The city of Cornwall has become, in recent years, a hub for the factories and distribution centers of several companies serving the Quebec market. According to experts interviewed by The duty, it is in particular Ontario’s more flexible labor laws that would attract these companies.
The sale of municipal land does not stop in the industrial park of the small Ontario town located 45 kilometers from Quebec. “The last four years have been the best of my career,” says Terry Landon, a commercial real estate agent in Cornwall for forty years.
During the last years, Quebec companies such as Biscuits Leclerc, Olymel and CMP — a Châteauguay-based company that offers mechanical solutions — have established themselves in the municipality. In January 2020, Loblaw decided to close its warehouses in Laval and Ottawa in order to move its operations to Cornwall. The operations in Laval were too expensive in the eyes of the company, thinks Marc Wulfraat, president of the logistics consulting firm MWPVL International. “The company said to itself that it was strategic to reduce its operating expenses and therefore to move away from a union,” he observes. Loblaw did not respond to questions from the Duty regarding the relocation of its warehouses.
Companies establish their operations in Cornwall in order to transport and sell their products in Quebec without having to worry about unionizing their employees, unlike operations in Quebec, according to professor of logistics Sam Lampropoulos, of the college in Toronto George Brown. Albert Goodhue, president of Groupe GCL, a logistics consulting firm, confirms the phenomenon. “When we see the opening of a distribution center in Cornwall, we understand that there is a link with the Labor Law” which is more permissive in Ontario, says the man who is in contact with many large companies in Quebec and Ontario. .
All the companies located in the Ontario municipality serve Quebec in addition to the maritime provinces or eastern Ontario, explained several experts to the Duty. For those who follow the evolution of Cornwall, seeing businesses set up in Ontario to serve Quebec customers is disturbing. “It’s a bit hurtful,” drops Marc Wulfraat. In 2006, he notes, Jean Coutu also chose to settle in eastern Ontario, this time in Hawkesbury. The company moved there to be competitive, assures Mr. Wulfraat, “but it’s a slap in the face”. Quebec represents “more than 20% of the population [canadienne], we deserve to have our logistical facilities,” notes Albert Goodhue.
An “anti-union” climate
Cornwall once had greater union density, union leaders remember. According to them, one of the disruptive moments in the reduction of the rate of unionization in the city was the closing in 2006 of the Domtar plant, a Quebec paper company. Suddenly, the city’s labor force has shifted from the private sector to the public, which is more “timid” in its demands related to working conditions, says Cornwall Councilor Elaine MacDonald.
But even on a provincial scale, Ontario stands apart from Quebec. In 2019, the unionization rate in the province was 26.5%, compared to 39.3% for Quebec. Quebec is also one of only two Canadian provinces, along with British Columbia, to have passed anti-scab legislation. “The climate in Ontario under various Progressive Conservative governments has been anti-union,” said Louise Lanctôt, president of the Cornwall Labor Council.
The papermaker’s departure coincided with the rise of Walmart — the “gold standard in union resistance,” according to Elaine MacDonald — which opened its first distribution center in 1999. The American giant has since added more. three others for an area equivalent to sixty football pitches. Walmart’s arrival in Cornwall has captured the industry’s attention. Shoppers Drug Mart targeted the city as one of the potential sites for a distribution center in 2010 because of Walmart’s presence, says Tony Austen, the company’s former national real estate director. During this period, the company opened a 550,000 square foot center on 64 acres to serve Quebec and Eastern Ontario.
“The City practically gave us the land,” admits Mr. Austen, referring to the low purchase price, which he did not want to reveal (Bob Peters, the director of economic development for Cornwall, says that this was probably around $30,000 an acre). But the possibility of avoiding labor disputes in Quebec also weighed in the balance when it came time to make a decision, concedes the former Pharmaprix executive.
Continuous investments
Further investment followed in Cornwall in subsequent years. On January 10, the City sold 159 acres; there are only 200 left for sale in the area, which has about 1600 in total.
In 2018, Biscuits Leclerc — known for its Celebration cookies — decided to buy a 160,000 square foot factory there. “It makes sense from a logistical, labor and price point of view [de l’espace] according to real estate agent Terry Landon. Marie-Josée Massicotte, director of communications at Biscuits Leclerc, explains, however, that “several factors are taken into consideration before making the necessary decisions regarding the location of our factories, including ensuring the fluidity of our operations and our business relationships. The lower union density, she says, “has no influence on our final decision”.
In 2013, Olymel spent $40 million to improve its facilities, where it notably produces bacon. When asked if the difference in labor laws between the two provinces had encouraged Olymel to move to town in 2005, Richard Vigneault, its spokesperson, replied that he ” [n’avait] not this information.
Over the past two years, CMP has opened two 90,000 and 40,000 square foot factories in Cornwall. CMP did not respond to questions from the Duty regarding the choice of location.
Immigration is now a means of recruitment for companies based in the surrounding area. In March, Olymel recruited 15 workers from the Philippines and 9 from Mauritius for its plant. In August, Biscuits Leclerc organized a job fair in Cornwall to recruit employees. Carla Kingston, who in 2014 became coordinator of a new logistics program at St. Lawrence College’s Cornwall campus, estimates that “99%” of her students come from overseas.Have
This story is supported by the Local Journalism Initiative, funded by the Government of Canada.