Maxed Out 

The Family’s jewels

Page 2 of 3

Distasteful as all the barnacles on the good ship Olympics are, I’m not sure they’re good enough reason to scuttle it. Life’s a long series of distasteful compromises and any endeavour involving humans also involves dishonesty, deceit, doubledealing and duplicity.

But having lived in Montreal and seen a once shining jewel of a city reduced to potholes and tattered glory by the twin influences of Olympic debt and governmental neglect, the whole cost thing still scares the bejezes out of me.

Last week’s release of the Canadian Centre for Policy Alternatives’ report, Olympic Costs & Benefits , didn’t’ help. The CCPA – a left-leaning think tank – prepared a cost-benefit analysis of the 2010 Games, taking into account their financial impact on government, economic development, communities, the environment and such. Using publicly available data, the CCPA did what passes in the industry as a quick-and-dirty analysis. That’s not to say their work was shoddy or analysis faulty, it just wasn’t the kind of painstaking work consultants can soak a municipality three-quarters of a million bucks for.

It was, however, the only cost-benefit done to date on the games. This puts it an order of magnitude higher on the scale of analysis than the B.C. government’s economic impact analysis, the one that said the Games would make oodles of money and provide jobs for hundreds of thousands of British Columbians. That analysis was what passes in the industry as a crock.

The basic difference in the two studies’ methodologies – and this is important so bear with me for a few sentences – is that, by definition, economic impact analysis assumes any spending has a direct economic impact. Under that form of analysis, there is no higher impact to be derived from spending $50 million bucks to build a hospital than there is from spending $50 million bucks to move a pile of dirt from one place to another. In other words, all spending is good spending. Put that way, it’s clear why B.C. governments like such analyses.

Cost-benefit on the other hand, focuses on the value of what is produced and, equally important, the opportunity cost of what is not produced. Such analysis distinguishes between more or less valuable and efficient uses of scarce resources. Allow me to demonstrate.

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