February 2013 Business in Calgary by Business in Calgary

Junior Achievement of Southern Alberta Economic Futures Council â&#x20AC;&#x201C; Leaders Unite to Support Youth and Economy

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For nearly a century Canmore was an important coal mining centre in southern Alberta. Over time, the town evolved into an international recreation centre and tourist destination. While the town of Canmore changed, the Canmore Hotel did not. Located in the heart of downtown Canmore, the Canmore Hotel remains a precious landmark from those early mining days. As the second oldest, continuously operated hotel in Alberta, the pub has been catering to both locals and visitors alike for over 120 years. The Canmore Hotel was originally one of the town’s four grand hotels. As the sole survivor, it has spent a lifetime keeping watch over Canmore.

It is now time to restore, expand and sensitively rehabilitate this historic establishment so that its legend -- and its rich history -- will live on.

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THIS IS NOT AN AD FOR ROCKY MOUNTAIN EQUIPMENT. But it is an ad for everything we stand for. Things like honesty, integrity, and helping you put food on your family’s table. But above all, it’s an ad to let you know that none of those things are going away because we’re calling ourselves Rocky Mountain Equipment. Because even if the name on the sign is changing, our values won’t. Introducing the new Rocky Mountain Equipment DEPENDABLE IS WHAT WE DO.

Contents

volume 23 • Number 2

On our cover…

PuBLisheRs

Tim Ottmann & Pat Ottmann

Junior Achievement of Southern Alberta Economic Futures Council – Leaders Unite to Support Youth and Economy

editoR

Derek Sankey

coPy editoRs

Lisa Johnston & Nikki Mullett

February 2013 $3.50

Cher Compton cher@businessincalgary.com

contRiButinG desiGneR Jessi Evetts

adMinistRation

www.businessincalgary.com

aRt diRectoR

Nancy Bielecki nancy@businessincalgary.com Sarah Schenx info@businessincalgary.com

ReGuLaR contRiButoRs Richard Bronstein Frank Atkins David Parker Lonnie Tate Mary Savage

this issue’s contRiButoRs Andrea Mendizabal Stewart McDonough Jesse Semko

PhotoGRaPhy

Cover photo provided by JASA, Adam Peariso – SureReel

adVeRtisinG saLes

diRectoRs oF custoM PuBLishinG

Bernie Cooke bernie@businessincalgary.com Kim Hogan kim@businessincalgary.com

Junior Achievement of Southern Alberta Economic Futures Council – Leaders Unite to Support Youth and Economy

Education MBA | Tax Planning | Golf Tournaments

Clean Green Technology | Event Planning & Catering |

nspiring Futures Ca

Renee Neil renee@businessincalgary.com Bobbi Joan O’Neil bobbi@businessincalgary.com Brent Trimming brent@businessincalgary.com Carla Wright carla@businessincalgary.com Evelyn Dehner evelyn@businessincalgary.com Rachel Katerynych rachel@businessincalgary.com

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editoRiaL, adVeRtisinG & adMinistRatiVe oFFices

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COVER 37 • inspiring Futures

Junior Achievement of Southern Alberta Economic Futures Council – Leaders Unite to Support Youth and Economy By Derek Sankey

THIS MONTH’S FEATURES 22 • Going it alone

How to best structure your independent business By Michael Doucette

28 • the Push to Green By John Hardy

view our electronic issue of this month’s magazine online at www.businessincalgary.com

6 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

Private Company Services www.pwc.com/ca/dbia

Generation to generation, not quarter to quarter

Contact: Nadja Ibrahim Business Advisor 1 403 509 7538 nadja.ibrahim@ca.pwc.com

Succession is a process, not an event. By working closely with you and your family to create a longterm plan, we can help ease the transition of your business from one generation to the next.

Contents

volume 23 • Number 2

(THIS MONTH’S FEATURES CONT’D) 43 • calgary competes for high-Proﬁle events City venues go head to head to attract large-scale events in 2013 By Derek Sankey

57 • MBas deliver What executives Want

Recruiters see value in targeted MBA education, as long as it’s combined with lofty career goals and experience By Shannon Clive

64 • Leading the Market

As residential real estate prices continue to fall nationwide, Calgary’s market remains strong and experts anticipate the trend will go on By Heather Ramsay

68 • Men navigate Fashion World dominated by Women Business casual or formal, lots of options and emerging trends are catching on among both sexes By Michael Doucette

73 • a taxing time for calgary consultants

The Canada Revenue Agency is targeting incorporated professionals with potentially drastic consequences By Derek Sankey

76 • the Business of Golf By John Hardy

81 • a Road Less taxing By Ben Freeland

COMPANY PROFILES

85 • Jager homes

Building Calgary communities for over 65 years

91 • calmont Group 35 Years of Driving Success

96 • conform Works inc. Building a Legacy

REGULAR COLUMNS 10 • Mindless no More By Richard Bronstein

12 • the taxicab Problem: Part 2 By Frank Atkins

14 • the Quiet civil War By Lonnie Tate

101 • Leading Business 105 • the calgary Report

Current developments for Calgary Telus Convention Centre, Tourism Calgary, Calgary Economic Development, and Innovate Calgary

110 • Marketing Matters By David Parker

8 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

THE WAY LANCE WORKS:

MAKE GROWTH THE OXYGEN OF YOUR BUSINESS. LANCE HURTUBISE President and CEO, Vintage Group

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Mindless No More • Richard Bronstein

BY RichaRd BRonstein

Mindless no More

ome of the language regarding the hunger strike by Attawapiskat Chief Theresa Spence and the uprising of the Idle No More movement is a bit offsetting. Probably 99 per cent of Canadians have never been to an aboriginal reserve. Yet when the issue hits the media, we are all suddenly experts on what our aboriginal cousins need. The consensus answer, according to a majority of media commentators and letters to the editor I have read, is that all Canada’s aboriginals need is just better accounting. As in, “We (white citizens) already give you enough money but you (Indians) waste it.” End of discussion. Reminds me of that famous line from the 1967 movie Cool Hand Luke where Paul Newman plays a rebellious prisoner in a Florida chain gang. The prison captain says: “You gonna get used to wearing them chains after a while, Luke. Don’t ever stop listening to them clinking, they gonna remind you about what I been saying for your own good.” Luke replies: “I wish you’d stop being so good to me, Captain.” Captain: “Don’t ever talk that way to me. (Pause – he strikes Luke.) What we’ve got here is failure to communicate. Some men you just can’t reach.” Europeans first started settling in Canada early in the 16th century. Aboriginals taught those early settlers how to survive in this tough country. We said thank you and then cast them out to the margins where they remain 500 years later, their traditional societies broken, but not yet full partners in modernity because they still hear the chains clinking. One of the ways we continue to marginalize aboriginals is for us to speak – rather dismissively – for what they want. Globe and Mail columnist Jeffrey Simpson has called the current protest movement a childish wish on the part of aboriginals to return to traditional life, what he calls “a dream palace of memory.” That’s a pretty denigrating comment, like saying aboriginals would prefer chewing on willow bark than go to a pharmacy. An interesting outlook on what “traditional life” really means can be found in a new book by UCLA geographer Jared Diamond called “The World Until Yesterday: What Can We Learn From Traditional Societies?” Diamond is well known for a previous bestseller, “Guns, Germs, and Steel.”

10 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

In this new book he examines how traditional societies dealt with important lifecycle issues such as child rearing, caring for the elderly and infirm, relationships with strangers, spiritualism, and how to treat lawbreakers. He contrasts this with, as one reviewer put it, “to the consumerist, sharpelbowed, unkind, cancer-suffering, diabetic and gun-toting madness” of supposedly advanced civilization. The main question Diamond raises is not who is better off – old society or new society. But what are eternal values of civilization and what are tools and techniques for achieving them? Others have gone down this path of inquiry too and before we sound off on Canada’s aboriginals, we might want to examine other compelling visions, such as Victor Hugo and Charlie Chaplin, to mention only two artists of stature. Hugo is back in vogue because of the new film “Les Misérables,” a worthy tear-jerker and yes, Anne Hathaway is great. But the story is as much about the abuse of power in pre-revolutionary France and its crushing impact on the wretched of the earth. In another vein is Charlie Chaplin’s 1936 film “Modern Times,” a prescient critique of the modern industrial assembly line and the yaw of the Great Depression as those who exercise power destroy the lives of the Little Tramp and other common decent people. I don’t know if Chief Spence or the Idle No More movement is the spark for a new aboriginal civil rights movement. I don’t speak for them, but surely we ought to be wise enough to understand that what we are hearing is a voice of deep frustration and hurt among Canadian aboriginal families that it is getting worse, not better. The answers will not come easy or fast. But it is completely shameful that too many of us wag our fingers over their alleged shortcomings as if we have none. And what lessons are we imparting as this discussion continues? That our main belief system is double-entry bookkeeping, that our one God is shareholder value and our only prophets and angels are middle managers? Maybe if we listened with greater sincerity we might find that what is good for aboriginals is good for all of us in helping prevent the worst of modern madness and achieving more harmony and social intimacy. BiC

social network |sō’shəl nĕt’wûrk’| n. 1. A place to understand and share ideas, opinions, and resources 2. Programs and classes where you can meet people with similar interests 3. An exchange of opinions with others who challenge your viewpoint 4. An opportunity to expand your social circle and your mind 5. The Calgary Public Library

The Taxicab Problem: Part 2 • Frank Atkins

By Frank Atkins

ast August I wrote about the shortage of taxis during the Stampede. As expected, this problem arose again during the recent holiday season. Alderman Ray Jones at first repeated what has come to be the standard city hall response: there is only a cab shortage during peak times (Stampede and Christmas holidays) so there is not really a need to issue more taxi licences. However, Jones then went on to say that it is not really the number of licences that is the problem, but rather the fact that not enough drivers are willing to work during the peak times at night. With all due respect to Jones, I do not think that he understands what he is saying. For all of us who survived our first-year economics course, we can remember a standard economics lesson. If the government controls supply, then demand fluctuations will change price. In this situation if there is excess demand for taxis as at peak time, price should go up. This should induce more drivers to be on the road. However, we have an interesting situation in the taxi industry in Calgary, as the government controls both the supply of taxis and the price of a fare. Therefore, there is no incentive for individuals to work harder during peak times. This is very similar to how the economy worked in the former USSR. The government controlled everything and there was no incentive for work effort. We all know how that turned out. I am always very pleased when entrepreneurial individuals find inventive

The Taxicab Problem: Part 2 methods of circumventing a bad situation. Enter Jeff Doepker who developed a phone app called FastCab. You can offer a driver a tip for a guarantee of a faster pickup. This is a brilliant idea, as it gets around the problem that the city controls both the quantity and the

may go some distance towards alleviating the peak-time availability problem. The response of the taxi industry (that is the owners, not the drivers) has been predictable. This has ranged from this is probably illegal to it is unfair for the people who cannot

The fact that in excess of 160 Calgary taxi operators have signed on to this already suggests that this system is capable of drawing more taxi drivers into the system at peak demand hours. price. The fact that in excess of 160 Calgary taxi operators have signed on to this already suggests that this system is capable of drawing more taxi drivers into the system at peak demand hours. City hall has been strangely silent on the introduction of FastCab. One suspects that they did not understand the problem in the first place, so they cannot understand how something could help with a problem that did not exist. This reminds me of Alderman Druh Farrell’s rant several years ago that “the laws of economics do not hold anymore.” This must be the thinking behind the USSR-inspired policy of controlling both the quantity of taxi licences and the price of a fare. As noted above, the response of the drivers has been favourable, and this

12 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

afford to pay the extra money. These people are trying to protect their monopoly in the taxi market. This monopoly exists because city hall has allowed it to exist. This monopoly does not serve the consumer well. The fact that it is allowed to exist can only mean that city hall is bending to lobbying on the part of the taxi industry. Given this, I suspect that city hall may find a way to get rid of FastCab at some point in the future. Next peak demand time we will all be waiting hours for a taxi once again. BiC Frank Atkins is an associate professor of economics at the University of Calgary and a member of the Advisory Board of the Institute for Public Sector Accountability.

The Quiet Civil War • Lonnie Tate

By Lonnie Tate

The Quiet Civil War

think the world of politics has changed forever. If you didn’t think that before the recent U.S. presidential election, you should be thinking it now. In the not too distant past, a bunch of grey-haired, well-off Caucasian gentlemen with significant business and political connections effectively ran politics – the back room boys. In both parties, they would pick a few appropriate candidates, back them with money and then one of that number would be anointed by the party faithful to run against an anointed person from the other party. The electorate would make a decision by trying to differentiate between two peas in the same pod. In the last two elections, it has been different. The president has become a two-term president by winning a substantial majority among minorities and more or less holding his own with establishment Caucasians. Much of the American followup discussion has been about ethnic minorities and how they swayed the election in the direction of a man of colour (who coincidentally was the incumbent president). While there can be little doubt that winning the visible minorities pushed the president over the top, I think the underlying minority unrest is more than a matter of colour. I think there is a battle between “the haves” and “the have-nots” brewing in America (and elsewhere). As one well-known commentator said: “It’s the economy, stupid!” And I think he was right. The haves and have-nots have been polarizing over the past half-century. In the U.S., inflation-adjusted average incomes have more than doubled over the last 40 years. But the median income level has barely moved. The rich are getting richer and the poor are getting poorer. In American political jargon, that translates to: “The middle class is disappearing.” The lower-level income bunch includes pretty much all of the ethnic minorities and a fair number of others. So while the statistical analysis of who voted for whom is correct, I think the most important underlying cause is money, not racism. And then there is a catalyst that empowers the minorities to the disadvantage of the establishment – social networking. Cheap, easy, directed communication is the order of the day. The lower economic strata have access to texting

14 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

and the Internet and (on a person-by-person basis) are more adept at using the tools. Campaign expenditures on Internet activities of the two presidential candidates were secret during the election. But we now know the Romney campaign spent $4.7 million; the Obama campaign $48 million. Small wonder Obama won over the lower-income voters. When you tie those economic, demographic considerations to the revolutionary changes in affordable social communications, the old guard (read Republicans) was caught off guard. When Romney campaigned on helping the rich reinvest in America, the lower 50 per cent saw that as code for: “Let’s continue to widen the gap between the haves and the have-nots.” When the poorer half talked and organized through social media, the jig was up. So … it seems to me that the days of a few, well-off, older, white guys deciding how they will win an election are over. (Thank heavens the campaign is over and political messages have stopped. With $6 billion in advertising and promotion for the U.S. election, the amount is staggering. But then again, Americans spend more than $6 billion on Halloween. Kind of makes you wonder … doesn’t it? But I digress.) Does the recent U.S. example have relevance in a Canadian context? You bet it does. In the last election for mayor of our city, Naheed Nenshi was given little chance by the pundits. Could a well-educated, Muslim fringe player win an important election in Calgary? Highly unlikely! Two establishment candidates were supposed to duke it out and they did, more or less splitting the establishment vote. (Just so you know, I wore a “Barb button.”) Mr. Nenshi came up the middle, relying on a really well-organized social media network while spending only a tenth of what his two main competitors dispersed. He successfully polarized a large minority and garnered enough other votes from the establishment to win. (Another aside: I recently watched a CNN special program on the importance of immigration that featured Calgary and Mr. Nenshi. He was first-rate.) So pay attention! A quiet, unannounced, civil war has started … and I think traditional, establishment candidates have little chance. BiC

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It started with a vision... It started with a Then and now

Prairies

DAN THEMIG Packers Plus Energy Services Inc.

DAN THEMIG

L-R: Ken Paltzat, Peter Krabben, Dan Themig

an Themig’s company has come a very long way from its early days when he sketched out an idea to extract more oil from unconventional sources in 2001, while sitting on a plane to Houston before meeting with an oil and gas company. Since then, Packers Plus Energy Services Inc. has morphed into a powerhouse in the energy sector on the leading edge of new technologies that are now being used around the world. In 2009 when Themig and his firm were the Ernst & Young Entrepreneur Of The Year Canadian Award Recipients, the company had already proven its innovation and might. Since then, the company has grown from about 250 employees to the roughly 750 current workers in its

expanded or new facilities in Calgary, Houston and Edmonton, with plans for its facilities underway in Grande Prairie and Red Deer. It has offices in China, where it is doing a lot more work, it’s growing its Middle East and Brazil presence while also working in the North Sea through its office in Aberdeen, Scotland. “I think we’ve barely just touched the tip of the iceberg,” says Themig, who currently serves as president of Packers Plus. The firm’s success is due largely to its inherent nature of going against the grain. In 2009, at the height of the great recession, instead of closing facilities and laying off staff, Themig did just the opposite. “We go against the grain quite a bit at this company and challenge the status quo.

h a vision... “I’ve learned that process is key, which is something I wouldn’t have told you when I started the company,” he says. “I’ve learned that innovation on its own is not enough; you have to have operational excellence so that your field execution is flawless. And if you don’t have world-class service, you will be out of business.” As Themig and his team at Packers Plus look to the future, they see vast global opportunities. “This is a really exciting time for us,” he says. “There are a lot of transitions happening in the energy industry worldwide.” One main objective is to always maintain a two- to three-year outlook on the sector indeed a tricky goal to achieve in a continually shifting business. “Our future is innovation, a long-term focus, trying to anticipate where the industry is headed and then really to be a key supplier and a good company to do business with for our customers,” says Themig. Customer relationships are essential to the company’s ability to innovate new products that reflect true industry needs, trends and emerging opportunities. “Our continued role into the future is to bring game-changing innovation to markets around the world instead of just in North America,” he says. “We’re a strong force in the industry right now.” Ernst & Young Entrepreneur Of The Year® honours outstanding Canadians who have turned their unique business vision into successful reality. In 20 years, the program has achieved several major milestones in Canada including over 8,700 nominations received, more than 3,000 award finalists named, and presented 980 regional awards — including 40 lifetime achievement awards.

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That’s been our modus operandi since day one.” He believes that if you follow the crowd and spend all your time analyzing what the competition is doing, you lose focus from what your customers are doing. “We rarely talk about competitors,” he says. “You can’t be a leader and you can’t be innovative if you’re just looking around at everybody else.” In 2009, Packers Plus hired more design engineers than it had in any previous year. It opened a new engineering centre in Houston to complement its existing centre in Edmonton and invested in new testing capabilities. It invested millions of dollars in robotics and automation at a time when nobody else was doing it. His style of leadership as the company has grown has been to keep the inner workings of the company close to his chest. You can only keep some of that information a secret for so long, though. This year, the company plans to release more information to industry and trade publications about the cutting-edge technologies it’s developing. Through it all, Themig and his team have retained a local focus while everybody else flocked to China. “A lot of our competitors were busy closing their plants in Canada and moving them to China,” Themig says. “What we decided for our company was that quality is key. While other people are busy moving their manufacturing to China and exporting to the U.S., we’re busy manufacturing in North America and exporting to China.” Upon reflection on his personal growth as an entrepreneur, Themig says consistency has been paramount to his own success and that of the business.

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off the Top • News

hullelujah 2012 On December 13, 2012, more than 300 guests celebrated the magic of Christmas at Hull Services’ annual fundraising event, Hullelujah. This festive and elegant evening raised nearly $370,000 in support of the kids and families with Hull Services. Special guest star George Canyon and his talented band presented an energetic show that had everyone singing along. Myja, a former youth from Hull, brought the audience to tears with an emotional performance of her original song called “Choices.” The Calgary Petroleum Club provided the perfect ambience and cuisine and this year’s gala commemorated Hull Services’ 50th anniversary. In honour of this milestone and Hull’s founder, William Roper Hull, the inaugural William Roper Hull Community Leadership Award was presented to Charlie Fischer for his outstanding leadership, entrepreneurial spirit, social vision and philanthropy. BiC

Inaugural recipient of the William Roper Hull Community Leadership Award, Mr. Charlie Fischer and Hull Services Executive Director, George Ghitan.

George Canyon

This festive and elegant evening raised nearly $370,000 in support of the kids and families with Program Coordinator, Bryan Hume accompanying Myja, a former youth with Hull.

Ray and Jeannine Crossley, Hullelujah 2012 Co-chairs.

18 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

Hull Services.

Hull Services Board Members and Grand Nephew of Emmeline Hull (William Roper Hull’s wife), Jim and Susan Banister.

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off the Top • News

young canadians to celebrate 45th anniversary in style The Young Canadians (YC) of the Calgary Stampede are celebrating their 45th anniversary in Broadway style performing at their first-ever fundraiser gala hosted in Calgary on March 9, 2013, at the University of Calgary Downtown Campus. “This is an exciting new era for the Young Canadians,” says Phil Heerema, YC business administrator and production services coordinator. “They are embarking on the next 100 years as they showcase performers for the Calgary Stampede. It will be an exciting time for this dynamic group and they are planning to start it with a bang with their first-ever fundraising gala.” Each year, hundreds of young dancers and singers audition for a chance to become one of the 150 YC that perform for over 170,000 audience members during the 10-day Calgary Stampede. Once selected, the perform-

ing group – who range from seven to 21 years old – begin year-round training each September at the Young Canadians School of Performing Arts that is funded through the Calgary Stampede Foundation. “In order for our youth to be the best, they need to be exposed to the best, which includes workshops with Canada’s best choreographers, performers and producers as well as continued performance opportunities and instruction from the best in the business,” says Angela Benson, the YC artist director and choreographer. Additional training costs which enhance the delivery of excellence in programs will be covered through funds raised at the inaugural Steppin’ Out gala. The event will include exclusive performances from the Young Canadians and will feature hostess Jill Belland from Breakfast Television. Maria Hodge, gala committee chair,

20 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

adds, “This is a great opportunity for companies to show their support and give a warm thank you for the passionate performers of the past, present and future Young Canadians.” BiC

going it alone • Tax Structure

Going It Alone how to best structure your independent business By MichaeL doucette

algary is a city set to boom with consultants. Thousands of oilpatch veterans are nearing some form of retirement, or semi-retirement, in the next few years. Many have already joined (or rejoined) the workforce as independent consultants after spending years working in the gleaming offices of the patch downtown. It makes a lot of sense. They retire from their long-term careers as full-time employees, set up a corporation and perform many of the same services they provided before, but to different clients – and on different terms. Or do they really? That’s where it can get confusing and potentially costly for would-be consultants. Determining how to structure your business as a consultant or self-employed individual, as well as your relationship with your clients, can have profound tax implications for the individuals and potentially for the employers. From sole proprietors to personal services businesses to incorporating your venture as a consultant, working with an experienced tax lawyer and accountant is a common-sense piece of advice from anybody who has worked in this area for any length of time.

22 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

Business in Calgary asked the experts how to go about establishing an independent consulting business that maximizes tax efficiencies, minimizes risk and positions yourself for growth and secure income into your so-called retirement.

What are the most important basic considerations in determining when, or if, you should incorporate? The most obvious question when determining whether to incorporate your business as a consultant comes down to individual circumstances. “In many cases, this will depend on the facts such as expected profits, what type of business is being carried on, whether family members are part of the business, the cash needs of the entrepreneur for personal living needs (and) regulatory restrictions,” among several other considerations, says Kim Moody, a tax specialist with Moodys Tax Advisors LLP. Matt Clark, an associate partner with Shea Nerland Calnan LLP, says the most important consideration is determining whether the worker is a true contractor, or is simply disguised as an employee.

2013 Call for Nominations

Michael Sikorsky

Derek Doke

Mike

Elisabeth

Joseph

Fayt

Ryan McMillan

Victor Petrovic

Anil Datoo

Some winners from our 2012 Leaders of Tomorrow

Platinum Partner

Gold Partners HUMAN RESOURCES INSTITUTE OF ALBERTA

Eligible nominees will be business owners who are leading and will continue to lead their industry/profession, their company and their community. We are calling for nominations of individuals with the following achievements: • They must own and operate a successful business within the city of Calgary that has solid growth, stability and strong projected future growth. • They must give back to the community in a charitable manner through time or financial contributions. • They must lead their industry/profession through innovation and involvement within their sectors/associations. Business in Calgary will assemble a group of entrepreneurial and professional business people. These three independent judges in the business community will select the top 20 leaders from all the nominees. There are no age limits for the nominees as leaders come in all ages. The size of the company may not be as important as the size of the idea and the potential for the future … that will be up to our judges.

To nominate your Leader of Tomorrow, please fill out the Nominee Form by going to the following link: www.businessincalgary.com/lot_nominee_form Deadline for submissions is March 11, 2013. Business in Calgary will feature your Leaders of Tomorrow in our July 2013 issue. For further information, you can contact Pat Ottmann, publisher, at pat@businessincalgary.com or 264-3270 ext. 224.

going it alone • Tax Structure

Unincorporated partnerships are essentially the same as sole proprietorships except with multiple people, all of whom record their share of the business income on their personal returns…

Among the other considerations, ask yourself: Does the worker have multiple clients or only one? Does the worker use his or her own office space or tools? Does the worker have a business card or direct affiliation related to the employer, such as an email address? Does the worker have regular hours set by the employer? Can the worker subcontract out the services? “The legal distinction between an employee and a contractor is multifaceted,” says Clark.

What are the options for structuring your selfemployed business? The options are straightforward. The complexities and subtle differences between them aren’t always as clearcut. There is a sole proprietorship, where the individual is not incorporated, declares all income generated under their personal income tax return and deducts legitimate business expenses. Then there is the corporation, which allows the owner to pay themselves a salary or dividend and defer taxes on the remaining money by leaving it in the corporation. Or you can build some form of a partnership. Unincorporated partnerships are essentially the same as 24 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

sole proprietorships except with multiple people, all of whom record their share of the business income on their personal returns, according to Rick Breen, a lawyer and partner with Mcleod & Company LLP. For independent entrepreneurs with few or no employees, limited partnerships tend to unnecessarily overcomplicate matters. In addition, a personal services business (PSB) only covers situations where a corporation carries out a service that essentially would otherwise be carried out by employees. An unincorporated consultant can never be subject to the PSB rules set out in the Canada Income Tax Act, says Moody.

How do the different structures differ from a tax perspective? Money that is not paid out in salary to the owner of a corporation and is left in the corporation is taxed at the corporate rate of about 14 per cent – much lower than the lowest marginal tax rates on personal income – and is known as the Small Business Deduction. Owners can then spin off a holding company to be used as an investment vehicle. As a sole proprietor, the obvious advantage is that the individual can deduct certain expenses from their income.

Official Nomination Form

Go Online to www.businessinCalgary.com/lot Submissions Directions: Please complete the application in its entirety. Send the form via fax to 403.264.3276; or scan and email to pat@businessincalgary.com Eligibility: All nominees must own, be a partner, CEO, or President of a private or public company, and be

a primary stakeholder responsible for the recent performance of the company. In addition, the nominee’s company must be Calgary and area based and have been in existence for a minimum of three years.

Judging Panel and Criteria: The independent panel of judges will consist of a selection of successful business leaders from the community. The judges will analyze an extensive list of criteria that will include finances, strategic direction, product or service innovation, company leadership (including personal integrity, values and key employee initiatives), community involvement and philanthropic activities. Nominee’s Name: Title:

Nominee Print or Type Only Please

Company Name: General Company Phone: Business Address: City:

Province:

Postal Code:

Company Website: Nature of Business: Nominee’s Phone:

Nominee’s Email:

Assistant’s Name: Assistant’s Phone:

Assistant’s Email:

Has Nominee previously been nominated for Consideration? Yes / No Year(s): For any questions or follow up related to this information, please designate a contact, or confirm nominee or assistant as primary contact.

Platinum Partner

Gold Partners

HUMAN RESOURCES INSTITUTE OF ALBERTA

going it alone • Tax Structure

“A lot of people think that they can magically deduct a lot of home or personal expenses if they are now a consultant. There are boundaries as to what can be deducted against business income and ultimately a lot of people are surprised at that.” ~ Kim Moody

“However, the ability to deduct more expenses is the subject of a lot of ‘mythology,’” says Moody. “A lot of people think that they can magically deduct a lot of home or personal expenses if they are now a consultant. There are boundaries as to what can be deducted against business income and ultimately a lot of people are surprised at that.” Whether or not the PSB rules apply depends on whether (ignoring the corporate status) the worker is legally a contractor or employee. If he or she is an employee, then PSB rules apply to increase the corporate tax rate significantly. If the contractor operates individually, not inside a corporate structure, PSB rules don’t apply. The PSB rules are designed to restrict the operator’s ability to leave surplus earnings inside the corporation, where it’s taxed at the lower 14 per cent rate.

Does a consultant have to pay for Canada Pension Plan (CPP) premiums? If a consultant is a sole proprietor, both the employee and employer portion of CPP contributions will have to be paid by the individual on their personal income tax returns to a maximum of $4,600, says Moody. If the business is incorporated, the employee portion of CPP is withheld from any salary paid and the corporation would pay the employer portion of CPP, he adds. 26 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

However, if the corporation pays the contractor through a dividend, there is no CPP that has to be paid by the corporation, according to Clark. Many consultants now have the ability to pay into employment insurance (EI), but not many do and not many experts advise it. “As a general rule, it does a contractor no good to pay EI, since an individual contractor cannot collect EI if a contract is not renewed, and a contractor cannot collect EI if he is filed by his own corporation,” says Clark.

How is liability affected by the structure of a corporation or a sole proprietorship? Known as a “corporate veil” of liability protection, a corporation offers the consultant more protection than a sole proprietorship, where the individual is fully liable. In a corporation, if the owner spins off a holding company as an investment vehicle, the company can also be used as further liability protection. “Consider whether an alternative legal entity or relationship, such as a corporation, can provide improved liability protection as compared to a sole proprietorship,” Moody says. “Often – but not always – a corporation can provide better liability protection.” BiC

Chicago

Chophouse:

Under New

Adam Dalsin

Ownership

hen Adam Dalsin and Victoria Harris purchased the Chicago Chophouse in the fall of 2010, they had a vision of a higher-end downtown Calgary restaurant focusing on spectacular food, customer service and community involvement. Two years later and for patrons who frequent the Chicago Chophouse, Dalsin and Harris welcome their customers like old friends. “We try to know their names, their favourite wines and their favourite table, and we encourage our staff to interact the same way,” says Harris. “When our customers arrive, our servers often greet them with a hug!” It is, quite simply, how Dalsin and Harris run their business. Initially, the couple envisioned many changes, but it didn’t take them long to realize what the business really needed: a new passion infused into the operation. “Many of the original staff remained with us, we changed the menu and updated the restaurant, but the most important thing we did was to listen to our customers and staff,” adds Harris. The Chicago Chophouse is one of few local restaurants that still offers Canadian prime beef and according to Dalsin, it represents less than the top one per cent of all beef in Canada. “When it comes to beef, ours is among the best.” As of recently, Chicago Chophouse offers Canadian prime beef as well as the highest level of AAA Alberta beef from Northridge Farms. This further supports the goal of the owners’ original intent of supporting local farmers with organic “real” food; always knowing where their product comes from and where it’s been. The Chicago Chophouse is one of the only local restaurants that still dry ages as well as wet ages their beef in-house. “Dry aging is an extra step that makes our beef more tender and flavourful – it’s a more expensive process, but it’s well worth it,” asserts Dalsin. Much like the quality of their beef, the Chicago Chophouse offers a world-class wine list that’s among one of the finest in the

Victoria Harris

city. Steve Tabinski, general manager, is responsible for choosing all of the wines for the Chophouse cellar, educating the servers and working with the wine representatives. “Steve is constantly talking to our customers and wine reps, so our selection is always changing. We represent many different regions and we focus on wines that are not readily available or necessarily well-known, as well as the more talked about and sought-after favourites,” comments Dalsin. “If our customers educate us about a favourite wine, we try to locate it, taste it and bring it in for them and others to enjoy.” Mohammed Hossen, executive chef, is another major cornerstone of the business. “Moe is very personable with the customers and is committed to using organic foods as much as possible,” adds Harris. “We try to make everything in-house – from our ice cream to our salad dressings, sauces and secret steak spice. It enables our servers to know exactly what is in the food we’re serving, and better enables them to know how to pair the food and wine to make it a great dining experience.” In addition to the traditional, yet sophisticated ambience that welcomes patrons inside, the Chicago Chophouse also offers two private dining rooms that can accommodate private functions, enabling their venue to hold special events hosting anywhere from two to 200 guests. It is ideal for weddings, corporate functions or any special occasion. Last year, they hosted parties with entertainers including Johnny Reid, Don Felder and Paul Brandt. On any given day, you will find Dalsin and Harris mixing among their patrons – talking about a variety of topics. “We have a strong presence with our customers; it’s important to know the people who have supported us, and some of our customers have become good friends,” adds Harris with a smile. “We’ve both been in the industry since a young age and we have seen it from all sides,” says Dalsin. “We really enjoy the interaction with our customers – we meet so many interesting people on a daily basis. We’ve tried to create a very personable and social atmosphere.”

Chicago Chophouse • 604 8th Ave. SW, Calgary www.chophousecalgary.com • 403.265.3000 Serving Lunch & Dinner (Reservations recommended) To book a private or corporate function, please contact Eleni Vincent

The

Push to Green By John haRdy

n so many ways, the world relies on oil and gas. Now, and until alternative energy becomes more than just talk and theory, the world is relying on oil and gas to green itself.

28 â&#x20AC;˘ February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

Itâ&#x20AC;&#x2122;s a colossal challenge but it has begun! Oil and gas is responding: to make it a more efficient industry, for quality of life, for government compliance and just because it is the right thing to do.

The Push to green • Clean Green Technology

“As one of the largest energy producers in the world, Alberta’s situation is perhaps bigger and much more complex than other producers.” ~ Chris Holly, head of research and technology at Alberta Energy

“As one of the largest energy producers in the world, Alberta’s situation is perhaps bigger and much more complex than other producers,” admits Chris Holly, head of research and technology at Alberta Energy. “But so are the opportunities to make a real and positive impact. The industry has already begun to make tremendous and innovative changes and there are already some real benefits, interesting new technologies and noticeable improvements.” The government-required greening of the oil and gas industry became law in July 2007. Of course, by nature of government legislation regulating a massive and highly complex and technical industry, Alberta’s climate change legislation and its maze of sections and subsections are extremely detailed, highly technical and long.

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With a 2050 target date, Alberta is funding oil and gas projects that help reduce the cost of separating carbon dioxide from other emissions, carbon capture and storage, and funding research on new oilsands extraction processes that use less energy, less water and reduce the grunge of tailing ponds.

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In order to achieve green energy production, Alberta has also become a world leader and is heavily investing in clean energy technologies. The province has not only implemented ambitious regulations requiring Alberta companies that spew more than 100,000 tons of greenhouse gases

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a year to reduce emissions intensity by 12 per cent, but it is putting its money where its proverbial (legislative) mouth is. With a 2050 target date, Alberta is funding oil and gas projects that help reduce the cost of separating carbon dioxide from other emissions, carbon capture and storage, and funding research on new oilsands extraction processes that use less energy, less water and reduce the grunge of tailing ponds. “Although the rules and specifics are clearly spelled out, the meaning of ‘greening’ is still open for misunderstanding,” cautions Dr. Patrick Feng with the science, technology and society program at the University of Calgary. “We hear the term so often that, after a while, the meaning gets blurred and is up for grabs. Does greening of oil and gas focus on just one emission, like methane? Or do you include the excessive water use of the production processes? Oil and gas companies are very, very water intensive, and do you

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conserve the other energies used in the oil and gas operation?” Feng asks. There is tremendous activity and production at the unique technologies of the Alberta oilsands, so it was an ideal and perfect symmetry one year ago when 12 companies that are most active in the oilsands got together to form an unlikely alliance. The Canada’s Oil Sands Innovation Alliance (COSIA) focuses on accelerating environmental performance in the oilsands. The 12 fiercely competitive but now research-collaborative COSIA partners are BP Canada, Canadian Natural Resources, Cenovus, ConocoPhillips Canada, Devon Canada, Imperial Oil, Nexen Inc., Shell Canada, Statoil, Suncor, Teck Resources and Total E&P.

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gases, water, land and tailings. While it’s way too early to talk about results or successes, tailings management is definitely one of the most difficult environmental challenges for the oilsands mining sector.

“COSIA is a new dynamic for the oilsands industry and a reflection of how the oilsands have evolved into a global resource,” according to Jean-Michel Gires, president and CEO of Total E&P Canada. “The companies who have come together to form COSIA have committed to work on innovation and the development of new environmental solutions.” And the alliance is already running on all cylinders and showing impressive results.

32 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

“It’s remarkable what we can achieve when we work together and combine our ideas and efforts,” says Dan Wicklum, the widely-respected, world-class environmental scientist and researcher who was appointed COSIA’s chief executive. “The COSIA model and the invaluable co-operation of the charter partners is globally unique and we routinely have inquires from academic institutions from around the world. We’re new, we

The Push to green • Clean Green Technology

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have a big mandate and we keep quite a pace. From patents to monitored data, we develop frameworks and share innovations,” Wicklum explains. “It’s such a huge project that we determined we would start by focusing on four key environmental priority areas (EPAs): greenhouse gases, water, land and tailings. While it’s way too early to talk about results or successes, tailings management is definitely one of the most difficult environmental challenges for Dan Wicklum, COSIA’s chief executive

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The Push to Green • Clean Green Technology

Thanks to aggressive government involvement and support, stringent but realistic legislation and regulations, the exciting research and development of new technologies and exceptional industry collaboration like COSIA, the greening of oil and gas is happening, it is positive and it is good.

The greening of the industry isn’t just a list of changes to be made to appease legislation. It’s deep, it’s industry-wide and it is urgent. “There is a seismic shift about the nature of energy production,” according to Feng. “And the oil and gas industry must be prepared to change, enormously. Let’s face it; we have created a life that relies almost exclusively on fossil fuels. Today oil and gas companies are mistakenly considered ‘energy companies.’ They are not! They are ‘get–oil-out-ofthe-ground companies.’” Feng adds, “We must think in terms of 20-30 years from now and anticipate alternate energies. We’re way too smart to allow ourselves to get caught in a Kodak moment.” Feng uses the analogy that Kodak, the legendary American camera and photography giant, was at the top of their game, booming for decades and realized that new technology was eventually going to happen. They didn’t plan ahead.

the oilsands mining sector. There are currently more than 170 square kilometres of tailings ponds in Alberta and ultimately something must be done about it.” Alberta Energy’s Holly explains that, until the climate change legislation was announced, the oil and gas industry was booming but didn’t collaborate very much. Today the government is both surprised and delighted that industry is working together and already achieving results. “We’re now noticing research and technology which has been kept under wraps and secret for about five years or so. The industry is now working together, there are advances and we are already seeing some phenomenal benefits, process improvements and interesting technologies like steam-assisted gravity drainage (SAGD) technology,” Holly says. “Projects using SAGD are becoming more common. Currently there are about 20 projects in Alberta using SAGD compared to less than five in use prior to 2000.”

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The Push to Green • Clean Green Technology

“By the time digital hit,” Feng shrugs, “Kodak was unprepared, quickly became obsolete and soon disappeared. Of course fossil fuels will likely never be obsolete in, at least, the next few lifetimes but if you deny climate change, don’t feel a need to think about the air and water because you are satisfied to indefinitely just ‘get oil out of the ground,’ there’s a chance that you may be headed for a Kodak moment.” By all indications, the push to green the oil and gas industry already has strong momentum. Thanks to aggressive government involvement and support, stringent but realistic legislation and regulations, the exciting research and development of new technologies and exceptional industry collaboration like COSIA, the greening of oil and gas is happening, it is positive and it is good. “I’m prouder than ever to be an Albertan,” Holly says. “We have already earned a worldwide reputation for energy innovation and it’s growing with every breakthrough.” BiC

www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 35

Over 65% of Achievers indicate Junior Achievement

inspired them

to stay in school. Take a closer look at our IMPACT Participation in a Junior Achievement of Canada program provides a transformational event that alters ambitions and encourages youth to do more with their lives. According to the Boston Consulting Group, 65% of Achievers (Alumni) indicate that participation in JA Canada programs had a significant impact on staying in school and enrolling in post-secondary education. To learn more about Junior Achievementâ&#x20AC;&#x2122;s impact or to invest in Southern Albertaâ&#x20AC;&#x2122;s youth, please call 403 781 2582 or visit jasouthalberta.org Are you an Achiever... share your story at: facebook.com/JAchievement

inspiring Futures • Cover

Inspiring Futures Junior Achievement of Southern Alberta Economic Futures Council – Leaders Unite to Support Youth and Economy By deRek sankey coVeR Photo cRedit: adaM PeaRiso – suReReeL | aLL otheR Photos couRtesy oF Jasa

ng .

l Back Row (L-R): Guy turcotte, alvin Libin, david a. Bissett, todd Poland, Mac Van Wielingen. Front Row (L-R): clayton Riddell, James W. davidson, Richard F. haskayne, Jack c. donald, Wayne henuset. Missing: n. Murray edwards, Ronald n. Mannix.

welve of Calgary’s most influential business and community leaders have united to support a small charity with big impact. Within the space of 10 months, David Bissett, Jim Davidson, Jack Donald, Murray Edwards, Richard Haskayne, Wayne Henuset, Alvin Libin, Ron Mannix, Todd Poland, Clay Riddell, Guy Turcotte and Mac Van Wielingen stepped up in support of Junior Achievement of Southern Alberta. Business in Calgary takes a closer look at this united group. www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 37

Inspiring Futures • Cover

Jim Davidson, chairman and chief executive of Calgarybased FirstEnergy Capital Corp.

Calgary business leader and philanthropist Jim Davidson, chairman and chief executive of Calgary-based FirstEnergy Capital Corp. knows the value of financial literacy, the importance of mentorship, and the momentum created by giving back to the community. Jim originally wanted to be a teacher when he started out in life. “Twenty-five years later, I realize my desire to teach has come to fruition in a different way,” says Davidson, “through mentoring others at work and through my involvement with organizations such as Junior Achievement of Southern Alberta.”

Junior Achievement programs focus on financial literacy, staying in school, work readiness and entrepreneurship and are delivered in more than 800 classrooms across southern Alberta each year. JA depends on 1,400 volunteers who provide programming, free of charge, to 23,000 Southern Alberta students annually. It has relied mostly on corporate donations in the past, along with some individual and community-based foundations. Only five per cent of its $2.1-million annual budget comes from any type of government organization. Jim’s involvement with Junior Achievement came at an important time for the rapidly growing organization that, having weathered the

recession, was concentrating on finding sustainable funding to provide resources to pursue existing and new opportunities to impact youth and the economy. “We stepped back and did a review of the impact JA was making and where our support was coming from,” says Scott Hillier, the president and chief executive of JASA. “The potential of JA is extraordinary and we realized how much more we could do if we had an increasingly diverse and sustainable resource base.” A Boston Consulting Group survey in 2011 confirmed JA’s significant impact on participants’ lives. “The survey findings were overwhelmingly positive,” Hillier says. “We knew that we needed to enhance and expand funding for JA programs so we

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Junior Achievement Economic Futures Council The Need: Junior Achievement of Southern Alberta’s Economic Futures Council will provide sustainable funding to improve three futures: youth; the economy; and the JA organization itself. It will help support: • Additional reach into youth programs (including high needs and aboriginal communities) • Technology enhancements to increase student engagement • Sustainability of rural program delivery throughout southern Alberta Background: JASA is a registered non-profit charity funded by corporate, private and community donations that facilitates delivery of a series of in and afterschool programs for youth in grades 5 to 12. JA programs are based on three pillars of personal growth: financial literacy; work readiness; and entrepreneurship. JA programs are facilitated by 1,400 volunteers who deliver programs to over 23,000 youth per year in 800 classrooms throughout southern Alberta on an annual budget of $2.1 million. The Boston Consulting Group conducted a ground-breaking survey in 2011 comparing JA Alumni and individuals who had never experienced JA, which revealed that: • Of those surveyed, 65 per cent indicated that JA had a signiﬁcant impact on them staying in school • About 14 per cent were more likely to pursue post-secondary education • One in four students were less likely to eventually be unemployed • Fifty per cent were more likely to start an entrepreneurial venture • A one dollar investment in JA results in a $45 return on investment to the Canadian economy SOURCE: JUNIOR ACHIEVEMENT / BOSTON CONSULTING GROUP

Scott Hillier, president and chief executive of JASA. 38 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

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“As a“As result a result of these of these rulesrules based based on days, on days, Canadian Canadian companies companies sending sending employees employees to the to U.S. the U.S. needneed to betoacutely be acutely aware aware of who of who doesdoes what, what, where where and and when when and and tracktrack it,” explains it,” explains Meadow. Meadow. Employee Employee income income tax tax

In general, In general, the Canada-U.S. the Canada-U.S. Income Income Tax Treaty Tax Treaty ensures ensures thatthat a Canadian a Canadian company company onlyonly becomes becomes subject subject to U.S. to U.S. federal federal tax iftax it has if it ahas “permanent a “permanent establishment” establishment” (PE)(PE) in the in U.S. the U.S. Typically, Typically, this this means means you you havehave an office an office or or fixedfixed placeplace of business of business in the in U.S. the U.S. or a or construction a construction site that site that lastslasts for more for more thanthan 12 months. 12 months. In that In that case,case, youryour U.S. U.S. business business profits profits will be willtaxed be taxed at the at the U.S. U.S. federal federal levellevel at a at rate a rate of 34ofpercent. 34 percent.

If your If your company company winds winds up with up with a PE,aCanadian PE, Canadian employees employees working working in the in U.S. the U.S. are likely are likely to become to become subject subject to U.S. to U.S. income income taxation. taxation. The The employer employer maymay havehave to withhold to withhold U.S. U.S. taxestaxes at source at source on the on portion the portion of the of employee’s the employee’s income income related related to the to U.S. the U.S. activities. activities. “In such “In such a case, a case, it may it may be worthwhile be worthwhile to seek to seek corresponding corresponding partial partial reliefrelief fromfrom Canadian Canadian withholding withholding at source at source in order in order to to avoid avoid bothboth Canadian Canadian and and U.S. U.S. withholding withholding on the on same the same employment employment income,” income,” But the But Treaty the Treaty alsoalso prescribes prescribes a PEawhen PE when usingusing an installation an installation or drilling or drilling rig torig to Meadow Meadow states. states. explore explore for, or for,exploit, or exploit, natural natural resources resources for more for more thanthan threethree months. months. ThisThis can can Finally, eveneven if it does if it does not appear not appear thatthat youryour company company has ahas PE,aconsider PE, consider filingfiling be an beissue an issue for oilfield for oilfield services services companies. companies. “Although “Although this this wording wording seems seems to to Finally, a protective federal federal “treaty-based “treaty-based tax return,” tax return,” which which causes causes the statute the statute of of apply apply clearly clearly to antoexploration an exploration and and production production company, company, it may it may be prudent be prudent to toa protective limitation to run to and run and protects protects valuable valuable potential potential deductions deductions in the in case the case thatthat consider consider its application its application to long-term to long-term contractors contractors associated associated withwith a rigasince rig since limitation IRS finds thatthat a PEadoes PE does in fact in fact exist.exist. the IRS the often IRS often takestakes expansive expansive interpretations,” interpretations,” sayssays James James Meadow, Meadow, a U.S. a U.S. Tax TaxIRS finds specialist specialist withwith MNP’s MNP’s International International Taxation Taxation Services. Services. You You maymay havehave a PEaif:PE if:

State State Income Income Tax Tax

Many Many U.S. U.S. states states do not do follow not follow the Canada-U.S. the Canada-U.S. Income Income Tax Treaty Tax Treaty and and havehave theirtheir ownown rules. rules. The The vastvast majority majority of states of states consider consider providing providing services services or owning or owning equipment equipment in the in state the state to create to create a taxable a taxable presence, presence, generally generally referred referred to asto“nexus” as “nexus” for state for state income income tax purposes. tax purposes. “It is“It commonplace is commonplace to not to have not have a PEafor PEfederal for federal purposes purposes • One or more employees spends too much time in the U.S. • One or more employees spends too much time in the U.S. because because of Treaty of Treaty protection protection while, while, at the at the samesame time,time, therethere is nexus is nexus in one in one or more or more • One employee spends 183 days or more in the U.S. over any 12-month • One employee spends 183 days or more in the U.S. over any 12-month states states because because services services are provided are provided period period (for (for this this purpose, purpose, daysdays in transit in transit and and daysdays off inoff the in U.S. the U.S. alsoalso within within those those states,” states,” sayssays Meadow. Meadow. count) count) and and the majority the majority of the of company’s the company’s business business income income is earned is earned in in the U.S. the U.S. In allIncases, all cases, a comprehensive a comprehensive cross-border cross-border approach approach to taxation to taxation is critical is critical to ensure to ensure • One or more employees provide services in the U.S. for a total of 183 • One or more employees provide services in the U.S. for a total of 183 thatthat bothboth Canadian Canadian and and international international tax tax daysdays or more or more in any in any 12-month 12-month period. period. The The services services provided provided are for are for obligations obligations are factored are factored in. in. a specific a specific project project or a or connected a connected one one for customers for customers whowho are either are either U.S. U.S. residents residents or taxpayers. or taxpayers. (For (For this this purpose, purpose, onlyonly workwork daysdays count count but the but the For more For more information information on this on topic this topic or or JamesJames Meadow, Meadow, CA, CPA CA,(NC), CPA (NC), LL.M.,LL.M., MBA MBA daysdays don’tdon’t havehave to betoconsecutive, be consecutive, and and if more if more thanthan one one employee employee other other related related international international tax issues, tax issues, U.S. Tax U.S.Specialist Tax Specialist International International Taxation Taxation Services Services works works on aon particular a particular day,day, thatthat day day counts counts as only as only one one day.)day.) contact contact James James Meadow Meadow at 403.536.5548 at 403.536.5548 MNP’sMNP’s 403.536.5548 403.536.5548 or your or your locallocal MNPMNP Advisor. Advisor. james.meadow@mnp.ca james.meadow@mnp.ca • An agent or employee present in the U.S. acting on behalf of the • An agent or employee present in the U.S. acting on behalf of the Canadian Canadian company company concludes concludes contracts contracts in the in U.S. the U.S. on behalf on behalf of the of the Canadian Canadian company. company.

Inspiring Futures • Cover

approached some of our past alumni, board members, Calgary Business Hall of Fame laureates and other prominent business people affiliated with JA with an idea to help found the JASA Economic Futures Council (EFC) to ensure stable, sustainable funding.” Resoundingly, people like Jim Davidson, Richard Haskayne, Alvin Libin, Murray Edwards, and others stepped forward, and within the space of 10 months JASA had 12 Economic Futures Council Founders who each put his name and money behind the Council. Each Founder has pledged a $100,000 donation to demonstrate his commitment to the cause. The Founders hope that their commitment will draw attention to the impact JA has on youth and the economy and inspire others to support the cause by joining the Council. The Council has levels of participation starting at $5,000. “The Founders didn’t want to just give money to JA, they wanted to inspire others to give to JA at an amount that is achievable for them,” says Hillier. “They know that it’s important to create the next generation of philanthropists in the city – a new guard coming forth in support of the community.” In the words of EFC Founder Jack Donald, “You want to give back. You can’t go through life with a catcher’s mitt on

Wayne Henuset, owner of Willow Park Resources Ltd. and former president and chief executive of Energy Alberta Corp.

both hands. You have to be able to throw some back.” The recession at the end of 2008 took its toll on most non-profit organizations and although JA was no exception, it carried on its efforts. People like Davidson see value in JA in part because the organization examines many of the same things that caused the financial crisis. Davidson thinks that experience has many lessons for the next generation of business leaders in schools across the country. It’s tied directly to JA’s vision in many ways. “The (recession) was a result of individual requirements taking precedent over individual responsibility,” he says. “Junior Achievement programs teach and support individual responsibility and help youth understand the effectiveness and efficiency of financial markets, ethical business management, government and personal debt levels.” Davidson hopes JA’s programs will help produce leaders who have the foresight, ethics and integrity to avoid future such crises. He had a few strong mentors in his school years who taught him more than a few lessons of his own. Davidson calls JA “an incubator for learning” and sees a direct link to the health of the economy as a result of their efforts. It’s one of the reasons he joined JASA’s

Clay Riddell, founder of Paramount Resources Ltd.

40 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

Economic Futures Council. As the father of three sons, prominent Calgary businessman Wayne Henuset had the advantage of teaching them about financial literacy, how to run a good business and why money has value. He feels lucky to have had that privilege. He also knows many kids don’t get that benefit. “It’s quite amazing,” says Henuset, the owner of Willow Park Resources Ltd. and former president and chief executive of Energy Alberta Corp. “People don’t get enough of that financial background on how to run a business. So many people come out of high school and they don’t know anything about how to manage money.” He took an interest in Junior Achievement (JA) about two and a half years ago because he wanted to find out more about the organization and what it was doing to promote financial literacy. “That is the reason that I became one of the Economic Futures Council Founders; because I want as many people to get this program as possible.” Clay Riddell is another ardent supporter, for reasons of his own. Like many other Founders, he’s a Laureate of the Calgary Business Hall of Fame, and when asked, stepped up to help and become a Founder of the organization’s EFC. “Their goals are really high,” Riddell says. “We’ve got a lot of problems with business and government … and they’re not going to solve all those problems, but they’re going to be a part of the solution.” Riddell, the well-known stalwart power broker of Calgary’s oilpatch and founder of Paramount Resources Ltd., explains why he joined EFC. “It looked to me like they were looking for sustainability for the organization. They do good things so I and others stepped up to help them get there,” he says. It’s not like their efforts aren’t paying off. The same Boston Consulting Group survey that revealed just how much impact JA’s programs had on individual careers and the broader economy concluded that every one dollar invested in JA has a return on investment to the economy of $45.

inspiring Futures • Cover

Henuset sees value in those numbers. He has already helped create the Centre for Entrepreneurship and Innovation at the University of Calgary’s Haskayne School of Business, with a group of like-minded entrepreneurs. Programming via the Centre will teach students about the ins and outs of business – no matter what the student’s background. “I wanted to make sure we could use some of what JA does and I could pass along some of what we’re doing at the university to JA,” Henuset says. “I believe so much in what JA is doing (and) they needed the funding to carry on and do the best they can.”

one quarter of alberta high schools students don’t graduate high school. That’s unacceptable to Hillier and the founders of JASA’s Economic Futures Council. Not to mention the 1,400 volunteers on the ground in the organization’s nine regions who go to schools to deliver JASA’s many programs every week. Providing funding to Junior Achievement of Southern Alberta by joining the EFC was an easy decision for Todd Poland, vice-president, CIBC Wood Gundy who says, “I’ve been a volunteer with Junior Achievement for about six years and when I had the ability to make a larger financial commitment, it was a nobrainer. The impact on the students and economy is so significant.” Alberta prides itself on its entre-

preneurial spirit but we are entering a time when the family business enterprise is at risk of fading away. The job creation machine of the economy – small and medium enterprises – is in jeopardy. “We live in a small business economy and yet only 30 per cent of family businesses survive a generational transition,” explains Hillier. “Who is going to take on those businesses if it’s not the owner’s children? It behooves us to invest in the financial literacy of these youth to expose them to business (and) allow them to explore what it’s like to build and run a business.” David Bissett echo’s Hillier’s sentiment, “If we can in some way, communicate the excitement of business, the virtues of business, that would be a great thing.” One of JASA’s programs aims to do exactly that. It’s an educational and fun program that pits student teams against each other in what is known commonly as the “Company Program.” It’s perhaps the most well-known JA program. Students experience the full lifecycle of a business where they develop their own product, including a comprehensive business plan, sourcing and marketing their product – effectively winding a company up and down while working with real money. Many of the senior executives who judge the final competition are either founders of the EFC or very close to those involved.

JASA is increasingly extending its reach into rural and aboriginal communities and what are deemed by some to be “high risk schools.” These are important moves in their vision to reduce high school dropout rates. Hillier believes the additional funding is a unique way to sustain JASA’s current programs and to grow the organization in new ways. Technology, including social and mobile media and online platforms, will undoubtedly lead the way into the futures of the students now in school. “There are notable business executives and high-profile individuals who invest in our community and who recognize that through their support they’re not just building a better community; they’re building a better economy,” Hillier says. EFC Founder Mac Van Wielingen adds, “We need more leaders to come forward and to be prepared to be models for our youth.” Henuset believes the types of programs JASA supports should be part of every child’s education growing up. He sees it as one part of a broader education about the world, about career options, about possibilities. “Show people and give them the understanding about financial literacy so they don’t just break away and do their own thing,” Henuset says. “The more they understand it, it’s not quite so scary so they’ll actually go and pursue it.” “JASA provides an opportunity for youth from all backgrounds to understand the basics of commerce, how money is a tool and the importance of financial and resource management,” says Davidson. When asked about joining the EFC Davidson says he was motivated to “step forward, give back and assist our youth in developing into the kind of people that we would want them to be in this new world.” For more information about Junior Achievement of Southern Alberta, including how you can join the Economic Futures Council please go to www.jasouthalberta.org or contact chamelin@jasouthalberta.org or 403781-2582. BiC

www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 41

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calgary competes for high-Proﬁle events • Event Planning & Catering

MondoSpider at National Music Centre (a surprise guest at their Stampede BBQ). (Photo courtesy of Beakerhead.)

calgary competes for

high-Proﬁle events city venues go head to head to attract large-scale events in 2013 By deRek sankey

t’s not every day you see giant mechanical sculptures several storeys tall moving through the downtown core or massive LED-illuminated art displays on the sides of office buildings, yet that’s exactly what will be happening later this year. It will be part of a “movement” called Beakerhead, taking place this September, that’s described as a kind of festival or celebration that mixes Calgary’s engineering expertise with the arts and cultural communities. It will include an international engineering competition with 16 teams from around the world during a two-day innovation challenge where stu-

dents will create these behemoth, movable sculptures and other devices to showcase their expertise. “We’ve been cooking up this behemoth of a movement for a couple years now,” explains Jasmine Palardy, the program manager for the Beakerhead Society, which is organizing all of the Beakerhead events, including speakers, teams of mobile “gorilla” film producers who will randomly display images and artwork around the core and several engineering competitions. “Calgary is an engineering city (and) we can celebrate that … but we’re so much more,” she says. www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 43

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calgary competes for high-Proﬁle events • Event Planning & Catering

Calgary increasingly finds itself in the spotlight on the event planning front, vying to attract and promote all kinds of large-scale events, from pro and amateur sports competitions to major conventions to more offbeat productions like Beakerhead.

Daisy (two storey tall sloar powered tricycle). (Photo courtesy of Beakerhead.)

Palardy returned to Calgary recently after working for a stint in San Francisco’s technology industry, determined to harness the power of the city’s engineering and arts communities in a unique culmination of events as part of the festival. Calgary increasingly finds itself in the spotlight on the event planning front, vying to attract and promote all kinds of large-scale events, from pro and amateur sports competitions to major conventions to more offbeat productions like Beakerhead. It’s got a fundraising target of $16 million over three years, 46 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

with the event to become an annual festival starting in 2013. “It’s a large target, but in order to pull of a really world’s fairscale event, we’ve got to have big goals,” says Palardy. Jerry Joynt knows exactly what Calgary can do when it comes to event planning. He was an organizer with the 1988 Winter Olympics and takes pride in seeing the city as one of the only cities that can still boast that all of its sporting venues have been maintained, refurbished and are constantly being used to host events each year that bring millions of dollars in spending and tourism into the city.

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calgary competes for high-Proﬁle events • Event Planning & Catering

This year will see an array of festivals, sporting events and high-profile functions held in Calgary…

Mayor Nenshi rides MondoSpider on Stephen Avenue. (Photo courtesy of Beakerhead.)

He has been working behind the scenes for the past several months to get people on board to celebrate the 25th anniversary kick-off of the ’88 Games on Feb. 13, which will include an event at Olympic Plaza and other places around the Calgary region this month at such venues as the Canmore Nordic Centre, Nakiska, Calgary Stampede and others. The City of Calgary has officially proclaimed Feb. 13 as Olympic Legacy Day. “The success of the (Olympics) augers tremendously well

for the volunteer spirit in Calgary,” says Joynt. “It also points out that we do things in a business-like way. My interest (is) using the 25th anniversary on February 13 as kind of a raison d’etre to raise awareness that Calgary is very unique among host cities … because we have legacies.” This year will see an array of festivals, sporting events and high-profile functions held in Calgary, despite the lack of a major event like the Grey Cup, Memorial Cup or Brier Cup – all being held in competing cities such as Saskatoon and Edmonton. There Continued on page 52…

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calgary competes for high-Proﬁle events • Event Planning & Catering

In the past few years, Calgary has hosted elite events in luge, bobsleigh, skeleton and skiing competitions at Canada Olympic Park (COP).

Audrey Robichaud at last year’s World Cup moguls. (Photo by Mike Ridewood, Canadian Freestyle Ski Association.)

…continued from page 48

are, however, numerous other junior-level, mid-level, seniorlevel and professional events being held at many venues. In the past few years, Calgary has hosted elite events in luge, bobsleigh, skeleton and skiing competitions at Canada Olympic Park (COP). It’s vital to the city’s event planning and catering industries, the tourism and hospitality sector, not to mention the broader spinoff benefits through raising its profile on the global stage in attracting future events, according to Dale Oviatt, director of communications for WinSport at COP.

“There are so many of these international events,” says Oviatt. “Not only do they attract the top athletes from around the world – coaches and other team members – but there are also a lot of fans that travel the world watching these events.” The television coverage for last year’s World Cup Bobsleigh event, for example, garnered 20 million viewers in Germany alone, he adds. “They start seeing us across a world platform and they want to be a part of it,” says Oviatt.

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calgary competes for high-Proﬁle events • Event Planning & Catering

“There are so many of these international events,” says [Dale] Oviatt. “Not only do they attract the top athletes from around the world – coaches and other team members – but there are also a lot of fans that travel the world watching these events.” The television coverage for last year’s World Cup Bobsleigh event, for example, garnered 20 million viewers in Germany alone, he adds.

The 2010 bobsleigh World Cup.

Public bobsled rides. (Photos, this page, courtesy of WinSport.)

Palardy, meanwhile, is focused on pulling off what promises to be an intriguing and awesome engineering display of creativity with Beakerhead in September. “It’s 100 per cent unique and 100 per cent Calgary built,” she says. So far, partners on board include Suncor Energy Inc., the Epcor Centre for the Performing Arts, Mount Royal University, the University of Calgary and the new Telus Spark science centre. “We typically treat arts and engineering as oil and water, but in fact they’re actually two of the same,” Palardy insists. “If we take a look at the world around us – the economy, the

future of business, what to do with the energy sector – we need really creative thinkers.” Calgary’s event planning and catering sector has developed a strong reputation for its ability to move nimbly to host events on all scales. Calgary’s oilpatch has been more prone to spending a bit more on functions given the relatively strong health of the province’s economy, relative to other parts of Canada, and it showed during the Christmas holiday party season at the end of last year. Many venues reported healthier than anticipated bookings and requests over that period. As the industry gears up www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 53

calgary competes for high-Proﬁle events • Event Planning & Catering

Titanoboa “slithered” out of the Glenmore Resevoir - landing at Heritage Park. (Photo courtesy of Beakerhead.)

Some

key events

happening in Calgary in 2013: • Alberta 55 Plus Winter Games (Feb. 13-16 at Canada Olympic Park and Calgary Winter Club) • Junior Luge World Cup (Jan. 24-25) • Essent ISU World Cup Speed Skating (Jan. 19-20) • Skate Canada Synchronized Skating Championship (Feb. 21-23)

Her goal is to arm people with the knowledge, skills and experiences to tap into the “creative economy” as Calgary continues to evolve and mature. “It’s a movement everyone can participate in,” says Palardy

• Nor-Am Cup [Alpine] – (March 12-17) • Alberta Champions Cup (April 26-28) • Tour of Alberta Pro Cycling Festival (Sept. 3-8) • Spruce Meadows National (June 5-9) • Spruce Meadows North American (July 3-7) • Calgary Stampede (July 5-14) • Spruce Meadows Masters (Sept. 4-8) • Beakerhead (Sept. 11-15) • Calgary International Film Festival (Sept. 19-29) • Western Canadian Music Awards (Oct. 3-6) • Many other local festivals, exhibits and events will be taking place through the city in 2013. Check specific venues or websites for details. soUrce: WiNsPorT / ToUrisM calgary

54 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

for 2013, there’s every reason to think Calgary will continue to up its game when it comes to showing off its ability to put together an awesome show, the most high-end events and attract top-calibre events to the city. Palardy is counting on it. As she presses ahead with her group’s preparations for Beakerhead, which is the brainchild of the Discovery Channel’s Ian Ingram and Mary Anne Moser, the current vice-president of strategic communications for Cybera Inc., Palardy compares the event to “Toronto’s Luminato meets the World Science Festival meets Maker Faire and even maybe a dose of Burning Man,” she half jokes. Her goal is to arm people with the knowledge, skills and experiences to tap into the “creative economy” as Calgary continues to evolve and mature. “It’s a movement everyone can participate in,” says Palardy. BiC

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Mbas deliver What executives Want • Education MBA

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What Executives Want recruiters see value in targeted Mba education, as long as it’s combined with lofty career goals and experience By shannon cLiVe

avannah Koch felt like her career had reached a standstill. Or at least she felt her career in employee benefits consulting had very limited room for upward career growth. She stepped back and took some time to figure out her next move. “My own career stagnated a little bit and I wasn’t sure entirely what I wanted to do,” says the graduate of a master’s degree in history from Toronto, who has spent the last few years working in Calgary. “(My education) was very different from the business world and living and working in Calgary,” she explains. “I didn’t really have any business background, so I was pretty limited in what I was able to do and where I was able to go in Calgary.”

Koch took the plunge into a full-time MBA program at the Haskayne School of Business at the University of Calgary. In short order, she became president of the MBA Students’ Society – a position she currently holds – and she’s now entering her final semester at the university. “It’s a very different experience than what you go through as an undergraduate student,” Koch says. Things started to develop fast as she delved into business and strategy sessions with her cohort, which consisted of some people with similar backgrounds, but all of whom already had several years of experience in industry behind them. It changed her life. Without even having graduated, Koch has already been offered a position (which she accepted) www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 57

Mbas deliver What executives Want • Education MBA

Koch, like many young professionals with some experience but perhaps lacking career direction or the ability to progress to the level they desire, are increasingly turning to MBA degrees to take them in a new direction. with a management consulting firm upon graduation. “That (position) came to me quickly as soon as I started (my MBA),” she says. “All of a sudden it opens up new doors. When you start to learn more about what people have done when they’ve left the program, it really opens up an entirely new world.” Koch, like many young professionals with some experi-

ence, but perhaps lacking career direction or the ability to progress to the level they desire, are increasingly turning to MBA degrees to take them in a new direction. The value of these degrees has been debated for years, yet company executives, recruiters and human resource departments continue to view them as one effective way to develop talent in-house or to hire it on from outside once students graduate.

Facts about Master of Business Administration (MBA) degrees: • In Calgary and throughout Alberta, there are several options for MBA education at private and public post-secondary institutions, with the cost varying as much as the format and length of programs available. • There are full-time, part-time (weekend or evening), online and executive MBA (EMBA) degree options that typically range from 13 months to more than three years. • About a dozen universities in Canada offer EMBA programs, with costs ranging from about $10,000 to more than $100,000 across the country. • In Alberta, Athabasca University was one of the ﬁrst institutions to introduce and pioneer online education delivery for MBA students, which are now widely offered at most institutions in Canada and particularly cater to people living in remote or rural locations. • Different MBAs are available with specializations unique to certain industries, such as energy, health care and technology. • Visit the Association of Universities and Colleges of Canada (AUCC) for more information about their member institutions at www.aucc.ca.

58 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

Mbas deliver What executives Want • Education MBA

“The MBA itself is one thing, but the main thing is what they learn. By learning the language of those (business) areas and understanding from a managerial perspective what accounting does (for the organization), they feel like they can contribute in a more meaningful way. They’re adding value to themselves.” ~ Vern Jones coming here focused on hiring people with MBAs.” “Probably in Canada it’s less of a prerequisite than it One manager of public affairs for a Calgary energy might be in the U.S.,” says Vern Jones, associate dean of the company describes an MBA as “nice-to-have,” but not necMBA program at Haskayne, “but in our experience here it’s essarily a requirement for the job. “The MBA is not a free really gaining a lot of traction.” pass,” she says. That statement echoes a common sentiment Before Charlie Fischer, the former president and chief in the oil and gas industry and other sectors, executive of Nexen Inc., left the company, which is that it’s not so much about the creJones asked him to explain to current MBA dential itself, but rather what the individual students why he did an MBA at the U of has learned and demonstrated. C. Fischer explained that while he had the Getting an MBA doesn’t give graduates a technical background, he felt he needed free ticket to the top of the corporate ladder. more knowledge on the financial and “The MBA itself is one thing, but the main accounting side, Jones recalls. thing is what they learn,” says Jones. “By “They have deep technical knowledge, but learning the language of those (business) they feel they need to know something more areas and understanding from a managerial about the business side,” Jones says. The perspective what accounting does (for the focus appears to be shifting in MBA grads’ organization), they feel like they can confavour. “I think it makes a difference. Gentribute in a more meaningful way. They’re erally, the oil and gas industry hasn’t been adding value to themselves.” that oriented (toward MBA grads) – you Leadership, team-building, interpersonal know, you’ve got to be a professional engiVern Jones, associate dean of the MBA program at Haskayne. skills and strategic skills, along with critical neer – but increasingly we have employers 60 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

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“Get involved in whatever you can. You have no idea what kind of an impact it will have on your career, your school life – everything. But you have to actually go out there and do it.” ~ Savannah Koch

thinking, are all areas of increasing focus in many MBA programs in order to get students to look beyond just the technical, business, financial and accounting side of the degree. “We’re trying to round out the skill set to emphasize that more now,” Jones says. Students often learn as much from their peers as they do from the professors. In some cases, such as EMBA programs, the students may even be more knowledgeable than the profs. “(Students) want to plug into that network and rub shoulders with people of the same level of experience or achievement,” says Jones. Half of what you pay for with an MBA is in the value of networking, adds Koch. The people she knows within her cohort who have got the most of their education are stu62 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

dents who have sought out extracurricular opportunities, built up their personal and professional networks and who have pursued every available resource within the program. “The people I know who have actually taken the time to try and get more out of the degree rather than just the initials behind your name – it does show through really quickly,” says Koch. Jones is currently seeing a larger number of younger students who already have strong degrees pursuing an MBA education. “They’re trying to transform themselves,” he says. Very often, however, people pursuing MBAs are comprised of entrepreneurs who have built small- or medium-sized companies and “just feel they need to go to another level,” he says.

Mbas deliver What executives Want • Education MBA

EDUCATION THAT’S BEEN BUILT TO MEET DEMAND.

THIS CHANGES

EVERYTHING. Alberta is thriving, fed by a steady supply of skilled SAIT Polytechnic grads that know how to hit the ground running. Programs taught by instructors with real world experience and designed through industry collaboration have the potential to deliver thousands of additional skilled trades people, technicians, technologists and degree graduates over the next decade. SAIT offers bright futures in Energy, Business, Information Technology, Media, Hospitality, Health and Public Safety, Manufacturing and Automation, Transportation and Construction. Our commitment to transforming student lives is what makes them successful. Our reputation as a provider of training solutions to organizations across Canada and around the world is what makes us a leading Polytechnic.

The U of C’s Haskayne MBA program is increasing its enrolment numbers while boosting its presence at its downtown campus. They used to do one intake a year but have increased that to two – one in fall and one in winter – with about 60 students coming into the current intake compared to the average of 45 to 50 students. Each individual tends to pursue an MBA for different reasons, with different goals in mind and each will ultimately get out of it what they put into it. “Get involved in whatever you can,” Koch says. “You have no idea what kind of an impact it will have on your career, your school life – everything. But you have to actually go out there and do it.” BiC

Welcome to SAIT Polytechnic. SAIT.CA

www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 63

leading the Market • Real Estate

Leading the Market

as residential real estate prices continue to fall nationwide, calgary’s market remains strong and experts anticipate the trend will go on By heatheR RaMsay | aLL Photos couRtesy oF ciR ReaLty

s we move through the first quarter of 2013, many continue to speculate about the local residential real estate market. While other major cities such as Vancouver and Toronto continue to experience sharp pricing declines and economic challenges due to shifts in industry, Calgary has been steadfast in holding its course. The good news is that experts anticipate the trend is likely to continue provincewide. In December of last year, the Calgary Real Estate Board indicated that while inventories continued to fall, sales growth eased and allowed for enhanced market stabilization. With nearly eight consecutive months of growth in the double digits in 2012, November marked a 15 per cent increase on a year-to-date basis, and that month alone bolstered an eight per cent increase in pricing. The benchmark price of a single-family home in November 2012 was $433,600, apartment condominium $248,000 and townhome $282,800. “Calgary’s market has been slower to recover than other major cities, and we are seeing strong indications that the market is at a more normal and therefore sustainable level. Pricing has gradually moved up as a direct result of strong employment growth and interprovincial as well as international migration. A five per cent increase in the employment rate, census growth of over 20,000, the overall level of affordability of our city and continued low interest rates in 2012 were very encouraging and directly contributed to the market last year,” says Ann-Marie Lurie, chief economist with the Calgary Real Estate Board. According to Lurie, Calgary will continue to see increases in pricing, albeit at a more moderate rate. “The coming year will bring estimated pricing increases of two per cent city wide. Employment growth is anticipated to soften slightly and although the energy sector and local economy are strong, we will see demand pressures easing on housing. Calgary continues to be a very affordable city and we still remain only marginally off the peak prices of 2007.” This she says is in light of ever-expanding concerns about household debt and other markets, and is a strong indication of the resilience of our city. 64 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

leading the Market • Real Estate

“We are seeing great movement in all sectors of the market and in all major centres throughout Alberta. High affordability and low interest rates, and the overall health of the provincial economy, are reﬂective in housing prices and increases.” ~ Lindsey Smith, professional development manager with CIR Realty Lindsey Smith, professional development manager with CIR Realty.

With the lowest national unemployment rate in Canada, natural resources holding strong, increased consumer confidence and significant foreign investment, there continues to be opportunity in Calgary and the

province at large. Not to mention our neighbouring province to the east. According to Statistics Canada, retail spending is up 8.1 per cent in Alberta and 9.3 per cent in Saskatchewan, and both provinces are expected to

grow in GDP as well, given the ongoing demands within the energy and mining sectors and increasing opportunities in more diversified markets. Lindsey Smith, professional development manager with CIR Realty,

www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 65

leading the Market • Real Estate

explains that although the federal changes to the mortgage rules will continue to make it difficult for some consumers to qualify for While Calgary continues to maintain mortgages and that there is no immunity to global insecurities, market growth trends its momentum, housing options remain positive province wide. “We are seeing remain available and affordable within great movement in all sectors of the market and in all major centres throughout Alberta. the city and surrounding areas. Strong High affordability and low interest rates, and the overall health of the provincial economy, employment growth, net migration and are reflective in housing prices and increases. What we are seeing in other centres is reflecchanges in inventory continue to tive of their current economy and where they are in the cycle of recovery. Calgary is holdsupport a healthy market… ing strong,” says Smith. While Albertans typically earn more and pay less for quality homes than they would in other major cities, more and more are investup 4.9 per cent. The average price of a single-family home ing beyond their primary residence and purchasing rental in Edmonton in November was $382,923. As with other citproperties. Smith explains that the current market paired ies, we are seeing a two-month delay on the effects of the with low vacancy rates is ideal for investment in rental mortgage rule changes, and an increase in the ‘move down’ properties. “More people are investing in additional propermarket where couples are downsizing yet buying greater ties for rental. The increase in activity further bolsters the luxury,” Hall explains. market and pushes up values and rental rates in local mar“We are seeing more and more families moving to Edmonkets. Again, solid indications of an affordable, economically ton and surrounding communities specifically for work. We stable city with opportunity as well as longer-term financial have the shortest commute times in North America and have benefit.” become a true bedroom community for other major industry Activity has been stable in our capital as well. According and business centres such as Fort McMurray and Redwater. to Jon Hall, marketing manager with the Realtors AssociaWe released our Annual Forecast on January 9, 2013, and tion of Edmonton, the city has been experiencing similar early indications are that the year is expected to continue to trends to that of Calgary, yet at slightly lower rates and be positive. We have reasonable inventory and with the new increases. “We continue to experience a stable and balarena and proposed condominium and commercial developanced market in Edmonton. Pricing fluctuations have been ment, there is increased optimism for the year.” reflective of inventory supply, and year-to-date pricing is Keeping in mind that 2006 and 2007 saw the peak in the 66 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

leading the Market • Real Estate

real estate market in Calgary, experts are consistent in defining the current market as healthy and stable. Although there continues to be global insecurities and concerns such as the ongoing volatility in the Middle East, the European crisis and activities in the United States, they anticipate the coming year to continue to remain strong. “There will likely be pent-up demand in the first quarter, and the first half of 2013 will cause a slightly more active market. If inventory increases as anticipated and pricing drops slightly, it will be interesting to see where the market shifts,” says Smith. While foreign investment continues to be injected into the province, there will very likely be additional shifts and adjustments to the markets. “The local market certainly isn’t immune to projects such as the potential approval of the

Keystone XL expansion into the United States, and foreign investment in companies such as Nexen Inc. and Progress Energy Resources Corp. The first half of the year will be telling of what the potential and longer-term impacts of such ventures will be. Calgary continues to be a solid market and we do not anticipate a sudden or major change. However, we can’t ignore the possible and inherent repercussions that could take place as a result of the potential restructuring of the natural gas market and a decline in commodity pricing,” states Lurie. While Calgary continues to maintain its momentum, housing options remain available and affordable within the city and surrounding areas. Strong employment growth, net migration and changes in inventory continue to support a healthy market, and are starting to spur new homebuilders once again. “Even in a strong and stable market, buyers must be proactive and conduct due diligence. Working with a reputable agent is critical, and the decision to purchase should be based upon equity payout and not on appreciation speculation,” says Smith. “Longer-term planning will mitigate unnecessary stress and risk.” BiC

Chairman’s Club

www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 67

Men Navigate Fashion World • Dress for Success

Men Navigate Fashion World Dominated by Women Business casual or formal, lots of options and emerging trends are catching on among both sexes By Michael Doucette

t’s no secret that women typically spend more money, time and attention on fashion trends in the business world. Fashion-impaired men need not fear, though. The growing number of large chains and well-established, smaller and independent stores are catering to a male crowd that is increasingly placing more focus on their business attire – whether it’s business casual or formal wear. In the past, Calgarians in general have leaned toward being fashion followers, wearing conservative fashions that haven’t been all that creative, according to local stylists and fashion experts. No more. In a city that is increasingly attracting international labels mixed with local designers, men are paying more attention to the wave of formal wear options combined with a higher level of sophistication in business casual attire. “Calgary is currently seeing a wider mix of clothing options that combine international flavours with local style, but the common theme is going upscale in business attire,” says Michelle Middleton, a Vancouver-based stylist and image consultant who spends a lot of time in Calgary and on the West Coast tracking the latest fashion trends. “Calgarians aren’t afraid to get more creative in fashion – men and women – so it’s nice to see business people embracing more fashion-forward styles unique to each individual.” That’s the key. Style and fashion often get confused, she says, but ultimately fashion refers to the actual designs coming out from designers while style is tailored to each person’s fit, personality and creativity.

“Calgarians aren’t afraid to get more creative in fashion – men and women – so it’s nice to see business people embracing more fashionforward styles unique to each individual.” (Photos, these two pages, courtesy of Noah Fallis on behalf of Supreme Men’s Wear)

68 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

~ Michelle Middleton

Men Navigate Fashion World • Dress for Success

In a city that is increasingly attracting international labels mixed with local designers, men are paying more attention to the wave of formal wear options combined with a higher level of sophistication in business casual attire.

For men, that’s not always an easy mix to balance. Darren Biedermann at Supreme Men’s Wear in Calgary says that while business casual has remained a constant over the last 20 years, it has evolved drastically and the current generation entering the workforce is looking to stand out from the crowd of older, more conservatively-dressed guard. “The younger generation coming along is dressing up more than the generation in the last 20-year window of this casualness,” says Biedermann. “If you go and get all dressed up, you’re going to have a good day. People are starting to understand the intangible in it.” When upscale clothier Nordstrom opens in Chinook Centre this year, savvy business people of both sexes will have yet another international chain to select from. It joins the ranks of more established names in Calgary, such as Harry Rosen and Holt Renfrew – famous for its ability to keep on top of the latest trends – and others have been rumoured to be considering an entry in this market, though nothing is confirmed. What is clear is that women usually outperform men when it comes to fashion. “Women tend to have more options to mix and match and … they’re just innately better at it,” jokes Middleton. “Still, there are plenty of fashion-conscious men out there pushing the limits and leading the trends, which is good to see.” From the downtown bars on weekends to the office boardroom, Biedermann has noticed that trend, too. Right down to the shoes that “finish off the outfit,” he says the clothing people wear impacts all aspects of their lives. “Good clothes open a lot of doors,” he says. “If you want to fly with the eagles, don’t dress like the turkeys.” As we head into spring fashions, expect a more formal look with trimmer and fitted suits for men that incorporate vests, or waistcoats, that can be mixed and matched with

other suits or dressed down with a trendy pair of slim jeans for a more casual look. “The clothing is trimmer, no doubt, which accentuates a person who is keeping themselves fit,” says Biedermann. Fit is essential. No matter what your body type, work with a professional at your favourite store to find a personal style that matches and flatters, which applies to both men and women. Get rid of the clothes hanging in your closet that you never wear and redefine comfort by thinking beyond loose-fit clothes. Experiment with items you don’t think you’d normally consider. You might be surprised what looks good on you. www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 69

Men Navigate Fashion World • Dress for Success

Expect richer colours this spring as retailers offer up the latest round of fashions.

Marc Cain Sports - Snake Print Top, Ribbed Tank, Straight Pant; accessories, Franco Ferrari - Fish Print Scarf, Brave - Gawan Patent Leather Belt

Karyn Chopik - Pony Bracelet with Silver Plate; Clio - 8mm Ball Bracelet

Michael Kors - Silk Scarf Top and Dress; accessories, Karyn Chopik - “Uber” Necklace (Photos, this page, courtesy of Blu’s Womens Wear)

What has surprised [Heidt] is the trend in women’s fashion toward a more casual inﬂux of fashions. However, the formal attire isn’t going away by any stretch. Expect richer colours this spring as retailers offer up the latest round of fashions. Rebecca Heidt, the store manager at Blu’s Womens Wear in Bankers Hall, says the über-popular Canada goose jacket – the Kensington, in particular – is now making way for more colourful women’s spring fashions. She recently coordinated Blu’s buying plan for the season and has noticed labels such as Taifun, with their bold pinks and reds mixed with strong black and white patterns. Fashion labels Sarah Pacini, Lida Baday, Marie Saint Pierre and Annette Gortz are all pushing “edgy cuts and designs” this spring. “More colour from Michael Kors and Hugo Boss 70 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

and very bright colours in denim out of Germany,” says Heidt. “As for accessories, the strong feel of the leather cuffs from Karyn Chopik are trending hard from the East Coast, along with anything that has chain-link hardware and rhinestones,” says Heidt. “We all like to feel like Debbie Harry every once in a while,” she adds, referring to the American lead singer of punk rock band Blondie turned actress. What has surprised her is the trend in women’s fashion toward a more casual influx of fashions. However, the formal attire isn’t going away by any stretch. “I don’t see that there’s going to be any swing away from not wanting business attire anymore,” says Heidt.

Downtown Calgary 401 4th Avenue Southwest SupremeMensWear.com

Men Navigate Fashion World • Dress for Success

“Find someone you can work with professionally to develop your wardrobe. The sands are shifting and I love what’s happening. The younger generation is really understanding quality and how it affects everything in your life.” ~ Darren Biedermann, Supreme Men’s Wear

Sportcoat: Stones, Sweater: Pelo, T-shirt: PYA, Pants: Hiltl (Photos, this page, courtesy of Noah Fallis on behalf of Supreme Men’s Wear.)

Drawing on the minimalist look that focuses on slim silhouettes with defined lines from last fall, more luxurious textures will hit stores this spring with a mixture of materials. Men can expect softer looks accentuated by a splash of rich colours, such as a bold tie and lighter, fitted shirts matched with suits in charcoal, for example. More flexibility in fashion is a common emerging trend for men and women. Biedermann says Supreme Men’s Wear, which offers its own line of labels and designs unique to the independent retailer that has been a fashion staple in Calgary for 65 years, emphasizes developing a person’s style instead of just selling them one suit. 72 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

Sportcoat: Stones, Shirt: Supreme, Pants: Hiltl, Scarf: Pelo

“Find someone you can work with professionally to develop your wardrobe,” Biedermann says. “The sands are shifting and I love what’s happening. The younger generation is really understanding quality and how it affects everything in your life.” While it doesn’t have to break the bank to develop your own style, making a few key investments into flexible clothing that can be mixed and matched will go a long way to developing a crisp look that helps you stand out – in a good way. “(Consumers) are getting more inventive in taking more chances,” says Biedermann. “We always go to great lengths to be different.” BiC

a Taxing Time for calgary consultants • Tax Planning

a taxing time for calgary consultants the canada Revenue agency is targeting incorporated professionals with potentially drastic consequences By deRek sankey

gather all your earnings documents together from your past magine this situation: you’ve spent years working in years working as a consultant. Calgary’s oil and gas sector and you’re an experienced “This is horrific,” says Dale Leicht, president of Calgaryengineer. Then you realized that it would be more tax based First Merchant’s Capital Inc., a private investment efficient – you’d pay less tax – if you incorporated as a banking company that works with a group of tax lawyers to personal services business (PSB) and worked as a consultant reduce or eliminate proposed changes to Canada’s Income for the same employer you’d worked for over several years. Tax Act that could have profound conseYou have a wife and two or three kids quences for these unaware professionals. starting university, maybe a grandchild, and “It’s like having a nuclear bomb detonate up you’re working hard and making a comfortnear Airdrie.” able life for yourself as a consultant in an The changes, which were first introduced incorporated PSB, working for one employer, Oct. 31, 2011 in the federal budget, are makand perhaps raking in as much as $200,000 ing their way through the legislature now. to $400,000 a year. The competitive nature Where consultants used to be able to keep of the industry tends to dissuade loyal conmuch of their earnings in their corporation, sultants, who carry a significant amount of that income will now be taxed – from about intellectual property, from working for more 38 per cent possibly up to the highest rate of than one Big Oil company. around 50 per cent or more, in some cases. Then one day you get a letter in the mail That rises from the current rate of about 25 from the Canada Revenue Agency (CRA) askper cent under the current structure, which ing you to go in for an audit. You have to Dale Leicht, president of Calgarybased First Merchant’s Capital Inc.

www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 73

a Taxing Time for calgary consultants • Tax Planning

allows an incorporated consultant to take money out of the corporation at the lowest eligible business tax rate. “These (consultants) have been skating a bit of a fine line, in any case,” says Leicht. “The CRA looked at it and said, ‘Wait a second.’” He estimates there are about 20,000 of these consultants working primarily in the energy sector in Calgary. What seemed like a stable, comfortable life for these folks could suddenly turn into a $100,000 reassessment – a devastating, crippling blow for most people. “It’s now surfacing down in Ottawa with the high-tech (consultants), but there are hundreds of thousands of them across Canada. Nobody ever thinks about the horrific ramifications to peoples’ lives.”

The CRA simply keys in a consultant’s GST number and goes to the employer and the hunt begins. “It becomes sickening,” adds Leicht, who points out the audit process could drag on for months. “Your life has now become a living hell. This does nothing for marriages, health and general family well-being.” Kim Moody, a registered trust estate practitioner and tax specialist with Moodys Tax Advisors LLP, says the first test for incorporated PSBs is the employee-employer relationship: If you only work for one company, you are usually deemed to be an employee and taxed accordingly, despite conducting your business through a corporation. “Ultimately, if you are a consultant who incorporates a company … and it turns out that the business is really one of an employee-employer relationship,

then that income is considered to be a personal services income,” Moody says. “The danger is that you’re going to be sideswiped with nasty surprises and costs. If you’re proactive and seek advice … then you should generally be fine.” Leicht, meanwhile, has worked with his group of tax lawyers to find ways to mitigate the amount of taxes you will owe and how to properly structure your relationship with your employer to minimize taxes paid. With Calgary having the “lion’s share of oil and gas consultants,” thousands are potentially at risk, he says. There is a small army of auditors preparing to make a major move on the Canadian market for incorporated PSBs, adds Leicht. It only a matter of time before many professionals get burned – bad. For the employers that routinely rely

“The danger is that you’re going to be sideswiped with nasty surprises and costs. If you’re proactive and seek advice … then you should generally be fine.” ~ Kim Moody Kim Moody, Moodys Tax Advisors LLP

74 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

A Taxing Time for Calgary Consultants • Tax Planning

“Not only are they running the risk of reassessment with the CRA, but they’re also at risk with the Internal Revenue Service (IRS). You can really get a double whammy.” ~ Roy Berg Roy Berg, Moodys Tax Advisors LLP

on these experienced professionals to get highly important projects completed, it could also spell total disaster. Not only might they be on the hook for some additional taxes, but they could end up losing that talent altogether as they get crushed under the unforeseen tax bill looming. They are, after all, engineers – not tax experts. The employer could also now become more highly scrutinized over what the firm’s role has been and may also be liable for some of the Canada Pension Plan (CPP) premiums and what may have been originally deemed source deductions. Many large oil companies also employ U.S.-based consultants who come up to Canada and structure their agreements under incorporated PSBs, according to Roy Berg, a tax lawyer with Moodys LLP who specializes in

cross-border taxation issues. “Because of the U.S. involvement because it’s a U.S. citizen, the problems can become multiplied,” says Berg. “Not only are they running the risk of reassessment with the CRA, but they’re also at risk with the Internal Revenue Service (IRS). You can really get a double whammy.” Those consultants could get “whipsawed” and end up paying double taxes if it’s not structured and executed properly, Berg says. There are several tests beyond employee-employer relationships, according to Moody. They include ownership of tools in the case of contractors or field staff, such as heavy-duty mechanics, the chance or risk of loss or profit of the business, and how integral the consultant is to the operation of the business. “All these tests are taken into consideration,” says Moody.

At least if you are a sole proprietor, you can deduct legitimate costs of conducting your business. Not so in the case of incorporated PSBs, with some minor exceptions. If passed as expected, the proposed changes to the income tax act would also be retroactive and apply to any income earned after Oct. 31, 2011. The message being sent to these consultants is to seek professional advice from someone who is highly familiar with these changes. With many baby boomers opting to work under this structure in Calgary’s oilpatch, it could be devastating to their retirement savings and lives in general, not to mention highly detrimental to the companies employing them. “The world works on these consultants,” Leicht says. BiC

The message being sent to these consultants is to seek professional advice from someone who is highly familiar with these changes.

www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 75

The

Business d

on’t let the putt rituals, the techniques and the swings fool you. Nevermind the fashion parade of colourful shirts, caps, trendy slacks and plaid shorts. Don’t judge by the grunts, groans and belly laughs coming from the cart or walking off the green, either. Golf is not only a sacred game; from Shaganappi Point, The Glencoe, Woodside and GlenEagles to Springbank Links, Priddis and Fox Hollow, golf is serious business. And like other businesses, golf has its highs and lows; its ups and downs. Unlike the U.S. situation, the Canadian news is good and getting better. All private and public courses are at the mercy of the same key factors: the economy, the contemporary lifestyles of changing demographics and the weather. At some Calgary golf courses the specific situations and their impact can vary.

76 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

of Golf By John haRdy

Photo courtesy of The Glencoe Club Archives.

The business of golf • Golf Tournaments

Bo Bo Industry experts on both sides of the border carefully track and analyze mostly the same golf business numbers that have absolutely nothing to do with Tiger’s putting, Rory’s drives or Phil’s swings. Although the business of golf considers “rounds played” to be the gold standard for measuring customer volumes and course revenues, tracking precise yearto-date and year-to-year rounds played is mostly for public courses that don’t have a paid-up membership base and must track spontaneous golfer turnout as it happens. Private golf and country clubs have the luxury of fixed membership revenues and other spending by locked-in golf and country club members. Both the management of private and public golf courses reference rounds played as good indicators of customer volumes.

Fo Fo co co or or

M M

silv silv

Photo courtesy of The Glencoe Club Archives.

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The business of golf • Golf Tournaments

“Golf accounts for about $11.3 billion of Canada’s gross domestic product (GDP) and it is a major employer, involving some 342,000 jobs.” ~ Scott Simmons (Photo courtesy of The Glencoe Club Archives.)

and other corporate and group tourna“Some people are shocked when they ments throughout the Calgary area. find out how very big the business of golf Conservative guesstimates show that is in Canada,” says the exuberant Scott coast to coast, the tournaments raise Simmons, CEO of Golf Canada – the govmore than $439 million a year, usually erning body of the sport in Canada. for local charities. “In sheer business numbers there are Calgary’s Priddis Greens Charity more than 2,400 places to golf in Canada, Classic is one example of a volunfrom driving ranges to public and private teer-organized local event devoted to courses. Golf accounts for about $11.3 bilboosting local charities. “We are a golf lion of Canada’s gross domestic product tournament with a charity component,” (GDP) and it is a major employer, involvsays Rick Harrison, the recently retired ing some 342,000 jobs,” adds Simmons. Priddis chair. “We have had from 41 Perhaps because media attention is to 57 teams over the annual two-day often preoccupied with American game tournament. With a lot of support from stats and high-profile celebrity worship, our sponsors, players and volunteers we the biggest and the best surprise about managed to raise totals from $380,000 the Canadian business of golf is its docuto $490,000 in one year.” mented but stealth popularity. Scott Simmons, CEO of Golf Canada According to Lorraine Sinclair, with “Last year 5.7 million Canadians went the Lions Charity Golf Classic, it takes out and played over 70 millions rounds of almost a full year of volunteer work golf. Industry professionals and insiders I to plan, review applications and decide the year’s charity talk to are astounded. Just last month I was at a big PGA recipient and then the many details to make the tournament conference, speaking with Tim Finchem [the iconic commishappen. sioner of the American PGA Tour],” says Simmons. “He was “We register 144 golfers and, last year, the tournament flabbergasted with the stats about golf in Canada. At our raised $45,000. In the 11 years of the tournament, it has current 20 per cent, Canada has, by far, the largest per capita raised more than $500,000,” Sinclair says. golf participation rate in the world.” Although the business of Canadian golf is solid, experts The Golf Canada chief executive also credits the strong agree that it is constantly vulnerable to three factors that popularity of golf in Canada with tournaments being one notoriously impact the game. of the country’s most effective fundraising vehicles. CanaThe sudden 2008 Alberta economy broadside put many dian stats show that, in most years, there are at least 25,000 Calgary area golf courses in the rough, but most have recovcharitable events hosted by Canada’s 1,600 golf courses. ered and at some courses the numbers are even better than And Calgary sure has its share! they were before the economic crunch. Like the Calgary Flames Celebrity Charity Golf Classic, the The hit was much more severe in the U.S., where the timPriddis Greens Charity Classic, the Calgary Stampeders Golf ing of the economic slump combined with the real estate Tournament and various other popular tournaments like the meltdown caused a crisis for the American business of golf. Lions Charity Golf Classic in memory of Judge Gerry SinRounds played were down by as much as 10 per cent at clair, hosted by the Calgary Northeast Eyeopener Lions Club 78 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

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The business of golf • Golf Tournaments

Golf Canada’s Simmons agrees with some courses while loyal golf and the generational forecast as being a country club members reconsidkey for golf’s future. “The aging popuered their discretionary spending lation is great for today’s business of membership dues when their pengolf but our growth projections and sions and investments sagged. our focus now includes youth. Golf Some American private clubs Canada’s number 1 issue is to engage are still struggling, being forced to children, not just in the physical game either close or turn semi-private or but also golf’s core values like respect public just to survive. and integrity,” Simmons says. Another factor that impacts priIt’s business legend that real estate vate courses somewhat more than relies on: location, location, location. public ones, although they are all Despite reams of economic and demoaffected, is shifting demographics. graphic forecasts and projections, the Beyond the often stereotypical business of golf – from Calgary, Phoeretired and boomer golfers there is nix, Fort Lauderdale and Moose Jaw feverish strategy inside the busito Palm Springs and Scotland – is ness of golf about making changes strongly influenced by its own three to ready for “the new normal.” Natasha Sawatsky, The Glencoe’s membership, marketing unique and hopelessly uncontrollable Consensus is that the younger and sales director. factors: weather, weather and weather. demos are not as hooked on golf as “Unfortunately this is Canada. And their boomer parents and grandalthough Glencoe had a strong summer parents were. “They have different in 2012, if we’re lucky, golf in Calgary is a four-month seapriorities and different lifestyles,” says Dr. Rod Warnick, son,” Sawatsky says. “Weather is not only a big factor, it is professor of recreation studies at the University of Massathe factor. Beautiful, sunny blue skies or pelting down rain. chusetts. “The 20- and 30-somethings gravitate to a faster It changes everybody’s mood.” BiC pace and doing several physical activities, not just golf and the slow social life of a golf and country club. “They certainly won’t be spending four to five hours on one golf game or dishing out big chunks of the family budget on pricey memberships, green fees and fancy equipment. upcoming 2013 calgary “That’s why some clubs are eliminating initiation fees, golf tournaments: revising membership dues and suddenly investing in fitness centres, spas and yoga rooms. Golf course designers are also • 2013 Calgary Flames Celebrity Charity Golf Classic working on logistics for the best response to the new lifeusually at Country Hills Golf Club and the Links of style: maybe six-, nine- or 12-hole rounds with forward GlenEagles in Cochrane tees to speed up and shorten the game,” Warnick says. Calgary’s fabled Glencoe, which had extensive renova• The 2013 Calgary Stampeders Golf Tournament, tions and a major facelift to the course for most of last year, organized in conjunction with the Forzani Founhas worked hard and is already an exception to the North dation, has raised more than $350,000 for amateur American “golf and country club” cliché rule. football in southern Alberta “We’re an anomaly,” beams Natasha Sawatsky, The • The 2013 Priddis Greens Charity Classic Glencoe’s terrifically upbeat and infectiously enthusiastic membership, marketing and sales director. “We credit our • The 2013 Lions Charity Golf Classic in memory area and industry reputation but our demos are younger of Judge Gerry Sinclair hosted by the Calgary than the national average. A few years ago we did a survey Northeast Eyeopener Lions Club (at the Links of which showed that the average age of Glencoe members GlenEagles in Cochrane) was 51 and getting younger. The national average is 55. “The generational shift is making family a priority for the business of golf. In various ways we are specifically targeting families.” Last year The Glencoe was formally endorsed by the Canadian Junior Golf Association (CJGA) for introducing the innovative Family Tees Program, refreshingly offering tees of varying yardage to accommodate children of different ages. 80 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

a road less Taxing • Investing

a Road

Less taxing

By Ben FReeLand

hen it comes to taxation, Canadians can consider themselves to be very fortunate. Contrary to the country’s persistent image of a socialistically inclined welfare state, Canadians and the businesses they own pay less in taxes than the majority of industrialized countries. A 2012 survey by PricewaterhouseCoopers ranked Canada as the eighth most advantageous place in the world to pay corporate tax, placing it far ahead of the United States, which ranked 69th. As for income tax, Canadians pay less than only a small handful of industrialized nations and only slightly more than our neighbours to the south. Nevertheless, complaining about taxes remains a favourite Canadian pastime, and most Canadians’ savings, investment and retirement planning involves a substantial focus on retaining as much of their savings as possible. Personal tax planning is thus a crucial element of any financial plan, and an element of the planning process that is best approached with the assistance of both a financial planner and a tax accountant. Most specialists agree that there should be one person at the centre to oversee the process, but this can be either an accountant or a financial planner, depending on which person involved has the most longstanding relationship with the client. “Financial planning is a three-ring circus,” says Randy Bella, chartered accountant and tax leader for the Calgary Region at MNP LLP. “There’s tax planning, investment planning, legal aspects, family and business

Randy Bella, chartered accountant and tax leader for the Calgary Region at MNP LLP.

www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 81

A Road Less Taxing • Investing

As an element of the overall financial planning process, tax specialists are also quick to emphasize the importance of tax planning as a ‘front-end’ element to be addressed right from the start.

dynamics and so on. Unless somebody’s taking a lead role, it ends up being too many cooks in the kitchen. It doesn’t matter if that person is a tax accountant or an investment planning specialist, so long as it’s the person with the longest running relationship with the client – that’s the crucial element.” As an element of the overall financial planning process, tax specialists are also quick to emphasize the importance of tax planning as a ‘front-end’ element to be addressed right from the start. “Begin with the end in mind,” asserts Stephen Lansdown, manager of retail banking at the Calgary South Trail Crossing Branch of Canadian Western Bank. “There are many low-risk strategies available. With registered investments like RRSPs, RESPs and RRIFs as well as non82 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

registered investments, it is important to have an idea of the tax consequences of both earning and removing money from the chosen product. The registered TFSA plan removes the worry about withdrawals as all withdrawals are tax-free. A tax accountant is the best source of tax advice, but your investment advisor should know how different products and strategies affect taxes.” Tax planning involves a mix of tax minimization, avoidance and deferral – the combination of which Bella refers to as ‘tax management’. Bella contends that much of the time, a disproportionate emphasis is placed on tax reduction and avoidance, which he asserts is not always the best course of action. “Tax reduction tends to be people’s focus, but it’s not the be all and end all that many imagine it to be,” he says,

A Road Less Taxing • Investing

“One of the great advantages in living in Canada is that we have RRSPs, which allow us to put off paying taxes until our income is lower in retirement – that’s the genius of tax deferral.” ~ Randy Bella, chartered accountant and tax leader for the Calgary Region at MNP LLP

referring specifically to ‘loss creation strategies’ wherein a loss is created on paper for tax purposes. “There are lots of loopholes within the tax code that a skilled tax accountant can find, but you pay the price in terms of risk because Revenue Canada can always use the General Anti-Avoidance Rule (GAAR) and decide that a law is being used in a way it wasn’t intended to be used. And even if the strategy ends up working, it’s not necessarily worth the sleepless nights it may cause.” Bella argues that in many situations, tax deferral (such as that offered by RRSPs), is a preferable emphasis than tax reduction. “Tax deferral is really an underappreciated option,” he says. “Tax deductions are great, but they’re only a temporary money-saving solution. One of the great

advantages in living in Canada is that we have RRSPs, which allow us to put off paying taxes until our income is lower in retirement – that’s the genius of tax deferral.” Provided a well thought out plan for withdrawal is in place, Bella contends that RRSPs really are the best tax management solution for most clients. “TFSAs are a great investment but they’re an after-tax tool. Also, TFSAs are limited to $5,500 starting this year, up a tiny bit from $5,000, whereas RRSPs allow you to invest four times that much.” Lansdown concurs on the continued benefits of RSPs from a tax deferral and size standpoint. “RSPs offer both immediate and deferral tax benefits. There are strategies for withdrawing efficiently and advisors to help with the preplanning process. People can end up paying more tax than

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www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 83

A Road Less Taxing • Investing

“RESPs can add great value to subscribers such as parents, uncles, aunts or grandparents. RESPs can be a great tax deferral/reduction strategy because the earnings are taxed in the child’s (beneficiaries) hands, not the subscribers.” ~ Stephen Lansdown, manager of retail banking, Canadian Western Bank

necessary when poor or no advice is given.” Lansdown adds that TFSAs offer clients an excellent vehicle to save money for many purposes, tax free. “While many Canadians have come to embrace TFSAs, there are many that still do not understand them. TFSA investments are made with after-tax dollars and the benefit is that all earnings and principal are sheltered from tax. TFSAs can be a great choice for many people, including some low-income Canadians who might get more benefit from a TFSA than from an RSP, as well as high income earners that have maxed out their RSPs. Whatever the situation, getting the right advice is crucial.” Another relatively new development in the tax management picture is the phenomenon of eligible dividends. In October 2010, the government of Canada changed the rules regarding dividend investments in Canadian corporations, designating them ‘eligible dividends’ for income tax purposes. Bella asserts that eligible dividends are an excellent tax management strategy due to the tax credits they provide, which offsets the tax paid on the investments. “Eligible dividends are great for tax management, especially in Alberta, which has the highest tax credit rate in the country at 19.3 per cent.” Another tax management option available to families is RESPs (Registered Educational Savings Plans), which represent another useful tax deferral strategy. “RESPs can 84 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

add great value to subscribers such as parents, uncles, aunts or grandparents,” says Lansdown. “RESPs can be a great tax deferral/reduction strategy because the earnings are taxed in the child’s (beneficiaries) hands, not the subscribers.” In the end, tax planning, like all other aspects of financial planning, is a highly individualized process that should be viewed as an inseparable component of the overall financial planning process, and one that requires relationship-building with accountants and financial planners. “Being an effective tax practitioner means building trusting relationships with clients,” says Bella. “Like in any other type of financial planning, there are aggressive, risky strategies a person can take or less aggressive approaches, and you need to know a client’s comfort zone before embarking on something risky. You also need to be a good communicator. If your tax advisor leaves you confused, it’s a good bet they don’t understand the stuff either.” The old cliché about death and taxes remains as true as ever; and as with developing one’s legacy, tax management is an individual process that requires planning. As Lansdown explains, “I have heard that Canadians do not mind paying taxes for the great country that we call home; it’s just that we only want to pay our fair share. And with the right planning, this is indeed possible.” BiC

Jager Homes Inc. | 65 Years | 1

Jager Homes Building Calgary communities for over 65 years By Mary Savage

floor joists to better service the North American market, and the following decades saw the continued growth in manufacturing, land development and homebuilding. By the early 2000s, the three divisions were sold and Jager Homes was re-established as its own identity under the Hon Group of Companies, a family-run business that has been involved in real estate and land development for decades.

More than Bricks and Mortar

What’s changed … what’s stayed the same Over the course of six decades, one of the most significant changes to affect the homebuilding industry is the rate at which the city has grown: it’s how the land is approved, developed and serviced today. The supply of land and exponential growth has led to regulations that have inherently affected this growth and development. Above image courtesy of Jager Homes “The realities of building a home today are completely different than they were in the 1950s, but along the way, we have adapted and we like to think we have adapted better than most,” he year was 1947. Mackenzie King was prime minister, the says Roland. Canadian Citizenship Act went into effect and it was the start Technology has changed the way houses are built. The materiof the Cold War. Technology welcomed the invention of the als are constructed and manufactured differently, and the houses transistor, the mobile phone and the instant camera. A loaf of bread are put together differently. The industry has specialized subcost about 13 cents, average annual wages were $2,850, and the trades and instant communication connects everyone – whether average cost of a new home in North America was about $6,600. they are on-site, en route or in the office. Closer to home, huge oil reserves were discovered in Leduc, When it comes to building materials, as an example, granite Alberta and Calgary quickly found itself at the centre of the ensuwas a significant upgrade 20 years ago. Today, granite is found in ing oil boom. Stampede Wrestling was established and the city’s almost every starter home in the city. “Technology has made the population was just over 100,000. delivery process much easier,” asserts Roland. “The global supply It was also in 1947 when Bill Jager started a small homebuildchain has tightened up and now we’re able to get products from ing business, Jager Homes Inc. Over six decades later, Jager is all over the world at the snap of a finger.” recognized as one of the oldest and most trusted names in WestDuring a recent conversation with one of Jager’s suppliers, ern Canada. And it would seem that Jager is as much a part of Roland recalls how they worked with homeowners 15 years ago Calgary’s history as the oil industry. to select fixtures. “When it came to faucets, there were two types Jager has built over 13,000 homes in Calgary and the surround– Delta or Moen – and they came with a chrome or pewter finish,” ing communities, and they have worked in every quadrant of the remarks Roland. city. Jager was one of the first companies to work with the city “Today, that same supplier carries 220,000 in residential land development – giving rise to products in his warehouse. Access to that many many of Calgary’s early communities. They have choices has really changed the way we do businot only watched the skyline grow, they have ness,” he adds. “We can compete with any contributed to the growth and witnessed hunbuilder in the world with respect to product and dreds of city milestones. design – and it’s because we live in a global Jager, along with other Calgary pioneer marketplace.” homebuilders, fostered a vision to develop these Beyond the fixtures, advanced communicacommunities and that history speaks to Jager’s tion has given rise to a more educated consumer success. “Jager has been successful because of and Roland believes this is another positive the foundation that was laid 65 years ago,” says aspect of adapting to change. Joe Roland, general manager, Jager Homes. “It’s “People are very knowledgeable with respect the foundation of hard work, trust, looking for to property values and building materials. There’s opportunities, seizing those opportunities and a lot more information in the consumer’s hands not being afraid of the growth.” and sometimes the availability of information is During the 1970s, Jager expanded its Calgary perceived as a bad thing, but having that inforoperation to Ontario where they manufactured Joe Roland, General Manager mation actually makes us better,” he says. Photo by Mary Savage

Jager Homes Inc. | 65 Years | 2

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And as the consumer becomes more educated, Roland feels there’s less ambiguity when it comes to the homebuilding process. “The end result sees a better product, a better experience and better communication.” In 65 years, one thing has remained the same: people want value for their money – period. It matters not if someone paid $20,000 for a house in the 1960s or if they paid $800,000 in today’s market. It’s still the same principle and people still ask, “What am I getting for my money?” “Building a home is a financial investment, but it is also an emotional investment,” says Roland. “It’s where we raise our families, celebrate birthdays and the holidays. It’s where our kids lose their first tooth and it’s the place we call home – every day. It’s not just bricks and mortar.”

A Higher Standard in Homebuilding Decades of passion and commitment

When Jager started building homes, originally they bought the developed lots from the city. They ran a small crew, built a house and moved on to the next lot. When Jager and like-minded businesses realized they needed more land to run a more profitable business,

they purchased larger sections and started developing communities. As the communities started to take shape, forward thinking found the people at Jager developing a concept called an ‘I-joist’ – once again illustrating an example of how to build a better home. And it’s this type of forward thinking that has culminated the higher standards in homebuilding today. “In the Calgary area, the quality of homebuilders and construction is much higher than most of what I’ve seen in many North American cities. We hold ourselves to a slightly different work ethic. We have a great national and provincial building code, excellent associations and great leadership that comes from many of these founding companies that have been around for decades,” says Roland. “When you look around Calgary and as it relates to our industry, there are a lot of single-family homebuilders that have been in Calgary for over 30 years. I attribute that longevity to our historically strong economy, but there’s also a passion among the local builders. There is an overall belief within the industry that we can always build better,” he adds.

Bridging the Decades Building for generations

When you look at any successful long-term business, the most important assets are found among the people. And in an industry where people are known to cross the street for an extra buck or two, it’s a tall order to maintain relations with excellent tradespeople – decade after decade. Inside the Jager office, you will find people who have been committed to the company for over 30 years and Roland attributes the company’s success to this stability. Stu Garrioch has been building Jager foundations for over 28 years; Dennis Lidstone, service manager, has been with Jager for over 24 years; and Mike D’Agnillo, assistant superintendent, has been with the company for over 44 years. These men represent a cornerstone in the Jager family and their unwavering commitment to workmanship has helped build the Jager brand. “Calgary has an excellent talent pool and labour base, and Jager has been very fortunate in this arena. We have framers that have been with us for 25 years and most of our finishing carpenters have

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worked with us for over a decade,” explains Roland. “We are proud of the longevity with our employees and the partnerships we have forged with our subtrades,” he says. “We are now starting to work with second-generation subtrades and they are all part of the Jager family.” Likewise, Jager is building for the second and third generation of customers. “People hire us to build their home because their grandmother lives in Jager Home or they know someone who worked for Jager,” notes Roland. “We bring a lot of expertise to any project because of our history. Our collective experience, which includes our ownership, helps us to develop a different vision,” he says. “We also have to meet the challenges associated with city growth. In older cities like New York and Boston, they have met many of these challenges – they are hundreds of years old. Calgary is still a young city and there are challenges that come with our city’s age and unique qualities,” he adds. In addition to growth, there are social and environmental challenges. “Values are changing toward energy consumption and consumables, and we are trying to bridge that gap,” he notes. “As a society, we are realizing that resources are finite, so we have to figure

out how to live with less – consuming less energy, better utilization of the land, building better homes and meeting future challenges.”

Looking Forward When Roland pauses to reflect on Jager’s success, he concludes it was due to a combination of factors. “We built the business on core values that were established 65 years ago, but we also happen to be in the right geographical location,” he says. “We are blessed with natural resources, Alberta is energy-rich and Calgary is a young city with the right demographics.” As Jager Homes celebrates 65 years in business, they pause from their workday to extend a note of gratitude to all the business partners, customers, suppliers, tradespeople and employees who have contributed to their success; they couldn’t have achieved this milestone without that support. •

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The Calmont Group: 35 Years of Driving Success By Nerissa McNaughton

he year was 1966. Lawrence Pudlowski was fresh out of school and had put in a couple of years working for PepsiCo when he figured there had to be a better way of life. He answered an ad for Avis Truck Rentals and joined the franchise. It wasn’t long before Pudlowski and his franchise partners looked up at the Avis banner and had the same thought, “why are we paying for the use of the Avis name when we could run a truck rental company on our own?” With that thought, the partners sold their Avis franchise and the Calmont Group was born. The name, Calmont, is derived from Calgary to Montreal; the franchise locations (Edmonton, Calgary and Montreal) of the original Avis Truck Rental company. As for Pudlowski, this original business partner is still fully active in senior management and cites Calmont as “the only job I’ve really had.” “It’s an exciting business,” Pudlowski says as he reflects on the many years and changes he has seen at the Calmont Group. “You look forward to coming to work because you know some-

thing is going to happen, and it’s usually something good.” Something good indeed. What started out as a modest light truck rental business with a fleet of 25 units has grown to a massive enterprise with over 2000 rental and leasing units. Approximately 1400 of those units are rented or leased from Calmont’s headquarters in Edmonton, which operates from the original business site at 14610 Yellowhead Trail. It is from this Edmonton location that Calmont has grown, changed and adapted into the success it is today. The Calmont Group provides financing and leasing of company trucks and cars, service vehicle leasing, short-term leasing, daily rentals, trucking fleet sales, and a parts and service department that includes complete maintenance, top repair stations, and emergency roadside assistance. Calmont’s sleeper, day cab, straight truck and shunt truck fleets have the latest technology for commercial transport rental and leasing needs across Canada.

YEARS Calmont’s leasing and rental service empowers transportation businesses to make a smart investment. Leasing or renting allows trucking businesses to launch without the significant start up capital required to purchase a large truck. Calmont’s rental service provides a wider range of options for those operating in the oil and gas industry. When trucks are needed for seasonal projects or where the project length is undetermined, a rental can simply be returned, saving the business owner from having to make payments on a truck that is sitting idle and not earning money. Franchises of the Calmont Group include, Sport Chassis, Kalmar Shunt Truck (Ottawa) and the Volvo Truck Center. Sport Chassis features luxury Freightliner products that are popular in the fields of ranching, construction and other industries that require heavy truck pulling power. Kalmar is one of Calmont’s most successful franchises to date. These shunt trucks provide a safe, fast and efficient way to move and lift semi trailers within warehouses. The Volvo Truck Center is the official Volvo franchise for North America. Located at 11403-174th street in Edmonton, the Truck Center features an impressive inventory and a service center that has won the Cummins Quest Dealer of the Year Award, the North American VISTA competition, and was

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named Volvo Vista Tech Canadian Champion in three consecutive competitions. The Volvo Truck Center was added to the Calmont Group in 1988, as the company wanted to expand into the Class A (heavy truck) business. The most efficient way to do this was to purchase a dealership. Volvo’s high quality products and parts department were a perfect fit for Calmont’s vision. Prior to purchasing Volvo, Calmont would experience a slow season each winter as oil and gas projects slowed or stopped until spring. The parts and service department of Volvo compensated for the slow season. As more franchises were added and business expanded, slow seasons became a thing of the past. These days, every season is a busy one. However, the road to success has not always been a smooth one, a fact that Darren Currie, the President and CEO, knows all too well. “There are peaks and there are valleys,” says Currie when asked how the company has fared overall during their 35 year reign. “We are tied to the oil and gas industries, but if you look over the 35 years, there has always been growth – except for those small valleys.” One such valley occurred in 2008, which was when Currie joined the Calmont group as the Chief Financial Officer (CFO). At this time, the oil and gas industry was underperforming and the Canadian economy was in a slump. Currie, ever up for the challenge, battened down the hatches and sailed the group through the financial storm. “In 2009 we broke even,” says Currie. “In 2010 we were profitable again.” As part of a planned succession, Currie was named President and CEO in 2010. “It’s been four and a half really good years,” Currie admits. “We are in a growth pattern for sure. We are in the process of re-capitalizing by bringing in a new partner. With Carter, now we have more of a national presence.” Carter would be Calmont’s latest acquisition: Carter Lease and Rentals. Carter Lease and Rentals was established in Hamilton, Ontario in 1970. Calmont purchased Carter in 2012, which served to further expanding the Calmont influence into Ontario. Calmont has since built up Carter from a 400 unit rental company to over 500 rental and 25 lease units. The original staff of 26 where retained, and four more were added to accommodate the franchise’s rapid growth. The purchase of Carter Lease and Rentals is just one of the steps Calmont is taking to secure the company’s future. “With the addition of Carter, Alberta to Ontario is covered,” says Currie. The Calmont Group is not just about pleasing their clients. The employees benefit strongly as well. Each employee gets to learn about the company’s many operations, regardless of their role. This gives them insight into the overall mechanics of Calmont and helps to keep them invested in their jobs. The sales team are treated like entrepreneurs. Once they have established themselves within Calmont, they have autonomy over how they choose to sell the product. An influx of younger, forward thinking employees has ensured that Calmont is focusing on a strong, growth based culture. “It’s about developing, not just maintaining,” says Currie, beaming with obvious pride as he discusses his team.

YEARS

The Calmont Group is an Edmonton success story 35 years in the making and it shows no signs of slowing down. The community also benefits from The Calmont Group as this altruistic company is often seen supporting charity events. Whether it is sponsoring a hole and entering a team at the Make-A-Wish golf tournament; dressing up in western wear and attending the Stars and Spurs Gala in Calgary for STARS air ambulance; providing free truck rentals for Crime Stoppers, the food bank, and the Dragon boat festival; or donating to the Okotoks Oilers Golf Tournament and West Jet Pilots’ Association Golf Tournament, Calmont’s trucks, management and employees can be found quietly but steadfastly giving back to the communities that launched their careers. The Calmont Group is an Edmonton success story 35 years in the making and it shows no signs of slowing down. “It’s been great,” says Currie of his experience to date as he looks forward to Calmont’s continued expansion across Canada. “The future plan is to manage the existing locations and start adding more in late 2013.” As for Pudlowski, Calmont’s longest term employee, these days he enjoys his role as the Senior Vice-President of Vehicle Purchasing and Disposals. He has to admit, however, that things have changed significantly since 1966. “It’s not as much fun now as it was back then,” he sighs. “I mean, we started with 25 vehicles. Now we are in the thousands.” That is not to say that he doesn’t enjoy his role as Calmont’s only active member of the original shareholders. “No two days are the same,” Pudlowski says with a twinkle in his eye and a con-

tagious smile. “It’s always a different day. A lot of companies have a lot of monotony, but here, everyday is a different day. We have good days and we have bad days, but more good than bad.” From a concept among franchise partners to a start up venture to a thriving business operating across Canada, The Calmont Group is a company from which all inspiring entrepreneurs can draw inspiration. Calmont’s 35 years of driving success are just a precursor of the things to come for this innovative company.

14610 Yellowhead Trail Edmonton, AB T5L 3C5 780-454-0491 • 1-800-363-7819 5475 53 St SE Calgary, AB T2C 4P6 (403) 236-1993 • 1-800-463-5943 www.calmont.ca

Calmont Group | 35 Years - 3

速

Building a Legacy Written and photographed by Mary Savage

hen it comes to concrete construction, Brad Rasmussen knows a thing or two about the industry. His track record brings over four decades of experience to a tough and unforgiving trade. After running a successful concrete formwork business in High River for 10 years, he moved to Calgary and established Conform Works Inc. during the spring of 1998. By 2001, Brad’s son, Jordan, joined the company to run the office while Brad supervised the fieldwork. In an effort to keep pace with an ever-changing economy, Conform has expanded, contracted and once again expanded. They have recently repositioned the company having survived the economic downturn in the late 2000s. Today Conform has gained significant market share as one of Calgary’s preferred concrete structure suppliers, but their growth has not always come easily. In the fall of 2008, business was good. The Conform crews were busy, the company had numerous large contracts underway and they employed up to 300

people. One year later, every construction company in North America was seemingly on the front lines of the economic crash. Conform was reduced to a skeletal staff of 25, they had lost 75 per cent of their annual revenues and the payables were piling up. The following two years brought more bad news: contracts were scarce, payroll was a constant struggle and fielding calls from collectors had become a full-time job. But Brad and Jordan refused to quit. “We didn’t close the doors because we were committed to our business community; we were not going to shut things down unless an external situation forced our hand,” recalls Brad Rasmussen, president and founder. “We knew we had to ride it out and honour our debts.” Conform’s commitment illustrated their business acumen and true to form, the market started to rebound. By the close of 2012, Conform had achieved 100 per cent growth. They had re-hired several key people and rolled into 2013 with a sizable list of large-scale projects underway.

Brad Rasmussen

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Congratulations ConForm Works on your 15th anniversary!

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“The economic crash made our company leaner, meaner and stronger,” remarks Jordan Rasmussen, general manager. “There is an increased level of confidence among our suppliers and customers because of our commitment.” In 15 years, few things have remained the same at Conform, however their pledge to quality and customer service has never changed. “Brad continues to drive around in his truck – checking out the job sites – and I doubt that will ever change,” adds Jordan. “Apart from that, everything else has changed.” Conform has evolved from building water reservoirs and small one-storey parkades to the pinnacle of concrete construction: highrise buildings. “Our capabilities have grown and the market has matured. Years ago we realized the true value to our customers and we have repositioned ourselves in the market,” adds Brad. As a family-run business, all of Brad’s sons have worked for the company although sons Jordan and Tahoe have been with the company for over a decade. Tahoe heads up the logistics division and it’s an integral aspect of running an efficient operation. “Concrete work is a fierce discipline and there’s very little margin for error. Planning the formwork is a bit like threedimensional chess: you’ve got to consider all the types of trades that are on-site and working around them adds to that complexity,” says Brad with a grin. Recent projects include Louise Station, Stampede Station and the Harvest Hills overpass on Stoney Trail. The Vantage Point Condominium, located on 11 Avenue SW, reaches 27 storeys high and is the tallest building Conform has constructed to date.

Safety is another area that’s key to Conform’s success. Daren Korner, safety officer, and Baljeet Kataria, site superintendent, have demonstrated an unwavering commitment to safety procedures over the past eight years. “Public safety is at the forefront of our operation. We are constantly working with contractors and the city to improve safety protocols and meet new city guidelines,” notes Jordan. “Conform’s mandate has always been a position of leadership.” Looking forward, Conform is optimistic about the future. The start of 2012 found their crews working as subcontractors for ITC Residential to build Calla; a downtown 12-storey highrise and the first of its kind for them since 2009. This year you will find their crews building the new OPUS head office and Glenmore Gardens III. Back inside the Conform office, Jordan is fielding calls for another potential project. On the wall of his office, the sign reads: ‘Be firm, fair and friendly… and in that order’ – an industry expression known as ‘Poole’s Rules’ that reflects the kind of wisdom garnered from decades of experience. As Conform continues to build a well-respected name in the industry, lessons learned from 2009 through 2011 are never far afield. As Conform celebrates their 15th anniversary, they would like to extend a sincere thank you to all the business partners, suppliers, customers and employees who have contributed to this milestone. A special note of gratitude goes out to Western Canadian Bank for standing behind Conform and believing in their commitment.

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POINTTS The Traffic Ticket Specialists

raffic tickets and other infractions that come about from time to time can be stressful, but trying to fight them can be even worse. Where to go and what to do isn’t common knowledge, so it is little wonder that POINTTS has garnered such a reputation over the years as the place to contact when traffic issues pop up. The Consumers’ Choice Award winner has been in the Calgary area for over 24 years, and during this timeframe, POINTTS has helped a lot of people avoid stress and get back onto the road. POINTTS is proud to have won this prestigious award for five consecutive years. “Know who you’re hiring to fight your ticket,” says Charlie Pester of POINTTS. “We’re professionals, have extensive experience in traffic court, and carry errors and omissions insurance.”

POINTTS offers free consultations, so there is no financial risk to give them a call and get some basic information. Once the decision is made to go with POINTTS, let their know-how give you peace of mind. The big difference between POINTTS and the other guys is experience and know-how. POINTTS, along with its rich history, is a member of the Better Business Bureau and hire only the best. All Calgary POINTTS representatives are “former police officers with extensive experience in traffic court,” he says. “People need to know who they are dealing with.” For many, a traffic ticket is a bewildering experience in and of itself, but even one ticket can cause issues down the road. “A lot of people simply don’t know,” says Pester. “Even one ticket can have an effect on your insurance rates.” POINTTS offers free consultations, so there is no financial risk to give them a call and get some basic information. Once the decision is made to go with POINTTS, let their know-how give you peace of mind. 98 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

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FEBRUARY 2013

Alberta’s new energy regulator The inside scoop on what it means for project development

Speaking to the Calgary Chamber on December 13, 2012, Diana McQueen, minister of environment and sustainable resource development, explained how this new regulator will affect companies throughout the province.

BY JESSE SEMKO

lberta is moving to regulate its energy resources in a more efficient way by creating a single regulator for all oil, gas, oilsand and coal projects in the province. This new regulator will merge the energy development regulatory functions currently run by several departments – such as the Energy Resources Conservation Board and Alberta Environment and Sustainable Resource Development – into a single point that companies can now turn to for applications on proj-

ects in the energy sector. This will save companies both time and money without reducing the impact on the environment. Speaking to the Calgary Chamber on December 13, 2012, Diana McQueen, minister of environment and sustainable resource development, explained how this new regulator will affect companies throughout the province. She said the intent of the new regulator will be to eliminate the duplication of work among multiple departments. www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 101

2013 Board of

Directors Executive Joe Lougheed – Chair

Dave Sprague – Immediate Past Chair Leah Lawrence – Chair Elect Rob Hawley – 2nd Vice Chair Denis Painchaud – Vice Chair, Finance Adam Legge – President & CEO Directors David Allen Bill Brunton Eva Friesen Guy Huntingford Rob Lennard

“We had three different regulators and I think it was confusing at times as to where companies should end up when they had a question about a project. Industry will now have one window they can go to for all their questions. This will streamline things.”

Dilan Perera Linda Shea Paul Waddell Management

– Diana McQueen, minister of environment and sustainable resource development

Adam Legge, President & CEO Ben Brunnen, Chief Economist Michael Andriescu, Director of Finance & Administration Jackie McAtee, Director of Member Experience Kim Koss, Vice President, Business Development

Leading Business magazine is a co-publication of the Calgary Chamber and Business in Calgary Calgary Chamber 600, 237 8th Avenue S.E. Calgary, Alberta T2G 5C3 Phone: (403) 750-0400 Fax: (403) 266-3413 calgarychamber.com

“We had three different regulators and I think it was confusing at times as to where companies should end up when they had a question about a project,” McQueen said. “Industry will now have one window they can go to for all their questions instead of three. This will streamline things without changing any of the environmental outcomes.” The new regulator, which will be up running by June 2013, is something that industry and business organizations such as the Chamber have been asking the province to introduce for some time. In 2010 the Chamber, along with nine oil and gas industry associations, submitted an Industry Submission on the Alberta Regulatory Enhancement Project to the provincial government calling for a simpler regulatory process and outlining several suggestions as to how this could occur. Some of these suggestions included establishing a clear public engagement process, developing an effective mechanism to address landowner concerns, as well as an arm’s-length environmental monitoring system with clear performance benchmarks.

102 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

“We’ve accepted all of that feedback,” said McQueen, when asked about the role that both public and industry consultation has played in the formation of the new regulator. “The province has already worked with stakeholders – such as landowners, environmental groups, municipalities and industry – over the past two years leading up to passing the appropriate legislation.” McQueen said that public response on the new regulator has been good, with landowners being pleased that they have a way to express grievances with industry through a single regulator and that they are also happy that the regulator must notify them if there is activity in their area. Beyond that, she said, the new regulator will have a policy management office that will provide a forum in which issues beyond those of individual development applications can be discussed. McQueen added that the implementation of the new regulator will be seamless, with the government not turning off any of the old regulatory systems until the new system is up and running. “It will be a system that will be effective for Albertans,” she said.

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104 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

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A Vision for All Part 2 of an interview with Marcia Lyons, General Manager of the Calgary TELUS Convention Centre (CTCC).

Marcia, we finished last month’s interview discussing the vision you and your team have for the CTCC. Can you provide some more details on the vision and the role the CTCC can play in Calgary’s growth? The CTCC is a tremendous facility that all Calgarians can be proud of. In 2011, almost a quarter of a million people attended an event at the CTCC and over 35,000 of those were visitors to Calgary spending on average more than $330 per day. Our estimates show their spending contributed approximately $53 million to the province’s GDP. We want to build on these numbers and remain an important factor in Calgary’s economic growth. The challenge we now face is the size of our facility compared to other facilities in Canada and around the world. The CTCC now ranks 10th in facility size in Canada, well behind the much larger facilities in Toronto, Montreal, and Vancouver, but also well behind Edmonton, Winnipeg, and Saskatoon. When the last expansion occurred in May 2000, we were able to compete for approximately 30% of the convention market. With the growth of the size of conventions and conferences we are now only able to meet the needs of approximately 19% of the convention market. Does that mean you will not be able to meet the needs of some organizations that have held conventions here in the past? Yes. A good example is the World Petroleum Congress (WPC). The WPC is held every three years in a major international destination and the 16th WPC was held here in 2000. The Congress was a resounding success contributing

$15 - $20 million to the Calgary economy, demonstrated Calgary’s leadership role in the international oil and gas industry, and created a network of international alliances for Calgary companies. The 16th WPC also created a Millennium Scholarship program that provided 200 scholarships of $3000 annually until 2009. Almost 3000 delegates from 97 countries attended the 16th Congress in Calgary, 5000 delegates attended the 20th WPC in Doha, Qatar, and more are expected to visit the 2014 Congress in Moscow. Calgary should be hosting events like the WPC, but without an expansion to our facility we are not able to meet their needs. What does the overall market look like for the convention industry? Are other facilities expanding or has the international economic instability reduced the space available? Surprisingly, the growth in the amount of space available internationally continues to grow. Over 30 million square feet of exhibition space has been added since 2006 with 46% of that increase coming from extensions to existing facilities. Can Calgary and the CTCC continue to compete with these larger facilities? Yes, we have an excellent team and we will continue to compete successfully in our market niche. The CTCC helps to create economic growth in Calgary and is a valuable resource for all Calgarians. Calgary is a great city and we want to ensure we continue to play an important role in its economic growth by bringing businesses, events, and people to our city.

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www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 105

Tourism Forecasts and Trends BY STEWART MCDONOUGH

International The Tourism Industry Association of Canada (TIAC), HLT Canada and Visa Canada produced a special report outlining Canada’s tourism prospects for the coming year as reported by the Canadian Travel Press. In spite of the international economic downturn, the global tourism market is booming. International travel between countries represents the fourth-fastest growing export sector in the global economy, with one billion travellers spending $1 trillion outside their borders in 2012. Strong tourism growth from emerging economies has offset the relatively flat growth from Canada’s traditional source countries. A report prepared by TIAC and Deloitte shows that a 27 per cent boost in arrivals from China in 2012 has moved China past Australia into fourth spot on Canada’s international arrivals table, while Brazil, India and Mexico combined for an 11 per cent increase in arrivals. Unfortunately, only 20 per cent of Canada’s $78.8 billion tourism industry in 2011 was from international visitors compared to 33 per cent in 2001. This trend follows the continuing decline in Canadian Tourism Commission funding, creating a national tourism industry that is increasingly reliant on domestic tourism. While the global tourism market is growing, Canada’s share of international travel is decreasing leaving tremendous potential growth unrealized.

Canada Canadians will continue to travel in growing numbers in 2013. According to the Conference Board of Canada, growth in domestic overnight visits is projected to expand by two per cent, slightly higher than in 2012. Growth in overnight business travel in 2013 is expected to match that of 2012 at two per cent while pleasure travel growth

is projected to edge slightly higher, due to continued gains in employment and disposable incomes. A study conducted by Harris Interactive for Expedia.ca found that the number of Canadians taking all their allotted vacation days has significantly increased since the study was first conducted in 2003 when 33 per cent were not taking all of their vacation days – now just 19 per cent say they are not taking all of their vacation days.

Calgary In 2012 Calgary remained first among the nation’s major metropolitan centres for visitor spending growth for a second year and shared top spot with Edmonton for overnight visitor growth. According to the Conference Board of Canada, Calgary will continue to see growth, though at a more subdued rate in 2013, with an increase in overnight visitors of 2.3 per cent and again in visitor spending of five per cent. In 2013, alignment among the city’s promotional agencies should continue to improve with better harmonization of marketing activities and messages throughout the year. The increase in collaboration and a shared Calgary brand should result in more efficient marketing reaching more potential travellers. The city’s tourism marketing organizations will seek to capitalize on the increased attention realized in 2012 through the Stampede Centennial, Cultural Capital designation and World Junior Hockey Championship.

Tourism Marketing Trends Travelling consumers will be looking for new and more authentic experiences in 2013, and they’ll be using various forms of technology and social tools to seek them out. While it is certainly not news that mobile technology is

106 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

important in today’s marketing mix, brands and products with a poor mobile presence or strategy will be left behind and fall off the radar for increasingly tech-savvy consumers. The rise of smart TVs – Canadian Travel Press recently reported on the growing trend of television viewers booking holidays featured in shows they’ve just watched. Online purchasing from smart TVs is expected to become widespread, according to the WTM Global Trends Report 2012, as more consumers buy web-enabled TVs and travel companies jump on-board with new marketing opportunities. According to Caroline Bremner, Euromonitor International Head of Travel and Tourism Research the penetration of Internet-enabled TV sales in the digital television market is expected to grow rapidly, from a 35 per cent share in 2012 to 74 per cent in 2016. Online group-couponing – The Conference Board of Canada recently studied the willingness of consumers to purchase travel-related products through group-buying websites such as Groupon.com and Dealfind.com. An October 2012 survey found 20.4 per cent of Canadians had used an online coupon website to buy a travel-related product – 44 per cent for accommodations, with 23 per cent for dining and 22 per cent for recreational activities. The practice is much more common place among Canadians aged 18-29 than those 50 or older. Almost two-thirds of online group coupon purchases are made for travel within Canada with 53 per cent for use in their home province. These findings suggest that group travel couponing can encourage domestic tourism, particularly intra-provincial travel, but there are potential dangers such as brand erosion and weakening brand loyalty and profitability to be monitored closely.

Funding Alberta’s Early-Stage Technology Ventures

BY ANDREA MENDIZABAL

“I

nvestors love to come to a place where they get to listen to a well-prepared pitch,” says Henry Kutarna, executive director of Alberta Deal Generator Calgary. “We are a hub where the deals come to us, and investors come to us looking for the deals.” Alberta Deal Generator (ADG) is a non-profit provincewide program designed to facilitate investment in technology companies in Alberta. It is a place where the accredited investors who form the ADG Investor Network have the opportunity to listen to a key number of deals each year for investment potential. “ADG helps simplify and formalize a marketplace for investors and entrepreneurs to interact,” says Kutarna. A joint initiative between Innovate Calgary and TEC Edmonton, ADG is designed with input from the investor community. They screen hundreds of potential deals each year from within Alberta’s advanced technology sector, narrowing the list down to 15 per year. Prior to presenting their opportunity to the ADG Investor Network at exclusive presentation forums held four times a year, those entrepreneurs who are selected must prepare via an intensive boot camp that helps these early-stage companies become investment ready. “We provide a forum where prepared entrepreneurs succinctly present their opportunity to investors, who can then ask questions about the company while maintaining confidentiality and anonymity,” says Kutarna. Once investors select the deals that interest them, they carry out independent due diligence.

In addition to gaining access to exclusive presentation forums, investors who are part of the ADG Investor Network also gain access to investor development training where they have the opportunity to learn about new industries, gain knowledge about strategies for successful investing in early-stage companies, and learn asset allocation strategies to diversify investment portfolios. This also provides the opportunity to network with other accredited investors who share similar interests. “The ADG Investor Network is made up of serious investors who are interested in funding early-stage technology companies. They want to come connect with entrepreneurs who need capital,” says Kutarna. Since inception, ADG has established one of the largest networks of active and accredited investors in Canada pursuing opportunities in Alberta’s early- and growthstage companies. To date, more than $15 million in financing has been facilitated through Alberta Deal Generator, in addition to more than $30 million in follow-on investments. For more information on Alberta Deal Generator, or to learn how you can become part of the Alberta Deal Generator Investor Network, contact Henry Kutarna, executive director of Alberta Deal Generator Calgary, at (403) 267-2408 or hkutarna@innovatecalgary.com. To learn more about Innovate Calgary and Alberta Deal Generator, visit innovatecalgary.com/ADG.

Become a member of one of the largest networks of accredited investors in Canada, pursing opportunities in Alberta’s early and growth-stage technology companies. Add technology deals to your portfolio See 15 well screened deals annually Network with other accredited investors sharing the same interests Develop your investor skills through briefings and investor development training Alberta Deal Generator is an initiative of:

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www.businessincalgary.com | BUSINESS IN CALGARY February 2013 • 107

Elusive Work-Life Balance: the Answer is WORKshift

e all strive for this mythic work-life balance. A quick Google search shows over 189 million webpages dedicated to successfully managing the delicate act of balance between our professional and personal lives. But here’s the challenge. Over the past few decades, technology has promised to make this balance easier and pretty much every new gadget has failed to do so. We have watched our work migrate into our home life while we still avoid bringing too much of our personal lives into the office. But what if, instead of striving for some kind of elusive balance, we embraced the whole concept of work-life integration? We’re connected to work even when we are not actually at the office and there is a reality that some of our personal activities creep into our offices. Life does not happen before nine and after five. More frequently, people in Calgary are choosing, and are able, to work from somewhere outside of their office in the quest to get more done. It’s called WORKshift. Organizations like ATB Financial, Telus, NovAtel and Eagle Professional Resources are embracing the flexible workplace where the focus is on results rather than simply the hours logged sitting at a desk. In fact, Calgary is leading the way and the rest of the country is starting to take notice. “Just walk through your office, I’d bet more than half of the desks are empty at any given time of the day,” says Robyn Bews, project manager, WORKshift. “But the contradiction is that meeting rooms and collaborative spaces within the office are booked solid as employees look to find spaces to collaborate with their colleagues. This collaboration is why people come to the office at all.” What is driving this change? Companies, big and small, recognize that they are competing on a global scale for talent, especially in Calgary. Skilled workers have choices and by embracing a flexible environment, companies speak volumes about their corporate culture: employees are trusted and they are measured on the work they do, not the hours they are sitting in their offices. Companies implement flexible work programs all the time, but often without understanding the impact to their business and without appropriate support for their employees and managers. When organizations claim to have “flexible work practices” or a “telework” program, what does this really mean? WORKshift helps organizations establish a plan, structure and metrics to set up a successful flexible work program. 108 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

It’s the same type of questions that cropped up before LEED became the de facto standard when describing green buildings. And like the green building movement, there are many books and articles that point to the benefits, for workers, companies and even municipalities, of having a flexible work program, but no road map of how to successfully implement a program. This is where WORKshift comes in. WORKshift offers an established process for employers to use when adopting these programs. By creating a road map of how to successfully roll out the project and identify the

“These results not only include increasing employee effectiveness and satisfaction, but also create real impacts on the bottom line in the form of real estate savings.” ~ Robyn Bews right participants, companies can measure the impact of a flexible work program on their organization, benchmark how they are doing amongst their peers and become certified as “WORKshift friendly” to identify themselves to jobseekers. “Many of the organizations that we work with have already tried to set up their own flexible work programs which have taken much longer and been much costlier than they expected and without any understood benefits,” says Bews. “WORKshift brings structure to the process by helping companies establish their program and measure the outcomes. These results not only include increasing employee effectiveness and satisfaction, but also create real impacts on the bottom line in the form of real estate savings.” WORKshift is already recognized for their work in Calgary and Bews has become an expert in the field and frequently speaks at national and international events. In 2013, expect to hear more about WORKshift as it expands beyond Calgary to bring the work-life integration movement and WORKshift certification to other Canadian cities. Visit workshiftcalgary.com for updates.

IN 6 0 20 W 0 D 13 TH ILL IV , M CO E C ER OR CE N CA ON SE E NT VE LG NE GR TH RE NT AR CT OU AN IO Y A P N TE T S LU S

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david Parker • MarketingMatters

MarketingMatters ••••••••••••••

BY daVid PaRkeR

ax Partnership kicked off 2013 in splendid fashion with recognition by Luerzer’s Archives and Applied Arts, the German creative resource for advertising professionals worldwide, with Print Ad of the Week status for its Farmers’ Market campaign. Wax creative director Trent Burton was faced with the task of letting people know that the market was open for business during the winter months and he produced a series of whimsical print ads using a pig, a rooster and a cow as snow angels. They were sculpted three by four feet in sand and then photographed above an Open All Winter line leading into the Calgary Farmers’ Market logo. And design director Monique Gamache is heading over to London in April. She has been invited to be a judge at the prestigious D&D Awards that are recognized as a symbol of true creative achievement in design and advertising. •••••••••••••• Big news from Arlene Dickinson and her team at Venture Communications is the appointment of Jennifer Lightbody as president of the company. She moves here from Seattle where she was chief of staff at Possible, a global digital agency where she managed strategic priorities and business operations for the 1,500 staff in 32 locations. Wendy Ell, who worked on a public relations consulting basis for AdFarm for some time, left to take a permanent position with Venture as client marketing director with the added responsibility of the firm’s public relations.

Lisa Stone has left CH2M Hill to join Edelman Canada – that boasts of being the world’s largest public relations firm – as an account manager. Edelman officially launched its Calgary office in January 2011, the fourth in Canada and the 66th worldwide, under the leadership of Tanya Anand, vice president and managing director here, and Patti Schom-Moffatt, Vancouver-based general manager of both western offices. Anand relocated to Calgary to open the office here after nine years in the Vancouver office that has grown to one of the largest PR agencies in Western Canada, serving key accounts in areas such as energy, consumer, construction and technology. The Calgary office has also been strengthened with the addition of Michael Lawrence, most recently manager of corporate reputation at Suncor Energy, as vice-president, corporate and public affairs. •••••••••••••• Escaping the Calgary winters for some time to come is Mona Gauvreau, vice president at Hill + Knowlton Strategies. She has accepted an exciting new position as general manager of Hill + Knowlton’s office in Dubai where she will be responsible for a staff of 35 who have clients throughout the Middle East. And in other news coming from the firm – a leader in both public relations and public affairs – it is good to see that Goldy Hyder, who was general manager of its Ottawa office, has been appointed president of the Canadian operation. Hyder grew up in Calgary, graduated of University of Calgary and worked with the family insurance business before moving to Ottawa to become director of policy and chief of staff for the Rt. Hon. Joe Clark.

110 • February 2013 BUSINESS IN CALGARY | www.businessincalgary.com

•••••••••••••• Tom Donoghue must be able to claim the title of Calgary’s most travelled public relations practitioner. Much of his practice is international. He has worked in 31 different countries for clients so far in his career and will notch up number 32 and number 33 later this year when he visits South Korea and Mexico. In 1998 Donoghue helped found Worldcom Public Relations Group, based in Rochester, N.Y., and now the world’s largest independent partnership of PR firms. He was recently elected to the Americas region board of directors that covers all of North and South America as well as the Caribbean. •••••••••••••• Alexis MacKenzie, vice president communications and marketing at Alberta Beverage Container Recycling Corporation (ABCRC), after conducting an RFP process to search for a new advertising agency, has awarded KARO a contract as its Agency of Record. Karo continues to provide winning creative for its clients. Its Pathways publication for Syncrude received platinum MarCom 2012 Awards in both the Annual Report/Social Responsibility and Magazine/Corporate categories.

Parker’s Pick: I loved the flock of fanciful goat cards that Sasges gave out to their clients for Christmas, celebrating the design firm’s purchase of four pairs of goats from Oxfam Canada’s Goat Loan program.

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