Ontario chambers of commerce fight 'aggressive' U.S. incentives
Nearly 20 Ontario chambers of commerce are teaming up to fight back against "hyper-aggressive techniques" American jurisdictions use to persuade Canadian businesses to relocate to the U.S.
The Windsor-Essex Regional Chamber of Commerce, the London Chamber of Commerce and 15 other Ontario chambers are pushing for a new policy that would protect Canadian businesses from being lured away.
The policy resolution will be discussed at the Canadian Chamber annual meeting in Charlottetown on Sept. 27-29.
The issue was initially raised by the Windsor-Essex and London chambers during a network call in June. The Windsor-Essex Chamber says the idea elicited a strong, supportive response from the other Ontario chambers.
“It was striking to us how many chambers said, ‘yeah, that’s happening to us, too,’” Windsor-Essex Regional Chamber of Commerce president and CEO Matt Marchand told CBC Windsor. “We’ve heard of the hyper-aggressive tactics and techniques jurisdictions. I’m not ramping up rhetoric. It’s a fact. They’re very aggressive.
“They ask, “what’s it going to take to get you to move to our jurisdiction.’”
With the support of the other 15 provincial chambers Windsor-Essex and London drafted a resolution which states:
"Canada's international competitors are increasingly using hyper-aggressive techniques to lure Canadian businesses, causing job losses here at home and weakening the Canadian economy. Government has a responsibility to both fully understand the impact that competitor jurisdictions' business attraction efforts are having on the Canadian economy and devise strategies to counteract them."
Marchand said the issue of incentives came up several times while meeting with Unifor, Canada's largest private-sector union, and the University of Windsor at a policy and solutions forum back in May.
"There was a general consensus among business, labour and academia that there is a need to respond to hyper-aggressive incentives from other jurisdictions," said Marchand. "We want our members and the community to know that we heard their concerns clearly and are now taking action Canada-wide."
Marchand said the purpose of the resolution is to draw attention to the issue.
"Let’s get some of our finest minds in the room and come up with counter strategies," he said. "We’re still living off investments from the 1980s and 1990s but sooner or later, those recapitalization investments are going to come back and we have to make a decision about how involved we’re going to be in those."
Lobbying for change
Similar policy change has been called for by the mayor of Leamington, south of Windsor.
Leamington Mayor John Paterson wants to be able to lure businesses to the province by using U.S.-style incentives.
Paterson started lobbying the minister of municipal affairs and housing earlier this year to make changes to Section 106 of the Municipal Act.
According to the act, “a municipality shall not assist directly or indirectly any manufacturing business or other industrial or commercial enterprise through the granting of bonuses.”
A municipality shall not grant assistance by:
- Giving or lending any property of the municipality, including money.
- Guaranteeing borrowing.
- Leasing or selling any property of the municipality at below fair market value.
- Giving a total or partial exemption from any levy, charge or fee.
Paterson’s town was dealt a massive blow last fall when Heinz, which had 740 full-time employees, announced it would close its Leamington processing plant in June of this year.
In Windsor, staff and council have been using Ontario's Community Improvement Plan legislation to lure business and combat U.S.-style incentives.
According to Ontario's website, the CIP enables municipalities to provide grants and loans to stimulate private sector investment in targeted areas of the community
Municipalities can promote revitalization and place-making to attract tourism, business investment and economic development opportunities, promote brownfield cleanup and redevelopment, and may make more effective use of existing community infrastructure.
Paterson told CBC in March that the U.S. was using high-priced incentive packages to lure industries out of Ontario and into American cities.
“They have been offered, in many instances, free land, no taxes for 10 years or, in the states, they waive the school tax for a period of time or [offer] free buildings,” Paterson said in March.
In 2012, General Motors announced it would move its Camaro assembly from Oshawa, Ont., to Lansing, Mich.
GM now plans to build a $162-million US stamping plant in Lansing. According to the Detroit Free Press, the City of Lansing is willing to offer a 14-year tax break on real property, which will cover 50 per cent of the taxes on the building.
“We’re at a complete disadvantage,” Paterson said. “It’s not just Leamington, it’s every municipality in Ontario."