Things are bad in Calgary.
How bad? So bad they had to give a company $4 million to expand its operations there.
Most cities count on competitive property tax rates, top-notch amenities and a desirable lifestyle to encourage people to invest in their community and create employment.
In Calgary’s case, it created a $100-million fund that was used to give Parkland Fuel Corp. a $4-million grant with the understanding it will double its employment in the struggling city core.
That’s meant the loss of 120 jobs at Parkland’s Red Deer operations, which will be shuttered as part of the consolidation.
The departure of such a large number of families from central Alberta is bound to raise concerns in Red Deer, but it should be ringing alarm bells in Calgary.
Money doesn’t come out of nowhere, so the cash for Calgary’s $100-million poaching fund has come from its city’s taxpayers. Imagine how they should feel, having to subsidize Parkland, a company that posted $14.4 billion in revenue last year — a 50 per cent increase from the year earlier as it enjoyed the benefits of recent acquisitions.
It’s not as though Calgary businesses have it easy. Merchants recently organized an unprecedented tax revolt outside City Hall after some of them experienced a doubling of property taxes since 2015.
Calgary city council has cobbled together $130 million in tax relief for non-residential property owners by dipping into its reserves and making $60 million in cuts.
Like all governments, Calgary council would do well to focus on its spending to avoid the desperate slashing it is now forced to make. A stable, competitive tax regime – something that’s been missing from Calgary – is what entrepreneurs rely on.
Such fiscal common sense would prevent the awkward spectacle of Calgary politicians assembling $100 million of taxpayers’ money to pay businesses to occupy vacant downtown office towers.
Traditionally, such funds are associated with the nurturing of start-up ventures that possess a bright future, or catching a big fish, such as Calgary’s failed attempt to coax Amazon into setting up its second headquarters in the city.
Transferring 120 jobs down the QEII hardly qualifies as “transformative investment,” which is the Calgary fund’s stated goal. It is not the innovative creation of jobs, it’s simply the transfer of them 150 kilometres down the highway.
Parkland’s consolidation in Calgary is a loss for Red Deer, but our city councillors should focus on creating conditions that support the success of all businesses. And they should avoid offering handouts using other people’s money.
If Calgarians are content to rely on corporate welfare to revive their downtown, so be it. It’s a risky, costly strategy, and savvy companies such as Parkland will be only too happy to take their money.
David Marsden is managing editor of the Red Deer Advocate.