The city's private sector filled Ottawa City Hall Friday morning to make a business case as to why funding for economic development agencies should not be cut.
The businesspeople warned that if funding is decreased, the agencies will be crippled and economic growth will be stifled. As a result, the city's quality of life and competitive edge will deteriorate as less money is invested in the city.
"Why cut off the hand that's feeding the economy?" said Shirley Westeinde of Westeinde Construction, one of three members of a panel discussion.
"To kill our advocacy agencies will set us back 20 years," added Algonquin College president Robert Gillett, also a panel member.
About 200 people attended the budget consultation hosted by councillors Rick Chiarelli and Janet Stavinga, including representatives from the Ottawa Tourism and Convention Authority, the Ottawa Life Sciences Council and the Ottawa Centre for Research and Innovation. Those three agencies are facing budget cuts of 89 per cent; 47 per cent and 66 per cent respectively. The city's overall business development branch is facing a cut of 66 per cent overall. In addition, the budget indicates that fees will increase for most business-related activities such as building permits and business licenses.
The potential cuts come at a critical time in the city's economy, said panel member and Tundra Semiconductor chairman Adam Chowaniec.
The city is at the cusp of a "fifth cycle" of the technology industry, which means now is the time for Ottawa companies to capitalize on the recovery, he said. "This is the time to invest. It is not the time to kill the goose because it's about to lay a golden egg."
Many businesspeople in the audience seemed to be leaning towards supporting a small tax increase to sustain the city's quality of life. "I support a tax increase," said Gillett.
Westeinde added that an increase is feasible if the city can prove its books are in order.
Greater Ottawa Chamber of Commerce president Gail Logan said her members, mostly small and medium-sized business owners, still seem to be supportive of a tax freeze. In fact, a recent survey indicates that 82 per cent want a tax freeze, Logan said. "My members have not changed their view on an increase as yet, but is the tide going to turn? Who knows?"
In creating the 2004 draft budget, city staff faced a $101.5-million operational funding gap, as well as a directive from council to freeze property taxes. The draft document, which is the subject of debate until March 24, shows cuts across the board, including the elimination of 750 full-time city staff positions. In addition to economic development agencies, social services, arts and hard infrastructure like road repairs are all targets within the draft budget.
City staff indicated that the city is in such a financial crisis because funding for infrastructure and services from upper levels of government stopped in the mid 1990s. In combination with the city's track record of freezing or cutting taxes for 11 years, residents now face the problem of a lack of revenue to pay for the needs associated with explosive growth, said corporate services general manager Kent Kirkpatrick.
"This fact is counterintuitive, but growth is not good news for municipal budgets," Kirkpatrick said. He reiterated the need for a "new deal" for cities, which would give Canadian cities more money and more power from upper levels of government.
Councillor Rick Chiarelli said the response to the consultation is consistent with the role the business community has played in the past. "The business community is taking the lead like they normally do," Chiarelli said. "But usually they are saying freeze taxes, and this time they're talking about an increase," he said.
