Olympic Debt Keeps on Rising
The running tab for the Olympics is running and running
By Vaughn Palmer, Vancouver Sun, January 12, 2009
VICTORIA — As Vancouver residents prepare to take an Olympic-sized bath, the rest of us are scarcely home free on our share of the cost of staging the 2010 Winter Games and related projects.
The full tab is hard to estimate, partly because of economic uncertainties, partly because governments are still reluctant to provide all-in costs for some of the biggest items on the list.
But a good starting point is a cabinet briefing seven years ago this week, as the then new-to-office B.C. Liberal government prepared its final (and ultimately successful) push to secure the 2010 Winter Games for B.C.
The Jan. 16, 2002, briefing was conducted by Jack Poole, Premier Gordon Campbell’s handpicked choice to head the 2010 bid. He started off with a huge caveat. “Please don’t hold us to these numbers,” he told the assembled ministers. “These are orders of magnitude numbers.”
But the cautionary tone soon evaporated as Poole got to forecasting the bottom line for staging the Games.
“In the best case — I mean if we really hit a grand-slam home run — we could make a $200-million profit. The worst case would be break even. If it was a disaster — something that nobody anticipates for this event” — oh, really? — “we could lose $100 million.”
Therefore, “there’ll be no further government funding for the operation of the Games,” the bid master went on to advise the Liberals.
“Other than security,” he quickly added. “That’s not covered.”
No small exception, as anyone familiar with the still-not-capped Olympic security budget would attest.
Nor was Poole finished running up the bill. He proceeded to pitch the cabinet on three megaprojects, each in his view critical to securing the bid.
The Sea to Sky Highway. “We really need your help on this. The bid really doesn’t have a chance without that.”
The Vancouver convention centre expansion project. “The Games need it desperately. We’ve got to have somewhere to put the 10,000 media.”
A new rapid transit line linking the airport to downtown Vancouver. “A huge asset to the bid,” Poole argued. “With it, our chances will soar.”
The Liberals bought the argument and endorsed all three projects. Each was instrumental in helping carry the day, as B.C. landed the Games by the narrowest of margins over rival South Korea.
All three projects have since been defended as needed infrastructure that would have been built anyway. But it is not clear that those were the top priorities for scarce public dollars, nor was it necessarily cost-effective to fast-track construction in the midst of a private sector boom.
In any event, for the Sea to Sky Highway, figure $1 billion, including the fixed construction cost, interest and some (but not all) of the future payments to the private partner. For the Canada Line, another $2 billion, not including possible compensation to outraged merchants along the route.
Add $1 billion for the wildly over-budget convention centre project, plus renovations to B.C. Place, an added cost that was long denied by the B.C. Liberals.
Say $1 billion for security until the federal and provincial governments see fit to share a more precise number with the public.
Then throw in another $1.5 billion for contributions by federal, provincial and local governments and Crown corporations, including venue construction, staging, promotion and such supposedly non-Olympic undertakings as the budget for the Olympic Secretariat and 2010 Legacies Now.
Even without a reckoning for Vancouver’s share of the Olympic village fiasco — $200 million minimum, I’d guess — the running tab for the Games and Games-related projects is somewhere between $6 billion and $7 billion.
And still running.
On that score, I give you a headline from last week. “Fewer people travelled to China despite Olympics,” said a story tucked deep inside the Report on Business in Friday’s Globe and Mail.
“The number of travellers to China dropped by two million in 2008 in what was supposed to be a banner year for tourism but became one dampened by Olympics-related security measures and the global economic crunch.”
For all the billions spent by the Chinese — for all the spectacle of that opening ceremony — Beijing missed its Olympics tourism target by 22 per cent. And this while staging the Summer Games, which are generally at better draw than the winter version.
B.C.’s opening day is still 394 days away. What could possibly go wrong?
Plenty.