BUSINESS IN VANCOUVER RETROSPECT: CELEBRATING THREE DECADES OF BIV, WITH STORIES TRACING THE CITY’S RISING FORTUNES AND B.C.’S EVOLVING ECONOMY
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Sponsored Content
SFU reflects on its’ community impact as Vancouver campus turns 30
S
FU’s Vancouver campus is a leader in the economic and cultural development of the City of Vancouver through research and academia, art and culture, and innovative support of social infrastructure. The university is commited to directly engage with communities, organizations and partners to create, share and embrace knowledge that improves life and generates real change. “We couldn’t just be an academic institution, offering classes for students taking degrees, we have to be, as we say, ‘in the community, and of the community’,” says SFU Vancouver’s Executive Director, Laurie Anderson. One example of this is RADIUS (Radical Ideas Useful to Society) that has supported 165 social ventures and hosted more than 100 workshops locally and nationally, reaching more than 7,500 participants. With over 70,000 people using the Vancouver campus annually,
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for programs and courses, public events, conferences, and more, SFU’s Vancouver campus is now the epicentre of the downtown education district. Challenging the Status Quo When SFU opened the Goldcorp Centre for the Arts building in downtown Vancouver at the corner of Hastings and Abbott street in 2010, local residents were concerned about how this would impact their neighbourhood. It has been no small feat for SFU to create spaces and programs that give the Vancouver Downtown Eastside residents a place of belonging. Over the last decade, the shift has exceeded all expectations. The university strives to find new ways to engage with neighbourhood organizations and citizens through programming that increases access to the university for marginalized groups and to create sustainable partnerships that benefit the local community.
To strengthen ties with local residents, the university established the SFU Vancity Office of Community Engagement in 2010. Since then, over 9,000 people annually have engaged in programs such as the Community Journalism 101 course with Megaphone Magazine, the Downtown Eastside Heart of the City festival—hosted at SFU—and Salish Singing and Drumming workshops. “We have moved beyond being a place where people come in to take academic degrees. We do that, and that is part of our core mandate. But our core mandate is also to engage deeply, substantively, and respectfully with the community. It’s part of SFU’s DNA as Canada’s engaged university and we take it very seriously.” With nine locations now across downtown, SFU’s Vancouver campus has truly become the intellectual heart of the city. There is a deliberate and deeply ingrained emphasis on
encouraging public discourse and dialogue through the Morris J. Wosk Centre for Dialogue and SFU Public Square’s annual Community Summit, which convenes governments, academics, industry and the public to address and co-create solutions to issues affecting society. The university is increasing social innovation for business and non-profit organizations with programs like science and technology accelerator VentureLabs and Continuing Studies’ Social Innovation Certificate. SFU’s Vancouver campus has a long history of delivering quality academic and non-credit programs, but it has developed a reputation of engaging the local community to create, share and embrace knowledge to benefit Vancouverites and generate meaningful change. Find out more about SFU’s Vancouver campus’ 30th anniversary at www.sfu.ca/ van30.
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redefine UHȏGHȏfine | \ UÕ GL IíQ \
redefined; redefining; redefines
Definition of redefine transitive verb
To change the meaning of something or to make people think about something in a new or different way. Example: MEP Business Counsel: World-Class Legal Service. Redefined. Related Words: reconsider, revisit, reevaluate, rethink, reconceive, excellence, creative, innovative, flexible
Five years ago, we set out to redefine how business legal services are viewed and delivered. Our ability to provide exceptional, practical legal advice, in a manner free from traditional law firm constraints, has placed us among the Top 10 Corporate Boutiques in Canada (Canadian Lawyer) since inception. From one pioneering wordsmith to another – congratulations to Business in Vancouver.
meplaw.ca
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CONTENTS
10
44
COLUMN
COLUMN
COLUMN
COLUMN
COLUMN
Janet Austin–15
John Horgan–19
Jim Pattison–25
Carole Taylor–35
Peter Ladner–45
FEATURES 8 1989: B.C. is still for sale 10 1990: NORTH SHORE UPDATE 12 1991: FIRST CLASS ALL THE WAY
32 2004: FORESTRY CONSOLIDATION 32 2005: MAIL-ORDER MOVIES 34 2006: B.C. BIOTECH BUCKS TREND
14 1992: BETWEEN TWO WORLDS
34 2007: LULULEMON RISING
16 1993: ECONOMIC OUTLOOK
36 2008: THE ECONOMY
18 1994: THE TAIL WAGS THE DOG
37 2009: OLYMPICS SPARK DEVELOPMENT
20 1995: JOURNEY’S END
38 2010: B.C. CLEAN TECH
22 1996: SIGHT UNSEEN 23 1997: PAUL LEE: AHEAD OF THE GAME 24 1998: BITING INTO THE MARKET 26 1999: NISGA’A IMPACT 26 20O0: SHIPPERS CHOOSE VANCOUVER 28 2001: LIBERALS CAN’T STOP SLIDE
40 2011: B.C. BUSINESS CONFIDENCE
RETROSPECT: CELEBRATING THREE DECADES OF BIV, WITH STORIES TRACING THE CITY’S RISING FORTUNES AND B.C.’S EVOLVING ECONOMY
PRESIDENT: Alvin Brouwer EDITOR-IN-CHIEF, BUSINESS IN VANCOUVER; VICE-PRESIDENT, GLACIER MEDIA: Kirk LaPointe EDITOR: Mark Falkenberg DESIGN: Petra Kaksonen PRODUCTION: Rob Benac CONTRIBUTORS: Janet Austin, Myriam Beaugé, Nelson Bennett, Krisendra Bisetty, Curt Cherewayko, Richard Chu, Glenn Drexhage, Rosemary Eng, Jodie Heap, John Horgan, David Jordan, Glen Korstrom, Peter Ladner, Kirk LaPointe, Eve Lazarus, Timothy Renshaw, James Risdon, Jen St. Denis, Meredith Suen, Carole Taylor, Tracy Tjaden, John Twigg PROOFREADER: Meg Yamamoto DIRECTOR, SALES AND MARKETING : Pia Huynh SALES MANAGER: Laura Torrance ADVERTISING SALES: Blair Johnston, Carl Rudnik, Corinne Tkachuk, Chris Wilson ADMINISTRATOR: Katherine Butler Business in Vancouver’s 30th Anniversary is published by BIV Magazines, a division of BIV Media Group, 303 Fifth Avenue West, Vancouver, B.C. V5Y 1J6, 604-688-2398, fax 604-688-1963, biv.com. Copyright 2019 Business in Vancouver Magazines. All rights reserved. No part of this book may be reproduced in any form or incorporated into any information retrieval system without permission of BIV Magazines. The publishers are not responsible in whole or in part for any errors or omissions in this publication. ISSN 1205-5662 Publications Mail Agreement No.: 40069240. Registration No.: 8876. Return undeliverable Canadian addresses to Circulation Department: 303 Fifth Avenue West, Vancouver, B.C. V5Y 1J6 Email: subscribe@biv.com Cover photo: Shutterstock
41 2012: ENBRIDGE DOMINATES HEADLINES 42 2013: TECH TALENT CRUNCH 42 2014: ANTI-SPAM LEGISLATION 44 2015: CLIMATE CHANGE’S HARVEST
PRODUCED BY
44 2016: CONTAINER SHIPPING
29 2002: POST-PRODUCTION STRUGGLING
46 2017: PREMIER’S PLAN A AFTER SITE C
31 2003: COMMODITIES REBOUND
47 2018: DEPARTMENT STORES SCRAMBLE
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BUSINESS IN VANCOUVER
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MESSAGE FROM BIV’S EDITOR-IN-CHIEF
BIV AT 30: NEW PLATFORMS, SAME DEDICATION TO TRUSTED COVERAGE Instagram wasn’t around. Telegrams were. Science World had just opened. The Order of British Columbia was newly established. The Canucks had just drafted some Russian teen named Pavel Bure. Simon Fraser University had opened a downtown campus. The Everywoman’s Health Centre was under siege from anti-abortion activists. Premier Bill Vander Zalm was committed to a local war on drugs. British Columbia’s three millionth person was born. 1989 also saw the birth of our newspaper, and through more than 1,550 print editions and the province’s most adept online business coverage, today Business in Vancouver (with admitted bias in claiming this) thrives with a much more significant wealth of platforms to reach our communities with news, data and commentary. T h i r ty yea rs i n, we del iver a da i ly
podcast, a daily online newsletter, a portfolio of two dozen magazines (one on cannabis, for heaven’s sake), a series of two dozen events (our early Forty under 40 award winners are collecting pensions) and our venerable weekly newspaper that has grown in recent years in some defiance of the trend of journalism’s business model. Our coverage is the breadth of the business canvas: agriculture, Asia-Pacific, energy, entertainment, environment, fintech, forestry, fisheries, hospitality, human resources, law, leisure, manufacturing, marketing, media, mining, politics, real estate, retail, sports, sustainability, technology, tourism and transportation, among others. Our journalists aim for fair-minded treatment and our commentators aim for accurate but thought-provoking argumentation. We haven’t always hit the spot, we
haven’t always been there when we were needed, but we would like to think that our body of work has served the local business scene with journalism that can be trusted and valued. We hope we have been defined by our constant good intentions to reveal and discuss who we are as a community, what our ambitions are to make it more prosperous and how we are earnestly confronting our challenges. It is a privilege to do this, one we will never take lightly, and I hope this magazine provides a taste of what we’ve done over the decades to chronicle the extraordinary change and the enduring culture of our business community. Kirk LaPointe, editor in chief, Business in Vancouver; vice-president, editorial, Glacier Media.
([SHULHQFHɇ+ Excellence Congratulations to Business In Vancouver on 30 years as the voice of business in British Columbia! We share your commitment to working with local businesses to help them JURZ DQG ȾRXULVK LQ D FRQVWDQWO\ FKDQJLQJ HQYLURQPHQW
1850-745 Thurlow Street Vancouver, BC V6E 0C5 7 : URSHUJUH\HOO FRP
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“YOU HAVE GIVEN ME MY LIFE BACK” — Student in Coast Mental Health’s Culinary Training Program
Mental illness affects people of all ages, cultures, education and income levels. Coast Mental Health exists to provide people living with mental illness the critical support they need to recover and thrive. We pick up from where hospital-based care ends, by providing people in need with a place to live, a place to work, and the recovery support services they need to accomplish their goals. If you or your team would like to help people with mental illness rebuild their lives, please connect with us! There are many ways to get involved and make a difference. With compassion and courage, recovery from mental illness is possible!
To learn how you can help, please contact Richard O’Shaughnessy at 604-675-2328, or visit coastmentalhealth.com Charitable No. 86150 8018 RR0001
Coast Mental fp 30534.indd 1
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Transforming the funeral industry ZLWK DÎ?RUGDELOLW\ and transparency Amherst Funeral and Cremation Services is driven by the principle that the best service can also be VLPSOH DQG DÎ?RUGDEOH )RXQGHG by Scott McFarlane, Amherst is a proudly Canadian, locally owned and operated, independent EXVLQHVV )UHH RI WLHV WR ODUJH IXQHUDO FKDLQV DQG RWKHU IXQHUDO homes and chapels, McFarlane was able to base the company on what he truly believed the industry ZDV PLVVLQJ ΖQ $PKHUVW ZDV HVWDEOLVKHG ZLWK WKH Č´UP EHOLHI WKDW DOO IDPLOLHV VKRXOG KDYH WKH ULJKW WR TXDOLW\ DQG DÎ?RUGDEOH IXQHUDO VHUYLFHV ZLWKRXW KDYLQJ WR VDFULČ´FH
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68Ζ7( :(67 +$67Ζ1*6 67 9$1&289(5 %& 604.831.3023 AMHERSTCREMATION.COM
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
1989
B.C. IS STILL FOR SALE Billions of dollars’ worth of B.C. companies have been scooped up by outside interests in recent years. Some argue that loss of local control hurts B.C.; others say the inflow of capital brings a net gain. But no one suggests the out-of-province buying spree is anywhere near over
•UFUK-ZIVANA/SHUTTERSTOCK
JOHN TWIGG
This week the shareholders of venerable Woodward’s Ltd. are to meet and approve transfer of effective control of the company from the longtime B.C. family to – gasp – a team of Toronto-based investors. Should we lower the flag to half-mast to mourn the loss of local control of yet another major B.C. company, or should we ignore the inevitable headlines and accept it as just a normal part of our free-market economy? That question, whether so much of B.C.’s economic infrastructure should be for sale, or what, if anything, should be done about it, will get all sorts of answers. B.C. has a history of outsiders coming in to snap up the most promising ventures, and hence it has a history of exporting dividends and other benefits of ownership – the so-called branch-plant syndrome. Certainly it’s understandable that there are strong mixed feelings about a spate of turnovers that includes, in just the last year or so, Woodward’s, Westar Group Ltd. (formerly BCRIC), Pemberton Securities Inc., Canarim Investment Corp., Continental Securities, Versatile Pacific Shipyards Inc., Core-Mark International Inc., Dillingham Construction Ltd., Bedford Software Ltd., Moli Energy Ltd., Rogers Foods Ltd. (the Armstrong-based miller, not the local sugar company), Pay Less Gas Co. (the dominant gasoline retailer on Vancouver Island) and many more in aquaculture, mining, hotels, financial services, law firms and media, not to mention raw land like the Expo site and the Nicola Ranch. A particularly noteworthy example has been the almost total turnover in B.C.’s small steel industry, with ownership changes in Western Canada Steel, Tree Island Industries, Wilkinson Co. Ltd. and (earlier) Great West Steel Industries (and now the provincial government is courting Taiwanese capital for a steel mill and American capital for a ferrochromium plant).
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In the last three years ownership control has slipped away in Bank of BC, Western & Pacific Bank, BC Forest Products, Crown Forest Industries, CP Air, Air BC, Skeena Cellulose, Yorkshire Trust, MDI Mobile Data International Inc., West Kootenay Power and Light and many more. Even several formerly government-owned assets have been de-patriated: BC Steamship Co., BC Hydro’s Lower Mainland railway and Victoria Gas system (the Mainland gas system was sold to B.C.-based Inland Natural Gas), along with several big parcels of land and bunches of loans. Going back 10 years or so we add names like MacMillan Bloedel, Laurentide Finance, Pacific Western Airlines, Daon Development and a slice of Cominco Ltd., thus former premier Bill Bennett’s intemperate boast that “B.C. is not for sale,” which he thundered when Noranda started going after MB (they just waited a few years). And we’re not talking peanuts here, because the combined value of the assets sold in just the last year is well over $2 billion, and in the last three years it’s probably about $10 billion. “It breaks my heart,” says Vancouver Board of Trade executive director Darcy Rezac of the loss of local control of companies like Pemberton’s (which in recent years has trimmed about half of its 1,100 jobs), but he nonetheless insists “it doesn’t matter where they’re owned and controlled,” because in the long run the pendulum will find its balance. A problem with regretting all such sales is that each has unique aspects, and in some cases the infusion of outside capital has created a stronger entity that’s still essentially based here and run from here. The prime example is MDI, the Richmond-based manufacturer and retailer of computerized dispatch systems, which was grabbed last year by giant Motorola Inc. for about $100 million. But instead of being relocated to, say, the Silicon Valley, MDI’s head office has stayed here, and in fact enjoyed what president Barclay Isherwood calls “a happy union.” Motorola merged in its own mobile data division and gave the new company the financial backing to double its sales (to about $100 million this year) and hence double its staff to about 800 – two-thirds of whom are in Richmond. “The new owners have given us all the autonomy that anyone could ask for – with the attendant responsibility,” said Isherwood. Such cases support the arguments of free-enterprise economists like Fraser Institute founder Michael Walker, who says “the nationality of the owner has no significance regarding the location of assets.” “I’m always very nervous about putting restrictions of any kind on ownership because they inevitably lead to economic distortions,” adds stockbroker Tony Hepburn, president of Odlum Brown Ltd., explaining that as a trading province B.C. should be open to a free flow of capital. É
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Community and Collision These two words aren’t often used in the same sentence. But in the case of Fairlane Collision, they not only fit together but they are the root of the Fairlane experience. We have been serving the community of South Vancouver for 40 years as an automobile collision and body repair facility. We’re not alone in this field but we are different. Keeping high standards of both our workmanship and our quality customer service at Fairlane Collision is the key to our 40 year history in this collision repair business. We’ve chosen to pass the torch to a trusted family member to continue to grow an already stellar reputation by taking care of our customers directly. This epitomizes how Fairlane is different than most, and trusted by many. Fairlane is built on family values and is proud to share these values with their customers.
8230 Fraser St.,Vancouver, BC 604.321.2452 | fairlanecollision.com
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
1990
NORTH SHORE UPDATE While the future of the waterfront weighs heavy on North Shore minds, luxury condos, film businesses and Horseshoe Bay ferry expansions keep rolling along ROSEMARY ENG
The fate of lands owned by Versatile Pacific Shipyards Inc. along the waterfront is the multimillion-dollar question on the North Shore. The shipyard property, in North Vancouver city at the foot of Lonsdale Avenue near popular Lonsdale Quay Market, has become ideal for harbourfront residential and commercial use. In the recently completed “168 Chadwick” residential tower built by Bosa Bros. Construction Ltd. on the other side of the Quay, some 70 per cent of 92 units have been sold in the $200,000 range with eight penthouses going for close to $1 million each. Even though Versatile has won a $120-million contract to build a new vessel for BC Ferry Corp., much of the work will be done at Versatile’s shipyard. Versatile chairman and CEO Peter Quinn says up to 70 per cent of the North Shore shipyard’s 18 acres has been lying idle in past years. “That’s very common knowledge.” Even with the ferry contract Versatile will not be used to full capacity. “The market has changed. People have to understand that,” says Quinn. The land could be put to better use, he says, but he won’t go any farther. “We have lots of plans but it’s something I’m not prepared or permitted to put on the table,” he says. Gentrification or industry are the inevitable choices. The North Vancouver Chamber of Commerce votes for industry. “We want industrial properties to be retained as such. Industries should remain to promote jobs,” says president Bill Perrault. The District of North Vancouver, City of North Vancouver, North Shore Economic Development Commission and provincial Ministry of Regional and Economic Development are designing a questionnaire to survey current waterfront occupants on what kind of water access they need, and why, to get a handle on pressures for waterfront and industrial lands, says Jim Masterson, district deputy municipal planner. Luxury highrises have started sprouting all over Lower Lonsdale. Cressey Development Corp. took city council and area residents by surprise by discovering that no height limit existed in areas of Lower Lonsdale, then took advantage of that to build an unprecedented 29-storey building called the Observatory in the 200-block of West Second Avenue. Up the hill in central Lonsdale, the city had been anticipating that a new $58 million residential/retail/office complex at 17th and Lonsdale would act as a catalyst to stimulate revitalization, says city development services director Fred A. Smith. M. & M. Investments Ltd. proposed new development for the southeast corner. However, M.& M. president Paul Murphy says the banks were not keen on backing a residential project, especially with what he called a “glut” of residential towers in Lower Lonsdale. In North Vancouver district, the Bon Street Group is waiting for final council approvals on a 90,000-squarefoot shopping centre with a 36,000-square-foot Canada
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Safeway anchor near the Mount SeyThe North Shore, mour Parkway and Mount Seymour Road intersection. Plans call for about including the Horseshoe 30 stores and office and professional Bay ferry terminal, is space, says vice-president for property Jeff Whitlock. a hub of renovations, Eastward along the waterfront, the redevelopment and Burrard Indian Band, which owns land along Dollarton Highway toward Deep expansions •RONNIE CHUA/ Cove, has put out by-invitation-only SHUTTERSTOCK proposal calls for development of a five-acre parcel along the northeast corner of the reserve adjacent to Seymour Golf & Country Club. Proposals are expected from as far away as Japan. Elected band chief Leonard George says the new project could be a launching pad for further development on the 265-acre reserve. In West Vancouver, home to many chiefs of industry but to no industry itself, the West Vancouver Chamber of Commerce is seeking council support for a residents’ survey about local retail services. In the municipality which can boast the highest median incomes in the nation, “there’s no reason why businesses can’t do well,” says chamber vice-president Don Youngson. The Ambleside area has a high business turnover and activity on the north side of Park Royal Shopping Centre is slow, he says. With survey data, the chamber might be able to recommend ways “to improve on the number of turnstile clicks,” he says. The waterfront-facing side of Bellevue Avenue has taken on an upscale look with construction of new shops facing the new Ferry Building plaza and pier. Calmar Housing Ltd. has plans to build 10 commercial and 50 residential units on property at the corner of 14th Street and Bellevue. The residential units would sell in the $450,000 to upper-$600,000 range. É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
1991
FIRST CLASS ALL THE WAY Incentive travel is the latest refinement of the convention business, and it means more money for Vancouver’s service sector
EVE LAZARUS
At over half a million dollars for a day of dining and entertainment, the Ricoh convention was the biggest payday ever for the Vancouver Trade and Convention Centre • BIV FILES
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So. You’ve worked hard all year, you made your quotas, and what does the company do? It flies you halfway round the world, puts you up in a first-class hotel and lays on the works – no expense spared. Sounds good, huh? Oh yes, oh yes, oh yes, choruses Vancouver’s conventions service sector, which has started to get a taste for incentive conventions, and is hungry for more. Major conventions mean business for local firms, but incentive conventions are even more lucrative. Still relatively new to Vancouver, these bring anywhere from a couple of hundred to several thousand delegates to Vancouver, and are on the increase as this city becomes a choice destination for meetings. While a typical convention is structured around an educational component, the incentive-travel market is a carefully structured motivational outing designed to reward a company’s top achievers. Huge budgets take delegates to exotic locations where, as privileged guests of the management, they wallow in the lap of luxury. Recent studies have shown that over $500 is spent per day for each delegate at an average convention and the economic spinoffs for incentive conventions are estimated to be even more. According to an economic impact assessment study by Tourism Vancouver, about 65 cents of every dollar is spent on accommodation, food and drink. Another 12 cents goes for shopping and souvenirs, seven cents on ground transportation
and the balance is divided among entertainment, recreation and miscellaneous items. Tom Walker, executive director for Tourism Vancouver, says: “It’s an important market for Vancouver because it uses more of a city at the high end – first-class accommodations, transport – and they use as many venues as they possibly can.” Tourism Vancouver estimates that of all business travel and tourism expenditure generated in North America, about six per cent is incentive travel-oriented. That figure is projected to grow at a rate of 13 per cent annually. The main difference between incentive travel and a typical convention is that normal convention delegates generally pay their own way – or at least part of it. In incentive travel, the company picks up the entire tab, usually without wanting to appear sensitive to price. Incentive travel is still relatively new to Canadian companies, but it’s used heavily by multinational corporations that can afford to write off $2 million as a routine marketing expense. In the past, incentive travel organizers have taken their delegations to places like Hawaii or the Bahamas. “That’s changing because they’re finding that the sun is one thing, but they’re also looking for things to do and Vancouver has that,” explains Norman Stowe, vice-president for marketing and guest relations for the BC Pavilion Corp. “There are probably three or four major Japanese pieces of business that we can bring every year to Vancouver and it’s really only a matter of establishing a relationship.” Mark Wyatt has recently been hired as project manager for Japanese incentive programs at BC Pavilion Corp. to repeat the record-breaking revenues of the Ricoh Co. incentive gathering. He was the local organizer for that event, which recently spent millions of dollars to bring 700 top sellers and their spouses to Vancouver from Japan. “It was the 55th anniversary for Ricoh winners, the result of an incentive program that the company ran for nine months in Japan,” says Wyatt. Those with the highest sales figures from eight different regions of Japan were eligible for the convention. Ricoh was the first Japanese incentive-travel convention to come to Vancouver and the results left many local wallets bulging: Japan is “is a difficult market to crack ... but I can’t understand why nobody has wanted to go after it before,” says Wyatt. “There are 120 million people living in Japan – a country a third the size of B.C. – and they love to come here. They like the skiing, they like the mountains, they like the water, the golf.” É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
1992
BETWEEN TWO WORLDS With a choice location at the mouth of the Fraser River, the Musqueam Indian Band is expanding its business scope. And Chief Wendy Grant says it will be very much on the band’s own terms ROSEMARY ENG
On the banks of the Fraser River, where the water washes ripple patterns into the mud, the grass grows tall, as it did a thousand years ago. Nearby, along Southwest Marine Drive, shorn grass in the European style stretches along the roadside. The Musqueam People of the Grass live between the river of water and the river of lawns. It’s Wendy Grant’s job to see that her people secure their own place between these two worlds. Grant, 44, is the elected chief of the Musqueam, a job unlike any other in Canada. “If you look at a municipality and a mayor, at a prime minister federally and a premier provincially, not just me but every chief in this country has those responsibilities,” she says. “Our people still look at their chief as someone who is very closely tied to them, so that with individual concerns on a day-to-day basis they still feel they have the comfort to approach their chief. If somebody’s having a problem with their child in school, they’ll come into your house and they’ll sit down and talk to you. You go from that to sitting down with the prime minister of Canada.” Today, Grant is sitting in the sunny living room of her sister, Gail, in a comfortable house on the reserve. She explains that as the Musqueam – like Indigenous peoples across Canada – move toward self-government, they bear the economic responsibilities that go with self-determination. So the function of economic development officer is added to the chief’s role. “Business and economic development have been going on in Musqueam since the early 1930s, and it’s been incremental progress. The Department of Indian Affairs, in its wisdom at that time, was talking about taking the people in our community and teaching them to be farmers, to use the land for generating revenue. “What they did is bring in Chinese farmers to work along with our people. It didn’t succeed. What happened is the landowners leased the land to the Chinese farmers. So they were creating their own economics that way, not getting involved in the actual day-to-day operations of the farm. “And then, as you watch the progress of Musqueam, you’ll see the individual leases [develop into larger-scale agreements].” The Musqueam are also involved – as are bands across the country – in the issue of Indigenous fishing rights. This year, Ottawa announced the creation of a Lower Fraser Fishing Authority involving the Musqueam and Tsawwassen nations and the Sto:lo Nation and Tribal Council. The agreement spells out the allocation of 395,000 sockeye salmon to these Indigenous groups, as well as more limited harvest allocations for chinook, chum and coho. Also in the package is $1.3 million to help train Indigenous groups in fisheries management, catch-monitoring and fishing-season enforcement. Under a one-year pilot project, a percentage of the 1992
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catch is to be distributed to the band, and the bal- Chief Wendy Grant calls financial ance can be sold on the open independence a natural offshoot of market. Once the fishery issue is Indigenous peoples’ search for selfironed out, says Grant, exdetermination •RANDALL COSCO panded economic programs such as Indigenous-operated fish processi ng a re bound to follow. A venture already up and running is Celtic Shipyards (1988) Ltd., which represents a new turn in economic development for the band, not least because it involved the purchase of land. With much of its land tied up in long-term leases for housing and golfing, the band has gone from being landrich to land-poor, with about 160 members of a band of 850 people on a waiting list for reserve housing. The Musqueam spent $3 million acquiring eight acres of provincial property along the Fraser for the shipyard site. Part of the business plan was an emphasis on job training. “One of the things we realized is that people were always making a profit off us, and our people weren’t learning any new skills,” Grant says. “They were just sitting there, collecting the revenue, as small as it was. “So what we did was set up [Celtic] with the understanding that we would get the best people we could, the best journeymen” to train band members in shipbuilding skills. She proudly reports that young Musqueam are enjoying greater opportunities than ever. “You can become a recreation worker, because we have our own recreation program. You can go in for gardening because we have our own land. You can go in for land management and learn how to look after title of land and leaseholds, because we have our own land-management program.” É
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BIV DISTINGUISHED BY ITS FOCUS ON PEOPLE – NOT JUST PROFITS – OVER THE DECADES
JANET AUSTIN
American historian and educator Henry Steele Commager once said that newspapers contain “the raw material of history” and document “the story of our own times.” For 30 years, Business in Vancouver has been fulfilling that mandate and recording Vancouver’s history as it unfolds each week. In the process, the publication has become a vital resource that helps British Columbians better understand the issues and industries that drive our economy. Just as importantly, BIV has also shone a spotlight on the women and men who are the lifeblood of our business community – from C-suite executives to entrepreneurs who take significant risks to turn big ideas into small businesses. It’s those stories about people that I have cherished the most as a BIV reader for the past three decades. I first moved to Vancouver from Alberta in 1988, just one year before BIV founder Peter Ladner decided to launch a business-focused weekly newspaper. I still remember the publication in those early days, when it was an ambitious upstart fighting to carve out a place in Vancouver’s competitive media landscape. One of my first interviews with BIV was for an early column called “Let’s Do Lunch,” and the topic was a scholarship I had created for women in the trades. I’ve had many opportunities to speak with BIV in the years since, through my past leadership roles at BC Housing, Big Sisters of BC Lower Mainland and YWCA Metro Vancouver, my term as chair of the Greater Vancouver Board of Trade and, most recently, in my current role as lieutenant-governor of British Columbia. One of the things that always impressed me about BIV’s editorial team is their conscientious effort to illustrate the intersection of social issues and economic issues. As a former CEO in the non-profit sector, I believe this holistic and well-rounded approach to journalism is what sets BIV
apart from many other traditional business publications. I would particularly like to thank the BIV team for giving me a platform during my tenure as CEO of YWCA Metro Vancouver to write about many societal issues in British Columbia. Over the years, I have penned articles for BIV about gender equality, immigration, housing affordability, child care and the systemic inequities facing our Indigenous Peoples. The opportunity to share my perspective on these issues with business leaders is something I have never taken for granted. It is also laudable that BIV has led the charge on recognizing change-makers in our community through its annual awards for CEOs, young professionals under the age of 40 and influential women in the business community. It’s no secret that these are challenging times for traditional media outlets, with many print publications struggling to adapt. Despite these rapid changes in the media industry, BIV not only has survived but has expanded its readership and its stature. I believe it has achieved this success by focusing on its niche, providing a stellar product and building strategic partnerships with community organizations such as the Greater Vancouver Board of Trade. Today, Business in Vancouver Media Group doesn’t just publish a weekly newspaper; it also publishes more than a dozen magazines that take a deep dive into some of the emerging industries in British Columbia, including technology, life sciences and environmental sustainability. BIV also continues to evolve and negotiate the transition to digital journalism by embracing video content, email newsletters and a series of thought-provoking podcasts. It is that spirit of ingenuity, imagination and dedication to storytelling that has enabled the team at Business in Vancouver to thrive over the past three decades, and I’m very excited to see where they take the publication next. Congratulations on your 30th anniversary, BIV! É The Honourable Janet Austin, OBC, serves as the 30th lieutenant-governor of British Columbia.
ONE OF THE THINGS THAT ALWAYS IMPRESSED ME ABOUT BIV’S EDITORIAL TEAM IS THEIR CONSCIENTIOUS EFFORT TO ILLUSTRATE THE INTERSECTION OF SOCIAL ISSUES AND ECONOMIC ISSUES
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
1993
Replica of the SS Empress figurehead at Stanley Park in Vancouver. China has begun to eclipse Japan in importance to B.C. overseas trade •RONNIE CHUA/SHUTTERSTOCK
ECONOMIC OUTLOOK 1993 B.C. feels the ripple of every wave that sweeps the Asia-Pacific economy BIV STAFF
Every ripple in the economies of major Asia-Pacific nations eventually washes upon B.C.’s shores. Now that Japan is in the process of economic retrenching, B.C. is reporting fewer big Japanese investments and acquisitions. And in line with the spectacular growth that is gaining momentum in China, we are seeing an increasing number of Chinese trade delegations in search of business partners. B.C. has come to expect investment from Japan, so the ebb has been disconcerting. But if the economic predictions of Kenneth Courtis come true, that economic flow should resume. Courtis, who is Deutsche Bank’s capital-markets expert in Tokyo, says despite the global economic slowdown and economic pullback in Japan, the future of Asia-Pacific is on course for dynamic growth. Japan has experienced probably the greatest stock market crash seen in major markets since the 1930s. Japanese banks have reduced lending, and the real estate market there continues to fall. Nonetheless, the outlook is good, says Courtis. Japan’s economic policy has been to invest “literally trillions of dollars” to reposition itself. In 1991, as Japan was sliding into recession, its program of domestic investment continued. The Japanese private sector invested $5,320 per capita in plant and equipment into the domestic economy, in comparison last year to the U.S., which invested $2,177 per capita, and Germany, which invested $2,682. Research and development follows a similar pattern. Last year, Japan invested $768 per capita in nonmilitary R&D, compared to $452 per capita in the U.S. and $468 in Germany.
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“While America might be giving to its workers the best electric typewriters money can buy, the Japanese are giving to their workers the equivalent of an entry-level electronic workstation,” says Courtis. “It’s this enormous investment gap in real terms of hundreds of billions of dollars that provides the underlying long-term momentum for Japan. No matter how good you are and how hard you work, you can’t compete with the electric typewriter against the electronic workstation.” The present-day economic fallout is a result of a Japanese economic reversal from “having essentially put the economy on steroids” between 1986 and 1991, he observes. Japan is now undergoing very aggressive cost reductions. Nissan announced it is cutting costs 40 per cent over the next four years, and Toyota says it will be cutting costs 10 per cent per year over the next five years. Tremendous pressure is coming to bear on suppliers and wages as Japan melts off excess fat. China, on the other hand, is gearing up for growth. Monica Gruder Drake, executive director of the Vancouver-headquartered Canadian National Committee for Pacific Economic Co-operation, says because of dynamic activity between Taiwan, China and Hong Kong, that region has been dubbed the “growth triangle.” China’s economy is expected to grow at the sensational pace of 10 per cent, she says. Not to be ignored in China’s growth process are the cultural and economic ties with Taiwan and Hong Kong. Many Taiwanese with mainland roots are investing heavily in their original province of Fujian. And Hong Kong continues to be key in the economic growth of southern China, in particular because of its advanced container port, well-organized financial-banking system, airport facilities and other modern services that foreign traders and investors feel confident working with, she says. As for the Association of South East Asian Nations, growth is also going to be high, on average eight to nine per cent, says David Bond, Hongkong Bank of Canada’s chief economist in Vancouver. É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
1994
THE TAIL WAGS THE DOG Finally a city, and still growing like there’s no tomorrow, Surrey is an increasingly powerful part of the Lower Mainland. People want to live there, businesses want to locate there, and one more thing – it’s got less crime than Vancouver JODIE HEAP
Station Tower, part of the Gateway development project in Surrey City Centre, will house the Bank of Nova Scotia in 16,000 square feet, which boosts Surrey’s credibility as a viable business centre • SUBMITTED
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Forget the jokes. Check the numbers. The Greater Vancouver Regional District (GVRD) reports that in the 30-year period between 1961 and 1991, Surrey’s population grew by 246 per cent, from 70,834 to 245,173. It officially achieved city status last September, and the people keep coming. Surrey’s planning and development department predicts that the population of Surrey, one of the fastest-growing cities in Canada, will reach 500,000 by 2011. Along the main arteries of Surrey these days, it is construction cranes, not cows, that dot the landscape. Surrey City Centre – the core of which lies roughly at 104 Avenue between 134 Street and the King George Highway – is being touted by local officials as Greater Vancouver’s second downtown. Three new SkyTrain stations (Gateway, Central and King George) are expected to open in the near future in the centre, and commercial and residential development is quickly following suit. The GVRD predicts that this centre will be home to more jobs than any other regional town centre in the Greater Vancouver area. “This area will grow from having 21,000 jobs [three per cent of the region’s total] to 122,600 [eight per cent] in 2021,” says a recent report. Impressive numbers for a place that has been fighting a reputation for crime, drugs and prostitution for years. But the people are here, the jobs are coming, and local authorities are quick to point out that Surrey is not as crime-ridden as other areas in Greater Vancouver. So don’t be surprised tf your time-worn Surrey jokes raise little more than a half-hearted chuckle at the next dinner party. Chances are, a number of the guests either live or work there already, or are planning to move there soon. In recent years, homeowners and developers have flocked to the Fraser Valley in search of cheaper housing. But recent demand around the Lower Mainland for single-family residential housing is making the phrase “affordable housing” an oxymoron. And while the single-family housing market has slowed considerably from last year’s record-breaking activity, prices seem to be still riding the wave created from in-migration to the province and government incentives such as the RRSP and five per cent downpayment programs. In 1992, single-family home sales reached 75,332 at an average price of $207,114. In the year just ended, however, demand had clearly cooled while prices continued to climb. The board reports that 4,093 homes changed hands in 1993, at an average price of $233,586. How high can prices go before weak demand forces them down again? Realtors, as usual, tend to be optimistic about what the coming year will hold for housing
prices, positive outlooks for homeowners and prospective homebuyers alike. “The numbers of sales [in the Fraser Valley] are down 26 per cent over last year,” says Stuart Kirkpatrick, president of the Fraser Valley Real Estate Board. “But the Fraser Valley is still in the affordable price range. We’re looking at very stable prices for at least the next quarter.” And come springtime, when activity picks up again after the usual winter lull, Kirkpatrick figures prices will rise even further. He dismisses any chances of prices starting to fall in the coming year. “There have been rumours of price decreases in the past six to eight months, but we’ve seen no actual trend toward price decreases. I don’t see that happening.” So single-family housing may not be an affordable option anymore, and as a result, townhouse and apartment-condominium development has surged. Surrey’s planning department says the number of single-family starts in 1993 is generally down from 1992, while the number of multiple-unit starts has increased considerably. “Multi-family dwellings continue to outpace singlefamily dwellings by a margin of two to one,” says the report, based on statistics for the third quarter. “[1993] will be a record year for multi-family development in Surrey.” OFFICE VACANCY LESS THAN ONE PER CENT
As population shifts eastward into the Fraser Valley, large companies and small businesses are following suit. But there’s a problem: there isn’t much in the way of office to accommodate them. The Surrey office market currently has a vacancy rate of less than one per cent, although there are a few major commercial developments coming on stream that should ease the pressure somewhat. Voth Bros. Developments Ltd. is still pre-leasing the first of two office towers proposed for a mixeduse development at 152 Street and 105 Avenue in the Guildford area of Surrey. Kerry Kukucha of Voth says there are firm commitments for 20 per cent of the 85,000-square-foot building, while 60 per cent is “in negotiation.” The company also has a development permit in hand for the residential portion of the project (134 condominium units in three wood-frame buildings) and is gearing up to pre-sell in February. Meanwhile, over in Surrey City Centre (formerly Whalley), Intrawest Corp. has snagged a couple more tena nts for Station Tower, the 18-storey, 242,000-square-foot building going up at 13401 108 Avenue, beside the new Gateway SkyTrain station. The Bank of Nova Scotia signed up for 16,000 square feet on the main floor of the office tower, and law firm Thompson & Elliott, currently at 1285 West Broadway, has also leased 2,000 square feet. É
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HAPPY 30TH BIRTHDAY, BUSINESS IN VANCOUVER JOHN HORGAN
When Business in Vancouver first rolled off the presses on October 2, 1989, the Berlin Wall stood as a barrier between peoples. Nelson Mandela languished in prison. The Simpsons and Seinfeld had yet to debut. Earlier in the year, a British computer scientist came up with the idea for the World Wide Web. His boss thought the proposal was “vague but exciting.” Today, BIV remains a force in print and online. Your past and present contributors are leading opinion and policy-makers in our province. You’ve won your fair share of Jack Webster Awards for excellence in journalism. And your listicles are as refreshing as Popsicles. Thirty years hasn’t changed BIV’s ability to connect readers to the people and businesses that are the heartbeat of this city. Business in Vancouver has always had its finger on the pulse of what it means to live, work and own a business here. Your pages are a source of information and lively debate, especially on civic issues. You make space for different voices and perspectives. At a time when good news in print journalism can be all too rare, a milestone of this nature is cause for celebration. Our government recently passed a two-year anniversary. It has been an honour to pilot our beautiful province on a steady course through some rough global waters. The key to building a strong, sustainable economy is
to invest in people. We are providing opportunity for all. Opportunity to grow. Opportunity to find good jobs. Opportunity to get a quality education, to be healthy, to be environmental stewards and innovators as we build a strong, sustainable economy for everyone. We’re implementing a made-in-B.C. plan to provide quality, affordable child care to thousands of families. Our 30-point housing plan will build affordable homes and is helping moderate the real estate market. For 23 months in a row, British Columbia has had the lowest unemployment rate in the country. A strong economy has also delivered a 4.1 per cent increase in average hourly wages, ending years of sluggish wages while giving consumers more money to spend in their communities. We are making infrastructure investments in every corner of the province. We are creating an environment for people and businesses to thrive and get ahead. Investing in people is the key to guaranteeing a healthy economy for generations to come. We are on the right path. Don’t take my word on it. Look at the report cards from Fitch, Moody’s, Standard & Poor’s. We have a diverse and strong economy, low debt and a triple-A credit rating. Much work has been done. Much work remains to be done. In newspaper lore, -30- means end of story. For Business in Vancouver, 30 is the beginning of a new chapter. Congratulations and best wishes for many more good years to come. É John Horgan is the premier of British Columbia.
THIRTY YEARS HASN’T CHANGED BIV’S ABILITY TO CONNECT READERS TO THE PEOPLE AND BUSINESSES THAT ARE THE HEARTBEAT OF THIS CITY
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
1995
JOURNEY’S END Celia Duthie covered a lot of ground before she turned around and came home to run the family bookstore that had been waiting for her all along
MEREDITH SUEN
“It was wonderful to discover that all those dead-end ventures were of use to me as a bookseller,” says Celia Duthie of her experiences as a student of Arabic texts in Egypt, a raspberry picker and a hitchhiker in Central America, because all the roads she travelled led straight back home to the Robson Street bookstore of her father, Bill Duthie: the book business was in her blood. Books have been a constant in Duthie’s life – at 44, she is only six years older than Duthie Books itself – and she remembers that one of her first tasks as a child was hand-writing the Christmas cards that went along with the gift books. Nor did she miss the pleasures of reading: “I was always a dedicated reader. I recall going to first grade bragging that I could read already.” So in 1977, when news arrived that her father had been diagnosed with a brain tumour, she cut short her studies in Egypt to stand in for him. Her return pleased her father, although it may not have been much of a surprise. “He was hopeful that I would take it over. He realized that I had to go out and explore every other possibility before I would come back. “Deep down, he was a book man. Business issues didn’t interest him to speak of and he was just happy to keep the business open year after year.” Celia Duthie, however, seems to have grasped both aspects of the book business. When she became president of the company in 1982, it had gross revenues of between $2.5 million and $3 million: today, that figure is $14 million. Prior to her direct involvement, the growth of Duthie Books had been inconsistent. The first branch opened on West 10th Avenue, about five years after the Robson location, and after another five years came “a very hip store” on Seymour Street in the days when Eaton’s was on Hastings. After another half-decade, outlets opened in the west-side Arbutus Shopping Centre and the downtown financial district. But when Eaton’s moved, both the Seymour and the financial district stores closed. It was at this point that Duthie returned to get into the business. “It didn’t take me long to realize that it was the most wonderful place to be – right downtown, right on Robson and having a certain amount of power and a lot of prestige,” she says. By the time she took charge in 1982, she was using the launching several related business ventures with the help of her husband, Nicholas Hunt, who was also born into the book business: his father wrote, edited and published over 150 books on gardens and gardening, and worked in publishing and distribution in England. “When Nick and I first got together, we got carried away,” she says, referring to the short-lived restaurant and art gallery businesses set up behind Manhattan Books & Magazines on Robson. But they learned their lesson and came out with “a fair amount of nerve and savvy about business matters.” Hunt currently oversees Macneill Library Services (named after Duthie’s mother, Mary Frances Macneill), Duthie Books’ wholesale division. “My father fought various battles to keep them separate. It wasn’t fair if wholesale companies open retail
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operations and would buy with bigger discounts,” says Duthie. Macneill supplies materials for the Knowledge Network, BC Ferries Corp. and the University of Northern British Columbia Expansion has been more orderly in recent years. Duthie Books now has a store on West 4th Avenue and has revamped its flagship store downtown. By ea rly September, it w i l l open a nother high-profile location – 1,300 feet in the new Library Square. “I’m looking forward to doing a lot of joint author events, readings and establishing a regular reading series because we’ve never had a location that could accommodate it,” says Duthie. Nor is she stopping there: in mid-July, she will hear the results of her bid to open in the Vancouver International Airport, and the company is already attracting book lovers to its site on the World Wide Web, where they are greeted by the Latin motto Littera scripta manet (the written word remains). The electronic world has been serving the written word at Duthie Books since 1985, when an inventory-control system developed by a U.S. bookstore was installed. “It was something my father always eschewed,” remembers Duthie. “He did not want an inventory-control system; he wanted it all in his head. That became more and more impossible,” she says, noting that the Robson store can carry up to 80,000 titles. The Reader, a quarterly journal of book reviews and an earlier Celia venture that survived, was put on the Literascape website two years ago. A year later, the Virtual Bookstore was started, and it now receives about 100 enquiries a day from readers in such places as Japan, Germany, Peru and Finland, The website also includes a news section and a services section. In February, the site was beefed up, allowing searches to be completed more quickly. The site is selling books, but Duthie doesn’t expect the project to sustain itself for another six months. That’s fine, she says, because the investment is balanced by the publicity the site is receiving. While Duthie Books on Robson is as much a landmark as the old Birks clock at Granville and Georgia used to be, the two locations will soon have something else in common: this summer, the former jewelry store will reopen as Bollum Books, Duthie’s first major competitor. But that doesn’t worry Duthie, who sees it more as a chance to rally staff and polish service. “My father used to say that in the book business, the more the merrier. Take Portland – it’s an astonishing book town. Even though there’s Powell’s, which is a huge bookstore, all the others seem to survive,” says Duthie. “The chains and Book Warehouses never seem to affect us. In fact, Sharman [King] loves to open near a Duthie’s because people come to Duthie’s and go down to his store, so we both do well.”
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Celia Duthie: ready for competition • RANDALL COSCO
And people opening bookstores must have experience, she warns (Bollum is an entrepreneur with a recent background in retailing eyeglasses). The business is an art, she says, that only gets better with time and commitment. And after more than a dozen years running the business, she feels she is still perfecting her talent. “It’s the most wonderful business to be in because you’re learning something every day. Being hit with an array of questions over the course of the day, you’re bound to come across authors, subjects, titles that you’ve never encountered before,” she says, adding that she tries to get out of her office and into the stores at least once a week. “The reality of the book business is that it’s not a hugely profitable business; it’s largely a service. All of us are in it because we enjoy the book world: we enjoy the customer base, we enjoy our supplier base. And also we’ve all got heavy book habits that we need to satisfy. I would need a stupendous income if I didn’t have a bookstore,” says Duthie, who usually reads five or six books at a time, not including the various trade journals. É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
1996
SIGHT UNSEEN Real estate marketing wizards Bob Rennie and Dan Ulinder are masters of alchemy, spinning dreams of buildings into gold
JAMES RISDON
Bob Rennie (left) and
It’s just after 5 p.m. at Milestones restaurant when real estate marketers Bob SCHAEFER Rennie and Dan Ulinder walk in, find their table and sit down. Within minutes, Rennie’s cellular phone rings. It can’t wait. Rennie takes the call, apologizes and puts the phone away. Within minutes, it rings again. And again and again and again. During the next four hours, Rennie and Ulinder pass the phone back and forth, one talking business while the other answers questions for this interview. When a caller asks Ulinder where they are, he says “Earls” and Rennie jumps in to correct him. The mistake is understandable: Rennie and Ulinder spend so much time in Robson Street restaurants that they tend to blur together. Rennie claims to know the Milestones menu by heart. Although Ulinder Rennie Project Marketing officially has its offices on the ninth floor of 1040 West Georgia Street, Rennie says he doesn’t actually have his own office, and the two work primarily out of display suites, restaurants and other people’s offices. At 39, Rennie still works 16-hour days and seven-day weeks when he’s getting a real estate project ready for its marketing blitz. During his “slow” weeks, he puts in 12-hour days and is on the job at least five and a half days out of seven. His friends say he never cooks at home, meeting people over breakfast, lunch and supper instead. Some days, he has back-to-back breakfast meetings. Ulinder, 45, is equally driven and works similar hours, but has kept a much lower public profile since teaming up with Rennie about five years ago. The last media report of any note on Ulinder dates back to 1992, when he ran Urban Pacific Financial Corp. and specialized in converting apartments to strata-titled condo buildings. The following year, he formalized his association with Rennie and the two set out turn the local real estate industry on its ear. They had begun in 1991 with an 80-condo project in Burnaby called Augusta Grove. The Winnipeg-based owner, Qualico Developments Ltd., had heard of Ulinder’s condo conversions Dan Ulinder•DOMINIC
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and wanted him in to sell Augusta Grove within 120 days. At the time, Rennie was selling a house a day in Burnaby and East Vancouver, and Ulinder wanted to team up to move the Augusta Grove units. Ulinder wanted Rennie badly enough that he tracked him down to a campsite in Oregon where he was vacationing with his family. At first, Rennie refused to get involved, insisting that what he did was sell houses, not condo projects, but he changed his mind when he realized that dealing with a single vendor would allow him to move more real estate than chasing individual listings for houses. Project marketing for condo buildings was still in its infancy at the time, and the pair had to figure out how much each condo was worth. Royal LePage was competing for the Augusta Grove listing, and its agent figured the units were worth $122 per square foot, but Rennie disagreed. He walked in, took a look around and decided the one-bedroom condos were worth $89,000 and the two-bedrooms could sell for $115,000. That averaged out to $145 per square foot, and Rennie was on the money: the building sold out in eight days. In May 1992, they took on the marketing for the Village at Surrey Place on the King George Highway, which had just been purchased by Allied Holdings, controlled by Peter Ng and Anthony Eng. With 75 apartment condos and 39 townhouse units, it was a much bigger deal than anything they had done before, but they sold it out and brought in about $1 million more than the owners had expected. So when Allied bought a parking lot and proposed to develop it into a 189-unit condo building the following year, the owners went back to Ulinder and Rennie. Until then, the project marketers had never pre-sold a building, and Rennie was uncomfortable with the idea of selling something that hadn’t been built yet. Although pre-selling was by then common in Asia, it was still rare in the Vancouver market, and he had serious doubts as to whether local buyers were ready for the concept on such a large scale. But on the day of the marketing launch, his doubts vanished, along with the units, in four hours and 22 minutes. With 34 projects now behind them, Rennie and Ulinder credit much of their success to long, hard hours, but while they work a lot, it’s more than that. Although Rennie’s “aw, shucks” style and outstanding sales are what make the news, Ulinder Rennie Project Marketing packs a big wallop in expertise. Rennie is quick to credit Ulinder as the “real brains” of the partnership, and he is highly respected in the industry for his knowledge. He was head of the University of British Columbia’s real estate program and set up a comparable program at the British Columbia Institute of Technology before going into business for himself. Demographer David Baxter, who taught Ulinder at UBC and later went into business with him as a partner in Urban Pacific Financial, says he became a great teacher and is now a “superb” analyst. Baxter says he doesn’t know of anyone “who can take apart the financials of a real estate deal and understand how it’s structured” like Ulinder. With Rennie’s ability to assess the value of real estate and market it and Ulinder’s savvy in putting together deals, Baxter figures the two are easily the best in the industry. É
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1997
PAUL LEE: AHEAD OF THE GAME The problem: keep Electronic Arts living on the edge even while it keeps getting bigger
MYRIAM BEAUGÉ
Paul Lee may wear Dockers pants and a short-sleeved shirt and work in a studio filled with toys and models, but he isn’t playing games. The 32-year-old general manager of Electronic Arts (Canada) Inc. (EAC) is too busy leading a booming company that creates computer games that take a year to develop but have sales cycles of anywhere from only one day to nine months. Lee, who joined the Burnaby-based company as a principal in 1989, has seen it grow from 70 staff and $3.2 million in revenues that year to 475 local staff and an estimated $130 million in revenues last year. Now his job is to make sure EAC’s structure and culture stay conducive to creativity, while at the same time applying the kind of managerial vigilance that will hopefully secure the company’s future. A division of San Mateo, California-based Electronic Arts, Inc., of which Lee is a vice-president, EAC produces games such as FIFA Soccer, PGA Tour Golf, NBA Live, Triple Play Baseball and The Need for Speed. About 60 per cent of the products are sold in North America, with the remaining sales made in Europe and Asia. Because of the ephemeral nature of its products’ shelf life, the struggle is to stay as responsive as a small company, despite its size. Meaning that, in order to keep getting bigger, it has to keep thinking smaller. Lee has tackled this challenge by creating an environment designed to let the people who made the company what it is – namely the employees who design and produce the games – thrive. To do this, Lee organized the company in teams built around product groups, or franchises, as he calls them. This creates a dynamic where the groups get to both challenge and support each other. Lee says each team has a manager, but not a traditional hierarchy. “Group managers don’t necessarily outrank everyone else in their group. In fact, they often don’t,” he says. “We try to establish career tracks in which people can grow because they drive the company. But it’s not because someone chose the management route that they are senior to a software engineer.” These team dynamics also alleviate another of Lee’s challenges: staff development. Because EAC is on the leading edge of gaming technology, the staff can look only to each other, and others in their industry, for continuing education. The group-based structure lets that kind of interaction happen. The company’s library group also plays an important part in helping staff anticipate what kind of technology they’ll use or create to support the development of new products down the road. Another aspect is sustaining a corporate culture that values an open-door policy and little tolerance for office politics.
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Retaining its small-company feel, EAC has Toying with success: found new maturity through the personal Paul Lee produces experiences of its staff. Lee says a large number of employees are software that takes a starting to have children, and that’s had an impact on the business in more ways than one. year to develop but has “We all used to get together and just go a shelf life of only one party,” he says. “But now more and more people are having children, so the company day to nine months • get-togethers are more family-oriented.” DOMINIC SCHAEFER The average age of EAC’s staff is about 27. Beyond the change in recreational activities, Lee and other EAC managers have had to learn how to keep a delicate balance between encouraging staff to push themselves and granting them the flexibility they need to nurture a life outside of work. Lee also has seen his personal priorities change somewhat, as a result of his recent marriage. While he fears it makes him sound a little sappy, the newlywed says that after a gruelling year of endless wedding planning, he just wants to finally enjoy some time with his wife. That isn’t to say he’s declared a moratorium on his own playtime, as scarce as it may be. Beyond the schooling that EAC requires, any candidate should be ready to endure a tough schedule. “Everyone works crazy hours, and not just in the office,” Lee says. “People often go home and work some more, and then email their stuff in. It’s a function of the industry: you need that extra bit to be successful.” É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
1998
BITING INTO THE MARKET Cindy Lee spent six years getting customers into T&T Supermarkets. Now she has to keep them coming back
ROSEMARY ENG
See food: T&T president
For six years, Cindy Lee has refused to talk openly about the customers while working ordea l of l au nch i ng t he T&T Supermarket Inc. chain of Asian to find an ethnic mix to food stores. suit each neighbourhood • From the day she opened her first food store in Burnaby in 1993, she DOMINIC SCHAEFER has faced fierce competition from major supermarkets and specialty ethnic food stores. If they weren’t luring away her customers and cutting off her supply lines, they were stealing her employees. And Lee, a newcomer to the food business, had to learn every step of the way. But now, with her business on firm footing – there are six T&T stores in the Lower Mainland and one to come in Coquitlam – Lee has stopped for a momentof reflection. Growing a business is like filling a bucket with water, she said. Sketching a bucket with tap water pouring from the top while trickles of water leak out of holes at the bottom, she says the tap flow is first priority because it represents filling the stores with Cindy Lee caters to Asian
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customers. With a strong enough flow, the bucket will stay full despite the leaks. Now that T&Tis positioned in multiple locations with a steady customer flow, Lee is confident she’s got the tap on full. Now she has to tend to the leaks – problems such as inefficient processes and weak marketing. T&T has faced a difficult task getting out of the starting gate, said Thomas Leung, a retail analyst at Thomas Consultants. Asian customers, who traditionally shop at cramped and cluttered but extremely price-competitive stores, needed to be convinced cleaner, more service-oriented stores are worth slightly higher prices. Asian tradition is tough to buck because price, not store esthetics, is historically the basis of consumer appeal, Leung sald. And because of its modern, supermarket format, with proper sections for fresh produce, frozen foods, meat and baked goods, T&T is also thrust in the arena to do battle against big chains such as Real Canadian Superstore and Safeway. T&T’s first store was in the former Woodward’s Food Floor site in Metrotown Centre, with the second opening a few months later at President Plaza shopping mall in Richmond. The front person for the business was Lee’s husband, Jack. Buoyant and gregarious, Jack Lee is president of President Asian Enterprises Inc., which developed Richmond’s President Plaza and the Radisson President Hotel and Suites with immigrant investor money from Taiwan. The plan was to establish T&T Supermarket to anchor President Plaza. But Woodward’s food store folded and the retail space opportunity was too attractive to pass up. So the chain started with two stores instead of one. Cindy has been managing the supermarket division from the beginning. Cindy and Jack both studied public financing and taxation in university in Taiwan. She emigrated from Taiwan to Canada in 1987. Jack completed an MBA in Kentucky, then came to Canada to join her. After they were married Cindy worked five years as an accountant at Mulvaney’s Restaurant on Granville Island. They had three children, now ages 12, 16 and 17. Initially President Asian sought a local manager with experience in running Chinese markets. “No one wanted to do it because they think 20,000 square feet is too big. I decided, in order to support my husband to develop the [President Plaza] site and bring in a new, modern, Oriental supermarket, I would take the challenge,” Cindy said. Underlining the initial informality of the arrangement, she still has to write “president” under her name on her business card. To start, she had to find staff familiar with Asian foodstuffs and who could also provide western, service-oriented style. “It’s difficult to hire non-Asians who would know the products,” said Leung. “So T&T relies on new immigrants who may or may not understand the nuances of North American customer service.” “We request that all staff speak Cantonese,” says Cindy. “If they speak only Mandarin [as in Taiwan and northern China], they have to pick up Cantonese because that is what a high percentage of our customers speak.” É
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BIV PLAYS IMPORTANT PART IN MINDING B.C.’S BUSINESS JIM PATTISON
Congratulations to Business in Vancouver for providing local business news to our community for 30 years. I can from experience say I have seen BIV grow from modest ambitions to become the most prominent source of daily online and weekly newspaper coverage of important local economic, finance and business news. The British Columbian economy is where I found my feet as an entrepreneur, and I am a proud resident and booster of the province as a beautiful place to live and a great place to do business. But we can never become complacent about this environment and we need to remind ourselves regularly about what makes this locale special. Nor can we be indifferent about how we make ourselves better. It is also vital that we have strong local media to tell us about ourselves, to keep our institutions accountable and to remind us of our accomplishments along with our challenges. Without that our democracy is threatened and our society is weakened, and in this era of “fake news” we should support credible media in the same way we support credible businesses of all sorts.
BIV has developed over its three decades a great reputation as a fair-minded and vigorous media outlet that has earned the trust of its readers. It has consistently aimed high to find the stories that mean the most to the wide-ranging business community, and its award-winning work has served to inform us – and inform me most weeks – on developments that affect our standards of living and ways of life. I enjoy its straightforward style, its effort to dig deeper and its variety. You can’t agree with everything it has chosen to report or every editorial position it has taken, but its body of work is its best measurement, and on that score BIV has been a successful addition to British Columbia media. It has never lost sight of its customers, whether they are readers trying to understand events or advertisers trying to reach those readers, and it appears poised to prosper in the time ahead. As our world shrinks and we become more connected, we cannot lose sight of our advantages and approaches to business that make us an attractive market and an economic engine bound to be more powerful in the years to come. I wish BIV all the best in keeping track of what we do in business to improve the prosperity of our people, to create and sustain jobs in an often challenging climate and to build opportunities for generations to come. É Jim Pattison is CEO, chairman and owner of Jim Pattison Group.
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
1999
ECONOMISTS DIVIDED ON NISGA’A IMPACT Treaty deal won’t provide certainty, analysts say DAVID JORDAN
Economists are divided over the net impact the Nisga’a treaty will have on the B.C. economy but agree that it falls short of providing the kind of economic certainty needed to attract investment to the province. Following the April 22 vote in the B.C. legislature, the province and the Nisga’a Tribal Council have both ratified the treaty, which grants the Nisga’a $190 million in cash and about 2,000 square kilometres of Crown land. The treaty is now awaiting ratification from the federal government, and a vote is expected in the House of Commons this year. The provincial government has estimated that the treaty will result in a net economic benefit to the province of $188 million. Another study, commissioned by federal Reform MP John Cummins, concluded that that benefit is overstated because the province underestimated the value of concessions to the Nisga’a by more than $800 million. “Studies commissioned by governments are highly suspect,” said Business Council of BC vice-president Jock Finlayson. However, they are the only available sources of hard numbers. Finlayson added that public discussions have centred on social and political implications, and there has been surprisingly little objective economic analysis. Whatever the cost of the settlement, it is less than the cost of doing nothing, according to Roslyn Kunin, executive director of the Laurier Institution. She estimated that the uncertainty of unresolved land claims has cost B.C. in the neighbourhood of $1 billion in forgone investment. “In spite of all the controversy about the process of finally getting the treaty signed, it is a good
thing that at least for one-quarter of the province we have the issue settled and can get on with economic development and building a better life for the people there,” said Kunin. Simon Fraser University business professor John Richards doesn’t agree that the treaty will pave the way for economic development in the affected region. He pointed out that attempts to encourage economic development on Indigenous lands have historically proven futile. “That has nothing to do with race,” said Richards. “It has everything to do with the difficulty of ever creating good jobs in small, isolated, faraway places.” The $190 million cash component of the treaty would be better spent combating urban poverty, said Richards. That’s where the majority of B.C.’s Indigenous people live, he said, and it’s where the majority of the job opportunities are. One point economists agree on is that the Nisga’a treaty and others like it are no quick cure for the economic gloom that shrouds the province. É
The Nisga’a take control of 2,000 square kilometres of Crown land • DAVIDRH/ SHUTTERSTOCK
2000
SHIPPERS CHOOSE VANCOUVER Faster service, lower dollar make Vancouver first port of call for many overseas shippers BIV STAFF
Faster service and a low Canadian dollar have allowed Vancouver to steal coveted container business from Seattle and other points south. Five years ago, Vancouver’s Terminal Systems Inc. did not receive any cargo containers bound for the United States. Today, that traffic counts for about three per cent of its total volume at both of the company’s two Lower Mainland container terminals, Vanterm and Deltaport, said Morley Strachan, director of marketing for TSI.
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“If we can get any cargo destined to the U.S., it certainly helps our volumes,” Strachan said. “We recognize that the U.S. market is our future for continued growth because Canada as a consumer market is only so big.” Two shipping lines, Zim Israel Navigation Co. (Canada) Ltd. and China Ocean Shipping (Group) Co., have started to make Vancouver their first port of call when arriving on North America’s west coast. Making Vancouver the first port of call is vitally important, said Strachan. “It’s a major change for these ocean carriers to
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take advantage of getting the cargo into Vancouver to go to the U.S. before the ship goes to any other port,” said Strachan. “It gives Vancouver a tremendous advantage.” Why are shipping companies changing their routes to funnel cargo through Vancouver? “It’s a faster service and transit time from Vancouver to Chicago is about four or five days. In many cases it’s congested in Long Beach and there is very little service. Seattle can also be slower,” said Moti Shani, president of Zim’s Canadian operations. He said that because the service is faster through Canada, snagging Seattle’s container business could be sustained well into the future. But in the short term, Canada’s low dollar helps a lot. Shani chose Vancouver to be Zim’s first port of call because the low dollar means low unloading costs. Zim’s ships still call on Seattle after leaving Vancouver, but usually to pick up cargo. Ninety per cent of the company’s cargo is dropped in Vancouver. Port of Vancouver officials have tried for years to entice shipping lines to make Vancouver a first stop. Kevin Little, vice-president for business development with the Vancouver Port Authority, said Port Vancouver has invested a lot of money to upgrade facilities to attract international business. “Our goal for a long time has been to open Vancouver as a gateway not only to Canada but to all of North America,” he said. “We say [shipping companies] need a strategic alternative to get to their markets. Often they’re not prepared to rely on a single
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gateway so we offer a route through Canada.” To further this agenda, Little went to Asia in late November with senior executives from Canadian National Railways and Canadian Pacific Railways to push for more business through Vancouver and increase awareness of how efficiently product can move from Vancouver to Chicago and the U.S. Midwest. “We’re really betting on that growth,” he said. Vancouver has three container terminals, Centerm and Vanterm, both in Burrard Inlet, and Deltaport, at Roberts Bank. Little said Port Vancouver’s $179 million contribution to the $220 million Deltaport shows that Port Vancouver has invested a lot of money to achieve the goal of making Vancouver a port city that can efficiently handle U.S.-bound containers. Deltaport, which is Vancouver’s largest container terminal with a 40-hectare site and two berths, more than doubled Vancouver’s container capacity when it opened in June 1997. Little hinted another doubling in capacity may be in order. “We’ve got a team of four to five people working full time for the next couple years to build us more capacity because we know growth is coming.” Little said that team is investigating where in the Lower Mainland Port Vancouver could build one or two new container terminals. The challenge, he said, is for Vancouver to build container space for one million additional TEUs (or twenty-foot container lengths) to add to the current one million that Vancouver can accommodate. É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
2001
LIBERALS CAN’T STOP SLIDE But economists say party’s policies good for the long term BIV STAFF
Given the delicate position of the global economy, premier-designate Gordon Campbell may have difficulty achieving his financial objectives • BIV FILES
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Although B.C. businesses place much hope on the May 16 Liberal victory, economists expect few significant short-term benefits from the election of the province’s first right-wing party in a decade. But even as they lower their economic forecasts for B.C. in 2001, at least a few economists are more optimistic about potential long-term benefits from the Liberals promised tax cuts and reductions in red tape. When they convened last January, 16 members of the BC Economic Forecast Council predicted that B.C. would post modest growth in 2001, with predictions averaging 2.4 per cent. Business in Vancouver asked eight of those council members how they would revise their assessments following the Liberal landslide win. Carl Sonnen, president of Ottawa’s Informetrica Ltd., said that given the delicate position of the global economy, premier-designate Gordon Campbell will have difficulty achieving his financial objectives. Financial figures for B.C. in January, February and March indicate that B.C.’s growth will be lower than the 2.4 per cent the council predicted, he said. “It is pretty clear that the kind of growth that has been assumed was probably too robust,” he said. The U.S. economy has slowed and prospects of Japan’s economy recovering – both countries are key importers of B.C. lumber – have worsened in recent months, he said. “It puts pressure on arguments about having strong immediate effects,” said Sonnen. He added that while the Liberals like to blame NDP taxes and red tape for the underperforming economy, the reality probably has more to do with the downturn in the Asian economies beginning in 1997. Sonnen also doubted that investment capital would return to B.C. as quickly as many expect. While the new Liberal government may be able to create a more positive business climate, those efforts could be thwarted if labour and other groups take their opposition to the Liberal regime to the streets. William Tharp, an economist with Victoria’s M. Murenbeeld and Associates, is waiting to see how the Liberal government follows through on its campaign promises. He doubts that the Liberals can improve the economy substantially in the short term, pointing out that the Liberal pledge to cut taxes has a time frame of the entire
first four-year mandate. “I don’t think we will see anything much in this year. We might start to see some improvement in consumer spending in the opening half of next year,” Tharp said. Helmut Pastrick, chief economist for the Credit Union Central of BC, said that while global forces were a key factor in the province’s economic slowdown, the Liberals are correct to blame NDP red tape and taxes. Since the mid-1990s, it has been clear that the business environment was affected by regulations. A slowing global economy led Pastrick to lower his economic forecast for B.C. from his January prediction of 2.4 per cent in 2001 to 1.5 per cent. BC Business Council vice-president and BIV columnist Jock Finlayson revised his growth prediction downward from 2.4 per cent to two per cent “at best” due more to external factors than anything the Campbell government can control. Unlike many of his colleagues on the forecast council, he does expect to see a short-term boost in business activity resulting from expansion projects that were mothballed as companies awaited the NDP’s ouster. But that activity won’t be enough to counteract external threats to the provincial economy, such as the expiration of the Canada-U.S. Softwood Lumber Agreement. Finlayson pointed out that discussions of those broader external issues were conspicuously absent from the campaign. WEFA Canada economist Dale Orr dismissed any short-term benefits from a boost in business confidence. “It will be a while before you look out your window and see any factories or offices that might otherwise have gone to Calgary or California,” said Orr. “These things come up from time to time and it may be that in six months a company takes a look at its expansion plans and chooses to come to B.C.” Campbell’s promise to reduce red tape and significantly reduce taxes within 90 days is a step in the right direction, Orr said, but it will take years to fix the business climate. Ernie Stokes, principal of Toronto-based Stokes Economic Consulting Inc., is less than optimistic about any immediate impact of the new government. “It’s hard to say without them doing something,” said Stokes. “One way to look at it is that they probably won’t do anything negative. They’re much more pro-business, so it’s unlikely that worse things are going to happen to me than already have.” É
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2002
POST-PRODUCTION INDUSTRY STRUGGLING Competitors slashing prices, overall industry spending in B.C. down by 30 per cent GLENN DREXHAGE
Bob Scarabelli: Slowdown has cut number of projects, lowered budgets • BIV FILES
Local post-production houses have cut costs and staff as business dries up and foreign competition intensifies. But these companies, which provide editing, sound and other services, remain hopeful that the worst is over. In its latest quarterly report, Rainmaker Entertainment Group Ltd. stated that overall industry spending in B.C. has dipped by about 30 per cent. Bob Scarabelli, Rainmaker’s president, said his company hasn’t been hit as hard but acknowledged that the slowdown has led to fewer projects, smaller budgets and increased competition. Scarabelli estimated that from 1998 to 2000, Rainmaker – which provides film and television post-production services – worked on 14 to 16 television series by this time of the year. Now, the firm has six series in post-production. (2001 is typically viewed as an anomaly, due to threatened actors’ and writers’ strikes in the U.S. and the economic downturn following the September 11 attacks.) Accordingly, Rainmaker has cut costs, including 10 layoffs in September, leaving the firm with 150 employees. Could more cuts be on the way? “It’s hard to tell,” Scarabelli said. continued next page
30 YEARS GOES BY
IN A FLASH CONGRATULATIONS BUSINESS IN VANCOUVER
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
POST-PRODUCTION INDUSTRY STRUGGLING
He added that all discretionary spending on items such as renovations, social events, travel and training have ceased indefinitely. The company’s financials remained stable for the third quarter. At the end of May, Rainmaker converted into an income trust and revenues came in at $6.2 million compared to $5.5 million for the same period in 2001 and $7 million for the same period in 2000. Menashe Arbel, president and CEO of Post Modern Sound Inc., estimated that revenues for 2002 have dropped by up to 40 per cent compared to 1999 and 2000. “It’s been very tough,” he said. “Our competitors now are not only L.A. – it’s New Zealand, Australia, the Czech Republic, South Africa.” He too has taken cost-cutting measures, and has let “a few” people go this year at Post Modern, which provides sound services for television and film projects that are mainly U.S. based. Depending on the workload, Post Modern has 12 to 15 full-time employees and 20 to 40 freelancers. Arbel noted that in some cases, Los Angeles-based facilities have matched his company’s rates, an “unheard of” development. For some projects, Post Modern has cut prices by 10 to 50 per cent, he said. However, he remains optimistic that 2003 will be better. “The last three, four months, there is change, no doubt about that,” Arbel said. “The phone is ringing. What I’m hearing is good news.” Arbel lauded the formation of the Motion Picture Production Industry Association of BC – which formalized this summer
and includes industry, government and labour representatives – but said more needs to be done for the industry. “The message that this province has to give is that we are in business,” he said. Scarabelli is heartened by pending agreements between producers, unions and guilds, which could lead to a pickup in foreign projects. “Hopefully, [the pullback] is kind of a warning shot across our bow, as opposed to a direct hit,” he said. Yet some studios haven’t been struck as hard. Digital Film Group Inc. (DFG), which transfers work from digital video to 35-millimetre film, works mainly with independent filmmakers rather than big U.S. projects. “I wouldn’t say we’re a gauge for what’s happening in Vancouver necessarily,” said president James Tocher. Yet Tocher noted that the slowdown after September 11, 2001, also hit his firm. DFG had five projects lined up. After the attacks, only one came back and it was later than expected. Business remained slow until May. “We’ve been going nonstop ever since,” Tocher said, estimating that revenues have tripled since July 2001. The company has eight full-time people (including two hires this year) and two part-time employees. Currently, DFG is working on three independent feature films – one made locally, the others hailing from San Francisco and Central America. Tocher doesn’t expect a return to the salad days of foreign production work. For that reason, he stresses the importance of a homegrown industry. “We have to build our own stable environment – build our platform from the ground up.” É
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2003
COMMODITIES REBOUND BUOYS B.C. MARKETS Return of the retail investor boosted profitability in 2003, promising bullish year for financings TRACY TJADEN
Lee Davis sees good things coming in 2004 • BIV
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It was far from a boom year for North American stock markets, but 2003 can boast the return of the retail investor. “That rebound in the retail business meant very buoyant markets, particularly in the second and third quarters, stemming from a more confident investor,” said Investment Dealers Association senior vice-president Ian Russell. “It complemented a strong institutional market, strong equity financings, especially income trusts, and also private equity financing.” Institutional investors were back in 2002, but it wasn’t until mid-2003 that the retail investor began testing the market’s waters again. The resurgence of the retail investor market brought the securities industry back into profitability in 2003, Russell said. “The most significant thing about it was we saw a broadening in the profitability that was beginning to be evident in 2002,” Russell added.
Parts of the industry were starting to recover after a difficult bear market. But the boom times were limited to large integrated firms whose business centred on institutional investments. Russell said 2003 saw B.C. in particular bask in the heyday of a resurgence in the commodity markets, particularly rising metal prices since Vancouver is a hub for junior resource firms. “The junior capital markets are B.C.’s strength and that has really been in the leading edge of the recovery in capital markets, in both financing and trading, so the B.C. marketplace has had a pretty good run.” So did corporate financiers at VanCity Capital Corp. CEO Lee Davis said the investment banking arm had its best year ever in 2003, completing about $10 million in transactions, up from $7 million the year before. And he predicts another uptick for 2004, as the economy in B.C. and North America as a whole comes around. “We describe 2004 as a glass half full.” É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
2004
CONSOLIDATION SWEEPS B.C. FOREST INDUSTRY Major deals building players that can compete on the world stage, analysts say TRACY TJADEN
Forestry analyst Kevin Mason: Tolko’s Riverside offer too low • BIV
The deluge of deals sweeping through B.C.’s lumber sector will reshape the scattered industry’s current heavyweights into a few strong players better able to fight formidable global competitors, experts say. “It’s been a real wave,” said Mark Bishop, a forestry analyst with RBC Capital Markets Ltd. in Vancouver. “Lumber has been the most fragmented part of our sector, which does benefit from consolidation.” Bigger players are better able to streamline operations, close inefficient mills and ramp up operations at lowcost mills to produce the same amount of wood for less money, he said. And thanks to current record-high lumber prices and changes to provincial government forestry policy that give companies more flexibility, B.C. forestry firms have the cash to finance their acquisitions. “There are significant overlaps in cutting rights in the areas they operate in,” Bishop said. “They will have the ability to go with smaller management teams to manage larger areas and redirect logs.” Last week’s spate of new deals involving B.C. lumber giants came in the wake of previously announced industry consolidation. Vernon-based Tolko Industries Ltd. launched a hostile
takeover of publicly traded Riverside Forest Products Ltd. on August 25. The privately held Tolko offered $29 per share for the forestry company, which also operates in B.C.’s Interior. Riverside shareholders have until October 6 to accept the deal. Also last week, Ainsworth Lumber Co. Ltd. paid US$457.5 million for three oriented-strand-board manufacturing operations and a related energy plant in Minnesota from Potlatch Corp. In July, West Fraser Timber Co. Ltd. announced its plan to buy Weldwood of Canada Ltd. for $1.26 billion, and late last year, Canfor Corp. gobbled up Slocan Forest Products Ltd. Bishop said this year’s forestry policy changes made by the provincial government are paying off. “But it goes beyond that. We’re also in a strong housing cycle driven by what I would call a super-cycle in building materials prices.” Meanwhile, the pine-beetle epidemic has left B.C.’s Interior with a huge inventory of available wood to feed the hungry U.S. housing market. And a rail transportation logjam is forcing B.C. lumber exporters to limit their shipments, which has helped keep prices strong. But Bishop said at some point the party will be over. “It won’t last forever,” he said. É
2005
COMPANIES AIM FOR BOX-OFFICE HITS WITH MAIL-ORDER MOVIES Videomatica and Rogers Video launch services that deliver rentals to customers via Canada Post
GLENN DREXHAGE
A local rental hot spot for film esoterica is boosting business thanks to a new service that lets aficionados enjoy their viewing selections without having to set foot in the shop. And other movie rental operations, such as Richmond’s Rogers Video, have launched similar initiatives. Videomatica, the specialty film rental shop, began offering a service that allows customers to order DVDs via the mail about two and a half months ago. Brian Bosworth, Videomatica’s managing director, said mailings are already accounting for about 15 per cent of the shop’s total DVD rental business. He’s bullish about the service’s prospects. “I would not be surprised, in two or three years, that we’ve got the equivalent of another five stores in the Lower Mainland [due to this service], which would
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increase our revenues by 500 per cent,” Bosworth said. Annual revenues at Videomatica are above $1 million, he said. The shop has become something of a local institution since it was founded in 1983 by Bosworth and his partner Graham Peat. Located on West 4th Avenue, it specializes in renting films that fall outside the mainstream. Videomatica has an estimated 17,500 titles in VHS and DVD formats, including foreign and independent films, documentaries, and gay and lesbian cinema along with new releases. Depending on the season, the company has 15 to 17 staffers. Here’s how its mail service works. Say, for example, a customer signs up for a two-at-a-time package, the most popular option. She then provides a list of movies – the suggested minimum is 20 – that are ranked according to viewing preference. If the first two films are available, Videomatica sends them out, and customers in the Lower Mainland should receive their posted DVDs within one to three days. When the viewer has watched a film, she posts it back in a prestamped envelope. Videomatica receives it and mails out the next film in the cue. Customers sign up for the service at videomatica.ca. Monthly fees, which include postage, are $19.95 and up. Discounted amounts are available for quarterly payments, and referrals can also results in discounts. Others are also keen on the rental via mail approach. Last week, Rogers Video launched its Rogers Video Direct service, with more than 33,000 DVD titles on offer. Monthly plan prices range from $10.95 to $34.95. “We really see this as a complement to the Rogers Video store,” said spokeswoman Sarah Good. “We’re talking to people who for one reason or another find it difficult to get to a video store. And it also speaks to the people who like offbeat titles and are looking for things that are perhaps more difficult to find in a mainstream video store.” Bosworth said Videomatica’s offering differs from other services available due to its specialist focus. “We’re in different markets. We just carry stuff that nobody else does.” He said Videomatica began seriously considering offering mail-service rentals after receiving an email query from Burnaby. The author noted that he lived too far away to drive to Videomatica’s Kitsilano location. He said he already belonged to other local subscription services and inquired about accessing Videomatica’s inventory. So the research began. “We found that in Canada, there are probably about 10 to 15 of these companies doing this,” Bosworth said. Videomatica also looked at the U.S. example of Netflix Inc. Bosworth said recent figures indicated that mail rentals account for about 15 per cent of the overall DVD rental business in the U.S., up from eight per cent a year earlier. He initially thought the notion would appeal only to people living outside of urban areas who don’t have access to rental shops. “Of course, it turns out that the market was the exact opposite of that – the market is dense urban areas,” Bosworth said. É
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Videomatica managing director Brian Bosworth: mailings are
already accounting for about 15 per cent of the shop’s total DVD rental business • DOMINIC SCHAEFER
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
2006
B.C. BUCKS NATIONAL BIOTECH TREND Province leads Canada in attracting investment, but country faced with financing crunch KRISENDRA BISETTY
Xenon CEO Simon Pimstone: “this amount raised is certainly larger than many of the Canadian IPOs that have been done in the last 24 months in the biotech space” • DOMINIC SCHAEFER
British Columbia’s burgeoning biotech industry, Canada’s third largest, attracted more investment dollars in 2005 than any other province, almost doubling the US$174 million it received in 2004 to US$338 million. That total included US$105 million in venture capital. The province also bucked a national trend of declining financing and market capitalization. But the overall Canadian industry is in need of a serious dose of financial therapy to treat a bout of investor jitters, according to a new report that raises questions on the ability of the biotech market to grow and flourish as it did shortly after the turn of the century. According to the global biotechnology report by professional services firm Ernst & Young LLP, revenues among Canada’s publicly traded biotech firms increased 26 per cent in 2005 to US$2.5 billion for the first time. Their net losses dropped by 24 per cent. However, the report says the industry faces huge challenges, notably the continuing predominance in Canada of small and early-stage companies and the fact that 36 of the country’s 81 public biotech firms have less than one year of available cash. Key among the concerns of industry watchers, it adds, is a drop in market capitalization in 2005, to US$13.2 billion from a high of US$17.4 billion at the end of 2000. But the market cap for B.C. companies has risen to approximately $7 billion, in spite of recent market challenges faced by such biotech leaders as QLT Inc., said
Karimah Es Sabar, executive director of BC Biotech, the industry alliance. “Currently B.C. leads the pack [ahead of other Canadian biotech clusters] although we have half the number of companies that both Ontario and Quebec have. We have the highest market cap in the country.” Of the 81 public biotech companies in Canada, 55 have market caps of less than $100 million. Overall, in the past five years, the Canadian industry has performed poorly against the rest of the economy as measured by market cap, the Ernst & Young report reveals. “As Canadian investors shy away from technology and life sciences companies in favour of the financial services and oil and gas industries, the ability of earlier-stage companies to attract investor interest and financing will remain very limited,” said the author of the report’s Canadian chapter, Rod Budd. Budd, the leader of Ernst & Young’s life sciences practice in Canada, said investors across the country are reluctant to gamble on a startup. Not so in B.C., however. A string of top-dollar investments has shown the province running counter to that finding. Privately held Burnaby-based Xenon Pharmaceuticals Inc. is at the centre of the latest local big money deal. At press time, it was set to close a US$31 million strategic equity financing led by a group of U.S. medical entrepreneurs. Xenon, which secured an $87 million partnership deal with pharmaceutical giant Pfizer in 2000 in the area of HDL cholesterol, and has raised over $100 million, including venture capital from blue chip U.S. and Canadian investors, has four drugs in development. They include novel therapeutics for blockbuster markets such as pain and cardiac arrhythmia, which would be clinically developed this year with the latest proceeds. “This amount raised is certainly larger than many of the Canadian IPOs that have been done in the last 24 months in the biotech space,” said Xenon president and CEO Simon Pimstone. É
2007
LULULEMON RISING Lululemon launches US$230 million IPO to fund massive expansion plan
Chip Wilson founded yogawear maker Lululemon Athletica Inc. in 1998
Lululemon Athletica plans to double its storefront presence in North America over the next two years funded by a US$230 million initial public offering. In a prospectus filed with American and Canadian regulatory agencies, the Vancouver-based company expects to receive net proceeds of roughly US$20.3 million from the IPO, which will be used to pay for expansion costs estimated at between US$28 million and US$34 million over the next two years. The 52-store chain plans to open 20 to 25 new outlets in 2007 and 30 to 35 in 2008 across Canada and the United States.
Lululemon has more than tripled its revenue to $148.9 million in 2006 from $40.7 million in 2004. Its net income rose to $7.7 million in 2006 from a net loss of $1.4 million in 2004. In addition to opening new stores, the company plans to expand its product lines from yoga wear to handbags, undergarments, outerwear and sandals. Lululemon was founded in 1998 by Chip Wilson. Part of the company was sold in December 2005 to private equity firms Advent International, which bought 38.1 per cent, and Highland Capital Partners, which owns 9.6 per cent. É
• BIV FILES
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FOR THREE DECADES, BIV HAS TRACED THE DRAMATIC EVOLUTION OF B.C.’S ECONOMY CAROLE TAYLOR
Business in Vancouver has been putting a British Columbia business lens on regional, national and global events for 30 years. My family, myself as a reader and my son as a BIV journalist 25 years ago, have been loyal followers throughout that time. Thank you. From its inception in 1989, this publication has been at the forefront of public policy discussion. It was at that time that nervousness in Hong Kong over Tiananmen Square and worry over the territory’s impending handover to China in 1997 led to increased immigration of individuals and businesses to Vancouver. BIV was there to cover the economic and social implications of that influx of power and wealth, and continues to cover those issues in depth. A recent headline: “Asian Unrest Stokes B.C. Business Fears.” When the global banking world was under threat in 2008 and 2009, BIV asked what that meant for British Columbia. We may have forgotten the pain and uncertainty of that crisis, the fact that liquidity in the system almost disappeared, that some of Canada’s most prominent stocks dropped in half, affecting pension plans and retirement savings for so many British Columbians. Through it all, business journalists kept asking the questions, looking for answers. As part of its mandate, Business in Vancouver has always prided itself on identifying and analyzing the trends shaping our society. For instance, real estate. Has there ever been a public policy area more
influential and confounding for Vancouver in the past 30 years than this one? I remember from my days on Vancouver city council the controversy about older homes being torn down, trees being cut, oversized houses changing neighbourhoods. As well, a new tendency 30 years ago, to pre-sell new housing units abroad before locals were given the opportunity to purchase. More recently, I’ve watched politicians of every stripe struggle with the issue of housing affordability. Through all this, Business in Vancouver has been there, questioning, illuminating, analyzing. Is this simply a matter of supply and demand? What can government’s role be in convincing neighbourhoods that change is inevitable, asking the question: “So how can we shape it?” And how can the private sector play a more significant role in “affordable” housing, not just luxury units? What are the barriers to developers playing a more significant role? So, over 30 years, the economy of this province has changed dramatically. Once overwhelmingly dependent on sectors such as forestry, mining and oil and gas, the province now has more workers in the hightech field than in all our natural resource industries combined. Again, recognizing both the continuing importance of the resource sector and the emerging power of the new economy, BIV is there as a player, documenting and explaining. Personally, I look forward to watching BIV over the next 30 years. É Carole Taylor is the former B.C. finance minister and chancellor of Simon Fraser University.
AS PART OF ITS MANDATE, BUSINESS IN VANCOUVER HAS ALWAYS PRIDED ITSELF ON IDENTIFYING AND ANALYZING THE TRENDS SHAPING OUR SOCIETY
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
2008
NEWSMAKER OF 2008: THE ECONOMY With tens of thousands of jobs lost in Canada, millions of jobs lost in the U.S., billions of dollars in asset writedowns and trillions lost on the stock market, no one has been left unscathed by the financial crisis that’s halted global economic prosperity. It’s been 17 months since the crisis began in August 2007, but things are going to get worse before they get better, experts say RICHARD CHU
On December 1, CIBC World Markets senior economist Benjamin Tal painted a gloomy economic picture for a room full of mortgage brokers at the Vancouver Exhibition and Convention Centre. “We are in the worst financial crisis since the Great Depression. The housing market in the U.S. is in free fall. The U.S. has lost 1.5 million jobs since the beginning of the year. Spreads on corporate bonds in the U.S. imply a 20 per cent probability of [loan] default. “When this crisis is over, the U.S. financial sector will be a shadow of its former self. These are volatile times, and what we are witnessing here is a once-in-a-lifetime event.” The global situation up until that point was pretty dire. But it would only get worse. After lunch that day, news had spread that the Toronto Stock Exchange and the Dow reported their worst one-day loss since the crash of October 1987. By late afternoon, the crowd was stunned into silence when it was announced that the federal Liberals and the NDP had formed a coalition to try to defeat the Conservative minority government, creating unprecedented political turmoil in Ottawa. “It’s one of those things where you don’t know what to say,” said Grant Thomas, founding partner of the Mortgage Group Canada. The fury and unpredictability of the effects of the financial crisis and subsequent economic turmoil around the world has been one of the defining characteristics of 2008. With so many things apparently going wrong, analysts have been hit with one surprise after another. The loss in November of 71,000 jobs in Canada was almost triple the amount expected by economists and the biggest monthly decline in jobs since the recession of 1982. Real estate prices in B.C. have also dropped sharply, with residential housing sales falling 69.7 per cent in Greater Vancouver to 874 units in November from 2,883 in November 2007, according to the Real Estate Board of Greater Vancouver. Housing prices have also fallen 12.8 per cent between May and November 2008, resulting in an 8.3 per cent year-to-date decline in prices between November 2007 and November 2008. “I was surprised to some extent about how rapidly it’s impacted housing prices here,” said David Hobden, an economist for Central 1 Credit Union. Retail sales have also taken a hit with projections slashed due to the worsening economic climate. By September, retail sales in B.C. were up a modest 2.4 per cent compared with the projected 5.5 per cent by Central 1 and well off the 6.7 per cent increase in retail spending in 2007 and 7.2 per cent in 2006. In Metro Vancouver, retail sales were up only 0.5 per cent yearto-date in October. Declines in commodity prices have also hit B.C.’s mining sector. Copper prices have fallen from an average US$3.95
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The financial crisis and economic turmoil around the world has been one of the defining characteristics of 2008• LIGHTSPRING/SHUTTERSTOCK
per pound in April to US$1.69 per pound in November. Gold, which was approaching US$1,000 per ounce over the summer, has dropped to around $750 per ounce in December. And oil, which hit a high of US$145.15 a barrel in July, plummeted to US$36.22 a barrel in December, threatening the viability of Alberta’s oilsands projects. The declines in oil and commodity prices also eroded the value of Canada’s stocks and the Canadian dollar. Many of B.C.’s largest mining companies have seen their share prices plummet. Teck Cominco Ltd. shares, which reached $52.90 in May, fell 94 per cent to $3.35 in late November after the company announced it was selling assets and suspending its dividend to help pay off debt associated with its $14.1 billion acquisition of Fording Canadian Coal Trust. Shares of NovaGold Resources Inc. have tumbled 96 per cent from a high of $12.38 in January to a low of $0.48 in November after it announced it didn’t have enough cash to repay a bridge loan and was suspending production at its Rock Creek Mine. Despite all the bad news, analysts suggest the economy will be realizing more declines and contraction before it starts getting better. “We basically haven’t seen the U.S. economy bottom out yet; we haven’t seen credit risk reach a maximum yet, in terms of corporate credit risk, and we haven’t seen a floor in equity prices, or commodity prices for that matter,” said Hobden. “Until those variables reach bottom and start recovering, or at least stop declining, then the economic situation continues to worsen.” É
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2009
OLYMPICS SPARK B.C. BUSINESS AND ECONOMIC DEVELOPMENT 2010 Olympics bring multiple pros, few cons, PwC report finds SERGEI BACHLAKOV/SHUTTERSTOCK
BIV STAFF
Hosting the 2010 Olympic Games has produced a series of benefits to B.C.’s economy and few negatives, according to a new report by PricewaterhouseCoopers LLP. Commissioned by the B.C. and federal governments, the report said roughly $800 million has been injected into B.C.’s real GDP and $120 million into Canada’s economy between 2003 and 2008, directly because of the Games. The report also estimated that the Games created more than 18,300 jobs and 800 new businesses. Estimates in real GDP and job creation were on par with the mid-range estimates in an InterVistas report on the impacts of hosting the Olympics released in 2002, the PwC report said. However, the composition of economic impact differs significantly between the two reports. The InterVistas report projected the overall economic impact of the games would come primarily from venue construction spending by VANOC ($610 million), VANOC operations
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spending ($412 million) and tourism spending (between $39 million and $653 million). It estimated third-party venue construction of $112 million. According to the PwC report, the bulk of the impact has come from third-party venue construction spending of $526 million, which is more than the estimated $473 million in venue spending by VANOC. Much of the increase in third-party spending comes from other bodies assuming responsibility for certain venues, including the City of Vancouver assuming the obligation for the Vancouver Athletes Village and upgrades to the Hillcrest curling facilities, and Richmond taking on the responsibility for the speedskating oval. The tourism sector has focused on increasing tourism by capitalizing on the awareness of the region because of the Games. The report said the amount of media coverage about the Winter Games has increased 10-fold with more than 66,700 articles about the Games in 2008 from roughly 6,090 in 2003. É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
2010
VENTURE CAPITALISTS FAILING TO EMBRACE B.C. CLEAN TECH, CLIMATE INSTITUTE REPORT FINDS Investors and companies seeking investment dollars face host of challenges in what is a promising but small market for renewable energy enterprises CURT CHEREWAYKO
Members of B.C.’s clean-tech sector may still passionately wear green-tinted glasses, but a white paper released last week by the Pacific Institute for Climate Solutions (PICS) suggests that all is not rosy in what is considered to be one of B.C.’s most promising emerging sectors. The industry’s future is hazy because of a lack of direction in the Clean Energy Act and other factors that are deterring venture capitalists from investing in clean-tech companies, according to PICS, which is a Victoria-based think tank. Cleantech Access to Venture Capital in British Columbia concludes that high capital costs and uncertainty around when and how much revenue companies can generate in an industry known for its long development horizons are among factors keeping venture capitalists away. Based on two rounds of interviews with venture capitalists, clean-tech executives and government officials, including BC Hydro employees, PICS suggests a number of ways to generate more investor interest in the clean-tech sector, including increasing the B.C. carbon tax and creating a commission
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dedicated to implementing policy in the Clean Energy Act. The paper says that the length and delays of BC Hydro’s procurement process don’t help matters in B.C., nor do the province’s cheap electricity rates and a lack of penalties applied to dirty energy. Report co-author and University of Victoria MBA candidate Yuri Perez Gonzalez told BIV last week that many interviewees in the report noted that the Clean Energy Act, whose ultimate goal is to reduce emissions 30 per cent in the province by 2020, is a step in the right direction, “but that it lacks a number of details in order to qualify where it’s heading.” “People do not know what role they have to play to really achieve those GHG [greenhouse gas] emission targets proposed for 2020,” said Gonzalez. The report also suggests that the government can play a further role in supporting the sector by becoming an early adopter of clean technologies and by increasing funding and transparency of existing clean-tech programs like the $25 million ICE fund. And the report said funding increases should put to rest any consideration of creating a feed-in tariff in the province.
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B.C.’s clean-technology sector suffers from a lack of direction and other factors that are deterring venture capitalists from investing in cleantech companies, according to a Victoria-based think tank • ZHENGZAISHURU/ SHUTTERSTOCK
Interviewees for the report said that such a tariff – which has stimulated clean-energy sectors in many European jurisdictions, albeit sometimes for limited periods – would simply have taxpayers footing the bill for subsidies handed to renewable energy projects. Many interviewees believed that efforts should be directed at taxing dirty energy instead. Rolf Dekleer, vice-president of clean-tech investments at Vancouver-based venture capital firm Growthworks, agreed that given B.C.’s low energy prices, some clean-tech firms, such as those developing smaller power applications that offset household energy costs, will have a tough time gaining ground in B.C. But he noted that most firms aren’t depending on success in B.C. Rather, they are developing applications that are naturally geared toward larger export markets like California, where there are higher energy rates and a much deeper venture capital pool.
“We tend to think that when a company becomes a success, it will be successful worldwide rather than just in B.C.,” said Dekleer. He added that the government’s challenge is to create an environment conducive to investment, while not picking companies or technologies as winners. And while Growthworks is among the largest venture capital funds in Canada, it still doesn’t have the financial might to make larger investments in clean-tech companies, given the high development costs. “Clean-tech companies need to raise tens of millions of dollars, so almost all investments we make are syndicated – we’ll have up to five or six partners.” Wal van Lierop, president and CEO of North Vancouver-based venture capital firm Chrysalix, said strong companies will find financing no matter what market they’re in. He did note that venture capital investment in B.C. remains a little thin, particularly since Ventures West folded a couple of years ago, leaving one less investment firm to syndicate with on investments in B.C. Van Lierop said companies shouldn’t rely on the local market, but he added that government incentives and better procurement processes can help spur more demonstration and pilot projects in B.C. É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
2011
BUSINESS CONFIDENCE IN B.C. IMPROVING, BUT STILL WELL BELOW PRE-RECESSION LEVELS BIV-Ipsos 2011 quarterly business confidence survey findings
GLEN KORSTROM
Ipsos’ western region president Steve Mossop said the survey found business leaders leaning more toward frugality and restraint • ROB KRUYT/BIV FILES
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This year, Business in Vancouver is partnering with Ipsos Reid in quarterly surveys to gauge the confidence of B.C. business leaders in their companies and sectors, the overall economy, political priorities and all three levels of government. Of the 285 surveyed between December 28 and January 9 in this 2011 first-quarter poll, 34 per cent were either the president or CEO of their company while 20 per cent were owners. Others were self-employed, managers, directors, partners or other executives. B.C. business leaders are more confident than they were last year that sales and profits will rise in their businesses in the coming year. Confidence is so high that the executives believe it’s more likely that they will hire a worker this year than they did last year. They’re also more likely to make large capital investments. Their confidence, however, pales in comparison to levels seen at the start of 2008 when the B.C. economy was firing on all cylinders. The survey found that 64 per cent of the executives believe sales will increase in 2011. That’s up from 61 per cent a year ago but down from 73 per cent in 2008. PricewaterhouseCoopers released a survey January 25 that found global business leaders are similarly more optimistic. According to the international poll, 48 per cent of corporate leaders are “very confident” about growth in the next 12 months compared with only 31 per cent a year ago. “CEOs always tend to overestimate their own performance and underestimate the general economy as a whole,” Ipsos’ western region president Steve Mossop said of the BIV-Ipsos survey. Business leaders surveyed believe there’s only a 51 per cent chance that their sales will increase. That’s down from 52 per cent last year and 64 per cent prior to the economic
downturn. Projections for the B.C. economy are relatively positive even though fewer executives forecast stronger growth than they did last year. Only 14 per cent of executives believe the B.C. economy will be less active in the coming year. Last year 19 per cent of executives projected that outcome. About 34 per cent of executives believe B.C.’s economy will stagnate in 2011. That’s up from 20 per cent of business leaders who thought that in 2010. According to the BIV-Ipsos survey, business leaders, at first glance, appear to want the B.C. government to spend less on health care and more on transit. Controlling health-care costs is a high priority for 89 per cent of the business leaders surveyed, while investing in transportation infrastructure is a high priority for 82 per cent. But Mossop said that doesn’t necessarily mean business leaders want government to reduce healthcare spending and divert those savings into SkyTrain, highways and bridges. “They just want it both ways,” Mossop said. “It’s the age-old juxtaposition of taxation issues that always seems to come up when we poll on that issue.” Mossop pointed out that the survey found a slight shift to business leaders wanting frugality and restraint. More executives in 2011 (75 per cent) want Victoria to make paying down provincial-government debt a high priority. That compares with 71 per cent who wanted that last year. Similarly, reducing the government’s budget deficit is a high priority this year for 80 per cent of survey respondents compared with 78 per cent last year. Far less consensus emerged on the harmonized sales tax (HST). Consumers have consistently told pollsters that they oppose the HST. But business leaders are split on the issue: 35 per cent believe the HST will have a positive impact on their business; 40 per cent believe it will have a negative impact; and 25 per cent said the harmonized tax will have no effect. Local business leaders have warmed to Stephen Harper’s Conservative government and cooled markedly on Gregor Robertson’s Vision Vancouver civic administration, which has a level of support that Mossop calls “horrific.” The BIV-Ipsos survey found that 59 per cent of business leaders disapprove of Robertson’s administration. A year ago, only 36 per cent disapproved of Robertson’s civic team. Robertson’s popularity is now below the 58 per cent disapproval rating that former mayor Sam Sullivan’s Non-Partisan Association (NPA) administration endured in 2008. “That’s despite the opposite sentiment among consumers.” É
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2012
NEWSMAKER OF THE YEAR: ENBRIDGE’S NORTHERN GATEWAY PIPELINE DOMINATES 2012 HEADLINES
• BIV FILES
Controversy for the $6 billion oilsands pipeline project continues in joint review panel hearings that began one year ago and wrap up in May 2013
NELSON BENNETT
In January 2012, joint review panel hearings into Enbridge Inc.’s proposed $6 billion Northern Gateway pipeline got underway in Kitimat. Since then, Canada, according to the Canadian Association of Petroleum Producers (CAPP), has lost roughly $14 billion in potential economic benefits – the cost of Alberta’s oil being landlocked and therefore held hostage to North American oil prices. “If you think in terms of cost per barrel that we’re not getting, it’s estimated to be $27 million per day,” BC Chamber of Commerce president John Winter told Business in Vancouver. CAPP puts the estimate much higher, at $40 million per day. Winter added, “The ability to unleash a landlocked resource such as the oilsands to international markets is the challenge here, and it seems to have been lost in much of the debate around the how-to as opposed to the why.” The pipeline would generate an estimated $1.2 billion over 30 years in tax revenue for B.C., and create 560 permanent jobs here, not to mention the construction jobs that would be created during the pipeline’s building phase. However, B.C. would receive none of the royalties that Alberta gets. Facing re-election against an NDP leader who opposes the project, Premier Christy Clark drew a line in the sand at the Alberta border in July, demanding a greater share of the benefits. Clark walked out of a premiers’ conference on national energy policies in July, saying the province would receive only eight per cent of the benefits while assuming 100 per cent of the risks of a marine oil spill and a significant portion of the risks in the event of a land spill. University of British Columbia research released on December
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11 pegged the cleanup cost of a major tanker spill off B.C.’s northeast coast at $9.6 billion. The study, sponsored by WWF-Canada, estimated that such a spill would also result in $300 million in lost economic activity and wipe out any potential economic gains from Northern Gateway. In July, Enbridge’s assurances that it has state-of-the-art technology and procedures in place to prevent and react to land-based oil spills were called into question when the National Transportation Safety Board in the U.S. likened Enbridge’s response to the 2010 oil spill in Michigan to the “Keystone Kops.” The spill was triggered by a corroded pipe, but it was reportedly exacerbated by Enbridge technicians, who kept pumping oil through the pipeline to see what was causing a drop in pressure. An estimated 877,000 gallons of Canadian crude spilled into the Kalamazoo River. To date, the estimated cost of the cleanup has been more than $700 million. To prevent another, similar spill, Enbridge plans to use thicker pipe on its Northern Gateway pipeline and to use horizontal drilling to bore beneath 30 rivers, instead of passing through them. But concerns over a spill at sea remain, and as BIV reported in January, Enbridge would not be on the hook for any oil spilled onto B.C. shores – the shipping companies would. (See “Enbridge off the Hook for Any Oil Tanker Spill Cleanup Costs in B.C.” – BIV issue 1160; January 17-23, 2012.) However, the biggest obstacle that Enbridge faces in B.C. might not be the B.C. government or public sentiment but First Nations. Enbridge claims 60 per cent of First Nations along the pipeline corridor have signed equity agreements that would give them 10 per cent of the income from the pipeline – a claim it has been unable to back up, because no First Nation has publicly affirmed its support for the project. É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
2013
TECH TALENT CRUNCH HITTING VANCOUVER STARTUPS With Facebook and Amazon hiring hundreds of staff in Vancouver, even HootSuite is having a tough time finding qualified employees Meanwhile, Clio has been busy setting up new offices in Toronto and Dublin, in an effort to tap Perreault: his company, those cities’ tech talent pools. which plans to double in In other words, Vancouver’s tech talent crunch is no longer size over the next year, looming – it is already here, and employs 36 people; 15 it is particularly pronounced for small, low-profile tech startups were hired in the last three that are competing with the likes months • DOMINIC SCHAEFER of Amazon.com and Hootsuite, both of which are on a hiring spree. “This is our fourth startup in Vancouver in the last 10 years,” said Stephen Ufford, co-founder and CEO of Trulioo, a Silicon Valley-backed startup that makes identity verification software for websites. “Last year’s startup – it felt like real estate – it was a buyer’s market at the time. Now it’s the opposite. When we have job fairs here by ourselves, the turnout has been quite dismal. We’re all competing with the big guys.” “I think every company has different challenges, but I think what we all have in common is definitely engineers,” added Rick Perreault, co-founder and CEO of Unbounce. Unbounce employs 36 people, 15 of whom were hired just in the last three months. The company is planning to double in size over the next year. For venture capital-backed startups like Unbounce and Trulioo, money is not an issue – they can offer competitive salaries. And in some ways, there is an allure to getting in on the ground floor of a hot tech startup, like HootSuite was four years ago. É Unbounce CEO Rick
NELSON BENNETT
The founders of startups like Clio, Unbounce and Mobify are used to making lightning pitches to angel and venture capital investors. But later this month they will be making a different kind of pitch. They won’t be trying to raise money; they’ll be trying to hire people. They will be among the CEOs and staff managers of local startups who will be trying to convince prospective employees to come and work for them at a November 28 job fair hosted by Techvibes. Some will also participate in a collective job fair at Brooklyn Gastown on November 12 under the “Startups Unite” banner.
2014
THE IFS, ANDS AND BUTS OF NEW ANTI-SPAM LEGISLATION Knowing CASL’s exemptions is key to learning how it applies to your business NELSON BENNETT
It’s July 2 – the day after Canada’s Anti-Spam Legislation (CASL) came into effect. You’ve just started a new job. Your predecessor left behind a binder containing the business cards of clients. You start your day by sending out emails to the addresses on those cards to introduce yourself and to ask if you can put the recipients on your contact list for future potential business offers. You may have just broken the law. Nine of the 10 people you contacted had an ongoing relationship with your company through your predecessor, so the emails you sent were probably safe. There’s an implied consent to receive emails from a business when there is an
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ongoing relationship. But one of those business cards belonged to someone your predecessor met at a business function but never got around to contacting, and who had no previous dealings with your company. Your predecessor could have sent an email to that contact with impunity, since consent was given when he was handed a business card. You, on the other hand, did not have that person’s implied consent. While the above hypothetical situation is unlikely to result in a fine, it is the sort of pitfall businesses need to watch for when implementing policies for complying with CASL, which goes into effect July 1. The new law can be baff ling because it is riddled with
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Canada’s Anti-Spam Legislation went into effect on July 1, 2014 • MARCO RULLKOETTER/SHUTTERSTOCK
exceptions and exemptions. “Businesses need to have a plan with how they’re going to comply with CASL,” said Andrew Aguilar, co-author of the guidebook Internet Law Essentials: Canada’s Anti-Spam Law. “They should sit down and look through the messages that they’re sending, in advance, and determine how many of the messages they send fit into exempted categories. It’s going to be very difficult for people to do on the fly.” The one rule-of-thumb question businesses need to ask when coming up with a policy on electronic messages is: Does the message have a commercial intent? If it doesn’t, you’re off the hook – it does not need to comply with CASL, which applies only to so-called CEMs (commercial electronic messages). If it does have a commercial intent, you need either the
implied or the express consent of the recipient to send any form of electronic message. Whereas implied consent has a shelf life and will expire, express consent does not expire once granted. Getting express consent involves the recipient actively signing up on a website, responding affirmatively to an email, giving consent over the phone, agreeing in a sales contract or signing up for it at the point of sale. Businesses also need to ensure that the messages they send include an unsubscribe option and contact information. On the technology side, phone calls, voice messages and faxes are exempt. So, after July 1, if you want to approach a prospective new client with whom you have had no prior relationship, it’s safer to make a phone call than to send an email. But here’s another exception: if you obtained an email address (or phone number, if you are sending a text message) from a publicly published document or website, then that is considered implied consent, meaning you can at least send that initial email. But you can’t continue to send emails, texts or newsletters without the recipient’s express consent. Generally speaking, CASL does not apply to electronic messages sent to family and friends. Nor does it apply to solicitations for donations from political parties or registered charities. É
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
2015
CLIMATE CHANGE: WARMING TREND BRINGS BITTER HARVEST TO B.C. FARMERS Destructive storms, pests, sea-water encroachment among threats to the sector JEN ST. DENIS
Throughout 2015, Business in Vancouver is examining the impact of climate change on British Columbia’s economy. Past stories have focused on tourism, forestry and winemakers. In 2014, cranberry farmers in the Lower Mainland lost around $10 million worth of crops when unseasonably warm weather in January and February, followed by a cold snap, damaged plants. “Every year it seems like we have an unusual spring,” said Bruce May, a cranberry farmer in Delta. “We used to have more distinct patterns that were more beneficial to our crops.” Although the damage hasn’t been as bad this year, May observed the same pattern of unusually warm late-winter temperatures followed by a spring cold snap. That kind of abrupt switch just as plants are starting to grow can cause cellular damage, May explained. Perhaps 10 years ago, half of the farmers orchardist Greg Norton knows would have been skeptical that the climate is changing. That’s changed. “This isn’t a blip in the weather,” said Norton, who is a member of the BC Agriculture and Food Climate Action Initiative. Across B.C., farmers and scientists have mapped out how climate change will affect agriculture in different regions. Farmers in Richmond and Delta are concerned about seawater encroachment depositing salt on soil. A combination of sea level rise and lower spring runoff could reduce the amount
Bruce May, a cranberry farmer in Delta, says weird weather has become the new norm – and that’s making life difficult for farmers • ROB KRUYT
of fresh water in the south arm of the Fraser River, the sole source of irrigation for the area’s farms. Ranchers in the Cariboo could see grazing land wither under drier summer conditions and face more frequent forest fires, according to B.C.’s Ministry of Agriculture; the mountain pine beetle epidemic and resulting loss of trees has also changed spring runoff patterns in the area. Water management is going to become more important in many regions, but nowhere more than the arid Okanagan, home to B.C.’s fruit orchards and growing winery sector. “There will be changes, but how do we adapt?” Norton said. “That’s difficult.” É
2016
CONTAINER SHIPPING’S ANNUS HORRIBILIS A stalled global economy, record-low rates and Hanjin collapse were among the sector’s challenges TIMOTHY RENSHAW
The corporate wreck of Hanjin Shipping Co. validated the 2016 storm warnings for global container shipping lines, but there were some sunny breaks for B.C. terminals. Too many ships and not enough containers equalled record-low container rates on major cargo routes in an industry that has lost more than US$50 billion in sales since 2014. Adding larger container ships to fleets without scrapping enough older vessels worsened the sector’s overcapacity crisis. Financial health ratings for the sector’s major players took on a lot of water in 2016, especially in the wake of Hanjin’s receivership filing at the end of August. The financial stress index compiled by Drewry, a U.K.-based shipping consultancy, hit a record low following the first half of 2016. Container rates also dropped to historical lows in the year’s second quarter. Transpacific rates to North America’s West Coast were less than half the rate charged
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in 2014-15. Citing “challenging market conditions,” Maersk Line, the world’s largest container shipping carrier, reported a third-quarter loss of US$116 million compared with a profit of US$264 million in 2015’s third quarter. An expanded Panama Canal, larger ships and more carrier alliances, coupled with anger over the protracted labour contract negotiations that stalled container cargo movement through the U.S. West Coast from mid-2014 through early 2015, accelerated the migration of container cargo away from North America’s West Coast to facilities closer to the rich U.S. eastern seaboard market. Development of inland ports on the U.S. East Coast increased the appeal of eastern cargo shipping options, while financial challenges in a sputtering global economy prompted major freight carriers to pursue service alliances to maximize vessel efficiency. But alliance initiatives raised alarm from freight forwarders and other cargo customers over reduced carrier competition and choice. É
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BUSINESS IN VANCOUVER BIRTHED IN BOARDROOMS, BARROOMS, NEWSROOMS AND A COURTROOM PETER LADNER
It’s hard not to write about the 1989 origins of Business in Vancouver without sounding like a tiresome codger reminding kids these days how it used to be: “It was all mainstream media, kids – landlines, couriers, newspaper subscriptions, clipping services and paper files.” I remember featuring then hotelier Hart Molthagen on the cover of an early issue cradling his newest purchase in his arms: a “fax machine.” You could send documents through thin air into another office! Without a courier! That environment was what enabled us to sell the concept of “the missing link,” a printed business-to-business “journal of record for business in Vancouver, bridging the chasm between the daily papers’ spotty coverage of local business and the monthly magazines’ selected features on the major players.” Weekly frequency in 1989 could actually be construed as timely! Before BIV I was publishing Vancouver’s Business Report (now defunct), a newsprint monthly I had started with some investors from Victoria. Various people had approached me to go in with them on a weekly business newspaper: Quebec-based GTC Transcontinental out of Quebec; Richard Murray, then publisher of B.C. Business; and Joe Martin, who started an exact copy of BIV’s model but without enough money to get past six issues. I remember with some smug fondness a meeting we had with him about a possible partnership in our sublet-office boardroom at 645 Cambie Street: “I see some talented people around this table,” he sniffed, “but not one publisher.” OK then. Realizing we had a foggy window of opportunity, George Mleczko and I teamed up to do this on our own. We had to raise $1 million to get to sustainable revenues. I had four kids under 10. This had better work. George came out of sales at the Toronto Sun and Edmonton Sun newspapers, and had been Ron Stern’s general manager for Equity Magazine (now defunct), city magazines in Vancouver, Calgary and Edmonton, and
was then publisher of B.C. Woman to Woman Magazine, run by Megan and Mike Abbott (recently deceased). Mike became an investor, a big vote of confidence from the guy who had launched the first free classified ad newspaper in the world, the Buy&Sell in Vancouver, 18 years earlier. The pivotal investor was Art Rennison, who later died, like another partner, John Collison, in a plane crash. Thanks to Mamie Angus’ connection and a timely beer at a bar on Robson Street, Art enlisted his team of hard-nosed community-minded investors to give us the financing we desperately needed. I remember the 24-hour work binge to get the first issue to the printer. Randy Pearsall, our original art director, stayed up all night and then stuck it out for the next 30 years, only recently retiring. I was too exhausted to see it to the printer, as I had to go home to rest up for a court appearance the next morning. One of our competitors (Vancouver’s Business, since extinct) was suing us for allegedly stealing its name. As our first 12,000 papers were rolling off the press, sphincters were snapping shut all over the office (to borrow an expression from then reporter and future editor Maurice Bridge) awaiting a judicial verdict. If it hadn’t gone in our favour, we would have lost the entire run and had to start again with a new name, even deeper in debt than we already were. The leader of that challenge was Bev Geisbrecht, my former sales manager at Vancouver’s Business Report, who was tragically taken hostage and killed by the Taliban years later. I’m proud to say that our original investors – family, friends and acquaintances – all made their money back and more. I’m also proud of the early employees who toiled with verve and dedication for below-market wages, sometimes deferring a percentage of their paycheques until we knew if we could make our targets. We somehow always managed to. Thanks to them. Mostly I’m proud of what we were able to do to enliven and enrich the Greater Vancouver community through strengthening local business. Long may that continue! É Peter Ladner is a founder of Business in Vancouver and a former Vancouver city councillor.
WE HAD TO RAISE $1 MILLION TO GET TO SUSTAINABLE REVENUES. I HAD FOUR KIDS UNDER 10. THIS HAD BETTER WORK
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BIV’S 30th ANNIVERSARY 2019 PUBLISHED BY BUSINESS IN VANCOUVER
2017
B.C. PREMIER’S PLAN A IN THE WAKE OF SITE C Newsmaker of the year: alliance architect John Horgan at the helm of 2017’s political sea change in B.C. KIRK LAPOINTE
The mantle has not come simply. No one else wanted the job he took in 2014 to lead the BC NDP as official Opposition. The province did not clearly elect the NDP in 2017 to lead B.C. The subsequent skirmish to build an alliance in a minority government was neither easy nor elegant. But John Horgan persisted, consulted, reflected and became B.C.’s 36th premier. He is the Business in Vancouver Newsmaker of the Year for 2017, a clear choice considering the political sea change he has conferred. The landscape for his work might be shifting, but the MLA for the Vancouver Island riding of Langford-Juan de Fuca will say he has not been changed as much as he has come back to his truer, dominant self – the “hopeful, optimistic” self, not the Angry John holding government accountable. “I’m pleased that I’m able to be myself every day and be accountable for what I do and what I say, rather than speculating and commenting on what someone else is doing.” The John Horgan of today is surprised and touched, first and foremost, through this “12-month blur” by “the generosity of people” – the well-wishers, including those who didn’t vote for his party in a province often polarized by politics. He could see a breakthrough coming, he said, when the BC Liberals misread the public’s need to make life better and campaigned on the status quo. In particular, they were not making any commitments on a “woefully inadequate” education file. While Liberals in May elected more MLAs – 43 to the NDP’s 41 – the three-person BC Green Party caucus held the balance of power and needed to be courted. Horgan feels the Liberals’ approach was transactional, rather than about values. “Rather than talk about what I can give you, we talked about what we could do together,” he said. A confidence covenant was created that aims for a four-year relationship. Minority governments might not always be optimal, but they have to operate more nimbly. It’s proving to be a good thing, Horgan said. “I believe I’m doing a better job and my colleagues are doing a better job because we have to be mindful every day within every decision [on whether] it’s going to have a negative effect on our relationship with other people. “Majority governments don’t have to do that. Over time they become smug and arrogant – regardless of whether they’re Liberal, NDP, Conservative or Green. It’s almost an inevitability.” His toughest call to date? “Site C, without a doubt.” The decision this month to proceed with the massive hydroelectric project confronted divisions across generations, even families. “My wife had a difference of opinion on the question,” he noted. But the deliberation by caucus effected a maturity and recognition that governments have to be for the broadest possible
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Premier John Horgan: “I have purpose – and that purpose is to continue the prosperity in British Columbia. And I can’t do it if the captains of industry are not onside” • ADRIAN LAM/VICTORIA TIMES COLONIST
interests of the people served. He knows, though, there are difficult relationships to mend in the time ahead. “There was no easy answer.” Horgan, 58, recognizes that the business community can be inherently suspicious of left-of-centre governments and their interventionist tendencies. But in his many presentations and discussions with business groups in his first few months, he sees a more positive sign as he reaches out. “I’ve been trying to be present and available to people, to give them comfort that I have purpose – and that purpose is to continue the prosperity in British Columbia. And I can’t do it if the captains of industry are not onside.” He sees government’s role as threefold for business: develop a skilled workforce, ensure modern infrastructure and nurture a health-care system upon which people can depend. There are, and will be, obvious headwinds. The challenges ahead: the North American Free Trade Agreement, housing affordability, education – “I could go on. The list is long.” The regrets? He would have preferred to have been in the legislature as it discussed amendments to the proportional representation law to reassure doubters. He intends to do so in the new year. The style he wants is of a leader who is an open book with challenges. “My approach to things has always been: address them when they arrive, deal with them openly, be candid and up front with people as to why you’re making decisions.” É
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2018
DEPARTMENT STORES SCRAMBLE TO REMAIN RELEVANT Holt Renfrew bets on higher end; competition intensifies efforts in mid-to-low-tier market
GLEN KORSTROM
Sears Canada’s plan to close all its stores and liquidate its assets in the lead-up to the holiday season has retail watchers musing about the future of department stores. No one expects business at remaining department stores to suddenly collapse, but retail analysts and pollsters say competition is getting fiercer and department stores that do not operate efficiently or embark on wrong-headed strategies could start to feel the pain. “Holt Renfrew, for many years, has been an operation in disarray,” DIG360 principal and retail analyst David Gray told attendees at the October 12 Retail West 2017 convention. He explained to Business in Vancouver afterward that this “disarray” stems from internal Holt Renfrew teams not working together. Instead, workers in the merchandising, marketing, technology and data areas are all in “separate silos,” he said. Another potential problem is that the company is going out on a limb in its bid to go even more upscale than it has been. Going higher-end means that fewer shoppers will be able to afford the chain’s products, and those who do will be part of an international jet set that is accustomed to shopping at stores such as Selfridges & Co. in London, England. Such “high-end luxury” stores set the bar high among well-heeled shoppers, Gray said. “Then they come back to Canada and go to Holt’s. Holt Renfrew is going to have a perception problem.” Holt Renfew has these challenges while being affected by a separate industry-wide problem. Brands are increasingly opening kiosks within department stores to introduce their products to new markets. Employees at those kiosks then collect lists of customers who were originally shoppers at the department store. The brand then leaves the department store to flourish on its own with the help of that customer information. Saint Laurent, for example, introduced its brand to Metro Vancouverites with a kiosk in Holt Renfrew. It then left last year to open its own boutique on Thurlow Street near Alberni Street. “Saint Laurent is one of the world’s most popular brands right now,” said Retail Insider Media owner and retail analyst Craig Patterson. “The brand essentially says, ‘Thanks for all your help. We’re ready to go on our own. We’re grown up now.’ They open a boutique and the department store loses the brand completely.” Patterson does not think Holt Renfrew is in operational disarray. He also understands the store’s ambitious renovations at its Vancouver store. He has heard that the Vancouver store’s expansion is in anticipation of it becoming the top-selling luxury department store in North America outside of Manhattan – potentially with sales as high as $500 million annually, though sales haven’t yet achieved such a level, despite being the top performer in the Holt chain. Gray does not doubt that Holt Renfew’s Vancouver store
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Metrotown will lose its Sears outlet when Sears Canada closes all its stores and liquidates its assets • ROB KRUYT
is doing well but he attributes that success to well-heeled Asian tourists – people who are also helping Nordstrom’s Vancouver store become one of the top-selling stores that the Seattle-based company operates. Nordstrom, in contrast to Holt Renfrew, has cross-silo teams, Gray said. It smartly had buyers come up to Vancouver on a regular basis in the lead-up to opening the store in September 2015 and has since been poaching some Holt Renfrew customers on the high end, Gray said. “A lot of Nordstrom shoppers are also coming from the [Hudson’s] Bay [Co.],” said Christian Bourque, who operates Leger Marketing’s Montreal office. Bourque pointed to data from a recent survey that Leger carried out with DIG360 showing that of those customers who are spending more on fashion today compared with two years ago, 30 per cent shop at a high-end store. For those who shop less for fashion today than they did two years ago, a much higher percentage shop at mid-tolow-end department stores, he said. “If there is potential, it would seem to lean in the direction of mid-to high-end department stores as opposed to mid-to low-end department stores.” Bourque, Gray and Patterson agree that chains such as Saks Off Fifth, Winners and Nordstrom Rack, at the lower end, will nip at the heels of the mid-tier Bay in the years ahead. Another concern for the Bay should be what Gray calls its “hinterland and suburban” locations. While the Bay has successfully transitioned in urban areas and has identifiable and successful flagship stores, Gray said other stores are basically “just big boxes with stuff” – something that will not retain shoppers when competition sprouts.É
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