Courtesy of City of Richmond
Shovels have not hit the ground to build the Olympic speed-skating facility in Richmond, yet already there is uproar over the costs. Pegged at $155 million in its early stages, the cost estimates are now estimated to be $170 million. Many opponents suggest the actual costs will be far greater.
By Tom Fletcher Black Press Sep 20 2006
Province bungled planning says auditor general
B.C. Finance Minister Carole Taylor defends the province's role in the 2010 Winter Olympics, after B.C.'s auditor general contradicted the government's definition of what is and is not an Olympic-related cost.
The latest auditor general's report puts the overall cost to taxpayers for the 2010 Winter Olympics at $2.5 billion, instead of the $600 million figure cited by the B.C. government as the province's cost to stage the Vancouver-Whistler games. The main difference is that acting Auditor General Arn van Iersel included part of the upgrade to the Sea-to-Sky Highway and portions of the new Vancouver airport transit line as Olympic costs, in addition to the federal and municipal government contributions to the games.
Taylor stressed that the auditor general has not identified any new or unbudgeted costs related to the Olympics.
"The Sea-to-Sky, full cost $1.983 billion, that's in the budget," Taylor said Friday as she delivered her first-quarter report on the province's finances for the year. "The $600 million, which is the cost of actually presenting the games, is in the budget. The discussion that's been going on is where in the budget. He would prefer to see it all in one place and labelled Olympics, and the government believes that Olympics is the label for putting on the Olympics."
Van Iersel's report also identified an extra cost of $150 million that he said could have been avoided if the government had used a financial tool called a hedging contract to protect against the rising value of the Canadian dollar.
NDP leader Carole James said the auditor general's findings should force Premier Gordon Campbell to replace the management of the Olympic project.
"There's no business plan, no controls, no cost definitions, and even the simplest safeguard on behalf of taxpayers - like hedging on the U.S. currency exchange rate - were never taken," James said.
Taylor said the finance ministry did not advise Olympic organizers on how to deal with the rising currency, but if they had they would not have anticipated the large increase in the Canadian dollar value that has occurred. The ministry's forecasts at the time were for the dollar to climb to 68 cents U.S., not the more than 89 cents it has reached, she said.
The Olympic controversy overshadowed an otherwise sunny economic forecast, with a projected surplus for this year doubled to $1.2 billion. The new revenue comes mainly from extra taxes collected due to increased employment and consumer spending. The $600-million increase remained even after new charges racked up by the province since it released its annual budget in February.
The new costs include an extra $290 million to pay bonuses to public service employees, $115 million more put towards forest fire costs, and the biggest correction of all to February's budget, a reduction of $774 million in expected revenues from natural gas royalties between now and next March.
The B.C. government has also reduced its forecast price for lumber from $338 U.S. per thousand board feet to $309. The drop in U.S. housing starts that was predicted in last February's budget was sharper than expected, and is considered a forerunner of overall economic conditions south of the border.
Taylor said B.C. is not factoring in improvements to forest industry performance from the Canada-U.S. softwood lumber agreement until it is passed into law in Ottawa.
tfletcher@blackpress.ca
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