Update Report on TradeLink Toronto

The Economic Development Committee recommends the adoption of the following report (March 11, 1999) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

This report reviews the various activities of the Economic Development Division (EDD) and its partners, Centennial College and the National Trade Centre, in the development and delivery of the TradeLink Toronto initiative at the National Trade Centre (NTC), and outlines activities planned for 1999. The attached TradeLink Business Plan is the work plan and operating agreement by which the partners will operate TradeLink at the NTC.

TradeLink Toronto (also referred to as "TradeLink" throughout this report) is an economic development initiative combining:

(1)physical space at the NTC;

(2)a series of programs focussed on increasing exports from Toronto businesses; and

(3)a Community Development Corporation.

Funding Sources, Financial Implications and Impact Statement:

No immediate financial implications. In accordance with Economic Development's 1999 operating budget.

Recommendations:

It is recommended that:

(1)the business plan outline for TradeLink for 1999 be approved in principal and forwarded to the Board of Governors of Exhibition Place for consideration;

(2)Economic Development staff enter into negotiations with the Interim General Manager of National Trade Centre and the Interim General Manager of Exhibition Place to formalize an operating agreement for TradeLink to include appropriate allocation of costs and revenues;

(3)the 1999 budget for TradeLink be presented to Economic Development Committee once the operating agreement has been formalized; and

(4)the City Solicitor be instructed to advise on the restructuring of TradeLink Corporation's Board of Directors.

Background/History:

EDD fulfils its mandate by working across a number of strategic industry sectors in partnership with a variety of outside organizations. Promoting trade and export development has always been a focus of our efforts; however, with the opportunities afforded to the City by the National Trade Centre, this area has become an increasingly important element in EDD's activity mix.

The TradeLink initiative was formulated under the former Metro and "TradeLink" was adopted as an official mark of Metro. A Community Development Corporation has been formed, the business has been registered as TradeLink Toronto, and TradeLink is now a strategic and integral component of the Business Development and Retention unit of the amalgamated EDD.

The mission for TradeLink remains unchanged: "TradeLink, a unique combination of Economic Development space and programming within the National Trade Centre, will maximize wealth creation through the growth of trade and investment within Toronto Region's economy.

The strategic objectives supporting this mission are:

-growing trade, exports and investment;

-developing international business;

-accessing key markets; and

-linking the regional economy with the world economy."

The TradeLink program is an extension of EDD's current activities. It is a set of programs designed both to support the mandate of the Division and the NTC, while at the same time generating some new revenues in a more entrepreneurial fashion outside those traditionally funded by the taxpayer.

Update:

In the past year, TradeLink has been formally promoted to trade organizations, consulates, and trade-related programs of the federal and provincial governments, as a prime facility for hosting trade-related events. Proposals for joint funding, joint programming, and ongoing in-kind support were developed, and presented both to groups such as Trade Team Ontario and to individual organizations.

Working with the organizers of selected trade shows at the NTC, TradeLink has offered space, programming and information services during several trade shows. These services highlighted Toronto as an international business centre, to offer advice and information to export-ready businesses represented at the shows, and to assist both NTC and the show organizers in enhancing the shows through value-added programming and services.

TradeLink has also provided information on international markets, export support programs, financing options, trade show opportunities, and other export-related opportunities, to Toronto Region businesses. Enquiries have been triggered by promotion and public relations efforts (including a presentation review which appeared in the Silicon Valley North newspaper), by referrals from Small Business Centres and other EDD activities, by referrals from the Canadian Technology Network, and by TradeLink's activities during trade shows at the NTC.

TradeLink's programming partner, Centennial College Centre for Entrepreneurship (subsequently referred to in this report as "Centennial"), has offered a number of trade-related seminars and workshops at the TradeLink facility, both as part of trade show programming and independently, and these have also served to highlight the City's support to local businesses in areas of export-readiness, trade logistics and financing, and international marketing.

Preliminary negotiations were held with potential sponsors and suppliers for the additional equipment required to bring the facility to state-of-the-art. The DX-Net proposal by the Design Exchange, which would use the TradeLink facility as a network site for co-ordinating international design bids, has received funding.

To a certain extent, these TradeLink activities have contributed towards achieving one of the benefits anticipated of the National Trade Centre: "help Metro become a focal point for trade in the northeast, and assist Canadian business in reaching the international market more effectively and economically".

Comments and/or Discussion and/or Justification:

The incorporating documents for the TradeLink Corporation set appointments to the Board based on official positions that no longer exist ie. Chairman of the Municipality of Metropolitan Toronto. With amalgamation, amendments are necessary to the by-law of the Community Development Corporation defining the composition of the Board of Directors. This represents an opportunity to include on the board of directors representatives from all TradeLink partners: from the Board of Governors of Exhibition Place, Economic Development Committee, management from the National Trade Centre, Centennial College. Representing the business community, a representative from the Alliance of Manufacturers and Exporters Canada would also be desirable. The legal process for accomplishing this change must be determined.

A single staff member has been assigned to TradeLink by EDD, and part-time Centennial staff at TradeLink include a highly qualified trade consultant, and clerical staff for marketing activities. This staff complement, and the fact that, as a self-funding initiative, only $16,500 of City funds has been allocated to the service, will necessarily restrict the proposed work plans for TradeLink during 1999.

TradeLink activities in 1999

(1)TradeLink Information Service

TradeLink provides a "one-stop-shop" for information about trade, exporting, export financing and foreign markets. Clients of this service include EDD staff and their clients, participants in TradeLink training programs, show exhibitors and visitors, and local businesses. The service also provides information research to the marketing unit of the NTC, and to show organizers. For example, TradeLink & EDD staff assisted NTC's Marketing Department in attracting the new InterMed '99 trade show to the NTC, and are also working with the show organizer on marketing and programming.

This service directly supports EDD's goal to enhance the capacity of local firms to grow and compete nationally and internationally. It increases the appreciation among Toronto businesses, of the City's support for exporters. Through intelligence gathering and information sharing, it increases EDD's knowledge of the export-readiness of local businesses. The service also assists the NTC and show organizers to attract and enhance trade shows, thereby increasing the contribution of the NTC to the local economy.

(2)International Trade Training Programs

Centennial College Centre for Entrepreneurship, TradeLink's programming partner, has established relationships with a number of significant players in the export training area, and as their agent offers export training programs at the TradeLink facility. These programs are offered on behalf of the Forum for International Trade Training, Team Canada, Canada Mortgage and Housing Corporation (CMHC) and the Canadian Importers Association. Centennial also delivers programs on effective marketing at trade shows with private sector trainers. As appropriate, the programs may also be hosted by the City's Gateway Office and Small Business Centres.

These sessions will be promoted widely by Centennial and the program sponsors, and will be held at TradeLink regularly throughout the year. Both the promotion and the seminars will increase awareness among businesses of the roles that TradeLink and the NTC play in increasing international trade from Toronto.

(3)Trade Show Programs

Centennial continues to work with trade show organizers and the NTC to develop and offer programs to complement show themes. For example, TradeLink was the venue for "featured country" activities during the CNE, enhancing the business-to-business component of an otherwise consumer-oriented show.

Other TradeLink initiatives add an exporting component to the shows, thereby increasing the awareness among show organizers and exhibitors of the support and encouragement that the City and the NTC give to exporters.

Both the trade training and the trade show programs will be offered by Centennial on a fee-for-service basis. EDD will provide in-kind support, including market research assistance, tailored information services during the programs, and audio visual and office facilities.

(4)"International Business Links" at selected Trade Shows

Based on the success of similar initiatives during 1998 such as the Royal Agricultural Winter Fair, TradeLink will offer an "International Business Links" facility during selected trade shows. The service will include a Resource Centre providing information on local businesses and the Toronto economy, for both investors and foreign buyers and exhibitors. EDD will also make sector specialists available for individual consultation with foreign exhibitors and visitors.

With sufficient sponsorship, TradeLink will also be able to arrange for individual business meetings between foreign exhibitors and local businesses, and between local exhibitors and foreign buyers, in business-like surroundings immediately prior to and after the shows.

Such activities should enhance the value of the trade shows for visitors and exhibitors alike, and help to position the NTC and the City as key in fostering international business. The availability of such a unique service at the NTC should encourage trade shows to use the NTC, thereby contributing to EDD's goal to attract new business the City.

(5)Exporting assistance to Local Business

TradeLink's facilities and services, will be part of the portfolio of City services promoted to local businesses by the Economic Development Officers and Sector Development Officers of the Business Development and Retention unit, and at the Small Business Centres. EDD staff will have first-hand experience of the export training programs through attendance at Team Canada's Going Global seminars. Sector specialists, and the staff of EDD's Investment Marketing unit, will be involved in TradeLink activities as appropriate. The TradeLink information service will proactively alert EDD staff to exporting programs and market opportunities, as appropriate to their business constituents.

In this way, TradeLink will directly support the EDD goal of enhancing the capability of local firms to compete nationally and internationally.

(6)Co-ordination with other Trade-related Organizations

Throughout the year, TradeLink, EDD and Centennial staff will be in contact with trade-related organizations such as Trade Team Ontario, bilateral Chambers of Commerce, and trade associations. TradeLink will use these networking opportunities to further promote the use of TradeLink's facilities and services, and their sponsorship and joint programming potential.

This activity should enhance co-operation on export initiatives between the City and other levels of government, as well as increasing the prominence of the NTC and TradeLink as agents for export promotion within the City of Toronto.

(7)Liaison with Industry Associations

TradeLink will actively promote its facilities and services to industry associations and local business associations. Many of these hold trade shows, networking events and exporting seminars, for which the TradeLink facilities at the NTC would be an ideal venue. TradeLink's information services can also be marketed to local businesses through their industry associations, which may also sponsor the service as a member benefit. TradeLink will also provide articles, presentations and other expert services to the associations, as a way to reach their members and as a marketing and promotion opportunity for TradeLink and the NTC.

By positioning itself to industry associations as a focal point of exporting information and programming, TradeLink will enhance the City's image among association members as in ideal place to do international business. TradeLink will thus leverage the associations' national reach, and serve as a marketing channel for the City.

(8)Training and Orientation for Trade Missions

TradeLink has been successful in hosting overseas trade missions, and orientation and training for participants in such missions.

The closer involvement of other EDD staff, particularly those in Investment Marketing such as the International Alliances Coordinator, will also be an advantage in an NTC-EDD-Centennial partnership for mission-related events. We anticipate that such orientations will be funded by the hosting organization, either Team Canada or the overseas agency.

(9)Trade Show Incubation

The agreement with NTC allows TradeLink to offer trade show floor space to "incubate" or develop new trade shows, by providing no cost/low cost floor space. TradeLink will work with the NTC in evaluating opportunities for, and developing, new trade shows.

This activity will develop new customers for the NTC and will enhance EDD's services to strategic industry sectors in Toronto.

(10)Physical Space at the NTC

Three aspects of physical space require further attention.

(a)TradeLink space at the NTC is also used independently of TradeLink services,

as adjunct space to shows occupying the main halls of the NTC;

(b)The agreement with the NTC allows TradeLink yearly access of up to one million

square foot days of space elsewhere in the NTC; and

(c)TradeLink's windows are an ideal site for sponsorship by export-related organizations, particularly those in the public sector. Diagrams of the TradeLink space at the NTC are included in the TradeLink Business Plan, attached.

For TradeLink and its partners to fully develop the revenue and activity potential of these vertical and horizontal spaces, a cost and revenue sharing process needs to be agreed between the Board of Governors of Exhibition Place, the NTC and TradeLink.

(11)Promoting TradeLink Facilities and Services

Promotion of TradeLink as a focal point for local exporters will be inherent in the marketing of the programs and services described. Networking and negotiating meetings with trade-related organizations, industry associations and show organizers will promote TradeLink to those organizations who deal directly with export-ready businesses. Presentations at association meetings, articles in their newsletters, direct mail advertising of seminars offered at TradeLink, and the client call program of EDD, will all be channels to reach export-ready businesses directly. Through close co-operation with the Marketing Department of the NTC, TradeLink will also promote its services to trade show organizers.

(12)Revenue and Cost Allocation Issues

The original concept of self-sufficiency as outlined in Report No. 27 of The Financial Priorities Committee for TradeLink as adopted by the Council of The Municipality of Metropolitan Toronto at its meeting held on November 20, 1996 remains: "EDD has a goal of achieving self-sufficiency of the TradeLink program over time. It is expected that, at program maturity (year five), program costs will be fully offset by program revenues." The programs planned for 1999 were selected for their effectiveness and alternative funding options are considered so as not to compromise the quality of the services offered.

Nor have the difficulties anticipated in EDD's 1996 report changed. "It will require a significant effort on the part of EDD to generate and sustain these revenues because of the nature of the business mix of TradeLink. . . The programs which will be delivered at TradeLink, such as trade/export training or the hosting of incoming trade missions, are now typically low cost/no cost services which will have to be priced in accordance with the sensitivity of the marketplace.

Similarly, facilities such as the meeting room and the theatre are often perceived as "give-away" items to show producers and event organizers and will, therefore, demand limited revenues."

Marketing efforts in 1997 and 1998 have shown these assessments to be accurate, and it has proved hard to distinguish the high quality programming and information services offered by TradeLink, from the space that TradeLink occupies. However, the NTC's competitive position as a trade show venue lies not just on the space, but on the superiority of the services provided to show organizers, and TradeLink is one such unique service that the NTC offers.

In the same 1996 report to Council, it was proposed that an agreement be made on the appropriate allocation of costs and revenues between the various parties, and that in particular allocation of costs to the TradeLink program be phased in over a four-year period, to lessen the direct impact on the tax base. Similarly, it was recognised that revenues from TradeLink activities will accrue in several places, including the NTC in incremental revenues for parking and other services. In 1997 and 1998, revenues for TradeLink activities also accrued to EDD's partner, Centennial College for Entrepreneurship.

The agreement proposed in the 1996 report to Council has not been completed. As EDD and Centennial negotiate with other organizations for joint programming, signage and other promotions of export-related initiatives, shared access to electronic facilities such as DX-Net, an agreement between all current parties, and encompassing access, ownership, revenue sharing and cost allocation has become critical. A copy of Report No. 27 of The Financial Priorities Committee, as adopted by the Council of The Municipality of Metropolitan Toronto at its meeting held on November 26, 1996 can be found in Appendix 1.

Conclusions:

The partnerships described in this report will continue to support EDD's efforts to promote international trade in Toronto, enhance the services of the National Trade Centre, and support potential exporters.

Contact Names:

Maggie Weaver, TradeLink Coordinator, Economic Development 263-3510

Brenda Librecz, Managing Director, Economic Development 397-4700

Bruce Graham, Director, Business Development & Retention 392-3381

Eva Pyatt, Manager, Sector & Strategic Partnerships, Economic Development 392-3378

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(A copy of Appendix A attached to the foregoing report was forwarded to all Members of Council with the March 29, 1999 and April 6, 1999 agenda of the Economic Development Committee and a copy thereof is on file in the office of the City Clerk.)