Friday, September 10, 2010

Arenas Generate Revenue And Jobs

I understand that Chantal Hebert, Andrew Coyne, Allan Gregg, and Don Martin among others are united in their opposition to funding the construction of arenas as a means of stimulating economic activity and that there is populist opposition to this proposition. The theory goes that we should not subsidize infrastructure for millionaire athletes or invest money in public buildings. As it so happens, I spent two years working in the catacombs of General Motors Place in Vancouver, and I can say with absolute certainty that the building generated millions of dollars in economic activity separate even from the NHL franchise. If a building cost 500 million dollars to build, at least half of that is going to the wages of the workers who are doing the building. That money gets filtered into numerous sectors of the economy. Local contractors and blue collar workers get paid to build it, and those people spend the money that they earn in local businesses.

Concerts, hockey games, and special events generate millions of dollars for a product that people want to pay to see. Hundreds of people are employed to work these events, and the money those people earn is spent in the local economy. A local arena may employ a dozen people. A pro sports caliber arena employs at least 500 people, if not more. If you oppose this project because you don't like hockey, fine. It is the most popular recreational sport in our culture, so should we completely dismiss how many people in our country love it? I can't say with certainty that such a project will generate a long term profit, but I can assure you that thousands of people will derive happiness from their experiences at the facility. What kind of price tag do you put on pleasure?

If you build it, they will come...

15 comments:

  1. Arena's also Offset the horrible public service known as swimming pools.....nothing but a money hole....I would much rather money go towards New arena's then some arts/culture festivle...

    Considering that I identify with anything that happens more at an arena as culture, then some artsy independant film....

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  2. Quebec benefits from 60% of equalization payments already and has the lowest fees in Daycare and Education.

    Brian Mulroney tried to buy Socreds vote in QC too. It alienated many outside QC.

    Quebeckers can raise the $ 140 million by raising their fees. The local citizens should have their property taxes raised to pay for this wonderful edifice that may house an NHL team and may win an Olympic bid.

    If the building was a no brainer a business plan by those interested parties would be able to secure approval from a private lender. The banks have no problem making loans to those who can repay them. We have very low interest rates.

    I wish to reduce corporate welfare from autos, agriculture, energy across the board.

    Let's balance the books and deal with Pension Reform.

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  3. If you build it, they will come...

    If you build it, the conservative base might stay home on election day.

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  4. Well then Joanne, maybe we should educate the Conservative base on the economic viability of arenas? The construction workers who will build it are not millionaire athletes, neither are the concession workers, engineers, or janitors who will work there.

    Have you ever worked at an NHL arena? Let's discuss economics Joanne. And trust me, there are far worse fiscal appropriations by this government that could keep the conservative base away on election day. This one ain't high on my list.

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  5. All that money gets spent or invested anyway just not in arenas or sports venues. People and investors aren't sitting on their money waiting for specific investments to materialize. How can you be so sure that a particular investment in an arena, etc. is the optimal use of resources? Only the market can decide that, not a government that's continually fishing for votes. Furthermore, since all levels of government are massively in debt they have to borrow money that the taxpayer has to pay back. It's not the government that's investing, it's the taxpayer who is forced to invest by the government. And we're not even given the courtesy of a syllabus outlining our return on investment.

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  6. I'll agree with you in that arenas and similar buildings have a public benefit. However, what puzzles me on this investment, is why should it be FEDERAL dollars paying for it? Let the local governments pay for arenas in their communities. Maybe let the provincial taxpayers pay for larger arenas that benefit the larger economic areas of a province. But I just don't see this as being an aread the federal government should be involved with.

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  7. I agree that local governments should be putting up money also, but I should point out that the federal government is in much better fiscal shape than the province of Quebec. This will not get done without federal money. The NHL will not allow the relocation of a franchise to Quebec City without a new arena, and investors won't put up the money without a franchise.

    Chantal Hebert is saying that it will be toxic in Quebec if the government proceeds with this, and also toxic if they don't. That doesn't make any sense. I feel quite satisfied that Chantal and I disagree on this matter.

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  8. I do not agree with government funding sports facilities. We are supposed to be in a time of restraint. There are so many other priorities before funding for kind of structures. Yes they create jobs during construction but the fact is they are usually money pits in the long term. Once the government is in it is very difficult to get out. The fact is it is the province who benefits and therefore they along with private investors should build and own the facility. Another boondoggle for the Conservatives? I think so.

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  9. Hang on. You all can't deny that the media has been working hard to divorce the CPC from its base. Whoever builds this arena, you must know that some federal money is going to go to it under existing programs. You see the play don't you?

    Jim Flaherty said that the stimulus is going to end in March or April. That's all folks.

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  10. A boondoggle? They haven't done anything yet!!!

    What is the final price tag on the stimulus package, 40 billion? Trust me when I say that many of those projects will not yield the long term gain of a major arena.

    During the NHL lockout many owners generated quite a lot of revenue renting out the building for non-hockey events.

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  11. Alex says: 'You all can't deny that the media has been working hard to divorce the CPC from its base'

    Exactly, that's why all we hear is Quebec gets money,
    even tho PMSH, taking questions in Saskatoon, said ALL provinces will be treated equally and ALL submissions will be reviewed.

    We have an AG report coming out, perhaps there is still infrastructure money not earmarked.
    Also, besides the stimulus funds,
    there is Fed-Prov infrastructure funding.

    If Quebec wants an area, and Nfld wants an airport upgrade , and Alberta wants a Highway to Fort McMurray..... it's all the same, it's infrastructure.

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  12. ps. I would be very surprised if private investment is not part of the deal before fed funding is approved.

    There is billions of dollars in Canadians hands, just sitting, shaking loose some big bucks from the private sector into long term infrastructure investments is fantastic for the country.
    Could even hold off going down with the US for a second time.

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  13. Iceman, if the revenue generated by these arenas is so great, why won't a private investor spend the money to build the arena?

    A recent news story said that the project is only feasible with taxpayer support. To me that means they don't believe it will generate the revenue to recoup the capital it puts out to build the arena.

    I actually agree with Chantal Hebert. The government is in a no-win situation, if they spend the money, they won't get credit for it. And if they don't, they'll be tarred for unfairly treating Quebec. So, basically it comes down to which stick do you want the BQ to beat you with? I think thats what she meant when she said it will be toxic either way.

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  14. An Arena is a special building. It's a community hub and a place for rock concerts, political rallies and all kinds of other events besides our National Sport. If the private sector wants to build an arena then there will be a different type of management of that space. So I'm in favour of arena's built by both the public and private sectors. Gov't has to have it's hand in everything to ensure equity. And Government can, with the people's money, build the most lasting and beautiful structures in the country. That's part of our heritage. The issue is completely reduced to a polarized nonsense by pundits like Coyne. Even Maxime Bernier is playing that angle. Well I think most folks are like Iceman here and know that we, the people, can build it! We like our public buildings. If every building was a private enterprise that just wouldn't be right.

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  15. Karen, I'm guessing that was satire, and if so, good work.

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