Shortage of industrial land in Ontario threatens auto investment, report says

The shortage of industrial land in Ontario threatens automotive investment and economic and social well-being in that province, according to a new report.

The Trillium Network for Advanced Manufacturing, based in London, Ont.,  released "Ontario’s Industrial Land Shortage: Why It’s a Problem and What We Can Do About It" on Thursday. It says hundreds of factories have closed in Ontario since the early 2000s. 

Report authors Brendan Sweeney and Michael Cox examined 169 factories that closed in Ontario since the mid-2000s. They found 57 per cent of those factories are no longer used for manufacturing, even though 50 per cent — 25 per cent each — were used for auto production and food production before closure.

Of the 169 former factories examined, those located within the boundaries of the City of Toronto are most likely to have been — or will soon be — converted into housing or multi-purpose developments that include housing. Those outside of Toronto are more likely to be used for commercial, warehousing, and logistics purposes. 

“The shortage of industrial land is occurring at a time of substantial interest in boosting Ontario’s manufacturing sector as means to support post-pandemic economic recovery and re-establish national supply chain security,” the report reads. “Suffice to say, the timing could not be worse. 

“The shortage of industrial land is an impediment to the growth of manufacturing in Ontario.”

The report notes that the sites examined “are ideally located near transportation infrastructure and population centres.”

“If suitable land and buildings are not available, prospective manufacturers will bypass Ontario and those already here will invest elsewhere,” the report says.

Sweeney and Cox note that small- and medium-sized businesses based in and out of Ontario that outgrow their current facilities are often required to relocate to larger facilities. 

“Again, these companies will be limited in their ability to invest and grow if industrial land and buildings are not readily available or if the price is too high.”

Rising property values throughout Ontario have outpaced those in other jurisdictions, such as Michigan and Quebec, with which the province competes for manufacturing investment. This has caused investors to consider locations outside of Ontario. 

The growth of e-commerce has also led to the loss of prime manufacturing locations. The report says the growth existed prior to the COVID-19 pandemic but increased significantly during the pandemic. 

“It has led to increased demand for warehousing and logistics facilities. These facilities are located in buildings or on land — including a former Ford assembly plant near St. Thomas — that could be used for manufacturing.”

The Trillium Network for Advanced Manufacturing suggests the province create, maintain, and publicize a centralized database of available industrial land and buildings. It also says governments of all levels should support upgrades and retrofitting where a return on investment from manufacturing is likely.

And most uniquely, it suggests that industrial land be treated the same as  heritage properties.

“Communities across Ontario will rally to ensure historic properties receive a heritage designation. These properties may have aesthetic value, but their economic value is limited. Perhaps it would be appropriate to protect tracts of industrial land in a similar fashion? After all, this is the land that houses the manufacturers that generate tax revenues that fund the agencies that administer heritage properties. Some of those taxes could even be earmarked specifically for heritage committees.”