Road construction hurting business? Federation says municipalities should help

It's an annual certainty on par with death and taxes: municipal roadwork projects will create havoc and reduce access to some businesses.

But now a national business group wants municipalities to support the affected operations. 

Local governments "should consider having a compensation program," said Louis-Philippe Gauthier, director of provincial affairs for the Canadian Federation of Independent Business in New Brunswick.

"It's really a question of fairness. If you're going to offset somebody's livelihood, it should warrant financial consideration," Gauthier told Information Morning Fredericton.

His comments follow news of a pub just outside Fredericton city limits that closed its doors for good because, its owner said, of road construction.

Greg Hallihan, co-owner of the now-shuttered Houlie's Hometown Pub in the Pepper Creek area, said he couldn't keep the family business open after two summers of road construction kept customers away. 

"We lost our entire lunch crowd," Hallihan said earlier this week. "People couldn't wait in traffic for 45 minutes to come for a $15 lunch, or $10 lunch, and the same at suppertime."

He said the business was "completely cut off" because there was no alternate route.

Starting the conversation

Gauthier said the first thing municipalities can do to mitigate the impact on business is to ensure the scope and timelines of the project are made clear to owners and establish appropriate signage that indicate detours and that businesses are still open.

He said some municipalities, including Fredericton, do take those steps, but often a negative impact on business is unavoidable.

That's why a conversation about compensation needs to happen, Gauthier said.

"In the reality where the business suffers a significant reduction in foot traffic or in revenue, that's something that, in our opinion and based on our research we did in 2017, that businesses would want to have in plan," he said.

The federation surveyed its members two years ago and reported 41 per cent, or about 65,000, said they were impacted by road construction in the previous five years. Among the disruptions cited were dust, debris, noise, reduced parking and limited or no access for consumers.

In recent years, the city has been criticized for not communicating well enough about construction projects in high traffic areas, causing businesses to lose customers — especially in the downtown.

Earlier this month, the city promised it would update businesses four times a year about planned construction projects.

Plans established in Quebec

Gauthier said the idea of compensation isn't unheard of. 

Montreal introduced a compensation package late last year offering eligible businesses up to a maximum of $30,000. The amount is based on the decrease in gross profits during the construction period, minus the first 15 per cent in losses.

Similar programs were announced in Lévis and in Quebec City. 

Gauthier said there are a variety of ways a compensation plan could be drafted, but a mitigation strategy should be considered.

Taxpayers subsidizing business?

That idea might irk some residents who would rather not see their tax dollars subsidize business. But Gauthier said businesses are taxpayers too, and they pay far more tax than residential owners.

He said in any scenario, businesses would have to prove a significant and demonstrable impact to be eligible for financial assistance.

Asked what the City of Fredericton thought of the idea, the municipality declined an interview. Instead, a spokesperson said the city has no policy on compensation for construction delays.