Leader-Post ■ Wednesday, July 7, 2004 ■ Page B4B4Business News ContactBruce JohnstoneTelephone 781-5304 Fax 565-2588 bjohnstone@leaderpost.canwest.com

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SPORT CHEK, SPORT MART

By CRAIG WONGCanadian Press

TORONTO (CP) — Sporting goods retail-er Forzani Group has agreed to pay $1.7million after an investigation by the federalCompetition Bureau suggested consumerswere misled about sale prices at the com-pany’s Sport Chek and Sport Mart stores.

“They were being duped into believingthey were getting a bargain when thegoods were so-called ‘on sale,’ but theyactually weren’t on sale,” Andrea Rosen,assistant deputy commissioner of compe-tition, said Tuesday.

“These ads were luring consumersaway from other retailers who were com-peting against Forzani and were using le-gitimate marketing techniques.”

In the case of Sport Mart, Rosen said,the company compared its prices withothers in the market and suggested SportMart’s prices were lower, but that wasn’tthe case.

“In the case of Sport Chek, they weresuggesting their prices had been dis-counted by a certain percentage whencompared to their own regular prices,and that wasn’t the case,” Rosen said.

However, Forzani disagreed with theCompetition Bureau’s characterization ofthe settlement, saying it settled the caseon the advice of lawyers to avoid the ex-pense of protracted litigation.

“The consent agreement makes clearthat FGL admits no wrongdoing and it mostcertainly does not admit misleading con-sumers,” the company said in a statement.

“FGL takes exception to the Competi-tion Bureau’s mischaracterization of thenature of the settlement that has beenreached and FGL will take such steps as itdeems necessary to protect its reputationand the goodwill it has worked so hardover the years to develop with consumers.”

Under the consent agreement regis-tered with the federal Competition Tri-bunal on Tuesday, Forzani will pay apenalty of $1.2 million and $500,000 forcosts of the investigation.

The Calgary-based company must pub-lish corrective notices in newspapersacross Canada, in Sport Chek and SportMart flyers, on its corporate Web sitesand in its stores across Canada — andmust stop making reference to inflatedregular prices in its advertisements.

Calgary-based Forzani is also requiredto establish a program to ensure confor-mity with the deceptive marketing prac-tices provisions of the Competition Act.

Forzani operates 217 corporate storesunder the banners of Sport Chek, SportMart and Coast Mountain Sports, and 174franchise stores under the banners ofSports Experts, Intersport, RnR, Atmos-phere, Econosports and Tech Shop.

Last month, the company reported afirst-quarter profit of $1.6 million or fivecents per share, compared with a profit of$1.2 million or four cents per share a yearearlier. Retail sales in the quarter endedMay 2 grew by 2.8 per cent to $227.7 million.

Shares in the company (TSX:FGL)were down 41 cents at $13.39 in tradingTuesday on the Toronto stock market.

Forzani Group fined $1.7Mfor misleading sales prices

OPINION

Growing season has also becomeliability season.There’s an ever-wider range of

crops and crop protection products.That means a lot more things can gowrong.

There has also been a major in-crease in custom work. Chemical ap-plication is often a job that a farmerhires someone else to do.

Custom seeding is also becomingmore common.

If you make a mis-take that harms yourown farming opera-tion, there’s little re-course.

If someone you’vehired makes a mis-take, they may be li-able.

Herbicide drift isa common problem.Often it’s a case ofspraying when it’sjust a bit too windy.

We have a wide array of cropsseeded adjacent to each other. Theglyphosate herbicide used on aRoundup Ready canola crop can bemurder on a neighbouring canary-seed or flax field. The broad leaf her-bicide used for weed control inwheat can clobber a nearby lentilcrop.

Low-drift nozzles have helped re-duce oversprays, but there are stillmany cases every year. Often, thedamaged area is relatively small.Neighbours usually tend to forgive afew acres.

Other times damage may be sub-stantial. Depending on the circum-stances, the loss can be in the tens ofthousands of dollars.

Farmers carry liability insurancefor this kind of problem. So do cus-tom applicators.

A custom applicator may put20,000 or 30,000 acres on a big highclearance sprayer in a growing sea-son. Many go years without having aninsurance claim.

When a claim does come, it canhurt, since most of the insurancepolicies for custom applicators havea $5,000 deductible.

Custom applicators also have toguard against operator error —spraying the wrong field or thewrong product or having pluggednozzles.

Another concern is herbicideresidue remaining in the machine.Some herbicides can hurt sensitivecrops at very low concentrations.There are cases where the productused two or three tanks previous hasdecimated a healthy and vigorouscrop.

For some products, the recommen-dations call for thorough flushingwith ammonia and water and forcleaning of all the screens and filterson the machine. Otherwise theresidue may come back and hauntyou. Entire fields have been lostfrom this problem.

There were instances this springof glyphosate herbicide beingsprayed by planes. Fields were toowet to support ground equipmentand the weeds were getting out ofhand. Spraying glyphosate by airseemed like a good solution.

But glyphosate is not registeredfor aerial application and for goodreason. It can drift and cause exten-sive crop damage. In this sort of acase, insurance may not stand be-hind the applicator, since it was anunregistered, illegal use of the prod-uct.

Seed germination can be anotherliability issue. Even though a seedsample does well in a germinationtest, the germination may havedropped dramatically by the timethe seed goes in the ground.

Seeds can also be affected by me-chanical damage during the cleaningprocess.

Every year, there are situationswhere crops are poor due to qualityproblems with the seed. Some ofthese lead to large lawsuits.

There have also been cases of in-oculate failure. Live rhizobium bac-teria are used in variousformulations when seeding pulsecrops. The bacteria work in combina-tion with the plant roots to producenitrogen for the crop.

Without inoculation, pulse cropstypically yield far less than theyshould. Trouble is, the inoculates aremade up of living organisms, whichcan be killed by temperature ex-tremes.

Custom seeders can find them-selves in trouble for seeding a croptoo deep or at the wrong rate. If toomuch airspeed is used in the seeddistribution system, damage to theseed can result in poor germination.

Insurance companies and lawyersare playing a bigger role in crop pro-duction than ever before.■ Kevin Hursh is a consulting agrologist andfarmer. He can be reached at:kevin@hursh.ca

Growingseason now

liabilityseason

REAL ESTATE MARKET

By Leader-Post staffand The Canadian Press

Housing prices continued to climb inRegina in the second quarter, driven bya shortage of listings, low interest ratesand a healthy local economy, accordingto Royal LePage Real Estate Servicesquarterly report.

In south Regina, the price of a typicalbungalow increased by 5.4 per cent to$137,000, while the same house in northRegina increased by one per cent to$126,300, compared with second quarterof 2003.

Mike Duggleby, manager of RoyalLePage Regina Realty, said the shortageof listings, particularly in first-time buy-

er homes, is the main reason prices arerising as quickly as they are. “For theRegina market, we usually see prices in-crease one, two, three per cent a year.Lack of supply is driving prices up.’’

In fact, the shortage of listings instarter homes in Regina is drivinghomebuyers to look at condominiumsor lower priced, “fixer-upper’’ homes,he said.

Standard condos, which Royal LeP-age defines as a 900-square-feet (84-square-metre) two-bedroom apartment,increased in price by six per cent to$73,250 in north Regina and by 7.8 percent to $97,000 in south Regina — thehighest year-over-year increase of anyhousing type.

Duggleby said he expects to price in-creases to slow in the third quarter asnew listings come onto the market.“We’re going to build a lot of inventory(in the third quarter). Listings are com-ing in faster, but sales are still brisk,’’he said

Nationally, Vancouver posted thebiggest price increases in the secondquarter, as the Canadian real estategathered momentum and the averageprice of a detached bungalow rose 6.8per cent to $249,200, the report said.

The average price of a standard two-storey home increased 8.5 per cent to$311,509 and a standard condominiumappreciated 6.5 per cent to $176,013.

Vancouver experienced the highest

price hikes, followed by St. John’s,Nfld., and Montreal. Large price in-creases were also seen in Victoria, Win-nipeg and Saint John, N.B.

“Demand has remained steadfastand strong in the past several years,with vigorous activity only limited by ashortage of supply,” Royal LePage CEOPhil Soper said in a release.

“While spikes in activity are typicalof the spring real estate market, arecord wave of new listings material-ized across the country during the sec-ond quarter, which allowed for theexpression of pent-up demand.”

Best-ever sales activity occurred inmany of the major markets, includingToronto, Edmonton and Regina.

First-time buyers driving best-ever sales activity

WEATHER WOES

By VERONICA RHODESLeader-Post

Seasonal businesses are taking a beating as be-low-normal temperatures and rain keep customersaway.

“With it raining, no one’s playing,” said Rob John-ston, guest services manager at Deer Valley GolfCourse.

“It goes not only to just your golf revenue but alsohurts your shop revenue. We’re not selling as manyproducts because we’re not having people comethrough here. Then it starts to affect your staff.”

The course is always packed on days without rain,but Johnston said it is only one-third full on dayswhen its wet. Staff hours are being cut back and lostrevenues can’t be recouped because of limited timein the day and in the season.

“You don’t really get that back because you can’tcreate 3 or 4,000 tee times or spots for people to playin. What you’ve lost is what you’ve lost and you justhope the rest of the year will be sunny and you’ll befull,” said Johnston.

Regina’s outdoor pools have been opening laterand closing earlier because cool temperatures arekeeping swimmers away.

Dave Stecyk, supervisor for the Sportsplex andoutdoor pools, said for the past three years, each ofthe five outdoor pools has averaged 310 people aday. This season, the pool’s have averaged 210 peo-ple per day, numbers that were bolstered by a fewhot, sunny days last week.

“The two warm days we had last week were a cou-ple of banner days so there is a bit of make-up.When the weather does turn nice, we see big

turnouts,” said Stecyk.Janine Sali, manager of Maxwell’s Amusements

Waterpark, said the park often won’t open if thetemperature won’t reach 20 C.

“It’s been really rough,” said Sali.Other seasonal businesses have also been hurting

from a lack of hot temperatures. Doug MacKenzie,owner of MacKenzie Plumbing and Heating Ltd.,said sales of air conditioners have been “almostnon-existent”. During a summer heat wave, the busi-ness can sell around 200 units, but this season onlyabout 20 have been sold.

“Maybe 90 per cent of the people buying air con-ditioners is based on a demand situation. Thephones get busy and they just want them. But with-out the weather there, there is no reason to do so,”said MacKenzie.

There has also been fewer service calls since airconditioning units have barely needed to run.MacKenzie said the lost sales can’t be made up,even if the rest of the summer is hot.

“I think you’ve missed the boat. You’ll catch somebut you’ll never recoup all. If you don’t get them ear-ly in the year, you’ve lost it,” said MacKenzie.

Tyson Moore, retail manager for ParadiseLeisureScapes, said sales for the season didn’t lookpromising in May but they are back up to the expectedlevel. The business, which sells and constructs swim-ming pools, usually averages nine or 10 pools a summer.

Moore said they have sold eight already this sea-son and are hoping to put in a few more pools by theend of summer. Sales have also been good for barbe-cues, outdoor furniture and hot tubs.

“Hot tubs have picked up. I guess people think it’scolder so they need a hot tub,” said Moore.

Rain chasing business away

EOY AWARDS

By Leader-Post staff

Two Regina businessmen are among the 37Prairie region finalists for the Ernst & Young Entre-preneur of the Year (EOY) 2004 awards, the nationalaccounting firm announced Tuesday.

Murad Al-Katib of Saskcan Pulse Trading Inc., aprocessor and exporter of pulse crops, was one ofthree finalists in the emerging entrepreneur catego-ry.

Sean Frisky of Ground Effects Environmental Ser-vices Inc., which designs and manufacture environ-mental treatment systems, was one of three finalistsin the manufacturing category.

Both companies have been finalists for businessawards in the past. Saskcan Pulse won theSaskatchewan Chamber of Commerce ABEX awardfor best new venture in 2003. Ground Effects was al-so a finalist in the 2003 ABEX awards in the physicalenvironment category.

Ground Effects was one of three winners of re-gional innovation awards for sustainable develop-ment, sponsored by the Canadian Manufacturersand Exporters and the National Research Council,in 2002.

Al-Katib, born in Davidson of Turkish parents,said he was honoured just to have been nominatedfor an EOY award. “We’re very satisfied to be short-listed as a finalists,’’ he added.

The two-year-old company, which employs about40 people in the Regina area, processes pulse crops,like lentils, field peas and chickpeas, as well as ca-naryseed and mustard, for the export market.

He said Saskcan and the other finalists serve asexamples of what businesses can achieve inSaskatchewan. “The entrepreneurial spirit is what’sgoing to grow this province. There are some goodstories to be told in Saskatchewan.’’

Frisky, who incorporated Ground Effects while anengineering student at the University of Regina,said being a finalist for an EOY award was “excel-lent recognition’’ for his company.

Ground Effects has developed a new method of re-mediation for contaminated sites, such as gas sta-tions and oilfield production and storage facilities.The traditional method usually involves closure andexcavation of the site. Ground Effects uses verticalor horizontal wells to draw the contamination fromthe site, without significantly disturbing the surfacearea, allowing business operations to continue.

Another Saskatchewan businessman, John Crossof Philom Bios of Saskatoon, which manufacturesnatural microbial products, was selected as a final-ist in the health sciences category.

Walter Mah of North Ridge Development Corp. ofSaskatoon, which builds residential homes and con-dominiums, is a finalist in the real estate/construc-tion category.

In October, one finalist in each category will bechosen as regional EOY award winners at a galaevent in Calgary. The Prairie region award winnerswill then join the Pacific, Ontario, Quebec and At-lantic region winners at the national EOY awardsceremony in Ottawa in November.

In June 2005, Canada’s Entrepreneur of the Yearwill join EOY award recipients from more than 30countries to compete for the title of World Entrepre-neur of the Year.

Two Reginabusinesses inthe running

ROY ANTAL/Leader-Post

Dean Holoien, from Moose Jaw, and his 6-year-old son Joey had some fun on the go-cartsat Maxwell’s amusements in east Regina on Tuesday.

KEVINHURSH

FARMING