Embracing future economic potential

Ontario, Canada’s most populated province, took a big hit with the 2008 financial crisis. Its automotive industry was devastated. Its manufacturing industry faced a much weaker U.S. export market while its competitiveness was undermined by the resource-driven rise in the exchange rate of our dollar. Factories closed, unemployment rose and communities suffered. Ontario’s fiscal position deteriorated sharply as tax revenues fell and stimulus costs escalated.

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CLEVELAND — Ontario, Canada’s most populated province, took a big hit with the 2008 financial crisis.

Its automotive industry was devastated. Its manufacturing industry faced a much weaker U.S. export market while its competitiveness was undermined by the resource-driven rise in the exchange rate of our dollar. Factories closed, unemployment rose and communities suffered. Ontario’s fiscal position deteriorated sharply as tax revenues fell and stimulus costs escalated.

Yet Ontario is reinventing itself and doing that in part by seeking a greater collaboration with the Great Lakes Region, which includes eight U.S. states bordering the Great Lakes and Quebec. It’s a region with more than 100 million people and a more than $5 trillion economy.

The approval, after many frustrating years of effort, of the new Detroit-Windsor bridge is seen as a sign that there is political will on both sides of the border for greater collaboration. Michigan Gov. Rick Snyder pushed hard for the bridge over strong political opposition in his state, but with help from Canada.

Snyder’s role is important because he will be co-chairing the Council of Great Lakes Governors summit with Illinois Gov. Pat Quinn on May 31 to June 2.

This is the first time since 2005 that the Great Lakes governors and Ontario and Quebec premiers have had the chance to meet to discuss issues that are important to the region.

There is already significant co-operation on managing the Great Lakes waters, which constitute 21 per cent of the world’s freshwater supplies, including facilitating shipping through the St. Lawrence Seaway-Great Lakes system. There is a history of co-operation on border security and infrastructure as well.

But the upcoming summit will be a chance to expand the agenda.

As Snyder says, “the meeting will help reinvigorate our work and shape our plans to strengthen our economy and protect our Great Lakes. Through our work together, we expect to enhance our region’s competitiveness in the global economy, while taking strategic actions on transportation, ports and U.S.-Canadian trade.”

The potential exists to pursue areas of great potential opportunity.

One example is to lead North America in the transition to a low-carbon economy. The Great Lakes Region could take advantage of the huge natural gas supplies in Pennsylvania and Ohio to make the transition from diesel and gasoline to natural gas as a fuel for trucking, metropolitan vehicle fleets, municipal buses, shipping and railroads, leading possibly to cars as well. Natural gas is much cheaper and has much lower greenhouse gas emissions than oil.

By working together to ensure natural gas fuelling stations along major expressways and truck depots on both side of the border, the Great Lakes Region would assure trucking companies that vehicles could be refuelled. Likewise, the region could position itself as a centre for the development of hydrogen fuel cells technology.

Co-operation in advanced manufacturing — manufacturing based on smart electronics systems rather than traditional mechanical processes is a second opportunity.

This would help ensure the region’s future as North America’s industrial heartland and the key location for manufacturing research and development, both creating the tools for advanced manufacturing but also becoming the leading user of advanced manufacturing systems in industries such as information technology, synthetic biology, nanotechnology and new materials, as well as autos and other traditional industries.

The auto industry today is an example of advanced manufacturing, in the production systems used but also in vehicles themselves, with electronics, software and new materials.

A third opportunity could come from making the region a leading centre for water opportunities technologies. Water could be the next big industry, as the world faces a growing need for water and water sanitation.

Global population is expected to grow by at least two billion people and the global economy is expected to nearly quadruple by 2050, with rising incomes and consumption, as well as growing urbanization. Even in the Great Lakes Region there is a critical need for water infrastructure upgrading and new water technologies. Ontario has already made developing its water industry a key sector for future growth.

The Great Lakes Region could, then, become the North American centre for the transition to the low-carbon economy, the leader in advanced manufacturing and the source of the water solutions the world needs. These are big opportunities for collaboration, which would allow the Great Lakes Region to prosper in a transforming world of rapid technological change and intense global competition and which would reinvent Ontario as a powerhouse in the Canadian economy.

Economist David Crane is a syndicated Toronto Star columnist. He can be reached at crane@interlog.com.

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