What’s new in May?

The Chamber spent the first two weeks finishing up its two policy drafts for submission to the Canadian Chamber by the mid-month deadline. At the eleventh hour, we rewrote our long-in-the-making energy policy, as the PM introduced Ottawa’s anticipated Energy Strategy which takes Canada on an aggressive path to 2050.

While we were pleased to see positive movement on the energy front, many of the asks we had drafted – we began work last November – were included in the Strategy. That meant a full rewrite on the Victoria Day weekend. On a close read of the national strategy, we found that many of our recommendations, which dovetailed with the new national strategies, had to evolve into a full five-year transition plan to help businesses keep going while energy providers are moving in new directions.

Hence our rewrite.

The  development industry was where our Chamber began its energy research last November. At our member-driven Policy Development Forum, we heard developers report their industry was in “triage” – digging deeper, we found that FortisBC had told the industry that power couldn’t be assured for new projects until between 2027 and 2029.

We also heard that developers were having to bid for electricity – that new projects were reaching completion only to fail to get occupancy permits because there wasn’t sufficient power for new residents to use appliances, heat, light, garage door/parking lot openers.

The City of Kelowna was also at risk of failing to meet its provincial housing targets, which in turn are tied to federal housing formulae and funding.

On top of these issues, of course, lurked two of the two hungriest consumers of electric power: EV charging stations and new data processing centres as AI begins to bite, worldwide.

From the power providers’ points of view, these shortfalls have been on the horizon for awhile. Rapid population growth, long delays to take delivery of transformers and other specialized equipment – exacerbated by the rush to provide new technology – complicated an already complex process.

It had become increasingly clear that a national strategy on energy was not only timely, but long overdue. The issues didn’t vary much as we looked into the problem across the country. While the strain is most severe in remote regions, even in Ontario, equipment delays, and the industrial sector’s requirements for massive power loads, are producing new connections waits.

In Manitoba, the electricity supply is tight. Like an echo, Manitoba Hydro is telling new industrial customers they can’t be added to the grid until new power sources are developed: the wait is now out to 2029. Winter power shortages are expected in 2030. Gas burning plants would mitigate these shortages.

Like other parts of Canada, Manitoba is chasing the wind for new power projects, while simultaneously trying to curb demand in over 100,000 homes. Collaborating with Ontario and Saskatchewan to strengthen its electricity supply may provide some short-term, geographically limited relief.

In Atlantic Canada, the electrical system is also under strain. Regional demand is growing, as is the economy of Atlantic Canada. Already home to wind generation – heating, EVs and database centre needs mirror the demand curve seen elsewhere in the country.

When we began our research, we saw Canada was also showing vulnerability in recent climate events such as wildfires and floods in BC and Alberta, which damaged critical energy infrastructure, and directly impacted oil and gas production and transport.

The regulatory paralysis may be relieved with the new energy strategies, but a transition plan is still required while the new national strategies take hold. BC’s “thicket” of regulations, according to The Starfish Canada, continues to hold back growth and add to costs.

On top of growth, there is the normal aging and wear and tear on infrastructure. Many of the new federal recommendations – and the Kelowna Chamber’s own transitional recommendations – are aimed at dealing directly with the logistics and costs of the move away from fossil fuels and the chronic lack of investment in infrastructure.

Announcement of a wind farm in the hills above Kelowna was welcomed by the industry this month - the wind farm will provide enough electricity to power 147,000 homes and increase BC Hydro’s overall electric supply by two per cent. While plans and permitting are getting off to a fast start, the Nicola Wind Project won’t begin construction until 2029. It will provide a significant addition to renewable energy in BC, and together with the Buffalo Plains wind farm in Alberta, give western Canada a significant leg up in new clean energy.

Have you noticed we’re pretty excited here at the Chamber when we get to talking about energy?

We also talk a lot about housing costs. That means a new focus on development cost charges, which  many municipalities simply up year over year, to help pay the escalating costs of infrastructure.

That position is finally coming under a fair bit of scrutiny, as putting the costs on new development keeps increasing the unaffordability of housing. Some municipalities are freezing DCCs; some are actually cutting  them.

At its April 20 meeting, Kelowna City Council asked staff to look at reducing DCCs by 25% for two years. We’re expecting a positive reception of the report, possibly in early June, which would then go to the province for ministerial approval. Surrey, Vancouver, Port Moody have all cut their rates; and in Ontario, Toronto in particular has cut rates by 50% for three years, hand in hand with a matching infrastructure grant from the federal government ($8.8 billion) to ensure infrastructure spending doesn’t languish. All of which makes Kelowna’s cuts look modest. In Toronto, DCCs typically add $200,00 to a new home’s cost.

After that short detour into housing, we get back to our second new policy – the effect of crime on business – which took shape and re-shape over the winter months.

A bit of history: six years ago, the Kelowna Chamber submitted a new policy – provincially and nationally – which the review committees of the time tried to dismiss, telling us the issues the policy dealt with were “social” not “business-related”. We got strong support from multiple chambers in every section of BC: the Island, the lower mainland, central BC and the North. The policy received nearly unanimous votes in adoption: “Keeping BC communities and their economies safe in an era of drug addiction, mental health issues and homelessness.” That 2020 policy seems naive today as the problem sounded fixable.

Four years later, we submitted a second policy “Addressing the costs businesses face due to crime and the consequences of illicit drug decriminalization.” The provincial government called an end to the decrim experiment – but street crime and drug use continue to plague businesses, to a degree we didn’t imagine possible in 2020.

This year, our second policy has strong support in BC, and from chambers in Alberta, Manitoba and Ontario who have come onboard prior to the policy conference this fall with their own crime-effects-on-business stories, which don’t change much across the country.

The new policy is called “What Price Safety? The Cost of Crime on Canadian Small Business”. Its recommendations are clear: leading the list is a proposal for federal tax relief, modeled on the Northern Residents Deductions, asking the CRA to declare tax relief zones where businesses operate in a 24/7 crime environment. The costs of security, damage repair, staff and customer loss, are all to be taken into account.

We’ll see what the reviewers at the Canadian Chamber think of this, and our other recommendations.

Both policies can be read in their draft form at https://www.kelownachamber.org/news-policies/advocacy-policy/ under New National Policies 2026.

If you’ve read this far, thanks; you’re a bit of a policy wonk. Around here, that’s a good thing!

May Round-up:

  • The What Price Safety policy will be front and centre for OBAC in June (Okanagan Business Advocacy Council)
  • Federal communication around permanent residency may have given temporary workers ‘false hope’
  • Canadian Steel Producers Association talks about “a glut of steel in the world” as capacity grows and dumping doesn’t abate – all hurting Canadian industry
  • Canada’s “made in Canada” tariff issues don’t get better: interprovincial trade could abate tariff bite, but the patchwork of provincial regulations  continues to constrain Canada’s economy
  • National Food Security Strategy declared “a priority” by Prime Minister; Chambers weighing in on what is needed (we have a seat on the national chamber Agri-Food committee)
  • North Central Local Government Association asks for additional crown counsel to clear courts logjam
  • Kelowna Chamber asked to support allowing 50% tax deduction for golf green fees, cart rentals
  • Kelowna Chamber to petition provincial government to remove penalties on the vintage replacement program and return program to its published intent: survival relief, to keep viable businesses operating and extend original program to March 31, 2030. The relief program’s original intent of sustaining local employment, sustaining tourism activity and maintaining economic stability is unchanged. We don’t welcome seeing “tax creep” devour a useful and timely economic bootstrap to the Okanagan industry.

Finally, we welcome the new President & CEO of Tourism Kelowna, Cassandra Zerebeski, to her new desk, and look forward to working with the TK team under her leadership on tourism-related policies for our region.