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DEPARTMENTS

7 PUBLISHER’S NOTE

8 BUSINESS MONITORXQuarterly ; Tourism Bankruptcy; Kitchener’s NewVoice; Harper at RDM

25 WATERCOOLER

FEATURES

17 iCON ADVERTISINGAWARD WINNERSC to C Productions, MarketForce Tie for Top iCON HonoursPlus Best New Artist and2005 iCON Award Winners

11 TUNING OUT, TURNING OFF, DROPPING OUTBY JON ROHRRadical solutions, diminishing effectiveness and refusal to invest in the future – a “tell it like it is” interview with edge

30 MAKING A DIFFERENCEBY PAUL KNOWLES“A Charity for Charities”The Kitchener and Waterloo Community Foundation is ready with a cheque and a helping hand

COLUMNS

23 GUEST COLUMNBY ALLAN FOERSTERWas It Worth It?

24 GOOD GOVERNANCEBY JOHN T. DINNERGoing on Offense

SERVING BUSINESS IN WATERLOO REGION AND GUELPH

P.O. Box 41030, Waterloo ON N2K 3K0 • Tel: (519) 886-2831 • Fax: (519) 886-6409email: editor@exchangemagazine.com

ExchangeCONTENTS

Volume 22, Number 6 JUNE 2005

Publisher/Editor: Jon Rohr

Associate Editor: Paul Knowles

Feature Writers: Paul Knowles, Jon Rohr

Advertising Sales: Brian LyonTMR (519) 886-1946

Creative Director: Diane Johnson

Art Direction: Laurie Martin

Photography: Jon R. Group Ltd.

Circulation/Office Administration: Leanne Rohr

Exchange

EXCHANGE magazine is a regional business publication pub-lished by Exchange Business Communication Inc. President,Jon Rohr. Eight issues per year are distributed to each companyin Kitchener, Waterloo, Cambridge, Guelph, and Fergus asdetermined by Canada Post Business Postal Walks.Subscriptions are available for $29.90. Send cheque or moneyorder to Exchange, P.O. Box 41030, Waterloo, ON N2K 3K0.Attn: Circulation Department. Back issues are available for $8per copy. Phone: (519) 886-9953. Fax: (519) 886-6409. ISSN0824-457X Copyright, 2005. No part of this magazine may bereproduced without written permission from the publisher.

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On the cover: Some of the 2005 iCON Advertising Awards winners.

Larry Smith

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JUNE 2005 l exchangemagazine.com l 7

Let’s Be ClearHealthy business should fund a healthy society

BY JON ROHR

ay what you mean, mean what you say. Actions speakvolumes.

Prosperity is an overused word, but that shouldn’tdemean its significance. I don’t believe I’m speaking only formyself when I say “We want a prosperous community, onethat is successful, flourishing and promising.” A steady pushto prosperity also provides a cornucopia of humanitarian ben-efits, benefits I believe most people have come to take forgranted.

Humanitarian benefits can be as sim-ple as improving a frequently traveledpath by building a highway. Or as compli-cated as creating a vaccine that wipesout a damaging virus reeking havoc onlarge groups of people, such as Polio. Bypursuing prosperity we create a societywith opportunity – individually, spiritually,socially, intellectually, and culturally. Webuild a healthy community.

Prosperity has a price – you have to work for it. And to thebenefit of society and every member of its population – busi-nesses do. Focused on wealth creation, business is the onlygroup contributing the means to run the machine.

Those who think businesses is bad need to be remindedthat without healthy businesses returning healthy profits,there won’t be healthy tax revenues for governments to redis-tribute and thus fund society’s programs, including much-needed services.

What many governments and socially minded individualsfail to recognize is that business is changing. It’s gone global,and it’s not going back. So business has to work twice as

hard, in the short term, for less.During this time of non-campaigning, politicians need to

be reminded that businesses – big businesses, medium-sizedbusinesses, and small businesses – and their many employ-ees are the wealth generators that elected representatives, infact, represent.

The last federal election failed to address the challengesfacing business. The fact remains that more businesses every-where are competing with other businesses in countries ourparents used to call “the Third World”. Times have changed;for most employers it’s challenging – and for most it offersnew opportunity along with significant challenges.

Thankfully, businesses operating in Waterloo Region andWellington County are in one of the most prosperous andindustrious areas of North America, and we’re working hard

to keep it that way. Studies have shownthat we provide close to a billion dollars ofrevenue for the rest of Canada, somethingwe can be proud of. This also gives us avoice to demand that it is spent wisely.

Regardless of their party affiliation,politicians everywhere must first recog-nize the value that business providescommunities. They must acknowledgethat businesses enable society to offerhumanitarian programs and must

encourage a climate to allow business to continue to strivefor prosperity. As employers and employees working towardsprosperity, and members of a healthy society, we all share butone objective – to keep the machines running.

When I look at the the likely situation – where our hard-earned tax dollars may have been working against society’sinterest, and were used only forthe interest of a certain group –my mind boggles. But I recoversufficiently to realize how loud-ly this speaks to the need forpolitical retooling.

PUBLISHER’S NOTE

JON ROHR IS

PUBLISHER OF

EXCHANGE MAGAZINE

FOR BUSINESSe-mail: jrohr@exchangemagazine.com

S

8 l exchangemagazine.com l JUNE 2005

THE SOUTHERN ONTARIO TOURISM ORGANIZATIONis bankrupt. The organization, which stated that itrepresented about 500 tourism partners fromNiagara to Windsor to Tobermory, declared bankrupt-cy effective April 22, 2005.

But the bad news may not end there. SOTO ChairBob Usher, who is CEO of the Covent Garden Market

Group in London, Ontario, told Exchange that the demise of SOTO may be the first of halfa dozen such failures among similar tourism marketing organizations in Ontario over thenext three to six months.

A statement to SOTO members, from Usher and Peter McFadden, President and CEOof SOTO, said in part: “After struggling for the past few years and working through the Re-Visioning process during the last 10 months it became evident that SOTO could not devel-op a sustainable business plan that would provide appropriate value to its members andpartners. The process was frustrated by SOTO’s inability to form a meaningful partnershipwith the Ministry of Tourism and Recreation and the Ontario Tourism MarketingPartnership. ... As a result, the Board ... determined that SOTO was insolvent and thebankruptcy assignment was approved by resolution.”

KPMG Inc. is the trustee in bankruptcy.Usher told Exchange that the Ontario govnerment put SOTO in an impossible situation.

He said, “If you look at the whole set-up of SOTO,” compared to similar organizations inother provinces, SOTO should have been receiving annual provincial funding between“$800,000 and $1 million.”

In fact, he said, no provincial money was forthcoming, despite frequent indications thatthis would take place. Usher claims that there were consistent problems related to theprovince. In addition to a lack of funding, “SOTO was led to believe... they were going toplay an integral part in the Ontario Tourism Marketing Partnership,” which he says did nottake place, despite apparent commitments from the province. He claims the commitmentwas withdrawn at exactly the same time SOTO officially came into existence.

Usher believes that the bankruptcy will have the most negative impact on small com-munities. While larger centres will have marketing and funding options, “I think there’sgoing to be a tremendous void, especially with small communities,” he says.

The volunteer board Chair says SOTO closed its doors while trying to be fair to all staff,stakeholders and clients. A staff of ten – now out of work – were paid up to date. Usher saysthat “our payables were low ... perhaps $3,000.” The SOTO website now directs enquirersto a provincial toll-free number.

However, it is understood that some SOTO members have paid for marketing programsthat may not be delivered, or delivered in full.

As noted above, Usher believes several more shoes are going to drop. “We believethere are other organizations in Ontario ... in the same situation.” He thinks five or six

BUSINESS MONITOR

other bodies may fold in the next three to six months, and he also told Exchangethat he understands the provincial ministry of tourism will suffer a funding cut ofbetween 5% and 15% in the next year.

According to the SOTO website – which, unlike the organization’s Brantfordoffices, is still functioning – the organization came into existence April 1, 2000,“as the result of a merger of three former tourism organizations: the SouthwesternOntario Travel Association (SWOTA), the Festival Country Travel Association(Festival Country) and the Grey-Bruce Tourist Association (GBTA).”

Usher points out that SOTO was governed by an 18-member Board of Directors,all people from the tourism industry in south-western Ontario. He suggests, there-fore, that it is actually the industry that made the decision to fold SOTO, althoughwhen he allocates the blame, he clearly looks east, directly to Queen’s Park.

Dave Glofcheski is Advertising Manager of Visitor Magazine(www.visitor.on.ca), an independent publication that is a sister product toExchange Magazine. Glofcheski says that, upon learning of the demise of SOTO,Visitor immediately began contacting stakeholders in the tourism industry toexplore solutions to the issues facing former SOTO members, including market-ing, promotion and distribution challenges.

- PAUL KNOWLES

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SOTO Gone: Tourism Organization Declares Bankruptcy

• The Canadian economy rose by 0.3% in February after increasing 0.2% inJanuary. Growth came retail and the demand for machinery and equipment.

• Industrial production (factories, mines and utilities) decreased by 0.2% as anincrease in manufacturing output (+0.2) was overshadowed by declines in themining, oil and gas extraction sector (-1.3%) and by utilities (-0.8%).

• Construction activity edged down by 0.1% in February. Residential construc-tion declined for a third month in a row (-0.6%).

• Output in the manufacturing sector rose by 0.2% in February, pushed bydurable goods production (+0.6%). Only 9 of 21 major groups, accounting for38% of manufacturing’s value added, reported gains.

• Demand for heavy-duty trucks fuelled output of motor vehicles (+0.6%).

• In April, manufacturers stating they would increase production over the nextthree months stood at 18%, up 5 points from January. Manufacturers plan-ning to decrease production in the second quarter rose 4 points to17%.

• Just over 7 out of 10 innovative biotechnology firms in Canada that attemptedto raise financing capital in 2001 were successful in raising $980 million,according to new data from the Biotechnology Use and Development Survey.In 1999, successful firms raised $2.2 billion in capital.

• Prices for manufactured goods at the factory gate rose in March for a fourth

www.xquarterly.ca

JUNE 2005 l exchangemagazine.com l 9

BUSINESS MONITOR

Diverse ... and on the verge ofsomething bigKITCHENER BUSINESSES HAVE LAUNCHED a new publicationhighlighting Kitchener’s diverse economic structure andraising Kitchener’s profile as a community “on the verge ofsomething big”. The magazine, titled “diverse-city:Kitchener edition,” is published by Exchange BusinessCommunications Inc. under an agreement with the Cityof Kitchener. Exchange Business Communications is alsopublisher of Exchange Magazine for Business.The agree-ment “is an example of a successful public private part-nership (P3) with the city of Kitchener,” says Jon Rohr,

Publisher of Exchange Magazine and diverse-city: Kitchener edition.“I am very aware of the challenges Kitchener has faced over the last decade,

especially with the downtown and ICI expansion,” says Rohr. “The city of Kitchener is onthe upside of change, and editorial content in diverse-city: Kitchener edition will reflectthat positive shift in momentum that is so crucial to economic success and prosperity. It canbe seen in the urban landscape of the downtown core, in the attitude of city staff concern-ing the efforts to attract new business, and in the way Kitchener is dealing with challenges.”

Thirty thousand magazines were distributed, in early May, to Kitchener businesses andselected areas of industrial, commercial and institutional businesses located west of theGTA, 30 minutes from the city.The targeted audience is business owners looking to growtheir operation through expansion opportunities, and looking for a diverse community inwhich to grow. A second issue is scheduled to be published in October, followed by twomore in 2006.The premier issue profiles Kitchener native Liza Fromer, morning anchor ofCityTV’s Breakfast Television. Liza’s great-grandfather, grandfather and father operatedFromers Bakery on the east side of Kitchener up to 1970.

To find out more about diverse-city: Kitchener edition, go to diverse-city.org.

“The prime minister has just cut a $4.5billion deal to buy votes to deal withallegations of vote-buying. So to dealwith Liberal corruption we get an NDPbudget. The way this Parliament issupposed to work I guess is that whatthe Liberals don't steal, the NDP getsto spend.“

– Stephen Harper, Federal Conservative Leader(Toronto Star, April 28)

XQuote

Federal Conservative Leader StephenHarper (left) visited RDM Corp in Water-loo in mid-April. He is shown with RDMPresident and CEO Douglas Newman(centre) and Edward Twardus, Presidentof Energetex of Waterloo.

Harper at RDM

consecutive month, but at a slower pace thanFebruary. Raw materials prices were up for a thirdmonth in a row as crude oil registered its largestincrease since December 2002.

• Average weekly earnings of payroll employeesincreased by $3.89 in February to $713 (seasonallyadjusted). Industries showing the strongest year-over-year growth rates were: accommodation andfood services (+6.2%), mining, oil and gas (+6.0%)and retail trade (+3.9%).

• Between 1989 and 2003, services employment grewfaster than goods employment in all but four of 27urban centres. The share of workers in servicesemployment rose fastest in Hamilton, Oshawa, St.Catharines, Niagara and Kitchener.

SOURCE STATISTICS CANADA

Nominations are being accepted for the 21stAnnual Waterloo Region Business AchievementAwards where local companies that haveexcelled or made outstanding contributionswill receive awards in six categories:

• CIBC BUSINESS OF THE YEAR

• KPMG EXCELLENCE IN TECHNOLOGY

• THE RECORD SMALL BUSINESS

• ROYAL BANK RETAILER OF THE YEAR

• UNION GAS CORPORATE CITIZENSHIP

• GOWLINGS NEW BUSINESS

Don't hesitate to nominate your own company!All companies must be based withinWaterloo Region.

The Award Ceremony and Dinner will beheld Thursday November 3, 2005 at 7:00 pmat Bingemans. Tickets are $150 each, with agroup rate (table of eight) of $1150.

The nominations deadline is July 29, 2005.To nominate a company, to order tickets, or for more information, contact JuniorAchievement at:603 Kumpf Drive, Waterloo, ON, N2V 1K3P: (519) 576-6610 / F: (519) 576-3210www.jawaterlooregion.org

BUSINESS EXCELLENCEWho Wins Your Nomination?Waterloo Region Business Achievement Awards

Economic activity rises

GDP billions of chained $ (1997)

1,070

1,060

1,050

1,040

1,030

1,020

1,010

1,000

All industries

2003 2004 2005

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