For years, there has been a struggle in the United States between forces that view environmental protection as a costly liability, and those who see environmentalism as a business opportunity. In Ontario, the prevailing view is that green is the way of the future, and the welcome mat has been rolled out for companies ready to profit and create jobs related to environmentalism and other forward-thinking technologies.
That's what the new Next Generation of Jobs Fund is all about. Launched in March, the $1.15 billion fund is there to help companies with a mission of helping the environment, by doing such things as reducing pollution, saving energy, or making transportation more efficient. "We will produce the next wave of clean technologies that create jobs and clean up the environment," says Premier Dalton McGuinty, making it clear that the government views these types of projects as the key to a prosperous tomorrow. "We're stepping up because Ontario is not going to let others steal our future out from under us."
Says Minister of Research and Innovation John Wilkinson, "this fund is about building on our strengths to ensure Ontario can compete and win in the global economy, and create a better standard of living for Ontario families."
What kinds of investments qualify for support from the new fund? Research, development, and commercialization of clean fuels is one possibility, along with other green automotive initiatives. The fund will support environmental technologies and clean industries, too. Development of this sort already under way in Ontario includes the new $120 million Suncor Energy ethanol plant in Sarnia, and the pair of Greenfield Ethanol plants in Ontario. Green Ontario activities also include the work of DuPont, which has been developing materials and manufacturing technologies for fuel cells since the late 1990s in Kingston. Ontario-based Greencore Composites is working on a high-performance composite material reinforced by natural fibers - it could find its way into cars, furniture and industrial equipment, among other things.
And because the initiative is called the Next Generation of Jobs Fund, it goes beyond environmental projects to also include other emerging industries that have high international growth potential. Advanced health technologies, pharmaceuticals, and biotech are among the possibilities - past Ontario innovations in these areas include insulin, the artificial kidney, the pacemaker and the discovery of genes linked to such conditions as breast cancer and Alzheimer's disease. In fact, one of the first projects supported by the fund is a $101.5 million expansion by the global pharmaceutical company Sanofi Pasteur. The province is chipping in to support research on new vaccines.
Digital media and information and communication technologies are also promising sectors targeted by the new fund - if you're one of the millions of people whose work lives depend upon a Blackberry device, you can thank Ontario-based innovation. Investments in financial services qualify, as do investments that promise to anchor the development of promising industry clusters.
The Next Generation of Jobs Fund is just one way that Ontario is encouraging the attraction and growth of industry, but there are plenty of other ways the province is lending a hand. Consider the case of Pack-Smart Inc., an Ontario-based company that has been creating innovations in the packaging business. Its new technology helps customers cut processing times, save raw materials and make use of more eco-friendly plastics and adhesives, all the while creating a better-looking package.
Pack-Smart is a small company, with about 25 employees, but is planning a $7.9 million expansion that promises to bring the work force to about 100. Supporting the project is $790,000 in provincial loans through the Advanced Manufacturing Investment Strategy. "Here's a company with innovative people and products," says Sandra Pupatello, Ontario's minister of economic development and trade. "That's a winning combination that puts Ontario ahead in world markets and creates good jobs at home. Our government wants to do everything it can to help companies like this succeed."
In March, as part of the Advanced Manufacturing Investment Strategy, Ontario lowered the thresholds needed to qualify for this kind of loan to $10 million invested and 50 jobs created or retained. The previous thresholds were 100 jobs and an investment of $25 million. In addition, what was a loan supporting 10 percent of a project grew to an offer to support as much as 30 percent. And it's not just any loan - it's interest-free for five years.
Clearly, Ontario believes strongly in the promise of advanced manufacturing, a great antidote to the problem of lower-end manufacturing jobs moving overseas. The province's economy benefits greatly from manufacturing - it has 1.1 million workers involved in manufacturing, more than any North American jurisdiction other than California.
A lot of those workers are part of the province's auto industry. Though some may still not be aware, Ontario is the new Detroit - it's in its fourth year as the jurisdiction making the most motor vehicles, according to Pupatello, having surpassed Michigan. Since 2004, the province has helped engineer some $7 billion in investments in automotive manufacturing. Part of the plan was the creation of the Automotive Centre of Excellence at the University of Ontario Institute of Technology in Oshawa, a project intended to link auto suppliers and university assets in such areas as automotive engineering, design, and innovation.
A billion-dollar investment followed later that year, with Toyota bringing Ontario's first new assembly plant in more than a decade, promising 1,300 jobs in Woodstock. In 2006, Linamar Corp. announced a $1.1 billion advanced manufacturing technology center creating up to 3,000 high-paying jobs. And Ford also unveiled a billion-dollar project in 2006, its "Centennial Project" for assembling the Ford Edge and Lincoln MKX crossover utility vehicles.
Also strong in Ontario is the aerospace sector, including such prominent names as Bombardier Aerospace, Goodrich Landing Gear, Messier-Dowty, and Diamond Aircraft. The presence of these kinds of companies provides opportunities in other sectors as well, such as tool-and-die manufacturing. The province in May granted $250,000 to the Ontario Aerospace Council that will help tool, die, and mold makers meet the needs of aerospace customers. Plans include a self-assessment tool, seminars on market opportunities, work with tooling companies to help them create business capture plans, and a reverse trade show. "Ontario is home to a growing aerospace sector," says Rod Jones, the council's executive director. "This investment will help more aerospace companies use an Ontario solution for their machined components needs."
The government's initiatives are available to companies in a wide range of industries and sectors. Food processing is another example. A $9.7 million investment from the province was one of the factors that helped cereal maker Kellogg pick Ontario for its first new North American manufacturing plant in more than two decades. The new $97 million plant in Quinte will produce Mini-Wheats cereal and employ about 100 people.
And a $10 million provincial investment supported the December announcement that Bioniche Life Sciences Inc. will expand its Belleville facility into a state-of-the-art vaccine manufacturing plant. Bioniche's E. coli vaccine is intended for cattle and will help reduce the amount of E. coli that ends up in the environment through waste. The company is spending $107 million on the facility, which will be built to handle highly infectious organisms that also may include avian influenza.
Making Investment Easier
The Ontario government has embarked on a number of projects intended to make it easier for businesses to deal with government agencies. If companies want to invest and grow, the philosophy goes, why shouldn't government be there to help rather than hinder the process?
One of the latest examples of this philosophy is the new Investment and Trade Centre, which was established earlier this year to help the province sell itself as a great place for international businesses to locate and grow. It's a partnership involving the province and other levels of government, along with economic development organizations and business groups. The plan is to create one door through which international investors may walk to find a wide range of investment services and expertise, and also to showcase the province's business advantages.
"This center is telling the world that Ontario is a great place to do business," says Pupatello. "We have brought together a high-powered, expert sales team that's making it easy for businesses to learn about us and come here." What's the sales pitch? Among other things, Ontario represents nearly 40 percent of Canada's gross domestic product, at $558 billion, and it attracts billions of dollars in foreign investment ($19 billion in 2006). And of course, it's a great entry to the rest of the $15 trillion North American market. "We are a leading North American economy, and we need this level of collaboration and engagement with other markets around the globe to attract good businesses," she says.
A Solid Economy
Even as economists in the United States debate the magnitude of the current economic slowdown and what to call it, the Ontario economy has been rolling along and performing well. The economy is diverse and well-balanced, which is why the province's economists have been bullish about growth prospects, forecasting real GDP to grow by 1.6 percent in 2007, 2.8 percent in 2008 and 3.1 percent in 2009.
About a fifth of the output can be traced to manufacturing; the top five sectors are transportation equipment, metal products, food processing, chemicals, and electrical/electronic products. Top exports from Ontario include motor vehicles and parts, machines, electrical products, metals, and plastics.
Boosting the province's future is a solid core of R&D activity. Ontario is the site of the majority of Canada's industrial research and development, and the cost of such activity compares favorably to the United States and other leading western jurisdictions. Canada as a whole has one of the most generous R&D incentive programs of all major economies, with a wide range of deductions and credits that can offset a large chunk of R&D costs.