Directing your attention to Prosperity Edmonton
Hopefully you are aware and well versed in the mandates of Prosperity Edmonton, but if not, I’d like to take a quick moment to turn your attention to this well intentioned organization. Founded by a collaborative group of local businesses and non-profit organizations, they came together with the common goal of fostering competitive tax and policy programs within the City of Edmonton to ensure all businesses and citizens can successfully grow and flourish. According to the latest Global Entrepreneurship Monitor (GEM) Canada Report - issued by The Centre for Innovation Studies - Alberta still boasts the highest rate of entrepreneurship in Canada, to the tune of 19.6% of Albertans aged 18-64 involved in starting a business. This is an amazing feature of our Province and its Cities, and the goal of Prosperity Edmonton is to see these statistics grow by providing less resistance to the entrepreneurial spirit we so value. Starting a business is hard enough as it is, presenting risk after risk for the individuals that put themselves out there to start small businesses. It’s important that all groups recognize the costs and policies that can be crippling to a business, and the difference between growing investment in our Province, or the opposite of watching it slip away.
The following link will direct you to the Prosperity Edmonton website which outlines the mandate, facts, business case examples, and solutions to consider to encourage investment into our City.
Some of the main areas that Prosperity has noted to be of concern in our City, and which member organizations have come together to improve, include:
Public Sector Efficiencies: the City runs as a non-profit whereby they formulate a capital and operating budget first, then set the mill rate based on what is required to cover the City’s expenditures. By determining the spending before establishing the income, it puts the tax assessment department in a difficult position. Rather, by setting tax increase caps, there would be more certainty for businesses and tenants, and the City could be more intentional about finding efficiencies in spending to match the income.
Non-Residential Tax Increases: the majority of tax increases have historically come from the non-residential sector, it is a much smaller base of citizens. However, this has led Edmonton non-residential taxes to become noncompetitive (See previous blog: Commercial tax rates continue to rise in Edmonton and Calgary; concurrently, their periphery markets ranked among most entrepreneurial in Canada).
Declining Tax Assessment Valuations: excessive property tax increases on commercial properties are causing downward pressure on tax assessed values. Let me explain how: the higher the taxes are, the larger the operating costs being demanded of the tenants and/or operating companies in a property. With higher operating costs, the effect is a downward pressure on the net rent that tenants can and are willing to pay. Lower net rents decrease the assessed value of the property, and since the mill rate is multiplied by the tax assessed value to create City revenues, less taxes can then be collected. Or conversely, higher and higher mill rates must be applied…
Permitting Policy and Timelines: the speed and ease with which development and building permits are obtained is critical to promoting investment into the City. The longer the timelines and the more difficult the process of obtaining permits through “inside the box” thinking, the more likely the investment will find a more agreeable alternative.
Member Organizations - Nine business associations representing thousands of businesses and people, form Prosperity Edmonton
Please take the time to discover this association, to contribute your experiences, and to further share with business owners and policy makers. We can all agree that Edmonton is a city of opportunity for so many of us. Let’s work together across public, private and non-profit sectors to make sure that we continue to be forward thinking in policy, and create an Edmonton Advantage for as many citizens and businesses as possible.
Photo courtesy of Melcor Developments - “Wall of Encouragement”