NEWS
1. Nova Scotia Power fails to meet renewable power mandate
“With Premier Tim Houston in Hollywood last week, Natural Resources and Renewables minister Tory Rushton was the government’s point man on Nova Scotia Power following a meeting of cabinet ministers last Thursday,” reports Jennifer Henderson:
Rushton told the Halifax Examiner he still hasn’t seen the paperwork Nova Scotia Power has completed on how much electricity the company generated from renewable sources in 2022.
That’s literally a ten-million-dollar question because according to government regulations, if the power company didn’t average 40% from renewables in 2020, 2021, and 2022 it could face a maximum fine of $10 million.
…
Rushton didn’t want to talk about this on Thursday.
“I understand they [Nova Scotia Power] have completed their paperwork but it is not at my table yet,” said Rushton. “Once I have that documentation, I will tell you where we are going to go. But let’s see what those numbers are.”
But the renewable generation figures have been public since Feb. 23, reports Henderson. They were included in a filing to financial regulators required of Nova Scotia. Here they are:
This shows that renewable sources accounted for 32.8% of electricity produced last year.
Henderson says she believes Rushton when he says he hasn’t seen the numbers yet, but I don’t. There’s an entire bureaucracy over at One Government Place dedicated to bird-dogging all things Nova Scotia Power, and it beggars belief that none of the dozens of six-figured analysts, number-crunchers, and regulators charged with the chore have read and processed the financial filing and passed that information on to the minister.
More likely, I think, is that Houston, off to LA, hasn’t decided what to do about Nova Scotia Power’s failure.
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2. Beware CSIS ‘whistleblowers’
“For me, the most intriguing aspect of the current federal foofaraw over allegations that the Chinese government has been attempting to meddle in… well, everything everywhere, is not that they are,” writes Stephen Kimber:
That’s what superpowers do with their super powers.
…
Don’t get me wrong. We need to investigate — in as public a way as possible — what the Chinese did (they did) and how, the role, if any, Canadians played in helping them do it, and whether the prime minister ignored warnings of this interference for his own political benefit, and what we can do to make it more difficult for any outsider to influence elections in the future, and, and …
But we need to be cautious too.
Our intelligence services, who jealously guard their right to do whatever they do in secret, are not without their own agendas.
Click here to read “Beware CSIS ‘whistleblowers’ bearing scoops.”
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3. Now begins the Yarmouth ferry bullshittery
Jennifer Henderson reports:
After disappointing ridership numbers last summer and a budget of approximately $17 million, Premier Tim Houston promised last fall the government would undertake a cost-benefit analysis of the Yarmouth-Bar Harbor ferry.
That still has yet to happen.
Apparently the Tourism Industry Association of Nova Scotia (TIANS) as well as municipalities on the South Shore and along southwest Nova Scotia have all submitted suggestions for what the scope of work should include.
Transportation and Public Works Minister Kim Masland said a Request for Proposals will be issued within the next few months and what is now being touted as an “economic impact analysis” will be submitted to the provincial government “at the end of 2023 or early 2024,” according to Masland.
“There has never been an economic impact study done on this service,” said Masland. “And we will take the time to make sure it is right and we consider all the stakeholders involved. We need to make sure as a government we are providing the best value for taxpayer dollars.”
Last summer was the first time in three years Bay Ferries was able to operate the ferry. Renovations to a terminal in Bar Harbor and COVID restrictions had kept the boat off the water.
Sigh. So now begins the economic impact assessment bullshittery.
There are so many problems with economic impact studies that it’s hard to know where to begin, but let me outline a few:
1. Non-critical analysis. The study of anything should begin with a position of skepticism: does what is being claimed reflect a real assessment of the world, or is the context so distorted by prejudices that it’s impossible to end up with anything that resembles an objective assessment?
The fact that self-interested groups — the tourism companies and municipalities — are attempting to define the scope of work suggests an industry-favourable conclusion will be baked into the analysis.
2. Non-critical analyser. “It is difficult to get a man to understand something, when his salary depends on his not understanding it,” wrote Upton Sinclair, and this presents the ethical problem posed by the companies that are in the economic impact analysis business.
Put simply: they are often hired by the self-interested groups that desire a study result that places their project in a favourable light. But if they keep coming back with economic impact studies that show the studied project will not produce the desired results, who’s going to hire them in the future?
I’m reminded of the role credit-rating agencies played in the financial collapse of 2008. They knew the collateralized loans that were bundled together by banks and sold as investment vehicles were shit, but calling the investment vehicles shit would lead to lost sales of their services to the banks. So instead, the rating agencies changed the criteria for assessing the investment vehicles, and voilà!, a turd was polished into gold.
In terms of economic impact assessments, I’m not aware of a single company — not one — that was hired by the project backer and produced a negative view of the project’s economic impact.
Recall that KPMG produced an analysis of the proposed Halifax Convention Centre based on expected convention attendance figures provided by Trade Centre Limited and came up with an economic impact result that was lower than that promised by TCL. Yikes! But no matter: TCL simply gave KPMG new attendance figures (apparently, simply created out of whole cloth) double the original figures, and had KPMG run the analysis a second time. Unsurprisingly, the second analysis came up with an economic impact double the first, and TCL used the second analysis to promote its project. KPMG never questioned the second set of attendance figures, nor called attention to the discrepancy. KPMG still has a steady trade in the economic impact analyses business.
There are examples of independent analysts producing contrary economic impact analyses — Bobby McMahon’s shredding of Halifax’s Commonwealth Games proposal comes to mind, as do lots of academic studies of sports stadiums and Olympics.
But with the industry groups involved in setting the scope of the economic impact analysis of the ferry study, it’s extremely doubtful that whoever does the analysis will be independent of profit motives.
3. Over-reliance on ‘multipliers.’ All economic impact analyses in Canada rely on provincial and national ‘multipliers’ provided by Stats Canada, which explains that:
The input-output multipliers are derived from the supply and use tables. They are used to assess the effects on the economy of an exogenous change in final demand for the output of a given industry. They provide a measure of the interdependence between an industry and the rest of the economy.
The national and provincial multipliers show the direct, indirect, and induced effects on gross output, the detailed components of GDP, jobs, and imports. Like the supply and use tables, the multipliers are presented at four levels of aggregation: Detail level (236 industries), Link-1997 level (187 industries), Link-1961 level (111 industries) and Summary level (35 industries).
In plain language, this means if a conventioneer comes to Halifax for the International Hair Restoration Industry convention, and drops 50 bucks for a burger and beer at Five Guys, then we know that the $8 tip the server gets will be spent by the server on rent, and the landlord will then hire somebody to cut the grass, while the other $42 goes to whoever owns the Five Guys franchise, and they’ll spend it on Acme Processed Foods to deliver product, and Acme will spend it to pay the driver, who pays their own rent, and so on. And theoretically, if you can track every dollar spent, you can calculate how much money is “recirculated” in the community.
And so we get amazingly specific economic impact statements on the order of: a single football game in Wolfville in 2021 had $12.7 million in economic impacts, “$9.1 million in direct expenditures were made due to the event, supporting $3.8 million in wages and salaries. That led to a total economic impact of $12.7 million, with $11.8 million coming in the Halifax area alone.”
Sports organizations like Sports Canada and backers of stadiums and Commonwealth Games are notorious for such implausibly exacting claims, but they’re not alone — I’ve seen them come from arts supporters, transit backers, and even churches.
Problem is, economists are quite skeptical of the large claims of impacts caused by multipliers. And you’ll find that skepticism expressed in working papers to the World Bank, from directors at the US Federal Reserve Bank, and widely in academia.
Anyone with basic math skills could conduct an economic impact assessment by uncritically accepting inputs from the backer organization and running them through the Stats Canada multiplier formulas to get exacting outputs, but it’s all bullshit.
To do this honestly, you’d have to first assess the economic optimism or pessimism of each and every citizen and company who touches the supposed multiplied money — do I spend my 50 bucks from the football game at Five Guys or do I stash it under a mattress for a rainy day? And then you’ve have to track how in particular the money is spent, if it’s spent — do I spend my 50 bucks at Charlies, where more of it is likely to be spent again in the community; or do I go to Five Guys, where a bigger portion of it will go to pay the local outlet’s franchise fees; or do I buy a tank of gas, and it all goes to ExxonMobil shareholders via Wall Street?
The bottom line is: if someone gives you an exact economic impact figure, know that they are completely full of shit.
4. Lack of comparisons. Another big problem with economic impact analyses is they act in isolation.
Sure, spend $1 gazillion dollars on a stadium, and people will go to the stadium and buy $12 beers and shitty made-by-Indonesian-slaves merch, and run that through the multipliers and you’ll find there was $3.2 gazillion dollars in economic impact.
But what aren’t the people spending the money on? In order to afford all those $12 beers and shitty made-by-Indonesian-slaves merch, they’ll have to cut down on the money they’re already spending on getting sloppy drunk at The Dome and buying delicious Montreal Style Bagels on Wyse Road. And nobody’s calculating those lost sales or the economic impact from them — it’s entirely possible that the positive economic impact of $3.2 gazillion from the stadium is offset by a $4.3 gazillion negative economic impact from the loss of people getting sloppy drunk at The Dome and buying delicious Montreal Style Bagels on Wyse Road. So despite the fancy economic impact analysis, the stadium leaves us worse off economically, not better.
Ah, but Bousquet: the impact of the ferry is that Americans are bringing in money that isn’t here in the first place! There’s no potential loss!
But that’s not right, either. The ferry goes two ways, and we’d have to consider the loss sales in Nova Scotia as Nova Scotian residents take their money to the United States and spend it there instead. Will that be calculated into the economic impact analysis?
And while American tourists coming to Nova Scotia might spend their money at certain tourist businesses, the Nova Scotians going to the United States are not spending their money at other types of businesses, say the local supermarket or hiring someone to build a shed. There are pluses and minuses, but they affect different people, and you somehow have to make some qualitative distinctions between them: it’s OK that Joe the Handyman loses the shed-building gig because the Happy Travellers Motel gets two extra room sales.
Besides the potential losses, what about comparing the proposed project to other proposed projects? What if instead of a ferry, which results in a certain set of economic impacts that favours some people (the tourist operators) a lot but others not so much, we spent the money on, say, providing free high-speed internet for everyone on the South Shore, so they could start and maintain their own businesses, or attend online classes?
I’m not exactly kidding when I say a helicopter drop could have more economic impact than the same money being spent on the ferry. That’s because no one knows: no one is looking at the economic impact of other uses of the same limited funds.
Having said all that, I’ll concede a point: there are better and worse ways of conducting an economic impact analysis. You could have it conducted by a truly independent analyst who doesn’t stand to profit from a pre-ordained result, who includes confidence levels and range of outputs in their report, and who studies the comparative impacts of spending the money in other ways or not at all.
Given that self-interested actors are already gaming the system, however, I seriously doubt this is what we’ll get.
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4. Deforestation, Inc
A note: The next instalment in Joan Baxter’s Deforestation, Inc series was to be published yesterday, but due to unrelated delays in publication of one of our ICIJ partner’s articles, we’re holding publication until Wednesday. This has nothing to do with Baxter’s article, but we’ve included links to the other article, and we previously agreed not to publish until that comes out.
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5. Cyclesmith
“Three former employees of Cyclesmith, all women, say they experienced a sexist culture, unpaid training, and overly critical feedback of their work by management at the Halifax bike shop,” reports Suzanne Rent:
Hannah Estabrook, Antonia Chircop, and Arena Thomson Alamino first shared their stories with Lisa Cameron on behalf of the Halifax Workers’ Action Centre in an article that was published in Rank and File on Feb. 21.
The Halifax Examiner spoke with Estabrook, Chircop, and Thomson Alamino over the past week, as well as Andrew Feenstra, owner of Cyclesmith.
Click here to read “Former employees of Cyclesmith allege sexist treatment, unpaid training.”
There’s more here than I can comment on fairly this morning, so read the whole article.
I will say however, that Rent has done an exemplary job of both tracking the employees’ allegations and getting Feenstra’s response. There are some important conversations that need to happen.
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6. Property taxes
“If Halifax regional councillors make all of their proposed changes to the budget, the average property owner will be looking at a 6.2% increase to their tax bill later this year,” reports Zane Woodford:
For the residential tax rate, that actually means a 4% decrease. That’s because the rise in assessment values for 2023-2024, sometimes called the lift, is so high that HRM can collect more revenue with a lower tax rate.
…
[T]he increase to the average tax bill would be $133.87. That bill is based on the average residential property assessment of $301,100, up 10.7% over last year.
For the average commercial property, the 6.2% increase would be an extra $2,835.10. The commercial rate would be $3.045 per $100 of assessed value, down about 2% from $3.105.
Halifax councillors have been benefiting from a soaring real estate market for many years, which brought in increased revenues from both higher assessments of new buildings and large rentals, as well as from the deed transfer tax.
When, as is inevitable, the real estate market crashes, there will be some tough decisions to be made concerning the municipal budget.
A crashing real estate market may not translate into more affordable housing. In fact, without an infusion of government spending to construct new non-market housing, a weak market will result in less new construction, resulting in still-higher rents over the next cycle.
This can’t go on forever.
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Government
City
Today
Special Events Advisory Committee (Monday, 9:30am, City Hall) — agenda
Investment Policy Advisory Committee (Monday, 1pm, online) — agenda
Tomorrow
Halifax Regional Council (Tuesday, 10am, City Hall, and online) — agenda
Province
No meetings
On campus
Dalhousie
Tomorrow
Recording Production Workshop with Erin Costelo (Tuesday, 10am, Strug Concert Hall) — singer-songwriter students from Dalhousie’s Fountain School of Performing Arts and Nova Scotia Community College will present their work to artist, songwriter, and producer Erin Costelo.
Saint Mary’s
Tomorrow
Empire and Emancipation: Scottish and Irish Catholics at the Atlantic Fringe, 1780–1850 (Tuesday, 12pm, Patrick Power Library Classroom) — Karly Kehoe will discuss her book; info and RSVP here.
In the harbour
Halifax
06:00: ZIM Monaco, container ship, arrives at Pier 42 from Valencia, Spain
11:00: Acadian, oil tanker, arrives at Irving Oil from Saint John
13:30: Lagrafoss, container ship, arrives at Pier 42 from Portland
16:30: ZIM Monaco sails for New York
23:45: Lagrafoss sails for Reykjavik, Iceland
Cape Breton
12:00: AlgoScotia, oil tanker, arrives at Government Wharf (Sydney) from Corner Brook
13:00: Boxer, oil tanker, sails from EverWind for sea
14:00: Alpine Liberty, oil tanker, arrives at EverWind from Puerto Galvin, Argentina
16:00: Shelia Ann, bulker, sails from Aulds Cove quarry for sea
16:00: CSL Kajika, bulker, moves from Anchorage C (Chedabucto Bay) to Aulds Cove quarry
Footnotes
I had a long and exhausting weekend, but slept 11 hours last night. Yah, me.
We don’t need any economic impact studies ever. It’s safe to assume that any of these expensive, but worth it in the long run scams are just that – scams. Someone makes a lot of money, but it won’t be the province or the hard working people that love Nova Scotia and call it home. These things always cost us way more than they generate in possitive economic impact. Once we come to that realization we will all be better off and it’s just more reasonable to expect to generate negative economic impact.
Excellent piece on the inadequacies of many cost-benefit analyses, but I think we need to be cautious about throwing the baby out with the bath water. “Some” analysis (which can at least be examined and criticized) is usually better than “no” analysis. Over my years working in government, I saw too many projects touted by proponents with little or no data to support their claims. Too often, it was just hand waving and vague statements about “economic opportunities” and “job creation”. What’s needed is a more robust and neutral way of conducting sound economic policy analysis – preferably within government so it’s clear who we can hold to account when they do a bad job of it.
Really good article on economic spinoffs by Jennifer Henderson. Thanks.
Recently checked the cost of the ferry from Yarmouth to Bar Harbor – two arms and a leg
Jocelyne Marchand
TIM .. what would the economic impact be .. of paying everybody ( 100% ) everybody living in the ” tri-county ‘ $350.00 each year for the next three years
I live relatively close to both the Digby and Yarmouth ferries and I’ve done the math in terms of time (driving vs time on the ferry and the logistics of working around limited the ferry schedules) and money paid (ferry fees vs gas) and I’ve yet to find a case where it would make financial or logical sense, excepting the case where I would be going by foot traffic only to St. John or Portland.
So all the money input is just subsidizing very high income bracket pleasure traveller? or those getting costs covered by their job?, who have some aversion to a few extra hours driving or an aversion to air travel?…which is a pretty niche group of tourists to throw this many million dollars at with no sufficiently critical eye on the benefits.
Alternate to the helicopter drop we could use the amount of subsidy we’ve been paying per passenger and just have a lottery to American tourists who can then spend that money back to NS tourism businesses without having to burn fuel. The benefits would be far more direct and avoid vast majority of it going to the coffers of the operator and it’s employees and the rental of the ferry from the American Navy Sealift Command. If a destination offered me hundreds of dollars of spending money for my trip I’d certainly consider booking a ticket. it sounds logistically complicated but is the fiasco of the current arrangement any less complicated?
Great work as usual helping us sort through and better try to understand the ‘bullshittery’ of this Ferry fiasco
Yes, that was great. We seem to be fed this economic impact garbage all the time.