Ontario's $2.5-billion JPF fund helps province secure major tech investments

Cisco, Open Text and Linamar tapped

Ontario is touting its massive $2.5-billion, 10-year Jobs and Prosperity Fund (JPF) as Canada's economic growth forecast shifts to southern Ontario's manufacturing heartland. The JPF was tapped last year for investments in Cisco and Open Text and more recently for a $50-million infusion in auto parts maker Linamar Corp.

Yet the minister responsible for JPF says rock-bottom energy prices and a weak Canadian dollar are not the primary justification for promoting JPF.

"Lower oil prices and a lower Canadian dollar are welcome but we need to be competitive regardless of currency or commodity fluctuations," says Brad Duguid, minister of Economic Development, Employment and Infrastructure (MEDEI). "It's about building the next generation economy (through) productivity, innovation improvement and exporting."

JPF has a strong technology focus with the aim of boosting R&D in a number of key industrial sectors (see chart).

"This is one of a number of tools we have to attract investment. We use it as a sweetener at the end of the process of negotiations to land a deal," says Duguid. "We're already number one in North America for foreign direct investment but we want to see more growth and attract companies that were otherwise unable to land."

JPF has three components or streams —– new economy, strategic partnerships and a food and beverage growth fund. The first two streams support projects with at least $10 million in eligible costs while projects under the food and beverage stream must be at least $5 million. The New Economy Stream is the largest and it's being tapped to attract and retain major corporations to the province.

"The new economy stream is primarily to help Ontario compete for mandates with other jurisdictions and strategic partnerships is about cluster building (financial services, aerospace). Food and beverage target a great area of our economy. We're number two in North American in agrifood."

JPF has an annual funding allocation of $250 million making it big enough to allow the province to compete globally for anchor investments by companies that are also being courted by nations that offer their own heavy incentives.

Successful applicants to any of the fund's three programs must provide jobs and meet investment targets and R&D commitments. To determine impacts, Ontario has developed a strategic investment framework, the key elements of which have been incorporated into evaluation scorecards for the JPF.

The JPF grew out of recommendations made by the Jobs and Prosperity Council chaired by Gord Nixon, president and CEO of Royal Bank Canada. Its intention was to pull together the province's job support programs under a common approach, says Duguid, adding that MEDEI works closely with the Ministry of Research and Innovation (MRI), particularly in the Strategic Partnerships Stream. This is the stream Ontario uses to advance open innovation technology partnerships and enable technologies that help firms compete globally.

Duguid defends the cost of the JPF despite the province's persistent deficit position. He says recent improvements in the economic environment for manufacturing and other industry activities doesn't make the fund any less necessary.

The new economy and food and beverage streams evaluate proposals on a continuous intake basis.

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