The City of Hamilton’s Selective Subsidies

The city is poised to implement increased business licensing fees which have been deferred from previous years (City debating large fee increases for business licenses, Hamilton Spectator August 16 2012).

Reading this brought forth many frustrations that have been bubbling for some time. It is interesting that some councillors are supporting these fees in the name of fairness. Councillor Whitehead says  ”It’s hardly fair to expect taxpayers to subsidize a cost of doing business”. But a year ago, he questioned our raising development charges for businesses and homebuilders building anew: “I don’t want to create a disincentive or to make ourselves less attractive”.

So where’s the love for our current business owners?

The 300 jobs that Canada Bread brought to Hamilton did not come for free. CATCH reports that Canada Bread paid $75,000 to $100,000 less than the going rate per acre for their 24 acre parcel, required $500,000 from the city for “site preparation and road upgrades” and received $1,124,357 in tax rebate grants for LEED building practices. They also received a $2,000,000 grant from the federal government.

Yet the city is concerned about taxpayers subsidizing the cost for bylaw staff to monitor food trucks, visit lodging homes and inspect taxicabs for safety?

This brings to question a world of subsidies that our city officials are willing to give to other projects.

Did you know that the city and province are teaming up to build a cloverleaf at Clappison’s Corner, where highway five will go over highway 6? The justification for this is to service traffic demand for the behemoth shopping centre slowly being built there as well as future residential growth in the area.

The cost to taxpayers? The city and province won’t say, for fear of tainting the bid process. But “a very preliminary figure” from 18 months ago pegged it at over $60,000,000 – of which Hamilton is on the hook for 25%. That’s a minimum of $15,000,000 from our local taxes – and the rest comes from our provincial bill.

One has to wonder who will benefit from this expenditure? Will this improve our city? Will the general population of Hamilton see positive results? Or does this equate to a subsidy to the sprawl developers, giving them an easier-to-sell driveway-to-driveway experience for residents on the fringes of the city who commute to other communities to work?

And this is small potatoes compared to the Aerotropolis boondoggle which promises to cost us a minimum of $350,000,000 just to build the roads and sewers necessary to offer the land to developers – developers which are nowhere to be seen (PDF link to a land use table showing that the current Airport Business Park is largely vacant).

The city has many grant programs that are tailored to bigger developments, while smaller businesses and developers are left to flounder. $8,896,486 [PDF] is being loaned to Vrancor with a 5 year 0% interest term for his Homewood Suites project. Supporting such developments can be a great idea, but could we do a better job of spreading our subsidies to the smaller businesses?

When is a subsidy a burden to the taxpayer? And when is it OK?

Our city seems to be addicted to throwing money at huge projects in the hopes that one of them will be our saviour. But the success of our city is going to depend on organic growth driven by “the little guy”. We need to stop spending on pie-in-the-sky fantasies and begin leveraging our real strength which lies in the individual citizens who care about the city on a personal level. This means we need to make life easier for current small business owners. We need to give incentives to new small businesses. We need to encourage infill residential growth – making it easier to develop those little apartments above our small businesses, filling our downtown with residents again.

We need to plant the seeds for individual Hamiltonians to succeed, because this is the only type of growth that will be long-lasting and sustainable.

Let’s stop putting our limited number of eggs in so few huge baskets. Let’s give one egg to every citizen and see where it takes us. (Actually, let’s give each citizen an urban chicken instead).