Calgary needs to walk away now

Olympics would be misadventure it cannot afford

By almost every metric, Calgary’s grand plan to recapture Olympic glory is a bad idea.

For starters, Olympics have become blisteringly expensive since the 1980s.

Calgary’s 1988 Olympics cost $829 million — $1.5 billion in 2017 dollars. Now, the estimate is $4.6 billion. And given the recent history of Olympic cost overruns, that figure is virtually guaranteed to swell by at least 20 per cent.

For context, Calgary’s entire municipal operating budget for 2015 was $3.5 billion. If divided equally among Canadians, $4.6 billion is about $131 apiece — enough to give a free offseason Calgary hotel stay to every man, woman and child in the country.

But one reason for the Olympics’ ballooning cost is that the International Olympic Committee keeps grabbing an ever-increasing share of revenues for itself.

In 1988, Calgary’s organizing committee had to hand over roughly a third of broadcasting revenues to the IOC. Nowadays, the IOC claims more than 70 per cent.

IOC avarice, in fact, appears to have been a major reason behind Norway’s decision to abandon a bid to hold the 2022 Winter Olympics games in Oslo.

A leaked 2014 report to a Norwegian newspaper outlined the obscene requests made by IOC officials, including demanding smiles at their hotels, free booze paid for by the King of Norway and a separate Oslo road system.

The Calgary boosters might contend that their Olympics make sense because they will be recycling old venues. True, but many of those venues are now out of date and would be in need of significant upgrades.

The roster of Olympic events has also swelled, with such new sports as snowboard and team luge.

In 1988, 1,400 athletes came to Calgary. At the latest Winter Olympics in Sochi, 2,900 made the trip.

Vancouver spent $2 billion purely on staging the Olympics; infrastructure and security was extra.

Another popular myth among game boosters is that they will serve as a moneyprinting economic engine to hoist Calgary out of recession.

“Considering the status of our economy right now, it would have a very powerful impact on the city and the province,” Doug Mitchell, founder of Calgary’s Sport Tourism Authority, said in January.

As a purely profit-making venture, the Olympics obviously don’t work.

The United States likes to boast that its past three Olympics all turned a profit. The 2002 Winter Olympics in Salt Lake City, for instance, wrapped up US$56 million in the black. However, this ignores the more than US$600 million in government grants that were needed to stage the games.

Olympic Games also consistently fail to deliver on the macroeconomic ripple effects that their boosters promise.

The European Tour Operators Association, for one, has consistently campaigned against the idea that the exposure of an Olympics boosts tourism.

“Olympic visitors do not behave like normal guests … They do not come to sightsee, attend the theatre or recreate themselves on a beach. They come to attend a sporting event,” the group wrote in a 2008 report documenting the “post Olympic blight” suffered by host cities.

The 2010 Vancouver Olympics were notable for their legacy planning, which largely avoided the empty venues common to other former hosts.

But even then, a 2014 economic study of the Vancouver games found that they were great at funnelling government infrastructure cash into the city, but had a negligible effect on tourism or economic growth.

It also doesn’t help that two recent Olympic hosts — Athens and Rio — saw their countries plunge into financial chaos right around the time they were lighting the Olympic torch.

In fact, now few cities are gunning for the Olympics. In a selection of summer games host cities this week, the IOC simply gave an Olympics each to the only two cities who showed: Paris, which got the 2024 summer games, and Los Angeles, which got 2028.

The Calgary boosters might also say “but what about Vancouver? Vancouver got to hold a Winter Olympics. Why not us?”

Canada’s past Olympics were indeed held with a cost overrun of only 17 per cent — the lowest of any Winter Olympics of the previous 50 years.

But Vancouver also held its Olympics at a time of significant economic growth and expansion. Around the time it was assembling its bid package, Metro Vancouver’s population was just under two million.

The population has since swelled by 25 per cent. Provincewide, B.C. GDP has soared 33 per cent since Vancouver’s Olympic bid was accepted in 2003.

Meanwhile, with interest rates increasing, Alberta provincial debt is at $33 billion and growing, gaining $10.8 billion just in the past year. In Calgary, municipal debt is already an Olympicssized chunk of money — leading to warnings from city staff that they have a limited capacity to handle new debt.

On Monday, a report by Calgary city staff said they were “skeptical” a games could proceed without a whole lot of extra numbercrunching to somehow bring down the cost.

To put it another way, imagine if Calgary was handed a cheque for $4.6 billion and ordered to spend it on civic improvement. Given all the other wonderful things that $4.6 billion can buy, it would be hard to imagine them deciding to blow it all on two weeks of winter sport.

Four and half billion buys a major subway or a light rail line. It buys a Disney-quality theme park. It could allow Calgary to fund a handful of Martian space probes.

And, of course, the task of sussing out these games has already cost Calgary $5 million.

Holding another Olympics is not just a financial disaster in waiting, but it’s a pinnacle of uncreative municipal thinking.