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Ontario Property Taxpayers Demand New Social Service Funding Formula
July, 2007
The Ontario Chamber of Commerce has called on the Ontario government to resume financial responsibility for the social services that now cost municipal property taxpayers approximately $3 billion every year. A resolution adopted at the Chamber's annual conference in May 2007 recommends a three-year phased uploading until the provincial government assumes full funding responsibility in 2010/2011.
Since 1998, social services - including general welfare assistance, social housing, public health and ambulance services - have been funded through a combination of property taxes and some provincial subsidies to municipalities. This establishes Ontario as one of a handful of jurisdictions in North America, or any G8 country, in which property tax supports income redistribution mechanisms. Meanwhile, the provincial government continues to set service standards for the social programs.
The prologue to the Ontario Chamber's resolution states: "Due to this downloading of provincially mandated programs and their resulting funding gaps, many municipalities across the province have had to deplete reserves, run up debt, defer capital/infrastructure renewal projects and/or sell assets in order to comply with provincial legislation." For example, the City of Ottawa calculates it will contribute an additional $13 million in 2007 to cover the rising costs of childcare, public health and long term care programs.
A complementary resolution called for an expedited schedule for Ontario's Provincial-Municipal Fiscal and Service Delivery Review. That process was established in August 2006 to examine the issues around what has come to be known as downloading, but no recommendations are expected until after the Ontario election this October.
Ontario Chamber members also endorsed affordable housing and reiterated its importance to business. A submission from the Toronto Board of Trade, which was approved by the membership, notes: "Housing costs are a major source of wage pressure for business. City-based affordable housing is part of the solution to urban sprawl. When there is available affordable housing in the city, this helps mitigate against lost productivity and absenteeism when employees must commute long distances to work. A lack of affordable housing can lead to a host of other more serious social and economic problems."
A subsequent Ontario Chamber resolution recommends new government policies to help developers procure land, gain access to financial incentives and negotiate the development approvals process with greater ease.
For more information, see the web site at www.occ.on.ca.
GATINEAU'S SHARE OF FEDERAL OFFICE SPACE TO INCREASE
Plans for two new office buildings in Gatineau will redistribute the federal government's employment base on the Quebec and Ontario sides of the Ottawa River. Since the late 1960s the government has aimed to house 25% of its workforce in what was formerly the City of Hull - now the central core of the amalgamated City of Gatineau. In recent years that informally set ratio has slipped somewhat so that 77% of government office space is currently located in Ottawa.
Public Works and Government Services Canada (PWGSC) recently issued requests for expressions of interest (RFIs) for more than 800,000 square feet of new office space in Gatineau, and has negotiated leases for approximately 420,000 square feet of space in two existing buildings. Prospective developers have been asked to submit bids for a 377,000-square-foot building on Crown land near an existing government office complex, and for a 400,000-square-foot building on an unspecified site in Gatineau's central business district.
The newly leased premises and proposed new construction will allow for relocation of civil servants from buildings where leases are expiring into space that meets the government's latest standards for accessibility and sustainability. Approximately 6,200 employees will be accommodated in the four sites.
The federal government assumes the leased space in June 2007 and January 2008. Completion of the new buildings is envisioned for 2010.
REDEVELOPMENT OPPORTUNITIES OPEN ALONG PORTAGE & MAIN
A new storefront presence for Winnipeg's downtown development agency, CentreVenture Development Corporation, reinforces its strategic focus on 25 blocks along Portage Avenue and Main Street. Earlier this year, the agency, which has been a catalyst for the redevelopment of surplus publicly owned properties and other problematic sites in the city's core, released a new three-year plan for the downtown arteries.
Strategists hope to facilitate at least three redevelopment projects that could spur still more investment in the area, and also draw new business tenants and residents to support burgeoning commercial initiatives. The plan also calls for better security and more parking to improve convenience and comfort levels for people coming to the downtown.
The identified area encompasses 15 blocks of Main Street, stretching from Assiniboine Avenue at the south to Higgins Avenue at the north, and 10 blocks of Portage Avenue from Memorial Drive to the intersection with Main Street. This is to be known as the Heart of Gold. "These are two key streets in Winnipeg and they are long overdue for some attention, particularly Main Street," says Ross McGowan, CentreVenture's President and CEO.
CentreVenture was first established in 1999 as an arm's length municipal agency, with a volunteer Board of Directors from the private sector. Since then, it has actively promoted investment in downtown Winnipeg as a manager of surplus government properties, a promoter of downtown leasing opportunities, a coordinator of a revolving loan fund and the City's Heritage Conservation Tax Credit Program, and as an advocate at City Hall.
The Heart of Gold plan calls for a comprehensive rehabilitation of several under-performing and/or blighted properties currently held by a number of different owners. CentreVenture proposes to acquire and consolidate the sites, and call for redevelopment proposals, including possible public-private partnerships. "We're in the process on Main Street of acquiring a fairly good chunk of land, and we do have a use for it, but it's very contingent on us quietly assembling the land," McGowan reports.
CentreVenture has traditionally provided gap financing to assist developers with project costs, but it is now lobbying the Winnipeg and Manitoba governments for additional incentive programs. For example, several cities in North America use a mechanism known as tax increment financing (TIF) to borrow money for infrastructure improvements/and or provide incentives for redevelopment and then repay the loans from the subsequent increase in property values and tax assessment.
"We are looking at it right now," McGowan says. "The City has the authority to create a TIF zone, but we'd also like to see provincial participation because that would bring in the education portion of the tax incentives.
In mid-July, CentreVenture moved its own offices into a vacant heritage building on the strip of Main Street targeted for revitalization. "Not only will this prominent location foster the agency's interaction with private sector developers, investors and stakeholders, who are the key players in downtown revitalization, it will light up another vacant building on Main Street," says Polly Craik, Chair of CentreVenture's Board of Directors.
For more information, see the web site at www.centreventure.com.
SASKATOON DEMYSTIFIES THE PLANNING PROCESS
Residents of Saskatoon have new resources to help decipher and negotiate the development planning process. In the fall of 2006, the City of Saskatoon released A Guide to City Planning and Development in Saskatoon, a comprehensive overview of municipal operations and departmental responsibilities, urban planning policies and procedures, and opportunities for the public to play a role in decision making. It's part of a planning education program that also includes two workshops for community association volunteers and others interested in learning how to review and comment on amendments to zoning by-laws, development plans and other development applications that involve public consultation.
The planning education program complements ongoing municipal initiatives. In recent years, the planning department has embarked on a local area planning exercise to devise new comprehensive plans for 12 existing neighbourhoods, primarily located within Saskatoon's central core. In working with the residents in the various neighbourhoods, planners have been answering similar questions and providing the same kinds of information about how the planning process unfolds. That basic information is now set out in the guide.
It also explains how residents can approach the planning department. "What has been happening is that other neigbhourhoods are seeing the success of the local area plans and they want their own plan, but not all neighbourhoods actually need one," says Livia Kellett, a Senior Planner with the City of Saskatoon. "We realized that they needed some information about how they could start working with City and where the opportunities exist."
The guide reinforces the City's public engagement strategy, which directs all departments to inform the public and take it into account in the decision making process. "It's really a set of rules and procedural steps for the City to provide a more consistent approach for communicating and receiving feedback," Kellett explains.
Thus far, the planning guide has been distributed to all of Sasktoon's community associations and to all other City departments. "I've noticed a lot of City staff are using it," Kellett says.
For 2007, the planning department has also developed two workshops. Approximately 25 attendees turned out for the first one in May, which provided a general overview of how development is planned and regulated. The second workshop, scheduled for November, will provide instruction on how to review and comment on planning proposals.
For more information, see the web site at www.saskatoon.ca/org/city_planning/planning_education_program
ORGANIZED FINANCING CALLED KEY TO CALGARY'S ECONOMIC DIVERSIFICATION
Entrepreneurs outside the energy sector report obstacles to raising capital in Calgary despite the widespread presence of financial institutions supporting the oil and gas industry. A recent report from Calgary Economic Development (CED) recommends tax policies and cross-sectoral awareness strategies to better connect companies with prospective investors.
The disproportionate strength of the energy sector has been something of a magnet for expertise and talent within Calgary, which may be undermining diversification. The report notes: "In other sectors, Calgary lacks a critical mass of successful entrepreneurs and investors who have had success in new ventures and are willing to reinvest their time and money into developing new firms."
Financiers' traditional focus on oil and gas may be narrowing the scope of their considerations, while start-up companies may need a more sophisticated approach to make their case. The CED report, entitled Financing Our Future, suggests some approaches for building and reinforcing relationships.
"One of the key messages coming out is that Calgary is not lacking in financing. Rather it is lacking in organized financing," the report asserts. "Entrepreneurs are not fully aware of how to access capital in the city and investors are not fully aware of the investment opportunities that exist."
The report calls for more funding for the commercialization of emerging technologies - perhaps through a provincial R&D tax credit. It also outlines three tax policies to support venture capital investment: the creation of a fund-of-funds that would invest in other venture capital and private equity funds; labour sponsored investment funds that offer tax incentives for investors; and a flow-through tax model similar to the one that has encouraged investment in the oil and gas sector.
Calgary Economic Development will be consulting with the business community throughout the summer and fall of 2007 to get feedback on the report. For more information, see the web site at www.calgaryeconomicdevelopment.com.
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