In one visionary initiative, the Premier could give Sudbury an economic boost, help resolve mining skilled labour shortages, spend university funding more efficiently and be in sync with the recently published provincial report “Ontario in the Creative Age” by Richard Florida and Roger Martin of the Rotman School of Management.

Notwithstanding the current commodity slump, there is a demographic time bomb ticking in the mineral sector as the baby boomers get ready to retire. It is believed that 60 per cent of geo scientists – the people who find new mineral deposits – in Canada will be 65 or older by 2015.

In early 2008, the Mining Industry Human Resources Council (MIHR) projected that mining industry yearly labour requirements face three scenarios: high-growth (9,200), no-growth (6,200), and industry contraction (4,600), until 2016. These were only based on retirements.

Without a steady supply of adequately trained skilled workers, the Canadian mineral sector’s ongoing competitiveness and expansion will be severely affected.

Once the recession is over, the mining industry will be the first to bounce back as vital mineral commodities will once again be in demand by China, India and other developing countries that will continue to industrialize and urbanize at a phenomenal pace never before seen in the history of the world.

On the other hand, southern Ontario’s manufacturing and auto sectors will continue to struggle due to lower cost off-shore producers, ensuring that the mineral industry’s importance to the provincial economy continues to grow. It is in Ontario’s best interests that the training of skilled mining professionals be given much more attention. As the recent provincial report, Ontario in the Creative Age states, “We must build a talent and education system attuned to the demands of the global creative economy. The province must become the world’s leading talent and educational province.”

According to the Canadian Council of Professional Engineers (CCPE) there were about 23,000 engineering students in Ontario’s universities in 2007. The three institutes that offered mining engineering – Sudbury’s Laurentian, Queens University in Kingston and the University of Toronto – had only 255 students enrolled.

There are 12 geo-science departments across Ontario with about 620 students enrolled in 2005. They include U of T, Queens, Laurentian and nine others. Of these, only 230 have the academic background courses to qualify for registration as a professional geoscientist in Ontario.

The major challenges in providing mineral education programs are the high cost of technology and equipment, combined with low student numbers. Funding is enrolment-driven, and with the small number of students scattered in three mining engineering and 12 geo-science programs across the province, it is increasingly difficult for institutions to maintain the curriculum to produce graduates with the necessary skills. In many instances, mining programs have been placed within other departments, producing a loss of mining focus and decreased relevance to the industry.

Although Laurentian may be one of the smaller universities in the province, it has a strong commitment to mineral sector research.

Why Sudbury’s Laurentian University?

The Sudbury Basin is the richest mining district in North America and among the top ten most strategic globally. It also has one the world’s highest concentrations of hard-rock mines with an ensuing level of underground technical expertise that is augmented by Laurentian – the only university in Canada located within a mining region. Half the province’s mining activity and revenue are generated here and Sudbury is also located within a five-hour drive of three of Northern Ontario’s four other major mining camps: Timmins, Kirkland Lake and Hemlo. The community also has the third largest cluster of mining supply and service companies in the country. Most industry experts predict that the prolific Sudbury Basin will still be producing nickel, copper and platinum group metals a century from now.

Although Laurentian may be one of the smaller universities in the province, it has a strong commitment to mineral sector research. The university’s vision statement says, “Laurentian University will become the national centre of expertise in geosciences and mining innovation – education, research, technology and commercialization – by energetically building on acknowledged strengths in mineral exploration, mining engineering, robotics, and environmental sciences.” No other university in Canada has a mission statement that explicitly expresses its research and teaching commitment to mining and exploration.

Currently, Laurentian’s Earth Sciences geology department’s Mineral Exploration Research Centre (MERC) represents the largest cluster of geoscientists conducting ore deposit-related research of any university in North America.

Laurentian’s Centre of Excellence in Mining Innovation (CEMI) will be focusing on key areas of research in mining tele-robotics, mine process engineering, deep mining and environmental reclamation.

A large engineering school with well-funded research programs anchors every internationally successful technology cluster. Clusters are concentrations of related companies and service providers present in a specific city or region. Many economists believe clusters are the future key to wealth creation and the establishment of high paying jobs, primarily through the global export of goods and services.

The best example of this is California’s Silicon Valley and its strong connection with Stanford University’s renowned engineering faculty. The technology-related sectors of science, math and engineering are the value-added wealth creators of any society or country. These connections support cluster businesses that create and apply new technologies and successfully compete globally. In most technology clusters, many of the start-up firms are spun-off from university research activities.

“The concentration of people and industries is one of the most powerful of all economic forces” states the recent provincial report Ontario in the Creative Age. “The great economist Alford Marshall noted the power of clustering or what he called agglomeration. Economists had long understood that industries and economies can and do benefit from ‘economies of scale,’ but what Marshall discovered is that a similar kind of productivity gains can come from businesses and people that work together in a place together.”

Resistance from Queens and U of T’s Lassonde Institute

Many people in the mining sector know that the current system of mineral education in Ontario is not sustainable.

However, a serious stumbling block for consolidating the programs into one world-class facility with critical mass is the alumni, especially from the two oldest mining faculties — University of Toronto and Queens. The alumni provide enormous amounts of money to these institutions and would resist the closing of any mineral departments.

In particular, the Lassonde Institute for Engineering Geoscience at the University of Toronto would vehemently fight its relocation to Sudbury. A little background on the Lassonde Institute is in order. Pierre Lassonde is one of Canada’s most successful and high-profile mining entrepreneurs. In 1997, at a time when the industry was in the doldrums, he generously donated $5 million to establish the Lassonde Geological and Mining Engineering program. But many in the industry will confess that the Lassonde Institute has been diluted from its original mining focus to encompass other engineering faculties.

The consolidation of all these smaller mineral departments into one location would enormously benefit the entire mining sector. It may also entice significant new funding from the industry, as one centralized facility could take advantage of economies of scale by teaching all of the province’s future mining engineering and geology students. This critical mass of mining expertise would draw students from around the world, like the legendary Colorado School of Mines at its peak a generation ago.

“The concentration of people and industries is one of the most powerful of all economic forces.”

In 2008, for the first time in human history, more than half of the global population will be living in cities, resulting in unprecedented demands for mineral products to build the necessary infrastructure. An explosive demand for skilled mining geologists and engineers to find and develop the future mineral deposits, as well as keep the present ones running, will be one of the most significant global challenges the mining industry faces. Individually, the engineering and geology departments within the Ontario university system do not have the resources necessary to modernize due to low enrolments.

With provincial billion-dollar deficits for the next few years and an underfunded university system in desperate need of more resources, consolidating the post-secondary mineral education programs into one world-class facility at Laurentian and turning that institute into the Harvard of the mining sector would contribute enormous benefits to Sudbury and the entire mineral sector.

As “Ontario in the Creative Age” states, “Now is the time for Ontarians to take bold actions to ensure our future prosperity. ... Productive and future oriented investment will generate prosperity for the long term. Our future advantage in the creative age will be based on facilitating and encouraging the geographic clustering and concentration of industries and skills.”

Stan Sudol is a Toronto-based executive speech writer and communications consultant who produces a mining blog. www.republicofmining.com

Financing local government is a problem everywhere, but it is especially serious in Northern Ontario, where the boom-bust cycle of the resource industries created dozens of sprawling little towns with shrinking populations. The root of the problem is that the system was designed for the 19th century. Our Fathers of Confederation had no idea what the 21st century Canada would look like.

Trains were the coming thing in 1867. There were no automobiles. Sewer systems were still exciting. Chlorinated water was unheard of. You could drink safely from most streams. Outhouses were standard, hospitals were deadly, schools were minimal and doctors made house calls.

There were no income taxes and no GST. Colonial governments survived by selling off timber and mineral rights, peddling land to immigrants, and collecting tariffs. Is it any surprise they came up with a system that doesn’t fit the 21st century?

The problem today is an outdated fiscal system. More than 80 per cent of the services were delivered locally. Local school boards, local hospitals, and local roads were local responsibilities.

Local governments depended on the property tax to pay for the services they provide. Although property tax rates have risen, economists Harry Kitchen and Enid Slack have shown that the cost of municipal services have been growing faster. There is now a massive fiscal imbalance between the province and local governments.

Today, municipal governments pay for transportation (roads and transit), protection (police and fire), environment (water, sewers, and solid waste), and social services. They are involved in public health, social housing, recreation and culture, and planning and development. During the 1990s, the Harris government made a bad situation worse by downloading social services and uploading revenue sources. No wonder bridges and water systems are crumbling. Local government has the responsibility, the province has the revenue

Northern communities are having an especially hard time. Mines, mills, and logging operations are often on provincial land. Municipalities can’t tax provincial land. Even rural farming municipalities in the south have economically productive farms as part of their tax base.

Farming communities grew because farmers plowed income back into their farms expanding the tax base. Mining companies and the province simply took money out of the North. For at least 50 years mining communities have been asking the province to adjust the tax base, with little success.

Provincial politicians are a problem. No wonder Ontario mayors, led by Toronto’s mayor David Miller, are begging for a share of the sales tax. (They are also begging for a share of the gasoline tax.) They have a good case. Compared to American and European cities, they have fewer ways to raise money. Some can levy income taxes, others have a sales tax, or a gas tax.

Ottawa doesn’t want to hand out money to cities and towns for three good reasons. First, municipalities are a provincial responsibility. Second, even if Ottawa turned a share of the GST over to the towns the province could simply claw it back by cutting grants.

Squabbling senior governments are a problem. The third reason not to give money to municipalities is the power of local voters. Local politicians are sensitive to political pressure when it comes to taxation. Voters always like to believe they can have roads, sewers, and snow plows without paying for them. Local councils are pressured to lower taxes for good reason. Taxes really are high because mentalities have to pay for too much with the property tax.

Northern voters are a problem too. Local governments in the North are not innocent. They should have more revenue sources or fewer responsibilities. But they run a property tax system that is inefficient and hurts northern development.

Why do municipalities tax buildings?

One important principle of taxation is that you get less of what you tax. It is human nature. Northern cities need more construction and more investment in homes and commercial buildings. So why tax buildings? Northern cities also need to encourage people to live closer to each other because it is very expensive to service a small population on a lot of land. Both principles tell us it would be wise to shift taxes from buildings to land. Land can’t run away or fall down. Buildings do.

Taxing improvements is especially foolish for mining communities. Mining companies often avoid taxes by tearing down unused surface buildings or moving facilities underground. Towns lose revenue and buildings that might be used to start new businesses become uneconomic. Councils that don’t understand taxes choose bad taxes.

Why do municipalities tax jobs?

Municipalities say they want more businesses. So why do they tax industrial and commercial land more heavily than homes? The answer is purely political. There are more homeowners than business people. Homeowners vote to make commercial and industrial owners subsidize their services. Northern communities are worse than most this way.

The North should have one tax rate for all types of property. If industrial or commercial owners need extra garbage collection, street-cleaning or other services they should only pay for what they use through commercial user fees.
If Northerners had the courage to make these two changes northern communities would be much more attractive to businesses.

Why don’t municipalities maximize property values?

Economist Henry George had a simple rule when it came to municipal taxation: local governments should try to maximize property values. The value of a piece of property depends on the community and what the community does. The local government is doing its job when it adds value to property! After all, the value of property is just a measure of how much people want to live nearby.

This insight leads to a simple rule for city councils. Never approve a project unless it increases the value of the land and future taxes by more than it costs. Or conversely, always approve a project if it increases the value of the land and future taxes by more than it costs.

Unfortunately, municipalities are “creatures of the province” under the constitution. The province doesn’t allow municipalities to use the Henry George Rule. They can’t collect fair value for what they produce. When taxpayers pay the bills, landowners usually get the capital gains. As a result, the councils invest less than they should, and communities are less attractive than they would be. This is a problem only the province can fix.

Good taxes and schools

Convenient schools contribute to the value of your property. They also contribute to the workers' earnings and productivity. Logically, schools should be partly paid for from property taxes and partly from income taxes. As the number of children falls the school tax should decline and the share paid from income taxes should rise. After all, when there aren’t enough workers' wages will rise. An aging northern population should see falling school taxes.

Both taxes are provincial responsibilities. What is taught in northern schools is also a provincial responsibility. For some reason the province seems to have no interest in training northerners to run Northern Ontario. How many of our children can tell a fir tree from a pine tree? Or understand how paper is made? How many understand international metal markets? Because northern Ontario doesn’t receive any income tax revenue and can’t control its education system, the North can’t invest to maximize northern productivity.

A different mindset for tax collectors

The rule for doctors is “do no harm.” The rule for tax collection is to do as little harm as you can. Taxes on industrial buildings reduce employment. Taxes on fuel reduce pollution. It would make sense to shift the tax burden from land improvements to pollution but it can’t be done. A carbon tax would be provincial. The land tax is local except for schools. This is another problem only the province can address.

The North needs the province to sort out the entire dysfunctional tax system for the whole region. Don’t tinker, FIX IT!

Here in Northern Ontario we have additional issues. A special approach is needed for our resource economy, where minerals are finite, and communities vulnerable. Some of the taxation windfall from high commodity prices must be invested in building sustainable resource communities.

“The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”
J.B. Colbert, Finance Minister to Louis XIV

The funding imbalance that we in the North see is unfair. Earlier today there was chart at the front that showed the Provincial funding since the CRF was replaced by the OMPF (Ontario Municipal Partnership Fund). Yesterday speakers talked about the money that has left the north in the form of taxation on minerals and forestry. The Provincial-Municipal Fiscal and Service Delivery Review is happening now. FONOM can and needs to ensure that the North will finally receive our correct share. There are several groups working on the issue of youth out migration and we would hope to help coordinate those efforts. There will also be other issues we will hope to champion. The FONOM board also spoke about those hundred little organizations and what they are doing and their challenges and we wondered aloud how we could help and if we should help. The answer was, we can help and we should. Therefore we are taking the incentive to organize a Leadership Summit. The Summit will be held in Sudbury on October 19th and 20. We will be inviting everyone that cares about the survival of our future here in the north. To start, the list includes Federal, Provincial and Municipal Leaders. An invitation will be sent to the newly elected Premier, our sister organization NOMA and business entrepreneurs and leaders will be forwarded though the Chambers of Commerce in the north. Also the Presidents of the Universities and Colleges, Chairpersons of Boards of Education and Hospitals will be asked to attend along with our partners in the Aboriginal communities. And that’s just to start.

The Summit’s goal will be to get everyone I’ve just mentioned along with those hundred organizations and their pebbles to the table. We believe this is possible, because we all have the future and prosperity of the north as our main objective. We will find a way to work together, with the hope of forging a boulder that we can hurl at Queen’s Park, so we can start to get results on our common issues. I know not all communities and groups always play well in the same pond, but I can tell you that the FONOM Board proudly works together. We don’t always agree on every issue, but we passionately believe in the North. The board has privately spoken with several individuals about the Summit and the response has been overwhelming. And the comment has been that this summit has to happen and it’s about time.

Details such as the cost and the agenda are still being worked on. A committee of FONOM has been struck and we are inviting partners to assist us. We look forward to providing you with more details soon and anticipate your support.

Related to this discussion, I want to share with you a proposed new mission and mandate that the FONOM board is recommending to its members.

The Former mandate and objectives of FONOM were:
“To join and work together for the betterment of municipal government in Northern Ontario and to strive for improved legislation respecting local government in the north.”

The New Mission and Mandate of FONOM being recommended is:
“FONOM is the voice for the people of northeastern Ontario communities. Our Mission is to improve the quality of life and to ensure the future of our youth.”

The new mission demonstrates the board’s commitment to:
• Be more proactive as an Association on behalf of its members.
• Develop relationships and increase the prominence, significance, importance and reputation of the Association.
• Strengthen its ties to its member communities through increased communication and meaningful member involvement.
• Host forums for the discussion and resolution of current and emerging issues that bring provincial, municipal and First Nation elected officials together.
• Focus on limited and specific issues.
• Embrace its role as an advocate and change facilitator.
• Continue to serve as a negotiating vehicle for improvements in provincial and federal legislation, programs and services.
• Increase communications and strengthen relationships with Provincial Cabinet members, Opposition leaders, MPPs, Federal Ministers/Departments with northern, rural and community interests.
• Identify and foster contacts with First Nations and other groups who also work for the betterment of northeastern Ontario.
• Raise the Association’s public profile through media relations and promotion.

The new mission reflects the Board’s belief that the Association is about more than inanimate concepts such as “municipal government” and “improved legislation” but is about people, northern life, and the future of both.
On behalf of the entire FONOM board, we look forward to continuing the dialogue we’ve started with you here today in the near future.

You know, I’ve been watching the ebb and flow of the Northern Ontario economy for nearly 35 years. In 1977 I was honoured to co-chair one of the first local economic initiatives in Northern Ontario called Sudbury 2001, which sadly dealt with many of the same issues we face today. I have published newspapers in Ignace, Thunder Bay, Nipigon, Terrace Bay, Schreiber, Sturgeon Falls, North Bay, Little Current (Manitoulin Island), Sudbury and Parry Sound along with Northern Ontario Business, the Sudbury Mining Solutions Journal and the Northern Ontario Medical Journal. These investments have given me a bird’s eye view of the trials and tribulations of the Northern Ontario economy from many different vantage points.

I believe passionately in the importance of trying to preserve a way of life in Northern Ontario that is healthy, sane, civilized, internationally competitive, and above all else, sustainable. To do this the people of Northern Ontario are going to have to take some responsibility to get it done. The senior levels of government, although they don’t wish us any ill-will have other fish to fry. If anything is going to happen, the people in this room must facilitate the change and undertake to do the work necessary to make it happen. We need to change a culture of dependency into a fearless, creative, resourceful and confident society that takes responsibility for itself.

In macro terms our problem is not that complicated. We live in a unique economic zone. We have little in common with the Golden Horseshoe, with the farm country of the southwest, with the auto economy stretching from Oshawa to Windsor, with the government and high-tech economy of the Ottawa Valley, with the tourist economy of central Ontario or for that matter, the less-fortunate, hard-scrabble of southeastern Ontario.

We have a resource-based economy. It demands unique training and education, independent tax strategies, special energy planning and pricing, modern mining and forestry thinking, special immigration initiatives and, not surprisingly, independent political and institutional structures.

To no one’s surprise in this room, we have no jurisdiction over any of the above….hence the historical tension between the North and the South.

I believe incremental change at this point is a waste of time. The reason is that it does not go to the core of the problem. The difficulty is that the people in Northern Ontario who make their living from extracting minerals or harvesting wood or working in some sector related to the two, are completely disconnected from making intelligent decisions about their economic future. They can’t realistically influence school or university curriculums, they can’t implement tax policy, they can’t determine major economic investments by the government, they have no veto power over mineral policy or forest policy and, most importantly, have no money to do any of this even if they could. It is impossible to build a holistic approach to sustainable development in a resource economy if you are governed by people who live in a service economy.

It’s like deciding to ban the spring bear hunt from your condo in Toronto when the last bear you saw was plastic and on your mantle piece, and not in your backyard looking for food.

I don’t want to overdo this, but let’s be honest.

We have a forestry industry that is in disarray. We have a business model that is no longer competitive, and we need to make massive investments in transferring our focus from process innovation to product innovation. We need a sea change in our strategy, our investments, our land tenure arrangements with forestry companies, our education infrastructure to support a value-add strategy, and our tax regime. Additionally, it would be helpful if we weren’t still sending raw logs to Quebec so they can add value over there.

On the mineral side, we are riding high with brilliant commodity prices, but it doesn’t mean we are one step closer to a sustainable economy. We have just permitted the sale of our two largest mining companies to foreign interests with not so much as a whimper. This is catastrophic to our long-term interests. The federal government thought this development was just fine and the provincial government pulled the sheets up over their heads and hid. To be candid, they have no idea what this means to our economy. Presumably they think the government of Brazil has close ties to CVRD Inco so it can support economic development in Canada and not Brazil. The whole thing preposterous if not treasonous. The impact on the supply change by northeastern Canadian mining supply companies is what is at stake…and this is everything.

The most important thing we can do in our mining economy is invest heavily in our mining supply and services cluster in northeastern Ontario. Among other things, we need a strategy to make sure every supply company is not bought out and moved somewhere else. In the last three months three highly innovative supply services companies have been bought by German interests. When are we going to learn the most important job we have in Northern Ontario is to preserve local ownership and help facilitate succession planning to keep it in place. Locally owned innovative businesses are the lifeblood of our future. Without them we die.

This economic imperative is not on the radar screen from that condo in Toronto. It is up to us and I don’t think we have really understood how critical local global companies are to us.

It is unrealistic to expect a powerful northern strategy to emerge from Queens Park and even more unlikely it could be sustained from there. The action needs to move north.

My own preference is for a regional government that would take over much of the province’s and the federal government’s programming responsibilities in the North related to economic development. It needs to be said the regional government would take over provincial mandates. It would not concern itself with municipal jurisdictions and it would not hire a whole bunch of new people. They are already in place. We just don’t know what they are doing?

In short, instead of asking Louise for money, let’s hire her as CAO for the Northern Ontario Regional government. She wouldn’t have to travel so much and it would be less overhead if we consolidated the Heritage Fund and Fednor under the same northern roof.

Just as important as having the ability to make decisions is the ability to fund the intellectual capital we need to plan a sustainable economy. Right now nobody is doing it. There is a patchwork of activity at the community levels in the north and there are some real breakthroughs. In Sudbury, the Northern Center for Advanced Technology is world-class. In Thunder Bay, the molecular medicine initiatives are first-rate but this isn’t nearly enough.

You can’t create a healthy economy if you don’t imagine it first. Imagining doesn’t come cheap. You need some of the best thinkers in the world and you need a comprehensive relationship between the regional government, the private sector and the colleges and universities.

Let’s start with some baby steps today.

Baby step #1) Establish a Northern Ontario Regional Government Secretariat to begin the process of recommending to the senior levels of government how to realign responsibilities to create a sustainable economy in Northern Ontario. Don’t ask Fednor or the Heritage Fund to underwrite the exercise. I hope I don’t have to explain that. I suggest a $500,000 annual budget assessed on the basis of population to each major city in the North. Smaller communities should have representation but not be asked to contribute money. The money would fund the work that needs to be done to put solutions on the province’s desk. There is no point whining unless you have a well-researched plan to recommend. The minute you ask someone else to either do your thinking or fund your thinking, you have lost the initiative; you are second-tier players.

Baby step #2) Request both the provincial and federal governments provide a comprehensive audit of what they do and what they spend and what they collect in Northern Ontario. I doubt they collect more than they spend but it would be interesting to find out. Most importantly it would allow us to begin to think about how and where to redirect funding and responsibility so we get aligned and productive.

Baby Step #3) Set up an annual political assembly (not necessarily all that different from the meeting today) to meet at the same time each year to assess progress on the road to sustainability. It would bring together northern MPs and MPPs, whatever their party affiliation, members of FONOM, and hopefully more and more members of the academic, business, aboriginal, and labour communities each year. The problem we need to address is that we have set no economic goals as a region, and we have no mechanism to measure our success, even if we had goals. An annual meeting focuses the mind. Instead of measuring the wait-times for knee surgery, we need to measure economic growth in the value-add part of our economy. The Assembly needs to record and measure specific initiatives on driving to sustainability. Sharing best practices is a powerful way to build support and esprit de corps.

This is a good time to get serious on these measures for a number of reasons.

A) Right now we have the most alert, sophisticated, and talented group of mayors at the major city level than we have ever had. I know each one of them and respect their talents immensely. I know they can lead this kind of initiative.

B) The province, with the City of Toronto Act, has shown it realizes it must unleash and empower its regions to be competitive as a province.

C) David Caplan’s Infrastructure Renewal Ministry is beginning to look at how to power up the regions of Ontario. In fact, Northern Ontario is next on their list. No doubt they could do some of the necessary audit work to give us some baseline material on what programming is actually being done in Northern Ontario

D) The Premier has demonstrated his direct interests in innovation and commercialization becoming the Minister of Intergovernmental Affairs. He is well aware of the economic problems we face in this province.

E) It would appear the people in this room are ready. This is a special meeting called to consider the challenges we face. It is a good omen for the frame of mind our communities are in.

F) Fednor has just invested substantial funds in Woodworks, a group working hard on value-add wood projects in northern Ontario. This is a good omen.

Now before I wrap up let me just say this. Many of you are thinking, “Oh my God, not another layer of government! Why can’t we just push the province a little harder, and make due with improved governance?”

The answer is very simple. It doesn’t work.

The changes we make, we make for ourselves. We can’t change ourselves if we are still have no power over anything that matters.

In doing this, we change our culture from one of dependency to responsibility. We move from whining and complaining to organizing and executing. We move from a reactive community forever asking permission, or seeking information, or applying for a grant, or being extra polite so we don’t endanger a grant to a proactive society where we make our decisions and live or die by the result. In short we move from plastic bears on mantel pieces to real bears who hunt and are hunted.

Today, as we speak, there are families walking away from their homes—from Atikoken to White River. Hundreds of other families are sitting on tender hooks wondering if they are next.

If we had transformed this economy 20 years ago this would not be happening. We would have a design culture not terribly unlike the Scandinavian countries rooted in design and a love of wood. there would be ups and downs but not a mass shutdown because the dollar is up as is the price of energy.

Why can’t we do the hard work to make this happen? It is in our hands and in our control to change our approach.
If change doesn’t happen today with the people in this room then it will not happen again for a generation.

This week Frank Stronach who has hated unions all his life signed a memorandum of understanding with Buzz Hargrove the President of the Canadian Auto Workers one of the toughest most dogmatic union leaders in Canada. Buzz agreed to a no strike provision for the first three years. This is unheard of compromise on both parts.
They found common ground because the auto sector is melting underneath their feet and if they don’t work together they will die apart. Buzz agreed to no strikes and Frank agreed to support them coming into his plants.
Surely the leaders of Northern Ontario can do no less.

The time is now.

Electricity prices are the hottest topic. When Northern Ontario has a surplus of cheap hydro power, why should Northern industries pay southern prices? Northern Ontario competes with Manitoba, Quebec, and the United States,
which have lower power prices. The North has lost jobs as plants move to regions with cheaper power. Does it really make sense that one region that exports power should be losing jobs to another region that exports power?

The Northern Ontario Large Urban Mayors have called for a regional pricing policy. The government commissioned a study of regional pricing that concluded it would have little effect on Northern prices. The province rejected regional pricing, but it is providing a temporary subsidy for the largest pulp and paper plants.

Does regional pricing make sense? In the long run it does not make sense to depend on cheap electricity. The major trap around electricity prices is the danger of spending money subsidizing industries that are on their way out, instead of putting resources into the future economy.

Additionally, it needs to said that the power from Northern Ontario is cheap and clean, yet the region derives only modest benefit from this gift to the province. There needs to be some realignment.

To see how seriously Ontario has fumbled on energy planning, consider the fact that on July 19, 2005 the cost of importing power reached 39 cents a kilowatt hour, seven times what consumers were paying. New England states could provide power to Ontario because they had added 8,000 megawatts of generating capacity between 1999 and 2005. That's equivalent to about one-third of Ontario's total capacity. In 2005, Ontario was helping them pay for that new capacity. Northern energy exports, according to the Northern Ontario Large Urban Mayors, could be an important source of new revenue for the North. Ontario has approximately 190 potential hydro power sites, mainly in Northern Ontario, that could collectively generate 7500 MW of power.

Expanding hydro doesn't help us very much if it doesn't come with a specific Northern strategy. Power is a low-value commodity unless you own it or put it to work doing something that helps you develop. Resource companies historically had good reason to build their own power facilities. It insulated them from potential grid problems and more importantly external price hikes. They could predict their energy prices and plan accordingly. So there is a big difference between building power for a specific economic purpose in Northern Ontario and building a plant to contribute to the grid. The problem today is southern Ontario is outbidding Northern wood and pulp companies for Northern electricity. Some resource companies (Tembec, Abitibi Consolidated) are now separating their energy businesses from their resource business, so they can close or downsize the resource business without losing benefit of the cash flow from power. It is a classic choice between the welfare of shareholders and the welfare of Northern communities.

So, with today's structure, additional power in Northern Ontario creates few jobs and when power is exported and an external agency gets the revenues, little local development ensues. The cost of new transmission lines for most Northern sites would call for a huge investment.

Increasing hydro production doesn't automatically make power available more cheaply to Northern industry. The main role of Northern hydro exports is to supply peak power to the south. In effect, Northern Ontario is serving as a battery for the south.

Northern Ontario won't gain much by developing its untapped hydro potential. If we assume that benefits are shared equally among all the people of Ontario, only about seven per cent of the benefits return to the North. Almost all the environmental damage occurs in the North. In exchange, we get construction jobs when dams and transmission lines are built and a few permanent jobs maintaining and operating the facilities. Expanding hydro power won't add much wealth to the region.

But it could. If we look at hydro power as monetizing a natural resource, which is what it is. Northern Ontario deserves a piece of that wealth. It is part of the equation of what comes in and what goes out. Ontario Power Generation is making a lot of money on its relatively cheap Northern hydro power. New plants can be built and a new financial arrangement can be made.

There are exceptions to the current lack of benefits. The Pic Mobert First Nation has developed generation facilities and is able to drive community development using the revenues and the new access to power.

Providing power for the south is good in principle, but it shouldn't be a major priority for Northern policy makers. There is almost nothing in it for Northern Ontario.

Wind is a promising source. The major economic advantage of electricity generated from the wind is that the power plants can be owned by Northerners. The benefits of private power generation would then stay in the North. The North Shore of Superior provides the biggest opportunity to harvest wind power, but there are two problems. The wind doesn't always blow when it is needed, and transmission capacity is limited.

Can wind power justify expanding the transmission system? It is still hard to tell. Pumped storage may be the answer. It allows producers to bank wind power until it is needed. Wind power is used to pump water uphill to hydro dams when the price is low and the water is used to generate electricity when the piece is high. The method is used in many parts of the world and there are numerous opportunities for such applications in Northern Ontario. The problem is in co-ordinating dams, windmills and transmission systems over great distances. Pumped storage may help us deal with energy challenges in the coming years when the water supply is low, making existing dams more productive.

Bioenergy is getting a lot of attention as well. Bioenergy schemes are basically about turning wood into energy. The traditional method was just to burn the wood. Natural gas and electricity replaced wood in most places, being safer, cleaner, and usually cheaper. The major problem is that wood is too valuable to burn. With some of the newer technologies, even branches can be debarked and chipped for paper or other products. Much of the waste wood is already used in co-generation plants. Scrap piles and sawdust heaps provide a promising source of wood waste in the short run.

In general, it is more efficient to burn wood directly, than to convert it to bio-diesel or alcohol, but liquid fuels can be used for vehicles. It seems likely that locally produced bio-fuels might replace diesel and gasoline imports. That will only happen if Canada adopts an aggressive carbon-emission reduction policy. The federal conservatives have virtually promised not to do much about carbon emissions, limiting the opportunities. Finally, bio-fuels are much less environmentally friendly than electricity.

In the long run electricity prices are limited by the lowest cost source. The lowest cost, lowest carbon alternative will be fourth-generation nuclear plants. They would not be fully on stream until the 2020s at best, leaving a window for bioenergy projects.

In the long run Ontario will need to expand electrical generation to replace fossil fuels used in transportation and heating. The hydro and wind resources in Northern Ontario can only supply a small part of the newly required capacity. Most scientists and economists believe Canada will have to introduce a carbon tax soon and will have to increase it every year for at least a decade.

Suffice to say energy is going to be a hot spot for years to come. We need to deal ourselves in. Below are some recommendations.

Northern Energy Recommendation #1: Energy is important. As with most of our economy we have little influence over decisions that have great impact on our lives. We must establish a Regional Power Authority to review energy systems and make recommendations for improvement backed by the political will of the North. The status quo is unacceptable.

Northern Energy Recommendation #2: Delay expansion of north-south transmission lines until regional energy authorities have been created and power supply and transmission capacity decisions can be made that take regional interests into account.

Northern Energy Recommendation #3: Support hydro power projects developed by First Nation communities.

Northern Energy Recommendation #4: Transfer smaller hydro systems to communities to provide revenue and local development opportunities. The revenues will stay in the North.

Northern Energy Recommendation #5 Encourage municipalities, where there is opportunity, to consider hydro development projects in partnership with the private sector. All energy strategies need to be accompanied by industrial strategies or it isn't worth the effort.

Power and the people of WAWA: Bill 140- A cautionary tale

In 1983, Great Lakes Power brought forward a proposal to develop new dams on the Magpie River near Wawa. The company got support from the municipality by claiming it would add to the tax base, create jobs, and provide reduced power rates for businesses. With the new dams, Great Lakes Power was 50 per cent of Wawa's industrial tax base.

The company set out to get its assessment reduced. It claimed it was paying too much business tax, that dams should be assessed at 40 per cent of their value instead of 60 per cent, and that the dams were overvalued by 50 per cent. The effect would be to reduce the taxes owed by 66 per cent. And Wawa would owe Great Lakes Power close to $15 million for taxes wrongly collected.

In 2000, Bill 140 took away the rights of municipalities to tax power assets. In compensation, Wawa got an annual payment based on the 2000 assessment. An inflation adjustment was added for 2006-7.

The issue has been handed to the review of municipal finances undertaken by the province in conjunction with the Association of Municipalities of Ontario. The review is focused on downloaded social welfare costs and the dams question may never reach the agenda.

Northern Ontario's hydroelectric facilities (for the record)

Large hydroelectric
Abitibi Canyon (Abitibi River)
Harmon (Mattagami River)
Hound Chute (Montreal River)
Indian Chute (Montreal River)
Kipling (Mattagami River)
Little Long (Mattagami River)
Lower Notch (Montreal River)
Lower Sturgeon Falls (Mattagami River)
Matabitchuan (Montreal River)
Otter Rapids (Abitibi River)
Sandy Falls (Mattagami River)
Smoky Falls (Mattagami River)
Wawaitin Falls (Mattagami River)
Aguasabon (Aguasabon River)
Alexander Falls (Nipigon River)
Cameron Falls (Nipigon River)
Caribou Falls (English River)
Ear Falls (English River)
Kakabeka (Kaministiquia River)
Manitou Falls (English River)
Pine Portage (Nipigon River)
Silver Falls (Dog River)
Whitedog Falls (Winnipeg River)
Arnprior (Madawaska River)
Barrett Chute (Madawaska River)
Calabogie (Madawaska River)
Mountain Chute (Madawaska River)
Otto Holden (Ottawa River)
Stewartville (Madawaska River)
Small hydroelectric
Coniston (Wanapitei River)
Crystal Falls (Sturgeon River)

For your say come to www.rethinkingnorthernontario.org.

Next month Taxation.

Keeping energy revenues in the North is good for the south. Money always flows south eventually, so the more that gets spent in the North the richer the south will be.

The overall discontent about the North's economy and the limited power to do anything about it seems to have reached a saturation point. The region is ripe for change.

Michael Atkins, president of Laurentian Media Group and Michael Gallis president of Michael Gallis and Associates both spoke of decentralizing the levels of decision making power so the North can control its own economy, particularly with respect to the natural resource sectors.

From a PowerPoint perspective Gallis provided a graphic view on how far reaching communities can be from a marketing standpoint, given the right economic conditions. Conversely, he explained how diluted activity can be when the central forces of power are too far away to make any sizable impact.

The idea of taking control of the region’s destiny appeared resonate through the morning and afternoon sessions with councilors, mayors and reeves supporting a need for change.

“We are ready for this kind of discussion,” John Rodriguez, mayor of Greater Sudbury said with Sault Ste. Marie mayor John Roswell echoing the same sentiments.

The morning presenters gave Timmins mayor Tom Laughren food for thought.

“Michael Atkins has certainly made me think and we could have something to build on,” he says.

Just before the presentations took place, all five Northern city mayors met for a breakfast meeting to discuss this exact issue. No resolutions were made during the event, however, the FONOM council will meet again Nov 11, to determine the direction the organization will take.

“This will be something people will talk about over the next couple of days and months,” Laughren says.

Links

Text of Michael Atkins' speech - Oct 18, 2007, Timmins, ON
Remarks by Mac Bain, Second Vice-President, FONOM - May 11, 2007

Video

]]> http://blogs.northernlife.ca/matkins/2007/10/northern_leaders_economic_summ.html http://blogs.northernlife.ca/matkins/2007/10/northern_leaders_economic_summ.html Mon, 15 Oct 2007 13:46:27 -0500 In this our third edition of “Rethinking Northern Ontario” we zero in on Forestry. We have so many riches and yet we are trapped in a commodity infrastructure that leaves us vulnerable and exposed to currency fluctuations, and price pressures that are rapidly making us uncompetitive. Our primary response is to artificially cap energy prices, which is only one of the inputs. This might be a reasonable short-term strategy, but it is not sustainable over the long haul. We need to rethink what we do.

Despite the ongoing travails of the forestry crisis, there is one unavoidable fact about the future of Northern Ontario: it will continue to feature wood. A large fraction of the income flowing into Northern Ontario will be a result of the wood and wood products we send out.

How much we get for that wood will increasingly depend on how much we add value to it. It is no longer enough to be “hewers of wood”.  The number of people that live in Northern Ontario will ultimately depend on how much value we add to the wood we grow.

Moreover, the concept of value-added must be extended to everything we do in the North.  How do we become a “value-added society,” not only with respect to forestry, but also health, education, services, mining and retail.

The Mystery of Value-added
 Understand value-added properly and you have the key to economic development. Value-added is really just human labour. A tree in the forest has no value. It may have monetary value, for example, someone may be willing to pay for it. It may have social value in that it provides oxygen to a choking planet, but it has no value added in economic terms unless you have been fertilizing it, pruning it, or building roads to reach it.

Strange as it seems, if you cut down that tree, you add value. From the point of view of the trucker that carries it away, that tree is worth more lying on the ground limbless and ready to be transported than standing majestically in the sun. Move it to a mill and you have added more value.  Saw it into two-by-fours or chip it and you have added value yet again.

The absolute minimum value we can add to a tree is to cut it down and ship it to Quebec or the United States. 
When America imposed the Dingley tariff on lumber in 1887, Ontario responded with a “manufacturing condition” that required logs to be milled in Ontario.  That was the last really effective legislative initiative that Ontario has promulagated to demand higher value from our forests. We were settled as a resource extraction colony and continue to be mired in its aftermath.

Most of the northern Ontario forest industry is still producing commodities that come close to the minimum feasible value-added. Pulp paper and saw-lumber have to compete with similar low value products from around the world.
On the other hand, Finland provides an alternative model – the Finn’s have been moving into products with more and more value added since the 1980s. Quebec, too, has learned the lesson.  While only 10 per cent of Quebec’s wood goes to the value added sector, that 10 percent earns as much for the province as the 90 per cent exported as basic commodities.* ( Dr. Luc Bouthillier, Université de Québec a Laval)

We have no choice. We smarten up or we perish.
The most striking feature of Ontario's forest management system today is that it has failed to generate progressive and sustainable, forest-based economic development in Northern Ontario. Instead of using the resource wealth to build the base for a new economy in the North, we ship our resources, jobs and thus our children beyond the region for others to benefit from.

Wood-based value-added industry is concentrated in southern Ontario and outside of Canada. Forestry firms report many of their mills are outdated and unprofitable. The North started with an enormous resource base, yet somehow we have ended up getting poorer, not richer.

We’ve never stopped to see what it would take to change our assumptions, our habits and our vision from a traditional resource extraction economy to a proactive, innovative solutions-oriented society.

The forest is not owned by Northerners, so the profits don’t stay in the North. The farms of southern Ontario are owned by farmers who live in the south and the value created by the sun falling on corn plants – the value of the natural resources goes to the farm owners. They invested in equipment, houses and businesses in the south. They developed an industry producing farm machinery. In fact, farm machinery production laid the basis for the auto industry.

Over the course of the 20th century, the rents and returns from Northern resources funded the growth of Toronto, built southern universities, and helped create the Toronto Stock Exchange. Little of this wealth stayed in the North. After a century of business as usual, the major mines are now owned by foreign firms, and the financial sector is pushing to privatize the forests. Before long there will be no way to capture a fair share of the resource wealth for the North.

Canadians are not likely to accept privatizing the forests. Even if the forests could be privatized, foreign interests could soon acquire them. Is there another way to get local control and make sure that profits are recycled in the North? The community forest movement provides one promising avenue.

There is no exit from the under-development trap without shifting to a land tenure system that will support economic development. Of the three obvious candidates, corporate ownership, small holding, and community forests, only the community forest approach is likely to both support development and be politically acceptable.
 A community forest is essentially a forest operation that is managed by a local or regional government, a community group or First Nation with the goal of re-investing revenue back into the community managing the operation.  It is time to diversify the land tenure system in Northern Ontario by creating some community forests and give them the opportunity to add value and do better.

There are basically two questions that need to be answered. What will we do and who will do it?
We have some proposals.

Value Added Policy Proposal No. 1
Create a Value Added Secretariat tasked with envisioning how we move Northern Ontario’s economy from a commodity-based model to an innovation based value added model.

The challenge is to change the culture and invest in the future. It is a long-term orientation and is done by revamping and aligning educational priorities in Northern Ontario. This idea needs to be shaped and sold to the people of Northern Ontario.

Value Added Policy Proposal No. 2
Create a commission to promote community forestry.

We need a commission because in Northern Ontario, we can’t see the forest for the trees.

The North is dominated by big companies (most of them losing money) and big government. Neither party is in any mood to think creatively. They are either trying to survive financially or respond politically in crisis mode to layoffs.

They end up only doing what they have always done. For the province they will cap (read subsidize) energy costs to further empower a losing commodity business model and the companies will consolidate, close plants, and lay off people until they get to something that works for them.

The idea of the potential for community forestry as a replacement at least in part for the commodity strategy has to come from a well funded independent voice tasked with the job of researching and evangelizing the idea to a populace that has known nothing, but commodity strategies. This approach worked when power and the Canadian dollar was cheap, and wood plentiful, but it is bankrupt in today’s marketplace.

The future means more work, a higher degree of sophistication and creativity and a change in mindset.
The commission needs to set a goal of increasing community forest acreage by one per cent a year for seven years.

Value Added Policy Proposal No. 3
Concentrate provincial research, training and postgraduate programs in forestry and wood research in Northern Ontario.

As part of this process, promote wood-based design and construction throughout Northern Ontario, especially for all municipal and provincial buildings.

We need to move the preponderance of Ontario’s intellectual capital related to wood to Northern Ontario. It makes a big difference.
 
Value Added Policy Proposal No. 4
Develop local management capacity in the North by transferring the Ministry of Natural Resources to Northern Ontario and devolving elements of forestry management to municipalities.

 Wood is our business. In other parts of the province it is less central to the economy. We need to be trained, mentored and taught in the North. Northern resource management and policy development needs to be closer to the resource.

Value Added Policy Proposal No. 5
Shift to a public policy of a value add model and allocate resources accordingly.

Our companies are big commodity brokers.

While there are some advantages to being big, it can also be a deadly combination. Research shows that large resource companies invest more in process innovations, than in product innovations.  It is product innovations that adds the most value. Process innovations are usually aimed at reducing costs and they end up reducing employment.

The forest companies are not to blame for this situation. They get rid of workers to increase profits. Their competitors do the same thing. It is a vicious circle.

Forestry companies cannot be expected to provide all the solutions. In fact, pulp and timber companies have reason to be reticent. They need all the forest they can get and giving anything up will not be well received. It is for the province to decide what is best for its citizens and allocating resources to value added initiatives only makes sense.

Northern Ontario needs a high intensity strategy to develop a value added wood-based industry. The most progressive ideas are in Scandinavia.

In Finland, in a recent initiative called Value Added Wood Chain – Increasing the Added Value of Finish Wood Products they established 193 separate projects related to creating wealth in the value add wood chain. One hundred and forty-five were embedded in private enterprise and 48 in government or institutional settings. The success of Norwegian furniture companies that base their products on natural wood and stone etc. is well known.
Our business mentality is holding us back. We need a major change in focus.

Value Added Policy Proposal No. 6
 Create a Northern Ontario School of Industrial design to help develop quality value-added products and create a Northern Ontario School of Architecture to attract design talent and help create a design based export sector.

Basic trade theory tells us that regions export surpluses. We have lots of wood to export. Value-added theory tells us that adding value means adding human talent and time. It means adding design and fabrication skills.  Northern Ontario does not have a surplus of designers or highly skilled fabricators. In fact, research done for the provincial government shows that Northern Ontario has a serious shortage.

If we want to move up the value chain, Northern Ontario has to develop its own designers and fabricators. We require our own product innovators. We have to get to the point where we have more than our share of creative people working with wood. Our own creative people become the source of new value added innovations. This is a central requirement for northern economic development. The primary job is to align our education system from post secondary to high schools and junior grades with a curriculum that excites the imagination about working with and inventing new products made out of wood that will make real money.

Next month. The question of energy

]]> http://blogs.northernlife.ca/matkins/2007/10/without_radical_change_we_shal.html http://blogs.northernlife.ca/matkins/2007/10/without_radical_change_we_shal.html Wed, 10 Oct 2007 10:32:52 -0500 ]]> http://blogs.northernlife.ca/matkins/2007/09/tvoorg_ontario_votes_2007_nort.html http://blogs.northernlife.ca/matkins/2007/09/tvoorg_ontario_votes_2007_nort.html Thu, 27 Sep 2007 18:20:10 -0500 With this second edition of “Rethinking Northern Ontario” we come to the central question “governance.” You can’t grow up, whether you are a kid or a political entity, until you are accountable for your actions. Northern Ontario has little jurisdiction over anything that matters. This needs to change.

All the principles of good government - sustainability, democracy, decentralization, efficiency - call for local power. A sustainable community has to have responsible government and a devolution of power to local or regional authorities is the way to accomplish this. Note the recent announcement of a regional government created for 10,000 Inuit in the northern Quebec. Surely, 800,000 Northern Ontarians can also handle more responsibility!

What is required is a Region of Northern Ontario Act patterned in part after the British Sustainable Communities Bill. We are asking members of the provincial legislature, particularly those seeking office in Northern Ontario, to read it.

Britain’s Sustainable Communities Bill Passed ITS SECOND READING ON JANUARY 19, 2007. The version for the third reading is available on the web. It began as a private member’s bill and was introduced by a Liberal Democrat MP, Julia Goldsworthy, July 2006. Private member’s bills rarely succeed, but the Sustainable Communities Bill became an all-party affair. Four hundred MPs of all parties signed a parliamentary motion backing it. It won the support of 1,000 councils, 300 local organizations and 80 national organizations.

What does the Bill Do?

The bill makes it a duty of the senior government to assist local authorities to become sustainable. The government must help any local authority or even any smaller area under local authority to improve the economic, social (which includes participation in civil and political activity) and environmental well being of the area.

The British version makes the Secretary of State responsible for making it work. The Secretary of State is at the top of the administrative pyramid. In Canada most local issues and local programs are controlled by the province. The Ontario Government doesn’t have a Secretary of State, so it might be necessary to give the responsibility to a very high member of cabinet.

A duty to ask for suggestions

The second clause in the bill requires the government to approach all local councils and invite them to put forward suggestions on how to improve the sustainability of their local communities.

The bill allows councils to request a transfer of functions from one body to another. This will allow local authorities to identify existing sources of money for local matters and put forward proposals on how that money could be spent differently. If they want, councils can shift existing money to fund some of the other suggestions they have made.

This shifting does not involve any extra money from government.

For example, if a particular road is currently managed by the Central Government, and the local authority believes it can use the money more effectively, they can ask to have responsibility transferred from the Highways Agency to the local authority. The money currently associated with managing it is also transferred. The local authority can then manage this road in a different way and spend the money it saves on another more important project.

The senior level of government can refuse to transfer responsibility if the transfer would harm other areas or have a detrimental effect on the greater public interest.

Dealing with all the ideas

The British bill requires the government to appoint a person known as the ‘Selector’ who will act as a representative on behalf of local authorities. The Selector will consider all the proposals put forward by the local authorities and work in co-operation with the municipal affairs to create a short list.

Having a person to act on behalf of local authorities is clearly a more efficient than the current free-for-all. Northern Ontario is a tangle of overlapping jurisdictions. With fewer than 800,000 people, Northern Ontario is divided into 10 territorial districts, 145 municipalities, two Local Health Integration Networks, 102 First Nations, and over 150 unincorporated communities, including 46 local services boards, and 42 of Ontario 47 sustainable forest licenses.

Once the short list is presented, Municipal Affairs must work with the ‘Selector’ in trying to reach an agreement. The government has a duty to co-operate according to the bill, so it has to try to reach agreement on the proposals selected.

Action plans to see the light of day

The bill requires the government to publish its decisions on the proposals in the short list giving reasons why each proposal has been accepted or rejected. All proposals that the government has decided to implement must be published in an ‘Action Plan’ with each proposal being accompanied by a statement of action stating how the government intends to implement it.

Even when it consults, the government of Ontario is not required to do anything. It can simply say that all the suggestions were ‘considered.’ The sustainable communities bill makes sure that the issues most important to the local communities are dealt with.

At the end of the year the government has a duty to report to parliament on the progress being made in implementing the proposals in an action plan.

How to do a good job of consulting

One of the goals of the British bill is to get more people involved in local decision-making. The bill actually imposes a duty on local authorities to involve “all sections of society” before submitting their proposals to the ‘Selector’. Local authorities have to establish a system of local ‘citizens panels,’ which must have consultations with a local authority and together reach an agreement on any proposals put forward.

The British bill is a step towards a stronger form of democracy. It will reverse the trend toward increasingly centralized control and it should increase the number of people who take part in making decisions about their communities. The process will be fairer and it will include a fuller range of the community than ever before.

Opening the Books

The British bill requires the government (or a person they see fit to appoint) to provide ‘local spending reports’ which give a detailed breakdown of all monies spent by government and its agencies in local authority areas. The purpose of this clause is to ‘open up the books’ and for the first time enable both local authorities and communities to have a clear picture on how government money is spent in their area.

No one can govern without good data. The most important information is about how much money you have to spend. In Northern Ontario no one knows how much government revenue there is or how it is spent. This may have been good enough in the 19th century, but it won’t work for the 21st century.

Creating regional accounts, beginning with the local spending reports in the British bill – is relatively easy and cheap with modern accounting technology. This should be a priority item for the Minister of Northern Development.

Is local control risky?

Every system of government is risky – The system we have has led to Northern decline and under development. It is one of the main reasons young people leave the North. Government from Toronto is simply too dangerous for Northern Ontario.

Can the people of Northern Ontario do better? The answer is yes, they can.

A quote from the leader of the British Conservative Party, David Cameron, puts the issue very clearly.

“At different times, different areas will have different services and different standards of service,” he wrote.

“Some areas will sometimes do better than others. Some areas will make mistakes where others will succeed.”But he insisted:“It is by permitting local communities to develop their own priorities and their own innovations that we will produce a far higher general standard.”

This, in our opinion, is an outbreak of uncommon common sense. It includes two bedrock principles; transparency and accountability.

It is time to take a leaf out of the British experience and get to work. Northern Ontario has unique strengths and weaknesses that have little or nothing in common with the balance of the province. There must be structural change.

It’s not about moving government jobs out of Toronto, it is not about spending more money, it is about moving the thinking, the planning and the accountability to where it belongs.

Links

TVO.org: Ontario Votes 2007: Northern Ontario

]]> http://blogs.northernlife.ca/matkins/2007/09/regional_governance_in_britain.html http://blogs.northernlife.ca/matkins/2007/09/regional_governance_in_britain.html Mon, 03 Sep 2007 23:45:16 -0500 THE PROVINCE GETS IN THE GAME

On October 28, 2004, southern Ontario entered a new era. David Caplan, Minister of Public Infrastructure
Renewal, introduced Bill 136 - an Act that put in place the legal framework for the provincial government to make development plans for entire regions.

The first target for the government was the explosive development of southern Ontario. On June 16, 2006, the Ontario government released its plan for the Greater Golden Horseshoe. The plan went over the heads of the existing municipalities to provide an integrated growth strategy.

On May 17, 2007 the provincial government turned its sights on Northern Ontario. In a long overdue but very welcome move, the McGuinty government announced that it would now develop a growth plan for Northern Ontario.

Sixteen cabinet ministers will work together, ending the province’s long-standing practice of running Northern Ontario out of 16 separate closets in Queen’s Park. For the first time, the left hand will know what the right hand is doing in Northern Ontario. It is the kind of coordination that the North was promised by former Premier David Peterson.

The Places to Grow Act lets the province designate any region it wants as a growth plan area. It then requires Minister Caplan to prepare a growth plan.

The process is not under the Ministry of Northern Development and Mines. While Rick Bartolucci has been tagged to chair the ministers’ roundtable, the North’s Growth Plan will be developed by Caplan, who also directed the Greater Golden Horseshoe plan that was tabled in 2006.

The Growth Plan can deal with almost anything. The Act specifically allows for matters from community design and municipal boundaries to non-renewable resources and energy conservation. There is even an “other” category that puts virtually everything on the table. The key growth issues for the North are ones that fall under the “other” category, for example forest tenures, elimination of unorganized areas, and the creation of a regional government of some sort. Renewable resources including forestry are not mentioned in the Act.

Once the plan is prepared the Minister must provide an opportunity for the public and local governments to make written submissions. If the Minister makes revisions to the plan, he has to provide another opportunity for public comments before submitting it to the province. Cabinet will decide if the plan is accepted.

The great advantage of the Places to Grow Act is that it lets Caplan put together a plan without waiting to get all the municipalities and ministries on board. The Liberals have given themselves permission to show some real leadership. With the Greater Golden Horseshoe plan they showed that they were willing to provide this leadership.

The great disadvantage of the Places to Grow Act for Northern Ontario is that growth depends on reforming the forestry sector and creating real responsible government in the North. These issues do not fit under the Places to Grow Act.

Sixteen of the most powerful people in Ontario will sit down over the next six months to advise Caplan on his Northern Growth Plan.

No timeline has been set for the plan to be implemented, though Caplan said a 12- to 18-month start date is "doable."

Caplan has said a draft version of the plan could be finished by the end of the year. It could take another six months before a final plan is in place and can be taken to the Ministry of Finance.

An independent Algoma University, and capacity in post-secondary education, research and innovation, will be "really critical."

While the Greater Golden Horseshoe growth plan focused on keeping up with rapid growth, Caplan noted Northern Ontario faces a situation "almost the opposite."

"Northern Ontario is very much caught in the boom and bust cycle, depending upon the resource-based industries," he said.

Caplan, Bartolucci and Natural Resources Minister David Ramsay, will be consulting with Aboriginal and municipal leaders, business, industry and environmental groups, over the coming months to develop a Growth Plan for Northern Ontario that represents northern priorities.

Northerners are not being asked to make change, but they will have the chance to make suggestions. Let’s think about what the 16 ministers will see when they look at Northern Ontario.

They will see a Treasure house!

They will be amazed at the potential. The region is a treasure house of natural resources, lands and waters, provincial parks, fisheries, and natural wilderness areas that are among the most pristine and beautiful in the world.

At its peak, the Province of Ontario obtained nearly one quarter of its revenue from northern resources. Ontario’s northern forests and mines were like Alberta’s oil today.

They will see an economic shipwreck and an economic boom.

The ministers will be stunned at the failure to generate sustainable economic development in Northern Ontario. Policies designed 140 years ago are now a formula for disaster today. We had a far-sighted strategy for the beginning of the 20th century, but it is not good enough for the 21st century.

They will see an economic colony.

If they look at the history of Northern Ontario they will be surprised that the region is not a separate province.

If Northern Ontario were a province, only British Columbia and Quebec would be larger. Northern Ontario covers over 800,000 square kilometres; nearly 90 percent of the Province of Ontario’s land area. It extends across two time zones, from Quebec in the east to the Manitoba border in the west. It stretches from Georgian Bay to Hudson Bay and James Bay. It is indeed a vast and magnificent land, an empire within a province.

Country	Area km.2
NORTHERN ONTARIO	850,000
France	674,843
Germany	357,021
Spain	506,030
Norway	385,155
Finland	338,145
Scotland	78,772
Wales	20,779
Monaco	2

They will see a distinct people.

Twenty-seven percent of the province's Francophone population lives in the North. The North is home to 102 of the 134 First Nations in Ontario, 43 percent of Ontario’s Aboriginal population.

	Share of the population	Number in Northern Ontario
Francophone	19%	147,000
First Nations	10%	80,720

They will notice that most of the people in Northern Ontario live on “reserves.” The federal reserves are called “First Nations.” The provincial reserves are called “municipalities.” Most of the land base outside of the reserves is controlled directly by the Province.

They will see a distinct economy.

Northern Ontario's economy is dramatically different from the economy of southern Ontario. In many respects, Northern Ontario remains no more than a resource extraction colony of the south. Instead of manufacturing, we have mining and forestry. Compared to the rest of the province, only half as many Northerners work in finance, insurance, real estate and leasing, information, culture, and recreation, professions, science and technical services. These are the growing, influential professions; occupied by the people that Richard Florida calls the ``creative classes.''

The public sector in the North - healthcare, education, and public administration, is disproportionately large.

It is a “client” economy, dominated by the employees of big companies and big government. Both are based outside the region. Because of the industrial structure of the region, 40.5% of northern employees are unionized, compared to 28.5% of employees in the province.

Although there are many excellent exceptions to the rule, it is generally not an innovative economy. If the Ministers are smart they will ask what it is about provincial policy that stops a population of pioneers and adventurers drawn from allover the world from creating a dynamic and exciting economy.

They will see an administrative tangle.

With fewer than 800,000 people, Northern Ontario is divided into 10 territorial districts, 145 municipalities, two Local Health Integration Networks, 102 First Nations, and over 150 unincorporated communities, including 46 Local Services Boards, and 42 of Ontario 47 Sustainable Forest Licenses.

Areas with citizen government comprise perhaps 10% of the region. Why so many overlapping jurisdictions with so little real power? The structure keeps Northerners divided and dependent.

“Northern Ontario’s economic development landscape is a patchwork of organizations that lack coordination”

Blais & Associates
Economic Development Consulting

Industrial policy in Northern Ontario is controlled by multiple ministries. Neither the Ministry of Natural Resources nor the Ministry of Northern Development and Mines focuses exclusively on northern development. They each control one of the North’s major industrial sectors. They each dilute their northern portfolio by mixing in responsibility for southern producers. The job of promoting secondary industry, value added and innovation is in a third ministry controlled by the Premier.

They will be introduced to Piñata politics.

A Piñata is a decorated container of sweets or small gifts that is hung from the ceiling and is hit and broken by blindfolded people with sticks, traditionally during Latin American festivals. Of course if you have a young child you know all about Piñata’s at birthday parties.

In short, that is how economic development process is managed in Northern Ontario. The Piñata’s are FedNor (a federal government agency) and the Northern Ontario Heritage Fund Corporation sponsored by the Province. Economic development “assistance” is particularly advanced in the Maritimes where the federal offering is called ACOA (Atlantic Canada Opportunities Agency)

In any event, although the intentions are laudable and many worthwhile initiatives have received funding, the effect is an inefficient welfare patchwork that funnels almost all economic development strategies through these two agencies. Funding and priorities are subject to the whims and priorities of succeeding federal and provincial governments that are not always in sync.

The effect on municipalities is that their first thoughts when they assess an economic project is not its inherent value, but what will FedNor or Heritage think of it. It reshapes thinking, slows progress, transfers responsibility and creates a culture of dependency.

The question is not a matter of, “Is the money needed?” Of course it is. The question is how is it made available and who decides what gets funded. The ministers will see there needs to be a realignment of responsibility and accountability.

THEY WILL SEE THAT THE BASE IS IN PLACE.

The cities have developed into attractive and comfortable regional service centers. They have many of the amenities of southern communities combined with the beauty of a still wild and beautiful landscape. The North has its own universities and it is swimming in talented people.

This maturity is hard won and developed by communities that are constantly fighting to improve their lot in life with volunteer groups signing up to get the job done.

THEY WILL SEE THAT PART OF THE PROBLEM IS GOVERNANCE.

Local control of resources is the key to growth. Ontario is committed to a policy of handing resources over to large resource companies. It is not what the USA does, it is not what the Fins do and it is not what the UN recommends.

A resource economy WILL NOT prosper unless it evolves into a knowledge economy based on value-added thinking in forestry and innovation in the mining sector.
This evolution cannot be managed from Toronto. Northern Ontario lives in a different world, with different priorities and problems than southern Ontario.

In passing the Stronger City of Toronto for a Stronger Ontario Act on June 12, 2006, the Province recognized the CRITICAL need to devolve authority to a region with distinct needs. The same approach is required for Northern Ontario. We need a Region of Northern Ontario Act.

A POSITIVE START

Bringing together 16 ministries to consider the economy of Northern Ontario is critically important. It is the first time in living memory the Province of Ontario has moved from benign neglect and crisis management (i.e. saving mills, steel plants etc. after they get into trouble) to a proactive strategy of planning and thinking.

We look forward with great anticipation on where this might take us.

Let us begin with open minds.

Next Month

Money, taxes and Accountability.

]]> http://blogs.northernlife.ca/matkins/2007/07/rethinking_northern_ontario.html http://blogs.northernlife.ca/matkins/2007/07/rethinking_northern_ontario.html Wed, 25 Jul 2007 15:31:02 -0500