Province’s tire policy flip-flop is a slap at small business

Tires have historically been environmentally problematic sources of waste. Recently, however, technological advancements have led to much more efficient recycling by manufacturing construction materials, developing tire-derived fuels (TDF) and repurposing.

When the province decided the direction for tire recycling, they chose the manufacture of Tire Derived Aggregate or TDA. It has a number of uses, such as foundation material for highway and railway beds, backfill, and other civil engineering applications. At the time, a tender was issued and a local small business, Halifax C&D Recycling, was given the contract.

They invested in the neighbourhood of $5 million in equipment to properly process used tires and for the last eight years have run a successful program. According to the folks at Halifax C&D, there have been no fires, no stockpiles of tires or TDA and no environmental issues.

To pay for all of this, as a consumer, you pony up a fee of $4.50 per tire at the point of sale. This goes to Divert Nova Scotia who in turn pay $2.00 per tire to Halifax C&D Recycling Ltd. to deal with it at end of life. Ostensibly, the other $2.50 is used for transportation, administration and other costs associated with its disposal or funneled off to pay for recycling of other products.

Ten years ago Rodney MacDonald’s PC government proposed using tire derived fuel. In response, Liberal opposition MLA Keith Colwell brought forward a bill to ban the use of tires as fuel. He was adamant in pointing out potential health risks and outlining what he saw as a sweetheart deal for multi-national concrete manufacturer Lafarge because they would be paid to burn the tires. The idea was shelved.

This month, in a stunning reversal, Nova Scotia’s newly minted Environment Minister Iain Rankin gave a green light to a one-year pilot for Lafarge to start burning TDF in its plant in Brookfield. So what changed in nine years? Not much. Lafarge will get $1.05 from Divert Nova Scotia for every tire it burns. It’s a great deal for Lafarge, which is getting a fuel subsidy, and for Divert NS, which gets a lower disposal cost. For Halifax C&D, not so much.

Remember, for eight years, Halifax C&D believed the Nova Scotia government would never permit burning and would focus exclusively on recycling tires. They built their business developing markets based on what they saw as a consistent policy direction of government and a reasonably predictable stream of used tires.

The science of burning TDF, some of which was developed at Dalhousie University, indicates health and environmental risks are almost non-existent. We could argue the relative merits of using TDF versus natural gas in the cement kiln, but it would miss the point. What is more troubling, with this reversal, the government of Nova Scotia has put at risk the future of a local family firm, which has grown and developed in alignment with environmental goals, in favour of mandating citizens to directly subsidize a large multinational’s fuel costs.

Meanwhile, the experience Halifax C&D developed as a tire recycler has allowed them to bid on and win a pilot project in Newfoundland and Labrador. While this is a good new business opportunity to export Nova Scotian knowledge, experience and business to another province, and to create more jobs, it will not replace what C&D are losing here at home.

The government, by reversing direction on tire recycling in favour of burning, has thrown a small business into chaos in favour of subsidizing the fuel costs of a large multi-national. For a government that purports to support small business in Nova Scotia, this is not the way to show it.

Jordi Morgan is Vice President Atlantic of the Canadian Federation of Independent Business.

This commentary originally appear in the Halifax Chronicle Herald, July 26, 2017

Fall Back Up with Rob Steele

Show Notes:

Rob Steele built his entrepreneurial career in auto-related industries throughout the 1990s. The Steele Auto Group, is now the largest and most diversified auto group in Atlantic Canada with 900 employees, and 17 dealerships in Nova Scotia, New Brunswick and Newfoundland and Labrador, representing 22 brands.

The Steele Auto Group is recognized as one of Canada’s 50 Best Managed Companies.

Rob’s other hat is President and CEO of Newfoundland Capital Corporation or Newcap. Since taking the job in the early 2000’s Rob has focused on the radio business, and now controls 95 radio licenses across Canada with 1000 employees.

Rob also sits on the boards of Stingray Digital, Montreal, and Atlantic Signature Mortgage, Halifax.

rsteele bio picRob has a strong passion for music. He’s been a Past Co-Chair of the East Coast Music Awards Event Committee and continues to be involved with the ECMA’s in an advisory capacity. He also serves on the Advisory Committee for Junior Achievement of Nova Scotia, and is also a Director of the Halifax Mooseheads Hockey Club.

Rob is a strong supporter of giving back to the communities and both Newcap Radio and the Steele Auto Group are very actively involved in many charitable causes and Rob is personally active with the Alzheimer’s Society, the Mental Health Foundation, Family SOS, Daffodil House, Feed NS and the Arthritis Society. He was named Outstanding Individual Philanthropist of the Year in 2014 by the NS Association of Fundraising Professional.s I met Rob at his home near the Kearney Lake Road and we sat down on a beautiful afternoon on his patio to chat…

To listen Click here

*In our conversation, Rob mentions a unattributed poem called the Creativity of Living. The quote is as follows;

The man who follows the crowd will usually get no further than the crowd. The man who walks alone is likely to find himself in places no one has ever been before.

Creativity in living is not without its attendant difficulties, for peculiarity breeds contempt. And the unfortunate thing about being ahead of your time is that when people finally realize you were right, they’ll say it was obvious all along. You have two choices in your life; you can dissolve into the mainstream, or you can be distinct. To be distinct, you must be different. To be different, you must strive to be what no one else but you can be . . .

There is some investigation of this quote, attributed to several figures, available at http://quoteinvestigator.com/2012/10/18/follows-crowd/

Fall Back Up with Tareq Hadhad

Show Notes:

On this episode I’m delighted to sit down with former Syrian refugee, medical student, entrepreneur, and Peace By Chocolate founder Tareq Hadhad.

In the election of 2015, then candidate for Prime Minister, Justin Trudeau, pledged if his party won the election, his new Liberal government would begin effort to bring 25,000 Syrians displaced by the war to resettle in Canada.

Among the families selected were the Hadhads.

Tareq had been studying medicine when hostilities broke out in Syria and his father was running a well establish chocolate manufacturing business in Damascus.

After essentially losing everything they owned in ground fighting and airstrikes, the family fled to Lebanon and eventually were selected to come to Canada as part of the Syrian refugee program. They were sponsored by a community group in Antigonish.

peace by chocolate signTheirs is a success story by almost every measure. In fact, their hard work, investment, crowd funding project, and community support means has resulted in the construction of a full scale chocolate factory in Antigonish.

Their story was celebrated by the Prime Minister as an example of success in a speech to the UN Refugee Summit…

There are a great many aspects of the Syrian conflict that might be explored, however on this occasion I simply wanted to meet with Tareq to get a sense of his family’s experience and the resettlement process in Atlantic Canada.

I met him in the back of the original tiny chocolate making facility on the side of the road next to their modest family home. We sat down on a couple of squeaky chairs for a chat…

To listen to the podcast click here

Fall Back Up with Don Bureaux

SHOW NOTES:

On this episode I’m delighted to sit down with the President of the Nova Scotia Community College (NSCC), Don Bureaux

As President of NSCC, Don Bureaux serves as the chief executive officer for the operation of 13 campuses, with over 120 programs, and approximately 24,000 students and 2,000 staff.

don convocationDon Bureaux has been president of NSCC since 2011 but his commitment to adult education spans over two decades working with adult learners at colleges and universities as well as professional designation granting organizations across Canada and internationally.

At NSCC, he works to bring the college’s vision – transforming Nova Scotia one learner at a time – to life.

Don holds a certificate in Adult Education and a Bachelor of Business Administration from Acadia University and an MBA from Heriot-Watt University in Scotland. He’s Chartered Professional Accountant, Certified General Accountant and holds an international designation as a Certified Business Counsellor through the Asia Pacific Economic Cooperation (APEC).

He’s been granted his Fellow Chartered Professional Accountant (FCPA) designation by CPA Canada and his Fellow Certified General Accountant (FCGA) designation.

In 2015, 2016, and 2017 Don was named one of the Top 50 CEOs by Atlantic Business Magazine and serves on the boards of many not-for-profit organizations in Nova Scotia.

I dropped into visit Don in his office at the Leeds Street campus of the NSCC in North End Halifax

During our conversation he references a book Road to Character by David Brooks. Click for the link and below, you’ll find a link to a YouTube video of a Ted Talk on one of his principle areas of discussion, the difference between resume virtues and eulogy virtues.

Don and I began by talking about his childhood…

To listen to the podcast click here

To watch the Ted Talk with David Brooks, click here

Alcohol taxes are going up, that is certain

Tucked away in a remote corner of the Budget Implementation Act (BIA) was a surprising new tax on alcohol. As Canadians, we’ve come to accept our sin taxes as dutiful penance for universal health care, and probably rightly so. If we are going to drink or smoke ourselves into a critical care unit, there’s general agreement there should be some upfront payment into the healthcare system through the purchase of those things with which we are slowly doing ourselves in.

However, a recent new measure to raise taxes on alcohol raised eyebrows across party lines and in the Senate. Finance Minister Bill Morneau’s budget bill included a 2 percent increase in the excise duty applied to the cost of wine, beer, and spirits. That may not seem like a big deal, but here’s the kicker, it will automatically increase every year based on the rate of inflation, starting in 2018. Forever.

The government says the cost will be minimal, only a penny on a litre of wine, seven cents for a 750-millilitre bottle of hooch, and five cents more for a 24 of beer. But, that’s just the start, the Senators also noticed when provincial markups and HST are applied on top of the excise duty, the price of beer will actually increase by roughly 12 cents, with the added benefit of never-ending, guaranteed, built-in hikes. All this without any need for the finance minister to bother going back to Parliament.

When this bill hit the Upper Chamber, many Senators thought this was a terrible idea. At a time when many independent breweries and distilleries are trying to build a base, the federal government imposing a never-ending tax hike on their product seems, well, a little counterintuitive. Add to this the fact the Department of Finance admitted it didn’t do any analysis of the impact of the escalator and you have some rather poorly received legislation.

In addition, for some reason, nobody in the Department of Finance felt the need to talk to Spirits Canada, Beer Canada, the Canadian Vintners Association or any other group whose member’s livelihoods depends, at least tangentially, on the cost of liquor. Speaking to stakeholders might have been a reasonable place to start.

Supporters are saying it provides ‘certainty’ around increases. This, however, is not a particularly convincing argument especially given there is no economic analysis, no industry input, no market condition forecasts, and all other industrial factors are essentially ignored. The only thing ‘certain’ is taxes are going up.

Some of the ‘independent’ Senators put up a short lived fight, threatening to split this piece out of the legislation, however pushback from the government shutdown the resistance and with the majority of the Upper Chamber, the Liberal appointees passed it without amendment. The job now is convincing the government of the error of its ways, which is never an easy task. Rolling back Finance Department edicts takes powerful lobbying or changes in governments.

Small business has much at stake. Excise taxes are paid by manufacturers and while there’s been some speculation about how the tax increase will affect consumer prices, it is still unclear how manufacturers will be passing these costs along or how retailers will respond. What is clear is hospitality firms and consumers can look forward to an ever-increasing cost of alcohol, without the benefit of parliamentary oversight…that is certain.

Let’s Start Clearing the Smoke on Cannabis

In another 12 months, we’ll be dealing with the real world impact of the federal government’s legalization of marijuana. There are still lots of unanswered questions about how this will roll out. These are questions with huge economic and social implications.

While the Canadian Federation of Independent Business (CFIB) has conducted only one survey of its members so far on how recreational marijuana should be sold, comments from our members suggest there are still considerable divisions on whether legalizing marijuana is even a good idea.

While we have limited experience with cannabis per se, CFIB is a respected international leader on regulation, including how to get it right and what not to do. This includes considerable experience with liquor and tobacco regulation. The federal government has handed responsibility over to the provinces who will need to apply a laser focus on these key critical regulatory pieces.

Too often, governments examine a new area where regulation is needed and quickly expand the mandate to include every moving part. This automatically means proper enforcement is near impossible. We recommend focusing on a few critical regulatory priorities, such as preventing sales to minors, ensuring proper product safety information and rules, and prohibitions at work or while driving. Choose the most important aspects to regulate and then do them well. Leave the rest alone.

We also hope to see the same rules across the country. The provinces should be working together to ensure as much consistency as possible as legalization rolls out across the country.  As the new Canadian Free Trade Agreement works to undo the damage of multiple complicated regulatory schemes, the last thing we need is another patchwork quilt of rules in an emerging industry.

Additionally, while bringing recreational cannabis sales out of the underground economy will no doubt have positive revenue implications for the government (excise, sales, and corporate income taxes), there will be added costs for policing and health care. Government would be wise to resist the temptation to frame this as a giant cash cow.

That means getting the tax mix right. If taxes are excessive, particularly in early days, much of it will remain black market. High tax rates may discourage users, but they’ll also push sales into the underground economy. It is estimated that close to a third of tobacco sales are underground, often with links to organized crime.

Also, provinces would be wise not to let regulation get in the way of innovation. An above-ground private sector can stay much closer to customer preferences, the edibles market is a good example. It’s also a myth that only public sector employees can responsibly handle controlled substances. The private sector has held an important role in tobacco and pharmaceutical sales, as well as alcohol in some provinces.

CFIB is also recommending a central role for smaller, independent businesses within this emerging industry. We are already advocating for access to banking and payments services for smaller, independent businesses involved in legal cannabis retail and distribution as a measure to help achieve the goal of limiting the underground economy.

Even those who are involved in the emerging industry appear to remain unsure of where this is all going. A year out from implementation, we should be seeing some of the smoke begin to clear.

Jordi Morgan is Vice President, Atlantic of the Canadian Federation of Independent Business. CFIB represents the interests of 11,000 small and medium size businesses in Atlantic Canada.

Fall Back Up with Barb Stegemann

SHOW NOTES:

On this episode I’m delighted to sit down with author and social business innovator, Barb Stegemann.

Barb was born in Montreal, Quebec and holds degrees in Sociology and Journalism from the University of King’s College.

Barb built her own boutique PR firm while living in British Columbia and created innovative, award winning campaigns winning numerous marketing awards from the Economic Developers’ Association of Canada

After Barb’s best friend Captain Trevor Greene was wounded in Afghanistan in 2006, she set out to support his mission of economic empowerment creating a new business model that supports trade with nations experiencing war or strife.

Middle east peacewShe launched The 7 Virtues Beauty Inc., a company that began by sourcing essential oils distilled from legal crops to provide an alternative to the illegal poppy crop for farmers and began manufacturing perfume.

The fragrance line brought to reality the essence of her best selling book, The 7 Virtues of A Philosopher Queen; that women can flex their buying power to affect change and reverse issues of war and poverty.

Barb successfully pitched and landed a venture capital deal on CBC’s Dragons’ Den and has been building her company with mentor Brett Wilson.

Recently the story has been told in the documentary feature Perfume Wars which has won accolades at film festivals across Canada and the United States

She was named on of Canada’s one of the Top 100 Most Powerful Women in Canada, and received the Women Innovator’s Award from the US State Department for the Economy of Canada.

barb_mike.jpg

She is one of the few Women in Canada to have been made an Honorary Colonel for the Royal Canadian Air Force and is the first female to receive this honour for her base, 14 Wing Greenwood…and was award an Honorary Doctor of Letter from the University of New Brunswick.

Barb and her partner, Mike Velemirovich, live in Halifax, which is where I met up with Barb to talk about her life…

To listen to the podcast click here