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A few thoughts after reviewing the REDAC Regional Marketing Plan issued June 2016.

Positives:

  1. The report was not too shy in identifying some of the issues and challenges facing the region in terms of increasing economic development.
  2. There was a clear understanding that it is one thing to prepare a plan, and another to fund and effectively implement the plan.
  3. The plan appropriately identified the need for monitoring and assessing the effectiveness of any marketing programs.

Oversights:

Several meaningful issues were overlooked in the report. Was it a case of simply not recognizing the issues, or was it a case of ‘sweeping it under the carpet’. My sense of some important points that were overlooked:

  1. Services
  2. Tax differentials
  3. Housing value
  4. Railways

Services:

The services available to homeowners and businesses varies considerably throughout the area studied in the REDAC report (Parry Sound, McDougall, Seguin, and Carling). These include:

  • Municipal water
  • Municipal sewer
  • Natural gas

There was mention of the need for better internet connectivity. For the most part it’s not that big an issue except at the residential level. Wireless service is actually quite good, and for businesses it is not an unreasonable expense if it impacts business and profitability. They aren’t streaming video at work. Businesses out in the backwoods of the region really can’t expect ‘fibre’ type service, and if they really needed it they would not be located where they are. Homeowners who want to stream video at home have an issue as wireless can be expensive. Better, actually mostly cheaper, internet services are a nice to have that would help attract people and businesses to the area.

Real businesses that employ people and serve customers on site, not the retired consultant type shop, need water and sewer service. Yes, a well and septic bed can do the job, but it raises an unreasonable burden of effort for businesses that have other things to think about. Think about the new high school to be built in the area. Will they locate somewhere that depends on wells and sewers? Perhaps, but given their preferences they would rather not be doing weekly water tests to make sure the kids aren’t drinking contaminated water following that big rain. And how big a septic bed is needed for a high school of 1,000 students? Right, just about the size of a football or soccer field.

A bigger issue is the availability of natural gas. Electricity is expensive, especially for uses like heating. Natural gas is remarkably inexpensive, but it requires an infrastructure that is only available in Parry Sound and a relatively select number of addresses in the other municipalities. Propane is an option, but it’s not nearly as cheap or convenient as natural gas. I suspect a large number of people who installed electric baseboards when electricity was cheap regret not putting in more insulation, or installing a furnace and ducting that could be used with propane, a heat pump, or natural gas when it arrived along their road.

Tax Differentials:

The tax rates on property in the five municipalities vary about three-fold, with Seguin at the low end and Parry Sound at the top. Taxes reflect a balance of what services municipal residents and business want to receive and how much they are willing to pay for them. The lower taxes in the surrounding regions do not arise from happenstance, they reflect the interests of the taxpayers.

Municipalities like the Town of Parry Sound are stretched in terms of the taxes they can collect and the services they are expected to deliver. Adding new taxable residents and businesses is a priority as much of the infrastructure is already established and any increased revenues from new residents and businesses would be ‘profitable’, and help support necessary infrastructure upgrades for all. Economic development that leads to increased property values is very much in the interests of Parry Sound. The only real revenue the Town has is from the taxation of property and government grants.

The other municipalities do not have the same needs for more development and greater tax revenues. This is reflected in their lower tax rates. Economic development is something that is nice to talk about, because it reflects positively on councils. But do they really want it? Is it possible that more development will lead to a requirement for new services that might mean higher tax rates? Nobody likes to raise property taxes, especially if your municipality depends on being the low tax provider.

I think the residents of these municipalities would rather not promote development. Many of them like it the way it is. Seasonal residents are complaining about the development of certain lakes and are calling for a moratorium on new cottages. And I’m not sure that people really like the idea of losing the small town, or cottage area, feeling that comes with more development. If permanent and seasonal residents can enjoy low taxes and the services of a town like Parry Sound next door or Bracebridge a little further away, why do they need more ‘economic development’? There is no benefit, only the potential for change and higher taxes.

The tax differential between municipalities drives much more than was ever suggested in the REDAC report.

Substandard Housing Value:

This mostly applies to the Town of Parry Sound. Housing in Parry Sound is by Toronto standards cheap;  but it is a poor value. There are any number of reasons for this, none of which are easily fixed by politicians. In more affluent regions many of these houses would be leveled and replaced with the types of housing that young families need and can afford. The development of well-designed condo facilities offers some hope for better value housing in Parry Sound, but this type of housing will not appeal to those with families who want a backyard. They can get that type of housing in the Barrie, Orillia and Owen Sound areas, where there are also the jobs to support the associated cost of this housing. Chicken and egg, or egg and chicken?

The Railways:

Again mostly a Parry Sound issue. Canadian National and Canadian Pacific together run about twenty or more heavy freight trains through Parry Sound every day and represent a serious deterrent to business investment and residential development. Not surprisingly, the most substantial recent residential development, Silver Birch, is located far from the railway tracks. Bt it comes at a price, Highway 400 with it’s noisy weekend summer traffic. One development in Parry Sound close to the tracks, and subject to crossings that see trains going both ways, has struggled despite offering attractive ‘Southern Ontario’ single family homes. The issue is not just the risk of a Lac Megantic type event, or even the occasional road blockages, it’s the day-in, day-out, sound of air horns blasting at six crossings and the squeal of the wheels as they round the many curves, day and night. Why build a business in Parry Sound if you can build in Seguin or McDougall?  Oh, there’s the issue of services and infrastructure. Why not just go to communities like Orillia, Barrie and the ‘suburban’ areas of Muskoka, where you are not subject to trains in the same manner and you have access to more customers (retail and service), cheaper transport costs (manufacturing), and a larger employment pool?

 

Parry Sound Bay and Beyond can become an attractive destination for both people and businesses. The trouble is that there are too many other Southern Ontario municipalities that are already much more attractive. Once these destinations reach their limit to host businesses and new homes people will begin to look at Parry Sound Bay and Beyond. That is unless we can get our act together, work together, and create the infrastructure to compete. But area municipalities, with the exception of Parry Sound have more than enough money to continue operating as they have for the last twenty years, for another twenty years, without attracting any new residents or businesses. These municipalities have little motivation to do anything new. They just need to pretend to be interested lest permanent residents and businesses think they don’t play nicely with others.

Provincial and Federal civil servants are quite happy to facilitate and fund discussions of economic development in the West Parry Sound area. It their job to do it. And they are well paid jobs. By gosh they will do their best to get it done, regardless of the odds. It reminds me of the continuous negotiations in the Middle East between the Israelis and the Palestinians facilitated by the United States. The US State Department is tasked with getting a real agreement between these two parties and they try their best. It’s their job, even though there is no prospect of any type of agreement. At this point Israel has everything it needs in the region. It has the wealth, military strength and political influence to ensure nothing is taken from them. It is not in their interest to negotiate. Any appearance of willingness to negotiate is strictly a function of making nice with the President of the United States who gets it in their mind every now and then that they want to gain statesman status by brokering a grand peace agreement.

Final Thoughts

I started out this review of the REDAC Regional Marketing Plan expecting to be critical of Whitestone, McKellar and The Archipelago for not participating in the REDAC economic development process. Looking at things a little more closely I have come to realize that they are perhaps the only honest brokers in the region, willing to admit that not only do they not need regional cooperation, they are actually better off without it. I will give a pass also to the Town of Parry Sound. I believe they do support regional economic development because they desperately need the increased tax base to manage tax rates and support additional infrastructure necessary for the larger community.

Even Parry Sound tax rates are on the low end for Northern Ontario as was presented in a survey of Northern Ontario municipalities. I visited Elliot Lake in August and was impressed by the upkeep of the town and the facilities it offers. But it benefits from a population base about twice that of Parry Sound, a much larger geographic area (715 sq. km, versus 13 sq. km), and a tax rate 40% higher.

Regional economic development is something to keep Municipal, Provincial and Federal employees busy, and employed. If Ontario and Canada really want to see additional economic development in the area they need to provide incentives to McDougall and Seguin to hand over enough land to Parry Sound to allow for real economic development, by a municipality that is interested in economic development, and with established infrastructure. Incentives to McDougall and Seguin might include support for policing expenses, and/or broadband infrastructure, and/or an area athletic complex. But that would be a bribe I suppose. Given America’s experience with the billions they have pumped into the Middle East, I expect it wouldn’t work too well here. Take the money and run.

Aside: reading yesterday’s Beacon Star I saw that Seguin has started thinking about their 2017 budget. Their high priority items are summer weekend support for a nursing station in Rosseau, taking responsibility for unassumed roads, and a tennis court. All this with a potential 0% increase in taxes. Seguin is doing just fine with their current business model. Why take on development that might mean responsibility for building the services accompanying business and non-seasonal resident growth? It might mean tax increases and unfamiliar faces. That’s okay, the area municipalities have their cake and are able to eat it as well. They  seem to be riding as high on property values as were the Middle East oil kingdoms were when oil was $100 a barrel. As long as property valuation stay high, and seasonal residents don’t become permanent residents and expect Toronto level services, it’s all okay.

Mismatched Objectives, Taking Off and Heading to Port.
(Best to just get out of each other’s way.)

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Update: tracking down a link for the Beacon Star article I came across a squabble between Carling and the The Archipelago about phone bills. Yup, sure, let’s invest more in regional cooperation. (Not!) The Town of Parry Sound needs to take on a Singapore or Hong Kong frame of mind. Small is beautiful. It may not be cheap but it offers great value. Can we erect borders?