Friday, October 06, 2006

The Economy

Despite a major announcement by Ford Canada, which will essentially see Ford become a minor employer in Windsor, not a single politician, local, provincial or federal, seems to be overly concerned about the impending employment disaster.

Resale house prices went down. The New House Price Index increased by a measly 0.2 percent year-over-year for August. The vacancy rate was just over 10 percent in October 2005 and is expected to be higher for October 2006. That vacancy rate was one of the highest rates in Canada. Several apartment buildings are being converted to condominium status to reduce property taxes (rental apartments are considered businesses and have a much higher property tax rate versus condo apartments).

Things are not looking good for this area. Many of the politicians are shrugging it off as a cyclical adjustment, but in reality, this is a structural adjustment. Ford is downsizing. GM is downsizing. There is no way that Toyota or Honda or their suppliers will find their way to Windsor. But still, people insist that the answer lies in the automotive industry. The difficult solution is diversification. It will take time to diversify Windsor's economy, but diversification minimizes any downturn.

Perhaps the local politicians should take a trip to Brantford and see what diversification has done for that city. Brantford is running out of large tracts of industrial land. In fact, it is working with Brant County to annex land in order to create more serviced land. Time to get our collective heads out of the sand.

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