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Taxpayers Shouldn't Backstop Indy Losses

Author: Scott Hennig 2009/01/21
  • $5.3-million loss only tip of iceberg
  • Claim of $80-million in economic impact questioned

EDMONTON: The Canadian Taxpayers Federation (CTF) is calling on the City of Edmonton to cancel the blank cheque given to Northlands and the Indy Racing League (IRL) to cover losses for Edmonton’s Indy car race in 2008, 2009 and 2010.

“This is plain and simple corporate welfare,” stated CTF-Alberta director Scott Hennig. “Indy Racing League and their drivers rake in millions upon millions of dollars a year, if their race loses money, perhaps IRL or their drivers should be covering the losses, not taxpayers.”

In May 2008, it was discovered that Edmonton’s city council quietly approved a deal with Northlands to cover any losses for the next three years.  At that time it was widely expected that losses in 2008 wouldn’t be more than $1-million.

In fact, at the time City Manager Al Maurer said:

“We studied this fairly closely when we got involved in this thing and a $1-million loss is not unexpected this year.  But there’s no reason why you would continue to incur those kinds of losses."

“The City Manager was correct, there really is no reason why taxpayers should ever continue to cover losses, especially considering their loss estimates were off by over 400%,” continued Hennig. “What happens if their new estimate of a $1.5-million loss for the 2009 race comes in this far off?”

The CTF is also questioning the validity of Northland’s claim of an $80-million economic impact stemming from the event.

“The only real economic impact from these events comes from visitors from out of the province who otherwise would have never come to Edmonton. Locals who attended the event should not be included in the calculation. Had the Indy race not come to town locals would have likely spent their money going to Esks games, concerts or other local events,” continued Hennig.

“Citizens begrudgingly pay their taxes each year so that the city can pay for vital public services like police, fire, transit, and snow clearing, not so that Northlands can put on a car race.  This council, and Northlands need to give their head a shake,” concluded Hennig.

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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