Building Ontario: The Province’s Manufacturing Renaissance

June 13, 2024

The Empire Club of Canada Presents

Building Ontario: The Province’s Manufacturing Renaissance

Chairman: Sal Rabbani, President, Board of Directors, Empire Club of Canada

Moderator
Flavio Volpe , Director, Empire Club of Canada

Distinguished Guest Speakers
Dr. Bettina Hamlin, President, Innovative Medicines Canada
The Honourable Vic Fedeli, Minister of Economic Development, Job Creation, and Trade, Government of Ontario

Head Table Guests
Sabrina Fiorellino, Chief Executive Officer, Fero International Inc.
Dr. Yousef Haj-Ahmad, Chief Executive Officer, Norgen Biotek Corp.
Bradley Harker, Principal Commercial Officer, U.S. Consulate General Toronto
Caroline Hughes, VP of Government Relations, Ford Canada
Raed Kadri, Head of the Ontario Vehicle Innovation Network (OVIN), Ontario Centre of Innovation
Sarah Letersky, Director, Empire Club of Canada
David T. Olsen, Regional President and Principal Officer, PNC Bank Canada, Chair, American Chamber of Commerce Canada
Bob Repovs, President and Chief Executive Officer, Samco Machinery Limited
Satish Thakkar, FCPA, FCGA, Immediate Past Chair, Canada India Foundation

Introduction
It is a great honour for me to be here at the Empire Club of Canada today, which is arguably the most famous, and historically relevant speaker’s podium to have ever existed in Canada. It has offered its podium to such international luminaries as Winston Churchill, Ronald Reagan, Audrey Hepburn, the Dalai Lama, Indira Gandhi, and closer to home, from Pierre Trudeau to Justin Trudeau; literally generations of our great nation's leaders, alongside with those of the world's top international diplomats, heads of state, and business, and thought leaders.

It is a real honour, and distinct privilege to be invited to speak to the Empire Club of Canada, which has been welcoming international diplomats, leaders in business, and in science, and in politics. When they stand at that podium, they speak not only to the entire country, but they can speak to the entire world.

Welcome Address by Sal Rabbani, President, Board of Directors, Empire Club of Canada
Hello, everyone. Welcome to the Empire Club of Canada, the country's go-to forum for conversations that matter, for 120 years now.

To formally begin this afternoon, I want to acknowledge that we are gathering today on the traditional and treaty lands of the Mississaugas of the Credit, and the homelands of the Anishinaabeg, the Haudenosaunee, and the Wendat Peoples. June is National Indigenous History Month, a month dedicated to recognizing the immense contributions and diverse cultures that First Nations, Inuit, and Métis People have made to our society, to honouring the progress that has been made towards Reconciliation, and acknowledging the work that remains to be done. We encourage everyone to learn more about the Traditional Territory on which you work, and live. This is an essential first step to Reconciliation, and each and every one of us has a role to play.

Moving to today's program, I'd like to extend our warm welcome to the Honourable Vic Fedeli, the Minister of Economic Development, Job Creation, and Trade for the Government of Ontario. Welcome, Minister. The Minister will highlight some of the great things going on in Ontario over the past few years. You know, with more than 700,000 new jobs created since 2018, manufacturing employment is at its highest level in 15 years. The province is witnessing record growth across a variety of key industries, including the automotive, life sciences, tech, and manufacturing sectors. We'll look at all that, and also see what's next for the future. The Minister's keynote will be followed by a conversation with none other than Flavio Volpe, Board Director of the Empire Club of Canada, President of the Automotive Parts Manufacturers Association, and one of Canada's most prominent champions of our automotive industry. Thank you both for being here.

We'll accept questions from the audience for our speakers. And for those of you in the room, you can undertake to scan the QR code found in your program booklet. And for those of you joining us online today, if you require technical assistance, please start a conversation with our team using the chat button on the right-hand side of your screen.

You know, today's event is one of the last of our season, which officially ends, I think, on the 27th of June—the team will correct me—it's also one of my last activities, before I move on to being the Immediate Past Chair of the Board, and the Chair of the Nominating Committee of the Empire Club of Canada. So, I'll take a liberty here, and take the opportunity to give thanks. Thank you for the opportunity to serve. You know, when I was 18, I attended my first Empire Club of Canada event, and I still remember that day—and I had an opportunity to speak to some students from the University of Toronto—so, listen, I put on my best suit, and listened to the Honourable Margaret McCain talk about early childhood development. You know, that was a crucial moment in my life, as I realized firsthand the important role that the club plays in advancing dialogue, and democracy. So, it was with great pride, and humbleness, you know, that I had the opportunity to serve as the Chair of the Board of Directors two years ago, of this club. You know, it was a, a call to service, one of the highest honours and responsibilities of my life.

Every time I've stepped onto this stage over the past two years, it was from a position of immense responsibility. Responsibility towards my predecessors, all the past presidents of the board, who individually and collectively contributed for over 120 years to shaping the Empire Club into this historic institution that it is today. Responsibility toward the mission of the club to be a thoughtful and relevant conversation platform that reflects the big themes and challenges of our times. Times marked by polarization, economic instability, climate change, technological shifts that are about to change our lives forever. So, with each event, and each conversation, we've strived to bring you thought-provoking speakers, to make sense of this complexity. Every time I've stepped onto this stage over the past two years, I've also been filled with hope. And that one thing that gave me hope over and over again was all of you, this incredible community of colleagues, and peers, who show up, who challenge us, give us ideas, constantly pushing us onward, and upward.

When I started my mandate as Chair of the Board of Directors two years ago, I gave ourselves a mission to make the club more accessible, more inclusive. This included having more diversity on stage, more women, more Indigenous peoples, and more visible minorities—and I hope you've noticed that throughout our events. It's also included more diversity, and inclusivity in front of our stage. So, with the help of our incredible sponsors, we've made our online events free to attend. That's our commitment to equity. We also ensured to extend the club's reach, to better include the next generation. For each of the 70 events we've organized over the past two years, we've made sure that we've had at least one sponsored table for young leaders. So, I already gave the shout-out, but a shout out again, to the young leaders we have with us today. Your, your passion for the planet, diversity, equity, justice, and innovation, are a constant reminder that we can all make the world a better place. I hope the conversations and ideas you've heard on this stage will inspire you to go even further in your dreams, and your ambitions.

You know, another source of hope for me as chair has been the profound impact of our work at the club. The Empire Club is the business club of Toronto, and one of Canada's prime public tribunes. Close to 15,000 people attend our 35 virtual events, or in-person events each year. And in fact, this year we celebrated 120 years of existence. Over our history, we've had on this stage more than 3,500 Canadian and international leaders, including Winston Churchill, Indira Gandhi, Audrey Hepburn, Roberta Bondar, Bill Gates, business leaders, athletes, researchers, prime ministers, and premiers. Leaders from all walks of life, who have brought constructive and healthy debate to our audiences. I couldn't think of a better way to positively influence and advance our society. Our mission is important. We've been delivering on it for 120 years. And we'll continue to do so in the future.

As I prepare to pass the torch, I'm confident in the club, and in the future of the club. I think the best is yet to come. Exciting change is ahead, to enable the strong foundational changes we've made over the past two years. The club will announce its new chairperson of the board in due time. But meanwhile, I'm proud to announce here today the appointment of Ken Emerson as Chief Executive Officer of the Empire Club of Canada, effective July 1st. Thanks, Ken. A round of applause. Thank you, Ken. You know, Ken will be the first CEO of the club in 120 years. He brings extensive experience and expertise, and a go-getter attitude, combined with incredible, and collaborative skills. He's a past president of the Board of Directors. You know, Ken's been working closely with the club, and is best positioned to advance our vision for the future. So, congratulations, Ken. One more time.

In closing, I'd like to thank my fellow board directors. Can, for those of you in the room, can you please stand up? These outstanding individuals give their time, energy, and expertise, to the great mission of the Empire Club: engage, debate, educate, and advance the dialogue on issues of importance to Canadians. They work tirelessly behind the scenes, curating topics, finding speakers, and fulfilling the club's mission. So, thank you. And a big thank you to the Empire Club of Canada staff, a small yet mighty team that punches above its weight to bring you these events. Jehan, Sarah, Maggie, Harsh, and Ken, I'd ask you to stand up, as well. Thank you.

The Empire Club of Canada is a not-for-profit organization, and as always, I would like to take this opportunity to recognize our sponsors, who generously support the club, and make these events possible, and complementary for our online viewers to attend. So, thank you to our Lead Event Sponsor, Ford, and Innovative Medicines Canada. Thank you. And thank you to today's Supporting Sponsors, Accelerate Auto, and Magna. And thank you to our Season Sponsors, AWS, Bruce Power, and Hydro One.

You know, like many Canadians, I'm the son of proud immigrants. My parents taught me the importance of hard work, of empathy, and of service. And they taught me that it's up to all of us to use our knowledge, our skills, and talent for the greater good. I'm proud to have had the opportunity to contribute to writing two years in this club's history. Thank you for the privilege, and honour to serve.

I now would like to take this opportunity to invite to the stage Dr. Bettina Hamlin, the President of Innovative Medicines Canada, to introduce our speaker. Thank you very much.

Opening Remarks by Dr. Bettina Hamlin, President, Innovative Medicines Canada
Thank you so much, Sal, and congratulations to your leadership here at the Empire Club. Minister Fedeli, Sal, distinguished guests, ladies, and gentlemen, good afternoon, everyone. It's a real pleasure to be here today. I'm Bettina Hamlin, I'm the President of Innovative Medicines Canada, the national association representing the innovative pharmaceutical industry, from small startups to large multinational companies. Our sector is an integral part of Canada's life sciences ecosystem, and we're extremely proud to contribute significantly to Canada's economy. In 2021 alone, our industry invested almost 3 billion dollars in R&D, supported over 100,000 high-value jobs, and directly contributed more than 16 billion dollars to the Canadian economy. And Ontario plays a huge role in this. In Ontario alone, our industry supported almost half of those FTEs, 50,000 jobs, and invested over 730 million dollars in R&D. So, we are committed to being solution-oriented partners in the Canadian healthcare, research, and innovation ecosystem.

And this spirit of partnership is more important than ever before, as we enter an unprecedented era in pharmaceutical innovation. As a scientist at heart, I am passionate about the innovation in the biotech and pharmaceutical industry. We have treatments coming to the forefront now that were unimaginable even five years ago. The convergence of digital technology, big data, AI, engineering, and biology—some of these innovations originate right here in Ontario, others from elsewhere in Canada, and the world. But no matter where these innovations originate from, they have the potential to completely transform and elevate patient care. If we can ensure that Canadians have access to the healthcare system, and that these technologies get into the hands of those who need them most—the patients, the healthcare providers—we can truly make a difference in the health, and well-being, and the prosperity of Canadians. And we must work together to make that happen. And our healthcare system needs to pivot, and change, to adopt these innovations. The status quo is not an option. Improving access to new medicines will not only improve health outcomes for patients, and reduce the strain on our healthcare system, but it will also help maximize the growth of the sector, investments, jobs, and clinical trials in Canada. So, we really welcome the opportunity to work across the full spectrum of stakeholders, to make sure Canada isn't left behind in all the positive momentum that's happening in the sector.

And now it's my pleasure to introduce an incredible champion for the life sciences sector, who recognizes the immense value of the sector, the Honourable Victor Fedeli, Minister of Economic Development, Job Creation, and Trade. Under Minister Fedeli's leadership, Ontario has witnessed record growth across key industries, including the automotive, tech, and manufacturing sectors. And just last week, at Bio, Minister Fedeli announced a 40-million-dollar investment to help Ontario life sciences companies innovate, grow, and compete in global markets. Our industry looks forward to continued collaboration with Minister Fedeli, as well as Invest Ontario, the Ministry of Health, and the many key players in life sciences here in Ontario, and across Canada, to make Ontario a premier destination for life sciences partnerships, and investments. Automotive sector, you have had your moment. It's time for life sciences. And we are keen to hear about Ontario's hard pivot to the life sciences. Ladies, and gentlemen, please join me in welcoming Minister Fedeli.

The Honourable Vic Fedeli, Minister of Economic Development, Job Creation, and Trade, Government of Ontario
You kill me, Bettina, you do. Well, you know you've got sponsors being Ford and Innovative Medicines, so I guess we're going to talk a little bit about auto, and a little bit about life sciences—so, buckle in, Bettina, for the first half. You know the name of the program, of course, is "Building Ontario: the Province's Manufacturing Renaissance." We like to call it in our office, "Unleashing Ontario," because today, Ontario is now the pointy end of the electric vehicle revolution worldwide. And this, the important point today is this did not happen by accident. I think that's really—it started for me, for us, it started when we saw Sergio Marchionne, the—now deceased—former chair of Fiat Chrysler, as it was called then, sitting on a stage with former Premier Kathleen Wynne, and they were having a conversation—and remember where we were at the time, in the auto sector? It was tumbling down wards, worldwide. Australia in 2017 made the decision, we're getting out of cars, period—no more auto sector in Australia. So, it can happen. We were headed that way in Ontario, as well. And the premier, after seeing a number of auto companies not, not expand to the next product line, said to Sergio Marchionne, "Are you going to be expanding at Chrysler? Are you going to be bringing a new product?" And he looked very quizzed at her, and he said, and I quote, "This is not what I would call the cheapest jurisdiction." And she pushed a little harder, as good premiers do, and Sergio Marchionne said to her, "Look, you need to create the conditions to be competitive." And then we got elected. And enter Premier Ford. That's it. That's the political end of it. I don't, I'm not a, not a big political guy. But the—so they're, although those are all factual, the rest are really just facts. Premier Ford comes in, and he said, "You know, buddy, let's go visit Ford, and Stellantis, and Honda, and Toyota, and GM. Let's go find out what the hell's happening here." And to a company, they all told us the same thing, "Look at Australia. Look what's happening in Ontario. The costs are prohibitive. I can't go back to my company in Japan, or my company in the US, and ask for a new product. You're just, you're just too expensive." So, the premier's instructions to cabinet, the very first instructions to cabinet: lower the cost of doing business in Ontario. Period. Let's, let's figure out how we're going to do this. He told us to pull on every lever that we have, to lower costs for businesses, so that we can save the 100,000 people who are working in the auto sector, to save Flavio's 700 parts-makers, and 500 tool and die and mould-makers, and Rod's 400 connected and autonomous vehicle companies in Ontario. This was critical, just absolutely at a critical point.

And I can tell you, I'm going to be very specific then, what we did—because this is really a magic formula—we looked at the WSIB, first of all: big line item on every auto company's balance sheet. And we found that WSIB was so stuffed with cash, so much money, we were charging businesses so much money, well beyond any financial requirement, well beyond any moral requirement, as well. So, we cut WSIB premiums for every business in Ontario by 50 percent. That's 2.5 billion dollars annually. That's a permanent cut. And that was the beginning of it—by the way, two years later, we still had so much money, we wrote checks to every business in Ontario for 1.35 billion, above and beyond the two-and-a-half billion annual cut. Then we put in an accelerated Capital Cost Allowance, that means you can write your new equipment off in year; billion-dollar annual savings. Lowered energy rates by 16 percent for industrial and commercial. 1.3 billion dollars. We did not go ahead with the previous government's tax increase on January 1; 465-million-dollar permanent annual saving. And then, we lowered the cost of the province's share of local property taxes by 450 million dollars every year, permanently. Red tape entered the picture, where we sat with the auto companies, and asked them what would it take—what do you need to hire more people? What do you need to expand? Red tape was important. We began working with them. All in, all in, these lower costs, these lower taxes, add up to eight billion dollars every year in Ontario. That is a permanent reduction, showing the Open for Business isn't just talk; it's the walk, as well. It's eight billion dollars in annual lower cost to doing business.

Well, from there, we wrote our Driving Prosperity Plan, which was the plan on how we're going to get the auto sector to expand. That year, Reuters, the news agency, announced that 300 billion dollars was going to be spent worldwide on the EV supply chain. And they also announced that zero was coming to Canada. There wasn't one penny designated in Canada. We were on the outs. So, the decision was made that day by Premier Ford, by our cabinet, that in Ontario, to save those 100,000 people who were working in the industry with no new product coming in a year, or two, or three, or four years, that we would build an end-to-end EV supply chain, right here in Ontario. Unprecedented, to start this from scratch, and do something brand new. 120 years, cars have been built the same way. Not much different from Henry Ford's day to today. Internal combustion engine, four wheels, and away you go, powertrain, and away you go. So, this was going to be our plan. We were going to shake up Ontario, shake up the industry. It's the biggest shake-up in the auto industry; we wanted to be part of it. We were going to start with the critical minerals, the processing, producing the chemicals, making batteries, making green steel, making parts for EVs, getting involved in the connected and autonomous sector, make the cars, recycle them—sell them, and recycle. That was what we were going to do. So, we began travelling the world, bringing this message of Ontario is Open for Business. We've got everything you need, we've got this auto ecosystem, we have 70,000 STEM grads every year, we've got land—serviced land, in many cases—we've got the talent, that, the raw talent.

Look at Toyota, for instance. JD Power named them thenumber one automaker in the world—not the number one Toyota plant; the number one automaker worldwide. You know how many auto plants there are? And it's right here in Ontario, is the number one plant. So, we take that stat in our conversations, and we tell every company, "We know how to make things in Ontario. This is where you need to be. You've got to be here." And the companies told us, as we went around the world, whether it was in Japan, or Korea, Germany, Europe, Switzerland, it didn't matter where we were. Unprompted, the companies would say, in this extremely tumultuous world—think of where we were, COVID was ending, but not really ending, Russia's illegal war in Ukraine, Israel hadn't happened yet, but China, the supply chain, all this nonsense, and these scary prospects worldwide, was really, really concerning—and the companies would say, "Except we look across the ocean, and we see this beacon of hope, this beacon of light, and it's Ontario." They know they can come to Ontario, they've got reliability, stability, predictability, certainty. They know what they're gonna get here. They all told us that.

And then they told us the second thing—now, I think they're referring more to us, versus US—it's safe. It's safe for our employees, it's safe for our executives, it's safe for their families. This is what they loved about it. And all of that turned into success. We started with the EV assembly. Ford, the very first announcement came from Ford. They said, "We like what you said, Premier. We understand those numbers. That eight billion dollars is real. We're in." And the others came in line; we have now turned around the EV assembly. Next, we needed battery plants. And through our many trips to South Korea, we landed LG Energy, here in Windsor, at a five-billion-dollar plant. And not to stop there, we spent more than—almost a year, almost, it was 362 days we spent with Volkswagen, and landed them here in Ontario. At that time, one of the largest deals done in the history of our province. Seven-billion-dollar plant, landed in St. Thomas for Volkswagen. And just to—[Applause]—yeah, yeah, that is a, thank you.

And it's interesting, just a little tidbit, if you want to know the scale of this thing being built in St. Thomas, it's 16,000,000 square feet. It will be the fourth-largest building on planet Earth when it's done; in St. Thomas, Ontario. And just when we thought it couldn't end, our five trips to Japan really paid off, as Honda announced a 15-billion-dollar expansion here in Ontario, which is now the largest, the largest in the history of the country. Single-largest business deal in the history of the country. And we did it, right here in Ontario. So, we have the auto assemblers, we have the three battery plants, and now, we're filling in the suppliers to the battery makers. We are doing the cathode—words we've never heard of before—cathode, anode, separator, electrolyte, copper foil, lithium hydroxide. All these words, phrases, they're all multibillion-dollar plants coming to Ontario. We've landed two cathode plants, we've landed a three, and a multibillion-dollar separator plant. Very soon, we'll announce a lithium hydroxide plant in Northern Ontario, so the North will be part of the auto sector for the first time in 125 years. So that, as a Northerner, that's very exciting.

So, add it all up. We've landed almost—in the auto sector—almost a billion dollars a month. That's our record. That's the record of Premier Ford, and our ministry, and our government. It's 43 billion dollars, with more billions yet to come. These are all in the pipeline, and some are just waiting for dates to announce; others, we're still closing, or working on the term sheets, but we're at 43 billion dollars—from zero, dead zero, to 43 billion dollars in four years. And that prompted Bloomberg to announce that Canada, ostensibly Ontario, is the number one global EV supply chain jurisdiction. We are now number one in the world, which is remarkable.

So, this, this eight billion did a couple of other things. It's really interesting what happened—and I was telling my friend Sarah Letersky that I'm writing a book about it, called "Unleashing Ontario"—two things have really interesting happened. Number one, by lowering the cost of doing business in Ontario by eight billion dollars, you, the business community, have hired 750,000 new workers in Ontario in our six years—it's 130.000 this year alone. Absolutely spectacular, what's happening. But this is the most interesting point: revenue. So, don't forget, we're now taking an eight-billion-dollar-a-year hit. It's interesting what happens to revenue when you put 750,000 people to work. Our revenue in Ontario, with that eight billion dollar annual hit, went from 150 billion the day we were elected; today is 214 billion dollars in annual revenue. 64-billion-dollar increase in revenue by lowering taxes. You know, that's our philosophy, right? You need to raise revenue? You lower taxes. That's always been our philosophy.

Here's a couple of other stats, just general stats: in 2023, Ontario brought in 11 billion dollars from 137 FDI projects, creating, just in FDI, 12,000 jobs; from 2018 to 2023, Ontario created more jobs from FDI than any US state, or Canadian province—it's fascinating what that international capital that's coming in will do, this 90,000 jobs created from FDI. The US Bureau of Labour Statistics in January showed that Ontario, in January, for 2023, Ontario created more manufacturing jobs than all 50 U.S. states combined. That's, that's what's happening in Ontario. Look out the window: 221 active cranes are here in Toronto, alone. That is more than every other major city's crane count combined, in, in all of North America. There's never been a city with more than 60 cranes, ever, in the history of North America, and now we have 221 here in Toronto, alone. And as I end the stat part, and move on to the pivot—for Bettina—just one more stat. When we took office, I mean the US is our largest trading partner. We are their third-largest, Mexico, China, Ontario. That's the pecking order for U.S. trade. We were at 390 billion dollars; this year, we're at 494 billion dollars. We're up over 100 billion dollars in trade with the US. So, we, we've done this in EV. And Bettina, and others in the life science sector, you've heard me—seven speeches in the last two weeks—say, "And now, we're pivoting to life sciences." So, there you go. There's your official pivot.

So, EV had a window. It needed to be done that day, that week, that month, that year. And now, that window is closing, because everybody needs a dance partner—they've got mandates to hit, 2027, 2028, so you know, we'll wrap up where we are. But we already have this tremendous life science ecosystem. We've got all the strengths, all of that, from the EV side, we have that, we have that in life science, we have the people, we have the 70,000 grads, we have all of these things. Ontario, we're the place, we're the birthplace of insulin, we are, we're the first cardiac pacemaker was discovered, we found the gene that cracks cystic fibrosis, we're using stem cells to cure diseases. This is what we do in Ontario. And now, we want to make sure that Ontario remains at the forefront of innovation.

Now, over the last few years, Ontario has attracted four billion dollars in life science investments. Some include Roche's 500 million dollar, three hundred highly skilled life science jobs, 500 million by the subsidiary of AstraZeneca, Alexion, to build a research hub. We were just cutting the ribbon at Sanofi's 800-million-dollar plant, as we looked at the next door building, the 925-million-dollar flu vaccine, flu zone, for us seniors, that's being created. And thanks in part to our province's life sciences strategy, which is called Taking Life Sciences to the Next Level—that is, by the way, the first life sciences strategy in over a decade—we will establish Ontario as a global manufacturing, bio-manufacturing, and life sciences hub. You know, we have, already, 72,800 employees in life sciences, 2000 life science firms here in Ontario. And through our strategy, we plan to grow this, grow the number of high-value jobs to 85,000 by 2030. We have a target, and we're going to hit that target. And we've been working very closely with industry leaders—many of you are in the room here today, and thank you—in our Life Sciences Council that was created, and they're advising on phase two of our strategy, and that is something that will be released in the very near future. So, thank you, life science folks, for all of your great work.

Among the recommendations was greater access to critical capital for life sciences companies to start up, and scale up. And as Bettina said, this is why we announced a 40-million-dollar expansion from the Venture Ontario Fund to focus solely on the life sciences sector. Thank you, Venture Ontario, here, today. Our latest tool in the suite of supports also includes 15 million dollars in the Life Sciences Innovation Fund, to help entrepreneurs bring ideas from the lab to the market. And finally, we've added 100 million dollars to Invest Ontario this year, to help attract more international investments in key sectors like life sciences. Now, I've seen their pipeline, I see it. I review it every week. It's also pivoted very hard from the auto sector to almost exclusively the life sciences, and I'm so excited to be able to land some of those, and announce some of those in the, in the fall. So, we're excited about the successes that we've achieved together. We look forward to growing our economy together, to attract these investments, to create these jobs, and we look forward, now, Flavio, to this fireside chat. That's it. That's all you get.

Flavio Volpe, Director, Empire Club of Canada
Good speech.

The Hon. Vic Fedeli
How you doing, buddy?

Flavio Volpe
Yeah.

The Hon. Vic Fedeli
You gonna give me a hard time today?

Flavio Volpe
Long time no see. Long time no see. Pivots. We're talking about pivots. We're not talking about cars—which is new for us. It's a pivot for us.

The Hon. Vic Fedeli
Yeah, it is a pivot for us. We had one of these the other day, on cars.

Flavio Volpe
Your great chronology of what this government decided to do in automotive, and then executed, defended, and then scoured the world for. It's part of the reason why the auto sector was able to pivot during the pandemic, to make all these medical devices and goods that the people needed at the time. But we're talking about life sciences today. Let's talk a little bit about how you're going to execute that pivot. You know, in, in automotive, we know what the capitals are, and I bet you, you've got elite status with Air Canada, at least. Talk, talk about chasing those investments in life sciences. How does that work? How do the, what's the gestation period? Give us a sense.

The Hon. Vic Fedeli
Well, it's, it all began with the, with this strategy, and this Life Sciences Council that we have—and as I said, many of the people on the Life Sciences Council are here in this room—and we're ever so grateful for the wonderful work that they've done, and the recommendations to date, and the recommendations that will come out and, and as the, the phase two gets published. We look to those leaders to tell us, how do we do this? You know, I wanna, I've said to everyone of you—I want to be as comfortable talking about life sciences as I am about auto. So, school me. Tell me what we need to know. Teach me, from every—whether it's Med tech or pharma, just continue to teach me, so that we can get out in the world. And we've already had many trips to Switzerland and, and other places in Europe, visiting with, with life sciences companies. We've landed four billion dollars so far. And I expect that number to just start to ramp up now.

Flavio Volpe
Do we have the people? Do we have the right people, and the right posture?

The Hon. Vic Fedeli
Yeah. I think first of all, we have the right leadership—and that's the important part—the right, the right graduates, I think we're in great shape, thanks to the university system that we have, the college system that we have; 70,000 STEM grads a year, they're all coming out hungry, looking for work. And, you know, whether it was in the auto sector, or now in the life science sector, I think this is just absolutely perfect conditions. The ecosystem is already here, it's not that we have to start from scratch. These companies have built it on their own, over the last generations. So, this is, we're, we're gonna, you know, get on the shoulders of what they've built, and take it, take it upwards.

Flavio Volpe
It's an interesting industry, and an interesting prospect. You know, we've got one of the world's greatest medical clusters in the world. We're just down the street from world-famous Hospital Row. You're talking about finding the companies to invest in Ontario for medications and, and products in that space. But you've also got to work with the Minister of Health...

The Hon. Vic Fedeli
Yeah.

Flavio Volpe
...to make sure that they're available to Ontarians. You know, there's no sense in getting, getting to the head of the pack, and then not being able to apply them locally. Talk a little bit about that coordination between your ministry, and the Ministry of Health.

The Hon. Vic Fedeli
We have been meeting with the premier—Minister Jones, myself, the premier—frequently, on our pivot to life sciences, and me taking back the concerns, and the issues, and the challenges we've already heard from the sector—time to list, I can go on with that, and, and start going through the list of, of issues that we've received—and we're presenting that to the premier, and to the minister, so that everybody has a full understanding of the challenge ahead of us. It's not going to be easy. But we, we see this as just a natural progression. You know, if, if our time to list isn't world-class, then how do we get it to be there? Those are the, those are where we'll take our practical discussions to the challenges that are ahead of us.

Flavio Volpe
You know, when we talk about best practices, and we think about things like time to list, how important that is, what are we doing? Are we—are there other clusters that we're learning from? Are there benchmarks? You know, I think from my days in government, we used to look at the VA in the US to say, you know, are there some guidelines there? How are we looking at those processes?

The Hon. Vic Fedeli
Yeah, we are doing exactly that. I was in Denmark only a short while ago. Of course, we visited with companies like Novo Nordisk, who make most of the insulin today. It started off as a charitable move with the founder, hundred, hundred-plus years ago, whose spouse had diabetes and, you know, it's become this massive, world-respected company. But we went from there to all of their life science organizations, and asked them, what are you doing? What did you do? How did you get there? What were your roadblocks? And it's amazing, that, the sheet that they had, we could have switched roles and given the same speech to each other—it was fascinating to know that our issues are everybody's issues, and we've got to work to resolve some of them.

Flavio Volpe
So, your government did something earlier on in, in your tenures to establish Invest Ontario.

The Hon. Vic Fedeli
Yeah.

Flavio Volpe
I think we learned lessons from other places like Pro Mexico, at the time...

The Hon. Vic Fedeli
Yeah.

Flavio Volpe
...on, on how to concierge investment attraction. Talk a little bit about how you see their role in this, how they work with your ministry, and work with stakeholders.

The Hon. Vic Fedeli
Yeah, Invest Ontario is our investment attraction arm. So, as I said, they just got a, a top-up of 100 million. And they have, you know, 40 or 50 people today, they're working worldwide. Many times, we go on our meetings overseas together. We were just in San Diego at Bio, sat, sitting beside me was Garrett, from Invest Ontario. So, they are—they do all our due Diligence. What we do, sales, a little bit of each. We each know what each other is doing. They report their pipeline, basically, every week—and we get a spreadsheet with the pipeline, so we know, you know, who's doing what. They understand our position. They've always had three mandates, advanced manufacturing, life science, and tech. So, this is not, no news for them. So, it's really a hand-in-glove—and on that metaphor, they offer our companies, literally, a white-glove service. This is exactly what they do. When a company's made the decision, it isn't just, "Sign here, and enjoy yourself." It's—well, with Volkswagen, as an example, we meet almost every month in person. They fly from Germany here, and we meet to go over the project. That's what you need to do on a seven-billion-dollar project. It's that white glove service—zoning, permitting, any issues that come up. That's the same we offer our tech companies, and that's the same that we offer to our life sciences companies. We're there, whether it's bringing in young graduates from around the world, bringing in our university graduates using the Mitacs program, using our training programs from the university. We, we work with them until they're satisfied that they don't need us anymore. We, we just don't abandon them. It really is a total white-glove service.

Flavio Volpe
So, let's talk a little bit about it—and I think the audience here can forward some questions to this little tab that I have—let's talk a little bit about the strategies in life sciences. And I think also in automotive, but stick to life sciences. So, you created things like the Advanced Manufacturing Council...

The Hon. Vic Fedeli
Yep.

Flavio Volpe
...to bring these things together. Tell me a little, tell us a little bit about how that works, and when we can expect the findings or, or, or how we're going to share what councils like that come up with on strategy.

The Hon. Vic Fedeli
Soon.

Flavio Volpe
Yeah.

The Hon. Vic Fedeli
The Advanced Manufacturing Council, like the Life Sciences Council, is industry-led. I don't sit on it. Politicians don't sit on it. We have industry experts, industry associations, who are leading the way. They're helping us on the advanced manufacturing side. We expect the report to come out very shortly. That, that report I have seen, and read, as well. And our life sciences—again, I can't say enough about the people who have picked up the mantle on the Life Sciences Council. And as we go into our phase two, we're very excited.

Flavio Volpe
And you talked a little bit about how the world currently is evolving—the geopolitics, and how they affect, who's partnering with who.

The Hon. Vic Fedeli
Yeah.

Flavio Volpe
And you know, in, in this space, especially some of the most advanced nations and players are on the other side of the equation.

The Hon. Vic Fedeli
Yeah.

Flavio Volpe
You know, what, how do you balance that when you're getting—when your team finds, and/or you see that in specific verticals, the opportunities are with countries where they're maybe unstable, or there's some political risk, or maybe not on the same team North America that we're on.

The Hon. Vic Fedeli
Well, we bring out all the guns. So, first of all—and I'm, I'm dead serious when I say this—Premier Ford is the best closer anywhere. When we're getting close, and we need an extra nudge, we bring him in. And in the Premier's house, his sunroom in the back, they get the special, they get the special treatment. And when that big mitt comes across to shake their hand, you know, that's how the deals get done—am I in trouble for that? I don't think so. Nothing I haven't said to him, and to his face. But we look at a couple of our advantages. One is this right here: the Health Card. You know, we look—for Volkswagen as an example, the decision, after, you know, a 90-country tour, got down to us,and one place in the US. It came down to two fine points—this card didn't help their capital. But this card, versus what they would pay their employees in the States, 40 million—for, for 3000 employees—it's 40 million dollars a year in operating, less in operating, because we have a Health Card in Ontario. So, that's in our matrix. It wasn't in the matrix that, that Volkswagen had. They had a US, a US site-selector, and, you know, I said, "You're missing two really important things here. Where's the Health Card?" "Well, it's the same everywhere." "Yeah, no, buddy. It's not the same everywhere—and let me school you." And so, we got that. It was a lot, it was like half a year of work to get that in the matrix. And it was a 40 million dollar bonus for us.

The second thing that wasn't in the matrix is the arbitrage between the Canadian and American dollar. You're going to build something in this, in Canada—Volkswagen doesn't make a car here—a hundred percent of their batteries are for export, which we love the export business. So, the same thing for the life sciences. Come here, use the arbitrage, make things here in Ontario, and, and ship to the States. You're making 30 cents on the dollar the day it leaves the door. That's a really important one, and it took a long time to get that, that dollar value put in the matrix as well. We've got 51 tariff-free agreements around the world. You can make things here, and ship to your next-door neighbour back at home that you haven't got a trading agreement with. I mean, it's, it's really been a, a bonus. We, we pull out all the stops. Every subtle difference you could imagine, we put a dollar value to it and, and, you know, ram it in their face—in a nice way. In a very gentle way.

Flavio Volpe
That's the headline, I think.

The Hon. Vic Fedeli
Rammed it in their face, that's how we got all that business. I get myself in trouble every day, but that's okay.

Flavio Volpe
Okay. Let's, let's talk about cars, for a second.

The Hon. Vic Fedeli
Oh my God, this is going to tick off Bettina.

Flavio Volpe
This isn't my question. This is about how you prep a market. And so, other jurisdictions wanted to be in the same business. This is about...

The Hon. Vic Fedeli
Yep.

Flavio Volpe
...how you decide how you want—you want to be in the same business. Some of those jurisdictions are in Canada, in Ontario, this government pegged its play on the manufacturing side...

The Hon. Vic Fedeli
Yeah.

Flavio Volpe
...we're gonna invest in the manufacturing side, and we're going to prep the manufacturing side. Other jurisdictions have prepped the market side; they said, "Well, we're going to subsidize the market, to make the vehicles more affordable." Talk a little bit about how you see that going forward, as we pivot to other sectors that are very fertile for new investment, and we're going to be making cars here in Ontario. Give us some thoughts on the market.

The Hon. Vic Fedeli
So, Flavio's referring, of course, to the fact that we no longer have an incentive for you to buy an EV car—because, at the time, and still today, every dollar that's paid out by the government in an incentive is to buy a foreign car. We don't make EV cars in Ontario yet. We make one EV truck, the BrightDrop delivery truck, but you're not getting an incentive to drive a FedEx van. And so, that's why we took that away. We took that away, and invested that money in the workers. Again, we needed to save the 100,000 jobs, we needed every nickel that we could. Rather than pay you to buy a foreign car, we wanted to pay our workers, and our businesses, and our manufacturers to build those cars here, and make those cars available. Now—[Applause] yeah, thank you, yeah, I like that, one hand clapping, I like it, thank you—so, on that note, you know, Québec, for instance, is now removing their incentive as well. I think it's in a couple of years. They've gone from, you know, one level to another level, to zero in a couple of years.

Flavio Volpe
But one of the first meetings we had was about, how do we do this together? And you may not remember, but we said, from the manufacturing side, please take that money, that 14,000 dollars I can put on a Porsche 918 Spider...

The Hon. Vic Fedeli
Yeah.

Flavio Volpe
...and put it into Oakville...

The Hon. Vic Fedeli
And that's what we did.

Flavio Volpe
...and we can supply Oakville. And I think it's....

The Hon. Vic Fedeli
That's exactly what we did. So, it's blame Flavio.

Flavio Volpe
Yeah. Yeah. Well, I wanted to put on the record that the industry appreciates that we refocused that money. We'll find different ways. The products that we'll make over the next few years will be, will be compelling.

The Hon. Vic Fedeli
These are multibillion-dollar companies making multibillion-dollar decisions. The sales, you know, that's, that's really, that's on them. We'll, we'll, we'll get them made in Ontario, and the rest has to happen.

Flavio Volpe
One last thing, before everybody gets on their bicycles and goes back to work, here—don't we all ride bikes? Is that why we...

The Hon. Vic Fedeli
I took the subway. Sorry, I did. Don't tell my wife. She doesn't want me doing that.

Flavio Volpe
We're pivoting hard to, to, to, to life sciences. And we talk about industries like the one I represent has been here 100 years. But, you know, so is the life sciences sector.

The Hon. Vic Fedeli
Yeah.

Flavio Volpe
And one of the things that I think there is an advantage in life sciences—and maybe you can help bubble out a bit—is on the automotive sector, all the automakers are foreign automakers. We love them, they're well invested in Canada; those decisions get made elsewhere. There's a bit more of a mix in life sciences. Canada has a few more arrows to shoot—no pun intended on my Project Arrow....

The Hon. Vic Fedeli
Big pun intended.

Flavio Volpe
No, no, actually. It was great that I said it to you, here, because we'll—anyway, talk a little bit about those Canadian players, those Ontario-based players, that are key to making this strategy bear fruit.

The Hon. Vic Fedeli
Yeah, it's important. But you heard my statistic on FDI: this is going to be big job creation, as well. This is everybody in the pool. We need, we need everybody working towards the same goal. I think back, you talked about the auto sector coming, coming to life for the PPE, during the pandemic. This is a couple of stats. I just want to share this one, because it's an interesting one, that has to do with that. The pandemic hits, we opened the cupboards, they're bare. Nothing's made in Ontario. Virtually nothing was made in Ontario. No masks, no gowns, no face shields, no ventilators, nothing. Flavio, and the, got the auto sector making ventilators—thank you to all the companies, Ford and GM, and all of the companies, and all of the parts makers. But today, 74 percent of all PPE that the province buys is now made domestically—almost all of it, right here in Ontario. That, that's permanent, right? We're doing, we're building a factory together with a company in London to make nitrile gloves here—they're all made in Malaysia. They're going to make nitrile gloves here. You could imagine that. It's going to be high-tech, very high-tech—because in Malaysia it's labour-intensive. That's how they can do it. They can just have 100 people doing the small things. Here, it's all technology-driven. Once that plant opens, and we begin buying the gloves there, our number will go, now, to 92 percent of everything that we consume in the PPE field will be made here. And that's really an exciting, and exciting stat to note.

Flavio Volpe
That's a great anecdote to end on, here. I think what we've learned over the last few years, especially with the partnership with this government, is that there's a dignity in making things...

The Hon. Vic Fedeli
Yeah.

Flavio Volpe
...and that you can outsource the containers you get your takeout food in. But there are critical industries that help build careers, and help build provinces, and help build countries. You've sought them out, you've sought counsel, you've put your chin out, and gone out around the world to land those mandates here, and then defended them, and then helped to establish a sustainable operating environment. And it's to be—we should congratulate you. We should thank you. Because every government before you has tried that, earnestly. But when I look at the scoreboard, you guys put the numbers up. Thank you.

The Hon. Vic Fedeli
Thank you. Thanks, Sal. I enjoyed your speech so much. I really did. That was just so moving, and so wonderful. Your parents would be so bloody proud of you, pal.

Note of Appreciation and Concluding Remarks by Sal Rabbani
Thank you, the Honourable Vic Fedeli, and Flavio Volpe, and thanks again to all our sponsors for their support, and everyone joining us today in person, or online. As a club of record, all Empire Club of Canada events are available to watch, and listen to on demand on our website. The recording of this event will be available shortly, and everyone registered will receive an e-mail with the link. Thank you all for your participation, and support. Have a good afternoon. This meeting is now adjourned.