They’re a hardy bunch, those Canadians in Atlantic Canada, and Halifax insolvency lawyer Ben Durnford is no exception. Born and raised in the area, Ben sits down with us to discuss, among other things, the challenges that come with living and doing business in an area of Canada that has traditionally been so dependent upon natural resources.
I began my legal career at a smaller firm in Halifax as a general litigation associate, a practice which gradually expanded to include corporate finance work and eventually some exposure to insolvency and litigation matters involving both Canada and the Eastern Caribbean region, where we regularly supported local counsel. Of the various types of work I became involved with in these early years, it was the insolvency work (particularly assisting various trustees and financial institutions), which I found most challenging and interesting. I was fortunate to have the opportunity to learn the trade from senior colleagues such as Richard Rafuse, Tony Tam and Alexander Beveridge, among others.
In late 2005, our firm merged with McInnes Cooper and it was quickly determined that there were enough of us who “dabbled” in the world of insolvency to join forces with other practitioners in the field with solid workflows to form a dedicated practice group, known as the Asset Recovery and Insolvency Group. At the time, as we transitioned from a medium sized firm into a larger regional practice, the formation of our group was not unlike the selection of teams in a pond hockey game; where sticks are assembled before being tossed to opposite ends of the surface, with the teams formed only after all sticks are retrieved by their owners. While my junior colleagues and I were certainly interested in insolvency law and willing to learn more, we quickly found ourselves skating with veteran professionals, and battling to stay in a high-paced game on a full time basis. It was a steep learning curve, but the interesting work and strong mentorship I received made it a very rewarding experience.
Working with Richard, Tony and well-regarded McInnes Cooper practitioners such as John Stringer, Stephen Kingston and Anthony Richardson, I was given an even broader introduction into the network of local insolvency counsel and trustees. In the early days of my full time practice in the field, I also greatly benefitted from attending conferences across Canada. There I became exposed to a wider cross section of the players on the Canadian insolvency scene, as well as some topical content which was then not seen very often in Atlantic Canada, such as cross-border insolvency issues. This network was expanded further through my participation in American conferences, and through some interesting fraud-related file engagements, which took me to England and the Caribbean region.
Although Canada is geographically very large, I quickly discovered that the community of insolvency professionals is for the most part very close-knit and collegial. Cultivation of solid long-term working relationships with the various lawyers, bankers, accountants and trustees one frequently encounters in practice is crucial to developing a successful career in this field.
2) What types of businesses are struggling in Atlantic Canada at the moment?
While not exactly unique to Atlantic Canada, we have noticed in recent months (particularly in Newfoundland and Labrador) an increase in insolvencies affecting both construction companies, and businesses which service the real estate market, primarily in St. John’s, due in large measure to a decline in the local oil and gas industries.
In addition to construction companies, many small and medium scale home improvement, hardware and building supply businesses on the East Coast have also fallen on hard times.
Proximity to the ocean has naturally made Atlantic Canada one of the leading aquaculture centers in North America, and recently each of the four Atlantic Canadian provinces has had its share of insolvency matters associated with this industry. Compounding the standard difficulties encountered when dealing with any live inventory, open ocean aquaculture operators have to contend with an unforgiving natural environment and the risks associated with extreme Atlantic weather and tides, predation and disease, together with heavy competition and market volatility.
As well, the province of Newfoundland and Labrador in particular has seen some recent examples of spinoff insolvencies affecting companies which formerly held lucrative contracts in the Alberta oil patch, showing how sensitive many Atlantic businesses are to downturns in a sector based thousands of kilometers away.
3) What are some of the unique types of files that insolvency practitioners would encounter in Atlantic Canada?
Atlantic Canada’s economy has traditionally been quite dependent upon the extraction of natural resources and the industries these resources support. While this is not unique to Atlantic Canada, in recent years this region has encountered several major insolvent restructurings involving the mining, produce and livestock farming, forestry, aquaculture and fisheries sectors.
In particular, since 2014 we have seen a number of blueberry farms, some family-owned and operated for generations, run into financial difficulty.
Of all of the industries facing challenges however, perhaps none in Atlantic Canada has faced as drastic a downturn in the past two years as the mink farming industry. Many mink producers in this region have been affected by a confluence of hardships, including declining consumption by Russian and Chinese markets traditionally depended upon, and outbreaks of epidemics such as Aleutian Disease affecting pelt quality, which have provided challenges too severe for many operators to endure.
4) How would you characterize the general mood in the business community in Atlantic Canada? Is there optimism for the economy’s future? Or the opposite?
There is growing unease, in New Brunswick in particular, over U.S. softwood lumber tariffs, which naturally have a significant impact on local mills and the numerous industries which support these mills such as trucking and logging.
In general, in a region of the country so traditionally dependent upon natural resources, there are local concerns regarding the uncertainty (politically and otherwise) in the United States. Of particular concern is the unclear future of the North American Free Trade Agreement, and the adverse impacts potential export tariffs might have on staples such as seafood and manufactured products. The volatility of the Canadian dollar also has had a profound effect in this part of Canada, particularly on exports of seafood and forest products to foreign markets.
Despite this uncertainty, there is much cause for optimism in Atlantic Canada, as growth in the emerging technologies, renewable energy, shipbuilding, information technology, biomedical and maritime sectors continues to be strong. Atlantic Canada has invested heavily in wind, tidal and other renewable energy initiatives, and continues to streamline power transmission to service both local demand and that of consumers in the Northeastern United States.
An extraordinary amount of public and private sector funding has been allocated of late to study new and more effective means of harnessing the economic opportunities associated with the Atlantic Ocean, be it oceans technology, sustainable fisheries, tidal and other renewable marine energy sources, seabed natural resource exploration, or other potential sources of revenue and job creation. Appreciating this enormous potential, McInnes Cooper has been placing great emphasis on the oceans sector in its business planning.
While by nature Atlantic Canadians are an optimistic and durable people, this region is not immune from the effects that global political and economic uncertainty have on the overall commercial mood.
5) What is one thing that most people you work with would not know about you?
I am an avid salmon and trout fly-fisherman, and a lifelong Boston Red Sox fan. Indeed, I believe both interests may be symptoms of the same mania; demonstrating that while I have great faith, I have also developed a tolerance for extremely lengthy stretches of time between moments of joy! On October 28, 2004, the morning after the Red Sox won their first World Series since 1918, I took a celebratory day off; leaving on my voicemail an out of office message which informed callers that I was too well to come into the office that day.
While there is nobody at the office who would be unaware of this fact, I also take great pride in my family. My wife Jacqueline, my son, and my daughter help ease the day-to-day stresses of life as an insolvency practitioner, and make it all worthwhile.