Freedom Flyer September 1986 Cover

Freedom Flyer 8

the official newsletter of the
Freedom Party of Ontario

September 1986




TORONTO & LONDON FP SUPPORTERS FIGHT BUSINESS IMPROVEMENT AREA TAXES.

Toronto businessman and Fp supporter Bob Adams has a problem we at Freedom Party are only too familiar with: he's a member of an "association" he wants no part of --- and despite his protests, his municipal government insists he continue to be a member of that association.

With government spending spiralling out of control, the Ontario Government and its municipalities have invented a new way of taxing businesses in order to provide them with the services that should already have been paid for through their regular taxes.

Welcome to the world of the Business Improvement Area [BIA], the name designated to a particularly distasteful government scheme aimed at raising taxes without having to deal with conventions like democratic processes or fair and equal representation.

In addition to education, property, and business taxes, more and more municipal businesses are finding themselves having to pay yet another tax: the Business Improvement Tax, which is levied only against those unfortunate enough to have found themselves conscripted as members of a BIA.

The money collected in this manner is given to an appointed group of "businesspeople" (within a designated area) to spend largely as they see fit. Although legislation supposedly requires that municipal councils keep tabs on these BIAs (there are several hundred now in Ontario), in practice, they are autonomous bodies free to do whatever they like as long as they do not conflict with city council priorities.

The predicament faced by Bob Adams is by no means unique.

In 1980, Fp Action Director Marc Emery found himself in the same circumstance when he was forced to join a downtown London BIA. To protest, he spent three years and $20,000 attempting to get his BIA abolished. Emery petitioned Council three times, citing the fact that the downtown business community wanted nothing whatever to do with a BIA --- or the taxes it would incur. Only 22 businesses favoured having a BIA, while over 300 signed Emery's petition to have the BIA abolished.

Despite this fact, the public was still being told that BIAs are being set up with the "support of the business community."

Political patronage was the true driving force behind the establishment of London's BIA. All BIA appointees were affiliated with major vested interests in the established eco-political structure of the city. Thus, BIA employees were hired, a bureaucracy was set up, and funds were spent on "promotion" and "beautification." Many promotions were costly and ineffective. But the BIA continued to be openly used for patronage, selective promotions, etc.

City Council's first approved budget (in 1980) for the 16-block area (the largest BIA in Ontario) was more than $100,000, or an average of $110 per business. By l986,the budget was $376,400 (including grants, subsidies from federal and provincial sources, but not including interest-free loans topping $50,000 from the Province of Ontario). This required an average BIA tax on downtown businesses of $360 per business, representing an increase of 22% a year, whereas normal city taxes have risen an average of only 6% (education taxes 9.5%) during the same period.

In 1980, the BIA special tax added 6% to a total business tax bill; today it comprises an amount 20% above total business taxes.

To illustrate the waste inherent in the operation of BIAs, consider that, of the $376,000 1986 budget, $99,250 is budgeted for administration (or 27%). This included $10,000 for the renovation of the BIA's new office, and $12,800 severance pay for its last "manager" who quit after it was revealed that a promotional hot-air balloon fiesta budgeted to cost $10,500 actually cost an additional $40,000.

While it is true that occassionally, the BIA spends money on useful services like streetcleaning, we must remember that services of this nature should have already been paid for and provided through the city's realty and business tax; the question arises: where are all those tax dollars going?

The coercive and wasteful nature of BIAs aside, it's easy to see why city councils find them so attractive. BIAs force businesses to be taxed again for services the local government should already be providing, while shifting the burden of responsibility for providing those services elsewhere. BIAs also enable councils to force businesses to pay for services they do not want.

Councils recruit willing businessmen to run these pseudo-governments, giving them the power to tax, a bureaucracy to regulate, and the propaganda to claim that BIA programs have "the support of the business community." Inefficient businessmen are most attracted to BIAs, since BIAs can be used as a tool to suppress new development and competition elsewhere. (Of the ten original board members appointed to downtown London's BIA in 1980, nine were retired or moved out of the area by 1985; in fact, seven had left the downtown area by 1982! So much for commitment to the downtown business community.)

When fiscal disaster or corruption occurs, as it often does, city councils can blame the downtown business communities for "failing to get their act together," while, in the process, politicians avoid all the blame and responsibility for their own actions.

How do these awful programs get started in the first place when there is so little actual support within the business areas affected?

Bob Adams, of Adams Rent-All on Avenue Road and O'Connor Drive (Toronto), explains:

June 11, 1986

DEAR FELLOW BUSINESSMAN:

I am writing you as a fellow merchant on O'Connor Drive regarding the letter we all received from East York about May 23, 1986.

It was with regard to a bylaw they propose to pass which would make O'Connor Drive from street number 786 to street number 1590 a "Business Improvement Area" (B.I.A. for short).

The letter did not explain very clearly, just how the "BIA" system works. I have some experience with B.I.A.'s and when you see how they operate and how much of your money would be required, I think you will be opposed to this proposed By-law and this extra layer of taxation.

Briefly the way B.I.A.'s work is that after the By-law is passed, East York Council would appoint a Board of Management from the businessmen on the street. This Board is appointed not elected. The Board sets a budget and East York then collects the money from the O'Connor Drive businesses in the same way as your business taxes. The money is then given to the Board for various projects and even if you disagree with the way this money is being spent, you still have to pay. The history of other B.I.A.'s in Ontario shows that the average charge per merchant per year is now $322.94. Smaller businesses of course would pay less and larger would pay more. This is the average, and it seems to be increasing each year.

Do you want to pay this kind of money to provide improvement, beautification and maintenance of lands and buildings owned by East York, and the promotion of the area as a business or shopping area? It seems to me to be more logical to have the property owners or East York pay for improvements instead of the tenants.

Fortunately there is a way of preventing this By-law from being passed. All that is required is a petition of over one third of the businesses, to oppose it and the by-law cannot be passed.

If you are against this proposed by-law, please phone or write me and perhaps we can get a petition underway.

There are about 130 businesses listed in the area according to the area assessment rolls.

Yours truly,

Bob Adams
Adams Rent-All Ltd.

Adams is currrently fighting the establishment of a BIA on O'Connor Drive in Toronto. He has already had remarkable experience with another BIA on Avenue Road; as per clippings reprinted.

Freedom Party has offered to help Mr. Adams canvass the necessary number of signatures to kill this albatross for the businesses of O'Connor Drive, but Bob Adams is confident of getting the necessary number of signatures to defeat this new BIA proposal.

Late flash: the BIA was turned down! Mr. Adams successfully convinced an overwhelming majority of O'Connor Drive businesspeople that a BIA would be disasterous --- and it was defeated only a few days ago.

Regrettably, once a BIA is installed, there is no available mechanism to get rid of it, and most businesses do not realize the potential disaster awaiting them when they receive an innocuous letter like the one below:

NOTICE RE PROPOSED BUSINESS IMPROVEMENT AREA

O'CONNOR DRIVE

NOTICE is hereby given pursuant to the previsions of Section 217 of the Municipal Act (a copy of which is attached) that the Council of The Corporation of the Borough of East York proposes to pass a by-law, designating the lands shown on the attached map as an Improvement Area.

NOTICE is also hereby given that, unless a petition objecting to such designation is received by the Borough Clerk within the two months following the mailing of this notice, then Borough Council may pass a by-law designating the Improvement Area. Such petition must be signed by at least one-third of the persons occupying or using land for the purpose of, or in connection with, any business and representing at least one-third of the assessed value of the lands in the area used as the basis for computing business assessment. The last day for receiving such petition is July 21.

NOTICE is also hereby given that unless a petition objecting to such designation is received by the Borough Clerk within thirty days following the mailing of this notice, the by-law will come into force without the approval of the Municipal Board. Such petition must be signed by one or more persons entitled to notice. The last day for receiving such objection is June 23, 1986.

The proposed by-law designating the area as an Improvement Area, a plan showing the lands to be affected, and a list of the persons occupying or using land for the purpose of, or in connection with, any business in the area, shown in the last revised Assessment Roll of the municipality as being assessed for business within the meaning of the Assessment Act, may be seen in my office in the East York Municipal Offices, 550 Mortimer Avenue, Toronto.

One of the tragedies inherent in this kind of "democratic" practice is that those who take no political action (i.e., those who mind their own business) are assumed to be in support of the government's action, which may ultimately prove to their own destruction. By the time many businessmen realize what has happened to them, it is too late.

Bob Adams raised enough support from fellow Avenue Road merchants to take over their BIA and to try to have it abolished. However, North York City Council refused to do so despite a 75-2 vote in favour of its abolition by merchants.

To add insult to injury, a March 24, 1986 meeting of North York City Council resulted in the dismissal of all those opposed to the BIA from its Board of Directors. They were replaced by those more sympathetic towards Council's own goals and priorities.

We have reprinted below parts of Bob Adams' own (privately paid for) Avenue Road North business letter of May, 1986.

AVENUE ROAD BUSINESS ASSOCIATION, 1864 AVENUE RD.
NORTH YORK, M5M 3Z6

May, 1986

Sorry for the delay in getting a newsletter out to you but it has been a busy, confusing time, after what North York council did to us at their March 24 meeting.

To bring you up to date, in December 1985 we, as the B.I.A. Board of Management, presented to North York Council a strong case requesting them to repeal the B.I.A. By-law. We gave a brief history showing that most of the merchants did not want it. After at least an hour's discussion they decided to instruct the City Clerk to conduct a survey to see if the street wanted the B.I.A. or not. Alderman Berger said he would accept the results of the survey.

Mr. Berger did not like the letter we sent to the merchants enclosing an imitation B.I.A. bill. We did not like his letter in which he said "anyone who did not respond would be considered to have no objection to the B.I.A." In his letter he also said "I will be guided by the wishes of the majority as the result of the survey".

The results for the survey were as follows:

IN SUPPORT OF THE BIA REMAINING ON AVENUE ROAD NORTH NOT IN SUPPORT OF BIA REMAINING ON AVENUE ROAD NORTH
1. Replies received from persons/organizations according to last business assessment roll
28

165

2. Replies received from persons/organizations NOT SHOWN on last business assessment roll
7

28

3. Replies received but not marked -- 6
4. Replies returned undelivered by the post office marked "Unknown", "Moved", etc. -- 6

Signed E. Robert, City Clerk

We of course then expected council to repeal the By-law, but instead of that they kicked us out and appointed a board that favours the B.I.A. The idea seems to be to have a survey and if council does not like the results, ignore it and do what you want to do anyway.

So there is now a board that represents 15% of the street and we who represent 85% are out. This means that the merchants on the street now have "taxation without representation". It would be a good idea for some members of the council to go back to their history books to read about the lengths that patriotic citizens went to to install and preserve this cornerstone of democracy "no taxation without representation". To compound this act, we also had a verbal agreement made in Mayor Lastman's office in 1983 that the Avenue Road Business Association's Board, elected by the merchants, would also be appointed as the B.I.A. Board. At that meeting were Mayor Lastman, Alderman Berger, Judy Emslie, Bob Adams and our lawyer. This arrangement was confirmed by letter dated March 9, 1983. Apparently Messrs. Lastman and Berger believe that the aggreement means nothing and can be broken.

We are going to continue to fight legally and politically, the harsh undemocratic treatment received by council over the last 6 years. We will carry on as long as you, the merchants, support us.

It is amazing how much hard feeling the BIA has caused on Avenue Road over the last 6 years. Council's action will aggravate the situation even more as merchants don't like having their clearly expressed wishes thrown out. It is obvious that most of council does not care what the merchants think or want. We will continue to fight this unwanted taxation. It is typical of governments to so easily waste taxpayers money on surveys, etc.

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