January 18, 2003

Convention Centre Expansion at Risk

The Auditor General's report on the 2010 Olympic bid (http://www.bcauditor.com/PUBS/2002-03/Report6/OlympicGames.pdf ) contains some disturbing news about the promised Convention Centre expansion. According to the Auditor's report "The Trade and Convention Centre would be useful to Games organizers, but not essential - in fact the Bid Corporation has developed a budget and plan for an alternative location for the media centre." (page 3)

What that "alternative location" might be is not clear, but section 16.5 of the Bid Book says "The International Broadcast Centre (IBC) will be located in the proposed Richmond Trade and Exhibition Centre (RTEC) which will be built on land currently owned by the federal government in the community of Richmond, immediately south of Vancouver and adjacent to Vancouver International Airport." It goes on to say that "The Main Press Centre (MPC) will be located in the Vancouver Convention and Exhibition Centre (VCEC) on Vancouver's central waterfront." Only one sentence is devoted to the possible expansion of the convention centre. The bid book notes that "A project to expand the VCEC is underway, and is being coordinated and supported by both the federal and provincial governments." If the expansion is a done deal, why does the Auditor's report say that "the Bid Corporation has developed a budget and plan for an alternative location for the media centre"?

At the time federal participation in the Convention Centre expansion was announced, the federal news release contained information about a delay when it said "Prime Minister Chrétien and Premier Campbell also announced that their governments would sign a formal agreement confirming this commitment within the next six months." That was on December 4th. If six months becomes seven months, as it often does in government, it would put signing the deal after the IOC announcement on the successful bidder. Toronto got its waterfront improvement without winning a bid. Vancouver should get the convention centre expansion whether or not it gets the Olympics.

The expansion of the Vancouver's Convention Centre accounts for over half of the economic benefits attributed to the Olympics in the province's economic impact study. A November 22, 2002, news release claimed that the combined impact of the 2010 games and an expanded Vancouver Convention and Exhibition Centre could generate $10.7 billion in economic activity. By contrast, the Auditor General's report says "The Province's economic impact studies estimate that the Games could, over the next 12 to 17 years, generate incremental provincial Gross Domestic Product increases of $2.0 billion to $4.2 billion …" The difference of $6.5 billion or more is due to different time lines (20 -30 years vs. 12 to 17), and the inclusion or not of the Convention Centre expansion. With so much of the economic impact of the Games really attributable to the Convention Centre expansion, the words of the Auditor General that the expansion is not essential are particularly troublesome.

In the absence of the Convention Centre Expansion, the most optimistic forecast for benefits from the games, $4.2 billion over 12 to 17 years, amounts to a lift of only 2 tenths of one percent for GDP (14 years times current GDP of $130.1 billion divided into $4.2 billion). The $1.2 billion that will be spent on the games plus several billion more for infrastructure could no doubt generate far more economic growth than that on a variety of alternative projects.

The provincial government should immediately respond to the uncertainty created by the Auditor General's report. If the Auditor is wrong, then what else is inaccurate in his report? If he is right, then what games are being played by the federal and provincial government on the expansion of the Convention Centre? Perhaps the Auditor's words refer to nothing more than what would happen if the expansion is not completed in time, but it is hard to believe that Vancouver would host the games in a construction zone. Keep in mind that the attempt to expand the Centre with a private-public partnership has already failed. Has the Auditor signaled that both levels of government are prepared to back out of their commitments?

To end any uncertainty, the Premier should clearly state that the Convention Centre expansion will proceed whether the Olympic bid is successful or not.

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December 17, 2002

Salzburg 2010

Recognition of the strength of the Salzburg bid will not stop critics from blaming Mayor Larry Campbell and COPE if Vancouver loses the bid. Part of that spin is that COPE would never have approved a vote on the Olympic bid if the NDP were in power. Those who advance that argument, including Vancouver Province columnist Mike Smyth, demonstrate that they know nothing about COPE. Premier Gordon Campbell seemed to be a big fan of citizens voting on anything they desire when he introduced a private members bill in 1995 to amend the Recall and Initiative Act, and as Premier he insisted that a vote on treaty principles was the right thing to do no matter what the cost. As is too often the case, what is right seems to depend on whose side you are on and let the facts be damned.

Critics of Vancouver's upcoming vote tend to forget that there is no guarantee that Vancouver will win the bid, vote or no vote. Since everyone's costs are someone's income, the $35 million spent on the bid will benefit someone even if it doesn't produce the games for Vancouver-Whistler. One of the beneficiaries of the bid, even an unsuccessful bid, should be tourism in British Columbia. The economic case for an expanded convention centre is much stronger than the case for the Olympics. Perhaps that is why the economic study for the bid declines to separate the future benefits of the convention centre from the marginal benefits of the bid. Ottawa and Victoria should be crystal clear that the convention centre expansion will proceed with or without a successful Olympic bid. Attention to those details seems to be lost as debate shifts to the merits of COPE honouring its election promise.

GamesBid.com is a website that describes itself as "an authoritative review of Olympic bid business". Its bid index has consistently put Vancouver in second place to Salzburg. Those who believe that a successful bid would distort priorities and lose money might be inclined to shout "Go Salzburg". Readers of the GamesBid.com website will discover that Salzburg also has its Olympic bid critics. In a news story dated November 7, 2002, Helmut Huettinger, spokesman for a concerned citizens committee, appears to have gotten the director of the Salzburg 2010 to admit that the worst case scenario could be that the 2010 Games would create a 20 per cent deficit or about 100 million euro. That may sound like a lot but it is small relative to the $6 billion price tag that some put on the Vancouver bid. Of course, followers of the competing bids know that the Salzburg bid does not depend on the massive, and perhaps inappropriate, infrastructure spending that is required for Vancouver.

Does anyone really believe that an expensive expansion of the Sea to Sky Highway would be BC's top highway project if it weren't for the bid? Critics of Mayor Larry Campbell's vote on the bid say that anyone denied a community grant in the future may say that the money spent on the vote could have gone to their community group. The same applies thousands of times over for every denied or postponed highway project that must wait while the Sea to Sky is upgraded beyond all reason. Those who point to deaths on that highway should consider the number of single vehicle fatalities on the Coquihalla Highway. Spending hundreds of millions will not prevent fatalities from reckless driving.

Some economists argue that any form of government spending, even building a pyramid in the desert, will help the economy when it is down. Others believe that any government spending should always be done on the highest possible priorities. Who would have thought that the Campbell Liberals are in the pyramid camp?