The Penticton Economic Investment Zone (EIZ) program is frequently discussed in the newspaper and letters to the editor.
Supporters promote that it creates economic growth and a major criticism is the cost due to lost taxes and fees.
The EIZ program has now been in existence for six years. Although it is defended by city council, there has not been a report to inform us of its success. Just prior to the 2014 election, the city reported that the EIZ generated $30 million in building permit activity and it was observed these projects were imitated as a result of the EIZ program.
In the latest annual report for the city, the economic development office reported its success is measured by the growth of Penticton businesses, by tracking business licences and year-over-year business retention. Unfortunately no information was provided in the report to indicate if these factors were positive or negative for Penticton and no information on EIZ.
Since the EIZ program is intended to stimulate economic growth, a logical measurement of success is to review the value of commercial building permits in Penticton both before and after the EIZ was started in 2010.
This information is available from the B.C. government. For the six years, 2010 to 2015, Penticton reported commercial building permits were valued at $79 million dollars.
During an equal six-year period 2004 to 2009 $132 million of commercial building permits were reported. This reduction represents a 40 per cent decline in the value of Penticton commercial building permits.
A comparison to the three Okanagan regional district areas and municipalities shows they had a decline from $993 million to $644 million or 35 per cent during the same period. The city reported in 2014 that $30 million was approved due to the EIZ program and some additional amount has been added since then. Even though some of the EIZ projects are industrial and residential, it is hard to believe the EIZ program should be credited with success when commercial permits are down and our level of reduction is worse than the average of the rest of the Okanagan.
Penticton has had the EIZ program for six years plus Penticton’s business property tax calculation is at the lowest level in B C. If these programs did stimulate economic growth it should have been evident before now.
Do these programs continue because they are bold or because they are meeting the goals established? Spending our way to economic success is folly.