Construction Regulations Mustn’t Leave Small Firms Vulnerable

Thursday, May 5th, 2016
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The Canadian Federation of Independent Business (CFIB) is welcoming an important milestone in its long-term effort to have Halifax adopt a construction mitigation policy.

CFIB launched the effort two years ago, acting on concerns small businesses were being devastated by extended construction activity. HRM recently unveiled their work at a public consultation.

Protracted construction projects have damaged and in some cases caused nearby businesses to go under.

The demise of the popular Emma’s Eatery in Eastern Passage after months of ongoing interference from Halifax Water’s storm system upgrades is but one example. It may seem counter-intuitive, but the problem with recent collateral damage from development and infrastructure shouldn’t be placed at the feet of developers and contractors. It’s a lack of thoughtful planning by HRM. To find why, follow the money.

Developers can be charged hundreds to tens of thousands of dollars for permits, encroachment fees and other charges related to their projects. In the past five years the city has collected $1,822,944 in encroachment fees just in the downtown and Spring Garden Road areas. Nova Centre has paid more than $640,000 alone.

Add demolition permits, building permits, plumbing fees, development permit fees, occupancy permits, lot grading fees, solid waste charges, blasting permits, street and service fees and deposits and inspection fees, regional development charges and capital cost contributions (CCC).

These taxes, fees and development charges are, in principle, meant to offset costs to the city for administration and service delivery.

In the case of CCCs, the fees are to ensure development related to growth should pay for itself and not impose a burden on existing residents.

However, it’s time to ask if that’s what they do. Are we are meeting any real policy objective with these taxes, fees and charges? If there is any identifiable policy objective, how are these monies being applied to achieve it?

Most important, why does the city accept no visible responsibility to protect other taxpaying businesses affected by work the city approves?

Due to experiences across the country of businesses taking huge financial hits or going under, CFIB is in the process of creating a national construction mitigation best practices Guide. The purpose is to provide more clarity around the responsibilities of municipalities, developers and construction companies to better protect small businesses from the impact of adjacent major projects.

As part of this, we think arbitrary charges should be reduced so builders can efficiently re-direct money, which amounts to little more than fines and taxes, to create a less damaging environment adjacent to construction sites.

In developing the HRM construction mitigation plan, CFIB worked for many months with HRM planning officials and stakeholders from the development, construction and small business community.

CFIB also co-ordinated efforts of downtown business suffering from the impact of the Nova Centre development to ensure their voice was heard during the process.

We believe in clear, outcome-based regulation and only when necessary. That means less red tape, not more.

We also feel the city must ensure money being collected from development is being used to meet well defined policy objectives and not simply being poured into the black hole of general revenues.

With major projects such as development of the Cogswell Interchange lands and billions in Halifax Water upgrades, we need to take thoughtful action now to ensure small businesses aren’t left to die in the dust.

Jordi Morgan is vice president, Atlantic, of the Canadian Federation of Independent Business.


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