The on-again, off-again project for a new arena in Calgary is on again. At twice the cost.

Earlier this week The City of Calgary, the Calgary Sports and Entertainment Corporation (CSEC) and the province announced a $1.22 billion replacement for the Saddledome, a community rink, a public plaza and associated infrastructure upgrades. CSEC owns the Calgary Flames and the Calgary Stampeders among other teams.

The sweetener was $330 million from the province for infrastructure and demolishing the Saddledome. This was something of a surprise considering that when Edmonton was building a new area, Premier Danielle Smith, then head of the Wildrose Party, said there was no way she would use public money to fund it.

What’s changed? Not Danielle, I’m sure. But there’s an election in May and that has turned the libertarian premier into a spendthrift. The conservative lady that doesn’t believe politicians should pick winners and losers in the marketplace has picked CSEC and the Calgary Flames. Calgary is the key in the election and so a $330 million bribe it is.

She made clear that this was politics with her comment, “To be clear, a vote for the UCP is also a vote for moving full steam ahead with this arena project.” That’s pretty clear. Or is it? She then hedges, “This is not money going to an arena. Nothing has changed. This is money going to infrastructure support.”

How much more political can you get? Give us credit for supporting the arena, but hey, if you don’t like us spending your tax dollars on arenas, we really aren’t.

In any case, CSEC has done very well for itself. The last deal, signed in 2019, split the $550 million cost 50-50 with The City. When the cost soared past $634 million (half the price of the new deal) CSEC pulled out. 

Under the latest version, The City puts up $537 million, CSEC $356 million and the province $330 million. Public money goes from half to three-quarters and, in an especially nice touch, CSEC only has to put $40 million upfront and then pays their remaining share as lease payments over 35 years.

All this could still change. At the moment, many details remain murky or undisclosed, with only a memorandum of understanding in place. And if this bears any resemblance to the last deal, that is ominous. Some details are perhaps being saved for post-election surprises. One surprise could be cost overruns which The City and CSEC are equally responsible for, something that makes me very nervous. Rachel Notley wisely wants to see the fine print before committing.

So is it worth it? Researching the economic literature, Dennis Coates, Professor of Economics at the University of Maryland and Brad R. Humphreys, associate professor in the Department of Economics at the University of Alberta, concluded “Focusing our attention on research done by economists, as opposed to that of scholars from public policy or urban development and planning departments, we find near unanimity in the conclusion that stadiums, arenas and sports franchises have no consistent, positive impact on jobs, income, and tax revenues.”

The authors point out that “The implicit and explicit anti-trust protection extended to North American professional sports leagues probably contributes to the ability of team owners to extract subsidies from local governments,” and plaintively conclude, “At any rate, we seem to have reached the classic paradox in which economists reach a conclusion but are unable to make economic wisdom decisive in public policy decisions.

The economics community is in agreement that a new arena will provide little or no economic gain. The arena is, in other words, a vanity project.

I fail, therefore, to see how it can be justified when the money could clearly be spent more constructively and humanely. I am drawn specifically to the pressing needs for affordable housing and improved health care.

I strongly support spending public funds on appropriate culture, for example on amateur sports or struggling artists. but I am very much opposed to use public funds for supporting rich men running a profitable business that can afford to pay its player/employees millions of dollars a year salaries. That is simply perverse.

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