Author Archive

Webinar Recording: Ensuring the Future of Your Family Farm

Thursday, August 24th, 2023

Are you a farm owner seeking to ensure the enduring success of your family farm? Are you grappling with the task of transitioning the farm to the next generation, even in the face of diverse career aspirations among your children? We hold the solutions you’ve been in search of.

We are excited to carry forward our webinar series, ” The Family Farm: What Is Your 100-Year Plan?” with our second installment, titled “Ensuring the Future of Your Family Farm.” In this session, we present a case study featuring a real family client currently implementing a distinctive approach for transferring their farm. This time, our panel of experts is joined by John Tempest, CPA, CA, who will illuminate the inspiring narrative of this family’s journey.

In this webinar you will learn:

  • The unique strategy employed by the farm owner for transferring the business to the next generation.
  • Insights into the family dynamics and considerations involved in the decision-making process.
  • Exploring the opportunities and challenges presented by this specific family scenario.
  • Addressing generational issues and fostering continuity in the family farm.
  • Financial considerations and tax implications shared by our esteemed CPA.

Please sign up for our mailing list below to gain access to the webinar.

 

Webinar Participants

Rob Wallis
Partner and Senior Advisor, VELA Wealth
Rob brings over 15 years of financial planning and advice-giving expertise to the VELA team and has a proven track record of delivering high calibre solutions to clients. Rob excels at working with entrepreneurial professionals and business owners define their ecosystems, establish and exceed their life and financial goals.
Michael Baker
Licensed Life Insurance Broker, Baker Wealth
Michael Baker founded Baker Wealth to build meaningful success for people. A challenge-driven CPA, he wanted to help his clients forge a tighter connection between financial prosperity and a fulfilling life. Michael is your expert advisor and ally, with 25+ rich and illuminating years of experience as a professional. Talk to Michael about planning your future, starting a new business or welcoming a new family member. He’s an active listener; he not only hears your words, but he understands them – the key to solid financial results.
Shane Donner
Partner, Smith & Hersey Agribusiness Law LLP
Shane has been working as a Solicitor at Smith & Hersey Agribusiness Law for over 8 years. Shane’s practice is primarily focused on business transition planning (specifically agricultural operations), corporate finance, commercial/agricultural real estate, and negotiating renewable energy leases for wind and solar projects on behalf of landowners.
Shauna Trainor
Principal, A&O Partners LLP
Shauna works with enterprising families across North America to navigate the complexities of ownership, wealth, and family dynamics. Shauna engages in a planning process with family enterprises to help them identify, clarify, and articulate their ownership vision and strategy. In collaborating with families, Shauna helps them to establish relevant governance, enhance communication and engage in shared decision making. Shauna leverages her business and psychology background to help families and individual members achieve their desired objectives.
John Tempest
Principal, EBT Chartered Professional Accountants
John attended the University in Lethbridge where he received his Bachelor of Management with Distinction, majoring in Accounting. From there, he moved to Medicine Hat and achieved his Chartered Accountant designation in 2013. John is a highly skilled professional in the field of taxation, holding an In-Depth Tax Certificate earned in 2021. John’s areas of focus include owner managed businesses with a focus on agriculture and professionals, as well as corporate and estate tax planning. He strives to provide his clients with a high level of customer service and great tax planning opportunities.

A Candid Conversation with Amar Doman, the President & CEO of The Futura Corporation

Friday, August 4th, 2023

The interview is hosted by Jason Boudreau and published in Iconic Concierge, Summer 2023

 

Welcome to the summer edition of Creating Impact, it’s great to be back and I hope this finds you and yours doing well and excited for the season we wait all year for! In preparation for this edition, I had the pleasure of spending some time in conversation with visionary entrepreneur and philanthropist, Amar Doman, President & CEO of The Futura Corporation.  I first met Amar a couple of years ago on the football field, as our boys are teammates on a spring flag team. Through our conversations over time, I’ve learned more and more about his journey, and I am grateful he was willing to take time from his packed schedule to share his story for this edition. I am excited to share this candid conversation about Amar’s journey and the transformative impact he has in both business and the community.

The Doman family’s journey can be traced back to the early 1900s when his grandparents embarked on a voyage from India to the UK. However, destiny had a different plan for them, and they eventually found themselves in Canada, first landing in New Westminster and finally settling on Vancouver Island. Amar’s grandfather, Doman Singh, worked as a logger, enduring the challenges of manual labour to provide for his family. Despite the hardships, they persevered, and the family grew, with Amar’s father and uncles shouldering the responsibility of supporting their loved ones.

Education was a luxury, and Amar’s father became the first member of the family to graduate high school. He joined the family business, which began as a humble trucking venture collecting wood scraps for firewood. As the business expanded, the three brothers invested their hard-earned money to acquire a sawmill, steadily building an enterprise that would thrive for years to come. The Doman family became an integral part of the forestry industry on Vancouver Island, contributing to its growth and development.

Amar, the youngest of two siblings, was born in Victoria, where his father had established a division of the lumber business. Growing up surrounded by the lumber mills and the family enterprise, Amar was introduced to the industry at a young age. Under his father’s guidance, he gained firsthand knowledge of the operations, working on machinery, stacking studs, and loading trucks. “We just hopped in the truck with Dad and off we went. It was awesome. I miss those days, and I certainly wouldn’t trade that sort of education for anything”.

Following his graduation from high school, Amar made a pivotal decision that would ultimately shape his destiny. Instead of pursuing post-secondary education, he chose to channel his entrepreneurial spirit, and at the age of 18, armed with a burning ambition, a clear vision, and a $10,000 loan from his mother, Amar started his own lumber remanufacturing company in Victoria.

With three employees by his side, Amar embarked on his entrepreneurial journey. He recalls the early days, juggling responsibilities, answering phone calls while working on the production line. The challenges were abundant, and so were the rewards. As the sole owner of his company, Amar experienced the thrill and satisfaction of owning a thriving small business at a young age. “I’ve always had that sort of independent streak in me that I just wanted to do it on my own.”  It was a testament to his resilience and determination.

1990 became a pivotal year for Amar. Presented with an opportunity to acquire a struggling forestry company in Vancouver, he took the plunge and moved to the bustling city overnight. With focus and relentless effort, Amar turned the company around and soon expanded his business portfolio by purchasing a competing firm. Despite skeptics who doubted his ability to take on such challenges at a young age, Amar’s unyielding commitment and the values instilled in him by his father paved the way for success.

As the late 90s and early 2000s unfolded, Amar faced new milestones and opportunities. He acquired CanWel Building Materials, which was struggling at the time and presented significant challenges. However, with his trademark determination and the support of banking partners who believed in his vision, Amar successfully turned the company around and eventually took it public in 2004. This marked a turning point for him and his team, providing tangible equity ownership for employees and expanding the company’s horizons.

The significance of the “Futura” name, holds a special place in Amar’s heart. Inspired by his father’s small development company, Futura Developments, Amar adopted the name for his own company, The Futura Corporation. The sentimental value and connection to his father make it a cherished part of his entrepreneurial journey. The enterprise now spans North America, with over 4,000 employees and revenues that cleared $3 billion in 2022.

Amar’s family life started to evolve in his 30s when he met his now wife, Natallie. They married and had three children, which Amar considers true wealth. “It was the first time I felt fully wealthy,” shared Amar,” being wealthy in a bank account is one thing, but when you’ve got healthy children and a strong marriage – that’s all you can ask for”.

A strong family and its values play a crucial role in Amar’s life and vision for the future. He believes that parents should assist their children in navigating their starting point and determining their own path. Amar encourages his children to choose a vocation or profession they are passionate about and to start gaining practical experience early on. “One of my children is already working at a young age. And he’s doing well, and he seeks to work, which is great”. Through instilling strong values and work ethic in his children, Amar ensures that they are equipped to make their own mark in life while appreciating the family’s achievements and aspirations.

One of Amar’s proudest moments in his life was his introduction to the BC Lions football team after he acquired the team in 2021, from the late David Braley’s estate. “I was standing there and that was one of those moments I’ll never forget. They’d stopped the whole practice. It was one of those few moments in life that’s just etched in your mind”.

For Amar, owning the BC Lions is not just about growing the fan base or personal achievement, it is an opportunity to re-engage the entire football community. He believes in the power of sports, particularly football, in helping kids develop valuable skills and fostering their personal growth. Amar’s vision for the BC Lions extends beyond the boundaries of Vancouver. He is determined to make the BC Lions more than just a football team—it is a symbol of provincial pride, shared values, and the power of sports to bring people together.

Amar’s commitment to inclusivity and community involvement is evident in his efforts to make the BC Lions more accessible. He has worked closely with TSN and the CFL to schedule games at more convenient times, allowing fans from Vancouver Island and other regions to attend without the burden of expensive hotel stays or late-night travel.

Actively involved with his own children’s football teams, including coaching, Amar encourages young individuals to embrace empathy, kindness, and integrity as they navigate their journey through life. Through instilling these values at a young age, Amar believes that they can cultivate a future generation of compassionate and impactful citizens who strive to make a positive difference in the world.

Amar urges young minds to be independent thinkers and to stand up against peer pressure, even when it’s challenging. He emphasizes to his own kids, the importance of recognizing that not everyone is fortunate enough to have what they have. “If there’s a new kids in your class, reach out, put your hand out, welcome them. That’s the type of citizens I want our kids to be – to help others and just be that good person”.

With a big heart for the community, Amar and Natallie have been meaningfully contributing to causes such as the CKNW Kids’ fund and Heart and Stroke Foundation for many years. In the context of philanthropy, Amar shared that he believes the term “giving back” is often overused, and instead, he sees it simply as just giving, without expecting anything in return. Amar believes that when one has achieved a certain level of success, it is important to share that success with others. “There are so many different things we’ve been doing for years and to me it’s just an automatic thing to do. When you’ve done okay, and you can share, share”. Without anticipating any reciprocation, Amar finds fulfillment in witnessing the happiness of a child or the positive impact of a life-saving operation. For him, these acts of giving are intrinsic to his purpose, as he questions the true meaning and purpose behind all his accomplishments.

Looking ahead, Amar expresses his intention to continue building and pushing boundaries. Retirement is not on the horizon for Amar, and he plans to stay actively engaged in the business he loves. I’ll eagerly anticipate the future chapters in Amar’s story, knowing that his entrepreneurial endeavours and his passion for the BC Lions will continually intertwine and evolve, creating a legacy that leaves a lasting impression both in our beautiful province and well beyond.

Webinar Invitation: Ensuring the Future of Your Family Farm

Friday, July 7th, 2023

Are you a farm owner looking to ensure the long-lasting success of your family farm? Are you facing the challenge of transferring the farm to the next generation, even when some of your children may have different career aspirations? We have the answers you’ve been seeking.

We are thrilled to continue our webinar series, “The Family Farm: What Is Your 100-Year Plan?” with the second session, “Ensuring the Future of Your Family Farm.” This session features a case study of a real family client who is currently implementing a unique strategy for transferring their farm. This time, our team of experts is joined by John Tempest, CPA, CA, who will share the inspiring story of this family’s journey.

The webinar “Ensuring the Future of Your Family Farm” will be held on August 23rd at 10 am PDT.

Join us as we cover the following key topics:

  • The unique strategy employed by the farm owner for transferring the business to the next generation.
  • Insights into the family dynamics and considerations involved in the decision-making process.
  • Exploring the opportunities and challenges presented by this specific family scenario.
  • Addressing generational issues and fostering continuity in the family farm.
  • Financial considerations and tax implications shared by our esteemed CPA.

Don’t miss out on this valuable webinar that combines real-life experiences with expert insights to provide a holistic understanding of family farm transfers. Rest assured, even if you are unable to attend the live session, a recording will be made available to you.

 

 

Webinar Participants

Rob Wallis
Partner and Senior Advisor, VELA Wealth
Rob brings over 15 years of financial planning and advice-giving expertise to the VELA team and has a proven track record of delivering high calibre solutions to clients. Rob excels at working with entrepreneurial professionals and business owners define their ecosystems, establish and exceed their life and financial goals.
Michael Baker
Licensed Life Insurance Broker, Baker Wealth
Michael Baker founded Baker Wealth to build meaningful success for people. A challenge-driven CPA, he wanted to help his clients forge a tighter connection between financial prosperity and a fulfilling life. Michael is your expert advisor and ally, with 25+ rich and illuminating years of experience as a professional. Talk to Michael about planning your future, starting a new business or welcoming a new family member. He’s an active listener; he not only hears your words, but he understands them – the key to solid financial results.
Shane Donner
Partner, Smith & Hersey Agribusiness Law LLP
Shane has been working as a Solicitor at Smith & Hersey Agribusiness Law for over 8 years. Shane’s practice is primarily focused on business transition planning (specifically agricultural operations), corporate finance, commercial/agricultural real estate, and negotiating renewable energy leases for wind and solar projects on behalf of landowners.
Shauna Trainor
Principal, A&O Partners LLP
Shauna works with enterprising families across North America to navigate the complexities of ownership, wealth, and family dynamics. Shauna engages in a planning process with family enterprises to help them identify, clarify, and articulate their ownership vision and strategy. In collaborating with families, Shauna helps them to establish relevant governance, enhance communication and engage in shared decision making. Shauna leverages her business and psychology background to help families and individual members achieve their desired objectives.
John Tempest
Principal, EBT Chartered Professional Accountants
John attended the University in Lethbridge where he received his Bachelor of Management with Distinction, majoring in Accounting. From there, he moved to Medicine Hat and achieved his Chartered Accountant designation in 2013. John is a highly skilled professional in the field of taxation, holding an In-Depth Tax Certificate earned in 2021. John’s areas of focus include owner managed businesses with a focus on agriculture and professionals, as well as corporate and estate tax planning. He strives to provide his clients with a high level of customer service and great tax planning opportunities. 

 

Can’t make the date? Register anyway! A recording will be sent to all registrants after the event.

The Polestar Podcast: Amar Doman – A Journey of Entrepreneurship, Legacy, and Community Impact

Wednesday, June 28th, 2023

We are thrilled to announce the release of the latest episode of the Polestar podcast by VELA Wealth, featuring an engaging conversation with Amar Doman, the President and CEO of the Futura Corporation. In this episode, Amar takes us on a remarkable journey through his life as a leader in business, his experiences in philanthropy, and his passion for community involvement.

Hosted by Jason Boudreau, this podcast episode delves deep into Amar Doman’s extraordinary entrepreneurial journey, starting from his grandparents’ arrival in Canada to his current role as the CEO of the Futura Corporation and the ownership of BC Lions. Amar shares stories of his family’s perseverance and hard work in the lumber business, the challenges he faced, and the valuable lessons he learned along the way. He discusses his approach to turning around struggling businesses, his involvement in both public and private ventures, and his insights into building and sustaining successful enterprises.

 

 

About the Guest – Amar Doman

Amar is the founder and sole shareholder of The Futura Corporation. Along with his team he has led and completed numerous acquisitions. Amar’s tireless dedication to creating shareholder value and his vision for long-term thinking when investing or buying companies outright has built The Futura Corporation into one of the largest and fastest growing companies in Canada. To read more, please visit the Futura Corporation website.

About the Host – Jason Boudreau

Jason has built VELA Wealth into an established life and estate planning firm, guiding families as they make meaningful choices at the intersection of life and wealth. Jason’s areas of expertise include intergenerational wealth transfer and estate planning with a focus on advanced insurance-based solutions that incorporate philanthropy and legacy planning. Leveraging these specialties, Jason brings a fresh perspective and outside-the-box thinking to the strategic planning process. To read more, please visit the VELA team page.

 

The episode is also available on:

  

  

 

 

Read the transcript of the Polestar Podcast here.

Transcript of The Polestar Podcast: Amar Doman – A Journey of Entrepreneurship, Legacy, and Community Impact

Wednesday, June 28th, 2023

Listen to the Polestar Podcast here.

Podcast Transcript

 

Jason Boudreau:

Welcome back, everybody to the Polestar podcast by Vela Wealth. Today, I’m thrilled to have Amar Dolman joining me for a candid conversation. Amar is the founder and CEO of the Futura Corporation, located here in Vancouver, and I’ve got to know Amar a little bit over the last couple of years through the football community. Amar, I am grateful for you being here today, thank you so much for taking the time.

 

Amar Doman:

Hey, thanks for having me here.

 

Jason Boudreau:

Looking forward to getting into it. So, when we were leading up to this dialogue, I was sharing with you about what I thought would be a neat way to get to know you as a leader in business, life, and philanthropy, is to understand your back story and really get to know where you came from. If we could start the conversation from your grandparent’s story and their arrival to Canada, I’d love to hear that point on out all the way up to today, the story of Amar Doman, if that works for you.

 

Amar Doman:

Sure, let’s reach way back, I like it. So, back in 1906, my grandparents on my father’s side boarded a boat in India. They thought they were headed to the UK, ended up in New West and eventually on Vancouver Island, where my grandfather found work as a logger in manual labor. They proceeded to have five children, including my dad, my two uncles, my two aunts on Vancouver Island in the late 20s, early 30s. My grandfather continued to work till he passed away at a young age. My dad was only nine. He [grandfather] had kidney failure and back then there wasn’t a lot of good medical treatment for that kind of stuff.

My grandfather’s name was Doman Sing. He came up short and my uncle Herb quit school in Grade 7 to look after the family and put food on the table. So, quite a humble beginning there but that’s how things got started as far as my grandparents coming over. Then my dad and my uncles had to work to provide and my other uncle, he went to Grade 9 and that was it. He went right to work. The mid, my dad, the youngest brother, graduated from College Heights in Duncan, BC.

 

Jason Boudreau:

So, your dad was the only one then out of your uncles to graduate high school, correct?

 

Amar Doman:

Correct.

 

Jason Boudreau:

I guess maybe your grandpa as well. So, the first graduate of the family period.

 

Amar Doman:

I would say that would be the case.

 

Jason Boudreau:

So, he graduates from high school. What year was that?

 

Amar Doman:

That would have been somewhere around 1953-1954.

 

Jason Boudreau:

So, he graduates high school and then what? Does he join the family business?

 

Amar Doman:

Basically, he started to drive a truck as they all were. They were driving without driver’s licenses back in the day. They were picking up scraps of wood and selling them for firewood just to get cash to buy groceries for grandma. That is how it all got going.

 

Jason Boudreau:

So, he graduates high school, he’s driving a truck, they’re picking up wood scraps, and eventually transitions into sort of the lumber business mills, things like that. Tell me how that evolves?

 

Amar Doman:

They started by buying the trucks and then starting a trucking business for some of the local sawmills in the area. Then, the three brothers kept building and eventually bought a sawmill, saved all the money that they could, and one thing led to another. They had trucking going and then the sawmill generating money and they just kept working hard, reinvesting and built up to quite an enterprise over the years. There’s a bunch of children who came afterward out of the five siblings, of course.  I was the youngest sibling out of the whole five born in Victoria. My dad had moved down to Victoria to run one of the divisions there. So, I grew up on the island in Victoria, then I moved to Vancouver, back in 89.

 

Jason Boudreau:

When the business was growing on the Island with your dad and your uncles, was it primarily on the Island or was it all over BC as well?

 

Amar Doman:

Primarily on the Island with a couple of sawmills on the mainland, but the Iisland was pretty significant for the family.

 

Jason Boudreau:

Yeah, I bet, and it was a real hub for forestry back then too.

 

Amar Doman:

Yes, it was.

 

Jason Boudreau:

I could see that. I don’t know a ton about the history of that, but I just sort of feel like it would be that way. So, they’re building the business and then tell me the story about how your parents met and when that happened.

 

Amar Doman:

My mum was born in India. My dad went back on a trip, and they were all saying “No, he’s not going to get married back there”. My mom was arranged to be married to someone and my dad caught her eye. Then they went to go meet the family, and her family met his family and said “Hey, you know, maybe we should do this”, which is a little bit out of bounds over there when someone’s kind of prescribed to some you don’t really do those things. Anyways he’s a guy that kind of likes to go after what he wanted, and he came back six months later. He was writing letters to her, and  and we’ve seen the letters where he said he is going to get married back there. So, he came home with my mom, who’d never been to Canada before. At 19 she went to English school. She actually had four bad miscarriages before my brother and I came, which was quite sad. All boys, crazy. My mom had six boys in a row. And my brother and I were the only guys that survived. The last two. I am glad they kept trying. All I’ve got to say.

 

Jason Boudreau:

No doubt. Hey. So, you have an older brother. What’s his name?

 

Amar Doman:

His name is Rob.

 

Jason Boudreau:

What’s the age gap between the two of you?

 

Amar Doman:

18 months.  He’s definitely smarter than me. He’s got all the Degrees and everything like that. I was Grade 12 and went right into business. The school didn’t want any more of me and I didn’t want any more school.

 

Jason Boudreau:

Why don’t we go on that thread? I remember asking you last year about how you got going and you said “Right out of high school”. So, obviously, you and Rob grow up on the Island together in Victoria with your parents. I would assume a normal Canadian kid growing up, although you probably were spending time in the mills and getting to know the business.

 

Amar Doman:

I think you could say that.  That started when we were very, very young. My dad would take me and my brother to the mills around lumber since we were just tiny guys of six or eight years old. I look back now and wonder how we didn’t get killed or run over. We’re just let loose. Today you wouldn’t let anyone wander around these places, but he didn’t know where we were. We’d be climbing on lumber piles that are 50 feet high and when I look now at it – I wouldn’t let my kids go near that stuff. It’s crazy.

 

Jason Boudreau:

Neither would WCB, right?

 

Amar Doman:

Totally! All that stuff was absorbing. It was just sort of taking us around and, of course, osmosis you pick it up and if you like it, which my brother and I both did. Then we got to eventually start to work on the machinery and start to pile studs or load trucks. We did all those jobs all the way through every summer, every Christmas, Saturdays, dad would take us down there and we just go do it. It wasn’t sort of “Hi,  you’re coming to work”. You just kind of hopped in the truck with Dad and off you went. And it was awesome. I missed those days and I certainly wouldn’t trade that sort of education for anything.

 

Jason Boudreau:

No doubt! Obviously, then that led to you deciding at the end of high school to just get out and do this on your own. So, let’s talk about from that point on what happened when you decided to really start with, what is now the business.

 

Amar Doman:

So, probably around Grade 11, I started to map out what I am going to do. My mother thought that I was just going to pile studs my whole life and I wasn’t going to get too far. I’d be happy doing that some days right now, but I had my sort of business plan mapped out where I wanted to start a small lumber remanufacturing company because I had done a lot of the jobs and I thought to add some value. I didn’t want anything from the family. I wanted to do it on my own. And I’ve always had that sort of independent streak in me that I just wanted to do it on my own. So, certainly, my dad wouldn’t lend me any money, he was too tough. So, my mom lent me about 30 grand coming out of the high school Grade 12 in 1988 and I had formed a small company with three guys in Victoria. We manufactured lumber and when the phone rang I’d run off the green chain and go answer the phone and take an order and come back. It was awesome. Owning a small business a day after high school, I could not have been a happier guy.

 

Jason Boudreau:

That’s awesome. So that’s 1988, how many partners did you have in that business?

Amar Doman:

Well, there were three employees, and I was the sole owner.

 

Jason Boudreau:

And I know you’re the sole owner today, so does it always remain that way? You’ve been the sole owner through all your businesses?

 

Amar Doman:

Yes, with the Futura Corporation. We’ve taken some stuff public and we have ownership and public stakes, but I’m the sole shareholder in Futura.

 

Jason Boudreau:

Got it. So, in 1988 you started building up the business, let’s talk a little bit about the evolution of it. What did the first 10 years look like, from the late 80s into the late 90s?

 

Amar Doman:

Back around 1988, about one year later, an opportunity came up in Vancouver. A company that needed to sell in forestry that my dad had heard about and he said that maybe I should have a look at. So I took a look at it. I ended up buying it and moved to the big city of Surrey, business overnight. I stayed on my brother’s couch, he was going to UBC over there. So, I was his roommate, literally overnight. He was having more fun than me partying at the pub and doing other stuff while I was trying to figure out how to detangle a broken business. But that was the time of my life when I moved to Vancouver from the Island. It’s a big deal, move over to the big town, the big show and all that, and for me, I thought that this is where it would stop. However, I’ve turned that business around and started to grow it. Bought another one out of bankruptcy about two years later in Surrey as well that was competing with us. So, we gave it a tough time and it was fun watching that happen, then owned that competitor. A lot of people thought they were going to count me out in the industry saying I am taking on too much, that I am too young. Anyway, we haven’t looked back. I think that the work ethic that we commented on earlier, learning that from dad, it’s just instilled in me to this day.

 

Jason Boudreau:

I hear you there. That’s something I talk to my kids about all the time. Always be the hardest worker in the room and that’ll get you far.

So, late 90s. Now you’re got this business going. I want to learn a little bit more about this turnaround approach that you’ve got with these businesses. What were you seeing when you were coming into these companies? Why did they end up in the situation they were in? And then how did you feel you were able to turn it around and take it to the next level?

 

Amar Doman:

I think one of the things I’ve learned is that when you look at something that’s broken, try to analyze why it was broken. Don’t make those same mistakes and look at it as a big opportunity to try and do something the other guys didn’t do and make it work. It also allows you to create value because if you could buy something that’s broken at a good value that you can fix – the upside potential is just gigantic. That’s something that we pride ourselves on – we try to buy plants that are running 20-30%, and we don’t care if they are bankrupt. We are going to come in with our sort of surgical way of doing things and hard work ethic, and figure out a way to make it work. We don’t think any other way. We just have to make it work.

 

Jason Boudreau:

Got it. So, late 90s and early 2000s, what’s happening with you then? I know you mentioned that you acquired some public assets or took some companies public. When did that start?

 

Amar Doman:

So, we bought a company called Canwell Distribution from Canfor and Weldood, two large sawmillers here in BC, and it was a national distribution business. So I bought that. That was a big bite for us. It took us across Canada, added about 400 million in sales and it was losing money. A lot of money. And for the first time in my life, I had a bit of a panic at 29. It was 1999, I was thinking that I took too much and I wasn’t sure how I could plug all the leaks in this thing like I thought I could. I went out to sit down with the banks in Toronto, understanding what the “C” word is, which is a covenant, and I didn’t really understand all that stuff: big banking agreement that looks like 5 phone books … But I just came and sat with these guys and I said, “Look, I need about another six months. But I can see how this is going to get fixed, but think I’m in violation”. My CFO’s giving me all these notes saying there’s the pole pile of trouble here that I was out of bounds on. I just said look “I’ll fix it. Just give me a little more time”.  Those guys became very close with me. I was Wachovia Bank, which turned into Wells Fargo, and we’re still at that bank today. If those guys didn’t help me there, I’m not sure what would have happened, but turned it around and then eventually took that company public in 2004.

 

Jason Boudreau:

Is Wachovia Bank from the U.S. Aren’t they out of Washington?

 

Amar Doman:

They were, yes. They folded into Wells Fargo, probably through the financial crisis.

 

Jason Boudreau:

  1. So, the bankers have obviously played an important role. Even for future acquisitions, it seems they’ve become your partners in a way.

 

Amar Doman

For sure. It wasn’t a debt issue. For me, it’s always a cash flow issue.  We’re not going to take on too much debt and bet the farm and risk on things that we don’t understand and take big long shots. We just needed more time to get the thing operationally efficient. And we’re bleeding, bleeding, bleeding, but we were bleeding to get to a point where they’re going to be a healthy body. So, you have to bleed out for a while and get the thing right sized and fixed, and the customers, and all this different stuff. We were never at the risk of a bank foreclosing on us because we did something stupid.

 

Jason Boudreau:

So, 1999 you bought it and took it public in 2004. What does that five-year gap look like? What does it take to get a company ready to be put it on a public exchange?

 

Amar Doman:

It’s painful. Halfway through my dad was kind of laughing, while checking in he would say “You guys are nuts. Don’t do this public stuff and stay private”. A lot of people say why would you go public if you didn’t need to? Well, there are a few reasons. Number one, I wanted the team I was building to be able to have straight direct equity ownership, something that’s tangible for them. Also, a stock or report card – it’s nice to see as well as to raise equity. I could start to see that being public and where I want to grow the company would line up collectively very nicely and your profiles are different and there’s two different paths, they’re both great as long as you’re making money. But I think that the public was the right time for us and took some chips off the table back then, which was nice just to kind of monetize at a young age, and take some risk off after working 16 straight years out of high school. I thought that would be an important thing to do. So, we did a little bit of that and also kept some of the companies private, which still are today.

 

Jason Boudreau:

Got it. So now, we’re sort of in the early 2000s, mid-2000s and I know you’ve got Canwell and Doman is the other one, correct?

 

Amar Doman:

Yeah, Canwell morphed into Doman and Doman now is the parent one now in the Toronto Stock Exchange.

 

Jason Boudreau:

There’s one other company, correct?  Under the Futura?

 

Amar Doman:

Yes, we control Tree Island Steel which is public.

 

Jason Boudreau:

Got it. What got you into the steel business? How long has that been in the fold?

 

Amar Doman:

We’ve been distributing Tree Island nails and mesh for a long time. I was watching the company become undervalued on the Stock Exchange. So, we ended up buying a pretty big ownership stake in it when we thought the value was right. The Board of the company owned less than 1% of the company and I owned 20% of the company and they wouldn’t let me on the board, which frankly pissed me off. So, we called a proxy contest, the only one I’ve ever done, and we lost the proxy contest, but the next day they called and said “You won. But really you won, not us. Our guns are down. The board’s yours”. So anyway, we went through this process, which I didn’t want to go through, but we took control of the company and it’s been a great business for us. It’s got a huge plant in Richmond, 450 employees and a bunch of staff in California. It’s been a great business for us and we continue to drive good cash out of it and run the business.

 

Jason Boudreau:

Well, obviously nails and mesh are complementary to the main business, right? So, just thinking back to mid-2000s. When did family life start to evolve for you? When do you meet Nat? When does that all start?

 

Amar Doman:

It was in my early 30s. I met my future wife in Vancouver. I started thinking that I’m in my mid 30s, setting my ways, maybe not getting married kind of guy and I’m building the companies up and having some fun. Certainly, when you meet someone who changes your life it’s great. We ended up dating for about a year and then got married. Right after that, we had three beautiful children. So, then I felt fully wealthy. Because being wealthy in a bank account is one thing. But when you’ve got children and a decent marriage – that’s all you can ask for.

 

Jason Boudreau:

Yes, that’s true. That’s very true.

We talk a lot about legacy in our business and obviously, a lot of the work that we do is helping families plan for that legacy. And really, it’s all about what’s the next generation coming into and the number one thing that comes up is the value set and these conversations about it. It’s one thing to transfer financial capital, but how do you transfer that family capital, the history, the stories, the knowledge, the values, all that kind of stuff, and that’s something that we’ve talked a little bit about the other week as well. I can see from hearing your story how that evolved for you being at the sawmills and climbing around on the lumber and all that. I’m curious from your side, when you look at your kids how do you envision their involvement in things?

 

Amar Doman:

That’s the 1-million-dollar question: do they want to be involved and carry on? I think the level children were born into is not their fault. I think it is up to the parents to assist in the navigation of where they’re starting from. It’s a lot different than not where I started, but how I had to get started.

I just wanted to know if the children do want to be involved in business, I’ll show them the path which starts with a very, very much hard-working foundation. That means starting to work somewhere else, which one of my children is already working at a young age. And he’s doing well and he seeks to work, which is great.

If they want to be an artist or whatever vocation they choose, they better choose something because I don’t want my children figuring out what they’re going to do in life during their four years in university. That won’t happen in our family. It’s “Choose what you want to do or you’re going to work”. Once you figure out if you do want to go to university for something specific, of course, we’re going to help you with that tuition as well as you’re going to pay a part of it. I don’t expect their path to be anything like mine. It can’t be, but if they want to carry on some of these businesses that we continue to build up, I’d be more than happy to teach them.

 

Jason Boudreau:

The other day we were talking about inviting them in to learn about the business firsthand, whether it’s taking them on a business trip or inviting them to a meeting or something like that. I know that’s something I really look forward to. It is really great to hear that they are already getting their hands dirty and earning some coins.

Tell me about the background of the Futura name. When did the Futura start as a company and where did the name come from?

 

Amar Doman:

I got to give my dad some credit. He had a small development company in Victoria way back in the day,  called Futura Developments for the Future and he built some apartment buildings. He always had a lot of stuff going on and he had this company name which he used for a long time and went into some building materials as well. I always used to draw when I was in school, not paying attention to the blackboard, I’d be drawing “Futura” all over my everything and just I used to always draw Futura Corporation since Grade 8 and I’d be drawing and drawing it. So, I formed that company in 1999 when we had purchased Canwell and restructured everything under one. I still remain the sole shareholder of that business, but it was kind of a nod to my father. He really liked me using that name, and I just love the name and still do. It’s my private corporation, so you won’t see it on anything public. It’s just got a very good sentimental history to me and my brother as well for sure.

 

Jason Boudreau:

When you told your dad that you were setting up the Futura of Corporation, what was his reaction to that?

 

Amar Doman:

He was very happy about it and he always just liked it. I think it felt like he’s still there because he taught me absolutely everything. I owe everything to Dad and I wish he was still around, and his anniversary of passing was just Saturday four years ago.

 

Jason Boudreau:

Thank you for sharing.

I’m curious about if we look to today and really look ahead, what’s in store for you and for Futura? When you look at the landscape of today, everybody talks about how fast the world is changing and commodities are moving like crazy. Obviously, you have the influence of expanded media out there impacting share prices and things like that. How do you navigate that? What do you see for the business today? If we look forward to the next 10 years, what does Futura’s future look like?

 

Amar Doman:

A couple of things. I’ve been through a lot of different cycles now and I’ve got some gray hair. So you can look back and see what to watch for a little bit, but the drive and focus and energy have not changed as far as building. So, there’s been no slowing down and catching our breath. It is more like keep looking for opportunities, keep running the main business as well as learn and stay close to our customers, do everything we’ve done to get here and then continue to build on. So, we don’t look out as far as 10 years. We look out sometimes 2 to 3 years, but we want to continue to build through acquisition.

As a group now with the Futura we crossed roughly $3.5 billion in sales, and we have 4,000 employees. So, it’s big, but for us, if we buy a company now that’s got 30 employees, that’s fine. If it’s got 300, that’s fine. But it’s got to strategically fit into our master plan that I share with our Board of Directors that we have. The word “retirement” doesn’t really fit in for a guy like me. I like to work, and you’ll see me working for a long time. So, we’ll continue to build and see how far we can take this.

 

Jason Boudreau:

That’s very neat. We were talking the other day and you were mentioning about that even though you’ve got 4,000 employees, you stay really close to the ground floor. How do you do that and why do you feel that’s important?

 

Amar Doman:

That’s a great question, Jason. I just think it always resonates with me that I feel like I’m one of the guys out there. All the time. So, I can go talk to anybody on the floor, whether it’s a forklift driver, whether it’s a Ship or Receive or whatever it is to the top executive. I just like people and I like working, I like working people. I relate to them. That’s why I don’t really stand for a lot of people that have picket signs out there. I am just grateful to have a job. I don’t think you should fight your company. I think that good companies take care of good employees and things work out. I really believe that there should be respect on both sides and I respect every single person that works in our companies, no matter what position they have. I fully respect them and appreciate them being part of our team.

 

Jason Boudreau:

Respect, for sure. That’s a big one. I’m very much the same way. I find it hard to not stay connected to the people because that’s the pulse of the business. It’s like a giant brain trust in a way. You ask questions and you’ll hear things that you never even thought of.

 

Amar Doman:

Right. Absolutely right.

 

Jason Boudreau:

I would like to touch base on the philanthropy side. And I know you’ve been actively giving back to the community and I know it’s not a philanthropic project, but it’s certainly a community-based project as you now own the BC Lions. Tell me a little bit about how that got going for you? It’s obviously a passion project for you, and you and I met through the football community. Then we’ll tie that into the more giving and giving back side. Let’s call it “The new side of the Lions”, how did that end up in the Amar Doman’s world?

 

Amar Doman:

This’s something that was on my mind for a lot of years, and we used to hear it wouldn’t come up for sale as David Braley owned it for 25 years and these assets are very hard to come by. For me, being a part of the CFL and part of the National History of the CFL it’s like a dream come through. To really help kids use sports here in BC, and to re-engage the football community here, invest in it, and obviously selfishly we want to grow the fan base. But really, it’s something that I tried to buy for seven years back and forth with David, going to Hamilton to his little office back there in Ontario, and thought I’d have a deal and then came back and he couldn’t let it go. He’s so passionate about football.

Then, of course, when we got the deal done back in 2021 it was surreal… Signing the paperwork back East and then knowing this is going to be announced… There’re those few moments in life when your children are or born or you’re married – these things are just etched in your mind. You can define them so well, like they’re yesterday. When I went out to Surrey to practice, they had all the players put on their uniforms with their names on them that day, and they blew the whistle and they’re all coming in there. There I was, standing there and that was one of those minutes I’ll never forget. They’d stopped the whole practice. And here they come and here comes the new introduction of new speech and that was one of the proudest moments in my life.

 

Jason Boudreau:

Oh, that’s so great. Well, I know, the BC Lions themselves, the team, the football community, everybody’s benefited so much over the last couple of years since you took over the helm there. I certainly see myself still being involved in the football community. Obviously, as you know, football was a big part of my life for many years and I’m hoping my boys get into it and they love the flag league that they’re in here on the North Shore and hopefully soon we’ll get into tackling all that. I feel like they got to at least put the pads on at some point, cause their dad did.

 

Amar Doman:

Yes, our boys play together, which is great too, and it’s awesome.

 

Jason Boudreau:

It’s so much fun. It’s really fun. I feel like for a young boy going through adolescence and coming to man, there’s probably not a better sport out there that they could play in terms of skills and all that. Obviously, I’m biased, but I’d like to say that it helped me turn out in a successful way.

I know one of the approaches for you with the BC Lions, and I think these ties into really kind of the giving back piece and philanthropy, is that BC Lions aren’t the Vancouver Lions, they’re the BC Lions, right? This is the province’s team, right?

 

Amar Doman:

100%.

 

Jason Boudreau:

And I thought that was so great and obviously it’s in the name. But given that they play here and practice locally, sometimes it feels a little bit like Vancouver Lions. I know you’ve done a lot of outreach to the province, and I remember last year you guys were helping to fly-in, ferry-in or bus-in fans. Tell me more about that sort of outreach to the BC community and get them reconnected with the team.

 

Amar Doman

So, we’re doubling down on that and what I mean by that is we’ve adjusted and worked with the TSN to sort out times across Canada for airing the games and then also CFL to get a bunch of four o’clock games here. The reasons for those are: number one, we can have people from Vancouver Island come over on a ferry, get back and not have to spend an arm and a leg in a hotel. Number two, we can have younger fans come in and be able to bring their two or three-year-olds in the afternoon, watch a game from four and be done at seven. Let’s face it, it’s Canadian summer, guys want to hit their barbecues on a Saturday night.

And the CFL has to always struggle with that. So, we’re trying to pull it forward a bit in the afternoon, enjoy it and then people can go to their house parties, do whatever they want with dinner. Also, do you want to get on a sky train at 10:30 or 11:00 at night? I’m sure I wouldn’t want to these days. So, families can get home safely out to the valley. You can even come from the island. We’ve got buses set up as well. So, we’re really trying to engage the whole greater part of BC wherever we can. I think some of those earlier start times will assist with that, Jason. And we’re always open to ideas to try to do better.

 

Jason Boudreau:

I know this season’s obviously starting soon and you’re getting excited about that. How’s it looking in terms of the growth that you’ve seen with the fan base and all that over the last couple of years with you in charge?

 

Amar Doman:

Super solid. Look, we’re coming off some tough numbers, we all know that. But we believe we’re going to double our season ticket holder base this year already. We’re very, very excited about it. And just to get almost under 40,000 and for that last playoff game in Calgary last year. It’s amazing. Once that thing gets going and people like being around people and of course at football the noise matters – we will get a good consistent fan base into BC Place for our home games, there’s only nine home games.

I think we’ve got a pretty good opportunity, we’re helping subsidize some of the concessions and big street parties coming up again here. It’s going to be the place to be.

 

Jason Boudreau:

Right on! Given that grassroots community level, I’m curious about your view on philanthropy and how you approach that because obviously you get approached a lot on giving to different organizations. What do you think about philanthropy in your world?

 

Amar Doman:

I think the term “Giving back” is used a lot, maybe too much. I just think it’s just about giving. I think that I really felt this way for a long time. We’ve helped out different organizations, whether it’s heart, stroke, cancer or other causes. The one thing that we differ on is as far as myself and part of the community, I don’t think hospitals should have their hands out into private corporations. These are big public assets and they should be run by our tax dollars- we’re taxed enough. But certainly when it comes to scientific research, going over and above helping children find different ways to find solutions for various diseases, someone that needs financial medical care – we do a lot of private donations. We do them anonymously as well. We like to write these cheques. We like to help. We like to help the Orphans fund. There is whole bunch of different things we’ve been doing for years and to me it’s just an automatic thing to do. When you’ve done ok and you can share – Share. I think it always comes back in some way shape or form and I believe that by just seeing some child happy or someone that’s had a life-saving operation – that’s great. What are we doing all this for anyway?

 

Jason Boudreau:

Yes, that’s very true, I couldn’t say it better myself. Amar, just to close out our conversation, I would love to understand from your point of view the given piece. What would you say if you were having a conversation with your kids or some young group of kids about giving and trying to really instill in them at a young age what it means to give?

 

Amar Doman:

I think number one is always remember that not everyone has what you have and don’t assume they do. Always help others and try not to choose the bad path. If someone’s doing a bad thing, don’t copy them. Try to stand down and it’s hard with peer pressure, but really try to just be your own person and try to help others. If there’s a new kid in class, be the person that goes up to that new kid in class. Don’t be the person gossiping about the new kid in class. Reach out, put your hand out, welcome them. That’s the type of citizens I want our kids to be – to help others and just be that good person. And don’t be the person giggling in the background and making fun of others. That person gets nowhere.

 

Jason Boudreau:

That’s a true story. Well, let’s wrap it at that. We spent a good half an hour together this morning. Amar, really appreciate you taking the time. Always pleased to speak with you and really enjoying getting to know you at a deeper level today. Thanks again.

 

Amar Doman:

Thanks, Jason! I really appreciate you doing this. We’ll see you!

 

Jason Boudreau:

See you tonight.

The Polestar Podcast: The Family Farm—What is your 100-year Plan?

Monday, June 12th, 2023

Transferring a farm or agricultural business to the next generation is a multifaceted and emotional journey, much like any other business endeavor.

Farmers face the challenges of estate planning, optimizing taxes, and ensuring the long-term prosperity of their business. It is vital for business owners to have a clear understanding of their current standing and future goals. Equally important is their awareness of the farm’s purpose and objectives for both the present and future generations, fostering effective intergenerational communication. Moreover, there are essential considerations to bear in mind when passing down a farm or agricultural business.

In this podcast you will learn the importance of:

  • Acquiring a clear understanding of your business’s present situation and future objectives.
  • Comprehending the motives and aspirations of both the current and future generations.
  • Obtaining insights on essential factors to consider prior to and during the transfer of the farm business.
  • Developing effective communication tactics to navigate challenging conversations with family members.

 

About the Participants:

Michael Baker
Licensed Life Insurance Broker, Baker Wealth
Michael Baker founded Baker Wealth to build meaningful success for people. A challenge-driven CPA, he wanted to help his clients forge a tighter connection between financial prosperity and a fulfilling life. Michael is your expert advisor and ally, with 25+ rich and illuminating years of experience as a professional. Talk to Michael about planning your future, starting a new business or welcoming a new family member. He’s an active listener; he not only hears your words, but he understands them – the key to solid financial results.

Shane Donner
Partner, Smith & Hersey Agribusiness Law LLP
Shane has been working as a Solicitor at Smith & Hersey Agribusiness Law for over 8 years. Shane’s practice is primarily focused on business transition planning (specifically agricultural operations), corporate finance, commercial/agricultural real estate, and negotiating renewable energy leases for wind and solar projects on behalf of landowners.

Shauna Trainor
Principal, A&O Partners LLP
Shauna works with enterprising families across North America to navigate the complexities of ownership, wealth, and family dynamics. Shauna engages in a planning process with family enterprises to help them identify, clarify, and articulate their ownership vision and strategy. In collaborating with families, Shauna helps them to establish relevant governance, enhance communication and engage in shared decision making. Shauna leverages her business and psychology background to help families and individual members achieve their desired objectives.

Rob Wallis
Partner and Senior Advisor, VELA Wealth

Rob has provided senior financial planning and advice to VELA clients for over 15-years. He excels at working with entrepreneurial professionals and business owners to define their individual ecosystems and establish meaningful life and financial goals. He has specialized expertise in guiding healthcare professionals who are building multi-location, and specialist clinics. To learn more, please visit VELA team page.

 

The episode is also available on:

  

  

 

 

 

Disclaimer

The information provided in the podcast is designed for general informational purposes only and is not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

Webinar Invitation: Selling your Business and Navigating the Emotional Impact

Tuesday, June 6th, 2023

Selling a business is a major decision that entails not only significant business considerations but also profound emotional impacts. In Canada, a country known for its vibrant entrepreneurial spirit, the process of selling a business can be a complex and challenging endeavor.

We are thrilled to invite you to an engaging webinar on “Selling Your Business and Navigating the Emotional Impact” that will be held online on June 21st at 10:30 am PDT.

During this interactive session, we will delve into the profound emotional impacts that accompany the process of selling a business, as well as explore key strategies for managing the transition effectively. The webinar will feature an open discussion with a panel of seasoned professionals who bring practical experience and expertise to the table, alongside a client who will share their personal insights and lessons learned.

Key Topics to be Covered:

  • Understanding the emotional landscape of selling a business
  • Strategies for managing the emotional impact during the transition
  • Practical tips for maintaining personal well-being throughout the process
  • Real-life experiences and lessons learned through transition
  • Open discussion and Q&A with industry professionals and a client who recently sold their business

Jason Boudreau, Founder of VELA Wealth and an expert in intergenerational wealth, will lead the discussion and share his visionary insights on aligning life and wealth. Jeremy Nicholls, a strategic planning advisor, will contribute with his expertise and present a compelling client case study, providing a real-life perspective on the emotional aspects of selling a business. Additionally, we are delighted to have Shauna Trainor, our invited expert, who specializes in helping families navigate the complexities of ownership, wealth, and family dynamics.

To reserve your spot, please register for the webinar. Rest assured, even if you are unable to attend the live session, a recording will be made available to you.

 

 

Whether you are currently considering the sale of your business, have recently undergone the transition, or simply have an interest in the topic, this webinar offers valuable insights that can help you navigate the emotional challenges associated with this transformative journey.

 

Meet our distinguished Panelists:

Jason Boudreau
Founder
VELA Wealth
The visionary behind VELA Wealth, Jason has transformed it into a reputable life and estate planning firm, empowering families to make meaningful choices at the crossroads of life and wealth. With a focus on intergenerational wealth transfer and estate planning, Jason’s expertise lies in advanced insurance-based solutions that incorporate philanthropy and legacy planning. Known for his fresh perspective and out-of-the-box thinking, Jason derives immense satisfaction from witnessing clients fulfill their life vision and create a lasting impact with their wealth, knowing that VELA has played a pivotal role in bringing that vision to life for current and future generations.
Jeremy Nicholls
Strategic Planning Advisor
VELA Wealth
Jeremy, a seasoned financial planner with 20 years of experience, brings a wealth of financial and life planning expertise to the VELA team. With a strong background in personal and corporate taxation, Jeremy excels in understanding the unique circumstances of entrepreneurial clients, collaborating with tax and legal professionals to establish recommendations that align with clients’ life goals. Known for building strong, trusted relationships, Jeremy believes in achieving ultimate success by providing clarity around clients’ life planning objectives, ensuring peace of mind for both individuals and their families.
Shauna Trainor
Principal
A&O Partners LLP
Shauna works with enterprising families across North America to navigate the complexities of ownership, wealth, and family dynamics. Shauna engages in a planning process with family enterprises to help them identify, clarify, and articulate their ownership vision and strategy. In collaborating with families, Shauna helps them to establish relevant governance, enhance communication and engage in shared decision making. Shauna leverages her business and psychology background to help families and individual members achieve their desired objectives

Can’t make the date? Register anyway!
A recording will be sent to all registrants after the event.

VELA Wealth is the Support-a-Cause Sponsor of The RBC JCC Sports Dinner 2023

Thursday, May 11th, 2023

VELA Wealth has partnered with Harness Investment Management to be the Support-a-Cause sponsor of the RBC JCC Sports Dinner (March 28th) featuring Rob Gronkowski, also known as GRONK!

The RBC JCC Sports Dinner is an annual charity event which raises money for the JCC of Greater Vancouver. This event provides a chance for the guests to be inspired by individuals who have achieved massive success in fiercely competitive fields, whether they are on a gridiron, a pitch, a hockey rink, a boxing ring, a track, or on a court.

We are thrilled to maintain our relationship with the dinner and anticipate the chance to gather together again in the future.

                                                                               

The Polestar Podcast: The Interest Rate Environment and Lending, What’s Next?

Thursday, May 4th, 2023

In the upcoming Polestar Podcast episode, Rob Wallis talks with Dan Pultr from TMG The Mortgage Group (TMG) about the interest rate environment and lending. Dan explains the impact of dropping interest rates to zero during the lockdown and where it led us as well as provides some recommendations to borrowers on how to ensure they receive competitive offers.

 

About the Guest – Dan Pultr

Dan is a Senior Mortgage Industry Executive that helps individuals and companies grow. He takes a hands on approach to all engagements, loves to immerse himself in the details and works with passionate professionals to deliver comprehensive solutions. Dan’s goal is to provide an incredible Mortgage Experience to Brokers and ultimately to their thousands of clients. To reach out to Dan, please visit his LinkedIn profile.

About the Host – Rob Wallis

Rob has provided senior financial planning and advice to VELA clients for over 15-years. He excels at working with entrepreneurial professionals and business owners to define their individual ecosystems and establish meaningful life and financial goals. He has specialized expertise in guiding healthcare professionals who are building multi-location, and specialist clinics. To learn more, please visit VELA team page.

 

The episode is also available on:

  

  

 

 

Read the transcript of the Polestar Podcast here.

 

Disclaimer

The information provided in the podcast is designed for general informational purposes only and is not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.

Transcript of The Polestar Podcast: The Interest Rate Environment and Lending, What’s Next?

Wednesday, May 3rd, 2023

Listen to the Polestar Podcast here.

Podcast Transcript

 

Rob Wallis:

Welcome to the Polestar Podcast by VELA Wealth. Today, I have the pleasure of speaking with Dan Pultr from TMG, The Mortgage Group. We’re going to be talking about the interest rate environment, lending, and what awaits us next. This is a particularly interesting topic because, having been in the advice industry for 20 years, cash has never really been something that we’ve talked to people as an asset class for at least a decade. That’s because interest rates have been low for an extended period of time, and recently, that has come to the forefront of many conversations. Conversely, that also means that interest rates are high on lending as well, which affects people in different ways.

Dan, welcome! First off, how did we get where we are at?

 

Dan Pultr:

Hey, Rob. Thank you so much for having me. It’s a pleasure to be on the podcast with you today.

So, how did we get here? Well, we had a few things happen that set the stage for where we are today. First and foremost, I think many of us choose not to remember, but we spent some time in lockdown. The central banks from around the world came together and realized that during a lockdown, they really didn’t want any risk of an economic meltdown. So, they effectively dropped all interest rates to zero in most markets. That fueled a steady stream of borrowing for various different reasons – some corporate, and some personal such as people buying houses, investment properties, etc. The savings rates went through the roof – we saw people accumulating, as you mentioned, cash. People were saving at an incredibly high rate relative to what they had in the past. Following that, we had the steepest and fastest interest rate increase that we’ve ever seen in this country. When you combine those two, you create a lot of uncertainty and find yourself in a market where people are a little uneasy and stressed about what the future holds for them.

 

Rob Wallis:

So, with that stress, how is the sentiment in the market right now? We’re obviously talking about Vancouver, but there’s a whole world outside of here and Canada. If you could give a little proxy for Vancouver and then maybe the rest of Canada, that would be helpful.

 

Dan Pultr:

For sure. So, where does that put us today? I feel as though what we’ve seen is an overreaction, both among the central banks, which many would probably say is not an overreaction and that they needed to do exactly this. But I’m not a central banker, nor do I claim to be at the taps of monetary policy. However, where that led us is what they call a confidence issue, which is where the Central Bank told us that we can feel confident or rest assured that interest rates are going to continue to be low through 2023 effectively. So, everyone was caught by surprise. And when you catch people by surprise, after they’ve made some incredibly large financial decisions, such as purchasing a house, they don’t know if they’ve made the right decision. The biggest impact was probably with variable rate mortgage holders. So, anybody that had a mortgage that’s based on prime effectively, which is often used as an index for variable-rate or adjustable-rate mortgages, or lines of credit, felt a bit of a sticker shock as it relates to the payments that they were paying or the interest they were being charged.

There are a number of institutions in Canada that offer variable-rate mortgages where the payment does not actually adjust when the rates change. So, they’re paying less and less principal or no principal at some point in time. At future points in time, in some cases not even paying enough to cover the interest. So, people found themselves in these circumstances, and the rules of which the banks were supposed to govern themselves were kind of held true for a short period of time. Then it appeared that everyone just took the piece of paper they were written on, threw them out the window, and said, “the number one thing we want to make sure is that we put people in a home. People have gotten mortgages. We want to make sure that they’ve continued to make payments”.

We’ve seen a number of people that have seen their payments increase and are feeling financial stress, so they’re in a position where they’re making different decisions today as a result of their mortgage payment increasing.

There’s a whole other class of people who know that their mortgage payments should be increasing, but they know they can’t afford it. Therefore, they’re trying to save and put together a small sum of money to make a prepayment towards their mortgage. We also have people who are in a comfortable position but are anticipating some sticker shock when their mortgage renewal comes up in six months, twelve months, or two years’ time.

When we talk specifically about Vancouver, it’s probably not surprising to hear that Vancouver prices are quite high, and people carry very large mortgages. Therefore, that sticker shock could be quite significant for some individuals. You may have seen your mortgage payments or the interest required to cover your mortgage payments have increased by 45% to 55% over the past year. That’s a material jump! People started making different decisions with their debt. First and foremost, prior to that, there were many opportunities for homeowners and investors to refinance or restructure their debt to get cheaper money. However, those opportunities have effectively ceased to exist. We know that fewer people are making the decision to refinance purely to decrease their interest costs. Also we are still seeing some individuals needing to refinance because they may have a business opportunity or have gotten themselves into more debt than they would like, and they need to pay consumer debt with mortgage debt. It’s still relatively cheaper than a 19.99% interest rate. We have seen people have to make different decisions relating to that, and we see it a little bit on the front lines. We obviously see the homeowner making these decisions, but we don’t see their day-to-day decisions as much. However, that’s what these central bankers wanted. They wanted people to change their vacation habits, dining habits, and spending habits to try and curb inflation because that was the driving force behind the rate increases.

If you look at Vancouver, how is this impacting the real estate market? Effectively, the real estate market almost came to a standstill compared to where it was previously. Recently, I heard a comparison that if you’re going 200 kilometers an hour down the highway, and someone slows you down to 50 kilometers an hour or even a 100, it may feel as though you’re completely standing still relative to where you were previously. That’s kind of where we went to. We were effectively going at a very quick pace, and now things are much slower.

Over the past 30 days, with some changes in the monetary policy, or more accurately, changes in the words that the central bankers are saying about the future, we have started to find a little bit of stability for people to start making financial decisions again. There seemed to be a period of time where people were uncertain enough that they were unwilling to make financial decisions. We saw this with developers and homeowners. They just didn’t know where interest rates were headed, and when they don’t know, it’s really hard to make a decision. Now we kind of know that we may be at or very close to the peak of interest rates as it relates to variable-rate mortgages and home equity lines of credit, anything pending its prime. We’re seeing people start coming off the sidelines, and we’re seeing developers restarting projects that they may have paused for a period of time. Therefore, we’re starting to see that momentum start to build. We’ve only seen it for 30 days, so whether it’s a blip or a trend, that’s yet to be determined.

As it relates to other parts of Canada, I would say that two markets that were most largely impacted by this would be the GDBA and GTA, primarily because of the levels of wealth and prices in those areas. If you look at Alberta or Atlantic Canada, some of those markets have moderated a little bit but not quite to the extremes that we’re seeing in some of those other markets. And part of that is to do with some of the shift that has happened in real estate habits. Prior to COVID, it would be very uncommon for someone to pick up and move, lets say Hope and work remotely. Now we have some of those new habits, so we’re seeing those dynamics start to play out in how the real estate market is behaving as well.

 

Rob Wallis:

It sounds like you’re talking quite a bit there at the end about the demand for lending returning because people can see some stability. How are banks assessing and underwriting risk right now in the current environment, and how does that affect people’s ability to borrow, certainly to the extent they were able to borrow, to a couple of years ago?

 

Dan Pultr:

The fortunate thing, and a number of people actually point this out as sort of a saving grace that we had implemented previously, is that in Canada, we have a mortgage stress test. So, it has been put in place to essentially hedge against the future of rising interest rates. Because borrowers were already qualifying at whatever interest rate they were at, plus 2%, we were seeing that people, at least on paper, looked to be in reasonably good shape to withstand an increase. Now, whether they want to increase their payments or not is another thing, but from a bank’s perspective, I think they were reasonably stringent enough already that it didn’t make a material impact.

Now, one of the interesting nuances is how the stress test is structured. We did see a period of time where people were almost rewarded for going variable because the variable-rate interest rates were a little bit less and as a result, by taking a variable-rate mortgage, borrowers were actually qualifying for a little bit more. I know that’s something some regulators have looked at as a risk or a concern because we don’t want to see people taking on more risk to get a variable-rate mortgage than a fixed-rate mortgage. With a fixed-rate mortgage, we know what to expect over time.

 

Rob Wallis:

So banks are still okay to lend?

 

Dan Pultr:

We haven’t really seen much of a pullback. We’ve seen a few, let’s call them “less competitive” than they would otherwise be. We’ve seen that, but that’s because mortgages are a driver for a number of other consumer products. So, you may hear banks from time to time refer to a client’s as “franchisable” or “franchise a client” which essentially means how many products they can they offer to one individual. It’s kind of a sweet spot that they have, and they offer what they know if they bring in a consumer as their mortgage client, they now have an opportunity to also convert that person to a savings account, a credit card, or whatever else they offer. I’m sure you’ve all experienced or at least your listeners have experienced some of the offers that they may get from institutions when you’re new to them versus existing clients, similar to with cell phone companies. Because mortgages have always been the lead in drawing new clients, I feel as though they’re still going to continue. And because they’re in a much smaller market to operate within, some are choosing to be ultra-competitive, and some are looking to just work with their existing customers and focus on that aspect. So, each major institution differs in how they’re operating. Within that, the nice thing is that there’s a cluster of companies, and we use the term “monoline vendors,” but a number of people know them as mortgage finance companies – these are major Canadian financial institutions that only deal in mortgages, and they are finding this as an opportunity to be ultra-competitive to try and acquire some clients because they know that that’s their only bread and butter. So, mortgages are the only thing that they offer.

 

Rob Wallis:

So, one thing I picked up on from what you said earlier is that some lenders are not being as competitive as others. Is that down to risks in their mortgage business? Or are they taking advantage of the situation? As a result of that, as somebody who’s seeking debt at the time renewal or a purchase, how those people should be responding so they make sure that they get the best value?

 

Dan Pultr:

Right. So, the single best piece of advice I would say to anyone listening is if you’re getting a renewal offer from your bank, if you happen to have a mortgage with a mortgage finance company, I highly recommend talking to a mortgage broker in your neighborhood. The reason I say that is that first of all, mortgage brokers are independent in the sense that they don’t work for any of these financial institutions. Their mandate is to try and obviously earn your business, but obviously they want to make sure that they are effectively providing you with a sound advice and good options for you. What we’re seeing right now is great time for you to take that time, send them your mortgage statement, have them review your renewal offer, so that you can actually see what is real and you can see whether or not the offer that you’re being offered is in fact competitive.

Sometimes what we see is that institutions will just essentially send out blanket letters and they just hope that people sign on the dotted line. Other times, they will effectively ratchet up their behavior as time moves on or get closer to your renewal date, so they might just send a letter. Then they might wait for a period of time. Then they might follow up with a phone call and only once they realize that you’re potentially leaving, they do actually offer you a good deal. Versus when you’re dealing with a mortgage broker, you know that in fact they’re compelled to make sure you get the best offer that they have available for you from the onset and they can tell you all of your options whether you can leave early, or if you have to wait, would there be a penalty or any sort of costs associated with the move. And a lot of the institutions do bank on the fact that there is some friction to move it. There is some time, energy and effort that goes into you moving from one institution to another. And so, they do factor that in when they make you an offer, but it is very prudent to at the very least have a second opinion on what you’re being offered. Earlier you can do that in the process the better. If you start that process 90 days out, that’s great. You can even start it as far out as six months out. So, it’s worth starting that conversation early.

 

Rob Wallis:

So pre-pandemic, how long were people fixing for versus now? How long are people fixing for if they weren’t fixed?

 

Dan Pultr:

It’s interesting actually because right now what we’re seeing is probably the most competitive interest rate out there. It seems to be that sort of four-five year rate environment. So that’s where we’re seeing the most competition. However, the desire among borrowers is much shorter than that everyone seems to feel as though that within one year or two years that rates are going to be better. I’m not an economist, however, I did major in economics as an undergraduate. But I do feel similarly to it. However, if you look at every economist globally and their predictions, no one’s always right and you probably find 50% of them being right and 50% of them being wrong. The reality is that there’s definitely some risk to either of those strategies. The single thing that I would focus on is trying to ensure that your mortgage is aligned with your life cycle timeline. That is a really important thing to consider. There’s a thing in mortgage terms called prepayment penalties, and probably the single biggest frustration among borrowers is if they get stuck with a prepayment penalty and it’s material. They never forget and they always remember it and they want see why it shouldn’t be as much as it is. I’ve seen some very, very large prepayment penalties in the 10th of thousands of dollars. So, if you plan on moving or maybe your investment horizon is different, if you can match up your timeline, that’s really valuable to some of the mitigations as it relates to that. But currently, most people are interested in a one- to three-year term. However, when they’re offered the rates that are available in the four and five year it does sway their decision a little bit because they’re more focused and I think this is based on natural human behavior – while people have the best intentions of going shorter term to try and be in a position where in one or two or three years’ time they’re renewing at a better interest rate environment. Once they see the difference and interest rates, which may only be 50 basis points or 0.5%, but that may be enough to make the four-year option more appealing. And I’ll take that because it’s a compelling offer. So it’s just important to sit down with somebody and let them give you all those options and then you decide what works best.

The other interesting thing about the shorter-term ones is that you have a little bit less market competition available for you as the shorter the term is. So, some of these institutions will offer to compensate you for moving from one to the other and as the term gets shorter, essentially their ability to recoup the costs of moving you from one institution to another decreases enough that they say they’re not going to cover the cost if you’re only going to come there for one year. They may convert you and you might stay within the institution, but all I’m simply saying there are options. It’s just that there’s less options than if you’re, for example, trying to move and it’s a four-year fixed we are looking at.

 

Rob Wallis:

Do higher interest rates create more stable housing market pricing?

 

Dan Pultr:

Well, that’s interesting. Do they create more stable markets? What I can say is this increase in interest rates has significantly decreased the demand for housing or put it differently it’s at least stalled it because I don’t believe that the actual demand has dissipated I just think that people are uncertain enough that they want to wait. That’s a bit of a double-edged sword, because if everybody waits, then that just means we get right back to multiple offer circumstances.

Secondly, we have another market condition that is also a stimulus to demand and that’s immigration. In the last 12 months, we saw a significant amount of immigration and it’s going to continue. That included temporary foreign workers, which is a whole another class beyond the actual immigration that we typically would count. And the numbers were staggering there. The numbers that I saw in the most recent presentation was almost 1,100,000 in 2022, if you account for the temporary foreign workers. So that’s a significant amount of people that we’re having to house. So, you’re causing a significant stimulus to demand, all else being equal, and then you have a demand start to come back online because it was delayed. I think if you’re going to move, you’re going to want to change your home interest rates aside, interest rates may only stall for a period of time. Eventually, you’re just going to say “Look, we can’t live in this one-bedroom townhouse or condo with three kids…”. Eventually you have to make that decision, whatever that decision may be, you may move further out to find more affordability.

Thirdly, we did see a bit of a pricing correction. We did see a decrease in price, but it was almost offset enough that the payments were effectively close to the same.  There’s a rule in Canada around mortgage default insurance and that it’s only available for properties that are under $1,000,000. And this is where it did create a little bit of stimulus: if your property was worth $1.1 million and now is worth $980,000 there’re actually more people able to purchase that home because the amount of down payment that is required for a property that’s $980,000 is materially different than if you’re purchasing a property worth $1.1 million.

Now, we’ve talked a lot about demand, but the other piece that is more problematic, and which is going to continue to be a challenge for us and what’s going to keep home prices at least elevated, my comment on it would be – I think it’s going to be still elevated for a period of time. I think if nothing else it’s going to maintain stability and pricing it’s going to pose some frustration though, because it’s going to continue to see multiple offer situations, is that we still don’t have supply. We are not building enough housing in Canada for the number of people we have, nor for the amount of immigration we receive. And now, there is less willingness to sell homes because of some of the existing market conditions. People are seeing that interest rates are high, and they hear that prices are coming down. Is that the time when you want to try to sell your house for top dollar? Of course, if you’re selling you eventually buying, but we know that people are considering this option. We are starting to see some of those things play out. For instance, the provincial government in BC is trying to mandate the type of allotment you have on any single-family lot. So, we’re hopeful that this will increase supply and create more opportunities for affordable housing. However, it will take years for any of these changes to come into effect. Supply is not something you can turn on or off, and the impact of it takes quite some time through the cycle.

Right now, if you look at the current market, people are unwilling to list their homes. Therefore, the properties that are on the market have been there for some time, perhaps because the price is too high or it’s not very desirable. The properties that are desirable get a ton of interest, and if you talk to a realtor today, they will probably tell you they have a ton of interest. They may even end up in a multiple offer situation, where people jump on a specific property in the neighborhood. If there are only two properties for sale in the entire neighborhood, and 50 people show up at each, the price is almost irrelevant. It now becomes a matter of what someone is willing to pay for one of these properties, and they have a timeline and a budget. So, we are back to this sort of imbalance in supply. We need steady, long-term, consistent supply, and that’s what’s going to allow us to be in a position where prices will be a little more stable over the long-term, versus some of the big ups and downs we’ve seen. Those big ups and downs are a little concerning too, right? We don’t want to see wild swings because somebody always gets caught at the peak of that. We’d rather see some level of stability. Personally, I want some headlines about multiple offers right now because it might bring more supply to the market with people willing to sell their homes because they hear that prices are no longer falling due to low real estate activity. Only time will tell, and as I mentioned earlier, we don’t know if it’s a blip or a trend right now, but we’re seeing a little more stability over the past 30 days.

 

Rob Wallis:

Got it. So, Dan, I’m not going to hold you to this, and neither of our listeners, but will we be looking at lower interest rates in one year?

 

Dan Pultr:

I had the opportunity to ask a couple of economists a couple of weeks back, and both of them bet that if you take the five-year fix, which is what everybody looks at in Canada, we would all anticipate interest rates being lower from where they are today. I do think that there’s room for that to come down, so I would say yes.

As it relates to variable-rate mortgages or anything pegged to prime, I don’t think we’re going to see any central banker, I don’t think in Canada or the US, which we typically take a price from the US. I can’t see them lowering the interbank lending rate this year. I would be very, very surprised. Would they lower it in early 2024? Maybe. But all the sentiment from all the economists is that the Bank of Canada has said, and has now called it “a confidence issue”, that interest rates were going to stay low, and then they went the other way. Right now, they’re telling us they want to kill inflate and they want to make sure inflation is dead, completely dead, like never going to rear its head to the levels that it was. So, until they actually see something that gives them that sort of certainty, that inflation is dead, they will not start decreasing rates. They will hold firm, and that may result in some stress to the overall economy that we just don’t know where that is yet. We haven’t really seen any real material pain in the Canadian economy just yet.

 

Rob Wallis:

Yes, totally I agree with that. I think that’s a good topic for another podcast – “When is inflation dead?”.

 

Dan Pultr:

Yes, that would be no expertise of mine but it would be something I’d love to listen to. I’m sure there’s a bunch of interesting thoughts on that and interestingly enough, can you kill inflation when the rates are high and part of the driving force to inflation is interest rate costs on mortgages, right?

 

Rob Wallis:

Dan, thank you. It’s been awesome conversation.

 

Dan Pultr:

Thank you very much for having me Rob, I really appreciate it.

 

Rob Wallis:

Pleasure. Cheers, Dan.

 

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The information provided in the podcast is designed for general informational purposes only and is not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.