Opinion » Editorial


Politicians play the numbers game



In the first week of August, bookended by a manufactured crisis in Washington and the HST referendum that will shake things up in Victoria and likely across B.C, we are reminded of the close relationship between economics and politics.

As politicians in Washington held true to Winston Churchill's old adage - You can always count on Americans to do the right thing, after they've exhausted every other possibility - by waiting to the very last moment before extending the nation's debt limit a financial crisis seemed to be averted. But key economic indicators released at the same time revealed what a sideshow the phony debt crisis really was. As Bill Clinton reminded us in 1992, the real issue is the economy, stupid.

And the economy in the United States, in Europe and by association, in Canada is not well, and that has implications for Whistler.

The American economy is based on consumer spending. As the New York Times reported in May of 2010, "...consumer spending as a share of G.D.P. has been trending upward since shortly after World War II. The last time that consumers accounted for less than 60 per cent of total output was in 1953, and more recently consumer spending has accounted for over 70 per cent of G.D.P. for the last five consecutive quarters."

The Canadian economy is similarly driven by consumer spending.

On the heels of the "big" deal in Washington came reports that U.S. consumer spending dropped in June for the first time in nearly two years. Incomes barely rose and unemployment remained at more than nine per cent. The stock market responded by going into freefall.

Meanwhile, the Conference Board of Canada reported last week that consumer confidence in Canada's economy fell for the third straight month in July. "Consumers were uncertain they would have jobs in the future and therefore whether they would have enough money to pay for items bought on credit," the Canadian Press reported.

And, of course, Canadians and Americans have been warned repeatedly in recent years about the dangers of household debt. They've been told by their governments to start saving rather than spending, which doesn't help the consumer economy.

But on the first truly sunny week of a long, cold summer, when Whistler Village has been filled with visitors, facts and figures about economic growth and consumer confidence seem far removed. Wander up and down Village Stroll and it's easy to assume that things are heading in the right direction. Get the people to Whistler, the theory goes, and businesses should be able to figure out what the people want and then sell it to them.

That theory still holds true in a general sense, but the empty retail spaces in the village suggest some couldn't figure out what people wanted.

Of course, it's not quite that simple. Rents, taxes, location and a three-year obstacle course that has included pre-Olympic construction, the Olympics, rising oil prices and transportation costs, the introduction of the HST, an increasingly unfavourable exchange rate and pay parking have variously taken their toll on businesses.

The economy - and technology - have also spawned a new consumer attitude that businesses are having to adjust to: everyone expects a deal. And with Groupon and other volume-buying sites there is often a deal available. At the very least it's easy to compare prices.

The economy, technology, consumer confidence and employment are huge issues, far beyond Whistler's sphere of influence. But Whistler's leaders need to include them in the context of their decisions. In some cases they have; in some cases they appear to have ignored them and their impact on Whistler businesses.

The festivals, events and animation initiative announced this year is a reasonable plan to help bring people to Whistler and put more heads in beds. Getting people here has always been the first priority. The target is 60 per cent occupancy year-round.

But the municipality's approach in other areas, such as pay parking - a specific amount of revenue must be achieved annually - and four consecutive years of sizeable property tax increases, suggests less empathy for the plight of village retailers and restaurateurs.

Candidates for municipal office in November will be grilled about taxes and municipal spending, but they also need to demonstrate an understanding of national and international economics and their impact on Whistler. The economic recovery is stalled for now. There is another month of summer and then, for many Whistler businesses, things slow down again until the end of November.

It will be a long autumn for some.



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