Friday, November 6, 2009

Turn off the spin, because it's reality check time

Olympic reality check #1

Statistics Canada reported that the 2008 gross domestic product for British Columbia was $199.214 billion. That's the total estimated value of goods and services produced in the province for the year.

A Nov. 5-published PricewaterhouseCoopers report on the effects of the 2010 Winter Olympics says the Games will benefit the
B.C. economy by $4.2 billion from 2002 to 2010. That's 18 years. Do the math and that's $233.3 million a year.

The same report also said the Games produced as many as 20,850 jobs between 2003 and 2008 in a province where the government pegs the workforce at 2.2 million people.

Any Olympic financial spinoffs are greatly appreciated, but in the grand scheme of things, it's just a mogul on a mountain. Premier Gordon Campbell would lead you to believe that the Olympics are the driver of the economy. They're not.

They are, however, costing taxpayers at least $2.5 billion, according to a 2006 B.C. Auditor General's report. Add related infrastructure projects and it's more than $6 billion. And then there are the disruptions to businesses caused by Olympic security and transportation. Suddenly it's no longer the pot of gold at the end of the rainbow that Campbell said it would be. None of that was considered by PwC, because it wasn't a cost/benefit analysis.

"Even in Economics 101, large-scale projects are evaluated on the principle of opportunity costs," said Impact on Communities Coalition's Am Johal. "If we spent the equivalent amount of public money in other priority areas, what would be the economic spin-off of that? Rather than spend $900 million on security for the Olympic Games, for example, we could have spent $900 million on social housing which would have used a lot of B.C. wood products and put alot of construction workers on a job site."

Well, enjoy the party, hope most of the gold medals remain in Canada and pray for snow on the mountains and blue skies!

Olympic reality check #2

Health Services minister Kevin Falcon claimed the H1N1 virus -- not the 2010 Winter Olympics -- was the reason why the government was ordering ambulance paramedics to return to full service. The paramedics, who have been prevented from a full strike by essential services designation, are considered one of the three major risks to the 2010 Winter Olympics by the IOC, according to a VANOC memo.

VANOC medical director Dr. Mike Wilkinson gave the B.C. Ambulance Service an Oct. 1 deadline because emergency planning for the Games was three months behind.

"At the latest IOC Coordination Commission review in August, the (British Columbia Ambulance Service) strike and uncertainty was raised as one of the three major risks to the Games from the IOC's point of view," said Dr. Mike Wilkinson's Sept. 14 memo to BCAS executives. The memo was copied to VANOC executive vice-president Cathy Priestner Allinger.

Falcon did two things wrong. First, by not disclosing the real reason for the back-to-work order. Second, by fanning the flames of H1N1 paranoia.

Now is not the time to exploit pandemic fears to score political points.

Exclusive: 2010 Olympics went cap in hand to government

Turns out that VANOC chief financial officer John McLaughlin has either been muzzled by his employer or isn't a man of his word.

I'm hoping it's the former. McLaughlin has answered my questions before -- even though some of the answers were vague. But at least he took the time to do his best to represent his organization. For some reason, McLaughlin couldn't talk about the VANOC bid for a bailout from taxpayers and the unusual accounting for Olympic stadium construction.

When he was on a media teleconference Oct. 26 to discuss VANOC's annual report through July 2009, I asked about a letter he wrote March 26 to Philip Steenkamp, CEO of the B.C. government's 2010 Winter Games Secretariat. See above (click to enlarge). I got it via a Freedom of Information request to the B.C. government. In that letter, McLaughlin sought more taxpayers' money to pay for the Olympic torch relay and opening ceremony at B.C. Place Stadium. How much money? Well, that was censored by some bureaucrat, based on the fear that disclosure would compromise financial interests.

I also asked McLaughlin about the Feb. 5 invoice for $3.5 million for Games-related B.C. Place Stadium upgrades. It's also above. Until then, only $300,000 was spent. McLaughlin told media on a June 16 conference call that the VANOC board okayed on May 20 an $8.3 million withdrawal from the construction rainy-day fund.

The report for the period ending April 30 included an extraordinary footnote about the board decision, which made the B.C. Place budget $12.1 million. VANOC has never explained how the extra funds would be spent, citing the need to keep secrets to preserve a surprise for the opening ceremony. None of the government documents I received gave a hint. Such withdrawals from the construction rainy-day fund are supposed to be backed-up with paper work to the Secretariat, the B.C. government agency overseeing VANOC.

Could that money have actually been diverted to the torch relay and opening ceremony operational budgets, as per the March 26 plea? Could it have gone to payroll?

McLaughlin said on that Oct. 26 conference call that he would "be happy" to talk to me about these matters. "We'll arrange to talk after this," he said.

McLaughlin didn't respond to subsequent emails over the following week and VANOC communications vice-president Renee Smith-Valade and her staff claimed he was "unavailable." I had similar luck trying to get Steenkamp to talk.

When reporters hear "unavailable," it really means "doesn't want or not permitted" to comment. But I got to thinking, maybe VANOC is right. Maybe McLaughlin really is unavailable.

Maybe he is:

A. sick with H1N1;
B. vacationing in Mexico;
C. playing the Mario and Sonic Olympic video game;
D. writing more bailout request letters to governments at all levels;
E. recovering from H1N1 in Mexico by playing the Mario and Sonic video game between writing letters seeking more government bailouts.

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