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2. MOTION - Review of the City’s
Economic Development Delivery Model and Refresh of the 2003 Economic Strategy MOTION – examen du modèle de développement
économique de la Ville et actualisation de la stratégie économique de 2003 |
Committee Recommendation
That Council
direct the City’s Economic Development Division to report back in Q1 of 2009
with a process to update the City’s Economic Strategy, including reviewing the
City’s current economic development delivery model.
Recommandation du comité
Que le Conseil donne instruction à
la Division du développement économique de la Ville de produire, au cours du
premier trimestre de 2009, un rapport énonçant une démarche pour la mise à jour
de la Stratégie économique de la Ville, y compris un examen de son modèle
actuel de prestation des services de développement économique.
1.
Committee Coordinator’s report dated 27 October 2008 (ACS2008-CMR-CSE-0043).
2. Extract of Draft Minutes 34 from the
meeting of 4 November 2008.
Report to / Rapport au:
Corporate Services and Economic Development
Committee
Comité des services organisationnels et du
développement économique
and Council / et au Conseil
27 October 2008 / le 27octobre 2008
Coordonnateur de comité
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Ref N°: ACS2008-CMR-CSE-0043 |
SUBJECT: MOTION
- Review of the City’s Economic Development Delivery Model and Refresh of
the 2003 Economic Strategy
OBJET: MOTION –
examen du modèle de développement économique de la Ville et actualisation de la
stratégie économique de 2003
That the Corporate Services and Economic
Development Committee recommend Council direct the City’s Economic Development
Division to report back in Q1 of 2009 with a process to update the City’s
Economic Strategy, including reviewing the City’s current economic development
delivery model.
Que le
Comité des services organisationnels et du développement économique recommande
au Conseil de donner instruction à la Division du développement économique de
la Ville de produire, au cours du premier trimestre de 2009, un rapport
énonçant une démarche pour la mise à jour de la Stratégie économique de la
Ville, y compris un examen de son modèle actuel de prestation des services de
développement économique.
WHEREAS the City’s current Economic Strategy
was originally approved by Council in 2003 as a part of the Ottawa 20/20
process;
AND WHEREAS the City’s Economic Development
Division is to undertake a review of the City’s current economic development
delivery model, including a program review and benchmarking exercise;
AND WHEREAS the City’s Economic Development
Division is to undertake a Strengths, Weaknesses, Opportunities and Threats
(S.W.O.T.) analysis of Ottawa’ current economy;
THEREFORE BE IT RESOLVED that the Corporate
Services and Economic Development Committee recommend Council direct the City’s
Economic Development Division to report back in Q1 of 2009 with a process to
update the City’s Economic Strategy, including reviewing the City’s current
economic development delivery model.
CONSULTATION
This item will be advertised in the local dailies as part of the Public Meeting Advertisement on Friday preceding the Committee meeting.
Economic Development Division has begun preparation of a work plan and critical path to ensure that the process of updating the City’s 20/20 Economic Strategy from 2003 considers input from the broadest range of stakeholders. It will use a Strengths, Weaknesses, Opportunities and Threats (S.W.O.T.) analysis of Ottawa’s economy to inform stakeholders in the consultation process.
FINANCIAL
IMPLICATIONS
Economic Development Division has the resources within its 2008 budget to complete this assignment.
Staff to implement Council’s decision.
MOTION - Review of the City’s Economic
Development Delivery Model and Refresh of the 2003 Economic Strategy
MOTION –
examen du modèle de développement économique de la Ville et actualisation de la
stratégie économique de 2003
ACS2008-CMR-CSE-0043 city-wide / À l’Échelle de la ville
Because Committee was dealing with his motion,
Mayor O’Brien ceded the Chair to Councillor Jellett.
Mr. Jeffrey Dale, President and CEO of the
Ottawa Centre for Research and Innovation (OCRI), spoke to a PowerPoint
presentation on OCRI’s role in the City’s Economic Strategy. A copy of this presentation is held on file
with the City Clerk.
Councillor McRae referenced the slide in which
Mr. Dale had provided a snapshot of Ottawa’s employment sectors. She asked why
the tourism sector was not listed therein and what OCRI was doing to integrate
with tourism help engage this sector in Ottawa. Mr. Dale indicated he did not know what percentage of Ottawa’s
employment was made up of the tourism sector.
He explained that his slide only reflected the employment groups with
which OCRI interacts. He advised that
OCRI currently did not do a lot of interaction with the tourism sector, other
than calling upon the Ottawa Tourism and Convention Authority when dealing with
incoming delegations to give them a tour of Ottawa.
Speaking to the 41% of the labour force that
was referenced in the presentation, Councillor McRae wondered why no mention
was made of small businesses. She
submitted that small businesses were the engine driving the local economy. Mr. Dale confirmed that the economy was
driven by small and medium enterprises, particularly in the technology sector,
and he apologized for not emphasizing this in the presentation. He indicated the number of companies had
grown by 85% in the past five (5) years and of those new companies, 80% had
fewer than 50 employees.
Responding to a question from the Councillor
with respect to the other 59% of the labour force, Mr. Dale indicated it came
from sectors such as the market economy, retail, tourism, and trades.
Councillor McRae drew Committee members’
attention to the slide titled “Key Plans for 2009” and asked Mr. Dale how OCRI
had helped corporations wanting to locate in Ottawa, by making land available
or establishing proper zoning and facilitating the move to the City. She noted that the City was providing more
than $100M a year in funding to OCRI and she indicated she was looking for
value for money. Mr. Dale indicated
that for any company looking to locate in Ottawa, OCRI worked with commercial
real estate agents. He explained that
most companies coming to Ottawa did not want to wait for land development. They wanted existing space that was already
built. He stated that there had been
meetings held in regards to east end land development and how this development
could be encouraged but that, to date, no progress had been made. He advised that, similarly, OCRI was also
working in Ottawa South. In closing,
Mr. Dale advised that in the past three years, two large retail customers who
had approached OCRI with respect to land development, had been referred to City
staff.
Responding to a question from Councillor Bloess
with respect to a reduction in the availability of venture capital, as
referenced in his presentation, Mr. Dale stated he was not suggesting that the
City should get into the support of the venture capital business. He explained that the Province had created a
fund, which was being managed by TD Capital and a number of companies were
looking at way to access this capital.
He advised that OCRI’s role was to position these companies as being
well managed and able to execute upon being granted access to the funds. He indicated the venture capital funding was
needed in order to fuel the growth of these companies.
Councillor Bloess asked if there was anything
the City of Ottawa should be focusing on with OCRI in terms of key plans for
2009. Mr. Dale submitted that, in
difficult economic times, career transitioning should be made as easy as
possible and that giving people the opportunity to look at self-employment was
key. In this regard, he recommended
creating discourses with universities, colleges and school boards. Further, he reported OCRI was putting
efforts into looking at how the City could help those companies that could
potentially grow during these economic times.
In closing, Mr. Dale stated that it would be very nice to have a
physical centre dedicated to the growth and acceleration of start-ups in Ottawa
and that to this end, OCRI was actively pushing the interactive hub concept and
had received strong support from Council to get a facility up and running.
Councillor Bloess asked if there was anything
OCRI could do to get companies to build on speculation. Mr. Dale noted the latest vacancy statistics
for the east end showed a 1.3% commercial vacancy, which meant there was
essentially no space available in this area.
He indicated developers were not going to build on speculation and that
the market was currently full and needed to be continually pushed forward. He advised that OCRI had been focusing on
company expansion plans and whether companies could start to be introduced to
developers. He submitted that the same
could be said for the south end of the City, where the RCMP and JDSU were
located. He suggested that the City
confront these institutions ahead of the curve of their plans so that new
development opportunities could be created.
Councillor Harder brought up Councillor
Desroches’ interest in the south end of Ottawa, which included the Riverside
South area. She asked what the
attraction would be in order to sell Riverside South, as opposed to the
long-established business parks in the east end and South Merivale. Mr. Dale indicated Councillor Desroches had
asked him to look at the South Merivale Business Park as a priority. He agreed with Councillor Harder, that in
terms of employment plans, it was essential to look at an opportunity for a new
community like Riverside South to have a mixture. He advised that OCRI had spoken to Councillor Desroches regarding
the properties on Limebank Road and how to get the Airport Authority to look at
their economic plans in terms of complementary activities that could be
expanded in the area. He then
referenced the Hunt Club Business Park and its proximity to Riverside South and
suggested that, when the Business Park ran out of room for expansion, Riverside
South could be an option.
Responding to a question from Councillor Harder
with respect to transit, Mr. Dale advised that public transit was very high on
companies’ lists in terms of features they looked for when deciding where to
locate. He advised that it would be
very advantageous for companies to be located by a transitway, especially a
light rail transit way.
Councillor Brooks brought up the subject of an
apparent shift of wealth and education to the east, to such places as India,
China, South Korea and Japan. He
wondered, if this shift continued, how OCRI saw North American reclaiming
manufacturing from offshore. In
response, Mr. Dale indicated he did not know if there would ever be reclamation
of manufacturing. He explained that
there were opportunities for automation and security of supply to bring some of
it back. However, he submitted that
companies would go where costs were the lowest. He suggested that, instead of focusing on bringing back
manufacturing, the focus should be on how to compete.
Responding to a follow-up question from the
Councillor with respect to foreign trade, Mr. Dale stated that, in the
knowledge sector, the shift was occurring more rapidly than in the over-all
economy and that small and medium enterprises were looking at how they should
go after these new markets; the Middle East, South America and Asia. He advised that OCRI had received
delegations from such places as Saudi Arabia, South America and China, that
these organizations wanted to expand in Ottawa, not because of the Federal
government, but because of the City itself.
He submitted that what the City could accomplish internationally was
starting to grow and that the business community was realizing this.
Councillor El-Chantiry asked if the City had an
overall plan in how much was going to be invested in OCRI. Mr. Dale stated there was a need for
investment during tough economic times.
He explained that what OCRI did for economic development was an
investment; that the entrepreneurship centre was seeing an increase in the
number of people coming in for consultations on how to start a business and
that these types of activities increased during difficult economic times. He stated that the City’s funding to OCRI
was leveraged because funds from the Federal, Provincial and private sector
would not be received unless OCRI had the support of City Council.
Mayor O’Brien indicated he was often asked
whether Ottawa’s economic development organizations should be working more
closely together. He submitted that he
saw non-coordinated economic development activity occurring in the city and he
wondered if OCRI could foresee working more closely with the other economic
development groups. Mr. Dale advised
that he used to meet quarterly with the heads of the Chamber of Commerce, Life
Sciences, and the Tourism Authority, but that this had not happened in the past
couple of years. He noted that while
these organizations’ activities were different, they were also complimentary. He explained that The Ottawa Partnership was
the group that pulled together these different organizations.
As a follow-up, Mayor O’Brien asked whether Mr.
Dale saw a role for a more coordinated approach to economic development in
Ottawa and whether OCRI would be willing participants in such a review. Mr. Dale indicated OCRI would be very
willing participants and he felt the time was right to look at the overall
economic development plans and to start being better at prioritizing what the
City wanted in regards to infrastructure, education, transit and
innovation. He offered OCRI’s help to
pull together the business and education sectors to help Council make those
tough decisions and set priorities.
Responding to a question from Councillor
Chiarelli with respect to comparators, Mr. Rob Mackay, Acting Director of
Economic and Environmental Sustainability, indicated Ottawa had fallen behind
and was spending a much smaller percentage per capita on economic
development. In terms of economic
strategy, he advised that Toronto had larger budgets and a lot more staff. He explained that a lot of the City’s
economic development program was outsourced to other partners, who brought
additional dollars into the program whereas other jurisdictions had larger
internal efforts.
Adding to this, Mr. Ian Duff, Manager of
Economic Development, noted that the City of Toronto had 77 positions, in a
5,000,000 population, whose basic function was local economic development. By comparison, the City of Ottawa had five
(5) positions for its population of 800,000 to 1,000,000. Councillor Chiarelli asked for comparators
from Calgary, Vancouver and Montreal and suggested that staff ask the Ottawa
Public Library’s research group to find this information.
In response to a question from Councillor
Chiarelli, Mr. Dale briefed Committee on a photonics partnership project with
Tucson, which had been started in 2001 and continued to be successful. He advised that a similar activity was
taking place with OCRI and Mumbai, India.
Councillor Chiarelli referenced the displacement
of manufacturing towards Mexico. He
wondered if this was still happening and how it had contributed to Ottawa’s
economic health. Mr. Dale explained
that, because of challenges that existed along the border between the United
States and Mexico there had been less expansion in that regard. However, he advised that most of the
expansion of electronic manufacturing went to Asia because of low costs and
emerging standards.
Councillor Chiarelli asked if there was any
indication as to whether the groups that had helped the City of Ottawa emerge
from the previous recession would be the same this time. Mr. Dale suggested the players now would all
be different because the economy had changed.
He noted that the healthcare and education sectors were still expanding
in Ottawa and he submitted that the technology sector would not be able to
provide the level of support it has previously.
Mr. Gary Hannah, OCRI Board Chair, added that
small and medium businesses were capable of moving quickly so that when they
saw opportunities in the market, they were able to capitalize on them. Directly to the Councillor’s question, he
re-iterated that the group that would be seen during this recession would be
different because different things would be needed in comparison to the
previous recession.
Mayor O’Brien referenced the number of people
working in the City’s Economic Development Division and he maintained that the
real issue was how much money the City was spending on economic development
activities and initiatives. He asked
for a return on capital calculation in terms to the contribution back to the
City’s economy. Mr. Dale submitted that
this was an extremely difficult calculation to make. He advised that, by next year, OCRI would be able to tell the
City exactly what it had been able to do to help companies grow because it was
currently collecting data one year after the provision of services to these
companies.
Mr. Gerry Lepage, Executive Director of the
Bank Street Business Improvement Area, indicated he was glad to see a proposal to refresh the economic
development strategy. He submitted that
the City’s economic development could not be measured and that this was
historically the problem with the strategy.
He agreed that economic development was the only engine the City had in
order to make the economy grow. He
re-iterated the importance of refreshing the strategy and he spoke against
cutting economic development investments from the municipal budget. He submitted that Ottawa did not have to
look at what the City of Toronto was doing, it simply had to look at the City
of Gatineau and how they were outspending Ottawa two to one in economic
development. He concluded by saying
that in order to push ahead, the City had to find its core competency in economic
development.
Responding to a question from Councillor
El-Chantiry with respect to alternative ways of doing business, Mr. Lepage
referenced the Mayor’s earlier suggestion with respect to integrating Ottawa’s
economic development groups into a whole.
He submitted that all parties had to be on the same playing field,
looking at the same objectives and moving in the same direction.
Following these exchanges, Committee voted to
approve the motion.
That the Corporate Services and Economic
Development Committee recommend Council direct the City’s Economic Development
Division to report back in Q1 of 2009 with a process to update the City’s
Economic Strategy, including reviewing the City’s current economic development
delivery model.
CARRIED