Net Gain

Mother Earth, that other shareholder

By Michael Hammond, Record staff

No sooner had I hung up the phone with a spokesperson from Babcock & Wilcox this morning that I noticed an interesting tidbit about the northern Alberta oilsands region in another newspaper. You might recall I wrote about Babcock & Wilcox last week after the company's president Mike Lees spoke about B&W's push into the oilsands region in Fort McMurray, Alta.

The company official said she had just returned from northern Alberta. The company is obviously quite keen on getting its hands dirty in Alberta as the drive for increasingly scarce oil requires creative solutions.

What is complicating matters is that pesky notion of the environment. I say this with tongue in cheek, of course, since the environment is, of course, more than just a pesky problem for big business. It is a huge concern. People are worried that the planet is slow roasting itself into oblivion. That means the major polluters are being targeted. Carbon is suddenly a word tinged with negativity.

To get back to my original point, the story in another publication today suggested that Imperial Oil has been handed a serious setback in its plan to extract oil from northern Alberta. I found this interesting since the perception is the oilsands region is an unregulated wild west. It wasn't until recently that we began to hear that the federal government is looking to regulate the oilsands region in order to mitigate the environmental damage being done there. Imperial Oil's setback may be a sign of things to come. It may be a signal that business as usual is not an option anymore.

That got me to thinking about Mother Earth. It seems as though businesses are beginning to view the planet as a silent shareholder that is beginning to make its presence felt. Whatever decisions companies make, they are now considering the planet as part of their decision. Sure, profits are what matters most in business, but it seems as though companies are beginning to realize a healthy planet is good for business.

Never has Mother Earth been so battered and yet so powerful.

mhammond@therecord.com

Innovation in unlikely places

By Michael Hammond, Record staff

Don't write off Babcock &Wilcox as a so called old-industry dinosaur.

This is Babcock &Wilcox Canada president Mike Lees' message to prospective new employees. The company, best known for making boilers and steam generators, will have many jobs to fill in the coming years, which Lees told a business gathering is one of the biggest challenges to his company's growth.

"New grads see B&W as this old smokestack industry," he told a Communitech breakfast gathering Tuesday in Cambridge.

I can see where he would have trouble convincing University of Waterloo engineering grads to consider a job with his company. After all, on the surface, it offers very little of the glamour of a Research In Motion, Open Text or Sandvine.

But appearances can be deceiving, especially for the venerable B&W, which the company is beginning to brand itself as now, judging by the updated logo that was used for presentation.

You want proof? Well, Lees talked about how a certain oilsands project took thousands of hours of engineering and more than $1.5 million in R&D dollars to get off the ground. The project, to make steam generators for the oilsands industry in Northern Alberta, is a highly complex affair that requires incredibly innovative thinking. Not only do engineers have to figure out how to pump oil out of the oilsands using steam, but they also have to figure out how to capture carbon dioxide emitted from the generation process and potentially push it back underground for storage. The generators also have to function so that dirty water left over from the oil extraction process does not stay in the ground.

This is not old industry stuff by any stretch. The breakfast gathering seemed to be riveted by Lees' fascinating presentation, judging by the number of questions that followed the talk. Lees also spoke about the work the company is doing for nuclear power plants, like the Bruce A nuclear station near Kincardine. Again, the work being done here is anything but simple.

Lees raised an interesting point in his presentation. Innovation is not the exclusive domain of RIM and Google. It's all around us in the region. We just have to change our attitudes.

For more on B&W's push into the oilsands, check out tomorrow's business section of The Record.

mhammond@therecord.com

Budgets, business and hope

By Michael Hammond, Record staff

Yesterday's reaction to the provincial budget was much more muted than I expected. It was hard to assess how the business community viewed Dwight Duncan's budget since there was so much ground to cover and so many initiatives laid out. There was tax relief that will put money into the pockets of the province's manufacturers. No one seemed to disagree with the ongoing drive to eliminate capital taxes for manufacturers and resources companies.

But the devil is in the details. Rick Moffitt, president of the Waterloo Regional Labour Council, was cautious in his assessment of the budget. A former provincial NDP candidate, Moffitt is no fan of the Conservative tax-slashing approach. He offered some qualified praise for the Liberal tax incentives for manufacturing, but he noted that this Liberal government is big on promises but deficient on its follow through. One need look no further than its plan to close the province's coal-fired power plants as proof, its critics note.

Moffitt said if the government spreads its assistance package over a number of years and takes too much time to implement it, the end results will be disastrous for manufacturing. Kacee Vasudeva, chief executive of auto parts maker Maxtech Manufacturing in Waterloo, was also relatively cautious in his assessment of the budget. Like Moffitt, he was happy for the help but he also wondered whether governments are stepping in too late to help companies like his. Vasudeva said Maxtech has been losing money for four years because the dire state of the automotive industry in North America.

The government is pledging $1.5 billion to retrain laid-off workers and pledging a total of $750 million in tax relief. These are impressive numbers, no doubt, but industry officials told me you have to consider them in context. Ontario is a big province with a big manufacturing sector. Vasudeva said the capital tax refund for 2007, part of the Liberal tax relief package, will save him $18,000.

The region's high-tech sector was no doubt cheering several moves in yesterday's budget. The plan to offer 10 years of tax exemptions to early stage companies that are commercializing research in university and college labs will no doubt be viewed as a solid endorsement of the knowledge industry in the region. There was also millions set aside for cutting-edge research and nearly $1 billion set aside for colleges and universities.

The budget will no doubt be lambasted by the federal Conservatives, who have engaged in a war of words with the provincial Liberals for months.  They even sent  MP Pierre Poilievre to Queen's Park to offer the federal reaction to the budget.

So by my count, that means there were three decidedly different reactions to the budget. There was some careful praise, some muted criticism and some outright attacks. I guess your take on the province's financial blueprint for Ontario depends on how you are faring in these challenging economic times.

mhammond@therecord.com

The business of change

By Michael Hammond, Record staff

It's a cliche to be sure, but the only constant is change. That's especially true of the media in Canada. The Record has made some significant changes recently, which had the staff in the business section thinking of change as well.

Welcome to the end result of our desire to change. Net Gain is a product of the business section's desire to reach out to our business readers on a new level. In the coming weeks and months, you will notice a number of little tidbits and posts in this blog that will be solely focused on the Waterloo Region's economy.

Why the decision to blog? Simple. Business readers need information in an instant. Fortunes are made and lost in a moment. This has never been as evident as it is now. The volatile loonie, the slumping U.S. economy and the shifting tides on the stock market are all influencing change - both good and bad - throughout the region's economy. This blog is our way of staying ahead of the curve and providing our readers with the most up to date analysis, tips and features  that are of importance to this region's business community.

We're the birthplace of the BlackBerry. Our readers understand innovation and change better than anyone. Embracing new avenues of communication is a given.

All of the reporters in the business section will be contributing to this, but we are also hopeful that our readers will help shape its content as well. The goal of this is to reach out to our readers in a new way and give them another avenue to reach us with tips, suggestions, critiques and random thoughts.

So, here we go. Let's start talking business, shall we?

mhammond@therecord.com