No business tax, free industrial land have helped small city weather economic storms

April 2009
Western Investor
Written by: Geoff Kirbyson

Portage la Prairie is living proof that a tax cut doesn’t have to be part of a bailout package to have a significant impact.

The south central Manitoba city of 13,000, founded in 1907, has been a trailblazer in the province in terms of waiving business taxes, and that strategy has played a big role in its ability to weather the current economic storm.

“This isn’t by accidents,” said Dean Yaremchuk, Portage’s director of economic and community development.  “Over the last five to seven years, our city councils have been long term planners.  They’ve been fairly aggressive in their economic development strategy, and we’re seeing the tree bear fruit now.”

“Whenever we’re talking to businesses, we have some fairly good opener.  No business tax is huge, particularly when compared to Winnipeg.”

Offering free serviced industrial land certainly hasn’t hurt either.  All city officials ask entrepreneurs in return is that they sign a development agreement for the property and live up to their end of the bargain.

“Then we’ll transfer the title.  A lot of other places in Western Canada charge a considerable amount of money per serviced acre.  That’s money out of your pocket right off the bat,” he said.

French fry manufacturer McCain Foods and Can-Oats, a producer of oat-related products distributed around the world, are two of the biggest employers in the region.  The most recent boost has come from Simplot Canada, which built it’s own potato processing plant in Portage in 2003, and added a fourth shift last year.

“We recognize from an industrial perspective, we’re in the bread basket of Canada.  We have a strong producer base and it shows,” Yaremchuk says. 

Portage la Prairie has approximately 550 acres designated for industrial and industrial reserve use citywide.  Some infill industrial development could also occur in the Western and Railway Industrial areas.  Of the 550 acres of industrially designated land, the city has approximately 200 available acres which is principally located in the McMillan Industrial Park.

The retail scene has also proven to be robust.  It boasts the province’s last rural Wal-Mart at more than 130,000 square feet, and Burger King recently provided a vote of confidence by christening its first restaurant. 

The overall draw to more than 60,000 people in the trading area has been sufficient to stave off any significant impact from the economic slowdown.

“It’s pretty much business as usual,” he says.

Portage’s housing market also remains strong Yvette Cuthbert, president of the city’s real estate board and a sales consultant with Century 21 Andrich Realty, says there are slim pickings on the market.

“We have the fewest homes on the market that I have ever seen,” she says.

She’s reluctant to hazard a guess where prices will go over the next year but she’s confident that demand is poised to increase.

“My crystal ball isn’t crystal clear but so far it sure doesn’t appear that real estate prices will be dropping anytime soon.  The envelope is still being pushed forward,” she says.

Some of that push is coming from current conditions, including 50-year-low mortgage rates, tax incentives for first-time buyers and renovation tax credits.

“We’re also seeing an increase of people from other areas of Manitoba, B.C., Alberta and Ontario buying homes in Portage,” she says.

The average startup home in Portage is worth between $90,000 and $120,000, while the mid-range runs from $150,000 - $225,000 and select few homes sell for north of $300,000.