Alberta
More questions than answers on NHL scheduling
MORE QUESTIONS THAN ANSWERS
Rumours are the lifeblood of sports. Few will argue the accuracy of such a statement. Perhaps the reason they draw so much attention on talk shows and in face-to-face conversation is the inevitable growth of broad and open discussions over a period of time.
Often, in sport and in every attention-getting issue, these debates take the simplest possible form: one group of gripers against another group of gripers. In the best of circumstances logic takes the place of emotion and the reasonable point of view is accepted.
Not always, of course.
Edmonton has much to offer in its bid, obviously starting with the region’s success in its war with coronavirus.
NHL scheduling — do they play or not? should they play or not? – has dominated these arguments almost since the first wide knowledge that COVID-19 had brought its crippling threat to North America. At times, the noise of fans desperate for the game and those who find desperate reason to keep everything, including sports events, locked down for the longest possible period has threatened to overshadow all but the most vital question of personal health and survival.
Self-distancing is at the root of all debates. Stay home as much as possible. Wear masks. Stay at least three metres away from other humans, except those who live in the same residence. Obviously, this has been good advice and continues to be.
But calls for a looser application of these valid regulations have apparently become the majority opinion. Larger social groups have been approved. More customers are allowed in many businesses than was the case only a few days ago. Haircuts are allowed, at long last.
Most important in the context of sports, golf courses and other athletic and fitness facilities have been opened. Beaches, too, but indoor swimming pools – in Edmonton anyway are still off-limits.
As I’m sure you know, the two-metre (roughly six feet) between unrelated individuals is still recommended.
Nowhere is the debate more heated than in talk of the NHL playoffs. Edmonton’s anxiety to become a so-called “hub” city for half of the games has been covered to the point of mental exhaustion for me, but still there are more questions than answers.
The biggest complaint seems to be articulated by those who think the NHL should live by the same rules as the rest of us. Many have complained in public at any suggestion that the 14-day isolation requirement for newcomers to the province should stay in place, even if it means the NHL and communication outlets in both North American nations would have to take their attractions to a city more welcoming.
Government officials insist that all possible precautions will be kept in place as newcomers arrive for the necessary training. The testing and recovery ratios are among the best in the world, but still concerns are expressed in strident tones. Edmonton has much to offer in its bid, obviously starting with the region’s success in its war with coronavirus.
From the standpoint of supporters, the status of Rexall Place among the very best facilities in the world should count as a major plus in the argument. Vancouver and Toronto have placed what they consider strong competitive bids. Vancouver’s COVID-19 numbers are in the same positive category as Edmonton’s. The same cannot be said for Toronto.
In only a short while, we’ll all learn whether Toronto’s financial opportunities overshadow the clear health advantages in smaller, western cities.
MORE QUESTIONS THAN ANSWERS.
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Alberta
Alberta government should eliminate corporate welfare to generate benefits for Albertans
From the Fraser Institute
By Spencer Gudewill and Tegan Hill
Last November, Premier Danielle Smith announced that her government will give up to $1.8 billion in subsidies to Dow Chemicals, which plans to expand a petrochemical project northeast of Edmonton. In other words, $1.8 billion in corporate welfare.
And this is just one example of corporate welfare paid for by Albertans.
According to a recent study published by the Fraser Institute, from 2007 to 2021, the latest year of available data, the Alberta government spent $31.0 billion (inflation-adjusted) on subsidies (a.k.a. corporate welfare) to select firms and businesses, purportedly to help Albertans. And this number excludes other forms of government handouts such as loan guarantees, direct investment and regulatory or tax privileges for particular firms and industries. So the total cost of corporate welfare in Alberta is likely much higher.
Why should Albertans care?
First off, there’s little evidence that corporate welfare generates widespread economic growth or jobs. In fact, evidence suggests the contrary—that subsidies result in a net loss to the economy by shifting resources to less productive sectors or locations (what economists call the “substitution effect”) and/or by keeping businesses alive that are otherwise economically unviable (i.e. “zombie companies”). This misallocation of resources leads to a less efficient, less productive and less prosperous Alberta.
And there are other costs to corporate welfare.
For example, between 2007 and 2019 (the latest year of pre-COVID data), every year on average the Alberta government spent 35 cents (out of every dollar of business income tax revenue it collected) on corporate welfare. Given that workers bear the burden of more than half of any business income tax indirectly through lower wages, if the government reduced business income taxes rather than spend money on corporate welfare, workers could benefit.
Moreover, Premier Smith failed in last month’s provincial budget to provide promised personal income tax relief and create a lower tax bracket for incomes below $60,000 to provide $760 in annual savings for Albertans (on average). But in 2019, after adjusting for inflation, the Alberta government spent $2.4 billion on corporate welfare—equivalent to $1,034 per tax filer. Clearly, instead of subsidizing select businesses, the Smith government could have kept its promise to lower personal income taxes.
Finally, there’s the Heritage Fund, which the Alberta government created almost 50 years ago to save a share of the province’s resource wealth for the future.
In her 2024 budget, Premier Smith earmarked $2.0 billion for the Heritage Fund this fiscal year—almost the exact amount spent on corporate welfare each year (on average) between 2007 and 2019. Put another way, the Alberta government could save twice as much in the Heritage Fund in 2024/25 if it ended corporate welfare, which would help Premier Smith keep her promise to build up the Heritage Fund to between $250 billion and $400 billion by 2050.
By eliminating corporate welfare, the Smith government can create fiscal room to reduce personal and business income taxes, or save more in the Heritage Fund. Any of these options will benefit Albertans far more than wasteful billion-dollar subsidies to favoured firms.
Authors:
Alberta
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