$10M fund to spur economy may be just the beginning

The $10 million approved by city council earlier this week and earmarked for stimulating the local economy is just a starting point for what could become a much larger, long-term investment fund, the president and CEO of Calgary Economic Development said Tuesday.

However, Mary Moran emphasized that Calgary’s new Economic Development Investment Fund — which council voted to kick-start Monday with a $10-million injection from the city’s rainy-day fund — is not about offering subsidies to private enterprises, but about leveraging municipal funds to help public and private partners respond to the ongoing economic downturn and capitalize on new opportunities.

“I want to be perfectly clear. This is not meant to be a handout,” Moran said in an interview. “This is meant to be, ‘if you have a good idea, we can help you.’ ”

The establishment of an Economic Development Investment Fund — a pool of city money that can be accessed by city departments, non-profit groups, and private sector partners to address economic and public needs — was one of the ideas that came out of an invitation-only summit held in downtown Calgary in March to talk about potential solutions for the city’s ongoing economic woes.

While labour market experts have suggested a slow recovery is underway, Calgary’s unemployment rate continues to be the highest among Canada’s major cities and the Conference Board of Canada has projected the city’s downtown office vacancy rate will hit a record 27 per cent this year.

Council will be discussing as part of its budget deliberations in November whether to add to the initial $10 million and, if so, how it should be funded. Similar have been used in several other North American jurisdictions — in 2004, Kitchener, Ont., established a 10-year, $110-million fund paid for through a special 10-year capital levy. The fund contributed to a wide array of projects, from streetscape improvements and residential densification to a central library, downtown community centre and the University of Waterloo School of Pharmacy.

“When you think of jurisdictions that have accelerated their growth and diversification, such as Kitchener-Waterloo, the money they have been able to work with is much greater than this,” Moran said. “But $10 million is a great start.”

The idea is for Calgary Economic Development to administer the money, but a yet-to-be-appointed council subcommittee will be make the decisions about which projects to approve. Across North America, Economic Development Investment funds have been used for everything from business park developments and corporate headquarters’ relocations to downtown parking improvements and arts, culture and sports facilities.

“It could be things as simple as how do we expedite or help you navigate the regulatory process with the City of Calgary. It could be partnerships in land — things like land swaps or a payback program for a potential customer,” Moran said. “We’ve even been having conversations with the post-secondaries about them increasing their presence in the downtown core.”

In addition to launching the fund, council approved a package of amendments to the City’s Land Use Bylaw aimed at removing barriers, shortening timelines and reducing cost and risk to building owners and businesses leasing space in the downtown core. The new rules — which take effect on Monday — waive the requirement for a development permit for landlords who are changing from one use to another (for example, from office to retail); making external alterations to an existing building; or making an addition of less than 1,000 square metres.