Saturday’s Times Colonist published various numbers about the economic impact of cruise tourism in Victoria that were launched at a recent Greater Victoria Harbour Authority press conference. Many of these numbers are exaggerated and based on flawed analysis.
First, the Esquimalt Graving Dock is a unique and long-standing facility that creates its own demand. It is misleading to include $6.25 million worth of cruise ship retrofits at the graving dock as if they resulted from cruise tourism activities at Ogden Point, or indeed any contribution of the GVHA itself. Graving dock activities are in no way derivative in this manner.
Second, crew expenditures are exaggerated because they are not firmly based on local Victoria data, and may not reflect a random sampling of all crew members, including those whose incomes are low by North American standards. Crew-disembarkation numbers are unreasonably high, given repeated cruise-ship calls, and an arrival and departure schedule that is heavily dominated by short last-night-of-voyage evening calls.
Third, no information is provided on which ships were surveyed, or at which times during the summer, or whether they were daytime or evening ships. Thus, it is hard to know what to make of the passenger-expenditure data.
Fourth, the numbers also involve a discredited “multiplier approach” to double up economic impacts. One cannot multiply local expenditures using factors based upon a provincial input-output model and then call the multiplied numbers local benefits, because any spillovers from local activity largely percolate outside the local economy. Economists regret the development of the multiplier concept, because multipliers have become the tool for exaggeration used by lobbyists and marketers. Input costs should be deducted from revenues, not added on.
Fifth, and most important, the numbers fail to offset economic impacts with economic, social and environmental costs. These have been well documented in previous analytical studies prepared by the James Bay Neighbourhood Association, including my own definitive 2011 study of the costs and benefits of cruise tourism in Victoria. That study continues to be available on the website jbna.org, and has been followed up by a paper presented last February, in Charleston, S.C., at a symposium on cruise tourism in historic ports.
The costs associated with cruise tourism in Victoria are large. Although the health-related costs associated with sulphur dioxide emissions have been reduced as the use of somewhat cleaner marine fuel is now required under the strictures of the North American Emission Control Area, and as local monitoring has occurred, other costs remain unabated.
Many James Bay residents experience more than 120 large, antiquated, highway-sized buses passing their homes throughout the summer on three cruise ship evenings, along with an additional 1,000 other vehicles. This has continued for several years without redress, undermining quiet hours, human health, property values and street surfaces in the process.
Social and environmental costs escalate as the number of cruise ship calls increases, particularly when these calls occur simultaneously, and during evening hours. Accordingly, the optimum number of cruise ship calls is clearly less than the 210 or more calls that have recently been taking place.
Industry consultants suggest that Victoria would receive about 50 calls each summer if the U.S. Passenger Vessels Services Act did not require foreign-flagged ships to make a foreign (in this case, Canadian) call when plying between U.S. ports. These 50 ships are the ones that want to call in Victoria, rather than the ships that simply make hit-and-run evening calls on their return from Alaska to Seattle.
Neither the GVHA nor the City of Victoria has done much to mitigate the negative impacts of cruise-ship calls on Victoria and on James Bay. It is long overdue for the GVHA to limit the number of cruise-ship calls, to stagger arrivals and departures while shifting the cruise-ship schedule more into the daytime, and to modernize and diversify the transportation modes by using latest vintage technologies assisted by transporting some cruise ship passengers by water shuttle from Ogden Point to the Inner Harbour.
Fundamentally, the GVHA should focus on quality and not quantity.
James Bay resident Brian L. Scarfe is a professional economist with a foot in both the academic and consultant camps.
