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Toronto’s 2015 Pan Am Games to Cost Taxpayers $11.6B?

March 10, 2010 by  

In August of 2009, members of Freedom Party of Ontario (an duly registered political party in the Province of Ontario, Canada, of which I am currently leader) commenced a non-partisan No Tax for Pan Am campaign: Yes to the Games, No to using tax revenues to pay for the games. The campaign got a fair bit of attention (see the official web site: www.notaxforpanam.com ) but time and budget limitations limited the campaign’s reach/effectiveness. Another factor: a door to door campaign was made infeasible by the bid committee’s increasing of the geographic area occupied by the games. Freedom Party having defeated London, Ontario’s 1984 bid for the 1991 Pan Am Games, the bid committee for the Toronto 2015 games (led by 80′s era Liberal MPP David Peterson, who was also Premier in the late 1980s) spread the venues across towns spanning over 100 kilometres.

Ultimately, Toronto’s bid to host the games was chosen in November of 2009. Not much has been heard from either side of the Pan Am Games debate since then.

However, the Olympic Winter Games in Vancouver have made the 2015 Pan Am Games newsworthy again, especially because of the cost overruns of the 2010 Vancouver Olympic games. The Vancouver bid committee’s bid was for a budget of $874M. Some after-the-fact estimates – estimates not coming from elected politicians – peg the actual cost of the games at $6B. As just one example of how utterly dishonest the bid budgets are, the Vancouver Olympic bid budgeted approximately $1.5M for “security”. When all was said and done, security costs came in at $900M: higher that the total budget set out in the Vancouver Olympic bid book.

Toronto Sun editor Rob Granatstein admits that the Pan Am Games in Toronto will not be as grand as the Olympic spectacle was this year. Yet the budget set out in the Toronto Pan Am bid book budget posts costs at $1.4B: almost double the budgeted cost of the Olympics.

Each of these games bids requires that someone take on the financial burden of paying for any expenditures exceeding the budget. BC is on the hook for the massive Olympic cost overruns. Ontario Premier Dalton McGuinty – with the full support not only of his Liberal MPPs, but of the Progressive Conservatives and the New Democratic Party – has agreed that Ontario will shoulder the full burden of any over-budget spending of the 2015 Pan Am Games. This is an agreement made by a government that is currently borrowing about $23B per annum. Accordingly, Ontario will have to borrow to pay any overage.

Even Granatstein agrees that games always cost more than the amount budgeted, and that the 2015 Pan Am Games will go over-budget. How much over-budget? That’s anyone’s guess, because the budgets set out in games bids are always 1 part fact and 9 parts BS. However, if we assume that bid committees under-represent (or err in computing) the actual costs of games by roughly the same percentage then, because an $875M budget turned into an actual cost of $6B for the 2010 Vancouver Olympics, it is not unfair to estimate that the $1.4B Toronto Pan Am Games budget indicates an actual cost of about $11.6B (note: the Pan Am Games bid committee originally admitted a budget of $1.7B).

Prompted by a column written a few days ago by Granatstein, he and I were on the John Oakley Show in Toronto this morning (AM 640) to debate the 2015 Pan Am Games. Here’s a recording of it. It should be noted that AM640 is, first and foremost, a sports channel, so the reader might not be too surprised to discover that the two people who called into the show (at least, the only two aired by the show) were in favour of pumping tax revenues into the 2015 Pan Am Games bid. However, my read on things in the general population is that a very healthy percentage – perhaps a majority – of Ontarians do not want the Ontario government to borrow and spend billions of dollars on bailing out the 2015 Pan Am Games. And that’s a hopeful sign in respect of the ethics of Ontario taxpayers: a good percentage of them agree that it is morally wrong to have a party in which everyone raids the neighbour’s beer fridge without his consent.

I expect that the cost of the 2015 Pan Am Games will loom large in Ontario’s 2015 fall General election. At that point, will the Liberal, Progressive Conservative, and NDP parties all admit that they agreed to this immoral use of governmental borrowing, taxing and spending power? Or will they conspire to remain mute about the coming boondoggle? Rest assured, no matter what they do, I, and Freedom Party of Ontario, will be a constant reminder that there were many Torontonians, Ontarians, and Canadians in general who opposed the use of tax revenues for the games, and that only Freedom Party and the No Tax for Pan Am Games 2015 campaign fought to oppose such an elaborate misuse of governmental power. Oh: and keep an eye on which land developers and builders contribute to those parties over the next 5 years, because they will be the chief beneficiaries of the money taken out of your child’s university/college savings account.

Your comments on this issue are welcome, as always.


Addendum

The above blog post yesterday caught the interest of Toronto talk radio personality Ryan Doyle (1010 CFRB – Toronto, evenings). At 7:30 PM last night, he had me on his program to discuss the possible cost of the 2015 Pan Am Games. You can listen to it here. Just one note: the $11.6B figure is based not upon the $1.4B number set out in the final bid book of the Toronto Pan Am Games committee, but upon their earlier estimate of $1.7B.

Comments

3 Responses to “Toronto’s 2015 Pan Am Games to Cost Taxpayers $11.6B?”

  1. Rob Granatstein on March 10th, 2010 6:46 pm

    It’s good to have a watchdog on these projects. Keep a close eye.

    Toronto needs these facilities, but not at any cost.

    And I think you’re mixing up some of your numbers between Games infrastructure and add ons, like highways, subway lines, etc.

    And don’t expect security like at an Olympics.

  2. Paul McKeever on March 10th, 2010 8:07 pm

    Rob: you are correct that both the $6B Vancouver figure and the $11.6B Toronto figure include off-budget items that arguably would not have been spent but for the coming of the Vancouver/Toronto games (roads etc).

  3. Quick Hits 3/12/2010 on May 18th, 2010 11:42 pm

    [...] McKeever, leader Ontario’s Freedom Party, reports on dishonest public budgeting and its tendency for cost overruns. In opposing public financing of [...]

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