Wednesday, March 17, 2004
No lack of initiative in Atlantic Canada Most fortunes tied to family businesses
By Kelly Toughill
HALIFAX – Jamie Bagnell’s machines slurp up de-icing fluid better than a football fan guzzles beer during the Super Bowl.
The Nova Scotia entrepreneur is so good at recycling the nasty chemical that his small company has contracts from Oslo to Honolulu, and many points in between. When planes are sprayed in Washington, D.C., it is workers from Inland Technologies Inc. that recover the oil. When a United Airlines’ jet gets a shower in a snowstorm, it is usually with recycled de-icing fluid made in Truro, N.S.
Some see Bagnell’s international success as an aberration, an exception to a laid-back business climate in Atlantic Canada in which companies are more eager for government hand-outs than international contracts.
It is true that Atlantic Canada pulls more federal transfers out of Ottawa per capita than any other region. No matter how it’s measured- business subsidies, unemployment insurance or equalization payments- the river of federal tax dollars flowing East is far wider and deeper than any other.
But the image of Atlantic Canada as a region that lacks initiative, rather than opportunity, is dead wrong. Inland is just one of scores of success stories that show the stereotype is just that. In fact, entrepreneurialism defines business in Atlantic Canada, where most fortunes and jobs are tied to family-owned businesses, not big corporations.
According to Statistics Canada, just 6 per cent of the business revenues in Atlantic Canada are tied to multinational corporations, compared to 30 per cent in the rest of the country.
Most of the private companies were started by old-fashioned entrepreneurs.
The Irving empire is the most famous example, a family business that grew from one gas station in rural Bouctouche, N.B., to a web of companies worth more than $3.5 billion. But there are many, many more, including several launched in the last decade.
CanJet, the upstart discount airline that forced Air Canada to sharpen its game, was started by Ken Rowe under the umbrella of his Halifax-based IMP Group International Inc., a company that now employs 3,500 people around the globe and provides products as diverse as surgical supplies, rubber fishing boots and Russian hotel rooms.
CHC Helicopter Corporation was started by Craig Dobbin in Newfoundland.
Dobbin was having trouble getting to his favourite salmon fishing river, so he bought a helicopter for the trip and leased it out to cover the cost. The company is now one of the largest providers of helicopter services to the offshore oil and gas industry around the globe. It operates in 30 countries, has 3,400 workers and is still based in Newfoundland.
Oxford Frozen Foods is one of the largest blueberry producers in the world.
The $62-million-a-year company was started by John Bragg in rural Nova Scotia. Bragg, who is known as the Blueberry King, has expanded into the United States and Europe and added other products to his blueberry line.
Clearwater Fine Foods was founded in 1976 when John Risley started selling lobsters out of the back of a pickup truck on the side of a Halifax highway.
The company now has eight processing plants in the region, Atlantic Canada’s largest fleet of fishboats and ships seafood around the world.
The list could go on for pages.
Brian Lee Crowley is the head of the Atlantic Institute for Market Studies. He is one of the fiercest critics of Atlantic Canada’s dependence on federal transfers. He also thinks Atlantic Canada has a stunning entrepreneurial spirit, though he says it is sometimes diverted by federal incentives.
“People here are absolutely brilliant entrepreneurs,” he says, crediting even famous government boondoggles in Newfoundland and New Brunswick to entrepreneurial drive.
“If you can get government to fund a cucumber operation and a car company, you can do anything. The problem is that sometimes people are taught to
direct that entrepreneurial spirit at the government.”
Crowley says the success of Atlantic Canada entrepreneurs is particularly impressive because of special hurdles they face.
Peter Forton agrees. The president of ACF Equity Atlantic, the region’s first venture capital firm, points out that the number of new businesses starting in the region has dropped in the last two years after a strong period of growth. Investment money has dried up, he says.
“There is a lack of players on the ground here,” he says of the venture capital firms that typically fund entrepreneurs. “Nobody has money left, including us, and that hurts everyone.”
Crowley says several successful firms have moved to Toronto and Vancouver for just that reason- to find money for growth.
Bagnell doesn’t see it quite that way. He jokes about moving his company to the U.S.- to someplace with palm trees and warm winters- but says he never will.
“All my employees are here, why would I?” he says. “This is a good place to do business.” Bagnell, who began collecting used oil as a heat source for the family cleaning business in the 1970s, said he’s “never had trouble finding money.”
“If you have a good business, Bay Street is just as interested in investing in Nova Scotia as anywhere else,” he said. “You just have to rattle their chains.”
‘If you can get government to fund a cucumber operation … you can do anything.’