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COMPLIMENTARY

July/August 2012

CONTRACTOR ADVANTAGE CA N A DA’ S M AG A Z I N E F O R P R O F E S S I O N A L C O N T R AC T O R S

ALSO:

Kitchen Fixing + Selling Value + Tax Tips +

SUMMER

SIDING

PLUS:

SOLAR POWER FOUNDATIONS IN A SNAP

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Contents

Features

Deduction Details / 22

Understanding what constitutes a legitimate deduction can leave more money in your pocket.

32

Here Comes The Sun / 26 Contractors who stay on top of the alternative-energy curve have a powerful selling tool in their arsenal.

Kitchen Fixing / 32 Kitchen renovations may be among the most lucrative projects in the contracting sector, but they can also be the most challenging.

38

Inside

Side By Side / 38

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Advances in coatings and materials alike have created colours and textures that will last for decades.

NEWS WATCH / 5 CMHC renovation study NEW PRODUCTS / 8 New and improved products BUSINESS STRATEGIES / 12 Manage the money flow SMART MONEY / 14 The taxman cometh ECONOMICS 101 / 16 Turn business cards into business ONLINE MARKETING / 19 Demise of the Yellow Pages LEARNING CURVE / 21 Creating digital gains July/August 2012 Vol. 18 No. 4

Editorial Director Castle Building Centres Group Ltd. Jennifer Mercieca Managing Editor Paul Barker Art Director Mark Ryan

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: 100 Milverton Drive, Suite 400 Mississauga, Ont. L5R 4H1

Contributors Nestor E. Arellano Victoria Downing Stefan Dubowski Jingchan Hu Josh Kerbel Athenée Mastrangelo David Chilton Saggers John G. Smith Paul Welch

Foundations In A Snap / 46 ICFs are increasing in popularity across the country, but experts say education around their benefits is still needed.

Diving Into Shallow Foundations / 52 Close adherence to building codes and proper damp proofing and water proofing can keep your clients’ properties high and dry.

Advertising Enquiries Vendors whose products are carried in Castle Building Centres stores have the opportunity to advertise in

Contractor Advantage

For more information or to reserve space in the next issue, contact: Jennifer Mercieca Director of Communications Phone: 905-564-3307 Fax: 905-564-6592 E-mail: jmercieca@castle.ca

Published and designed exclusively for Castle Building Centres Group Ltd. by Business Information Group Material Contact: Jessica Jubb 416-510-5194 Copyright 2012

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News Watch

Renovation spending reached $20.9 billion across 10 major centres in 2011: CMHC report

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n estimated 1.7 million households in 10 major centres undertook renovations in 2011  according to Canada Mortgage and Housing Corporation’s (CMHC’s) Renovation and Home Purchase Survey released this spring. This represents about 37% of homeowner households, a slight decrease from 42%, or 1.9 million households, in 2010. The estimated average cost of renovations undertaken in 2011 was $13,709, an increase from $12,972 in 2010. “Almost $21  billion was spent on renovations in 2011 across the 10 major centres surveyed, a decrease from 22.8  billion in 2010” said Mathieu Laberge, deputy chief economist at CMHC. “As well, when Canadian homeowners were asked about their renovation plans for this year, 38% indicated that they intend to spend $1,000 or more by the end of 2012. Renovation intentions for 2012 are similar to the 2011 results.” Of the 10  major centres surveyed, the highest percentage of homeowner households that renovated in 2011  was in St. John’s, Nfld. at 43% followed by Québec (42%) and Winnipeg (41%). The lowest proportion was Vancouver at 33%. Overall, 68% of the renovating households did not see their debt level increase as a result of the renovations in 2011. This is up slightly from 66% in 2010. Meanwhile, renovation intentions for 2012 are strongest in St. John’s, where 48% of consumers indicated they plan to undertake renovations costing $1,000 or more. This is followed by Winnipeg (44%) and Halifax, Ottawa and Edmonton (42% each). The proportion of potential renovators is lowest in Vancouver (34%), Montréal (37%) and Toronto and Calgary (both at 38%).

On the home purchasing front, 6% of all households indicated they bought a home in 2011, unchanged from 2010. The largest share of homebuyers was in Quebec (10%), followed by Ottawa and St. John’s (both at 7%). The lowest share of homebuyers was in Toronto (4%). Overall, the share of households that intend to buy a primary residence in 2012  is 5%. Home buying intentions are strongest in Edmonton (7%), Québec and Calgary (both at 6%) and St. John’s and Montreal (5% each). Purchase intentions in all other surveyed centres are at 4%. The 2012  Renovation and Home Purchase Survey reports on renovation expenditures made in 2011, as well as intentions to buy or renovate a home in 2012 in the following 10 major centres: St. John’s, Halifax, Quebec City, Montreal, Ottawa, Toronto, Winnipeg, Calgary, Edmonton, and Vancouver. More detailed questions on intentions to buy or renovate were asked in Halifax, Montréal, Toronto, Calgary, and Vancouver.

May 2012 housing starts released The number of housing starts was trending at 212,400 units in May, according to (CMHC). The trend is a moving average of

the monthly seasonally adjusted annual rates (SAAR) of housing starts. The standalone monthly SAAR was 211,400 units in May, down from 243,800 in April. “As anticipated, the pace of housing starts observed in April was not sustained in May. In fact, the pace was more in line with the average over the last six months,” said Mathieu Laberge, deputy chief economist at CMHC’s market analysis centre. “Although some ups and downs are likely to continue in the months ahead, the pace of housing starts should trend lower as the year progresses.” The seasonally adjusted annual rate of urban starts decreased by 15.8% to 189,600 units in May. Urban single starts decreased by 4.2% to 64,300 units, while multiple urban starts decreased by 20.7% to 125,300 units. May’s seasonally adjusted annual rate of urban starts decreased by 35.8% in Québec, by 18.3% in Ontario, and by 7.7% in the Prairies. Urban starts increased by 6.4 % in Atlantic Canada and by 20.9% in British Columbia. In each region, the decrease or increase was mainly due to changes in multiple starts. Rural starts were estimated at a seasonally adjusted annual rate of 21,800 units in May.

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News Watch

Top talent awarded at Skills Canada competition

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anada’s best and brightest skilled trade and technology students received official recognition for their outstanding performance recently as Skills/ Compétences Canada announced the results of the Skills Canada National Competition. The closing ceremonies, held in Edmonton, were highlighted by the parade of champions and the announcement of the members of Team Canada, whose next stop will be WorldSkills Leipzig 2013. The Skills Canada National Competition is the only national, Olympic-style, multi-trade and technology event of its kind for young students and apprentices in the country. The event took place May 14-15 at the Edmonton EXPO Centre where 40 different assigned projects were showcased in major

skilled trade and technology categories. Competitors were evaluated by independent judges from the respective industry sectors, who based their decisions on an assortment of industry standards and established work practices, including such criteria as quality of work, safety, cleanliness, skill level and creativity. “The goal of this annual competition is to reward students for excellence in the skilled trades, while directly involving industry leaders and educators in the training process and in evaluating their performance in a way that is relevant to employers’ needs,” said Shaun Thorson, CEO of Skills Canada. “The enthusiasm and hard work shown by the competitors throughout the competition has been inspiring and we want to con-

gratulate each one.” A total of 180 medals were awarded to the top champions in six skilled trade and technology categories: construction, transportation, manufacturing, information and technology, service and employment. Best of Region competitors were also recognized for having the highest competitive score by category for their Region. The 35 members of Team Canada heading to WorldSkills Leipzig 2013 will compete in 33 skill categories against more than 900 Competitors from 51 Member countries/regions. The four-day WorldSkills Competition is the biggest of its kind in the world and considered the pinnacle of excellence in skilled trades and technologies training.

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New Products

Building Blocks

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Innovative Products for Today’s Renovators TIMBERTECH EXPANDS ITS DECK LIGHTING PORTFOLIO

TimberTech recently extended its lighting portfolio with three new products that the company says bring style and safety to decks. TimberTech DeckLites provide multiple deck lighting design options. As low-voltage systems, they do not require a permit for installation and use minimal electricity. DeckLites systems carry a five-year residential warranty. Under-Rail lights are designed to be installed inside the top rail between balusters, making it practically unseen, shining warm light down and away from direct line of sight. They can also be integrated into various railing types. For decks without railing, TimberTech has announced In-Deck lights that can be installed into decking planks. The LED lights are approximately 1” in diame-

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NOVIK SIDING PANELS PROVIDE EXTERIOR DESIGN OPTIONS

Novik’s NoviStone FS (Fieldstone) and NoviStone RR (River Rock) siding panels create the look of stone with the durability and low maintenance of polymer. Fieldstone is designed to combine a rustic appeal and trendy modern architecture, while River Rock recreates the look of stones polished smooth by flowing water, the company says. Available in smoke white, shadow gray and misty beige, the

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ter and surrounded by an architectural bronze finish and contain a dimmer that can adjust to the brightness of their lighting systems. All three products are available through Owl Distribution Inc.

panels are lightweight and use Fast-Fit technology to make for quick and easy installation by a single person. They provide resistance to temperature, warping, expansion, contraction, cracking, and colour fading, are durable against wind and impact, and are fire-rating certified. Designed to be mixed and matched with other shingles and siding, they can be used on foundations, facades, low walls or entire projects to create unique individual styles. Further information is available at www.novik.com.


New Products

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MAIBEC RELEASES NEW LOCKING WOOD SIDING

Maibec’s em+ series of wood siding makes installation quicker and easier, and reduces waste. Designed with a tongue and groove top and bottom, as well as a unique end-match system, em+ series panels lock joints so that they no longer have to land on a furring strip. This cuts installation time, and the elimination of mitre joints reduces waste and need for touch ups. In addition, the em+ series allows for the use of a pneumatic stapler for 2” stainless steel staples, instead of nailing the product by hand, further reducing installation time, eliminating the need to touch up each fastener, and providing a cleaner look. The series contains four profiles — 1x6 Rabbeted Bevil, 1x6 Cove, 1x6 Channel and 1x6 V-Joint — and comes in any twocoat solid stain or natural tones colour. Available through Owl Distribution Inc., further information is available at www.owldistribution.com.

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CIL’S NEW PREMIUM PAINT BRAND IS ECO-FRIENDLY

CIL has released a new environmentally sensitive brand that contains ultra-low VOC (volatile organic compound). VOC pollutants contribute to smog, react to sunlight and can cause respiratory complications, skin and eye irritation, and a number of serious ailments. According to the company, CIL Premium contains no VOCs and is tinted with only low-VOC colourants. It can be used for all interior applications and is available in eggshell, semi-gloss, satin and flat finishes, kitchen and bath formula, primer, sealer and ceiling paint. For outside applications, CIL Premium exterior paints are low in VOCs and feature ultra-violet protection against fading, peeling and cracking. All can be tinted with any of CIL’s 1,224 colours. CIL Premium retails for $30 to $37 per gallon, depending on the finish, and is also available in five-gallon pails. Further information is available at www.cil.ca.

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New Products

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CANARM NOW DISTRIBUTING FLEXIBLE TAPE LIGHTING KIT

The SMD 5050 flexible LED (light emitting diode) tape lighting kit is now available through Canarm Ltd, a global marketing and manufacturer of lighting, air moving and related products based in Brockville, Ont. The kit is easy to install and can be mounted anywhere – under kitchen cabinets, bookshelves, china cabinets and stair edges. Each includes three metres or 118” of SMD 5050 tape lighting, power feed cable assembled on the tape, 12 volt-24W power supply, a five feet power cord with rotary switch, five cover joiners and two connectors. Along with its small size, other features include low power consumption and the fact it has a long life span (it lasts up to 50,000 hours) and can be easily cut and reconnected.

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New Products

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PPG’S PITT-GLAZE WB1 FINISH CAN EARN LEED POINTS

PPG’s Pitt-Glaze WB1 Water-Borne Acrylic Epoxy and Single Component is a washable, stain- and abrasion-resistant finish. With low-VOC content (less than 100g/L) and low odour, this water-borne acrylic epoxy is designed for high-traffic areas and can be used in both home renovation and new construction of commercial and institutional facilities. It does not require mixing prior to use and has an unlimited pot life. In addition, it makes application and clean up fast and easy, requiring only soap and water. Available in eggshell or semi-gloss whites with pastel base, PittGlaze WB1 can also earn LEED 2.2 and 3.0 credits.

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YOUNGSTOWN GLOVES NIMBLE ENOUGH TO WORK WITH TOUCHSCREENS

Youngstown Touchscreen gloves allow contractors to operate digital touchscreen devices, such as iPads and GPS screens, while at the same time providing safety on the job. The gloves feature a capacitive material on the thumb, index and middle fingers allowing contractors to swipe and type as easily as using bare hands. They work on both resistive and capacitive touch screens, and will not scratch screens and monitors. They also deliver protection and comfort, with a durable palm, with non-slip reinforcement, for construction work. Knuckle protection on the top of the hand eliminates scrapes and abrasions, and a terry cloth thumb built into the glove allows for the wiping of sweat and debris. In addition, the gloves have been double-stitched with bonded nylon thread for greater durability.

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Business Strategies

Manage The Money Flow The wrong method of accounting can make a big difference in determining how useful your Profit and Loss reports are. BY VICTORIA DOWNING

If you have been reading this column, you will know that we believe that your company numbers tell the company story. Much of that important story is told by your financial numbers and this is totally affected by the method that you use to for your company’s accounting functions. Many renovators roll their eyes anytime I start talking about financial reports and numbers, but let me tell you again: your ability as the financial manager of your company is directly related to your company’s long term success. You have to embrace this part of your role as business owner. In this article, we will explore several accounting methods and help determine which one is the best for you and your business. There are a number of ways to report your revenue (income) and your costs (expenses). Each accounting method differs in its answer to the question “When is a sale a sale?” The method of accounting that you use makes a big difference in how valuable the reports will be to you in managing your company and producing your Profit and Loss report. There are three common formats, but remember, common does not mean correct.

actually collected the money for it to be an income. We must have actually paid the bill for it to be an expense. This method gives you a good idea of cash flow for the time period; however, this report can potentially be very misleading. Collect a first draw, and it goes to income, but you have not earned that money. You have not done the work it pays for. You have just gotten an advance. Are you behind on paying your bills? Cannot pay $20,000 to the lumber yard that you owe? It will not show under expense because with the cash method you only show the bills you have actually paid. Most entrepreneurs including renovators use the cash method at first. Get out of it as fast as you can! Using the cash basis for taxes might be perfect (talk to your tax advisor), but it is useless as a management tool. Accrual methods of accounting recognize income and expense when they are earned and incurred without concern as to when the money actually changes hands. In an accrual method all invoices are entered as expenses when they are received. Thus your job costs are more up-to-date; however, knowing that a Profit and Loss Statement is produced on an accrual basis only tells you it is not on a cash basis. Now, you need to know which type of accrual.

In the billings method, income includes all billed receivables (money people owe you) and expenses include all billed payables (money you owe someone else). This method, too, can be a very misleading way to present company operations. One of our business management rules for remodelers is to stay ahead of your client in your billings and collections. But that “staying ahead” means many of your reports would look too rosy. Others might look too dire. For instance, you may have actually completed 30% of a job, yet billed the owner 45%. Because this method recognizes all billed amounts as income, your P&L report will show that 45% as income against only 30% of the job costs. Your next reports, though, will show 55% of the billings against 70% of the job costs. In this circumstance, your P&L’s would at first show your financial position as much rosier than reality, then would later show a poor picture as though your job costs were running very high in comparison to your income. You want to manage with realistic figures.

COMPLETED JOBS ACCRUAL METHOD

’’ ‘‘ ’’ ‘‘ ‘‘ ’’ ‘‘ ’’ ‘‘ ’’ ‘‘ ’’ THE CASH METHOD QUESTION:  When is a sale a sale? ANSWER: When we actually get the money.

In the cash method, income includes all revenues actually received and expense includes all bills actually paid. We must have

THE BILLINGS ACCRUAL METHOD QUESTION:  When is a sale a sale? ANSWER: As soon as we bill the money.

Victoria Downing is president of Remodelers Advantage Inc. and is a leading authority in the remodeling industry. She has authored and co-authored several industry books, including The Remodeler’s Marketing PowerPak. She can be reached at victoria@remodelersadvantage.com or by phone at 301 490-5620 ext. 105.

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QUESTION:  When is a sale a sale?

ANSWER: Not until the job is finished (or substantially finished).

This method tallies all money coming in for a job and all money paid and billed for the costs on the job, but does not show these as income and expense on the P&L until the job is completed. Meanwhile, overhead expenses are usually shown as they are expended each month. Because this method is the slowest to show new dollars in income, it may well be chosen by your accountant to present information since it may defer your income to the next year


Business Strategies for tax purposes. Of course, ultimately that income catches up with you in the next year. If you use this method for your management reports, your profit and loss statement may look too negative. If you are a specialty contractor and your jobs are very short in duration (under a week), you can use this method effectively; however for full line renovators, this method is the most misleading. Many accountants will recommend that you use the completed jobs method because it is the recommended method for new home builders. The accountant may not differentiate you as a remodeler. Do not use the completed jobs method of accounting for your management reports if your jobs are under construction for more than a week or two. Your day-to-day financials should be produced with the Percentage of Completion Method. This is the gold standard for renovation companies and we insist that all of our members use this form of accounting. Here is a description of why the Percentage of Completion Method is the best, written tongue-in-cheek by one of the members of our Roundtables Peer Groups: “Percentage of Completion is a bookkeeping system that can accurately show you how your billings and revenue stand in relation to the amount of work you have actually accomplished on a job. It can also teach you three important lessons:

Instead, it is something you have to pay back, one way or another. The best way to pay it back, of course, is through your own hard work and that of your employees and subcontractors. If you have figured things properly, you will be able to get the work done, make the client happy, and then reap the profit margin that puts food on the table, sends your kids to college, and keeps your company alive and well. Every now and then, though, things can happen that might prevent you from starting a job after you have taken a deposit, or that might keep you from finishing work you have already billed for. For example, one dark and stormy night you might get a call telling you that your client has been found lying under a purple shroud, wearing new Nike sneakers, and clutching the launch schedule for the next Space Shuttle and your client’s heirs have no interest in continuing the project you started for him that day. A natural disaster could strike; an earthquake, tornado, asteroid, and, in the blink of

an eye, your project can cease to exist. God could come down and issue the following pronouncement: ‘That’s it. I am closing this show. You all have 24 hours to settle your accounts. Those who do, step right over there and say hello to St. Peter. Those who do not? Thanks for the memories.’ Suffice it to say, if you bill your clients in advance for work you have not completed and then you use that money, say, to buy a collection of rare wines (and then you drink the wine), you could find yourself in the untidy position of not being able to pay back that advance billing if the need to do so arises. A well-organized Percentage of Completion schedule can help you resist the temptation to make that kind of mistake.” Your Homework: Find out which accounting method you are currently using for taxes (listen to your tax expert for this) and for management.

“Simply enjoy life!”

• Billing clients in advance for work yet to be done can be a good idea. • Billing clients in advance for work yet to be done can be a bad idea. • It all depends on how you handle the money. The key to understanding advance billing is to realize that, whether it is a deposit you take before you start the job, or any other advance invoice during the course of the job, the money you end up with is in effect, a no interest loan. What is so bad about that? Nothing, really. In fact, it is a beautiful thing. A cash loan at zero interest? You would be a fool to turn it down. What you need to remember is that it is still a loan, not free money. It is not a birthday present from a rich uncle. It is not a big happy surprise from the sweepstakes Prize Patrol, nor is it a new boat, a membership at a country club, or ski condo in Vermont.

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Smart Money

The Taxman Cometh A tax audit can be a daunting and stressful experience, but you can be prepared in the event you are selected. BY JINGCHAN HU

As a follow-up to part one of our article series, we set out general guidelines to help you prepare for a potential tax audit. If you are concerned that you might be selected for an audit, how do you prepare for a possible visit?

Before you are selected for an audit Now is the time to take some precautionary steps to ensure that you are prepared in the event that you are selected for an audit.

1. Review accounting and tax treatment dif-

ferences: Certain transactions are reported differently for accounting and tax purposes. Review your accounting and tax differences to make sure you have suitable explanations to justify the difference in treatment. 2. Review significant transactions: Tax auditors will likely want to see supporting documentation for significant transactions undertaken in a given year. Review any significant transactions to ensure that you have the proper documentation in place to support them, such as invoices, legal agreements and resolutions. 3. Identify possible areas of non-compliance: Before you receive an audit request, if you identify any areas of non-compliance during your review of the books and records it may be possible to make a submission to the CRA’s voluntary disclosure program (VDP). Submissions through the VDP program will help you avoid penalties and reduce interest associated with the non-compliance. Contact your public accountant to discuss your options and risk areas.

4. Review communication from your profes-

sional advisors: Certain correspondence between you and your legal counsel may be privileged, which means you do not have to provide the correspondence to an auditor even if he asks for it. You should communicate with your lawyer to ensure you know which documents are privileged and should store these documents separately. This way you can avoid unnecessarily turning over documents to an auditor when he arrives at your doorstep.

You have been selected for an audit Knowing that you have been selected for an audit will undoubtedly cause you stress, even without good reason. Below are some general guidelines to assist you before, during and after an audit.

Before the auditor arrives Once you are selected for an audit, the tax auditor will contact you to make arrangements

for a convenient date to begin the audit. It is not unreasonable to request a later date if, for example, you have a seasonal business and you are in your busy period, or if you will be unavailable due to your travel schedule.

1. Questions

to ask the auditor: As part of your initial discussion with the auditor, you should ask a few questions: What years are being audited? Where you have more than one business, which business is under audit? This will save you the hassle of gathering unnecessary information and will allow you more time to focus your efforts on preparing for the years in question. 2. Gather documents: Any documents that relate to the years in question should be gathered including, but not limited to, the general ledger, financial statements, corporate minute books, organization chart, legal agreements, other documents pertaining to items such as transfer pricing, management fees and so on.

During the auditor’s visit Jingchan Hu is a manager in Soberman LLP’s Taxation Group. If you have any questions relating to this article, we encourage you to contact Jingchan at jhu@soberman.com or (416) 963-7124. 14 |

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An audit may range from a few hours to several weeks depending on the nature of the audit and the complexity of the business under audit. Below are some tips on what to do during the auditor’s visit.


Smart Money 1. How to treat the auditor: It is in your best interest to cooperate with the auditor and try to be as pleasant and courteous as possible. You should provide a clean and quiet area for the auditor to perform his work. The fewer distractions the auditor has to deal with, the sooner he can complete his work. Arranging a quiet area for the auditor will also reduce the opportunity for casual communication between the auditor and your staff, conversations that probably would not be beneficial to you. Additionally, you should make yourself available to answer questions or gather information as needed. Making yourself available ensures the auditor’s visit runs efficiently; however, this does not mean that you have to sit with the auditor at all times. 2. Limit your resources: You should limit the number of people that interact with the tax auditor. This will ensure that only relevant information is relayed to the auditor, and that individuals are not answering questions outside of their area of expertise. Gen-

erally, the auditor deals with the owner(s), bookkeeper, and the public accountant. It is also a good idea to let staff know that an auditor is coming. Inform staff of who the auditor should be dealing with and, in case the auditor is seeking information, instruct staff to direct the auditor to the above mentioned people. 3. Talk to the auditor once they finish: Once the audit is over, you should ask whether or not any adjustments will be proposed, so that you know if this matter is finished or if further action is required.

After the auditor’s visit Below are some tips on how to deal with proposed tax adjustments, if applicable.

1. R eview

the proposed adjustments with your public accountant: The auditor will discuss proposed adjustments with you and/or your representative. At your request, he will confirm the proposed adjustments in writing and give you a reasonable period of time

to informally dispute the adjustments and provide further information to support your position. We recommend that you review the proposed adjustments with your public accountant and decide whether you agree with the changes. 2. B e persistent in your position: If you and your public accountant agree that the auditor has proposed adjustments that are incorrect, you should meet with him or her to petition for the position originally taken. If you cannot reach an agreement with the auditor, you may want to arrange a meeting with the auditor’s supervisor. If neither of these avenues work in your favour, you may have to file a notice of objection. To save time and money, it is advisable to settle the matter at the initial audit level. A compromise might be the best solution. This article has been prepared for the general information of our clients. Specific professional advice should be obtained prior to the implementation of any suggestion contained in this article.

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Economics 101

Turn Business Cards Into Business The difference between having the right and wrong CRM system can make or break your company. BY ATHENÉE MASTRANGELO

Your clients are your number one priority, right? How are you managing their information and your relationship with them? Do you have all their information stuffed in a shoebox or do you have an effective CRM (Contact Relationship Management) system? Maybe you are somewhere in between? The difference between having the right and the wrong CRM system can make or break your business. Finding the right system for you is not an easy task. It is also a personal task; just because Mike next door is very happy and successful with his CRM system does not mean it is the right system for you. Every person, business, and situation is unique.

Scenario 1: Kevin wanted only top of the line for his team and chose one of the more expensive CRM systems. Unfortunately, it was too complicated and too time consuming, so in the end his team ended up never using it.

Scenario 2:  Becky started out with a free CRM system, but slowly had to start upgrading to a paid version to get the necessary options. In the end she was paying more than the average system, but was getting less in return for her investment.

Rather than making those same mistakes, assess your situation and ask yourself some really important questions. 5 Key Areas Prior to investing your time, money, and energy into a new CRM system you want to ask yourself some important questions. Here are some ideas to get you started:

1.Contact Management For starters, you know you need to store and manage all the people in your life from your clients, colleagues, leads, and vendors, but what is it that you need to save aside from the obvious things like name, address, phone numbers, e-mails, etc.? • Do you want to store their family information, e.g. spouse and children’s names, pets, birthdays and stories? • Are you a visual person and would like to be able to store their business card image/ logo? What about their picture? • Do you want to be able to organize your contacts into groups? (Hint: Yes!)

2.Your Relationship Now that you have their information, what about your relationship with them, or your history? Is this important to you? If so, what is it you want to store and manage?

Athenée Mastrangelo helps busy professionals use technology to stay organized, productive, and connected. She is available for workshops, online training, and individual consultations, and clients include Marriott, United Colors of Benetton, Amsterdam Manor Beach Resort, business owners, executives, and entrepreneurs. Connect with Athenée at www.ActionChaos.com or 407-435-2170. 16 |

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• Collect any and all phone calls and take note of important things discussed? • Keep a record of things covered and discussed during meetings and presentations? • Any e-mail correspondence? (If e-mail is an important part of this, you definitely want to look at a CRM system that syncs with your email.)

3. Projects, Tasks and Events Some CRM systems have their own calendar or they can integrate with your calendar system making it easy to share events, projects, and tasks with other people in your team. It is helpful to have your tasks and events synced with your contact system. This is definitely worth checking into. With some CRM systems you can even automate a lot of your assignments and tasks. This is a great time saver. For example: Let us assign a new task to Jane, asking her to call a new lead. That task will have all the details and instructions for that call; what to say and what questions to ask. Is lead interested? If Jane answers ‘Yes’, the CRM automatically creates a personalized e-mail to the lead, thanking them for their time and can create a follow-up task for Jane to drop by their office with a welcome basket. How cool is that?

4. Your Sales Cycle Here is where you can go as simple or as detailed as you need to. Some things to think about: • Do you need to keep track of your sales cycle with each client?


Economics 101 • If you sell products, do you need a system for keeping track of your inventory? • Do you need an online shopping cart? • Do you want to be able to invoice your clients directly from your CRM tool?

5.Your Team How many people are in your team? Is it just you, do you have just a few people, or is there a big team? Size does matter when looking for the right system. • When working with a team you want to keep track of who is working on what. • Do you need a social network site for your team (something that works like Twitter and Facebook, but privately for your team)? • If there are more people on your team, are you all using the same operating system? [Hint: consider using a cloud-based system so this will not be an issue] • Consider looking into a time-tracking system, even if it is just you. • Where does everyone work? At the office, from home, or are they mostly on the road?

IMPORTANT TO CHECK OUT

Now that you know a little bit about what you need, ask yourself the following questions about the system you are looking at: •A  ccessibility: With today’s technology consider looking into a cloud solution. You will have access to your important information no matter where you are. All you need is a computer, iPad, iPhone or any other smart phone. •S  ecurity and Backup: Is your information secure and is there continuous backup? These are obviously very important things to look into. •P  ricing: Know your budget and remember more expensive does not necessarily mean better (for you). •E  xport strategy: If you do decide to leave you want to be able to easily take your information with you. • User friendly: Is it easy to use and is there a good support system? • Reviews: Do you like what you are reading? • Customizable: Are you able to change things like your dashboard, fields, reports, etc.? • Integration: Does it play well with other systems like e-mail, calendar, scanners, invoicing, online forms, etc? •S  ocial Media: Some CRM systems let you sync your contacts with social media sites, so you will always have the latest news and information.

If you can envision it, chances are we have it. Moulding & Millwork is committed to being Canada’s premier manufacturer and distributor of quality doors and mouldings. With 37 distribution centers and 8 strategically located mills across North America, we’re focused on providing innovative products in the styles and designs that create spectacular results for our customers. Whatever design aesthetic or budget you’re working with, we have the product to match.

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THE BEAUTY IS IN THE DETAILS.

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Online Marketing

The Demise Of The Yellow Pages Internet savvy, mobile consumers are seeking more information than just where you are. Be sure to provide it. BY JOSH KERBEL

If you need a powerful signal to remind you of the change the Internet has brought to marketing your business, consider this little tidbit, Yellow Media Inc., the parent company of the Yellow Pages, now trades at about four cents a share on the Toronto Stock Exchange. This is down over 99% from November 2010 when the stock hovered at just over $6 a share. Yes, the venerable Yellow Pages, once the pinnacle of local business marketing, has joined the horse and buggy, rotary phone and typewriter as a relic of the past. While the phone book used to be the cornerstone of success for many local businesses, the Internet is now the undisputed champ of bringing in business for many companies.

Why Did It Happen? Users have shifted from “information searching” behavior, associated with “finding” a particular listing, to combining searching with social input from peers to best determine where to buy which products and services. Local search, search terms that include specific geographic terms such as streets, cities, neighbourhoods and towns, transform buyers search habits from looking for “where to buy” (location information for businesses for which they already know the name) into shoppers seeking “what to buy,” in order to select a business they did not know prior to their search. On top of this major change, layer on the

exploding growth of mobile technology and the modern consumer has rung the death knell for the Yellow Pages. Business will never be the same.

Capitalize on the Change With change comes uncertainty and with uncertainty comes opportunity. Here are some steps locally-orientated businesses can take to capitalize on the transition from a phone book driven search to a hyperlocal social Internet search.

1. Make your Website local-friendly and make sure it is optimized for mobile: The early adopter consumers that are heavy mobile device users are also the most enthusiastic about local search. These are the Tweeter, Pinners and Facebookers that either drive local trends, or follow them closely. Many companies fail to take this into account when creating their Websites and simply attempt to either translate their site to be mobile-accessible or create a strippeddown version of their content for mobile. Always think local with mobile sites. Think of all those people walking around staring at their phones. They are obviously looking at something, why not increase that chances they are looking at your site. Think about the specific content for mobile that answers a customer’s need for immediacy and action. For example, consider the search a tourist in your city would make and how you could respond to their need. You

Josh Kerbel is Managing Director of Sales Funnel, a digital marketing agency that specializes in lead generation and prospect management systems. To get a copy of the free white paper, 8 Steps to Internet Marketing Success, please send an email to report.ca@thejoshkerbelproject.com.

will have a head start on your competition if you at least attempt to provide them with some local knowledge.

2. Remember people are social: Loyalty programs are a popular way to provide discounts to consumers, but the problem is that consumers start to expect discounted prices and this will water down your brand value. A better solution is to capitalize on people’s social nature; offering your customers special rewards for sharing your brand on social networking sites or signing up new customers.

3. People are still individuals: Just because five people are all in the same place does not mean they all have same intentions. Learn how to segment your customer base with proper use of analytics and figure out the characteristics of customers in different phases of the buying cycle. Look through the lenses of location history, past locations, demographics, peak usage time, time spent, mode of travel and other data gathered over time to help build different user personas that can be used to laser target new offers.

4. Different Locations, Different Needs: Even with a Web site, you can always go local by creating different content and deals based on location. Chances are the home renovation prospect in Toronto is going to have different needs than their counterpart in Yellowknife. Be sure to change content and deals by location in order to maximize conversion rates. A simple rule of thumb to remember is that the more personal an offer is to a particular individual, the more likely they are to convert into a buyer.

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Learning Curve

Creating Digital Gains A new book examines marketing potential on the Web, while a new I-Pad application caters to construction professionals.

RETURN ON INFLUENCE MCGRAW HILL Online social networking is changing the name of the marketing game, but how does a small business actually know it is reaching any of Facebook or Twitter’s hundreds of millions of active users with their messages? Return on Influence from McGraw Hill attempts to answer that spellbinding question. The book, by marketing consultant Mark Schaefer, explores how brands are identifying and taking advantage of bloggers, tweeters and YouTube to build product awareness, create buzz and ultimately improve sales. The book shows readers how to use the latest breakthroughs in social networking and influence marketing to achieve their goals by way of in-depth explanations of the sources of online influence and how they can work for or against a business.

IT CONTAINS: • Interviews with more than 50 experts and industry thought leaders • An insider’s look at the controversial social scoring company Klout and its process for assigning influence numbers to everyone • Practical, actionable tips to increase personal power and online influence • More than a dozen original social influence marketing case studies It is also written in a manner so that organizations that are already using social media to maintain an online presence and newcomers alike have an action-ready guide. Return on Influence teaches readers how to win fans and influence people in the digital age. Author Schaefer, director of Schaefer Marketing Solutions and an adjunct professor of marketing at Rutgers University, has 28 years of global sales and marketing experience with advanced degrees in business and applied behavioural science.

MOBILE APP CENGAGE LEARNING Delmar, part of Cengage Learning, and DeWalt recently launched the DeWalt Mobile Pro application for construction professionals. Available as a free download the app provides numerous features, convenient for everyday use on the job and includes a construction calculator for solving complex jobsite math in the field, and five basic calculations with integrated reference materials to offer help, examples and illustrations. It also provides an additional running history of recent calculations, a customizable list of favourite calculations for quick and easy access to those used most often, and the ability to instantly e-mail calculation results. It is designed with trade-specific calculations and formulas, to

ensure it will be beneficial to all construction professionals. Plans call for low-priced upgrades to be available that will add hundreds of additional calculations and reference materials in the areas of business and finance, conversations and math, site work, finish work, concrete and masonry, carpentry, electrical, and plumbing. The mobile application for iPhone, iPod touch and iPad, has custom interfaces to suit the appropriate size of screen, and can be customized to focus on the contractor’s specific trade. Further information is available at www.dewalt.cengage.com. Return On Influence is currently available from www.amazon.ca and www.chapters.indigo.ca. CONTRACTOR ADVANTAGE

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Feature

Deduction

Detai The taxman will certainly expect his share, but understanding what constitutes a legitimate deduction can leave more money in your pocket. BY JOHN G. SMITH

S

ay it with us: “The only sure things in life are death and taxes.� It is a certainty that will be familiar to every entrepreneur from general contractors to plumbers and electricians. While taxes are a reality, they are offset by deductions in the form of legitimate business expenses identified by the Canada Revenue Agency. Consider exploring these expenses with your accountant:

The GST/HST paid during substantial renovations The Goods and Services Tax (GST) or Harmonized Sales Tax (HST) does not generally apply to the sale of a previously occupied home, but a builder who guts the interior and resells the home will have to charge the applicable sales tax. The GST or HST applies to the sale of substantially renovated houses, buildings converted from commercial to residential use, or houses with a major addition. Substantial renovations like these involve renovating or altering at least 90% of the building other than the foundation, external walls, interior supporting walls, floors, roof or staircases. Major additions, meanwhile, involve work that essentially creates a new house or condo. It means that those registered to collect and pay GST or HST can claim input tax credits on goods or services used during these renovations.

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ADVERTISING It is difficult to find new business if nobody knows who you are, so it is pretty obvious that advertising would be a legitimate business expense. Contractors can deduct the cost of ads in Canadian newspapers and on Canadian television and radio stations. The deductions that relate to advertising in a magazine face some restrictions. The business can deduct 100% of this expense if the advertising is directed to the Canadian market, and 80% or more of the editorial content is original. If less than 80% of the magazine’s editorial content is original, the business can only deduct 50% of the ad’s cost.

ALLOWANCE ON CAPITAL PROPERTY There is value in property that does not physically exist, as long as it provides a lasting economic benefit to the business. Examples of eligible capital expenditures of this sort include goodwill, franchises, concessions or licences with an unlimited period. While the full amount of a capital cost cannot be deducted in a single tax year, a business can deduct a portion of the fees, in the form of an annual allowance.

BAD DEBTS Poor customers complain about their bills. The worst customers default on their bills. Accountants can write off a contractor’s receivables as a bad debt if these bills were already recorded as income.

FEES,LICENCES, DUES MEMBERSHIPS & SUBSCRIPTIONS Canadian businesses can deduct the annual dues or fees to maintain membership in a trade or commercial association, offsetting the costs of valuable networking and learning opportunities. There are just some limits to consider. 24 |

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This type of deduction does not apply to membership dues or initiation fees for a club whose main purpose is dining, recreation or sports.

HOME OFFICE For many small businesses, the head office is just down the hall from the bedroom or kitchen. The expenses associated with a home office can be deducted if the space is a principal place of business; or, if the space is only used to earn business income, and used to meet with clients or customers on a regular basis. The share of a household’s expenses that can be applied to this home office can be calculated by dividing the size of the dedicated work space by the overall square footage of the home. If part of the home is used for both business and personal space, the number of hours that it is used for business should be divided by 24, and then multiplied by the share of expenses that apply to the home’s business area. A similar calculation is used if the business operates in the space for only part of the week or year. Maintenance costs offer a good example of related deductions. These include heating, home insurance, electricity and even cleaning materials. Other deductions can include a share of the property taxes and mortgage interest. Of course, there are limits. Expenses for a home office have to be lower than the company’s net income before these expenses are deducted. “In other words,” the CRA says on its Web site, “you cannot use these expenses to increase or create a business loss.”

MAINTENANCE, REPAIRS & FUEL Businesses can deduct the gasoline, diesel, propane, motor oil or lubricants used to operate equipment. The fuel used to heat a home; however, needs to be included in the calculations for the home office. The cost of labour and materials for minor repairs or maintenance completed on an income property can also be deducted. This does not include the value of the tax-filing contractor’s own labour, or capital costs that

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should be claimed under the Capital Cost Allowance. The maintenance and repairs in a home’s workspace will need to be claimed as a “business use of home” expense. Deductible business expenses also include anything used indirectly to provide goods or services, such as the cleaning supplies used by a plumber.

INSURANCE Commercial insurance premiums paid to cover buildings, machinery and equipment can be deducted when used to protect the business. Insurance costs for motor vehicles or a home, though, need to be included in the related calculations for motor vehicles and the business use of a home. Only a portion of the latter costs will apply to the business. One key exception comes in the form of life insurance premiums, which cannot usually be deducted.

MEALS AND ENTERTAINMENT Businesses can claim food, beverage and entertainment expenses, but the deductions are limited to 50% of the incurred costs or an amount that is seen to be reasonable in the circumstances, whichever is less. The limit will not apply if the client or customer is billed for the meal and the costs are shown on the bill, or during a Christmas party or similar event when every employee from a particular location is invited.

TRAVEL A key tool to track business-related travel during the year comes in the form of an accurate logbook, including each business trip, the destination, the reason for the trip and distance covered. There should also be a record of the total kilometres covered, and those used to earn business income. The odometer reading is recorded at the start and end of the fiscal period. If the vehicle is changed during that fiscal period, meanwhile, the date of the change and odometer readings should be recorded at the time of the buy, sell or trade.


Those who have kept a full annual logbook for at least one year since 2009 can even switch to using a three-month logbook, which can then be used to calculate business travel for the full year. The annual results simply need to be within 10% of the amount of travel recorded in the year that the annual logbook was kept.

income, and the salary needs to be reasonable considering the child’s age and what someone else would be paid to do the job. Records are also required. If paid in cash, the child will need to sign a receipt. Meanwhile, there is no opportunity to claim the value of board and lodging provided to a dependent child, spouse or common-law partner.

EMPLOYEE COSTS Employers can deduct their share of an employee’s CPP or QPP contributions, Employment Insurance premiums, provincial parental insurance plan premiums, and Workers’ Compensation amounts. They can also deduct premiums paid for sickness, accident, disability or income insurance plans. Contractors can even deduct the salary paid to a child or spouse, but there are restrictions. They need to pay the salary, the work has to be necessary for earning business or professional

LEASED OFFICE EQUIPMENT A business can lease computers, cell phones or other equipment, and deduct the percentage of the lease costs that relate to earning business income. The deductions also include the airtime for the cell phone that reasonably relates to earning business income. Any purchased equipment will need to be deducted as a Capital Cost Allowance, and the

interest paid on money borrowed to buy the equipment that relates to business income.

PROFESSIONAL MANAGEMENT & ADMINISTRATION FEES They are all considerations that can benefit from a professional accountant’s advice. The cost of that advice represents a deductible expense of its own. Acceptable deductions include fees paid for professional advice or services, the legal fees to keep records and, yes, the accounting fees used to prepare and file income tax and GST/HST returns. There are some exceptions. For example, the legal fees used to buy a capital property cannot be deducted, but will instead need to be added to the cost of the property. For complete information on these potential deductions, visit www.cra-arc.gc.ca.

In the next issue of

Contractor Advantage •F  ireplaces & Woodstoves • Flooring Trends •G  reen Basement Renovations • Interior Doors •W  ood Moulding Design • Marketing Tools

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Feature

Here comes the

sun

Contractors who stay on top of the alternative-energy curve have a powerful selling tool in their arsenal. BY PAUL WELCH

M

arket experts offer up a dark and gloomy forecast for the consumer: in the long term, energy costs will continue to rise. Utility fees are being influenced upward in Ontario, for example, in part because of the growing reliance on nuclear power; some market analysts foresee a barrel of oil topping the $200 mark within two years. Ultimately, it is the consumer who must pay. Still, they may not be alone. Contractors who stay on top of the alternative-energy curve have a powerful selling tool with which to attract the growing number of customers who want some relief from those rising energy costs. Conversely, contractors who do not actively pursue new initiatives to help potential customers soften the energy blow run the risk of falling by the wayside in an already-competitive industry. Jim Harris, an author and speaker on corporate and environmental structures, and who has made a study of the economic benefits of instituting green initiatives into construction projects, recommends that contractors become wise in the ways of energy-efficient add-ons to ensure they can offer customers a full suite of options. He is big on the use of solar energy, and suggests contractors become wise to its benefits as well. He acknowledges that, for contractors, introduc-

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ing the solar option to their inventory will mean an initial increase in their overhead. For one, they need to bear the costs of having staff learn and understand the installation and operation of the solar panels that capture the sun’s rays and convert them to energy. This in effect introduces a new level of education to trades such as electricians and plumbers who are to install the systems. Even if the project requires building a structure where the client will assume responsibility, installing solar panels after construction, contractors must be up to speed on the initial requirements that must be built in during the construction phase: modifications that would be required for specialized wiring, for example, or refinements to the load-bearing capabilities, insulation and shingling requirements for the roof area to allow it to accommodate installation of panels.

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Contractors, Harris notes, should not find themselves in a position of having to learn these as they go. “The theory is: you do not dig a well only when you really need water,” he says Chris Chopik of the Ontario Sustainable Energy Association (OSEA) notes contractors do not have to burden themselves with the expense of training their entire business in the ways of solar energy, but it is wise to have some on hand. “You do not need everybody on the staff to be able to construct solar energy-ready structures, but you do need some who can walk the walk,” he notes. The benefits of making the investment, Chopik says, will be obvious. “Selling solarready is becoming increasingly popular with builders and potential clients,” he says. “It is not overly costly to learn solar installation techniques, but conversely, if you cannot speak the language, you risk losing potential customers.” Solar power for the pool proved to be an immediate plus for Midland, Ont., resident Bob Valentine, who is pictured on p. 26. He spent less than $1,000 on the panels and piping he uses to heat the above-ground, 24’ diameter, 4’ deep pool he and wife Donna and son Brian enjoy each summer or, in the case of this unnaturally mild winter and spring, even earlier. “It is good to go now,” Valentine said on the Victoria Day weekend (significantly earlier than normal, due to the efficiency of the solar heat aided by the sunny spring), letting the family start summer early. The best part of the solar heat approach, Valentine notes, is its cost or lack thereof. “I never have to put any money in to it after the initial outlay,” he says. No running natural gas line to the pool or any other source that would be expensive. “I am very happy with it.” That, of course, is a significant benefit of offering a solar energy-ready structure. By adding a layer of energy source, particularly a free one, its owner will have less reliance on conventional energy sources, thus lowering the energy bills. This is proving to be a growing attraction for consumers, Harris notes. “For consumers looking at rising energy costs, failing to put a focus on energy efficiency is a financial risk to your household or business.” There are government incentive programs available to encourage consumers to consider the expense of financing alternative-energy sources, which helps defray the

initial outlay. Details are available from a variety of sources including www.saveonenergy.ca, www.bizenergy.ca, www.nrcan.gc.ca and www.evolvegreen.ca. There is a second incentive that is also proving attractive to consumers in Ontario, for example: incentives such as the Ontario Power Authority’s Feed-In Tariff (FIT) program, under which consumers who have solar panels in their structures can actually

sell power back to the Ontario grid. Harris says that, while installation of solar panels is not cheap, it is easily offset. For example, a typical high-efficient panel system can cost about $70,000 to install. But based on the kilowatt-per-hour payment level paid under FIT, consumers can recoup about $7,000 per year in sales, meaning the system has paid for itself and becomes a revenue generator for its owner after 10 years.

THE SCIENCE:

HOW SOLAR PANELS WORK:

A solar panel applies the same principal as a generator, but the difference lies in the composition of the internal mechanism of generation. A generator uses a motor, while a solar panel uses the chemical composition of the minerals used to construct the unit that, when exposed to sunlight, converts the light energy into electric energy. A photo voltaic cell is made of silicon elements. The silicon chip is light-dependent and, when exposed to sunlight, generates an electric current, this converts solar energy to electric energy. A solar panel is a collection of solar cells that work together to supply electricity. The solar panels are usually designed so that the cells face the sun at all times to maximize the benefit of the light available. Solar panels have a variety of applications and benefits. Among those, three that are growing in popularity are used to store electrical energy for a structure, creating a form of energy reservoir, and for heating a building’s water units and the family swimming pool.

STORING ELECTRICITY: Solar panels generate electricity in many conditions, from cloudy skies to full sunlight, in all seasons of the year. For the system to provide electricity after sunset, the energy must be stored during the day for later use. The usual storage device is a rechargeable battery. The batteries used with solar arrays must be capable of discharging and recharging repeatedly. They contain special parts and chemicals not found in disposable batteries. They are also usually larger and more expensive than their disposable cousins. The system requires some form of electronic charge controller. The main job of the charge controller is to feed electricity from the solar panel to the battery efficiently, and to prevent the solar panel from overcharging the battery. The charge controller also protects the solar panels from electrical damage.

HEATING WATER: Canadian manufacturers have developed some of the world’s most cost-effective solar water heating systems, which provide a clean alternative to gas, electric, oil or propane water heaters. Domestically-manufactured freeze-protected solar water heaters are designed to handle a typical Canadian year where temperatures range from well below freezing to extremely hot. A standard solar water heater generally consists of three main components: a solar collector, which converts solar radiation into useable heat; a heat exchanger/pump module, which transfers the heat from the solar collector to the water; and, a storage tank to store the solar-heated water. The most common types of solar collectors used in solar water heaters are flat-plate and evacuated tube collectors. In both cases, one or more collectors are mounted on a southerly-facing slope or roof and connected to a storage tank. When there is enough sunlight, a heat transfer fluid, such as water or glycol, is pumped through the collector. As the fluid passes through the collector, it is heated by the sun. The heated fluid is then circulated to a heat exchanger, which transfers the energy into the water tank. When the homeowner uses hot water, cold water from the main water supply enters the bottom of the storage tank. Solar-heated water at the top of the storage tank flows into a conventional water heater and then to the taps. If the water at the top of the solar storage tank is hot enough, no further heating is necessary. If the solar heated water is merely warm, the conventional water heater brings the water up to the desired temperature.

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Feature

SOLAR ENERGY TIMELINE 400 B.C.: Greeks are the first to orient their

houses to make use of the sun to trap solar heat during winter. 1767: Swiss scientist Horace de Saussure builds the world’s first solar collector. 1860s: French mathematician August Mouchet constructs the first solar-power engines, using an early type of solar dish collector. 1890: French scientist Henry Becquerel observes the photovoltaic effect — the production of electricity directly from the sun — while experimenting with an electrolytic cell made up of two metal electrodes placed in an electricity-conducting solution. 1891: American inventor Clarence Kemp patents the first solar water heater. 1950s: In Albuquerque, New Mexico, U.S. Architect Frank Bridgers designs the world’s first commercial office building to use solar water heating systems as its primary source for interior heat. 1954: Inventors at Bell Labs in the United States develop the first photovoltaic cell capable of gen-

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erating enough power from the sun to run electrical equipment. 1958: Solar PV cells are being used in small-scale scientific and commercial applications. 1960s: Solar PV cells are first used to power orbiting satellites in the U.S. space program. 1970s: The oil crisis of the 1970s sees the beginning of major interest in using solar power from PV cells. Industry developments and research make solar PV cells feasible for powering remote applications, including telecommunications.  By the end of the 1970s, there are more than 100 solar manufacturers and equipment suppliers in the United States. 1980s: A 354-megawatt solar power plant is built in California’s Mojave Desert. The plant uses a trough system to concentrate solar energy to produce the steam needed to run a conventional power generator. 1990s: As public concerns about environmental issues such as air pollution and climate change grow,

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governments in Canada and elsewhere take a greater interest in using renewable energy as a way to decrease greenhouse gases and other emissions.  Japan launches a program to subsidize the cost of PV cell installations for individuals. PV systems are installed in thousands of homes. 2004: Global production of solar PV cells reaches 1,256 megawatts. This is a 67% increase over the 750 megawatts installed in 2003. 2005: World solar PV power capacity reaches 5,358 megawatts, an increase of 281% over 2000. Canadian capacity is 16.75 megawatts, an increase of 134% Off grid capacity is 93% of total capacity. 2009 First Light Solar Park in Napanee, Ontario goes on-line in October, becoming Canada’s first solar PV power station. The facility’s capacity is 19.1 megawatts. In December the Sarnia Solar Project goes online with 20 megawatts capacity. 2010 World solar PV power capacity reaches 40,030 megawatts. Canadi-


Sources of Solar Energy Information: The Internet is chock full of information sources on solar energy. Anyone interested in obtaining more information on solar energy use and issues in Canada, should access the following sites: •C  anada Mortgage and Housing Corp.:

www.cmhc-schl.gc.ca (type “solar” into the search for a list of page and PDFs on the subject.)

• Canadian Centre for Energy: www.centreforenergy.com/AboutEnergy/Solar/ • Canadian Solar Industries Association (CanSIA): www.cansia.ca • Natural Resources Canada renewable energy: http://canmetenergy.nrcan.gc.ca/renewables/2449 • Solar and Sustainable Energy Society of Canada (SESCI): http://sesci.ca/”http://sesci.ca/ • Solar Ready Guidelines, at Natural Resources Canada: http://canmetenergy.nrcan.gc.ca/buildings-communities/housing/ publications/3084

Mapped for Power

PHOTO: THINKSTOCK IMAGES

Different areas get different degrees of sunlight. As such, Canadian Forest Service and the CanmetENERGY Photovoltaic systems group have estimated and mapped out the expected electricity that can be generated by grid-connected photovoltaic arrays without batteries for any location in Canada. Source: Natural Resources Canada an capacity is 291.13 megawatts, of which 20 per cent is off-grid, and 80 per cent on-grid. 2010 is the first year in which ongrid capacity is greater than off-grid.  The Sarnia Solar Project is expanded to 80 megawatts capacity, becoming the largest solar park in the world. By the end of 2010 there are seven operating solar parks in Canada, all in southern Ontario, with total combined capacity of 147.5 megawatts.  Global production of solar PV cells reaches 24,000 megawatts. 2011 Solar thermal capacity in Canada exceeds 1,000 megawatts for the first time.   A new solar park is completed in Sault Ste. Marie, Ontario bringing the total capacity of solar parks in Canada to more than 200 megawatts.  By the end of 2011, there are 56 solar PV power plants rated at more than 25 megawatts in the world. Total capacity is 2,950 megawatts.  By the end of 2011, there are 36 concentrating solar power plants in the world with a total combined capacity of 1,703 megawatts. Source: Canadian Centre for Energy www.centreforenergy.com

The map above presents an annual average of photovoltaic potential, with a south-facing PV panels with latitude tilt. For an interactive map by month, panel orientation, or to search for mapped information by municipality visit Natural Resources Canada at http://pv.nrcan.gc.ca/index.php

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Feature

Kitchen fixing New products from cabinetmakers and other firms help contractors make the most of kitchen projects. BY STEFAN DUBOWSKI

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PHOTO: CANARM

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n a survey last year, the Bank of Montreal found that the majority of homeowners planning on renovating will focus their efforts on the inside of the home. According to the financial institution, the kitchen accounts for the bulk of the money that homeowners are willing to spend. Nearly half (48%) of the respondents to a BMO survey said they plan to renovate their kitchens. The bank points to the Appraisal Institute of Canada, which states that kitchen renovations result in a return on investment of 75 to 100%. Kitchen renovations may be among the most lucrative projects in the contracting sector, but they can also be the most challenging. After all, the kitchen is often considered to be the heart of the home, so customers usually have exceedingly high expectations for the renovation. The kitchen must perform on numerous levels; not only in terms of food preparation and storage, but also in energy efficiency, durability and style. Companies including cabinetmakers, plumbing suppliers and lighting providers are stepping up their games with new products designed to make the kitchen as stylish, efficient and useful as possible for the long term.

PHOTO: CANARM

THE FRAMELESS TREND Eastland Industries Ltd., a kitchen cabinetry company in Minto, N.B., recently expanded its product selection to include frameless cabinets. This European style affords a clean, modern look that many homeowners want in their kitchen renovations. That is why Eastland decided to begin offering frameless cabinets, says Eric DiCarlo, the company’s vice-president and general manager. “We did have some requests for frameless, so we decided to expand and offer that also.” Frameless cabinets feature doors that are situated quite close together, giving them a modern appeal. Lacking the frame that accompanies more traditional cabinets, the frameless construction also provides a larger opening, making better use of space compared with framed construction; however, they are not considered as strong as framed cabinets, since they do not have the frame for reinforcement. DiCarlo says some installers prefer to work with frameless because it is easier to install, but others prefer framed because, for their money, framed is easier to install. It comes down to a matter of preference, which, for most contractors, has a lot to do with the homeowner’s perspective. Eastland has also seen a trend towards dark stains. “I think it gives a richer, more expensive look to the kitchen, and the appearance of a more substantial product,” DiCarlo says. “We came up with two new dark stains: one called cognac, and one called choco-

late. They are our best sellers now.” Eastland’s portfolio includes budgetminded products such as the Atlantic line, offered in birch or oak with recessed panel doors. The company’s Shaker-style cabinets represent the upper end of the price spectrum. “The door itself usually dictates the price difference,” DiCarlo says. “The Shaker door has a thicker panel with some intricate beading applications put into it.” Add the cognac stain and soft-close hinges and doors to the project and your customer’s cabinetry may really wow the neighbours. Asked about trends in kitchen appliances, DiCarlo notes that fridges are wider and less deep than they used to be. “The standard kitchen cabinet is 24” deep, and a lot of refrigerators used to be 32” deep, so the refrigerator would stick out past the kitchen cabinets. Now, a lot of the newer fridges are only 24” deep to give a nice streamlined look. They tend to be taller and wider to make up for the space they give up on the depth.”

LIGHTING THE WAY Of course, the beauty of the cabinetry and the appliances could be diminished if the

kitchen features the wrong kind of lighting. Illumination should be designed such that work surfaces are well lit, and such that the homeowner does not need to take out another mortgage to pay for the electricity required to power the lights. Jim Cooper, president of lighting company Canarm Ltd., is unequivocal about the kind of lighting that kitchens require. “In 100% of kitchens you could use undercabinet lighting,” he says. “You always get shadows from the upper cabinets onto the countertop surface.” Fluorescent and halogen bulbs are not the only options anymore. “Now, LEDs are playing a prominent role in under-cabinet,” Cooper says, noting that halogens have a particular drawback in that they generate a lot of heat. “You could double-bake your bread in the cupboard, they were so hot.” LED tape is the latest innovation. This is a thin (2 to 3 mm) strip with LED bulbs situated three to four inches apart. The product has has tape on the back. To install, you simply peel off the backing and stick it to the cabinet. Every six inches or so is a cutline, where you can cut the tape, attach a corner piece, and send the strip off in a different direction.

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“It could even be used up above the cupboards to give you a glow on the ceiling,” Cooper says. “You could use it under the kick plates near the floor. It’s so thin, there are a lot of applications.” LEDs work well for overhead lighting, he says, but he adds that they are nearly five times more expensive than fluorescents at this point. While LED bulb manufacturers claim that their products will last up to 20 years, the product is still too new to the market for anyone to say if that is really the case. Fluorescents may be the less-expensive alternative, but it is essential for contractors and homeowners to understand the range of options that fluorescents provide. Many people do not appreciate the importance of colouration and brightness, Cooper says. He explains that colouration, marked in Kelvin (“K”), indicates the warmth of the light that the bulb produces. A bulb with a 2700 K rating produces a warm, yellow light akin to an incandescent bulb. “I have seen up to 5500 K,” Cooper says. “That is as white as white gets.” Brightness used to be measured by watts, but these days it makes more sense to pay attention to the lumen rating. A 60 W incandescent, a 13 W fluorescent, and a 6 W LED all provide 750 lumens. “That is how I know how much light I get,” Cooper says. The bulbs should all have the same colouration and brightness, or the lighting could seem uneven. Back to LEDs, Cooper points to one significant advantage. “They are fully dimmable,” he says, explaining that while fluorescents are also dimmable, “they are inconsistent. It gets down to the gas in the bulbs. If one has a little more than the other, it is going to be a little more dimmable, so you are going to get inconsistencies when you have all of the lights together. The LEDs dim beautifully, just like the old incandescent bulbs.”

cording to John Pearce, Novanni’s senior vicepresident of sales and marketing. He says under-mounts, particularly when used with solid-surface counters, need to be handled carefully. “The best advice I could give anybody is that it is not a do-it-yourself product. You should work with a fabricator. They have to cut the correct hole for the sink. You do not want to be playing around with that.” Novanni recently became the exclusive distributor for Schock GmbH, the German company that makes granite sinks. “It is the smoothest granite that is available currently, and in addition it is antimicrobial,” Pearce says. As you might imagine, granite sinks are quite a lot heavier than stainless steel sinks. A granite double-bowl sink weighs about 40 lbs., Pearce says. Still, “they are a lot harder wearing than stainless steel. They scratch less easily and they are very stain resistant.” Colour can be a challenge. “You have to be careful how you match it up,” Pearce says. “There is an old adage in design: Hit it, miss it, but do not graze it.” In other words, if the

counter is grey, do not install a grey sink unless you are sure the colour of the counter and the colour of the sink match precisely. If they are slightly different the design will not look as good as it could. “You are best to make the sink complementary to the countertop colour,” Pearce says. Novanni offers the Perfect Drain system from Elkay Sales Inc. It is “kind of like an under-mount drain,” Pearce says. “It is a very clean look.” Unlike traditional drains, Perfect Drain does not have a ring around the basket strainer. Without that ring, there is no gap between the drain and the sink, so it is easier to clean and maintain. It also expands the usable work space on the sink floor. With new options for sinks, cabinetry and lighting, contractors have plenty of different products to discuss with homeowners. While this may well make kitchen renovations more challenging, it may also give builders the opportunity to really showcase their knowledge and capabilities with prospective clients.

PHOTO: NOVANNI

UP MARKET DOWN THE DRAIN With the lighting squared away, contractors need to ensure that the kitchen’s plumbing performs as well as possible. Novanni, the only Canadian-owned sink manufacturer, has been offering under-mount sinks for many years; however, the company has noticed more interest in them in the past five years or so. It has plenty to do with the fact that solidsurface counters such as granite are less expensive than they used to be. Homeowners want the sleek appearance of an under-mount sink to accompany their high-end work surfaces, ac-

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eauty can be skin deep, and that is not always a bad thing. Look no further than the cladding that can transform a building’s appearance. Contractors and their customers can work with siding made of everything from wood to steel, vinyl, aluminum, fibreboard cement and stone veneers. Advances in coatings and materials alike have created colours and textures that will last for decades, complete with warranties to back the claims. Ultimately, most product choices tend to be swayed by a combination of design trends and budgets, says Sean McCormick, product manager for siding at Nicholson and Cates, a wholesale distributor. Vinyl siding tends to offer the lowest cost, followed by fibre cement, wood and masonry products. There can also be differences to consider within the same product categories. Wood siding offers a perfect example of that. Products made of lodge pole pine from Western Canada may be available in longer lengths than valuepriced alternatives. There are also options in the form of different patterns, profiles and shapes to deliver the desired appearance. “You want to remove a large percentage of the knots because they can be problematic for long-term performance and aesthetic appeal,” McCormick observes.

The differences can affect more than appearance alone. Aside from creating a seamless look, longer panels can support quicker installation times. The performance considerations do not end there. Those who are attaching siding to a structure in a remote area, far away from the nearest fire hall, may want to consider cement-based products that carry a superior fire rating, McCormick suggests. Other benefits will come in the form of added protection from pests, termites, or impacts.

When it comes to vinyl siding, the material’s gauge will make the biggest difference in durability. A premium product that is up to .055” thick will stand up to strong winds better than a value-priced product that is .040” thick. It will even offer more protection against the denting power of a hail storm. Vinyl siding has improved “immensely” over earlier generations of the products, adds Ted Talboom, Gentek Building Products’ national manager of retail sales. Colours remain vibrant, and the siding is more stable in cold

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PHOTOS: GENTEK

temperatures than ever before. Some of the products even come with insulated backers that improve R values, make the siding more rigid, and deaden unwanted noise. When it comes to commercial buildings, though, few options match the sheer strength of steel siding. Even that has evolved, with new families of products that have a wider range of profiles, and PVC coatings that offer a more durable finish. Fusion Stone, once seen as a do-it-yourself product, is making its own mark among professional installers, McCormick says, referring to the stone veneer that can be installed with traditional framing and clips, and without any excavating. It is the type of work that can be performed by any renovator or contractor, without the dedicated skills of a mason. The joints in small projects can even be filled with caulk. All these siding options are designed to create a perfect picture, and like any other picture it deserves a proper frame. Trim made of PVC can be a great option in harsh settings like a roof line, porch, deck or patio where water might tend to collect. It can even touch the ground without any worry about wicking moisture. “It is very dimensionally stable,” McCormick says. As unique as the individual siding materials can be, many projects combine several of the different options. “In a lot of cases, the stone and siding products will be used in conjunction with each other,” McCormick explains, offering one example of a 3’ stone skirt around the base of a home, with a wall of siding above that. “That is where the homeowners and the designers bring in the colour.” The preferred colour choices appear to vary from one region to the next. Ontario buyers, for example, have traditionally leaned toward products in earth tones, but even these customers are more likely than ever to order rich greens and bright reds that have been more popular in Canada’s coastal areas. Material choices will also influence the amount of waste that needs to be included in any order. Wood siding is shipped in random lengths, so installers will typically

need to account for 10-12% waste. Those working with fiber cement will waste half that amount since the manufactured panels come in consistent lengths, are finished on the front and back, and can be flipped upside down. Barely 1% of a supply of Fusion Stone will be wasted because the blocks come in a variety of sizes. The building’s design will play its own role in these calculations. Talboom, for example, suggests adding 1’ to the height of a wall to account for cutting and fitting around dormers and gables. Those who install vertical siding will want to order 20% more material to account for waste, he adds. Of course, choosing the material is only

the first step. Installers need to consider the different techniques and tools that apply to their specific siding choices. The installation procedures for vinyl, steel and aluminum siding are quite similar, Talboom says. Some options are just going to be more forgiving than others. Vinyl siding, for example, will bend in place, and is less likely than aluminum siding to be scratched or dented during installation. “Be sure to follow the manufacturer’s recommendation for fasteners to avoid rust and corrosion that could happen with metal sidings,” he adds. The nails, staples or screws used to attach vinyl siding should be made of aluminum or galvanized steel. Fastener heads should be

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PHOTO: GENTEK

5/16” wide, and shanks should be at least 1/8” wide, while any choice should also be at least 1-1/2” long. The best screws come in the form of Number 8 fasteners with a truss or pan head, complete with a self-taping sheet metal tip. Another option is a 16 gauge staple that is 1” long and about 1/32” wide above and below the nailing hem, still allowing a piece of siding to move. Choosing the right size of fastener is only the beginning when working with vinyl, aluminum or steel siding. “All three products need to be hung on the wall, not nailed tight, especially in the case of vinyl siding. Contractors need to allow for expansion and contraction, otherwise you will get a buckling or waving effect,” Talboom says. “An installer must be able to slide the siding panel back and forth on the wall about ¼” in either direction.” Vinyl siding can actually expand and contract by as much as ½” along a 12’6” length, according to the Vinyl Siding Institute. It is why installation guidelines govern everything from the size of gaps between individual pieces

to the choice and location of different fasteners. There should usually be a ¼” gap at every opening, but installers working at temperatures below 5° C should leave a 3/8” space to allow for any expansion that will occur as the thermometer begins to rise. The movement is made possible by leaving about 1/32”, just the thickness of a dime, between the fastener’s head and panel. Every nail should also be straight, level, and in the centre of the nail slot. A hole slot punch can be used to enlarge a panel’s nail slot if an opening does not quite line up with the furring underneath the siding. The first fastener will also need to be applied at the centre of a siding panel, leaving the other fasteners to be added as installers work out toward the edges. Of course, there are exceptions to every rule. Those who are installing vertical siding or corner posts should place their first nail in the upper slot to hold everything in place, and space the other fasteners 12” apart. Cutting tools will also vary from one siding choice to the next. Most siding material can be cut with a

typical circular or table saw. The differences will be in the blades. Those working with fibre cement will likely want to use a polycrystalline diamond blade with four teeth rather than opting for a blade with 20 to 40 teeth. The slicing motion will reduce the amount of dust created during any cut. In contrast, a carbon-tipped blade delivers the ripping motion that will better slice through a piece of wood panel. Vinyl siding can be cut with a fine-toothed plywood blade that is installed backwards and run at a slow speed, although most cuts can also be made with a utility knife, simply scoring the face of the material and snapping the pieces apart. Finer cuts might be left to shears, such as the powered offerings that leave refined shapes in a piece of fiber cement. Guillotines can also be used to deliver dust-free cuts, while those who work with a masonry product like Fusion Stone will likely want to keep a wet saw close at hand. Armed with the right siding and a few tools like these, contractors can help any building put its best face forward.

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Feature

Foundations in a

snap

ICFs are increasing in popularity across the country, but experts say education around their benefits is still needed. BY DAVID CHILTON SAGGERS

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C

onstruction professionals like to throw around acronyms as much as any experts talking about their own industry. Some, such as HVAC and VOC, are well known, while others, including ICFs, are not. In fact, those who manufacture and use ICFs cannot even agree on what those three letters stand for. Called insulating concrete forms by some and insulated concrete forms by others, they are nevertheless the same thing: a more-thanniche, but not-yet-widely-used product that is gaining traction in residential and commercial building. ICFs are hollow blocks or panels made of expanded polystyrene that are stacked like building blocks to form the foundations and walls of a house or an institutional building,

typically a hotel or a student residence. Many use the example of ICFs being like the Lego blocks used by children, but that can be somewhat misleading since, once, snapped

together there is nothing more to do with the Lego pieces. Such stacking forms the interior and exterior of the insulated wall and installers lay steel in the cavity to reinforce the structure. Following the rebar, the ICF is filled with concrete formulated for that particular structure and which is vibrated. Corners of 45 and 90°, which are pre-made, and the use of an alignment system, ensure the walls are square and exceptionally strong once cured, as well as being non-deteriorating. Tests conducted by the Portland Cement Association have shown that concrete is up to 50% stronger in ICFs than concrete cured in traditional wood forms. ICFs were introduced in Europe, which given the energy-saving properties of the product and that continent’s notoriously high fuel bills, may have hastened their arrival. In energy-rich Canada, their introduction has been rather slower, but here and in the U.S. there are now more than 50 manufacturers of ICFs. The concrete core of most ICFs are in the 4” to 8” range, and come with a further 2” or so of expanded polystyrene insulation either side pushing ICF wall to a thickness of between 8” and 12”. Of course, interior and exterior finishing materials will add yet more thickness to the wall. “With regards to size, most standard sizes are 6”, 8”, 10”,” says Luis Prior, director of marketing for ARXX in Cobourg, Ont. “That is the basic bulk of the business, the 6” and 8” products.” As with any material, there have been refinements to ICFs over the years, with different cores being introduced. By far the most

PHOTO: LOGIX

Typical Logix ICF Wall Assembly

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“You get a real benefit with the energy savings. It is real; the energy savings are half,” says Andy Lennox, vice-president of marketing at Logix in Minden, Ont. “We have gone back and actually modeled; we have tested. We have got 15 houses in a testing program that we call our Green Day program where people have built their homes and have got them environmentally certified.” Logix took a year’s worth of customer energy bills and had a third-party consultant analyze what homeowners spent compared with what their model said they were going to spend. “In the vast majority of the cases they are saving even more than the modeling indicated,” Lennox noted. Ross Monsour, director of marketing for the Ready Mixed Concrete Association of Ontario in Ottawa, confirms that ICFs are robust energy savers. He says the RMCAO worked with the National Research Council and Canada Mortgage, and Natural Resources Canada to study the thermal mass effect of ICF walls. The study shows that the “buffering effect” of ICF walls meant

PHOTO: LOGIX, ARXX

popular design is the flat system, with the screen grid system far back in second place, and the waffle and post and beam systems trailing the leaders in the sector. Prior says ARXX has two product lines offered throughout Canada. ARXX Prime, Prior says “is what they call the pre-assembled system.” “That pre-assembled system comes with everything ready to go. You take your forms off your pallet and then you start setting them into place.” ARXX Edge, which is a knock-down form, has panels and connectors that come separately and contractors build the forms on site. That means more work, but, Prior says, the knockdown forms provide shipping efficiencies that may have an impact if the work is being done in a difficult or remote location. As well as the strength and ease of use of ICFs, there is also another major benefit, beyond such perhaps less important considerations as noise reduction, and that is energy economy. ICFs provide a much, much tighter building “envelope” that provides significant energy cost reductions, whether heating or cooling.

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PHOTO: LOGIX, ARXX

that temperatures did not fluctuate over a five-day period. Similarly, it found ICF walls mean builders can reduce the size of the necessary heating equipment by 25%. There are also two more pieces of the energy saving calculus to come: Prior says the expanded polystyrene used in ICFs has unlimited shelf life, and the cost of the energy used to produce it is repaid an astounding 200 times in energy saving. Further, says Prior, ICF houses are 32% cheaper to cool than those built using traditional methods. In summary, an 8” core ICF wall, with appropriate insulation, provides an R-22 rating, equivalent to a wooden wall assembly with an R-50 rating. Despite the demonstrable energy savings of ICF walls, it must be said that using them means an extra upfront cost of between 5% and 7%. Lennox says the price for the concrete and the rebar used on a $300,000 house might come to about $20,000. It could also be inferred that ICFs incur extra labour, training or other related costs, but that is not the case. “Builders have to come to grips with the fact that they are saving three trades with one block,” says Monsour. They do not have to bring in an insulator; they do not have to bring in a framer.” Even for those who do the work, the product can be a boon. “I know one mason that told me he had extended his career by 10 years by using ICFs,” says Lennox. As has been pointed out, ICFs are not a simple matter of fit then snap. Still, the technical skills necessary to use the product are well within the reach of the contractor or his employees. Lennox says there are subtleties to using ICFs, but if a contractor understands “straight, level and plumb,” he will find the system just a matter of common sense. “If you are handy and you understand the principles of construction, and if you

did a job or two with ICFs, you would be just fine.” Further, says Lennox, Logix has what it calls a “pre-pour checklist” of about 20 items, such as making sure fasteners are connected correctly before pouring begins. In addition, Logix has training courses and manuals available. Like Lennox, Prior points out using ICFs is not that demanding from a technical point of view. “That is the thing about this system,” says Prior. “We really emphasize, and have strength, in training. We can really train a contractor in about a day how to build this product. You see a lot of eyes light up because it is so simple.” With a 6-7% and growing share of the residential market, largely single-family dwellings, and an ever increasing slice of the commercial sector’s hotels, retirement homes and the like, including such buildings as the 12-story student residence in Waterloo, Ont., it would seem that the ICF industry does not need much more to propel its fortunes. Still, there is the matter of national and provincial building codes to aid its rise to prominence. Monsour says that nationally, and in Ontario, ICFs are recognized in the prescriptive part of their respective codes, and the just developed ULC standard awaiting adoption will add yet another element to force the pace. “Then of course we have the new building codes that are com-

ing in and they will have some implications as well,” says Lennox. The new B.C. code, for example, is expected this fall. For all their obvious benefits and ease of use, Monsour, Lennox and Prior all say that there is still work to be done on the ICF front, including addressing a market mindset that is comfortable with traditional methods of construction, because they have been done that way for so long. Education will help, says Prior, since there is a need to drive the product from every angle. Joining an industry association will help too, adds Monsour. He says it will allow manufacturers and builders to resolve their common problems together. “I have 10 manufacturers that work with me, and when we do a project like the thermal mass project or a wall energy rating, the costs are shared among the guys with the same end result.” It seems that at every level, cost, convenience and use, ICFs are a snap.

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Feature

DIVING INTO

SHALLOW FOUNDATIONS

CLOSE ADHERENCE TO BUILDING CODES AND PROPER DAMP PROOFING AND WATER PROOFING CAN KEEP YOUR CLIENTS’ PROPERTIES HIGH AND DRY.

BY NESTOR E. ARELLANO

E

ach year, homeowners throughout Canada suffer the effects of basement flooding, reducing their property values, as well as damaging precious personal belongings. The Insurance Bureau of Canada reports that flooded basements due to heavy rainfall account for no less than $1.3 billion in insurance payouts annually. Experts say that very often basement flooding and other problems such as structural instability, heat loss during winters, and mold and mildew can be traced to the building’s foundation type and incorrect or missing foundation insulation. This presents a substantial opportunity for many contractors who choose to specialize in basement waterproofing or damp proofing. “Basements are typically un-insulated or 52 |

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poorly insulated areas. As much as 20-35% of a home’s heat loss comes from this area,” says Peter Greidanus, product specialist at Armtec Infrastructure Inc. “This alone is an excellent opportunity for contractors to offer homeowners services such as insulation repair, damp proofing and water proofing.”

Frost-protected shallow foundations In cold climate areas, foundation footings are typically placed about 48” below the frost line. This type of foundation is very popular throughout Canada, Greidanus says. Builders dig below the frost line because freezing causes the soil to heave upwards. This movement can create cracks in the foundation that will let moisture and water

CONTRACTOR ADVANTAGE

in or cause parts of the home to jack upwards and damage the structural integrity of the building. Placing the footings below the frost line mitigates this problem. However digging to depths below it adds significant cost to construction. In recent years, many home builders have branched out to digging shallow foundations which are considerably cheaper, according to Greidanus. The footings of frost-protected shallow foundations (FPSF) are placed just 12” to 16” below grade. This type of foundation can be installed using a trenching machine rather than a backhoe. The National Association of Home Builders estimated it cuts construction cost by as much as 15-21%.


Will FPSF eventually supplant digging below the frost line? Probably not, says Greidanus. “FPSF is best suited from locations such as Nova Scotia, where soil cover is thin and there are huge rock deposits underneath.” “For most parts of Canada, digging below the frost line offers the best protection against frost heave. Homeowners also typically desire the extra living quarters that basements afford and this can best be achieved by digging deeper foundations,” Greidanus explains.

Other popular types of foundations include: Slab on grade or concrete foundation poured and moulded directly on the ground has been around since the 1920s. This type of foundation is cheap to build, but is more suited for warm climates since they are typically not insulated. Brick, stone or rubble are often used in older foundations. These foundations are rarely damp proofed. They have a high mortar content that makes them susceptible to absorbing moisture and water from the ground. Foundation experts recommend insulating from the outside. Today many homes are built with foundations of wood studs and sheathing specially treated with chemicals to resist rot and insects. Preserved wood foundations are generally fully insulated.

Experts say that very often basement flooding and other problems such as structural instability, heat loss during winters, and mold and mildew can be traced to the building’s foundation type and incorrect or missing foundation insulation. It also relies on heat escaping from the home towards the foundation to raise the frost line and minimize the effects of frost damage. The foundation is further protected from frost damage by the use of insulating material on the soil side of the foundation. Vertical insula-

tion is placed on the outside of the foundation from above grade to the bottom of the footing. In colder areas, “wing” insulation extending outwards from the footing is used. “The colder the climate, the further the wing insulation is extended,” says Greidanus.

Rising waters lead to rising costs For years, fire damage was considered by insurance companies as the most expensive source of claims, but about seven years ago it was supplanted by water damage. For instance, in 2009, nationwide insurance payouts totaled $5.3 billion. Heavy rainfall causing flooded basements accounted for $1.3 billion of that amount according to the Insurance Bureau of Canada. The Canada Mortgage Housing Corporation (CMHC) estimates that the average cost of damages range from $3,000 to $5,000 per incident. Thankfully, there are numerous products and preventive measures that contractors can use to help homeowners save thousands of dollars in costly repairs and maintain the value of their property.

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Managing moisture Keeping moisture and water out is critical in keeping basements warm and dry, says Gene Rogers, founder of GH International, a Mississauga, Ont.-based manufacturer of adhesive, sealants and rubberized waterproof coating material.. “Hydrostatic pressure and gravity forces water through cracks in the foundation walls and moisture can seep into foundation walls,” says Rogers. “Contractors can keep them out by applying rubberized coating material that can be painted on the foundation walls.” Bitumen-backed waterproofing sheets are still widely used as damp and water protection for foundation walls, but over time these material deteriorate and need to be replaced. Asphalt-based sealants which can be painted on the walls are also very common, but rubberized compounds are slowly gaining popularity. “Many builders now favour rubberized compounds that can be painted on the foundation walls,” Rogers says. “This new product withstands temperature ranges better and is flexible so it does not crack or break.” Current building codes require damp proofing of home foundations not waterproofing, says Steve Duplantis, account manager of Cosella-Dorken, manufacturers of water-resistive barriers and drainage systems. “This means insulating systems need only to resist incidental water or water that is not under pressure. Despite this, manufacturers are able to offer some products designed to resist hydrostatic pressure.” If hydrostatic pressure is forcing water through foundation wall cracks, contractors can excavate the perimeter of the house to access the problem area and seal the cracks. Ideally, a flexible damp-proofing membrane should also be mounted on the foundation walls and a water drainage system installed at the bottom of the wall for added protection, says Peter Barrett product manager for Cosella-Dorken. Cosella-Dorken’s Delta MS damp-proofing membranes are polyethylene sheets with dimpled surfaces that create an air gap between the membrane and the foundation walls. “This design allows incidental water to flow to the bottom of the wall and into the drainage system rather than collecting on the wall,” says Barrett. Cosella-Dorken also has two new products that help wick away moisture from basement walls. The Delta Coldjoint Barrier, is an 18”-wide, self-adhering membrane de54 |

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Apart from damp-proofing membranes, contractors can also install rigid insulation boards on the foundation floor and interior wall spaces. These products, which can be attached to the surface with nailers, prevent the escape of heat and keep the basement warm during cold months. signed to go over the area where the foundation wall meets the footing. Moisture can also enter the basement by wicking from the foundation footings onto the concrete walls of the house, says Barrett. “This effect, which is called rising damp, raises the level of moisture in the building and leads to dampness.” Cosella-Dorken’s new Delta Footing Barrier helps prevent rising damp. The multilayer polyethylene barrier is placed on the wet cement of the building footing during the home’s constructions. The product bonds with the concrete footing and acts as a capillary break membrane, which resists the wicking of water. Apart from damp-proofing membranes, contractors can also install rigid insulation boards on the foundation floor and interior wall spaces. These products, which can be attached to the surface with nailers, prevent the escape of heat and keep the basement warm during cold months.

Foundation pitfalls Even with the best materials in hand, it is often easy to ruin damp proofing job by failing to follow standard procedures or trying to create “shortcuts,” according to Barrett. “Very often workers are under pressure to finish more work or they may be trying to save a little bit of money when they create these mistakes,” he says.

Here are some of the things you should guard against: • S  crimping of fasteners. Some workers think they can save money by spacing fasteners for products like damp-proofing membranes further apart than what has been specified by the manufacturer. This can weaken the capability of the membrane to hold back water pressure or make it prone to dislodging.

CONTRACTOR ADVANTAGE

• Neglecting to apply sealant on top of dampproofing membrane. This will allow soil and debris to get into the space between the foundation wall and the membrane and clog the space between them. This will prevent water from traveling down to the drainage system and instead trap moisture. • Not using closed-cell (waterproof), rigid insulation panels on below grade installations. • Neglecting to install insulation in small spaces and corners • Puncturing, distorting, compressing or squeezing insulating membrane or batting out of shape Contractors also need to keep abreast of the latest building codes that apply to the jurisdictions they operate on, says Frank Lohmann, senior technical adviser for the National Building Code at the National Research Council. He admits this could be complicated for businesses operating in different provinces. “Canada has one national building code, but provinces are free to modify them to suit their jurisdiction.” Among the most recent code updates affecting building foundations is the adoption of more stringent rules regarding barriers to radon. The gas, which is emitted by the ground naturally, has been linked to lung cancer. “There is now more emphasis on building a continuous air barrier to prevent radon emission from the ground,” Lohmann says. “The new codes recommend the use of sealants on walls and junctions.” Contractors need to cover all the bases if they truly want to help their client save money and protect their property and health,says Barrett. “Very often homeowners will not be aware of these requirements. It is often up to the knowledgeable contractor to stir their client in the right direction,” he adds.


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Contractor Advantage July / August 2012  

Summer Siding Issue

Contractor Advantage July / August 2012  

Summer Siding Issue