Note: Words within double parenthesis [[ ]] will be excluded during the presentation

Ottawa City Council, Special Meeting, Thursday Nov 12, 2009

Comments on Lansdowne Park Redevelopment
By Mr. Michael Tiger,

Mr. Mayor, Councillors

Thank you for this opportunity to speak with you today and for this public consultation.
Ottawa is a wonderful, liveable city. We do more things right than wrong and you and
your predecessor Councils have left many imprints. Lansdowne is one such imprint that
has aroused far more emotion than I ever anticipated. I say that as a former negotiator in
the Canada-US Free Trade Agreement and in the NAFTA (North American Free Trade
Negotiations) where passions ran very high.

We’re in the midst of a family quarrel which revolves around an inheritance of land,
buildings, visions of the future, lifestyles, sports and entertainment, [architecture,]
heritage and, lest we forget, money. All we need is Dr Phil and Oprah to sort us out – if
we’ll allow foreigners into our midst.- or maybe Don Cherry and Rex Murphy (if we
want to stick closer to home).

With my background in economics and trade negotiations [[and telecommunications]], I

look at the economic side of issues – in addition to my neighbourhood concerns. Given
that governments generally distort markets, Canada’s trade agreements limit or remove
government meddling in the economy. The agreements work to eliminate trade distorting
subsidies and to ensure open competitive bidding on government contracts, among other
aspects. [[There was strong support for these goals from nearly all Canadian economic
sectors, especially the Ottawa high tech industry and from national bodies, such as the
Canadian Chamber of Commerce or the Canadian Council of Chief Executives, etc.]]

To date, City Council has headed down a pathway which goes in the opposite direction
from these two important trade policies. Recently, when in Washington, PM Harper
raised objections to the discriminatory US Buy America policy that has damaged
Canadian exporters including Ottawa’s high tech sector . Buy America is nothing more
than a national sole source program. Council, in pursuing its own agenda, is signalling
that it’s not part of Team Canada’s trade policies.

As part of the City’s negotiations, Council is poised to offer 10 acres of prime public land
rent free for 30 years to build a shopping mall. This is nothing more than a direct subsidy
[[whose full value remains to be determined]]. It strikes me as aberrant for city council to
subsidize a shopping mall, a Cineplex and a food store as I can think of better uses for tax
dollars.
.
Stadiums are public goods and they are all money losers. If we want a stadium, we should
pay for it through our taxes, as we do for roads, bridges, this City Hall and services. If
Council can establish a $65 tax for green bins and $195 tax for all household disposals,
then Council can set a $25 or $50 tax for a stadium. I see no reason why Council cannot
follow this approach for a stadium at Lansdowne or, preferably, where there is mass
transit. Moreover, Council should obtain provincial and federal funds for the stadium and
lower our municipal tax burden.

Council is trying to avoid a transparent tax scenario for fear of a taxpayer backlash. The
so-called revenue neutral approach simply masks the true cost of the stadium and
transfers some of the costs to others, such as local businesses and residents. The
approach is leading Council into a complicated investment consortium [[one that
combines subsidies, shopping mall rents, highly questionable tax reallocation policies,
offices, hotels and sport team financing]]. The outcome, with its waterfall, has
considerable financial risk, with much borne by the taxpayer.

The proposed tax reallocation to service the $117 million debt is particularly troubling. It
has 75% of the annual $3.8 million in property tax from the new mall allocated to service
the annual ($7.14 million) debt repayment for the stadium. In effect, the mall will only
contribute 25% of its taxes for common municipal services. Will the city only respond
proportionately, i.e., respond to one of every four calls for paramedics or police?
[[Obviously not.]] What the city will do is use its general revenues to provide full
municipal services. In reality, all other taxpayers will pay for, or subsidize indirectly, the
full municipal services provided to the shopping mall. This amounts to yet another
indirect subsidy. [[I expect taxpayers and other developers to demand the same 75% tax
reallocation to projects in their neighbourhoods.]] If the city only needs 25% of the new
mall’s taxes, how about a tax holiday for nearby businesses or residents.

Councillors, I understand your intentions and your desire to limit the impact on the city
treasury. However, this financial deal is wrong for this city. Public goods do not come
free and that there are no free lunches. I’m prepared to pay my share of the costs to build
a stadium and to redevelop Lansdowne. But I am not prepared to subsidize a shopping
mall, a cinema , a food store or a football team and in so doing seriously harm
independent businesses who pay their full property taxes for their municipal services.
.
Economics is known as the dismal science as it’s all about the allocation of scarce
resources. In this instance, it’s far from dismal. Thank you for making this one of the
more interesting case studies I’ve encountered.

I strongly encourage you to vote against this deal as it’s currently structured

Michael Tiger
16 Ralph St,
Ottawa, K1S 4A5

Lansdowne 5 min