banks have located help cities achieve maximum performance and critical data, IT and loan processing centres in the sustainable economic growth. It can also provide community. for real-time oversight and management of proj- Stratford’s experience highlights that cities ects. Public-private partnerships are even more that embrace innovation—including smart tech- important in this era of tight government budget nologies that enable well-functioning and efficient constraints. CB environments for their citizens and businesses— can position themselves to thrive. They can attract Tina Kremmidas is the Chief Economist of the talent, new business development and investment Canadian Chamber of Commerce and significantly increase their competitiveness.

In Summary Until the mid-twentieth century, the study of economic growth largely revolved around firms and nations. Little emphasis was placed on the importance of location. Economic thinking has progressed considerably since then. Richard Florida, one of the world’s leading urban studies theorists, wrote that cities “act as giant petri Transformation to Save Canada Post Transformation to Save Canada Post By Angus Gillespie 36 Transformation to Save Canada Post

It’s plain to see that recent years have been somewhat hostile to Canada Post, a Crown corporation that has existed in one form or anther since our country’s confederation. Not so far back as the dinosaur, but some of the policies that governed the service had become markedly dated, especially over the past decade. The corporation took on the name Canada Post in the 1960s and was officially rebranded in 1981. Up until that point, it was officially known as the Post Office Department. The Canada Post Group of Companies is com- prised of Canada Post and its three non-wholly owned subsidiaries: Purolator Inc., SCI Group Inc., and Innovapost Inc. There are a total of 69,000 Finance Minister Jim Flaherty recently stated he’d like to see Canada Mortgage full and part-time employees, including 54,000 at and Housing Corp. privatized. Similar Canada Post, which had revenue of $5.9 billion in such talk has been mentioned regarding Canada Post, although it’s not clear how 2011. However, there was a loss for the first time serious the government may be. in 16 years. Now the question is whether it was an anomaly or a serious precursor and an omen for As our global society continues to race through the foreseeable future. this new digital era where numerous technologies It has been widely acknowledged that a major of today will be ancient history by tomorrow, just transformation was necessary in order to return trying to stay at the front end of the curve is a Canada Post to a profitable position on an annual daunting task for many enterprises. Successfully basis when president and CEO Deepak Chopra establishing a business model that can meet the addressed the matter in his message within the needs of tomorrow’s customer within an accept- 2011 annual report. The changing landscape able timeframe will be the difference between became evident a number of years ago and there success and extinction. have been attempts at following a new charted NOVEMBER 2012 The Canadian Business Journal 37

course. The first noticeable corporate facelift zine and posed nothing but a nuisance threat. came with the major equipment upgrade at the People simply wouldn’t carry such large, bulky national service starting in 2007 with much of the hardware items with them. But the invention of existing infrastructure in a sorely outdated state. the slim, lightweight tablet on the other hand is “Equipment was becoming obsolete and a whole different story. The tablet is commonly we needed to move to a more efficient process referred to as being at the cutting edge of elec- to handle the mail and the second part was to tronic substitution and is something Hamilton says prepare for the future with more parcels and less Canada Post has been aware of for some time. mail,” says Jon Hamilton, Director of Communica- “Postal services around the world are strug- tions at Canada Post during a telephone conver- gling with the same types of issues in terms of sation from Ottawa. mail dropping off,” Hamilton concedes. “Online With letter mail declining each year at a rapid gives and takes away; and that’s where ecom- rate, Canada Post does have Purolator in the bat- merce has not just changed business for us, tle with other logistics companies such as FedEx, it’s changing the landscape for major retailers; UPS and DHL. But in order for the parcel business for mom and pop shops, and we’ve seen it for to increase, Canada Post is going to have to take a while but it’s really starting to come true now a substantial number of customers away from the where the decline in mail has sped up so that’s competition, which will be easier said than done. going to cause issues at Canada Post, obviously.” “In the last five years we’ve seen a 20 Canada Post is clearly looking towards ecom- per cent per address decline in letter mail,” merce as a way to help it remain relevant into the Hamilton confirms. future and most particularly from the business to consumer aspect. The corporation has invested Technology: The Game Changer more than $2 billion to upgrade mail sorting fa- A major turning point really came with the advent cilities in Toronto, Montreal and Vancouver, with of tablets, which makes reading emails and other the latter’s location a 700,000-square-foot facil- forms of correspondence that much easier. The ity at the Vancouver International Airport with the personal computer and laptops were never really primary objective of increasing packaging traffic able to duplicate the role of a newspaper or maga- for the Asia-Pacific region. 38 Transformation to Save Canada Post

The desire for Canada Post is to generate Leading logistics companies such as FedEx, enough parcel business to consumers in what DHL and UPS consistently do exceptionally well on stands to be a fierce battle with numerous estab- surveys when it comes to customer satisfaction, so lished national logistics companies. that’s a weakness which is going to be extremely “Ecommerce is still relatively in its infancy in difficult for Canada Post to try and exploit. Canada,” Hamilton states. “We lag behind the As just one example, FedEx Corp. tells The U.S. and U.K. The latest figures show it’s about an Canadian Business Journal it expects to have its $8 billion business in Canada and it’s expected busiest day in history on Monday, Dec. 10 when it to grow to $16 billion by 2016.” moves a projected 19 million shipments through Those figures are estimates, which may or its global ground, express and freight networks. may not be realized in the next four years. If For the overall holiday season between the U.S. so, it will mean a larger share of the pie for all Thanksgiving and Christmas, FedEx forecasts companies involved in this type of business. more than 280 million shipments to move through That potential growth would in fact offer Canada its worldwide shipping networks. This would be Post a genuine opportunity to return to profit- a year-over-year volume increase of more than ability, especially since more than 40 per cent 13 per cent compared to 2011 when 247 million of all packages delivered in Canada today are shipments were processed. That’s the activity handled by Canada Post employees. of just one company, so the competition for the “You can go with any of our competitors, but if consumer market is monumental. you’re not home at a certain time or you ask that “Where most people would look at our it be sent somewhere else because you can’t be network and see a liability, it’s a huge potential home, that could be an inconvenient location out because nobody’s ever going to put 6,000-plus at an airport or an industrial mall,” Hamilton says. retail locations out there; nobody’s going to build But once again, it comes down to price. Not a network that delivers to every single Canadian only does the Crown corporation need to keep and every single day,” Hamilton says. “Canada Post enhance its customer base, but it needs to do so is not funded by the taxpayer. We pay for our much more cheaply. Reaching all destinations is operations and obligations with the revenue we great – but at what cost? generate through our products and services.” NOVEMBER 2012 The Canadian Business Journal 39

With letter mail declining each year at a rapid rate, Canada Post does have Purolator in the battle with other logistics companies such as FedEx, UPS and DHL.

Recent Losses million in revenue due to a labour disruption. It That may be the case right now, but with a stagger- was a tough year on top of the pension obligations ing loss of $327 million last year, it stands to reason and the dropping mail volumes.” that wouldn’t be so for very long, even if far more The rapid and continuous annual decline in modest losses were to continue in the coming years. letter mail has greatly eroded the ability of Canada “Last year there was a number of factors that Post to remain profitable in recent years. In fact, went into that loss,” Hamilton says. “There was a they’ve endured heavy losses, including the $10 pay equity decision; clearly that’s not going to hap- million announced in the previous quarter. If there’s pen on an annual basis and we lost at least $200 a trickle of good news it’s that the hemorrhaging 40 Transformation to Save Canada Post

Canada Post is clearly looking towards ecommerce as a way to help it remain relevant into the future and most particularly from the business to consumer aspect.

actually was down from the same quarter a year also noted that the union’s demands would cost earlier when losses came in at a staggering $18 almost $1.5 billion over four years. The long-term million. But there are those who would argue the impact of that strike is still unknown. $8 million improvement this time around had more “We are trying to reduce costs and restructure to do with the fact there was a labour strike. The for the future. We understand that we’re a Crown workforce accounts for the largest percentage of corporation and we don’t want to be a burden on Canada Post’s expenses – about 71 per cent. the taxpayers while being financially self-sufficient,” During the strike by almost 50,000 letter carri- Hamilton offers. ers, the Canadian Union of Postal Workers wanted Mail is currently a $3.2 billion revenue business a four-year contract with wage increases of 3.3 for Canada Post or about 54 per cent of the entire per cent in the first year and 2.75 in years two and intake; parcels are $1.3 billion. three. Canada Post responded by saying the union “We know we need to transform a business was out of touch with the obvious financial chal- that was largely built to deliver lots and lots of lenges, which at the time included a 17 per cent mail to being able to deliver some mail and par- drop in mail volume since 2006. Canada Post cels.” Hamilton notes. “The goal is to ensure we NOVEMBER 2012 The Canadian Business Journal 41

FedEx Corp. tells The Canadian Business Journal it expects to have its busiest day in history on Monday, Dec. 10 when it moves a projected 19 million shipments through its global ground, express and freight networks.

can turn this ship around by reducing our costs Of concern is just how long this transformation and growing the business where it makes sense is going to take before Canada Post rebounds from and not stepping out side of our core business. the deep red and into the black. It’s acknowledged We’ve been delivering parcels since the 1850s.” that precise timing is not possible, but there seems One of the first internal matters to address to be no firm timeline for the public to grasp onto. will be working closely with the unions in order to It’s said Canadians have not been put on the hook reduce labour costs, which now accounts for well for a single dime up until now. That won’t necessar- over two-thirds of expenditures. ily hold true if this transformation does not achieve “Obviously that has to come down,” Hamilton the desired success. Pension obligations are a agrees. “We need to continually look at our opera- constant concern and will be a growing factor as tions to drive efficiencies that are there.” time goes by and with that in mind, Canadians have The entire product mix is changing and good reason to be concerned about the outcome. because of that Canadians are expecting to see The cost of overall operations at Canada Post different results and that include a streamlined also increased by about $85 million last year. It’s corporation that returns to profitability. a figure Hamilton confirmed but he did not have 42 Transformation to Save Canada Post

The rapid and continuous annual decline in letter mail has greatly eroded the ability of Canada Post to remain profitable in recent years. In fact, they’ve endured heavy losses, including the $10 million announced in the previous quarter.

the information in front of him to indicate what the responded when asked about the prospect of root causes happened to be. It could be dismissed privatization. “Our mandate is to serve Canadians as minor in a $6 billion-plus operation, but none- and to remain financially self-sufficient.” theless it accounts for a 6 per cent hike at a time Asked what the projections might be for a when the national service can ill-afford it, running return to profitability so the public would have some deeply in the red. sort of idea when the turnaround may occur, based on this elaborate transformation process, Hamilton The Future wouldn’t provide one. There have been rumblings that the federal “I’m not going to lay out a timeline,” was government would look towards privatization for the response. Canada Post, but it’s a subject that is far from But Canadians grow weary of hearing about being decided. However, Finance Minister Jim grandiose plans that appear to have no finish line or Flaherty recently made mention he’d like to see at least not one that is openly shared. Given that the Canada Mortgage and Housing Corp. privatized, taxpayer is the one and only shareholder, it seems so anything is possible, and much will depend on logical such a plan would be open in that regard. In the ability for a financial turnaround. the end, it’s results that count and we see those in “That is up to the shareholder,” Hamilton the quarterly reports. Plans mean nothing without NOVEMBER 2012 The Canadian Business Journal 43

One of the first internal matters to address will be working closely with the unions in order to reduce labour costs, which now account for about 71 per cent of all expenditures.

successful execution. For now it seems nothing but had somebody else delivering parcels and some- the “trust us, things will improve” scenario. body picking up the mail. Clearly that’s not going It’s also no doubt true that consumers love to work. We now have delivery agents.” having convenience – up to a point. Ultimately, Hamilton says there are about 3,000 people the breaking point is cost. It’s not difficult to offer each year set to retire which will help reduce the unmatched door to door service from coast to number of employees, because there is not a need coast while losing money in the process. We’re to be as labour-intensive as in the past. told that won’t always be the case, so apparently “Every single day we’re out restructuring this will all end well. Canada Post is focusing on routes,” he continues. “We go into a volume count how it’s changed its delivery of the mail in order in a depot and then look at the number of routes to streamline costs. we have and realize we don’t need as many routes “We’re about half way through the rollout on because there’s less mail to deliver so we’re going that right now,” Hamilton says. “In the past we to cut 10 to 15 per cent of the routes out of a had one person with the satchel delivering the depot and with attrition with people set to retire mail and we had somebody else dropping off the we can manage that. We’re very much aware of rest of their mail because they couldn’t carry all the financial situation we’re facing.” the mail in their bag as they left the depot. You As are many Canadians. CB Is Social Media A Waste of Time For Your Business? Is Social Media A Waste of Time For Your Business? By Melonie Dodaro 46 Is Social Media A Waste of Time For Your Business?

many still stumble with delusional and convolut- ed attempts to use social media sites like Twitter and Facebook with no strategy in place. So where is the disconnect between businesses and successful social media strategies?

Specific, Actionable Goals Are Needed If the extent of the company plan is to have a random staff member post on Facebook and Twitter once a day with a dash of occasional blogging, time is only being wasted. The plan needs to have clear, specific goals that connect to important metrics within your overall sales funnel. Although measuring sales can be more difficult, there are Melonie Dodaro some extremely important measurements you need to factor in. The social media phenomenon has managed For example: to rocket past “fad” status but businesses who • Is your web traffic increasing? are struggling to get satisfying results are frus- • Are there more subscribers on your trated, often left confused if the medium is right email list? for them. With 91per cent of online adults using • How many people are seeing your social social media regularly, there is a shocking virus media posts? (number of impressions) spreading amongst upper management every- • How many people are engaging with your where that has impaired their better judgment. social media posts? It’s called nostrategitis, derived from the English These are just a few of the important metrics words, “no” and “strategy”. that you need to be measuring to determine the Since when has any successful business ROI of your social media efforts. Frustration from gone into a new venture without a real strategy failure with social marketing always comes back in place? Despite this golden rule of business, to a lack of integration into existing processes. NOVEMBER 2012 The Canadian Business Journal 47

If the extent of the company plan is to have a random staff member post on Facebook and Twitter once a day with a dash of occasional blogging, time is only being wasted. The plan needs to have clear, specific goals.

Use Analytics to Learn More about just getting started and features will only get more Your Audience targeted as they continue to develop over time. There are several ways to measure and monitor the demographics of your audiences online. This type Blogging is Imperative to Social of data was extremely expensive to attain merely Media Success 5-10 years ago but now businesses can access it The importance of blogging is one of the first for next to nothing. strategies that meet resistance, confusion or Not only can you monitor the different areas of misunderstanding when running up the corporate your audience, you can target content and posts ladder. This is a tough pill to swallow for some but to specific genders, age groups, relationship sta- the bullet can no longer be dodged: blogs are not tus, geographical areas and more. Things are only for sales pitches. 48 Is Social Media A Waste of Time For Your Business?

LinkedIn has proven to be four times more effective for B2B than Facebook and Twitter but provides fewer benefits to those in B2C.

Customers buy things because they have potential prospects and many forget this when problems. The things they buy offer them solutions. thinking of blog topics. When a customer seeks out solutions, they don’t Ask yourself questions like: always know what that solution is going to be prior • How can I build trust and loyalty with my to seeking it out. blog content? Blogging allows you to position yourself as • What questions do new and potential cus- the solution your customer seeks before they tomers always ask? have found your product. If your company offers • What problems are my customers trying financial services, you would want to blog about to solve? topics like current trends and investment-related Dull content comes off as spammy through advice. Things that are common knowledge social media and yields no results. Aside from the within an industry can be completely foreign to many SEO benefits (Search Engine Optimization) NOVEMBER 2012 The Canadian Business Journal 49

of regular blogging, it’s one of few reasons any some sort of visible effort. If you aren’t willing to customer or prospect will keep visiting your web- do find and connect with your target market site. The more people that visit your website the online, any other effort is wasted. higher Google ranks your site, not to mention the Social media has permanently changed mar- top of mind awareness you are creating. keting because it has changed the way people consume information. Sadly, the days of saturating Some Social Networks Are A Waste blatant advertisements providing a return are over Of Time as customers embrace a more direct connection to Let’s not sugar coat it – some networks really are brands and companies. Although it might be easy a waste of time. That said, one man’s trash is to see how daunting this can become, keeping another man’s treasure and this is truly the case businesses more accountable gives the ones with with social media. It’s key to understand where truly great products and services the visibility and your customers are spending their time online credit they deserve. and position yourself accordingly. Perhaps that is a change worth embracing

LinkedIn has proven to be four times more after all. CB effective for B2B than Facebook and Twitter but provides fewer benefits to those in B2C. These Melonie Dodaro, founder of Top Dog Social are things your team needs to be aware of when Media helps business owners, sales teams and tackling your social media strategy or else you professionals to use social media marketing to will be wasting resources that could have been boost their visibility; attract new customers and allocated elsewhere. increase their revenue. Dubbed by the media as If there is no one on the team that can put Canada’s No. 1 LinkedIn expert and social media in the time to be engaging with potential leads, strategist, she’s also a highly sought after social customers and prospects, you need to hire some- media speaker and trainer. Grab her free spe- one else to do it. To give you some perspective cial report called The New Rules of Marketing at on missed opportunities, 70 per cent of brands http://TopDogSocialMedia.com. are currently ignoring complaints on Twitter while 83 per cent of people who complained and got a response were thrilled with the business making 050 Cost-Saving Border Enhancements a Big Victory for Canadian Business Doing business with our neighbours to the south is going to be a much smoother process in the near future after the Canadian and U.S. governments agreed to implement two action plans that will speed up the movement of both people and goods — a procedure that could save Canadian companies billions of dollars on a yearly basis based on early estimates.

The Action Plan on Perimeter Security and Economic Competitiveness sets out a road map for enhancing security while speeding up legitimate trade and travel across the Canada- U.S. border. The Action Plan on Regulatory Co- operation will help to reduce barriers to trade, lower costs for consumers and businesses and align regulatory approaches between the two countries. Both plans contribute to a better managed and more secure border. By removing unnecessary requirements and aligning standards, Canadian and American companies will have greater access on both sides of the border. Canadian companies will also see improvements in rail transport. Now, cargo on trains travelling to the U.S. is screened at the sea port of entry into Canada and again at the land border. This increases costs, delays and 52 Border Security Enhancements

President Barack Obama meets with Homeland Security Secretary Janet Napolitano and Transporta- tion Security Administration (TSA) Administrator John S. Pistole, right, during in the Oval Office, Oct. 12, 2010. (Official White House Photo by Pete Souza)

scheduling uncertainty for rail companies and of two-way trade takes place between Canada and their U.S. customers. When the Action Plan is fully the U.S. Canadian exports to the U.S. support one implemented, the principle of “screened once, ac- in seven jobs in our country, and U.S. exports to cepted twice” will apply. This approach will not only Canada support some eight million jobs in the U.S. strengthen the management of security and other risks from offshore but will streamline Canada-U.S. NEXUS Improvements border crossings as well. Steven Fletcher, Minister of State (Transport) and By 2013, pilot projects will be launched that John Pistole, Transportation Security Administra- will assess and examine inbound marine cargo at tion’s Administrator, recently announced the ex- Prince Rupert and Montreal. If successful, these tension of the U.S. TSA Pre✓™ (pre-check) lanes year-long pilots will be made permanent and pos- to Canadian NEXUS members, making air travel sibly expanded to other locations. smarter and faster within the United States. In a typical year, more than $500 billion worth As of November 15, Canadians who are mem- NOVEMBER 2012 The Canadian Business Journal 53

an effort to strengthen transportation security through risk-based methods,” says Pistole. “The inclusion of Canadian NEXUS members in TSA Pre✓™ is an important step in further harmonizing the security screening process between the U.S. and Canada.” NEXUS is a joint program between Canada and the U.S. for pre-approved travellers to simplify border crossing while enhancing security. When travelling by air, NEXUS saves time by allowing members to use automated self-serve kiosks. The extension of this program is a result of the Beyond the Border Action Plan announced earlier this year by Prime Minister Harper and American President Barack Obama. The announcement also supports border bers of the NEXUS program travelling within the initiatives under the Economic Action Plan, which U.S will be able to use their NEXUS cards for expe- aims to create jobs and growth in Canada and dited screening at 27 participating U.S. airports. the U.S. by improving the flow of people between “The Government of Canada and the United our two countries. States are delivering on commitments to include Canadians looking to apply for NEXUS to take Canadian NEXUS members in designated TSA advantage of the benefits can do so by going on- ✓ Pre ™ lanes as part of the Beyond the Border Ac- line to www.nexus.gc.ca. CB tion Plan,” says Fletcher. “This will mean smarter and faster air travel for Canadian NEXUS members traveling within the U.S., while maintaining a high level of aviation security.” “TSA is committed to expanding TSA Pre✓™ benefits to a growing passenger population in

Justin Trudeau Liberal Saviour or Celebrity Dud? By Angus Gillespie

Desperate times call for desperate measures. The sagging fortunes of the federal Liberal party have sunk so precipitously low during the past few years that they are no longer the official opposition in Parliament, relegated to a humiliating third position behind the NDP and in need of a giant leap upwards just to reach the top of the political roadside curb.

A number of staunch supporters of the once mighty big red machine admit the wheels fell off after two disastrous leadership reigns by Stephane Dion and Michael Ignatieff, neither of whom seemed able to connect with the Ca- nadian public on a level necessary to win trust. One came off as weak; the other arrogant and all-knowing. Such characterizations may not be fair or even true, but perception is a very powerful tool in the political arena and is most often difficult – if not impossible – to reverse after it’s gained any sort of momentum in the public realm. 56 COVER FEATURE Justin Trudeau: Liberal Saviour or Celebrity Dud?

Justin Trudeau seen here entering a rally in Hamilton soon after officially declaring his candidacy for the Liberal leadership position. CBJ Photo

For quite some time the door has been wide Joining the Race open for a fresh face successor to take charge It was early last month when Trudeau made the and lead the rudderless Grits back to respectabil- official announcement that he would be seeking ity. Despite the leadership convention still being the leadership with the ultimate goal of going months away, it’s evident the Liberals already head-to-head against incumbent Conservative have their man in Justin Trudeau, the soon to be Prime Minister Stephen Harper to head the coun- 41-year-old son of one of Canada’s most famous try. However, Trudeau’s decision was rather anti- prime ministers, the late Pierre Elliott Trudeau. climactic as many knew he would be making the This could represent new beginnings for the Lib- run months earlier. It became plainly apparent erals, or wind up being just another nightmare, when it was learned interim leader Bob Rae had depending on whether he has any substance contacted Trudeau about his intentions, knowing beneath that well-polished outer surface. full well he couldn’t beat his much younger and NOVEMBER 2012 The Canadian Business Journal 57

“I want to be leader of the Liberal party, not some sort of hybrid, semi-ideological formation. The NDP is an ideological party of the left and the Conservatives are an ideological party of the right. We’re a pragmatic centrist party.”

– Justin Trudeau, shooting down the idea of amalgamation with the NDP

more popular opponent. If the NDP skeletons Justin Trudeau has publicly stated it will be in his closet weren’t enough to convince him to a single party battle, as opposed to a quick fix bow out of the race, the Trudeau factor certainly of reuniting the left in a merge with the NDP; provided the clincher. that’s an idea that flies directly in opposition to Trudeau has been in the political spotlight for his plans. The Canadian Business Journal was on less than five years. He narrowly secured victory hand as Trudeau made his way through the south- in his riding of Papineau, Que. defeating Bloc ern Ontario cities of Burlington and Hamilton and Quebecois incumbent Vivian Bardot in 2008 but he touched on a number of topics, including the widened his margin considerably in last year’s question of amalgamation with the NDP. election, knocking off NDP candidate Marcos “I don’t think it’s an interesting idea,” Radhames Tejada with Bardot relegated to third. Trudeau rejects outright. “I know I have chosen The next generation Trudeau acknowledges to run for the Liberal party of Canada because he’ll face a tough task of rebuilding the once- I plan on running 308 candidates across the powerful party if he wins the leadership contest country in the next general election – if I am and will be faced with many different obstacles granted the opportunity to lead this party. I want than what stood in the way of his father when to be leader of the Liberal party, not some sort he first came to power as Liberal leader and of hybrid, semi-ideological formation. The NDP is prime minister in 1968, with Lester Pearson an ideological party of the left and the Conserva- stepping down. tives are an ideological party of the right. We’re 58 COVER FEATURE Justin Trudeau: Liberal Saviour or Celebrity Dud?

“All my life people have said ‘we love you because of your father’ or ‘we dislike you because of your father.’ I’ve had to sort of shrug and say ‘thank you’ or ‘no thank you’ to each one, but not allow it to define me.”

– Justin Trudeau on creating his own separate identity Supporters of the Liberal party believe Trudeau can lead them back to power. Critics say he’s far more celebrity than politician. CBJ Photo

a pragmatic centrist party that is ready to take much of a leadership race for the Liberal party – from the left or the right, depending on what it’s his to take. actually works.” “It’s going to be a mountain of work, but I think it is also a real opportunity,” Trudeau told a Appealing to Supporters media scrum. “It is politics as usual that is mak- There were several hundred people on hand ing people incredibly cynical. They don’t trust when Trudeau made his way to the Sheraton politics in general. They don’t trust their politi- Hotel Ballroom in downtown Hamilton in what cians. If my candidacy has generated the kind was then just his second week on the campaign of interest that it has, it’s not just about me. It’s trail. Of note was that Trudeau focused most of very much about people saying ‘Wow, can we get his attention on the ruling Conservatives and someone who is unequivocal? Who speaks for all Stephen Harper – a sure sign he, like many corners of the country?”’ others, are already convinced there won’t be Trudeau carries a strong air of confidence NOVEMBER 2012 The Canadian Business Journal 59

Pierre Elliott Trudeau, centre, seen here shortly after winning his riding in 1965. Three years later he became prime minister. Wikimedia Photo

and charisma with each stride he makes and terms of entering a leadership race, with an ulti- statement he utters, but there are a consider- mate goal of being prime minister, is the amount of able number of Canadians who believe he short- time it will mean being away from his wife Sophie tracked his way to success thanks to his father’s and two young children. name. It’s a notion the son does not take kindly to. There’s no doubting Trudeau’s enthusiastic, “All my life people have said ‘we love you be- energetic charisma and perhaps he needs more cause of your father’ or ‘we dislike you because time to get acclimatized to the environment he’s of your father,’” Trudeau shoots back. “I’ve had to now catapulting himself into. But at some point sort of shrug and say ‘thank you’ or ‘no thank you’ in the very near future people are going to what to each one, but not allow it to define me. I tried to hear more than the safe speeches and ‘we to define myself through my career with a lot of can do better’ statements and actually get down hard work.” to policy and what makes him unique from other One of the biggest drawbacks for Trudeau in politicians including those within his own party. 60 COVER FEATURE Justin Trudeau: Liberal Saviour or Celebrity Dud?

One of Trudeau’s biggest obstacles will be getting beyond the fame and notoriety of his late father. CBJ Photo NOVEMBER 2012 The Canadian Business Journal 61

“The Liberal party from time to time still falls into the trap of saying ‘people will wake up and come back to us’ but what has that kind of thinking has gotten us?”

– Justin Trudeau on the fading presence of the Liberals

He believes the Liberals still have something to Trudeau also says a reversal of progress offer the average Canadian, but the party has has a number of Canadians worried about what lost its way. the future holds. We’ve all seen the erosion, but what has escaped us is how to effectively turn it Rah-Rah Rallies around. How do we build a stronger Canada? It’s plain to see Trudeau’s intent is to engage the “The key to what makes Canada great is the middle class, which is where he believes the Lib- middle class,” he says. But that’s a statement eral party had its roots and needs to re-establish quite likely to be uttered by each party leader, that bond which has been noticeably absent for from Prime Minister Stephen Harper to NDP lead- some time now. er Thomas Mulcair and on down the line. Regard- “It’s about what’s happening in the middle,” less of whether you have $,1,000 or $10 million he says. “Hard working Canadians who are finding in your bank account, everyone gets a vote – and it harder to get by on salaries that just don’t seem there are no doubt lots more Canadians who can to be increasing enough; debt load that’s increas- more closely relate to the $1,000 bank account. ing; costs that are rising and people wondering for Talking about regaining the middle class is the first time in generations if perhaps their kids a common-sense rally cry because that’s where aren’t automatically going to have it slightly better the numbers are. But in order to achieve that goal than we have it now.” some ideas and policy need to be put on the table. 62 COVER FEATURE Justin Trudeau: Liberal Saviour or Celebrity Dud?

“Stephen Harper put a big X over Quebec and the Atlantic provinces,” Trudeau chortles. “He’s playing up to one industry and promising others that the wealth will trickle down. It doesn’t work. And the NDP has decided that being the flip side to Stephen Harper is their best path to power and they got someone who’s put an X over Alberta and has decided to run in Ontario and Quebec.” “Who will speak for all of Canada and who will speak to all of Canada?” Trudeau asks. “Un- fortunately we’ve gotten to a place where we’ve forgotten that, where the Liberal party is some- how waiting for Canadians to wake up and realize that Mr. Harper just isn’t a very nice person and therefore people should vote for the Liberal again. But I don’t want to engage with the politics of personality. I think attacking people individu- Deborah Coyne, who had a daughter with Pierre ally is not the way to go in politics as much as I Trudeau, may run against Justin Trudeau for the disagree with Stephen Harper. Someone recently leadership role. Wikimedia Photo looked at all the media coverage and said ‘Justin, Stephen Harper must be really afraid of you’. But out some form of amalgamation. Times have Stephen Harper is not afraid of me – Stephen changed, and to Trudeau’s credit, he acknowl- Harper is afraid of all of you.” edges that aspect and realizes what happened Putting on a brave face is indeed part of the yesterday has very little to do with what will hap- process to launching a successful comeback pen tomorrow. Getting back to the grass roots is for a party that once held a huge power base necessary, along with some hard work. from coast to coast. But in the past decade it’s “The Liberal party from time to time still falls been eroded to the point some political analysts into the trap of saying ‘people will wake up and wondered whether it could even survive with- come back to us’ but what has that kind of think- NOVEMBER 2012 The Canadian Business Journal 63

ing has gotten us? In 2000 we had 170 seats; the election after that we had about 130; the elec- “There’s a large number of tion after that 100; the election after that 77; the Canadians who don’t follow election after that – this past one – 34. I’m sorry, politics very closely and so but that’s a straight line and it ends up in the next they don’t have a very strong election – because I’m not losing Papineau. ” information base and often Refusing to be pinpointed with an obvious left fall for celebrity.” of centre political dynamic, Trudeau takes a more diplomatic approach and says it’s about making – Peter Graefe, associate professor, the best decisions for Canadians. McMaster University “As we move forward we need to make sure we’re drawing on whatever works,” he notes. “I don’t care whether it comes from the left or the right as long as it’s based in evidence and facts upward jolt, but it’s not sustaining. Recent polls and actually works to help us live and achieve our indicate that Trudeau’s announcement of enter- values and help us thrive.” ing the leadership race immediately vaulted the Liberals ahead of the NDP. Unfortunately, that Testing Trudeau’s Mettle may say a lot more about the average voter than Trudeau says it’s going to take his leadership to anything else. prove that the Liberals are once again a party that There had been scuttlebutt that Dalton Mc- is serious about governing and earning the trust of Guinty might be looking to challenge Trudeau Canadians. for the national leadership, but those rumours Up until now, the son of Pierre Trudeau and were quashed when the outgoing Ontario premier Margaret (nee Kemper) has been seen by many stated outright he would not be seeking the nomi- as being long on celebrity but short on sub- nation. McGuinty has said remaining on as pre- stance. It’s a perception that is hard to argue be- mier until the end of January will be a full time job cause, to date, he’s not provided any real meaty and he wouldn’t be able to orchestrate a proper dialogue with which to grab hold of and generate federal campaign, on the assumption he even discussion. Name recognition helps for a brief wanted to do so. McGuinty would have been seen 64 COVER FEATURE Justin Trudeau: Liberal Saviour or Celebrity Dud?

Former astronaut Marc Garneau is another leadership candidate, but is not considered much of a threat to beat Trudeau. Wikimedia Photo as a significant challenger to Justin Trudeau if for relationship between his father and Deborah no other reason than to force discussion on policy Coyne, who is a candidate to run against Justin for and leadership. The Ontario leader will be replaced the national leadership. That means young Sarah at the provincial Liberal party convention in Toronto Elisabeth may get to watch her mother and half on Jan. 25. Ironically, one of Trudeau’s campaign brother go at it in the political arena. You just can’t strategists is a man named Gerald Butts, who make this stuff up. formerly worked as an adviser to McGuinty. Rae and Ignatieff were one-time college roommates. Strategic Movements Trudeau also has a half sister, 21-year-old Sarah The greater issue for the federal Liberals is not Elisabeth Coyne, who was born during a 1990s literally that McGuinty has bowed out; they want NOVEMBER 2012 The Canadian Business Journal 65

“Trudeau kind of spat on both the Conservatives and the NDP, but then we have to ask, ‘well what’s the answer Justin?’. Either there’s a problem there or there isn’t. You have to have some kind of vision on these debates.”

– Peter Graefe, associate professor, McMaster University

to ensure their next national leader has all the of content,” states Peter Graefe, political sci- qualities necessary to bring them out of political ence assistant professor at McMaster University. purgatory. The resurrection must be strong but “There’s a large number of Canadians who don’t there is a relatively large faction of Liberals who follow politics very closely and so they don’t have are not so quietly questioning whether or not a very strong information base and often fall for Trudeau is the man to be at the focal point after celebrity.” all the hype and hoopla dies down. There are also “It’s hard to say how the Liberals feel. Maybe those who want to see Trudeau’s mettle tested by they want candidates that don’t have too much a tough opponent within the party to determine policy out there so the Conservatives don’t have how he withstands aggressive competition, rather a chance to ramp up their ads on things that are than finding out too late that he’d be no match for said in a leadership race. One of the dangers Stephen Harper. Just handing the Golden Spoon for a party in a leadership race is that you play to the Chosen One could be a colossal mistake, to the base of the party which isn’t necessarily and many Liberals strategists know it. Three the same group that you have to reach out to if strikes and they may be out for good. you’re going to win an election.” “I’d agree that there hasn’t been a whole lot One of the key problems facing Trudeau will 66 COVER FEATURE Justin Trudeau: Liberal Saviour or Celebrity Dud?

they want to run a bit closer to the ruling Harper Conservatives – is that they’re going to be saddled with a bunch of promises that play to the base.” It would seem as if Trudeau wants to keep his powder dry until he knows who the other candidates are. If he comes out making strong statements he may paint himself into a corner. Other than Coyne, who’s intentions on running are not yet 100 per cent clear, there has been no other major name step up to formulate a challenge thus far. Former astronaut Marc Garneau is a possible candidate although he hasn’t really made much of an impression as a political on the national stage. Getting back to McGuinty, Graefe isn’t surprised his name won’t be on the ballot. “I really don’t think he was looking at the federal stage to be honest,” Graefe reveals.

Winning the Liberal leadership should prove to be “Being the premier of the province of Ontario is the easy part for Trudeau. Beating Stephen Harper probably a much more exciting proposition than on the other hand will be extremely difficult. Wikimedia Photo going to become the leader of the third party in Parliament. People sometimes ask the same be distancing the Liberals from the NDP, because questions about Roy Romanow. Saskatchewan there are times when it’s quite frankly difficult to seemed too small a pond for him; he wanted to tell the difference. be a national leader but never was willing to step “I think where the Liberal party is right now is up to run the NDP because he knew he was go- probably not that far from the NDP in terms of the ing to be the third, fourth of fifth party in Parlia- base of the party,” Graefe states. “So if you have ment.” a leadership race with a lot of content, the danger It’s definitely not clear at this point that the Lib- from a Liberal strategist point of view – where eral party is going to win the next federal election NOVEMBER 2012 The Canadian Business Journal 67

by any means, and so candidates must ask them- to have some kind of vision on these debates.” selves do they really want to be out in the wild for a “He seems to me to be a bright person but number of years waiting for a potential opportunity someone who hasn’t been forced to actually down the road. deal much with the real world at least in terms of Graefe brings up good reasons as to why the having to have a consequential view of how the Liberals may want to see a solid challenger to world works. I don’t get the sense he’s ever been Trudeau, other than to test his strength as a leader. pushed to develop that.” “They want to sell memberships and build The Liberal leadership convention to replace upon riding associations and if you have a chosen Michael Ignatieff is slated for April 14, 2013 in heir and no real race you don’t have candidates Ottawa, although Bob Rae has been serving as going out trying to sign people up and you don’t interim leader since Ignatieff left the political have the local organizations to get people to vote. stage following a crushing defeat at the hands of If there’s a race, you’re in the media. If it’s a fore- Stephen Harper and the Conservatives. It’s al- gone conclusion, you quickly fall out of it.” ready clear who will win next April. What happens

We’re in a tight economic and financial situ- afterwards will be the interesting part. CB ation in this country and there’s real questions and concerns as to what the business and political strategy should be moving into 2013. Part of the content in Trudeau’s launch speech included Dutch disease and whether natural resource development is creating problems for the manufacturing sector with the government saying one thing and the NDP saying another and Trudeau seemingly agreeing with neither side. “Trudeau kind of spat on both the Conserva- tives and the NDP, but then we have to ask, ‘well what’s the answer Justin?’” Graefe notes. “Either there’s a problem there or there isn’t. You have Small Business Section Small to Mid-Sized Enterprises are the Backbone of the Canadian Economy. Small Business Section Small to Mid-Sized Enterprises are the Backbone of the Canadian Economy.

Quick Stats by the numbers:

• 1-4: the number of employees in a micro enterprise • 5-100: the number of employees in a small business • 101-499: the number of people in a medium-sized business • 500+: constitutes a large business • 1.2 million: the approximate number of SMEs in Canada • 5.2 million: the number of Canadians working for SMEs • 48: the percentage of Canadians working for SMEs • 2.8 million: Canadians who are self employed • 115,000: the most new small business startups in one calendar year (2005) • 100,000: the largest number of small businesses that went defunct in one calendar year (2006) • 85: the percentage of small businesses with Internet access (stats from 2007, most recent available) • 42: percentage of the country’s private sector GDP that comes from small business

Sources: Statistics Canada and Industry Canada 070 Canada-EU Trade Agreement Beneficial to Small Business By Angus Gillespie 070 Canada-EU Trade Agreement Beneficial to Small Business By Angus Gillespie

Laura Albanese, MPP, York South-Weston; Ontario Minister of Economic Development Brad Duguid; Federal Minister of International Trade Ed Fast; and Mellow Walk Managing Director, Andrew Violi. 72 SMALL BUSINESS Canada-EU Trade Agreement Beneficial to Small Business

Minister of International Trade Ed Fast

Small and medium-sized enterprises (SMEs) in Toronto. The ministers detailed an ambitious are at the heart of Canada’s economy and as Canada-European Union trade agreement that will such the need to open up international markets directly benefit small and medium-sized enterprises. through trade agreements is critical for our country’s economic growth, which directly translates EU Partnership into more jobs for Canadians. The EU is Canada’s second-leading trading partner As part of Small Business Week, The Canadian and the world’s largest integrated economy, with Business Journal recently attended a joint partner- more than 500 million consumers and a GDP of ship event between the federal government and more than $17 trillion. The ongoing trade nego- the Ontario provincial government in the promotion tiations with the EU represent Canada’s most of small business nationwide. Federal Minister of significant trade initiative since the historic North International Trade Ed Fast and Ontario Minister of American Free Trade Agreement, which came to Economic Development Brad Duguid were on hand life 25 years ago in 1987. at Mellow Walk, a safety and comfort shoe factory “Our government’s top priority is job creation NOVEMBER 2012 The Canadian Business Journal 73

“Representing 98 per cent of all firms in Canada and employing nearly half of all working Canadians, small and medium-sized businesses are the backbone of our economy.” – Ed Fast, Minister of International Trade

and growing the Canadian economy,” Fast told kets,” says Duguid. “Opening up markets through many onlookers, including about 50 workers at trade agreements like the proposed pact with the Mellow Walk. “Representing 98 per cent of all European Union is crucial for our economic growth firms in Canada and employing nearly half of all and the creation of more jobs and prosperity.” working Canadians, small and medium-sized busi- The manufacturing sector is a key economic nesses are the backbone of our economy. That is driver throughout Canada. In Ontario it accounted why we are helping SMEs expand and succeed by for 12.4 per cent of the province’s total GDP in opening new markets abroad as part of the most 2011 and employed about 795,000. Workers and ambitious trade expansion plan in Canadian history, businesses that produce various industrial prod- which includes a comprehensive trade agreement ucts in Ontario’s manufacturing sector, including with the European Union.” chemicals, plastics and tools, would benefit from A trade and economic agreement with the a Canada-EU trade agreement. In 2011, Ontar- European Union is expected to bring a 20 per cent io’s manufacturing exports totalled nearly $8.2 boost in bilateral trade and a $12 billion annual billion. Current EU trade barriers on Canadian increase to Canada’s economy. That translates to manufactured goods would be reduced by such an increase of $1,000 to the average Canadian an agreement, directly benefiting businesses and family’s income, or 80,000 new jobs. workers in the sector. “Small and medium-sized companies are at the “As Canada seeks to conclude a trade agree- heart of our economy, and our government knows ment with the European Union, there is great that the key to success is access to global mar- potential for new market opportunities for SMEs,” 74 SMALL BUSINESS Canada-EU Trade Agreement Beneficial to Small Business

“As Canada seeks to conclude a trade agreement with the European Union, there is great potential for new market opportunities for SMEs.” – Dan Kelly, president, CFIB

borders for economic growth,” Fast told CBJ. “Our opportunities for the most part are engag- Dan Kelly, President and CEO, CFIB ing with new market opportunities around the world. We’ve made excellent progress moving notes Dan Kelly, president and CEO of the Cana- forward with the trade agreement. What often dian Federation of Independent Business. “While stands in the way is tariff and non-tariff bar- about half of SMEs engage in international trade, riers; what a trade agreement will do is elimi- 5 per cent – or 5,000 of our member businesses nate most if not all of those trade barriers.” – currently trade with Europe. By reducing tariffs, Fast went on to say he hopes the federal gov- costs and other barriers, a trade agreement with ernment can conclude negotiations by the end of the European Union will make it easier for more this calendar year with both sides bringing a high small businesses to take advantage of opportuni- level of ambition to the table. ties in the EU market.” “We’re down to that bucket full of tough According to a 2011 CFIB survey, more than issues that are remaining and we’re working half of all respondents said they planned to very hard to try and resolve those over the next increase the amount of their trade with the EU several months.” within the next three years, something Minister Fast agrees with wholeheartedly. Chinese Potential “It’s pretty clear that both Canada and the Negotiations have been completed on a foreign European Union are looking outside of their investment, promotion and protection agreement NOVEMBER 2012 The Canadian Business Journal 75

situation that envelops many of those EU nations, many small businesses have been left to wonder “As Canada seeks to conclude a trade agreement with the whether their situation would be cause for faster European Union, there is great potential for new market or slower movement when it comes to trade op- opportunities for SMEs.” portunities with Canada. “What I can say is that we have sensed on – Dan Kelly, president, CFIB the EU side that they believe their opportunities for growth in the short to medium term are outside the Eurozone because they’ve got so many between the federal government and China, which structural challenges that their opportunity to is our second largest trading partner and so it’s grow their economies relies on exporting to new crucial that Canadian investors look to China as markets around the world,” Fast replies. “In an opportunity to expand their investment portfo- Canada we have a similar view – our significant lio. Fast says the agreement puts in a clear set of opportunities are outside Canada, which is why rules in which investments are made and a clear this is an opportune moment in which to expand set of rules for resolving disputes, which have our trade relationship with the EU and put in been known to happen all too often when dealing place an economic framework agreement that with the Chinese. really works for both sides.” “We’ve also released the results of a comple- The United States always has been Canada’s mentarity study between Canada and China, primary trading partner and that’s not going to which shows some of the areas of our respective change. But the need to diversify and send our economies where we complement each other goods to other countries will make us more resilient and perhaps where we can reach into a deeper and less dependent on one close ally. framework agreement,” Fast remarks. “We “I’ve made it clear time and time again that haven’t decided to proceed yet because we want the United States is, and always will be, our larg- to make sure we have due diligence.” est trading partner,” Fast confirms. “It’s our most Where Europe is concerned, there has been trusted trading relationship. That said, some time a four-year economic downturn which has been ago Canadians recognized that we can’t put all widely reported on. Because of the dire financial of our eggs in one basket; we’re looking to diver- 76 SMALL BUSINESS Canada-EU Trade Agreement Beneficial to Small Business

“I’ve made it clear time and time again that the United States is, and always will be, our largest trading partner. That said, some time ago Canadians recognized that we can’t put all of our eggs in one basket.” – Ed Fast, Minister of International Trade

sify and expand trade opportunities around the of world-class agricultural products in the lucrative world. That’s why we’re not only engaged with EU market of 500 million consumers. the EU; we’re negotiating a trade agreement with India and Japan and have entered into the Electronics Trans-Pacific Partnership negotiations and we’re Exports to the EU have been averaging $1.3 bil- talking to Thailand, our largest trading partner in lion each year between 2009 and 2011. Current Southeast Asia.” EU tariffs on Canadian electronics average 3 per Numerous key sectors within our borders cent, with peaks of 14 per cent. These high tariff would benefit from an ambitious Canada-EU trade barriers would be eliminated under an ambitious agreement. They include: Canada-EU trade agreement. The elimination of these tariff barriers would Agriculture increase sales in the lucrative EU market. Products are a significant exporting sector for the province to the EU, with exports worth an average Chemicals and Plastics of about $500 million a year between 2009 and It’s a sector worth an average of $1.1 billion 2011. Additionally, an agreement would lock in annually between 2009 and 2011. Current EU permanent duty-free access on key interests, such tariffs on chemicals and plastics average 4.9 per as oilseeds and pulses. cent. These tariff barriers would be eliminated Eliminating tariff barriers would increase sales with an agreement. NOVEMBER 2012 The Canadian Business Journal 77

Ministers Ed Fast (left) of the Canadian government and Brad Duguid of the Ontario government listen to Mellow Walk Managing Director Andrew Violi.

Industrial Machinery the EU totalled almost $173 billion in 2011, ac- Exports have been worth an average of $533 counting for more than 25 per cent of Canadian million between 2009 and 2011. Current EU direct investment abroad. The same year, direct tariffs on industrial machinery average 2.1 per investment from European companies in Can- cent with peaks of 8 per cent. ada totalled almost $161 billion, representing 26 per cent of total foreign investment in this Services country. Major investment areas include: agri- In 2010, the EU’s services import market to- culture; automotive; financial services; renew- talled $1.4 trillion. Current EU trade barriers on able energy; transportation; and information Canadian services are citizenship or residency and communications technology. requirements, lack of temporary entry rules, and ownership and investment restrictions. Government Procurement Workers employed in fields such as engineering, Investment greater access to the EU’s procurement market,

Direct investment by Canadian companies in which is worth an estimated $2.4 trillion. CB Small Business Success Stories By CBJ Staff Small Business Success Stories By CBJ Staff 80 SMALL BUSINESS Small Business Success Stories

It’s estimated that about 5.2 million Canadians work for small businesses, or about 48 per cent of the entire national workforce.

Small and medium-sized business defined as small businesses, or about 98 per enterprises are at the very heart of what cent of all employer business ventures in helps drive the Canadian economy, the country. Small business is responsible but often there is confusion as to what for generating about 42 per cent of all constitutes a small business. According private sector GDP. to Industry Canada, employing one to four people is what’s known as a micro- It’s estimated that about 5.2 million Canadians enterprise; five to 100 employees is a small work for small businesses, or about 48 per cent business and 101 to 499 workers is a of the entire national workforce. About 42 per medium-sized business. Any company with cent of employed Canadians work for enterprises 500 or more employees is defined as a large with fewer than 20 employees. About 2.8 million business. The total number of registered Canadians are listed as being self employed. Not employer businesses in Canada is about surprisingly, the biggest obstacle to success is 1.2 million. Of that, about 1.1 million are most often cash flow. NOVEMBER 2012 The Canadian Business Journal 81

Two successful entrepreneurs shared their “There must be a genuine stories about becoming a successful entrepre- commitment to employee neur at the Toronto Board of Trade: Peter Oliver, development so that the employees who is one half of Oliver & Bonacini Restaurants, feel you are on their side. Our and Rick Segal, founder and CEO of Fixmo. biggest strength is the extent to which our employees are engaged in Peter Oliver making the company successful. Oliver & Bonacini Restaurants is the brainchild of business partners Peter Oliver and Michael Bo- – Peter Oliver, co-owner Oliver & nacini, whose venture together in 1993 resulted Bonacini Restaurants in the unveiling of Jump on Bay St. in Toronto. During the past two decades, Oliver & Bo- into the company’s portfolio. With further expan- nacini’s restaurants have sprouted up in grow- sion ahead, Oliver & Bonacini standards of food ing numbers, each exhibiting the success of the and service excellence remain the main focus of chain. Included are such well-defined establish- the company’s vision. ments as Canoe, one of Canada’s most cel- Peter Oliver was born and raised in Cape ebrated dining experiences in downtown Toronto, Town, South Africa, moving to Canada in 1967 Auberge du Pommier, serving impeccable French to attend Montreal’s McGill University. He had a cuisine for over 22 years, Biff’s Bistro, a modern successful career in stock brokerage and com- Parisian eatery, and Oliver & Bonacini Café Grill, mercial real estate sales before opening his first with locations in Bayview Village, Blue Mountain, restaurant in 1978. In addition to running Oliver Oakville and Waterloo, Ont. The successful part- & Bonacini Restaurants, Oliver is the founder ners also backed their long-time pastry chef David and chief fundraiser of The Stephen Leacock Castellan in his dream of opening SOMA Chocolate- Foundation, a successful children’s charity which maker in Toronto’s Historic Distillery District. has raised more than $4 million over the past 10 In 2008 Oliver & Bonacini became the ex- years for underprivileged children in South Africa. clusive service provider at the Toronto Board Born and raised in South Wales, Bonacini of Trade, First Canadian Place, bringing over attended chef school in Britain, apprenticing 30,000 sq. ft. of newly renovated event space under Anton Mosimann at the Dorchester Hotel 82 SMALL BUSINESS Small Business Success Stories

“I’m not a big fan of guys that come in and tell me about Wharton, Harvard and all the MBA nonsense. It overshadows the core of who the person is. You’re not defined by your education. You’re defined by who you are. The best hires I’ve ever gotten come from Craigslist.”

– Rick Segal, CEO of Fixmo

effective management; operational excellence; superior training and development; continuous Peter Oliver improvement and the combination of momentum, mental energy, discipline and hard work. before moving to North America. He began in the “What is important is that you have the U.S., travelling extensively to promote “cuisine discipline to make sure that what you say, you naturelle”. In 1985, he moved to Toronto as Ex- actually do,” Oliver says. “There’s no magic bullet ecutive Chef at the Windsor Arms Hotel. He was out there. Let’s just do what we say we’re going Executive Chef of Toronto’s top restaurant, Cen- to do.” tro, when he met Peter Oliver in 1993, and their “I say to our managers if we can score a 9 or partnership has continued since then. a 9.5 out of 10 on each one of these values, we At O&B, Bonacini directs all creative and culi- will be successful,” he continues. “The only way nary operations, and oversees all new restaurant to do that is through employee engagement.” expansion projects. When Oliver & Bonacini hires new employees Oliver says his company has a basic set of to its current roster of 1,200, Oliver meets with values that are always adhered to by everyone them in groups of eight to 12 for five hours as within the business. They include: inspired quali- part of an orientation session. ty; intelligent, enthusiastic and emotional service; “There must be a genuine commitment to NOVEMBER 2012 The Canadian Business Journal 83

employee development so that the employees Do that and you’re going to see a successful feel you are on their side. Our biggest strength is enterprise. the extent to which our employees are engaged in making the company successful. I call that Rick Segal enlightened management.” Fixmo is a risk management company that helps Oliver admits that this approach is something organizations identify, mitigate and manage the he had to learn over time. risks associated with mobile devices in the work- “When I first started I had a real reputation place. Prior to launching Fixmo, CEO Rick Segal for being a tough SOB,” Oliver frankly states. “I was a partner at JLA Ventures, a large Canadian had very little patience.” Venture Capital fund. He was also president and It was about 12 years ago when Oliver com- CEO of Microforum, a leader in providing integrat- pletely changed his managing style and he says ed e-business solutions in a wide array of indus- it was one of the most poignant moments of his try verticals. From 1992 to 1996 he worked as business life. An employee suggested he enroll director of technical services for the Internet Cus- in a course put on by a non-profit organization tomer Unit at Microsoft in Redmond, Wash. Segal called the National Training Laboratory. has authored of four books on network manage- “My particular course was Human Interaction ment and Windows software development. Laboratory,” Oliver reveals. “It was an intense “I moved to Canada in 1999 and can tell you one week course and I had never learned so it’s the best place in the world to do business much about myself and other people. It changed without exception,” Segal says. “The support you my life.” get from the Canadian government, provincial Oliver took much of that emotional one-week governments and things like the Board of Trade – course with him and came to realize that each it is phenomenal.” one of his 1,200 employees had their own indi- It was in 2009 when Segal began working on vidual story and is capable of doing more with a business plan for what amounted to be Norton the company and their lives. It’s all a matter of Utilities for Mobile. He got his inspiration after com- applying oneself. In business, he says the main ing in contact with a hysterical woman in a coffee task for managers is to create momentum and shop, who was upset because she had accidentally ensure each employee is engaged in the process. deleted photos of her grandfather from her RIM 84 SMALL BUSINESS Small Business Success Stories

BlackBerry who had just recently passed away. agreements and shipped software to The White “There’s no trash can on the BlackBerry; House, the American Secret Service, the folks in there’s no undelete,” Segal notes. “So I wrote Ottawa and No. 10 Downing Street (home of the a utility for the device that watches your calen- British Prime Minister). All of that I could not have dar, so 30 seconds before a meeting starts your afforded but Canada did that for us.” phone will go into silent mode and 30 seconds Segal also says Canada took the initiative after the meeting is over it will go back. Why? to contact every single embassy to inform them Because every single time I would go somewhere of this great Canadian company with excellent people’s phones would go off. If it’s your wife it mobile security software. The advice was to get can override it – I’ve been married 30 years, I military attaches to speak with government of- know how to write software,” Segal laughs. ficials and meet with Fixmo. Segal put together about 25 utilities and “All of the embassies did this and they sent used CrackBerry.com. us an email of all the trade ministers and military “We launched the product and had 150,000 attaches for every embassy in Canada,” Segal beta customers,” Segal reveals. The customer states. “We’ve been doing sales directly on that service department consisted of Segal and an- list for two years.” other worker, answering queries 24/7. In a very short period of time Fixmo has raised “We then made an insightful decision – peo- $37 million in capital. Motorola has become a ple will pay for this software; and we found out strategic partner with Motorola Solutions. We have people won’t. For most people, the threshold for former NSA officer who are now on our board.” an app on a mobile device is about $2; $4.99 if Segal says there are some very basic rules to it’s enterprise software.” follow when starting up a business and a lot of it Segal says it was Canada that made his com- has to do with checking your own ego at the door. pany successful, and was willing to offer proof. His first rule is that you should always hire people “Canada hosts and sponsors trade shows,” smarter than you and then get out of the way. he says. “They had technical shows and we went Otherwise your corporate ceiling ends with the to all four of them and it cost me a grand total of limitations of your own knowledge base. $5,000. We met members of the NSA (National “The number one fatal mistake every single Security Agency) and since then have signed entrepreneur I’ve ever met who’s failed is they hired NOVEMBER 2012 The Canadian Business Journal 85

Rick Segal, CEO, Fixmo

dumber people than them because they didn’t nonsense,” Segal candidly says. “It overshadows want another person to outshine them,” Segal says. the core of who the person is. You’re not defined by “It’s also known as ego. Big, big mistake.” your education. You’re defined by who you are. The The main job of an entrepreneur is to open a best hires I’ve ever gotten come from Craigslist.” path and let the smart, creative people move as Segal’s message is he doesn’t care about far and as fast as they can, unfettered, with the whether an individual has a degree or what obvious assumption of responsible planning and the person allegedly can do. He wants to see execution. Segal says it’s also important to allow what a person can do. If you can do it – you’ll employees to make mistakes. He also believes be hired. CB that people should be defined by who they are, not what letters come after their name. “Without trying to piss off most business people, I’m not a big fan of guys that come in and tell me about Wharton, Harvard and all the MBA 086 Entrepreneurial Spirit in Canadian Baby Boomers 086 88 SMALL BUSINESS Entrepreneurial Spirit in Canadian Baby Boomers

“There are many benefits to being a small business owner, and this is clearly on the minds of boomers across the country.” – Dan Demers, Vice President, TD Canada Trust

Results were collected between September 26 and 28 of this year. “There are many benefits to being a small business owner, and this is clearly on the minds of boomers across the country,” says Dan De- Dan Demers, VP, TD Canada Trust mers, Vice President, TD Canada Trust. “While thorough planning, access to finances, hard work F or Canadian baby boomers, the road to retire- and passion are a must for all business owners, ment may take a planned detour along the way with there are specific considerations boomers should a number of them making a stopover as a small think about before starting a small business at business owner. Whether starting freelance consult- this stage in their life.” ing work, buying a franchise or opening a specialty business, a recent TD Canada Trust survey found Reasons for Working 54 per cent of boomers have either started or have According to the research, the top reasons boomers considered starting a small business prior to retire- consider starting their own business before retir- ment. As of now, 15 per cent have gotten the start, ing include 58 per cent saying they would like to with 39 per cent seriously contemplating the idea. be their own boss. Having the opportunity to make TD Bank Group commissioned Environics more money was key to 53 per cent and having Research Group to conduct an online omnibus a sense of personal achievement or pride was a survey of 1,000 Canadians 18 years of age or factor for 50 per cent of them. older, with 426 who are considered part of the Of the boomers who’ve thought about opening baby boomer generation (born 1946 and 1964). their own business, 67 per cent say it would be a NOVEMBER 2012 The Canadian Business Journal 89

Focus on financing for your small business: “There are many benefits to being a small business owner, and Whether you are just starting out or looking this is clearly on the minds of boomers across the country.” to grow your business, cash flow – including access to capital and credit – is critical for – Dan Demers, Vice President, TD Canada Trust success. Start by accurately projecting start- up costs and business expenses and learning about the financing solutions available to you – new venture outside of their current field of work. from an operating line of credit or small business The survey also found that boomers believe the mortgage to government grants. greatest challenges to starting a small business Make a plan: Whether taking on consulting would be securing finances, taking on additional work to earn additional income during retirement debt, finding new business or clients and balancing or realizing a lifelong dream of owning your own business and personal finances. store, start by setting your goals. Next, develop a To help navigate challenges and find success, business plan. While the plan can be scaled de- Demers offers advice to boomers considering pending on the type of business you want to start, opening their own small business: every plan should include a business model, finan- Consider your personal finances: While boom- cial plan, long-term vision and short-term goals. ers may be more established financially, it’s no Know your options: About one-third of boom- wonder that financial concerns top their list of ers see work/life balance as being a challenge small business challenges. Not only will most for small business owners, so look for banking boomers have less time to reach their financial services that help save time and money. Choose goals, they will also need to balance saving for accounts that provide flexibility and conve- retirement with investing in their business. That’s nience, while helping to cost-effectively manage why it’s important to have a full understanding of monthly transactions. your financial situation and how it fits with your Plan to retire: It’s never too early for small small business strategy. Look at your credit rating, business owners to plan for retirement. Whether personal debt, mortgage payments and retirement selling your business, handing the reins to an em- savings, as well as the financial situation of your ployee or family member or simply winding down spouse if you have shared assets or debts. your work, having a succession plan can help 90 SMALL BUSINESS Entrepreneurial Spirit in Canadian Baby Boomers

“Whether you are just starting out, need to overcome a specific challenge or want to create a succession plan, take advantage of the advice and services that small business advisors from your local bank have to offer. – Dan Demers, Vice President, TD Canada Trust

ensure the continued success of your business, or While the results of the survey may come help you get the maximum value for your business. somewhat unexpectedly, Demers states it could Demers adds that access to financial knowl- be a huge positive, not only for the individuals who edge and resources can help make the most of want to engage in the entrepreneurial spirit, but for your small business. the overall betterment of the Canadian economy. “Whether you are just starting out, need to “I believe it is a very exciting thing because overcome a specific challenge or want to create we’re looking at a very dynamic group of individu- a succession plan, take advantage of the advice als who are very experienced in the Canadian and services that small business advisors from economy who are going to continue to contribute your local bank have to offer.” hopefully and share intelligence and knowledge. I think if the survey happened five years ago, Helping the Economy Grow most would have said ‘no, no’ I’m just going to The fact so many boomers either want to become retire,” Demers laughs. their own bosses – through choice or necessity – is Demers is of the belief there are some definitely a surprising statistic according to Demers. individuals in this age range who simply want to “Specific surveys of the same kind haven’t keep working and have always had the desire to been done in previous years but we were definitely be their own boss. But he doesn’t discount the surprised with the numbers,” he admits. “I think fact there are likely a number of boomers looking it’s reflective of some of the economic realities of to open their own business because they need some of the boomers that are facing retirement.” to from an economic standpoint, perhaps not NOVEMBER 2012 The Canadian Business Journal 91

According to research, the top reasons boomers consider starting their own business before retiring include 58 per cent saying they would like to be their own boss.

having as much money coming in from their own are young and dynamic and are looking at doing retirement savings and/or a company pension things that are very different from what they’ve plan leaving them uncomfortable with what may done in their career.” be a shortfall. “If you look at the survey, one of the things “I also think there are a number of individu- that really popped out was that two-thirds of the als who were lucky and have worked in areas, individuals we surveyed said they would do some- be it the public or private sector, where there are thing different in a different sector in a different good pensions and they feel they’ll be able to area than what their career was, which speaks to generate a decent revenue out of retirement but the interest and passion and areas of education 92 SMALL BUSINESS Entrepreneurial Spirit in Canadian Baby Boomers

Focus on financing for your small business: Whether you are just starting out or looking to grow your business, cash flow – including access to capital and credit – is critical for success.

that they may not have touched as part of their “We will see these businesses much more career which they have as a background.” stable and sound in terms of their financial re- “The odds are much higher for continued quirements because they will understand cash success for these businesses that are started flows,” Demers notes. with individuals that have working experience, knowledge, managerial experience, so they Future Results should be in much better shape to ramp up their Given this is the first year of the survey, future business and maintain it. annual results will divulge just how successful It’s very different than someone who has no these boomers are in their new ventures. But managing experience and starting a new busi- Demers says longevity is not necessarily a gauge ness in their early 20s – maybe has some money for success or failure. to inject in the business but is going to learn “Some may say ‘I’m going to do this for three or about running a business as they are doing it four years and I’ll just shut down and stop consult- versus these individuals who probably have 30 to ing and I’ll go to full retirement’,” Demers states. 40 years experience in either the business sector According to statistics, 50 per cent of small or other areas. businesses in Canada survive more than five years. NOVEMBER 2012 The Canadian Business Journal 93

“If you look at the survey, one of the things that really popped out was that two-thirds of the individuals we surveyed said they would do something different in a different sector in a different area than what their career was.” – Dan Demers, Vice President, TD Canada Trust

Within this sector of boomers looking to get into the In the past few years small businesses have world of entrepreneurism Demers feels the percent- been growing. In 2011, they added a net of age may be similar but the reasons for it will be dif- 21,000 new employees, which to a large organi- ferent than the national view. With the boomers it’s zation may not be a large number, but it is with much more likely to be based on personal choice small business, where many of these enterprises as opposed to businesses running out of a life cycle only employ three or four people. and failing to be successful financially. The good news for boomers looking to start This survey takes into account executive man- a business is that age has very little to do with agement, including presidents and chief execu- whether or not they are able to secure financing tives, because as Demers notes, even they would from a financial institution – it’s far more about say that they had bosses to answer to, so being the business plan as opposed to age. accountable to nobody but themselves would be “The important first thing is the business plan an enticing proposition for them as well. and how the cash flow looks,” Demers reveals. More than one million small businesses in “It’s a matter of looking at a five-year plan and Canada employ Canadians, and the products and how cash flow will look. The injection of cash or services it creates results in a significant portion capital into the business will also be looked at.” of our country’s gross domestic product. There “There is a different personal profile than are an additional three million Canadians that are someone that is younger and hasn’t built any capi- self employed. The contribution to the annual GDP tal or equity in their home and so on, so I would is in the range of 35 per cent. say the profile of an individual starting a new 94 SMALL BUSINESS Entrepreneurial Spirit in Canadian Baby Boomers

About one-third of boomers see work/life balance as being a challenge for small business owners, so look for banking services that help save time and money.

business that is a boomer who has more savings, Another obvious resource for individuals maybe some retirement income, in addition to a looking to do research on the prospect of being house that’s paid or almost paid is a different risk an entrepreneur is through online assistance. profile than someone that is brand new.” “We know that boomers, as their kids leave “We recommend having an accountant and home, have a lot of time to spend online and there making sure the tax implications are very well are numerous banking sites to help small busi- looked at as a critical piece, especially for boom- nesses look at different scenarios,” Demers says. ers who may have other assets and other con- If you are thinking about heading down this siderations to keep in mind,” Demers suggests. route, it’s essential to set yourself up with a fi- “They want to be sure their business is protected nancial adviser or planner to ensure they have if something happens to them from a health per- the proper risk appetite for the type of venture spective, so all of those pieces, regardless of the they are looking to become part of. It provides complexity of the business, we do recommend you with access to a professional who can people take the proper steps.” advise on how much money should be injected NOVEMBER 2012 The Canadian Business Journal 95

Given this is the first year of the survey, future annual results will divulge just how successful these boomers are in their new ventures.

versus borrowing or other avenues for putting questions of saying ‘why is my business plan not capital into the start-up. working as planned and what do I need to do to “We also see people not respecting their adjust and limit the risks’.” business plan,” Demers states. “They’ll build a Small business owners can also look to online wonderful business plan and cash flow and they resources for additional support. CB continue to inject money, versus asking the hard

First-in-Canada Digital Shopper Marketing Agency Launched By CBJ Staff 98 SMALL BUSINESS

the-art digital technologies – from e-commerce solutions and text message offers to mobile apps, digital signage and more – to enable manufacturers and retailers to connect consumers with brands and products in a real-time positive shopping experience, say the agency’s founders. Digital Connect is the first Canadian agency specializing in digital shopper marketing with the mission of helping retailers and manufacturers create value-added shopping experiences, connect more efficiently with mobile consumers and grow their business. SVM had been looking to get into digital SVM President Stephane Drouin retail marketing for about 18 months recogniz- ing that digital is becoming more and more the Studies are consistently showing the face of norm for a vast number of consumers in the retail shopping is evolving into a brand new marketplace. The Canadian Business Journal frontier and it’s all about digital mobility. spoke with Stephane Drouin, president of SVM, from his office in Montreal. A s of 2012, it’s estimated more than 80 per cent “We were either looking for partners to work of purchase decisions are now being driven out- with or even hire someone to do that,” Drouin side the store, leading retail and shopper market- states. “Last April I was a speaker at retail mobile ing firm SVM of Montreal and digital solutions marketing conference and Dominic Gagnon of Pi- expert Piranha of Toronto to join forces to launch ranha was there too so we both listened to each the first Canadian-based digital shopper market- other’s speech and we sat after the conference ing agency, called Digital Connect. and decided to talk.” Digital Connect, with offices in Toronto and That meeting last April in Montreal is ulti- Montreal, will combine the latest and most inno- mately what led to the development of the new vative shopper marketing strategies with state-of- company. The aim now is to provide a sold blend NOVEMBER 2012 The Canadian Business Journal 99 of technology and marketing with experts provid- “Being a digital expert doesn’t mean ing development in both those key areas. you have the retail sensibility,” “Being a digital expert doesn’t mean you Drouin offers. “That was our biggest have the retail sensibility,” Drouin offers. “That challenge and it was the same for was our biggest challenge and it was the same our clients on the retail side.” for our clients on the retail side.” “We’ve done a couple of surveys on our own – Stephane Drouin, president of and every day there is new research coming out SVM from either the United States or Europe or even Canada that just reinforces the fact that consum- term that began to surface earlier this year. In ers’ path to purchasing is more and more blurry the past people would do their research online especially now with social media. It’s not only a and find the retailer of their choice and go to the trend; it’s the new reference point.” store and make their purchase. But now with mo- “In this 3.0 era where consumers are on the bile technology it’s the opposite. Now consumers go and truly multichannel, manufacturers and find a product in a store and take out their mo- retailers across Canada can now rely on Digital bile device to do price comparisons to see where Connect to help them conquer the hearts and the best deal awaits. minds of their shoppers, no matter where they “You leverage the brick and mortar store as are,” he says. Drouin and his company joined a showroom to pick your product and then you forces with Dominic Gagnon, CEO of Quebec and go online through mobile or at home to decide Toronto-based Piranha, to create Digital Connect. where you will purchase the product,” Drouin Drouin cites surveys conducted last year that says. Showrooming is a big threat for some demonstrate 59 per cent of smartphone own- retailers especially in sectors where product ers used their device for showrooming last year, inventory is very similar – such as electronics compared to only 15 per cent in 2009. What’s and appliances – leaving consumer purchase more, 15.1 million social media users referred to decisions based on direct price comparisons smartphones, tablets or home computers before between stores. making purchase decisions in 2011, up 29 per In addition, according to a 2012 Mobile cent from 2010. Showrooming is a relatively new Consumer Report, 82 per cent of consumers 100 SMALL BUSINESS

About 15.1 million social media users referred to their smartphones, tablets or home computers before making purchase decisions in 2011, up 29 per cent from 2010.

have their smartphone with them while shopping, innovative value-added strategies that are fused to and of the consumers who scanned or texted for the new reality of the retail world, where consumers more product information; 48 per cent felt better are in physical, social and mobile modes all at once, about their purchase. Digital Connect delivers maximum impact and greater “Mobile is really going to be the new connection returns throughout the entire path to purchase.” with the shopper and I include the tablets in that as Explaining that the U.S. and Europe are currently well,” Drouin states. “There is a significant level of more advanced than Canada in the digital retail world, critical mass of people who use mobile technology Drouin added that, using SVM’s industry-leading and it continues to grow each day. It’s clear that the expertise in shopper marketing, Digital Connect will consumer retail shopping experience and purchase enable Canadian retailers to master the digital fron- decision-making process is rapidly changing, tier and offer consumers a world-class mobile shop- and both manufacturers and retailers need to ping experience. What’s more, Piranha has been at realign in order to connect with customers in more the forefront of connecting brands with the more than effective ways. By deploying creative, targeted and four billion mobile device users around the globe. NOVEMBER 2012 The Canadian Business Journal 101

Showrooming is a big threat for some retailers especially in sectors where product inventory is very similar – such as electronics and appliances – leaving consumer purchase decisions based on direct price comparisons between stores.

“Our expertise combined with that of SVM’s purchase decisions both inside and outside the will enable Digital Connect to truly turn consum- retail environment. ers into buyers and real-time ambassadors of “They had great digital knowledge, but didn’t their favourite brands” Piranha’s Gagnon ex- have the backbone of understanding the cus- plained. “All the while, Digital Connect will deliver tomer and the path to purchase and how to build detailed, efficient and accurate analysis and relevant tools,” said Drouin, noting that shopper performance indicators for each campaign.” marketing is the fastest-growing marketing sector With Digital Connect already having begun in North America. working with several high-level retail clients, Drouin and his partner say consumers are the agency plans to hire 10 new experts in the now in a multichannel era where manufactur- coming year. ers and retailers across the nation can now Consumers are mobile thanks to rely on Digital Connect to help them conquer communications technology, and as such are the hearts and minds of their shoppers. By increasingly relying on digital tools to make developing and deploying creative, targeted 102 SMALL BUSINESS

Digital Connect will offer manufacturers and retailers state of the art technologies in ecommerce, texts, mobile apps and digital signage. NOVEMBER 2012 The Canadian Business Journal 103 and innovative value added strategies that “It’s clear that the consumer retail are fused to the new reality of the retail world shopping experience and purchase where consumers are in physical, social and decision-making process is rapidly mobile modes all at once, Digital Connect changing, and both manufacturers creates maximum impact to generate great and retailers need to realign in order returns throughout the whole path to purchase. to connect with customers in more “Already well known for its best in class ex- effective ways.” pertise and knowhow in shopper marketing SVM, through Digital Connect, wants to enable Cana- – Stephane Drouin, president of SVM dian retailers to master the digital frontier and offer to the mobile consumer the latest and best consumer in a real time winning shopping experi- in mobile shopping experience just as in the US ence. Digital Connect will be an agent of growth and Europe,” says Drouin. for its clients all the while delivering detailed, “For the past five years, Piranha has been on efficient and accurate analysis and performance the forefront of connecting brands with the more indicators for each campaign. The company is than four billion mobile device users around the working with several high-profile clients at the globe,” adds Dominic Gagnon, CEO of Piranha. moment, but Drouin says he’s not currently at lib- “Our expertise combined with that of SVM’s will erty to divulge that information to the media due enable Digital Connect to truly turn consumers to confidentiality agreements. Digital Connect will into buyers and real time ambassadors of their operate as an independent entity from both SVM favorite brands. This will clearly benefit both and Piranha, although it will draw its expertise manufacturers and retailers.” from staff within both companies. CB By combining the most innovative shopper marketing strategies with the latest technologies, Digital Connect will operate as an independent Digital Connect will offer manufacturers and re- entity from both SVM and Piranha, although it will tailer’s state of the art digital technologies such draw its expertise from staff within both companies. as e-commerce solutions, text message offers, mobile apps, digital signage and much more in order to connect brands and products with the 104 CANSIM for Entrepreneurs Put it to Work for You By Eva Bozzato CANSIM for Entrepreneurs Put it to Work for You 106 CANSIM for Entrepreneurs

M aking sense of Statistics Canada’s vast CANSIM1 to search it. Statistics Canada introduced a new database can seem like a daunting challenge for interface to make navigating CANSIM easier. An ordinary small and medium business mortals. After explanation of a few key terms and search functions all, CANSIM is the go-to database government should clear up some of the mystery about what you economists use to retrieve complicated national see in the data tables. A test run, or demonstration, level numbers — the Gross Domestic Product (GDP) of an actual query will reveal CANSIM’s potential for for instance. And, the giant corporations that use almost endless data customization to your business CANSIM can afford to hire statistical specialists needs — in your region, your municipality, and in whose job it is to mine CANSIM data for making some cases, even your community. corporate decisions. So what can it offer you, a The steps are illustrated with screen shots small business entrepreneur, whose first love is from the Statistics Canada website, but you can the daily hands on involvement with running your also make this an interactive experience by follow- business and whose second shift is often devoted ing along with your computer. Try it out for yourself. to paying the bills and tending to invoices late into The CANSIM interface is on the Statistics Canada the night? You have information needs as well. homepage at statcan.gc.ca. Or, just type “CANSIM” You may need to diagnose your growth potential into your search engine. in your market or get an overview of your competition. Perhaps you have already ventured a CANSIM query Where to Begin or two online only to be discouraged by the mysteri- Understanding what’s in CANSIM is a good starting ous data tables that did not seem to have relevance spot. It’s a warehouse of monthly, quarterly or an- to your day-to-day operations. So here’s the good nual social and economic data—the entries number news: National level indicators, such as the GDP, in the millions. CANSIM houses the results of Sta- are based on the compiled, local level data collected tistics Canada’s social and economic surveys. The through Statistics Canada surveys across Canada database is updated daily with survey results as — data that’s relevant to your business and your they are released. customers. With a little practice and help, you can ac- Just as in any well-run warehouse, the contents cess information in the CANSIM database too. are organized by categories, which in this case are Since February 2012, the entire CANSIM da- subject and survey, as indicated by the tabs on the tabase has been free online to anyone who wants “Search CANSIM” page. NOVEMBER 2012 The Canadian Business Journal 107

Select a subject or click on the “Survey” see exactly what might address your information tab to choose from among the surveys that are needs, that’s not a problem. Just enter what you used to collect the information. If you still don’t are looking for in the search box. 108 CANSIM for Entrepreneurs

Starting a CANSIM search estimate the fuel costs for operating your vehicles Let’s say, for example, you own a local, residen- in both Montreal and Toronto. Next , you want to tial household service business in Montreal get some average fuel costs for the two cities from that involves a lot of travel with your small fleet the CANSIM database. Enter “gasoline prices” in of company vehicles. Now you want to explore the search box at the top of the page and click expansion into the Toronto area and need to “search.” Here’s the next page you will see. NOVEMBER 2012 The Canadian Business Journal 109

The results page displays a chart of the so that it shows you exactly what you want to titles, descriptions and table numbers where the know. Before doing that, it would be useful to be “gasoline prices” information may be found. Click familiar with some terms that can help you make on Table # 326-0009, the table most likely to sense of the table. contain what you seek in this case. Four key terms you should know: The next steps involve customizing the table geography, time series, variables and indexes 110 CANSIM for Entrepreneurs

CANSIM Tip: • The geography refers to the physical loca- The data you see in any given CANSIM tion. You will see the Greater Montreal table is just the tip of the iceberg. Much and Toronto listed in the table. But if you more data is available through the add/ want to drill down to specific areas within remove option. those cities, click on the square bracketed numbers to display a list of Census subdivisions2 . Customizing your data table • The time series is the gasoline price data Table # 326-0009 shows you all the geographies, collected between two points in time, including Montréal and Toronto, and the average measured at regular intervals such as gasoline prices for the last five months. But, you monthly, quarterly or annually. If the may need to see more, perhaps trends over several service you offer is seasonal, you may be years. Use the tabs across the top of the table to interested only in fuel prices in a particu- get what you want. If you have vehicles or equip- lar quarter. ment that use diesel, you have the option to cus- • The variables, as the term implies, are tomize for that as well. Do you want to see prices what varies from one point in time to the going back three years? You can set the time series next—in this case the gasoline prices. to display the time frame you select. You can even • And the indexes measure the percent- choose how you want the data to be displayed in a age the variable, or price of gasoline, has table. changed up or down from one time point Under the “Add/Remove data” tab, follow the to the next. five steps that guide you through limiting the geography, in this case Montreal and Toronto. Notice that you can further limit the geography you want to CANSIM Tip: search if you click on the square-bracketed number Statistics Canada’s new licensing next to the city name, which opens a window listing framework encourages the re-use and re- publication of data. You must credit the Census subdivisions. source of the information, but permission Under the “Manipulate” tab, you can change for sharing is not required. the frequency of your selected time series. Do you prefer the gasoline prices quarterly to reflect NOVEMBER 2012 The Canadian Business Journal 111 a spring and summer busy season? Do you have A CANSIM Test Run a unique fiscal year? Maybe you want to see the Let’s see what customized table would emerge indexes, or percentage changes. You can customize for you, a hypothetical residential household for these here. services entrepreneur. You select for the entire Do you want to make your table portable or Montreal and Toronto geographies, regular un- shareable? Enter your file display preferences under leaded gasoline at self servicing gas stations and the “Download” tab. for a time frame between June 2010 and June The “Related information” tab will take you to 2012. any other information, reports or analyses related to By customizing Table # 326-0009 to your “gasoline prices” published by Statistics Canada. specific preferences, you can find out exactly Then there’s the “Help” tab to offer further what you need to know. guidance. This is just one, very simple scenario to 112 CANSIM for Entrepreneurs NOVEMBER 2012 The Canadian Business Journal 113

demonstrate the process for customizing your ing socioeconomic information that’s essential CANSIM data table. You may have noticed along for formulating national policies and decisions. the way that there was also an option to display However, it’s also true that CANSIM belongs to gasoline price indexes, the percent that the price all Canadians, including entrepreneurs for whom changed up or down, which are useful seeing factual information is just as important. Statistics trends and estimating costs. Canada’s new CANSIM interface now makes it What else might a household services entre- simpler to access the data you need to support preneur who is looking to expand into a new area your business decisions, big or small. want to know? Residential construction starts Take CANSIM for a test run with your own for gauging growth in a community, income lev- queries. Still not finding what you need? Call els, demographics by geography or even average 1-800-263-1136. Statistics Canada agents commuting times leap to mind. The growth or are ready to take your call on regular weekdays decline of competing services in an area would between 8:30 and 4:30. Or if you prefer, email also be useful information. You can customize us: [email protected]. We welcome your

CANSIM data tables to answer these and count- questions. CB less other queries. 1. CANSIM is a registered trademark of Statistics Canada and is an official mark adopted and used by Her Majesty CANSIM Tutorial the Queen in Right of Canada as represented by the Minis- If you are still not convinced that CANSIM is ter of Industry Canada. simple to use, Statistics Canada has created a 2. Area that is a municipality or an area that is deemed to be equivalent to a municipality for statistical reporting five-minute video tutorial that demonstrates how purposes (e.g., as an Indian reserve or an unorganized ter- to do searches on the CANSIM interface. To link ritory). Municipal status is defined by laws in effect in each to the tutorial, click on “About CANSIM” on the province and territory in Canada. CANSIM main page, and you will see the link to the tutorial. Eva Bozzato was a communications special- It’s true that the factual information con- ist in Statistics Canada’s Communication Divi- tained in the CANSIM database is a useful re- sion until retiring in October 2012. For questions source for all levels of our government and for big about the article, please contact Marc Bazinet at corporations because it contains the overarch- [email protected] merican A are nothing if not inventive inventive if not nds nothing are .S. economic scene that ties .S. economic scene that ties ie U fr an ecent election fever we’ve all been we’ve ecent election fever c

i d of this article. Before covering that covering d of this article. Before r me

A Every day of the year, somewhere in the United in the United somewhere of the year, Every day

r subject, however, I’d like to write about another like to write about I’d subject, however, aspect of the witnessing. If you want to know how the how want to know you If – which is much economy is doing these days skip to the final may think – better than you one-thir Ou into the r able They’re dealings. business their to it comes when of proof For thin air. of out industries whole create to this assertion, process election big the how at look just economic It’s a huge border. the of south has become vote. successive with each larger growing and driver of in an enterprise engaged are individuals States, Of course, office. for – running value questionable

ALEX CARRICK, COLUMNIST n Industry Created as if by Magic if by as An Industry Created

CBJ SAYS NOVEMBER 2012 The Canadian Business Journal 115

An Industry Created as if by Magic 114

the “questionable value” part of the preceding a couple of town hall meetings and engage in a sentence can’t be strictly true. There must be great debate or two. rewards for the victor and his or her supporters. In the U.S., the president is always running for Otherwise, why would so many people be involved office. Potential opposing candidates have to de- in the process of trying to take someone to the top? clare early and with great fanfare. Up and down the One must conclude there is tremendous profit political spectrum, there are party nomination votes in the exercise. Contrary to the rhetoric, running long in advance of when the general public gets to for office isn’t simply an exercise in altruism. Sure, have a say. And if anybody wants to take a break every politician wants to “serve the people”, but during the four-year Presidential term, there are the there’s far too much money and far too many mid-term elections to put that idea to rest. individuals involved in a campaign for it to be just a Our American friends have several layers of labor of love. politics beyond what we “enjoy”. Their Senate is The U.S. is a 24/7 voting machine. Contrast elected. They vote at the county level for more im- the U.S. system with what we have in Canada. At portant and more numerous positions than we do. the federal and provincial levels, there’s often only Judges and law enforcement officials are chosen a six-week run-up to an election. This is consid- at the ballot box. Not for nothing is the U.S. home ered to be plenty of time for candidates to appear to the saying, “I wouldn’t vote for that man if he at barbecues, distribute brochures, participate in ran for dogcatcher.” We’ve tried to emulate them on our national national our on them emulate to tried We’ve accom- willing They’re laps it up. media The presence government a large have think we We keyed U.S. in the networks whole are There vote were terrific theater. These showdowns are ul- are showdowns These theater. terrific were vote Canadians many leave They wrestling. cage timate there’s and through comes passion The envious. punch. a knock-out for potential the - lead as high. Our aren’t stakes the But stage. When issues. constitutional ers over wrangle affairs, foreign over leadersAmerica’s quarrel everywhere. up ears perk stalk Blitzer Wolf does nothing for Not plices. may topic Tonight’s Room”. CNN’s “The Situation who clear always not It’s just alright. a situation be it. created 20.5 per for accounts sector public in Canada. Our proportion the U.S., In the nationally. all jobs of cent trying people add in all the But cent. per to is 16.5 promoting or U.S., in the elected get help someone a particular their and I suspect political agenda, or service way in one government to tied force work dwarfsanother ours on a proportional basis. an have Americans The electioneering. towards news Their way. in another us over advantage personal – opinion own this is my – and shows - expect in Canada are Constituents ed to be sufficiently informed to make make to informed sufficiently be to ed Does quickly. minds relatively their up

The debates between the presidential and vice- presidential the between debates The Estimates place the amount of money raised by raised money of the amount place Estimates There’s more political choice in Canada. It’s choice political more There’s

presidential contenders prior to the November 6th November the to prior contenders presidential towards promoting one candidate or another. another. or candidate one promoting towards set up to collect contributions and funnel dollars funnel and contributions collect to up set the super-pacs. These are independent agencies independent are These super-pacs. the in the private sector through the newest mutation, newest the through sector private in the billion each. That doesn’t include funds generated generated funds include That doesn’t each. billion the Obama and Romney campaigns at close to $1 at close to campaigns Obama and Romney the the list goes on and on. on list goes the media companies, radio and television stations and stations and television radio companies, media other. Who profits? Public relations firms, multi- firms, relations Public Who profits? other. sums of money are spent by each side to bash the to side each by spent are of money sums This has ramped up the advocacy advertising. advocacy the Vast up This has ramped larization has taken root and become entrenched. and become root has taken larization Democrats and Republicans to choose from, po- from, choose to and Republicans Democrats not just a two-party just the only with not U.S., In the race. last federal election. last federal the New Democratic Party Democratic in the in Quebec New the fared Sometimes there are surprises, such as how well as how such surprises, are there Sometimes Perhaps, but at least that keeps us on our toes. toes. our on us that keeps at least but Perhaps, CBJ SAYS a shortsuch much? results the alter frame time NOVEMBER 2012 The Canadian Business Journal 117

Unlike our Canadian Senate, the U.S. Senate is elected. They vote at the county level for more important and more numerous positions than we do. Judges and law enforcement officials are chosen at the ballot box.

are more entertaining than ours. Their produc- are two of the better-known examples. And there ers know how to heighten the drama at every are think tanks. There’s a U.S. think tank prepared turn; how to squeeze every drop of emotion out to consider just about any question you might have of difficult situations. the temerity to ask. And don’t forget ballot proposi- One way is to key on individuals caught up tions and their proponents. None of this is free. In in large events that are beyond their control. total, it’s a big financial enterprise. This has long been a staple of fiction writing. The election campaign has served one useful It’s also been embraced by Hollywood and U.S. purpose. Everyone’s been taking greater notice news broadcasters. of the latest economic indicators. Unfortunately, Lobbyists and special interest groups provide election campaigns by their very nature – with another layer of quasi-public-sector workers in the the opposition hammering away at any perceived U.S. The Sierra Club and National Rifle Association weakness – tend to focus on the negative.

Photo by: Christopher Halloran / Shutterstock.com Halloran / Shutterstock.com Christopher by: Photo Most encouraging are the latest results from results latest the are encouraging Most to year 14% about by ahead are sales auto U.S. is staging a stronger sector housing The end of this year. Roadrunner style, Washington will style, Washington Roadrunner year. this of end it.) around way find a sectors. of the bellwether two million units 15 approaching They’re in 2012. date consid- a level and annualized, adjusted seasonally recession. the before respectable quite ered starts home September comeback than expected. - sea units 872,000 At surprise. analysts by caught

Prior to the emerging nations grabbing the nations emerging the to Prior That’s misleading. There’s reason to sit up and sit up to reason There’s That’s misleading.

Photo by: Action Sports Photography / Shutterstock.com / Shutterstock.com Sports Action by: Photography Photo Estimates place the amount of money raised by the Obama and Romney campaigns at close to to at close campaigns Obama and Romney the by raised of money amount the place Estimates $1 billion each. $1 billion

automatic tax increases and spending cuts at the cuts spending and tax increases automatic supposed U.S. “fiscal cliff” U.S. supposed in the $600 billion (i.e., tion again in this recovery. Don’t worry Don’t the about again in this recovery. tion - in that direc headed It appears we’re growth. world spotlight, the U.S. was traditionally the leader of leader the traditionally was the U.S. spotlight, statistics are taking flight.statistics are news for the global economy, many of the latest the of many global economy, the for news scraping by anymore. In what is exceptionally good In what is exceptionally anymore. scraping by CBJ SAYS isn’t just economy U.S. The at this time. notice take NOVEMBER 2012 The Canadian Business Journal 119

sonally adjusted and annualized, they were +15.0 means. Included in the latter, and overlooked by per cent over August and +34.8 per cent compared most, are the huge sums spent during the latest with September of last year. election season. The momentum is likely to be sustained. Resi- As is the case with all U.S. elections, one thing dential building permits approached 900,000 units is certain – there will continue to be tremendous in the latest month. That figure was nearly 50 per employment and financial opportunities gearing up cent higher than in September 2011. for the next one. CB U.S. stock markets continue to swing upwards. All three major U.S. indices experienced their most Alex Carrick is Chief Economist with CanaDa- recent troughs in February 2009. Since then, NAS- ta, a division of Reed Construction Data (RCD). DAQ has more than doubled (+126 per cent) and CanaData is the leading supplier of statistics both the Standard & Poor’s 500 (+96.1 per cent) and forecasting information for the Canadian and Dow Jones Industrials (+90.2 per cent) haven’t construction industry. RCD is a division of the been far behind. global publishing firm, Reed Elsevier. For more There’s a boom in the U.S. energy sector as economic insight from RCD, please visit www. shale rock is being tapped for large deposits of oil dailycommercialnews.com/features/economy. and natural gas. This is opening up fields in North Mr. Carrick’s lifestyle blog is at Dakota, Pennsylvania and many other states. www.alexcarrick.com and he would welcome What about the unemployment rate? It’s a follow on Twitter (Alex_Carrick) or Facebook. finally fallen below 8.0 per cent and is approach- www.alexcarrick.com ing Canada’s jobless figure of 7.4 per cent. Weekly initial jobless claims in the U.S. are at their lowest level in four years. The U.S. has famously added stimulus by means of low interest rates, quantitative easing (i.e., the printing of money) and other assorted Protection Without Protectionism By Karna Gupta Protection Without Protectionism By Karna Gupta 122 Mergers And Acquisitions

Companies have been bought and sold since the dawn of commerce. Why should Canadian vot- ers and taxpayers care about what has generally been viewed as an indication of a healthy free market economy? Certainly in my industry, information and communications technology, mergers and acquisitions including those by foreign investors are generally seen as positive. They are frequently the fulfillment of a founders exit strategy or a validation of the integrity of the Canadian product and a way of introducing the product to a broader global market. But the reality is that not every Canadian Karna Gupta company facing a potential takeover wants to be bought, or at least not yet. Many entrepreneurs The rules that govern mergers and and CEOs are in the business to build strong acquisitions of companies are generally global companies of their own. Canada’s track considered arcane, the exclusive concern record in technology certainly suggests that we of the leaders, boards of directors and have the capacity, the guts, to do this. But this is shareholders of companies. But it has been not for the faint of heart. There are many ob- a remarkable summer. The prospective stacles in the path to build large Canadian tech- takeover of Calgary-based Nexen by nology firms including our conservative capital the Chinese energy giant CNOOC has markets, and our shortage of talent, including propelled the subject to the front pages C-suite expertise. and editorial pages of our newspapers. And Unfortunately, Canadian securities regula- in Quebec, U.S.-based Lowe’s bid for the tions compound the vulnerability of our tech homegrown hardware company, Rona Inc. companies. Right now the policy of our securities even became an election issue. regulators is that shareholders have the exclusive rights to make the decision concerning the NOVEMBER 2012 The Canadian Business Journal 123

sale of the company. There is no allowance for Canadian companies that do not wish to be the Board of Directors to exercise their fiduciary bought have no protection from that outcome. duty as it relates to the long term benefit to the We need to put measures in please to extend to company. Thus, when facing a takeover, the most them the same protection as companies in other important decision in the history of the company free market jurisdictions, such as the Unites is taken out of the hands of the Board and also States currently enjoy. And we need to do so Management. The result is that we have tied the without impeding the liberties of the companies hands of the group that best understands the op- that do want to be bought to do so. portunity and challenges of a sale. The current debate will continue. These are In clear contrast, U.S.-based companies fac- welcome indications that securities regulators are ing an acquisition have the sufficient defence concerned about this problem as well and likely to mechanisms built into their regulatory system to suggest substantive remedies in the near future. enable the board and the management team to Our industry and many others look forward to this effectively just say no and thereby stop a hostile as a vital step toward improving our chances for takeover. In Canada, if a company is put in play building stronger Canadian companies. or receives notice of acquisition intention, it has virtually no defence mechanisms. The sale of the Karna Gupta is the President and CEO of company is virtually inevitable. I have witnessed ITAC, the Information Technology Association of this first hand in my own career and in the dispo- Canada. He was previously the CEO of the secu- sition of many of the 168 Canadian ICT compa- rity software company Certicom. CB nies that have been acquired since 2004. Current regulations make it very hard for companies that want to grow into robust, global Canadian firms to do so. I am pleased to see this issue emerge on the public policy agenda. But we need a reasoned discussion on the issue not a heated political one that risks protectionisms and threatens positive foreign investment. Quite simply, under current regulations Understanding the Residential Agreement of Purchase and Sale By Faruk Gafic The Toronto Real Estate Board reported must be taken to ensure that they are accurately that in 2011, just under 90,000 sales of completed, including the names of the parties, residential homes took place with the the purchase price, the property description, the average sale price of slightly over $465,000. deposit and the closing date. The date of the In September of 2012 alone, there were agreement is for reference only. Once the Offer 5,879 sales transactions with the average is made by one party and accepted by the other, selling price of just over $503,000. the Offer becomes a binding agreement of purchase and sale (subject to any conditions set out For residential transactions, the buyers and therein). A subsearch of title would be appropri- sellers typically use the form of the agreement of ate to ensure that the seller is indeed the regis- purchase and sale developed by the Ontario Real tered owner and that the legal description to be Estate Association (“OREA”), often referred to as entered is accurate. the “Offer”. Excluding the signature page and With respect to the property description, in schedules which may contain certain additional addition to the municipal address and the legal provisions, the OREA form of the agreement (the description, there are blank spaces for the di- “Agreement”) is only four pages long. Yet, it does mensions of the frontage and the depth of the not appear uncommon for the parties to sign the property, followed by the words “more or less”. Agreement without fully reading or understand- The words “more or less” are not a licence for ing all of the provisions, paying attention only to guesswork as the buyers will have an expecta- some of the key “business terms” such as the tion to receive a lot of the size set out in the purchase price and the closing date. The pur- agreement. Dimensions should be accurate and chase or sale of a home is usually the largest based on a survey. With respect to the closing transaction into which most individuals enter on date, choose a date that is not a Saturday, Sun- a personal level. As such, the Agreement cer- day or a Statutory Holiday. If possible, avoid clos- tainly requires more attention and this article is ing on a Friday before a long weekend. intended to provide a basic and general overview While the buyers and sellers understand the of the Agreement for the buyers and the sellers. significance of the closing date, there is on oc- The Agreement contains certain self-ex- casion some confusion over the “Irrevocability planatory “fill in the blank” provisions, but care Date” clause. Irrevocability sets out a certain 126 LEGAL

With respect to the property description, the words “more or less” are not a licence for guesswork as the buyers will have an expectation to receive a lot of the size set out in the agreement.

time period after making the Offer during which never make an assumption that the fancy chan- such Offer cannot be revoked. If the Offer is not delier in the dining room that has been in the accepted in time, then the Offer is null and void. family for centuries is not included. Therefore, Another set of “fill in the blank” provisions chandeliers, mirrors, shelves or any other fixtures deals with chattels to be included in, and fixtures that the seller wishes to take with them should to be excluded from the purchase price, as well be specifically listed. In contrast to the fixtures, as the rental items. Chattels are any objects lo- the chattels are not part of the deal unless they cated in the home that are not physically affixed are specifically listed as included. The buyers to the building, while fixtures are screwed, bolted, typically expect that the appliances are included, glued or otherwise intended to be attached to but to make it so, they must be listed. With high- the building with some permanence. The fixtures er end appliances, it is recommended that even are considered a part of the building and are au- more detailed description is provided, including tomatically included, unless they are specifically the brand, colour and even serial numbers. The listed as excluded. As such the seller should more detailed the list, the less potential for any NOVEMBER 2012 The Canadian Business Journal 127

arguments will exist later. When it comes to the included in the purchase price would potentially chattels and fixtures, the realtors and lawyers live reduce the proceeds the seller actually receives, by the mantra “when in doubt, spell it out”. while providing that HST would be in addition to If the seller does not wish to provide any the purchase price would potentially increase the warranties with respect to the chattels, it should amount to be paid by the buyer. specifically require the buyer to acknowledge The “Title Search” clause provides the buy- such position in the Schedule “A” containing er’s lawyer with a period of time expiring on a additional provisions and attached to the Agree- date set out in the Agreement (called the “Requi- ment. It is not always obvious whether an object sition Date”) to examine the title to the property is affixed “enough” to be classified as a chattel and ensure that there are no work orders, as well or a fixture, and as such it is prudent to simply as confirm that the insurance can be obtained list all of the items that the buyer expects to find etc. The Requisition Date should allow for a after the closing in the “Chattels Included” provi- period of time sufficient for the buyer’s lawyer to sion. Certain items (such as hot water tanks, complete the searches and should occur at least furnaces, air-conditioning equipment) are often two weeks prior to the closing, to allow the sell- rented by the seller and not owned. These items er’s solicitor to respond to and address any valid should be specifically listed as rentals, so that requisitions with respect to the title. The prop- they are not considered fixtures that are included erty’s current legal use is also to be confirmed, in the purchase price. for example in cases where the buyer expects The Agreement contains a provision with re- to continue to benefit from a rental stream of a spect to the Harmonized Sales Tax (HST). In gen- separate basement apartment. The “Title” clause eral, the HST is payable on new homes but not has been on occasion referred to as the “annul- on resale of used residential homes. However, if ment clause” as it provides for circumstances a used home has been substantially renovated, it in which the buyer can refuse to complete the may be treated as a new home for the purposes transaction, if the buyer raises a valid objection of the HST. The Agreement provides a blank to the title that the seller is unwilling or unable to space where the HST can either be “included remove or address. However, the buyer must ac- in” or “in addition to” the purchase price. In the cept the title subject to certain utility easements, event that HST is payable, providing that HST is municipal and zoning agreements and certain 128 LEGAL

restrictions on land registered on title (so long as such agreements have been complied with). In Ontario, the transfers of properties can be completed electronically. The buyer’s and seller’s solicitors will electronically sign and submit the transfer for registration online, from their respective offices, but are to be bound by certain agreements developed by the Law Society of Up- per Canada, as set out in the “Closing Arrange- ments” clause of the Agreement. The “Documents and Discharge” clause provides that the seller is not obligated to provide the buyer with any documents or surveys that If the seller does not wish to provide any warranties with respect to the chattels, it should specifically require the buyer to acknowledge such position in the Schedule “A” containing additional provisions and attached to the Agreement. are not already in the seller’s possession. The clause also provides that discharges of institu- tional mortgages (mortgages held by a bank, damaged after the Agreement is signed but prior trust company, insurance company etc.) can be to the closing, then the buyer can elect to either registered within reasonable time after the clos- terminate the Agreement or receive the proceeds ing, so long as the seller’s solicitor undertakes of the insurance and take the property in “as is” to pay the existing mortgagee from the closing condition. The buyer is to arrange for insurance proceeds in accordance with the mortgage state- after the closing. ment provided prior to the closing, and the seller The “Planning Act” provision briefly states provides a direction to the buyer to that effect. that the Agreement shall comply with the Any other mortgages must be discharged prior to subdivision provisions of the Planning Act. While the closing of the transaction. entire books have been written on that topic, the The “Insurance” clause provides that until buyer and seller must be aware that the entire the closing takes place, the property is at deal will be null and void if that statute is not seller’s risk and covered by the seller’s existing complied with. For example, violation would insurance company. However, if the property is occur where the seller conveys one parcel of NOVEMBER 2012 The Canadian Business Journal 129

If the seller does not wish to provide any warranties with respect to the chattels, it should specifically require the buyer to acknowledge such position in the Schedule “A” containing additional provisions and attached to the Agreement.

land while retaining an adjoining parcel, without the essence”, meaning that any time limits must obtaining the regulatory body’s consent for such be strictly adhered to. The “Tender” clause deals subdivision (subject to certain exceptions). The with the situation where either party sets out to Agreement also addresses the issue of the demonstrate that it is ready, willing and able to seller’s residency in Canada, to ensure that if the close the transaction on the closing date, by de- seller is not a Canadian resident, that any taxes livering certain documents to the other party or owed pursuant to the Income Tax Act have been its solicitors. For example, a buyer would deliver paid. The “Adjustments” clause deals with the the closing documents and the money, while the fact that certain amounts are paid or received seller would deliver the transfer and the keys. by the seller in advance, such as realty taxes, The Agreement contains certain representa- unmetered utilities or rent, and the parties agree tions and warranties provided by the seller. One to adjust the amount required to be paid to close, such provision, entitled “Family Law Act” deals as of the actual closing date. with the fact that a spouse of the seller has cer- The Agreement also provides that “time is of tain rights with respect to the property pursuant 130 LEGAL

If the property is damaged after the Agreement is signed but prior to the closing, then the buyer can elect to either terminate the Agreement or receive the proceeds of the insurance and take the property in “as is” condition. NOVEMBER 2012 The Canadian Business Journal 131

to the Family Law Act. Any spouse is to consent permit is available or that environmental laws to the sale by signing where indicated. Another have been complied with, (iv) the condition for seller’s representation is contained in the provi- buyer to arrange for insurance of the property, or sion entitled “UFFI” stating that the seller has not any other conditions or other provisions that are insulated the property with insulation containing desirable in the circumstances. ureaformaldehyde and to the best of its knowl- In order to get the Agreement right, the buy- edge, the property does not and has never con- ers and sellers will have to heavily rely on the tained such insulation. expertise of their realtors and lawyers, but should Schedule “A” of the Agreement of Purchase make every effort to read and understand the and Sale is to contain any special provisions, Agreement provisions before rushing off to sign. additional representations by the seller or ac- The content of this article is intended to knowledgments by the buyer, or any conditions of provide general information for the reader and is either the seller or the buyer that must be satis- not intended as advice or an opinion to be relied fied or waived prior to the closing. For example, upon in relation to any particular circumstance. the parties may agree that the completion date For specific applications of the law to a particu- may be changed to another date upon giving lar set of circumstances, the reader should seek notice to the other party. The buyer may require professional advice. CB a representation that the property was not used for growth or manufacture of illegal substances * Faruk Gafic practices in the areas of or that the underground fuel tank complies with commercial real estate and leasing as well as all legal requirements and regulations. Examples corporate law with McLean & Kerr LLP, a law of the conditions that the buyer may consider, firm based in Toronto. include: (i) the condition to arrange for financing, (ii) the condition for buyer to arrange for inspection by a home inspector (this is important as otherwise, the Agreement specifically provides, in bold font, that the buyer will not be obtaining an inspection of the property), (iii) the condition for the buyer to determine that a certain building International Economic Forum of the Americas By Angus Gillespie A veritable who’s-who of business and financial executives were on hand for the International Economic Forum when it made its way through Toronto last month. Palm Beach, Fla. and Montreal are also hosts for the event each year. The primary reason for the forum’s establishment is to promote the role of the Americas in major decisions and reforms. Among those on hand delivering keynote speeches were: Natural Resources Minister Joe Oliver and Arizona Governor Jan Brewer.

Worhen the f um was held in Montreal, there was enough concern about the possibility of un- ruly protesters getting out of hand that Quebec riot police monitored entrances to the downtown convention centre but the threat of violence International Economic never materialized and in fact there were no more than a handful of disenchanted folks who Forum of the Americas made the trek downtown. By Angus Gillespie 134 International Economic Forum of the Americas

Natural Resources Minister Joe Oliver opened the two-day event in Toronto with a keynote speech first thing in the morning

Economics is something on the minds of all where we were in 2009. Another praised us for business people these days, whether it has to do our efficient markets and excellent infrastructure with the very personal aspect of jobs, healthcare, it also pointed to a lack of government support for retirement or pension security. There’s a lot of technology. On the other hand, also at the end of confusing data to muddle through. The speed of September, the Fraser Institute put out its annual change is rapid. report on economic freedom and indicated that In September two very different economic Canada was ranked in the top five nations in such reports were released. One had Canada’s inter- things as the size of government, legal system national competitive rating dropping to 14th from property rights, the ability to trade internationally 12th the year before and a slip of five places from and regulation credit which is critical in business. NOVEMBER 2012 The Canadian Business Journal 135

Natural Gas Greg Ebel is president and CEO of Spectra Energy Corp., which is one of North America’s premier natural gas infrastructure companies serving three key links in the natural gas value chain: gathering and processing, transmission and stor- age, and distribution. It boasts a workforce of about 5,500. For nearly a century, Spectra Energy and its predecessor companies have developed critically important pipelines and related infrastructure connecting natural gas supply sources to premi- um markets. In fact, Ebel’s company moves about 15 per cent of the gas in North America every day. “More than half of our assets and people are here in Canada,” says Ebel. “We’ve got three key businesses: Union gas, which is a 100-year old Arizona Governor Jan Brewer was also a special utility serving about 1.5 million folks in Ontario; keynote speaker on opening day. a western Canadian processing business (West Coast Energy) and then the Maritimes & North “Since 2007, we’ve invested about $4 billion in East Pipeline which takes gas down to the United the country and we’ve paid $270 million a year in States.” federal income tax,” Ebel continues. “I would expect The oil and gas industry is the largest in the we will stay here because natural gas is an econom- country and natural gas is a vital resource for both ic driver. the federal and provincial governments, providing According to the Canadian Energy Research In- about $29 billion in exports. B.C., Alberta, Sas- stitute, over the next 25 years, the natural gas sector katchewan are already reaping the rewards and its given the development of shale has likely produced expected Quebec and New Brunswick will see the 10 million person years across the country; $1.5 tril- same returns. lion in overall economic activity worldwide. 136 International Economic Forum of the Americas

Greg Ebel, president and CEO, Spectra Energy Corp.

“We’re seeing those gains play out on the generation, backup supply or renewables,” Ebel U.S. side of the border,” Ebel notes. “The shale states. gas there is expected to reduce manufacturers’ The average pipeline job pays about $65,000 costs by $12 billion a year. By 2017, natural gas per year, compared with $40,000 for the average will facilitate about a 2.9 per cent increase in U.S worker, so compensation is excellent. industrial production and by 2035 that number The 2011 GDP in the United States was up by will be 4.7 per cent.” about 2.5 per cent. The contributions from the oil The major advancements stem from the and gas industry related to the new supplies of technology side, especially within the past five to shale accounted for 2.2 per cent. 10 years, which should have a profound positive “Without that industry at this point in time impact on the economy. you’d see very flat U.S. GDP growth,” Ebel states. “Because of that technology we now have a “The math isn’t hard to figure out. We’ve got to century worth of gas even including increased use find a way to keep using this.” NOVEMBER 2012 The Canadian Business Journal 137

Mining – PDAC dures in developing access to land,” he notes. When Glenn Nolan officially took over as presi- “Access to capital and a strong, trained workforce dent of the Prospectors and Developers Associa- is also essential.” tion of Canada this past March he became the “Here in Canada we have a very stable gov- first Aboriginal to ever hold the high-profile posi- ernment,” Nolan continues. “They have clear tion during its 80-year existence. Strengthening policies on environmental protection and through community engagement and increasing the par- decisions made by the Supreme Court. We have ticipation of Aboriginal communities within the policies that clearly state we have to work with lo- mining industry are primary objectives of Nolan, cal communities.” who is also Vice President of Aboriginal Affairs The government has also set forth a path with Noront Resources. that allows the mining industry to have surety Nolan was asked to specifically comment on when raising capital for projects here in Canada three areas, the first being whether it’s his opin- through the mineral exploration tax credit. It’s a ion that the mining boom is sustainable. credit that allows Canadian investors to invest in “We see the need for access to minerals to Canadian companies on our soil. In the business continue to grow,” Nolan responds. “Is it going to it’s commonly known as flow-through shares and be done in a boom cycle or will it be done else- is something originally championed by a former where? We think there’s an opportunity here to PDAC President, John Hansuld. It provides for lo- ensure that continued access occurs because cal investment incentives and opportunities. there’s always going to be a need. If we start to There remains the need for the industry to slow down our production, we’re going to be faced be engaged with local communities and it’s now with a shortage. “ known as corporate social responsibility. If shortages occur, Nolan says there would “It’s important that we work with these com- be a need to go out and explore more lands and munities through the entire mining cycle,” Nolan search for resources. He also says there are ways states. “What we’ve done through the PDAC is work to take the edges off boom and bust cycles in the very closely with academia, governments, non-gov- mining industry. ernment organizations, Aboriginal community lead- “Part of that is having a strong central govern- erships and members to develop a format in which ment that has strong policies and strong proce- we can bring back to our members so we can give 138 International Economic Forum of the Americas

Glenn Nolan, president, PDAC

them a template in which they can use when they One of the questions most often asked of No- go into the communities and that program is called lan is how will the northern communities in Canada E3-Plus.” be providing additional opportunities for business E3-Plus was originated in 2003 and is a frame- development and how will it change from previous work for responsible exploration designed to assist work that has been done in the past. This relates exploration companies continuously improve their to smaller centres outside more developed urban social, environmental and health and safety per- areas or known mining hubs such as Sudbury. formance and to comprehensively integrate these “We’re actually seeing communities forming three aspects in to all their exploration programs. partnerships to supply services and the explora- “The membership voluntarily used that method tion sector and eventually the mining sector,” to the extent they see necessary to advance their Nolan remarks. “We’re seeing examples of orga- project,” Nolan says. nizations owned 100 per cent by First Nations NOVEMBER 2012 The Canadian Business Journal 139

in Saskatchewan that have in excess of $150 fertilizer producer by capacity in the world, with million per year in contracts. In the oil sands the capability of producing 22 million tons of and in the Northwest Territories and Nunavut the three primary fertilizer nutrients: potash, we have other examples of Aboriginal majority phosphate and nitrogen. As the world’s leading owned companies attracting and securing large potash producer, the company is responsible for contracts worth hundreds of millions of dollars.” about 20 per cent of global capacity. There are Despite those major breakthroughs, infra- five low-costs mines in Saskatchewan and New structure in the far north is still sorely lacking Brunswick. The company also has operations and will need financial resources, technical and in the U.S. and Trinidad. Additionally, there human people power to develop what largely are offshore potash investments in Jordan, stands as a vast untapped region with unlimited Israel, Chile and China making PotashCorp an potential. It means recruiting people from the international enterprise and a key player in south. The PDAC is working closely with govern- meeting the growing challenge of feeding the ments to ensure there will be a better trained world. workforce from the north in the coming years. Roots of the Saskatchewan potash industry “There is a tremendous change that we’ve began in the 1950s. The provincial government seen from the way business was done – the saw it as a promising new field and granted large exclusion of Aboriginal communities, or the iso- subsidies to new projects, mainly for American lation of them from the actual project, to know contracts. However, overzealousness led to over- ensuring that these projects don’t leave behind production and when a global potash glut began a negative legacy,” Nolan says. “This will provide in the late 1960s the industry almost collapsed. them with opportunities that go far beyond the In August 2010, PotashCorp became the sub- project that comes to their doorstep. It provides ject of a hostile takeover bid by Australian mining them with mobility to take their new skills and giant BHP Billiton but the federal government an- businesses and apply those everywhere outside nounced it was blocking the BHP bid, feeling the their territory, including globally.” sale would not yield at net benefit for Canada. The failed attempts to sell along with slowed Fertilizer Production potential deals with China and India on large ex- PotashCorp of Saskatchewan is the largest ports are factors in PotashCorp posting a third- 140 International Economic Forum of the Americas

Wayne Brownlee, CFO, PotashCorp quarter profit decline of 22 per cent from a year “Our growth prospects are very much tied ago. Chief executive Bill Doyle has stated that to developing countries: China, India, Brazil and PotashCorp is prepared to wait for China and Southeast Asia,” Brownlee states. India, believing they need substantially more At the core of success for PotashCorp is the fertilizer to grow food production. direct link to sustainability of increased food “In 2011 we generated 64 per cent of our production with key drivers including, but not gross margin from our products segment,” says limited to, population growth and the desire for Wayne Brownlee, executive vice president and higher quality foods in developing nations. As CFO of PotashCorp. Two-thirds of that business income rise, there’s a shift to more fruits, veg- is outside North America with virtually no ac- etables and meats around the world. tivity in the European marketplace. That said, The economic uncertainty over the past four Potash Corp. does have an executive plan for years has done very little to slow growth in food expansion. demand. In fact, as Brownlee notes, grain con- NOVEMBER 2012 The Canadian Business Journal 141

sumption over the past four years has grown at Brownlee offers. “Fertilizer distributors were a faster pace – 2.4 per cent per year – than the forced to take large inventory write-downs mostly average of the 10 years prior to the economic in nitrogen and phosphate supplies.” slowdown, which was about 1.5 per cent per an- Farmers around the world cut back appli- num. Countries such as China continue to realize cation rates given their perception of the risks robust demands for food. Soy beans are a prime involved and the need to contain costs according example, with China expected to import a record to Brownlee, resulting in a far more risk-adverse quantity this year with the total value of their soy customer. bean imports being estimated at $35 billion. “The cost of inventory has been shifted In the first seven months, China imported just towards the producers to deal with this risk,” he under 35 million tons of soybeans, up 20 percent says. “We’re seeing a bit of a repeat of that right year on year. Analysts’ expectations project a de- now with concerns about the European debt cri- cline in the coming months following a rebound sis, so the market is still a bit tepid.” in global food prices. Despite record farming incomes over the Brownlee says continued pressure on agricul- past five years in most agricultural regions in the ture commodity supplies due to strong demand world, farmers are cautious about their spending. and adverse growing conditions has been evident Compounding the problem is a large percentage in the prices for commodities such as corn and of subsistence farmers in developing countries, soy beans during the middle months of 2012. In such as China and India. other words, the potash industry was hit by the “With a large percentage of sales destined global economy, just like most other industries. for offshore developing markets, we are very “Despite the unwavering demand for agricul- much subject to changes in government policy ture commodities we were not immune,” Brown- from time to time,” Brownlee reveals. “India is lee admits. a perfectly good example of this. Because it In 2009, with the widespread financial col- has subsistence farm characteristics for a large lapse and general lack of confidence for bullish portion of the agriculture economy in India, the sentiment, global potash consumption declined government there has historically heavily subsi- by 40 per cent in one year. dized their domestic fertilizer business including “The industry went into a state of paralysis,” fertilizer purchases by farmers.” 142 International Economic Forum of the Americas

The forum panel (l-r): Ashishkumar Chauhan, CEO, Bombay Stock Exchange; Greg Ebel, President & CEO, Spectra Energy; Bruce Laws, President, Maersk Oil; and Wayne Brownlee, CFO, PotashCorp.

The Indian subsidy is about $22 billion. How- The downside of that curious political choice ever, due to budgetary concerns, the Indian gov- has been the nutrient balance application ratio ernment made a decision to reduce subsidies for in India has moved so much in favour of nitrogen phosphate and potash, but that wasn’t the case that yield responses in India are now threatened for nitrogen. leaving the country having to make a longer-term “For political reasons, they chose to protect sustainable agricultural policy decision in lieu of their nitrogen business and continue to subsidize short-term political decisions. it,” Brownlee reveals. “The consequence is potash Brownlee squarely pegs a large responsibility and phosphate prices have risen enormously and on the flatness of potash growth over the past four nitrogen prices have stayed very low.” years to economic and political issues in many of NOVEMBER 2012 The Canadian Business Journal 143

within the sector where there are periods of drift and periods of intense growth. For companies such as Potash, the essential factor to success is the response to such factors. “We are currently in the midst of an $8.2 billion expansion in Canada,” Brownlee relates. “There’s $6 billion in Saskatchewan and $2.2 billion in New Brunswick. Once these projects are ramped up by the end of 2015, we’ll be in a position to double our potash sales.” The expansion is expected to create 36,000 new jobs in Saskatchewan and 11,000 in New

Brunswick. CB

The forum panel (l-r): Ashishkumar Chauhan, CEO, Bombay Stock Exchange; Greg Ebel, President & CEO, Spectra Energy; Bruce Laws, President, Maersk Oil; and Wayne Brownlee, CFO, PotashCorp.

these developing countries. He says it’s a pattern he’s become quite used to seeing. “From 1997 to 2000 potash consumption was virtually flat,” he says. “But from 2001 to 2007 we grew at a rate of 5 per cent a year, which was worth 15 million tons of growth during that time.” In that timeframe, consumption within China and India grew at an annual rate of 8 per cent and Brazil grew by 7 per cent. But Brownlee notes there is enormous geo-political intervention Canadian Employers Get Temporary Relief From Rising Benefit Costs

Canadian organizations received a modest costs has dipped in recent years, companies are reprieve from the increase in benefit costs in the more optimistic that they have learned to contain past three years, but the relief will be short-lived, costs effectively.” making cost containment and absence manage- “However, the short-term relief is coming less ment the priorities for employers. These findings, from the implementation of cost-containment strat- based on The Conference Board of Canada’s egies, and more because of external changes in the second national survey of benefit programs, market such as prescription drug pricing,” Thorpe were issued at the Benefits Summit 2012. continues. “Not only might costs rise sharply, em- “Benefits represent a significant and growing ployers need to consider how they can cover new cost for employers,” says Karla Thorpe, Director, high-cost biologics and other therapies that are Leadership and Human Resources Research with coming onto the market.” the Conference Board. “Since growth in benefit Cost containment remains the top short-term NOVEMBER 2012 The Canadian Business Journal 145

priority for employers. In fact, the focus has intensi- absenteeism an important objective of their benefit fied since the Conference Board last conducted this strategy, up from 64 per cent in 2009. But only 41 survey in 2009. The proportion of employers who per cent of employers rate their absenteeism strate- rate containing benefit costs as a “very important” gies as effective, down from 43 per cent in 2009. objective increased from 41 per cent in 2009 to 50 “Traditionally, employers have focused on per cent in 2012. achieving cost savings in their benefit premiums The average cost of providing benefits to active rather than focusing on reducing the number and employees is 10 per cent of gross annual payroll, or cost of claims, which are driven primarily by the just slightly more than $7,000 per full-time employ- health of the employee population,” remarks Thor- ee. Historically, it has not been uncommon to see pe. “Employee wellness programs and the impact of benefit costs escalating at a year-over-year rate of wellness programs on engagement will be a focus 10 per cent. Between 2010 and 2011, costs esca- for many employers.” lated by an average of 6.2 per cent, still more than The report, Benefits Benchmarking 2012, helps twice the rate of inflation. mid-to-large-sized employers benchmark them- The proportion of employers who rate themselves against other similar organizations. It reports selves as either somewhat or very effective at the results of The Conference Board of Canada’s containing benefit costs increased from 58 per cent second survey of employer-sponsored benefit in 2009 to 72 per cent in 2012. However, external programs, which was conducted between February market factors have played a role in the slower and May 2012 and obtained responses from 356 growth of costs. organizations. Patents have expired for some widely used The report explores a wide range of employer- drugs, opening the door for more cost-effective ge- sponsored benefit programs, including extended neric alternatives. Generic pricing reforms have also health care plans; dental plans; life and accident led to a decrease in the cost per prescription. plans; disability and casual absence plans; and Employers are expressing increasing concern legally required programs (CPP/QPP, EI, etc.). Not about absenteeism, which currently costs Canadian covered are wellness programs; paid time off (e.g., employers an average of 1.2 per cent of payroll an- vacation, statutory holidays, maternity leave); or nually, or $7.4 billion in lost wages annually in Cana- pension and retirement plans. CB da. Three-quarters of employers consider reducing The 10 Most Common Pricing Mistakes By Mark Borkowski The 10 Most Common Pricing Mistakes By Mark Borkowski 148 The 10 Most Common Pricing Mistakes

Savvy companies are implementing price optimization schemes and focusing on building their organizations to serve their most profitable customers.

Is it time to revaluate your pricing policies for companies to increase their competitive ad- during tough times? vantage.” The vast majority of companies have spent years achieving gains through cost cutting, I spoke to Dennis Brown who is a partner at Cali- outsourcing, process reengineering and the adop- fornia based Atenga Inc. Atenga is the nation’s lead- tion of innovative technologies. However, the incre- ing pricing authority to commercial and industrial mental benefits from these important activities are companies worldwide. The company has resources diminishing and companies are looking at other and processes to improve clients’ profits by optimiz- areas to improve their business results. ing prices and improving price performance. Their Brown believes that companies are looking to most surprising finding has been how often price serve well-defined market segments with special- optimization can raise prices and improves sales ized products, messages, product variants and volumes at the same time. services – and earn superior profit margins while I asked Dennis about price strategy. He said, doing so. Savvy companies are implementing price “It is emerging as the most important resource optimization schemes and focusing on building NOVEMBER 2012 The Canadian Business Journal 149

Too many companies use simplistic pricing processes and some cannot even identify their most profitable product lines.

their organizations to serve their most profitable Over the years, Brown has seen examples of customers. Many are seeing improvements by even good and bad pricing policies. The following is a list “firing” customers who are unprofitable. of 10 of the most common mistakes companies All too many companies, however, use sim- make when pricing their products and services. plistic pricing processes and some cannot even identify their most profitable products, product 1. Basing prices on costs, not customers’ lines, customers or customer segments. This lack perceptions of value – Pricing based on of information means too many management costs invariably leads to prices that are teams have their sales staff focusing the bulk of too high or –more often-- too low. their time servicing the least profitable of their 2. Basing prices on “the marketplace” – customers. Some companies even embrace poli- Management teams must find ways to cies and pricing strategies that drive away their differentiate their products or services to best customers and then wonder why their profits create additional value for specific market are not growing. segments. 150 The 10 Most Common Pricing Mistakes

Successful companies employ trained professionals to collect and analyze the data to identify and evaluate the value perceptions of their marketplace.

3. Attempting to achieve the same profit Savvy companies acclimate their custom- margin across different product lines – ers and their sales forces to frequent For any single product, profit is optimized price changes. when the price reflects the customer’s 6. Incentivizing salespeople on revenue gener- willingness to pay. ated, rather than on profits – Volume-based 4. Failing to segment customers – The value sales incentives create a drain on profits proposition for any product or service var- when salespeople are compensated to ies in different market segments and price push volume at the lowest possible price. strategy should reflect that difference. 7. Changing prices without forecasting 5. Holding prices at the same level for too competitors’ reactions – Smart compa- long, ignoring changes in costs, competi- nies know enough about their competitive environment and customers’ prefer- tors to predict their reactions and pre- ences – Most companies fear the uproar pare for them. of a price change and put it off too long. 8. Using insufficient resources ot manage NOVEMBER 2012 The Canadian Business Journal 151

pricing practices – Cost, sales volume Salespeople can readily identify those an- and price are the three basic variables ecdotes that advance their interests, e.g., lower that drive profit. prices lead to higher sales, regardless of profit- 9. Failing to establish internal procedures to ability, and those that operate against them. optimize prices – The hastily called “price Savvy companies employ trained professionals to meeting” has become a regular occur- collect and analyze the data to identify and eval- rence, a last-minute meeting to set the uate the value perceptions of their marketplace. final price for a new product or service. Large companies have entire departments doing 10. Spending a disproportionate amount of this full-time; smaller companies may outsource

time serving your least profitable custom- it to a specialist, such as Atenga. CB ers – Most companies do not know who their most profitable customers are. Know By: Mark Borkowski is president of Toronto based your customers: 80 percent of a company’s Mercantile Mergers & Acquisitions Corp. Mercan- profits generally come from 20 percent of tile specializes in the sale of mid market compa- its customers. Failure to identify and focus nies. www.mercantilemergersacquisitions.com on the 20 percent leaves companies unde- fended against wily competitors. Dennis Brown can be reached at dbrown@aten- Brown thinks that one other big mistake is gacorp.com or www.atengacorp.com that “companies rely on salespeople and other customer-facing staff for intelligence about the value perceptions of their customers. Such people are an uncertain source, because their information gathering methodology is usually haphazard, and the information obtained thereby can be purely anecdotal” Such information is neither precise nor quantifiable. A customer will rarely tell the “complete truth” to a salesperson, so any information the customer may volunteer will be biased — often to get the company to lower their prices. Goderich Says: ‘Thank You, Canada’ Goderich Says:

‘Thank You, Canada’By CBJ Staff 154 Goderich Says: ‘Thank You, Canada’

Judy Crawford

The picturesque town of Goderich is situated in missing people. Local stores also donated many of the beautiful Huron County region at the mouth their products to assist in the recovery effort. of the Maitland River on the east shore of the Now, more than a year later, the most recent Lake Huron in Ontario. damage report reveals a cost of more than $130 The official motto: Canada’s Prettiest Town. million to the community and its economy. Since It’s a town that certainly lives up to that that terrible day, Goderich has embarked upon name, with its incredible scenery; water, trees one of the most innovative economic revitalization and famous sunsets to go along with a number initiatives in North America. The Canadian Busi- of historic old buildings that give the small com- ness Journal had an opportunity to visit with Judy munity much of its identity and character. But Crawford, CEO of the Huron Chamber of Commerce that identity was horribly scarred by a vicious to discuss development in Goderich this past year. F3 tornado that tore through the town of about CBJ: How has Goderich recovered from last 8,000 inhabitants on the afternoon of Sunday, year’s tornado? Aug. 21, 2011 resulting in the death of one JC: Goderich is a resilient community. Almost person and injuries to many others. The tornado 90 per cent of all stores and services impacted aggressively tore through the downtown core by the tornado have rebuilt and reopened. Con- leaving a path of destruction in its wake. struction totals more $23 million in the first nine Town officials immediately declared a state of months of this year; that’s $20 million more than emergency as rescue teams frantically searched for the previous year. NOVEMBER 2012 The Canadian Business Journal 155

There’s plenty of work ahead and investment Chamber of Commerce has brought citizens, opportunities available. More than 160 business- business and community leaders together on es are operational downtown and are delighting committees to revitalize the economy, citizens customers every day. Beautiful new store fronts have developed networks to plant trees, neigh- have been unveiled. We still have about 8 per bours have banded together to throw benefit cent of our downtown as vacant land available concerts and church congregations are coming for redevelopment and we are open for business. together to help heal and care for one another. CBJ: What does the Rediscover Goderich The spirit of optimism, resiliency and teamwork campaign hope to achieve? are fundamental components of the commu- JC: Our community has received close to $4 nity’s character in Goderich, and it is being million dollars for relief efforts from all parts of demonstrated each and every day. Ontario and Canada. Our community is in a posi- Through its Community Economic Revitalization tion of gratitude. We want to start a conversation Committee (CERC), the Chamber of Commerce is with the world by saying, ’Thank you’ and encour- reaching out to businesses in markets throughout age the world to Rediscover Goderich. southwestern and the world to encourage invest-

We look at saying ‘Thank You’ as a conversa- ment in revitalization efforts. CB tion starter, from which we can extend an invite to our customers to plan their next vacation, hold their You can learn more about Goderich’s prog- next family reunion or suggest to their employer ress by visiting wwww.facebook.com/rediscover- to hold the next management retreat. This would goderich or following them on Twitter @SayYes- really help our recovery efforts. Likewise, our Re- 2Goderich. Videos of progress can also be seen discover Goderich campaign is designed to remind by viewing the following videos: government ministries to allocate redevelopment budgets here in 2013 and to encourage businesses http://www.youtube.com/watch?v=b1UtjgXmrUc from across the province to consider Goderich as a http://vimeo.com/47321892 great market to open a second location. http://www.youtube.com/watch?v=r6m3EbGKzY CBJ: How has the community changed? U&feature=youtu.be JC: Absolutely, we’ve been brought closer together. There are many examples. The Huron Is Your Company’s Culture

Ready to Open Up? By Dwayne Matthews SERIES

Is Your Company’s Culture

Ready to Open Up? By Dwayne Matthews 158 CLEAN 15 Is Your Company’s Culture Ready to Open Up?

Articulating the innovation needs of your company in a manner that still keeps some of the company secrets takes significant effort, as you will have to decide what is too specific vs. what might not be specific enough.

During a TED talk, British business In this talk Obeng is referring to the speed of professor Eddie Obeng said “We spend communication and its affect on business and our time responding rationally to a world innovation. He goes on to say the density of which we understand and recognize, but information interactions is amazing and speeds which no longer exists.” up the rate of change faster than a company’s NOVEMBER 2012 The Canadian Business Journal 159

ability to learn versus the speed of information After the contemplation of these questions happening out in the world. comes the biggest question of them all. Is our Obeng’s thesis in this talk is that the pace of company’s culture ready to open up? Now its change overtakes the pace of learning. This reality one thing to send out a memo letting all staff is something that most executives and employ- know that you have just become an open com- ees instinctively feel. They know that the speed pany that is friendly to external partners and of information, the volume of information and the Bob from the mailroom is now in charge of the expansive reach of connectivity is changing the “submit idea” link on the company website, playing field as it relates to their competitors, their which will be viewed once a year to see what industry and the way they interact with the world. came in. The question leads to a host of other This speed, volume and connectivity have a very questions like; Does your company understand profound effect on innovation. The effect is not just what it knows and what it does not know? Does for companies but also for regions and countries. your company have all the needed information Typically in the past, innovation was done to make strategic decisions? Does you company internally and locally. Today, however, companies have a way to tame the large volumes of infor- and countries are starting to learn that these mation in order that it make sense? Two main organizational structures no longer hold monopo- components are sourcing innovations and foster- lies on their specific specialties and strengths. ing a culture that embraces that which was not Innovation can come from anywhere and in some made within. cases from alternate industries. External innova- Articulating the innovation needs of your tions as a force have become relevant in the age company in a manner that still keeps some of of the Internet. the company secrets takes significant effort, According to many leading experts in open as you will have to decide what is too specific innovation, executives no longer ask why, but vs. what might not be specific enough. Another have moved forward to the question of how? tough piece of the puzzle is being able to gain in- How do we successfully connect external enti- sight on cross industry innovations that provide ties? How do we prepare our company to accept value and potential breakthroughs. weaving ideas and technologies from outside The next step is sourcing the innovations. into the corporation? Identifying business ecosystems around your 160 CLEAN 15 Is Your Company’s Culture Ready to Open Up?

Once you have tracked down external ideas and innovation, the process becomes about people.

strategic needs here is paramount. Creating whole, which will become increasingly important on going relationships with your suppliers, as the world becomes more connected. the suppliers of your suppliers, government It is said that culture eats strategy for agencies, universities, venture capitalists, breakfast; if this is indeed the case then chang- potential innovators, and patent holders, while ing culture should be a major consideration being able to gain and share insights that with regard to external innovations. According benefit the entire ecosystem is the holy grail to Ben DuPont, venture capitalist and open of sourcing real innovation opportunities. This innovation veteran some key considerations works out for your company, but also ensures should be adhered too with regard to changing that you are seen as a fair corporate giant company culture. and will help to maintain your brand as a net “Changing the culture to be receptive to out- contributor to the economy and society as a side ideas and technology requires more than a NOVEMBER 2012 The Canadian Business Journal 161

speech or memo. Changing the culture requires along the way and small enough to not to com- changing work habits and changing incentives. pletely tank the entire effort are key to changing Every employee should be looking for external culture, because it deals with the high risks of ideas monthly, technology leaders should be the naysayers. looking for and evaluating ideas weekly and At the end of the day, culture is about the open innovation leaders should be looking for, stories we tell ourselves to provide a point of evaluating and championing external ideas departure for our premises about who we are, daily,” says DuPont. “The best scientists are not what we do and what happens in the particular frequently the extroverts. Find the ones who are space and time we find our collective selves. and name them open innovation champions. Culture is about stories. The more dramatic Find the person with friends in every business the stories are, the more profound its effect on unit and name them head of open innovation.” those premises that create our situational real- Once you have tracked down external ideas ity. Changing culture may then be about a collec- and innovation, the process becomes about tion of stories that build a momentum starting people. People’s ability to connect in meaningful from a small place of success and growing out ways with others and to gain insight is imperative. to the larger group over time via the different

Another leader in open innovation is Ste- influential voices. CB fan Lindergaard, who also had some ideas on cultural change. Dwayne Matthews is the Executive Director “Communication is extremely important,” he of d&a Visual Insights, a leader in ecosystem says. “The communication is both internal and intelligence. external. So companies need to build excellent communication strategies on what the goals are with the innovation efforts and how they are going to approach these goals and what their expected outcomes are” Lindergaard also stresses that companies have opportunities to learn from failure. Smart fails that are small enough to provide learning C LICK HERE TO ENTER BUSINESS IN ACTION SECTION