The ski-jumping facilities in Whistler, B.C., will be considered as a potential part of a multicity bid for the 2026 Games from Calgary, Edmonton and Whistler.Rafal Gerszak/The Globe and Mail
Calgary officials want to examine whether sporting venues outside the city could be used to host part of the 2026 Olympic Winter Games in an effort to reduce costs associated with the global event, an idea that opens the door for places such as Edmonton and Whistler to be part of the international spectacle.
This is a sharp break from Calgary's previous strategy, when a study group focused on local facilities and argued expenses such as security, travel and accommodations would skyrocket if events spread beyond the city and its neighbouring mountain communities. The sharing proposal will further stoke debate over whether bidding for the Games will translate into economic rewards for Calgary and the rest of the country.
Hosting Olympics in Calgary could threaten Canadian economy, report says
City staff will make their pitch at Monday's council meeting, according to documents tied to the agenda. If council consents, Edmonton's two arenas will almost certainly be explored as possible venues, perhaps for curling or hockey games. The ski-jumping facilities in Whistler, B.C., will also be considered more seriously. But first, Calgary's politicians must agree to give staff another $2-million to continue researching whether Alberta's largest city should bid for the Games. That is on top of the $5-million Calgary has already directed toward the project.
Monday's Olympic discussion will be tense. Some councillors are upset city staff did not provide them with two independent reports that concluded hype around the assertion economic benefits would accompany the Games is overblown. Staff commissioned the reports this spring, but did not make them public. The Globe and Mail, however, published information contained in one of the reports on Nov. 17. Some politicians said they do not remember bureaucrats summarizing the documents for them, let alone knowing they could request the full analysis, until The Globe's report.
Councillors received the independent reports Friday night after at least one politician demanded city staff distribute the documents. Both reviews dismantle the public analysis Calgary's Olympic proponents lean on when claiming the Games would bring economic gains. Councillors have largely turned to the same public reports to inform their Olympic opinions.
The staff's proposed budget for the $2-million, along with cash it already has, covers such expenses as travelling to South Korea for the 2018 Winter Olympics to participate in some of the first steps of the bidding process; external consultants; IT services; communications; and city staff resources.
City staff, in the documents related to Monday's meeting, said if council rejects its $2-million request, Calgary should end its Olympic process. Bureaucrats want permission to expand their research beyond the limited mandate that governed the now-defunct study group, known as the Calgary Bid Exploration Committee (CBEC).
Staff wants "to specifically explore venues outside of Calgary … in order to reduce the costs of hosting the 2026" Olympics, the supplemental agenda document says.
The possibility of sharing the Games changes the Olympic calculus. It would give other towns a chance to capture slices of the possible economic benefits, but that may mean Calgary would have to give up some economic and infrastructure goodies that may accompany the Olympics. CBEC believes Canada's GDP could rise by as much as $3.1-billion and an average of 3,000 new jobs a year over nine years could be created if Calgary hosted the Games. CBEC's predictions rely on reports prepared by Deloitte and the Conference Board of Canada.
However, the independent reports Calgary commissioned challenge the theory that the Olympics guarantee prosperity.
Trevor Tombe, an economics professor at the University of Calgary, and Brad Humphreys, an economics professor at West Virginia University, separately analyzed the conclusions in the Deloitte and the Conference Board reports. Prof. Tombe said it is possible GDP could actually slip and that no new jobs may emerge.
He argued the two firms cherry-picked evidence from analysis of past Games to support their projections, all while ignoring information in the same reports that would weaken those assumptions.
Deloitte, for example, leaned on "The Olympic Effect," an article Andrew Rose and Mark Spiegel published in The Economic Journal in 2011.
"Rose and Spiegel (2011), which is cited by the Deloitte analysis as evidence that hosting the games boosts international trade, find no such effect exists for the Winter games," Prof. Tombe wrote in his 14-page report.
Further, economic gains associated with previous Games may not be a result of the Olympics proper. Instead, benefits flow to "otherwise unfamiliar" countries because hosting the Games sends a message to international markets that they are open for business, Prof. Tombe said. "Canada is already a generally open economy and needs no such signal," he said.
The academic also faulted the Conference Board's reading of "News Shocks in the Data: Olympic Games and their Macroeconomic Effects," a 2015 paper by Markus Bruckner and Evi Pappa published in the Journal of Money, Credit, and Banking. For example, the Conference Board's report paraphrased Mr. Bruckner and Ms. Pappa, noting "investment, consumption, and output significantly increase nine to seven years before the Games in bidding countries."
Prof. Tombe, however, said the pair argue the positive effects of hosting the Olympics are smaller for open economies such as Canada compared with closed economies; and that the gains are smaller for cities hosting the Winter Games rather than the Summer Games. "The cumulative effects are also not estimated with sufficient precision to draw strong conclusions," Prof. Tombe said. "Taken at face value, this study [by Bruckner and Pappa] suggests Canada should expect little if any boost from hosting the Games."
Calgary's administrators, in a public document delivered as part of the July 31 council meeting, summarized the work Prof. Tombe and Prof. Humphreys provided in two sentences, omitting their damning critiques.
"The city's economist and two contracted academics conducted peer reviews of the economic impact reports conducted by Deloitte and the Conference Board," the city document said. "The academic evaluation of the economic impact reports suggests bidding and hosting the games should be based more on a full cost benefit analysis rather than estimates that are used in the conventional input-output model."
Carrie Tait