Foreign Investment

Feb. 2, 2011

Transcript:

Ted Simons: Mexico is Arizona's number one foreign trading partner, but Canada trumps our neighbor to the south when it comes to foreign investment in the state. Here to talk about economic ties between Arizona and Canada is Glenn Williamson, founder of the Canada-Arizona Business Council. Good to see you here.

Glenn Williamson: Absolutely, I'm thrilled to be here.

Ted Simons: Talk about the relationship between Arizona and Canada.

Glenn Williamson: It's one that started 50 years ago. It started with people from western Canada coming down to Arizona and over the years has migrated to real estate, it's gone from agriculture to real estate to now aerospace. It has gone from 20,000 Canadians coming down, to we believe we will be close to 600,000 Canadians this winter.

Ted Simons: Let's first start with geography. Most Arizona residents consider western Canada the region from which we get most of the visitors and investments and such. Is that still the case?

Glenn Williamson: Historically that was the case. Because of 84 nonstop direct flights out of Arizona to Canada, specifically Sky Harbor every week, we see Toronto, Ottowa, and Montreal emerging into this marketplace. Because of the ties with aerospace, it is a very large corridor of traffic.

Ted Simons: aerospace.. It's a biggie.

Glenn Williamson: It's absolutely a big one. We don't sell things to each other anymore, we make things. That example would be Honeywell by the airport sells $400 million in jet engines to Bombardia up in Montreal, who makes a C series of jet and sells it to Mesa Airways who leases it to US Airways.

Ted Simons: Is that particular chain getting stronger or bigger? We've heard that Arizona is boom and bust as far as the economy is concerned. What about that particular aspect of the economy?

Glenn Williamson: We're seeing huge investments made. Canadian companies like Mytel are buying companies down here because they recognize the growth in Arizona. Epcor made a $470 million acquisition of a water company in Phoenix, because they know Phoenix is coming back, this bubble is going to clear up and these companies are preparing themselves for that.

Ted Simons: Let's talk about individuals. I understand a lot of Canadians would go to Florida in years past and maybe move permanently. Now I understand a little migration to here in Arizona, huh?

Glenn Williamson: There is erosion occurring. It's very similar to the grapefruit league and cactus league. Canadians have historically 2.5 million of them have gone to Florida. Now because of taxes and insurance, specifically for hurricane insurance, there is a migratory shift of current. We'll settle for that, our objective now as we go through budgetary problems in our state, we need money. Canadians are sitting on wealth in real estate; residential and commercial, companies that want to move to the states are now looking at moving to regions that don't have snowstorms like the one going through the East Coast and the Midwest. They are buying large homes here and making investments in this community.

Ted Simons: Are they making -- back to real estate here -- are the folks coming down buying second homes or buying investment homes and renting them out for the most part?

Glenn Williamson: Historically it was investment homes. Now it's second homes. It used to be smaller homes but now we're seeing larger homes purchased every week by Canadians.

Ted simons: The profile of the Canadian buying, let's stick with real estate now because it's more of a real estate transaction. The profile, is that changing?

Glenn Williamson: Yes, absolutely. The transition has been the older generations of Canadians in the western provinces that would be looking to come down to get away, now we're seeing businesspeople in their 30s, 40s and early 50s saying, I really like to play golf, I want to have a home somewhere else, I want to be close to California. There's no reason I shouldn't set my home up here and then move my business here.

Ted Simons: Do you think Arizona is doing enough right now or doing a good enough job in attracting some of these businesses?

Glenn Williamson: Arizona is doing a magnificent job. The state of Arizona has had a tourism office in Toronto for a decade, and they have done a great job of doing work across Canada. The new commerce authority has a trade office in Montreal and they are doing that. Governor Napolitano when she was governor went to Canada. I know they are inviting Governor Brewer to go up. The mayor of Phoenix was just recently in Montreal, and he's been up to Toronto, as well. There's an outreach to Arizona recognizing the wealth migration that is opportunistic for the State.

Ted Simons: Think the state is still Mexico-centered? Is it shifting a little bit? What are you seeing out there?

Glenn Williamson: I think it's very important for a state that is a young state like Arizona, that has had long-standing ties to Mexico, as it grows and becomes more international, the reliance on Germany for certain businesses, reliance on Japan for semiconductor businesses, reliance on Canada for other types of businesses is a good blend. As Arizona becomes more international we need to balance the trade partnerships, if you will, across the rest of the globe so we're not geographically centrist to one country. It's no different than if you're a business. You don't want to have just one customer. It's always better to have four or five.

Ted Simons: It's a good relationship even though both sides are a little protective of their hockey teams?

Glenn Williamson: Absolutely. Spectacular.

Ted Simons: Glenn, thanks for joining us, we appreciate it.
Glenn Williamson: I do want to mention one last thing or I will be in trouble. There is a picnic February 5th, Saturday, the great Canadian picnic that's been going on since 1953. Three to 4,000 Canadians go and it's filled with games and all kinds of fun stuff, everyone's invited.
Ted Simons: Glad you got a chance to mention it
Glenn Williamson: I would be in trouble if I didn't
Ted Simons: Thank you.