Apr
26
A layman's View of the Scarfe Report
by D. S. Lindsay
Just hours before the season's first cruise ship arrived at Ogden Point, the benefits of the cruise ship industry to Victoria came into question. A new research study, Victoria as a Port of Call: the Costs and Benefits of Cruise Ship Visits, questions many commonly accepted assumptions. When the industry in the Victoria area is analyzed, Victorians come up about $4 million short.
Economist Dr. Brian Scarfe presented his report to the Victoria City Council Environment and Infrastructure Committee on April 14, 2011.
Scarfe's report measures "the triple bottom line, a reporting system to measure the impact of organizations and activities on the 3Ps - people, profit and planet. This accounting method, which examines human capital (employees and community), the environment, as well as business profit, became a standard part of green business practise in the 1990s when non-recognized social and environmental costs became an issue. The environment has made everyone a stakeholder, either directly or indirectly. The GVHA has laid claim to a triple bottom line method of doing business."
"The significant costs that burden residents and taxpayers exceed the benefits enjoyed by local cruise ship servicing companies, a small portion of the local business community, and the Greater Victoria Harbour Authority (GVHA), owner of the cruise ship terminal and waterlots."
Scarfe does not reject the cruise ship industry. His report points out that Victoria needs to manage the industry proactively and put Victoria First. He joins voice with the 2003, Gorecki and Wallace report, "Ripple Effects: The Need to Assess the Impacts of Cruise Ships in Victoria B.C.", which suggested that stewardship and planning "has clearly been absent in the uncontrolled promotion of cruise ships in the neighbourhood."
He also reiterates concerns expressed by Geoff Young regarding the accountability of the GVHA to local voters and the community.
Commissioned by the James Bay Neighbourhood Association (JBNA), the Scarfe report adds a dollar value to various studies and data (noise, traffic, air quality, etc.) collected in the neighbourhood over the last several years. The Vancouver Island Health Authority continues to be a JBNA partner with concerns over issues of air quality. The Scarfe report questions multipliers and industry assumptions overstating the economic benefits (maximum value $24 million) against the balance of social and environmental costs resulting from atmospheric emissions, marine effluents, traffic noise and congestion, road repairs, and public subsidies. The report estimates economic costs are at least $28 million.
WHO KNEW?
The cruise industry has an industry advisor, Business Research and Economic Advisors (BREA), who provide a 'model' of the impact of cruise tourism on an area. BREA does not use actual data although it is available to its client group, the carriers. The Scarfe study questions the use of Vancouver-based impacts in evaluating the economic impact on Victoria and accuses BREA of "overstatement of economic output impacts." Vancouver, as a home port, generates approximately 8 1/2 times the revenue of Victoria as a port-of-call, and 16 times other smaller ports.
And the winners are...
A small number of local businesses and their employees benefit from the industry. Although much of the profit goes south, many individuals benefit through salaries and wages.
But the rest of us are sitting in the non-winner column.
Senior levels of government are emphatic in insisting the Victoria and the Capital Regional District (CRD) put in a state-of-the-art sewage treatment system. Meanwhile three to four hundred 'small cities' ply our coastal waters, dumping waste. Both Alaska and Washington State have more stringent regulations regarding marine discharges and emissions. Where do 'best business practices' dictate dumping waste? The report estimates BC current coastal environmental costs at a minimal $5 million/year.
Recent projects at Ogden Point, a mooring "dolphin" and dredging an area to improve ship clearance, together, cost about $4.5 million, and received $2.4 million in combined federal and provincial funding.
Although overall tourism in Victoria is valued at about $1 billion/year, the Scarfe study indicates that "cruise tourism in Victoria is at best a marginal economic activity benefiting a few, while imposing costs on the community. This is in contrast to "lower profile" services such as the M.V. Coho which brings substantial economic benefits to Victoria with few attendant costs."
Can you guess which service has been threatened with closure?
We Are Not Alone
The Scarfe study cites similar cost-benefit studies from as far away as Dubrovnik (Croatia) where the environmental costs of cruise tourism were found to be over seven times the estimated economic benefits.
Key West, Florida, and Charleston, North Carolina are two North American cities questioning the price locals pay to host cruise ships. Juneau, Alaska has initiated many of the recommended protocols.
If 'a boat is a hole in the water in which to pour money' - what is a cruise ship terminal?
Vancouver, as a home port, generates approximately 8 ½ times the revenue of Victoria as a port-of-call. Smaller ports-of-call such as Campbell River and Nanaimo may never repay the capital invested.
Environmental Costs
The Scarfe study notes that social and environmental costs of cruise tourism have been ignored. Measures to mitigate the negative impact of cruise tourism on James Bay and BC coastal waters have been ignored. The report examines these costs and presents the following estimates of loss:
- $2.1 million excessive noise levels leading to loss of property value;
- $3 million health costs of traffic noise;
- $4 - 5 million per premature death/year from air pollution;
- $2 million air pollution impact on property values;
- $6 million health costs from emissions;
- $5 million environmental costs due to marine discharges and emissions along the coast of Southern Vancouver Island;
- $4 million infrastructure (Municipal, Provincial and Federal).
Directions for Action
The Scarfe report suggests a variety of remedial actions:
- impose a passenger levy to pay for environmental monitoring and to reimburse BC communities for socio-economic and infrastructure costs;
- strengthen federal regulations with respect to marine effluent discharges on the coast;
- improve the economic impact by becoming a home port for two vessels;
- manage the interaction and impact of cruise tourism locally;
- ensure that residents and visitors are not exposed to high levels of pollution.
Transportation
- limit the number of cruise ship calls and stage the arrivals,
- alleviate transportation impacts on the community;
- replace large highway-sized buses with more environmentally friendly and neighbourhood appropriate vehicles;
- encourage watercraft and other modes of transportation from Ogden Point to downtown, and elsewhere in the CRD.
The full report is available at jbna.org.