SD LIBRARY
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Prosperity Through The Mayors Task For
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,
Pres eri Through Manufacturing in the Alberta Capital Region
Prepared by:
The Mayor's Task Force on Manufacturing April 9, 1997
1775.3a .E37 nE368 1997
'
Table Of Contents
1.0
Executive Summary
2.0 Acknowledgments
1 2
2.1 Steering Committee Members
2
2.2 Significant Contributions
4
3.0 Introduction
6
3.1 Purpose of this Report
6
3.2 What is Manufacturing
6
3.3 Why is Manufacturing Important
7
4.0
Task Force Methodology
8
5.0
Task Force Findings
10
6.0
Task Force Conclusions
12
7.0
Recommendations — Act Regionally
13
8.0
Recommendations — Industry Leads
20
9.0
Recommendations — Place Priority on Resource Based Manufacturing
24
10.0 The Municipalities of the Alberta Capital Region
31
1.0 Executive Summary
The Alberta Capital Region comprises nineteen individual municipalities, has a population approaching 900,000 and is the largest urban centre between Toronto and Vancouver. Although The Alberta Capital Region is currently a strong manufacturing centre, (perhaps the largest manufacturing centre between Toronto and Vancouver), its long term potential as a dominant manufacturing centre is even more impressive.
The 17 recommendations contained
in The Alberta Capital Region to
3. Place Priority on Resource-
in this report are in response to a
market and promote the region as a
Based Manufacturing: Growth and
question that Mayor Bill Smith put
whole. (Seven recommendations
new jobs are most likely to occur in
to the Task Force in February 1996:
have been made by the Task Force to address this issue — as set out in Part 7 of this report.)
those resource based industries in
"What can be done to grow manufacturing industries and create manufacturing jobs in the Capital Region?" Conclusions reached by the Task Force in response to this questions are as follows:
2. Encourage Industry to Take a Leading Role in Creating the Environment for Growth: Manufacturing industries of the region, and companies that comprise those industries, must be more
1. Act Regionally: A region is the
effectively networked, organized and
most logical economic unit upon
coordinated to lead industry growth,
which to focus efforts for economic
capitalize on growth opportunities
prosperity. Efforts to stimulate the growth of manufacturing industries should be undertaken within a regional context. It is the conclusion of this Task Force that greater effort should be made by all municipalities
and address common regional issues that are critical to their livelihood.
(Five recommendations have been made by the Task Force to address this need — as set out in Part 8 of this report.)
which The Alberta Capital Region has a distinct advantage due to its proximity to low cost, readily available resources — agri-food production, secondary wood manufacturing, and manufacturing for primary industries. (Five
recommendations are made by the Task Force to address this issue — as set out in Part 9 of this report.)
2.0 Acknowledgments
I am extremely grateful for the enormous volunteer effort that has gone into this project. Hundreds of community minded business people, educators, manufacturers, economic development specialists, and elected officials from across the region gave freely of their time, energy, ideas and expertise to formulate the recommendations contained in this report. The thing these people had in common was their unwavering enthusiasm for the region and their steadfast belief that The Alberta Capital Region was a place of manufacturing opportunity. I extend my sincere thanks to the following people for the community service they have provided through their involvement in this project. Mayor Bill Smith
2.1 Members of the Task Force Steering Committee Bob Saari
Vice President, Alliance of Manufacturers & Exporters Canada (Co-Chair of the Task Force)
In Alphabetic Order
Jim Andrais
Special Projects Manager, Office of the Mayor
Terry Cavanagh
Councillor, City of Edmonton
Robert Coon
Business & Public Affairs Coordinator, Parkland County
Harry Davis
Chief Information Officer, Grant MacEwan Community College
Mave Dhariwal
Program Head, Mechanical Engineering Technology Program Northern Alberta Institute of Technology
Bruce Duncan
General Manager, Planning and Development Department City of Edmonton
Betty Englehart
Research Analyst, Planning, Analysis & Coordination Branch Industry Canada
Ray Gilroy
Dean, School of Mechanical & Manufacturing Technology Northern Alberta Institute of Technology 2
Vern Hartwell
Mayor, Strathcona County
Jim Henderson
Vice President Operations, Grant MacEwan Community College
Ken Hodgins
Mayor, City of Fort Saskatchewan
Perry Kinkaide
Partner-in-Charge, KPMG Consulting
Ron MacDonald
President, Technology Brokers Inc.
Duane MacP hail
Manager, Economic Development and Tourism Strathcona County
Craig Martin
Publisher, Edmonton Sun (Representing the Edmonton Chamber of Commerce)
Darryl Martin
Director, Industry Development Branch, Alberta Economic Development and Tourism
Russ McKeever
President, McKeever Management Services Ltd.
Marvin Mishio
Leduc Nisku Economic Development Authority
Michael Mooney
WM Developments
Jim Murray
Director, Industrial Liaison Office, University of Alberta
Lorne Oswald
President, Dacro Industries Ltd.
Reginald Pridham
President, Alberta College
Ross Sharp
Manager, Economic Development and Tourism, City of St. Albert
Stanley Souch
President, Northern Alberta Institute of Technology
Marilyn Stecyk
President, Kaleidoscope Consulting
Don Vernon
Manufacturing & Processing Technologies Branch Industry Canada
Wayne Wyman
Vice President, Developed Industries, Economic Development Edmonton
2.2 Significant Contributions Cal Bricker Stan Ball Chris Baker Vi Becker Steven Black Dave Budney Bruce Campbell Terry Church John Clarke Arnold de Leeuw Wendy Doughty Aubrey Ellis Jerome Ell Glenn Fields Alan Fleury Daryl Friesen George Fricke Jerry Flagg Doug Gerrard Keith Gylander Pat Harding Marcy Hett Rick Hersack Frank Hovey Trevor Hamans Don Hamilton John Herrington Larry Hunter Mike Hollinshead Danny Islam Paul Johnson Gary Keen Kevin Kelly Keith Kalbfleisch Brent Komamicki Rick LeLacheur Wendy Lamb Don Larke Jim Lepp Chris Lumb Dan Madoche
Labatt Breweries of Canada Thermo Design Engineering Ltd. RPC Manufacturing Inc. Economic Development Edmonton Aquatex Corporation University of Alberta The Dominion Company Alberta Agriculture, Food and Rural Development Syncrude Canada Ltd. Alberta Food Processors Association Grant McEwan Community College Celanese Canada Inc. Northern Alberta Institute of Technology Industry Canada Sunland Foods Flexxaire Manufacturing Inc. Silver Springs Group Engine Rebuilders Ltd. Alberta Economic Development and Tourism TR Labs Harding Instruments Ltd. Edmonton Garment Industry Economic Development Edmonton InvenIxonics Limited TELUS Laidlaw Waste Systems Altyp Welding & Fabricating Ltd. Larry Hunter Business Solutions Inc. Facing the Future Student (Manufacturing Directory) Inland Cement Metal Fabricators and Welding Ltd. Quality Fast Foods Northern Alberta Processing Co. Capital Packers Ltd. Economic Development Edmonton Western Economic Diversification Urban Development Institute AltaSteel Alberta Microelectronics Centre Peacock Engineering
4
Bill MacMillan John Martin Cindy Message Barry Meh Chris Micetich Bob Moore Eric McGhan Paul Montandon Jim Morrison Dr. Wolfgang Muhs Doug Noble Lou Normand Robert Normand Coim O'Carroll Brian Parteno Frances Picherack Ken Pilip Ron Popek Shane Pospisil Al Rawlins Gil Sandhu Bruce Saville Harvey Sheydwasser Tom Schmidt Dean Rodney Schneck Lori Schmidt Don Schultz Chris Sheard Rod Simpson Jack Slobodan Earle Snider Henry Spencer Roy Sterling Gordon Stewart Sandy Sutton Scott Tanaka Jim Valiance Wil VandenBom Chris Vilcsak William Waite Mel Wong Julius Yankowsky
Equus Consulting Group Economic Development Edmonton Hewlett Packard! IDACOM Alberta Agriculture, Food and Rural Development Symphar Laboratories Dreco Energy Services Strathcona County Lloyd Sadd & Anthony Insurance Ltd. Daishowa Raylo Chemicals Noble and Associates Ltd Processing Industry Division, Alberta Agriculture Bank of Montreal Epsilon Chemicals Manufacturing Gainers F. Picherack & Associates Ceapro Developments Inc. Alberta Agriculture, Food and Rural Development Alberta Economic Development and Tourism Student (Manufacturing Directory) Bettis Canada Ltd Saville Systems Canada Ltd. Logican Technologies Inc. Labatt Alberta Brewery University of Alberta Alberta Economic Development and Tourism Canadian Imperial Bank of Commerce Northwestern Utilities Limited KPMG Consulting Weldco Beales Manufacturing University of Alberta Spencer-Lemaire Industries Alberta Honey Producers Town of Beaumont Industrial Polymer Centre Economic Development Edmonton Weyerhauser Canada Ltd. Dow Chemical Canada Inc. EPCOR Former President and CEO of Siemens Electric Limited Alberta Economic Development and Tourism M.L.A., Edmonton Beverly Belmont Constituency
3.0 Introduction
3.1 Purpose of this Report In February 1996 Mayor Bill Smith met with a group of business people, educators, manufacturers, and economic development specialists to explore ways of growing manufacturing industries. The specific question he put to the group was:
"What can be done to grow manufacturing industries and create manufacturing jobs in the Capital Region?" The immediate response to this question was: "There are no easy,
obvious, off-the-shelf answers." While the group advised Mayor Smith that it would be necessary to study, analyze and discuss the issue more fully before offering such advice, they quickly concluded that it was a worthwhile project — one they would be prepared to lead. On this basis, the project commenced in late February 1996 under the title: The Mayor's Task Force on Manufacturing.
with its findings and conclusions.
• clothing
However, the most important aspect
• wood products • furniture and fixtures
of the report is the answers it provides to the question raised by Mayor Smith in February 1996. Answers are in the form of seventeen
• paper and allied products • printing, publishing and allied industries
recommendations for growing
• primary metal industries
manufacturing industries and
• fabricated metal products
creating manufacturing jobs in The Alberta Capital Region (see Parts 7,
• machinery
8, and 9 of this report). 3.2 What is Manufacturing Canada's Standard Industrial
• transportation equipment • electrical and electronic products • non-metallic mineral products • refined petroleum and coal products
Classification System distinguishes
• chemical and allied products
manufacturing from other types of industrial activities on the basis of
• other manufactured products
products and services. It identifies 22 different sectors of manufacturing and specifies a long list of product types and commodities within each sector. Manufacturing Industries defined by the system include: • food products • beverages • tobacco products • rubber products • plastic products • leather products
The following report briefly details
• primary textiles
the work of the Task Force along
• textile products
Additionally, Statistics Canada, NAFTA, Revenue Canada, various Provincial Governments, and the Alliance of Manufacturers & Exporters Canada have each adopted a different definition of
manufacturing to fit their own perceptions and circumstances. But common to all definitions is the recognition that manufacturing is a "value-adding process involving the transformation of goods and their physical properties".
3.3 Why is Manufacturing Important In 1995 Alberta's Gross Domestic
of the GDP. Alberta's manufacturing shipments have increased 50% in the past six years.
earnings in other sectors. As impressive as these statistics are, they still tend to understate the
Product totaled $77.8 billion.
In 1996, manufacturing industries
importance of the manufacturing
Approximately $29 billion of this
directly employed 126,000 Albertans
industry. In particular, they do not
total was generated by industries
— accounting for almost 10% of
reflect the stimulating effect that
that produce goods, with the
Alberta's labour force and over 30%
manufacturing industries have on a
remainder coming from service
of new jobs in the two years.
wide range of service industries. In
producing industries. Of this $29
Manufacturing jobs provided
their absence, the activity levels of
billion, manufacturing contributed
Albertans average weekly earnings
service industries would seriously
approximately $8 billion, over 10%
that were substantially higher than
decline.
4.0 Task Force Methodology
The Task Force facilitated a number of learning exercises in order to understand what might be done to grow manufacturing industries and create manufacturing jobs in The Alberta Capital Region. The exercises that yielded the greatest insight, and upon which many Task Force recommendations are based, include the following:
1. Workshops to Understand the Needs of Existing Manufacturers:
2. Studies to Understand how Manufacturing Costs in this Region Compare to Other Regions:
On May 8, 1996, the Task Force and
2. a report prepared by KPMG for Alberta Economic Development and Tourism entitled Alberta Offers Manufacturers a Competitive Advantage (March 1994),
the Northern Alberta Institute of
The Task Force retained KPMG to
Technology (NAIT) hosted a full-day
expand a 1995 study that compared
work shop to explore the concerns of
business costs in Canada and the
and Tourism publication entitled
local manufacturers. Areas of
United States. In all, eight Canadian
Facts on Alberta (March 1996),
concern raised by local
and seven US cities were included in
4. a report prepared by the Canadian
manufacturers included: • business environment,
the study. The study examined the
Manufacturers Association entitled
impact of location on key location-
Manufacturing Our Future (1995),
• taxes and utility costs,
sensitive capital and operating costs
• human resource development
for seven industries.
(education and training), • excessive government regulations, • marketing and promotion of the region, • access to suppliers and markets, • transportation issues, and • communications with the City.
3. an Alberta Economic Development
5. a report prepared by KPMG for Alberta Economic Development and Tourism entitled Alberta
As well, the Task Force studied a
Opportunities For Frozen Food
number of other recent reports that
Processors (February 1993), and
provided similar comparisons: 1. a report prepared by Coopers &
6. a report prepared by Toma & Bouma Management Consultants
Lybrand Consulting for Alberta
entitled Changing Course! The
Economic Development and Tourism entitled Manufacturing
Value-Added Agri-Food & Fibre Strategy.
In Alberta (September 1996),
8
3. Surveys to Understand the Perceptions of Investors: Many Task Force participants brought a common perception to this
4. Workshops to Understand Which Manufacturing Industries in the Region Represent the Greatest Opportunity for Growth:
On September 15, 1996, Mayor
project: "That The Alberta Capital Region's advantage as a manufacturing centre was a well kept secret. If we could do only one thing to stimulate growth and create jobs in The Alberta Capital Region's manufacturing industries, the greatest impact would be realized by getting the real story out about its advantages." Given the significant implications of this assumption, a Task Force sub-group conducted a limited survey of investors to address three burning questions: 1. What positive and negative perceptions do investors have about the region as a place to locate and/or expand their manufacturing operations? 2. How significant are these perceptions in influencing investment decisions? 3. How well informed are potential investors about the region's opportunities and advantages as a manufacturing centre?
5. Face-to-Face Meetings with all Municipalities in the Region to Discuss Ways of Growing Manufacturing Industries:
On June 15, 1996 the Task Force
Smith addressed one-hundred
facilitated a full day work shop to
representatives from industry and
explore the trends and the
surrounding municipalities. He
opportunities associated with
explained the purpose of the Task
existing and emerging industries.
Force and presented its ideas. Also
Fifteen senior representatives from
discussed were ways in which the
industry attended this session. The
municipalities of the region might
results of this workshop served as
work together in advancing the
input for a second, larger workshop
growth of manufacturing industries.
that was held on June 27, 1996. The
This discussion continued
seventy sector representatives who
throughout September and October,
attended that workshop were asked
during which time Task Force
to validate the opportunities defined
representatives met face-to-face with
by the first workshop, set targets for
groups from individual
these opportunities, and sketch out
municipalities.
action plans for their achievement.
5.0 Task Force Findings
Based on the work performed, the
contribute most to this advantage
the world. In other words, we
Task Force made the following key
in manufacturing were:
found that Capital Region
findings:
Manufacturers' Needs
1. raw materials and other inputs, 2. transportation fuels, natural gas and electricity costs,
• We found that manufacturers who had expanded to the region from elsewhere were generally very positive about the region as a place to do business. Smaller, home-grown companies that lacked this frame of reference, were more negative in their assessment. • We found that small and medium sized manufacturers in this region were not well networked with one another. This lack of coordination hampered their ability to address
3. cost-effective transportation which includes low back-haul rates, 4. skilled, productive labour, 5. specialized research capability, and 6. reasonably competitive tax rates.
Investor Perceptions • We found that most potential investors from outside of the region were not familiar with the
residents had a significant role in influencing manufacturing investments in this region.
Growth Industries • We found that most respondents were of the opinion that the Capital Region should focus its immediate efforts on the growth of three main industries: 1. agri-food processing, 2. secondary wood manufacturing, and 3. manufacturing for Alberta's
Capital Region — its strengths,
forestry companies, oil sand
advantages or opportunities.
companies, and large
• We found that in most cases, the
petrochemical companies.
Inter-Municipal Coordination in Growing Manufacturing Industries
common regional issues. In its
decision to expand or initiate
absence, many regional problems
manufacturing operations in the
affecting manufacturers were not
Capital Region was strongly
being addressed. As well, potential
influenced by residents of this
opportunities through partnership,
region. Even though the actual
were supportive of enhanced
sharing and synergy were lost.
investment decisions were made
regional efforts to promote
by directors living outside of this
manufacturing in Alberta's
region, it was often the staff of a
Capital Region.
Manufacturing Costs • We found that manufacturing
• We found that municipalities
satellite operation in the • We found that municipalities believed there was merit to
industries in Alberta were
Edmonton area who identified the
achieving a very competitive
opportunity for expansion,
position through a favourable
developed the business case, and
marketing and promoting
commercial environment and low
submitted the recommendation to
business costs. The factors that
senior officials in another part of
Alberta's Capital Region as a single entity. 10
• We found there was a sense of
and used inefficiently. There was
trust between the mayors and
a strong sense that governments
reeves of the region ... with
and economic development
Edmonton being seen as a
agencies needed to do a better
partner, not a threat.
job to coordinate efforts in the
• We found that some elected
officials and administrators were
area of economic development. • We found that the Task Force
frustrated by what they perceived
was not the first group to suggest
as too many uncoordinated
a need for greater coordination in
efforts, groups, organizations,
the area of regional economic
teams, forums, task forces — all
development. A major study,
trying to promote economic
commissioned by the Metro
growth in this region. There was
Edmonton Economic
a feeling that the limited time,
Development Team (MEEDT) in
resources and efforts of the region were being fragmented
1992, and conducted by Price Waterhouse (Management
Consultants) stated as its major assumption that: "there are clear
advantages and benefits for the 835,000 people living and working in metropolitan Edmonton, for the metropolitan region to be marketed and promoted as one strong economic unit." The Price Waterhouse report went on to recommend many initiatives to enhance the economic development process in the metropolitan region — recommendations that are consistent with those contained in this report.
6.0 Task Force Conclusions
The Task Force formulated three conclusions about what could be done to grow manufacturing industries and create manufacturing jobs in the Capital Region. Detailed recommendations relating to these conclusions (and their rationale) are contained in Parts 7, 8, and 9 of this report.
Conclusion #1
Conclusion #2
Conclusion #3
Act Regionally:
Encourage Industry to Take a
Place Priority on Resource-Based
The region is the most logical
Leading Role in Creating the
Manufacturing:
economic unit upon which to focus
Environment for Growth:
Growth and new jobs are most likely
efforts for economic prosperity.
Manufacturing industries of the
to occur in those resource based
Efforts to stimulate the growth of
region, and companies that comprise
industries in which The Alberta
manufacturing industries should be
those industries, must be more
Capital Region has a distinct
undertaken within a regional
effectively networked, organized and
advantage due to its proximity to
context. It is the conclusion of this
coordinated to lead industry growth,
low cost, readily available resources
Task Force that greater effort should
capitalize on growth opportunities,
— agri-food production, secondary
be made by all municipalities in The
and address common regional issues
wood manufacturing, and
Alberta Capital Region to market
that are critical to their livelihood.
manufacturing for energy industries.
and promote the region as a whole.
(See Part 8 for related
(See Part 9 for related
(See Part 7 for related
recommendations.)
recommendations.)
recommendations.)
12
7.0 Recommendations — Act Regionally
7.1 Recommendation
Recommendation 1:
That the mayors, reeves and councillors of The Alberta Capital Region agree to work in partnership to market and promote this region as a whole.
First, the perceived value of
Despite these advantages, a regional
individual municipalities is enhanced in the minds of investors if
mindset (to market and promote The Alberta Capital Region as a
viewed as part of a large, integrated,
whole) will not happen by itself.
diverse region, as opposed to being a
Strong leadership and clear
stand-alone entity.
direction from senior elected officials
Second, investors perceive greater
are necessary to make it happen.
certainty in regions where member
As a first step, the Task Force
believes that a resolution to this
The Alberta Capital Region comprises
municipalities share a common economic purpose and direction.
nineteen individual municipalities,
Ones that are divided,
passed by each municipal council of
has a population approaching
uncoordinated and internally
the region. It would then be
900,000 and is the largest urban
competitive are viewed suspiciously
communicated to the economic
centre between Toronto and
and less favourably by investors.
development practitioners who work
Rationale ...
Vancouver.
Third, individual municipalities are
It is the firm opinion of the Mayor's
apt to receive a greater return for
Task Force on Manufacturing that
their economic development
the advantages of marketing and
investment when they work together
promoting these nineteen
to market and promote the region as
municipalities as one integrated
a whole. Pooling resources toward
economic unit are significant.
common projects serves to minimize duplication of effort. Larger pools of
A key reason for marketing the
funding and resources also facilitate
region as a whole is because:
larger, more ambitious, and more
The draw of the region is greater than
sustainable marketing projects. The
the draw of any single municipality or
result is a greater marketing impact.
the sum of all municipalities.
affect should be endorsed and
on their behalf.
7.2 Recommendation
Recommendation 2: That the metropolitan area
metropolitan area be referred to as
search engines were designed to
"The Alberta Capital Region" when
scan the first twenty-five words of a
marketing and promoting the region.
document. The inclusion of the word Edmonton in one of the first twenty-
surrounding and including
Reference to Alberta has strong
Edmonton be marketed and
market appeal and recognition.
promoted under the name:
Similarly, reference to the Capital of
The Alberta Capital Region.
Alberta, conveys the region's
While it was felt that titles like:
prominence within Alberta. Overall,
"Metropolitan Edmonton" or "The
the Task Force believes that the title
Edmonton Capital Region" would
provide a clearer reference to the
recognize the nineteen
demonstrates a strong regional identity, and benefits from Alberta's
municipalities of this metropolitan
very favorable national and
to Edmonton was thought to detract
area for what they are — a strong,
international reputation.
from the regional focus. As well,
Rationale ... It is important for the world to
integrated and unified economic entity. A first and necessary step in communicating this reality is the
Several Task Force members raised a concern that this name might create
adoption of a name.
difficulty for persons wanting to find information about Metro-Edmonton
The Task Force recommends that the
on the Internet. However, the Task
nineteen municipalities of this
Force was advised that most Internet
five words would alleviate this problem.
location of the region, the reference
many of the Task Force members felt that the word "Metropolitan" conveyed a negative connotation — a dated term often associated with large, sprawling American and Eastern Canadian cities.
14
7.3 Recommendation
Recommendation 3: That the Mayor's Task Force facilitate a regional marketing project — with a project team comprising those economic development agencies, companies, industry associations and education institutions that wish to participate.
Task Force participants
Task Force participants also stressed
recommended, as a first step toward
the need for private industry to be
this goal, that the region's economic
included in the planning and
development agencies should find
execution of this and future regional
more effective ways to coordinate
marketing projects. While private
their marketing programs. However,
industry might bring a range of
participants felt it would be
resources to a marketing project, its
premature at this time to prescribe
greatest contribution would be in
the full details of such a program.
adding credibility to the marketing
Instead, it was concluded that initial Rationale ...
marketing efforts should be focused
A concern raised frequently by Task
on a single pilot project. By working
Force participants was:
together on such a project, it was thought that economic development
"The advantages and opportunities of the Capital Region are a well kept
agencies would be in a better
secret. More investment would flow to
term regional marketing process
the region if it were marketed more
could be designed to achieve
effectively."
maximum impact.
position to understand how a long
message. According to an investor survey conducted by the Task Force, investors are far more receptive to testimonials from local industry than to the promotional efforts of bureaucrats and governments.
7.4 Recommendation
Recommendation 4: That the first project to market the region be coordinated by Economic
manager must be assigned to guide
The goal of the project that was
the planning, implementation and
selected is to market The Alberta
post implementation phases of the
Capital Region and to identify
project.
industries in a target region outside
Development Edmonton (EDE), with
Although this function could be
a goal to fully involve all interested
assigned to a number of the project
parties — both as active participants
stakeholders, the Task Force
and as financial supporters.
believed that EDE was best able to
Rationale ...
lead this particular project. Not only
of Alberta — ones that are looking for expansion opportunities and would likely improve their competitive advantage by operating in this region.
In order to•maximize the probability
is EDE the largest and best funded of the region's economic
As project coordinator, EDE's main responsibility will be to engage all
of project success, there must be
development agencies, it is also a
public and private stakeholders who
adherence to project management
strong proponent of the proposed
are interested in participating and
principles. Most critical, a project
marketing project.
contributing to the project.
18
7.5 Recommendation
Recommendation 5: That upon completion of the project, the Mayor's Task Force on
will facilitate this workshop as its
regional approach they have adopted to market and promote
final activity. As part of the workshop, participants would:
The Alberta Capital Region.
1. evaluate the strengths and
Manufacturing facilitate a workshop involving the marketing project participants and other stakeholders to: (a) assess what was learned from the project, (b) explore an ongoing regional approach for marketing and promoting The Alberta Capital Region, and (c) bring together a
regional marketing group to carry out this approach.
Rationale ... The success of the first marketing project is significant in its own right. However, greater importance lies in
weaknesses of the process that was used to carry out the first project, and 2. discuss possible organizations, processes, and/or approaches for
what participants from across the
carrying out regional marketing
region will learn from working
activities on an ongoing basis.
together on this project. The marketing project is simply a first step in understanding how the
Recommendation 6:
various regional stakeholders should
That representatives from Metro
organize themselves to carry out
Edmonton Economic Development
these types of activities in the future.
Team report to the mayors and
The Task Force Steering Committee
reeves of The Alberta Capital Region by September 15, 1997 outlining the
7.6 Recommendation
Recommendation 7: That the regional marketing group consider inclusion of the following elements in the regional marketing approach: (see bullets). Rationale ...
• Ensure Accountability of the
Capital Region Manufacturers'
Marketing Group:
Association, Alberta Food
The eventual marketing approach
Processing Association, Forestry
should be designed to ensure
Industry Supply Association,
accountability. Two key elements
Oil/Gas sector representation, etc.
of this accountability framework would include: 1. a statement of program expectations as set out by the
The regional marketing group and
municipalities of the region, and
regional marketing approach that
2. mechanisms to track and report
• Market The Alberta Capital Region as a Single Entity: (As per Recommendation 1) • Grow Existing
will emerge — in accordance with
performance against these
Recommendation 5 — could take a
Manufacturing Firms: The eventual marketing approach
expectations.
should recognize that the greatest
variety of forms. Decisions on this matter will not be forthcoming until
• Partner With Major
mid 1997. However, the Task Force
Stakeholders:
has put forward the following
The eventual marketing group
suggestions regarding this eventual
should seek active participation
form, to be considered at an
from a wide range of potential
appropriate future date.
partners: e.g., the various municipal economic development
• Ensure Sufficient Resources:
agencies from within the region,
potential for economic growth will come from the growth of existing industries. Therefore, marketing/ promoting projects should be designed to attract investment that will complement existing firms and build critical mass. • Market the Capital Region
In developing the eventual
Leduc/Nisku Economic
regional marketing approach, careful attention should be given
More Effectively to Investors:
Development Authority, Alberta
The eventual marketing approach
Economic Development &
to the level of
should recognize that most
Tourism — Industry
marketing/promoting effort that is
potential investors from outside of
Development Branch, University
required, the approximate cost of
the region are not well informed
of Alberta, NAIT, Grant
this effort, and possible sources
about the advantages of The
MacEwan College, Edmonton
of funding. In other words, success of a long term regional
Alberta Capital Region. Priority
Regional Airports Authority,
should be placed on taking a
Edmonton Real Estate Board —
marketing approach will require a
strong message to potential
Industrial/Commercial Division,
firm commitment of resources
investors about the strengths and
TELUS, Northwestern Utilities,
from identified sources.
opportunities of the region.
Trans Alta, EPCOR, Alberta 18
business and social ties with
The eventual marketing approach
their places of origin. The
should recognize that the Capital
eventual marketing approach should be designed to use these
Region's fate as a manufacturing centre is being strongly
ties to build inroads to other
influenced by persons from this
systems to identify manufacturing
regions and to market and
region. Therefore, in order for the •
companies that would benefit by
promote the Capital Region.
region's manufacturing industry
• Develop Effective Marketing and Promotion Processes: The eventual marketing approach should ensure: 1. the establishment of effective
locating in the region, 2. the establishment of effective systems for approaching prospective investors and demonstrating the advantages of the Capital Region as a whole, 3. the establishment of processes for compiling competitive proposals to attract companies to the Capital Region, and 4. the establishment of a full service — one that assists prospective investors in all phases of their evaluation and establishment. A benchmarking exercise, examining the outreach practices of other successful jurisdictions would be a starting point for this exercise. • Draw on Multi-Cultural
• Inform Residents About the Region's Advantages and Opportunities: A study conducted by the Task Force determined that decisions to establish or expand large
to identify regional opportunities and either capitalize on these opportunities or convince others to do the same. • Elevate the Profile
manufacturing companies were
of Business Leaders:
typically made outside of Edmonton — usually by
The eventual marketing approach should strive to put a human face
company officials who lived in
on business in the region as well
southern Ontario, and to a lesser
as elevate the status of business
extent in eastern United States.
leaders who live and work here.
However, in most of these
The high visibility of credible,
situations, the decision to expand
successful, community minded
or locate in Edmonton was
business leaders is a first step in
strongly influenced by persons
helping the region to see itself as
living in the Capital Region!
a leading business/manufacturing
Often it was the staff of a satellite
region. T
operation in the Capital Region
be p
who identified the opportunity for
Capability of the Region: The people who live in The
expansion, developed the business case, and submitted the
Alberta Capital Region originate
recommendation to senior
from all parts of the world. Many
officials in the East.
continue to maintain strong
to grow, residents must continue
8.0 Recommendations — Industry Leads
8.1 Recommendation Recommendation 8: That the formation of a regional association of manufacturers be pursued that will work collectively to address issues and opportunities effecting their growth and livelihood. Rationale ...
The Task Force concluded that the
regional manufacturers. This
region's manufacturers are not as
meeting, followed by several months
well coordinated as they need to be
of organizational work by the
in this regard. At first glance, this
manufacturers, led to the formation
conclusion might be puzzling given
of The Alberta Capital Region
the many industry associations that
Manufacturers' Association
exist. However, the shortcoming of
(registered under the Societies Act of
these associations (from a regional
Alberta in December 1996).
perspective) is their emphasis on provincial and national mandates —
The Task Force concluded that the
mandates with broad and general
region's manufacturers must provide
focuses that prevented them from
the thrust of leadership that is
keying in on unique issues of
needed to grow manufacturing
regional significance. In fact, any
industries in The Alberta Capital Region. While government and
effort by provincial or national associations to render advantages to
economic development agencies must continue to play significant
this region would be viewed
supporting roles, nothing of real
regions.
negatively by members in other
consequence is likely to occur until
Quite simply, the purpose of The Alberta Capital Region Manufacturers' Association is: to foster and promote the welfare, growth and development of the manufacturing industry in the Alberta Capital Region. Establishment of the Association was founded on a belief that manufacturers in the Capital Region would profit from an association that focused strictly on
manufacturers are coordinated and
Implementation of the
their specific regional needs and
networked in a manner that
Recommendation ...
priorities.
In August 1996, Mayor Smith invited
The Association has set a target of
a group of manufacturers (who had
attracting 300 member companies by
participated in the work of the Task
the end of 1997, with 60 members
Force) to meet with him to explore
currently in place.
empowers them to address common problems and converge on common opportunities within the Capital Region.
the formation of an association of
20
8.2 Recommendation
edge five years ago are obsolete
institutions in addressing their
today.
human resource needs and
Recommendation 9: That The Alberta Capital Region
This challenge is further complicated
Manufacturers' Association establish
by the shortage of skilled labour in
a standing committee to advise both
Canada. Approximately 5% of
Although pleased with the services
public and private education
manufacturing firms regularly report
and the quality of graduates from
providers of their education, training
difficulty in finding skilled labour.
these institutions, Task Force
and workforce needs.
Manufacturers also report less than
participants stressed that even
Recommendation 10:
satisfactory skill levels among first time employees. According to studies
greater partnering was possible between industry and education in
conducted by the Alliance of
developing effective education and
Manufacturers & Exporters Canada,
training programs. In particular,
That The Alberta Capital Region Manufacturers' Association provide personal development services to its
preserving their competitive advantages.
a full 55% of manufacturers find that
many felt that local industry should
the performance of recent high
take a greater lead in communicating
school graduates hired by their firms is poor or only fair in meeting
its education/training needs to learning institutions — rather than
Rationale ...
elementary job requirements.
placing the burden largely on
People have always been, and will
Throughout this project, Task Force
continue to be, the most valuable
participants stressed that well
asset of a successful business. But in
designed education and training
Recommendation 9 is intended to do
today's technologically complex
programs, available locally, were a
just that. Through its Standing
workplace where skills and
Committee on Education, The
knowledge quickly become obsolete
key ingredient for growing manufacturing industries. As well,
— businesses and workers are under
Task Force participants considered
Manufacturers' Association would
immense pressure to maintain and
the region's learning/training
actively monitor the education and
enhance their skill sets. Not only do
institutions to be one of its foremost
training needs of regional
workers require more skills than ever
strengths — University of Alberta,
manufacturers and then work closely
before, the pressure for new skills and knowledge is unending.
N.A.I.T, Grant MacEwan Community College, Alberta College,
with education/learning institutions
Constant innovation and
Athabasca University, Concordia
complementary programs.
technological change mean skills
University College of Alberta, etc. All
and knowledge that were cutting
recognized the importance of these
members in the form of learning sessions, workshops and conferences.
learning institutions to be the leader in seeking out this information.
Alberta Capital Region
to ensure timely development of
21
8.3 Recommendation
Recommendation 11: That The Alberta Capital Region Manufacturers' Association lead efforts to link The Alberta Capital Region's manufacturing industries to
innovation centres — as a means of strengthening the competitive advantage of regional manufacturing firms. Rationale ...
While it is the responsibility of
of the region. In particular, it was felt
individual companies to manage
that the region's manufacturers
internal company programs to
should take steps to:
facilitate innovation, this is
a. understand the types of research
sometimes easier said than done. Small and medium sized companies
b. understand how the resulting
often lack in-depth technical,
innovations could be applied to
management and financial
their operations, and
resources. Clearly this is a serious obstacle for growing manufacturing industries in a region like ours where the majority of manufacturing companies are small and medium-
The term innovation applies to both:
that are being conducted,
sized.
a. new/innovative customer
c. influence the types of research that are conducted. Recommendation 11 is intended as a first step in forging stronger communication and working relations between manufacturers and
The Task Force is of the opinion that
innovation centres. The thinking
this obstacle can be overcome in
behind the recommendation is that
processes that provide a cost/strategic advantage to the
part by forging stronger working
manufacturers should be the drivers
relationships between the region's
of innovation, with
manufacturer.
manufacturers and its innovation
research/innovation institutions
products, and b. new/innovative manufacturing
centres. According to Task Force
responding to that direction and
In today's hyper-competitive global
participants, the region's
those needs.
economy, continuous innovation is a
manufacturers have not benefited to
given. In its absence, industries and
the full extent from the impressive
individual companies can neither
range of academic, government, and
compete nor survive.
publicly financed research programs
22
8.4 Recommendation
Recommendation 12: That The Alberta Capital Region Manufacturers' Association, in conjunction with the region's economic development agencies: a. assess constraints faced by local firms in obtaining financing, and b. help develop strategies to ensure financing is both available and adequate.
According to many published studies
intended to lay a foundation for
and testimony from Task Force
examining this matter in the depth it
participants, it is not easy for small and medium-sized manufacturing
requires.
businesses to finance their required innovations. Difficulties often stem from traditional approaches in which hard collateral is required to secure loans, i.e., asset-based financing. Although this approach is prevalent, it has become less relevant to modern industrial needs given the
The thinking behind the recommendation is that manufacturers should lead initiatives upon which their future lies. As in the case of previously recommended initiatives, this undertaking would not be feasible for most small and medium size manufacturing firms. However, the Capital Region
Rationale ...
increased emphasis on soft assets.
Equally important to a business's
Difficulties also relate to the cost,
in conjunction with the region's
need for innovation is its ability to
economic development agencies, is
finance that innovation. Innovations
quality and availability of financial services themselves. Manufacturing
well positioned to assess constraints
in the form of new manufacturing
companies in Alberta have fewer
faced by local firms in obtaining
processes, new product development
financing sources and less financing
financing, and develop strategies to
programs, new operating systems,
variety than their counterparts in
ensure adequate financing is
and efforts to expand markets — all
Toronto, Montreal and Vancouver.
available.
cost money. All the innovative
thinking in the world will not grow a manufacturing company unless there is a cost effective way to finance innovation.
These issues are complex. Whatever solutions might surface in the future are not readily apparent today. However, Recommendation 12 is
Manufacturers' Association, working
9.0
Recommendations — Place Priority on Resource Based Manufacturing
9.1 Recommendation
Recommendation 13:
That the primary economic
total manufacturing shipments. The
where there is a growing concern
value-added component of this $6
about food safety, health and the
billion figure, was approximately
environment.
$1.4 billion.
development focus of the region be placed on those resource-based
Task Force participants concluded
The Province of Alberta shares these assumptions and advised that a $20
manufacturing companies/industries
that growth in this industry would
billion value-added agri-food
that currently have the greatest
continue to be strong.
industry was possible by the year
immediate growth potential: a. agri-foods processing, b. secondary wood manufacturing, and c. various types of manufacturing for Alberta's primary industries. Additionally, emphasis should be placed on science-based
The Task Force's conclusion was based on assumptions that: 1. demand for agri-food products will increase as the world's population increases from 5 billion to 7 billion by the year 2010, 2. the agri-food industry is already
companies/industries (like
experiencing a strong trend away
microelectronics and bio-technology)
from the trade of bulk goods
that gain their advantage from the
toward higher value-added
above noted resource-based
consumer ready products,
industries, and can draw on the
3. the demand for agri-food
strengths of our strong education
products in Asian Pacific Rim
and research infrastructure.
countries will increase over the
Rationale ... In 1995 the food and beverage
next decade as personal income increases, 4. Canadian agri-food exports to
2005. This prediction is contingent upon Alberta's agri-food companies being able to outperform the competitors, availability of capital, successful recognition of market opportunities, and availability of management skills. Why Secondary Wood Manufacturing? Alberta's wood products industry is divided into two sectors — primary manufacturing and secondary manufacturing. The primary wood products industry is focused on producing and marketing conventional North American lumber. The majority of this lumber is kiln dried dimension lumber, the
industry (agri-food) employed
United States will continue to
17,000 Albertans and was the
increase in line with the average
province's largest manufacturing
annual rate of 15% that has occurred since 1988, and
Secondary wood manufacturers
5. Canadian produce will have an
cover a wide range of business
advantage in world markets
interests including engineered
sector. Agri-food shipments totaled $6 billion in that year and accounted for approximately 25% of Alberta's
type used in framing and residential construction in North America.
24
trusses and floor systems, furniture,
due to the relatively low cost of
windows, doors, building
Canadian labour (compared to
components, millwork, laminated beams, arches, trusses, I-beams etc. In 1995, Alberta's wood industries employed over 7,600 Albertans and accounted for almost $1.6 billion in
Japan), and c. primary and secondary wood companies in north west United States will seek to relocate, possibly to Alberta, as their supply of timber declines.
manufacturing shipments — nearly half of which was value added. Between 1988 and 1995, industry growth averaged more than 15% a year.
Why Manufacture for Alberta's Primary Industries? Task Force participants concluded that northern Alberta resource
Example — Manufacturing for Oil Sands Producers Alberta's oil sands have been an engine for growth in Alberta over the past three decades. Massive construction activities when the plants were built resulted in a surge of economic activity in the Capital Region, Alberta, and Canada. The ongoing operation of the plants and their development have provided a continuing opportunity for economic activity and manufacturing
Task Force participants concluded
industries (primarily oil sands and
that growth in this industry would
forestry) provide an opportunity for
continue to be strong. This opinion
The Alberta Capital Region to
was based on assumptions that:
develop a manufacturing capability
Over the past twenty years, the oil
a. United States will continue to
based on a captive and continuing
sands industry has grown to the
place restrictions on the amount
demand for manufactured goods.
point, where in 1994, upgraded light
of softwood lumber that can be
This manufacturing base, built on
oil (sometimes called synthetic crude)
imported from Canada to that
the needs of the resource industries,
from the oil sands represented 14% of
country, and this constraint will
would provide a secure springboard
Canada's total petroleum supply. This
require Alberta's primary
for developing a supply capability
upgraded oil is now being produced
producers to find new ways of
for other parts of Canada and for
at a cost that is competitive with new
adding value in order to maintain
export.
conventional cru
a presence in that market (e.g., exporting trusses instead of lumber), b. the significant market opportunities for secondary wood products that exist in Asian countries will continue to grow
While the following example pertains to oil sands, the conclusions are equally applicable to the other resource industries.
development in The Alberta Capital Region.
Sands T under ind th
The existing surface and the situ oil
identifying additional products that
much of this activity is little more
sands operations already support
can be manufactured in this region
than a flow through. In the case of
and are supported by a sophisticated
and taking steps to assist local firms
many products, a large percentage of
infrastructure composed of natural
seize the opportunity and/or attract
the value added manufacturing work
gas and crude oil/bitumen pipelines,
new companies that could meet this
occurs outside of Canada. For
power generation utilities, refineries,
need.
example, 69% of value of industrial
chemical plants, and transportation networks. As well, 3500 small and medium-size businesses provide raw materials and finished goods and supplies, construction, engineering, finance, administration and management services to oil sands producers. The Opportunity
machinery purchased by oil sand Task Force participants stressed that the Capital Region was perfectly situated to provide a greater share of manufactured goods used by northern Alberta's oil sands plants. This potential advantage was seen as being unique to the Capital Region. Moreover, it was thought to be an enduring advantage that would not change or disappear with
The oil sands industry — a voracious consumer of manufactured products of all types
shifts in economic or political climate.
companies was found to be added outside of Canada. Corresponding percentages for other manufactured goods were: 40% foreign value added for heat exchangers and power boilers, 42% for fabricated metal pipes, 49% for control instruments, and 36% for electrical machinery. Overall, 47% of the value of manufactured goods purchased by Alberta's oil sands companies was found to come from
— is committed to investing $25
While analysis shows that oil sand
foreign countries. As well, it was
billion in existing operations over
companies purchase the great
concluded that much of the
the next 25 years. The Alberta Capital Region has an opportunity to
majority of manufactured materials
Canadian value, i.e. 53 %, came
from Canadian sources, further
from southern Ontario.
capitalize on this expenditure by
scrutiny of this data reveals that
28
9.2 Recommendation
Recommendation 14: That The Alberta Capital Region Manufacturers' Association work closely with the economic development agencies of the region to: a. determine what is needed to create critical mass within the secondary wood industry, the
innovations and inventions occur,
should be based on reasonable
wealth is created, and civilization is
expectations about the conditions
advanced. If not for this critical mass of people, capital, competition
that are needed to create critical
and knowledge it is uncertain whether human civilization could
Participants also recommended that manufacturers — not government or
have advanced much beyond the
economic development agencies —
simple agrarian economy. On a
should take a lead role in:
smaller scale, the principle of critical
1. identifying the set of conditions
mass within target industries.
that constitute critical mass, and
mass holds true for regional manufacturing industries.
2. determining to which of these
agri-food industry, and within those industries that manufacture
As a general rule of thumb, the
for Alberta's primary resource
elements that interact to create
industries, and
critical mass include:
b. develop plans to achieve this critical mass. Rationale ... The need for critical mass within an industry is an important concept that was stressed repeatedly by Task Force participants. The term critical mass implies a set of conditions, which if present in an industry, will ensure its sustainability and serve as a catalyst for vigorous industry growth and innovation.
• a threshold number of competing businesses,
conditions efforts should be focused in order to achieve critical mass. This approach would not diminish the importance of economic
• a threshold level of technical
development agencies. Not only
support, • a threshold level of education
would agencies work closely with
and training support, • a threshold level of research and development support, • a threshold level of management skills and business knowledge (industry related), and • a threshold level of investment capital.
On the broadest scale, cities (or large urban centres) are examples of
Task Force participants stressed that
critical mass. It is here that
industries in the Capital Region
efforts to grow manufacturing
industries in assessing the ingredients of critical mass, they would also work as agents for industry in developing and executing strategies to create the desired conditions, e.g. attracting complement region, nece the
9.3 Recommendation
Rationale ...
Recommendation 15:
Companies that comprise an
That The Alberta Capital Region
industry must be networked and
Manufacturers' Association
coordinated in order to address
encourage the formation of a
common issues, problems and
secondary wood manufacturers subgroup, an agri-food processors
opportunities. The action that is recommended provides the
subgroup, and a subgroup of
foundation for long term synergistic
manufacturers that is interested in
relationships within the region's key
manufacturing for Alberta's primary
growth industries.
industries.
28
9.4 Recommendation
Recommendation 16: That The Alberta Capital Region Manufacturers' Association promote relations between primary forest
possessing expertise in a range of
As indicated in Recommendation 16
wood manufacturing niches. In
the Task Force believes that the
contrast, primary wood producers
Alberta Capital Manufacturers'
are larger, more financially powerful
Association should lead this inter-
firms that add relatively little value
sector dialogue. Initially, exploration
to the lumber they produce.
of this idea might take the form of a
companies and secondary wood
full day workshop where
manufacturers of this region to
The thinking behind
promote and introduce the
Recommendation 16 was that each
possibility of cooperative ventures.
of these types of manufacturers, if brought together in strategic
Rationale ...
partnerships, would provide a
Task Force participants stressed the
unique and valuable contribution to
importance of primary and
the relationship. Secondary
secondary wood producers exploring
producers would contribute product
partnership opportunities related to
and marketing expertise while
wood manufacturing. Typically,
primary manufacturers would
secondary wood manufacturers are
provide financial depth and ensure
small, resource-limited companies
access to a reliable wood supply.
representatives from each sector would discuss areas of possible partnership. As well, Task Force participants felt that the economic development agencies of the region should also be part of this dialogue — suggesting real examples of partnership opportunities that could be pursued.
9.5 Recommendation
Recommendation 17: That The Alberta Capital Region Manufacturers' Association promote relations between: 1. large primary producers and 2. manufacturers from the region
added to the product outside of
manufacturers of The Alberta Capital
Canada. The Task Force assumed
Region must establish channels to
that this general relationship held
dialogue with the Alberta's large
true for purchase made by all of
primary producers about the
Alberta's primary manufacturing
manufacturing opportunities that
companies.
exist and ways to capitalize on these
Task Force participants felt there
opportunities.
who could supply more of the
was a clear opportunity for
While it is not practical for each
primary producer's manufactured
manufacturers in the region to be
potential manufacturer to dialogue
needs.
manufacturing a greater percentage of the manufactured products used
one-on-one with the large primary
by Alberta's primary producers. This
local manufacturers, under the
As discussed previously,
opportunity came from being located
auspices of The Alberta Capital
approximately 47% of the value of
at the doorstep of these industries.
Region Manufacturers' Association
Rationale ...
manufactured goods purchased by Alberta's oil sands companies was
However, this potential opportunity
producers, it is possible for groups of
to conduct such a dialogue.
will not happen by itself. Instead,
30
10.0 The Municipalities of the Alberta Capital Region (In Order of Population)
The City of Edmonton
The Town of Morinville
Strathcona County
The Town of Beaumont
The City of St. Albert
The Town of Devon
The Municipal District of Sturgeon
The Town of Gibbons
The City of Leduc
The Town of Redwater
Parkland County
The Town of Bon Accord
The City of Spruce Grove
The Town of Calmar
The City of Fort Saskatchewan
The Village of Legal
The County of Leduc
The Village of New Sarepta
The Town of Stony Plain