Case Study: Toronto Propane Explosion, BDC Challenges & Solutions

This case study analyzes two key incidents: the Toronto Propane Explosion and the financial challenges faced by the Business Development Bank of Canada (BDC). The Toronto Propane Explosion case examines the causes of the explosion at the Sunrise Propane Industrial Gases facility, the role of the Technical Standards and Safety Authority (TSSA), and the resulting legal and public relations issues. The BDC case focuses on the financial crisis faced by Jean-René Halde, the CEO of BDC, and explores the key issues, stakeholders, uncertainties, and potential strategies for navigating the crisis, including considerations of corporate culture and incentive systems. The assignment provides a comprehensive analysis of the problems, potential solutions, and strategic recommendations for both cases, offering valuable insights into business development, crisis management, and financial planning.

Running head: CASE 1 AND 2 1
Case 1 and 2
Name
Professor
Course
Date

CASE 1 AND 2 2
Case 1
Managing the Toronto Propane Explosion
Summary of the case
The Toronto Propane Explosion took place at the Sunrise propane Industrial gases. The
company sold propane and other gases. First choice Inc. sued it for forging a document to avoid
paying their debt. The incident involved explosions and fireballs that killed and injured people
and damaged offices and nearby homes (Armenakis, & Nirupama, 2011). Toronto Star reported
that an illegal tank-to-tank transfer and hose leak of gas caused the explosion. Sunrise later
apologized for the deaths, but TSSA gave a notice to revoke its authorization immediately.
The problem and why the TSSA became the culprit
The problem was that Sunrise engaged in illegal tank-to-tank transfer that caused the
series of explosions. TSSA had barred it from performing those transfers as it did not have the
right license. TSSA became the culprit as it is responsible for regulating fuel safety, but it failed
to inspect Sunrise frequently to identify and stop the illegal practice.
Why TSSA became the target of media and public opinion
TSSA showed contradictions in its statements as it said that since Sunrise opened, it
inspected it once in 2005. It contradicted itself by also saying that it issued to stop work orders to
Sunrise in 2006 and 2007 due to safety violations. This drew media and public opinion as they
blamed it for the explosions, which led to deaths and neighborhood families were evacuated
(Armenakis, & Nirupama, 2011). It also did not restrict sunrise from building the hazardous
propane facility in a residential area.

CASE 1 AND 2 3
Advice to the minister
I would advise the minister to order propane facilities to be moved from residential areas.
The minister should also ensure TSSA inspects all the employees working in the propane facility
to ensure they have the required knowledge and skills. The minister should also ensure the
propane facilities only engage in activities they are licensed.
Case 2
Key issues facing Halde
Halde was facing financial crisis issues as BDC had a meltdown. As the CEO and
president of BDC, he knew that BDC would face problems with access to funding as it had lost
its investors. Some of its investors also demanded higher profits to compensate for the risk of
asset-backed commercial paper (ABCP) users who could not pay back their short term
obligations (Boothe, & Jacobs-Haijan, 2014).
Whose interests Halde needs to consider as he develops his plan
Halde needs to consider the interests of the board of directors that govern BDC. He also
needs to consider the interests of the government-appointed board and the management team that
oversaw its daily operations and executes its business strategies such as developing the new
business line (Boothe, & Jacobs-Haijan, 2014). He needs to consider the interests of the minister
of finance and industry as they have to approve the plan.
What I would do if I were in Halde position

CASE 1 AND 2 4
I would engage in aggressive measures to deal with ABCP users who failed to pay their
short term dues. I would also use the capital injection from the government to finance the new
business line.
Uncertainties that Mr. Halde face and how he can improve his information base
Halde is uncertain if he will get back the lost investors to fund the new business that
requires large capital investment. He is also uncertain if the government will continue funding
BDC if it continues making losses. He is uncertain if the new business will get financial support
from the government and if it will be approved by the ministers. He is also uncertain if the new
business will sustain itself if the financial crisis facing the country will continue. He can improve
his information base by seeking views of potential investors and advice from successful crown
corporations.
Role of corporate culture and incentive system in internal acceptance of the new
endeavor
Corporate culture will allow training to workers of BDC and ensure effective
communication during implementation of the new business line to allow employees to accept the
change (Boothe, & Jacobs-Haijan, 2014). Incentive systems will motivate the company’s internal
stakeholders such as the investors through monetary rewards such as increasing their profits and
reduction of risks to make them accept the new endeavor and maintain them.

CASE 1 AND 2 5
References
Armenakis, C., & Nirupama, N. (2011). Vulnerability assessment using GIS: Toronto propane
explosion. In proceedings CRHNet Symposium, Edmonton Nov.
Boothe, P., & Jacobs-Haijan, A. (2014). Business Developmet Bank of Canada. Ivey Publishing.