Be a Good Sport and Forget $8 Billion Olympics

Be a good sport and try to forget the $8-billion price tag

Games benefits, once touted at $10 billion, are hard to pin down

By Vaughn Palmer, Vancouver SunFebruary 11, 2010

Before they light the cauldron to open the Winter Games on Friday,
one last look at the greatest of all international sporting events,
the dodgy business of underestimating the costs and overestimating
the benefits of the Olympics.

Dec. 12, 1997. "The Winter Olympics make money," according to
organizers of the just-getting-off-the-ground bid to bring the 2010
Games to Vancouver. But to be on the safe side, they need an
"investment" of $100 million from government. Tops.

Jan. 5, 1998. Premier Glen Clark proclaims "unequivocal" support for
the bid. "We just have to make sure there's a good business plan and
we're not subsidizing this."

May 1. As Clark hands over a cheque for $150,000 to jump-start the
bidding process, he releases the first official estimate of the
benefits: $1 billion worth of economic growth and 25,000 jobs.

Dec. 1. "Good news for B.C.," says Clark, as the province is named
Canada's official bidder for 2010. But he puts taxpayers on notice
that for the bid to succeed, the province will have to fund major
improvements to transportation infrastructure. "Significantly more
money," he confides. "It's not small. I'm not going to pretend it
is."

Nov. 23, 2001. "The Games will pay for themselves," says Premier
Gordon Campbell. "In British Columbia we are going to be sure of
that."

Jan. 16, 2002. The cabinet is advised that a successful bid is
dependent on an upgraded Sea to Sky Highway, a transit line linking
the airport and downtown, and an expanded Vancouver Convention
Centre. The Liberals approve all three, while never agreeing to
count one penny of the costs as a Games-related expense.

Nov. 20, 2002: Campbell releases a government-commissioned analysis
of the benefits of staging the Games. Incredibly, the two-week-long
sporting event is projected to generate $10.7 billion worth of
economic activity and 244,000 jobs over 35 years.

Oct. 14, 2004. A year and a bit after the International Olympic
Commission gave the nod to Vancouver, Vanoc boss John Furlong sings
the praises of the just-ended Athens Summer Games. "It may well be
the best Olympic achievement of all time." As he speaks, Greece is
already totting up a price tag that will eventually hit $20 billion,
setting in motion ripples of debt and default that today threaten
the entire European currency system. Another proud moment in Olympic
budgeting.

Sept. 14, 2006. The B.C. auditor-general lambastes Liberals for
failing to count all Olympic-related costs. In contrast to the
premier's insistence on $600 million, the auditor says the
taxpayer-supported tab is $2.5 billion and climbing.

July 11, 2007. The cabinet approves a revised budget of $885 million
for the convention centre, almost double the original estimate.

April 1, 2008. Vancouver's audited financial statements disclose
that council has quietly put the city on the hook for the full risk
of completing and marketing the $1-billion athletes' village.

Feb. 19, 2009. The security budget for the Games is revised upward
to $900 million and counting, as opposed to the Liberals' much
mocked figure of $175 million.

July 9, 2009. B.C.'s audited financial statements peg the full cost
of the public-private partnership on the Sea to Sky Highway at $1
billion, as opposed to the government-preferred figure of $700
million.

Aug. 18, 2009. The Canada Line opens, linking the airport and
downtown for a price tag of $2 billion, up from original estimate of
$1.4 billion.

Nov. 6, 2009. The government releases what is billed as "the most
comprehensive study" ever undertaken of the benefits of an Olympics.
In the first five years after B.C. secured the Games, Olympicrelated
spending (including construction and tourism) added a tiny one-tenth
of one per cent to the rate of economic growth and maybe 3,000 jobs
a year.

Feb. 8, 2010. The bailouts are at an end, suggests IOC boss Jacques
Rogge. No need for his organization to make good on its offer to
help close any gap in Vanoc's operating budget. Apparently the Games
can be staged for the current projection of $1.75 billion -- double
the original estimate.

Hope that he's right. For the ultimate financial guarantor of these
Games and all their trappings is the provincial government, not the
IOC.

The all-in cost for staging, venues, security, village, highway,
convention centre and transit line? Approaching $8 billion as I make
it. Yes, some of that will be recovered from sponsors, television
rights, ticketing and marketing. Yes, there will be legacies too.

But it would take the kind of cost-benefit analysis that has never
been done for an Olympics to say for sure whether taxpayers will
come out ahead for the dollars they are putting in, other than via
the not-quantifiable feel-good factor.

So enjoy the Games. You're paying more than enough for them.

After today, this column will relocate to the second section of the
newspaper, along with the rest of the non-Olympic news. It will be
back in this space in time for the March 2 provincial budget, the
first item in the B.C. Liberal government's carefully orchestrated
post-Olympic letdown. vpalmer@shawlink.ca