Wednesday, February 9, 2011

Gas tax for arenas?

I was going to write today about the proposed merger between the Toronto and London stock markets (bottom line, I think it makes sense but it needs to be studied carefully and not rushed through to decision)    But the news that some of the money from the federal gas tax may go to fund the construction of a new $400 million arena in Québec City with no guarantee that any NHL team would move or a new franchise created strikes me as wrong headed, when the intention of the shared tax is to deal with immediate infrastructure needs (roads, sewers, and public transit improvements).

A pot of $2 billion per year may not seem like a lot in the scheme of things but for a city like Toronto, that's over $162 million -- and TO has chosen spend all of its money on the TTC.   If even a small portion of that was cut then the fight over bus route cuts could start all over again and everyone would know who to blame was.

Nor is there any guarantee that costs would be contained.    Just look at some classic blunders -- The Big Owe (rightfully named), project cost $134 million (in 1969 dollars!), total cost $1.6 billion.   And the Expos moved to Washington DC.    The SkyDome -- was supposed to cost $150 million, ended up costing over $570 million; all we ever got back was $151 million and its current book value is maybe $85 million.    In the States, they built a new Giants stadium and the taxpayers in New Jersey still have to pay the bonds on the old stadium, about $110 million, even though that arena was destroyed.

Ask the average person in Québec, or any province, what's more important, maintenance of roads or a dream project -- they'd tell you, it's maintenance of roads.    Properly maintained roads ensures a vibrant economy, not necessarily a project that is used only several days a year and winds up a white elephant.

The Cons may have just opened up another front on the non-election election front, and I for one welcome it.

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