Ottawa's economic development agencies have six weeks to convince city council that funding is an investment, not an expense.

If they fail, the Ottawa Tourism and Convention Authority, the Ottawa Life Sciences Council, the Ottawa Centre for Research and Innovation and the city's business development branch face $2.87 million worth of funding cuts. The base budget for 2003 is $4,354,000, which has been reduced for several years in a row.

Last week, city staff released a draft budget that proposed severe cuts to city programs and services and proposed the elimination of 750 full-time positions. The document proposed slashing $28.5 million in "administrative efficiencies", $49.3 million in city programs and services and more than a quarter of a billion dollars worth of capital projects.

The budget was prepared with the goal of a zero-per-cent property tax increase. Staff had to cut roughly $100 million in operational expenditures and $50 million in capital spending. The draft was based on the universal program review, which presented the outcomes of cutting five, 10, 15, 20 and 100 per cent of operational budgets.

Ottawa's economic development agencies use municipal funds to leverage money from the private sector and the provincial and federal governments. Officials were aware cuts were coming.

"We're not prepared to throw in the towel right now," said OCRI president Jeffrey Dale. "We're not prepared to discuss 'what if' scenarios. (But) the risk that we run is that if the city is not willing to invest in economic development, what message would that send to other partners?"

His staff have met with most councillors to make their case, Dale added.

Tourism authority members will do the same, said that group's president, Jacques Burrelle. The authority is crunching the proposed cuts, which were much larger than expected, Burrelle said.

"The magnitude of the cuts surprised us. But we're confident we can get this thing turned around."

With an 89-per-cent cut, the authority would shut down, Burelle said, while a 24-per-cent cut would cripple the organization. A 10-per-cent cut is about the maximum that could be absorbed, he added.

"Now, we're already down to bare bones and a skeleton crew."

Ottawa Life Sciences Council president Ken Lawless said his group would not have the resources to continue economic development projects should the budget be slashed by almost 50 per cent.

"It will mean we may not be able to do some $600 million worth of projects we have underway," he said.

Lawless, along with other city officials, including Mayor Bob Chiarelli, are pinning their hopes on the "new deal", which should see cities get a portion of the federal gas tax.

For now, agency officials are poring over the draft budget, which laid out how the cuts will be administered.

In the first of four scenarios, the city would eliminate $146,000 from the business development branch. The outcome, according to the draft budget document, would be to reduce the city's ability to co-ordinate business development initiatives, such as the expansion of the Ottawa Congress Centre.

The second scenario would see funding to each agency reduced: OTCA would go from $1,546,000 to $1,173,000; OCRI would go from $1,836,000 to $1,538,000; and OLSC would go from $286,000 to $223,000. The overall impact of these cuts would be to reduce the city's ability to attract new investment, document market conditions and support economic development projects, the document states.

The third scenario would see the tourism authority take the biggest hit, with its funding cut further from the second scenario, from $1,173,000 to $173,000. This would "substantially reduce the city's visibility in the national and international marketplace as a tourism and convention destination".

In the fourth scenario, the city's overall funding to the agencies would be reduced by $750,000 and the business development branch would take a $240,000 hit.

The city would reduce funding to the agencies by $2.87 million if all four proposals were accepted. However, council could select one, two or three of the scenarios. All four scenarios would need to be selected to achieve the zero-per-cent property tax increase.

Decreasing funding to Ottawa's economic development agencies is a mistake, said Greater Ottawa Chamber of Commerce president Gail Logan. For example, if the tourism authority's funding is reduced, it would likely be unable to function, rendering Ottawa the only G8 capital without a tourism and convention authority, she said.

But the bigger problem, Logan said, is city managers declined to include information from the 2003 final budget, which had been included in years past as a comparison tool.

"This budget created a whole series of more questions," Logan said. "Where's the accountability and transparency? Where's 2003? That's a critical information item that's been there in every other budget."

For example, she said, this year's budget shows four full-time equivalent management positions in the planning and development services department with a budget of $1.77 million. That represents a budget increase from 2003 of more than 600 per cent, Logan said.

City spokesperson Michael Fitzpatrick said the exclusion of the 2003 data is because the 2004 budget was based on the universal program review.