Olympic fever – As the best of the best compete, who picks up the tab?

by Tereza Verenca

They’ll come. They’ll play. They’ll either win a medal or just fall short of it. When they leave, the tab will have to be picked up.

The answer to exactly how much the 2010 Olympics will cost, despite estimates, won’t come until after the Games are over.

For some, overspending is inevitable.

“It’s a guarantee that the three levels of government will spend more than planned,” said Stefan Dodds, an economics professor at Carleton University. “I can’t see why they’d spend less.”

There are a few budgets to keep in mind. One is the operating budget, financed by the private sector. The estimated C$1.76 billion will pay off things like ceremonies and advertising.

There is also the venue budget of C$580 million, which is funded by the federal and provincial government. Monies are being allocated to infrastructure projects like the Sea-to-Sky Highway and the Athlete’s Village.

Don’t be scared fellow Canadians. The government isn’t expected to spend anywhere near the $40 billion China spent on their Games. With the current financial crisis, it’s simply not in the cards.

Dodds said no matter what the final costs may be, B.C.’s economy will benefit.

“Anytime government spends as much money as the Olympics will cost, you’ll see a stimulus,” he said, adding that infrastructure, like the highway, will generate long-term revenue.

Serena Smygwaty, a second-year commerce student at Carleton University, said increased tourism will also boost the province’s economy.

“People might come to B.C. for the first time and decide they want to live there,” she said. “The Olympics is promoting B.C to the world as the best place on Earth. It may be just that for some people.”

Smygwaty said hosting the Games in Canada has more attached to it than its economics benefits.

“For athletes, the dream to go to the Olympics becomes more real because it’s happening in their own backyard,” she said.

John Furlong, chief executive officer of the Vancouver Organizing Committee, writes in a message on www.vancouver2010.com, that the event will attract thousands of athletes from more than 80 nations. A worldwide audience of three billion people is expected to tune into the Games.

As for the final tab, Dodds said the question is not how much the Games will cost in total; rather, how much extra money will be spent after the public has seen the estimated budgets. This is when people will be upset, he added.

Jean Drapeau, previous mayor of Montreal said, “The Olympics can no more lose money than a man can have a baby” when he won the right to host the 1976 Olympics. The city was in debt at least a few billion dollars when its Games were over.

Smygwaty said its naïve to think budget numbers won’t change.
“When the time comes, we’ll just have to see if revenue will exceed expenditure,” she said. “I think it won’t.”