$100M plan to boost Calgary economy moving forward

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The wheels are in motion on a $100-million plan to kick-start Calgary’s struggling economy, with a decision Tuesday to create an arms-length agency that could begin funding projects and businesses as early as this spring.

But Tuesday’s meeting of the city’s finance committee — which gave tentative approval to renew a tax-relief program for businesses — also saw councillors vote to oust Mayor Naheed Nenshi from the group that will ultimately oversee the Economic Development Investment Fund (EDIF). 

Some councillors raised concerns about “politicization” of the board’s decisions by including the mayor and a council member, voting 4-5 against including Nenshi, while retaining Coun. Jeff Davison. The decision still awaits a final vote of council later this month.

Nenshi dismissed the move following the meeting, arguing his office will play a key role in economic development activity regardless of who ultimately sits on the board.

“As mayor, I have a different economic development role than all other members of council because I actually close deals with people,” Nenshi said following the vote. “I sit down and talk to people and say, ‘What’s it going to take to get you to move to Calgary?’”

“This is $100 million of taxpayer money and I think that it’s important that council have some oversight.”

Councillors also questioned the board’s diversity when it came to expertise in sectors other than energy and commercial real estate, and asked whether there were plans to tap more women or minorities to participate.

Mary Moran, CEO of Calgary Economic Development, said the board will become more diverse in the coming months as they add and swap members. 

But some members of the interim board grew exasperated with council questioning Tuesday, arguing that the process had already dragged out for too long.

“What I really want council to do is let us get going,” said interim board member Barry Munro. “We’ve been talking about this for nine months and it was an urgent priority nine months ago. I know that this takes time, but it is extraordinary to us. In my world, where I come from, nine months later we’re still thinking about this stuff?”

When finally approved, the EDIF will be managed by a wholly owned subsidiary of the City of Calgary, much like the Calgary Municipal Land Corp. (CMLC) or Calgary Housing Corp. (CHC), and will administer funds aimed at helping Calgary compete internationally to attract economic investment to the city. 

EDIF funds could be used to develop projects in Calgary from smart logistics hubs, biomedical hubs and research parks, to a centre for cannabis excellence that could include regulatory testing and financial services, according to Calgary Economic Development.

Around 300 projects have already been considered for funding and a formal application process will be launched in April. 


Tuesday also saw committee members vote on the continuation of a tax relief program that will limit non-residential property tax increases. 

Councillors elected to continue the program for a second year as suburban business owners continue to face huge tax hikes as a result of a multibillion-dollar drop in assessed values in downtown offices due to the economic downturn.

Similar to 2017, the program will limit non-residential municipal tax increases to five per cent, funded through a $41-million subsidy from the city’s fiscal stability reserve. 

Committee heard Tuesday that last year’s program helped more than 5,000 property owners to the tune of $25.8 million; one of the program’s largest beneficiaries, Chinook Centre, received $2.4 million in tax relief.

But some councillors questioned city assessors about the effectiveness of the program since it relies on landlords actually passing on the tax break to business tenants.

“This is the biggest problem with it,” Nenshi acknowledged Tuesday. “We believe the vast majority of this decrease has not been pocketed by the landlords but has flowed through to the tenants. And in cases where the tenants are not getting it, I really do encourage them to call their landlord or, heck, call me, and let us know what’s going on.”

Nenshi also said the city will need to adjust its method of resolving the downtown property tax shortfall, since drawing crash from the rainy-day fund to subsidize businesses can’t continue indefinitely.

“It can’t go on forever and ever,” Nenshi said.  “At some point, we’ve got to refill that downtown and that’s what the Economic Development Investment Fund is partially about, because the best way to fix this is to bring the assessment base back up.”

Twitter: @mpotkins

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