Winnipeg Free Press - PRINT EDITION

Local economy better but...

Some things will go wrong, others ought to happen but might not

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There's a case to be made heading into 2014 that the local economy is in better shape than it's been in for many years.

Traditional sectors such as manufacturing and food processing have found religion and become more efficient and innovative, the ag sector is stronger than ever, the finance and insurance business just keeps getting bigger, the travel and tourism industry will soon have a bona fide major attraction in the Canadian Museum for Human Rights and positive developments continue to emerge in the technology sector. But since the variation between the highs to the lows in the Manitoba economy covers a pretty narrow band, it's not likely the new year will produce Alberta-style growth.

Having said that, here's a mixture of predictions sure to go wrong, things that ought to happen if there were any justice in the world, developments already taking place that should continue along with some fantasies for 2014.

Downtown development: Winnipeg still has to work to do overcoming its old reputation that had an exclamation mark put on it when the Jets 1.0 left in 1996. But serious progress in downtown development is occurring with the Jets once again a featured player. With the RBC Convention Centre expansion underway, the developer is mandated to build a four-star hotel and everyone is waiting for news of something to be built likely at the site of the old Carlton Inn. Fortress Real Developments won't start construction of its SkyCity Centre but it will become committed in 2014 and the careful folks at Longboat will also firm up their So/Po project.

Coming and going: The history of head office mobility in Winnipeg has traditionally been in one direction -- out of the city. The latest was IMRIS Inc., the city's best new high-tech business in years, which de-camped to Minneapolis last year. Styles in corporate structures are always changing and there's arguably fewer highly centralized head offices than there used to be. But maybe this could be the year for a new home-grown corporate head office to emerge downtown. Just to say, two of the city's long-standing head office entities that have shown the most consistent growth over the course of several years now -- the Boyd Group and Exchange Income Corp. -- currently toil in suburban locations.

Not going anywhere: There's no company in Winnipeg that's been rumoured to be a take-over target longer than MTS has. But since that chatter has been going on for so long you could argue those rumours aren't really worth that much. When MTS announced a proposed sale of its Allstream division last year the analysts dusted off their takeover scenarios once again. But with Ottawa nixing that deal, those bets are now off. In 2014 MTS will dig in and re-engage its Allstream growth strategy. The take-over rumours aren't likely gone for good but will subside in 2014.

The song remains the same: More than any other province in the country, Manitoba's economic growth rate comes closest to mirroring that of the country as a whole. Which is to say it's not going to grow too quick during boom times or shrink too much in a recession. Many experts say Manitoba's aggressive provincial nominee immigration program played a significant role in the positive trajectory the economy has enjoyed for the past few years. That program is not growing, so now it's up to the fundamental strengths of the diversified economy to start blossoming. However it plays out no one should expect anything but a growth rate somewhere between 2.0 and 2.9 per cent in 2014.

What won't be built this year: The city's two biggest and most successful hotel developers -- Lakeview and Canada Inns -- are also famous for saying they're going to develop projects that don't get done or take years to pull off. They both effectively had openings in 2013 with Canad Inns Destination Centre Health Sciences Centre finally opening and the grand opening of The Grand by Lakeview at the Richardson Airport scheduled for this month. But in 2014 we predict Lakeview will continue to not build its much-promised hotel across from the convention centre at Edmonton Street and St. Mary Avenue and it won't be surprising if Canad Inns holds off another year before building its McPhillips Station property.

Crash and burn: We take no joy in predicting in 2014 Tribal Councils Investment Group will be closed and dismantled. The ambitious and unique First Nations-owned investment firm might have become a little too pleased with its track record and succumbed to some of the hazards of success. Management was canned but the lenders wanted out at the same time and it looks like the new board may have run out of time to find new bankers. The jewels in the crown are still attractive so look for new owners of the northern Pepsi distributor, Arctic Beverages and the popular rib joint, Famous Dave's in 2014.

Crude idea: You have to feel for Omnitrax a little in that it owns an amazing asset that some day might become very valuable -- a railway through northern Canada connecting to the country's only northern saltwater port. But right now, the company is desperate for cargo. Its latest scheme is to ship crude oil by rail to the port. There's so much opposition to the plan from different quarters, it's bound to be a controversial story throughout 2014. The latest crude oil derailment in North Dakota is not going to make it any easier for Omnitrax.

The biggest to the smallest: 2014 will prove to be a big year for several companies. Everyone knows James Richardson and Sons is one of the largest private companies in the country but it has not got as much attention as it should have after quietly growing much larger both in the agricultural sector and in the financial services. Look for even more muscle flexing in 2014. At other end of the spectrum, there are a number of smaller bio-tech and info-tech companies on the verge of bigger and better things such as Miraculins, Kane Biotech, Cubresa, Marsala Biotech, Wolf Trax, Invenia, Reclaim IO and Joist.

Métis millions: Settlement talks are expected to start this year regarding the landmark Supreme Court decision last March which ruled the Canadian government failed to live up to the promises it made to the Metis people when it negotiated for Manitoba's entry into Canadian Confederation in 1870. Manitoba Metis Federation president David Chartrand has high hopes a substantial capital infusion is in the works. These will be tough negotiations.

New Flyer express: After the 2008 financial crisis, municipalities throughout the U.S. shelved plans to upgrade their transit fleets. In the meantime one of the five North American bus makers shut down and New Flyer bought another with the help of a major investment in New Flyer by the large Brazilian bus company, Marcopolo. In 2014, it will be poised to start reaping the benefits of its well-managed operations and top-notch product line that will extend to mid-sized Midi buses this year.

martin.cash@freepress.mb.ca

 

Republished from the Winnipeg Free Press print edition January 3, 2014 B5

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