The Games Begin - Macleans.ca

The Games Begin

Vancouver gets the Olympics; the rest of us get their rising cost

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Being the opposition critic for the Vancouver 2010 Olympics hasn’t been the easiest of jobs for Harry Bains, a New Democrat MLA and former labour leader. Bains is regarded by the governing Liberals as, quite literally, a spoilsport for cocking a skeptical eye at the Games’ finances. Criticize the Olympics? You might as well trash the very spirit of British Columbia, and Santa Claus, puppies, and all things sweet and good. The opposition only “pretend” to support the Games, says B.C.’s finance minister, Colin Hansen. “In fact, they’re using so much misinformation and spreading so much fear among British Columbians that they are, in fact, doing the exact opposite.”

But the Liberal strategy of branding its critics as Olympic bashers is fraying badly. The recession and the epic cost overrun of the Vancouver Olympic athletes village—$125 million and counting—is raising public alarm. Vancouver’s problems are so acute that the B.C. legislature convened a rare emergency session last Saturday. After 20 rancorous hours of debate the government and opposition granted Vancouver unlimited borrowing authority to finish construction of the condominium project on False Creek that will serve as the Olympic athletes’ village. Mayor Gregor Robertson said the city may borrow as much as $800 million to finish the project and buy out the current lender, Fortress Investment Group, a troubled U.S. hedge fund. Fortress advanced the city $315 million of a promised $750 million—at 11 per cent interest—before suspending further financing last September. The Fortress debt alone costs the city $87,000 a day in interest.

Vancouver’s plight, while significant, may be the least of taxpayers’ problems. The true cost of the Games—including such crucial items as security, as well as fast-tracked highway, rapid transit and infrastructure projects—defies calculation. The provincial government insists its Olympic budget remains at $600 million. Meanwhile, it has spread other Olympic-related spending across departments in such a Byzantine fashion that even the provincial auditor general can’t find the true cost. An auditor general’s report in 2006 concluded “the current estimated minimum cost of the Games is $2.5 billion, of which $1.5 billion is attributed to the province.”

Since then, the government and the auditor’s department have been locked in a dispute over whether all or part of such projects as the $775-million upgrade of the Sea-to-Sky highway to Whistler should be included as Games ex­­penses. No, says the government, which even insists its $41-million-a-year Olympic Secretariat, established to manage Games finances, isn’t an Olympic expense. Auditor General John Doyle said if the risks aren’t disclosed, he can’t issue an updated audit. “Should these risks come to pass,” he warned in a letter in December, “the cost of staging the Games could escalate considerably.”

With a provincial election set for May 12, the New Democrats sense Liberal management of the Games may be the edge they need to deny Premier Gordon Campbell a third term, and a chance to play host in February 2010. “It’s precisely that lack of scrutiny that’s at the root of spiralling Olympic costs and plummeting confidence in the Liberal government’s truthfulness about those costs,” Opposition leader Carole James told the legislature Saturday.

Bains keeps a list of Olympic costs, adding to it as he finds new information. It includes such things as the $20-million cost for a road into the Nordic Centre at the Callaghan Valley, sponsorships of $15 million each by such public entities as B.C. Hydro, the provincial lottery and insurance corporations and the Royal Canadian Mint, the $900-million expansion of the Vancouver Convention Centre, and security. “I’m sitting at a $4.5-billion cost to the taxpayers so far,” Bains says.

Hansen calls such estimates “exaggerations.” But he concedes the province is at odds with Ottawa over security costs, once optimistically estimated at $175 million. For that number to hold true, Osama and Obama would have to link arms and sing Kumbaya. Former federal public safety minister Stockwell Day has put the costs at a more realistic $400 million to $1 billion. In fact, no Games since Salt Lake City in 2002 have had security costs under $1 billion. Hansen claims B.C.’s portion is just $87.5 million, a share of venue and athlete protection. The rest, including air, border and marine security, he sees as federal responsibilities. (The feds’ total contribution to the Games is about $665 million.) Both Campbell and Prime Minister Stephen Harper say there will be no additional funds, a difficult pledge to keep, as generations of Olympic hosts have learned.

Expect a face-saving compromise on security costs buried in the recessionary federal and provincial budgets, due within weeks. Cheaping out on security simply isn’t an option. When you invite the world, the guests must be kept safe. The taxpayer, however, is collateral damage.