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.