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2010 Carte Blanche

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Issue: 64 Section: Business Geography: West Vancouver Topics: economics, 2010 Olympics

February 11, 2010

2010 Carte Blanche

Olympic spending tallies won’t come in till the party’s over

by Dawn Paley

Montreal's Stade Olympique cost taxpayers $1.61 million but the time it was paid off, earning the moniker "The Big Owe." Photo: nessguide [cc 2.0]

VANCOUVER—“There’s nothing wrong with a scaled down Olympics,” said CTV sports anchor Brian Williams in his keynote address at the 2009 Webster awards in Vancouver.

Williams' comment was met with applause by hundreds of journalists in attendance for the ceremony marking the year's best reporting in BC. They seemed to have forgotten that beyond some cosmetic cuts, there is little that has been scaled down for the 2010 Games in Vancouver.

Instead, the cost of the games has risen drastically. In 2003, the Auditor General of BC estimated that the total cost of hosting the 2010 Olympics would be $2.89 billion.

A protester holds a placard challenging the notion of an "illegal" sign at Vancouver City Hall. Photo: Miné Salkin

The report estimated BC would incur costs of $1.2 billion related to hosting the Games. This estimate left out most infrastructure costs, but the figure was twice the amount touted by the Vancouver Organizing Committee and the BC government, who claimed the Games would cost the province $600 million.

The cost to the federal government for hosting the Games was also underestimated. For example, the security budget, originally estimated at $175 million, has since ballooned to over $900 million, more than two thirds of which will be covered by the feds.

The Economist reported in September that BC’s costs for the Games are closer to $4.75 billion, an estimate that includes the Sea to Sky highway expansion, $1 billion for the Convention Centre (which will house media during the Games) and the $2 billion Canada Line extension of the Sky Train. Add to that the security budget and other costs, and the tab is at least $6 billion.

At the municipal level, Vancouver City Council had to bail out the developers backing the construction of the Olympic Village with $458 million.

“I’m willing to bet that it’s going to be a pretty expensive party, once it’s all tallied up,” Marc Lee, an economist with the Canadian Centre for Policy Alternatives, told The Dominion at his office in Vancouver.

“We won’t know until it’s over how much we ultimately spent on it.”

Whatever the cost overruns, the province of British Columbia will be the one to pick up the tab. “Any cost increases or revenue shortfalls the [Organizing Committee for the Olympic Games] cannot control—arising from inflation, interest or exchange rate fluctuations, the state of the economy, world threat levels, weather events and so on—are a financial responsibility of the Province,” reads a 2003 report from the BC Auditor General.

All levels of government have announced large deficits and spending cuts over the last few months.

Vancouver now faces a shortfall of $61 million. Since the city is not allowed to run a deficit, this will mean new rounds of cuts and tax increases.

The provincial government suspended balanced budget legislation for the second time this year, and will now run four consecutive years of deficits. The deficit forecasted for 2009-2010 is $2.8 billion, BC’s largest ever.

The federal government changed their budget estimate, upping the deficit to $51.9 billion over the next six years.

A recent report by Toronto Dominion Bank suggests that the federal deficit over the next year for Canada and all the provinces combined could equal $100 billion.

These revenue shortfalls result in part from the global recession and falling commodity prices, and are being used to justify even more cuts to the social safety net in BC and Canada.

Lee said he wouldn’t be surprised if VANOC tables a “massive” deficit as the games close out, which would be rolled into the provincial budget and become “part of the justification for further cuts elsewhere.”

BC’s economy brings in about $200 billion a year in revenue, leading some people to argue that even if the total cost of the games checks out higher than the current $4.75 billion, it would be a relatively small portion of provincial spending.

But, counters Lee, motioning out his office window towards Vancouver's downtown east side, “symbolically, the challenges out there on the street, and the need for housing, and other infrastructure, and just the sheer amount of political energy that’s been put into the Olympics, you kind of wonder whether there could have been better uses of that money.”

Dawn Paley is a journalist in Vancouver. She is covering the Olympics at 2010.mediacoop.ca.

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Comments

BC's demise

Campbell and Hansen, have slaughtered this province, all for Campbell's glory of the Olympics. BC, is already an empty morass. Campbell and Hansen, have been selling BC's assets and natural resources, I understand, some of those deals smelled a little skunky. Those assets and resources, did not belong to Campbell, they belonged to the citizens of this province. Some of BC's mills were sold to China, creating a ghost town. Campbell, has cut services so badly, they are not able to function. The HST, supported by, Harper and Iggy, will absolutely cause, a multitude of homeless people in BC. There are no jobs, citizens have lost their homes, their vehicles, their savings are gone. Seniors on a fixed income, are already being made homeless, food costs have risen by 27%, they can't afford heat, so their gas gets cut off. The Olympic deficit, will be a hell of a lot higher, than people think. Campbell and Hansen are desperate to hide that deficit. That's why Campbell, tried to choke off the FOI. Good grief, all of this because of the Olympics.

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The Dominion is a monthly paper published by an incipient network of independent journalists in Canada. It aims to provide accurate, critical coverage that is accountable to its readers and the subjects it tackles. Taking its name from Canada's official status as both a colony and a colonial force, the Dominion examines politics, culture and daily life with a view to understanding the exercise of power.

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