Archives for September 23, 2019

The brochure’s cover has the Texas flag as a backdrop and shows an arrow pointing from Alberta to the Lone Star State.

“Arrowstar Realty invites you to relocate to Texas,” reads the mailer sent to businesses across Western Canada recently. “Join the 100s of companies that have already made the move!”

Inside is a letter — beginning “Dear Canadian Neighbour” — boasting of Montgomery County’s “BOOMING” economy, tax incentives and ranch-style properties. It offers to link prospective clients with banks, accountants and lawyers to ease their move.

Realtor Robert Graham says 15,000 brochures have been delivered in Alberta, Saskatchewan and British Columbia so far. Another 50,000 are coming.

He says Arrowstar has helped about 100 western Canadian companies move north of Houston in the last decade, and 40 of them were in the last year and a half.

The majority of newcomers have been Canadian oil and gas drillers, a sector that has hit a rough patch in recent years.

“I definitely want Canada to pick back up. I would love for that more than anything,” says Graham.

But for now, he says, a lot of Canadian businesses need help to keep going.

“We’ve got doors open and we’re ready for them.”

Krisjan Jones, operations manager at livestock feed supplement maker Canadian Bio-Systems, says Lubbock’s economic development agency recently made an enticing pitch to move his business to the west Texas city.

It was offering land at no cost with utilities and rail access.

“So essentially you get a blank canvas for free,” says Jones, who adds he’s waiting on the outcome of the Oct. 21 federal election before pulling the trigger. He cites the federal carbon tax as a major issue for him.

Clogged railways that make it difficult to get international shipments out on time are another big knock against Canada, he says.

John Osborne with the Lubbock Economic Development Alliance says pitches are centred more on the long-term business case than politics or potential perks. When benefits are discussed, it’s more of a problem-solving exercise.

“We look at it as ‘What’s stopping you from saying yes to coming to Lubbock right now?'”

That could mean free land, sewer and water hookups or road paving.

Osborne says his group has been doing Canadian outreach for about a decade, but it’s gone from sporadic to regular in recent years. Most trips are to Calgary and Toronto and have been with companies in oil and gas, manufacturing and agriculture.

Precision Drilling CEO Kevin Neveu moved to Houston from Calgary three years ago with the rest of the company’s management team. It has about 250 employees in each city now.

Neveu says 2017 was the first year Canada made up less than half of Precision’s activity and this year it’s at 30 per cent.

Alberta’s oil curtailments, trouble building new pipelines and cooling investor sentiment have depressed the Canadian industry, he says.

“It’s those three factors that are really starving our customers for capital, which means they’re not reinvesting in drilling, which means that our business here is just really slow — brutally slow.”

Mark Scholz, head of the Canadian Association of Oilwell Drilling Contractors, says every member he’s spoken to has at least seriously considered moving people or equipment out of Canada. The association represents more than 100 companies that drill or service oil and gas wells.

He says moves from Alberta’s new United Conservative government to lessen the regulatory and tax burden are helping with competitiveness, but the southbound exodus is a wake-up call.

“The Americans are playing a very strategic game and quite frankly I think they’re winning at that.”

Violent unrest in Hong Kong is the latest geopolitical threat prompting Canadian companies to review their safety measures for overseas employees, security experts say.

“It’s forced companies to kind of look at their policies and procedures around travelling to higher risk countries where there may be instability,” says Patrick Doyle, American Express Global Business Travel’s Canadian general manager.

Hong Kong has seen large scale demonstrations since June after the government introduced a bill that would allow its citizens to be extradited to China if they are arrested.

The Canadian government urged travellers, including 300,000 Canadians living in Hong Kong, to exercise “a high degree of caution” in its travel advisory by pointing out that acts of violence have resulted in serious injuries as security forces clash with demonstrators.

The disruptions forced employers to examine who should travel, when they should go and even consider if travel is required at all, said Doyle, whose firm helps companies mitigate risks by developing travel procedures, briefing employees on travel risks and assisting them once an event unfolds.

Some Canadian firms have suspended or reduced corporate travel to Hong Kong in reaction to the unrest just like they did in the aftermath of the detentions late last year by China of a Canadian entrepreneur and a former diplomat, said Paul Doucet, security director for Canada at International SOS, a travel security firm.

Companies are seeking more help to protect their employees in part because of their legal responsibilities.

Most employers are familiar and compliant with local health and safety standards and their legal duty of care. But many are less familiar with their legal liabilities when an employee is travelling abroad, said a report on Canada’s mobile workforce.

“An employer has a legal obligation to take all precautions, reasonable in the circumstances for the protection of the worker,” said Lisa Bolton, an employment and labour lawyer with Sherrard Kizzy LLP, who co-authored the 2016 paper with the International SOS Foundation.

Bolton said employers are required under Canadian and provincial labour laws to take into account risks and hazards and to ensure there’s training and education to enable employees to work safely.

A New Brunswick resident lost money to a company claiming to operate from Germany

The province’s Financial and Consumer Services Commission has issued a warning about high-risk crypto asset investing after a New Brunswick resident lost money to a company called 4XFX.net.

The company claims to operate a bitcoin trading investment platform from Germany.

On its website, the commission said the victim had also been also approached by a company called Coinbrokerz that was “operating a similar scam.”

While these companies make claims to offer investment opportunities in bitcoin along with other crypto assets and commodities, their websites are no longer operational.

A warning about 4XFX.net was also issued by the Manitoba Securities Commission after a Winnipeg resident suffered a loss. 

The New Brunswick commission said neither company has ever registered to trade securities or derivatives in the province. The commission warns residents to avoid engaging with these companies.

There have also been warnings by international regulators. 

The commission says the risks associated with products based on crypto assets include the potential for fraud.

Anyone solicited to buy or trade crypto assets are advised to check to see if the company is registered with the commission. They should also do an internet search about the company to see if it has been subject to any disciplinary action.

The commission says never to send money out of Canada. “If you do not understand the technology, stay away.”

A new report from the Business Council of British Columbia called the Prosperity Index is aimed at determining whether overall living standards in B.C are improving over time, and offering insights on how to improve them.

The index attempts to boil down Canada’s and British Columbia’s overall well-being to a single ranking. Using data from 2017, the report found that Canada and B.C. aren’t performing at the level of the globe’s top economic powerhouses like the United States, Japan and Germany.

The report uses metrics like gross domestic product per capita and research and development investment to compare the business environment and economic and societal well-being of Canada to some of the globe’s largest and most innovative economies, including three of the best-performing U.S. states and major developed countries.

British Columbia ranked 11th overall behind Alberta, the three U.S. states and most countries. However, B.C. did perform better than Ontario, Quebec, the U.K. and New Zealand.

British Columbia has a lower GDP per capita than western U.S. states like Washington and California that are international hubs for the global technology sector. The report uses this as an indicator of the province’s standard of living, suggesting that households are generally better off when GDP per capita is high.

B.C. ranked 14th for labour productivity. The only countries it ranked ahead of were Japan and New Zealand. B.C.’s productivity growth, however, outperformed all other countries on the list. The report also looked at non-residential investment when measuring the business environment. As a percentage of GDP, B.C. had greater investment than the U.S., the U.K., Quebec and Ontario, however, B.C. ranks 11th out of 18, as the U.S. states were excluded from this ranking.

British Columbia also had less R&D investment as a percentage of GDP than many of the jurisdictions studied, including Japan, Washington and California. Despite being beat by the homes of Amazon and Samsung, British Columbia had greater tech investment than other provinces with the exception of Ontario and Quebec.

British Columbia ranked higher on economic and societal well-being than it did on business environment. Higher levels of household income and life expectancy and lower levels of unemployment and poverty gave British Columbia higher scores for societal and economic well-being while lower levels of R&D investment and business investment drove the score lower for business environment. However, British Columbia’s housing affordability problem also played a role in lowering its score.

When it came to societal well-being, British Columbia ranked above average with longer life expectancy, better air quality and lower income inequality.