Economic development will be vital to New Westminster’s future

Population growth by age in the New West trade area (including Burnaby and the Tri-Cities). Source: Urban Futures Institute
Population growth by age in the New West trade area (including Burnaby and the Tri-Cities). Source: Urban Futures Institute

At the New Westminster Economic Development Forum on Thursday, Andrew Ramlo from the Urban Futures Institute presented some unsettling insights on upcoming demographic changes in the city, and shared some truly geeky statistics illustrating New West’s economic strengths and weaknesses. A few pertinent highlights:

  • New Westminster, while attracting large numbers of adults in the prime working years between 20-55, will face the same tsunami of grey as the rest of the region when the Baby Boomers retire. Because of advances in health care, the population will remain overweighted by seniors for a long time.
  • New Westminster’s biggest economic ‘exports’ are health care and education. Fraser Health and Douglas College are the two biggest employers in the city. Public sector employers (school board, city staff, other government organizations) are also a huge source of jobs in the city.

To me, this highlights the need to focus now on economic development in New Westminster because:

  • Seniors pay lower property taxes while requiring more tax-funded services
  • Hospitals and educational institutions are exempt from paying property tax, so expanding these institutions, while providing jobs does not provide more tax revenue to the City (note: other levels of government sometimes provide grants in lieu of taxes to offset some of the cost to cities, but it doesn’t always make up for the lost revenue)
  • City governments depend on property taxes to fund services and infrastructure improvements, and are restricted from demanding other forms of taxation
  • New Westminster has one of the more dense concentrations of nonprofit organizations in the Lower Mainland, and most of those organizations don’t pay property taxes either
  • There is very little undeveloped land remaining in the city that could be built up in order to increase tax revenue

Tax-exempt nonprofits and institutions benefit from city services, yet don’t put money back in the pot. The rationale for this is that these types of institutions provide a great social benefit to the city and its public, which justifies exempting them from paying tax. That’s all well and good, but what happens when a city has more than its share of nonprofits within its borders, and then also suffers a drastic reduction in the size of the taxpaying population?

This makes me concerned about the long-term sustainability of the City’s finances. The City’s largest employers are not paying property tax, and ever-larger numbers of residents will be getting significant breaks on their tax bills as they reach retirement age. Meanwhile, there’s a ton of city infrastructure that needs upgrading, and provincial and federal governments keep offloading responsibility for vulnerable populations such as the mentally ill and the homeless to cities. That leaves an ever-larger tax burden for those of us who are under 50.

This is the same story across North America to some extent, but I believe that when you look at New West, we are currently not as well equipped to balance out declining residential property tax revenues with business tax revenue. Because we do have such a high concentration of nonprofit, government, healthcare and educational employers, and because we have so little commercial property, I fear this makes our city more vulnerable than others unless we take action now to strengthen our economy.

The answer isn’t just to attract younger people to pay the taxes the seniors are exempt from. There just aren’t enough young bodies to balance out the immense impact of the Baby Boomers. As I see it, the City needs to act now to diversify its sources of revenue. As I mentioned, the City is limited in its ability to impose new taxes, but it does have other sources of revenue already, including Development Cost Compensation (DCC) from new development, as well as grants from other levels of government, various licenses, fees and fines. But a key missing link in New Westminster is economic development, not just continuing to add more tax-exempt government-funded and non-profit jobs, but attracting more new for-profit businesses to this city.

Comparison of street front rental rates in the Lower Mainland. Source: InvestNewWest.ca
Comparison of street front rental rates in the Lower Mainland. Source: InvestNewWest.ca

New Westminster is succeeding at attracting some new large employers. The TransLink offices, for example, will be opening soon at Sapperton’s new Brewery District development, but as as I mentioned in my last post, we need to reach out to both large and small businesses. Currently I see a revolving door of small businesses in this town. We have some of the most affordable commercial rents in the Lower Mainland, and I think that attracts newbie entrepreneurs to jump in and invest without the financial cushion to soften the inevitable blows that every new business endures in the critical first few years. The City can’t take away the risks of business ownership, but it can provide more leadership in identifying the types of businesses that we believe would thrive here, actively recruit more employers to set up shop in New Westminster, and provide support to our current businesses to stay in New West and grow their businesses.

An artist's rendering of the new Civic Centre and Office Space. Source: City of New West.
An artist’s rendering of the new Civic Centre and Office Space. Source: City of New West.

This is also why I have come to believe that the City’s decision to proceed with building the class A office space above the new Civic Centre was a risk it had to take. One of the reasons why it was so important to incorporate commercial uses into the Civic Centre project was the implications for tax revenues: had the City built only the Civic Centre (and not the office tower & commercial spaces) the cost to build would have been lower, but the City would lose the opportunity not only to boost the economic activity of downtown (through jobs and in-town spending by employees & businesses) but also lose out on the estimated $660,000 in annual tax revenues from the office space. It would be just one more parcel of prime New Westminster real estate that’s a cost centre for the city, not a revenue-generator.

Today the economic development activities the city undertakes include offering information and statistics, help with site selection, providing business and community contacts and helping with government approvals. That’s good work, and business licenses have grown at three times the regional rate in New West between 2009 and 2011. But it is not enough.

New Westminster needs to present a vision that inspires businesses to want to locate here. It has to provide incentives for residents to shop here, and support local business in getting the word out beyond our borders. The business community can also do more to support each other, through partnerships, mentorships and cooperation.

In short, although we’ve come a long way from the ’90s decline, we still have a long way to go. Strengthening our economy is something that we can all play a part in by shopping locally, starting businesses here and spreading the gospel of New Westminster beyond our borders to let the world know how great this city is to live, work and play.

Visions of the ‘new’ New West

Over the weekend I attended two sold-out events that are potentially significant bellwethers for the future of our town. The first, a $175-a-plate business and networking luncheon, was a clear signal that New Westminster is open for business. The second, a $30-per-ticket gala celebrating young entrepreneurs and community organizers, showed that the next generation of leaders are already making an impact on this city.

On Thursday morning, a crowd of developers, large business owners, banks and local employers packed La Perla Ballroom for the New Westminster Economic Forum to hear a demographer, several of the City’s largest employers, a developer and famed Vancouver condo marketer Bob Rennie share their predictions on the shape of the “new” New West.

As a symbol of the City’s interest in strengthening our local economy, I thought the event was a great success. Not only was it sold out, but many more citizens and business owners were interested and would have attended had the ticket price been less steep and/or if space had been available. But I also thought that the City’s economic development office missed an opportunity to reach out to that packed house of potential investors in our City and inspire them to action.

The event was an informative soft sell, sharing demographic trends and anecdotes from Fraser Health, Douglas College, Lowes and Bob Rennie about their organizations’ investments, activites and expansions in New Westminster. The City’s Director of Development Services, Lisa Spitale, also shared some highlights of the City’s vision for future development, particularly in the downtown. But an event like this should be more than informative. It should be persuasive and connective. articulating a compelling vision and call to action that inspires business owners to invest in the city, and acting as a force multiplier to connect people together to do business, form partnerships and become aware of relevant organizations, City resources and services in town.

The information presented at the event did change how I understand our city’s economy. Our largest employers and biggest ‘exports’ are in health care and education (many people from other parts of the Lower Mainland come here to access those services). While this helped me to gain new respect for Royal Columbian Hospital and Douglas College’s positive contributions to our local economy as employers and magnets drawing people from other parts of the Lower Mainland, I felt it also illustrated New Westminster’s weaknesses in other sectors. New Westminster will remain a bedroom community unless we can generate sufficient employment opportunities in sectors beyond health care and education.

On Saturday, a very different event illustrated the new New West in action when almost 200 people filled the ballroom at the Inn At The Quay to recognize 25 of New Westminster’s talented up-and-comers at the NextUP gala organized by NEXT New West and sponsored by The New Westminster Newsleader. The themes in this event were very different.

The event was light on information, but heavy on inspiration. The guest speaker, East Van bootstrapper Mark Brand, shared his story about launching two successful restaurants in the Downtown East Side before buying the legendary Save-On Meats butcher shop and diner in the neighbourhood. His message for New West was to believe in your neighbourhood and take the risk to invest in your community. He also advocated integrating marginalized residents in community transformation, hiring what he called ‘barrier’ employees, for example, who have physical or mental disabilities, or who are recovering from addiction.

The room was full of young talent fired up with big dreams, and I believe the message took root, reinforced by the example of the 25 go-getters recognized at the gala. I was one of those 25, and what I found remarkable was how diverse the activities were of those people on the list: business owners, volunteers, community organizers, sports advocates, and more. The challenge for New Westminster will be to support the crazy dreamers who take the chance to start something new, and provide them with resources and connections that will help small initiatives grow large.

On Thursday and Saturday I witnessed two separate spheres of activity that will lead to positive growth and change in our city. What’s needed is to bridge the two. We had an economic development forum that lacked vision and a celebration of talent with more potential than proof. The economic forum made absolutely no mention of the role of small business in our city, while the NextUP event lionized initiative but not consistency. What New West needs is a balance, blending the tried and true with the fresh and new.

Small businesses and large are both vital to New Westminster’s future. New ideas and risk-takers are essential to progress, but as our city’s long list of failed small businesses shows, there’s a lot more to success than a promising start.

Fact-checking failures in recent coverage of New West issues

New Westminster City Councillor Jaimie McEvoy
New Westminster City Councillor Jaimie McEvoy

This is a guest post by New Westminster city councillor Jaimie McEvoy, in response to a link we shared on Facebook from a Metro Vancouver political blog, City Caucus, about a proposed New West trade junket to Korea. Inaccuracies and assumptions in the City Caucus article revived earlier frustrations about misleading Vancouver reporting on New West issues, so we invited Jaimie to set the record straight.

There has been a wave of coverage about New Westminster by Vancouver media, in each case forming judgements about the city’s actions based on little more than a hunch. And frankly, in each case, the issues in New Westminster pale to similar issues in Vancouver itself.

If a New Westminster story is of enough interest to gain regional coverage, then it is also of enough merit for the media outlet to provide the same background checking and balance in coverage that they do for a Vancouver story.

Here are some of the factual errors in the City Caucus article, all of which could have been prevented with a simple phone call to City Hall:

Council is not going to Korea

Korea is off the table and is not part of the trip, precisely because the return at this time would not be adequate. This was the case since before the article in the Record, which seems to be the article’s only source.

China trip is part of a coordinated provincial strategy

The article says the trip is a waste of time unless it is coordinated with a Metro strategy. In fact, it is part of a coordinated provincial strategy in which municipalities have agreed to participate. That’s why the large majority of the funds have come from the provincial government for other overseas missions. Provincial trade representatives are making many of the overseas arrangements for the delegation. There was absolutely no reason for the writer to incorrectly conclude that the trip is being planned in “a haphazard way” and without coordination with other areas, that was simply an assumption, and an incorrect one.

Personally, I would like to see a development component to the Sister city program. What would be wrong with having, for example, a Sister city in the Punjab, or Southern Sudan, to raise awareness and promote development? These are areas where large numbers of New Westers hail from. Given our multicultural nature, our 100 languages, our high number of refugees and immigrants in the city, the call for a parochial isolationism at the international level hardly reflects our community.

Education & health funding crisis won’t be solved by refusing to participate in foreign trade efforts

Returning the provincial monies for this program would be tantamount to New Westminster withdrawing from foreign trade efforts in partnership with the province.

The idea that funding for health care and education can be funded by withdrawing from trade and economic efforts seems odd to me. And in fact, the crisis in funding for health and education is not caused by the current economic crisis, which has improved significantly since last Fall, but by the decision to give large tax breaks for corporations in the province, to the extent that, for example, higher education now recieves more funding through tuition fees than it does through corporate taxes. The decision by the province to cut in half the industrial school tax throughout the province was particularly harmful to education funding.

‘Back-of-the-napkin’ journalism must end

“I would venture to guess not,” City Caucus’ Daniel Fontaine says at one point in the article. Guessing isn’t journalism. And the revival of journalism has been one of the great things about blogs. At another point, Fontaine writes, “This back-of-napkin economic development planning must end.” As must back-of-napkin journalism.

I am unclear on why the article comes to the conclusions that it does based on guesses and supposition, but it better represents the writers cynicism than it does the process for choosing sites. Potential new Sister cities are identified and developed not by the city on the back of a napkin, but through the work of provincial trade officials. It is a provincially coordinated, trade-based and planned process.

Personally, though, I don’t feel that trade should be the only consideration. Our city has a long historical relationshiops with China for example. The first Japanese in British Columbia arrived at New Westminster. And the city has a large and growing Korean population. For many, the idea of crossing our largest border – the ocean – is a cause for hysteria. But for most of the world, foreign delegations of elected officials are part of the natural engagement with each other, and part of the promotion of cultural and mutual understanding.

Elitist stereotypes about smaller towns like New West breed inaccurate assumptions

The writer calls for more of an economic plan for Metro Vancouver, formerly the GVRD. New Westminster City Council has already issued a similar call.

Rather than stereotyping and incorrectly making assumptions about one of the Lower Mainland’s small towns, the writer would have done well to ask Vancouver, and other Metro Van cities, why there is not more support for New Westminster’s position.

I have seen this more than once. For example, calls from Vancouver for a regional police force when Vancouver is the only police force in the region that does not participate in the existing regional integrated teams. Calls from Vancouver calling for New Westminster to apologize for its treatment of the Chinese, when part of that history was the receiving into New Westminster of large numbers of Chinese refugees from Vancouver’s race riots. Targeting one of the local small towns from Vancouver, without so much as a phone call or a fact check, seems elitist to me. And so it is.

I should add that I like City Caucus and the work that they do. Fair treatment of the other municipalities outside of Vancouver, accuracy, fair comment and modest research will enhance their progressive efforts.