Ontario East Economic Development Commission on Parliament Hill TUESDAY, MAY 3, 2016
2 Introduction The Ontario East Economic Development Commission promotes Eastern Ontario as a centre for investment and business growth. It is a vast region approximately 46,200 km² and is bounded by Port Hope in the west, Cornwall in the east, and Deep River in the north. The region is defined as the Counties of: Kawartha Lakes, Haliburton, Nipissing, Peterborough, Northumberland, Hastings, Prince Edward, Lennox & Addington, Frontenac, Renfrew, Lanark, Leeds & Grenville, Prescott & Russell, and Stormont, Dundas & Glengarry. The City of Ottawa is not included. The more than 125 members of OEEDC are economic development professionals and business leaders working co-operatively to promote growth and employment in the region. Established in 1988, OEEDC has developed strong relationships with both Ottawa and Queen s Park to ensure that activities align with priorities and are supported by all levels of government for the benefit of our communities, Ontario, and Canada. Ontario East Economic Development Commission 945 Princess Street Kingston ON K7L 3N6 Bonnie O Neill Executive Director bonnie@ontarioeast.ca www.ontarioeast.ca 613.634.8569 1.866.641.3278
Why We re on the Hill First, OEEDC would like to share with you what we are doing to develop our region s economy. It s a very different approach than just a few years ago, and it s producing some great results. We think other communities might benefit from our experience. This information might also be useful to the federal Government as it considers how to structure the various stimulus and investment programs identified in the Budget. Second, we could be a really good partner for you in administering some of these programs in Eastern Ontario. The OEEDC Model The economy continues to undergo massive and rapid change. Globalization, new trading patterns and capital flows, advanced manufacturing, green technologies, private-public partnerships, e-commerce, the internet of everything just to name a few of the trends are transforming the old way of doing business. The traditional acquisition growth strategy trying to attract large employers to the region can no longer be counted on to drive economic development. OEEDC is focused instead on an organic growth strategy. This new approach strives to build internal capacity by nurturing and empowering local businesses and entrepreneurs. With this shift in focus, OEEDC has been able to turn challenges into opportunities. What were considered structural deficits under the old economic model Eastern Ontario's preponderance of small businesses, for example, or its rural base become competitive advantages when new enabling technologies are harnessed. This doesn t mean we give up on attracting major investors from outside the region. But the more successful and sustainable strategy is, and will be, supporting the formation and expansion of SMEs within the region. 3
How We Succeed OEEDC has evolved its organizational model. In order to foster the formation of new businesses and the growth of existing SMEs, we recognized that we had to work in new ways across the entire region. Today, OEEDC is a membership-based organization. Its more than 125 members represent all the communities in Eastern Ontario and, much like shareholders, drive its direction. It is governed by a board of directors and staffed by a small management team. The defining characteristics of OEEDC are partnership, collaboration, and collective action. It is a grassroots organization, distributed across the region, yet highly networked and dedicated to common goals. It is structured to succeed because everyone shares in its success. This is the economic development delivery model best suited to today s business environment a lean, nimble, and highly adaptive organization that can thrive in the face of rapid change. For federal programs, OEEDC is also a powerful potential delivery agency. It connects directly into the communities, harnesses the synergies of coordinated action, and ensures that local needs are being met effectively and efficiently. Identifying the Challenges Some of the identified challenges in Eastern Ontario: Using extensive research and analysis, and the market intelligence provided by our members, we start with a solid understanding of the region's economic assets and structural deficits. 4 The majority of businesses (95%) are small and medium-size enterprises There is some cluster formation, but most sectoral activity is broadly distributed There is a large rural base The population is older (45% are 50+) and expanding only slowly (1.1% over last 5 years) Younger residents are migrating to cities outside the region There is a mismatch between new job requirements and existing skills
Creating Opportunities Next, we develop strategies and programs to address these structural deficits and turn challenges into opportunities. This typically involves supporting entrepreneurs and businesses in building critical capacity. Our members work together in Sector Teams where there are shared interests in specific economic development activities. And OEEDC partners with other organizations in the region to leverage resources and advance common goals. We have made significant progress through these collaborative efforts. Some of the major capacity-building initiatives have included: EORN Magnet A powerful online technology that connects job seekers to employment opportunities. Founded by Ryerson University and the Ontario Chamber of Commerce, Magnet will help address the challenges of retaining more young people in the region and better matching education/training to the workforce needs of employers. Ontario Agri-Food Venture Centre Leveraging the agricultural strengths of the region, the OAFVC is a small-batch facility that helps farmers, start-ups and small companies in developing recipes and testing the processing/ packaging of new food products. A $170-million project, built with the support of federal, provincial, municipal and private sector partners, that now provides high-speed internet access throughout Eastern Ontario. This vital network gives entrepreneurs and businesses the speed and bandwidth they need to be competitive. Immigrant Program A program designed to attract new Canadians to Eastern Ontario helps us address the challenges of an older and slower-growth population. It also fosters diversity, a competitive advantage in today's global economy. Supply Chain Development To encourage the growth of clusters, local supply chains and a more interconnected SME network, we map and provide business directory information on key sectors. 5
Priority Sectors While Ontario East has a diversified mix of industries, several sectors are outperforming because of their specialization, sophisticated technologies, advantages of location, or a combination of these factors. OEEDC and its partners have targeted these sectors as priorities for investment. Clean Technology In just ten years, the province has become a North American leader in clean technology. In Eastern Ontario, companies are operating at commercial scale in the areas of solar energy, wastewater treatment, biomaterials, hydroelectric systems, energy storage, and green building products and services. Advanced Manufacturing Eastern Ontario has significant strengths in advanced manufacturing. Leading companies are focusing on high-skill, high-value production using next-generation technologies such as 3-D printing, advanced robotics, nanotechnology, and new composite materials processing. Manufacturing employs about 47,000 people the third largest industry employer in Eastern Ontario. The region s post-secondary institutions provide over 300 programs in engineering, math, science, and the trades, preparing an emerging workforce of 15,000 students for these knowledge jobs of the future. Nearly 21,000 students are enrolled in energy, environment and related disciplines at the region s universities and colleges. Agri-Food and Food Processing Ontario East is the second largest agri-food cluster in the province. Just over 18,500 people are employed in the sector which is concentrated in the western part of the region (Peterborough, Northumberland, and Quinte area). A robust supply chain has developed from production to processing to distribution putting the sector in a strong position to capitalize on food product trends. There is a flourishing base of SMEs as well as a number of global food companies operating in the region, including Weetabix, Kellogg s, Parmalat, Saputo, Pepsi-Quaker Oats, George Weston and others. Nearly 21,000 students are enrolled in agri-food programs at universities and colleges. 6
Aerospace and Defense Ontario East sits at the heart of Canada s aerospace industry, the fifth largest in the world. The sector's expertise extends to space robotics, satellites, sensors and digital imaging technology. The strength of this sector is considerably enhanced by the location of three Canadian Forces Bases (Trenton, Kingston, Petawawa), two regional airports (Peterborough and Kingston), and world-class training and education programs. The industry employs about 28,000, concentrated in clusters around Peterborough, the Bay of Quinte and Arnprior. Nuclear Energy Nuclear refurbishment at Darlington will contribute $15 billion to Ontario s gross domestic product (GDP) throughout the project and create up to 11,800 jobs annually. The refurbishment of all four units is expected to involve about 30 million hours of work over 10 years, with more than 180 companies employing thousands of highly skilled workers. Distribution/ Logistics Ontario East is located in close proximity to Toronto, Montreal, Ottawa and major northern U.S. centres. A market of more than 50 million people are within 800 kilometres. Multi-lane highways, three bridges to the U.S., rail, international and regional airports, and deep water seaports make Ontario East an ideal distribution and logistics centre. Eastern Ontario by the Numbers 46,200 square kilometres 1,144,300 population (excluding City of Ottawa) 1.1% population growth rate over last 5 years 45% of residents are 50 and older 95,570 businesses in the region, predominantly SMEs 435,366 people employed, projected to increase to 453,941 by 2022 $40,500 average employee earnings 11 post-secondary institutions, 22 campuses 7
OEEDC Proposes. 1. CLEANTECH FUNDING In Eastern Ontario, we have a thriving clean technology sector with numerous companies engaged in solar energy, wastewater treatment, biomaterials, hydroelectric systems, energy storage, and green building products and services. OEEDC has the capacity and expertise to undertake a pilot program designed to accelerate innovation and commercialize clean energy technologies. As a regional economic development agency, we would be the ideal partner in researching and developing a new federal program that could then be rolled out nationally. 2. SUPPORTING INNOVATION IN AGRI-FOOD INVESTMENT OEEDC is breaking new ground in economic development by modernizing the tools used in investment analysis. In partnership with Carleton University, we are initiating a 3-D asset mapping program of our agri-food sector. This tool will make the site selection process come alive. With the click of a mouse, prospective investors will be able to see in 3-D the physical assets buildings, farms, processing plants that make up of the supply chain in a selected community. The technology is so advanced that investors will even be able to hover over an asset and examine its structure in depth. As we move forward we believe this to be a true opportunity for the Agricultural Adaptation Council to partner in piloting this program and helping to expand it to other target investment sectors in the region. 3. ADMINISTERING AN EASTERN ONTARIO REGIONAL PROJECT FUND We are proposing that OEEDC administer a regional project fund to ensure it supports projects which are truly regional in scope. This approach avoids the challenges inherent in individual communities vying for funding. OEEDC is a membership-based organization representing all the communities of Eastern Ontario. We are therefore uniquely qualified to coordinate regional funding so that resources are applied most efficiently and effectively on a regional basis. This eliminates duplication and overlap and allocates funding to the highest priorities. For more information about Eastern Ontario, the other important sectors of its economy, and the work of OEEDC, please visit www.ontarioeast.ca