Critical Sectors Serve Ontario Well

The province's primary drivers continue to be the automotive, information and communications technology (ICT), biotech and customer contact center sectors. They have helped the creation of more than one million jobs since 1995.
        Ontario, producing 2,556,673 light vehicles in 2002, is second to Michigan in production among states and provinces in North America. Employing more than 140,000 in this sector, Ontario is home to 14 vehicle plants and more than 400 auto parts manufacturing facilities. Proximity to U.S. markets, high productivity and lower labor costs are primary drivers of the industry, says Troy Machan, automotive investment sales consultant with the Ontario Ministry of Enterprise, Opportunity and Innovation. Machan also cites a study by the World Competitiveness Yearbook which indicates Canada has more qualified engineers than the U.S.
        Machan says another advantage is that Ontario has a lower combined corporate tax rate than any U.S. auto manufacturing jurisdiction. This rate, currently at 36.6 percent, will decrease to 30.1 percent by 2006.
        Information and communication technology industries is the fastest growing sector in Ontario, now comprising more than 7 percent of the province's economy. Cluster development in the Toronto metro area, Ottawa and Waterloo has helped push this sector to employ more than 308,000 at more than 6,000 companies.
        Ontario, with 38.4 percent of Canada's population, is home to 51 percent of the country's call center firms with a heavy concentration in the Toronto metro area. Call centers began disco vering Ontario about a dozen years ago, says Brian Villeneuve, senior business consultant, call centers, for the Ontario Ministry of Enterprise, Opportunity & Innovation.
        "Call centers concentrated around Toronto, primarily because of the many corporate headquarters," Villeneuve says. "During the last four years, call centers have spread out from Toronto as the rest of the province has been discovered by American companies in need of expansion capacity."
        Plentiful, well-educated labor is the main draw to Canada, Villeneuve says, aided by a relatively low turnover rate at call centers. He says most new call center locations involve outsourcers with an international focus and operations around the world. And while call center outsourcers tend to look to Asia these days, there is also a trend for U.S. firms to look at "near-shore" locations like Ontario.
        "Proximity is important to CEOs of some companies who want to be able to fly in for a visit to ensure calls are being answered in the name of their customers," Villeneuve says.
        With at least 3,000 centers and more than 150,000 employees, the industry is now clustering in cities like Sault Ste. Marie. Outsourcing firm The Sutherland Group of Rochester, N.Y., employs 350 at its recently opened facility and plans to grow to between 600 and 700 employees by late next spring. Sutherland is the fourth major call center firm to locate in the city in the last three years.