Ottawa should offer developers tax breaks to help revive area around airport, says city committee

It recommended a proposal to make about 100 hectares of land around the airport part of a “community improvement plan.”

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The City of Ottawa should give tax breaks to businesses that develop around the Ottawa International Airport to help recovery following the devastating impact of the pandemic on air travel and to boost the local economy, says the city’s finance and economic development committee.

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It recommended a proposal to make about 100 hectares of land around the airport part of a “community improvement plan.”

Tenants who rent land from the airport authority in that area would be eligible for the tax break if they developed or redeveloped sites with projects that increased the assessed property value by at least $250,000. Businesses would be eligible for a grant that would lower their municipal tax bill.

For example, a new project that increased property assessment by $10 million would be eligible for a grant of $4.25 million over 25 years. The maximum cumulative grant for any project would be $25 million.

If all the land was developed, the airport could receive more than $10 million in rent, which could be reinvested in operations that might help increase passenger volumes and increase the number of direct flights in and out of Ottawa, councillors heard at the committee meeting on Tuesday.

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The pandemic had a devastating impact on the airport, according to a staff presentation. The number of passengers dropped by 77 per cent over two years — from 5.1 passengers in 2019 to only 1.2 million passengers in 2021.

The number of direct flights offered at the airport has also dropped and international flights were diverted to other cities because of pandemic restrictions.

Increasing the number of direct flights and helping the airport recover is key to attracting new businesses and boosting tourism and the economy, said delegations from Invest Ottawa and Ottawa Tourism.

The airport industry is highly competitive, and other cities and regions offer incentives to boost development, said Mark Laroche, president and CEO of the Ottawa International Airport Authority.

The tax break would help Ottawa attract more development, more quickly, he said.

Several councillors were skeptical, saying they needed more evidence that the tax break would spur development that would not go ahead anyway.

Coun. Jeff Leiper said he was reluctant to forgo city tax revenue. He wondered if a city tax break would be a deciding factor for a business considering development around the airport.

Laroche said he was convinced the tax break would have an impact.

City council will make the final decision.

jmiller@postmedia.com

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