Why are Halifax building inspectors trying to kill small business?

Cross-eyed businessman wrapped in red tape

 

Today, Sailor Bup’s posted a missive about what has become an all too familiar story of the heavy-handed, anti-small business attitude of the building inspection department in the City of Halifax…you’ll find it below and if you have any interest in the growth of small business in Halifax, I encourage you to read it.

This comes on the heels of a meeting CFIB had this week with the folks at The Darkside Cafe on Wyse Road in Dartmouth who are suffering under the same level of destructive bureaucratic engagement. The Darkside story is equally discouraging with the city’s Chief Building Inspector directing subordinates to “throw the book” at a small business operator who has perpetrated the egregious crime of not being clear on if it’s an art shop that sells coffee…or a coffee shop that sells art.

Cultures of mediocrity in public service delivery become ingrained in government in spite of the even the best individual efforts. In Halifax, we’ve had poor public service so long, the city is no longer even embarrassed by its shortcomings, and it would be difficult to imagine how the opinion of citizens and business around of the delivery of public services could be much worse.

In a submission to HRM, the Greater Halifax Partnership provided an Index of Business Opinions of Municipal Government Regulation. With 0% being the point of neutrality, the City’s score was minus 26.1%. In fact, it has been below zero for the past 12 years, ranging from a worst of minus 39% to a high-water mark of minus 14% in 2013. This data was supplied by staff to Council in their recent recommendation on red tape reduction.

Regulation opinions HRM

While “regulation” itself may seem like an abstract, it is the backbone of government service. Councillor Jennifer Watts pointed out to The Coast, “That’s the nature of who we are…Everything we do in government is regulation.” Poor service delivery can utterly destroy the application of even the most reasonable regulation…and the opinion of service delivery in HRM is clearly abysmal.

And this is not news. Years of protestations from the citizenry notwithstanding, in 2013 at the Atlantic Mayors’ Congress here in Halifax, leaders of 24 municipalities passed a motion to create a committee to study ways to engage provincial governments and reduce the regulatory burden on businesses. So, how’s that been going?

If you have similar stories of building inspectors in Halifax acting in this fashion, we want to hear about it. Last year Halifax was awarded CFIB’s National Paperweight Award for the ridiculous nature of its patio laws. We are continuing to take submissions to shine the light on heavy-handed, unnecessary regulatory burden imposed by the city government. We want to hear from you at msns@cfib.ca

SAILOR BUP’S VS HALIFAX – ROUND 3

We sat quietly on this for almost a year, but now it’s time to go public.
First the liquor, then the sign in our downtown shop, now our Dartmouth shop. We may be a little brash and outspoken (we think it’s part of our charm), but since people trust us with their heads and faces, we always play by the rules where regulations are concerned. Today, we are bummed out to tell you we have now AGAIN been pushed into a battle with HRM. This is a lengthy read, but if you like gossip straight from the source, here it is.
A couple weeks after opening in Dartmouth, we were visited by an HRM building inspector. Before we opened the shop, we painted, installed a back bar, put up a partition/non load bearing wall, built a bench, laid down flooring, painted, installed shelving on the wall, installed some new lighting, installed new sinks (to existing plumbing) and that was about it. Pretty standard stuff. The trigger to spur HRM’s visit was the sign that we installed on an already existing sign holder that had been there for decades. Starting to sound familiar?
That inspector walked in and, before “inspecting” a thing, said “Nice shop you have here. Looks like you did a lot of work. Too bad we’ll be shutting you down in 30 days.” This was said in front of both staff and our customers. It’s important to note that this happened only a couple months after our first sign battle with HRM Planning & Development. Ourselves and another business protested a number of seemingly arbitrary fees that kept getting tacked on to our applications, got a bit of media attention, and the city backed down. We assume they didn’t like that. Maybe that’s just us.
A formal complaint was lodged with HRM against this inspector and, to our knowledge, it has yet to be addressed—no one ever followed up with us. A little while later, HRM ordered an issue of compliance for us to obtain an occupancy permit, stating that the day-to-day business of the leased spot had since “changed use” from the previous occupant and we were in violation.
The previous occupant was a DVD rental and laptop repair shop. This means they fell under the category of personal services and mercantile. That’s how we are categorized, too. Haircuts, shaves, beard treatments, etc. are personal services. Selling pomades, t-shirts, etc. makes us mercantile as well. Seems pretty straightforward. Still, we welcomed the inspection without question.
HRM sent a different inspector this time (we wonder why…). They told us we needed to patch a few small holes in the ceiling made by the previous owner, install an illuminated exit sign over the door, and move the fire extinguisher by 3 metres—and that if we did these things, the permit would be granted. Okay, fair. We had this work done in a matter of days.
At the same time, we were getting nervous. Not because we thought we were doing anything wrong, but because we had gone down this road with HRM before and suspected the circus was just beginning. We contacted both our lawyer and Councillor Gloria McCluskey. Our lawyer advised us to let him handle anything else stemming from this issue going forward. Councillor McCluskey looked into the inspection history and told us to simply get back to work and not worry about it from this point forward.
When it came time for the followup inspection, our lawyer made sure he was present. This next inspector informed us that the plumbing was not vented and that he was concerned about some aspects of the residential side of the building. Our lawyer asked if that was the end of his concerns because we wanted to get everything sorted and get back to work. The inspector sneered at our lawyer and said “well, let’s get everything, then.”
He picked up his clipboard again and took another look around the shop. He found two additional holes in the washroom (literally made by thumb tacks) in a spot he had inspected not five minutes before. Our lawyer asked why the other two inspectors hadn’t made any mention of them and the inspector laughed and said “I guess they didn’t look up”. After that, the inspector asked to have access to the apartments upstairs. Our lawyer informed him that we couldn’t give him access as we didn’t own the building and had no legal connection to or authority over that portion of the building. In response, the inspector said the building wasn’t up to fire code. Our lawyer asked why two previous inspectors AND the inspection he had “finished” before apparently being rubbed the wrong way by a question hadn’t caught such a large issue. The inspector handed our lawyer his report and walked out without saying a word.
By the way, we called a plumber in that same day to find out why the plumbing wasn’t vented. It was. The vent pipe is the first thing you see when you open the access door. The plumber was quite confused as to why the HRM inspector would have claimed that.
Anyway, we patched up the thumb tack holes, got a letter from the building owner confirming that all plumbing was pre-existing and were reassured by a plumber that everything was in order, and called HRM back for a followup inspection. That was in April. This is September. They haven’t been back. They’ve ignored our requests to direct correspondence to our lawyer on numerous occasions.
This is a David vs. Goliath story, and Goliath is accountable to no one. They seem to make the rules up as they go.
The story gets better, too.
After all this, we had a meeting with two individuals from HRM Planning and Development thanks to the help of Councillor McCluskey. We left completely astounded and more confused than we were going in. They told us that their definition of “previous tenant” was not the last person actually in the unit, but the last tenant to hold an occupancy permit on record with them. They then told us according to their information they were leaning “90% in the other direction” in terms of the change of use claim. We asked them who the last “previous tenant” was so we could look into it. They replied with a brief pause and, then, “we’re not quite sure”. It’s very interesting to us that they could calculate their disagreement to the precise number of 90% without even knowing what they were disagreeing with. It’s also very interesting that they weren’t at all bothered by the previous tenant (according to everyone’s definition except, apparently, their own) allegedly operating without an occupancy permit for over a decade (again, according to them).
Our research shows the last tenant was a DVD sales and rental/laptop repair place. The one before that was a trophy shop that also did engraving on the plates of the trophies he sold. Both personal services, both mercantile. This puts us back almost 20 years.
Planning and Development asked us to write them a letter stating that we changed our stance on the “change of use”, and they would grant the permit. Nothing came. No permit. And now, months later—after absolutely no reply from the city to come follow up on the inspection—they have had us charged in relation to the building code with items such as plumbing (that was independently inspected by another plumber who we’re sure would have loved to hand us a repair bill but couldn’t actually find anything to repair, and was pre-existing according to a letter from the building owner himself) and other items that pertain to the residential portion of the building which we have no control over because we do not own or lease it. We lease 700 sq ft in the front of the building. That is it. Nothing more. That would be like your next door neighbour hitting you with a repair bill for his broken furnace. Ridiculous at best.
Among the laundry list of things we discussed with HRM, they told us the building is not wheelchair accessible and that every business in HRM needs to be wheelchair accessible. Which is 100% correct. They do. In the worst way. In fact, we requested a ramp for our downtown shop. And were rejected. We were told that if we even had a removable one, we would be fined each day it was out on the sidewalk. So all we can take from this is that the enforceable by-laws are enforceable based on the level of interest from HRM. Now they have an interest in seeing that our Dartmouth shop gets closed, so it is suddenly enforceable.
We know that consumers are entitled to support the businesses they like and not support the businesses they don’t like. HRM doesn’t have that right. They have to be impartial, even if they didn’t like the outcome of a previous disagreement over, say, a sign. They have to be fair, even if they looked a little silly, just as a hypothetical example, after telling adults they couldn’t enjoy a single beer in the middle of the afternoon. They can’t make up problems out of thin air and cost a small business thousands and thousands of dollars in legal fees just because.
Except, unfortunately, it seems they can.
Mayor Savage, you say you love small business. You say that Halifax needs small businesses. Do you really? Does it really? These employees report to you. Hold them accountable. When is this going to end? Take a look around your city. Empty spaces and businesses closing down everywhere. You need to change how officials interact with small businesses in your city. If small businesses are the backbone of your city, stop trying to break them.
We are already anticipating the visit to our Gottingen St location after seeing the HRM By-Law vehicle parked immediately outside and someone writing on a clipboard. Stay tuned for that one.

Is Halifax “the new Seattle”? We have some work to do…

nova centreIt’s been 25 years since someone at Melody Maker declared Halifax “the new Seattle.” The reference was to the early 90’s burgeoning alternative music scene and what seemed to be a genuine surge in hip music, culture and attitude in the city.

Halifax is still a pretty cool place to live, all things considered, but it isn’t Seattle. However, there are signs we may be taking steps toward acting a bit more like the home of the Seahawks.

This week, Halifax Regional Council voted to do something to help businesses being pummelled because they are located next to large scale development projects. CFIB has been working for a couple of years to assist the city with the development of plans to mitigate the severe damage being done to businesses suffering in the shadow of construction disruption.

The construction site management technical guidelines approved this week are designed to help folks contending with future projects. The speed of the action taken indicates the mayor and councillors understand the severity of the problem.

A lack of appropriate guidelines, oversight and management capacity on the part of the city has wreaked predictable economic havoc.

What is puzzling is the city’s reluctance to publicly accept responsibility for any of the damage. CFIB acknowledges and supports the new guidelines as a positive step forward. Still, as Economy Shoe Shop owner Victor Syperek noted to the CBC this week, for many of the businesses adjacent the Nova Centre, it’s closing the barn door.

argyle-street-downtown-business-878x494

Recently, some of these businesses have launched legal action to seek redress. In response, the city immediately distanced itself, saying the suit, which is rooted in a statutory claim of “injurious affection,” fell outside the interpretation of the law. Certainly the city is well within its rights to defend itself against a lawsuit, but there seem to be contradictory messages here.

On one hand, the rapid development of a construction management guideline recognizes the city did a lousy job protecting small businesses against a development it approved. On the other, the city claims it legally bears no responsibility for the impact. Hmmm.

So, back to Seattle. In contrast to the Halifax approach, in advance of recent major work along an important avenue populated by many small and micro-business, Seattle set up the 23rd Avenue Stabilization Fund with the intent of providing support to businesses which would inevitably be affected by major road reconstruction.

Businesses were invited to apply under clear criteria for support, ranging from deferrals of taxes, licensing and utility payments, to direct financial assistance. Direct and individualized support was provided by the city to assist business owners in gathering the necessary documentation. Communication from the city was clear, precise and issued well in advance of any activity. Consideration was given to access and promotion of business in the region.

Seattle also did a similar and wider scale project in the early 2000s called the Rainer Valley Development Fund during their light rail transit line construction, so it’s not the first time they’ve thought outside of the box and looked beyond state laws to find ways to compensate small business.

With this in mind, Halifax now has to look at not just construction regulation, but the complete picture; a more empathetic approach with creative solutions to let small business know it’s actually valued in this city.

It may not be Nirvana, but it’s certainly better than what we’ve seen.

This post originally published in the Chronicle Herald

Of Trade and Liquor and Lawyers.

http://www.cbc.ca/news/canada/new-brunswick/gerard-comeau-border-alcohol-ruling-1.3554908

Gerard Comeau after a judge dismissed a charge of bringing too much alcohol into New Brunswick because it violated free trade provisions in the Constitution. (CBC NB)

A few years ago, Gerard Comeau, a retired steelworker from Tracadie, New Brunswick, went on a 185 kilometre booze run to Pointe-à-la-Croix, Quebec. Like countless other folks in New Brunswick, Gerard opted to make the two-hour drive to cross over the Restigouche River into the neighbouring province to pick up cheap booze which often sells at half the price of the same product in the New Brunswick Liquor Corporation (NB Liquor) outlet.

When Gerard brought his 14 cases of beer and three bottles of liquor back home that day, little did he know he was triggering a series of events which would place him in the company of our Fathers of Confederation. Sir John A. MacDonald and George Brown’s healthy taste for tipple notwithstanding, Gerard had something more in common with the framers of the Constitution: the desire to promote free trade. Gerard’s free trade efforts, however, led to him being charged with illegal importation of alcohol.

Three years later Mr. Comeau showed up for court. With the help of some constitutional experts and lawyers, Gerard argued that Section 134 of the New Brunswick Liquor Control Act is unconstitutional.

New Brunswick’s regulations, like Nova Scotia’s complex assortment of liquor laws, are empowered by a 1928 federal statute, the Importation of Intoxicating Liquors Act. It demands alcohol only move in or out of provinces with permission from its liquor control board. It was designed primarily to stop bootlegging as Prohibition was lifted at different times in different jurisdictions. It’s also a pretty handy law should a province want to enable a monopoly and jack up its prices without having to consider all that messy stuff like supply, demand and other market forces.

When they got together in Charlottetown, this isn’t quite how the founding fathers envisioned our free trading Dominion.

In his decision, Provincial Court Judge Ronald LeBlanc dusted off our history and ruled that New Brunswick’s restrictions on bringing alcohol into the province violate the Constitution’s free-trade provisions. LeBlanc cited Section 121 of the Constitution Act; “All Articles of the Growth, Produce, or Manufacture of any one of the Provinces shall, from and after the Union, be admitted free into each of the other Provinces.”

Judge LeBlanc correctly recognized and emphasized free trade between the provinces was the intention of the signatories and a founding principle of Canada.

To find the turning point between the signing of the Constitution and when our free-trader Gerard was charged, we need to go back to the 1920s. During the height of the Prohibition era, the Supreme Court of Canada (SCOC) was asked to rule on an interprovincial trade dispute and, in the process, essentially gelded the free trade provisions in Section 121.

As the story goes, the Canada Temperance Act (CTA) governing the sale of liquor finally came into force in Alberta in 1921. In February of that year Gold Seal, a liquor retailer in Alberta, asked Dominion Express to deliver some liquor to customers outside of Alberta. Dominion Express refused because it felt that to do so would violate the federal CTA. So began Gold Seal Ltd. v. Alberta (Attorney General) which eventually made its way to the high court.

In the Gold Seal decision, the SCOC’s interpretation of Section 121 limited its application to prohibiting only interprovincial “customs duties.” For what some have advanced were purely political reasons the SCOC kicked Section 121, and with it the free trade intention of the Fathers of Confederation, to the curb.

Since then, successive politicians, courts, government officials, special interests and political constituencies in every province have used the Supreme Court’s ruling to successfully impose a myriad of trade schemes and regulations on everything from eggs, wheat and coffee creamers to truck parts and, of course, liquor.

However, the LeBlanc decision in the Comeau case has drawn back the curtain on a very important and equally inconvenient truth. Provincial liquor control regulations, which provide the foundation for our provincial liquor monopolies, including the NSLC, may not pass muster according to intention of the constitution.

Last Friday, the New Brunswick government announced it is seeking leave to appeal the Comeau ruling directly to the New Brunswick Court of Appeal. The federal Conservatives are also calling on the federal government to act as an intervener if the Court of Appeal agrees to hear it and are also asking the Trudeau government to refer the case to the Supreme Court to clarify Section 121.

So what does this all mean for entrepreneurs and small business in Nova Scotia? It could mean a great deal.

As a backdrop to all of this, the Premiers are embroiled in retooling the Agreement on Internal Trade (AIT). A deadline for an agreement passed March 31, 2016, but hope remains something will eventually get hammered out. There is some urgency as international trade agreements, such the Comprehensive Economic and Trade Agreement (CETA) with Europe and the Trans-Pacific Partnership (TPP) are coming into play. Why the urgency? Without change, under these new agreements, we may end up with foreign companies having greater access to opportunities in Canada than firms located in a neighbouring province or territory.

We’ve seen some regional progress on this front with the New West Partnership between B.C., Alberta, Saskatchewan and Manitoba and last year the Atlantic Premiers signed the Council of Atlantic Premiers’ (CAP) Red Tape Reduction Partnership and opened the Joint Office of Regulatory Affairs. All moves aimed at streamlining the flow of business between provinces.

In fact, just last month at a CAP meeting in Annapolis Royal, in an under-reported but nonetheless significant development, Premiers McNeil, Gallant, MacLauchlan and Ball agreed to advance three specific recommendations to reduce trade barriers brought forward by business groups led by the Canadian Federation of Independent Business, the Atlantic Chambers of Commerce and Canadian Manufacturers and Exporters.

So while the Premiers seem to collectively understand internal free trade is an urgent priority, the Comeau case could force the issue. If the case is referred to the SCOC and should that ruling be upheld, it will have profound implications for not only liquor regulations, but it might well call into question the constitutional validity of the tens of thousands of other interprovincial trade restrictions, prohibitions and conditions on business now in place; restrictions which are estimated to cost our national economy upwards of $14 billion every year.

It’s also encouraging the Atlantic Premiers are asking business for concrete recommendations to address regional trade problems. CFIB believes this is another step in the right direction. We encourage business owners to bring forward red tape and trade issues which require attention and we will be monitoring to ensure governments respond with solutions. If you do business in more than one province and you’re running into red tape between jurisdictions, CFIB wants to know about it.

With liquor regulations under the microscope, perhaps now is the best opportunity to assist our burgeoning local wine, craft beer and boutique distilleries. These small businesses are providing important economic growth opportunities, especially in rural areas. Eliminating archaic, Prohibition-era liquor regulations is something the Atlantic Premiers should get out in front of now.

This could have enormously positive impacts downstream in the accommodation, food and beverage and tourism industries. More and more entrepreneurs in Nova Scotia are risking their own capital and creating ventures in these sectors which are showing tremendous possibilities. Government needs to create the right environment for business and then get out of the way.

Eliminating cross-border restrictions on trade of alcohol products being manufactured throughout our region is a good place to start looking for solutions. It is one example of a broader need to remove barriers to business. Allowing more competition and freeing up the flow of commerce by eliminating restrictions on internal trade is an idea whose time has arrived.

Originally published in the Chronicle Herald, June 7, 2016

 

The $15 Minimum Wage. Good politics, bad policy

burrill-gary-npd

The latest salvo in the Nova Scotia NDP’s battle back from electoral oblivion has been fired. Newly minted leader Gary Burrill is launching the Nova Scotia franchise of the “fight for 15” minimum wage war. Good politics perhaps but this is bad economic policy. This massive minimum wage hike is modelled on the Alberta government’s last election platform and has become somewhat of a Cause Célèbre for organized labour across Canada and the U.S.

The “Fight for 15” walks hand-in-hand with the discussion of the Living Wage, a somewhat arbitrary economic line-in-the-sand being drawn by anti-poverty and social activists.

In a study commissioned last year by the United Way the Living Wage for Halifax was identified by the Canadian Centre for Policy Alternatives at $20.10 per hour. This benchmark describes what the CCPA believes each money earner in a family of two parents and two school age children must earn to provide what they saw as a “reasonable quality of life”, free of the stress of financial hardship.

However the 20 dollar plus Living Wage is more a Trojan horse. Behind this is what its supporters feel is the much more “reasonable” 15 dollar minimum wage. While the Living Wage is promoted as a voluntary measure, it’s not hard to draw a line directly to the minimum wage policy discussion. The headline in the Herald last year read, Study: Minimum wage only half of what it needs to be.

The Living Wage has been officially adopted by New Westminster, British Columbia and several cities in the United States. The Mayor of Vancouver is now mulling over the idea. The outcome for city employees is nominal as the vast majority of municipal government jobs pay near or above that mark anyway. Where it is really felt is in the private sector.  As a Living Wage community, it is a requirement for private contractors also to also meet that benchmark in order to be eligible to contract with the municipality.

Unions like this policy because it drives up wages and reduces the ability of private sector contractors to compete for union jobs. It effectively increases the government employee wage floor, makes collective bargaining easier and freezes out small private contractors, a perfect union trifecta.

While this Living Wage conversation goes on, discussions around the minimum wage are ramping up in Canada with the help of Alberta`s new government. It was in the NDP platform. When the NDP swept into power, Alberta was left with a minimum wage policy that remains nothing short of horrifying for small business.

Since that time the Alberta government’s own advisors say: “it’s reasonable to assume significant job loss is one realistic possibility” and the NDP government has not produced a single economic impact analysis demonstrating otherwise. Premier Rachael Notley even admitted Alberta’s fragile economy cannot handle this shock.

Nova Scotia’s economy is certainly no more equipped to handle this kind hike and the NDP here are proposing they can meet that goal by 2018. There is no economic impact analysis. They say small business will be exempt, but no criteria is identified. How will they determine how one business must pay a $15 minimum wage and another does not? The prospect of implementing this kind of discriminatory economic policy is nightmarish.

Punishing jumps in the minimum wage mean targeted business owners will need to hike prices, lay off staff, reduce employee work hours and reduce training. Profitability will decline, reinvestments and growth in business will diminish, and jobs which may otherwise have been created will simply not appear. In other words, nothing good.

On the other hand, government will reap benefits through higher personal income and payroll tax revenues. For the low-income employee, the benefit will be marginal at best.

In fact, minimum wage earners lost more in 2015 due to higher government deductions (e.g. CPP/QPP, EI, federal and provincial taxes) compared to 2010 in all provinces and territories except Newfoundland and Labrador. For example, Alberta minimum wage earners could see their payroll deductions increase from $1,965.60 in 2010 to $5,576.22 in 2018 with the minimum wage rate increase to $15 per hour.

Minimum wage hikes are harmful to youth employment.  According to a recent report from the Fraser Institute, for every ten per cent increase in minimum wage there is a resulting decrease of youth employment by three to six per cent.  The NDP proposal of a 29 per cent to the minimum wage would mean a reduction of 9 to 18 per cent in youth employment in Nova Scotia.

The report also notes that nearly 59 per cent of people earning minimum wage are people aged 15-24 who typically are entering the workforce.  Only 2 per cent are people who are single parents who have at least one dependent living at home.

Basic Personal Exemptions 2016

BPE

If government is looking for a policy change to help low income workers, they need look no further than the Basic Personal Exemption (BPE). This is the annual income at which a worker begins to pay taxes. Nova Scotia has the second lowest BPE is Canada at $8,481. We urge the Nova Scotia government to address this shameful statistic first before looking at reckless minimum wage hikes.

We were very pleased to see this week the Premier suggesting this is his preferred option. If so, CFIB will be looking for it in the next budget. Nova Scotians face some of the heaviest tax burden in the country. By allowing low income earners to keep more of what they earn, rather than enrich the treasury through minimum wage hikes, the government can actually do something meaningful to benefit those who need it most.

Construction regulations shouldn’t leave small firms in the dust

construction zone

The Canadian Federation of Independent Business (CFIB) is welcoming an important milestone in our long-term effort to have Halifax adopt a construction mitigation policy.

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

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

Witness the demise of the popular Emma’s Eatery in Eastern Passage after months of ongoing interference from Halifax Water’s storm system upgrades. 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.

Economic barbed wire

Barbed Wire

Steps are being taken by Atlantic Canadian political leaders to dismantle a virtual wall erected between provinces over more than a century.

In perhaps one of the most memorable moments of his presidency, in 1987 Ronald Reagan stood before the Brandenburg Gates in Berlin and implored Soviet Union leader Mikhail Gorbachev to “Tear down this wall!” The purpose of the speech was to compel the Soviets to submit their economy to accountability, transparency, and greater freedom. While there may be lingering questions about the impact of Reagan’s rhetorical flourish, there’s no doubt the subsequent destruction of the Berlin Wall was transformative for the European economy.
While not the magnitude of Reagan’s oratorical overture, steps are being taken by political leaders in Atlantic Canada to dismantle a virtual wall erected between provinces over more than a century by creating a new office to begin pulling apart the red tape that often acts like economic barbed wire between provinces. Mention of internal trade barriers is frequently met with confused stares. After all, there are no border guards on the Confederation Bridge or economic sanctions against the province of Nova Scotia. Our members tell us that these barriers take the more insidious form of unnecessary and burdensome regulation.
Whether due to political interference, parochial interests, or simply grown from the nature of our different bureaucratic cultures, red tape inhibits businesses that aim to work in other jurisdictions by creating a prohibitive and expensive maze of differing rules, requirements, regulations, and practices.

From a business perspective, why do New Brunswick and Nova Scotia have different requirements in fall arrest requirements when gravity appears to act with remarkable similarity in both provinces? Why would first-aid kits in each province require different contents or trucks require different wide-load signage? Some of the examples border on the ridiculous, but either by default, or in some cases by design, all of these differences add cost, drag productivity, and ultimately make things more expensive for consumers.

The recent signing of the Comprehensive Economic and Trade Agreement (CETA) with Europe further highlights the need to move on freer trade within Canada. In some cases, the new agreement means that European companies will have access to opportunities across Canada that companies in a neighbouring province or territory may not. With a more global business environment and greater opportunities for free trade, we can’t continue to ignore the impact that our own provincial differences have on our economic competitiveness.

In fact, a recent poll conducted for the Canadian Federation of Independent Business (CFIB) by Ipsos-Reid shows that the majority of working Canadians agree it’s time for premiers to work together to remove impediments to the flow of goods, services, and workers across provincial and territorial boundaries.

With that in mind, CFIB has been cheering some of the recent work being conducted by both the Council of Atlantic Premiers and the Council of the Federation to help tear down those walls. Earlier this year, Premiers Gallant and McNeil took the significant step of creating the Joint Office of Regulatory and Service Effectiveness between New Brunswick and Nova Scotia. More recently, Prince Edward Island’s Premier Wade MacLauchlan and Newfoundland and Labrador’s government are showing interest in the process.

All of the Atlantic provinces stated in January that they would create an Atlantic Red Tape Reduction Partnership that would help streamline business requirements to create a more competitive economic environment within the region. Our neighbours are important trading partners, and we encourage these bodies to set meaningful regulation reduction targets, reach them, and report publicly on their achievements.

Further to regional work, the Council of the Federation (Premiers) has also been the scene of some encouraging progress. While we’ll have to wait until next spring to see what progress is made with reforms to our main national trade agreement, the Agreement on Internal Trade, we did see a positive step with the premiers signing the Provincial–Territorial Apprentice Mobility Protocol at their recent meeting in St. John’s.

Most notable about this new mobility protocol is that it follows the principle of mutual recognition. Rather than a lengthy bureaucratic process of trying to harmonize each and every regulation across each jurisdiction, the premiers simply said, “If it’s good enough in Province A, it’s good enough for Province B.” This is the gold standard for modern trade agreements and is precisely the direction we want our governments to go when removing barriers.

While the stakes may not seem as high in Atlantic Canada as for the Soviets in 1987, reality shows that we’re facing many daunting economic challenges and unfavourable demographics. With the world of trade changing around us, it’s becoming increasingly important that we work together to break down barriers between our provinces to make the best use of our economic and human resources. If we don’t, we risk isolating ourselves behind our walls of red tape.

Jordi Morgan is the vice-president, Atlantic Canada, and Erin McGrath-Gaudet is the director, P.E.I. and intergovernmental affairs, for the Canadian Federation of Independent Business. CFIB represents the voices of 11,000 small and medium-size firms in Atlantic Canada, with 109,000 members across Canada.

This piece originally appeared in Progress 101 issue online, by subscription and on newstands across Canada

Yes, there’s a new Sheriff in Alberta, Buford T. Notley

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Q: “What’s the difference between Canada’s inter-provincial liquor regulations and Smokey and the Bandit?

A: One is a farce based on the antics of local authorities chasing around entrepreneurs to enforce prohibition era liquor regulations…and the other is a Burt Reynolds movie. (Ba-dum)

The sad reality though is trade regulations governing alcoholic beverages have evolved into a rather unfunny joke in most provinces. Any long-forgotten public policy benefits these regulations may have once had (if any) lay long buried under shovels full of parochialism and politics.

It’s timely to note that Canada’s plunge into restrictive inter-provincial trade policies was initiated with the movement of liquor across provincial borders. It was during the height of the prohibition era the Supreme Court of Canada (SCOC) jumped in and gelded section 121 of the Constitution Act, the part which clearly states the framers intent of unfettered free trade between provinces.

As I’ve outlined on this blog before, the Canada Temperance Act (CTA) governing the sale of liquor came into force in Alberta in January of 1921. In February of that year, Gold Seal, a liquor retailer in Alberta, asked Dominion Express to deliver liquor to some folks outside of Alberta. Dominion Express refused because it felt that to do so would violate the federal CTA. So began Gold Seal Ltd. v. Alberta (Attorney General) which eventually made its way to the high court.

With the Gold Seal decision, the SCOC’s interpretation of section 121 limited its application to prohibiting only inter-provincial “customs duties” and, for what some have advanced were political reasons, the SCOC poured section 121 and the free-trade intentions of the Fathers of Confederation into the gutter.

Since that decision, successive politicians, courts, government officials, special interests and other political constituencies have used the Court’s interpretation of section 121 to successfully create trade schemes and regulation on virtually everything but especially…liquor.

Until recently, CFIB thought provincial governments were getting the message. At least we were until the Notley government in Alberta delivered its recent budget and changes to the Alcohol and Gaming Regulations. Without consultation and without warning, the government changed the regulations around the importation of beer from outside the New West Partnership (NWP) provinces, B.C., Alberta and Saskatchewan. Before the budget, breweries outside the NWP were charged 20 cents a litre to sell their product in Alberta. Today, they’re paying $1.25 a litre.

A six-pack of “imported” beer is going up $3, a case will increase by $11 and a keg by $30. Importers say the 525 per cent increase in tax means small importers’ products will not be able to compete with the large internationals, effectively killing a piece of Canada’s burgeoning craft and artisanal beer sector.

When the Calgary Herald asked about the changes, a Finance ministry spokesperson sent an email back saying the budget changes support Alberta businesses. “Alberta craft brewers create jobs that help grow our economy,” the email read. “Our government will use the tools we have to help this and other industries grow.” Sure.

In fact, as a result of the changes, some small craft brewers based outside the NWP region have announced they are pulling out of the Alberta market.  Ontario-based Muskoka Brewery said the tax increase has created “unacceptable conditions” and it is winding down operations in Alberta, B.C. and Saskatchewan. More recently, Justice Earl Wilson of the Court of Queen’s Bench granted an injunction to Steam Whistle, another Ontario brewery, temporarily preventing the government of Alberta from collecting what they claim is a discriminatory tax on its beer.

Craft breweries from coast to coast to coast should be the poster children for how business will be conducted in the 21st century. While they compete, they also collaborate to build their industry in the face of some of the worst regulatory impediments government could devise.

It borders on the bizarre that the Alberta government feels it’s a good time for what amounts to a ham-fisted, unconstitutional, interventionist approach to an industry that up until now, without these “tools”, has been growing across the country in leaps and bounds.

With the NWP, B.C., Alberta and Saskatchewan were a model for the reduction of inter-provincial trade barriers. With this latest protectionist move the Alberta government has reverted to the same 1921 prohibition era thinking that got us into this trade mess in the first place.