Vancouver Goes for Gold

City looks for a return beyond 2010 Olympics' costs.

Monday, February 20, 2006

VANCOUVER - It's a safe bet the people of Turin now know a thing or two about Vancouver, thanks to the big log cabin that has sat in the middle of their downtown piazza since January. The British Columbia-Canada Place pavilion has been dubbed "Casa Canada" by locals. Since it opened in late January thousands of visitors have streamed through, soaking up the sights and sounds of the city that is set to host the next Winter Olympics in 2010.

It was a far different story a little more than two decades ago when Patrick Reid went to Italy in a bid to attract countries to Vancouver for the Expo 86 world fair.

"I had to carry around a map of North America with me so I could point the place out to people," said Mr. Reid, commissioner general of Expo 86. "I talked with the Italian minister of foreign affairs and he hadn't the faintest idea where Vancouver was."

The two events -- Expo 86 and the 2010 Olympic Games -- are inextricably linked in the minds of British Columbians. Expo, which opened its doors 20 years ago this April, put Vancouver, then a quaint community, on the map. The fair helped lift the province out of a recession. More importantly, it sparked one of the hottest real estate markets on the continent.

Now with four years to go to the Olympics, the city and province are hoping for more of the same.

"What I noticed in Expo 86 and what I see now with the Olympics is a big positive psychological lift," said Jimmy Pattison, the former car salesman who built Canada's largest privately owned company, Jim Pattison Group, and took on double duty to run Expo 86. "When that happens people invest money and they spend money because they feel optimistic."

Indeed, Gordon Campbell, the B.C. Premier, has projected the event could produce more than $10-billion in economic activity while creating thousands of jobs, equivalent to 230,000 worker years. The evidence is everywhere, from the mounds of earth carved away for a new transit line in Vancouver to the road crews blasting their way through mountainsides to expand the Sea-to-Sky highway to Whistler.

Meanwhile, the Vancouver Organizing Committee (VANOC) has plans to build $580-million worth of event facilities in Vancouver and Whistler. More than $1-billion more will be spent on operations.

But while few doubt the Olympics will be a boon for the region, it's also clear to many here the Olympics cannot repeat for Vancouver what Expo 86 did.

"The economic impact won't be the same, guaranteed, because Expo fundamentally changed this city," said Gordon Price, a former Vancouver city councillor and now a professor and lecturer of urban planning at both the University of British Columbia and Simon Fraser University. "Vancouver has a high profile now. The Olympics will be great, but it won't be the same."

Those who were involved in 1986 say the two events are very different. One was a six-month-long exposition that saw 22 million visitors pass through the turnstiles, while the other will be a two-week TV bonanza with two billion viewers. The actual number of visitors who set foot in the province during the games will be in the tens of thousands.

"People are as much if not more gung-ho about the prospects of the Olympics, but I don't think the effect will be the same," said Mr. Reid. "There will be legacies because of some of the venues, but nothing like the population influx and growth that followed Expo."

Mr. Pattison earned the princely sum of $1 a year to run Expo 86. You can forgive the billionaire if he didn't bother to cash the cheques. Today they hang in a frame, near scores of photos of Mr. Pattison with various politicians, celebrities and business leaders.

Ever the shrewd businessman, Mr. Pattison is wary of predicting what the Olympics will mean to the B.C. economy -- "Tell me what the Canadian dollar will be, tell me what interest rates and inflation will be. These are uncontrollable factors," he said, sitting in his 18th-floor office overlooking the harbour.

But at the same time he's keenly aware the Games are already having an impact. As he talks, the constant clang of construction on the new Vancouver convention centre next door echoes through his office. The centre will act as the media broadcast centre during the Olympics.

"Business in B.C. had never been better in my lifetime before the Olympic deal even came along," said Mr. Pattison. "And now you add on the Olympic construction, the new condos downtown, the transit line. The Olympics are coming on top of dozens of good things."

That wasn't the case prior to Expo. British Columbia had been mired in a recession and unemployment was high when Grace McCarthy, a senior cabinet member in the Bill Bennett government, came up with the idea of bringing the fair to Vancouver.

"We knew we needed something to transform the province," she said. "There were a lot of people who said we shouldn't spend money this way, but we persevered."

As with the Olympics, there were predictions about the economic impact of the fair. Organizers believed it would generate the equivalent of about $4-bilion (after adjusting for inflation) of additional output in the B.C. economy.

In reality, the Expo sparked an influx of new businesses and immigration from Asia that helped fuel an explosion of real estate development that reshaped the city.

It was a rocky run-up to the fair, though. Battles between the government and union at one point led Mr. Pattison to suggest pulling the plug on the event. There were also concerns about cost overruns.

The 2010 Olympics face their own set of challenges. Contracts for roughly 90% of public workers expire in the coming months. To head off labour unrest that could threaten preparations for the Games, the province has offered up to $6-billion to settle contracts, with $1-billion available if unions sign by the end of next month. There's also $300-million in payouts available if long-term contracts are signed that extend to 2010.

Costs have also escalated due to a severe shortage of skilled workers and higher material prices. Just before heading to Turin, John Furlong, chief executive of VANOC, asked the federal and provincial governments to cover an extra $110-million shortfall in the Olympic budget. The province can tap a $139-million contingency fund it created for Olympic cost overruns but Ottawa has no such fund. Neither level of government has so far committed to the funding increase.

Lurking in the back of everyone's mind is the US$2.5-billion debt carried by Montreal after the 1976 Olympics, which will finally be paid off this year.

Zuzana Fromm, an economist and instructor at the British Columbia Institute of Technology who has written on the economic impact of the Games, is not yet concerned about debt levels. The provincial auditor-general has forecast a shortfall of $1.25-billion from the games, but as a percentage of the province's primary budget, she said it's actually a small amount.

"People say, 'Oh, geez, I don't want my taxes to go up like Montreal' but it's not even half a per cent," she said.

But she still sees things that worry her. As people rush to work in the construction industry, will that lead to large unemployment after the Games? And what lost opportunities are there because the money is being spent on the Olympics and not elsewhere?

"I'm on the fence on this one," said Ms. Fromm.

"Billions of people will be watching and that's great brand recognition for Vancouver, but it won't come automatically," said Darcy Rezac, managing director of the Vancouver Board of Trade. "With this happening and the world's spotlight on B.C., we have to make sure this opportunity doesn't pass us by."

The job of ensuring that doesn't happen belongs to Annette Antoniak, head of the B.C. government's Olympic secretariat. Speaking from Turin, where she accompanied 80 B.C. companies attempting to drum up business in Europe through the pavilion, Ms. Antoniak said organizers have quizzed officials from past Olympics on what they learned about attracting investment -- and what they wish they'd done differently.

The most common regret from other cities was that they hadn't done enough to use the two-week event to generate business over the long term. Ms. Antoniak said B.C.'s goal is to generate a return on the province's $600-million investment in the Games.

"We all know what Expo did for British Columbia and our economy," said Ms. Antoniak, who worked at the fair. "But attracting economic investment is important if we're to continue that turn which we've taken. Turin is our first opportunity to leverage the 2010 Games on the international stage."

To that end, the government has used the Turin Olympics as something of a trade mission for small to medium-sized companies in the province, such as video game producer Electronic Arts Inc. of Vancouver and Victoria's Carmanah Technologies Corp., a maker of solar-powered equipment.

B.C. has also offered courses to instruct small businesses around the province how to bid for Olympic contracts to supply everything from hockey pucks to shovels to chairs.

So while businesses line up for a piece of the Olympic action, only time will tell whether the Games can translate into a gold medal for economy. Many believe it will.

"It's going to be an opportunity to once again showcase the province to the world," said Ms. McCarthy. "And I think it will have a resounding effect afterwards."