A pair of oil and natural gas leaders from Alberta painted a bleak picture of Canada’s energy sector during a Kelowna Chamber of Commerce luncheon on Friday.
The recent downturn in the oil and gas business has hammered its economy and caused substantial job losses, including many who live in the Okanagan. Darren Gee, who is the CEO of Peyto Exploration & Development Corp., and Tom McMillan, the CEO of Canadian Association of Petroleum Producers, essentially pleaded the industry’s case in front of local business leaders during the luncheon, which was held in conjunction with Energy Week in Canada.
“We have the moral obligation to help the rest of the world, to drag them out of abject poverty, to provide energy to them so that they can have a better quality of life,” Gee said. “We have to stand up for our industry in order to make that happen.”
Both noted how capital spending has decreased in Canada while the rest of the world has been investing. McMillan noted that the capital investment drop of $80 billion to $40 billion in the last four years is the reason why so many oil and natural gas employees are out of work.
“Canadians just need the opportunity to compete, and right now self-inflicted wounds have positioned us in a place that Qatar, Nigeria and Venezuela are out-competing us,” McMillan said.
“It’s not a geology problem or an engineering problem. It’s policy challenges.”
Gee said Canada has some of the best regulation in place when it comes to protecting the environment, but the financial and philosophical backlashes against the industry are causing Canada to fall behind.
“We may care about the environmental impact of energy consumption, but nobody cares what we think,” he said. “There are four and a half billion people in Asia, and they want to get their hands on every last drop of energy they can.
“We can’t influence their consumption.”
What Canada can influence, however, is the kind of energy that is exported to other countries, and he said that would be a much cleaner and environmentally friendly version. The companies just want the government’s co-operation in allowing them to make that happen.
“We can be a leader globally in energy development and delivery,” Gee said, “or we can let someone else do it.”
Gee also warned that if Canada does ramp up its production, it might have to rely on other countries to supply it.
“You think gasoline is expensive at the pump today? Imagine if we had to import oil from the United States to refine it to gasoline,” Gee said.
“We’ve really abandoned the Canadian energy industry, or at least we’ve put up so many roadblocks that the investment community has abandoned the industry.”
Kelowna-Mission MLA Steve Thomson is taking aim at the governing NDP as Kelowna’s Tolko sawmill is the latest to be hit by a crisis sweeping B.C.’s lumber industry.
Vernon-based Tolko Industries announced the indefinite closure of its Kelowna operations on Thursday. This following a temporary closure that was already underway.
The announcement affects more than 120 jobs.
So far this year, dozens of mills across the province have curtailed production, reduced shifts or closed entirely, with industry sources citing weak lumber markets, the high cost of fibre and a reduced cut since the harvesting pine beetle ravaged forests in the Central Interior has wound down.
Thomson says Premier John Horgan and the NDP remain have been “missing in action” as the forestry sector continues to free fall.
“The BC Liberals have repeatedly warned the NDP and have offered tangible ideas to help address the crisis, but there’s still been zero action from John Horgan or his incompetent forests minister,” Thomson said. “Communities across B.C. are being hit almost daily with closure announcements, and there is still no response from John Horgan.”
So far in 2019, there have been at least 150 weeks of operational downtime announced at mills in B.C. In addition, there have been 10 permanent and indefinite closures, significant shift reductions and hundreds of millions of board feet curtailed.
“We need John Horgan and his government to take meaningful action—any action—to help our forestry communities get through this difficult time,” Kelowna-Lake Country MLA Norm Letnick said.
The Liberal MLAs said in just this past week job losses in the forestry sector include at least 300 logging contractors and more than 600 mill workers.
Also this week, Teal-Jones halted its coastal harvesting operations, which in a matter of weeks will impact hundreds of employees at its Surrey mill.
It is the end of an era in downtown Vernon.
Moving crews are clearing out the Royal Bank that has been at the intersection of 30th Avenue and 32nd Street since 1905.
The closure was announced in May with a notice placed on the window. When the shutdown was announced, management said the operation would shift to the Polson Park branch.
There is also a Royal Bank at the Village Green Centre.
The harvest season has begun in earnest on Penticton’s Naramata Bench, just the first step in a long road that turns grapes on the vine into bottles of wine.
“I think everyone is just really excited and ready to go, ready to see the grapes come off and get them in the cellars,” Earlco Vineyards vice-president Rebecca Mikulic said.
She said wineries are starting with harvesting grapes for products like sparkling wines, chardonnays, pinot noirs and pinot blancs.
“And then it’s usually the sauvignon blanc that comes off next, some earlier ripening ones, and then it starts to go into some other whites, some gewurztraminers, and then we’ll do some reds.”
It’s a process that will take weeks, and will require huge masses of grapes for each of the dozens of wineries along the bench.
“We produce about 7,500 cases, up to about 10,000, depending on the yield, but about 150 tonnes of grapes,” Three Sisters Winery chief winemaker Matt Mikulic said.
Picking when to harvest is an art of its own and different for every type of grape. Master of Wine Marcus Ansems—one of fewer than 10 people in Canada to have that official, earned title—said his decisions about the harvest at Daydreamer Winery comes down to taste.
“We’ll analyze it in the lab, but to be honest, the best way to do it is just to taste it. We get out into the yard and just taste,” Ansems said. “Sometimes the sugar will come before the flavour. Sometimes the flavour will come before the sugar.”
When the grapes are off the vine, they get transported to a de-vining machine which ensures no prickly plant bits are left over. They’ll then go into a press, and finally the juice is placed in storage cylinders for fermentation.
Harvest time is a happy time of year for everyone on the bench who has spent their summer tending to vines and hoping for a fruitful season. The hope is for dry weather moving forward as the harvest continues into late October.
“We’ve been out there on the tractor and trotting up and down the rows, so for us to be able to harvest is a pretty exciting time,” Ansems said.
The annual Naramata Bench Wineries Association Tailgate Party celebrating harvest takes place on Saturday.
Accelerate Okanagan has received a major funding boost to train its leaders.
The Western Economic Diversification Canada invested more than $5.6 million in five organizations across B.C., and Kelowna’s tech organization is going to share nearly $2.9 million of that pie with the Victoria Innovation, Advanced Technology and Entrepreneurship Council. The money will support enhanced management and leadership training of company executives.
“If we want to continue to build on our success as a tech community and reach our full potential, it is critical that we coach the leaders, and that means supporting their development,” Accelerate Okanagan acting CEO Brea Lake said in a press release. “We firmly believe that leadership coaching is essential in building future success for OKGNtech, and we’ve built that into our five-year strategic priorities.”
Accelerate Okanagan believes more anchor-style tech companies will bolster the critical mass of the tech sector, create more spinoff benefits, and offer an increased breadth of positions and opportunities. That, in turn, will make it easier to attract more senior, skilled talent.
“We’re confident that this programming will increase capacity in our local tech leaders and their C-suite team members leading to increased revenues, job satisfaction and employment,” Lake said. “We want to arm our local scale-up companies with the tools they need to experience healthy, sustainable growth and attract and retain top talent.”
Accelerate Okanagan and VIATEC have eight years of experience working together to administer and manage large-scale programs through multi-year private and government partnerships.
Instead of dealing with customers, Chad Edwards has to spend his time fighting crime.
The owner of Vernon’s Innerspace Watersports has been the victim of crime several times in the last week alone. In fact, the business has been the target of thieves more in the last few months than in the past 25 years.
Recently, someone made off a full-sized kayak from the downtown business, located at the intersection of 32nd Street and 31st Avenue.
On Wednesday, surveillance video captured a man in a trench coat use bolt cutters to try to cut a chain that was on an e-bike. The attempted theft happened at 4 p.m. as dozens of cars drove by. Edwards said two of the man’s accomplices distracted staff while the man attempted to cut the chain.
The trio left empty handed, but for Edwards, who has owned the business for 17 years, the constant thefts are frustrating.
“We have had multiple incidences in the past seven days,” Edwards said. “We have had everything from a kayak theft on the front patio roughly last week and a day or two later they came back and stole some more kayak paraphernalia to go with the kayak they previously stole.”
And on Wednesday, while security cameras were actually being installed, the man attempted to steal the bike. Edwards was driving past his business when he saw the man in the trench coat, who looked out of place, meet with the two other people. He immediately went to the store to review the security footage and saw the attempted theft.
“The frustrating part is we feel our customers are the ones that suffer because when someone comes in the door we are glaring at them or eyeballing them up thinking could this be a possible thief,” Edwards said. “That is the most frustrating part.”
Edwards is at a loss as to how to stop the thefts.
“If you’re not safe on a main freeway next to the downtown core, where would you be safe?” he said. “The bylaw office is located at the end of the building, and the police station is literally a block and a half away.
“I don’t know what to suggest other than we keep increasing the size of our locks, the size of our cables, increase the amount of cameras that we have.”
The South Okanagan real estate market continued its rebound in August, according to new stats from the South Okanagan Real Estate Board.
In the first eight months of 2019, a total of 1,232 were sold—down 18 per cent from the same time last year. Things have, however, picked up through the last half of summer, with last month beating August 2018.
The average price of a home sold in August 2019 throughout the South Okanagan was $407,467, up 1.4 per cent from August 2018.
“The numbers are actually not surprising, we’ve seen relatively the same actions compared to 2018,” Penticton Realtor Sergej Sinicin said.
He said Summerland, Naramata and Penticton sales year over year all saw a boost, but it was a different story further south in the Kaleden and Okanagan Falls areas.
“The average sale price dropped by $130,000 in that neighbourhood south of Penticton, so that’s really the only area that took a bit of a hit in (August) 2019,” Sinicin said.
Residential listings have increased since August of last year, with a South Okanagan Real Estate Board report indicating 1,447 residential active listings at the end of August 2019, an increase of 15.7 per cent over the same time last year.
That’s a four-year-high but still well below the 2008-2015 period.
Sales of all property types numbered 180 units in August 2019, up 2.8 per cent, or five sales, from August 2018. The total value of all South Okanagan properties sold last month was $77 million, up slightly over 2018’s $76 million.
Sinicin said the fall will be a good time for sellers to get on the market.
“Don’t wait ’til Christmas or New Year’s to start listing your home, because you ultimately can get more money,” Sinicin said.
Year to date, the region is still lagging behind last year significantly. $616 million worth of real estate has changed hands in the South Okanagan so far this year, well short of $779 million during the same time in 2018.
As B.C.’s finance minister touted a $115 million windfall from the real estate speculation tax on Thursday, the local home builders association is singing a different tune.
The Canadian Home Builders’ Association of the Central Okanagan says there have been significant job losses in the Central Okanagan, which is one of the areas targeted by the tax.
It says there has been a 22% reduction in jobs related to residential construction in Kelowna and a 17% reduction in West Kelowna.
Nanaimo, which also falls under the spec tax, has experienced a 12% reduction in construction jobs, CHBA-CO says.
In a press release, Cassidy deVeer, president of the local association, said Kelowna has 3,000 fewer jobs since the tax was introduced.
Meanwhile, CHBA-CO says Kamloops, unaffected by the tax, has seen an increase in jobs of 35% and a 30% increase in vacant homes.
“We are highlighting the job reductions in our industry since the speculation tax was introduced to show its impact,” deVeer said. “It has harmed specific areas like Kelowna and West Kelowna and has driven growth in other communities like Kamloops and Penticton.”
The tax specifically targets vacant properties and second properties used as vacation destinations by absentee owners or real estate speculators.
The reaction comes as Finance Minister Carole James pumped the benefits of the tax flowing to affordable housing. She’s also meeting today with Kelowna Mayor Colin Basran and West Kelowna Gord Milsom in Vancouver. Both mayors have strongly opposed the tax.
“The speculation tax affects Kelowna and West Kelowna directly, and we think the people of the Central Okanagan deserve an answer on what the finance minister is doing about job reductions,” deVeer said. “These lost jobs are not wealthy or foreign people which the tax is advertised to be targeting. These people are the working middle class, and now they are out of a job in our community.”
B.C.’s troubled forest industry has delivered another blow to the Okanagan.
Tolko’s Kelowna mill, which had been in the midst of a temporary shutdown, announced this afternoon that it is closing its doors indefinitely.
“This decision was not easy for us to make,” Tolko solid wood vice-president Troy Connolly said in a press release. “We are very disappointed to be in a position where we have to curtail the mill, particularly given the reasons for this extension are beyond our control. However, with lumber market prices at sustained low levels and high log costs in B.C., the mill cannot be cost-competitive.”
Tolko Kelowna’s six-week curtailment started on Aug. 6 and was supposed to end Monday. The 127 employees who were temporarily laid off for the last six weeks will continue to be out of work but will get 72 hours notice if the mill starts operating again.
“The guys were all anticipating to go back to work next week full-time,” a source familiar with the situation told Castanet this afternoon. “They have been running this week—limited capacity—in the planer, but they called all the guys who were on-site today, and somebody delivered the bad news.”
Tolko’s Armstrong lumber, Armstrong plywood and White Valley veneer operations had downtime from Aug. 17 to Sept. 2, and its Heffley Creek plywood and veneer operation also slowed down from Aug 24 to Sept. 2.
“On days like these, our hearts are heavy as we think of our colleagues and friends at Kelowna,” Connolly said. “It’s hard to know they are suffering today because of reasons that are beyond our control. We know our people in Kelowna have done everything in their power to make the mill successful. They have gone above and beyond. Sadly, this has nothing to do with them or their efforts. We simply cannot operate in current conditions.”
Krystin Kempton is the new president of the Greater Vernon Chamber of Commerce.
The Nixon Wenger Lawyers partner was confirmed as the new boss during Wednesday night’s sold-out President’s Dinner. Kempton had previously served as the chamber’s vice-president.
“It is an honour to be selected as president of the chamber board,” Kempton said. “I believe the organization has a significant role in not only representing its members, but also promoting Greater Vernon as the place to invest, work and live.
“The chamber has been the voice of business since 1897, and as we move into 2019-20 the board of directors and the chamber staff will continue to advocate on behalf of its members to ensure they have the ability to prosper.”
The following members of the Vernon business community will serve on the board during the 2019-20 year:
• Darrin Taylor, Axis Intervention Services (vice-president)
• Greg Stevens, TD Commercial Bank (secretary-treasurer)
• Diana Wilson, Kal Tire (past-president)
• Robin Cardew, CPA (director)
• Dudley Coulter, Peak PR/Downtown Vernon Association (director)
• Peter Kaz, Village Green Hotel (director)
• Roger Lamoureux, Tatawaw Kanata Glamping & Wellness (director)
• Leif Lennie, Pleasant Valley Painters (director)
• Jayme McKillop, Jayme McKillop Co. (director)
• Aly Pain, The Conflict Coach (director)
• Matt Scheibenpflug, Sandman Inn (director)
• Deb White, White House Mortgages (director)