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Two thoughts on reviving post-industrial cities

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Yesterday Adam Radwanski of the Globe and Mail published an interesting article called, Rust Belt revival: Lessons for southwest Ontario from America’s industrial heartland

The article talks about some of the things that the Rust Belt is doing to revitalize their cities and the lessons that many cities in Ontario – which are facing similar fates – could learn from. It’s worth a read.

I’m not going to summarize his article, other than to say that some of the key points were around tax increment financing, tax incentives, University connections, a DIY/entrepreneurial culture, and the American tradition of philanthropy – which Radwanski points out is probably the least imitable for Canada.

And it’s this last point that I would like to focus on first. The US has a deep history of people getting rich and then giving back – certainly more so than in Canada in my opinion.

If you think about the resurgence of cities such as Detroit, you’d be hard pressed not to think of people like Dan Gilbert. He has become the poster boy for Detroit’s resurgence by moving his companies to downtown and buying up most of the office buildings. If and when Detroit comes back (I think it’s a when), Gilbert will easily be one of the biggest beneficiaries.

Now, you could argue that this is made possible because of greater income inequality, but there’s something to be said about powerful individuals acting on intrinsic passion. Gilbert is investing in Detroit because he personally wants to see his home city come back. And that’s hard to replace.

The second point I would like to focus on has to do with this snippet:

With oil’s current slide, Canada really can’t afford for it to remain a drag – and in fact there is some expectation that Ontario will instead reclaim its old role as the leader of Canada’s economic growth. Its premier, Kathleen Wynne, recently expressed optimism that plummeting oil prices and a sinking dollar will prove a boon to manufacturing. “I don’t wish for low oil prices and a low dollar for Alberta,” she said earlier this month. “But at the same time, we want our manufacturing sector to rebound. So if that [low oil price] helps, then that’s a good thing.”

I don’t know what context this was said in, but I continue to feel strongly that we cannot rely on low oil prices and a low Canadian dollar for Ontario’s competitiveness. That is a terrible business model, and an unsustainable one. We need to figure out ways to create value and grow the economy without relying on currency differentials and other macroeconomic factors. Radwanski is right to point that out in his article.

So let’s hope we don’t let any short term benefits go to our head. There’s lots of exciting work to be done.

Image: Old Detroit auto factory via Flickr

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