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Contractor Advantage COMPLIMENTARY

C a n a d a’ s

May/June 2010

M a g a z i n e

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P r o f e s s i o n a l

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Plus:

The

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May/June 2010 Vol. 16 No. 3

Contents ®

Castle Building Centres Group Ltd., with building supply outlets in every province, is Canada’s leading supplier of lumber and building materials to professional contractors, builders and renovators. Publications Mail Agreement #40006677 Return undeliverable Canadian Addresses to: 6375 Dixie Rd., Suite 400 Mississauga, Ont. L5T 2S1

Editorial Director Castle Building Centres Group Ltd. Diane Jones Managing Editor Paul Barker Art Director James Wardell Contributors Nestor E. Arellano Patricia Atallah Mark Beckham David Chilton Lawrence Cummer Jennifer Diao Lee Froschheiser John G. Smith Advertising Enquiries Vendors whose products are carried in Castle Building Centres stores have the opportunity to advertise in

Features The colours of money / 20

Innovations made to the formulation of the pigments used to enhance the look of vinyl siding have created a wide range of choices from deep reds to dark charcoals.

Gazebos: Building outside the box / 26

There appears to be pent-up demand for gazebos now that the recessionary concerns of the past 18 months are waning.

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Form fitting / 32

The makers of Lego probably deserve some of the credit for training generations of contractors.

Panel preferences / 38

For contractors, the right drywall and related products will lead to projects that stand the test of time.

Maximizing the space / 45

While many people might be moving into smaller homes, they still need space to accommodate wardrobes and accumulated belongings.

How safe is your work site? / 55 Keeping a work site safe is not easy even if everyone makes every effort to avoid accidents and hazards.

Contractor Advantage C a n a d a’ s

M a g a z i n e

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P r o f e s s i o n a l

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C o n t r a c t o r s

For more information or to reserve space in the next issue, contact: Diane Jones Advertising Manager, Phone: 905-564-3307 Fax: 905-564-6592 E-mail: djones@castle.ca Published and designed exclusively for Castle Building Centres Group Ltd. by Business Information Group Material Contact: Jessica Jubb 416-510-5194

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Departments NEWS WATCH / 5

Coverage of Castle AGM

NEW PRODUCTS / 9

New and improved products

LEARNING CURVE / 13

On-the-job assistance

BUSINESS STRATEGIES / 14

Advice for acquisition candidates

SMART MONEY / 16

A tale of two frameworks

ECONOMICS 101 / 18

Trigger points and you

CASTLECARE / 62

Critical illness coverage

Copyright 2010

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News Watch

News All Good On Economic Front By Paul Barker

Photos: PAUL BARKER

Another major indicator that the economy is on the mend has occurred with the Canada Mortgage and Housing Corporation (CMHC) announcing that total housing starts rebounded in late 2009 and will continue to strengthen this year. Canadian housing markets will benefit from improving economic conditions and low mortgage rates, said Bob Dugan, chief economist for the CMHC. Housing starts dipped last year to 149,081 units; however, that total is expected to rise to close to 190,000 units during 2010, a figure that is in sync with

projections from Peter Andersen, who once again spoke at the annual meeting and convention of Castle Building Centres Group Ltd., which was held at the Hilton Orlando Bonnet Creek Hotel & Resort in March. In 2008, the noted economist warned delegates that the “great” six year run in the housing, construction and renovation industries is about to come to an end. Last year, in Victoria, B.C., he talked about four different possible economic outcomes that could unfold for both Castle dealers and contractors. During a business session at the 2010 AGM, he warned that people need to be careful when using the word recovery. “Recovery makes it sound like you are back to where you used to be, that good place that you really liked in 2005 and 2006,” he said. “The most recent eco-

nomic downturn was almost catastrophic. We came within a whisker of the financial system completely freezing on us. What would that mean? How would you finance payrolls? Not just your company, but every other company. How do you finance receivables? How do you pay for things that you buy for procurement? It almost came to a dead standstill. “The economy is starting to grow again, but be careful what you wish for. We are going to have a rise in interest rates. It is just a matter of when, how much and how far.” Three weeks after Andersen spoke to a record crowd of delegates, Canada’s chartered banks announced a relatively small mortgage rate increase in part, as the result of an expected interest rate hike by the Bank of Canada expected to occur in the late spring or early summer. “There is a phrase called the New Normal,” said Andersen. “The New Normal is going to be different.” The chartered banks left interest rates too low for too long, he added. Fortunately for contractors, the renovation sector proved to be recessionresistant. It never did decline during the downturn, Andersen said, but instead stayed “basically flat” and from there went up again to new record levels. ...continued on page 7

Castle Building Centre’s 2010 Annual Meeting & Convention took place in March at the Hilton Orlando Bonnet Creek (left). Speakers included General Rick Hillier (retired), former Chief of the Defence Staff of the Canadian Forces, shown signing his book A Solder First: Bullets, Bureaucrats, and the Politics of War following his presentation, and Karen Wilkinson, Tax Partner with Deloitte & Touche. On the recreational front, the annual golf tournament was a huge success. Above, Karen Clement, co-owner of Mission Building Supplies in Edmonton, Alta., who is also this year’s president of the Western Retail Lumber Association (WRLA) is shown with James Jones, Castle’s vice president of marketing prior to the tee-off.

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News Watch

Though close to 200,000 construction workers are expected to retire between 2010 and 2018, the industry is taking steps to make sure their skills and knowledge stay at the jobsite. A national mentoring program, developed by the Construction Sector Council (CSC), and piloted in Saskatchewan last fall, is being lauded by construction industry leaders as the right tool for closing the skills gap that could result from an exodus of experienced, older workers. “The question we had to address is how will the industry train the next generation?” says CSC Executive Director George Gritziotis. “Since 80% of training takes place on the job, an effective mentoring program will go a long way toward achieving that goal.” When it comes to construction, nothing can replace on-the-job experience, adds Paul McLellan, the head of Saskatchewan’s apprenticeship commission: “The mentorship program allows for the transfer of skills, in a systematic way, from

one generation of workers to the next. It is relevant to the needs of today’s construction work force and easy to put into practice in the work place” McLellan, the CEO of Alliance Energy, says the benefit of the program is the connection formed between the individuals involved. “As with any teacher/student relationship, if properly done, this bond will last forever and provide knowledge transfer through generations.” The Manitoba Building and Construction Trades Council has been sharing the learner’s handbook, modules, mentor’s handbook and other materials with all sectors of the industry. “The feedback from contractors and workers has been totally positive,” says executive director David Martin. “The program can harness valuable skills and

knowledge. It is the right solution at the right time for the construction industry.” The mentorship program will be rolled out to key stakeholders in the Canadian construction industry. For further details, visit www.csc-ca.org. The Construction Sector Council (CSC) is a partnership between government, business and labour.

...continued from page 5

Tax expert Karen Wilkinson, the first speaker of the day at the meeting, discussed several issues in her presentation including the HRTC and the impact of the upcoming Harmonized Sales Tax in B.C. and Ontario. “There will be winners and there will be losers,” said Wilkinson. “Customers will be the big losers in this process because their costs are going up by 8%. From a business perspective, you may find that some of your costs will go down.” As for the Canada Revenue Agency, she said it continues to have “industry targeting” and that the construction sector is one that is currently being looked at. Wilkinson also provided delegates with a professional warning of sorts about the HRTC. “I’m sure you have all found the renovation tax credit to be a boon. In the current year, I firmly believe and some of my colleagues would agree with this, that they are using a form on home renovation tax

credit to get at the underground economy in the construction industry. This is based on the level of detail that you have to put on the form including who the supplier was and what their GST registration number is for every receipt." Other speakers during the business session included Ken Jenkins, president of Castle Building Centres and James Jones, the firm’s vice president of marketing, who focused on the “Strength of the Independent,” and Bill Lee, president of Lee Resources Inc., who has worked with over 30,000 owners, general managers and salespeople to grow their business and improve profitability. On the final day of the conference, General Rick Hillier, former Chief of the Defence Staff for the Canadian Forces, was the Special Guest Speaker. His presentation, which was mixed with both humour and pathos, focused primarily on Afghanistan and held the audience spellbound for 90 minutes.

The federal government’s Home Renovation Tax Credit (HRTC) certainly helped the cause.

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Fraser Paul, owner of Paul’s Enterprises Ltd. of Ferryland, Nfld. (right) and Ray Bryer, vice president of sales for Aluminart Products Ltd. teamed up at the Castle golf tournament.

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Photo: paul barker, istockphoto

CSC Launches National Skills Mentoring Program


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Building Blocks

Innovative Products for Today’s Renovators LAYOUT LASER TOOL PROJECTS LINES ON BOTH VERTICAL, HORIZONTAL PLANES Bosch Measuring Tools has announced the GLL2-80, which the company calls the first 360° dual-line laser, capable of projecting constant lines on both vertical and horizontal planes. Used for alignment and leveling applications, such as, installing cabinets, floor and wall tiling, drop ceilings, interior framing, decorative finish and trim work, the GLL2-80 can switch between dual-plane, horizontal and vertical only modes for flexibility. The tool projects bright laser “chalk lines” in 360° angles using Bosch’s proprietary Cone Mirror Technology rather than using a motor, increasing durability by reducing the number of moving parts. Once leveled, the GLL2-80 is accurate to within ¼” over its 100’ normal range (range can be enhanced to 265’). The GLL2-80 can be mounted on a standard tripod (with ¼-20” and 5/8-11” mounts), is built to rigorous IP54 standards for water and dust protection and has rubber housing to prevent damage on the jobsite. More information is available at www.boschtools.com.

TASK LAUNCHES BAMBOO HAMMERS, LIGHT MINE MAGENTIC LED LIGHT Task Tools recently launched two new tools for the contractor: a bamboo-handled hammer and magnetic flashlight. The FSC Certified Bamboo Hammers use bamboo handles that are certified by the Forestry Stewardship Council to be 100% from well-managed forests. For hammer strength, bamboo is harder than oak and has greater tensile strength than steel. Since bamboo grows rapidly (up to 24” per day), it makes the new hammers a green choice. The hammers are available in 8 oz. and 16 oz. sizes. Task Tool’s Light Mine Magnetic LED Light, meanwhile, uses 12 magnets that allow the flashlight to stick to any ferrous material. Its compact size and unique shape allows powerful LED light to be positioned in tight spaces and pointed in any direction. The Light Mine runs on three LR44 watch batteries. More information can be found at www.task-tools.com.

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New Products

STANLEY HOOKRaiLS ADD FINISHING TOUCH TO HOME ORGANIZATION Essentials Hookrails from Stanley Home Designs combine function with a basic traditional design to add the finishing touches on any home project. They are designed to be wall or door mounted to accommodate for hats, clothing, handbags or backpacks. A matching product from Stanley, the smaller Essentials Keytidy provides the same organization for keys, jewelry and pet leashes, keeping them handy and near doorways. Both products are available in four color combinations: white hooks on a white rail; satin nickel hooks on a white rail; satin nickel hooks on a brown rail; or, oil-rubbed bronze hooks on a natural rail. Essentials Hookrails are projected 2½” out from the wall and are available in 18” and 27” lengths. The Essentials Keytidy is 9” in length and has a projection of just 1”. Both come with all necessary hardware, mounting wood screws and anchors, as well as plastic peg holes to conceal mounting screws.

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Learning Curve

On-The-Job Assistance

New books designed to help contractors with everything from minimizing costs and accidents to jobsite management.

book Home Builder’s Guide to Continuous Improvement CRC Press/Taylor & Francis Group

The Home Builder’s Guide to Continuous Improvement, released recently by CRC Press, acts as a basic reference guide for use by the contracting profession. According to authors Jack B. ReVelle and Derek N. Margetts, it is now more crucial than ever for home builders to push themselves in order to be competitive while recovering from the recession. Presenting well-known tools and techniques, the “Home Builder’s Guide to Continuous Improvement” provides important insights and necessary information to reduce cycle time duration and variation in order to improve quality and customer satisfaction and to minimize costs and accidents. Each chapter offers examples based on the author’s personal experience working with builders. Containing figures and graphs to enhance the text, this book contains simple language using resi-

dential construction industry terminology to improve understanding of continuous improvement concepts and practices. No previous math background is required, making it suitable for all levels. ReVelle and Margetts have over two decades of residential construction between them, and share their insights that will allow contractors to improve their business. Topics covered include: • Cycle Time Management • Problem Solving • Dealing with Data • Root Causes • Corrective Actions • Problem Follow-up • Relationships • Software • Tools and Techniques

book DeWalt Contractor’s Daily Logbook & Jobsite Reference Delmar, Cengage Learning

Success on a construction project requires a logical and efficient method of documenting jobsite activities, as well as quick reference to key information. To that end, Delmar (part of Carnage Learning) has released the DeWalt Contractor’s Daily Logbook & Jobsite Reference for contractors, builders and construction managers. Broken into two parts, the book is written to provide all the elements needed for your jobsite manager to effectively oversee and manage construction projects. The first part offers daily log pages designed to assist in documenting everything from jobsite activities, to workers’ schedules, material deliveries, subcontractors, Occupational Safety and Health Administration requirements, to weather and more. Also included is a simple-to-use daily log system for quick and accurate entry, plus logs for equipment and material purchases, accident reports, contact reports and safety checklists. Part two of the book adds resources to complement the log-

book portion, such as a section on construction math and an appendix with conversion tables, formulas, plan symbols illustrations and charts to cover a range of contractor activities. The Contractor’s Daily Logbook & Jobsite Reference is bound durably for use under the rigours of the jobsite. It incorporates the tools needed to help meet the responsibilities of jobsite management. Free online resources are available from Delmar for use with the logbook and jobsite reference, including the key forms found in the book (a purchase log, expense report, vehicle log and safety checklist). More information on the DeWalt Contractor’s Daily Logbook & Jobsite Reference can be found at www.informationdestination.cengage.com/dewalt, where the book may also be purchased. To access the free online downloads of key forms utilized within the book, please visit www.dewalt.cengage.com/Downloads.aspx. Both books are available at www.amazon.com. CONTRACTOR ADVANTAGE

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Business Strategies

Advice For Acquisition Candidates

Ask direct and detailed questions about a firm's business operations, strategic direction, market and financial strengths. By Patricia W. Atallah

I recently had lunch with an owner of a specialty engineering services firm who was excited to tell me that her small firm had been approached by a European multi national engineering company. She and her partners were contacted directly out of the blue and were still reeling with disbelief that a multi national company had identified them as a possible acquisition candidate. She reached out to me for feedback and guidance knowing that the construction consulting firm I started 15 years ago had been approached a few times by reputable national firms and was ultimately acquired by a publicly-held international company. She was anxious to discuss how she and her partners should react, respond and proceed. Before I share what I told her, I would like to point out that her story is not surprising. Amid a recent spate of huge and wellpublicized acquisitions, we are seeing a flurry of smaller transactions going on as architectural, engineering and construction companies seek to enhance market positioning and competitiveness without having to spend a lot of cash. Targets tend to be small- to mediumsize firms that help a company to broaden geographic reach and service offerings, deepen technical and industry sector expertise and acquire proprietary technology and processes.  Based on my personal experience and

business strategy expertise, I gave her the following advice: 1. Calm down and do not rush. At first you may feel elated and flattered that you were approached. Once you come back down to earth, it is critical that you fully agree as to how to respond to an opportunity and what it would take to make a deal attractive. Without a fundamental understanding between

Targets tend to be small to medium size firms that help a company to broaden geographic reach and service offerings, deepen technical and industry sector expertise and acquire proprietary technology and processes. partners, good decision-making will be thrown off-course. 2. Do not get caught off-guard. Prudent business practice dictates that, as a matter of course, a firm should have a current business strategy/implementation plan including alternative exit strategies. Armed with a clear understanding of your firm’s strengths, resources, competitive positioning, business goals and desired exit time frame, you should gain an understanding of the marketability and value of the firm

Tricia Atallah is Principal of VantagePoint Strategy Group, a strategic and management advisory firm serving the construction industry. She is also author of Building a Successful Construction Company. Further information on the book is available at www.constructbiz.com.

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and thus become better equipped to respond and negotiate intelligently. 3. Take time to do proper due diligence. Ask direct and detailed questions about the firm's business operations, strategic direction, market and financial strengths, management capabilities and resources. Request feedback from employees regarding company leadership, culture, organization and processes.

CONTRACTOR ADVANTAGE

4. Hone in on apparent leadership and organizational issues. Alarm bells should ring if satisfactory answers are not obtained about the leader responsible for the deals ultimate success. 5. Obtain acceptable responses to tough questions regarding plans for integrating and leveraging the firm’s strengths, capabilities and resources. If you still have nagging issues, ask more questions. 6. Develop a solid understanding as to the transaction’s tangible benefits to your company versus remaining independent. 7. Do not look at the opportunity in a vacuum. What other companies do you know that could potentially be a good fit with yours? How do they compare to this organization? Would it be worthwhile to have a conversation with them?


Business Strategies

At first you may feel elated and flattered that you were approached. Once you come back down to earth, it is critical that you fully agree as to how to respond to an opportunity and what it would take to make a deal attractive. 8. Make sure to negotiate a comprehensive purchase contract. It should clearly define the roles and responsibilities of each party to make the transaction ultimately successful. 9. Seek the advice of trusted advisors and experts (lawyer, accountant, banker, business advisor) and listen

to what they say. They will provide much needed objectivity and expertise and help negotiate a decent transaction. 10. Avoid allowing the company to rush the transaction. Large companies often want to conclude a deal quickly to meet an internal deadline or an-

other agenda. Whoa! Slow down the process to suit your priorities and timeline. 11. Follow your gut. Do not ignore what the gut says! Without satisfactory resolution to these questions, the transaction should not proceed any further!

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Smart Money

A Tale Of Two Frameworks

Guest columnist explains how two different accounting methods handle contract reporting and disclosure, and what it could it mean to your business. By Jennifer Diao

On January 1, 2011, private companies have the option of moving to the International Financial Reporting Standards (IFRS) or using Private Enterprise Generally Accepted Accounting Principles (PE GAAP), but should do so with an understanding of what they mean. The purpose of this article is to analyze the differences between IFRS and PE GAAP specifically regarding the accounting for construction contracts to assist contractors in deciding which accounting framework to adopt next year. The objective of International Financial Reporting Standards (IFRS) is global harmonization of accounting standards. In IFRS, the accounting for construction contracts is dealt with in International Accounting Standard 11 Construction Contracts (IAS 11). Guidance for PE GAAP is contained in section 3400 Revenue, which becomes effective January 1, 2011, and incorporates the guidance of Emerging Issues Committee Abstract 78 Construction Contractors — Revenue recognition when the percentage of completion method is applicable. The method of recogniz-

ing contract revenue and expenses and the disclosure requirements are compared in the table below. A significant difference between IFRS and Canadian GAAP regarding construction contract accounting is that IFRS does not, under any circumstances, allow the completed contract method to recognize revenue and expenses. If the outcome of a contract cannot be reliably estimated, revenue must still be disclosed under IFRS, but no profit will be recognized while the contract progresses. On the other hand, if progress under a contract cannot be reliably estimated it would still be accounted for under PE GAAP using the completed contract method. This could result in a situation that in year one there is no revenue reported for the contract; while in year two all revenue is reported. The completed contract method is simpler and requires less information and estimation. Still, there are two disadvantages to using PE GAAP when contract progress cannot be determined:

Users of the financial statements will not have any information regarding the performance of a long-term contract until it is completed because there is no requirement to disclose revenue. Comparison of financial results between different companies is difficult. The percentage of completion method demands more financial data, estimation and calculations to determine the stage of completion. This, in addition to the extensive disclosure requirements, will require more time spent collecting, processing, verifying and disseminating information and extra costs on educating preparers and analysts. The result should be more transparent information for the financial statements’ users. Early adoption of IFRS will provide long-term benefits, especially for companies considering a future listing on the public stock markets, but will also mean short-term costs. Companies must take sufficient time for implementation and to control resources and the decision-making processes.

Recognition of contract revenue and expense IFRS

When the outcome of a construction contract can be estimated reliably, the percentage of completion method must be used. Contract revenue and associated costs are recognized by reference to the stage of completion of the contract. When the outcome of a construction contract cannot be estimated reliably, the cost recovery method should be used. In it contract revenue is recognized only to the extent of costs incurred that are expected to be recoverable.

Canadian GAAP

Section 3400 provides for two methods of recognizing contract revenue: The percentage of completion method recognizes revenue on a rational and consistent basis. This method is required for construction contracts that are consistent with IFRS. The completed contract method recognizes revenue and associated Jennifer Diao, C.A. is a Senior Staff Accountant at Soberman LLP. costs only when the entire contract is Her professional experience includes providing assurance and advicompleted or substantially completed. sory services to clients in construction, manufacturing, investment, This method can only be used where a real estate and property management. reasonable estimate of the extent of progress cannot be made.

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CONTRACTOR ADVANTAGE


Smart Money Determining the stage of completion of contract work IFRS

IAS 11 provides detailed guidance on how to determine the stage of completion of a contract. The basis used depends on the nature of the contract work and may be either: • The proportion of contract costs incurred for work performed to date to estimated total contract costs. (“Incurred costs” exclude materials delivered to the site but that are not yet incorporated into the construction, unless the material is made specifically for the contract); • Surveys of work performed (such as assessments by the owner’s consultant); or • Completion of a physical proportion of the contract work.

Canadian GAAP

Determining the stage of completion under PE GAAP is consistent with IFRS, in that the determination should be based on the work accomplished by reference to an appropriate measure depending on the nature of the contract work. While examples of appropriate measures are provided (sales value, associated costs or the extent of progress), the application of the principle is likely to be the same under both IFRS and PE GAAP.

Disclosure requirements IFRS

IAS 11 requires the following disclosures, which are effectively the same as PE GAAP: • The amount of contract revenue recognized in the period; and • The methods used to determine the contract revenue recognized in the period, including the method used for contracts in progress. Additional disclosures required in IFRS include: • For contracts in progress at the end of the period: the total of costs incurred and profits recognized to date, and the total advances received and retentions. • On the balance sheet, the gross amount due from customers for contract work as an asset and the gross amount due from customers as a liability.

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Canadian GAAP

In PE GAAP, the following should be disclosed: • The revenue recognition policy, including the basis used to measure work accomplished; and • The major categories of revenue, which should appear separately on the face of the income statement. PE GAAP intentionally reduces the disclosures that private enterprises are required to make.

This article has been prepared for general information. Specific professional advice should be obtained prior to the implementation of any suggestion contained.

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Economics 101

Trigger Points and You

By monitoring trigger points, a company owner can take immediate corrective action and avoid serious consequences. By Lee Froschheiser

There is nothing wrong with having “hope,” but clearly “hope” is not a business strategy, a fact that has become very evident in recent history, given these tough economic times. Company owners who have casually relied upon “hope” as a viable way to manage or turn around business have suffered serious professional consequences. Some have faced cutbacks in terms of services, products and staff; others have closed their doors for good. Fortunately, there is still “hope” for countless other leaders who are looking for a simple, but powerful way to measure the health of their business. The strategy is based around setting “trigger points,” which are measurements specifically created to signal important changes in critical performance levels. Trigger points are established to align with a company’s Vital Factors, the specific, key indicators of a business’ health. By monitoring trigger points, leaders can take immediate corrective action and avoid the serious consequences of not acting quickly enough. What do trigger points look like, and how do they work? There is a perfect example in the story of what happened to a prominent college football coach a few years back. After a miserable losing streak, the university had some decisions to make about whether or not to keep the head coach on board, and they brought in an interim athletic director to help.

At this point, there were four games left in the season, so the interim athletic director set performance triggers in place. If the coach won all four games, they would move forward, keeping him in charge. If he lost one game, corrective action would be necessary. If he lost two out of four, he could expect serious consequences in terms of his job security, and if he lost all four, the head coach would need to get his resume together immediately.

Running a business without trigger points in place is also highly stressful because when the “hope” fails, which it will at some point, the floor drops from under you. Under the leadership of this Big Ten coach, the football team lost the final four games of the season. When the coach was fired, the interim athletic director held a press conference, at which a reporter asked him if the coach had been surprised about being let go. The answer was “No.” The process of setting these performance triggers in place had removed the subjectivity out of the issue, established expectations, and made it very clear what consequences there would be for either success or failure. When a company follows this lead, it is the management’s responsibility to develop effective corrective actions attached

Lee Froschheiser, president and CEO of Management Actions Programs (MAP), works with premiere business leaders and companies. He is also co-author of the best-selling book, “Vital Factors, The Secret to Transforming Your Business -- And Your Life. For more information, visit www.mapconsulting.com. 18

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to the trigger points. Doing so eliminates the emotion that can come when goals are not met. Companies should set five to seven performance triggers that are focused on the most vital areas of their business. Examples of company triggers include revenue, profit, cash flow, customer satisfaction and employee retention. For instance, a manufacturing company wanted to set up trigger points, and one of those trigger points was related to revenue.

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The CEO decided that if revenue fell below $2.5 million two months in a row, the trigger would “turn on,” alerting everyone in the company that immediate corrective action was necessary. In the case of this particular financial shortfall, the options for corrective action included increasing sales goals, cutting overhead or a combination of the two. After two months, the benchmark was not achieved, so corrective action was taken to increase sales goals. Then revenue suffered a third month, so the CEO eliminated overhead by cutting back on staff. As a leader, this CEO had to look for solutions that would protect profits and maintain business viability. He could have opted to take no action, a decision that is an action in and of itself; however, this can be the riskiest decision that a leader makes. While many companies may set expectations around their Vital Factors, where


Economics 101 A Six Step Program 1. Establish trigger points that relate directly to your company’s Vital Factors, specific measurements of your business’ health. 2. Set no less than five, no more than seven, trigger points for the entire company, aligned to your Vital Factors. 3. Have your trigger points reflect “stop gaps,” in other words, the minimum thresholds. 4. Base trigger points on a two-month trend (three months, if possible), for example: • “Cash flow is negative two months in a row.” • “Revenue misses goal by five percent two months in a row.” 5. Have triggers that are both lagging and leading. For example, revenues over the past two months would be a lagging indicator of your company’s health while backlogged work would be a leading indicator of your company’s health. 6. Set the target for taking corrective action passed on the number of triggers being pulled. • Two or three triggers are “pulled” two months in a row; or • Four triggers are “pulled” within a month. Note: Your company can also define a “trigger” as a single event. For example, it could be the loss of a major client.

they fall short is putting in place these important trigger points, which put the leadership on alert and force a decision point. Yet without trigger points, it is impossible to know when to be proactive and how your company is truly performing. Running a business without trigger points in place is also highly stressful because when the “hope” fails, which it will at some point, the floor drops from under you. That is scary to say the least, and everyone knows that the biggest mistakes are often made when you are fearful, under intense pressure, or facing major time constraints. While the economic downturn has exposed the fact that countless companies have used “hope” as a strategy for operating business, it has also been a major game changer. Savvy business leaders are modifying company systems and management behaviors, putting tools in place that really work. As mentioned, performance triggers should correlate to major Vital Factors, but they should also be designed to work on the micro level, such as with specific projects and programs. Like the alarm system you “wished you had installed,” performance triggers may have been something you have overlooked in the past. And you are not alone if that is the case for many other company heads have not recognized the need. However, now you know why they are crucial to a company’s livelihood. Putting trigger points in place today could be the best small action you might ever take to save your business from crisis and drive it into a permanent position of success.

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Cover Story

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Cover Story

The colours of money Rich new choices in siding and accessories can provide premium business opportunities for contractors.

O

nce limited to utilitarian shades of pastel, innovations made to the formulation of the pigments used to enhance the look of vinyl siding have created a wide range of choice from deep reds to dark charcoals to rich browns. When combined with a variety of associated accessories these increased options for homeowners spell increased opportunities for the contractors serving them. “It is all about colour and specifically dark colours,” says Rita McAdam, marketing director for Kaycan Ltd., a manufacturer of vinyl and aluminum building products. “People want to express themselves and colour is the easiest way to do it.” Ernie Klinger, national sales manager for vinyl siding manufacturer Mitten Inc., agrees, adding that homeowners have a demand after decades of being limited to only light colours from vinyl. Darker colours that are now available on the market, he says, provide them with an opportunity to mix-and-match with various accessories for dramatic results. “Homeowners are eating it up as this opportunity has presented itself,” he says. Colour options for the aluminum rainware (such as eaves troughs) and trim further enhance a siding renovation and have also expanded from a half-dozen options to, in some cases, upwards of 30 within the past five years. Klinger says a rich red is a popular choice for many homeowners, since it can be contrasted by any number of accessory colours including clay, ivory or white for a striking aesthetic effect. While choices vary slightly from region to region, aluminum soffits remain one of the most popular choices of accessories, especially in Central Canada and the Prairies. Customers seeking

flair previously found only in high-end architectural magazines are also turning to crown moulding for soffits and designer trims for corners and around windows and doors, say Jules Ferlatte, marketing coordinator at Kaycan. He and McAdam compare adding accessories to a siding renovation to wearing jewelry in that it is an enhancement to the home’s natural beauty and increases curb appeal. Other popular accessory choices include 3½” and 5” window surrounds, 6” designer corners, bay window corners and flexible J-trim that can create half-round or round trims above doors and windows. Added to that mix are moulding plates for around soffits or lights, hooded vents and shutters in numerous matching or contrasting colours, Ferlatte notes. As with siding, colour choices of accessories vary from manufacturer to manufacturer. Gentek Building Products Ltd., for example, provides aluminum soffits in colours that include Almond, Antique Ivory, Bright White, Canyon Clay, Cashmere, Chestnut Brown, Dover Gray, Forest Green, Ivy Green, Maize, Nutmeg, Pebble, Sandalwood, Sandstone, Slate, Wedgewood Blue, Wicker, Sage, and Brownstone. All colour choices are available in 16” four-panel “regular” options in 0.38 mm gauge, while only five are available in two-panel “economy” options at 0.29 mm gauge. Meanwhile, engineered wood and fibre cement expand choices even further. Jim Hall, sales manager for building materials at Goodfellow Inc., says he is seeing an increased interest in both because of the materials’ low maintenance, but also an abundance of colour and construction options.

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photos: kaycan, goodfellow, mitten

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He notes that his company produces siding in made-to-order colours and says homeowners will often give colour priority over all other elements in deciding on siding. Goodfellow applies an individually customized latex colour to its engineered wood and fibre cement siding products during the factory fabrication process, which he claims has been a benefit to the company and contractors trying to meet customer’s particular needs. “There are customers who will change the materials they plan to use if they do not get the exact colour they want. I know that we sometimes get orders for our siding because we can produce a particular colour. If they want 2,311 square feet of siding in dusty rose, we produce what they want, ship it to the lumber dealer and from there to the contractor or end customer.” In addition to the low-maintenance and colour options available, engineered wood siding provides a green benefit when compared to other wood sidings. According to Hall the yield from a tree’s worth of engineered wood is five to six times that of a solid wood siding. In addition, he notes engineered wood has more dimensional stability, causing less expansion and contraction than found in other substrates. Wood-based accessories are also hot items, particularly double or triple trims, and freeze boards under the soffit and shingles. “For sidewall applications there is a lot of interest in pre-finished or factory-finished shingles on walls as accents or even covering whole houses,” Hall says. “We have seen a real solid growth in those sorts of accents. Factory finishing in general is labour sav-

ing, since it is more maintenance free and it does not need to be painted or stained after the fact.” He says panelized versions of sidewall shingles are now available in 8’ long strips for quick installation. These panels are applied to the wall like lap (or clapboard) siding, saving time and using fewer nails than individual shingles. “Even if it is just for an accent wall or entrance way gable, homeowners want some thought going into the design and are willing to pay a premium for it.” Installation insights: Vinyl is popular due to its cost, low maintenance and resistance to the dents that can appear in aluminum siding; however, by nature it also expands and contracts with the weather. Contractors need to be careful not to over-nail the siding, allowing room for it to move when expanding. If installed too tightly, siding will buckle when it expands. Fasten nails or other fasteners in the center of the nailing slot and make sure they penetrate a minimum of ¾” into the surface. Leave approximately a 1⁄32” clearance (the width of a dime) between the fastener head and the siding. In addition, leave ¼” clearance inside all receiving channels at all openings and stops to allow for expansion. Make sure that panels that overlap do so by 1” on the face. Ferlatte notes that the siding should be nailed every 16”, not every 24” as is often incorrectly done. In addition, accessories should be nailed every 8” to 12”. Make sure the wall is flat and leveled; check with a level every six or seven courses.

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For locking panels, ensure they are fully locked, but not stretched tight. Detailed installation manuals and resources can be found online. Ferlatte and Klinger recommend reviewing installation resources at the Vinyl Siding Institute website, an association of vinyl siding manufacturers, at http:// www.vinylsiding.org/installation/ While engineered wood does not have the expansion and contraction problems of vinyl, there are still important considerations. Hall points out that water is the natu-

ral enemy of wood and those contractors must use proper flashing and waterproofing. Horizontal trims over windows and doorways improperly waterproofed will collect water and gradually compromise the siding. “It is simply amazing how many people forget that water naturally wants to push downhill. Nothing is designed to stand up to it.” Special care must also be made during the install of any factory-finished product.

Ensure the installation area is covered by a tarp to guard against rain and that it is kept clean. Keep factory-finished siding stored up on crossers or blocks, not strewn across a workspace. Since factory-finished products are not painted or stained after installation, if not properly kept clean and protected during installation a homeowner might be dissatisfied with their new siding that is already dirty and looks weather-beaten. Warranties and maintenance: Another area to ensuring customer satisfaction is controlling expectations around warranties. Products naturally fade, and many manufacturer sidings incorporate two warranties: one on performance and another on finish. Depending on the manufacturer and material a 30-year warranty could assume a certain degree of maintenance and leave room for a specific amount of natural fading. With vinyl siding, for example, there is a common misconception that the finish will not gradually deteriorate over time. Like anything, vinyl becomes weathered, Klinger notes. It must be maintained and cleaned over the years to remove air-born solutions that will cause the colour to degrade more quickly. Contractors should be sure to discuss in detail the warranties and maintenance of each siding option with their clients, but also to investigate all possible accessories. They will not only provide incremental install and resale revenues, but will also help create their customer’s dream look. “There is definitely more margin and added value,” says Ferlatte. “The contractor is no longer seen as someone who is just going to slap vinyl on a wall, but someone who is going to bring them that ‘wow’ factor.”

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Feature

Gazebos:

Building outside the box

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Feature

Homeowners are willing to pay a premium for creativity around gazebos and other luxury garden builds. By Lawrence Cummer

photos: photos.com, gardenstructure.com, hemera

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azebos, pergolas, pavilions and other yard structures can certainly add that element of class to a home. There also appears to pent-up demand in this area now that the recessionary concerns of the past 18 months are waning, which is certainly good news for the contracting professional. The key to success starts by bringing impressive designs to the table, says Lawrence Winterburn, founder, president and principle designer for GardenStructure.com, a company that develops plans for contractors for a variety of backyard builds. He adds that trends currently generating a lot of interest include privacy screens, sweeping natural curved wood features and big pergolas that blend with the house, as well as six- and eight-sided gazebos and pavilions (roofed rooms). Because gazebos and other backyard buildings are all about luxury, sometimes the sky is the limit when it comes to customer demands. “People generally want it all: low-voltage lighting, builtin retractable canopies that work by remote, exotic hardwoods that last 40 years,” Winterburn says, adding jokingly, “They also want a barbecue as big as a car and, of course, built in cabinetry and a keg tap; normal things that we all dream of and long for.” Winterburn does caution that budgets have declined and that many homeowners try to get it all while reducing their overall spending. Because of this, he says, contractors

need to bring up their game a couple of notches to be competitive. Much of that has to do with the fact that the high end of the backyard build market did take a hit in 2009. As an example, trades people in the landscaping and decorative outdoor building sector experienced an estimated 20% gross income drop last year, according to Winterburn with “some areas better and some worse.” At least one contractor who builds GardenStructure. com designs says he is seeing an abundance of work on gazebos, arbours and pergolas this year, which he attributes to each being the most affordable and effective way for homeowners to add living space to their homes. “If you look at gazebos, cabanas, arbours or even pergolas, up until recently there were maybe three calls a year that we would get for those,” says Jamie Elliott, owner of contracting firm Housewright Renovations. “They just were not that popular an option, but more people are starting to look at them as a way to dress up the yard. This year already, before spring, I have had five calls for them.” Elliott says that in the past, gazebos or cabanas would only be added during extensive renovations and massive projects with perhaps $100,000 of woodwork included, but now are being seen as one of the first additions to the home for some of his customers. In a lot of cases, Elliott’s calls are from high-end clients who have already done as much as they can in-house or

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Feature Gazebos on the cheap

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A custom-built gazebo is not in the budget of every homeowner. For clients with less unique demands and budget limits, Sean Murray, owner of Inside/Out Carpentry, says pre-fab kits are a “very good option.” In just one day a gazebo can be built from a kit, when it would traditionally take a contractor a week or more to design, cut and install a custom-built unit. While not as unique as a custom build, Murray says existing kits still allow customers to pick and choose from a variety of features, which make them easy for contractors to sell. Of course, at the same time a kit might not meet the uniqueness a customer is looking for, nor will it provide a contractor with the financial rewards that come from building a project from scratch. “There is hardly any profit for the contractor in a kit,” adds Jamie Elliott, owner of Housewright Renovations. Typically a homeowner buying a gazebo is prepared to spend money on their purchase, he says. To that end, he receives fewer requests for gazebos built from kits.

who have chosen, due to economics, to stay in their homes rather than moving. They want to spruce them up. “You can get to a point where there is not much else left to do, and people like to update and keep moving forward,” he says, noting that a gazebo affords them that option. “They do not like to finish things off and leave them the same for 30 years, and it is not always in peoples’ budgets for yet another kitchen renovation.” Winterburn and Elliott both suggest that contractors distinguish themselves through unique design work and features. When the housing sector is weaker, which might happen if interest rates rise in Canada, competition becomes fiercer in the garden structure business, says Winterburn. He adds that the good contractors “will sweat the small stuff. “Be creative, concentrate on service and make sure that each and every client becomes one of your army of promoters. Verbally selling the small things you do to your client during and towards the end of the job gives him or her something to talk about to friends and, voila, you have word of mouth.” As for the bigger projects, Winterburn says there are great op-

portunities for garden structure contractors in any economy if they go after the right customer. “As an example, there are people involved in commodities and banking making ever greater profits and they are building and renovating as usual.” Winterburn suggests gazebo contractors use the Internet, skip the yellow pages, and engage in steady high value advertising on a constant basis. Tips for gazebo success: For most homeowners a gazebo or cabana is going to be a very personal investment as compared to other home renovations. Because of this, customer reaction to the final product hinges on whether or not a contractor has overpromised, under-delivered or paid close enough attention to a customer’s needs. “The reason why I love this business is many people have been waiting to have this thing their whole lives,” says Sean Murray, owner of Inside/Out Carpentry of Ottawa, another installer of GardenStructure. com designs. Elliott points specifically to popular craftsmanship features that have helped grow his business: curved angles and gullshaped gazebo roofs. His material of choice is cedar because of its low-maintenance requirements for customers. Cedar is also less likely to create splinters than pressure treated wood, he says. If homeowners can enjoy the look of weathered cedar, Elliott suggests avoiding staining or painting. Once an outdoor building has been stained, it will need to be refreshed frequently. If a cedar gazebo is stained or painted, cut no corners or water damage can occur. Each board much be painted on all

six sides. In areas farther north or with a dense population of insects in the summer, fully screened-in structures are popular options for homeowners. They create a stylish look and allow the family to remain outside during the summer months. Like many building projects, Murray says a solid foundation is the most important consideration for gazebo building. He recommends using cement tiers. Communication during the pitch stage is also critical, he notes. “The biggest challenge is in knowing what the customer wants. If you underestimate what they want they will not be happy; if you overestimate you might not get the job.” Cautions and challenges: One of the single biggest mistakes

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around gazebos, pergolas and other garden structures is unfamiliarity with the local building codes and, more importantly, municipal interpretations of them. In Ontario, for example, a structure with a snow-bearing roof that is more than 108 square feet requires a building permit. In addition if the floor is greater than 2’ off the grade within 4’ of the structure, at all attached to the house or meets various height restrictions, a building permit is needed. These provincial rules are interpreted differently in different municipalities, so while in one city or town a pergola might not fit the requirement, it might just down the highway. Elliott suggests checking for a permit on every project to be safe. If using pressure treated (PT) wood, Elliott reminds that it is crucial to ensure use of appropriate PT-resistant nails and fasteners.

Any outdoor wood work must be built with water in mind. “Whatever you do, focus on drainage around the structure,” he says. “You cannot allow water to get into it and create rot.” To that end, avoid placement of structures at the bottom of a grade where water can flow downhill towards it and do not put lumber into the ground where water and moisture will make it rot. Instead, build a layer or two of rock or crushed gravel. One of the most common errors Winterburn sees from contractors working on outdoor structures is not technical at all, but bad business acumen. As an example, contractors who call their competitors to establish pricing in order to undercut them ultimately just undercut and devalue themselves. “Why would you ever want to work for free?” he asks. “Calculate your prices on what you need to be successful then devise a method for selling at that price."

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Feature

Form Fitting Insulated Concrete Forms produce foundations with ease. By John G. Smith

photos: plastifab, cosella-Dörken products inc.

T

he makers of Lego probably deserve some of the credit for training generations of contractors. The plastic building blocks certainly give many kids a taste of what it is like to build something with their own two hands. The process is even remarkably similar to the one followed when using Insulated Concrete Forms (ICF) to build a real-life foundation. The lightweight building systems, now used to create about 15% of Canada’s residential basements, can be fitted together with ease, and they continue to grow in popularity thanks to insulating properties and added protection against structural enemies such as moisture, mold or fire. In general, the systems incorporate a pair of rigid insulating panels, typically separated by some form of frame or web. Rebar is fit into the space in between, and concrete is poured down the middle. “The left-in place forms not only provide continuous insulation and a sound barrier, but also a backing for the drywall on the inside,” notes Tyler Merchant of the Insulating Concrete Form Association. No vapor barriers are required in the basements made with these walls. Custom home builders dominate most of the residential installations, says Andy Lennox, vice president of marketing at LOGIX, one of the suppliers of the building systems. That might simply be a function of the different customers. The buyers of a custom home, for example, will already be spending more of their time on structural specifications. “People are savvier now on energy savings,” adds Jack Hoogstraten, project manager for Plasti-Fab, another supplier of the systems. There is no denying the additional insulating properties. “A rule of thumb is 22% of your heat loss in a conventionally built house is through the foundation,” Lennox explains, referring to the thermal bridging that can occur when the studs in a finished basement are not separated from a concrete wall. “The temperature is going right through from the concrete to the stud to the drywall. That is one of the primary sources of basement heat loss.”

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In contrast, he suggests that ICF projects can cut these losses in half. It seems to be a logical claim. An ICF project includes an uninterrupted layer of rigid insulation on both sides of the concrete. “It is probably one of the warmer, more comfortable areas of the house,” agrees Greg Doran, product manager at Plasti-Fab. The benefits are not limited to the homeowners. Contractors enjoy the added benefit of being able to pour a foundation with relatively small crews. “A crew of three to four people can build an average basement in about three days,” Lennox says, noting how the forms themselves are set in place in the first two days, and the concrete is poured on the third. Contractors who once had to sub-contract basements can suddenly find themselves doing the work with their existing crews once the footings are poured. That trend caught many ICF suppliers by surprise. “Everyone thought form work people were going to be the ones to adopt this technology. They could extend their market above grade,” Lennox says. “The opposite has happened. The car-

penters went below grade. It is all about straight, level, plumb, and putting pieces together. It is like framing.” The blocks, which tend to weigh less than 5 lbs. each are certainly lighter than traditional Concrete Masonry Units, and they can be cut and trimmed with little more than a hand saw, power saw, utility knife or even a pocketknife. Most of the training can be done within a day and some suppliers offer technical support on a building site. Since the systems incorporate a dual layer of insulation, the use of ICF even extends the building season. “It is easier to keep the warmth and moisture in there,” Doran says. “It will also gain strength in this curing environment.” There are an estimated 50 ICF manufacturers across North America, with 10 of them serving the Canadian market. In general, the systems can be divided into flat wall designs, waffle or screen grids. The flat wall systems are used to generate something similar to a typical poured wall, with a continuous thickness of concrete. The grid wall systems incorporate a waffle-like pattern, creating a wall with concrete that is thicker at different points. Screen grid systems, meanwhile, incorporate columns of concrete that are completely surrounded by the insulating foam. The sizes can vary depending on the needs of an individual project. Typically the insulating panels are separated by 4”, 6”, 8” or 10”, although some systems that use loose connectors can be used to build walls as much as 24” wide. Another difference can be found in the way they fit together at corners. Where one system will include dedicated blocks for an inside or outside corner, another will simply be cut at 45° in a miter box. Some options will also use the internal webs to hold rebar in the proper position. Builders simply lay the offset pieces one row after the next. When a window or door buck is required, a pair of 2x4's at the bottom of the opening will ensure that concrete can still fill the gap below. The pieces themselves can be bound together with little more than an adhesive, although there will be a need to watch for manufacturer recommendations. (Some adhesives will chew holes through polystyrene blocks.) Local building codes will determine the amount of rebar that is put in place. Still, there are some tricks to the trade. The footing tolerances are particularly important when working with ICF, Lennox says, noting how they need to be straight, level and square, plus or minus ¼". The process is also that much quicker if the structure is designed with the size of the blocks in mind. After the first two rows of blocks are fit together, a check with a level will determine if there is a need to add shims or scribe the blocks.

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photos: plastifab

Feature

The finished walls will require some basic bracing to be in place before concrete is poured into the gap. The constructed forms will be braced from the inside, and tipped slightly inward before the finished wall is straightened perfectly plumb. “It is easier to push a wall out than to pull a wall in when it is full of concrete,” he adds. Those who try to rush the jobs may also run into a “blow out” when the concrete pushes through a weakness between pieces that have not been fit together as required. “You can be doing your pour and all of a sudden you are going to get a situation where you have got a pressure build-up, and it is either too fast or it is too thick and it will just blow out,” agrees Tim Braitenbach, vice president, new business development and marketing at Canadian Trade International, a Saskatchewan based company that supplies ICFs. (Although, he stresses that the versions he sells do not face the issue.) The challenges can be easily addressed, Lennox says. The pour of the concrete is stopped, escaping concrete is shoveled away, the broken piece of foam is removed, and a piece of plywood is screwed over top. The best approach when pouring the concrete is to add it in layers and let it dry a bit before continuing up the wall, Merchant adds. “Then if there is a problem, you do not have an entire wall that has a problem.” The concrete will usually need to have a slump of 4” to 6”, offering the perfect balance between the pour and setting properties. The pea gravel will also need to be small enough to make its way around the rebar sitting in the gap. Concrete pumps also tend to prefer a ¾” aggregate, Doran notes. There are a few tools that will make the difference here. Braitenbach, for example,

recommends using a pencil vibrator in the centres and vibrators outside to ensure that the concrete settles in place. “You want to make sure that you get four to five days of curing,” he adds, noting how this can still depend on factors such as weather conditions. Depending on the system, empty block cores can be used as a wiring chase, although wiring can also be run along a groove routed into the face of the interior wall. Once the wiring itself is installed, an aerosol foam or adhesive will hold it in place. Insulating properties aside, one of the biggest advantages with an ICF basement comes in the form of its water-tight nature. The walls are certainly less prone to cracking, and the insulation itself will add an additional layer of protection to the polyethylene membrane that wraps around the outside wall. The membrane is rolled into place and stuck together with asphalt caulking wherever the sheets overlap. There are a few other considerations if the membrane is not a peel-and-stick design. Unlike a poured concrete foundation or a block wall, there are specific spots where fasteners need to be attached on an ICF panel. That is why the related membranes are translucent, making it possible to ensure each fastener can be targeted to a specific spot, says Steve Duplantis of Corsella Dorken, which supplies Delta MS Clear. There are also specific fasteners to use, including those with dimples that grab onto a wide area of the membrane. The membrane begins slightly below grade and is draped down the wall, turned across the footing, and over the top of the drain tile. The steps are clear and they give homebuilders some welcome support.

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Preferences

Panel

Feature

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Feature

The right drywall and related products will lead to projects that stand the test of time. By John G. Smith

A

No product can earn a fire resistance rating on its own. That honour is limited to an overall assembly. For example, 5⁄8” Sheetrock Firecode Type X board attached to each side of wood or steel framing will attain a one-hour fire resistance rating, while a ½” double layer of Sheetrock Firecode C will achieve a two-hour fire resistance rating when it is properly attached to each side of steel framing. Type X panels offer higher fire resistance performance than regular gypsum board. They are labeled by ULC and/or UL, providing third party verification that the product is listed or classified for use in published assemblies and generic Building Code applications. There are differences within the product category as well. At CGC, for example, a Firecode C panel is an enhanced Type X panel that is used in proprietary, high-performance ULC and UL Designs.

photos: cgc inc.

sk most contractors to describe a sheet of drywall and they will likely revert to talking about a 4x8 gypsum panel that is 1⁄2” thick. There is a good reason. Panels like these have become a key ingredient in the smooth surfaces that many people have come to associate with interior walls. The description simply falls short of the options that can support specific building projects. In terms of size, for example, the 4x8 sheet may be the most common, but options also come in 9’, 10’ and 12’ lengths. Panels that are 54” wide are becoming more popular for builders who want to attach horizontal sheets and fill the spaces created by 9’ ceiling heights. A wide variety of panel offerings are customized for specific applications or needs, says Julie Del Monte, product marketing manager, panels for CGC Inc., the maker of products such as Sheetrock, Fiberock and Securock. Consider walls that will face additional abuse, such as those found in the hallway of a school. An abuse-resistant panel or indentation-resistant offering will be designed to put up with many of the hits, kicks and abrasions that would tend to mar a traditional sheet of drywall. The biggest difference here will come in the form of a heavier paper facing, although the core of the drywall itself may also be enhanced. When durability is a particular concern, a gypsum-fiber panel such as Fiberock incorporates a mixture of gypsum and fibres, which will withstand added abuse. The choice of drywall can make a difference in fire resistance as well.

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photos: cgc inc.

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Anyone who has ever installed drywall will also know that the material is not always asked to create a perfectly flat surface. In the case of an archway between one room and the next, or the creation of a small nook in the face of the wall, this can require a little extra finesse. Here, installers have typically needed to score the back of a sheet in narrow strips or moisten the paper surfaces and then gently try bending everything in place – hoping that it does not snap or crumble in their hands. “Half-inch board was never really meant for that, but that is how people figured out to do it,” Del Monte says. In contrast, flexible panels are made just for this purpose. With a thickness of a mere ¼”, they will curve with relative ease within some limitations. On an inside curve, for example, a concave surface with a radius of 12” along the width (with 6” framing spacing) or 24” along the length (with 9” framing spacing) can be achieved. “It is applied dry. You do not have to do the scoring or wetting,” Del Monte adds. A more common challenge will likely involve the need to build a ceiling with a 5⁄8” sheet of drywall. True, it will do the job, but the 72 lb. weight can make it a tiring process. A ½” ceiling panel made specifically for the purpose can weigh as little as 52 lbs., and the advantages are not limited to the overall mass. “It is lighter in weight but it is also formulated to be sag resistant, which is important if you are adding texture to it,” Del Monte explains. Still, exterior applications such as a ceiling under a canopy, covered walkway or parking garage will likely face some added abuse. Projects like these will likely require an exterior ceiling board. Exterior grade plywood may be an option in these uses, but the purpose-made exterior ceiling board will offer a smoother

surface in addition to resisting the sags and moisture-related damage that would be associated with a typical sheet of drywall. As common as the building material can be, one of its greatest enemies of drywall is in the form of moisture. Some of the earliest products to address this issue came in the form of water resistant gypsum board (green board), which is made with a water-resistant core covered on both sides with water-resistant paper. “It is still economical compared to some products,” Del Monte says. Unlike the Building Codes in the U.S., Canadian Building Codes allow contractors to use it as a tile backer as well. “For years, that was the only thing around,” she says. The next generation of products included water and mold-resistant panels such as Humitek. It is covered in a layer of blue paper, but there is an added level of resistance against water and mold, making it a particularly popular choice in laundry rooms, bathrooms and basements. The overall level of protection is rated through an ASTM test, on a scale of 1 to 10. As water-resistant as blue board can be, the wettest areas of all might need a cement board such as Durock. While these boards are available in 4x8 sheets, just like a typical piece of drywall, they are also available in a 3x5 size which is perfect for a traditional tub surround. A project like this can be completed with one sheet at each end of the tub, with a pair of horizontal sheets forming the back wall.

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photos: cgc inc.

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When it comes to rating the added protection, the cement board scores a perfect 10 on the ASTM mold tests. Green board is simply no match, except in terms of price. “We have cut pieces of Durock and immersed them in water and they look just the same when they are pulled out,” Del Monte says. “We always recommend Durock for tubs and showers because it is the best.” The applications of this material are not limited to areas that are particularly wet. Because of its fire resistant properties, Durock can also be a preferred choice for a wall shield behind a wood burning stove. In many ways, the installation process will appear familiar to those used when applying a sheet of gypsum. It can be scored and broken, but will require dedicated fasteners, tape and joint compounds. When noise is a particular concern, installers should be paying close attention to the assembly’s Sound Transmission Class (STC) rating in addition to the installation methods themselves. Even the smallest holes or cracks will transmit sound, so any openings for fixtures will need to be sealed with acoustical sealant. Of course, the product choices are not limited to the panels themselves. A number of related options can help to create superior surfaces and easier installations alike. Skim coats, for example, can be replaced with an acrylic primer-surfacer that is applied to a Level 4 finished wall, providing an extremely durable, uniform Level 5 finish that virtually eliminates joint flashing. Like the panels themselves, gypsum can also be enhanced with paraffin wax and

other chemicals to generate a moldresisting drywall compound. While the dust from a traditional drywall compound can permeate every corner of a room, the common issue can be addressed with Dust Control Drywall Compound. With the latter material, the fine dust is drawn into clumps that drop straight to the floor, making the compounds a popular choice for contractors who need to retrofit occupied spaces. When trying to enhance durability, meanwhile, a paper faced corner bead will resist impact and rust better than a standard metal strip that is nailed in place. The paper faced corner beads eliminate edge cracking that is common with traditional steel and plastic beads. Damaged sections can be cut out and repaired without removing and replacing the entire bead. Meanwhile, plastic strips and their cores offer the promise of rebounding after be-

ing hit, and will even flex a little when the walls do not meet at a perfect 90°. Fastener choices will make a significant difference of their own. The bugle-shaped head of a drywall screw will allow it to be drawn down just below the surface without breaking through the face paper.

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photos: cgc inc.

Feature

On the other hand, cement boards require a different fastener because the surface reinforcement is a glass mesh. In this case, a bugle head drywall screw will have nothing to connect to. Cement boards require fasteners that will ‘clamp’ the board in place, and roofing nails with their large flat heads are ideal for this purpose. Then there will be the tools. Professional boarders will be equipped with a utility knife that has a fixed blade, a 48” T-square, screw gun and a drywall hammer. Then the tapers will look for a taping machine to cover the tape in compound, a flusher with an extension handle, broad knives and trowels.

Beyond the broad knives, there will be the need for a compound tube to apply joint compound in the corners, along with a flusher or a wiper that can be used to create a smooth finish. The “bazooka,” which applies the tape and compound in a single swipe, may be the fastest tool of all, although they will require lightweight taping compounds. There is a learning process, but these tools are significantly faster than traditional methods once they have been mastered. Like any project, it just comes down to the choice of the materials and the tools.

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Feature

Maximizing The Space

People are moving to smaller homes, but the need for space to accommodate belongings remains the same. There is profitable work to be had for any contractor. By Nestor E. Arellano

photo: komandor

S

can the skyline of almost any major Canadian city and you will see them competing for aerial real estate. Condominium buildings continue to sprout up left and right. If you are in search of a silver lining behind the cloudy economic times, the persistent condo craze could be just the ticket. While many people might be moving into smaller homes, they still need space to accommodate wardrobes and accumulated belongings. This is the perfect opportunity for the contractor who can provide families with the appropriate space saving and organizing solution by way of custom designed closets and cabinets. New families that are just starting out, larger more mature families and down-sizing empty nesters have one thing in common, according to an Ottawa-based cabinet and closet expert.

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photos: closet tailors, komandor

Feature “They all want to maximize every square inch of their home to store clothes, toys, books, tools, shoes and other belongings,” explains Peter Selwyn. He and his wife Wendy operate a Closet Tailors franchise in Ottawa. Closet Tailors specializes in affordable storage setups for reach-in and walk-in closet spaces, home offices, garage spaces, as well as laundry and pantry rooms. The Selwyns launched their business about a year ago. They initially targeted homeowners; however, recently contractors and home builders have begun inquiring about their services. “Homebuyers are definitely asking their contractors and builders to provide them with better storage solutions because the standard cabinets and closets just do not come up to scratch,” according to Selwyn. Lucien Ezman rails against the practice of some builders who scrimp on closets and cabinets. Ezman is director of Komandor Canada, Toronto-based designer and maker of high-end closets and sliding doors. Komandor traces back its beginning to Poland but now has a worldwide network of stores in various countries including the U.K., France, Spain, Mexico and Brazil. The company uses its worldwide network to provide clients with a wide choice of international styles. “Imagine homeowners paying upwards of $280,000 for a home that only has a single clothes rod attachment in the closet,” he complains. Ezman explains a simple twin-level rod arrangement and strategically placed shelves can easily double the useable space of even the smallest closet. Unfortunately, this strategy is not employed in many of the newly built homes and con-

dos in Canada. He notes that in Europe homeowners and builders are more conscious about making every square inch count. “Because of the scarcity of space there, people have a more developed sense of putting extra space to good use compared to North Americans,” according to Ezman. “Well thought-out closets and cabinet spaces used to be seen only in upscale houses in Canada, but in recent years we have seen more people ready to spend extra on storage after they have bought their homes,” he adds. Building a masterpiece of organization: Creating a masterpiece of organization depends on communications, says Richard Mellen, owner of the family run Express Closets in Vancouver, B.C. “Whether you are building the closet or contracting out the job to someone, you need to talk to the clients, listen carefully to their needs and build to suit them,” he stresses. Express Closets specializes in custom designed pieces designed to fit specific spaces that clients want to maximize. As much as 80% of its revenues come from repeat business in the residential and renovation space. Mellen says contractors should pay close attention to what customers want to achieve from the project. “Every family has different needs, projects are never a one-size-fits-all affair, but very often you will need to fit their needs in standardsized closets and cabinets.” If clients are asking where they can find extra space for cabinets and shelves, contractors can point them to often neglected areas such as stairwells, the laundry room or the garage, as well as the low-

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photos: komandor, closet tailors

Feature

er and upper portion of existing cabinet spaces and closets. Contractors should focus on three key questions: • What is the reason for getting a new closet or cabinet? • What is the amount of space being used for storage and what extra room is available? • What is the client’s organizing style? Answers to these three main questions will largely determine the design and layout of the closet and cabinets. “I ask my clients questions such as: how many sweaters they want to store? What are their shoe sizes? Do they fold their shirts? Do they hang trousers by the cuffs or fold them over a hanger?” Mellen says. Closet makers boost capacity of a 90”x50”x27” by replacing the single clothes rod that run the length of the closet with a shorter double-level rod arrangement. The space saved on one side of the closet can be used to accommodate multi-shelving. Lowering the clothes rod can also open up shelf space on the upper portion of the closet for infrequently used items. The bottom of the shelf can also be used to house multi-level shelves or a shoe rack. Alterations such as this can cost anywhere from $100 to $1,000, but the strategy can also be scaled-up to accommodate high-end projects such as an 8’x8’ or larger walk-in closet that cost $3,000 or more to retrofit, says Ezman. To spruce up a three-wall walk-in closet,

designers can provide shelving towers, a vanity mirror and make-up space, rows of cabinets, his and hers hanging space and shoe racks, a full-length mirror, a pull-out jewelry tray and even a dressing island. Add-ons such as these enable builders to up sell to homebuyers, says Ezman. “With these improvements, the building is transformed from a cookie-cutter structure to a customized home.” Contractors who turn to closet and cabinet specialists can

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Feature

Closet and cabinet design software

photo: closet tailors

Here are a few closet and cabinet design tools that you might like to look into. SmartDraw – A free to low-cost design and layout tool. Available at www.smartdraw.com/specials/cabinetdesign.asp CabinetPro - All-in-One cabinetmaking solution providing 3D renderings, shop drawings, cutlist reports, bidding, panel optimization and direct g-code for any CNC router. Available at www.siskiyouproducts.com CabinetCRUNCHER - Cabinetmaking cutlist and 3D design software for building custom cabinets, doors and drawers. A free trial is available at www.cabinetcruncher.com Better Homes and Gardens Home Designer Suite – This suite allows builders to design and visualize your home via 3D models and virtual tours. More information is at www.bhg.com Broderbund 3D Home Architect – This software features wizards and tutorials to help you create blueprint-style plans fast for kitchens or an entire home. Includes a name-brand materials library, simulated 3D rendering, and features for scanning in your own sketches. More information is at www.broderbund.com CCDS Design Software – A low-cost design software for designers of closets, garages, home offices and pantries. It can be ordered from www.c-cds.com

also make a profit by ordering the materials and doing the installation themselves. Systems that sell for $500 to upwards of $1,500 can be easily resold for double that plus the cost of labour according to many cabinet and closet makers. “I often ask a real-estate agent or builder what it would be worth to them if I can double the storage capacity of every closet in the building they are selling,” confides Selwyn of Closet Tailors. He says the idea of more closet or storage space often appeals to female homebuyers. “Nearly 90% of the time it is the woman

who has a say in these matters because they want to know where they will keep their shoes and clothes.” Creating beauty out of melamine: Many of today’s cabinets, shelving and closet doors are constructed out of melamine boards rather than expensive hardwood or exotic woods. That is not to suggest that current cabinets look trashy. Particle boards have come a long way from the plain white board of yester year. They are now available in a wide array of colours and finishes that convincingly emulate real wood. Since melamine is made from recycled wood products, it is also more in tune with current ecologically sustainable building practices. “On principle, I stay away from using wood such as cherry, oak or hardwoods. I believe using particle boards or melamine is greener,” Mellen says. Apart from the various finishes and colours, melamine cabinets and closets can also be made more attractive by adding various design elements. Crown and foot mouldings, specialty hardware, glass doors and strategically placed lighting can create an upscale look on a budget. “You can easily achieve a Hollywood effect by adding even just three or four moulding trims on the walls,” Ezman points out. Designing with software: Some closet makers and installers still sketch projects with paper and pencil, but many turn to design software for its ease of use and presentation capabilities. Peter Selwyn uses Closet Tailors’ proprietary computer aided design (CAD) program. The tool allows him to design various cabinet and closet layouts while he consults with the clients and contains an inventory of the different materials and products that Closet Tailors provides. “The software allows me to mix and match designs and materials more easily than a pen and paper would,” he says. Mellen of Express Closets agrees. “Very often customers are not to sure what they want in terms of design. They need some sort of aid to help them visualize their ideas,” he says.

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GENTEK_Castle_CAD_mar24_10.pdf

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Feature Mellen uses a simple CADbased tool that he bought for $100 back when he started his business. The tool also has a spreadsheet-based feature that allows him to list the materials that will be needed for the project. Unlike Closet Tailors’ proprietary software, the tool only allows Mellen to create a project layout and simple cookie-cutter closet, cabinet and shelving drawings. “This is enough for my operation. All I need is a drawing tool and the means to be able to show clients an approximation of how the end product will appear,” he says. Upscale closet builder Komandor also uses proprietary software specially developed for the company. The software is a presentation tool that allows Komandor employees to create three-dimensional designs that can be “wrapped” in any of the finishes and materials that the company has to offer.

The software also serves as an ordering and distribution tool that connects the company’s worldwide network of stores. “Any Komandor store can determine the availability and location of any product we offer,” Ezman says. The software is also hooked up to Komandor’s manufacturing equipment. For instance, once a design is approved, the system feeds the appropriate measurements and cuts to Komandor’s board cutting machine. Closet design software can be obtained as free downloads from some software makers or building material sites. Alternatively, prices range from $50 to more than $1,000 if they are custombuilt to fit a company’s specific needs. “Ultimately the choice of design software depends on what you intend to use it for,” Mellen says.

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Feature

How Safe Is Your

?

Work Site

Hazards and accidents will never be eliminated from residential construction sites, but they can be, and have been, reduced considerably in the last 20 years or more because of greater awareness and greater commitment from all sectors. By David Chilton

continued on page 58...

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photo: stockbyte

R

esidential construction site safety must be everyone’s concern. Whether it is an apprentice, fully qualified skilled trades, contractors or sub-contractors, all should heed unequivocally the laws and regulations that govern the industry. Beyond the moral issue of employee death or injury, failing to do so may cost companies significant amounts of time and money, whether through lost production or the huge fines some jurisdictions impose where investigation proves negligence.


Green Friendly:

Tips And Advice For The C What Is A LEED Home? A LEED home has been certified by an independent third party, the Canada Green Building Council, as having met the requirements of the LEED Canada for Homes rating system. What is different about a LEED home? • Lower energy and water bills • Reduced greenhouse gas emissions • Less exposure to mold, mildew and other indoor toxins • Operational cost efficient • Best industry practices What is similar? • LEED homes can be any ‘style’ • Have same functions as regular homes Source: LEED Canada For Homes

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Volatile Organic Compounds (VOC) Substances are often found in new homes that release vapours at room temperature. These chemicals are inhaled and absorbed into the skin of inhabitants which can be unhealthy. Careful selection of paints, adhesives and other materials with limited or no VOCs combined with an effective ventilation system reduces these toxins and produces a healthier living environment. Source: Effect Home Builders Ltd.

6,000+ LEED APs More than 6,000 people have become LEED Accredited Professionals (LEED APs) in Canada since 2001. LEED APs work in every sector of the building industry, and

CONTRACTOR ADVANTAGE

have demonstrated a thorough understanding of green building practices and principles and familiarity with LEED requirements, resources, and processes. Source: Canada Green Building Council

Green Building Study A study by CoStar Group found that sustainable “green” buildings outperform their peer non-green assets in key areas such as occupancy, sale price and rental rates, sometimes by wide margins. The results indicate a broader demand by property investors and tenants for buildings that have earned either LEED certification or the Energy Star label and strengthen the “business case” for green buildings, which proponents have increasingly cast as financially sound investments.


he Contractor Professional According to the study, LEED buildings command rent premiums of $11.24 per square foot over their non-LEED peers and have 3.8% higher occupancy. Rental rates in Energy Star buildings represent a $2.38 per square foot premium over comparable non-Energy Star buildings and have 3.6% higher occupancy.

Making A Pitch For Wood Wood products require less energy to extract, process and transport than steel or concrete, and wood-framed buildings are more energy-efficient, costing less to construct and operate over time.   Wood is 400 times better than steel and 10 times better than concrete in resisting the flow of heat. Wood buildings require much less insulation to retain their warmth. Source: PlanetFriendlyCanada.com

LEED Canada-NC 1.0 The LEED Canada-NC 1.0 rating system applies to new construction and major renovations of commercial and institutional buildings, i.e., buildings regulated by Part 3 of the National Building Code. It also applies to retail, mid- and high-rise multi-unit residential buildings (MURBs), public assembly buildings, manufacturing plants, and other types of buildings. Provision is also made for up to 10% of

the building floor area (20% in the case of mixed-use buildings) to be completely exempted. For details, see the Application Guide for Core and Shell Buildings and Leased Tenant Spaces. The guide can be downloaded from the ‘my documents’ section of “MyCaGBC”. The document is free to CaGBC members, and available for $55 for non-members. The Web site is www.cagbc.org. Source: Canada Green Building Council

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Feature ...continued from page 55

Keeping a work site safe is not easy even if everyone makes every effort to avoid accidents and hazards. The Construction Safety Association of Ontario (www.csao.org) says in that province alone there were 384 construction fatalities between 1990 and 2008, or just over 21 deaths a year. Falls constituted the greatest danger, accounting for 162 fatalities in those 18 years. Whether from a ladder, a roof, a scaffold or any other above ground platform, spokesmen across the country state unconditionally that it is the most

by falling materials or equipment. According to the CSAO statistics, there were 81 fatalities between 1990 and 2008, with almost half of them caused by falling or shifting construction materials. The third greatest number of fatalities came from those on construction sites being struck by equipment and vehicles. Again, almost half of that number was killed by one type of accident: equipment or vehicles that were reversing. Electrocution rounds out the top four causes of death on Ontario construction sites, with 54 individuals killed, most often by coming in contact with overhead power lines. Injury rates across the country vary. The CASO says that, using figures assembled from several sources including Statistics Canada, in 2007 the national lost-time injury rate per 100-employed construction workers was 2.00. In British Columbia it was 5.19, but just 1.38 in Ontario and 1.60 in P.E.I. All on-site accidents and hazards will not be, perhaps cannot be eliminated. However, training can go a long way in reducing the number of deaths and serious injuries. In this area, provincial construction safety associations across the country, in concert with workers’ compensation boards and federal bodies such as the Canadian Centre for Occupational Health and Safety (www.ccohs.ca) in Hamilton, Ont., are having a significant impact. CSAO says that in 1990 the fatality rate per 100,000 workers in Ontario was 11.0, but by 2008 that number had dropped to 4.3. Manitoba’s Scott says his association provides many safety training courses, including in-class instruction, specialized sessions depending on the trade or conditions, “training for trainers” and on-line teaching. “The courses are very, very cost effective,” says Scott. On average a half-day in-class course costs $25 and a full day $50. One of CSAM’s classroom courses is The Basics of Fall Protection. Fall protection education is mandatory in Manitoba for all contractors and employers and this essential course will provide a thorough understanding of fall hazards, fall protection controls, fall prevention techniques, fall arrest systems and how to wear properly a fall arrest harness. On-line, CSAM’s interactive instruction is extensive. There is Electrical Safety, Confined Space Awareness, Incident Investigation and 15 others. In Ontario, CSAO provides extensive in-class training with numerous courses running from half-days to three days. The instruction includes Construction Health and Safety – Basic, Scaffold Users’ Hazard Awareness and Tracking Control and Backing Vehicles. All are taught at different locations around the province

photo: istockphoto

All on-site accidents and hazards will not be, perhaps cannot be eliminated. However, training can go a long way in reducing deaths and serious injuries.

significant hazard on a construction site. The view of Henrik Vogt, provincial co-ordinator of Construction Health and Safety for the Ontario Ministry of Labour is typical. “The greatest hazard is falling,” he says, wherever it occurs or whether an injury is fatal or not. Sean Scott, executive director of the Construction Safety Association of Manitoba (www.constructionsafety.ca), echoes Vogt’s opinion, calling falls the most cited reason for accidents in his province. This major hazard does not occur in a vacuum, however, Scott notes. “Poor housekeeping (on a site) is the root cause of trips and falls,” he says. The next greatest hazard after falls is being crushed or struck

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photo: istockphoto

The next greatest hazard after falls is being crushed or struck by falling materials or equipment. including CSAO headquarters in Toronto, hotels and even golf course clubhouses. Elsewhere in the country, in Alberta, for example, the Alberta Construction Safety Association (www.acsa-safety.org) runs more than 30 in-class programs and another five that are computer based. Robin Kotyk, chief operating officer of ACSA, says there are also other plans afoot to improve training. “We are working

In the next issue of

very closely with the Canadian Homebuilders Association – Alberta on the Builders Safety Guide for 10 major occupations in residential construction. It will detail what they should know and what they should be doing and will be signed off by the developer and contractor and will be coming soon.” The guide will be put online, says Kotyk, and available to other jurisdictions besides his. The New Brunswick Construction Safety Association (www.nbcsa.ca) has about 20 courses taught in-class and another four available on-line, including at least one in French. Course fees vary, but for members of their respective construction safety associations they remain modest in every case, between $60 and $100. Despite the advantages of taking training courses where necessary or required, there is further

Contractor Advantage • Entry doors and hardware • Bathroom renovations • Tools of the trade • Roofs and shingles • Millwork • Countertops and fixtures

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  

   




instruction available; and although not mandatory, it is increasing looked at as the de facto standard in construction, says CSAM’s Scott. It is the Certificate of Recognition program (COR) nationally trademarked and endorsed by the Canadian Federation of Construction Safety Associations (www.cfcsa.ca). COR is conferred by one of the provincial associations following the successful completion of four training modules, the completion of a company safety manual, the implementation of a company safety program, an audit by the company usually three to six months after the safety program begins, a provincial audit and an independent audit. Validation is good for three years, and more and more clients are demanding that contractors have COR training before they can submit bids, say the association executives. As well as the obvious benefits of safety training, such as reduced accident toll, greater productivity, lower workers’ compensation premiums and so on, there are also laws that set out the appropriate legal responsibilities for those in the industry. Bob Whiting, senior project manager at CCOHS in Hamilton, Ont., warns that “the penalties can be very very high for infractions; the tolerance for infractions is decreasing.” Jurisdictions across Canada require owners, contractors, sub-contractors, and supervisors to provide training and to maintain as safe a work site as is reasonably possible. In Ontario, the Occupational Health and Safety Act mandates that “constructors and employers” must provide information, instruction and supervision to protect the health and safety of workers, hold training programs for workers and others as required, and ensure that a supervisor is a “competent person.” Competent here means someone who is qualified by training, knowledge and experience to organize the work and its performance, is familiar with the Act and the applicable regulations, and has knowledge of any potential or actual danger in the workplace. In Alberta, the Occupational Health and Safety Code is explicit. It says, for instance, that an employer must assess a work site and identify any existing or potential hazards before work starts or before ground is broken for a new site. Further, a “prime contractor” must ensure that any employer on a work site is aware of any potential or actual hazards that may affect that employer’s

workers. A failure to abide by the rules in Alberta can result in spot fines, which tend to be lower, and fines levied following an investigation into negligence can be as much as $500,000. Next door in Manitoba the fines are not quite that high, but CSAM’s Scott leaves little doubt that fines there are likely to climb from the $150,000 levied on a first offender to the current $300,000 a firm committing a second or subsequent offences has to pay. “Remember negligence is a strict liability offence in Manitoba,” says Scott. “The government only has to show your company did it. You the accused have to prove your innocence.” In other words, Scott says, it is like Canada’s libel laws: the onus is on the defendant not the plaintiff as is the case in other legal action. Marvin J. Huberman, a Toronto lawyer and a certified specialist in civil litigation and expert in dispute resolution urges all contractors, sub-contractors and others to use caution when it comes to safety and any potential exposure to legal action.

spokesmen across the country state unconditionally that falls are the most significant hazard on a construction site.

photo: istockphoto

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Feature

“All the law requires is that people on the property are reasonably safe,” says Huberman. Nevertheless, he suggests the first order of business before a project begins should be obtaining legal advice. Then contracts that set out relationships, objectives and so on between and among the various parties should have clauses identifying them as such, and, third, insurance is crucial to shift, cap or minimize the risk of damages. Hazards and accidents will never be eliminated from residential construction sites, but they can be, and have been, reduced considerably in the last 20 years or so because of greater awareness and greater commitment from all sectors. Thankfully, the evidence shows that trend is likely to continue.

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Critical Illness Coverage

Signing up for it means you prevent having to draw too heavily on business funds, savings, RRSPs and asset sales when hit by illness or injury. By Mark Beckham

In the March/April issue of Contractor Advantage we talked about the absolute urgency of purchasing disability coverage to protect your greatest asset: your income. I know you have since been thinking about the consequences of not being able to work due to an illness or injury. What would happen to your house? Your car? Your toys? We discussed the buying decision-making process and the questions you need to ask yourself. Here they are again: • How soon do I want to get paid? • How much do I want to get paid? • How long do I want to be paid? The answers to these questions have a profound effect on the cost of the final product you choose. For example, the longer you wait to get paid, the lower the premium. In this article, we will focus on answering the question of how soon you want to get paid. As mentioned, the longer you wait for coverage, the lower the cost of the product. Let us look at the real cost of waiting. Sure, you pay a lower premium, but think very carefully about the impact not being able to work will have on your business and family. While you are unable to work, all business and household expenses will relentlessly continue. Where will the funds come from to pay for your mortgage, loans, payroll, government remittances and food? What happens to the day-to-day operations of the business? Who is going to make sure things continue on sched-

ule? Who manages everything you took care of? What about future sales opportunities? Who will fill your shoes? In a nutshell, the consequences of you being unable to work for an extended period of time can be huge. With proper thought and planning you can minimize, if not eliminate, the risk. You can identify the key tasks you do day to day. You can cross-train someone for those tasks. You can plan the replacement you might need to hire. You can already introduce clients to a key employee that can maintain relationships in your absence. All things can be planned for. Think about the “peace of mind” you would have knowing the affairs of your family and your business are in order. Ask yourself; however, where will the money come from to pay yourself? You might need time for treatments, recovery and rehabilitation. You might need to pay for travel, hotels and food for you and your spouse. Will your spouse need to take a leave of absence? Studies have shown that the cost of out-of-pocket expenses due to an illness can reach $70,000. During this time, you are no longer contributing to the business, so you have now become a liability. (You are no longer an asset.) If you have a partner, they might eventually resent you being paid when not at work. They might have taken on more responsibility and working longer hours. Their spouse may begin to apply pressure to cut you loose. That is all you need while recovering, more stress.

Mark Beckham, BSc, is one of the Principals of Bencom FSGI (Financial Services Group Inc.)  His professional experience includes employee benefits and financial services including retirement products and insurance. He can be reached at mark@bencomfsgi.com or by telephone at 888-664-5555 ext. 301.

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Are you getting the idea of why it is imperative to have a shareholder’s agreement and have it properly funded? When ill, money can come from different sources: savings, RRSPs, selling assets or disability insurance. The longer you wait to be paid by your disability policy, the greater the drain on your business as it continues to pay you until your disability income begins. This is where critical illness coverage helps. Critical illness coverage pays a tax-free lump sum in the event you are diagnosed with an illness that is covered under the policy. Different policies cover different illnesses. Coverage has evolved over the years in response to market pressures. Today you have a great deal of flexibility in choosing a product that meets your needs and budget. If I can make a recommendation, I would have you look at a combination of critical illness coverage for the short-term cash needs and disability coverage for the long-term income requirements. Keep in mind that if you are injured you are not paid critical illness coverage. My advice may be to purchase a policy equal to a three-year income. Pair that with a five-year disability product that pays after six months. This is a balance of premium payments and the cash provided by CI and DI to fund personal and business expenses, while you are not working due to an illness or long-term disability. Remember, in time of need, money can come from different sources: your savings, RRSPs, selling assets or by simply taking a few moments today to talk about getting disability coverage. Do not delay. You do not want to be saying to yourself one day, “I never thought it could happen to me.”


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Contractor Advantage May / June 2010  

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Contractor Advantage May / June 2010  

The Colours of Money Issue