B U S I N E S S E D I T O R 6 0 4 - 6 0 5 - 2 5 2 0 • T U E S D A Y , M A Y 3 0 , 2 0 0 6 • E - m a i l s u n b u s i n e s s @ p n g . c a n w e s t . c o m

S E C T I O N

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BUSINESSBC

W O R K , M O N E Y A N D E N T E R P R I S E I N B R I T I S H C O L U M B I A

SHIPPER SWITCHES TO CLEANER FUEL I D3 TSX CONTINUES RECOVERY I D9

“Well, sir, the thing I like mostabout working here is the part

where I get to go home.”

WORKING IT OUT

FLIGHT RISKWhen airline passengers find theirseat assignments, most pray thattheir seatmate won’t offend thenose, according to the AirplaneQuality of Life study conducted byYahoo! FareChase. An overwhelm-ing majority, 82 per cent, dreadmost sitting next to someone whosmells, while another 62 per centprefer not to share a row withsomeone who argues with every-one. Three out of 10 people can’tstand passengers that dominatethe armrest, snore or listen to loudmusic on their head phones.

NOT SHAKENIt’s hard to image suave superspyJames Bond ordering a brewski,but Heineken beer will be featuredin the 21st Bond film, CasinoRoyale. Heineken has partneredwith Eon Productions and Sony Pic-tures Entertainment to launch aworldwide promotional campaignfeaturing Eva Green, who stars asVesper Lynd in the film. Ads will runon TV and in cinemas throughoutNovember and December.

SCOOTING THE LAWThe Segway, an electric, self-bal-ancing scooter, never did becomethe commuter’s choice of trans-port despite its backers’ predic-tions, but the gizmo has found agrowing market among law-enforce-ment agencies, with more than100 departments around the worldnow signed on as Segway Inc. cus-tomers.

CLEARED FOR TAKEOFF:Vancouver International Airport isforecasting a record number ofpassengers for 2006, which meansa major shift in runway use.

WEDNESDAYBUSINESS BC

A B.C. Chamber of Commercesurvey finds that there isstrong support for the provinceto become energy self-sufficient.

Power poll

SOURCE: B.C. CHAMBER OF COMMERCEVANCOUVER SUN

B.C. SNAPSHOT

Q: B.C. imports approximately12% of its domestic electricityrequirements. This is roughlydouble the import requirementof the mid-1990’s. Do youbelieve that the province shouldstrive for electricenergy self-sufficiency in thefuture? Q: As part of BC’s future electricself-sufficiency strategy and tomeet growing demand, do youagree that construction of thePeace River Site-C Hydro Electric Project should be immediately undertaken?Q: Do you support constructionof smaller electric generatingplants, built and operated byindependent power producers,as an additional wayfor BC to meet itselectricity demands?

YES

NOUnsure

YES

NOUnsure

YES

NOUnsure

BY DERRICK PENNERVANCOUVER SUN

So many of the province’s proposedGateway transportation improvementslead to Maple Ridge and Pitt Meadowsthat land values in the two Vancouversuburbs will jump as much as 20 per cent,the Real Estate Investment Network pre-dicts.

Those two communities won’t be alone,said REIN president Don Campbell.North Langley-Abbotsford, Port Moody-Coquitlam, Surrey-Delta, areas of Rich-

mond and Vancouver and even Chilli-wack and Mission should also see increas-es in real estate values from 10 per cent to20 per cent as new transportation routesare built.

Campbell and co-author Russell West-cott released their assessment in a reporttitled The Gateway Effect: The impact oftransportation improvements on housingvalues in the Lower Mainland and FraserValley.

“[The Gateway improvements] willopen up some of the economic arteries ofthe region,” Campbell said in an interview.

Robert Helsley, a professor at the Uni-versity of B.C.’s Sauder School of Busi-ness, said it is a matter of accessibility.Wherever government installs new infra-structure — whether it is rapid transittracks or a highway — it will influenceproperty values and development pat-terns.

Campbell, however, has tried to quanti-fy the effect of the Lower Mainland’smajor transportation initiatives on prop-erty values from Richmond to the eastern

TRANSPORTATION I Lack

of easy ways to get

to, from work have

depressed real

estate prices there

until now

SOURCE: REAL ESTATE INVESTMENT NETWORK

Maple Ridge, Pitt Meadows to see risein land values of up to 20%: realtor

1 Maple Ridge and Pitt Meadows, hampered by poortransportation infrastructure for decades, will see propertyvalues increase as the region becomes among the most

accessible in the Lower Mainland; this will drive demand for bothresidential and commercial-industrial property. Directly affecting theregion will be: The new Golden Ears Bridge; the new Pitt River Bridge;the South Fraser Perimeter Road; the expansion of Highway 1; and thetwinning of the Port Mann Bridge.

2 North Langley, FortLangley and Abbotsfordhave been held back by

Highway 1 and Port MannBridge congestion. Theexpansion of the HOV lane onHighway 1,the twinning of thePort Mann Bridge, and thecompletion of the South FraserPerimeter Road will relieve thiscongestion, driving growth forcommercial enterprises andresidential units alike.

3 Port Moody and PortCoquitlam already enjoyhigher real estate prices

than the first two on this list, butthis region will experience anincrease in demand fromcommuters wishing to stay on thenorth side of the Fraser. Thelargest impact will come from theEvergreen Rapid Transit Line andimprovements to the North FraserPerimeter Road.

4 Surrey andDelta willsee traffic

issues alleviatedafter the comple-tion of the SouthFraser PerimeterRoad and thetwinning of thePort Mann Bridge,as much of thecommercial trucktraffic will be tak-en off arterialstreets.

5 Mission andChilliwack willfeel the impact

from reducedcongestion on Highway1 and access to theSouth Fraser PerimeterRoad. Mission willattract both residentialand commercialinterest, whileChilliwack will see aboost in commercial-industrial investment.

6Vancouver and Richmond will see a positive impact from Canada Line rapid transit, especially on residential properties located within 500 metres of each station, with the largest increases being in areas where the median income is lowest.

The Gateway Project will deliver a 10%–20%increase in real estate values in the areas listed,over and above the rest of the Lower Mainlandand Fraser Valley, according to the Real EstateInvestment Network. The regions that will benefit most are rankedaccording to how great the impact will be.

THE GATEWAY EFFECT

BY WENCY LEUNGVANCOUVER SUN

Sweden’s Lundin PetroleumAB announced Monday it willacquire Vancouver-based juniorenergy company Valkyries Petro-leum Corp. in a stock-swap dealworth $780 million.

Valkyries shareholders will

receive one Lundin Petroleumshare for each Valkyries share.That represents an 8.2-per-centpremium on Valkyries’ closingstock price of $12.51 on the TSXVenture Exchange on Friday.

Lundin Petroleum, an oil andgas exploration and productionfirm managed by the Switzer-land-based Lundin Group of

companies, said the acquisitionof Valkyries will open up newopportunities in Russia, whereValkyries has stakes in severalproducing and exploration pro-jects.

“We see Russia as a new corearea for Lundin Petroleum,” Ash-ley Heppenstall, Lundin Petrole-um’s CEO and president, told

analysts during a conference call. “The major rat ionale for

Lundin Petroleum in this deal is... to get access to Valkyries’sexploration assets, and to getaccess to a team of people andthe contact which Valkyries hasdeveloped in Russia,” Heppen-stall said.

Last year, Valkyries had proven

and probable reserves, plus third-party estimated reserves, ofabout 29.5 million barrels of oil atits Russian projects.

The Vancouver company isalso part of the group of interna-tional resource-based companiesheaded by the Lundin family.

Swedish firm buying ValkyriesStock-swap deal for the Vancouver-based energy junior worth $780 million

The Golden Ears Bridge, as seen in a TransLink rendering, is due to open in 2009.

The North Fraser Perimeter Roadwill benefit Port Moody and PoCo.

Rendering of the Vancouver-Richmond Canada Line bridge.

The Port Mann Bridge is twinned in this rendering.

The South Fraser Perimeter Road will taketruck traffic off arterial roads.

SOCCER FANS FLOCKTO GERMANY

TRAVEL I D 12

See VALKYRIES SHARES D4

See IMPACT ALREADY D4

BUSINESSD4 THE VANCOUVER SUN, TUESDAY, MAY 30, 2006

end of the Fraser Valley.He studied examples around rapid

transit systems across North America,as well as several instances of highwayimprovements in the United States toreach his conclusions.

Campbell said Maple Ridge and PittMeadows should see the most dramat-ic increase in property prices becauseheavy traffic congestion has depressedreal estate values there compared tocommunities on the south side of theFraser River.

“People are looking for more afford-able regions [to live in],” Campbellsaid. “The problem with some of theseregions, like Fort Langley and PittMeadows, is that people just can’t getto work.”

He added that the convergence ofGateway projects in the Ridge Mead-ows area should solve that. Gateway’sNorth Fraser perimeter road, includ-ing an expanded Pitt River bridge andimproved Mary Hill bypass shouldhelp ease traffic congestion throughPitt Meadows.

So should the new Golden Earsbridge, Campbell added, which willlink Ridge Meadows with Langley,Highway 1 and even Gateway’s SouthFraser perimeter project.

Campbell added that he doesn’texpect the “Gateway premium” to befully included in property values untilafter the Gateway projects are com-plete, but industry participants in theregion are already starting to see theeffect take hold.

“Some of that impact is probablyalready being felt,” Ron Antalek, a real-tor with Re/Max Ridge Meadows Real-ty in Maple Ridge, said.

While the booming local housingmarket makes it difficult to measureexactly how much the Gateway initia-tive has pushed up property values,Antalek said he noticed a distinctincrease in interest in the Ridge Mead-ows area by first-time buyers and com-muters once TransLink’s $650-millionGolden Ears bridge was confirmed.

“Maple Ridge is the most affordablecommunity in the GVRD,” Antaleksaid. “That attracts first-time buyers,and [transportation improvements]have been the biggest drawing card forthese [people] who can see a future ofbeing able to survive a commute.”

However, Dave Keenan, CEO ofGenstar Development, has worked ondevelopments in Pitt Meadows andsaid he believes the premium couldalready be 15 per cent or higher.

The Gateway project, he added,helps create a whole new “locus ofactivity,” centred on Abbotsford, forregional industry.

“All of a sudden there’s this . . . dif-ferent set of economic opportunitiesthat are emerging in the Valley asopposed to the downtown core of Van-couver, or the Burnaby-Coquitlam sec-tor,” Keenan said.

Campbell said he expects the NorthLangley to Abbotsford area to see thenext highest increase in values as twin-ning of the Port Mann bridge, expan-sion of Highway 1 improves trafficflows for commuters.

Campbell also believes property val-ues in the Port Moody-Coquitlam cor-ridor could rise up to 20 per cent withthe Evergreen Line rapid transit linkand North Fraser perimeter road.

Surrey and Delta will receive “sec-ondary benefits” as the South Fraserperimeter road and twinning of thePort Mann bridge will help ease trafficon their major streets, Campbell said.Mission and Chilliwack, he added, will

attract first-time buyers who will findit easier to commute to jobs in theAbbotsford and Langley areas.

Campbell said areas of Vancouverand Richmond along the Canada Linerapid transit link will see valuesincrease, but not by as much as otherregions because they are already high-priced areas.

David Podmore, president of theUrban Development Institute’s Pacif-ic region, and CEO of Concert Proper-ties, said developers are already stak-ing positions on rapid transit lines forhigher-density development.

Podmore said Concert is seeingmore buyers who find urban condo-miniums more attractive than subur-ban houses.

“A lot of people . . . are estimatingboth the real and social costs of com-muting,” Podmore added.

depenner@png.canwest.com

Impact ‘already being felt’

Richmond

Burnaby

Coquitlam

Surrey

LangleyDelta

PittMeadows Maple Ridge

North Vancouver

Fraser Hwy.

176

St.

200

St.

216

St.

Vancouver

South FraserPerimeter

Road99A

17

ProposedGolden Ears

Bridge

North FraserPerimeter

Road

Widening of Highway 1

EvergreenLine

New seven-lanePitt River Bridge

by 2009

New interchange by 2009

1

CanadaLine

Twinning of Port Mann Bridge

and widening Highway 1

BY ROMINA MAURINO

TORONTO — Inco Ltd. andthe United Steelworkers ofAmerica reached a tentative con-tract agreement Monday, aheadof a strike deadline that wouldhave shut down the nickel giant’soperations in Sudbury, Ont.

Both sides refused to releasedetails of the three-year accordbefore membership meetings setfor Tuesday, but Mark Cutifani,president of Inco’s operations inNorth America and Europe, saidthe proposed contract includesimprovements to wages, benefits

and pensions.It also “provides the basis for

continuing the business improve-ment and growth strategy inOntario,” he said.

“We’re satisfied,” United Steel-workers’ Ontario director WayneFraser said after the deal wasreached.

The bargaining committee willrecommend the package to itsmembership, which will vote onthe contract Wednesday.

“We think it reflects the cur-rent conditions of the nickel mar-ket and the copper markets and,also, we’ve dealt with some of the

effects that may result fromsomebody taking over Inco orInco taking over Falconbridge,and that was important to us,”Fraser said.

Monday’s settlement followed24 hours of talks assisted by aprovincial mediator. Negotia-tions covering the 3,240 workers— who had voted 98 per cent tosupport a strike — had broken offearly Sunday morning beforeresuming under the mediator.

Inco and the union had beennegotiating for the Steelworkerslocal in Sudbury and a smallerunit in Port Colborne, Ont., sinceApril 11 on issues that includedpay, pensions, benefits and jobsecurity.

“We’re very pleased, it was a

tough set of negotiations, as theyalways are, the timeline wasgrowing short ... but I think therewas a great deal of dedicationand commitment to get a dealdone and avoiding a strike onboth sides of the bargainingtable,” said Inco spokesman CoryMcPhee.

“This is a very strong nickelmarket, and the Sudbury opera-tion is a significant contributor toInco’s total nickel production. Ithas a devastating effect on ourcompany and our employees andthe communities in which weoperate when there’s a disrup-tion.”

Shares in Inco, the target of ahostile takeover bid by Vancou-ver miner Teck Cominco Ltd., fell

three cents to close at $72.02 onthe Toronto Stock Exchange.

Inco is also battling Xstrata, aSwiss miner, to take over rivalFalconbridge Ltd., which Incowas set to buy in a friendlytakeover.

Xstrata, Falconbridge’s biggestshareholder, launched an all-cashbid for the Canadian firm earlierthis month.

A strike at Inco could have cre-ated another twist in the takeoverround-robin, as it may haveboosted Inco’s share price andgiven its cash-and-shares bid forFalconbridge a leg up.

Ray Goldie, a metals analystwith Salman Partners Inc., says astrike would have boosted Inco’sshare price, since the market

seems to take the view that whatthe company loses on volume ofproduction, it more than makesup for it in nickel prices.

Both sides of Inco’s labour dis-pute said while the mergers werea subject of discussion, their con-cerns related largely to job secu-rity.

“It wasn’t the determining fac-tor in the talks, or the driving fac-tor,” McPhee said.

“This was a set of negotiationsthat was meant to reflect what’sfair for our employees and whatallows to continue growing thebusiness here,” he said, addingInco never considered that theremay be a benefit to having astrike.

Canadian Press

LABOUR I Union recommends accord reached

after 24 hours of talks with nickel miner

Inco, Steelworkers settle on three-year deal

BY DUNCAN MAVIN

INCOME GROWTH I TORONTO —Bank of Nova Scotia’s global retailbanking operations fuelled recordearnings for the second quarter,the bank said Monday.

Canada’s most internationalbank reported net income of $894million for the quarter, a jump ofeight per cent from $826 millionfor the same period last year.

Much of that growth camecourtesy of international opera-tions, primarily in Latin America,Mexico and the Caribbean, whereearnings rocketed 44 per cent to$268 million from $186 million ayear earlier.

“It was a very broad based per-formance and [we’ve been able toapply abroad] the kind of salesand service that the domesticbank has performed for a longtime,” Rob Pitfield, executivevice-president of internationaloperations, said on a conferencecall for analysts.

Overseas revenue soared 15 percent to $762 million from $663million in the same quarter in2005, despite the $45-million neg-ative impact of the strong Cana-dian dollar. By comparison, rev-enue from domestic operationsgrew by a relatively modest fiveper cent to $1.4 billion from $1.3billion.

Overall, 29 per cent of thebank’s total quarterly earningscame from abroad, up from 22per cent in the same period lastyear. The international divisionnow contributes about the sameproportion of total earnings asdomestic retail banking and Sco-tia Capital.

Pitfield said the bank’s interna-tional growth is sustainable.

“If you think that in many ofthese countries there are oppor-tunities for further branch expan-sion, and sales outside of thebranch, that kind of consistent,solid growth is something that wehope to continue,” he said.

Scotiabank has long been themost ambitious of the Canadianbanks internationally and thattrend continued this year.

In March, for instance, Scotia-bank completed the $390-millionpurchase of two Peruvian banks,Banco Wiese Sudameris and Ban-co Sudamericano. Scotiabank willmerge the two banks to form thethird biggest bank in Peru.

In the Caribbean, Scotiabankhas agreed to buy Citigroup Inc.’sconsumer banking business inthe Dominican Republic.

Meanwhile, Scotiabank Mexicocontinues to look to grow its loanbook and announced the pur-chase of a 3.1-billion Mexicanpeso car loan portfolio. Scotia-bank Mexico also plans to add100 new branches to its networkby the end of 2007.

The bank is now looking forfurther acquisitions and growthin similar geographical marketsto those in which it is already pre-sent, said chief executive RickWaugh. The Americas, apartfrom the U.S., is “an area of inter-est” he said.

dmavin@nationalpost.com

Bank ofNova Scotiaprofits surge

to $894m From D1

Valkyries shares surge 11.9 per cent on takeover offer

The ‘Gateway effect’Proposed transportation improvements, from rapid transit expansion to the provincial government’s $3-billion Gateway project,are expected to increase property values in communities that residents will find easier to commute to and from.

In addition to oil and gas, the LundinGroup of companies is involved in theproduction and exploration of copper,zinc, gold and other resources.

The Lundin Group already owns about25 per cent of Valkyries’ stock.

Valkyries chairman Lukas Lundin, whois also a director on Lundin Petroleum’sboard, owns 88,367 shares of Valkyries.His father, Adolf Lundin, the honorarychairman of Lundin Petroleum’s board ofdirectors, is Valkyries’s largest share-holder, with 5.6 million, or 10 per cent, of

Valkyries’ 55.3 million outstanding shares.Valkyries has a 50-per-cent interest in

the Sotchemyu-Talyu Field in Russia’sKomi Republic, a 51-per-cent interest inthe Caspian Field in the Kalmykia Repub-lic, and a 50-per-cent interest in theAshirovskoye field in Orenburg. It alsohas a 70-per-cent stake in the Laganksyexploration block offshore in the CaspianSea.

The takeover will add 4,500 barrels ofoil per day to Lundin Petroleum’s output.

Valkyries president and CEO Keith Hillsaid the deal will provide capital and mit-igate the risks involved in Valkyries’ pro-

jects.“Our major limiting ability to grow is

our access to capital and technical per-sonnel,” Hill said during the conferencecall.

He added: “We’re opening ourselves upto expanding the company very quickly.”

Under the terms of the transaction,Lundin Petroleum will issue 57.4 millionnew shares, giving Valkyries sharehold-ers 18 per cent of Lundin stock.

The deal must be approved by atleast two-thirds of votes cast byValkyries’s shareholders, as well as asimple majority of Lundin Petroleum

shareholders.The companies said they expected to

close the deal shortly after they holdshareholder meetings in mid-July.

Lundin Petroleum said it will retainValkyries’ executives and employees.

Valkyries stock surged 11.9 per cent, or$1.49, to close at $14.00 on the TSX Ven-ture Exchange on Monday. The compa-ny’s stock has increased more than 250per cent during the past 12 months.

Lundin Petroleum stock was up 6.4 percent at 95.25 Swedish kronor, about $14.45,on the Stockholm Stock Exchange.

wleung@png.canwest.com

From F1

Don Campbell of the Real EstateInvestment Network.

VANCOUVER SUN GRAPHIC