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Long-awaited arrival of IKEA is city's business story of the year

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History might someday remember 2012 as a year the Winnipeg business community did some growing up. It received a powerful boost in self-esteem from the opening of an IKEA store, joining the elite group of cities around the world that rate one of only 300 of the stores in existence. Strangely, that seemed to have a far more powerful impact on the city than any negative affects of the downsizing of the federal government's presence here. In 2012, the ideologues in the Harper government finally got their wish to blow up the Canadian Wheat Board, they dramatically downsized the National Research Council and even decided to pack up and close the international trade office in Winnipeg.

 

I'm good enough, I'm smart enough, and doggone it, people like me

Finally getting an IKEA store in Winnipeg fulfilled a startlingly intense longing Winnipeggers had for the Swedish home-furnishing store. Irrespective of why Winnipeggers obsessed over the coming of an IKEA store (the rumour of its imminent arrival stayed fresh for at least 10 years running), the store's arrival probably does mark a real rite of passage for the city into some hard-to-define municipal critical mass. According to legend, the city really does have a future or else it wouldn't have passed the scrutiny of those too-clever Nordic retailers.

 

Farmers did not go extinct

Even though it sure looked as if it was motivated mostly by conservative ideologues in the Harper government, the end of the Canadian Wheat Board did not spell disaster for Prairie grain farmers when the first crop came off the fields without the benefit of a single desk to sell it all. A drought in the upper Midwest of the U.S. helped because it drove all grain prices higher. Rather than the distracting squabbles about the relative merits of open market versus monopoly for wheat and barley, the industry got down to business. Notwithstanding the philosophical debates -- and potential Supreme Court appeals -- so far so good.

 

The grass is always greener....

IMRIS Inc. and a couple of lesser high-tech Winnipeg medical device companies chose to decamp to richer, more prosperous American locales in 2012. A relatively shallow pool of human resources and technological know-how in the field, not to mention the availability of capital, were the reasons given. The news was met with a rousing round of "good riddance" from city boosters but probably included some conventional calculations about long-term return on investment for shareholders. (Having said that, IMRIS's shares have been trending downward since the announcement). But the moves raise an important question about the dynamics of the diversified economy here -- how much is too much diversification?

 

Now there's way too much room at the inn

Someone flipped the switch to "On" at the Winnipeg hotel development control centre in 2012. No less than 10 hotels were under construction or completed this year and that does not include another Canad Inns location that's queued up to be built beside the McPhillips Street Station casino. It represents an unprecedented volume of hotel development in the city. Pent-up demand had a lot to do with it. For years, travellers to Winnipeg didn't have much more choice than between a handful of full-service -- and full-priced -- downtown hotels and beat-up antiquated properties near the airport and along the highways in and out of the city. Depending on the success of this new crop of mostly budget properties, this may be it for another generation.

 

Homemade trade

Winnipeg staged its second Centrallia small-business trade summit pulling people -- some of them kicking and screaming -- into Winnipeg from all over the world to poke around for potential commercial opportunities or partnerships. Even though some trade professionals stick their noses up at the exercise -- claiming it's for tourists and rookies -- the event has helped plenty of small and medium-sized businesses create leads and relationship strings that will surely lead to wealth creation in the future. It's a labour-intensive event though, and now that organizers have acquired a membership in the World Trade Center Association for Winnipeg it remains to be seen if it's an event that will continue to be staged here regularly.

 

Apartments for rent?

When the Avenue Building opened this spring, it meant a long-empty and derelict building 21/2 blocks from Portage and Main would be rehabilitated. But it's also an experiment in apartment living, downtown, on Portage Avenue -- a concept that would have been mocked as lunacy only a few years ago. This year, there were no fewer than 650 new apartments available, under construction or in the works in downtown Winnipeg and an additional 1,100 new condominiums. There has long been an understanding that if Winnipeg's downtown is to be revitalized, it needs more residents. But for that to happen, more residences are required. They're finally being built.

 

Let them eat pork

The problem is, it's too easy to do just that. Pork prices in the meat department didn't rise nearly as fast as the input costs for the producers. The spike in grain prices that made so many farmers happy this year was a scourge to hog producers, of whom this province hosts the most in the country. Producers were exiting the market as quickly as they could. But unlike other manufacturers who might choose not to sell their product into a glut in the market, hog producers can't just sit on their inventory. Two of the largest producers in the country -- one in Manitoba and another in Saskatchewan -- were forced into receivership. It remains to be seen if the market corrects itself, but if it does, it could mean sticker shock at the butcher shop.

 

Keep digging, boys

For the first time in the modern era, there were two mines in construction in Manitoba in 2012 -- the $700-million Lalor mine near Snow Lake and the much smaller Reed Lake Mine southwest of Snow Lake. Manitoba's prestige as a place to do mineral exploration has lost some of its lustre over the past couple of years, sinking from first place in 2007 to 20th in 2012 in the Fraser Institute's Survey of Mining Companies. That's mostly because of a muddled-up approach to its duty to consult First Nations and aboriginal groups on treaty rights claims within potential development areas. But the experience of long-standing Manitoba producers such as HudBay Minerals Inc. -- the owner of Lalor and the managing partner at Reed Lake -- was able to manage those projects to production.

 

Sports fandom meets the world of business

Sports fans prefer to remain blithely ignorant of the boardroom machinations required to organize the leagues and play the games. But for dedicated fans in Winnipeg, it was annoyingly difficult to remain oblivious to those business realities in 2012. We studied weekly reports of the difficulties in building the Bombers' new stadium -- who knew it could be so windy in Winnipeg? -- and the agonizing labour dispute in the NHL has wrenched those schooled in goal-against averages into full briefings on escrow accounts and make-whole provisions. And by the way, after bootstrapping his way into NHL profitability in one year, is there anyone harder-hit by the lockout than Jets governor Mark Chipman?

 

Exactly who owns the cookie jar?

It's not hard to imagine when a commercial enterprise is met by good fortune that an extravagant purchase may take place. But when Tribal Councils Investment Group acquired a corporate jet a couple of years ago it wasn't the owners, per se, who made the decision. Management of the investment firm owned by Manitoba's tribal councils may have gotten a little caught up in the excellent returns being generated. Their efforts to keep politics out of the corporate decision-making process might even have boosted profits, but when three of seven shareholders sue the company claiming shareholder oppression, it's probably a sign management may have gone too far in that regard.

 

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition December 28, 2012 B6

History

Updated on Friday, December 28, 2012 at 10:55 AM CST: formats text, changes headline

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