By Chris Jones/The Oshawa Express
A projection has been released showing the Downtown Oshawa Business Improvement Area’s (BIA) tax levy could cost business owners 75 to 500 per cent more this year.
Louise Parkes, a local business owner and former member of the BIA, tells The Oshawa Express that BIA members could be seeing an increase of more than $40,000 this year.
Speaking to The Oshawa Express, the former city councillor is concerned businesses will not be able to afford the increase, especially during the COVID-19 pandemic.
“In one year, there’s no way you can even budget for such an increase,” she says.
She says the BIA used to run on a budget of $143,000 and was volunteer run. However, this year city council approved an increase to the budget from $251,000 in 2019 to $649,000 in 2020.
She explains the BIA levy is an added tax on top of property taxes for a select group of businesses in the downtown area.
Parkes is now calling on city council to restore the BIA’s budget to 2019 numbers to help businesses remain open. She has also asked for the BIA to end all spending for now as most events have been cancelled.
“Not only do you have to pay the commercial taxes – which are already high in Oshawa – you’ve also got to pay just under $50,000 to the BIA,” she says.
After Oshawa city council received a number of complaints regarding the increase, members voted to forward these communications to the BIA board.
The debate between councillors occurred when Ward 4 City Councillor Derek Giberson put forward a motion to review the impact of COVID-19 on the 2020 BIA budget.
“My main concern is that there is a process for this organization to manage the issues that they have within their organization, within their stakeholder body, and it seems to me that some of that was skipped over,” he said.
He wanted to caution against council setting a precedent for external agencies, such as the BIA, to “jump around” regular processes already in place and interfere with the organization’s decision making ability.
While many believe the BIA spends the majority of its funds on events, which are now cancelled this year, Giberson refuted that idea.
He explained the BIA spends much of its funding on communication with the public, and various other expenses outside of events.
He also noted the BIA is set to lose income as well.
“With the cancellation of the events, they lose all of the sponsorship dollars, and all of the advertising dollars that come with those events,” he said.
He also pointed out it’s not as though the BIA can simply “snap their fingers” and change back to 2019 numbers.
While the BIA will be consulting its members on the matter, Giberson stated it isn’t council’s place to use a “heavy hammer” on external agencies.
However, Ward 3 City Councillor Bradley Marks agreed with the motion, stating it puts the onus back on the BIA to reconsider its tax levy.
Ward 5’s Brian Nicholson and John Gray both believe the budget and the tax levy is too high.
Nicholson noted there were concerns when the increase to the BIA budget was approved in February and said the public response to the budget reinforced these concerns. He also pointed out this is an issue which began before COVID-19.
“This is not a COVID-19 problem, and the motion seems to indicate that the problems that are occurring with the BIA are a result of COVID-19,” he said.
Gray also agreed, stating there is no need for the budget to be that high, and expressed concern over those who state council could be meddling.
“To say that council’s meddling in it, well if you’ve noticed, council had to approve the budget,” he said.
He believes it’s time for council to say “enough is enough,” and COVID-19 is being used as an excuse.
“The fact that we’re going to have a lot of businesses that are hurting… this is just going to be the icing on the cake for them,” he said.
Ultimately Giberson’s motion was defeated, and after some back and forth between council and staff, the decision was made to pass the communications on to the BIA.