Fight to attract business investment expected to be fierce, chair of new Ontario agency says
The chair of Ontario’s new investment-attraction agency says the post-pandemic fight for business investment among governments will be a fierce one, and that the province could use a number of tools — including possible financial support — to try to secure its share.
Elyse Allan, a director of Brookfield Asset Management Inc. and the former chief executive of General Electric Canada Company Inc., was on Friday named as the first chair of Invest Ontario’s inaugural board of directors.
The creation of the agency was announced in July. When it staffs up and begins operating, it will tout the province and its assets — such as a skilled workforce — as a premier spot for corporate investment, starting with a focus on advanced manufacturing, life sciences and technology.
“Everybody’s economy has been impacted by the pandemic and … Ontario and Canada are no exception to that,” Allan said in an interview. “So coming out of the pandemic, I think we can expect that governments, whether they be state level or country level, will be aggressively pursuing investment. We need to make sure that we position Ontario as a top-tier destination for that investment, because it’s with that investment that we create jobs.”
The other 10 members of Invest Ontario’s board of directors announced on Friday include Andrew MacLeod, CEO of National Post-owner Postmedia Network Canada Corp.; former Ontario premier Ernie Eves; Cargojet Inc. CEO Ajay Virmani; and former Ontario cabinet minister and current Postmedia director Janet Ecker. The members are to be part time and paid on a per-diem basis, except for Allan, who will earn a $90,000 salary, a press release said.
Premier Doug Ford’s government will table a budget next week, giving a clearer picture of Ontario’s finances and spending plans.
There is, however, “a well-understood toolbox” for economic development, Allan said. Invest Ontario will provide firms with information and strive to understand their needs, which may eventually involve offering financial incentives to businesses, such as grants or loans.
“They want to make sure that when they invest, they’re investing to ensure a viable business,” Allan said. “We want to do the same. One piece of that might be some form of financial discussion, financial deal, but … it is one piece of many points of discussion that actually ultimately win you, and will win Ontario, that investment.”
Ontario’s economic development minister, Vic Fedeli, told the Post last year that the provincial government was prepared to invest in “anchor” companies if the situation called for it.
According to Friday’s press release , Invest Ontario’s board will report to Fedeli and “advise on key opportunities to spur Ontario’s economic recovery and growth in an increasingly competitive global marketplace.”
Ontario is still grappling with COVID-19 and will likely run considerable financial shortfalls for the foreseeable future — it has projected a $38.5-billion deficit for its 2020-21 fiscal year.
The province’s third-quarter financial update also noted that private-sector forecasters, on average, were projecting that its real gross domestic product fell by 5.9 per cent in 2020, which was better than the 6.5 per cent forecast in its fall budget. For 2021, however, Ontario’s economy was predicted to grow by 4.5 per cent, a bit weaker than the budget’s call for a 4.9 per cent expansion.
Moreover, as the provincial government tries to bring its deficit down and grow its economy, it will find itself competing for investment against other jurisdictions that have been forced into similar financial straits.
Foreign-direct investment in Ontario has been decreasing year-over-year by an average of about two per cent, whereas it has increased in some U.S. states along the Great Lakes, Allan said. Addressing that gap will likely be a priority for Invest Ontario, which will begin hunting for a chief executive before turning to generating leads, attracting investment and closing deals.
Allan, who ran GE Canada from 2004 until June 2018, is someone who has run the sort of competitions for investment in the past in which Invest Ontario will engage.
“The challenges … in placing investments previously have been the fragmentation across governments, in terms of responding to your need, and an inability to help you and do it quickly,” Allan said. “And that’s why I’m very excited that the positioning and the goal of Invest Ontario really is to provide that one-stop shop for business and investors.”
Financial Post
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