Newco agency aims to correct GTA’s poor foreign investment strategy

YorkRegion.com
Nov. 20, 2015
Lisa Queen  

A new investment attraction agency is working to turn around the Greater Toronto Area’s struggling record of attracting foreign investment.

“At present, the region does not sell or market its assets in a thorough, professional and informed manner. There is no co-ordinated sales force, marketing effort, research and analysis or co-ordination with industry sectors,” Newco interim CEO Toby Lennox told York Region councillors.

“But this is exactly what our competitors and our neighbours are doing and they are gaining the advantage.”

With the help of $2.5 million from the federal and provincial governments in each of the next three years, Newco’s goal is to increase foreign direct investment (FDI) in the GTA.

That involves enticing investors from outside of Canada to invest in operations in the Toronto area by setting up small businesses, leasing or buying space or partnering with local firms, Lennox said.

Encouraging FDI is probably the international strategy most used by local and regional authorities to boost local economic development, an Aug. 21 report to Toronto’s economic development committee said.

At its base, the new agency seeks to create benefits for the entire region by bringing increased resources, capacities and capabilities to bear on marketing regional assets to the international investor, Lennox said.

It is critical for the agency to represent the GTA’s attributes, Lennox said.

“This means that Newco must bake into everything it does the significant assets and attributes of the region,” he said.

“This is not simply about having a list of programs or assets in the region, this is about a complete approach that goes from employee training about regional assets and attributes to building databases to governance and to operating relationships where municipalities and Newco build Newco’s strategies and business plans.”

It is essential to have regional and municipal programs that make them more productive and attractive to foreign investors, Lennox said.

He pointed to a York Region situation as an example where that has paid off.

A small Brazilian company called Acanto, which does software development, has space at the Markham Convergence Centre as part of its attempt to get established in the GTA.

“The MCC is an asset that Newco can and must sell,” Lennox said.

“This model is one that Newco can build on which could help connect foreign companies with soft landing needs into the Markham Convergence Centre, as well as others, including the Vaughan International Commercialization Centre and the CreateIT Now Accelerator at Southlake Regional Health Centre in Newmarket, both of which are being launched officially this month.”

The Greater Toronto Marketing Alliance, a public/private partnership, has acted as the primary marketing body for attracting investment to the GTA.

But while it has had some successes, it must be overhauled to achieve its full potential, a 2013 report by consultant PwC, which helped lead to the launch of Newco, said.

Change is needed because FDI is a significant driver of economic prosperity and the GTA is not reaching its potential, the report said.

“When a foreign company establishes new operations in Vaughan or Pickering or Burlington, the entire GTA benefits. The new company buys goods and services from other businesses throughout the region, creating spinoff benefits in those businesses and communities,” it said.

“In addition, employees are drawn from across a broad range of communities… These employees spend their wages in their local communities, generating additional spinoff benefits to other businesses.”

Canada’s FDI performance once stood at third in the world, but has dropped to 12th, the report stated.