The March 10 Saturday Okanagan featured the story “Hoosegow Cash Cow” reporting that the recently announced prison will add $824 million in “new revenue” to the local economy over 20 years, and support 240 direct and 893 indirect jobs.
The article referenced a report to Penticton’s CAO from the city’s economic development officer. I requested a copy of this report, and City of Penticton officials subsequently advised they have no paper or electronic copy of this important document. The question is whether this estimate of positive economic impact is realistic.
Underlying assumptions were not presented. For capital, what per cent of construction would go to Okanagan companies? What per cent of materials are “regional” given we don’t produce most steel, aluminum, plastic, electrical components, etc. locally. For operations, large portions of food and office supplies, clothing, equipment, fuel, etc. are produced or purchased elsewhere.
The estimate of 893 indirect jobs in particular requires review. A “test” by an economist associate, using the B.C. Ministry of Transportation regional input-output model, suggests indirect and induced job levels for B.C. could be around 100, of which about 20 would be in the Okanagan, given out-of-region sourcing (i.e. “leakages”). This is a significant difference. Without public availability of the EDO’s report, citizens have no way of assessing the estimates cited, which appear high and may have distorted decision making.
Analysis should also present a full benefit-cost picture and a net assessment that considers both extra costs, such as those for additional policing and community services; and risks, including “reputational”, associated with a prison. (The mayors of Maple Ridge, Kamloops, Drumheller and Surrey have each commented publicly on such jail-related concerns in their significantly larger communities.)
Certainly jail-related employment and spending will help support local businesses and facilities. Lease fees will enhance financial capacity for the Osoyoos Indian Band. Whether the prison will be an enduring net benefit to the South Okanagan remains questionable.
With 720 inmates indicated, the South Okanagan prison will house about five times our per-capita share. Therefore citizens can legitimately ask: Where are the balanced benefit-cost and risk assessments?
Why are estimates of benefits (as reported in the press) unavailable for public review?
Transparency on these and other questions is essential. The concern is that regional “revenue” from the “cash cow” was seriously over-estimated while costs and risks to communities were not explicitly assessed.
Denis O’Gorman
Penticton