The Cooperative Ocean Information Network Pacific [COIN Pacific], OCEAN Industries British Columbia [OIBC] and the Ocean Renewable Energy Group [OREG] have collaborated in the development of this letter to ensure that you receive a clear, concise and focused communication on the fundamental elements to grow the $11.5 billion dollar GDP contribution to British Columbia’s economy from the Ocean and Marinespace economic account and Pacific Ocean and Coastal Maritime Economy.
British Columbia Ocean and Marinespace
Securing British Columbia CANADA’s Pacific Ocean and Coastal Maritime Economy
February 18th, 2010
Ms Janis Larson & Ms Sylvia Selig
Co Chairs
C/O Ms Kristin Lunn RPBIO
A|Manager Oceans Resources
Oceans and Marine Fisheries Branch
Ministry of Environment
PROVINCE OF BRITISH COLUMBIA
PO BOX 9309 STN PROV GOVT.
Victoria British Columbia
CANADA V8W9N1
Subject: The British Columbia Ocean and Coastal Plan 2010
Dear Ms Larson and Ms Selig,
Co Chairs, Ocean and Coastal Economy Working Committee
Province of British Columbia Ocean and Coastal Plan
We are pleased to make the following submission to you for consideration in your development of the British Columbia Ocean and Coastal Plan. We appreciated the opportunity to participate in the discussion held January 22nd, 2010.
Background
The Cooperative Ocean Information Network Pacific [COIN Pacific], OCEAN Industries British Columbia [OIBC] and the Ocean Renewable Energy Group [OREG] have collaborated in the development of this letter to ensure that you receive a clear, concise and focused communication on the fundamental elements to grow the $11.5 billion dollar GDP contribution to British Columbia’s economy from the Ocean and Marinespace economic account and Pacific Ocean and Coastal Maritime Economy.
The Canada BC Ocean Coordinating Committee work led to the Camosun Ocean Initiative which canvassed public and private sector interests across a broad range of sectors within the Ocean and Marinespace economy and was released in a report entitled “Securing British Columbia’s Marine Economy” in 2009. Many of the recommendations from this work are sound, however, neither the private sector or the public sector have had the focus to implement the required recommendations.
Overview of British Columbia and Government Issues Paul Darby, Deputy Chief Economist at the Conference Board of Canada reported in November 2009, that British Columbia that British Columbia ranks poorly among the other Provinces and Territories in Canada. The factors highlighted in the Conference Board report apply to the state of British Columbia’s ocean and coastal economy as well as other sectors.
Highlights of the Conference Board report include:
“Per Capita Growth
Ranked One “D” and one “C”: B.C. and ranks 7th among its comparator regions on GDP per capita and 6th on GDP growth;
Benchmarked 6 indicators in total: 3 that measure labour productivity levels and 3 that measure growth;
Innovation indicators: business expenditures on Research & Development and government expenditures on Research & Development as a share of GDP;
B.C. scores a “D” grade on both indicators;
Indicators: Machinery & Equipment investment and Information Communications & Technology investment as a share of GDP;
B.C. scores a “D” grade on Machinery & Equipment investment and a “C” on Information Communications & Technology investment;
Education and Skills Indicators: university completion, science, engineers and math professionals in workforce, apprenticeship completion, and student skills;
Labour Market Indicators: unemployment rate, employment growth, labour force participation rate, net migration.”
More details are provided in Attachment “A”.
The Ocean and Marinespace Economy
Overlay the “BC Global Strategic Advantages”, with “Labour & Education”, and the “Investment & Entrepreneurship” and you create the “Circles of Prosperity” loop. When you overlap these three circles, the area that intersects all three is the area that Government needs to address across all of its primary and extended operations through third party organizations like Universities, Crown Corporations and Fee For Service Contracts. The circle of prosperity is an idea that demonstrates how these factors overlap to drive or drown economic progress. For the purposes of the format provided to the focus group participants, we describe how these three factors apply to the subject categories provided by the committee as follows:
A. People - skills/training opportunities
Labour and Workforces have diminished significantly in the past couple of years. This coincides with an accelerated move towards retirement of the largest demographic group in Canada and British Columbia. In short, the current economic condition wiped out any certified or skilled capacity existing in the resident labour and workforce with respect to providing human resources to this economic account. Additionally, the skills development and training institutions do not provide skill sets that are required by the employers.
B. Infrastructure (physical, intellectual, entrepreneurial) - incentives; incubation initiatives; marketing
The Investment and Entrepreneurial profile of British Columbia has been eliminated. The majority of prospective investment resides in the small and medium enterprise categories. The majority of Government dollars have been invested in Universities and Colleges with the hope that a connection would be made to driving economic prosperity. The link between this investment and commerce rarely happens if led by academic institutions.
Government investments typically fuel academic goals, not industrial or commercial needs or practicalities. The services provided to small and medium enterprises has no direction or focus from government. Incenting investment in long term solutions, incubators for small and medium enterprises and physical infrastructure all rely on extended Government Financial sustainability, which has proven to be unsustainable.
Co marketing is an area of interest to the private sector, however, there is no public sector conduit to work with in marketing out bound products and services and in-bound investment for this economic account.
C. Research and Innovation- research agenda; technology demonstration
The Research and Innovation agenda for ocean and marinespace economic accounts is either focused on one mega project that consumes the majority of available funds from Government, or is non existent. The BC Innovation Council has served as a default for government and Western Diversification has a policy against investing in this economic account, other than Universities. That capacity has been eliminated.
There are few, if any, technology demonstration sites other than Ocean Networks Canada’s Ocean Observatories. The Ocean Engineering facility that operated at UBC was demolished in 2008. In short, there is no discernable private sector or Government research agenda for the ocean and marinespace economic account in British Columbia or the Pacific Region of Canada.
D. Regulatory Environment – regulatory restrictions; policy gaps – what are they?
There are more than 16 Provincial Government Ministries and Crown Corporations that touch on the ocean and marinespace economy. There is no authoritative collection of policies that might apply to this context. There is no point of contact for discussion or the regulatory environment, restrictions, or policy gaps as there is no inventory.
There is duplication of effort and a financial burden placed on an environmental process that spans five levels of government and runs in series, rather than in parallel. There is no consistency in tenure approvals across Regional Districts and Municipalities and there is mass confusion on the public image side of who is actually responsible for what regulatory envelope.
E. Collaboration Opportunities
The Ocean and Marine sectors that comprise the Ocean and Marinespace economic account are separate and distinct as a result of a lack of attention to a holistic view of this driver of the economy. Complacency in the regulatory function of government has resulted in a lack of attention to how all functions might cooperate. Most people presume that because The Department of Fisheries and Oceans Canada is responsible for Fisheries, that they are accountable for all factions and fragments of the community of interest. Such is not the case.
Accountabilities for Fisheries, Communities on the Coast, Oceans Health and the Ocean and Marinespace Economy are cast vertically through five levels of government, and horizontally through five silos of economic activity, with no one organization claiming common ground and accountability for all.
OCEAN Industries BC took direction from the community and has repositioned itself to serve the private and public sectors as a place for collaboration, but lacks the sustaining financial resources to fulfill this demanding mandate. Organizations like
OCEAN Industries BC, COIN Pacific and the Ocean Renewable Energy Group have partnered to facilitate community interaction and are ready to assist the Government of British Columbia.
Recommendations
The Government must take a leadership role in developing the relationship with the Province and Industry to create a climate in which economic development can flourish. Government implies politicians and Provincial staff. British Columbia means Government, Industries, Academics, Ngo’s, Institutions and Business. Aside from all of the recommendations embodied in the submissions by OCEAN Industries BC and the Ocean Renewable Energy Group and the report entitled “Securing British Columbia’s Maritime Economy” , we would make the following recommendations:
I. Government Needs to invest in a Partnership
There needs to be a 5 year commitment of $600,000 to $800,000 dollars to equip a small secretariat with experts to build the business case for British Columbia’s Maritime Economy. The financial side of this investment follows a commitment by the Government of British Columbia claiming the Maritime Economy as one of its key foundations in the post 2010 era. The private sector will contribute to reach the required funding goals to build momentum and to accelerate what needs to be done to address the short falls and gaps.
The organization would have one year to ramp up, at which point a decision would be made to proceed or wind up. If the decision to proceed is made, then the organization has four years to achieve the list of recommendations, at which point it will wind up or adapt and continue on without sustaining financial support from Government. The lack of secure financial support has long been the barrier to progress on this file as the majority of participants in this economy has been either local government or small business.
II. Small Business needs a place to collaborate
Establishing the proposed organization or secretariat will enable the construction of a project momentum that will allow for a place for small business in this economic account to collaborate on solutions. There are more than 100 non-government organizations that make up the larger community of interests, all of which face the common challenges related to recruitment of citizens to workforce, education, certification, workforce, capacity, investment, expansion, retention, regulation, social license, and export.
Government needs to contribute financially to the establishment of a small scale project office in the form of a Maritime Economic Enterprise Centre in the same location as the proposed Ocean Tech Park, in conjunction with the Vancouver Island Tech Park Administration.
III. British Columbia needs to define its Community and Industrial Benefits Package
All attention is drawn to major project development, when in fact 98% of all business activity is fostered in businesses with less than 50 employees. Government needs to define what investments need to be made in communities, people, education, and small business that will support the long term needs of the Maritime Economy. Clear and concise expectations and metrics for investments in this sector need to be defined at the outset. There can be no more investments made with open ended expectations. Government needs these subjects addressed in each of its functions that deal with the Ocean and Coastal Economy.
IV. Government and British Columbia needs to provide a point of Contact for International Marketing
There are other jurisdictions in Canada and other nations that support this industry. Government needs to take a proactive approach to supporting and leveraging provincial, regional and national resources so as to ensure that BC’s Ocean industries are presented on the same playing field. We are losing business, opportunities and GDP everyday for lack of focus and a contact. Government needs to create a facility that provides assistance to help existing government facilities and programs work for the sector, including regional, provincial and federal resources for inbound and outbound marketing of BC developed products and services for the larger sector. One of the objectives of this contact point is to promote the integration of components designed and constructed in BC.
There needs to be resources allocated to prepare bids and secure financing in order to integrate these systems.
Financial mechanisms need to be pooled around this subject. IRAP, Business Development Bank of Canada, Small Business incentives, and other government agencies need guidance from an outside and independent organization. This coordination also needs to match financial utilities with the opportunities sourced from British Columbia. The major gap here is a total lack of knowledge and awareness of small business offerings and a cultural challenge focused on filling order books, rather than seeking collaborative opportunities. There needs to be a very public collection of examples of success using existing collaborations from the BC marketplace.Government needs to place the Ocean and Marinespace Economic Account, and the Maritime Economy on the priority list for targeted International Marketing.
V. Government, Universities, Institutions and Business need to turn Expectations upside-down or Die
Universities conduct research then turn to the private sector to find applications. This view needs to be turned around so that Universities and Institutions are responsive to contact with commerce and industry, without losing their self identity
and perceived integrity. Government needs to make its investments in commercialization accountable by asking for quarterly reports on uptake from the market. Conversely, small business needs to step away from it’s common practice of operating as if “I don’t need financing, you just need to buy more of what I make, regardless of the fact that there is no market for what I make anymore.” The responsibility for change is shared.
VI. Government needs to work with the “Willing” and the “Market Pull”
In this group of sectors, BC needs to export more or endure the ongoing stagnant situation described by the Conference Board. Government needs to identify who’s buying what and prospect for fulfillment for new products and services. Then prospect for people to fulfill these needs. And finally, encourage, facilitate, enable, be the catalyst, an accelerant, co-opt, incent and pave the way for those that express interest in meeting these demands. This will be fulfilled by the organization established in recommendation I.
VII. Industry and British Columbia will define the Vision for the Ocean and Marinespace Community that drive the Maritime Economy
A vision, that is industry led and accelerated by government interest, will amplify what is already a BC “Strategic Advantage”. This cannot be an area code “250” project only. Only Government can ensure that Metro Victoria and Metro Vancouver are a part of, not apart from what have conventionally been referred to as remote, rural and resource communities on the Coast. A bridge between urban and rural interests needs to coincide with a bridge between north and south communities, local government and First Nations.
Conclusion
We appreciate the opportunity to participate in this process and look forward to the opportunities to fulfill elements of the BC Ocean and Coastal Strategic Plan.
Respectfully Submitted,
Patrick Marshall
OCEAN Industries BC | PER
Chris Campbell
Ocean Renewable Energy Group
David Fissel
ASL Environmental Sciences Inc.
Paul Lacroix
COIN Pacific Executive Director
Andrew Walls
COIN Pacific Director
Attachment A
The Paul Darby, Deputy Chief Economist at the Conference Board of Canada
Per Capita Growth
“One “D” and one “C”: B.C. and ranks 7th among its comparator regions on GDP per capita and 6th on GDP growth;
Benchmarked 6 indicators in total: 3 that measure labour productivity levels and 3 that measure growth;
2 Innovation indicators: business expenditures on Research & Development and government expenditures on Research & Development as a share of GDP;
B.C. scores a “D” grade on both indicators;
Indicators: Machinery & Equipment investment and Information Communications & Technology investment as a share of GDP;
B.C. scores a “D” grade on Machinery & Equipment investment and a “C” on Information Communications & Technology investment;
Two broad categories: Education & Skills and Labour Market;
Education and Skills Indicators: university completion, science, engineers and math professionals in workforce, apprenticeship completion, and student skills;
Labour Market Indicators: unemployment rate, employment growth, labour force
participation rate, net migration;
B.C. ranks 3rd on university completion and student skills;
B.C. scores a “C” grade on the science, math and engineering professionals indicator and a “D” grade on apprenticeship completion;
B.C. scores “B” grades on the unemployment rate and employment growth indicators, a “C” grade on labour force participation;
B.C.’s high net migration primarily due to immigration rather than inter-provincial migration;
Poor Productivity Growth
Over the 1993-2007 time period, B.C. had the lowest level of Total Factor Productivity growth among the Western provinces
The benchmarking analysis demonstrated that B.C. performed poorly on all of the labour productivity indexes
Weak Innovation Record
Business expenditure on R&D (as a share of GDP) is below the Canadian average Government spending on R&D (as a share of GDP) is the lowest among comparator regions.
Under-Investment in Capital
Over the 1993-1007 period growth in B.C.’s capital stock added just 0.7 percentage points to growth in potential output per year
Aging Population
Over the next 20 years, British Columbia faces a dramatic increase in the share of the population aged 65 and older
Keys to generating high and sustainable potential output growth
Improving the business environment
Fostering innovation
Increasing capital intensity
Strengthening human capital
Encourage Research & Development activity
Innovative industries in Canada had higher productivity growth and innovation is associated with increases in worker income and improved industry competitiveness
Paradox in B.C. – despite having a generous tax credit system for R&D, B.C. performed poorly on both government and business R&D spending
Continue policies that help attract venture capital
The ability to attract venture capital is an indicator of a positive business environment and bodes well for future innovation performance B.C. has been a leader in Canada in attracting venture capital
Example – B.C.’s Venture Capital program which has been designed to encourage investment in provincial businesses by proving provincial investors with refundable
Encourage labour force participation by maintaining low effective tax rates for low-income workers;
British Columbia has been a leader in this area by having the lowest effective tax rate on lower incomes in Canada;
e tax credits;
Encourage older British Columbians to remain in the workforce;
B.C. has made significant progress;
Eliminated mandatory retirement;
Revised the Pension Benefits Standards Act to reduce penalty for later retirement;
Developed targeted training assistance programs for older workers
Encourage further immigration;
Provincial Nominee Program which offers accelerated immigration for qualified skilled workers in strategic occupations and experienced entrepreneurs;
Skills Connect for Immigrants which was developed to help new immigrants find jobs that fully utilize their skills;
Funding of regulatory bodies to improve credentialing and licensing practices;
Improve skills of the labour force;
B.C. performed well on skills among high school students but the province’s performance on indicators measuring university completion; graduation of science, math and engineering professionals; and apprenticeship completion were less favourable;
Improve the quality of the workforce by developing programs that:
Recognize the importance of innovation in education;
Expand students’ international experience and language skills;
Enhance Aboriginal- and immigrant-sensitive education;
Promote lifelong learning;
Address the growing skilled-trades gap.”
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