Taxpayers in Saskatchewan are paying nearly $700,000 to cover a profit guarantee, promised to support the Memorial Cup in Saskatoon in 2013.
The guarantee was needed to secure the tournament from the Canadian Hockey League which was assured the event would net the organization $3.5 million.
'It brings people to our province and it enhances the quality of life for our citizens.'- Tourism Minister Tim McMillan
The event fell short of generating that much money and the provincial money, as well as money from Saskatoon, is needed to reach the guarantee.
According to the provincial minister responsible, Tim McMillan, the profit target was short by about $1 million.
The province agreed to pay $667,797 as its contribution to make up the shortfall. The remainder is due from the City of Saskatoon.
McMillan called it a worthwhile expenditure.
"We want to see the economic benefit to our province and our community," McMillan said. "We also want to showcase our tourism sector in our province to a national audience and I think that both are important."
The provincial agency providing the money is Tourism Saskatchewan. The Memorial Cup, which was played in May, was awarded to Saskatoon in 2011.
Prior to the games, the province also spent $250,000 to spruce up Saskatoon's hockey arena.
"We think it's important to showcase our province," McMillan also said. "And hosting events like this it showcases our province. It brings people to our province and it enhances the quality of life for our citizens here in Saskatchewan that attend these events as well."
Even though the week long tournament fell short of its profit target, McMillan said it was a "successful event."
"It raised a profit, but not all the way to what the guarantee was," he said.
Organizers said, after the tournament, that the 2013 Memorial Cup had the fourth-highest attendance total in championship history at 82,503 over nine games. The average attendance per game of 9,167
Profit guarantees typical
McMillan added it was not unusual for events to ask for a profit guarantee.
"Some models come forward with an upfront grant, like the Junos. They asked for a $1.5-million grant, regardless of success of the event," he said. Regina hosted the Junos in 2013.
McMillan also pointed out that the world juniors, in 2010, included a profit guarantee, but that event met the mark and no additional funds were needed from the province.
According to McMillan, the Memorial Cup generated about $11 million in economic spinoff for Saskatoon.
"If the bid committee came to Tourism Saskatchewan and said, 'We would like to host a Memorial Cup [and] there's an upfront grant of about $900,000 to host a week-long event that has a national exposure, that brings the number of tourism and economic benefits to our province and to the city of Saskatoon,' would we consider an upfront grant, straight away of $900,000?" he said. "Yes, it would certainly be within range of the types of events and at the grant amount that we would normally be looking at very seriously."