A Lesson To Be Learned

This past week, Procter and Gamble (P&G), a major corporation based in the United States, announced that they will be shutting down manufacturing operations at their facility in Brockville by late 2020. This means that 480 full time and about 100 part-time/temporary jobs will be lost in Brockville over the next three years. The announcement stated that most of the manufacturing that is currently being done in Brockville will move to a new facility in West Virginia with increased automation.

The loss to Brockville will be significant on a number of fronts. For example, the loss of property tax revenue to the city will be $510,000 per year. It was $800,000 in 2016, but a re-assessment of the property led to a lower assessed value and taxes. There will also be a loss to the city of $320,000 a year from water and sewer fees for the facility. Add in the loss of the money that these good paying jobs would pull out of the local economy, the loss of revenue for contractors that do work for the P&G facility and you’ve got a potentially devastating economic impact. The impact will be felt in the charity sector as well with P&G and its employees having been major contributors to the United Way of Leeds & Grenville who in turn give money to charities in North Grenville.

There’s another loss that is always felt by communities in these situations. That loss is the negative social impact that these big events have on the social or psychological makeup of a community. When communities experience these losses, some begin to lose faith that their community has a viable future or that it can bounce back. During these times, some people react immediately and emotionally as was the case with Brockville, where several residents took to social media and online forums to start assigning blame to everyone but those who were responsible for the decision, which was solely P&G. Spending your time looking for scapegoats is unproductive and just adds to the negative frame of mind that just hurts the community even further. This behaviour further divides people during a very vulnerable period, when everyone should be trying to build bridges and work together.

Much of the blame appeared to be levelled at the City of Brockville, the mayor and council. The rhetoric seemed to come mostly from uninformed and petty people who either were holding personal grudges or didn’t take the time to properly inform themselves. The reality of the situation is that there’s very little that the city of Brockville could’ve done to prevent this from happening. Municipal governments have very few tools at their disposal these days to discourage large scale businesses from leaving or even to attract them. Gone are the days of waiving taxes and fees or giving away free municipal land etc. as incentives. Frankly, no one should be interested in this type of corporate welfare anyway. In these days of tight municipal budgets, these type of giveaways just lead to further service cuts for residents.

There’s a lesson in current Economic Development thinking here. According to the Ontario Ministry of Agriculture, Food and Rural Affairs (OMAFRA), 80% of new job growth in smaller municipalities comes from the expansion of existing small to medium sized businesses. Too many people think that attracting a large corporate manufacturing facility is the way to measure economic success. Now you see what can happen when communities become too dependent on these large manufacturing facilities for jobs. They can leave devastated communities in their wake. On the flip side, communities that have a more diverse local economy with a wider variety of businesses and organizations seem to be more resilient during bad economic times and sometimes even thrive.

Brockville will take this latest setback in stride and move forward. The city lost 1,000 high tech jobs in October of 2002 and lived to see another day. Over time, another use(s) will be found for the P&G facility and the jobs will return, they just may not come in the same form that they left in. Watch for new small and medium sized businesses to slowly pop up over the next few years. It may happen subtly with no fanfare, but it will happen. One can only hope that residents of Brockville recognize the value of these new businesses and fully understand how important it is to support them. If this happens, some people may eventually think that it was probably for the best that P&G left. In the meantime, the pain may linger, but the soul must stay strong.

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