COVID-19 and construction series: Canada

Paul Wurth:

You are listening to “The Building Code,” a podcast by Buildertrend where we taught all things technology and construction. Be sure to stick around to the end of the episode, where you can find out how to be a part of the Building Code crew. Let’s get it.

Welcome, Blaise, to the podcast. First time, but I’ve known you for a long time, so I’m happy to have you here finally.

Blaise McDonald:

Thank you.

Paul Wurth:

Everything good?

Blaise McDonald:

Everything’s great.

Paul Wurth:

That’s nice.

Blaise McDonald:

It’s a beautiful, sunny day in Victoria, British Columbia.

Paul Wurth:

Well, lucky. I hate doing this on the podcast because these don’t come out at the time we’re talking, but I can’t help but mention, in Omaha, Neb., which we’re the middle of the country in the U.S., we have had three days straight of a high being a single digit, and we’re looking at about five more straight days of that. So, it’s a low time right now for us, so I’m glad that you, weather-wise, are doing well. Blaise, you’re with MAC Renovations, for anybody who doesn’t know, why don’t we start there. Can you give the listeners just sort of the top to bottom look at your company, and how you’re all set up?

Blaise McDonald:

Sure. Yeah, MAC Renovations. My dad started MAC Renovations in 1980. I’ve been fully involved in the company since about 2009. Before that, just myself and just with all my friends had dug a ditch for two for MAC Reno. So, he’s still involved. He was supposed to retire this year, but he’s got nowhere to go except the golf course. So, he’s been hanging around, and we’re busy.

Paul Wurth:

That’s great. How many people do you have now?

Blaise McDonald:

There’s … I think we’re just at 36. We do … the last three years, we’ve been around the nine to 10 million mark. We fell through a little bit last year, but not by much. I think we finished eight and a half.

Paul Wurth:

Okay. Cool. So, you …

Blaise McDonald:

Average job size is 150 to 175.

Paul Wurth:

Okay. Mainly all renovations, right? You guys don’t do new structures?

Blaise McDonald:

No, I mean, this year we opened a custom home building division just because we’ve done one or two over the last couple of years. And then, now, we’ve lined up about three or four for the next couple of years.

Paul Wurth:

If I remember right, last time I talked to you, I think we were at a trade show, which those days are gone, and hopefully back again, but did you guys buy an old, cool building where you’re at and then renovate it for your office?

Blaise McDonald:

Yeah, it was … we did what we tell all our clients not to do, we bought… It had been a restaurant for about 50, 60 years. It’s in a place called Rural Saanich, which is just outside of one of the major municipalities. I mean, Victoria, we’re in the tip of Vancouver Island, so there’s waterfront all the way around, but …

Paul Wurth:

Awesome.

Blaise McDonald:

… it’s nice in the middle.

Paul Wurth:

Cool. So, you guys bought an old restaurant and just renovated it?

Blaise McDonald:

Renovated it. We ended up tearing it to the ground and we just saved three foundation walls.

Paul Wurth:

Oh, you showed me a picture of that. There was just one thing sticking up and you’re like, yeah, that’s … it’s our renovation.

Blaise McDonald:

Yeah. Yeah. And I mean, if someone had told me that’s how it would’ve unfolded, we probably wouldn’t have done it, but I’m glad we did. And, I got a little bit more grays in my beard, a little less hair on my head because of it.

Paul Wurth:

So, you’re on Instagram, @macrenos. Have you ever posted a photo of the wall that was the one standing thing yet, on your own?

Blaise McDonald:

No, but I should because we’ve been here for about three years now.

Paul Wurth:

Why don’t you do that, and I’ll have everybody follow you and have a look out for that. So, once you listen to this, if you haven’t already, it’s a great follow on Instagram. It’s just all lowercase, all one word, @macrenos. Give Blaise and MAC Renovations a follow, and then he’s going to post that photo for you over there.

Blaise McDonald:

Yeah, we’ll do the before and after.

Paul Wurth:

Yeah, because It’s really cool. So, that’s awesome. Okay, so, you guys have about 30 plus employees. Does that mean you’re doing a lot of carpentry yourself?

Blaise McDonald:

It’s about half and half. So, there’s … we have interior designers and project managers and office staff. And then, there’s about 18 in the field, lead carpenters, apprentices and laborers. And then we sub.

Paul Wurth:

Yeah. And, how long have you been running as the Operator Owner of MAC? I know your dad was going to retire last year, but there was … was there a shift a few years ago, or …

Blaise McDonald:

Yeah, I mean, I came on in 2012. I finished a construction management degree. I came on full time as the operations manager and stepped into the president role last year.

Paul Wurth:

Okay. Because, I’m just thinking to myself, and, look, this is a series where we’re talking about 2020, and we want to go back and talk all the negative, but most of the company owners I’ve talked to that have had that size of employees, man, that’s a heavy burden to carry when something like COVID-19 hits, where it’s just so unknown. Right?

Blaise McDonald:

Well, I know, and we had a lot of … early, we were deemed an essential service, so we were allowed to keep going, but there’s a lot of social pressure to kind of shut down. No one knew what was going on and how serious that was, not that it’s not serious. And, the other thing too is, I mean, our guys are, I mean, we’re in Southern Vancouver Island rainforest. There’s a lot of rocks, there’s rodents, so we’re used to being safe. So, I mean, safety is our number one priority.

Paul Wurth:

So, you were set up well, in that respect?

Blaise McDonald:

Yeah. I mean, we did get hygiene assessments for all the jobs, and we set the guys up with hygiene kits and made it work.

Paul Wurth:

Figured it out. Yeah, I mean, and that’s another thing we were hearing in this regional podcast is, we’re an industry of, just figure it out, anyway, so the types of business owners that I know in this industry just kind of put that hat back on and kept going. Now, in Canada, you’re our first Canadian company that we’re going to talk about, were the regulations and the decisions about essential and non-essential, are they coming like they were here, state by state or providence by providence? Or, was there more of a national guideline?

Blaise McDonald:

It was set up by the province. Vancouver Island, we had zero cases for a long time.

Paul Wurth:

Oh, wow.

Blaise McDonald:

And even now, our community spread is quite low. But, as far as, I mean, it’s the same as anyway, it’s hard to have a national … And the province did a pretty good job, I think, of putting the regulations in place.

Paul Wurth:

Yeah. And, how did you keep up with that? I know the NAHB here in the United States, National Associated Home Builders, and NAREE, did a really good job of lobbying our government, but also communicating to the individual business owners like, here’s what you need to do. Here’s what you need to be looking out for. We did our PPP loan and things like that. Do you guys have the same sort of organizations there in Canada that were helping sort of give you the play-by-play?

Blaise McDonald:

Yeah, I sit on the board of directors for the Canadian Home Builders Association in Vancouver Island. And then, we’re also a member of VICA, which is the Vancouver Island Construction Association. So, they deal with more of commercial, large projects. So, as the board of directors, we were meeting once a week. And then, I was leaning on my RA. We were meeting once a week as well. And then, my business coach and a small group of contractors, we were meeting weekly.

Paul Wurth:

Oh, nice.

Blaise McDonald:

So, just trying to … At first, it was just trying to temper that stream of information that was coming at you. And I found too, as the guys were going home and listening to whatever, and they’d come back and have to pull them back together again on Monday. I mean, it was abruptly negative for us. It was … We went from March would be usually 119 leads. We went to 19 out of 30 projects and design, 22 of them went on hold, six of them canceled. It was … We were pumping the brakes hard.

Paul Wurth:

It wasn’t like, yeah, I guess we haven’t got into that. It’s like, when you are a president or an operation person who runs the entire company or an owner, we haven’t really got into, you’re also CEO of morale, you had to kind of keep everybody calm. And, you have so many different personalities inside of the construction business, you got the field people, you got the office people. Yeah, and this internet age, they’re getting information, God knows where. Right? And so, you’re having to bring back … so, did you kind of ramp up the amount of meetings you were having and things like that? Or …

Blaise McDonald:

We had a weekly meeting where we would talk to the entire field staff on Zoom. It was kind of hard, but instead of laying everybody off, we heard that they might have this, we didn’t have PPE, it was a Canadian wage subsidy. We heard that was coming, so we basically broke everybody into teams – design, production, sales, and marketing and then safety. And we set up a priority sheet, and we’d have a Zoom call for half an hour, talk about priorities, and send everybody off. And we tackled through … It was stuff like the designers didn’t want to go out into people’s houses and measure them, so what do we do? We bought a Matterport camera, and we were doing 3-D scans. That way, only one person had to go in.

Paul Wurth:

Right.

Blaise McDonald:

We got laser measures instead of tape measures for those. And then, even in the office, we switched to … We’re a 40 year old company. I mean, we’ve been using Buildertrend since 2010. I think we were talking during the break that it was October at the Chicago Remodeling Show.

Paul Wurth:

Yep, that’s right.

Blaise McDonald:

So, as long as we’ve been using Buildertrend, we don’t use it to its full potential … because we have systems that we’ve been working with for a long time. We switched to all our AP to paperless, so just all the process that you have to put in, in the backend, it’s huge. When you’re able to make that kind of change, it’s good to take advantage of it.

Paul Wurth:

Yeah, yeah. There a quote, never waste a good crisis, right, and that applies to this, more than anything, especially in construction, as you know, I’ve been at Buildertrend since the beginning, 14 years plus, and it’s like, I know, as well as anybody, the difficulty of explaining to construction companies, not only what we do in the offering, but then getting people to change habits like workflows inside of the construction industry, those are really hard to do. And, I think, one of the positives that came out of this is that, when forced, there’s no other choice. We’ve got this platform, so we better start using it.

It was funny when you were telling me that you would have Zoom calls with all of your field staff. I bet you have some stories about trying to get them up to date on Zoom and mute buttons and all kinds of stuff, I assume.

Blaise McDonald:

Well, I’ll try and get 18 carpenters to sign into a Zoom call, and …

Paul Wurth:

Right. Yeah, I can only imagine. And, there’s war stories over the place for that. So, it sounds like you went through a typical running of COVID-19 last year, which is March 15, it hits and leads stop, design stops, people cancel contracts, we put things on pause. In the U.S., from people I’ve talked to, that was typically about two months, right? Probably all of March, all of April, then May, it kind of opened up again, people felt a little confident. Was that similar to where you’re at as well?

Blaise McDonald:

Yeah. Yeah. And, if I go back and look at the leads, that’s how they started to ramp up again, too, right? Because people … I mean, it effected people so differently, right, like their income levels and our clients, the majority of our clients, aren’t negatively affected. They’ve made their money, they’re older, they have … Our property values in Victoria, British Columbia have skyrocketed over a million bucks for an average, single family dwelling. I think a realtor told me yesterday that property owners in Victoria are making 10 grand a month from their house.

Paul Wurth:

Oh, wow.

Blaise McDonald:

So, we just kind of plugged along, so instead of laying everybody off, we hit the gym. We were working on our processes, and I have to say it, we have different problems now.

Paul Wurth:

Yeah. Those aren’t going to go away, but it sounds like you spun a negative and a positive at least business process wise, right?

Blaise McDonald:

Yeah. Yeah. For sure.

Paul Wurth:

That’s great.

Blaise McDonald:

We were able to retain everybody. A couple of people were let go that probably should have been a long time ago. Yeah, now we’re just trying to find people, that’s the …

Paul Wurth:

That’s the other thing here too, is that it sounds like for you, you had mentioned kind of off cuff about your business, that you went down a little bit last year in terms of total revenue, but that was probably because of those two months and making some changes there. Do you see 2021 like everybody else, being a big boom?

Blaise McDonald:

Yeah, we’re struggling to keep up. I mean, what happened that … losing those two months, and we had a bit of a soft start to the year, just the amount of work that we pushed through the winter last year. We had a little bit of a stumble with some big contracts in January and February before COVID-19 hit, but we just didn’t have the momentum to build it back up. And, our machine, it takes a lot to slow it down, and it takes a lot to get it back up. So, usually, in the summer, we’re hiring framing crews and finishing crews. That 18 person production team grows to about 30 or 40 with all the subs. We didn’t do that this year, so we kept a lot of stuff in-house.

I was just looking at the ratios, were usually 9%, is our internal labor of our costs, and we were sitting more like 14.

Paul Wurth:

Okay.

Blaise McDonald:

So, subcontractors went down and labor went up. So, we didn’t make as much money on those projects. We kept everybody busy, and we’re able to retain the talent, which was the long haul.

Paul Wurth:

That’s awesome, and that’s such … I mean yeah, it’s like you take a personal look and it’s like, well, the company might take a hit, but this is the right thing to do for my people. That’s awesome. So, when you say labor shortage, are you talking in your area, finding subcontractors at the quality you want, or are you talking about truly hiring internal carpentry skilled labor?

Blaise McDonald:

Carpentry skilled labor, I find, is that, like we run an apprenticeship program, so we got six apprentices. I can’t hire a laborer without offering them an apprenticeship, at this point, so nobody really wants to do it, which blows me away. We have all these high unemployment numbers, and then I’m like, come here, we’ll teach you how to swing a hammer.

Paul Wurth:

Yeah. I guess I’ve always wondered that because literally everybody I talked to over the last year and a half of doing this podcast, if the topic of labor comes up, it’s like, yeah, can’t find anybody. So, do you … are you set up to train somebody like, give me anybody who’s got a good work ethic, halfway smart, and we’ll get them to where they need to be? Is that how you’re set up?

Blaise McDonald:

Yeah. Yep. Yeah, we’ve run six apprentices right now, and we invest a lot of time and money into putting a program together for them. We pay for the school, tool allowance.

Paul Wurth:

Wow. So, it is really mind boggling, if you have a low unemployment, why somebody wouldn’t want to do that? What do you think that is, just the hard work kind of thing, or …

Blaise McDonald:

I don’t know.

Paul Wurth:

Your guess is as good as mine, Paul. Jesus.

Blaise McDonald:

I don’t get it.

Paul Wurth:

That’s crazy. I don’t get that either. I mean, but again, maybe it’s just a perception thing of working in construction. But, again, if you look at it, you’re paying good money too. You can make a lot of money. You’re working with your hands, you’re indoors, you’re outdoors. There’s a ton of … Why wouldn’t a high school kid want to do this? Or …

Blaise McDonald:

I mean, we got … there’s a couple of high schools in town that they run a carpentry program, so you can spend your last year of your grade 12 or whatever in a carpentry program. You go out and you build a foundation or build garages or something. But, it’s getting front of those people and getting them in. I mean, I was ticketed at 22. Mind you, my dad is a contractor, I didn’t have a choice.

Paul Wurth:

What does ticketed mean? What does that mean?

Blaise McDonald:

Oh, so we have a red seal program in Canada, so you get your journeymen ticket after you do four years of school and 6,000 hours of training or whatever.

Paul Wurth:

Oh, got it. Okay. So, I guess … and, you sit on the board, so the organization just needs to start marketing, and also maybe business owners like you need to start thinking about marketing dollars like, hey, we need to spend some money on recruiting.

Blaise McDonald:

Oh yeah. I mean, we’ve been pumping Indeed. I think we’ve even been writing checks to Indeed for the last two years. Instagram, Facebook – we’ve even taken out ads in the local radio to try and drum up some recruits.

Paul Wurth:

Alright, we’ve got a lot of listeners. You’re in a beautiful part of Canada, right? Where are you at again?

Blaise McDonald:

Victoria, British Columbia.

Paul Wurth:

Victoria, British Columbia. If you are listening right now, you’re living in the U.S. or in Canada, hit up Blaise on Instagram, fly out, I guess you probably have to quarantine for a couple of weeks if you do that right now, but there’s worse places to quarantine than where you’re at, and go work, go work for Blaise.

Blaise McDonald:

Well, we’re looking for an operations manager, project manager, I need a draftsperson …

Paul Wurth:

Okay. I like it.

Blaise McDonald:

Carpenters, drivers …

Paul Wurth:

Calling everybody, go work for Blaise. I know he’s a great guy and a good company. So, there’s your plug right there. We’ll follow you on Instagram. It’s @macrenos. So, looking at this year, I guess, would it be safe to say, as a summary of your last year, as a business owner navigating all that information flow, keeping your team motivated, keeping people hired, surviving 2020 and 2021 is looking pretty good?

Blaise McDonald:

It’s looking pretty good. Yeah. Like I said, it’s just different problems. I was at a design meeting this morning, we have 46 projects in design, which is …

Paul Wurth:

Geez.

Blaise McDonald:

… the most we’ve ever had, at this point.

Paul Wurth:

Holy moly.

Blaise McDonald:

Yeah, I got nobody to draw them, that’s the problem.

Paul Wurth:

And are your clientele understanding of just kind of all the factors that are going into maybe not being able to start their project as soon as they’d like or get designs back as soon as they can? Do they get kind of get it?

Blaise McDonald:

Yeah, they get it. It’s … I mean, the media is all over it, too. There’s no shortage of press on it. And, if they want the best, they’ve got to wait.

Paul Wurth:

Yeah. That’s a good position to be in. Well, I know … I mean, you guys do a great job up there. I’ve known you for, gosh, it’s 10 years now. So, really appreciate you hopping on, giving us kind of a rundown of how it was up North during this time. And, I’m glad to hear you got a plethora of projects coming down the pike.

If you want to go work in a beautiful area, for a great guy and a great company, hit up Blaise on Instagram, and tell your friends about it, and give them a follow …

Blaise McDonald:

@macrenos.

Paul Wurth:

@macrenos. Hey, man, great to see you again. Hopefully, one day, we’ll catch each other, have a beer on that trade show circuit again.

Blaise McDonald:

That sounds good.

Paul Wurth:

Alright, man. Appreciate you. Talk to you later.

Blaise McDonald:

Thanks.

Paul Wurth:

Thank you again for tuning into this episode of “The Building Code.” Make sure you subscribe and like wherever you listen to podcasts. Also, head out to Facebook and join The Building Code Crew. And finally, drop me a line @podcastatbuildertrend.com. We want to hear from you, suggestions on guests or topics, anything. Thanks so much for joining and appreciate you.