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(and which neighbourhoods are soaring into 2019)
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Ottawaâ&#x20AC;&#x2122;s real estate market
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ADULT GATED COMMUNITY
February 2019 Vol. 21, NO. 25
Coping with tax reform: A business checklist The federal government implemented major tax reforms in 2018, leaving finance and tax experts to pore over the new legislation in an effort to offer their clients the best advice. How significant are these changes? Kody Wilson, a tax and advisory services partner at Ottawa accounting firm GGFL, puts it this way: “If a business owner doesn’t have an accountant and tax advisor now, this is the year to do it,” he says. Here is Wilson’s 2019 checklist for business owners: Timing of expenses: Business owners looking to buy, for example, new equipment or a building should consider making their purchase before the end of their fiscal year to qualify for a deduction and get credit for the purchase. Salaries, bonuses and dividends: This is always a major planning exercise for GGFL and its clients. The goal should be to optimize the mix of these three forms of compensation, based on the after-tax cashflow needs of the taxpayers and their families. This will be a more complicated analysis this year.
Investment income for the year: If a company or individual has excess cash and has, for example, invested it in real estate or bonds, there are new investment income rules to consider. It is now more important to analyze that income to determine if it is reaching certain thresholds.
Structure of operations: This is something GGFL reviews annually with its clients. Who owns the shares in the company, and is that ownership still the most advantageous? Are you considering buying real estate or operating in the U.S.? This is a multi-question examination.
Kody Wilson, partner, tax and advisory services
Visit OBJ.CA/ OBJ-DIGITAL-EDITION to view the digital edition for exclusive features
“If business owners fail to plan ahead, they risk paying too much tax and exposing themselves to a CRA audit.” – Kody Wilson, partner, tax and advisory services, GGFL
Think about next year: Take a proactive approach and anticipate what the future might hold. Is retirement on the horizon for one of the owners? If that’s the case, is there an exit strategy for the owner? Is the owner looking for ways to compensate key employees? Is the owner considering selling to the current management team? Transitions require longterm planning to properly maximize tax gains. Personal money paid into the business: Perhaps you only had a personal credit card with you when you bought an item for the business. Make sure you receive credit for that. It’s not something accountants necessarily see when examining a business’s finances. TOSI (Tax on Split Income): Rules governing the payment of dividends to family members are having the biggest impact on small and medium-sized
businesses. Do you meet any of the exclusions to get out of the high tax rate TOSI would otherwise cause? Another tax change relates to investment income earned at the corporate level. If, for example, a person has two or three different businesses, it’s important to carefully manage investments or possibly risk losing the small business deduction in a given year. Navigating these changes requires expert advice, says Wilson. “If business owners don’t do a thorough annual analysis of all these areas, and fail to plan ahead, they risk paying too much tax and exposing themselves to a CRA audit,” he says. “Corporate tax was already fairly complicated,” adds Wilson. “It just became a lot more complicated.”
ON THE STREETS
IF YOU FIT THIS DESCRIPTION, WE NEED YOUR ATTENTION
In marketing, building personas is all the rage. So let me paint you a picture of a slim (perhaps elite) segment of Ottawa’s business community. They hail from all industries, but most work in tech. Almost 90 per cent work for locally headquartered private companies that are located in downtown Ottawa. Annual revenues? Huge range, but the majority report revenues of $2.5 million to $5 million. They’re divided in two when it comes to their geographic markets, with half focused on Ottawa and the other half focused on national or international markets. Most of them own companies, leading teams of 20 to 50 people. Of those who founded their companies, 20 per cent were in their early 30s when it happened and they tapped personal savings for nascent ventures. They are well educated. Practically all of them hold university degrees, with almost a third completing postgraduate studies. Not only are they smart, they’re fairly well off. About half of our segment have personal incomes between $150,000 and $250,000. A fifth of the them earn $500,000 or more annually. Oh, yes. The key part. Every single person is under the age of 40. Have you guessed it yet? Yes, it’s the persona of Forty Under 40 recipients. Right now, OBJ and our partners at the Ottawa Board of Trade are searching for the 22nd cohort of recipients. My, how time flies. The awards modestly began as a newspaper feature in the late 1990s with 40 recipients selected by OBJ’s editorial team. These days, the process is a lot more regimented.
Today, nominees are judged by a distinguished independent panel on a 40-point system. (How appropriate, 40 points, right?) Half the points are for business achievement. The other half are split between two criteria – the nominee’s level of expertise and his or her involvement in the community, very broadly defined. That could mean straight volunteer work or maybe leadership of a professional association. So back to that persona. Do you need to match exactly? No, but it helps to resemble the profile. A special invite goes out to our city’s female business leaders. Last year marked the first time Forty Under 40 achieved gender balance. It was noteworthy to say the least. Here is how you get involved. Visit www.fortyunder40.ca, create a profile and get started. Pro tip: You can nominate someone you know and surprise them, but that typically backfires. Get the recipient involved in the process. In recent years, 300 people have started nominations, so heed this advice. Zero points for flowery marketing language. (It might work against you.) Let the facts speak for themselves. Nominations close at the end of March.
@objpublisher Michael Curran
OBOT Connect! is a joint initiative of the Ottawa Business Journal and the Ottawa Board of Trade. This new publication takes an in-depth look at the trends and issues shaping businesses in various regions of the city while providing highlights of Ottawa Board of Trade initiatives in the community. In this issue, reporter Rosa Saba looks at how local tech firms and economic development officials are pushing to turn the Greenbelt Research Farm in south Nepean into an R&D centre for the emerging field of precision agriculture. She also explores how the growing presence of the nearby National Defence headquarters is sparking a new wave of development in Bells Corners.
INSIDE THIS ISSUE PRIVATE MORTGAGE LENDING BOOM? OBJ newsmagazine editor David Sali takes a closer look at how the introduction of tougher mortgage stress test rules in 2018 has caused many prospective homeowners to turn to alternative lenders to finance their purchases (pages 24-25). OBJ.SOCIAL Columnist Caroline Phillips has a behindthe-scenes look at a tasty event in the Glebe, a great Scottish gala and a very special fundraiser involving the Ottawa 67’s and spearheaded by a group of young professionals (pages 29-32). TECHOPIA Techopia editor Craig Lord takes a deeper dive into local startups that are making their mark in the nascent proptech sector that’s changing the way consumers buy, sell and live in their homes (pages 34-35). He also sheds light on why Ottawa firm Corsa Technology’s expertise in the field of software-defined networking has made it a company to watch in 2019 (page 36) and reports on surveillance video software maker Solink’s latest major round of venture capital funding (page 37).
Just in time for International Women’s Day comes CEO Talk with a yet-to-be-confirmed speaker lineup of female executives. If you haven’t visited the new $38-million Ottawa Art Gallery, there’s another reason to attend. The event is booked for the Alma Duncan Salon, but you can also check out the gallery until 9 p.m. OAG is the new home to the Firestone Collection of Canadian Art donated to the City of Ottawa in the early 1990s. The collection includes a number of pieces by the Group of Seven with a particular focus on A.Y. Jackson. Visit www.ottawabot.ca.
Hockey stars in disco attire. Sound appealing? If so, don’t miss the Sens Soiree, the annual signature event of the Ottawa Senators Foundation. This year is sure to be extra special as a new crop of young Sens stars rub shoulders with fans at this posh gala. The theme for 2019 is “Saturday Night Fever” and the event moves to a new venue, the Westin Ottawa. Ferguslea Properties is back as lead sponsor to help “change the game” for youth in our community by providing mental health support and resources. Visit www.sensfoundation. com/soiree.
Carleton University’s new president is booked for the Mayor’s Breakfast in February. Dr. Benoit-Antoine Bacon was appointed as the university’s 15th president and started his five-year term in July. Before this appointment, Bacon served as provost and VP academic at both Queen’s University and Concordia University. Visit www.ottawabot.ca.
Imagine if TED were coming to Ottawa. It’s not, but you can imagine. TEDx Kanata is scheduled for late February with “imagine” as its central theme. Organizers have lined up a stellar group of speakers, most hailing from either tech or business. Get ready for tech leaders such as Eli Fathi, John Proctor, Amy MacLeod and Anna Lambert, plus legal executive Katharine Cooligan. It all happens at Brookstreet Hotel starting at 3:30 p.m.
DR. PHIL WELLS
Molly Van der Schee (Re-elect), The Village Quire Steve Harding (Re-elect), Xactly Design and Advertising Richard Bown (Re-elect), Urban Turf Alan Whitten, Huntington Properties Rick Eisert, Royal LePage Sheba Schmidt, West End Kids Darren Prashad (Re-elect), Merit Travel
Congratulations to the newly and re-elected Westboro Village Business Improvement Area Board of Management business members
EXECUTIVE BRIEFS NCC gives LeBreton partners until end of February to fix issues
FEBRUARY 2019 OBJ.CA
Gatineau pot producer Hexo looks to raise $50M
The economy’s been good, but I think there’s more to it. I think we’ve just been getting it right.
The National Capital Commission is granting the feuding partners of RendezVous LeBreton until Feb. 28 to sort out their issues. The NCC – the Crown corporation that owns the vacant land known as LeBreton Flats – put into motion plans to terminate its agreement with the partners after Ottawa Senators owner Eugene Melnyk sued John Ruddy and the Trinity Development Group. The lawsuit alleged a conflict of interest related to Trinity’s nearby 900 Albert St. mixed-use development project back in November. Ruddy wasted no time in suing back. The extension was requested by former Ontario Supreme Court Justice Warren Winkler, who’s acting as a mediator between the two groups and Ottawa developer Graham Bird, RendezVous LeBreton’s project manager. Bird told OBJ he’s hopeful the partners can work out their issues in favour of the project, which would see public spaces, residential units and a new downtown arena for the Senators. “We’ve just got to find a moment to calm down and see if we can find a way through it.”
– ROSS VIDEO CEO DAVID ROSS, AFTER THE FIRM POSTED ITS 27TH CONSECUTIVE YEAR OF RECORD-SETTING REVENUES
B.C. fund buys into Amazon’s Ottawa warehouse The chief executive of a Vancouver real estate firm says Amazon’s long-term lease on its new Ottawa distribution facility was a deciding factor in his fund’s deal to buy a 90 per cent stake in the warehouse, the firm’s first foray into the capital region. Concert’s CREC Commercial Fund announced in mid-January it will enter
into a co-ownership agreement with Broccolini, the Montreal-based developer currently building the one-million-squarefoot facility on Boundary Road. Concert said the acquisition will bring the total value of its property portfolio up to $1.6 billion, with more than 9.3 million square feet of industrial and office space across Canada. The fund said its full portfolio was worth roughly $1.4 billion as of December 2018. Brian McCauley, Concert’s president and CEO, told OBJ the firm expects to have Amazon as a tenant at the new warehouse “for many decades.”
Days before its anticipated debut on an American stock exchange, Hexo (TSX:HEXO) announced in late January it intends to raise $50 million to fund its expansion and product development plans. The final offering will see the Gatineau pot producer list additional common shares on both the Toronto Stock Exchange and the NYSE American. Hexo’s offering will be underwritten by CIBC World Markets and BMO Capital Markets and includes a 15 per cent over-allotment option. The firm said in a statement it will use the funding to finance its global expansions – Hexo announced plans to tackle the European market from Greece last year – and R&D on new products. The company took another step towards a novel line of cannabis products with its announcement earlier in January that Veronique Hamel will join the firm as its new chief innovation officer to oversee R&D efforts.
La Cité to launch cheesemaking program Ottawa’s La Cité collégiale is planning to build a new addition to its campus to help establish Canada’s first hands-on cheesemaking training program. La Cité and western Ontario’s Conestoga College will partner on the new program, which will be offered in both official languages
and is aimed at addressing a reported shortage of cheesemakers in the province. The Ontario Dairy Council expects Ontario will see demand for 200 cheesemakers in the next decade. La Cité CEO and president Lise Bourgeois said in a statement that the two post-
secondary institutions have earmarked a collective $3.5 million for land investment. The Canadian Dairy Commission is contributing $500,000 to the program. Lactose enthusiasts can expect to start making cheddar at one of the two colleges in the fall of 2020.
2018 CHECK IT OUT ON NEWSTANDS OR VISIT BESTOFFICESOTTAWA.CA
Wearing success well Entrepreneur Lisa Owen is aiming to sew up the online fashion rental market for women with Rent frock Repeat BY CAROLINE PHILLIPS firstname.lastname@example.org
e’ve all been there: staring blankly into the abyss of our closet, feeling like we have nothing to wear. It’s often followed by an urge to shop for more stuff to fill our wardrobe, our homes, our lives. That’s where Rent frock Repeat comes in. Since 2011, the Canadian company has been renting designer gowns to women who don’t want to shell out money on special-occasion dresses that they may only wear once or twice. The popular dress rental business first stepped onto the Ottawa fashion scene in 2015, when it opened its showroom in the ByWard Market. It’s now transitioning to a strictly online fashion subscription service that will offer Canadian women a rotating wardrobe of stylish clothing. Rent frock Repeat has determined, based on market demand, that its clients aren’t just about the dress. They’re also interested in renting
Lisa Owen, co-founder and CEO of Rent frock Repeat. PHOTO BY CAROLINE PHILLIPS
Clothes ownership is a burden for women. We are constantly given the message to streamline or pair down, but how do we do that when our only option is to buy? – Lisa Owen, co-founder and CEO of Rent frock Repeat business, maternity and weekend wear. “Because we feel the pain of getting dressed in the morning,” is how company co-founder and chief executive Lisa Owen explains it. “We all want to look great. A beautifully tailored outfit can do just that, but our bodies change, our circumstances change and
we end up accumulating a lot of stuff as a result.” Owen says women wear only bout 20 per cent of their clothes because everything else doesn’t fit properly, disintegrates after a second wash, is out of fashion or is in need of repair. “We can accumulate very quickly,
but we noticed there’s a big challenge for women to figure out how to get rid of stuff,” says the 48-year-old Cornwall-based entrepreneur. “It’s either too time-consuming, or they’re emotionally attached to something, or they feel bad because they see these garbage bags of clothes that they spent their hard-earned money on. “Clothes ownership is a burden for women. We are constantly given the message to streamline or pare down, but how do we do that when our only option is to buy? Having something we can borrow and return is better financially, it’s less waste for the planet, and it makes life simpler.”
FIVE THINGS TO KNOW ABOUT LISA OWEN
Until recently, she was known as Lisa Delorme, but she’s been gradually switching over to her husband’s surname, Owen, since they tied the knot in 2016 in a backyard wedding ceremony. And, yes, her gown was from Rent frock Repeat. It was designed by Theia.
Owen loves living in Cornwall, where she also grew up. She sits on the boards of the Cornwall Hospital Foundation and Job Zone D’Emploi and is involved with the Cornwall Innovation Centre. “It’s a city that’s redefining itself,” she says proudly.
Owen says she gets her resiliency from her mother, Shirley Zappia, and her appreciation for well-made products from her entrepreneurial father, Frank Zappia. At age five, he immigrated to Canada from the southern Italy region of Calabria with his family, who for years ran the popular Zappia’s pizza restaurant in Cornwall.
Rent frock Repeat has twice won a Canada Post E-Commerce Innovation Award and the thousands of dollars in shipping and marketing credits that come with each award.
Owen and Wieber successfully landed a financial offer during their 2012 television appearance on Dragons’ Den. In the end, they were able to grow their business on their own. “From an exposure perspective, it was fantastic for the company,” says Owen of being on the CBC show.
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Under RfR’s new business model, clients will receive, through the mail, a box containing several items selected for them by a professional stylist. Rent frock Repeat will start off with 5,000 subscribers, each of whom will create a fashion profile of herself, based on her size, lifestyle, budget and personal taste. RfR covers dry-cleaning costs.
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SHARING ECONOMY PIONEERS
“All Rent frock Repeat is doing is providing a bigger community of people that you can swap clothes with, and we’re taking the responsibility of making that exchange very, very easy,” says Owen. Rent frock Repeat was created in 2010 by Owen and Kristy Wieber after they found themselves fretting over what they were going to wear to a summer wedding. They learned of a U.S. company that rented out formal evening gowns, but it didn’t ship to Canada. The pair came up with a business plan to start their own online dress rental company in Canada and bootstrapped the venture themselves. Rent frock Repeat – which has built up a membership of 95,000 – became part of the sharing economy before the sharing economy was considered cool (think Uber and Airbnb). RfR originally kept its inventory of 600 dresses in the basement of Owen’s Toronto home. What the company quickly learned was that clients wanted to try them on before wearing them to their special events. Customers got the opportunity – at Owen’s home, using her master bedroom as a changeroom. As a result, Rent frock Repeat opened its first brick-and-mortar showroom in Toronto, followed by its second in Ottawa. But, it was always the company’s plan to return to an online-only enterprise, enhanced with temporary pop-up shops. In 2014, the startup raised $1.15 million in a funding round led by Ottawa female angel investors Coralie Lalonde and Caroline Somers. Of the company’s 25 investors, 12 are women. Owen says it’s hard to convince Canadian investors that Canada is a great place to do business. Entrepreneurs are constantly told they must head south of the border or go global in order to succeed, but she says that is viewing success through a very myopic lens. “It’s a shame,” says Owen, who previously worked 14 years in the corporate world in the areas of sales, marketing and talent management. “Let me tell you, this is easily a $100-million business in the Canadian marketplace.”
Five tips to purchasing commercial property in Ottawa If buying, selling, or leasing a commercial property was as simple as just signing on the dotted line, anyone could do it. But it can be a complicated, risky process, and requires the assistance of a professional. When it’s time to expand your business or make an investment there are many decisions to be made. A commercial member of the Ottawa Real Estate Board (OREB) can help combat the uncertainty in any commercial transaction.
HERE ARE FIVE TIPS IN NAVIGATING YOUR NEXT PURCHASE OF COMMERCIAL REAL ESTATE.
DEFINE WHAT YOU’RE LOOKING FOR What is your dream commercial property? Where is it located and how many square feet do you think you might need? Realtor members of OREB’s Commercial Services Network can help identify and assess the needs of your organization. “OREB’s Commercial Realtors are experts in identifying the needs of entrepreneurs,” says Geoff Godding, Chair of OREB’s Commercial Services Network. “We can also assist a client in assessing whether it would be more advantageous to lease or purchase a commercial property. This requires thorough analysis and planning,” noted Godding.
ASSEMBLE A TEAM Once you’ve made the decision to move forward with a purchase or lease, a member of OREB’s Commercial Services Network can help you find the right space and ultimately to negotiate and close the deal. “We can assemble a team of experts to guide clients through things like environmental assessments and everchanging mortgage rules, in order to protect their interests,” says Mitch Gauzas, Chair- Elect of OREB’s Commercial Services Network.
GET A GOOD LOOK AT AVAILABLE PROPERTIES Give yourself ample time to gather information on available properties. Keep in mind that your business may expand in the future. A Commercial Realtor will be able to assist you to find the perfect space. “Don’t be afraid be ask your real estate professional about current market conditions and be sensitive to the time of year,” says Tim Lee, Broker. “Both sellers and buyers will have different motivations based on these factors. OREB’s Commercial Realtors have the data and experience to provide timely suggestions that can make a big difference in your budget,” he said. CALCULATE YOUR RETURN ON INVESTMENT If your organization decides to purchase property as an investment, the key is to determine your return on investment. You don’t want to move too far into the process before realizing that maintenance, repairs and financing costs will erode an unacceptable portion of a property’s income. OREB’s Commercial Realtors can assist in the process and perhaps identify other properties that could yield a higher return. “Commercial Realtors have access to resources of the Canadian Real Estate Association such as quarterly commercial snapshots of key economic indicators for commercial real estate, as well as financial models, and calculator tools,” says John Zinati, Broker. SET YOUR GOALS, ENTER INTO NEGOTIATION, AND CLOSE THE DEAL Going solo without representation can leave parties in a vulnerable position when entering into negotiations. Realtors are required, through a strict Realtor Code of Ethics, to protect their client’s negotiating position and have the expertise to do so. Before going through the negotiation process, make sure your real estate professional understands your goals and your budget.
“Many Realtors are highly trained negotiators and have taken certification and designation courses through OREB’s continuing education program,” says Mike Lewicki, Broker. As well, he continued, “As Realtors, we also have access to a variety of resources offered through our exclusive memberships in both the Ontario and Canadian Real Estate Associations, such as WEBForms which offers the most up-to-date legal real estate forms and clauses to Realtors.”
WHAT IS A COMMERCIAL REALTOR? “Realtor” is not a job description. It is a trademark of the Canadian Real Estate Association (CREA) and stands for service, competence and high ethical practice. Only Members of CREA can use the term Realtor. Members of OREB’s Commercial Services Network advise, recommend, caution and counsel their clients with a level of expertise that brings value to any transaction. Only Realtors have access to the MLS System. MLS System listings can be uploaded to Realtor.ca where they reach a global audience. Realtor.ca is a marketing site operated by CREA and had 264 million visitors in 2018 and 5.3 billion page views.
FUN FACT In 2018, OREB’s Commercial Realtors listed 15,331 commercial properties on the MLS System through their exclusive access, and were able to review historical data on thousands of listings for comparison. Find a Commercial Realtor at www.oreb.ca.
Putting Intellectual Property to work Stratford Managers signs agreement with OneEleven to help scaleups leverage intellectual property Intellectual property is the currency of business. While obtaining patents is a good first step for a growing business, how you leverage your intellectual property is what makes a company successful. OneEleven, with communities of high-performing technology scaleups in London, Toronto and Ottawa, is expanding the services they provide their members to include intellectual property management and how to make it part of their core business process. Through their delivery partner Stratford Managers – a management consulting firm that helps organizations grow, improve and transform – OneEleven members will gain access to a proactive and strategic IP management as a monthly service. This service is part of OneEleven’s commercial service offerings designed to better prepare technology founders for their future and allow them the time to focus on growing their business. Stratford Managers approaches IP through a different lens. Instead of simply focusing on filing patents, Stratford Managers believes in using IP as a strategic advantage and a way to force companies to think longer term. Companies with a strong IP strategy innovate more, experience higher growth and tend to be more successful. Several OneEleven tend to neglect is the cost of IP management which building a defensible product will reduce potential member companies are already part of Stratford’s IP includes not only the initial drafting and filling costs rework later on and increase your businesses value client portfolio, and through this agreement Stratford but longer-term prosecution, maintenance fees and going forward. Stratford thinks about IP from the is looking forward to supporting more of OneEleven’s beginning to the end of product development and that’s possible enforcement. members. “It’s easy to make the mistake of spending a lot what our members need.” “Our mission is to support growing organizations,” of money on patents early on, there are a lot of says David Booker, chief operating officer at Stratford ways to minimize the spending in the early stage Managers. “Because we have similar values with while ensuring a long-term protection” says Giroux. OneEleven, we felt that we could greatly benefit their “Investors want to see startups thinking about the Intellectual property goes beyond filing for patent members.” protection. Stratford Managers specializes in strategic future and spending funds strategically. You want to OneEleven’s community, programming, budget for future costs as the IP portfolio grows. In IP management, which includes having a proactive partnerships, and facilities are designed to meet the many cases, when appropriate, it can lead to deciding approach to IP strategy. Stratford Managers specializes in helping businesses accelerate performance and achieve unique needs of technology scaleups. to protect some key IP as trade secrets. Part of the “We want to create a culture of innovation scale. We’re trusted advisors and expert bench strength for many of Ottawa’s leading “What drew us to Stratford is how they look at value we provide with our IP strategy service is where all employees know what IP is and how to www.stratfordmanagers.com/scale companies. Take the ﬁrst step to the next level. IP management in a comprehensive way,” says John anticipating the needs of investors and maximizing manage and protect it on a day to day basis,” says Mavriyannakis, Chief Operating Officer at OneEleven. value at exit.” Natalie Giroux, who leads innovation strategy at | Marketing | Finance | Human Resources “They look at Intellectual Property through a businessSales Stratford Managers. “We perform frequent industry | Operations | Intellectual Property | IT lens. We both want our members to think about intelligence searches to see what type of IP landscape intellectual property whether that is protecting your exist for a specific idea. This helps determine the own or not infringing on others as early in the product value of a patent before even drafting it. development process as possible. We believe that One of the major issues that small companies
SCALE Break Through the Barriers to Growth
Consulting. Coaching. Virtual/Interim Management.
Robin Coull is owner of Pot & Pantry on Elgin Street and a leader of the I Dig Elgin campaign. FILE PHOTO; PHOTO ON FACING PAGE BY MARK HOLLERON
Elgin merchants told to ‘plan for the worst, hope for the best’
Businesses on popular downtown strip remain optimistic in face of year-long traffic shutdown BY DAVID SALI
hile snow fell among the barricades outside his Elgin Street bookstore in late January, Jim Sherman’s disposition couldn’t have been sunnier. “A year without cars isn’t such a bad
thing,” the owner of Perfect Books at 258 Elgin said with a smile, referring to the $36-million renovation that will close the downtown thoroughfare to vehicular traffic until the beginning of 2020. “January is always a little slower given Christmas is finished, but comparing this January to last January, (sales) are
actually a little bit up,” he added. “I haven’t seen any downturn at all. It’s a non-issue, really.” Sherman’s optimism aside, there are bound to be nervous times ahead for at least some businesses on the street over the next 11 months or so. The project, which will see Elgin’s
sidewalks widened and hydro lines buried, will keep cars off the road from Somerset Street to Catherine Street for the remainder of 2019. A southbound lane from Laurier Avenue to Somerset will remain open, but the northbound lane up to Nepean Street will be closed to vehicles. Detour signs directing cars to O’Connor and Metcalfe streets are now in place. Pedestrians can still make their way down Elgin, and the city is trying to mitigate the impact of construction by offering free parking at the City Hall garage on evenings and weekends until the street reopens. Still, some shopkeepers fear their bottom lines will take a substantial hit. “It’s going to impact our business, I think, a lot,” Happy Goat Coffee co-owner Ahmet Oktar told OBJ last year. “I’m trying to be positive. I hope everything will go as (the city) said.” While businesses on Elgin are doing their best to remain upbeat, a couple of kilometres away on Rideau Street, merchants who know the pain of ongoing construction all too well are rooting for their counterparts to the south to succeed – while cautioning them to brace for lean times ahead. “Plan for the worst, hope for the best is the way I can sum it up,” said Corey Hackett, co-owner of Top of the World on Rideau Street since 2010. Hackett said sales at the venerable skateboard shop have plummeted 45 per cent since the city first began digging up Rideau to build the Confederation LRT tunnel four years ago. With the light-rail project now months behind its originally scheduled 2018 completion deadline, he’s given up on predicting when the pylons and fences lining the sidewalks will finally disappear. Asked if he had any advice to help his counterparts on Elgin weather the storm, Hackett was blunt. “That’s tough for me, because I haven’t made it through a construction project,” he said, adding at least four stores on Rideau between Nicholas and Dalhousie streets have shut their doors for good since shovels first went into the ground. Hackett said his store was forced to cut its employee count from 14 to seven and had to negotiate with some
suppliers for extended payment terms on merchandise. He is urging Elgin Street business owners to take a good, hard look at their operations and trim expenses wherever they can. “Suppliers, as long as you’re open and honest with them, for the most part, they don’t want to lose you as a customer, so they helped us out in ways they could,” he explained. “You’ve got to have a look at every corner. You’ve got to keep your head above water somehow.”
If it’s slower, you simply have more time to connect with your customers. Think of it as a positive. – Urban Outfitters manager Maggie Hutton
BEEFED-UP SOCIAL MEDIA Across the street at Urban Outfitters, manager Maggie Hutton says construction is a headache Elgin’s retailers will just have to deal with head on. “It directly impacts traffic,” she said. “There are some days where we come to work and the street’s blocked off by pylons. There is consistently garbage out front of the store. You remain positive, but it’s been years.” Hutton, who lives in the Elgin neighbourhood and now has to navigate her way between the street’s
construction fences on her daily walk to work, is advising merchants on the strip to beef up their social media presence and get the message out that they’re still there to serve customers. She also suggested a year without car traffic might have an upside, giving businesses a chance to build a closer rapport with the clients who keep patronizing their shops. “If it’s slower, you simply have more time to connect with your customers and make every single interaction unique,” Hutton said.
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“Think of it as a positive for your team. Those are really dedicated customers. I feel like that’s exciting, in a sense. I felt like if someone’s really making the effort to go past this construction and walk by all the pylons and behind the three walls that it takes to get here, they must really love this store, you know? Which is kind of inspiring.” Back on Elgin, Pot & Pantry owner Robin Coull is keeping her chin up. The local entrepreneur, who opened the kitchenware store at the corner of
Cooper Street two years ago, has banded together with other nearby business owners to launch the “I Dig Elgin” campaign as a means of encouraging shoppers to keep frequenting the street during the construction period. The campaign runs a website that provides updates on construction, information on local events and links to city material on the project, and Coull said I Dig Elgin organizers are set to announce more initiatives to promote the street in the next few weeks. So far, she added, 2019 is off to a good start for her and other merchants she’s spoken to. “I haven’t heard any downturn in numbers or anything,” she said. “I think everyone’s kind of feeling the same thing. I’ve heard a lot of support from community members – customers saying they’re walking and they’re enjoying the walking. “I think we have to all continue to keep working very hard at our businesses, at supporting each other and ask that the community come and support their favourite Elgin Street businesses through this year.”
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Overnight visits to Ottawa expected to jump in 2019: Report BY DAVID SALI
uoyed by the pending arrival of light rail and more direct flights from the United States, Ottawa is expected to welcome 2.4 per cent more overnight visitors this year than it did in 2018, a new report from the Conference Board of Canada says. The Conference Board is projecting about 5.3 million overnight stays in
2019, up from last year’s total of 5.17 million. Overall, the organization says, the total number of visitors to the region is expected to jump two per cent to 11.2 million in 2019. The board is equally bullish on Ottawa’s longer-term tourism prospects, projecting overall growth in overnight visits of at least 2.3 per cent from 2020 to 2022. It says improvements in the city’s transportation infrastructure and
Ottawa’s growing popularity among foreign travellers should keep the industry on a strong upward trajectory. “Over the longer term, several major investments in transportation and tourist-related facilities, including renovations to the Ottawa International Airport terminal and a light-rail station at the airport, are
expected to pay dividends in the years to come,” the report says. The Conference Board also says it expects those visitors to pump more money into the local economy, predicting tourists’ overnight spending will rise an average of 5.3 per cent annually over the next four years. The board’s sunny outlook
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suggests the local industry is poised to bounce back after the number of total visitors in 2018 fell 1.5 per cent from a year earlier and overnight stays dropped nearly two per cent. The Conference Board blamed several factors for the decline, including the “hangover effect” from the Canada 150 celebrations that drew a record number of tourists to the capital in 2017, rising gas prices and a heat wave that put a damper on visits in the peak tourism months of July and August.
The organization is predicting local tourism-related businesses will get a boost from the opening of the Confederation LRT line later this year and upcoming events such as the 2020 Canadian ringette championships. While the board expects overnight visits from domestic travellers to grow by about two per cent annually over the next several years, it’s expecting an even bigger bump from the U.S. and overseas markets. Noting that the U.S. is the city’s
(PROJECTED, IN THOUSANDS)
Source: Conference Board of Canada
(PROJECTED, IN THOUSANDS)
biggest source of foreign visitors with more than half a million Americans travelling to Ottawa each year, the board says better air connections should help boost those figures. The board is predicting annual growth of more than three per cent in overnight U.S. visits from 2019 through 2022. The Conference Board expects even more robust growth from the overseas market, which drew more than 640,000 visitors to Ottawa last year. By 2022, the board expects nearly 800,000
overseas travellers to visit Ottawa, led by a surge in visitors from growing markets such as China and Australia. The report came after Ottawa Tourism told OBJ it’s putting its marketing efforts in China on hold in light of strained relations between Canada and the Asian country. According to the Conference Board, China is Ottawa’s top market for overseas travellers, with more than 96,000 tourists from the country visiting the capital in 2016.
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Applications submitted through the Public Appointments Secretariat are forwarded to Algonquin College periodically, and may not fall within the Board’s regular recruitment timeline of January to April.
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BDO moves Ottawa operations to new open-concept office FEBRUARY 2019
Modern space to improve collaboration between employees, clients
When BDO considered the benefits of working in an open-concept space, one concern that arose was privacy. What would happen, for example, when an employee needed to place a private phone call to a client or colleague? Would it take Superman to solve this problem? Probably not, but BDO installed a handy private phone booth in the office equipped with noise
cancelling walls for employees to make calls … or make a quick change into their secret crime-fighting/numbers crunching identity. BDO recently opened its new open-concept office space in the downtown core to clients and staff with the goal of creating a more collaborative, creative and warm atmosphere. The space, located on 180 Kent Street, is 20,000 plus square feet and occupies the 17th floor. “We want to have a warm, friendly atmosphere that makes people excited to come to work,” says Stéphane Savage, Office Managing Partner at BDO. “We wanted an office that would help
streamline our services and enhance our client experience.” With more than 200 employees previously spread across multiple locations and three physical locations in Ottawa, BDO saw the relocation as a way to create a more collaborative workspace and give their clients improved access to its full suite of services. The Consulting, Insolvency, Assurance and Tax groups moved into the new space in late November with BDO maintaining its St. Laurent Boulevard office for the firm’s clients in east Ottawa. Renovations included having ample natural light throughout the office, whiteboard walls and multiple meeting rooms for clients and employees, with state of the art technology throughout the space. “Nowadays people can get caught up in deliverables and they don’t take time to take a lunch break and exchange with their colleagues,” says Savage. “We wanted to create a space where employees feel comfortable to chat with others and get to know each other while providing valuable expertise to our clients. We’ve already seen more interaction between various service lines and our clients love it.” — OBJ360 CONTENT STUDIO
OTTAWA BOARD OF TRADE
BY ROSA SABA
Autonomous tractors, data-collecting drones among technologies poised to transform sector
ocal tech firms, politicians and economic development officials are pushing to turn the Greenbelt Research Farm in south Nepean into an R&D centre for the emerging field of precision agriculture. In 2017, Ottawa was part of a bid for “supercluster” funding aimed at accelerating growing sectors in Canada, which saw a total of $950 million split between five groups. The national bid included a plan to turn the National Capital Commission’s Greenbelt Research
Farm – bordered by Woodroffe Avenue and West Hunt Club, Fallowfield and Greenbank roads – into a testbed for agricultural technology. Though the bid didn’t make it to the finish line, several of its stakeholders are ploughing forward with another bid, this time for funding from the government’s Strategic Innovation Fund. This particular funding will see one successful group receive between $10 million and $50 million for projects focused on automation and digital technologies in the agriculture and agrifood sector. Continues on next page
Ottawa bets on NCC L farm as future precision agriculture hub
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FOCUS ON NEPEAN AND BARRHAVEN
GRAPHIC COURTESY OF THE CITY OF OTTAWA
Welcome to OBOT Connect!
a joint initiative of Ottawa Business Journal and the Ottawa Board of Trade. This new publication takes an in-depth look at the trends and issues shaping businesses in various regions of the city, while providing highlights of Ottawa Board of Trade initiatives in the community.
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Calling all young business leaders
Nominations are now open for the 2019 Forty Under 40 awards – one of the National Capital Region’s most sought-after and distinguished business accolade for young professionals. Now more than 20 years old, Forty Under 40 is jointly presented by Ottawa Business Journal and the Ottawa Board of Trade and recognizes the region’s rising stars who are leaders within their industry and community. Recipients must be 39 years or younger on June 30, 2019, spend the majority of their work time in Ottawa-Gatineau and be an owner, executive, manager, professional or person with significant business decision-making authority. Selfnominations are encouraged. For more information and to submit a nomination, visit fortyunder40.ca.
Visit ottawabot.ca/events for more information and registration details on these and other upcoming business events. Mayor’s Breakfast Feb. 12 7 a.m. to 9 a.m. Ottawa City Hall Guest speaker: Carleton University president Benoit-Antoine Bacon Local Breakfast Series: South Ottawa Municipal Political Panel Feb. 20 7 a.m. to 9 a.m. Hilton Garden Inn Ottawa Airport (2400 Alert Rd.) CEO Talk: Women In Business March 5 7 a.m. to 9 a.m. Ottawa Art Gallery (50 Mackenzie King Bridge) Mayor’s Breakfast March 19 7 a.m. to 9 a.m. Ottawa City Hall Guest speaker: Goldy Hyder, president and CEO of the Business Council of Canada
Contined from previous page Ottawa city councillor Jan Harder, who was an advocate for the first supercluster bid, says the city – along with Invest Ottawa, agri-tech startup The Growcer and others – have joined partners in Alberta to form Canada’s Farm to Table Agritech Network. The bid will see a similar proposal: to turn the former research farm into a national testbed for agricultural technology such as autonomous tractors and data-collecting drones. Harder says she believes Ottawa has the opportunity to play a significant role in developing emerging agricultural technologies. “We want to support growing practices that consumers want,” says Harder. “We have an obligation, we believe, to farmers and Canadians.”
COMMUNICATIONS TECH The farm, which was previously used for livestock and poultry research, is already home to the private autonomous vehicle testbed currently being developed. Michael Tremblay, the president and CEO of Invest Ottawa, says testing autonomous farm vehicles on this 16-kilometre track will be a natural fit, but the bid – due March 9 – is aimed at doing much more. With 25 buildings sitting unused from the farm’s previous research projects, Tremblay hopes the land will soon be used to test cutting-edge agricultural technology. Ottawa’s contribution to the field of precision agriculture includes its strong communications technology base, says Tremblay, adding that connectivity will
be key to making emerging agricultural technology work in rural farming areas. “There’s a big opportunity (for Ottawa) in terms of making available communications technologies in those remote areas,” he says. Geraldine Wildman, program manager with the city’s rural affairs and economic development departments, says precision agriculture was identified in Ottawa’s latest economic strategy as a key area of focus. Ottawa is also a partner with the Agri-East Lowlands initiative (AEL), which aims to bring together producers and researchers from across the region. “Our goal (is to create) an innovation hub that ... encourages collaboration from across industry and not-for-profit and government sectors,” says Wildman. The possibility of a precision agriculture research hub is an attractive one for Barrhaven and Nepean, which could stand to benefit from increased economic activity nearby. A 2016 economic analysis of Barrhaven by consulting firm Doyletech identified agriculture and agri-tech as a key sector to focus on for the area, according to Barrhaven BIA executive director Andrea Steenbakkers. “We’re really the hub where rural connects with urban,” she says. The BBIA is also a partner in the AEL, which Steenbakkers says hopes to contribute to future work being done on the farm by helping connect rural producers with researchers. “Everybody needs to start working together to brand the area as being rich and innovative in agricultural technology,” she says. “It’s just not known yet.”
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Ontario Chamber of Commerce sends budget wishlist to PC government
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of tax breaks on employer health and dental plans. The report also recommends modifying the Municipal Accommodation Tax to benefit the province’s tourism industry. The report highlights rural broadband internet access as a main infrastructure deficit, and recommends leveraging the private sector to improve upon this area. Recommendations for sustainable spending focus on ways to “more effectively spend taxpayer money,” including using technology in the public sector, implementing user-pay models and using value-based procurement. According to Michelle Eaton, vicepresident of communications and government of the OCC, “cumulative red tape, U.S. tax reforms, economic uncertainty, and a system that discourages growth have led to a staggering scale-up challenge for businesses of all sizes across Ontario.” In the press release, Eaton recommends the provincial government focus on “fiscal balance and smarter spending” to help address this challenge. – OBJ staff
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ith the Ontario PC government’s first budget expected in early 2019, the Ontario Chamber of Commerce has released a report with 13 recommendations to encourage business growth and taxpayer confidence. According to a statement from the OCC, a 2018 survey saw 48 per cent of Ontario businesses indicate a lack of confidence in the province’s economic outlook, with two-thirds citing high tax rates as the reason. The release points out that businesses with an income of less than $500,000 are currently taxed at a flat rate, and recommends the 2019 budget include a variable deduction to better accommodate and support small businesses. The chamber’s key recommendations focus on four areas: competitive taxing, municipalities’ fiscal capacities, Ontario’s infrastructure deficit and sustainable spending. Five of the 13 recommendations are focused on tax competitiveness, including a focus on small business tax deductions and the preservation
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DND’s arrival sparks building boom in Bells Corners New hotels, brewery and homes planned for Nepean community BY ROSA SABA firstname.lastname@example.org
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everal property developers and business owners are taking a renewed interest in Bells Corners, attracted in part by development incentives and the growing presence of the nearby Department of National Defence headquarters. City councillor Rick Chiarelli, a longtime Bells Corners resident and the ward’s representative, says the area was once a bustling shopping district. With tech giant Nortel as an anchor employer, the city’s only IKEA, and what was believed to be more fast food outlets than any other neighbourhood, Chiarelli says Ottawa residents came from all over the city to shop and spend time in Bells Corners. Then a few things happened. New power centres popped up in Kanata and Barrhaven, and Westboro started to boom. Bells Corners wasn’t the only shopping destination anymore, and the neighbourhood started to see a decline. “Suddenly people didn’t have to go to Bells Corners,” says Chiarelli. IKEA’s move to its current Pinecrest location cemented that, he adds. Even the fast food chains were looking elsewhere: one of the first to go was KFC, he remembers, a loss he calls “symbolic.” The Nortel bust in 2009, which affected thousands of employees in Ottawa and splintered the tech scene for years to come, was “the final stake to the heart,” says Chiarelli. “It became clear that we would have to shift,” he says. “It was possible to rebuild the customer base, but we would have to shift our target.”
OPPORTUNITIES Chiarelli says Bells Corners has a geographical advantage: it’s at the confluence of Highways 416, 417 and 7. The majority of tourist traffic comes
Joe Varner is the executive director of the Bells Corners Business Improvement Area. PHOTO BY MARK HOLLERON
“It was possible to rebuild the customer base, but we would have to shift our target.” – Rick Chiarelli, city councillor, College Ward
via those roadways, making hotels a strategic bet for development. The creation of the Bells Corners BIA in 2009 helped to create a voice for the business community, and the city brought in a Community Improvement Plan, which incentivizes redevelopments by giving property owners a break on their future tax bills. Chiarelli says he thinks it’s been one of the most successful such plans Ottawa has seen. One hotel, a Holiday Inn, is already up, and a Hilton Garden Inn and restaurant are slated to move
into a brand-new development coming to 300 Moodie Dr. “It’s made some tough business decisions a lot easier,” says BIA executive director Joe Varner of the plan. But perhaps the biggest boon came in the form of an anchor employer to fill the hole – in this case, the 370-acre Carling Campus – that Nortel had left behind. Around a third of the anticipated 10,000 DND employees have already started work at their new campus, and both Varner and Chiarelli say Bells Corners is already feelings the perks. Some homebuilders also appear to have a renewed interest in Bells Corners. Chiarelli says he’s been in talks with a developer who is planning to construct some 2,000 residential units. If such a project moves ahead, it could dramatically increase the population of the community, which currently has 3,600 homes, according to Chiarelli. Many seniors have expressed their wish to stay in the area, and the opportunity to occupy smaller condo-
OTTAWA BREWERY TAKES OVER FORMER BELLS CORNERS CAR LOT Kichesippi Beer Co., a local brewery, is set to open its new location in Bells Corners this March. Founder Paul Meek says he hopes to contribute to the Bells Corners community with his new tap room, which will occupy a former car dealership on Richmond Road. Meek says he hopes the brewery will be a hub for Bells Corners residents as well as a destination for people across Ottawa. “We’ve always had this goal of being part of the Ottawa experience,” says Meek. The new Kichesippi location will serve beer and a small pub fare menu in addition to housing a cafe. Meek is working on establishing a farmer’s market in a nearby parking lot, and hopes his new location will be a community hub. He’s especially excited about the location’s proximity to the Trans Canada Trail. “(It’s) a really unique opportunity to be in an urban environment … but also to be right up against really one of the coolest things that this country has,” says Meek. “There’s a lot of great stuff happening in that neighbourhood and we’re excited to be a part of it.”
style units will make it easier for existing residents to stay in the community and free up single-family homes for young families to move in, says Chiarelli. Another new face in the neighbourhood is a familiar one: KFC, which returned recently, says Chiarelli. “Symbolically, this is very exciting,” he says.
Commercial, industrial vacancy rates to fall further in 2019, firm says T
hanks to a robust local economy fuelled by growth in the tech and government sectors, vacancy rates in Ottawa’s office and industrial markets are expected to keep falling while rental rates climb toward record highs in 2019, a new report says. In its annual Canadian outlook released in mid-January, commercial real estate firm Avison Young predicts overall office vacancy rates in the capital region will dip to 7.7 per cent by the fall, well below the mark of 10.4 per cent just two
years ago. The report projects vacancy rates in the downtown core will drop below six per cent by the end of 2019. Avison Young said a lack of new inventory means rising demand for the ever-dwindling supply of office space – particularly in top-tier properties located in the red-hot downtown and Kanata markets – will continue to push rents skyward for the next 12 months. “With limited new construction underway, the class-A market has
continued to tighten with net effective rental rates beginning to approach historic highs in that asset class,” the report said, adding that the downtown class-B market has also rebounded from an exodus of federal government tenants a few years ago. Two new office projects slated to launch this year in Kanata – Cominar’s new building at 800 Palladium Dr. and another development from Merkburn – will add another 140,000 square feet of inventory to the west end by 2020, Avison Young said, noting about half of that new space is already preleased. “Strong growth in the technology and engineering sectors will continue to
sustain the Kanata market,” the report said. Avison Young is also predicting the city’s industrial sector will tighten up in 2019, with projected vacancy rates falling half a percentage point to two per cent. More than one million square feet of space is slated to be added to the city’s inventory, the report said, but 96 per cent of that will be swallowed up by e-commerce giant Amazon when it takes over a massive new warehouse off Boundary Road later this year.
RETHINKING RETAIL When it comes to retail, the firm says local shopping malls are being forced to rethink their business models in the face of competition from online retailers and the demise of former anchor tenants such as Sears. It also says light rail’s expected arrival later this year will fuel a new wave of mixed-use development through 2019 and beyond. – OBJ staff
Ottawa’s hottest neighbourhoods C
ontinuing a recent trend, homes in Ottawa’s outlying areas were a hot commodity at the end of 2018, driving up prices in areas such as Leitrim, Manotick and Stittsville closer to levels traditionally seen in popular central neighbourhoods such as the Glebe and Westboro. Housing prices in those rural areas have risen by up to 47 per cent in the past five years, according to data from the Ottawa Real Estate Board. But outlying neighbourhoods aren’t the only ones where housing prices have risen rapidly in recent years. According to OREB data, prices in 35 out of 60 neighbourhoods have increased by more than 20 per cent over the last five years. Here are 20 of the hottest neighbourhoods in Ottawa, ranked by the real estate board’s home price index benchmark.
TOP 20 NEIGHBOURHOODS BY % BENCHMARK PRICE INCREASE OVER FIVE YEARS (All data is courtesy of the Ottawa Real Estate Board)
FEBRUARY 2019 OBJ.CA
2018: $513,500 2013: $385,500 Increase: 33.20%
BETWEEN FRANKTOWN AND FALLOWFIELD ROAD
2018: $470,900 2013: $319,300 Increase: 47.48%
2018: $438,500 2013: $330,500 Increase: 32.68%
MANOTICK VILLAGE AND MANOTICK ESTATES
2018: $706,800 2013: $521,200 Increase: 35.61%
MANOTICK SOUTH TO ROGER STEVENS
MANOTICK EAST TO MANOTICK STATION 2018: $684,200 2013: $510,200 Increase: 34.10%
MUNSTER 2018: $388,600 2013: $290,000 Increase: 34%
2018: $490,200 2013: $374,000 Increase: 31.07%
RICHMOND 2018: $432,200 2013: $330,600 Increase: 30.73%
REMAINDER OF STITTSVILLE AND AREA 2018: $594,800 2013: $455,800 Increase: 30.50%
CARLINGTON, CENTRAL PARK
2018: $529,500 2013: $407,900 Increase: 29.81%
2018: $398,500 2013: $318,700 Increase: 25.04%
RIDEAU TOWNSHIP (SOUTH OF REGIONAL ROAD 6, EAST OF MCCORDICK ROAD)
2018: $294,900 2013: $227,300 Increase: 29.74%
2018: $759,000 2013: $609,300 Increase: 24.57%
STITTSVILLE (NORTH) 2018: $487,300 2013: $378,000 Increase: 28.92%
CARLSBAD SPRINGS 2018: $340,900 2013: $264,600 Increase: 28.84%
NORTH GOWER 2018: $422,800 2013: $330,800 Increase: 27.81%
COUNTRY PLACE, PINEGLEN, CRESTVIEW AND AREA 2018: $661,600 2013: $520,300 Increase: 27.16%
MEADOWLANDS, CRESTVIEW AND AREA 2018: $497,100 2013: $391,100 Increase: 27.10%
KANATA 2018: $416,900 2013: $328,300 Increase: 26.99%
MCKELLAR HEIGHTS, GLABAR PARK 2018: $569,900 2013: $455,000 Increase: 25.25%
Ottawa’s most affordable neighbourhood: BELLS CORNERS AND SOUTH TO FALLOWFIELD Benchmark price:
CANADIAN TIRE CENTRE
MCKELLAR HEIGHTS, GLABAR PARK
MEADOWLANDS, CRESTVIEW AND AREA
CARLINGTON, CENTRAL PARK
sid er Riv
MOONEY’S BAY PARK AND BEACH
MER BLEUE BOG TRAIL
OTTAWA INTERNATIONAL AIRPORT
ad Fallowfield Ro
FRANKTOWN AND FALLOWFIELD ROAD
COUNTRY PLACE, PINEGLEN, CRESTVIEW AND AREA
MANOTICK WATSON’S MILL
Ottawa’s most expensive neighbourhood: ROCKCLIFFE PARK Benchmark price:
MANOTICK SOUTH TO ROGER STEVENS DRIVE
MANOTICK VILLAGE & MANOTICK ESTATES
MUNSTER HAMLET RICHMOND
MANOTICK EAST TO MANOTICK STATION
Homebuyers banking on alternative lenders
Federal government’s tougher stress test rules for mortgages implemented in 2018 pushing more and more borrowers away from the Big Six banks and toward private lenders and credit unions, industry experts say
BY DAVID SALI FEBRUARY 2019
ichael Hapke has a perfect vantage point from which to witness a dramatic shift in the way Canadians are borrowing money to buy homes. A founding partner of Ottawa-based Advanced Mortgage Investment Corp., Hapke has been a private mortgage lender for 15 years. He says tougher stress test rules implemented last year for home buyers who don’t need
mortgage insurance are pushing more and more Canadians to look to alternative lenders that aren’t obliged to follow the Office of the Superintendent of Financial Institutions’ tighter lending requirements. “If you build a wall, you’ll figure out how to go over it, under it or around it,” Hapke says. Hapke’s company is one of hundreds of private mortgage lenders across Canada that don’t take deposits and
are not under the purview of the OSFI. Some of them, like his firm, are mortgage investment corporations – or MICs, as they’re commonly referred to – that pool money from investors and are sometimes run as publicly traded firms. Other types of “alternative lenders” include credit unions, which are provincially rather than federally regulated, and other private lenders that typically charge much higher rates of interest than traditional banks – some as high as
double-digits for second mortgages. Hapke says there’s no question the new stress test rules enacted in January 2018 have led to a spike in business for alternative lenders. “The majority of MICs would tell you, we’re busier than we’ve ever been,” he says. “I could be busier than I’ve ever been, but just because we see (new business) doesn’t mean I want to do it. We are very selective. But there’s definitely more business going to alternative or private sources than in the past.” Recent statistics on the number of Canadians borrowing from alternative lenders prove him right. According to the Bank of Canada, alternative lenders have seen their share of the mortgage market double since 2015, with institutions outside the “Big Six” banks now holding about eight per cent of all Canadian mortgages. The new OFSI guidelines, known as B20, were designed to reduce the number of riskier mortgage loans as home prices skyrocketed in markets such as Toronto and Vancouver and households began racking up more and more debt in order to get into the market. In order to obtain a loan from a federally regulated lender, homebuyers now must prove they can service their uninsured mortgage at a qualifying rate of the greater of the contractual mortgage rate plus two percentage points or the five-year benchmark rate published by the Bank of Canada. An existing stress test already requires those with insured mortgages to qualify at the Bank of Canada benchmark five-year mortgage rate. With rejection rates from traditional lenders rising, Hapke says an increasing number of clients who would have qualified for bank mortgages in the past are now turning to firms like his. “We turn down more, but all of the good stuff that all of the rule changes have left behind is where we really step in and earn our keep, so to speak,” he explains. “These mortgage rule changes have made it more difficult, and what we’re seeing on the private lending side is the quality of business that is coming over to us is second to none. It’s fantastic.”
These mortgage rule changes have made it more difficult (for potential buyers), and what we’re seeing on the private lending side is the quality of business that is coming over to us is second to none. – Michael Hapke, founding partner of Ottawa’s Advanced Mortgage Investment Corp.
difference is a red flag, then he suggests potential buyers think long and hard about whether jumping into the market is a prudent move. “If that is the dealbreaker of buying a home or not, sometimes we have to ask ourselves, ‘Is buying a home (the) right (decision) at this time if $100 is going to be the difference between me being
comfortable with the payments or not?’” Cochrane, too, says it’s important for those considering the alternative lending market to do their homework. “Work with somebody who’s honest and transparent and will provide you with options,” he counsels. “The landscape is constantly changing. Every day there’s something new.”
The new rules have effectively cost potential homebuyers 20 per cent of their borrowing power, Allard says, estimating that that many buyers who would have qualified for a $400,000 mortgage two years ago might only qualify for a $320,000 loan today. “That is a pretty significant difference for a lot of people,” he says. “That is why you’re seeing so many gifted down payments or co-signers or alternative mortgages.” Hapke and many local brokers say they’re no fans of the stricter stress test, arguing measures originally designed to cool overheated markets in two particular cities – Toronto and Vancouver – have wound up hurting homebuyers from coast to coast. “Instead of just punishing the two bad kids in the class, they’re holding everybody back from recess,” Hapke says, a sentiment echoed by Cochrane. “It’s complete overkill, certainly for Ottawa,” he says. “Now a place like Calgary is struggling. The markets that were already having a hard time are having a really hard time now.” Still, broker Dan Faubert says potential homebuyers shouldn’t be scared off by the prospect of turning to alternative lenders if they can’t qualify for a mortgage from a traditional bank. For people with good credit and a steady income, MICs, credit unions and other private lending institutions are often a viable option. “Just because your bank says no, doesn’t mean you can’t borrow money today,” Faubert says. Allard says many alternative lenders today offer rates only “marginally higher” than the big banks, but if a half-point
For example, Hapke says many of his clients are people who’ve split from their spouses but still don’t have a formal separation agreement in place. “If there’s not a separation agreement, (the banks) are not touching it. I’ll still do that deal,” he says. “I don’t need a separation agreement to see that the person’s got a perfectly good repayment history, the person can afford the payments and there’s good equity in the property. That’s a deal I’m happy to do.” Self-employed business owners are also finding it tougher to qualify for mortgages under the new rules because the big banks tend to scrutinize the numbers on their T4 slips without taking into account the equity in their companies, says Ottawa mortgage broker Steve Cochrane. “There are two sides of the coin: You can either claim more income, pay more tax and get a lower (mortgage) interest rate or claim less income, pay less tax and have a higher interest rate (through a private lender),” he says. “It pretty much always comes out in the wash anyway.” Hapke also says he’s seeing more customers who are partnering with friends or getting help with a downpayment from the “bank of Mom
and Dad” in order to jump into the market. Ottawa mortgage broker Chris Allard says he’s noticed a similar trend, with a “significant” uptick in the number of files crossing his desk from people who’ve been gifted funds for a down payment as well as applications co-signed by a friend or relative. “If there’s an option at all for parents or family members to gift funds or to co-sign, they will take that option before choosing to pay a higher mortgage interest rate,” he says.
Don’t stop them now: Ross Video extends streak of record revenues BY CRAIG LORD email@example.com
ou know things are going well at the office when your boss shows up to hand out cheques for $6,000 to you, your co-worker, your team and the rest of the company. But that’s just what’s in store for every employee at Ross Video in February after the Ottawa-based video technology company hit an all-time revenue record in fiscal 2018. Annual revenues were up 20 per cent over 2017, marking the firm’s 27th straight year of record-setting revenues. Ross Video has previously told OBJ its yearly revenues are in the hundreds of millions. David Ross, the firm’s chief executive and OBJ’s 2016 CEO of the Year, dropped another big stat during an interview in mid-January: Ross Video’s profit in fiscal 2018 surpassed the firm’s total net earnings for the entire decade that came before. “We grew everywhere: almost every product line was up, almost every geographic area was up, almost every market vertical was up,” Ross told OBJ. “The economy’s been good, but I think there’s more to it. I think we’ve just been getting it right.” Ross Video’s production equipment is used everywhere from the Super Bowl and other major sporting events to the Oscars and awards shows of that ilk. Ross said the company’s products continue to improve as market demand evolves, making it difficult for competitors to catch up with the wellentrenched, 45-year-old firm.
Ross Video CEO David Ross says the firm is growing across almost every product line and market vertical. FILE PHOTO
STREAMING SUCCESS The company’s headcount recently surpassed 700, and Ross said the firm’s size has allowed it to explore new opportunities with ease. One of the areas in which Ross Video is seeing success is video-over-IP, or streaming
services. For example, the company not only helps to broadcast live sports, but also enables the rising phenomenon of e-sports. “People watching other people play video games has become as big as the Super Bowl now. We’re in the middle
of all that as well,” said Ross. “The more streams, the more content and the more content, they need more technology from Ross.” While much of the firm’s profit is reinvested into the coming year’s R&D and sales budget, Ross said
that giving out bonus cheques to the employees does a lot for morale – his own included. “I like talking to somebody who’s in manufacturing and asking them what they’re going to do with their cheque. It’s like this big found money and it usually doesn’t just go into the bank account,” he said, explaining that many employees opt to spend the windfall on a big vacation or a new car. There will likely be additional cheques to write this time next year, as Ross Video is expecting to hire 100 new employees in the next six months.
WHAT TALENT CRUNCH? Roughly 70 of the hires will be in Ottawa, with the vast majority in R&D positions. Though Ross hears from his fellow CEOs about the tight talent market in the capital, he told OBJ his firm has been hiring one or two new employees each week with little difficulty. His recruiters tell him that it’s Ross Video’s unique story that sells candidates on the company: The ability to point to
a television and say, “I had a hand in making that broadcast happen,” registers with many of the new hires. That pitch, on top of the many emerging technologies that Ross has a hand in developing, has made the company a popular prospect for tech workers in the National Capital Region. At this year’s Super Bowl, for example, Ross Video will have a hand in the fan experience graphics on the big screens at Atlanta’s Mercedes-Benz Stadium. “I don’t think there’s a company in Ottawa that has that wide range of technologies that they integrate together,” Ross said. About a year ago, Ross Video was telling OBJ that the company had just reported its highest-ever quarterly revenues. Ross noted before ending his latest call that as its first fiscal quarter wraps up, the company is slated to finish another 20 per cent higher than last year’s figures. So don’t stop Ross now – they’re having such a good time.
Mayor’s Breakfast Series A unique opportunity to enjoy breakfast with His Worship Mayor Jim Watson and hear from business and community leaders about issues critical to Ottawa. Guest Speaker: Dr. Benoit-Antoine Bacon President of Carleton University Tuesday, February 12, 2019 Location: Ottawa City Hall Registration: 7:00am Buffet Breakfast: 7:30am Presentation: 8:00am
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OBJ.social STORIES AND PHOTOS BY CAROLINE PHILLIPS
TASTE IN THE GLEBE GOES GREEN
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indoor block party. With winter being so cold and dark this time of year, you’re more likely to bump into your neighbour at Taste in the Glebe than on your actual street. A bunch of more established restaurants, including Beckta, North & Navy and Fraser Café, participated in the separate, more expensive premier tasting experience.
an olive oil and balsamic vinegar tasting bar and store. She’s been supporting the community event for the past six years as a Glebe businesswoman. When asked if she’s also a resident of the upscale neighbourhood, she quipped: “I don’t sell that much olive oil.” Nearly 50 food and beverage businesses took part in the $70-a-ticket main event, which has the feel of a giant
So delectable was the food and so hungry was the crowd that this year’s Taste in the Glebe was all about producing zero waste in more ways than one. Organizers of the event on Jan. 17 implemented a number of environmentally friendly initiatives, including the swapping of plastic dinnerware for the real deal. This year, they could afford to rent proper wine glasses, plates and cutlery, thanks to sponsorship from McKeen Metro Glebe. Seen arriving from the century-old, family-owned business was prominent grocer Jim McKeen, who just became a grandfather for the first time. Daughter Rebecca McKeen, a fourth-generation Glebe grocer, gave birth two weeks ago (just you wait, baby Audrey will be stocking shelves and taking inventory before we know it). The giant cocktail party, held in the large domed Scotton Hall at the Glebe Community Centre, showcases all the best restaurants and food specialty shops located in the area. The event also brings in outside eateries, breweries, wineries and distilleries to keep it feeling fresh and exciting for returning attendees. “It’s really become a preeminent food event within the city because it offers so much diversity,” commented Elizabeth Kilvert, owner of The Unrefined Olive,
Longtime supporters included Caren von Merveldt, owner of Von’s Bistro, Flipper’s Restaurant and Pelican Seafood Market & Grill, although lively co-owner Jim Foster was absent this year. Mayor Jim Watson – who is a loyal attendee of Taste in the Glebe – stepped in for the fun photo-op previously mastered by Foster, involving a whole smoked salmon side fillet. Organizers expected to raise about $30,000. The money helps GNAG (Glebe Neighbourhood Activities Group) and its community development fund, which subsidizes families across Ottawa so they can participate in the non-profit organization’s recreational, social and cultural activities. The fund also provides for capital and community projects. Wayne Jennings and his wife Sandy are new to the neighbourhood (they moved onto Clemow Avenue last year). They got tickets to the event as a housewarming gift from their friends, fellow Glebites André Champagne and Katherine Ryan. “This is our way of introducing them to the Glebe,” said Champagne, who also works in the Glebe. He’s a partner at labour and employment law firm Emond Harnden. Jennings is president of Doran Contractors, which is part of Taggart Group of Companies. As the evening wore on, Erling’s Variety appeared to be running low on food. Were they dealing with a particularly ravenous crowd? Had Erling’s not brought enough? “Both; it’s a strategy. Shhh,” replied owner Liam Vainola while placing his index finger to his lips. It became clear he was only kidding after a large platter of fresh oysters and scallop ceviche soon appeared.
STORIES AND PHOTOS BY CAROLINE PHILLIPS
Great Scot! Scottish society hosts Gala Burns Supper Should auld acquaintance be forgot, then it very well might be time to reconnect with them through a wee dram and a good blather at a Robbie Burns Day dinner. The Gala Burns Supper and Ceilidh, held in the Trillium Ballroom of the Shaw Centre on Jan. 19, was part of a month-long celebration of Scottish culture organized by the Scottish Society of Ottawa. The special
evening embraced all things Scottish, from whisky and haggis to bagpipes and highland dancing to Scotlandâ&#x20AC;&#x2122;s favourite poet, Robert Burns. Robbie Burns Day dinners usually take place on, or around, Burnsâ&#x20AC;&#x2122;s birthday on Jan. 25. The formal part of the Gala Burns Supper began with the head table guests being piped into the room. Next to be paraded in was the haggis, a
Attendees came out in full Scottish regalia for the Gala Burns Supper and Ceilidh.
traditional Scottish dish consisting of minced sheep organs. You could call it an acquired taste. Bill Carroll, host of The Morning Rush on 580 CFRA, was a wonderful and witty emcee. He nailed the Scottish accent, particularly the long rolling of the r. On a more sombre note, he asked
everyone to take a moment to quietly remember recent OC Transpo bus crash victim Judy Booth, a well-known and loved member of the pipe and drum community. The addressing of the haggis was carried out by his former colleague Brian Lilley. He just left CFRA to join
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the Toronto Sun as a full-time political columnist. That means he’ll be seeing a lot more of Ontario cabinet minister Lisa MacLeod, who’s also the MPP for Nepean. She attended the gala with her husband, Joe Varner, executive director of the Bells Corners BIA. The MacLeod tartan was a popular one that night. It was worn by Lisa MacLeod as well as by Heather Theoret, whose maiden name is MacLeod. She’s the protocol officer for the City of Ottawa and serves as Scottish Society of Ottawa board secretary. Looking distinguished in his Fraser clan tartan was Graham Fraser, who later gave the traditional Toast to the Lassies – an essential part of any Burns
Supper. The response was delivered by MacLeod. Fraser was named 2018 Scot of the Year by the Toronto-based Scottish Studies Foundation. His ancestors sailed to Canada from Kirkhill, outside Inverness, Scotland, in 1807. They settled in Pictou County, N.S. Fraser has had a distinguished career in journalism, as did his father, Blair Fraser. He also served for 10 years as Canada’s official languages commissioner, until 2016. He’s currently a visiting professor at the McGill Institute for the Study of Canada and senior fellow at the Graduate School of Public and International Affairs at the University of Ottawa. VIPs also included Catherine McKenna, federal minister of environment and climate change. She was invited to make a toast to “the Immortal Memory of Robert Burns,” who penned Auld Lang Syne and many other classic works. Also spotted in the crowd were Commander Neil Marriott, the United Kingdom’s naval and air attaché to Canada, and Catriona Little, who arrived here last September as part of the Scottish government’s efforts to strengthen economic ties with Canada. She’s head of its new Scottish government affairs office, based in the British High Commission in Ottawa. The dinner, which raised money for the Make-A-Wish Foundation, also featured entertainment by the Pipes and Drums of the Cameron Highlanders, Ernie Fraser and Company, The Brigadoons, the Ottawa Highland Dancing Association and the Ottawa branch of the Royal Scottish Country Dancing Association.
STORIES AND PHOTOS BY CAROLINE PHILLIPS
TALK HOCKEY DINNER SHOOTS TO RAISE $20K FOR RECREATION PROGRAMS Young hockey players will get a chance to test their passing skills with members of the Ottawa 67’s, but it will be with salt shakers and bread baskets rather than hockey pucks. The OHL junior hockey team and its coaching staff will be the special guests of an upcoming fundraising dinner, Talk Hockey, on Wednesday, Feb. 20 at the revitalized Rideau Sports Centre (formerly the Rideau Tennis Club). The first-time gala aims to raise $20,000 for after-school sports and recreation programs for underserved children and
youth living in Strathcona Heights, home to one of the largest Ottawa Community Housing neighbourhoods. The $75-a-plate lasagna dinner is targeting minor hockey players and hockey parents who have an interest in learning more about the sport from the perspective of the Ottawa 67’s. The dress code is simple: hockey jerseys. Organizers are working with the Ottawa Community Housing Foundation, which recognizes the importance of keeping kids active. The evening is being put together by a
meet our menu
A new season brings new food and a new menu to the Shaw Centre with fresh, organic and sustainable ingredients. Chef Patrick Turcot works with local suppliers to secure the very best in farm to table produce. Our talented kitchen creates incredible, palate-pleasing dishes with élan and ﬂair. Prepare to be wowed as Canada’s Meeting Place becomes Canada’s eating place!
From left, community leaders David Gaylord, Chris Bockstael and Patrick Champagne are organizing a fundraising dinner involving the Ottawa 67’s in order to help more kids gain access to after-school sports at the Rideau Sports Centre.
group of young professionals in their 20s led by Chris Bockstael, a financial planner with ONELIFE Wealth Management. He’s recruited several of his friends, including David Gaylord, who works in executive expansion at Shopify; Patrick Champagne, executive assistant to the
mayor; and Zach Quevillon, a teacher who’s also heavily involved with the Ottawa Lions Track and Field Club. Assisting in an advisory role is Dr. Nalin Bhargava, team dentist for the Ottawa Redblacks, Fury and 67’s. For tickets, go to strathconatigers.ca.
strategic alliances with the City of Ottawa’s building and planning departments and the region’s consultant and contractor communities. This streamlines and accelerates the process on behalf of their tenants significantly, and has resulted in numerous successful projects over the past two decades. “We want the best for our clients, and that is our mandate,” says Goldstein. “We offer these services not only to maintain the properties, but also to improve them. What’s important is that the properties match the tenants’ requirements both functionally and esthetically.” Trend Micro’s current project includes 29,925 square feet incorporating the ground and second floors and several new spaces including a new lobby and multiple labs. Their third and fifth floor renovations were completed last year.
Three key steps in office renovations
Trend Micro expands Kanata office KRP Properties acts as single point of contact for renovation, streamlining project.
How can a team that’s spread out across thousands of kilometers collectively tackle an ambitious project in Canada’s capital? Trend Micro, a global IT security firm, has consultants spread out across Canada and the U.S. As the firm embarked on a major expansion and renewal of its Kanata offices, it was rarely possible to have the entire project team gather in a single room to review the plans and progress in person. This was one of the challenges when Trend Micro began working on renovating the first and second floor of their building. “When there’s a significant issue, you would
ideally want everyone involved to be on site to review and resolve things immediately. If not, delays to the work are likely and delays can be expensive,” says Richard Goldstein, Director of Construction at KRP Properties, Trend Micro’s landlord, construction project manager and property manager in Kanata. KRP and PCL, the constructor, implemented weekly virtual meetings with the team and biweekly on-site visits where they could brainstorm and troubleshoot before issues arise. “We want to keep everyone aligned and have creative dialogue,” Goldstein adds. KRP Properties took over management of Trend Micro’s space two years ago when it acquired 40 Hines Rd. At the time, the growing tech firm was looking to expand. For many tenants, this would have involved coordination with and between their landlord, property manager and construction teams. KRP Properties however, offers a single point of contact for tenant improvement works and expansions, with in-house construction and project management services and
For a project to be successful, Goldstein says tenants need to work with professionals and contractors they trust and that understand the tenants needs. “You need to have a comfort factor with your design team.” says Goldstein. “If you all understand what the aesthetic and functional programming requirements are, then you are likely to be on the same page.” Step two is managing the procurement process. Goldstein says when going through procurement for projects such as Trend Micro’s expansion, the key is transparency. Any information should be well organized and easy to understand by all stakeholders in the process. “The construction industry, like any specialty, has certain conventions and nomenclature that can be thought of as a language from another country,” says Goldstein. “You need to be cognizant of your audience when communicating in both graphic and verbal modes so that communication is clear and concise.” For companies with multiple projects, having a facility manager is crucial. Trend Micro’s facility manager works closely with KRP Properties, which helps in team building, keeps communication open and minimizes potential delays associated with the approval process. “Trend Micro and their facility manager really understands the process because they’ve been through this before.” says Goldstein. “They’ve allowed us to put together a team that works well together and is invested in the resources and procedures to make the project successful.”
CONNECTING TECH IN OTTAWA
Ottawa-Gatineau startups building momentum in proptech BY CRAIG LORD email@example.com
amie Blades was raised in real estate. The Ottawa entrepreneur’s family flipped some 15 houses over the course of his youth, giving him a precocious familiarity with mortgages, home insurance, contractors and, of course, buying and selling property. It comes as no surprise, then, that he’s worked as a mortgage broker for the past 15 years since graduating from university. Along the way, Blades picked up an affinity for building websites and realized that the old ways of doing things in real estate were quickly becoming outdated. “I started to see some inefficiencies in the space and thought that there could be a better platform for consumers and the industry alike to connect,” he tells Techopia. Today, Blades is the CEO of Homicity, a marketplace for consumers to search for and filter through home listings, rental properties, insurance quotes, home service providers and even mortgage rates from 50 lenders across Canada.
Homicity is not alone in OttawaGatineau’s emerging proptech space, a sector that’s unveiling opportunities to change the way we buy, sell and live in our homes. Investors are clamouring to proptech – a broad category that covers technology related to our home lives and real estate services – according analyst firm CB Insights, which projected the sector would add US$5.2 billion to global investment activity in 2018, up from US$3.4 billion the year before. While a one-stop shop for housing searches has long been the holy grail for the residential real estate market, Blades says Homicity stands out from the crowd thanks to the speed of its searches and real-time filtering functions. At its heart, Homicity is meant to help buyers find the perfect home that’s right for them. While Blades says the goal is to put consumers “in the driver’s seat,” Homicity is also looking to add the perfect co-pilot to the housing search: artificial intelligence. Thanks to a grant from IRAP, the 15-person startup has been building
Jamies Blades, CEO of Homicity, has grown up immersed in the real estate business. Photo provided an AI-powered property recommendation tool. The AI would learn what’s important to a prospective buyer – synthesized into what Blades calls a “livability score” – from questions as well as the user’s searches. For example, if the tool noticed the user was looking for three-bedroom bungalows near schools and along transit routes, it might suggest a nearby property that nearly fits the search’s parameters but is slightly outside the defined area.
If this AI sounds like it’s doing a real estate agent’s job, that’s because it is. Blades sees a change on the horizon, with agents taking their hands off the wheel in housing searches and shifting to the backseat, offering tips in negotiations and guiding buyers through the complexity of buying a home. “Real estate transactions can be confusing and they can cost you money in the long run, if not done properly. So
“People are more and more busy now. They need their homes to be working for them, whether they’re there or not.” – Erin Fenn, COO of 1VALET a real estate agent can help guide your offer, whether that be on the purchase or sale side.”
HOME IS WHERE THE WIFI CONNECTS AUTOMATICALLY
CLEANTECH IN OLD BUILDINGS
tells Techopia, and has its devices in buildings with most of Ottawa’s major property managers such as Primecorp, District Realty and CLV Group. Ecovena prepares business cases for each prospective client, highlighting how its tech can pay for itself in a number of years. Boicey says the firm has been able to make good use of rebate programs to sweeten the deal for building owners. “There’s always good motivation when goals align that are both economical and ecological,” he says. While the retrofit play might not be as sexy as other areas of proptech, Boicey says there’s a definite market demand to reduce energy waste. Newer buildings will likely have more energy-efficient solutions built in, but he says the longterm play to reduce the greenhouse gas emissions from existing buildings is more rewarding. “We’d rather keep them standing than have them mowed down and have all the energy and carbon footprint of a brand new building just because the original was a bit expensive to maintain. So I think we’re fighting the good fight here.”
While 1VALET is making its play on the cutting edge of real estate, Ottawa’s Ecovena is finding its niche in the vast supply of old buildings running on electrical heating. The five-person startup – a member of Invest Ottawa’s accelerator program,
alongside Homicity – launched in 2011 as a chance for property managers to cut down on expensive heating bills. One of the main problems with the electrical heating systems common to buildings from the 1960s to 1980s is a lack of precise control over the temperature in individual units. This leads to a common symptom of wasted energy, one Ecovena illustrates prominently on its homepage: tenants with windows open in the dead of winter just to keep their units at a liveable temperature. The firm builds and manufactures devices that can be installed in each unit of a building to not only regulate the heating demands of individual tenants, but also give the manager the ability to centrally track energy usage from the cloud. “It’s kind of win-win-win in a way because it saves energy, reduces greenhouse gases, and it does make the buildings more profitable,” says Ecovena founder Trevor Boicey. The bootstrapped firm has been profitable for the past few years, Boicey
On the other side of the Ottawa River, Gatineau’s 1VALET is using proptech to more closely connect residents to their buildings. The firm, founded by Devcore Group boss Jean-Pierre Poulin, raised $5 million in funding a few months ago, mostly from well-heeled angels in the National Capital Region. The firm’s solution looks to automate aspects of daily life in a condo or apartment building. For example, just by having your phone in your pocket as you walk into the complex, the smart building tech could unlock the door for you, call the elevator and automatically send you to your floor – just as your thermostat kicks on and warms to room temperature in anticipation of your arrival. That’s just the tip of 1VALET’s full-suite solution, says Erin Fenn, the firm’s chief operating officer. The mobile app includes a message board where
residents can post about parties or yoga classes as well as a marketplace function with local service providers registered to make house calls for hair cuts or massages, as a couple of examples. Launched in mid-2017, 1VALET has been piloting its features with Devcore’s buildings and has gotten into several projects in the Greater Toronto Area. Fenn says the app has already proved a value-add for property managers hoping to entice long-term renters to extend their leases. “People are more and more busy now. They need their homes to be working for them, whether they’re there or not,” she says. “So this is a huge selling feature. It’s a massive upsell.”
Why Ottawa’s Corsa Technology is a tech firm to watch in 2019 BY CRAIG LORD firstname.lastname@example.org
here’s no use making a prediction if you can’t back it up. To that end, Techopia Live brought Corsa Technology on for the first show of the new year to talk about why the company’s approach to cybersecurity has made it one of our tech firms to watch in 2019. Corsa Technology has raised more than $20 million across multiple rounds of funding since it was founded in 2013. The company has attracted the attention of investors for its expertise in softwaredefined networking, a skillset to which it recently turned to address a growing problem in cybersecurity. High-capacity networks, the kinds used by large enterprises such as banks, are faced with a growing volume of traffic generated by streaming services and the Internet of Things. On top of that, data flowing into networks these days is largely encrypted, which means information must be decrypted before potential threats can be assessed and neutralized. “They’re not able to keep up with that volume of data,” Carolyn Raab, Corsa’s co-founder and vice-president of product management, told Techopia Live. Traditional security solutions such as firewalls have been slow to decrypt and process the new waves of data and don’t scale well, Raab said. Corsa’s solution to this problem? A programmable hardware device that plugs into a server to horizontally offload and virtualize data flowing through a network, essentially compartmentalizing and processing smaller chunks of information to address potential threats. The result, Raab said, is a product that can handle an ever-growing flood of data at scale. “The heart of everything we do is scaling network security … We found our
Corsa Technology co-founder and vice-president of product management Carolyn Raab. Photo by Craig Lord. technology could be perfectly used to address the gap.”
THE ‘AHA MOMENT’ Seeing this opportunity in decrypting and processing the flow of information into enterprise networks was the “aha moment” at Corsa, Raab said. With a technically sound product already in place from its origins in software-defined networking, the company has since been spending the past few years orienting its sales teams to sell a cyber solution, which she said has been the primary challenge facing the company. “That’s probably a consistent answer in the Ottawa market but also in
delivers weekly interviews with Ottawa’s hottest startups and coolest tech execs. Visit bit.ly/TechopiaLive for the latest episodes.
cybersecurity. It’s getting out to market,” Raab said. To hear more about how Corsa
Technology keeps up with changes in the demanding field of cybersecurity, watch the video above.
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Solink’s Cory Michalyshyn (left) and Mike Matta. File photo.
Solink raises $16.3M series-A round BY CRAIG LORD email@example.com
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ne of Ottawa’s fastest-growing companies has gone back to the well of its existing investors for a follow-on round of financing. Solink, which develops business intelligence and surveillance video software, announced Monday it has raised $16.3 million in series-A funding. The round, comprised entirely of existing investors, was led by Valor Equity Partners with Generation Ventures, ScaleUp Ventures and the Business Development Bank of Canada’s IT Venture fund also contributing. For Solink CEO Mike Matta, the influx of cash is validation that the company is on the right trajectory and its backers continue to have faith in the product. Solink’s software collects and interprets data from video surveillance technologies for brick-and-mortar businesses. While the security element usually gets the company in the door to customers in the banking and quick-service food industries, Matta says Solink’s full value is revealed when the firm’s artificial intelligence tracks day-to-day operations and flags areas of concern. “We’re getting customers that are opening the app every single day asking questions that live outside of security, like, ‘Did this person show up for work? Did the
garbage get collected?’” Matta says. “Those are questions that naturally get answered through video. And customers are getting answers for their questions through our product.” Solink has twice been named to OBJ’s list of Ottawa’s fastest-growing companies and last year was one of Techopia’s tech firms to watch. The company counts franchisees of Tim Hortons and Five Guys Burgers & Fries as well as various credit unions and financial institutions among its customers. To achieve Solink’s growth plans – Matta told Techopia just last month that the 60-person company is aiming for 100 employees by the end of 2019 – the firm knew it would need a bit more cash in hand. When they started reaching out to investors, however, Solink’s executives found the demand for its product allowed the team to be selective in who it brought on board. “This is a relationship and a partnership with our investors,” Matta says, adding that the company wanted to get the best bang for its investors’ bucks. Even before Chicago-based Valor Equity got involved in Solink’s seed round, Matta says the company had a “great relationship” with the fund, which counts SpaceX and Tesla Motors among its portfolio. Ultimately, Solink took an oversubscribed round to accommodate investor demand.
38 FEBRUARY 2019
THE LIST Company/Address Phone/Fax/Web
1 2 3 3 5 6 6 8 9 10 10 12 12
No. of brokers doing more than 50% (in dollar value) of their work in commercial real estate
No. of national commercial agents
Local offices / national offices
Local support staff
Year established in Ottawa
Nathan Smith senior vice-president and managing director
Full service: office, industrial and retail leasing; land, multi-family and investment sales; property tax consulting; appraisal; project management; lease administration; market research; advisory and consulting services
Shawn Hamilton senior vice-president and managing director
Tenant representation; office; industrial and retail leasing and sales; investment and multi-residential sales; consulting/client advisory services; project management; appraisal; property management; capital markets; hotel services; workplace strategy; global workplace solutions; facilities management Full-service commercial: leasing; office/industrial/ retail; multi-residential and apartments; asset management; property management; mortgage brokerage; investment sales; appraisal; project management; valuations
Local CEO or designated broker
Michael Church managing director and principal
Avison Young 800-45 Oâ&#x20AC;&#x2122;Connor St. Ottawa, ON K1P 1A4 613-567-2680 / 613-567-2671 avisonyoung.com
Colliers International 930-340 Albert St. Ottawa, ON K1R 7Y6 613-567-8050 / 613-567-8035 colliers.com/ottawa
Warren Wilkinson managing director
Leasing (landlord and tenant representation); investment sales; real estate management services; valuation and advisory services; project management; consulting
Coldwell Banker First Ottawa Realty 2 Hobin St. Ottawa, ON K2S 1C3 613-831-9628 / 613-831-9626 firstottawarealty.com
Ross Webley president and broker of record
Tenant representation; office, industrial, commercial, land and retail leasing; investment sales; advisory and consulting services; business sales
Century 21 Explorer Realty 23-2525 Carling Ave. Ottawa, ON K2B 7Z2 613-253-4253 / 613-257-2593 century21explorer.ca
Ralph Shaw CEO and broker of record
Full service: Retail and office leasing; land sales; commercial and industrial sales and leasing; agriculture; mortgage financing.
Primecorp Commercial Realty 301-275 Bank St. Ottawa, ON K2P 2L6 613-722-2020 / 613-722-9898 primecorp.ca
Sam Firestone broker of record Nick Pantieras and Aik Aliferis principal brokers
Commercial real estate broker and advisory firm serving institutional, public and multinational corporate investors, private owners, major space users, developers and lenders.
Royal Lepage Team Realty 200-1335 Carling Ave. Ottawa, ON K1Z 8N8 613-725-1171 / 613-725-3323 searchcommercialrealestate.ca
Kent Browne owner and broker of record
Commercial office, retail and industrial leasing; land and building sales; investment sales; multi-family sales
Coldwell Banker Sarazen Realty Brokerage 1090 Ambleside Dr. Ottawa, ON K2B 8G7 613-596-4133 / 613-596-5905 coldwellbankersarazen.com
Colin Sarazen CEO, broker of record
Real estate sales and leasing; multi-residential; retail; industrial; office; institutional; land; market research and consulting services
Royal Lepage Performance Realty 165 Pretoria Ave. Ottawa, ON K1S 1X1 613-238-2801 / 613-238-4583 performancecommercial.ca
Pierre de Varennes owner and broker of record
Commercial leasing; industrial and retail leasing; multi-family; apartments; land; investment sales
CLV Realty Corp., Brokerage 485 Bank St. Ottawa, ON K2P 1Z2 613-728-2000 / 613-728-1107 clvrealty.com
Mike Kelly broker of record
Real estate sales and leasing; property management; financial services; construction and development
Cresa Ottawa 1000-130 Slater St. Ottawa, ON K1P 6E2 613-688-7200 / 613-688-7201 cresa.com/ottawa
Martin Aass managing principal and broker of record
Strategic planning; transaction, project and relocation planning management; facilities management; workforce and location planning; portfolio/lease administration; capital markets; supply chain management; sustainability; sublease and disposition
Decathlon Commercial Realty Corp. Brokerage 217-430 Hazeldean Rd. Ottawa ON K1L 1T9 613-219-2559 decathloncommercial.com
Philip Zunder president and broker of record
Commercial real estate sales and leasing including office, retail, industrial, hotels, apartment buildings, retirement homes, land and syndication.
Ransome DrCar vice-president and practice lead
Tenant representation; project and facility management; lease administration; national brokerage solutions; office/ industrial leasing; investment sales and management; retail sales; leasing and investments; land sales; multi-residential investment
Ken Dekker broker of record
Commercial leasing; industrial; institutional; appraisals; property management; consulting; retail; multi-family; residential; apartments; market research.
JLL 1004-275 Slater St. Ottawa, ON K1P 5H9 613-656-0145 / 613-288-0109 jll.ca Keller Williams Solid Rock Realty 5 Corbus Crt. Ottawa, ON K2E 7Z4 613-733-3434 kwsolidrock.com Cancorp Realty 5-2100 Thurston Dr. Ottawa, ON K1G 4K8 613-233-3333 / 613-248-8131 cancorprealty.com Metro Suburban Realty 302-370 Churchill Ave. N. Ottawa, ON K1Z 5C2 613-723-2222 / 613-723-2345 metro-sub.com
Jason J. Kukk president and broker of record
Sale and acquisition of investment properties (single buildings and portfolios); syndication. Apartment buildings. Sale and leasing of retail, office, industrial, commercial and institutional assets; property management; consulting.
Joel Freedman broker of record
Sales and leasing of industrial, office and retail properties; land and building sales; investment sales; leasing; subletting and consulting
CBRE 333 Preston St., 7th Fl., Preston Square, Tower 1 Ottawa, ON K1S 5N4 613-782-2266 / 613-782-2296 cbre.ca
(RANKED BY NUMBER OF LOCAL COMMERCIAL AGENTS. NOTE: FIRMS MUST OFFER TENANT REPRESENTATION TO QUALIFY.)
Cushman & Wakefield Ottawa 700-99 Bank St. Ottawa, ON K1P 6B9 613-236-7777 / 613-236-5958 cwottawa.com
LARGEST COMMERCIAL REAL ESTATE BROKERS
FOR THE RECORD
PEOPLE ON THE MOVE
An old sports adage says lessons learned in defeat pave the way for future victories. Though he’s not an athlete, David Gourlay is here to tell you there’s more than just a grain of truth in that. The veteran public relations expert is probably best-known for the four years he spent as president of the minor-league Ottawa Champions baseball club and his failed bid for municipal office last fall. After losing the race for councillor in Kanata North to Jenna Sudds in late October, Gourlay immediately tapped into his wide network to figure out what other opportunities might await him. It didn’t take long for Gourlay to land an offer practically tailor-made for his skills. In mid-January, the 48-yearold Carleton University alumnus began his new career path as senior manager of major gifts at the Ottawa Sports and Entertainment Group’s charitable arm, the OSEG Foundation. In many ways, he says, it’s a dream job – and one he never would have been in a position to take had he not lost his run for council. “I think failure is a very important business asset,” Gourlay says. “When you fail at something, you learn a lot about yourself. I think that prepares me for a role like this because you become a lot more humble; you become a lot more focused.” After spending much of the past year pounding the pavement soliciting votes, Gourlay says his new job will still involve knocking on plenty of doors. This time,
PHOTO BY MARK HOLLERON
David Gourlay/OSEG Foundation he’s looking to round up corporate funding and partnerships for the OSEG Foundation, which was launched in 2017 by the owners of the Redblacks, Fury and 67’s to provide assistance to children and youth involved in amateur sports in Ottawa. Gourlay, who grew up a die-hard Expos and Canadiens fan, believes sports can play a transformative role in the lives of underprivileged and special-needs children. He is president of the Miracle League of Ottawa, which operates a baseball diamond in Orléans equipped with expanded dugouts and a non-slip rubberized surface designed for kids with physical and mental disabilities. The league is also building a fully accessible playground set to open later this
spring that includes swing sets that accommodate wheelchairs. Gourlay believes the OSEG Foundation, which has already raised well over a million dollars from a slew of local donors, can have the same type of impact on the community. “Sports gives kids the confidence to go out there and pursue their dreams, and that’s exactly what we want to do,” he says. “I’ve seen it. That’s very empowering for me.” Gourlay says he remembers attending a ball game for children with disabilities several years ago where kids were going to the bathroom in their parents’ cars because there were no accessible facilities at the park. “There’s no dignity in that,” he says. “If OSEG Foundation can level
that playing field and do what we can through football, soccer, hockey … there’s all kinds of ways we can contribute.” Gourlay says he hopes the foundation can partner with corporate donors and groups such as the Boys and Girls Club to help raise awareness of the need for better sports infrastructure for players of all socioeconomic backgrounds and abilities. “That’s part of our job at the OSEG Foundation and other foundations is to educate the public,” he explains. “I don’t hear a lot of people talking about the power of sport. We want people to see sport as a true community builder.” – David Sali
PEOPLE ON THE MOVE Martin Gomez has joined the Ottawa Senators as the club’s executive creative director. Gomez is the founder of digital agency Fancy Boys, which was acquired by McMillan in 2018. Senstar has named Kristen Cory its new vice-president of sales for North America. Cory brings nearly 20 years of experience in senior management in the United States and Canada, working for different enterprises in business development and executive sales roles.
HATS OFF Hydro Ottawa has been named one of Canada’s Top Employers for Young People for the sixth consecutive year.
CONTRACTS The following contains information about recent contracts, standing offers and supply arrangements awarded to local firms. Inter Outaouais Inc. 164 Jean-Proulx Rd. Trucks, medium, van body Buyer: DND $4,132,837 Telesat Canada 160 Elgin St. Specialized satellite earth station equipment requirements Buyer: Shared Services Canada $2,486,000 Enterprise Rent-A-Car Ltd. 2300 Stevenage Dr. 2019 - car rental directory Buyer: PWGSC $1,500,000
The designation recognizes the employers that offer the nation’s best workplaces and programs for young people just starting their careers. Employers are evaluated by the editors of Canada’s Top 100 Employers on the programs they have to attract and retain younger workers, including benefits such as tuition assistance and the availability of co-op or work-study programs. Ottawa cloud automation firm Embotics announced it was named a leader in the first Gartner Magic Quadrant for Cloud Management Platforms. Gartner Peer Insights documents customer experience through verified ratings and peer reviews from enterprise IT professionals.
Francis Canada Truck Centre Inc. 3818 Russell Rd. Heavy tandem trucks Buyer: Parks Canada $1,495,662
BAE Systems (Canada) Ltd. 1200-220 Laurier Ave. W. Victoria class spares Buyer: DND $834,313
WorldReach Software Corp. 250-2650 Queensview Dr. Scientific data collection field (R&D) Buyer: Canada Border Services Agency $1,385,380
Excel Human Resources Inc. 300-102 Bank St. Informatics professional services Buyer: PWGSC $785,208
Dominis Engineering Ltd. 15-5515 Canotek Rd. Other engineering studies Buyer: Transport Canada $960,500 ESRI Canada Ltd. 430-1600 Carling Ave. ADP software Buyer: Environment Canada $870,005
Tannis Trading Inc. 2390 Stevenage Dr. Meat, fish and poultry Buyer: DND $738,764 EMCON Emanation Control Ltd. 360 Terry Fox Dr. Communications security equipment and components Buyer: RCMP $668,368
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Who will win the race for AI supremacy? A new book argues China is set to surge ahead of the U.S. as the global leader in artificial intelligence BY MICHEÁL KELLY firstname.lastname@example.org
Kai-Fu Lee, AI Superpowers: China, Silicon Valley and the New World Order, Boston Houghton Mifflin, Harcourt, 2018.
There has been much discussion recently about China’s becoming a scientific and innovation superpower. If, however, you accept the current narrative coming out of Washington, China is still a predatory economy built on products and technology stolen from the West. While it does have a history of stealing technology and copying products, this narrative overlooks the fact that China today is moving quickly to assert dominance in a number of critical areas of science and technology. Perhaps one of the most important of these is artificial intelligence or AI. The contest for leadership in this area is often portrayed as the next space race. The outcome is likely to have a major impact on the global economic and political landscape of the 21st century. Kai-Fu Lee argues that this race essentially involves two major players: China and the United States. He suggests that other countries such as Canada, currently an important player in AI research, lack the AI venture capital ecosystems and the large user bases needed to generate the volumes of data required as AI moves from the research to implementation phase. While the author acknowledges that
the U.S. has been the global leader in AI to date, he predicts that it will be overtaken by China within a decade. This is a book that merits reading by both business executives and policy-makers. It covers a lot of ground and provides some interesting and sometimes controversial insights into the entrepreneurial cultures of China and Silicon Valley. It also points to the need for government policy-makers to start considering how they will respond to the substantial economic and societal dislocation that AI’s implementation has the potential to cause. A leading AI researcher, Lee is currently chairman and CEO of Sinovision Ventures, a tech-focused investment firm based in China. Prior to that, he was president of Google China. His argument about eventual Chinese leadership in AI relates to the advantages he sees it having in four areas critical to winning the AI race. These are: abundant data, tenacious entrepreneurs, welltrained AI scientists and a supportive policy environment.
Great River Media, 250 City Centre Ave., Suite 500, Ottawa, Ontario, K1R 6K7 obj.ca TELEPHONE Phone: 613-238-1818 Sales Fax: 613-248-4564 News Fax: No faxes, email email@example.com
China’s major advantage as AI moves into the implementation phase is the abundance of data available to it. The country currently has more than 800 million internet users, more than the U.S. and all of Europe combined. Sixty-five per cent of China’s more than 753 million smartphone users have enabled mobile payments, and Chinese e-commerce purchases are roughly double that of the U.S., a gap that is growing. Data from mobile payments is generating rich consumer data which will give China a major advantage in developing AI-driven services. This includes data on users, their location, how they commute, what foods they like and where they buy. China’s second advantage is a growing number of well-trained AI engineers combined with generation of entrepreneurs who have been forged in one of the most cutthroat competitive environments on the planet. These will play a more important role than elite researchers as AI moves into the implementation phase with a focus on creating game-changing companies. Finally, China’s government-led AI plan, which aims for the country to become the global leader in AI by 2030, includes research subsidies, venture capital investments and special development zones and incubators across the country. While Lee acknowledges that Chinese innovation policy is often wasteful and inefficient, he views it as ultimately being effective in achieving its objectives. In addition, he sees the country’s totalitarian political culture as paving the way for the faster implementation of this technology. Micheál Kelly is dean of the Lazaridis School of Business and Economics at Wilfrid Laurier University in Waterloo and the former dean of the University of Ottawa’s Telfer School of Management.
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