Fragile things

It’s about jobs. About the dignity of work. The feeling of satisfaction of something accomplished. Something made. Today.

Yet, economies are complex organisms. More natural than man-made. We may plant seeds, but with no certainty of growth. Wrong place. Wrong time. We can nurture our economies and work to protect them. But we can also destroy economies as we would a potted plant—either through benign neglect or just as effectively with an over-confident belief that we know how this organism works, and how to make it bend to our narrow purpose. Despite the difficulty and a track record of failure and ineffectiveness, we continue to charge our politicians with managing our economy. To win elections, these folks must make promises to shape the economy—with about as much prospect of success as the poinsettia you bring home every December.

For the first decade of the millennium, County council pined for industrial and manufacturing jobs. The kind that paid well and afforded a comfortable living. They believed that if they reached out to a Honda, GE or Union Carbide— and put a few local taxpayer dollars on the table, it would happen here. So council spent many tens of thousands of dollars on consultants only to be told repeatedly that the County had no competitive advantages in attracting this kind of investment. No workforce. Few skills. Poor transportation connections.

By the end of the decade, there were a handful of examples nearby of manufacturers burning through government incentives and closing anyway. Thrust face-to-face with the futility of their strategy, council eventually abandoned the dream of smokestacks lining County shores. A dependable stream of consultant revenue soon dried up.

In more recent years, council has landed upon the idea is that our economy is equipped with controls, levers and dials—that these can be tweaked and pulled to produce a pleasing appearance without any of the messy bits. That with a little turn here, pull back the lever there, they will arrive at a smooth-running economic engine. It is as naïve a notion as the yearning for a car plant, but it is potentially more dangerous.

As long as council was busy paying consultants to tell them the same thing over and over again, they weren’t meddling in the actual economy. Until that is, a group of councillors decided it had had enough of agri-tourism in Prince Edward County, especially the rapidly expanding artisanal cheese sector. They were not going to sit by and watch another wine sector to grow up here.

So it was that in December 2010, in a fit of anger, council refused to participate in a joint project with the federal government to promote this rising and vertical business sector in our community, that included milk producers, internationally-regarded cheesemakers and retailers. It was only a matter of a couple thousand dollars. But the money wasn’t the point. Artisanal cheese wasn’t the economy or jobs our leaders dreamed of. Or promised. They wanted high-paying full-time jobs—or nothing at all. Investment in the sector dried up. In a matter of a few years, the cheesemaking sector in the County had—with a few notable exceptions— mostly disappeared or moved elsewhere.

Lately, council has come to believe it must rein in the tourism economy. Cheered on by folks with neither a direct investment nor a good understanding of what a working economy means to their community, council is seeking to dampen the tourism economy in Prince Edward County. They believe they have this skill.

To be clear, the short-term accommodation sector sprung up quickly, without any rules or regulations. Shire Hall moved smartly and ably to put some order to the wild west. It will take a few more iterations to achieve the right balance between encouraging investment and community needs. But it is on the path.

Similarly, the municipality intends to introduce a municipal accommodations tax (MAT) next year. (It should be implemented January 1—but council has chosen the peculiar date of February 1 instead). The MAT was conceived by the province to enable municipalities that fund services such as roads and parks, to extract a stream of revenue (four per cent) from accommodation guests. Half of the proceeds will go to municipal coffers, the other half to feed the goose laying these golden eggs.

(Disclosure: I have a stake in an accommodation provider in Wellington.)

As long as accommodation providers in the County are operating on a level playing field with other jurisdictions (same rate, same rules etc.) with which they compete, it is a manageable and reasonable way for the municipality to share in the success of this economy. And perhaps burnish some of the hairier bits.

But some on council want all the money from this new tax—not just half as prescribed by the province. They are actively lobbying provincial officials to change the law to do this. Why? Because tourism in Prince Edward County doesn’t need funding in their view.

It is nonsense and it is dangerous.

Tourism in Prince Edward County seems an irritant at this moment. But our leaders need to focus the larger picture, rather than the grist of the social media wheel.

It is foolish in the extreme to suggest this economy is a perpetual motion machine—that it will keep turning and producing forever without any propulsion. Furthermore, it is remarkably short-sighted to fail to notice the connection between all the folks queued up for ice cream, populating patios and prowling shops and the success of this economy.

Set aside the fact that accommodation providers are not the tourism sector. (No other businesses are subject to this new tax—not restaurants, cafes, wineries, cideries, breweries, nor retail shops. Only accommodation providers.) Consider only that each of these businesses must earn their annual revenue in four to six months of the year. (It used to be more like two or three months). It is why large chains have never invested in this community. The business and staffing model is too short.

County accommodation providers are trying to change that. StayPEC is an association of accommodation providers in this community, formed a few years ago in anticipation that the MAT was coming. Their chief aim is to extend the season—not amplify the existing one. Some providers are already providing yearround employment to their staff. Others are working toward it. There are hopeful signs that it is working. It turns out folks want to come to Prince Edward County— but we have to let them know we are open, and they are welcome. This requires ongoing investment.

Council must use extreme caution and humility when tinkering with the economy. It is a fragile thing. And jobs are in the balance.

So by all means, take the money—just don’t kill the goose. Again.

rick@wellingtontimes.ca