A possible Olympic bid shouldn’t skew our infrastructure plans

As Calgary’s Winter Olympic bid committee diligently carries out its ostensibly objective work, 2016 draws to a close with the mayor trumpeting the supposed economic benefits of playing host to the world.

The committee is set to report some interim findings next month, and again in April, before presenting its final recommendations in July on the idea of a 2026 Winter Olympic bid.

Naheed Nenshi has at times called himself a “bit of a skeptic,” but has also called the idea of a bid “a very exciting opportunity for Calgary.” Perhaps when a politician tries to balance a desire for legacy projects with a desire to be seen as prudent, such contradictions are inevitable. That was evident last week. Speaking last week before the Calgary Chamber of Commerce, Nenshi spoke of how an Olympic bid could open the door to an LRT link to the Calgary International Airport (sorry, the YYC Calgary International Airport). Later, though, the mayor conceded that the project is “quite low on the (priority) list,” but that “a whole bunch of federal funding for something like the Olympics” could allow the city to “accelerate” the entire list.

Of course, a cost-benefit analysis of a potential bid is supposed to be what this committee is investigating. Moreover, costbenefit analyses of infrastructure and transit projects should be separate from any talk of hosting the Olympics.

Alas, there are no economists on the bid committee, but sensible analysis and advice on these matters is readily available if Calgary’s elected politicians wish to hear it. We should be wary of having decision-makers fall into the trap of thinking the Winter Olympics are an automatic financial windfall.

As University of Calgary economist Trevor Tombe pointed out to the mayor on Twitter, “if project makes sense, fund it; if not, don’t.” He said the giddiness around the Olympics “risks tossing sensible cost-benefit (analysis).”

This is an important point. How crucial is it to extend the CTrain to the airport? If it’s already low on the city’s own list of priorities, then why should it be a priority for Ottawa?

Further to that point, Blake Shaffer, another economist at the U of C, weighed in with an important question for the mayor: “If a project only passes a cost/benefit analysis because we treat (federal money) as ‘free,’ is that in the public interest?”

To which Tombe half-jokingly described the pursuit of the Olympics as “rent-seeking,” a term that The Concise Encyclopedia of Economics describes as those who “try to obtain benefits for themselves through the political arena.” Perhaps this is not far off. Why should an Olympic bid be a shortcut to “free money”? Why the need for a cost-benefit analysis if that’s all rendered moot by supposedly “free” federal money? Of course, there really is no free lunch here.

Curiously, Nenshi seems well aware of this when it comes to CalgaryNEXT, the proposed arena-stadium hybrid for the West Village that would house the professional sports franchises of the Calgary Sports and Entertainment Corp.

With estimates on the project ranging from $1.3 billion to $1.8 billion, Nenshi last week described those costs as “unattainable in this economy.”

He’s right. Surely, though, a supporter of CalgaryNEXT could argue, just as the mayor has, that an Olympic bid could rain down federal cash on us and help fund the project. The reality is that each project needs to be weighed on its own merits and those deemed to be priorities need to have a funding plan in place.

We shouldn’t dress up infrastructure requests in the patriotic garb of a Canadian Olympic bid — especially when that garb comes with all sorts of other costs. If politicians wish for other levels of government to help pay for various projects, then make the case for that.

If a particular project is unlikely to happen in the absence of an Olympic bid, then maybe it was never meant to be in the first place.