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November-December 2017

ISSUE

#06/2017

a publication of CanCham Thailand

PLATINUM SPONSORS

GOLD SPONSORS


John Stevens CanCham President

2017-2018 CanCham Thailand Board Members Patron: H.E. Donica Pottie, Ambassador of Canada to Thailand

Executive Board: John Stevens, President Dean Outerson, Vice President Derek van Pelt, Vice President Dan McKay, Treasurer Sunny Patel, Secretary

Board of Directors: Peter Baines David Beckstead John Casella Surachit Chanovan Lawrence Cordes Caroline Kwan Ron Livingston Michael White

Embassy Representative Michel Belanger

Advisors: Yvonne Chin Don Lavoie Joni Simpson Marisha Shibuya Peter van Haren

Executive Director: Kelly Cailes

Thai-Canadian Chamber of Commerce 139 Pan Road, Sethiwan Tower 9th floor, Bangkok 10500 Tel: +66(0) 2266-6085-6 Fax: +66(0) 2266-6087 Email: info@tccc.or.th Website: www.tccc.or.th

The Voyageur is the monthly magazine of the Thai-Canadian Chamber of Commerce, covering all Thai-Canadian business, legal and social news of interest to the members and others who are active in expanding Thai-Canadian bilateral trade.

Editor: CANCHAM Thailand

Publisher: Scandinavian Publishing Co., Ltd. 211 Soi Prasert-Manukitch 29, Prasert-Manukitch Rd., Chorakeabua, Ladprao Bangkok 10230 Tel: +66(0) 2943-7166-8 Fax: +66(0) 2943-7169 Design: Disraporn Yatprom Email: disraporn@scandmedia.com

Advertising Contact: Mr. Finn Balslev, Marketing Director Scandinavian Publishing Co., Ltd. Tel: +66(0) 2943-7166 ext.116 or 08-1866-2577 Email: finn@scandmedia.com

Dear CanCham Members and Friends,

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On October 7, CanCham hosted its annual Maple Leaf Ball – this year with a masquerade theme. The event was very well attended with over 250 guests – dressed to the nines. I would like to thank our Gold Sponsors ISB and Bangkok Hospital, Silver Sponsors Magna, Manulife, NIST, MBMG, Siam Winery, MonSoon Valley and Tours R Us, and Bronze Sponsors KIS, Bumrungrad and ReDev Properties. Without the generous support of our sponsors we would not be able to host this great annual event. I would also like to highlight the contribution of our organizing committee of Caroline Kwan, Lawrence Cordes, Dan McKay, Derek van Pelt, John Casella and the Chamber office team of Kelly Cailes, Khun Saralee, Khun Bow and especially Khun Jen – who did a masterful job in orchestrating a very well-run event. On the night of ball, CanCham inducted Peter van Haren into its Hall of Fame. Taking a cue from the National Hockey League, CanCham retires the jersey of foundational contributors to the Chamber. Peter is the definition of foundational – serving as president during two terms from 1998 until 2001 and then again from 2012 until 2015. During his tenure, CanCham matured from a loosely knit business club to a multi-faceted organization with defined operating procedures, a robust membership and a clear mandate. Peter joins the rarefied air of fellow CanCham Hall of Fame inductees Sam Cohen and Sean Brady. The fourth quarter of the year is a busy one for CanCham. Over the next few months we are hosting a multi-chamber networking night (November 15), a book launch event for Canadian author and bon vivant, Bjorn Turmann (November 23), a seminar on Canadian tax (November 24), a presentation by Peter Hall, Vice-President and Chief Economist at Export Development Canada (December 1) and our annual Christmas family brunch (December 16). We also say goodbye to Khun Bow, our office manager – she will be joining her family business and we wish her all the best in her future endeavours. The Chamber office will be reaching out to our membership to renew subscriptions for 2018. Thank you in advance for your continued support and patronage. Yours Sincerely, John Stevens


Member News

Last year Alberta Minister of Economic Development and Trade, Deron Bilous, opened Alberta’s new Guangzhou office, making 9 of its 12 international offices in Asia.

Alberta, Thailand and Broader Asia:

Strengthening our Common Future Ron Hoffmann, former Canadian Ambassador to Thailand (2009-2012) and now Alberta’s Senior Representative to the Asia Pacific Region based in Hong Kong, was in Bangkok recently. He was accompanied by Rob Simmons, the Managing Director of Alberta’s Singapore Office. Voyageur caught up with Ron and Rob to delve deeper into what they are doing with Alberta in Asia.

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Voyageur: Rob, Ron, your joint visit to Bangkok generated a lot of interest among the Canadian and Thai business communities. As former Canadian government executives, how did you end up working for Alberta? Ron Hoffmann: Over 26 years as a Trade Commissioner and then Ambassador, it was clear to me that Alberta’s role in Canadian affairs, at home and abroad, had been progressively becoming larger. For most of my federal government career, Alberta led Canadian economic growth, and as Canada’s

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energy epicenter it was evident that what happened in Alberta mattered to all Canadians. So, when the Premier of Alberta at the time, Jim Prentice, personally asked me to consider serving as the province’s top person in Asia, it was a simple decision. As a Western Canadian who knows Alberta well, it just made the decision so much easier. Six months later, as you know, Albertans elected a new government, with Premier Rachel Notley at the helm, and I am honoured that she had sufficient confidence in the appointment to keep me on. It was actually under Premier Notley that I relocated to Hong Kong to serve as

Alberta Senior Representative to Asia. Rob Simmons: I have been working in the Southeast Asia Region out of Kuala Lumpur and Singapore for the past 15 years and more broadly covering Asian markets for many years before that. I came to this position from Export Development Canada (EDC) where I was Chief Representative for Southeast Asia and Oceania. With EDC I developed a broad network of business and government contacts across the region including in Thailand. I spent an earlier part of my career working with the Government of Alberta including


Member News

Alberta and the national government of China signed an Energy & Climate Change Partnership Agreement in Beijing in April. China is looking to Alberta for ‘best practice’ lessons in tackling climate change.

working out of the Hong Kong Office so in a sense I am now rejoining the Provincial team. As is the case with Ron, I am honoured to have been selected as first Managing Director of the Alberta Southeast Asia Office based in Singapore. Voyageur: How does Asia fit into Alberta’s priorities? Ron Hoffmann: Alberta has looked hard at the sobering reality that well over 80 percent of our exports head south of our border at a time that the United States has become a more inward looking and less predictable market. When we look at the world, it is clear that Asia holds the highest prospects for finding new consumers for our goods and services, and to increase foreign investment into the province. Finally – in Asia, the government sector has an outsized role to play helping our companies to connect and to navigate in unfamiliar cultures and business environments. We know we can’t afford to be everywhere, so we put limited government resources where we felt they can have the highest impact.

Voyageur: Has anything changed in Alberta’s approach to doing business when power was handed to a first ever New Democratic government? How does Asian business perceive the NDP government? Ron Hoffmann: The Rachel Notley government has sent a clear message to the Asian business community that Alberta is open for business. The current government has also taken key concrete steps to deepen commercial and policy links with Asia. To cite one example, the new Alberta government’s policies, combined with Premier Rachel Notley’s close personal involvement on the file, led to approval for much needed new energy pipelines that will serve Asian customers keen to diversify their energy supplies. This Alberta government has set up a new office to support foreign investment, called Invest Alberta, and we have new programming designed to share the costs and risks of export market development and to financially support buyers’ missions to Alberta. Importantly, Premier Notley and Ministers have actively engaged in Asia on a personal level. They have connected directly with business leaders and governments

across key markets, and signed some landmark cooperation agreements in fields such as the environment, climate change and trade and investment collaboration. Alberta has seen several major new investments from Asia over the last few months alone. So, in short, Alberta’s NDP government has been very active in promoting Alberta-Asia business and policy partnerships, and the results speak for themselves. Voyageur: And Alberta for several years was the only province to have an international office dedicated to SE Asia. How does SE Asia fit into Alberta’s Asia thinking? Rob Simmons: Yes, the Alberta Southeast Asia Office was established four years ago in recognition that this is one of the fastest growing regions in the world, comprised of open and business friendly economies that can provide a gateway for Alberta into Asia. It is through markets like Thailand, Singapore and Malaysia where we believe that mid-sized Canadian exporters can most easily gain a foothold into the region first by tapping into the advantages which will be provided though the ASEAN November-December 2017

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Member News

Alberta’s iconic tourism is ideally suited for growing Asian tourism sector growth.

Economic Community (AEC) and then leveraging local relationships to venture into the broader Asian region including tackling China and India. Voyageur: Ron, Asia is a very large region. Where do you spend most of your time? Ron Hoffmann: It won’t be a surprise to anyone that I spend much more of my time in and on China than anywhere else. The social and economic transformation now playing out in China is like nothing we have ever seen before, both in pace and scale. Within a generation, its population became the biggest urbanized middle class on the planet, and these consumers want diversity, quality, international life styles and global connectivity. Chinese consumers want the kind of things Alberta and Canada have in abundance. But for Alberta, Asia is much more than China. The Chinese market is complex, and not for everyone. Alberta’s third biggest export market internationally is Japan. Korea is well positioned for growth. And India is a market that shows a lot of promise, especially for Alberta food exports, but also in areas

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such as education, technology and energy. SE Asia is a region we want to dedicate much more attention to for the reasons Rob just mentioned. I will play my part in doing so. Voyageur: How does Thailand, specifically, fit into Alberta’s strategy for Asia? Rob Simmons: Thailand is an important part of our broader Asian and Southeast Asia strategy both in terms of trade opportunities as well as investment attraction. With respect to trade, we recognize that the Thai economy is very resilient and thanks to forward looking investment in infrastructure and new initiatives such as the EEC (Eastern Economic Corridor) development plan, Thailand will continue to be an important part of the global supply chain. This coupled with the fact that Thailand is a major consumer market and early adopter of new technologies including clean technologies and renewable energy translates into opportunities for Alberta companies across a variety of subsectors. Also, Thailand has been the leader in embracing the principles of the ASEAN Economic Community (AEC) and is particularly well positioned

as a gateway for Alberta exporters into the rapidly growing economies in the Mekong region. So, we are actively encouraging Alberta companies to consider entering the Asian market through Thailand and to build strategic relationships in Thailand to further trade in the ASEAN region. The other real strength of the Thai economy when compared to most other Southeast Asia markets is the presence of several well-manage dynamic corporate groups and conglomerates with solid regional reach which are excellent potential partners for Canadian and Alberta business and a good potential to be strategic investors in Western Canada. Voyageur: Speaking of the wider region, we hear much about China’s One Belt One Road initiative, that includes SE Asia. Should Canadians be paying attention? Ron Hoffmann: China’s role in building and financing infrastructure across the wider Asian region has been happening for years, but OBOR puts a framework around it and it publicly commits deepened Chinese political support as well as a lot more capital. That matters. And so does the creation of the new Asian


Member News

Premier Rachel Notley has leveraged Alberta’s climate change leadership into energy pipeline approvals by the Government of Canada.

Infrastructure Investment Bank (AIIB). Developing more and better roads, rail, ports and airports should create new opportunities for most countries of the region, including less developed societies, lifting overall economic growth and the further expansion of Asia’s middle class. So, yes, Canadian companies need to take this phenomenon seriously because it is changing the global economic landscape. SE Asian societies also want to see western countries remaining engaged so that China’s growing role and influence doesn’t become overwhelming. The good news is that Albertan and other Canadian companies have distinct niche strengths to bring to the table. We need to help them be involved. Voyageur: Lets return for a moment to what’s happening in Alberta. You mentioned earlier that the province’s goal is to diversify. Is that working? Ron Hoffmann: I referred earlier to Alberta’s strong and sustained economic fundamentals. These include our skilled population, which is the by some measures the youngest and highest educated in Canada. When we look at

the full tax picture, we are among the lowest tax jurisdiction in Canada. We are now a leading technology and innovation center, and we have Canada’s 4th and 5th largest cities (Calgary and Edmonton, respectively), and both are well connected within North America and, increasingly, globally. Our Energy sector is driving down costs and expanding production. And while many think of energy when they think of Alberta, we also have notable strengths in the fields of education, tourism, food, forestry, entertainment, life sciences, the environmental and advanced technologies among others. Alberta is expanding its exports to the world, especially Asia, and we are attracting more investment from this region. Diversification is definitely happening, but we need to continue to work hard to build on this. Voyageur: What does the Trump Presidency mean in terms of how Asians look at Canada and Alberta? Ron Hoffmann: We are seeing more and more Asian companies looking to Alberta as a jurisdiction of choice for investment and for other kinds of strategic partnerships, and this is in part to their perceptions of a United States Admin-

istration less open to the world. It is a major opportunity. But we can’t afford to be complacent – most Asian enterprises don’t know Canada, or Alberta, as well as we think. We have to sell ourselves better, and we need to engage more. Voyageur: Do you think that you will be back in Bangkok more often? How will you engage with Cancham in Thailand? Rob Simmons: This visit has reinforced the value of engagement and the strong potential to do more business together. Ron and I are therefore jointly joining the CanCham, and are looking to engage more actively to foster closer ties between the broader Chamber membership and Alberta companies interested in the Thai market. We are also planning a number of trade missions to Thailand in partnership with the Commercial Section of the Canadian Embassy. In partnership with the CanCham as well as partners such as the Thai Board of Trade we hope to encourage Thai business delegations to visit Alberta and explore the investment and trade partnership opportunities first hand.

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Member News

Looming LNG Dependency to

Drive Thai Energy Sector Change

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By Jack Kneeland

The Thai gas and power sectors are coming under pressure from shortage of domestic natural gas, changes to the regulatory framework, geopolitical dynamics, and the evolution of clean energy technology. While there are powerful forces acting to slow reform, these will eventually fade. Thailand may be on the pathway to an energy future that is quite different from what we see today. Historically, Thailand has a high level of dependency on natural gas supplied via pipeline from domestic resources in the Gulf of Thailand and Malay Basin as well as imports from Myanmar and a joint project with Malaysia. Approximately 60% of piped gas resources are used for power generation and natural gas accounts for more than 60% of power generation fuel supply. This gas also provides feedstock for the Thai petrochemical industry, supplies energy for industrial use and fuels natural gas vehicles (NGV).

higher than domestic piped gas, but less expensive than gas from Myanmar. However, there is large price risk after that period. Asian LNG prices hit $18 in 2014, almost three times prices available in the region today. LNG prices are particular important for Thailand as over 60% of power is fueled by gas and electricity tariffs as the power market structure passes energy costs on to consumers. There is also a large set of pending and in-progress regulatory change expected across the entire gas to power industry value chain, the outcome of which could be transformational.

tourism and fisheries require sophisticated management and the selection of a less capable operator could present risks. Additionally, Thailand has created a new Production Sharing Agreement (PSA) structure, which replaces the traditional profit sharing model. How the market will react to these terms is still unclear. Contracts for the Yadana and Yetagun field in Myanmar field are also on track to expire and there may be some risk to their extension. Gas transmission and distribution The future structure of Thailand’s gas transmission and distribution

However, it appears that piped gas supply to Thailand peaked in 2014 and has declined since. Official figures show that investments made in new production wells do not seem to be significantly increasing supply. This trend is expected to continue and based on official figures current reserves will run out entirely by 2036. New gas discoveries not factored into this calculation could mitigate this somewhat, but won’t save the day. The country’s current plan is to replace local gas with liquefied natural gas (LNG) imported from international suppliers. Thailand has already taken steps to prepare for large scale LNG imports including development of a series of regasification terminals and has signed long-term contracts for 5.2 million tons per annum (MTA), which will provide over 10% Thai gas supply. The global LNG supply market is currently in a state of oversupply, which is expected to continue for the next 3-5 years. Current LNG prices are

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Upstream gas Thailand is currently in the process of conducting two major contracting processes for extension of existing concessions and new exploration properties under the 21st concession round, which had been cancelled several times primarily due to political pressures. While the auction looks likely to proceed there are still risks. The concession extensions involve the large Bongkot and Erawan fields which together account for almost 70% of Thailand’s piped gas supply. These large fields, some near sensitive

segments is also unclear. On the one hand, a range of reforms including third party access (TPA) to the gas pipeline infrastructure; plans for multiple LNG buyers; and mention in Energy 4.0 of addressing PTT’s monopoly suggest that Thailand is moving in the direction of global practice where liberalization is taking hold. However, rights given to PTT under the 2007 Energy Industry Act; grandfathered rights to pipelines and other infrastructure, and the duration of existing gas sales agreements (GSAs) make rapid change difficult.


Member News

Electricity markets and renewable energy Much attention has been paid to renewable energy both in Thailand and around the world. Thailand is a regional leader in renewable energy with large biomass, solar PV and wind programs, although the pace of development has slowed. The government’s official position appears to be that it will revisit large-scale RE expansion when it becomes competitive with imported LNG although exactly what “competitive” means is not currently clear. If LNG remains abundant and inexpensive, Thailand may be able to transition fairly seamlessly. However, we should not overlook the risk to LNG prices and Thailand’s limited alternatives for power generation. Aside from LNG, Thailand looks to domestic and imported coalfired power, imported hydropower and ambitious energy efficiency programs to help meet the gap. But given the limited ability of these options to scale, it does look like Thailand is putting all of the country’s eggs in the LNG basket. Despite the force of these pressures for change, we do not expect an overnight transformation for the Thai energy sector. However, the drivers of change are too powerful to avoid forever. The most powerful driver remains the risk of higher LNG prices. If on a 5-year window, LNG becomes xx% of natural gas supply, a doubling in price - which is not unfathomable - would pass costs on to residential and industrial consumers which may not tolerate such price increases. However, there are a set of positive factors as well. The world has seen crashing solar PV equipment costs drive a global solar boom that made solar the single largest power investment segment around the world. A similar dynamic that could be happening in the battery space could enable “renewable energy plus storage”, in a range of configurations, to meet the government’s

criteria of similarly reliable power at a lower price than from LNG. Thailand has also long maintained a highly regulated electricity distribution system that doesn’t permit many of the innovations seen around the world. However, a new net-metering program may bring life to wide-scale solar rooftop development and usher in a new era in which low cost renewables, energy storage retail reform and micro-grid application advances could present a new energy system that could solve many of the problems presented by the decline of piped gas resources. It does seem unlikely that Thailand will see the kind of changes over the next few years that have transformed the power sector around the world. However, the country’s energy security situation is getting drastic and the track record of reform, innovation and investment point to a wave of viable

solutions. Change happened very fast in the other countries and may sneak up on Thailand – and indeed may represent the country’s best path forward to a sustainable energy future. (Jack Kneeland is a senior advisor at AWR Lloyd, which provides strategy consulting band financial advisory services to the Asian energy sector. He has lived in Thailand for over 15 years during which he has held senior management roles in the investment banking and consulting sectors with a focus on energy and clean energy finance. Jack is currently co-leading Running on Empty, a new multi-client study on Thailand’s energy future that is being conducted by AWR Lloyd and Pöyry Energy. He has a master’s degree from Johns Hopkins University School of Advanced International Studies, SAIS)

November-December 2017

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November-December 2017

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Smiling Albino’s

Top Ten Books

about Southeast Asia Any region or country is the sum total of its history, and in this regard Southeast Asia is a complicated dish. The past century has seen some of our civilization’s greatest tragedies and proudest triumphs, so it’s no surprise that many of the books deal with the events and people involved. At turns inspiring, tragic, funny, mysterious, and adventurous, these books are a perfect way to take a deep dive into some of the stories that make this part of the world such an endlessly fascinating place to be. The team at Smiling Albino is always expanding our regional knowledge, and here are our favourite reads... hopefully they’ll inspire you to travel.

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First They Killed My Father: A Daughter of Cambodia Remembers - by Loung Ung The scars of Cambodia’s disastrous Khmer Rouge takeover are still visible even today. Loung Ung’s powerful firsthand tale recounts her life as a five-year old, when her family was torn apart and she was sent to a work camp to be trained as a soldier. You’ll rarely find a tale of such a dark time told with such courage and hope – a true testament to the Cambodian people today who remain proud, strong, and optimistic. Embers of War: The Fall of an Empire and the Making of America’s Vietnam - by Fredrik Logevall There have been countless books written on one of Asia’s most impactful historical events, but this book is unique in that it digs deeper, examining the convoluted, intertwining threads that led to the Vietnam War. Beginning with the disintegration of French Indochina and following a cascade of poor decisions and bad policy by the powers and personalities that stepped into the vacuum, the book provides a deep understanding of how the dominos that led to the Vietnam War were set into motion.

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The Ideal Man: The Tragedy of Jim Thompson and the American Way of War - by Joshua Kurlantzick Businessman, spy, and all around secretive, cagey expat, Jim Thompson is primarily known today as the man who, in the 1950s, singlehandedly introduced the world to Thailand’s famous silk. One day he went for a walk… and never returned. His story alone is worth reading about, but this book also provides insight into the politics of the time and the characters he palled around with, many of whom were busy deciding how, or if, the USA was going to get involved in the burgeoning Cold War – a decision that has had a profound effect on Thailand’s development into the modern era. River of Lost Footsteps: Histories of Burma - by Thant Myint-U Burma – or Myanmar – occupies a strange place in the hierarchy of Southeast Asia. A former British colony held in the grip of a brutal military rule for decades as its neighbors grew and modernized, its people and culture have developed very much on their own. This book tells the history of a country that began with Portuguese pirates and continued through Mughal princes, freedom

fighters, colonial powers, natural disasters, and military crackdowns. A great read that provides insight into the families and institutions that have survived some of the most extreme decades in history – and that have emerged in the 21st century to give Burma such a confident – if not sunny – future. The Sympathizer - by Viet Thanh Nguyen This Pulitzer award-winning debut novel is masterly crafted. It offers a unique perspective on the American war in Vietnam from the view of a young double agent whose political beliefs conflict with his personal allegiances. A great read that delves into the complexities of wartime loyalties and sympathies. Catfish and Mandala: A TwoWheeled Voyage Through the Landscape and Memory of Vietnam - by Andrew X. Pham Andrew X. Pham was born in Vietnam but grew up in America. There, he was seen as Asian. In Vietnam, he was seen as Korean or Japanese. After a family tragedy, Pham sets out on his bike to really, truly, find himself. This book is widely read by travelers in Southeast Asia, inspired by the same sense of adventure as Pham, and awed and amused


by what he discovers on his journey. A great read with plenty of insights into what role upbringing, environment, and education play in defining who a person is, it’s a fascinating look into how culture is projected onto people, and what happens when some – maybe even you! – reject it and search for your roots. Four Reigns - by M.R. Kukrit Pramoj A fictional story set against the very real backdrop of 19-century Siam, Four Reigns is one of Thailand’s most famous and culturally significant books. Its author was also one of Thailand’s great statesmen – Prime Minister, scholar, translator, dancer, and journalist – whose house is a tourist attraction today. The story provides a visceral sense of time and place, giving a great, detailed narrative of the massive changes that brought Thailand – sometimes painfully – into the 20th century and altered its ancient culture forever. The Glass Palace - by Amitav Ghosh This is a magnificent story of love and war that begins with the exiling of the last king of Burma. The story follows the life of a young Indian immigrant as he builds a timber empire in Rangoon.

The novel offers insight into the cultural, political and commercial relationships between India, Burma, Malaysia and the British colonists during the late 19th and early 20th centuries. The Gods Drink Whiskey: Stumbling Towards Enlightenment in the Land of the Tattered Buddha - by Stephen T. Asma This enjoyable read offers a look at Theravada Buddhism practiced in Southeast Asia from the perspective of a visiting westerner. Situated in postKhmer Rouge Cambodia, the writer documents his observations as the local Cambodians salvage their previously banned religion from the ashes of war. It is down-to-earth and comments on how locals grasp the mixture of religion and philosophy The Falcon of Siam - Axel Aylwen This epic novel covers a fascinating chapter in the ancient kingdom of Siam’s history starting with the arrival of the first Europeans. It roughly follows historical accounts of the tug-of-war played by various nations over Siam and the delicate negotiations and less delicate pressures applied by King Narai and his court. The story provides insights into

the customs and rigid class structure that is still evident in Thai society today. You’ll wish the story doesn’t end when you get to the last page… and you’ll be overjoyed to learn it hasn’t! There are two more books in the trilogy, The Falcon Takes Wing, and The Falcon's Last Flight. (Smiling Albino is a Bangkok-based luxury and adventure travel specialist and have been designing and operating customized, private itineraries in Southeast Asia for over 15 years. What to do with your retired parents visiting from Victoria or Florida? Family or colleagues in town? Smiling Albino are the perfect hosts to show them the city – day and night, take them on day-trips to fabulous locations from Amphawa to Ayutthaya, or for those a bit more active, a cycling tour of unseen sites in and around Bangkok. The team at Smiling Albino can create the perfect activities and excursions for everyone. From half-day discoveries to three-day adventures to three-week multi-country trips of a lifetime, Smiling Albino does it best. Interested in one of Smiling Albino’s great adventures? They will extend special rates to CANCHAM members.)

November-December 2017

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Becoming an Expert – What you

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By Colin Campbell So, you decided to leave the land of ice and snow and become a Canadian expat. It will not have been an easy decision leaving your friends and family and relocate to Thailand. The sense of adventure and desire to experience new cultures; working conditions or just the once in a life time opportunity is too great to resist. Well done for taking the chance and leaving the comforts of Canada. Some of these comforts of Canada will be provincial medical care; the familiar tax system; and registered retirement saving plans. This is to provide some information on some financial concerns to be aware of as a Canadian Expat. So you decided to leave the land of ice and snow and become a Canadian expat. It will not have been an easy decision leaving your friends and family and relocate to Thailand. The sense of adventure and desire to experience new cultures; working conditions or just the once in a life time opportunity is too great to resist. Well done for taking the chance and leaving the comforts of Canada. Some of these comforts of Canada will be provincial medical care; the familiar tax system; and registered retirement saving plans. This is to provide some information on some financial concerns to be aware of as a Canadian Expat. One of the first things to look at is medical insurance or private health insurance. A great benefit of Canada are the provincial medical plans. If you get sick or hurt, you can go to the hospital and the doctor will examine and treat you and you don’t have to pay anything. That is not the case as an expat. If you get sick or hurt, and remember bad things happen to good people, and you require a visit to a hospital you will not get treatment until the hospital is assured of payment. Please note some employee plans only provide coverage while you are working, not during your free time. So if you get hurt on your free time you may not be covered. There are several medical insurance plans available in Thailand. When you are considering what plan to purchase here are some considerations:

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• Does the plan provide a medical card, pre-approval for treatment? • Does the plan have a network of doctors and hospitals? • Is the coverage worldwide; just in Thailand or Asia? If you return to Canada for a holiday, or emergency are you covered? Remember you might have lost your provincial cover if you are outside Canada for long enough. • Is treatment worldwide or just in Asia? Will the plan fly you back to Canada to recover? • How are claims settled? Do you pay first and the plan reimburses you, or does the plan set up payment directly? • Is coverage based on a financial amount benefit basis? • Automatic renewal for life coverage? • Some plans include children for free A private medical plan is also important when you plan on returning to Canada. For example, Ontario Health Insurance (OHIP) coverage normally becomes effective three months after the date you establish residency in Ontario. The Ontario government strongly encourages returning residents to purchase private health insurance in case you become ill

during the waiting period. Your second financial concern will be your residency status and its tax implications. There are three possible residency status when you leave Canada. First, you may still be considered a factual resident of Canada if you maintain residential ties in Canada. The Government of Canada has two classifications of residential ties; Significant residential tiers include: • A home in Canada • A spouse or common-law partner in Canada • Dependents in Canada Secondary residential ties that may be relevant include: • Personal property in Canada • Social ties in Canada, memberships Canadian organizations • Economic ties in Canada, bank accounts or credit cards • Canadian drivers license • Canadian passport As a factual resident your income is taxed as is you never left Canada. You report all income you receive from sources inside and outside Canada for the year and claim all deductions that apply to you. Your second pos-


need to know sible residency status when you leave Canada and sever your residential ties with Canada is an emigrant. You usually become a non-resident for tax purposes on the latest of date you leave Canada; or spouse or common-law partner and dependents leave Canada or the date you become a resident of the county you settle in. The third residency status is a non-resident of Canada. This option is for countries that have a tax treaty with Canada, like Thailand. The definition of non-resident for tax purposes are: • You normally, customarily or routinely live in another country and are not considered a resident of Canada • If you do not have significant residential ties in Canada, or you live outside Canada throughout the tax year, or you stay in Canada for less than 183 days in the tax year. As a non-resident of Canada you pay tax on income you receive from sources in Canada. For more help in determining your residency status, please check the government of Canada website, http:// www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/ rsdncy-eng.html, or with a Canadian Tax Planner. As stated above, Canada and Thailand have a tax treaty. One of the benefits of the tax treaty is retirement planning. Normally a non-resident of Canada receiving Old Age Security and or a Canada Pension or Quebec Pension and benefits may be subject to a Canadian income tax rate of 25%. Due to the tax treaty, the Canadian income tax rate for Old Age Security and Pension is lowered to 15%. Another tax benefit for those receiving Old Age Security, is Canadian non-residents do not have to pay recovery tax on their payments. The Old Age Security “recovery tax” is if your annual income is higher than the net world threshold, for example $72,809 for the 2015 tax year, you may be subject to a 15% tax on income above the threshold. For more information on

this please refer to the Government of Canada webpage, http://www.esdc. gc.ca/en/cpp/international/before_applying.page. On a side note, you can have your Old Age Security and Canada Pension Plan payments directly deposited into your local Thai Bank Account. For those who are not collecting a pension, your final financial consideration maybe to start saving for your retirement. One of the reasons you came to Thailand was to make some money and hopefully save some money. It is getting really depressing on reading some stories on how unprepared more and more Canadians are in regards to pension savings. For example, the Huffington Post on 02/16/2016, reported that 719,000 Canadian Seniors are living in poverty. CBC.CA on 06/29/2016 reported that the number of seniors declaring bankruptcies increased by 20.5% from 2010 to 2014. This static was surprising, 07/02/2015 Huffington Post, 48% of Canadians retired early at least partly due to circumstances outside of their control. A finally static from Frugals, 07/13/2016, 28% of preretirees in Canada have not received advice or information about retirement. You worked very hard to make the money, make sure that the money is there to work for you. There are several saving plans available to pick from to start saving for your pension. All these plans are based on a system like a Registered Retirement Saving Plan (RRSP) back in Canada. Like RRSPs the big advantage for the plans is that the plans defer taxes until the benefit is taken out of the plan. The one big difference to a RRSP is your contribution into the plan is not tax deductible. When setting up a plan, here are some things to consider: • How long do you have to start before you retire? The early you start to save the better. • Is the plan portable, if you move to another country can you still make contributions?

• Can you increase premiums at any time? Or take a break when need? • Can you invest in assets that you know? For example, buy Canadian mutual funds? • If you are not sure about what to invest in, does the plan allow for Discretionary Fund management. This service pays professional managers to make investment decisions. • What are the annual fees, the management fees? • Can you see your plan on line in real time? • Who regulates the plan? For example, is it the Financial Services Institute in the UK, or another Financial Regulator? • Are the assets ring fenced for extra protection for your investments? The plan will enable you to save for your retirement and take the benefits anywhere you decide to retire. In conclusion, when you decided to leave Canada and move to Thailand, you may not have thought about the three financial concerns listed above. You might have been too busy thinking about your new job, getting your work visa, where you are going to live. Hopefully, you can relax a little now and think about some of the other concerns that are important and start to resolve them or benefit from them and therefore enjoy your time as an expat even more. There are Canadian clubs to join as well, for example, https://www.meetup.com/ cities/th/bangkok/ has the Club Canada Thailand (CCT), and there are hockey teams and hockey pools available. If you have any questions or concerns, please contact me Colin Campbell, Chief Executive Office, Prism Group International, at Central World, 999/9 Rama l Road, Pathumwan, Bangkok, 10330, Thailand; Mobile +66 62013 7523; Colin.campbell@prismgroup. international

November-December 2017

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Member News

Edmonton powers ahead due

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While most of Alberta’s economy continues to adjust to lower oil prices, Edmonton’s economy continued to show resilience, even in the face of lower oil prices. As a testament to the city’s diverse portfolio, Edmonton has continued to create jobs throughout 2016 - adding 2,700 jobs to the labour force. Although oil is an important industry to Edmonton’s growth, primary industries only contribute 7% to Edmonton’s GDP. Edmonton’s most important industries are Finance /Real Estate, Trade and Technical/Management Services as shown below; In fact, very few of Edmonton’s major employers are in the oil industry. The largest Edmonton private employers are focused on professional services, retail and financial services (see table below) Many companies are still expanding their workforces in Edmonton, with three examples (Stantec, Champion

Pet Foods and Gilead Sciences) listed below. Founded in Edmonton in 1954, Stantec is now a 22,000-employee global design company, is Edmonton’ largest employer and is expanding at a breakneck pace. In 2016, gross revenue increased

by 50% to CAD$4.3billion to make it a top 10 global design firm. Stantec provides various design services including water systems design, architectural design and engineering. The Stantec Tower, western Canada’s largest tower will open in 2018. Champion Pet Foods, Canada's largest independent pet food producer will be adding 200 jobs and it has just begun construction of a new facility in western Edmonton, that will cost more than $200 million and increase exports to over 85 countries. Biotech giant Gilead Sciences has invested $100 million to expand its campus in northeast Edmonton. The California-based biopharmaceutical company, which currently employs roughly 300 people in the city, intends to increase local headcount to 430 people. With the University of Alberta providing a steady stream of life science graduates, Edmonton sees life sciences as one of its key growth industries. ReDev's Palisades plaza in Edmonton houses medical diagnostics centres which compliments the local surgery, pharmacy and dentist, providing everyday healthcare to the residents.

(Source: City of Edmonton)

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In all three examples above Stantec, Champion and Gilead show the diversity of the Edmonton economy and show why it has been more resilient than the rest of Alberta to the downturn in the oil industry.


Member News

to its economic diversity Edmonton’s largest private employers Stantec

12,700

Professional Services

www.stantec.com

Katz Group

8,600

Wholesale and Retail Trade

www.katzgroup.ca

The Brick

6,100

Wholesale and Retail Trade

thebrick.com

Finning Canada

5,393

Wholesale and Retail Trade

www.finning.ca

ATB Financial

5,250

Financial Services

atb.com

PCL Construction

4,500

Construction

www.pcl.com

Epcor Utilities

2,749

Energy Transmission and Distribution

epcor.ca

Servus Credit Union

2,148

Financial Services

www.servus.ca

Canadian Western Bank

2,044

Financial Services

www.cwbank.com

Liquor Stores N.A.

2,010

Wholesale and Retail Trade

www.liquorstoresna.ca

Edmonton doesn’t just have a thriving non-oil private sector. As the seat of the Albertan provincial government, many government offices and companies owned by the Crown are based in Edmonton. Around 20 to 25% of the Edmonton workforce has a job in the public sector. This includes direct employment by the provincial government and jobs in health care and education, according to John

Rose, the chief economist for the City of Edmonton. During the downturn in 2015/2016, the public sector and healthcare hired 14,000 people, which helped balance the 15,000 jobs lost in construction. It is the balance of this stable public sector and the growing non-oil private sector that balances the oil sector. This gives Edmonton the stability in tough times that other cities don’t have.

Even in the oil sector, Edmonton’s workforce is focused on current production, not the planning of new projects. Even as oil prices have dropped, oil production in Alberta continues to increase, mostly serviced by Edmonton’s oil and gas blue collar workforce. The Albertan government forecasts oil sands output will rise from 2.5 million bpd in the 201617 fiscal year to 3.3 million bpd in 201920. The Suncor, the Fort Hills project, will start production in 2017 and rise to 194,000 barrels per day through 2018. Owners of ReDev Properties strip plazas have been a prime beneficiary of Edmonton’s economic diversity. ReDev is Edmonton’s biggest owner of strip or community plazas. Its properties contain tenants that provide everyday needs goods and services to the local community. Edmonton’s long-term economic stability and high wage rates, has led to high levels of immigration and given Edmonton, Canada’s highest population growth rate. The more people in the local area to ReDev plazas, the greater the demand for local everyday goods and services like hairdressers, coffee, doctor’s clinic, dentist, pharmacy, banking etc. Even when the economy is not performing well, local people still shop for every day needs products from their local plaza. Investors around the world including Asia, have become owners of direct stakes in ReDev’s existing malls. From the malls profits owners receive an immediate income and then the opportunity of a capital gain upon resale of the mall in about 6 years’ time. With over 33 projects and 16 resales, ReDev owners have received more than 10% pa returns. The long-term stability and diversity of the Edmonton economy has allowed ReDev owners to realise long term investment gains. Contact: Stephen Janson: stephen@redevproperties.com

Source: Engineering News November-December 2017

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Member News

Cryptocurrencies: the future of currency or the road to ruin? The world seems to have suddenly gone mad for cryptocurrencies. But could this just be a fad – and a costly one at that?

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Recently, there’s been a tendency that has spread to Canada for tech companies to raise funds via initial coin offerings (ICO). These are similar to initial public offerings (IPO) but, instead of receiving shares in exchange for their money, investors are given digital coins. The trend is widespread enough to have attracted the attention of the Canadian Securities Administrators (CSA), who advised in a recent press release: The coins/tokens can be similar to traditional shares of a company because their value may increase or decrease depending on how successfully the business executes its business plan using the capital raised. That may be true. But, as the CSA release also points out, ICOs raise concerns regarding volatility, transparency, valuation, custody and liquidity. They also acknowledge that investors are prone to unethical or illegal practices and, given the relative newness of ICOs, may not understand exactly what they are buying into. ICOs are the latest stage of the so called ‘cryptocurrency’ phenomenon. The best-know example is Bitcoin, which has raised more than a few eyebrows recently. On September 1st, it closed trading US$4,904: not only an all-time high but also because its price was ‘just’ US$2,377 only six weeks earlier; after only breaking through the US$1,000 mark on 2nd February this year. For devotees of Bitcoin, this price action led to calls that it should now be taken seriously as a legitimate currency, little realizing that this actually highlighted the logical fallacy inherent in cryptos: while they can remain hidden and unused (other than as the base currency of the dark web), they’re attractive to holders who’d rather keep their private asset holdings away from prying eyes,

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such as those of governments. But the minute that these cryptos actually come out into the light, their main value as a furtive contract disappears. This is especially the case as they become a visible target on the radars of genuine issuers or purveyors of currency. Jamie Dimon, CEO of JPMorgan Chase, sees the virtual currency as a “fraud”, noting that trading Bitcoin was against his bank’s rules, “stupid” and “far too dangerous.” Other critiques include Howard Marks’ recent view that cryptos are ‘pyramid schemes’, and Ken Rogoff’s warning that cryptos are “fool’s gold” and will burst under government pressure, whilst Warren Buffett has described them as a mirage and Jeffrey Gundlach commented, perhaps not particularly helpfully, that he’d advised his 86-year-old mother to steer well clear. The argument that they’re not currency because there are no coins or notes doesn’t hold water. As economist Hyman Minsky wrote, “Anyone can create money; the problem is to get it accepted.” Nowadays, many goods and services are bought with virtual money, which never becomes hard cash – in most of the world’s largest economies today, cash plays a minor role. It’s estimated, for example, that somewhere between just 3% and 5% of all the money circulating in the UK economy is made up of actual notes and coins and you can actually buy goods with cryptocurrencies now. Download the Bitcoin wallet onto your smartphone, for example, and you can use your crypto to buy food, drink and even clothes by swiping your phone on a reader. If you’re running out, go to a specialist ATM or bureau de change and get some more. One online travel agent accepts Bitcoin to buy flights, holidays etc. and you can also purchase Microsoft products directly from its website. Retailers who already accept cryptocurrency, seem

to like it because it doesn’t carry the transaction costs incurred using cards or even more expensive payment methods like those frequently used for remittances. So, Bitcoin – and potentially other cryptos – are just like Baht, Dollars, Pounds and Euros, right? Well not really, no. To start with, a search of how many businesses accept Bitcoin reveals that in the most crypto-friendly part of Canada – urban Toronto – there are only 45 shops, tellers or ATMs which deal in Bitcoin. In fact, in the whole of Canada there are just 257 Bitcoin ATMs or tellers; although this may even decrease, as the trend is the earliest-adopter countries is for Bitcoin to become an option on a normal cash ATM. The other issue is that, at the moment, verification processes are proving to be too slow to be practicable. In Thailand, there are plenty of people mining Bitcoin (i.e. being paid for validating transactions between two unconnected parties) but there are few places that actually accept it – 23 in the Bangkok area at last count (including an 80-year-old noodle business). In terms of the investment opportunities of cryptos, this is a whole other conundrum. Bitcoins can be bought through unregulated exchanges – the largest of which at that time, Mt. Gox collapsed leaving huge losses for participants – or there are exchange traded vehicles. However, the Winklevoss twins (of Facebook fame) have so far failed to get regulatory approval for their offering, leaving 2 Swedish Exchange Traded Notes, or ETNs, as the standard-bearers. The twins have also failed to manage to actually replicate the performance of Bitcoin, leaving us to wonder how the Swedish offerings, with far less resources, have managed to do so. As ETNs these are really credit instruments or just promises to pay by


Member News the issuer. If we look into them we can see that their eventual guarantor is a Jersey-based company which itself had less than GBP10,000 (less than C$17,000) in its bank account as of its most recent filing in June this year. Yet it appears to have issued over C$500 million of promises to pay investors, a value that is based on the price of Bitcoins, which the wealthy American twins, with seemingly greater resources available, were unable to track. Added to that, Bitcoin and closest rival Ethereum are in no way in as such widespread use as digital transactions of national/regional currencies using bank or credit cards. But these are early days. At the moment, Bitcoin is highly volatile. In 2013, a story came out about Norwegian Kristoffer Koch who, in 2009, had paid NOK150 (around US$24) for 5,000 Bitcoins.1 He completely forgot about them until he heard about Bitcoin in the media in April 2013. By then, his tiny investment was supposedly worth NOK5 million (US$886,000). Koch managed to exchange 1,000 of his Bitcoins 1

into Kroner and bought an apartment in a prosperous part of Oslo. However, if he’d have remembered about his Bitcoin holding at the beginning of that month, he’d have cashed in 41% less; and if he’d have sold two weeks later, he’d have received 61% less. I don’t know what he did with the other 4,000 Bitcoins but if he’d held onto them until the latest peak on 1st September, they’d theoretically be worth US$19,619,600! All that sounds fantastical. In many ways, it is. If national/regional currencies behaved in such a manner, investors would stuff cash under their mattresses until what they thought was the right moment and my job would consist of throwing dice at a craps table. Whilst the downsides to Bitcoin and others may one day fade away, that doesn’t mean that the Blockchain technology they use will. In fact, three countries (Ecuador, Senegal and Tunisia) are already using it for digital currency, and others are studying the possibility as either a currency or payment system for public sector contracts.

Paul Gambles co-founder of MBMG Group MBMG Group is an advisory firm that assists expatriates and locals within the South-East Asia Region with services ranging from Investment Advisory, Personal Advisory, Tax Advisory, Corporate Advisory, Insurance Services, Accounting & Auditing Services, Legal Services, Estate Planning and Property Solutions. For more information: Tel: +66 2665 2536 e-mail: info@mbmg-group.com Linkedin: MBMG Group Twitter: @MBMG_GROUP Facebook: /MBMGGroup

https://www.theguardian.com/technology/2015/dec/09/bitcoin-forgotten-currency-norway-oslo-home

“A better future starts with one person who cares about a better world.” Fran, Grade 10, designed a sustainable building for his personal project.

At KIS International School all students can shine. The midsize, caring community allows KIS students to be confident and to be appreciated as an individual, with unique dreams and strengths. The school is a full IB school, offering the International Baccalaureate Programmes for all age groups (IB Primary Years Programme, IB Middle Years Programme and IB Diploma), ensuring an academically rigorous curriculum that not only prepares students to be successful at university, but also teaches important life skills. KIS, it’s all about Knowledge, Inspiration and Spirit. Check out the students’ videos to learn more about their passion www.kis.ac.th

Tel: +66 (0) 2274 3444 Email: admissions@kis.ac.th

November-December 2017

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HALL OF FAME

PETER VAN HAREN Peter van Haren is a very deserving member of the CanCham Hall of Fame. He has served as CanCham’s president at two different times: first from 1998-2001 and then from 20122015. He is easily one of our most recognized and high-profile members. His resume is quite impressive and includes being the Chairman of the Joint Foreign Chambers of Commerce in Thailand for nine years, Vice-Chairman of the Board of Trade for seven years, Advisor to the International Chamber of Commerce, Advisor to the Ministry of Industry, Advisor to the Thai Trade Representative and Director of the Thai-Finnish Chamber of Commerce. Peter first came to Thailand to work for Com-Link, which built and maintained telecommunication and fiber-optic networks. His job was to coordinate the workforce and materials to get the project finished. He later became CEO of the SET listed company, Wiik & Hoeglund PLC and Executive Vice President of KWH Pipe Ltd. (Finland). Peter’s Thai language skills are so good that he is one of the few foreigners to host a radio show in Thai (FM 96.5). This has given him an insight into Thai culture that few foreigners have. Peter proudly received an Award for Exemplary Use of Thai Language from the Thai Ministry of Culture, rarely given to non-native speakers. Peter is a successful handyman too, as he loves to work in his home wood and metal work shop. Building things, by first putting ideas into a 3d model cad design, then physically seeing them turn into something usable. A native of Sylvan Lake, Alberta, Peter also flies remote-controlled helicopters and drones, which he says is a great way to relieve stress. Peter enjoys teaching part time in the International Trade and Business Logistics (B.B.A) program at the International College at KMUTNB. He’s also a regular course facilitator for the Institute of Directors (IOD). Using his charm, wit and intelligence, Peter has certainly carved a niche for himself in Thailand.

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Our Guiding Statements and values lead us to continuously improve our students’ learning experience at all stages of development.

Our new Early Years learning spaces further enhance the experience of our youngest students through: Even more time to inquire

Even more opportunities for

Even more early years

through play-based,

outdoor learning, creative role

experts inspiring each

experiential learning

play and physical development

child’s learning

with an extended

in our inspiring new facilities

school day

Book a tour to come and see our impressive new learning environments, email admissions@patana.ac.th

Celebrating 60 Years of British International Education

www.patana.ac.th admissions@patana.ac.th Tel: +66 (0) 2785 2200

Bangkok Patana is a not-for-profit, IB World School, accredited by CIS and NEASC

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