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Mayor proposes tax incentives (11/01)

By Ian Ross Strategic visions and grant programs have not worked in diversifying and stimulating the North's economy.

By Ian Ross

Strategic visions and grant programs have not worked in diversifying and stimulating the North's economy. Perhaps throwing some incentive goodies at business in the form of a preferred corporate tax structure to lure some companies North might just do the trick, says Sault Ste. Marie Mayor John Rowswell.

Rowswell floated the tax-incentive program idea to other northern mayors during a panel discussion at the Northeastern Ontario Municipal Conference in September.

In researching how to create jobs in the Sault and stem the flow of thousands lost through out-migration, the City of Sault Ste. Marie's long-range planner Joe Sniezek began studying last spring how other jurisdictions around the world have managed to turn their economies around and flourish.

While there are plenty of papers put out by public-policy think-tanks in Atlantic and Western Canada about tax incentives, there are few actual examples across the country to draw from, says Sniezek.

But there is the growing realization that communities dependent on resource-based industries need some innovative regional-based strategies to attract new forms of economic activity, especially with the trend among mainstay industries like mining and forestry to reduce jobs over time in favour of technology.

Sniezek says there have not been any growth spinoffs from the robust economy of the southern Ontario and likely will not be until there is a major public-sector investment to improve highways, offer attractive tax incentives and funnel more educational dollars into the North.

"If you take a look at Northern Ontario's economy, it's not growing at the same rate as the provincial economy. The grants program produces only limited results in ensuing long-term sustainable jobs so the only option left is to change the tax (structure) for companies."

With Northern Ontario about 50,000 jobs short of sustainability when taking into account the provincial average of regional employment to population, Sniezek says a different approach beyond grant programs has to be considered.

And you would not need to rewrite the Municipal Act, he says, to offer, for instance, a tax zone in economically depressed regions where corporate tax could be 15 to 20 per cent less than other areas of Ontario.