CANADIAN CONTRACTOR March/April 2014

Online Marketing

Steve Maxwell

Geothermal Heat

page 30

page 39

page 47

Fire Your Web Guy

Stuff We Like

CANADIAN

Cost Effective

THE MAGAZINE FOR PROFESSIONAL RENOVATORS AND CUSTOM HOMEBUILDERS

W H AT

YOU

EARN SALARY SURVEY

.ca .ca

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CONTENTS

Illustration: Glenn McEvoy

CONTENTS

features 18

Salary

COVER STORY

Survey

What You Earn 18 Compare your take home pay, gross sales, profit, marketing presence, types of employees and more in our Salary Survey.

What They Earn 26 The U.S. housing industry is emerging from the finance-driven crisis of six years ago.

Creative Eye

Sean Keane: Suing the WSIB for $6 million

32

The Creative Eye 32 Photographic tour of a Gatineau Hills dream home in Cantley, Quebec.

Geothermal Heating 47 Contractors may be surprised by this analysis of geothermal’s affordability.

n.

departments Online 6 Mike Upshall on “Making Your Business Scaleable”; Mike Draper on “Managing Your Customer’s Emotions”; Swati Mylavarapu of Square Inc. on “Solving a Cash Flow Crunch.”

47

Geothermal Heating

Editorials 8 Rob on three financial indicators; Steve on one uncomfortable truth.

www.canadiancontractor.ca

March/April 2014

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CONTENTS

CONTENTS

Western

16

Boom

departments

Eco-

Voices 10 A selection of reader posts on our website from the past month, including trade union ecstasy over the Ontario College of Trades – while western contractors urge their eastern cousins to kick the bums out.

portables

Site Notes 16 Ontario contractor Ben Polley launches moBEE eco-portables for schools. Why Alberta will lead the construction industry.

16

Online Marketing 30 Fire your web guy! Ramping up your online presence without having to do it yourself.

Maxwell’s Stuff We Like 39 Steve Maxwell looks at a warm floor system from Schluter.

Also, a great Canon camera to archive your work; and Milwaukee’s M12 FUEL Impact and Drill Driver.

Bureaucrat of the Month 54 Ron Lemieux, Minister of Tourism, Culture, Heritage and Consumer Protection, Province of Manitoba.

Stuff

We Like

39

www.canadiancontractor.ca

March/April 2014

5

ONLINE CANADIAN

ONLINE @

Visit us online

CONTRACTOR to join the conversation that almost 22,000 contractors are having

.ca

VIDEO

MAKING YOUR BUSINESS SCALABLE Mike Upshall, president of Probuilt by Michael Upshall, has grown his renovation business to where he is consistently seeing gross incomes of $2 million per year or more. In this video, he tells Canadian Contractor how he sees 2014 shaping up and what it takes to structure your business for growth.

Type “Michael Upshall” in the search bar at canadiancontractor.ca to find this video

VIDEO

MANAGING YOUR CUSTOMERS’ EMOTIONS DURING A JOB Mike Draper, head coach for Renovantage, says managing how your customer feels after the initial excitement wears off is key to maintaining good customer relations and excellent referrals.

Type “Coaches Corner” in the search bar at canadiancontractor.ca to find this video and others from the Coaches Corner series

VIDEO

ONE WAY TO SOLVE A CASHFLOW CRUNCH Cash is king, especially when you are having a hard time collecting it from your customers. Swati Mylavarapu of Square Inc. tells Rob Koci how her company’s add-on device works to ensure you get paid right away for the work you do.

CANADIAN

Type “Square” in the search bar at canadiancontractor.ca to find this video

CONTRACTOR.ca BUILD | GROW | PROFIT

Volume 15, Number 3 March/April 2014 canadiancontractor.ca | Tel: 416 442 5600 |

Editor: Steve Payne spayne@canadiancontractor.ca

80 Valleybrook Drive, North York, ON, M3B 2S9

Contributing Editors: John Caulfield, Brynna Leslie, Steve Maxwell, Michael Strong

Canadian Contractor, established in 2000, is published 6 times a year by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd.

Art Director: Mary Peligra mpeligra@bizinfogroup.ca

ISSN 1498-8941 (Print) ISSN 1929-6495 (Online)

Publisher: Rob Koci rkoci@bizinfogroup.ca Production Manager: Gary White gwhite@bizinfogroup.ca

Business Information Group

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March/April 2014

Circulation Manager: Beata Olechnowicz bolechnowicz@bizinfogroup.ca

www.canadiancontractor.ca

BIG Magazines LP Corinne Lynds, Editorial Director Tim Dimopoulos, Executive Publisher Alex Papanou, Vice-President of Canadian Publishing Bruce Creighton, President of Business Information Group Subscriber Services: To subscribe, renew your subscription or to change your address or information contact us at 416 442 5600 x3547 Subscription Rates: Canada $45.95 per year, Outside Canada $83.95US per year, Single Copy Canada $9.95.

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Contents of this publication are protected by copyright and must not be reprinted in whole or in part without permission of the publisher.

Publications Mail Agreement No. 40069240 We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage.

EDITORIALS

Voices

PROFIT, CASH FLOW AND RETURN ON INVESTMENT

By Rob Koci

“S

hould I even be in this business? Would I be better off selling my tools, putting the money in a GIC and serving customers at my local hardware store?”

These questions sound terrible, but every contractor has asked themselves questions like this at one time or another. The following three accounting indicators will help answer them.

Net Profit (NP) Net profit is a ratio of your income versus your expenses. If it takes you $500,000 to run your business (including all costs) and your gross income is $750,000, you are making a NP of 30 per cent ($250,000 is 30 per cent of $750,000).

Operating Cash Flow (OCF) Operating cash flow is the amount of money you have on hand at any given time to pay your bills.

”

You need to know these three numbers.

”

Rob Koci Publisher

rkoci@canadiancontractor.ca

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March/April 2014

www.canadiancontractor.ca

Return on Investment (ROI) Return on investment is the ratio that tells you the amount of money you earn on your investment of money, tools, trucks and time in your company.

All of you are probably familiar with these indicators, and you all have a favourite, but remember, they don’t stand alone. If you are on the positive side of NP or ROI but your cash flow is negative, you are going out of business. If you have good cash flow but your investment is not making money, you are wasting precious resources. If you have cash, but NP is negative, you will eventually go out of business that way, too.

Use the information in this salary survey issue as a catalyst for evaluating indicators like these. Step back a bit, see what your peers are earning and consider your own business. With attention and thought, every problem is fixable. There are clues here to the success of your business. Find them. Apply them. Prosper.

EDITORIALS

Voices

AN UNCOMFORTABLE TRUTH ABOUT WHO YOU WORK FOR

By Steve Payne

T

he median pay packages for the home improvement contractors who completed our sixth annual Salary Survey questionnaire

are detailed in this issue, starting on page 18.

If you are a self-employed contractor, what is it that has the most impact on how much money you take home? The state of the economy in your local market area? The type of trade you specialize in? What exactly is it that determines your paycheque?

I’m going to hazard a guess that something much, much larger than any of the above is a significant factor in moving you up or down the pay scale of your own trade – presuming you have some control over the type of work you do, who you do it for, and how well you do it.

I believe the biggest factor in financial compensation in our industry is an “intangible”: It’s what you are, and are not, prepared to accept from homeowners, clients and employers.

The Pygmalion Effect, a scientifically-proven predictor of human performance, says that greater the expectation, the greater the performance. This applies to sports, to business, to all kinds of human endeavour. The Golem Effect, the opposite, says that lower expectations lead to lower performances.

The expectations I am talking about here? Expectations about

”

Holding ourselves accountable for who we work for isn’t fashionable.

”

your customers!

In our industry, there is a wide range of work available to you – from barebones rush-jobs for meager pay for clients you can barely stand to work for, to lucrative and high-quality work for well-chosen clients who deserve your best efforts.

The only person who can ultimately decide what kind of

Steve Payne Editor

spayne@canadiancontractor.ca

contracting you are doing, for whom, is you. Holding ourselves accountable for the type of people we work for isn’t fashionable these days. But it’s liberating. www.canadiancontractor.ca

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VOICES

ONTARIO COLLEGE OF TRADES Since our last issue, the Ontario College of Trades (OCOT) has taken another step toward adding more contractors into its revenue streams by announcing that carpenters will be reviewed for compulsory status. Odds are, the review will recommend that, yes, carpenters have to pay to join the College. Any Ontario tradesperson in a category deemed “compulsory” must, by law, pay OCOT’s $135.60 annual invoices or lose their Certificate of Qualification (already earned, already paid for). If you don’t pay up, you will find your noncompliance announced for all your customers to see on their publicly-searchable website.

Predictably, our comments field on our website (canadiancontractor.ca) has been lit up daily with angry posts from self-employed contractors who are sick of what they feel is a cash grab.

Carpenters will now almost certainly join electricians, plumbers, sheet metal workers and refrigeration and air conditioning mechanics – in our industry alone - who are now part of OCOT’s over 100,000 tradespeople finding out that their Certificates of Qualifications are now being held to annual ransom.

Here’s a peek into our College of Trades mailbag, both for and against.

A visit from the College of Trades enforcers I had the privilege of seeing our hard-earned money at work the other day with regards to the College of Trades. Brand new truck, two inspectors – a woman and a man – walking through a job site hassling everyone for their C of Q cards. I feel much safer knowing that people who do not have clue about the construction industry are making sure we are all safe. Oh, did I mention their pretty uniforms? I put a cost of about $200,000 a year (for the two employees) walking around that day, allowing for wages and benefits, truck, uniforms, etc. My men had to stop work and go to their vehicles to get their cards (before they would be allowed) to continue working. I figure I lost about two man-hours of work. Who is covering that cost? Maybe they should have to wait outside the construction project to request the cards from the workers leaving the site? Do these inspectors 10

March/April 2014

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have all the proper training that is required by every other trade to be on a construction site?

Regards, “About to give up!”

Michael Gray Posted at canadiancontractor.ca

Headed to Alberta to avoid the cash-grab I paid for my (Ontario College of Trades) ticket this year and it will be the last: I am headed to Alberta this summer to write and get a new license. Yes, it will cost me $450 but it won’t be to OCOT. For me it’s not the $120 dollars (plus HST) it’s the damn letter welcoming me to their cash grab and the stamped certificate showing me as a member.

I am being bullied into paying for their project and they are taking away my right to privacy by publishing my name without my consent. Why not only publish the bad apples and go after them? The OCOT is only going to push more people underground.

I have worked in Alberta before. They cater to the trades there because they seem to have an understanding that we keep it all going. KIDS, GO OUT WEST AND GET YOUR TRADE! Robert Posted at canadiancontractor.ca

Self-employed plumber embraces OCOT As a self-employed plumber, I embrace these changes. We have plumbing companies who operate in the Toronto area who employ, as an example, painters or bartenders. They slap on a company logo and stick them in a truck to snake and repair drains and thaw and repair pipes – all of which takes away from licensed plumbers. Why are these companies allowed to conduct business?

If the Ontario College of Trades wants to make a level playing field, all plumbing should be enforced and conducted by licensed or apprentice plumbers. Those salespeople I referred to, which is all they are, are stealing work from licensed individuals. What’s the point of going through 9,000 hours and five years of an apprenticeship if a bum off the street can get into a company truck and snake and repair “plumbing systems” and make the same money a licensed plumber would make?

Edward Posted at canadiancontractor.ca

VOICES

A reader relpies to Edward

“3,500 brothers” in HVAC union declaring “open season on bad guys” Amen to that Edward! It’s the same problem in my HVAC & R trade. It takes at least five years, seemingly endless night classes and three full-time stints at college to get your Certificate of Qualification and Certificate of Apprenticeship, plus additional time for the applicable fuel licenses. Post C-of-Q training is ongoing for the length of your career.

The Greater Toronto Area is full of illegals in our market with nothing more than a G2. In our world that is referred to as a “BBQ mechanic license.” TSSA (Ontario’s Technical Standards and Safety Authority) leaves them alone as long as they have the G2. Our trade is expecting to see their heads roll.

At least that is what OCOT is promising. We are willing to pay what amounts to about three hours of pay per year to see this happen. If any G2s out there don’t understand this, I have about 3,500 brothers and any one of them would be willing to explain it. After having our trade messed with for so many years, the current attitude is “open season” on the bad guys.

Joe Posted at canadiancontractor.ca

trades that were not included in the existing WSIB legislation would eventually be forced into the system. This happened, as we know, with Bill 119 because the WSIB is a governmentlegislated entity so poorly managed that they would rather create legislation to protect it rather than do what should be done.

Herein lies our Ontario government. A government which, combined with the NDP, seeks only to protect its cronies: the public sector unions and the teachers. The rest of us are saddled with the ever-growing taxation that will eventually destroy, as it has manufacturing, every other private sector business in the province.

Look at the Ontario Ministry of Labour and its portfolio as just one example of what we pay for: the Ministry itself, the Office of the Employer Adviser, the Office of the Worker Adviser. Then look at such entities as the Ontario Fairness Commission, the WSIB and its many divisions – and now add in the Ontario College of Trades. One only need do the math, rather than get to the core of the issues... The next will be an oversight committee to investigate why this is all failing.

Here is a new one to ponder: Ontario Bill 69, also known as “prompt payment” legislation. The legislation is designed to finally afford trades and suppliers some form of protection we

ONTARIO’S WSIB: HUNTING FOR 80,000 NEW PAYEES In our last issue, we gave you an update on drywall contractor Sean Keane’s ongoing lawsuit against the WSIB. Keane is seeking $6-million in damages from Ontario’s workplace insurance monopoly for, he claims, forcing him out of business as an independent operator. We have received almost daily posts about Ontario’s Bill 119 since it came into effect on Jan. 1, 2013. The legislation was designed to force another 80,000 contractors – including vast numbers of self-employed, small-time contractors – to pay WSIB premiums ranging from about 8 to 15 per cent of their incomes (depending on their trades). Let’s start off with a post from Sean Keane himself.

(Keane’s website is www.wsibdefence.ca.)

lost over the years. It is supposed to set guidelines on how we get paid and to ensure we do get paid. For the first time in a long time, trade unions have backed business and agreed to support this legislation – a great revelation. Here is the shocker: Municipal councillors as well as a teachers association just announced they don’t like the legislation and are against it. That blows my mind but brings me back to one conclusion: The Government has long considered us trades people as brain dead Neanderthals, a group from which they can take any advantage they want. And they have been successful so far. Now it seems that teachers and municipal councillors see us in the same light.

If there was ever a time we need to stand up it’s now. The problem is that we have no cohesive tool to use. The last (antiWSIB Bill 119) rally at Queen’s Park in February last year yielded a couple of hundred trades which did not include many from Toronto or the surrounding area. The question is why. The

“The Government has long considered us trades people as brain dead Neanderthals”

Toronto media simply chose to ignore us and concentrated on

As was mentioned months ago, the WSIB was running a (multibillion dollar unfunded liability) deficit. (We all knew that) those

media coverage from Ottawa, Hamilton, London, etc… and as

the strife of teachers inside the legislature. There was more far away as Quebec. We got a 10-second blurb on CP24, 680 www.canadiancontractor.ca

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VOICES

News… and nothing from CFTO. The media that did not cover us has a major advertising client: the Ontario Government. So what does that tell you? The stories we discuss in magazines such as this are left alone. No Toronto Sun, no Toronto Star and no Globe and Mail. Does that not seem strange? Let’s all cancel our subscriptions to these entities: Advertising only works if people buy these papers.

Sean Keane Posted at canadiancontractor.ca

“What sense is there in trying to be your own business?”

I find it ridiculous that an independent operator (i.e., sole proprietor without any workers) is mandated to pay a government-owned and -operated insurance company like the WSIB to cover his only worker – who is himself/herself. It makes me wonder where capitalism ends and communism begins. Bill 119 is crazy Liberal and NDP left-wing policy at its finest. What sense is there in trying to be your own business? As far as the current Ontario government is concerned: NONE! Joe Posted at canadiancontractor.ca

Ontario and Quebec are still, against all good wisdom, the central political force in this country. All the tainted politicians live there and hunker down with their fat pay-offs. Every city and county in these two sad, dinosaur provinces know how much they are losing in revenue due to dishonest trades and contractors. Where can they go to collect but to the honest construction professionals who actually apply for permits?

Quit complaining about your rotten politicians living off your backs and do something as a people to create a vibrant economy based on enterprise, not politics.

Out here, on the Prairies, we’ve been suffering your unskilled construction criminals for a few years now. The number of Western homeowners getting ripped off by Eastern “trades” has been increasing exponentially. The amount of work that is now required to fix this disease is just sickening.

Some of these guys are so polluted they actually have a decent attitude and believe they are doing good work – while they leave behind them a long list of deficiencies, presenting (homeowners) with a bill for extras and threaten a lien.

Brian Posted at canadiancontractor.ca

“Easy to be a self-employed tradesperson in Alberta” CONTRACTING IN THE WEST: IT’S GOOD OUT HERE We have spent a lot of time covering Ontario’s WSIB and College of Trades controversies. We thank our readers outside of this region for their patience. Out West the state of the industry appears very different. Workplace insurance is reasonably priced, there is plenty of work, and the regulatory atmosphere is more relaxed. Here are a couple of posts from Alberta contractors who wonder why their Eastern counterparts don’t either start speaking up or, if they are not prepared to do so, move West!

“Quit complaining about your rotten politicians and do something, Ontario and Quebec!”

I’m going to be brutally honest here because it’s simply a matter of recognizing and finally stating the obvious: Ontario is broke.

Large populations in Ontario and Quebec, along with Quebec’s propensity towards confusion and mafia culture, have created a construction workforce that breeds rip-off artists like a flu bug.

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In Alberta, we currently do not have the type of requirements being put forward by Ontario. There are no guarantees that bureaucrats here will not follow Ontario’s lead, but currently, it is fairly easy to be a self-employed tradesperson in Alberta.

In terms of structural issues on new construction, would not the local building inspectors ensure the homes are properly built? Is that not their job? Seems unnecessary to add another level of government for that purpose.

We have a huge demand for skilled trades in Alberta. You are welcome here! The weather is cold in winter, but if you can handle it, the rewards are great!

Dwight Kuhn Posted at canadiancontractor.ca

BUILDING WITH STRUCTURAL INSULATED PANELS (SIPS) Although we’ve covered the wonderful world of structural insulated panels (SIPs) a few times in recent years, they are still

VOICES

an unknown quantity for the vast majority of builders. Though we don’t have room here to expand on their benefits, here’s a short discussion online that argues for their use…

my experiences for whatever they’re worth. Take care, Steve.

Steve Maxwell Posted at canadiancontractor.ca

“Should I used SIPS or stud-frame construction with spray foam?”

MONTREAL CHARGES LE PLATEAU RENOVATORS A 10 PER CENT ‘PARKS FEE’

I’m thinking of building a passive house in Ontario north. I already have a passive house plan, which instructs me to insulate (the studs) with foam. However, I’ve been researching SIPs and I’m confused which is a better option. Is it a good idea to switch from (studs and) spray foam to a SIP system? I am also worried about bureaucratic challenges.

Eva Posted at canadiancontractor.ca

Plateau Mont-Royal, an upscale neighbourhood in Montreal, decided in November to charge homeowners a ‘parks fee’ of 10 per cent of property values if they renovate more than 35 per cent of their homes. This was allegedly to stop renovators from changing the “heritage” character of the neighbourhood. A reader commented and Montreal councillor Alex Norris replied.

Councillor Norris’s statement is “stupidity” A reply recommending SIPS… Hi Eva: Many SIPs that we use here (Pinwheel Building Supplies, St. Catharines, ON, which specializes in passive house materials), use foam as well. A SIP would just be a prefabbed wall unit with structural integrity. Are you looking at SIPs that don’t use foam? The following is my opinion: If I have to choose the lesser of two evils (I’m going to get a lot of flack for saying this), I would pick foam that is made in a controlled factory environment, and not the one made on-site (read: spray foam). Spray foam may have its place in certain retrofit applications, but for new builds I’d always use factory-made foam. This will reduce off-gassing as well as possible dilemmas from wrongfully installing it. (Spray foam) also loses some of its effectiveness over time and may not be 100 per cent air-tight over its life.

Hans Eich Posted at canadiancontractor.ca

... and another vote for SIPS from Steve Maxwell Hi Eva: I’ve built with both SIPs (expanded polystyrene foam sandwiched between 7/16” OSB) and spray foam applied to stud frame construction, and there’s no comparison. The SIPs are faster to build with; they have much less thermal bridging; they’re easier to build for low air infiltration; and they yield a substantially stronger structure than studs. Spray foam is great in many applications, but I’m not aware of any better way to make walls, gables and even roofs than with SIPs. These are 14

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Quebec is famous for its sensational tabloids. I’m stumped as to why I didn’t see Alex Norris’s picture on a front page in the grocery line up, riding an alien space ship into our airspace.

He actually stated that “I only think its fair that the city gets some of this new wealth” (when renovators improve the value of these properties). I am guilty of lending credence to this stupidity by commenting on it.

Tim Goforth Posted at canadiancontractor.ca

Reply from Councillor Norris A new bylaw with a clearer definition of what constitutes a demolition had to be introduced because we were witnessing many “disguised demolitions,” in which contractors took advantage of vague language in the previous bylaw to demolish most of a building, sometimes leaving it so weakened that the entire thing had to come down. We are not talking about standard renovations here, but rather extreme makeovers of buildings in which so much of them comes down that it constitutes a de facto demolition. As for park fees, we are hardly the only Montreal borough that charges them... Less than half of 1 per cent of renovation/construction projects on the Plateau are so extensive as to legally constitute a demolition. A handful of projects have been affected by the combined effect of the new demolition bylaw and park-fee provisions — fewer than six projects altogether.

Alex Norris Posted at canadiancontractor.ca

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SITE NOTES

Brand of eco-portables launched by Ontario builder for scholastic market

such as naturally anti-microbial linoleum flooring, mineral based paints, energy-minimizing warm-white LED lights, high efficiency fiberglass window frames among many carefully selected features.

Alberta will lead the Canadian construction industry in the next decade Mostly as a result of continued expansion of oil sands projects, Alberta is expected to lead the demand for skilled and specialized labour in Canada according to a recent study conducted by BuildForce Canada. The study, BuildForce Canada 2014-2023 Construction and Maintenance Looking Forward, says Alberta will need approximately 45,000 workers simply to replace the 22 per cent of workers set to retire in that province over the next decade.

“Alberta’s skilled labour requirements far exceed those of other provinces, and that makes building a strong, permanent workforce a must,” said Rosemary Sparks, executive director of BuildForce Canada, in a news release. “There’s a real need to continue promoting skilled trades careers as well as ensuring training and retention programs are sufficient to support the next generation of workers.”

A unique portable classroom that merges straw bale building and other natural building techniques with state-of-the-art construction technology was launched Ontario-wide in March as a standalone product line by award winning green builder, Evolve Builders Group Inc. Dubbed “mobEE” – mobile eco-enclosure – the product was originally developed in conjunction with the Facility Department of the Upper Grand District School Board. The first prototype was delivered to Rockwood Public Centennial School in 2010 while the most recent awaits class at Westwood Public School in Guelph. Constructed in Mount Forest, ON, and now deliverable across the province, mobEE provides premium, permanent-quality space at a fraction of the cost of a school addition and earns plaudits from all stakeholders.

“We saw a straw bale insulated portable as a natural extension of our Environmental Learning Centres” says Paul Scinocca, Operations Manager, UGDSB, and early proponent of these alternative structures.

In addition to walls constructed with straw bales, mobEE integrates healthy, sustainable and efficient components 16

March/April 2014

Residential renovation will not be left out of the growth, according to the study. Commercial and industrial construction will certainly drive expansion but, residential construction spending and employment will exceed the 2007 peak, with a rise in renovations and repairs.

Go online for breaking news www.canadiancontractor.ca 55,000 page views monthly

www.canadiancontractor.ca

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2014 SALARY

his is the sixth year that Canadian Contractor has surveyed its contractor readership to get some basic statistics on who’s earning what, how big your contracting firms are (if you’re self-employed), how much you are

marking up your work, what kind of gross margins you are generating, and lots more. This year, we had a near-record number of respondents (384 contractors) representing firms that went over $3-million in annual revenues (35 such outfits),

SURVEY

while also getting responses from tradesmen running small businesses billing less than $50,000 annually (19 such individuals).

Reflective of our readership of over 31,000 residential contractors, our OutRank Salary Survey contains responses from renovators (48% of responses), custom homebuilders (21%), tradespeople (13%) and repair and service technicians (9%).

61% of our respondents operate in Ontario, 15% in B.C., 11% in Alberta, 6% in Saskatchewan and Manitoba, and 7% in Quebec and the Atlantic Provinces.

Once again this year, we would like to thank Carrie Shaw and her team at OutRank

by Rogers for their sponsorship and research assistance. OutRank specializes in helping businesses to get their companies higher up the list of Google (and other) searches through search engine optimization (SEO).

There were 33 questions on this year’s Salary Survey and we’ll get around to

>>

publishing all of them in due course. For this issue, we’ve picked the 14 questions

that we think will help you understand “how you measure up” against renovators

what you

and builders across Canada.

EARN

The 6th Annual Salary Survey

In which we take the pulse of renovators and custom homebuilders from coast to coast, to see who’s charging

what, who’s making a decent buck, and where the money is flowing in this wonderful, frustrating, profitable, exhausting, inspiring. . . and ultimately exciting industry.

By Steve Payne

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March/April 2014

www.canadiancontractor.ca

>

2014

TAKE HOME PAY

SALARY

Half of you make more than $69,550: putting you $20k above the Canadian median salary

SURVEY

It’s hard work being a contractor, but it’s a lucrative profession compared with how most Canadians earn a living. Our 6th annual salary survey, conducted over the first three months of this year and based on 2013 reported incomes, tells us that our Canadian Contractor readers’ median annual pay (half the respondents make more, half make less) was approximately $69,550. This compares to the median Canadian wage of $48,250 as reported by Workopolis. And year-over-year, our 2013 survey respondents made more money than similar respondents in 2012: 44% of you reported taking home $75,000 or more in a year, compared to just 40% of you who reported exceeding $75,000 in 2012.

A healthy quarter (27%) of our respondents made more than $100,000 a year.

How much did you personally take home?

15%

Under $30,000

21%

$30,001 - $50,000 $50,001 - $75,000

17%

$75,001 - $100,000 $100,001 - $150,000

11%

20% 16%

Over $150,000

What were your company’s estimated total gross sales for 2013?

$$$

GROSS SALES

The median gross sales you reported last year was $596,000

The median total gross sales for the renovation and homebuilding firms completing our survey was approximately $596,000. More than a third of these firms (38%) billed more than $1-million last year; and 12% of them billed more than $3-million. Still, there were some very small firms – presumably odd-jobs driven: 14% of respondents billed less than $100,000 a year. Back to that median number: it’s clear that with a median contractor’s salary of $69,550 and with a median gross sales of $596,000, individual contractor salaries are running at almost 12% of gross.

Under $50,000 $50,001 - $100,000 $100,001 - $250,000 $250,001 - $500,000 $500,001 - $1,000,000 $1,000,001 - $3,000,000 Over $3,000,001 www.canadiancontractor.ca

7% 7% 16% 17% 15% 26% 12%

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2014 SALARY

Less 16%

About the same 48%

SURVEY

Looking at this current year, more Do you expect to take home more or less money this year?

than a third of you (36%) expect to do better financially this year than you did last year. This is more than twice the number of respondents (16%) expecting to make less money.

GROSS SALES INCREASE

More 36%

56% of you reported increased sales in 2013

GROSS MARGIN %

BY SIZE OF JOB

We suspected, based on the stories you were sending us from the field, that 2013 was a much better year for contractors than 2012 – and our survey results confirm that. 56% of you reported increased gross sales in 2013, while only 30% of you reported a decrease in sales.

14% of respondents reported no change in gross sales.

The bulk of your gross margins are falling in the 20% to 30% range on jobs of various sizes.

What percentage increase or decrease in gross sales did you have last year?

20

Gross margin is, of course, your percentage of gross profit in a job (amount billed minus direct job costs such as materials and labour, divided by amount billed). We asked you to tell us what gross margin you would estimate to make from four different sizes of job (from “below $10,000” up to “over 100,000”). More than half of your reported gross margins fall in the 20% to 30% range for jobs of various sizes. As for the 2% to 8% of you estimating to make ZERO gross margin on various-sized jobs (in the first column) we just have to assume you have another source of income, somewhere.

0-5% increase

9%

5-10% increase

14%

10-15% increase

10%

When estimating jobs in the following ranges, how much is your gross margin?

15%+ increase

23%

Gross Margin 0%

No change

14%

Jobs below $10,000

2%

14%

30%

26%

18%

10%

0-5% decrease

7%

$10,001 - $50,000

4%

18%

36%

28%

11%

4%

5-10% decrease

6%

$50,001 - $100,000

7%

22%

43%

20%

6%

2%

10-15% decrease

5%

Over $100,001 8%

31%

39%

15%

5%

2%

15%+ decrease

12%

March/April 2014

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10%

20% 30%

40% 50%+

2014

25% - 50% of sales 10% - 25% of sales

2%

2%

SALARY 50% or more of sales

1%

CASH WORK

SURVEY

Almost 3 out of 10 of you are doing some cash work.

Up to 10% of sales

What % of your sales comes from cash jobs?

2%

Zero cash sales

71%

In this year’s survey, 71% of you are still completely avoiding cash work, up slightly from the 68% who didn’t want to deal in cash last year. Still, even for contractors that are taking cash, it’s a minor part of your income. For example, this year only 5% of you reported doing more than ten percent of your work for cash.

(We acknowledge the built-in bias that will minimize the underground economy in our survey each year. Many of you clearly won’t want to go online and admit you are working for cash.)

MARK-UP BY SIZE OF JOB Mark-ups between 1.2 and 1.3 are most common, across all sizes of jobs

For small jobs (under $10,000), more than half of you are marking up your work at least 30%. For jobs over $100,000, 6 out of 10 of you are going with very restrained mark ups between 10% and 20%.

Remedial estimating lesson: A mark up of 1.1, or 10%, leads to a gross margin of 9%. A mark up of 1.2, or 20 per cent, leads to a gross margin of 17%. A markup of 1.3, or 30 per cent, leads to a gross margin of 23 per cent. Gross margins are always less than mark-ups.

Illustration: Glenn McEvoy

For completed projects in the following ranges, how much mark-up do you apply?

Mark up 1.1

1.2

1.3

1.4

1.5

1.6

1.7

1.8

Jobs below $10,000 15

21

24

13

13

6

1

1

$10,000 - $50,000 16

27

23

13

15

2

2

3

$50,001 - $100,000 21

29

22

13

9

2

1

2

Over $100,001 29

31

19

9

8

0

1

3

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2014 SALARY

11-25 jobs 3%

SURVEY

25+ jobs 5%

1 job 12%

HOW MANY JOBS ARE YOU RUNNING? Nearly 1 in 4 of you have 6 or more projects on the go at a time.

Youâ&#x20AC;&#x2122;re pretty darn busy, thatâ&#x20AC;&#x2122;s for sure. Although many of our readers run sole-proprietorships, only 1 in 8 of you (12%) are only working just one job at a time. And an impressive 1 in 4 of you (24%) are running six or more jobs at once. Five per cent of you, who we think are drinking gallons of Timmies, are working on 25 or more projects at any given time.

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6-10 jobs 16%

5 jobs 9%

On average, how many jobs in progress do you have at any one time?

4 jobs 12%

3 jobs 19%

2 jobs 24%

2014

MAIN CAUSES OF INSUFFICIENT PROFIT

SALARY SURVEY

“Competitive pressure” is the number one reason for not making a sufficient profit on a job, you told us.

In this gloomy but necessary question we asked you, if you are not making enough money, what are the main reasons? The pressures of the competition were number one. “Excessive demands of the customer” was reason number two. While there is nothing that can be done about competition other than outperforming it, we wish we’d asked – for those who selected “excessive demands” of clients – whether a bulletproof contract was in place and whether change orders were being documented, priced and signed for. We bet the contract was weak or non-existent and change orders were being treated casually or not even produced.

In your experience, which of the following are the main reasons that you attribute to not making sufficient profit?

47% 34% 33% 23% 19%

Competitive pressure Excessive demands of the customer Errors in estimating Cost overruns Employee/subtrade problems

9% 7% 10%

Poor money management Problems with suppliers Other

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23

2014 SALARY

WHAT’S GIVING YOU GRIEF?

SURVEY

Marketing is giving you the most difficulty as a contractor, the survey says

This is probably because marketing is the one business task that doesn’t have a “right” and a “wrong” way to do it. And the Internet has ripped apart the rulebook on how and where to get publicity: the Yellow Pages and word-of-mouth just don’t cut it any more. The good news to this “grief” list below is that, with one exception, your average ratings of difficulty on the following tasks were still all less than 2.5 out of 5, where 1 was rated “little difficulty” and 5 was “lot of difficulty.”

Using a scale of 1 to 5, rate how much difficulty you have personally had with each of the following. . .

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Marketing

2.24

Estimating

2.00

Administration

1.93

Accounting & finance

1.90

Employees/ subtrades

1.90

Project management

1.84

Customer relations

1.73

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2014 SALARY

WHAT TYPES OF MARKETING DO YOU DO?

SURVEY

More than half of you are now doing website marketing: the first year online contractors have exceeded 50 per cent.

“Word of mouth” is still the most common “marketing” method used

by Canadian contractors. (Although, as Mike Draper has argued in these pages, unplanned, happenstance “word of mouth” marketing isn’t really marketing at all. Asking for referrals, which is closely related to “word of mouth,” is vastly more effective.)

After that, the humble job site sign – as well as truck signage and uninforms – still has an important role to play. Print advertising has now slid down the list to 4th place, at least when it comes to marketing a local contracting firm to homeowners.

What types of marketing do you do?

Word of mouth

68%

Site advertising

Web advertising

37%

93%

55%

Print advertising

Trade show

18%

18%

Ad words

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March/April 2014

25

2014 SALARY SURVEY

South of the border, residential

construction rebounds Six years after the beginning of the housing finance crisis that devastated homebuilding, many American builders are now facing shortages of labour

By John Caulfield

S WHAT YOUR AMERICAN COUNTERPARTS EARN U.S. builders are paying their employees more to keep them in the fold Base Salary % change 2009-2013

Base Salary 2013

24.1%

Architect

$87,100

18.9%

Closing supervisor

$59,900

16.0%

Purchasing agent

$68,800

14.9%

Project manager

$97,400

12.8%

Title officer

$59,000

10.1%

Mortgage underwriting specialist

$70,700

5.2%

Construction superintendent

$65,700

4.4%

Construction manager

$97,000 Source: FMI

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March/April 2014

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ince the U.S. housing finance crisis began in 2008, residential construction firms in the States have had some of their leanest years in decades. But now, at long last, there is a tangible recovery under way in residential construction south of the border.

The country added 48,000 residential building jobs in January, the most for a month in nearly four years. Those hirings brought that job classification’s total to 613,100, 8.5 per cent more than the same month a year earlier.

Residential specialty trade contractors—such as painters and electricians—also increased 4.7 per cent to 1.4 million.

America’s housing industry needs every worker it can muster to meet lofty projections for construction and renovation activity. Industry watchers think new-home starts could approach 1.2 million units in 2014, after jumping 18.3 per cent to 923,400 last year, according to U.S. Census Bureau estimates. Renovation activity also should continue its upward trajectory through the third quarter of this year, when reno spending is projected to reach $153.8 billion, nearly 10 per cent higher than the same quarter a year earlier, predicts the Joint Center for Housing Studies at Harvard University.

Ostensibly, the industry’s rebound hasn’t instigated much wage inflation. The U.S. Bureau of Labor Statistics’ Employment Cost Index was up only 0.2 per cent for construction last year. In January 2014, the median hourly pay (excluding benefits) for all production and nonsupervisory construction workers stood at $24.34, only marginally higher than the $24.17 per hour in January 2013.

More part-time work But statistics mask the fact that construction job gains have occurred mostly on lower-paying residential side,

2014 SALARY SURVEY

explains Ken Simonson, chief economist with the Associated General Contractors of America. Simonson also notes that hours worked in construction have risen faster than employment, meaning that more workers are employed full time.

“There’s clearly a limit to how much you can expand hours” before labor shortages occur, and higher wages become a necessity to sustain manpower needs, he says.

Residential jobsite labour is a little thin in many markets, and builders interviewed in early February said they’ve watched as wages for contractors and subs rose during the previous 18 months by 10 per cent to 30 per cent. Builders believe their trades are trying to recapture wages they lost during the past recession. “And we’re allowing some of those increases to go through,” says Craig Thomas, vice president of development and construction for Dublin, Ohio-based Epcon Communities, which develops neighborhoods in central Ohio and the Carolinas, and has a network of 74 builder franchises in 19 states.

Wage volatility is most evident among framers and masons, observes George Murphy, president of Wayne Homes, the onyour-lot builder active in five states. “Contractors are under pressure to find workers, and hiring skilled labor is harder than hiring managers.”

“Wages are a function of volume,” says Don Dykstra, president of Bloomfield Homes, which is on track to build 700 houses in 2014 within the Dallas-Fort Worth metroplex. Last year, Dallasarea framers were scarce, and their wages increased by doubledigit percentages. But when housing demand slowed in the second half of the year, framers were easier—and cheaper—to hire.

Now there’s a shortage of local painters, Dykstra says. He doesn’t think labor shortages will affect Bloomfield’s home starts, “but they would impact the time of construction.”

In California, MBK Homes expects to start 400 apartments and 150 single-family homes this year. Its president, Tim Kane, says that escalating home prices have offset the 10 per cent to 15 per cent wage increases being demanded by pros. He’s more concerned about persistent manpower shortages in certain trades that would negatively affect MBK’s scheduling and quality control. To mitigate that risk, this spring MBK will offer contrac-

tors seven-day pay guarantees directly into their accounts in exchange for providing this builder with their best crews and wage concessions.

Lead carpenters making $48k In the renovation sector, as in homebuilding, pay cheques vary widely by region. In 2012, the consulting firm Remodelers Advantage polled 146 American renovation companies and found that the minimum and maximum hourly wages that remodelers paid their lead carpenters ranged from a low of $15.00 in the Southeast to a high of $33.06 in the Southwest. And the website Salary.com estimates that the national median annual salary for lead carpenters is $47,844 per year – again with regional variations. The national median for roofers is $32,437, $43,627 for drywallers, and $91,973 for project managers.

Retaining employees As builders grapple with wage inflation for their trades, they are also opening their wallets wider for employees, now that business conditions are moving forward again.

The management consultant FMI surveys the largest builders in the U.S. annually. Ten of the top 20 builders have provided salary information for each of the last five years. Over that period (2009-2013), architects, purchasing agents and project managers are among job titles that benefited from double-digit base-salary gains (see chart opposite).

Murphy says Wayne Homes handed out “significant raises” last year to its employees, more in base salary than in bonuses.

Kane of MBK Homes says he and his senior-level managers have all been headhunted by other builders, and he’s prepared to match competitors’ offers to keep his staff.

But holding onto valued employees isn’t always about money. Kane recalls one manager who left MBK for a position with another builder that paid him 67 per cent more money and a percentage of each project. The manager left that company after six months because “there was no camaraderie there; it was just a grind,” says Kane, who rehired him. cc www.canadiancontractor.ca

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ONLINE MARKETING 1 Canadian Contractor thanks Michael Strong of OutRank by Rogers for his assistance with this data.

Survey Results CONTRACTORS’ PREFERRED TYPES OF SOCIAL MEDIA LinkedIn used by one-third of responding contractors “Social media” is a buzzword that crops up every time advertising and marketing people talk about selling anything to anyone. The trouble is, there are no proven social media “experts” because the main players keep shape-shifting and changing.

So, where can a contractor really promote themselves in social media? Surprisingly, perhaps, in LinkedIn. It’s the most popular form of social media for contractors reading this publication: One in three of you are making use of it. Having said all this, 47% of contractors skipped this question: We’ll assume they are doing nothing in social media.

WHICH FORMS OF SOCIAL MEDIA ARE YOU USING FOR YOUR BUSINESS? LinkedIn 34% Facebook 25% Google 22% Twitter 9% Pinterest 5% Instagram 1% No answer 47%

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HOW MUCH TIME PER DAY DO YOU SPEND ONLINE FOR BUSINESS?

84% of you are spending less than two hours a day

When we interviewed Ian Szabo, the founder of Flip School (www.flipschool.ca), about what makes great contractors great, he pointed out that finding out what you really like to do – and delegating the rest – is the key. The contractors who responded to our survey, although it was an online survey, are clearly being successful at staying offline and staying on top of their projects and clients. 84% of them spend less than two hours a day online for business. Turn the page overleaf to see how to manage your web presence without spending hours a day online.

HOW MUCH TIME PER DAY DO YOU SPEND ONLINE FOR BUSINESS?

0-1 hours

41%

1-2 hours

43%

3-4 hours

11%

4-5 hours

2.5%

6-7 hours

2.5%

SPONSORED BY:

CONTRACTORS WITH WEBSITES

BY GROSS REVENUE LEVELS www.rogersoutrank.com

Contractors with an online presence tend to pull in more money This chart won’t come as a big surprise: The contractors in our survey who have websites are more likely to be seeing significant gross revenues versus the ones who are still off-line. And as we can see below, the trend is accelerating. At the “more than $500k” level, 81% of contractors had websites, up from 79% in last year’s survey, up from 42% two years ago. Things have certainly changed a lot in two years.

If your contracting business still lacks a website, given these findings, it’s probably time to get one.

DO YOU HAVE A WEB PRESENCE? Less than $250k 2011

13%

2012

47%

2013

51% have website

INCREASE OR DECREASE IN SALES BY FREQUENCY OF WEBSITE UPDATES Contractors who update their websites frequently usually see increased sales This is another survey finding that argues for contractors to not only get websites up and running, but to keep updating them once the sites are established. As shown below, 88% of contractors who update their sites approximately weekly report increased sales. Whereas only 66% of contractors who update their sites less than once a month report increased sales.

ARE YOUR SALES INCREASING?

Weekly updates

88% report sales increase

$250k-$500k 2011

5%

2012

67%

2013

68% have website

Monthly updates 72%

Less than monthly updates 66%

More than $500k 2011

42%

2012

79%

2013

81% have website

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ONLINE MARKETING 2

It’s Time to Fire Your ‘Web Guy’

4 Steps

STEP ONE Turn Your Website into a Conversion Machine

You may have hired someone to handle your online presence (your nephew, maybe?) or you might be doing it yourself, but if you’re not generating a steady stream of leads, you’re

Research indicates that you have only 15 seconds to woo a web visitor to take action (i.e., call you for an estimate) before they decide to leave and look at another website. Flashy animations and fun graphics are not the way to go here. The basics should be visible; you want to have a phone number in the top right, proper placement of your services, and clear, articulate content that speaks directly to your visitor’s search query. Your typical prospective homeowner won’t know your name or your company’s name, so they’ll be using a general keyword search; “basement renovation Toronto” or “general contractor Calgary AB”, for example.

When they click on your site from a Google search, and the 15-second countdown begins, they must land on a web page that answers their query precisely – not an ambiguous Home Page. These specialized pages are called “Landing pages” and they are critical to your success online.

missing out. The bottom line: if you need new customers, the local search volume of people seeking a renovator online is far too high for you to ignore. Here are the four steps necessary to conduct online marketing effectively and efficiently.

By Carrie Shaw, OutRank by Rogers

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STEP TWO Be Mobile Optimized Trends in mobile technology have moved well beyond fad status, with smartphones now in the hands of more than one in two Canadians. These devices are increasingly being used to conduct local searches because they are convenient and always

SPONSORED BY:

www.rogersoutrank.com

at our fingertips. Having a website that’s optimized for smartphone use is critical if you intend to find new customers online; because that’s how they’re searching for you.

With a correctly optimized mobile site, your prospects can dial directly from the landing page, which is part of the reason that mobile clicks lead to phone calls more often.

STEP THREE Get Placed on Major Search Engines (Mostly Google) Now it’s time to drive quality traffic to your website (i.e., people searching online for a contractor). The only way to get found online on day one is to go the paid click route, and that means Google AdWords.

Start by setting up a Google AdWords account and then research bidding strategies for the keywords you want to show up for. You’ll want to tailor your ad copy (the words that go in your ad) to your keywords, and direct clicks to landing pages that do the same.

STEP FOUR Measure, Assess, Repeat Now that you have a high-converting website, a smartphone optimized mobile site, and a Google AdWords platform that’s churning out traffic to your

site, it’s time to figure out what’s working and what isn’t.

For Step 4, it all comes down to implementing tracking – everywhere – so you can see the complete cycle; from the initial search, to clicking on ad copy, browsing your website, taking action and, ultimately, converting that prospect into a new customer. You need to be able to see the entire system from top to bottom, so it would be a good idea to brush up on your data-mining skills in Google Analytics, monitor your AdWords performance and implement call-tracking and email-tracking software, not to mention call-recording for quality and monitoring purposes…and make sure they’re all integrated.

Or…don’t worry about any of this All of this can be overwhelming for an already busy contractor.

OutRank by Rogers is an intelligent online marketing solution for general contractors in Canada (excluding Quebec) who recognize the importance of being online and getting it right online - so they can focus on providing quality service for their homeowners. Contact us today and we’ll connect you with a senior sales representative who will research and present market insights related to your business, allowing you to make an informed decision about how you market your company online.

Carrie Shaw is the Director of Marketing at OutRank by Rogers, a division of Rogers Communications, Inc. created to deliver online advertising services to small and medium sized businesses throughout Canada (except Quebec).

Reach our to her at info@rogersoutrank.com.

www.canadiancontractor.ca

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CREATIVE EYE

Two Storey House Gatineau Hills Cantley, Quebec Timber Wolf Developments, Builder

The use of elemental materials (glass, concrete and wood – including recovered barn boards) allowed builder Donald Thom and architect Christopher Simmonds to blend this home on the Gatineau River into its natural surroundings.

About Donald Thom Donald Thom, Timber Wolf Developments, has a reputation in the Outaouais region of Western Quebec as a custom home builder with an unparalleled breadth of knowledge and skill. He's been a builder for over 45 years.

Over the next six pages, we present one of Thom’s recent projects in the Gatineau Hills. The lower exterior panels of this custom-built, two-storey home are concrete. The weathered reclaimed barn boards help the house blend naturally into its environment.

The tempered glass panels, sourced from Kelowna, open up the structure with maximum transparency to make the most of the views of the hills behind and the river valley below.

That’s a poured concrete bench out the window in the photograph at lower right..

By Brynna Leslie

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CREATIVE EYE

Timber Wolf Developments

THE NATURAL

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CREATIVE EYE

Two Storey House Cantley, Quebec Timber Wolf Developments â&#x20AC;&#x201C; continued

On this project, builder Donald Thom and architect Christopher Simmonds knew they wanted to maximize their clientâ&#x20AC;&#x2122;s views of the Gatineau River and the mountains, building the house into the natural slope.

The team first wrapped the exterior in a UV-protective DELTA-Fassade S, which allowed them to leave a gap between the house and the wood or concrete paneling (see previous page].

The rain or snow run-off passes through the gap and drains out the bottom of the wall.

The porch was originally meant to be a screened in space. Thom recommended wrapping the porch in glass sliding doors, adding a fireplace and radiant floor heating to make it accessible year-round.

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Timber Wolf Developments

CREATIVE EYE

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CREATIVE EYE

Two Storey House Cantley, Quebec Timber Wolf Developments – continued

The details are as important as the grander scheme. In the main living area, seen here, it was Thom’s idea to drop the ceiling to hide the automated shutters.

Pocket glass panel doors divide the great room from the music room, which becomes completely sound-proof when closed.

“It was challenging to install them,” says Thom. “We had a large workforce of guys to carefully put those windows and doors in place.”

The interior mimics the exterior.

The bathroom (see above) incorporates glass and wood and maximizes forest views. The kitchen (see far right] is clean-lined and open concept, incorporating the same flooring seen in most of the house –engineered oak from Europe, hand-rubbed, oil-finished and burned with a torch.

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Timber Wolf Developments

CREATIVE EYE

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37

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anadians love warm floors. That’s why you should know how to install them well. Trouble is, unless a project includes a full-blown hydronic heating system, making warm floors happen hasn’t been easy, especially when just a small floor needs heat. All this is why a new kind of infloor heating system caught my eye.

Until now the only non-hydronic floor-heating option has been electric heating mats or free cables installed under finished floors, but I know from experience these can be a hassle to put in and fragile enough to stop working after the finished floor goes down. And tearing up a floor just to get the electric heat working again is pretty much the same as tearing up your paycheque. The new system I’ve learned about, DITRA-HEAT, is different Before I explain how it works, you need to understand something about how uncoupling membranes operate and why they’re important.

Why “uncoupling” works Uncoupling membranes were invented to increase the reliability of ceramic tiles, and they do it in a way that’s easy to misunderstand. While it’s obvious that

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March/April 2014

41

PRODUCTS

MAXWELL’S NEW PRODUCTS

S t u f f We L i k e

ceramic tiles need to be properly supported in order to resist cracking, what’s less obvious is the way the different expansion and contraction rates of tiles versus subfloors can also be a powerful source of cracking and grout failure.

Everything in the world expands and contracts as it changes in temperature, and the rate of expansion and contraction of ceramic tiles is almost always different than the rate of the subfloor underneath. This explains why tiles sometimes crack even when they’re installed on a super-stiff subfloor like poured concrete.

Uncoupling membranes allow a small amount of side-to-side movement between a subfloor and the tiles above it. And although this movement really is almost too small to measure, it can save your butt because it prevents cracking.

Schluter, the company that makes DITRA-HEAT, is so certain of the effectiveness of their uncoupling membranes that they extend a 10-year limited warranty on properly done installations.

If tile cracks or grout failure occur, they’ll pay for the entire floor replacement, materials and installation included. This same no-crack warranty applies to DITRA-HEAT, along with a heating system warranty of 10 years. If the floor stops heating after nine years 364 days, Schluter will do whatever it takes to get it working again, even paying for a new floor if need be.

Spaces between dimples on the plastic uncoupling membrane hold heating cables in place and protect them against damage.

System Part #1: The Mat This is the uncoupling membrane and it goes down just like regular plastic uncoupling membranes. Use modified thinset

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March/April 2014

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mortar if you’re installing DITRA-HEAT over a wood subfloor, and unmodified if you’re working over concrete. Later on use unmodified thinset mortar to secure the tiles to the membrane. But before this happens, you’ve got to do something else, and it has to do with the round dimples on the top of the plastic uncoupling mat. These raised shapes are spaced so the Schluter heating cable snaps into place during installation, offering flexibility in layout. As with any hydronic system, you’re free to provide heat where it’s desired and leave it out where it isn’t. The ability to customize the installation on site is a big advantage over electric heating mats that are made in the factory and have to be used as-is. Perhaps the biggest advantage is that you don’t need to pour leveling compound over the wires before setting tile, saving you time and trouble.

System Part #2: The Wires

This floor sensor snaps into the uncoupling membrane and feeds floor temperature readings into the system thermostat.

Besides the ability to customize every installation, the thing that impresses me most is the way heating wires snap into the uncoupling DITRA-HEAT mat so they’re protected physically, while also placing them immediately below any tile you install later, for optimal heat conduction. All wires end up being slightly below the

PRODUCTS

MAXWELL’S S t u f f We L i k e

surface of the mat when they’re snapped into place, so they’re less likely to suffer damage. You still have to be careful when applying tile mortar with a notched trowel, but the wire is mostly protected by design.

Damaged wires and failure to heat is the biggest problem with those pre-made, mat-style infloor heating systems. One of my jobs using a mat system from back in 2007 went bad a year after installation with no warranty support from the manufacturer, and I’ve heard from a handful of homeowners with the same problems. Assuming that Schluter sticks by their published commitment, the warranted reliability of DITRA-HEAT impresses me.

The only drawback with DITRA-HEAT that I can see so far is that the wires can’t be cut on site. They have factoryinstalled connection fittings at one end, and they’re sealed at the other. To ease this no-cut requirement you can order heating wires in different size spools to be combined in one installation, so you need to do some figuring to make sure you’ve got the right amount.

When you start to work, install wires at the connection box first, then work back from there. As you snap wires into place, remember that you’re not allowed to go more than 10 feet in a straight line with any run of wire, and you’ve got to keep the wires at least three dimples apart from run to run to prevent overheating.

System Part #3: The Controls

Programmable thermostat with floor sensor cable and probe.

As you’d expect, the entire heating system is controlled by a programmable thermostat. In addition to preset start and stop times, there’s something called an “anticipated start”, which works to bring room temperature up to the set point by a given time, instead of switching to a higher set point at a programmed time.

Want to wake up to full room temperature at 6:30am? The system learns how much earlier than this it needs to switch on and start heating.

The current thermostat Schluter offers must be wired in, but I hear that a wireless thermostat is in the works.

cc

How Infloor Heating Saves Money One of the ways you can up-sell clients on infloor heating is with the very real fact that it saves money. Studies show that when people’s feet are warm, they feel more comfortable at a lower overall room temperature compared with heat delivered by hot air floor registers or baseboard heaters. Depending on the insulation levels of

the structure you’re building, and the outside air temperature during winter, heated floors usually run 5ºC to 10°C warmer than thermostat set points. This is enough to make feet feel great, allowing clients to reduce thermostat settings a couple of degrees lower than normal while still feeling comfortable.

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43

NEW PRODUCTS

MAXWELL’S S t u f f We L i k e Products Canon G16 Powershot Camera If you’re not shooting and archiving high-quality photos and short videos of your work, you’re leaving a lot on the table.

That’s because we live in a visual world, and visual proof of what you can do will impress clients enough to improve your bottom line. The trick is the ability to take photos quickly and share them hassle-free, and the Canon G16 is an outstanding tool for this work. I’ve owned many cameras for field use over the last 20 years, and the G16 is not only the best yet, it’s also the smallest. At 1-5/8” x 3” x 4-1/4”, it’s compact enough to fit into any oversized pocket, even when clad with the leather case I got for it on eBay for $15. Photo quality is outstanding, battery life is much longer than other cameras (including other Canons), and innovative settings create images with extra vivid colours, intentionally blurred backgrounds, superb low-light shots and excellent video. Most of my published photos are taken with this camera these days.

Typical street price: About $530. www.canon.ca

Milwaukee M12 FUEL Impact and Drill Driver Milwaukee was the first to market with brushless cordless tools (sold under the FUEL sub-brand) and the red guys really do a great job with design. I’ve pulled apart several FUEL tools over the last year and found the motors, internal circuitry and power transmission systems substantially beefier than any other brand I’ve tested. M12 is the name of Milwaukee’s 12 volt platform and though not all M12 stuff is brushless, a growing number of items are. My two current favourite M12 FUEL tools are the drill and impact driver. Small size, surprising power and exceptional run time are what they deliver. Either of these tools fit into your pouch along with a spare battery, and they just keep on running.

Typical street price: $189 for impact driver or drill driver kit; $349 for impact and drill driver combo. www.milwaukeetool.com

Stuff We Like . . . Stuff We L 44

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MAXWELL’S MIND

Think modular, and the sooner the better The biggest trend in contracting over the last 50 years is still at work today, and it has to do with the way complicated things get done.

Where highly skilled labour using simple building materials were the main ingredients contractors needed to succeed decades ago, today’s construction industry is trending more and more towards factory-made “modular” solutions that require less skill to install. Ready-made windows have replaced wooden sashes installed with site-hung weights and cords; kitchen cabinets are never built on site any more but always come ready to install; roof trusses have long replaced the skill required to cut and build with rafters. Chasing after greater quality at lower cost is the driving force behind the trend towards factory-made modular substitutes, but what’s easy to miss is the fact that this trend is still unfolding today.

The more modular your installations are the less dependent you are on a shrinking pool of skilled labour and the more you can meet rising client expectations for quality and speed. My feature story this issue is about the latest boost in tile installation and heated floors, but it’s just one example of a steady stream of innovations that are changing what it means to succeed as a contractor. I for one am always at least a little sad to see the need for building skills decline, but big trends don’t care about sentimentality. The sooner you can incorporate the best modular solutions into your building work, the better off you’ll be. cc

Steve Maxwell

“Big trends don’t care about sentimentality”

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CANADIAN CONTRACTOR

MECHANICAL ROOM

GEOTHERMAL IS A VIABLE OPTION FOR ANYONE, ANYWHERE, SAYS EXPERT

By Brynna Leslie

T

here are a lot of myths circulating these days about the practicality of geothermal heating and cooling systems for homes and businesses. At the 2013 Homebuilder and Renovator’s Expo in December, Chad Hayter, owner of solar and geothermal plumbing and heating company, The Hayter Group, set out to dispel those myths.

In a 79-page presentation to an audience at the Metro Toronto Convention

Centre, Hayter addressed many of the financial, technical and maintenance concerns often mistakenly associated with geothermal systems. The Hayter Group located in Alvinston, Ont., west of London, has specialized in geothermal heating and cooling since 1982. Hayter’s philosophy is that geothermal can be a practical, environmental and cost-saving reality for anyone, anywhere in any type of building.

UNDERSTANDING GEOTHERMAL Homeowners often don’t take the time to consider geothermal because of a general lack of understanding of what it actually is, but it’s simpler than you think, says Hayter.

Geothermal is a combination of two words. Geo means “of the earth” and thermal pertains to “heat or temperature.” The earth is a natural insulator. As little as four feet under the ground, the temperature of the earth remains relatively constant year-round.

As the sun heats the earth or water, heat can be transferred to the building directly through a series of complex pipes called loops.

The underground or underwater loops essentially remove the heat from the earth and pump it into the building.

For cooling, the transmission system is reversed, extracting excess heat from the building and moving it through the earth loop to cool it.

INSTALLATION – EASIER THAN YOU THINK People are often put off installing

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47

MECHANICAL ROOM

MYTH

Geothermal is just too expensive geothermal systems, says Hayter, because they mistakenly believe the system is difficult to install, or that it’s not possible to install geothermal in houses that don’t have a large property. Both are untrue, he says. Even the smallest infill properties can benefit from geothermal.

Depending on space available, the installation of geothermal loops can be done in a number of different ways. A vertical loop requires a deeper excavation than a horizontal loop, but is space-saving, while the latter requires more surface square-footage. In other cases, the loops run into a nearby body of water, like a pond or a well. In Toronto, for example, there are 130 buildings conditioned by Lake Ontario.

FACT

A typical Return on Investment (ROI) for geothermal installations is 12 to 21 per cent

Typically, vertical installations are conducted with powerful machines that can drill down into the earth to find the “warm spot,” often100-to-200 feet deep.

Horizontal installations require the excavation of long trenches. Water loops have their own intricacies, but all are effective.

COST BREAKDOWNS BY PERCENTAGE – TYPICAL HOME vs. GEOTHERMAL

HEATING & A/C

22% 64%

HOT WATER

TYPICAL HOME

11%

APPLIANCES

3%

LIGHTING

FREE GEOTHERMAL

16%

HOT WATER

51%

GEOTHERMAL HOME

11%

19%

APPLIANCES HEATING & A/C LIGHTING

3%

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March/April 2014

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Source: The Hayter Group

IS GEOTHERMAL COST EFFECTIVE? One of the biggest reasons homeowners opt out of installing geothermal home energy systems, however, is the capital required on startup. GeoExchange systems cost about $23,000 on average to install, compared to $9,000 for an electric furnace and air conditioning system and $11,000 for a high efficiency heating/cooling system.

To homeowners looking to renovate or build, however, the up to $14,000 premium paid up front is well worth it in the long run, says Hayter.

When comparing costs of geothermal to conventional heating/cooling systems, it’s worth looking to the future, says Hayter, because the operational cost savings and the return on investment associated with geothermal heating, cooling, radiant floor and hot water options are significant.

Homeowners who install geothermal products typically see a 12-21 per cent return on investment, he says, making geothermal a viable option for clients who are building or renovating their homes or businesses.

Many people assume geothermal installation is only “worth it” if they’re building new. Not so, says Hayter. In fact, the older the home, the greater the return on investment. Older homes typically are more sieve-like and have aging furnace and hot water systems to go with them. Installing geothermal can literally cut annual utility bills in half. And while the costs of oil, hydro, propane and natural gas have fluctuated in recent years, geothermal

MECHANICAL ROOM

MYTH

costs have remained stable since 2006 and are still lower than $875 per year on average.

With geothermal, you also get more bang for your buck. Hayter demonstrated how homeowners get more heat per kilowatt of electricity used to run a geothermal system than they would with a traditional heating unit. In may cases, the energy can be used to heat pools, radiant floors, hot water tanks and entire buildings through the ductwork may require upgrading.

But it’s not just the significantly lower operating costs of geothermal that homeowners need consider, says Hayter.

Resale value on homes with geothermal systems installed can be significantly higher. He offers the example of two homes that are equal, but for their utility system. The one with a traditional gas furnace and hot water tank has a resale value of $300,000 in the current market.

The one with geothermal should be

In homes built with Insulated Concrete Forms (ICF) geothermal is unnecessary because the homes are so efficient

FACT

The walls in ICF homes are not an issue, but the windows are.

worth 18 per cent more, with a resale value of $350,000.

The reason for the significant difference in value is twofold, says Hayter. First, geothermal systems are more energy-efficient, requiring less energy to operate. Second, replacement value is a factor with geothermal systems typically outlasting conventional heating systems, he says.

A RENEWABLE ENERGY SOURCE WITH A LONG TRACK RECORD The science behind the systems are

so simple that the Romans used a primitive version more than a thousand years ago. Today’s transmission systems are so effective and time-tested that once the initial installation is done, the maintenance on the system is relatively minimal.

Even in Canada, geothermal has a long track record. It was first used to heat homes in the 1940s and since rapid improvements in technology in the 1980s, it has been more widely used in homes, commercial and retail buildings.

A number of well-known large structures such as Rideau Hall in Ottawa, the Pan-Am Aquatic structure in Toronto and The Forks Market in Winnipeg use geothermal, says Hayter.

Even Buckingham Palace uses a geothermal heating system.

Even though it’s good enough for the queen, geothermal doesn’t have to be cost prohibitive.

Operational cost savings can be up to

Estimated annual fuel costs for various heating and cooling systems*

Heating

Cooling

Hot Water

Total

Electric furnace

$1,980.00

$195.00

$452.00

$2,627.00

High-efficiency propane furnace

$2,660.00

$195.00

$607.00

$3,462.00

High-efficiency gas furnace

$1,213.00

$195.00

$276.00

$1,684.00

GeoExchange System

$619.00

$94.00

$283.00

$996.00

*Based on average pricing for fuels noted. Actual costs will vary with market conditions.

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MECHANICAL ROOM

MYTH

There is not enough room for the ground loops in city lots

FACT

Vertical geothermal installations allow for efficient installation even on narrow city lots.

$2,500 per year, says Hayter. A homeowner that replaces a high-efficiency oil or gas furnace with a geothermal system can expect to recover the difference in installation costs within four to ten years, with minimal maintenance fees. cc

For further information on the costs and benefits of geothermal heating, please contact Chad Hayter, The Hayter Group, chad@hayters.net

WHAT YOUR CUSTOMER IS PAYING FOR HEAT ENERGY SOURCE

AMOUNT OF HEAT PER $1.00 SPENT

Hi Efficiency Geothermal System

113,766 BTU

Standard Geothermal System

75,086 BTU

Electricity (per Kilowatt Hour)

Zuba Central

62,571 BTU

Electric Furnace

22,753 BTU

Oil (per litre)

Oil Furnace

36,668 BTU

Propane (per litre)

Hi Efficiency Propane Furnace

33,142 BTU

Natural Gas (per cubic meter)

Natural Gas Furnace

65,981 BTU

Hi Efficiency Gas Furnace

88,285 BTU

Wood*

Wood Furnace/Boiler

69,511 BTU

Geothermal Electricity (per Kilowatt Hour)

*Includes labour of 15 minutes per day.

50

HEATING EQUIPMENT

March/April 2014

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OVERHEADS

Bureaucrat Of The Month A Manitoba College of Trades, perhaps?

RON LEMIEUX Minister of Tourism, Culture, Heritage, Sport and Consumer Protection Province of Manitoba

Yet another province decides to add some more regulation (and, no doubt, fees) to its renovation industry Manitoba’s NDP government didn’t feel the need to do any public consultation at all when it raised its PST from 7 to 8 per cent last year, breaking a 2011 campaign promise. Now, Premier Greg Selinger’s administration has plunged in the polls to 24 per cent, streets behind the PC party’s 49 per cent.

Now, the NDP clearly wants to be seen to be doing something constructive. In early February, Ron Lemieux, Minister of Consumer Protection (among his many hats), said his colleagues were tired of watching renovators in the province ripping off consumers. So Lemieux has deployed a 16-point questionnaire to help the province determine “what counts” in a good renovation.

From the answers the public provides, the NDP bureaucrats will act, Lemieux promises.

Manitoba’s survey of homeowners asks leading questions “The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help’ ” RONALD REAGAN

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The questions on the survey cover such topics as: How many contractors did you call in for quotes? What kind of work did you get done? How many permits did you get? What kind of paperwork did you fill out? Were you offered a guarantee?

And it offers such leading questions as: “Should legislation limit the amount that contractors can be required to be paid up front, to a reasonable amount, e.g., 10 per cent of the contract or $2,500?”

There were only 80 renovation and repair complaints to Manitoba's consumer protection ministry last year, in a province of 1,208,000 citizens.

So we have to ask: Are the regulations that already govern the home improvement industry in Manitoba seriously inadequate? Or are more bureaucrats looking for jobs?

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