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Canadian economic developers irked by St. Lawrence County IDA marketing

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A marketing effort by the St. Lawrence County Industrial Development Agency to attract Ontario businesses that plays on the province’s increasing power costs has caused some waves north of the border.

“We have some ethics in our profession where we don’t go after companies directly,” said David C. Paul, the economic development director for Brockville, Ontario. “This was more of an aggressive approach.”

The IDA recently started a campaign to attract Ontario businesses using the availability of low-cost energy through the New York Power Authority’s Preservation Power Program and St. Lawrence River Valley Redevelopment Agency. An IDA brochure also notes research and collaboration with colleges, Gov. Andrew M. Cuomo’s Start-Up NY initiative to create tax-free zones, the county’s labor force, buildings and greenfield industrial sites available for use, the foreign trade zone through the Ogdensburg Commerce Park, an advanced telecommunications network, and the geographic advantage of being in close proximity to Montreal, Ottawa and Toronto.

Mr. Paul said he thought the IDA’s effort amounted to poaching because of the reaction of several companies contacted by the IDA.

“It’s just the process of how it’s conveyed,” he said.

Mr. Paul said he prefers the relationship Brockville has with Jefferson County, which does not push for relocation of companies but instead promotes cross-border commerce and talks about the opportunities for satellite businesses.

“That’s the approach they take and there’s nothing wrong with that,” Mr. Paul said.

A company interested in expanding into the U.S. is also the ideal customer for St. Lawrence County, said IDA Executive Director Patrick J. Kelly, who does not expect many companies to move their operations solely on the basis of low-cost power.

But energy costs are high enough in Ontario — which has some of the most expensive power in North America — to make for prickly competition.

“The energy issue is certainly a hot-button item,” Mr. Kelly said. “If we have a selling point, we try to convey that.”

Ontario’s energy market has been the focus of criticism. A recent article in Toronto’s Globe and Mail outlined the problem.

“The culprit for Ontario’s pricey electricity is the so-called ‘global adjustment’ which is added to customer bills, but not the export price. The surcharge is a catch-all that pays for a decade or more of botched deregulation, bloated guaranteed-fixed-price energy purchase contracts and costly efforts to promote wind and solar, while shuttering coal plants,” the article said. “Meanwhile, independent power suppliers, including wind farms and the privately owned Bruce Power, a nuclear power plant near Kincardine, Ontario, are often paid for electricity they don’t ever produce.”

The price for energy has some Ontario manufacturers frustrated.

“They’ve already announced more increases. While electricity is an important component, it’s never been as noteworthy as it has become in recent years,” said Shelley Bacon, CEO of Northern Cables, Brockville, who was among those who received an IDA brochure as well as other marketing ploys from throughout the U.S. “We’ve never reached a point where we’ve been on a search for another location. We would like the government to address these issues. We hope the cost structure is enough reason for concern where they have to do something here.”

The cost of electricity alone is usually not enough for a company to pay the hefty cost of moving, especially to the U.S., said Pierre-Olivier Pineau, an energy market expert at the University of Montreal’s HEC business school.

“If it were only the energy price, they would move to Quebec,” he said.

The IDA is not banking all of its efforts on Ontario, Mr. Kelly said.

It is talking with area colleges regarding a market plan geared toward alumni and for joint attendance at trade shows in New York, Boston and throughout New England.

“You try to find something where you have a connecting point,” Mr. Kelly said. “We have a very robust plan for marketing and outreach this year.”

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