Nanaimo’s economic development reform gains momentum

Nanaimo Mayor John Ruttan's new economic strategy took a big step forward Monday as council voted to proceed with the creating an Economic Development Corporation that would operate at arm's length from city hall.

Nanaimo Mayor John Ruttan’s new economic strategy took a big step forward Monday as council voted to proceed with the creating an Economic Development Corporation that would operate at arm’s length from city hall.

The corporation, which would manage economic development and tourism services, was recommended by the Nanaimo Economic Development Commission after the current model, established in the 1980s, was considered to be ineffective and detrimental to the city’s economic growth.

Ruttan spent the last year working on the new model with the intent of taking the cost of economic development off taxpayers and fueling it with investment and ideas such as a hotel tax, which could support the new model by providing as much as $400,000 annually.

“I think as this unfolds, we’re going to find something Nanaimo can be proud of and we’ll have strong economic development,” said Ruttan. “We’re not going to simply be looking at tourism, it’s an extremely important component, but we’re also going to be looking at bringing industry to town, we’re looking for investors and we’re trying to see the new economic development role as extremely important.”

One hitch in the plan is the anticipated expenses to initially fund the new model. While taxpayers already fund components of economic development like Tourism Nanaimo for $1.357 million annually, the new model is expected to cost $1.497 million.

Al Kenning, city manager, said the $140,000 gap cannot be bridged by taxpayers.

“There is no more money,” he said. “We’ll have to seek funding from other sources.”

Another issue is accountability of the corporation to the taxpayer, as it will be working without a council representative on the board of directors.

“A lot of these issues will be addressed by the [new] economic development officer in due course when we do that,” said Ruttan.

Hiring a new EDO is a priority for the commission.

To ensure adequate communication between the two bodies, a progress board will be established to assure council the corporation is working effectively and efficiently and in the taxpayers’ best interest. Funding will ultimately be controlled by council.

Ruttan added that as the model gets going, investment will ultimately reduce the financial burden on Nanaimo taxpayers, as it has in other B.C. cities that have adopted similar models.

The Nanaimo and District Chamber of Commerce said it is on board with Ruttan’s plan.

“One of the ways to increase money in this beautiful city is to try and make it more economically diverse and one of the ways to do that is to have a good vision and a good plan,” said Andrea Rosato-Taylor, president of the chamber. “When talking about community prosperity, first and foremost, it is the collective ability to create new wealth for its residents over a sustained period of time … It’s about changing conversations. There is only one way to do this, it has to be through economic development.”

Despite the immediate challenges of establishing a new economic development model, Ruttan said the city will benefit in the long run.

Arms-length economic organizations are a growing trend in B.C. and are being employed by cities like Chilliwack, Prince George and Kamloops.