Is there any business more Canadian than Tim Hortons?
In a recent TV spot, Hortons encapsulates the Canadian pitch to the world: An expatriate African prepares to welcome his wife and daughter as they arrive in Canada to join him. They meet and shed tears in the atrium of Toronto’s Pearson International Airport, where he hands her a Tim Hortons coffee and says with utmost but understated emotion, “Welcome to Canada.”
Tim Hortons’ smooth and special “all-day” coffee blend is being roasted right now in a new facility the 46-year-old restaurant firm has established in Hamilton, Ont., in an area known as the Golden Horseshoe at the southwestern extremity of Lake Ontario. This summer the company also has begun construction of a new distribution center in the dynamic university town of Kingston, Ont., located at the mouth of the St. Lawrence on the lake’s other end. That 130,000-sq.-ft. (12,077-sq.-m.) facility will employ up to 200 people, double the number that work at a smaller facility in Kingston. The location is part of Tim Hortons’ Canadian distribution network that includes centers in Guelph, Ont.; Calgary, Alberta; Debert, Nova Scotia (Truro); and Aldergrove (Langley), B.C.
The 50-job Hamilton facility, located in the Ancaster Business Park, pairs nicely with a similar roasting plant the company has operated since 2002 in Henrietta, N.Y., a suburb of Rochester. Together the two plants will take care of 75 percent of the coffee needs of a restaurant chain that, as of April 4, 2010, encompassed 3,596 system-wide restaurants, including 3,029 in Canada and 567 in the United States. Parent firm TDL Group Corp. employs over 1,800 people across its principal offices, regional offices, distribution centers and manufacturing facilities. The franchised store locations retain a staff of over 83,000 people.
“We’re especially proud to invest in Hamilton, where the Tim Hortons chain was born,” said Don Schroeder, President and CEO, Tim Hortons Inc., when the project was announced in spring 2009. “Hamilton city officials at all levels worked tirelessly to attract and secure our investment. Hamilton’s economic development team in particular helped expedite all necessary utilities and services to ensure the plant will be up and running as soon as possible.”
It was up and running pretty fast indeed, opening in November 2009.
Leading the Recovery
Hamilton itself and the Province of Ontario both ran pretty fast over the past year. So it’s no surprise the Ontario Ministry of Economic Development & Trade earns our annual Canadian Competitiveness Award for province-level economic development activity, and the City of Hamilton is among our elite set of 10 Top Canadian economic development groups. Finishing just behind Ontario was Québec, followed by Alberta and then Saskatchewan. The rankings are based on a number of tallies and per capita calculations related to major corporate facility projects tracked by Site Selection’s New Plant Database between June 2009 and May 2010.
In that number were General Motors’ investment in St. Catharine’s, GE‘s in Peterborough, semiconductor firm AMD‘s in Markham and Agfa Healthcare‘s R&D investment in Waterloo, part of the “Canada’s Technology Triangle” area including Kitchener and Cambridge. Other projects are mentioned among the citations below — half of our Top Groups are in Ontario.
The Conference Board of Canada’s provincial outlook published in May 2010 called for Ontario and B.C. to lead the nation in economic growth, followed by Saskatchewan, Alberta and Québec. “A homegrown recovery is already underway in Ontario,” it said.
Some credit for that must go to the Ontario Ministry of Economic Development & Trade, which has not only worked hard to attract new projects but to offer long-term support to such sectors as the automotive industry.
As a result of business tax cuts and the move to a harmonized sales tax, the tax on business investment in Ontario is being cut in half, says the Ministry. The government’s Open Ontario plan, parts of which passed legislative muster in May 2010, includes the following tax considerations in addition to a move toward a harmonized sales tax:
- Capital Tax was eliminated for manufacturing and resource firms on January 1, 2007, and for all other Ontario businesses on July 1, 2010.
- Also on July 1, the Corporate Income Tax rate for income from manufacturing and processing was reduced from 12 percent to 10 percent. The general corporate income tax will reach 10 percent for all sectors over the next three years. Also effective as of July 1, the corporate minimum tax rate went from 4 percent to 2.7 percent.
Among the tools that the Ministry has put to use is a new GIS site selection tool called Select Ontario. Another is the provincial government’s Green Energy Act, whose various measures, including a feed-in tariff, went into effect over the summer of 2009. That set of supports was partly responsible for a Jan. 2010 announcement by a consortium led by Samsung C&T Corp. and the Korea Electric Power Corp. (KEPCO) that they will invest $7 billion to generate 2,500 megawatts of wind and solar power in the province, tripling Ontario’s wind and solar energy output.
“The Korean consortium will also work with major partners to attract four manufacturing plants,” said the Ministry announcement. “This will lead to the creation of 1,440 manufacturing and related jobs building wind and solar technology for use in Ontario and export across North America.” In April, Ontario Premier Dalton McGuinty announced the award of some $8 billion to a host of renewable energy companies and communities, as his government seeks to create 50,000 “green jobs” while also not so gradually phasing out the province’s dependence on coal-fired power … by 2014.
The Samsung-led consortium grew stronger in early August when Siemens reached an agreement with Samsung C&T to supply as much as 600 MW of wind turbines, to be fabricated at Ontario’s first wind turbine blade manufacturing plant, expected to employ 300.
The fact that such capital investment is coming from beyond the continent is no accident. Between 1998 and 2007, foreign direct investment in Canada grew by over 128 per cent to $500.9 billion. The nation and its provinces continue to gain international favor due to their open immigration policies. A demographic report earlier this year said Canada’s population had surpassed 34 million, with a net inflow of 50,887 international migrants vs. the first quarter of 2009, and natural growth (births minus deaths) of just 37,543.
Shout It From the Rooftops: Top Groups Excel During Tough Times
When times are hard, but you’re doing well despite them, the temptation is to keep quiet about it. Add that inclination to the usual Canadian penchant for reticence, and you have a recipe for silence as complete as a northern lakefront cabin in September.
But success in a difficult environment can also be cause for more celebration than normal. So here we salute those top performers. Consistency in corporate project attraction (as tracked by Conway Data’s New Plant Database), job creation, regional partnership, proactive programming and quality data and Web resources distinguishes Site Selection’s Top Canadian Economic Development Groups of 2010, presented here in alphabetical order:
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Greater Halifax Partnership, Nova Scotia
Paul Kent, President and CEO
A spring report on 13 major metro economies from the Conference Board of Canada said that Halifax was the only one among them to post growth in real GDP in 2009. What’s more, Halifax “will post a further gain of 2.5 per cent in 2010, thanks to stronger manufacturing output and broad-based growth in the services sector.”
Among the projects in the area over the past year were expansions from chemical firm General Liquids Canada in Bedford; Scanwood Canada, DORA Contruction and insurer RSA Canada in Dartmouth; and Internetworking Atlantic and Seaboard/Harmac Transportation in Halifax proper. The Halifax Gateway Council just published a strategy to make the area the go-to point of entry on the East Coast of North America. The Council says the Gateway has a total economic impact of over $3 billion a year, employing over 23,500 people in Nova Scotia. The Port of Halifax alone creates over 11,000 jobs and $1.5 billion in economic impact.
The public-private Partnership is also involved on the city’s behalf in the Canada International Work Group, a coalition of the nation’s largest cities that operates on the premise that urban areas are the straw that stirs the drink when it comes to economic development and international investment attraction.
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City of Hamilton – Economic Development & Real Estate Division
Neil Everson, Director
Action at the Hamilton Port Authority is picking up. So is activity among Hamilton’s small business sector, which added more than 1,100 jobs over the past year. A 113-percent increase in industrial permits in 2009 equates to approximately $115 million in investment. The Division found through its “Hamilton Calling” program that 402 of 616 companies surveyed to date plan to expand in the next three years, with total planned investment of more than $881 million. Meantime, the city learned in November 2009 that the Greater Golden Horseshoe and its 17 cities will host the 2015 PanAm and ParaPanAm Games.
In addition to streamlining the development/permitting process, the Division also launched a new online payment and incentives system for those investing in downtown and other business improvement areas. Among the corporate project highlights of the past year were the restart of two former U.S. steel Canada mills by German firm Max Aicher; and what will be Canada’s largest bakery from Canada Bread, which is adding 300 jobs to its pre-existing Hamilton payroll of 340 at its Fresh Bakery and Olivieri pasta facilities.
“Canada Bread was a real home run,” says Neil Everson. “Every municipality in Ontario was ‘courting’ this $100-million investment and Hamilton was selected.” The three-year-old “Hamilton Calling” program also continues to pay dividends. Asked to name the top lessons learned thus far, Everson says, “One, that that 80 percent of our calls result in significant follow-up activities by staff. Two, that companies appreciate and need a ‘conduit’ into the municipality. And three, it demonstrates value for their tax dollars to the business community.”
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London Economic Development Corporation
Peter White, President and CEO
The London area saw 1,610 new jobs created between June 1, 2009, and May 31, 2010, associated with more than $224 million in corporate investment, including major projects from Magee Rieter Automotive, Hanwha, Kongsberg and London Drive Systems.
LEDC has launched industry-specific Web sites for renewable technologies, medical devices and its materials center of excellence. It’s overseen the creation of the 125-acre (51-hectare) Advanced Manufacturing and Research Technology Industrial Park in concert with the University of Western Ontario, the City of London and Fanshawe College. And it’s led an effort to create The Ontario Water Validation Facility, making London the leading site for industrial water treatment technology commercialization, validation and testing in Canada (again in partnership with the city and UWO.)
Partnership is the order of the day with LEDC, which also spearheaded the building of a new cargo terminal at London International Airport, just designated a duty free zone. The start of the cargo village dovetails nicely with the opening of Fanshawe’s new $32-million Center for Applied Transportation Technologies, which will accommodate up to 1,500 full-time students.
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City of Mississauga Economic Development Office
Larry Petovello, Ec.D., Director of Economic Development
A perennial top performer, Mississauga saw nearly 3,900 jobs created during the time period examined. Those jobs were created by companies such as AVW Telav Audio Visual Solutions, Microbix Biosystems, Baxter Corp., Navarre and YRC Logistics. Bell expanded by some 350,000 sq. ft. (32,515 sq. m.) moving 1,500 jobs from nearby Toronto in the process.
In addition to its usual suite of site selection and business retention tools (such as a new corporate call program), the city’s economic development office has developed a new Information Planning Research Unit on its Web site, and has compiled a business directory that also focuses on its four clusters of bioscience and pharma, ICT, finance, insurance and real estate; and aerospace and automotive. The team also participated in a recent business mission to China led by longtime Mayor Hazel McCallion.
The city in October 2009 received an award from the Ontario Professional Planners Institute for its “Our Future Mississauga Community Engagement” initiative, and the highest award from the Government Finance Officers Association of the United States and Canada, for its 2009 budget presentation.
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Montréal International
Jacques St-Laurent, President and CEO
Morguard Investments’ August acquisition of Place Innovation, an office complex that is part of the city’s famous Technoparc, speaks to the continuing attractiveness of the Montréal marketplace for corporate site seekers as well as real estate investors.
The metro saw high-tech digital projects arrive from software firm THQ and Warner Bros. Interactive Entertainment. It also saw new facility growth from Bitumar, and new headquarters projects from Bristol-Myers Squibb Canada and provincial powerhouse Hydro-Québec International.
In Laval, the projects came from Plastibec and Corealis Pharma, and even included a distribution warehouse from another pride of the province, Cirque du Soleil. In August, Liebherr Group announced a new $9-million, 35-job expansion project to accommodate work on Bombardier landing gear.
Montréal International recently noted the metro area’s leading national position in regaining jobs lost during the recession. And recent analysis by IBM-PLI consistently placed Montréal in the upper quadrant (sometimes alone) in multiple industry sectors when it comes to a combination of affordability and quality operating environment.
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PÔLE Québec Chaudière-Appalaches
Carl Viel, CEO
Led by Denis Gosselin, vice president, promotion and foreign investment prospecting, the POLE Québec team continues to cultivate a surge of corporate growth in the vibrant Québec City metro area of 1 million people.
Projects have come from shipbuilder Davie Québec and office furniture maker Teknion Roy & Breton in Levis; Royal Nickel Corp. in Thetford Mines; and from Telus and insurance firms Assurance La Capitale and SSQ Groupe Financier in Québec City proper. As in other leading cities, this group was proactive during the recession, taking the opportunity to communicate better with its strong stable of existing employers. Among the results of those conversations is growth from such firms as Victhom Human Bionics and GlaxoSmithKline.
As the team continues to focus on its core target clusters of insurance, energy efficiency, cosmeceuticals and optics/photonics, it’s also broadened its reach to international water-related organizations and companies. It’s reached out to regional allies, creating Biopolis Québec in partnership with Montréal InVivo and Sherbrooke Innopole. And in keeping with the city’s reputation for start-up friendliness, the Beauce School of Entrepreneurship will be opening in September 2010.
PÔLE’s efforts on behalf of multinationals include help recruiting foreign talent. PÔLE created www.1888mevoila.com to serve as an interactive platform where employers and foreign workers can get in touch, apply for available jobs or communicate with international mobility specialists in order to facilitate the immigration process.
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Sarnia-Lambton Economic Partnership
George Mallay, General Manager
Projects from such companies as solar panel maker First Solar, American Railcar and fiberglass pipe maker Ershigs highlight Sarnia’s year, and the momentum continues: 414 building permits had been issued this year as of July 1, compared to 388 during the first six months of 2009. The value invested in those projects came to $42.4 million, up from $34.4 million in 2009. Then another $15.4 million worth of projects got permits in July.
The petrochemical industry continues to be the area’s backbone, including new facility projects from H.P. Starck and Woodland Biofuels. A June report from H. James Lee and Associates says the industry contributes $24 billion annually in materials and services to the local economy, and is responsible for 4,900 direct jobs, 23,500 indirect jobs and $400 million a year in capital investment. The Partnership also recently issued reports on the region’s manufacturing, machine shop and engineering inventory and capabilities.
The Partnership continues to pursue a leadership position in the cleantech sector, touting projects already in the ethanol, fuel cell and solar industries, among others.
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City of Toronto
Michael H. Williams, General Manager, Economic Development & Culture
www.toronto.ca/business_resources
Working with the just-launched arm’s-length agency Invest Toronto, as well as the Greater Toronto Marketing Alliance, Build Toronto and other groups, this city department serves as a strong starting point for site selectors. Greater Toronto itself, meanwhile, has served as a strong investment magnet, providing corporations just the right blend of stability and dynamism before, during and after the recession.
Among the Toronto team’s big successes over the past year were the $429-million, 800-job project from video game developer Ubisoft; a new terminal from upstart Porter Airlines; office projects from Thomson Reuters and Laurentian Bank, and transportation-sector investments from UPS, Thales Rail Signalling Solutions and CN. ICT continues to be a strength of the metro area, as does film and TV production work.
Greater Toronto boasts 2.6 million people, with a quarter of Canada’s population located within 100 miles (160 km.). In the aforementioned study completed by IBM-PLI for Foreign Affairs and International Trade Canada (DFAIT), Toronto too was among the elite few scoring well in its combination of cost and favorable operating environment, placing especially high in financial services, medical devices and pharmaceuticals.
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Vancouver Economic Development Commission
Lee Malleau, CEO
In a move combining the past two Olympic Games venues, VEDC in September will take part in a trade mission to China to promote its green building, digital media and clean technology sectors. Its companies make that an easy job, as they continue to grow in what is widely acclaimed as one of the world’s most enviable places to live.
Among the projects and leads generated by the city’s Olympic business program is the location of a business incubator by Silicon Valley firm Plug and Play. Other projects include new downtown studios from Pixar/Disney and Digital Domain; and metro-area projects from HSBC and Dorel in Burnaby, Brewers Distributors in Port Coquitlam and Richards Packaging in Richmond. VEDC continues to advocate for a regional approach to economic development.
In July, the Vancouver City Council approved the greenest building policy in North America, requiring all new building rezonings to satisfy LEED-Gold standards as of Jan. 31, 2011. The city continues to work with partners to prepare infrastructure for electric vehicles. And VEDC has launched www.talkgreentous.ca to invite the public to play a part in its aim to be “the greenest city in the world” by 2020.
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Economic Development Winnipeg Inc.
Marina James, President and CEO
www.destinationwinnipeg.ca
Destination Winnipeg is now evolving into Economic Development Winnipeg Inc., which will have two divisions, one focused on economic development and the other focused on tourism. Thus this team wins points right off for its courage to change.
Among other attributes, Winnipeg is home to Canada’s first foreign trade zone, CentrePort, a 20,000-acre (8,094-hectare) area which is also a tax-increment-financing zone. It is currently home to 135 firms, and will be helped by $300 million in infrastructure improvements announced in June.
Winnipeg consistently scores as a low-cost leader in multiple industry sectors. Among those pursuing projects in the area is Magellan Aerospace (a $120-million project helped by a $20-million, repayable interest-bearing provincial loan). Other corporate facility investors include Monsanto Canada, Burnbrae Farms and Metal-Tech Industries.
During the first quarter of 2010, Winnipeg saw building permits approved valued at more than $240 million, a 45-percent jump from the previous year’s first quarter.
* All dollar amounts are expressed in Canadian dollars. At press time, the exchange rate was CA$1 = US$0.959149.