Economists say review of Sask. irrigation megaproject shows cost would exceed return to provincial government
Professor says pitch wouldn't even make Dragon's Den broadcast
But Peter Phillips, a recently retired economics professor for the University of Saskatchewan's Johnson-Shoyama School of Public Policy, said the report is vague and based on shaky assumptions.
He said any private investor considering this project would walk away after reading the first few pages.
"I don't see anything there that I'd see anybody put private capital up for," he said. "If the public is willing to take the risk and front-end load it with public capital, there's a possibility we will get a modest increase in economic activity in one part of the province."
Ross Hickey, an associate professor of economics in UBC's faculty of management, was more blunt, saying if this project was pitched to the CBC's Dragon's Den program, "I don't think it would make it to broadcast."
He said that while the report does indicate the project would increase provincial GDP, which would benefit some people in the province, "it's not making money for the Government of Saskatchewan, in particular."
"[The project] costs today, in real terms, more money than the future lifetime value of benefits that come from the project," he said. "Which means why bother?"
That means that the project would cost far more today — $1.15 billion — than it would return to taxpayers over the next 50 years — $410 million.
"We're not getting all the money back out at the end of the day," Phillips said. "We're going to be paying a subsidy into this space."
He said the government and taxpayers need to ask a hard question about that $1.15-billion price tag.
"Is this the best place you can put this to improve the economy in Saskatchewan? I'm not convinced this is the best one."
[url]https://www.cbc.ca/news/canada/saskatchewan/cost-benefit-review-irrigation-megaproject-1.7337364[/url]
Professor says pitch wouldn't even make Dragon's Den broadcast
But Peter Phillips, a recently retired economics professor for the University of Saskatchewan's Johnson-Shoyama School of Public Policy, said the report is vague and based on shaky assumptions.
He said any private investor considering this project would walk away after reading the first few pages.
"I don't see anything there that I'd see anybody put private capital up for," he said. "If the public is willing to take the risk and front-end load it with public capital, there's a possibility we will get a modest increase in economic activity in one part of the province."
Ross Hickey, an associate professor of economics in UBC's faculty of management, was more blunt, saying if this project was pitched to the CBC's Dragon's Den program, "I don't think it would make it to broadcast."
He said that while the report does indicate the project would increase provincial GDP, which would benefit some people in the province, "it's not making money for the Government of Saskatchewan, in particular."
"[The project] costs today, in real terms, more money than the future lifetime value of benefits that come from the project," he said. "Which means why bother?"
That means that the project would cost far more today — $1.15 billion — than it would return to taxpayers over the next 50 years — $410 million.
"We're not getting all the money back out at the end of the day," Phillips said. "We're going to be paying a subsidy into this space."
He said the government and taxpayers need to ask a hard question about that $1.15-billion price tag.
"Is this the best place you can put this to improve the economy in Saskatchewan? I'm not convinced this is the best one."
[url]https://www.cbc.ca/news/canada/saskatchewan/cost-benefit-review-irrigation-megaproject-1.7337364[/url]
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