I am writing this even before the games have started in earnest.
There is no wonder how political leaders can rail endlessly about economic failures such as the proposed Brampton LRT and the PanAm games.
The PanAm website boasts 75% of tickets will be $45 dollars. At approximately 1.2 million tickets sold that is roughly 45 million dollars while the budget cost is exorbitant at 1.2 billion dollars. The Financial Post tags the games budget at 2.6 billion dollars. I’ll bet the Post is more right than the Ontario official web page. It will most likely require the AG to reveal the true cost of the games.
In addition, foreign business investment as a result of the games is estimated to balance the costs. If this is the estimate, by what standard are these games judged? Let us stick with an economics.
If an undertaking is good, the first rule is to make a profit. This government sponsored event won’t. A longer term, positive indicator is the games should increase the wage level of Ontario. A year or two down the road (mark my words) check your wallets and purses. Will you be richer with more secure saving? This won’t happen. Another indicator of a good economic decision is an out, however slightly of Ontario’s stagnant recession. Ontario’s spendthrift province, being the spendthrift province will not have a surplus, or savings that can go anywhere due to existing debt so there will be no future seed money. The reason PanAm is already such a loser is because there is wild spending, and no production involved. There is nothing sustainable but only a deep black debt hole getting deeper with each passing sport day.
I’m not against the games but they could have been staged much leaner, and could have made a profit if only it was privately run as Los Angeles was. The Freedom Party of Ontario is right in its stopping similar games in London a few years ago, “No tax for PanAm games.”
The proposed LRT for Brampton are much the same kind of losing proposition but the conditions are very much different. The underlying principles and economic principles remain the same.
More on Brampton’s LRT later.