Sweet And Sour Public Investments

Commentary, Role of Government, Frontier Centre

People who are skeptical of government spending programs tend to groan on cue when they hear new proposals for public investment. Unhappy with paying record amounts of tax from their family income, many believe government projects inevitably mean big bucks and, more unfortunately, often expensive flops.

They are wrong. Imaginative ideas often emerge from the messy system we call democracy, and it is sometimes politicians who provide the initial impulse for the creation of works of great public value. The problem is sustaining these projects after they take shape.

Winnipeg’s Centennial Concert Hall is a perfect example. The notion was politically inspired from the start. It came out of election promises leading up to Canada’s hundredth anniversary. But much of it was financed with donated funds (You got a brass plaque on the arm of a chair if you forked over a large enough gift.) Its chief organizer was the mercurial Maitland Steinkopf, a former Tory cabinet minister, who charmed the project through at little cost to the taxpayer.

Then the City goofed. It decided to own and operate the Hall, arguably the finest acoustic chamber in Western Canada. Never meant to be a money-maker, nevertheless it was set up to lose more than it should. Why?

Like the Convention Centre, the Arena, the Pantages Theatre and even City Park, the Concert Hall has the misfortune to operate inside an administrative framework that guarantees perpetual poverty and dependence on the public purse. As experience demonstrates, governments don’t have the management skills and the operating smarts to run many things efficiently.

Contrast that fate with the Forks, built and paid for with large public infrastructure investments. But in this instance, the politicians had the good sense to retreat after construction was completed, letting the private sector run most of the operations.

A public corporation still oversees the project. It often gets into peculiar arguments about policy, like the recent flap over a new restaurant’s application to build an outdoor patio. But if you compare the Forks’ level of micro-management with that experienced by other projects the City has embraced too tightly, the difference is instructive.

At the Convention Centre, the City tried for years, with successive financial losses, to provide the food service on its own. Inevitably, politics entered the picture. Union-management struggles sapped the enterprise’s vitality and service inevitably declined. But at the Forks, all the eating facilities are privately owned and operated. Because ownership is dispersed, labour disputes are contained and incapable of harming the entire operation. If the owners don’t pay the rent, they are evicted. The City dictates very few of the details. Why should it?

The same applies to the rest of the ventures that invested in the Forks. The craft shops, the produce markets, the gift stores, even the river rides and boat rentals, are all free from the bureaucratic nightmare that accompanies our present model of public ownership.

Why does that independence make such a difference to the businesspeople at the Forks? Simple: they aren’t bogged down trying to comprehend and comply with the thousands of rules and minute specifications that the public sector imposes on its own operations. Instead, their focus is on a simple core mission -to make a profit by offering the public desirable goods and services. Their business abilities, not their position in the political pecking order, determine their success or failure.

"Build it and they will come," used to be the attitude of "entrepreneurial" politicians who promoted public investment. The lesson here? Change that to, "Create an environment where others build it and they will come. But make sure they run it."