In a Press Release today, Laurentian Economics Dr. David Robinson blasted the economic understanding of the supporters of the Maley Drive Extension:
“There are so many errors in their thinking that it is embarrassing.” he claims. “I am including MP Marc Serré for saying that this project adds to the local GDP. That is a popular line. The Chamber of commerce uses it. It is also an error we teach Econ 101 students to avoid. It shows neither Marc nor the Chamber understands macroeconomic accounting,” said the economist. "They are actually counting a cost as a benefit,’’ said the economist. “Either very sneaky or very stupid.”
“Technically, if the City burns money, even that adds to the GDP,” said Robinson. “so in a simple-minded way, Marc and the Chamber are right. But if you burn money on a bad project you have to take it away from good projects. It is called opportunity cost in Econ 101. Moving money from good projects to bad projects has no effect on the GDP. Maley Drive will have no effect on GDP”
The city had a cost benefit study done. Robinson claims it was either incompetent or dishonest.
Robinson goes on to point out that the city hired AECOM to do the Environmental Assessment for Maley Drive. Then the city hired Tony Ceccuti away from AECOM to be general manager of infrastructure. Then Tony hired AECOM to do the cost benefit analysis. "Maybe the pool of brains is just too small,’’ he joked. “This incest with consultants seems to have given birth to a mental handicap in council.”
“The project is also fiscal disaster,” the economist said. “It will cost every man woman and child in the city $1000. It will generate almost no tax revenue”
“People should ask themselves if they want to pay $1000 for the project. Should their kids pay $1000 for the project.” Robinson says that the benefits go to very few. If you live south of Elm would you pay more than $100?. I wouldn’t. Councillors should be asking if the people who voted for them will get $1000 each in benefit from Maley. Some will lose as taxes go up and property values go down.”
“I won’t say anything about the effect on traffic,” said Robinson. I know there are serious questions, but I want to stick to the economics,’’
For further information, contact Dr. David Robinson, H 705, 566-4819 W 705-675-1151-3212 drobinson@laurentian.ca