Downtown Business Association funding under the microscope

Red Deer city council approved a motion kick starting a process that could to the Business Improvement Area (BIA) being eliminated.

The narrowly approved motion calls on administration to bring forward a bylaw to initiate the process of “dis-establishing” the BIA not later than April 30, 2026

The 326 businesses in the BIA help support the Downtown Business Association (DBA)  through a levy collected by the city on behalf of the DBA every year.

Council heard that it is a funding system that is no longer working and other options must be considered.

“The BIA is not an appropriate funding mechanism anymore,” said city manager Tara Lodewyk.

A vote in favour should not be interpreted as a lack of confidence in the Downtown Business Association, she said.

“This is about is this the appropriate funding mechanism for how we do our work in the downtown.”

The levy typically supports beautification projects, events, marketing and safety initiatives that benefit and help promote the downtown.

Lodewyk said while council’s motion starts a process, it will be up to BIA members to decide its future by a formal vote, which must happen within 90 days of a dis-establishment bylaw getting first reading.

Lodewyk said council’s direction is timely because a Downtown Governance Committee is working on recommendations on how best to support downtown businesses and promote a vibrant city core. Council is expected to make a decision on the best road to take by March 2026.

Coun. Lawrence Lee also noted the vote puts the BIA’s future in the hands of its businesses.

“It allows the DBA to respond and to take up the opportunities that they need to prepare for the future of that organization …”

It may morph into something different, but that will be up its businesses, he added.

Council heard that the province has been reducing funding to the DBA and another model is necessary.

Mayor Ken Johnston said many of the DBA’s funding problems are because of a lack of provincial support. He voted against the motion, saying more options should be considered and “it’s a little too early” to put dis-establishment on the table.

Coun.Victor Doerksen proposed the motion but admitted he “had a lot of angst” about how the DBA and downtown businesses could be affected. He said a new model must be pursued with the DBA’s input.

Doerksen also proposed a successful second motion to develop a grant-in-lieu funding option that would replace the BIA levy, which would be reduced to zero. The next council would decide whether to go that route during 2026 budget talks.

The grant would fund the DBA’s programs and services.

Coun. Vesna Higham voted in favour of getting the dis-establishment process started with some reluctance. She questioned whether expanding the area included in the BIA may be a better option that should be explored and she called on businesses to make their wishes heard.