Province expects to recover Shania Twain concert money

Ryan Ross
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Tourism Minister Robert Henderson says tax on the tickets for the Aug. 30 show will repay investment

Shania Twain

When it comes to the government spending money on this summer’s Shania Twain concert, Tourism Minister Robert Henderson says it expects to make it back on the tax charged on tickets.

Henderson said the government is committing $250,000 to the concert through the P.E.I. 2014 fund as a sponsor and the nine per cent portion of the HST on ticket sales will repay that investment if the show sells out.

That doesn’t include the spinoffs from visitors to the province who pay for other things like accommodations, he said.

“There’s multiplier effects that can be calculated into this so we’re just trying to keep it very simple, very basic. It’s really the ticket sales where we’ll get our money back on the tax.”

Early ticket sales for the Aug. 30 concert were swift with the almost 4,000 grandstand seats already sold out.

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The concert will be held at the Charlottetown Events Grounds with a capacity of 28,000 people.

Ticket prices range from $89.50 to $179.50 and if the concert sells out that will mean about $2.8 million in revenues.

The provincial portion of the HST on those tickets would be more than $250,000.

Although the provincial government is spending $250,000 to sponsor the concert, promoter Donald K. Donald is taking on any financial risks associated  with putting on the show.

The concert is one of the centrepieces of Founders Week as part of the P.E.I. 2014 celebrations.

Henderson said if the government hadn’t acted as a major sponsor the concert might not have happened in P.E.I. and the province wouldn’t get the economic benefit.

“That’s the principle behind what we’re looking at being a partner in this significant event for Founders Week and the major concert for Founders Week.”

As for the economic impact of the province’s $5-million contribution to the P.E.I. 2014 fund, Henderson said the government plans to conduct a review after the year is over.

“Obviously the political issues and the public sometimes believes it’s all about parties and concerts and good times but there are significant economic benefits to tourism in this province.”

 

rross@theguardian.pe.ca

twitter.com/ryanrross

Organizations: Founders Week

Geographic location: P.E.I.

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Recent comments

  • leon
    April 24, 2014 - 12:02

    as a wise lady once said: stupid, stupid, stupid

  • Tobias
    April 24, 2014 - 11:47

    THIS IS RICH, - Gov. giving away anticipated HST before it is collected. How about not giving away anything, and collect the HST to help out the already overtaxed poor suckers that call themselves ISLANDERS.

  • Rob G
    April 24, 2014 - 11:06

    Scenario A: Government contributes $5 to a concert which sells $100 worth of tickets. There is a 5% sales tax rate so the government collects $5 in revenue and has broken even after subtracting their $5 investment (ignoring opportunity cost of capital and other factors). Scenario B: Government contributes $0 to a concert which sells $100 worth of tickets. There is a 5% sales tax rate so the government collects $5 in revenue and has made a profit of $5. In both scenarios ignore the illusive and unquantifiable "spin-offs" and "multiplier effect" that members of government like to throw around to justify investment decisions. In either scenario these benefits, if any, will accrue in the same manner. The Minister's assertion in this article that Scenario A is the best of the two scenarios for Islanders requires that you accept that but-for government's $5 investment, the event that leads to the ticket sales will not occur. I am not so certain of this. Every rational business person will look for the lowest cost and lowest risk capital to fund a business venture, and there is no lower cost or lower risk capital than a grant from government. For a rational business person it makes sense to weave a good tale and to make it seem that but-for the grant the business venture will not occur when you show up asking for the hand-out. In reality, the rational business person who is denied the grant will likely move on to higher cost and higher risk sources of capital provided that there is still a profit to be made. I find it hard to believe the government's $5 investment was the difference between a profitable and an unprofitable venture. If it is, then the venture should not be undertaken, as the government should not be in the business re-distributing $5 of taxpayer funds to cover concert related expenses (an enrichment of the business person) in a break-even Scenario A. I think that Donald K. Donald (who evidently had very cruel parents) would have still put on the concert without the grant, and that the taxpayers could have reaped the rewards of Scenario B.

  • Taking All but 250,000.00 PEI Gives
    April 24, 2014 - 09:17

    This is really pathetic governance of public funds with childish understanding of taxes…………rob Peter to pay Paul and then there is no revenue on taxes, we gave them away.

  • gobsmacked
    April 24, 2014 - 07:30

    Henderson said the government is committing $250,000 to the concert.... I will be speechless for the rest of this day.

  • Marie
    April 24, 2014 - 06:58

    Welcome PEI needs to boost this concert harder if all the tickets aren't sold out yet. This lady draws big crowds! Even we brainless ones know that it will affect incomes from the boat, hotels, restaurants and stores thus the greedy government coffers!