December/January 2016/17
Tracy Arno and Pat Pitka help mentor business leaders in Saskatoon as part of the Raj Manek Mentorship Program
Small Business Mentorship The Raj Manek Mentorship Program is one of the most successful of its kind in Canada
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Table of Contents
December/January 2016/17
Featured Articles President’s View Pg. 4 So, how’s the market?
Raj Manek Mentorship Program Pg. 6 Benefiting both mentors and protégés
CanaDragon is connecting business with investors College Drive DQ celebrates 35 years of Fan Food
Pg. 8
Pg. 10
WCBC: Should employers increase salaries? Pg. 12 Saskatchewan Chamber: What does the government’s new “Carbon Pricing” mean? Pg. 16 Image: Grant Romancia Photography.
BUSINESSViewis a publication of the Greater Saskatoon Chamber of Commerce 104-202 4th Avenue North, Saskatoon, SK S7K 0K1 Phone: (306) 244-2151 Fax: (306) 244-8366 Email: chamber@saskatoonchamber.com Website: www.saskatoonchamber.com Twitter: @stoonchamber Feedback on articles is invited, but views expressed in BUSINESS View are those of contributors and are not necessarily endorsed by, or are policy of, the Greater Saskatoon Chamber of Commerce or its Board of Directors. We encourage you to support the business leaders whose names and products you see advertised in this issue as well as throughout our entire membership. The Board reserves the right to edit submissions.
STAFF
Kent Smith-Windsor, Executive Director Derek Crang, Sales & Membership Director Terry Lawrence, Administrator Roz Macala, Executive Secretary Kevin Meldrum, Marketing Director Linda Saunders, Bookkeeper Terri Eger, Events and Communications Co-ordinator Czarina Catambing, Committee Operations Intern Meghan Johnson, Committee Operations Intern
Canadian Publications Mail Agreement No. 40052085 Return Undeliverable Addresses to: Greater Saskatoon Chamber of Commerce 104-202 4th Avenue North, Saskatoon, SK S7K 0K1 Publisher: Kevin Meldrum
Cover Image by Grant Romancia
businessview@saskatoonchamber.com
Advertising Sales: Derek Crang
dcrang@saskatoonchamber.com
Writer: Terri Eger Photographer: Grant Romancia BUSINESS VIEW SASKATOON DECEMBER/JANUARY 2016/17 3
President’s View
So, how’s the market? Real Estate in Saskatoon “So, how’s the market?” As someone who has been involved in commercial and residential real estate for nearly 25 years, I wish I had five bucks for every time I have Jason Yochim been asked this 2016/17 President question. Almost Greater Saskatoon without exception, Chamber of Commerce at every function I’m at, whether business or personal, as soon as someone finds out what I do, they will ask, “So how is the market anyway?” The truth is that real estate is a common link to all of us whether we rent, own a home or invest in commercial property. Changes in the market affect us all. So, with the answer to that question, I would like to touch on two points, statistical and philosophical. As of the end of October, the Saskatoon residential market had 3,249 sales. This represented a 6% decrease from 2015 and a 19% reduction from 2014. Inventory levels, the number of active listings, was sitting at 1,745 units, an 11% decrease from last year. Of the properties that have been selling, they have been realizing a sale
price of nearly 97% of the asking price. This would tell me that if you want your property to sell it is crucial that you know the market value and price accordingly. There are always buyers in the market willing to pay a fair market price. To support this point, with 550 condo units on the market and 1,000 under construction, the River Landing Condo project recently sold out of 100 units in 4 days. Permits for single family starts were up 22% year over year as of the end of September while permits for multi-family starts were down 58% for the same period compared to 2015. On the commercial side of things at the end of the third quarter, inventory levels for industrial space was up over 2015 with over 22.5M square feet available. Vacancy rates reached 8.65% with a slowdown in absorption. In office space in the central business district, vacancy rates are around 15% with an absorption rate of -5%. In spite of these statistics, it was a positive sign to see the recent sale of the former police station in the heart of the downtown showing the confidence of an investor in the face of a soft office market. A significant contributor to the downtown office vacancy was a relocation trend to suburban office space which provided competitive rent, new space and more parking. Vacancy rates for
suburban office space plateaued at just over 15% in 2015. At the same time the rate of new supply units dropped off significantly as did the rate of absorption. In spite of tough economic times and low commodity prices, the Saskatoon business community continues to be strong and is weathering the storm better than many other western Canadian cities. We have a very diverse economy, a solid work ethic and entrepreneurial spirit that has enabled Saskatchewan residents to come through tougher challenges than this. I personally believe that at the foundation of our success is a positive attitude that fuels creativity, opportunity and the belief that if success can happen anywhere, it can happen here. We may still have some tough days ahead but I believe that our best is yet to come. We will create our successes by preparing and positioning ourselves in the market so that when opportunity arrives we will be ready to take advantage of it. Jason Yochim, President 2016/17 Greater Saskatoon Chamber of Commerce CEO Saskatoon Region Association of REALTORS®
2016-17 Board of Directors for the Greater Saskatoon Chamber of Commerce President Jason Yochim - Saskatoon Region Association of REALTORS®. 1st Vice-President Kelly Bode - WMCZ Lawyers & Mediators. 2nd Vice-President, Finance Peggie Koenig - Koenig & Associates. Past President Tanya Knight - MNP LLP Chair, Governance Bill Cooper - PotashCorp. Paul Labbe - Stantec Inc. Silvia Martini - Interlink Research Inc. Linda Mason - PCL Construction Management Ltd. Deborah Meyers - Saskatchewan Polytechnic. Karl Miller - Meridian Development. Sandra Ribeiro - Canadian Light Source Inc. Chris Sicotte - Affinity Credit Union. Sanj Singh - Lighthouse Management Co. Brian Skanderbeg -GFG Resources Inc. Trevor Thiessen - Redekop Manufacturing. Chris Woodland - MacPherson, Leslie and Tyerman LLP.
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BUSINESS VIEW SASKATOON DECEMBER/JANUARY 2016/17
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Tracy Arno and Pat Pitka are mentors in the Raj Manek Mentorship Program. Image by Grant Romancia.
The Raj Manek Mentorship Program Benefiting both mentors and protégés By Terri Eger
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Cover Story
There is nothing more valuable than advice based on experience. Whether in life or in business, a mentor can be a valuable asset. Since its inception in 1998, the Raj Manek Mentorship Program has been linking entrepreneurs with established individuals in the business community. The program was originally developed by the late Raj Manek and has been carried on by his wife Kanchan and a Board of Directors. In partnership with the Greater Saskatoon Chamber of Commerce, the organization introduces individuals who are new to the business community with people who have learned from their own experiences. Over the years, the program has developed approximately 400 mentorship matches. “Protégés are asked to fill out an application form where they are asked about the areas of their business in which they require help and about what they want to learn from their mentors,” explained Manek. Together with the assistance of Kent Smith-Windsor, Executive Director of the Greater Saskatoon Chamber of Commerce, mentors and protégés are paired up. These individuals are not from related industries and thus are not meant to be competitors, but will still add value to the relationship based on their experience and knowledge. “Matching protégés and mentors is an art, not a science,” said Smith-Windsor. The time and attention used to create the matches is a key to the program’s success according to Tracy Arno of Essence Recruitment. Arno has been involved with other mentorship programs in the past but feels that the Raj Manek Program is the strongest. “The work they put into creating a good fit between the mentor and protégé is the key to the success of the program,” she said. “They make sure there is a good chemistry between the pair and
link you with someone who can help give you value.” As a protégé, Arno said it’s important to be prepared for the program. She recommends creating a list of items you want to learn so that you have a starting point to work from with your mentor. “You need to know what you’re looking for and what you want to get out of the program, then you develop a plan with your mentor that is tailored to your needs,” she said. Arno explained that the structure of the program and the additional events and seminars hosted by Raj Manek added value for her. Information on investments, human resource issues and other relevant topics helped her develop a successful plan for her business. After her time as a protégé, Arno moved into the ranks of mentor. “It’s really been amazing. You learn as much from them as they learn from you,” she said. “Being a mentor has given me an opportunity to give back and help others in the way people have helped me.” Wayne Zuk, a real estate broker with Realty Executives, first joined the program more than 10 years ago as a protégé and has since acted as a
mentor to several new business people, including Arno. “It’s really a fabulous program,” said Zuk. “As someone starting out in business you have zero experience. Common sense mentoring gives you invaluable information. It’s really a grassroots opportunity to learning.” Newcomers to the business world have a long list of questions but finding the answers is no easy task. Zuk points out that mentors have asked those same questions and can share information from their own experience with their protégé. “Where else are you supposed to get that information?” questions Zuk. “The Raj Manek Program really fills that void.” While the value to the opportunity for protégés is clear, Zuk stresses that the benefits to mentors is also extensive. “In being a mentor you are reminded of what good business practise are,” he said. “You share information and in that sharing you want to make sure you’re following that same advice.” Pat Pitka echoes these sentiments. A Chartered Professional Accountant by Continued on Page 9...
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Business News
CanaDragon is connecting business with investors by Terri Eger
Businesses with an appetite to grow and investors looking for opportunities are being connected by CanaDragon. Thanks to new legislation passed by the Provincial Government, investing in local companies just got easier and CanaDragon is the place to start. CanaDragon COO James Kernaghan explained that the crowdfunding operation is geared at helping businesses with fewer than 15 people. When these small businesses are looking for ways to expand the options are limited. “Grant funding comes with some weird attachments,” he said. “A business may be eligible for grant funding but once they hit a certain threshold that grant suddenly becomes a loan that needs to be paid off right away. The bank will offer a loan but what are you going to use as collateral when you’re just getting started? Then there is the option of going to friends and family but that can get awkward very quickly.” That’s where CanaDragon comes in. By linking individual investors with business opportunities, CanaDragon can help
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new and growing businesses reach their full potential. Through a crowdfunding model, CanaDragon can link multiple investors each contributing a small amount of money to new opportunities. Through a minimum investment of $100 to a maximum investment of $1500, the individual is able to purchase shares in the growing company. Prior to the new legislation, investing needed to be done through a broker and opportunities for individuals were limited. Now, through CanaDragon, individuals in Saskatchewan, Manitoba, British Columbia, Quebec, New Brunswick and Nova Scotia can make investments in companies looking to grow in any of these provinces. “We bring Bay Street to Main Street,” said Kernaghan. The model has been very successful in Europe under the name Crown Cube. “We know it’s a risky investment but the low dollar amount keeps that risk in check by spreading it between multiple investors,” he said. Each campaign, or raise, is limited to a maximum 90-day timeframe and a cap of $250,000 request. Should the raise not bring in the specified minimum funding, all investments are returned to the investors. There is no fee for investors to buy shares
in the companies. Businesses signing up with the program are required to be registered companies with corporate accounting systems and corporate lawyers in place. Companies have to pay fees to CanaDragon up front, register extensive paperwork and complete a video for potential investors. “There is a bit of work that companies have to go through before they can set up the raise,” said Kernaghan. The CanaDragon model is a great fit for anyone wanting to help out a small company or for a business looking to grow. The company gives individuals the opportunity to invest in new ideas and products with the potential to turn their investments into high returns. “CanaDragon gives you the opportunity to help little companies become big companies. You get a sense of ownership and the pride in knowing you’ve helped a business succeed,” said Kernaghan. “CanaDragon lets you unleash your inner dragon.” CanaDragon 1103-201 1st Ave S, Saskatoon Phone: (306) 941-1305 jamesk@canadragon.ca www.exfex.ca
RAJ MANEK MENTORSHIP PROGRAM Continued from Page 7... trade, Pitka has mentored more than five individuals over the past 15 years. He estimates that he connects with his protégé between six and nine times a year, making himself available to them when needed. He has been able to use his own professional abilities to assist new business people in a wide range of areas. Whether drafting a letter of offer to their first employee or helping them set up a marketing program, he’s been able to give them assistance. “It’s really about guiding them in the fundamentals of running a business,” said Pitka. In addition, the program offers an opportunity for those involved to expand their business network. Today he sits on a board of directors with one of his former protégés who is now a successful member of the business community. “When a protégé becomes a mentor you know it’s a successful program and that they’ve become successful in
business,” he said. Pitka reiterated that the program has benefits for both parties involved. “I highly recommend the program to others,” he said. “Mentors learn as much as the protégés. When you’re giving advice you want to make sure it’s sound advice and you want to follow it yourself.” The Raj Manek Program has extensive ties throughout the business community and attracts new members through various agencies. The cost for protégés to participate for one year is $301. For this fee, they receive one-on-one mentoring for a full year from their mentor, peer-to-peer mentoring, networking opportunities, monthly seminars, advice in each area of their business through an on-line toolkit and access to various software programs. There is no charge for mentors to participate. “The program promotes the financial health of protégé businesses,” said Manek.
“Through a package of reporting on each protégé’s financial outlook, the program will enable participants to make tactile decisions for growth. Benefits include bench-marking progress against industry peers, scenario planning and business health check-ups. The analysis helps users determine which parts of their businesses are showing progress and where to allocate resources for optimal business operation.” The Annual Raj Manek Banquet (presented by PotashCorp) will be held on Thursday, February 23rd, 2017, at 5:30 pm at Prairieland Park, featuring Steven Woods, Engineering Director of Google Canada. The banquet will be honouring the 2017 “Above & Beyond Award” winner. For banquet tickets or to become involved with the Raj Manek Program visit www.manekmentorship.sk.ca
BUSINESS VIEW SASKATOON DECEMBER/JANUARY 2016/17 9
Member News
College Drive DQ celebrates 35 years of Fan Food The College Drive Dairy Queen story began in 1983 when Terry and Mary Lea Malin pursued a location across from the University of Saskatchewan to open their first restaurant. After selling their hotel in Kelliher, Saskatchewan, they moved back to Saskatoon with their five children, Jane, Geoff, Gill, Greg and Chris to build their new business. Their new DQ opened on a freezing January day in 1984 and has been serving Saskatoon for 35 years. Many great memories have been created through those bright red doors. Because of its close proximity to the University of Saskatchewan, The Field House, and Griffith’s Stadium, the DQ
DQ on College Drive (supplied photo).
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Terry and Mary Lea Malin have owned the DQ on College Drive in Saskatoon for 35 years (supplied photo).
has been a mainstay for elementary, high school and university sport days. One of the biggest events to to hit the store was the 1989 Jeux Canada Games. The lineups were extensive for 10 days straight, serving athletes from dawn ‘til dusk. The red doors stayed open past midnight during the event to make sure the needs of the athletes and fans were met. This DQ has been privileged to have many special guests visit the franchise. Two of the most prominent were the Grey Cup and the Stanley Cup. After the Riders came back to Saskatoon for training camp, the Malin family and DQ staff befriended many of the coaching staff. The relationship became very close and after the Riders won the Championship in 2013, they were honoured with a private visit from the team and even got the chance to build a blizzard in the historic Grey Cup!
Another exciting moment was a surprise visit from Mike Babcock of the Detroit Redwings in 2005, with the Stanley Cup in hand! After touring the U of S campus with the prestigious trophy, Mr. Babcock stopped in for a treat and a visit (and of course some photos). The College Drive DQ has made a significant impact in our community. They raise funds yearround and host Miracle Treat Day every August, all in support of our local Children’s Hospital. Celebrating the 2013 To date, Grey Cup championship the College (supplied photo). Drive DQ has contributed more than $35,000 toward this worthy cause. Terry and Mary Lea expanded their DQ business in 2012 with the purchase and opening of the new Blairmore location, which has raised an additional $12,000 for the Children’s Hospital. The College Drive DQ has created many great memories and shared in the moments of many peoples’ lives in Saskatoon. The Malins are so grateful to all those who have been part of the restaurant, from the hundreds of staff who have contributed to its success to all the loyal fans and friends who have made every day a blessing and an opportunity for gratitude. They look forward to many more years of providing DQ fans with smiles and stories and contributing in their own unique way to the exceptional community that exists in the City of Saskatoon.
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WCBC
Should employers increase salaries? By Western Compensation and Benefits Consultants
Barry Cook Western Compensation and Benefits Consultants
Nine out of ten Canadian employers review salaries and implement any appropriate adjustments on an annual basis. A majority of these employers administer the reviews and make adjustments in the first three months of the calendar year. These are some of the findings contained in a survey recently released by Western Compensation & Benefits Consultants. Barry Cook, a partner with the Firm, provided some insight regarding the survey findings, along with some suggestions for employers. Nationally, employers are planning to increase their salaries by 2.0% to 2.5%, but Cook advised that “the increase varies by employee level/type of position, geographic region and industry. Management/Supervisory and Professional/Technical positions continue to pose the biggest attraction and retention challenges and hence, will be receiving larger increases. Employees in some industries such as professional services, finance and insurance will be
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receiving higher raises while increases in the public sector will be lower.” Employers need to retain their existing employees and be capable of recruiting new talent. At the same time, employees are pre-conditioned to the notion of annual salary increases. Recognizing these important realities, employers are challenged with taking the most appropriate initiatives. A small minority of employers annually implement “costof-living” increases, which may result in all employees receiving a raise which is tied to the increase in the Consumer Price Index. Although this approach is simple and may seem “fair,” Cook cautions that it may not be appropriate for the following reasons: 1. Salaries at wrong level The employer’s salaries may have not been at the right level (i.e. too low or too high) compared to the market before the increase was awarded. Providing egalitarian salary increases will not solve this problem. 2. Using the wrong ruler From a competitive perspective, employers should be basing their salary increases on what other relevant employers are doing with their salaries. The CPI increases do not provide this needed information. 3. Increases should be tailored to individuals Some employees should receive increases which are higher than those awarded to the typical employee. This could include: (a) employees recently promoted into his or her position and who are “ramping up” towards full competency and the corresponding fully competitive
market salary for the position; and (b) employees who have outstanding performance. By the same token, there could be employees who should receive increases less than the typical employee because of job performance issues. So what should an employer do? Cook advises that employers which are following good compensation governance practices periodically obtain compensation surveys and compare their salary levels (as well as other components of compensation) to that paid to comparable positions by employers which compete with them for employees. This may reveal that the employer’s salary levels for some positions are competitive while other salaries are less competitive. Whatever the outcome of the market comparisons, the data will provide the employer with the information needed to make appropriate salary decisions. In the case of employers which have very recently compared their salary levels to the market as described above it may only be necessary to obtain information regarding the magnitude of salary changes planned or already implemented by competing employers. This data should allow an employer to keep its salaries at a relatively competitive position in those years when compensation surveys are not used to evaluate market competitiveness. Compensation research reports recently released by WCBC contain a wealth of information to assist employers in their compensation and benefits planning. Over 500 organizations contributed data regarding employer policies and the compensation paid to over 400 positions. Greater Saskatoon Chamber of Commerce members are eligible to receive a 15% discount.
FULL COLOUR
d n a s es in s u B te a r eb An Evening to Cel n o to a k s a S in s es c c u S y Communit
BUSINESS VIEW SASKATOON DECEMBER/JANUARY 2016/17 13
SREDA
Science, Technology, Innovation and Collaboration Awards celebrated The Saskatoon Regional Economic Development Authority (SREDA) honoured businesses and individuals at the first annual Science, Technology, Innovation and Collaboration (STIC) Awards, which was celebrated in Saskatoon on November 16 at Louis Loft. “The STIC Awards was a celebration of the outstanding people in our science and technology cluster and the pioneering projects and products being created right here in the Saskatoon Region,” said Alex Fallon, President and CEO of SREDA. “These innovations add value to the local economy by creating jobs, wealth and knowledge, and positioning the Saskatoon Region as a global competitor. The caliber of the 2016 STIC finalists and winners clearly demonstrates the Saskatoon Region is a hub for science and technology innovations.” The 2016 STIC Award winners are: PROJECT AWARD – Development of a vaccine for Porcine Epidemic Diarrhea virus: Vaccine and Infectious Disease Organization – International Vaccine Centre (VIDO-InterVac), University of Saskatchewan In less than a year, University of Saskatchewan scientists have developed and tested a prototype vaccine that could protect the North American swine industry from a virus that has killed more than eight million pigs and costs more than $400 million in lost income since 2013. PRODUCT AWARD – Variation Designer: Solido Design Automation Solido’s software enables the creation of electronic chips with optimal performance (to improve chip speed), power (to improve battery life), area (to reduce chip size) and yield (to reduce chip manufacturing cost).
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Solido’s software is faster, more accurate, and more scalable than its competitors based in USA, Germany and China. TEAM AWARD – Natural Resource Technology Program: Saskatchewan Polytechnic Saskatchewan Polytechnic’s Natural Resource Technology (NRT) Program has been training fish and wildlife technicians, foresters and conservation officers since the early 1960’s. The success of this program, is due to a willingness among faculty to embrace new technologies while never losing sight of the organic field experience that is integral to resource stewardship. STIC AMBASSADOR AWARD – Dale Lemke Mr. Lemke has an extensive career in the science and technology sectors and has spent countless hours volunteering his time to help young entrepreneurs and new companies
start and succeed in Saskatoon. Mr. Lemke’s career began in the Aviation Department of UND where he wrote computer programs to analyze radar weather data to determine the results of cloud seeding programs in the prevention of hailstorms. Since then he has started and helped create numerous companies and organizations in the science and technology sectors, including multiple Computerland stores, Display Systems International (DSI), Terminal Systems International, SAINT, Saskatchewan Capital Network and the Saskatchewan Advanced Technology Association. Today, Mr. Lemke spends most of his time mentoring young entrepreneurs in Saskatoon. He participates on numerous boards and is involved in mentorship programs such as the Entrepreneur in Residence program at the University of Saskatchewan, the Summer Youth Internship Program (SYIP) and the Raj Manek Mentorship Program. On top of this, Dale and DSI provide free start-up incubator space and services to support and mentor young entrepreneurs in the development of their business. The finalists and winners were chosen by the STIC Selection Committee. This committee consists of local industry, government and academia stakeholders. “The STIC Awards was one of many successful new initiatives for SREDA in 2016. The purpose of this initiative was to shine a light on the innovations being created in our science and technology sectors and the importance of this sector to our local economy. As these sectors continue to grow we are looking forward to showcasing them at this annual event.” For more information on SREDA, visit SREDA.com
5 Minutes for Business Keep Calm and Climate On
November 22, 2016
By: Katrina Marsh our Director of Natural Resources & Environmental Policy The fight against climate change had what we in the biz like to call “momentum.” Countries agreed to limit rising temperatures in the UN’s 2015 Paris Agreement. Two other deals were struck to check emissions in the aviation sector and to away from HFCs—a potent greenhouse gas. The world was on a roll! This undoubtedly pleased the Prime Minister, who champions action on climate change both at home and abroad. But political climates can change even faster than global ones and some cold winds are blowing on Canada now. President-elect Trump will transform the U.S. from a driver of international momentum on climate to a roadblock. He will pull out of the Paris Agreement, and in the meantime will ignore commitments made under the UN’s “gentlemen’s agreement” style of lawmaking. The U.S.’s domestic climate policy depends on regulation, much of it administered by the Environmental Protection Agency (EPA). The President-elect has stated that he will seek to weaken or remove its powers to regulate emissions from power plants, the oil and gas industry and vehicles. So far, Prime Minister Trudeau’s response has been to keep calm and carry on, with no announcements to change direction. He will need to consider how best to react to the threats and opportunities (both exist) inherent in this American change of heart.
Canada’s oil and gas sector will benefit from the resurrection of the Keystone XL pipeline. However, if the U.S. reneges on a plan to jointly cut emissions from the industry, Canada’s competitiveness could suffer if we don’t pull back as well. The loss of the Clean Power Plan, which would move the U.S. power grid off coal, would be a blow to Canada’s hydroelectricity producers. They were set to triple exports as demand for clean electricity grew. The case for federal carbon pricing, the centre of the Prime Minister’s strategy, has changed less than you might think. The unexpected arrival of Presidentelect Trump does not change the fact the U.S. was never going to impose a carbon price. Still, provinces accounting for 80% of Canada’s GDP are moving forward with a price on carbon. Canada needs a plan to ensure that uncoordinated policies do not erode competitiveness. Alignment with the U.S. was Canada’s best chance to avoid any economic fallout from strong climate policies. Avoiding the worst case scenario of shifting emissions and investment out of Canada will mean keeping as close an eye on the policy climate as on the global one.
For more information, please contact: Katrina Marsh Director, Natural Resource and Environment Policy 613.238.4000 (223) | kmarsh@chamber.ca
Policy News
What does the government’s new “Carbon Pricing” mean?
An excerpt of the full policy backgrounder paper by the Saskatchewan Chamber of Commerce
Introduction
The Government of Canada announced a pan-Canadian carbon pricing plan on October 3, 2016. The plan proposes a $10-per-tonne price on carbon beginning in 2018, with the price indexed to increase by $10 per tonne each year until 2022, when it would cap at $50. According to the government, the new tax will be revenue neutral for the federal government, with funds collected from each province remaining in that province. It is important to note that being revenue neutral from the federal government’s, or even the provincial government’s, perspective does not mean revenue neutral for those who are directly taxed. The Canadian government has committed to reducing greenhouse gas emissions by 30% from 2005 levels by 2030. The achievement of this goal, and an overall desire to curb the effects of climate change, have been given as justification for the introduction of this tax. In 2014, Canada's total greenhouse gas emissions were 732 megatonnes (Mt) of carbon dioxide equivalent (CO2 eq), down slightly from 747Mt in 2005. The oil and gas sector accounts for 26% of total national emissions, the transportation sector (including passenger and freight travel) accounts for 23%, while other economic sectors (i.e., electricity, buildings, emissionsintensive and trade-exposed industries, agriculture, waste and others), each accounted for between 7% and 12% of total greenhouse gas (GHG) emissions. Canada only represents approximately 1.6% of total global GHG emissions in 2012, but it is one of the highest per
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capita emitters. Although the federal government’s plan is new, carbon pricing regimes in Canada are not. British Columbia has had a carbon tax since 2008 and Quebec’s cap and trade system has been operating since 2013. In addition to this, Alberta has plans in place to launch its carbon tax on January 1, 2017, the same day Ontario’s cap and trade system starts. In recognition of the existing regimes, the federal government has given the provinces two means through which the federally mandated price can be applied: a carbon tax or cap-and-trade system. However, any province that does not institute its own regime will be subject to the federal regime. Taxing carbon will add a significant financial burden on Canadian businesses and residents, particularly in the coal reliant province of Saskatchewan. Additionally, it will place Canadian firms at a disadvantage when operating against competition in global jurisdictions with no carbon price. Complexities can be added to the carbon pricing system to address some of the concerns for the country’s most trade-exposed firms, but administrative costs, wealth redistribution, and increased operating costs will remain features of the post2018 carbon taxed economy.
Background As noted above, British Columbia and Alberta already have a carbon tax structure established for their provinces, while Quebec and Ontario have established cap and trade regimes. Below is an overview of what these systems look like within Canada.
What is a Carbon Tax? A carbon tax is a tax based on greenhouse gas emissions generated from burning fuels. It puts a price on each tonne of GHG emitted. The purpose of the tax is to motivate businesses to reduce their emissions as a way to reduce their costs. It has the advantage of providing an incentive without favouring any one way of reducing emissions over another. Carbon taxes can be structured to be revenue neutral for governments (i.e. all the tax revenue they take in can be redistributed back out to the population); however, carbon taxes are not revenue neutral in terms of impact on individual taxpayers.
What is a Cap-and-Trade system? A cap-and-trade system consists of two main components. First, the government sets a cap, or maximum limit, on the amount of GHGs that can be released by emitters (the cap is typically reduced annually). Second, the system provides a mechanism by which emitters can trade the ability to emit GHGs. Trading is made possible through the creation of emissions allowances. The government creates and distributes emission allowances. Emissions allowances are typically allocated in two ways: for free or by auction. Allowances distributed to certain emitters for free reduce the cost of compliance for those emitters, while allowances allocated through auctions are the primary mechanism by which revenue is generated. As the cap decreases each year, it forces emitters to further reduce emissions or buy unused quota from other companies. This creates Continued on Next Page ...
Policy News Continued from Previous Page ...
an incentive for firms to reduce their emissions and be able to sell rather than buy emission allowances. In most cap and trade systems, emitters are allowed to purchase offset credits to make up a certain proportion of their emission allowances. Offset credits represent emissions reductions achieved through actions external to activities regulated under the cap and trade system. The Western Climate Initiative, Inc. (WCI, Inc.) is a non-profit corporation that provides administrative and technical services to support the implementation of state and provincial greenhouse gas emissions trading programs. Currently California, Ontario, and Quebec are members of the WCI. The cross-border cap-and-trade market available through the WCI allows the Canadian market access to low-price emission credits that will keep costs down while Ontario and Quebec work to achieve aggressive greenhouse gas reduction targets.
Federal Plan As noted above, the pan-Canadian carbon pricing plan will implement a $10 per tonne price on carbon beginning in 2018, with the price indexed to increase by $10 per tonne each year until 2022, when it would cap at $50. According to the government, the new tax will be revenue neutral for the federal government,
with funds collected from each province remaining in that province. In Saskatchewan, “the province is estimating the federal plan will cost the average family $1,250 a year when fully implemented, while farm families will pay about $10,000 and some large farms could pay closer to $100,000. For the oil and gas sector, the province says it will cost more than $700 million. For the electricity sector, more than $750 million.” Nevertheless, the true financial impact of the carbon price will depend upon the structure of the system the province chooses to implement. Regardless of Saskatchewan’s position and the implementation determinations the province makes, there are some core elements of a national carbon pricing plan that the federal government expects. Firstly, the federal government will require each province to participate; secondly, the federal government wants about 70% of emissions covered by the system; finally, the federal government wants the systems to be revenue neutral federally.
decade. Saskatchewan specifically has made and continues to make important contributions toward the reduction of greenhouse gases both locally and globally by developing innovative made-in-Saskatchewan solutions in areas like power, agriculture, and more. It is unfortunate that the federal government’s decision to implement mandatory carbon pricing does not do more to facilitate these innovations that can help the global community; after all, Canada produces less than two percent of global greenhouse gas emissions, the impact of a tax here will have no impact on total global emissions. Nevertheless, the Saskatchewan Chamber of Commerce recognizes the federal government has the ability to implement mandatory carbon pricing, and since many Canadian provinces already have a plan in place to implement their systems, it is now Saskatchewan’s turn to determine what it can do to generate real emission improvements as opposed to simply meeting an artificially mandated program’s targets.
Conclusion:
This has been an excerpt of the full paper. For the complete work, including specific details on the provincial structures, visit http://www. saskchamber.com.
Most businesses consider the protection of the environment a core principle of a sustainable economy and, as such, have continued to improve their environmental performance over the last
BUSINESS VIEW SASKATOON DECEMBER/JANUARY 2016/17 17
From the Staff, Board, and Volunteers of the Greater Saskatoon Chamber of Commerce
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MEMBERS PAGE COMMITTEE CHAIRS
Agribusiness Opportunities Bert Sutherland - Rayacom Print & Design
Loran Forer - BMO Business Growth Mark Zielke - StartFreshMedia.com Business of Science & Technology Bill Lewis - Engineering for Kids Sandra Ribeiro - Canadian Light Source Business of Science & Technology ICT Subcommittee Allan Wolinski - Vendasta Technologies
The Chamber’s monthly free networking events, Chamber on Tap and Shaken with a Twist, as well as our health-industry focused H.O.T 4.16 are free for members to attend. Shaken with a Twist is the second Thursday of the month at Village Guitar and Amp, sponsored by Trusted Marketing Services and BDC, and co-presented by Women Entrepreneurs of Saskatchewan. Chamber on Tap is the first Wednesday of the month at LB Distillers, and is sponsored by Aurora Workplace Solutions, Sutton Financial Group, and Edwards School of Business. Sound is provided by Soundlounge
by tBone. The newest networking event, HOT 416, sponsored by Wiegers Financial & Benefits, explores what’s new and hot in the healthcare innovation and technology sector, and is hosted at Rock Creek Stonebridge on the third Wednesday of the month. The next event is January 18th. Join us for fun, networking and a great guest speaker at these Chamber events each month! Visit www.saskatoonchamber.com/events for information on all our upcoming events. “On Tap” and “Shaken with a Twist” photos below are courtesy of Grant Romancia Photography.
Chamber on Tap Evan Drisner - Nu-Fab Building Products First Nations and Métis Opportunities Committee
Bert Sutherland - Rayacom Print & Design
Future Opportunities Committee
Bill Brooks - Eclecthink International Going Global Ken Ziegler - Robertson Stromberg LLP Monica Kreuger - Global Infobrokers Government Affairs Michael Chudoba - Foundation Realty Ltd
Health Opportunities Sanj Singh - Lighthouse Management Inc.
Shawna Nelson interviews the newly elected female city councillors at Shaken with a Twist
SABEX Awards Lynn Eberle - Great Western Brewing Co. Jess Tetu - Just For You Day Spa Shaken with a Twist Shawna Nelson - Sheraton Cavalier Sustainability Opportunities Colleen Yates - Equinox3 Consulting Ltd.
To get involved or to join a volunteer committee email us for more information at: committee@saskatoonchamber.com Evan Drisner with the Kurtis Labrash of Labrash Mechanical at Chamber on Tap 22
BUSINESS VIEW SASKATOON DECEMBER/JANUARY 2016/17
For membership information contact Derek Crang (306) 664-0702 dcrang@saskatoonchamber.com Visit saskatoonchamber.com today 814258596 SK 0001 Consultants - Business Phone: (306) 715-4664 George Leith ADMIN GAP, THE Consultants - Employment / Training 1000-201 21st St E, Saskatoon Phone: (306) 713-4303 Linda Yip Big Bang Hair Salon Hair Stylists 130-1844 McOrmand Dr N, Saskatoon Phone: (306) 955-2264 Alex Friesen Bison Road Construction Services Concrete Products / Supplies Phone: (306) 220-9886 J.M. Joubert Black Mesa Wellsite Consulting Ltd. Consultants 163 Schumacher Bay, Saskatoon Phone: (306) 716-1420 Geoff Gerow Crossmount Homes Ltd. Construction 204-3929 8th St E, Saskatoon Phone: (306) 374-9855 Bradley Redman Crystal Life Designs Business Services AND Advertising Specialties / Sportswear 639 Main St, Saskatoon Phone: (306) 683-0116 Randi Senger D Stein Construction Construction Phone: (306) 249-4872 Darrell Stein Discovery Seed Labs Agricultural 450 Melville St, Saskatoon Phone: (306) 249-4484 Jason Danielson Furry Friends Animal Hospital Veterinarians / Animal Services 9-110 Wedge Rd, Saskatoon Phone: (306) 934-8387 Dave Nairn Harris Leadership Strategies Consultants 426 Brabant Terr, Saskatoon Phone: (306) 371-1808 Kim Poley
Welcome New Members
KCB Developments Ltd. Home Builders / Renovations 2415 Dudley St, Saskatoon Phone: (306) 292-6054 Cindy LaBrash MacMat Education Services Education / Training General Delivery, Dundurn Phone: (306) 261-7781 Jane Macleod Mako Signs
Signs AND Automobile - Other Vehicle Services
3027G Millar Ave, Saskatoon Phone: (306) 270-0905 Craig Maximum Poly Inc. Construction 507 Gray Ave, Saskatoon Phone: (306) 975-9659 Wayne Renas MSCCS Consulting Inc. Consultants - Engineering 143 Quill Bay, Saskatoon Phone: (306) 370-7917 Fern Chabot
Oxygen Technical Services Ltd. (Saskatoon) Consultants - Computer 3030 Louise St, Saskatoon Phone: (306) 367-8554 Suz Galloway Paull Chiropractic and Massage Therapy Health Care - Services / Supplies 1647 29th St W, Saskatoon Phone: (306) 653-1325 Amber Kubashek PotashCorp Children’s Festival Entertainment / Attractions AND Non-Profit Organizations 710-601 Spadina Cres E, Saskatoon Phone: (306) 664-3378 Rachel Wormsbecher Prarie MEDICALAB Mobile Lab Services Health Care - Services / Supplies 103-115 2nd Ave N, Saskatoon Phone: (306) 700-3001 Shea Armstrong Queen Street Pharmacy Pharmacies 103 610 Queen St, Saskatoon Phone: (306) 242-3919 Gary Berg
Saskatchewan Brain Injury Association Non-Profit Organizations 230 Avenue R S, SPH C-Wing Room 422, Saskatoon Phone: (888) 373-1555 Glenda James Saskatoon Opera Non-Profit Organizations AND Entertainment / Attractions PO Box 25114 RPO River Heights, Saskatoon Phone: (306) 374-1630 Karen Reynaud Saskatoon School of Horticulture Education / Training 1021 Saskatchewan Cres W, Saskatoon Phone: (306) 931-4769 Patricia Hanbidge Saskatoon Sexual Assault & Information Centre Non-Profit Organizations 201-506 25th St E, Saskatoon Phone: (306) 244-2294 Heather Pocock unINK Internet Marketing Corp. Marketing / Market Research AND Consultants - Computer 107-220 20th St W, Saskatoon Phone: (306) 270-4715 Dustin Ratzlaff UrbanSpice Restaurant Restaurants 50-622 Circle Dr E, Saskatoon Phone: (306) 954-7742 Jyubeen Kacha Virtex Grain Exchange Ltd. Agricultural AND Food Processors / Distributors Comp 2 Site 404 RR 4, Saskatoon Phone: (306) 651-4680 Rick Pender Wurtz Industries Ltd. Construction Phone: (639) 317-7923 Jason Wurtz Zap Creative Graphic Design Phone: (306) 261-8351 Hannah Wheeler
BUSINESS VIEW SASKATOON DECEMBER/JANUARY 2016/17 23
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