Deepening connections
The Great Lakes-St. Lawrence region wields impressive economic and demographic clout, but experts urge that collaboration and strong partnerships are critical to sustained prosperity.
Half a million cars roll off the assembly lines each year at the southern Ontario plants of Toyota Motor Manufacturing Canada Inc. Over the last three decades, this manufacturing facility in the Great Lakes-St. Lawrence region has grown from a small plant making only 50,000 cars a year into Toyota’s second-largest factory in the world.
“Historically, this is not a region that has thought of itself in an integrated way. The fact that people are starting to talk about the Great Lakes region as a shared economic region is a significant milestone.”
As Toyota’s operations in the region have expanded, so has its integrated network of affiliates, partners and suppliers on both sides of the U.S.-Canada border. This ecosystem, says Stephen Beatty, vice president, Corporate at Toyota Canada, has been key to the company’s success.
“The Great Lakes region is an epicentre for experts in a wide range of areas that include IT, marketing and manufacturing,” he says. “The collaboration among these sectors is pivotal to the changing retail environment.”
It’s a sentiment that’s increasingly being embraced by individuals, businesses and other organizations in the Great Lakes-St. Lawrence region – an area that includes Ontario and Quebec in the north and Michigan, New York, Minnesota, Indiana, Ohio, Illinois, Wisconsin and Pennsylvania in the south.
The Great Lakes-St. Lawrence region may be modest in geographic size, but it wields impressive economic and demographic clout. With about $7.7-billion in GDP and 46 million workers in total, the region accounts for almost 30 per cent of the combined Canadian and U.S. economic activity and workforce.
Doug Porter, chief economist and managing director at BMO Financial Group, says collaboration and strong partnerships have been critical to sustained prosperity in this dynamic region.
“There are tight linkages within the region and across the border, and this is especially the case in the auto industry, which is incredibly integrated,” he says. “And while there’s a lot of focus on trade deficits and bilateral trade balances, the reality is that the overall trade between Canada and the U.S. is very close to balanced.”
With the North American Free Trade Agreement and a host of other cross-border issues back on the drafting table, stakeholders and policy-makers need to work more closely than ever to ensure that any changes or new regulations will be beneficial – or at the very least, won’t be harmful – to the people and businesses in the Great Lakes-St. Lawrence region, says Mark Fisher, CEO of the Council of the Great Lakes Region, a member-based organization that works with businesses, policy-makers and various other organizations to advance the region’s long-term sustainability and competitiveness in a borderless global economy.
Many of today’s prevailing issues certainly have serious implications for the region. For instance, any effort that puts border security ahead of enhancing the flow of legitimate travellers and goods across the border could adversely affect the region’s favourable business climate – a potential outcome that could be avoided or eased with multimodal pre-clearance as well as smarter use of technology at the border.
“We also need to look at how we can optimize transportation modes for moving people and goods into, around and out of the region,” says Mr. Fisher. “When you look at rail, road, marine and air systems, we don’t view them in an integrated way. As a result, we often have excess capacity in some modes, such as marine, but congestion on our roads and major airports.”
Recent discussions about the possibility of implementing a border adjustment tax are a cause of worry for Great Lakes businesses, says Mr. Fisher.
“If you look at the auto sector, cars and parts are moving across the border multiple times before final assembly,” he says. “As currently proposed, a border adjustment tax will have a significant negative impact on the region’s sectors and commercial supply chains.”
What’s needed today, says Mr. Fisher, is a strategic approach that encourages bi-national co-operation by viewing the Great Lakes-St. Lawrence region as a single economy. He’s already seeing advances in this direction.
Since the council was formed just over three years ago, he has increasingly heard leaders in business, government and academic communities discuss the region as a single economy. There’s even talk today of a Great Lakes free-trade zone.
“Historically, this is not a region that has thought of itself in an integrated way,” says Mr. Fisher. “The fact that people are starting to talk about the Great Lakes region as a shared economic region is a significant milestone.”
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