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.

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.

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.