The Edmonton Oilers’ Stanley Cup playoff run and the Formula One Montreal Grand Prix will bring zero net economic impacts to Canada, one economist says, but some business groups and local restaurant owners are expecting a spike in business.
Neither event creates new permanent jobs, Concordia University’s Moshe Lander said. He also argued if people are spending more to celebrate these events now, it just means they will likely spend less on other things later on, resulting in no net benefit for the economy.
“If we’re getting caught up in the moment (watching the Oilers), the way that people did when the Raptors went to the (NBA) championship and you had watch parties across Canada, you’re going to get a credit card bill next month,” he said, “and that credit card bill is going to come with a generationally high interest rate attached to it.”
“If our income hasn’t changed, then for every person that you’re going to find who says, ‘this is fantastic! A deep Oilers run is going to be magic for my business.’ I’m going to find you another business (owner) who says, ‘where did everybody go? Our place is empty.’”
It’s an insight that seems to contradict some reports.
An Edmonton business association told Global News the city sees “a 25 per cent to 150 per cent spike in spending” on playoff nights. The president of a B.C. restaurant group said each post-season contest added about $2 million to the bottom line of restaurants across the province. Even bars in Calgary, home of the Oilers’ fierce rivals, say they’re seeing a huge boost.
“Any Canadian team, we’re getting people in to watch,” Saskatoon bar owner Gary Baba told Global.
Baba runs Wendel Clark’s Classic Grill and Bar, named after a former Toronto Maple Leafs captain.
He said he’s getting around 25 per cent more business, even on Tuesdays and Thursdays during the playoffs this year, because Canadian teams are still playing.
Financial news and insights
delivered to your email every Saturday.
“You can hear them screaming loud,” he said, describing how fans wear jerseys and stay three or four hours.
It was different last year. Baba said patrons would come in, watch while they ate and then leave.
Lander said any boom will be specific to sectors like the restaurant industry. And if restaurants hire additional staff to help during the rush, they’ll be taking workers from other, similar jobs.
The F1 race may be different in that foreign tourists may visit Montreal and spend money at its hotels and restaurants, bringing in new money, though Lander said it doesn’t matter.
“But here’s the thing — those hotels would have been full anyway,” he argued, speaking from that city.
The city’s tourist season is always busy with a full schedule of events. The money F1 brings to Montreal won’t be substantially different that the other festivals, he said.
He suggested what he called “tourist tourists,” who visit Montreal and then other Canadian cities and provinces, likely bring in more money than “F1 fans” who likely leave after the three-day event concludes.
Two chamber of commerce presidents challenged Lander’s analysis.
“This is the type of tourists that you dream to have,” president of the Chamber of Commerce of Metropolitan Montreal Michel Leblanc told Global News, “because these people come and they expect to spend money. They find Montreal quite cheap compared to Monaco, Dubai or other places (with F1 races).”
“Not only do they stay in hotels, do they spend in restaurants, they buy souvenirs, they sometimes visit all over town, museums, etc. But they do so more than other types of tourists.”
He said of all the many events Montreal hosts, the Grand Prix has the highest impact, bringing in $162 million last year, with $110 million from tourists from outside Quebec.
Speaking just days after the city hosted SailGP, a sailboat race with international teams, Halifax Chamber of Commerce president and CEO Patrick Sullivan said “there were folks from all over the country and the world who showed up here. So that’s got to be a net positive.”
They split on whether local hockey fans would support the Oilers.
Sullivan said he hadn’t heard if many people booked reservations on Saturday to watch the first game but was positive the bars would be full.
“We’re heading into June. People are more enthusiastic about getting out, getting downtown, and getting on patios. And I think the hockey games are the icing on the cake,” he told Global News.
Leblanc said he didn’t “want to give the impression that it’s a boom for sports bars. It is not,” though he did call it an interesting time for hockey fans.
“In Montreal, not that much electricity,” Leblanc said.
Leblanc and Lander agreed on one thing. They said success of a team can create civic pride and Leblanc added it can create optimism “where we might take more risks,” when it comes to spending.
Lander again said it could boost some sectors, but any lasting economic benefit would need to come from new jobs.
— with files from Global News’ Caley Gibson, Tomasia DaSilva, Simon Little and Cassidy Mosconi
© 2024 Global News, a division of Corus Entertainment Inc.
