Beggar thy Neighborhood

Recent events in the City of Surrey have got me thinking about a my recent trip to the U.S. While there a friend and I got into an exciting chat with an elderly gentleman. We discussed politic's generally, including the views of novelist Jack London and "Obomamania". I belive the word socialism even came up a few times, which is always a little frightning while in the United States.

One of this mans more interesting incites was that one of the best methods to get a true read on government policy is to follow the tax law. This is something I have heard before and makes a great deal of sense to me. Practically speaking taxation is one of the most powerful policy instruments government has. More importantly it is one of the few that they seem more than willing to use in recent times.

Which leads me to the City of Surrey and Mayor Watts' recent annoucment about the creation of "Economic Development Zones" With the creation of these special zones, Surrey will be offering special conditions to developers including tax exemptions and reductions in amenity requirements to develop in specific areas.

This is obviously bad. The extraction of amenities from developers is one of the more positive things that municipal government does. While far from adequate these contributions ensure that  developers at least pay some of the costs for ensuring a livable city (parks, community centers, new infrastructure etc..)

Nothing really new or exciting here just politics on the part of Ms. Watts/aid to developers that don't need it. However its interesting to look at this in a larger context. Does having a number of smaller municipalities as opposed to one larger body, as in Toronto/Montreal, lead to a "race to the bottom" in terms of competition for development. 

With the power of the development industry/profit motive its hard enough imagine any positive results from development with out institutional incentives on the part of local governments also contributing to the problem.