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Drop in tax rate expected to be boon for business (7/01)

By Dianne Gouliquer Lowering industrial taxes is just one tool the City of North Bay is using to make the community more attractive to new and existing businesses, economic development officials say. And local industry is responding favourably.

By Dianne Gouliquer

Lowering industrial taxes is just one tool the City of North Bay is using to make the community more attractive to new and existing businesses, economic development officials say. And local industry is responding favourably.

Council has adopted a budget that would reduce the industrial taxes by 22 per cent this year, with a further 22 per

cent reduction in each of the next two years, Rick Evans, manager of economic development for the City of North Bay, says.

"It's an attempt to help keep us competitive so we can keep the businesses we have, as well as attract new ones."

Evans says the city is slashing industrial taxes not only to draw new business in, but to stay competitive, and to retain and grow the businesses already in place. The move is just one of the components of an overall industrial economic development plan for the city.

"Taxes are only one component of the industrial strategy for retention and attraction," Evans says.

Making industrial land readily available and keeping a highly skilled labour pool are other components of the strategy, he says.

"(Canadore) College has been particularly supportive of the skill development requirements we've had as we've developed new sectoral interests here, such as aviation or the call centre industry," Evans says. "The college has been a driving factor in us being successful in both of those areas."

Evans says the city has also invested significantly in integrated transport initiatives - focusing on road, rail and transportation - as part of the strategy.

"What we're trying to do is make sure that when companies that are already in business here, or that are thinking of potentially locating here, when they take a look at their full-cost bottom line, we can be (competitive) in the whole analysis. The reason the focus was on industrial taxes was because that was one component that we thought had slipped. Overall, we were generally competitive, but that one area was problematic. So (the city) is bringing it back into line."

In order for the new tax rate to take effect, Evans says it must first be approved by the treasurer of Ontario. Once approved, Evans says the impact will be felt by residential and business taxpayers alike.

"We took a look at the commercial, residential and industrial (picture). The premise is you can't reduce taxes in one of those classes and put the cost of doing so on the shoulders of the others. Overall, you wind up having to find cost reductions in all areas to be able to afford the tax reductions you want to put in. Council was able to do that."

Evans says North Bay's commercial tax rate is in "pretty reasonable shape" and does not warrant the same cuts being put forth for the industrial sector.

Brian McGaffney, owner of Nortek Computers in North Bay, says he believes the tax break will spell relief for businesses that are trying to stay afloat when the economy is weak.

McGaffney says taxes in North Bay have been "unreasonably high" for years and a reduction is "long overdue."

A drop in the city's industrial tax rate may save businesses that were either struggling to stay open or looking to leave the city, he adds.

"When the economy is bad, the municipal tax bill doesn't change. It's not based on profit or income. And the fact that (taxes are being) lowered means that in bad times, you'll be able to cope a little easier."

As a business owner, McGaffney says a lower municipal tax burden allows companies like his to expand by redirecting money to other areas of the business, like staffing.

"The reduction would definitely help our employee base," he says.

Evans says the tax issue goes hand-in-hand with other initiatives currently being pursued to attract business and encourage growth in North Bay, the biggest of which is the integrated transport project.

"If you take a look at the cities in the north, freight in/freight out tends to be one of the larger operating cost

components for any of the businesses - either existing businesses or (new) ones that might come in," Evans says.

"We've been doing a fair amount of work in that area.

The four-laning of Highway 11 and driving additional interest in road/rail intermode activity are also components of the initiative.