Time to think outside the box: stadiums create little benefit
By David Seymour
December 18, 2008
Currying public popularity with entertainment should have ceased to be acceptable statecraft 2,000 years ago. Unfortunately, the lukewarm tone of the debate that erupted around building a taxpayer-funded stadium in Regina shows how tenacious certain principles of politics are. In Roman times, leaders knew they were in trouble when they struggled to afford lavish gladiatorial performances for their citizens. Little has changed.
Evidently the growth of humanity in sport hasn't been matched by a growth in understanding of government, but modern Canadian governments supposedly have two roles. One is to provide public goods and the other is to redistribute income in order that all Canadians enjoy some reasonable minimum living standard. Building a dome over Mosaic Stadium fails both tests. It is not a genuine public good, and though it would be nice if this were true, covering a stadium is not the final frontier in abolishing hardship from Canada.
Public goods have two characteristics that make them a worthwhile taxpayer investment. Their nature makes it hard to charge the people who benefit from them, and once they exist they are easy for everyone to share. The police provide a public good, because once the streets safe it is hard to make anyone in particular pay for that benefit, which everyone shares equally. Not so for a stadium dome. Using a device called a gate, stadium owners are able to prevent people who refuse to pay from receiving its benefits. Because stadiums raise their own revenue, there is no need to tax on their behalf. How much revenue they raise reflects their true value to the community. Also, they are not easy to share. Any version of the new stadium is likely to seat less than one in six residents of Regina or one in 30 of Saskatchewan.
Even if the entire city dutifully took turns to fill the stadium to capacity, it would take most of a season to accommodate everyone. The benefits of the stadium accumulate to a very small number of regular attendees, generally those who can afford $50 or $60 for a few hours' entertainment, and also to the highly paid players, entertainers, and promoters who take in what the public will hand over. Having failed to be a public good, stadium subsidies, by casting their benefits on the wealthier, actually undermine the government role of wealth redistribution.
The selfishness of the proposal shows up in the geography of opinion. Dome enthusiasm is proportional to one's proximity to the stadium. So the Regina mayor is "examining the possibility" while the Saskatchewan premier is (thankfully) cautious. The Saskatoon StarPhoenix is cynical while the Leader-Post is lukewarm. No doubt if the Nova Scotia Chronicle Herald cared to editorialize on federal dollars for our dome, the tone would be derisory.
After failing the role of government test on the two main criteria, the really wooly economics start to emerge. Most notable is the idea there will be lots of economic benefits from a stadium because people will spend money around events. Whether this is "true" depends on who paid the economist to do the study, but we don't need economists for this one anyway. Simply, consider how every dollar spent in connection with a stadium event is one that cannot be spent somewhere else. There are no net economic benefits from spending around a stadium's events, they can shift economic activity but they cannot create it.
Almost as bizarre is the idea that building a stadium will be part of an economic recovery. The folklore around make-work schemes credit them for the end of the Great Depression. While such myths have been debunked at more scholarly levels, we can again rely on practical observations. A project of the scale contemplated would take years to come on stream. Most of us hope for a quicker change of economic fortunes than that. If Regina's economy had relied on the Dewdney rail relocation project for economic salvation, we would be honorary members of the Third World by now.
We good socialists understand that our reason for being is the removal of privilege. We smart socialists understand that the Leviathan government we have created can end up creating even more privileges if it is not managed according to sound principles. The real disappointment is that we lack the political leadership in government, in opposition, and at City Hall to call this proposal what it is: a subsidy that socializes costs onto the many to deliver private benefits for the few.
- Seymour is director of the Saskatchewan office of the Frontier Centre for Public Policy, a Prairie-based think tank with offices in Regina, Winnipeg and Calgary. (
www.fcpp.org)
© Copyright (c) The Regina Leader-Post
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