By Paul Knowles
Mike Murray could be called an optimistic pragmatist – he’s enthusiastic about the overall good economic news and forecasts in Waterloo Region, but also quick to point out the challenges.

He produces some charts demonstrating the current economic state of the Region – Waterloo’s Gross Domestic Product (GDP) per Capita was $51,300 in 2016, well ahead of both Ontario ($45,500) and Canada ($49,600). Forecast GDP growth for the region, according to the Conference Board of Canada, also leads the other two; Waterloo’s figure is 2.3%, compared to 1.8% for the province and the nation. And the Regional unemployment rate in 2017 is lower than the provincial and national levels – 5.1%, compared to 6.0% and 6.3%.

“Waterloo Region is leading the way,” he says. “This is a pretty healthy, thriving economy.”

But he’s not looking at the stats through rose-coloured regional glasses. Murray adds, “The one thing that concerns me is that this economic prosperity isn’t necessarily shared evenly. There are groups in the community that aren’t benefitting. There are some people being left behind.”

He has those stats, too – the Region’s Ontario Works caseload is “about 30-35% higher than it was pre the 2008 recession.”

Mike Murray lives and breathes this stuff – along with everything else that is important in Waterloo Region. That’s his job – he is the Chief Administrative Officer of the Regional Municipality of Waterloo, a position he has held since 2004.

He’s actually been with the Region since 1992; he came first as manager of engineering and planning in the water services division, and moved up the ladder at the region until, as he explains in a rather self-deprecating way, “I was in the right place at the right time” when the previous CAO retired.

Engineer by training

Murray is an engineering grad. He was raised in Toronto, studied civil engineering at McMaster University in Hamilton, then did graduate work at the University of Toronto, then headed north and west, spending two years in Inuvik and three more in Winnipeg.

Then, he says, he made two career decisions. “I wanted to work in public service, and Waterloo Region was top of my list.” He got his wish. “It’s a pretty good career,” he says.

“The one thing that concerns me is that this economic prosperity isn’t necessarily shared evenly. There are groups in the community that aren’t benefitting. There are some people being left behind.”

As CAO, Murray is ultimately responsible for the entire gamut of regional concerns, including Social Services, Public Health, Transportation and Environmental Services, Planning, Housing and Community Services and all related corporate support functions.

Infrastructure

Exchange asked the CAO about the current state of the Region’s infrastructure. Murray noted that while the term often is seen as referring to municipal water and road systems, it encompasses a lot more than that – “roads, water, waste water, waste management, and buildings… and we have hundreds of buildings, including a pretty significant collection of affordable housing.”

All of this adds up – to about $300 million a year spent on infrastructure, according to Murray. And that’s not quite enough. “Overall, the state of our infrastructure is pretty good… not bad… okay,” he says. “Somewhere in the middle toward better on the spectrum of awful to great.”

The biggest challenge, he admits, involves the older parts of the urban areas of the region. “There are older parts of the community, where the infrastructure is 100-plus years old; water and sewer pipes, for example. This is like many other communities.”

At the other end of the age scale, there are parts of Waterloo Region that are “growing fairly rapidly, so we have to build new infrastructure.”

He compares the Region to almost entirely new communities, like GTA urban areas, and to older communities with little growth, like London, pointing out that here, “we have a dual challenge.”

“Every year, we’re talking about the challenges of infrastructure funding,” he says. “We’re making progress, but we’re not there yet – we have a gap of about $40 million a year” of that $300 million annual expenditure.

“Overall, the state of our infrastructure is pretty good… not bad… okay. Somewhere in the middle toward better on the spectrum of awful to great.”

That spending is expected to continue – the Region has committed to a $3 billion, 10-year capital program.

The short-fall is being funded through debt, says Murray, and he explains that while funding new infrastructure through debt is a good investment – because those areas will produce development charges and property taxes – the same is not true for aging infrascture.

Fed/prov funding

Should the province and the federal government be carrying more of the infrastructure funding load? Almost every municipal official in the country will say yes, and Murray is numbered among them.

He points out that “Municipalities believe the federal and provincial governments have more capacity to invest in infrastructure.”
Municipalities basically have only three sources of funding – property taxes, user rates, and development charges. That means, “there are relatively few sources to pay for infrastructure. None of these really grow with the economy, compared to sales tax and so on, which grow as the economy grows,” and do not fund municipal projects.

However, he says, “the economy of the country is increasingly urbanized,” and support for infrastructure will facilitate economic growth – a plus for all levels of government.

Murray acknowledges that, “we get some federal and provincial funding,” in the form of gas tax revenues – about $16 million a year from the feds, and $10 million annually from the province. The current provincial government has made a promise to increase the provincial gas tax contribution, starting in 2019 – but there is a provincial election in the spring of 2018, so that is not carved in stone.

“Business does not like uncertainty” especially as they compete in “an increasingly complicated global marketplace.”

Murray is also hopeful that the Region will be able to obtain some soon-to-be released federal infrastructure funding. He’s cautious in his summation: “We have an infrastructure gap. The federal and provincial funding is helpful. More would be even more helpful.”

Talent attraction

There’s another action on the part of the province that would also be helpful to the Region; in fact, Murray and his regional colleagues might well argue it is essential – two-way, all-day GO service between Toronto and both Kitchener-Waterloo and Cambridge. And he insists that one of those options is not enough on its own.

This is not about convenience – Murray says the key is bringing needed workers to the Region. “Talent attraction is a huge challenge,” he says. Most people in the Region who want to work, are working – “We have a very high employment participation rate”, so the challenge is two-fold – we need more workers, and in our advanced manufacturing and high-tech sectors, we need properly trained workers. “Finding the right people with the right skills is a challenge.”

Some of those people live in Toronto or other cities; we need a way to get them to and from work in the Region. He acknowledges that the province “recognizes that it’s an issue” and have made a commitment to all-day every-day GO, but Murray notes that “there are a lot of practical constraints that are expensive.”

The other side of that talent attraction coin, the CAO points out, is continuing to “create a community where these people want to be here…. The kind of place where people who could live anywhere in the world want to live here.” That covers a lot of areas, he admits, and he says, “with arts, culture and attractions, we still have work to do. Arts and culture – in terms of creating a sense of place, it is important, and it’s a gap.”

NAFTA questions

Murray says that the business community in the Region – like other centres across the country – are facing the challenge of uncertainty about the future of the North America Free Trade Agreement, a pact that US President Donald Trump seems willing to jettison.

The biggest current issues, says the CAO, is “uncertainty. Business does not like uncertainty” especially as they compete in “an increasingly complicated global marketplace.”

“With arts, culture and attractions, we still have work to do. Arts and culture – in terms of creating a sense of place, it is important, and it’s a gap.”

This state of uncertainty is worrisome, Murray believes, because it can cause business to stall, waiting for the outcome. That, he maintains, never works: “If we’re standing still, we’re falling behind.” That’s not only true of individual businesses – it’s especially true of municipalities. He says, “Other regions are ramping up dramatically. If we’re going to stay competitive, we have to continually be asking, ‘How do we do more?’ If we think we’re okay, we’re going to be left behind.”

The mouse and the elephant

There is much focus on cooperation between Toronto and Waterloo Region, dubbed the “Toronto-Waterloo Corridor.” Murray acknowledges, “it is a potential risk” in associating with such a large partner, but believes “on balance, there is potentially more benefit.”

He suggests that “to some extent, the economies are complementary.” Waterloo has a unique, “rich start-up culture” with “a ton of support,” rooted in “the relationship between government, the private sector, academia and not for profits.”

Toronto, he says crisply, brings “scale, and money” to the table.

He sites two examples of cooperative advantage, neither of which would be doable for Waterloo Region on its own – the short-listing of the corridor by Amazon, and the possibility of the corridor becoming one of the federally-designated “superclusters”. “We never could have played in that space on our own,” he says.

Local cooperation

Murray has had a front-row seat on regional relationships since 1992. He says, definitively, that, “with the municipalities among themselves, with the region and the municipalities, and with the Waterloo Economic Development Corporation – these working relationships are as good as they have ever been in my 25 years.”

He says that local leaders have come to realize that “we are competing on a big, global stage, and we have to cooperative successfully… We’re doing well. The results demonstrate that.”

Light Rail Transit

No interview with the CAO of Waterloo Region could omit discussion of the ION Light Rail Transit system. On this, Murray sticks to the script, with one caveat: “We continue to target late spring of 2018” for the operational launch, but “it’s dependent on getting vehicles from Bombardier. If Bombardier steps up and delivers vehicles in a timely way, that’s feasible.”

Like other Regional spokespeople, Murray points out that moving people via the ION is just one of two important goals of the LRT – the second, and perhaps more important, involves urban planning. It’s key to revitalizing the city cores, to producing multi-use urban areas where both business and residential use are side by side.

“Other regions are ramping up dramatically. If we’re going to stay competitive, we have to continually be asking, ‘How do we do more?’ If we think we’re okay, we’re going to be left behind.”

He pulls out another chart: the LRT has been the major factor in attracting $2.1 billion in building permits for new construction (2011-2016), and there have been $5 billion in property transactions, with a $600 million increase per year in the assed value of properties.
“And that,” he adds, “doesn’t really capture what’s in the pipeline.”

He says, “Everything that we hoped and anticipated would happen, has happened, and faster than we thought.”


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ISSN 0824-45
Copyright, 2018.