Cost a rising concern in 2026 Olympic plebiscite

By Matty Hume, October 24 2018 —

On Nov. 13, Calgarians are hitting the polls to tell city council whether or not they believe the City of Calgary should go forward with a bid for the 2026 Winter Olympics. The ‘yes’ or ‘no’ plebiscite is legally non-binding under the Municipal Government Act, meaning the results will be used by city council for their own consideration of the bid.

As voting day approaches, Calgarians are raising concerns over both costs and publicly available information.

On Sept. 11, Ward 7 Coun. Druh Farrell was one of three councillors who voted against continuing with the plebiscite and the bid. She said her primary concern was the access of information for Calgarian voters.

“In September, we were already running out of time to consult with Calgarians. I was assured at that point that the financial information would be released to the public no later to 30 days prior to the plebiscite and we still don’t have that information,” Farrell said. “I questioned the timing of consultation, information gathering and communicating. I questioned that compressed time frame in September and we haven’t progressed very far since then, so I’m even more concerned that Calgarians will be unable to make an informed decision.”

Kenneth McKenzie is an economics professor at the University of Calgary who specializes in public economics. According to McKenzie, the benefits of an event like the Olympics can be difficult to quantify.

“In order to justify it, you need to look for the intangible or non-quantifiable benefits that arise from the Olympics,” McKenzie said. “Even though we can’t quantify them does
not mean they don’t have value.”

In terms of quantifiable information regarding funding, McKenzie says the “economic distortion” of taxes is often missed in public discussions.

“If governments impose taxes or contrarily forgo tax cuts in order to finance the Olympics, the economic costs associated with the taxes are greater than the amount of tax revenue actually raised,” McKenzie said. “That’s because taxes result in a distortion of economic behaviour. They’re going to finance it through higher income, corporate or sales taxes.

“All of those taxes distort people’s behaviour,” he added. “There will be less investment, less consumption and less hiring, and those are costs that are not included in the tax revenue raised. Anywhere from 10–20 per cent would be a reasonable guess [for the costs due to economic distortion].”

Coun. Farrell also highlighted that the outcome of Olympic funding through taxation lacks clarity on a municipal level.

“It’s important to recognize that the Olympics isn’t in our budget. We would need to cut in order to afford it,” Farrell said. “Some priorities would have to drop off the table and we haven’t had that discussion of what we would cut in order to make room for the Olympics.”

The Canadian Taxpayer’s Federation (CTF) describe themselves an advocacy group that presses for “lower taxes, less waste and accountable government.” According to the CTF’s Alberta director Franco Terrazzano, a lot of publicly available information lacks significant contingency planning.

“The Bid Committee said the cost would be $1,600–1,800 [per Calgarian household]. It’s important to remember that these numbers were released before the provincial government came in with their $700-million commitment,” Terrazzano said, referencing the gap between Alberta’s commitment and the Bid Committee’s expected $1 billion from the province.

Terrazzano says the CTF ran their own cost analysis in case hosting the Games becomes a reality. According to Terrazzano, even if there are zero cost overruns, the taxpayer cost would be just over $2,000 per household.

“The absolute best-case scenario cost per household is just over $2,000,” he said. “The reason I say best-case scenario is that it does not include any cost overruns, any interest payments, assumes the full federal commitment level and this does not include the price of actually going to an Olympic event.”

Terrazzano added that all Olympics since 1968 have gone over budget. If Calgary’s 2026 Olympics reach the same percentage of cost overruns as Calgary’s 1988 Games, he says the projected cost per household increases to $6,000.

Some students at U of C share similar concerns. Fourth-year political science student Tyler van Vliet says he was initially in favour of an Olympic bid but has become increasingly dismayed as more information becomes available.

“They always overrun the budget, but what really [swayed] me is the commitments from the provincial and federal governments,” van Vliet said. “I think city council probably expected a better give than that and I just don’t see how it’s feasible for the city, especially when we’re so far in debt.”

Terrazzano also expressed skepticism of pro-Olympic arguments that centre on improving Calgary’s infrastructure.

“If there are infrastructure priorities, fund the priorities. Because when you tie in a whole bunch of priorities into a smorgasbord of an Olympic bid, once the costs are to increase and go over budget, things have to get trimmed down,” Terrazzano said. “If there are already these priorities, why are Calgarians being held hostage over hosting the Olympics?”

Van Vliet echoed similar sentiments about new infrastructure.

“I live in the southeast. I’m waiting on the Green Line and they’re leveraging programs and builds in the city that we should be getting anyway,” he said. “They’re saying, ‘Oh we should build this for the Olympics.’ No — it should be, ‘We should already be building this for Calgarians.’ ”

Advanced voting for the Olympic bid plebiscite is Nov. 6–7. Primary voting day for the plebiscite is Nov. 13. Voting station locations are available online through the City of Calgary.