March 10, 2009

Olympic Impacts

The Campbell government is pulling figures out of the air when it comes to quantifying the economic benefits of the 2010 games. The studies involve very long time spans, too long to be relevant as an economic stimulus for the current recession. The people who will feel the immediate economic consequences of the games are those who are being laid off, have yet to be laid off and who won't be able to get to work due to traffic and security. Everyone in the Lower Mainland won't have tickets to Olympic events, but everyone will have their lives disrupted - some much more so than others.

NDP Leader Carole James blasted the Campbell government for abandoning workers who are facing layoff because their place of employment is within security zones. Employees at the Hastings Park have been told they will be laid off. Under fire in question period Hansen showed no sympathy for those 200 workers. He stuck to an irrelevant, misleading and false song-sheet saying: "When you consider the $10 billion worth of economic activity that will come as a result of us hosting the games, that's going to produce tax revenue to British Columbia."

It took until February 19, 2009 before the government provided a more realistic estimate of Olympic Security costs, but if you believe Finance Minister Colin Hansen, no one yet knows how many people will be laid off for a month because of the security plan. Could it be that they are still working on the plan and therefore neither the employment impact nor the costs are really known?

In 2002 no one could have imagined that in 2009 the world would be in what the World Bank describes as the worst economic decline since the Great Depression. It was January 2002 when what was then called the Ministry of Competition, Science and Enterprise completed a study on the economic impact of the 2010 Winter Olympic games. In November 2002 the Campbell government released a study by InterVISTAS Consulting Inc which updated the economic impact analysis. Seven years later the Campbell government is still using those estimates despite worldwide economic crisis.

Finance Minister Colin Hansen has promised an updated economic impact study before the election, but in an interview with Public Eye Online's Sean Holman, he said he doesn't think the economic downturn will reduce the benefits from the games.

The InterVISTAS study appears to have been removed from the government website, but those of us who saved it know that it is a big stretch to claim $10 billion in benefits from the games. The economic impact studies originally created three scenarios: low with 933,838 Olympic induced visits between 2007 and 2014, moderate with 1,908,389 Olympic induced visits between 2002 and 2015 and high with 3,658,347 Olympic induced visits between 2002 and 2020. Note how both the time span and optimism increased between the low and high scenario. Also note how they managed to assume increased visitors down to the last 347 people.

InterVISTAS' update increased the visitor assumptions to 1,054,851 over the 7 year period in the low scenario to 4,292,300 over the 18 year period in the high scenario. The high impact scenario attributed $5.8 billion to the direct, indirect and induced benefits of the Games over the 14 year period from 2002 to 2020. The difference between that and the $10 billion figure ($10.7 billion in the updated study) is due to the projected long run benefits from the Convention Centre Expansion. That was before anyone knew about the cost overruns on the Convention Centre. Who can say whether the long run forecasts for the Convention Centre and Olympic tourism generated through to 2020 are anywhere close to accurate? When Hansen and Campbell talk about $10 billion in benefits, remember they are counting everything but the kitchen sink between now and 2020 for the games and beyond for the Convention Centre. Watch for the next update to count the sink!