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Thursday, November 27, 2014


Prior to the global financial crisis, U.S. and Canadian businesses were investing at a breakneck pace in order to keep up with frenzied global activity. Consumers everywhere were overspending, housing markets were hot, and business the world over tried to keep up with what became ultimately unsustainable. When the bubble burst, it left companies with a massive surplus of capacity that was going to take a long time to get used up. Investment and building in the boat industry almost completely shut down. The few yachts that did get built were to order ... and not on speculation of selling. Growth in the economy has for the most part been serviced by existing industrial capacity.

This investment growth trend has languished for many years and has become the accepted normal. It’s time to wake up!

For the past four years, modest economic growth has slowly but surely used up excess capacity in the USA and it’s filtering up to Canada. The total capacity utilization rate is just 1% below the all time previous peak and it’s rising. Capacity has almost escalated to pre-recession levels, without the uncontrolled frenzied pace of pre crisis activity. Numerous indicators show that investment needs to rise to build new capacity.

The irony of the situation is very strange. Here we have Crates Keswick going into receivership with a mountain of debt right on the threshold of an economic boom in North America. The US economy is on a full tilt roll now. The stock market has lead out to all time highs and the S&P still looks like a raging bull, housing has bounced back, unemployment is way down and new jobs are being created at an extremely healthy pace. The old saying that when the US sneezes Canada gets a cold also works in reverse. US consumers are spending again, fiscal stimulus has ended, money is cheap, the GDP is on fire and Canada has much to gain from their neighbour to the south.

Quality brand name yacht manufacturers in the US are pretty much selling everything that they can produce, as quickly as they can produce it. It’s time for the Canadian marine industry to catch the wave or we will find others who will fill the void in our own country. For marina operators this is the time to buy - not sell. The fate of the Crates Marine enterprises will create opportunity for some lucky marina operators, who will look back at 2014 as the ultimate play to lock in low interest capital investment that will provide handsome returns where in Canada we will once again see our economy come up to full steam in the next two years. It’s coming sooner than you may think because it’s a tsunami heading north from the US. Our problem in Canada is, we are standing around waiting for others to make a move – sometimes petrified by what hurt us in the past. Some smart operators will make a killing picking up the spoils of Crates from the Receiver. In six or eight years time, few will remember the 84 year history of Crates and life will have moved on to a new normal with the marina full of brand new shiny yachts with happy owners having cocktails on the bridge.

Posted by at 3:43 PM

Monday, November 24, 2014


The iconic Crates Marina on Lake Simcoe in Keswick has gone into receivership as of Friday November 21st, 2014. Apparently they owed creditors $28M dollars. It affects all of their marinas except for the Belleville operation. NOTE that Crates Lake Country Boats is not associated with Crates Keswick and it has different owners.

So Crates Keswick has been on the marine scene forever, with a presence on Lake Simcoe (Lagoon City, Willow Beach & Keswick), Lake Ontario (Belleville & Port Credit) and Georgian Bay (Port McNicoll). No doubt a receiver will run the marina operations in a fashion that will stop the bleeding until the assets can be sold. And no doubt some other marinas will benefit as boaters at Crates properties look for options. But overall it’s a black eye for the marine industry in Ontario and of course there will be lots of pain for various private and public creditors that stand to loose much of their hard earned money that will vaporize, as the business winds down.

It’s sad to see and this is confirmation that it has been a tough slog for marina operators over the last eight years. Five years post recession the industry is tapped out ... while ironically it is at the cusp of a recovery that is working it’s way up from the US and via confidence in the economy. Those marina operators that are prudent and efficient and have held their prices through excellent customer service are the ones that are left standing to carry forward. It’s a lesson that we can all learn from, as we have seen this picture before. It’s easy to forget, that when a recession technically ends there can be a long slow recovery process that follows that is far more brutal on many small businesses than the recession itself. It’s a slow but insidious erosion that creeps in and tips the scales at some point beyond recovery. The ones that fail simply can’t wait it out any longer, even though better times are just around the corner. Failure creates opportunity for more efficient competitors and bottom feeders who bide their time looking for opportunities when they arise. Our hope is that some capable and efficient operators will pick up these properties and life will move on. Unfortunately there will no doubt be a few years of turmoil for the business ... and the boaters that call Crates their second home.

Posted by at 1:04 PM

Monday, November 17, 2014


Did you know that super yacht crews have their own film festival every year where they feature films they have submitted to various categories. Basically it’s a chance for the crews to have some fun and show off their skills as film makers. The winners get academy award trophies that are fish sculptures. Some videos are funny and some are serious, but most films have a window into the life of those that serve others on these mega yachts and make life, dining and travel look simple for the owners and guests aboard these floating palaces. One thing is for sure the job of crew is not glamorous - it’s mostly hard work with some interesting destinations along the way. Here are a few of their festival videos.




Posted by at 1:57 PM