Attracting Industry: More Than Just Tax Breaks

NRU
May 14, 2014
By Edward LaRusic

Experts say that municipalities seeking to attract new industry should pay attention to much more than just how low the taxes are.

Former Vaughan planning and economic development commissioner Frank Miele said that in his research at York University’s school of public policy and administration his team identified the top-five reasons why an industry would choose to locate in a municipality. And the tax rate is not one of them. Miele and fellow panelists made the comments at the 2014 Canadian Urban Manufacturing Summit, held in Hamilton May 7.

“Number one: quality of life,” said Miele. “Quality of life is about education. It’s about wonderful parks and a good transportation system, all those wonderful things that you take for granted. That’s the number one reason why an industry locates in a community.”

Fellow panelist, Superior Radiant Products Ltd. president Kevin Merritt said that making the city an attractive place to be is important for industry.

“We entertain international visitors. Having somewhere to take them, to show them the waterfront, a decent hotel, they’re all little things, but they all add up to being proud of your local community [and they attract] good workers.”

Number two, said Miele, is a skilled labour force. “It’s about collaborating closely with the educational institutions in your community and linking with them.”

Society of Manufacturing Engineers Toronto chapter secretary Nigel Southway agrees. He said that Canada has lost manufacturing jobs because it hasn’t been training people to fill the demand.

“We’ve got about a million young people across Canada unemployed or underemployed and they’re not looking at [learning the skills to get a manufacturing job].”

Miele said the third factor is transportation infrastructure.

“Critical to manufacturing, ensuring that there’s public transit in industrial parks. It’s extremely important.”

Merritt said Superior located its business in Stoney Creek, Ontario, because it could be near a bus stop.

“Getting the skilled workers is one thing; getting skilled workers to your factory is another.”

Number four is cutting red tape.

“If you don’t have employment lands that are already serviced, forget it...The availability of lands and buildings are critical for attracting investment.”

Boulder, Colorado economic vitality coordinator Liz Hanson, agreed. “It’s not just money,” she said. Part of her job is figuring out what red tape needs to be cut to ensure a business moves into her city.

And the fifth reason industry moves into a particular municipality, Miele said, is “a positive economic climate.”

“[Every municipality] will tell you they’re pro-business. But the question is, when you roll out the red carpet for an industry, how thick is it? How serious are you at attracting their business? What is the one issue you need [to address] to attract [them] here?”

“Taxes, believe it or not,” Miele said, “was ranked nine [out of] 10. Development charges, while being a very important factor was a one-time charge. It was not ranked in the top five.”

Miele is currently standing for election to be one of three regional councillors in the City of Vaughan with fellow candidates (incumbent) Michael Di Biase, Carrie Liddy, Max Power, (incumbent) Gino Rosati and (incumbent) Deb Schulte. (See NRU February 5.)