Budget is ‘anti-growth’

Daniel MacEachern
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St. John’s breaking trust with businesses, says board of trade

Tax hikes in the 2016 St. John’s budget are “anti-growth and anti-development,” says the St. John’s Board of Trade.

Board of Trade chairwoman Kim Keating says St. John’s council has to consider the real impact its decisions will have on the business community after meeting with 50 members of the board Thursday.

Board chairwoman Kim Keating told The Telegram that one of its members’ biggest concerns is the introduction of a vacancy tax.

“With this introduction, particularly in a softening economy and seeing vacancy rates increase, it will deter development, and certainly developers will not be interested in pursuing infrastructure unless they have 100 per cent occupancy guaranteed,” Keating said Thursday.

Related story:

St. John’s Board of Trade to hold budget forum

About 50 members of the board met Thursday to discuss their concerns with the budget, which will also see commercial taxes go up an average of 21.2 per cent.

Small business owners in particular, said Keating, are worried both about the increase in taxes as well as a planned replacement of downtown city infrastructure, due to begin next year, that is expected to shut down parts of Water Street in sections for at least a few years.

“A lot of folks were saying just to stay in business will be a challenge for the next few years given the recent tax increase,” said Keating, who added the purpose of Thursday’s meeting was to gather information from its members to be able to present to the city.

“We want to present to the city what we heard today so they can understand better the real impact that their decisions are having on the business community, whether it be layoffs, deferring expansions, deterring growth,” she said.

Following the meeting, the board released a statement calling the budget “anti-growth and anti-development,” and warned the city is becoming uncompetitive for business owners.

The relationship between the city and the business community isn’t good right now, said Keating.

“There’s a real feeling of mistrust in terms of how the city went about making these changes without any sort of consultation with the business community,” said Keating.


Twitter: @DanMacEachern

Organizations: The Telegram, Board of Trade

Geographic location: Water Street

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Recent comments

  • Question
    January 08, 2016 - 09:51

    Does the vacancy tax change apply to everybody? Why not just apply the change to the big stores like Dominion and CT and ???? Give them 6 months notice. If I have a small building vacant as I am waiting for the economy to improve or I am working on it, I should not be in the same class as Dominion or CT.

  • Oh my
    January 08, 2016 - 09:47

    They were all rah-rahing Muskrat Falls, though!!

  • Me
    January 08, 2016 - 09:44

    The owners of a lot of the big vacant buildings are out of province. They don't care. However if you look at a small business, say 5-30 employees, the tax increase could mean layoffs, reduced hours and maybe closure. The increase is just too high. I would thik the BOT would be satisfied with a reasonable increase, as would the rest of us if the assessment increase was reasonable. It appears the council thinks of a project that makes them look good and then raises taxes to pay for it.

  • Mr. Realistic
    January 08, 2016 - 09:08

    Funny how they weren't complaining when the economy was booming and they were raking in the money and living high on the hog. I sick and tired of listening to these wealthy business people complaining all the time. Suck it up like everyone else.

    • a business man
      January 10, 2016 - 08:35

      Or I could reallocate production to one of our company's sister offices in Toronto, Montreal, Detroit, Georgia or elsewhere. The point is that sucking it up like everyone else the least desirable option. I don't live in St. John's (or Newfoundland) and I don't care where my operations are located. Furthermore, I actually don't care about what happens to the economy in St. Johns or Newfoundland. I will certainly not suck it up. In fact, I am more likely to reallocate production just to prove a point and support the claims bade by the board of trade. Governments must never forget that capital is mobile, as a jobs.

  • McLovin
    January 08, 2016 - 08:38

    Let me see if I have this straight. There is a huge amount of space available for sale/lease in the City and the Board of Trade wants to increase development and increase the amount of vacant space? That seems like sound logic!

  • P snow
    January 08, 2016 - 08:32

    It amazes me ,it is all business wants to do is to keep wages low,pay very little benefits, and very little taxes,but they want to charge high prices and make huge Profit.what about homeowners,they have to pay extra tax on their homes as well.i get very tired of the board of trades comments.

    • a business man
      January 10, 2016 - 08:41

      Frankly, yes, as a business owner and investor, I all want is to keep wages low,pay very little (or preferable NO) benefits, and very little taxes. When chosing which city/province/state/country to operate in, we hire lawyers and accountants to compare the wages, taxes, laws, and other factors that impact profit. More often than not, we seek the jurisdction that offers us the most profit. As a businsss, the only thing that really matters is profit. So P Snow, your comment is 100% spot on, but it is also the reality of the economy. Tax increases is a reasons why businesses relocate. Why would a business pay more when it can move and pay less?

  • tim
    January 08, 2016 - 08:13

    Its pretty funny how the same passel of elites who have almost bankrupted this province now have all the answers to prosperity LOL Buckle up and get your popcorn ready for this crash...

  • Bill
    January 08, 2016 - 07:58

    Business can't have it both ways with respect to building vacancy. With large buildings in prime areas sitting vacant for years (think of the old Dominion stores in Churchill Park, NL Drive, Ropewalk Lane, and the store fronts on Water Street owned by Fortis) the City has an obligation to nudge businesses off their hind quarters and do some development. The Board does have a point in that the City expenditures are raging out of control and more should be done to avoid having to raise taxes.

  • Christopher Chafe
    January 08, 2016 - 07:35

    Contrary to popular belief St. John's is not anti-development, they just lack the guts to stand up to the constant NIMBY complaining.

  • maderighthere
    January 08, 2016 - 06:53

    ".....business community after meeting with 50 members of the board Thursday." ....50 members out of more than 900..... the business community can't be all that upset!

  • jerome
    January 08, 2016 - 06:32

    This council is not only anti-business , it is anti-taxpayer. 5-9% yearly increases in city expenditures is not responsible or sustainable.

  • Fred
    January 08, 2016 - 06:31

    Businesses will pay their share just like everyone else.

    • a business man
      January 10, 2016 - 08:50

      That is a debatable point. I have multiple businesses in St John's. On one hand, yes, I will pay my share of the increased in regards to the restaurants and bars that I own because I cannot move these businesses and because I own the land. On the other hand, no, I will not pay my share for the call centers and other technology based businesses that I own. Instead of paying my share of the increased taxes, I will move the work to somewhere with lower taxes. Other cites in Canada and the US offer job creation grants to employers who create jobs. This tax increase might lead me to move to a jurisdcition with a HIGHER tax rate because the job creation grant might make it worth while now that the taxes here will increase. I have a call center contact in St. John's that reqires a local presence. This makes up 9 percent of the company's business. This means that I cannot completely close this office. But I can move 91% of the business to another city or province or US state. With 91% less workers, I will clearly have to downsize. This will take rent money and wages out of the economy. But that is okay, because my profits will be protected, and I avoid much of the impact of this tax increase. This tax increase illustrates the importance of getting into businesses that are technology based and that can be done from anywhere in the world. In my opinion, corporation need the flexibility to leave a jurisdiction at any time.

  • Spaz
    January 08, 2016 - 05:11

    Pretty bad when their own turn on them. As for the vacancy increase maybe the board could start a think tank or stop whining.

  • GeoffChaulk
    January 08, 2016 - 05:09

    As we all know, The City has botched the budget six ways to Sunday; the ultimate in non-sense was the former cut to arts grants to those who are likely almost poor and help make us who we are, and then attack small business-people...i.e. those who create local jobs. Yes b'y. And, anyone heard a whisper from the Ceremonial-Only Mayor? No b'y. On another cruise convention in Fla. is he?...Cat got this tongue? Perhaps Doc could offer up his 100,000+ salary+benefits...5K is enough pay for chairing weekly meetings and then doing nothing else, especially when already well-pensioned as a senior and retired teacher. Being a Mayor means leadership, taking the heat when there is heat, and showing up!

  • Economic reality
    January 08, 2016 - 00:09

    The business community will need to pay higher taxes but it is true that city council is being irresponsible in not reducing spending significantly as well. Both sides need to face economic reality.

  • david coady
    david coady
    January 07, 2016 - 20:49

    Its reasons like this that i dont vote because at the end of the day the rich are still getting richer and poor suckers like myself and many others have to grin and bare it due to budget cuts and increased taxes. Im sad to say that i realize now why alot of people try and cheat the system because the government drives them to it.

  • Jo
    January 07, 2016 - 17:42

    Keep Galgay and Doc away from any committees, especially the finance committee, they are clueless.

  • Sean
    January 07, 2016 - 17:22

    I'm sorry, but the vacancy tax is long overdue. There are a some high profile commercial sites which have been vacant for many years, with no apparent effort to rent them or sell them. The prime example is the former Churchill Square Dominion. Loblaws closed the store, which they have every right to do, but numerous parties have contacted Loblaws about renting or buying the space. Loblaws is not interested in any offers, apparently, and it suits them to keep it vacant. The problem is that Churchill Square was designed to serve as a neighbourhood commercial centre, to be an amenity to the neighbourhood. Loblaws has basically decided that it is going to take about a quarter of the available commercial space in the square out of circulation, neighbourhood be damned. There are a number of other such examples of vacant buildings in the city, most of them owned by large corporate out of province landlords. We've just been through the biggest 15 years of boom St. John's has seen in generations, and if any of these property owners had plans to sell or rent the spaces so they could be assets to the neighbourhood again, they would have done so. The only thing that will get these places out on the market again is if they start costing money to the landlords. I'm not in favour of jacking up the taxes on commercial property owners the minute their building becomes vacant, obviously, but there needs to be some sort of disincentive to keep these big property holders from landbanking these neighrbourhood assets for years and years to the detriment of the quality of life of nearby citizens.