Alternatives to business improvement areas and other economic development tools
Alternatives to business improvement areas and other economic development tools
Economic development corporations
Municipalities may consider economic development corporations as an alternative governance structure to deliver traditional BIA services.
All municipalities, including the City of Toronto, may create corporations for most services and facilities that municipalities currently provide. Municipal councils decide locally how best to provide services and facilities for residents while maintaining the public interest. Municipalities may see a corporation as the best structure under which to deliver traditional BIA services. In considering the corporation model, the municipality may be of the view that the corporation option provides better value to the community than existing arrangements or alternatives.
Municipalities can consider using a special services levy for the costs of economic development services provided by an economic development corporation.
The kinds of corporate economic development services that a municipality may consider in this connection include, among others:
- public transportation systems
- site acquisition, development and disposal for certain uses, including residential
- general parking facilities
- services similar to those often provided by BIAs
- provision of culture and heritage systems
For more information concerning the above topic, section 203 of the Municipal Act, 2001, sections 148 and 154 of the City of Toronto Act, 2006, and Ontario regulations 599/06 (Municipal Services Corporations) and 609/06 (City Services Corporations) may be among the provisions of interest.
Tools that complement BIAs
The following are a list of tools that municipalities can consider to complement the work of BIAs in revitalizing neighbourhoods. They offer the ability to work with small businesses in those neighbourhoods in a number of different ways.
Business Incubators – (also known as Small Business Programs)
Municipalities can establish programs to encourage the establishment and initial growth of small businesses in the municipality. As part of this kind of program, municipalities may be able to provide certain financial incentives. Small Business Programs are often referred to as “Business Incubators.”
Approval from the Minister of Municipal Affairs and Housing is required (in all municipalities except Toronto) to establish and maintain a small business program. The use of municipal financial incentives to commercial entities may be possible under an approved municipal small business program. Toronto City Council can approve small business programs, and the related use of financial incentives, without Ministerial approval.
Business incubators may be key instruments in the nurturing and growth of small businesses. Depending upon the type of incubator, in the past they have offered the entrepreneur a range of services and resources that can help the growth of a new business venture. Examples include physical location, mentoring assistance, management assistance, business counselling and advisory services, technical information, financial advice, training, networks, etc.
Municipalities generally determine the feasibility of projects that are admitted into their incubator programs, and whether to offer a specialized menu of support resources and services.
The earliest incubation programs focused on a variety of technology companies or on a combination of light industrial, technology and service firms. More recent incubators have targeted such industries as food processing, medical technologies, space and ceramics technologies, arts and crafts, and software development. Incubators across North America have also targeted programs to support micro-enterprise creation, the needs of women and minorities, environmental endeavours and telecommunications, to name a few.
A municipality undertaking an incubator program may be seeking a number of potential benefits including:
- developing and building working partnerships with academic institutions in the municipality
- creating jobs, revitalizing neighbourhoods, commercializing new technologies, and strengthening local
- diversifying rural economies
- science-based business incubators can promote knowledge diffusion, technology transfers and high- tech firm creation
- tax base expansion and higher assessed value of properties
Community improvement plans
Community improvement planning provides a means of facilitating redevelopment activities with a goal of effectively using, reusing and restoring lands, buildings and infrastructure.
Community improvement planning was popular in the 1970s and 1980s as a means to support and encourage neighbourhood renewal and commercial area improvement. It had become an almost forgotten revitalization tool until growth pressures of the late 1990s led to interest in the development potential of brownfield sites.
Publications such as the 2000 Brownfields Showcase I and Municipal Readiness for Economic Development helped increase awareness of how community improvement plans (CIPs) provide for the cleanup of former industrial and commercial lands. A companion guide, Municipal Financial Tools for Planning and Development profiled a range of financing tools including an explanation of how community improvement plans could use tax-increment-equivalent financing to help developers remediate contaminated properties. The awareness of community improvement plans was further promoted by the Brownfields Statute Law Amendment Act, 2001, which made changes to various statutes, including the Planning Act and the Municipal Act, 2001.
Municipalities are now using CIPs in more innovative ways, such as to address growth management challenges, intensification, energy efficiency, mixed-use and transit/bicycle oriented development, accessibility, and the emerging needs of an aging baby-boom generation. Some municipalities are using CIPs as an incentive for encouraging development that meets recognized environmental standards, such as LEED®, while others use them to help attract certain kinds of employment uses. Some regional municipalities may also develop CIPs that may facilitate the development of infrastructure, including transportation corridors and affordable housing.
From its original use as a process primarily for provincial and municipal downtown revitalization grants, community improvement planning has become a flexible yet powerful tool for significant rehabilitation, development and land-use change.
Process for CIPs:
- under the Planning Act, provided that municipal official plans contain provisions relating to community improvement in the municipality, the municipality can designate community improvement project area(s) by bylaw. The municipality can then proceed to prepare a plan suitable for adoption as a CIP.
- municipalities prepare a CIP to set out what they intend to do to address an unsatisfactory state of affairs in a certain defined area.
- some CIP plans include changes to land-use and zoning regulations to encourage desired activities or limit undesirable ones. Others state what grants or loans a municipality is prepared to offer owners as an incentive to build or repair properties to meet aims stated in the plan.
- there are a number of CIPs across Ontario, with a range of financial incentives for brownfield redevelopment, cascade improvements, downtown revitalization and industrial area development.
- city council initiates a CIP and adopts it when it is finished. The Planning Act requires that at least one public meeting be held before a CIP is adopted by city council. A Minister’s approval to provide financial incentives through a CIP is no longer required but the municipality is still required to consult with the Province.
- the CIPs provide the framework for the delivery of programs to stimulate and redevelop industrial, commercial and residential lands.
For more information concerning the above topic, section 28 of the Planning Act, and Ontario regulations 550/06 (Prescribed Matters - Upper-Tier Community Improvement Plans) and 221/07 (Community Improvement Plans - Prescribed Upper-Tier Municipalities) may be among the provisions of interest.
Agreements for municipal capital facilities
Ontario municipal legislation, with some exceptions, generally prohibits municipalities from bonusing - providing direct or indirect financial assistance to commercial, industrial and manufacturing enterprises. Financial assistance might include, among other things, direct funding, less than market-value land transfers or guaranteeing borrowing.
One of the exceptions to the bonusing rule is the provision for financial assistance that may be provided through municipal capital facilities agreements.
As policy background, there is a link between this exception and a public good (a municipal facility for the community) beyond direct business assistance. Municipalities have used capital facilities agreements for the delivery of municipal facilities such as affordable housing, recreational facilities and for parking facilities.
Each of these examples could result in benefits for the BIAs in the affected areas:
- affordable housing and recreational facilities could be instrumental in bringing more residents and visitors to the area and potentially result in more customers for the businesses in the BIA
- parking facilities can provide a convenience to potential shoppers and thus make them more likely to consider shopping in the BIA.
A summary of examples of financial assistance that municipalities can consider providing under a municipal capital facilities agreement include:
- giving or lending money and charging interest
- giving, lending, leasing or selling property
- guaranteeing borrowing
- providing the services of employees of the municipality
- exempting all or part of land meeting certain conditions from all or part of the taxes levied for municipal purposes
- exempting development charges under certain circumstances
The assistance is limited to the municipal facility that is the subject of the Agreement.
As examples, assistance may be possible through agreements for the following kinds of facilities:
- facilities used by the council
- facilities used for general administration
- roads, highways and bridges
- local improvements and public utilities
- facilities related to the provision of telecommunications, transit and transportation systems
- facilities for water, sewers, sewage, drainage, and flood control
- facilities for the collection and management of waste and garbage
- facilities related to policing, fire-fighting and bylaw enforcement
- facilities for the protection, regulation and control of animals
- facilities related to the provision of social and health services
- facilities for public libraries
- parking facilities
- community centres
- facilities used for cultural, recreational or tourist purposes
- housing project facilities
For more information concerning the above topic, section 110 of the Municipal Act, 2001, sections 252 and 257 of the City of Toronto Act, 2006, and Ontario regulations 603/06 (Municipal and School Capital Facilities - Agreements and Tax Exemptions) and 598/06 (Municipal and School Capital Facilities - Agreements and Tax Exemptions) may be among the provisions of interest.
Links to other resources
Province of Ontario websites of interest to BIAs
Ministry of Municipal Affairs and Housing (MMAH) .
Information can be found on the Ministry website on the following topics:
- Municipal Readiness for Economic Development
- Property Assessment and Taxation System
- Community and Economic Development Resource
- BIA Handbook
- Community Improvement Plan Handbook
- Healthy Communities Handbook
- The Investment Readiness Test: A Self-Assessment Tool for Northern Communities
- Ontario Tourism and Marketing Partnership Corporation
Provincial grants of interest to BIAs
- Northern Ontario Heritage Fund
- Creative Communities Prosperity Fund
- Rural Economic Development Program
- Ontario Cultural Attractions Fund
- Ontario Trillium Foundation Community Grants
Business Improvement Area links in Ontario
- Ontario Business Improvement Areas Association
- Toronto Association of Business Improvement Areas
- City of Toronto Economic Development Office
- City of Toronto BIAs Webpage
FedDev Ontario Small Business Services
FedDev Ontario Small Business Services provides entrepreneurs with free access to information on federal and provincial business-related programs, services and regulations. Information is available for clients who want to start, sustain or grow a business. Specialized research can also be provided to support well-informed business decisions. FedDev Ontario is jointly managed by Industry Canada and the Ontario Ministry of Government Services. It offers over 1,200 business information documents that cover a broad range of topics including business planning, financing, marketing, and human resource management.
Ryerson University: Centre for the Study of Commercial Activity
This non-profit research unit based at Ryerson University studies private-sector economic activities that deal directly with consumers. Among these activities are retailing, various services, financial institutions, and the developers of malls and office infrastructure.
BIAs of British Columbia
Government of British Columbia BIA Webpage
Municipal Research and Services Center of Washington
City of Edmonton – Toolkit and Resources for Business Improvement Areas
City of Winnipeg Business Improvement Zones
City of Vancouver BIAs Webpage
International Downtown Association
Founded in 1954, the International Downtown Association has more than 650 member organizations worldwide. It is a world leader and champion for vital and livable urban centers. It has a network of committed individuals, a rich body of knowledge, and a unique capacity to nurture community-building partnerships.
Main Street America
The Main Street Approach™ is a community-driven, comprehensive strategy used to revitalize downtown and neighbourhood business districts throughout the United States.