Halifax, NS (10 February 2015): A new research report from the Atlantic Institute for Market Studies (AIMS) shows that Prince Edward Island’s (PEI) golf development efforts, which were intended to boost tourism to the Island, were largely unsuccessful. The paper documents a number of reasons for the policy failure and offers lessons from the experience for governments on the Island and elsewhere.
The paper’s title is “Short of the Green: Golf as an Economic Development Tool on Prince Edward Island.” The study’s author is Ian Munro, an independent economic and public policy consultant. Mr. Munro is a native of PEI and now lives in Halifax.
The Government of PEI decided in the 1990s to make golf development a centrepiece of its tourism and economic development strategies. Munro’s paper shows that these efforts did not produce a good return on investment for PEI taxpayers: “A number of basic but critical strategic questions were ignored amid the enthusiasm, hype, and optimism at the beginning of the golf boom in the 1990s,” says Mr. Munro. “Crucially, the government erred by taking on the roles and risks of being golf course owner and operator, rather than providing a sound business environment in which entrepreneurs could do what they do best.”
Mr. Munro argues that PEI’s government made “tactical errors” and that it “relied on simplistic projections, while failing to consider risks and alternative scenarios.” Approximately 25 years after beginning its golf strategy, Munro shows that the province has now spent millions of dollars and still owns four money-losing courses that it has been trying unsuccessfully to sell for years.
The paper shows that the crown corporation created specifically to operate provincially-owned courses has lost money in ten of the last fourteen years. In 2008, the provincial government finally wrote off more than $10 million in bad debt on Golf Links’ books.
“The strategy may have seemed compelling,” said Mr. Munro “but a combination of bad luck and strategic missteps resulted in a policy failure.”