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Regional Business Report: The City of Winnipeg.

Far from the madding crowds and smack in the middle of Canada, Winnipeg links East with West. The city's economic base is highly-diversified, well-balanced and stable. Ironically, it's this diversity that is both Winnipeg's greatest strength and its biggest challenge.

On the plus side, Wmnipeg's diversification has served to insulate the economy from the boom and bust cycles which plague most other cities. On the down side, Winnipeggers became complacent. Content with the moderate but steady pace of development, they were slower to react to the fundamental shifts taking place in the national and global economies.

But that was yesterday. Today, Winnipeggers - fed up with their city's negative image - are digging in their heels, taking stock, and developing a strategic plan that will put the city they care so much about back on firm ground.

Enter Winnipeg 2000, a newly-minted organization comprising key representatives from all sectors of the economy. Established to provide active guidance and leadership, its mission is to encourage and develop economic growth and to create a revitalized image for Winnipeg.

The mere creation of Winnipeg 2000 has raised expectations and enthusiasm. "It's been like a lightning rod," says Kerry Hawkins, chairman of the Winnipeg 2000 Leaders Committee and president and CEO of Cargill Limited.

The sheer volume of people contacting him or members of the committee to volunteer their time, energy, resources, and perhaps just as important, their ideas, has been impressive. "Our challenge will be to maximize the strikes and bring it afl together," says Hawkins.

Topping the committee's agenda are: business development image; and, myth and reality. "Business goes to business for information," says Hawkins. He believes that linking a prospective business interest with the appropriate local business people in the same sector is a great deal more effective than any brochure or political rhetoric can hope to be. "Our technique is persuasion, reinforced with solid facts," says committee member Harold Buchwald, QC.

So far, so good. An embryonic version of the Leaders Committee played an important role in convincing Hughes Aircraft of Canada to select Winnipeg as the site for its new $10-million facility to house its acoustic technology division. Kai Thomassen, president and CEO, cited Winnipeg's diversified industrial base as a prime motivator in the company's decision.

Efforts to revitalize Winnipeg's image are also underway. The aim is to develop for the city a common purpose and strategy that is positive, forward-thinking and dynamic. Banking on both the community spirit that exists in this city and the strong commitment to change, the committee expects to move forward with speed.

"Our quality of life, our four seasons, our location in the centre of Canada, our transportation networks, our highly talented workforce, our high level of education, the potential of our native community, our work ethic - all of these are what make Winnipeg unique," says Hawkins.

He might also have added: affordable housing; a competitive and entrepreneurial business climate; a plentiful and secure source of clean, fresh water at a reasonable price; world-class cultural attractions; an abundance of inexpensive and reliable hydro power; and a high-quality service infrastructure.

Clarifying what is myth and what is reality, may be a tad more difficult. There are both perceived and real problems," says Hawkins. "We want to correct those perceptions that are wrong, and where there is a real difficulty, fix it."

Under the heading of `myth' is the belief that Winnipeg's labor force is disruptive and militant. In fact, Manitoba - and by extrapolation Winnipeg, which accounts for approximately 60 per cent of provincial employment - can boast the second lowest rate of days lost to strike action in the country. (Prince Edward Island scored top marks but its placing may not be so much a reflection of its workforce as it is a reflection of its small industrial base.)

Another perception is that Winnipeg's economy is largely based on the province's agricultural sector. But while it is still an important contributor to the city's economy - numerous large grain-related operations are headquartered here - the reality is that the service, manufacturing, transportation and communications industries far outstrip the primary sector's share of the Winnipeg economy.

Indeed, Winnipeg is home to the most diversified secondary manufacturing base in Canada. With highly developed technology in all key industrial segments, it is also the largest manufacturing city in Western Canada. Products range from Bristol Aerospace's rocket propulsion systems and Ford New Holland's bi-directional 100 h.p. four-wheel-drive tractors to Export Packers's riboflavin binding protein and Western Glove Works's Wrangler jeans, and includes almost everything else in between.

Kraus Industries is a prime example of a diversified company that is right at home in Winnipeg. A manufacturer of oil and gas monitoring/dispensing equipment, it has diversified and integrated its operations over the years. Command Start is owned by Kraus but operates as a stand-alone company. It is the largest manufacturer and distributor of remote control automotive engine starters in North America.


Another perception about Winnipeg is that it is isolated and too far from the major centres of commerce. But the city feels its location in the geographical centre may be advantageous.

As a transportation hub, Winnipeg has more transport terminals and facilities - air, rail and land combined - than any other Western Canadian centre. Easy access to both the East and the West can be accomplished with a minimum time distortion whether it is the movement of people or product. The same is true of the markets and money centres to the south.

Consider the recently expanded and upgraded Winnipeg International Airport. Only a 15-minute drive from the city centre, it is a Class A facility, open 24 hours a day - without restrictions - and with an availability of flights to a wide variety of centres. Winnipeg is probably the only location in Canada where it is possible to make one-day trips to most major centres of commerce in North America.

Rail service - unmatched from Thunder Bay to Vancouver - is provided by both of Canada's national rail systems. Three U.S. rail lines link Winnipeg to 25 U.S. states. Both CN and CP maintain major marshalling and maintenance yards in Winnipeg and along with Burlington Northern Railways, offer full intermodal services.

Highway transportation provides easy access to a market of 64 million people within a two-day trucking distance. Ten of the 14 leading interprovincial carriers are headquartered here and another 30 North American trucking companies have terminals in Winnipeg.

Winnipeg's strategic location in North America's prime Central time zone, with only one hour difference to the eastern U.S. and only two hours difference to the west coast, provides die broadest and most convenient continental time-frame for communicating with clients and suppliers. The Gemini Group, a joint venture between Air Canada and Canadian Airlines International, was established in Winnipeg for this reason.

Besides the practical reasons, Winnipeg boosters offer other arguments for locating here. Being in the centre of Canada provides you with a more balanced view of the country, says Jack Fraser, president of Federal Industries, a diversified operating company with revenues of $1.9 billion. "It also prevents us from getting caught up in the herd instincts of places like Toronto," says Fraser. "When you get back to Winnipeg, you can exercise more independent thought."

Bill Loewen, chairman of Comcheq Services, a $20-trillion payroll processing company, likes Winnipegs size and location. "Winnipeg is a big enough market to support a start-up operation, but isolated enough that you have an easier time from a competition point of view," he says.

Which is not to say that Winnipeg is not competitive. It is, but most believe there is room for improvement. Which brings us back to Winnipeg 2000. Under the "fix it" heading, Winnipeg is perceived as having an anti-business stance in regard to taxation and labor legislation.

"One of our priorities includes changes to tax legislation and regulations affecting business," says Hawkins. We have created a vehicle for the provincial and city governments to work together with the business community for the first time. It's a significant step forward." The goal is to create a user-friendly environment that makes people and business want to come here.

The recent fall provincial election awarding a majority government to the Progressive Conservative party is seen by the local business community as a step in the right direction. Not only are the PCs viewed as being more sympathetic to business interests, but Premier Filmon pledged lower taxes and new programs that will both enhance established business and attract new business investment to Winnipeg.

Of particular interest, and the hot spots in the Winnipeg economy, are the health care, aerospace and data processing industries.


The established health technology infrastructure in Winnipeg is extensive, with new companies and research facilities seeming to spring up to fill major and minor niches in the medical marketplace. More than 70 companies employing over 4,000 people are directly involved in producing goods or services for the health care industry.

Topping the list of institutions is the Health Sciences Centre, Canada's largest integrated teaching/hospital complex, which is currently undergoing a $48-million expansion. It will soon welcome two new neighbors: a $93-million, world-class Laboratory Centre for Disease Control (LCDC) and the Agriculture Department Laboratory for research into animal disease.

The LCDC will provide maximum, level [V biological containment facilities and will focus on viral studies and microbiology. The lab will be only one of a fe such facilities worldwide and has already attracted close to $50 million in grant money. Once it is up and running, say local medical scientists, it will act as a magnet in attracting both the scientific community and new investments in the health products industry.

It will also five credibility and substance to Winnipeg's claim as the northern tip of "medical alley," which stretches south to Minneapolis, Rochester, Denver, Atlanta, and Houston. Winnipeg's close proximity to Minnesota forms the most diversified and comprehensive health industry complex in North America.

A driving force behind Winnipeg's aggressive health care industry is the Canada-Manitoba Health Industry Development Strategy, a five-year, comprehensive plan focusing on research and development and new health industry ventures. Winnipeg has both the expertise and resources to create, develop and adapt technology to make health industries competitive in the marketplace and world leaders in innovation and product design.

It is also often the preferred site for new health industry investments in Canada. It is projected that new investments in this city's health care industries will be in excess of $500 million by 1995.


Winnipeg's manufacturing sector has long been recognized as die most diversified in the country. Only three cities in Canada have more manufacturing establishments but none comes close to matching the diversity. Annual shipments in this sector are fast approaching the $6-billion mark, with projections for continued growth and expansion.

Leading the way is the aerospace industry which has more than quadrupled in the past decade. "I can't think of another industry where there is as much reason for optimism," says Robert Jack, senior development officer with Manitoba Industry, Trade and Tourism. Industry sources agree, predicting continued high growth levels over and above 600 million by 1995.

Boeing Canada Technology has just completed its second expansion - valued at $31.5 million - making it among the most modem facilities of its kind in North America. This underlines the company's long-term commitment to doing business in Winnipeg.

Bristol Aerospace is western Canada's largest aerospace company and one of North America's largest commercial contractors for research rocket payloads, with over 150 missions to its credit. Employing 1,840 in the design, development and manufacture of a broad range of products, its annual sales are roughly $150 million and its client list includes such household names as NASA, Rolls-Royce and General Electric.

Bristol is also Canada's principal industrial support centre for the CF-5 fighter jet fleet. Viewed by most Winnipeggers as a "consolation prize" - the federal government chose to award the more lucrative and sophisticated CF-18 maintenance contract to Canadair of Montreal although Bristol's bid was lower in cost and most believe ranked higher in technical expertise - it could turn out to be a blessing in disguise.

"From the point of view of the total work involved, the amount of money and the export opportunities, the CF-5 is actually better than the CF-18," says Bert Beatie, president and CEO of Bristol. There are close to 2,500 F-5s in use around the world and Bristol is well positioned to win a good share of the market.

Unisys Canada, Defence Systems has extensive experience in the development and supply of computer hardware, electronic processing equipment and complex computer systems with broad military and civilian applications. The company recently launched a quality assurance program in the Winnipeg plant in its bid to win sub-contract work on a major U.S. Navy electronic procurement program.

Increased demand as well as the recent revolution in the use of structural composites and on-going advances in high technology applications has spurred tremendous growth in the number of smaller sub-contractors entering the Winnipeg aerospace industry.

Other major industries include electronics and electrical products; food and beverage processing; transportation equipment manufacturing; machinery; printing and publishing; and apparel.


Winnipeg has numerous advantages in the field of data processing. High-quality fibre optic ring networks, cheap, reliable and "spike-free" hydroelectric power, and a skilled pool of professionals help make Winnipeg attractive to companies involved in information processing.

Terry Patton, acting general manager for the Winnipeg Business Development Corporation (WBDC), is concentrating on luring companies with data processing operations to Winnipeg. He cites lower salary costs compared with other major Canadian cities, a low rate of staff turnover, and a mid-continent time zone as unique advantages to locating here.

The Manitoba Telephone System (MTS) is just as keen to attract new business and has already reduced long-distance rates by 17 per cent, with another 20-percent cut expected this fall, making MTS rates among the lowest in Canada.

MTS will also customize the network to meet each company's individual requirements and will incorporate the sharing of dedicated networks wherever feasible, further improving the cost-effectiveness of operating in Winnipeg.

One company that was quick to see the advantages was STM Systems Corp. of Markham, Ontario. It recently purchased the Manitoba Data Services from the Manitoba government and besides promising to maintain existing jobs will add another 220 direct jobs and 270 spin-off jobs.

The company plans to transfer some of its federal government contract work from Ottawa to Winnipeg because there are too few skilled people to meet its needs in Canada's capital city. Patton is hoping other companies will follow and the main targets of the WBDCs promotional campaign will be the back offices of banks and trust companies in downtown Toronto.


The oldest academic institution in Western Canada is the University of Manitoba (U of M). Although located in Winnipeg, the number of full and part-time students, teaching, administrative, and support staff would rank it as the third-largest community in the province of Manitoba.

All the major disciplines are represented, including well-established faculties of engineering, architecture and medicine. College universitaire de Saint-Boniface, an affiliated college of the U of M, offers French-language courses at its own campus in St. Boniface, Winnipeg's French community.

The University of Winnipeg (U of W) is smaller and its programs fewer than the U of M - 7,400 students enroll annually to study arts, science and education. But it's proud of die quality of education it offers at its downtown campus.

Winnipeg's technical colleges boast a good success rate for matching training to employment requirements. The Red River Community College houses Manitoba's Manufacturing Technology Training Centre, a federal-provincial funded skill growth initiative. As industrial technology advances, the Centre will respond with qualified graduates trained in the innovative skills needed.



Winnipeg companies believe they have both a good pool of talent and research facilities to draw upon to put them and keep them on the cutting edge of advanced technologies.

The National Research Council's Canadian Institute of Industrial Technology (CIM), located in the heart of downtown Winnipeg, works in partnership with industry to research and develop new technology and to transfer that technology to the private sector. Currently, research is concentrated in the areas of sensor-based robotics and controls, automation and artificial intelligence.

The Manitoba Research Council's Industrial Technology Centre is staffed by more than 50 scientists, engineers and technicians supported by fully-equipped laboratories. Its areas of expertise include: computer-aided engineering (CAD, CAM, CIM), communications, electronic engineering, mechanical and manufacturing engineering, biotechnology materials and chemical technologies.

The University of Manitoba, with a $36-million research budget, has a host of research facilities and programs geared to helping industry stay competitive in the marketplace.

Also at the U of M campus is The Transportation Institute, dedicated to all aspects of transportation technology, management and economics. It may come as a surprise to some, but Fisheries and Oceans Canada's Freshwater Institute is also here.

Not to be outdone, industry has established centres of excellence and technology labs too. IBM has its Geographic Systems Support Centre, Wang has a Centre for Imaging Technology, and Unisys has both a Healthcare Competency Centre Laboratory and a Knowledge System Centre, all contributing to Winnipeg's stature in the field of research and development.


One of the most important considerations governing a growing company is that it has room to expand and extend the space it uses affordably. Those are probably the two biggest problems facing firms whose roots are in Central Canada - commercial, office and industrial land is horrendously expensive, if a company can even find it.

To Winnipeg Realtor Gary Bachman of Bachman & Associates, those companies that insist on locating in the "Golden Triangle" are fooling themselves, and are throwing good money after bad.

"What does it do to the bottom line when a company has to pay $50 and up for a square foot of office space, when better facilities can be found in Winnipeg at less then half the price?" Bachman asks.

Locating in Winnipeg has a number of advantages which firms outside the province are only now beginning to appreciate. First is the availability of high-quality office space, which leases out at an average rate of between 23,200 and 32,500 square metres annually.

Winnipeg, like the rest of the country, is in a `temporary blip' (as of writing in mid-September) thanks to recent high interest rates and lowered consumer confidence. But that could work in Winnipeg's favor, since the total investment required to open an office or to start a manufacturing process is much less than is required in central Canada. Class A space in Winnipeg typically leases for $172 per square metre.

Class B and C office space is abundant. The Winnipeg Core Area Initiative renovated over 185,000 square metres of space in The Exchange District alone, much of it immediately snapped up by developing businesses.

On the industrial side, Winnipeg boasts a total of 13 industrial parks covering some 648 hectares of prime land well-suited to factories and warehouses. Of this, just over 202 hectares are available for development. Selling price for serviced industrial land in Winnipeg ranges between $128,000 and $370,000 per hectare, compared to $600,000 to $2.5 million per hectare in the Toronto area.

Winnipeg has a lot of advantages for any company, Bachman feels. What he can't understand is why the "smart" business people in central Canada haven't yet discovered them - like Federal Industries did several years ago, when it moved its head office to Winnipeg.

Winnipeg's stable economy presents an attractive investment opportunity and "a lot of investors like Winnipeg," says Little. Better news for these far-seeing investment groups is that as Winnipeg's economy grows - and it could well be on the way to taking off - so will the value of their investments. It's an "everyone wins" situation, says Bachman.

But Winnipeg has some competition when it comes to attractive real estate prices for those companies that don't absolutely have to locate in the city. That competition is coming from Interlake's Triple S community, one of the fastest-growing areas in Manitoba.

Triple S stands for Selkirk and the rural municipalities of St. Andrews and St. Clements, with a combined population of nearly 30,000. Although they're all rural communities, their growth rate in the past few years has been substantial; no other area in rural Manitoba has issued as many building permits (valued at $17 million).

These areas are making big efforts to attract not only industry and business, but people as well. Selkirk, about 21 kilometres north of Winnipeg and with a population of about 10,000, is the focal point of the Triple S area, and that's where a substantial part of the economic growth is taking Place. The other areas, particularly St. Andrews, are seeing growth in residential construction - urbanites who are tired of the city rat-race and want a place to relax in the country. The land, level and well-drained, is ideal for residential and industrial development and is relatively inexpensive.

In the past five years, the Triple S area has shown a 9.8 per cent population increase, a 3 3 per cent growth in new businesses, an increase in gross individual income of 5.5 per cent, and an increase in retail trade of 34 per cent, to $70 million.

While good homes and a pleasant lifestyle are major draws to people, the area believes it has major benefits for industries as well. As proof, Triple S boosters point to Manitoba's second-largest industry which is located in Selkirk; the Manitoba Rolling Mills, with sales of more than $115 million, employs about 550.

The major industrial parks in the area offer a significant advantage to entrepreneurs: where Winnipeg property taxes are $10.75 a square metre, in Selkirk they're $1.75. To a business that doesn't need to be in Winnipeg that may be an important drawing card.

The area is geared for success, says Greg Michie, managing director of the Triple S Development Centre. "I think we have a tremendous opportunity here."
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Title Annotation:supplement
Author:Mouflier, Sylvia; Park, Kip
Publication:Manitoba Business
Date:Nov 1, 1990
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