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Which way, Sault Ste. Marie?

City overhauls economic development department amid industrial uncertainties

The grim reality of economic uncertainty in Sault Ste. Marie has led to a shakeup in the northeastern Ontario city’s approach to economic development.

A day after council decided that the city’s model for the Economic Development Corp. (EDC) , and the Innovation Centre needed restructuring, with $444,656 cut from the EDC’s budget to be spent elsewhere, Tom Dodds, the Sault’s economic development CEO tendered his resignation on Aug. 1.

“We’re taking this moment to take a comprehensive look at what we do, how we do it, what can do better and differently,” explained Rob Reid, president and chair of the EDC’s board of directors.

“Anything we can do to revitalize things and get moving in a more positive way, that’s all good for the community.”

He wasn’t aware if other staff changes or reshuffling are in order.

With Essar Steel Algoma – the lynchpin of the city’s economy – still under creditor protection and the company’s ownership situation far from certain, there has been an ongoing community discussion to create a more diverse economic base beyond steelmaking.

Essar owes the city $26 million in property taxes, about a quarter of the annual tax levy.

“At the end of the day, the city has a lot of challenges and we need to find ways to address those and we need to get the economy rolling,” said Reid.

City council initiated an economic development review process more than a year ago. Involving the CAO’s office and an outside consultant, the marching orders were to find out if the city was getting the best results for its economic and community development dollars.

The city annually contributes $277,890 to the Innovation Centre and $1.7 million to the EDC, along with providing $500,000 annual to an economic development fund.

Reid said Dodds’ resignation wasn’t the result of a performance appraisal or any shortcoming with the corporation but rather an outcome of the review process.

“(Dodds’ resignation) announcement is part of that process but not a direct result of that.”

A city news release said the CEO's position will not be filled. The EDC management team will report to the board of directors.

A July 31 report to council from deputy CAO Tom Vair of the city’s Community Development and Enterprise Services, identified duplication between the EDC and the Innovation Centre, a need for more efficiency, and a clearer vision on roles within economic development.

“Step change is required and we need to act with urgency,” said the report’s analysis in pressing for immediate change.

Under the new organizational flowchart, the EDC will handle business retention, attraction and expansion; export opportunities, infrastructure development, and tourism.

The Innovation Centre will oversee technology and innovation development, provide support for tech companies and start-ups, run the Community Geomatics Centre, and handle special projects like the lottery and gaming initiatives, energy projects, and agricultural opportunities.

The municipality, itself, has set up a Community Development Fund and will steer the development of a strategic plan, handle community promotion, arts and culture development and work on the labour front to attract newcomers and bring home ex-pats.

Reid said he’s not disputing council’s decision but understands they wanted to change the model that’s been used in Sault Ste. Marie for years.

“I don’t think there’s anything wrong with taking a look at what’s being done, and I think that if you look at the general situation of our community – like others in Northern Ontario – there’s a real need for growth and new opportunities.

“Everybody’s on the same page. It’s not like did we anything badly in the past, but at the same time with the reality of what’s going on around us we need to do more and do better.”

The EDC has traditionally been set up as an arm’s length corporation with the autonomy to chase leads and work on its own projects. More involvement by council or city administration looks likely heading into 2018. To what degree is not known.

“We have to see what our memorandum of understanding looks like. It’s too early to say that,” said Reid.

“But I do think the fact that the city set up its own community development organization, and has put resources toward that, says that they’re definitely going to be more directly involved than they have in the past.”

Reid doesn’t expect these organizational changes to negatively impact the Sault's bid to land a potential ferrochrome smelter to process chromite from the Ring of Fire.

The Sault is competing against Thunder Bay, Timmins and Sudbury to convince Noront Resources that it has the infrastructure in place and the transportation connections to host the processor. Noront is expected to make an announcement on a site at year’s end.

“We’re coming together as a community to put the best position we can forward and I believe we have all the capability we need to put an excellent bid together,” Reid said.

Dodds was appointed as head of the EDC in 2011 following the departure of Bruce Strapp, who became executive director of the Northern Ontario Heritage Fund.

Over a 30-year career in economic development, Dodds served as director of international business for FedNor-Industry Canada and held other management positions at FedNor and with the provincial government, including as executive director of the Community Development Corporation of Sault Ste. Marie and Area from 1996 to 1999.

Reid credits Dodds with doing a “great job” with the organization, calling him a “great asset to the community.”

“We’re definitely going to feel his loss.”