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  • 1. urbanMetrics inc. market, economic and strategic advisors Town of Caledon Competitive Analysis ` Prepared for: Town of Caledon Economic Development & Communications Department Date: December 2006 (final) urbanMetrics inc. 144 Front Street West, Suite 460 Toronto, Ontario M5J 2L7 P: 416-351-8585 / 1-800-505-8755 F: 416-345-8586 www.urbanmetrics.ca
  • 2. urbanMetrics inc. market, economic and strategic advisors 144 Front Street West, Suite 460 Toronto, ON, M5J 2L7 P: 416-351-8585 / 1-800-505-8755 F: 416- 345-8586 www.urbanmetrics.ca December 22nd, 2006 Mr. Norm Lingard Manager of Economic Development & Communications Town of Caledon 6311 Old Church Road Caledon, Ontario L7C 1J6 Dear Mr. Lingard: Re: Town of Caledon Competitive Analysis – Final Report I am pleased to provide you with a copy of the Town of Caledon Competitive Analysis final report. As appropriate, I am available to discuss any aspect of this work with you. I trust you will find it satisfactory. It has been a pleasure working with you. Yours truly, urbanMetrics inc. Lauren Millier Partner
  • 3. TOWN OF CALEDON COMPETITIVE ANALYSIS Table of Contents EXECUTIVE SUMMARY 1. INTRODUCTION ........................................................................................................................ 1-5 1.1 PURPOSE OF THE REPORT ..............................................................................................................1-5 2. DEMOGRAPHIC PROFILE ......................................................................................................... 2-7 2.1 POPULATION ...............................................................................................................................2-7 2.2 LABOUR FORCE .........................................................................................................................2-10 2.3 EDUCATION ..............................................................................................................................2-10 2.4 EMPLOYMENT AND INCOME .......................................................................................................2-12 2.5 COMMUTING FLOWS .................................................................................................................2-14 2.6 HOUSING CHARACTERISTICS.......................................................................................................2-16 3. LOCAL INDUSTRY SECTOR ANALYSIS .................................................................................... 3-18 3.1 CALCULATION OF LOCATION QUOTIENTS ....................................................................................3-19 3.2 LOCATION QUOTIENTS WITH HIGH CONCENTRATIONS...................................................................3-20 3.3 KEY FINDINGS............................................................................................................................3-29 4. TARGET SECTOR IDENTIFICATION – PROVINCIAL CONTEXT ................................................ 4-34 4.1 IDENTIFICATION AND FORECAST PERFORMANCE OF EXPORT SECTORS ............................................4-35 4.2 ECONOMIC DEVELOPMENT ORGANIZATIONS...............................................................................4-38 4.3 SECTORS ...................................................................................................................................4-39 4.3.1 Plastics and Rubber Manufacturing....................................................................... 4-39 4.3.2 Transportation and Logistics .................................................................................... 4-40 4.3.3 Food Manufacturing ................................................................................................ 4-42 4.3.4 Advanced Manufacturing ...................................................................................... 4-44 5. COMPETITIVE ANALYSIS ........................................................................................................ 5-45 5.1 GENERAL COMPARATORS..........................................................................................................5-45 5.1.1 Population Growth ................................................................................................... 5-45 5.1.2 Labour Force Growth ............................................................................................... 5-46 5.1.3 Income (Household and Personal)......................................................................... 5-47 5.1.4 Average Housing Prices ........................................................................................... 5-48 5.2 BUSINESS CASE COMPARATORS .................................................................................................5-48 5.2.1 Municipal Tax Rates.................................................................................................. 5-49 5.2.2 Development Charges ............................................................................................ 5-49 5.2.3 Electricity Rates ......................................................................................................... 5-50 5.2.4 Water and Wastewater Rates................................................................................. 5-52 5.2.5 Price per Acre of Serviced Employment Land...................................................... 5-53 5.2.6 Summary of Cost Comparators .............................................................................. 5-54 urbanMetrics inc. market, economic and strategic advisors
  • 4. TOWN OF CALEDON COMPETITIVE ANALYSIS 5.3 SUMMARY .................................................................................................................................5-56 6. COMMUNITY SWOT ANALYSIS .............................................................................................. 6-58 6.1 STRENGTHS ................................................................................................................................6-58 6.2 WEAKNESSES .............................................................................................................................6-59 6.3 OPPORTUNITIES .........................................................................................................................6-61 6.4 THREATS ....................................................................................................................................6-62 7. RECOMMENDATIONS ............................................................................................................ 7-64 7.1 WHAT DRIVES SITE SELECTION?...................................................................................................7-64 7.2 MARKETING DIRECTION .............................................................................................................7-66 urbanMetrics inc. market, economic and strategic advisors
  • 5. TOWN OF CALEDON COMPETITIVE ANALYSIS Executive Summary In the fall of 2006, the Town of Caledon’s Economic Development & Communications Department completed a Competitive Analysis to gain a better understanding of the local economy in order to determine what types of industries it should be targeting. The objective of the work was to identify Caledon’s economic sectors of importance and those emerging sectors of significance. This would form the foundation of a tailored marketing program to meet the current and future needs of the Town. In promoting economic growth the Town is ensuring that the community remains vibrant and competitive, and has the tools necessary to respond to a marketplace that has become increasingly global in nature. The approach in completing this study has included a range of efforts: • Community and Economic Profiling; • Sectoral and Employment Concentration Analysis; • Stakeholder Consultation with Local Business Leaders, Provincial and Regional Economic Development Agencies, local business associations and public officials; • Community Competitive Analysis; • SWOT (Strengths, Weaknesses, Opportunities and Threats) Analysis; and • Target Sector Identification The following discussion summarizes the key findings as it relates to the positioning of the Town of Caledon future business attraction. Summary of Key Findings • The Town of Caledon prides itself on having small town ambiance while providing all the advantages of a well-serviced urban centre. It is a unique community in that it belongs to one of North America’s most dynamic regions, the Greater Toronto Area, while maintaining a small town charm and lifestyle. With its natural environment, golf courses, and parks, Caledon has become a prosperous community and attractive place to live. • The anticipated rate of growth in the Town of Caledon over the next 25 years will be significant and the resulting population and employment growth will have an impact 1-1 urbanMetrics inc. market, economic and strategic advisors
  • 6. TOWN OF CALEDON COMPETITIVE ANALYSIS on the nature of the community and the demand for serviced land as well the opportunities to drive increased business investment. • The proportion of the population under the age of 30 has seen a substantial increase in recent years. This demonstrates the sustainability of the local labour force and an opportunity for the Town to attract a greater proportion of investment activity. • There has also been a significant increase in the number of people over the age of 50. This increase is likely a result of an inflow of affluent residents that have relocated or retired to Caledon for its perceived rural lifestyle, safer neighbourhoods and high quality of life. An important consideration for the Town will be the demand to provide an increasing range of amenities and services (health care, community programming) for this portion of the population. • The degree of outflow of residents to employment in other jurisdictions, coupled with the fact that the Town is able to attract employees from across the GTA, should be a consideration in the attraction and retention of business investment. • The Town of Caledon demonstrates a significant concentration of local employment in agriculture, construction, transportation and warehousing, arts, entertainment and recreation, manufacturing and wholesale trade. • A review of industry concentration in the study area and an analysis of the local and regional economies, identified Manufacturing, and in particular advanced manufacturing activities and food product manufacturing, as the Town’s target sectors for investment attraction. Professional Scientific and Technical services was also seen as an emerging opportunity for the Town. The Town is also well positioned to attract Transportation and Logistics operations, but this form of investment should be well managed rather than actively targeted. • Based on Ontario’s export base and the pattern of business investment in the province over the last 5 years, the Province of Ontario, through the Ministry of Economic Development and Trade and the Ontario Investment Service is promoting Ontario as having locational and competitive advantages in Automotive, Chemicals, Food, Machinery and Plastics. In discussion with provincial representatives, there is keen interest in communities outside of the larger urban areas. The promotion of smaller urban/rural locations across the Province may support the investment attraction efforts of the Town. 1-2 urbanMetrics inc. market, economic and strategic advisors
  • 7. TOWN OF CALEDON COMPETITIVE ANALYSIS • A comparative analysis of the Town with five other ‘competitive’ jurisdictions suggests that Caledon is competitively positioned within the GTA in its efforts to attract business investment based on key site location factors. The margin of difference between the Study Area and the communities outside the GTA however, heightens the importance of the marketing message and the positive business environment that is required to advance interest and investment. The status of serviced land in these communities coupled with their distance to the GTA may afford Caledon some short term benefits in the effort to attract new business investment. • From the perspective of attracting and retaining business investment, Caledon is seen as providing good transportation connections to Provincial highways and improvements underway will further enhance the Town’s position. Its proximity to the international airport, intermodal facilities and cargo and logistics companies is seen as an advantage for local companies looking to export internationally. • The most significant impediment to future economic development efforts however, has been the lack of planning to deal with the rate of growth in the community. Attention must be given to the timely development of high quality serviced employment land, access to public transit, affordable housing and the interface between the Town’s urban and rural communities. • The Town should continue to promote the inventory of vacant employment land in Bolton and Tullamore as well as future development opportunities in Mayfield West along the future Highway 410 extension. This will enable the Town to take full advantage of the opportunities of the growing GTA economy. • There are considerable local strengths to justify Caledon’s continuing involvement in Advanced Manufacturing initiatives through the Greater Toronto Marketing Alliance (GTMA). Historically, the Town has been involved with the GTMA’s Automotive Investment Attraction Committee (AIAC), now the Advanced Manufacturing Committee, which is focused on advanced manufacturing industries from Aerospace, Automotive and Industrial Design. In the absence of a marketing plan that includes opportunities to market the community internationally, it is recommended that the Town continue with and heighten its involvement with the GTMA as its employment lands come on stream. • Given the significant number of businesses that indicated plans to expand their business in the short term, it is also critical that the Town be seen as facilitators of this investment. The Town of Caledon needs to establish a formal Business Retention and Expansion Program (BR+E). As part of this effort, a more aggressive Corporate Calling 1-3 urbanMetrics inc. market, economic and strategic advisors
  • 8. TOWN OF CALEDON COMPETITIVE ANALYSIS Program should involve the Mayor as well as other senior personnel, and Caledon’s Business Ambassadors. 1-4 urbanMetrics inc. market, economic and strategic advisors
  • 9. TOWN OF CALEDON COMPETITIVE ANALYSIS 1. Introduction Economic development will take on an increasingly important role within the Town of Caledon in the future. The Town has experienced and continues to face substantial growth pressures with future urban growth to both the south and the east. In order to ensure the Town is able to maintain a balance between residential development and employment growth, economic development activities that position the Town to retain and attract desirable business investment while maximizing tax assessment and land use opportunities become more essential. In light of the pressures for businesses to compete on a regional and even global level, the Town of Caledon faces considerable competition in its efforts to sustain and expand local economic activity. The Town must deal with local issues that include demographic shifts, the suitability and quality of existing industrial lands, skills gaps and training requirements, and the direct competition that results from the Town’s location in the Greater Toronto Area. urbanMetrics inc. was retained by the Town of Caledon to prepare an economic sectors analysis that would assist staff to more precisely understand key growth sectors in the community; identify the opportunities offered by emerging sectors; and determine what types of industries the Town should be targeting. 1.1 Purpose of the Report The overall goal of this report is to identify Caledon’s economic sectors of importance and those emerging sectors of significance. Related to this goal is the need to better understand Caledon’s economic strengths and weaknesses as well as its opportunities and threats to new business investment. This in turn will enable staff to develop and implement an investment marketing program that would promote the community as a desirable location for business growth. The local/regional profile and target sector analysis that was completed serves to further refine and finalize Caledon’s target sectors, and sets the stage for the recommended approach to a marketing plan. The results of the stakeholder interviews and SWOT analysis provides insight into current strengths, weaknesses and future opportunities and threats associated with the Town’s ability to retain and attract businesses operating within key sectors of the economy. 1-5 urbanMetrics inc. market, economic and strategic advisors
  • 10. TOWN OF CALEDON COMPETITIVE ANALYSIS A competitive analysis was also undertaken in order to demonstrate the comparative advantages that the Town has relative to select jurisdictions. Consideration was given to key location criteria that should be the focus of any business attraction effort. The results of the analysis are presented herein as the Draft Report to the Town of Caledon. 1-6 urbanMetrics inc. market, economic and strategic advisors
  • 11. TOWN OF CALEDON COMPETITIVE ANALYSIS 2. Demographic Profile This section provides a baseline demographic profile for the Town of Caledon. Unless otherwise stated the information has been sourced from Statistics Canada and the 2001 Census. 2.1 Population Peel Region, including the Town of Caledon, has experienced significant population growth over the past decade. According to Statistics Canada, Peel Region and the Town of Caledon experienced a population growth of 16% and 27% respectively between 1996 and 2001. The Financial Post Markets – Canadian Demographics 2006 1 publication has estimated an overall population of 1,216,155 for Peel Region and 66,366 for Caledon, representing a further 23% and 31% increase from 2001 population levels. According to the Ministry of Public Infrastructure Renewal’s Places to Grow – A Growth Plan for the Greater Golden Horseshoe 2 , the population level projected for Peel Region is 1,640,000 for the year 2031. Peel Region’s initial forecast prior to the release of the Places to Grow growth plan had projected a population of 1,571,000 by 2031. In this projection Caledon is estimated to have a population of 84,000 by 2031. In summer 2006, however, the Town of Caledon released an updated population forecast that projects a population of 108,000 by the year 2031. This forecasted growth is based on current trends but is expected to occur outside of settlement areas currently designated in Caledon’s Official Plan and the Regional Official Plan. Overall, with the Places to Grow projections and targets for the Golden Horseshoe, Caledon’s population will double by 2031 from its 2001 level. As a result, the Town needs to manage to both a growing population and employment base. Along with the population increase, the composition of Caledon’s population has also changed in the last five years (Figure 1). Comparing 2001 Census data with the estimates provided in the Financial Post Markets – Canadian Demographics 2006 3 publication, we are 1 2006 population estimates are provided by MapInfo Canada based on Census variables, FP Markets – Canadian Demographics 2006, November 2005. 2 Places To Grow population estimates based on Hemson Consulting Limited, “The Growth Outlook for the Greater Golden Horseshoe”, January 2005. 3 2006 population estimates are provided by MapInfo Canada based on Census variables, FP Markets – Canadian Demographics 2006, November 2005. 2-7 urbanMetrics inc. market, economic and strategic advisors
  • 12. TOWN OF CALEDON COMPETITIVE ANALYSIS able to identify those age cohorts that have grown the most significantly over the past five years. While population growth has been experienced across all age cohorts, the employment “feeder group”, those aged 20-24 years, experienced the most substantial growth, increasing an estimated 58% from 2001. The 25 to 29 age cohort increased by 66% over the same period. Both cohorts have also increased their proportion of Caledon’s total population. In 2001, the “20 to 29 age” cohort comprised only 10.5% of Caledon’s total population as compared to 12.9% in 2006. This is significant as this demonstrates sustainability of the local labour force and may also be indicative of the community’s potential for knowledge workers. The other group exhibiting significant change was the “55 to 59 age” and above cohorts. These cohorts each grew by an estimated 45% over the past 5 years. This group may represent a more affluent segment of the population looking to relocate or retire in Caledon for its perceived rural lifestyle, safer neighbourhoods and high quality of life. As a result, amenities and services for retirees (i.e. health care and community programs) may become an important consideration for Caledon in the future. This shift in demographics also has implications for the Town’s labour force capacity. While the younger age cohorts are growing, an aging population may mean that local companies will increasingly have to recruit employees from outside the community, or that prospective companies may view the Town less favourably as the labour force is not seen as sustainable over the longer term. 2-8 urbanMetrics inc. market, economic and strategic advisors
  • 13. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 1 TOWN OF CALEDON AGE BREAKDOWN 7,000 2001 CENSUS 6,000 EST. 2006 5,000 4,000 3,000 2,000 1,000 0 ea r s ea r s ea r s ea r s ea r s ea r s ea r s ea r s ea r s ea r s ea r s ea r s ars ars d up 4 ye 9 ye 14 y 19 y 24 y 29 y 34 y 39 y 44 y 49 y 54 y 59 y 64 y 69 y n 70 a 0 to 5 to 10 to 15 to 20 to 25 to 30 to 35 to 40 to 45 to 50 to 55 to 60 to 65 to SOURCE: STATISTICS CANADA, CENSUS 2001; FP MARKETS – CANADIAN DEMOGRAPHICS 2006 2-9 urbanMetrics inc. market, economic and strategic advisors
  • 14. TOWN OF CALEDON COMPETITIVE ANALYSIS 2.2 Labour Force Figure 2 illustrates labour force by occupation in the Town of Caledon. In 2001, the total labour force in Caledon was 29,670, a 30% increase from 1996. The labour force has increased at a higher percentage (30%) than the population (27%) over the same time period, suggesting a greater proportion of the population is now active in the labour force. According to FP Markets – Canadian Demographics 2006, this pattern continues between 2001 and 2006. Caledon’s labour force is estimated to have grown to 40,172 in 2006, a 35% increase from 2001, while population is projected to have grown by 31%. According to both Statistics Canada’s Census 2001 and reaffirmed by the projection made by FP Markets – Canadian Demographics 2006, Caledon’s labour force is concentrated in four sectors: Management & Related Occupations; Business, Finance and Administration; Sales & Service; and Trades, Transportation and Equipment Operators. Based on the 2006 projections, Caledon could anticipate between 30% and 40% growth in all occupational sectors from 2001 to 2006. FIGURE 2 TOWN OF CALEDON LABOUR FORCE BY OCCUPATION OCCUPATION CALEDON 2001* % CALEDON 2006** % Est. % Change Total - Experienced labour force 29,670 100 40,172 100 35.40 Business, Finance & Administration 6,210 27.56 8,474 28.66 36.46 Sales & Service 5,510 24.46 7,382 24.96 33.97 Management 5,195 23.06 7,150 24.18 37.63 Trades, Transportation & Equipment. Operators & 4,685 20.79 6,389 21.61 36.37 Related Social Science, Education, Government Service and 2,130 9.45 2,879 9.74 35.16 Religion Natural and App. Sciences and Related 1,670 7.41 2,326 7.87 39.28 Occupations unique to Processing, Manuf. & Utilities 1,355 6.01 1,735 5.87 28.04 Occupations unique to Primary industry 1,255 5.57 1,656 5.60 31.95 Health 880 3.91 1,156 3.91 31.36 Art, Culture, Recreation & Sport 790 3.51 1,025 3.47 29.75 *S O UR C E : S T A T IS T IC S C A N A D A , C E N S US 2 0 0 1 **S O UR C E : F P M A R KE T S - C A N A D IA N D E M O G R A P H IC S 2 0 0 6 2.3 Education An important input for industry is the availability and access to human capital. Ready access to skilled and semi-skilled labour provides a high degree of value for business operations. The educational attainment of the local population can also be a source of 2-10 urbanMetrics inc. market, economic and strategic advisors
  • 15. TOWN OF CALEDON COMPETITIVE ANALYSIS competitive advantage for a community. Figure 3 illustrates the education attainment for the “20 to 64 age” cohort in the Town of Caledon. Although a significant portion of Caledon’s residents have attained some form of post secondary education – be it university, college or a trade certificate – 45% of the “20 to 64 age” cohort have a high school education or less. This is equal to the Ontario average but higher than Toronto Census Metropolitan Area (27%). Given the projected growth in the younger age cohorts between 2001 and 2005, this situation may have improved itself somewhat. However, the quality of the local labour, particularly if the Town wishes to attract more ‘value-added’ business investment, is an important component in the marketing of local investment capacity. Figure 4 provides a breakdown of Caledon residents with post secondary education. The dominant fields of study are Commerce, Management & Business Administration (25%) and Engineering & Applied Sciences & Trades (23%). The strength in both of these fields of study represents an opportunity for Caledon to retain and attract knowledge-based and business service industries. Overall, 5 fields of study represent 75% of Caledon’s population with post secondary education: Commerce, Management & Business Administration (26%); Engineering & Applied Sciences & Trades (23%); Social Science & related fields (11%); and Educational, Recreational & Counseling Services (11%); Health professions, sciences and technologies (7%). FIGURE 3 TOWN OF CALEDON EDUCATION ATTAINMENT FOR AGE GROUP 20 TO 64 10000 8000 6000 4000 2000 0 Less than High High School Trades College University School and/or Some Certificate or Certificate or Certificate, Post Secondary Diploma Diploma Diploma or Degree SOURCE: STATISTICS CANADA, CENSUS 2001 2-11 urbanMetrics inc. market, economic and strategic advisors
  • 16. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 4 TOWN OF CALEDON POST SECONDARY EDUCATION Mathematics & Physical Sciences Health Professions, Sciences & Technologies Engineering & Applied Science Technologies & Trades Engineering & Applied Sciences Agricultural, Biological, Nutritional, & Food Sciences Commerce, Management & Business Administration Social Sciences & Related Fields Humanities & Related Fields Fine & Applied Arts Educational, Recreational & Counselling Services 0% 5% 10% 15% 20% 25% SOURCE: STATISTICS CANADA, CENSUS 2001 2.4 Employment and Income According to 2001 Census data, Caledon’s income levels are higher than a majority of municipalities. Figure 5 illustrates the average family income in Caledon to be significantly higher than the Ontario average and one of the highest in the province. This further supports the town’s characterization as an affluent suburban/rural community. Figure 6 provides labour force statistics for the Town of Caledon compared to the Toronto CMA (Census Metropolitan Area). Caledon’s participation and employment rates are significantly higher than the Toronto CMA as a whole. The low unemployment rate in Caledon suggests full employment of its available labour force. The higher wage rates (or income) in Caledon has a direct relationship with the largely educated labour force and concentration in two higher paying occupational sectors: Management & Related Occupations; and Business, Finance & Administration. Given the potential for higher labour costs, a fully employed workforce and earning at above average levels, to be competitive the Town needs to attract businesses requiring a knowledge-based workforce and high value input for their operations in order to be competitive. 2-12 urbanMetrics inc. market, economic and strategic advisors
  • 17. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 5 TOWN OF CALEDON AVERAGE FAMILY INCOME Number of Median Family Name Families Income ($) Ontario   3,190,985 $61,024    Oakville 41,115 $90,920    Aurora 11,220 $88,459    Tecumseh   7,245 $87,595    King 5,365 $86,726    LaSalle 7,315 $86,013    Puslinch 1,705 $85,450    Caledon 14,715 $84,223    Mono 2,010 $83,354    Whitchurch-Stouffville 6,230 $82,860    Whitby 24,530 $80,562    Pickering 24,530 $80,264    Newmarket 18,190 $80,225    Halton Hills 13,820 $80,223 SOURCE: STATISTICS CANADA, CENSUS 2001 FIGURE 6 LABOUR FORCE INDICATORS INDICATORS CALEDON 2001* CALEDON 2006** TORONTO CMA 2001* TORONTO CMA 2006** PARTICIPATION RATE 76.9 76.2 68.8 68.9 EMPLOYMENT RATE 74.4 73.4 64.7 64.5 UNEMPLOYMENT RATE 3.3 3.6 5.9 6.4 * SOURCE: STATISTICS CANADA, CENSUS 2001 ** SOURCE: FP MARKETS - CANADIAN DEMOGRAPHICS, ESTIMATE FOR 2006 2-13 urbanMetrics inc. market, economic and strategic advisors
  • 18. TOWN OF CALEDON COMPETITIVE ANALYSIS 2.5 Commuting Flows This section looks at the labour force commuting flows for the Town of Caledon. It analyzes the place of work for residents from Caledon and the place of residence for workers who commute to Caledon for employment. Consideration is given to the employed labour force 15 years and older as having a usual place of work, and only accounts for flows greater than or equal to 20 persons. FIGURE 7 PLACE OF WORK OF CALEDON RESIDENTS Figure 7 displays the place of work of Caledon residents. PLACE OF RESIDENCE / PLACE OF WORK TOTAL % Approximately 75% of the resident Caledon (T) / Caledon (T) 5,630 24.53 labour force commutes to Caledon (T) / Toronto (C) 5,085 22.15 employment outside of Caledon. Caledon (T) / Mississauga (C) 4,560 19.86 Furthermore, of those residents Caledon (T) / Brampton (C) 3,815 16.62 commuting to employment outside Caledon (T) / Vaughan (C) 1,835 7.99 of Caledon, 36% commute to Caledon (T) / Orangeville (T) 500 2.18 municipalities within Peel Region Caledon (T) / Markham (T) 235 1.02 (Mississauga and Brampton), 22% Caledon (T) / Oakville (T) 185 0.81 are commuting to Toronto and Caledon (T) / Richmond Hill (T) 155 0.68 another 8% commute to Vaughan. Caledon (T) / Halton Hills (T) 145 0.63 Caledon (T) / Newmarket (T) 125 0.54 While this scenario is now 5 years Caledon (T) / King (TP) 110 0.48 old, it is not anticipated to have Caledon (T) / New Tecumseth (T) 105 0.46 Caledon (T) / Milton (T) 85 0.37 changed significantly. This has Caledon (T) / Aurora (T) 75 0.33 implications for the Town in that Caledon (T) / Guelph (C) 75 0.33 there may be opportunity to target Caledon (T) / Mono (T) 65 0.28 firms that are looking to recruit the Caledon (T) / London (C) 45 0.20 type of skills represented by the Caledon (T) / Erin (T) 40 0.17 Caledon labour force. This in turn Caledon (T) / Burlington (C) 30 0.13 would require consideration of the Caledon (T) / Barrie (C) 30 0.13 type, quality and location of local Caledon (T) / Hamilton (C) 25 0.11 employment land. T- Town , C- City 22,955 100.00 SOURCE: STATISTICS CANADA, CENSUS 2001 2-14 urbanMetrics inc. market, economic and strategic advisors
  • 19. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 8 PLACE OF RESIDENCE FOR THOSE WHO WORK IN CALEDON Figure 8 displays the place of residence for people who work in PLACE OF RESIDENCE/ PLACE OF WORK TOTAL % the Town of Caledon. Caledon Caledon (T) / Caledon (T) 5,630 42.3 residents account for 42.3% of local Brampton (C) / Caledon (T) 1,675 12.6 employment. Of those people Toronto (C) / Caledon (T) 1,205 9.0 commuting into Caledon for Mississauga (C) / Caledon (T) 695 5.2 employment, it should be noted that Orangeville (T) / Caledon (T) 585 4.4 New Tecumseth (T) / Caledon (T) 555 4.2 approximately 17.8% come from Vaughan (C) / Caledon (T) 390 2.9 other municipalities within Peel Adjala-Tosorontio (TP) / Caledon (T) 315 2.4 Region. What is notable is how local King (TP) / Caledon (T) 230 1.7 employment opportunities in the Halton Hills (T) / Caledon (T) 190 1.4 Town have been able to draw Mono (T) / Caledon (T) 175 1.3 individuals from a wide range of Erin (T) / Caledon (T) 155 1.2 communities throughout the GTA Newmarket (T) / Caledon (T) 140 1.1 and beyond. This may be a Guelph (C) / Caledon (T) 105 0.8 consideration for future economic Bradford West Gwillimbury (T) / Caledon (T) 105 0.8 development initiatives to attract Barrie (C) / Caledon (T) 105 0.8 Richmond Hill (T) / Caledon (T) 90 0.7 and retain businesses. Amaranth (TP) / Caledon (T) 85 0.6 Aurora (T) / Caledon (T) 80 0.6 There is a significant outflow of Markham (T) / Caledon (T) 70 0.5 labour leaving Caledon everyday to Essa (TP) / Caledon (T) 70 0.5 Toronto, Mississauga, Brampton or Oakville (T) / Caledon (T) 65 0.5 Vaughan, and, an inflow of labour Mulmur (TP) / Caledon (T) 55 0.4 from communities across the GTA Hamilton (C) / Caledon (T) 55 0.4 and beyond. With full employment East Garafraxa (TP) / Caledon (T) 50 0.4 Melancthon (TP) / Caledon (T) 50 0.4 levels in Caledon, it has resulted in Shelburne (T) / Caledon (T) 50 0.4 local businesses looking elsewhere, Centre Wellington (TP) / Caledon (T) 40 0.3 throughout the GTA and beyond, to Whitchurch-Stouffville (T) / Caledon (T) 35 0.3 fulfill their own labour needs. Also, Georgina (T) / Caledon (T) 35 0.3 with the significant inflow and Wasaga Beach (T) / Caledon (T) 35 0.3 outflow of labour, transportation Kawartha Lakes (C) / Caledon (T) 30 0.2 linkages, be it through public transit Milton (T) / Caledon (T) 30 0.2 or road, infrastructure becomes Southgate (TP) / Caledon (T) 30 0.2 more critical for Caledon’s overall Clearview (TP) / Caledon (T) 30 0.2 competitiveness. Kitchener (C) / Caledon (T) 25 0.2 Burlington (C) / Caledon (T) 20 0.2 Innisfil (T) / Caledon (T) 20 0.2 Orillia (C) / Caledon (T) 20 0.2 (T) - Town, (TP)- Township, C- City 13,325 100.0 SOURCE: STATISTICS CANADA, CENSUS 2001 2-15 urbanMetrics inc. market, economic and strategic advisors
  • 20. TOWN OF CALEDON COMPETITIVE ANALYSIS 2.6 Housing Characteristics Historically, the Town of Caledon has been perceived as a bedroom community and characterized as largely agricultural in nature. However, the town is known for its high quality of life, small town atmosphere and healthy environment. Taking into account commuting flows and housing patterns such characterizations may be appropriate. Maintaining these elements is of great importance to local residents. Figures 9 and 10 illustrate how Caledon’s housing composition is heavily skewed towards single detached homes which may impact the ability of a business to recruit workers to the community. The overall composition lacks choice or options beyond single detached family homes. There has been growth in semi-detached and row dwellings since the mid 1990’s; however, development continues to favour single detached homes (Figure 10). Caledon’s proximity to the City of Brampton and the City of Vaughan - where a wider range of housing exists - helps offset this issue, but the lack of housing options does increase the Town’s reliance on an in-migration of workers. The lack of transit connections between these municipalities and within Caledon itself also means potential employees will rely heavily on automobiles when getting to and from work. FIGURE 9 HOUSING STRUCTURES BY TYPE, DECEMBER 2005 HOUSING TYPE NUMBER OF UNITS % DETACHED 15,604 87.2 SEMI DETACHED 841 4.7 TOWN/ROW/LINK HOUSING 769 4.3 APARTMENTS 608 3.4 OTHER 72 0.04 TOTAL 17,894 100 SOURCE: TOWN OF CALEDON PLANNING & DEVELOPMENT DEPARTMENT 2-16 urbanMetrics inc. market, economic and strategic advisors
  • 21. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 10 RESIDENTIAL CONSTRUCTION ACTIVITY BY UNIT TYPE SOURCE: TOWN OF CALEDON PLANNING & DEVELOPMENT DEPARTMENT Caledon’s housing prices are also above GTA averages, which is a further indication of its affluent residents. Figure 11 illustrates the average median housing prices for Caledon based on three housing types. It should be noted that while single family detached housing is well above the GTA median price, prices for semi detached and townhouse/row/link housing is in line with the broader GTA market. However, higher density housing in Caledon only represents a small percentage of the housing stock and is not as widely available when compared to single detached homes. This will have implications for local businesses if they are recruiting or retaining younger workers or workers at the lower income level, as housing price and availability may deter some from pursuing or accepting employment offers in Caledon. FIGURE 11 TOWN OF CALEDON HOUSING PRICES - JUNE 2006 ACTIVITY HOUSING TYPE AVG PRICE MEDIAN PRICE GTA MEDIAN DETACHED $546,472 $421,500 $375,000 SEMI DETACHED $276,250 $281,750 $302,000 TOWN/ROW/LINK HOUSING $278,167 $255,500 $280,000 SOURCE: TOWN OF CALEDON PLANNING AND DEVELOPMENT DEPARTMENT 2-17 urbanMetrics inc. market, economic and strategic advisors
  • 22. TOWN OF CALEDON COMPETITIVE ANALYSIS 3. Local Industry Sector Analysis In order to determine the type and degree of industrial specialization or economic diversity that may be occurring in the Town of Caledon, location quotients (“LQ’s”) have been calculated to identify and measure the concentration of sectors. Location Quotients are a commonly used tool in regional economic analysis. They assess the concentration of economic activities within a smaller area relative to the overarching region in which it resides. For the purposes of this study we have calculated two sets of location quotients: 1) To indicate which industry sectors in Caledon have a greater labour force concentration relative to the overall average for the Province of Ontario; and 2) To indicate which industry sectors in Caledon have a greater labour force concentration relative to the overall average for the Region of Peel. Location Quotients (LQ) are calculated by dividing the percentage of total local employment represented by a sector, with the percentage of total provincial (or regional) employment represented by the sector. An LQ of 1.0 results if local % employment is the same as provincial % employment for a sector. LQs less than 0.75 ("low") indicate that local needs are not being met by the sector. LQs between 0.75 and 1.25 ("medium") indicate the community is self-sufficient in that sector, while LQs over 1.25 ("high") indicate that the sector is serving needs that extend beyond the boundaries of the municipality (i.e. the sector is "exporting" goods and services). LQs of 5 and over are very high and suggest a high level of local dependence on the sector. 4 In theory, industrial concentration that is greater than the overarching regional average represents the export base of the participating municipalities. Businesses that make up this export base may have likely chosen to locate in the area due to certain regional competitive advantages. These competitive advantages can be used to attract further investment in the future, in the same or complimentary industries with high concentration/classifications. The following sections detail the results of the Town of Caledon as compared to Ontario and the Region of Peel. It should be noted that Statistics Canada data is only available for 2001. 4 Ontario Ministry of Agriculture, Food and Rural Affairs REDDI Website (www.reddi.gov.on.ca) 3-18 urbanMetrics inc. market, economic and strategic advisors
  • 23. TOWN OF CALEDON COMPETITIVE ANALYSIS 3.1 Calculation of Location Quotients When compared to Ontario, the Town of Caledon has a comparatively high concentration of local employment in Agriculture, Forestry, Fishing and Hunting; Construction; Transportation and Warehousing; Arts, Entertainment and Recreation; Manufacturing; and Wholesale Trade (Figure 12). Definitions for individual sectors are provided in Appendix C. FIGURE 12 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO ONTARIO INDUSTRY (NAICS: North American Industrial Classification System)  LQ - EMPLOYMENT CLASSIFICATION 11 Agriculture, Forestry, Fishing and Hunting 2.33 High 23 Construction 1.95 High 48-49 Transportation and Warehousing 1.68 High 71 Arts, Entertainment and Recreation 1.61 High 31-33 Manufacturing 1.46 High 41 Wholesale Trade 1.26 High 56 Adminstrative and Support, Waste Management and Remediation Services 1.21 Average 61 Educational Services 1.06 Average 21 Mining and Oil and Gas Extraction 1.05 Average 44-45 Retail Trade 0.82 Average 72 Accommodation and Food Services 0.81 Average 53 Real Estate and Rental and Leasing 0.8 Average 81 Other Services (except Public Administration) 0.76 Average 54 Professional, Scientific and Technical Services 0.74 Low 62 Health Care and Social Assistance 0.53 Low 91 Public Administration 0.52 Low 22 Utilities 0.38 Low 51 Information and Cultural Industries 0.31 Low 52 Finance and Insurance 0.31 Low 55 Management of Companies and Enterprises 0 Low SOURCE: COMMUNITY ECONOMIC ANALYSIS TOOLS BY REDDI (BASED ON CENSUS 2001 DATA) By comparison, the Town of Caledon has a comparatively high concentration of local employment in Agriculture, Forestry, Fishing and Hunting; Arts, Entertainment and Recreation; Mining and Oil and Gas Extraction; Construction; and Educational Services compared to Peel Region as a whole. (Figure 13) 3-19 urbanMetrics inc. market, economic and strategic advisors
  • 24. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 13 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO REGION OF PEEL INDUSTRY (NAICS:North American Industrial Classification System) LQ - EMPLOYMENT CLASSIFICATION 11 Agriculture, Forestry, Fishing and Hunting 11.93 High 71 Arts, Entertainment and Recreation 3.59 High 21 Mining and Oil and Gas Extraction 3.39 High 23 Construction 2.07 High 61 Educational Services 1.40 High 31-33 Manufacturing 1.14 Average 72 Accommodation and Food Services 1.11 Average 56 Adminstrative and Support, Waste Management and Remediation Services 1.10 Average 91 Public Administration 1.08 Average 81 Other Services (except Public Administration) 0.95 Average 62 Health Care and Social Assistance 0.90 Average 44-45 Retail Trade 0.86 Average 22 Utilities 0.78 Average 54 Professional, Scientific and Technical Services 0.75 Average 53 Real Estate and Rental and Leasing 0.74 Low 48-49 Transportation and Warehousing 0.67 Low 41 Wholesale Trade 0.56 Low 51 Information and Cultural Industries 0.45 Low 52 Finance and Insurance 0.42 Low 55 Management of Companies and Enterprises 0.00 Low SOURCE: COMMUNITY ECONOMIC ANALYSIS TOOLS BY REDDI (BASED ON CENSUS 2001 DATA) 3.2 Location Quotients with High Concentrations The two digit industry sectors highlighted in the previous tables are also examined at a sub- sector level in order to demonstrate the local employment activities in further detail. Again, location quotients for each sub-sector have been calculated for Caledon relative to Ontario and Caledon relative to the Region of Peel. For the purpose of this analysis we have focused on the opportunities to drive more external investment attraction opportunities for the Town. While the concentration of agriculture is high, particularly in the context of Caledon/Peel, it must be noted that much of this is due to the lack of agricultural activity in the other municipalities within Region of Peel. Notwithstanding, there were approximately 800 people employed in the agriculture sector (Statistics Canada, 2001) either through direct employment or in support activities to farming. Statistics Canada has also suggested there were in excess of 400 farms in the community primarily focused on cash crops, livestock operations, horse training and horse breeding. For the purpose of this analysis however, we have focused on industrial and business concentrations. Figures 14-21 detail these results. 3-20 urbanMetrics inc. market, economic and strategic advisors
  • 25. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 14 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO ONTARIO INDUSTRY (NAICS:North American Industrial Classification System) LQ - EMPLOYMENT CLASSIFICATION 23 Construction 1.95 High ~~2329 Other Special Trade Contracting 5.09 Very High ~~2324 Building Interior Finishing Work 3.23 High ~~2322 Building Structure Work 3.05 High ~~2321 Site Preparation Work 2.54 High ~~2313 Engineering Construction 2.29 High ~~2312 Building Construction 1.72 High ~~2314 Construction Management 1.62 High ~~2323 Building Exterior Finishing Work 1.49 High ~~2311 Land Subdivision and Land Development 1.38 High ~~2325 Building Equipment Installation 1.06 Average SOURCE: COMMUNITY ECONOMIC ANALYSIS TOOLS BY REDDI (BASED ON CENSUS 2001 DATA) FIGURE 15 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO REGION OF PEEL INDUSTRY (NAICS) LQ - EMPLOYMENT CLASSIFICATION 23 Construction 2.07 High ~~2321 Site Preparation Work 3.81 High ~~2329 Other Special Trade Contracting 3.55 High ~~2324 Building Interior Finishing Work 3.53 High ~~2313 Engineering Construction 3.10 High ~~2322 Building Structure Work 3.04 High ~~2311 Land Subdivision and Land Development 2.28 High ~~2314 Construction Management 2.28 High ~~2323 Building Exterior Finishing Work 1.84 High ~~2312 Building Construction 1.84 High ~~2325 Building Equipment Installation 0.97 Average SOURCE: COMMUNITY ECONOMIC ANALYSIS TOOLS BY REDDI (BASED ON CENSUS 2001 DATA) 3-21 urbanMetrics inc. market, economic and strategic advisors
  • 26. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 16 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO ONATRIO INDUSTRY (NAICS) LQ - EMPLOYMENT CLASSIFICATION 48-49 Transportation and Warehousing 1.68 High ~~4889 Other Support Activities for Transportation 6.25 Very High ~~4854 School and Employee Bus Transportation 6.05 Very High ~~4812 Non-Scheduled Air Transportation 5.53 Very High ~~4842 Specialized Freight Trucking 3.36 High ~~4841 General Freight Trucking 2.89 High ~~4885 Freight Transportation Arrangement 2.42 High ~~4922 Local Messengers and Local Delivery 1.19 Average ~~4884 Support Activities for Road Transportation 0.98 Average ~~4881 Support Activities for Air Transportation 0.95 Average SOURCE: COMMUNITY ECONOMIC ANALYSIS TOOLS BY REDDI (BASED ON CENSUS 2001 DATA) FIGURE 17 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO REGION OF PEEL INDUSTRY (NAICS) LQ - EMPLOYMENT CLASSIFICATION 48-49 Transportation and Warehousing 0.67 Low ~~4854 School and Employee Bus Transportation 9.89 High ~~4842 Specialized Freight Trucking 2.33 High ~~4889 Other Support Activities for Transportation 2.09 High ~~4841 General Freight Trucking 1.20 Average ~~4812 Non-Scheduled Air Transportation 1.11 Average ~~4884 Support Activities for Road Transportation 0.90 Average SOURCE: COMMUNITY ECONOMIC ANALYSIS TOOLS BY REDDI (BASED ON CENSUS 2001 DATA) 3-22 urbanMetrics inc. market, economic and strategic advisors
  • 27. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 18 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO ONTARIO INDUSTRY (NAICS) LQ - EMPLOYMENT CLASSIFICATION 31-33 Manufacturing 1.46 High ~~3332 Industrial Machinery Manufacturing 55.73 Very High ~~3111 Animal Food Manufacturing 14.58 Very High ~~3219 Other Wood Product Manufacturing 7.35 Very High ~~3323 Architectural and Structural Metals Manufacturing 5.46 Very High ~~3362 Motor Vehicle Body and Trailer Manufacturing 4.83 High ~~3366 Ship and Boat Building 3.51 High ~~3312 Steel Product Manufacturing from Purchased Steel 3.35 High ~~3324 Boiler, Tank and Shipping Container Manufacturing 3.33 High ~~3314 Non-Ferrous Metal (except Aluminum) Production and Processing 3.19 High ~~3271 Clay Product and Refractory Manufacturing 3.03 High ~~3114 Fruit and Vegetable Preserving and Specialty Food Manufacturing 2.94 High ~~3253 Pesticide, Fertilizer and Other Agricultural Chemical Manufacturing 2.69 High ~~3261 Plastic Product Manufacturing 2.57 High ~~3169 Other Leather and Allied Product Manufacturing 2.46 High ~~3334 Ventilation, Heating, Air-Cond. and Com. Refrigeration Equip. Manuf. 2.11 High ~~3328 Coating, Engraving, Heat Treating and Allied Activities 2.02 High ~~3255 Paint, Coating and Adhesive Manufacturing 1.96 High ~~3222 Converted Paper Product Manufacturing 1.89 High ~~3149 Other Textile Product Mills 1.79 High ~~3399 Other Miscellaneous Manufacturing 1.63 High ~~3335 Metalworking Machinery Manufacturing 1.58 High ~~3212 Veneer, Plywood and Engineered Wood Product Manu. 1.57 High ~~3379 Other Furniture-Related Product Manufacturing 1.52 High ~~3327 Machine Shops, Turned Product, and Screw, Nut and Bolt Manu. 1.50 High ~~3133 Textile and Fabric Finishing and Fabric Coating 1.49 High ~~3132 Fabric Mills 1.40 High ~~3371 Household and Institutional Furniture and Kitchen Cabinet Manu. 1.22 Average ~~3211 Sawmills and Wood Preservation 1.06 Average ~~3273 Cement and Concrete Product Manufacturing 0.97 Average ~~3326 Spring and Wire Product Manufacturing 0.95 Average ~~3113 Sugar and Confectionery Product Manufacturing 0.88 Average ~~3279 Other Non-Metallic Mineral Product Manufacturing 0.86 Average ~~3329 Other Fabricated Metal Product Manufacturing 0.81 Average ~~3364 Aerospace Product and Parts Manufacturing 0.77 Average SOURCE: COMMUNIT Y ECONOMIC ANALYSIS T OOLS BY REDDI (BASED ON CENSUS 2001 DAT A) 3-23 urbanMetrics inc. market, economic and strategic advisors
  • 28. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 19 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO REGION OF PEEL INDUSTRY (NAICS) LQ - EMPLOYMENT CLASSIFICATION 31-33 Manufacturing 1.14 High ~~3332 Industrial Machinery Manufacturing 17.65 High ~~3211 Sawmills and Wood Preservation 10.48 High ~~3366 Ship and Boat Building 6.98 High ~~3212 Veneer, Plywood and Engineered Wood Product Manufacturing 6.60 High ~~3111 Animal Food Manufacturing 6.12 High ~~3219 Other Wood Product Manufacturing 5.41 High ~~3324 Boiler, Tank and Shipping Container Manufacturing 4.67 High ~~3362 Motor Vehicle Body and Trailer Manufacturing 4.64 High ~~3314 Non-Ferrous Metal (except Aluminum) Production and Processing 4.57 High ~~3169 Other Leather and Allied Product Manufacturing 3.96 High ~~3323 Architectural and Structural Metals Manufacturing 2.73 High ~~3114 Fruit and Vegetable Preserving and Specialty Food Manufacturing 2.50 High ~~3253 Pesticide, Fertilizer and Other Agricultural Chemical Manufacturing 2.47 High ~~3312 Steel Product Manufacturing from Purchased Steel 2.37 High ~~3133 Textile and Fabric Finishing and Fabric Coating 2.05 High ~~3311 Iron and Steel Mills and Ferro-Alloy Manufacturing 1.95 High ~~3149 Other Textile Product Mills 1.88 High ~~3132 Fabric Mills 1.85 High ~~3271 Clay Product and Refractory Manufacturing 1.81 High ~~3279 Other Non-Metallic Mineral Product Manufacturing 1.80 High ~~3113 Sugar and Confectionery Product Manufacturing 1.60 High ~~3315 Foundries 1.41 High ~~3261 Plastic Product Manufacturing 1.33 High ~~3328 Coating, Engraving, Heat Treating and Allied Activities 1.10 Average ~~3327 Machine Shops, Turned Product, and Screw, Nut and Bolt Manu. 1.09 Average ~~3273 Cement and Concrete Product Manufacturing 1.08 Average ~~3335 Metalworking Machinery Manufacturing 1.05 Average ~~3371 Household and Institutional Furniture and Kitchen Cabinet Manu. 1.04 Average ~~3399 Other Miscellaneous Manufacturing 0.96 Average ~~3222 Converted Paper Product Manufacturing 0.93 Average ~~3325 Hardware Manufacturing 0.87 Average ~~3255 Paint, Coating and Adhesive Manufacturing 0.85 Average ~~3334 Ventilation, Heating, Air-Cond. and Comm. Refrigeration Equip. Manu. 0.80 Average S O UR C E : C O M M UN IT Y E C O N O M IC A N A LY S IS T O O LS B Y R E D D I ( B A S E D O N C E N S US 2 0 0 1 D A T A ) 3-24 urbanMetrics inc. market, economic and strategic advisors
  • 29. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 20 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO ONTARIO INDUSTRY (NAICS) LQ - EMPLOYMENT CLASSIFICATION 41 Wholesale Trade 1.26 High ~~4163 Lumber, Millwork, Hardware and Other Building Supplies Wholesaler-Dist. 5.21 Very High ~~4183 Agricultural Supplies Wholesaler-Distributors 4.45 High ~~4162 Metal Service Centres 3.23 High ~~4144 Personal Goods Wholesaler-Distributors 2.56 High ~~4153 Used Motor Vehicle Parts and Accessories Wholesaler-Dist. 2.02 High ~~4131 Food Wholesaler-Distributors 1.89 High ~~4111 Farm Product Wholesaler-Distributors 1.41 High ~~4184 Chemical (except Agricultural) and Allied Product Wholesaler-Dist. 1.37 High ~~4181 Recyclable Material Wholesaler-Distributors 1.2 Average ~~4172 Const., Forestry, Mining, and Ind. Mach., Equip. and Supp. Wholesaler-Dist. 1.18 Average ~~4161 Elect., Plumbing, Heating and Air-Cond. Equip. and Supp. Wholesaler-Dist. 1.12 Average ~~4191 Wholesale Agents and Brokers 1.05 Average ~~4143 Home Furnishings Wholesaler-Distributors 1.01 Average ~~4189 Other Miscellaneous Wholesaler-Distributors 0.89 Average ~~4121 Petroleum Product Wholesaler-Distributors 0.86 Average ~~4152 New Motor Vehicle Parts and Accessories Wholesaler-Distributors 0.83 Average SOURCE: COMMUNIT Y ECONOMIC ANALYSIS T OOLS BY REDDI (BASED ON CENSUS 2001 DAT A) FIGURE 21 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO REGION OF PEEL INDUSTRY (NAICS) LQ - EMPLOYMENT CLASSIFICATION 41 Wholesale Trade 0.56 Low ~~4183 Agricultural Supplies Wholesaler-Distributors 6.28 High ~~4153 Used Motor Vehicle Parts and Accessories Wholesaler-Distributors 5.94 High ~~4163 Lumber, Millwork, Hardware and Other Building Supplies Wholesaler-Dist. 2.53 High ~~4144 Personal Goods Wholesaler-Distributors 1.47 High ~~4162 Metal Service Centres 1.30 High ~~4121 Petroleum Product Wholesaler-Distributors 1.29 High ~~4181 Recyclable Material Wholesaler-Distributors 0.90 Average ~~4131 Food Wholesaler-Distributors 0.87 Average ~~4111 Farm Product Wholesaler-Distributors 0.77 Average SOURCE: COMMUNITY ECONOMIC ANALYSIS TOOLS BY REDDI (BASED ON CENSUS 2001 DATA) 3-25 urbanMetrics inc. market, economic and strategic advisors
  • 30. TOWN OF CALEDON COMPETITIVE ANALYSIS An important consideration in the evaluation of high location quotient results is the significance of the employment concentration by industry. Industries with higher local employment are much more significant in a sector analysis. Also, in our evaluation of location quotient results, the employment concentration by industry which includes the portion of the labour force which leaves the community to work in other jurisdictions is important. Figures 22 and 23 illustrate how local economic activity changes when the entire labour force is considered. FIGURE 22 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO ONTARIO LQ - LOCAL INDUSTRY (NAICS) EMPLOYMENT EMPLOYMENT ~~3332 Industrial Machinery Manufacturing 55.73 1,225 ~~3111 Animal Food Manufacturing 14.58 170 ~~3219 Other Wood Product Manufacturing 7.35 330 ~~4854 School and Employee Bus Transportation 6.05 245 ~~3323 Architectural and Structural Metals Manufacturing 5.46 315 ~~4163 Lumber, Millwork, Hardware and Other Building Supplies Wholesaler-Dist. 5.21 250 ~~2329 Other Special Trade Contracting 5.09 85 ~~3362 Motor Vehicle Body and Trailer Manufacturing 4.83 100 ~~4842 Specialized Freight Trucking 3.36 160 ~~3312 Steel Product Manufacturing from Purchased Steel 3.35 70 ~~3324 Boiler, Tank and Shipping Container Manufacturing 3.33 70 ~~2324 Building Interior Finishing Work 3.23 185 ~~4162 Metal Service Centres 3.23 70 ~~2322 Building Structure Work 3.05 85 ~~3114 Fruit and Vegetable Preserving and Specialty Food Manufacturing 2.94 70 ~~4841 General Freight Trucking 2.89 395 ~~3261 Plastic Product Manufacturing 2.57 405 ~~4144 Personal Goods Wholesaler-Distributors 2.56 75 ~~4885 Freight Transportation Arrangement 2.42 95 ~~2313 Engineering Construction 2.29 150 ~~5617 Services to Buildings and Dwellings 2.28 385 ~~326 Plastics and Rubber Products Manufacturing 2.09 400 ~~4131 Food Wholesaler-Distributors 1.89 140 ~~3222 Converted Paper Product Manufacturing 1.89 100 ~~5414 Specialized Design Services 1.83 110 ~~2312 Building Construction 1.72 225 ~~3399 Other Miscellaneous Manufacturing 1.63 130 ~~3335 Metalworking Machinery Manufacturing 1.58 105 ~~3327 Machine Shops, Turned Product, and Screw, Nut and Bolt Manufacturing 1.50 95 ~~5419 Other Professional, Scientific and Technical Services 1.29 105 ~~3371 Household and Institutional Furniture and Kitchen Cabinet Manufacturing 1.22 80 ~~4172 Const., Forestry, Mining, and Ind. Mach., Equip. and Supp. Wholesaler-Dist. 1.18 70 ~~5416 Management, Scientific and Technical Consulting Services 1.08 170 ~~2325 Building Equipment Installation 1.06 150 SOURCE: COMMUNITY ECONOMIC ANALYSIS TOOLS BY REDDI (BASED ON CENSUS 2001 DATA) 3-26 urbanMetrics inc. market, economic and strategic advisors
  • 31. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 23 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO REGION OF PEEL LQ - LOCAL INDUSTRY (NAICS) EMPLOYMENT EMPLOYMENT ~~3332 Industrial Machinery Manufacturing 17.65 1225 ~~4854 School and Employee Bus Transportation 9.89 245 ~~3111 Animal Food Manufacturing 6.12 170 ~~3219 Other Wood Product Manufacturing 5.41 330 ~~3324 Boiler, Tank and Shipping Container Manufacturing 4.67 70 ~~3362 Motor Vehicle Body and Trailer Manufacturing 4.64 100 ~~2329 Other Special Trade Contracting 3.55 85 ~~2324 Building Interior Finishing Work 3.53 185 ~~2313 Engineering Construction 3.10 150 ~~2322 Building Structure Work 3.04 85 ~~3323 Architectural and Structural Metals Manufacturing 2.73 315 ~~5617 Services to Buildings and Dwellings 2.63 385 ~~4163 Lumber, Millwork, Hardware and Other Building Supplies Wholesaler-Dist. 2.53 250 ~~3114 Fruit and Vegetable Preserving and Specialty Food Manufacturing 2.50 70 ~~3312 Steel Product Manufacturing from Purchased Steel 2.37 70 ~~4842 Specialized Freight Trucking 2.33 160 ~~5414 Specialized Design Services 1.87 110 ~~2312 Building Construction 1.84 225 ~~5419 Other Professional, Scientific and Technical Services 1.66 105 ~~4144 Personal Goods Wholesaler-Distributors 1.47 75 ~~3261 Plastic Product Manufacturing 1.33 405 ~~4162 Metal Service Centres 1.30 70 ~~4841 General Freight Trucking 1.20 395 ~~4441 Building Material and Supplies Dealers 1.12 90 ~~3327 Machine Shops, Turned Product, and Screw, Nut and Bolt Manufacturing 1.09 95 ~~3335 Metalworking Machinery Manufacturing 1.05 105 ~~3371 Household and Institutional Furniture and Kitchen Cabinet Manufacturing 1.04 80 ~~5416 Management, Scientific and Technical Consulting Services 1.02 170 ~~2325 Building Equipment Installation 0.97 150 ~~3399 Other Miscellaneous Manufacturing 0.96 130 ~~3222 Converted Paper Product Manufacturing 0.93 100 ~~4131 Food Wholesaler-Distributors 0.87 140 SOURCE: COMMUNITY ECONOMIC ANALYSIS TOOLS BY REDDI (BASED ON CENSUS 2001 DATA) 3-27 urbanMetrics inc. market, economic and strategic advisors
  • 32. TOWN OF CALEDON COMPETITIVE ANALYSIS Figure 24 provides the combined results of Caledon compared to Ontario and the Region of Peel. FIGURE 24 LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO REGION OF PEEL LQ - LOCAL INDUSTRY EMPLOYMENT EMPLOYMENT ~~5416 Management, Scientific and Technical Consulting Services (Caledon & Peel) 1.02 170 ~~5416 Management, Scientific and Technical Consulting Services (Caledon & Ontario) 1.08 ~~5414 Specialized Design Services 1.87 110 ~~5414 Specialized Design Services 1.83 ~~4854 School and Employee Bus Transportation 9.89 245 ~~4854 School and Employee Bus Transportation 6.05 ~~4842 Specialized Freight Trucking 2.33 160 ~~4842 Specialized Freight Trucking 3.36 ~~4841 General Freight Trucking 1.20 395 ~~4841 General Freight Trucking 2.89 ~~4163 Lumber, Millwork, Hardware and Other Building Supplies Wholesaler-Dist. 2.53 250 ~~4163 Lumber, Millwork, Hardware and Other Building Supplies Wholesaler-Dist. 5.21 ~~4131 Food Wholesaler-Distributors 0.87 140 ~~4131 Food Wholesaler-Distributors 1.89 ~~3362 Motor Vehicle Body and Trailer Manufacturing 4.64 100 ~~3362 Motor Vehicle Body and Trailer Manufacturing 4.83 ~~3335 Metalworking Machinery Manufacturing 1.05 105 ~~3335 Metalworking Machinery Manufacturing 1.58 ~~3332 Industrial Machinery Manufacturing 17.65 1225 ~~3332 Industrial Machinery Manufacturing 55.73 ~~3323 Architectural and Structural Metals Manufacturing 2.73 315 ~~3323 Architectural and Structural Metals Manufacturing 5.46 ~~3261 Plastic Product Manufacturing 1.33 405 ~~3261 Plastic Product Manufacturing 2.57 ~~3222 Converted Paper Product Manufacturing 0.93 100 ~~3222 Converted Paper Product Manufacturing 1.89 ~~3219 Other Wood Product Manufacturing 5.41 330 ~~3219 Other Wood Product Manufacturing 7.35 ~~3114 Fruit and Vegetable Preserving and Specialty Food Manufacturing 2.50 70 ~~3114 Fruit and Vegetable Preserving and Specialty Food Manufacturing 2.94 ~~3111 Animal Food Manufacturing 6.12 170 ~~3111 Animal Food Manufacturing 14.58 ~~2325 Building Equipment Installation 0.97 150 ~~2325 Building Equipment Installation 1.06 ~~2324 Building Interior Finishing Work 3.53 185 ~~2324 Building Interior Finishing Work 3.23 ~~2313 Engineering Construction 3.10 150 ~~2313 Engineering Construction 2.29 ~~2312 Building Construction 1.84 225 ~~2312 Building Construction 1.72 S O UR C E : C O M M UN IT Y E C O N O M IC A N A LY S IS T O O LS B Y R E D D I ( B A S E D O N C E N S US 2 0 0 1 D A T A ) 3-28 urbanMetrics inc. market, economic and strategic advisors
  • 33. TOWN OF CALEDON COMPETITIVE ANALYSIS 3.3 Key Findings The location quotient analysis historically identifies the sectors and industries of strength for the Town of Caledon. In an effort to identify key target sectors for the Town we have further focused the analysis on either industrial or business concentration. Based on this review a number of industries exhibited a high employment concentration in Caledon (Location Quotients > 1.25) when compared to both the Region of Peel and in a broader sense the Province of Ontario (Figure 24 preceding). Caledon’s employment base can be said to have strengths in three industry sectors. These include: Manufacturing (NAICS 31-33); Construction (NAICS 23); and Transportation and Warehousing (NAICS 48-49). The Manufacturing base is Caledon’s most significant and most important industry sector with five primary areas of strength. The first, which could be described as Advanced Manufacturing, is Machinery Manufacturing. It includes Metalworking Machinery Manufacturing, and Industrial Machinery Manufacturing, which accounts for a large portion of local employment due to the presence of Husky Injection Molding Systems Limited, one of the world's largest suppliers of injection molding equipment and services to the plastics industry. The second area of strength in Caledon’s manufacturing base is Food Manufacturing. A number of industry sub-sectors with a presence in Caledon include: Animal Food Manufacturing; Fruit and Vegetable Preserving and Specialty Food Manufacturing; and Meat Product Manufacturing. The final three areas of strength in are Plastic Product Manufacturing, Fabricated Structural Metal Manufacturing and Wood Product Manufacturing. The Construction base in Caledon is significant with numerous businesses using Caledon as their home base for their construction operations. Caledon has four areas of concentration including Building Construction, Engineering Construction, Building Interior Finishing Work, and Building Equipment Installation. The Transportation and Warehousing base in Caledon is also prominent. The industry is divided into distinct industries with School and Employee Bus Transportation, and General and Specialized Freight Trucking. If Wholesale Trade is included in the discussion, two significant industries become apparent, Lumber, Millwork, Hardware and Other Building Supplies Wholesale Distributors, and Food Wholesalers and Distributors. These two industries are significant as they compliment the Wood Manufacturing, Construction and Food Manufacturing sectors respectively. 3-29 urbanMetrics inc. market, economic and strategic advisors
  • 34. TOWN OF CALEDON COMPETITIVE ANALYSIS When identifying target sectors it is prudent to look more closely at the location quotient analysis. Figure 25 illustrates the Town of Caledon’s total labour force concentration compared to Ontario. This is relevant given the significant number of people leaving Caledon daily for employment in other areas of the region. FIGURE 25 LABOUR FORCE LOCATION QUOTIENTS - TOWN OF CALEDON COMPARED TO ONTARIO LQ - LABOUR INDUSTRY (NAICS) LABOUR CLASSIFICATION FORCE FORCE ~~2312 Building Construction 1.41 High 610 ~~2313 Engineering Construction 1.38 High 220 ~~2321 Site Preparation Work 2.26 High 135 ~~2324 Building Interior Finishing Work 1.75 High 425 ~~2325 Building Equipment Installation 1.78 High 670 ~~2329 Other Special Trade Contracting 3.56 High 165 ~~3121 Beverage Manufacturing 2.27 High 135 ~~3219 Other Wood Product Manufacturing 2.11 High 160 ~~3222 Converted Paper Product Manufacturing 1.76 High 155 ~~3231 Printing and Related Support Activities 1.55 High 310 ~~3254 Pharmaceutical and Medicine Manufacturing 1.29 High 80 ~~3259 Other Chemical Product Manufacturing 3.45 High 125 ~~3261 Plastic Product Manufacturing 1.08 Average 280 ~~3323 Architectural and Structural Metals Manufacturing 2.41 High 235 ~~3327 Machine Shops, Turned Product, and Screw, Nut and Bolt Manufacturing 2.39 High 250 ~~3328 Coating, Engraving, Heat Treating and Allied Activities 1.73 High 85 ~~3332 Industrial Machinery Manufacturing 10.01 Very High 365 ~~3335 Metalworking Machinery Manufacturing 1.55 High 170 ~~3345 Navigational, Measuring, Medical and Control Instruments Manufacturing 1.78 High 110 ~~3364 Aerospace Product and Parts Manufacturing 1.78 High 135 ~~3371 Household and Institutional Furniture and Kitchen Cabinet Manufacturing 1.40 High 155 ~~3399 Other Miscellaneous Manufacturing 1.38 High 185 ~~4131 Food Wholesaler-Distributors 1.25 High 160 ~~4145 Pharmaceuticals, Toiletries, Cosmetics and Sundries Wholesaler-Distributors 1.57 High 100 ~~4152 New Motor Vehicle Parts and Accessories Wholesaler-Distributors 1.92 High 135 ~~4161 Electrical, Plumbing, Heating and Air-Cond. Equip. and Supp. Wholesaler-Dist. 2.12 High 165 ~~4162 Metal Service Centres 2.45 High 90 ~~4163 Lumber, Millwork, Hardware and Other Building Supp. Wholesaler-Dist. 3.10 High 255 ~~4172 Const., Forestry, Mining, and Ind. Mach., Equip. and Supp. Wholesaler-Dist. 3.12 High 315 ~~4191 Wholesale Agents and Brokers 1.43 High 120 ~~4811 Scheduled Air Transportation 2.85 High 265 ~~4841 General Freight Trucking 1.26 High 410 ~~4842 Specialized Freight Trucking 1.41 High 150 ~~4854 School and Employee Bus Transportation 1.68 High 145 ~~4885 Freight Transportation Arrangement 3.61 High 245 ~~4931 Warehousing and Storage 1.56 High 105 ~~5239 Other Financial Investment Activities 1.06 Average 180 ~~5242 Agencies, Brokerages and Other Insurance Related Activities 1.39 High 270 ~~5312 Offices of Real Estate Agents and Brokers 1.28 High 220 ~~5412 Accounting, Tax Preparation, Bookkeeping and Payroll Services 1.17 Average 280 ~~5413 Architectural, Engineering and Related Services 1.05 Average 305 ~~5414 Specialized Design Services 1.38 High 145 ~~5416 Management, Scientific and Technical Consulting Services 1.59 High 445 ~~5419 Other Professional, Scientific and Technical Services 1.08 Average 155 ~~5616 Investigation and Security Services 1.30 High 185 ~~5617 Services to Buildings and Dwellings 1.49 High 665 ~~6215 Medical and Diagnostic Laboratories 2.57 High 115 ~~8113 Commercial and Ind. Mach. and Equip. (except Auto. and Elect.) Repair and Maint. 1.46 High 95 SOURCE: COMMUNITY ECONOMIC ANALYSIS TOOLS BY REDDI (BASED ON CENSUS 2001 DATA) 3-30 urbanMetrics inc. market, economic and strategic advisors
  • 35. TOWN OF CALEDON COMPETITIVE ANALYSIS Based on this location quotient analysis, Caledon demonstrates a high labour force concentration in: Construction (NAICS 23); Manufacturing (NAICS 31-33); Wholesale Trade (NAICS 41); Transportation and Warehousing (NAICS 48-49); and Professional, Scientific and Technical Services (NAICS 54). Construction, Manufacturing, Wholesale Trade, and Transportation and Warehousing correspond with the employment concentrations in Caledon. Professional, Scientific and Technical Services, and somewhat Finance and Insurance, represent large proportions of the labour force that are not reflected within the local employment base. Of particular importance is the percentage of people employed in manufacturing but working outside of the Town. There may be an opportunity for the Town to attract more manufacturing based operations based on presence of a larger skilled labour force pool. It is also important to review the Town of Caledon’s two neighbouring municipalities, Brampton and Vaughan, and their major industries and target sectors. Caledon may see an increased interest from existing industries in these two municipalities as quality and affordable employment lands become increasingly scarce. The City of Brampton is heavily concentrated in Manufacturing; Wholesale Trade; and Transportation and Warehousing. Specifically, the manufacturing sector is strong with industry concentrations in Transportation and Equipment Manufacturing; Fabricated Metal Product Manufacturing; Food Manufacturing; Plastic and Rubber Product manufacturing; Chemical Manufacturing; and Machinery Manufacturing. These sectors are very similar to what has been found in Caledon’s economic base. The City of Brampton has made a concerted effort however, to target and market to the Life Sciences; Advanced Manufacturing; Food and Beverage; Information & Communications Technology; and Retail, Administration and Logistics sectors. The City of Vaughan demonstrates a similar concentration of industry in Manufacturing; Construction; Wholesale Trade; Retail Trade; and Transportation and Warehousing. The manufacturing industries represent Vaughan’s most important presence and single largest source of employment. Sectors of significance in Vaughan’s manufacturing sector include Fabricated Metal Products; Furniture and Related Products; Machinery Manufacturing; Printing and Related Products; Plastic and Rubber Products Manufacturing; Transportation Equipment Manufacturing and Food and Beverage. There are definite similarities in terms of industry concentrations between all three municipalities. With the planned extension of Highway 410 into the Town of Caledon, and the introduction of new employment areas, it is likely that Caledon will continue to see growth in these industry sectors. 3-31 urbanMetrics inc. market, economic and strategic advisors
  • 36. TOWN OF CALEDON COMPETITIVE ANALYSIS Based on these combined results, we would recommend that the Town develop a business attraction and retention strategy around the following target sectors: Manufacturing o Industrial Machinery Manufacturing; o Fabricated Structural Metal Manufacturing; o Plastic Product Manufacturing; and o Food Manufacturing Transportation and Logistics o Freight Warehousing and Logistic Services o General and Specialized Freight Services Professional, Scientific and Technical Services o Management, Scientific and Technical Services; and o Specialized Design Services o Engineering Construction In terms of the Transportation and Logistics sector, it is appreciated that investment from this sector will happen without much effort on the part of the Town. It may be prudent however, to address the attraction of this sector in terms putting adequate official plan and zoning provisions in place to control or manage the location of these operations. Figure 26 provides a further assessment of the Town’s current business directory. There are a number of businesses in these sectors and the overall employment numbers are significant in some cases. It should be noted that Wholesale Trade has not been recommended as a target sector for the Town. This does not mean that an investment opportunity be turned away if the occasion should arise. In our opinion however, the Town should focus its business attraction efforts in sectors where the Town is likely to realize significant employment growth. In recommending target sectors to the municipality, one needs to consider the opportunities for employment and assessment growth through the attraction of new industry to the community, but it is equally important to consider the opportunities of growth that 3-32 urbanMetrics inc. market, economic and strategic advisors
  • 37. TOWN OF CALEDON COMPETITIVE ANALYSIS result from the expansion of existing local industry. For this reason we recommend that the Town develop an approach to its target sectors that incorporates both perspectives. FIGURE 26 BUSINESSES AND EMPLOYMENT IN KEY SECTORS MANUFACTURING # OF CALEDON BUSINESSES EMPLOYMENT FOOD 7 110 TO 240 MACHINERY 20 115 TO 260 MACHINE SHOPS 15 40 TO 110 FABRICATED STRUCTURAL METAL 16 175 TO 300 PLASTIC PRODUCT 4 1600 WOOD PRODUCT 7 120 TO 260 CONSTRUCTION GENERAL AND BUILDING CONTRACTORS 50 350 TO 850 PAVING CONTRACTORS 6 40 TO 90 CONCRETE CONTRACTORS 10 105 TO 220 ELECTRICAL CONTRACTORS 22 125 TO 300 PLUMBING CONTRACTORS 10 50 TO 105 SITE PREPARATION CONTRACTORS 23 65 TO 190 WOODWORKERS 11 100 TO 225 HEATING AND AIR CONDITIONING CONTRACTORS 13 70 TO 175 TRANSPORTATION AND LOGISTICS GENERAL FREIGHT TRANSPORTATION SERVICES 6 55 TO 135 SPECIALIZED TRANSPORTATION SERVICES 25 300 TO 665 FREIGHT TRANSPORTATION ARRANGEMENTS 6 30 TO 60 PROFESSIONAL AND TECHNICAL SERVICES BUSINESS SERVICES AND CONSULTING (HR, MARKETING, MANAGEMENT, ETC) 25 55 TO 170 ENGINEERING SERVICES 11 40 TO 85 ARCHITECTURE, DRAFTING AND SURVEYING SERVICES 10 30 TO 70 COMPUTER SYSTEMS AND DESIGN 13 25 TO 70 SOURCE: TOWN OF CALEDON BUSINESS DIRECTORY, 2006 3-33 urbanMetrics inc. market, economic and strategic advisors
  • 38. TOWN OF CALEDON COMPETITIVE ANALYSIS 4. Target Sector Identification – Provincial Context There are a number of primary considerations that must be addressed in the identification and selection of target industry sectors for the Town of Caledon. These criteria include the following: Identified sectors should tie into target initiatives supported by regional and provincial investment attraction agencies – Caledon should continue to recognize the broader marketing initiatives undertaken by the Province of Ontario, through the Ministry of Economic Development and Trade, as well as the Greater Toronto Marketing Alliance. The focus should be on those economic development and marketing initiatives that centre primarily on Advanced Manufacturing. Caledon must actively communicate with these agencies, in order to share information and benefit from economic development networks already established. The Town should also focus on opportunities to collaborate and cooperate with other municipalities in the advance of its target sectors. This is essential, as the Town is operating within two regional economies – Peel Region and the GTA. Target sectors should complement the existing local industrial base – investment attraction opportunities should be tied to the competitive position of existing businesses and to the extent of possible labour force skill sets. Target sectors should have a significant and sustaining impact on the Town’s economy – targets should be labour-intensive sectors that demonstrate medium to high future growth potential. No excessive capital investment - the attraction of chosen target sectors should not require excessive capital investment on the part of area municipalities and/or the overarching region. The discussion that follows considers the macro-economic trends among Ontario’s leading growth sectors. 4-34 urbanMetrics inc. market, economic and strategic advisors
  • 39. TOWN OF CALEDON COMPETITIVE ANALYSIS 4.1 Identification and Forecast Performance of Export Sectors Figures 27 summarizes the sectors that are expected to experience the highest economic growth through 2006 and 2007. The sectors contained within these tables represent a “long- list” of potential target sectors for the Town of Caledon. FIGURE 27 CANADA'S INDUSTRIAL OUTLOOK 2006-07 SOURCE: TD ECONOMICS, INDUSTRIAL OUTLOOK, AUGUST 2006 In general, TD Economics has been warning of a slowdown of the U.S. economy in the second half of 2006 and into 2007 5 . More specifically, for Canada, manufacturing sector is expected to only grow marginally until mid-2007 because of the sectors high dependence on the U.S. market. The Canadian economy is projected to grow by 2.9% over the next 18 months [TD Economics, August 2006]. Ontario’s economy grew 2.7% in 2004 and 2.8% in 2005, slightly below Canada’s growth of 3.3% and 2.9% in the two years, respectively. Ontario is expected to grow by 2.7% in 2006 compared to a Canadian rate of 3.1%. Ontario’s economy has been impacted by the strong Canadian dollar, which has hit the manufacturing sector particularly hard. On the other hand, the service sector is performing quite well. Growth should rise to 3% in 2007 and subsequent years, as the manufacturing 5 TD Economic, “Industrial Outlook”, August 2006 4-35 urbanMetrics inc. market, economic and strategic advisors
  • 40. TOWN OF CALEDON COMPETITIVE ANALYSIS sector adjusts to the strong Canadian dollar and electricity generation projects boost the economy 6 . In terms of the manufacturing sector, TD Economics has also reported the following findings: 9/11, the 2001 U.S. recession, the ascent of the Canadian dollar, high energy prices and growing competition from Asian economies have had a striking impact on the manufacturing sector since 2001. Manufacturing output in Canada advanced by 5% between 2001 and 2005, eight times slower than the previous 5 years (1996-2000). See Figure 28. Manufacturing moved from the fastest growing industry to the second last. Due to the sectors high reliance on the U.S. market, it is unlikely to improve before mid-2007. U.S. slowdown will not play out evenly across all manufacturing sectors it will be more troublesome for manufacturers with higher export intensity. With vehicle sales forecast to drop in 2007, vehicle assembly and parts output in Canada is expected to drop for a second consecutive year. However, as North American automakers are scaling back their activities, Japanese- based vehicle assemblers are expected to run at full capacity. Manufacturing industries that are domestically geared should fair well s household and business spending in Canada should remain strong. Large capital projects in the mining and oil and gas industries should likely go ahead resulting in strong growth prospects for metal products, machinery products and computer and electronic products. 6 BMO Financial Group, Economics Department. “Sectoral Outlook”, April 2006 4-36 urbanMetrics inc. market, economic and strategic advisors
  • 41. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 28 CANADA'S INDUSTRIAL OUTLOOK 2006-07 SOURCE: T D ECONOMICS, INDUST RIAL OUT LOOK, AUGUST 2006 In a recent study completed by Desrosiers Automotive Consultants, it was acknowledged that the Canadian and Ontario OE (Original Equipment) parts sector faces serious challenges in the coming decade. The most serious challenges will be seen by suppliers of GM, Ford and DaimlerChyrsler market. However, they also report that there are positive signs for some sub-sectors within the Canadian OE parts sector. These include: Suppliers to new North American Manufacturers (e.g. Honda Alliston, Toyota Cambridge/Woodstock etc.); opportunities also exist for Korean assemblers and potentially European companies; Suppliers in growth product areas (e.g. lightweight metals); Suppliers offering proprietary technologies to their vehicle company clients (e.g. intellectual chain offerings and research and development capacity). 7 7 Desrosiers Automotive Consultants, “Issues and Trends in the Automotive Industry: Implications for Eastern Ontario”, 2005. 4-37 urbanMetrics inc. market, economic and strategic advisors
  • 42. TOWN OF CALEDON COMPETITIVE ANALYSIS 4.2 Economic Development Organizations A further consideration for the Town of Caledon is the business attraction efforts of the Greater Toronto Marketing Alliance and the Province of Ontario. The mission of the Greater Toronto Marketing Alliance (GTMA) is to expand the economy of the Greater Toronto Area (GTA) by raising the profile of the region internationally to attract new investment and employment. Accordingly, in 2007-2008 the GTMA will focus on the following industry sectors: Information & Communications Technologies (ICT); Advanced Manufacturing (Automotive, Aerospace & Industrial Design); Functions related to Business & Financial Services, Business Process Outsourcing, Back Office, Shared Services and Call Centres; Energy & Environmental Technologies; Real Estate and Infrastructure; and Life Sciences (the GTMA will continue to monitor this sector and provide presentations and support for investment inquiries). Based on the sectors and activities noted above, the GTMA’s primary target market will continue to be the U.S. especially related to ICT and Advanced Manufacturing. The U.S. is Canada’s largest trading partner, Canada’s largest source of Foreign Direct Investment and the wealthiest of the G7 nations at $13 billion in GDP. The GTMA has also started to explore Europe as a key target area. The GTMA has undertaken several initiatives in Europe including Germany for Advanced Manufacturing; Sweden and Holland for Energy, Environment and ICT; as well as a unique global gathering in France related to Real Estate and Infrastructure. In addition to Europe, opportunities in Australia, especially related to Real Estate and Infrastructure, offer an opportunity for the GTMA and its partners to explore another part of the world’s market offerings. Specifically, Caledon should leverage the advanced manufacturing based programs and initiatives the GTMA plans on proceeding with. The GTMA has had a long established Automotive Committee that it has managed and centred around the Society of Automotive Engineers (SAE) conference in Detroit every winter. In 2006, the GTMA created a new initiative building upon the existing automotive investment attraction program (AIAC) to include the larger industrial classification of advanced manufacturing. The advanced manufacturing program includes the attendance by committee members to such venues as the Society of Automotive Engineers (SAE) World Conference, Automotive Communities Partnership (ACP), and the Management Briefing Seminar (MBS) in Traverse City, Michigan. 4-38 urbanMetrics inc. market, economic and strategic advisors
  • 43. TOWN OF CALEDON COMPETITIVE ANALYSIS Strategies for the advanced manufacturing program include automotive manufacturing forecasts by CSM Worldwide, pre-qualified lead program with assistance from intelligence gathering through Seneca College, and various consultants which identified and generated meetings with potential investors. The program also built relations with the Canadian Consulate which led to the GTMA and corporate partners to present investment information to cities within the Northeastern U.S. The new committee focused on presenting seminars in Cleveland, Detroit, and Toronto, participated in pre-qualified meetings in the Southeastern U.S. and hosted an SAE related event in Detroit in partnership with the Canadian Consulate. Locally, the committee also worked with Seneca College and private sector partners to develop a business intelligence unit. The Province through the Ministry of Economic Development and Trade (MEDT) is directly responsible for marketing and attracting industrial investment to the province, both from within Canada and internationally. In doing so, MEDT has narrowed the broad industrial categories to specific target sectors and/or sub-sectors to be promoted for industrial attraction in the Province. These target sectors include the following: Tourism Plastics Aerospace Automotive Life Sciences Call Centres Chemicals Environment Food Forestry InfoTech Mining These sectors and/or sub-sectors have been chosen for promotion based on Ontario’s established export base, and the pattern of business investment across the Province over the past 5 to 10 years. Much of this business investment has been in reaction to the marketing of regional comparative advantages in the production of certain goods and/or services, on the part of the Province and individual municipalities/counties/regions. 4.3 Sectors 4.3.1 Plastics and Rubber Manufacturing Since the 1960s, the plastics industry has been one of the fastest growing sectors of the Canadian economy. New developments in plastics materials, attributed largely to improved production technology, continue the trend for traditional materials such as metal, glass and 4-39 urbanMetrics inc. market, economic and strategic advisors
  • 44. TOWN OF CALEDON COMPETITIVE ANALYSIS wood to be replaced by plastics in applications such as packaging, electronics, auto parts and construction. The plastics industry can be divided into three major segments: manufacture of plastics resins (which are sold in the form of granules, powders and liquids) manufacture of equipment and molds for transforming the resins into finished- products processing resins to manufacture finished plastic products or components. In terms of total plastics output, Ontario is the third-ranking jurisdiction in North America after California and Ohio. Its industry remains very strong and continues to outpace the manufacturing sector as a whole and the Province’s economy overall. From 2000 to 2003, the average annual growth rate in plastic products in Ontario was a very healthy 7.8%. Over the past 40 years, Ontario has developed a fully-integrated plastics industry. Today there are over 2,250 firms in Ontario which encompass the full spectrum of the plastic supply chain. While the resin industry is significant and provides a strong impetus for industry-wide growth, the vast majority of the 85,000 employees are actually employed within the plastic product and machinery (i.e. molds, extrusions, etc.) segment of the market. Over 90% of Ontario’s Plastics Industry is concentrated within a one-hour drive of Highway 401. In addition, approximately one-third of the plastics industry is concentrated in the Greater Toronto Area. Vaughan, Rexdale, Mississauga, Brampton and Bolton have strong clusters of plastic producers. The plastics industry remains one of the fastest growing manufacturing industries in North America, propelled by the development of new materials, products, applications, and global markets. Demand for plastic products, both domestically and abroad is expected to continue to outpace economic growth, with industry forecasts currently suggesting average annual growth of the order of 5-7% worldwide. According to the Canadian Plastics Sector Council, from 2001-2008 the growth of the plastics industry is anticipated to result in nearly 29,000 newly created jobs. In addition, turnover, mostly due to the retiring workforce, will result in the opening of 25,000 existing positions each year. 4.3.2 Transportation and Logistics Logistics is the process of planning, implementing and controlling the flow and storage of goods, services and related information from the point of origin to the point of consumption. Transportation and Logistics is already a significant and rapidly growing sector of the Canadian economy. 4-40 urbanMetrics inc. market, economic and strategic advisors
  • 45. TOWN OF CALEDON COMPETITIVE ANALYSIS According to WCM Consulting Inc in their study of the logistics sector for Eastern Ontario, Canada has some 400,000 people employed in the logistics industry with over $50 billion in annual sales (2005). Transportation and Logistics includes various parts of the distribution system including: Production Scheduling Inventory Control Transportation Warehousing Wholesaling Retailing Brokerage 8 The Canadian logistics industry is facing challenges. These challenges will require adjustments and broadened thinking to cope with the realities of global trade. Over the last decade Canada’s transportation industry grew at an annual rate of 6.1% compared to the economy in general which grew at a rate of 3.3%. The overall transportation industry has been a strong place for growth in employment and profits. Important industry trends include: In terms of value, 62 % of Canada/US trade is moved by truck. Trucks carry 75% of goods made in Canada. From 2001 to 2010 global trade is expected to increase by 200-300 % The increase in international trade has helped the transportation industry overall, with marine and air transportation benefiting the most. The trucking industry has been negatively impacted by increased border security and delays at the U.S.-Canada border. Declines in the forestry sector have also negatively impacted the trucking sector, as less demand for shipping occurs. The trucking industry throughout Ontario has also been negatively impacted by increased border security and delays at the U.S.-Canada border and high fuel costs. 8 WCM Consulting Inc, “Eastern Ontario Logistics Sector: Analysis and Competitive Positioning”, October 2005. 4-41 urbanMetrics inc. market, economic and strategic advisors
  • 46. TOWN OF CALEDON COMPETITIVE ANALYSIS While manufacturing in North America has declined and now stands at only 15% of gross domestic product, the consumption of goods is rising. Instead of domestic sources, these goods are increasingly coming from lower wage areas of the world, almost all of which are a continent distant from North America, such as Asia. Managing such complex flows will become an increasingly larger part of the logistics function, coupled with fierce pressure to minimize end-to-end logistics costs. In essence, as their function increases in economic relevance and complexity, logistics practitioners must become ever more sophisticated. A trend towards larger, centralized facilities is evident in most aspects of the physical management of these goods. Such facilities demand sophisticated processes, efficient equipment and the human skill sets to make it all work together effectively. Despite the relatively high capital cost for lands and buildings that are associated with proximity to centres of dense population, there is also a trend to situate such facilities as close as possible to the main urban centres being served. The modelling of logistics flows and costs has demonstrated to the industry that this tends to minimize the re-handling of goods, which is a high cost element in any logistics process. 4.3.3 Food Manufacturing The food and beverage processing industry is a major contributor to the Canadian economy as a supplier of food, a market for agricultural production and a significant source of economic growth. It is Canada’s second largest manufacturing industry behind transportation equipment manufacturing and continues to experience significant growth 9 . As with many sectors of our economy, Canada and Ontario’s food sector is changing. Local domestic markets and indeed international markets are becoming more competitive and are characterized by an increasing proportion of higher value products. In response to this increasing level of consumer sophistication, opportunities for the Canadian food and beverage processing sector are evident both within the North American market but also the expanding offshore market. The consumer markets for food products in North America, Europe and Japan are generally considered to be mature. This has resulted in slower growth in the sale of food products but intense competition for market share. A key source of new growth in North America’s food industry is the steady population increase of immigrant groups (and their associated demands), and the shift to segmented or targeted marketing of agriculture-based products. It is expected that the rapid income growth in Asia’s emerging markets will in turn contribute to the demand for food and agricultural products exceeding the capacity of their domestic economies, thus stimulating global agri-trade. The anticipated shift in consumers’ diets is also expected to result in a greater demand for more meat protein, processed food products, and horticultural 9Statistics Canada website www.40statcan.ca. Canadian Statistics, Manufacturing shipments by sub-sector, November 2005 4-42 urbanMetrics inc. market, economic and strategic advisors
  • 47. TOWN OF CALEDON COMPETITIVE ANALYSIS products. These emerging markets are particularly important to both Canada and the United States. Currently, Canada exports almost half its farm production - either directly as primary products, or indirectly as value-added processed products 10 . Ontario’s base of manufacturing, transportation services, and warehousing sectors stand to benefit from this increasing demand for value added food services. Increasingly, multinational companies are restructuring and consolidating. It is now very common to have a few firms control significant portions of various agricultural markets. Rising costs and interdependency within the food industry have led to economies of scale and consolidation between various levels in the industry, including retailers, distributors, processors, producers, and input suppliers. Multinational manufacturers are increasingly obtaining economies of scale through the dedication of each plant location to one (or a very few) product lines. Distribution centres are now mostly owned by large grocery retailers and food service providers. Ontario’s food industry is a vital part of the Province’s economy comprising 60,000 farms, 35,000 food service firms, 1,500 food and beverage manufacturers and 12,000 food stores. In total the food industry represents about 1,958,000 jobs and is concentrated primarily in key regions – the Greater Toronto Area, the Grand River Region, Southwestern Ontario, the Niagara Region and Eastern Ontario. Historically, the food industry has been an important component of local economic development, providing relatively stable employment for both a skilled and semi-skilled workforce. It has also proven to be stable during recessions: between 1991 and 1995, when general manufacturing's share of total employment declined, food-processing's share of manufacturing employment showed modest increases, consistent with overall population growth 11 . The core food industry activities in Ontario include food-processing, warehousing and distribution, retailing and food service. While directly generating significant economic activity and employment in the Province, the food industry also has a multiplier effect that generates growth in related industries serving, or ancillary to the sector. These include packaging, production of food industry equipment, biotechnology, agriculture, specialized storage and transportation (i.e. refrigeration), industrial and graphic design, civil, industrial and environmental engineering and food science. Ontario’s competitive advantage (i.e. low operating costs and access to the large U.S. market) will continue to be a factor for attracting and retaining firms in the food industry. Thus, firms in Ontario can expect to see more intense and broader-based competition in the Ridgetown College, University of Guelph, Economics and Research Group, “Food Industry Growth Trends in 10 Ontario’s Southwest Region”, 2003. 11 Ontario Ministry of Agriculture, Food and Rural Affairs sector presentation, “Ontario’s Food Industry – we’ve got it all”, 2005 4-43 urbanMetrics inc. market, economic and strategic advisors
  • 48. TOWN OF CALEDON COMPETITIVE ANALYSIS future. This is especially true of the medium and larger operations that are exporting beyond the local geographic region. 4.3.4 Advanced Manufacturing Today, manufacturers have been moving towards increased flexibility, higher quality standards, and greater responsiveness to customer needs. Manufacturing is now characterized by innovation and the ability to make a variety of higher value products 12 . This has led to the movement towards advanced manufacturing which involves new manufacturing techniques and machines, combined with information technology, microelectronics, and new organizations. Advanced manufacturing technologies (AMT) rely on the integration of computers into the production process. These technologies can be assigned to the following functional groups: design and engineering; processing, fabrication and assembly; network communications; and integration and control. Canada’s advanced manufacturing sector is concentrated within Ontario – with over 400 advanced manufacturing firms. Ontario’s advanced manufacturing suppliers are highly integrated into the North American market and concentrate on exporting to the U.S. They have developed niche strengths to serve large multinationals, particularly in the automotive, aerospace, electrical and resource sectors. The advanced manufacturing sector in Ontario contains innovative applications of computer numeric control, computer-integrated manufacturing, robotics, automation and visioning systems, as well as advanced methodologies like lean manufacturing. As a major enabler to help manufacturers meet productivity and cost reduction demands, the advanced manufacturing industry is growing rapidly and is profitable. Growth has remained strong in this sector, with Ontario’s advanced manufacturing industries averaging approximately 3.4% annually. 12 CME, “Global Trends in Manufacturing”, 2004. 4-44 urbanMetrics inc. market, economic and strategic advisors
  • 49. TOWN OF CALEDON COMPETITIVE ANALYSIS 5. Competitive Analysis In order to assess the competitive position of the Town of Caledon, data was collected for a range of demographic and operating cost elements that are typically considered as part of a site location exercise. These comparative elements (summarized in Figure 29) are characterized as either “General” comparators or “Business Case Specific” comparators and assist in demonstrating the capability of Caledon to attract and sustain business investment. FIGURE 29 GENERAL AND BUSINESS CASE SPECIFIC COMPARAT ORS GEN ERAL COMP ARATORS BUSIN ESS CASE SP ECIFIC P O P U L A T IO N G R O W T H M U N IC IP A L T A X R A T E LA B O U R F O R C E G R O W T H D E V E LO P M E N T C H A R G E S A V E R A G E P E R S O N A L IN C O M E E LE C T R IC IT Y C O S T S A V E R A G E H O U S E H O LD IN C O M E WA T E R R A T E S H O U S IN G P R IC E S WA G E R A T E S P R IC E / A C R E O F S E R V IC E D E M P L O Y M E N T L A N D A further consideration is the performance of the Town of Caledon against other Ontario jurisdictions. With input from the Town of Caledon Economic Development & Communications Department, the communities of Brampton, Brantford, Guelph, Halton Hills, and Stoney Creek have been selected for comparison. This is based on a number of factors: similarities in local economies and labour force; proximity, access, and position within the Greater Toronto Area; and success at attracting the type of industry base being targeted by the Town of Caledon. 5.1 General Comparators The “general comparators” between Caledon and the selected jurisdictions include the following: population growth, labour force growth, average personal income, average household income and housing prices. 5.1.1 Population Growth Figure 30 shows the population growth for the selected municipalities from 1996 to 2006. From 1996 to 2001, Caledon had a population growth of 26.83% and the highest population increase with respect to the other municipalities. 5-45 urbanMetrics inc. market, economic and strategic advisors
  • 50. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 30 POPULATION GROWTH (1996 TO 2006) MUNICIPALITY 1996* 2001* % CHANGE 2006** % CHANGE CALEDON 39,893 50,595 26.83 66,366 31.17 BRAMPTON 268,251 325,428 21.31 428,840 31.78 HALTON HILLS 42,390 48,184 13.67 57,457 19.24 GUELPH 95,821 106,170 10.80 129,748 22.21 STONEY CREEK 54,318 57,327 5.54 -100.00 BRANTFORD 84,764 86,417 1.95 92,141 6.62 * SOURCE: Statistics Canada, Census 1996 & 2001 ** SOURCE: FP Markets - Canadian Demographics, Estimate for July 1, 2006 For the purpose of providing a more current understanding of local population growth the FP Markets – Canadian Demographics 2006 study provides an estimate of local, regional and provincial growth estimates. The 2006 study estimates that from 2001 to 2006, Caledon experienced a population increase of 31.17%. Each of the select municipalities also experienced significant growth from 2001 to 2006 with Brampton experiencing the greatest increase at 31.78% followed by Caledon. 5.1.2 Labour Force Growth Figure 31 shows the percentage change in labour force (15 years and older in the labour force) for each of the select communities over the period from 1996 to 2006. Caledon experienced a 30.42% increase in its resident labour force from 1996 to 2001, the highest increase across all the municipalities. The FP Markets – Canadian Demographics 2006 study has estimated that in 2006 Caledon’s labour force comprises approximately 40,364 persons resulting in a further 36.04% increase since 2001. All the municipalities experienced significant growth since 2001, with Brampton experiencing the greatest increase at 37.25% closely followed by Caledon. It must be noted however, that the resident labour force may not represent the workforce required to attract the suggested target sectors. Household income in Caledon is higher than any of the selected jurisdictions suggesting that residents tend to be more affluent. However, the nature of the Town’s employment base – manufacturing, transportation and construction is more likely to recruit workers at the lower income range. 5-46 urbanMetrics inc. market, economic and strategic advisors
  • 51. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 31 LABOUR FORCE GROWTH (1996 TO 2006) MUNICIPALITY 1996* 2001* % Change 2006** % Change BRAMPTON 34,550 184,270 433.34 252,909 37.25 GUELPH 18,460 59,925 224.62 78,248 30.58 CALEDON 18,745 29,670 58.28 40,364 36.04 STONEY CREEK 43,205 30,340 -29.78 -100.00 BRANTFORD 76,380 43,890 -42.54 48,429 10.34 HALTON HILLS 70,475 27,575 -60.87 33,370 21.02 * SOURCE: Statistics Canada, Census 1996 & 2001 ** SOURCE: FP Markets - Canadian Demographics, Estimate for July 1, 2006 5.1.3 Income (Household and Personal) The results for average household income and personal income can provide insight into the labour force costs and quality of employment in a jurisdiction. It can also reveal the spending power of residents in a community. Figure 32 examines the 2006 average household income and personal income in each of the six jurisdictions. There are varying levels of income between the six municipalities being examined. From the group, Caledon can be characterized as affluent or a relatively affluent community. Caledon has the highest average household income and average employment incomes compared to the other jurisdictions. FIGURE 32 AVERAGE HOUSEHOLD & EMPLOYMENT INCOME (2006 ESTIMATES) AVERAGE EMPLOYMENT INCOME (FULL TIME) MUNICIPALITIES AVERAGE HOUSEHOLD INCOME MALE FEMALE CALEDON $115,629 $75,815 $52,585 STONEY CREEK $111,377 $75,243 $50,072 HALTON HILLS $98,036 $59,854 $45,605 BRAMPTON $87,855 $46,458 $30,043 GUELPH $75,548 $59,851 $40,867 BRANTFORD $58,988 $50,268 $34,811 SOURCE: FP Markets - Canadian Demographics 2006 5-47 urbanMetrics inc. market, economic and strategic advisors
  • 52. TOWN OF CALEDON COMPETITIVE ANALYSIS 5.1.4 Average Housing Prices Figure 33 displays the average detached housing prices for 2006 in the select jurisdictions. Housing costs can have an impact on business attraction, as lower cost, good quality housing can make it easier to attract and retain employees. The reverse can also be said, however. Companies looking to attract executives and senior management often cite the quality of local housing as an issue in the site location considerations. Of the five communities, Caledon has the highest average housing prices by a significant margin. Caledon has many detached homes which would accommodate senior executives, management and knowledge workers; however, the Town does not have the requisite housing mix to attract general labour or young workers. FIGURE 33 AVERAGE HOUSING PRICES (DETACHED) MUNICIPALITY AVERAGE PRICE CALEDON* $422,732 HALTON HILLS* $328,906 BRAMPTON* $295,657 STONEY CREEK** $291,700 GUELPH $235,000 BRANTFORD** $204,000 SOURCES: * Toronto Real Estate Board, Market Watch, December 2005 **Royal LePage, Survey of Canadian House Prices, Q2 2006 5.2 Business Case Comparators As part of our competitive analysis, urbanMetrics has also analyzed some of the overlying costs of business operations in Caledon relative to the other select jurisdictions. For the purposes of this analysis, we have focused on the following key business case-specific elements: Municipal Tax Rates Development Charges Electricity Rates Water/Wastewater Rates Price per Acre of Serviced Industrial Land 5-48 urbanMetrics inc. market, economic and strategic advisors
  • 53. TOWN OF CALEDON COMPETITIVE ANALYSIS 5.2.1 Municipal Tax Rates Figure 34 examines the total municipal property tax rates for the selected municipalities. Comparatively, Caledon has both the lowest industrial property tax rate and with regards to the commercial property tax rate. Brantford has the highest industrial property tax rate. Overall, Caledon, Halton Hills and Brampton, the three GTA municipalities, have been able to keep their commercial and industrial taxes lower relative to the three non-GTA municipalities. FIGURE 5.2.1 TOTAL PROPERTY TAXES (LOWER, UPPER, & EDUCATION) COMMERCIAL (RESIDUAL, OFFICE INDUSTRIAL (RESIDUAL MUNICIPALITY RESIDENTIAL MULTI-RESIDENTIAL BUILDING, & FULL/LARGE) PARKING CALEDON 2.426% 2.769% 0.936% 1.410% BRAMPTON 2.697% 3.076% 1.145% 1.766% BRANTFORD 4.722% 6.888% 1.626% 3.248% GUELPH 3.780% 5.267% 1.270% 3.021% HALTON HILLS 2.442% 3.660% 0.997% 1.922% STONEY CREEK 4.129% 6.360% 1.379% 3.320% SOURCE: Municipal Websites 5.2.2 Development Charges Development charges are an important element of site location considerations, since they add to the cost of development. Figure 35 depicts the development charges for the select jurisdictions. Comparatively, the three GTA municipalities have relatively higher residential development charges compared to the other municipalities. On the commercial and industrial side, Caledon, in both cases, has the third highest rates with respect to the six other municipalities, marginally lower than both Brampton and Halton Hills. Higher development charges can sometimes result in a competitive disadvantage if significantly higher than other communities. It can also reflect a positive trend, as they are often associated with a rise in development activity. Further, increased rates are used to fund local infrastructure and services, which in turn, helps to facilitate the attraction of new business investment. 5-49 urbanMetrics inc. market, economic and strategic advisors
  • 54. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 35 2006 DEVELOPMENT CHARGES SINGLE SEMI- MULTIPLE MULTIPLE NON NON APARTMENT APARTMENT DETACHED DWELLINGS 3+ DWELLINGS 1 & RESIDENTIAL RESIDENTIAL MUNICIPALITY UNITS < 2 PER UNITS > OR = 2 DWELLINGS PER BEDROOMS PER 2 BEDROOMS COMMERCIAL INDUSTRIAL UNIT PER UNIT UNIT UNIT PER UNIT PER SQ FT PER SQ FT CALEDON* $23,241.11 $22,057.95 $22,057.95 $16,509.85 $31,051.00 $7.03 $5.01 BRAMPTON* $25,853.27 $25,853.27 $25,853.27 $19,337.52 $19,337.52 $8.05 $6.89 BRANTFORD $7,900.00 $5,525.00 $3,324.00 $5,522.00 $5,625.00 $5.51 $42,079.00** GUELPH $11,376.00 $9,364.00 $9,364.00 $6,725.00 $6,725.00 $6.56 $3.03 HALTON HILLS $21,997.31 $18,483.10 $14,413.72 $9,731.40 $13,397.14 $12.35 $9.13 STONEY CREEK $16,368.00 $13,051.00 $13,051.00 $6,560.00 $10,777.00 $4.81*** $2.58 SOURCE: BMA Management Consulting, Municipal Study 2005, and information from respective municipalities. * APARTMENTS GREATER THAN 750 SQUARE FEET ** PER NUMBER OF ACRES OF TOTAL LOT AREA *** FIRST 5,000 SQUARE FEET AT $4.81, SECOND 5,000 SQUARE FEET AT $7.22 AND 10,000 PLUS SQUARE FEET AT $12.32. 5.2.3 Electricity Rates Utility costs, which comprise electricity, gas and water, do not factor as prominently in the site selection process as land costs, but they are a factor when looking to eliminate a community from further consideration. For the purposes of our study, we have focused specifically on electricity costs as they represent the largest share of an industrial firm’s utility costs. According to the KPMG Competitive Alternatives 2004 report, electricity rates in Canada average 6.3 cents (U.S.) per kWh, as compared to 8.1 cents (U.S.) in the U.S. According to the 2006 Competitive Alternatives report, Canada and France have the lowest electricity rates, with Canada now averaging a little over eight cents per kWh. The Ontario Energy Board is responsible for approving the rates Local Distribution Companies ("utilities") can charge their customers for the distribution and transmission of electricity ("delivery"). The commodity price of electricity is also set by the Ontario Energy Board (OEB). On April 1, 2005, the price for electricity was changed to better reflect the price paid to generators. These prices were intended to stay the same for one year. On May 1, 2006, and every six months after that, the prices for electricity may change based on an updated OEB price forecast and any difference between the amount consumers paid for electricity and the amount paid to generators from April 1, 2005 to April 30, 2006. 5-50 urbanMetrics inc. market, economic and strategic advisors
  • 55. TOWN OF CALEDON COMPETITIVE ANALYSIS For consumers on the Regulated Price Plan, from November 1, 2005, to May 1, 2006, residential consumers will pay 5.0 cents per kilowatt hour (kWh) for the first 1,000 kWh of electricity they use each month. For electricity used above 1,000 kWh, the charge is 5.8 cents per kWh. For non-residential consumers, a 750 kWh threshold is in place year-round. Also, initiated in November 2005, electricity use in Ontario is subject to winter and summer rates, and electricity use thresholds. The price threshold - the amount of electricity that is charged at the lower price - will change two times a year for residential consumers. The price threshold will be 1,000 kWh per month during a winter season (November 1st to April 30th) and 600 kWh during a summer season (May 1st to October 31st). This means consumers will be able to use more electricity at a lower price in the winter when many people need more electricity for light, indoor activities and heating. For non-residential consumers who are eligible for the new price plan, the price threshold will remain at 750 kWh for the entire year. Beyond these base charges, businesses have to pay extra fees in each jurisdiction, such as fixed monthly charges, and local delivery, transmission, and debt retirement charges. These rates differ depending on the electricity provider. Figure 36 shows the different rates. FIGURE 36 ELECTRICITY CHARGES (COMMERCIAL/INDUSTRIAL OPERATING ABOVE 50 KW) LOCAL DELIVERY & DEBT RETIREMENT MUNICIPALITY BASE CHARGES FIXED CHARGES TRANSMISSION CHARGES CHARGE CALEDON $0.05 PER KWH $194.49 PER MOS. $6.42 PER KW $0.07 PER KWH BRAMPTON $0.05 PER KWH $158.18 PER MOS. $8.49 PER KW $0.07 PER KWH BRANTFORD $0.05 PER KWH $50.55 PER MOS. $6.77 PER KW $0.07 PER KWH GUELPH $0.05 PER KWH $76.83 PER MOS. $6.75 PER KW $0.07 PER KWH HALTON HILLS $0.05 PER KWH $216.15 PER MOS. $6.27 PER KW $0.07 PER KWH STONEY CREEK $0.05 PER KWH $158.18 PER MOS. $8.49 PER KW $0.07 PER KWH SOURCE: Information provided by respective electricity providers *$5.80 for first 750 KWH per month, additional at $6.70 KWH per month In order to compare the Town of Caledon to the five competitive communities, an average electricity rate and volume for running a mid to large size commercial/industrial business was confirmed through discussions with the Town’s Economic Development officers and local utility providers. The electricity rate and volume used to compare the municipalities was an average rate of 125 kilowatts (kW) and a volume of 50,000 kilowatt hours (kWh). As shown in Figure 37, the total monthly electricity costs of running a medium/large size commercial/industrial business at an average rate of 125 kW and at a volume of 50,000 kWh are lowest in Stoney Creek and highest in Caledon. 5-51 urbanMetrics inc. market, economic and strategic advisors
  • 56. TOWN OF CALEDON COMPETITIVE ANALYSIS FIGURE 5.2.3.1 TOTAL ELECTRICITY CHARGES/MONTH (AT 125kW & 50,000kWh) MUNICIPALITY TOTAL CHARGES CALEDON $4,607.27 HALTON HILLS $4,566.93 BRANTFORD $4,461.07 GUELPH $4,433.83 BRAMPTON $4,370.62 STONEY CREEK $4,211.64 SOURCE: Information provided by respective electricity providers 5.2.4 Water and Wastewater Rates Water and wastewater rates are also an important element of site location considerations, since they can significantly add to the costs of running a business, particularly if the business relies on heavy water usage. The establishment of water and sewer rates is a municipal responsibility and the absence of standard procedures across Ontario has resulted in the evolution of a great variety of rate structure formats. Municipalities, however, are limited in their options based on class rate structures. Further, municipalities are not permitted to profit (beyond fixed and operational costs) from the rates they charge. Figure 38 shows the water and wastewater rates for commercial/industrial large volume users. FIGURE 38 WATER AND WASTEWATER RATES (GENERAL SERVICE, LARGE VOLUME USERS - COMMERCIAL AND INDUSTRIAL) FIXED MONTHLY WATER WASTEWATER FIXED MONTHLY CHARGE ADDITIONAL TOTAL CONSUMPTION MUNICIPALITY CHARGE CONSUMPTION CONSUMPTION (WATER) CHARGES 3 (WASTEWATER) 3 3 CHARGE (per m ) CHARGE (per m ) CHARGE (per m ) CALEDON $0.00 $54.75 $0.79 $0.59 $0.00 $1.39 BRAMPTON $213.68 $47.76 $0.45 $0.74 $0.00 $1.19 BRANTFORD $80.00 $98.23 $0.75 $0.64 $0.14 $1.53 GUELPH $80.00 $98.23 $0.75 $0.64 $0.14 $1.53 HALTON HILLS $80.00 $98.23 $0.75 $0.64 $0.14 $1.53 STONEY CREEK $213.68 $47.76 $0.45 $0.74 $0.00 $1.19 SOURCE: Information provided by respective municipalities and regional governments 3 *Provided by Halton Region, based on a meter size of 50mm and consumption over 61m 3 **Provided by Durham Region, based on a meter size of 51mm and consumption between 46 to 4,500 m 5-52 urbanMetrics inc. market, economic and strategic advisors
  • 57. TOWN OF CALEDON COMPETITIVE ANALYSIS In order to compare the Town of Caledon to the five competitive communities, urbanMetrics determined a typical water consumption rate for running a medium to large size commercial/industrial business, as confirmed through discussions with economic development staff, and information provided by Ontario Investment Services and the BMA Municipal Study – 2005. As shown in Figure 39 the total monthly water/wastewater charges for a medium to large size commercial/industrial business using a volume of 125 m3/month is highest in Stoney Creek and Halton Hills. Caledon and Brampton, both serviced through the Regional Municipality of Peel, had the lowest rate. FIGURE 39 COMMERCIAL/INDUSTRIAL LARGE VOLUME USER MUNICIPALITY TOTAL CHARGES/MONTH (125m3/month) STONEY CREEK 502.78 HALTON HILLS 384.64 BRANTFORD 255.75 GUELPH 201.15 CALEDON 132.50 BRAMPTON 132.50 SOURCE: Information provided by respective municipalities and regional governments 5.2.5 Price per Acre of Serviced Employment Land In lieu of rental rates, the price of serviced industrial land has been assessed. The price of industrial land is one of the more significant variables in the decision making process for new and relocating firms. Figure 40 shows the average industrial land prices in each of the select communities. This information was derived through conversations with realtors, economic development officers, the Toronto Real Estate Board and the BMA Municipal Study – 2005. The price of serviced employment land in Caledon is below other GTA west communities. Employment land in the City of Brampton is marginally higher than Caledon’s; yet Caledon’s land is competitive to the other western GTA municipality of Halton Hills which has employment lands along Highway 407. However, Caledon’s land prices are significantly higher than the non-GTA municipalities of Stoney Creek, Guelph and Brantford. Compared to the selected communities, Caledon is in a competitive position to attract industry due to its proximity to Toronto; however, land prices are increasing throughout the GTA. As a result, land price may not be a competitive advantage for Caledon in the future. The Town of Caledon does have vacant employment land in key locations. In Bolton, 597 gross acres of land are available in the Mayfield Road and Highway 50 area. In Tullamore, 5-53 urbanMetrics inc. market, economic and strategic advisors
  • 58. TOWN OF CALEDON COMPETITIVE ANALYSIS an additional 248 acres of vacant employment land is available in the Mayfield Road and Airport Road area. The future of Caledon will see further premium employment lands adjacent to the planned Highway 410 extension. As a part of the Mayfield West Community Development Plan, about 450 gross acres of employment land are proposed along the Highway 410 extension into Caledon. FIGURE 40 PRICE RANGE OF SERVICED EMPLOYMENT LAND PER ACRE MUNICIPALITY PRICE OF SERVICED EMPLOYMENT LAND/ACRE BRANTFORD $70,000 - $150,000 STONEY CREEK $125,000 - $275,000 CALEDON $170,000 - $325,000 BRAMPTON $200,000 - $400,000 HALTON HILLS $200,000 - $300,000 GUELPH $412,500 - $475,000 SOURCE: Discussions with Economic Development Officers, and information from Ontario Investment Services & Toronto Real Estate Board 5.2.6 Summary of Cost Comparators Figure 41 provides an overall summary and ranking of the preceding analysis. Based on the business cost variables and key general comparators, Caledon is fourth amongst the selected municipalities. Brantford and Guelph had the best performances of the six communities. These rankings (Where 1 is most favourable and 6 is least favourable) only relate to the comparisons used in the preceding analysis, and should be interpreted with discretion, as they do not determine the overall competitiveness of a municipality. There are too many direct and indirect elements that impact the business attraction and site selection process for such a conclusion to be made. Further, the “weight” a prospective company may give to any of these comparators varies. Nevertheless, when interpreted solely based on the specific comparators chosen, these rankings suggest that the Town should be viewed by the business community as competitively positioned. Based on the overall case ranking and the general comparators, the Town of Caledon is seen as competitive against the selected municipalities. In terms of key cost comparators, Caledon performed very well against the other municipalities. However, the overall income level and housing prices hurt as the cost of living may be higher and the employment mix may not be diversified enough to fulfill the needs of manufacturing industries in Caledon compared to the other municipalities. On the other hand Caledon had the lowest municipal tax rates of all the municipalities in the analysis. The competitive business environment that exists across the GTA heightens the importance of the marketing message. 5-54 urbanMetrics inc. market, economic and strategic advisors
  • 59. TOWN OF CALEDON COMPETITIVE ANALYSIS Communicating the positive business environment in Caledon to advance interest and investment in the town becomes even more imperative. FIGURE 41 BUSINESS CASE RANKING CALEDON BRAMPTON BRANTFORD GUELPH HALTON HILLS STONEY CREEK Lowest Average Income (Household and Employment) Rank 6 4 1 3 5 2 Lowest Average Housing Prices Rank 6 4 1 2 5 3 Lowest Municipal Tax Rate: Industrial Rate Rank 1 2 6 4 3 5 Commercial Rate Rank 1 3 6 4 2 5 Lowest Development Charges: Industrial Charge Rank 4 5 1 3 6 2 Commercial Charge Rank 3 4 1 2 6 5 Lowest Electricity Charges: Operating at 125kW & 50,000kWh Rank 6 2 4 3 5 6 Lowest Water/Wastewater Charges: Using a volume of 125m3/month Rank 1 1 4 3 5 6 Lowest Cost per Acre of Serviced Industrial Land Rank 4 6 1 2 4 3 SUM OF SCORES 32 31 25 26 41 37 OVERALL RANKING (lowest of combined score) Rank 4 3 1 2 6 5 A further consideration will be what “weight” a prospective company may give to any of these factors as low cost is not always the deciding factor. Often one or two of these factors may drive the site selection process for a company coupled with other issues such as proximity to market, quality of labour force, access to a 400 series highway, transportation infrastructure, etc. Having discussed the cost competitive position of Caledon, a further consideration for the Town would be the type of economic development activity that is occurring in each of the select communities. The discussion that follows provides Caledon with an improved understanding of the types of considerations that should be at the forefront of discussions around heightening the Town’s market and economic development profile. 5-55 urbanMetrics inc. market, economic and strategic advisors
  • 60. TOWN OF CALEDON COMPETITIVE ANALYSIS 5.3 Summary The Town of Caledon prides itself on having small town ambiance while providing all the advantages of a well-serviced urban centre. Caledon is a unique community that belongs to one of North America’s most dynamic regions, the GTA, while maintaining a small town charm and lifestyle. The Town has been very successful in creating a high quality of life overall. With the natural environment, golf courses, and parks, Caledon has become a prosperous community and attractive place to live. Caledon has excellent transportation infrastructure with easy access to major highways, rail, and the airport. Caledon has access to highways 427, 410 and 407. Caledon is also only a short distance from Lester B. Pearson International airport, the 29th busiest in the world (Airports Council International, 2004). CN and CP Rail provide intermodal services from terminals in Brampton, just south of Caledon (CN); Etobicoke, southeast of Caledon (CP); and Vaughan, to the east Caledon (CP). The Town will also be experiencing growth in population, as well as the development of a new community, Caledon’s Mayfield West. Council has approved to adopt Official Plan Amendments for the Mayfield West Secondary Plan, fulfilling the Town’s tri-nodal growth strategy. The Mayfield West community development plan will provide high quality, accessible and available employment lands to contribute to the Town’s employment targets and achieve the desired live/work opportunities. Approximately 180 hectares (444 acres) of employment lands have been reserved in Mayfield West near the Highway 410 extension. Due to Caledon’s proximity to Toronto, the airport and accessibility to 400 series highways, employment land prices are increasing. As less land is available in Mississauga, Brampton and Vaughan, many are looking to Caledon for larger tracts of land. However, as the land prices increase, Caledon will lose some of its competitive advantage regarding the cost of development overall forcing some companies to look further beyond the GTA for greenfield development. Individuals who live and work in Caledon enjoy the comforts and convenience of doing both within the community. However, local industry is not employing many Caledon residents and there is a high incidence of employees living outside of Caledon and Peel Region. This has resulted in a significant commuter flow in and out of Caledon each day. The Caledon industries involved in production and manufacturing are finding their general and skilled labour from neighbouring communities. The Caledon businesses that require general or technically skilled labour have suggested they are having issues recruiting for these positions. The cost of housing including property tax rates combined with the lack of housing choices have resulted in Caledon being a very expensive community to live in. This fact has created issues for businesses trying to attract general labour from the local labour force. With high housing costs and a lack of housing 5-56 urbanMetrics inc. market, economic and strategic advisors
  • 61. TOWN OF CALEDON COMPETITIVE ANALYSIS options, many individuals in lower income brackets are unable to live within the community. General labour positions are mostly lower wage positions and could not sustain the costs of residing in Caledon. Even with the large labour pool of the GTA, Caledon’s dilemma is compounded by poor public transit and linkages with surrounding municipalities. Access in and out of Caledon has become increasingly more congested. As residential and business growth continues, investment into Caledon’s transportation infrastructure will be needed. Better access to the highways and improved infrastructure as a whole is needed in Caledon. As growth continues in Caledon and Peel Region, a more accessible transit system will be required. If this does not occur, the local industry’s access to the GTA workforce will continue to be limited to individuals with automobiles only. 5-57 urbanMetrics inc. market, economic and strategic advisors
  • 62. TOWN OF CALEDON COMPETITIVE ANALYSIS 6. Community SWOT Analysis An important consideration in any investment attraction effort is the opinions and thoughts of those business and industry leaders that already operate within a select jurisdiction. Area businesses can provide an excellent source of up-to-date information or perceptions, as it relates to an area’s strengths and weakness as well as the opportunities and threats that may be confronting industry groups or a region as a whole. A SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) was undertaken to examine the Town of Caledon’s ability to support the attraction, retention and expansion of business investment. This was accomplished through discussions with 15 participants in the form of telephone and personal interview sessions with local business owners and key stakeholders. The analysis provides insight into the most commonly held opinions as to the perceived gaps and opportunities for the Town of Caledon and serves to further inform the Town as to its current competitive position. The findings of the SWOT Analysis are summarized below. 6.1 Strengths Competitive Land Costs - Land prices are considered comparable and in some instances cheaper than Brampton, Toronto or Mississauga locations. However, many businesses commented that land prices and development charges were increasing in the Town, but the value proposition for business had not improved. Transportation Infrastructure - Caledon will have good transportation connections to Provincial highways once extensions are built. Current proximity to the provincial 400 series highways (410, 407, and 427) is seen as an advantage for the business community. There is also ready access to the international airport, intermodal facilities and cargo and logistics companies. This was significant as many local firms are exporting product beyond Ontario and Canada. Proximity to the GTA - Caledon’s proximity to the GTA means businesses have ready access to significant marketplace and supply chain, as well as a regional labour force pool. This in turn enables local business to draw from a bigger and some suggested better labour force than just Caledon. Community Amenities - Many residents are experiencing a high quality of life in Caledon given the quality of local neighbourhoods, investment in public amenities, green space, quality of schools etc. A Pro-business Attitude is Emerging - Economic development staff are seen as making a difference in terms of dealing more effectively with the concerns of 6-58 urbanMetrics inc. market, economic and strategic advisors
  • 63. TOWN OF CALEDON COMPETITIVE ANALYSIS business and industry. The Mayor and Council are also seen as being more business friendly than in the past. Strong Agricultural Base - The Town maintains a strong agricultural base although it has shifted from larger scale livestock operations to poultry farming and small scale horticulture operations and equine operations. The region’s proximity to the GTA is seen as a huge market opportunity for the sale and distribution of local product. 6.2 Weaknesses Taxes are High - Taxes are increasing for local businesses. There was considerable concern that the Town needs to make more of a concerted effort to attract new business investment to ensure a more equitable balance between residential and industrial taxes. Building Permit Delays - Businesses are waiting too long to get building permits approved. Waiting two to four months is acceptable but a year is not. The building permit process is a significant issue for the business community. It is considered a very slow process relative to other areas and very convoluted. The Town does not appear to have the resources to expedite the process. Lack of Public Transit - The lack of public transit and direct linkages to neighbouring municipalities makes it difficult to attract the semi-skilled labour that many local industries need. Businesses are finding that they have to pay more to attract the workers to the area and this is driving up their cost of operations. Congestion on Roads - The roads used by commuters are a problem. The network is congested and adds to the commute times of employees. Lack of Business Amenities - Many of the businesses indicated that the lack of hotel accommodation is a problem for them. When they have U.S. and overseas visitors they have to house them in Vaughan or Brampton rather than in the local community. This does not reflect favourably on the community. High Cost of Living - Employees want to live closer to where they work. It is difficult to recruit talent out of college or university as they cannot afford to live in the community and there are no housing options other than single family homes. Labour Force Availability - General labour is hard to find. Caledon does not have a large enough local labour pool to support the needs of local industry. It is a high income community and many local residents do not work in the community. Recruiting talent to the region is also difficult as many do not want to commute the distance particularly if there is alternative employment closer to the City of Toronto. 6-59 urbanMetrics inc. market, economic and strategic advisors
  • 64. TOWN OF CALEDON COMPETITIVE ANALYSIS Planning for Infrastructure - The community has not had a voice in planned infrastructure improvements. The business community in particular needs to be more involved in advocating the needed improvements for the town. Constant delays have had a negative impact on the community in terms of delayed investment. Vacant Industrial Land - The Town needs to encourage the development of vacant industrial land. Many businesses were concerned that the Town was not doing a good enough job to promote the availability of land/sites in local business parks and consequently a few businesses are paying the costs for roads, lights and maintenance to support a whole park. Availability of Large Parcels of Land - It is difficult to find larger parcels of shovel ready industrial land. Many businesses suggested Caledon may not be able to accommodate future expansion plans. This was noted for industrial expansion and office uses. Zoning in Business Parks - Current zoning does not reflect the needs of business. Town needs to consider the type of industry that is attracted or being targeted and address the locational and operational needs through the Town’s Zoning By-Law. Lack of Attention Afforded to Bolton - Bolton is the Town’s major urban area, but little attention is given to the issues facing this component of the community – standards of design for new development, the downtown core, and the need for higher density housing. Deteriorating Downtown - Downtown Bolton is deteriorating and there is no parking or transit. The deterioration conveys a negative impression of the community. The Town needs to look to Oakville, Kleinburg or Markham as examples of what can be achieved in an older downtown core. Lack of a Vision for Community - The Town is not seen as having a plan for the future. Council needs to articulate a vision and plan for the future. Lack of Housing - The Town is not providing a range of housing options to satisfy the needs of the growing residential population. Resolution of Land Use Disputes – The Town needs to be more proactive in resolving land use disputes in the Town. There is concern that the Town leaves too much to the Ontario Municipal Board and has not had a good track record in this regard. It was suggested that the Town needs to rethink what is important in terms of land uses and compatibility and work towards creating that environment rather than leaving the matter for the OMB. 6-60 urbanMetrics inc. market, economic and strategic advisors
  • 65. TOWN OF CALEDON COMPETITIVE ANALYSIS Lack of Profile - Caledon and more particularly Bolton are not well known as a business location. Many businesses outside of Caledon don’t know where Caledon is located. Economic Development is Under-funded - Economic development lacks sufficient funding to do competitive positioning. The Town needs to market the benefits of the community and focus on attracting businesses with a high potential for employment growth. Growing Rural Conflict - There is a growing conflict between farmers and non-farmers in the community. Land use decisions and severance policies have had the effect of sterilizing farm operations. This will likely result in more hobby farming over time and an increase in equine operations that reduces crop production altogether. Local farmers have also been unsuccessful in gaining support for rural road management and improvements in the region that contributes to the viability of their operations. 6.3 Opportunities Growth is Inevitable - The Town needs to focus on planning for a community that capitalizes on the attributes of the area. Caledon is changing from a rural community to a suburban community and Bolton is what is attracting the population, business base and tax base. A vision to guide and manage this growth needs to be developed. Accommodate a Wider Range of Business and Industrial Uses - This should include prestige business, general industry and heavy industry. Have these uses reflected through existing business parks and planned employment areas. Given consideration to a wider range of opportunities to accommodate the growth of small and medium industrial operations (e.g. industrial malls, multiple tenant facilities). External Focus to Marketing - Enhance the marketing of the community to the outside business community. Foster a Better Relationship with the Chamber of Commerce - The Town needs to be seen as working more closely with the Chamber and local businesses. There needs to be more opportunity to talk about local issues and provide value to the Town. Develop a local BR+E Program - The Town needs to spend more time visiting businesses and understanding the issues they face. This should be ongoing not just at re-election time. Develop a ‘How to’ Guide - There is a lack of information available over the counter or on line, on how to do business in the Town. Develop a “Doing Business in Caledon” brochure for small and medium sized businesses and put it on the Town’s website. Set 6-61 urbanMetrics inc. market, economic and strategic advisors
  • 66. TOWN OF CALEDON COMPETITIVE ANALYSIS out what a business needs to know and needs to do to set up a business in Caledon (e.g. permitting, rezoning, business services, etc.) Support for Manufacturing - A number of local businesses are involved in the Excellence in Manufacturing network. While there has been difficulties attracting local businesses to the group in Caledon, this would improve if the networking opportunities were better promoted by the Town. Promote Technology Infrastructure - In the same way that the Town ensures the delivery of water and sewer services it needs to ensure that the availability of broadband and technological infrastructure is at a high level across the municipality. Better Promotion and Improvements to the Downtown - The Bolton Downtown has the potential to attract professional service firms from technology to finance insurance & real estate enterprises but the recent deterioration needs to be addressed and reversed. Promote Partnerships with High schools - Give consideration to developing co-op programs with the local high schools. Students need to get a better understanding of the opportunities that are available to them in the community. This may help to offset the difficulties in recruiting general labour. Invest in the Long Term Viability of Agricultural Sector - To maintain a viable agricultural base, the Town needs to attract a major investment as an anchor for the industry. One example is an anaerobic digester in partnership with the Region of Peel and the Province. Consideration could be given to the creation of a bi-product of organic waste that in turn could be used on agricultural land. Another consideration would be the waiving of building permit fees for agricultural buildings used in food production. 6.4 Threats Quality of Electrical Supply - The quality of the hydro supply in the Town is seen as a major issue for local industry. Many are experiencing power failures and brown outs that result in the shutting down of their operation and significant cost to the business. Down time due to power outages are high compared to other regions. The Town is not seen to be acting very quickly on this issue. Timing Around Infrastructure Improvements - The extension of Highways 410 and 427 is becoming a significant impediment for business and industry. Truck traffic from Caledon really only has Highway 50 as a point of exit from the town to these routes and delays along Highway 7 are an increasing concern for local operators given the length of time it is now taking to reach Highway 427. 6-62 urbanMetrics inc. market, economic and strategic advisors
  • 67. TOWN OF CALEDON COMPETITIVE ANALYSIS Lack of Property Standards in Business Parks - The Town needs to address the issue of property standards in its business parks. If the Town’s intent is to attract food manufacturing or prestige office then they must enforce a higher level of property standard for the areas. Better delineation of industrial uses is also required - as it is prestige office uses are not compatible with general or heavy industry or operations with outside storage functions. Better Management of Growth is Needed - Brampton is seen by some businesses as a badly planned community with poorly planned infrastructure. The Town needs to concern itself with ensuring a balanced pattern of residential and business growth while at the same time protecting the natural environment that appeals to so many residents. The Town needs to articulate what the strategy is for the Town. The business community does not feel that it has been well informed as to the direction for the community in the future and this is having an impact on future business plans. Lack of Support to Small and Medium Sized Businesses - Strong perception that the Town will go out of its way for large companies but provides no assistance to small and medium sized businesses. Encroaching Residential Development - Residential development is starting to encroach on existing industrial development. This will result in more conflict with residents in the future. The Town needs to ensure that business is suitably buffered from new development. Urban/Rural Traffic Congestion – Increased commuter traffic on rural roads is a significant concern for the agricultural community particularly as it relates to the dangers facing slowing moving vehicles (e.g. tractors and combine machinery). 6-63 urbanMetrics inc. market, economic and strategic advisors
  • 68. TOWN OF CALEDON COMPETITIVE ANALYSIS 7. Recommendations The marketing tactics contained in this section represents a fact-based document that is intended to assist the Town in building strategies that work. It should serve as a road map to help Caledon achieve its objectives of fostering a healthy and dynamic economy. The document builds upon the mandate of economic development as recommended by LEA Consulting in November 2002 and the goals and objectives articulated by the Town of Caledon’s Economic Development department to introduce new strategies and ideas to move the community forward. 7.1 What Drives Site Selection? Factors driving the site selection process are governed by general trends taking place in the economy. It is little wonder to see that the imperatives driving location in 2001 are much 2005 Corporate Survey different than those that exist today. In Site Selection Factors consideration of this, Area Development Magazine Ranking* 2005 1 Highway accessibility 91.4 conducts a 2 Labour costs 87.9 comprehensive annual 3 Availability of skilled labour 87.2 survey of companies from 4 State and local incentives 86.0 all sectors of the economy 5 Availability of high-speed Internet access 85.7 6 Corporate tax rate 85.0 to gauge the location- 7 Occupancy or construction costs 83.7 criteria that drives 8 Tax exemptions 83.6 investment in new plants 9 Proximity to major markets 83.2 and facilities. Based on 10 Energy availability and costs 82.8 11 Availbility of telecommunications services 79.8 the most recent survey 12 Cost of land 79.1 (published in December 13 Low union profile 77.0 2005), the following is a list 14 Availability of land 75.0 15 Environmental regulations 71.1 of the Top-25 site selection 16 Right-to-work state 69.7 factors in rank order. It 17 Proximity to suppliers 66.7 should be noted that the 18 Raw materials availability 62.3 results ranks the criteria 19 Training programs 59.6 20 Availability of long term financing 56.5 considered very important 21 Availability of unskilled labour 50.6 or important by the survey 22 Accessibility to major airport 50.0 respondents. While a 23 Proximity to a technical university 30.2 comprehensive survey of 24 Railroad service 28.9 25 Waterway or oceanport accessibility 20.2 Canadian firms is not available, urbanMetrics Source: 20th Annual Corporate Survey, Area Development Magazine inc. has completed a * All figures are percentages and are the total of "very important" and "important" ratings number of GTA based 7-64 urbanMetrics inc. market, economic and strategic advisors
  • 69. TOWN OF CALEDON COMPETITIVE ANALYSIS business surveys in 2005/2006. The results of this work provide similar findings. Understanding the decision-making imperatives that govern site selection is fundamentally important to developing a communication and marketing strategy. At the outset, Caledon needs to develop its marketing proposition around as many of the basic industry requirements as possible and couple this with success stories as they happen, as well as information and profiles of companies already in the community. It is equally important that staff and resource persons (i.e. local Ambassadors) communicate these messages clearly when meeting with clients, site selectors, government officials, corporate executives and other influencers. An important consideration in the development of a community’s offering will be the amount of relevant information that is available on a municipality’s website. In reporting on the top site location considerations, Area Development also reported that the single most important source for information on a jurisdiction is the internet. A further consideration in the development of a Marketing Strategy to guide economic development efforts is the effectiveness of the various marketing tools available. In evaluating these tools we refer to the recent survey completed by Development Counsellors International – The Corporate View: Winning Strategies in Economic Development, 4th Edition. Based on a U.S. survey of senior executives from a range of large and mid-size firms the following key findings were reported: 1. Dialogue with industry peers is the leading source of information influencing an executives’ perception of a state or region’s business climate. Articles in newspapers and magazines and business travel shared second place followed by meetings with economic development groups and on-line sources. When consideration is given to the needs of site selection firms rather than corporate executives the importance of meetings with economic development groups and on-line sources becomes even more important. 2. Planned visits to corporate executives, internet/website and public relations/publicity received the highest ratings among all economic development marketing tools. Internet/website showed the greatest increase. 3. Sixty five percent of respondents indicated a strong likelihood that they would use an economic development organization’s website in the next site location search. The executives named information on available incentives, demographic information and a directory of available buildings and sites as the most useful features of an economic development organization’s website. 4. When asked at what point in a site selection search they would typically contact an economic development organization, almost half of the respondents selected, indicated it would be after they had developed a short list of potential communities. 7-65 urbanMetrics inc. market, economic and strategic advisors
  • 70. TOWN OF CALEDON COMPETITIVE ANALYSIS While both of these surveys are based on the response of U.S. companies and executives, the factors affecting a site location decision are more likely to differ on the basis of industry than on whether the company is U.S. or Canadian. In addition, the Province, and indeed the GTMA have recognized the importance of developing investment opportunities and relationships in the U.S. as evidenced by the amount of promotion and marketing conducted by each organization. Taking into account the foregoing, the following sections that follow set out a recommended approach for investment attraction in the Town of Caledon. 7.2 Marketing Direction 1. The Town should continue to promote the inventory of vacant employment land in Bolton and Tullamore as well as future development opportunities in Mayfield West along the future Highway 410 extensions. This will enable the Town to take full advantage of the opportunities of the growing GTA economy. Given the significance of transportation and construction industry activities, the Town should consider retaining these businesses by zoning some of these lands to support new business investment and expansion of existing businesses. However, premium locations, such along the Highway 410 extension and main roads would be ideal for prestige industries and business parks. We strongly support the Economic Development Department’s sites guide that promotes both the Business Park lands and the assets of the community. 2. The Town should consider developing a series of initiatives that are focused on heightening Town staff, the Mayor, Council and the business community’s awareness of corporate economic development principles. This could include providing an improved understanding of the services and information available from Economic Development, the role of Economic Development as well as ‘How to Guide’ for starting a business in Caledon. 3. Direct expenditure by the Town for international marketing efforts are not warranted or cost efficient for the community. However there is a strong argument for the Town to continue its involvement in the investment attraction efforts of the Greater Toronto Marketing Alliance (GTMA) whose mandate is to advance the GTA as a prime location for business investment. To this end the GTMA focuses its international marketing efforts in selected key sectors where the GTA has identified strengths in terms of existing plant (industry concentration) infrastructure and human resources. The investment attraction efforts are driven by the recommendations of sector based committees as well input from public and private sector members of the GTMA. 7-66 urbanMetrics inc. market, economic and strategic advisors
  • 71. TOWN OF CALEDON COMPETITIVE ANALYSIS In the case of Caledon, there are considerable local strengths to justify its involvement in Advanced Manufacturing initiatives through the GTMA. Historically, the Town has been involved with the GTMA’s Automotive Investment Attraction Committee (AIAC), now the Advanced Manufacturing Committee, which is focused on advanced manufacturing industries from Aerospace, Automotive and Industrial Design. The GTMA’s long established Automotive Committee is centred around SAE in Detroit every winter. In 2006, GTMA brought together a new initiative combining all aspects of advanced manufacturing including AIAC, SAE, ACP (MBS), Traverse City, CSM lead generation, intelligence gathering through Seneca College, and presentations to Consulates in targeted communities, conference and trade show floor strategies and new lead generation initiatives. The new committee focused on presenting seminars in Cleveland, Detroit and Toronto as well as participating in pre-qualified meetings in the S.E. USA and hosted an SAE related event in Detroit in partnership with the Canadian Consulate. This GTMA initiative has as its basis, the development of four Canadian Consulate events in the U.S. in Atlanta, Detroit, Cleveland and Chicago. A key consideration with respect to Caledon’s continued involvement with these committees is the opportunity to benefit directly from organized business missions with a focus on qualified lead generation and the involvement of local business ambassadors to advocate the strengths of the community and the region. In addition to the Committee involvement, the GTMA often organizes initiatives that pursue opportunities in emerging or developing sectors a study of the opportunities for the GTA. For example, the Branham Group is completing a Business Process Outsourcing (BPO) study for the Ontario Ministry of Economic Development and Trade and the GTMA which will be launched later this summer. The GTMA has also developed a “Pitch Package” or community profile template for communities that participate in their trade missions or lead generation activity. The material is used in presentations to potential investment opportunities and details the essential considerations for investing in a select jurisdiction. Consideration should be given to developing the template content in conjunction with the Town’s participation with the GTMA. The same material could also be used by the Town in its own efforts at investment attraction and the update of its Community Profile due to be completed in 2007. 4. In addition to further developing its ties with the GTMA, the Town should also maintain strong communication linkages between neighbouring economic development partners. To this end it should continue to look for opportunities to promote the region for investment attraction. A good example of this could be working with the Excellence in Manufacturing Consortium (EMC), a unique not-for-profit consortium of manufacturers, incorporated to facilitate each member’s development, both individually and collectively, towards improving their global competitiveness. 7-67 urbanMetrics inc. market, economic and strategic advisors
  • 72. TOWN OF CALEDON COMPETITIVE ANALYSIS 5. Establish opportunities for regular contact with trade representatives and sector specialists at the Ministry of Economic Development and Trade (MEDT), Ministry of Agriculture, Food and Rural Affairs, and particularly as it relates to their work with the GTMA around their ongoing work with the Advance Manufacturing sectors. 6. Over time, the Town should investigate the opportunity to develop “feature pieces” that showcase the economic growth and diversity that is occurring. This should include information/profiles on companies in the area that contribute to an international awareness of the Town for business investment. The Town should work with editorial staff from magazines like Area Development Magazine, Site Selection Magazine or Ontario’s Trade and Commerce Magazine to determine the timing for submissions in their Featured Region’s supplement. Coordinate with MEDT as to timing of the Ontario supplement. 7. As reported earlier, there is significant attention being given to a municipality’s website by site location experts and corporations looking at location alternatives. As a result this is often the first impression of a community. Municipalities across Ontario including some of those jurisdictions considered most comparable with Caledon, have developed website content that profiles their community, their markets and by extension their labour force and local businesses. There are many examples of where this information is further refined with the inclusion of industry sector profiles. As more and more municipalities improve their use of the Internet, a strong and robust community profile becomes essential. The Town’s website has just recently been upgraded, however further consideration should be given to enhancing the existing Economic Development component of the website with information that profiles key sectors and provides more complete information on the current level of business investment and a greater range of business profiles. 8. It is essential that the Town of Caledon establish a formal Business Retention and Expansion Program (BR+E). As part of this effort, a more aggressive Corporate Calling Program should involve the Mayor as well as other senior personnel, and Caledon’s Business Ambassadors. Given the significant number of businesses that indicated plans to expand their business, it is critical that the Town be seen as facilitators of this investment. 9. Caledon should continue to strengthen its relationships with Ontario’s top-tier industrial- commercial-institutional (ICI) real estate brokers through more regular contact. Generally speaking it is the brokerage community that will be able to assist Caledon develop business recruitment leads because of their direct market knowledge of: • Companies/Clients approaching the end of their lease terms, and • Companies/Clients seeking new locations for expansion. It is also important to note that businesses regularly engage these ICI professionals to participate in long-term facility needs planning. 7-68 urbanMetrics inc. market, economic and strategic advisors
  • 73. TOWN OF CALEDON COMPETITIVE ANALYSIS Appendices 7-69 urbanMetrics inc. market, economic and strategic advisors
  • 74. TOWN OF CALEDON COMPETITIVE ANALYSIS APPENDIX A: Site Selection Advisors Following are some of the top site selection advisors and advisory firms. These firms have been active in the GTA and both MEDT and GTMA have targeted them for investment attraction and familiarization tours. Deloitte & Touche Fantus Corporate Real Estate Wadley-Donovan-Gutshaw Philip Schneider A Wadley-Donovan Group Company Partner Dennis Donovan 180 North Stetson Director, Location Services 18th Floor 991 US Highway 22 West Chicago, Illinois 60601 Suite 202 Ph. 312-946-2734 Bridgewater, New Jersey 08807 Ph. 908-864-5580 Ernst & Young Charles Shorter McCallum Sweeney Consulting Principal, Real Estate Advisory Services Ed McCallum 5 Times Square Senior Principal New York, New York 10036 200 North Main Street Ph. 212-773-6093 Suite 303 Greenville, South Carolina 29601 KPMG Peat Marwick Ph. 864-672-1600 George Tobjy Senior Manager BDO Seidman, LLP 345 Park Avenue Thomas Stringer 40th Floor Manager, Business Incentives Services New York, New York 10154 330 Madison Avenue Ph. 212-872-5719 New York, New York 10017 Ph. 212-885-7435 IBM Business Consulting Services Gene DePrez Americas Practice Leader 400 Campus Drive Florham, New Jersey 07932 Ph. 973-726-4621 7-70 urbanMetrics inc. market, economic and strategic advisors
  • 75. TOWN OF CALEDON COMPETITIVE ANALYSIS APPENDIX B – North American Industrial Classification System Definitions (NAICS) Mining and Oil and Gas Extraction (NAICS 21) This sector comprises establishments primarily engaged in extracting naturally occurring minerals. These can be solids, such as coal and ores; liquids, such as crude petroleum; and gases, such as natural gas. The term mining is used in the broad sense to include quarrying, well operations, milling (for example, crushing, screening, washing, or flotation) and other preparation customarily done at the mine site, or as a part of mining activity. Establishments engaged in exploration for minerals, development of mineral properties and mining operations are included in this sector. Establishments performing similar activities, on a contract or fee basis, are also included. Manufacturing (NAICS 31-33) This sector comprises establishments primarily engaged in the physical or chemical transformation of materials or substances into new products. These products may be finished, in the sense that they are ready to be used or consumed, or semi-finished, in the sense of becoming a raw material for an establishment to use in further manufacturing. Related activities, such as the assembly of the component parts of manufactured goods; the blending of materials; and the finishing of manufactured products by dyeing, heat- treating, plating and similar operations are also treated as manufacturing activities. Manufacturing establishments are known by a variety of trade designations, such as plants, factories or mills. Manufacturing establishments may own the materials which they transform or they may transform materials owned by other establishments. Manufacturing may take place in factories or in workers' homes, using either machinery or hand tools. Wholesale Trade (NAICS 41) This sector comprises establishments primarily engaged in wholesaling merchandise and providing related logistics, marketing and support services. The wholesaling process is 7-71 urbanMetrics inc. market, economic and strategic advisors
  • 76. TOWN OF CALEDON COMPETITIVE ANALYSIS generally an intermediate step in the distribution of merchandise; many wholesalers are therefore organized to sell merchandise in large quantities to retailers, and business and institutional clients. However, some wholesalers, in particular those that supply non-consumer capital goods, sell merchandise in single units to final users. This sector recognizes two main types of wholesalers, that is, wholesale merchants and wholesale agents and brokers. Retail Trade (NAICS 44-45) The retail trade sector comprises establishments primarily engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. The retailing process is the final step in the distribution of merchandise; retailers are therefore organized to sell merchandise in small quantities to the general public. This sector comprises two main types of retailers, that is, store and non-store retailers. Information and Cultural Industries (NAICS 51) This sector comprises establishments primarily engaged in creating and disseminating (except by wholesale and retail methods) information and cultural products, such as written works, musical works or recorded performances, recorded dramatic performances, software and information databases, or providing the means to disseminate them. Establishments that provide access to equipment and expertise to process information are also included. The main components of this sector are the publishing industries (except exclusively on Internet), including software publishing, the motion picture and sound recording industries, the broadcasting industries (except exclusively on the Internet), the internet publishing and broadcasting industries, the telecommunications industries, the internet service providers, web search portals, data processing industries, and the other information services industries. Finance and Insurance (NAICS 52) This sector comprises establishments primarily engaged in financial transactions (that is, transactions involving the creation, liquidation, or change in ownership of financial assets) or in facilitating financial transactions. Included are: 7-72 urbanMetrics inc. market, economic and strategic advisors
  • 77. TOWN OF CALEDON COMPETITIVE ANALYSIS establishments that are primarily engaged in financial intermediation. They raise funds by taking deposits and/or issuing securities, and, in the process, incur liabilities, which they use to acquire financial assets by making loans and/or purchasing securities. Putting themselves at risk, they channel funds from lenders to borrowers and transform or repackage the funds with respect to maturity, scale and risk. establishments that are primarily engaged in the pooling of risk by underwriting annuities and insurance. They collect fees (insurance premiums or annuity considerations), build up reserves, invest those reserves and make contractual payments. Fees are based on the expected incidence of the insured risk and the expected return on investment. establishments that are primarily engaged in providing specialized services that facilitate or support financial intermediation, insurance and employee benefit programs. In addition, establishments charged with monetary control - the monetary authorities - are included in this sector. Real Estate and Rental Leasing (NAICS 53) This sector comprises establishments primarily engaged in renting, leasing or otherwise allowing the use of tangible or intangible assets. Establishments primarily engaged in managing real estate for others; selling, renting and/or buying of real estate for others; and appraising real estate, are also included. Professional, Scientific and Technical Services (NAICS 54) This sector comprises establishments primarily engaged in activities in which human capital is the major input. These establishments make available the knowledge and skills of their employees, often on an assignment basis. The main components of this sector are: legal services industries; accounting and related services industries; architectural, engineering and related services industries; 7-73 urbanMetrics inc. market, economic and strategic advisors
  • 78. TOWN OF CALEDON COMPETITIVE ANALYSIS surveying and mapping services industries; design services industries; management, scientific and technical consulting services industries; scientific research and development services industries; advertising services industries. The distinguishing feature of this sector is the fact that most of the industries grouped in it have production processes that are almost wholly dependent on worker skills. In most of these industries, equipment and materials are not of major importance. Thus, the establishments classified in this sector sell expertise. Management of Companies and Enterprises (NAICS 55) This sector comprises establishments primarily engaged in managing companies and enterprises and/or holding the securities or financial assets of companies and enterprises, for the purpose of owning a controlling interest in them and/or influencing their management decisions. They may undertake the function of management, or they may entrust the function of financial management to portfolio managers Educational Services (NAICS 61) This sector comprises establishments primarily engaged in providing instruction and training in a wide variety of subjects. This instruction and training is provided by specialized establishments, such as schools, colleges, universities and training centres. These establishments may be privately owned and operated, either for profit or not, or they may be publicly owned and operated. They may also offer food and accommodation services to their students. 7-74 urbanMetrics inc. market, economic and strategic advisors
  • 79. TOWN OF CALEDON COMPETITIVE ANALYSIS Health Care and Social Assistance (NAICS 62) This sector comprises establishments primarily engaged in providing health care by diagnosis and treatment, providing residential care for medical and social reasons, and providing social assistance, such as counselling, welfare, child protection, community housing and food services, vocational rehabilitation and child care, to those requiring such assistance. Accommodation and Food Services (NAICS 72) This sector comprises establishments primarily engaged in providing short-term lodging and complementary services to travellers, vacationers and others, in facilities such as hotels, motor hotels, resorts, motels, casino hotels, bed and breakfast accommodation, housekeeping cottages and cabins, recreational vehicle parks and campgrounds, hunting and fishing camps, and various types of recreational and adventure camps. This sector also comprises establishments primarily engaged in preparing meals, snacks and beverages, to customer order, for immediate consumption on and off the premises. Public Administration (NAICS 91) This sector comprises establishments primarily engaged in activities of a governmental nature, that is, the enactment and judicial interpretation of laws and their pursuant regulations, and the administration of programs based on them. Legislative activities, taxation, national defence, public order and safety, immigration services, foreign affairs and international assistance, and the administration of government programs are activities that are purely governmental in nature. 7-75 urbanMetrics inc. market, economic and strategic advisors