Put risk with those who stand to make a profit

Opinion

Hey there, time traveller!
This article was published 12/10/2024 (363 days ago), so information in it may no longer be current.

If you’re frustrated by seeing your tax dollars wasted, don’t read this. If you’re infuriated by endless handouts by governments to corporations and business owners, you should probably turn the page.

Earlier this week, a report in the Sun (“City council defers BDDC request for $25,000,” Oct. 9) discussed a request made to Brandon City Council by the Brandon Downtown Development Corporation for $25,000 in additional funding.

In support of the request, BDDC executive director Emmanuel Ahaneku told council that the increase is needed to “continue to support existing businesses and attract new ones to the downtown.”

Ahaneku explained that “we are looking for an extra $25,000 from the city. Last year we received $350,000. That covers the grants we give, our payroll and operating costs. And now we are asking for $375,000.”

He also told council that the taxpayer-funded organization has identified three large capital projects that will each require $135,000 — a 14-court indoor pickleball facility planned for 1210, 1305 and 1411 Pacific Ave., the conversion of the former McKenzie Seeds building into an indoor farm facility by Brandon Fresh Farms (BFF), and a housing project planned for Princess Avenue and Ninth Street next year.

The report also told readers that, under the BDDC’s Brandon Downtown Business Improvement program, 40 existing and new-to-downtown businesses and organizations received up to 50 per cent of eligible expenses (to a maximum of $10,000) for business strategy development, marketing, web services, accounting assistance, legal and IT support.

Another six businesses have received funding for upgrades this year under the Facade and Storefront Improvement Program.

There’s a lot to unpack there, starting with the fact that the land on Pacific Avenue for the proposed indoor pickleball courts was sold by city council to a Saskatchewan resident this past May for just $1.

In other words, the purchaser received his first subsidy when he got the taxpayer-owned land for a buck, and he’s already in line to get another $135,000 in free money before any meaningful work has begun.

Could years of property tax breaks for the project also be in the cards?

Regarding the $135,000 for the proposed McKenzie Seeds building project, a report in Thursday’s Sun revealed that Brandon Fresh Farms has scrapped its plan to convert the building into an indoor farming project because it could not secure the $30 million in investment capital needed for the project.

Was Ahaneku not aware of that fact when he made his presentation to council on Monday night? Did the BDDC approve $135,000 in funding for the project without any evidence that it was actually financially viable, or proof that it had the funds required to get off the ground?

Thursday’s report also indicated that Brandon Fresh Farms now plans to convert the building into 150 “live-work” studio apartments. Will it still get the $135,000 in BDDC funding for that new pie-in-the-sky scheme? Is the company now hoping to access even more government funding via affordable housing project programs? Is it also counting on years of property tax exemptions?

Regarding the proposed housing project at Ninth Street and Princess Avenue, the city has for years been offering that land for free to any developer willing to construct a suitable building on the site. Have we reached the point where free land isn’t enough? Do we seriously have to add $135,000 in cash to sweeten the deal?

I didn’t list all the businesses that received money from the BDDC to pay for various expenses or storefront upgrades but, really, did they genuinely need that money? Or was this a case of them being offered free money, and being fools to turn it down?

That last question points to a pervasive problem we see here in Brandon and in many other jurisdictions. At some point in the past, governments started pouring money into privately owned projects that are deemed to be of some benefit to the public. It includes hockey rinks, stadiums, commercial developments, housing developments — all the way down to infrastructure projects such as wastewater lift stations.

We seem to have reached a point where every business plan in this province includes a taxpayer-funded subsidy of some kind.

For example, it was announced on Sept. 27 that the federal and provincial governments, along with the City of Winnipeg, are contributing millions of dollars toward the redevelopment of the Portage Place Mall.

This past Tuesday, the province committed $10 million in “seed money” for an investment trust that would work to attract private-sector investors to build new housing or convert existing buildings into affordable units.

Those are just two of the latest examples, but they beg this question: Is all that taxpayer-financed funding really necessary, or are they just another instalment of taxpayers bearing the risk and private business owners reaping the profits?

That’s a reasonable question for taxpayers to be asking, but they won’t like the answer.

By creating an expectation that they will contribute money toward projects in their communities, governments have altered the economics of development. As long as there are jurisdictions that are willing to offer those incentives, other communities will believe they have to do the same in order to compete for development opportunities.

It’s a dangerous cycle that enables developers to play communities off against each other, but there must eventually be a point where enough is enough.

We’ve reached that point here in Brandon. We can’t keep pouring public money and land into poorly planned projects that have little hope of long-term viability, and we certainty shouldn’t be doing it before the developers have contributed a substantial investment of their own.

It’s time for taxpayers to be treated with more respect. It’s time to return to some level of fiscal responsibility. It’s time for the people who earn the profits to bear the risk.