Economy

Utility, Tax Rates Push Stoney Creek Ice Cream to Montreal

By Jason Leach
Published May 19, 2010

Today's Spectator reports that Stoney Creek Dairy is selling its ice cream business to a Montreal dairy company:

[Councillor Brad] Clark and Hamilton economic development director Neil Everson said the loss of the ice cream plant followed a lengthy effort they made to find it a new home in the city's Glanbrook North Industrial Park.

[...]

"We did everything we could to move him to Glanbrook, but in the end it didn't work out," Clark said. "It all fell apart."

So a brand-spanking new highway leading to gobs of "shovel ready" greenfield land still wasn't enough to retain a business that wanted to stay here?

Among the issues said to have scuttled the deal were the cost of electricity, water and sewage rates and taxes.

Am I reading this properly? Years of unchecked, cheap sprawl, leading to higher debt loads and higher residential taxes along with more strain on our infrastructure - now requiring massive upgrades to prevent the city from becoming one massive floodbowl every time it rains heavily - is driving business out of town.

Who knew?

Jason Leach was born and raised in the Hammer and currently lives downtown with his wife and children. You can follow him on twitter.

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By Robert D (anonymous) | Posted May 19, 2010 at 17:41:49

I don't get it either. Not much we can do about electricity costs other than blame the provincial government (our local utility has decreased their transmission charges several times in the past few years).

As for water/sewage rates, Hamilton does have a substantial rate for these services, mainly because they need to build that expensive wastewater treatment facility.

Lastly, taxes, I assume they mean municipal, but they might mean provincial as well. I'm not certain how the Quebec and Ontario manufacturing incentives compare. As for Hamilton I can't recall hearing that our industrial tax rate is substantially higher than anywhere else. Our residential tax rate is high of course.

Maybe we should have offered them a tax holiday?

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By Dave Kuruc (anonymous) | Posted May 20, 2010 at 07:48:00

Where was EcDec on this one? We may get a few new jobs here and there - but we continue to lose them too. It's a shame that long time local companies are leaving town.

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By Robert D (anonymous) | Posted May 20, 2010 at 11:39:31

The article in the spec clarifies that the differences are largely in provincial rates, but does not the tax rate in Hamilton for industries is 11% higher than the surrounding area (they didn't cite a source for this statistic.).

It seems that quebec is content to subsidize electricity and water costs for large manufacturers in exchange for jobs.

We're unlikely to get the same concession out of the Ontario government. The appropriate action, if any, would seem to be to pressure the Quebec government to charge a fair amount for water and electricity - a value that reflects their importance as natural resources to Canada, to discourage waste and inefficiency by manufacturers located in their province.

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By Capitalist (anonymous) | Posted May 20, 2010 at 13:36:52

You can thank the Green Energy Act for helping to drive up hydro rates. This will get worse and will make our manufacturing industries less competitive.

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By TaxationWithout Reprewsentation (anonymous) | Posted May 22, 2010 at 08:44:56

Neil Everson is a dud. And the old city of Hamilton's gluttonous ways are driving business out of the community...Jason, wake up and smell the rot.

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By BobInnes (registered) - website | Posted May 22, 2010 at 21:26:04

Sad. Many moving parts to analyze but taxes & utilities are a good place to start because of their baseline quality. What if Hamilton tax rates were 11% lower not higher? Thanks Robert D for doing that homework for us but ending on a green note, even justifiably, seems a bit dangerous as Capitalist notes.

Other than the tax lesson, which Hamilton has not learned in many decades, I wonder if one lesson here is to be gleaned from Quebec taxpayers, which I understand to be taxed more than anyone else in Canada. Does this not illustrate something about relative (in)elasticity of voters/taxpayers? How many are up and leaving? Can one conclude that just as Hamilton smugness comes from steel which comes from deep water harbour which enabled chronic overtaxation mentality, Quebec's taxpayers seem somewhat captive (inelastic) because of they can't easily walk away from their culture? Is that over the top?

On a brighter note, perhaps this deal will fall apart at $200 oil or interest rates double from here. Still, that's no excuse for our lazy closed-minded politicians who must be turfed out and replaced with folks who understand what's a happenin' and are prepared to deal with it. Most don't get it so, dear reader, please look in the mirror or your phone list and see if you see a worthy person. Right now I've got nobody to vote for.

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By Balance (anonymous) | Posted May 24, 2010 at 00:24:07

Everson is not a dud, I know he understands and has been a champion for business in Hamilton for a decade!

The Green Energy Act is a joke, 13.5 cents per KW for wind and 81 cents per KW for solar...........how many jobs is this going to kill?

Anyways,I'm sure Everson did everything he could, let's face it, Hamilton is overtaxed with respect to industrial development, then add on the utility charges.

Jason, we know you have a beef with anything to do with the Red Hill Parkway so your comments are taken as such. Do you think a dairy would locate beside U.S. Steel? Canada Bread is coming and they love the Red Hill so give it a rest. Keep an open mind.

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By Kiely (registered) | Posted May 26, 2010 at 13:27:57

The Green Energy Act is a joke, 13.5 cents per KW for wind and 81 cents per KW for solar...........how many jobs is this going to kill? - Balance

Investing in new technologies and innovation is a must. If you want to complain, complain about the billions handed out to out-dated business practices and the status quo.

Throughout history economic development has come from two main sources: war and innovation... and it is pretty clear that war no longer works.

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