A jolt for declining towns

SARNIA, ONTARIO - Driving his signature red Ford Mustang with Bruce Springsteen blasting on the radio, Sarnia Mayor Mike Bradley is a politician who knows how to get ink.

He writes his own humour column in the local newspaper and even scored a cameo in Michael Moore's documentary Bowling for Columbine. His easy manner has kept him in office for 22 years. That, and his ability to help create jobs.

The unemployment rate in Sarnia is lower than most other cities in southern Ontario, but that was not always the case. In the mid-1990s Sarnia, known as Chemical Valley, hit tough times. Between 1994-1996, there were roughly 7,000 layoffs in the city of 79,000 and the jobless rate hit 18%.

"Every time the phone would ring I'd say, ‘How many, and when,' " Mr. Bradley recalls. "Those were terrible times, but they taught the one-industry town a lesson: diversify, diversify, diversify."

Sarnia has been slowly diversifying from Chemical Valley to hub for alternative energy. It boasts the largest solar farm in North America, Canada's biggest ethanol plant and a new research park. "We were in alternative energy before it was sexy," Mr. Bradley says.

Despite Sarnia's head start, Mr. Bradley is angry his town might not get a piece of the biggest alternative energy deal announced in Ontario.

Last month, Ontario Premier Dalton McGuinty announced a $6.7-billion agreement with Samsung C&T Corp.'s Trading and Investment Group and Korea Electric has Corp. to generate solar and wind power in the province. The consortium, which has promised to build four equipment manufacturing plants, gets priority access and a 4% premium for the power it supplies to the transmission grid. The deal, which snubbed local wind and solar manufacturers, set off a storm of controversy in business and political circles.

It will be months before there are any spades in the ground on the clean-energy deal, but the fight for the business by mayors across southern Ontario is getting down and dirty. Little wonder. A report released last month by Navigant Consulting Inc. states that the renewable energy sector supports 196,000 jobs in the United States. Ontario's Samsung deal is expected to employ 16,000 people directly, with an expectation that tens of thousands of more indirect jobs will be created.

"Oh, definitely, the elbows are up and there's nothing wrong with that," says Sandra Pupatello, Ontario Minister of Economic Development and Trade. "We haven't even dreamed of the kinds of jobs a green-energy market can [generate]."

But Ms. Pupatello is adamant that her government isn't picking municipal favourites. "Samsung will go where it will work for them," she says.

Let the marketing wars begin.

"If it was a business decision, we'd stand a chance. But if it's a political decision, they will be built elsewhere," says Mr. Bradley, who is concerned that two powerful MPPs in Cabinet - Ms. Pupatello and Dwight Duncan, Minister of Finance - are both from the Windsor region, a city competing for the Samsung deal.

So, Mr. Bradley is doing what he does best: Promoting his city to Samsung and the government as a good place to establish a plant because the city has embraced the renewable energy sector. Not only has it attracted a large solar farm, it has raised $40-million for a new University of Western Ontario Research Park, to open in May.

After seeing two auto plants close in two years, St. Thomas, Ont., just south of London, is hoping to lure Samsung by promoting its skilled labourers and "brown fields," the hundreds of square feet of vacant buildings and industrial parks owned by the municipality that can be converted to new enterprises, according to Bob Wheeler, head of economic development for St. Thomas.

Another front-runner in the economic sweepstakes is Chatham-Kent, Ont., a one-hour drive from Windsor-Detroit, which has an unemployment rate above 14%. Shortly after taking over as Mayor in 2006, Randy Hope traveled to South Korea on his own dime to woo manufacturers. He is now leveraging those contacts to secure a plant for his municipality, going so far as to take the local Samsung representative fishing.

Mr. Hope is toting his municipality's ready labour force, water access through nearby Wallaceburg and its green, energy-friendly policies. The municipality has already zoned 1,000 acres for solar farming and erected 40 wind turbines, with another 150 to go up, says Mr. Hope.

The Chatham-Kent mayor is also cleverly playing to Korean "chaebol" corporate pride by publicly deriding other international conglomerates for not having made investments in the province. All the wind turbines erected in Chatham are by either General Electric Co. or Siemens AG. Says Mr. Hope: "I didn't see any initiatives by them to build here."

He adds: "They are driving [shipped turbines] by people with an unemployment rate of 13.7%. It doesn't sit well with the general public."

But the Mayor with the best odds in winning a plant is Eddie Francis of Windsor - a city slow to diversify its manufacturing base. "We put all our eggs into the automotive basket," admits Mr. Francis.

No one paid attention to the smoke signals that the big three automotive companies were sending out. "Back then, if you were to tell the shop owner he needed to diversify, that owner who was running three shifts a day, seven days a week on full payroll, would not have listened," says Mr. Francis.

Now they are all ears. Plants such as Valiant Machine & Tool Inc. are retooling to service the aerospace and medical-device sectors. But with an unemployment rate still at 13%, the former car town is looking to green energy for economic salvation.

"The Samsung announcement is critical to us," says Mr. Francis, who has met with company officials. His pitch is this: We have the most solar days in Ontario, a plan to invest $650-million in capital infrastructure projects and, most importantly, a skilled workforce.

"I appreciate that other communities are trying to say they did this or that - like creating a research park - but we really build things here, that legacy is a skill set we have," he says.

"It's reasonable to put wind or solar plants in towns with a rich history of manufacturing," says John Dybvig, economic development manager for Blue Green Alliance, an environmental/labour coalition lobbying governments to increase investment in clean energy.

Job creation has become a major argument for the renewable energy lobby. A wind turbine requires 8,000 separate parts, which need to be manufactured somewhere. "There's nothing unique or special to make parts in solar or wind turbines that isn't already being done [in the auto industry]," says Mr. Dybvig.

In its 2007 report, the alliance calculated that the creation of a national renewable electricity standard requiring large utilities to generate a portion of their electricity through renewable sources, could create 850,000 jobs. Consider Newton, Iowa, which lost 1,800 jobs in 2007 after Maytag Corp. moved its plant to Mexico. Some of those jobs were recaptured when wind turbine manufacturer TPI Composities Inc. moved in.

But Adam Fremeth, assistant professor of business, economics and public policy at University of Wester Ontario's Richard Ivey School of Business, warns that Ontario's local politicians should temper their optimism: "Ontario is new at this and we will have to compete with six or seven [renewable energy] clusters in the U.S., not to mention the fact that Samsung is a bit behind in entering into this [renewable energy] market."

And not all green projects go according to plan. The town of Pipestone, Minn., got an economic shot in the arm in 2006 when Suzlon Energy Ltd. of India built a wind blade plant and created 320 jobs. By mid-2009, the company was forced to lay off half its workforce. Green power has proven susceptible to economic downturns.

Such news doesn't dampen the enthusiasm of Sarnia's Mayor. Mr. Bradley won't divulge his strategic plan to lure Samsung, but figures he can top the fishing expedition in Chatham. "I will give the delegation a ride in Air Mustang down under the Bluewater Bridge for a banquet of the world-famous french fries made there," says the Mayor.