Hamilton's economic development department has existed for years as the lost orphan inside the city's vast bureaucratic maze.

Everybody has talked about how lovely and needed the department is to the future of the city, but nobody - politicians, city staff, the business community - has wanted to take responsibility for nurturing the department into adulthood.

This week, though, councillors and city management, took a gingerly step forward to infuse the department with some sense of importance. The department will receive, starting in 2008, a much-needed cash infusion of $1.5 million that will go towards boosting its marketing and promotions strategy, hiring eight full-time people and creating an intergovernmental affairs office to lobby higher levels of government.

Even though Mayor Fred Eisenberger, city staff and the Hamilton Chamber of Commerce applauded council's decision as a new era for doing business in Hamilton, the reality is more dour.

There seems to be a Hamilton cultural factor to hinder businesses from prospering in the city. Historically, business people can testify to the mounds of red tape they have to navigate at city hall, the high taxes and user fees they have to pay and the poor city service and the negative attitude they receive in return. Look no further than the Maple Leaf Foods debacle where the city turned its collective nose on a profitable, job-employing company to fill the still vacant North Glanbrook Industrial Park. Coupled with the obstacle course Hamiltonians laid out to business people to develop the Lister Block and the controversy over creating the employment lands around the Hamilton Airport, and Ontario business people got the message: Hamilton is unfriendly to business.

The result? Hamilton's assessment rate is expected to be zero in 2008, down, if you can believe it, from about 1 per cent in 2007. Politicians are now wringing their hands as they are forced to approve escalating taxes and user fees on desperate homeowners, creating an even more inhospitable city to live, work and play.

A report by the Randolph Group only confirmed what business people have known for years: Hamilton has a negative image in the rest of the province and developers are reluctant to invest in the city.

Between 2005 and 2006 Hamilton and Niagara have lost about 11,600 manufacturing jobs, and over the last three years, the area has endured 19,700 job losses. And while the whole province has experienced manufacturing job losses, other communities such as Kitchener-Waterloo, Burlington and Brampton have managed to replace those jobs by enticing alternative companies to the area, while Hamilton moans about the lack of government funding.

For the most part the city's underfunded and understaffed economic development has done yeoman's work preventing current businesses from escaping the area, while enticing smaller companies to suburban locations. But it's not enough.

The city's lackadaisical attitude about its ailing economic future prompted the city's business community to finally take political action.

So in conjunction with the $1.5 million, councillors agreed to create a business advisory committee, composed of the Hamilton Civic Coalition, who are the city's most influential business people. Of course, in true Hamilton fashion, politicians rejected the more progressive idea of creating an arms-length economic development corporation, which has done wonders revitalizing Halifax's waterfront.

This week's decision to recognize Hamilton economic development department as a vital cog in the city's machine was welcome.

But in the business world, the $1.5 million is a pittance, and the programs just possibilities. What business people and developers are really looking for is action. And since the city remains determined to keep a tight leash on what the economic development department does, rest assure that Hamilton's economic door will remain locked to the rest of Ontario.