1. Strike for climate
Today’s “strike for climate” is the main local event for this week’s climate actions. People are meeting at 11am at Victoria Park — half the park is closed due to the collapsed crane, but the “back,” southern half is open. From there, strikers will march to Nova Scotia Power, thence to Province House, ending at Grand Parade for speeches and rallies.
It’d be great if students were joined by a large contingent of older supporters.
2. Climate emergency and economic growth
“In The Handmaid’s Tale, Margaret Atwood’s 1985 dystopian novel set in a near-future totalitarian state, the women are subjugated in various horrific ways including that they are allowed to move around anywhere within town but are unaware that they are actually in a maze and are trapped,” writes Linda Pannozzo:
Atwood makes this comparison: “A rat in a maze is free to go anywhere, as long as it stays inside the maze.”
I was reminded of this rather troubling notion of freedom when I read the recent Gardner Pinfold report commissioned by the Halifax-based environmental organization the Ecology Action Centre, which basically said that shifting to renewable energy, which is crucial to fighting climate change and meeting meaningful greenhouse gas emissions targets, would grow the economy, create jobs, and boost the Gross Domestic Product (GDP). Specifically, it stated that by 2030, 15,000 jobs per year would be created in the “green economy” and $9.7 billion would be added to the GDP.
That all sounds well and good, if you accept as fact that you’re in a maze, and there’s no way out. These kinds of conventional economic claims are the same ones that have always been made by extractive industries too, and we know where they’ve gotten us.
Pannozzo contacted me last week to pitch a “four-part series exploring climate change and economic growth, green or otherwise.” I immediately accepted, but when I found Part 1 in my mailbox, took a quick scan, and saw that it dealt with the Gardner Pinfold report for the Ecology Action Centre (EAC), my first reaction was “oh, no.”
That was me being stupid. But let me explain.
When, a couple of weeks ago, I received the EAC’s press release — “15,000 JOBS, $9.7B IN GDP POSSIBLE FOR NOVA SCOTIA WITH NEW CLIMATE GOALS” screamed the subject line in all caps and an annoying green — and the then-embargoed Gardner Pinfold report, I decided to ignore it.
I distrust economic impact reports in general (a subject I’ll return to in item #5 below, on the stadium proposal), and economic impact reports from Gardner Pinfold in specific.
I’ve written about this distrust many places, including here, on Northern Pulp Mill:
It was particularly rich that Bruce Chapman, the manager of Northern Pulp Mill, attached an economic impact report on mill operations to the affidavit he filed with the court. The economic impact report was prepared in August 2015 by (of course) Gardner Pinfold. The report claims that the mill generates $151 million towards the GDP of the province, and generates employment of more than 2,000 people.
The average mill employee earns a salary of $84,600, claims the report; in my quick scan of the report I didn’t see any attempt to define the median mill salary — this could be a situation akin to Bill Gates walking into a bar and suddenly the average wealth of everyone in the bar is $100 million.
Regardless, the report doesn’t get into the already existing or potential negative economic impacts of the mill. On the former, there’s a big hit to tourism because of the mill. This is anecdotal, sure, but soon after I first moved to Nova Scotia I toured the province and spent one night in Pictou, But the place smelled so bad I never again considered it as a potential tourism destination. (I’ve gone back for work, but not as a tourist.) Surely, I can’t be the only potential tourist who avoids the place because of the foul smell of the mill — what’s the financial hit from that?
And then there’s the enormous potential financial hit should the fishery be affected by mill operations.
And I wrote about it again here, commenting on Mary Campbell’s analysis of an economic impact report on the cruise industry, recalling something I wrote almost a decade ago for The Coast:
When I read Campbell’s story, it brought to mind an article I wrote way back in 2010, which followed the various consultants’ reports analyzing what the economic impact of a new convention centre would be.
There was a lot wrong with those reports. For one thing, the consultants were making projections for a new 150,000 square foot convention centre, while the one we actually got is just 120,000 square feet.
But where things got really interesting is when Trade Centre Limited took the independent consultants’ projections for increased numbers of conventions and delegates at the new convention centre and handed those figures to Gardner Pinfold, another firm in the economic impact biz, to figure out what the economic impact of the new convention centre would be. I wrote:
The economic impact projections of the proposed convention centre boils down to this question: if this number of delegates came to Nova Scotia and each delegate spent this amount of money, what would be the impact on the provincial economy? It was not up to Gardner Pinfold to determine the number of delegates or the money spent per delegate — those figures came from the previous studies.
The first Gardner Pinfold analysis (as we’ll see, there is a second) pulls a lot of information straight out of the Deloitte report [Deloitte had synthesized earlier reports]…
Six months after Gardner Pinfold’s first economic impact analysis was submitted, Trade Centre Limited created its own report “Market Projections For A Proposed New Convention Centre,”completed in June 2010. This document forecast wildly increased delegate numbers — far larger than the numbers predicted in the consultant reports.
Having produced its greatly inflated numbers in June 2010, TCL gave them to Gardner Pinfold to run a second economic impact analysis, which was completed the next month, in July 2010.
Reading the second Gardner Pinfold report, you can almost hear the pain in the voice of the author as he or she dances around the elephant in the room — that they’ve been handed a bunch of inflated numbers that aren’t supported by any evidence: “This study extends the assessment of economic impacts attributable to WTCC II conducted in the previous study by including the economic impacts resulting from direct expenditures of updated delegate projections, event planners, consumer and tradeshows and smaller local events remaining in the local economy…The economic impact analysis in this report is based on the estimated number of events and subsequent direct expenditures attributable to delegates, planners, and O&M projected over the 10-year period, as reported in the Trade Centre Limited (TCL) report, Market Projections for a Proposed New Convention Centre: 10-Year Projections By Market Segment, 2010.”
Gardner Pinfold was in an unenviable position, having to rework numbers it had already compiled. The company never lies — so far as I can see, its calculations are reasonable, given the assumptions it had to work with. And never mind that those assumptions changed because of the new TCL delegate numbers — Gardner Pinfold never assesses whether the changed assumptions are warranted.
Let’s recap: We had four consulting firms doing an analysis on the need for and potential economic impact of a proposed convention centre, basing all their projections on a 150,000 square foot convention centre, as opposed to the 120,000 square foot convention centre that’s proposed. Along the way, the firms added in an arbitrary inflator that made the future delegate count much higher than was justified, and then that figure was used by Gardner Pinfold to forecast the economic impact of the convention centre. But Trade Centre Limited evidently wasn’t happy with even those inflated results, and so did their own in-house delegate projection that was more than double that projected by the consultants; those higher figures were then given back to Gardner Pinfold to run a second economic impact analysis that showed a supposed economic impact two-and-a-half times the first.
Again: use crap inputs and you’ll get crap outputs.
I’ve been pressed for time lately and couldn’t muster the energy to unpack it, and so I ignored the EAC/Gardner Pinfold study.
But as I say: I was stupid to think Linda Pannozzo wouldn’t have a good understanding of the issues. She actually did me one better and drilled into the supposed logic on the underlying premise that “economic growth” is both what it claims to be and a desirable thing in any event. She writes:
Adding to the GDP, which is what the EAC claims its proposal will do, isn’t necessarily a good thing, but goodness is implicit in the claim since no other interpretation is discussed.
A growing GDP can actually be bad, depending on what’s growing. The GDP represents the economic value of the total quantity of goods and services produced in the market economy, as well as the total amount of money earned and spent. But it does not tell us anything about societal progress, environmental health, or wellbeing. In fact, things like crime, pollution, clearcutting, ill health, and war, all make the GDP go up! When we trash a forest, the GDP goes up (rather than down) because forests are only given a monetary value when they’re cut down.
And that’s the other big problem with the GDP — we don’t put any economic value on all the things that are lost in a clearcut: habitat, soil health, biodiversity, and services that the forest provided us for free. These costs are all externalized, not paid for by the forest company (in this case) but by the rest of us and by future generations.
The entire “science” of economic analysis is actually a propaganda tool employed to restrict our appreciation of all human endeavours and the natural world to a frame that benefits one section of society over all others. Speaking of propaganda…
3. Mining lobbyist
Joan Baxter points out that the lobbyist group Mining Association of Nova Scotia has been in default on its corporate registration with the province since 2013. She writes:
Still, some might ask whether, in the greater scheme of things, we should worry that MANS has been operating in a state of “default.”
[Stacey] Rudderham thinks we should. For her it is galling that MANS feels it doesn’t need to keep its registration active, given that between 2014 and 2018, the government has given the association more than $200,000.
MANS has also had extensive access to young minds in provincial schools where it spreads its pro-industry message with its “Mining Rocks Video Contest” that offers $8,000 in prizes.
Both Liberal and PC MLAs have worked with MANS to hand out prizes for this contest in schools around the province. As I wrote here, in April 2018, Liberal MLA and Minister of Business Geoff MacLellan, helped distribute MANS prizes in a Glace Bay school. PC MLA from Cumberland North, Elizabeth Smith-McCrossin has also found time to present MANS cheques for winners of the contest, as has Mark Furey, Lunenburg West Liberal MLA and Nova Scotia’s justice minister.
According to Department of Energy and Mines spokesperson Gary Andrea, this year MANS applied for and received $52,000 from the Mineral Resources Development Fund to organize the “Gold Show,” which it describes as a “private event ” for “industry and government representatives,” to be held on October 17thand 18th at the Alt Hotel, on the grounds of the Halifax Stanfield International Airport.
Responding to my emailed request for information on media access, MANS’ Sarah Kirby said, “The Nova Scotia Gold Show is a private conference and there are no media events.”
So MANS got public funding to hold a private event.
For Rudderham, it is galling that MANS has defaulted on its registration and is still operating, getting government support and politicians’ ears:
They are receiving taxpayer funding. They are indoctrinating our youth in schools. They are lobbying government on highly controversial issues like uranium exploration and taking protected wilderness areas for mining and exploration. They are presenting themselves as authorities above all others, on what’s best for Nova Scotia. Anyone who receives taxpayer funding should be required to prove they are in good standing on all fees.
In her view, if the association has no legal status, then neither do any contracts for funding from the province.
This might seem petty, but it annoys me that large and influential outfits can’t keep their corporate registries up to date.
I get it when the cash-strapped local kids’ sports association or nonprofit falls into default. Run by volunteers with limited knowledge of government bureaucracy and little time to wade through the paperwork, they can be forgiven for falling behind on their registrations.
But I have no patience for a business or lobbyist group that can’t keep this straight. Halifax Examiner Inc. pays a law firm to look after its corporate registration, and surely to dog in heaven if a tiny shoestring outfit like the Examiner can afford to retain a lawyer for such purposes, so can Borg Incorporated or the supposed experts in economics and business running a giant lobbying firm like MANS.
4. A note
We interrupt this Morning File for a quick note.
In honour of the climate day of action, we kept the articles from Linda Pannozzo and Joan Baxter in front of the paywall so everyone can read them for free. However, it of course costs money to produce these articles and to pay the writers, and the Examiner is an advertising-free medium that relies entirely on subscription revenue.
Readers may have noticed many guest writers for Morning File recently. That’s because I’m working on a large project that is taking much of my time, and I expect to have other writers for Morning File two or three days a week for the next few months — expect to see lots of Suzanne Rent, Erica Butler, and Philip Moscovitch for Morning File, and more articles from the other regular writers.
I’ll tell you what my big project is as soon as I’m able, but for now I’m asking readers to trust that it is entirely worth hiring the other folks to fill in. They’re doing a great job!
In any event, all this costs money, and your subscriptions are needed now more than ever. Please subscribe.
We now return to our regularly scheduled Morning File.
Yesterday, the city published most (but not all) of the request for funding for a stadium that was submitted by Schooners Sport & Entertainment.
The request starts with a 35-page overview that is basically a PR spin for the stadium, full of nonsense phrases and promotional babble. I did a quick word count:
“World-class” — 4
“Vibrant/Vibrancy” — 5
“Value” — 23
“Benefit” — 39
“Thoughtful” — 6
“Incremental lift” — 3
“Healthy active living” — 2
“No, or minimal, cost” — 8
“Low-risk investment” — 2
Additionally, the request includes a bunch of attachments. I’m still working through them but here’s what I’ve noted so far.
In the overview, SSE proposes that a separate company, “StadiumCo,” be created to own and operate the stadium. StadiumCo will be distinct and separate from SSE or so-called “TeamCo.”
The proposal lays out the financing as follows:
We are relying on the following assumptions in this section:
A. The estimated budget to purchase the land and construct the “community aspects” of the facility is $100 million CAD–$110,000 million CAD (hereinafter, the “Project Cost”).
B. StadiumCo will be the owner of the community stadium, and will solely operate the facility and be responsible for all standard annual operational expenses of the facility (for more on this, please see Section 5.2).
C. StadiumCo is able to find a third party lender (hereinafter, the “Lender”) to finance the bulk of the Project Cost (hereinafter, the “Debt”).
D. Based on a 30-year repayment term with a 30-year amortization period, the annual repayment obligations of StadiumCo to the Lender in respect of the Debt are between $5–$6 million (hereinafter, the “Annual Payments”).
E. A TIF funding model would be implemented by HRM to generate revenue to support the Annual Payments in some fashion, with HRM receiving the continued benefit of the increased property tax base for the surrounding Shannon Park development on a continuing basis beyond the term of the Debt repayment period.
F. The Province of Nova Scotia (hereinafter, the “Province”): (1) increases the existing hotel bed tax from its current 2% to 4%; (2) institutes a rental car tax; (3) such incremental tax increases flow directly from the Province to StadiumCo or the Lender (hereinafter, the “Provincial Payments”); and (4) such Provincial Payments are in the range of $3–$4 million CAD per year.
G. SSE and/or TeamCo will contribute $1 million CAD per year in support of the Annual Payments (the “SSE Payments”). For clarity, the SSE Payments are in addition to the standard annual operational expenses of the facility—currently projected at approximately $3 million CAD–$4 million CAD per year—that SSE will solely bear (for more on this, please see Section 5.2).
H. The Lender will require the Province, the Federal Government, HRM or some combination thereof to provide a guarantee in support of the Debt and the Annual Payments in every funding option set forth below.
I. Subject to the terms of Option #1 below, if, in any year, the SSE Payments plus the Provincial Payments plus any financial commitment from HRM is higher than the Annual Payment, such excess will be placed in an annual maintenance/capital expenditure fund.
This all feels back-of-the-envelope to me, with a 10% fudge factor on the stadium costs (“$100-$110 million”), but then we learn in the supporting document that “the site is assumed to have clean soils and no remediation is required,” which is quite an assumption given that we’re talking about land in the shadow of the Tufts Cove smokestacks and a former military base.
Regardless, even taken at face value, the figures show that the total costs, including financing, will be from $150 million to $180 million ($5 million to $6 million over each of 30 years), with $90 million to $120 million ($3 million to $4 million over each of 30 years) coming from the province, and $60 million coming from the city ($2 million over each of 30 years). Supposedly, SSE will backfill the city’s payment with $1 million annually, such that the city’s actual costs would be $30 million, but as the whole loan payment will be guaranteed by some combination of the municipal, provincial, and federal governments, all bets are off on SSE’s $1 million. Anthony Leblanc and associates could simply walk away from the deal, leaving taxpayers responsible for the entire bill.
SSE has five different options for how the money could flow. I don’t have time to detail those here, but they reflect at some level a kind of sleight-of-hand. There are assumptions, for instance, that every car rental in Halifax will be made not just by some out-of-towner, but by an out-of-towner specifically driving to the stadium.
Tax Increment Financing
The biggest problem with the proposal is that it relies on so-called “tax increment financing” (TIF), which argues — falsely — that because of the existence of the stadium, tax receipts within some undefined (by the proposal) zone will increase over and beyond what the city would otherwise collect, and so this is “extra” money that can be used to pay down the debt.
This is simply a lie. Again, I don’t have time this morning, but I’ve written about this here:
Let’s get back to basics.
There’s only so much capacity for property tax generation across the entire municipality. You can build a giant retail complex at, say, Dartmouth Crossing, and for sure it will generate lots of property taxes, but only at the expense of other retail areas in the city, like say, Penhorn Hall. Penhorn Mall once generated a boatload of property taxes, but since shoppers opted to go to Dartmouth Crossing instead, the mall has been torn down and the old mall property is generating hardly anything in property taxes.
It’s a bit more complicated than the one-for-one example I just gave. There’s usually a year-over-year increase in total property taxes, spread across the entire city. But while the underlying value of the property shifts from this area to that area, you can’t pull one area out and say it’s somehow special, that it behaves separately from the whole. New office construction in Burnside hurts the office space market in downtown, or new flashy condos on the waterfront lowers the demand for new suburban neighbourhoods. Like that.
So if we build a mixed-use development around the stadium, it will generate new property taxes, but only at the expense of other existing mixed-use neighbourhoods and potential new mixed-use developments elsewhere.
Let me pull out my wallet… Hey, I’ve got 40 bucks! Let’s go shopping. We could go to the Halifax Shopping Centre, maybe cruise the Apple Store to look for something that only costs 40 bucks. Or, we could go to that new sports bar a block down from the new stadium and drink 40 bucks worth of shitty beer.
But here’s what we can’t do: both. We can’t go to the Apple Store and spend 40 bucks and then go to bar and drink 40 bucks worth of shitty beer, because I only have 40 bucks. My 40 bucks can help translate into property taxes over at the Halifax Shopping Centre or over at the shitty sports bar, but not at both places.
That’s the story over the entire city and everyone in it: we don’t miraculously have more money to spend because someone builds a shitty sports bar next to a stadium. And building a new shitty sports bar next to a stadium doesn’t miraculously increase the total amount collected in property taxes.
Property taxes are mostly a zero sum game (I realize there are demand-inducing elements to construction and so forth, but their effects are so minuscule that we can ignore them for this conversation).
The point is, we can’t section off Shannon Park and say, “hey! look! new property taxes! All those new taxes are extra new and extra clean money, like manna from heaven, that we can use to pay for a stadium!”
We can’t say that because necessarily the potential for property tax increases elsewhere in the city will be lowered. It’s all the same pot of money.
No matter how you obscure it, no matter what kind of financial shell games you use, shuffling the pea this way or that, hiding it with smoke and confusing people with mirrors, spending public money on a stadium necessarily means either spending less public money on things like parks and cops and firefighters and filling potholes, or increasing taxes. There’s no way around that.
Weirdly, the documents insist that “Shannon Park is located in close proximity to the HRM urban core (10–15 minute drive from both downtown Halifax and downtown Dartmouth),” which was clearly written by someone who has never actually driven from downtown Halifax to Shannon Park, and most certainly not when 24,000 other people are trying to do the same. Even if it were true, since when is a 15-minute drive away “close proximity”?
Bizarrely, the proposal doubles down on this, claiming that “significant volumes of pedestrians are likely to walk to the remainder of Shannon Park, Highfield Park, the Bedford Institute of Oceanography parking lot, and the Downtown Dartmouth area.” Google Maps tells me it is a 58-minute walk from Shannon Park to downtown Dartmouth.
And here are two other transportation assumptions:
• Approximately 340 buses (tour buses from outside of HRM as well as Halifax Transit, Stock and private providers) will enter and exit the site during the peak hours before and after the game.
• It is likely to take about 2 minutes to unload and load a bus.
Again, this is obviously written by someone who has never actually ridden on a bus.
I’m way too late with Morning File as is, so let me just repeat this:
It almost appears that economic development forecasting firms are in the business of polishing bullshit.
That’s a little unfair, however. Their business is simply making calculations. They are a tool, and only a tool. Inputs in, outputs out.
Governments and project backers point at the outputs — the economic impact statements — which are produced by reputable firms, and say, “See! We’ll all get rich!” But those reputable firms (and certainly not the project backers) don’t question the initial inputs, so, as qualified and reputable as the firms are, take the economic impact reports with a grain of salt.
The other thing the firms don’t do is give context, or provide alternatives. What would happen if the money that was spent on a new convention centre was spent instead on, say, reducing university tuition? What would be the economic impact of that, and if you compare the two, which is the better investment? That’s not a question asked of the firms.
Likewise, the economic impact calculations don’t analyze values. We can argue about the initial assumptions and resulting projections, but there’s no doubt the new convention centre will have real economic impact… but for whom? Some people will benefit a lot, others not so much. Now let’s say we spent the same dollar amount on poverty reduction — increasing social assistance payouts and forgiving debts of the very poor. This too would have real economic impact, but (largely) benefiting a different group of people. Why is the first expenditure acceptable and the second not? The reports don’t get into such questions, which in the end aren’t so much economic as they are philosophical and political.
Back to the stadium. We’re being urged to spend a lot of public money on a structure that will give huge profits to Anthony LeBlanc, some profits to a handful of business people, a (very) few jobs, and not much else for the public generally.
Is this really the best use of public dollars?
I’ll continue to work on this over the weekend.
6. Rail corridor
“The Port of Sydney Development Corporation is ‘discussing’ the possible purchase of ‘rail corridor adjacent to the second berth lands,’ with Genesee & Wyoming (G&W), the US-based company that owns the Cape Breton and Central Nova Scotia Railway (CBNS),” reports Mary Campbell in the Cape Breton Spectator:
Christina Lamey of the Port of Sydney confirmed the discussions for me on Tuesday, but maintained the Port had not yet purchased any property from the rail operator.
But a close look at the Genesee & Wyoming (G&W) invoices released by the provincial government in response to an access to information request earlier this month suggest those discussions may be quite advanced.
The monthly invoices, which cover the period from May 2018 to April 2019, are for services that qualify under the terms of the CBNS Rail Preservation Agreement, which has been in place between G&W and the province since 2017.
Every invoice includes at least one payment, and sometimes more, to McInnes Cooper for “land migration” services and the April 2019 invoice includes a payment to the Halifax-based law firm for professional services related to the “Sale of Lands to Port of Sydney Development.” I can’t tell you how much money has been paid for McInnes Cooper’s services because these amounts have also been redacted under the exemptions listed above.
As with the Examiner, the Cape Breton Spectator is subscriber supported, and so this article is behind the Spectator’s paywall. Click here to purchase a subscription to the Spectator, or click on the photo below to get a joint subscription to both the Spectator and the Examiner.
7. Crane photos
The Nova Scotia government has published photos of our famous crane disaster:
I took this photo from the Breton Street side of the collapse:
It’s just dumb luck that no one was killed.
8. Nail gun
“I felt vindicated. I felt liberated,” said Stacey Dlamini, who was in court Thursday to hear the judge’s decision.
Hynes, who is from Pictou County, was convicted of criminal negligence causing bodily harm and assault with a weapon.
9. Klepto Cop
“An off-duty Halifax Regional Police officer arrested for shoplifting two weeks ago was allegedly wearing a wig and had her service revolver in her purse, The Chronicle Herald has learned,” reports Steve Bruce:
Sources say the officer was Const. Jennifer McPhee, 42, a 17-year member of the force.
McPhee was arrested on the afternoon of Sept. 13 at the Bayers Lake Atlantic Superstore in Halifax.
She was released from custody that night after being given an appearance notice for court.
No public meetings.
CETA Implications Conference (Friday, 9am, University Hall, Macdonald Building) —
a two-day series of panel discussions exploring the implications of the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union. Topics include the regulatory process, labour rights and mobility, trade, procurement, investor-state dispute settlement, environment and more.
More info here.
Beyond the Now: Epistemic Oppression and the ‘Common Sense’ of Mass Incarceration in the US(Friday, 3:30pm, Room 1130, Marion McCain Building) — Kristie Dotson from Michigan State University will talk.
James Barry, Emotion, and the Making of a Modern Self (Friday, 3:30pm, Room 1170, Marion McCain Building) — Danny Sampson from Brock University will talk.
Mount Saint Vincent
George Elliott Clarke (Saturday, 2pm, MSVU Art Gallery) – a presentation of music, readings, and reflections on Africville: A Spirit that Lives On – A Reflection Project. American Sign Language interpretation available by request. More info here.
In the harbour
06:00: ZIM Tarragona, container ship, arrives at Pier 42 from Valencia, Spain
06:30: Ocean Force, ro-ro container ship, arrives at Fairview Cove from Saint-Pierre
11:30: Norwegian Escape, cruise ship with up to 5,218 passengers, arrives at Pier 22 from Saint John, on a seven-day round trip cruise out of New York
11:30: Acadian, oil tanker, arrives at Irving Oil from Portland
16:30: ZIM Tarragona sails for New York
16:30: Ocean Force sails for Saint-Pierre
16:30: Oceanex Sanderling, ro-ro container, sails from Pier 41 for St. John’s
21:30: Norwegian Escape sails for New York
Cruise ships this weekend:
Caribbean Princess with up to 3,756 passengers
Whee. Lots going on.