Op-ed: To BIA or not to BIA in Ottawa?

In March of this year, Ottawa welcomed its 19th business improvement area, or “BIA.” Located several kilometres from the Canadian Tire Centre and nestled snug in the heart of Kanata’s rapidly growing retail core, the new Kanata Central Business Improvement Area encompasses both the Signature Centre and Kanata Centrum shopping malls.

Like its counterparts in other areas of the city, this BIA will be governed by a board of directors recruited from the local business community. Operating with an estimated annual budget of about $150,000, the city’s newest BIA will have a mandate similar to those of the 18 other BIAs: promoting and marketing the area, improving the neighbourhood’s streetscape and organizing a variety of special events, among other things.

While some BIAs operate with budgets of between $500,000 and nearly $1 million, the Kanata Central BIA’s budget is relatively modest and will likely only be enough to hire one or two full-time staff who can in turn organize some promotional events and act as economic development boosters for the area.

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Despite this new BIA coming into being in a seemingly co-operative manner, the basic concept of a business improvement zone remains a somewhat controversial one for many small business owners.

The involvement of City Hall in the process, combined with the power given to BIAs to raise revenues via a “levy” placed on their constituent members, has caused some to suggest that these organizations represent nothing more than another level of government placing yet another tax on hard-working business owners.

Referencing Mayor Jim Watson’s oft-cited pledge to raise taxes by no more than two per cent per year, one Kanata business owner told me frankly that the new Kanata Central BIA is “just another way for City Hall to raise taxes without being accused of raising taxes.”

While I empathize in a very general way with this business owner’s broad frustration over the growing tax burden placed on Canada’s small and medium-sized companies, characterizing BIAs as a veiled government tax grab is inaccurate.

A new BIA cannot be created without the clear support of the local business community, and the governance of a BIA remains entirely within the hands of its membership, which elects a board of directors from the community and gives to this board wide-ranging powers over the organization’s bylaws, spending priorities and mandate.

It is true that, unlike a chamber of commerce or board of trade, membership in a BIA is not voluntary, which means that there will always be business owners who see little value in BIA membership and who resent being forced to pay the yearly levy. But as one BIA executive director aptly put it to me, “if a business owner doesn’t like being a member, then they need to speak up. There are lots of opportunities to speak your mind.”

Although the ability of an individual BIA member to effect major change is probably easier said than done (once a BIA is created, for instance, it’s unclear what it would take to dissolve it), the ability of BIA members to steer their organization in a direction they find suitable is considerable, and certainly no less than in a chamber of commerce or other independent business advocacy association.

If a complaint can be made about Ottawa’s growing love of BIAs as a model to spur economic development, it is that in many cases, the creation of a BIA represents something akin to a solution in search of a problem.

In Ottawa, the creation of a BIA is rarely preceded by a proper economic impact analysis, and there are no set guidelines about what a BIA should and should not do in terms of mandate, at least to the extent that the different BIAs might be able to co-ordinate their own efforts directly with those of the city’s various other economic development initiatives and organizations. If the BIA approach can theoretically work for communities as fundamentally dissimilar as Westboro, the ByWard Market and Kanata Central, then couldn’t the argument be made that the concept of a BIA is so ambiguous as to make it meaningless?

Lack of resources

A further challenge related to BIAs is the fact that there exists no universally accepted standards of success with which to measure these organizations.

Each separate BIA is free to develop and track its own success metrics, which in practice usually means that some BIAs have developed very sophisticated key performance indicators that provide a meaningful gauge of their organization’s capabilities and successes, while others track little more than monies in and monies out. Often this problem stems from a simple lack of resources – internally tracking success takes time, people and money, things which many BIAs have in very limited supply.

Only time will tell whether the Kanata Central BIA will prove its worth. Certainly, there are some impressive success stories to act as promising precedent – for example, the Kanata North BIA (which acts as a micro-booster for Ottawa’s tech community) is often held up as a model of a successful economic development organization that punches far above its weight.

But for every BIA that functions with a clear mandate and produces impressive tangible economic results, there is another which struggles to create meaningful impact and value for its members.

In the majority of these cases, the problem is not with ineffective staff or a disengaged membership, but rather a lack of need for a BIA in the first place. There is undoubtedly an argument to be made that a BIA can have an immensely positive impact on a business community, but it is much more difficult to make the case that there is a one-size-fits-all solution to local economic development or that the BIA model is the ideal solution for every situation.

Mischa Kaplan is a local business owner, consultant and economic development advocate.