By Chris Jones/The Oshawa Express
Durham’s competitiveness in the GTA was a mixed bag between 2011 and 2016, according to a recently released regional study.
In that timeframe, Durham showed stronger rates of employment growth in comparison to other municipalities in the Greater Golden Horseshoe (GGH) in areas such as agriculture, construction, and transportation.
However, industries such as a manufacturing, wholesale and retail trade, information and culture, and utilities, grew at a slower rate.
The study compared Durham Region with other municipalities, such as York, Peel, Halton, Niagara, and Waterloo regions, the cities of Hamilton and Peterborough, and Northumberland County.
The City of Toronto was not included as a comparator.
According to the study, Durham has approximately 30 million square feet of industrial gross floor area, which equates to three per cent of the Greater Toronto and Hamilton Area (GTHA).
However, in comparison to the total industrial gross floor area, Durham also has nine per cent of the population in the GTHA.
Between 2011 and 2016, Durham industrial net market rents were lower than the area average, sitting at $6.04 per square foot. Durham also had a small share of the GTHA’s major office market at two per cent.
The study also notes that between 2011 and 2017, Durham represented about one per cent of the GTHA’s industrial development. However, during that same period, the amount of industrial jobs in Durham was down by 1.4 per cent.
In comparison, Halton, Hamilton, York and Peel, all experienced growth of between three and eight per cent.
Peel accounted for almost half of the growth on its own at 47 per cent.
Over half of new office development occurred in Toronto between 2011 and 2017 according to the study. Peel also had 25 per cent, while Halton had 12 per cent, York had 11 per cent, and Durham only represented one per cent of the growth.
Between 2011 and 2016, Durham had an office growth rate of 6.6 per cent. This was comparable to Peel, which sat at 6.8 per cent, but was much lower than that of York at 13.8 per cent, Halton at 11.4 per cent, and Waterloo at 16 per cent.
The study notes that “demand for office space in the GTHA in employment areas is increasingly single-tenant, and integrated with multi-purpose facilities (e.g., research and development, training centres, wholesale trade) in campus-type settings.”
The study also observed that 64 per cent of Durham’s population that is 25 years of age or older has obtained a post-secondary degree. The study notes that this is comparable to the survey average, but is lower than areas like Halton and York, which sit at 75 and 70 per cent respectively.
One advantage that Durham has according to the study is the Oshawa port, but Hamilton and Halton have the most well-rounded access to major markets because of airport access, as well as overall business travel.
The study also points out that Durham has some of the lowest employment land prices, while also featuring some of the lowest utility costs, and industrial development charges.
However, the region also has 1,800 acres of vacant, “shovel-ready” employment land, with only 490 acres being market ready as well. The remaining 1,310 acres are not considered for sale, and there is no indication as to when this might change.
Durham also ranked third in respect to business support environments. The study takes note of the cultural asset offerings, such as performing arts venues, as well as the number of recreation centres.
Durham may have ranked higher if not for its low score on restaurant offerings, with the study singling out the lack of fine-dining opportunities.
The study proceeded to look at five industry target sectors, including agriculture and the agri-business sector, in which Durham ranked second in competitiveness, behind only Hamilton.
This was due to the fact Durham offers the lowest wages in the food processing sector, as well as its strong local port network.
Durham is also competitive in the health sector, as it ranks third because it has the third largest labour force that is able to support pharmaceutical manufacturing.
According to the study, Durham’s health sector is on par with that of Hamilton, but has slightly higher development costs than Niagara and Peterborough.
Durham’s digital media sector is also quite competitive, as it ranks fourth amongst areas the study looks at.
The study notes that Durham is fourth in terms of labour force and business base, and even has more digital media bases than Waterloo.
Durham also has lower associated operational costs than areas such as York, Peel, Waterloo, and Halton, and even has slightly lower costs for digital media start-ups.
Durham’s energy, environment, and engineering sector is ranked second in competitiveness. It ranks so highly because it produces approximately 30 per cent of Ontario’s electricity.
The study also shows that Durham has one of the lower office development costs in the GTHA, as well as the lowest commercial tax rates compared to the other municipalities.
However, a large part of the reason that Durham is not number one is the fact it is the farthest area in the GTHA from a U.S. border crossing.
Durham also ranks second in the advanced manufacturing sector according to the study, as it has significantly lower development and land costs in regards to vacant industrial and employment lands.
However, the study also shows that Durham is less favourable due to its lack of access to major markets, such as the U.S.
The study says that overall, Durham is competitive in these five sectors, noting its strengths lie in its low industrial and office commercial lease rates, competitive property taxes for industrial and commercial office development, competitive development costs, and affordable wages for start-up business.
However, the region’s shortcomings include its small share of emerging skilled workers, limited availability of transportation as well as logistics services, the distance between Durham and the U.S. border, which leads to longer import and export lead times.
Other challenges include Durham’s distance from Pearson International Airport, as well as its lack of alternative cargo opportunities on the east side of the GTHA, and finally, the average general logistics industry performance when it is compared to that of York and Peel.
Major employment areas around Durham were also assessed, which showed that despite the region’s relatively large supply of vacant employment land, the land that is ready to be sold is limited.
However, the study notes that the shovel-ready employment land is expected to improve with the lands surrounding the Highway 407 corridor becoming ready for development.
The study also looked at Durham’s cost competitiveness and its financial feasibility, and discovered that “Durham’s municipalities are cost competitive with surveyed comparators in the GTHA with respect to industrial and office development.”
However, the study shows that Durham’s municipality’s industrial development is similar or less cost competitive to areas such as Brantford and Peterborough.