1. Introduction

In the real world, the inter-relationships among local, national and international markets are complicated. Even more complicated is the relationship between the marketplace and the strategies that seek to shape or influence growth and prosperity. In developing an Economic Development Strategy for the Town of Markham, the Town must be clear on the direction for the community and the manner in which it will define economic development in the future.

A cornerstone to developing an economic development strategy is an understanding of the community in terms of its assets – business base, labour force, quality of life etc. – as well as its potential – emerging industries, presence of entrepreneurs and capacity for innovation. To achieve this understanding a comprehensive analysis of a community’s economic sectors is required.

urbanMetrics inc. has been contracted by the Town of Markham to prepare an economic sectors analysis that would assist staff to more precisely understand key growth sectors in the community and recommend work steps to promote the future growth and marketability of the Town of Markham.

1.1 Purpose of the Report

The overall goal of this report is to identify the economic sectors of importance to the Town of Markham and provide context and input to the development of the Town’s economic development strategy. Related to this goal is the need to better understand Markham’s economic strengths and weaknesses as well as its opportunities and threats to new business investment. This in turn will enable staff to formulate a strategy that better meets the needs of a growing and highly skilled community.

The local/regional profile and economic sector analysis that was completed provides insight into current strengths and weakness and future opportunities and threats associated with the Town’s ability to retain and attract businesses operating within key sectors of the economy.

The results of the SWOT analysis serve to further refine and finalize Markham’s key economic sectors and provide input into the type and form of economic development program required in the community.

A competitive analysis was also undertaken in order to demonstrate the comparative advantages that the Town has relative to select jurisdictions. Consideration was also given to key location criteria that should be the focus of any business attraction effort as well as range of innovation indicators that speak to a community’s capacity to support innovative firms, institutions and people.

Lastly, an investment capacity assessment was completed in order to gain an understanding of the internal and external resources available to the Town in the implementation of its economic development program.

The results of the analysis are presented herein as the Final Report to the Town of Markham.

2. Demographic Profile

This section provides a baseline demographic profile for the Town of Markham. Unless otherwise stated the information has been sourced from Statistics Canada and the 2001 Census.

2.1 Population

The Town of Markham has experienced significant population growth over the past decade. Between 1996 and 2001, Markham’s population increased by 20% and the estimated 2006 population[1] is 266,618, a further 28% increase from 2001 population levels (Figure 1). York Region is experiencing similar trends in population growth with a population increase of 23% between 1996 and 2001. The Region’s estimated population for 2006 is 946,700, a 30% increase from 2001. Based on 2006 estimated population levels, Markham comprises 28% of the overall population of York Region.

Markham’s population composition and age breakdown has changed significantly over the last five years (Figure 2). Using 2001 Census data combined with the estimates provided in the FP Markets – Canadian Demographics 2006[2] publication, we were able to identify age cohorts that have the greatest population proportions and the most significant growth. The 15 to 24 age cohort comprises one of the largest proportions of the population. Additionally, the 25 to 29 age cohort experienced significant growth, increasing an estimated 40% from 2001. The proportions and changes in these age cohorts indicate a growing and young employment base. Whereas many municipalities outside the GTA experience an outflow of population in these age cohorts as a result of employment or education choices, this does not appear to be the case in Markham.

The largest population increase however, occurred in the 55 to 59 age cohort, increasing an estimated 54% from 2001. The 70 and up age cohort also grew by an estimated 47% from 2001. With an increase in both younger and middle aged groups, Markham is experiencing significant growth in the working aged population and in the number of families comprising the population. At the same time, Markham is also experiencing significant change in the population group nearing retirement age. Balancing the demand for services and amenities that appeal to this broad range of population will be an important consideration for Markham in the future.

It should also be noted that the Town of Markham accounts for a significant portion (49%) of York Region’s recent immigrant population and that more recent immigrants moved to Markham between 1991 and 2001 than any other municipality in York region.[3] The growing diversity of the population will also have implications for municipal services, amenities and housing.

York Region population forecasts indicate Markham’s population will grow to approximately 348,000 by the year 2026 with the rate of growth decreasing from current levels, but remaining consistent with York Region as a whole. Figure 3 illustrates population projections for the Town of Markham and York Region. It should be noted however, that Markham has been identified as an Urban Growth Centre in the Province’s Places to Grow, and that the population projections for York Region currently exceed York Region’s estimates.

2.2 Labour Force and Employment

Labour force indicators are shown in figure 4 for the Town of Markham, York Region and Toronto CMA. Markham’s participation rate and employment rate are similar to the Toronto CMA, but are slightly below York Region levels. While Markham’s unemployment rate is lower than the Toronto CMA, it is higher than York Region as a whole.

Figure 5 illustrates labour force by occupation in the Town of Markham. In 2001, the total labour force in Markham was 113,140 and was estimated to grow to by 28% to 145,345 in 2006. According to Statistics Canada’s Census 2001 and reaffirmed by the projections made by FP Markets – Canadian Demographics 2006, Markham’s labour force is concentrated in three sectors: Management; Business, Finance and Administration; and Sales & Service (Definitions are provided in Appendix A). Based on the 2006 projections, Markham has experienced substantial growth in all occupational sectors.

Employment forecasts by York Region indicate that Markham’s current employment levels are approximately 148,000, an increase of 20% from 2001 (Figure 6) which represents better than 1 job per member of the resident labour force. In conjunction with Markham’s decrease in the rate of population growth from current levels, the rate of change in employment levels is expected to decline as the community reaches maturity along with York Region levels and reach approximately 212,000 by the year 2026. Overall, employment levels are forecasted to increase for both Markham and York Region in the future, but the rate of change will be approximately 6% by the year 2026. However, according to the Ministry of Public Infrastructure Renewal’s Places to Grow – A Growth Plan for the Greater Golden Horseshoe, the employment levels for York Region are projected to be 700,000 by the year 2021 and 780,000 by the year 2032. As a result, York Region is currently updating population, household and employment forecasts that will take into consideration the projections and policies outlined by the Province. It is anticipated that Markham will receive a significant allocation of employment growth as a result of these revised projections.

2.3 Education

The level of educational attainment is an important indicator to business of the type and supply of labour in the local population. Access to skilled and semi-skilled labour can also be a source of competitive advantage for a community. Figure 7 illustrates the education attainment for the 24 – 64 age cohorts in the Town of Markham. This analysis reveals that 58% of Markham residents possess a post-secondary education. The high level of education attained by the local population and the range of attainment is an important component in the marketing of local investment capacity. In comparison to York Region and the Toronto CMA, Markham demonstrated the highest levels of residents with a University level education (Figure 8). It is also important to note that many of the recent immigrants to the Town are also well educated. Statistics Canada has reported that recent immigrants (1990-1999) in Markham have a comparable level of schooling to non-immigrants and 28% have a university certificate, diploma or degree as compared to 29% of non-immigrants.[4]

Figure 9 demonstrates the dominant fields of study of Markham residents. These include Commerce, Management and Business Administration (28%) and Engineering and Applied Sciences Technologies and Trades (13%). The strength in both of these fields of study represents an advantage for Markham in its efforts to retain and attract knowledge based and business service industries. This is also an important consideration if the Town is interested in developing or supporting a business mentorship program.

The following five fields of study represent the other major areas of study for the population with post secondary education: Social Science & related fields (11%); Educational, Recreational & Counselling Services (9%); Engineering and Applied Sciences (9%); Health Professions, Sciences & Technologies (9%); and Mathematics and Physical Sciences (8%).

2.4 Income Level

Figure 10 illustrates the number of full-time vs. part-time workers, as well as the average employment income in the Town of Markham in 2001. Markham has a high proportion of part time workers (43%) in the labour force that may be attributed to the significant number of people employed in Sales and Service occupations (noted previously) which includes retail.

According to 2001 Census data, Markham had a median family income of $72,585, well above the provincial average of $61,024. However, when compared to other York Region municipalities, Markham ranked below the neighbouring municipalities of Richmond Hill and Vaughan at $77,790 and $78,324 respectively and well below the highest median family income of $88,459 in Aurora.

2.5 Commuting Flows

An important consideration in developing an economic strategy for a community is the characterization of the local employment. This section looks at the labour force commuting flows for the Town of Markham. It analyzes the place of work for residents from Markham and the place of residence for workers who commute to Markham for employment. Consideration is given to the employed labour force 15 years and over having a usual place of work, and only accounts for flows greater than or equal to 20 persons.

Figure 11 displays the place of work of Markham residents. It should be noted that in 2001, 70% of the resident labour force commuted to employment outside of Markham. Taking into consideration the type of employment that would be needed to retain these workers, there may be an opportunity for the Town to convert out-commuters to work locally. The largest share of residents are commuting to destinations in Toronto (51%), while a significantly smaller share commute to municipalities within York Region including Richmond Hill (5.6%) and Vaughan (4.6%).

Figure 12[5] illustrates the place of residence for people who work in the Town of Markham. Markham residents account for 26% of local employment. Of those people commuting into Markham for employment, only 19% come from municipalities in York Region. The largest proportion of people commuting into Markham are Toronto residents and account for 38% of local employment. Given the significant number of people commuting to Markham for employment, this should be seen as an opportunity to attract non-resident employees to live in the Town.

There are a significant number of residents leaving each day for places of employment outside of Markham along with a considerable inflow of labour from surrounding municipalities and throughout the GTA. This level of mobility, which is not unique to Markham, has resulted in employers having to recruit outside the Town for their labour needs, adding to the congestion on local transportation systems, and impacting Markham’s overall competitive position. Although local employment opportunities have been able to draw individuals from a wide range of communities within and surrounding York Region, consideration for future economic development initiatives should seek to increase local labour force supply in order to offset some of the concerns about labour force recruitment and retention that were raised during the consultation phase of the assignment. As Markham also serves as “flow through” municipality for non-residents who drive through the community en route to work elsewhere, there may also be an opportunity to tap into this pool of labour as a way to bolster labour force supply.

2.6 Housing Characteristics

Similar to suburban communities throughout the GTA, Markham’s housing supply is heavily dominated by single detached homes which may impact a municipality’s ability to attract a diversified range of workers to the community. Figure 13 illustrates Markham’s housing composition. The overall composition provides limited choice or options beyond single detached family homes. Combined with commuter flows and the greater range of housing options in the neighbouring municipalities of Toronto and Richmond Hill, Markham’s limited housing options beyond single detached homes is a contributing factor to the Town’s dependency on a large in-flow of workers. This is particularly true if companies are attracting younger workers or workers at the lower end of the income scale. The average cost of housing in Markham when compared to other areas of the Greater Toronto Area is also deterring non-resident employees from moving to Markham. The current trend in Markham toward the development of more town-homes and apartments may help to alleviate the situation.

However, with new Provincial, Regional and Municipal policies recognizing the need for sustainable growth management and greater levels of intensification, current development and housing patterns in Markham and York Region are likely to change. The rate of growth for single and semi-detached houses is forecasted to decrease from current levels of 21% in 2006 to 2% by the year 2021. Additionally, there has been steady growth in townhouses and apartments over the past few years and this growth is forecasted to continue, particularly with the development of Markham Centre. Figure 14 indicates Markham’s current and forecast housing by unit type.

Along with a decrease in the rate of housing development, the rate of Markham’s household growth is expected to slow from current levels. By the year 2026 the rate of growth for households is forecasted to be 10%, a significant decrease from the current 18% level. Much of this slowdown in growth is attributed to Markham reaching the status of a mature community. Similar to the population and employment forecasts, the rate of change for households in Markham is expected to remain consistent to York Region levels (Figure 15).

The average and median housing prices for Markham based on a range of housing types are illustrated in Figure 16. Markham’s median housing prices are above GTA median prices in all categories. Although the housing forecast indicates steady growth in townhouses and apartments, the high cost of housing compared to other GTA municipalities may hinder Markham’s ability to attract a wide range of income earners.

3. Industry Sector Analysis

Changes in the global economy have always had a direct impact on the growth and life of cities. Today, the shift towards a service and knowledge based economy is a major driver of economic growth and the role of cities is being redefined and reshaped as they become centres of global influence, finance and business, innovation and research, as well as markets for production and innovative technologies and services.

These emerging roles mean a heightened level of national and international competition to attract new financial capital, a skilled workforce and business investment. In a report released in November 2006, Competitive Cities in the Global Economy, the Organization for Economic Cooperation and Development (OECD) emphasized that successful cities attract talented young highly skilled workers, are centres of innovation and entrepreneurship and are competitive locations for global and regional headquarters.

3.1 Global Economic Trends

Global economic trends will continue to afford positive benefits for Canadian cities in terms of population growth, employment and a strong national economy. This in turn provides opportunities for a higher standard of living and a greater level of prosperity for Canadians. But these economic trends will also pose significant challenges in terms of the potential impact on the natural environment as our cities grow, the increased need for services and infrastructure, governance of growth, and social development.

The following long term global trends are seen as having the most significant impact on Canadian cities in the future:

Global Economic Growth - The global economy is predicted to achieve a sustained period of expansion through 2015 and is predicted to slow between 2015 and 2030. This growth is expected to be broadly based but focused primarily in emerging markets – India, China, and Russia etc. Canada is predicted to maintain overall growth in productivity and experience improvements to its overall standard of living. This is reliant upon a higher labour force participation rate due to higher levels of immigration, education and innovation in the economy.

Growing Energy Demand – Worldwide energy demand is expected to grow by 50 % over the next 30 years driven by economic growth and population increase particularly in emerging markets. The projected growth in world consumption will drive oil sands production, which is expected to increase in the coming decades. The volatility of global oil supplies however, can affect revenues and profits and thus the sustainability of economic development at a national and international level. In addition, the demand for skilled labour to sustain this growth over the coming decades is likely to intensify in light of the growing competition between companies, cities and even countries for this needed talent. The impact of this is already being experienced in many provincial and local economies across Canada.

Labour Force Mobility – The effect of the global integration of local economies is the increasing international mobility of labour and the competition for talent, particularly skilled workers, that is occurring. This trend is further impacted by the shifting demographics that are occurring worldwide. Historically a significant number of skilled workers are moving from Asia to the United States, Canada, Australia and the United Kingdom. There is also increasing mobility of skilled workers between developed countries. The competition for skilled workers is being further impacted by the efforts of emerging economies to retain and return their emigrated workforce, particularly their skilled workforce. Ireland and China are two examples of where this has occurred. This has implications for both Canada as a whole and the Toronto region in particular given the future reliance on attracting immigrants as a means to expand economic growth.

Global Localization – Cities are increasingly recognized as embodying and reflecting global trends due to the manner in which they are linked to national and international economies. To remain competitive cities need to develop more proactive strategies to enhance their visibility and demonstrate their level of engagement in the international arena. This in turn assists with the attraction of skilled workers.

Technology, Innovation and Knowledge Economy - Information technologies and low cost telecommunications have enabled significant breakthroughs in business practices driving down transaction costs and allowing businesses to expand and out source non-core business activity around the globe. In the future, cities and their business communities will face further challenges from the increasing pace of innovation, the need to continue to reduce costs and the demands for new governance techniques that allow greater on-line citizen access to municipal information and affairs. This too will result in the need to ensure a competitive and skilled workforce.

3.2 Calculation of Location Quotients

In order to determine the type and degree of industrial specialization or economic diversity that has been occurring in the Town of Markham, location quotients (“LQ’s”) have been calculated to identify and measure the concentration of industry/business activity by major sector.

Location Quotients are a commonly used tool in regional economic analysis. They assess the concentration of economic activities within a smaller area relative to the overarching region in which it resides. For the purposes of this study we have calculated three sets of location quotients:

1) To indicate which industry sectors in Markham have a greater labour force concentration relative to the overall average for the Province of Ontario;

2) To indicate which industry sectors in Markham have a greater labour force concentration relative to the overall average for the Toronto CMA; and

3) To indicate which industry sectors in Markham have a greater labour force concentration relative to the overall average for the Region of York.

A location quotient greater than 1.0 for a given sector indicates a local concentration of economic activity as compared to the overarching region (either Ontario or Region X). Location Quotients equal to 1.0 for a given sector suggest that the Town of Markham has the same concentration of economic activity as the overarching region. Finally, a location quotient of less than 1.0 indicates a concentration of economic activity that is less than the overarching region.

In theory, industrial or business concentration that is greater than the overarching region average may represent the export base of the participating municipalities. Businesses that make up this export base may have likely chosen to locate in the area due to certain regional competitive advantages. These competitive advantages can be used to attract further investment in the future, in the same or complimentary industries.

The following section provides the results for the Town of Markham as compared to Ontario, the Toronto Census Metropolitan Area (CMA) and the Region of York. It should be noted that Statistics Canada data for Markham is only available for 2001. Revised population and employment data will be available from Statistics Canada beginning in February 2007.

When compared to Ontario, the Town of Markham has a comparatively high concentration of local employment in Wholesale Trade; Professional, Scientific and Technical Services; Administrative and Support, Waste Management and Remediation Services; and Finance and Insurance (Figure 17). Definitions for individual sectors are based on the North American Industrial Classification System (NAICS) and are provided in Appendix B.

When compared to the Toronto CMA, the Town of Markham has a comparatively high concentration of local employment in Agriculture, Forestry, Fishing and Hunting indicative of the number of active farms that remain within the Municipal boundary; Wholesale Trade; Construction; Professional, Scientific and Technical Services; and Manufacturing (Figure 18).

In comparison with York Region, the Town of Markham has a comparatively high concentration of local employment in Finance and Insurance; Professional, Scientific and Technical Services; Administrative and Support, Waste Management and Remediation Services; Wholesale Trade; and Utilities. (Figure 19)

3.3 Location Quotients with High Concentrations

In order to understand the local business and industrial activity represented in the previous tables, the two digit industry sectors are also examined at a sub-sector level. Detailed location quotients for each sub-sector have been calculated for Markham relative to Ontario, the Toronto CMA and York Region and are published in Appendix B.

For the purposes of this analysis and the discussion that follows, we have only focused on industrial and business concentrations that are seen as having the potential to attract new business investment or that represent the export base of the Town of Markham (a high to average performance at the local (York Region), regional (Toronto CMA) and provincial level). These include: Manufacturing, Professional, Scientific and Technical Services, Finance and Insurance and Information and Cultural Industries.

In 2001, Markham’s concentration of manufacturing activity combined a broad range of businesses involved in food product manufacturing, clothing and textile manufacturing, furniture manufacturing and household and consumer goods manufacturing. What should be noted however is the degree to which the manufacturing sector is comprised of advanced manufacturing activity particularly as it relates to the broader Toronto region. When consideration is given to this element of the manufacturing sector, activity is more particularly focused on:

Life Science/Bio Sciences – e.g. Pharmaceutical and Medicine Manufacturing, Medical Equipment and Supplies Manufacturing, Navigational, Measuring, Medical and Control Instruments Manufacturing

Information Communication & Technology – e.g. Computer and Peripheral Equipment Manufacturing, Communications Equipment Manufacturing, Audio and Video Equipment Manufacturing, Semiconductor and Other Electronic Equipment Manufacturing, Hardware Manufacturing and Manufacturing and Reproducing Magnetic and Optical Media

A review of the Statistics Canada Canadian Business Pattern results for the Town of Markham for the period 2002-2006 (detailed in Section 3.3) indicates that while there are a significant number of manufacturing firms present in the community, there has been a modest overall decline in the number establishments from 745 firms to 724 firms. Further this decline has been felt in almost every subsector, the exceptions being food manufacturing, furniture manufacturing and miscellaneous manufacturing. While the reasons for the decline are not specifically known, it is reasonable to suggest that the lack of suitable, serviced employment land to accommodate expansion or consolidation of operations coupled with increasing operating costs may have contributed to this trend.

The loss of manufacturing associated with the life/bio science and information communication and technology sectors (12 firms) is symptomatic of a larger observed decline across Canada. However, this should be a cause of concern for the Town given the significant presence of these sub-sectors across the GTA and Hamilton region. Investment attraction efforts underway at the local, regional and provincial level also suggest that the area continues to be competitively positioned to attract this form of investment given the demand for skilled workers. According to the Region of York’s Employment and Industry Report 2005, a dominant element of the region’s manufacturing base is comprised of Computer and Electronic Product Manufacturing (10%). A review of BMO Financial Group’s Sectoral Outlook for October 2006 suggests significant growth for electronic products (6.7%) through 2007-2008 in Canada, which includes wireless equipment and computer and peripherals manufacturing.

Service-based employment in Markham accounts for a high percentage of local employment. In the 2005 York Region Employment Industry Report 78.8% of all jobs in Markham were reported as being service based. Among service-producing industries, the business services sector is the single-largest employer, accounting for 35.7% of total employment. Within Markham’s business services sector, management of companies and enterprises, computer systems design and related services, business support services and architectural, engineering and related services are the dominant subsectors, accounting for 52.2%, 24.9%, 10.1% and 10.1% of business services employment, respectively.

This is consistent with our analysis of Markham’s Professional, Scientific and Technical Service sector. In 2001, this sector was dominated by firms involved in:

· Computer Systems Design and Related Services

· Architectural, Engineering and Related Services

· Other Professional, Scientific and Technical Services

· Specialized Design Services

· Advertising and Related Services

· Accounting, Tax Preparation

· Bookkeeping and Payroll Services; and to a lesser degree

· Scientific Research and Development Services

Giving consideration to Canadian Business Patterns results for the Town for the period 2002-2006 suggests that there has been a significant increase (13%) in the number of Professional, Scientific and Technical Service firms, from 1,913 firms in 2002 to 2,163 firms in 2006. While it is anticipated that many of these firms individually only employ a small number of people, this sector continues to represent a significant opportunity for the Town in terms of investment attraction efforts, as it requires a well educated labour force that is concentrated in the knowledge industries and business service sectors. Prospects for the growth in these sectors are also good. BMO Financial Group anticipates a 3.6 % increase in Business Services and a 4.5% increase in Communication and Information Services through 2008.

The Finance and Insurance sector is also a dominant element of Markham service economy. In 2001, Markham’s employment activity was concentrated in:

· Insurance Carriers

· Non-depository Credit Intermediation and Related Activities

· Depository Credit Intermediation

· Agencies, Brokerages and Other Insurance Related Activities

· Other Financial Investment Activities

The Canadian Business Patterns results confirm that this sector continues to play a significant role in Markham’s local economy. Between 2002 and 2006, the number of firms active in this sector increased by 23.4% from 413 firms to 510 firms.

The Finance Services sector represents a significant opportunity for the Town of Markham in terms of its investment attraction efforts. The Toronto region continues to be regarded as the financial capital of Canada and is the third largest financial services centre in North America. According to the Greater Toronto Marketing Alliance the growth of Toronto’s financial services sector, historically, has outpaced that of New York and Chicago. For its part Markham’s has successfully attracted a significant number of head office and back office operations in this sector including AMEX Canada, TD Waterhouse, Liberty Mutual Insurance Group, and Allstate Insurance Co. of Canada. This should continue to be a target sector for the Town.

An emerging opportunity for the Town of Markham is the Information and Cultural Industries sector. In 2001, Markham’s employment activity was focused in:

· Data Processing,

· Software Publishers,

· Pay TV, Specialty TV and Program Distribution; and

· Telecommunications

While there are only 157 firms in Markham engaged in this form of activity according to the Canadian Business Patterns, the results suggest a growing concentration of Publishing Industries, Motion Picture and Sound Recording Industries but a drop in the number of Internet Service Providers, Web Search Portals and Data Processing firms. In our opinion the Town should view this sector as an emerging opportunity. Historically, cultural industries have been a significant contributor to Canada’s economic growth and with the introduction of new technologies that enable the distribution of cultural products and services worldwide, many countries are now actively working to ensure that indigenous cultural and linguistic offerings are available within the context of global, mass culture. In our opinion this sector is also an excellent complement to the concentration of ICT activity already evident in the Town.

The preceding tables have provided an indication of the economic activity based on jobs available in Markham. In evaluating these results, consideration must also be given to the results of total employment concentration by industry including that portion of the population that leaves the community to work in other jurisdictions.

Using Computer Systems Design and Related Services (NAICS 5415) as an example, we know that local economic activity provides employment for 3,915 persons. When the total labour force is considered, it reveals that that there are actually 7,260 persons employed in this subsector and residing in Markham, an export of 3,345 employees. This represents an opportunity for Markham in two ways. Firstly, the larger labour force base strengthens the profile and capacity of Markham to attract business and industry in the high technology sectors and secondly, represents an opportunity to retain these workers in Markham with local employment opportunities.

Figure 20 illustrates how local economic activity relative to the Toronto CMA shifts when the entire labour force is considered. The result of this analysis reinforces the dominance of Manufacturing and Professional, Scientific and Technical Services as key contributors to the Markham economy.

3.4 Canadian Business Pattern Results

Given the age of the Statistics Canada census data as it relates to employment information, it is also important to understand how this picture of employment activity may have changed.

Statistics Canada’s Canadian Business Pattern Data provides a record of business establishments by employment type and size range. Sources of information are updates from the Statistics Canada survey program and the Business Number registration source collected from the Canada Revenue Agency (CRA). The business data collected for Markham includes all local business which meets at least one of the three following criteria:

1. Have an employee workforce for which they submit payroll remittances to CRA; or

2. Have a minimum of $30,000 in annual sales revenue; or

3. Are incorporated under a federal or provincial act and have filed a federal corporate income tax form within the past three years.

The Canadian Business Patterns Data records business counts by “Total”, “Indeterminate”, and “Subtotal categories”. The establishments in the “Indeterminate” category include the self-employed, i.e. those who do not maintain an employee payroll, but may have a workforce consisting of contracted workers, family members or business owners. However, the Canadian Business Patterns does not have this information available and therefore assigns the establishments as “Indeterminate”. For our purposes, the following tables for Markham are business establishments by “Subtotal” which do not include the “Indeterminate” category.

Figure 21 reveals that a significant percentage (93.1%) of Markham business establishments comprise less than 50 employees and the most significant number of businesses have less that 5 employees.

The table also reveals however that while the number of establishments with more than 200 employees represents a small portion of the total number of firms in the Town, their impact in terms of total employment is significant.

These facts have direct impact on the type of business services and support that may be required and the focus of the Town’s investment and business attraction efforts. However, the telling information from this slide is the increase in number of large and very large firms in the Town, 16.7% and 68% respectively. These numbers indicate the success Markham has had in attracting large corporations and nurturing the growth of existing firms.

Figure 22 provides a current understanding of the size of business establishments based on the key sectors that emerged from the location quotient analysis. It should be noted that business establishments in the 1-4 employee range dominate across all sectors. This demonstrates the entrepreneurial nature of the local business and industrial economy.

Figure 23 provides an understanding of how the number of business establishments has changed over the period 2002 to 2006.

Most telling from this table is the loss of manufacturing that has occurred in the Town in the last 4 years, particularly as it relates to chemical and plastics manufacturing. However, the Town has seen growth in the number of furniture and related product manufacturers and beverage and tobacco product manufacturers.

The most significant growth however, has been in the number of professional, scientific and technical service firms. In terms of the percentage growth in firms, the finance and insurance industry has shown the most drastic improvement.

3.5 Key Findings from LQ Analysis

The Location Quotient analysis has identified historically, the sectors and industries of strength for the Town of Markham. In an effort to further refine the key target sectors for the Town we have focused the analysis on industrial and business concentrations exhibiting the greatest opportunity for growth. Based on this review a number of industries exhibited an above average employment concentration in Markham (Location Quotients > 1.25) when compared to both York Region, the Toronto CMA and in a broader sense the Province of Ontario (Figure 24).

Based on this analysis Markham’s employment base can be said to have strengths in four key industry sectors. These include:

· Manufacturing with a focus on Advanced Manufacturing in the Bio Science and ICT Sector (NAICS 31-33);

· Professional, Scientific and Technical Services (NAICS 54);

· Finance and Insurance (NAICS 52); and

· Information and Cultural Industries (NAICS 51)

These sectors should form the basis for the Town of Markham’s investment attraction efforts.

4. Competitive Analysis

In order to assess the competitive position of the Town of Markham, data was collected for a range of demographic and operating cost elements that are typically considered as part of a site location exercise. These comparative elements (summarized in Figure 25) are characterised as either “General” comparators or “Business Case Specific” comparators and assist in demonstrating the capability of Markham to attract and sustain business investment.

A further consideration is the performance of the Town of Markham against other Ontario jurisdictions. With input from the Markham Economic Development Department, Toronto; Mississauga; Vaughan; Ottawa; and Laval, Quebec, have been selected for comparison. This is based on a number of factors:

· similarities in local economies and labour force;

· proximity, access, and position within the Greater Toronto Area; and

· success at attracting the type of industry base being targeted by the Town of Markham.

4.1. General Comparators

The “general comparators” between Markham and the selected jurisdictions include the following: population growth, labour force growth, average personal income, average household income, and housing prices.

4.1.1. Population Growth

Figure 26 shows the population growth for the selected municipalities from 1996 to 2006. From 1996 to 2001 Markham had a population growth of 20.3%, the second highest population increase with respect to the other municipalities.

For the purpose of providing a more current understanding of local population growth the FP Markets – Canadian Demographics 2006 study provides an estimate of local, regional and provincial growth estimates. The 2006 study estimates that from 2001 to 2006, Markham experienced a population increase of 27.8%. Each of the select municipalities also experienced significant growth from 2001 to 2006 with Vaughan experiencing the greatest increase at 34.3%.

4.1.2. Labour Force Growth

Figure 27 shows the percentage change in labour force (15 years and older) for each of the select communities over the period from 1996 to 2006. Markham experienced a 31.7% increase in its resident labour force from 1996 to 2001. Although Toronto and Ottawa had dramatic changes in labour force growth, these increases were largely attributed to municipal amalgamation. When compared to the other selected municipalities, Markham had the second highest increase in labour force growth behind Vaughan at 50.8%.

The FP Markets – Canadian Demographics 2006 study has estimated that in 2006, Markham’s labour force will increase a further 30.4% from 2001. All the municipalities experienced significant growth since 2001, with Vaughan experiencing the greatest increase at 38.5%. It must be noted however, that the resident labour force may not represent the workforce required to attract the suggested target sectors.

4.1.3. Income (Household and Personal)

The results for average household income and personal income can provide insight into the labour force costs and quality of employment in a jurisdiction. It can also reveal the spending power of residents in a community. Figure 28 examines the 2006 average household income and personal income in each of the six jurisdictions. There is a significant variance of income between the six municipalities being examined. From these results both Markham and Vaughan can be characterized as affluent communities.

4.1.4. Average Housing Prices

Figure 29 displays the average housing prices for 2006 in the select jurisdictions. Housing costs can have an impact on business attraction, as lower cost, good quality housing can make it easier to attract and retain employees. The reverse can also be said, however. Companies looking to attract executives and senior management often cite the quality of local housing as an issue in the site location considerations.

Of the six communities, Toronto, Vaughan and Mississauga have average housing costs that exceed that of the Markham. However, detached homes continue to dominate the housing stack and the lack of a more diverse housing mix may impede the Town’s ability to target firms who in turn are looking to recruit young professionals and knowledge workers.

4.2. Business Case Comparators

As part of our competitive analysis, urbanMetrics has also analyzed some of the more significant operation costs in Markham relative to the other select jurisdictions.

For the purposes of this analysis, we have focused on the following business case elements:

· Municipal Tax Rates;

· Development Charges;

· Electricity Rates;

· Water/Wastewater Rates;

· Price per Acre of Serviced Industrial Land

4.2.1. Municipal Tax Rates

Figure 30 examines the total municipal property tax rates for the selected municipalities. Comparatively, Markham and Vaughan both have the lowest industrial property tax rate and the lowest commercial property tax rate. Toronto has the highest industrial property tax rate while Ottawa had the highest commercial property tax rate. Overall, Markham, Vaughan and Mississauga, the three suburban GTA municipalities, have been able to keep their commercial and industrial taxes lower relative to the urban municipalities.

4.2.2. Development Charges

Development charges are an important element of site location considerations, since they directly add to the cost of development. Figure 31 depicts the development charges for the select jurisdictions. Laval has the highest commercial and industrial development charges of the selected municipalities. Comparatively, Markham and Vaughan have the highest residential development charges. Commercial development charges were lowest in Toronto and highest in Laval at $6.99 and $10.77 respectively. Markham’s commercial development charge was $7.95, similar with Mississauga at $7.98. Markham’s industrial development charges at $4.24 were significantly lower than Vaughan ($5.33) and Mississauga ($6.19), and with the exception of Toronto’s nominal amount, were the lowest among the selected municipalities. Higher development charges can sometimes result in a competitive disadvantage if significantly higher than other communities, although it can also reflect a positive trend, as they are often associated with a rise in development activity. Further, increased rates are used to fund local infrastructure and services, which in turn, helps to facilitate the attraction of new business investment.

4.2.3. Electricity Rates

Utility costs, which comprise electricity, gas and water, do not factor as prominently in the site selection process as land costs, but they are a factor when looking to eliminate a community from further consideration.

For the purposes of our study, we have focused specifically on electricity costs as they represent the largest share of an industrial firm’s utility costs. According to the KPMG Competitive Alternatives 2004 report, electricity rates in Canada average 6.3 cents (U.S.) per kWh, as compared to 8.1 cents (U.S.) in the U.S. According to the 2006 Competitive Alternatives report, Canada and France have the lowest electricity rates with Canada now averaging a little over 8.0 cents per kWh.

The Ontario Energy Board is responsible for approving the rates Local Distribution Companies ("utilities") can charge their customers for the distribution and transmission of electricity ("delivery"). The commodity price of electricity is also set by the Ontario Energy Board (OEB).

On April 1, 2005, the price for electricity was changed to better reflect the price paid to generators. On May 1, 2006, and every six months after that, the prices for electricity may change based on an updated OEB price forecast and any difference between the amount consumers paid for electricity and the amount paid to generators for the previous year.

For consumers on the Regulated Price Plan, May 1, 2006, to April 30, 2007, residential consumers will pay 5.8 cents per kilowatt hour (kWh) of electricity consumed up to a certain threshold each month and 6.7 cents per kWh for consumption above that threshold. For non-residential consumers, a 750 kWh threshold is in place year-round.

Also, initiated in November 2005, electricity use in Ontario is subject to winter and summer rates, and electricity use thresholds. The price threshold - the amount of electricity that is charged at the lower price - will change two times a year for residential consumers. The price threshold will be 1,000 kWh per month during a winter season (November 1^stto April 30^th) and 600 kWh during a summer season (May 1^stto October 31^st). This means consumers will be able to use more electricity at a lower price in the winter when many people need more electricity for light, indoor activities and heating. For non-residential consumers who are eligible for the new price plan, the price threshold will remain at 750 kWh for the entire year.

Beyond these base charges, businesses have to pay extra fees in each jurisdiction, such as fixed monthly charges, and local delivery, transmission, and debt retirement charges. These rates differ depending on the electricity provider. Figure 32 shows the different rates.

In order to compare the Town of Markham to the five competitive communities, an average electricity rate and volume for running a mid to large size commercial/industrial business was confirmed through discussions with economic development officers and local utility providers. The electricity rate and volume used to compare the municipalities was an average rate of 125 kilowatts (kW) and a volume of 50,000 kilowatt hours (kWh). As shown in Figure 33 the total monthly electricity costs of running a medium/large size commercial/industrial business at an average rate of 125kW and at a volume of 50,000kWh are lowest in Laval and highest in Mississauga.

4.2.4. Water and Wastewater Rates

Water and wastewater rates are also an important element of site location considerations, since they can significantly add to the costs of running a business, particularly if the business relies on heavy water usage. The establishment of water and sewer rates is a municipal responsibility and the absence of standard procedures across Ontario has resulted in the evolution of a great variety of rate structure formats. Municipalities, however, are limited in their options based on class rate structures. Further, municipalities are not permitted to profit (beyond fixed and operational costs) from the rates they charge. Figure 34 shows the water and wastewater rates for commercial/industrial large volume users.

In order to compare the Town of Markham to the five competitive communities, urbanMetrics determined a typical water consumption rate for running a medium to large size commercial/industrial business, as confirmed through discussions with economic development staff, and information provided by Ontario Investment Services and the BMA Municipal Study – 2005.

As shown in Figure 35 the total monthly water/wastewater charges for a medium to large size commercial/industrial business using a volume of 125m3/month is highest in Markham, Toronto and Vaughan, and lowest in Laval.

4.2.5. Rates for Office/Industrial Space and Price of Employment Land

Figure 36 depicts the average rental rates for office space and the average lease rates for industrial space. Located in the GTA North office inventory, average gross rental rates for office space in the Markham area are above the rates in the GTA West office inventory which includes Mississauga, but are below the rates of downtown Toronto. The average lease rate for industrial space in Markham is higher than Vaughan and Mississauga.

As the price of industrial land is also one of the more significant variables in the decision making process for new and relocating firms, the price of serviced industrial land has been assessed. Figure 37 shows the average prices for industrial land located in industrial or business parks in each of the select communities.

The price of serviced employment land in Markham is higher on average than Vaughan and Toronto. The highest price for employment land was found in Mississauga and the lowest in Ottawa. Compared to the selected communities, Markham is in a competitive position to attract industry due to its proximity to Toronto; however, land prices are increasing throughout the GTA. As a result, land price may not be a competitive advantage for Markham in the future particularly as it relates to some components of the manufacturing sector. We have already seen the trend of manufacturing leaving Toronto for Vaughan and other 905 locations. To some extent the 905 communities are now starting to see the loss of manufacturing to other communities along the 400 series highways where land and development is less costly.

However, the Town of Markham does have vacant employment land in key locations. Along Highway 404 at both Major Mackenzie Drive East and 16^th Avenue, vacant employment parcels are available on high visibility, well accessed sites. Additionally, employment areas are located adjacent to Highway 407 and Ninth Line. Markham Centre is a 980+ acre planned development and is expected to provide employment for over 17,000 people when complete. The IBM Software Development Lab and Motorola Canada’s head office are currently located here and more development is planned in the form of Honeywell’s head office and other anticipated headquarters buildings.

It is important to note however, that aside from infill opportunities, the Town’s employment land future is limited to four key areas: Markham Centre, South Cornell/Eastern Markham Gateway Business Park, Cathedral, and 404 North Business Park. Markham Centre and South Cornell are to be built out largely as downtown-style office and mixed use developments. The lack of available serviced employment land to accommodate manufacturing will limit Markham’s ability to target and attract advanced manufacturing based operations in the life science and ICT sectors that may desire low-rise building formats rather than multi-storey office towers.

It is also relevant that over 90% of the unoccupied employment land that is available in Markham is through lease and at the time of our study there were virtually no industrially-zoned properties for sale. This lack of availability of saleable sites has contributed to the perceived lack of demand for serviced industrial sites.

4.2.6. Summary of Cost Comparators

Figure 38 provides an overall summary and ranking of the competitive analysis based on the selected economic indicators. Based on the business cost variables and key general comparators, Markham is second along with Vaughan. Laval, Quebec ranks first amongst the selected municipalities.

These rankings only relate to the comparisons used in the preceding analysis, and should be interpreted with discretion, as they do not determine the overall competitiveness of a municipality. There are too many direct and indirect elements that impact the business attraction and site selection process for such a conclusion to be made. Further, the “weight” a prospective company may give to any of these comparators varies. Nevertheless, when interpreted solely based on the specific comparators chosen, these rankings suggest that the Town should be viewed by the business community as a competitive location for business investment.

4.3. Innovative Comparators

While economic indicators are important in determining a community’s overall competitiveness, prosperity is also dependent on a jurisdiction’s capacity to support innovative firms, institutions and people. For this reason it is appropriate to examine Markham in the context of an innovation environment. The following discussion gives consideration to a range of key measures of innovation that can be used to drive economic development policies and programs. These include:

· Education Attainment

· Labour Force by Occupation

· Ethnic Diversity

· Technology Establishments and Employment

4.3.1. Educational Attainment

School board results and the level of educational attainment can provide insight into the skill level and quality of the local labour force. A high quality school system produces skilled workers and is an asset to the community in terms of attracting knowledge workers and their families. Figure 39 depicts the results of province wide assessments at the secondary level for Markham High Schools as well as Ontario and Quebec school boards.

These assessments are used to measure student achievement against curriculum expectations. Markham high school results were above the provincial standard for academic mathematics and the provincial literacy test.

Figure 40 shows school attendance and educational attainment for the selected cities. Markham had the highest level of the population between the ages of 15 - 24 attending school full time at 73% while Laval had the lowest at 61%. The dominant educational attainment level is University for all the selected cities with the exception of Laval where the majority of the population have a High School level education. Markham is characterized by a highly educated population with the second highest proportion of the population reaching the University level at 39%, slightly below the highest proportion of 41% in Ottawa.

4.3.2. Labour Force by Occupation

Figure 41 displays the labour force by select occupations in management and the natural and applied sciences which include managers, engineers, scientists and technicians. Markham had the highest proportion of the population with occupations in management at 15.7% while Laval had the lowest at 11%. In the natural and applied sciences occupations, Ottawa was first among the selected cities at 15% while Markham was second with 10.1%.

4.3.3. Ethnic Diversity

Figure 42 illustrates the population by visible minority groups. Markham had the largest proportion of the population comprised of visible minorities with Chinese and South Asian representing the largest groups at 30% and 13%, respectively. Toronto and Mississauga also had significant levels of Chinese at 11% and 6%, respectively, as well as South Asians at 10% and 15%, respectively. Laval had the lowest proportion of the population comprised of visible minorities at 9%.

Ethnic diversity was also examined by comparing place of birth of new immigrants. Figure 43 list the top 5 immigrant places of birth for the selected cities. Markham has a significant percent of the population from Hong Kong (25%) and China (13%). The neighbouring York Region municipality of Vaughan has a dramatically different source of immigrants with 36% of the population from Italy.

4.3.4. Technology Establishments and Employment

Figure 44 displays the technology sector by selected sub-sectors and indicates the number of establishments and employment in the selected cities. When comparing the number of establishments and employment figures, the size and the population of a municipality should be taken into consideration. It should also be noted that employment figures for Laval were not available for the 4 digit NAICS sectors listed. Within the technology sector, Markham has particularly high employment levels in Computer Systems Design and Related Services; and Computer and Computer Equipment and Supplies Wholesaler-Distributor.

4.4. Key Findings from Competitive Analysis

The following points summarize our findings from the competitive analysis:

· The Town performs well against other jurisdiction when consideration is given to a range of key economic and innovation indicators. Business costs are competitive with select jurisdictions with the Greater Toronto and the Town has the capacity to support the growth of innovative firms, institutions and people.

· The Town of Markham has been very successful in creating a high quality environment for its residents. With its numerous parks and recreational areas, amenities and convenient location to many attractions, Markham has become a prosperous community and an attractive place to live. Markham has excellent transportation linkages with easy access to major highways, rail, and airports.

· Individuals living and working in Markham enjoy the benefits and convenience of being located close to Toronto while living in a more suburban environment. As pressures to intensify the use of land within the GTA communities increase, the nature of the community will shift from suburban to a more mature, urban environment. This is evidenced in the rising cost of housing and greenfield development, increasing intensification, heightened use of public transit, and a shift in form of housing stock from single family to semis, townhomes, and condominium development.

· As with many communities across Ontario, Markham businesses are experiencing difficulty recruiting for skilled and semi-skilled positions. The perceived high cost of housing and property tax rates combined with the historical lack of housing choices, are a deterrent for some workers, particularly those at lower income levels. The lack of accessible public transit that connects Markham with surrounding jurisdictions is also seen as a recruiting issue.

The next section of our report focuses more particularly on the capacity of the Town to manage and direct new business and industrial investment activity. In conjunction with this discussion is a review of the internal and external resources that the Town of Markham has at their disposal for achieving their economic development agenda.

5. Local Investment Capacity Assessment – Organizational Resources

An important consideration in determining the focus for the Town’s economic development strategy is the local capacity to manage and direct new business and industrial investment activity. The purpose of this section is to review the resources that the Town of Markham and its partners are dedicating to economic development and examine how they are being used. The overview will identify where priorities rest and how they have changed over time. Since economic development is rarely the sole domain of the municipality, this section will also examine the different organizations that are having an impact on the community’s economic development efforts.

The Town is currently focused on targeting high-technology investment opportunities, whether they occur from existing or new industry. There is also an emphasis on both retention and attraction of high-technology business investment.

While tourism opportunities exist within the Town, tourism marketing is an initiative of the Regional Municipality of York and not in the Town’s annual marketing strategy.

Also of growing importance and value to Markham, is the Town’s emphasis on partnerships with organizations that allow it to achieve objectives in ways it could not otherwise. These occur both with regional organizations such as:

· Toronto Region Research Alliance (TRRA)

· Greater Toronto Marketing Alliance (GTMA)

· YORK Biotech

· Innovation Synergy Centre in Markham (ISCM)

· York Technology Association (YTA)

and with organizations whose relationship with Markham may focus on more regional needs such as:

· York University

· Seneca College

· Markham Board of Trade and

· Cultural/business organizations such as the Association of Chinese Canadian Entrepreneurs, Richmond Hill & Markham Chinese Business Association, Federation of Chinese Canadians in Markham, Canada Chinese Computer Association, Scarborough York Region Chinese Business Association, Confederation of Greater Toronto Chinese Business Association, Canada China Business Council, Taiwan Entrepreneurs Society Taipei/Toronto and Chinese Professionals Association of Canada.

The Town has also implemented an Economic Alliance Program that seeks to create a targeted international network of business relationships with communities and business groups in strategic market locations. To date this has involved initiatives with:

· Hong Kong Trade Development Council

· City of Laval, Quebec

· Haidian District of China

· Town of Cary, North Carolina

· City of Nordlingen, Germany and

· Wuhan, Hubei Province, China.

· More recently, the Town has conducted a program of outreach and investment attraction with technology companies in India and South Asia. This has resulted in two new investments in Markham, by Si3 of Pakistan, and by Trans Atlantic Infotech of Mauritius. Both of these companies have chosen to establish their North American headquarters in Markham.

5.1 Marketing/Business Planning

Establishing a marketing/business plan in is an integral part of the budget cycle and the consulting team was provided with copies of the Town of Markham’s business plans dating back to 1998. An examination of these plans provides insight into the relative importance that Markham has placed on different economic development strategies. Figure 45 below provides a summary.

Strategies that are characterized as having “High” importance are those that appear prominently in the marketing plans, have a large number of tactics identified towards their outcome and are allocated relatively large shares of the annual financial and human resources budget.

Strategies that are characterized as having “Medium” importance are those that appear often in the marketing plan, have a modest number of tactics identified towards their outcome and are allocated significant shares of the annual financial and human resources budget.

Strategies that are characterized as having “Low” importance are those that do not appear or are referenced lightly in the plan, they have few tactics identified towards their outcome and are allocated relatively small shares of the annual financial and human resources budget.

Figure 45

Relative Level of Priority Given to Economic Development Strategies (1998-2006)

Strategy	1998	2000	2002	2004	2006
Promotional Events & Campaigns to Selected External Target Markets with a Goal of Investment Attraction (e.g. GTA, ICI real estate community, domestic trade/business periodicals, national publications, international trade shows)	High	High	High	High	High
Promotional Events & Campaigns to Selected Internal Target Markets with a Goal of Investment Retention (e.g. sponsorship of local business associations, business visitation program, advertising in local publications)	Low	Low	Medium	Medium	Medium
Entrepreneurship & Small Business Assistance	Medium	Medium	Medium	High	High
Strategic Alliances (e.g. Laval, Cary, China)	Low	Low	Medium	High	High
Labour Force Development	Low	Low	Low	Low	Low
Infrastructure Development (e.g. employment lands)	Low	Medium	Medium	Medium	High

Source: Town of Markham Economic Development Marketing Plans & Budgets (1998-2006)

With respect to Infrastructure Development, it is noted that the Economic Development Department has stressed, for many years, the importance of maintaining a significant inventory of adequate employment lands. Hemson Consulting’s Employment Land Strategy of 2000 was a formal step in terms of this recognition. Since then, the Economic Development Department has put the non-conversion of this type of property as a high priority. In the last few years it has become apparent that unless significant measures are taken to retain employment lands, the Town will be limited in its land supply for desirable employers.

5.2 Economic Development Organizations Active in Markham

Markham’s Economic Development Department is situated within the Town’s Development Services Commission where it is aligned with other development and real estate services including: Planning and Urban Design, Building, and Engineering. Led by a Director of Economic Development, reporting to the Commissioner of Development Services, the Department consists of 5 full-time staff including: the Manager of Special Projects, a Senior Business Development Officer, a Business Development Officer, a Manager of the Small Business Enterprise Centre, and an Administrative Assistant. The Department’s mandate spans a wide range of economic development duties including: economic strategy and policy development, marketing and promotion, site selection location advisory services, small business and entrepreneurship development, targeted investment attraction and expansion, and targeted sector and partnership development.

Focused on the Town’s economic development goal to “Establish, promote and support Markham as the best location for diverse high-tech and related businesses”, the Department has played a lead role in branding Markham as Canada’s High-Tech Capital, and in launching and sustaining focused programs designed to distinguish and strengthen Markham’s competitiveness. Many of these programs have won recognition and awards at provincial, national, and international levels (over 50 awards received to-date). In recent years, with the encouragement and support of Council and senior management, the Department has focused increasingly on pursuing targeted growth through strategic partnerships. Examples include: the establishment of the Innovation Synergy Centre in Markham (ISCM), YORKbiotech, the Toronto Region Research Alliance, the Markham Small Business Enterprise Centre (MSBEC), formal economic alliances with 3 international technology centres, and the pursuit of a National Research Council research establishment focused on medical device development (NCMDD), among others. Through these services and initiatives, the Town has been successful in achieving growth and expansion in its targeted high-tech industry clusters, while also building an increasingly widely-known and admired reputation for Markham as a superior place to invest and do business in Canada.

Given the variety of partnerships and wide support for economic development in the community, it is appropriate to acknowledge the efforts and contributions being made by other organizations also involved with Markham in investment attraction and business development. There are a number of organizations that are based inside and outside Markham that influence economic development in the community.

5.2.1 Greater Toronto Marketing Alliance

The Greater Toronto Marketing Alliance (GTMA) is a unique public-private partnership of 27 municipalities and regional governments who work as an alliance, together with the Provincial and Federal governments, other non-profit organizations and a broad cross section of private sector organizations to market the Greater Toronto Area (GTA) to the world.

The GTMA was founded out of a desire to promote economic growth by projecting a single entity covering all the cities and towns in the region. Collectively these municipalities are seen by the outside world as one region. As most of the Greater Toronto Area’s (GTA) competition for investment comes from aggressive and well-organized, U.S. jurisdictions, the GTMA and its partners go where the investors are and present a compelling and consistent message about the GTA. This helps create the strong identity the region needs to compete internationally and makes it simple for investors to get information about jurisdictions in the GTA and gain access to local resources.

By implementing a strategic international marketing plan (e.g. promotional initiatives, publications, investment missions, seminars, trade shows etc.); the GTMA has identified key markets and industry sectors that will be aggressively promoted to attract further investment to the GTA. Most importantly, the GTMA acts as “one region, one voice” on behalf of the GTA by being the key point of contact for exploring business opportunities in the GTA. In doing so, it draws on the resources of both public and private sector partners to provide coordination of international promotional activities, essential business information and site selection services to facilitate investment coming into the area.

5.2.2 Innovation Synergy Centre in Markham

The ISCM is seen as a significant asset in drawing and fostering the development of small IT firms and other types of companies in the community. While it started as a ‘how do we support start ups’, it now helps primarily York Region/GTA firms grow and commercialize their proprietary research and development. ISCM helps companies/entrepreneurs with competitive intelligence, marketing, branding for smaller companies, finance and cash flow analysis external business consulting needs. As such, it is seen as only one of its kind in Canada. Having NRC, York University, Seneca College and industry associations as sponsors has also given it greater credibility. The Town of Markham was a co-founder of the ISCM, along with York University and the NRC, and continues to provide significant annual funding to the ISCM, as well as participates on its Board of Directors and in its programs.

By leveraging funding with programs such as Bell Canada’s Community Development Fund, the Town developed a business plan that garnered the interest of other founding partners: National Research Council, York University and RBC. As was shown above in Figure 48, the Town has contributed significant financial resources since ISCM was launched in 2003.

It was suggested by interviewees that the significant number of small companies emerging or locating in Markham could be attributed in part to the presence of the ISCM. The ISCM was identified as an example of local commitment to economic development that serves to differentiate the community from others in the region.

5.2.3 Markham Board of Trade

The MBT is a non-profit organization offering companies cost effective ways to promote their business and gain new leads through networking, sponsorship, advertising and volunteer programs.

With a membership of over 1,100 businesses, it is the Town’s largest business organization and functions in a way similar to a chamber of commerce. They have a number of mandates including: acting as the ‘voice of business’ when advocacy is required with local, regional, provincial and federal governments; promoting a buy local philosophy by offering a business directory, networking opportunities, newsletter and trade shows; education through seminars; and offering savings to business operators through group insurance plans, discounted rates for credit cards, use of the corporate board room for meetings and other plans from sponsors such as ESSO and Bell.

The Town of Markham collaborates with the MBT on a host of initiatives including: business retention – initiating co-visits with Markham employers; business expansion/attraction – jointly receiving in-bound foreign missions, conducting a pharma/biotech roundtable, identification of after-care opportunities; business start-up and entrepreneurship – Town participates in MBT Trade Show, MBT has membership on the MSBEC Advisory Board; real estate and site selection – annual open house event, working with investment prospects; economic strategy – Competitiveness Strategy Study Advisory Panel; marketing – joint business directory, inclusion of MBT material in Town information kits, Town attends monthly MBT luncheons; and strategic partnerships – purchase of promotional materials, Transportation Management Association, Markham Centre Advisory Committee, MBT Awards of Excellence.

5.2.4 Markham Small Business Enterprise Centre

Funded by the Town of Markham and the Ontario Ministry of Small Business and Entrepreneurship, since 2003 MSBEC provides Markham’s aspiring entrepreneurs and existing small businesses with high quality one-on-one management consulting, educational training, and the business resource needed to sustain their growth in today’s competitive marketplace.

MSBEC provides the following services with the following measures reported, where applicable, on an annual basis: single point of contact for business questions (number of general client inquires and web-based contacts); free consultations, by appointment, to review your ideas or business needs (number of consultations with new start-up, new existing, repeat start-up and repeat existing entrepreneurs); research stations and internet connections (number of walk-ins); a collection of resource materials for research purposes (number of walk-ins); affordable seminars that provide useful information and tools for operating your business (number of seminars/workshops held and attendance); networking opportunities (number of events hosted and attendance); referrals to business programs, financial providers, professional services and associations (number of consultations); and youth initiatives - Summer Company, My Company, Business Plan Competition (number of initiatives and participants).

To enhance its outreach and effectiveness, the MSBEC actively pursues partnerships with external organizations such as the Markham Board of Trade, Seneca College and the Markham Public Libraries.

5.2.5 National Research Council

In addition to its involvement and funding of the ISCM (through IRAP – the Industrial Research Assistance Program), the NRC is a consortium partner in the proposed National Centre for Medical Device Development (NCMDD) in Markham. Including the Town, York University, IBM, sanofi pasteur and a large group of private sector and public sector partners, the proposed NCMDD will bring together researchers and industry leaders from the life/bio sciences sector and the software/information technology sector to conduct research where these technologies converge, and commercialize their discoveries into marketable products with an emphasis on new medical devices. To be located in Markham Centre in a 200,000 sq. ft. building, the NCMDD will be an important source of R&D and commercialization expertise for all of Canada, and will attract related industrial and institutional investments that will enhance Markham’s reputation and competitiveness. This proposed facility will be the first NRC R&D lab in the Greater Toronto Area.

5.2.6 Regional Municipality of York

York Region Economic Strategy: A Vibrant Economy (June 2005) states: “In 2026, York Region will be renowned for its advanced technology, innovative businesses, supportive business infrastructure and highly skilled workforce.”

The Region’s economic strategy has three broad action areas: attracting and supporting business; encouraging continual learning; and promoting and supporting innovation.

Vision 2026 has established an important role for the Region to act in partnership with the area municipalities, senior levels of government, as well as other public and private sector partners to seek better understanding of how York Region’s economy works, and to create more detailed plans and programs to help sustain economic vitality.

York Region delivers economic development services through its Planning and Development Services Department. The Region understands the importance of integrating collective strengths of all the area municipalities to gain a competitive edge in the marketplace. As such, there is a clear line of “who does what” and there is little overlap in services with lower-tier municipalities. In practice, it does this in a number of ways.

The Region holds periodic municipal partner meetings to discuss regional initiatives such as participation in the Greater Toronto Marketing Alliance and other joint marketing and funding opportunities. The Region recognizes that lower-tier economic development services are focused mainly on promotion, retention/expansion of existing businesses, main street revitalization, new business attraction, international investment, business leader and ambassador programs. The Region’s Export Development and Tourism initiatives (see below) are supported by local municipalities and, for the most part, the local municipalities such as Markham do not overlap their service provision with York’s.

What York Region does for Markham:

The York Region Export Development Initiative has been operating for several years with a goal of helping small and medium-sized businesses increase awareness of export opportunities, enhance capabilities and secure export sales. An Export Resource Guide is available on the Internet and a full-time Export Development Counsellor helps with:

preparing export plans, researching and selecting markets; and

links to government and industry assisted programs for exporters, export logistics, immigration information and export training.

York Region Tourism is a collaboration of York Region and each of its lower-tier municipalities and allows the Town of Markham’s Economic Development Department to concentrate on non-tourism activities. One of York’s Strategic Objectives is to “Promote our tourism strengths, including forests, historic villages, parks and artistic and cultural activities”. Towards this end, a number of printed publications exist: York Region Visitors Guide; Take A Hike; Horse Country Guide; Arts and Culture Spotlight; Farm Fresh; and Key Note Conference and Meeting Planner. Located at www.yorktourism.com, the website’s focus is on arts/culture, boutique/antique shopping, recreation such as golf and hiking, horseback riding and boating and farm gate sales. Over 40 “Stay n’ Play” packages have been developed and are promoted on the website.

5.2.7 Seneca College of Applied Arts and Technology

Seneca officially opened its Markham campus in December, 2006. The new campus, which is located in Markham near the intersection of Highways 7 and 404, is in the former Allstate building. Seneca has converted the 10 storey building into a high-tech learning environment, with classrooms, computer labs and study areas as well as Seneca’s Corporate Training Centre, Office of Research and Innovation, and Business Research and Intelligence Centre.

The Town of Markham contributed $500,000 to Seneca College, which exemplifies the special partnerships that Seneca has with the community and businesses in Markham.

When fully occupied, the Markham building will accommodate up to 2,500 students. Seneca’s Markham campus now offers programs in Tourism and Travel, Business Computer Systems and will soon offer such programs as Brand Management, Business Intelligence Research Analyst and Interactive Marketing. The College’s aim is that the Markham Campus will become a resource for business research, corporate training and post-secondary education for industries and people living in the Town of Markham.

5.2.8 Toronto Region Research Alliance

The Toronto Region Research Alliance (TRRA) was formed in 2005 and the Town of Markham is currently one of two municipalities that provide financial contributions. This is a vivid demonstration of the Town’s commitment to pursuing advanced research and development.

The TRRA is a non-profit organization dedicated to making the Toronto region a world-leading centre for research and research-intensive industry by: attracting new research-intensive companies to the region and working to expand those already here; building public and private research capacity ; and enhancing the commercialization of research.

The TRRA is focusing its initial activities in three priority sectors where the region possesses impressive competitive advantages:

· Biotech/life sciences;

· Information and communication technology; and

· Advanced manufacturing and materials science.

The TRRA identifies one of its fundamental roles is to act as a neutral convener, facilitator, catalyst and advocate on issues and opportunities related to our R&D mission by delivering informed analysis, prompt cross-sectoral dialogue, and lead coordinated action. The aim is to empower the region to exploit its extraordinary strengths and compete more effectively in the international R&D marketplace. TRRA’s geographic region covers the Greater Toronto Area (including York Region), Guelph, Waterloo Region and Hamilton.

5.2.9 York Regional Biotechnology Cluster Consortium

YORKbiotech is a Regional Innovation Network at the centre of the Greater Toronto Area. Established in 2003, the mission of YORKbiotech is to act as a catalyst, harnessing the wealth of intellectual and technical resources to promote economic success and growth of the biotechnology and related industries as a key component of regional economic development.[6] The Town of Markham was one of the co-founders of YORKbiotech, along with York University, York Region and IBM among others, and continues to provide an annual financial contribution and to play an active role on the Board of Directors and in the programs.

YORKbiotech works with its partners and area businesses to facilitate the creation of new intellectual property, technologies, products, services and spin-off companies. It is also focused on strengthening the region’s small and medium sized enterprises (SMEs) and multi-national enterprises (MNEs) by linking them with regional assets.

YORKbiotech is seen as one of the strongest Ontario RINs for its size. It has also done a considerable amount of work to characterize the sector base in York region adding credibility to the premise that there is an emerging life science sector in the region.

5.2.10 York, South Simcoe Training & Adjustment Board

The York, South Simcoe Training & Adjustment Board, (YSSTAB), is one of 21 independent, non-government, not-for-profit corporations in Ontario. They have been mandated to direct the planning and delivery of federal and provincial training programs to make job and skills training more accessible, effective and responsive to local needs.

YSSTAB is governed by a Board of Directors that draws upon membership from seven sectors: business, labour, women, francophones, persons with disabilities, racial minorities and educators/trainers. Each of these sectors has a group of interested individuals who provide input to YSSTAB’s planning process.

The Board’s goal is to ensure that training will always be available to fit the needs of employers and workers within the growing communities of York Region and Bradford West Gwillimbury. Their objectives are:

· To work with the community to identify labour issues in York Region and South Simcoe.

· To work with the community to assess the labour market needs and to prepare community based action plans that address those needs.

· To act as a facilitator in bringing the appropriate community stakeholders together to work on partnerships as highlighted in our annual Trends, Opportunities and Priorities Report Maintenance of the Inventory of Programs and Services website.

5.2.11 York Technology Association

Active since 1982, the York Technology Association (YTA) has been a leading voice of the tech industry in the Toronto region. The Town of Markham was a founding organization of the YTA. It offers four main programs:

· Peer Groups Program – This is an opportunity for YTA members at many different functional levels to share and discuss issues that are common amongst peers. The Peer Groups are successful at solving business problems and it is a forum for soliciting advice in an exclusive and shared-learning environment. There are seven peer groups including CEO, Human Resources and Technical Professional Services.

· Training Program – YTA hosts or co-sponsors selected programs and seminars throughout the year that are focused on enhancing a company's performance.

· Breakfast Program – YTA’s breakfast seminars are organized around current issues such as the ins and outs of building business, keeping business, promoting your business, and leading your business to greater success.

· Luncheon Program -- Monthly luncheons are designed to keep members current on opportunities and technological advances. Speakers are leaders in the technology sector.

The Town of Markham is an corporate sponsor of the YTA, and regularly participates in the YTA programs and activities.

5.2.12 York University

York University is Canada’s 3^rd largest university, and is striving to become one of Canada’s preeminent research universities. Recently, the Ontario Science Innovation Council released their Innovation Index and ranked York University as Canada's third most internationally collaborative research university. York Research is a key part of the university’s interface with Markham and York Region.

In Markham, York Research was a founding partner of Innovation Synergy Centre in Markham, and is working in partnership with the Town, the Region, local businesses, and community organizations in several projects including YORKbiotech. York Research is also engaged with the Region of York as a member of the York Region Human Services Planning Coalition. There is a strong commitment to developing the Region’s high-tech sectors further, particularly as it relates to the convergence of IT with other key sectors – e.g. Life Sciences, Advanced Manufacturing.

The University is also leading the development of the Region’s high-tech community by dedicating time and effort to the cause. For example, the current Vice President of York Research Innovation, Stan Shapson, is Chair of YORKbiotech. In addition, York was a key partner in proposing the establishment of the National Centre for Medical Device Development in Markham – the first National Research Centre R&D lab to be established in the Greater Toronto Area. The NRC initiative further supports the University’s efforts to develop and grow SME’s in the ICT sector and to provide them with access to the resources and experts that they need to make this happen.

Figure 46

Summary of Economic Development Service Providers Supporting Markham

Example of Economic Development Initiative

Organization Involved

Extent of Current Role

Largely

Lead Role

Largely

Support Role

Economic Research & Supporting Data Collection

Town of Markham

Regional Municipality of York

Investment Attraction

Town of Markham

Greater Toronto Marketing Alliance

Markham Board of Trade

Toronto Regional Research Alliance

Ministry of Economic Development & Trade

National Research Council

Investment Retention

Town of Marathon

York Regional Biotech Cluster Consortium

Markham Board of Trade

York Technology Association

York University

Toronto Regional Research Alliance

Greater Toronto Marketing Alliance

National Research Council

Tourism

Regional Municipality of York

Entrepreneurship & Small Business Assistance

Markham Small Business Enterprise Centre

Innovation & Synergy Centre in Markham

Markham Board of Trade

York Technology Association

Toronto Regional Research Alliance

Strategic Global Alliances

Town of Markham

Greater Toronto Marketing Alliance

Markham Board of Trade

Labour Force Development

Seneca College

York University

York, South Simcoe Training & Adjustment Board

York Technology Association

Infrastructure Development

Town of Markham

Regional Municipality of York

Government of Ontario

There appears to be very little overlap in the mandate or objectives of each organization. Where some overlap is noted it is more in terms of the Town involving itself with regional partners whose objective is foreign investment attraction. However we would offer the following observations:

· The Town should maintain its level of involvement with its economic development partners, particularly those that are focused on external investment and attraction – TRRA, GTMA and Province. The Town is regularly in touch with these organizations but its involvement in their outreach activities is constrained by limited human resources.

· A BR+E (business, expansion, and retention) program will help the Town to better understand what it offers new small/medium sized firms and devise a strategy to retain and grow the existing base of firms/businesses. To this end the Town needs to better engage with this element of the business community. The challenge that Markham faces is how to effectively and consistently reach out to the significant number of companies that comprise this group.

5.3 Internal vs. External Models of Service Delivery

There are two common methods of delivering economic development services:

Municipal Department – About 2/3 of local economic development organizations are operated as a municipal service whose activities are overseen by Council. Within the municipal structure, economic development may report through directly to the Chief Administrative Officer or may be part of a larger department. In the latter case, economic development is most commonly paired with Planning to create a “Development Services” department. In many communities, Council has an Economic Development Advisory Board comprised of members of Council and members of the public and private sector.

The remaining 1/3 operate as separate corporations or commissions under the guidance of a Board of Directors. Most often, the Board of Directors will include members of Council as Council is often providing the largest share of corporate support.

Key characteristics of internal and external models are discussed in the following figures.

Figure 47

Characteristics of Internal Service Delivery

Commonly Cited Benefits of Internal Service Delivery

Cost and data collection efficiency
Greater ability to utilize land use regulations
Greater speed in processing development permits
One stop shopping
Greater internal cooperation

Commonly Cited Disadvantages of Internal Service Delivery

Hierarchical staffing & decision making
Public sector/political culture
Less flexible staffing and salary structuring

Figure 48

Characteristics of External Service Delivery

Commonly Cited Benefits of External Service Delivery

Improved perception by the private sector
Better able to function as a business advocate
Higher intra-municipal profile and credibility
Ability to strike partnerships with private and public sector and apply for government funding

Commonly Cited Disadvantages of External Service Delivery

Not under the same degree of public control
Accountability to the public is limited
Time spent by staff raising partnership support
Can be left out because not a direct part of the municipal team

The advantages and disadvantages that commonly characterize internal and external services should not be viewed as a right way or wrong way to deliver economic development programming. Both approaches have succeeded and failed. Unfortunately, there is no research available to show which model is more effective, more often.

The decision to go internal or external is really a local one. It is based on the challenges and opportunities that a community is facing. Since these change over time, it is useful to periodically evaluate whether or not the economic development model is appropriate.

The following table makes an effort to evaluate whether or not Markham’s existing structure is appropriate given current local conditions. The evaluation is based on results of discussions with interviewees, business survey and Executive focus group.

Figure 49

Evaluation of Markham’s Internal Service Delivery

Is Markham Economic Development Taking Advantage of the Benefits of Internal Service Delivery?
Cost and data collection efficiency	Always
Greater ability to utilize land use regulations	Often
Greater speed in processing development permits	Rarely
One stop shopping	Always
Greater internal cooperation	Always
Is Markham Economic Development Negatively Affected by the Disadvantages of Internal Service Delivery?
Hierarchical staffing & decision making	Rarely
Public sector/political culture	Rarely
Less flexible staffing and salary structuring	Often
Is Markham Economic Development Taking Advantage of the Benefits of External Service Delivery?
Improved perception by the Private Sector	Often
Better able to function as a Business Advocate	Often
Higher Intra-municipal profile and credibility	Often
Ability to strike partnerships with private and public sector and apply for government funding	Often

There is a business climate in Markham that fosters interaction between staff/Council and the business community. This means they are more familiar with the community and the business in the community. There has also been a strong and consistent message from Mayor and Deputy Mayor to the business community on the importance of business to the Town. This has resulted in a high level of engagement by business community in community led initiatives. Easy access to the Mayor is also seen as contributing to the high level of business engagement.

Markham’s economic development department is seen as having a good reputation with its external partners and its cooperative approach on many of its initiatives has added credibility to its position within the GTA economic development community. The involvement of staff and Council has also added significant credibility to the Town’s economic development program.

5.4 Community Perceptions and the Economic Development Office

In late-2001, the Town of Markham engaged Environics Research to survey Markham residents regarding their attitudes towards the future of the community. Environics Research classified residents in the following categories:

41% are Small Town Boosters 26% are Low Tax Advocates

19% are Big City Promoters 14% are Pro-market Enthusiasts

Figure 50
Viewpoints of Citizens of Markham

Viewpoint	Small Town Boosters 41%	Low Tax Advocates 26%	Big City Promoters 19%	Pro-market Enthusiasts 14%
Small town atmosphere OVER big city feel
Highest quality services & infrastructure OVER lowest possible taxes				Undefined
Public transit OVER network of roads				Undefined
Slower growth OVER high density development
Government controlled, green development OVER market-driven development
Family-centred entertainment OVER nightlife and cultural attractions				Undefined
Focus on day-to-day quality of life OVER Markham as a shopping and tourist destination and big projects
Grassroots participation OVER political leadership	undefined
Multi-cultural mosaic OVER melting pot	undefined	undefined	undefined

Adapted from: Environics Research (2001)

An observation with respect to these results is the fact that the Economic Development Department, in contrast to local residents, is very much a “Big City Promoter”. The Town’s ability to promote itself as a centre for innovation and entrepreneurs and attract the best companies and the brightest people will depend on Markham’s ability to:

· Create a place where young entrepreneurs want to live and work (“big city amenities”);

· Keep business costs as low as possible (including taxes); and

· Establish high density employment nodes.

Nonetheless, these are viewpoints that the Economic Development Office needs to be sensitive to and this will impact the messaging and positioning of any future economic development strategy. Given the timing of the original survey – October/November 2001, it may be prudent to revisit this survey with the residents of Markham as part of the input to the Town’s pending economic development strategy.

5.5 Performance Measurement

Performance measurement is a tool to determine how well a job has been done using both qualitative and quantitative information and activities. The Economic Development Department does identify existing measures in its annual marketing plans. These are most clearly laid out as it relates to the MSBEC. The following reasons make it important to track activity and performance.

· Providing public accountability

· Assisting with human resources management

· Using results to improve performance

· Identifying the return on investment

Unfortunately, performance measurement in economic development is not a common practice. To date, it has been unaffected by the Government of Ontario’s Municipal Performance Measurement Program, which has set guidelines for almost all other aspects of municipal service delivery including road maintenance, emergency services and governance.

This is something of an unacceptable situation and is slowly changing as economic development professionals see the merits in tracking performance so they can improve their operations. To a large degree though, they are reacting to negative circumstances – only tracking because their stakeholders are forcing them. Governors of municipal dollars cannot be blamed, however, as they are being increasingly pressured by their constituents to do more with less.

Not helping the situation is the fact that no research has been done, to date, on the most effective (or ineffective) economic development performance measures. However, in an effort to provide the Town with the latest information, the following section provides specific details measuring customer service and return on investment as it pertains to the business of investment attraction.

5.5.1 Providing Top-Notch Service

Economic development is a service business and investment prospects require a high-degree of attention. To effectively determine the client’s needs and identify possible solutions takes strong selling skills and a broad knowledge of the local and regional economy, certain industrial sectors, building/land development and the local business community.

Interaction with the client may begin with a single staff person, but as the project develops it is normal for many different Town and Region departments and outside organizations to be involved. To be consistently successful in attracting new business, the Town and other organizations in the community must be recognized as one team who are working towards the common goal of doing whatever it can to attract desirable investments. This seems to be working well in Markham as is displayed by its ability to complete large projects such as Markham Centre and the NCMDD.

As the key point of contact for investment inquiries, the Town should aim to consistently meet the “Gold Standard” of acceptable service. The following table shows how technology has accelerated the Gold Standard over the last ten years.

Figure 51

Evolution of Economic Development Services

Year	The Gold Standard Response Time	The Gold Standard of Economic Development Service
1996	48 hours	At the end of the call with the investment prospect the EDO says: “To help you better understand our community and the opportunities we have for you, I will put together a package that contains our Community Profile, Available Properties Guide and Lure Brochure. I will use Post-It Notes to highlight the pages that will be of most interest so you can quickly find the relevant information. I will courier that out to you tomorrow and you should have it in 48 hours.”
2001	Same day	At the end of the call with the investment prospect the EDO says “To help you better understand our community and the opportunities we have for you, I will send you an email before the end of the day that has several attachments including key excerpts from our Community Profile as well as hyperlinks to online listings of available property that closely meets your criteria.”
2006	While on the phone	During the call with the investment prospect, the EDO says “Do you have access to the Internet right now?” [YES] “Great, why don’t we go online and I’ll take you through our website so that you can download the relevant files. We’ll also go through our available properties directory and look at maps, photos and details of available properties which meet the criteria you’ve described to me.”

Overnight responses are no longer good enough. Communities must become more sophisticated in gathering/organizing community data and responding immediately to specific questions.

Markham has an opportunity to utilize the latest technology to provide top-notch client service. If the Town’s competitors are, then without it, it will be that much more difficult for Markham to be successful. If the Town’s competitors are not, then Markham has a leg up in the first 10 minutes of the selling process.

This is easy to measure, but it takes the economic development professional to make an honest self-assessment. Simply, how did we do? Did we meet the Gold Standard of Service for that client? Yes or no? If no, why not? Tracking this will provide, at the end of each quarter, the percentage of times the gold standard was met. Over the course of several quarters, the Department will see a trend and be able to proactively identify ways to improve.

There are other techniques that can be incorporated. The Department should make an effort to get feedback from their customers. Customer Feedback Surveys continue to be used in the private sector, but rarely in the public sector.

5.5.2 Return on Investment – Jobs and Taxes

The most commonly used measures to identify the success of an Economic Development Department are the numbers of jobs and taxes created. Sometimes it is the only measure that is requested or understood by stakeholders despite the fact that the objective of economic development projects is not always to create jobs and taxes.

There are merits to this measure but there are also dangers. In the past, Economic Development Departments have been accused of overstating their impact because some claim that the investment would have come to the community even without the support of the Department. For that reason alone, the Oakville Economic Development Alliance (OEDA) provides an innovative approach that Markham can utilize.

The OEDA created an “OEDA Factor” which evaluated, on a scale of 100, how much impact they had in attracting or maintaining an investment in Oakville. A factor of 75-100 indicates they were instrumental, 50-75% indicates a high degree of involvement, 25-50% is moderate involvement such as approval expediting and 0-25% is low involvement, such as assisting with start-up. The OEDA Factor is then multiplied by the total taxes and jobs to arrive at “OEDA Jobs” and “OEDA Taxes”. Furthermore, the OEDA went to the extent of contacting each company to ensure their factor was appropriate – in case a member of the community were to want to verify. The following table from the OEDA’s 2000 Annual Report provides an overview of this very innovative approach that Markham can utilize.

Figure 52

Measuring Impact of EDO on Jobs and Taxes

Furthermore, OEDA went to efforts to display that the municipality’s financial investment paid off in just over one year. In the following table the blue bar is the OEDA taxes (from above chart) beginning in 1999. In 2000, it is the OEDA taxes from 1999 and 2000. By the end of 2000, the level of recurring taxes from OEDA’s successes more than pays for the Town’s ~$500,000 annual investment in the organization (the yellow line). By 2002, the Town was receiving $1,025,866 in taxes (Town portion only) and their investment in OEDA was still ~$500,000. It should be noted that if a business closed or downsized, they were removed from ongoing tax calculations.

Figure 53

Direct Return on Investment: Paying for Economic Development

5.5.3 Some Measures to Consider

What’s most important in the preparation of qualitative and quantitative measures is to identify at the beginning of the period what the expectations are and to get agreement from the stakeholders. Determine “What do we need to do to be considered successful?”

Figure 59

York Region Vacant Employment Land Inventory: Infrastructure Servicing Status

One can see from the above charts that Markham appears to have a good deal of employment land inventory, however, there are challenges:

· Markham had the second highest absorption rate in York Region from 2001-2004 (16.0 ha per year) and this rate has not slowed as 28 hectares have been absorbed in the last 18 months[7] (~19 ha per year). At this rate there is about a 10 year supply remaining.

· The supply is scattered amongst a large number of small sites throughout the Town. No large areas of vacant employment land remain (see the following table).

Figure 60

Major Employment Areas in Markham

Area	Locations	Main Development Type	Description
Cachet	Highway 404 between 16^th Ave. & Major MacKenzie Dr.	Prestige Office	Narrow strip of property, ~60 acres remaining, little prime frontage on Highway 404 remaining
Cochrane	Highway 7 & East Valhalla Dr.	Prestige Office, Light Industrial	Low rise buildings fringed by high rise including proposed 450,000 sq.ft. plan for Great West Life, treed, curbed appearance
Commerce Valley	Highway 7 & Commerce Valley Dr.	Prestige Office, Light Industrial	30 acres for development, exposure to 404 and 407, perhaps one of the best sites in the GTA
Cornell	Bur Oak Ave. between Highway 7 & 16^th Ave.	Office, retail, residential	The Cornell Neighbourhood Commercial Centre is a mid-rise project - commercial at grade with two and three storey walk-up apartments above - which exemplifies some of the best principles of "New Urbanism".
Denison Steeles	Denison St. & 14^th Ave. between Warden Ave. & Highway 404	Industrial, Business Corridor	General and light industrial, distribution and mixed commercial uses on major arteries, low-rise buildings, only a few small lots remain
King David-Cathedraltown	Highway 404 between Major MacKenzie Dr. & Elgin Mills Rd.	Prestige Office, Business Corridor	Narrow strip of property, ~70 acres, non-office commercial on main arteries, under pressure for more commercial and residential development
Last Concession (Elgin Mills to 19^th) or 404 North	Highway 404 between Elgin Mills Rd. & 19^th Ave.	Prestige Office	Official Plan has designated as Business Park, large block of land. Current land owner initiatives would foresee development of a business park within 2 years
Markham Centre	Highway #7 between Rodick Rd. & Kennedy Rd.	Prestige Office, Retail	New downtown area, regarded by the Town as Markham’s premier new employment area. Anchored by IBM and Motorola, proposed site of NCMDD.
South Cornell (Box Grove)	Highway 407 between 9^th & Ressor Rd.	Business Corridor, Prestige Office	Redesignation of property has eroded prestige office component to only ~40 acres, primarily retail commercial
Valleywood-Allstate	North of Highway 7 between Highway 404 & Woodbine Ave.	Prestige Office	Best established and most mature development, campus style office buildings, 404 frontage, 2 or 3 lots left. Uncertain long term future of Toronto-Buttonville Airport may represent future business park opportunity.

· The Town’s most recent Employment Lands Strategy[8] recommended that between 1,500 and 2,800 acres of new land needs to be designated outside the urban boundary to meet employment targets.

· Of the two areas of employment land growth possibilities that were identified in that report in 2000, only one area remains available today.

· The Highway 407 East Area (407 between 9^th Line and Markham By-Pass) is now being built up on the south side with a mixed use retail and business park development with small acreages. The north side of Highway 407 between these two roads is designated as Hazard Lands with an additional Environmental Protection Area.

· The Highway 404/Elgin Mills area is now partially developed. South of the intersection the land has been re-designated to include a combination of residential, commercial and industrial. The industrial component is a narrow stretch of land nearest Highway 404. Still undeveloped is the land north of Elgin Mills to 19^th Avenue. Water and sanitary sewer infrastructure has not yet been extended this far. A large portion of the land between Woodbine and 404 is designated Industrial. It is important to note that both of these parcels of property were proposed as business park and industrial uses. Over time, growth pressures and economic opportunity have resulted in the uses being expanded to include residential and retail commercial uses.

· Although some industrial and non-retail commercial uses are still permitted in the remaining zones, the retention of a large (100-300 acre) parcel of land for prestige industrial and office campus style developments remains elusive. This style of development is important to the future of Markham as it continues to position itself for corporate headquarters and large institutional and private sector developments. If the Town wants to be the catalyst for once-in-a-decade or generation type developments such as IBM, it must have the capability to create a land deal. A campus opportunity was a critical component during IBM’s search for a site and, in that case, was done in partnership with Remington, a private developer.

There are only two ways to ensure this size of property remains available for a large user:

· The Town takes ownership of the property; and

· The Town resists all efforts to designate existing employment lands to residential and retail commercial and works in close partnership with the private developer.

Given the need for more employment land to meet the Region and Province’s population and employment targets, local planning and economic development staff with input from the Region should devise an industrial land strategy that includes the extension of water and sewer services to employment lands along the north part of the 404 corridor through Markham. The Town should also be focused on implementing plans that would establish significant employment opportunities in the east end of the community, especially in regard to a new business park and medical related development opportunities which may be generated by the planned expansion of the hospital district.

6.2 Other Important Physical Infrastructure Trends

6.2.1 Real Estate Costs & Ownership

· At $500,000 to $800,000 per acre[9] for serviced industrial or business park land, we see little short term opportunity for significant semi-skilled manufacturing or distribution sector growth specifically users of single storey, land extensive buildings. These types of uses are selecting locations further in the periphery such as Durham Region or in more land abundant areas such as Vaughan and Brampton.

· The high cost of real estate is encouraging high density uses such as office, and advanced manufacturing as has already been shown.

· As noted previously, Over 90% of the real estate stock that is available in Markham is through lease. In fact, there are very few industrially-zoned properties for sale. There are six developers who are dominant owners of office and industrial property and this lack of availability of saleable sites has contributed to the perceived lack of demand for serviced industrial sites.

6.2.2 Public Transit and Road Infrastructure

· These two interconnected issues were identified as the most significant barriers to future economic growth in the recent business survey. Excellent efforts have been made to create a region-wide public transit system; however, Markham still remains a difficult place for lower-wage workers to commute to. Workers arriving from south of Steeles Avenue are required to pay the cost of two fares (with few exceptions) and the pressures of rush hour traffic congestion contributes to a lengthy commuting time. Without a significant stock of lower-cost housing within its borders, these workers will continue to come in from Toronto from further distances.

· Peak hour gridlock is also an issue in retaining businesses. Transportation limits are constraining the growth of companies, especially as it pertains to employee attraction and retention.

· In a recent study completed by York Region^{^[10]}, employers suggested that a transportation infrastructure deficit exists in the Region, and that this deficit is imposing a heavy cost on their businesses and their employees. Employers expect that the Region, in concert with the Province, will place a priority on the expansion of the 400-series highways to meet already existing needs, and have suggested through their comments a number of other ways in which the effects of congestion could potentially be alleviated.

6.2.3 Utilities Infrastructure

· There is no concern regarding providing adequate water and sewer servicing to existing serviced lands, however, further residential development is expected to slow as allocations can no longer be made due to shortage of treatment capacity. Growth of industrial and commercial development is not impacted by this shortage. The current shortage of treatment capacity for residential growth is being addressed and is not anticipated to be a long term constraint.

· A reliable and ample supply of electrical power are essential to sustain the growth and expansion of Markham’s high tech businesses. Our stakeholder consultation suggested that there have been hydro distribution issues in the Commerce Valley Business Park which are being addressed aggressively, and to the satisfaction of electrical customers by the local distribution company Powerstream. The Town’s initiative to establish its own district energy provider (Markham District Energy), represents a potential benefit and competitive asset in serving the current and future energy needs of businesses in Markham.

7. Local Investment Capacity Assessment – Skills Profile

7.1 Business Survey Results

Earlier in the report, the characteristics of the local labour force were profiled in terms of occupation, education attainment, and post secondary education. In addition to this profile, a survey of local industries was also undertaken. Overall the survey was intended to provide a more fulsome understanding of the locational, demographic and economic attributes that make Markham attractive to industry – specifically Advanced Manufacturing, Life Sciences and Professional, Scientific and Technical Services.

The consulting team undertook a survey of 49 Markham-based businesses. Of particular interest are the skill and employee requirements identified by the various businesses.

The following tables provide some insight.

7.1.1 Skill Requirements

Looking to the future, what critical skill sets are most important for your business operation? By this we mean what specific education background or experience?

Education Background	Percentage of Respondents
Manual labour	8.2
High School	4.1
College	46.9
University	57.1
Sales and Marketing	14.3
Business Experience	24.5
Customer Service	4.1
Advanced computer skills	28.6
Engineering/Mechanical	22.4
Electronics	14.3
Trades	`8.2

7.1.2 Post-Secondary Institutions

On a scale of 1 to 5, where 5 is Very Important and 1 is Not Important At All, how important is the presence of post secondary educational institutions in making a location decision for your company?

5	4	3	2	1
4.2%	20.8%	27.1%	20.8%	27.1%

How would you score Markham in satisfying the need for a presence of post secondary educational institutions? Excellent, Good or Marginal.

Excellent	Good	Marginal	Did not know
8.3%	50.0%	29.2%	12.5%

7.1.3 Availability of Skilled Labour

On a scale of 1 to 5, where 5 is Very Important and 1 is Not Important At All, how important is the availability of skilled labour in making a location decision for your company?

5	4	3	2	1
37.5%	20.8%	27.1%	6.3%	8.3%

How would you score Markham in terms of the availability of skilled labour? Excellent, Good or Marginal.

Excellent	Good	Marginal	Did not know
14.6%	60.4%	20.8%	4.2%

7.1.4 Education Levels

On a scale of 1 to 5, where 5 is Very Important and 1 is Not Important At All, how important are education levels of the local labour force in making a location decision for your company?

5	4	3	2	1
10.4%	37.5%	29.2%	10.4%	12.5%

How would you score Markham in terms of the education levels of the local labour force? Excellent, Good or Marginal.

Excellent	Good	Marginal	Did not know
18.7%	64.6%	10.4%	6.3%

7.1.5 Employee Turnover

What rate of annual employee turnover are you experiencing?

Under 5%	42.9%
5% or Greater	51.0%
Did not know	6.1%
Mean = 6.2%

Is this problematic for your business?

Yes	22.4%
No	77.6%

7.1.6 Operating Challenges

In general, what would you say are your company's current operating challenges?

Issue	Percentage of Respondents Who Consider it a Challenge
Staff turnover / retention	2.1%
Increasing wage cost	0.0%
Inability to find the right type of people	20.8%
Sourcing additional export markets	0.0%
Trade barriers	0.0%
Expansion capability	8.3%
Access to Finance	0.0%
Competition/Maintaining competitiveness	16.7%
Attracting new customers/new sales	16.7%
Strength of Canadian dollar	6.3%
Nothing/None	14.6
Other	18.7

Considering your business environment, please explain the most important local issue or constraint that should be addressed to improve your business prospects in Markham?

In general, what would you say are your company's current operating challenges?

Issue	Percentage of Respondents Who Consider it a Challenge
Nothing	56.2%
Traffic congestion	6.3%
Problems with reliability of hydro/utilities	6.3%
Lack of public transportation	8.3%
Safety/security issues	4.2%
Incentives/tax breaks f or business	4.2%
Availability and cost of real estate	4.2%
Size/prosperity of local population	4.2%
Other	6.3%

These results are not unlike the results seen by York Region in its survey of employers in 2004.[11] As part of this work, York Region interviewed 75 businesses representing a range of business sectors, business sizes and locations. The following observations were identified in the Executive Summary:

· A number of businesses surveyed have experienced difficulties in attracting and retained skilled labour and trades and many anticipate this trend will continue, although the ability to attract employees in the general labour category is unchanged.

· Earlier sections of this report have noted the existing diversity of the workforce and the wide range of specialized skills that lend strength to the Region's economy. At the same time, skills shortage is a common theme. The economic opportunities in York Region are attracting employees from a wide area, with diversity of skills and professions, and from a broad spectrum of nationalities.

· The 2004 Employer Opinion Survey shows that there are several key elements to maintaining the diversity and skills of its workforce. Key among these and part of the Region's role is improving the range and affordability of housing within the Region to more closely match the needs of York's labour force and providing transit and transportation to move people to jobs. Similarly, York Region has taken a leadership role in providing the soft services needed by immigrant and new Canadian employees with its Human Services Strategy.

· Employers in this survey have also encouraged the Region to explore ways to support human services, training, and knowledge-based opportunities in order to maintain the diversity and skills of its workforce. The Region's role in training and education is limited and both the Federal and Provincial governments must be engaged to provide leadership and financial support for such programs.

7.2 Site Location Factors and International Markets

Understanding the decision-making imperatives that govern site selection is fundamentally important to developing a communication and marketing strategy. At the outset, Markham needs to continue to develop its marketing proposition around as many of the basic industry requirements as possible and couple this with success stories (like DVD) as they happen, as well as information and profiles of successful companies already in the community. It is equally important that staff and resource persons (i.e. local Ambassadors or the Town’s Leaders Committee) communicate these messages clearly when meeting with clients, site selectors, government officials, corporate executives and other influencers.

An important consideration in the development of a community’s offering will be the amount of relevant information that is available on a municipality’s website. In reporting on the top site location considerations, Area Development also reported that the single most important source for information on a jurisdiction is the internet. The more comprehensive and up to date the website info is, the fewer daily enquiries etc demanding staff time.

In completing an analysis of the Town’s economic sectors, a business survey of local firms was also undertaken. In total, 49 companies responded to our questions regarding their current business operations in Markham – 19 Advanced Manufacturing operations, 10 Professional Service firms, 10 Information, Communication and Technology firms and 10 Life Science firms.

Of particular interest was the response received to a question pertaining to priorities for a site selection decision.

The top ranking (important or very important) considerations include:

Telecommunication Infrastructure
Transportation Infrastructure
Local Taxation Costs
Reliable Energy Supply
Cost of Utilities
Access to Customer Base

A further consideration in the development of a Marketing Strategy to guide economic development efforts is the effectiveness of the various marketing tools available. In evaluating these tools we refer to the recent survey completed by Development Counsellors International – The Corporate View: Winning Strategies in Economic Development, 4^th Edition. Based on a U.S. survey of senior executives from a range of large and mid-size firms the following key findings were reported:

Dialogue with industry peers is the leading source of information influencing an executives’ perception of a state or region’s business climate. Articles in newspapers and magazines and business travel shared second place followed by meetings with economic development groups and on-line sources. Given the competition to attract business investment within the GTA, particularly as it relates to Markham’s target sectors; it is very important that the Town continue to ensure a high quality business environment and quality of life experience for its residents. The Town’s key employers, including the MBT Leader’s Committee should be aware of any initiatives or plans to improve or enhance the local business environment.
Planned visits to corporate executives, internet/website and public relations/publicity received the highest ratings among all economic development marketing tools. Internet/website showed the greatest increase. While the Town has been very successful in working with the Town’s larger employers, more consideration needs to the given to how best to reach some of the smaller but growing local companies. A formal Business Retention and Expansion Program this has been recommended.
Sixty five percent of respondents indicated a strong likelihood that they would use an economic development organization’s website in the next site location search. The executives named information on available incentives, demographic information and a directory of available buildings and sites as the most useful features of an economic development organization’s website. This reinforces the need for the Town’s economic development department to have a high quality website containing relevant and current data for use by investors and the business community.
When asked at what point in a site selection search they would typically contact an economic development organization, almost half of the respondents selected, indicated it would be after they had developed a short list of potential communities. Again this reinforces the need to ensure that there is adequate information available, from a variety of media sources, with which to evaluate the advantages and opportunities for investment in the Town.

The Province, the GTMA and the TRRA have recognized the importance of developing investment opportunities and relationships in the U.S. as evidenced by the amount of promotion and marketing conducted by each organization. The following table provides the Town with an understanding of the sectors and countries being targeted by the various key external investment attraction agencies.

Target Sectors

GTMA

Province - MEDT

Federal - Foreign Affairs

Information & Communications Technologies (ICT)

Asia

· Hong Kong, China, Taiwan, Tokyo, Seoul

Australia

India

UK/Europe

· South East Region of the UK, Netherlands

USA

· California, New York City

Asia

· Hong Kong, China, Taiwan, Japan

Australia

India/Pakistan

UK/Europe

· South East Region of the UK, Germany, Netherlands

USA

Australia

China

Europe

India

Japan

Mexico

USA

Advanced Manufacturing

Automotive

Aerospace

Design

Asia

· Hong Kong, China, Taiwan, Tokyo, Seoul

Europe

· Germany, Netherlands

India

USA

· Cleveland, Detroit

Asia

· Japan, Hong Kong, China,

Australia

Europe

· France, Germany, Italy, Netherlands

India

Mexico

USA

Australia

China

Europe

India

Japan

Mexico

USA

Energy & Environment

Australia

Europe

· Sweden, Netherlands

India

USA

Australia

India

USA

China

Europe

India

Japan

Mexico

USA

Business & Financial Services

Back Office

BPO and Call Centres

Asia

· Hong Kong, China, Taiwan, Tokyo, Seoul

India

UK/Europe

USA

· New York City

Life Sciences

Asia

· Hong Kong, China, Taiwan, Tokyo, Seoul

India

USA

Australia

Japan

India

USA

Australia

Europe

India

Real Estate & Infrastructure

Australia

France

Intermediaries

Asia

Australia

India

UK/Europe

USA

8. Community and Stakeholder Consultation

An important consideration in any investment attraction effort is the opinions and thoughts of those business and industry leaders that already operate within a select jurisdiction. Area businesses can provide an excellent source of up-to-date information or perceptions, as it relates to an area’s strengths and weakness as well as the opportunities and threats that may be confronting industry groups or a region as a whole.

A SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) was undertaken to examine the Town of Markham’s ability to support the attraction, retention and expansion of business investment particularly in the fields of Information Technology, Life Sciences and Advanced Manufacturing. This was accomplished through discussions with 22 participants in the form of telephone and personal interview sessions with local business owners and key stakeholders. In addition a focus group session was conducted with 8 representatives of the Markham Board of Trade Leaders Committee.

In addition, a further 49 businesses participated in a business survey designed at further informing the discussion of the nature and character of Markham’s growth industries.

The analysis provides insight into the perceived gaps and opportunities for the Town of Markham and serves to further inform the Town as to its current competitive position. The findings of the SWOT Analysis are summarized below.

A more detailed summary of the Focus Group results and Business Survey are provided as an Addendum to this report.

8.1 SWOT Analysis

8.1.1 Strengths

· Location: Markham’s location in the GTA and its proximity and accessibility to Highways 404, 407 and 401as well as Pearson International Airport and downtown Toronto has been an important element in the Town’s growth and its success over the long term. Its location on the northern edge of Toronto has meant the Town was historically a cost effective, suburban alternative to downtown.

· Significant Global Icons: IBM selecting Markham as a key location for a major research lab facility has had a significant amount of influence on the Town’s growth in the information technology sector. IBM’s arrival in the 1980s heralded a significant increase in the number of technology workers in the Town. This in turn acted as a catalyst to attract more Information Technology firms and head office development including Allstate, Steelcase, Motorola, ATI, etc.

· Focus on a Global Economy: Markham is considered unique in York Region, in that there are a significant number of firms in the community that are operating on a global level. In our survey of Information Technology, Life Sciences, Advanced Manufacturing and Professional Services firms, more than 57% of local firms indicated that they are exporting internationally to countries such as the U.S., China, Germany, India, the Asia-Pacific, the U.K., Europe, South and Latin America, the Caribbean and the Middle East.

· Strong Local Business Climate: The local business climate has fostered a high level of interaction between staff/Council and the business community. There has also been a strong and consistent message from Mayor and Deputy Mayor to the business community on the importance of business to the Town. This has resulted in a high level of engagement by business leaders in community-led initiatives. Easy access to the Mayor is also seen as contributing to the high level of business engagement.

· Strong Base of Volunteers: Markham has a significant volunteer base and people in the community are generally involved in what is happening in their community. Despite the Town’s rate of growth, it has maintained a small town feel, which in turn contributes to a high quality of life experience for residents. The business community is also seen as being very active, and this is particularly evident with the smaller local firms. This results in a better community overall and a stronger commitment to the Town’s overall success.

· Quality of Life: The Town has been very successful in creating an environment that contributes to a high quality of life for its residents. This is reflected in the performance of area schools, the quality of its retail areas, community centres, and the presence of traditional downtown neighbourhoods. There is a broader range of housing now than ever before and the Town has become more affordable to a wider range of incomes. In a survey of selected local businesses, more than 58% of those surveyed suggested that quality of life in Markham was a consideration in locating their business operations in the community. The high quality of life has also made it easier for businesses to attract and retain high quality employees.

· Exemplary at Branding: Markham historically has been very successful at capitalizing on its brand and trading on its success at attracting firms like IBM, Motorola, AMD (formerly ATI) etc. It also has developed a very good reputation with the region’s leading edge firms. This is evidenced buy the number of large and very large firms that the Town has successfully attracted to the community in recent years including CGI, Pfizer Canada and Panda Software. The consistent message from Mayor and Council and the follow up by local economic development staff have been instrumental to the Town’s success.

· Quality of Community Design: The Town has maintained a high standard for its built form and this has translated into a community that looks and feels different from other GTA communities. There are also regulations/standards in place that seek to further enhance the community including requirements for business insofar as design of buildings/landscaping. For its efforts the Town has won over 50 marketing awards and has been recognized by Utne Magazine (bimonthly American magazine with paid circulation of 225,000) as “one of top 10 most enlightened suburban areas in North America. The Town was also the first winner of “The Prince of Wales Prize for Heritage Conservation”, presented by HRH Prince Charles. In addition, Markham Centre will be the largest LEED certified development project in Canada and Cornell has been recognized in Canada and the USA as an excellent example of SMART growth and New Urbanism.

· In addition to its urban design and community awards the Town has won national, provincial and U.S. awards for the “Canada’s High-Tech Capital” campaign and two global Geographic Information Systems (GIS) awards for “Best Internet GIS Internet Application” presented by ESRI (one of the world’s leading providers of GIS software).

· Strong Reputation in Economic Development: Markham’s economic development department is seen as having a good reputation with its external economic development partners and its cooperative approach to undertaking many of its initiatives has added credibility to its position within the GTA economic development community. The added involvement and commitment from other Town departments and the Mayor and members of Council also adds significant credibility to the Town’s economic development program. This is particularly evident with the ongoing NRC initiative, where for the past several years the Town of Markham and York University have led a consortium working with the National Research Council to bring a substantial NRC presence to Markham. The focus would be on commercialization and “technology maturation” of innovations generated by bringing together R&D from the ITC and medical device clusters in the Innovation Corridor that runs from London, Ontario, through to Markham.

· Cost Effective Business Environment: Business taxes and residential taxes are seen as competitive when compared to other comparable GTA communities – Vaughan, Mississauga. The cost of real estate is also competitive, although it was noted that the cost of serviced employment land may no longer be cost competitive for some industries.

· Strong Contributor to GTA’s IT Cluster: There is a strong IT cluster in the GTA that is comprised of Toronto, Mississauga and York Region. Markham is seen as a success in attracting both businesses and employees in this sector. The Town has also been successful in attracting a high percentage of well educated and skilled new immigrants which further differentiates it from other regions of the GTA.

· Support for Innovative Economic Development: The Town is seen as a leader in developing innovative approaches to economic development. The ISCM was identified as an example of local commitment to economic development that serves to differentiate the community from others in the region. It has been a significant asset in drawing and fostering the development of small and medium size technology based firms to the community. While primarily assisting York Region/GTA firms grow and commercialize research and development, the reach of the organization extends into other regions of Ontario and Canada. It provides existing small companies with competitive intelligence, marketing, branding for smaller companies, finance and cash flow analysis and external business consulting needs. As such it is seen as only one of its kind in Canada. Having York University, Seneca College, the NRC, and several industry associations as active contributors has also given it greater credibility.

· The Town has also implemented an Economic Alliance Program that seeks to create a globe network of business relationships with communities and business groups in strategic market locations. To date this has involved initiatives with the Hong Kong Trade Development Council, the City of Laval, Quebec, the Haidian District of China, the Town of Cary, North Carolina, the City of Nordlingen, Germany and Wuhan, Hubei Province, China.

· The Town was also successful in attracting Seneca College to the former Allstate Building at Highway 7 and Highway 404, transforming the 10 storey office tower to an urban college campus with high-tech classrooms and computers on every desk, a fitness centre and student lounge, and Seneca's corporate training centre, which offers skills training to private industry. It is also home to the office of research and innovation and the business research and intelligence centre, which partner with companies to involve students in real world business research. The financial commitments from the Town coupled with the direct involvement of the Mayor were two key reasons for the success of this initiative.

· The Markham Space Race organized through a partnership between the Town of Markham, the Innovation Synergy Centre in Markham (ISCM), Great West Life Realty Advisors, Jim Brown of Colliers International, and FIT by Design – was a first of its kind contest that was introduced to stimulate the growth of Ontario businesses and provide much-needed support for small companies. The Space Race was open to entrepreneurial companies across Ontario that have been in business for at least two years, have a minimum of three full-time employees, and are IT or export-focused. The success of this initiative has led to a larger commitment by local and regional firms to repeat the competition in 2007.

· An Emerging Research Innovation Network: YORK biotech is seen as one of the strongest Ontario RINs. It has done a considerable amount of work to characterize and define the sector base in York Region adding credibility to the premise that there is an emerging life science sector in the region. Supported by a range of partners including the Town of the Markham, the mission of the organization is to act as a catalyst, harnessing the wealth of intellectual and technical resources to promote economic success and growth of the biotechnology and related industries as a key component of regional economic development.

· Strong Multi-cultural Connections: With 49% of the region’s immigrant population having located in Markham, The Town is seen as having a strong commitment to developing its multi cultural connections. This is evidenced in the economic alliances that have been developed with China and Hong Kong and the range of ethnic business associations active in the community. The Federation of Chinese Canadians in Markham (FCCM) in particular has developed an intercultural website that features a wide range of local ethnic communities and promotes services for new immigrants to the Town.

8.1.2 Weaknesses

· Transportation Network: While transportation access has helped to position the community historically, transportation limits are constraining the growth and the development of the Town. Increased congestion coupled with insufficient public transit is seen as an employee retention issue that needs to be monitored. 77.1 percent of the Markham business survey respondents indicated that Transportation infrastructure was an important or very important priority in a site location decision.

· The Availability of Public Transit: While the VIVA transit system is seen as a partial success, there needs to be dedicated transitways in the region for it to be fully effective. Employers are concerned with the accessibility and availability of public transit to employment areas and how they will be able to attract employees to the town over the longer term. The Region of York is awaiting additional funding commitments from Queens Park & Ottawa for the next phase of expansion.

· Increasing Land Costs: Serviced employment land in Markham is approaching $1 million/acre. As a result, the Town can no longer compete for industrial investment based on cost, and investment attraction efforts need to reflect this. By comparison however, lands south of Finch are fetching $3 million per acre. Part of the justification for the increasing costs in Markham and across the 905 region, is that all of the infrastructure costs are upfront. This is driving up costs by comparison to other regions and will impact what type of investment the Town is able to attract in the future.

· The Need for an Economic Strategy: While the Town through its Economic Development Department prepares annual business and marketing plans the Town does not have a comprehensive economic development strategy that provides a context for its investment attraction and business growth. The Town and the department need to answer some fundamental questions around the type of industries/businesses it is trying to attract and the actions it intends to take implement this vision for the Town.

· Limited Life Sciences Talent: Given the infancy of this sector, entrepreneurism is in its early stages and as result there isn’t a large pool of talent that can be recycled from one firm to another (as evidenced in the ICT sector). Few individuals have had success in commercializing ideas and products to enable them to start up another firm or act as mentors to emerging companies. Recognizing this fact the Ontario Ministry of Research and Innovation has awarded $3.5 million to 10 colleges under the Ontario Research Commercialization Program (ORCP) to help build college capacity for industry-focused research and commercialization.

· Lack of IT Workers in Markham: There are a significant number of high tech workers that are coming from areas outside of Markham. The Town needs to be concerned with its ability to attract workers to the community – both as residents and as a workforce.

· Lack of a Business Retention & Expansion Program: A BR&E program needs to be a consideration for the Town going forward. Given the significant number of small and medium sized firms the Town’s target sectors, the Town needs to articulate what it offers these companies and devise a strategy that identifies the growth potential of these firms and works to retain and support this existing base of firms/businesses.

· Municipal Trade Missions not seen as Effective: Independent trade missions are not seen as an effective economic development tool for Markham. There was a consistent opinion throughout our interviews that the Town needs to be part of the larger effort to market and promote the GTA/Province to be effective. The level of financial investment required to make an impact is significant and Markham does not have the resources to do this effectively. The Town could be more effective by participating more fully with the Province, the GTMA, TRRA etc. and involving a greater range of local ambassadors in key initiatives driven by these partner organizations.

· Difficult to Attract Knowledge Workers to Markham: One of the single biggest issues for local Life Science, ICT, Professional Service firms and Advanced Manufacturing operations is its ability to recruit the right type of people. This is particularly evident when trying to recruit new graduates. Aside from completing with downtown Toronto firms, Markham firms must also compete with Waterloo and U.S. jurisdictions for the same pool of graduates. Proximity to a university, availability of brick and beam buildings or loft conversions, 24/7 access to restaurants, nightlife, housing availability in the form of apartments or condos and access to transit during off peak hours all play a part in considering an employment offer. Historically, Markham has been viewed as a car-oriented family community rather than a community with great appeal for young workers or recent graduates.

8.1.3 Opportunities

· Refine the Vision: The Town needs to refine its vision of the type of community it wants to be and be seen for what it is – a suburban community that is transitioning to an urban community. This has implications for the type of housing that needs to be created, the type of industry it should be trying to attract and the type of amenities that it will need to provide its residents. Part of this vision also needs to reflect an appeal to a younger resident.

· Role for Board of Trade: The ISCM and York Technology Association indicated that they would like a closer working relationship with the MBT in the area of event hosting and marketing to ensure that the message as to available resources is getting to the business community. This concern may be justified given that 85.7% of the 49 Business Survey respondents indicated that they had not attended any of the local networking events, programming or conferences hosted by the Board of Trade, YORK biotech, York Technology Association, or the ISCM.

· Tap into the Brain Trust: The Town should look for ways to better engage the retired business leaders in Town. There are a significant number of small companies that would benefit from the knowledge, advice or mentoring that some of the Town’s larger firms or former/retired employees could provide. The Town should work with ISCM to create a matchmaking program between retired professionals and emerging IT firms.

· Intensification of Employment Areas: Given the finite supply of employment land the Town needs to be a leader in looking at innovative ways to intensify existing employment areas and business parks. Accommodate a broader range of employment uses within existing business parks perhaps through the creative re-use of select buildings. Give consideration to new loft construction as a way to better accommodate smaller firms and technology firms. Attention needs to be given to construction trends and how to encourage the adaptation of existing building stock to changing business needs in terms of space needs, flexibility, shared common areas etc.

· Strengthen the Mandate of ISCM: The Innovation & Synergy Centre Markham should operate as a turnkey operation for business start ups providing one stop shopping for business clients – business expertise, professionals, accountants, and lawyers etc. The ISCM also needs to raise the level of awareness around its services and communicate local success stories. The Town should also consider providing a longer term commitment to funding in order to build effective programming and opportunities locally. Secured funding remains an issue for the organization and to that end MRI has provided limited funding through to 2008. The Town should consider funding the ISCM in the same manner.

· Define Markham’s Role in the Life Sciences Field: There is a lot interest and attention being given to small Life Science firms in the GTA, but as these companies evolve there will be a need to accommodate their growth in larger facilities, often in other jurisdictions. In order to determine Markham’s competitive position to attract these firms there is a need for better competitive intelligence around who is growing and then a more effective targeting effort can be planned. The Town should explore opportunity for more collaboration with YORK biotech and TRRA in this regard, but also seek more feedback and discussion on issues and events affecting the region’s Life Sciences sector.

· Improve Marketing of Life Science Sector: The Town needs to articulate its strategy for developing its Life Science sector and whether that will mean a focus on SMEs or Fortune 500 firms. In this regard the Town should continue to work with partner organizations (YORK biotech and TRRA) to promote and develop this sector nationally and internationally. Particular attention should be given to developing a comprehensive inventory of life science firms in the community that reflects how the sector is currently defined in the GTA.

· Leverage Economic Development Partners: The Town should broaden its involvement with its economic development partners particularly those that are focused on external investment and attraction in Markham’s target sectors – TRRA, GTMA and Province etc. (e.g. participating in TRRA IT Study, participating in the GTMA Ontario Technology Corridor Program, GTMA’s trade mission to India, etc.) Other organizations that the Town should be actively working with include CATA, iTech Ontario. To date the Town is not seen as having had much involvement due to insufficient staff availability and resources.

· Develop National/Global Icons: Historically, Markham has had strong global icons that have enabled the Town to draw attention and investment to the community. The NRC initiative is an excellent example of an opportunity to develop a 21^st century icon for the Town. The National Centre for Medical Device Development is intended to help Canada capture a larger share of the very lucrative worldwide market in medical devices, estimated at $300 billion annually and growing. A further objective of the NCMDD is to fill the gap created by the lack of a significant NRC presence in the GTA Innovation Corridor. At the present time, there is no NRC research footprint in Ontario between London, Ontario (the Integrated Manufacturing Technology Institute (IMTI)) and the National Capital Region, despite the fact that approximately 40% of all R&D conducted in Canada happens in this area.

· Increase Post Secondary Education Opportunities: Continue to work with York University and Seneca College to ensure a significant amount of relevant programming occurs in and moves to the Town of Markham, particularly where it will enhance Markham’s target sectors. The naming exercise for the Markham building is seen as step forward in this commitment to provide post secondary educational programming in Markham and to raise the profile of Markham in this regard. Having a University campus affiliated with the community would also be seen as an asset – Kitchener, Oshawa, Durham, Burlington, and Brantford have taken this approach.

· Develop Performance Measurements: In order to demonstrate the success or effectiveness of the Town’s economic development program consideration should be given to a range of metrics that illustrate its progress. These should be developed in conjunction with the business community and program delivery. An example of the range of metrics that may considered have been discussed earlier in the report and include the development of marketing action plans with prioritized deliverables, measuring customer satisfaction through the use of feedback forms and the leveraging of dollars through seniors levels of government and private sector partners.

· Strong Support for China Strategy: Give consideration to developing a Markham/Chinese Business Council. Maximize the local business connections by sponsoring a Fellowship at York University for a candidate from China or Hong Kong. The Town should work locally to achieve results. While there is value in travel to other jurisdictions there may be little opportunity initially to attract new business investment other than enhance opportunities to increase the export activity of local firms, China is not seen as investing oversees so much as acquiring oversees businesses to offset increase demand for product and services.

8.1.4 Threats

· Retaining Employment Land Inventory: The Town faces a significant challenge ahead in protecting/maintaining land for employment uses given the competition for residential development and the fact that the lands are owned privately. Landowners will have a hard time holding on to the land over the long term rather than the more immediate return on investment that residential represents. For this reason the Town may wish to acquire and hold strategic parcels.

· Protection of Strategic Sites: Key employment lands, particularly along the 404, need to be protected against demand for large retail sites and the pressure for more residential lands. This may require that the Town finance the purchase of said lands as a way to ensure development for desired employment lands.

· Business Retention: The Town faces significant challenges in retaining the IT firms that are in the community. There is a trend to offshoring tech jobs and advancements in technology are reducing the need/demand for space generally. The impact of globalization is also being felt in the IT sector as firms centralize activity; consolidate suppliers and compete for staff.

· Lack of Commitment to Employment Uses: There is a perceived lack of commitment to the development of employment uses when compared to residential development. Historically, Council has focused on the attraction of high tech/life science firms and has made it clear that they are not in the general industrial game. However, there is a significant amount of industrial activity in the community that can described as high tech or advanced manufacturing and much of this activity is in the Life Science and ICT sector. Advanced manufacturing should continue to be an option for the Town and efforts should be made to develop and expand this base of industry. The Town is going to receive a significant allocation of employment under the Province’s Growth Plan and it will not be able to accommodate all of the growth through the attraction and growth of life science and technology firms.

· Competition from China: It is widely held opinion that China is in an acquisition mode and not an investment mode and that the only value in visiting China may be to assist in the development of export markets for local firms. If there is to be a ‘China’ strategy it should specialize in the industry that has already established itself in Markham. International trade missions have to be focused. Attention cannot be limited to just China – India, Pakistan and other areas of Southeast Asia may also be candidates and the Town should leverage the opportunities that may exist to development linkages with other elements of it population. The Greater Toronto Marketing Alliance has a Business Mission for India planned for February 2007 geared specifically to ICT and ICT related businesses including Financial Services, Business Process Outsourcing, Research and Development, Software design, and ICT enabled Advanced Manufacturing.

· Transportation Network: Given the outflow of commuting workers that occurs daily, much of the Town’s east/west and north/south transportation network have issues at peak hours. It can no longer be assumed that employees will continue to travel great distances for work. This attitude is changing and is likely to have a long term impact on the ability of local firms to recruit and retain employees. The development of Markham Centre, which promotes live, work, and play locally, should help to overcome some of the transportation issues.

9. Recommendations

Based on the preceding analysis, the consulting team makes the following recommendations.

1. The Town needs to articulate a clear vision for the community as it transitions from a suburban community to an urban growth centre. This has implications for the type of housing that needs to be created, the type of industry it should be trying to attract and the type of amenities that it will need to provide its residents. This vision also needs to reflect an appeal to a younger workforce.

2. More direct involvement with the business community is required to better understand the value that Markham creates for these businesses. There needs to be more regular contact with local industry, particularly growing small and medium sized firms in the Town’s target sectors perhaps through the creation of a more formal BR+E program. Economic Development needs to focus on developing better and broader relationships with business and industry. Focus should be on local business development and expansion and less on business attraction. To this end the Town should look for ways to provide more functional support to local businesses and industry.

The Town should look for ways to better engage the brain trust that resides in the Town. It was suggested that The Town has a significant number of small companies that need the knowledge, advice or mentoring that some of the Town’s larger firms or former/retired employees could provide. The Town should work with ISCM to create a matchmaking program between retired professionals and emerging knowledge based firms.

The Town has contributed significant financial resources since ISCM was launched in 2003. In order to ensure its continued success consideration should be given to providing a funding commitment for a longer period (e.g. 3 years) to enable the ISCM to provide a better range of business seminars and more outreach to local entrepreneurs in the form of events and networking opportunities as well as the more comprehensive marketing effort.

The Town should increase its level of involvement with its economic development partners, particularly those that are focused on external investment and attraction e.g. TRRA, GTMA and the Province. Other organizations that the Town should consider actively working with include CATA, and ITAC Ontario.

Historically, the Town has played a key role in the development of YORK biotech. At this time, the Town needs to articulate its strategy for promoting and developing the life science sector in the future and the role Markham intends to plan. This needs to be clarified with its partners in this sector as part of developing a stronger relationship with these organizations. As part of a larger GTA based Life Science sector, the Town must also continue to work with its external partners to promote and develop this sector.

3. The Town should focus its business attraction and support efforts in 4 key sectors, with particular emphasis on pursuing attraction and investments by value-added functions such as R&D:

o The convergence of ICT and Life Sciences as evidenced by Markham’s strength in advanced manufacturing – in particular electrical equipment and component manufacturing, magnetic and optical media manufacturing, medical equipment manufacturing, navigational, measuring, medical and control instrument manufacturing and industrial machinery manufacturing;

o Information, Entertainment and Cultural Industries – in particular software publishers, data processing services, telecommunication firms and advertising firms, and the advantages inherent in the diversity of Markham’s population;

o Professional, Scientific and Technical Services – in particular computer systems design and related services, architectural, engineering and related services and other business services;

o Finance and Insurance – in particular head office and back office operations.

4. In recommending these target sectors to the municipality, one needs to consider the opportunities for employment and assessment growth through the attraction of new industry to the community, but it is equally important to consider the opportunities of growth that result from the expansion of existing local industry. For this reason we would recommend that the Town develop an approach to its target sectors that incorporates both perspectives.

5. In identifying the target markets for these investment attraction efforts it is apparent that both the GTMA and the Province are targeting the same jurisdictions. In our opinion more comprehensive discussions with the GTMA and Province needs to occur in order to understand the future programming and business plans being developed for marketing and outbound trade missions. Based on discussions with representatives of these organizations and out research, it would be appropriate to have Markham focus a portion of its marketing and investment attraction activity on jurisdictions within the U.S., India and Asia (particularly Japan and Hong Kong).

6. The location quotient, business pattern and labour location quotient data also point to the town having a significant competitive advantage in wholesale trade. However, the consulting team does not recommend this as a chosen sector for the following reasons:

o It is not an efficient use of land both in terms of taxes generated or employment created per acre;

o The cost of land is becoming increasingly prohibitive and lower cost jurisdictions are located immediately north and west;

o It offers largely low skill and low paying jobs, which do not match Markham’s housing supply;

o Businesses who rely on a workforce coming from “low rent” areas outside of Markham are already frustrated with congestion and a lack of well inter-connected and rapid transit system does not make Markham attractive;

o Traffic congestion concerns will only be exacerbated with increasing numbers of wholesale trade businesses; and

o It does not fit with the Town’s innovation strategy.

7. It is important for the Town to retain the employment lands it currently has for office building and industrial development. The availability of a very large (100-300 acre) parcel of ‘campus style’ property is a significant variable holding Markham back from attracting additional significant world-class investment in information technology, life science, finance, insurance or advanced manufacturing. The Town should consider taking strategic measures (including ownership of employment lands) to ensure property remains available for this type of employment land use.

8. Further to the point above, the Town should look to the development of a Markham Research and Incubation Park. This would assist the Town in differentiating itself from Mississauga, Toronto and Waterloo.

9. Utilize the data made available through the Economic Sectors Analysis to update promotional materials, community profile, investment profiles and other Markham documentation.

10. The involvement of Town Council, and particularly the Mayor, has always seen as a very positive factor in the Town’s economic success. The Town should continue to engage the Mayor, Council and staff in the same manner.

11. While a higher cost of living and costs to business is evident, Markham is well-regarded for the quality of its built environment. This distinguishes the community and has helped it to become a community that can attract the best minds and the best companies.

12. Retain an economic development service that is operated through the Town and that works effectively in collaboration with economic development related private sector and public sector partners.

13. In order to demonstrate the success or effectiveness of the Town’s economic development program, consideration needs to be given to a range of metrics that illustrate its progress. These should be developed in conjunction with the business community and program delivery.

[1] 2006 population estimates are provided by MapInfo Canada based on Census variables, FP Markets – Canadian Demographics 2006, November 2005.

[2] 2006 population estimates are provided by MapInfo Canada based on Census variables, FP Markets – Canadian Demographics 2006, November 2005.

[3] Community Snapshots: Recent Immigrants Living in York Region, York Region Publications.

[4] Community Snapshots: Recent Immigrants Living in York Region, York Region Publications.

[5] In 2006 the Region of York collected new origin-destination data. This data is expected to be released in 2007 and should be examined for updated trends.

[6] YORK biotech, January 19, 2007, http://www.yorkbiotech.ca/

[7] Town of Markham Economic Profile – Mid Year 2006 reports that 149 ha (370 acres) of serviced and market ready land is available. In the chart above, York Region states availability of 177 ha in January 2005. As such 28 ha (177-149) have been sold in 18 months.

[8] Hemson Consulting Ltd. (2000). Employment Lands Strategy. Prepared for the Town of Markham.

[9] Town of Markham Economic Profile – Mid Year 2006

[10] Regional Municipality of York (2004). 2004 Employers Opinion Survey.

[11] Regional Municipality of York (2004). 2004 Employers Opinion Survey.

Service	Examples of Measures for Year One
Overall	· Marketing Action Plans with a prioritized list of achievable projects for each service and measurable targets completed each fiscal year, including objective review of the previous year’s activities · Successful leveraging of $x through senior levels of government and private sector partners · x% customer satisfaction based on feedback forms
Investment Attraction	· A website that is making use of the latest technology to improve the access that prospective investors have to information on Markham · A website that the EDO can use while on the phone to better understand the prospect’s needs · An up-to-date Community Profile with data that is relevant to target sectors · An up-to-date online Available Properties Guide containing information on vacant industrial and commercial property. All property profiles should be easily emailed · x% of incoming investment inquiries while on the phone with the prospect · x% of customized responses should be delivered within 24 hours · completed feasibility studies to determine status of investment opportunities · x jobs created, using a “Markham Factor” · $x taxes created, using a “Markham Factor” · Growth of x% of investment prospects and influencers who consider Markham to be a viable business location · Lead:Success ratio that improves continuously · $ investment per lead, prospect and success.
Business Retention & Expansion	· The Economic Development Department is aware of changes in industry patterns and is ready to act should an opportunity arise · x% of business people understanding the role of the EDO and how it can help them and their peers · x% of red flag issues resolved within one day, one week, one month, etc.

2.2 Labour Force and Employment

4.2.5. Rates for Office/Industrial Space and Price of Employment Land

5.2 Economic Development Organizations Active in Markham

5.2.1 Greater Toronto Marketing Alliance

5.2.2 Innovation Synergy Centre in Markham

5.2.3 Markham Board of Trade

5.2.4 Markham Small Business Enterprise Centre

5.2.6 Regional Municipality of York

5.2.7 Seneca College of Applied Arts and Technology

5.2.8 Toronto Region Research Alliance

5.2.9 York Regional Biotechnology Cluster Consortium

5.2.10 York, South Simcoe Training & Adjustment Board

5.2.11 York Technology Association

5.2.12 York University

6.1 What Will Drive Future Growth?

7.2 Site Location Factors and International Markets

8.1 SWOT Analysis