A marketing effort by the St. Lawrence County Industrial Development Agency to attract Ontario businesses that plays on the provinces increasing power costs has caused some waves north of the border.
We have some ethics in our profession where we dont go after companies directly, said David C. Paul, the economic development director for Brockville, Ontario. This was more of an aggressive approach.
The IDA recently started a campaign to attract Ontario businesses using the availability of low-cost energy through the New York Power Authoritys Preservation Power Program and St. Lawrence River Valley Redevelopment Agency. An IDA brochure also notes research and collaboration with colleges, Gov. Andrew M. Cuomos Start-Up NY initiative to create tax-free zones, the countys labor force, buildings and greenfield industrial sites available for use, the foreign trade zone through the Ogdensburg Commerce Park, an advanced telecommunications network, and the geographic advantage of being between Montreal, Ottawa and Toronto.
Mr. Paul said he thought the IDAs effort amounted to poaching because of the reaction of several companies contacted by the IDA.
Its just the process of how its conveyed, he said.
Mr. Paul said he prefers the relationship Brockville has with Jefferson County, which does not push for relocation of companies but instead promotes cross-border commerce and talks about the opportunities for satellite businesses.
Thats the approach they take and theres nothing wrong with that, Mr. Paul said.
A company interested in expanding into the U.S. is also the ideal customer for St. Lawrence County, said IDA Executive Director Patrick J. Kelly, who does not expect many companies to move their operations solely on the basis of low-cost power.
But energy costs are high enough in Ontario which has some of the most expensive power in North America to make for prickly competition.
The energy issue is certainly a hot-button item, Mr. Kelly said. If we have a selling point, we try to convey that.
Ontarios energy market is the poster child for dysfunction. A recent article in Torontos Globe and Mail outlined the problem.
The culprit for Ontarios pricey electricity is the so-called global adjustment which is added to customer bills, but not the export price. The surcharge is a catch-all that pays for a decade or more of botched deregulation, bloated guaranteed-fixed-price energy purchase contracts and costly efforts to promote wind and solar, while shuttering coal plants, the article said. Meanwhile, independent power suppliers, including wind farms and the privately owned Bruce Power, a nuclear power plant near Kincardine, Ontario, are often paid for electricity they dont ever produce.
The price for energy has some Ontario manufacturers tearing out their hair.
Theyve already announced more increases. While electricity is an important component, its never been as noteworthy as it has become in recent years, said Shelley Bacon, CEO of Northern Cables, Brockville, who was among those who received an IDA brochure among other marketing ploys from throughout the U.S. Weve never reached a point where weve been on a search for another location. We would like the government to address these issues. We hope the cost structure is enough reason for concern where they have to do something here.
The cost of electricity alone is usually not enough for a company to pay the hefty cost of moving, especially to the U.S., said Pierre-Olivier Pineau, an energy market expert at the University of Montreals HEC business school.
If it were only the energy price, they would move to Quebec, he said.
The IDA is not banking all of its efforts on Ontario, Mr. Kelly said. It is talking with area colleges on a market plan geared toward alumni and for joint attendance at trade shows in New York, Boston and throughout New England.
You try to find something where you have a connecting point, Mr. Kelly said. We have a very robust plan for marketing and outreach this year.