And now for the bill: the cost of the Olympics
The BC government has released its final estimates of the cost of staging the 2010 Winter Games, highlighting the problems this government has with telling the truth (other examples include the 2009 pre-election fudge-it budget, and the HST). The Tyee reports:
British Columbia’s government spent $325 million more on the 2010 Winter Olympics and Paralympics than originally promised. The $925.2 million bill to taxpayers was disclosed in an unaudited Friday report and included a $50 million bailout for the recession-rocked Vancouver Olympic Organizing Committee. … The $925.2 million figure does not include costs borne by Crown corporations or government agencies that were VANOC sponsors or service providers.
… While the federal and B.C. governments contributed $580 million for venue construction, VANOC was supposed to fund its $1.76 billion operations budget primarily from private sources via broadcasting, ticket sales, merchandising and sponsorship. When the recession happened, all four revenue sources shrunk. Two sponsors — General Motors and Nortel — went into bankruptcy protection. VANOC was stuck with $12 million in unsold billboards that it gave to the province for a tourism advertising campaign.
VANOC’s final, audited report is expected in late fall. It stopped issuing quarterly reports last December, despite the 2002 Multi-Party Agreement with governments that said it must.
The Finance Minister, Colin Hansen, repeatedly claimed that the total bill to taxpayers would be $600 million. And it is worth noting that VANOC voted themselves bonuses on the order of $30 million last fall.
Back to the “we told you so” file, and I will quote myself back in 2006:
I should also point out, because the media have completely failed to, that the only cost-benefit analysis of the 2010 games was done by the CCPA. In a February 2003 report by Marvin Shaffer, Alan Greer and Celine Mauboules, the analysis used the 2010 Bid Book and some crafty calculations to estimate the net financial cost to British Columbians at $1.2 billion, and $2 billion if the new transit line to Richmond and the airport was included. The report stands the test of time quite nicely, I would say. And the authors at the time cautioned that â€œcosts could be substantially higher, and are subject to numerous risks. The Province of British Columbia, as the sole guarantor of the Games, is assuming all the financial burden of what is, clearly, a risky business venture.â€
And so it was. The 2003 report expressed its amounts in 2002 dollars, so add a bit of inflation and we were pretty close. In addition, the City of Vancouver has estimated that its costs of hosting the Games (additional to the BC government contribution) was $524 million in capital costs and another $30 million in operating costs, although some of this was for non-competition infrastructure that might have been done anyway. Similarly, provincial dollars do not include infrastructure investments like the Canada Line transit expansion and the Sea-to-Sky Highway expansion, both of which were pushed to the top of the queue by the Olympics but arguably might have happened at some point anyway. Nor does the provincial amount include the BC portion of federal government costs (BC has 13% of Canada’s population, so part of the party was financed by the rest of the country).
So were the Olympics worth it? It certainly was fun party, and Canada’s hockey gold medal may prove to many Canadians that costs were justified. If we call it $2 billion in net expenditures, that amounts to about 1% of provincial GDP. A fuller examination of the numbers is warranted, but whether you think the cost was worth it or not, you should be troubled by a government that is not honest with the public about the provincial finances.
Congrats to CCPA on the close estimate. I would scratch the bit about adding in a bit of inflation, though. To express actual expenditures in 2002 dollars you would have to DEFLATE the amount by the CPI, not “add in” the inflation.
I meant add inflation to the $1.2 billion estimate in 2002 dollars to compare to the $925 million (plus other government expenditures) in the recent report (2010 dollars). Sorry for any confusion.
Ugh. What can you really say. Even if they had stuck to their forecasts, it still would have been a ton of money to spend.