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Canucks' playoff run has economic winners and losers

Restaurants with large TV screens, or those that are delivery-oriented are set to benefit.
Avid fan Takuma Hondo visited Vancouver from Vancouver Island to watch the last home game of the season. He bought an Elias Pettersson jersey before heading home | Chung Chow

When the Vancouver Canucks hit the ice tonight against the Edmonton Oilers in the team's first home second-round playoff game in 13 years, fans across the region will be glued to TV sets and gathering in pubs and restaurants that have large-screen TVs.

Those activities are set to spur economic winners and losers, according to economists.

Restaurant industry advocates and payment processors are quick to point at higher spending at sports bars as evidence that the regional economy will benefit from a longer Canucks playoff run. The reality is more complex. 

One age-old economic lesson is the broken-window fallacy. It holds that people often focus on an event's immediate effect and ignore or fail to think about long-term consequences. Sometimes the myopic economic view focuses only on one sector, while ignoring others.

In the broken-window fallacy, a vandal throws a rock through a suit seller's store window, causing some to say that the economy would benefit because the suit seller would have to buy a new window, creating work for glaziers and window installers. Those people may not consider, however, that instead of buying the window, the suit seller was intending to spend the money on other retail items – products that he or she can no longer afford.

That fallacy may be applied to government programs, which spend tax dollars on specific projects but limit the general population's ability to spend their own money because it was taxed away.

When Canucks fans spend money at restaurants, they are likely to cut back in other areas in order to keep their budgets balanced because unlike governments, they are not able to run bottomless deficits. 

"Spending on going to the next Canucks game will probably come out of the summer travel budget," Simon Fraser University associate professor Lucas Herrenbrueck told BIV.

He added that the spending may prompt those people to decide not to visit their local jazz club, go to the movies or shop at malls.

Restaurants that do not have TV screens, or fine-dining establishments, could lose business if potential customers choose instead to watch the Canucks game, he said.

Retail spending declines do not need to come immediately.

They could come in the lead-up to summer, when consumers' next Visa or Mastercard bills arrive, and those consumers decide to cut back in various areas, he added. 

Herrenbrueck added that the zeal to go to sports bars and spend a lot of money during Canucks games is really only felt among a small minority of the population. 

"I don't [feel that need,]" he said. "I'm sorry. You've got the wrong guy."

Other economists largely agree.

Central 1 Credit Union chief economist Bryan Yu told BIV that merchandise sales for Canucks garb might hurt sales in other items in the economy but that the impact would be minimal because most fans already have shirts or hats in their closets. 

He remembers what he called "not a huge" spike in food-service sales the last time the Canucks went far in the playoffs and were able to have home games: 2011.  

"The trend was a little bit of a pick up in terms of overall food service sales during that April-to-June [2011] period, but even that was not that noticeable," he said. 

Food courts at malls, for example, may be much quieter during Canucks games, and those businesses do not see customers buy twice as much the next day to make up for skipping a visit. 

Nonetheless, payment-processor Moneris recently provided data to highlight how NHL playoff games can stimulate spending in a short time period. 

"During Round 2 of the 2022 playoffs, the local Edmonton restaurant industry near the arena saw a 233 per cent increase in spend during the Oilers Game 3," Moneris said in an April press release. 

"Spend volume nearly tripled (183 per cent) around the Bell Centre before the 2021 Montreal Canadiens' Stanley Cup finals game to get food and drink. With the Habs winning in overtime, fans hung around to celebrate causing huge increases in spending around 11:30 p.m. near the Bell Centre (160 per cent), in Montreal (245 per cent) and across Quebec (137 per cent)."

Clearly sports bars in Metro Vancouver will benefit from the playoff run.

"It's pretty obvious that it happens," said Ian Tostenson, CEO of the BC Restaurant and Foodservices Association (BCRFA), which conducted a study on the matter in 2015 – the last year the Canucks hosted a home playoff game.

"People go to their favourite spots about an hour before the game, and the sales of beverages and food start to go up. Then, all of a sudden, the game starts. When the Canucks score, beverage sales go up. If the Canucks don't score it gets kind of neutral. If the Canucks win, they stay longer and celebrate, and if the Canucks lose, everybody goes home."

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