“Games’ being played with late Victoria bid
This opinion column also appeared in the Vancouver Sun on July 18, 2017 under the title ‘Games’ being played with late Victoria bid.’
Should taxpayers in the capital region, the Lower Mainland and B.C. shell out for another billion-dollar mega-sports event, the Commonwealth Games 2022, without knowing costs and risks?
First, a little background on this last-minute bid from Victoria.
Of two initial bids, one dropped out leaving Durban, South Africa, as the winner out of 70 Commonwealth countries. Durban was disqualified because of financial issues which reopened the bid process. Toronto and Edmonton applied then withdrew because of financial concerns. Now incredibly, there’s four years to pull it off instead of the normal seven.
A Victoria bid committee, headed by newspaper magnate David Black, submitted a bid at the end of June to be followed by a business case at the end of September. They’re scrounging around for tax dollars.
What can we learn from Vancouver’s 2010 Olympic Games, a similar and recent event?
True the Olympics got side-swiped by the 2008 global economic crisis and the bankruptcy of sponsors like General Motors and Nortel. In the end, the federal and provincial governments coughed up $200-million to balance the books.
In early 2011, the Auditor General of B.C. decided not to conduct a post-Games financial analysis.
Cost estimates for hosting the Vancouver Olympics and building related infrastructure range from $5-billion to $9-billion ($6.1-billion to $11-billion in today’s dollars), including VANOC operating costs of $1.9-billion, according to a Toronto Metro newspaper in 2014. That said, taxpayers considered the final VANOC report incomplete with many documents unavailable until 2025.
Labour, security and land costs has skyrocketed, and will assuredly escalate because of unforeseen events before 2022. Hard-pressed municipalities will have the fewest options for raising its contribution.
Although total costs will never be known, there’s a better idea of the economic impact.
A 2011 PricewaterhouseCoopers report for the federal and B.C. governments estimated the province’s economy got a boost of $2.3-billion between 2003 and 2010, far less than the $10-billion forecast by the province.
Victoria Commonwealth Games organizers won’t divulge much yet, but promise to keep costs under $1-billion and to hold a modest event.
At this point the bid committee is considering housing at the University of Victoria ($100-million) and downtown ($80-million), new athletic sites ($80-million), and adding to a sports legacy fund ($50-million). It will infuse hundreds of millions of dollars into the province.
Besides infrastructure, the perceived economic benefits include increased tourism, new business development, higher employment, and a general boost to the local economy. Announcing a marquee sports event before a municipal election in 2018 might help change public discourse and save the skins of a few of the 91 local politicians.
Many residents expect these benefits are illusionary: Several municipalities don’t support the bid. A hot local economy is already causing labour shortages and higher construction bids. Accurately estimating security costs – VANOC’s security budget skyrocketed to $900-million – in a troubled world is particularly worrisome.
This mega-event has the potential to vault Victoria into the world spotlight and give it a huge economic boost. But with the current political instability in B.C., securing provincial and federal financial support and mitigating any downsides is far from certain. It poses an undue risk to all taxpayers.
Victoria is already experiencing an unprecedented economic boom, partly driven by a housing boom and large public infrastructure projects such as a $765-million sewer treatment system and a $106-million bridge. While we never will know final costs, we know the skittish local taxpayer pays for overruns.
It’s critical there’s broad community involvement and transparency to ensure Games success. It’s equally important governments and the bid committee provide governance and oversight that’s respectful to ratepayers.
On June 28, the Capital Regional District (CRD) passed a motion to support the Games providing there’s a business case approved by the 13 municipalities. Discussions were held in secret and behind closed doors, so it’s unknown which municipalities are opposed. It’s also unknown if directors had the benefit of an evidence-based report and staff recommendations.
The CRD, a dysfunctional and undemocratic administrative body delivering shared services to the region, hardly equals a broad community endorsement. A binding referendum certainly would carry considerable more weight.
A business case must be soberly scrutinized by an independent financial firm, or at a minimum, by financial resources at the CRD to figure the inevitable local tax levy.
Taxpayers want to know if they can still afford to feed the seagulls.