January 26, 2011

Canadian "P3" sports-subsidy plan won't die

The issue of Canadian federal subsidies for sports facilities just won't die, no matter how many times PM Stephen Harper tries to stick a stake in it. The latest gambit involves P3, the government development fund for public-private projects that was previously floated as a funding source for a Saskatchewan Roughriders stadium, notwithstanding the fact that it's explicitly forbidden from being used for private sports facilities.

Still, Canadian Finance Minister Jim Flaherty said last week that P3 "will see if there’s a financing model that could be used for stadiums or other arenas." This immediately led to headlines like "Government plans to spend $1-billion on Canadian arenas, stadiums," which led to further headlines like Arena funding trial balloon whacked like a pinata." As Andrew Mayeda writes at Postmedia News, using P3 for pro sports wouldn't be just a minor policy change:

According to a previously "secret" memo prepared by the Department of Finance, federal funding would be an "extremely rare" exception to the government's sports-funding practice, which has tended to focus on amateur, rather than professional, sports facilities. When that pattern has been broken, it has generally been to fund facilities associated with a big amateur event, such as the Commonwealth Games.

In the story I wrote about the memo, I didn't get a chance to mention a group of tables put together by Finance officials for the minister. They lay out the construction costs and funding arrangements, if any, for the arenas that host the NHL's six Canadian teams: the Montreal Canadiens, Ottawa Senators, Toronto Maple Leafs, Calgary Flames, Edmonton Oilers and Vancouver Canucks. Of those teams, only Ottawa received any federal money to build an arena, and even then, it was a relatively small amount. The Senators received $6 million to build the Palladium (now the Scotiabank Place). Ironically, money for a Quebec City arena would come as Canadian teams benefit from a strong Canadian dollar.

Finance officials are also keenly aware of the potential domino effects of federal support for Quebec City. The Finance memo also includes a chart listing the stadiums that host Canadian Football League teams, as well as how much federal funding they received. The chart notes that Regina has asked for slightly more than $100 million from PPP Canada, a $1.2-billion fund created by the Conservatives to bankroll public-private partnerships. The fund is one possible option the Conservatives could use to finance the Quebec City rink.

Mayeda further notes that the last time Canada floated the idea of federal subsidies for sports teams, it didn't go over so well. If Flaherty was attempting to fly under radar with this one, it looks like he missed badly.