December 12, 2016 – Paul Morden, The Observer – Spending $11.4 million, to create a dedicated route for metal fabrication shops in Sarnia-Lambton to truck oversized loads of industrial components through the city to Sarnia Harbour, would pay for itself through new jobs and additional economic activity, says a new study.
The recently completed business-case study is expected to build support for federal and provincial funding for a proposed project to upgrade Sarnia Harbour and make improvements to roads leading from the city’s industrial district, including permanently raising utility lines along the route.
The study, prepared for the Sarnia-Lambton Economic Partnership and Sarnia-Lambton Industrial Alliance, estimates a permanent oversized-load corridor could result in additional potential annual sales of $9.5 million for Sarnia-Lambton fabricators, as well as generate an estimated 2,613 additional full-time equivalent jobs, add $263 million to Canada’s GDP and an estimated $21.4 million in tax revenue in the coming three decades.
“It is clear that investment in the corridor would more than pay for itself in the short time (GDP impact) and medium term (tax revenues,)” says the report prepared by Canadian Pacific Consulting Service, with Anderson Haulage.
“It does clearly show that it’s going to create numerous jobs in the manufacturing sector, here in Sarnia-Lambton,” said Sarnia-Lambton MP Marilyn Gladu.
The study was needed so the community can apply for matching federal and provincial funding, she said.
City council has already set aside $200,000 from reserves to cover the local share of $600,000 in engineering work, anticipated to be needed in 2017 if the project moves ahead.
Gladu said the next phase of the federal government’s infrastructure plan is expected to include money for trade corridors, with Ottawa’s priorities for spending based on those set by the provinces.
Because of that, Gladu said she has been working with Sarnia-Lambton MPP Bob Bailey to make sure the oversized-load corridor gets on Ontario’s infrastructure spending priority list.
Just recently, a group from the Sarnia-Lambton Chamber of Commerce met in Toronto with Ontario Infrastructure Minister Bob Chiarelli to push for support for the corridor project.
A report prepared for city council by Peter Hungerford, the city’s director of economic development and corporate planning, says if the nearly $12-million project receives two-thirds funding from the provincial and federal governments, it’s expected the city would be required to contribute $1 million annually for four years.
The industrial alliance was formed in 2010 and initially approached Lambton County council in 2012 to seek support for a dedicated oversized-load corridor
“I feel we’ve been making some very good headway,” said Perdeaux, chairperson of the alliance and owner of Toolrite Engineering in Sarnia.
The recent business-case study follows an earlier engineering study that identified a route and estimated the cost of the work.
Preparing those studies has cost just under $300,000, with contributions from the city, county, local industries and other sources.
“We now have all the information to go directly to the province, directly to the feds,” Perdeaux said.
Sarnia-Lambton is home to a well-established cluster of small and medium-size fabrication, engineering and industrial service companies that grew up servicing Chemical Valley.
But changes in the region’s petrochemical economy, including the closing of several plants, led fabrication companies to look outside the community for more customers for the large industrial vessels and production components they make.
One of the challenges with that is the cost of shipping to customers outside the region, Perdeaux said.
And a large piece of the shipping bill comes just for moving loads from local fabrication shops to Sarnia Harbour, because of the need to raise utility lines along the route, and other issues.
Perdeaux said one of the alliance’s 37 members spent $1.2 million shipping a project to a customer in Alberta recently, and approximately $250,000 was spent just moving it from Confederation Street to the harbour.
“Our goal is to mitigate some of those costs,” so local companies can be more competitive when bidding on work heading out of the community,” Perdeaux said.
The latest study suggests markets linked to petroleum and petrochemical markets in Atlantic Canada, and to a lesser extent the U.S. East Coast, Mexico and the Middle East, have the highest level of potential for local fabricators.
“The businesses in Sarnia-Lambton are capable of meeting the quality standards for the oil industry around the world.” Perdeaux said.