EDITORS NOTE: This op-ed appears in today's edition of the Edmonton Journal.
This week a group of prominent Calgary business leaders gathered at the Chamber of Commerce to pitch their idea on holding a plebiscite to hike Calgary’s GST by one-point to 6 per cent. The additional tax, which would generate approximately $300 million per year, would be used to build new recreation and cultural facilities. However, as some people are proving, higher taxes and government control is not the only option.
The request for higher taxes for infrastructure in Calgary came just days after an important ribbon cutting some 300 kilometers north, in Edmonton. Ribbons were cut as part of the official grand opening of a new 236,000 square foot, multi-use gymnasium and recreation centre in the south-west of the city. The three huge gymnasiums can be converted into 12 full-sized basketball courts or 25 volleyball courts, making it the largest hardwood installation in North America.
This state-of-the-art new facility, known as the GO Centre, was not built by the City of Edmonton after hiking and collecting millions in new taxes, but rather headed up by Edmonton businessman David Dorward.
Over most of the past decade David has been scheming, planning and telling anyone who will listen about his vision for a large multi-use facility. He felt strongly that there was an infrastructure deficit in Edmonton for gymnasium space. However, David didn't just go to city council and tell them that they needed to pony up the cash and build this facility, nor did he pitch higher taxes or more taxing powers to pay for it. He went out and put together a team of people passionate about the project and made it happen as a P3 (public-private partnership).
His committee convinced the federal government to kick in $14.8 million, the province $10 million and the city a mere $9 million. He then found a partner in the University of Alberta, which donated five acres of prime land next to a LRT station. For their donation, which Dorward pegs at a minimum of $15 million (largely in-kind), the university gets the facility during the day and for varsity games in the evening. The facility is dedicated to 90 per cent community use after 4pm each day.
But it wasn’t just taxpayers who helped foot the bill. The GO Centre also registered as a charity and found over $4 million in private donations from individuals, businesses and community partners. The largest, a $2 million donation from Edmonton businessman Bruce Saville.
In the end, Dorward and his crew of dedicated volunteers built the recreation centre for a meagre $38 million. Even better, it came in on-time and on-budget.
Compare this to the recently opened Terwillegar Recreation Centre in Edmonton. This 150,000 square foot (excluding the arena) City of Edmonton facility saw costs jump from $32 million, to $45 million, to $58 million, to $90 million, to $106 million to at least $160 million when finally built. And there are dozens of similar examples from around the country. In truth, it’s shamefully rare for a large-scale government-run infrastructure project be completed without delays or overruns.
David credits their on-time, on-budget result to his board of volunteers who created a nimble, low-red tape environment where they gave builders and designers the maximum budget and asked what could be built for that price. When told then had to add this perk or make that change to the design, they encouraged the person to join the board and help fundraise the extra money needed for the additional amenity.
Under the laughably coined “penny tax” proposal in Calgary, that city would collect roughly $300 million in tax dollars and then be responsible for managing the building of cultural and recreational facilities across the city. Of course, regional fairness and council politics would come into play and it’s highly doubtful they would be able to get as good as a price or come in on-time and on-budget with their projects like Dorward did with the GO Centre.
The well-intentioned Calgary business leaders who are championing the GST hike would better serve the city if they followed Dorward’s lead. If they got behind a project, created a foundation or charity and ran it like their own businesses, taxpayers would save money, projects would get built on-time and on-budget and the ‘recreational and cultural infrastructure gap’ with which they are concerned, would soon be spanned.
Alberta municipalities don’t need more GST, they need more GO.
Scott Hennig
Alberta Director
