Spotlight on Northern economy - Local issues

Published on May 22, 2018

Northern Ontario’s economy has struggled in recent years. Traditional industries like steel, forestry and mining are cyclical in nature and cities have had a difficult time diversifying.

The issue is one that is front and centre during this provincial election campaign and the four main political parties address the issue with different perspectives.

Incumbent Progressive Conservative Ross Romano blames the Liberal government for Northern Ontario’s economic problems.

“Northern Ontario has been taken for granted and the Liberals have ignored us for too long and has allowed our economy to falter as a result,” he said.

The loss of manufacturing plants, jobs and youth fleeing to other jurisdictions has occurred across the North, Romano said.

Reducing red tape for businesses, developing stronger infrastructure and building to prepare for the Ring of Fire development, reducing taxes and hydro rates all need to occur in order to change the direction of the economy, Romano said.

“We are uncompetitive with the United States and Kathleen Wynne acknowledged in her last provincial budget that the lower corporate taxes in the U.S. have made us less competitive,” he said.

Romano said that the Liberal’s carbon tax and the minimum wage increase have also become problematic for government.

“We need to incentivise businesses to come here by reducing the red tape, look at tax reductions and lower energy rates,” he said.

“At the end of the day it’s not up to government to create jobs. It’s up to government to create the environment that will see jobs come here and Ontario prosper,” Romano said.

New Democrat candidate Michele McCleave-Kennedy said the cyclical natures of the industries appear to be on the upswing again but new small business needs to be developed with the assistance of government grants.

“Small business is the backbone of the economy in our area,” McCleave-Kennedy said.

McCleave-Kennedy, who was a member of the community adjustment committee, said more effort needs to be put on expanding apprenticeship programs by talking to employers and determining what skill sets are needed for future jobs and work with Sault College and Algoma University to ensure they are providing the right programing.

The NDP also plans on increasing rail transportation, which in turn, will help existing businesses, create future markets and help diversify the economy, she said.

McCleave-Kennedy stressed she believes it is also important to reduce hydro prices to help reduce costs for businesses.

“By infusing money into the system, it allows small and medium size businesses to prosper,” she said.

Liberal challenger Jaclynne Hamel said she knows the importance of the steel industry in Sault Ste. Marie and understands the cyclical nature of the industry.

“I think it’s important to diversify our economy. It not only expands our job market but it attracts people from other job markets and encourages people to stay here,” she said.

After completing her education at Algoma University and Sault College, Hamel said she had a contract job with the Northern Ontario Heritage Fund Corp. and witnessed how the program was able to help businesses.

Hamel believes that society will be looking towards different type of work sectors in the future that will require some government assistance to launch and that will help the economy diversify.

Green Party candidate Kara Flannigan said her party believes investment in small business is important.

“They are currently the social fabric of our community,” she said.

Providing small business with tax relief by raising exemptions of the employee health tax would provide some relief to employers, who in turn could hire more people, she said.

Flannigan said locally, individuals and businesses need to tap into existing programs like the home and energy retrofit program. Customers will see results with more comfortable living and savings on energy costs. Greenhouse gas emissions will be reduced and by utilizing the programs, job opportunities will increase, she said.

Flannigan also promotes establishing an indoor beach in Sault Ste. Marie to create jobs, increase tourism with a waterfront motel and restaurant and develop an indoor farm to increase locally grown products.

“It would make our city the best place to live and great for our community,” she said.

All the candidates agree that the Northern Ontario Heritage Fund Corp (NOHFC) has been instrumental in helping businesses grow and prosper.

But the candidates vary in the views on how the NOHFC needs to change to further help Northern Ontario.

Hamel said that the NOHFC has played an integral role in helping businesses develop in Sault Ste. Marie.

“Take Outspoken Brewery for example. Small craft beers have only recently taken off and have become a strong sector in Northern Ontario and they were able to access funds through that program,” she said.

She said the Liberal commitment is to expand the NOHFC to $150 million over a three year period.

“That is fairly significant. It doesn’t just point to our commitment to the NOHFC but it also shows there is a need there and the money is being utilized, people are applying and they want to get things started in the communities,” she said.

Hamel said that as the fund increases, she expects the need to also increase and the process will result in more applications from Sault Ste. Marie.

“I think we’ll see a lot of that in the Sault and I think that’s an awesome opportunity for this community,” she said.

McCleave-Kennedy said the NDP platform includes additional money for the program, but more importantly, plans to reduce the red tape for those starting a new business.

She said the NDP’s plan is to inject $180 billion into infrastructure across Ontario.

Romano has been adamant that the NOHFC needs to change to better help businesses.

He wants to see the NOHFC $100 million fund used completely in the North, not just the two-thirds that have been dolled out in recent years, he said.

“I want to ensure that any unused portion doesn’t go back in the general levy, but gets rolled into the next year’s NOHFC fund and grows with the rate of inflation,” he said.

Romano sees the potential for the NOHFC but said current policy is problematic and wants to see the conditions changed so that there is no cap structure on the program.

“I think there are some mechanics in the fund that we can play with to make it more encouraging for business to come here,” he said.

He said even the NDP, when they were in power, cut the NOHFC and put the money back into general revenues at a time when Northern Ontario was in a recession.

“I have said before that I will actively try to get an increase for that fund,” Romano said.

Flannigan said she was not familiar with her party’s NOHFC platform.

A big part of Sault Ste. Marie’s economy includes a successful Algoma. The steelmaker remains in Companies’ Creditors Arrangement Act proceedings and calls have been made to the parties to ensure that the process continues and results in a successful conclusion soon after the next government is formed.

Hamel said the current Liberal government has supported that CCAA process and will continue that support in the future.

“At this juncture I think it is critical that we honour the commitment that the government has presented before the election and I think we need to do that regardless of what happens,” she said.

Hamel said Algoma is critical for Sault Ste. Marie and going in a different direction is not wise at this point and won’t help the city achieve economic stability.

Romano, on the other hand, is frustrated that the Liberal government has had multiple years to help Algoma but little has been done to get the deal completed.

“The province has a very substantial role to play when it comes to negotiating pensions, the environmental liability and when it comes to the cap tax issues,” he said.

Romano said the Liberal government has dodged his questions numerous times. “No one knows what they’ve actually done throughout this process.”

If elected, Romano said he will want to look at the three primary areas to determine if the negotiations are actually good.

More importantly, he wants to see the unsecured creditors in Sault Ste. Marie get fully paid.

“I’m very concerned about the creditors in our community who are owed $44 million because they are unsecured and they’re not represented in the process. I believe they deserve to get paid,” he said.

Ditto for the pensioners, who are purportedly owed $400 to $500 million. “I want to see these figures if I’m in government,” he said.

“I want to make sure that pensioners don’t lose a dime, that unsecured creditors are fully paid and that are city taxes are paid. The steel industry is doing well right now and it’s only fair.”

McCleave-Kennedy, president of the Sault Ste. Marie District Labour Council, said she’s very familiar with the negotiations and was also a participant at the steel table discussing tariffs with Prime Minister Justin Trudeau earlier this spring.

“I understand the issues and help push steel forward and solve that situation,” she said. “We can’t totally diversify from Algoma. That’s one of our major employers and we need to build that business but we believe that the money that will come into the rail system will also help that business and create other jobs.”

She said she would work with the municipality and other levels of government to ensure that the CCAA process reaches a successful conclusion.

The NDP have also committed to protect retirees during restructuring and have vowed to increase the pension guarantee fund benefits to $3,000 a month.

“Andrea (Horwath) has repeatedly called on the current government to act on the CCAA restructuring process faced by Essar-Algoma to help our steelworkers, their families and our community, and to fight on behalf of retirees so that they go to the front of the line in any CCAA process,” she said.

Flannigan said all candidates would work towards a successful conclusion for Algoma.

“A lot of work has been done on this already and it should not go to waste,” she said. “We’ve got a lot to be grateful for and we need to see it through and make sure that this goes through after the election.”

Flannigan said Algoma is meeting current site specific standards with the Ministry of Environment and Climate Change to improve our air quality.

“They’ve made significant investment to improve their pollution controls,” she said. “I’m optimistic that we’re going to see some positive things here for our community and that this will successfully concluded.”

The candidates also have other ideas on how they would improve the local economy if elected.

Flannigan said Sault Ste. Marie needs to capitalize on its investment in renewable energy.

“Now that we have too much energy, we need to find ways to redirect it and store it and use it when we need it and when it’s most expensive,” she said.

“This could really have an impact and reduce costs for our local businesses as well,” Flannigan said.

The Green Party also plans to grow resource extraction opportunities in Northern Ontario but well researched decisions need to be made on opportunities that will face the north in the coming years, she said.

The Ring of Fire development and the potential for a ferrochrome facility in Sault Ste. Marie need environmental and health assessments completed before any decision is made on them, she said.

“We need to know how it will affect not only the health and environment of our community but the people who live here and the number of opportunities that may emerge,” she said.

McCleave-Kennedy said she also believes healthy communities led to economic success. She said that money needs to be infused in the system for mental health, speech and other health aspects so that students can learn to their full potential and develop into a healthy workforce.

“In another 10 or 15 years we are going to need more workers so we need to plan ahead to get students ready for the jobs ahead because they are changing so quickly,” she said.

Romano said the Tory platform has a number of items that will help the Northern Ontario economy.

He said a PC government will reduce the aviation fuel tax, which would reduce costs of items in the north and especially the far North. It would also serve well to attract new business and development to the North, he said.

The PC’s also vow to increase investment in rail services, including the Northlander.

“I think that will improve our economic opportunities as well and better connect us with southern Ontario,” he said.

Most importantly, Romano said a PC government will result in progress for the Ring of Fire development and the creation of a ferrochrome processing facility.

“This is hugely impactful for our economy. It’s become a priority and I think more people know about it now,” he said. “Ontario is going to thrive when Northern Ontario thrives.”

Hamel said she has seen a surge in programming at both Algoma University and Sault College and believes that providing quality education by increasing programming opportunities will help the economy.

“If we were to continue expanding in our education here and if you get a Northern education, you’re more likely inclined to stay,” she said. “It will also attract more students from outside the community and they’ll want to stay and with dynamic programing, they’ll build different sets and skills that will help diversify the economy.”

Hamel said she believes the future of the city relies on the importance of keeping people here.

“Youth migration has been a problem here for a long time,” she said. “Opportunities will keep people here and we have to get started earlier in the game to get people to start their own business, or apply to NOHFC to expand their business and keep more of these young people here,” she said.

The provincial government is June 7.


By Elaine Della-Mattia, Sault Star