Welcome to the Construction Outlook 2012 edition of SMACNA-BC’s Sheet Metal Journal. What a dubious task, forecasting construction industry trends for 2012, for the simple fact that there are so many outside sources affecting the industry. It’s the little things. For example, a little things like the world economy make this task as easy as trying to nail Jell-O to the wall. Being a glass-half-full kind of guy, I can see that I have a 50/50 chance of being right and those are odds I can live with.
In this issue, Jessica Kirby, editor of Sheet Metal Journal, has done an outstanding job reporting the opinions of construction industry experts, Vancouver Regional Construction Association president Keith Sashaw and BC Construction Association president and CEO, Manley McLachlan. (SMACNA-BC thanks you both for your input and support.) And since this is the Sheet Metal Journal Jessica interviewed me as well.
During the interview process there was one specific question that really stuck in my mind: “What steps can the government take to fuel growth in the BC construction economy?” In contemplating a response, which was, that the government provides tax incentives for developers to build more buildings, I am aware that some people are wary of this practice. I’m guessing that they are wary due to the fact that they are not truly knowledgeable about how tax incentives and Canadian taxes actually work. Late last year, SMACNA-BC director Aaron Smith of Smith Sheet Metal Works Ltd. shared a simple explanation of how Canadian taxes work, which I would now like to share with our readers.
Note: the original author of the following is unknown.
Canadian Taxes: Let’s put tax cuts in terms everyone can understand. Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
- The first four men, the poorest, would pay nothing.
- The fifth would pay $1.
- The sixth would pay $3.
- The seventh $7.
- The eighth $12.
- The ninth $18.
- The tenth man—the richest—would pay $59.
That’s what they decided to do.
The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement until one day the owner threw them a curveball: “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily meal by $20.”
So now dinner for the ten only cost $80. The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still eat for free. But, what about the other six the paying customers? How could they divvy up the $20 windfall so that everyone would get his fair share?
The six men realized that $20 divided by six is $3.33.
But if they subtracted that from everybody’s share, then the fifth man and the sixth man would end up being paid to eat their meals. So the restaurant owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay. And so, the fifth man paid nothing, the sixth pitched in $2, the seventh paid $5, the eighth paid $9, the ninth paid $12, leaving the tenth man with a bill of $52 instead of his earlier $59. Each of the six was better off than before. And the first four continued to eat for free.
But once outside the restaurant, the men began to compare their savings. “I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth. “But he got $7!” “Yeah, that’s right,” exclaimed the fifth man.
“I only saved a dollar, too. It’s unfair that he got seven times more than me!”
“That’s true!” shouted the seventh man. “Why should he get $7 back when I got only $2? The wealthy get all the breaks!” “Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!”
The nine men surrounded the tenth and beat him up.
The next night he didn’t show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They were $52 short!
And that, boys and girls, is how the tax system works.
The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up at the table anymore.
ATTENTION MECHANICAL ENGINEERS & CONSULTANTS
Did you know that if your company’s specifications are dated or appear ambiguous to contractors who are estimating your projects, your project prices are probably much higher than your competition’s? Projects in BC, especially in the Lower Mainland, are for the most part bid to Plans and Specifications. When a contractor is quoting a project, clarity of the design information is paramount in the process of calculating what the actual cost is to supply and install materials as per the scope of work. The secret of the successful contractor is, first, knowing what it costs to perform the work and then adding that dirty word that no one paying the bill wants to hear: “Profit.”
When a contractor is quoting a project and the documents are unclear and up to the contractor’s interpretation, the effort to cover costs for the unknown result in increased overall costs to the design authority, owner, and / or end user.
As most of you are aware, in conjunction with ASHRAE-BC and its membership, SMACNA-BC has hosted accredited SMACNA technical sessions, timely technical consultation, and specific topic lunch & learns—virtually anything we can offer to showcase SMACNA-BC contractors’ expertise and expand and enhance engineers’ and consultants’ knowledge base of SMACNA’s technical standards. Something else that SMACNA-BC offers, but is seldom requested, is a SMACNA- BC review / comment of a company’s Division 23 Master Specification (or Division 15 for those who refuse to change). Our committee will comb through your specifications line by line and offer comments on items that, in the opinion of the committee, lack clarity. All specification reviews are confidential and free of charge. In order to qualify for a review, SMACNA standards must be specified and the engineer / consulting firm must be a current member of ASHRAE-BC. Reviews will be performed on a first come first served basis. For more information or to request a review please contact Bruce Sychuk at smacnabc@smacna-bc.org
SMACNA-BC CONTRACTORS BELIEVE IN SUPERVISORY TRAINING PROGRAMS
In November 2011, SMACNA-BC, in conjunction with SMACNA National and ITI, hosted the supervisory training program, “How to Be a More Effective Foreman.” Kevin Dougherty of Kevlar Consulting made the trek all the way from Sarasota Springs, FL to facilitate two programs. As proof positive that SMACNA-BC contractors are committed to having professional, well-trained supervisors and journeymen, over the two days of sessions, 68 SMACNA-BC employees were granted paid time off to participate in this ever so valuable program. In his unique and entertaining way, Dougherty delivered information on topics such as conflict resolution, communication, productivity, motivation, time management, and many more aimed at developing skills that a foreman needs to thrive in business today.
