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Category: Hicks on Biz columns from The Edmonton Sun

Hicks on Biz columns from The Edmonton Sun

Quesnell construction quagmire: Hicks on Biz column, originally in Edmonton Sun May 25, 2012

It wasn’t quite a “I told you so” when Quesnell Bridge contractor ConCreate went bankrupt some weeks ago. But the folks at another major construction firm had an office pool going, taking bets on how far behind schedule the rehabilitation and widening of the massive Whitemud Drive bridge across the North Saskatchewan River would be. The worst-case bettors won. After massive pressure from the city, ConCreate finished the bridgework in November 2011, a year behind schedule. Four months later, the company went bankrupt. “A year behind schedule!” exclaims another bridge expert, whose company also lost the Quesnell contract to ConCreate. “Just imagine the value of drivers’ time, waiting to cross the bridge. Even at a loss of a minute a day, over 365 days, times 145,000 drivers, earning an average $20 an hour each.” Which is about $18 million. The $64,000 question — actually $10 million in contested costs with the now-bankrupt company’s b ... Read the rest of entry »

The business of the Oil Kings: Hicks on Biz column published in Edmonton Sun May 19, 2012

It's a peculiar business, this major junior hockey. After toiling in relative obscurity for five years, the Edmonton Oil Kings have made it to the Canadian Hockey League finals. But are they playing home games in a sold-out Rexall Place? Nope. The Memorial Cup finals consists of a four-team tournament, the play-off champions of the Western, Ontario and Quebec hockey leagues plus the host team. It's all happening in Shawinigan, Quebec. Each major junior hockey team is a business in which the stars — the best 16-to-20 year-old hockey players in the country other than those in the NHL — do not get paid. Their expenses are covered. They receive a weekly allowance, from a rookie's $100 to between $300 to $400 for three "over-age" 20-year-olds. I'm not aware of any other team sport in North America where for-profit businesses are built around teenage athletes. A third-world child labour activist could argue that major junior hockey club owners exploit children. But they wouldn't ... Read the rest of entry »

Is housing the homeless a good investment? Hicks on Biz column originally published in Edmonton Sun, Sat. May 12, 2012

It’s a hopeless economic proposition to prove or debunk.  That the $15 million spent in 2011, to house and support 1,789 formerly homeless Edmontonians within an umbrella of complementary social programs coordinated by The Edmonton Homeless Commission, is money well spent. The idea of this column was to look at the cost/benefit ratio of that $15 million not through compassionate eyes (for who can argue with any social program that relieves the misery, loneliness, mental and physical pain of those reduced to having no place to call home) but through practical eyes. In the third year of its 10 year mandate from city hall to end homelessness in Edmonton, the Homeless Commission announced last week that, over three years, 1,789 individuals who were once homeless are now housed. The “cost avoidance” argument can be easily proved. – before and after arguments are shut-and-dried. The newly housed, with the right social supports, do cost much less for emergency room use, ambulances, incar ... Read the rest of entry »

Time to talk Upgraders: Hicks on Biz column originally published in the Edmonton Sun on Sat. May 5, 2012

(This column originally appeared in the Edmonton Sun, entitled "Time to Talk Upgrades" with 17 comments as of May 7, 2012. Comments almost all decrying the shipping of oil sands bitumen without value-added processing in Alberta.) About six years ago Greater Edmonton was hot-to-trot about the possibility of seven upgraders being built (over time) in Alberta’s Industrial Heartland – the petrochemical industrial zone around Fort Saskatchewan. Such a vision it was: Seven super-sized, pre-refineries, taking in the molasses-like heavy oil or bitumen from the oilsands at one end, turning out sweet, easy flowing “synthetic” (or refinery-ready) oil at the other. Each upgrader would pump billions of new dollars into the local economy and keep the trades busy for decades without ever having to leave home. Once up and running, the upgraders would still continue to expand to handle the ever-growing bitumen supply, hire hundreds of operators, pay local taxes, and so on. With today’s techno ... Read the rest of entry »

Include oil & gas, and Edmonton is a hotbed of new technology - originally published in HIcks on Biz column of the Edmonton Sun, April 14, 2012

There’s a default position in Canadian business that goes unchallenged.Canadians aren’t innovative. Canadians aren’t productive. Canadians aren’t inventive.The mantra is repeated in northern Alberta. Our economy doesn’t “do” research and development. We’re scared of risk and the fear of failure associated with new technology, new processes. We’re too used to the easy life produced by an endless gusher of oil and gas.I’ve had the opportunity to explore this intriguing topic, working a few days a week as an adviser to TEC Edmonton, an incubator and accelerator of technology-intensive startup businesses.The business gurus have got it all wrong. This city and region should proclaim itself just as techno-savvy as “knowledge-based” cities like Boulder, San Antonio or Kitchener-Waterloo.Four events will counter the perception of Edmonton being ho-hum in “conventional” technology — the Analytics, Big Data and the Cloud conference, April 23 to 25 (abtech.ca), the 10th annual TEC VenturePrize Awards and Dinner (venture ... Read the rest of entry »

Worker shortage looms again: Hicks on Biz column originally published in Edmonton Sun, April 7, 2012

Remember the bumper sticker from the ‘80s, “Please God, let there be another oil boom. I promise not to piss it all away the next time.” That, of course, was two booms ago.Now we are on the cusp, the very beginning of the third.We seem to be getting smarter at this, but not much.All the corporate talk at the downtown Ricky’s Grill in the mornings, at the Hardware Grill at lunch, is about the impending labour shortage.“Workforce, workforce, workforce,” says Edmonton Chamber of Commerce President & CEO Martin Salloum. “That’s all our members are talking about.”Driven by the global need for our clean oil, Northern Alberta is relentlessly growing. New oil extraction plants come on stream nearly every month in the oilsands. Conventional oil wells are resurrected thanks to new technology. Natural gas is readying for an inevitable recovery once it can be shipped to Asia and replaces coal in electricity generation.Brains and brawn are needed for all the above. Geologists to find the energy, engineers to design the in ... Read the rest of entry »

Wanted: A simplified income tax system: Hicks on Biz column first published in the Edmonton Sun Sat. March 31, 2012

So it’s A) election time in Wild Rose country, B) budget time in Ottawa and C) tax time across the country.A time of ideas, of debate, of what government can and can’t do.But for heaven’s sake, the average Edmontonian keeps getting worked over!It’s about our wretched, overly complicated and deeply deceptive tax system.When the Income Tax Act was introduced in 1917, it was 11 pages long.Today, it’s 3,000 pages.Tax “credits” have crept a long, crept along.With every new government budget, a new tax credit is introduced for this, for that, for everything under the moon.Politicians love tax credits (or rebates, or deferrals, or deductions, or non-refundable tax credits, or allowable business expenses, machinery depreciation allowances, adjustments, QC or YET abatement, WITB, RDSP, UCC, CCA, SH&RD … ).Tax credits make’em look good. Here’s a tax credit for a bus pass, for your kid’s soccer fees, or a tax rebate if you buy an energy-efficient fridge. Vote for me!!!The corporate world and the politicians are hooked o ... Read the rest of entry »

Complicated credit cards - what's the best deal? Hicks on Biz column originally published in the Edmonton Sun March 23, 2012

How complicated can credit-card comparisons get? It was a simple exercise in personal finances — I thought. Out of all those credit cards, those thousands of credit cards, which ones offer the best value for loyalty program points? Travel points are addictive. To qualify for trips, you end up packing every purchase possible onto your credit card. Which is what the credit card issuer wants. Even if you never pay a dime of interest, they collect a 1% to 3% fee from the merchant as a transaction fee. Complicated! To keep things simple, I only compared travel-point cards to travel-points cards, and cash-back cards to cash-back cards. At least I thought it would be simple. To calculate the value of travel-point cards, I'd measure the number of points needed for the equivalent of a seat sale to Vancouver, say $400 excluding taxes. And cash-back cards, what could be simpler? If you're packing $30,000 a year, or $2,500 a month onto your credit card, how much cash do you get back? (Assu ... Read the rest of entry »

Many Ways to Move Our Oil - Hicks on Biz column from The Edmonton Sun of Sat. March 17, 2012

One way or another, our bitumen (heavy oil) will get to China. There's a myth building up that the proposed but seriously opposed Northern Gateway pipeline is the only option to get oil from the oil sands to Asia.Not true. It's the most practical and likely the cheapest option, heading straight as an arrow from Edmonton through the northern B.C. interior to the port town of Kitimat.Here's the deal.We now produce 2.9 million barrels of oil a day (MBD) in Western Canada, about 60% of that from the oil sands.We can't come close to using that much - 2.1 million barrels are exported, fairly easily at the moment through existing pipelines, 99% of it heading to the Excited States.The source of our wealth? Do the math! At $100 a barrel, that's $210 million a day — or about $75 billion a year.By 2020, only eight years, we'll be up to 3.5 million barrels a day. Of that, 80% will be from the oil sands.The pipelines will get crowded. The last thing we want, as the principal beneficiaries of this thick black gooey stuff, ... Read the rest of entry »

Big Bucks for young Albertans: Hicks on Biz column originally published in the Edmonton Sun, Friday, March 9, 2012

A friend of mine had a kid finishing high school. He was a smart, practical young man with a good attitude, but he didn’t have a clue what he wanted to do. They made a practical decision. They looked at the projected earnings for grads from NAIT’s technology programs. Off he went to enroll in the course with the highest earning potential. Good decision. Three to four years after graduation, he’s an electrical engineering technologist. Now 24, this young man is pulling down $100,000 a year in base salary, half that again in overtime. Plus benefits. Welcome to Alberta, 2012, where young adults – with the right diploma and a willingness to work – are often making $100,000 a year. There’s cause for concern – too much money, too fast, too young, unrealistic expectations, and so on. But as long as the building boom continues in the oilsands (and it will continue, with $20 billion being spent on construction alone in 2012) , skilled ... Read the rest of entry »