For years, local officials have looked to Canada – and the bustling Toronto metro area in particular – as a ripe market, full of companies that could benefit from expanding into the United States by setting up shop in the Buffalo Niagara region.
And now, after years of lukewarm results, those hopes are beginning to turn into a smattering of significant projects – and scores of smaller ones – that will bring hundreds of jobs and tens of millions of dollars in new investment to the region.
From Ford Motor Co.’s plans, revealed last week, to hire 300 new workers at its stamping plant in Hamburg to make parts for expanded operations at its assembly plant in Oakville, Ont., to Welded Tube’s new factory that opened this summer in Lackawanna, to plans for a Toronto outdoor furniture maker to take over a pair of sprawling waterfront warehouses, Canadian companies have been investing in Buffalo Niagara at an unparalleled pace.
Since the beginning of 2011, Canadian companies have announced plans to invest $460 million in expansion projects in the region, led by the massive, $400 million Greenpac paper mill in Lockport that will employ about 110 people.
Even excluding the paper mill project, which involves such a large investment that it makes comparisons with previous years difficult, the region has brought in $60 million in new Canadian investment over the last three years – $10 million more than it attracted during the previous eight years combined, according to data from the Buffalo Niagara Enterprise business development and marketing group.
“There definitely has been a significant uptick in Canadian activity, especially in manufacturing,” said Paul S. Pfeiffer, a spokesman for the BNE, which has been targeting Canadian companies.
Those efforts included a direct-mail campaign during the last year that sent materials touting the economic benefits of Buffalo Niagara to more than 2,000 Canadian manufacturers. The BNE also hired its own business representative in Ontario a year ago, after New York State closed its economic-development office in Toronto.
Local development officials said Monday that there is a wide range of factors behind the surge in investment, from a Canadian dollar that now is roughly at par with U.S. currency, to lower land costs in Buffalo Niagara and “Buy American” provisions that put products manufactured in Canada at a disadvantage.
“Those are all areas that are factoring into companies either moving or expanding here,” said Bryan H. Roth, a Canadian-American business development manager at the Buffalo Niagara Partnership.
The traffic jams at the Peace Bridge and other local border crossings also make it more appealing for Canadian manufacturers to open facilities in the Buffalo Niagara region, said Craig W. Turner, a Partnership vice president.
“It eliminates the unpredictability of the bridge,” he said. “For Canadian companies, the choice is to open up a facility here and distribute from here, or risk sitting at the border.”
The Ford project is expected to pump about $100 million in new investment into the Hamburg stamping plant, which currently has 565 hourly and salaried workers. The 300 new jobs would increase the plant’s employment by more than 50 percent.
The anticipated expansion at the stamping plant stems from Ford’s recent decision to expand its assembly plant in Oakville. The stamping plant has long had close ties with the Oakville factory, stamping metal body parts for the Ford Edge and Flex, and the Lincoln MKX and MKT assembled there.
And with Ford planning a $682 million expansion that will bring several new global vehicles to the assembly plant outside Toronto, the growth in Ontario is expected to bring new work to the Hamburg facility, the closest stamping plant to Oakville.
But that’s not all.
Welded Tube, a suburban Toronto company that makes steel tubing, opened its $48 million factory in the old Bethlehem Steel complex this summer, and company executives said the startup has gone better than they’d expected.
The Lackawanna factory currently is running just one shift, but Welded Tube already has exceeded its hiring goal for the first phase of the project by 37 percent, said Robert Pike, the company’s vice president.
In January, the company plans to start hiring an additional 25 workers as it adds a second shift, which will bring it two-thirds of the way toward its ultimate goal of becoming a three-shift operation, producing 300,000 tons of steel pipe annually. Ultimately, Welded Tube expects to employ 121 people at its 45-acre site, with the jobs paying an average of $40,000 a year.
Welded Tube was drawn to Lackawanna for a wide range of reasons, from wanting to be able to put a “Made in the USA” label on its products to capitalizing on the site’s location, which is close to both its U.S. customer base and the company’s steel heat treating facility in Welland, Ont., Pike said.
Tipping the scales even further were a local labor force with experience in factory work, along with the $7.7 million in tax breaks and other incentives that the company received, including low-cost hydropower and tax credits and liability relief through a state brownfield cleanup program.
“We worked together as a team to bring new manufacturing to a region that has not seen much growth,” Pike said. “It’s our hope that we started something special” that will be a catalyst for other development at the Bethlehem site.
A couple of miles to the north, another Canadian company, Gracious Living Corp., is planning to move into a pair of vacant warehouses late next year that it is purchasing from the Niagara Frontier Transportation Authority. The new factory will make outdoor furniture and bring about 250 new factory jobs to the region.
Like Welded Tube, Gracious Living executives said they wanted to have a U.S. manufacturing site for their outdoor furniture, organizing products and garage utility systems.
“There’s a real awareness that ‘Made in America’ sells better than ‘Made in Canada,’ ” the BNE’s Pfeiffer said.
Gracious Living also was drawn by the 50-acre site’s proximity to its other facilities in the greater Toronto area, where it has a pair of factories and 1,000 employees, along with its access to a variety of transportation options, from highways to railroads and shipping, said Enzo Macri, the company’s CEO.
And like Welded Tube, Gracious Living also is getting lucrative incentives, including $2 million in Excelsior Jobs Program tax credits.