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It must be an example of that dry British wit. How else to explain The Economist dropping Vancouver from top spot in its livability rankings because of an accident that shut down a highway for 22 hours in April, especially when that stretch of road is 90-odd kilometres away and across the water on Vancouver Island?

But The Economist Intelligence Unit, a research component of The Economist Group, insisted Vancouver's fall to No. 3 was no joke. It argued that while the Malahat Highway example was a poor one, overall traffic concerns still would have knocked the B.C. city from the throne on which it has sat for a decade.

While critics questioned the usefulness of such surveys – one professor suggested they function only as a "smugness index" – The Economist warned an even steeper fall might be in the cards for Vancouver, after its infamous Stanley Cup riot.

Tuesday, the EIU announced Melbourne took top spot in its most recent livability survey. Vienna was second, with Toronto and Calgary placing fourth and fifth, respectively.

But it was Vancouver's fall that burned up the EIU's phone lines, particularly because of the perplexing rationale.

"In the Economist Intelligence Unit's latest survey for July 2011, a small adjustment in Vancouver's score for transport infrastructure, reflecting recent intermittent closures of the key Malahat highway, resulted in a 0.7 percentage point decline in the Canadian city's overall livability rating," the report read. "The adjustment is miniscule, and should not be considered significant in the context of the overall score, but it was sufficient to drop Vancouver to third position behind Melbourne and Vienna."

The 25-kilometre Malahat Highway runs north of Victoria and, including a ferry ride, is about 3 1/2 hours from Vancouver. Earlier this year, a fuel tanker crash closed the winding highway for nearly one day. The route typically is not used by commuters.

When reached for an interview, EIU survey editor Jon Copestake conceded he shouldn't have mentioned the Malahat in the report.

"I wouldn't say it was a mistake. I regret using it as an example," Mr. Copestake said from London.

"Even though it was on Vancouver Island, we felt that it was a good enough example to use of being reflective of the broader malaise, the broader increasing congestion that has been taking place across Vancouver. One thing that I underestimated was I assumed that the Malahat Highway would be something that Vancouverites might see as affecting them in some way."

Vancouverites disagreed. "Malahat" quickly became a Twitter trending topic, as the city's residents mocked the report.

"Has zero effect on our commute," wrote one tweeter.

Said another: "Uhhh, don't they know that the Malahat is ON THE ISLAND? #sodumb"

Mr. Copestake said the EIU knew exactly where the Malahat was and did not confuse Vancouver with Victoria, or Vancouver with Vancouver Island.

He went on to argue that even if he hadn't written about the Malahat, Vancouver would have finished third in the rankings because of traffic concerns. He noted that Highway 1 east of Vancouver is under major construction. The Port Mann/Highway 1 improvement project between Vancouver and the suburb of Langley is slated to run until at least late 2012, as crews work on a new 10-lane bridge.

"If Malahat wasn't included, I would have used Highway 1 as the example. We assumed the Malahat Highway would be the one that struck a chord with people more than Metro Vancouver congestion," he said.

Mr. Copestake stood by the report's methodology, which saw 140 cities surveyed by correspondents on stability, health care, culture and environment, education and infrastructure.

The report also suggested that: "Vancouver's overall score could see further downward revisions in future surveys following riots in June this year. Although the riots came too late in the year to have an impact on the score of the current survey, further unrest may affect scores for the city in the future."

Gordon Price, a reader of The Economist and director of The City Program at Simon Fraser University, said his impression of the renowned publication certainly took a hit with Tuesday's report.

"It takes away from The Economist a little bit. It's like deducting points from Melbourne because of the traffic problems in Tasmania. It's like, come on guys."

Mr. Price said he doesn't expect the survey to have much of an impact, except in one not-so-key area. "It probably has an impact on our smugness index," he said with a laugh.

"I can't imagine that it would make much of a difference to the bottom line."

Amber Sessions, spokeswoman for Tourism Vancouver, said it was disappointing the city would no longer be able to wave its banner as the most livable city. But she also questioned the influence of such surveys.

With files from Julien Russell Brunet