Since there's been a lot of talk lately about Olympic construction cost-overruns, and the supposed 'waste of public funds' for what is 'nothing more than a two-week party', we thought we'd take a closer at the numbers behind the 2010 Winter Games.
Indeed, when one hears that it will cost about $1.7 billion to put on the Olympics, or that the Vancouver Convention Centre Expansion project is $235 million over-budget, it does sound as though there's a lot of money being thrown around on the Games and related projects (ie: the Canada Line, the Sea-to-Sky Highway, etc.)
- Total cost of Olympics: $1.7 billion
- Of which, $580 million will be spent on venues
- Another $200 million is earmarked for security
Essentially, we taxpayers are on the hook for the $580 million that's been earmarked for venue construction and upgrades, although we'll get to use the facilities long after the Olympics are over (ie: the UBC rinks, the Richmond Oval, etc.)
As for the rest of the $1.7 billion budget, including security - that will be covered by the sale of broadcast rights, corporate sponsorship revenues and ticket sales. To date, VANOC has raised at least $550 million in sponsorship deals, with a few major sponsor categories still to be filled.
It's also worth considering that this isn't just a 'two-week party,' as many critics like to suggest.
The Games will showcase Vancouver to a global audience of more than 1 billion people, and for a province where tourism is a $10 billion industry, the OIympics will indeed be paying dividends for years to come.
But to see Olympics-related spending in another light, below are the five largest categories of federal government spending, according to the 2005 budget.
- Interest payments on the national debt - $34.1 billion
- Support for seniors (Old Age Security, etc.) - $27.9 billion
- Health Care transfer payments - $15.2 billion
- Employment Insurance (EI) - $14.7 billion
- Social assistance, education transfers - $7.9 billion
The federal government also provided nearly $12 billion in tax benefits and other cash payments to low- and middle-income families during 2005.
It's important to keep in mind that this is what the federal government spends each year.
So, during the 2004-2010 period (during which most of the $580 million in taxpayers' money will be spent), the federal government will also spend $204.6 billion on interest payments on the national debt, and $72 billion on social assistance programs.
Unfortunately, most people aren't given this context when the headline-grabbing numbers of Olympics spending are thrown around.
While it's good to keep the heat on VANOC, to ensure that they don't dig us into a financial hole, let's not lose our heads over what will in fact be an investment that pays for itself over many years to come.