A HIGH PERFORMANCE ECONOMY

The Burlington Story

This website provides the detailed information you require to make an investment decision in Burlington.

Every community promoting itself puts forward quality of life as a major advantage, but it is quality of place that differentiates communities for decision-makers. But for the citizens who live in the community, Burlington is a truly special place.

The city's downtown is located on one of the world's Great Lakes (Lake Ontario); and for uptown Burlington is  designated by UNESCO as a world Biosphere Reserve (the Niagara Escarpment).  Within, is a "smart" city comprised of well-planned neighbourhoods, modern-day industrial parks, infrastructure, land and buildings required for sustained growth. As well, the reach of our labour market far exceeds the boundaries of the city.

From an economic development perspective, Burlington plays an integral role in shaping Canada's High Performance Economy. The city has a robust economy with strong potential for future growth - it is located at the hub of the Golden Horseshoe, an international economic powerhouse, and is largely driven by both the automotive and financial sectors.

Within this regional economy, Burlington has a number of key differentiating features that define it as a High Performance Economy, including:

I. Diversity - A local economy that is resilient and employs an extensive variety of talent.

II. High Five Companies - Burlington's economy strengthens as companies move up the value chain in the following High Five areas:

• Export
• Training
• Research & Development
• Community support
• Value-added

Back to top

I. Diversity

Burlington's economic strength is the diversity of its economic base, mainly achieved because of its geography, proximity to large industries in southern Ontario (Canada's largest consumer market), its relationship to the GTA market, and its transportation infrastructure. Burlington has established companies and emerging companies in a wide variety of sectors. These companies have strong linkages to local suppliers of products and services, as well as local post secondary college and university resources.

Burlington's development pattern over the last three decades has also been a major factor contributing to the city's economic diversity. Much of Burlington's ICI building stock has been built on speculation in the form of industrial and office multiples. A wide range and size of business tenants have been successfully accommodated. These smaller multi-purpose units have also proven to be a hotbed for new companies and innovation, providing affordable and attractive space for new companies. Within the larger GTA west market, Burlington provides a unique product for small growth companies.

Burlington has a strong business image and has a proven track record for companies attracting both employees and outside investors. Companies launching I.P.Os have been able to raise the capital they need to grow. These homegrown companies have prospered and expanded within Burlington. More recently, investors from both the GTA and United States are finding the city to be business friendly and most importantly, a competitive location. This blend of homegrown companies and new external investment has resulted in unprecedented growth for Burlington in a wide variety of sectors.

Chart 1 - Diversity of Sectors in Burlington

Chart 1 illustrates the sectoral diversity of the companies that BEDC has interviewed over the past three years. These companies reflect the diversity in the city's economic base. BEDC helps build local business networks and part of Burlington's business culture is to link companies not only within their sectors but also with other community businesses.

The key sectors of Burlington's economy reflect the diversity in the city's economic base:

• Finance
• Headquarters Operations
• Advanced Electronics
• Biotech
• Information Technology & Communications
• Food Processing & Packaging
• Automation, Robotics & Engineering Design
• Advanced Manufacturing Companies
• Logistics
  Back to top

Finance
This sector includes offices for firms involved with equities, mutual fund management, insurance, capital lease financing, and back office operations for many types of financial institutions in both Canada and the United States.

Burlington is a preferred suburban location for financial sectors companies. Key assets include; high-speed communications, commuter rail services directly to Toronto's financial centre, highways, three international airports, and attractive executive housing. Burlington firms have been able to readily attract the talent required for this sector. In addition to financial sector head office operations, Burlington is also proving to be a competitive location for back office operations relating to finance, data processing and call centres. Employment in this sector exceeds 4000 people.

With the announcement of the prestigious McMaster University's DeGroote School of Business, expansion into downtown Burlington, it is expected that the financial sector will see considerable growth over the next decade.

Back to top

Headquarters Operations
The Greater Toronto Area is the prime location for head office operations in Canada. Burlington's has over 3 million square feet of office space, and there are industrial multiples with so-called "flex" space that is suitable and cost-effective for head office operations. The Burlington HQ offices are the administrative offices for multi-location companies including company decision-makers, managers, human resources, finance/accounting, and marketing and public relations. According to Hoovers (D&B Company) data, there are 270 companies headquartered in Burlington.

HQ employees are top wage earners and require a high quality of life community for executives. The availability of a variety of attractive office suites appeal to this sector. This sector also requires good communications and airport linkages.

Back to top

Advanced Electronics
These companies are at the leading edge of video, audio and data communications. These industries have very high levels of research and development, and represent some of Burlington's fastest growing companies. Approximately 1600 people are employed in these businesses, and they are growing in the range of 10 to 20% annually.

Consumer demand for electronics, high definition TVs, high definition broadcasting equipment, blue tooth technology communication devices, automotive electronics, defense industry surveillance, extended warranty programs for electronic equipment are all the drivers for this fast-growing industry in Burlington. These companies are employing highly skilled college and university graduates for technology applications, engineering and business management positions. 

Back to top

Biotech
Biotech is the combination of biology with science. It applies the knowledge of molecular, cellular and genetic processes to develop products and services. Increasingly, biotech is linked to pharmaceutical companies and their research investments, research hospitals, environmental work, and more recently, information technology.

This sector has been experiencing strong growth in Burlington primarily due to the presence of both a major pharmaceutical company and McMaster University's research and teaching hospital.  In order to reach full potential for commercialization, it is now more aggressively looking to generate additional economic growth based on increased research and development. Further commercialization of research activities at both the hospital and the University will lead to increased Biotech growth in Burlington. The development of an Innovation Park and its incubator adjacent Burlington will also lead to new company growth over the next decade.

Burlington is also home to the Canada Centre for Inland Water (CCIW), a renowned centre of excellence for fresh water research. Technology based companies such as Zenon have emerged as global leaders because of the presence of this facility.

Our expectation is for further growth in this sector related to therapeutics, medical devices and clinical trials. These companies require investment capital and pay elevated salary remuneration commensurate to a highly educated workforce.

Back to top

Information Technology & Communications
The head office of Cogeco is located in the city. These types of companies are major employers, as well providers of infrastructure required for future growth. In addition, Bell Canada provides additional broad bandwidth services.

Burlington has a number of software companies employing over 2000 people. Some of these are among Burlington's fastest growing companies providing products, training and services on a global basis. These companies generally have direct linkages to the nearby university as well as Mohawk and Sheridan Colleges. Two types of firms that are market leaders dominate this software cluster: capital asset management software management for production systems and equipment; and system integrations software that bridges various types of applications.

Back to top

Food Processing & Packaging
Burlington has a thriving food processing and packaging sector. Many companies are located here for historic reasons, but have re-invented themselves into competitive facilities with new capital investments in equipment and buildings. Over 2000 people are employed in this sector.

A number of cardboard packaging plants are located in Burlington along with steel related containers. More recently, plastics packaging and container companies have located in Burlington because of access to the USA. These plants are very capital intensive and tend to hire a wide variety of skilled and semi-skilled labour.

Back to top

Automation, Robotics & Engineering Design
These companies have located in Burlington because it is the ideal location to support the heavy industrial producers of southern Ontario. They do however generally tend to serve national or bi-national markets. It is also important to note that some of these companies have product niches that are global. These companies generally employ engineers or technology graduates. McMaster University and Mohawk College along with their research institutes link directly to these companies. Growth has been getting stronger with these as larger manufacturers use their products and services to increase productivity or introduce new processes.

Back to top

Advanced Manufacturing Companies
This is a broad category of Burlington companies that are caught in a cost squeeze to maintain their competitive position and as a result, they have successfully turned to lean manufacturing and automation to increase their competitive position. This includes automotive parts manufacturers, aircraft parts manufacturing and metal fabrication. Working with associations, university research facilities and community colleges these companies have established strong competitive positions based on higher value-added processes. Many of these companies located here originally because of the presence of the Automotive OEMs and the Steel industry, but most have now developed global product mandates in order to strengthen company growth.

Recent announcements for significant OEM investments in southern Ontario will have a ripple effect and result in new growth and capital investment for these Burlington companies.

The companies employ a large numbers of skilled and semi-skilled workers, and generally pay union level wages to retain their employees on a long-term basis.

The companies are the industrial backbone of Burlington and employ close to 3000 people.

Back to top

Logistics
Burlington has all the key ingredients for logistics companies; proximity to the GTA market, quick access to New York and Michigan, port facilities, and rail services. There has always been a strong presence of warehouse and shipping facilities in Burlington, but with the recent location of UPS Canadian Logistics state-of-the-art facility to Burlington there will be more supply chain management, inventory control and trucking firms wanting to locate here.

Back to top

II. High Five Companies

Through our corporate calling program, BEDC staff collect and analyze valuable company data. Our objective is to develop a detailed database of key companies based on interviews with the CEO or Canadian General Manger level, and to regularly update information.

To the end of 2009, BEDC's database includes approximately 350 company interviews. While this number of interviews is not statistically significant for projections of the entire company base for Burlington, it does provide valuable economic development information on key companies and sectors. Although not all questions asked of the company representatives are always answered, the results in the interview process generally reflect a minimum of approximately 100 responses.

Export

The geographic location of Burlington is within close proximity to USA border, connecting to both the major cities of Detroit and Buffalo, making Burlington as prime location for companies importing or exporting to the USA. Many companies export the majority of their products or services to the USA and exports are important because they create wealth for a city, a Province and a Country.

In BEDC staff interviews, the rising value of the Canadian dollar is an obvious concern, however it is not viewed as a threat to the business plans of Burlington companies.  In order to maintain their competitive position, some Burlington companies are increasing their external component assembly while others are merely developing "lean manufacturing" as a company way-of-life in order to maintain their position in an increasingly competitive environment.

Burlington's advanced electronic and software companies are increasingly part of the global economy, with their exports going beyond the USA into European and Pacific Rim markets.  The recent location of one of UPS's five global distribution centres in Burlington reflects the city's global presence and connectivity to the world.

Several "home-grown" companies in Burlington have reached a significant sales level and ultimately become the target for acquisition by larger more global companies. Our experience suggests that this, in turn, results in increased export activity by the Burlington facility.

• 28% of companies are servicing only the Canadian market - these are largely USA companies located here to service the Canadian market, or are financial service companies restricted by legislation to this jurisdiction
• Only 3% of companies see the local market as their primary market, and 22% view the regional market as their primary target
• 44% of companies view their primary market as international 
• 58% of companies indicate exports are stable or increasing
• 17% of the companies indicate the components they import are increasing
• 64% of companies indicate merger, acquisition and divestiture activity is increasing in their sector

BEDC sees an increasing role for Export Development Canada, Canadian Commercial Corporation and Canadian Manufacturers & Exporters in increasing the exporting capabilities of Burlington companies. Industry Canada also has the potential to assist Burlington companies exporting to new countries to gather local market intelligence.

Back to top

Talent
Burlington has one of the best local employment situations within the GTA. The City has a relatively young population and growth projections indicate an ongoing supply of potential workers in the important 25 to 44 age range. Education attainment for Burlington residents is relatively high. In addition to the resident populations companies are finding employees in a number of locations unique to Burlington:

Burlington has a large out-commuter population.  BEDC is working with local companies through jobsBurlington to intercept the commuter population attracting them to fill positions with local residents. The commuters represent a strong potential for Burlington companies. Approximately 85% of Burlington's GO Transit riders are aged 25-54, 61% are managers, owners, professionals or executives and 71% have post secondary education.

In 2006 approximately 38,000 people commuted to Burlington, with a large majority of these in-commuters living in Hamilton. 

A majority of the blue-collar and the call centre jobs in Burlington are typically filled by residents from municipalities to the west of Burlington. Unemployment rates are generally higher and accommodation costs are much lower. College and university students are an important source of employment for some call centre operations.

Existing area residents looking to upgrade their skills and recent immigrants looking to improve their qualifications, work closely with the Bay Area Learning Centre and private sector partners.

Mohawk College, Sheridan College, and McMaster University have partnerships for skills upgrading and specialized training programs.

One of the key ingredients for success for any company is the quality of talent they are able to attract and retain in a particular location and the talent being continuously improved.

• 10% of companies have union representation
• 47% of companies see employment needs increasing their Burlington facility
• 64% of companies find the availability of workforce to be high
• 73% see recruitment problems related to industry wide challenges as opposed to community
• 79% of companies find the quality of workforce to be good or excellent
• 89% find the stability of the workforce to be very high
• 43% are increasing their training budgets.

Back to top

Research and Development

Innovation is a key driver for many Burlington companies. Many companies have direct linkages to McMaster University, Mohawk College, Sheridan College or the Canada Centre for Inland Waters located in Burlington - a global centre of excellence in fresh water research. Many companies in Burlington with a competitive edge have been able to undertake research and development.

Many companies have been reluctant to share information on their research and development activities. This is their competitive edge and therefore, our response rate for the following information is based on a smaller scale of only 140 companies:

• Investment in R&D as a percentage of sales is high, with almost 33% of companies interviewed spending greater than 6% on research & development monies
• 22% of those companies invest between 20-50% of their R&D funding on new product development, and 9% investing greater than 75% of R&D spend purely on new products
• 6% invest a large percentage on product improvement

A local example of an advanced electronics company who is growing through applied research and development is Evertz Microsystems. Evertz designs, manufactures and markets video and audio infrastructure equipment for the production, postproduction, broadcast and internet protocol television industry.

Back to top

Value-Added

Below are listed a number of variables that have been directly measured and which indicate strong company performance, demonstrated value-added impact to the community

• 89% find productivity of their employees to excellent or high
• 78% of companies have primary products/ services that are growing or emerging in their life cycle
• 89% of companies have introduced new products within the last five years 
• 85% of companies plan to introduce new products within the next two years
• 60% of companies have new emerging technology 
• 83% of companies indicate their total company sales are increasing 
• 63% of companies indicate the market share of their key product is increasing 
• 57% of companies indicate they plan to expand in the next three years
• 64% of companies view production in their sector to be balanced while 26% see it as under-capacity
• 86% of companies indicate the condition of their building is in good or excellent shape, and 64% have room for expansion.

One of Burlington's growth sectors - advanced manufacturing and engineering design is poised to grow as Canadian manufacturers increase their value-added.