This past year has, again, tested the cliché “when the going gets tough, the tough get going,” which makes this year’s Generosity of SpiritTM (GOS) Awards that much more special. An initiative of the Association of Fundraising Professionals Calgary & Area Chapter, GOS recognizes the many individuals, families, youth, groups and businesses who demonstrate the spirit of philanthropy through outstanding contributions of time, talent, leadership and financial support. It also provides the opportunity to acknowledge and celebrate these philanthropic leaders, including this year’s Small Business Philanthropist – Calgary-based Peters & Co. Ltd.
There is unspoken consensus, especially in the energy sector and related industries and services, that Calgary’s good times and challenges have always been cyclical. And that Calgary has proven itself resilient and able to adapt.
As Chris Potter, president and CEO of Peters & Co., points out, Calgary’s resilience and adaptability has always been partially business sense and partially the spirit of the people and the community. “Calgary is a city that is populated by a highly-entrepreneurial group of individuals. And many have been exposed to the cyclical nature that Calgary has been built around, and they have adapted.
“It’s almost part of the community’s culture that, through good times and bad, they understand and value the opportunities that Alberta and particularly Calgary presents and a consistent willingness to give back and offer a hand-up.
“What some people don’t grasp is that the attitude is so positive and different from a lot of cities,” he emphasizes with Calgary pride. “And it’s not only business or economy related. Even during disasters like the flood, Calgary came together, rolled up sleeves and did whatever it took.”
Peters & Co. is a much-respected, independent and fully-integrated investment dealer that has specialized in the Canadian energy sector for over 45 years, and Chris Potter has solid expertise and experience, dealing with the constant oil and gas sector cycles, in good times and challenging times.
“Of course, cycles and trends have always been a predictable part of the energy sector and there are also common and predictable factors that cause the cycles. But there’s a consensus that this one is different, in various ways,” he points out.
“It is deeper and wider than we’ve seen in a long time. Of course there’s the factor of commodity prices. There are also various regulatory, social and environment movements happening and, from an investor point of view, it’s all added additional uncertainty.
“Technology is tremendous. It has redefined the industry but unlocking technology has dramatically changed the cost structure of the oil and gas business. We don’t drill vertical wells. It’s much more capital intensive. There are enormous additional costs with new horizontal, multi-stage wells.
“In some ways, the crunch and the industry’s difficult times are having a positive effect,” Potter says with enthusiasm. “With the reduced revenues and cash, many companies are cost-conscious and cost-competitive. They are seizing the opportunity to squeeze out some excess costs that have become almost built in to the industry.
“From the perspective of a lot of the capital flows, there is uncertainty about regulations and taxes. It has caused capital to pause, take a step back and perhaps be a bit more reserved for the moment, about investment in Calgary-based companies.”
He is extremely energy-sector savvy, to-the-point realistic but genuinely upbeat about the recovery and the new normal. Like most of his peers, he cautions about overreacting to temporary positives and upticks and is confident about the true signs of a stable, sturdy recovery.
“The number one factor is stability in commodity prices. We have some of the best plays in North America. There will be increased capital investment when investors feel comfortable about prices and other things,” he cautions. “Of course, with each new government, there are additional taxation regulations and tax structures. Investors don’t take well to too many changes. They seek out other alternatives. Investors need to feel comfortable about consistent tax regulations and tax regimes.
“But, the good news is that investors are looking from the outside in, and Canada still has lots of merits, especially economic and other stability. I think we have probably bottomed out and can expect recovery by mid-2017 and early 2018.”
Potter professionally guesses the new normal will include the energy sector doing more with less; companies that are more effective and efficient about spending capital and what they get for the money. “Personally, I don’t think we’ll see the over-capitalization and cost escalations that we have experienced over the past 10 years.”
That is then. This is now. And he underscores the unavoidable realities that although things are good in the Calgary area, the downturn has impacted various levels of Calgary life: business and the economy, of course, but also the job market, particularly downtown commercial real estate and more subtle and hard-to-document trickle-down effects on government support for the community.
“We’re close but I don’t think we’re done yet,” he cautions. “There is sadly lots of job losses, reduction in business revenues and profit losses and, at the community level, more and more Calgarians need a helping hand.
“The practical reality is that agencies and charitable organizations also need more help. The donation flow has decreased and the government can no longer just step in and fill the void.”
Potter explains that although it would be ideal to measure donations as companies do with other investments, it’s tough – if not impossible – to measure ROI on corporate philanthropy. Every situation is different, there is no business model and it is impossible to measure numerically.
“The role of corporate and individual giving is more important than ever!” He explains Peters & Co. has been a private entity for 45 years and giving back has been part of the company culture. “It’s a philanthropic ideology, and it has been passed down through the generations of Peters & Co. partners and staff.”
Peters & Co. supports and participates in Calgary’s community-based charitable activities, not only through charitable donations but also with volunteer time to worthwhile causes such as the Alberta Children’s Hospital Foundation. The company has also been a vital partner of the United Way of Calgary and area for more than 28 years.
“We encourage all our staff and we have 100 per cent participation,” the high-energy business executive and busy father of four adds with pride. “Our donation is genuinely ‘on behalf of everybody.’”