No Southwestern Ontario Development Fund ... for now, anyway

The Ontario legislature has adjourned for the summer and the bill that would have created the Southwestern Ontario Development Fund (SWODF) got all the way to third reading debate but no further. [UPDATE: When the MPPs returned early to Queen's Park to prevent a teachers' strike, they also concluded third reading debate on Bill 11 and passed it on August 28.]

Just a few weeks ago, things seemed to be looking pretty good for Bill 11—the Attracting Investment and Creating Jobs Act, 2012 ("Path looks clear for the Southwestern Ontario Development Fund", May 2).

It had made it through committee with the addition of some amendments from the NDP (which they were proud of—London-Fanshawe MPP Teresa Armstrong called it "the first government bill in a generation that has been substantially rewritten in committee"). The governing Liberals and NDP had reached an agreement—or so it seemed—to pass the budget, and that appeared to leave plenty of time for third reading of Bill 11 before the summer adjournment.

It didn't work out that way. The budget ended up going down to the wire and was only passed on Wednesday. Third reading debate on Bill 11 began on May 2 and continued on May 10, but didn't resume until June 11. And then time ran out.

So, for now, there is still no Southwestern Ontario Development Fund, and it's unlikely that any funds will flow in 2012, even if the bill makes it through the legislature in the fall. A corporation would still need to be created to administer the fund and its board of directors appointed, along with an advisory committee—all before funds could be disbursed. The structure and criteria for the fund still need to be determined as well.

Since the bill never passed, we never got to the contentious issue of the geographic boundaries of the fund. You may have seen boundaries reported in several news stories, but those reports were inaccurate. The boundaries were to be part of the regulations, not the bill, and we never got that far.

The government's estimates for the current fiscal year—tabled two months ago—only included payments of $4 million for the proposed $20 million-a-year fund. Apparently, they never expected to be paying out a lot of cash under the SWODF program this year.

In third reading debate, the bill had the support of the Liberals and NDP. The official opposition PCs were opposed, with critic Monte McNaughton (also my MPP) saying it would be spending money the government didn't have and calling the regional development funds "corporate welfare."

Back to it in the fall ...

Now I know where farm country is ... and see the food processing opportunities

When I lived in Waterloo, I used to be able to say that when I left my house, if I went right I'd be driving past farm fields in two minutes and if I went left I could be in downtown Waterloo in about three minutes. Having only lived in the Toronto and Boston areas before moving to Waterloo, being close to farms was a new experience—and one I really enjoyed (by the time I moved away, I was also a two-minute drive from Walmart—the neighbourhood was changing).

The western edge of Waterloo may have seemed somewhat rural to a Torontonian's eyes, but now that I've been living and working in the small urban and rural parts of Southwestern Ontario for a while, I finally know what real farm country looks like.

Statistics Canada recently released its 2011 Census of Agriculture, and the numbers bear out what I've experienced. When it comes to farms, Waterloo Region has nothing on most of Southwestern Ontario:

Waterloo falls near the bottom of the list for number of farms, although its neighbour to the northeast takes the top spot and Perth County to the west is just three spots below. You were surrounded by farms in Waterloo, but there weren't so many in the region itself.

I now live in Middlesex County, which places third on the list and the grey shaded areas are the counties that border on my home county (I shaded Middlesex as well). This is farm country.

When you just look at farms of 400 acres or more, the census gives this ranking:

Huron County is the clear leader, with Chatham-Kent, Lambton and Middlesex following in tight pack.

With so many farms surrounding them, you can see why the City of London (included in the Middlesex numbers here) and the Region of Waterloo have both emphasized food processing as a key component of their economic development plans. Both LEDC in London and CTT in Waterloo Region promote their areas as food processing centres. Both are members of the Ontario Food Cluster, along with the folks in Middlesex County, SLEP, SWEA, SOMA, Chatham-Kent and other parts of Southwestern Ontario (Toronto as well).

London is particularly well-positioned to become a food processing centre (or a larger one than it already is). When you look at a map of Southwestern Ontario, there's Waterloo Region and Guelph on the eastern edge and Windsor to the west, and then a large ring of farmland surrounding the London area and no other big urban centres nearby.

When I was the roving representative of the Ontario Network of Excellence program across this area, one of the leading challenges was to figure out how government-funded "innovation" programs could be made more relevant within this sector. Bioenterprise in Guelph has done a good job working with innovators in the agri-tech space, and it's very different from the digital media or medical devices spaces that I've had more experience with and where innovation resources tend to be focused.

The 2011 numbers haven't been released yet, but at the time of the 2006 general census, the percentage of the workforce in the London and Kitchener CMAs (in London's case, that includes parts of Middlesex and Elgin, as well as St. Thomas) was only around 4%, but they were two of the biggest areas for food processing/farming in the province.

There have been some big plant closings and expansions over the years since 2006, so it will be interesting to see where things are when the 2011 numbers are released. But the general pattern should be similar: the Toronto CMA, which includes most of the GTA, will dwarf everyone else, and Hamilton, London, Kitchener, and Niagara should all continue to show strong numbers.

I was a bit surprised by how dominant food processing and farming was in the Leamington workforce at the time of the 2006 census. Not surprised at all by Norfolk. And, of course, the Toronto CMA quickly falls from first place to last when placed in this context:

IRAP Q4 contributions for Digital Extremes, Sumagen, Polyanalytik, Miovision, Communitech, Plantform

A strong end to the fiscal year for London and area companies for NRC-IRAP contributions ($25K minimum). Disclosed for the quarter ended March 31 (Q4 12) were:

Sumagen Canada Inc.	London	$1,014,000
Digital Extremes Ltd.	London	$77,000
The Sansin Corporation	Strathroy	$34,140
Polyanalytik Inc.	London	$30,000

The Sumagen funding was the largest disclosed NRC-IRAP contribution in the region for the year. The full list for fiscal 2012—much shorter than what we saw in the previous two years with the additional stimulus funding:

Sumagen Canada Inc.	London	$1,014,000
Cyborg Trading Systems	London	$115,000
Digital Extremes Ltd.	London	$77,000
Quantum5x Systems Inc.	London	$50,000
Bluestreak Equipment Inc.	Delhi	$49,050
The Sansin Corporation	Strathroy	$34,140
Techalliance Of Southwestern Ontario Inc.	London	$30,000
Polyanalytik Inc.	London	$30,000
The Money Broker Inc.	Blenheim	$28,685
Givens Engineering Inc.	London	$27,285

Some notable Q4 contributions from other areas:

Plantform Corporation	Toronto/Guelph	$283,357
Network For Innovation And Entrepreneurship	Toronto	$275,000
Communitech Corporation	Kitchener	$135,452
MaRS Discovery District	Toronto	$86,000
Miovision Technologies Incorporated	Kitchener	$26,000

Plantform also has an office at The Research Park in Sarnia.

Some FedDev fundings from January, February, March

FedDev has disclosed its contributions for the final quarter of the 2012 fiscal year —covering January, February and March of this year. Here are the top 10 projects for the period by dollars committed:

University Of Toronto	Toronto	$20,000,000
Alliance Of Manufacturers And Exporters Of Canada	Mississauga	$18,900,000
York University	Toronto	$15,549,290
Western Ontario CFDC Association Inc.	Brantford	$12,000,000
Ontario Brain Institute	Toronto	$10,971,133
Cytec Canada Inc.	Niagara Falls	$10,000,000
Dr. Oetker Canada Ltd.	Mississauga	$10,000,000
Ivaco Rolling Mills (2004) L.P.	L'Orignal	$10,000,000
Eastern Ontario CFDC Network	Peterborough	$8,000,000
Royal Conservatory Of Music	Toronto	$7,500,000

The announcement of the $10 million repayable contribution to Dr. Oetker Canada was made on May 24 in London, but the actual funding was made two months earlier. There's often quite a lag between the funding and the announcement.

I don't think we've heard an announcement about the $12 million given to the Western Ontario CFDC Association, but two months ago they were advertising a job opening for someone to manage a business loan fund "intended to support community innovation and business development" under FedDev's Prosperity Initiative. So now we know the amount of money involved (over a two-year period). It will be interesting to see the details once the formal announcement is made. The Western Ontario CFDC Association covers an area that includes all of Southwestern Ontario.

Four of the five biggest FedDev fundings of the year took place in Q4, and U of T's $20 million was the largest of the year, edging out the University of Waterloo's $19.6 million, awarded in August.

Some other notable FedDev fundings in the quarter:

Sunnybrook Research Institute	Toronto	$6,910,000
Yves Landry Foundation	Toronto	$5,000,000
Research Innovation Commercialization Centre	Mississauga	$4,999,575
Vineland Research And Innovation Centre	Vineland Station	$2,511,035
Perimeter Institute For Theoretical Physics	Waterloo	$1,730,000
Ontario Centres Of Excellence	Toronto	$1,102,500
Primal Fusion (Primal)	Waterloo	$987,500
Perth County Ingredients	St. Marys	$947,500
Bigroad Incorporated	Waterloo	$750,000
Huron Business Development Corporation	Seaforth	$719,154
Sarnia-Lambton Business Development Corporation	Sarnia	$645,000
Qwalify Inc.	Waterloo	$250,000

The Sunnybrook funding involves Western University as a partner and was announced last month. The CFDCs across Southern Ontario are funded through FedDev, so there are several of them on the list.