The Economic Development Myth: Why Your Council Can't Fix Your Local Economy Alone.

For as long as I can remember, municipalities have been told that economic development is their responsibility. Economic development became a recognized field in the 1950s, but many communities with populations under 5,000 didn't begin to work with it until the 1980s. The expectation for municipalities to take this on grew gradually through provincial programs, economic development organizations, and municipal best-practice movements. Nothing in the legislation suggests that economic development is, or should be, Council's role.

Let's think about this for a minute: over time, we've assigned economic development to municipal Council, which receives no operational funding to support it, has no experience with it, and has no legislation to support its function. Legislation around how decisions are made at the municipal government level often doesn't align with business needs. So, they hire someone to do it, with a vague directive to bring in more businesses, no work plan, and no understanding of deliverables or what it would take to make a difference in the community they represent. After a few years, with no new nationally recognized coffee shop, the whole thing is deemed a failure.

Economic development became a municipal responsibility because people expected it, not because the municipality had the capacity. It's no wonder they confuse economic development with events, tourism, marketing and beautification. All of these can support economic development, but often they don't effectively develop the community. That is a discussion for another day. But for now, let's consider that Councils' expectations about community economic development often don't align with activities that can actually develop the community. Hiring someone you won't train to provide services for an outcome you know nothing about makes the rare successes a fluke. Why are we surprised when it doesn't work?

When people don't understand community economic development, they reduce it to what we call a one-trick pony: one big project.

Councils often focus on attracting "white knight" investors, who will show up at their community, invest kerzillions of their own dollars to build them a subdivision with no investment from the community, and solve their housing problem, or a business to plop down another bunch of kerzillions of their own money to support new and exciting jobs...all without Councils having to do a thing to offer anything they are looking for, all because their communities are pretty and presumed safe. That is not economic development. That is wish-and-hope planning while your community dies.

They offer incentive grants to new businesses while failing to support or incentivize existing businesses to grow, effectively using taxpayers' dollars to enrich new owners with absolutely no return planned for the people who funded it. If you want to really rile up your business community, offer hefty, taxpayer-funded incentives while ignoring your local businesses. And, so that you know, not charging taxes to a new business while increasing taxes for your existing business has the same result. It is a hell of a slap in the face to those same businesses that donate to whatever the community needs.

Some Councils will pull out all the stops to build a new rink, communiplex or pool while ignoring a generational housing need, using the build it and they will come philosophy. But they won't come up with the 10% or 20% down payment they would need to build a rental housing complex. And eventually, the municipality is on the hook for the new build, and your businesses still cannot attract the employees they need because there is no housing. They do this because they do not understand how economic development works. They rely on strangers' investment, without any attempt at partnership or outreach.

I've gone to a lot of conferences, spoken at a few, and I despise it when I hear disparaging remarks about our small municipalities because we "just don't get it." "We" were never taught it. Let's see how you do when you are dropped into a sea of expectations in something that isn't even in your legislated role, with no budget, no support and a lot of disdain for not knowing what you don't know.

Before I go any further, I celebrate the communities that have figured it out and achieved remarkable results despite limited budgets, limited staff, and very little support. They deserve tremendous credit. Their success is often held up as proof that the system works! I would argue the opposite. Their success demonstrates what talented, committed people can do despite the system, not because of it. The fact that some communities succeed does not change the reality that most municipalities were given responsibility without the training, resources or capacity to carry it out effectively.

When every municipality is told it is responsible for its own economic development, competition will replace cooperation. They have been placed in a system that encourages competition rather than regional collaboration. The system has made each municipality responsible for their own economic survival, without any real means of building and developing a regional plan. They just get told over and over that they need to work nicely together.

Let's think about this...we've spent decades now telling municipalities that economic development is their responsibility. We gave them little training, little funding, little capacity and no clear definition of success. The result is not a municipal failure; it is the predictable outcome of the system we created.

But here is the thing: economic opportunities naturally operate on a regional scale. Businesses serve regional markets. Workers cross municipal boundaries every day. Housing demand doesn't stop at the edge of town. Investors look at opportunities across an entire region. Yet we continue to organize economic development one municipality at a time. Opportunities become fragmented along municipal boundaries, and municipal decision-making cannot operate at the speed of business.

Housing is a perfect example of the problem. Many communities lack enough rentals to support their workforce. One may need 20 units, the community down the road may need 15 units, and another may need 30. One municipality alone doesn't entice a developer, but collectively, the project could prove more attractive. The developer, the workforce, and the investment community see the entire region as a single market. Yet we still ask municipalities to solve their housing shortage alone. And they don't even know how to assess their own needs, let alone their neighbours'. The opportunity is regional. The capacity isn't there, and without support, the wrong housing gets built, or it doesn't get built at all. That is exactly the kind of gap that exists across Canada. The need is regional. The solution is regional. That capacity remains municipal.

So, Matthewson & Co. is doing it differently. Rather than expecting individual municipalities to become experts in business development, tourism, housing, workforce development, investment attraction and economic development, our model creates a shared regional capacity that can work across municipal boundaries.

The premise is very simple. Economic opportunities do not care where your municipality begins and ends. Housing markets are regional. Labour markets are regional. Investment decisions are regional.

Instead of every municipality building its own economic development program with limited resources, our Regional Initiative creates a central hub that supports capacity, coordination, business support, tourism development, housing support, investment connections, and regional collaboration. Will it work? We believe it will because it aligns economic development capacity with the regional way economies function.

We believe the answer is not to hand down more responsibility to a group that never had the capacity in the first place. We believe the answer is building regional capacity. Stay posted; this is going to be fun!