Tourism-Based Redevelopment and the Fiscal Crisis of the City: The Case of Montreal

Article excerpt

Resume

Dans les villes nord-americaines, le tourisme devient de plus en plus la pierre angulaire des strategies de developpement economique. Cependant, nous manquons de recherches systematiques sur la fiscalite du tourisme urbain. Depuis les annees 1960, les trois niveaux de gouvernements (federal, provincial et municipal) ont investi plus que $7 milliards en installations touristiques a Montreal : les grands evenements (Expo 67 et les jeux olympiques de 1976), le Palais des congres, le Casino, les hotels, les musees, les stades, les parcs d'amusement, et un district recreo-touristique au bord du fleuve St-Laurent. En 2000, le Grand Montreal a attire six millions de touristes qui affirme-t-on, auraient eu des retombees fiscales du tourisme representant 7% des revenus totaux de la Ville. Neanmoins, une etude systematique des investissements principaux revele une toute autre image. En pratique, le bilan fiscal du tourisme a Montreal est inquietant. Plusieurs investissements sont deficitaires, et le deficit gigantesque du stade olympique en soi aura compromis la fiscalite de la Ville de Montreal pendant un quart de siecle.

Mots cles: Tourisme; finances locales; Montreal.

Abstract

Although North American urban leaders have increasingly promoted tourism as a local economic development strategy, there has been little systematic research on the fiscal impact of tourism in cities. Since the 1960s, the federal, provincial, and municipal governments have invested more than $7 billion in tourist attractions and related infrastructure in Montreal, including "mega-events" (Expo 67 and the 1976 Olympics), a convention centre, casino, hotels, museums, sports stadiums, amusement parks, and a tourism-recreation district on the riverfront. By 2000, according to city officials, Montreal attracted nearly six million tourists annually, and the taxes and fees on tourist spending represented an estimated seven percent of city revenues. Yet, analysis of these investments reveals little sign that, on the whole, tourism has been much of a fiscal boon to Montreal--on the contrary, the staggering debt from the Olympics alone has compromised city finances for over a quarter century.

Keywords: Tourism; City finances; Montreal.

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Over the past 35 years, redevelopment projects aimed at, attracting tourists have been the centerpiece of economic revitalization strategies in cities across the United States and Canada. This is understandable: tourism is now a $4 trillion international industry (Crossette 1998:5) and one of the economic sectors, in an era of deindustrialization and suburbanisation, in which cities seem to have a competitive advantage in attracting investment (Judd and Fainstein 1999). By building or subsidizing convention centres, sports stadiums, theme parks, hotels, casinos, and entertainment complexes, cities have attempted, as David Barringer puts it, to transform themselves into "oversized carnivals that will lute visitors from the suburbs and beyond, recapturing the wealth that began seeping out years ago" (Barringer 1998:29).

Typically, municipal decision-makers envision three main economic payoffs from tourism-based redevelopment: jobs, fiscal returns, and property-market revalorisation. Cities usually justify tourism investments on the basis of feasibility studies that invariably show that all of these impacts will occur; but only recently have scholars begun to systematically assess these claims (Law 1992). Recent studies on tourism labour markets, for example, have found that tourism can be an important source of employment, particularly in cities facing sclerotic labour markets for the unskilled (Shaw and Williams 1994). However, only in the presence of equity-inducing labour market institutions such as unions and a generous minimum wage do tourism jobs pay anything approaching a living wage (Gladstone and Fainstein 2001; Levine in press). Similarly, tourism investments have played a prominent role in the revitalization of property markets in North American cities (Judd 2003). …