Economists question 2021 Francophonie Games spinoff figures

Two Moncton economists question the benefits of spending up to $130 million to host the 2021 Francophonie Games in Dieppe and Moncton, with one saying the spinoffs are not enough to justify the spending.

The organizing committee of the games says the event could generate $148 million in economic spinoffs in New Brunswick.

The games, held over 10 days in July and August 2021, are expected to draw more than 4,000 athletes and artists to the host cities. An earlier federal estimate put the number at 3,000.

The original cost projection was $17 million, but that number has exploded to $130 million now that a business plan has estimated all of the expenses associated with holding the games.

"From an economic development perspective, this is not necessarily money that's well spent," said Pierre-Marcel Desjardins, an economist at the University of Moncton. 

Desjardins questions the planning put into the original $17-million hosting estimate. 

"Either the initial submission was rushed and people didn't have the time required to go through it, or we seriously missed something and that would be sad," Desjardins said. "When you organize an international event, your reputation is on the line.

"This isn't cost overrun, it is fumbling the preparation, and that is something different. It's surprising and disappointing."

Spending boosts spinoffs

The event, based on the lower budget, was estimated by the province to generate $25 million in economic spinoffs. 

Éric Mathieu Doucet, the president of the games organizing committee's board of directors, said Monday that the increase reflected the jump in estimated spending to host the event. 

The organizers released figures suggesting the games would result in $165 million in economic spinoffs in Canada. That  includes an estimated $132 million in spinoffs in Dieppe and Moncton and $16 million in the rest of the province. 

The province would receive an estimated $11.5 million in tax revenue. 

The organizers estimate 743 direct and indirect jobs will be created as part of hosting the event. While the bid originally was said not to require additional infrastructure spending, the committee now plans $36 million for infrastructure, with $24 million considered essential to host the event for sports fields and venue upgrades.

If we use the taxpayer dollars to dig holes and fill them back up, that will have economic impact. That doesn't mean it's a smart thing to do."- Richard Saillant, economist in Moncton

Richard Saillant, another economist, said he wasn't impressed with the relatively low estimated benefits of hosting the games. 

"Normally, what you'd expect with real, good public investments is spinoffs in the range of two to three times the public investment," Saillant said. 

"If we use the taxpayer dollars to dig holes and fill them back up, that will have economic impact," he said. "That doesn't mean it's a smart thing to do."

Tracey Suley, a spokeperson for the organizing committee, pointed back to comments organizers made at a news conference Monday when asked for a response to the comments from Saillant and Desjardins. 

She said the spinoffs were calculated using a model developed by the Sports Tourism Alliance called the Sports Tourism Economic Assessment Model.

Saillant said the games may fill hotels with event-goers and participants, but that means those rooms aren't booked by regular tourists. 

"We may also overstate the benefits because we don't take into account that the infrastructure is limited to accommodate much more people in the area," he said. 

Doucet said Monday that the original bid budget was prepared by the province and that the current organizing committee shouldn't be blamed for the cost difference. 

Stéphanie Bilodeau, a spokesperson for the province, said in an email Tuesday afternoon that at the time of the bid, the role of government representatives was to provide advice and support to the bid committee in preparing the submission.

The province has said it is still committed to hosting the games, but is looking at how it could reduce the cost or find other sources of funding.