Len's News, Notes, and Stuff

International Summits Aren’t Necessarily Good Business Propositions

I keep hearing from politicians and newspaper columnists that the upcoming G8 summit in Huntsville, Ontario and the G20 summit in Toronto will be good for local economies. “We’ll be making money from the events!” is the simplified message there. There will be an influx of money, they say. Sure, I’ll agree that the huge influx of visitors will mean dollars flowing to local restaurants, hotels, and other purveyors of necessities. However, I also know that these events explicitly cost a millions of dollars in direct security costs, and who knows how much more in hidden costs in terms of public servants’ time & effort spent on planning & preparations.

What is the net balance at the end of it all?  Does the boon to the local economy outweigh the money spent on hosting the event?  I have my doubts.

Based on what I see and hear within the Provincial government and in our dealings with municipal partners & front-line service providers, I know that a lot of money is being spent on preparations.

“Security for the April confab boasted a price tag of almost $12-million, the highest security expenditure in British history.” – Globe & Mail, February 19, 2010

The Federal government has publicly stated it will pay for all security-related expenses.  That’s a few million right there. $10 million, let’s say? However, the Federal government is quite unwilling – or, since they haven’t given a definitive No for the past year, at the very least it is highly hesitant – to acknowledge the costs planning, preparation, and mitigation costs from other non-security sectors.

For example, did you know that there are at least 100 people in the likely G20 security zone who require community health assistance of various kinds?  Plans and mitigation measures to ensure their health & well-being, over and above the health support service they get when things are normal, cost money.  Ensuring the hospitals in cottage country can handle a possible surge in demand due to the influx of visitors or from possible civil disturbance issues costs money. You already know that the health system costs us a lot of money when things are business-as-usual, so it should be no surprise that it costs us a lot of money to respond to extraordinary events like international summit that attract thousands of media personnel & protestors.

All the “event planning” work that civil servants at the federal, provincial, and municipal levels also costs money.  Government likes to think it doesn’t cost anything because these are salaried people who are on payroll anyways.  However, if you think about it from a basic accounting perspective, time and effort spent on a given endeavour is a direct expense for undertaking that endeavour, because you could be redirecting that time or effort to something else instead.

It’s almost as though the money that local economies are getting from visitors coming to town for these summits is money that the various levels of government are spending to host the events.  It is, in a roundabout way, like government grants to local businesses.  People from abroad are giving money to restaurants and hotels, but we’re spending oodles of public money to run the events.

It’s a valid question to ask if the money we’re spending to prepare for the events, and then to host them, is less than, equal to, or more than the money that local businesses will get.

“But the G20 also has a legacy of violent protests and multimillion-dollar cost overruns, bestowing little benefit other than bragging rights.” – Globe & Mail, February 19, 2010

For events that take so much preparation and precautions, it is foolish to argue that they’re good for the economy until we understand whether the events are actually good business propositions.  We’re really just paying ourselves, and maybe even paying out more than what we get in local pockets.

There are other reasons to want to host the summits, but to forward the argument that one of the benefits is the boon to the economy is rather dubious, I’d say.