Fortier & Harper are Insane: Formula 1 in Montreal

[August1991]

Sometimes you've got to spend money to make money. That isn't a radical new concept.

Nor is it a radical idea that spending money just, well, wastes money.

Now then, if you have to raise the money through forced taxation, then chances are your project is not a sound one. This is so painfully obvious that even Mikhail Gorbachev figured it out. Apparently, Michael Fortier, Gerald Tremblay and even Stephen Harper have yet to understand the concept.

We pay taxes nonetheless. I would rather have my tax dollars go to something that boosts the economy rather than pissing around with alleged global warming that is a money drain.

Blueblood (and Marksman) let me make this blindingly clear to you.

If the government takes my money to subsdize project A, then I don't have money to finance project B. Do you think bureaucrats/politicians can invest your money more wisely? If you believe this, then give them a cheque voluntarily.

If the government taxes me $100 and gives it to a scheme that generates "$1500 in economic benefits and spin-offs", then I don't have $100 to spend elsewhere and those other places won't have their "$1500 economic benefits and spinoffs". Which "economic benefits/spinoffs" are better? I have a simple answer: if the government leaves me the money, I at least get the benefit/spinoff of spending it. For the other spinoffs, it's a wash.

----

When lobbyists go to politicians for money, it usually means that no private bank will lend to them. If the politicians say yes to the lobbyists, it's usually an invitation for other lobbyists to do the same. The end result is endless negotiations and corruption.

What has Harper to lose in this? Sadly, nothing - unless he faces a legitimate Liberal opposition.

Edited October 23, 2008 by August1991

[Alta4ever]

Then let the hoteliers, restaurants and broadcasters pay for this advertising.

Look Morris, you might be able to make a case that the city of Montreal should pay for this "advertising scheme", but I fail to see why someone in Chicoutimi, let alone Calgary, should give a cent to this project.

In fact though, as a resident of Montreal, I don't see why I should contribute a penny either. I get nothing in return.

If this is a truly profitable venture and has advertising advantages, then let the beneficiaries pay for it. The extra profits of hotels and restaurants will presumably exceed the higher taxes they'd have to pay. Of course, the hotels/restaurants would object because the project is a crazy scheme that is only viable when financed with "other people's money".

----

This particular scheme really sticks in my throat because Quebec and the city of Montreal have gone "écolo" and are subsidizing all manner of bicycle paths while refusing to fix potholes. In the past campaign, Duceppe and other Quebecers blamed Harper for being "pro-oil corporation" and ignorant of global warming.

And what do three levels of government do? Find ways to take money from Albertan taxpayers to spend it on big cars with big motors driving around in circles in Montreal! What is the carbon footprint of a Formula One race if you include the cost of shipping these vehicles and teams to North America?

I didn't mention it in the OP but not only do Quebec/Montreal lose the moral high ground in the "fiscal deficit" debate, they also lose it in the "global warming" debate.

Deficits have nothing to do with this. It would still be a dumb scheme even if the federal government had a massive budget surplus. Governments should not spend other people's money on stupid stuff.

Dobbin, a government is not a business. It shouldn't spend money with an eye to what tax revenues the spending will generate. But let me take that idea and see where it goes. If the government taxes me and gives it to Barney Ecclestone so that American tourists will come to Montreal and eat in restaurants which in turn will pay taxes to local governments.

Why involve Ecclestone and Americans in this? Why not leave the money in my pocket and let me go to the restaurant and have a meal? The government will still get the tax revenue without the circuitous foreign route.

IOW, when the government taxes me, that means I have less to spend and others will pay lower taxes.

If you are going to champion the "economic benefits" of some government scheme, at least have the decent integrity to note the "economic costs" of the taxes collected. In a river, water diverted in one direction just means less water going elsewhere.

As I noted above, that's a horrendously dumb argument.

How did the feds get the money to subsidize this crazy scheme? They taxed me and millions of other Canadians. How much did the Feds lose in GST, gas tax etc because I no longer had the money to buy things?

It seems to me that our governments should not be in the business of subsidizing foreigners directly or through incentives to come eat at our restaurants - certainly not rich foreigners.

----

This thread is enough to despair anyone who believes that the State may some day do the right thing. If someone like Stephen Harper can get involved in the shenagians of Fortier, Tremblay, Eccelstone and Formula One, what chance do we have to ever have a politician with the courage to throw these idiots out of her/his office?

I really loved this post, thank you.

[jdobbin]

Will Americans come if the US is in a recession? I couldn't care less if they come because it isn't.

I didn't say that I thought it was important one way or the other to me. I was figuring on what Harper would say to justify the expense.

My point is that to collect "extra" tax revenues, a government doesn't need to use the circuitous route of taxing me, then subsidizing a rich Englishman so that Americans come to eat in our restaurants and pay taxes. Why not just leave the money in my pocket and let me eat in the restaurants and pay taxes that way?

Because this is about appealing to Quebec.

Edited October 23, 2008 by jdobbin

[William Ashley]

A 30 second ad for the Super bowl which reaches 90 million viwers can cost upwards to 2.6 million US$

Being a venue for the F1 is worth the equivelent of 156 Million US$ in ad costs.

Sounds like a lot of money, why was the government asked to pay for this again? Does it get the network ad revenues? I still am at a loss as to how the government derives a benifit from moving money around for other people, at a loss to the tax payers, can you explain? If there is no direct payback to the government, where is the new money?

[William Ashley]

If it can't be quantified it's fiction.

Entertainment of this sort produces no economic wealth for Canada. Whatever people spend on it would have been spent anyway on some other kind of entertainment.

And if this problem was occuring in Toronto or Winnipeg nobody would care about it but those cities. You certainly wouldn't be seeing federal cabinet ministers running off to beg some foreign billionaire.

Liberals drive more sports cars than conservatives, eh?

[William Ashley]

Then there is the quantifiable.

http://www.thestar.com/Sports/article/513054

Is montreal broke or something? Why don't they just make a deal with the rich dude? How is the GoC involved?

[blueblood]

Nor is it a radical idea that spending money just, well, wastes money.

Now then, if you have to raise the money through forced taxation, then chances are your project is not a sound one. This is so painfully obvious that even Mikhail Gorbachev figured it out. Apparently, Michael Fortier, Gerald Tremblay and even Stephen Harper have yet to understand the concept.

Blueblood (and Marksman) let me make this blindingly clear to you.

If the government takes my money to subsdize project A, then I don't have money to finance project B. Do you think bureaucrats/politicians can invest your money more wisely? If you believe this, then give them a cheque voluntarily.

If the government taxes me $100 and gives it to a scheme that generates "$1500 in economic benefits and spin-offs", then I don't have $100 to spend elsewhere and those other places won't have their "$1500 economic benefits and spinoffs". Which "economic benefits/spinoffs" are better? I have a simple answer: if the government leaves me the money, I at least get the benefit/spinoff of spending it. For the other spinoffs, it's a wash.

----

When lobbyists go to politicians for money, it usually means that no private bank will lend to them. If the politicians say yes to the lobbyists, it's usually an invitation for other lobbyists to do the same. The end result is endless negotiations and corruption.

What has Harper to lose in this? Sadly, nothing - unless he faces a legitimate Liberal opposition.

I am a mandatory shareholder, they take my money by force. I can only hope they invest it somewhat wisely. If they don't, I can cast my vote for somebody else. The Alberta gov't and the feds have spent a substansial amount of money opening up Alberta to oil production, Albertans as a result don't have PST and no deficit/debt at the same time. If my money has to be taken from me in the form of taxes, my vote goes to who spends it on making me safer and boosting the economy which in the end reduces my tax burden in the long run. The thing is the gov't is taking that 100 dollars whether you want it to or not.

If the F1 boosts the economy and generates lots of tax dollars, then have at it. If not then cut the strings.

[August1991]

Because this is about appealing to Quebec.

That sadly is probably Harper's perception of this too.

IOW, Harper is not a truly Canadian PM - he is only a PM for English Canada.

----

I was impressed with Harper before, but now I'm not. This past campaign really changed my opinion of him. Harper was on the cusp of becoming a personality in Quebec, attractive to women and then he suddenly went foreign. Harper apparently doesn't get it.

This Formula One scheme is crass, and ignorant. To be practical, what is the perception? Harper cuts money for Quebec arts but he gives it to Montreal race cars.

[jdobbin]

That sadly is probably Harper's perception of this too.

This Formula One scheme is crass, and ignorant. To be practical, what is the perception? Harper cuts money for Quebec arts but he gives it to Montreal race cars.

And probably generates less revenue and jobs if that was what Harper's justification was for funding the F1 race.

[marksman]

Nor is it a radical idea that spending money just, well, wastes money.

Your response is spending money wastes money? I'll assume that what you typed isn't what you meant to say because saying that spending money equates to wasting money is dumb.

Now then, if you have to raise the money through forced taxation, then chances are your project is not a sound one. This is so painfully obvious that even Mikhail Gorbachev figured it out. Apparently, Michael Fortier, Gerald Tremblay and even Stephen Harper have yet to understand the concept.

More excellent logic. Oil companies have received government money to encourage their development therefore oil production is unsound.

The only thing painfully obvious is that your rhetoric has no basis in reality. Some projects that get government funding are unsound. Others are perfectly reasonable and viable.

Blueblood (and Marksman) let me make this blindingly clear to you.

If the government takes my money to subsdize project A, then I don't have money to finance project B. Do you think bureaucrats/politicians can invest your money more wisely? If you believe this, then give them a cheque voluntarily.

If the government taxes me $100 and gives it to a scheme that generates "$1500 in economic benefits and spin-offs", then I don't have $100 to spend elsewhere and those other places won't have their "$1500 economic benefits and spinoffs". Which "economic benefits/spinoffs" are better? I have a simple answer: if the government leaves me the money, I at least get the benefit/spinoff of spending it. For the other spinoffs, it's a wash.

So the benefit you get is good and the benefit others get is a wash? Nice try but if a $100 benefit is good for you then a $1500 benefit to others is good for them. You'd have to be extremely selfcentred to believe that economic benefits are only good when they apply to you but bad or don't count when they apply to others. The government isn't concerned with ensuring that you and only you get benefits they're looking out for all of Canada.

Of course noone's taking $100 from you. In 2007 the government gave $20million and the race gave benefits of $70million. That's less than $1 from you. What great project were you going to invest in with less than $1?

[blueblood]

Your response is spending money wastes money? I'll assume that what you typed isn't what you meant to say because saying that spending money equates to wasting money is dumb.

More excellent logic. Oil companies have received government money to encourage their development therefore oil production is unsound.

The only thing painfully obvious is that your rhetoric has no basis in reality. Some projects that get government funding are unsound. Others are perfectly reasonable and viable.

So the benefit you get is good and the benefit others get is a wash? Nice try but if a $100 benefit is good for you then a $1500 benefit to others is good for them. You'd have to be extremely selfcentred to believe that economic benefits are only good when they apply to you but bad or don't count when they apply to others. The government isn't concerned with ensuring that you and only you get benefits they're looking out for all of Canada.

Of course noone's taking $100 from you. In 2007 the government gave $20million and the race gave benefits of $70million. That's less than $1 from you. What great project were you going to invest in with less than $1?

If the race gave 70 mill to the gov't, then that is a net savings of 50 mill on taxes. Sounds good to me.

It's like Alberta oil, a little investment and no PST.

[August1991]

What sophistry, Marksman. Sadly, modern government lobbying is based on such.

Of course noone's taking $100 from you. In 2007 the government gave $20million and the race gave benefits of $70million. That's less than $1 from you. What great project were you going to invest in with less than $1?

Where did the government get the $20 million it gave?

It taxed me and other Canadians. IOW, I couldn't spend the money on things that I like - that create "spinoffs and economic benefits" for the Canadian economy.

Instead, the government took the $20 million and spent it on my behalf and created "spinoff and economics benefits" for the Canadian economy.

When the government takes my money, I know one benefit/spinoff that is lost; the benefit to me of the money. The other benefits are a wash so on balance, the whole project is a loss.

[Please don't misunderstand me. I'm not against taxes or governments. I just strongly object to taxes which mean that rich foreigners get my money. Think: Harper objected to subsidized galas and then he sends a Senator/cabinet minister off to London to subsidize a foreign billionaire. Harper is a lunatic.]

-----

Marksman, if you claim that a government subsidy of $20 million creates benefits of $70 million, at least have the honesty to accept that $20 million in taxes destroys $70 millions in benefits. Frankly though, I happen to think that the subsidy usually creates smaller benefits than the taxes destroy.

Now then, if I were Barney Ecclestone, a hotel/restaurant owner in Montreal or even a fan of Formula One racing, I would probably have a different opinion of this calculation. So, I'm not surprised that they support this nonsense. I am only surprised that people like Stephen Harper and you are sucked in by such sophistries.

[marksman]

What sophistry, Marksman. Sadly, modern government lobbying is based on such.

Where did the government get the $20 million it gave?

It taxed me and other Canadians. IOW, I couldn't spend the money on things that I like - that create "spinoffs and economic benefits" for the Canadian economy.

Instead, the government took the $20 million and spent it on my behalf and created "spinoff and economics benefits" for the Canadian economy.

You're right the government got that $20million from Canadian taxpayers. IOW you could never have spent that money on anything because it isn't yours. You could only spend your share of that money which is maybe $1. The F1 takes place over 1 weekend. So what do you plan on spending that $1 on that generates that much economic activity over the course of 2 or 3 days? And if $1 makes the difference between you generating that activity and you doing nothing then I'll gladly give you that $1. I won't hold my breath for your business plan.

The only organization that could spend that money as a $20million total is the Canadian government. And you're complaining that they used it to generate $70million worth of economic activity over the course of 1 weekend. The government found a way to increase a sum of money by 350% in 1 weekend and give it to a whole bunch of people but you'd rather have a sum of money that can't even buy you a cup of coffee.

When the government takes my money, I know one benefit/spinoff that is lost; the benefit to me of the money. The other benefits are a wash so on balance, the whole project is a loss.

How can you possibly justify that argument? Just because you don't receive direct economic benefit that doesn't mean there is no economic benefit to the country. Using your logic I can say that I don't get a single cent from oil production anywhere in Canada therefore all oil projects are losses.

On 2nd thought this is a great way to argue. From now on anything I don't like I'm just going to call it a wash therefore it doesn't exist.

Marksman, if you claim that a government subsidy of $20 million creates benefits of $70 million, at least have the honesty to accept that $20 million in taxes destroys $70 millions in benefits. Frankly though, I happen to think that the subsidy usually creates smaller benefits than the taxes destroy.

If I admitted that it wouldn't be honesty it'd be insanity. You presume that any $20million block of cash can be turned into $70million of economic activity. In 1 weekend. By anyone. Which is crazy. You haven't been lending money to people for mortgages in the US recently have you?

It's true that you lose the benefit of your contribution to that $20million. But that doesn't mean that there's a loss of $70million from somewhere. Too much taxes can have a detrimental effect on a country's economy but believe it or not there are some cases where the government can spend a block of money more efficiently than if that money was left divided up between taxpayers. This is 1 example.

Now then, if I were Barney Ecclestone, a hotel/restaurant owner in Montreal or even a fan of Formula One racing, I would probably have a different opinion of this calculation. So, I'm not surprised that they support this nonsense. I am only surprised that people like Stephen Harper and you are sucked in by such sophistries.

The only reason you're surprised is because you're apparently unable to see that creating benefits even if they don't directly help you is still a good thing. Luckily others aren't as motivated by selfinterest.

[M.Dancer]

Sounds like a lot of money, why was the government asked to pay for this again? Does it get the network ad revenues? I still am at a loss as to how the government derives a benifit from moving money around for other people, at a loss to the tax payers, can you explain? If there is no direct payback to the government, where is the new money?

You misunderstand....the valuie is worth those millions...thats what it would cost if they bought ads to reasch those numbers instead of being a venue. In comparison being a venue is a bargaiin.

Why is it hard to grasp how governments benefit from showcasing a city? Think...

[White Doors]

Zoom Zoom

[M.Dancer]

Then let the hoteliers, restaurants and broadcasters pay for this advertising.

Look Morris, you might be able to make a case that the city of Montreal should pay for this "advertising scheme", but I fail to see why someone in Chicoutimi, let alone Calgary, should give a cent to this project.

Then I suppose you feel we should abolish the federal Tourism Commision?

http://www.corporate.canada.travel/en/ca/i...ourism.com/home

Because all of our tax dollars goes to promoting Canada, and specifically somewhere is Canada. As to whether you benefit, the answer is yes. In the 1st quarter of 2008 $2.5 billion was spent by foreign visitors to Canada helping employ 623,000 Canadians. The economic impact of an event the size of the F1 inevitably is felt all across the country to varrying degrees. Someone will no doubt improve their business to meet the needs by buying something to do that...it might be from Trois Rivieres or it might be from Medicine hat...

Now is it just Montreal benefiting from the largesse of ottawa that irks you or are you equally umimpressed with Ottawa promoting other tourist destinations and venues?

[Argus]

Of course noone's taking $100 from you. In 2007 the government gave $20million and the race gave benefits of $70million. That's less than $1 from you. What great project were you going to invest in with less than $1?

And how much of that alleged $70 million went back to the federal government? Not as much as the subisidy, I'm guessing. And how much of that $70 million is realistic and verifiable as opposed to a figment of the writer's imagination? Likely a lot less than $70 million.

[M.Dancer]

Deficits have nothing to do with this. It would still be a dumb scheme even if the federal government had a massive budget surplus. Governments should not spend other people's money on stupid stuff.

You are right. The government should not spend money on stupid stuff.

Government Revenues

In 2006, tourism represented 3.9% of total government revenues, generating $19.4 billion1 of revenue for all three levels of government in Canada.

Federal government: $9.1 billion

Provincial/Territorial government: $9.3 billion

Municipal government: $1.1 billion

http://www.corporate.canada.travel/en/ca/r...mance/2006.html

[M.Dancer]

If the F1 boosts the economy and generates lots of tax dollars, then have at it. If not then cut the strings.

Exactly. The tax revenues and asorted benefits must be greater than the investment.

[marksman]

And how much of that alleged $70 million went back to the federal government? Not as much as the subisidy, I'm guessing. And how much of that $70 million is realistic and verifiable as opposed to a figment of the writer's imagination? Likely a lot less than $70 million.

If we want to play guessing games then figure the federal government gets about half of its $20million back. That's a reasonable guess based on tax rates. If you've got another figure other than $70million show us. Otherwise your speculation is just a figment of your imagination.

Of course even if it's half that figure it's still a good investment for the government.

Did you have plans to do better with your $1 share of that money? Remember aside from the direct economic boost over that 1 weekend it also advertises Canada to the world so we can't ignore the indirect benefits of the publicity either.

[guyser]

With such nonsensical reasoning, why am I not surprised that you want other people's money to subsidize your preferred hobby.

How many "millions of dollars" were not brought in in other industries because of the taxes raised to support your particular pet project?

Guyser, at least have integrity when you champion your cause. When the government gives you one dollar for your project (that brings in millions), then there is one less dollar for my project (that might have brought in millions).

August, what the ??

I never said I wanted other peoples money to subsidize this race. The race is put on by a private company that pays pretty much the whole freight. Yes there is some local money donated, but the return is huge for the investment.

The fees paid by competitors and advertisers is what funds the races. The fees to race can be up to $300 for a one day race. The police, the barricades, the clean up are all paid by the event organizer.

My preferred hobby ensured plenty of people had a good start to the fall tourism season. Whats wrong with that.

I dont understand this "taxes raised" bent you have been on. No taxes were raised , for this nor for the F1 race. Of course maybe some other underwhelming gig was shorted but thats hardly a reason to worry.

As for how many other millions were not brought in from industries being shorted, I can say with certainty none.

I have the integrity to say one dollar to me is a dollar lost elsewhere, but if the return on my "pet project" is $10 on the dollar, and yours is $5 on the dollar, well, who should get the funds first?

I have to say, I find your reasoning against sponsorship really confusing. Value for money is what it comes down to. Spend it to make it.

[August1991]

Then I suppose you feel we should abolish the federal Tourism Commision?

http://www.corporate.canada.travel/en/ca/i...ourism.com/home

Because all of our tax dollars goes to promoting Canada, and specifically somewhere is Canada. As to whether you benefit, the answer is yes. In the 1st quarter of 2008 $2.5 billion was spent by foreign visitors to Canada helping employ 623,000 Canadians. The economic impact of an event the size of the F1 inevitably is felt all across the country to varrying degrees. Someone will no doubt improve their business to meet the needs by buying something to do that...it might be from Trois Rivieres or it might be from Medicine hat...

Now is it just Montreal benefiting from the largesse of ottawa that irks you or are you equally umimpressed with Ottawa promoting other tourist destinations and venues?

Yes, Morris, I tend to think that Tourism Canada (or whatever it's called) should be abolished.

What good does it serve? (BTW, I worked for the likes of Tourism Canada abroad and I found its efforts largely wasted.)

I won't use the obvious argument that government bureaucrats are notoriously bad at making business decisions and so they are far worse at making marketing decisions. Even if government advertising was a "good thing", I wouldn't entrust bureaucrats with control over it.

I won't even use the other obvious argument that such advertising schemes lead to obvious political corruption. When does a party in power see "advertising for Canada" become "advertising for may political party"? There is the State, and there is the government of the day. And then there is the country. Letting the State advertise for Canada is an invitation for the government to advertise for itself.

Instead, Morris, I'll use the argument that if some Canadians benefit from tourism, they can pay for advertising themselves. If I have a service that I want to offer, I have to advertise my wares.

Should the government subsidize all advertising? Is that what you mean?

I never said I wanted other peoples money to subsidize this race. The race is put on by a private company that pays pretty much the whole freight. Yes there is some local money donated, but the return is huge for the investment.

Donated? If the money is donated then I truly don't object. I'm even open to the idea of a local council kicking in some money - although I have to admit to suspicion about such things.

IMV, governments should primarily take care of widows and orphans, and it should install traffic lights and hire cops. Governments are a useful servant but a terrible master.

----

Look, I can possibly understand why a local city government hands out free city maps at the local international airport. But this is far from giving millions of taxpayer dollars to a rich foreigner so that we can have big cars racing around in circles. Between the cars and the maps, I'd choose the maps.

If Quebec wants to develop a reputation for being a clean, environmentally friendly society, why pay to have a polluting sport come here? Does Harper want to get involved in this? Why?

OTOH, I can understand why a few resto/hotel owners would love to have access to other people's money so that they can make a few bucks for themselves. This is the big danger of the State. It offers a lever for any lobbyist to dip into other people's wallets. The words "spin-offs", "economic benefits" and "job creation" were invented to justify their theft.

A government winds up spending $30 million so that a select few lobbyists receive $10 million. IOW, we collect imperceptibly $1 from each Canadian, give $10 million to a select few (including foreigners) and the other $20 million just gets lost.

Sad.

[M.Dancer]

Yes, Morris, I tend to think that Tourism Canada (or whatever it's called) should be abolished.

What good does it serve? (BTW, I worked for the likes of Tourism Canada abroad and I found its efforts largely wasted.)

I won't use the obvious argument that government bureaucrats are notoriously bad at making business decisions and so they are far worse at making marketing decisions. Even if government advertising was a "good thing", I wouldn't entrust bureaucrats with control over it.

I won't even use the other obvious argument that such advertising schemes lead to obvious political corruption. When does a party in power see "advertising for Canada" become "advertising for may political party"? There is the State, and there is the government of the day. And then there is the country. Letting the State advertise for Canada is an invitation for the government to advertise for itself.

Instead, Morris, I'll use the argument that if some Canadians benefit from tourism, they can pay for advertising themselves. If I have a service that I want to offer, I have to advertise my wares.

I guess it was decades ao when you worked for them.

1) Bureaucrats. They might oversee the budget but the marketing decisions tend to come from industry professionals (marketing, media etc) on contract to the commision.

2) Economy of scale. The commision often runs special features in media and invites industry to particpate with them. Little hotel on the corner can buy their ad for $10,000 by themselves....or they can partner with the commission and pay $5000. becuase the commission has already bought at a huge volume discount and passes the savings on to the little guys.

But who will buy the as for the nation? The little guy? "When coming to Canada for the summer, Stay at rogers?

[marksman]

A government winds up spending $30 million so that a select few lobbyists receive $10 million. IOW, we collect imperceptibly $1 from each Canadian, give $10 million to a select few (including foreigners) and the other $20 million just gets lost.

Sad.

Are we making up numbers now? How exactly do you figure that 2/3 of any investment disappears? How is it that you continue to think promoting an event that's guaranteed to give economic and public relations benefits is something the government shouldn't do? You keep ignoring this by saying that money gets lost or that the project is a wash.

[nbguyca]

It always amazes me that some people keep their heads buried in the sand and fail to see the big picture.