Premier Campbell’s conversion to big spender is quite remarkable. Before the Olympics, the premier was all for cutting spending — schools, hospitals, courthouses, shelters for women and youths at risk, campgrounds, Pharmacare, avalanche warning, and just about anything he could. Winning the Olympic bid for Vancouver has changed his mind.
Now the premier can’t spend money fast enough. Campbell will bankroll the biggest spectacle in the world in 2010. His government will hire thousands of workers over a seven year period to build convention centers, roads, rapid transit and games facilities. The B.C. Liberals will become a bigger employer than the left-leaning government they replaced.
The premier’s conversion is remarkable because up until now Campbell has led us to believe that governments don’t create jobs. The role of the government, he has told us over and over, is to get out of the way of the free enterprise system. By reducing environmental regulations and lowering wages for workers, we were led to believe that big business would create prosperity that would be only rivaled by our province’s natural beauty.
At least, that was what he thought until the glory of Olympic Games illuminated the new way — spend, spend, spend. Now he is a believer in big government projects and will spend his way into the hearts of British Columbians and the world.
Or, more correctly, the premier will spend our tax dollars on a huge sports spectacle. Never mind that we would rather spend our money on more sensible things, like human resources. Campbell has forgotten that B.C.’s biggest resource is its people and the wisest expenditure is on health, education, clean air and water, safety, and helping the less fortunate to their feet.
Campbell’s gamble is that he will recover our tax dollars through revenue from ticket sales, TV rights, and corporate sponsorship. It’s not a sure thing.
“The Province of British Columbia, as the sole guarantor of the Games, is assuming all the financial burden of what is, clearly, a risky business venture,” says a report from the Canadian Centre for Policy Alternatives. “The 2010 Games will not ‘pay for themselves,'” says the report. In fact, Olympic games usually lose money or worse, because of bad accounting, no one is ever quite sure.
UCC economist Jim Seldon has seen it all before and cost overruns are common. “I’ve looked at both the studies prepared by the provincial government and the one by the CCPA — plus a lot of other benefit-cost and economic impact studies for ‘events’ of various sorts over the years,” Seldon told me. Cost recovery is unlikely.
But Seldon thinks that the CCPA study could have done a better job in the study of benefits. Instead of looking at the costs, look at the value received through the expenditure of our tax dollars. That could have been tested by a question: “Would you be willing to pay $10 a year more in taxes for the next ten years to have the Olympics come to BC.”
If taxpayers are willing to pay more taxes for the Olympics, then it’s not a cost but a benefit. “The idea is pretty simple: if you are willing to pay $10 for something rather than go without it, then that item logically must be worth at least $10 to you and maybe more,” according to Seldon. So, even if we are a bit short in recovering our investment the money may be well spent. Or not.
And what about all the thousands of construction jobs in created by the Olympic games. In fact, jobs are created by almost any government project. It doesn’t matter if it’s building Olympic stadiums, highways, hydro dams, fast ferries, or just digging holes in the ground.
The real question is not whether jobs are created but rather, what are the lasting benefits of those jobs? Will the pride of hosting a world-class event and attracting world’s attention for a few weeks be worthwhile?
Time will tell if Campbell’s gamble will be a lasting legacy and the money well spent. Will it be as durable as former Premier W.A.C. Bennett’s hydro dams and a public electrical utility? Or will it be more like Premier Glen Clarke’s failed dream of B.C. as a world class ship-building province?