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Economic development can be anything but

OFF THE BEACH

Whenever you hear municipal candidates talk about “creating jobs,” be worried.

Municipal government has some very specific functions. Job creation, per se, is not one of them. When the politicians start spending money to attract specific businesses, they are playing with fire. In essence, they are using other businesses’ tax dollars to potentially unlevel the playing field.

I saw it happen here on the Sunshine Coast back in the mid-1980s when the SCRD’s economic development office was mono-focused on bringing fish farms to the Coast. The number of farms exploded in a short period and conflict was happening all over. Angry residents and tourism operators who were directly impacted were doubly angry because their taxes were helping to finance, or at least facilitate, their own downfall. Under growing public pressure, the SCRD pulled the plug on the operation.

The worst case of economic development I’ve seen was in Winnipeg in 1999. City hall gave Vancouver-based A&B Sound an $835,000 heritage tax credit to set up shop in a rundown but somewhat historic building on Portage Avenue. The company painted the building purple and the mayor boasted about his coup.

On the other side of Portage Avenue was a well-established business called Musicplex that carried the best selection of CDs in the city, at least that I was aware of. The two stores were in direct competition. Musicplex went out of business within a couple of years. A&B Sound closed its doors in 2005 when the chain declared bankruptcy. Now there was an empty purple building and no major CD store on Winnipeg’s historic main stem. It was a case of one plus one equals zero.

That’s economic development math at its most obscene.

Even if economic development is not undermining the natural economy, it can exhaust a community’s energies by courting “the big project” that never comes. I saw that happen in towns in rural Alberta and Manitoba. After years of presentations and delegations and meetings with ministers and investors, not one project was ever realized. But staff earned high salaries and politicians had something to pin the public’s hopes on for at least one election cycle. As for the jaded and burnt-out volunteers, well, they did volunteer.

There is nothing wrong with marketing a community’s assets to the outside world or being “open for business.” But job creation quotas sound like a recipe for desperation and disaster. And having business people sitting on an economic development board does not guarantee that other business people’s interests, or the interests of the general public, will be protected.

The best way to avoid empty purple buildings is for local government to stick to providing core services, keeping tax rates low and treating development proposals with impartiality. If that’s not good enough for some of these candidates, maybe they really want to be doing something else.