MANUFACTURING ATTRACTION STRATEGY

ECONOMIC DEVELOPMENT STRATEGIC PLAN

AND MANUFACTURING ATTRACTION STRATEGY

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Table of Contents

Executive Summary ……………………………………………………………………….. 3 Environmental Scan ‐ Analysis …….……..……………………………………….…. 8 Industry Sector Analysis ……………………………………………………………….. 23 Target Sector Assessment …………………………………………………………….. 34 SWOT Analysis …………………………………………………………………………….. 38 Business Retention & Expansion (BR+E) ………………………………………… 39 Business Support Services ……………………………………………………………...40 Lead Generation Targets …………………………………………………………………41 Site Selection Criteria ……………………………………………………………………..42 Recommended Priority Action Plan ……..Provided under separate cover

APPENDICES ………………………………………..Provided under separate cover

EXECUTIVE SUMMARY The City of Welland has consistently created development strategies that aligned with regional and provincial priorities and continues to demonstrate innovation, flexibility and a willingness to explore new priorities to ensure consistent economic growth. Welland continues to move forward to achieve a high standard of economic growth and sustainability. Following the decline of the global steel industry, Welland, a city significantly dependent on industrial manufacturing, experienced the multi‐faceted challenges of economic restructuring. The community was challenged by the existence of numerous brownfield sites, a significant decrease in manufacturing employment and a declining and aging workforce. To some extent, the manufacturing job losses were and continue to be offset by gains in public administration, financial and retail service sectors with new growth opportunities in specialized manufacturing sectors building on a commensurate workforce. Downsizing of the manufacturing industry led to over 16,000 jobs lost from 1990 to 2008 in the Niagara region. Youth out‐migration from Welland had been a predominant trend and the lower employment opportunities further intensified this trend. Universities and colleges in the Niagara corridor provided education and training necessary to produce highly skilled workers as well as the research that would spawn spin‐off companies. This created the environment necessary to attract investment into the area and ensure existing businesses remained competitive. The city has easy access to world‐class research centres at Niagara College, Brock and McMaster Universities. The recent $90 million Niagara College expansion is a strong catalyst in transitioning both Welland and Niagara’s economy. Overall, Welland’s economic performance has remained fairly stable in recent years with contraction in the traditional manufacturing sector and growth in the advanced manufacturing and service sectors. The city is now positioned as an economic gateway into the region. Inexpensive housing, higher learning institutes nearby, proximity to the border and major trade corridors, connections and proximity to major rail, regional and international airports including Buffalo, Toronto, Hamilton and major highways, provide a strategic advantage. An experienced manufacturing workforce and a good training infrastructure also contribute to the city’s competitive and sustainable advantage. For example, Welland has a ready‐to‐go experienced labour force with strengths in precision machining, metal forming, energy, resource industry machinery, hydraulics and power distribution. Several major infrastructure supports have been completed or are underway, including the Young's Sportplex, Niagara College and the Highway 406 extension that have also helped to spur growth in Welland and improved the quality of life for the residents. Welland is committed to fostering a strong, healthy economy through strategic action that builds upon its existing competitive strengths. As the city moves forward with its development strategy, it actively seeks innovative approaches to further promote a strong, diversified and integrated economy. The 2013 Economic Development and Manufacturing Attraction Strategy builds on previous economic development studies completed in 2004 and 2006 with a mandate to affirm historical target sectors, identify new opportunities and markets and make recommendations for an investment attraction action plan for the City of Welland.

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The strategy contains an economic base and industry sector analysis, a situational analysis and SWOT analysis and sector recommendations. The strategy also identifies key target market manufacturing sub‐sector opportunities, site selection criteria and investment readiness, sector highlights and messaging, lead generation recommendations and implementation action plans. Community consultations included individual interviews with community and business leaders, a facilitated focus group with broad community representation and ongoing interaction with economic development staff. The outcomes of the comprehensive research will guide the Welland Development Commission and the City of Welland Economic Development Office with implementation of tactics to identify and secure new employment growth opportunities for the community. The City of Welland Economic Development Office consists of two staff, who provide services under the auspices of the Welland Development Commission with an annual base budget of $350,000 of which approximately 1/3 is dedicated to programming. A recent study of economic development budgets in a sampling of small to medium‐sized Ontario communities indicated that per capita funding for economic development ranges from $4.50 to $16.00 per capita annually with the number of dedicated economic development staff ranging from 2 to 6. The investment in Welland's economic development per capita is approximately $7.00 per capita, which is in the lower mid range of the communities participating in the previous study. Successful implementation of the economic development strategy is dependent on resources available to the economic development team including staffing and programming funds and it is highly recommended that the implementation of the strategy timing be reviewed and weighed against the available resources on an annual basis. WELLAND DEVELOPMENT COMMISSION The Welland Development Commission (WDC) was established in 1963 as a non‐profit economic development corporation that is an arm of the City of Welland government. The WDC is funded by the City and corporate sponsors and is composed of Mayor and City Manager, a Chamber of Commerce appointee, a Welland Hydro appointee, citizen appointees, members of council and two full time staff who are contracted by the City of Welland. The WDC actively recruits new businesses and industries interested in establishing or expanding their enterprises in the City, as well as building working relationships with local businesses. It also promotes new business and investment opportunities within the City and will provide the business community with information and assistance with their respective needs and concerns. The WDC provides the following services on behalf of the City of Welland: business retention and expansion support, site selection assistance, Inventory of available land and buildings, strategic alliances, referrals to local businesses and government contacts, research information relating to specific inquiries, market research & assistance, corporate calling program, industry networking events, business directory database, community profile, statistical information, general information on the City of Welland and small business start‐up support through a contract with the Enterprise Centre in St. Catharines. As a non‐profit, non‐share Capital Corporation the Commission operates at arms‐length from the City of Welland, however the Mayor, three councillors and the CAO are members of the Board of Directors, along with six business representatives as noted above. The economic development corporation model provides distinct advantages to the delivery of economic development services in that it operates separately from the municipality and therefore has more flexibility in delivering services "at the speed of business" and is allowed to conduct real estate

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transactions that are important to economic development services. The Welland model operates effectively and appears to be contributing to the success of the economic growth in the Welland community. It is recommended that the Welland Development Commission review and update its bylaws for compliance with the new Canada Not‐for‐Profit Corporations Act before October 2014. PAST STRATEGIES AND RECENT SUCCESSES The City of Welland last completed a comprehensive economic development strategy in 2004, followed by an economic development review in 2006. Both strategies recognized Welland's transition from a traditional manufacturing and transportation hub and included recommendations to build on community strengths and global market opportunities. Several of the priority sectors or clusters remain viable for future investment activity however this report identifies recommendations focused on sectors with the best opportunity for return on investment (ROI). Current detailed research and analysis of Welland's economic status indicates that since the 2006 review the City of Welland has demonstrated a commitment to implementation of previous strategies while allowing for flexibility to take advantage of emerging employment opportunities and that despite new impacts on employment base caused by global economic shifts and decline in historic sectors, the City of Welland has demonstrated that it is able to adjust to shifting needs by initiating a diversification of markets, exploring new priorities and exploiting new opportunities based on location and regional economic drivers. The data in this report generally includes best available data to 2011 augmented by some available from other sources. Not all recent economic impacts are captured in the extensive data provided in the body of the report. Subsequent economic tracking indicates that the Welland Economic Development office directly supported $140,000,000 in direct business development activity from 2011 through to 2013. This represents new investments, facility acquisitions and upgrades, site remediation projects and property sales. Total number of jobs created is 650 with potential for up to 800. This represents $60,000,000 to $72,000,000 in annual economic activity (on average). A detailed list and economic impact methodology is included in the appendices. REPORT HIGHLIGHTS SUMMARY Population Between 2006‐2011, population growth was extremely slow in both Welland and Niagara Region increasing by only 0.6% and 0.9% respectively, in contrast to a 5.7% increase in the Province. Welland is set to be one of the fastest growing municipalities in Niagara Region. Projected population growth is forecast to outpace Niagara Region at a rate that only slightly less than projections for the Province. Education One fifth of Welland’s population has no formal qualifications, a higher proportion than Niagara Region (18.1%) and significantly higher than the Province (15.6%). The percentage of young people in Welland relying on little or no education credentials is a cause for concern since this group are typically confined to low skill‐low pay occupations and are not in a position to capitalize on high quality job opportunities in today’s technology intensive and knowledge based economy. Labour Force Unemployment in Welland is fuelled by a marked difference between male unemployment (11%) and female unemployment (7%). This disparity does not exist in the Province where both are equal or

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Niagara region where female unemployment is only marginally higher. Furthermore, this situation did not exist in 2006, when male unemployment was lower than female unemployment. Significant job losses have been experienced across a number of sectors. Those in manufacturing have been hit particularly hard, with the loss of over 1,000 jobs during this period. On the positive side, there were significant gains seen in public administration, educational services, and retail. Encouraging signs are also seen among those employed in industries requiring higher skills such as professional, scientific and technical services, and utilities. Occupation Growth The fastest growing sectors between 2006 ‐2011 in employment among Welland residents were: EDUCATION; LAW AND SOCIAL; COMMUNITY AND GOVERNMENT SERVICES (48.9%) ART; CULTURE; RECREATION AND SPORT (30.2%) NATURAL AND APPLIED SCIENCES AND RELATED OCCUPATIONS (25.7%)

These are encouraging signs, as occupations in these sectors tend to require relatively high skill sets. Commuter Patterns The net outflow of labour in 2011 was 750 people or just 3.9% of the employed population, a gap that has narrowed by 11.5% since 2006 when the net outflow was 3,180 or 15.4% of the employed population. Commuters to Welland are mostly from Niagara Region, with St. Catharine’s, Niagara Falls, Pelham and Port Colborne, the most prevalent places of residence (Figure 12 below). This, together with the commuter patterns of Welland residents, suggests a self‐contained economy within the Niagara Region that provides employment for the vast majority of its residents. Employment Base Between 2006 – 2012 Welland’s employment base grew by 2,032 jobs or 10.2%, outpacing Niagara Region (7.2%) and the Province (5.4%). The number of jobs in Welland is expected to increase by 1,554, or 7%, by 2020, comparable with both the Province and Niagara Region. Industry Sector Analysis The highest employment concentrations in Welland are in the following sectors: MANUFACTURING INFORMATION AND CULTURAL INDUSTRIES: SPECIFICALLY DATA PROCESSING, HOSTING AND RELATED SERVICES FINANCE AND INSURANCE BUSINESS SUPPORT SERVICES EDUCATIONAL SERVICES

While not enough to offset the very large losses, some manufacturing industries have registered employment gains, these include ASW and Welded Tube: STEEL PRODUCTS (31 JOBS) IRON AND STEEL MILLS AND FERRO‐ALLOYS (57 JOBS) O HER GENERAL PURPOSE MACHINERY (56 JOBS) T

OTHER WOOD PRODUCTS (51 JOBS) MISCELLANEOUS MANUFACTURING (63 JOBS)

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There has been significant growth in employment in education (33.4%) showing the positive impact of the College with 245 new jobs and in education support services has provided 35 more jobs increasing by 194%, albeit from a low base. Welland’s employment growth rate relative to the Province shows potential emerging industries, competitive strengths ‐ industries important to retention, and competitive weaknesses. In Welland this category includes food, logistics, technology, manufacturing, and financial services sub‐sectors. These sectors feature in Welland’s competitive strengths as does education and recreation, making them critical components in Welland’s economy. Despite significant job losses, manufacturing is still important in Welland. Target Sector Assessments The findings of the environmental scan and industry analysis recommends further investigation in the sectors below for investment attraction: ADVANCED MANUFACTURING TECHNOLOGIES (ESPECIALLY RELATED TO "GREEN" INDUSTRIES)

o RESOURCE INDUSTRY MACHINERY MANUFACTURING

o ADVANCED MATERIALS: INCLUDING BIO‐MATERIALS

SPORTS INDUSTRIES

INFORMATION COMMUNICATIONS & TECHNOLOGY (ICT) – BIG DATA ‐ (LONG TERM)

Key Strategy Recommendations (Details and action plan related to above target sectors are included under separate cover.) CORPORATE CALLING ‐ REGULAR COMPANY VISIT, INCLUDING BOARD/ELECTED OFFICIALS

UPPER LEVEL GOVERNMENT RELATIONS ‐ SECTOR BRIEFINGS, PARTICIPATION IN TRADE MISSIONS

INDUSTRY ASSOCIATIONS ‐ PARTNER WITH CANADIAN MANUFACTURERS AND EXPORTERS (CME AND OTHER KEY SECTOR INDUSTRIY ASSOCIATIONS

PARTICIPATION IN SECTOR SPECIFIC INDUSTRY EVENTS IN KEY MARKETS (EXHIBIT OR WALK/NETWORK SHOWS)

COMMISSION PROFESSIONAL PRE‐SHOW LEAD GENERATION AND MEETINGS

LOCAL MARKET INFLUENCERS ACTIVITIES (CAPTURE BUSINESS LEADERS PARTICIPATING IN RECREATIONAL ACTIVITIES)

SUPPORT IMPROVED ENERGY INFRASTRUCTURE, PRICING AND SECURITY

ENHANCE BUSINESS START‐UP PROGRAMS TO SUPPORT WORKFORCE DEVELOPMENT IN PARTNERSHIP WITH EXISTING

RESOURCES AND EXPANDED REALTIONSHIPS WITH CENTRES OF EXCELLENCE AT BOTH NIAGARA COLLEGE AND BROCK

UNIVERSITY

COMMISSION ACCREDITED BUSINESS RETENTION & EXPANSION (BR+E) PROGRAM

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ECONOMIC DEVELOPMENT STRATEGIC PLAN AND MANUFACTURING ATTRACTION STRATEGY ENVIRONMENTAL SCAN – ECONOMIC BASE ANALYSIS Methodology The environmental scan is a comparative examination of Welland’s social, demographic and economic performance in relation to Niagara Region and Ontario. This analysis was compiled with data from Statistics Canada, Census of Population in 2006; currently available 2011 Census data, and the National Household Survey (NHS) sample survey, 2011. This data was supplemented by EMSI Analyst; a tool that creates localized estimates of population, economic, industry, and workforce trends through combining available data from various sources such as Canadian Business Patterns, labour force surveys, and Statistics Canada. DEMOGRAPHIC PROFILE Population Growth and Projections Between 2006‐2011, population growth was extremely slow in both Welland and Niagara Region increasing by only 0.6% and 0.9% respectively, in contrast to a 5.7% increase in the Province. Welland is set to be one of the fastest growing municipalities in Niagara Region. Projected population growth is forecast to outpace Niagara Region at a rate that only slightly less than projections for the Province. Figure 1 Population Projections 2011 – 2031

Sources: Regional Municipality of Niagara ‐ Amendment 2‐2009 to the Official Plan, Ontario Ministry of Finance Population forecasts; Statistics Canada estimates, 2001‐2012, projections.

Population by Age The average age of residents in Welland is 43.9 years, slightly younger than in Niagara Region (44.1 years) but more so than the Province (40.4 years). 66.2% of Welland residents are of working age (15 to 64), marginally higher than Niagara Region (65.7%), but a lower proportion than the Province (68.4%). Looking to the emerging workforce, the percentage of children aged 0 to 14 (15.3%) is roughly equal to Niagara Region (15.5%) but lower than the Province at 17%. The percentage of older individuals in Welland aged 65 and over (18.5%) is similar to Niagara Region (18.8%), but significantly more than the Province (14.6%).

While Welland’s population is expected to increase significantly, its existing age profile could present a short and medium term threat of labour force decline especially when considered in relation to the Province. Talent retention and attraction is a key issue in the creation of sustainable economies. Labour force initiatives are important to the long‐term sustainability of Welland.

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Figure 2 Age Profile of Welland Residents with Provincial and Regional Comparisons

Source: National Household Survey, 2011 Ethnicity As of 2010, immigrants comprised 10.3% of Welland’s population (National Household Survey). Welland’s immigrant population skews strongly towards Europe as opposed to Asia, as is the case in the Province. The majority of immigrants originate from Italy (18.5%), and the United Kingdom (17.5%), with most third generation or more. Many older immigrants came from Italy and Eastern Europe to work in the manufacturing plants in Welland. Welland has a significant bi‐lingual contingent. 10.4% of the population has French as their first language and less than 10% of the population has a non‐official language as their mother tongue. The most commonly spoken non‐official languages are Italian, Hungarian and Spanish. The bulk of the remaining non‐official languages spoken are Eastern European. Visible minorities comprise just 3.9% of the population in Welland, in contrast to just over a quarter of individuals in Ontario (25.9%).

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EDUCATION Educational Attainment Figure 3 Comparative Educational Attainment of Welland Population aged 25 and over

Source: National Household Survey, 2011

Post secondary educational attainment in Welland is significantly lower than the Province. In 2011, 49.8% of adults aged 25 years and over had completed some form of post‐secondary education as opposed to 60% in the Province, and 53.5% in Niagara Region. Of those with post‐secondary education, the majority (24.9%) hold a College, CEGEP, or other non‐university certificate or diploma. A further 10.8% have a trade’s certificate, which suggests a population oriented towards vocational education. The numbers with degree level education are less than half (11.2%) the Province at 26%, and lag behind Niagara Region (16%). One fifth of Welland’s population has no formal qualifications, a higher proportion than Niagara Region (18.1%) and significantly higher than the Province (15.6%). The percentage of young people in Welland relying on little or no education credentials is a cause for concern since this group are typically confined to low skill‐low pay occupations and are not in a position to capitalize on high quality job opportunities in today’s technology intensive and knowledge based economy.

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Fields of Study The most popular fields of study reflect the vocational characteristics of those with post‐secondary education qualifications.

Figure 4 Major Field of Study of Welland Residents


Predominant fields are architecture, engineering and related technologies (4495 graduates). Mechanic and repair technologies/technicians and precision production disciplines feature strongly in this group followed by business management and public administration (3510 graduates), followed by health and related fields (3205 graduates). The distribution of major field of study in Welland is similar to the provincial pattern except in the percentage of graduates in the important subject areas of mathematics, information and computer sciences, and life and physical sciences. The percentage of graduates in the Province is double that of Welland. LABOUR FORCE Labour Force Population The labour force population of 15 years or over has declined by 1.7% since 2006, in line with population trends. Labour Force Participation Labour force participation in Welland at 59.3% is lower than Niagara Region (62.1 %) and the Province (65.5%) on account of fewer people in the workforce and unemployment. The unemployment rate was 9.5% in 2010, roughly one percentage point more than the Province at 8.3%, and Niagara Region’s at 8.6%. Since 2006, unemployment has increased from 7.3% but only at a marginally higher rate than the Province (6.4%).

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Unemployment in Welland is fuelled by a marked difference between male unemployment (11%) and female unemployment (7%). This disparity does not exist in the Province where both are equal or Niagara region where female unemployment is only marginally higher. Furthermore, this situation did not exist in 2006, when male unemployment was lower than female unemployment. The prevalence of jobs in the retail and health care sectors, and sales and service occupations among Welland residents are likely to be factors since both skew towards female employees.

Figure 5 Welland Labour Force Participation Rates


Labour Force by Industry Retail, health care and social assistance, and manufacturing are the leading industry employers, as is the case in the Province. The prevalence of employment in these industries partly explains the marked differences between male and female unemployment rates in Welland. While manufacturing sector employment is 87% male, and retail sector employment marginally skews towards female (55%), the health care sector employment is 80% female. Over 60% of employees in the next two highest ranked sectors ‐ education and accommodation and food service are female.

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Figure 6 Labour Force by Industry Share

Labour Force Growth and Decline by Industry Figure 7 on following page shows growing and declining industries in terms of employment among Welland residents 2006 – 2011. Significant job losses have been experienced across a number of sectors. Those in manufacturing have been hit particularly hard, with the loss of over 1,000 jobs during this period. On the positive side, there were significant gains seen in public administration, educational services, and retail. Encouraging signs are also seen among those employed in industries requiring higher skills such as professional, scientific and technical services, and utilities.

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Figure 7 Employment by Industry Welland Residents 2006‐2011

Source: National Household Survey, 2011 Labour Force by Occupations One third of Welland’s employed population work in sales and service occupations. This includes service representatives and other customer and personal services occupations (8%), and service support and other service occupations (7.6%), the top two occupations among Welland residents. Both are low wage and low skill and reflect the relatively low average household income in the community as discussed in section 6 below. The third ranked employment fields are industrial, electrical and construction trades (5.5%), forming part of the 18.2% employed in trades, transport, and equipment operators and related occupations categories. The presence of Canadian Tire Financial Services and Convergys is evident with just over 13% working in business, finance and administration occupations, closely followed by education with 12.7% in this field.

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Figure 8 – Occupational Composition in Welland

Source: National Household Survey, 2011 Occupation Growth The NOC‐S 2011 codes were updates of the National Occupational Classification 2006 of Human Resources and Skills Development Canada and Statistics Canada’s National Occupational Classification for Statistics (NOC‐S) 2006. Bearing this in mind, figure 9 below shows approximate changes in the employment fields of residents between 2006 and 2011. The fastest growing sectors between 2006 ‐2011 in employment among Welland residents were: EDUCATION; LAW AND SOCIAL; COMMUNITY AND GOVERNMENT SERVICES (48.9%) ART; CULTURE; RECREATION AND SPORT (30.2%) NATURAL AND APPLIED SCIENCES AND RELATED OCCUPATIONS (25.7%)

These are encouraging signs, as occupations in these sectors tend to require relatively high skill sets. Growth in sales and service employment was flat (1.4%), as was growth in management positions (4.3%), while small declines were registered in health occupations employment (‐3.7%), and among trades, transport, and equipment operators and related occupations (8.4%). The most significant declines were seen in: MANUFACTURING EMPLOYMENT (29%) NATURAL RESOURCES; AGRICULTURE AND RELATED PRODUCTION OCCUPATIONS (43.5%) BUSINESS; FINANCE AND ADMINISTRATION OCCUPATIONS (34.3%)

The severe job losses are in part accounted for by the relocation of some Canadian Tire Financial Services employees, and the closures of Marusa Marketing and John Deere.

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Figure 9 Growth and Decline in Resident Employment in Welland

Source: Statistics Canada 2006 Census, National Household Survey (NHS), 2011 Self‐employment is relatively low in Welland (6.7%) in relation to both Niagara Region (9.1%) and the Province (10.3%). This is surprising given the number of lay‐offs over the years, which can drive people in this direction. Commuting Flows by Place of Work – Welland Residents The table below shows the difference between those who are employed in Welland and the employed population in Welland. The data does not include those employed outside of Canada or those with no fixed place of employment. The net outflow of labour in 2011 was 750 people or just 3.9% of the employed population, a gap that has narrowed by 11.5% since 2006 when the net outflow was 3,180 or 15.4% of the employed population. Today more people live and work in Welland; the outflow has reduced by 75% since 2006.

Figure 10 Overall Commuter patterns of Welland Residents, 2006‐2011

Source: Census of Population 2006; National Household Survey 2011

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Figure 11 below shows commuting patterns of Welland residents employed labour force 15 years and over, by usual place of work and gender. 48.77% of the employed population both live and work in Welland. However, there is an 11% differential between men (43.3%) and women (54.3%). This speaks to Welland’s employment composition that skews towards female dominated industries and occupations as outlined earlier. Of those that commute to destinations outside Welland, the vast majority work in Niagara Region. St. Catharine’s (15%) and Niagara Falls (10%) have the greatest share of Welland’s working population with the other places of work scattered across the Region. A few commute long distances to Hamilton and western GTA destinations such as Oakville and Mississauga.

Figure 11 Commuter Patterns ‐ Welland Residents


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Figure 12 Place of Residents ‐ Commuters to Welland


Commuters to Welland are mostly from Niagara Region, with St. Catharine’s, Niagara Falls, Pelham and Port Colborne, the most prevalent places of residence (Figure 12 below). This, together with the commuter patterns of Welland residents, suggests a self‐contained economy within the Niagara Region that provides employment for the vast majority of its residents. Hamilton dominates the share of longer distance commutes, with only small numbers coming into Welland from GTA locations, and significantly more males than females.

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Employment Base in Welland Figure 13 Projected Jobs Growth in Welland

Source: EMSI Analyst

Between 2006 – 2012 Welland’s employment base grew by 2,032 jobs or 10.2%, outpacing Niagara Region (7.2%) and the Province (5.4%). Using 2012 as a base, the EMSI Analyst tool developed community employment projections to 2020. EMSI’s algorithms use insights from multiple data sources and certain assumptions to replace suppressions with educated, bounded estimates. During this period, the number of jobs in Welland is expected to increase by 1,554, or 7%, comparable with both the Province and Niagara Region, as indicated in Figure 12 below.

Figure 14 Employment in Welland Historic and Projected Growth 2006‐2020


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Household and Personal Income The average household income in Welland in 2010 was $63,220 increasing by 25% from $50,498 in 2005. As income levels continue to lag Niagara Region ($72,453), they are considerably lower than Ontario where the average household income was $85,722, and is growing much more rapidly (42%) from $60,455 in 2005. Welland, Niagara and the Province have similar income distribution in the very low‐income bracket, under $10,000, and in the $60,000 ‐$100,000 range. Regional and provincial differences are most apparent in the highest income brackets over $100,000 where Welland lags behind and in the larger proportion of individuals in Welland that earned between $20,000 and $60,000. When the after‐tax income low‐income measure is considered, the proportion of Welland’s population on low income was 15.5% in 2010 representing a slight increase over 2005 (14.4%). There are a higher proportion of individuals in this category than both Niagara Region (12.9%) and Ontario (13.9%). Of the total personal income sources in Welland in 2010, it should also be noted that 20.6% was from government transfers. Just over 70% of this income was accounted for by assistance to those on low incomes or the unemployed ‐ guaranteed Income Supplement, employment Insurance benefits, child benefits, and “other income from government sources”. Furthermore, this is a significant increase over 2005 when 15.8% of personal income in Welland was from government sources.

Figure 15 Household Income Distribution in Welland


These circumstances are symptomatic of Welland’s labour market conditions. Reasons include higher employment rates among women who have lower average incomes, the presence of low paying industries, low educational attainment, and a depressed labour market, particularly among males. Only through addressing these issues will Welland’s average household income rise to levels comparable with the Region and the Province.

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Housing Starts and Completions New build housing activity in Welland outpaced that of Niagara Region by a significant margin in the 12 month period between July 2012 and 2013, with increases in starts and completions around the 70% mark. Growth in the pipeline while not as strong was still up by a quarter. All of which underlines the importance of the construction industry in Welland.

Figure 16 Housing Starts Welland and Niagara Region July 2012 – July 2013

Source: CMHC, July 2013

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ENVIRONMENTAL SCAN FINDINGS – KEY POLICY IMPLICATIONS

Finding Implications Children and Youth Education Development Initiatives

LOW EDUCATIONAL ATTAINMENT LEVELS

FEW DEGREE LEVEL PROGRAM GRADUATES

TOO MANY WITH NO FORMAL QUALIFICATIONS

Increase the aspirations of Welland’s young people

Low representation of STEM subjects (except engineering)

Encourage study of science, math, and technology subjects Leverage programs such as FedDev’s YouthSTEM Program

Labour Force Development Initiatives In relation to the Province:

FEWER WORKING AGE INDIVIDUALS

SMALLER CHILDREN AND YOUTH POPULATION

YOUTH RETENTION INITIATIVES

SKILLED LABOUR/TALENT ATTRACTION INITIATIVES

WELLAND SHOULD POSITION ITSELF AS A PLACE IN WHICH

YOUNGER PEOPLE CAN THRIVE AND WHERE FAMILIES WILL

WANT TO LIVE AND WORK

BUT THERE IS A LOT OF WORK TO DO…. Quality of Opportunity Initiatives

FEW DEGREE LEVEL PROGRAM GRADUATES

TOO MANY WITH NO FORMAL QUALIFICATIONS

PROVIDE OPPORTUNITIES FOR EXISTING WORK FORCE TO INCREASE

THEIR SKILL SETS

High proportion employed in low skill/low pay occupations

BR&E and Investment attraction initiatives targeting high quality companies

High male unemployment Manufacturing investment attraction initiatives LOW PROPORTION OF SELF‐EMPLOYED RESIDENTS

Provide local support to encourage entrepreneurship in the community

PROMISING INCREASE IN EMPLOYMENT IN KNOWLEDGE

INDUSTRIES: EDUCATION, ART; CULTURE; RECREATION AND SPORT, NATURAL AND APPLIED SCIENCES AND RELATED OCCUPATIONS.

Develop talent driven sector initiatives around these fields

Leveraging Welland’s Immigrant Population Strong Connections with Europe The Canada‐EU trade agreement negotiations are in

their final stages; potential opportunities could be leveraged through Welland’s immigrant population’s links and language capabilities

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INDUSTRY SECTOR ANALYSIS Location Quotient (LQ) Analysis ‐ Industry Employment Concentration in Welland Location quotient (LQ) shows the concentration of industry and occupations in terms of employment activity in any given location as compared to the benchmark region, in this case, Ontario. A sector or sub‐sector with an LQ greater than 1.0 denotes a higher concentration whereas a sector or sub‐sector with an LQ less than 1.0 denotes a lower or near par concentration. The highest employment concentrations in Welland are in the following sectors: MANUFACTURING INFORMATION AND CULTURAL INDUSTRIES: SPECIFICALLY DATA PROCESSING, HOSTING AND RELATED SERVICES FINANCE AND INSURANCE BUSINESS SUPPORT SERVICES EDUCATIONAL SERVICES

There are nine sub‐sectors with LQs over 5, with five of these over 10, which suggests an over dependence on these industries and possibly too little diversification in the economy. Figure 14 below shows the sub‐sectors involved.

Figure 17 Relative Employment Concentration in Welland

Sector – 2 digit NAICs Attributable to: LQ Classification HIGH with VERY HIGH COMPONENTS (>5)

Very high Rubber product manufacturing (14.9) Agricultural, construction and mining machinery manufacturing (20.9) Forging and stamping (11.5) Steel product manufacturing from purchased steel (16.2) Clay product and refractory manufacturing (7.9)

Manufacturing High Other wood product manufacturing (2.4) Other non‐metallic mineral product manufacturing (2.8) Iron and steel mills and ferro‐alloy manufacturing (3.9) Cutlery and hand tool manufacturing (3.5) Boiler, tank and shipping container manufacturing (1.9) Machine shops, turned product, and screw, nut and bolt manufacturing (1.8) Other general‐purpose machinery manufacturing (3.4) Other miscellaneous manufacturing (2.1)

Information and cultural industries (51)

Newspaper, periodical, book and database publishers (1.4) Data processing, hosting, and related services (16.9)

Finance and Insurance (52) Non‐depository credit intermediation (24.4) Other financial investment activities (1.1)

Administrative and support, waste management and remediation services (56)

Business support services (5.4) Services to buildings and dwellings (1.5) Other support services (2.4)

Educational services (61) Elementary and secondary schools (1.1) Community colleges and C.E.G.E.P.s (6.6) Educational support services (4.2)

HIGH Construction (23) Residential building construction (1.1)

Highway, street and bridge construction (1.8) Foundation, structure, and building exterior contractors (1.4) Other specialty trade contractors (2.7)

Wholesale (41) Metal service centres (1.7) Farm, lawn and garden machinery and equipment wholesaler‐distributors (4.2) Construction, forestry, mining, and industrial machinery, equipment and supplies wholesaler‐distributors (2.5)

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Sector – 2 digit NAICs Attributable to: LQ Classification Retail Trade (44‐45) Lawn and garden equipment and supplies stores (2.1)

Automobile dealers (1.2); Automotive parts, accessories and tire stores (1.5); Beer, wine and liquor stores (1.2); Gasoline stations (1.2); Jewellery, luggage and leather goods stores (1.8); Department stores (1.8); Other general merchandise stores (1.3); Florists (1.3); Other miscellaneous store retailers (1.7)

Transportation and Warehousing (48‐49)

Specialized freight trucking (1.6) Taxi and limousine service (1.8) Support activities for road transportation (1.8)

Real Estate, Rental & Leasing (53) Activities related to real estate (2.3)

Health Care and Social Assistance (62)

General medical and surgical hospitals (1.7); Residential developmental handicap, mental health and substance abuse facilities (2.7) Other residential care facilities (1.9) Vocational rehabilitation services (1.5) Offices of physicians (1.1); Offices of dentists (1.4); Out‐patient care centres (1.3); Individual and family services (1.4)

Arts, entertainment and recreation (71)

Other amusement and recreation industries (1.2)

Accommodation and food services (72)

Limited‐service eating places (1.5) Special food services (1.3)

Other services (except public administration) (81)

Automotive repair and maintenance (1.2); Commercial and industrial machinery and equipment (except automotive and electronic) repair and maintenance (2.3); Personal care services (1.6); Funeral services (1.3); Dry cleaning and laundry services (2.4); Other personal services (2.2); Religious organizations (2.4); Civic and social organizations (2.1)


Employment Growth and Decline

There is high employment concentration in both fast growing and declining industries as indicated below.

Figure 18 Fastest Employment Growth and Decline Percentages by Sector in Welland


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Many declining industries are concerned with manufacturing, with some experiencing significant job losses, in particular, in agricultural, construction and mining machinery (569 jobs with a 47.9% decline) and rubber products (169 jobs, shrinking by 37.7%). The impact of John Deere’s closure in 2009 has been felt in related businesses such as farm, lawn and garden machinery distribution; with employment contracting by 13.4%, construction, forestry, and industrial machinery, equipment and supplies wholesaler distributors; declining by 23.8%, through to lawn and garden equipment supply stores with a 19% decline equating to 5 jobs. While not enough to offset the very large losses, some manufacturing industries have registered employment gains, these include ASW and Welded Tube: STEEL PRODUCTS (31 JOBS) IRON AND STEEL MILLS AND FERRO‐ALLOYS (57 JOBS) OTHER GENERAL PURPOSE MACHINERY (56 JOBS) OTHER WOOD PRODUCTS (51 JOBS) MISCELLANEOUS MANUFACTURING (63 JOBS)

Business support services have also suffered with employment declining by 40%, equating to the loss of 503 jobs. However, these losses have been offset by growth in related areas such as non‐depository intermediation, and data processing hosting and related services. There has been significant growth in employment in education (33.4%) showing the positive impact of the College with 245 new jobs and in education support services has provided 35 more jobs increasing by 194%, albeit from a low base. A comparison of employment growth and decline in Welland as compared to the Province provides insight into relative sector performance, as illustrated in Figure 16 below. The following sectors are out‐performing the Province: CONSTRUCTION; HEAVILY REPRESENTED IN GROWTH INDUSTRIES ‐ 8 SUB‐SECTORS FOOD PROCESSING – 3 SUB‐SECTORS MANUFACTURING ‐ 3 SUB‐SECTORS COMPUTER SERVICES ‐ 3 SUB‐SECTORS EDUCATION

NINE OUT OF FOURTEEN HIGH PERFORMING SUB‐SECTORS ARE IN CONSTRUCTION DRIVEN INDUSTRIES. THESE TEND TO BE CYCLICAL AND CAN POTENTIALLY LEAVE THE CITY VULNERABLE TO A SUDDEN DOWNTURN. INDUSTRIES ARE IN DECLINE ARE CONTRACTING AT A SIGNIFICANTLY FASTER RATE THAN THE PROVINCE.

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Figure 19 – Growing and Declining Industries in Welland Relative to Ontario

Sector Strengths and Weaknesses Welland’s employment growth rate relative to the Provincial location quotient shows potential emerging industries, competitive strengths, industries important to retention, and competitive weaknesses. Emerging industries, where the LQ is low but employment is growing faster than the province can indicate potential growth sectors, which can form the basis of a sustainable economy. This category includes food, logistics, technology, manufacturing, and financial services sub‐sectors. More significantly, these sectors also feature in Welland’s competitive strengths as does education and recreation, making them critical components in Welland’s economy. Despite significant job losses, manufacturing is still important in Welland. There are sub‐sectors providing the City competitive advantage as well as evidence of emerging industries. Furthermore, industries that are important for retention are dominated by manufacturing. Related distribution industries related to manufacturing are also potential emerging industries. However, there is room for more representation in professional and technical services, which is important in terms of manufacturing industry support. Business support services are also important to retention with complimentary competitive strengths in financial services. Logistics related industries are significant with support activities for road transportation a potential emerging industry, specialized freight trucking an area of competitive advantage which offsets weaknesses in general freight trucking. Current trends in logistics and transportation have resulted in specialization such as cold chain logistics so this is not an area of concern.

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Figure 20 Industry Importance by Sub‐sector in Welland (4 digit NAICs)

Canadian Business Patterns – Business Concentration in Welland Canadian Business Patterns data shows counts of statistical establishments by industrial activity (NAICS) and employment size ranges. ‘Payroll’ businesses are defined as businesses having a payroll account with CRA. The counts also include the indeterminate category, which is defined as businesses with no payroll deduction account with CRA. Such businesses may be self‐employed individuals and businesses that may have a workforce of contracted workers, family members or business owners. Number of Business Establishments As of June 2012, there were 1,128 Payroll businesses recorded in Welland. The vast majority are small with 86 % having less than 20 employees. Nearly 50% of these have less than 5 employees. Businesses with over 50 employees comprise 4.8% of the total.

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Figure 21 Business Size Distribution by Number of Employees

Source: Canadian Business Patterns, June 2012 The highest numerical concentration of businesses is in the following sectors: RETAIL TRADE (18.53% OR 209 BUSINESSES)

OTHER SERVICES (EXCEPT PUBLIC ADMINISTRATION) (13.03% OR 147 BUSINESSES)

CONSTRUCTION (12.15% OR 137 BUSINESSES)

HEALTH CARE AND SOCIAL ASSISTANCE (11.35% OR 128 BUSINESSES/INSTITUTIONS)

Numerically, retail has the largest share of ‘payroll’ businesses in Welland, followed by ‘other services’, which includes personal services such as beauty salons, dry cleaners and various types of repair services that are usually part of the retail mix. In Welland, there are 18 commercial and industrial machinery and equipment (except automotive and electronic) repair and maintenance businesses in this category, which are closely connected to manufacturing industries. Apart from community health care delivery services, the most prevalent institutions are residential developmental handicap facilities.

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Figure 22 Share of Businesses by Sector in Welland

SOURCE: CANADIAN BUSINESS PATTERNS, JUNE 2012

The numerical number of business in any given sector provides limited insight into its importance to the local economy. When considering the most predominant sectors in terms of businesses with over 50 employees, retail still has the highest number of businesses but is followed by manufacturing, accommodation and food services, health care and educational services, as reflected in employment concentration.

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Figure 23 Business Size and Sector in Welland

Source: Canadian Business Patterns, June 2012

Business Base Growth 2009 ‐ 2012 A detailed analysis of the Business Patterns Data between 2009 and June 2012 provides some insight into business growth and decline and the current composition of Welland’s business community. Overall the number of businesses in Welland increased by 2.7% during this period, with Payroll businesses showing a minimal decline (‐0.8%) and self‐employment businesses up by 7.1%. This is an encouraging sign given the relatively low proportion of self‐employed individuals in Welland.

Figure 24 Businesses in Welland 2009‐2012 Number and % Change

Source: Canadian Business Patterns, June 2012 Figure 24 above compares the number of businesses between 2009 and 2012, which saw the number of healthcare and social assistance businesses more than double. Other significant gains were recorded in finance and insurance (11.6%), real estate rental and leasing (39.8%), other services (36.4%), and in professional, scientific, and technical services (10.1%). However, there were declines in the number of businesses in the information and cultural industries (‐21.7%), wholesale trade (‐21.7%), and arts, entertainment, and recreation (‐19%).

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Of the payroll businesses, growth was most evident in: HEALTH CARE AND SOCIAL ASSISTANCE (14.3%)

ARTS, ENTERTAINMENT AND RECREATION (10.7%)

INFORMATION AND CULTURAL INDUSTRIES (9.1%)

TRANSPORTATION AND WAREHOUSING (6.4%)

The most significant declines were seen in the number of accommodation and food service, real estate, rental and leasing, wholesale trade, and construction businesses. Self‐Employment Businesses in Welland There are 981 businesses classified as self employed or indeterminate in Welland, which is a small increase (7.1%) over 2009. Representing nearly half of all businesses, the majority are in the following sectors: REAL ESTATE RENTAL AND LEASING (17.5% OR 172 ENTERPRISES)

CONSTRUCTION (15% OR 147 ENTERPRISES)

PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES (11.1% OR 108 ENTERPRISES)

RETAIL TRADE (10.1% OR 99 ENTERPRISES)

OTHER SERVICES EXCEPT PUBLIC ADMINISTRATION (8.7% OR 85 ENTERPRISES)

TRANSPORTATION AND WAREHOUSING (7% OR 69 ENTERPRISES)

The most significant transportation and warehousing business activities are general freight trucking (39 businesses). Commercial and industrial machinery and equipment (except automotive and electronic) repair and maintenance (10 businesses) are significant in the other services category. Just fewer than 5% of self‐employed businesses are in manufacturing, leaving room for growth especially in the light of current manufacturing trends. The emphasis on lean and agile manufacturing processes has resulted in a shift towards more entrepreneurial businesses providing customized products and flexible production processes. Computer systems design and management consulting services are the most prevalent professional, scientific and technical services businesses with engineering services also significant.

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KNOWLEDGE INDUSTRIES AND CREATIVE BUSINESSES Canadian Business Patterns ‐ Knowledge and Creative Businesses Knowledge industries are considered to be a key driving force for the economic development and well being of communities. In Welland, these industries are concentrated in the following areas:

• INFORMATION TECHNOLOGY. THERE ARE 30 ICT RELATED BUSINESS IN WELLAND COVERING WIRELESS, TELECOMMUNICATIONS, INTERNET, SOFTWARE, COMPUTER SYSTEMS PRODUCTS AND SERVICES.

• SPORTS. NINE ESTABLISHMENTS OFFER ATHLETIC INSTRUCTION, WHILE THERE ARE 18 RECREATIONAL SPORTS FACILITIES IN THE CITY.

• ENGINEERING AND TECHNICAL SERVICES. 44 BUSINESSES ARE INVOLVED IN AN ARRAY OF SERVICES COVERING ARCHITECTURE, ENGINEERING, DRAFTING, SURVEYING, GEOPHYSICAL SERVICES, TESTING LABORATORIES, SCIENTIFIC/TECHNICAL AND SO ON.

• MANAGEMENT CONSULTING. 27 BUSINESSES PROVIDE CONSULTING SERVICES, WITH SOME SPECIALISTS IN

HUMAN RESOURCES AND SOCIAL SCIENCES.

• EDUCATIONAL SERVICES. 29 BUSINESSES/INSTITUTIONS PROVIDE SERVICES IN THIS AREA, INCLUDING THE NINE ATHLETIC INSTRUCTION ESTABLISHMENTS REFERRED TO EARLIER.

Figure 25 Knowledge and Creative Businesses in Welland

Source: Canadian Business Patterns

There are 271 creative businesses in Welland, a number that has remained static since 2009.

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Super Creative Class Occupations Trends in Welland The super creative class occupational groups fully engage in creative and innovative processes. Typically these positions demand relatively higher skill sets and companies are placing greater emphasis on the availability of this type of human capital or talent. Moreover, manufacturing in the developed world is shifting towards high‐skill, high value production. The EMSI Analyst tool was used to extract growth trends in high skill occupations (The Super Creative Class) in Welland between 2006 and 2012. In Welland, the number of super creative occupations increased by 17.3% between 2006 and 2012, surpassing Niagara Region (7.8%). Forecast projections based on the EMSI Analyst data suggest this trend will continue with growth in these occupations expected to be 31% between 2006 and 2020. The identification of growing occupations in the community can provide pointers for initiatives in labour force development, BR&E, and investment attraction. Growing occupations cluster around construction, engineering, education, computer software and digital industries. Other growing areas are public sector occupations with a health focus, a few creative and artistic occupations, and program leaders and instructors in recreation, sport and fitness. The EMSI Analyst data predicts continued growth in these occupations.

GROWING HIGH SKILL OCCUPATIONS IN WELLAND 2006‐2012 Construction estimators Civil engineering technologists and technicians Mechanical engineering technologists and technicians Civil engineers Other professional engineers, n.e.c. Mechanical engineers Landscape and horticultural technicians and specialists Interior designers Artisans and crafts persons Inspectors in public and environmental health and occupational health and safety Business development officers and marketing researchers, and consultants Photographers

Secondary and elementary school teachers and educational counsellors, n.e.c. College and other vocational instructors Health policy researchers, consultants and program officers Social policy researchers, consultants and program officers Education policy researchers, consultants and program officers Social workers Software engineers and designers Database analysts and data administrators Graphic designers and illustrators Program leaders and instructors in recreation, sport and fitness Lawyers and Quebec notaries

Source: EMSI Analyst Declining occupations are related to growth occupations in computer programming, education, a number of artistic occupations and sport, an occurrence which could be more to do with re‐distribution of work rather than a decline in employment opportunities.

DECLINING HIGH SKILL OCCUPATIONS IN WELLAND 2006‐2012 Musicians and singers Post‐secondary teaching and research assistants Computer programmers and interactive media developers Educational counsellors Electrical and electronics engineers Producers, directors, choreographers and related occupations Secondary school teachers Recreation, sports and fitness program supervisors and consultants Authors and writers Painters, sculptors and other visual artists Journalists


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TARGET SECTOR ASSESSMENT Methodology The findings of the environmental scan and industry analysis provided pointers for further investigation in the sectors below: ADVANCED MANUFACTURING TECHNOLOGIES (ESPECIALLY RELATED TO "GREEN" INDUSTRIES)

o RESOURCE INDUSTRY MACHINERY MANUFACTURING

o ADVANCED MATERIALS: INCLUDING BIO‐MATERIALS

CONSTRUCTION

HEALTHCARE

EDUCATION SERVICES

SPORTS INDUSTRIES

ICT – BIG DATA (LONG TERM)

An asset audit was conducted for each of these sectors in Welland involving a scan of key elements of their ecosystems: companies, regional educational institutions and programs, research and development activities, and business and professional support.

These sectors are examined in the context of current trends and alignment with Welland’s strengths below. REDEFINING WELLAND’S TARGET SECTORS Welland’s labour market is characterized by a prevalence of employment opportunities in low paying industries, low educational attainment, and a depressed labour market, particularly among males. In order to develop a sustainable economy that provides quality jobs for its residents, The City needs to focus on building on its sector strengths and aligning them with current trends in technology and processes. There is much work to be done, involving not only the BR&E and investment attraction but workforce development as well. Industries in advanced economies are shifting towards high skill, high value products and services. The tables set out below show the key trends, followed by summary profiles for each sector to guide this process.

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TARGET SECTOR TRENDS Key trends for each target sector are presented in the following table. Sector Key trends

Advanced Manufacturing Technologies

GLOBAL DEMAND POTENTIAL FOR CAPITAL PROJECTS AND NATURAL RESOURCES (BRICS)

UBIQUITOUS ROLE OF INFORMATION TECHNOLOGY

RELIANCE ON MODELLING AND SIMULATION IN MANUFACTURING PROCESSES

ACCELERATION OF INNOVATION IN SUPPLY‐CHAIN MANAGEMENT

AGILE MANUFACTURING SYSTEMS THAT RESPOND RAPIDLY TO CUSTOMER NEEDS AND EXTERNAL IMPEDIMENTS

ACCEPTANCE AND SUPPORT OF SUSTAINABLE MANUFACTURING

ORGANIZATIONAL AND BUSINESS‐MODEL FOCUS ON PROCESS IMPROVEMENT KEY SUB‐SECTOR TRENDS

Major advances in two mature areas ‐ semiconductor fabrication and advanced materials with a focus on integrated computational materials engineering

The emerging technologies are additive manufacturing (aka 3D printing) and bio‐manufacturing with a focus on synthetic biology

Construction – Sustainable Buildings

CAPITAL PROJECTS E.G. 406 EXTENSION

MODERNIZATION OF AGING INFRASTRUCTURE. MUCH OF CANADA’S UNDERGROUND INFRASTRUCTURE, BRIDGES, ELECTRICAL GRIDS, ROADS, AND HIGHWAYS ARE RAPIDLY APPROACHING THE END OF THEIR USEFUL SERVICE LIVES.

MEGA‐PROJECTS – OIL SANDS PLANTS, OFFSHORE PLATFORMS OR NUCLEAR STATIONS – ARE ONGOING OR IN THE PIPELINE.

SUSTAINABLE CONSTRUCTION. COMPANIES NEED TO COMPLY WITH: o MORE COMPLEX GREEN BUILDING STANDARDS o IMPROVE THEIR ENVIRONMENT HEALTH AND SAFETY RECORDS, AND o MANAGE WASTE DISPOSAL

DEMAND IS INCREASING FOR ENVIRONMENTALLY FRIENDLY CONSTRUCTION WORK, BOTH IN TERMS OF DESIGN AND

IMPLEMENTATION WHILE THE PUBLIC IS DRIVING DEMAND FOR SOCIAL RESPONSIBILITY.

GROWTH AREAS: LEED CERTIFICATION, NET‐ZERO ENERGY BUILDINGS, GREEN ENERGY, HOME AND BUILDING AUTOMATION, WATER CONSERVATION, GREEN BUILDING PERFORMANCE DISCLOSURE

Healthcare SOARING CHRONIC DISEASE BURDEN FUELLED BY DEMOGRAPHICS AND MEDICAL ADVANCES

BLURRING BOUNDARIES IN HEALTHCARE: CLINICAL ADVANCES ARE RENDERING PREVIOUSLY FATAL DISEASES CHRONIC. SELF‐MEDICATION SECTOR IS EXPANDING

POLICY‐MAKERS ARE INCREASINGLY MANDATING WHAT CAN BE PRESCRIBED

PERFORMANCE MEASUREMENT OF MEDICINES

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Sector Key trends

GOVERNMENTS FOCUS ON PREVENTION RATHER THAN TREATMENT

REGULATORS MORE CAUTIOUS ABOUT APPROVING INNOVATIVE MEDICINES

TECHNOLOGY WILL DRIVE HEALTHCARE PRODUCTIVITY AND THE NEED TO GET PRODUCTS TO MARKET FASTER Education Services Multiplier effect in local business community

PURCHASE OF GOODS AND SERVICES: DIRECTLY AND INDIRECTLY THROUGH OPERATIONAL EXPENDITURES, STUDENTS, VISITORS ETC., EMPLOYEES OF THE INSTITUTES AND BUSINESSES

TECHNOLOGY AND NEW BUSINESS PROCESSES GENERATING DEMAND FOR LIFELONG LEARNING

INCREASED AWARENESS OF THE IMPORTANCE OF LIFELONG LEARNING

NEED TO ENGAGE IN LIFELONG LEARNING AND ACQUIRE NEW SKILLS

NEW OPPORTUNITIES OFFERED BY ONLINE LEARNING

ACKNOWLEDGEMENT OF CONTRIBUTION OF PRIVATE, FOR‐PROFIT EDUCATION SERVICES TO INCREASE SKILLS AND KNOWLEDGE, PRODUCTIVITY, INNOVATION AND COMPETITIVENESS

Sports Industries GLOBAL GROWTH IN SPORTS INFRASTRUCTURE CONSTRUCTION, SPORTING GOODS, LICENSED PRODUCTS AND LIVE SPORTS EVENTS

GLOBAL SPORTS INDUSTRY IS GROWING MUCH FASTER THAN NATIONAL GROSS DOMESTIC PRODUCT (GDP) RATES AROUND THE WORLD.

ARRAY OF ASSOCIATED PRODUCTS AND SERVICES PROVIDE OPPORTUNITIES FOR SECTOR DEVELOPMENT INCLUDING: o PARTICIPATION o ENTERTAINMENT o EQUIPMENT AND APPAREL o PROMOTIONAL ITEMS o SPORT FACILITIES o MARKETING RESEARCH o MANAGEMENT SERVICES

Information Technologies – Big Data

BIG DATA: THE NEXT FRONTIER FOR INNOVATION, COMPETITION, AND PRODUCTIVITY1

CLOUD COMPUTING

2.5 QUINTILLION BYTES OF DATA ARE CREATED EVERY DAY: 90% OF THE DATA IN THE WORLD TODAY WAS CREATED IN THE LAST

TWO YEARS

GROWTH SECTORS: FINANCIAL SERVICES, GOVERNMENT, HEALTHCARE: BIO/HEALTH INFORMATICS, RETAILING

GROWTH AREAS: SOCIAL MEDIA, MOBILE COMMUNICATIONS, SEMANTIC WEB, LOCATION BASED SERVICES,

IMPLEMENTATION OF NEW TECHNOLOGIES: ‐ QUANTUM COMPUTING

COMPANIES SEEKING BETTER DECISIONS TO IMPROVE COMPETITIVENESS THROUGH DATA DRIVEN SOLUTIONS

1 McKinsey Global Institute: http://www.mckinsey.com/insights/business_technology/big_data_the_next_frontier_for_innovation

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Summary Examples of Key Sector Profiles in Welland Sector Companies Institutions

Facilities Research & Development Education Programs Business Support

Prof/tech Services Summary

Advanced Manufacturing Technologies

Whiting Equipment Canada Welland Forge Senvion Energex Tube Bosch Rexroth Canada Indexable Cutting Tools PowerBlades Inc. Global Architectural Metals E.D. Products Limited Welded Tube Hydac

Niagara Research's technology team The Rankin Technology Centre The Advanced Biomanufacturing Centre Melanie Pilkington, CRC Novel Hybrid Materials

Niagara College: engineering programs: electrical, electronic, mechanical, machinist, welding, metal fabrication

Team Quality Services Innovate Niagara Industry Innovation Centre at Niagara (IIC@N)

Key opportunities in supply to resource industry, advanced/bio materials. Innovative companies conducting onsite R&D, and diversifying into new areas. Good applied R&D, education, business support. Labour force skills availability but with some upskilling requirements

Construction – Sustainability

CRS Electronics Timbro Design/Build Contractors OSM Solar Niagara Wind Power 16 engineering services businesses

NC Sustainability Committee Rankin Technology Centre The Environmental Sustainability Research Centre (ESRC)

Niagara College: Post Secondary programs civil engineering, techniques, renovation Brock University: bachelor/masters in environmental studies

NC Employment and Training Solutions

Good representation of companies, skills, and business support. Refocus on sustainable construction. Include renewable energies e.g. rooftop solar, in these efforts.

Healthcare Prince Charles Medical Centre Community Support Services of Niagara Welland Hospital Centre de sante communautaire

Applied Health Institute, Welland Campus; The Jack and Nora Walker Centre for Lifespan Development Research; The Centre for Applied Disability Studies

Niagara College: dental, nursing, paramedic, pharmacy, graduate programs in autism Brock University: Bachelor/masters/PhD programs in public health, child health biochemistry, biotechnology biological sciences, nursing, biomedical sciences, biophysics, chemistry, community health Masters/PhD: applied health sciences

Cairns Family Health and Bioscience Research Complex. BioLinc Niagara College: Business & Commercialization Solutions Innovate Niagara NC Employment and Training Solutions

Experience based opportunity through community healthcare; older population Comprehensive applied health assets: education, skills, institutions, R&D, specific business support (regional) Health informatics driven by big data Synergy with sports industries

Education Services Niagara College – Welland Campus Niagara Catholic and District School Boards, and Catholic and Public French School Boards

Jennifer Rowsell, CRC in Multiliteracies

Brock University Bachelor/masters in Education


Niagara College provides platform to deepen centres of excellence, business support Part of re‐positioning the City Upskilling opportunities for local labour force – lifelong learning

Sports Industries Youngs SportsPlex Welland International Flat Water Centre (WIFC) Niagara Sports & Social 9 Athletic instruction businesses Niagara College Sports Complex

The Centre for Sport Capacity, The Centre for Healthy Development; The Centre for Bone & Muscle Health; Stephen Cheung, CRC in Environmental Ergonomics

Niagara College: fitness, recreation therapy, graduate programs: exercise science Brock University: bachelor/masters sport management, leisure, recreation, kinesiology, health/physical education


Very good sector ecosystem: specialist education, Centres of Excellence, facilities Strong sports culture Leverage PanAm Games Multiple sub‐sector opportunities for manufacturing and services In a strong position to capitalize on this sector

Information Technologies – BIG DATA

Convergys CMG Canada Limited Partnership Major users of big data Canadian Tire Financial Services Various banks and financial inst. Caisse populaire Welland Meridian

The Brock Institute for Scientific Computation

Niagara College: computer engineering, programming, web design, game development Brock University: Bachelor/Masters computing business, computer science, applied computing, math

Innovate Niagara NC Employment and Training Solutions Niagara Research' digital media Information Technologies team

FURTHER EXPLORATION LONG TERM Possible opportunity to explore big data possibilities through the presence of major users in financial services, healthcare, in conjunction with College

SWOT (Strengths, Weaknesses, Opportunities & Threats) ANALYSIS Strengths

• Strategic location ‐ highway access • Waterway attraction • Bilingual (French) workforce • Available employment lands • Niagara College technology skills centre

Weaknesses

• Low skilled workforce • Youth unemployment • Lack of support/awareness of successes within general community • Limited economic development resources • Deficiencies in regional transportation system

Opportunities

• Recreation and sports facilities • Leverage educational cluster, • More integration with Niagara College • Manufacturing associated with green energy • Highway 406 completion • Business support integration with Brock University

Threats

• Perceptions of community • Global market shift • Increase in Canadian dollar • Economic development resources

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BUSINESS RETENTION & EXPANSION (BR+E) One of the key economic drivers in a community undergoing economic change is the ability to support and retain existing business. It is estimated that over 85%+ of new jobs are created by existing business expansion. This is a critical factor to consider in an overall economic development plan. While the process is a major undertaking it will provide invaluable insights and recommendations to augment to investment attraction components of an economic development strategy. The City of Welland should consider commissioning of a comprehensive, formal Business Retention and Expansion (BR+E) review as modelled by the Ministry of Rural Affairs. Business Retention and Expansion (BR+E) is a community‐based economic development program with a focus on supporting existing businesses. It provides a systematic approach to assist communities in developing strategies that supports businesses retain and create new jobs and opportunities. BR+E is a community‐based economic development strategy with a focus on "taking care of, nurturing and supporting" businesses already existing in the community. The BR+E program uses an in depth, four stage process to assist communities in developing and implementing concrete action plans as follows: Stage 1 ‐ Project Planning and Business Survey This stage begins by determining if your community is ready to undertake a BR+E project, identify financing options and determine who the lead organization will be and what resources are available. If your community is ready to undertake a BR+E, a leadership team for the project is recruited to implement the program. This team will assist in formulating a work plan, promoting and managing the project. To round out this stage, volunteers using a survey visit businesses to gather information about the individual business and how the community can support all businesses in the project area. Stage 2 ‐ Immediate Follow‐up This stage is about responding to specific business issues that may be critical to a business remaining or expanding in the community. The BR+E program offers resources that assist communities to act quickly on an issue. A quick response to issues helps to establish credibility of the community's BR+E efforts and develops sincere relationships with the businesses. Stage 3 ‐ Data Analysis and Recommendations In stage three, communities utilize a secure and confidential BR+E web‐based application (e‐pulse) to record, store and aggregate the results from their community's business survey. The survey data is then analyzed by the community and forms the basis for development of recommended action plans. Stage 4 ‐ Public Meeting and Implementation Stage four of the BR+E program recommends hosting a public meeting to communicate the results of the project to the broader community. This meeting also acts as the "kick‐off" to implementation of the recommended action plans that address the issues and opportunities. This stage also includes ongoing monitoring and tracking of action plans.

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BUSINESS SUPPORT SERVICES One area of concern identified is that Welland has a lower proportion of self‐employed in comparison to the region and province. With a significant number of layoffs of the past several year this is surprising as often this number will increase. Many Welland residents impacted may have secured employment in other communities in the region, however there is an opportunity to promote entrepreneurship to unemployed with skills or aptitude for developing businesses in demand in the community and region. Both entrepreneurship and workforce development will be a key aspect of ensuring Welland continues to provide talent required in key sectors. Welland currently relies on a regional business support office in St. Catharines that operates part‐time in Welland to provide support services, the community may look to consider hosting a more permanent satellite business support location in the Welland community that can be actively promoted to entrepreneurs by the Welland Development Commission. There is an opportunity to inventory current public and private services that may support business start‐ups and development in order to promote to prospective clients.

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LEAD GENERATION TARGETS 2014‐2016 Utilizing the updated research on community sector strengths and key global trends the following are identified as primary target sectors for prospect development and lead generation.

• Advanced Manufacturing Technologies o Resource industry machinery manufacturing o Advanced materials: including bio‐materials

• Sports industries • ICT – Data (Long‐term)

Foreign Direct Investment (FDI) Country Target Priorities by Sector Advanced Manufacturing Technologies

• United States ‐ Northeast, Midwest • Europe ‐ Germany and other European Union growth economies. • Asia ‐ Japan, Korea • South America ‐ Brazil

Sports Industries

• United States • Europe

ICT ‐ Data

• United States • Asia • South America

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SITE SELECTION CRITERIA ANALYSIS ‐ TOP 10 FACTORS Critical Location Decision Factor #1: KEEPING THE COST OF LABOUR IN CHECK Although labour costs seem to trump all other factors, they must be analyzed as part of overall operating expenses. Welland's labour costs are comparable to other southwestern Ontario locations. Critical Location Decision Factor #2: THE ROAD TO PROFITABILITY A well‐connected location is essential for accessing suppliers and customers, as well as connecting to intermodal hubs leading to the global marketplace. Welland is ideally suited close to major transportation hubs and the US border. Completion of Highway 406 to Welland will further enhance access for delivery and distribution of goods. Critical Location Decision Factor #3: WORKERS WHO HAVE THE “RIGHT STUFF” Having a pool of highly skilled workers can tip the balance in a location’s favour. Welland had a skilled workforce based on employment reductions in traditional industries and the community is able to attract workers from through the Niagara Region (50% of workforce commutes into Welland) however it is important to support training programs for youth and displaced workers to ensure that the talent base meets future employment needs. Critical Location Decision Factor #4: “CONNECTED” LOCATIONS SUPPORT INNOVATIVE COMPANIES Locations offering a robust telecom infrastructure — with adequate speed, choices, and bandwidth — are becoming hotbeds for technology development and entrepreneurship. Welland is adequately connected to telecom infrastructure with a variety of service providers available for industry. Critical Location Decision Factor #5: COSTS OF NEW VS. EXISTING FACILITY It’s less expensive to rehab an existing facility than go with a build‐to‐suit, but the latter will give a company a custom fit. Welland has competitive options for both strategies and a demonstrated track record on building re‐use and brownfield redevelopment. Due to these recent successes Welland's options are somewhat limited to new facilities.

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Critical Location Decision Factor #6: POWERING UP WHILE KEEPING COSTS DOWN While some operations are more energy‐intensive than others, reducing energy costs is always an important consideration in the location decision. Unfortunately the Ontario energy generation and power distribution system does not allow for specific cost reductions. The issue of high energy costs and the impact on attracting and maintaining high energy use employers is a concern in Welland and throughout Ontario. This does not impact the City of Welland's competitiveness on a regional scale but may be a consideration when competing for global business. Continued efforts to establish a special cost zone are encouraged. Critical Location Decision Factor #7: KEEPING GOVERNMENT OUT OF THE COMPANY COFFER Although corporate tax rates figure more prominently into some location decisions than others, there’s generally an overall tax bite — including property and sales taxes — that needs to be looked at carefully. Welland's industrial tax rate is competitive with some regional competition but trends slightly higher (5.2%) than several other competitive communities outside the Niagara Region (~4.0%). Critical Location Decision Factor #8: EXISTING FACILITIES SATISFY DEMAND FOR A QUICK PROJECT TURN‐AROUND The economic downturn left a lot of available buildings on the marketplace, although not all have the infrastructure needed by specialized firms. The Welland Development Commission has a positive track record with assisting investors in developing new uses for existing facilities and provides excellent turn‐around time to clients; supply is limited due to success. Critical Location Decision Factor #9: MAKING A DENT IN THE TAX BILL WITH EXEMPTIONS* Although there are variations in which taxes are exempt in different jurisdictions, they not only offer an upfront break when a facility is being deployed, but also can result in ongoing tax savings. *This factor does not apply in Ontario as tax exemptions are illegal under the Municipal Act. This is a consideration when competing against other jurisdictions. The proposed Gateway Economic Zone will provide a competitive advantage in this consideration. Critical Location Decision Factor #10: UNION ACTIVITY CAN BE A DEAL BREAKER In order to be able to keep wages in check and maintain a flexible operating environment, many companies put low union profile high on their list of site selection priorities. Welland is historically a strong union community, and while the majority of employers are non‐union there is a perception this is not the case. Investors will expect to see that the community can support both union and non‐union operations.

Source: Corporate Survey ‐ Area Development Magazine, Fall 2013

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MANUFACTURING ATTRACTION STRATEGY

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