The first meeting under the new governance structure took place at noon on Friday, November 19. It didn't take long to demonstrate how new it was.
The meeting was of the Investment and Economic Prosperity Committee (IEPC), chaired by Joe Swan and chosen by Bud Polhill, Steven Orser, Matt Brown, Paul VanMeerbergen, and Denise Brown. The mayor attends ex-officio.
He certainly was there for the inaugural meeting which he pronounced “monumental”. The master of understatement Fontana is not; when he is excited about something, you know it. And he was certainly excited about this. This is where it will all happen. This is where London will get kick-started.
But the first item of business in these situations is to select a vice-chair. And here, it seems, the committee had already run into some potential dissension. Why else would the chair announce that this committee was so important that it needed two vice-chairs, Matt Brown and Paul VanMeerbergen?
This is indeed a first, to the best of my knowledge. However, the decision was not challenged by the members; no one wanted to start off with a showdown over who would be the favoured son.
Joe Swan is no slouch when it comes to chairing a meeting. He spent little time on expressing his thanks to the committee for showing confidence in him but got right down to business, introducing Steve Baker of the London International Airport who was reporting on what was happening with the $11M investment of taxpayers’ money to establish the airport as a cargo hub.
The reports in the London Free Press had not been kind. Industry insiders had been interviewed and they had claimed that the report from the airport was less than credible. Not much was happening there.
Swan pointed out the “misinformation” in the press. He was sorry that the reporters had not sought out the citizen appointees on the board of directors.
I’m not sure it would have made a difference. A few years ago, when a “fly by night” flight school at the airport was exploiting its Chinese student,s I tried to get some answers from those directors to no avail. The school is gone now, rent unpaid and students left stranded, having to return home with their families’ and villages’ hard earned cash spent and nothing to show for it. But despite promises, no one followed up, not at the airport and not at the London Economic Development Corporation.
Baker gave the pitch that one could anticipate from reading the report: business was up 249 per cent increase, based on weight shipped, and a 39 per cent increase in airlines served. But times are not good. Globally, things are in a slump, even in China. But there are great opportunities ahead if we just take advantage of them.
If only we had a free trade zone right here in London. Baker has approached the minister of finance about this and he could use some support. Look at us. Canada is the only G8 country without a true free trade program, a place where goods can be stored and processed duty free. But there are a lot of legislative barriers. Applications are too cumbersome. It’s too expensive; there is too much financial risk. We need legislative changes, a bit more give on the value-added limits. And duty relief applies only to duties and not to taxes. There is an opportunity to reverse the offshore manufacturing trend.
London would be the perfect spot to have a pilot project for a free trade zone. We could provide a good test market.
I was a little surprised by this. When the improvements to the airport were being pitched at council a few years ago and the airport got all that money, it sounded as if the free trade zone thing was in the bag. But now they wanted the city’s help with this, lobby the federal government, put on some pressure.
And something else the city could do. There’s the area airport community improvement plan which gives qualified industries tax rebates for improvements. The province modified this plan some years ago limiting the incentives to the expansion of existing businesses. After all, it is not in the interest of the provincial government to have businesses running from city to city in search of ever better tax deals. But now, according to Baker, power is back to the municipalities. So perhaps the committee could develop a lobbying strategy with government to allow those changes. It sounded a lot like trying to get around the “bonusing” provisions of the Municipal Act. But then, the legislation with regard to bonusing is rather murky. And of course taxpayers would have to make those rebates possible.
Fontana declared the report “staggeringly positive” even on the cargo side. “We should be jumping up and down,” he said. It drives him crazy when there is such good news and the media don’t take the time to get the facts. He went on to discuss his China trip; it got people asking if, should they need to ship a bunch of stuff in a hurry, do we have the facilities?
“We are positioned really well to take advantage of the opportunities,” he concluded. Enhancing the airport community improvement model was a great idea.
There were a few questions and observations at the end of the presentation but none of them particularly critical. No one asked about the comments in the paper the previous day. And no one asked whether the 30 jobs were net new jobs. What has the airport delivered to date to justify the $11M in taxpayer subsidies?
Then it was on to terms of reference. The mandate is “to promote economic activities that will result in economic stimulus, wealth creation and improved quality of life.” It’s a big job. The specific areas of consideration ran the gamut of economic development and investment from tourism to highway interchanges to library services. EIPC will report on these and many more to council.
The committee agreed to use the staff-prepared terms of reference as a working draft, but not before adding a few more topics. Fontana wanted the inclusion of health care and hospitals, Orser wanted foreign investment, and VanMeerbergen predictably wanted the specific inclusion of roads.
Fontana stressed the importance of prioritizing in order to get the “best bang for our buck.”
And the bucks are not all that many. City treasurer Martin Hayward reminded them that they were already up to $700M in their special projects wish list but they had to “crunch that down to $100M”, the amount that could be generated over the next five years. If the tax levy gets into the budget, that is. Many of those on the committee had voted against it at council.
This sobering piece of information started a new round of debate. Fontana was concerned about the timelines. They would have to work around the busget; there would have to be a lot of meetings. There might be industrial opportunities and there’s a shortage of land. He wouldn’t want to be too prescriptive. Maybe some leveraging opportunities would come from the province or the feds. Witness the 401/402. He might not be able to wait until December next year when some levy money may have rolled in. “Sometimes I like to run before I walk,” he acknowledged, “But we have to be nimble.”
City manager Jeff Fielding pointed out that they had yet to firm up two projects, the downtown and the 401 interchange and Hayward reiterated that they would have $100M in 2016, not before.
That wasn’t good enough for Pohill. He wondered if there was “any reserve fund we can tap into and then pay it back?” He thought there might be some great opportunities coming out of China.
Hayward pointed out the reserve funds are dedicated funds, and the city doesn’t have a hefty amount. Of course, council can always re-direct. That’s a political decision. He mentioned the $2M that the city sets aside yearly for affordable housing. But that leverages a lot of public and private investment as well as providing construction jobs.
Orser wondered what happens if the 1% levy doesn’t pass at budget time. “Where do we get the money?” Hayward pointed out that the only option would be to sell off city assets but you have to be careful you aren’t selling off something that gives you a good return like the 6% interest on the London Hydro promissory note.
Swan was adamant. They needed the equivalent of 1%, but they haven’t finished discussion of where to get it. But if they don’t get it, “we can’t proceed.”
He entreated the committee to remember that it is dealing not just with economic stimulus, but with wealth creation. It's an important distinction. “We’re not just the spending committee,” he pointed out.
That said, they got down to the business of setting dates for future meetings, not an easy task what with the holiday social scene and family obligations and stuff.
The next meeting will be December 3, the day after the minister gets back from China which is being paid for by the city manager's office, not from the $30,000 dollars just handed over to the mayor's office.