Reaching for Olympic Gold
Possibly the biggest question mark hanging over western Canada right now is whether the Games will turn a profit.
Even before the festivities of the opening ceremonies began, Canadian newspapers were debating the accuracy of official cost estimates and calculating “hidden costs” that could send the overall price tag for the global event into the stratosphere. A report in the Vancouver Sun newspaper pegged the bill for the 2010 Olympics at an astounding $6 billion, including at least $900 million in security to protect the participants from terrorists. According to the Sun, much of the actual cost is being hidden from the public.
British Columbia’s auditor-general, John Doyle, has complained that improvements that should be counted as Olympic expenses—including a $1-billion Sea-To-Sky Highway upgrading, a $1-billion trade and convention center, and $2 billion in improvements to the Canada Line—have not been included in the province’s official estimates.
Doyle “can’t dig out the province’s costs and he has all but thrown in the towel,” the Sun reported.
In addition to obvious infrastructure expenditures, there also were some “coincidental” outlays, the Sun says, including a $300-million “Olympic bonus” that unionized government employees got for signing a four-year contract that ends after the Games, and the cost incurred by the Canadian Education Ministry to develop an “Olympic curriculum.”
While the immediate economic benefits from the Olympics are relatively easy to add up—including nearly 200,000 Olympics-related jobs and a huge boost in tourist dollars and image-building for the Olympic venue and surrounding environs—the long-term impact is harder to gauge. If recent history is a guide, the outlook is not bright.
Former Olympic sites have left behind a staggering legacy of debt that has nearly sunk host cities financially, brought a nation or two to its fiscal knees, and even threatened an entire global currency.
The bills are still be paid for the 1976 Olympics in Montreal, which virtually bankrupted the city. Barcelona and Sydney also took huge financial hits. The frontrunner for Olympic disaster stories appears to be Greece, which ponied up an estimated $14 billion to stage the Summer Games in 2004. Greece’s Olympian tab currently is being cited as a major factor in that nation’s financial collapse this year, which is threatening to brink down the Euro, the EU’s unified currency.
London, which is set to host the Summer Games in 2012, also may have bitten off more than it can chew. After winning the site selection by boldly promising to rebuild an entire downtrodden industrial section of the city, the British capital is now sagging under the burden of cost estimates that are more than double what was budgeted.
No doubt it is a great honor and cause for celebration for any location to host the Olympics. We all revel in the spectacle of the world-class competition that will dazzle us for the next two weeks. But when the Olympic torch is doused in Vancouver as the 2010 Games end, let’s hope that beautiful Canadian city doesn’t drown in a sea of red ink.