Municipal Budget Submission 2018

Dear Mayor and Councillors:

As the City of St. John’s prepares for Budget 2018, the St. John’s Board of Trade respectfully submits the following recommendations for consideration.

The St. John’s Board of Trade is committed to helping business succeed. This submission is presented on behalf of our members representing more than 20,000 employees.  The recommendations offer opportunities to ensure St. John’s remains an attractive place to live, to work and raise a family.

Recommendations include:

  1. eliminate the development fee
  2. implement a tax fairness ratio, and
  3. continue to find efficiencies and embrace innovation.

The Board applauds council and staff for the achievements that have been made over the last year through the program review resulting in $7,066,624 in potential operating savings in 2017 and $7,060,141 in 2018. This brings the net operation savings to over $13 million. These savings coupled with the $12 million in savings in Budget 2016 should be passed on to business owners and residents in St. John’s.

We hope that you can make decisions in the short and long term that will benefit all of St. John’s, residents and business alike.

Dorothy Keating Chair


St. John’s: a destination for business

The Telegram

Believe it or not, the municipal election for the City of St. John’s is just around the corner. The candidates have already started their campaigning as they take advantage of the summer weather to get out and meet and greet voters in their respective ridings.

As citizens of the city, I know you are keenly aware of the issues that directly impact your families and can discuss those with the candidates when they come knocking. What about those issues that are not so obvious, but which also impact you? I want to take the opportunity in this article to help you to be prepared, when the candidates come a knockin’ at your door looking for your vote, to also know the concerns of business.

Why should you care, you may ask. If you have been following my column this year, then you know that I have repeatedly said it is business that drives the economy of the province. We need a strong business community to grow and thrive.

The members of the St. John’s Board of Trade have chosen to set up their businesses here. They have chosen to invest their hard-earned cash here. They have chosen to raise their families here and they have chosen to employ individuals such as yourself.

Our members are committed to this city, and their concerns should be taken into consideration as you decide for whom to cast your ballot.

Business pays close to one-third of all the revenue the city collects.

It is business that decides to build hotels, shopping centres, and office and warehouse buildings, employing thousands during the construction phase and many thousands later who work in those businesses.
So if you shop, live or work in St. John’s you have a vested interest in the viability of our business community and you should be concerned about impediments to business growth.

Businesses have plenty of options in the neighbourhood if the City of St. John’s policies are not to their liking. There are 13 other municipalities in the Northeast Avalon. We need businesses to continue to choose St. John’s, as their tax dollars contribute to funding the costs of services we all receive.

So, what sort of things need improvement in St. John’s to entice business to choose the city as their destination for business?


There are themes that are common to all of us, business or individual — the pace of spending at city hall being a primary one.

I acknowledge that gradual progress is being made in containing spending at city hall. The extensive program review conducted last year did see savings.

But this is a continuous process. Let’s not take our foot off the gas. It is critical for all of us — business and individuals alike — to have our tax dollars spent wisely and with due care. More effort to curtail unnecessary spending and continuous process improvement is essential to an efficient and effectively run city.

Development approval process

Other items are less obvious. We all know that time is money and that the delays in a development approval process could mean the difference in a decision for a business to choose an alternate municipality to establish their operations. This process has to be lean and competitive and enable business to quickly execute on their development.

We know that building permits have slowed as the economy has stalled. A sign of a prosperous city is construction and development. We do not want business to walk away from creating jobs and wealth for its employees because the city unnecessarily delayed or impeded their development process or imposed permit costs so high as to detract from investment.

Fairness ratio

Did you know that in many cities there is a fairness ratio adopted to balance the taxes paid by business with those paid by individuals? The City of St. John’s has not adopted this concept of a fairness ratio. Each year when the mill rate comes out, the amount of tax that business pays relative to residents tends to increase at a faster rate.

Why should business bear the brunt and pay more? Many other progressive cities looking to encourage business investment have adopted a fairness ratio. Not only is it fair, but it is predictable, which is just what we need to entice investment.

Municipal assessment

Assessment of real property should be based on market value, as this is the universally accepted standard. The Special Purpose Property Regulations being advocated by the city are fundamentally discriminatory and, if they were to be reintroduced, they would make St. John’s an uncertain destination for business investment and could raise costs for everyone.

For example, if St. John’s International Airport was designated as a special purpose property by the city, its assessment and annual municipal tax bill would increase dramatically. The Airport Authority, as a not-for-profit entity, would have no alternative but to pass these increased taxation costs along to the travelling public and all users of the airport, including the airlines that serve our city — all resulting from the use of a discriminatory municipal tax regime.

Clearly, the city needs to confirm a more equitable approach to the municipal assessment of business properties in St. John’s.

“Growth is never by mere chance; it is the result of forces working together,” said James Cash Penney, founder of JCPenney. Armed with this information, I hope that you will ask your candidate, when they come knocking at your door, what they are doing to attract more businesses to set up in our city.

Dorothy Keating is chair of the St. John’s Board of Trade.




More taxes are not the answer

This is the excerpt for your very first post.

Past letter on taxes. Stayed tuned for weekly blogs.

For the past several months we have been focused on the insane federal tax proposals and identifying how they will harm small business in this province and country. It is an unfortunate distraction because the real problem, that all levels of government have, is not the amount of tax that they collect, but the amount of money they spend.

Every business owner and every individual person is willing to pay a fair share of municipal, provincial and federal tax. What grates at us, though, is how inefficiently it is spent. We know there is waste, we know there is little innovation, we know governments are afraid of the unions and capitulate to their demands.

The level of debt in this country and province is staggering and it seems to be the dirty little secret every politician is afraid to face.

It is there for the reading in the N.L. Public Accounts Consolidated Summary Financial Statements. It just confirmed that our deficit for the fiscal year ending March 31, 2017 was $1.1 billion — that’s how much we overspent last year.

Add to this the amount of debt we already have — $13.5 billion. Your share is $25,788.

We spend more to pay the interest on our debt ($935 million) than we do on education ($832 million).

We recently held a forum with business investors and one of them described their waning confidence this way: “Private-sector business investment is like building a house, yet the house we want to build is on a bog. The foundation (government) is a bog.” It is a sobering analogy.

Seventeen per cent of the population of N.L. pays 80 per cent of the taxes. The business community is already paying more than its fair share.

This is not only a provincial issue, it is a federal issue as well.

Canada’s debt is $652,303,967,376.95.

Your share is $17,898.98.

In 2016-17, interest payments on the federal debt totalled $25 billion, which is more than what Ottawa spent on transfers to Canadian families in the form of children benefits ($22 billion). It’s also equivalent to the federal government’s planned budgetary deficit ($25 billion). Put differently, in the absence of federal interest payments, Ottawa could wipe out its deficit this year, despite its marked increase in program spending.

If you combine our sovereign and sub-sovereign debt, we have one of the worst levels of debt for advanced economies. You are not only responsible for servicing federal debt; you also have to service provincial and local government debt, too.

When we add up all the interest payments of the various governments across the country (federal, provincial and local), the total in 2015-16 was $63 billion — approximately equal to the $64 billion Canada spent on public primary and secondary education in 2013-14, the latest year of available data.

This level of debt is like a crack in a tree and one storm can bring the whole thing crumbling down.

Storms like aging demographics, recession, wildfires, increasing health care costs, high levels of personal debt. I for one don’t want to live near this tree.

This charade over the past few months by Finance Minister Bill Morneau has been a great distraction for him and officials in finance. Instead of trying to generate more revenue, why not better spend the money you already have?

Where is your commitment to cost savings? Where is your commitment to reducing your debt?

Governments should be much more meagre with our money and our children and grandchildren’s money. This kicking the can down the road and leaving our problems for others to solve is more than irresponsible, it is immoral. When history judges this generation of our province’s and nation’s leaders it will use words like squandered, missed opportunity, self-interested.

But it does not have to be this way.

We don’t have the luxury of optimism for the future without commitment.

The business people I represent at the St. John’s Board of Trade want Newfoundland and Labrador to be successful. They are committed to innovating and improving. They have chosen to invest here, they have chosen to employ people here and they have chosen to raise their families here. They are part of the solution. Are you?