January 4, 2000

To: Economic Development and Parks Committee

From: Joe Halstead, Commissioner Economic Development, Culture and Tourism

Subject: 1999 Third Quarter Business Development & Retention Client Activity

All Wards

Purpose:

In accordance with the Economic Development Division's 1999 Work Plan, this report provides a summary of the completed investment projects and related business activities of the Business Development & Retention Section, for the third quarter of 1999.

Financial Implications and Impact Statement:

There are no financial implications resulting from the adoption of this report.

Recommendations:

It is recommended that this report be received for information.

Background:

The 1999 Work Plan of the Economic Development Division calls for quarterly activity reports. Business Development & Retention section has three operating units: Field Offices, Sector Development and TradeLink Toronto. The 1999 first quarter report from the section provided details of the Division's Corporate Calling program undertaken by the Field Offices; the second quarter report focussed on the Sector Development activities of the section. This report summarizes third quarter activity of both those units, and also features the activities of TradeLink Toronto.

Comments:

Corporate Calls and Company Contacts

The Corporate Calling program is an important process for developing strong relationships between the City and major businesses in the City. Corporate calling and client contacts represent approximately 35-40% of the time allocation for the Business Development & Retention staff in the field offices. A corporate call provides an effective opportunity to gain understanding on future corporate plans and to facilitate implementation of those plans in a Toronto location. Corporate calls also allow the Division to effectively inform our clients about municipal issues, policies and programs that affect business operations. In turn, for Economic Development Division, the calls are a primary source of development leads and an opportunity to influence investment decisions.

Building relationships with business, through Corporate Calling and marketing to the local business community and related business associations, represents the most effective means for staff to influence business investment decisions which impact the creation of new jobs and assessment. Business Development and Retention staff continue to focus on influencing business investment decisions by getting involved with companies earlier in the business investment cycle.

In the third quarter, the following client contacts and activities were completed:

ACTIVITY NUMBER OF CONTACTS, TOTAL

3 ^RD QUARTER YEAR TO DATE

Corporate Calls 163 708

Company Contacts 439 2,391

New Jobs 260 2,191

Completed Projects 9 28

Retained Jobs 1,401 3,395

Total Floor Area (includes 1,063,270 sq.ft 3,319,545 sq.ft.

existing and new space)

During the third quarter of 1999, corporate calling and company contacts helped to implement several business expansions, relocations and start-up operations (completed projects). Occupancy increases, the creation of new jobs and the retention of existing jobs is reported in the above table. Economic Development staff involvement as well as a summary of those investments are provided on the attached Project/Investment Activity Summary.

An example of staff involvement is the assistance provided to Intercontinental Warehousing Ltd., 225 Rexdale Blvd., Etobicoke.

Intercontinental has constructed a 300,000 sq.ft. building, one of the largest industrial projects seen in this area in 10 years. The applicant hired a general contractor to carry out site plan and building permit applications. Due to poor communications between all parties, required information was available when required in order to have the project completed by year-end. Our Economic Development Officer was able to keep the project moving forward, facilitate the resolution of issues all the while demonstrating to the client that the City was still very interested in his investment. As a result of this intervention, the project is now nearing completion.

Sector & Strategic Partnerships

Staff in the Sector Development & Strategic Partnerships group work with those business sectors that have been identified as supporting the long term objectives of the Economic Development Division. These are sectors with high growth potential in terms of incremental investment and job creation that have sufficient companies locally to benefit from our efforts, and to help each other.

The Sector Development program is critical for developing strong relationships between the City and the industry groups in the City. During the third quarter 1999, Sector Development Program staff worked on several initiatives. The following are just two brief examples:

Economic Development Division (EDD) supported the Shopping Passport program of the Toronto Events Promotion Association (TEPA). As part of The WRAP Festival, a special holiday shopping promotion held during a slow tourism period from early November to the end of December, the Passport is used by visitors who have made hotel reservations through the Shopping Package. It delineates five shopping districts, including more than 300 stores in Toronto to encourage visitors to shop in these areas, with an opportunity to win a $15,000.00 shopping spree.

The $7,000.00 budget allocation from EDD was combined with funds from the private sector, Tourism Toronto and the Ontario government to create $40,000.00 in sponsorships and a further $50,000.00 in marketing dollars from the partners. The WRAP Festival was promoted to more than one million newspaper readers in U.S. border states and other regions in Ontario. It is expected that more than 4,000 hotel room nights will be booked through the promotion. This 1999 promotion is also expected to attract more retailers in jurisdictions outside the city core for The WRAP Festival 2000.

A second example is the steps that EDD's biotechnology sector staff are taking to establish a biotechnology business incubator for new bio-medical start-up companies emerging out of academe. An advisory board of government, business and academic leaders was formed which has secured seed financing and attracted the interest of government and industry. The board will be assisting in an application under the recently announced "Commercialization Fund" of $20 million, through which the Ontario Ministry of Energy Science and Technology will provide matching funds for biotech business incubators in Ontario. The board has selected a preferred site for a 60,000 - 100,000 sq.ft. incubator close to the University of Toronto and the cluster of bio-medical research institutes nearby. Toronto's biotech business incubator is expected to open its doors to its first tenant in 2001.

TradeLink Toronto

The TradeLink initiative was formulated under the former Metro, when "TradeLink" was adopted as an official mark of Metro, and a Community Development Corporation was formed. While promoting trade and export development has always been a component of Economic Development Division's efforts, the opportunity afforded by the National Trade Centre (NTC) means this area has become an increasingly important element of the Division's services mix. TradeLink Toronto is now a strategic and integral component of the Business Development & Retention section.

Ontario's international exports totalled $160.6 billion in 1997, accounting for 48.3% of Ontario's real output. Of these exports, 45% are autos, 23% machinery and equipment, and 18% other industrial goods, and the U.S. accounts for 90% of the exports. Growth in manufacturing exports, led by capital equipment and technology services, industrial materials, and the auto sector, in turn generates complementary activities in many service industries, such as transportation and wholesaling. Other services in Toronto benefit from increased exporting: financial institutions, business services such as accountants and lawyers, packaging specialists and advertising companies.

An estimated 11,000 jobs are created for every $1 billion in exports. Researchers at Simon Fraser University have also found that provincial and federal export programs have greatest impact on the performance of small and medium-sized enterprises (SMEs) that are just beginning to export their goods or services. However, a relatively small number of SMEs are active exporters. So TradeLink, whose services are aimed at improving export-readiness among Toronto SMEs, and bringing SMEs into the existing export assistance programs, can have considerable impact in terms of economic and employment growth. A recent article in the Toronto Business Times (attached) describes the challenges faced by local SME exporters, and the assistance that TradeLink provides.

TradeLink is a unique combination of Economic Development space and programming in the National Trade Centre at Exhibition Place. TradeLink's purpose is to grow exporting capability within Toronto businesses; position Toronto as an exporter-friendly City; and enhance the services of the National Trade Centre.

Trade Information

The TradeLink Resource Centre provides a permanent information centre on exporting and importing, offering a "one-stop-shop" information service about trade, exporting, export financing and foreign markets. It is the only service of TradeLink for which the City provides funds.

TradeLink's information service is available by phone, fax and e-mail to companies in the Toronto area, to Economic Development staff and their clients, to trade show organizers, and to the marketing staff of the NTC. The Resource Centre itself is also open to all exhibitors and visitors to the trade shows at the NTC, to participants in the export seminars and other events held at TradeLink.

The Resource Centre provides information on business conditions affecting exporters, competitors and suppliers abroad, export assistance programs from public and private sector agencies, market guides for specific products and countries, international trade shows and Canadian exports and imports. Materials are obtained from several hundred organizations, including export financing companies, government agencies, Canadian trade offices abroad, customs brokers, trade associations, commercial publishers and Web sites.

This information is used by Toronto businesses to assess export markets, to find financing and other support, and to identify potential suppliers and distributors. In 1999, some 250 Toronto businesses have requested information. In addition, during trade shows at the NTC some 50 foreign exhibitors and visitors made enquiries about doing business in Toronto, or requested information about potential suppliers in Toronto. The information specialist also provides much of the information given to local business clients by the export advisors, described in the next section.

The TradeLink information service is key to positioning the Economic Development Division and the National Trade Centre as the focus of export assistance in the GTA.

Toronto Export Development Initiative (TEDI)

TradeLink has attracted $275,000.00 in funding from HRDC to finance four export development advisors to assist Toronto businesses. This investment is part of a province-wide initiative to provide export advisors for one year, 1999-2000, to improve the take-up and effective use of federal exporting programs. This project is just one way that EDD leverages its investment in TradeLink to attract funds from other sources.

The following case illustrates the potential impact of TradeLink's information and advisory activities. TradeLink staff linked two Toronto information technology (IT) companies to an IT service firm in Kuwait which had posted an enquiry on Industry Canada's web-site. The information specialist at TradeLink forwarded the enquiry to Hamid Shirazi, the export advisor experienced in this sector. He contacted the owner of a Toronto company that fit the need and whom he knew was targeting the Middle East as an export market. The Kuwaiti company, which provides IT solutions for banks and other clients in Kuwait, now outsources some of its work to the two Toronto companies and is considering opening a Toronto office to consolidate these partnerships.

The export advisors work in co-operation with the Division's Economic Development Officers to provide support to local employers. Chester Wu, export advisor for the East region of Toronto, assisted Shah Trading Company Ltd., a food import/export firm, to tackle the difficult Middle East market. Shah Trading was recognized at the Division's Thank You event in November. Though the company is a second-generation family business with more than 50 employees in Toronto, Sujay Shah, the Vice President of Business Development, said that the City's recognition was important in making him feel a truly integral part of the City.

The export advisors also work closely with Toronto's Enterprise Centres. For example, Jake Kabutey offers "export clinics" on a regular basis as part of the programming of the Enterprise Toronto West office; Hamid Shirazi offers similar clinics at City Hall. The advisors also give presentations on exporting issues to community leaders through active participation in associations such as the Warsaw Business Club, which represents the Polish business community in Toronto. Frank Blazik, the export advisor responsible for the Northern region, also participated in trade missions from Poland that included representatives from the construction and electric power sectors.

Since the export advisors began in September, they have visited and are working with 120 companies in various stages of exporting and export preparation. An additional 300 companies have been contacted to determine their export-readiness and need for export assistance.

Trade Training

Centennial College Centre of Entrepreneurship (Centennial), TradeLink's programming partner, offers trade training programs at the TradeLink facility, particularly on behalf of the Forum for International Trade Training (FITT). Each FITT course is 6 full days, usually Saturdays; a total of 60 participants have come from all sizes of business including staff from the Small Business Centre at City Hall.

FITT courses held at TradeLink:

January- March 1999 Global Entrepreneurship

International Trade Finance

April - June 1999 International Trade Finance

International Trade Research

October - December 1999 International Trade Finance

International Trade Research

In 1999, FITT introduced "Going Global" which are half-day workshops designed to introduce business to exporting. Among the topics covered in these workshops are international trade, international marketing and market research. In August and November, Centennial included these 3 workshops in 2 four-day export training conferences developed for Industry Canada; participants included 17 export advisors under the HRDC-funded program and 11 other trade advisors from Industry Canada, OMAFRA, MEDT and other public sector organizations.

The partnership with Centennial is another example of the use of TradeLink to leverage EDD's investment in export development. It also directly relates to the Division's view, as described in the strategic plan, of the need to partner with the education sector to increase the skills base of the City.

The National Trade Centre (NTC)

The National Trade Centre is also an important TradeLink partner. TradeLink assists in positioning the NTC as a centre for international trade in Ontario and helps the NTC to attract and retain shows at this venue.

TradeLink's space at the NTC is used for small events, especially those with an export or economic development impact. For example, the Caribbean-African Chamber of Commerce held a small trade show and conference focussed on exporting; the newly-formed Ontario Association of Trading Houses held a half-day seminar on exporting; and New Media Village relaunched its web-site at TradeLink.

The NTC's Marketing Department uses TradeLink's information service in its efforts to attract new shows, to develop sales packages and contact lists. NTC, TradeLink and Economic Development are also working together on potential new shows.

Economic Development staff made a presentation to the Board of Governors of Exhibition Place on the role of TradeLink in NTC's activities. A draft agreement to take effect January 1, 2000 spells out the partnership with respect to cost and revenue sharing.

Trade Shows

As part of its mandate to position the NTC as a "trade centre", TradeLink offers its information and event management services to the organizers of trade shows held at the NTC. The focus is on growing the international components of such shows. While small events are most common, two major events are highlighted here.

InterMed '99, a completely new show, was held at the NTC in June with active participation from TradeLink. Right from the start, the information specialist helped to build InterMed's database of potential exhibitors and visitors. The Bio-Medical sector specialist in the Economic Development Division was key to our hosting a Cross-Border Exchange event at TradeLink during the show, attracting business professionals from the sector to three days of company presentations and U.S.-Canadian networking. Also in TradeLink, Centennial organized with Trade Team Canada Trade Commissioners from many overseas posts and other trade experts, to be available for consultation with existing and potential exporters throughout the show.

During the Royal Agricultural Winter Fair, TradeLink became the International Agri-Business Centre and was the focal point for activities involving international buyers at the Fair. On the peak day, 1485 foreign buyers registered at the Business Centre, and throughout the Fair many used the TradeLink facility for business meetings. TradeLink staff are available to provide information as was evident when an export advisor and the information specialist helped a group of Iranian buyers to identify and contact Toronto suppliers of slaughterhouse equipment.

Such in-kind support of trade shows has several benefits to show organizers, which in turn encourage their commitment the National Trade Centre and to Toronto as a trade show venue. Information about Toronto businesses helps organizers increase the number of exhibitors and visitors, thereby increasing their revenue. Programming assistance adds value to their shows, attracting and retaining exhibitors and positioning the shows as good opportunities for making international sales. Involvement with Trade Team Canada helps organizers to market their shows internationally through the Canadian trade missions, and thus attract foreign buyers to the shows and to the City.

Co-ordination with other Trade Agencies and Events

Trade events and programs in the GTA are co-operatively developed and implemented. TradeLink represents the City of Toronto at meetings of several inter-agency groups:

The Canada-Ontario Export Forum (COEF) meets several times a year to share information about events and programs taking place across Ontario. Member agencies include Industry Canada, Ministry of Economic Development & Trade (MEDT), FedNor, Ministry of Agriculture, Food and Rural Affairs (OMAFRA), Ontario Chamber of Commerce, the Alliance of Manufacturers and Exporters Canada (AMEC), Business Development Bank of Canada (BDC), Toronto Economic Development, Export Development Corporation, etc.

MEDT's Ontario Global Traders Awards honour small and medium-sized exporting companies in 4 Ontario regions with a provincial overall winner. The organizing groups in each region are comprised of economic development officers, MEDT and international business educators; the 5 judging panels include prominent exporting businesses, economic development officers and business educators.

Human Resources Development Canada (HRDC) is funding several export-related programs whose steering committees include international trade advisors from the public and private sectors. The TEDI initiative (above) is an example of one such program with EDD and Centennial staff on the committee. A second example with TradeLink participation is a program to develop educational and training materials aimed at increasing the use and improving the initial success rate of export letters of credit (LCs). The LC is one of the most secure ways of ensuring payment for exporters, since the Canadian exporter is paid by a Canadian bank, rather than waiting for payment from the foreign importer. However, small businesses are often discouraged from using LCs because of the high rate of "failure", i.e. discrepancies between the LC terms and the details on other export documents, which might cause a bank to refuse to honour the LC. The education program will assist small exporters in taking full advantage of the payment security offered by LCs, and to minimize the barriers to their successful exploitation. The program will be piloted in Toronto, so local businesses will be the first to benefit from what will become a national program.

Administrative Developments

A major objective for the remainder of 1999 is to re-constitute the Board of the TradeLink Community Development Corporation. Legal Services is determining the appropriate mechanisms for re-constituting the Board under the new City and enlarging its membership to include representatives from TradeLink's partners, including the management of the NTC, Centennial College and other private sector partners as applicable.

With the help of the Investment Marketing section of Economic Development Division, marketing materials are being developed that will outline the enhanced scope of TradeLink's services. The addition of the export advisors has occasioned press articles promoting not just the new advisory service but all of TradeLink's services, and this publicity activity will be proactively pursued in the future.

Value to the City of Toronto

TradeLink's primary objective is to grow exporting capability within Toronto businesses. In this respect, TradeLink acts as a focus of expertise on exporting, ensuring that Toronto businesses make best use of the export-related programs and services of the federal and provincial governments. This leverages the investment made in exporting by other levels of government to the benefit of Toronto businesses, for example, the HRDC funding for four export advisors based at TradeLink. TradeLink also attracts partners to offer specific services, for example, Centennial College offers at TradeLink the export training programs from the Forum for International Trade Training with no direct outlay from City funds.

A second objective for TradeLink is to position the City as exporter-friendly. TradeLink offers information and training in a manner similar to the Enterprise Centre operated by Economic Development with focus on exporting. This centres around the Resource Centre and Presentation Theatre at the NTC.

TradeLink's third function, to enhance the services at the National Trade Centre, is unique within the City. The high quality meeting space attracts organizations other than trade shows; the information services assist the marketing departments of the NTC and of show organizers; and programming and training during shows links important business sectors with senior trade advisors and events at the NTC.

Conclusions:

Business Development and Retention is a key component of the strategy of Toronto's Economic Development Division. In this report we have described the contribution made by TradeLink Toronto, the smallest component of the section, to increase exporting and export-readiness among the City's small and medium-sized businesses. This report also summarizes the activities of the sections two main components: the Corporate Calling and the Sector and Strategic Initiatives staff.

Councillors are encouraged to continue to refer business enquiries and new opportunities to the Business Development and Retention group and to other Economic Development staff, and to participate actively in the Division's ongoing programs.

Contact:

Bruce Graham

Director Business Development & Retention

Tel: 392-3381

Fax: 397-5332

Email: bgraham@toronto.on.ca

Joe Halstead

Commissioner, Economic Development, Culture and Tourism

List of Attachments:

Attachment No. 1: Projects/Investment Summary

Attachment No. 2: Toronto Business Times Article

Attachment No. 1

Projects/Investment Activity

Third Quarter Summary

(January - September 1999)

Source: City of Toronto Economic Development, Culture & Tourism Department

Economic Development Division (Jan - September 1999)

APPENDIX 1

Projects/Investment Activity

Third Quarter Summary

(January - September 1999)

Source: City of Toronto Economic Development, Culture & Tourism Department

Economic Development Division (Jan - September 1999)