What a difference a year makes.
Just over 12 months ago, the business community was reeling from a deflated tech bubble, struggling with the effects of an expanding “war” against terrorism on travel and border trade, and fighting a public relations battle over growing corporate accounting scandals.
The dawning of 2002 was hailed as a promising prescription for a lingering economic and psychological hangover.
So how did business measure up this year? Readers of Business Edge will probably agree that many areas – including the battered high-tech industry – staged a partial recovery at the very least, particularly in Alberta where optimism thrives like a drought-resistant weed.
|Larry MacDougal, Business Edge|
|After years of street-level protests and shareholder concerns, Talisman Energy finally sold its investment in Sudan.|
From new wireless deals to a telecom turf battle, from climbing oil prices to universities attracting top researchers to commercialize discoveries, 2002 was an exciting year for Alberta’s growth.
Not that everything came up roses for business in 2002, however. Dry growing conditions parched the dreams of farmers and ranchers, once high- flying companies crumbled into dust, the venture capital drought persisted and Kyoto circulated plenty of hot air between Alberta and Ottawa.
As this year draws to a close, Business Edge revisits just a few of the Alberta stories we found to be compelling reads in 2002 – and hope you did, too.
* January: The year begins with a story of hope for Calgary’s beleaguered East Village, as city planners consider how to turn a rather shabby area of town into a pedestrian-friendly residential and mixed-commercial neighbourhood. Plans call for nearly 9,500 people to be living in the area after redevelopment is complete – but the project is destined to implode before the end of the year when city council abruptly terminates the $1.5-billion joint venture.
Nortel Networks stocks open the new year at about $10.15 per share. Josef Schachter, president of Calgary-based Schachter Asset Management, picks Nortel as a medium risk with a 12-month target of $20. (By mid-December, it’s trading at a paltry three bucks – see Pro's 3 Stars for his latest forecast.)
There’s talk of open rebellion over the rising price of health premiums, already a heavy burden for many small and medium-sized businesses. The premier’s advisory council on health, chaired by former federal cabinet minster Don Mazankowski, issues a sweeping set of recommendations designed to provoke an overhaul of medicare.
The long-awaited AEC-PanCanadian deal finally solidifies, creating a company with market capitalization of about $20 billion. The new EnCana corporation, led by Gwyn Morgan, unites the top two Canadian producers and creates an international powerhouse with major operations in the U.S., South America and the North Sea.
|Larry MacDougal, Business Edge|
|Wind energy continues to capture the imagination as the energy industry looks for ways to provide alternative sources of power.|
Finally this month, the Alberta Securities Commission begins proceedings against VisuaLABS founder and former CEO Sheldon Zelitt, charged with 11 counts of making misrepresentations about a 3-D television invention in documents filed with the ASC. By the time the case actually makes it to court in the fall, Zelitt will be hawking his newest discoveries from the safety of a walled compound in the Czech Republic.
* February: The month kicks off with an in-depth interview with Nexen chief Charlie Fischer, who brands ratification of the Kyoto Accord an irrational “blank cheque.” But Charlie’s maintaining a go-forward attitude when it comes to oil prices.
“I think in the short term we’re going to see prices under $20 (US) but our view is that we’ll see prices in the low $20s this year and gravitating to the mid-$20s over the next half-dozen years.” By mid-December, with the U.S. setting its sights on Iraq using a different kind of barrel and OPEC agreeing to cut output, world oil prices will climb to about $28.
An international study by KPMG Consulting shows Edmonton is in the best shape to attract new business, offering the lowest overall business costs of 86 large and medium-sized cities in the world. “Greater Edmonton is literally sitting on top of the world for business competitiveness,” says Jim Edwards, president and CEO of Economic Development Edmonton.
|Dave Olecko, Business Edge|
|Biotech is big in Alberta, and SemBioSys CEO Andrew Baum, with research assistant Meagan McDonald, sees molecular farming as one health solution.|
And in an Edge exclusive, it’s revealed that electronics giant Panasonic Inc. is pulling the plug on a $13-million wireless design centre in Calgary, axing more than 40 jobs and giving the city’s fast-growing ‘wireless centre of excellence’ profile a big, black eye.
* March: Alberta’s transportation networks are the bloodlines of a thriving economy, but the provincial trucking industry is dismayed at the number of companies that are hitting a rough patch. Recent downturns in the oilpatch and agricultural sectors, combined with higher insurance rates following last fall’s terror attacks, hit the industry hard this month.
Calgary-based transportation giant TCT Logistics Inc. spirals into receivership.
But things are looking up at the Edmonton airport, where the Red Tail Landing Golf Club is officially unveiled. The public course built by Sid Puddicombe Associates on 234 acres of leased airport land alongside Highway 2 boasts a 7,330-yard view from the back tees.
|Jack Dagley, for Business Edge|
|Edmonton entrepreneur Dale Wishewan boasts the fastest-growing franchise operation in the country with his Booster Juice success story.|
Edge@Work columnist Mike Dempster examines the growing problem of substance abuse in Alberta’s workplaces, and reveals statistics that suggest more than 60,000 people drink on the job each month in Alberta, with 6,000 also using illegal drugs.
Kyoto is also still simmering on the front burner. A study by the National Round Table on the Environment and the Economy says emissions trading will help reduce predicted high economic costs, estimated by some to be up to $40 billion annually (not counting hundreds of thousands of lost jobs.) “I believe those big numbers are a distortion,” NRTEE chairman Stuart Smith tells Business Edge writer Mark Lowey.
* April: Provincial Finance Minister Pat Nelson outlines an austere budget that will force businesses to dig deep for employee health-care costs. Planned corporate tax reductions will also be shelved, Nelson tells a subdued audience at the Calgary Chamber of Commerce. “Once again we are facing forces beyond our control,” says Nelson. Predicted provincial revenues will drop 5.6 per cent this year, or about $1.2 billion dollars.
Softwood lumber is in the news again as Alberta’s forestry industry braces for punitive U.S. tariffs. The Forest Industry Suppliers and Loggers Association in Alberta warns of potential layoffs. Canadian lumber exports to the U.S. are worth about $10 billion, but the U.S. claims our lumber is heavily subsidized.
Business Edge columnist Tom Keyser profiles Monica Allen and Space Cannon Illuminations Inc. of Edmonton. The company provided the 7,000-watt searchlights that lit up the sky above New York in a ghostly tribute to those who died in the attacks on the World Trade Center.
|Larry MacDougal, Business Edge|
|CIBC employee Ram Banga shows his baited breath as he helps raise money in Calgary for breast cancer research|
Bell Canada and Manitoba Telecom Services announce they will combine to strengthen Bell’s presence in Alberta and B.C. The new company, Bell West, will be headquartered in Calgary with offices in Edmonton and Vancouver, and employ about 700 people. “Bell is a strong competitor we have to respect,” notes TELUS spokesman Nick Culo.
* May: The Edge gets the scoop on the lawsuit filed by the Alberta-based federal agency managing First Nations’ oil and gas interests against more than 140 petroleum companies over millions of dollars in royalties that the agency alleges were improperly deducted from native bands. Indian Oil and Gas Canada has filed 19 separate lawsuits on behalf of 19 First Nations in the province. Stoney chiefs warn they may start cancelling oil and gas leases if the dispute isn’t resolved.
Protesters take to the streets outside the Hyatt in Calgary to draw attention to Talisman’s continuing investment in war-ravaged Sudan. The protest is peaceful, but company CEO Jim Buckee expresses surprise at the bally-hoo. “We do seem to draw our disproportionate share of attention,” he notes.
Edmonton-based infrastructure expert Stantec continues to motor down the takeover trail. At the company’s annual general meeting, happy shareholders are told about an 18-per-cent ($1.84) increase in basic earnings per share. Newly renovated corporate headquarters – to the tune of $7 million including the crushed glass elevator walls – attest to the success of the company, which boasts 3,500 employees and has six acquisitions under its belt so far this year. “A modest plan executed brilliantly is better than a brilliant plan executed poorly,” says president and CEO Tony Franceschini, modestly.
* June: The Group of Eight circus rolls into Calgary and Kananaskis Country. The spectacle is highlighted by Air Force One soaring regally over the downtown skyline carrying the world’s most powerful leader – and as soon as George Bush feels secure enough to disembark, is immediately handed the city’s trademark white cowboy hat. Federal officials reassure local businesses that they’ll be compensated for any losses during the G8 Summit – if they can prove they’ve suffered damages as a result of related security measures.
|David Lazarowych, Business Edge|
|Mark Miller and his crack team of smoke-eaters at Safety Boss build on a legacy of firefighting in the oilpatch.|
Calgary Mayor Dave Bronconnier refuses to issue a permit for activists to set up a “Solidarity Village” for a music and education festival. Activists instead hold a successful G6B (Group of Six Billion) People’s Summit which features keynote speaker and former United Nations ambassador Stephen Lewis.
A report by Tourism Calgary predicts a total economic impact of $243 million for the province as a result of the summit. By the time Air Force One departs, the event has been deemed a smashing success, without any actual smashing.
Also this month, Alberta Environment Minister Lorne Taylor unveils a “made-in-Alberta” plan to reduce greenhouse gas emissions at a meeting in Charlottetown of provincial energy and environment ministers. When his proposal to present the plan to Canadians in cross-country consultations is rebuffed, a miffed Taylor withdraws as co-chair of the federal-provincial consultation committee.
The U of C’s business school is renamed in honor of Dick Haskayne, who with his wife Lois donates an impressive $16 million in cash and land to the U of C. One of the oilpatch’s most respected executives, the Order of Canada officer believes Calgary should have one of the best-ranked business schools in Canada.
* July: Alberta investors are heading back to the land. Edge real estate writer Kenton Friesen examines the boom in recreational property sales in areas such as Canmore, the Crowsnest Pass and Sylvan Lake, where lakefront properties have doubled in price five times in the last 25 years.
Guy Kerr is named as new president and CEO of the Workers’ Compensation Board, replacing Mary Cameron, who walked away from the job – and its annual $350,000-plus paycheque – in January.
Cameron had locked horns with provincial Human Resources Minister Clint Dunford after he announced a review of thousands of old WCB claims.
And Georgine Ulmer, the president and CEO of Promoting Calgary Inc., announces plans to step down from the economic development agency after months of public criticism and a report questioning the leadership, mandate and performance of her office.
* August: A tinder-dry summer sparks conflict between farmers and ranchers and the oil industry, which depends on fresh water to run oilsands plants. While CAPP admits that the total volume of water that the province licenses every year to oil and gas companies has increased, it says actual consumption of fresh water has declined now that more recycling is being used.
To help slake the thirsts of both customers and crops, Calgary-based Big Rock Brewery announces plans to donate $2 for each case of Grasshopper Wheat Ale brand beer to a fund set up to help Saskatchewan farmers.
* September: There’s something new in the air, and its name is ZIP. The Air Canada subsidiary has set up shop in Alberta, planning to take on low-cost rival WestJet.
Meanwhile, a survey of Calgary’s technology sector by the Canadian Advanced Technology Alliance and KPMG shows that Calgary’s tech sector is still going strong – but access to venture capital remains a challenge.
Young CEOs join business veterans at the third annual Banff Venture Forum, where executives have just 10 minutes each to pitch their company’s message in the hopes of attracting financing for their companies. Federal Industry Minister Allan Rock stops by both Calgary and Edmonton for an Innovation Summit, and confirms that a drought in venture capital is threatening innovation.
Kyoto continues to be a provocative issue as Prime Minister Jean Chretien announces that Canada will ratify the accord before the end of the year. Alberta Premier Ralph Klein reacts by asking Peter Lougheed to help mount a defence against the move.The Canadian Manufacturers and Exporters Association warns that job losses in the manufacturing sector alone could reach 450,000.
* October: War with Iraq dominates the headlines. Alberta-based oil companies are beefing up their security systems, but most say they don’t expect their operations to be threatened even if the U.S. invades Iraq.
But another Osama is already making his mark on Alberta. Edge columnist Tom Keyser profiles Osama Arafat, whose name certainly hasn’t hindered his successful foray into Western Canada at the helm of Q9 Networks, the latest company to launch a high-security data storage centre in Calgary.
Rapid expansion is causing stretch marks on Edmonton’s residential and corporate boundaries, with large builders such as Jayman Master Builder and Reid Built Homes predicting their local housing sales will jump this year.
In southern Alberta, a posse of ranchers bands together to fight a proposed oil and gas development in the southern foothills. The Pekisko Land Owners Association, which includes singin’ cowboy Ian “we must protect the West,” Tyson, is opposed to a sweet-gas well being pitched by Vermilion Resources Ltd. on native grasslands south of Longview. In just a few weeks, Vermilion will pull the plug on the well, withdrawing its application prior to an Alberta Energy and Utilities Board (EUB) hearing.
And Business Edge publishes its first list profile – a thorough survey of Alberta’s Top 100 aviation companies. It will be the first of a long line of data-based features which examine some of the major players in a cross-section of Alberta industries.
* November: Talisman finally sells its controversial stake in the Sudan, about 22 per cent of its oil-production base, and how does the market react? With a big yawn, reports Energy Edge columnist Ian McKinnon. The company’s stock rises less than two per cent on the day following the announcement that it will unload its Sudan investment in the Greater Nile Petroleum Operating Company to India’s state-owned Oil and Natural Gas Corp. for $1.2 billion.
Kyoto continues to loom over the bottom line of several proposed projects in the oilpatch. Canadian Natural announces it will slow down spending next year on Horizon, its $8-billion oilsands project, due to uncertainty over the climate change accord.
Scientist and broadcaster David Suzuki comes to Alberta to praise several companies, including Suncor, BP and Shell, for realizing that economic benefits can flow from environmental initiatives such as Kyoto. “History informs us when forced to comply with new regulations, business invariably discovers there are new opportunities, that it can pay to be ecologically responsible,” Suzuki tells a sold-out audience in Calgary.
And a long-simmering labour dispute at the Shaw Centre in Edmonton is over after nearly eight months on the picket line. The workers, represented by the United Food and Commercial Workers, vote to ratify their first-ever collective agreement.
* December: ConocoPhillips Canada plays the Grinch, laying off more than 100 employees in Calgary. The company says it intends to improve its return on capital employed to 12 to 14 per cent over the next several years.
There’s more trouble on the labour scene at TELUS, where the Telecommunications Workers Union (TWU) and the company struggle to reach a settlement. Telus will eliminate 6,500 jobs from its ranks of 28,000 through early retirement and voluntary departures by the end of 2003. CEO Darren Entwistle tells a Calgary press conference that the company is contemplating another 10 per cent of positions through outsourcing some in-house work.
The federal Liberals rush to ratify Kyoto before Christmas, and Alberta Premier Ralph Klein tells investors in New York that while he’s still opposed to the accord, he’s putting more faith in prime minister-in-waiting Paul Martin to delay implementation. Only time will tell on this one, folks.
And that’s the way it was – or at least, the way the Business Edge team reported some of the events of 2002. We’ll be back in the New Year to introduce a whole new crop of stories, lists and interesting Alberta newsmakers, always providing a locally owned, locally written perspective.
From all of us, have a safe holiday and a prosperous New Year.