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Saturday, February 22, 2020
Their View / Opinion

Efforts for economic development misguided, with growth misplaced and counterproductive

For the 10 years between 2008 and 2018, 91 per cent of the job creation in Ontario occurred in the GTA (including the Oshawa census metropolitan area) and Ottawa. That left just nine per cent for the rest of the province.

Those numbers, published in a new report from the Fraser institute, Uneven Recovery: Job Creation in Ontario’s Urban Centres between 2008 and 2018, are hardly inspiring for most of the municipalities in the province, though this region didn’t do too badly.

“Job creation performance outside of the GTA CMAs and Ottawa has not been uniform. Some CMAs, such as Kitchener-Cambridge-Waterloo, have seen significant job growth, while others, including London, St. Catharines, Peterborough, and Thunder Bay have experienced minimal job growth or, in the case of the Greater Sudbury area, negative job growth. In smaller towns and rural areas taken as a whole, net job creation has been negative during the 2008 to 2018 decade,” reads the report.

Still, the report both speaks volumes about the uselessness of economic development efforts and the futility of trying to tackle social woes such as housing affordability and environmental degradation in the Golden Horseshoe.

The former is simply an expensively wasteful make-work project for a few people, while immigration and settlement patterns work against issues such as affordable housing, community-building and the support of friends and family, as people are forced to leave small towns for the only areas of growth.

With economic development, growth in both housing and jobs will concentrate in a few spots in the province, regardless of window-dressing attempts by municipalities: those communities that don’t need growth will get it, with all the incumbent social ills and rising costs to existing residents, and those areas that need it – i.e. almost every municipality outside of the Golden Horseshoe and Ottawa – won’t get any.

For those communities experiencing growth, the benefits will be few, the problems many.

Locally, in Woolwich and the region, little of the growth has been a boon to citizens. Much of the finances from growth got sucked into the black hole of staff increases, higher wages and pet projects that provide zero benefit to the public, often doing harm instead. Instead of spreading the load and providing more funds for essentials such as infrastructure, growth has been putting ever-more stress on the current infrastructure while adding to the inventory that will one day require more government money to maintain and replace. And always at a cost greater than the purported benefits of growth.

The downsides of growth – a long list, not limited to the inarguable ecological damage – should have been top of mind to local politicians dealing with budgets just now. Neither the township nor the region looked at eliminating fruitless economic development offices, let alone countering the growth that is proving detrimental.

It’s down that path the conversation needs to go, however. We need to know if Waterloo Region really has a problem attracting new businesses.

Yes, there are pre-existing challenges locally, provincially and nationwide, particularly when it comes to manufacturing  jobs, but how much local taxpayer money is really needed while the region remains a growth centre?

Small communities with a small industrial/commercial base experiencing a net outflow of residents may want to develop land in order to entice business and create jobs. That’s certainly not the case in the region, though the types of new jobs are not always ideal – many of the new jobs are low-paying and transient, but  the myth of the service economy endures nonetheless. The standard reply that other urban centres do the same thing with economic development and growth shouldn’t suffice. Again, the politicians should be asking those questions and challenging assumptions on our behalf.

Interestingly, some advocates of economic development initiatives, particularly in the U.S. where there are more levers (tax breaks, land grants and the like) in play, economic development is sold as being able to reduce property taxes by adding more contributors. That’s never discussed here, where residents see few benefits from growth, and no financial advantage whatsoever when it comes to government: their taxes always go up, never down.

For many critics, however, economic development is a zero-sum game. Money spent on attracting businesses from another jurisdiction beggars thy neighbour. For new ventures, a long list of factors will come into play when a company is looking to set up shop; sure, they’ll take any freebies, but if that’s the deciding factor, there’s every reason to doubt the long-term viability of that “investment.”

What we and other municipalities in the GTA have been doing, however, simply locks us into the ponzi scheme of growth in order to justify today’s decisions, no matter how poor. Just look at the light rail transit fiasco, literally railroaded through public opposition, for proof. The mall-to-mall train makes absolutely no sense today, tomorrow or in your lifetime. Unlike the transit woes in Toronto, it is a solution to problems that doesn’t exist here. The solution? Create the problems here by increasing densities, making driving less convenient and burdening the most vulnerable in the core areas.

What the numbers show is that the current formula doesn’t work. That’s true of most of the province that lacks job creation, but also in those areas where demand is driving growth and its commensurate downside.


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