Economic Base Analysis - Investment Focused Strategy
Collingwood 2000/2005

Profiling Collingwood's Economy

The 2001 Census data, although comprehensive, is now so dated we decided to use a different database to profile Collingwood’s local economy.

The “Canadian Business Pattern Data” is Statistics Canada’s record of the number of business establishments by type and by size in the local economy and includes all businesses remitting payroll deductions and GST payments to CRA (Canada Revenue Agency). We examined data on Collingwood for the period December 2000 to December 2004 inclusive.

Employment by Industry

Statistics Canada warns that the Business Pattern Data is not an accurate measure of total employment however it does track changes in business sectors with a fair degree of accuracy. To approximate “Total Employment” we multiplied the number of establishments in each industry sector by a number in the mid-point of the employment size range for each sector. The multiplication factor was adjusted until the results corresponded with the Census figures for “employment by industry”.

A comparison of Census and Business Pattern Data is shown in Figure 1. The Business Pattern Data differs in the number of employees in a number of sectors however the patterns match and the data provides a fair degree of accuracy when tracking trends in industry sectors.

The largest employer groups in Collingwood are the Manufacturing and Wholesale/Retail Trade sectors with Health and Accommodation/Food sectors also ranked as significant employers in Collingwood.

The following graph (figure 2) shows the estimated changes in employment in select industries in Collingwood (those with more than nominal employment) from 2000 to 2004.

Source: Canadian Business Pattern Data – Statistics Canada 2000-2004

Only one sector, Manufacturing, posted a decline during the study period based on our analysis of the Business Pattern Data.

The Education sector is not shown in this chart despite being a significant employer in Collingwood because for purposes of the Business Pattern Data, employment in the Simcoe County District School Board is recorded in the community where the Board office is located.

Location Quotient Analysis

To provide a context for these employment statistics economists and economic developers typically calculate the ratio of “employment by industry” to “total employment” and compare it to the Province. The result is called a Location Quotient (see figure 3).

In a Location Quotient analysis:

-- When the LQ = 1.00, the ratio of that industry’s employment in the local area is the same as that for the reference area (Ontario).

-- When the LQ > 1.00, the ratio of employment in that industry is higher than that for the reference area. A very high LQ (LQ > 1.25) implies the area possesses a natural “competitive advantage” for that industry. It also shows that the industry is serving customers outside the region.

-- When the LQ < 1.00, the ratio of employment in that industry is less than that for the reference area. When the LQ is significantly lower than the norm (LQ < 0.75) it shows there is leakage from the local economy to another nearby marketplace.

The Location Quotient Analysis shows that Accommodation & Food Services sector (the core of the tourism industry) despite employing fewer people than several other sectors (Manufacturing, Trade and Health Services) is the dominant industry in Collingwood in relative terms with an LQ of 2.60. In essence the employment in the Accommodation & Food Services Industry is roughly 2.6 times the provincial average.

Listed in order of concentration (by LQ) the following tables summarize the “Significant” and “Under-Represented” industries in Collingwood based on their location quotients.

Note the "Knowledge Based Services" (Finance & Insurance, Professional, Scientific & Technical Services, Information, Culture and Recreation Services) are all under-represented in Collingwood.

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