Q1 REPORT. Halton Region Approves Proposal by McMaster University for Burlington Campus. In This Issue

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1 Halton Region s Business Development Division January March 2009 Halton Region Approves Proposal by McMaster University for Burlington Campus On January 21, 2009, Halton Regional Council approved a $5 million funding contribution over ten years to McMaster University for the construction and establishment of the DeGroote School of Business Centre for Advanced Management Studies, a McMaster Affiliated Family Health Centre, and a Teaching Affiliation with Joseph Brant Memorial Hospital, all in the City of Burlington. Since 2003, Halton has had an active physician recruitment program to recruit family physicians to Halton and retain Halton s existing physicians. The program, which works with the Local Municipalities, local hospitals, and the Ministry of Health and Long Term Care, has successfully recruited over 90 new family physicians to Halton. Burlington, Halton Hills and Milton are currently provincially designated as under serviced with family physicians. The McMaster In This Issue Halton Region Approves Proposal by McMaster University for Burlington Campus New Investment Highlights Market Overview Housing Market Overview Spotlight: Halton Business Trends Halton s Small Business Quick Facts Family Health Centre is expected to increase the number of family physicians across all of Halton for continued high quality service to Halton residents. The DeGroote Centre for Advanced Management Studies is planned to accommodate graduate and executive level business programs, including a full-time Masters of Business Administration program, and new executive offerings. It will be located in a four storey building of approximately 96,000 sq. ft. and at steady state will support 800 students and 165 faculty and staff members on site. The $30 million Centre will generate $44.3 million in direct and indirect spending during construction and once operational, $29.3 million per year in direct spending impacts in Halton and student spending of $2.9 million per year. Postsecondary institutions are a key driver of research and innovation in the communities they serve, fostering technology clusters, venture financing and private investment. To compete in a global economy, a highly skilled and educated workforce is necessary. The DeGroote Centre for Advanced Management Studies in Halton will provide the opportunity for the region s business community to enhance their business skill set and executive training of their employees.

2 New Investment Highlights Burlington s Eco Waste Awarded NATO Contract NAMSA, the NATO Maintenance and Supply Agency, which provides strategic procurement for NATO, has announced it is awarding a $4.5 million contract to Burlington s Eco Waste Solutions to supply four clean-burning garbage incinerators that can be moved anywhere the military alliance stations its troops. Harinder Takhar, Ontario s Minister of Small Business and Consumer Services was on hand for the March 31st announcement by the NATO Maintenance and Supply Agency. Eco Waste, with offices and an assembly facility on Harvester Road, now supplies its systems to remote communities, mines and Canadian military bases. NATO has operations in Afghanistan, Darfur, Iraq and Kosovo. Eco Waste President and CEO Steve Meldrum calls the contract a very big deal for his company, which has 13 full-time staff. He says it s also good for steel fabricators and other suppliers, all in the Golden Horseshoe area. The NATO incinerators, to be delivered by the end of the year, are designed to fit in 20-foot cargo containers so they can be easily shipped to and from a central supply base, probably in Europe. Each will handle the waste generated by a 500-person military camp. Eco Waste often works with large engineering companies that supply housing and other infrastructure for remote locations such as the DeBeers Snap Lake diamond mine 220 kilometres northeast of Yellowknife in the Northwest Territories. Eco Waste builds incinerators that process waste in batches. Capacity ranges from a few hundred kilograms to 10 tonnes a day. They turn the waste into gas, then burn the gas to minimize emissions. Source: Hamilton Spectator, March 31, 2009 Royal Botanical Gardens Atrium Goes Green The Royal Botanical Gardens (RBG) held the official opening in January of their new $9 million Camilla and Peter Dalgish Atrium. The glass-walled, glassroofed courtyard is a multi-purpose gathering place and an exhibit space with elevators so visitors can easily reach the tunnel connecting the main building to gardens on the other sides of Plains Road West in Burlington. The new Atrium is part of an expansion project that includes an easy-to-find entrance off Plains Road West, more parking, the new Helen M. Kippax Garden and improvements to the Rose Garden in Hendrie Park. Gardens are still being developed on either side of the atrium, and RBG executive directory Mark Runciman says there are plans for the north end of the tunnel to open into a grand conservatory. The new Atrium includes many environmentally friendly features aimed at qualifying for LEED gold certification. The interior features two, large freestanding walls of living plants that act as biofilters, drawing air through the plant roots, where microbes break down toxic substances. Living walls also humidify rooms in winter and help cool them in summer. The Atrium also features a system to collect and re-use rainwater, radiant heating in the polished concrete floor, recycled content in the concrete, steel and aluminium, a heat recovery wheel in the exhaust air stream, low-flow plumbing fixtures, and non-toxic paint and adhesives. Source: The Hamilton Spectator, January 29,

3 Wal-Mart Opens First Environmental Demonstration Store in Burlington Wal-Mart Canada announced the opening of its first environmental demonstration store, which features a first-of-its-kind application of geothermal technology in a large-scale Canadian retail operation and energyconserving lighting innovations, among many other sustainable features. The new Burlington supercentre is expected to use an estimated 60 per cent less energy than the company s typical supercentre store and to reduce carbon emissions by an estimated 141 tonnes. It is also expected to divert an estimated 85 per cent of its waste from landfill through a variety of recycling programs. This year, Wal-Mart Canada will begin to roll out prototypical stores that are 30 per cent more energy efficient. Source: CNW Group, January 16, 2009 Burlington Breaks Ground on Performing Arts Centre City of Burlington and community partners held a groundbreaking ceremony on March 27 to celebrate the new Burlington Performing Arts Centre scheduled to open in When completed, the Centre will be a venue for productions, receptions, exhibitions, community functions and civic events. The centre is being designed by Diamond + Schmitt Architects Inc. and will feature a 730-seat main stage theatre, a 225-seat studio theatre, atrium space and an event patio. It will also include a six-storey fly tower allowing Burlington to host a wide variety of productions. The Burlington Performing Arts Centre will be LEED certified and Ontario s first stand-alone green performing arts centre. It is expected to generate economic spin-offs including new business opportunities, the creation of new jobs and the continued pedestrian-friendly environment downtown. Source: City of Burlington, March 27, 2009 Town of Halton Hills Kicks Off Shop Local Initiative The Town of Halton Hills has partnered with local business groups to launch a new campaign aimed at educating local consumers to shop local first. The Shop Local program will encourage locals to Shop Smart, Shop Halton Hills. The campaign was initiated out of Halton Hills Mayor Rick Bonnette s office with participation on the Shop Local committee from the Town and several area business representatives including the Acton and Georgetown Business Improvement Areas, Georgetown Market Place, Williams Mill, and local newspapers. There are many reasons to shop locally said Bonnette including the fact it helps to keep your neighbours employed and results in a smaller environmental footprint with fewer cars on the road heading out of town. Shopping in town also helps to maintain local prosperity, helps to sustain the community, keeps local dollars in town to help fund town services, aids neighbourhood improvement, and promotes community development, and creates competition. Source: Town of Halton Hills Economic Development Department and The Georgetown Independent and Free Press, February 5,

4 New Investment Highlights Auto Park Proposed in Milton An auto park containing five car dealerships, a gas station and car wash is being proposed for lands in north Milton. The plans from Zag Properties call for the development on nine acres at the northwest corner of James Snow Parkway and Regional Road 25. At the southwest corner of the intersection, Zag Properties is looking to create a small development of retail/service commercial uses, such as a bank, drive-through facility and restaurant, to serve the surrounding 401 Business Park. The developer has applied to the Town for zoning bylaw amendments to make way for the proposals. Source: Milton Canadian Champion, November 19, 2008 Medline Canada Opens Corporate Headquarters in Oakville Medline Canada proudly announced the opening of their new Canadian Corporate Headquarters located in Oakville, ON. Medline is the largest privately held manufacturer and distributor of health care supplies and services in North America and the fastest growing company in the industry. Listed among the Forbes Magazine Top 200 largest private companies with more than $3.5 billion in sales in 2008, Medline is a stable, entrepreneurial organization that owes its success to its diverse, extraordinary people. Medline s primary mission is to provide quality products and cost containment solutions to health care providers while enhancing the quality of patient care. Medline has earned the reputation as one of the top sales and customer service companies in the country. Source: Town of Oakville Economic Development Department, March 26, 2009 Bentall Proposes New Office Developments in Oakville Bentall Real Estate Services has begun pre-leasing two new office buildings as part of their Ennisclare Corporate Centre Phase II project. A single storey office/flex building is proposed at 1045 North Service Road West. This 38,000 sq.ft. office building will be LEED certified. The project has received Site Plan approval. The second building is proposed at 1255 North Service Road West. This Class A office building will be four storeys and total 55,000 sq.ft. Source: Town of Oakville Economic Development Department and www. bentall.ca Blink Communications Upgrades Network Technology Blink Communications, a wholly owned subsidy of Oakville Hydro, is teaming up with Vancouver-based Charter Telecom Inc. to upgrade and evolve Blink s network technology to allow Blink s customers to upgrade their own networks and the applications they run on them. This project with Charter will increase Blink s capacity to deliver the next generation MPLS (Multi Protocol Label Switching) network and its key benefits including high-touch services, reliability and scalability. Blink s president and COO Troy Hare says Blink s existing network technology has been in place for a number of years, and it is time to take this evolutionary step. Blink anticipates a June target date for completion, and expects the network will be ready to accept new customer services immediately. Blink, a wholly-owned subsidiary of Oakville Hydro, is one of Eastern Canada s top communications service providers, with Fortune 50 and Fortune 500 companies among its customers. Source: Oakville Beaver, March 7,

5 Halton Region Hosts Halton Tourism Summit Halton s Business Development Centre, in partnership with Tourism Burlington, Halton Hills Chamber of Commerce, Town of Milton, Escarpment Country, and the Town of Oakville hosted the first annual Halton Tourism Summit: Tourism in Halton Competitive in 2009 at RattleSnake Point Golf Club on March 27, The event featured keynote speaker Michael Kurts, Assistant Deputy Minister, Ministry of Tourism. Mr. Kurts provided an overview of the Ontario Tourism Competitiveness Study, which identified challenges and opportunities in the industry, and provided recommendations to revitalize and grow tourism across the province. The Tourism Summit also featured a panel discussion from several leaders in Halton s tourism industry. The panellists included Jane Holmes from Woodbine Entertainment Group Mohawk, Kirk Sloane from the Oakville Waterfront Festival, Mark Runciman from the Royal Botanical Gardens, Laura Hughes from Springridge Farm, and Ken Phillips from Conservation Halton. Each panellist provided an overview of their organization and what they are doing to remain competitive in Cam Jackson, Mayor of the City of Burlington and Chair of the Halton Tourism Advisory Committee provided an update from the Advisory Committee, including new initiatives for 2009, such as the formation of three sub-committees to focus on implementing the actions from the 2009 Work Action Plan. Regional staff commenced work on a number of tourism initiatives in 2008 including developing new Halton tourism WebPages for first quarter 2009 launch and supporting the Toronto Region 2015 Pan-American Games Bid. Visit www. halton.ca/tourism for more information. Halton s Business Development Centre Launches Online Video Tour and Small Business Tutorials The Halton Business Development Centre has produced a video tour to promote its services and programs, reaching new and existing clients on the World Wide Web. The online video allows the public and stakeholders to view the Centre in action while learning about the various resources, tools and assistance available to help their small business start and grow. The video also includes information on youth entrepreneur programs delivered in partnership with the Ministry of Small Business and Consumer Services. The Halton Business Development Centre s online video tutorials provide clients with simple explanations and tips on various small business topics ranging from Thinking of Entrepreneurship and Type of Business Ownership, to Business Numbers & Tax and Marketing Strategies for Success. Visit to view the Centre s video tour and online tutorials. 5

6 Market Overview Halton Economic Indicators Economic Indicator Q Q Percentage (%) or Percentage Point (pp) Change Total Population 1 467, , % Population Density (per sq km) % Employment 3 246, , % Unemployment Rate (Toronto CMA) % 8.13% 1.90 pp Unemployment Rate (Hamilton 6.00% 8.70% 2.70 pp CMA) 4 Number of Businesses 5 37,065 37, % Business Bankruptcies % Total Construction Value 7 $629,151,653 $262,532, % Industrial $82,233,795 $17,831, % Commercial $72,978,032 $54,422, % Institutional $10,291,312 $26,330, % Residential $449,007,103 $156,563, % Industrial Availability Rate (1st Qtr) % 10.50% 2.01 pp Office Availability Rate (1st Qtr) % 10.10% 0.20 pp Average Household Income 10 $113,100 $125, % Occupied Dwelling Units 3 166, , % Housing Sales % Average Housing Price 11 $499,058 $417, % Average Days on the Market % Sources: 1 Halton Region Best Planning Estimates, April 2007 (forecasted) 2 Based on Halton s land area of 967 square kilometres 3 Halton Region Best Planning Estimates, April 2007 (forecasted) 4 Statistics Canada, Labour Force Survey Estimates (Table , 3 month moving average, unadjusted), April Statistics Canada, Canadian Business Patterns. As of December 2007 for 2008 estimate and December 2008 for 2009 estimate. 6 Office of the Superintendent of Bankruptcy Canada, Local municipal building departments 8 Colliers International, Q Based on rates in Burlington, Milton and Oakville. 9 Colliers International, Q Based on rates in Burlington and Oakville. 10 FP Markets, Canadian Demographics, 2008 and Toronto Real Estate Board, Market Watch, March 2008 and March 2009 Economic conditions in Southern Ontario continued to deteriorate during the first quarter of Lagging demand translated into significant losses in many sectors and the struggling automotive sector has had a negative impact on everything from the steel industry to parts suppliers and dealers. In both the Toronto and Hamilton metropolitan areas, the unemployment rate climbed another 1.9 and 2.7 percentage points, respectively. As of March 2009, the Toronto CMA unemployment rate stood at 8.9% (highest since 1996) and the Hamilton CMA unemployment rate was 9.6% (highest since 1993). Overall, business bankruptcies in Halton declined during the first quarter to 22 from 33 during the same period in However, economic conditions impacted several of Halton s major employers, including Smurfit-Stone which entered bankruptcy protection, Russel Metals which announced layoffs, and both Meritor Suspension Systems and SKD Automotive which will be shutting their doors in

7 Construction activity across Halton remained below the record-breaking levels reached in 2007 and the first half of Overall, the construction value of new developments and expansions during the first quarter of 2009 was down 58% from the same period in 2008, to just over $262.5 million. The most significant declines were seen in industrial developments. During the first quarter, $17.8 million was invested in industrial developments throughout Halton, down 78% from the same period of At the same time, permits were issued for three significant new developments in Oakville, including a new storage facility, multi-storey office building, and an industrial warehouse. Combined, these developments will create nearly 204,000 square feet of new floor area at a total value of $12 million. The number of building permits issued during the first quarter was also below levels recorded in the first quarter of Local municipalities reported a total of 1,503 permits issued between January and March 2009, 67% of which were residential permits and 13% were Industrial, Commercial or Institutional (ICI) permits. Top Non-Residential, Non-Retail Developments, Q1 2009* Name of Development Location Building Type Winston Business Park (Great West Life) Oakville Industrial Warehouse Alteration Area (sq ft) Construction Value ($) 16,996 $1,183,950 UPS Supply Chain Solutions Burlington Industrial Renovation 56,123 $1,450,000 Medical Office Burlington Office Renovation 10,132 $1,000,000 Winston Business Park (Equity Corp) Oakville New Industrial Warehouse 60,171 $2,000, Ontario Inc. Oakville New Storage Facility 111,610 $6,500,000 Melrose Investments Inc. Oakville New Multi-Storey Office 31,893 $3,500,000 * Listing of all non-residential, non-retail developments in excess of $1 milllion in construction value. Source: Local municipal building departments. Number of Building Permits Issued in Halton by Type of Development and Municipality, Q vs Q Residential* Non- Residential** Miscellaneous*** Total Q Q Q Q Q Q Q Q Burlington Halton Hills Milton 1, , Oakville HALTON REGION 1,981 1, ,393 1,503 * includes apartment registrations, renovations and additions ** includes industrial, commercial, institutional (ICI) *** excluding signs Source: Local municipal building departments, 2008 and

8 Market Overview Construction Value ($ thousand) of New Developments, Q vs Q1 2009* Type of Construction Burlington Oakville Milton Halton Hills Halton Q Q Q Q Q Q Q Q Q Q Residential 127, , , , , , , , , ,563.1 Industrial 14, , , , , , , , ,831.3 Commercial 31, , , , , , , , ,422.1 Institutional 10, , , , , ,330.7 Other 7, , , , , , , ,385.1 Total Value 191, , , , , , , , , ,532.4 * Figures may not add due to rounding Source: Local municipal building departments. Halton s industrial market inventory remained stable entering into Burlington, Milton and Oakville reported an inventory of nearly 50 million square feet of industrial space in the first quarter. Industrial vacancy rates declined in both Burlington (7%) and Oakville (1.2%) from the previous quarter. And, in all three markets, net rental rates reported decreases. Halton s office market, however, showed signs of weakening during the first quarter. Vacancy rates increased in both Burlington (9.4%) and Oakville (11.4%) from the previous quarter and both office markets entered into negative absorption. Overall, Halton saw positive industrial absorption during the first quarter (571,742 square feet) and negative office absorption (-152,611 square feet). Industrial Market Overview by Municipality, Q Burlington Milton Oakville Inventory (sq ft) 20.7 million 11.1 million 18.1 million Vacancy Rate 7.0% 7.8% 1.2% Absorption (sq ft) 372, , ,781 Average Land Price (per acre) $562,500 $600,000 $675,000 Net Rental Rate (per sq ft) $5.54 $5.57 $5.49 Average Sale Price (per sq ft) $86.47 $68.42 $66.27 Note: Information is not available for Halton Hills Source: CBRE, Q South Halton Office Market Overview, Q Burlington Oakville Inventory (sq ft) 3.1 million 2.2 million Vacancy Rate 9.4% 11.4% Absorption (sq ft) -59,722-92,889 Under Construction (sq ft) 126, ,586 Net Rental Rate (per sq ft) $15.25 $18.10 Source: CBRE, Q

9 Housing Market Overview BUSINESS DEVELOPMENT The housing market in the Greater Toronto Area (GTA) saw modest improvement during the first quarter of The Toronto Real Estate Board reported 12,824 housing sales between January and March, up 13% from the previous quarter, although still down 28% from the same quarter in Likewise, Halton housing market showed signs of rebounding during the first quarter, with housing sales up 18% from the previous quarter and only down 13% from the first quarter of Contributing to the increased activity is likely the decline in housing prices across the region. During the first quarter, Halton s average housing price was approximately $418,000, down 16% from the same period in Meanwhile, new housing starts in Halton declined during the first quarter of The Canada Mortgage and Housing Corporation reported 640 new single or multiple dwelling units began construction in Halton between January and March 2009, down 52% from the same quarter in Housing Starts in Halton Region, Q vs. Q Municipality Q Q % Change Burlington % Halton Hills % Milton % Oakville % Halton Total 1, % Note: Data is collected through the Starts and Completions Survey, which involves site visits of new self-contained single and multiple dwelling units. Housing starts are defined as the beginning of construction of a building, usually when the concrete foundation or footings have been poured. Source: Canada Mortgage and Housing Corporation, Housing Market Information, April 2009 Halton Housing Overview, March 2009 Municipality Total Supply Under Construction 3 mos. Average Absorption Burlington 1,321 1, Halton Hills Milton 1,524 1, Oakville 1, Halton Total 4,083 3, Note: Data is collected through the Starts and Completions Survey and Market Absorption Survey, which involves site visits of new self-contained single and multiple dwelling units. Absorption occurs after a unit has been completed and either sold or rented. Source: Canada Mortgage and Housing Corporation, Housing Market Information, April

10 Spotlight: Halton Business Trends According to Statistics Canada, there were 37,142 businesses* located in Halton as of December The majority of businesses in Halton were considered microbusiness, employing fewer than five employees. At the end of 2008, 82% of Halton companies were micro-businesses and, of these, 72% were listed as selfemployed individuals. Halton businesses were found in all industry sectors, with particularly high concentrations in professional services and finance, which accounted for approximately one in three businesses in Overall, there were 31,375 service-based businesses (84%) and 5,767 good-producing or resourcebased businesses (16%) in Halton. The business environment in Halton has transformed itself quite dramatically over the past ten year period. Due to its prime location on the western edge of the GTA, strong growth has occurred in transportation and warehousing, professional services, finance and insurance, and construction. Halton is now home to a diverse, innovative business community that continues to draw new companies as their location of choice for business. * Includes companies listed in Statistics Canada s Business Register, which is a central repository of all active businesses in Canada that have a corporate income tax account (annual business revenues over $30,000), are an employer or have a GST account. Distribution of Businesses by Size Category in Halton, 2008 Percentage of Businesses (%) 70% 60% 50% 40% 30% 20% 10% 0% 59% No employees 23% 1 to 4 employees 5 to 9 employees 8% 5% 3% 1% 1% 10 to 19 employees 20 to 49 employees Number of Employees 1.0% 1.0% 0.2% 0.2% 50 to 99 employees 3.0% 3.0% 4.7% 4.4% 3.3% 3.2% 4.5% 4.5% Over 100 employees 5.6% 5.9% 7.6% 7.8% 9.8% 10.0% 10.2% 10.2% Note: Enterprises include only those companies that had a minimum of $30,000 in annual revenues, or are incorporated under a federal or provincial act and have filed a federal corporate income tax form within the past three years. Source: Statistics Canada, Canadian Business Patterns, December 2008 Distribution of Businesses by Sector in Halton, 2007 vs Agriculture, Forestry and Fishing Mining, Oil, Gas and Utilities Construction Manufacturing Wholesale / Retail Transportation / Warehousing Finance / Insurance / Real Estate Professional Services Business and Support Services Education / Health Care / Government Information / Cultural / Recreation Accommodation and Food Services Other Services Service-Based Sector Goods-Producing Sector 14.5% 14.0% 14.7% 15.0% 20.8% 20.9% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Percentage of Businesses (%) Note: Enterprises include only those companies that had a minimum of $30,000 in annual revenues, or are incorporated under a federal or provincial act and have filed a federal corporate income tax form within the past three years. Source: Statistics Canada, Canadian Business Patterns, December 2007 and

11 Distribution of Good-Producing and Service-Based Sectors, 2008 Service-Based 84% Goods- Producing 16% Note: Enterprises include only those companies that had a minimum of $30,000 in annual revenues, or are incorporated under a federal or provincial act and have filed a federal corporate income tax form within the past three years. Source: Statistics Canada, Canadian Business Patterns, December Number of Enterprises in Halton by Industry, 1999 to ,000 12,000 Number of Businesses 10,000 8,000 6,000 4,000 2, Year Construction Manufacturing Other Goods-Producing (1) Wholesale / Retail Trade Transportation / Warehousing Finance / Insurance / Real Estate Professional Services (2) Public Services (3) Other Services (4) (1) Including primary industries, mining and utilities (2) Including business and support services (3) Including education, health care and government services (4) Including information, recreation, accommodation and food services Source: Statistics Canada, Canadian Business Patterns, December 1999 to

12 Halton Business Development Centre s Small Business Quick Facts The Halton Region Business Development Centre is committed to assisting entrepreneurs make informed business decisions the first step to successfully launch or grow a business. Through a series of ongoing seminars, one-on-one consultations, and youth entrepreneur programs, the Business Development Centre provides relevant, current information and resources to help meet the needs of Halton entrepreneurs. Small Business Outreach Category Q Q %Change Total Inquiries (telephone/ /walk-in visitors) 2,567 2, % Client Consultations % Seminars and Workshops % Seminar and Workshop attendance Outreach Presentations to Community Organizations Source: Enterprise Centre Reporting System % % For more information, please busdev@halton.ca Halton Region Dial 311 or Toll free HALTON ( ) TTY Business Development Division LPS-09005