News that Sidney council has approved the downtown BIA (Business Improvement Area) raises a concern.
The BIA includes most of the downtown businesses, who propose to impose a special tax on its members to raise one million dollars over four years. They want to create a pool of money to be used to stimulate business in Sidney. They hope to bring more people into town by events like Family Day and promoting tourist attractions like the Ocean Discovery Centre.
The BIA will be taking one million dollars out of the economy of Sidney and there is no assurance that it will be returned.
When taxes are imposed on the downtown properties, the property owners do not pay them, instead they pass them on to the merchants. In turn, the merchants recoup the costs of the taxes by raising their prices, so in the end it is the citizens of Sidney, who patronize Sidney merchants, that get to pay the million dollar tariff.
February saw the departure of two more merchants. I do not understand why it is more important to have a BIA raising taxes to attract more merchants, than to have someone trying to keep the ones we have.
Both theoretical and practical economics state if you want to increase economic activity, you have to reduce the costs of doing business. If we want to encourage businesses to set up in Sidney, rather than Keating X Road or Brentwood Bay, we have to make it cheaper to do business here and tax rates are the sign people look for. It does not appear the BIA is on that track.