Excerptcize

This past Monday, the local 24 Hours newspaper featured an article entitled “Let the Bailout Games begin“. While the piece,  by 24 Hours staff writer Bob Mackin does contain many good pieces of factual information, I do

have to take issue with some of the analysis and accounting within. To start with, Mackin writes the following:

Amid the Great Recession a year ago, VANOC’s message was all about being the shining light to guide B.C. to recovery because it had a billion dollars to spend. Spring came and chief executive John Furlong admitted a profit was unlikely.

Both of these sentences are accurate enough, but I have no idea how one idea is related to the other. The way they are linked in the piece makes it seem like the author is concluding and implying that since the odds of VANOC generating a profit have diminished since a year ago, spending on games related endeavours does not aid in economic recovery. I am no economist and I don’t have any specific numbers to cite (partly because I am having a hell of time getting the relevant data from the Stats Can webpage) but I am quite confident in asserting that injecting a billion dollars (or more, depending on what number people are tossing around as the ‘cost’ of the Games at this time, more on that later) is, and has been, very beneficial to economic recovery.

Mackin’s article then goes on to mention the Olympic Village in Vancouver. While the term ‘bailout’ is more than appropriate to apply to the measures the city was forced to take a year ago to ensure financing for the village, the article, along with many others when discussing the athletes village look at the $1 billion dollar price tag on the project as if it is money that is gone down the tubes, never to be seen again. Nothing could be further from the truth. Once the games are finished most (if not all) of the units will be sold on the open market, and in case you haven’t noticed, Vancouver’s insane real estate market has more than recovered since last year. While a profit is no longer expected from these sales, the city does expect to break even, and with the recovery of the housing market, turning a profit is not out of the realm of possibilities. What is most distressing about the village is the potential for there to be no lasting affordable housing legacy. This would be shameful, and ideally will not come to pass with the healthy rebound in prices Vancouver has seen this past year. Further to serving as the Athletes Village during the games, new housing and hopefully affordable housing post-games, the facilities at the site are also state of the art ones that feature some of the latest technologies in energy efficiency; this further adds to the value of this investment.

The last point that I want to highlight from Mackin’s article is one that you find in other places as well, a bottom line number for the cost of the games. Mackin says “a layman with a calculator can estimate $6 billion on Games-related road, rail, infrastructure and security alone.” And he is correct; I am a layman, and adding up the cost estimates from the No 2010 Games webpage one can easily get more than $6 billion. Here’s how:

• Venue Construction and improvements: $600 million
• Sea-to-Sky Highway expansion: $600 million
• Canada Line/Richmond-Airport-Vancouver (RAV): $1700 million
• Vancouver Convention Center: $800 million
• Gateway Project: $3000 million; expanding Trans-Canada Highway from Vancouver to Langley; twinning of Port Mann Bridge ($1.5 billion, to be a toll bridge); new Pitt River Bridge; new South Fraser bypass route from Delta Port to Surrey
• Security: $1000 million

Total: $7700 million

I will be the first to agree that the billion dollars for security is way too much; this price tag speaks to the ever growing post 9/11 security state in this continent, and in my opinion is a poor allocation of resources. Security is a one off cost that does not have any positive impact on the city or region post-games. Our increased security ‘vigilance’ is a subject that needs a whole other post.

Every other expenditure listed above however is an investment in infrastructure that will far outlast the games. Some of these capital expenditures were desperately needed for many reasons beyond the games, like the Sea to Sky Highway. Not only did this stretch of highway need to redone, it is a big investment in public safety as well. The Canada Line is a magnificent transit anchor linking YVR, Richmond and Vancouver. The city should be exceedingly proud of it. While the Convention Centre was not a needed addition, it is a welcome  one and will also serve as an economic engine in the city for years to come.

So, while I can’t argue with the fact that you can generate a bottom line number of $6 billion, or more, they are not strictly costs. In fact the majority of the expenditures are investments that will generate a return for the city in the long run. Whenever the $6 billion figure is used, it is most likely by someone who is not in favour of the 2010 Games. It is fine to opposed to the games themselves, and reasonable people can discuss the pro’s and con’s of hosting the Olympics, but to try and argue that the city, province and country have ‘lost’ that large amount of money for a two week event is most certainly disingenuous.

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