Go to the Globe and Mail homepage

Jump to main navigationJump to main content

The long, slow decline of the nation's industrial heartland Add to ...

With a pivotal election fast approaching, The Globe and Mail’s Adam Radwanski travels to the Achilles’ heel of Ontario, the southwest. Once the nation’s industrial heartland, it is in an economic tailspin and battling to find a new game plan that will keep its children at home – and reinvent a vital region. Photography by Ian Willms

A back lane in Windsor’s Ford City neighbourhood: Since the crash of 2008, the auto industry has rebounded but not the economy of the city it was built on it.

‘My dad worked at Chrysler, and he made a call to get me into Chrysler,” Ken Lewenza says, recalling his introduction to the auto industry at the age of 18. “I did the same for my son, and now that’s it.”No one can make that call for his granddaughter, even if, until a few months ago, Mr. Lewenza was president of the Canadian Auto Workers, because she is at the end of the line. Not so long ago, the Big Three auto companies were the relatively stable backbone of Windsor’s economy. Now even Chrysler, the last to maintain any significant local presence, is down to a work force of about 4,600 – and nobody is especially confident about how long those jobs will be around.

About the photos

I was raised in Kitchener and spent summers playing in vacant lots, balancing on rusted railway tracks and throwing rocks at abandoned factories. The three days I spent photographing the ghosts of Ontario’s manufacturing heyday gave me a chance to reflect on my hometown. I shot in black and white to express the nostalgia that came to me when I saw places like the shuttered GM plant in Windsor and the streets of London and Kitchener. I wanted to offer the viewer a small part of the emotions felt by someone who grew up in these places. I also worked to make a connection with the next generation growing up in struggling industry towns. These are the kids who were raised on blue-collar incomes but will likely never experience a day of work on an assembly line.

-- Ian Willms

Having retired last fall, shortly after the CAW became part of Unifor, the Canadian private-sector’s biggest union, Mr. Lewenza is back full-time in its hometown. And the uncertain future of the city and its surroundings, home to more than 300,000 people, across the river from Detroit, is enough to keep him up at night.

To reinforce his concern, he produces a pile of printouts chronicling an exodus: With few prospects of secure, well-paid jobs, young people are leaving.

The problem isn’t limited to Windsor. In 12 days, Ontario goes to the polls, with Kathleen Wynne’s Liberals trying to fend off the Progressive Conservatives and New Democrats. For whoever wins, no part of the province presents more of a challenge than the southwest, and it isn’t just the young feeling the pain.

In Windsor, all ages share the pain. While young people must look elsewhere for work, older ones don’t know where to look at all. They argue that, in some ways, not getting a spot on the assembly line – and the sense of self-worth that comes with the pay – is less traumatic than having one cruelly taken away.

The impact can be devastasting, says John Toth, a resource-development manager with the United Way of Windsor-Essex.

He has seen how levels of depression, addiction, domestic assault and divorce rise appreciably among people who lose jobs they thought they had for life and can find nothing remotely comparable with which to replace them.

Mr. Toth knows the story all too well. In 2010, he was being paid about $28 an hour to make axles for minivans when Martinrea International closed its Fabco plant after 45 years. However, his experience on his union’s labour-adjustment committee helped him land a job with a rare vantage point from which to track the fate of others less fortunate.

Today, only half of Fabco’s roughly 300 employees are still in the work force, Mr. Toth estimates, with maybe 60 earning “anything close to what they made before.”

Even more grim, he adds, is what happened when another plant about the same size shut down: In a matter of months, three of the employees who were laid off had taken their own lives.

An economic nightmare

Drive along Highway 401 through the relentlessly flat farmland between Windsor and London, stop in places such as Chatham and St. Thomas, turn off one way to Sarnia or the other to parts of Niagara not on the tourist trail, and you will keep hearing about a lack of decent employment.

With the very odd exception, the aging rust-belt towns that fill this region – whose roughly two million residents give it a population bigger than all but three provinces outside Ontario – are living an economic nightmare.

For much of the country, the inability of its biggest province to recover from a recession that hit almost six years ago can be baffling. How has the place that is home to both Canada’s ever-growing financial capital as well as its capital city been so supplanted by the West as the nation’s economic engine that it now has by far the biggest budget deficit and an unemployment rate persistently above the national average? How has Ontario, once the proud source of tax dollars that Ottawa gives to have-not provinces as “equalization,” become a recipient of such payments?

Generations, a public sculpture in Windsor’s Ford City district, depicts auto workers doing a job that was once the backbone of the provincial, as well as local, economy.

The answer, in large part, can be found in the region that lies between Toronto and the borders with western New York and Michigan. Once the industrial heart of the nation, it seems too big to fail – even if, with the notable exception of the Kitchener-Waterloo technology hub, it has been doing precisely that.

The problem goes well beyond the auto sector. In the past decade, more than 25 per cent of the region’s manufacturing jobs have vanished – more than 30 per cent in London as well as Windsor.

Regions in Canada with highest rate of unemployment

  1. Peterborough, Ont
    11.6%

  2. Saguenay, Que
    10.1%

  3. Windsor, Ont
    8.4%

  4. Sherbrooke, Que
    8.3%

  5. St. Catharines-Niagara, Ont
    8.2%

London businesses that have pulled up stakes in the past few years include Caterpillar Inc., which employed 450 people making diesel locomotive engines, as well as one example of how the region’s hefty agricultural sector is not immune to the malaise.

Not only has Kellogg Co. shuttered its 550-employee cereal plant in London after 89 years of operation, to the south, H.J. Heinz is in the midst of leaving Leamington after serving even longer as the biggest employer in the “Tomato Capital of Canada.”

At the end of June, it will turn over its sprawling plant to a group of Canadian investors who will continue to pack some products for Heinz – but employ perhaps one-third the former workforce of 700, be supplied by just 10 area farmers and pay municipal taxes based on half the property’s former $20-million assessment.

As a result of the region’s decline, only about 55 per cent of people 15 and older have jobs (versus roughly 62 per cent nationally), and many of those jobs are temporary. Often people just pack up and leave, or encourage their kids to do so. As a result, there is now more migration from Ontario to other provinces than vice versa.

But not all of those who stick around become shells of their former selves. Another response has begun to surface, one that offers the closest thing to real optimism for the future – and one that politicians of all stripes would do well to take seriously.

Bringing us to our knees has almost been a gift to us. Because we had to change.
Karen Behune Plunkett, head of a regional innovation centre

Some civic leaders, entrepreneurs, academics and even the odd organized-labour stalwart believe that, in one sense, the brutal downturn has had an upside: It demonstrated that the old economic model was unsustainable, that a fundamental change was overdue.

“Bringing us to our knees has almost been a gift to us,” says Karen Behune Plunkett. “Because we had to change.”

The head of a regional “innovation centre” that works with “technology-centic” startups in Windsor and neighbouring Essex County, she puts it more bluntly than most. But the sentiment that the area was headed for trouble even before the recession is a common one.

“There absolutely was a bit of a manufacturing bubble,” says Mike Moffatt, an economist at Western University’s Richard Ivey School of Business who has emerged as a leading voice on the southwest’s struggles. “I’m not sure the bubble bursting was a blessing, but it was probably inevitable. The area bet too heavily on manufacturing – no question.”

Mr. Moffatt grew up in London, and says the decline there began before the global crash hit in 2008: “The wheels were already in motion by 2005-06.”

Much the same happened in Windsor, while the Niagara area was the canary in the coal mine – the erosion of its industry spanned decades.

To auto towns, a boom-and-bust cycle was nothing new, so the warning signs were easy to brush off at first. But in recent years, the realization has set in that it will never again be possible to compete for investment in traditional manufacturing the way they used to.

Despite the dollar’s recent dip, the days of it being consistently low enough to offer exporters a big competitive advantage are over. Also a deterrent are Ontario’s energy prices, once kept artificially low and now among the most expensive in North America. Wages are vastly higher than in other labour markets, such as the U.S. South and especially Mexico and China, whose workforces may no longer be nearly as unskilled as some Canadians think. Meanwhile, governments in those jurisdictions serve up subsidies at rates that would be considered scandalous here.

David Billson of tech startup rtraction cct stands in the doorway of his company’s future quarters – London’s 127-year-old railway roundhouse.
Riley Rose, 14, takes a break from playing roller hockey near a vacant lot in Ford City."I like living here," he says of the neighbourhood where he has grown up. But will he be able to stay there?
Maddie, 25, works in the kitchen at Youth Opportunities Unlimited, in London, April 10th, 2014. Youth Opportunities Unlimited offers various resources and services for at-risk youth, up to age 29, including skill training, education, housing and jobs within their organization. 

Despite a strong bounce-back by the Big Three since the recession, for example, only a tiny portion of new investment has been made north of the border. Anthony Faria, an auto-sector specialist at the University of Windsor’s business school, observes that Canada’s share of the North American industry has fallen by more than one-quarter from a peak of 17.9 per cent to 14.3 per cent. Some forecasts see it going as low as 11 per cent.

There are manufacturers bucking the trend – Germany’s Dr. Oetker, for instance, recently opened a factory in London to produce its highly popular line of frozen pizzas – but such victories hardly herald a return to the glory days. Not only do newcomers tend to be non-union and pay perhaps half what workers once made, the wonders of modern technology continually reduce the need for human labour.

“We know that, with the automation of facilities, we’re not going to see the thousand-job plants coming back,” says Mayor Heather Jackson of St. Thomas, whose city of 38,000 has, like neighbouring London, been hit hard by closures, including that of a Ford assembly plant.

She offers a good-news, bad-news example much like what is happening with Heinz in Leamington: a shuttered plastics factory reopened by a new company but provided just 200 jobs, “where we might have seen 600 or 700 before.” (Dr. Oetker says it could one day employ as many as 1,000 in London, but started off with a grand total of 75.)

Survival of the fittest

If there is a silver lining to what the southwest is going through, it’s the loss of fat. Companies that lagged on productivity, got by on the low dollar and were primed for an eventual fall have been trimmed, leaving behind those that are leaner and have proved themselves capable of innovating and adapting.

Tool-and-die shops are frequently held up as an example. Put through the ringer by the exodus of their auto-industry clientele as well as increased delays in crossing the border, they had to prove themselves to be more efficient than competitors elsewhere just to maintain a relationship with car makers. “The amazing thing is how many of them got through that downturn,” Prof. Faria says admiringly.

I’m not sure the bubble bursting was a blessing, but it was probably inevitable. The area bet too heavily on manufacturing – no question
Mike Moffatt, Western University’s Richard Ivey School of Business

The trouble is that a leaner automotive-supply chain, along with other traditional manufacturers that compete by being far less bloated, won’t provide the southwest with nearly enough jobs. So communities find themselves grappling with the question upon which their very existence may depend: If there is no going back, what lies ahead?

Who are the new employers and what will attract them?

Many look for inspiration to Kitchener-Waterloo, the gold standard for a manufacturing-heavy economy reinventing itself. And while some try to follow its model too closely – another tech hub probably isn’t needed so close by – civic leaders seem to be drawing some of the right lessons, as well.

That includes making more of an effort to draw budding entrepreneurs. But even more important is the institution that brings young, talented people to a community in the first place.

Ivory towers pitch in

Jack Lightstone gestures at the panorama from his office window – a view of St. Catharines, Welland, Port Colborne and other communities that surround Brock University.

Not so long ago, Brock’s president acknowledges, the university saw itself as an island: the classic ivory tower. Then it decided that, as well as being in Niagara, it should be for Niagara.

Now business and social leaders sing the praises of Dr. Lightstone for tailoring its programs to areas of potential economic growth, forging ties with local businesses and organizations in hope of keeping graduates in the area, and becoming an active participant in efforts to revitalize downtown St. Catharines.

He is part of a wave of university presidents who have tried to make their schools a little more like the University of Waterloo, which was famously essential to the growth of the tech industry around it because of its focus on computer science and engineering, and its integration with the local business community.

A group of local kids play fight and throw mud at each other, in a vacant lot, in Windsor's Ford City neighbourhood, April 8th, 2014.

Even in Windsor, the grimmest conversation about the city’s state of affairs usually includes some kind words about the changing role of its university. Mr. Lewenza calls it “the most successful story in our community,” and those, such as Mayor Eddie Francis, who see slightly better employment figures of late as evidence the city has turned a corner, consider UWindsor a major factor.

University leaders used to be “isolated,” says Mr. Francis, who is particularly optimistic about the growth of the aerospace industry and other forms of manufacturing that build on Windsor’s traditional strengths. “But they now recognize the success of the city and the success of the university are interdependent.”

Share of Ontario population

Location198620112036
GTA41.447.351.5
Central21.821.620.9
East141312.7
Southwest14.11210.2
Northeast6.24.23.2
Northwest2.61.81.4

Sources: Statistics Canada, 1986–2011, and Ontario Ministry of Finance projections.

Alan Wildeman, the university’s president, says it long realized that it should engage with the city more, but did so with a “sense of urgency” after 2008. The effort included ramping up specialization in areas (such as sustainable manufacturing and the cross-border flow of goods and services) tied to the city’s policy challenges and competitive advantages.

Down the highway, even Western, long the epitome of an academic island, has made some effort. Its focus remains broad – London’s economy is more diverse than most in the region – but under president Amit Chakma (not coincidentally, a former vice-president at Waterloo), the massive university (almost 37,000 students and faculty) is developing more partnerships with local businesses.

What the universities and their communities want is to have more students stick around after they graduate, either starting their own businesses or helping to build those of others.

Providing extra help are “innovation centres” such as WETech (the agency Ms. Behune Plunkett runs) in Windsor, TechAlliance in London and Innovate Niagara. Financed mostly by the province and loosely modelled on Kitchener-Waterloo’s much bigger Communitech, they aid in developing a business strategy and finding capital investment for small businesses trying to get off the ground.

“When I was starting up my business, there was none of this,” says TechAlliance president and CEO Marilyn Sinclair, referring both to the support of agencies like hers and what she calls the growing willingness of local business leaders to act as mentors.

It takes time to build a support system, she concedes, but notes a “grassroots explosion” in London that suggests the emergence of a more entrepreneurial culture.

There is also some recognition of the need to make southwestern towns more compatible with the lifestyles of people in their twenties or thirties.

“Your downtown,” says London city planner John Fleming, “is your calling card to the world.”

People wait for the bus, on Dundas Street, in London, April 9th, 2014.

The energetic Mr. Fleming manages to be both a booster of his city and well aware of its shortcomings. (“What you see out the window is not what we want,” he says, pointing out his window to a somewhat desolate streetscape.) He is trying to advance an ambitious urban-renewal plan that includes everything from greater housing density and streets that are pedestrian-only on weekends to the addition of boardwalks and an “urban beach” along the Thames River.

Pivotal to that vision is one thing much of the southwest lacks: modern public transit. People fresh out of university and starting their careers don’t always have a car to get around.

The need for all this investment speaks to a fundamental chicken-and-egg problem facing much of the rust belt. The lack of modern urban infrastructure can be a barrier to economic growth, but without that growth, communities simply can’t afford it.

For that, they need help from the province.

Which path to take

Beyond where to direct infrastructure dollars, the two people with the best chance of being Ontario’s premier after June 12 are in the midst of debating an even tougher issue.

Ms. Wynne and PC leader Tim Hudak agree on the importance of putting Ontarians back to work – in fact, it’s the centrepiece of the Tories’ platform – but have very different ideas on how to make it happen.

The Premier takes pride in her government’s willingness to spend billions on direct support to businesses – from auto giants to tech companies and Dr. Oetker. Mr. Hudak considers such subsidies “corporate welfare” that unwisely try to pick winners and should be swapped for a 30-per-cent cut in corporate taxes.

Neither party really expects to pick up much more support in the southwest than it already has. Gone are the days when the Liberals had a finance minister (Dwight Duncan) from Windsor. In fact, since the loss of Chris Bentley, the energy minister caught in the furor over the costly cancellation of two gas-fuelled power plants, and his seat to the NDP, Health Minister Deb Matthews, a fellow Londoner, is among the party’s few remaining members in the area.

Mr. Hudak has little urban appeal here even though he grew up in Fort Erie, an especially hard-hit town across the Niagara River from Buffalo. His party is jockeying for a few ridings with the NDP (whose main jobs proposal is tax credits for companies that hire new employees).

The call to end subsidies isn’t intended to win votes in Windsor, but is a hotter topic there than just about anywhere else. Almost everyone, from Mr. Francis and Prof. Faria to Matt Marchand, president of the Windsor-Essex Chamber of Commerce, insists that the last thing Ontario can afford to do is stop playing the subsidies game with a company such as Chrysler.

“For better or worse,” the mayor says, Ottawa and Queen’s Park rescued auto makers during their “darkest time. You don’t bail them out and walk away now.”

Although Chrysler somewhat mysteriously abandoned a recent pitch for aid, people in Windsor expect it will be back with outstretched palms before long.

Young Londoners, from left, Chantal Gatto, Marcel Shipway and Kyle Waring visit Youth Opportunities Unlimited, which provides people 29 and under with life skills, job training and a place just to get together.

On the campaign trail, the debate over economic interventionism versus a more hands-off role for government isn’t being presented as a choice between older industries and newer ones. Not when Ms. Wynne’s enthusiasm for subsidies extends to tech firms such as Cisco and Open Text, both of which recently won public dollars to expand in Ontario. Nor when Mr. Hudak insists that auto companies and others will stick around without subsidies if taxes are lower and energy prices more manageable.

But at some point, the discussion will lead to something more existential – a subject that neither leader is eager to address: Is it time to give up on traditional manufacturing altogether?

There are cities that have done just that, and made it work. As well as Kitchener-Waterloo, there is, not too far across the border, Pittsburgh – once the epitome of the U.S. rust belt and even now still synonymous to many with steel. In reality, the city largely left that industry behind long ago, capitalizing on its universities to focus on science, technology, medicine and other sectors that rely on brains over brawn.

Pittsburgh offers a sense of what is possible, but it also demonstrates that such a transformation is neither quick nor painless – it took from the 1970s through the 1990s for the reinvention to really take hold. Meanwhile, the population shrank as residents left for greener pastures.

This prescription is not one that campaigning politicians, more concerned about the next few weeks than the next few decades, will be eager to suggest. They are not about to tell older workers like the ones John Toth is trying to help in Windsor that they’re just going to have to take the hit, so people like Ken Lewenza’s granddaughter will have a brighter future.

But there is only so much they can gloss over, after the votes are counted and in the years ahead, if they have any hope of restoring Ontario to the stature it once enjoyed in this country.

Follow on Twitter: @aradwanski