appendix-30-response to schaffer

8/2/2019 Appendix-30-Response to Schaffer

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Economic Impacts Marvin Shaffer Report on Economic Benefits

Asnotedabove,theKtunaxaNationCouncilcommissionedareportbyMarvinShaffer

andAssociates.Thisreportclaimed that it was unclear whether the project would afford

any significant economic benefits to the region or province. This information isconsidered confidential.

The report asserted the following:

The proponent and Environmental Assessment Office (EAO) did not consider key

factors governing the economic benefits of the Jumbo Glacier Resort project,

The assumed average growth rate of skier visits is very high,

The risk associated with the projects financial feasibility is greater now that it was

when the EAO assessed it in 1999 and 2004,

The potential benefits related to tourism revenues and employment would bepartly at the cost of other tourism operators and employers in the region.

There is no evidence of significant economic benefits associated with any new

jobs generated by the project,

The net impact to government is unclear,

The most significant land use impact would be the displacement of heli-ski

operator, RK Heli-Ski,

The impact to primary resource developers would be small,

Land and resource use benefits and costs would be relatively small.

RDB analyzed the Marvin Shaffer Report and determined that the report did not

adequately refute the proponents financial information and the projects potential to

realize economic benefits from the project.

The Provinces analysis of the Marvin Shaffer report noted the following discrepancies:

1. The Marvin Shaffer and Associates (MSA) document raises questions with respect

to Jumbos claimed economic benefits, but provides no detailed analysis to refuteJumbos estimates or to prove the benefits are minor. It proposes that benefit cost

methodologies be applied to certain analyses where the methodologies are not typically

applied; for example that no road should be built by government to the ski hill.


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MSA suggests that no road should be built by government without a comparison

of new costs to government versus incremental government revenues derived from the ski

hill. No provincial, regional or local government applies this methodology and if appliedby British Columbia would result in few roads being built outside of Metropolitan

Vancouver;

Cost benefit methodology is useful when deciding which of several land use

proposals to pursue if you are development/investor, not useful in adjudicating whether aspecific Crown land tenure proposal should be approved.

The road to Jumbo from a provincial highway will be built by the developer (MSA

assumption is incorrect).

The suggestion implies that improving access to Whistler Blackcomb has resultedin negligible economic benefit to the region.

2. Shaffers assumptions related to employment gains are not supported by labour

economics theory, e.g.

While MSA claims that persons hired at Jumbo will reduce employment at other

businesses, so that the net gain is zero. This conclusion does not reflect that the

Kootenays have an unemployed population that would fill vacant positions, and that if

vacancies were not filled, that wage rates would likely rise to attract trained employeesfrom within or outside of the region.

Not aware of any government authorities or other jurisdictions that use the net

employment gain as a critical determinant for approving/denying a Crown land

disposition.

The type of data that MSA suggests should be incorporated into the land tenure

decision process does not exist, would require extensive and expensive surveys to

acquire, and its acquisition is not justified by the cost.

3. MSA casts doubt on whether Jumbo would proceed to its second and third phases.This demonstrates a lack of understanding of business practices that relate to ski hill

development:

Like any other ski hill or emerging business, the ski hill will expand when the

market forces determine that it is appropriate;

There is a strong financial incentive for the proponent to develop subsequent


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phases because high infrastructure costs are incurred in the first phase and recovered, as

well as profit, in subsequent phases.

4. Shaffers comments involve shallow inquiries into data underlying skier visitation

across Canada and the USA. MSA claims that Jumbos skier visitation forecasts areaggressive and out-of-step with industry statistics e.g. across the industry, visitation has

reached a plateau or is slightly declining:

While it is correct that at a high level a plateau has been reached by the industry,new and updated resorts have shown significant growth because they are offering faster

lifts, improved amenities (the case of Whistler Blackcomb, Aspen, etc). The same

rationale would support Jumbos skier visitation estimates.

Once the economies in ski tourist markets of origin recover, the proportion ofinternational to national visitors will change in favour of high spending international

visitation (previously observed in Whistler).

appendix-30-response to schaffer

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