It`s Not All Doom and Gloom

IN THIS ISSUE: • Year End Tax Tips • Safety Certification • Win Website Design and Hosting
VOL 7, ISSUE #4 2008
PROFILE
HOUSING FORECASTS FOR 2009:
It’s Not All Doom and Gloom
A
cross Canada, there has been a non-stop barrage of news articles about the
foreclosures and housing woes of our neighbours to the south. As
Canadians, we should be thankful for our more conservative lending practices of our financial institutions.While a housing slowdown is inevitable, it’s not
insurmountable.And, you know what? It may not be as bad as you think.
At the very end of October 2008, the Canada Mortgage and Housing
Corporation's (CMHC) issued its fourth quarter Housing Market Outlook,
Canada Edition report.Yes, housing starts will moderate, but it is still seen as
“healthy.” Most economists agree that while prices are already coming down
from the red-hot days of yore, this is really a return to “normal” and “affordable” market conditions.
In fact, Bob Dugan, Chief Economist for CMHC, is quoted as saying,
"High employment levels, rising incomes and low mortgage rates have continued
to provide a solid foundation for healthy housing markets this year.”
When it comes to existing home sales, although they will moderate
from 452,225 units in 2008 to a predicted 433,375 units in 2009, the CMHC sees
existing home sales as “strong by historical standards.”Additionally, average forecasted prices will reach $306,500 in 2008 and $306,700 in 2009.
Keep in mind, predictions don’t always play out as expected. In 2006
we hit the 6th year of record highs for starts (226,000), and
CMHC predicted a big letdown in 2007. Instead, 2007 came in
at about 227,500, the 7th record year.
So, even though the media uses words like “plummet” to describe the housing market for 2009, the reality
is that many parts of Canada will be able to skirt the
housing crisis altogether. For example, Atlantic
continued on next page
From Enfield to Europe,
SCOTIAN HOMES ARE
ENERGY EFFICIENT
What do Canada, Germany, the Netherlands, Poland,
Latvia, Ukraine, Switzerland and Iceland all have in common? They are all countries in which you will find happy
customers of Scotian Homes. In addition to the 80 or so
homes it builds annually in Nova Scotia, the Enfieldbased company also builds 12 to 20 projects every year
internationally.
Meet Suzanne Bona, the second-generation owner of
Scotian Homes. Her father, Bob, was a shareholder in
Scotian Homes and bought the company outright in
1983. Suzanne grew up around the business, learning
everything from sales management to product development along the way. When Bob’s health began to fail,
Suzanne moved from sales manager to vice president in
2001. By 2003, Suzanne became president and took over
the company from her father.
Suzanne says building homes for European vacationers in Canada triggered an interest in exporting, and
soon Scotian Homes began to attend trade shows in
Europe, such as BAU a major building show in Munich,
continued on next page
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Housing Forecasts
- continued
Canada is still seeing great numbers and is so far not affected by the downturn. Saskatchewan and Manitoba are much
the same.
In the areas where activity is really going to fall off
previous levels, such as Alberta, B.C. and Ontario, it’s important to note that while activity doesn’t match the last couple of year’s records, if you look over a 15 or 20 year period, they are still doing extremely well.
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And, good news for
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given the choice,
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homeowners say
that, if their home
needed
major
renovations,
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would
rather renovate, than sell
and move.
"Despite
recent economic events, we've
noted that Canadians still believe a home is a
good investment and many are continuing with their home
improvement plans," said Catherine Adams, RBC's vice-president for home equity financing.
Most Canadians planning renovations will spend
less than $50,000 and indicate they plan to spend $10,801
on average - up about 10 per cent from $9,850 in 2007.
So there is no doubt, builders and renovators do
face challenges ahead. But in no way do we see the meltdown that is happening in the United States. In Canada,
mortgage arrears are low, and mortgage rates also remain
low. Governments are also moving to inject fiscal stimulus,
particularly in such areas as infrastructure financing, which
could really benefit the construction industry as a whole.
Builders have been anticipating the slowdown for
a number of years now.They know that 220,000 units and
over is not a sustainable figure. Demographics call for
approximately 175,000 in terms of expected household formations,so what we're looking at for 2009 is right where the
actual demand should be. Housing is a cyclical industry, and
we've finally met the pent-up demand of the last few years.
Finally, although homebuyers may be cautious,
housing affordability is quite good and home purchase
intentions remain high.
To see more province-by-province statistics, visit
CMHC online at www.cmhc-schl.gc.ca
Scotian Homes - c o n t i n u e d
to showcase the durability and affordability of their wood homes. To ensure
Scotian Homes’ success in the European markets, over the past 10 years
Suzanne has become fluent in German and French and some Spanish.
A certified member of the Canadian government’s SuperE program, each
home receives a unique identification mark to show that it has met stringent
standards with regard to energy efficiency, sustainability and healthy building
practices.
“We’ve always led with quality craftsmanship and energy efficiency,” says
Suzanne. “In fact, one of the Scotian Homes houses built in Germany was tested by the local building authorities and pronounced as one of the most energy
efficient homes ever built in Germany.”
But building energy efficient homes has been a long-time tradition at
Scotian Homes here in Canada as well. The company was named Canada’s R2000 Builder of the Year for 2007 by the Canadian Home Builders Association.
Prior to that, Scotian Homes earned a Peak Award from the Nova Scotia Home
Builders' Association for Building the Most R-2000 Homes in 2007. Suzanne
and her company have been recognized as Builder of the Year, Entrepreneur of
the Year, Renovator of the Year and even awarded the title of R-2000 Builder of
the Decade.
Every Scotian Homes house is either a registered R-2000 home, or is enrolled
in the EnerGuide for New Houses program. Over a two-year period alone,
Scotian Homes has saved 400 tonnes of greenhouse gas emissions and saved
over $46,000.00 in total energy savings.
“We build duplexes as well as single-family homes and approximately 65%
of our homes are custom,” notes Suzanne. “With the current housing market,
we may get involved in multi-unit buildings. But no matter what, it’s never
about quantity of homes built; it’s always about the quality.”
Despite the international success and national awards, Suzanne is involved
on many local industry and community boards, including the Better Business
Bureau, NS Home Builders Association, NS Construction Safety Association,
Atlantic Home Warranty and the Canadian Home Builders Urban Council.
In 2003 she organized the expansion and renovation of Adsum House
Women and Children Centre, a non-profit organization in Halifax that provides
emergency shelter to women and their children.
She’s also the force behind the "Enfield Earthkeepers”, a youth outreach
organization that provides yard work and odd job services to the community.
All Earthkeepers volunteers donate one hour for every four paid hours. There
are currently 60 kids in the program with 25 on a waiting list.
From Enfield to Europe, Suzanne Bona is dedicated to making healthier,
more sustainable communities.
Article adapted from a profile in Home Builder Magazine and from scotianhomes.com
Should we profile you or someone you know? Email us at:
2
c o n t ra c t o rc l u b @ h o m e h a rd w a re. c a
or see our back cover for mailing info.
BUILDING YOUR BUSINESS
STRATEGIES FOR RECOVERY:
Looking Back to Move Forward
U
nless you’ve been living under a rock for the last year, there is no
way to avoid all the doom and gloom predictions for housing
sales. A lot of builders are worried. As our front-page story points
out,yes,housing sales will be softer in 2009. So,what can you do to ride
out the next two years until things are expected to pick up again?
Sometimes you have to look at the past to go forward.
Some of you may remember the housing bust of the late 1980’s,
but if you weren’t around, it took almost a decade for prices and sales
to rebound. The builders that made it through had to be very proactive and very innovative.
This housing recession started back in 2005, but we’re only now
starting to feel the full effect. Just like in the late 80’s, the first
thoughts are denial: “If only we advertise more, our sales will
increase.”This is not an effective strategy for riding out the housing
bubble.
The faster you understand the importance of ceasing a businessas-usual approach, the faster you will be able to adapt more quickly to
what we are seeing happening across Canada – a definite slowdown
of housing sales.
Start by looking at the percentages in your local area. (Your local
builder’s association will have housing sales predictions for your
area.) Then, look at the trends from your last two years.Where were
your sales? Where is your waste? Use this info to forecast wages, cost
of goods and other expenses.Think about ways to trim overhead.
Also look at your local area and compare it to market trends.Are
your homes being built in an area where people work mainly in the
manufacturing sector, which could be hit more severely by a downturn in the markets? Above all, get your financial house in order, and
put cash flow over profits.
The current market is a whole new ballgame, so make sure your
plan for the next year is flexible.There is no doubt that 2009 will be
a transitional year for many builders. But if you stay positive, analyze
what’s been happening over the last two years and use that information to make a comprehensive plan for the next year, you might be
in a position to take advantage of opportunities as business recovers.
HEALTH & SAFETY
CONSTRUCTION SAFETY CERTIFICATION
Fighting Complacency in the Workplace
Y
our employees are at a new construction site working atop a flat roof.
Do they need to wear their fall protection if they are working in the
middle of the roof? If they don’t, they could get a fine of $900 as one
contracting company did a few weeks ago.
In the construction industry alone, there were 72 fatalities in 2007, with
falls being the most common cause. Sprains and strains are the most prevalent injury. And fractures cost employers the most employee days off work. The
Number 1 reason? The misuse of equipment.
When transportation and industry safety expert Doug Elmore goes out on
a construction safety training session, he can bank on a few surprises for
employers, supervisors and employees.
“The biggest challenge is complacency – it’s the way something has
always been done, so the attitude is why change?” says Elmore. “Often jaws
drop as I talk about some of the regulations and they ask me, ‘How was I supposed to know that?’ People think they know the right way of doing things to
ensure on-the-job safety, but unfortunately very few people have read the big
green book.”
That big green book he’s referring to is the Occupation Health and Safety
Act and Regulations for Construction Projects. By law, employers regulated
under federal or provincial jurisdiction must provide one to each employee.
Elmore says many companies tend to wait to hear about regulations
before seeking out certification training. The downfall is by then either
they’ve failed an inspection, or worse, there has been a workplace injury.
Non-compliance with occupational standards yields some hefty fines. And
the fines, which can be levied against the individual workers, the supervisors
and the employers, vary depending on the severity of the infraction.
Elmore works in tandem with Home Hardware, giving seminars across the
country on construction safety.
“The question is not will there be an accident. There will be,” Elmore
states emphatically. “The question is when, and how severe will it be. Will it
be minor, or will someone end up dying on the job?”
Thinking about certification training? Here are two key tips from Elmore:
1. Research the training firm and have a clear idea of the training your
employees need.
2. In addition to technical knowledge and continuing education, it is optimum if the trainers have on-the-job experience.
3
TOOLS OF THE TRADE
The latest tools and equipment from Home
Chalet® Plywood Siding
Easy installation and long-term durability make plywood siding
one of the most widely used siding materials. CanWel’s Chalet®
Plywood Siding is manufactured using selected softwood face
veneers. The textured face is grooved 8” on centre, giving Chalet
Plywood Siding a traditional appearance. Vertical siding has been
a siding of choice for years and can be applied to virtually any cottage, utility, commercial or agricultural building.
Chalet Plywood Siding is a precision-engineered plywood, bonded with exterior-grade glue that minimizes warping, shrinking and
checking, resulting in a strong and durable siding panel. The siding is factory primed with a water-based
latex primer to reduce ultra-violet ray damage prior to finishing and providing a base for the finish coat.
Chalet Plywood Siding is available in four primed colors: Cedartone, Grey, Redwood and Taupe, or
unprimed in Natural.
Hercules Laminate Flooring
Laminate flooring is transforming itself away from being just a price point item and is emerging into a lifestyle choice as it combines state-of-the-art designs with proven durability and
low maintenance. Hercules laminate floors reflect the look and feel of natural wood grains
and patterns, and are as pleasant to the touch as they are to the eye. Deep grain embossing,
subtly different wood patterns and v-groove edges bring the floor's wood motif to life.
4
And with its patented Uniclic® system, you can install the floors quickly and easily without the
need for any glue. Hercules laminate floors are wear and scratch resistant, won’t fade or discolour and are easy to clean. Backed by a 20 or 25-year warranty on wear, Hercules laminate
floors are available in six distinctive collections encompassing thirty-two different finishes.
with
New ProRoc® Gypsum Board is Moisture
and Mould Resistant.
CertainTeed’s ProRoc Moisture and Mould Resistant Gypsum Board
provides low water absorption properties, enhanced zone of protection
against mould, and numerous fire-rated designs for safety and performance.
A high-strength, uniformly flat wallboard, CertainTeed’s new M2TechTM technology gives ProRoc moisture resistance and enhanced protection against
mould growth by utilizing a specially formulated water resistive core that is
enclosed in nearly 100 % recycled moisture and mould resistant light violetcoloured face paper and bronze-coloured back paper.
For fire-rated assemblies, ProRoc Moisture and Mould Resistant Gypsum
Board with its M2Tech platform is available in Type X, which is designed for
applications requiring extended fire ratings where enhanced moisture and
mould resistance is preferred. Tested by an independent lab, ProRoc
Moisture and Mould Resistant Gypsum Board achieved a score of 10 per
ASTM D 3273, the highest possible score for this test.
Lightweight, easy to cut and install, it handles just like any of the other
ProRoc gypsum board products. Typically it is nailed or screwed to studs, but
it can also be laminated with an adhesive. There’s no need for any special
tools and it can be finished, painted, textured or wallpapered using conventional gypsum techniques.
ProRoc Moisture and Mould Resistant Gypsum Board can be used as a tile
backerboard in dry areas or areas with limited water exposure, such as toilet and sink areas and spaces above tile in tubs and showers. It’s an ideal
option for new construction or renovations over steel or wood framing.
WIN A TRIP for two to the
2009 CHBA National Conference in
Quebec City or other great prizes!
Visit buildmybusiness.ca to enter
5
YOUR SALES
YOUR MONEY
The Market
SNARE
by Joe Jacklin
Contractor Communications Marketing Manager,
Home Hardware Stores Limited
M
ost of you have probably heard about stealing
market share, which is the act of taking business
away from your competitors. But have you heard about
market snare? Market snare is the use of incentives to
turn prospects into customers.
There was a time, not too long ago, when all you had
to do was build a home or put your name in the Yellow
Pages and customers came to you by the dozens. Now
that there are fewer prospects, what are you doing to
ensure that those potential customers choose you and
not your competitor?
Over the past year, within Canada, many production
home builders have used incentives such as home furnishings to incite people to buy. This type of incentive
has been very successful for builders who built a subdivision marketed toward first-time homebuyers. For a
young couple buying their first home, $5,000 in home
furnishings can be a very attractive offer.
Due to the famous sub-prime fiasco, builders in the
U.S. have developed interesting market snare strategies to
move their existing inventory of homes. Some builders
have created a Delayed Start Program where the builder
will take a non-refundable deposit on the purchase of a
new home and the buyer is given between 12 to 16
months to sell their existing home. Other builders have
offered the use of their real estate sales team so that if
you buy a new home, the real estate team will sell your
old home with a savings of 3% commission. Another tactic has been to purchase the existing home of a prospect
at an agreed price so that the homebuyer can move right
into the new home. The builder will then fix up the old
home and either sell it or rent it out.
While these seem like very drastic and risky incentives, the message here is clear. You may not have to
lower the price of your product, but you will have to give
a prospect a reason to choose your product over your
competitors.
Hit your customer’s hot buttons to snare the sale.
Whether your snare is set with financing, trips, furniture,
electronics or gas gift cards, the key to a successful snare
is to use the most appealing bait.
6
‘TIS THE SEASON
For Year-end Tax Tips
W
ith the holiday season creeping up on us, pleasant and joyous thoughts
come to mind: time with the family, time-honoured traditions, a holiday
feast and, of course, taxes. Yes, once the warmth of the season has
slipped by, the cold reality of tax time sneaks up to greet us. But Home is here for
you. We’ve gathered some year-end tax news and tips that might help you out.
The good news is that we are getting a bit of a break on corporate tax.
Revenue Canada reports that for all, “Canadian-controlled private corporations
claiming the small business deduction, the net tax rate will be reduced to 11% in
2008, one year earlier than scheduled.” It’s down from 13.12%.
For corporations, Revenue Canada says, “the net tax rate will be reduced as
such: 19.5% in 2008, 19% in 2009, 18.0% in 2010, 16.5% in 2011 and 15.0% in
2012.” These broad-based tax reductions will give Canada the lowest statutory tax
rate in the Group of Seven (G7) by 2012.
In the spirit of giving, businesses – just like individuals – can claim charitable
donations. In general, the maximum amount a corporation can deduct is equal to
75% of its net income (Line 300 of your income tax return.) As well, gifts for
employees, unlike cash bonuses, are considered a business expense. However, the
total amount must not exceed $500.00.
For a sole proprietorship or partnership in Canada, your business income is all
or part of your personal income. This means contributions to your RRSP as well as
charitable donations can help lower your income tax. For donations, it may be more
beneficial for you to carry them forward and claim them on your return for any of
the next five years. No matter when you claim them, you can claim them only once.
Talk to your accountant about maximizing RRSP and charitable contributions.
And while you’re at it, ask your accountant about making an equipment purchase before the end of the year. The cost of the capital items can then start to
depreciate in 2009. But the equipment must be in use before the year-end.
Ontario employers might be relieved to know that in August of this year the
Workplace Safety and Insurance Board decided to keep the 2009 average premium
rate at $2.26, unchanged from 2007 and 2008.
Whatever you do before the holidays, it is a good time to talk to your financial professional. By looking at your existing fiscal status and planning ahead, you
can save money on your taxes for 2008 as well as in the upcoming year.
Whether it’s the competitive pricing, timely
deliveries or our highly knowledgeable
Contractor Club staff, Home Building Centres
across Canada are committed to helping build
your business. We’ve got your lumber!
PROWHEELS
The MONTAGUE
Safe Winter
DRIVING TIPS
The Home Architectural Solutions Group
of Home Hardware offers house
plans to contractors and consumers
- from customized to stock plans.
The winter season always manages to raise our anxiety levels, especially when it comes to manoeuvring
through the generous supply of snow and ice that
Canada receives during this time of the year. Arriving
safely at your destination can be made less stressful by
equipping your vehicle with good winter tires, but here
are a few simple driving techniques that can also help.
SMOOTH DRIVING - The most common dangers to
avoid are wheelspin and skidding, caused by a loss of
traction. When tires come into contact with snow or
ice rather than dry pavement, the traction that is normally present is dramatically reduced. This is where it
becomes crucial that you avoid sudden turns, quick
accelerations or abrupt stops. Exert proper control of
your vehicle by driving as smoothly as possible –
whether you are accelerating, braking or steering.
• 2246 sq. ft. • 42’ w x 44’ d • Covered porch • Open concept design
• Great Room: 20’-6” x 15’-9” • Kitchen: 10’-0” x 11’-4” • Dining Room: 10’-3” x 12’-0”
• Den: 11’-6” x 11’-3” • Garage: 20’-3” x 21’-5” • Bonus Room: 8’-2” x 17’-6”
• Master Bedroom: 13’-0” x 15’-8” • Bedroom 2: 12’-0” x 11’-3” • Bedroom 3: 14’-2” x 12’-2”
SWEEPS
Win WEBSITE DESIGN and HOSTING
$599 value (includes 1 year static hosting, self managed)
This site is yours, no hassles if you decide to take your site and go. Includes Home Page + 5 pages.
• About us, Services page, Project gallery / Our work / Testimonials, Contact page (includes form)
• 10 email addresses • 100 MB storage • 1 year hosting • Domain name registration
• Custom design - NO TEMPLATES
See our back page for contest entry details.
At Contractor Toolkit our role is to deliver your message to your
audience and get their attention. Making the sale is easier when
your target is primed for your pitch. For web design, brochures,
business cards and more, dig into The Contractor Toolkit. There is a
wealth of ideas inside. Visit: buildmybusiness.ca/index/marketing
SLOW ACCELERATION OFF THE LINE - To avoid
wheelspin and ensure a smooth departure from a stationary position, apply only a gentle amount of pressure to the accelerator pedal. Once the vehicle is in
motion, you can apply more pressure and accelerate
more quickly, as long as you remain within the wheelspin threshold. Many Toyota vehicles include Traction
Control which detects wheelspin and assists in preventing skidding.
GRADUAL BRAKING - Braking should be applied in a
similar fashion, with minimal initial pressure on the
brake pedal. It is important to ease up on the pedal at
any sign of locking brakes unless your vehicle is
equipped with ABS (Antilock Brake System) brakes,
which automatically reacts to locking brakes.
STEADY STEERING - Steering should be a slow and
steady movement. To reduce the possibility of losing
traction and control, avoid excessive steering by looking as far ahead as you can, and by keeping both
hands on the wheel at the 9 and 3 o’clock positions.
Steering should also be kept to a minimum while
accelerating or braking, as well as at high speeds.
Finally, remain aware of your surroundings at all times
and leave safe distances between vehicles in order to
give yourself the time to react in case your vehicle
loses control. Most importantly, remember that
smooth driving is the key to a safe, winter driving season.
7
UPCOMING SHOWS
Through our
HOME PROFESSIONAL
SUPPLY DIVISION,
Home Hardware can supply
the needs of commercial,
industrial and manufacturing
customers across Canada.
We carry a comprehensive line of maintenance, repair and operations items including tools, safety products, hardware and cleaning supplies. With over 1000 locations that are owned and operated by a member of your community, each Home
location is uniquely positioned to understand your specific business needs better.
Contact your local Home store to get a copy of the new commercial products
Buyers Guide. Inside you’ll find more than 7,600 products from almost 600 vendors. This catalogue was designed for commercial and maintenance professionals
just like you.
Tough As Nails Contractor Tradeshows are
coming to cities near you in 2009
Windsor, ON - Ciociaro Club Of Windsor
Thurs. Jan. 15, 2009
Orangeville, ON - Orangeville Agricultural
Society Building Wed. Jan. 21, 2009
Access our Home Professional Supply division online:
www.homehardware.ca/professionalsupply
Search instantly for full details on everything you need for
any job. In addition to the thousands of products, find a
convenient store locator and all essential MSDS.
Ottawa, ON - Lansdowne Park - Exhibition Halls
Tue. Feb. 3, 2009
Winnipeg, MB - Winnipeg Convention Centre
Wed. Feb. 18, 2009
Tough As Nails Contractor Club News
34 Henry Street West, St Jacobs, Ontario N0B 2N0,
Attention: Joe Jacklin
c o n t ra c t o rc l u b @ h o m e h a rd w a re. c a
Kelowna, BC - Prospera Place
Mon. Feb. 23, 2009
Red Deer, AB - Westerner Park - Agricentre East
Wed. Mar. 11, 2009
Halifax, NS - Exhibition Park
Tue. Mar. 31, 2009
Win Website Design and Hosting
Name
Address
Prov
City
Postal Code
Phone
E-mail
Business Name
1. No purchase necessary to enter.
2. Enter at participating Home Building Centres, Home Hardware Home Building Centres or mail
your entry to “Website Sweeps” c/o Home Hardware Stores Limited,
34 Henry Street West, St. Jacobs, Ontario, N0B 2N0, attn: Joe Jacklin. Entries can also be sent via
email to: contractorclub@homehardware.ca. One entry per person.
3. The odds of winning depend on the number of entries received. Prizes must be accepted as
awarded. There will be no cash equivalent awarded. Contestants are required to correctly answer
a skill-testing question. See contest rules for full details.
4. Contest closes January 31th, 2009.
5. Contest is open to all residents of Canada who have reached the age of majority in the province
or territory in which they reside.
6. For a complete set of rules, mail a SASE to "Sweeps Rules" at the address shown above.
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