Financial incentives can play a role in enticing businesses to set up shop in one municipality versus another, but they’re not the main draw, according to a web poll of 122 Canadian business leaders conducted by COMPAS Inc.
A skilled workforce is by far the most attractive feature of a city for the CEOs in the survey. Decent local transportation, and easy access to an airport and major highways rounded out the top three factors among the respondents.
Large financial incentives ranked sixth on the list of eight factors. “I completely disagree with the notion that any level of government should offer financial incentives for any business or industry to locate in their jurisdiction,” wrote one CEO. “This is a zero-sum game…and is grossly unfair to those of us with small or medium-sized businesses who will never be eligible for such subsidies. If I’m not eligible, why should my tax money pay to subsidize others?”
Another respondent viewed incentives more favourably. “Businesses may think these [other city features] are the reasons to move, but financial incentives win out every time,” wrote the CEO.
Attractive restaurant and entertainment opportunities were considered the least important factors, slightly behind good schools. “The big three major Canadian cities all have good restaurants and entertainment,” wrote one CEO. “Maybe I would consider such factors if choosing between smaller centres.”
The respondents raised other issues to consider, as well. “One major matter not addressed is the need to be close to a customer base, especially when the business being conducted is of a service nature,” wrote one. Another CEO echoed the sentiment, although from a manufacturing perspective: “Proximity to major customers is essential so as to keep transportation costs down.”