Ontario’s Next Generation Jobs Fund Likely to Have Real Estate Impact
- May 08, 2008
The government of Ontario is on the verge of awarding a new series of grants to local businesses, a move that promises to stimulate demand for certain kinds of real estate indirectly, particularly space suitable for high-tech research or manufacturing. The primary thrust of the program, known as the Next Generation of Jobs Fund, is to promote job creation and retention, but it is structured such that real estate expansion by the recipients will be a likely byproduct. All together, the province will be awarding about $1.15 billion over the next five years. Its target industries include biopharmaceutical R&D, green tech or green auto research, advanced health technologies or creative industries, such as digital media. Though grant recipients cannot spend the money directly for real estate purposes, the “anchoring” effect a company has will be a factor in awarding the grants. “One basis on which we will award grants is whether or not the activity would have an anchoring effect,” a spokeswoman for the province of Ontario told CPN this morning. “Anchoring means that a company would attract a cluster of suppliers or feeder companies in its vicinity because of the research or development its undertaking.” The greater Toronto area in particular already has a number of concentrations of high-tech companies, such in the Waterloo area. The program may have to effect of further concentrating the industry. == Whatever the real estate impact, companies need to invest $25 million or create or retain 100 high-value jobs within five years to be eligible for the grant money, and demonstrate the their projects’ innovative nature to the province. Grants will typically pay up to 15 percent of the total eligible costs of a particular project, such as for equipment, construction or leasehold improvements, materials or certain labor costs. According to the spokeswoman, there have been a number of applications for grants completed already, though the initiative was unveiled only in March. She said that the first grants will probably be award this summer.