Reshaping Victoria’s Economy for a Sustainable Planet

May 24, 2010
in Category: Articles, BC Politics, Economics, Environment
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An expert panel discusses how our municipal government could help build a more economically vital and ecologically resilient community

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There have long been gaps between the vision most of us have for a socially responsible, environmentally “green” Victoria, and the high-priced, unbridled growth towards which the dominant economic forces in this region steer us. This gap was identified in city staff’s own analysis of Victoria’s Official Community Plan (OCP), and grows wider daily through disagreements over everything from new condominium high-rises to mega-yacht marinas.

In sustainable governing parlance, such gaps can ideally be bridged by making all development decisions with equal consideration for economic, social and environmental impacts, or “triple bottom line” accounting. Unfortunately, in its current OCP consultation process covering issues like urban design, energy and emissions, local food sustainability, and economic development, the City inscrutably failed to request that its economic discussion paper provide any triple bottom line analyses (see “Visioning Our Future or Our Pipe Dream?” in May’s Focus). Yet, obviously, economic decisions frequently drive bulldozers right through the most beautiful of our food sustainability and urban design dreams.

So Focus and Transition Victoria recently brought together an expert panel to brainstorm how the municipal government could help transform Victoria’s economy and economic decisions to be more in line with the social and environmental values which our citizens have overwhelmingly given voice to over the years.

The task, of course, is not easy, and that’s one reason the gap has long gone without being bridged. We cannot, without extreme measures, pull our city out of the global capitalist economy, even if we collectively wanted to. So a gargantuan machinery of international finance, federal interest rates, and provincial tax policy comes bearing down upon us every day with its own values and priorities, capable of crushing the plans of even the flushest of governments with the greenest of aspirations. One collapse in the Wall Street derivatives market, and governments from Africa to the E.U. stagger and struggle to even survive.

So what can a small municipality with relatively meager resources actually do? What tools, if any, do our elected local representatives have to help sustain the city most of us say we want, with well-paid jobs, pollution reductions, environmentally-friendly infrastructures, affordable housing, protected greenspace, character neighbourhoods, and healthy, locally-grown food?

The panel participants:

Sasha Angus is the Economic Development Officer for the Greater Victoria Development Agency.

Bruce Carter is the CEO of the Greater Victoria Chamber of Commerce.

Nicole Chaland is the Program Director for SFU’s Certificate for Community Economic Development, and advisor to the BC Co-operative Association.

Deborah Curran is a municipal law specialist, co-founded Smart Growth BC, and currently sits on Victoria’s Official Community Plan Citizen Advisory Committee.

Rod Dobell is an economist who works with UVic’s Centre for Co-operative and Community-based Economy.

Donna Morton is an economist and director of the Centre for Integral Economics.

I facilitated, and I’d deliberately chosen the panelists for their diverse backgrounds. There are many agendas from political left to right for changing local economies out there, but few gain traction because they only inspire small sectors of the population. I’d hoped we’d find some ideas which might appeal to Victorians from divergent political perspectives.

My first surprise was that everyone seemed to share a basic respect for “sustainability”, economic “resilience”, and “green” values. No one was shouting that the only thing that mattered was profit. This, itself, seemed extremely important. It was utterly unlike many cities where, say, the Chamber of Commerce and environmentalists are almost always completely at odds. As the dialogue became more detailed, of course, it became clear that the real differences between the panelists were rooted in differing degrees of dedication to specific, underlying principles of environmental sustainability. But at least we had a starting point.

We also agreed fairly quickly on several tools for economic change which a municipality could influence and were worth exploring: business development, political co-ordination, and taxation strategies.

Help Knowledge-based Businesses

When it came to business development, there was fair consensus in the group that Victoria should try to increase and strengthen its high-wage, knowledge-based sector. “Knowledge-based” was defined as a type of business activity that’s “human knowledge intensive” rather than land, capital or materials intensive. So education, software development and research were things we could do well in Victoria; agriculture or automobile construction, not so much.

One of the major appeals of this sector was its flexibility and resilience, even in times of economic or ecological crises—one of the hallmarks of sustainability. Carter pointed out that it was easy for people with expert knowledge to transfer from one job or part of the sector to another when need be, doing research, then teaching, then doing policy development, then consulting etc.

And for most in the group, their interest was knowledge-based businesses that were specifically involved in renewable energy, clean technologies or sustainable development. “If you look at the trends all around the globe, as other sectors went crazy rollercoaster riding through economic turbulence, renewable energy, for example, as a sector, really stayed strong and solid,” said Morton.

Angus summarized the vision forming: “I’d like to see us be a top-ten global centre for clean technology in resource development, and top five for environmental slash sustainable consulting. It’s not only the right thing to do; it’s fantastic business. The industry globally is twice as big as the aerospace and automobile sectors combined. And even given these economic times, it’s been growing at twenty percent plus.”

But without millions to invest in economic stimulus packages, what could our municipal government do? The discussion soon turned to one of the primary methods municipal governments have to encourage or discourage certain types of business activities: managing the use of spaces and buildings through zoning bylaws, fees, and other tools.

(Note: Many comments have been edited for length.)

Curran: We need to continue to have a fairly nuanced understanding of the kind of space needed by these industries. Ninety percent of the businesses in Greater Victoria employ about five people or less. Mosaic [on Fort Street] is a great example of re-purposing of a commercial building into residential-based mixed use; you can still [legally] have an office space in those units. The second thing is that, the way a knowledge-based economy works, we need to continue to improve on the number of organic, messy interactions that occur each day at street level and in our buildings, where you have people from different firms interacting, creating synergies. [How does the City help] create those kinds of interactions and cross-pollination? I think one way is free [public] Wi-Fi. The second is allowing way more on-street vendors. The number of conversations I’ve had at the wieny dog outside Capital Iron outstretch any civic engagement I’ve done in the last five years.

Morton: In the building the Zeidler family has reconstituted in Toronto [Urbanspace Property Group’s Robertson Building], there are warehouses that have been fundamentally overhauled to do exactly that. There are artists and knowledge workers and web designers and… It’s become a hub. They’ve built a phenomenal internal economy. In addition to all the innovation that happened, they sell things to each other; there’s this massive kind of stimulus that happens even within the building, and then it ripples out throughout the city.

Carter: I’ve also had some tremendous interactions in Hollywood Park where kids play baseball. When you look at a small community like we have, we need to recognize that those areas are just as important as street vendors downtown.

Chaland: The [municipal OCP] policy, then, would be applying a triple bottom line lens to public spaces, and to maximize the social, economic and ecological benefits that accrue out of every building, office space, neighbourhood association, park, every road, and even parking spot.

Angus: So in a very black-and-white scenario, if we were to come up with 25,000 square feet in the City of Victoria, which is nearly impossible, would [the City encourage] a call centre in there, or a clean tech knowledge centre where they’re employing people at $80,000 a year, versus less than the living wage?

Morton: And there’s an overstock of city parking lots that I’d argue you could have any day of the week, if they were taxed appropriately, to do exactly what you’re talking about. Because they’re paying nothing in taxation. They’re paying fifteen grand for those massive parking lots here. But the kind of thing you’re talking about would probably generate half a million to a million dollars in taxation revenue. And we can incentivize knowledge workers to come to Victoria through taxation, if we structure the business fees and licences differently than we do currently. Parking lots are asinine. With our housing issues, it’s ludicrous. Your incubator [for clean tech entrepreneurs] is there, the housing you want for workers is there, and affordable housing for everybody living on the street in Victoria is right there. At the drop of a pen. It’s easy.

The conversation then swung entirely towards affordable housing; interestingly, everyone regarded it as a crucial component of the business development strategy.

“If we don’t take care of the affordability of housing, new businesses will not want to move here,” Curran stated emphatically. She suggested some possible options. One could be collecting a levy from properties or new businesses that would then be directed towards creating affordable housing. Another could be allowing developers to build more units and surpass zoning limits, in return for their including new affordable units. “Whichever way we decide to do it in Victoria, we need to simply do it.”

Carter also recognized the seriousness of the issue, but suggested it was more important, and less penalizing to developers or taxpayers, to build our economy to increase the average wage in Victoria, so people could afford housing at market rates.

Chaland countered that, “The private market isn’t providing housing at a cost that citizens can afford, so that’s where government has a leadership role.” She then provided intriguing examples of city governments requiring developers to create a specified percentage of affordable units in all new buildings. Even though the developers “fought and screamed” when the rules were brought in, said Chaland, afterwards, developers were thrilled to see how the clear rules saved them time, effort and money by dramatically reducing the amount of public and government consultation they had to go through.

The group couldn’t quickly reach consensus on how best to execute the affordable housing component of the business strategy. And Morton’s emphasis to me that, “I would like you to record that density is good,” reflected everyone’s acute awareness that there’s still widespread public resistance throughout Victoria to building even a few extra stories upwards, affordable or not, and no matter who’s paying for it.

But I wondered, would we be more open to increased density, if we knew it was part of a comprehensive city-wide sustainable economic development strategy? That led to the heart of the political problem: the lack of a comprehensive sustainable economic development strategy.

Let’s Build a Strategy

The group generally felt one of the simplest and easiest ways to begin improving sustainable economic development here would be for the municipality to invest more energy and resources into a centralized approach. Though the City of Victoria does proclaim it’s “committed to a triple bottom line approach to decision making”, and has created a “Department of Sustainability”, no one felt the commitment was sufficiently vigorous, particularly in relation to economic decisions.

The first problem, Angus explained, is that the City isn’t investing much in any economic strategizing of any kind.

“We spend right now about twenty-eight cents per resident in the CRD on economic development. An average jurisdiction should spend probably around five dollars.” Amongst other problems, Angus added, this dearth of funding has left us without regularly updated, research-based knowledge about our local economy’s strengths and weaknesses to guide government decision-making or help attract new businesses, sustainable or otherwise. “If the [City] could facilitate that on an ongoing basis, I think that would be tremendous.”

Angus also suggested that every new city bylaw or regulatory initiative should involve a triple bottom line analysis. “There’s an old saying, what gets measured, gets managed.”

Chaland added that the Province of Manitoba had enacted legislation to enforce the viewing of all community economic development decisions through exactly this kind of “lens”. “Every staff person at every level, whatever program, has to articulate, ‘This is the social impact, this is the economic impact, and this is the environmental impact.'”

Obviously, though, there are reasons for the limited follow-through from the City of Victoria. How much does it cost in time, effort and money to do these kinds of analyses constantly, or make the changes to decisions that might result? Meanwhile, many people and businesses lacking social or environmental values put pressure on government virtually daily.

So then our group decided to address the problem of developing Victoria’s economy in more sustainable ways from a different direction: We asked, how could our municipal government support citizens and businesses in incorporating sustainability values into their own daily, economically-related decisions?

Change Taxation to Encourage Green Choices, Green Businesses

Morton kickstarted us with an impassioned speech about the immense influence of municipal taxes, licences and fees on city development.

“The key driver is taxes. It’s the big lever,” said Morton. “There’s a huge chasm between this greatest power any government has, and this space where citizens are completely disempowered. [People are] either rabidly interested or completely disinterested. The people who understand the power of taxation are rabidly interested. The rest of the citizenry is just left in the cold, because they don’t really understand how [taxes] work. So economic literacy matters. Empowering citizens to understand the DNA of economics, including taxation and subsidization, is foundationally important.” She pointed again, by way of example, to how heavily Victoria subsidizes parking lots, of all things, by desperately under-taxing them—something most people are oblivious to.

Soon, we were exploring taxation strategies that could help educate people about municipal finances, encourage, prod, push or harness public and business spending in the green economy, and get sustainability to “pay its own way”. And both the group’s areas of agreement, and disagreement, provided some interesting possibilities.

Curran: There are a variety of mechanisms through which we can “daylight” the city’s budget and increase our economic literacy in a colourful and fun way, that are web interactive. So for example, if I pulled up my utility bill, on the website I’d know exactly where my fifty dollars in garbage taxes went. X dollars went to salaries, that kind of thing. The second idea is to nuance in a more specific way how we pay fees for things like collection of garbage. If you’re going to fill up your garbage can, then you pay fifty dollars every two months; if you don’t fill up your garbage can, then you pay somewhat less, and you have the option of putting that [saved money] into recycling your soft plastics. You can do that for water as well: We all get a base minimum at a cheap rate, and then if you’re going to water your lawn it goes up from there.

Morton: We built a bunch of software tools for the City of Winnipeg that allowed people to go in and say I live here, I drive this, this is my commute, this is the size of my house, this is how much energy I use. And by making a few decisions differently, they could alter their tax bill. And people were into it. It was a really sexy thing that people wanted to play with.

Wipond: Would we consider raising taxes to achieve specific goals of sustainability?

Carter: The level of taxation is important. Our mill rate is among the higher of the provinces. Our mill rate right now for residential in Victoria is about 13 and for Vancouver it’s about 10. I personally think it actually needs to be reduced overall. I am in favour of tax shifting and consumption taxes, I think they’re great. The challenge that I see [with raising taxes to achieve specific goals] is that over a period of time it actually becomes part of the fixed infrastructure process. The municipality becomes dependent upon it. All the parking revenue was supposed to go to improve parking in Victoria when it was originally created a long time ago. It’s an essential part of the city’s budget now.

Morton: For some of us, it’s about a nuanced, more sophisticated use of tax policy. Not bluntly looking at all taxes as bad. Even have voluntary taxes, for things like compost toilets. The old barrier was, ‘The municipality cannot afford to monitor [the safety of your compost toilet].’ So instead, you voluntarily pay for that monitoring. There’s this massive amount of green technology out there that we’re really not implementing because municipalities can’t get their head around how to administer it. There are engineers that are terrified.

Curran: I think if you were to delve down into Dockside Green [in Victoria] you would see a huge amount of that regulatory innovation going on. But it’s on a larger scale that hasn’t necessarily been replicated at the household level.

Morton: Big things are allowed to innovate because they can be administered differently. [For household compost toilets], the municipal costs are $1,200 a year to monitor you, and to do ground, water and floral testing. So you’d pay $3,600 and, after three years, if everything’s good, you’d get a permit.

Dobell: With all the folks in a neighbourhood association, we could bring it down to twenty bucks a person.

Carter: I see that as an administrative nightmare in a public system where overhead kills us.

Morton: But this is a cost-recovery system. This lets all the wacky dreamers pay for it themselves. Why don’t you like this? This comes from the “don’t raise taxes” [line of thinking].

Carter: My point is, the system, the public administration, gathers overhead. So next thing you know, there’s a supervisor who actually isn’t inspecting compost toilets, they’re supervising the people that are [and costs go up]. And I look at the guy who operated the thirty-seat restaurant that was actually a six-seat takeaway, and it took the City about four years to finally shut him down—in a place where it was really unsafe, and it was the wrong structure. Now we’re going to say a guy’s going to have to take out a toilet? Four years later and how many lawyers…

Chaland: I’m sorry, but what you’ve just said is the law of mediocrity. I mean, all of these bylaws and building codes have been created to protect us, right? To keep us safe. They haven’t been built on what is the very best thing we could accomplish. And there needs to be room for both. I don’t know how you can argue with true cost accounting.

Carter: Do I think that the building code should be updated to allow composting toilets? Absolutely. But that’s not what we’re talking about.

Chaland: This is a way to get us there.

Carter: I’m not in favour of breaking the building code just because somebody wants to pay. I think the liabilities are too great, the costs are too great, you can’t get cost recovery.

Dobell: Couldn’t you do it along the lines of what we’ve done with septic fields? It used to be you had to have those inspected by the health authority, and now the whole business has been turned over to private contractors who’ve become certified.

Morton: This framework would be designed to piggyback on that.

Carter: The difference here is proven technologies versus experimental.

Morton: There are [Canadian Standards Association] CSA-approved compost toilets.

Carter: In which case I’m good with that.

I liked the ideas for stimulating the green economy by allowing people to save on taxes through going greener, and to voluntarily pay taxes for new, greener services. Yet I couldn’t help laughing at Carter’s biting observations about bureaucracies, which seemed all too recognizable.

The group managed to come to a provisional consensus that at least trying voluntary taxes and website-based “participatory budgeting” would be worthwhile. The evident conflict area, though, seemed important, too. It made me suspect that the degree of trust or distrust people already have in government would likely determine the degree to which the general public would support any innovative tax proposals. (Even I, for example, was secretly having anxious visions of everyone soon being charged complicated, variable fees for every single public service they might want…)

Some larger-scale proposals for guiding personal, professional and business economic decisions in sustainable directions were also floated. Morton pointed out that the City could boost renewable energy use and encourage the local green design and energy sectors simultaneously by, for example, requiring large buildings to supply some of their own energy through solar, geothermal, wind or other renewable sources.

“There are countless incentivization and anti-incentivization programs for renewable energy, but we do very little at the local level, and we could do a lot more,” said Morton. “The City of Victoria tomorrow could say we’re going to site-generate twenty percent of all of the energy used by buildings in this city. Tomorrow. They could just do that.”

Curran suggested the municipality find a way to raise and contribute money towards a regional fund to help our agricultural economy and food sustainability. “We should be purchasing farmland and turning it over to 99-year leases, because there’s no new farmer who can afford to purchase farmland,” she said. “Or use [a levy] for an agricultural development fund which would become a kind of ag-industry hub for the region.”

But Where is the City Actually Going?

Evidently, there’s no dearth of feasible ideas for developing more sustainable economic decision making in Victoria, even without seceding from Canada and transforming the island into a giant commune (which might be my own preference).

And even though we couldn’t hammer out consensus on every issue in merely three hours, it seemed encouraging that this diverse group still forged a lot of common ground in support of specific, triple bottom line policies for taxation, business development, government decision making, and even preparations for global financial or ecological disaster.

From this perspective, though, unfortunately, our municipal government is failing. The City’s capital and strategic business planners have long operated outside concern for social and environmental values—as they’ve admitted. The elected leadership has shown disinterest in soliciting for Victoria’s OCP the kind of visionary and detailed economic feedback our forum only began to explore. And if the City and business community are positioning the Greater Victoria Development Agency to be our lead economic development organization, as they seem to be doing, then we have to ask, when will the GVDA bring some people with broader economic, social and environmental expertise onto its board, instead of just people with business expertise?

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Originally published in Focus, June 2010. To provide input into Victoria’s OCP, go to www.shapeyourfuturevictoria.ca before June 6. The City hosts an OCP forum on June 25 and 26 at Crystal Garden.

Rob Wipond

Thank you for reading.

View my other posts

2 comments

  1. John R Bell

    i had so much fun trying to figure out who the left wing economists were. Did these left wing economists have a distinctively different economics they could draw on? It did not seem so. With this group –and especially with Carter, one of the boosters of the mega yacht marina, we will move at a snail’s pace re confronting peak oil and climate change. Suggest you strike another group, Rob or, better still, get that commune–as in the Paris Commune- off the ground.

  2. Rob Wipond

    Thanks for your thoughts, John. I’m not sure what you mean by ‘different economics’… But I certainly got the feeling that some members of the group may have come to the meeting already with the intent of proposing some ideas they thought would fly with the whole group… That, and the tight time constraints (3 hours) likely pushed us all somewhere towards ‘the middle’…

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