Friday, October 1, 2010

Should Your Tax Dollars Fund A New Arena In Quebec?

This article was first published in the October 1st edition of Main Street Week and is reprinted here with permission from the editors. Drop by Main Street Week News to have a look at a great community newspaper or sign up and have Main Street Week delivered right to your inbox every Friday.

The Quebec government's recent announcement that they will provide funding for a new arena in Quebec City, hoping to bring the NHL and the Nordiques back to life is good news on many fronts. By pledging millions in funding, the government has revealed that the health care crisis is solved, the unemployment rate is at zero, and our schools have all the funding they require. Every child in the province has a healthy breakfast, and our entire road and infrastructure needs have been met. Congratulations everyone! Wait, you mean those problems have not been solved...

I tackled this topic at The Voice of during the Phoenix Coyotes bankruptcy saga; it is wrong and economically unnecessary to spend public funds on sports leagues and their new stadiums/arenas. It is a double-edged sword and a clear attempt at purchasing goodwill and votes with your hard-earned income. Now, the city and the province are reaching out to the federal government to complete the trifecta of public funding for a new arena.

It is on very rare occasions that I find myself agreeing with Prime Minister Harper, in fact, this may be the first time, but at a recent Conservative Party gathering, he discussed the possibility of his government providing the estimated $200 million needed to give the Quebec City arena project the green light.

“My friends, we are all great fans of professional sports, but professional sports are first and foremost the responsibility of the private sector. If there is a role for the federal government, it must be equitable across the country and also affordable.”

In other words, if you are looking for money from the federal tax coffers, keep looking. This is not a slight at the people of Quebec, it is the harsh realities of today's economic climate; there are more important things then new arenas for privately owned sports teams. The Calgary Flames and Edmonton Oilers are ready to build new arenas; do they qualify for public funds along with Quebec City? Would the other Canadian NHL teams look for retroactive funding? The Montreal Canadiens have dealt with property tax bills in the neighbourhood of $10 million per year, and the Ottawa Senators built their own off-ramp to Scotiabank Place when they joined the league at a cost of $14 million.

While it is quite common for public funds to go towards stadiums and arenas in the United States, it is something our government has avoided in the past, resulting in the Winnipeg Jets and the Nordiques heading south into new arenas in the 1990's. At least in the US, the final decision often remains in the hands of the taxpayers themselves with a vote in a public referendum, as was the case in the state of Washington in 1997 when a new stadium for the NFL’s Seahawks was required.

When researching this topic for my original articles at TVOS, I discovered a report by the University of Maryland on Professional Sports Facilities, Franchises and Urban Economic Development. In the report, they discuss the subsidies provided to sports franchises between 1998 and 2003. Twenty-six new facilities began operations for NFL, MLB and NBA teams, five facilities were for NBA and NHL teams. The average cost of the new stadiums/arenas was $320.6 million with an average of $208 million in taxpayer subsidies. The study concluded there is “very little to no economic improvement” in cities that use tax dollars to build new facilities.

Why the love affair with spending public funds? To put it quite simply, it is all about optics. It looks good to ride in and save the day, being the hero with someone else's money. Until the most urgent needs of society have been met, using tax dollars for stadiums and arenas can be summed up in a single word - irresponsible. Ask the citizens of Glendale, Arizona about tax dollars and new arenas... Have a great sports day everyone.

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