St. John’s: A destination for business

Believe it or not, the municipal election for the City of St. John’s is just around the corner. The candidates have already started their campaigning as they take advantage of the summer weather to get out and meet and greet voters in their respective ridings.

As citizens of the city, I know you are keenly aware of the issues that directly impact your families and can discuss those with the candidates when they come knocking. What about those issues that are not so obvious, but which also impact you? I want to take the opportunity in this article to help you to be prepared, when the candidates come a knockin’ at your door looking for your vote, to also know the concerns of business.

Why should you care, you may ask. If you have been following my column this year, then you know that I have repeatedly said it is business that drives the economy of the province. We need a strong business community to grow and thrive.

The members of the St. John’s Board of Trade have chosen to set up their businesses here. They have chosen to invest their hard-earned cash here. They have chosen to raise their families here and they have chosen to employ individuals such as yourself.

Our members are committed to this city, and their concerns should be taken into consideration as you decide for whom to cast your ballot.

Business pays close to onethird of all the revenue the city collects.

It is business that decides to build hotels, shopping centres, and office and warehouse buildings, employing thousands during the construction phase and many thousands later who work in those businesses.

So if you shop, live or work in St. John’s you have a vested interest in the viability of our business community and you should be concerned about impediments to business growth.

Businesses have plenty of options in the neighbourhood if the City of St. John’s policies are not to their liking. There are 13 other municipalities in the Northeast Avalon. We need businesses to continue to choose St. John’s, as their tax dollars contribute to funding the costs of services we all receive.

So, what sort of things need improvement in St. John’s to entice business to choose the city as their destination for business?

Spending

There are themes that are common to all of us, business or individual — the pace of spending at city hall being a primary one.

I acknowledge that gradual progress is being made in containing spending at city hall. The extensive program review conducted last year did see savings.

But this is a continuous process. Let’s not take our foot off the gas. It is critical for all of us — business and individuals alike — to have our tax dollars spent wisely and with due care. More effort to curtail unnecessary spending and continuous process improvement is essential to an efficient and effectively run city.

Development approval process

Other items are less obvious. We all know that time is money and that the delays in a development approval process could mean the difference in a decision for a business to choose an alternate municipality to establish their operations. This process has to be lean and competitive and enable business to quickly execute on their development.

We know that building permits have slowed as the economy has stalled. A sign of a prosperous city is construction and development. We do not want business to walk away from creating jobs and wealth for its employees because the city unnecessarily delayed or impeded their development process or imposed permit costs so high as to detract from investment.

Fairness ratio

Did you know that in many cities there is a fairness ratio adopted to balance the taxes paid by business with those paid by individuals? The City of St. John’s has not adopted this concept of a fairness ratio. Each year when the mill rate comes out, the amount of tax that business pays relative to residents tends to increase at a faster rate.

Why should business bear the brunt and pay more? Many other progressive cities looking to encourage business investment have adopted a fairness ratio. Not only is it fair, but it is predictable, which is just what we need to entice investment.

Municipal assessment

Assessment of real property should be based on market value, as this is the universally accepted standard. The Special Purpose Property Regulations being advocated by the city are fundamentally discriminatory and, if they were to be reintroduced, they would make St. John’s an uncertain destination for business investment and could raise costs for everyone.

For example, if St. John’s International Airport was designated as a special purpose property by the city, its assessment and annual municipal tax bill would increase dramatically. The Airport Authority, as a not-for-profit entity, would have no alternative but to pass these increased taxation costs along to the travelling public and all users of the airport, including the airlines that serve our city — all resulting from the use of a discriminatory municipal tax regime.

Clearly, the city needs to confirm a more equitable approach to the municipal assessment of business properties in St. John’s.

“Growth is never by mere chance; it is the result of forces working together,” said James Cash Penney, founder of Jcpenney. Armed with this information, I hope that you will ask your candidate, when they come knocking at your door, what they are doing to attract more businesses to set up in our city.