When does an illusion become a delusion?

Commonwealth Games redux will cost taxpayers $1.5 billion we can’t afford

For those of you who like wizards, adventurers, mermaids and magicians, you are the true dreamers, and the tabling of the 2022 Commonwealth Games so-called business case was a wonderful day.

Most of us know the world is full of magical things and illusions, as we patiently wait for our senses and math skills to grow sharper.

All municipal, provincial and federal taxpayers — we are all one taxpayer — are asked to buy a ticket to one of the biggest, albeit second-tier sports shows on earth. So, do we hand over a billion-and-a-half tax dollars for an 11-day extravaganza?

A funding request — By any definition, the bid committee presented a request for taxpayer funding and not a business plan. They asked for $400 million from the federal government plus security and servicing costs, and $400 million from the province plus an overrun guarantee.

A business plan is a fundamental tool that any business needs to have in place before starting its operations and is a prerequisite for funding. A good business plan must include such things as underlying assumptions, detailed pro-formas (that is, forwardlooking financial statements), and the inevitable drawbacks and downsides and what will be done to address them. An incredible 85 per cent of the funding in this case will come from you, the taxpayer.

Third-party oversight — While the public has been asked by the bid committee “to trust us” about the numbers, where is the independent, third-party oversight from a financial firm to tell us with authority that they are realistic and add up?

With the municipalities asked to contribute a paltry $25 million to the $955-million budget, a thorough analysis is unlikely to come from them or the Capital Regional District. In other countries, such as Australia, which is hosting the 2018 Commonwealth Games, government auditors protect the taxpayer’s interests by evaluating the event and issuing regular reports.

Fatten up the legacy fund — One of the more clever sleights of hand by the bid committee is the promise to add $75 million to the $20-million sport legacy fund from Victoria’s 1994 Commonwealth Games.

Understand the $20 million left over from ’94 was hardly a profit, considering those games were heavily subsidized by the taxpayer. The so-called profit was simply excessive funds from the taxpayer.

Low-cost security fallacy — The funding request leaves out the costs for security, while asking the federal government (the taxpayer) to pay that bill. In the post-9/11 era, that will probably be an extremely large bill, in the order of hundreds of millions of dollars for RCMP, customs officials, CSIS, the Armed Forces and local police. The three venues in Vancouver will also require security.

The assertion by the bid committee that it won’t even cost $50 million, amounts to a “rabbit in a hat” illusion. Security costs are notoriously variable and unpredictable: 2010 Vancouver Olympics ($1 billion), 2014 Glasgow Commonwealth Games ($140 million) and 2015 Toronto Pan-Am Games ($180 million). The 2018 Gold Coast Commonwealth Games are still adding up the costs, and are trying to hire 4,000 private security staff over and above police and armed forces personnel.

The true cost — The true cost of any ’22 Games will be closer to $1.5 billion in 2022 dollars, not $955 million, as guesstimated by the bid committee.

So why do we think the final Games costs will be closer to $1.5 billion? For starters, security costs are unknown, inflation is historically low but increasing, a shortage of labour has seen construction costs rise, regional infrastructure upgrades will be required, unforeseen municipal costs are inevitable and a major hike in the minimum wage is planned.

A delusional budget — Bids of this magnitude and complexity usually take months to put together, not a few weeks during a languid summer. A truncated time-frame of four instead of the normal seven years will drive up all costs, the main reason Carole James, deputy premier and finance minister, is wisely weighing the project risks.

Mega sports-event costs around the world, including Victoria’s 1994 Games, have a long tradition of not being close to early budget forecasts. If they do come in on budget, or make a small “profit,” it’s because they’ve gone back to the taxpayer a few times for bailouts.

What’s promised for this $1.5-billion ticket is based on too many illusions. For most of us, the high-cost, high-risk and lowimpact 2022 Games adds up to a delusion.

Stan Bartlett chairs the Grumpy Taxpayer$ of Greater Victoria.