Last week, I broke the news that the provincial government spent $600,000 on last year’s Paul McCartney concert on the Halifax Common. Adding in HRM’s contribution, some $750,000 in taxpayer money was spent on the event.
The primary issue for me is one of secrecy—taxpayers can’t decide if such expenditures are appropriate if they don’t know about them—but with $750,000 for McCartney and a potential $100 million for a new convention centre, I’ve been thinking a lot lately about the economic arguments behind these expenditures. Both the concert and the convention centre are projects of Trade Centre Limited, the crown corporation charged with hosting major events in Halifax, and as TCL has been the brunt of much of my criticism, I only thought it fair to hear them out when they suggested I interview two people with more favourable economic views of the productions.
One interview was with Grant MacDonald, TCL’s director of Major Events and Community Partnerships. He told me what he could about how TCL calculates “direct expenditures” related to concerts—money spent locally by concert-goers and the promoter, supposedly $8 million in the McCartney show’s case. MacDonald didn’t really disagree with me when I argued that that figure misses all sorts of things, like money not spent elsewhere because of the concert (see a more in-depth discussion of those issues at thecoast.ca/bites).
As for secrecy issues, MacDonald correctly said revealing government expenditures is the duty of government, not TCL. I’ll call it a draw.
My other interview was with Michael Hughes, who works for the American publication Tradeshow Week and was in town for, I’m not making this up, National Meetings Industry Day. Obviously, he supports building a convention centre.
After we agreed that government expenditures, and the consultant reports spelling out the need for them, should be public my conversation with Hughes went downhill. (TCL refuses to release four consultant reports studying the proposed convention centre. Tuesday, infrastructure minister Bill Estabrooks announced he agrees with me, and will release at least one of the reports.)
Hughes’ basic line is that the convention industry reflects the overall economy—economy goes up, there are more conventions; economy goes down, fewer conventions. Now that the recent recession is over, he said, the economy is going to grow, so the convention centre business will boom.
Well, I asked, did you predict the recent global financial collapse? Nope. Then why should I trust your predictions now? Silence. Then I moved on: What if oil goes up to $250?
“That’s not going to happen,” he said. “I simply don’t believe that.” Huh. So, some people say this convention business is horribly environmentally, because gazillions of people are flying all over the planet to attend these things. What do you say to that? He literally laughed in my face. “The convention business is a green industry,” he said.
The premise of both bringing big concerts to the Common and of building a convention centre is that our local economy will boom because people from other places will come here, dropping tons of money.
But, seems to me, there’s no long-term understanding of the problems we are about to face: peak oil and global warming. Economist Jeff Rubin is now predicting $250/barrel oil in the next few years, and Obama is talking seriously about a carbon tax—the low figures being bandied about at this time are in the $20/tonne area, but even local policy makers speak of $100/tonne and Don Weaver of the IPCC wants a $200/tonne tax. What this means is the cost per delegate of a convention in Halifax would rise by something like $1,500, just for travel costs. That means far fewer conventioneers coming to town.
Rather than spending all this taxpayer dough on the desperate and ridiculous idea that people from other places will provide our economic sustenance, we should instead be gearing up for a local economy, building local sources of renewable energy, mass transit systems that don’t rely on imported oil and don’t pollute greenhouse gas, local food networks and so forth.
It’d be a shame to tell the next generation we didn’t prepare for them because we spent all our money chasing the delusion that other people will provide for us.
This article appears in Apr 22-28, 2010.
Halifax is slowly turning into a Flint, Michigan kind of situation. We lived off of one or two industries, and now that they’re disappearing, we’re scrambling to bring outside interest in, because we alienated our younger workforce (baby boomers continuing to work in professional fields, couple that with Gen Xers slowly filing back here after the downturn of the economy in Ontario/Alberta/BC) into either moving away, or just taking insignificant jobs, with nowhere to go but to the unemployment line. This will not be changed by having a bunch of suits in and out of the city for a conference on east coast business opportunities before they have a chance to have a beer in a bar. Lately, the only sustainable “business” we have in this city are the universities, which also turns out to be our weakness.
The secrecy within council will only disappear when the citizenry speaks out against it, however, despite how we feel, I think the majority of Haligonians just don’t give a shit. These are the same people that turn a blind eye to Kelly’s continued incompetence, and continually vote for him (primarily the people that will financially benefit from his policies, who are increasingly older, and are the largest voting demographic by my estimation), so I think it will only continue until Kelly crosses the political gaffe line, which would lead to him losing favour in the aforementioned demographic, which would lead to him losing the Mayor-ship. It’ll probably happen over secrecy on a Anne Murray concert.
Just a final note on the return of Jeff “Peak Oil” Rubin’s predictions: they’ll happen if the US implements a harsh carbon tax, but that is unlikely. Obama barely got a severely compromised health-care bill through the Senate. Any Carbon Taxes would also have to go through the same juggernaut, and given the current political climate (one that Chomsky has taken to calling a “near Fascist” uprising) even a small increase won’t go. Remember, oil prices are already inflated, especially since the Canadian dollar is floating either at par, or around par, and the US is still waging 2 wars, which also increases demand exponentially, so I think that oil may go over $150, but nowhere near $250, in any reasonable period of time. Also complicating matters is the fact that those prices are entirely based on the future price, so Rubin’s (as well as many of his peers) continued bullish nature on oil also inflates prices.
Question to Tim: it seems you have read Mr. Rubin’s book, did he make any full disclosure comments to the effect that he owns either outright owns the oil itself, or did he mention that he doesn’t have any vested interest outside of culling globalization? I only ask because I have yet to read the book, and it would seem to me that Mr. Rubin has a significant amount to gain by being bullish on oil prices.
When someone says, “That’ll never happen”, I start to worry. A lot.
I remember when crude was less than $2 a barrel.
I remember where I was when it hit $7 a barrel.
I remember the Liberal NEP (National Energy Programme) of the early 1980s and the oil price predictions (Dead wrong)
I remember an obscure US government document with a graph showing oil price predictions from about 15 sources from the US, business and overseas. None of them were accurate.
If you keep predicting $250 a barrel you may be right, you may not be alive when it happens but at some point it may very well reach that price. Along the way the government share of taxes will have to drop but if it hits $150 a barrel for a sustained period the argument for alternatives will kick in, economies will face severe hardship and worrying about rock concerts and conventions will disappear from the agenda.
Somehow Premier Dexter has to have the balls to tell the convention centre boosters to go ahead and spend their own money and offer to give them a break on HST. All the hotels can get together and add a 1% surcharge on hotel rooms and put the money towards the building and operation of the new centre. They can also try persuading the restaurant and bar owners to bring in a 1% surcharge.
Try that and see what the response is.
I confess I have not done the arithmetic, but I feel unsettled about public money being provided to support these large commercial concerts. All we are doing–as has been pointed out–is persuading folks to spend their money there instead of somewhere else. To a first approximation, people spend all the money they get. It all gets spent! I decided not to go see Paul McCartney, but it turns out some of my money was spent there anyway. Colour me grumpy.
One reason I did not go was that I was involved with the Atlantic Jazz Festival, whose opening weekend coincided with the McCartney concert. I am one of 500 volunteers that make this community-based festival happen every year. I have no idea if AJF attendance figures were affected by McCartney’s concert.
By the way, the festival has been renamed the TD Halifax Jazz Festival starting this year. And by the way, all the daytime concerts at this festival are FREE.
$250 a barrel of oil eh? Well, if you have any confidence in what you are saying, then you will be a millionaire in a few years. How much have you invested?
I would like to respond to those who believe the money will get spent anyway.
For some that would indeed be true. For others not really & then there’s those like 4 members of my family from Cape Breton who came up here specifically to see Sir Paul. So the money they spent on tickets, shopping (they were here 3 days) going out to eat etc. would not have been spent in the HRM if they were home in Northern C.B.
Also i’m one of those people who likes to save. I like the convenience of having a the money squirreled away for vacations, spur of the momement purchases & when something comes up like AC/DC in Moncton i don’t have to worry or borrow or use credit to go.
So I really don’t think the logic that ‘everybody would have spent the money anyway is anywhere near correct.