SMITHS FALLS IN THE WORLD: A STUDY OF GLOBALIZATION IN A RURAL CANADIAN TOWN

By Arif Jinha

Faculty of Graduate and Post-Doctoral Studies

University of Ottawa

ACKNOWLEDGMENTS: Glenn Lockwood, author of A Social History of the Men and Women in a Rideau Canal Community.

Submitted for publication February 1st, 2009 to: Just Labour

Dedicated to the people of Smiths Falls and YouthinPower.ca.

Author’s Notes: I am an MA student at University of Ottawa in Globalization and International Development; and a former NDP federal candidate in the Lanark Frontenac Lennox and Addington riding where Smiths Falls is situated (but who had since resigned at the time of writing). My wife Donna and I have been very active in the community of Smiths Falls. The original version (over 20 pages single-spaced) was circulated to the Town and Chamber of Commerce, and both long and short versions have been widely read and well-received in the region having been posted to the author’s website.

The paper was originally submitted for publication in April, 2008 to the Canadian Journal of Globalization, a new journal that is experiencing some difficulties and did not publish the summer issue. Best efforts have been made to revise from APA to Chicago style, but style precision is not my best asset. Both the abstract and the paper itself were originally set to the requirements of the CJOG. They are very slightly longer than 150 and 5000 words respectively as recommended for Just Labour. I am loathe to cut more out of what originally was over 20,000 words! I hope that you find the paper interesting and close enough to the recommendations to consider it for review.

To review the author’s CV, profile and other writings, please see www.stratongina.net .

Arif Jinha

217 Moffatt St., Carleton Place, Ontario, K7C 3K9

613-257-1740; arif@stratongina.net

ABSTRACT

In early February, 2007, Hershey’s Chocolate Company announced its global supply-chain transformation plan that would cut more than 1500 jobs from its plants in Canada and the United States. Smiths Falls, the Chocolate Capital of Canada, is losing its Hershey factory this year together with the closure of the Rideau Regional Centre. This Eastern Ontario town of roughly 10,000 people is facing the loss of over 1500 jobs, constituting nearly 40% of its labour force. Globalization, despite the confusion generated by the word, must be considered as a core factor in the economic and social situation. Smiths Falls confronts these lay-offs from a position of economic and social strain already. The paper will examine the broader changes in the world occurring through globalization and how the local society of Smiths Falls has adjusted in tandem. Such an analysis has likely been relevant to Smiths Falls since its inception; as a meeting point of transcontinental trade and a centre of manufacturing within an ever-expanding and more complex supply chain.

INTRODUCTION

Industrial towns in North America have long had to adjust to mechanization, free trade and ongoing acquisitions, consolidation and centralisation by transnational companies. Moreover, it appears that the outsourcing of labour to lower-wage countries has now achieved a normative status in the business world. Hershey’s is leaving the Eastern Ontario town of Smiths Falls after 47 years as part of a “global supply-chain transformation”. The Rideau Regional Centre (RRC) is closing with de-institutionalization. With other losses, Mayor Dennis Staples estimates that more than 1500 jobs are leaving (D. Staples, February 28, 2008, personal communication). The rationalizations in business and social policy that exert increasing influence over the local economy are obdurately insensitive to local strengths, society, geography and protest. The lay-offs today add to the long-standing social challenges already facing the town.

Smiths Falls has overcome many obstacles. In fact, overcoming the obstacle presented by its geography is the very reason for its existence. The town originated as a work-camp of immigrant labourers who built a system of locks to allow navigation past the rapids at Smyth’s Falls in defence against possible American invasion in the 1830s. Recognized as a Canadian historical treasure and recently designated a UNESCO heritage site, the Rideau Canal locks in Smiths Falls are a key tourist attraction (UNESCO, 2007). Smiths Falls tells the story of the progress and difficulties of labour through history, from the pitiful conditions of the canal work-camp to achieving a standard of living that now cannot compete with developing countries in global free trade. Today, it is the fear of economic woes, not soldiers, invading from South of the border that causes alarm to Ontarians. Perhaps the Canal can serve as a powerful symbol for the need to work innovatively around the less tangible obstacles globalization presents to small towns across North America.

Navigation is all about knowing the environment and looking ahead. The recognition of what is at stake requires us to go deeper than the popular conceptions and reactions to the word ‘globalization’, and to deal with pressing social and economic realities. The challenge of recovery for a sustainable economy in Smiths Falls and the surrounding region will likely not be met by abandoning the significance of its unique local geography and history. It is more likely to be met by re-orienting these roots and their strengths with an awareness of their convergence with globalization.

THE ROOTS – SMITHS FALLS ECONOMIC AND SOCIAL HISTORY

FIRST NATIONS

Iroquois farmers originally encountered explorer Jacques Cartier in the area that became Smiths Falls, but had migrated long before settlement. Algonquin First Nations acted as guides to early explorers and have long hunted and trapped in the area. Early trade was of mutual benefit to newcomers and indigenous peoples, but as settlement grew, disease, alcohol and maltreatment left the First Nations disenfranchised. In 1783, the colonial government negotiated with their allies in conflict with the Americans, the Mississauga, to acquire a large portion of Eastern Ontario in return for a handful of insignificant items. The settlers interpreted this as to extinguish all native rights to the land, though they had never reached an agreement with the Algonquin or Iroquois Nations (Lockwood, 1994). Today, Smiths Falls is within a vast swath of Eastern Ontario subject to a land claim by the Algonquin and the basis for negotiating the claim has been accepted by provincial and federal governments (Ontario Secretariat for Aboriginal Affairs 2007). The Algonquin recently joined in solidarity with land-owners in Frontenac to oppose a uranium mine that threatens local communities and the region’s water, including Ottawa’s water supply (“No Uranium Mine”, 2008).

INDUSTRIAL TOWN – 1880 – PRESENT

After initially developing as a Rideau-Canal work-camp, the village at Smyth’s Falls finally grew into a town when the Canada-Pacific Railway (CPR) was established in the 1880s. Smiths Falls boomed as a minor port with lines carrying goods from the Far East, BC and the Prairies met with those coming from Toronto and from Montreal and Eastern Canada, as well as distributing local goods with resources from its agricultural hinterland. These lines connected at Smiths Falls, and the town’s proximity to the border made it an excellent location for shipping to the American Midwest.

The railway allowed the local company Frost & Wood to trade its agricultural implements from 1830 – 1964, taking advantage of the growth of Canadian agriculture during this period and trading internationally from ports in Montreal. Its sister company, Malleable Iron Works, supplied Frost & Wood and continental manufactures with iron castings. Frost& Wood had left local hands early in the century, staying competitive until mid-century but consolidated finally to Kitchener in 1964. Malleable also closed in 1964 after over 100 years in operation. These two closings were the cause of the first major industrial layoffs in Smiths Falls. The town had already struggled with low employment frequently in the first half of the century; in the 1910s, through cancellation of farming equipment contracts in Europe during the Great War; in the late 1920s and through the Depression right up until WWII (Lockwood, 1994). The Railway Museum in Smiths Falls remains as a heritage tourist attraction.

Accompanying the losses of traditional industries in the 1960s, the period of 1957 to the mid-60s saw 1100 CPR jobs leave Smiths Falls due to mechanization. New industry from outside investment arrived with inconsistent results from then onwards. Plant closures peaked in 1989 when 1000 jobs were lost in Smiths Falls and surrounding areas, one year after the Canada-U.S. Free Trade Agreement was signed. Hershey and a few other employers increased their workforce in anticipation of the FTA’s impacts, but all of these returned to previous levels or lower by 1993, accompanied by more closures. The crisis of 1989 led to federal and provincial assistance and a business development centre where entrepreneurs could access loans (Lockwood, 1994). This led to new industries, some of which were started locally and are still thriving today. In 2009, Smiths Falls will brace itself for the third time it has faced lay-offs of 1,000 or more jobs in a short period of time.

HERSHEY’S

In 1962, the creative Chamber of Commerce in Smiths Falls had taken to stopping the first car entering the town each month to sell them on the town, that summer they stopped a Hershey executive. The chance meeting led to Hershey’s first plant outside Pennsylvania. The strength of local dairy production, good water supply, its excellent position for distribution along several rail lines, and its labour provided good incentives for Hershey to invest (Lockwood, 1994). The company’s founder, Milton Hershey, was well-liked by the company management and workers alike. Much of the infrastructure of the town of Hershey in rural Pennsylvania was inspired by his “Great Building Campaign” to mitigate the jobs crisis during the Great Depression (Town of Hershey, 2007).

Hershey Canada in Smiths Falls at its peak in 1990 employed 750 people - the largest chocolate factory in Canada. The Hershey Visitor Centre, with the Hershey Museum and Chocolate Shoppe Hershey Museum has been a tourist draw for decades, doubling its size in 2001 to accommodate the 300,000 visitors per year (Lockwood, 1994). Visitors could take a tour of the facility from the second level where the factory floor can be viewed. Hershey’s has shaped Smiths Falls’ identity giving birth to the annual Chocolate Festival and the moniker of Smiths Falls as the Chocolate Capital of Canada. Hershey’s has been in Smiths Falls for 47 years now, one of the longest tenures of the many companies that have operated in the town, and the longest of any that was created from investment by a major outside company.

HERSHEY’S CLOSURE

In February 2007, Hershey’s Chocolate Company announced the closing of most of its North American plants despite strong performance. At the close of 2005 Hershey Chocolate Company recorded record full-year results and in July 2006, announced record second quarter results (Hershey’s, 2006). Only seven months after announcing record profits, Hershey launched their new strategy entitled ‘global supply chain transformation’ (Hershey’s, 2007). In the new realignment phase, 900 are to lose their jobs in Hershey, Pennsylvania, 575 will be laid off from the Oakdale, California plant (Dow Jones Newswires, 2007). Hershey had already closed a plant at La Piedras, Puerto Rico and has since closed a plant in Dartmouth, Nova Scotia adding another 500+ lay-offs.(West, 2006) (MacDonald, 2007).

Hershey’s plan includes the construction of a new ‘low-cost capacity’ in Monterrey Mexico, outsourcing low-value segments, consolidations, increasing capacity utilization by 20% and reducing production lines by 30%. It expects to generate savings for the company of $170-190 million annually from 2010 (Hershey’s Company, 2007). The plant that was built for $7 million in 1962, and expanded over the years, came on the market at $7 million in 2007 (CB Richard Ellis, 2007). Despite its bullish expectations, Hershey’s appears to be in trouble. Losses through all quarters of 2007 and falling stock prices have resulted in the firing of the CEO who led the transformation plan along with six directors forced out and two who resigned (“Editorial – Hershey’s Pledge...”, 2007) To make matters worse, Canadian chocolate companies including Hershey’s are being investigated for alleged price-fixing over the last five years (Noronha, 2007). The plant at Smiths Falls closed finally at the end of 2008. One wonders whether at the end of the day, (mis)management, re-structuring costs and bad press have completely dwarfed the relevance of labour costs to shareholders in the first place.

RIDEAU REGIONAL CENTRE (RRC)

Smiths Falls largest in the last fifty years has been Rideau Regional Centre (RRC), built in the 1950s on the outskirts of Smiths Falls in the rural township of Montague. The institution had a mandate to serve all of Eastern Ontario’s need for care for the mentally disabled. The complex doubled by 1954 in response to need, serving 2400 patients and employing 1500 people. The professional population of the town multiplied with psychologists, social workers, psychiatrists, nurses and doctors. Local farmers were able to supply milk to the Centre, and farm families commuted to work at RRC for extra income. Smiths Falls benefited as a service centre with the town’s population peaking at 10,000 in the mid-60s (Lockwood, 1994).

By the 1970s, a general consensus had developed among policy-makers and academics that institutional care was outmoded, driven by advocacy of the Community Living movement who believe that institutions discriminate against the disabled (Kendrick, 2000). Bolstered by the savings that could be realized, the government of Ontario began implementing de-institutionalization in the 1980s. In 1988, the Rideau Regional School closed, and by 1989, the number of clients at RRC had fallen to 841. Reacting the closure plans, in 1991 the people of Smiths Falls reacted with a mock funeral predicting the death of the regional economy (Lockwood, 1994). Despite the consensus on community living, there is considerable contention when it comes to moving the lifelong-residents of institutions such as RRC. Testimony of hardships relayed informally to the author are reflected in the official statements of the Rideau Regional Centre Association (an advocacy group for RRC clients since 1962) the Mayor of Smiths Falls and the RRC union in their opposition to the closing (National Union of Public and General Employees, 2005).

"Most of our residents are over fifty," he said. "They have severe developmental disabilities along with many physical handicaps. Many of our residents are medically fragile and many suffer from serious mental health issues. These are people who need around the clock care. Community integration is a great buzz phrase, but in the case of these people it is nothing short of cruel." – Dave Lundy, president of OPSEU/NUPGE union local –RRC (2005)

The buzz phrase spoken of is part of the language in ‘transnational social policy’ trends (Morales-Gomez, 1999). However progressively conceived, the international norm is frequently at odds with the less tidy realities of re-location on the ground. Experts have recognized the nature of this problem, and several high-profile advocates have filed affidavits with the province to prevent the re-locations that put patients at risk (Sutton, 2005). The Community Living Association(CLA) of Lanark County in turn has aggressively supported the closure in advocacy of the same disabled individuals, passing a motion for the Ontario CLA to intervene with the RRC families’ class-action (Community Living Association, Lanark County, 2005). This conflict has been mirrored in many communities in the Western world, yet finalizing de-institutionalization and closing institutions remains a performance target for provincial and state jurisdictions (National Conference of State Legislatures, 1999). RRC is scheduled to close in 2009, with over one hundred remaining clients to be re-located.

GLOBALIZATION

For economists globalization refers to increasing market integration based on falling barriers to trade, rapid financial transaction, technology and negligible transportation costs. This allows for the greater mobility of all economic factors of production. Labour is also more mobile, but the people are inherently less mobile than the jobs themselves, as has been felt in Smiths Falls and elsewhere. Globalization has also been a political history, with the progression of international relations from colonialism through to the end of monarchic mercantilism and the rise of liberal economics culminating in the first wave of globalization. This came to an abrupt halt with WWI and the subsequent rise of nationalist protectionism. The deconstruction of trade barriers starting with the General Agreement on Tariffs and Trade (GATT) after WWII, the introduction of the Bretton Woods institutions and the emphasis on free trade led all the way to the establishment of the World Trade Organization in 1995. Finally 1989, there was the end of the Cold War separation of Western-aligned and Soviet-aligned states paving the way for a truly global world.

In terms of society and human relations, globalization is a stage of human development where social and economic relations are sufficiently interconnected, more direct and sufficiently penetrant of the world’s regions so as to have real effects everywhere. As a short-list, these global relations are mediated through communications technologies, transborder migration, a global financial system, a global knowledge commons, a system of international relations based on nation-states, the inter and intra-national division of labour and the global supply chain of production. This is the world today - mobile, rapidly changing with local conditions relating more directly to global conditions, where borders are less important as boundaries as they are reference points to the wider world.

BUSINESS GLOBALIZATION – GLOBAL SUPPLY CHAIN MANAGEMENT

When Theodore Levitt published the now-famous article “The Globalization of Markets” in a 1983 edition of the Harvard Business Review, he urged business leaders to focus on global standardization of their industrial processes over tailoring to local cultures. He believed that the resulting homogenous low-cost products were capable of penetrating global markets, since people everywhere shared the same wants – greater convenience and pleasure, and savings of their disposable income (Levitt, 1983). In his blunt analysis and advice to business executives Levitt outlined an emerging trend, he predicted the outcomes of the advice he clearly believed leaders would follow, and he influenced a generation of CEO’s to follow that advice.

However, the contemporary market responds to demands that are more precise and constantly changing, especially for higher-priced products. Today, standardization can be combined with rapid tailoring, transformation and innovation through supply-chain management. Industrial processes can respond to design change and advances that can transform a product rapidly and vary it geographically. As the supply-chain encounters labour market differences between regions of the world, the division of labour is rationalized according to its cost-effectiveness, determined primarily by the relative poverty or wealth of nations. The higher-value stages of the supply chain justify the higher wages demanded by highly-skilled workers in developed countries in a knowledge economy. In Canada, publicly-supported basic research provides the knowledge base for innovations that can be commercialized, and publicly-supported education through all levels expands the labour market for these workers. Since the commercial markets are largest in the wealthier nations, service workers are required. A typical contemporary international division of labour in the global supply chain is demonstrated in Hersheys’ new plan. Raw product at low commodity prices from West Africa, low-cost manufacturing in Mexico, outsourcing of lower-value segments, and research and design, marketing, and administration centralised in the United States. Products are distributed to retailers, the majority of which are in North America, and at the end of the supply chain the service worker meets with you and I at the point of purchase.

As mechanization did in the past, followed by standardization, global supply chain management represents another transformation in the division of labour. Given Canada’s position of high relative wages and advantages in the knowledge economy, the advice for Canadian business leaders is to outsource the supply chain of unskilled to medium-skilled labour to low-wage countries. This advice comes from the Canadian government’s Business Development Bank itself (Nycz, 2007).

UNEMPLOYMENT - BUSINESS GLOBALIZATION MEETS SOCIAL POLICY

Clearly, the logic of global supply-chain management is taking its toll on Canadian manufacturing jobs. The number of jobs peaked in November, 2002 and has been steadily declining with over 288,000 jobs leaving the sector by 2007 (Weir, 2007) and 77,000 manufacturing jobs leaving Ontario between 2001 and 2006 (Madhavi, 2008). Smiths Falls is clearly not alone in facing the crisis. Similar to the mock funeral held in Smiths Falls in 1991, the Canadian Labour Congress set up a mock graveyard on the lawn with all the businesses that had folded or left (“Thousands Protest…”, 2007). At the present moment, Smiths Falls is faced with a tremendous difficulty in being able to predict whether this trend will stabilize, however it seems unlikely to reverse.

Lay-offs are a serious concern for communities. A lesser-known article entitled ‘Canada’s Good Example with Displaced Workers’ appeared in the same 1983 volume of Harvard Business Review as Levitt’s famous one. U.S. labour economist William Batt Jr. favourably compared our adjustment process with industrial lay-offs to that of the U.S., stating that Canada was light-years ahead. As standard policy at the time, the Manpower Consultative Service (MCS) would facilitate the formation of an adjustment committee formed with the union leaders and managers of the company closing the plant and a third-party chair. This committee would be charged with a mission to help all workers to find new jobs before the plant closed. The committee would be accountable to its mission not only through the extensive job development tasks undertaken, but also in keeping a record of what happened to each and every employee. It would only fold when the job had been completed. This practise was seen as far more effective than setting up “overcrowded and impersonal job service centres” typical in U.S. adjustment (Batt, 1983). The serious concern for communities? The article cites evidence from a John Hopkins’ professor in regards to U.S recession lay-offs. For every 1% rise in unemployment, 4.3% more men, and 2.3% more women enter mental hospitals; 4.1% more people commit suicide; and 5.7% more people are murdered (Batt, 1983).

What has happened to Canada’s model that U.S. leaders were once so impressed by? It morphed into a provincial programs, and today in Ontario, the Adjustment Advisory Program has the same mandate as the MCS. It appears that in current practice, the employers’ are largely without obligations, resulting in uneven results with companies able to walk away from any accountability. According to CAW’s David Robertson: “When you end up with a system of uneven supports, a provincial patchwork of commitments, little accountability and no national standards then you know the system is broken.” – David Robertson, Speech to CAW (Robertson, 2003). In Smiths Falls, there is a job centre but no apparent process that could be likened to the MCS committee. It appears we are in the same spot the U.S. was 30 years ago, light-years behind the Canada of 1979.

GLOBALIZATION AND SOCIAL WELFARE

The post-WWII boom in Western economic growth that financed the social welfare state as a transnational norm in the West was created through liberalized trade (GATT) and reconstruction financing (Marshall Plan). However, growth slowed from 3.5-4% from 1960 to 1973, to less than 2% from 1973 to 1990. During this period, the social welfare system began to erode and unemployment rose to 7.8% in OECD countries. The real-earnings of the average worker have stood still against inflation since from the 1970s on (Banting, 1995)(Russell and Dufour, 2007). In the agricultural sector, farm incomes have fallen below levels of the Great Depression, adjusting for inflation (National Farmers Union, 2005). High unemployment, growing debt, fiscal crises, aging and growing populations, and ballooning health care costs placed pressures on governments to tighten social benefits. In Canada, unemployment insurance rates have been reduced, while the qualifying period has been extended. Indexation to wages and to cost of living has been adjusted to lower relative benefits. The international norm has been to shift spending in order to provide more training opportunities and a flexible labour market for the global economy. Between 1964 and 1971, Canada greatly expanded post-secondary education and adult training (Banting, 1995).

Fiscal crises began to take a toll on social welfare since the late 1980s with Black Monday’s stock market crash of 1987 heralding in a years-long recession. Progressive Conservative leader Mike Harris was elected on a platform of fiscal tightening in 1995 - the ‘Common Sense Revolution’. Welfare rates were immediately cut by a record 21.6% and since then have not been indexed to inflation. Eligibility was also tightened, and since 2000 there is no earning flexibility –every dollar earned is a dollar deducted (Herd, 2001). Virtually everywhere, social assistance rates are not even adequate to cover rent. Those unable to work have seen a similar freeze on indexation of cost-of-living for disability pensions, leaving those reliant on assistance 30% poorer than when the cuts and the freeze took effect (Herd, 2001). The economic pressures of re-structuring to a global economy have been cited as the cause of a decline of social cohesion (Banting, 1995). As a visceral symbol of this today, most people seeking assistance at government offices do so through bullet-proof plexi-glass, surely reflective of the strain between government services and recipients.

SOCIAL WELFARE AND MUNICAPILITIES – SMITHS FALLS

In the late 1990s the province of Ontario began to download social assistance to municipalities, which is particularly troubling for Smiths Falls, where 19% have earnings from social assistance as compared to an average of 8% in Ontario. Currently Smiths Falls has a social services shortfall of over $1 million dollars (Town of Smiths Falls, 2007). In Smiths Falls, 24% of families have incomes below $30,000 compared to 18.8% for Ontario as a whole. Many of the new sources of employment in Smiths Falls are part-time, non-unionized service jobs. A full third of children in poverty come from families that work full time. While incomes are increasing in Canada are increasing, in Smiths Falls income levels are declining from 1996 to now. Before the lay-offs began at Hershey, the employment rate was only 54% and far below the provincial average. Smiths Falls has a significantly higher number of people with disabilities than average, especially mental disabilities (Jinha and Robberstad 2007; Open Doors of Lanark County, 2007).

The outcomes of these challenges over the long-term appear to have resulted in lower than average stability of families, lower educational attainment, and the highest teen pregnancy rate in the region. 48.1% of residents 15-24 are not attending school, compared to the Ontario average of 35.1%. One-third of families with children are headed by single mothers. 41% of lone-parent families have children between ages 0 and, and 68% of these have incomes below the poverty line. Currently there is a wait of months to years to access mental health services. There is no public transportation, and even getting to soup kitchens is difficult. There are significant numbers of people at risk of or already homeless with the closest shelters in Ottawa or Kingston (Jinha and Robberstad, 2007; Open Doors of Lanark County, 2007). In 2007, nearly 9000 people used a homeless shelter in Ottawa and the average stay was 38.4 days (Alliance to End Homelessness, 2007). A third of Canada’s homeless are youth and much (40-50%) of Canada’s “street youth problem” in urban centers originates with migration from small towns (Transitions, 2003). The situation of youth homelessness is now being addressed by the Transitions Action Coalition of Lanark County (Transitions Action Coalition, 2008).

FACING GLOBALIZATION – RECOVERY IN SMITHS FALLS

LOCAL STRENGTHS, LOCAL OWNERSHIP & LOCAL RECOVERY

Despite globalization, there has been a considerable amount of local inter-dependency and promotion of growth by proximity. Companies started locally have often been bought out, which allowed them to grow before they became vulnerable to consolidation. Locally-formed companies have tended to create more lasting employment than investment from outside and plant closures in the past have provided some silver linings. Some of the town’s greatest successes came as a result of plant closures through employee or citizen ownership. The old Malleable plant had been empty during the Great Depression until it resumed production for another twenty years under citizen-ownership. The scientific instrument company Guildline was bought out by employees in the 1950s, and moved from Quebec to be near Ottawa’s National Research Council. Having recently celebrated their 50th anniversary, Guildine employs hundreds today. Then there is Smiths Falls Bookbinding, a small business started by employees after Irwin, Smith and Conley was consolidated (Lockwood, 1994). Queen’s researchers studied ten companies across Canada that were employee-owned. Most were formed in response to closures and realized growth and success despite many challenges. Employee-ownership has become relevant because of the crisis in employment and the opportunities created by globalization. The title of the book is compelling – “Employee Ownership – the New Source of Competitive Advantage” (Beatty and Shachter, 2001).

Despite economic strain, Smiths Falls’ numerous strengths draw on 150 years of contribution to the regional economy. Though the town will likely need support, investment from outside Smiths Falls or Canada and partnerships to recover, it can do from a position of strength in local process. The key ingredients locally to success will be enhancing its labour supply’s competitiveness, meeting the social challenges through the strengths of community, creating an attractive investment environment for entrepreneurs and supporting local business development including employee-ownership. The current situation provides opportunity to do things differently and set Smiths Falls on the path for short and long-term recovery and resilience.

LOCAL GOVERNANCE

In order to attract productive investment and capture niche opportunities, transparency, predictability and incentives are needed. Concessions in the form of tax breaks are an investment paid for by town residents, and the strategy should be transparent and accountable in delivering results to those residents. Such concessions have had mixed results in the past. From the entrepreneurs’ point of view, the process from contact to investment should be predictable, sensible, fair, well-communicated, open, and easy to navigate without unnecessary obstructions. Municipal government should create the infrastructure for economic development planning and strategy, and streamline its by-laws to reduce transaction costs while protecting its character. As a point of contact, it should efficiently relay ideas and interest and information to the community, especially those involved in economic development. After that, it should stay out of the way and focus its energies toward the social infrastructure and advocacy to provincial and federal governments.

SOCIAL PLANNING AND LABOUR READINESS

The conditions and security of labour whether employed or un-employed, of those with disabilities, of youth, and of those living in poverty, along with the issue of rural homelessness will have to be addressed mainly for the sake of social justice, but also to make Smiths Falls a good place to invest and live. A worker-driven jobs organization could not only provide training, job-readiness courses and leadership and volunteer opportunities, it could create a ‘resumé’ of the town’s labour supply that is constantly improving. The organization could enable the group purchase of health benefits, and cooperation for transportation could enable placements to meet the region’s labour needs, including the booming town of Carleton Place, nearby towns and farms, and Ottawa, supplying day labour to short contracts and full-time workers. This would promote Smiths Falls as a ‘willing to work’ town with a flexible and job-ready labour supply. The mandate would be similar to the MCS committee, to place each and every worker registered and making use of all types of networks in the labour market. The daily involvement of workers would go along way to mitigating the social impacts of unemployment, especially the loss of purpose, structure and social support. In addition, a Social Planning Council could emerge out of the various community-based social justice and poverty-focused work on the rise through the various churches and youth organizations in Smiths Falls and Lanark. Local social planning councils are connected to the Social Planning Network of Ontario and province-wide advocacy to address the core issues regarding social policy and poverty discussed in this paper (Social Planning Network of Ontario, 2008).

REGIONAL COOPERATION FOR COMPETITIVENESS AND A RURAL VOICE

Writing about recovery in the face of globalization, American rural economist Jason Henderson argues that small towns need to get over the ‘Friday night Football rivalries’ and work together to achieve regional advantage (Henderson, 2004). Smiths Falls could be the hub of a well-developed regional agricultural market infrastructure serving the cities of Toronto, Montreal and Ottawa with local fresh food – a concern for quality restaurants and those interested in the 100-mile diet. Smiths Falls would provide an excellent contextualized location for a policy research centre on rural issues, shifting the lens to a rural perspective. RRC is structurally suitable for a sustainable ‘green’ living and working community, and could serve regional residential health care needs. The Hershey factory could house the new face of business in Canada with multiple small manufacturing enterprises (SME’s)– including a new Fair Trade chocolate company that could capture the public’s imagination as a response to globalization. The Algonquin land claim is an opportunity to restore mutual benefit and establish sustainable land use and eco-tourism.

IMAGINING THE FUTURE

There will be opportunities in the next ten to twenty years that can be realized if there is a space for ideas and creativity that can gain traction through planning, communication and partnership. The massive industrial complexes in China and other developing countries will all confront the price of oil as well as environmental pressures in the near future. Jeff Rubin, chief economist of CIBC World Markets predicted this week that oil would exceed $200 a barrel in five years (McCarthy S., 2008). Could Smiths Falls’ empty plants be the site for research and innovation towards the ‘green industrial plant’ of the future, thus creating the technology and business processes to meet the enormous market that will soon emerge? Given the projected decline of world oil, rail may become vital to shipping again in the future, leading to a resurgence of continental shipping and transportation. Should it be able to combine its advantages in rail with green industry, foresight in tracking these long-term changes and forging partnerships behind innovative ideas may prove well-thought of.

NEW MESSAGE TO THE WORLD

Difficult times provide the motivation now for local community leaders to mobilize the town in addressing immediate and long-standing challenges, and in doing so it may need to re-tell its story of troubles as a story of recovery. The more authentic the presentation is in regards to Smiths Falls’ character and history, the more likely it will attract both tourism and investors that are interested in contributing to the community. A new coat of paint however, will not suffice. Where the image doesn’t match with too many negatives in the labour, social and local governance environment, Smiths Falls can count on losing business. Thus, the message that the town has a ready, willing and able work-force and is a good place to live, visit, work and invest must be matched by strong steps towards these realities in the short-run and real change over the long-term. The natural advantage is that many Canadians, including this author, believe that rural towns are still the best places to live and work despite the draw to cities.

CONCLUSION

Adjusting to a globalization in this context is challenging because the threats to rural life cannot be seen directly or attributed to a particular global enemy. After all, it is Canadian entrepreneurs who are moving their labour the China under the advice of the Business Development Bank of Canada. The Chinese workforce can’t be blamed for looking for whatever work they can find, nor for the low labour standards in a country where civil rights are repressed routinely. Entrepreneurs are trying to survive and thrive in a globally competitive environment. Smiths Falls will likely not attract large industrial employers requiring a large low-skill labour force, and today’s emerging firms are more likely to employ a dozen or workers. The good news is that there are many more firms globally that can consider Smiths Falls. With so many locations to choose from, the differences may be the intangibles of quality of life and niche opportunities. These elements will be important to retain local talent as well. Niche opportunities are best identified by local people who know the unique characteristics. Attention to the social concerns of Smiths Falls is vital from a humanitarian and an economic point of view.

There are far too few voices in policy advocacy from a rural perspective. Responsiveness from the centers of power in cities to the realities and opportunities for rural regions is too distant and too slow to cope with the pace of globalization and its real effects on the ground. Policy-makers need to recognize the risk of losing Canada’s rural character to a process of un-development, de-population and increasing poverty. Globalization creates a space for change that could create a new dynamic for rural areas, but this will happen only if it is communicated across the so-called urban-rural divide and recognized on both sides. Smiths Falls cannot easily change globalization, but it is possible for the town to consciously engage with it to the advantage of its people and in contribution to the world. For Canadians it is a question of recovering the present for the sake of preserving our rich past, and for the sake of a sustainable future. Time to pay attention.

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