Ottawa’s municipal employees are making 41 per cent more than they were just five years ago.
This increase, according to the Greater Ottawa Chamber of Commerce, means higher user fees and taxes for businesses. As a result, some Ottawa business owners are looking to relocate to other cities.
Eric McSweeney, the chamber’s chair, points to the example of Ketchum Manufacturing Inc., an Ottawa business that considered moving from its Richmond Road location to a new Cumberland Street site, until it discovered that the city was going to charge $500,000 in development fees for a building worth $2.3 million.
So instead, it was “so-long” Ottawa and “hello” Brockville, a city with lower taxes and no development fees.
The chamber recently submitted a report to city council showing that last year Ottawa was the third most expensive city in Canada in which to do business.
And despite being third overall, Ottawa’s property taxes are the priciest in Canada – ahead of both Toronto and Vancouver.
McSweeney says that, while Ottawa can’t simply obliterate fees, the city needs to find ways to compete with nearby regions.
Other than North Grenville, no other area surrounding the nation’s capital charges development fees, the same fees that McSweeney says are driving businesses out of Ottawa.
While general “non-residential” development costs amount to $9.64 per square foot in Ottawa, neighboring municipalities such as Arnprior, Renfrew, Pembroke and Carleton Place charge their businesses a grand total of zero dollars.
Mayor Bob Chiarelli has suggested that the number of businesses coming to Ottawa is greater than the number moving out, but the city’s three million square feet of vacant office space would suggest otherwise.
The city’s 2005 draft budget shows clear cases of under-spending and over-charging.
While it forecasts $10.7 million in expenditures for building services, projected fees and charges for the same activity total almost $20 million – an obvious imbalance.
Add all of this to city council’s November decision to give itself a 25 per cent raise, and the frustration of local business owners becomes a little clearer.
For a city that prides itself on competitive excellence, Ottawa has increasingly shown its businesses that they are low on the priority list.
Ottawa’s 20/20 economic strategy acknowledges that small business drives a city’s success.
Unless it is prepared to watch its businesses pack up and leave, the city needs to make good on this recognition, making business a priority.