To recap on my previous entry: my husband and I have taken on the challenge of starting up a home-based business that we’re operating in addition to working our regular day jobs. No, I won’t be promoting or publishing either the business name or the industry here – that would be taking unfair advantage of you and my employers (supremely supportive though they are).

When I last left off, we had just finished three months of online training. Late November found us in Halifax for five intense days of in-person training. Then, on December 1, we were let loose on the world. Tossed from the nest. Told to spread our wings and soar. We’re soaring alright – as fast and as far as our gimpy wings will take us.

Since officially opening our e-doors (it being a mostly online enterprise), we’ve shamelessly networked the heck out of our family and friends, getting them to distribute our business cards and promotional material to their respective networks like it was the world’s most sought-after Halloween candy. Plus, we set up a website and solicited subscriptions to our e-newsletter. And we’ve mailed a notice of our business opening to everyone in our home town. Heck, even one of our Christmas gifts was a tongue-in-cheek promotion of the new company.

The result of that feverish marketing? A promising number of enquiries about our products and services, which are teaching us just how much we don’t know. Learning “curve” doesn’t come close to describing it: it’s more like trying to climb Mount Everest, only you have to figure out how to use the climbing gear as you’re on your way up. In some cases, we’ve had to find the gear first, then try learning to use it.

A recent phone call to a supplier left both partner and I feeling like the biggest losers on the planet. We’d called looking for answers to what we thought were simple questions, only to find out our passwords wouldn’t work and we couldn’t access the responses. Imagine the frustration when we realized the problem was that we had been trying to login to the wrong website. Needless to say, voices were raised and cross words were said (not at the supplier, but ourselves).

In case you’re wondering, we do have head office support, but it’s more often in the form of general directions than a specific step-by-step guide. Hint to head office, if you’re reading: when someone’s new to the industry, and they’re trying to get set up as quickly as possible, telling them to “experiment with it until you’re more comfortable” does not inspire confidence.

The good news is that we are learning, and the more we learn, the more excited we get about the products we’re selling. And, the more excited we get, the more excited our potential clients become and the more enquiries we get. We’ve already had a number of sales, with at least double that number waiting to be reeled in.

But even this has its challenges. Mainly, the time crunch. How can you build your business when you’re spending all your time working on your business? Seriously, I’d like to know.

Hmmm. What else have we been doing? Ah yes, business expenses and taxes. One of the best pieces of advice we were given was to consult an accountant in the very early days and get some advice on how to set up our accounts. Thanks to that, we have an incredibly basic but effective accounting system. We keep the receipts of every business-related item we purchase (not credit card slips, mind you, but actual receipts). This includes gas, car insurance, mortgage fees (home office remember), office supplies, furniture, computer equipment and upgrades, utilities and municipal fees such as taxes and business permits. With regards to the home-related expenses, we’re allowed to charge a percentage of the expenses that is equivalent to the size of our home office in relation to the square footage of our home.

Loyola Hearn talks hockey, direct flights and his plans for dealing with seal hunt protestors — assuming they ever show up

It was a mildly disappointing day for Canada’s 28th Ambassador to Ireland. March 15 is known as “seal hunt protest day” throughout the European Union and Loyola Hearn’s staff had advised him it might be a good day to make himself scarce.

“Are you kidding,” the former Minister of Fisheries and Oceans reports thinking. “Bring ‘em on.”

Hearn’s staff needn’t have worried. Instead of the expected parade of protestors, there wasn’t a placard to be seen outside the Wilton Terrace consulate.

Even if they had appeared, it’s hard to picture this particularly good-willed ambassador going head-to-head with anyone. Reclining on the leather sofa in his modestly furnished corner office, sipping coffee and offering visitors a light snack, Hearn is a study in genteel hospitality.

So comfortable and relaxed does he appear that you could easily assume he must have the least stressful job imaginable. And that the role of Ambassador entails little more than a merry round of chit-chat, that it’s just a grand gold-plated send-off for retired politicians. Which is pretty much how Globe and Mail columnist John Ibbitson described it in on November 19, 2010. He said Hearn had been awarded the “plum Dublin post” for his “good and faithful service” to Stephen Harper’s Conservative government.

While Hearn is the first to admit that socializing is an important part of the job, he says he “didn’t come over here to sit around.”

“I never had a drink in my life. If I did, I wouldn’t have the time to have a pint. But that’s what I wanted. …It’s a great opportunity to do something worthwhile.”

The opportunity is indeed considerable.

According to Canada’s Minister of Finance, Jim Flaherty, two-way trade between Canada and Ireland was worth $1.8 billion in 2010. “Stronger trade and investment links… will support growth in the two countries and help increase both countries’ standard of living.

“Both Ireland and Canada profit from the trade between our countries and Canada is a good destination for Irish investment. Strong, solid business opportunities, in particular in the services sector, still remain between Ireland and Canada and there is considerable scope to increase trade in investment services.”

The broader picture is that Ireland could well be Canada’s springboard to a larger sphere of global influence. It’s no secret that the Eurozone is in an economic crisis. Greece, Italy, France and other nations have seen skyrocketing debt, rising unemployment and nigh-unbearable increases in the cost of living. Canada hasn’t been immune to the malaise, but its situation is nowhere near as dire.

“Our government paid down significant amounts of debt when times were good,” said Flaherty, “and we kept our debt to GDP ratio well below our G7 counterparts.

“Canada did not suffer one bank failure throughout the global financial crisis.”

In other words, the Maple Leaf has become a symbol of financial stability. Though the Irish have already made significant progress in turning their economy around, any Canadian success in helping them recover more quickly could see other European nations lining up for a good dose of Canadian sensibility.

On the flip-side, Canada’s big break could just as easily go bust. Which is why this country’s ambassador to Ireland has never been a more strategically important role. Flaherty, for one, believes the country is “fortunate to have someone of Loyola Hearn’s capabilities and enthusiasm representing us in Ireland.”

When Loyola Hearn retired from politics in 2008, he says he fully intended to settle down for good in his hometown of Renews. But he couldn’t say no to the chance to work in Ireland. “I had always said that the only thing for which I’d lace up again was if I got a chance, in some capacity, to work with Ireland.”

When Pat Binns’ term as ambassador was cut short (he was appointed Canadian Consul General to New England), Hearn was invited to take on the role. It’s a position he seems almost born to fill.

Hearn was born and raised in a part of Newfoundland known as the “Irish Loop” for its strong concentration of Irish settlers. Area residents sound so Irish that parish priest, Father Peter Golden, sounds just like one of the locals – and he’s actually from Ireland.

Ambassador Hearn laughs as he recounts the number of times he’s had people on the greener side of the Atlantic argue with him that he’s one of their own. “They think I’m from Waterford or Wexford. ‘Yes,’ they’ll say, ‘absolutely, you’re from Waterford.’ They don’t believe me when I say I’m not. They think I’m fooling them.”

Fitting in has its advantages. “If you want to get people to include you in the planning process, you have to be one of them. It’s not a difficult job for me.”

His accent, however, is only part of the story.

In its basest form, an ambassador’s job is to represent one country in another country. Within that definition, however, are three distinct spheres of influence. One involves the facilitation of bi-lateral trade. Another entails observation of the political situation and building cultural ties. The third requires management of consular property and personnel.

Altogether, the three divisions ensure that the ambassador is kept hopping. Hearn reports that he regularly sees two to three groups of Canadian visitors every week, people who stop by the embassy when they’re in the city. “If they’re on the way in, we can recommend a few things for them to do. If they’re on the way back, we can gather from them what they saw, what they got out of it and what they can take home.”

He also works with Canadian companies that are in Ireland as well as Irish companies that want to invest in Canada, providing information, offering advice and making contacts. He holds receptions that enable musicians, artists, authors and others to establish ties with appreciative Irish people. And he arranges meetings for any visiting Canadian government officials.

There’s a strong argument, however, for the case that Hearn’s greatest successes are in the “extras” he undertakes on his own initiative. A recent visit to Tralee is a fortuitous case in point.

While stopping in town for lunch on his way to Dingle and Valencia, he decided to drop by the county council office to say hello. Upon asking for directions at the hotel where he’d stopped for lunch, the woman at the front desk said she knew the deputy mayor and would give him a call.

“Before we’d finished our sandwiches, the deputy mayor arrived and took us to the council office for a chat with the regional manager. Turns out that they had been meeting recently. Valencia is where they laid the ransatlantic cable on this side of the Atlantic and they were wondering how to make connections with people at the other end (Heart’s Content, Newfoundland). They were wondering about embassies and did ambassadors get involved in stuff like that and do they ever go out of town — and I walked into their office. Two and a half hours later, we had it all settled.”

On another occasion, he led a multinational delegation that met with Irish officials regarding an agricultural issue related to wheat. Ireland was initially neutral on the issue and potentially even negative towards Canada’s position. But after Hearn’s delegation met with the Irish, explained the situation and identified how it could affect Ireland negatively, they changed their vote and sided with Canada.

Just one year into his four-year post, Hearn says there are two things in particular that he wants to accomplish before he returns home: he wants to see hockey played in Dublin, and he wants to see year-round direct flights between Canada and Ireland.

At the moment, there are direct flights between the two countries only during the summer months. This even though Canada has passed the United States to become the second-most popular destination in the world for Irish young people (Australia is first). What difference would direct flights make? Hearn says that it took him 34 hours to get home to Newfoundland from Ireland last Easter. “If we had a direct flight between here and St. John’s, it would be a little less than four hours.”

Hearn is working to change that. He, along with representatives of Tourism Ireland, the City of Dublin, Dublin Airport Authority, the Irish-Canadian Society, the Ireland-Canada Business Association, St. John’s Airport Authority and Halifax Airport Authority, are members of a committee that’s made contact with a number of airlines. He reports that interest has been expressed by some of them. “We are encouraged,” he says, while acknowledging that these things take time.

Hockey, however, is moving forward at a faster pace. An official NHL size rink has been built in Dublin and, as of press time, is almost ready to open. Hearn doubts that he’ll play (“I’ve been too long off skates”), but he has been asked to drop the first puck. “Hockey is Canada,” he says, “it’s another door opener. Hopefully, it’ll culminate in closer relationships, better knowledge of each other, to the benefit of both countries. If I can say I helped that a little bit (during my time here), it’ll be a real feather in my cap.”

And if the seal hunt protestors should show up before he heads home for good, “I would invite them in,” says Hearn. “I’d like to offer them a cup of tea or coffee and try to get to the bottom of what’s behind it all. Why are they here? Who’s sponsoring them? What’s behind it all?

“More than anything, I’d like to really sit down and have a chat. That’s what I do.”

Every week, I’d tag along with Marlin Perkins and first-name-only “Jim” as they encountered animals in their natural habitat. Come to think of it, Jim did most of the encountering while Marlin narrated. Nonetheless, their tag team efforts did a great job of showing lions and tigers chasing giraffes and wildebeest, birds on the hunt and evasive prey doing its best not to get caught. It was a tough lesson for a young age, but I soon learned that the wild really lives up to its name — and you never want to be left behind by the herd.

The same is true in business. You’re either first, or best, or fastest – or you’re gone. Fall behind and you’ll be picked off by hungry predators.

Which is why we here at Atlantic Business are dedicated to constant improvement. Yes, we’re the most award-winning business magazine in the region. And yes, we have the largest circulation in our class (audits put us 39% ahead of our closest regional competitor). We use only high quality recycled papers and inks in our print products and work hard to take full advantage of electronic delivery systems. All of our stories are available on our website in text and PDF formats (in case you hadn’t heard, we’re smartphone-friendly too). We’re also active on Facebook and Twitter, steadily building an ever larger and more loyal audience.

It’s all good stuff, but good is never enough.


In this jungle, it’s you — the reader — who is king. Call it the law of the eyeball: either we deliver must-read content or you look elsewhere. So when you talk, we listen — very, very closely. Which is why, based on your submissions to our annual readership survey, we’ve refined some elements of the magazine.

You may have already noticed one of them: our expanded and refined contributors’ page. We’ve adopted a more insightful and entertaining presentation style, allowing our writers and photographers to explain some of the behind-the-scenes work that goes into content creation.

Speaking of contributors, we’re proud to say we’ve added a well known and highly respected name to our editorial roster. Stephen Kimber is a professor of journalism at University of King’s College as well as an award-winning writer, editor and broadcaster. His work has appeared in almost every major publication in Canada, from the Globe and Mail and Toronto Star to Canadian Geographic and Financial Post. As our new contributing editor, he’ll strengthen our coverage of Nova Scotia’s business scene. Follow the jump to find his inaugural column.

We do, however, have some words of caution as you move forward: don’t panic when you can’t immediately find John Risley in his usual slot behind the Upfront section. He’s not gone, he’s just moved up the food chain. His new home is on the most valuable piece of real estate in the magazine, just inside the back cover. We thought it was a more fitting locale given his popularity with readers.

We’re also making adjustments online by beefing up our coverage of home-grown Atlantic Canadian businesses with our Business of the Month club. Each month, we’ll select a subject from submissions received on our website and publish an indepth profile of that company on atlanticbusinessmagazine.com. Plus, we’ll promote the profile via our e-newsletter and on our Facebook and Twitter channels.

Still hungry for more? We’re also partnering our online publishing section with student journalists throughout Atlantic Canada and posting their reports for your electronic consumption. It’ll give you a taste of emerging talent, provide next-generation journalists with a public platform for their work and boost our online offerings.

After all, there really is strength in numbers, and we’ll need that if we want to stay in front of the pack. We are Atlantic Business Magazine. Hear us roar.

The de-amalgamation of Halifax Regional Municipality has been a recurring theme since the day of its reluctant formation in 1996. If certain prominent residents have their way, it’s going to be one of the central issues in next year’s municipal election.

Logistically speaking, it’s hard to comprehend why the provincial government of the day forced HRM’s 5,850 square km. of scattered settlements and cosmopolitan cores to the altar in the first place. Bigger than the entire province of P.E.I. and spanning 165km from wingtip to wingtip, it must be one of the most unwieldy municipalities in the country.

A majority of residents agree. At least, that’s what five years of polling results from Corporate Research Associates seem to say. Specifically, the polls show that from January 2005 to September 2011, 48 to 61 per cent of residents 18 years of age and older support the idea of splitting HRM into two municipal units: one for rural residents called the County of Halifax and one for urban residents called the City of Halifax.

If CRA is accurate — and they claim they are, to within plus or minus 4.9 percentage points, 95 times out of a 100 — Coun. Steve Streatch is in the minority.

Not that he cares. The representative for Musquodoboit Valley – Eastern Shore doesn’t give a lot of credence to CRA’s polling results, in this instance at least. “Don Mills (CRA’s president and CEO) is seeding public opinion, not searching for it,” asserts Streatch, referencing the fact that the pollster has asked the same question 18 times in five and a half years.

“(I sense) a distinct disdain from him for the rural way of life.”

Mills, for his part, doesn’t deny that he believes dividing the municipality into two distinct municipal units would be in the best interests of all citizens. But he does take issue with the criticism that he doesn’t respect his country cousins. “Completely contrary. I believe that rural citizens are not as well served by the current municipal structure as they were previously under the old county of Halifax model. I do have complete disdain for parochial politicians, however, who are unable to see the better picture.

“The current governance model … has proven to be essentially ungovernable given the distinct differences in the needs of those living in the more than 130 communities that compose HRM.”

Malcolm Fraser doesn’t like the “d” word (as in de-amalgamation), but he agrees with Mills that the existing governance structure isn’t working. Fraser is president of ISL web marketing and development and chair of Citizens for Halifax, though he says he wasn’t speaking in either capacity for this interview. And it is his personal opinion that there needs to be more local management. “There are all sorts of neighbourhoods in any city. Those neighbourhoods should have a say in how money gets spent.”

An adjacent issue to governance reform, according to Fraser, is tax reform. “The taxes that a business pays in Bayer’s Lake versus Quinpool Road are substantially different. We have a sprawling city. Infrastructure is expensive to put in place (in rural areas), and it’s subsidized by downtown taxpayers.

“Is it fair that only one or two per cent of all tax dollars raised in the downtown is spent in the downtown? The imbalance is causing the core to crumble.”

Streatch describes such comments as “insulting” and “narrow-minded.” “What would they do if we cut them off from the water supply? What if we installed a toll at the landfill?

“There are benefits to being such a large and diverse community. And we (HRM council) are doing the best we can to support both the rural and urban parts of our municipality.”

And no, I’m not going to tell you what the business is or what we’ll be doing (other than to say it’s home-based and involves a partnership with a larger organization). More than that is neither important nor necessary — for this forum anyway.

My purpose here is not to promote our particular business venture (and I won’t — not here and not in print), but instead to promote discussion and debate about business ownership in general. As editor of a business magazine, I’ve been writing about small business issues for over 13 years; now, I’m finally experiencing it for myself.

I’ll blog about it from time to time, and hope you jump in to celebrate our successes or offer advice when we’ve obviously gone off the rails (a little commiseration wouldn’t go astray either).

I’ll start by discussing our first loss: innocence.

Shiny-eyed dopes that we were, we thought we knew everything there was to know about the business before we signed any contract. We checked it out with the BBB. We cold-called other partners around the country to see what the parent company was like to work with. We examined and re-examined our budget to ensure we could handle the required cash investment.

Yep, we had all our homework done — we had it all figured out. We climbed aboard the entrepreneurial train, and started sharing the news with family and friends.

Incidentally, we were surprised by the number of people who either didn’t acknowledge what we’d told them, or seemed to be smirking at us in disbelief. Still, reactions were, for the most part, encouraging and we continued to smile broadly at what we thought would be our brighter future.

Then, training started.

It’s a completely new industry to the both of us, so we had expected it was going to be a steep learning curve. What we didn’t expect was that it would be the equivalent of a compressed full-time university course load, made all the more challenging because we both have full-time jobs.

I can’t help but laugh when I think of the night we started training, eagerly hurrying through dinner and dishes to begin our first webinar. It wasn’t long before that eagerness was transformed into a supreme loathing for computer screens (for me, anyway). And there have been times when Hubby was convinced we’re “effed.”

A two-page checklist of webinars later, we thought we’d put the worst of it behind us. But nooooo — the bonus for passing the first dozen online training sessions? Another 40 hours each of online technical training involving highly nonsensical coded gibberish. Oh goody.

But wait, I haven’t told you the best part yet. When we have that done (and remember, it’s all nights and weekends), we win five full days of intense hands-on learning. And we’ve learned from talking to those who’ve been there, done that — with the telling usually accompanied by a cackle and malicious grin — that this final training bootcamp will have us cursing the day we ever signed up for this darned thing in the first place.

Funny how no one thought to mention any of that before we signed up. The moral of the story? Misery loves company.

Know what’s funnier still? We haven’t lost our enthusiasm for business ownership. Challenging as it has been to slog through the learning materials, we know it’s a means to an end. As long as we keep that end goal in sight, I have a feeling we’ll be fine.

Next time: our steps and missteps in setting up the business, from ownership structure to GST registration.

Speaking from experience, I know there’s a lot more to it than that. But how much more? And, as taxpayers, are we really getting our money’s worth? Too often, it seems as if we’re spendng too much money and getting little in return.

With provincial elections in the offing for both Prince Edward Island and Newfoundland and Labrador, I’d love to see someone with the guts to pose – and honestly answer – the question: what is the role of government? What does it do, and what should it be doing, for its citizens?

Think what an interesting platform that would be for a politician to take: a pledge to eradicate all government spending that is not deemed essential to the role of government. What an intriguing spin on the ancient ”render unto Caesar” argument.

What would go? Marketing and promotional funding? Economic interventions? Studies and consultants reports? Start-up dollars? Would we put more money into health care and education?

Let’s get the conversation started. What do YOU think is the role of government? Would you like to see government spending restricted to services directly related to its mandate? Do you think this would help or hinder our society?

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July 25, 2011, was the worst kind of Monday for the people headed to work at 50 Innovation Drive in Bedford, Nova Scotia. One of them, tuning into CBC Radio as he always did, was stunned to hear that his employer, BlackBerry creator Research In Motion, was laying off 11 per cent of its global workforce. He continued along his regular route, parked his car in the company lot and headed inside, making it to his workstation without incident. By the end of the hellish week that followed, close to 30 friends and co-workers wouldn’t be so lucky.

One woman, on her first day back to work after a two-week vacation, was intercepted by security on her way in, escorted to HR, then shown the door. She’d been with RIM for six years. Another staffer, a newlywed returning from his honeymoon, reportedly punched a few hours before he, too, faced the firing squad.

It was a startling turn of events for a company which, on another 25th day in the not-so-distant past (November of 2005, to be exact), was hailed as “a leading designer, manufacturer and marketer of innovative wireless solutions for the worldwide global market.” At that point, just six years after the initial launch of BlackBerry, RIM boasted a customer base of over four million subscribers – and growing.

More relevantly, in the eyes of the Halifax citizenry, the month before Christmas 2005 was a time of celebration. That was when RIM announced it had chosen HRM as the home for its new technical support operations centre. The official press release crowed about the estimated 1,200 people who were to be hired at the centre over the next five years, a feat which many believed deserved the provincial government’s pledge of a $14-million payroll rebate and $5-million recruitment and training incentive package. Nowadays, they might not be so sanguine.

This has not been RIM’s year, to put it mildly. The rising popularity of Android and Apple have pulverized the once-invincible BlackBerry – seriously, is there anyone who doesn’t want an iPhone? – and RIM’s response has been to release “new” products that are essentially upgrades of existing models. Excuse me while I yawn.

While clients are left less than impressed, shareholders are screaming for someone to do something about the rapidly depleting market share and at least one analyst (Ironfire Capital’s Eric Jackson) predicts the company will be dead by 2013.

And what motivating, inspirational word has been issued from on high to help defuse the tension? Bupkiss.

Speaking as an industry outsider, it seems as though both RIM co-CEOs, Mike Lazaridis and Jim Balsillie, have lost their mojo. If there’s any truth to an “open letter to BlackBerry bosses” from an anonymous senior executive – and there must be something to it, as RIM issued an official response (read the original post and company response at bgr.com) – outside opinion may well be accurate.

The “open letter” states that staff at all levels have lost confidence in the company. It also argues that the company has essentially forgotten how to be innovative. Sure, there have been rumours of a marvellous, showstopping QNX operating system that’s going to wow the heck out of consumers and take RIM back over the top, but customers are tired of hearing that song. According to “open letter,” QNX should have been released several years ago.

Illustration by Iain Keith Murray

It’s a situation that would typically be described as actions speak louder than words – except RIM management doesn’t appear to be either talking or listening, not even to their own employees.

A staffer at RIM Halifax agrees: “We’re afraid to say anything, speak up or voice objections anymore. Everyone’s afraid of going on the chopping block or getting passed over for opportunities.

“I can go on for days about how our higher-ups have no idea about technology and where the industry is going. We are numbers and as long as we answer the phone, it (innovation) doesn’t matter anymore.”

Yet, incredibly, there’s nothing that RIM staff want more than to get “their” company back – the business they were proud to work for, the firm whose confident leadership epitomized techie cool, the international corporation that boldly went where its competitors hadn’t dreamed of going before.

It’s likely that many more heads will roll before RIM gets back on track. So far, they’ve been the wrong ones.

Our biggest communications companies obviously aren’t reading the same books as me.

Case in point: when my most recent phone bill arrived in the mail, my monthly fees had increased by $30. Yes, THIRTY DOLLARS!!! Why? Because the package I’d been offered this time last year had expired. According to this latest bill, the company was expecting me to pay $65/month for phone service, call waiting and a long distance package. I have my own phones, and I have less than half an hour of long distance charges a month.

Assuming there was a mistake in the bill, especially since this provider was offering much better deals to new subscribers, my husband called the phone service provider – only to be told that nothing could be done. So he threatened to switch providers if they couldn’t offer us a better deal. The person on the other end of the line didn’t have the authority to offer anything better, but said he would get a higher up to call us back.

Within minutes of hanging up, providence called – in the form of our current provider’s competition. (As an aside, it’s enough to make you wonder if someone is listening in a la Murdoch?) The competitor, with whom we had never done business, offered us phone service plus free in-province long distance (five cents/minute for other LD calls), plus call waiting and call display – all for $35/month, taxes included.

As far as we were concerned, it was a done deal. We were willing to switch providers right then and there. Then our current provider called back, and matched the competitor’s offer. Since it meant we wouldn’t have to pay disconnection fees, we stayed put. For now. This time next year, after another 12 months of on-time payments, we know we’ll have to again fight for the same treatment that all communications providers seems happy to offer new customers, but not their current clientele.

It’s not just my provider either. From speaking to friends and colleagues, it’s a situation endemic throughout the communications spectrum.

The moral of the story? If any of these companies want my loyalty, they’re going to have to earn it. But from what I’ve seen, they don’t want it.

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Deep Panuke closes
in on production mode
By the time this article is published, the Deep Panuke Production Field Centre should have completed its two-month transatlantic crossing from the Middle East and arrived at the Mulgrave Marine Terminal in the Strait of Canso. Which means the PFC could be in place — 250 kilometres southeast of Halifax — and producing first gas by early October.

It’s been a long time coming.

Calgary-based Encana Corporation announced its decision to develop Deep Panuke in 2007. The first public signs of delay came in February 2010 when he company said the natural gas project offshore Nova Scotia would not be operational by the end of the year. At the time, they predicted the field would be in production by the middle of 2011. They’ve since had to tack on another three months (assuming first gas appears in October).

The schedule is not the only thing that’s expanded.

Capital costs, too, have grown – from $760 million to $960 million. Weather and construction delays have been blamed for the project’s higher price tag. And there’s been lots of blame going around.

As reported by allnovascotia.com on April 12, 2011, Single Buoy Moorings (SBM) — the Netherlands-based company contracted to provide and operate the PFC — is suing Encana for compensation related to increased costs caused by platform design changes. SBM had reportedly “designed the platform to reduce CO2 content of reservoir gas from 3.5 per cent to less than three per cent. SBM claims Encana later changed the CO2 content to less than two per cent.”

Other contentious issues include delays related to SBM’s inability to have the PFC living quarters module built in Nova Scotia (SBM says Encana insisted on it until the only N.S. bidder withdrew its offer) and the allegedly untimely provision of geotechnical data.

SBM is not the only disgruntled supplier. Rowan Companies, which leased the Rowan Gorilla III jack-up rig to Encana for its drill program, alleges it is owed almost $18 million in unpaid drilling fees. Encana denies the allegations.

Asked to comment on the latest developments in the SBM lawsuit, Encana spokesperson Lori Maclean declined to elaborate. “Both parties continue to work together. We are focused on getting this project producing. That’s what’s happening right now.”

Distracting though the lawsuits are, they haven’t changed the fact that industry views this as an exciting development for Nova Scotia. Deep Panuke is the province’s second natural gas project; it’s been over 10 years since the Sable Offshore Energy Project started production.

Delays aside, project-related activity ramped up significantly in Nova Scotia over the past year and a half. In 2010 alone, Encana spent $305 million on Deep Panuke, providing more than 1.1 million person-hours of work to Nova Scotians (provincial residents received 2.1 million person-hours of work over the total project thus far).

Perhaps the biggest excitement is that felt by Tim Gilfoy, CEO of the Strait of Canso Superport Corporation. Subsea 7, Tideway and SBM will all have significant operations in play at his port throughout the summer, and it’s his job to coordinate the activity. Subsea 7 has the contract for Deep Panuke’s infield piping connections while Tideway is installing rock to stabilize the infield flowlines and gas export pipeline.

An estimated 100 people will work on the PFC alone when it arrives from Abu Dhabi and goes through the final preparations for hook-up and installation.

It’s good business,” asserts Gilfoy, “and a good opportunity to prove ourselves. We’ve invested significantly in our Mulgrave Marine Terminal and designed it specifically to accommodate offshore petroleum activity.”

He has about three months to show what he and his port can do. All the preparatory work must be complete for when the PFC is in place and operational. That’s expected in Q4, this year.

By the numbers

The Deep Panuke natural gas field is located on the Scotian Shelf, approximately 250 km southeast of Halifax, in 45 metres of water. Calgary-based Encana is the project operator of record.

An estimated 632 Bcf (billion cubic feet) of recoverable sales gas will be produced from the site over an eight- to 18-year period (for a mean field life of 13 years). The cost to develop Deep Panuke, not including expenses on a go-forward basis, is an estimated $960 million. Gas is currently trading on the New York Mercantile Exchange at a rate of $4.12 per Mcf (June 16, 2011).

The project’s jack-up Production Field Centre (PFC) will be tied back to production wells with subsea flowlines umbilicals. The project will have four producing wells and one injection well.

Approximately 175 km of pipeline will connect the PFC to Goldboro, N.S., where it interconnects with existing
Maritimes & Northeast Pipeline facilities.

Repsol YPF, a global energy company headquartered in Madrid, has a contract with Encana to purchase all
Deep Panuke gas. They plan to sell the gas to Canadian and U.S. customers. The contract is valid for the life of the project. The terms of that contract have not been made public.

Encana contracted Netherlands-based Single Buoy Moorings (SBM) to provide the PFC and operate it for eight years.

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Marine highways still most cost-effective

The federal government’s 1995 National Marine Policy was intended to divest Transport Canada of responsibility for the nation’s ports. Why? So that ports throughout the country would be less dependent on taxpayers for revenue. Port users, not voters, were supposed to foot the bill.

According to a December 2010 report by Gardner Pinfold titled Economic Impact of Independent Marine Ports in Atlantic Canada, the direct result of that decision is that all independent ports throughout the region are struggling to find sufficient revenue, especially for infrastructure upgrades, marketing and business development. Worse, they are competing with each other for a survivalist share of import and export trade.

Unfortunately for them, there’s only so much of that trade to go around. With 90 ports throughout Atlantic Canada serving a regional population of just 2.25 million people, and none of those ports operating at maximum capacity, it would be easy for someone outside the industry to conclude that the simplest solution is to cut back, or rationalize, the number of ports.

Doing so would have an immediate and profoundly negative effect on consumers. Marine transportation is, by far, the most cost-effective means of getting goods from one place to another. According to one industry insider who asked to remain anonymous, it costs $1.70 per mile for truck transport, $0.79 per mile by train and only $0.20 per mile by ship.

The best option then, by far, is to carry products by ship as far as possible. To again reference Gardner Pinfold, “each independent port has critical relationships with importing and exporting businesses.… It is not an economical option for Martin Marietta Materials and Georgia Pacific to acquire suppliers or export using any means other than the Strait of Canso port.”

Here, Atlantic Business Magazine offers a thumbnail sketch of some of the largest ports (by volume) in each of the four Atlantic provinces. Newfoundland Transshipment Limited is the exception; officials did not respond to interview requests.

Ports: what have they done for you lately?

Based on the 11 regional ports included in Gardner Pinfold’s report: Economic Impact of Independent Marine Ports in Atlantic Canada (December, 2010). Note: the four largest ports (by volume) were not included in the study.

• To the businesses dependent on them, ports represent 7,103 fulltime equivalent jobs, $388 million of earned income, and over $505 million worth of expenditures.

• Over and above their impact on businesses (above), ports and their related marine shipping generate $303 million in expenditures, 4,040 person-years of employment, total GDP of $232 million, and total salary income of $172 million.

• Wages and salaries paid by ports and related businesses ranged from two to three times the average earned income in their communities.

Ports defined

CANADA PORT AUTHORITY: a not-for-profit corporation with responsibilities for managing one of the national ports system ports. While the Government of Canada retains ownership, the CPAs have operational and managerial control. CPAs in Atlantic Canada include Belledune, Saint John, Halifax and St. John’s.

TRANSPORT CANADA PORTS: in the Atlantic region, Transport Canada (TC) operates a number of regional/local ports. Some of these ports have TC owned and operated wharf facilities such as Long Pond, Fortune, Roddickton and Georgetown. Some do not have TC owned and operated wharf facilities, but have been designated as “Public Ports” under Part II of the Canada Marine Act, such as Come by Chance, Sydney, or the Strait of Canso. Transport Canada has the authority to collect harbour dues and owns part or all of the waterbeds associated with these public ports. Under the Port Divestiture Program, all TC owned and operated regional/local ports have been identified for divestiture.

Strait of Canso Superport (N.S.)

2010 cargo: 31 million metric tonnes, including manufactured goods, petroleum products, pulp, newsprint, supercalendar paper, gypsum, seafood and break bulk (e.g. salt and aggregate).

Main clients: Newstar, NS Power, Georgia Pacific, Martin Marietta and Canadian Salt.

Natural advantage: A deep-water harbour, ice free year round. The Strait of Canso is 20 kilometres long, up to 1.5 km wide and has a limited depth of 27 metres. It has a single Seaway-max lock and can handle vessels that transit the St. Lawrence Seaway.