By Pablo Fuchs
Ottawa’s love affair with amalgamation came to an abrupt end when news hit that the process is going to cost $139 million more than expected.
The focus of amalgamation has now switched dramatically since the beginning of 2001.
The new year brought new hope that Ottawa would be better equipped to deal with the city’s continued growth as a cohesive unit, instead of separate, associated municipalities.
Now that it’s all going to cost a lot more, the provincial government has pledged to help out the city, but only for half the cost.
However, this still leaves the municipality to front a $70 million shortfall.
So, where is this money going to come from?
The mayor and city council have said projects like the Smart Growth conference and the Light Rail Project will have to be scaled back dramatically in order to pay off this bill. But it’s going to take a lot more than that.
As a result, the only way the city will be able to gather the funds is through taxation.
But rather than raising property taxes, the municipal government will undoubtedly hurt the very ones that have helped this city become an economic success: the business community.
Taxing businesses is the easiest solution for city council. First off, the amount of money collected from businesses will far outweigh any sum gathered from private citizens.
Secondly, it’s a better public relations move to tax high-profiting companies instead of locals who already pay enough for public services.
Why should these companies have to pay?
After all, if it weren’t for the high-tech growth, Ottawa would still be a dull government town, not a city on the verge of becoming one of North America’s major economic centres.
But such a decision could have a very damaging effect on the business community.
It could end up crippling the potential growth of the high-tech sector.
An increase in business taxes could also deter new companies from setting up shop here and see them move outside the city, where costs are cheaper.
Companies would have to dramatically scale back their costs. Usually, the first cuts are with employees — possibly creating a labour crisis in the city.
Products, a company’s backbone, would undoubtedly face a reduction in quality due to limited funds going into research and development.
One way or the other, someone’s going to have to pay for amalgamation.
Although the provincial government forced it, the Tories have said they will not pay more than one cent over half of the total cost.
Unfortunately, when all’s said and done, it will probably be businesses that end up covering the cost.
Instead, the city should think of more creative ways of making money in order to avoid damaging Ottawa’s dynamic economic growth.