Correspondence from Greater Victoria Development Agency Re: Federal/Provincial Economic Development Funding

SUBJECT: Opportunity to Leverage Municipal Investment for Federal/Provincial Economic Development Funding

Dear Mayor Graham Hill and Council:

The Capital Region is not immune to external forces. In the new era of global financial instability, the Greater Victoria Development Agency (GVDA) has a significant opportunity to leverage local municipal investment to achieve up to $1,075,000 over three-years from the provincial and federal governments to use for local economic development programs.

As the region's economic development agency, the GVDA puts tremendous energy into understanding the local economy. There are several risks facing the Capital Region in the coming years that could affect our legacy of stability and high quality of life. These risks will intensify the challenges faced by your municipality. Challenges like creating the sustainable revenues that you need to operate, deliver services, and plan for the future. This opportunity to leverage Provincial and Federal funding pools must be done regionally; however, the results will provide direct benefit to your municipality by increasing the stability of local employers (so they can hire more people), encouraging developers to invest (which creates jobs and adds to your property assessments), and focusing on meeting the needs of the segments of the regional economy that employs your citizens so they can invest in homes, consumer goods, and their children's education.

The GVDA is best positioned to address these risks through economic development practice that appreciates the local autonomy and goals of your municipality. However, we need your municipality to contribute so we all receive the immediate return on the Provincial and Federal investment. Please see the attached overview that briefly describes the three-year program and some of the activities that the GVDA has undertaken over the last year.

We need to raise an additional $60,000 per year from the balance of municipal partners to match the $120,000 per year from industry and the $140,000 per year already contributed by the Greater Victoria Chamber of Commerce, the City of Victoria, the District of Saanich, and the University of Victoria.

We are seeking financial contribution from you toward the $60,000 and ask you to commit $1.00 per resident in each of the next three-years toward economic development. Please contact Dallas Gislason, Economic Development Officer, by phone 250-360-3478 or email dgislason@gvda.ca to discuss the details of this request.

Sincerely,

Michael Weston, Chair, Greater Victoria Development Agency

Enclosure

GVDA Overview

Since 2007, the Greater Victoria Development Agency (GVDA) has been the central organization responsible for high-level economic development services to the capital region. This does not mean serving as a consultant to municipalities on their specific development needs, rather, the GVDA works across all local boundaries to ensure that the short- and long-term needs of the region's economy are being met.

This mandate is achieved through five primary areas:

1. Retention and expansion of existing businesses/employers (keep what we have and grow it)
2. Creation and growth of new businesses/employers (entrepreneurship)
3. Attraction of external businesses and investors to the Greater Victoria marketplace (diversify)
4. Progression of regional competitiveness (make the region a better place to do business over time and relative to competing cities and regions)
5. Regional integration and stakeholder engagement (this means to bring the region's institutions, agencies, municipal partners, businesses, citizens and the CRD together around common economic sustainability goals)

2012 Overview:

To deliver on the five (5) areas above, the GVDA has an annual operations plan. Below is an overview of some of the activities of the GVDA in 2012, the following activities were delivered with one staff resource (and some clerical support from the Greater Victoria Chamber of Commerce as described below):

• Produced and distributed 20,000 copies of the 2012 Greater Victoria Business Development Guide.
• Continually reported on 60 Metrics for the local economy (Maintain a website with much of this information: www.gvda.ca).
• Maintained the Opportunities BC web-portal to market the region's business opportunities worldwide.
• Participated in the KPMG 2012 Competitive Alternatives Report.
• Participated in the Conference Board of Canada: Economic Predictions Reports.
• Partnered to deliver the 2012 Annual Economic Forum.
• Published the 2013 Major Projects List after an extensive outreach process.
• Hosted frequent in-bound delegations from many parts of the globe (15 in 2012).
• Handled hundreds of inquiries about our region as a place to live, work, and do business.
• Serviced several in-bound investments totaling tens of millions of dollars, as well as retention of in-bound investment once here.
• Led dozens of CEO visitations to better understand the needs of local employers.
• Connected dozens of start-up entrepreneurs with information & services in the region.
• Organized a 26-member delegation to China in October 2012, which carried a value of $10 million to the local economy, plus extensive work on follow-up activities.
• Media: GVDA reported on the economy and economic issues 4-5 times per month.
• The GVDA was excited to welcome a new Economic Development Officer to the organization in July 2012. Mr. Dallas Gislason joined the organization with ten years of experience delivering effective economic development approaches in Canada and other parts of the world and has lived in Victoria region for the last three years.

The GVDA works in partnership with the Greater Victoria Chamber of Commerce for some staff support, for example, event organization, financial administration, website maintenance, and other operational necessities. This allows the organization to do more with less overhead requirements. However, the GVDA now has opportunity to expand its staffing resources in order to deliver on a three-year economic development strategy as outlined on page 2 of this document.

2013-2016 Provincial / Federal Funding Opportunity:

Starting in 2013 with implementation over three-years, the three-year funding will work to achieve two primary goals:

1. Retention and expansion of businesses; and,
2. Attraction and retention of investment into the region (real estate, advanced technology firms, venture capital for start-ups, etc.)

The project is valued at $1.59 million over three years, and will leverage local input to achieve $954,000 from federal government and $135,000 from provincial government. The remaining contribution must be achieved from local partners and municipalities.

The following list highlights the activities that will be implemented over the three-years:

Export capacity assessment and development: Determining how the region's export companies are functioning, what barriers they face to achieve exports, and what markets they wish to pursue so that a coordinated approach can be implemented. Education partnership development and marketing: Our region has world-class education providers that drive the economy; a coordinated approach is needed to build "Education Destination Victoria" internationally. Air route assessment and expansion: As an island economy, the airport is essential to doing business here. However, airline companies can drop direct routes if they are not utilized. The region needs to ensure that routes are developed and new ones added to keep our diverse economy healthy. Direct flights to Los Angeles are on the horizon if we work towards it. Marketing Victoria for purpose of exports, investment and workforce: There are dozens of world-class companies in the region. Many of these need proper capitalization in order to get their products/services to market as well as a talented workforce to accomplish this. A coordinated approach will be implemented to communicate the region's "opportunity brand". In-bound investment attraction and retention: Buildings, infrastructure, and businesses within the Capital Region need constant rejuvenation. Often, an outside investor can fill a gap that cannot be filled locally. The GVDA is responsible for determining where these gaps might exist and seeking the capital required to fill them, and retain it once here.

We cannot capitalize on these opportunities without a coordinated regional approach to economic development practice. Why?

• The needs of the economy are regional in nature (as the figure below demonstrates);
• To effectively address the needs of economy requires a well-resourced approach best achieved through collaboration.

• Market the region's strengths to attract outside investment and needed skilled workforce.
• Increase the capacity of the region's exporters to increase wealth in the region and create jobs.
• Export segments include: Tourism, Agri-business, Manufacturing, High-Tech/ICT, Aviation, Ocean Sciences, Education, Ship-repair / Marine services, Business Services, Consulting, etc.
• Retain what we have, fostering a strong local economy. This emphasizes local supply chains, increased equity, enhanced quality of life, and regional prosperity.
• Embark on processes that enable us to understand the local economy better so we can align services to those needs.
• All strong economies exist on a strong "foundation".
• The opportunity is for the "foundational institutions" to be responsible and adaptive to the needs of the economy. This includes, but is not limited to municipalities. Another important job of the economic development office is to understand and convey those needs to the partners.

Measuring Your Economic Development Office

Economic development strategies are ultimately designed to create jobs. However, in an era of challenging fiscal environments, municipal decision-makers are also motivated by increasing property assessments and building permits. It is important to note that in the Capital Region, 83% of office leases absorbed in 2012 were by the private sector (Colliers, Q4 2012 Report).

This means: local job creation = increase in office demand + increase in housing demand = increase in building permits.

For every 100 new jobs created in the private sector;

• 55 jobs will be created by the expansion of existing local businesses
• 44 jobs will created by new start-up companies
• 1 new job will be created by a "greenfield" corporate relocation.

(Dr. David Birch, 1979; Dr. Zoltan Acs, 2008)

Therefore, the basic building blocks of measuring economic development strategy are job retention and job creation. But since many job creation initiatives are not as straightforward as cutting a ribbon, it is important to fully understand what an economic development office undertakes on an on-going basis and include these activities within the measurement metrics. This includes a range of inputs, activities, outputs and outcomes.

"The economic developers' job is to create an environment in which re-locating or expanding companies are welcomed and where entrepreneurs can thrive." (Economic Developers Association of Canada)

In the context of measuring the economic development office, in many ways a truly competitive economic region is not achieved by accident. It is up to many partners, institutions, stakeholders, and even the municipality. Therefore, many activities of the economic development office are designed to bring regional partners together towards common-goals.

As Louis Pastor once said; "Chance favours the prepared mind."

Our region must prepare ourselves for economic success regardless of whether or not jobs are created or lost because of external economic forces. It is the job of a properly resourced economic development office to work towards this goal. Measurement is important, but it must be holistic and fully consider external forces that effect the region's economic performance.

Contact us:

Dallas Gislason Economic Development Officer Greater Victoria Development Agency 100-852 Fort Street Victoria, BC V8W 1H8

Phone: 250-360-3478 Email: dgislason@gvda.ca Web: www.gvda.ca