Archived — Keynote Address to the Economic Club of Canada

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The Honourable Gary Goodyear, Minister of State for the Federal Economic Development Agency for Southern Ontario

Toronto, Ontario
June 17, 2010

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Good afternoon ladies and gentlemen, friends and guests. Thank you for the warm welcome.

It's a pleasure to be able to speak to such a high-calibre audience today—full of business and community leaders, visionaries and innovators, who have a finger on the pulse of the southern Ontario economy and want to see it grow and prosper.

As a lifetime resident of southern Ontario, I have grown up, gone to school, raised a family and ran a business in this region. I'm sure many of you share this same history.

I'm sure you also remember when our region's manufacturing sector was the backbone of our economy and one of the strongest in the world.

When our parents and grandparents worked on assembly lines in factories and manufacturing plants from Windsor, to Kitchener, Toronto to Ottawa—making Canadian products that dominated in markets both here and abroad.

We were more productive, faster and more competitive. We had a strong and growing labour force; and fewer competitors, in a marketplace where the demand for products was robust.

In the last two decades, however, as computers and modern technology entered our workplaces, the industrial economy has seen fundamental structural change. We face new challenges. And a new global environment.

Determined new competitors are rising with a fierce momentum and redefining the way the world views productivity. The relentless pace of technology means that every day there is something newer, faster, better, brighter.

The economy is shifting from goods to services. And focus has shifted from primary manufacturing to the knowledge-based economy.

To succeed in this new economy, Canada must keep step as the world races forward. The good news is, our businesses are changing; the not so good news is that businesses in other parts of the world are changing faster.

Southern Ontario has been hailed as the economic engine of Canada since the nineteenth century with the growth of the shipbuilding industry, the arrival of the railroad, and then in 1904 when Henry Ford first arranged for vehicles to be manufactured in Windsor.

At these important crossroads in our history, we need to rev up this engine. We need to achieve more, innovate more, become more efficient and productive, faster. And we are on this path to recovery and prosperity.

Today, I am sharing with you my vision to move beyond merely stabilizing and reinforcing our economy to securing a strong future for southern Ontario built on the potential that exists today, and the reality that we can and we will create for tomorrow.

To become world leaders and achieve greater global success – we need to seize new opportunities to innovate and build strategic advantages. To position this region as a backbone and a driving force of the Canadian economy once more.

Governments can't do this alone. Frankly, nobody can –not if we want to be ahead in the race.

Even if you are good, you can always be better. To be better, we need to work together.

We are no longer afforded the competitive manufacturing edge that came with a low Canadian dollar. To be competitive in 2010, we must manufacture innovative goods that consumers want faster, better and less expensive regardless of the value of the dollar.

It is important that we view these changes as an opportunity and not as a threat—to adapt, to grow, to strengthen and to diversify.

The last few years have been very difficult. And we have faced setbacks. The economic downturn hit our manufacturing sector particularly hard—forcing plant closures and wide-spread layoffs.

Many of us know someone, maybe perhaps even a family member, who has lost a job. Southern Ontario was challenged by the impacts to a greater degree than other regions throughout the country.

But as we emerge from a year marked with challenges and adversity for many around the world, our government remains committed to supporting our communities and helping them return to a cycle of prosperity and growth.

Canada was the last of the G-8 countries to enter the recession and we will be the first to exit it. Our country is emerging as an economic leader amongst industrialized nations.

That is because our government, under the strong leadership of Prime Minister Stephen Harper, saw this storm coming. Because, when our new government was elected in 2006, we made a conscious commitment to restore and strengthen Canada's financial prosperity for current and future generations.

We got to work quickly and lowered taxes to help citizens and businesses. We paid down record-levels of debt – some $38 billion, in just three years. And we made extraordinary infrastructure investments, such as Building Canada–a plan that invested $33 billion to strengthen the economy, create jobs, provide a cleaner environment and build prosperous communities.

We have pursued policies different from those of many of our trading partners and different from past governments. We have kept spending under control and refinanced important programs in health care and post-secondary education.

Our banks are among the strongest and best regulated in the world. And as a result of these initiatives and our government's commitment, strategy and foresight over the last four years, we built one of the strongest and healthiest economies in the world. In fact, the unique strength of Canada's financial sector and the resilience of our banks set Canada apart during the global financial crisis. The World Economic Forum, among others, has recognized Canada's banking system as the strongest.

And because of this, as our government predicted, we were the very last of all G8 countries to enter the global recession.

Ladies and gentlemen, when the storm did hit, our government was ready and responded decisively by delivering an unprecedented stimulus package to protect Canadians and the nation.

But Canada's Economic Action Plan wasn't just a stimulus package; it was an integrated strategy designed to reach out and reach higher–to set the stage for long-term growth.

We invested to create jobs today, while further positioning our region's economy as an economic leader, tomorrow. We are strategically investing in sectors that face difficulty to do just that.

  • We are providing resources for rural communities;
  • Investing in infrastructure—community centres and swimming pools, roads, transit and highways— to create immediate jobs;
  • Cutting taxes and offering new incentives to Canadian businesses and families;
  • Cutting bureaucratic red tape so businesses could better focus their time and resources; and
  • Investing in science, technology, agriculture and tourism.

And because Prime Minister Harper recognized the global economic challenges facing southern Ontario, Canada's Economic Action Plan created the Federal Economic Development Agency for Southern Ontario, or better known as FedDev Ontario, with a $1 billion, five-year mandate to deliver economic development and growth to the region that are tailored to the unique needs and priorities of our workers and businesses.

Ladies and gentlemen, it's hard to imagine the position we could have been in right now, had we not taken bold action. But instead, I'm proud to say that our Plan is working.

More than 17,000 jobs were created in Ontario last month. And more than 160,000 throughout the province since last May. Canada's GDP grew a whopping 6.1% during the first quarter of 2010.

Car sales are up. Consumers are spending again, and the economy is growing because of it.

The actions of our government have brought Canada from a time of desperation and despair to inspiration and opportunity. But although the future looks promising, this is no time to stop or become over-confident. As we all know, other countries are still in trouble, some grave trouble. And we must ensure that our own recovery isn't front-end loaded.

We must build on the momentum of our economic growth, and our timing is crucial. But we cannot do it alone. Public sector stimulus investments will be winding down this year. We need the private sector to increase their investments. Now is the time to act.

I was very honoured when I was asked by the Prime Minister to be Minister of State for FedDev Ontario. Since the Agency was established less than one year ago, we have accomplished a great deal, putting immediate investment into organizations and projects that are helping to build and secure our economy today and for the future.

The Agency has already committed almost $500 million dollars to projects all across southern Ontario through Economic Action Plan initiatives such as the Community Adjustment Fund, and through investments in strategic partnerships:

  • With the Canadian Manufacturers and Exporters Association to assist businesses that want to sell their products abroad,
  • With the Business Development Bank of Canada to increase venture capital, and
  • With the National Research Council's Industrial Research Assistance Program to help small- and medium-sized businesses innovate.

We have also made investments in communities, businesses and not-for-profit organizations throughout southern Ontario. We have designed programming that is strategically helping our businesses and communities stabilize and diversify at the same time.

We started last fall by investing in projects that would address immediate needs and help mitigate the short-term impacts of the economic downturn by creating jobs.

Through the Community Adjustment Fund, we have invested in communities hardest hit throughout the region, to create jobs now and jobs for the future. These programs provide improved infrastructure and business development opportunities.

I'd like to share with you today an example of that funding at work and its impact on local communities. Let's have a look. [Visit http://www.youtube.com/user/FedDevOntario for a video on St. Clair College's Community Adjustment Fund project].

As our economic recovery grew stronger in southern Ontario and our needs changed, we changed. We expanded our programs to focus on creating better, longer-term jobs and providing support and resources to build the economy.

Last fall we launched the Southern Ontario Development Program, to support projects that will increase production or allow them to reach new markets. I'd like to share with you now one of the success stories that have come from that program. [Visit http://www.youtube.com/user/FedDevOntario for a video on John G. Wilson Machine Limited's Southern Ontario Development Program project].

Friends, not many people know this, but the second largest manufacturing sector in southern Ontario is the food and beverage industry.

This industry needs help finding skilled labour, so our government is helping Conestoga College build a new Institute for Food Processing Technology so they can train people in this important and growing field. We also made available $20 million to companies in the food and beverage processing industry because of the growing global competition facing this sector.

This allowed businesses to innovate and purchase new equipment in order to expand and compete. Let's take a look now at one example of how this support has come to life. [Visit http://www.youtube.com/user/FedDevOntario for a video on Italian Home Bakery's Southern Ontario Development Program – Food and Beverage Initiative project].

And because we understand that accelerating innovation always has a positive return, FedDev Ontario is investing in game-changing projects that have the potential to alter the landscape of medical and technological research in southern Ontario.

An example is our commitment of $20 million for the Juvenile Diabetes Research Foundation of Canada to establish a clinical trials network led by the University of Waterloo.

This will not only create jobs now and save lives, as new technologies such as the artificial pancreas come to market, we will make sure that southern Ontario continues to be a leading destination for world-class research and commercialization opportunities.

Over the past few years, as Minister of State for Science and Technology and as Minister of State for FedDev Ontario, I have listened to what business, industry and community leaders have told me about the challenges they face each day regarding productivity, competition and innovation in the changing economic landscape.

I had the chance to see first-hand the opportunities that exist across this region–in our ideas, resources, technologies, products, services and people.

Our goal now is to unleash this potential–the tools, the strategy, the willingness to take risks, the partnerships and the funding–to bring them to life.

Together, we must focus on opportunities to:

  • Encourage the next generation of innovators and entrepreneurs;
  • Plan for the labour needs of tomorrow;
  • Support increased access to capital for higher-risk endeavours;
  • Cultivate and commercialize innovation;
  • Diversify our economy;
  • And improve the productivity of private sector firms.

Innovation is vital to stimulating productivity and growth. Businesses need to start by considering the strengths of our competitors, take ownership of our own strengths and most importantly, determine how we can effectively use our best resources to our advantage.

Together, we have accomplished quite a lot. Our government wants to work with you, as a team. Industry must step up, take calculated risks, reach out and innovate, increase productivity and become more competitive.

We need to build upon the Southern Ontario Advantage.

Our government, through FedDev Ontario, is working—with the private, not-for-profit, research institutes and the academic sectors—to position southern Ontario as a top competitor once again in the global economy.

Our people, without a doubt, are our greatest asset. The intellectual capital–the knowledge, experience and talent of the people of southern Ontario is the source of our sustainable competitive advantage. However, one challenge we find ourselves facing is how to most effectively develop the skills and potential of southern Ontario residents.

We need to highlight to the world our People Advantage.

With pressures from an aging workforce, combined with shortages in the skilled trades, it is possible we will soon encounter labour and skills shortages while trying to lead in the knowledge-intensive economy.

Did you know that in Canada, science and engineering degrees make up only about a quarter of all new degrees? This is well below the OECD average and we are falling further behind places like Korea where over 40% of graduates hold degrees in these fields.

Not only do we need more students working on research and innovation in classrooms and labs, but we need more graduates with business skills, who will be the modern management teams that lead business innovation in the future.

Hiring those talented, educated people will reward your business and the world. At the same time, these actions invigorate and encourage young people's interest in these areas of study and work. As existing jobs become more technologically driven, existing employees will also need new skill sets.

To foster this southern Ontario people advantage, our government will continue to work with our academic institutions, non-government organizations, research centres and institutions, and the private-sector to develop the skills of our scientists and engineers, and build our future talent pool through training and mentorships.

Although it's important to have a well-trained and highly skilled workforce, they also need to have access to the knowledge and research and development capacity to help get their ideas into the marketplace.

We must create a Knowledge Advantage.

Small- and medium-sized enterprises often face a lack of internal R&D and pre-commercialization capacity, which limits their ability to innovate.

In fact, Canada is ranked 16th among the OECD countries in the intensity of business research and development. And as a percentage of our GDP, business expenditure on R&D in Canada declined by 20% between the collapse of the technology boom in 2001 and 2007, consistently below the OECD average.

We have the opportunity to participate in the development of game-changing technology in emerging and competitive fields such as ICT, medical devices and clean energy.

With more than 100 companies and 12 research centres throughout the province dedicated to alternative energy R&D, for example, we have access to expertise in solar and wind power, biofuel production and fuel cells right here at our fingertips.

FedDev Ontario is devoting significant attention to this issue through programs such as the Applied Research and Commercialization Initiative.

This is an initiative I had the pleasure of announcing just a few months ago. It provides up to $15 million to help our colleges, universities and polytechnic institutions build partnerships with southern Ontario small- and medium-sized businesses.

We need to create game-changing projects that will demonstrate southern Ontario's talent to Canada and to the world.

It is by fostering these types of partnerships between academia, the private sector and government, that we will create the southern Ontario knowledge advantage. But even if we have the greatest people, with the greatest knowledge–it's not enough. We need to invest money in new and emerging sectors with significant market potential.

We need to strengthen our Entrepreneurial Advantage.

We must harness the entrepreneurial spirit of this region, nurture great ideas, and build an environment of support that encourages the necessary risks to bring us to that next level.

Government and businesses need to provide greater opportunities for southern Ontario businesses to accelerate the development of new technology with commercial potential.

A southern Ontario entrepreneurial advantage will:

  • support the commercialization of new innovations, and
  • help businesses access venture capital and other investment opportunities.

We also need to provide budding entrepreneurs willing to take risks with access to funding to support their ideas. This is another major issue that is raised consistently among our stakeholders: the lack of access to capital, particularly from non-traditional sources.

We need a renewed confidence and commitment from investors in southern Ontario ideas.

At the same time, however, we must demonstrate results that prove they are worth investing in.

Even with our people, knowledge and entrepreneurial potential tapped, we still face issues that prevent us from attaining an optimal global position.

We must define and support a Prosperity Advantage.

We must improve productivity, diversify our economy and encourage investment and competition. Our lagging productivity remains one of our biggest challenges.

In fact, in Canada, our productivity ranking has dropped from third among the 20 countries in the OECD in 1960 to 15th today. This is a slide that must stop.

In addition to improving productivity, our businesses must diversify and re-focus in areas, processes and sectors that demonstrate growth. For example, both the Bank of Canada and Conference Board of Canada suggest we need to turn our attention to investments in information and communication technology and software.

This is an area in which we are investing just over half the level of the US per worker per year, even though it has been linked to stronger productivity in many countries.

To help fix this, our government introduced a 100 per cent capital cost allowance.

We know that with a critical mass of people, R&D, and resources, we will create jobs and generate dollars. But investing in these three areas alone is not enough.

We will work to create a southern Ontario Prosperity Advantage, which will focus on:

  • encouraging business productivity;
  • encouraging significant business investment leading to new job opportunities–high quality, well paying, long-lasting jobs; and
  • helping to diversify the regional economy in the hardest hit areas of southern Ontario, especially in one-industry towns.

For example, with the growing interest in hybrid and electric engines for automobiles, electricity generation and distribution, there will be considerable opportunities for growth in the industry in the coming years.

By investing in and developing these types of competitive advantages throughout southern Ontario, we will attract businesses, as well as national and foreign investment because of our reputation for the skills and talent that exist here.

And at the end of the day this translates to more jobs, growth, and prosperity for all.

Our goals are to create real results for southern Ontario – for businesses, researchers, entrepreneurs, communities and residents–the people who work in the region, who live in the region, who invest in the region.

Over the last four years, our government has been instrumental in creating a positive economic and policy climate and we will continue to work to put in place conditions for productivity revival.

FedDev Ontario has approximately $700 million still available to invest in skills and training, innovation and research, productivity and business development.

In the near future, our Agency will begin to launch targeted and strategic new initiatives to support our goals.

But to maximize and leverage this funding, we need the full engagement, participation and support of you, our partners.

We all must participate in this together, each defining our unique roles, tackling this as one force, and positioning our region as a true global competitor moving forward.

Our Government has stepped up to that plate. All along, we never took our eye off the ball to continue to build upon our natural strengths and new opportunities.

But we cannot do this alone.

Because without your expertise, ideas, skills, knowledge, people and passion, we really have nothing.

The potential for game-changing innovation exists in your offices, your board rooms, laboratories and on the floors of the factories throughout southern Ontario.

You must explore new market opportunities, especially in new countries, and find ways to diversify your product or services. Seek out new collaborations, but also reach out to existing partners.

Because it is through strategic investments, partnerships and collaborations that we will foster innovation and increase southern Ontario's productivity and competitiveness, reversing the slide.

Together, we will be the driving force of the Canadian economy once more. To each person in this room, think about the role you can play in helping us to build a Southern Ontario Advantage.

And I appeal to each of you to carry this discussion beyond this room, to ask your colleagues, partners, friends, peers and families what they will do to help build a Southern Ontario Advantage. I know the role that we want to play at FedDev Ontario.

Our government is committed to creating conditions where ideas can be nurtured and realized, high-quality jobs created and economic growth achieved, but we need your help.

And over the coming years, FedDev will continue to work to bring together people, information, ideas, businesses and systems to create a stronger southern Ontario.

The world needs to know, and our workforce needs to know:

We are here to compete. We are here to grow. We are here to produce. We are here to innovate. We are here to diversify. We are here to prosper. Together, as a team, we will strengthen the Southern Ontario Advantage.

Thank you. Merci.

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