By Mike Archer. It was interesting watching and reading the economic news Wednesday. The airheads on TV were fixated on the fact that the Dow Jones had hit its highest mark in history.
Not one of them had a clue what that meant but they presented the news as though it must be good news and sort of implied we should probably all go out and shop.
The fact that it was based on numbers out of China showing that country is not doing quite as badly as everybody thought completely escaped the news readers, several of whom would probably have a hard time finding China on a map.
The more interesting news was found in the Globe and Mail which reported that departing Governor of the Bank of Canada, Mark Carney, was discussing the fact that most economic indicators were bad and telling Canadians that the only hope our economy has is if businesses start investing their excess cash in new equipment.
That bad eh?
More specifically the Globe was able to report the cheery news that Torstar, owners of the Toronto Star, Harlequin books, Workopolis, the Metroland chain of community newspapers, and a chunk of David Black’s Black Press newspaper group of BC, had suffered a 65% drop in profits.
Earlier this year they reported that, despite a steady decline in profits after 2008, the Glacier Media chain, which purchased the Vannet group of newspapers (which includes the Abbotsford Times, Chilliwack Times, Langley Advance and Maple Ridge/Pitt Meadows Times), is a good stock purchase if only because the management group has a large stake in the company.
Local economic indicators – home sales, housing starts, employment, building permits – have all been trending downwards for over a year. The entire economic growth strategy of the City of Abbotsford has been to risk the surplus left by George Ferguson, the accumulated surplus in the DCC funds and the long term debt of the taxpayers of the community on an all-in, win-or-lose-everything gamble on Plan A and the endless inflow of homebuyers from Vancouver. Not one of the parameters on which their big gamble was based has materialized.
- Population is stalled at 133,000 – just 10,000 more than it was in 2005 and nowhere near the 140,000 in the literature or the 173,000 touted in some articles.
- Housing starts have been steadily declining
- Real Estate sales have been steadily declining
- Building Permits have dropped dramatically
The huge influx of people from Vancouver seems to have either stopped in Langley or hopped across us to Chilliwack.
Essential water and sewer infrastructure upgrades have been being deferred, many of them since before 2005, due to lack of money.
All that infrastructure is needed to bring developers back to Abbotsford and have them fill the empty holes in the ground which can’t be sold.
Turns out we spent all our money on:
- Abbotsford Entertainment & Sports Centre (AESC)
- Reach Museum
- ARC upgrades
- Two overpasses which haven’t solved the traffic issues they were designed to solve
- A money-losing hockey team we promised to subsidize for ten years
The economic indicators for the Canadian economy and the world economy do not bode well for such an indebted city as Abbotsford. Someone is going to have to have the courage to pay the Calgary Flames to leave; shut down the AESC, fire Global Spectrum and wait until someone either wants to buy it from us or sign a deal that makes sense to taxpayers for its usage.
In the meantime all we are doing is throwing good money after bad and taxpayers are fed up with those who are allowing it to happen.
With the promise George Peary made that we wouldn’t allow the owners of the Abbotsford Heat to lose money for ten years, we’re going to need something more than a wish and a prayer to avoid serious tax hikes. When the bills come due for everything from the infrastructure work we keep deferring to the interest payments and the money we owe our own DCC fund it isn’t going to be unrestrained economic growth which pays those bills.
Fact is … we don’t have the money to pay those bills and the brain trust at City Hall wants to give another $17.5 Million we don’t have, along with up to $800,000 in tax forgiveness, to the YMCA to build a paid-membership-only pool we don’t need.
Problem is … most of those who sit around the council table haven’t a clue how to balance a chequebook without an extra monthly cheque from their friends and neighbours in return for bankrupting their … you guessed it … friends and neighbours.
No wonder the people on TV and in the community newspaper business just smile and report the news as though everything is just fine and we should all go shopping.
The truth is so much scarier it really shouldn’t be shared with the public. If they knew what is going on they would want to run and hide … and stop shopping.
Let’s hope that, when the real report of Mayor Banman’s Task Force On The Economy is released it has something more substantial to say than the drivel presented at the social event last month.