CPC-NOV-16 : simplebooklet.com

CANADIAN PETROLEUM CONTRACTOR An official publication of the CPCA in this issue 5 8 14 Regional news The business of petroleum contracting POST safety bulletin advertisers CANADIAN PETROLEUM CONTRACTOR Canada Brokerlink Ontario Ltd 13 Canadian Petroleum Contractors Association 4 An official publication of the CPCA Clarkway Construction Ltd 15 DTE Industries 2010 Limited 7 Meridian Manufacturing Inc 15 National Energy Equipment Inc 2 Ontario Petroleum Contractors Association 3 Pumps Pressure Inc 12 Steelcraft Inc 5 The Tank Shop 11 Western Oil Services Ltd 11 ZCL Composites Inc 16 Advertising Sales and Editorial Offices EnsembleIQ 2300 Yonge Street Suite 1510 Toronto ON M4P 1E4 Telephone 416 256 9908 Toll free 1 877 687 7321 Fax 888 889 9522 Contact Elijah Hoffman Ext 1009 Email ehoffman ensembleIQ com PM42940023 NOVEMBER 2016 CANADIAN PETROLEUM CONTRACTOR 3

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BOARD OF DIRECTORS CPCA MEMBER ASSOCIATIONS Alberta Petroleum Storage Systems Contractors Association Association des Entrepreneurs P troliers du Qu bec Inc British Columbia Petroleum Contractors Association Manitoba Petroleum Contractors Association Ontario Petroleum Contractors Association Saskatchewan Retail Petroleum Construction Association ALBERTA Marcus Cormier Cantest Solutions Tel 403 912 9129 Ext 12 mcormier cantest net Kim Hansen MI Petro Tel 866 563 7868 khansen mipetro com MANITOBA Chad Kenwood Century Petroleum Construction Tel 204 694 2230 centpet mts net ONTARIO Gord Thompson Comco Canada Inc Tel 705 728 0905 gord thompson comcocanada com Ken Jamieson Kenstruct Ltd Tel 855 912 8453 ken kenstruct ca QUEBEC Guy Rochon Service Construction Mobile Lt e Tel 418 688 5751 grochon groupemobile com Louis Rizzetto quipement National nergie Tel 514 489 8281 lrizzetto nee ca SASKATCHEWAN Arlene Wright Capital Petroleum Services Ltd Tel 306 757 3533 arlene_cps sasktel net Mike Seibel National Energy Equipment Inc Tel 306 665 0223 mseibel nee ca BRITISH COLUMBIA Rob Bateman Western Oil Services Tel 604 514 4787 rbateman westernoilservices com Margo Middleton Middleton Petroleum Tel 250 372 7742 midpet shaw ca CPCA OFFICE Michelle Rae Administrator Mailing Address 92 Caplan Ave Suite 223 Barrie ON L4N 0Z7 Toll Free 1 866 360 6722 Tel 705 735 9437 Fax 705 735 9418 info cpcaonline com Web www cpcaonline com OFFICERS Marcus Cormier President Kim Hansen Vice President Louis Rizzetto Secretary Chad Kenwood Treasurer 4 CANADIAN PETROLEUM CONTRACTOR NOVEMBER 2016

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regional news BCPCA Regional Message News from BCPCA By Rob Bateman It s been a busy summer for most member contractors on the construction side of things and unsettling for contractors in the retail petroleum service business Major oil companies through their agents are pushing petroleum contractors for lower labour rates and parts margins while at the same time demanding more costly terms and conditions I believe that this is being done at the risk of safety and quality of service performance Although oil prices are still low environmental regulations public safety concerns retail dispensing equipment and payment system sophistication are at an all time high it s not the time to bring in cheap and untrained service technicians Several oil companies have sold their retail operations Perhaps it s not a good business for them as stand alone facilities In any event some of us will leave the retail service business and with fewer trained technicians in the field the lack of supply will drive up prices for the oil companies that remain and for the new owners But in the meantime we can only hope there is not a catastrophic event that will embarrass all concerned BCPCA directors met last spring with officers of the British Columbia ITA Industrial Training Authority to request help in up dating both the training material and exam modules of the Petroleum Equipment Installers and Petroleum Equipment Service Technicians trade We are pleased to report that this October program development work in the form of three workshops utilizing Subject Matter Experts from BCPCA member companies will commence with OCCUPATIONAL ANALYSIS workshop PROGRAM OUTLINE review and an EXAM workshop This will be a 12 day process and we hope to have good things to report about our trade certification program later this year or early next This has taken a long time to organize and it s been a frustrating time for our board and our members particularly because we don t have a TSSA or PTMAA in this province to champion the cause But the ITA certification has become a solid requirement for Federal Government Departments Engineers and Mechanical Contractors bid proposals in BC and members are seeing the importance of havSteelcraft_1011_Waterloo Layout 1 ing this certification to compete for this work 10 25 11 6 15 AM Storage Containment Solutions Since 1923 Looking for a superior storage containment solution STEELCRAFT Inc offers a full line of standard and custom liquid containment tanks and systems as well as pressure vessels including single and double walled tanks underground storage process vessels and field erected tanks Field proven after thousands of installations our products meet stringent code specifications and are the choice of engineers contractors and architects With our leading edge engineering custom manufacturing facilities and in house finishing capability you can trust us to deliver a quality product on time every time For lasting trouble free storage containment STEELCRAFT Inc Visit our website or contact us Waterloo ON 1 800 265 8840 Moncton NB 1 888 258 8166 Edmonton AB 1 888 661 8265 Innisfail AB 1 800 661 2851 www steelcraftinc com NOVEMBER 2016 CANADIAN PETROLEUM CONTRACTOR 5 Page 1

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regional news News from the A E P Q Regulation project on continuous training Nouvelles de L AEPQ Projet de r glement sur la formation continue By Guy Rochon President Par Guy Rochon Pr sident Presently in Quebec someone who wishes to obtain a contractor s license has an obligation to demonstrate following exams that he or she has relevant knowledge and skills in the construction business management Once this condition is met the license holder is no longer required to prove his skill maintenance However the codes governing the construction field are continually evolving as technology advances or changes made to the regulations Over time a gap between regulation and practice may exist due to the contractors failure to maintain their skills which will inevitably influence the quality of work The duty of knowing the laws and regulations applicable in Quebec falls within the contractors responsibility In this context Quebec contractor license holders had until now a moral obligation to maintain their knowledge and skills up to date The R gie du B timent du Quebec RBQ will intensify this need by creating a legal obligation to maintain the skills of contractors by implementing a regulation on continuous training This new regulation will contain control methods supervision or evaluation for its application penalties arising from failure to comply and where applicable a waiver to comply Formal talks on this matter will begin shortly and the AEPQ will take part in those discussions Actuellement au Qu bec une personne qui d sire obtenir une licence d entrepreneur est soumise l obligation de d montrer la suite d examens qu elle poss de les connaissances ou les comp tences pertinentes dans la gestion d une entreprise de construction Une fois cette condition remplie la personne titulaire n a cependant plus faire la preuve du maintien de ses connaissances Or les codes r gissant la construction voluent continuellement au gr des progr s technologiques ou des changements la r glementation Au fil du temps un cart peut exister entre les r gles de l art et les pratiques des entrepreneurs qui n gligent de maintenir leurs comp tences cette situation se r percutant in vitablement sur la qualit des travaux L entrepreneur se doit dans ses activit s de conna tre les lois et les r glements applicables au Qu bec Dans cette optique les r pondants de licences d entrepreneurs au Qu bec avaient jusqu aujourd hui l obligation morale de maintenir leurs connaissances et leurs comp tences jour Par la mise en vigueur d un r glement sur la formation continue la R gie du B timent du Qu bec RBQ veut intensifier cette n cessit en cr ant une obligation l gale de maintien des comp tences des entrepreneurs Ce r glement devrait alors contenir les modes de contr le de supervision ou d valuation des obligations les sanctions d coulant du d faut de s y conformer et le cas ch ant les cas de dispense de s y conformer Des tables de travailles doivent commencer bient t et l AEPQ va participer aux discussions 6 CANADIAN PETROLEUM CONTRACTOR NOVEMBER 2016

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regional news News from the OPCA OPCA a Friend of Threads of Life Organization OPCA Annual Conference Join us March 6 8 2017 for OPCA s 23rd Annual Conference being held in conjunction with The Convenience U CARWACS Show Toronto Next year we are returning to our previous venue the International Plaza Hotel located across from the Toronto Congress Centre home of this year s CARWACS trade show Registration for the conference will be open but attendees can book their rooms at the International Plaza by visiting the OPCA website at www opcaonline org Special rates are posted as well as a link to our special online booking tool The OPCA is honoured to be recognized by Threads of Life with a Friend of Threads of Life award at an annual event November 5 To date the OPCA has raised over 22 000 for Threads of Life with their annual golf tournament proceeds The OPCA has a lot to be thankful for especially for the support of their Petroleum Oriented Safety Training program by contractors across Canada The OPCA supports Threads of Life because of our mutual belief in promoting safety in the workplace and dedication in preventing workplace tragedies The OPCA is proud to support such an important organization like Threads of Life to date they have helped hundreds of families through their various programs ISO 9001 2008 Certified Your Partner in Total Containment Solutions Protecting the environment for future generations Aboveground Tanks Underground Tanks Tank Accessories Fire Rated Tanks Double Bottom Tanks Fuel Oil Tanks Double Wall Oval Tanks Custom Fabrication Spill collectors W all Mounted Free standing Vertical Tanks Horizontal Tanks Bench Tanks Dike Tanks Utility Tanks Sub Base Tanks Static Head Tanks Utility Pumps Rectangular Tanks Threaded Integral Style All tanks are designed fabricated and labeled in accordance to the latest edition of applicable standards UL ULC AWWA API Up to 250 000LT 69 Comstock Road Toronto ON M1L 2G9 Phone 416 757 6278 Fax 416 757 5579 Toll Free 1 800 387 1400 dteindustries com sales dteindustries com NOVEMBER 2016 CANADIAN PETROLEUM CONTRACTOR 7

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The business of petroleum contracting Establishing a business plan setting goals and monitoring results are the keys to success By David Mason B Comm FCIP CRM We ve watched construction companies grow downsize sell purchase or maintain their operations over the years In this article we share the observations through offering a businessmodeling tool for service technicians and recommendations regarding business planning On the service side of your petroleum contracting business labour costs are one of the major operating expenses To maximize operating performance and overall profitability every business owner or manager must be able to measure the true cost of labour and how it relates proportionately to the labour rates billed to clients The margin after deducting the full labour burden must be sufficient to cover the balance of expenses such as equipment and tooling indirect labour administrative expenses and last but most importantly profit LABOUR Labour costs generally refer to wages paid for mental or physical effort exerted to accomplish a task however in business accounting labour cost includes the cost of wages medical insurance life insurance workers compensation insurance pension contributions and taxes on those wages as well as other benefits shouldered by the company These costs are classified as direct or indirect labor Direct labor costs are those paid to employees directly involved in the production of goods or performance of services while wages of workers not directly engaged in the production of goods or rendering services to customers such as an office assistant are considered indirect labor A description of labour burdens set as a percentage for service technicians is outlined to the right 8 CANADIAN PETROLEUM CONTRACTOR NOVEMBER 2016 DESCRIPTION EI QPIP 4 49 EHT 1 95 CPP QPP 4 95 Workman s Compensation 4 20 Life Insurance 0 28 Accidental Death 0 08 LTD 1 28 EHC 1 28 Dental 1 52 Pension Plan 1 84 Training 2 36 Stat Holidays 1 76 Vacation 7 76 Sick Days 1 00 Licenses 0 20 Communication 3 88 Uniforms Safety 3 70 TOTAL 42 46

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If the base labour rate is 25 00 per hour with the above burdens factored in the actual cost would be 35 50 We encourage you to develop a schedule of labour burdens specific to your operation As a contractor you constantly receive pressure from employees for raises and from customers to lower labour rates It s recommended that the above information is shared with your employees and customers With employees it is quite common to include with their pay notification a total rewards statement The statement includes a schedule of the base wage and lists all the additional labour costs paid by the employee and employer This can hopefully provide insight and appreciation to the employee as to the actual costs of running a business With respect to clients the full labour burdens as a percentage can be shared through a marketing sheet The marketing sheet should demonstrate your company as a differentiator to those unapproved or casual contractors that move in and out of the industry The sheet that lists the associated costs of maintaining skilled educated and safety conscious employees can assist in justifying your labour rate And more specifically with field technicians the contractor can also list vehicle and equipment costs related to providing a service technician to a site FULL LABOUR BURDEN VS LABOUR RATES ness time and material as opposed to construction station builds The template allows you to input various operational data to determine how labour billing rates and hourly wages impacts the bottom line The template is set up in an excel workbook with three working tabs to enter information The first tab is the income statement summary and revenue assumptions The revenue assumptions take into account average billable hours and actual paid hours of direct labour The remuneration tab calculates the direct and indirect labour costs The last tab includes the equipment costs and G A expenses Both the remuneration and the operating tabs pull the inputs into the revenue tab which summarizes your financials by actual dollar and cost ratios to revenue It is recommended that you start with actual data and assumptions to calibrate it to your profit margin Then you can manipulate rates and hourly wages to determine bottom line impact It can also be used as a planning model to determine the bottom line affect of adding direct or indirect labour Also the workbook does not contain any input limitation so it can be the base to customize to your company Below is a sample of the contractor with three service technicians Note the model is specific to the profit margin of direct and indirect labour costs with associated equipment costs and G A expenses The model does not factor revenue and profit associated to parts and material billed into the service calls On the CPCA website a business model template is available for download The model is specific to the service technician side of the busi Revenue Summary NOVEMBER 2016 CANADIAN PETROLEUM CONTRACTOR 9

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THE NEED TO PLAN If you have been a member of the Petroleum Contractors Association from the beginning congratulations you ve been in business for more than 20 years Although the industry has seen significant change and yet in some aspects remains the same the thought on many contractors minds is the transition to retirement Have you set a date More important to the date do you have a retirement plan Hopefully you ve followed your investment advisor s advice throughout your tenure and paid yourself first Hopefully you have an asset base that will fund your retirement and the sale or closWesternOil_CPCAOct14_FINAL pdf ure of your business is not your key financial support But like many if you ve continued to put everything you have into the business a sale regardless of assets or shares will affect your retirement lifestyle As principals of a small to medium sized construction company retirement is a very complicated task Do you close the business down by selling the tangible and intangible assets or do you find a successor s to purchase your shares to continue on Whichever your method the value of the business is as unique as the individuals and circumstances that are involved What is a fair market value would it not be the amount that two parties would pay if they were not forced to buy or sell The reality is usually one of the two parties is leading the process which reverts back to the old law of supply and demand resulting in either a lower or high selling price So how does one prepare for selling your business How do you formulate a retirement plan Often it s a bit of a shocker when you make the decision and you ask an advisor to put a value on business In preparing your business for sale metaphorically you have to look at your business as a unit or entity that provides utility usefulness On your income statement revenue is an indicator of productivity or in other words utility In smaller companies the principal s productivity work ethic business acumen motivation capacity or whatever you choose to call it determines utility The principal is the company What happens to the company s utility when you leave How can you transfer the usefulness through a sale This is fundamental notion that will determine the businesses value if the new owner is comfortable that the utility transferred will support the sale price of the business and a decent operational return then you ll probably sell the business On the other hand if the selling principal represents the only utility in the company most likely a sale will not occur unless you can identify a potential candidate family member or key employee to take over the business that will assume your utility over time Otherwise you ll probably be getting into an arrangement to transfer your client calls to a competing contractor and selling your asset base This route is particularly tough because you want to take care of your clients so you refer them to competition and your contractor equipment generally does not hold its value on resale 1 2015 10 06 10 40 AM www thetankshop ca OF SERVICE TO THE PETROLEUM INDUSTRY SINCE 1952 METALLIC TANK FABRICATION ULC UL AWWA API FROM 100 L TO 250 000 L PRESSURE VESSELS ASME 27 Industrial Blvd Unit 140 Caraquet NB E1W 0A2 TEL 506 727 0955 FAX 506 727 0959 19840 57A Avenue Langley BC V3A 6G6 Tel 604 514 4787 Fax 604 514 4688 sales westernoilservices com WESTERN OIL SERVICES EASTERN LTD 19 250 Shields Court Markham ON L9R 9W7 Tel 647 468 8700 ontario westernoilservices com Proudly Serving The Petroleum Industry Since 1950 NOVEMBER 2016 CANADIAN PETROLEUM CONTRACTOR 11

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BUSINESS PLANNING For those that have family in the business your succession plan is probably already determined years before you ve considered retiring While some days it might be difficult working with parents or siblings you are the fortunate ones Again metaphorically speaking the transference of your utility is a natural process that starts the day your successor comes to work In the valuation process usually concessions are made on both sides to ensure the business continues on maintaining and growing utility as the company changes hands Many other variables or circumstances on both the vendor s and purchaser s side will drive a sale Examples such as health issues larger corporations entering a new marketplace or the need to acquire complementing services or expertise will directly affect the market value of the business If you re the principal contractor and your retirement is not in your immediate future or if it s a few years away the importance of annual business planning is the key to your eventual retirement Your business planning will involve getting your business saleable or in other words setting up to transfer your utility It s a simple statement but it s easier said than done They say that everyone always achieves the goals in life they set out to do The problem is that only 10 of the population sets goals Business planning and goal setting is difficult for a small business because you are focused 24 7 on customer service employees regulators and subcontractors and you are constantly making critical decisions that affect your day to day operations Business planning involves critical decisions for the long term and are generally less urgent therefore taking a back seat to those critical daily decisions Literally years can go by without stepping back and going through the exercise of reviewing your corporate direction It s usually when something sudden and unexpected happens that forces you to stop and set a direction Time is the commodity in business planning especially around the topic of retirement If you make formal business planning a behavior early then less urgency and more options will be available in the latter years A FEW SIMPLE GUIDELINES TO BUSINESS PLANNING It s important that you make it a formal annual event away from your work environment It s not a long drawn out process as you ve most likely been doing it on the fly for years Arrange to be away a few days offsite with your shareholders directors or spouse Pressure Washers Hot Cold Complete Air Compressor Systems Wash Bay Equipment Commercial Vehicle Wash Systems Waste Water Recycling Equipment Bulk Fluid Handling Equipment Parts Cleaning Systems CAT Pumps Replacement Parts Design Consulting We install and service everything we sell HEAD OFFICE 7018 Johnstone Drive Red Deer AB T4P 3Y6 TF 1 888 430 9395 P 403 347 9770 F 403 343 7922 Burnaby 604 434 2188 Calgary 403 263 7202 Edmonton 780 430 9359 Grande Prairie 780 539 9939 Leduc 780 980 9294 Lethbridge 403 328 0504 Saskatoon 306 242 6622 Brandon 204 728 9303 www pumpsandpressure com 12 CANADIAN PETROLEUM CONTRACTOR NOVEMBER 2016 P P_CPCA_June16 indd 1 2016 05 26 4 17 PM

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Some of the information you want to include in your planning meetings are current financial statements client lists accounts receivable reports and notes on internal and external issues Business planning can be a simple process which involves taking a step outside of the operation and taking an honest look in as well as surveying the external environment The review of your company strengths and weaknesses plus current trends in the industry and local economies that might positively or negatively affect your business is the basics to reviewing your operation From your analysis develop goals then actionable items to get to that point Assign the items then monitor the results Again easier said than done so often at year end companies fail to review results this actually should be the first part of your planning process EXAMPLES OF ACTION ITEMS THAT COME OUT OF PLANNING ARE Identify a successor family member or key employee to communicate your retirement plan and start the process Review buildings lands and equipment to maintain or enhance value Engage a professional to value the business Review expenses towards regulating spending Evaluate or grade your clients based on revenue generation technical professional competencies and payment habits Employ an appropriate billing rate for the above Review equipment purchases for alignment with overall goals Investigate training issues costs for product or service expansion Make a list of new clients to be contacted Review technology that will improve productivity i e GPS software in fleets Develop relationship management plan around suppliers and regulators A note for larger contractors with middle department managers or regional operations annual business planning and budgeting are standard procedure Obviously one would consider annual budgeting and planning as two different exercises but often these processes get blended together due to the fact that revenue projection and expense allocation are key elements to budgeting which turn into the business plan for the year The problem with budgeting planning as one exercise the negotiation of budget numbers are usually based on historical performance drives the business plan To capture a meaningful budget the business plan has to drive the budget which should be completed before the budget process With larger corporations the business plan should include the input from the front line staff that can point out the opportunities and areas of improvement that are evident on a daily basis The front line input also generates motivation as the solutions are driven from the bottom up The managers owners business acumen can determine a meaningful path and goals from the input For larger contractors whichever format of budgeting and business planning you follow just make sure it s meaningful as opposed to just going through the motions of completing the annual task Whether you are a large or small contractor goal setting through established business planning is a key to success And if retirement is in the picture you re realizing the value of time as a commodity and the importance of planning setting goals and meaningful execution played throughout your career and into the transition to retirement Proudly serving the insurance needs of Petroleum Contractors since 1993 At BrokerLink our commercial insurance specialists offer a complete range of insurance products and services through our Petroleum Contractors insurance program We help find you insurance with real value and the most appropriate coverage possible For more information or a no obligation insurance review contact David Mason today BrokerLink ca 1 800 263 2157 email dmason brokerlink ca Services available in Ontario through Canada Brokerlink Ontario Inc BrokerLink Design is a trademark of Canada Brokerlink Inc used under license Copyright 2012 Canada Brokerlink Inc All rights reserved NOVEMBER 2016 CANADIAN PETROLEUM CONTRACTOR 13

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safety bulletin HIGH VISIBILITY SAFETY APPAREL POST requires workers wear high visibility apparel as part of their basic personal protective equipment Currently the POST guide and online orientation stipulate hi vis vest or shirt Front view High visibility safety apparel increases workers presence for drivers and vehicle operators The Canadian Standards Association Z96 15 lists three classes of high visibility apparel High visibility material fluorescent bright orange or fluorescent bright yellow CLASS 1 provides the lowest recognized coverage and good visibility CLASS 2 provides moderate body coverage and superior visibility CLASS 3 provides the greatest body coverage and visibility under poor light conditions and at great distance Retroreflective stripes bands silver or white or Retroreflective stripes bands fluorescent bright orange or fluorescent bright yellow POST considers Class 1 and 2 as acceptable coverage for the majority of work performed however it is important for the worker to determine the level of protection required based on the task being performed Navy blue FRC coveralls with appropriate banding are acceptable Class 1 PPE Workers must also follow local requirements as they vary from province to province Check your local jurisdiction for requirements EXAMPLES OF CLASS 1 APPAREL ACCEPTABLE FOR POST POST accepts this style of reflective material on apparel see figure 1 Back view FIGURE 1 FIGURE 2 NOTE POST does not accept the basic harness type safety apparel as described in the code under Class 1 Apparel The example harness styles are only accepted when part of a garment see figure 2 EXAMPLES OF CLASS 2 APPAREL High visibility material fluorescent bright orange or fluorescent bright yellow Front view Back view Side view Front view Combined performance retroreflective stripes bands fluorescent bright orange or fluorescent bright yellow or retroreflective stripes bands silver or white Optional arm bands Retroreflective stripes bands silver or white or combined performance retroreflective stripes bands fluorescent bright orange or fluorescent bright yellow 14 CANADIAN PETROLEUM CONTRACTOR NOVEMBER 2016 High visibility material fluorescent bright orange or fluorescent bright yellow Back view VISIT THE POST WEBSITE FOR ADDITIONAL INFORMATION INCLUDING A POST PPE PROGRAM CHECKLIST DESIGNED TO ASSIST COMPANIES IN DESIGNING THEIR OWN PPE PROGRAM

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