April 1, 2016
Kitchener, ON –
THEMUSEUM in downtown Kitchener has announced plans to support local technology-based companies with an infusion of cash.
“In the world of arts and culture it is widely acknowledged that for every dollar invested in cultural organizations that $16 of positive economic impact is felt by the community.” Said David Marskell CEO of THEMUSEUM. “We hope by supporting the good work of community-tech companies that they can grow and flourish in our community attracting skilled labor who could become members of cultural organizations. It seems like a win-win” Marskell went on to say.
WORDS FROM RECENT RECORD EDITORIAL
Kitchener councillors voted this week to give Communitech $1.5 million over the next five years to help the local technology hub more than double its space at the Tannery building.
Kitchener councillors were, for the most part, effusive in their praise for Communitech in particular and the tech sector in general, They see it as essentially a no-brainer for the city to support a sector that is helping diversify the city’s economy past its traditional manufacturing base, and increasing its profile nationally and beyond.
There’s no question the tech business has had a huge impact on the local economy, and that Communitech has helped thousands of companies, from fledgling startups to more mature firms looking to expand and flourish.
The city’s economic development department likes to point out that Kitchener’s investment is relatively small — federal and provincial governments are being asked to contribute $7.25 million — and the benefit to the city far outweighs the cost of the investment.
All of that is undeniably true.
None of it, however, changes the fact that Communitech could be more transparent about its operations and more specific about the impact of its request.
When local arts, sports or community groups come to city hall, sometimes requesting just a few thousands dollars of public money, they must submit detailed financial statements and annual budgets for the scrutiny of city councillors.
But councillors made no such request this week of Communitech, which employs 74 people full-time and has a $12.3 million budget, about half of which comes from public coffers. It provides the city with its annual report, but that financial statement didn’t form part of the city report recommending the funding and it isn’t available on Communitech’s website.
The economic development department’s details are vague. It says, for instance, that “since 2010, Communitech has supported almost 2,300 startups, which have created up to 7,500 jobs in Waterloo Region.” Sounds impressive, but what does “up to 7,500” jobs actually mean? How many of those jobs can be directly attributed to Communitech’s work?
City council should insist that any significant requests for funding, from Communitech or other tech organizations, be transparent, clear and accompanied by specific numbers about annual budgets, the number of employees and the anticipated spinoff jobs.
The Communitech expansion, we are told, is expected to result in another 50 companies employing 4,000 people over the next five years. A followup report at the end of that time would certainly help buttress those claims and any future funding requests.
City hall should apply rigorous standards when any group comes asking for local tax dollars — whether it’s neighbourhood associations, sports teams or Communitech.