Self-inflicted injury

In 2007, 155 homes were new homes built in Prince Edward County. Three large residential builders were developing plans to build more than 1,000 new homes around Wellington. Last year just 85 were built—that was up from the previous year, when just 69 new homes were started.

In 2007, new construction was valued at $63 million, as measured by building permits. The next year, the County adopted new development charges, adding more than $10,000 to the cost of building a home. In March that year, in advance of the new charges, permits valued at nearly $16 million of work were taken out, pushing the total construction that year to $70 million. New construction has averaged about $52 million each year since then. Last year it sagged to $48 million.

In the last decade, several new wineries were opening each year, some investing huge sums into the Prince Edward County soil—others more modest in scale and ambition.

Fine food lovers flocked to County restaurants, eager to discover the taste of fresh, great-tasting meat, vegetables, grains and fruit grown in the fields nearby.

They still come. There continue to be many great restaurants— great inns—great winery experiences. But it’s not like it was in 2007—or most of the past decade. Those three large residential builders seem no closer in 2014 to constructing homes in the County than they were in 2007.

There are, of course, a variety of contributing factors to the decline in the County’s economy—a collapse of credit markets in 2008 being prominent among the triggers.

But sadly, most of the damage caused to the local economy has been self-inflicted. Bad policies. Bad decisions. Bad timing. And a disturbing inability by our local leaders to see how lucky they had been.

Around the province, communities, which once depended on manufacturing, were in decline. But the County was enjoying investment, an inflow of people and capital, all buoyed by powerful marketing and publicity. Prince Edward County was bucking the trend experienced in virtually every other rural economy in Ontario.

One couldn’t leaf through an inflight magazine or a Saturday newspaper in a major market in North America and fail to come across a story extolling the charms of the County.

An entire new economic sector emerged out of the ground—from nothing in the mid- 90s, the winegrowing and production industry in the County grew to encompass more than 30 wineries and many more vineyards. A sector that didn’t exist 20 years ago—is now estimated to account for about $50 million in revenue each year and many thousands of visitors.

From that success, other businesses have developed and grown—suppliers, repair and maintenance and trades have all benefited.

Restaurants and accommodation providers expanded to look after folks who come for the winery experience. A creative rural economy emerged amid the natural beauty and enabled by high speed Internet.

But in the eyes of some—including many local leaders—growth of the economy came at the expense of the homegrown population.

Some were offended by the growth of the tourism and the visitor experience economy. They worried the County would become Niagara- on-the-Lake. Others resented the idea that folks from away were investing in the County and reaping the prosperity they felt properly belonged to them. Others, once here, didn’t want anything to change.

So their leaders set about to undermine the success that had been achieved. They began to undo the accomplishments and to actively discourage growth.

Minimum distance separation rules were invoked to limit the development and expansion of wineries. Development charges were introduced when it was clear the market was already facing steep obstacles. Joint funding partnerships, designed to enhance the marketing of local goods and produce, were torn up and tossed away.

Then, funding for the municipality’s economic development office was stripped away. Now funding for Taste the County—the marketing agency that so impressively told Prince Edward County’s story to the world—has been systematically stripped away.

There are some who will celebrate this news. They believe they have engineered lower home prices—that they have made the County more affordable. Better. These folks are fatally short-sighted.

Decline, once it takes hold, gains its own momentum. It becomes hard to stop. Investment dries up. Resources go elsewhere. Creativity seeks greener pastures. In time, visitors drive past decaying homes and empty shops on their way to and from the beach. There is no reason for them to stop.

It isn’t inevitable that this economy is doomed to tread this bleak path—but complacency won’t reverse the downward spiral. Action is needed immediately to reassure jittery business owners and investors that the County is committed to growth and that council understands what is needed to relight the County’s lamp.

Neil Carbone and the Community Development Commission are now tasked with stewarding the County economy. They are able folks.

But this council and the next, must step up with resources to give these folks the tools they need to reverse this trend. Until this is done—there is no other issue. Council’s ability to do anything else, will continue to be eroded by a declining tax base. And the spiral will continue downward.

rick@wellingtontimes.ca