After Canada demands more Olympic money from Calgary, Mayor Nenshi threatens to pull 2026 bid

It’s Canada day here at Field of Schemes — no, not Canada Day, that was months ago, and we even missed Canadian Thanksgiving, but anyway — as in addition to the news from Halifax, Calgary Mayor Naheed Nenshi has threatened to withdraw his city’s bid for the 2026 Winter Olympics if the federal government doesn’t promise to cover more of the bill:

The letter was triggered by Friday’s Postmedia revelation that the federal cabinet had decided to fund up to $1.75 billion in 2026 dollars, but only if the province and city match the total.

“It is clear there has been a tremendous misunderstanding of the nature of the required funding amongst the three government partners and now we are in a position where we cannot show citizens how the required public contribution could be met,” Nenshi wrote.

Calgary and Alberta officials apparently thought they had an agreement in place where the city would put in $370 million, the province $700 million, and the federal government $1.75 billion plus any overruns. But it turns out the $1.75 billion is in 2026 dollars, which comes to more like $1.5 billion, and it’s contingent on the city and province matching that $1.5 billion, which is $430 million more than the two local governments had offered.

Negotiations are reportedly ongoing, but there isn’t much time left, as Nenshi said he needed a resolution by today or he’ll cancel a scheduled November 13 public vote on the plan. Polls have shown that the proposal is likely to pass, but Nenshi has previously reserved his right to pull out of the bid before or even after the public vote, so there could be much haggling yet to come. Which is good, because at $3 billion in public costs and a projected $200 million in new tax revenue, this sounds like a pretty awful deal, unless Calgary residents really think it’s worth $2.8 billion to have their lives turned upside down for three weeks in 2026 so people can come watch winter sports (doubtful, though Canadians do love their curling) or to put Calgary on the map as a tourist destination (um, maybe after global warming kicks in a few more degrees?).

We should find out more by end of day, or at least by Wednesday, when the Calgary council is set to meet to discuss the Olympic plan.


7 comments on “After Canada demands more Olympic money from Calgary, Mayor Nenshi threatens to pull 2026 bid

  1. Hmmmn. From the Vancouver 2010 financials….

    Operations

    In 2004, the operational cost of the 2010 Winter Olympics was estimated to be Canadian $1.354 billion (about £828,499,787, €975,033,598 or US$1,314,307,896). As of mid-2009 it was projected to be C$1.76 billion, mostly raised from non-government sources, primarily through sponsorships and the auction of national broadcasting rights. C$580 million was the taxpayer-supported budget to construct or renovate venues throughout Vancouver and Whistler. A final audit conducted by PricewaterhouseCoopers released in December 2010 revealed total operation cost to have been $1.84 billion and came in on budget resulting in neither surplus nor deficit. Construction of venues also came on budget with a total cost of $603 million.

    PricewaterhouseCoopers’ study estimated a total contribution to the BC economy of $2.3 billion of Gross Domestic Product, and as well creating 45,000 jobs and contributing an additional $463 million to the tourism industry while venue construction by VANOC and 3rd parties added $1.22 billion to the economy, far short of the $10 billion forecast by Premier Gordon Campbell. The study also said that hosting the Olympics was one of many reasons why the provincial debt grew by $24 billion during the decade. Non direct olympics games cost (e.g. expanded rail network, highways, security, paid time off for government employees “volunteering” etc.) cost in excess of C$7 billion. In 2011, the provincial auditor-general declined to conduct a post-Games audit.

    Security costs

    C$200 million was expected to be spent for security, which was organized through a special body, the Integrated Security Unit, of which the Royal Canadian Mounted Police (RCMP) was the lead agency; other government agencies such as the Vancouver Police Department, Canada Border Services Agency, Canadian Forces, and police agencies across Canada. The Canadian Security Intelligence Service (CSIS) also played a role. That number was later revealed to be in the region of C$1 billion, an amount in excess of five times what was originally estimated.

    So… if you are scoring at home, the original revised budget total was $1.75bn (Ops); $600m (constr) and $200m (sec), a total of $2.55Bn (not including the $2bn rail system and $1bn expected for the sea to sky highway improvements).

    The actual spent was $1.85 (Ops); $603m (constr); $1Bn (Sec) and $7Bn on associated improvements that were not included in the actual olympic budget…. which is $3.5Bn on actual olympic costs and twice that much on other improvements.

    Not included in these totals is the athletes village debacle, in which the housing units were supposed to be sold as condos in a super hot real estate market post games, but in fact had to be bailed out (you can probably guess by whom) and sold below the cost to construct. IIRC, that alone cost around $800m but was not included in the totals above either.

    This, ladies and gentlemen, is how you go from an initial budget of $2.6 Bn and ten billion in “spin off” economic benefits touted to actually spending $11Bn plus and receiving less than $4Bn in total economic benefit (and maybe less than $3bn if we are honest…).

    In fairness, then, one can say that Furlong and co had the numbers “right”, they just mislabelled the cost and benefit categories…

    Nenshi shouldn’t threaten to cancel the vote, he should run screaming from the very thought of hosting the olympics…

  2. The IOC also has refused to increase their bribe for bids. This might be the best chance for the NHL team to pull an Atlanta/ Braves/ Turner field con job on the taxpayers.

  3. Neil – even without the politics of arenas and Olympics firing folks up, it’s warmer than you think here in Calgary! ;-)

      • Reminds me of when I was in Thunder Bay recently (which is honestly gorgeous) and they were really selling their weather hard as a positive and the area as quite sunny.

        Now you do have the big lake moderating the weather, so I looked at the weather compared to say Minneapolis, maybe the weather is surprisingly nice in Thunder Bay?

        …And it was cloudier, and much much colder than say Minneapolis…

        So I guess they meant the weather was great compared to the frozen wasteland north of Thunder Bay?

        Calgary already has BANFF going for it. Its really already on the tourism map about as much as it is going to be.

  4. The chatter today is that council may pull this proposed bid even before it goes to a formal plebiscite…

    Anyone else find it odd that the city wants to cap it’s own contribution at $700m but demands that the rest of the country pony up more than the $1.75bn the government has already promised (and which, at 50% of the budgeted total, is the max amount the gov’t can contribute under it’s own “event” policy)?

    I wonder if I could go in to a car dealership and make a ‘firm’ offer of $18,000 on a new $50,000 pickup with the federal gov’t on the hook for the rest? I guess I could, but it’s doubtful anyone would believe me when I blamed the feds for the purchase falling through…

  5. Just got back from a fun midweek evening out with a friend and ruined it by quickly checking the news to see the bid proposal has been saved at the 11th hour, and so we are likely head to a plebiscite on 13NOV. You now know my position to date, but I will digest the new numbers more before then and attempt to make a proper decision for my city. Anxious to hear your take Neil!