Business improvement areas

A business improvement area is a local service area established by a municipal council where business and light industry property owners finance activities to promote business. Removing graffiti, holding events and conserving heritage property can improve the local economy and advance the social well-being of the community.

The Community Charter provides the authority for a municipality to create a business improvement area by bylaw, and establishes the rules for the establishment and operation of such an area. Business promotion activities in a business improvement area are financed through a municipal grant and local service property tax scheme.

For property owners and businesses, a business improvement area is a way to improve business success by organizing and financing support programs not otherwise available.

For a municipality and the wider community, a business improvement area provides a sector of the community with the means to improve local economic development and also achieve positive social outcomes, such as a revitalized downtown core.

Considerations for a business improvement area

Before a municipality considers adopting a bylaw for a business improvement area, proponents and municipal representatives would work together to answer the following questions:

  • Does the community need a business improvement area in a particular part of the municipality?
  • Are there specific activities that would be undertaken through business improvement area?
  • What information is already available on matters such as the economic profile of the community, market information, and municipal plans for the area?
  • How can we reach out to local businesses to gauge their interests?
  • Is there general interest in business promotion as a way to grow business activity and the local economy.

The corporation or organization that will operate a business improvement area is typically established as a society (a legal entity that the municipality can provide funds) that enables its members to contribute funding and pool resources for mutually beneficial activities and projects.

Managing a business improvement area

The society that operates a business improvement area must represent the businesses of the area. It needs directors who represent the mix of businesses, as well as other groups involved in marketing the community, for example, a tourist association. Considerations include:

  • What type of governance structure do we need to manage the business improvement area?
  • Do we need full or part-time management, office staff, or even an office?
  • What activities (business promotion schemes) should we do?

Specific considerations in managing a business improvement area include:

  • The total years of operation (the term) of the business improvement area can be determined by discussions between organizers and the municipality according to the organization's goals.
  • The boundary for the business improvement area should be fair and exclude businesses that will receive little benefit from being part of business promotion, and other, related programs.
  • Annual business improvement area budgets are funded through a local area service property tax on business and light industry properties (BC Assessment Class 5 and Class 6 properties) within the boundary. Through that tax, the grant provided by the municipality for the business promotion schemes of the business improvement area is recovered.
  • Proponents need to advise the municipality of required funding support for the first year of operations.

Business promotion scheme

A municipal council can only grant money for a business improvement area that has as one of its aims the planning and implementation of a business promotion scheme. The Community Charter requires that the scheme must include one or more of the following:

  • Carrying out studies or developing reports
  • Improving, beautifying or maintaining streets, sidewalks or municipally-owned land, buildings or other structures
  • Removing graffiti from buildings and other structures
  • Conserving heritage property
  • And generally encouraging business

With these considerations in mind, business and municipal leaders can work together to help create a shared vision of the business improvement area.

Property owner approval

Before a business improvement area can be created, the property owners in the area must indicate whether they favour or oppose its establishment. This can be accomplished in one of two ways:

  • Petition for service: Generally initiated by local business owners, the petition must include information about the proposed business improvement area including boundaries and estimated cost. The petition must be signed by the owners of at least 50 percent of the parcels that would be subject to the local area tax and those persons must be the owners of parcels that in total represent at least 50 percent of the assessed value of land and improvements that would be subject to the local service tax.
  • Council initiative - subject to petition against: A municipal council can also initiate the establishment of a business improvement area by providing an opportunity for a petition against the proposed service. Council must give notice of a petition against in accordance with section 94 of the Community Charter and by mailing notice to all the owners of parcels that would be subject to the local service tax. The notice must include information about the proposed business improvement area including boundaries and estimated cost . Unless Council receives a sufficient petition against within 30 days it can proceed. The threshold for sufficient petition against (50 percent of parcels and 50 percent of assessed value as described above) is the same as for a petition for service.

Learn more about the requirements for petitions for service and council initiatives:

Business improvement area bylaw

Once the vision for the business improvement area is determined and property owner approval obtained, work can begin on the bylaw that will create the business improvement area. A bylaw to establish a business improvement area has the same requirements as that for establishing a local service area with the addition that the bylaw:

  • Must identify the business promotion scheme for which and the organization to which the money will be granted
  • Must establish the maximum amount of money to be granted and the maximum term over which it may be granted
  • May set conditions and limitations on the receipt and expenditure of the money.

Learn more about bylaws for local area services.

Maximum amount, term and annual budget

When preparing the bylaw, the municipality would need to consider the total of all years of operation of the business improvement area (the term) and the maximum amount to be granted (total of funds required over the term) need to be stated in the bylaw.

There is a difference between the maximum term (the total term of the operation which is not limited by legislation) and the annual budget (which is the frequency with which funding/cost recovery might be triggered within that term—typically annually to fit with municipal budgeting).

Method of cost recovery

Since business improvement areas are funded through a special property levy on commercial properties within the designated BIA boundaries the municipality would need consider:

  • A tax on land, improvements, or both
  • Parcel tax (fixed amount per legal parcel of land)
  • Frontage tax (fixed amount per lineal foot of frontage)
  • Property value tax (dollar amount per $1,000 of assessment)
  • A tax on another basis (for example, a dollar amount per square foot)

The method of taxation must be as fair and equitable as possible. The municipal council may decide to recover costs a fixed amount each year, or very the amount recovered each year, or designate a lump sum for the business improvement area term, divided annually as the business improvement area sees fit. This choice must be included in the bylaw.

Managing and operating a business improvement area

Once the business improvement area bylaw is passed by the municipal council, the organizers must formally determine how the organization will operate and manage the business improvement area.


Although all commercial and industry property owners must contribute financially to the business improvement area, the organization itself decides who can be a member. Members may include property owners and business owners (for example, business tenants who lease property in the area).

Management and structure

Members must decide the composition of the board and its electoral procedures. They can assign positions to represent different types of members such as property owners or business owners who are tenants. Most business improvement areas have a non-voting council liaison who would not be a board member.

Each business improvement area determines its operating structure. In some cases, the board may have the authority to form subcommittees with specific goals, such as to prepare and implement annual work programs and budgets, which may include marketing, consulting studies, streetscape maintenance, design work, hiring of staff and liaison with municipal council.

Business improvement areas typically have mandates for 5-10 years, and would not incur debt beyond the maximum term stated in their bylaws.

Staff and consultants

In deciding the most appropriate way of achieving its objectives, the board may choose to depend on volunteers, hire full or part-time staff or consultants, or operate with a combination of volunteers, permanent staff and staff on short-term contracts.

Annual budgets

An organization operating a business improvement area is a legal entity and must report its expenditures annually to its members. At the annual general meeting, business improvement area members approve the budget for the next year. The budget is the annual basis for municipal council decisions on granting and cost recovery for next year’s business promotion activities.