Overstated Claims for Positive 2010 'Games Effect'

Like the 2011 Stanley Cup final, the PricewaterhouseCoopers Games Effect series of reports went the distance and left a confusing, frustrating legacy.

The seventh and last edition of the British Columbia and federal government-sponsored reports was published Oct. 27. It was not an exhaustive audit, but instead the underlying intention was to convince taxpayers that their investment in the 2010 Winter Olympics was worth it.

Initial estimates of a $10 billion bonanza trumpeted by Premier Gordon Campbell and Finance and Olympics Minister Colin Hansen never materialized.

PWC estimates a $2.3 billion gross domestic product impact for the 2003 to 2010 period. Impressive? Until you consider the real GDP in the Games year alone was $154 billion.

Tourism got a $228 million shot in the arm over the seven-year period, of which $139 million was for food, beverage and lodging, $33 million transportation and $18 million shopping.

What about the 'aversion effect'?

The report measures incremental impacts generated by federal government spending and investment from other out-of-province sources and offers a surprising revelation about the host province.

"In fact, much of the spending by B.C. residents during the Games was not truly incremental. A large portion would have otherwise been spent on other forms of entertainment or activities somewhere else in the province (e.g., ski resorts, museums, festivals, theatres)."

The $3.48 billion in incremental spending from 2003-2010 was led by construction ($1.26 billion), operations ($1.54 billion) and tourism ($230 million).

"The majority of the third-party spending (on construction) is due to the City of Vancouver assuming responsibility for funding and completing the Vancouver Olympic Village."

The report's timing is noteworthy. It was released just three days before Guadalajara's 2011 Pan American Games in Mexico conclude and the Pan Am flag is handed to Toronto. The federal government wants to get Ontario excited about the 2015 "Golden Horseshoe" Games. Which probably explains why the B.C. Finance Ministry wouldn't act on its own and disclose the cost of the PWC reports.

A key omission from the Oct. 27 report is the so-called aversion effect. Mega-events, according to the College of the Holy Cross in Worcester, Mass., cause host city residents to alter their consumption patterns and Games-time visitors tend to displace both locals and regular visitors.

As such, a May 2010 report by Holy Cross found the 2002 Salt Lake Winter Games "had a modest short-run impact on employment and no significant impact on total employment in the long run." That followed a November 2008 report that found hotels and restaurants in Utah gained $70.6 million, but general merchandise sales fell $167.4 million.

Five-ring chaos

PWC included a disclaimer that it "relied upon the completeness, accuracy and fair presentation of all the information, data, advice, opinion or representations" from public sources and the B.C. and Federal Olympic Secretariats." Which may explain some key errors of omission and commission.

Games Effect, page 24: "The Olympic and Paralympic medals were created using e-waste, including metal salvaged from televisions, circuit boards and monitors."

Reality: To read the report, you'd think VANOC and its sponsor Teck spun gold (silver and bronze, too) out of garbage. Medals actually contained just trace amounts of old computer parts and TVs: 1.52 per cent of each half-kilogram gold medal, bronze had 1.11 per cent of e-waste and silver medals had a .122 per cent sliver. Hidden in the Teck 2009 sustainability report is this gem of sustainable travel: "To maximize recycling efficiency, we sent some of our e-waste to Umicore facilities in Belgium in order for them to process our e-waste and provide us with metals that were then used in the Olympic medals."

Games Effect, page 125: "During the Games, VANOC and BC Hydro used a real-time online dashboard to track electrical energy consumption and carbon reductions achieved at Olympic sites. The Venue Energy Tracker was created by Vancouver-based Pulse Energy."

Reality: The dashboard didn't include the biggest, most-seen venue of them all. B.C. Place Stadium, site of the opening, closing and nightly medals ceremonies, ran for two months on Aggreko diesel generators that raised the ire of neighbours angry with the all-night noise and exhaust. VANOC eventually fashioned wooden mufflers. There was even a diesel spill one night in January 2010.

Games Effect, page 60: "The 2010 Winter Games enjoyed the most extensive coverage ever produced for the Winter Games reaching a record potential audience of 3.5 billion people worldwide. The Games were covered by 235 broadcasters and television stations in 220 territories."

Reality: The IOC's own July 2010-published Marketing Report said the potential audience reach was 3.8 billion but the actual estimated audience was 1.8 billion. That's almost half the inflated 3.5 billion estimate of viewers announced midway through the Games by marketing director Timo Lumme.

Games Effect, page 5: "Canadian athletes responded to the medal challenge by winning 14 gold, seven silver and five bronze medals during the Olympic Games for a total of 26. With that success, Canada earned the distinction of winning more gold medals than any other country at a Winter Olympics."

Reality: The $110 million Own the Podium high-performance program pumped $97.55 million into Canadian sport from 2006 to 2010 with the goal of making Canada the overall medal champion with 35. Instead, the United States (37) and Germany (30) took home more medals. The lofty goal for the home team was largely forgotten after Canada won hockey gold in the final event of the Games.

Games Effect, page 37: "On the municipal level, the estimated economic impacts of the Metro Vancouver Commerce 2010 Business program's $168.8 million investment deals are estimated to be $306.2 million in total output and $156.2 million in GDP."

Reality: MVC's $168.8 million figure, coincidentally contained in an MVC-sponsored report by PWC, was widely discredited when released last February. The estimate relied heavily on a controversial, unverified claim that the taxpayer-funded Olympic hospitality program helped attract special effects-heavy Hollywood North-lensed blockbusters Thor, Tron: Legacy and Mission: Impossible 4. Only $22.4 million of the alleged windfall was actually for recurring expenses, like office rents and salaries. MVC has refused to publish the list of the 97 executives it plied with free Olympic tickets, dinners and drinks.