The Regional Municipality of Halton 2016 Competitiveness Study

The Regional Municipality of Halton 2016 Competitiveness Study April 6, 2017

Contents Page 1. Introduction... 1 1.1 Terms of Reference... 1 1.2 Importance of Non-Residential Development... 1 1.3 Context... 1 2. Development Competitiveness in the Halton Region Context... 3 2.1 Industry Requirements... 4 2.2 Cost of Development Parameters for Employment Lands Development... 6 2.3 Supply of Vacant Employment Lands... 11 3. Profile of Halton s Employment Areas... 13 3.1 Halton s Employment Areas Overview... 13 3.2 Halton s Employment Areas Employment and Business Trends... 15 3.3 Halton Employment Area Profiles... 22 3.3.1 North Halton Employment Districts... 22 3.3.2 South Halton Employment Districts... 26 3.4 Employment Lands Structure and Supply Opportunities... 30 4. Regional Comparative Analysis of Employment Areas... 33 4.1 Comparator Employment Area Profiles... 34 4.2 Market and Economic Characteristics... 38 4.3 Transportation and Access... 43 4.4 Amenities and Aesthetics... 44 4.5 Observations... 46 5. Detailed Cost Competitiveness and Financial Feasibility Analysis... 48 5.1 Total Development Annualized Cost Framework... 50 5.2 Development Charges as a Share of Total Development Cost Halton Context... 51 5.3 Annualized Cost Comparative Assessment... 54 5.4 Residual Land Value Analysis Rental Revenue Stream Scenario... 62 5.4.1 Residual Land Value Analysis Framework... 62 5.4.2 Residual Land Value Analysis Comparative Assessment... 63 5.5 Residual Land Value Analysis Project Sale Scenario... 69 5.5.1 Residual Land Value Analysis Framework... 69 6. Conclusions... 75 Appendix A Halton Employment Area Profiles...A-1 Appendix B Select Employment Areas Physical and Economic Characteristics...B-1 Appendix C Assessment of Development Cost/Annualized Cost... C-1 Appendix D Residual Land Value Analysis Rental Revenue Scenario... D-1 Appendix E Residual Land Value Analysis Project Sale Revenue Scenario...E-1

Page 1 1. Introduction 1.1 Terms of Reference The Region of Halton retained to prepare a Competitiveness Study. The study is intended to provide a detailed assessment of Halton Region s employment areas and deliver a cost competitiveness and feasibility analysis of non-residential development to determine the competitive position of Halton in the broader Greater Golden Horseshoe (G.G.H.) context. Much of this analysis is focused on the Region s existing and planned employment areas and corresponding employment lands within the context of the Region s four local municipalities Burlington, Halton Hills, Milton and Oakville. The study is designed to serve, in part, as an update to the 2012 Halton Investment Readiness and Competitiveness Study (I.R.C.S.) as well as supporting documentation to the 2017 Halton Region Development Charges Background Study. 1.2 Importance of Non-Residential Development In addition to providing employment, non-residential development growth adds to Halton's assessment base, which can help support lower residential taxes and/or higher service levels. Thus, a healthy balance between residential and non-residential development is considered highly important to maintaining the economic and fiscal sustainability of Halton Region. Industrial and office development tends to produce more positive net fiscal benefits for the community than other types of development. Further, industrial and office commercial development is critical to the development of Halton s export-based economy which typically generates relatively strong economic multipliers that benefit Halton Region directly and indirectly. In addition, industrial and office development typically generates relatively higher quality employment opportunities. 1.3 Context Halton Region is part of the Greater Toronto and Hamilton Area (G.T.H.A.) which is located within one of the fastest growing Cities/Regions in North America, known as the Greater Golden Horseshoe (G.G.H.). The G.T.H.A. represents an economic powerhouse in Ontario and the center of a large portion of economic activity in Canada. With a robust economy and diverse mix of export-based employment clusters, the G.T.H.A. is highly attractive on an international and national level to new businesses

Page 2 and investors as a world class City/Region. In turn, this continues to support strong G.G.H. population growth levels largely driven by international and inter-provincial net migration. Notwithstanding the success of the G.T.H.A., international competition for business development and investments is becoming increasingly fierce in today s new economy. Moreover, regional competition within the G.T.H.A. and the surrounding G.G.H. Outer Ring is also intense. Halton Region is located within proximity to a number of large urban/suburban municipalities with which it competes directly for business attraction and investment. All of these municipalities generally offer regional attributes which largely appeal to prospective international and local firms. In this highly competitive regional market, there are a number of comparable municipalities with which Halton Region and its local municipalities compete for exportbased business attraction and retention. Halton Region s most immediate competition within the industrial sector includes Peel Region (i.e. Mississauga, Brampton, Caledon), south York Region (Vaughan, Richmond Hill, Markham, Newmarket and Aurora), the shore-based municipalities in Durham Region (Pickering, Ajax, Whitby and Oshawa) and Hamilton. Halton Region also competes in the industrial sector against larger urban centres in the G.G.H. Outer Ring, such as Guelph, Kitchener, Cambridge, Brantford and Barrie. Within the office market, Halton Region competes most directly with municipalities within the G.T.H.A. This includes municipalities in Peel Region, south York Region and the shore-based municipalities in Durham, as well as the Cities of Toronto and Hamilton. In comparison to industrial and office development, competition for retail development is less pronounced. With the exception of large-scale regional shopping malls or power centres, retail development is local population serving and tends to be located in proximity to residential development. With respect to large-scale retail developments, competition from neighbouring municipalities becomes a factor to consider. One of the most critical aspects related to the economic competitiveness of Halton Region is the marketability and availability of its employment land base relative to the surrounding market area. Employment lands typically include a broad range of designated lands, including light, medium and heavy industrial lands, business parks and rural industrial lands. Employment lands generally accommodate export-based employment, including a wide range of industrial uses (e.g. manufacturing, distribution/ logistics, transportation services), as well as specific commercial and institutional uses

Page 3 (e.g. office, service, ancillary/accessory retail) which generally support the industrial/business function of the employment area. Structural changes in the macro economy are altering the character of economic activities on employment lands and impacting the built form and character of employment areas. Over the past decade, the composition of industrial development has evolved, with less emphasis on the manufacturing sector. While employment growth in the manufacturing sector has been limited, there have been growth opportunities in other forms of industrial development largely oriented to large-scale industrial buildings housing wholesale trade, distribution and logistics. This has been driven by increasing demand in the goods movement sector to store and manage the distribution/transportation of goods produced both locally and imported from abroad. Market demand on employment lands has also been increasingly driven by growth in the knowledge-based and/or creative class economy, including employment sectors such as professional, scientific and technical services, finance, insurance, real estate, information and culture, health and education. These sectors are largely accommodated within office developments and are typically located within prestige employment areas. Further, there is increasing demand to accommodate employmentsupportive commercial and institutional uses on employment lands, particularly in business parks, which offer amenities and services convenient to local businesses and their employees. Recognizing the evolving nature of the economy and planning requirements for today s industries, this assignment explored Halton s non-residential competitiveness within the context of a broad range of regional, community and site level factors largely through the framework of the Region s existing employment lands base. The analysis does not focus specifically on other commercial nodes or corridors such as downtown areas. 2. Development Competitiveness in the Halton Region Context Regional factors can strongly influence business location decisions, both for new development and expansion. Market competitiveness is typically driven by the following broad regional criteria: Hard factors development costs (e.g. land costs, construction costs) and operating costs (e.g. property taxes, utilities costs);

Page 4 Soft factors proximity and access to major infrastructure; labour force; access to post-secondary institutions; availability of developable land, quality of life; and Regulatory environment. In addition to the regional site location factors, location preferences at the employment area level or local site level are largely influenced by: the market choice of developable land in terms of site size, configuration, access, zoning, surrounding land uses and future expansion potential; the quality and suitability of the vacant building space inventory; and the character of the employment area and compatibility with surrounding land uses. The industrial and office market is strongly influenced by regional and local site selection factors investors typically have a broad geography to select from. The retail sector is generally captive to a specific trade area and typically not as sensitive to these factors. At both the regional and local level, location requirements of industry can vary considerably depending on the nature of the employment sector/use. While cost of development and access/proximity to major infrastructure have historically weighed heavily on business location decision making, the relative weighting of factors is beginning to shift. Quality factors are becoming increasingly important in business location decision making. This is particularly apparent in knowledge-based sectors. 2.1 Industry Requirements Industry sectors have a variety of requirements and considerations that go into site selection. To be successful at attracting industrial and office development, Halton s employment areas need to have regard for a series of requirements, as summarized in Figure 1.

Page 5 Figure 1: Site-specific Requirements by Development Type Industrial Development Access to 400 series/limited access highways Access/traffic circulation for heavy truck traffic Proximity to intermodal facilities Proximity to markets, U.S. border Competitive land prices Flexibility in zoning, parcel size and configuration Compatible surrounding land uses/buffers from surrounding nonindustrial uses Office Development Access to skilled labour Proximity to related industry clusters (companies and public institutions such as universities) Prestige setting Access to high-order public transit Access and exposure to 400 series/limited access highways Ease of access/egress Access to on-site amenities/ services and proximity to off-site services Potential for live/work opportunities The relative importance of these attributes is evolving in response to structural changes in the macro-economy which is impacting industrial and office development patterns within the G.T.H.A. and more broadly in Ontario. Being competitive in today s new economy requires new approaches to how employment areas are planned and developed. With respect to industrial development, industrial activity is increasingly centred on production processes which are time-sensitive, driven by just-in-time manufacturing, e- commerce and an increasingly globalized environment. As a result, the location and site requirements within the industrial sector continue to evolve. For the goods movement sector, a major growth sector, the growing inter-dependence of companies and their suppliers continues to increase the importance of this integrated business process through various modes of transportation. In turn, this drives the need for more, bigger and better-located warehouses and logistics facilities. As such, large flexible tracts of land are required for large warehouses, storage yards and future expansion. Locational requirements are typically focused on direct access to distribution channels. This means that access to transportation infrastructure is critical, including access to 400 series highways and intermodal facilities. Given that these facilities tend to be landextensive, competitive land costs are also an important consideration in site selection.

Page 6 With an increasing emphasis on the knowledge-based and/or creative class economy, office development is becoming an increasingly dominant built form. Within the office sector, office development patterns are evolving in response to needs of office tenants. Office tenants are increasingly looking for access/proximity to high-order transit and services/amenities as well as environments that feature mixed-use development and offer opportunities for live/work. The quality and location of new office space are considered very important tools to attract and retain talent. 1 While development and operating costs on location decisions for office development is important, it is less evident than some of the other factors identified above. 2.2 Cost of Development Parameters for Employment Lands Development As previously discussed, a factor influencing business decisions on where to locate is the cost competitiveness (both capital investment and operating costs) of the development in relation to market demand and potential return on investment. The cost competitiveness of development on employment lands in Halton versus competing municipalities is examined in detail in section 5, through a series of pro-forma financial analyses assessing the costs of constructing and operating various prototypical developments. Key cost parameters include land costs, development charges and property taxes which are discussed below within the broader regional employment lands context: Price of Serviced Employment Land From a competitiveness perspective, employment land prices can provide a key advantage, especially for land-expansive uses such as transportation, wholesale trade/logistics, warehousing and large-scale manufacturing. Figure 2 summarizes average employment land prices ($/serviced acre) for Halton s local municipalities and the comparator municipalities in the G.T.H.A. and G.G.H., based on recent market survey data. 2 As shown, employment land prices range between $135,000 and $1,343,0000 per acre based on the survey average, with land prices generally highest in the west and north G.T.H.A (York and Peel Regions) and lowest in Durham Region and Outer Ring G.G.H. communities. Employment land prices in Burlington and Milton are slightly above the survey average of $605,000/per acre. Oakville employment land prices are well above the survey average, while employment land prices in Halton Hills 1 Emerging Trends in Real Estate, Canada and United States 2015, PricewaterhouseCoopers and Urban Land Institute. 2 Reflects both prestige and general employment lands.

are well below the survey average and very competitive compared to other west and north G.T.H.A. municipalities. Figure 2: Average Price of Employment Land ($ per acre) Page 7 Vaughan Richmond Hill Markham Brampton North York Mississauga Oakville Etobicoke Newmarket Scarborough Burlington Milton Aurora Caledon Waterloo Whitby Guelph Cambridge Halton Hills Hamilton Pickering Ajax Kitchener Barrie Oshawa Brantford $369,000 $362,000 $345,000 $336,000 $329,000 $325,000 $320,000 $279,000 $267,000 $260,000 $235,000 $135,000 $1,160,000 $1,096,000 $1,092,000 $1,041,000 $932,000 $862,000 $822,000 $748,000 $693,000 $675,000 $666,000 $560,000 $524,000 $1,343,000 $- $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 Employment Land Prices ($/Acre) Source: Complied by based on data from Cushman & Wakefield and real estate broker reports, 2016. Development Charges Development charges are also a component of total development cost. Figure 3 and Figure 4 illustrate the total industrial and commercial office development charges within Halton municipalities in comparison to other surveyed municipalities. 1 Halton differentiates development charge rates based by geographic location greenfield vs. built boundary and this is illustrated accordingly. As such, the cost of development analysis for Halton s local municipalities presented herein is differentiated on this basis. Key observations include: Industrial development charges among the surveyed municipalities average $17.00 per sq.ft., with the highest rates in York Region and the lowest in Durham 1 Reflects local and upper tier as well as education development charges.

Page 8 Region, the G.G.H. Outer Ring and the City of Toronto. Industrial development charges in Oakville and Burlington are higher than the survey average, while greenfield locations in Milton and Halton Hills are close to the survey average. In comparison, built boundary locations within Milton and Halton Hills are below the survey average, and amongst the lowest of the surveyed G.T.H.A. municipalities. With respect to office development charges, the survey average is $19.00 per sq.ft., with rates highest in York Region municipalities and lowest in the City of Toronto, Durham Region and G.G.H. Outer Ring communities. Within Halton Region, Oakville (greenfield and built boundary) and the greenfield areas of Burlington, office development charges are moderately higher than the survey average, while rates in the greenfield areas of Milton and Halton Hills and the Burlington built boundary area are slightly lower than the survey average. In comparison, rates within the built boundary locations in Milton and Halton Hills are well below the survey average. Figure 3: Industrial Development Charge Rates Markham Richmond Hill $29.18 $27.88 Vaughan $26.36 Newmarket $26.17 Aurora $24.89 Oakville (Greenfield) $24.71 Mississauga $23.61 Burlington (Greenfield) $21.59 Oakville (Built Boundary) $21.58 Burlington (Built Boundary) $18.45 Brampton $18.04 Waterloo $17.85 Milton (Greenfield) - Derry Green $17.55 Caledon $16.98 Halton Hills Greenfield) $16.34 Ajax $14.91 Milton (Built Boundary) $14.35 Cambridge $14.29 Kitchener $14.12 Halton Hills (Built Boundary) $13.21 Pickering $12.59 Hamilton $12.55 Barrie $11.95 Whitby $11.64 Guelph $9.39 Oshawa $8.72 Brantford $6.43 Toronto $1.07 0 5 10 15 20 25 30 Industrial Development Charge (per sq.ft.) Source:, 2016. Notes: Includes the following where applicable- lower tier, upper tier, education and average of area specific charges (only area specific charges in employment areas with significant vacant land are included in the average). The City of Mississauga, City of Markham and the City of Vaughan include stormwater charges which is based on land area. The City of Markham includes charges for hard services based on land area. Rates based on current postings on June 7, 2016.

Page 9 Figure 4: Office Development Charge Rates Markham $33.07 Mississauga $30.95 Richmond Hill $27.84 Vaughan $26.35 Newmarket $26.17 Aurora $24.89 Oakville (Greenfield) $24.71 Brampton $24.19 Caledon $23.12 Burlington (Greenfield) $21.59 Oakville (Built Boundary) $21.58 Cambridge $21.41 Barrie $19.91 Halton Hills Greenfield) $18.79 Burlington (Built Boundary) $18.45 Waterloo $17.85 Milton (Greenfield) - Derry Green $17.55 Hamilton $17.53 Kitchener $16.66 Halton Hills (Built Boundary) $15.66 Ajax $14.96 Milton (Built Boundary) $14.35 Pickering $14.03 Whitby $13.08 Oshawa $13.01 Guelph $9.39 Brantford $6.43 Toronto $5.79 0 5 10 15 20 25 30 35 Office Development Charge (per sq.ft.) Source:, 2016. Notes: Includes the following where applicable- lower tier, upper tier, education and average of area specific charges (the average of area specific charges only include areas with significant vacant land available). The City of Mississauga, City of Markham and the City of Vaughan include stormwater charges which is based on land area. The City of Markham inlcudes charges for hard services based on land area. Rates based on current postings on June 7, 2016. Municipal Property Tax Rates Property tax rates represent a consideration for business location decisions, since taxes impact operating profit annually. Figure 5 and Figure 6 illustrate industrial and commercial tax rates in the markets surveyed, respectively. Key observations are as follows: Industrial property tax rates are highest in Hamilton, Outer Ring communities and Durham Region and tend to be the lowest in York Region municipalities. Within Halton, industrial tax rates in Halton Hills are currently around the average of the municipalities surveyed, while rates in Oakville, Milton and Burlington are below the survey average. Similar to industrial tax rates, office commercial property tax rates are highest in Hamilton, Outer Ring communities and Durham Region. Halton Region local municipalities, in comparison, have among the lowest office commercial property tax rates of the municipalities surveyed, comparable to rates in Vaughan, Richmond Hill and Markham.

Page 10 Figure 5: Industrial Property Tax Rates Hamilton Oshawa Brantford Whitby Ajax Pickering Guelph Waterloo Cambridge Kitchener Barrie Halton Hills Toronto Oakville Brampton Milton Caledon Burlington Mississauga Newmarket Aurora Vaughan Richmond Hill Markham 4.823 4.283 4.169 4.000 3.617 3.616 3.502 3.369 3.211 3.093 2.924 2.816 2.703 2.689 2.525 2.494 2.278 2.268 2.258 2.206 2.141 1.997 1.997 1.961 0 2 4 6 Property Tax Rate (%) Source:, 2016. Industrial property taxes are based on new construction large industrial use (over 125,000 sq. ft.).

Page 11 Figure 6: Office Property Tax Rates Hamilton Brantford Cambridge Oshawa Guelph Kitchener Waterloo Barrie Whitby Ajax Toronto Brampton Mississauga Caledon Pickering Newmarket Halton Hills Aurora Oakville Burlington Vaughan Richmond Hill Milton Markham 3.514 3.443 3.211 3.126 3.118 3.093 3.049 2.806 2.739 2.699 2.637 2.244 2.025 1.969 1.889 1.883 1.879 1.827 1.801 1.789 1.710 1.705 1.681 1.673 0 2 4 6 Property Tax Rate (%) Source:, 2016. Commercial property taxes are based on new construction commercial use. 2.3 Supply of Vacant Employment Lands The competitiveness of Halton s export-based economy is partly determined by the availability and quality of its developable employment lands. Figure 7 provides a summary of the supply of designated employment lands within Halton s local municipalities and the surveyed municipalities in the surrounding market area within the north and south G.T.H.A. and select areas west in the G.G.H. Key observations include: Milton, along with Hamilton, Brampton and Vaughan, has one of the largest supply of designated vacant employment lands of the municipalities surveyed, totalling 1,075 net ha; 1 1 Includes lands within planned employment areas.

Designated Vacant Employment Land Supply (Net Ha) Page 12 Comparatively, Halton Hills and Oakville have relatively large vacant employment land inventories of 786 and 666 net ha, respectively. Burlington has a significantly smaller vacant employment land supply, of 273 net ha; and A number of larger, more mature urban municipalities in the west and north G.T.H.A. have diminishing supplies of vacant employment land, including Mississauga, Markham and Richmond Hill. Figure 7: Vacant Designated Employment Lands within the Immediate Market Area Municipalities 1,400 1,200 1,184 1,106 1,075 1,067 1,000 800 786 666 600 400 200-466 366 353 310 273 222 143 136 28 Source:, 2016 The supply of shovel-ready lands 1 is also a key measure of a municipality s economic competitiveness. Figure 8 summarizes the supply of serviced shovel-ready employment lands within the surveyed municipalities. Key observations include: With respect to shovel-ready vacant employment lands, the largest supply is located within Mississauga (383 net ha), followed by Brampton (302 net ha), Hamilton (290 net ha), Guelph (275 net ha) and Vaughan (251 net ha). Relative to the other municipalities surveyed, Halton Hills and Burlington have a moderate supply of shovel-ready employment lands, totalling 194 net ha and 112 net ha, respectively. Oakville and Milton have a limited supply of shovel-ready employment lands, totalling 81 net ha and 62 net ha, respectively. Milton s shovel-ready 1 Shovel-ready employment lands are defined as vacant parcels which have regional and local servicing in place (i.e. water, sewer, stormwater and roads infrastructure). In addition, all planning and environmental approvals are in place.

Shovel-Ready Vacant Employment Land Supply (Net Ha) Page 13 employment land supply will expand significantly with the Derry Green Business Park becoming development-ready in early 2018, while Oakville s supply of shovel-ready lands will expand moderately with the development of Winston Park West in the near term. Figure 8: Vacant Shovel-ready Employment Lands within the Immediate Market Area Municipalities 450 400 383 350 300 250 200 150 100 50 302 290 275 251 214 194 187 143 112 107 84 81 62 28 - Source:, 2016. 3. Profile of Halton s Employment Areas Halton s employment areas are an integral part of the Region s economic development potential. The Region s designated employment lands accommodate a broad range of industrial and office uses and, to a more limited extent, commercial and institutional uses including employment supportive uses. The following provides an overview of Halton Region s established and planned employment areas with respect to employment and business structure as well as developed and vacant land supply. 3.1 Halton s Employment Areas Overview Halton has fourteen existing and seven planned employment areas located throughout Halton Region, as illustrated in Figure 9. 1 Employment areas in South Halton are located in Burlington and Oakville, largely along the Q.E.W. corridor. Employment 1 As defined within the Region s Official Plan.

Page 14 Areas in Burlington include the Q.E.W. East and West Employment Districts and Burlington North. Oakville s employment areas include the Burloak Employment District, the Midtown Core Employment District, Q.E.W. East and West Employment Districts, Winston Park Employment District and Winston Park West Employment District. North Oakville represents a large planned employment area. In North Halton, employment areas are located in both Milton and Halton Hills. Employment areas in Milton include the Highway 401 Industrial/Business Park and Derry Green Business Park. Within Halton Hills, employment areas include the Premier Gateway Business Park, Acton Employment Area (located within the community of Acton), Georgetown Employment Area (located within the community of Georgetown) and the Mansewood Industrial area (located just north of Milton). North Halton includes a number of planned employment areas located in Milton including Milton Education Village, CN Lands, Trafalgar/Derry Lands and the Milton 401 Industrial Business Park Expansions Lands. For both international and locally-based industries, Halton s employment areas have a strong appeal, given their proximity to major regional infrastructure including the Toronto Pearson International Airport (T.P.I.A.), 400-series highways, inter-modal facilities, rail, proximity to the U.S. border, and access to skilled labour and post-secondary institutions. The above attributes in Halton Region have produced a highly competitive and diverse employment market, which has provided developers with a broad range of market choice with respect to site selection, access/exposure, zoning, price, etc., for non-residential development.

Page 15 Figure 9: Halton Region Employment Areas 3.2 Halton s Employment Areas Employment and Business Trends Halton s employment areas are home to approximately 5,600 businesses. 1 Approximately three-fifths (61%) of businesses have less than 10 employees, as shown in Figure 10. In comparison, 30% of businesses have 10-49 employees and 5% have 50-99 employees. Larger employers (i.e. 100 employees or more) account for 4% of 1 Derived from 2015 Halton Region Employment Survey by Watson & Associates Economists Ltd.

Page 16 businesses within the Region s employment areas. This suggests that Halton s employment areas, while accommodating many of the Region s larger employers, are also home to a wide range of smaller scale businesses. Figure 10: Halton Region Employment Areas Businesses by Size Class (based on Number of Employees) 50-99 5% 100-249 3% 250 and greater 1% 10-49 30% Less than 10 61% Source: Derived from 2015 Halton Region Employment Survey by Watson & Associates Economists Ltd. Halton Region s employment areas currently accommodate approximately 117,000 of the Region s jobs, representing approximately 48% of the Region s employment base. 1 This includes 90% of the Region s industrial employment, 73% of office employment, 32% of retail/other commercial employment, 21% of institutional employment, and 6% of primary employment, as shown in Figure 11. 1 estimates total employment in Halton Region, including work at home employment, to total 246,000 in 2015.

Figure 11: Halton Region Share of Employment within Employment Areas by Major Sector, 2015 Page 17 100% 90% 80% 73% 60% 40% 20% 0% 21% 32% Industrial Office Institutional Retail/Other Commercial 6% Primary Source: Derived from 2015 Halton Region Employment Survey by Halton Region s employment base within employment areas is dominated by the industrial and office sectors. As shown in Figure 12, 48% of employment on employment lands is within the industrial sector followed by 24% in the office sector. Office-based employment as a share of total employment on employment lands is concentrated along the Q.E.W. corridor in Burlington and Oakville. A significant share of office employment on employment lands is accommodated within large free-standing office buildings (i.e. Major Office). To a lesser extent, retail/personal service uses and institutional uses are also found in employment areas and serve largely as employment supportive uses. Retail/personal service and institutional employment account for 19% and 9% of employment, respectively.

Page 18 Figure 12: Halton Region Employment within Employment Areas by Major Sector, 2015 Institutional 9% Retail/Other Commercial 19% Industrial 48% Office 24% Source: Derived from 2015 Halton Region Employment Survey by Watson & Associates Economists Ltd. Primary employment represents 0.1% of employment w ithin employment areas. As illustrated in Figure 13, Halton Region s employment areas accommodate a broad range of employment sectors. As shown, 24% of Halton Region s employment within employment areas is in the manufacturing sector, followed by 10% in wholesale trade, 10% in professional, scientific and technical services, 9% in retail trade, 7% in transportation and warehousing and 5% in construction. The remaining employment is largely in service-oriented sectors.

Page 19 Figure 13: Halton Region Employment within Employment Areas by Sector, 2015 Mgmt. of Companies & Enterprises 4% Other 17% Health Care & Social Assistance 4% Accommod. & Food Services 5% Construction 5% Finance & Insurance 5% Transportation & Warehousing 7% Retail Trade 9% Manufacturing 24% Wholesale Trade 10% Professional, Scientific & Technical Services 10% Source: Derived from 2015 Halton Region Employment Survey by Watson & Associates Economists Ltd. Figure 14 summarizes the employment share by employment area. As shown, 31% of the employment within employment areas is located in the Burlington Q.E.W. East Employment Area, followed by 17% in the Oakville Q.E.W. West Employment District, 13% in the Milton 401 Industrial/Business Park, 12% in the Winston Park Employment District, and 10% in the Oakville Q.E.W. East Employment District. The remaining employment areas account for a relatively small share of the employment total.

Page 20 Figure 14: Halton Region Share of Employment by Employment Area, 2015 Burlington QEW West Employment District 3% Georgetown Employment Area 4% Oakville QEW East Employment District 10% Oakville Winston Park Employment District 12% Premier Gateway Business Park 2% Other 8% Milton 401 Industrial Business Park 13% Burlington QEW East Employment District 31% Oakville QEW West Employment District 17% Source: Derived from 2015 Halton Region Employment Survey by Watson & Associates Economists Ltd. Figure 15 illustrates employment growth by select employment area in Halton Region over the past five years (2010 to 2015). As shown, employment growth has been strong in the Milton 401 Industrial/Business Park, Winston Park Employment District, Premier Gateway Business Park, Burlington Q.E.W. West Employment District, Oakville Q.E.W. East Employment District, Georgetown Employment Area and the Burloak Employment Area. In contrast, employment growth in the Burlington Q.E.W. East Employment District has been limited, while the Acton Employment Area and the Oakville Q.E.W. West Employment District have experienced marginal declines in employment over the period.

Page 21 Figure 15: Halton Region Employment Growth by Select Employment Area, 2010-2015 Milton 401 Industrial/Business Park 5,860 Winston Park Employment District Premier Gateway Business Park Burlington QEW West Employment District Oakville QEW East Employment District Georgetown Employment Area Burloak Employment District Burlington QEW East Employment District 2,850 2,380 2,220 1,770 1,170 610 170 Acton Employment Area Oakville QEW West Employment District (220) (390) (2,000) - 2,000 4,000 6,000 8,000 Employment Growth, 2010-2015 Source: Derived from 2015 Halton Region Employment Survey and Halton Region Investment Readiness and Compeitiveness Study by As shown in Figure 16, over the 2010-2015 period, the share of industrial employment in Halton employment areas has declined in a number of key sectors, including manufacturing (decline in employment share of 5.4%), wholesale trade (decline of 2.3%) and construction (decline of 0.6%). Of industrial sectors, only the transportation and warehousing sector has seen an increase in employment share over the period. In contrast, commercial and institutional sectors, including professional, scientific and technical services, retail trade, health care and social services, and management of companies and enterprises, have seen a strong increase in their relative share of employment.

Figure 16: Halton Employment Areas Change in Share of Employment by Select Sector, 2010-2015 Page 22 Professional, Scientific & Technical Services Retail Trade Health care and social assistance Transportation and warehousing Mgmt. of Companies & Enterprises 2.1% 2.0% 2.0% 1.5% 1.4% Construction Wholesale Trade -2.3% -0.6% Manufacturing -5.4% -10.0% -5.0% 0.0% 5.0% Change in Share of Employment Source: Derived from 2015 Halton Region Employment Survey and Halton Region Investment Readiness and Compeitiveness Study by 3.3 Halton Employment Area Profiles Profiles of Halton s employment areas, within North Halton and South Halton, are provided below with more detailed tables provided in Appendix A. 3.3.1 North Halton Employment Districts In North Halton, existing and planned employment areas located in the Towns of Milton and Halton Hills are discussed below. Acton Employment Area With a developed area of 43 net ha (106 net acres), the Acton Employment Area is a mature employment area. It is located in the community of Acton on the north side of Highway 7 in Halton Hills. The Acton Employment Area accommodates 775 jobs and 34 businesses and has a high concentration of small to mid-sized firms. The employment area has a high share of industrial employment largely in manufacturing, construction and wholesale trade sectors. Major employers include Geo-Foundations Contractors, PurityLife Health Products and KP Building Products Ltd.

Page 23 The Acton Employment Area has rail access via a rail spur in the area but lacks access/ proximity to a 400-series highway. The employment area has some vacant employment lands available for development, which are marketable, largely small to mid-sized industrial development, including manufacturing and construction sectors. Georgetown Employment Area The Georgetown Employment Area is located on the north side of Highway 7 in the community of Georgetown. The industrial area, which has a developed area of 118 net ha (292 net acres) contains 163 businesses and an employment base of approximately 4,900. The manufacturing sector accounts for approximately half the employment, and major employers include Mold-Masters Limited, Satcom Division East, CPI Communications, BFG Canada Ltd. and Saputo Dairy. The area is well established and is approaching buildout with limited development opportunities remaining. The area lacks access/proximity to a 400-series highway. Mansewood Industrial Area The Mansewood Industrial Area is a rural industrial subdivision located in Halton Hills on Regional Road 25 immediately north of the Milton 401 Industrial/Business Park. Mansewood is a privately serviced industrial area with 7 businesses and an employment base of 550, with a high concentration of employment in the construction sector. With a developed area of 22 net ha (54 net acres), it is one of the smallest employment areas in Halton Region. The employment area is in proximity to Highway 401 and in close proximity to the Milton 401 Industrial/Business Park. Private servicing limits development potential, however, and the area has limited vacant land supply opportunities. Premier Gateway Business Park The Premier Gateway Business Park is situated on the southern edge of Halton Hills along the north side of Highway 401, between James Snow Parkway (and the Town of Milton) in the west and the City of Mississauga to the east. With a developed land base of 92 ha (227 net acres) entirely located in Phase 1A, the Park is an emerging employment area that has seen significant industrial and commercial retail development activity over the past five years. The employment area is home to 153 businesses employing approximately 2,900 people, with a large concentration in retail trade (notably the Toronto Fashion Outlets mall), transportation and warehousing and manufacturing. Major employers include Werner Enterprises and Wolseley Canada.

Page 24 The area offers excellent exposure and access to Highways 401 and 407 and is geographically well positioned along the Highway 401 corridor immediately west of Mississauga, a city with diminishing land supply opportunities. The employment area offers significant vacant land (including large parcels) available for development at competitive land prices both in the short and longer term. This includes Phase 1B which consists of lands that were recently released by the M.T.O. for employment land development, and which are expected to be Regionally serviced by 2018. Milton 401 Industrial/Business Park The Milton 401 Industrial/Business Park abuts the north and south sides of Highway 401 and, with a developed land area of 688 net ha (1,700 net acres), has the largest concentration of employment lands in North Halton. The employment area is home to approximately 14,900 jobs and 553 businesses and has a strong industrial base in distribution/logistics, manufacturing and transportation uses. The area is home to a number of major industrial employers, including Karmax Heaving Stamping, Gordon Food Service, Sobeys, Chudleigh s and Johnson Controls. The area north of Highway 401 reflects more recent development which is more prestige in character, and is dominated by wholesale trade, distribution/logistics and multi-tenant industrial buildings. A major retail node also exists at Highway 401 and James Snow Parkway and the employment area is also home to two major institutional employers Maplehurst Correctional Facility and an R.C.M.P. detachment. The park is approaching buildout and a decreasing variety of site options remain. Remaining sites are highly marketable for wholesale trade and logistics. Much of the park offers excellent exposure and access to Highway 401 via Regional Road 25 and James Snow Parkway and a future interchange at Tremaine Road. The park has seen significant roadway improvements, including the extension of James Snow Parkway to Regional Road 25. Derry Green Business Park The Derry Green Business Park, encompasses unbuilt employment lands located south of Highway 401 between Fourth Line and Sixth Line and extending down towards Britannia Road. Within the park, 391 net ha (966 net acres) are designated primarily as Business Park Zone with a pocket of Industrial Zone. The park offers excellent access/exposure to Highway 401, a large contiguous land area with potential to create a critical mass to accommodate a wide range of prestige and general employment uses. Servicing of the park is underway and is planned to be completed by early 2018. The

Page 25 park is expected to accommodate the majority of Milton s employment lands development over the medium term. Milton Education Village The Milton Education Village (M.E.V.) is currently the subject of a secondary planning exercise which is expected to refine the proposed employment area designations. The M.E.V. is home to the Milton Mattamy National Cycling Centre and is the site of the recently announced Laurier University Milton campus which is expected to be operational by 2021. The university campus has the potential to create a culture of innovation and build synergies between employment uses and the proposed postsecondary institutions. Further, it offers the potential to provide high-quality employment opportunities in southwest Milton, an area which traditionally has had limited employment opportunities. The area is expected to accommodate employment uses post-2021. CN Lands The CN lands immediately to the south of the M.E.V. offer comparable longer-term development opportunities. Given its locational attributes, the area is well suited for prestige employment uses including office development to accommodate research and development, professional and technical services and advanced manufacturing. CN, which owns the majority of the lands within the area, is proposing the development of a large intermodal facility on a 177 gross ha site, comprised largely of future employment land, bounded by Britannia Road to the north, First Line to the east, Tremaine Road to the west, and 2nd Sideroad to the south. The intermodal project would impact not only the nature and intensity of uses within the intermodal site but would also potentially impact employment lands within the broader geographic area. Trafalgar/Derry Lands The Trafalgar Derry lands are located immediately south of Highway 401 along Trafalgar Road, north of Derry Road. The lands have strong potential to accommodate a broad range of sectors including prestige office, warehousing/distribution and advanced manufacturing in the post-2021 period. The Trafalgar/Derry lands offer excellent access to Highways 401 and 407. They also provide direct rail access and include a planned GO train station.

Page 26 Milton 401 Industrial/Business Park Extension Lands The Milton 401 Industrial/Business Park Extension lands are located immediately north of the 401 Industrial/Business Park and are expected to accommodate development post-2021. The lands form part of a much larger employment area which has a critical mass and has been highly successful, and they can build on the development activity and success of the existing park. The 401 Industrial Business Park Extension lands are most marketable for distribution/logistics, transportation, multi-tenant industrial condos and advanced manufacturing. The lands have excellent access to Highway 401 via James Snow Parkway. 3.3.2 South Halton Employment Districts South Halton Employment Districts include existing and planned employment areas within Burlington and Oakville, as discussed below. Burlington Q.E.W. East Employment Area The Burlington Q.E.W. East Employment Area is the largest contiguous employment area in Halton Region, with a developed area of 838 net ha (2,071 net acres). The employment area extends along the Q.E.W. corridor from the Burlington-Oakville municipal boundary in the east, to roughly Brant Street in the west. The employment area is home to approximately 1,800 businesses and 36,250 jobs and accommodates a broad range of sectors including manufacturing, wholesale trade, professional, scientific and technical services, transportation and warehousing and finance and insurance. Major employers in the employment area include Fearmans, Evertz Microsystems, Aspire Lifestyles and Voortmans Cookies. While the area has a strong industrial base, it also has a vibrant office-based employment sector. The employment area contains a range of older, mature and newer development and is home to a diverse range of land uses, including prestige industrial, general industrial and major office. The employment area is one of the most marketable of the existing employment areas in South Halton. Burlington Q.E.W. East offers a size of critical mass and caters to a broad range of prestige and general employment uses; it has excellent access/exposure to 400 series highways and is served by two GO train stations. The employment area has some vacant employment lands remaining for development, including Bronte Meadows, a moderate-sized block of contiguous employment land located at the northwest corner of Burloak and Mainway. The Region has completed an area servicing plan for Bronte Meadows.

Page 27 Burlington Q.E.W. West The Burlington Q.E.W. West Employment Area is situated along Highway 403, west of the Q.E.W. and Highway 407 and east of Waterdown Road. With a developed area of 200 net ha (494 net acres), the area is home to approximately 3,300 jobs and 115 businesses. The area has a concentration of industrial and office-based employment including manufacturing, information and cultural industries, finance and insurance, professional, scientific and technical services and construction sectors. Much of the office-based employment is located on the north side of Highway 403. The lands south of Highway 403 comprise a more mature area with a general industrial character. The Burlington Q.E.W. West employment area is somewhat fragmented. Opportunities to accommodate further development are limited, with the exception along the north side of the Q.E.W. The area has excellent access/visibility to Highway 403 and is served by one GO Train station at Aldershot. Burlington North Burlington North is an emerging employment area located immediately south of Highway 407 and Appleby Line. With a developed land base of 74 net ha (183 net acres), Burlington North has limited size and is somewhat fragmented in its configuration. The area is home to 11 businesses and approximately 500 jobs with a high concentration in the manufacturing sector. Large employers in the area include Neelands Refrigeration and Hanson Brick Ltd. Given its limited size and location with exposure/access to Highway 407, it is well suited to accommodate office and knowledge-based sectors and offers opportunities to capitalize on office development potential in Burlington. Burloak Employment District The Burloak Employment District is located on the western edge of Oakville, bound by Burloak Road in the west, Twelve Mile Creek in the east, the Q.E.W. in the north and Rebecca Street in the south. The area has an employment base of approximately 2,100 and is home to 73 businesses. The employment area has a strong commercial base with approximately one-third of employment within the retail sector and a strong concentration of employment also within the professional, scientific and technical services and food and accommodation sectors. The District has a developed area of 176 net ha (435 net acres) and is approximately two-thirds built out.

Page 28 While a large part of the employment area is occupied by the Suncor Energy/Petro Canada fuel distribution facility, the area has transitioned increasingly into a major commercial node. Major employers include Canadian Tire Financial Services and a number of large-format retailers. The remaining developed lands largely accommodate office and large-scale standalone retail which have been developed in recent years. Burloak offers excellent access to the Q.E.W. and proximity to retail amenities/services. The high-profile visibility to the Q.E.W. supports office development opportunities. Oakville s Midtown Core Employment District Oakville s Midtown Employment District (Oakville Urban Growth Centre) is located along the north and south side of the Q.E.W. at Trafalgar Road. The District is bound by the CN Rail line to the south, Eighth Line to the east and Iroquois Shore Road to the north. The area is home to approximately 2,500 jobs and 176 businesses and has a large concentration of retail and accommodation/food services. Major employers include Sears Canada, Wellspring Pharmaceutical, Hudson s Bay and Atlas Lines. The District s industrial lands are located primarily on the south side of the Q.E.W. east of Trafalgar Road, and consist of mature general industrial uses. This area has seen some new office development but is largely built out; however, it offers some opportunities for intensification. The Midtown Employment District, with its amenities and proximity to the Q.E.W. and a GO train station, offers moderate potential for office development. The area offers excellent access/exposure to the Q.E.W., has on-site amenities and access to highorder transit (GO train station). It offers opportunities for redevelopment of mature industrial areas and its high-profile visibility to the Q.E.W. and its proximity to GO Transit supports office development opportunities Oakville Q.E.W. East Employment District The Oakville Q.E.W. East Employment District is situated along the north and south sides of the Q.E.W. on the eastern side of Oakville. With a developed land area of 344 net hectares (850 net acres), the District accommodates approximately 12,000 jobs and 528 businesses, and is one of the largest employment areas in Halton Region. The employment area has four sub-areas, of which the most prominent is an area largely occupied by the Ford Motor Assembly Plant and the CN rail yard. A section of employment land situated along the north side of the Q.E.W. between Eighth Line and Ford Drive is home to a number of major office and multi-tenant industrial condominiums, and is highly prestige in character. A small strip of employment land is