When a municipal government operates a for-profit business that competes with private enterprise, who benefits and who loses?
If a municipality, like the City of Lacombe or nearly any other, tries to run a business it generally loses money. To keep the enterprise afloat, it generally injects capital from taxes.
This means you (the taxpayers) lose money. The businesses that the municipality competes with lose money.
Then if the private business goes broke, the taxpayer loses choice in the market place, but the former business usually loses much more. It could be the loss of the business man’s or woman’s whole livelihood or more!
Now, if by some miracle a municipally run business does show a profit, would the taxpayers win? Would the business community win? No!
Assuming the profit is real and not due to some creative reporting on the part of the municipality, taxpayer and businesses alike would lose.
I am suggesting here a lack of transparency, which everyone running in the last civic election in Lacombe promised us would be eliminated.
I suggest that a simple balance sheet that clearly shows the expenses and the profits of an enterprise such as the coffee shop in the LMC in a simple language that we can all understand would go along way towards transparency.
Why do we not see such detailed information published? Again for the sake of argument, if a city-run business was to make a profit, would that benefit the community?
It would mean even more income would come out of the business community’s profits. This certainly would not encourage new business to come to Lacombe and I hope this is not what council means when they say Lacombe is open for business.
What if the city entered into the business of land development, it would be easy to undersell other developers by subsidizing lot prices with tax money, thereby driving private developers out of the market and increasing your taxes at the same time.
It lately seems fashionable to do this under the guise of “affordable housing.”
Municipalities in a competitive business help neither the taxpayer nor private enterprise.
Could this whole scenario be a trend? Will we see the city clear driveways and parking lots “for profit” in the future? Will we see a council card lock gas bar open to the public?
Business and private taxpayers alike take a minute to think about what is written here. Whether you agree, disagree, or just need more information or clarification, call your favourite councilor, the mayor or the city CAO. The number is 403-782-6666.
Jack Friesen
Lacombe