While oil's collapse hogs the limelight, provincial storylines deserve year-end recognition
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Hey there, time traveller!
This article was published 31/12/2015 (2413 days ago), so information in it may no longer be current.
The big business story of the year happened elsewhere — and the rest of us had to deal with it.
The price of oil fell 50 per cent between July 2014 and the end of last year, and it continued dropping another 28 per cent through the course of 2015.
It meant the economies in Alberta and Saskatchewan went into recession in 2015 and the Canadian dollar tanked, falling 15 per cent in value this year to its lowest level in 12 years.
As much as some like to think the Manitoba economy is impervious to outside dynamics, it was a struggle. But, notwithstanding the little oilpatch in the southwestern part of the province, it was less of a struggle for Manitoba than most other places in the country.
Winnipeg housing starts slowed by about seven per cent in 2015 compared with the previous year, apartment vacancy rates hit a 16-year high, and statistics up to the end of October show manufacturing growth was flat in the province.
But the unsettled situation created an environment for change, as some of the province’s largest commercial institutions took the opportunity to reorganize and consolidate.
In no particular order, here are my 10 favourite Manitoba business stories of 2015:
Morty’s revenge — Jay Forbes hit the ground running, starting 2015 as the new chief executive officer of MTS with a full-on corporate strategic review. Surprise, surprise, those efforts revealed its Toronto-based business network, Allstream, was a non-core asset and should be sold. To help prime that sales effort, staffing was cut by 25 per cent and, by the end of November, a deal had been struck with U.S. network aggregator Zayo Group. The Manitoba telco is trying to reassert itself to a loyal customer base at home as rumours swirl the rest of the company is a takeover target.
A train to nowhere? — After 18 years operating CN’s former Bay Line to Churchill, as well as the port itself, Denver-based Omnitrax is calling it quits. Besides political rhetoric about it being Canada’s only deep-water Arctic port and a few million dollars to help secure wobbly tracks and dredge the port, the company was largely left to its own devices. But with grain volumes declining, oil shipments a non-starter and global warming taking too long to extend the shipping season, Omnitrax wants out. Public support for the new operators (northern First Nations?) will say a lot about Canada’s sincerity regarding northern sovereignty.
It’s not us, it’s them — The Conference Board of Canada is bullish on Manitoba and often produces the most optimistic forecasts on the provincial economy. But the think-tank acknowledged earlier this year that when Manitoba’s economic growth is among the strongest in the country — which it was in 2015, and will be in 2016 — you have to know the rest of the country is not doing well. Manitoba’s economy is all about a little of this and a little of that. It’s diversified and it’s boring. But that lack of general sex appeal can be kind of sexy for economists. It’s predictable, it’s stable. An economist can really plan.
LifeScience back lane — For many years, Winnipeg has gazed longingly at Minneapolis’s LifeScience Alley and tried to emulate it. It’s a noble effort, and progress is being made. In 2015, Winnipeg researchers Mark Torchia and Richard Tyc, whose work formed the foundation for what is now called Monteris Medical Inc., won the $100,000 Ernest C. Manning Foundation principal award; scientists at the National Microbiology Laboratory were integral in historic breakthroughs to fight the Ebola virus; Intelligent Hospital Systems made a strategic acquisition; Cubresa Inc. raised enough funds locally to be able to develop to the next level; Viventia Bio Inc. is in the midst of a multimillion-dollar IPO in the United States; and Medicure Inc. is making more money selling its heart drug (Aggrastat) in the U.S.
Share the wealth (if there is any to share) — The mining industry did not have a good year, but it created the opportunity to finally establish appropriate protocols in Manitoba for partnering with the First Nations whose traditional lands are invariably being encroached upon. Manitoba has lagged in those efforts and its vast north has been under-explored at least partly because of that lag. A benefits-sharing agreement is being negotiated between the province and a First Nations mining council. As well, the province has funded First Nation Mining Economic Development Inc. to take an active role in real economic-development opportunities. No one is going to get rich tomorrow from this, but it is a step in the right direction.
CWB goes private — The deal in which the former Canadian Wheat Board was acquired by a joint venture between Bunge Canada and a Saudi agricultural investment company closed just 2 1/2 months before the Harper government was voted out of office. For good or for bad, the Tories were hell bent on dismantling the former grain marketing Crown corporation now called G3 Canada Limited. It remains the subject of court challenges and still rankles many three years after the CWB monopoly ended. Some are already saying the transaction was the cause of a 50 per cent decline in shipments through the Port of Churchill and hence the impending divestiture of the port by Omnitrax.
Changing landscape — The slow redevelopment of downtown Winnipeg continued apace in 2015. The massive addition to the RBC Convention Centre is just about complete and, earlier in the year, the CentrePoint development across from the MTS Centre opened with the Alt Hotel as its centrepiece. Two downtown condo towers and several other smaller ones in Osborne Village are under construction as well as a number of Exchange District conversions. The 14-storey UWinnipeg Commons residential tower just north of the Winnipeg Art Gallery also added to the downtown skyline in 2015.
Buses “R” Us — It seemed like it was bound to happen: the city’s two big bus manufacturers (New Flyer Industries and Motor Coach Industries) joined forces in 2015. New Flyer, the bigger of the two and the one with its head office in Winnipeg, bought Motor Coach for $425 million. It brings management of the highway coach company home where it began. The combined company’s expansive portfolio of city and highway buses — which will one day include an electric bus New Flyer is piloting in Winnipeg — could result in its Winnipeg shops rolling for years to come.
Starting up some business — Portray Advertising was named the most promising startup of the year in 2015 by the National Angel Capital Organization. It was the second year in a row a Winnipeg company took the honour (Permission Click won last year), putting a spotlight on the city’s robust startup scene. Restaurant delivery-information technology company Skip the Dishes now has a Winnipeg staff of more than 200, and expects that to almost triple in the years to come. A host of other companies emerged in 2015 that have global market potential.
Return of the conglomerate — Before its rise and fall as a broadcast company, Canwest Capital was a financial conglomerate. Winnipeg-based Federal Industries once owned trucking and manufacturing and steel companies. Exchange Income Corp. is today’s Winnipeg conglomerate. In 2015, it closed the acquisition of an East Coast aviation company and an Ontario aerospace manufacturer to go along with its Manitoba and northern regional airlines, a Florida-based used aerospace parts business and a host of manufacturing operations. The dividend-paying stock was up 21 per cent this year compared with an 11 per cent decline in the TSX.
Martin Cash has been writing a column and business news at the Free Press since 1989. Over those years he’s written through a number of business cycles and the rise and fall (and rise) in fortunes of many local businesses.
Updated on Thursday, December 31, 2015 7:10 AM CST: Replaces photo