Incentives - their value and accountability in business attraction and retention: the debate continues

Abstract

Varied approaches to incentives for investment attraction and business retention have been developed in communities and regions throughout Canada and the United States. Yet, there still remains debate on effectiveness and accountability of incentives by the economic development profession, the service provider and the corporate end users. This paper provides an overview and assessment of incentives in Brockville, ON, viewpoints from economic developers, corporate executives and consultants, a comparative analysis between Canada and United States, preferred incentives by corporations, trends and perceived importance of incentives, accountability and justification issues, and future influencers. The consensus is that incentives have a role of growing importance in the site selection process, despite some fluctuation in the rankings in the annual surveys on the subject. But the real debate focuses on the accountability and justification factors associated with incentives. It is suggested that governments and organizations develop better tools for project analysis and improved tracking, accountability and justification.

Keywords: incentives, investment attraction, business retention, Canada, United States