Ottawa should offer developers tax breaks to revitalize airport area, city committee says

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

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The City of Ottawa should provide tax breaks to businesses developing around the Ottawa International Airport to aid recovery from the devastating impact of the pandemic on air traffic and boost the local economy, the Committee on Finance and Economic Development says from the city.

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

Tenants who rent land from the airport authority in that area are eligible for the tax benefit if they: developed or redeveloped sites with projects that increased the estimated value of the property by at least $250,000. Entrepreneurs could qualify for an allowance that lowers their assessment on the municipal tax.

For example, a new project that increased real estate appraisals by $10 million would qualify for a $4.25 million grant over a 25-year period. The maximum cumulative grant for each project would be $25 million.

If all the land were developed, the airport could receive more than $10 million in rent, which can be reinvested in activities that can help increase passenger volume and increase direct flights to and from Ottawa, councilors heard during the committee meeting on Tuesday.

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According to a staff presentation, the pandemic had a devastating impact on the airport. Passenger numbers dropped 77 percent in two years – from 5.1 passengers in 2019 to just 1.2 million passengers in 2021.

The number of direct flights offered at the airport has also fallen and international flights have been diverted to other cities due to pandemic restrictions.

Increasing the number of direct flights and helping the airport recover is essential to attract new businesses and boost tourism and the economy, according to delegations from Invest Ottawa and Ottawa Tourism.

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

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

Several councilors were skeptical, saying they needed more evidence that the tax break would encourage a development that would fall through anyway.

count. Jeff Leiper said he was reluctant to hand in tax receipts. He wondered if a city tax break would be a deciding factor for a company considering development around the airport.

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

The city council makes the final decision.

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