April 7, 2000

Lecture Two
Collingwood’s Economy

The critical element for the success of any town such as Collingwood is its economy. People must have a way to make a living or they will move on. The health – or sickness - of the economy will drive the social and the cultural milieu. Understanding the local economy and the economic strategies used in the past is critical to understanding how the place works since the past often shapes the way we look at the future. This lecture will focus on these questions.

There are many theories about the true nature of successful economies, many disputes about which strategy is best, and many jokes about economics and economists – that economics is the ‘dismal science’; that it is best to hire a one-handed economist so as to not be presented with the argument ‘on the one hand, and on the other hand’, and so on. We’ll be avoiding these problems for one basic reason – there appears to be little written about how the economies of small communities function. Considerable thinking has been done about the workings of city economies – the pre-eminent thinker here is the magisterial Jane Jacobs – but there are a few descriptions of the workings of viable economics for towns like Collingwood. I hope that at the end of this lecture we can understand Collingwood’s successes and failures, and can become equipped to grapple with the decisions that will help create a vibrant local economy in the decade ahead. Perhaps we will be able to create the outlines of how the economy of a small town functions.

Starting at the beginning, we must agree that for Collingwood the critical decision was to create a railway terminus at the Hen and Chickens Harbour. Collingwood did not become a thriving economy because of successful farms that somehow managed to give birth to a settlement that grew large and larger. This notion that successful farms are the bedrock of a modern settlement is one that many people believe, but it is certainly not true for Collingwood, probably not true for any other community. Here, the decision made in Toronto to build a railway to improve trade routes, and the decision to terminate the railway at the Hens and Chickens Harbour is key.

In her 1969 book The Economy of Cities, Jane Jacobs discusses the emergence of the world’s first cities about 10,000 years ago, and she concludes:

It was not agriculture then, for all its importance, that was the salient invention, or occurrence if you will, of the Neolithic Age. Rather it was the fact of sustained, interdependent, creative city economies that made possible many new kinds of works, agriculture among them. (p. 36)

The economic strength of cities led to vibrant farms – not the other way around. This is a lesson that our federal government has yet to learn. It continues to subsidize agriculture with billions of dollars a year while refusing serious investments in cities, working on the backward notion that somehow fixing farms will result in better cities.

This general principle of ‘cities first’ becomes very clear when we review the farming sector. The fertile ground on the Escarpment’s edge near Collingwood was discovered as early as 1835, although farming did not begin seriously until the next few decades. Various attempts were made in the Beaver Valley to grow apples and other fruit trees but it was found that tender fruit such as pears, apricots and peaches blossomed too early in the spring, and was destroyed by late spring frosts. Apples became the fruit of choice since they germinated several weeks later when temperatures were consistently above freezing, and could survive. But the apple business was a rather small one in the 19th century, and orchards were often just an acre or two in size in the 1880s.

The Collingwood Evaporator Works was established in the 1870s to produce dried fruit, which could be easily stored and shipped. The first company formed to pack, process and export whole apples was created in 1894, almost four decades after the railway arrived. Apple storage facilities then became common, and they were located close to the railway lines for easy shipment. Local rumour says that peaches grown in the area won first prize at the Chicago World Fair in 1883 and, by the end of the century, John Mitchell had begun an experimental fruit farm in Clarksburg. Mitchell obtained financial support from the Ontario government for his experimental farm and he tinkered with apples, cherries, peaches, pears, gooseberries and plums. With family and friends in 1905 he established a cooperative marketing company called The Georgian Bay Fruit Growers Association. The name Mitchell dominated apple growing in the area and Mitchell’s apple juice was well known in the first half of the 20th century. Government investment in tender fruit improved quality, but it was the town’s transportation opportunities that allowed the agricultural sector to grow into an industry that did more than simply supply local needs, which were limited. This basic fact is true for all agriculture – it only becomes viable when local communities are strong. Saving the family farm depends on strong cities, not the other way around.

Once the railway came to Collingwood, all kinds of activities sprang up, not just agriculture. With a good port, Collingwood became the centre of the lumber trade. Logs – mostly white pine – were floated down the Pretty River and then ganged in booms to be taken to Collingwood. The Hotchkiss & Peckham Lumber Company, at the foot of Pine Street, was one of the town’s first large enterprises, employing 140 people in 1872. Once timber was available, planning mills were established – there were several in Collingwood in the 1860s and 70s including Wilson Brothers and Petermans. Then followed boat making, and cabinet making for ships’ cabins. One thing led to another, and enterprises sprang up to turn raw logs into a myriad of finished products that found a local and sometimes an export market.

The little town began to boom. Railway workers needed a place to stay so hotels and boarding houses were built to served those needs. Businesses needed tools sharpened and repaired, residents needed restaurants, tailors and on and on. Collingwood became a place where businesses realized that a profit could be turned by manufacturing locally all those things that were already being made somewhere else and being brought to Collingwood. Most of the products made here were familiar to other communities and involved no great invention – local businessmen simply copied what someone somewhere else had already done.

Two processes were at work. One is that new work was added to old. A company that began by processing logs might decide to add to its work basic sawing, and then perhaps planing, and then custom planing, and then cabinet making. Vibrant enterprises are always changing by adding new work to old. Says Jacobs, “Innovating economies expand and develop. Economies that do not add new kinds of goods and services, but continue only to repeat old work, do not much expand nor do they, by definition, develop.” (p.49)

The other process is what Jane Jacobs calls ‘import replacement’. Observing that certain goods are brought into the community and sold for a profit, an entrepreneur decides to make the same produce locally and sell it for less money since there will be no shipping costs. The establishment of biscuit factories in Collingwood in the 1870s is a good example of import replacement. So too the tanneries, the foundries, the pork packers, the small machine shops, and the great jumble of industrial activities that made Collingwood boom in the last few decades of the 19th century. Jacobs believes that import replacement is one of the key ways in which a local economy grows.

One current example of import replacement is the wine industry in the Niagara peninsula. No one had to invent a new product and then create a market for it. What was needed was simply learning the skills to replicate an existing product and put it on the market at an attractive price. As we know, this is something at which the Niagara winemakers are beginning to excel. A recent example of import replacement in Collingwood is financial services. Many new residents had to rely on Toronto offices for many financial services – now they are offered here, and have expanded the local economy.

The processes of import replacement and adding new work to old create a great sense of vibrancy in an economy, and this is exactly the kind of environment that favours inventions. There is enough happening that the idea of investing in something entirely new and different makes sense. One invention in Collingwood stands out from the 19th century: the process to manufacture oil.

In 1859 William Pollard patented a process in which he heated shale to a temperature hot enough to force it to yield its crude oil. He then refined the oil, which was used for illumination and lubrication. Pollard set up the Craigleith Shale Oil Works, taking shale from the edge of the bay at Craigleith, just west of Collingwood where an historical plaque now stands, marking the spot. He put 35 tons of shale in giant vats, fired it with logs from the area, and produced 250 gallons of crude oil a day. The invention created a product in high demand. The manufacturing process was difficult, the consumption of timber was considerable to create enough heat, but Shale Oil Works did well for several years. Failure came in an unexpected manner: in 1863 oil was discovered near Sarnia, and that oil was much less expensive and much easier to produce. Pollard’s company collapsed that year since it couldn’t compete.

And that is one problem with enterprises. One never knows what kind of change will wipe them out. Those who made horse harnesses at the end of the 19th century must have been enormously surprised to be put out of business by the new fang-dangled device, the automobile. Enterprises based on new inventions face a different problem, namely it is very difficult to know what is marketable and what is not. For every viable invention there are probably fifty good ideas that don’t fly. A city or a town can never rely on inventions to grow its economy, even though many people are ready to take sizable risky investments on them. Newfoundland politicians invested hundreds of millions of dollars trying to invent a process to grow cucumbers in an icy climate, only to fail miserably. Just last year gullible citizens in the Toronto area invested millions of dollars in an invention that promised to whiten teeth, and the device was magical – so much so that a judge decided it was really criminal activity at heart, and the proponent was jailed.

Relying on a new product or service to create jobs is taking a very big leap of faith. More often than not it fails. The other thing about inventions is that often they are discovered by chance, in the course of some other work that involves adding new work to old. Think, for instance of Viagra, one of the best selling drugs in the last few years. This drug was invented to handle certain blood problems in men after heart operations. The clinical trials of Viagra uncovered that it had an unintended side effect on male sexual desire and performance and the market for the drug was thereby discovered. Many inventions occur in this way – by chance, as manufacturers attempt to make a product for some other purpose. The ones most likely to succeed are those arrived at as the business adds new work to old. This is the key: finding the nexus of investments, skills, and entrepreneurship that encourages new work to be added to old. It is this activity that leads to the possibilities of import replacement and successful innovations and inventions. This is what happened in Collingwood in the late decades of the 19th century. Its businesses added new work to old. To its port, a dry dock was added in 1883, ensuring that Collingwood could add to shipping and boat building the work of repairing large ships. The municipality assisted in this change with a grant of $25,000, and a few years later a similar grant. A decade later, new work was again added to old when the first steel plated hull was constructed in the shipyards, thus spawning the industry that continued for 85 years.

The case of W. Watts and Sons, Boat Builders, is instructive. This enterprise was established in the 1850s by William Watts. He began with a simple wooden boat, the Collingwood skiff, to serve the fishing industry in Georgian Bay. It was enormously successful. Then came the Huron Boat that was large with a square stern, and was easily converted to become a steam launch. Watts added to his roster the boats needed to ship men and material to the Red River rebellion in the early 1860s. The firm kept adding new work to old – scows, barges, row boats, ferries, and tugs. As the fishing industry declined and moved away from Collingwood to other locations in Georgian Bay, Watts added new work to old by remodelling the Collingwood skiff so it could function as a yacht. Early in the 20th century the Watts Company made a significant change: to its prosperous wooden hull business, it added metal hulls and began manufacturing metal lifeboats.

One successful business often engenders another, and Watts’ success helped establish a related sail-making business. Its black-smithing operation grew large enough to be spun off as its own business. Watts’ success led to other boat builders, such as Patrick Doherty and his brother Robert, whose business lasted until the 1920s, and Alfred Morrill, who began by building large barges for timber. One might have thought, after the firm had been in business for more than 50 years, that it was a firmly established enterprise. But no – the company began to falter after the First World War. A book on the company describes some of the management problems encountered from the 1920s on and that surely was a big issue – good management is key to success. But another problem, perhaps related, was that the company no longer added new work to old. It stultified, continued doing the same old work, and by the 1940s the firm was wound up.

Certainly the Depression in the 1930s was as hard on boat-building as it was on other businesses and industries. But when the Second World War came there was no shortage of work – the Collingwood Shipyard was deluged with orders from the Canadian Government for corvettes – but Watts and Sons could not manage to add new work to old. The market for small recreational boats was just about to explode in Ontario, but this old company wasn’t there to satisfy the need for new motor boats and launches. Its designs were used by manufacturers in other parts of the province in the best tradition of someone else stealing a product idea and entering the market – often making hulls of fibreglass, not wood – but these benefits did not accrue to Watts or Collingwood.

Nor did the Collingwood Shipyard, then making large steel transport boats, decide to respond to this opportunity and add these new perspectives to what it was doing. Perhaps the shipyard was too large to think of a market for 20 and 30 foot boats. Perhaps it had no interest in adding new work to what it was doing. In any case, in the latter half of the twentieth century when the market for small pleasure craft was enormous, Collingwood’s fine boat-building tradition had disappeared. One would have expected that the extraordinary skills involved in building small boats would have given Watts a distinct edge in building with new materials like fibre glass, but it was unable to do so. Today all that remains of the Watts firm are a few examples of its boats in the museum near the waterfront, and its shed just north of First Avenue. There may be larger issues at work in the demise of Watts and Sons but it probably stands as a powerful lesson of an economic activity collapsing because it is unable to develop, to add new work to old.

Two significant factors in the success of local economies have already been mentioned – adding new work to old, and import replacement – and the vibrancy those activities cause can then result in inventions. But there is always the possibility that something unforeseen can come along and put an end to economic vibrancy. That is what happened at the end of the 19th century when the stuffing was pulled out of many small town economies by the big industries in Toronto. As described in the first lecture, Toronto’s industries exploded in size during the last few decades of the 19th century. Employees became more specialized in their work so that the products they made were of higher quality and less cost. With the benefits of train transportation, these goods quickly found their way to small communities through Ontario. The smaller local firms, functioning much like artisan or craft-type operations, were very quickly put out of business. The economies of small communities were decimated as the number of enterprises was cut by 70 or 80 per cent, and many towns never really recovered.

Collingwood was fortunate to have its shipbuilding industry, in which the municipality had invested public funds. That meant the economy did not entirely collapse. Of course, there were the existing local services that always provide jobs – cleaners, teachers, nurses and doctors, small restaurants and so forth - but these service jobs only survive and prosper if manufacturing and other industries are there to support them. Service jobs are a bit like everyone taking in everyone else’s laundry: they don’t provide a sustainable economy on their own. Collingwood survived because of shipbuilding. Other small towns weren’t so lucky.

The First World War brought some new work to Collingwood. Women were hired in the shipyard, and at Wm. Kennedy and Sons to make ammunition – one of the first examples of women finding paid work in an industrialized setting in the town. F.W. Byan and Brother, a saw mill on Minnesota Street which made pine flooring, window sash, and doors, added new work to old by making wooden boxes for the local meat packers supplying the war effort with beef and pork bully.

For many industries, the end of the First Great War brought their demise. The Collingwood Meat Company, an exporter of cured bacon, terminated operations after a costly fire in 1916. Telfer Brothers, biscuit maker, closed at the same time, as did Wilson Bros. Limited, which dealt in hardwood flooring, doors and windows. The Imperial Steel and Wire Company, shipping nails across Canada, was rebuilt after a fire in 1919 but could never get the business well established again, and it closed in 1925. What maintained Collingwood was the shipyard and shipping, and other activities such as apple-packing.

It was as though a critical point had been passed –the economy was too thin and uni-dimensional to add new work to old or to replace imports. The diversity wasn’t present to create the imagination and hope necessary to spawn new activities. The onslaught of the big Toronto enterprises had robbed the small communities of their economic vitality. That Watts and Sons survived as long as it did may be more interesting than the fact that like so many other firms it finally sank.

Jane Jacobs outlines the process in a large city of how new work is added to old. Usually, disgruntled employees break away to set up their own companies. They find investors who will loan them money to start a new business and they rent inexpensive space where the enterprise can grow. Often these employees do not have new products as much as different ideas of how the company should be managed, the product designed, or how better service can be provided. In the big city there are many of these kinds of spin-offs.

But this kind of process does not work nearly so well in a small town where the economy is small. Employees and employers are bound by the same small social structures and develop loyalties to each other that make it difficult for an employee to think of leaving to set up something that is a kind of competition. As well, in a small town, there are limited opportunities to secure capital for the new business since the few financiers in town feel an obligation to the existing company and would not be willing to fund a competitor. There are further problems renting inexpensive space since landlords in town probably know and have loyalties to the owners of the existing businesses.

The small town economy does not have the flexibility of the big city. It is much more fragile, and when diversity is removed, as it was at century’s turn, it is an impossible situation. In the small town, it is difficult to add new work at the best of times. If new work is to be added to old, it must be done within the bosom of any existing business. This is not always easy, but, as will be discussed later, it is not impossible.

This was the strained circumstance Collingwood found itself in at the end of the 1920s. It probably explains the decision of Town Council to invest in the new grain terminal. The existing terminal was almost 60 years old, and had been the largest elevator on the Great Lakes. Obviously in an attempt to strengthen one of the few viable industries, town council decided to support a large modern elevator. An agreement was entered into with a private company, Collingwood Terminal Limited. The company agreed to invest $100,000, and the town provided $800,000 as a loan. This was an enormous sum for the Town, whose debt at that time was in the order of $400,000. The agreement was signed and within a few months of construction beginning, the stock market and the economy collapsed. The elevator was completed in 1930 just in time to feel the full brunt of the Depression. Jane Jacobs notes that public bodies are often lured into investing in failing industries in the hope of saving them. It is not a winning strategy.

Nearly all industries were idle in the 1930s. There were few orders for new ships. Even shipping activity plummeted. By December 1936, only $22,000 had been paid toward the capital of the large loan for the new elevator. Given the decline in everything else the agricultural sector which simply continued on, seemed to be doing well. The commencement of the Second World War brought orders for corvettes to the shipyards. Probably through the influence of former mayor of Collingwood and current local member of Parliament, Julian Ferguson, Clyde Aircraft Manufacturing came to town and moved into the factory that Imperial Wire and Steel had left vacant. Clyde made parts for the Mosquito bomber, which was constructed of plywood, and shipped them to Camp Borden. .

The end of the Second World War opened new opportunities. The activities of Clyde Aircraft came to an end, but the provincial government worked out an agreement with the British Board of Trade to support a new enterprise, Globe Plywood Limited, that manufactured and exported do-it-yourself plywood furniture which could be assembled by the purchaser. Globe simply replaced Clyde in the same space. After the termination of the English contracts, the company expanded its production, improved its designs, was renamed Kaufman Furniture, and began exporting throughout Canada and the United States. In the late 1940s it employed almost 200 people. Quinlan Manufacturing (later Quinlan-Crawford) moved to town and made hassocks, and Peerless Textiles, with 100 employees, began manufacturing jeans and overalls. Georgian China, involved in decorating chinaware, quickly followed, courtesy of Jack Brown, a local entrepreneur.

Jozo Weider arrived in Collingwood in the 1940s and took the first steps to organize skiing into a commercial operation although it was two more decades before it took off. The Osler Bluff Ski Club, first in the area, was established in 1949. Weider brought something else to Collingwood - his interest in pottery, which led almost by chance to the creation of Blue Mountain Pottery, a good example of innovation and import replacement. Weider was re-creating products others had made, but with his own distinctive stylistic stamp, Blue Mountain pottery became a valuable export product for Collingwood, although the company had wild swings in its economic fortunes.

Shipping had picked up during the Second World War and 8 million bushels of grain were handled in 1945. But when the St. Lawrence Seaway opened in 1963, shipping again declined, and within 15 years the grain elevator sat unused as a storage facility – its main business became milling grain. Collingwood’s economy was very fragile, with factories as likely to leave as they were to arrive. In the 1950s the Martin-Baker Aircraft Company landed in town with the promise of making jet-fighter ejection seats. The company’s publicity claimed the seat was “used in 27 nations” but the firm did not do well. Some claim the company didn’t even make one ejection seat before it faded into the night.

Fortunately, two initiatives were taken in the 1960s to strengthen the town’s economy.

First, with the endorsement of Mayor Gordon Braniff and the town council, local community leaders established an industrial commission in 1964 to help attract new industries. The impetus came from Ed Smart, who had recently sold his apple, canning and florist business. (That he moved into a position of being a business advocate for the town is an interesting example of an individual adding new work to old.) Smart pulled together several other leaders, including Stan Wallace from the shipyard, furniture merchant Clare Trott, local bank manager George Hacking, and councillor George Zubek to create a business strategy and an industrial commission. The commission secured funds to purchase almost 100 acres at the east end of town, south of Hume Street, with the prospect of selling the land to the industries it was able to attract.

Second, members of the Commission were able to convince Ottawa officials to provide subsidies to any company that relocated in Collingwood. The program was known as the Federal Area Development Program, and it consisted of income tax exemptions and grants in designated “slow growth areas.” Collingwood was so designated. This program proved the key to attracting companies which otherwise had no reason to locate here rather than somewhere else in Southern Ontario. Goodyear Tire and Rubber located here in 1967 followed by Harding Carpets (it settled on the west side of town), then Barton Distillery (after several sales it became known as Canadian Mist) and TRW Electronic Components. The next year saw Libbey-Owens-Ford Glass (now Pilkington), Goodall Rubber, and National Starch. One existing company, Daal Specialties, decided to move from rented quarters into its own new premises. These companies added 500-600 new employees, and produced goods that were exported and not consumed locally. It was an astonishing turn-around for the town, and shows how effective harnessing local talent in the public interest can be. While the demise of the shipyards in 1986 was a great worry, the existence of these other industries meant it was not fatal. Then, just a few weeks later in what some have seen as something of a consolation prize for the shipyard’s failure, Magna International established a wheel plant here.

Welcome as these new companies were, they were not examples of import replacement or of new work from old. They were transplants from the big cities. They took advantage of government subsidies to land where the subsidies permitted and where their corporate leaders decided. In some cases advantages may be apparent – high quality water for Canadian Mist alcohol, for instance, but usually this is not a significant reason for location. For instance, both Nacan and Canadian Mist imported corn from the mid-Western United States, and did not use Ontario suppliers until the late 1970s. One fear is that they might move on as subsidies change the trend which has seen so many industries leave Canada for Mexico. That has, fortunately, not happened with frequency for Collingwood. Further given that these are not locally generated activities, but created through outside decisions, these large enterprises have proven difficult to integrate into other economic activity in town.

Nevertheless, these companies created a real boost to Collinwood’s economy starting in the late 1960s. They provided the impetus for new housing construction at the south end of town, and a revitalized retail area on Hurontario Street.

Contemporaneous with the new industry was the rise of the ski industry. The initiatives, begun in the 1940s, began to expand exponentially as Torontonians enjoyed prosperity that meant more leisure time and the opportunity to head north on winter weekends. Blue Mountain skiing was joined by Georgian Peaks, and new clubs appeared such as Craigleith, Alpine and Devil’s Glen. The railway had declined precipitously, but few seemed to complain about the drive. Active ski slopes meant an increase in over-night accommodation and ski chalet construction, in the age-old process of adding new work to old.

The success of the skiing industry led to the idea that the future lies in year-round recreation activity. Attention was directed to boating and the creation of small craft berths beginning in the 1980s. It was combined along the waterfront with new seasonal accommodation in places like Cranberry Village. More recently, new international investors like Intrawest have entered the scene to take advantage of real estate development opportunities. Many people decided to move to Collingwood after first introduced to the area’s charms because of skiing.

The town did not abandoned the idea of investing in its economic future. In the early 1990’s when Canadian National indicated its intention to close the railway connection between Collingwood and Barrie that had provided the original rational for the town, the councils for both Barrie and Collingwood decided to buy the line, each one responsible for its own costs on either side of the aptly named hamlet of Utopia. Collingwood’s share of the investment was about $500,000, which town council agreed to make. The line has since been leased to a short-haul operator, and serves three large factories – Pilkington Glass, Nacan, and the Canada Mist distillery. I understand that within two years Collingwood will have recovered in rent its full investment cost, and the line will then become a profit-making asset as it continues to serve local industries. As well, if passenger rail ever again receives the national subsidies it deserves, the line can be put back into use to serve the skiers making trips to and from Toronto.

The town has made one further recent investment. When it build the new water filtration and pumping system five years ago, it also agreed to supply Alliston to the south, with water, particularly for the Honda factory there. The rail corridor proved to be a good place to locate the pipe for about two thirds of the distance. Once this investment is paid off from the revenues received from Alliston, this too will be a profit centre for the town.

Today one might say that Collingwood’s economic health is sound and well rounded. I suspect people feel as optimistic today about Collingwood’s future as they did in the 1890s.

Before talking about the future, I would like to offer a brief summary. Collingwood’s economic health has depended on entrepreneurs who prospered by adding new work to old and by importing replacements. In the 1960s it was also fortunate to find subsidies that made it profitable attractive to large industries from the big city to locate here. But in the 20th century Collingwood has not been large enough to have a diverse economy that can easily develop and transform itself by adding new work to old or replace imports. It often feels it is at the mercy of large players, and indeed that is the case. The great fear is being left behind and the temptation is always there to take the deal being offered by a big player or watch the town’s future decline. This is the tension in any community – large or small - , and, to refer to an earlier example, is the mind-set that led Newfoundland into its ludicrous experiment with cucumbers.

The threats to Collingwood’s economic health are two-fold. First, that the transplants, the large industries which add so much value to the local economy, will over time disappear as factories age and as products lose their markets. Since these factories are not mandated by corporate headquarters to add new work to old, this is not an unreasonable fear. Some have already left, whether because of failing corporate fortunes, or technological obsolescence, or of plant relocation to seek the newer and better subsidy.

Second, one fears the skiing boom can’t last, and that the new work being added – real estate development and a concentration on year-round recreation – may not flower as one would hope. One suspects this fear is not nearly as likely to be realized as the disappearance of the transplants, but nevertheless it is important to be aware of its possibility.

Set against these fears is a new resource available to Collingwood, its many new residents.

The town has attracted many individuals in the last two decades who have adequate funds to support their retirement, and many skills in business, management and culture. This wealth of new talent and money is not something Collingwood has seen before. What can this group of people do for the town’s economy? Unless strong steps are taken, these individuals will not have an invigorating effect on the local economy but will drift along the investment paths so well established during the last century, where the reward goes to those putting money into large international investment pools – although the last few years have been less than encouraging. The challenge is to find way for this group of intelligent, experienced and financially secure individuals to help strengthen the key economic levers of any community – adding new work to old, and replacing imports.

Here is what Jane Jacobs says about the kinds of investments needed to successfully add new work to old:

. . . for a city to develop new work at a high rate means that its enterprises must have access to much inefficiently dispensed capital: many, many small loans and investments, a high proportion of them out of the routine; still others, relatively large loans for swift expansion of goods or services that seem to be working out experimentally but which must go into larger-scale production to become practicable—although it is not a certainty they will be. And both kinds of investment must be available from a variety of sources because preconceptions infuse the business of investing and lending money as surely as they do other endeavours. Not everyone sees the same investment opportunities in the same ways. Not everyone glimpses an opportunity. (p.100)

In the 1880s or the 1950s, when people worried about their investments, they usually got together with friends and decided what kind of an investment they would choose to make. Maybe they would put some money into a company that one of their son’s was starting, or into constructing a small apartment building that would pay a return to support them during old age. People wondering about their retirement years in the 1880s or 1950s invested in local initiatives and enterprises they could watch over and encourage so that they would have a secure future. With the establishment of Registered Retirement Savings Plans in the 1960s that kind of an approach changed. People found more security putting their money in the hands of a large financial company that would provide a fixed return while they took advantage of certain tax deductions. As time went on these pools of retirement capital controlled by large financial companies have grown. Most of us now have our investments with banks and other financial institutions that control tens of billions of dollars. Needless to say these large financial companies do not invest in small enterprises which are trying to add new work to old or replace imports in places like Collingwood.. Instead, they invest in operations like Shoppers Drug Mart or Magna International and other very large companies. For many, this has produced great wealth, but it has also taken away the financial support necessary for small enterprises to become larger enterprises, and for smaller communities to have their own kind of economy.

The starting point is a diversity of investment sources controlled by different people who have different priorities and see things in different ways. Jacobs does not see the initiative resting with governments, nor does she think governments are often the proper bodies to make private investment decisions. Those decisions can often be fractious – just as Simcoe County Council’s decision to invest in the railway which came to the Hens and Chickens Harbour in 1855 was divisive enough to lead five townships to seek a safe haven in Grey County. And those decisions can often be wrong-headed - such as the decision of the Town of Collingwood to sink $800,000 into a new grain elevator in 1929. As noted, governments often decide to invest in an industry that is failing rather than in an industry that will grow. Governments are wiser to keep their interest to large public issues of infrastructure and broad policy that will enable private decision-making.

What is needed is some arrangement that encourages investment in local enterprises. That is what could lead to new work being added to old and to import replacement, the two activities that create the most solid of local economies. I suspect that there is a great deal of energy and imagination among the people of Collingwood that could find ways of encouraging such investments and devising appropriate vehicles for it. Let me sketch a scenario.

Imagine a small committee with a mandate to put together industrial opportunities with willing investors and investment consortia. It would meet with those who manage existing enterprises and ask a few questions: are there initiatives you wish to take which require new investments? Are their products your enterprise uses which could be manufactured locally? How can your company add new work to old?

It’s unclear what answers one would get to these questions. Some managers must be trained to think about such issues – they are so drowned by the day-to-day that they can’t think of the new and different. Some managers aren’t allowed to contemplate such questions, which are the turf of head office located somewhere else. Much work will be needed to create the room to allow innovative thinking. Others will have fascinating ideas that after some massaging will result in a viable investment opportunity and a stronger local economy. I suspect the new initiatives will be a real surprise to everyone, but that is the nature of innovation. The opportunities for developing new enterprises to serve the ski industry are significant, and then again, the same might be said for serving the new hospitality industry with new furniture, fittings, and so forth.

There is no question but that the entrepreneurial skills, the business and investment knowledge, the pools of capital, are all available in Collingwood. At a time when there is optimism in the town’s future, it seems reasonable to devise the mechanisms to ensure all are harnessed, and that they become the force that strengthens Collingwood’s economy. It’s a challenge that must be picked up – just as Ed Smart devised a successful strategy in the early 1960s.