TSX first to use XBRL reporting in Canada

TSX Group Inc. recently became the first Canadian public company, as well as the first publicly listed stock exchange globally, to publish its annual financial results in XBRL. PricewaterhouseCoopers assisted the TSX in the process.

“PricewaterhouseCoopers is an international XBRL champion active in more than 30 countries around the world,” said Suzanne Hubbard, PwC partner and Canadian XBRL practice leader. “Increasingly, XBRL is being employed by organizations around the world and TSX Group is the Canadian leader.”

XBRL (eXtensible Business Reporting Language), an electronic “tagging” format, helps anyone reading financial results efficiently and accurately analyze information coming from different sources. It simplifies the transfer of financial statements, performance reports, accounting records, and other financial information between different software programs. In addition, it reduces the time and costs of producing, communicating and accessing business information.

“Greater transparency in business reporting will lead to increased trust in the world’s capital markets,” said Kevin J. Dancey, PwC CEO and Canadian Senior Partner. “Simply, XBRL is about making data more useful and connecting businesses with their stakeholders. As an information format standard, XBRL gives companies a reliable, consistent tool for improved business reporting.”

“TSX Group is pleased that we are able to work with PwC to become the first in Canada to provide our financial results in XBRL format,” said Michael Ptasznik, CMA, TSX Group Chief Financial Officer. “Acceptance for XBRL is building and TSX Group will continue to be a leading adopter of this technology.”

“We now have a working tool that will allow companies to streamline how they prepare and disseminate financial data,” said David W. Smith, FCA, President and CEO of the Canadian Institute of Chartered Accountants (CICA). “XBRL will also enable the users of financial reports, such as analysts, regulators, creditors and investors to more quickly and accurately review, analyze and interpret the information.”

For more information visit www.pwcglobal.com.

VC dollars flowing again

Continued recovery of the public markets and increased investment activity in the third quarter of 2003 drove investors’ optimism, as 60% of Canadian Venture Capitalists (VCs) expect the overall economic climate to improve over the next six months. This is the highest level of confidence expressed by Canadian VCs over the past two years and is drawn from the eighth Canadian Venture Capital Confidence Survey, released recently by Deloitte and the Canadian Venture Capital Association (CVCA). The quarterly survey provides a comprehensive snapshot of venture capital investors’ outlook in Canada for the next six months and acts as an indicator of changing confidence levels and expectations of economic and market climate; deal activity; and investment focus.

Canadian venture capital investment soared by 52% in the third quarter compared to Q2 levels, unlike their counterparts in the U.S., which saw an 8% decline in dollars invested in Q3 compared to Q2. The findings reaffirm Deloitte’s previous survey results, in which participants indicated there was very little room remaining on the downside and that the Canadian market was on its way to recovery. Additionally, and for the first time in two years, there are early signs that the window of opportunity for IPOs as an exit option is re-opening. Nine per cent of respondents expect to exit investments through an equal number of M&A and IPOs compared to only 1% in the previous quarter.

“The survey findings and other market indicators provide very encouraging signs that the Canadian venture capital industry is getting back on track,” said Michael Badham, a partner at Deloitte. “The increased optimism among investors is closely reflected by the growth in capital available for investments, following impressive fundraising rounds this quarter of nearly one billion dollars as well as the increased flow of capital from abroad. The current market conditions have created an opportune time for entrepreneur companies to raise private capital and fuels intense competition among Canadian VCs vying for quality investment.”

With an increase in capital raising, competition for new investment opportunities remains high as the number of respondents allocating more than half of their funds for new investments rose to 38% in the third quarter of 2003, compared to 23% in Q2. As a further consequence of increased capital chasing scarce investment opportunies, the expected time horizon for investing current funds has also increased over the past quarter with less than half (45%) of respondents expected to invest current funds within the next two years (a decrease from 68% in Q2).

“I am cautiously optimistic,” said Dr. Robin Louis, President of the Canadian Venture Capital Association. “The up tick in investment activity in Q3 is in the right direction but the absolute level is still not large. However, a more positive sentiment in the industry is being driven by an improvement in the underlying fundamentals for portfolio companies in many technology markets and this is leading to more deal activity, although the flow of investment opportunities is still not at the level that we would like to see.”

For more information visit www.deloitte.com.

Small business owners show retirement savvy

Canadian small business owners are financially better prepared for retirement than employees, according to a recent CIBC report entitled Canadian Entrepreneurs and Retirement.

“The average annual RRSP contribution made by a small business owner is more than ,000 - and that’s about 50% more than employees who don’t have a pension plan,” said Rob Paterson, senior vice-president, CIBC Small Business Banking. “It just goes to show you that entrepreneurs are self-reliant in more ways than one.”

The report also found that 70% of entrepreneurs own RRSPs, compared to 55% of paid employees. Considering that the average self-employed person earns 10-15% less than paid employees, this increased contribution is even more significant.

“Almost 60% of Canadian small business owners are between the ages of 35 and 55. With retirement approaching, it is reassuring to see that they are taking their financial plans very seriously,” said Paterson. “For micro-businesses, retirement planning is even more crucial because the average age of a micro-business owner is 46.”

In 2002, 40% of small business owners contributed to an RRSP. However, almost 15% of small business owners aged 45 to 64 are not prepared for retirement. These are entrepreneurs who earn less than $30,000 per year and have little equity in their business.

“For entrepreneurs, retirement planning includes considering a number of factors ranging from business equity to RRSPs,” added Paterson. “All small business owners need to look past their business cash flow and ask themselves whether they’ve saved enough for a worry-free retirement.”

Other interesting findings regarding Canadian entrepreneurs and retirement include:

• Only 17% of small business owners with less than $5 million in sales see business equity as an important source of retirement income.
• One in three new immigrants (those who have been in Canada for less than five years) who are entrepreneurs did not have any plans to finance their retirement.
• More than 40% of small business owners aged 18 to 34 plan to rely on RRSPs to finance their retirement. This is almost 10 percentage points more than entrepreneurs aged 50 to 64.
• More than 35% of women entrepreneurs plan to use RRSPs as part of their retirement income, compared to 27% of men.

Canadian Entrepreneurs and Retirementis available on the CIBC Web site at www.cibc.com/ca/features/rrsp-sb/index.html.

Asia a new hotspot for Canadian business

Canadian business is showing a renewed surge of enthusiasm for Asian investment, especially over the next 12 months, according to the annual Asian Investment Intentions Survey carried out by the Asia Pacific Foundation of Canada. The study found that 61% of companies responding to the latest survey expected to boost their Asian holdings substantially or moderately in the coming year. This is the highest level of growth in the survey’s five-year history. Last year, the comparable figure was 49% and the highest previously recorded was 59% at the start of 2000, as Asia was in the midst of its recovery from the financial crisis of 1997-98.

“The results of the survey are gratifying as the Foundation has long urged Canadian business and government to devote more attention to the vibrant markets in Asia Pacific — markets that are growing faster than the United States where most of our attention is focused,” says Dr. John Wiebe, president and CEO of APF Canada. “Asian economies have recovered strongly and we encourage Canadian companies to take a second look at the many opportunities.”

The survey results of intentions are in line with recent figures on Canadian direct investment in the region. In 2002 (the most recent Statistics Canada figures available), the total stock of Canadian investment in Asia rose 32% to $34.6 billion. The APF Canada survey suggests the flow of new Canadian capital into Asia is unlikely to slacken in the near future. Of the firms completing the survey, 76% said they expected their investment in the region to increase substantially or moderately over the next five years.  The results of the survey are considered especially reliable as all the companies participating already have a physical presence — factories or sales offices — in at least one Asian country and are well informed on economic prospects in the region.

The favoured destination for companies remains China, the likely target of 17% of potential investment, followed closely by Southeast Asia. This is similar to previous survey results. As in past surveys, the main motive for increased investment is to take advantage of expected growth in the targeted Asian economies. The next most important reason cited for likely investment is to provide expanded support to existing customers.

The APF Canada investment intentions survey, covering 69 respondent companies that already have a physical presence in Asia Pacific, was carried out between mid-December and mid-January.  The comparison is with a similar survey of 117 respondents a year earlier.

For more information visit www.asiapacific.ca.

Convenience and service a top concern for bank clients

A recent Maritz survey has found that interest rates, fee structures and a variety of financial services and products rank far behind convenience and customer service when consumers are choosing a primary bank. In the poll of 1,000 Canadians, the number of respondents citing convenience rose 6% compared to the same poll conducted last year.

A full 43% of those surveyed said “it wouldn’t take a lot” for them to move their money out of their primary bank if another bank made them feel like a valued customer.

“After a period of emphasis on investment banking, the pendulum has swung back to branches,” said Bob Macdonald, president and CEO of Maritz Canada, a performance improvement company. “Customer loyalty in 2004 is all about the two Cs — convenience and customer service.”

Despite the fact that two out of five customers would change banks at the drop of a hat for better service, banks are improving their customer service delivery. For instance, 70% of those surveyed agreed that employees at their primary bank tried hard to understand their needs before recommending or selling them something.

Another interesting finding is that eight out of 10 Canadians agree that it would be easier to have most or all of their accounts in one bank. Macdonald sees this as a golden opportunity.

“Banks are spending millions on advertising their brand externally, but they are not investing in internal branding,” he says. “By implementing internal communication, training and incentive programs aligned with their brand, banks can ensure that the service experience enjoyed by their customers in-branch, online or on the phone matches what is promised.”

For more information visit www.maritzcanada.com.

High tech

Security over IP

Panasonic Canada recently introduced a full line of surveillance cameras and software that make the traditional closed-circuit television (CCTV) obsolete. These new products allow the user to use their existing IP networks or the Internet to view security installations from any location.

The company’s new WV-AS710 Network Server software gives the user the ability to program an entire security network for digital transmission. The server software delivers full-motion images via an IP network. The software stores the images at the server, allowing the user to shift from the traditional means of distributing television images to IP networks, creating greater reliability and lower costs. Using an IP network, the user can view and adjust the security cameras on a standard Web browser. The software supports high-quality, high frame rate JPEGs and is compatible with MPEG-4 image compression cameras. Four cameras can be viewed at the same time by the user on any traditional Web browser.

For more information visit www.panasonic.ca.

New Software

• Oracle Database 10g
• Microsoft Business Portal 2.0

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