Trevor Dailey's Weblog

Making London a Little Bit Sweeter

Province Helps Natra Open Factory and Create Jobs

February 3, 2014 1:00 p.m.

Ministry of Economic Development, Trade and Employment

Ontario is helping Natra set up a chocolate manufacturing facility in London that will create 56 new jobs in the community.

Support from the Southwestern Ontario Development Fund will help Natra expand to Ontario to meet growing demand from the North American market. Currently, the company makes chocolate bars, spreads and other specialty products at factories in Spain, France and Belgium. The new London facility will be part of Natra's consumer goods division.

Modelled on the proven Eastern Ontario Development Fund, the Southwestern Ontario Development Fund is helping to create jobs and diversify the economy by encouraging regional businesses to pursue innovation and new markets. Together these two funds have created and retained more than 24,000 jobs and strengthened local economies.

Creating local jobs and growing the economy is part of the government's economic plan to invest in people, build modern infrastructure and support a dynamic and innovative business climate.

Quick Facts

Ontario is providing a loan of $2,851,000 towards this project. Natra is a publicly traded multinational company based in Spain and one of the leading companies in Europe specializing in chocolate products and cocoa derivatives.

We can stop here. This large and very successful company, Natra, whose products are growing in consumer demand, and is a publicly traded company, is not willing to raise $2,851,000 of its own money to build another factory. The Ontario government is spending $50,910 of taxpayer money to so-called create just one of these 56 new jobs. Would you spend that amount to give one person a job? I certainly would not.

The Ontario government, billions of dollars in debt because of its reckless spending, continues to shovel money from hard working taxpayers of this province to companies that have no good reason why they will not raise capital themselves, except that the government of Ontario is handing out free bags of taxpayers' money. This is not what tax money should be used for.

Ontario Ministry Of Finance 2012 - 2013

Total Revenue: $113.369 billion

Total Expense: $122.589 billion

Deficit: $9.220 billion

Why are other business, some that are Natra's competitors, having to pay corporate taxes that are going to subsidize Natra? Why are people in the province of Ontario, most whom don't even live and work in London, having their tax money spent to subsidize Natra? Fortunately, some companies still raise their own capital, and do not go to government for taxpayer money handouts that the government uses to buy votes,  and to meddle in the market place. Natra gives me the impression that it is saying to the people of London that it will build a new factory and create needed jobs, but only if Natra gets paid first. You don't pay someone to give you a job.

The average yearly unemployment rate as a percentage (.4 and below rounded down, .5 and above rounded up) for London, Ontario, Canada from 1997 to 2013, the only years complete data is available, is 8%. There is no correlation between government spending tax money on "job creation" and the unemployment rate. Unfortunately, this grease the palm attitude of business and government seems to me to be growing in Ontario.

Since October 2012, the government has committed $36 million through Southwestern Ontario Development Funding, leveraging a total investment of $340 million. These investments have helped to create over 1,800 new jobs and retained more than 7,200 existing jobs in the region.

Taxpayers paid 10% of the $340 million total.

Taxpayers paid $4000 for each one of the 9000 jobs.

Taxpayers paid $20,000 for each new job.

Taxpayers paid $5000 for each job that already existed.

Ontario lost 39,000 jobs in December, 2013.

If government could create jobs by giving away our tax money, we would have zero unemployment. We don't. Government can only directly hire a person to "create" a job. 

Companies create employment via good business models, innovation, free markets, private investment, and the government staying out of the way. I think it is time all companies like Natra and government understood this, and tax money handouts to companies by government to "create jobs" was ended.

The giant food producer, Dr. Oetker, has finally completed a $113 million frozen pizza factory in London, Ontario after years of construction in a taxpayer funded deal lauded by London City Mayor Joe Fontana. This factory cost Ontario taxpayers $19 million, and could employ 125 people. The Ontario government spent $100 million of taxpayer's money to upgrade the road system near the factory as part of the deal with Dr. Oetker.

Taxpayers paid 16% of the $113 million total cost.

Taxpayers paid 100% of the $100 million total cost.

Taxpayers paid $1,704,000 for each of the 125 new jobs.

McGuinty Government Invests In New Manufacturing Plant That Will Create Jobs In Belleville

March 6, 2008

Kellogg is opening its first new North American manufacturing plant in more than 20 years with the help of the Ontario government.

Ontario will invest $9.7 million to support Kellogg's new $97-million plant which will produce Mini-Wheats cereal. Kellogg will hire about 100 new employees for the plant....

With 2007 sales of nearly $12 billion, Kellogg is the world's leading cereal producer and a leading producer of convenience foods. Kellogg products are manufactured in 18 countries and sold in more than 180 countries around the world.

"Kellogg's investment is a vote of confidence in the strength of Ontario's manufacturing sector. Companies like Kellogg prove that Ontario is the place to be when you want the best-educated, most innovative and highly skilled workers."

Dalton McGuinty Premier of Ontario

Approximately 500 jobs will be lost by the end of 2014 after the Kellogg Cereal plant in London closes.

© Trevor Dailey

Source for unemployment rate data: Unemployment Rates for the EI Economic Regions (1996 to 2014)