Sometimes it’s the things the governments admit in black and white that are the most damning. The Ford government’s plans for Ontario Place are still controversial and somewhat opaque — yes, the province released the terms of its lease with Therme this week, but only after it had started destroying the trees on-site under cover of darkness the previous night. But don’t ask Infrastructure Ontario about the trees, as Queen’s Park reporters learned Thursday, or you’ll get a petty tyrant of a communications staffer trying to dictate what are and are not acceptable questions.
But the control-freakery of people who nominally work for the public aside, it’s striking just how meagre the projected benefits of the Ontario Place deal are. Again, in black and white in the government’s own telling, the province is set to net $1.9 billion over the 95-year term of the lease. That’s… actually pathetic: $2 billion is simply not that large a sum in the context of a provincial budget that’s currently (in 2024, not 2119) spending 100 times that much on programs alone — as in, not including debt service — and it works out to $20 million a year.
To put it another way: the government plans to build 2,500 parking spaces at Ontario Place — substantially more than required by the terms of the lease, but, hey, this government is nothing if not solicitous to motorists. We know from the auditor general’s investigation into the closure of the Ontario Science Centre that the government received a rough estimate indicating this would cost something like $300 million. This is, astonishingly, more than the $200 million the private sector is being asked to contribute to the non-spa parts of the public space — meaning that, even taking the government’s own economic benefits at face value, it will be 15 years, or one-sixth of the total lease term, before the revenues from Therme represent a real surplus to the treasury.
(Technically, there will be other revenues coming from a renewed Ontario Place, including a Live Nation performance venue, but the need for parking seems to be driven largely by Therme-related considerations.)
Even if the eventual parking solution is built for less than $300 million, the net return to the provincial treasury would still look pathetic: 95 years is a really long time, and even mediocre financial investments do substantially better over that kind of timeframe than what the government is projecting. We’re talking about a large upfront expenditure from the public purse, one that overwhelmingly benefits a single private corporation and that will be recouped — if at all — one pittance at a time. For waterfront real estate in Toronto, this is terrible performance.
And that’s if we take the government’s revenue projections at face value. Those projections rely, ultimately, on visitor-traffic projections that are difficult to take seriously. Infrastructure Ontario says it expects that a renewed Ontario Place will see 6 million visitors annually. Canada’s Wonderland got just under 4 million in 2019, the last pre-COVID year; it’s a substantially more comprehensive entertainment venue that’s been marketing itself in the GTA for decades. Heck, the Eiffel Tower claims 7 million visitors a year, and that’s a historic landmark in a city people visit from around the world. The idea that one specific outpost of a spa chain will generate that kind of traffic is, at the absolute minimum, a case in which the public should demand that the government show its work more thoroughly.
If those visitors fail to materialize and the spa goes into financial distress, what then? In theory, a cold, calculating government could say, “Tough luck — the rent is still due” come what may. In practice, that’s not how Ontario has worked, historically. When rosy projections turn out wrong, the province sticks to its guns and eventually tortures either the data or the cashflows to salvage its dignity.
We saw this with the Union-Pearson Express train, originally pitched to taxpayers as something that would pay for itself. Whoops: it turned out that, at the fares it needed to charge to break even, people would just take the TTC or taxis or Ubers. The then-Liberal government eventually surrendered to reality, and now it’s another heavily subsidized service in the already heavily subsidized GO Rail network.
Cost overruns and perpetual subsidies are a sad reality when we’re talking about public-transit service between two public-transportation nodes — Union Station and Toronto Pearson Airport. At Ontario Place, we’re talking about a functionally permanent (by the standards of anyone alive today) giveaway of public land to a private operator on terms that offer the slimmest of returns to the taxpayer and still rely on overly optimistic projections of success. It has all the hallmarks of another Ontario-made fiasco in the making. The only question that matters now is what it will cost to eventually undo this mess.
Donate