Economic benefits of Calgary 2026 Olympic Games 'absolutely overstated,' say 2 economists

A Calgary economist is issuing a warning about some of the numbers presented by the city's bid corporation for the 2026 Olympics Games, while a sports economist says the case for voting "no" in the Olympic plebiscite in November now is even stronger. 

Trevor Tombe says the actual cost of hosting the Games will almost certainly exceed the $5.2 billion announced Tuesday. And, the $7.4 billion in projected economic benefits, he says, have "absolutely" been overstated.

"We shouldn't be under the impression the economic gains exceed the spending on the Olympics, which was the claim made by the bid corporation," said Tombe.

The associate professor at the University of Calgary says every Olympics since the 1960s have exceeded their original cost estimates — and that includes Calgary in 1988.

And it would be "a stretch" to think that Calgary 2026 will be any different, Tombe said.

Real cost could hit $8B: Economist

Moshe Lander, a sports economist at Montreal's Concordia University, predicts the real cost of the Games will reach nearly $8 billion. 

Vancouver spent $7.7 billion on the 2010 Winter Games.

Calgary's plan includes $900 million to refurbish old facilities, including the Scotiabank Saddledome, McMahon Stadium and the Olympic Oval, and to build two new facilities. 

Vancouver spent $750 million on all of its new venues combined.

Lander says cost estimates on average have increased by the time the event is held.

"Normally the number that is presented to the [International Olympic Committee] and the number that actually comes in when all of the numbers are added up, there's usually about a 50 per cent cost overrun on average," Lander said.

He says it was "grossly irresponsible" for the bid corporation not to present a more realistic cost range to host the Games.

"They should have said something like, 'We are reasonably confident the games will cost between five and eight billion dollars, seven and 10,' some sort of range of numbers that shows there is some degree of uncertainty," he said.

He also believes the costs to renovate the 60-year-old McMahon Stadium and the 35-year-old Saddledome may be unrealistic given the age of the facilities.

Economic benefits claims doubtful

Tombe is also doubtful about the claims the city and province will reap $7.4 billion in economic benefits from hosting the 2026 Olympic and Paralympic Games.

According to Tombe: 

• Hundreds of millions budgeted for housing would likely have already been spent under existing provincial and federal infrastructure programs regardless of whether Calgary hosts the Olympics. 
• $2.2 billion in private investment was announced, but no details were offered.
• $610 million on security was projected, but a significant portion of that money will be spent on personnel who don't live in Calgary or Alberta.

He also predicts zero impact on the GDP — because of public spending that will be displaced from other areas of the province and country.

"To the extent that people think the economic benefits of hosting the Games is a reason to do it, I would say that's misplaced motivation," said Tombe.

Of the estimated $5.2-billion cost, $3 billion is expected from taxpayers, and as much as half of that amount could be provided by the federal government. It's still unclear how much the city and the province would each contribute.

Tombe says given the provincial and federal budget deficits, the money will have to be borrowed and paid for later through either tax increases, program spending cuts, or both.

"We should really be asking is, 'Do we want to have the Games? Do we want to have those facilities? Do we want to promote sports? National pride? Community pride? Is that worth the cost?'"

Contingency plans

The bid corporation's projections include hundreds of millions of dollars in capital and operating contingency plans. 

Lander says it's puzzling that a replacement for the Saddledome didn't form part of the plan and questions whether the owners of the Calgary Flames would be willing to accept renovations to the aging building. Lander says now would be the ideal time to begin discussions for a new arena, and taxpayers should be told about potential costs.

"If you're not going to redo the Saddledome now as part of the 2026 Games, when exactly is that going to happen?" he said.

He also questions some of the security plans as it relates to downtown, Stampede Park and the University of Calgary during Olympic events.

"These things are clearly going to involve cost, and possibly significant cost, and it's not in the bid and it's not in any of the numbers that were presented.

"Is this something that is being kept [from Calgarians] to try and present a nice, soothing number that makes us want to support the Games?" Lander said.

He suggests the city will likely see more detailed numbers after the Nov. 13 plebiscite when Calgarians will be asked whether they support or do not support a bid for the 2026 Winter Olympic Games.

Lander says he's a sports fan and spends two months every year teaching in Calgary, but he says Calgarians should vote no.

"The economic benefits aren't there," he said. "We haven't been presented with any solid information that helps us vote better," 

He says it doesn't make sense to chase a "tremendous" legacy from 1988.

"I would hate to see the city mess itself up years after [2026] because it's chasing something it already had," he said.

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Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at [email protected] or on Twitter at @CBCBryan.