This summer is proving to be both a boon and a challenge to companies that make money from hot weather, as well as paying the price for higher energy bills.
Sales are predictably up in the obvious heat-wave staples - ice, ice cream and air conditioners - but growth and profits are also being hindered by rising energy costs and, in some regions, a tight labour market.
"This is a continental heat wave," says David Phillips, a senior climatologist with Environment Canada who is considered the country's foremost weather expert. "Clearly the United States is going through some record warm temperatures as well."
Environment Canada says eastern parts of the country are hot and are likely to stay hot this summer, but they're still not getting scorched like last year. In Canada's western provinces, the heat is on after a somewhat cooler season last summer.
"It looks like it will be warmer than normal all across Canada for the months of August and September," says Phillips.
The number of days where the mercury has reached or surpassed 30°C so far is on the rise in cities such as Regina, Saskatoon, Edmonton and Kelowna.
Up to and including July 25, Regina had 11 days of 30°C. Last year in the same period, it had four. In Saskatoon, there have been nine days with temperatures of 30°C or higher over the same period, while last year there was one, says Phillips.
"There were no days in Edmonton when the temperature was above 30 last year, whereas Edmonton has had five in July (up to July 25), one in June and one in May. Edmonton normally gets three days above 30 a year. Already, they've had more than twice the hot days they'd normally get," Phillips notes.
Toronto is about two degrees warmer than normal this year, but that's down from the 3.5 degrees above normal last year, which Phillips called the hottest, dirtiest and sweatiest summer on record for southern Ontario and southern Quebec.
And in many cities, such as Winnipeg and Calgary, things are only going to get hotter over the next few decades, says Phillips.
"This is the new reality. This is an anomaly now, but it won't be in the years to come," he adds. "Canada is clearly warmer now, particularly in the west."
However some Canadian businesses - particularly those in tourism-related industries - aren't sweating the prediction too much.
Stan Martindale, president of the Kelowna Hotel Motel Association, says if it doesn't get too hot for too long, traditional tourism hotspots shouldn't be affected.
"Usually the norm is that we get a spike into the high 30s that lasts for a day or two and then stops," says Martindale. "If it's a prolonged heat wave, for the first few days it would be a novelty but if it drags on people would tailor their activities."
That could mean increased business for the nearby Orchard Park Shopping Centre, now undergoing a $22-million redevelopment and the addition of 20 retailers.
Martindale notes too-hot weather could also boost occupancy in air-conditioned hotel and motel rooms - but could also spell less people on the golf courses.
Blue skies and hot sun are also good news for ice-cream distributor Hank van Dinther, president of Calgary-based H&P Distributors Ltd.
"With a hot July, we will move as much this month as for the winter months combined," says van Dinther, whose company distributes Good Humor Breyers and Ben & Jerry's ice cream products in southern Alberta and eastern B.C.
A moderate winter will also help business by boosting sales by five to 10 per cent, he adds, but not as much as a hot summer, which allows him to scoop up 20 per cent or more in sales.
Hot weather is a double-edged sword for many businesses, says Dan Kelly of the Canadian Federation of Independent Business (CFIB), which represents 105,000 small and medium-sized business members across the country.
"Changes in weather can create winners and losers at any time of year and can be reasonably traumatic for a firm," says Kelly, the CFIB's vice-president for Western Canada.
Kelly says the CFIB is lobbying hard for energy relief, especially for cuts in fuel taxes, as its members say rising energy costs are their biggest concern.
Whether it's higher expenses for electricity to run air conditioners or the escalating price of fuel to get more products to market, some business owners are concerned that the added earnings are barely enabling them to keep up with mounting costs.
"Our increased sales right now are just covering our increased costs," says van Dinther. "Our fuel costs have doubled from a couple of years ago, our hydro costs at the warehouse are up and now the labour cost is up - if you find anybody, you end up paying more. So we're working harder for the same amount of money."
The hotel/motel sector is also feeling the pinch, adds Martindale, especially since hoteliers set room rates and budgets in advance without knowing the eventual cost of rising energy rates and unpredictable weather trends.
Even Winnipeg-based Arctic Glacier Inc. is feeling the heat. The company, which has sales of $250 million and operations across Canada and the U.S. - primarily in packaged ice - says the hot weather isn't necessarily all good news.
"When it gets hot for a prolonged period of time, certain demand in certain markets can exceed our capacity to produce," says Keith McMahon, Arctic Glacier's executive vice-president and CFO.
While its large size easily allows it to ship excess product from one location to another, "we've seen increased costs for diesel fuel to run our truck fleet of diesel vehicles," notes McMahon.
"It does translate into a higher cost that ends up getting passed onto our customers."
Construction companies are also trying to cope. Maple Leaf Construction of Winnipeg, a road and sewer construction company whose work extends into Saskatchewan and northwestern Ontario, says temperatures in the low 20s are best for crews in this industry.
But if they get 30°C days or higher, they pay more attention to the needs of workers, who may need sunscreen protection or long-sleeved clothing.
"We make sure they have sufficient water and don't become dehydrated," says company president Barry Brown, a former Canadian Construction Association chairman.
"At times we'll shift their hours, as the sun is very tiring when you're working in it all day long."
(Laura Severs can be reached at laura@businessedge.ca)
