New investment-attraction agency, Invest Ontario, will tout province as a place for companies to set up shop and make investments itself if necessary
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Jul 14, 2020 • • 3 minute read
Ontario Premier Doug Ford’s government is prepared to invest in “anchor” companies as part of its plan to help the province’s economy recover from the COVID-19 crisis.
A new investment-attraction agency, Invest Ontario, will both tout the province as a place for companies to set up shop and make investments itself if necessary, Vic Fedeli, the economic development minister, said in an interview.
“Wherever there is a gap, that’s where we need to work closely with those individual businesses, show them the advantages of Ontario,” he said. “And we are looking for game-changing investments that we may make in some of those anchor companies, if it helps us create jobs for Ontario for the long run.”
The new “one stop shop” for businesses and investors was announced last week along with an omnibus piece of legislation, the COVID-19 Economic Recovery Act, which the government has framed as a bill that will pave the way for a provincial rebound.
Ontario gained approximately 378,000 jobs in June, according to Statistics Canada, although the province’s unemployment rate was still 12.2 per cent, more than double what it was a year ago and just below Canada’s overall 12.3-per-cent rate.
But the province is not the only jurisdiction whose economy has been hit hard by the coronavirus pandemic, and its government won’t be the only one seeking new investment for a wounded economy.
Alberta recentlyannouncedit will create an investment corporation with similar aims as that of Ontario’s planned agency.
Quebec’s economy ministerpredictedin an interview with Bloomberg News in June that the COVID-19 crisis will make governments more interventionist. Quebec already has come to the aid of Cirque du Soleil Entertainment Group and is considering extending a lifeline to Montreal-based Aldo Group Inc., a global shoe retailer.
Ontario has been down a similar road before.
In addition to more than a dozen investment and trade outposts around the world, the province had a “one-window concierge service” for businesses and achief investment officer.
The CIO was hired under the province’s previous Liberal government and then reportedly let go after Premier Doug Ford and the Progressive Conservatives took power in 2018, following a campaign in which the Tories vowed to end “corporate welfare” and scrap the Liberals’ grant-and-loan-giving Jobs and Prosperity Fund.
We are looking for game-changing investments that we may make in some of those anchor companies, if it helps us create jobs for Ontario for the long run
Vic Fedeli, Ontario’s economic development minister
But the Ford regime has shown itself as still willing to chip in, such as the$34.5-million investmentannounced in November 2018 for a $660-million Maple Leaf Foods Inc. chicken-processing plant in London, Ont.
Fedeli said the current government’s plan is for “real, wholesale change,” which includes performance metrics and setting up Invest Ontario as an independent agency. It will have its own board of directors and a chief executive from the private sector, the minister said.
“This team will be all about deal hunting, then deal structuring, then, ultimately, deal closing,” Fedeli said.
Ontario on Monday also revealeddetailsof the third stage of its reopening process, under which most businesses and public spaces can open their doors again.
“The reopening plans are still relatively more conservative than other jurisdictions in (North America), but they are taking a step in that direction,” a note from the Bank of Nova Scotia’s economics unit said.
Invest Ontario will initially focus on advanced manufacturing, life sciences and the technology sector, the provincial government said when it made the announcement last week.
Further details, such as whether investments would be loans or grants, debt or equity, as well as the cost and when the agency will begin operating, will not be finalized until at least the fall, when the province is supposed to release a budget.
Fedeli said it’s important for Ontario to find those “game-changing” investment opportunities given that other jurisdictions are also making plans to set up their own investment offices to help with their recoveries.
The “genesis” of Invest Ontario dates back to before the pandemic, but all the economic uncertainty and global competition for investment that has been left in its wake has convinced the Ontario government it needed to do more.
“Certainly, that has highlighted the need for us to be more proactive, both domestically and with foreign direct investment,” Fedeli said.
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